Luxfer Holdings PLC Annual Report 2020

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FY2020 Annual Report · Luxfer Holdings PLC

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Registered No. 03690830

LUXFER HOLDINGS PLC

Annual Report and Financial Statements

31 December, 2020

LUXFER HOLDINGS PLC ¦ Lumns Lane ¦ Manchester ¦ M27 8LN

LUXFER HOLDINGS PLC

Contents

STRATEGIC REPORT

Principal Activities and Review of the Business

Strategy and Business Model

Key Performance Indicators (“KPIs”)

Review of the Year Ended 31 December, 2020

Environment, Social and Governance ("ESG") Matters

Principal Risks and Uncertainties

GOVERNANCE

The Board of Directors

Corporate Governance

Executive Leadership Team

Directors’ Report

Directors’ Interests and Related Party Transactions

Directors’ Remuneration Report

Remuneration Report

Statement of Directors' Responsibilities in Respect of the Financial Statements

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LUXFER HOLDINGS PLC
FINANCIAL STATEMENTS

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Cash Flow Statement

Consolidated Statement of Changes in Equity

Notes to the Consolidated Financial Statements

Company Balance Sheet

Company Cash Flow Statement

Company Statement of Changes in Equity

Notes to the Company Financial Statements

120

121

122

123

LUXFER HOLDINGS PLC

Glossary of Terms

Unless the context in which we use the terms indicates otherwise, the following terms used in this report have
the following meanings:

AGM

Annual General Meeting of the Company.

Articles

The Articles of Association of Luxfer Holdings PLC adopted by special resolution of the
Company on 26 October 2011, effective from the date of the I.P.O. (and subsequently
updated).

Companies Act U.K. Companies Act 2006.

FPI

GAAP

Group

IFRS

I.P.O.

NYSE

Foreign Private Issuer under the SEC registration rules.

Generally Accepted Accounting Principles is an accounting standard adopted by the U.S.
Securities and Exchange Commission.

Luxfer Holdings PLC and its subsidiaries.

International Accounting Standards in conformity with the requirements of Companies Act
2006

The Initial Public Offering in the U.S. completed by Luxfer Holdings PLC on 9 October,
2012.

New York Stock Exchange.

£0.50 Ordinary
Shares

SEC

Year

LTIP

The Company’s ordinary shares of £0.50 each.

Securities and Exchange Commission of the U.S.

1 January, 2020, to 31 December, 2020.

Long-Term Umbrella Incentive Plan.

LUXFER HOLDINGS PLC

STRATEGIC REPORT

Principal Activities and Review of the Business

The principal activity of Luxfer Holdings PLC is that of the holding company for the Luxfer Group.

Luxfer is a global manufacturer of highly-engineered industrial materials which focuses on value creation using
its broad array of technical know-how and propriety technologies. Luxfer's high-performance materials,
components and high-pressure gas containment devices are used in defense and emergency response,
healthcare, transportation and in general industrial applications.

We have a long history of innovation derived from our strong technical base. We work closely with customer to
apply innovative solutions to their most demanding product needs. Our area of expertise covers the chemical
and metallurgical properties of magnesium, zirconium, carbon and rare earths. We have pioneered the
application of these materials in many high-technology industries. For example, we were the first to use rare
earths to develop and patent a magnesium alloy (EZ33A) for use in high-temperature aerospace applications
such as helicopter gearboxes. We were also at the forefront of the commercial development of zirconia-rich
mixed oxides for use in automotive catalysis.

Luxfer has a global presence, operating 16 manufacturing plants in the U.K., U.S., Canada and China, four of
which relate to discontinued operations. We also have a joint venture in Japan. We employ approximately 1,400
people, including temporary staff, of which approximately 200 relate to discontinued operations. Luxfer operates
in two business segments - Elektron and Gas Cylinders:

Our Elektron Segment focuses on specialty materials based primarily on magnesium and zirconium. Our key
product lines under the Elektron Segment includes:

•

Advanced, lightweight, corrosion- and flame-resistant magnesium alloys, including our our dissolvable
Solumag® alloy.

• Magnesium powders used in countermeasure flares that protect aircraft from heat-seeking missiles and

in heating pads for self-heating meals used by military and emergency-relief agencies.

•

High performance zirconium-based materials and oxides used as catalysts and in the manufacture of
advanced ceramics, fiber optic fuel cells, and many other performance products.

• Magnesium, copper, and zinc photo-engraving plates for graphic arts and luxury packaging.

Our Gas Cylinders Segment manufactures and markets specialized products using carbon composites and
aluminum. Our key product lines under the Gas Cylinders Segment include:

•

Carbon composite cylinders for self-contained breathing apparatus (SCBA), used by firefighters, first-
responders, SCUBA divers, and other personnel who operate in potentially hazardous environments
such as mines.

Composite cylinders used for containment of oxygen and other medical gases used by patients,
healthcare facilities and laboratories.

Carbon composite cylinders for compressed natural gas (CNG) and hydrogen containment in alternative
fuel (AF) vehicles.

LUXFER HOLDINGS PLC

Strategy and Business Model

Despite the exceptional challenges of 2020, Luxfer's team ingenuity and tenacity allowed us to maintain a strong
balance sheet, accelerate many of our lean initiatives, and deliver customer value throughout the year. We
continued to make strong progress on our strategic Transformation Plan despite the adversities faced due to the
COVID-19 pandemic. Commenced in 2017, the Transformation Plan serves as a key driving factor in our
strategy, allowing us to simplify Luxfer's structure, launch growth initiatives, deliver strong productivity, and invest
in our culture and talent. Under our Plan, we are confident in our ability to continue generating long-term
shareholder value.

After thoughtful review of our portfolio of businesses and the future trajectory of Luxfer, we have concluded that it
is in the best interest of our shareholders, employees and customers to divest most of our aluminum assets. This
will enable us to focus our strategic efforts and capital on our key markets to grow the Group. The divestiture will
impact three of our Gas Cylinders operations, including our Superform location in U.K., our aluminum cylinder
operation in Graham, North Carolina, U.S. and our Superform location in the U.S. The remaining Gas Cylinders
sites are involved in the manufacture of innovative composite cylinders and systems, which are an integral part
of Luxfer's future growth profile.

As a part of Phase 1 of our Transformation Plan, our operations have been substantially simplified after the
divestment of the aluminum operations. Other objectives achieved during Phase 1 have expanded our investor
base, streamlined our financial reporting and enhanced our corporate governance, while also strengthening our
balance sheet. Today, the focus of the Plan is to drive growth, both organically and through value-creating
acquisitions. We have laid the groundwork for successful organic growth by rebuilding our new products pipeline
and establishing commercial excellence. Our business strategy is underpinned by the Luxfer Business
Excellence Standard Toolkit ("Luxfer BEST"), which consists of the following key themes:

•

A common set of values that drive accountability, innovation, customer first, personal development,
teamwork and integrity;

A lean enterprise philosophy comprised of the five pillars of Luxfer BEST which drive operational
excellence in sales, marketing, innovation, human resources, supply, manufacturing, information
technology and finance;

Disciplined capital allocation with the aim of maximizing organic growth and the product portfolio value
through value-enhancing acquisitions and divestitures;

Balanced scorecards reviewed by our leadership teams to measure performance and ensure that
compensation is commensurate with individual performance; and

A published Customer Charter designed to retain and grow our customer base and capture additional
market share.

Our Transformation Plan, underpinned by Luxfer BEST, are at the core of our business strategy. We believe that
these tools and strategies give us a stronger competitive advantage, allowing us to focus on innovation and new
product development, further drive our strong technical expertise and know-how, diversify our customer base,
and accelerate shareholder value creation.

LUXFER HOLDINGS PLC

Key Performance Indicators (“KPIs”)

Luxfer used the following performance indicators to assess its development against its strategic and financial
objectives in 2020.

Since 2018, KPIs were monitored under U.S. GAAP. and these reconciliations to non-GAAP measures can be
found in our Form 10-K filed with the SEC on March 2, 2021. Prior to 2018, the primary GAAP was IFRS.

All years have been restated for discontinued operations.

Operating performance

Revenue
Adjusted net income1

Basic earnings per share

Adjusted net income basic earnings per share
Adjusted EBITDA2

Revenue per employee

Financial performance

Net cash flow from operating activities
Net debt to adjusted EBITDA3

2020

2019

2018

2017

2016

324.8 373.4 401.9 348.0 324.2

28.9

40.9

48.0

27.6

0.61

0.15

0.55

0.43

1.03

1.47

1.73

1.03

53.9

67.1

79.6

57.1

20.5

0.69

0.93

46.7

226

$'000s

256

279

285

247

times

56.9

10.2

57.3

45.2

29.2

1.0

1.2

0.8

1.6

1.9

Non-financial performance
Number of days lost following accidents at work4
ISO 14001 environmental management system certification5

Economic indicators

Average U.S. dollar to GBP sterling exchange rate

Average Euro to GBP sterling exchange rate

work-days

328

208

197

215

$:£

€:£

69.2

86.4

92.1

90.0

91.8

1.28

1.33

1.30

1.13

1.12

1.13

1.14

1.34

1.22

A non-GAAP measure for net income after tax, excluding certain non-trading items. Reconciliation to GAAP
measure is disclosed in our Form 10-K, filed with the SEC on March 2, 2021.
A non-GAAP measure for earnings before interest, tax, depreciation and amortisation and other items.
Reconciliation to GAAP measure is disclosed in Form 10-K filed with the SEC on March 2, 2021.
Net debt is defined as cash and cash equivalents less non-current bank and other loans.
Under regulations issued by the Occupational Safety & Health Administration of the U.S. Department of Labor, the
number of days absent for each accident is capped at 180 days.
Percentage of revenue originating from ISO14001-certified businesses.

LUXFER HOLDINGS PLC

Review of the Year Ended 31 December, 2020

Although we faced challenges in 2020 due to the impact of the COVID-19 pandemic and related macroeconomic
conditions, we continued to launch growth and lean manufacturing initiatives, deliver strong productivity, and
invest in our culture and talent. This strategic progress reflects our focus on executing our Transformation Plan,
which is designed to profitably grow the Luxfer business and increase returns to our shareholders. Further
details on our Transformation Plan can be found on page 4 of the Strategic Report.

From 2016 to 2019, our top line growth averaged 5% and, however due to COVID-19 in 2020, our revenue
performance for 2020 showed a decline of 13%. However, our cost reduction efforts are a primary driver of our
4% annual adjusted EBITDA growth from 2016 to 2020, with an average adjusted EBITDA margin over 16%.
We ended 2020 with a stronger balance sheet, with an improvement in our net debt to $51.6 million, leading to a
net debt to EBITDA ratio of 1x compared to 1.2x at the end of 2019. We generated $48.7 million in free cash flow
over the year, using approximately $4 million in cash for restructuring activities related to our Transformation
Plan. Net income from continuing operations for 2020 was $17.8 million compared to $6.0 million in 2019. We
continued to return funds to shareholders in the form of regular dividends each quarter throughout 2020. As
markets recover we expect to return to growth in 2021 and with a strong balance sheet, Luxfer is well positioned
to create additional value for our shareholders.

Translation Exchange Rates

The consolidated financial statements are presented in U.S. dollars, the reporting currency of the Group. The
principal currencies used to translate the results of non-U.S. operations is GBP sterling. In 2020, GBP sterling
fluctuations relative to the U.S. dollar resulted in net favourable movements when translating the operating
results of U.K. operations into U.S. dollars.

Revenue

On an IFRS reported basis, revenue from operations was $324.8 million in 2020, a decrease from $373.4 million
in 2019. The reasons for revenue decline are discussed in detail by segment below.

Elektron Segment revenue in 2020 was $182.9 million compared to $219.9 million in 2019, a decrease of 16.8%
on the prior year, largely as a result of COVID-19 related disruption to General Industrial and Transportation end
markets. Revenue was lower in the Segment primarily due to:

•

Decreased sales of zirconium-based industrial catalysts;

Lower sales of photo-engraving plates and magnesium countermeasure flares;

Lower sales of magnesium aerospace alloys; and

$7.6 million revenue decline as a result of the divestiture of Elektron's magnesium Czech recycling
business in 2019.

This was partially offset by increased revenues from Luxfer Magtech chemical detection kits.

Gas Cylinders Segment revenue was lower at $141.9 million compared to $153.5 million in 2019, a 7.6%
decrease on prior year. This decrease was primarily the result of COVID-19 related disruption marked by
temporary customer shutdowns, especially reduced sales of SCBA composite cylinders used by first responders.
The decrease in revenue was partially offset by continued growth in alternative fuel cylinder sales.

Cost of Sales and Gross Profit
The 3.0 percentage point decrease in gross profit as a percentage of sales in 2020 from 2019 was primarily the
result of:

•

Adverse sales mix;

Unfavorable foreign exchange variances; and

Impact of short-term process inefficiency following plant consolidation exercises.

These decreases were partially offset by cost savings resulting from our continued effort to reduce production-
based costs, partially derived from our Transformation Plan.

LUXFER HOLDINGS PLC

Operating Profit

Operating profit of $31.0 million increased 36.6% from $22.7 million in 2019. The $24.5 million decrease in gross
profit has been offset by the effect of the Company's cost saving initiatives, which has contributed to the
reduction in administrative and distribution costs. Restructuring and other expenses of $7.3 million were down
from $29.6 million in 2019.In 2020, there was an additional $5.4 million in costs relating to the closure of Luxfer
Gas Cylinders' French site.

In response to uncertain global economic conditions, we undertook actions to reduce the Company's cost
structure and improve operating efficiency. These actions included a workforce reduction program resulting in
$1.4 million of severance-related charges, of which $0.4 million and $0.9 million was incurred in the Gas
Cylinders and Elektron segment respectively, and $0.1 million in Other.

There has also been an additional $0.4 million charge recognized as the result of the Company's decision to
commence a project to remove low-level naturally occurring radioactive material (NORM) from a redundant
building at Elektron's Manchester, UK site.

Taxation

In 2020, we reported a tax charge of $6.2 million on profit before tax of $24.0 million, representing an effective
tax rate of 25.8%. The charge of $6.2 million was made up of a current income tax charge of $2.2 million and a
deferred income tax charge of $4.0 million. The 2020 effective tax rate was impacted due to the effect of non-
deductible expenses linked to restructuring projects.

In 2019, we reported a tax charge of $8.2 million on profit before tax of $14.2 million, representing an effective
tax rate of 57.7%. The tax charge was made up of a current income tax charge of $4.2 million and a deferred tax
charge of $4.0 million. The 2019 effective tax rate was significantly impacted due to the effect of large non-
deductible expenses linked to restructuring projects.

Net Income for the Year

Net income for the year from continuing operations was $17.8 million, compared to $6.0 million in 2019. The
increase can be attributed to the significantly reduced restructuring and other expense and lower administrative
expenses coupled with a lower effective tax rate; partially offset by the reduction in gross profit as a result of
COVID-19 disruption.

Cash Flow

In 2020, net cash flows from operating activities increased by $46.7 million to $56.9 million from $10.2 million in
2019. The increase is predominantly due to improvements in working capital and an approximate $15 million
reduction in cash spent on restructuring activities. The Company has continued to return funds to its
shareholders in the form of regular dividends each quarter throughout 2020.

Net cash used in investing activities decreased to $7.1 million compared to $8.9 million in 2019. Capital
expenditure in 2020 was $8.2 million, a $5.7 million reduction compared with $13.9 million in 2019. In 2020 the
Company received $1.5 from the sale of its Indian joint venture, compared with $4.4 million and $1.2 million as a
result of the sale of the Czech recycling business and sale of property, plant and equipment respectively in 2019.
The Company paid $0.4 million, the final installment, in relation to deferred consideration in 2020, compared to
$0.5 million in 2019.

The Company had net cash outflows from financing activities $59.5 million compared to $1.3 million in 2019. The
main reason for the decrease was the $25 million early repayment of the loan note due in 2021, coupled with the
$13.2 million reduction in the RCF. Cash outflows in respect of dividend payments to holders of our ordinary
shares were $13.6 million, consistent with 2019.

Shareholder Equity and Borrowings

Shareholder equity as at December 31, 2020, was $155.3 million, compared to $161.9 million at December 31,
2019, the decrease being primarily attributable to the payment of dividends, unfavorable measurement of
defined benefit pension plans and movements relating to share-based compensation, partially offset by the
contribution of net income and FX translation gains. The Company had gross debt of $53.1 million and net debt
of $51.6 million as at December 31, 2020. Invested capital, defined as total shareholder equity plus net debt,
was $206.9 million as at December 31, 2020; this compares to an equivalent figure of $242.6 million in 2019.

LUXFER HOLDINGS PLC

Future Developments

Operating objectives and trends that we expect to impact Luxfer in 2021 include the following:

•

Proactive responses to the COVID-19 pandemic including health and well-being initiatives, stimulating
demand for products, ensuring continuity of supply and focused cost savings programs;

Divestiture of non-strategic aluminum businesses (identified as discontinued operations) and integration
of the acquisition of Structural Composites Industries LLC (SCI), in the Gas Cylinders segment;

Refocus on productivity acceleration and growth recovery post COVID-19 as we capitalize on lean
manufacturing initiatives and pursue faster product innovation;

Continued focus on developing global talent and fostering a high-performance culture; and

Improved operating cash generation with lower restructuring activity and maintaining strong working
capital performance.

Essential Contracts or Arrangements

Apart from our financing agreements, we do not have any individual contracts or other arrangements that are
fundamental to the ability of the business to operate effectively.

LUXFER HOLDINGS PLC

Environment, Social and Governance ("ESG") Matters

At Luxfer, we recognize the importance of environmental stewardship, social responsibility, and leading
governance practices. Advancing ESG matters is not only crucial to our business, our customers, and to all our
stakeholders, but it is simply the right thing to do. While 2020 brought disruption with the COVID-19 pandemic, it
also drove health and safety issues to the forefront, challenging us to think differently about our world, our
experiences, and our beliefs. Although difficult at times, 2020 inspired us to reflect on our purpose. We are taking
deliberate steps to fully integrate ESG into our strategy and daily actions which reflects our commitment to
sustainable growth and long-term financial performance.

We are more devoted than ever to ESG efforts and social responsibility. The publication of our first-ever ESG
Report in November 2020 set the stage for integration of sustainable practices and resource management
throughout the Company. In addition, the Report sets forth our environmental protection goals, which address
emissions, water, and waste-to-landfill reduction targets which we seek to achieve by 2025. It discloses social
and employment statistics, community outreach activities, provides an overview of our governance structure and
the Board of Director's role in ESG improvements. New corporate policies were unveiled in the Report, including
our new Third Party Code of Conduct and the Environmental, Health and Safety Policy. The primary function of
the Report is to initiate consistent reporting on ESG matters, improve our transparency and disclosure, and
formulate the basis for an informed conversation between Luxfer and our stakeholders. We have committed to
publishing a new ESG report on a biennial basis going forward.

While Luxfer's management team is responsible for developing the Company's strategy and managing day-to-
day operations, the Board of Directors oversees the Company's direction, including governance-related policies
and practices; our system of risk oversight and management; how we advance environmental sustainability and
climate related challenges; health and safety; human rights; human capital management and corporate culture;
and the manner in which we serve our customers and support our communities. We recognize that the long-term
success of our Company requires continued focus on these evolving topics and a commitment to regularly
evaluate and improve our performance in relation to them.

Helping Create a Greener World

With transportation being one of the highest pollution-emitting sectors, many of our products already serve the
growing need to safeguard the environment in this field. For example, Luxfer played a vital role in developing the
U.K's first hydrogen-powered train. The project was comprised of an electric train which was retrofitted to run
using our G-Stor® H2 hydrogen fuel system and began operations in September 2020. We have also developed
partnerships with bus manufacturing companies and, in late 2020, unveiled the first hydrogen-powered double-
decker bus. Our hydrogen fuel systems have been applied to a variety of vehicles in a series of world firsts
including the first commercially produced hydrogen powered trucks, refuse trucks, boats and tractors.

Similarly, our zirconium-based autocatalyst products help reduce automotive emissions. Driven by increasing
legislation, we work with our customers to offer tailor-made solutions based on our Gasoline Particulate Filtration
systems, Diesel Oxidation Catalysts, Diesel Particulate Filters, passive NOx Absorbers and selective catalytic
reduction systems. These systems reduce the amount of toxic gasses and pollutants contained in exhaust from
traditional diesel and gasoline engines. Further, our unique magnesium alloys used in aerospace and automotive
designs enable lighter and stronger models, which help maximize fuel efficiency, lower emissions, and increase
performance through lightweight materials.

Innovating products that help our customers reduce their emissions is just as important to us as reducing
emissions from our own operations. Our facility located in Madison, Illinois, U.S. recently installed a thermal
oxidizer to help with Volatile Organic Compound ("VOC") abatement, which reduced VOC output by 98%,
preventing approximately 4 metric tons of VOC's from being released into the atmosphere. In addition to
greenhouse gas emission reduction initiatives, we are also working to implement additional projects to assist
with our water usage and waste-to-landfill reduction goals as we look forward to achieving the environmental
targets set out in our 2020 ESG report by 2025.

LUXFER HOLDINGS PLC

Managing Environmental Impact

The effects of climate change and the degradation of earth's natural resources are becoming more apparent
each year. As a global company, we have a vision to be a leader in sustainable business within our industry,
lending us an opportunity to not only reduce our impact on the environment, but also have a positive one. While
our facilities are designed to mitigate negative environmental impacts from our operations as much as possible,
there is still more we can do. With this in mind, we committed to our 2025 Environmental Goals, which were
published in our 2020 ESG Report. We recognize the importance of holding ourselves accountable to the
environment, and our Environmental Goals were set with a view to reduce the environmental impact of our
operations by 2025. Our 2025 Environmental Goals are:

•

20% reduction of CO2e

20% reduction in waste sent to landfill

15% increase in recycled packaging

10% increase in material efficiency

10% reduction in freshwater usage

The publication of our ESG Report and our 2025 Environmental Goals serves as a first step to increase our
transparency and raise the bar for more sustainable operations. To put these goals into action, we have
implemented our Environmental, Health, and Safety ("EHS") Management System. Based on ISO 14001
standards, our EHS Management System is comprised of policies, procedures and objectives focused on
compliance, footprint reduction and management of EHS performance. Luxfer's businesses track progress and
perform self-audits in accordance with the EHS Management System with the goal of continually improving the
safety of our products, enhancing environmental protection initiatives and preventing occupational illnesses and
injuries.

We will continue strengthening our controls as we work toward achievement of our 2025 Environmental Goals.
At present, over 80% of all Luxfer operations are ISO 14001 certified. Additionally, various facilities have been
recognized as ISO 9001, ISO 45001, ISO 13485, AS 9100, IATF 16949 and NSF 61 compliant. We are confident
that our internal programs, combined with initiatives governed by ISO 14001, will help us further reduce our
environmental footprint and achieve our 2025 Environmental Goals.

In addition to these controls and certifications, certain Luxfer businesses participate in compliance and
knowledge-sharing forums with other companies in our industry. For example, our U.K. MEL Technologies
business is subject to the European Union Regulation, Evaluation, Authorization and Restriction of Chemicals
("REACH") controls (incorporated into U.K. legislation following the U.K.'s exit from the European Union.), which
aims to hold manufacturers and importers responsible for understanding and managing the environmental and
health risks associated with the use of certain chemicals. Our MEL Technologies business participates as a
member or lead member in REACH consortia, during which manufacturers and importers of like substances
cooperate with one another and collect information, gather data, and register certain chemicals in fulfillment of
REACH requirements. Participants work together to assess potential hazards and risks posed by these
chemicals and how those risks can best be controlled.

Managing Energy Use

Energy is a major requirement for Luxfer's operations which involve melting and forming metals, changing the
state of chemicals, and running heavy machinery. We are subject to a wide variety of regulations regarding
energy usage in the U.K. and take every step necessary to ensure our compliance with those regulations. Our
U.K. plants have signed up for the European-wide Energy Saving Opportunity Scheme, which mandates that all
large organizations calculate the total energy use and perform energy audits across their businesses once every
four years. Baseline audits were performed in 2017 and will occur again in 2021. Our U.K. operations are also
registered with and regulated under the Carbon Reduction Commitment Energy Efficiency Scheme ("CRC"),
designed to further mobilize companies to reduce CO2 emissions by incentivizing energy efficiency. Further, all
Luxfer U.K. operations participate in Climate Change Agreements, with the exception of our Gas Cylinders plant
due to the nature of its cold-extrusion process.

In addition to regulatory requirements, Luxfer also operates several internal programs that will help us increase
our energy efficiency. For example, Luxfer's Reduced Energy Demand ("RED") Program identifies initiatives that
will reduce energy consumption and provide more efficient operation. Our RED projects coordinate with our
energy partner to asses each Luxfer site for opportunities to reduce energy consumption, create less waste, and
educate our employees on the value of environmental protection. Any RED proposals include a detailed analysis
measuring the financial, environmental and safety impact of each project, and will include a renewable energy
alternative that will be implemented if financially and practically feasible.

LUXFER HOLDINGS PLC

Greenhouse Gas Emissions
Each Luxfer business unit monitors its usage of the following:

•

Electricity (from utility bills);

Natural gas (from utility bills);

Propane (for fork-lift trucks from number of bottles used multiplied by capacity);

Cover gases (to prevent molten metal from oxidizing from number of cylinders used multiplied by
capacity);

Any other greenhouse gases used in the manufacturing process (from amount invoiced).

Other than for electricity, the conversion into equivalent CO2 tonnes is done using standard conversion factors
readily available from websites of, for example, DEFRA in the U.K. Broadly speaking, natural gas and other pure
gases have a very similar CO2 equivalency no matter where it is sourced.

For electricity, the CO2 equivalency is dependent on the power stations that generate it. Accordingly, each Luxfer
business uses the ‘local’ equivalency factor published on official sites. For our U.S. businesses this is published
on the U.S. Environmental Protection Agency website, and is updated each year according to the mix of power-
generation facilities in use. Historically, the U.K. has been a heavy user of electricity generation but it has
transitioned away from using coal-fired power and is increasingly adopting zero-emissions technologies,
especially off-shore wind power.

Each Luxfer business unit has a manager responsible for data collection, which is subsequently collated
centrally at year end, along with other accounting information. Natural gas and all other gasses are classified as
'Scope 1' and electricity usage is classified as 'Scope 2'. Year-on-year figures are used to identify any anomalies,
and similar business units are compared to one another to ensure consistency and understanding of the
information. At present, we do not collect details of emissions from travel.

The Greenhouse Gas (“GHG”) emissions statement below provides a summary of the Group GHG (Carbon)
emissions for the year ended December 31, 2020 compared to 2019. We report on both Scope 1 and Scope 2
emission sources:

Scope 1 emissions: Direct emissions from sources owned or operated by the Group such as natural gas usage

and other CO2 equivalent emissions such as SF6;

Scope 2 emissions:

Indirect emissions attributable to the Group due to its consumption of electricity.

Greenhouse Gas Emission Statement

Baseline year

Full year 2020

Consolidation Approach

Operational control.

Boundary

Consolidated factories operated by us to manufacture Group products.

Emission factor data source

U.K. sites: Conversion factors published by the Carbon Trust.
U.S. sites: Conversion factors published by the U.S. Environmental
Protection Agency for the state in which the site is located.
Sites in other countries have used their relevant countries conversion factor.

Intensity ratio
Group Metric - Sales value

CO2 equivalent tonnes per $1 million of sales value ($1mSV).
$324.8 million in 2020 (2019: $373.4 million)

Greenhouse Gas Emission Source

LUXFER HOLDINGS PLC

2020
(tCO2e)1 (tCO2e/$1mSV)

(tCO2e) 1

2019
(tCO2e/$1mSV)

Scope 1
Fuel combustion (natural gas and other CO2 emissions) and
operation of facilities
Scope 2
Purchased electricity
Statutory total (Scope 1 & 2) 2

54,124

40,218
94,342

166.6

123.8
290.4

71,764

29,448
101,212

192.2

78.9
271.1

Notes:

Tonnes of CO2 equivalent.

Statutory carbon reporting disclosure required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013.

Overall our total CO2e emissions decreased by 6.8% from continuing operations in 2020, however, our CO2e
emissions per $million of sales increased by 7.1%. From 2019 to 2020, fuel combustion (Scope 1) decreased by
24.6%, while purchased electricity (Scope 2) increased by 36.6%. We attribute the decrease in overall emissions
in part, to the divesture of several manufacturing plants, one of which was a large contributor to Scope 1
emissions through the use of propane in its operations. Another factor that impacted our overall statutory totals
for Scope 1 and Scope 2 emissions in 2020, particularly our CO2e emissions per $million of sales, is reduced
sales as a result of the COVID-19 pandemic.

Industry Engagement

Our Segments are active members of relevant industry associations and standards bodies, both in Europe and
North America, where they have a positive influence as members, officers, and technical advisors. They often
participate in, and chair committees within, those associations on technical and other matters of interest or
concern to their relevant industry, including standards, specifications and safety. These organizations include the
International Magnesium Association, the Chemical Industry Association, the Zircon Industry Association, the
Compressed Gas Association, the Metal Powder Producers Association, the British Standards Institute, the
Canadian Standards Association, the American Society of Testing and Materials, and many others.

LUXFER HOLDINGS PLC

Our People

A large and important part of our lives is spent on the job. We recognize that our employees are the basis of our
success and the foundation of our future. As such, we are committed to fostering an inclusive, honest, healthy
and diverse work environment. Entrenched in longstanding policies of Luxfer, we promote workforce diversity,
employee education and development, and community involvement. Through these policies and practices, we
continue to develop a world-class team. We constantly strive to create an environment where differences are
valued, supported and encouraged.

Human Rights and Labor Practices

We are committed to respecting and safeguarding internationally recognized human rights standards set forth in
the UN Universal Declaration of Human Rights and the UN Guiding Principles on Business and Human Rights,
and any laws at the national, regional and local levels. As such, our Code of Ethics and Business Conduct and
our recently updated Human Rights and Labor Practices Policy makes clear the principles, requirements and
expectations of Luxfer and its employees to protect fundamental human rights in all areas of our business.
These protections include fair and humane treatment, protections against forced labor and child labor, and fair
wages, benefits and working hours.

We assess our potential and actual impacts on human rights on a regular basis. As of 2020, Luxfer has obtained
ISO 45001/OHSAS 18001 certification for our labor and human rights management system, which covers up to
40% of our current operations. To ensure compliance with our standards and policies, our employees undergo
annual training on how to identify human rights violations and how to combat and prevent them. Through
adherence to these policies and application of learned skills, we have adopted sound human rights practices to
ensure that our employees are treated with the dignity and respect they deserve.

Equal Opportunity, Non-Discrimination & Anti-Harassment

Luxfer is an equal opportunity employer. We take every precaution to ensure that no applicant or employee
receives less favorable treatment on the grounds of any characteristic protected by law. We have a zero-
tolerance approach to discrimination during any stages of employment including recruitment, job assignment,
promotion, remuneration, training and benefits as set forth in our Equal Opportunity, Non-Discrimination & Anti-
Harassment policy. In line with this Policy, we are committed to providing a work environment free of
harassment, abusive behavior and unprofessional conduct based on any protected characteristics. Our policy
applies to all persons involved in the operation of the Company and any employee including supervisors,
managers, and any third-parties such as vendors, customers, independent contractors, unpaid interns and
volunteers.

Training is key to promote equal opportunities and diversity. Our talent acquisition team and hiring managers
undergo regular training to ensure that a diverse slate of candidates is considered for all job openings. We have
developed recruitment practices to target diverse candidates including minorities, veterans and women. We also
monitor our current workforce for diversity, age and gender demographics and use this information to further
develop our employment and recruitment practices and enhance our inclusive work environment. All new and
existing employees are required to undergo anti-harassment, non-discrimination and unconscious bias trainings
on an annual basis.

Health and Safety

Luxfer is committed to being an industry leader in occupational safety. We continuously strive to foster an
environment where safety principles are integrated into daily activities to eliminate illnesses and injuries. Our
well-defined health and safety policies and procedures are enhanced by ongoing employee training, which
solidify our standards for respecting and protecting our employees, the public, and our associates. We regularly
conduct gap analyses and develop safety goals and objectives for all our business units. We monitor, review and
discuss our safety performance with respect to these objectives and our policies as a part of our enterprise-wide
risk management system. Moreover, safety measurements are integrated into the performance evaluations of
our Executives, proving our dedication to the safety of our employees.

We have chosen days lost from lost-time accidents ("LTAs") as a key performance indicator as shown on page 5.
We are pleased to report that 2020 has been an exceptional year for safety. The 328 of working days lost
through accidents in 2020 has seen an increase in previous years, however, this was predominantly due to two
isolated cases.

LUXFER HOLDINGS PLC

Additionally, we understand that the personal health and well-being of our employees increases productivity,
improves morale, creates a positive work environment and reduces healthcare costs. Luxfer offers several health
and wellness benefits that encourage employees to improve their personal health. For example, beginning in
January 2020, we implemented a smoking cessation program in which employees who successfully complete a
90-day smoking cessation plan are rewarded with discounted insurance rates. We also proved access to
wellness clinics and funded counseling sessions to improve the physical and mental health of our employees. In
2019, we rolled out the Luxfer Employee Healthy Lifestyle program which will soon be available to all Luxfer
employees worldwide. The purpose of the program is to encourage employees to take steps toward improving
their health and offering some reimbursement for certain gym and fitness center memberships and for weight
loss programs and group exercise classes. We believe that by supporting our employee's physical and mental
health, we are building a healthier, more productive workforce.

Employee Benefits Programs

We believe that financial security is just as important as physical and mental well-being. To that end, we work
hard to maintain a work-life balance for our employees that fosters job satisfaction and increases retention.
Luxfer offers competitive base pay and, depending on position, variable incentive pay that is associated with
individual performance and the performance of the Company as a whole. The variable incentive pay schemes
are available to motivate employees to achieve financial, business and personal targets. Additionally, while some
programs differ internationally due to local regulations, Luxfer offers group medical, dental, vision, life insurance
plan options, savings and retirement plans, and many other resources to enhance employees' lives both
physically and financially.

In 2013, we began offering an all-employee share investment plan (“SIP”) to our U.K. employees. Since then, a
substantial number of employees have taken the opportunity to make contributions out of their pay under the
plan, allowing them to purchase Company shares on a six-monthly basis. In 2014, we established an employee
stock purchase plan (“ESPP”) under which our U.S. employees can accumulate contributions from pay over a
six-monthly period to purchase Company shares. Both plans are established under the relevant national
legislation to take advantage of tax efficiencies, if available. While participation is entirely voluntary, the plans
ensure that rewards for employees are aligned with returns to shareholders through personal financial
investment and is another way that we support a well-balanced investment plan for our employees. We are
investigating ways in which we might, where cost-effective, offer the opportunity to purchase shares on a regular
basis in jurisdictions where we have smaller numbers of employees.

We also offer a long-term incentive plan intended to attract and retain high quality senior employees in an
environment where compensation levels are based on a global market. Participants are eligible to receive a
grant of awards over shares and/or performance awards over shares where the targets are designed to align
their remuneration with returns to shareholders. The purpose of the plan is also to reward the achievement of
business targets and key strategic objectives.

Training and Development

We believe it is imperative to invest in our employees and encourage personal and professional development.
Over the last few years, we have significantly increased resources and time allocated to employee training,
recruitment, personal development and retention.

As a part of our compliance program, we operate an enterprise-wide online training platform which provides
interactive trainings on compliance topics such as business ethics, code of conduct awareness, anti-bribery and
corruption, conflicts of interest, integrity in the workplace, diversity, cybersecurity, whistleblowing and more.
These mandatory compliance trainings are required for all Luxfer staff. Additionally, the training platform provides
access to a wealth of non-mandatory courses for employees looking to further enhance their business skills.
These courses include business leadership and collaboration, customer service, and tutorials on commonly used
software and technology such as Microsoft Office.

Training at the business unit level is also necessary to ensure compliance with local law and regulations, which
varies across Luxfer’s operations. Highly specialized training is conducted in a variety of formats specific to role
or job type and is necessary to support employees on a segment and cross-segment basis. Training is delivered
both from internal resources and third-party external resources as appropriate. Personal development of our
employees, as a core value of Luxfer, is promoted and encouraged throughout our individual businesses which
have a duty to assist in the personal development of employees as a part of their own strategies.

Luxfer management works closely with employees to ensure that our workforce has the skills and experience
necessary for growth and profitability. In order to safeguard Luxfer’s legacy and ensure business continuity, our
management and executive development program focuses on individual strengths and fosters technical skills
and knowledge to create the next generation of well-rounded Luxfer leaders. With a multi-faceted curriculum, our
training and development program provides critical problem-solving, business management and leadership skills
necessary for Luxfer’s continued success.

LUXFER HOLDINGS PLC

We understand that training and education for a particular role is just as important as continuing education
outside of the workplace. Recognizing and appreciating the personal ambitions of each of our individual
employees, Luxfer has implemented an Educational Assistance Program. All full-time employees who have been
employed by the Company for more than one year can receive financial assistance for successful completion of
educational courses, training workshops, seminars or courses part of a certificate or degree program in subjects
and fields that pertain to our business and Company operations.

Further information on employee policies, communication and engagement can be found in the Directors’ Report
on pages 34 to 36.

At December 31, 2020, the number of employees was as follows:

Employees *

Directors of Luxfer Holdings PLC

Senior Managers

Employees

Male**

1,011

Female**

376

*The Directors of Luxfer Holdings PLC include 5 independent Non-Executive Directors who are not employees of the Company.

** 203 male and 17 female employees included in the table related to discontinued operations.

LUXFER HOLDINGS PLC

Customers and Suppliers

Recognizing our customers as the source of our success, a core value of Luxfer is always putting the customer
first. Our products are highly customizable and are tailored to suit the highly specific needs of each individual
customer. We always strive to build and maintain long-term relationships with our customers based on mutual
cooperation and the highest standards of quality and service. Working in close collaboration with one another,
we work hard to find innovative solutions to suit their needs for advanced materials and products. Our focus is on
demanding applications where our technical know-how and manufacturing expertise combine to deliver a
superior product.

Luxfer has a complex global supply chain. We understand that such complexity comes with certain risks, which
demands that we maintain a high level of due diligence and vigilance of the third parties and suppliers with
whom we do business. Pursuant to our Third Party Code of Conduct, we expect all new and existing suppliers
comply with this Code and reflect its principles in their own policies. This applies to all third parties including
contractors, suppliers, agents and service providers. To ensure our compliance with applicable laws, we conduct
thorough examinations, supplier risk assessments, and both on- and off- site audits. We also require that third
parties allow representatives from Luxfer and, if requested, Luxfer’s customers, full access to their production
facilities, worker records and employees for confidential interviews. We consistently ensure that we are using
appropriate due diligence procedures to vet our suppliers prior to and during any engagements and we reject
suppliers who do not fulfill our requirements. While we have multiple sourcing options in almost every area of the
Group, our key suppliers are important to us, and we have chosen them for their combination of quality, delivery
performance and value for money.

Responsible Business Ethics

Luxfer is committed to the highest standards of corporate governance and business ethics. Our Company’s
ongoing success stems from our deeply engrained culture of ethics and integrity. Acting with integrity allows us
to meet the high expectations of our customers, business partners, and the communities in which we operate,
thus giving Luxfer a competitive advantage.

Luxfer’s Board of Directors has adopted a Code of Ethics and Business Conduct, which is the designated code
of ethics applicable to our Board, Executive Officers, employees and everyone conducting business on Luxfer’s
behalf. The Code of Ethics and Business Conduct provides a guide to appropriate business conduct and
acceptable behavior for persons associated with Luxfer. It applies to financial conduct, and relationships
amongst employees and our relationships with our customers and suppliers. Compliance with the Code is a
condition of employment and doing business with Luxfer. Additionally, we have a comprehensive Whistleblowing
Policy in place which prohibits retaliation against anyone who raises a business conduct concern in good faith or
cooperates in a Company investigation. Employees are encouraged to report any suspected wrongdoing via our
anonymous whistleblowing hotline which is available 24/7 and offers multi-lingual support for reporters in more
than 170 languages.

Luxfer has a comprehensive compliance program in place to ensure our compliance with all laws and regulations
in various jurisdictions in which we operate. We have Company-wide policies which are reviewed regularly by
senior management as well as policies that are specific to business unit. Further, Luxfer offers a comprehensive
online compliance training platform to employees. The training platform assigns tailored training modules to
employees based on their role and area of responsibility within the Company. A number of these courses are
considered mandatory compliance trainings for all employees. Each mandatory compliance training is configured
to include the corresponding Company policy on the topic and require written attestation by each employee that
they have read, understand, and agree to comply with each policy. Examples of recent training modules in 2020
include ethics and integrity in the workplace, anti-bribery and anti-corruption, insider trading and dealing, global
anti-trust and competition, recognizing conflicts of interest, privacy and information security, cybersecurity, and
workplace harassment prevention.

Community Engagement

Luxfer helps build sustainable communities through investment and involvement of our business, sites, and
employees worldwide. We leverage our skills and experience to make a difference in the world through
community activities, donations and employee engagement initiatives that are consistently encouraged and
sponsored by our Executive Leadership Team. Among others, our business units have partnered with Air
Ambulance Charity, American Red Cross, Boys and Girls Club of Cincinnati, Feed America, the Piedmont
Rescue Mission, Pratham, United Way and the Veterans Food Bank of Calgary. We participate in annual blood
drives, canned food drives, community clean-up events and holiday gift drives.

Our Volunteer Time Off program was rolled out to US employees and will soon be extended to all Luxfer
employees. Full-time employees can volunteer one working day per calendar year toward a non-profit or
charitable organization of their choice, and such day is considered paid time off. Further, Luxfer Gas Cylinders
has teamed with United Way and implemented the Employee Fair Share Program. Employees are encouraged
to donate 1 hour of pay per month to United Way and, in exchange, Luxfer provides the participants with one
additional vacation day, a “Fair Share” day, to be taken on the participant’s birthday. In 2020, this provided
approximately $35,000 to United Way from our Riverside location through employee and Company contributions.

LUXFER HOLDINGS PLC

Our business units are committed to providing educational opportunities and work experience to students in our
communities. We offer a number of internship and apprenticeship opportunities in various fields. We have
developed a Science, Technology, Engineering and Mathematics (STEM) apprenticeship program to encourage
students to pursue careers in the STEM fields.

Section 172 statement

Luxfer’s Board of Directors is responsible for overseeing the Company’s long-term business strategy. Each year,
management presents to the Board, and the Board discusses and approves detailed long-term strategic plans
for the Company. In addition to the overall strategic plan for Luxfer, these discussions also include sessions on
each business unit, portfolio management, growth and innovation, legal and compliance strategy and operations
and supply chain transformation. The Board also oversees the Company’s approach to ESG matters and the
Company’s governance related policies and practices; our system of risk oversight and management; and how
we advance environmental sustainability, health and safety in our business and operations. The Directors take
their responsibilities under Companies Act 2006 seriously and consider their responsibilities to stakeholders
when making decisions for the Group. The responsibilities under Section 172 are underpinned by our values of
customer first, innovation, accountability, personal development and teamwork.

Shareholder and public engagement are essential to maintaining our strong corporate governance practices. We
value feedback and input from all our shareholders and respond to concerns identified during the engagement
process. Engaging regularly with our global shareholders helps us gain valuable insights into the governance
issues about which they care most. We seek a collaborative and mutually beneficial approach to issues of
importance to shareholders that affect our business and to assure that our corporate governance practices
remain industry-leading from their perspectives.

Further information regarding the role of the Board and how they have complied with the requirements of section
172 are included in the Corporate Governance statement on pages 26 to 31.

LUXFER HOLDINGS PLC

Principal Risks and Uncertainties

Internal Controls and Risk Management

Luxfer has a comprehensive, enterprise-wide risk management program designed to assess, monitor, and
mitigate risks that arise in the course of business. Consistent with our leadership structure, management has the
day-to-day responsibility for assessing and managing the Company’s risk exposure, while the Board of Directors
provides oversight in connection with those efforts.

In general, the Board oversees the management of risks in the operation of the Company’s business; the
implementation of its strategic plan; its acquisitions and divestitures; its capital structure, allocation and liquidity;
its risk management controls; and its organizational structure. The Board fulfills its risk oversight function both
directly and through delegation to the Board Committees. Each of our Board Committees has historically focused
and continues to focus on specific risks within their respective areas of responsibility. The Board performs its risk
oversight role in several ways. Board meetings regularly include strategic overviews by the Chief Executive
Officer and Chief Financial Officer that describe the most significant issues and risks affecting the Company.
Additionally, the Board is regularly provided with business updates from our business unit leaders, General
Counsel, and other functional leaders. Reviewing and assessing any identified risks on a regular basis, the
Board manages such risks in accordance with Luxfer’s Enterprise Risk Management process.

As a global, multi-industrial company, Luxfer faces a range of risks, including general economic, credit and
capital market conditions risks, regulatory risks, global climate change risk, and several other risks, which are
fully listed and explained in our annual Form 10-K filed with the SEC.

Internal Financial Controls

During 2020, the internal audit function among other things, continued to work on the internal controls over
financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

As at December 31, 2020, the Executive Director in his capacity as Chief Executive Officer carried out an
evaluation of the effectiveness of the design and operation of our disclosure controls and procedures under the
supervision and the participation of the Executive Leadership Team, responsible for the management of the
internal controls. In accordance with the requirements of Section 404 of the Sarbanes-Oxley Act, and as included
in the Form 10-K filed with the SEC, management conducted an evaluation of the effectiveness of internal
control over financial reporting based on the Internal Control - Integrated Framework (the 2013 Framework)
issued by the Committee of Sponsoring Organisations of the Treadway Commission. Based on this evaluation,
management has concluded that internal control over financial reporting was effective as of December 31, 2020.

Remediation of Prior Material Weakness - Implementation of new ERP system

As previously disclosed, as a result of a new ERP system implementation in the fourth quarter of 2019, there
were control deficiencies identified that led to a material weakness (as defined by the Sarbanes-Oxley Act) in our
internal control over financial reporting as of December 31, 2019.

The Company did not maintain effective controls over certain IT general controls for the new ERP system.
Specifically, the Company did not (a) adequately tailor privileged access to the financial application, programs,
and data or sufficiently evidence the monitoring of such access; (b) adequately approve exceptions to
segregation of duties in respect of the ability to develop and implement changes to the IT production
environment; and (c) ensure that it appropriately used complete and accurate information in performing
monitoring and oversight controls. In addition, as a consequence of the implementation of the new ERP system,
the Company did not design, implement and consistently operate effectively certain process-level controls in the
fourth quarter in respect of the appropriate recording, accounting, and review of certain transactions and
accounts; and ensure the completeness and accuracy of system-generated information used in performing
certain IT-dependent manual controls.

In response, management has taken the following actions:

Implemented enhance controls to monitor and document privileged access to, and segregation of duties
within the ERP system;
Implemented process improvements designed to ensure the completeness and accuracy of the system-
generated information used in performing IT-dependent manual controls; and

3. Updated the design of certain process-level controls in respect of the appropriate recording, accounting

and review of transactions.

Based on the testing performed, as of December 31, 2020, management has concluded that these controls are
operating effectively and the material weakness has been remediated.

LUXFER HOLDINGS PLC

Treasury and Financial Risk

The Group operates a central treasury function that controls all borrowing facilities, investment of surplus funds
and management of financial risks. The Group also has a number of financial risks. The management of these
financial risks and mitigating actions are explained further in Note 29 of the Group consolidated financial
statements.

We set out in the tables below our principal risks and uncertainties and how we seek to mitigate or eliminate
them.

Area of Risk

Dependency on certain key markets - The Group depends on
certain end-markets, including automotive, self-contained breathing
apparatus, aerospace and defence, medical and printing and paper.
An economic downturn or regulatory changes in any of these end-
markets could reduce sales. To the extent that any of these cyclical
end markets are in decline, at a low point in their economic cycle, or
subject to regulatory change, sales and margins on those sales
may be adversely affected. It is possible that all or most of these
end markets could be in decline at the same time (e.g., during an
economic downturn such as that caused by the current COVID-19
pandemic). Any significant reduction in sales could have a material
adverse impact on our results of operations, financial position and
cash flows.
Effect of external factors due to the global nature of our
business - Our global presence exposes us in the countries in
which we operate to economic conditions, geopolitical risks, specific
regulations and other external factors, which could affect our
operations. Following the U.K.'s exit from the European Union
("EU") on January 31, 2020 a free trade agreement was reached
between the U.K, and EU member states in December 2020, with
new arrangements taking effect from January 1, 2021. The
agreement allows for zero tariffs on goods moving between the UK
and EU. However, the rules are complex and it is still possible that
tariffs will apply, depending on the origin of components of any
goods produced either in the UK or EU. There is also increased
regulatory complexity and potential for disruption to the movement
of raw materials and finished goods at the border. The impact of
these changes will take time to be fully understood and may
adversely affect our operations and financial results.
Competition - Markets for many of the Group’s products are now
increasingly global and highly competitive, especially in terms of
quality, price and service. The Group could lose market share as a
result of these competitive pressures, which could negatively impact
profit margins. More generally, the Group may also face potential
competition from manufacturers of products similar to the Group’s
aluminum and magnesium-based products using other materials,
such as steel, plastics or composite materials.

Protection and development of intellectual property rights and
changing industry requirements - As a result of the nature of the
competition faced by the Group, its ability to remain profitable
depends on its ability to protect intellectual property and to invest in
research and development, which requires funding.

Mitigating Activity

The Group’s diverse product portfolio reduces the
risk of any one adverse external economic factor
impacting across all of these end-markets;
however, a range of external factors could impact
across the majority or all of the Group’s end-
markets. To further mitigate this risk, the Group
continues to invest in research and development
and to innovate, working closely with its
customers, to develop next generation products in
these end markets.

The Group’s diverse product portfolio and
geographic spread reduces the risk of any one
external factor impacting across all end-markets.
The Group also closely monitors geopolitical and
global economic developments in its markets and
will be closely monitoring the free trade
agreement between the UK and EU and will take
action in response to future regulations regarding
tariffs and the movement of raw materials and
finished goods at the border.

The Group continues to invest in new and better
products and aims to focus its resources in
speciality markets that need high-performance
products and a reliable partner.

The Group seeks to protect its intellectual
property through patents and by reducing the
disclosure of commercially sensitive information.
It also invests long-term in new products and
manufacturing processes and maintains this
investment through the business cycle.

Reliance on major customers - If the Group fails to maintain its
relationships with its major customers, or fails to replace customers,
or if there were reduced demand from such customers or for the
products produced by such customers, it could reduce the Group’s
sales and have an adverse effect on the Group’s financial position.
The Group’s top 10 customers accounted for, in aggregate,
approximately 35% of Group revenue in 2020.

Long-term relationships with customers are
especially important, and the Group’s operations
work closely with customers to ensure customer
service is the best in the industry and aim to
support our customers in their development of
new products through our own product
innovations and technical know-how.

Risks relating to interruption of operations - The Group’s
production facilities are located worldwide. Any of its facilities could
suffer an interruption in production, either at separate times or at
the same time, because of various unavoidable occurrences
including major equipment failure. Although the Group carries
insurance, the cover on certain catastrophic events or natural
disasters, including earthquakes and certain other events, could be
limited.

Effect of international currency markets - Changes in foreign
currency exchange rates or interest rates could cause sales to drop
or costs to rise. The Group conducts a large proportion of its
commercial transactions, purchases of raw materials and sales of
goods in various countries and regions outside of the U.K.,
including the U.S., continental Europe and Asia. Changes in the
relative values of currencies can decrease the profits of the
Group’s operations through both the translation of profits into USD
or on import and export transactions.
Exposure to fluctuations in raw material - The Group is exposed
to fluctuations in costs of the raw materials and utilities that are
used to manufacture its products and can incur unexpected cost
changes. The primary raw material used in the manufacturing of
gas cylinders and superformed panels is aluminum, and though our
operations use specialist alloys, their prices are pegged directly or
indirectly to the quoted London Metal Exchange prices for primary
aluminum. This makes the costs subject to speculative commodity
cost changes, as well as fundamental supply and demand cost
pressures. We have also experienced significant cost fluctuations
in other raw material costs such as primary magnesium, carbon
fibre, zircon sand and rare earths. The Group’s operations also
buy and sell goods in regional markets that may be protected by
tariff barriers. Changes in these tariffs could have an adverse
impact on the profitability of the operations.

Product liability and regulatory risks - The Group is exposed to
possible claims for personal injury, fatality or property damage that
could result from a failure of a product manufactured by the Group,
or of a third party integrating a Group product. Many factors
beyond the Group’s control could lead to liability claims, which may
in turn lead to product legal claims or disruption in sales to
customers. The Group could be required to pay a material amount
if a claim is made against it that is not covered by insurance or
otherwise subject to indemnification, or that exceeds the insurance
coverage that the Group maintains. Moreover, the Group does not
routinely carry insurance to cover the expense of product recalls,
and litigation involving significant product recalls or product liability
could have a materially adverse effect on the Group’s financial
position / performance.
Environmental costs and liabilities - The Group may be exposed
to substantial environmental costs and liabilities, including liabilities
associated with divested assets and prior activities performed on
sites before we acquired an interest in them. Our operations,
including the production and delivery of our products, are subject to
a broad range of environmental laws and regulations in each of the
jurisdictions in which we operates. An increase in environmental
costs and liabilities could have a materially adverse effect on the
Group in any given year, which could negatively affect the Group’s
cash flows.

LUXFER HOLDINGS PLC

The Group performs routine maintenance on its
production equipment on all its manufacturing
sites. These maintenance programmes are
carefully planned to keep all plants operating at a
high level of efficiency, and to reduce the risk of
breakdowns and failure of equipment. Health and
Safety is also a major consideration in the
operation of the Group manufacturing facilities
and is carefully monitored. The Group carries
comprehensive business interruption insurance.

The Group regularly enters into forward foreign
currency exchange contracts to manage currency
risks and a Treasury Committee, overseen by the
Chief Financial Officer / Corporate Controller,
monitors the implementation of the Group’s
hedging policy.

In the long-term the Group has sought to recover
the cost of increased commodity and utility costs
through price increases and surcharges. Short
term fluctuations in the price risk on aluminum
are mitigated by agreeing fixed prices with the
suppliers, along with the use of LME derivative
contracts.

Increasingly, in recent years we have included in
our sales agreements an ability to share cost
increases with our customers.

The Group uses its operating and technical
expertise to mitigate these risks, with a strong
emphasis on high levels of product quality and
rigorous testing, and by ensuring that products
are designed to meet or exceed the regulatory
design standards of the markets they serve.

The Group has also obtained insurance coverage
for most of these types of liabilities.

To mitigate this risk the Group seeks to operate
best practice procedures in this area and is in the
process of attaining the ISO 14001 qualification at
all of its larger manufacturing sites. The bulk of
the Group’s known environmental issues are
legacy problems that arose many years ago.
Management have a programme in place to
progressively improve and eliminate these historic
issues.

Risks relating to the Group’s retirement benefit plans - The
Group operates defined benefit arrangements in the U.K and the
U.S. These are further explained in Note 31 of the Group
consolidated financial statements. Their funding requirements are
subject to fluctuations in investment markets and changes in the life
expectancy of members and, as a result, these plans have
significant deficits. Increased regulatory burdens have also proved
to be a significant risk, with taxes such as the U.K.’s Pension
Protection Fund Levy, which cost £0.4 million in 2020 (£0.4 million
in 2019). Regulations in this area can also constrain the level of
debt incurred and restrict the Group’s ability to pay dividends.

Exposure to risks related to cybersecurity threats and
incidents - In the conduct of its business, the Group collects, uses,
transmits and stores data on information technology systems. This
data includes confidential information belonging to us, our
customers and other business partners, as well as personally
identifiable information of individuals. We have experienced, and
expect to continue to be subject to, cybersecurity threats and
incidents, ranging from employee error or misuse to individual
attempts to gain unauthorised access to information systems to
sophisticated and targeted measures known as advanced
persistent threats, none of which have materially affected the Group
to date. We also rely in part on the reliability of certain tested third
parties’ cybersecurity measures, including firewalls, virus solutions
and backup solutions. Cybersecurity incidents may result in
business disruption, the misappropriation, corruption or loss of
confidential information and critical data (ours or that of third
parties), reputational damage, regulatory fines, litigation with third
parties, diminution in the value of our investment in research and
development, data privacy issues and increased cybersecurity
protection and remediation costs. Future cybersecurity breaches or
incidents or further increases in cybersecurity protection costs may
have a materially adverse effect on our business, financial condition
or results of operations.

Our results of operations may continue to be negatively
impacted by the coronavirus disease outbreak - In December
2019, the novel coronavirus disease (COVID-19) surfaced in
Wuhan, China. In March 2020, the World Health Organization
characterized COVID-19 as a pandemic. The rapid spread of the
pandemic and the continuously evolving responses to combat it
have had an increasingly negative impact on the global economy,
resulting in an economic downturn that could impact demand for our
products and our ability to produce them. With many countries
affected, there have been widespread disruptions from the
temporary closure of third-party supplier and manufacturer facilities
and interruptions in product supply. To date, the outbreak has
resulted in a decline in revenues and profitability. While there have
been some positive indicators such as a reduction of restrictive
measures in many countries and the reopening of temporarily
closed facilities, the future impact remains uncertain and cannot be
predicted. There is no assurance that the pandemic will not have a
material adverse impact on the future results of the Company. The
extent of the impact will depend on future developments, including
global and country-specific actions taken to contain the spread of
COVID-19, such as the roll-out and efficacy of the vaccination
program, as well as the ability of the global economy to recover
from the adverse economic consequences.

LUXFER HOLDINGS PLC

The Group and the Trustees of the plans closely
monitor the financial performance of the
Schemes, taking actuarial and investment advice
as appropriate. These are long-term liabilities,
and we have a programme in place to contribute
cash to our defined benefit plans over a number
of years based on affordability and varied
according to our net earnings. Plans are funded
and assets are invested in a combination of
equities and fixed income securities.

The Group devotes significant resources to
network security, data encryption and other
measures to protect our systems and data from
unauthorised access or misuse, including to meet
certain information security standards that may be
required by our customers, all of which increases
cybersecurity protection costs. As these threats,
and government and regulatory oversight of
associated risks, continue to evolve, we may be
required to expend additional resources to
enhance or expand upon the security measures
we currently maintain.

The Company continues to monitor the COVID-19
situation closely, while simultaneously executing
business continuity plans. These business
continuity plans include, but are not limited to, (i)
retooling operations to maintain social distance
and maximize employee safety; (ii) increasing
resources and efforts to satisfy demand from the
most impactful parts of our business; (iii)
expanding flexible work arrangements and
policies, where practical, to maximize employee
safety; (iv) increased monitoring of short-term
cash flow, including measures to reduce costs
and generate cash; and (v) providing regular
updates to our shareholders, employees,
customers, and suppliers in a transparent and
timely manner.

Despite the adverse macro trends, the Company
has a strong balance sheet and access to an
existing $150 million credit facility, of which only
$4.1 million was drawn down at the end of the
year following continued strong cash generation.
Furthermore, as our net debt to EBITDA ratio has
fallen to 1.0x at the end of 2020 (from 1.2x at the
end of 2019), we have identified no issues in
relation to financial covenants nor availability of
funding for continued operations.

Approval

The Strategic Report is set out on pages 3 to 21 and incorporates the sections titled Environment, Social and
Governance ("ESG") Matters and Principal Risks and Uncertainties.

Signed on behalf of the Board by:

LUXFER HOLDINGS PLC

A Maskara

CHIEF EXECUTIVE OFFICER

April 29, 2021

LUXFER HOLDINGS PLC

GOVERNANCE

The Board of Directors

In 2020, Luxfer’s Board of Directors was comprised of five (5) Non-Executive Directors including the Board
Chair, and one (1) Executive Director. The maximum number of Directors permitted under the Articles is ten (10).
The Directors have an interest in the shares of the Company as set out in the Remuneration Report on pages 37
to 53.

Our Articles contain a provision requiring that one-third of the Directors retire by rotation each year. In line with
best practice, the Nominating and Governance Committee has proposed, and the Board has agreed, that all
Directors should offer themselves for re-election at the 2021 Annual General Meeting (“AGM”).

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

Name

Age Position

David F. Landless

61 Non-Executive Director (Chair)

Alok Maskara

Executive Director and Chief Executive Officer

Clive J. Snowdon

68 Non-Executive Director

Richard J. Hipple

68 Non-Executive Director

Allisha Elliott

50 Non-Executive Director

Lisa G. Trimberger

60 Non-Executive Director

Biographical information concerning the current members of our Board of Directors is set forth below:

David F. Landless

David Landless was appointed a Non-Executive Director in March 2013. Effective May 16, 2019, he was
appointed the Chair of the Board of Directors. Mr. Landless currently acts as a member of the Nominating and
Governance Committee. Prior to his appointment as Board Chair, Mr. Landless served as the Audit Committee
Chair from May 2015 through May 2019. Mr. Landless previously acted as a financial expert, as defined under
the NYSE listing rules, on the Audit Committee from March 2013 through April 2020. He was also a member of
the Remuneration Committee from January 2015 through November 2017.

Mr. Landless started his career with Bowater Plc, a pulp, paper, and related products manufacturer, and
Carrington Viyella Plc, a manufacturer of woven textiles. He joined the fiber and chemical manufacturer,
Courtaulds Plc, in 1984. Mr. Landless was appointed Finance Director in several U.K. and U.S. divisions of
Courtaulds Plc from 1989 to 1997 and the Finance Director of Courtaulds Coatings (Holdings) Limited from 1997
to 1999. In 1999, Mr. Landless was appointed Group Finance Director of Bodycote plc, the leading provider of
heat treatment and specialist thermal processing services worldwide, and he held that position until he retired on
January 1, 2017. He is a Non-Executive Director of Innospec, Inc., as well as Renold plc and European Metal
Recycling Limited. He chairs the Audit Committees at Innospec and Renold. Mr. Landless is a Chartered
Management Accountant. He graduated from the University of Manchester Institute of Science and Technology.

Mr. Landless’ qualifications to be a member of our Board include his extensive experience in manufacturing and
engineering businesses, particularly as Group Finance Director of a global industrial business that operates in
similar markets as Luxfer. In addition, he has a strong understanding of financial controls and audit
requirements. He also brings significant experience from serving on the boards of other publicly-traded
companies in both the U.S. and the U.K.

LUXFER HOLDINGS PLC

Alok Maskara

Alok Maskara was named Chief Executive Officer designate of Luxfer and appointed to the Board of Directors on
May 23, 2017. He became Luxfer’s Chief Executive Officer on July 1, 2017. Since joining Luxfer, Mr. Maskara
has led significant growth and transformation at the Company. He has significantly reshaped Luxfer’s Board of
Directors by adding more U.S. public company experience and increased the Board’s diversity. Additionally, Mr.
Maskara has changed the structure of the public listing and instituted new corporate governance policies, which
enabled the Company to join the Russell 2000 index in 2019.

Mr. Maskara has over twenty-five years of leadership experience in multiple manufacturing and technology
industries, including advanced materials, water and flow technologies, and electrical protection. Before joining
Luxfer, he was a business segment President at Pentair Plc, a water solutions company, for eight years, where
he led businesses of progressively larger sizes. During his time at Pentair, he delivered organic growth in mature
industries, while also successfully completing multiple global acquisitions, divestitures, and joint ventures. Prior
to Pentair, Mr. Maskara was with General Electric Corporation, an industrial manufacturing company, where he
gained significant experience in Lean Manufacturing through his leadership of an executive corporate initiative
group focused on Lean. He subsequently led a stand-alone business unit in the water industry, which was later
sold to Pentair. Mr. Maskara also worked at McKinsey & Company, a management consultant firm, in both their
Chicago and Amsterdam offices. While at McKinsey, he advised businesses on industrial turnarounds and
driving growth through customer insights and segmentation.

Mr. Maskara is a co-author of nine patents in advanced materials. He holds an M.B.A. from the J.L. Kellogg
Graduate School of Management at Northwestern University, an M.S. in Chemical Engineering from the
University of New Mexico, and a Bachelor of Technology degree in Chemical Engineering from the Indian
Institute of Technology, Mumbai.

Mr. Maskara’s qualifications to be a member of our Board include his extensive leadership experience in global
industrial manufacturing businesses, his value-enhancing growth and acquisition experience, his educational
background, and his knowledge of advanced materials.

Clive J. Snowdon

Clive Snowdon was appointed a Non-Executive Director in July 2016. Effective April 2020, he was appointed
Chair of the Nominating and Governance Committee, which he joined upon his appointment to the Board in
2016. Mr. Snowdon previously served as Chair of the Nominating and Governance Committee from December
2017 through May 2019. He also currently acts as a financial expert, as defined by the NYSE listing rules, on the
Audit Committee, which he joined in August 2016 and upon which he served as Chair from May 2019 through
April 2020. Additionally, Mr. Snowdon was a member of the Remuneration Committee from 2016 through
January 30, 2017.

Mr. Snowdon served as Chairman of the Midlands Aerospace Alliance, an association supporting the aerospace
industry across the Midlands region of England, from 2007 through 2016. He currently serves as a Trustee of the
Stratford Town Trust and is also the Aerospace Industry Advisor to Cooper Parry Corporate Finance, a corporate
finance advisory. In May 2016, Mr. Snowdon stepped down from the Board of Hill & Smith Holdings PLC, an
international group of companies operating within the infrastructure and galvanizing markets, where he had been
a Senior Non-Executive Director since May 2007, the Chair of the Remuneration Committee, and a member of
the Audit and Nominating and Governance Committees.

In June 2011, Mr. Snowdon retired from Umeco PLC, a provider of advanced composite materials, after serving
as Chief Executive since April 1997. Further, Mr. Snowdon was the Executive Chairman of Shimtech Industries
Group Limited until the sale of the business in May 2015. From 1992 to 1997, Mr. Snowdon served as Managing
Director of Burnfield PLC, after being promoted to that position from Finance Director. He has also held senior
positions with Vickers PLC, BTR PLC, and Hawker Siddeley Group. Mr. Snowdon is a Chartered Accountant. He
received his Bachelor of Arts degree in Economics from the University of Leeds.

Mr. Snowdon’s qualification to be a member of our Board include his experience as a former Chief Executive of a
U.K. public company, his strong understanding of U.K. PLC requirements, his significant experience in mergers
and acquisitions, and his skill in interacting with investors.

LUXFER HOLDINGS PLC

Richard J. Hipple

Richard Hipple was appointed a Non-Executive Director in November 2018, at which time he was also appointed
the Chair of the Remuneration Committee and a member of the Audit Committee.

Mr. Hipple served as the Chairman and Chief Executive Officer of Materion Corporation, a producer of high-
performance advanced engineered materials, from 2006 until his retirement in 2017, as well as President and
Chief Operating Officer from 2005 to 2006. Prior to that, Mr. Hipple worked in the steel industry for twenty-six
years in a number of capacities, including project engineering, strategic planning, supply chain management,
operations, sales and marketing, and executive management. Mr. Hipple has served as a Director of KeyCorp, a
bank-based financial services company, since 2012 and is Chair of the Audit Committee and member of the
Nominating and Corporate Governance Committee. Since 2017, he has also served as a Director of the Barnes
Group, a global industrial manufacturing company, and is a member of the Compensation and Corporate
Governance Committees. From 2007 through 2018, Mr. Hipple served on the Board of Ferro Corporation, a
leading supplier of technology-based functional coatings and color solutions. Mr. Hipple is Chair Emeritus and a
Trustee of the Cleveland Institute of Music and has served as a Director of the Greater Cleveland Partnership, as
well as the Manufacturers Alliance for Productivity and Innovation. Mr. Hipple received his Bachelor of
Engineering degree from Drexel University.

Mr. Hipple’s qualifications to be a member of our Board include his extensive executive management and
leadership experience with a global manufacturer of high-performance engineered materials, his experience in
business development and strategic transformation, and his broad involvement in both domestic and
international acquisitions. He also brings experience serving on the boards of other publicly traded companies.

Allisha Elliott

Allisha Elliott was appointed a Non-Executive Director in March 2019, at which time she joined the Remuneration
Committee and the Nominating and Governance Committee. Ms. Elliott previously served as Chair of the
Nominating and Governance Committee from May 2019 through April 2020.

Ms. Elliott currently serves as Chief Human Resources Officer at Bose Corporation, a global consumer
electronics company. Prior to Bose, Ms. Elliott was the Chief Human Resources Officer and Senior Vice
President for Human Resources and Communications at Sensata Technologies, Inc., a global leader in providing
sensor-rich solutions. Prior to joining Sensata Technologies, Ms. Elliott served in several human resource
leadership roles in the global manufacturing industry, culminating as Vice President of Human Resources and
Communications for Transportation Systems at Honeywell International Inc.

Ms. Elliott received her Master of Labor and Human Resources degree from the University of Illinois Urbana-
Champaign and her Bachelor of Arts degree in Sociology from Purdue University.

Ms. Elliott’s qualifications to be a member of our Board include her significant experience in Human Resources,
particularly in relation to public and industrial companies, including her extensive knowledge in talent
development, succession planning, and executive compensation.

Lisa G. Trimberger

Lisa Trimberger was appointed a Non-Executive Director in September 2019, at which time she joined the
Remuneration Committee and the Audit Committee. Effective April 2020, Ms. Trimberger was appointed Chair of
the Audit Committee, upon which she acts as a financial expert, as defined by the NYSE listing rules.

Ms. Trimberger retired as an Audit Partner of Deloitte & Touche LLP, a Big Four accounting firm, in 2014 after
spending thirty-one years with the firm. As a lead Client Service Partner, Ms. Trimberger audited and interacted
with the management and boards of publicly-traded companies. She worked on significant transactions, as well
as control and risk-assessment issues. Additionally, she was actively involved in the firm’s quality review
practice, serving as a Deputy Professional Practice Partner and Engagement Quality Control Review Partner.
During her tenure with Deloitte, Ms. Trimberger also served as Co-Chair of the firm’s Nominating Committee and
was leader of the firm’s National Women’s Initiative for the development and retention of women professionals.
Currently, Ms. Trimberger is a principal and owner of a private investment company, Mack Capital Investments
LLC. She is also a trustee of the Board and Chair of the Audit Committee and member of the Nominating and
Governance Committee of Corporate Office Properties Trust, an investment trust.

Ms. Trimberger is a Certified Public Accountant. She received a Bachelor of Science degree in Accounting from
St. Cloud State University. Ms. Trimberger is a member of the National Association of Corporate Directors
(“NACD”), as well as the National Association of Real Estate Investment Trusts. Further, she is a NACD Board
Leadership Fellow and earned the CERT Certificate in Cybersecurity Oversight, as developed by NACD, Ridge
Global, and Carnegie Mellon University’s CERT division. Ms. Trimberger also completed the Women’s Director
Development Executive Program at J.L. Kellogg School of Management at Northwestern University.

Ms. Trimberger’s qualifications to be a member of our Board include her experience as an Audit Partner in a big
four accounting firm, as well as her significant experience as a financial expert in areas including financial and
audit oversight, public board experience, corporate governance, and risk management.

LUXFER HOLDINGS PLC

Corporate Governance

Strong corporate governance practices serve the long-term interest of our stakeholders, strengthen the Board
and management, and further enhance the public trust Luxfer has earned from operating with uncompromising
ethics and integrity. Luxfer is fully committed to operating in a legal, ethical, and sustainable manner in all that we
do.

Overview

Luxfer’s corporate governance principles govern how we do business daily, enabling us to outperform and
provide sustainable growth. They provide a framework that defines the roles, rights and responsibilities of
various groups withing the Company. The Board has adopted a set of Corporate Governance Guidelines which
provide the framework for the effective and ethical governance of the Company. These guidelines address
matters such as the respective roles and responsibilities of the Board and Committees, director independence,
conflicts of interest and membership criteria. The Corporate Governance Guidelines, the Company’s Articles of
Association (the “Articles”), Charters of the Board Committees, Reservation of Powers, and the Code of Ethics
and Business Conduct, as well as national regulations such as the Companies Act of 2006 (“Companies Act”)
provide the structure for the governance of the Company.

The Company is incorporated in England and Wales and has a single listing of ordinary shares on the New York
Stock Exchange (“NYSE”). Accordingly, our corporate governance is also informed by the relevant aspects of
two regulatory regimes, the U.K. and the U.S. For example, as a company listed on the NYSE we are considered
a “quoted company” for the purposes of the Companies Act. Therefore, we are required to comply with quoted
companies’ requirements such as the way we report on remuneration, which includes an annual advisory
shareholder vote on director remuneration and a binding shareholder vote every three years. Luxfer is not listed
on the London Stock Exchange. As such, we are not required to comply with the U.K. Corporate Governance
Code. Nonetheless, we embrace aspects of this Code insofar as appropriate, relevant and practical to a
company the size and status as Luxfer.

In July 2018, the Company informed the NYSE of its loss of Foreign Private Issuer (FPI) status and our intention
to transition to a domestic issuer effective January 1, 2019. From this date, the Company has operated in full
compliance with the requirements for domestic issuer pursuant to the Exchange Act of 1934, as amended and
the NYSE’s Manual. Through the increased transparency of financial information and higher corporate
governance standards associated with domestic issuer status, we made it possible for Luxfer shares to be
included in the Russell 3000 index. Inclusion in the index has attracted new, high-quality shareholders, while also
allowing the orderly exit of some legacy debt holders. Additionally, we enhanced our Board of Directors which is
now comprised of a greater range of tenure, diversity and public company experience, thus facilitating effective
oversight and a better balance between historical experience and fresh perspectives.

We are also required to comply with certain provisions under the Sarbanes-Oxley Act, including Section 404(a),
which requires that the management of public companies assess the effectiveness of the internal control of
issuers for financial reporting. Such evaluation must be based on a suitable, recognized control framework such
as that which was established in Internal Control Integrated Framework (2013) issued by the Committee of
Sponsoring Organisations of the Treadway Commission (the “COSO Framework”). We have updated our
framework for the evaluation of the effectiveness of our internal controls over financial reporting in accordance
with the COSO Framework of 2013.

In developing corporate governance practices for the Group, the Directors have taken note of all the
aforementioned regulatory requirements, including those required under the Companies Act, as well as reflecting
best practice as the Directors consider appropriate.

LUXFER HOLDINGS PLC

Board Responsibilities and Leadership Structure

The Board has responsibility for the overall leadership of the Company, its long-term success and helping to
develop and approve its strategic aims. The Directors have determined a schedule of matters reserved to the
Board. Reserved matters are comprehensive and reviewed as the Board considers appropriate, normally once
annually. A review was undertaken during the year, following a comprehensive review taking into consideration
the transition to a domestic issuer. Matters reserved to the Board are set out in the Governance section of the
Company’s website.

The Board believes it is important to maintain the flexibility to choose the leadership structure that is best able to
meet the needs of Luxfer and its shareholders, based on the circumstances that exist at the time and the
qualifications of the available individuals. Due to the relatively small size of the Board, the Directors have
determined it to be unnecessary to appoint a Senior Independent Director. Further, we currently do not have a
policy requiring the positions of Board Chair and Chief Executive Officer to be held by different persons.
However, these two positions have historically been separate, and are expected to remain separate. The Board
believes this structure is advantageous. Specifically, separating the positions provides the appropriate balance
between strategy and development and oversight of management, while also allowing the CEO to focus
attention on driving business performance rather than Board governance. Additionally, this structure is consistent
with corporate best practices, the Institutional Shareholder Services’ recommendation, the views of Luxfer’s
shareholders, and the U.K. Corporate Governance Code.

David Landless currently serves as the Chair of Luxfer’s Board of Directors. He is a Non-Executive Director and
considered independent under the NYSE listing standards. Luxfer believes that David Landless’ service as the
Chair is appropriate because he has extensive experience serving on the boards of public companies, as well as
knowledge of Luxfer and the manufacturing and engineering industries in general. The responsibilities of the
independent Board Chair include, among other things:

•
•

•

•
•

•

Leading the Board, including the oversight and coordination of the Board’s and its Committees’ work;
Serving as a liaison between the CEO, other members of senior management, the Non-Executive
Directors, and the Committee Chairs;
Presiding at all meetings of the Board, including executive sessions of the independent, Non-Executive
Directors;
Presiding at all meetings of the shareholders;
Setting the Board’s meeting agendas and ensuring there is sufficient time for discussion of all agenda
items;
Recommending to the Board agendas for shareholder meetings and providing guidance to the Board on
positions the Board should take on issues to come before shareholder meetings;
Participating in discussions with the Nominating and Governance Committee on matters related to Board
and Committee organization, composition, membership terms, and meeting structure;
Participating in discussions with the Nominating and Governance Committee and Remuneration
Committee on matters related to the hiring, evaluation, and compensation of, and the succession
planning for, the CEO, the Executive Officers, and Directors; and,

• Maintaining dialogue and canvassing opinions of the Non-Executive Directors in absence of the

Executive Director.

Board and Committee Self-Assessments

Annual self-assessments and evaluation of Board performance helps ensure that the Board and its Committees
function effectively and in the best interest of our shareholders. The Nominating and Governance Committee is
Responsible for Directors and each Committee. The assessment process consists of a written evaluation
comprising both quantitative scoring and narrative comments on a range of topics, including the composition and
structure of the Board of Directors, the type and frequency of communications and the information provided to
the Board and its Committees, the Board’s effectiveness in carrying out its functions and responsibilities, the
effectiveness of the Committee structure, Director’s preparation and participation in the meetings, and the values
and culture displayed by the Directors. With the assistance of the Company Secretary, the evaluation responses
are compiled by the Chair of the Nominating and Governance Committee. The Nominating and Governance
Committee Chair leads a discussion of the assessment results at the following Board meeting. In addition to this
annual self-assessment, verbal assessments are conducted in independent executive sessions at the end of
every Board and Committee meeting.

LUXFER HOLDINGS PLC

Board Education, Information and Support

Board education is an ongoing, year-round process, which begins a Director joins our Board. Within one (1) year
of joining our Board, new Directors are provided with an orientation to our Company, including our business,
strategy and governance. On an ongoing basis, Directors receive educational presentations on a variety of
topics related to their responsibilities as Directors and the industries in which Luxfer operates. These
presentations are provided by our senior management team and/or external advisors. In 2020, topics for Board
education included ESG matters, Luxfer values and culture, anti-corruption, anti-bribery, anti-trust, global insider
dealing, changes in the small-cap equity investment landscape, and the impact of COVID-19 on valuation,
corporate financing and diversity.

The Company Secretary and General Counsel as well as external counsel when appropriate and necessary,
provide updates to the Board on legal and regulatory issues nature of which it and the individual Directors should
be aware to refresh their skills and knowledge. There is a culture of information exchange on various matters of
interest to the Group and its operations between Directors and senior managers to keep Directors abreast of
relevant developments.

The Board receives both financial and operational information to assist it in carrying out its duties. The Chief
Executive Officer and the Chief Financial Officer provide regular reports to the Board regarding relevant aspects
of the business. These reports are further detailed at scheduled Board meetings as appropriate. Additional topics
for review and discussion are added to these reports from time to time at the request of the Directors. In addition,
specific items are scheduled into the Board agenda for report and review on a regular basis, such as health and
safety and environmental matters and current topical issues. The Board evaluates this information and support
procedures periodically to ensure that topics remain appropriate.

Board Meetings and Committees

The Board has three standing committees comprised solely of independent Directors: the Nominating and
Governance Committee, the Remuneration Committee, and the Audit Committee. The Company Secretary
distributes Board and Committee agendas and materials to the Board and Committees seven days before a
scheduled meeting. The independent Directors generally meet in executive session without management
present at each meeting.

8 MEETINGS OF THE BOARD OF DIRECTORS IN 2020
(1 physical meeting; 7 video teleconference meetings)

3 - Meetings of the Nominating and
Governance Committee

4 - Meetings of the Remuneration
Committee

7 - Meetings of the Audit
Committee

The Board held eight (8) meetings in 2020, two of which were video teleconference meetings related to the
COVID-19 pandemic. The first and only in-person meeting occurred in early March 2020, prior to the
implementation of widespread lockdowns due to COVID-19. The remaining seven meetings occurred virtually via
video teleconference. Directors are expected to attend all scheduled meetings of the Board of Directors, the
meetings of the Committees on which they serve, and all shareholder meetings. In each regularly scheduled
meeting, the independent Directors also met in executive session, without the Chief Executive Officer or other
members of management present.

All Directors attended all eight general Board meetings in 2020. During the period in which they served, all
members of each Board Committee were present at every Committee meeting held in 2020.

We expect our Directors to attend our Annual General Meetings. All the Directors who were appointed for the
2020 term attended the 2020 Annual General Meeting.

Prior to COVID, the Board normally held a majority of their physical meetings at the Group’s operational plants,
as part of their monitoring role and to ensure a better understanding of the Group’s operations. At these
meetings, the Board tours the plant and has an opportunity to meet local and divisional management on both a
formal and informal basis and discuss the progress of their operations with them. In addition to meetings held at
Luxfer’s sites, the Non-Executive Directors may independently visit operational sites to enhance their knowledge
of the individual businesses that make up the Group. The Executive Director has regular business reviews at
operational sites throughout the year, and any appropriate information gathered on those visits will be reported to
the Board. We hope to return to physical meetings as soon as reasonably practical as the situation with the
COVID-19 pandemic allows.

LUXFER HOLDINGS PLC

Nominating and Governance Committee

Role: The Nominating and Governance Committee advises the Board on matters relating to Board governance,
structure, and composition. Responsibilities of the Nominating and Governance Committee include, among other
things, establishing criteria for Director candidates and identifying individuals for nomination to become
Directors, including engaging advisors to assist in the search process where appropriate, and considering
potential candidates recommended by shareholders; developing plans and making recommendations in relation
to the organization, composition, membership terms, and meeting structure of the Board and its Committees;
recommending a succession plan to the Board and review management’s succession plan; administering the
self-assessment of the Board and its Committees; overseeing Luxfer’s corporate governance structure and
practices; and overseeing and recommending to the Board of Directors changes to our Corporate Governance
Guidelines, Committee Charters, and other governing instruments.

A full description of the Committee’s roles is set forth in the Nominating and Governance Committee Charter,
available at https://www.luxfer.com/ under the “Investors” tab.

Members: Clive Snowdon (Chair as of April 2020), Allisha Elliott (Chair through March 2020), and David
Landless.

All members of the Nominating and Governance Committee have been determined to be independent under
SEC and NYSE rules.

Remuneration Committee

Role: The Remuneration Committee sets and administers the policies that govern executive and senior
management compensation. Responsibilities of the Remuneration Committee include, among other things,
evaluating Executive Officer and senior management performance; establishing and administering executive
compensation; reviewing and approving the Executive Compensation Discussion and Analysis including in our
annual Proxy Statement; Recommending actions regarding the Chief Executive Officer’s compensation for
approval by the Non-Executive Directors of our Board; and approving the individual compensation actions for all
Executive Officers other than the CEO. To assist the Remuneration Committee in its review of executive and
director compensation programs, Meridian Compensation Partners LLC (“Meridian”), a human resource
consulting firm, provides advice, data, and insight. Meridian was retained by the Remuneration Committee in
2020 and provides advice at times the Remuneration Committee deems appropriate. Any other work undertaken
by Meridian for the Company must be approved by the Remuneration Committee. The Remuneration Committee
has conducted an assessment of the independence of Meridian and has determined that Meridian does not have
any conflict of interest. Aside from the data provided by Meridian, the Committee also considers other sources to
evaluate external market, industry and peer company practices in its review of our compensation programs.

A full description of the Committee’s roles is set forth in the Remuneration Committee Charter, available at
https://www.luxfer.com/ under the “Investors” tab.

Members: Richard Hipple (Chair as of November 2018), Allisha Elliott (beginning March 2019 upon appointment
to the Board), Lisa Trimberger (beginning September 2019 upon appointment to the Board).

All members of the Remuneration Committee have been determined to be independent under SEC and NYSE
rules.

Report: The Director’s Remuneration Report appears in the Remuneration Report on pages 37 to 53.

Audit Committee

Role: The Audit Committee advises the Board on financial matters and oversees the Company’s accounting,
financial reporting, and internal control policies and procedures. Responsibilities of the Audit Committee include,
among other things, overseeing financial reporting, controls, and audit quality and performance; monitoring and
overseeing the independence and performance of our Independent Auditors, with responsibility for the selection,
evaluation, remuneration, and, if applicable, discharge of such Independent Auditors; approving, in advance, all
of the audit and non-audit services provided to the Company by the Independent Auditors; facilitating open
communication among our Board, senior management, internal audit, and the Independent Auditors; reviewing
internal audit work, the system of internal controls and monitoring implementation of internal controls over
financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act and the progress of the update to the
internal controls over financial reporting framework to reflect the 2013 COSO framework throughout the Group;
overseeing our enterprise risk management and compliance programs; overseeing financial strategy, investment
policies, and financial performance of invested assets; reviewing the Company’s annual SEC filing, statutory
report and consolidated financial statements and the quarterly financial releases made by the Company;

A further description of the Committee’s roles is set forth in the Audit Committee Charter, available at https://
www.luxfer.com/ under the “Investors” tab. The Audit Committee Charter were reviewed and approved by the
Committee in 2020.

LUXFER HOLDINGS PLC

Members: Lisa Trimberger (Chair as of April 2020), Clive Snowdon (Chair through March 2020), and Richard
Hipple.

All members of the Audit Committee have been determined to be independent under Section 303A.02 of NYSE
Rules and Rules 10A-3 under the Exchange Act.

Financial Experts: The Board considers that each member of the Audit Committee have appropriate financial
experience to enable them to contribute to the Audit Committee’s work. The Board has determined that Lisa
Trimberger, Clive Snowdon and Richard Hipple are all financially literate under NYSE Rules and qualify as “audit
committee financial experts” under SEC standards.

Report: The Directors are responsible for preparing the financial statements to satisfy U.K. law. This
responsibility is explained further in the Statement of Directors’ Responsibilities on page 54 and the Independent
Auditors’ Report on pages 55 to 62.

Meetings: Prior to the commencement of the financial year, the Committee establishes a schedule of meetings
to coincide with key events in the Company’s financial reporting and audit cycle to ensure that it has sufficient
time to fulfil its responsibilities. Agendas and appropriate documentation are provided to the Committee by the
Company Secretary. The Chief Financial Officer and the Chief Executive Officer may attend Committee meetings
as required. The Chair of the Audit Committee consults with external auditors as necessary in preparation for
Committee meetings and may invite the external auditor to attend a meeting of the Audit Committee if required.

The Audit Committee has adopted and implemented a ‘Policy on the Provision of Audit and Non-Audit Services
by Auditors’ (the “Pre-approval Policy”) to comply with auditor independence requirements contained in Rule
2-01 of Regulation S-X under the Exchange Act. The policy requires the Audit Committee to pre-approve all
matters upon which the Company’s external auditors are requested to advise (audit and non-audit work),
including fees, subject to certain pre-approvals made annually by the Audit Committee. A pre-approved sum to
be spent on audit and tax matters is delegated to the Chief Financial Officer and there is a procedure for
approval of urgent items by the Chair between meetings. The policy also affirmatively prescribes the Company’s
external auditors from advising on certain matters.

Conflicts of Interest

Luxfer’s Code of Ethics and Business Conduct and Corporate Governance Guidelines address conflicts of
interest. As provided in the Code of Ethics and Business Conduct, a “conflict of interest” occurs when an
individual’s private interest (or the interest of a member of his or her family) interferes, or even appears to
interfere, with the interests of Luxfer. A conflict of interest can arise when an employee, Officer, or Director (or a
member of his or her family) takes actions or has interests that may make it difficult to perform his or her work for
Luxfer objectively and effectively. Conflicts of interest also arise when an employee, Officer, or Director (or a
member of his or her family) receives improper personal benefits as a result of his or her position in Luxfer. The
Company periodically, but no less frequently than annually, solicits information from Directors and Executive
Officers in order to monitor potential conflicts of interest. Directors and Executive Officers are expected to always
be mindful of their fiduciary obligations to the Company, and they must seek determinations and prior
authorizations or approval of potential conflicts of interest exclusively from the Audit Committee.

In 2020, there were no conflicts of interest.

Related-Party Transactions

In addition to the standards set forth in our Corporate Governance Guidelines, Luxfer has established a Related-
Party Transactions Policy. As defined in the Policy, a “Related Person” is any (i) person who is or was (since the
beginning of the last fiscal year for which Luxfer has filed a Form 10-K and Proxy Statement, even if they do not
presently serve in that role) an Executive Officer, Director, or nominee for election as a Director of Luxfer, (ii)
person who is the beneficial owner of greater than 5% of Luxfer’s outstanding ordinary shares, or (iii) Immediate
Family Member of any of the foregoing. “Immediate Family Member” is defined as “any child, stepchild, parent,
stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law,
or any person (other than a tenant or employee) sharing the household of a person.”

In accordance with the Related-Party Transactions Policy, the Audit Committee must review all “Interested
Transactions.” An “Interested Transaction” is any transaction, arrangement, or relationship, or any series of
similar transactions, arrangements, or relationships (including any indebtedness or guarantee of indebtedness),
in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, (ii)
Luxfer is a participant, and (iii) any Related Person has or will have a direct or indirect material interest (other
than solely as a result of being a Director or trustee (or any similar position) or a less than 10% beneficial owner
of another entity).

In considering whether to approve an Interested Transaction, the Audit Committee takes into account, among
other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms
generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the
Related Person’s interest in the arrangement.

In 2020, there were no related party transactions.

LUXFER HOLDINGS PLC

Security Ownership

Various Luxfer policies address security ownership, including the Insider Trading and Dealing Policy and the
Stock Ownership Guidelines. Particularly, Luxfer's Insider Trading and Dealing Policy prohibits a number of
transactions by “Covered Persons.” “Covered Persons” include Directors, Executive Officers, and various Luxfer
employees and consultants in corporate, finance, IT, and investor relations roles. Specifically, the Policy prohibits
the following in relation to Company securities: short-term trading, short sales, options trading, trading on
margin, and hedging. All Covered Persons – including family members of Covered Persons, members of a
Covered Person's household, and entities controlled by Covered Persons – are expected to comply with the
Insider Trading and Dealing Policy, as well as applicable securities laws and regulations.

Further, Luxfer has established Stock Ownership Guidelines, which apply to all Non-Executive Directors, Named
Executive Officers, and any other key employees that the Remuneration Committee may identify from time to
time in consultation with management. The Company’s Articles of Association does not currently require
Directors to hold a minimum number of shares in the Company in order to qualify for appointment to the Board of
Directors; however, the Stock Ownership Guidelines provide the Company's expectations as to best practice.
The Stock Ownership Guidelines provide expectations as to the minimum amount of shares such persons
should own in the Company. These minimum amounts are based on the total value of the shares owned by a
person being equal to a certain multiple of such person’s annual base salary or retainer fee. Additionally, the
Stock Ownership Guidelines include share retention ratios to assist in a person's continuous progress toward his
or her respective ownership guideline. Named Executive Officers and Directors are expected to achieve the
minimum ownership guidelines within five years of the effective date of the Stock Ownership Guidelines or his or
her appointment or election, whichever occurs later.

Anti-Bribery and Anti-Corruption

The Code of Ethics and Business Conduct requires compliance with all applicable anti-bribery laws, including the
U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and local laws where Luxfer conducts business. This
requirement applies to Luxfer’s Directors, Executive Officers, employees and those with whom Luxfer conducts
its business. Luxfer has an established Anti-Corruption Policy, which sets for the Company’s policies, principles,
and procedures in relation to situations presenting corruption or bribery issues. Annual training is required for all
members of our Board of Directors, senior management, and any non-production employees, and more
thorough trainings are provided to employees in high-risk roles, including those in audit, sales, finance,
marketing, legal, and export and import. Luxfer’s General Counsel provides quarterly updates on all activities to
the Audit Committee and Board as a whole.

Whistleblowing

We highly encourage reporting of any wrongdoing regarding corporate governance, financial reporting, human
rights, or any concerns about business conduct brought forth in good faith. Luxfer operates an independent,
anonymous whistleblowing hotline that is available 24/7 to our employees or anyone working in our supply chain.
Luxfer’s longstanding Whistleblowing Policy describes the procedures in place to ensure our due diligence in
thoroughly investigating and remedying any reports through this avenue. The policy provides strong protections
against retaliation for whistleblowers and anyone who cooperates in a Company investigation. The Audit
Committee oversees the operation of the Whistleblowing Policy and receives a report from the Company
Secretary at each meeting of the Audit Committee.

Relations With Shareholders

Shareholder and public engagement are essential to maintaining our strong corporate governance practices and
long-term success. We value the opinions of our shareholders and welcome their views throughout the year on
key issues. In 2020, we worked hard to bridge the gap in geography between us and our shareholders in 2020
due to travel restrictions in place as a result of the COVID-19 pandemic. We maintained an active engagement
and outreach program, speaking with shareholders via telephone calls and virtual videoconference meetings
throughout the year. We had more than 100 calls and meetings with shareholders throughout 2020 during
investor conferences, non-deal roadshows, and scheduled post-earnings follow up calls. In an effort to
continuously review our shareholder communication and outreach, we review key feedback received during
these meetings with our Board of Directors. The Directors carefully consider and evaluate this information and
modify the Company’s approach to advance our shareholder engagement efforts.

LUXFER HOLDINGS PLC

Executive Leadership Team

The members of the Executive Leadership Team of Luxfer are responsible for the day-to-day management of the
Company. The Executive Leadership Team meets at least once a month. It is chaired by the Chief Executive
Officer and consists of the Chief Financial Officer and senior management at group and segment levels. The
Executive Leadership Team acts in an advisory capacity to the Chief Executive Officer and provides a forum
where matters of interest or concern to the Group can be reviewed and discussed, strategy debated, policies
developed and agreed, best practice discussed, and appropriate measures implemented. It also provides an
opportunity for senior management to receive updates on progress in other areas of the Group outside their
remit.

The following table lists the names and positions of the current members of the Executive Leadership Team as
well as those who served during the year.

Name

Age

Position

Alok Maskara

Heather C. Harding

Andrew W. J. Butcher

Graham D. Wardlow

James G. Gardella

Mark A. Chivers

Peter N. Gibbons

Jeff C. Moorefield
Megan E. Glise

57
28

Executive Director and Chief Executive Officer

Chief Financial Officer

President of Luxfer Gas Cylinders

Managing Director of Luxfer MEL Technologies

President of Luxfer Magtech

Managing Director of Luxfer Superform

Vice President and General Manager of Luxfer Graphic Arts

Vice President of Operations
General Counsel and Company Secretary

Biographies of the members of the Executive Leadership Team are set forth below:

Alok Maskara,
Chief Executive Officer

Please refer to the main Board biographies on pages 23 to 25.

Heather C. Harding
Chief Financial Officer
Heather Harding was named Chief Financial Officer of Luxfer Holdings PLC in January 2018. From 2012 to
2017, Ms. Harding was Vice President of Finance for Eaton Lighting, a business unit of Eaton Corporation, a
power management company. Prior to that, she was Vice President of Finance for various operating units within
Cooper Industries and Emerson Electric. Ms. Harding is a Certified Public Accountant and received a Bachelor of
Science degree in Accounting from Southern Illinois University at Carbondale.

Andrew W. J. Butcher
President of Luxfer Gas Cylinders
Andrew Butcher has served as President of our global Luxfer Gas Cylinders business since April 2014, having
been the President of Luxfer Gas Cylinders North America from 2009 to 2014. Mr. Butcher joined Luxfer in
Nottingham, United Kingdom, in 1991. He held positions of increasing responsibility throughout his career at
Luxfer, including leading the development of our composite business beginning in 2002, first as General
Manager and then as Executive Vice President. Mr. Butcher holds an M.A. degree in Engineering from
Cambridge University and an M.B.A. from Keele University.

Graham D. Wardlow
Managing Director of Luxfer MEL Technologies
Graham Wardlow was appointed Managing Director of Luxfer MEL Technologies in October 2017, following the
merger of our MEL Chemicals and Magnesium Elektron Alloys businesses. Mr. Wardlow joined Magnesium
Elektron in 1984 and undertook several technical and commercial roles before becoming Managing Director of
the Alloys business in 2008 and Divisional Managing Director of MEL Chemicals in May 2017. Mr. Wardlow holds
a degree in Materials Engineering from Imperial College, University of London, as well as an M.B.A. from Keele
University.

LUXFER HOLDINGS PLC

James G. Gardella
President of Luxfer Magtech
James Gardella was appointed President of Luxfer Magtech in July 2017. Prior to serving in his current position,
he was appointed President of the Company’s Magnesium Elektron Powders business in 2007, which he joined
in 1990 as Financial Controller. Mr. Gardella holds a Bachelor of Science degree in Accounting from Villanova
University and an M.B.A. in Finance. He is also a Certified Public Accountant.

Mark A. Chivers
Managing Director of Luxfer Superform
Mark Chivers was appointed Vice President and General Manager of Luxfer Superform in April 2018. Mr. Chivers
joined Luxfer in 2009 as Operations Director of Superform U.K., before moving to California in 2014 to become
General Manager of the Riverside facility. Before joining Luxfer, Mr. Chivers held Production and Operations
Management and Vice President roles in the castings and tool making industry, particularly servicing the
automotive sector. Mr. Chivers holds a Bachelor of Arts degree in Business Studies from Wolverhampton
University.

Peter N. Gibbons
Vice President and General Manager of Luxfer Graphic Arts
Peter Gibbons was appointed Vice President and General Manager of Luxfer Graphic Arts in July 2019. He
joined Luxfer in 2004 as European Financial Controller at Magnesium Elektron, before moving to the corporate
office to take up the Group Financial Controller role. He returned to Magnesium Elektron in 2014 as Divisional
Finance Director. Mr. Gibbons was appointed Director of Sourcing and IT and became a member of the
Executive Leadership Team in July 2017.

Jeff C. Moorefield
Vice President of Operations
Jeff Moorefield was appointed to the Executive Leadership Team as Vice President of Operations of Luxfer in
March 2019. Before joining Luxfer, Mr. Moorefield served as Senior Vice President of Global Operations at
Tennant Company. Prior to that, he served as Global Vice President of Operations for various operating units
within Pentair. Mr. Moorefield attended Western Kentucky University where he received a Bachelor of Science
degree in Industrial Technology.

Megan E. Glise
General Counsel and Company Secretary
Megan Glise joined Luxfer as U.S. Legal Counsel in July 2018 and was appointed Associate General Counsel in
February 2019. In January 2020, Ms. Glise became a member of the Executive Leadership Team and an
Executive Officer of the Company. She was appointed General Counsel and Company Secretary in September
2020. Before joining Luxfer, she was an Associate Attorney at a Wisconsin-based law firm, where she focused
her practice on corporate and transactional law. Ms. Glise received her Juris Doctor from Marquette University
Law School and holds a Bachelor of Arts degree in English and Criminology and Law Studies from Marquette
University.

LUXFER HOLDINGS PLC

Directors’ Report

The Directors of Luxfer Holdings PLC (the “Company”) present their annual report together with the audited
financial statements of the Group and the Company for the year ended December 31, 2020. This Directors’
Report should be read together with, and incorporates, the Corporate Governance section on pages 23 to 33.

Results

The profit for the year, after taxation from continuing operations, amounted to $17.8 million (2019: $6.0 million);
please see the Strategic report on pages 3 to 21 for more detail.

Dividends per Share

Quarterly interim dividends of $0.125 each £0.50 ordinary share, each quarter totaling $13.6 million, were paid in
2020 (2019: $13.6 million).

A further interim dividend was paid in February 2021 and a further dividend declared in April to be paid in May
2021 of $0.125 each £0.50 ordinary share totaling $3.4 million.

Directors

The names of the people who were Directors during the year, and up to the date of this report, and their brief
biographical details are set out in the Governance section on pages 23 to 25.

Capital Structure

On 11 December, 2017, the Company terminated its ADS facility and converted all outstanding ADSs into
ordinary shares. The conversion is a one-for-one exchange with one ADS converted into one ordinary
share. During 2018, the company issued an additional 1,863,201 shares and also canceled 7,578,369,556
deferred shares.

As at December 31, 2020, the Company’s issued share capital comprised of 29,000,000 ordinary shares of
£0.50 each and 761,835,338,444 deferred shares of £0.0001 each as set out in Note 20 to the financial
statements.

Substantial shareholdings

The Company had been notified of the following interests amounting to 3% or more of its issued share capital as
at the end of the financial year:

Shareholder

FMR LLC

Wellington Management Group, LLP

Nantahala Capital Management, LLC

Paradice Investment Management, LLC

William Blair Investment Management LLC

Kempen Capital Management N.V

BlackRock Institutional Trust Company, N.A.

American Century Investment Management, Inc.

Granahan Investment Management, Inc

DePrince, Race & Zollo, Inc.

Number of shares

Percent1

3,662,932

3,493,147

2,344,245

2,321,954

1,700,597

1,623,923

1,527,384

1,257,414

1,216,091

989,541

13.3%

12.7%

8.5%

8.4%

6.2%

5.8%

5.6%

4.6%

4.4%

3.6%

1 Percentage based on number of shares listed on the New York Stock Exchange.

LUXFER HOLDINGS PLC

Directors’ Interests and Related Party Transactions

No Director had a material interest in, nor was any Director party to, any contract or arrangement to which the
Company or any subsidiary is or was party to either during the year or at the end of the year, with the following
exceptions: in the case of the Executive Director, his individual service contract and in the case of the Non-
Executive Directors, their engagement letters, see Note 34 of the financial statements.

The interests of the Directors who held office at 31 December, 2020, and those of their families, in the share
capital of the Company, including share options are set out in the Remuneration Report on pages 37 to 53. All of
the interests were beneficial. There has been no change in the interests of the directors between the balance
sheet date and the date of approval of the financial statements.

Going Concern

After making the necessary inquiries, the Directors have a reasonable expectation that the Company has
adequate resources and borrowing facilities to continue operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the consolidated financial statements,
see Note 1 for more detail.

Research and Development

During the year, the Company invested $3.3 million (2019: $5.7 million) in research and development on new
and improved products and processes. Once a project is reasonably certain to deliver a commercial product,
certain of the development costs are capitalised. The Company continues to maintain links in fields of research
with both leading universities in various countries and outside agencies to support and supplement its own in-
house expertise. The Company also continues to gain significant tax benefit from the U.K. Patent Box regime.

Future Developments

An indication of the future developments of the business of the Company can be found in the Strategic Report on
page 8.

Disabled Employees

Where an employee has developed a disability whilst employed in his or her business that impacts on his or her
ability to carry out a certain job effectively, the relevant business unit will make arrangements where possible to
retrain that employee and continue his or her employment. Applicants for job vacancies who are disabled are
given full and fair consideration, bearing in mind requirements of the particular job and the particular aptitude and
abilities of the candidate.

Employee Involvement

Many employees are directly involved in the performance of the Group and segments through the use of various
incentive schemes. These include bonus schemes and various share-related schemes, details of which can be
found in the Environment, Social and Governance ("ESG") section of the Strategic Report on pages 13 to 15.

A combination of newsletters, regular line manager and team briefings, exchanges and consultations, at both
Group and site level (as appropriate) are used to systematically communicate with employees and develop their
awareness of matters that concern them, their business unit, segment, and the Group. As required, employees
are consulted on matters that concern them in an appropriate manner and through appropriate channels.

The Group continues to offer training and development opportunities to employees at all levels and to all
abilities, providing benefit to both the Group and the individual employee. Further details can be found in the
ESG section of the Strategic Report on pages 13 to 15. We undertake a succession planning review periodically
to ensure that we develop suitable candidates for critical leadership roles within the Group.

For senior management, we hold an annual management conference at the beginning of each year where
strategy for each business segment and at the Group level is presented and discussed for the year. Workshops
on subjects that will promote Group strategy will be held throughout the year. Meetings of employees who have
the same or similar functions within the Group also meet periodically for training, to exchange best practices and
convey Group policy.

Our Equal Opportunity, Non-Discrimnation and Anti-Harassment Policy sets forth our employment practices
throughout the Group in the treatment of applicants and Luxfer employees at all stages of employment.

Political Donations

The Company and its subsidiaries made no political donations in either 2020 or 2019.

LUXFER HOLDINGS PLC

Directors’ Liabilities

The Company maintains liability insurance for Directors and Officers which provides appropriate coverage for
any legal action brought against Directors. Throughout the year and at the date of approval of the financial
statements, the Articles provides indemnification for the Directors against liability incurred in the proper conduct
of the Company's business subject to the conditions set out in the Companies Act 2006.

Greenhouse Gas Emissions

A statement regarding the greenhouse gas emissions resulting from the Company’s operations can be found on
pages 11 to 12 of the Strategic Report.

Treasury and the Use of Financial Derivatives

Details of our financing and treasury policies, along with the management of treasury risks and use of financial
derivatives can be found in Notes 29 and 30 to the consolidated financial statements.

Directors’ Statement as to Disclosure of Information to the Auditors

The Directors, who served as members of the Board at the time of approving this Directors’ Report are listed on
page 23. Having made inquiries of fellow Directors and of the Company’s auditors, each of those Directors
confirms that:

•

To the best of their knowledge and belief there is no information relevant to the preparation of their report of
which the Company’s auditors are unaware; and

All reasonably expected steps were taken to be aware of relevant audit information and to establish that the
Company’s auditors are aware of that information.

Statement of Directors' Responsibilities in respect of the Financial Statements

The Statement of Directors' Responsibilities in respect of the Financial Statements can be found on page 54 and
forms part of this Report.

Independent Auditors

A written Resolution will be put
PricewaterhouseCoopers LLP as the Company's Independent Auditors.

the Annual General Meeting of

the Company

to re-appoint

The financial statements on pages 66 to 134 were approved by the Board of Directors on April 29, 2021 and
signed on their behalf by:

Alok Maskara

CHIEF EXECUTIVE OFFICER

April 29, 2021

LUXFER HOLDINGS PLC

DIRECTORS' REMUNERATION REPORT

Chair's Letter

Dear Shareholder,

As Chair of the Remuneration Committee, I present my Report for the year 2020 to the shareholders pursuant to
the relevant U.K. regulations regarding the reporting and voting for the remuneration for Directors of quoted U.K
companies.

Our Remuneration Policy (“the Policy”) was last approved by our shareholders at the 2018 AGM for a three-year
period. It will be resubmitted to the Remuneration Committee (“the Committee”) for approval at the 2021 AGM.
The key changes to the policy are highlighted below in Decisions Affecting 2021.

The Company’s Remuneration Policy can be found in a standalone document in the Governance section of the
Company’s website www.luxfer.com/governance/.

The Annual Remuneration Report starting on page 39 sets out how the Directors were remunerated in 2020 in
accordance with the Policy. As the Committee generally reviews Director pay and incentives at the beginning of
the financial year, the second half of the report also contains details of the decisions made on the remuneration
of our Directors for 2021. The Annual Remuneration Report will be proposed for an advisory vote at the
Company’s 2020 AGM as required by the relevant U.K. regulations.

Major Decisions on Remuneration during the Year

Decisions made affecting 2020 remuneration

Overall, 2020 was a very challenging year for the Company due to the severe adverse impact of the coronavirus
pandemic (COVID-19) on the global macro environment. We experienced a 13% decrease in net sales from
continuing operations which contributed to a 25% decrease in management EBITA, despite the positive impact
of cost saving programs, which were accelerated as a result of COVID-19.

The main targets of the annual bonus for 2020 related to two financial performance goals, management EBITA
and cash conversion. For the Chief Executive Officer, Alok Maskara, the bonus plan also contained a number of
non‑financial objectives relating to the achievement of certain balanced scorecard objectives. Both financial
performance goals and the non-financial objectives pay-out on a sliding scale basis at predetermined criteria,
based on the achievement of threshold, target or stretch levels. Due to the challenging economic climate, the
total annual bonus awarded to Alok Maskara was 50.0% of his base salary, out of a maximum potential of 200%,
albeit this was capped at the 50% level by the Remuneration Committee as a result of the financial impact of
COVID-19. The achievement of the management EBITA metric fell in the range of between the threshold and
target levels, whereas the cash conversion metric achieved the maximum level. The achievement of non-
financial objectives did not increase the payout level due to the imposition of the 50% cap. Further details of the
bonus arrangements and the bonus paid can be found in the Single Figure, Executive Directors’ Remuneration
section of the Remuneration Report on page 40.

For 2020, 60% of the total target share award to Alok Maskara was in the form of performance-based share
awards and 40% was in the form of time-based restricted stock units. With regards to the performance-based
elements of his share awards, the Committee believe the targets set were challenging, motivated the Executive,
and align the interests of the Executive with those of shareholders. Stretch targets required exceptional
performance to be achieved. These performance-based awards for the year were based upon adjusted diluted
EPS (earnings per share) targets and relative total shareholder return. The total shareholder return performance
measurement period runs until the year ending December 31, 2022, but in 2020 the Company’s relative total
return to shareholders was in the third quartile of its peer group. The EPS share award opportunity for the year
ended December 31, 2020 was missed.

As previously reported, the EPS share award targets set for 2019 were missed and therefore no awards were
made in 2020 accordingly. Furthermore, although the relative total shareholder return metric for the 2019 share
award opportunity is subject to remeasurement up to the year ending December 31, 2021, at present the
position as at December 31, 2019 showed the Company in the bottom quartile when compared to its peer group.
Further details are set out in the Single Figure, Executive Director’s Remuneration and the Awards Granted
During the Year sections of the Remuneration Report, and the associated Notes.

LUXFER HOLDINGS PLC

However, the relative total shareholder return metric for the 2018 share award opportunity showed the Company
in the second quartile when compared to its peer group. This led to a payout at 100% and is included within the
Single figure, Executive Director’s Remuneration and the Awards Granted During the Year sections of the
Remuneration Report, and the associated Notes.

Decisions affecting 2021

The Committee reviewed the Chief Executive Officer’s salary at its March 2021 meeting in accordance with the
Policy. In light of the challenging year and despite the excellent work Alok Maskara and his team continue to do
in driving simplification across the business against a background of COVID-19, it was agreed to freeze his
salary and benefits for the year ending December 31, 2021. In addition, no changes are proposed to the
maximum bonus and share award opportunities available under his variable remuneration arrangements. For
2021, the maximum annual bonus opportunity relating to the achievement of certain financial metrics will remain
at 160% of base salary, with the metrics being consistent with the previous year. The annual bonus opportunity
relating to the achievement of certain non-financial objectives will continue, capped at a maximum of 40% of
base salary. Subject to approval of the Remuneration Policy at the 2021 AGM, the maximum share incentive
award available to the Chief Executive Officer for achievement of certain financial targets under the Company’s
Long-Term Incentive Plan (“LTIP”) is increased from 220% to 300% of base salary. The revised Remuneration
Policy includes new clawback provisions applicable to all employees including the Chief Executive Officer, which
would apply should a material misstatement of previously released financial results be identified.

A summary of the Chief Executive Officer’s salary and incentive arrangements for the financial year 2021 can be
found under the section headed Implementation of the Remuneration Policy for the Year Ending 31 December
2021 on pages 48 to 49 of the Remuneration Report.

The Committee has also reviewed the compensation of its Non-Executive Directors. In light of the financial
impact of COVID-19, it is proposed to also freeze the base fees for Non-Executive Directors and the Non-
Executive Chair for 2021. It is proposed however to increase the value of share awards available to the Non-
Executive Directors from 55% to 100% of annual base fee, at the date of award.

The Committee looks forward to gaining your support for the Annual Remuneration Report at the 2021 AGM.

R J Hipple

CHAIR OF THE REMUNERATION COMMITTEE
April 29, 2021

LUXFER HOLDINGS PLC

Remuneration Report

2020 Remuneration Report
(subject to advisory vote by the shareholders at the 2021 AGM)
This report has been compiled in accordance with the U.K. ‘The Large and Medium‑sized Companies and
Groups (Accounts and Reports) (Amendments) Regulations 2013’. As required by the Regulations, the report will
be proposed for an advisory vote at the 2021 AGM. The approved Remuneration Policy can be found on the
Company’s website at www.luxfer.com/governance/.

The Remuneration Committee, its Activities and Responsibilities

The members of the Committee during the year are set out below.

Members of Committee
during 2020

Richard Hipple

Allisha Elliott
Lisa Trimberger

Member and Chair

Member
Member

Meetings held
during membership

Meetings
attended

4
4

4i
4i
4i

i Three of the Committee meetings were held via videoconference due to COVID-19.

The Company Secretary acts as secretary to the Committee. The Chief Executive Officer normally attends all the
meetings, at least in part.

The Committee is responsible for determining and agreeing with the Board the framework on executive
remuneration and its costs. The Committee’s written Terms of Reference can be accessed in the
Governance section of the Company’s website www.luxfer.com/governance/.

During 2020, the Committee discussed the following matters:

March 2020

June 2020

August 2020

December
2020

•

•
•
•

•

•
•

•

•
•

Consideration as to whether, and to what extent, the Executive Directors' bonus targets for 2019
had been met;
Determination of the Executive Director’s annual bonus targets for 2020;
Annual review of the Executive Director's and Company Secretary salaries;
Setting of goals to be met by the Executive Directors and Senior Managers which if met would
lead to the awarding of time‑based share awards;
Delegation of authority to Chief Executive Officer to make awards under the LTIP over a defined
number of shares to junior and middle management in his sole discretion; and
Review of of Executive and Non-Executive officer stock ownership guidelines..

Review of benchmarking peer companies; and
Review of the impact of COVID-19 on executive compensation.

Review of Executive Director and Non-Executive Director compensation benchmarking study.

Annual review of the Committee's Terms of Reference; and
Review of proposed 2021 Executive and Non-Executive Officer compensation.

Advisors to the Committee
The Committee has access to independent advice when it considers it requires such advice.
The Company engaged with Meridian Compensation Partners, LLC ("Meridian") to provide advisory and
benchmarking surveys with regards to Director and Executive Officer remuneration and benchmarking peer
companies. The cost of advice provided by Meridian during 2020 was $12,216 (2019: $17,969).

LUXFER HOLDINGS PLC

REMUNERATION RECEIVED BY THE DIRECTOR FOR THE YEAR ENDED DECEMBER 31, 2020
(Information with pages 40 to 48 have been audited. Information on pages 48 to 55 not subject to audit
unless stated otherwise.)

Single Figure

The tables below set out an analysis of the Director’s total remuneration for 2020. Total remuneration reflects
both the performance of the Company and the contribution made by the Director to the continued success of the
Company during their period of tenure.

Executive Director’s Remuneration

Single Total Figure Table

U.S.$

Year

Salary(1)

Taxable
Benefits(
2)

Annual
Bonus(3)

Alok Maskara

2020

2019

657,000

675,000

60,197

57,513

337,500

405,711

Long-Term
Incentive
Awards(4)

831,890

485,300

Other
Share
Awards(5)
11,613

42,127

Pensions
Contributions
(6)

Total

165,480

2,063,680

168,750

1,834,401

U.S.$
Alok Maskara

Year
2020

2019

Fixed pay
882,677

901,263

Variable pay
1,181,003

933,138

Total
2,063,680

1,834,401

Table compiled in accordance with the U.K. 'The Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008', as amended by 'The Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013'.

(1)Salary. Single Total Figure remuneration reflects the period from January 1, 2020 to December 31,
2020.

(2)Taxable Benefits. During the year an amount was paid to the director in respect of expenses relating
to car allowance, and medical and dental insurance. All payments made to Alok Maskara in respect of
these allowances were determined and paid in U.S. dollars.

(3)Annual Bonus. For the 2020 financial year, the annual bonus plan was based on the achievement of
two financial performance goals, management EBITA (adjusted earnings before interest, taxation and
amortisation) performance and the ratio of management EBITA to adjusted operating cash flow “Cash
Conversion” (two of the key strategic performance indicators used by the Company to assess its
development against its financial objectives during the year), measured against the annual budget and
an element was based on the achievement of certain predetermined balanced scorecard objectives.
Given the impact of COVID-19 in 2020, the Committee set the EBITA Threshold lower than in previous
years and capped the total payout factor at 50%. For the financial performance goals, both are
measured on a sliding scale that commences only once threshold has been achieved and rises through
the target performance up to a stretch target. The financial performance award elements of the annual
bonus opportunity were split evenly between the above two financial metrics. The achievement of
balanced scorecard objectives in 2020 did not increase the total bonus paid due to the payout cap set at
50%.

Summary of the annual bonus potential as a percentage of base salary for the Executive Director for
2020:

Sliding scale between threshold,
target and stretch

LUXFER HOLDINGS PLC

Maximum Annual bonus
(number of points available
and % of salary)(1)

Management

(2)

EBITA

Cash
Conversion(3)

Bonus
outcome
2020

Alok Maskara

200%

0.0% - 100.0%

50%

(1)In 2020, Luxfer achieved levels of EBITA and cash conversion that resulted in a bonus opportunity of
54.5% out of 200% being assessed for Alok Maskara. However due to the financial impact of COVID-19,
the payout was capped at 50%.

(2)Management EBITA (earnings before interest, taxation and amortisation) is defined as operating
income (as reported under U.S. GAAP) adjusted for equity income /(loss) of unconsolidated affiliates,
qualifying restructuring charges, impairment charges, acquisition-related charges / credits, amortisation
of finance costs, the unwind of deferred consideration, amortisation of acquired intangibles and share
based compensation charges.

(3)Cash conversion is defined as the ratio of management EBITA to adjusted operating cash flow.
Adjusted operating cash flow is reconciled from management EBITA by adding back depreciation, loss /
(gain) on disposal of property, plant and equipment, changes in assets and liabilities, net of effects of
business acquisitions, non-restructuring capital expenditures, equity income of unconsolidated affiliates
and U.K. pension deficit funding contributions.

In 2020, the Company generated a management EBITA of $40.6 million being in the range of between agreed
threshold and target levels and a cash conversion ratio of approximately 219%, which is at the top of the range.

The Board has considered whether to include in this report the targets which applied to the bonus arrangements
for the Executive Director in 2020 but has determined that these amounts are commercially sensitive.

(4)The Long-Term Incentive Awards. The 2020 Single Figure:

In 2020, 40% of the total target award communicated by the Remuneration Committee was in the form
of time-based restricted stock units granted on March 13, 2020. The value of these awards was
$374,748 based on the closing share price on the day of grant of $12.22 per share and deducting the
nominal cost value of $1.00 each share. The awards will vest in one-quarter increments on each of the
first four annual anniversaries following grant.

In addition, the Remuneration Committee performance targets for the year were based upon EPS
targets and total shareholder return, as described in Executive Director Awards Under the LTIP on page
44. The total shareholder return performance measurement period remains open until the year ending
December 31, 2022. The EPS share award opportunity for the year ended December 31, 2020 was
missed.

The LTIP share award disclosure in the Proxy Statement filed with the SEC (Form DEF 14A) for Alok
Maskara as part of his executive compensation for the year ended December 31, 2020 differs to the
amount included in the Single Total Figure Table, as it is based upon the achievement of targeted
Company performance for all performance-based awards communicated in the year. The value of the
awards included in the Proxy Statement is in accordance with U.S. GAAP.

In 2019, the Remuneration Committee targets were based upon certain EPS and TSR targets,
consistent with the methodology applied for the year ended December 31, 2020. The total shareholder
return performance measurement period remains open until the year ending December 31, 2021. The
EPS target was missed in 2019 resulting in no time-based awards being granted in 2020.

In 2018, the TSR targets set by the Remuneration Committee closed at December 31, 2020. The share
award opportunity showed the Company in the second quartile when compared to its peer group. This
led to an award of 23,760 share awards made to the Executive Director and vested immediately on
March 26, 2021. The value of these awards was $457,142 based on the closing share price on the day
of grant of $20.24 and deducting the nominal cost of £0.50 translated into U.S. dollars at the same date.

LUXFER HOLDINGS PLC

(5)Other Share Awards. In May 2017 Alok Maskara was granted share options in respect of his
appointment to the role of Chief Executive Officer. These time-based awards and performance-based
awards were outside the terms of reference of the LTIP but granted in accordance with the provisions of
the Remuneration Policy. The number, and details of the terms, of the grants are set out in the table in
Outstanding Share Awards During 2020 and the accompanying notes, on pages 46 to 47.

As shown in the Outstanding Share Awards During 2020 table on page 46, a total of 15,000 share
awards made to the Executive Director on his appointment vested and were released during the year.
The value of these awards was included in the Other Share Awards remuneration figure of the Single
Total Figure table for 2017. These awards carry with them the right to receive accumulated dividends
during the period of the award, in shares. The dividends are not credited until the award vests. The value
of the dividends vested and paid in shares was $11,613 resulting from the vesting of 877 dividend
shares. The dividend shares were valued at the closing share price on the NYSE on the date of vesting,
less the issue price of £0.50 translated into U.S. dollars at the date of vesting.

For the year ended December 31, 2019, a total of 30,000 share awards made to the Executive Director
on his appointment vested and were released during the year. The value of these awards was included
in the Other Share Awards remuneration figure of the Single Total Figure table for 2017. These awards
carry with them the right to receive accumulated dividends during the period of the award, in shares. The
dividends are not credited until the award vests. The value of the dividends vested and paid in shares
was $42,127 resulting from the vesting of 1,824 dividend shares. The dividend shares were valued at the
closing share price on the NYSE on the date of vesting, less the issue price of £0.50 translated into U.S.
dollars at the date of vesting.

(6)For details of pension arrangements see page 48.

Payments to Past Directors

There were no payments made to past Directors during the year.

Payments for Loss of Office

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

Non-Executive Directors' Remuneration

None of the Non-Executive Directors (including the Chair) received taxable benefits, annual bonus, long-term
incentive awards (exceeding one year) or pension-related benefits during the year.

Single Total Figure Table

U.S.$(1)

Year

Base Fee(1)

Other Fees (Fees in the
form of share awards)(2)

David Landless

Clive Snowdon

Richard Hipple

Allisha Elliott

Lisa Trimberger

2020
2019
2020
2019
2020
2019
2020
2019
2020
2019

115,000
103,194
82,000
82,000
82,000
82,000
82,000
67,492
82,000
27,333

60,462
55,770
43,152
44,587
108,563
—
96,158
—
75,063
—

Total

175,462
158,964
125,152
126,587
190,563
82,000
178,158
67,492
157,063
27,333

LUXFER HOLDINGS PLC

(1) Allisha Elliott was appointed to the Board as a Non-Executive Director from March 5, 2019. Her base
fee in 2019 reflects the period of service from this date to December 31, 2019.

Lisa Trimberger was appointed to the Board as a Non-Executive Director from September 1, 2019. Her
base fee in 2019 reflects the period of service from this date to December 31, 2019.

The Non-Executive Directors' fees of Clive Snowdon, Richard Hipple, Lisa Trimberger and Allisha Elliott
are all determined in U.S. dollars.

The Non-Executive Director’s fee of David Landless although determined in U.S. dollars, is paid in GBP
sterling translated at the closing month-end exchange rate of each month prior to payment. Actual
payments received by David Landless aggregated to £90,104 (2019: £81,267). The base fee for 2019
includes the supplementary fee for being Chair from May 15, 2019.

(2) 2020 Single figure:

The value of the Other Fees in the Single Figure table is calculated as follows:

•

An element of the fees received by the Chair and the other Non‑Executive Directors are
delivered as time‑based restricted stock units (“RSUs”). The award value is a percentage of their
Base Fee as provided in the Director Equity Incentive Plan (“EIP”) less the issue price per share
of $1.00. The value of the award is capped at to up to 55% of base fees at the date of the award.
Awards were made immediately after the 2020 AGM and vest immediately before the 2021
AGM. The number of RSUs was calculated using the closing share price on the NYSE ($14.79)
the day before the award was made. The number of awards received by each Non‑Executive
Director is set out in Awards Granted During the Year - Non‑Executive Directors Under the
Director Equity Incentive Plan (EIP) on page 45.

The RSU awards carry with them the right to receive accumulated dividends during the period of
the award, in shares. The Other Fees amount includes the value of the dividends awarded in
2020 and vested immediately before the 2020 AGM or will vest immediately before the 2021
AGM. The value of the awards themselves were included in the Single Figure for 2020 as they
were time‑based awards (see below). The dividend shares were valued at the closing share
price on the NYSE on the date of the dividends being awarded, being $16.91, $12.78, $13.60
and $12.16 respectively, less the issue price of $1.00. The number of dividend shares allocated,
and their value were:

Non-Executive Director

David Landless
Clive Snowdon
Richard Hipple
Allisha Elliott
Lisa Trimberger

Dividend shares
allocated
121
89
151
134
104

Value of dividend less
nominal cost of share $
1,496
1,106
1,787
1,586
1,231

LUXFER SHARE INCENTIVE PROGRAMS

Luxfer has a number of share incentive plans designed to align the interests of its Directors, managers and
employees with the interests of its shareholders. These plans help us remain competitive and act as retention
tools.

The plan under which awards are granted to the Executive Directors on an ongoing basis is the Luxfer Holdings
PLC Long‑Term Umbrella Incentive Plan (“LTIP”). Awards, which are considered part of their fees, are made to
the Non‑Executive Directors under the Non‑Executive Directors Equity Incentive Plan (“EIP”). The U.K.
Executive Directors also participate in the Company’s All Employee Share Plan (“SIP”) open to all U.K.
employees. In the U.S. the Company has established an Employee Share Purchase Plan (“ESPP”) which is
open to all U.S. employees and U.S. based Executive Directors.

LUXFER HOLDINGS PLC

LTIP: The LTIP was adopted for the I.P.O. in 2012. It is used to grant awards not only to the Executive Directors
but also senior and junior managers in the Luxfer Group. A variety of different awards can be granted under the
LTIP. To date, it has been used to grant time‑based nominal cost options to U.K. employees including the
Executive Directors, performance‑based nominal cost options and market value options to the Executive
Directors and other senior U.K. employees and time‑based and performance restricted stock units to U.S.
managers and managers from other countries in which the Luxfer Group operate. The maximum value of awards
under the rules of the LTIP that can be granted to the Chief Executive Officer and Other Executive Directors are
defined in the Remuneration Policy.

I.P.O. Options: As part of the I.P.O. in October 2012, stand‑alone option grants were made over shares to the
Executive Directors, Non‑Executive Directors and certain other key executives seen as critical to the Company’s
future success on completion of the I.P.O. All these options had fully vested and were exercisable up to October
2019, being seven years from the date of grant. No dividend shares were allocated on these awards, either
before or after vesting, whilst unexercised. The exercise price is the I.P.O. price of $10 per share. The IPO
Options expired in October 2019 and are no longer available for exercising.

EIP: Annual awards are made under the EIP to Non‑Executive Directors as part of their fees. The value of the
award is up to 55% of the base fee of a Non‑Executive Director. These awards are made the day after the AGM
of the Company in each year and vest the day before the following AGM. Annual awards are usually made as
restricted stock units. They are paid out immediately on vesting, together with dividends which have been
accumulated during the vesting period. New Non‑Executive Directors cannot participate in the annual awards
until they have served six months, however, the awards they would have earned from the date of appointment
are added to the next annual award provided they are re-elected at the AGM.

Copies of the LTIP, I.P.O. Options and EIP plans mentioned above are filed on the Company’s file at the SEC.

AWARDS GRANTED DURING THE YEAR

Executive Directors' Awards Under the LTIP

In 2020, the Remuneration Committee awarded long-term incentive compensation under the Long-Term
Umbrella Incentive Plan. As it does each year, the Remuneration Committee referenced benchmark data
(including compensation surveys, Comparator Group information and other data provided by Meridian
Compensation Partners LLC) in setting target U.S. dollar award levels for the Executive Director. In accordance
with the Remuneration Policy the maximum share award opportunity available to the Executive Director (in any
one year) at the time of communicating their award during 2020 was capped at 220% of their base salary, on
achievement of stretch performance. Achievement of target performance would result in a share award
opportunity capped equivalent to 150% of base salary being available and threshold performance at 75% of
base salary.

Based on the target level of the Executive Director’s share awards available (capped at 150% of base salary),
40% of this award was granted in March 2020 in the form of time-based restricted stock units, vesting evenly on
the first four anniversaries of the award from grant date. This amounted to 33,400 time-based restricted stock
units. The remaining 60% of the target award allocation was split 40% available based on the delivery of a
certain adjusted diluted EPS target for the year ending December 31, 2020 and 60% available on the delivery of
certain total shareholder return targets. The total shareholder return target consists of a ranking of Company
performance against a peer group of twenty companies for the last ninety days of the year ended December 31,
2019 against the last ninety days of the year ending December 31, 2022. Based on the relative level of
shareholder return achieved, awards in relation total shareholder return would vest evenly in March 2023 and
March 2024. For each of the adjusted diluted EPS and total shareholder return performance metrics, it is
possible to achieve a threshold, target and stretch level of award grants, based on result delivery.

The EPS share award opportunity for the year ended December 31, 2020 was missed. The relative total
shareholder return performance will be subject to remeasurement up to and including the year ending December
31, 2021.

For 2019, the Remuneration Committee set performance targets consistent with that used in 2020 based upon
the achievement of adjusted diluted EPS to be measured at threshold, target and stretch levels and the
achievement of relative total shareholder return to be measured at threshold, target and stretch levels. The
relative total shareholder return performance will be subject to remeasurement up to and including the year
ending December 31, 2021. The reported EPS for 2019 was not achieved which resulted no awards being
granted.

LUXFER HOLDINGS PLC

For 2018, the Remuneration Committee set performance targets consistent with that used in 2020 based upon
the achievement of relative total shareholder return to be measured at threshold, target and stretch levels. The
performance of the Comapny meant target level being achieved which resulted in Alok Maskara earning 100% of
the available awards. The number, and details of the terms, of the grants are set out in the table in Outstanding
Share Awards During 2020 and the accompanying notes, on pages 46 to 47.

The Committee believe they set challenging targets to motivate the executive director and align the interests of
the executive with those of shareholders. Achievement of stretch targets requires exceptional performance.

Non-Executive Directors under the Director EIP

The table below sets out the share award grants made to the Non-Executive Directors during the year in
accordance with the Remuneration Policy.

Chair or
Non-
Executive
Director

David
Landless

Basis of
Aggregate
Awards
Granted
55% of annual
fee for 2020

Share
Price at
Date of
Grant $
14.79

Date of
Grant
June 4,
2020

No. of
Shares
Granted
4,276

Type of
Award
Restricted
Stock Unit

Face
Value
of
Award
$
63,242

Issue
Price per
share & in
Aggregate
$
$1.00 each
share

Clive
Snowdon

June 4,
2020

55% of annual
fee for 2020

14.79

Restricted
Stock Unit

3,049

45,095

$1.00 each
share

Richard
Hipple

June 4,
2020

55% of annual
fee for 2020(1)

14.79

Restricted
Stock Unit

7,743

114,519 $1.00 each

Allisha
Elliott

June 4,
2020

55% of annual
fee for 2020(1)

14.79

Restricted
Stock Unit

6,858

101,430 $1.00 each

Lisa
Trimberger

June 4,
2020

55% of annual
fee for 2020(1)

14.79

Restricted
Stock Unit

5,354

79,186

$1.00 each
share

Vesting
Date
Day
before
2021
AGM

% of Face
Value
That Vest
On
vesting
date
100%

Day
before
2021
AGM

On
vesting
date
100%

(1) New Non-Executive Directors cannot participate in the annual EIP awards until they have served six months; however, the
awards they would have earned from the date of appointment are added to the next annual award. Awards in 2020 for Richard
Hipple, Allisha Elliott and Lisa Trimberger include additional RSUs granted in respect of prior year service.

LUXFER HOLDINGS PLC

OUTSTANDING SHARE AWARDS DURING 2020

Executive and Non-Executive Directors

Awards granted in 2020 in respect of 2019 Company financial performance to the Executive Director have been
included in the table below. Based on the Company’s financial performance in 2020, no performance related
awards were granted in 2020.

Awards

Options/Restricted Stock Units

Awards
Alok Maskara

Upon Appointment(1)
Upon Appointment(2)
LTIP 2017(3)
LTIP 2018(4)(5)
LTIP 2019(6)
LTIP 2020(7)

Totals

David Landless
EIP 2019(8)
EIP 2020(9)

Totals

Clive Snowdon
EIP 2019(8)
EIP 2020(9)

Totals

Richard Hipple
EIP 2020(9)

Totals

Allisha Elliott
EIP 2020(9)

Totals

Lisa Trimberger
EIP 2020(9)

Totals

Available
Jan 1,
2020

Granted
During
Year

Settled
During
Year

Available
Dec 31,
2020

Vested
Awards
Jan 1,
2020

Vested
Awards
During
Year

Settled
During
Year

Vested
Awards
Dec 31,
2020

Available
Unvested
Awards

15,000
30,000
32,367
49,280
21,200

—
—
—
—
—
— 33,400
147,847 33,400

(15,000)
—
(15,000) 15,000
(16,183) 16,184
(24,640) 24,640
(5,300) 15,900
— 33,400
(76,123) 105,124

— 15,000 (15,000)
— 15,000 (15,000)
— 16,183 (16,183)
— 24,640 (24,640)
(5,300)
— 5,300
—
—
—
— 76,123 (76,123)

2,218

—
— 4,276
2,218 4,276

(2,218)
—
(2,218)

—
4,276
4,276

— 2,218
—
—
— 2,218

(2,218)
—
(2,218)

1,763

—
— 3,049
1,763 3,049

(1,763)
—
(1,763)

—
3,049
3,049

— 1,763
—
—
— 1,763

(1,763)
—
(1,763)

— 7,743
— 7,743

—
—

7,743
7,743

—
—

— 6,858
— 6,858

—
—

6,858
6,858

—
—

— 5,354
— 5,354

—
—

5,354
5,354

—
—

—
—
15,000
—
16,184
—
24,640
—
15,900
—
33,400
—
— 105,124

—
—
—

—
4,276
4,276

—
3,049
3,049

—
—

7,743
7,743

—
—

6,858
6,858

—
—

5,354
5,354

LUXFER HOLDINGS PLC

Key to table:

Award
(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Award Scheme, Type & Grant
Upon appointment – Time-Based
Restricted Stock Units (i)
Upon appointment – Time-Based
Restricted Stock Units (iii)
LTIP 2017-Performance-Based-
EPS targets (iv)
LTIP 2018—Time-Based Restricted
Stock Units (v)
LTIP 2018-Performance-Based-
EPS targets (vi)
LTIP 2019 – Time-Based Restricted
Stock Units (vii)
LTIP 2020 – Time-Based Restricted
Stock Units (viii)
EIP 2019—Time-Based Restricted
Stock Units (ix)
EIP 2020—Time-Based Restricted
Stock Units (ix)

Exercise
Price /
Nominal Cost
Each Award
£0.50(ii)

£0.50(ii)

Grant Date
Aug 23, '17

Aug 23, '17

Mar 23, '18

Mar 26, '18

Mar 26, '19

Mar 14, ‘19

$1.00

Mar 13, ‘20

$1.00

May 16, ‘19

$1.00

June 4, ‘20

$1.00

Remaining Vesting/
Settlement Dates
All vested

May 23, 2021

Vesting
Period
No longer
applicable
To Jul 22, 2021

Mar 23, 2021

To May 22, 2021

Mar 26, 2021

To May 25, 2021

Mar 26, 2021

To May 25, 2021

Mar 14, 2021, 2022,
2023
Mar 13, 2021, 2022,
2023, 2024
All vested the day
before 2020 AGM
Day before 2021
AGM

To May 13, 2023

To May 14, 2024

No longer
applicable
—

(i) Upon Appointment - The Remuneration Committee determined that the new Chief Executive Officer should acquire
a minimum quantity of 22,500 shares within twelve months of appointment. Upon the Chief Executive Officer
acquiring the shares, the Company matched the purchase by granting an award over 45,000 nominal cost RSUs, to
vest over three years.

(ii) Where the exercise price / nominal cost is indicated in GBP sterling, in so far as it is required to be translated into
U.S. dollars for the purpose of the exercise / settlement, it is translated at the $:£ exchange rate reported in the
Financial Times for the date of exercise / settlement.

(iii) Upon Appointment - The Remuneration Committee determined to make a one-off share award to the new CEO,

outside the terms of the LTIP, over 60,000 time-based nominal cost RSUs, to vest over four years.

(iv) LTIP 2017: Awards made on attainment of 2017 EPS performance goals and include “holding period” and “claw
back” provisions, to vest evenly over three years. Time-based restricted stock units accumulate additional restricted
stock units when the Company pays a dividend. Shares underlying the total amount of restricted stock units are then
issued when the restricted stock unit vests.

(v) LTIP 2018: Time based awards granted on March 26, 2018 and include “holding period” and “claw back” provisions,
to vest evenly over three years. Time-based restricted stock units accumulate additional restricted stock units when
the Company pays a dividend. Shares underlying the total amount of restricted stock units are then issued when the
restricted stock unit vests.

(vi) LTIP 2018: Awards made on attainment of 2018 EPS performance goals and include “holding period” and “claw
back” provisions, to vest evenly over two years. Time-based restricted stock units accumulate additional restricted
stock units when the Company pays a dividend. Shares underlying the total amount of restricted stock units are then
issued when the restricted stock unit vests.

(vii) LTIP 2019: Time based awards granted on March 14, 2019 and include “holding period” and “claw back” provisions,
to vest evenly over four years. Time-based restricted stock units accumulate additional restricted stock units when
the Company pays a dividend. Shares underlying the total amount of restricted stock units are then issued when the
restricted stock unit vests.

(viii) LTIP 2020: Time based awards granted on March 13, 2020 and include “holding period” and “claw back” provisions,
to vest evenly over four years. Time-based restricted stock units accumulate additional restricted stock units when
the Company pays a dividend. Shares underlying the total amount of restricted stock units are then issued when the
restricted stock unit vests.

(ix) EIP 2019 and EIP 2020 annual awards are settled immediately on vesting, together with dividends which have been

accumulated during the vesting period. The 2019 awards were settled in 2020 net of payroll taxes.

LUXFER HOLDINGS PLC

PENSION ARRANGEMENTS

In lieu of contributions into Company pension plans, the Company offers a salary supplement, which ultimately
reflect the cost of previous defined benefit arrangements, now withdrawn. Executive Directors are paid the
equivalent of 25% of base salary, with an element of this funding being paid into the U.S. funded defined
contribution scheme for Alok Maskara.

Details of the payments made to the defined contribution arrangement and salary supplement during years 2020
and 2019 for the Executive Director are set forth in the tables below.

Director’s Remuneration and Benefits for the Year Ended December 31, 2020 and 2019

Executive
Director

Year
Alok Maskara 2020
2019

Definted
Benefit

Funded Defined
Contribution(1)

Unfunded Defined
Contribution

Cash
Supplement

Total

—
—

16,500 $
16,800 $

— $
— $

148,980 $
151,950 $

165,480
168,750

(1)

The Funded Defined Contribution for Alok Maskara relates to amounts paid in respect of a 401(k) matching
program.

Implementation of the Remuneration Policy for the Year Ending December 31, 2021 (Information not
subject to audit unless stated otherwise)

Set out below is a summary of how the Directors Remuneration Policy will be applied during the year ending
December 31, 2020.

Base Salary

Alok Maskara

2021

2020

675,000

657,000

% increase(1)
— %

(1) Actual base salary payout for Alok Maskara was lower in 2020 at $657,000 than his contractual salary ($675,000) due to
the impact of COVID-related furlough and voluntary pay reductions.

Pension Arrangements

The Executive Director will receive a cash supplement calculated at a flat rate of 25% of base salary.

Annual Bonus

In accordance with the Remuneration Policy, the maximum annual bonus for Alok Maskara, as Chief Executive
Officer, is capped at 200% of base salary. Included within this is the Additional Percentage Bonus to be awarded
on achievement of specific targets set by the Remuneration Committee. At the start of each year, the
Remuneration Committee reserve the discretion to set the Additional Percentage Bonus and related specific
targets that are aligned with the strategic goals of the Company.

As in previous years, the financial performance target element of the annual bonus will be based on a
combination of two financial performance metrics, management EBITA and Cash Conversion. It will be on a
sliding scale that commences only once threshold has been achieved and rises through the target performance
up to a stretch target. The financial performance award element of the annual bonus opportunity will be split
evenly between the above two financial metrics:

Financial metric annual bonus opportunity
Alok Maskara

Management EBITA
0% - 50%

Cash Conversion
0% - 50%

Split; sliding scale between threshold,
target and stretch

LUXFER HOLDINGS PLC

Long Term Incentives

The Remuneration Committee has then set targets for 2021 which, if attained, would lead to the granting of time-
based restricted stock units for Alok Maskara. The Committee has set a scorecard of metrics to assess the
performance of the Company based upon Total Shareholder Return (“TSR”) and adjusted diluted EPS. A greater
weighting has been assigned to the attainment of the TSR target which earns 60% of the performance awards
available, compared to the EPS target which has a 40% weighting.

The total shareholder return target will consist of a ranking of Company performance against a peer group of
twenty companies for the last ninety days of the year ended December 31, 2020 against the last ninety days of
the year ending December 31, 2023. Based on the relative level of shareholder return achieved, awards in
relation total shareholder return would be granted in March 2024 and vest in equal tranches in 2025 and 2026.

The Remuneration Committee is also proposing that Alok Maskara be granted time-based restricted stock units,
which vest in equal tranches commencing on the first anniversary of the grant date at the value of 40% of the
total target share award available.

If, during the preparation of the current year’s financial results, a material misstatement of the previous year’s
results is discovered, a clawback of the long-term incentive awards granted with respect to the misstated
element of the previous financial results applies to all employees, including our Executive Director. The
Remuneration Committee has discretion to apply the policy to recover and recoup incentive compensation in
such situations involving a material misstatement of financial results.

In accordance with the revised Remuneration Policy for approval at the 2021 AGM, the maximum value of
awards that can be made to the Chief Executive Officer Director in any one year is capped at up to 300% of
base salary (increased from a cap of 220% of base salary in the previous Remuneration Policy).

Non-Executive Directors

Summary of how the Directors' Remuneration Policy for the Non-Executive Directors will be applied
during the year ending December 31, 2021.

The Board decides the approach to compensating the Non-Executive Directors. The Board agreed to freeze the
base fees of the Non-Executive Directors for 2020, as shown below. The value of share awards as a percentage
of base fee is to remain fixed at up to 55% of base fee under the EIP.

2021

2020

Value of Share

$
Base Fee

Increase Awards % of Base
Base Fee

Fee
2021

Awards % of Base Fee
2020

David Landless
Clive Snowdon
Richard Hipple
Allisha Elliott
Lisa Trimberger

115,000
82,000
82,000
82,000
82,000

-%
-%
-%
-%
-%

Up to 100%
Up to 100%
Up to 100%
Up to 100%
Up to 100%

Up to 55%
Up to 55%
Up to 55%
Up to 55%
Up to 55%

LUXFER HOLDINGS PLC

Directors' Interests in Shares in the Company (audited)

David Landless (1)
Alok Maskara (2)
Clive Snowdon (3)
Richard Hipple (4)
Allisha Elliott
Lisa Trimberger (5)

Number of Ordinary Shares
Held at Dec 31, 2020

Number of Ordinary Shares
Held at Jan 1, 2020

11,160

195,950

7,459

6,044

—

5,000

9,638

154,925

6,447

3,000

—

5,000

(1) David Landless acquired 1,522 shares throughout 2020 as a result of the vesting of 2,288 time-based Restricted
Stock Units. 2,218 Restricted Stock Units were awarded in 2019 under the EIP and, together with an accrued
dividend of 70 shares, fully vested on June 2, 2020. Of those 2,288 shares, 1,138 shares were used as payment of
exercise price or tax liability. Of the 1,522 shares acquired by David Landless during 2020, 372 of those shares were
acquired through the operation of the Dividend Reinvestment Plan (DRIP), which allows for the purchase of
additional shares through the reinvestment of cash dividends. Further details on these awards can be found in the
notes to Single Figure-Non-Executive Directors' Remuneration on pages 42 to 43.

(2) Alok Maskara acquired 41,025 shares throughout 2020 as a result of the vesting of 80,927 time-based Restricted
Stock Units, as detailed in the table titled Outstanding Share Awards During 2020 on pages 46 and 47. Of those
80,927 shares, 39,902 shares were used as payment of exercise price or tax liability.

(3) Clive Snowdon acquired 1,012 shares throughout 2020 as a result of the vesting of 1,819 time-based Restricted
Stock Units. 1,763 Restricted Stock Units were awarded in 2019 under the EIP and, together with an accrued
dividend of 56 shares, fully vested on June 2, 2020. Of those 1,819 shares, 807 shares were used as payment of
exercise price or tax liability. The shares identified as held by Clive Snowdon are held by a connected person.
Further details on these awards can be found in the notes to Single Figure-Non-Executive Director's Remuneration
on pages 42 to 43.

(4) Richard Hipple acquired 3,044 shares throughout 2020. Richard Hipple purchased 3,000 shares on market in May
2020. Of the 3,044 shares acquired by Richard Hipple during 2020, 44 of those shares were acquired through the
operation of the Dividend Reinvestment Plan (DRIP), which allows for the purchase of addtional shares through the
reinvestment of cash dividends.

(5)

In August 2019, Lisa Trimberger purchased 5,000 shares on market. These shares are owned by a trust of which
Lisa Trimberger is the sole beneficiary and her spouse is the trustee.

Executive Director Shareholding Requirements

The Executive Director is required to hold and maintain ordinary shares equal in value to 150% of base salary.
The Director is allowed a period of three years from date of appointment to acquire the holding. Executive
Directors are required to obtain the Chair’s permission before they or their connected persons can deal in the
Company’s shares providing an effective way of ensuring their shareholding requirements are maintained.

Total Directors' Shareholdings and Interests at 31 December 2020

Shares Owned
Beneficially

Options Vested
but not
Exercised(1)

Restricted Stock Units Not Yet Vested
(assuming will be settled in Shares not
Cash)(1)

Alok Maskara
Non-Executive
David Landless
Clive Snowdon
Richard Hipple
Allisha Elliott
Lisa Trimberger

195,950

11,160
7,459
6,044
—
5,000

—

—
—
—
—
—

33,400

4,276
3,049
7,743
6,858
5,354

(1) A breakdown of the vested and unvested awards and brief details of the plans under which the awards were made

can be found in the Outstanding Share Awards During 2020 table on page 46 of this report.

LUXFER HOLDINGS PLC

Performance Graph

U.K. legislation requires the Annual Remuneration Report to contain a line graph that shows the TSR over a ten-
year period for both a holding of the Company’s listed shares and a hypothetical comparator holding of shares
representing a specified broad equity market index. As the Company was only listed on the NYSE at the
beginning of October 2012, we are only able to provide TSR for the Company’s shares in a listed environment
for a period 3 October 2012 to 31 December 2020. We have used the Russell 2000 index as the most
appropriate published index for comparison purposes. The graph shows the value of $100 vested in Luxfer in
October 2012 at the I.P.O., and the reinvestment of dividends since that date, compared to $100 invested in the
Russell 2000 on the same date, assuming the same reinvestment of dividends. The Russell 2000 was chosen as
the index as it comprises companies that closely resemble Luxfer. The TSR is calculated in U.S. dollars.

LUXFER HOLDINGS PLC

History of Total Remuneration Figure for Chief Executive Officer

We have included the total remuneration figure for the Chief Executive Officer for a seven-year period as
required by legislation.

U.S.$
Year ended
December 31

2014

2015

2016

2017 (2)

2018

2019 (3)

2020

Total remuneration

853,320 1,021,357

836,317

3,396,615

5,971,101 1,834,401 2,063,680

Annual
bonus % (1)

Share awards
vesting % (1)

% change in total
remuneration

— %

39 %

— %

124 %

200%

60%

50 %

59 %

21 %

— %

37 %

84%

584%

146 %

(13) %

20 %

(18) %

306 %

76 %

(69) %

12 %

The average increase in the CEO's total remuneration over the past seven years is a 44% increase, although this is heavily
impacted by the 306% increase in 2017. The CAGR over the same period was a 13% increase.

(1) Percentage of salary.

(2) The 2017 figures include Brian Purves’ remuneration for the first six months of 2017 and Alok Maskara’s

remuneration for the second six months of 2017.

(3) The 2019 share awards vesting figure of 584% (as a percentage of salary) includes the vesting of 120,000
performance-based EPS awards granted on hire. Excluding these awards, the adjusted share awards vesting figure
would be 183%.

Relative Importance of Spend on Pay

The following chart sets out the Group's actual spend on pay (for all employees) relative to dividends paid in the
current and prior year.

(To assist with conformity and transparency we have used staff costs as set out in Note 7 to the Consolidated
Financial Statements.)

Percentage Change in Chief Executive Officer's Remuneration

For 2020, we have selected U.S. employees as the most appropriate comparator as the Chief Executive Officer
is based in the U.S. and the benefits structure is similar, consistent with the approach taken for 2019.

LUXFER HOLDINGS PLC

U.S.$

Salary

Chief Executive Officer

Employee average

Benefits

Chief Executive Officer

Employee average

Annual Bonus

Chief Executive Officer

Employee average

Pay Ratio

2020

2019

% change

657,000

56,826

60,197

11,341

337,500

2,785

675,000

56,491

57,513

11,045

405,711

3,359

(2.7) %

0.6 %

4.7 %

2.7 %

(16.8) %

(17.1) %

For 2020, we have selected U.S. employees as the most appropriate comparator as the Chief Executive Officer
is based in the U.S. and the benefits structure is similar.

Year

2020

2019

Method

25th percentile
pay / ratio

50th percentile
pay / ratio

75th percentile
pay / ratio

43,945

24.0 : 1

44,289

25.7 : 1

70,952

14.9 : 1

70,895

16.1 : 1

103,402

10.2 : 1

104,424

10.9 : 1

The Company has selected method A for calculating the pay ratio, as the company has selected to use U.S.
employees as the most appropriate comparator and gender pay gap reporting (used in method B and C) is not
required in the U.S., method A was deemed the most appropriate, this is consistent with the approach taken for
2019. When calculating the percentiles, the average U.S. person's salary was used throughout the year. When
calculating the pay ratios, share-based compensation has been omitted as only senior managers are part of the
LTIP scheme.

The individuals who represent the three quartiles are all full-time employees and are considered to be
representative of the 25th, median and 75th percentile pay levels in the Group.

The pay ratios have reduced year on year, with the decrease predominantly a result of the reduction in the
annual bonus awarded and the CEO's reduction in salary. The median pay for the U.S. employee has remained
relatively flat, with the reduction being a result of decreases in annual bonus.

LUXFER HOLDINGS PLC

Statement of voting at AGM

The Annual Remuneration Implementation Report and Remuneration Policy was put to an advisory vote at the
2020 AGM.

Annual Remuneration Implementation
Report

Votes for (and
percentage of
votes cast)

Votes against (and
percentage of
votes cast)

Proportion of
share capital
voting

23,404,641

110,301

82.08 %

99.53 %

0.47 %

The vote received in favour of the Remuneration Report was 99.53%, and the larger shareholders with whom the
Directors liaise with from time to time did not make any negative comments in those conversations concerning
Directors’ pay and incentives.

Directors Remuneration Policy

The Directors' Remuneration policy was last approved at the 2018 Annual General Meeting, where 84.84% of
the votes cast were in favor of approving the Directors’ Remuneration Policy. The Remuneration Committee (the
“Committee”), as a standing committee of the Board of Directors of Luxfer Holdings PLC (the “Board” and the
“Company” respectively), presents this proposed Directors’ Remuneration Policy (“Policy”) for shareholder
approval at the 2021 Annual General Meeting of Shareholders (“Annual General Meeting” or “AGM”). Following
approval at the 2021 AGM, this Policy shall take effect immediately and remains valid for a period of three (3)
years or until a subsequent version is approved by an ordinary resolution of the shareholders. The Committee
reviews the Company’s remuneration programs and overall system to ensure (i) alignment with shareholders’
interests and best practices; (ii) fair and transparent remuneration; and (iii) that remuneration packages remain
competitive, attract high-quality talent, and reward performance.

Differences in Remuneration For Directors and Employees

The difference in remuneration for the Executive Director and other employees reflects differing levels of
responsibility, seniority, and market norms in the jurisdictions in which they are employed. The key differences in
remuneration are as follows:

•

Bonus arrangements for senior, middle, and lower management are set at a lower percentage than the
Executive Director but are broadly structured on the same basis to ensure commonality of objectives.
There is greater emphasis on performance-related pay for management, and bonus opportunity for other
employees may be lowered or not available, depending on jurisdiction.

Benefits for employees take into account their position and the market norms of the jurisdiction in which
they operate.

Pension arrangements are offered where it is the norm in the jurisdiction of the employee. Where local
regulation permits and where it is the market norm, higher contributions may be available for more
senior management. The Company’s primary pension plans are described in the Company’s financial
statements.

Participation in the LTIP is limited to the Executive Director and a select number of senior officers and
senior managers. At the discretion of the Committee, market value share awards or time-based share
awards may be awarded to employees in recognition of outstanding performance and to encourage
share ownership and retention. UK employees, if eligible, can participate in the UK Share Incentive Plan,
as described above.

The Committee commissions benchmarking studies of comparable companies and the pay of other senior
executives when setting the Executive Director’s pay. Consideration is also given to the pay and benefits that are
available throughout Luxfer, such as cost-of-living increases. Such consideration defines a clear structure of pay
and benefits layer-by-layer. The Committee does not consult with employees nor does it use internal comparison
metrics when drafting the Remuneration Policy. However, the Committee is aware of average pay and benefit
packages available within the Company. When setting the terms of awards for the Executive Director, The
Committee also considers views expressed by institutional shareholder bodies.

LUXFER HOLDINGS PLC

Approach to Recruitment Remuneration

Executive Director. When setting a remuneration package for a new Executive Director, including internal
promotions, the Committee will apply similar principles to those set out in the most recent approved
Remuneration Policy for both short- and long-term incentives.

Non-Executive Directors. New Non-Executive Directors will be paid fees on the same basis as existing Non-
Executive Directors. They will also participate in the Non-Executive Directors Incentive Plan under which the
annual awards are non-discretionary. Awards can be made in the form of Options, Restricted Stock, or Restricted
Stock Units at the discretion of the Board and based on the value of each type of award and the number of
shares left in the Plan. The vesting period is determined at the discretion of the Committee.

Severance and Change-in-Control Benefits

Executive Director. The Company may terminate the Executive Director’s contract without notice on the
occurrence of certain events identified in their contract. Such termination would normally consist of conduct
justifying dismissal such as gross misconduct. The Executive Director has the same employment rights as any
other employee in the case of redundancy or if a relevant tribunal determines that their termination was unfair
under UK law.

Ordinary notice period is 12 months. the remuneration entitlement is payment in lieu of notice in the event of
early termination. This may include base salary benefits and pension payable for the notice period. A bonus may
be paid if the period for which pay in lieu of notice is made extends past the year-end, subject to targets being
met.

Non-Executive Directors. Letters of Appointment for Non-Executive Directors and the Chair are not for a fixed
term. The Chair and Non-Executive Directors do not have any employment rights. New appointees to the Board
will generally be appointed on the same basis as the current Non-Executive Directors. Non-Executive Directors’
Letters of Appointment are available for inspection at the registered office of the Company.

Ordinary notice period is 3 months, except if the Director fails to be re-elected at an AGM, then the contract
terminates immediately without notice or compensation.

Policy on payment for Loss of Office

Contractual entitlements through the date of termination will be honored, and the Company will (i) pay any
amounts it is required to pay in accordance with the Director’s statutory employment or contractual rights and (ii)
settle those rights. The Company will seek to apply the principles of mitigation to ensure that it is not paying
more than is required. In the event of a compromise or severance agreement, the Committee may make
payments it considers reasonable in settlement of potential legal claims, such as incidental and professional fees
paid by a Director.

a. Bonus Payment. Generally, there is no entitlement to an annual bonus upon cessation of employment
within the first half of the calendar year. The Committee may, at its discretion, make a retroactive
payment on a pro-rated basis during the second half of the calendar year. After year-end but before
completion of an audit, departing employees will be paid the actual bonus earned on the normal bonus
payment date. Departing employees are not eligible for bonus payments if they breach any obligations in
their employment contract, including the period of notice.

b. LTIP Provisions. For employees departing for any reason other than termination for cause , all unvested
time-based awards will immediately lapse or be forfeited. All vested unexercised options and stock
appreciation rights will lapse on the first anniversary date of departure. Performance based awards will
vest on a pro-rated basis based on the performance results to the date of termination. The Committee
has the discretion to accelerate vesting and exercise dates, waive conditions to vesting or exercise, or
extend exercise periods after termination of employment. Discretion is typically used in such
circumstances where Directors are retiring before the last vesting date or leaving employment through ill
health or redundancy. In the case of termination for cause, all time-based awards, unvested
performance-based awards, and unexercised options will immediately lapse or be forfeited on the date
of termination.

LUXFER HOLDINGS PLC

Approval of Report

Richard Hipple, the Chair of the Committee, will attend the forthcoming AGM and will be available to answer any
questions shareholders may have concerning the Directors' remuneration. This Remuneration Report will be
submitted for approval by an advisory vote at the forthcoming AGM.

Signed on behalf of the Board by:

R J Hipple

CHAIR OF THE REMUNERATION COMMITTEE

April 29, 2021

For and on behalf of the Board

LUXFER HOLDINGS PLC

Statement of Directors' Responsibilities in Respect of the Financial
Statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the
Directors have prepared the Group an Company financial statements in accordance with International
accounting standards in conformity with the requirements of the Companies Act 2006.

Under Company law, the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and Company for the period. In preparing the financial
statements, the Directors are required to:

•

Select suitable accounting policies and then apply them consistently;

State whether applicable International accounting standards in conformity with the requirements of
Companies Act 2006 have been followed, subject to any material departures disclosed and explained in
the financial statements;

• Make judgements and accounting estimates that are reasonable and prudent; and

•

Prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group and Company will continue in business.

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position
of the Group and Company and enable them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006.

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

Directors' Confirmations

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

Each of the Directors, whose names and functions are listed in Directors' Report confirm that, to the best of their
knowledge:

•

Company financial statements, which have been prepared in accordance with International accounting
standards in conformity with the requirements of Companies Act 2006, give a true and fair view of the
assets, liabilities, financial position and loss of the Company; and

The Directors' Report includes a fair review of the development and performance of the business and
the position of the Group and Company, together with a description of the principal risks and
uncertainties that it faces.

Independent auditors’ report to the
members of Luxfer Holdings PLC
Report on the audit of the financial statements

Opinion
In our opinion, Luxfer Holdings PLC’s group financial statements and company financial statements (the “financial
statements”):

•

give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2020 and of the
group’s profit and the group’s and company’s cash flows for the year then ended;
have been properly prepared in accordance with international accounting standards in conformity with the requirements of
the Companies Act 2006; and
have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”),
which comprise: the consolidated and company balance sheets as at 31 December 2020; the consolidated income statement
and consolidated statement of comprehensive income, the consolidated and company cash flow statements, and the
consolidated and company statements of changes in equity for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting policies.

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

Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.

Our audit approach

Overview
Audit scope

• We performed a full scope audit of three significant reporting units within the group, and additional procedures over
selected financial statement line items in certain smaller components. We also performed audit procedures over the
corporate entities and relevant consolidation adjustments for selected financial statement line items. The audit work
performed over these components represented 84% of consolidated revenue and 71% of consolidated profit on
operations before taxation adjusted for restructuring and other expense.

Key audit matters

• Goodwill impairment assessment (group)
•

Impact of COVID-19 (group and company)

Materiality

• Overall group materiality: US$2,000,000 (2019: US$2,145,000) based on 5% of three year average profit on continuing
operations before taxation, adjusted for restructuring and other expense (2019: 5% of profit on operations before taxation,
adjusted for restructuring and other expense).

• Overall company materiality: £1,318,000 (2019: £1,462,000) based on 1% of total assets restricted to 90% of group

materiality.

• Performance materiality: US$1,500,000 (group) and £988,000 (company).

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

Capability of the audit in 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 in the Auditors’ responsibilities for the audit of the financial statements section, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to local and international tax legislation, health and safety regulations and environmental legislation in the
countries where the group operates, and we considered the extent to which non-compliance might have a material effect on
the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the
financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the
principal risks were related to posting inappropriate journal entries to manipulate financial results, including relating to
revenue recognition and EBITA, and management bias in accounting estimates. The group engagement team shared this risk
assessment with the component auditors so that they could include appropriate audit procedures in response to such risks in
their work. Audit procedures performed by the group engagement team and/or component auditors included:

•

•
•

•
•
•

obtaining an understanding of the legal and regulatory framework applicable to the group and how the group is complying
with that framework.
discussions with management, the Audit Committee, General Counsel and internal audit, including consideration of
known or suspected instances of non-compliance with laws and regulations and fraud.
reviewing minutes of meetings of those charged with governance.
challenging assumptions and judgements made by management in their significant accounting estimates, including but
not limited to the goodwill impairment assessment, pensions and deferred income taxes.
reviewing internal audit reports.
incorporating an element of unpredictability into our audit procedures.
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations
impacting financial results, revenue recognition and EBITA.

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

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

This is not a complete list of all risks identified by our audit.

Valuation of retirement benefits in relation to defined benefit schemes, inventory costing and restructuring and other expense,
which were key audit matters last year, are no longer included because of the reduction in subjectivity in, and effort required
to audit, these balances. Otherwise, the key audit matters below are consistent with last year.

Key audit matter
Goodwill impairment assessment (group)
Refer to pages 72 and 80 within the accounting policies
and note 14 of the consolidated financial statements.

The group has goodwill assets of $58.9m as at 31
December 2020. Goodwill is tested at least annually for
impairment, or more frequently if events or
circumstances indicate that the asset might be impaired.

The directors perform their annual goodwill impairment
test by comparing the recoverable amount of the cash
generating unit ("CGU"), to which goodwill has previously
been allocated, to its carrying value. A goodwill
impairment charge will be recognized for the amount by
which the CGU's carrying amount exceeds its
recoverable amount.

We focused on this area as the determination of the
value in use involves making judgments and estimates
based on the directors' assessment of the future results
and prospects of the CGUs. This in turn resulted in a
high degree of auditor judgment, subjectivity and effort in
performing procedures to evaluate the directors'
discounted future cash flow analysis.

How our audit addressed the key audit matter

To assess the goodwill impairment assessment
performed by the directors we have performed the
following:
We understood and evaluated the controls and
processes related to the goodwill impairment
assessment and selectively tested those controls we
identified as being key and on which we planned to rely.
Testing of controls included checking sufficient review of
the key assumptions and appropriate review of forecast
estimates and judgements. No significant control
deficiencies were identified.
We evaluated the historical accuracy of forecasts by
comparing the actual results from previous years against
the directors' previous forecasts. These procedures
enabled us to determine the accuracy of the directors’
forecasting process. When comparing the prior year
forecasts to the actual performance in 2020, we
considered why some forecasts were not met, including
the impact of COVID-19, and factored this into other
areas of our work.
We evaluated the assumptions underlying the estimated
future cash flows included in the discounted cash flow
analysis. We compared future revenue growth rates and
operating margins with historical performance as well as
gaining an understanding of key factors and judgements
applied in determining the future growth rates and
operating margins. We inspected detailed forecasts for
each CGU and obtained evidence to support the key
drivers for growth included within the estimated future
cash flows.
We engaged our internal specialists to assist us in
evaluating the perpetual growth rate used to determine
each CGU’s terminal value. We compared the rates
used to the weighted average of the long-term inflation
forecasts in the main geographies in which each CGU
operates.

Our internal specialists also assisted us in assessing the
appropriateness of the directors’ discount rates by
comparing the rate used for each CGU to our own
independently determined range of what we would
consider to be acceptable.
We questioned the directors on the appropriateness of
their sensitivity calculations and also applied our own
sensitivity analysis to the discounted cash flow analysis
to ascertain the extent to which reasonable adverse
changes would, either individually, or in aggregate,
require the impairment of goodwill.
Based on the procedures performed and the evidence
obtained, we found the directors' goodwill impairment
assessment to be reasonable.

Impact of COVID-19 (group and parent)
Refer to page 80 within the accounting policies and note
22 of the consolidated financial statements.

The Covid-19 pandemic has had a material impact on
the performance of the group during the financial year.
As a result, the pandemic has brought increased
estimation uncertainty to certain areas of the financial
statements.
The key areas of the financial statements most impacted
by the increased estimation uncertainty are described
below:

1. The directors have considered the appropriateness of
the going concern basis of preparation in the group’s
financial statements and concluded that this is
appropriate. The group has a $150m revolving credit
facility, expiring in July 2022, and is required to remain in
compliance with covenants attached to this facility.
2. The group has goodwill of $58.9m as at 31 December
2020. The directors considered the impact of Covid-19
on the goodwill impairment assessment, as well as
reasonably possible changes in key assumptions,
including future growth rates and the discount rates. No
impairments were identified in the year ended 31
December 2020 and this assessment was not found to
be sensitive to reasonably possible changes in key
assumptions.

In response to the key areas identified as being
significantly impacted by Covid-19, we have performed
the following:
Our evaluation of the directors’ assessment of the
group's and the company’s ability to continue to adopt
the going concern basis of accounting included the
procedures detailed in the ‘Conclusions relating to going
concern’ section further below.
Our evaluation of the directors’ assessment of the
impairment of goodwill included the procedures detailed
in the ‘Goodwill impairment assessment’ key audit
matter in the section above.
Finally, we assessed whether the nature and extent of
the disclosure made by the directors was sufficiently
complete to articulate the impact of the pandemic on the
group, supported by the information available to date.

Based on the procedures performed, we concluded that
the impact of Covid-19 has been appropriately evaluated
and reflected in the preparation of the financial
statements.

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

The group is split into two main reporting divisions being Gas Cylinders and Elektron. These are further split into four
business units as Luxfer Gas Cylinders, Luxfer MEL Technologies, Luxfer Graphic Arts and Luxfer Magtech. The Luxfer
Superform business unit, now presented within discontinued operations, was previously aggregated into the Gas Cylinders
reporting division.

Each business unit has multiple management reporting units in a range of different geographies and is structured mainly
across Europe and North America. The financial statements are a consolidation of a number of the group's management
reporting units and its the centralized functions.

The management reporting units vary in size and we identified three reporting units from across two countries which required
an audit of their full financial information due to their individual size or risk characteristics. Additionally, we identified eight
reporting units from across two countries which required an audit of specific balances to be performed. In total, these 11
reporting units accounted for 84% of consolidated revenue and 71% of the consolidated profit on operations before taxation,
adjusted for restructuring and other expense.

Two component audit teams performed the required audit and specified procedures over eight of the 11 reporting units, with
the procedures over the remaining three performed by the group engagement team. The group engagement team attended
the audit clearance meetings via conference call and had regular communication with the local teams during their audits. Our
attendance at the clearance meetings, review of selected audit working papers, review and discussion of reporting received
from local component teams, together with the work performed at a group level, gave us the evidence we needed for our
opinion on the consolidated financial statements as a whole.

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

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

Overall
materiality
How we
determined it

Rationale for
benchmark
applied

Financial statements - group

US$2,000,000 (2019: US$2,145,000).

5% of three year average profit on continuing operations before
taxation, adjusted for restructuring and other expense (2019: 5%
of profit on operations before taxation, adjusted for restructuring
and other expense)
Based on the benchmarks used in the Annual Report, profit on
continuing operations before taxation is the primary measure
used by the shareholders in assessing the performance of the
group, and is a generally accepted auditing benchmark.
Restructuring and other expense were adjusted for as this
provides us with a consistent year on year basis for determining
materiality. Given that current year performance has been
significantly impacted by COVID-19, we consider using an
average of three years average benchmark better reflects what
a reader of the financial statements would consider material.

Financial statements -
company
£1,318,000 (2019: £1,462,000).

1% of total assets restricted to
90% of group materiality

Total assets is appropriate as the
entity is not profit oriented. The
company holds investments in
subsidiaries and therefore total
assets is considered a generally
acceptable auditing benchmark.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality.
The range of materiality allocated across components was from $266,000 to $1,634,000. Certain components were audited
to a local statutory audit materiality that was also less than our overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to
US$1,500,000 for the group financial statements and £988,000 for the company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount in the middle of our
normal range was appropriate.

We agreed with those charged with governance that we would report to them misstatements identified during our audit above
$200,000 (group audit) (2019: $110,000) and £131,000 (company audit) (2019: £75,000) as well as misstatements below
those amounts that, in our view, warranted reporting for qualitative reasons.

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

•

•
•

•

obtaining the directors' forecasts and going concern assessment for the period to June 2022, which included the expected
continuing impact of Covid-19.
evaluating and assessing the process by which the directors' future cash flow forecasts were prepared.
agreeing the opening gross debt and cash position of the directors' cash flow forecasts to the March 2021 management
accounts.
reviewing the arithmetical accuracy of the directors' forecasts.
evaluating and assessing the directors' key assumptions in the going concern assessment, including the forecast
revenues and anticipated operating margins over the period to June 2022, which included a sensitivity analysis of the key
assumptions underpinning the cash flows throughout the going concern period.
obtaining the terms of the group’s financing facility and the covenants in place in relation to this facility, and determining
that the directors' base case and severe but plausible downside scenarios demonstrated compliance with all covenant
conditions for at least 12 months from the date of the approval of the financial statements.
gaining an understanding of the potential mitigating actions that the directors could implement to meet the requirements of
the covenants.
reviewing the directors' disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group's and the company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's
and the company's ability to continue as a going concern.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based
on these responsibilities.

With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.

Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors’ Report for the year ended 31 December 2020 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the Strategic report and Directors’ Report.

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

Responsibilities for the financial statements and the audit

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

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

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

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

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

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

Other required reporting

Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or
•

adequate accounting records have not been kept by the company, or returns adequate for our audit have not been
received from branches not visited by us; or
certain disclosures of directors’ remuneration specified by law are not made; or
the company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns.

•
•

We have no exceptions to report arising from this responsibility.

Gregory Briggs (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Manchester

April 29, 2021

LUXFER HOLDINGS PLC

CONSOLIDATED INCOME STATEMENT

All amounts in millions, except share and per share data

REVENUE
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Share of results of joint ventures and associates
Changes to defined benefit pension plans
Restructuring and other expense
OPERATING PROFIT
Other (expense) / income:

Net loss on acquisitions and disposals
Finance income:

Interest received

Finance costs:

Interest costs
IAS 19R retirement benefits finance charge
Unwind of discount on deferred contingent consideration from acquisitions

Total finance costs

PROFIT ON OPERATIONS BEFORE TAXATION
Income tax expense
NET INCOME FROM CONTINUING OPERATIONS
Net loss from discontinued operations
NET INCOME FOR THE YEAR
Attributable to:
Equity shareholders

Earnings per share1:
Basic from continuing operations
Basic from discontinued operations
Basic

Diluted from continuing operations
Diluted from discontinued operations
Diluted

LUXFER HOLDINGS PLC

Note
2

15
6
6
4

9
9
9

2020
$M

2019
$M

324.8
(237.3)
87.5
(6.5)
(42.6)
(0.1)
—
(7.3)
31.0

—

(6.0)
(1.0)
—
(7.0)
24.0
(6.2)
17.8
(0.9)
16.9

373.4
(261.4)
112.0
(7.6)
(55.5)
0.7
2.7
(29.6)
22.7

(1.4)

0.1

(5.6)
(1.4)
(0.2)
(7.2)
14.2
(8.2)
6.0
(1.8)
4.2

16.9

4.2

0.65
(0.03)
0.61

0.64
(0.03)
0.60

0.22
(0.07)
0.15

Weighted average ordinary shares outstanding:
Basic
Diluted

27,557,219
27,971,382

27,289,042
27,882,864

(1) The calculation of earnings per share is performed separately for continuing and discontinued operations. As a
result, the sum of the two in any particular period may not equal the earnings-per-share amount in total.

In 2020, the basic average shares outstanding and diluted average shares outstanding were the same for
discontinued operations because the effect of potential shares of common stock was anti-dilutive since the
Company generated a net loss from discontinued operations. As a result, 593,822 shares combined were not
included in the computation of diluted EPS for discontinued operations in 2020.

LUXFER HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Net income for the year

Other comprehensive (loss) / income movements
Items that may be reclassified to the consolidated income statement:

Exchange differences on translation of foreign operations
Fair value movements in cash flow hedges

Transfers to consolidated income statement on cash flow hedges
Deferred income taxes on cash flow hedges

Hedge accounting income adjustments
Total hedge accounting and translation of foreign operations movements

Items that will not be reclassified to the consolidated income statement:
Remeasurement of defined benefit retirement plans

Deferred income taxes on retirement benefits remeasurements
Retirement benefits changes

Total other comprehensive loss movements for the year
Total comprehensive income for the year

Attributed to:
Equity shareholders

LUXFER HOLDINGS PLC

Note

2020
$M

2019
$M

16.9

4.2

2.9
—

—
—

—
2.9

(19.0)

3.7
(15.3)

(12.4)
4.5

(0.6)
0.3

0.1
(0.1)

0.3
(0.3)

(2.3)

0.6
(1.7)

(2.0)
2.2

4.5

2.2

LUXFER HOLDINGS PLC

CONSOLIDATED BALANCE SHEET

LUXFER HOLDINGS PLC

December 31, 2020 December 31, 2019

Note

ASSETS

Non-current assets

Property, plant and equipment

Right-of-use assets

Intangible assets

Investments

Deferred income tax assets

Current assets

Inventories

Trade and other receivables

Income tax receivable

Cash and cash equivalents

Held-for-sale assets

TOTAL ASSETS

EQUITY AND LIABILITIES

Capital and reserves

Ordinary share capital

Deferred share capital

Share premium account

Treasury shares

Retained earnings

Own shares held by ESOP

Share based compensation reserve

Translation reserve

Merger reserve

Non-current liabilities

Bank and other loans

Retirement benefits

Lease liability

Deferred income tax liabilities

Provisions

Trade and other payables

Current liabilities

Trade and other payables

Current income tax liabilities

Deferred contingent consideration
Lease liability

Provisions

Held-for-sale liabilities

Total liabilities

TOTAL EQUITY AND LIABILITIES

26
27

85.5

9.2

72.4

0.5

19.2

186.8

68.8

43.1

1.5

36.2

151.1

337.9

26.6

149.9

77.1

(4.0)

297.1

(1.4)

(7.3)

(48.9)

(333.8)

155.3

53.1

50.8

7.6

2.8

1.0

0.1

115.4

41.7

0.4

—
2.1

12.0

11.0

67.2

182.6

337.9

98.2

14.5

72.9

2.3

16.5

204.4

94.5

66.3

1.2

10.3

3.9

176.2

380.6

26.6

149.9

74.5

(4.0)

309.1

(1.7)

(6.9)

(51.8)

(333.8)

161.9

91.0

35.2

11.7

1.0

0.9

0.6

140.4

63.7

0.4

0.5
3.3

10.4

—

78.3

218.7

380.6

THE FINANCIAL STATEMENTS ON PAGES 64 TO 119 WERE APPROVED BY THE BOARD ON APRIL 29, 2021 AND SIGNED ON ITS
BEHALF:

Alok Maskara,

April 29, 2021

Company Registration no. 03690830

LUXFER HOLDINGS PLC

CONSOLIDATED CASH FLOW STATEMENT

The amounts below include both continuing and discontinued operations.

LUXFER HOLDINGS PLC

Note

2020

2019

RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES

Net income for the year

Adjustments to reconcile net income for the year to net cash flows from continuing operating activities:

Income taxes

Depreciation and amortization

Lease right-of-use asset depreciation

Loss on disposal of property, plant and equipment

Gain on disposal of business

Share based compensation charges / (credits) net of cash settlement

Net interest costs

Non-cash restructuring charges

Property, plant and equipment impairment

Intangible assets impairment

Other non-cash restructuring charges

Curtailment and past service (credits) / charges on retirement benefits obligations

IAS 19R retirement benefits finance charge

Acquisitions and disposals costs / (gains)

Unwind of discount on deferred contingent consideration from acquisitions

Share of results of joint ventures and associates

Changes in operating assets and liabilities:

Decrease / (increase) in receivables

Decrease in inventories

Decrease in payables

Movement in retirement benefits obligations

Movement in provisions

Income taxes paid

NET CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment

Purchases of intangible assets

Proceeds from sale of business

Receipts from sales of property, plant and equipment

Net cash flows on purchase of businesses

NET CASH FLOWS USED IN INVESTING ACTIVITIES

NET CASH FLOWS BEFORE FINANCING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Interest and similar finance costs paid on banking facilities

Interest paid on Loan Notes

Bank interest received
Net (repayment) / drawdown on banking facilities

Payments made in respect of leases

Dividends paid

Proceeds from issue of shares

NET CASH FLOWS USED IN FINANCING ACTIVITIES

NET DECREASE IN CASH AND CASH EQUIVALENTS

Net foreign exchange differences

Net cash and cash equivalents at January 1

Net cash and cash equivalents at December 31

8, 9

16.9

6.2

14.7

3.3

0.1

—

1.4

6.0

—

1.0

—

0.1

16.0

13.7

(17.1)

(5.2)

1.9

(2.1)

56.9

(8.2)

—

1.5

—

(0.4)

(7.1)

49.8

(1.2)

(3.9)

—
(38.2)

(3.7)

(13.6)

1.1

(59.5)

(9.7)

0.9

10.3

1.5

4.2

7.3

15.3

3.7

0.2

(2.9)

0.1

5.8

6.1

0.4

0.1

(2.7)

1.4

4.3

0.2

(0.7)

(2.6)

0.3

(18.0)

(6.9)

0.7

(6.1)

10.2

(13.9)

(0.1)

4.4

1.2

(0.5)

(8.9)

1.3

(1.3)

(3.4)

0.1
17.5

(4.1)

(13.6)

3.5

(1.3)

—

(0.3)

10.6

10.3

LUXFER HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to the equity shareholders of the parent

Ordinary
share
capital

Deferred
share
capital

Share
premium
account

Treasury
shares

Retained
earnings

Own
shares
held
by ESOP

Other
Reserves
(1)

Note

Total
equity

At At January 1, 2019

Net income for the year

Currency translation differences

Increase in fair value of cash flow hedges

Transfer to consolidated income statement on cash flow

hedges

Remeasurement of defined benefit retirement plans
Deferred income taxes on items taken to other

comprehensive income

Total comprehensive income for the year

Shares sold from ESOP

Equity dividends

Equity settled share based compensation charges

Utilization of treasury shares

Utilization of shares from ESOP

Other changes in equity in the year

At December 31, 2019

Net income for the year

Currency translation differences

Remeasurement of defined benefit retirement plans
Deferred income taxes on items taken to other

comprehensive income

Total comprehensive income for the year

Shares sold from ESOP

Equity dividends

Equity settled share based compensation charges

Utilization of treasury shares

Utilization of shares from ESOP

Other changes in equity in the year

At December 31, 2020

26.6

149.9

65.7

(4.3)

320.2

(2.2)

(386.2)

169.7

— $

— $ — $

— $

4.2 $

— $ — $

4.2

— $ — $

— $

(0.6) $

(0.6)

— $ — $

— $

0.3 $

0.3

— $ — $

— $

0.1 $

0.1

— $ — $

— $

(2.3) $

— $ — $

(2.3)

— $

— $ — $

— $

0.6 $

— $

(0.1) $

—

— $

—

2.5

—

(0.3)

— $

3.3 $

— $

0.2 $ — $

— $ — $

— $

(13.6) $

— $ — $

(13.6)

— $ — $

— $

4.1 $

— $ — $

0.3 $

— $

(0.1) $

4.1

0.2

— $

5.5 $

— $

0.3 $

(10.0) $

(4.2)

—

26.6

—

149.9

8.8

74.5

0.3

(13.6)

0.5

(6.0)

(10.0)

(4.0)

309.1

(1.7)

(392.5)

161.9

— $

— $ — $

— $

16.9 $

— $ — $

16.9

— $ — $

— $

2.9 $

2.9

— $ — $

— $

(19.0) $

— $ — $

(19.0)

— $

— $ — $

— $

3.7 $

— $ — $

—

— $

—

1.6

—

2.9

— $

0.8 $

— $

0.3 $ — $

— $ — $

— $

(13.6) $

— $ — $

(13.6)

— $ — $

— $

2.8 $

2.8

— $

0.1 $

— $

(0.2) $

(0.1)

— $

1.7 $

— $

(3.0) $

(1.3)

—

26.6

—

149.9

2.6

77.1

—

(13.6)

0.3

(0.4)

(11.1)

(4.0)

297.1

(1.4)

(390.0)

155.3

0.5

2.2

3.5

3.7

4.5

1.1

(1)

Other reserves include a hedging reserve of nil (2019: nil), a translation reserve of $48.9 million deficit (2019: deficit of $51.8 million), a merger
reserve of $333.8 million deficit (2019: $333.8 million deficit) and a share based compensation reserve of $7.3 million deficit (2019: $6.9 million
deficit).

LUXFER HOLDINGS PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

All amounts in millions, except share and per share data

1. Accounting policies

Basis of preparation and statement of compliance with IFRS

The consolidated financial statements have been prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 as they apply to the consolidated
financial statements of the Group for the year ended December 31, 2020. The consolidated financial statements
have been prepared on a historical cost basis, except where IFRS requires or permits fair value measurement.

The directors have a reasonable expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. In assessing the appropriateness of adopting the going concern basis in the
preparation of these financial statements, cash forecasts and projections have been prepared to June 2022.
There is sufficient headroom in our covenant compliance which would enable the Group to drawdown on the
RCF and not impact the Group's ability to continue as a going concern. Therefore the directors continue to apply
the going concern basis for accounting in the preparation of the consolidated financial statements.

For the purpose of the accompanying consolidated financial statements, subsequent events have been
evaluated through to April 29, 2021, which is the date the consolidated financial statements were authorized by
the Board. The consolidated financial statements were issued on April 29, 2021.

Basis of consolidation

The consolidated financial statements comprise the financial statements of Luxfer Holdings PLC and its
subsidiaries (the "Group") at December 31 each year. The financial statements of the subsidiaries are prepared
for the same reporting year as the parent company, using consistent accounting policies. All inter-company
balances and transactions, including unrealized profits arising from intra-Group transactions, have been
eliminated in full.

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group.

The accounting policies which follow, set out those polices which apply in preparing the consolidated financial
statements for the years ended December 31, 2019 and December 31, 2020.

Parent Company Guarantee

In accordance with S479A of the Companies Act 2006, Luxfer Holdings PLC has provided a parent company
guarantee for the below listed subsidiaries, meaning that for the year ended December 31, 2020, they are
exempt from audit.

Name of Company

Biggleswick Limited

Lumina Trustee Limited

Luxfer Gas Cylinders China Holdings Limited

Luxfer Group Limited

Luxfer Group 2000 Limited

Luxfer Group Services Limited

Luxfer Magtech International Limited

Luxfer Overseas Holdings Limited

Company registered number

3349880

6055812

5165622

3944037

4027006

3981395

2891444

3081726

LUXFER HOLDINGS PLC

Presentation currency

The consolidated financial statements are presented in U.S. dollars and all values are rounded to the nearest
$0.1 million except when otherwise indicated. The books of the Group's non-U.S. entities are converted to U.S.
dollars at each reporting period date in accordance with the accounting policy below.

The functional currency of the holding company Luxfer Holdings PLC and its U.K. subsidiaries remains GBP
sterling for the year-ended 2020. As of January 1, 2021, the functional currency of Luxfer Holdings PLC will be
USD given a review of the intercompany financing and the primary operations of the company.

Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, measured at acquisition date fair value, and the amount of any
non-controlling interest in the acquiree. The choice of measurement of non-controlling interest, either at fair
value or at the proportionate share of the acquiree's identifiable net assets, is determined on a transaction by
transaction basis. Acquisition costs are expensed as incurred.

Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition-date fair value of the
consideration transferred and the amount recognized for the non-controlling interest over the net identifiable
amounts of the assets acquired and the liabilities assumed in exchange for the business combination. After initial
recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the
Group's cash generating units that are expected to benefit from the combination. Goodwill is tested at leaset
annually for impairment, or more frequently if events or changes in circumstances indicate that the asset is
impaired.

Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous
U.K. GAAP amounts subject to being tested for impairment at that date and in subsequent years.

A bargain purchase is measured at cost being the excess of the net identifiable amounts of the assets acquired
and the liabilities assumed in exchange for the business combination over the aggregate of the acquisition-date
fair value of the consideration transferred and the amount recognized for the non-controlling interest. Any
amount of a bargain purchase is recognized immediately as income.

Contingent consideration arising as a result of a business combination is recognized at fair value at the
acquisition date. Subsequent changes in the fair value of contingent consideration classified as an asset or
liability are accounted for in accordance with the relevant IFRS standards.

Other intangible assets

Other intangible assets excluding development costs, are measured initially at purchase cost, or where acquired
in a business combination at fair value, and are amortized on a straight-line basis over their estimated useful
lives as shown in the table below.

Research expenditure is expensed as incurred. Internal development expenditure is charged as administrative
costs to the consolidated income statement in the year it is incurred unless it meets the recognition criteria of
IAS 38 "Intangible Assets". Where the recognition criteria are met, intangible assets are capitalized and
amortized over their estimated useful economic lives from product launch, as shown in the table below.
Intangible assets relating to products in development are subject to impairment testing at each balance sheet
date or earlier upon indication of impairment.

Technology and patents

Tradenames and trademarks

Customer relationships

Backlogs and non-compete agreements

Development costs

Software

14 – 20 years

20 – 25 years

10 – 15 years

5 – 6 years

5 – 10 years

4 – 7 years

The carrying values are reviewed for impairment when events or changes in circumstances indicate that the
carrying value may not be recoverable. Reviews are made annually of the estimated remaining lives and residual
values of the patents and trademarks.

LUXFER HOLDINGS PLC

Revenue

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The
majority of the Group’s contracts have a single performance obligation as the promise to transfer the individual
goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.
There is no variable consideration or obligations for returns, refunds, and no other related obligations in the
Group’s contracts.

Payment terms and conditions vary by contract type and may include a requirement of payment in advance. In
instances where the timing of revenue recognition differs from the timing of invoicing, the Company has
determined its contracts do not include a significant financing component.

The Company’s revenue is primarily derived from the following sources and is recognized when or as the
Company satisfies a performance obligation by transferring a good or service to a customer.

Product revenues

We recognize revenue when it is realized or realizable and has been earned. Revenue is recognized when
persuasive evidence of an arrangement exists, shipment or delivery has occurred (depending on the terms of the
sale), which is when the transfer of product or control occurs, our price to the buyer is fixed or determinable, and
the ability to collect is reasonably assured.

Royalties

Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreements,
provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be
measured reliably.

Tooling revenue

Revenue from certain long-term tooling contracts is recognized over the contractual period under the cost-to-cost
measure of progress as this is when the benefit is received by the customer. Incremental direct costs associated
with the contract include, direct labor hours, direct raw material costs and other associated costs. Under this
method, sales and gross profit are recognized as work is performed either based on the relationship between the
actual costs incurred and the total estimated costs at completion (“the cost-to-cost method”) or based on efforts
for measuring progress towards completion in situations in which this approach is more representative of the
progress on the contract than the cost-to-cost method. We record costs and earnings in excess of billings on
uncompleted contracts within Trade and other receivables and billings in excess of costs and earnings on
uncompleted contracts within Trade and other payables in the consolidated balance sheet. Where customer
acceptance is on final completion and handover of the tool, revenue is recognized at the point the customer
accepts ownership of the tool. All tooling revenue relates to discontinued operations resulting in all related
activity included in discontinued operations and associated balances included in assets and liabilities held-for-
sale.

Practical Expedients

The Company applies the practical expedient and does not disclose information about remaining performance
obligations for contracts that have original expected durations of one year or less.

LUXFER HOLDINGS PLC

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation is initially calculated on a straight-line basis over the estimated useful life of the particular asset. As
a result of the complexity of our manufacturing process, there is a wide range of plant and equipment in
operation. The rate of annual charge is summarized as follows:

Freehold buildings

Leasehold land and buildings

Plant and equipment

Including:

Heavy production equipment (including casting, rolling, extrusion and press equipment)

Chemical production plant and robotics

Other production machinery

Furniture, fittings, storage and equipment

Freehold land is not depreciated.

3% – 10%

The lesser of life of
lease or freehold rate

4% – 30%

4% – 6%

10% – 15%

10% – 20%

10% – 30%

Reviews are made annually of the estimated remaining lives and residual values of individual productive assets,
taking account of commercial and technological obsolescence as well as normal wear and tear.

For any individual asset the carrying value is reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable. If any such indication exists and where the carrying value
exceeds the estimated recoverable amount, the asset is written-down to its recoverable amount. The
recoverable amount of property, plant and equipment is the greater of the fair value less costs of disposal and
the value in use. In assessing the 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. For an asset that does not generate largely independent cash inflows, the recoverable
amount is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized
in the consolidated income statement as part of the profit or loss on operations before taxation.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying value of the item) is included in
the consolidated income statement in the year the item is derecognized.

Maintenance costs in relation to an item of property, plant and equipment are expensed as incurred.

Inventories

Inventories are stated at the lower of cost and net realizable value. Raw materials are valued on a first-in, first-
out basis. Strategic purchases of inventories in order to secure supply and reduce the impact of price volatility on
the cost of inventories are valued on an average cost basis. Work in progress and finished goods costs comprise
direct materials and, where applicable, direct labor costs, an apportionment of production overheads and any
other costs that have been incurred in bringing the inventories to their present location and condition. Net
realizable value represents the estimated selling price less all estimated costs of completion and costs to be
incurred in selling and distribution. Inventories are reviewed on a regular basis, and we will make allowance for
excess or obsolete inventories and write-down to net realizable value based primarily on committed sales prices
and our estimates of expected and future product demand and related pricing.

Held-for-sale assets / liabilities

In accordance with IFRS 5, assets and liabilities held-for-sale are written down to their fair value less costs to sell
and classified as held-for-sale on the face of the balance sheet. Impairments recognized on the assets and
liabilities will be taken to the income statement and presented within restructuring and other expense.

If an asset or liability is no longer available for sale, then they will be reclassified within their relevant asset or
liability financial statement line and held at amortized cost.

Discontinued operations

In accordance with IFRS 5, certain amounts in prior-year income statement were reclassified to conform to the
current-year presentation due to the classification of certain businesses as discontinued operations.

LUXFER HOLDINGS PLC

Foreign currencies

Transactions in currencies other than an operation's functional currency are initially recorded in the functional
currency at the rate of exchange prevailing on the dates of transactions. At each balance sheet date, the foreign
currency monetary assets and liabilities are translated into the functional currency at the rates prevailing on the
balance sheet date.

All differences are taken to the consolidated income statement with the exception of differences on foreign
currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to
equity until the disposal of the net investment, at which time they are recognized in the consolidated income
statement. Tax charges and credits attributable to exchange differences on those borrowings are also dealt with
in equity.

On consolidation, the assets and liabilities of the Group's foreign operations are translated at exchange rates
prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates
for the period. Exchange differences that arise, if any, are classified as equity and transferred to the Group's
translation reserve. Such translation differences are recognized in the consolidated income statement in the
period in which the operation is disposed or partially disposed.

Income taxes

Current income taxes

Current income tax assets and liabilities for the current period are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted, or substantively enacted, at the reporting date in the countries where the Group operates
and generates taxable income.

Current income taxes relating to items recognized directly in equity is recognized in equity and not in the
consolidated income statement. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate.

Deferred income taxes

Deferred income taxes are the future income taxes expected to be payable or recoverable on differences
between the carrying values of assets and liabilities in the consolidated financial statements and the
corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance
sheet liability method. Deferred income tax liabilities are generally recognized for all taxable temporary
differences. Deferred income tax assets are recognized to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilized. Such assets and liabilities are not
recognized 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 that affects neither the tax profit nor the
accounting profit.

Deferred income tax liabilities are recognized for taxable temporary differences arising on investments in
subsidiaries, investments in associates, and interests in joint ventures, 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 value of a deferred income tax asset is reviewed at each balance sheet date 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 income taxes are calculated at the tax rate that is expected to apply in the period when the liability is
settled or the asset is realized based on tax rates and tax laws that have been enacted or substantively enacted
at the balance sheet date. Deferred income taxes are charged or credited to the consolidated income statement,
except when it relates to items charged or credited directly to equity, in which case the deferred income taxes
are also dealt with in equity.

LUXFER HOLDINGS PLC

Leases

The Group leases various buildings, equipment and vehicles. Rental contracts are typically made for fixed
periods of 12 months to 10 years, but may have extension options. Contracts may contain both lease and non-
lease components. The Group allocates the consideration in the contract to the lease and non-lease
components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions. The lease agreements do not impose any covenants
other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used
as security for borrowing purposes.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:

•

fixed payments (including in-substance fixed payments), less any lease incentives receivable

variable lease payment that are based on an index or a rate, initially measured using the index or rate as
at the commencement date

amounts expected to be payable by the group under residual value guarantees

the exercise price of a purchase option if the group is reasonably certain to exercise that option, and

payments of penalties for terminating the lease, if the lease term reflects the group exercising that
option.

Lease payments to be made under reasonably certain extension options are also included in the measurement
of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing
rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain
an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security
and conditions.

The group is exposed to potential future increases in variable lease payments based on an index or rate, which
are not included in the lease liability until they take effect. When adjustments to lease payments based on an
index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease
payments are allocated between principal and finance cost.

Right-of-use assets are measured at cost comprising the following:

•

the amount of the initial measurement of lease liability

any lease payments made at or before the commencement date less any lease incentives received

any initial direct costs, and

restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a
straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset’s useful life. Payments associated with short-term leases of equipment
and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or
loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT
equipment and small items of office furniture.

Retirement benefits costs

In respect of defined benefit plans, obligations are measured at the present value whilst plan assets are
recorded at fair value. The cost of providing benefits is determined using the Projected Unit Credit Method, with
actuarial valuations being carried out at each balance sheet date.

The charge to the consolidated income statement is based on an actuarial calculation of the Group's portion of
the annual expected costs of the benefit plans and the net interest cost, which is calculated by applying the
discount rate to the net defined benefit obligation, taking into account contributions and benefits paid. Re-
measurements are recognized in the statement of comprehensive income.

When a settlement or curtailment occurs the obligation and related plan assets are remeasured using current
actuarial assumptions and the resultant gain or loss recognized in the consolidated income statement in the
period in which the settlement or curtailment occurs.

Payments to defined contribution plans are charged as an expense as they fall due.

LUXFER HOLDINGS PLC

Provisions

Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that
a transfer of resources will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.

Share based compensation

The cost of equity settled transactions is recognized, based upon the fair value at grant date, together with a
corresponding increase in the share based compensation reserve in equity, over the period in which the
performance or service conditions are fulfilled. The cumulative expense recognized for equity settled
transactions at each reporting date until the vesting date reflects the extent to which the vesting period has
expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The
consolidated income statement expense or credit for a period represents the movement in cumulative expense
recognized at the beginning and end of that period.

Separate disclosure of expenses or income

Certain items of expense or income are presented separately with restructuring and other expenses, on the face
of the income statement, based on management's judgment that they need to be disclosed by virtue of their
size, nature or incidence in order to provide a proper understanding of our results of operations and financial
condition. Such items of expense or income incurred during a period are disclosed under identifiable headings in
the consolidated income statement and further explained in Note 6 to the consolidated financial statements.
Examples of such items include but are not limited to:

•

Restructuring of the activities of the Group and reversals of any provisions for the costs of restructuring;

write-downs of inventories to net realizable value or of property, plant and equipment to recoverable
amount, as well as reversals of such write-downs;

disposals of items of property, plant and equipment;

disposals of investments and subsidiaries;

discontinued operations;

litigation settlements; and

other material reversals of provisions.

The nature of the items of expense or income is considered to determine whether the item should be presented
as part of operating profit or loss or as other expenses or income. The adjusted earnings per share calculations,
presented by the Group exclude the impact of these items. Management believes that the use of adjusted
measures such as this provides additional useful information on underlying trends to shareholders.

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with
an original maturity date of three months or less. For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash and cash equivalents as defined above, but net of bank overdrafts.

Interest in joint ventures

The Group has applied IFRS 11 to all joint arrangements. Under IFRS 11, investments in joint arrangements are
classified as either joint operations or joint ventures depending on the contractual rights and obligations of each
investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures.
Joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting,
interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group's share
of the post-acquisition profits or losses and movements in other comprehensive income.

When the Group's share of losses in a joint venture equals or exceeds its interests in the joint ventures (which
includes any long-term interests that, in substance, form part of the Group's net investment in the joint ventures),
the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made
payments on behalf of the joint ventures.

LUXFER HOLDINGS PLC

The Group determines at each reporting date whether there is any objective evidence that the investment in the
joint venture is impaired. If the investment is impaired, the Group calculates the amount of impairment as the
difference between the recoverable amount of the joint venture and its carrying value and recognizes the amount
as 'restructuring and other expense' in the consolidated income statement.

Gains or losses resulting from upstream and downstream transactions between the Group and its joint venture
are recognized in the Group's consolidated financial statements only to the extent of unrelated investor's
interests in the joint venture. Unrealized losses are eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of the joint ventures have been changed where
necessary to ensure consistency with the policies adopted by the Group.

Interest in associates

Associates are all entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting. Under the equity method of accounting, the investment is
initially recognized at cost, and the carrying value is increased or decreased to recognize the investor's share of
the profit or loss and movements in other comprehensive income of the investee after the date of acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where
appropriate.

The Group's share of post-acquisition profit or loss is recognized in the consolidated income statement, and its
share of post-acquisition movements in other comprehensive income is recognized in other comprehensive
income with a corresponding adjustment to the carrying value of the investment. When the Group's share of
losses in an associate equals or exceeds its interest in the associate, including other unsecured receivables, the
Group does not recognize further losses, unless it has incurred legal or constructive obligations or made
payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the
associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference
between the recoverable amount of the associate and its carrying value and recognizes the amount as
'restructuring and other expense' in the consolidated income statement.

Gains or losses resulting from upstream and downstream transactions between the Group and its associate are
recognized in the Group's consolidated financial statements only to the extent of unrelated investor's interests in
the associates. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of
the asset transferred. Accounting policies of associates have been changed where necessary to ensure
consistency with the policies adopted by the Group.

Dilution gains and losses arising in investments in associates are recognized in the consolidated income
statement.

Financial assets and liabilities

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging
instrument. For hedges of foreign currency purchases, the Group enters into hedge relationships where the
critical terms of the hedging instrument match exactly with the terms of the hedged item. The Group therefore
performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged
item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the
Group uses the hypothetical derivative method to assess effectiveness.

In hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast transaction
changes from what was originally estimated, or if there are changes in the credit risk of a country or the
derivative counterparty. As all critical terms matched during the year, the economic relationship was 100%
effective.

In 2020 the Group did not hedge account for its contracts.

LUXFER HOLDINGS PLC

Trade and other receivables

Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they
contain significant financing components, in which case they are recognized at fair value. The group holds the
trade receivables with the objective of collecting the contractual cash flows, and so it measures them
subsequently at amortized cost using the effective interest method.

The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets.

To measure the expected credit losses, trade receivables and contract assets have been grouped based on
shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress
and have substantially the same risk characteristics as the trade receivables for the same types of contracts.
The group has therefore concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets.

The expected loss rates are based on the payment profiles of sales over a period of 36 months before
December 31, 2020 and the corresponding historical credit losses experienced within this period. The historical
loss rates are adjusted to reflect current and forward looking information on macroeconomic factors affecting the
ability of the customers to settle the receivables.

Trade receivables and contract assets are written off where there is no reasonable expectation of recovery.

The maximum exposure at the end of the reporting period is the carrying amount of these receivables.

Bank and other loans

Bank and other loans are recorded at the fair value of the proceeds received net of directly attributable
transaction costs. Issue costs relating to revolving credit facilities are charged to the consolidated income
statement over the estimated life of the facility on a periodic basis and are added to the carrying value of the
facility. Issue costs relating to fixed term loans are charged to the consolidated income statement using the
effective interest method and are added to the carrying value of the fixed term loan.

Trade payables

Trade payables are not interest bearing and are stated at their nominal value.

Derivative financial instruments

The Group uses derivative financial instruments such as foreign currency contracts to hedge its risks associated
with foreign currency fluctuations. Such derivative financial instruments are stated at fair value.

Hedges are classified as cash flow hedges when they hedge exposure to variability in cash flows either
attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast
transaction.

In relation to cash flow hedges to hedge the foreign currency risk of firm commitments which meet the conditions
for special hedge accounting, the portion of the gain or loss on the hedging instrument that is determined to be
an effective hedge is recognized directly in equity and the ineffective portion is recognized in the consolidated
income statement.

In relation to derivative financial instruments used to hedge a forecast transaction, the portion of the gain or loss
on the hedging instrument that is determined to be an effective hedge is recognized directly in equity and the
ineffective portion is recognized in the consolidated income statement. Amounts taken to equity are transferred
to the consolidated income statement when the hedged transaction affects profit or loss.

In 2020 none of the derivatives were denominated as a cash flow hedge at the year-end.

LUXFER HOLDINGS PLC

Financial liabilities and equity instruments

Financial liabilities and equity instruments issued by the Group are recorded at the proceeds received, net of
direct issue costs.

Financial liabilities and equity instruments are all instruments that are issued by the Group as a means of raising
finance, including shares, loan notes, debentures, debt instruments and options and warrants that give the
holder the right to subscribe for or obtain financial liabilities and equity instruments.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. All equity instruments are included in shareholders' funds. The finance costs incurred in
respect of an equity instrument are charged directly to the consolidated income statement. Other instruments are
classified as financial liabilities if they contain a contractual obligation to transfer economic benefits.

Critical accounting judgments and key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance
sheet date, that have a significant risk of causing a material adjustment to the carrying values of assets and
liabilities within the next financial year, are discussed below. The judgments used by management in the
application of the Group's accounting policies in respect of these key areas of estimation are considered to be
the most significant. The below policies include both elements of judgments and estimates.

Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting
date. Goodwill is tested for impairment annually and at other times when such indicators exist. Other non-
financial assets are tested for impairment when there are indicators that the carrying value may not be
recoverable. Further details are given in Note 14.

The directors perform their annual goodwill impairment test by comparing the recoverable amount of the cash
generating unit ("CGU"), to which goodwill has previously been allocated, to its carrying value. A goodwill
impairment charge will be recognized for the amount by which the CGU's carrying amount exceeds its
recoverable amount.

The recoverable amount is the higher of fair value less costs of disposal and value in use. The value in use of
each CGU is determined by the directors using a discounted cash flow analysis. Projecting discounted future
cash flows requires the directors to make significant estimates including: (i) future revenue growth rates including
the perpetual growth rate; (ii) anticipated operating margins; and (iii) the discount rates applied to the estimated
future cash flows. These assumptions are determined over a three year long-term planning period. The three
year growth rates for revenues and operating profits margins vary for each CGU being evaluated. Revenues and
operating profit margins beyond 2022 are projected to grow at a perpetual growth rate of 1.8%. A reasonable
change in these estimates would not result in an impairment.

Pensions

Determining the present value of future obligations of pensions requires an estimation of future mortality rates,
future salary increases, future pension increases, future inflation increases and discount rates. These
assumptions are determined in association with qualified actuaries. Due to the long-term nature of these plans,
such estimates are subject to significant uncertainty. The pension liabilities at December 31, 2020 are $50.8
million (2019: $35.2 million). Further details are given in Note 31.

LUXFER HOLDINGS PLC

Impact of COVID-19 on the Financial Statements

Luxfer’s top priority during this global pandemic is the health and well-being of our employees, customers,
shareholders, and the communities in which we operate. The Group continues to monitor the COVID-19 situation
closely, while simultaneously executing business continuity plans. These business continuity plans include, but
are not limited to, (i) retooling operations to maintain social distance and maximize employee safety; (ii)
increasing resources and efforts to satisfy demand from the most impactful parts of our business; (iii) expanding
flexible work arrangements and policies, where practical, to maximize employee safety; (iv) increased monitoring
of short-term cash flow, including measures to reduce costs and generate cash; and (v) providing regular
updates to our shareholders, employees, customers, and suppliers in a transparent and timely manner.

At this time, Luxfer continues to operate all of its facilities, following temporary closures at a small number of
locations earlier in 2020. However, due to weaker demand resulting from uncertain economic conditions,
potential supply constraints, and the continued impact of COVID-19, Luxfer has implemented additional cost
saving programs, including headcount reductions.

Luxfer’s results continue to reflect the global macro environment resulting from the COVID-19 pandemic,
including broad-based market weakness, which has been especially evident in our general industrial and
transportation end-markets in 2020 with full year decline of 18.0% and 14.7% respectively. However, while
general industrial has continued to decline in the fourth quarter by 12.5% relative to prior year, transportation has
experienced a recovery with growth of 20.1%, largely on the back of the return to growth of sales of alternative
fuel products. Despite the adverse macro trends, the Group has a strong balance sheet and access to an
existing $150 million credit facility, of which only $4.1 million was drawn down at the end of the year following
continued strong cash generation which allowed the early repayment in the fourth quarter of $25 million of Loan
Notes due 2021. Furthermore, as our net debt to EBITDA ratio has fallen to 1.0x at the end of 2020 (from 1.2x at
the end of 2019), we have identified no issues in relation to financial covenants nor availability of funding for
continued operations.

Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year.

New standards and amendments to standards not applied

The IASB has issued the following significant amendments to standards with a mandatory effective date on or
after January 1, 2020:

International Financial Reporting Standards
IAS 1

Presentation of financial statements (amendments)

Mandatory effective date
No earlier than January 1, 2022

IAS 16

IFRS 3

IAS 37

Property, Plant and Equipment (amendments)

No earlier than January 1, 2022

Business combination (amendments)

No earlier than January 1, 2022

Onerous Contracts (amendments)

No earlier than January 1, 2022

The directors do not expect that the adoption of the standards listed above will have a material impact on the
consolidated financial statements of the Group in future periods.

2. Revenue

Disaggregated revenue disclosures for the fiscal years ended December 31, 2020 and December 31, 2019 are
presented below.

2020
$M

Gas

Cylinders Elektron

Net sales by end-market

2019
$M

Total
87.7 111.9
42.3
92.1
52.9 120.8
182.9 324.8

Gas

Cylinders Elektron

Total
24.7 111.7 136.4
59.5 108.0
48.5
48.7 129.0
80.3
153.5 219.9 373.4

General industrial
Transportation
Defense, First Response & Healthcare

24.2
49.8
67.9
141.9

United States

U.K.

Germany

Italy

France

Top five countries

Rest of Europe

Asia Pacific
Other (1)

LUXFER HOLDINGS PLC

Net sales by geographic destination

2020

2019

Percent

173.0

53.3 %

201.4

53.9 %

18.7

15.7

10.5

20.2

5.8 %

4.8 %

3.2 %

6.2 %

23.9

21.8

13.3

15.9

238.1

73.3 %

276.3

25.4

45.2

16.1

324.8

7.8 %

13.9 %

5.0 %

37.7

42.8

16.6

373.4

6.4 %

5.8 %

3.6 %

4.3 %

74.0 %

10.1 %

11.5 %

4.4 %

(1) Other includes Canada, South America, Latin America and Africa.

The Company’s performance obligations are satisfied at a point in time. With the reclassification of our
Superform business as discontinued operations, none of the Company's revenue is satisfied over time. As a
result, the Company's contract receivables, contract assets and contract liabilities at December 31, 2020 are
disclosed within current assets and liabilities held-for-sale.

The following table provides information about contract receivables, contract assets and contract liabilities with
customers as at December 31, 2019 .

In millions

Contract receivables

Contract assets

Contract liabilities

December 31, 2019

1.7

1.3

(0.5)

Contract assets in 2019 consisted of $1.3 million accrued unbilled amounts relating to tooling revenue and were
recognized in prepayments and accrued income in the consolidated balance sheet. Of the $2.1 million contract
assets recognized as of December 31, 2018, $2.0 million were billed to customers and transferred to receivables
as of December 31, 2019.

Contract liabilities in 2019 of $0.5 million consisted of advance payments and billing above costs incurred and
were recognized as accruals and deferred income. Significant changes in contract liabilities balances during
2019 were as follows:

In millions

As at January 1,

(Payments received) / amounts billed

(Costs incurred) / revenue recognized

As at December 31,

2019

(1.1)

(0.9)

1.5

(0.5)

LUXFER HOLDINGS PLC

Segmental Information

3.
We classify our operations into two core business segments, Gas Cylinders and Elektron, based primarily on
shared economic characteristics for the nature of the products and services; the nature of the production
processes; the type or class of customer for their products and services; the methods used to distribute their
products or provide their services; and the nature of the regulatory environment. The Group has four identified
business units, which aggregate into the two reportable segments. Luxfer Gas Cylinders forms the Gas
Cylinders segment, and Luxfer MEL Technologies, Luxfer Magtech and Luxfer Graphic Arts aggregate into the
Elektron segment. The Superform business unit used to aggregate into the Gas Cylinders segment, but is now
recognized within discontinued operations. Prior to its sale at the end of the second quarter of 2019, there was a
further business unit, Luxfer Czech Republic which was part of the Elektron Segment. A summary of the
operations of the segments is provided below:

Gas Cylinders segment
Our Gas Cylinders segment manufactures and markets specialized products using carbon composites and
aluminum, including pressurized cylinders for use in various applications including self-contained breathing
apparatus (SCBA) for firefighters, containment of oxygen and other medical gases for healthcare, alternative fuel
vehicles, and general industrial.

Elektron segment
Our Elektron segment focuses on specialty materials based primarily on magnesium and zirconium, with key
product lines including advanced lightweight magnesium alloys with a variety of uses across a variety of
industries; magnesium powders for use in countermeasure flares, as well as heater meals; photoengraving
plates for graphic arts; and high-performance zirconium-based materials and oxides used as catalysts and in the
manufacture of advanced ceramics, fiber-optic fuel cells, and many other performance products.

Other
Other primarily represents unallocated corporate expense and includes non-service related defined benefit
pension cost / credit.

Management monitors the operating results of its reportable segments separately for the purpose of making
decisions about resource allocation and performance assessment. Segment performance is evaluated by the
chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments and has been identified as the CEO, using adjusted EBITA(1) and adjusted EBITDA, which is
defined as segment income and is based on operating income adjusted for share based compensation charges;
loss on disposal of property, plant and equipment, restructuring charges; impairment charges; acquisition and
disposal related gains and costs; other charges; depreciation and amortization; and unwind of discount on
deferred consideration.

Unallocated assets and liabilities include those which are held on behalf of the Group and cannot be allocated to
a segment, such as taxation, investments, cash, retirement benefits obligations, bank and other loans and
holding company assets and liabilities.

Financial information by reportable segment for the years ended December 31, is included in the following
summary:

In millions

Gas Cylinders segment

Elektron segment

Consolidated

In millions

Gas Cylinders segment

Elektron segment

Unallocated

Consolidated

Net Sales

Adjusted EBITDA(2)

2020

2019

2020

2019

141.9 $

153.5 $

21.3 $

182.9

219.9

32.6

324.8 $

373.4 $

53.9 $

22.3

44.8

67.1

Depreciation and
amortization

2020

2019

Restructuring and
other expense
2019
2020

3.9 $

9.7

—

3.9

9.7

—

5.9 $

21.8

1.3

0.1

7.8

—

13.6 $

13.6

7.3 $

29.6

In millions

Gas Cylinders segment

Elektron segment

Unallocated

Discontinued operations

Consolidated

In millions

Gas Cylinders segment

Elektron segment

Unallocated

Discontinued operations

Consolidated

In millions

United States

United Kingdom

Rest of Europe

Canada

Asia Pacific

LUXFER HOLDINGS PLC

Capital expenditure

2020

2019

2.0 $

5.1

—

0.3 $

7.4 $

3.1

10.9

—

0.8

14.8

Total assets

2020

2019

Total liabilities
2019
2020

90.8 $

104.5 $

36.4 $

186.7

26.6

33.8

197.9

34.2

44.0

28.6

106.6

11.0

36.3

34.0

129.6

18.8

337.9 $

380.6 $

182.6 $

218.7

Non-current assets

2020

2019

107.7

122.8

68.5

1.1

9.4

0.1

68.5

1.0

11.5

0.6

186.8

204.4

(1) Adjusted EBITA is adjusted EBITDA less depreciation and loss on disposal of property, plant and equipment.

(2) 2020 and 2019 adjusted EBITDA is calculated on a US GAAP basis, our primary GAAP. A reconciliation can be found in our FORM 10-K
filed with the SEC on March 2, 2021.

4. Operating profit

Operating profit for continuing activities is stated after charging:

Research and development expenditure charged to the consolidated income statement

Depreciation of property, plant and equipment (Note 12)

Right-of-use asset depreciation

Amortization of intangible assets (Note 13)

Loss on disposal of property, plant and equipment

Restructuring and other expense (Note 6)

Staff costs (Note 7)

Cost of inventories recognized as expense

2020

2019

3.3

13.4

3.3

1.3

0.1

7.3

89.1

239.3

5.7

13.1

3.7

2.2

0.2

29.6

114.4

226.9

LUXFER HOLDINGS PLC

5. Fees payable to auditors

The total remuneration of the Group's auditors, PricewaterhouseCoopers LLP and other member firms of
PricewaterhouseCoopers International Limited, for services provided to the Group during the years ended
December 31, 2020 and December 31, 2019 is analyzed below.

Fees payable to auditors for the audit of the consolidated financial statements and its
subsidiaries

1.7

1.8

Fees paid for non-audit services were less than $0.1 million in both 2020 and 2019.

The audit fee for the company financial statements of Luxfer Holdings PLC was $0.1 million (2019: $0.1 million).

2020

2019

6. Other (expense) / income items

(a) Changes to defined benefit pension plans

Credited / (charged) to operating profit:

Changes to defined benefit pension plans

(b) Restructuring and other expense

Charged to operating profit:

Rationalization of operations

Asset impairments

Environmental remediation costs

(Charged)/credited to non-operating profit:

Merger and acquisition costs

Gain on disposal of business

Gain on previously written down inventory

Remeasurement of deferred contingent consideration

Changes to defined benefit pension plans

2020

2019

—

2.7

(6.9)

(22.4)

—

(0.4)

(7.3)

(4.7)

(2.5)

(29.6)

(0.4)

(4.4)

—

0.3

0.1

—

2.9

—

0.1

(1.4)

During 2020, there was no change in the defined benefit pension plans that has been recognized outside of
interest.

During 2019, a $2.7 million credit has been recognized in relation to special events occurring in the US and
France. There was a $1.8 million curtailment gain on the French plan as a result of the redundancy exercise
which took place in June 2019. There was also a $0.9 million gain on the US plan as a result of offering deferred
members the opportunity to receive a lump sum in respect of their benefits in the Plan. Lump sums of $2.7
million were paid out and $3.6 million of defined benefit obligation was extinguished.

LUXFER HOLDINGS PLC

Rationalization of operations

In 2020, there was a further $5.4 million of costs in relation to the closure of Luxfer Gas Cylinders' French site. It
is expected that there will be further costs incurred in 2021. In response to uncertain global economic conditions,
we undertook actions to reduce the Group's cost structure and improve operating efficiency. These actions
included a workforce reduction program resulting in $1.5 million of severance-related charges, of which
$0.4 million and $1.0 million was incurred in the Gas Cylinders and Elektron segment respectively, and
$0.1 million Other.

In 2019, $21.5 million of costs were incurred in relation to rationalization cost in the Gas Cylinders Segment and
$0.9 million in the Elektron Segment. $21.4 million of the charge in the Gas Cylinders Segment was in relation to
the the closure of the Company's French site. There is an expectation that further costs will be incurred in, but
not beyond 2020. $0.6 million of the charge in the Elektron Segment relates to one-time employee benefits
following the decision to scale down production at one of our Luxfer Magtech sites in 2019 and further closure
costs in relation to the previously announced rationalization of Elektron's Graphic Arts operations. There were
other simplification costs of $0.4 million across both segments.

Asset impairments

In 2019, an impairment charge of $2.1 million has been recognized in respect of the Gas Cylinders Segment and
$4.4 million within the Elektron Segment. Within the Gas Cylinders Segment, the charge predominantly relates to
our Superform business following a downturn affecting European luxury automotive sales. Within the Elektron
Segment, the $4.4 million relates to the write down of land and buildings following the decision to scale down
production at one of our Luxfer Magtech sites.

Environmental remediation costs

In 2019, the Company decided to commence a project to remove low-level naturally occurring radioactive
material (NORM) from a redundant building at Elektron's Manchester, UK site. The work represents remediation
of a legacy environmental issue and is expected to complete in the first quarter of 2021. In 2020 and 2019, the
Company recognized $0.4 million and $2.5 million respectively, in other charges on the consolidated income
statement related to this remediation.

Net loss on acquisitions and disposals

Acquisition-related costs which were net $nil in 2020 and related to $0.4 million costs incurred in relation to
merger and acquisition ("M&A") exploration activities offset by deferred consideration adjustments and profit on
previously written-down inventory. In July 2020 we sold our 51% investment in Luxfer Uttam India Private Limited
to the joint venture ("JV") partner. Allowing for legal costs, we generated a profit on disposal of less than $0.1
million.

In 2019, acquisition and disposal related costs of $1.4 million were incurred. This amount included a $3.5 million
charge in relation to the reimbursement of costs and $0.9 million of professional and legal fees incurred in
connection with the terminated Neo acquisition, partially offset by a $2.9 million gain from the sale of Magnesium
Elektron CZ s.r.o in the second quarter of 2019 and a $0.1 million credit on the remeasurement of the deferred
contingent consideration.

Staff Costs

Staff costs from continuing operations were as follows:

Wages and salaries

Social security costs

Retirement benefits costs

IAS 19R retirement benefits finance charge

Redundancy costs: Continuing activities

Share based compensation charges (Note 33)

LUXFER HOLDINGS PLC

2020

2019

75.6

5.1

3.2

1.0

1.4

2.8

89.1

83.3

6.5

4.0

1.4

14.7

4.5

114.4

The average monthly number of employees from continuing operations during the year was made up as follows:

Production and distribution

Sales and administration

Research and development

The compensation of the members of our Board of Directors (each, a "director") was:

Remuneration (short-term benefits)

Social security costs

Post-retirement benefits

Total short-term and post-retirement benefits

2020

No.

2019

No.

1,070

1,131

168

176

1,267

1,352

2020

2019

1.5

0.1

0.2

1.8

1.6

0.1

0.2

1.9

In 2020, compensation of key management personnel for the period they served on the Executive Leadership
Team, (including directors) was $4.8 million (2019: $6.0 million) in total which includes; $3.2 million (2019: $4.4
million) for short-term employee benefits, $1.2 million (2019: $1.0 million) for long-term incentive plans and $0.3
million (2019: $0.4 million) for post-employment benefits. Social security costs were incurred of $0.1 million
(2019: $0.2 million).

Details of the share awards granted are included in the Remuneration Report in Outstanding Share Awards
During 2020, are on pages 46 to 47 of the Remuneration Report.

Further details of directors' remuneration are included in the Remuneration Report on pages 39 to 56.

During 2020 and 2019, one director was a member of the Group's U.S. registered defined contribution plan.

Directors' interests and related party transactions

No directors had a material interest in, nor were they a party to, any contract or arrangement to which the parent
company, Luxfer Holdings PLC (the "Company") or any of its subsidiaries is or was party to either during the year
or at the end of the year, with the following exceptions: in the case of the executive director his individual service
contract and the Luxfer Holdings PLC Long-Term Umbrella Incentive Plan; in the case of the non-executive
directors their engagement letters or the contract for services under which their services as a director of the
Company are provided; in the case of the executive director and the chairman, the Luxfer Holdings PLC Non-
Executive Directors Equity Incentive Plan. Information regarding the share options exercised during the year is
included within the Remuneration Report. See Note 34 for related party transactions.

8. Finance income

Finance income from continuing operations was as follows:

Bank interest received

9. Finance costs

Finance costs from continuing operations was as follows:

Bank and other loan interest payable

Amortization of issue costs

Lease interest payable

IAS 19R retirement benefits finance charge

Unwind of discount on deferred contingent consideration from acquisitions

Total finance costs

10. Income tax expense

(a) Analysis of taxation charge for the year

Current income taxes:

U.K. corporation tax

Adjustments in respect of previous years

Non-U.K. tax

Adjustments in respect of previous years

Total current tax charge

Deferred income taxes:

Origination and reversal of temporary differences

Adjustments in respect of previous years

Total deferred income taxes charge

Tax charge on profit on operations

The income taxes charges relate to continuing activities.

LUXFER HOLDINGS PLC

2020

2019

—

0.1

2020

2019

5.1

0.5

0.4

1.0

—

7.0

4.7

0.5

0.4

1.4

0.2

7.2

2020

2019

0.1

(0.3)

(0.2)

2.1

0.3

2.2

4.7

(0.7)

4.0

6.2

0.6

0.1

0.7

3.9

(0.4)

4.2

4.3

(0.3)

4.0

8.2

LUXFER HOLDINGS PLC

(b) Factors affecting the taxation charge for the year

The tax assessed for the year differs from the standard rate of 19% (2019: 19%) for corporation tax in the U.K.

The differences are explained below:

Profit on operations before taxation

Profit on operations at 2020 standard rate of corporation tax in the U.K. of 19% (2019:
19%)

Effects of:

Non-deductible expenses

Unprovided deferred income taxes

Foreign tax rate differences

Adjustments in respect of previous years

Tax expense

2020

2019

24.0

14.2

4.6

1.5

0.8

—

(0.7)

6.2

2.7

3.3

1.6

1.1

(0.5)

8.2

The 2020 deferred tax charge includes a non-cash accounting adjustment in respect of previous years of $0.8
million, which predominantly results from a re-evaluation of the availability of historic tax losses to offset future
taxable profits.

The 2019 deferred tax charge includes a non-cash accounting adjustment in respect of previous years of $0.3
million, which predominantly results from a re-evaluation of the availability of historic tax losses to offset future
taxable profits, partially offset by the re-evaluation of the deductibility of share-based compensation expense.

At December 31, 2020, the Group had carried forward tax losses of $104.2 million (U.K.: $30.0 million, non-U.K.:
$74.2 million). Carried forward tax losses for 2019 were $94.9 million (U.K.: $32.8 million, non-U.K.: $62.1
million). To the extent that these losses are not already recognized as deferred income taxes assets, and
available to offset against future taxable profits, it is expected that the future effective tax rate would be below the
standard rate in the country where the profits are offset. The Group has unrecognized deferred tax assets
relating to certain trading and capital losses and other temporary timing difference of $19.3 million (2019: $14.9
million), potentially available for offset against future profits.

Changes to the U.K. corporation tax rates were announced as part of the U.K. government's Finance Bill of
March 2021, which will increase the rate from 19% to 25% from April 2023. We expect that U.K. deferred taxes
will be remeasured based on the anticipated timing of reversal of associated timing differences once the
announced rate change has been substantively enacted, expected to be later in 2021. However, it is likely that
the overall effect of the change, had it been substantively enacted by the balance sheet date would be to
increase the deferred tax asset by approximately $3.5 million.

LUXFER HOLDINGS PLC

11. Discontinued Operations

Our Superform aluminum superplastic forming business operating from sites in the U.S. and the U.K, and our
U.S. aluminum gas cylinder business were historically included in the Gas Cylinders segment. As a result of our
decision to exit non-strategic aluminum product lines, we have reflected the results of operations of these
businesses as discontinued operations in the Consolidated Statements of Income for all periods presented. The
U.S. aluminum gas cylinder business was sold in March 2021, see Note 35 and we expect the sale of the
Superform businesses to occur in 2021.

The assets and liabilities of the above businesses have been presented within Current assets held-for-sale and
Current liabilities held-for-sale in the consolidated balance sheet of 2020. The Group has determined that the
carrying value of the held-for-sale assets is recoverable and as a result no impairment losses have been
recognized.

Results of discontinued operations were as follows:

REVENUE
Cost of Sales
Gross profit
Distribution costs
Administrative expenses
Restructuring and other expense
OPERATING PROFIT
Net finance costs
LOSS ON DISCONTINUED OPERATIONS BEFORE TAX
Income tax credit
NET LOSS FROM DISCONTINUED OPERATIONS

The assets and liabilities classified as held-for-sale were as follows:

Reclassified to held-for-sale assets and liabilities

Property, plant and equipment

Intangible assets

Right-of-use assets

Inventories

Trade and other receivables

Held-for-sale assets

Reclassified to held-for-sale liabilities

Trade and other payables

Lease liability

Other liabilities

Held-for-sale liabilities

2020

2019

53.2
(50.4)
2.8
(1.1)
(2.3)
(0.1)
(0.7)
(0.2)
(0.9)
—
(0.9)

70.1
(64.3)
5.8
(1.6)
(4.7)
(1.9)
(2.4)
(0.3)
(2.7)
0.9
(1.8)

December 31,
2020

7.9

0.3

3.0

12.6

8.7

32.5

6.9

3.1

1.0

11.0

Also included within assets held-for-sale in 2020 is one building valued at $3.7 million, within our Elektron
Segment.

The discontinued cash flow statement is presented below:

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Net change in cash and cash equivalents

LUXFER HOLDINGS PLC

2020
$M

2019
$M

0.3 $
(0.3)
—
— $

0.8
(0.8)
—
—

The depreciation and amortization, capital expenditures and significant non-cash items were as follows:

Cash flows from discontinued operating activities:

Depreciation

Impairment charged

Cash flows from discontinued investing activities:

12. Property, plant and equipment

2020

2019

1.1

—

1.1

2.0

0.3

0.8

Freehold
$M

Long
leasehold
$M

Short
leasehold
$M

Plant and
equipment
$M

Total
$M

Cost:

At January 1, 2019
Additions
Disposals
Transfers
Exchange difference
At December 31, 2019
Additions
Disposals

Transfers - Held for sale
Transfers
Exchange difference
At December 31, 2020

43.4
0.1
(0.6)
2.7
2.2
47.8
0.2
—

(5.8)
2.0
0.8
45.0

Accumulated depreciation and impairment:
At January 1, 2019
Provided during the year
Impairment
Disposals
Transfers
Exchange difference
At December 31, 2019
Provided during the year
Disposals
Transfers - Held for sale
Exchange difference
At December 31, 2020
Net book values:
At December 31, 2020
At December 31, 2019
At January 1, 2019

24.9
1.4
1.5
(0.6)
2.2
1.8
31.2
1.5
—
(3.4)
0.5
29.8

15.2
16.6
18.5

7.4
—
—
1.1
0.3
8.8
0.2
—

—
0.1
0.3
9.4

4.4
0.4
—
—
0.4
0.2
5.4
0.5
—
—
0.2
6.1

3.3
3.4
3.0

14.1
0.1
(0.2)
(2.6)
0.1
11.5
0.1
—

(1.2)
0.3
0.1
10.8

6.7
0.8
0.3
(0.2)
(0.1)
—
7.5
0.6
—
(1.2)
0.1
7.0

3.8
4.0
7.4

279.6
14.6
(4.9)
(1.2)
6.0
294.1
6.8
(2.9)

(41.5)
(2.4)
6.8
260.9

206.9
10.5
4.3
(4.7)
(2.5)
5.4
219.9
10.8
(2.8)
(36.0)
5.8
197.7

63.2
74.2
72.7

344.5
14.8
(5.7)
—
8.6
362.2
7.3
(2.9)

(48.5)
—
8.0
326.1

242.9
13.1
6.1
(5.5)
—
7.4
264.0
13.4
(2.8)
(40.6)
6.6
240.6

85.5
98.2
101.6

As at December 31, 2020 and December 31, 2019, no assets were held under finance leases.

Assets relating to our Superform and U.S. aluminum cylinder businesses have been classified as held-for-sale in
2020.

LUXFER HOLDINGS PLC

Impairment of property, plant and equipment

$4.4 million of the impairment in 2019 relates to the Elektron Segment following the decision to scale down
production at one of our Luxfer Magtech sites. $1.6 million of the impairment relates to our Superform business
within the Gas Cylinders Segment following a downturn affecting European luxury automotive sales and $0.1
million in relation to other business units within the Segment. The impairment in relation to our Superform
business has been reclassified as discontinued operations in the consolidated income statement.

Long and short leasehold

The long and short leasehold costs relate to leasehold property improvements.

13. Intangible assets

Cost:

At January 1, 2019

Additions

Disposals

Exchange difference

At December 31, 2019

Transfer to held-for-sale

Exchange difference

At December 31, 2020

Accumulated amortization
and impairment:

At January 1, 2019

Provided during the year

Disposals

Impairment

Exchange difference

At December 31, 2019

Provided during the year

Transfer to held-for-sale

Exchange difference

At December 31, 2020

Net book values:

At December 31, 2020

At December 31, 2019

At January 1, 2019

Goodwill

Customer
related

Technology
and trading
related

Development
costs

Software

Total

76.8

—

1.6

78.4

—

1.5

79.9

19.9

—

0.6

20.5

—

0.5

21.0

58.9

57.9

56.9

13.4

—

13.4

—

13.4

3.8

0.9

—

4.7

0.4

—

5.1

8.3

8.7

9.6

8.2

—

0.3

8.5

—

0.3

8.8

3.2

0.4

—

0.1

3.7

0.4

—

0.1

4.2

4.6

4.8

5.0

7.1

—

2.8

108.3

0.1

(1.8)

(0.5)

(2.3)

0.1

5.4

0.1

2.1

2.5

108.2

(1.5)

(0.5)

(2.0)

0.1

4.0

5.2

0.6

0.1

2.0

2.1

108.2

1.9

0.3

34.0

2.2

(1.8)

(0.5)

(2.3)

0.4

0.2

4.6

0.2

—

0.1

1.8

0.3

0.4

1.0

35.3

1.3

(1.2)

(0.5)

(1.7)

0.2

3.8

0.2

0.8

1.9

0.1

1.7

0.4

0.7

0.9

35.8

72.4

72.9

74.3

Customer related intangibles include customer relationships, order backlogs and non-compete agreements.
Technology and trading related intangibles include technology, patents, trade names and trademarks.

Development costs include $0.2 million (2019: $0.8 million) relating to internally generated intangible assets, all
other intangible assets are externally generated.

Assets relating to our Superform and U.S. aluminum cylinder businesses have been classified as held-for-sale in
2020.

Impairment of intangible assets

The $0.4 million impairment of development costs in 2019 is in relation to the write down of Superform assets in
the Gas Cylinders Segment following a downturn affecting European luxury automotive sales. The impairment
has been reclassified as discontinued operations in the consolidated income statement.

LUXFER HOLDINGS PLC

14. Impairment of goodwill

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (CGUs)
that are expected to benefit from the business combination. The five identified CGUs (Luxfer Gas Cylinders,
Luxfer Superform, Luxfer MEL Technologies, Luxfer Magtech and Luxfer Graphic Arts) represent the lowest level
within the Group at which goodwill is monitored for internal management reporting purposes. The five CGUs are
aggregated to form the Group's two defined reportable segments: Gas Cylinders Segment and Elektron
Segment. Luxfer Superform forms part of the discontinued operations disclosure. The table below summarizes
the carrying value of goodwill by segment:

At January 1, 2019

Exchange difference

At December 31, 2019

Exchange difference

At December 31, 2020

Gas Cylinders
Segment

Elektron
Segment

Total

18.5

0.7

19.2

0.6

19.8

38.4

0.3

38.7

0.4

39.1

56.9

1.0

57.9

1.0

58.9

The Gas Cylinders Segment goodwill of $19.8 million (2019: $19.2 million) relates wholly to the goodwill
attributable to our Luxfer Gas Cylinders operations.The Elektron Segment goodwill of $39.1 million (2019: $38.7
million) included goodwill attributable to our Luxfer MEL Technologies operations of $5.4 million (2019: $5.2
million) and goodwill attributable to our Luxfer Magtech operations of $33.7 million (2019: $33.5 million); no
goodwill is allocated to Luxfer Graphic Arts. The goodwill figure was allocated based on which operating
segments historical acquisitions were allocated to and the value of the acquired goodwill on those historical
acquisitions.

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might
be impaired. The recoverable amount of each of the cash-generating units has been determined based on a
value-in-use calculation using a discounted cash flow method. The cash flows were derived from a 3-year
business plan prepared at a detailed level by each CGU. The results of these plans were then extrapolated to
give a terminal value based on a growth rate of 1.8% (2019: 2.3%). The 3-year business plans were driven by
detailed sales forecasts by product type and best estimate of future demand by end market, using current
margins. The cash flows included allowance for capital maintenance costs, along with working capital
requirements based on the projected level of sales. A pre-tax discount rate of between 8.0% and 9.0% was used
for the individual CGUs (2019: between 8.3% and 9.0% for all CGUs), which was considered a best estimate for
the risk-adjusted cost of capital for the CGUs. The long-term projections assumed product prices and costs were
at current levels, but the exchange rates used were USD:GBP of $1.34 and USD:EUR of $1.12.

The Directors and management have considered and assessed reasonably possible changes for other key
assumptions and have not identified any instances that could cause the carrying amount of the CGUs to exceed
its recoverable amount.

15. Investments

Shares in joint ventures

At January 1, 2019

Share of results

At December 31, 2019

Share of results

Disposal

At December 31, 2020

LUXFER HOLDINGS PLC

1.6

0.7

2.3

(0.1)

(1.7)

0.5

Investment in joint ventures and associates

At December 31, 2020, the Group had the following joint venture which affect the profit of the Group. The
Group's joint venture has share capital which consists solely of ordinary shares and are indirectly held, and the
country of incorporation or registration is also their principal place of operation.

Name of company

Nikkei-MEL Co.
Limited

Country of
incorporation

Holding

Proportion of
voting rights and
shares held

Classification

Nature of
business

Japan Ordinary shares

50.0 %

Joint venture Distribution

the above ownership percentage remains consistent with 2019.

In 2020, the Company sold its 51% investment in Luxfer Uttam India Private Limited to our joint venture partner
for INR 137.4 million ($1.8 million) cash. Allowing for legal costs, we generated a profit on disposal of less than
$0.1 million.

Sub161 Pty Limited, our Australian associate in which we held a 26% interest, was liquidated and deregistered
as a legal entity in 2020.

The main trading activity in 2019 was in Luxfer Uttam India Private Limited and Nikkei MEL Co. Limited.

The share of results of all joint ventures and associates was loss of $0.1 million (2019: profit of $0.7 million),
with no items recognized in other comprehensive income in 2020 or 2019.

The Group has looked in detail at the ownership agreements of its joint ventures and associates in order to
determine the level of control that it has. The Group has determined that it has joint control of its joint ventures
mainly based upon the number of members on each company board of directors and their associated voting
rights. In relation to the associate undertaking, the Group has significant influence but not joint control based on
the proportion of directors on the company board and associated voting rights. The Group therefore accounts for
all material joint ventures and associates on an equity basis.

Related party transactions with joint ventures and associates have been disclosed in Note 34 to the Group's
consolidated financial statements.

16. Inventories

Raw materials and consumables

Work in progress

Finished goods and goods for resale

LUXFER HOLDINGS PLC

December 31,
2020

December 31,
2019

26.2

19.7

22.9

68.8

33.4

32.2

28.9

94.5

Inventories above are disclosed net of any provisions for obsolete and excess inventories. The provision against
obsolete and excess inventories at December 31, 2020 was $7.3 million (2019: $10.5 million). The cost of
inventories recognized as an expense in continuing operations during the year was $239.3 million (2019: $226.9
million). The cost of inventories written-off during 2020 was $0.6 million (2019: $0.4 million).

17. Trade and other receivables

Current Assets

Trade receivables

Amounts owed by joint ventures and associates

Other receivables

Prepayments and accrued income

Derivative financial instruments

Deferred consideration

December 31,
2020

December 31,
2019

33.6

0.2

3.4

5.5

0.2

43.1

52.4

2.7

4.2

6.7

0.3

—

66.3

Trade receivables are non-interest bearing and are generally on 30-90 day terms. Trade receivables above are
disclosed net of any provisions for doubtful receivables of $0.5 million due to credit risk. The following table
provides information about the exposure to credit risk and expected credit losses for trade receivables (including
amounts owed by joint ventures and associates) as at December 31, 2020 based on aging profile:

Trade receivables and amounts owed by joint
ventures and associates

Default rate (1)

Gross
carrying
amount

Lifetime
expected
credit loss

Current (not past due)

1-30 days past due

31-60 days past due

61-90 days past due

91-120 days past due

> 120 days past due

— %

1.5 %

15.0 %

100.0 %

29.0

3.7

0.7

0.1

0.5

34.1

—

0.5

(1) Default rate is applied to uninsured trade receivables and amounts owed by joint ventures and associates.

At December 31, 2020, trade receivables with a nominal value of $0.5 million (2019: $1.3 million) were impaired
and fully provided for. Movements in the provision for impairment of trade receivables and amounts owed by joint
ventures and associates were as follows:

LUXFER HOLDINGS PLC

At January 1

Charge in the year

Recoveries for expected credit losses

Exchange difference

At December 31

18 Held-for-sale assets and liabilities

2020

2019

1.3

—

(0.7)

(0.1)

0.5

2.4

1.2

(2.0)

(0.3)

1.3

In 2020, the Group classified its Superform aluminum superplastic forming business operating from sites in the
U.S. and the U.K, and its U.S. aluminum gas cylinder business as assets and liabilities held-for-sale in
accordance with IFRS 5 - Discontinued Operations.

There was also one building valued at $3.7 million, within our Elektron Segment classified as held-for-sale
assets, previously included within current assets. The building was also classified as held-for-sale in 2019, as
the expectation was that the building would be sold within 12 months. There are conditions attached to the sale
which the Company expects to be met in 2021 and as such the building continues to be classified as held-for-
sale.

In 2019, there was also $0.2 million of inventory which has been reclassified as held-for-sale assets, in relation
to one of our operations within our Gas Cylinders Segment.

The respective assets and liabilities of the above disposal groups have been reclassified as held-for-sale within
other current assets and other current liabilities per the table below.

Reclassified to held-for-sale assets and liabilities

December 31,
2020

December 31,
2019

Property, plant and equipment

Intangible assets

Right-of-use assets

Inventories

Trade and other receivables

Held-for-sale assets

Reclassified to held-for-sale liabilities

Trade and other payables

Lease liability

Other liabilities

Held-for-sale liabilities

11.6

0.3

3.0

12.6

8.7

36.2

6.9

3.1

1.0

11.0

3.7

—

0.2

—

3.9

—

As a result of items reclassified to held-for-sale, there has been no reclassification of items from other
comprehensive income to the income statement.

19. Cash and cash equivalents

Cash at bank and in hand

LUXFER HOLDINGS PLC

December 31,
2020

December 31,
2019

1.5

10.3

Included within the cash at bank and in hand balance is nil (2019: $0.1 million) cash held in escrow, as restricted
cash.

20. Share capital
(a) Ordinary share capital

December 31,
2020

December 31,
2019

December 31,
2020

December 31,
2019

No.

Authorized:

Ordinary shares of £0.50 each

40,000,000

35.7 (1)

Deferred ordinary shares of

£0.0001 each

Allotted, called up and fully paid:

761,835,338,444

761,875,338,444

149.9 (1)

185.6 (1)

149.9 (1)

185.6 (1)

Ordinary shares of £0.50 each

29,000,000

26.6 (1)

Deferred ordinary shares of

£0.0001 each

761,835,338,444

761,864,338,444

149.9 (1)

176.5 (1)

149.9 (1)

176.5 (1)

(1)

The Group's ordinary and deferred share capital are shown in U.S. dollars at the exchange rate
prevailing at the month end spot rate at the time of the share capital being issued.

The rights of the shares are as follows:

Ordinary shares of £0.50 each

The ordinary shares carry no entitlement to an automatic dividend but rank pari passu in respect of any dividend
declared and paid. The ordinary shares were allotted and issued to satisfy share awards which vested under the
Group's share award and share incentive plans.

At December 31, 2020, there were 27,636,153 (2019: 27,431,283) ordinary shares of Luxfer Holdings PLC listed
on the New York Stock Exchange (NYSE).

Deferred ordinary shares of £0.0001 each

The deferred shares have no entitlement to dividends or to vote. On a winding up (but not otherwise) the holders
of the deferred shares shall be entitled to the repayment of the paid up nominal amount of the deferred shares,
but only after any payment to the holders of ordinary shares of an amount equal to 100 times the amount paid up
on such ordinary shares.

(b) Share premium account

At January 1, 2019

Shares sold from ESOP

Utilization of shares

At December 31, 2019
Shares sold from ESOP
Utilization of shares

At December 31, 2020

LUXFER HOLDINGS PLC

65.7

3.3

5.5

74.5
0.8
1.8

77.1

The share premium account is used to record the excess of proceeds over nominal value on the issue of shares.
Share issue costs directly related to the issue of shares are deducted from share premium.

At January 1, 2019

Utilization of treasury shares

At December 31, 2019

At December 31, 2020

(4.3)

0.3

(4.0)

In June 2015, the Board announced a share buy-back program of up to $10 million, to cover the needs of
employee share plans. Shareholder approval for this program was granted at the 2014 Annual General Meeting
(for repurchases up to an aggregate amount of 2,700,000 ordinary shares or ADSs).

During 2020 and 2019 no ordinary shares were repurchased under the share buy-back program. At
December 31, 2020, there were 350,335 (2019: 352,499) treasury shares held at a cost of $4.0 million (2019:
$4.0 million).

(d) Own shares held by ESOP

At January 1, 2019

Shares sold from ESOP

Utilization of ESOP shares

At December 31, 2019

Shares sold from ESOP

At December 31, 2020

(2.2)

0.2

0.3

(1.7)

0.3

(1.4)

At December 31, 2020, there were 1,013,512 ordinary shares of £0.50 each (2019: 1,216,220 ordinary shares of
£0.50 each) held by The Luxfer Group Employee Share Ownership Plan (the "ESOP").

LUXFER HOLDINGS PLC

21. Dividends paid and proposed

Dividends declared and paid during the year:

Interim dividend paid February 6, 2019 ($0.125 per ordinary share)

Interim dividend paid May 1, 2019 ($0.125 per ordinary share)

Interim dividend paid August 7, 2019 ($0.125 per ordinary share)

Interim dividend paid November 6, 2019 ($0.125 per ordinary share)

Interim dividend paid February 5, 2020 ( $0.125 per ordinary share)

Interim dividend paid May 6, 2020 ($0.125 per ordinary share)

Interim dividend paid August 5, 2020 ($0.125 per ordinary share)

Interim dividend paid November 4, 2020 ($0.125 per ordinary share)

Dividends declared and paid after December 31 (not recognized as a liability at
December 31):

Interim dividend paid February 5, 2020: ($0.125 per ordinary share)

Interim dividend paid May 6, 2020: ($0.125 per ordinary share)

Interim dividend paid February 4, 2020: ($0.125 per ordinary share)

Interim dividend to be paid May 5, 2021: ($0.125 per ordinary share)

2020

2019

—

3.4

—

13.6

2020

2019

—

3.4

6.8

3.4

—

6.8

22. Bank and other loans

Loan Notes due 2021—gross

Unamortized finance costs

Loan Notes due 2021—net

Loan Notes due 2023—gross

Unamortized finance costs

Loan Notes due 2023—net

Loan Notes due 2026—gross

Unamortized finance costs

Loan Notes due 2026—net

Revolving credit facility—gross

Unamortized finance costs

Revolving credit facility—net

Included in current liabilities

Included in non-current liabilities

December 31,
2020

December 31,
2019

—

25.0

—

25.0

(0.3)

24.7

4.1

(0.7)

3.4

53.1

—

53.1

25.0

—

25.0

(0.1)

24.9

25.0

(0.3)

24.7

17.5

(1.1)

16.4

91.0

—

91.0

The Loan Notes due 2021 were due to mature on September 15, 2021, however we voluntarily chose to repay
the notes early, on December 31, 2020, largely using surplus cash generated from operations, plus a small
drawing on the Senior Facilities Agreement. In addition to the repayment of the $25 million principal, we incurred
an early repayment charge of $0.5 million.

LUXFER HOLDINGS PLC

On July 31, 2017, an extension to the Senior Facilities Agreement was agreed which provides $150 million in
committed debt facilities, in the form of a multi-currency revolving credit facility, with an additional $50 million of
uncommitted facilities through an accordion facility. The Senior Facilities Agreement was due to mature in April
2019, but has now been extended until the end of July 2022. Finance costs of $1.2 million were capitalized
following this extension and were deemed to be a modification of the existing facility. The Senior Facility
Agreement bears interest equal to a margin based upon the Group's leverage plus either EURIBOR or LIBOR,
depending on the currency drawn down. Note that GBP sterling drawings will be subject to interest rates based
on SONIA (Sterling Overnight Index Average) once LIBOR is phased out by the end of 2021. We do not expect
this change to have a material effect on our interest expense.

The weighted-average interest rate on the revolving credit facility was 2.19% and 2.47% in 2020 and 2019
respectively.

The maturity profile of the Group's undiscounted contractual payments is disclosed in Note 29.

23. Provisions

At January 1, 2019

Charged to consolidated income statement

Cash payments

At December 31, 2019

Charged to consolidated income statement

Cash payments

Translation

At December 31, 2020

Included in current liabilities

Included in non-current liabilities

At December 31, 2019

Included in current liabilities

Included in non-current liabilities

Rationalization
and
redundancy

Employee
benefits

Environmental
provisions

Total

9.3

18.5

(19.6)

8.2

6.9

(4.9)

0.7

10.9

—

10.9

8.2

—

8.2

0.8

0.1

—

0.9

0.1

—

1.0

—

1.0

—

0.9

0.5

10.6

2.5

21.1

(0.8) (20.4)

2.2

11.3

0.4

7.4

(1.5)

(6.4)

—

0.7

1.1

13.0

1.1

12.0

—

1.0

1.1

13.0

2.2

10.4

—

0.9

2.2

11.3

Rationalization and redundancy
At December 31, 2020, the Group had $10.9 million of provisions relating to redundancy and the rationalization
of its operations (2019: $8.2 million). $0.3 million (2019: $0.4 million) and $10.6 million (2019: $7.8 million) of this
provision related to the Elektron and Gas Cylinders segments respectively.

Employee benefits
At December 31, 2020, the Group had $1.0 million of employee benefit liabilities (in addition to retirement
benefits), as calculated on an actuarial basis, relating to a provision for workers' compensation in the U.S. (2019:
$0.9 million).

Environmental provisions
At December 31, 2020, the Group had environmental provisions totaling $1.1 million relating to environmental
clean-up costs (2019: $2.2 million). $1.0 million relates to a provision to remove low-level naturally occurring
radioactive material (NORM) from a redundant building at Elektron's Manchester, UK site. The remaining $0.1
million relates to a provision for disbursement of environmental liabilities as part of the acquisition of the trade
and assets of the Specialty Metals business of ESM Group Inc.

100

LUXFER HOLDINGS PLC

24. Deferred income taxes

Accelerated
tax
depreciation

Other
temporary
differences

Tax
losses

Retirement
benefit
obligations

Total

At January 1, 2019

(Charged) / credited to consolidated
income statement
(Charged) / credited to other
comprehensive income

Credited to discontinued operations

Exchange difference

At December 31, 2019

(Charged) / credited to consolidated
income statement

Credited to other comprehensive income

Transfer to assets held for sale

Exchange difference

At December 31, 2020

(2.8)

(1.1)

—

0.8

—

(3.1)

0.7

—

0.6

—

(1.8)

3.8

0.1

(0.1)

—

0.1

3.9

9.5

7.0

17.5

(1.0)

(2.0)

(4.0)

—

0.4

8.9

0.6

—

0.2

0.5

0.8

0.7

5.8

15.5

(2.2)

(2.6)

0.1

(4.0)

—

0.1

1.8

—

0.2

6.5

3.7

—

0.3

3.7

0.6

9.9

16.4

The amount of deferred income taxes accounted for in the Group balance sheet, after the offset of balances
within countries for financial reporting purposes, comprised the following deferred income tax assets and
liabilities:

Deferred income tax liabilities

Deferred income tax assets

Net deferred income tax assets

December 31,
2020

December 31,
2019

(2.8)

19.2

16.4

(1.0)

16.5

15.5

101

25. Trade and other payables

Non-current Liabilities

Accruals and deferred income

Current Liabilities

Trade payables

Other taxation and social security

Accruals and deferred income

Interest payable

LUXFER HOLDINGS PLC

December 31,
2020

December 31,
2019

0.1

18.1

0.5

22.8

0.3

41.7

0.6

36.4

0.1

26.8

0.4

63.7

The directors consider that the carrying value of trade payables approximates to their fair value.

26. Acquisitions

Deferred contingent consideration

The deferred contingent consideration is in relation to the acquisition of Truetech and Innotech, (Luxfer Magtech)
is linked to the future profitability of the entity. Where appropriate, this was payable annually from 2015 to 2020.
The deferred consideration totaled nil at December 31, 2020 (2019: $0.5 million), following the final payment in
2020.

Net cash flows on purchase of business:

Included in net cash flows from investing activities:

Deferred consideration paid

Net cash flows on purchase of business

December 31, 2020 December 31, 2019

(0.4)

(0.5)

102

27. Leases

Right-of-use assets

Cost:

At January 1, 2019

Opening balance

Additions

At December 31, 2019

Additions

Disposals

Transfer to held-for-sale

Exchange difference

At December 31, 2020

Accumulated depreciation:

At January 1, 2019
Charge for the year

At December 31, 2019

Charge for the year

Disposals

Transfer to held-for-sale

Exchange difference

At December 31, 2020

Net book values:

At December 31, 2019

At December 31, 2020

Lease liability

LUXFER HOLDINGS PLC

Land and
buildings

Motor vehicles

Equipment

Total

—

16.4

—

16.4

—

(4.8)

0.3

11.9

—
3.0

3.0

2.9

—

(2.0)

0.2

4.1

13.4

7.8

—

0.2

—

0.2

—

(0.1)

—

0.1

—
0.1

0.1

—

0.1

—

1.5

0.1

1.6

0.8

(0.1)

(0.2)

0.1

2.2

—
0.6

0.6

0.4

(0.1)

—

0.8

1.0

1.4

—

18.1

0.1

18.2

0.8

(0.1)

(5.1)

0.4

14.2

—
3.7

3.7

3.3

(0.1)

(2.1)

0.2

5.0

14.5

9.2

December 31,
2020

December 31,
2019

2.1

4.1

3.5

9.7

3.3

6.0

5.7

15.0

The present value of lease liabilities is as follows:

Within 12 months

1 - 5 years

> 5 years

Total

The total cash outflow for leases in 2020 was $3.7 million and total expense was $4.2 million.

Supplemental balance sheet information

Weighted average remaining lease terms (years)
Weighted average discount rate

December 31,
2020

December 31,
2019

21.9
4.43 %

17.1
4.46 %

103

LUXFER HOLDINGS PLC

28. Commitments and contingencies

Capital commitments

At December 31, 2020, the Group had capital expenditure commitments of $1.1 million (2019: $1.0 million) for
the acquisition of new plant and equipment.

Committed banking facilities

At December 31, 2020 and 2019 the Group had committed banking facilities of $150.0 million. Of the committed
facilities, $4.1 million was drawn at December 31, 2020 (2019: $17.5 million).

The Group had a separate (uncommitted) facility for letters of credit which at December 31, 2020 and 2019 was
£1.0 million ($1.3 million). None of this were utilized at December 31, 2020 and 2019 respectively.

The Group also has two separate (uncommitted) bonding facilities for bank guarantees, one denominated in
GBP sterling of £4.5 million (2020: $6.1 million, 2019: $5.9 million), and one denominated in USD of $1.5 million
(2019: $0.4 million). Of that denominated in GBP, £1.0 million ($1.4 million) was utilized at December 31, 2020
(2019: £1.6 million / $2.3 million). Of that denominated in USD, $0.8 million was utilized in December 31, 2020
(2019: fully utilized).

Contingencies

During February 2014, a cylinder was sold to a long term customer and ruptured at one of their gas facilities. As
a result of this rupture, three people were noted to have minor injuries such as loss of hearing. There was no
major damage to assets of the customer. A claim has been launched by the three people who were injured in the
incident. We have reviewed our quality control checks from around the time which the cylinder was produced
and no instances of failures have been noted. It has also been noted by the investigator that the customer has
poor quality and safety checks. As a result we do not believe that we are liable for the incident, and therefore, do
not currently expect this case to have a material impact on the Group's financial position or results of operations.

In November 2018, an alleged explosion occurred at a third-party waste disposal and treatment site in Boise,
Idaho, reportedly causing property damage, personal injury, and one fatality. We had contracted with a service
company for removal and disposal of certain waste resulting from the magnesium powder manufacturing
operations at the Reade facility in Manchester, New Jersey. We believe this service company, in turn, apparently
contracted with the third-party disposal company, at whose facility the explosion occurred, for treatment and
disposal of the waste. In November 2020, we were named as a defendant in three lawsuits in relation to the
incident – one by the third-party disposal company, one by the estate of the decedent, and one by an injured
employee of the third-party disposal company. At present, we have received insufficient information on the cause
of the explosion. We do not believe that we are liable for the incident, have asserted such, and, therefore, do not
currently expect this matter to have a material impact on the Company’s financial position or results of
operations.

29. Financial risk management objectives and policies

The Group's financial instruments comprise bank and other loans, senior loan notes, derivatives and trade
payables. Other than derivatives, the main purpose of these financial instruments is to raise finance for the
Group's operations. The Group also has various financial assets such as trade receivables and cash and cash
equivalents, which arise directly from its operations.

A Treasury Committee, chaired by the Chief Financial Officer, oversees the implementation of the Group's
hedging policies, including the risk management of currency and aluminum risks and the use of derivative
financial instruments.

It is not the Group's policy or business activity to trade in derivatives. They are only used to hedge underlying
risks occurring as part of the Group's normal operating activities.

The main risks arising from the Group's financial instruments are cash flow interest rate risk, liquidity risk, foreign
currency translation and transaction risk, aluminum price risk and credit risk on trade receivables.

The Group regularly enters into forward currency contracts to manage currency risks and when considered
suitable will use other financial derivatives to manage commodity and interest rate risks.

104

LUXFER HOLDINGS PLC

Interest rate risk

The Group has exposure to variable interest rates when it draws down on the revolving credit facilities. As a
result of this exposure, the Group may decide to hedge interest payable based on a combination of forward rate
agreements, interest rate caps and swaps. It has also used fixed rate debt within its financing structure to
mitigate volatility in interest rate movements.

Liquidity risk

To understand and monitor cash flows, the Group uses a combination of a short-term rolling six week cash
forecast, based on expected daily liquidity requirements and longer term monthly rolling forecasts, covering
forecast periods of between 6 and 18 months forward. The Group also prepares, at least annually, a longer-term
strategic cash forecast. Together this system of control is used to ensure the Group can fund its ongoing
operations, including working capital, capital expenditure and interest payments and to ensure that bank
covenant targets will be met. Short and medium term changes in liquidity needs are funded from the Group's
revolving bank facility, as disclosed in Note 22, which provides the ability to draw down and repay funds on a
daily basis. In monitoring liquidity requirements and planning its working capital and capital expenditure
programs, the Group aims to maintain a sufficiently prudent level of headroom against its banking facilities and
forecast covenant position as protection against any unexpected or sudden market shocks.

The Group also uses forecasts to manage the compliance with any associated covenant tests in relation to the
Group's financing arrangements. The Group is subject to maintaining net debt to adjusted EBITDA levels of
below three times, adjusted EBITDA to net interest above four times, and a number of other debt service tests
which include adjusted EBITDA, taxation, capital expenditure and pension payments.

The Group has been in compliance with the covenants under the Loan Notes due 2021, 2023 and 2026 and the
banking facilities throughout all of the quarterly measurement dates.

The maturity of the Group's liabilities is also monitored to ensure sufficient funds remain available to meet
liabilities as they fall due. The table below summarizes the maturity profile of the Group's financial liabilities at
December 31, based on contractual payments.

December 31, 2020

December 31, 2019

Within
12
months

1-5
years

> 5
years

Total

Within
12
months

1-5
years

> 5
years

Total

—

2.1

—

18.1

22.8

0.3

0.5

—

25.0

—

4.1

—

0.1

—

25.0

—

3.5

—

25.0

4.1

9.7

—

18.1

22.9

0.3

0.5

—

3.3

0.5

36.4

26.8

0.4

0.1

25.0

—

17.5

6.0

—

0.6

—

25.0

—

5.7

—

25.0

17.5

15.0

0.5

36.4

27.4

0.4

0.1

43.8

33.3

28.5

105.6

67.5

74.1

30.7

172.3

Loan Notes due 2021

Loan Notes due 2023

Loan Notes due 2026

Revolving credit facility

Lease liability

Deferred contingent
consideration

Trade payables

Accruals and deferred income

Interest payable

Current income tax

105

The table below summarizes the maturity profile of the Group's financial liabilities at December 31 based on
contractual undiscounted payments. Interest rates on the Group's variable rate debt have been based on a
forward curve.

LUXFER HOLDINGS PLC

Undiscounted contractual maturity of financial liabilities:

Amounts payable:

Within 12 months

1-5 years

> 5 years

Less: future finance charges

Capital risk management

December 31,
2020

December 31,
2019

46.6

41.1

34.1

121.8

(16.2)

105.6

72.5

86.5

36.8

195.8

(23.5)

172.3

The capital structure of the Group consists of shareholders' equity, debt and cash and cash equivalents. For the
foreseeable future, the Board will maintain a capital structure that supports the Group's strategic objectives
through:

• Managing funding and liquidity;

• Optimizing shareholder return; and

• Maintaining a strong, investment-grade credit rating

The Group monitors its adjusted EBITDA, for continuing activities to net debt ratio, adjusted net income and
adjusted diluted earnings per share in its primary GAAP, that being US GAAP. These KPIs and reconciliations to
GAAP measures can be found in our Form 10-K, filed with the SEC on March 2, 2021.

Credit risk

The Group only provides trade credit to creditworthy third parties. Credit checks are performed on new and
existing customers along with monitoring payment histories of customers. Outstanding receivables from
customers are closely monitored to ensure they are paid when due, with both outstanding overdue days and
total days of sales outstanding reported as a business unit key performance measure. Where possible sales are
also protected through the use of credit insurance. At December 31, 2020, the Group has a provision for bad and
doubtful debtors of $0.5 million (2019: $1.3 million) and no charge (2019: $1.2 million) has been made to the
consolidated income statement in relation to bad debts recognized in 2020.

The analysis of trade receivables that were past due but not impaired is as follows:

Neither past
due nor
impaired
$M

< 31
days
$M

Total
$M

Past due but not impaired
61-90
31-60
days
days
$M
$M

91-120
days
$M

> 120
days
$M

At December 31, 2020

At December 31, 2019

33.6

52.4

29.0

39.3

3.7

9.2

0.7

2.5

0.1

0.3

0.1

0.9

—

0.2

The Group also monitors the spread of its customer base with the objective of trying to minimize exposure at a
Group and segment level to any one customer. The top 10 customers in 2020 represented 35% (2019: 27%) of
total revenue. There were no customers in 2020 or 2019 that represented over 10% of total revenue.

106

LUXFER HOLDINGS PLC

Exchange rate risks

The largest risk is from our operations in the U.K., which in 2020 generated sales revenue of $153.5 million.
Fluctuations in exchange rates, particularly between the U.S. dollar and GBP sterling (which has been subject to
significant fluctuations), can have a material effect on our consolidated income statement and consolidated
balance sheet. In 2020, movements in the average U.S. dollar exchange rate had a negative impact on revenue
of $0.3 million; in 2019, movements in the average U.S. dollar exchange rate had a positive impact on revenue
of $(9.5) million. Changes in translation exchange rates increased net assets by $2.9 million in 2020, compared
to an increase of $3.1 million in 2019.

Commodity price risks

The Group is exposed to a number of commodity price risks, including primary aluminum, magnesium, rare earth
chemicals, zircon sand and other zirconium basic compounds. All have been subject to substantial increases in
recent years. Historically the two largest exposures to the Group have been the prices of aluminum and
magnesium and the Group will spend annually approximately $80 to $100 million on these two raw materials.

Aluminum is traded on the London Metal Exchange ("LME") and therefore the Group is able to use LME
derivative contracts to hedge a portion of its price exposure. In 2020 the Group purchased approximately 7,000
(2019: 8,000) metric tons of primary aluminum. The processed waste can be sold as scrap aluminum at prices
linked to the LME price. Based on the 2020 level of aluminum purchases, a $100 increase in the LME price of
aluminum would increase our Gas Cylinders segment's costs by approximately $0.7 million.

In the long-term, the Group has sought to recover the cost of increased commodity costs through price increases
and surcharges. Any hedging of aluminum risk is performed to protect the Group against short-term fluctuations
in aluminum costs.

In 2020 the Group purchased approximately 3,000 (2019: 5,000) metric tons of primary magnesium. Magnesium
is not traded on the LME so we are not able to maintain a hedge position of its price exposure.

The Group purchases various rare earth chemicals which it uses in the production of various materials produced
by its Elektron Segment and when these chemicals became subject to significant price volatility it used
surcharges on its products to maintain its product margins.

30. Financial instruments

The following disclosures relating to financial instruments have been prepared on a basis which excludes short-
term debtors and creditors which have resulted from the Group's operating activities.

(a) Financial instruments of the Group

The financial instruments of the Group other than short-term debtors and creditors and non-current derivative
financial instruments were as follows:

Financial instruments -
measured at amortized cost

Financial assets:

Cash at bank and in hand
Financial liabilities(1):
Loan Notes due 2021(2)
Loan Notes due 2023(2)
Loan Notes due 2026(2)

Revolving credit facility

Deferred contingent consideration

Book value
December 31,
2020
$M

Fair value
December 31,
2020
$M

Book value
December 31,
2019
$M

Fair value
December 31,
2019
$M

1.5

—

25.0

4.1

—

1.5

—

25.3

26.0

4.1

—

10.3

25.0

17.5

0.5

10.3

25.0

25.9

26.2

17.5

0.5

(1)

(2)

The financial instruments included in financial liabilities are shown gross of unamortized finance costs.
The fair value of these financial instruments is calculated by discounting the future cash flows, including
interest payments due.

All financial assets mature within one year. The maturity of the financial liabilities is disclosed in Note 29.

107

LUXFER HOLDINGS PLC

At December 31, 2020, the amount drawn in bank and other loans was $54.1 million (2019: $92.5 million), of
which $50.0 million was denominated in U.S. dollars (2019: $75.0 million) with the remainder being denominated
in GBP sterling.

Derivative financial instruments -
measured at fair value through profit or
loss

Held to hedge purchases and sales by trading
businesses:

Book value
December
31, 2020

Fair value Book value
December
December
31, 2019
31, 2020

Fair value
December
31, 2019

Forward foreign currency exchange rate contracts

(0.2)

(0.3)

The fair value calculations were performed on the following basis:

Cash at bank and in hand / overdrafts

The carrying value approximates to the fair value as a result of the short-term maturity of the instruments.

Bank loans

At December 31, 2020, bank and other loans of $54.1 million (2019: $92.5 million) were outstanding. At
December 31, 2020, bank and other loans are shown net of issue costs of $1.0 million (2019: $1.5 million) and
these issue costs are to be amortized to the expected maturity of the facilities. At December 31, 2020, $4.1
million (2019: $17.5 million) of the total $54.1 million (2019: $92.5 million) bank and other loans was variable
interest rate debt and subject to floating interest rate risk, with the remainder being fixed rate debt.

Forward foreign currency exchange rate contracts

The fair value of these contracts was calculated by determining what the Group would be expected to receive or
pay on termination of each individual contract by comparison to present market prices.

Deferred contingent consideration

Disclosure of the basis of calculation of the fair value of deferred contingent consideration is included within
Note 26 of the consolidated financial statements.

108

LUXFER HOLDINGS PLC

Fair value hierarchy

At December 31, 2020, the Group used the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly.

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based
on observable market data.

December 31,
2020

Level 1

Level 2

Level 3

Net derivative financial (assets) / liabilities at
fair value through profit or loss:

Forward foreign currency exchange rate contracts

Interest bearing loans and borrowings:

Loan Notes due 2021

Loan Notes due 2023

Loan Notes due 2026

Revolving credit facility

0.2

—

25.0

4.1

—

0.2

—

25.0

4.1

—

During the year ended December 31, 2020, there were no transfers between Level 1 and Level 2 fair value
measurements.

The following table presents the changes in Level 3 instruments for the year ended December 31, 2020 and
2019.

Balance at January 1

Payments made during year

Unwind of discount on deferred consideration

Remeasurement of deferred consideration

Balance at December 31

Total (gains) / losses for the year included in profit and loss

2020

2019

0.5

(0.4)

—

(0.1)

—

(0.1)

0.9

(0.5)

0.2

(0.1)

0.5

0.1

The deferred contingent consideration relates to estimations of amounts payable in the future regarding
acquisitions made in prior years. This is based upon an estimate of the future profitability of the businesses
versus targets agreed upon as part of the acquisitions.

109

LUXFER HOLDINGS PLC

(b) Interest rate risks

Interest rate risk profile on financial assets

This table shows the Group's financial assets at December 31, which are cash and cash equivalents. These
assets are all subject to floating interest rate risk.

Cash by currency:

U.S. dollar

GBP sterling

Euro

Australian dollar

Chinese renminbi

Canadian dollar

Japanese yen

December 31,
2020

December 31,
2019

(1.6)

1.0

0.2

—

1.7

0.2

—

1.5

6.1

1.9

0.2

0.6

1.1

0.3

0.1

10.3

The Group earns interest on cash balances through either deposit accounts or placing funds on money markets
at short-term fixed rates. In all cases, with the exception of the restricted cash, interest earned is at
approximately ICELIBOR rates during the year.

Interest rate risk profile on financial liabilities

The following table sets out the carrying value, by original maturity, of the Group's financial instruments that were
exposed to both fixed and variable interest rate risk. The carrying values include interest payments to be made
and interest rates on the Group's variable rate debt have been based on a forward curve.

December 31, 2020

December 31, 2019

Within
12
months

1-5
years

> 5
years

Total

Within
12
months

1-5
years

> 5
years

Total

Floating interest rate
risk:

Revolving credit facility
(including interest
payments)

Fixed interest rate risk:

Loan Notes due 2021
(including interest
payments)

Loan Notes due 2023
(including interest
payments)

Loan Notes due 2026
(including interest
payments)

—

4.2

—

4.2

1.0

19.0

—

20.0

—

0.9

25.7

—

26.6

1.2

26.8

—

28.0

1.2

28.0

—

29.2

1.2

2.4

4.9

35.9

25.6

31.7

63.9

1.2

4.3

5.0

77.7

26.9

33.1

26.9

108.9

110

LUXFER HOLDINGS PLC

Forward foreign currency exchange contracts

The Group utilizes forward foreign currency exchange contracts to hedge significant future transactions and cash
flows to manage its exchange rate exposures. The contracts purchased are primarily denominated in GBP
sterling, U.S. dollars, Euros and Australian dollars. The Group is also exposed to a number of other currencies
like Japanese yen and Canadian dollars with hedges against these on a more ad hoc basis, when exposures are
more significant.

At December 31, 2020, the fair value of forward foreign currency exchange contracts deferred in equity was nil
(2019: nil). During 2020, nil (2019: loss of $0.1 million) has been transferred to the consolidated income
statement in respect of contracts that have matured in the year.

At December 31, 2020 and 2019, the Group held various forward foreign currency exchange contracts
designated as hedges in respect of forward sales for U.S. dollars, euros, Japanese yen and Canadian dollars for
the receipt of GBP sterling or euros. The Group also held forward foreign currency exchange contracts
designated as hedges in respect of forward purchases for U.S. dollars, euros, Canadian dollars, Australian
dollars and Chinese yuan by the sale of GBP sterling. The contract totals in GBP sterling and Euros, range of
maturity dates and range of exchange rates are disclosed overleaf, with the value denominated in GBP sterling
given that this is the currency the majority of the contracts are held in.

Sales hedges
Contract totals/£m
Maturity dates

Exchange rates

December 31, 2020

U.S. dollars

Euros

11.1
01/21 to 03/21 01/21 to 04/21

3.0

$1.3045 to
$1.3667

€1.0917 to
€1.1181

Japanese
Yen

Canadian
dollars

0.1
01/21

JPY136.89

$1.7409

Purchase hedges
Contract totals/£m
Maturity dates

U.S. dollars

Euros

1.7
01/21 to 04/21 01/21 to 02/21

4.8

Canadian
dollars

Australian
dollars

Chinese
yuan

9.4
01/21

0.9
01/21

0.9
03/21

Exchange rates

$1.3046 to
$1.3667

€1.1065 to
€1.0944

$1.7409 to
$1.7201

$1.7729

¥8.9184

Sales hedges

Contract totals/£m

Maturity dates

Exchange rates

Purchase hedges
Contract totals/£m
Maturity dates
Exchange rates

December 31, 2019

U.S. dollars

Euros

Japanese Yen

0.1

01/20

1.2914

7.6

01/20 to 03/20

0.1

01/20

€1.1551 to €1.1750

JPY 142.86

U.S. dollars

Euros

Canadian dollars

1.3

03/20
1.3228

0.8
03/20
1.1663

7.0
01/20
$1.7137 to $1.7664

Aluminum commodity contracts

The Group did not hold any forward aluminum commodity contracts at December 31, 2020 or 2019.

Forward interest rate agreements

The Group did not hold any forward interest rate agreements at December 31, 2020 or 2019.

111

LUXFER HOLDINGS PLC

(d) Foreign currency translation risk disclosures

Exchange gains and losses arising on the translation of the Group's non-U.S. assets and liabilities are classified
as equity and transferred to the Group's translation reserve. In 2020, a gain of $2.9 million (2019: loss of $0.6
million) was recognized in translation reserves.

(e) Undrawn committed facilities

At December 31, 2020 and 2019 the Group had committed banking facilities of $150.0 million. Of the committed
facilities, $4.1 million was drawn at December 31, 2020 (2019: $17.5 million).

31. Retirement benefits

The Group has defined benefit pension plans in the U.K., the U.S. and France. The levels of funding are
determined by periodic actuarial valuations. The assets of the plans are generally held in separate trustee-
administered funds. The Group also operates defined contribution plans in the U.K., the U.S., Australia and
Canada.

Remeasurements are recognized in full in the period in which they occur. The liability recognized in the balance
sheet represents the present value of the defined benefit obligation, as reduced by the fair value of plan assets.
The cost of providing benefits is determined using the Projected Unit Credit Method.

The principal defined benefit pension plan in the Group is the U.K. Luxfer Group Pension Plan ("the Plan"),
which closed to new members in 1998, new employees then being eligible for a defined contribution plan. With
effect from April 2004, the Plan changed from a final salary to a career average revalued earnings benefit scale.
In August 2005, a plan specific earnings cap of £60,000 per annum subject to inflation increases was introduced,
the figure had risen to £76,000 in 2015. In October 2007, the rate of the future accrual for pension was reduced
and a longevity adjustment was introduced to mitigate against the risk of further unexpected increases in life
expectancies. In 2015, following a consultation with the Trustees and members, it was agreed the Plan would
close to future accrual of benefits effective from April 5, 2016 and for the purpose of increasing pensions in
payment, to use the Consumer Prices Index ("CPI") as the reference index in place of the Retail Prices Index
("RPI") where applicable. The remaining active members, numbering approximately 160, were transferred into a
defined contribution plan. The weighted average duration of the expected benefit payments from the Plan is
around 16 years. The pension cost of the Plan is assessed in accordance with the advice of an independent firm
of professionally qualified actuaries, Lane Clark & Peacock LLP. The Plan is registered with HMRC for tax
purposes, operates separately from the Group and is managed by an independent set of Trustees. The Plan
operates under U.K. trust law and the trust is a separate legal entity from the Group. The Plan is governed by an
independent board of Trustees, composed of two member nominated Trustees and four company appointed
Trustees.

The Trustees are required by law to act in the best interests of scheme members and are responsible for setting
certain policies (e.g. investment funding) together with the Company. A schedule of payments provides for deficit
funding, which comprises a shortfall-correction contribution totaling £3.9 million to be paid in the Plan year
commencing 6 April 2018 and annual contributions of £4.1 million paid in each Plan year thereafter until 31
December 2023.

The Group's other arrangements are less significant than the Luxfer Group Pension Plan, the largest being the
BA Holdings, Inc. Pension Plan in the U.S. In December 2005, this plan was closed to further benefit accrual with
members being offered contributions to that Company's 401(k) plan. At January 1, 2016, the U.S. pension plans
(BA Holdings, Inc. Pension Plan and Luxfer Hourly Pension Plan) merged into one plan.

The total charge to the Group's consolidated income statement for 2020 for retirement benefits was a cost of
$5.4 million (2019: cost of $3.9 million).

112

The movement in the pension liabilities is shown below:

Balance at January 1

Charged / (credited) to the consolidated income statement:

Past service cost

Settlement gain

Curtailment credit

Current service cost

Net interest on net liability

Administrative costs

Cash contributions

Charged / (credited) to the consolidated statement of comprehensive income

Exchange difference

Balance at December 31

The financial assumptions used in the calculations were:

LUXFER HOLDINGS PLC

2020

2019

35.2

40.0

0.1

—

1.0

0.9

(5.8)

19.0

0.4

50.8

—

(0.9)

(1.8)

0.1

1.4

0.9

(7.9)

2.3

1.1

35.2

Discount rate

Inflation related assumptions:

Pre-2030

Retail Price Inflation

Consumer Price Inflation

Pension increases—pre 6 April 1997

—1997 - 2005

—post 5 April 2005

Post-2030

Retail Price Inflation

Consumer Price Inflation

Pension increases—pre 6 April 1997

—1997 - 2005

—post 5 April 2005

Other principal actuarial assumptions:

Projected Unit Credit Valuation
Non-U.K.

U.K.

2020

2019

2020

2019

1.40

2.10

2.30

3.10

2.90

1.80

1.70

1.90

1.60

2.70

2.60

2.20

2.60

2.00

2.90

2.00

1.80

2.10

1.70

2.90

2.00

1.80

2.10

1.70

n/a

—

n/a

2020

Years

2019

Years

Life expectancy of male / female in the U.K. aged 65 at accounting date

21.5 / 24.3 21.5 / 24.2

Life expectancy of male / female in the U.K. aged 65 at 20 years after accounting date

22.9 / 25.8 22.8 / 25.7

Investment strategies

For the principal defined benefit plan in the Group and the U.K., the Luxfer Group Pension Plan, the assets are
invested in a diversified range of asset classes and include matching assets (comprising fixed interest and index
linked bonds and swaps) and growth assets (comprising all other assets). The Trustees have formulated a de-
risking strategy to help control the short term risks of volatility associated with holding growth assets. The
Trustees also monitor the cost of a buy-in to secure pensioner liabilities with an insurance company to ensure
they and the Company are able to act if such an opportunity arises. Other options to progressively reduce the
scale of the liabilities are discussed between the Trustees and the Company.

113

LUXFER HOLDINGS PLC

Risk exposures

The Group is at risk of adverse experience relating to the defined benefit plans.

The plans hold a high proportion of assets in equity and other growth investments, with the intention of growing
the value of assets relative to liabilities. The Group is at risk if the value of liabilities grows at a faster rate than
the plans assets, or if there is a significant fall in the value of these assets not matched by a fall in the value of
liabilities. If these events occurred, this would be expected to lead to an increase in the Group's future cash
contributions.

Special events

In 2019, a redundancy exercise took place in France which impacted the French pension plans. This resulted in
a curtailment gain of $1.8m and triggered immediate recognition of the unamortized net actuarial losses of
$0.3m.

Also in 2019, the U.S. plan offered deferred members the opportunity to receive a lump sum in respect of their
benefits in the Plan. As a result, on 20 December 2019 lump sums totaling $2.7m were paid out. The defined
benefit obligation extinguished in this event was valued at $3.6m by the local actuary at this date based on the
2019 year-end discount rate of 3.1% pa. This triggered a settlement gain of $0.9 million

The amounts recognized in the consolidated income statement in respect of the pension plans were as
follows:

In respect of defined benefit plans:
Current service cost
Net interest on net liability
Administrative expenses
Past service cost
Settlement gain
Curtailment credit
Total charge for defined benefit plans
In respect of defined contribution plans:
Total charge for defined contribution plans
Total charge for pension plans

2020

U.K.
$M

2020
Non-
U.K.
$M

2020

2019

Total
$M

U.K.
$M

2019
Non-
U.K.
$M

2019

Total
$M

—
0.9
0.6
0.1
—
—
1.6

1.5
3.1

—
0.1
0.3
—
—
—
0.4

1.9
2.3

—
1.0
0.9
0.1
—
—
2.0

3.4
5.4

—
1.1
0.5
—
—
—
1.6

2.1
3.7

0.1
0.3
0.4
—
(0.9)
(1.8)
(1.9)

2.1
0.2

0.1
1.4
0.9
—
(0.9)
(1.8)
(0.3)

4.2
3.9

Of the total charge for the year, charges of $3.4 million and $0.9 million (2019: $4.3 million and $0.9 million) have
been included in cost of sales and administrative costs, respectively and a charge of $1.0 million. (2019: $1.4
million) has been included in finance costs. In 2019 an additional credit of $2.7 million has been recognized as
changes to defined benefit pension plans in the consolidated income statement.

For the year, the amount of loss recognized in the Consolidated Statement of Comprehensive Income is $19.0
million (2019: loss of $2.3 million).

The actual return of the plans assets was a gain of $33.0 million (2019: gain of $51.7 million).

114

LUXFER HOLDINGS PLC

The value of the plans assets and liabilities were:

Assets in active markets:

Equities and growth funds

Government bonds

Corporate bonds

Cash

Total market value of assets

2020

U.K.

2020

Non-U.K.

2020

Total

2019

U.K.

2019

Non-U.K.

2019

Total

152.3

63.1

141.6

1.9

358.9

26.9

—

18.1

—

45.0

179.2

63.1

159.7

1.9

146.8

52.7

129.1

0.1

403.9

328.7

26.2

—

16.2

—

42.4

173.0

52.7

145.3

0.1

371.1

Present value of plan liabilities

(404.0)

(50.7)

(454.7)

(359.2)

(47.1)

(406.3)

Deficit in the plans

(45.1)

(5.7)

(50.8)

(30.5)

(4.7)

(35.2)

Related deferred income tax assets

8.9

1.0

9.9

5.0

0.8

5.8

Net pension liabilities

(36.2)

(4.7)

(40.9)

(25.5)

(3.9)

(29.4)

The plans do not invest directly in property occupied by the Group or in financial securities issued by the Group.

Analysis of movement in the present value of the defined benefit obligations:

At January 1

Current service cost

Interest on obligation

Actuarial losses on financial
assumptions
Actuarial gains on demographic
assumptions

Actuarial losses on plan experience

Exchange difference

Benefits paid

Past service cost

Curtailment credit

At December 31

2020

U.K.

2020

Non-U.K.

2020

Total

2019

U.K.

2019

Non-U.K.

2019

Total

359.2

47.1

406.3

315.2

46.8

362.0

—

7.0

45.8

—

(6.1)

12.7

—

1.4

5.1

—

8.4

—

9.2

50.9

39.6

0.1

1.9

6.4

(0.4)

—

(0.4)

(6.1)

—

(1.2)

12.7

10.0

(0.5)

—

0.1

11.1

46.0

(0.5)

(1.2)

10.0

(14.7)

(2.5)

(17.2)

(13.6)

(2.2)

(15.8)

0.1

—

0.1

—

(5.4)

404.0

50.7

454.7

359.2

47.1

406.3

The sensitivities regarding the principal assumptions used to measure the present value of the defined benefit
obligations are set out below:

Assumption
Discount rate

Change in assumption

Increase/decrease by 0.1%

CPI inflation (and related increases)

Increase/decrease by 0.1%

Post retirement mortality

Increase by 1 year

Impact on total defined
benefit obligations

Decrease/increase by 10%

Increase/decrease by 8%

Increase by 3%

The sensitivities have been calculated to show the movement in the total defined benefit obligation in isolation,
assuming no other changes in market conditions at the accounting date. In practice, for example, a change in
discount rate is likely to be associated with a movement in the value of the invested assets held by the plans.

115

LUXFER HOLDINGS PLC

Analysis of movement in the present value of the fair value of plan assets:

At January 1

Interest on plan assets

Actuarial gains / (losses)

Exchange difference

Contributions from employer

Administrative expenses

Benefits paid

Settlement

At December 31

2020

U.K.

2020

Non-U.K.

2020

Total

2019

U.K.

2019

Non-U.K.

2019

Total

328.7

42.4

371.1

283.5

38.5

322.0

6.1

21.3

12.3

5.8

(0.6)

(14.7)

—

358.9

1.3

4.1

—

(0.3)

(2.5)

—

45.0

7.4

25.4

12.3

5.8

8.0

36.5

8.9

5.9

(0.9)

(0.5)

(17.2)

(13.6)

—

1.7

5.5

—

2.0

(0.4)

(2.2)

(2.7)

9.7

42.0

8.9

7.9

(0.9)

(15.8)

(2.7)

403.9

328.7

42.4

371.1

The estimated amount of employer contributions expected to be paid to the defined benefit pension plans for the
year ending December 31, 2021 is $5.8 million (2020: $5.8 million actual employer contributions).

32. The Luxfer Group Employee Share Ownership Plan

The trust

In 1997, the Group established an employee benefit trust ("the ESOP") with independent Trustees, to purchase
and hold shares in the Group in trust to be used to satisfy options granted to eligible senior employees under the
Group's share plans established from time to time.

The ESOP was established with the benefit of a gift equivalent to the set up and running costs. Purchase monies
and costs required by the ESOP Trustees to purchase shares for and under the provisions of the trust are
provided by way of an interest free loan from a Group subsidiary. The loan is repayable, in normal
circumstances, out of monies received from senior employees when they exercise options granted to them over
shares. Surplus shares are held by the ESOP Trustees to satisfy future option awards. The ESOP Trustees have
waived their right to receive dividends on shares held in trust. The Remuneration Committee is charged with
determining which senior employees are to be granted options and in what number subject to the relevant plan
rules.

The current plan

The current share option plan, implemented by the Group in February 2007 is The Luxfer Holdings Executive
Share Option Plan ("the Plan"), which consists of two parts. Part A of the Plan is approved by HM Revenue &
Customs and Part B is unapproved. Options can be exercised at any time up to the tenth anniversary of their
grant subject to the rules of the relevant part of the Plan. As a result of the I.P.O. all leaver restrictions over the
shares were released. There are no other performance criteria attached to the options.

Movements in the year

The movement in the number of shares held by the Trustees of the ESOP and the number of share options held
over those shares are shown below:

Number of shares held by ESOP Trustees

£0.0001 deferred
shares

£0.50 ordinary
shares

At January 1, 2020

Shares utilized during the year

Shares transferred from ESOP during the year

15,977,968,688

—

At December 31, 2020

15,977,968,688

1,216,220

(131,909)

(70,799)

1,013,512

At December 31, 2020, the loan outstanding from the ESOP was $0.6 million (2019: $0.6 million).

The market value of each £0.50 ordinary share held by the ESOP at December 31, 2020 was $16.42 (2019:
$18.51).

116

LUXFER HOLDINGS PLC

33. Share based compensation

Luxfer Holdings PLC Long-Term Umbrella Incentive Plan and Luxfer Holdings PLC Non-Executive
Directors Equity Incentive Plan

As an important retention tool and to align the long-term financial interests of our management with those of our
shareholders, the Group adopted the Luxfer Holdings PLC Long-Term Umbrella Incentive Plan (the "LTiP") for
the Group's senior employees, and the Luxfer Holdings PLC Non-Executive Directors Equity Incentive Plan (the
"Director EIP") for the Non-Executive Directors.

The equity or equity-related awards under the LTiP and the Director EIP are based on the ordinary shares of the
Group. The Remuneration Committee administers the LTiP and have the power to determine to whom the
awards will be granted, the amount, type and other terms. Awards granted under the LTIP generally vest one-
third each year over a three-year period, subject to continuous employment and certain other conditions, with the
exercise period expiring five years after grant date. Awards granted under the Director EIP are non-discretionary,
are purely time-based and vest over one year, with settlement occurring immediately on vesting.

Share option and restricted stock awards

In March 2020, a combined 132,900 of Restricted Stock Units and Options over ordinary shares were granted
under the LTIP, which were all time-based awards vesting over four years and expiring two years later. In May
2020, a combined 2,000 of Restricted Stock Units and Options over ordinary shares were granted under the
LTIP, which were all time-based awards vesting over four years and expiring two years later. In June 2020, a
combined 27,280 of Restricted Stock Units and Options over ordinary shares were granted under the Director
EIP, which were all time-based awards that would fully vest one year later. In September 2020, a combined
3,892 of Restricted Stock Units and Options over ordinary shares were granted under the LTIP, which were all
time-based awards vesting over four years and expiring two years later.

In March 2019, a combined 196,320 of Restricted Stock Unite and Options over ordinary shares were granted
under the LTIP, which were all time-based awards vesting over four years and expiring two years later. In May
2019, a combined 3,981 of restricted Stock Units and Options over ordinary shares were granted under the
Director EIP, which were all time-based awards that would fully vest one year later. In December 2019, a
combined 6,000 of Restricted Stock Units and Options over ordinary shares were granted under the LTIP, which
were all time-based awards, vesting over four years and expiring two years later.

Total share-based compensation expense for 2020 and 2019 was as follows:

Share based compensation charges

There were no cancellations or modifications to the awards in 2020 or 2019.

2020
$M

2019
$M

2.8

4.5

The actual tax benefit realized for the tax deductions from option exercises totaled $0.6 million and $0.9 million
in 2020 and 2019 respectively.

The following table illustrates the number of, and movements in, share options during the year, with each option
relating to 1 ordinary share:

2020

2019

At January 1

Granted during the year

Exercised during the year

Accrued dividend awards

Lapsed during the year

At December 31

Options exercisable at December 31,

Options expected to vest as of December 31,

Weighted
average
exercise
price

Number

Weighted
average
exercise
price

Number

467,362

166,072

$0.75

849,062

$1.00

212,419

(222,375)

$0.71

(491,216)

14,727

(12,982)

412,804

11,495

401,309

$0.84

13,838

$0.90

(116,741)

$0.87

467,362

$0.66

8,903

$0.88

458,459

117

$2.1

$0.9

$2.65

$0.72

$2.43

$0.75

$0.66

$0.75

LUXFER HOLDINGS PLC

The weighted average fair value of options granted in 2020 and 2019 was estimated to be $9.41 and $17.65 per
share, respectively. The total intrinsic value of options that were exercised during 2020 and 2019 was
$3.0 million and $11.2 million respectively with the average share price during the year being $14.46 and $19.97
for 2020 and 2019 respectively. At December 31, 2020, the total unrecognized compensation cost related to
share options was $2.2 million (2019: $2.7 million). This cost is expected to be recognized over a weighted
average period of 1.3 years.

The following table illustrates the assumptions used in deriving the fair value of share options during the year:

Dividend yield (%)

Expected volatility range (%)

Risk-free interest rate (%)

Expected life of share options range (years)

Forfeiture rate (%)

Weighted average exercise price ($)
Model used

2020

2019

3.39 - 4.09

2.10

36.48 - 56.28

35.06 - 44.20

0.18 - 0.49

0.50 - 4.00

5.00

0.74 - 2.52

0.50 - 4.00

5.00

$1.00
Black-Scholes
& Monte-Carlo

The expected life of the share options is based on historical data and current expectations and is not necessarily
indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical
volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be
the actual outcome.

Employee share incentive plans

The Group operates an all-employee share incentive plan in its U.K. and U.S. operations and will look to
implement plans in other geographic regions.

118

LUXFER HOLDINGS PLC

34. Related party transactions

Joint venture in which the Company is a venturer

In July 2020, the Company sold its 51% investment in the equity of its previous joint venture, Luxfer Uttam India
Private Limited. During 2020, prior to the sale, the Gas Cylinders segment made $1.5 million (2019: $6.4 million)
of sales to the joint venture. At December 31, 2020, the entity was no longer a related-party. At December 31,
2019 the gross amounts receivable from the joint venture amounted to $2.9 million and the net amounts
receivable amounted to $2.7 million.

During 2020, the Group also maintained its 50% investment in the equity of the joint venture, Nikkei-MEL
Company Limited. During 2020, the Elektron segment made $0.6 million of sales to the joint venture (2019: $0.7
million). At December 31, 2020, the gross and net amounts receivable from the joint venture amounted to $0.2
million (2019: $0.1 million).

Associates in which the Company holds an interest

During 2020, SUB161 Pty Limited, in which the Company held 26.4% equity, was liquidated as it no longer
traded. During 2020, the Group made nil sales (2019: nil) to the associate. At December 31, 2020, the amounts
receivable from the associate denominated in Australian dollars was nil (2019: nil).

Transactions with other related parties

At December 31, 2020, the directors and key management comprising the members of the Executive Leadership
Team, owned 425,413 £0.50 ordinary shares (2019: 377,424 £0.50 ordinary shares) and held awards over a
further 248,522 £0.50 ordinary shares (2019: 302,752 £0.50 ordinary shares).

During the years ended December 31, 2020 and 2019, share options held by members of the Executive
Leadership Team were exercised; information relating to these exercises is disclosed in the Remuneration
Report on pages 39 to 56.

Cherokee Properties Inc. represented a related party in 2019 due to its association with Chris Barnes, who was
until July 2019 the president of one of our operating segments and is the president of Cherokee Properties Inc.
During 2019, we engaged with Cherokee Properties Inc. for rental and associated costs regarding our
manufacturing site in Madison, IL for the value of $1.1 million. We continue to engage with Cheroke Properties
Inc. although not as a related-party.

Other than the transactions with the joint ventures, associates and key management personnel disclosed above,
no other related party transactions have been identified.

35. Post Balance Sheet Events

On March 15, 2021 we completed the acquisition of Structural Composites Industries ("SCI") business of
Worthington Industries, Inc. for $20 million in cash, subject to working capital adjustments. SCI is a U.S.
composite cylinder business based in Pomona, California. The acquisition will complement our existing Gas
Cylinders composite business and allow us to increase focus on Alternative Fuels product lines.

On March 25, 2021, we sold the trade and assets of our U.S.aluminum cylinder business for $21m million cash,
a gain of $6.7 million has been recognized in 2021, net of $2.8 million tax.. The net assets were presented as
held-for-sale in the consolidated balance sheet as at December 31, 2020, and its results from operations were
presented as discontinued in both the current and prior year.

119

COMPANY BALANCE SHEET
All amounts in millions

ASSETS
Non‑current assets
Investments
Deferred income taxes

Current assets
Trade and other receivables
Cash and cash equivalents

TOTAL ASSETS

EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital
Deferred share capital
Share premium account
Treasury shares
Retained earnings
Own shares held by ESOP
Share based compensation reserve
Capital and reserves attributable to the Company’s equity shareholders
Total equity

Non‑current liabilities
Bank and other loans
Retirement benefits

Current liabilities
Trade and other payables

Total liabilities

LUXFER HOLDINGS PLC

At December 31,
2020

At December 31,
2019

Note

£M

38
39

40
41

42
42
42
42

42
42

43
47

267.9
9.4
277.3

26.0
—
26.0

331.4
7.5
338.9

2.6
—
2.6

303.3

341.5

14.5
76.2
51.5
(2.6)
137.4
(1.0)
(5.7)
270.3
270.3

—
33.0
33.0

—

33.0

14.5
76.2
49.4
(2.6)
139.8
(1.2)
(5.4)
270.7
270.7

18.8
23.1
41.9

28.9

70.8

TOTAL EQUITY AND LIABILITIES

303.3

341.5

The Group has taken advantage of the exemption provided under Section 408 of the Companies Act 2006 not to
present Luxfer Holding PLC’s Company income statement. Net profit for the year was £19.1 million (2019: loss of
£0.6 million)

THE FINANCIAL STATEMENTS ON PAGES 120 TO 134 WERE APPROVED BY THE BOARD ON APRIL 29, 2021 AND
SIGNED ON ITS BEHALF:

Alok Maskara

April 29, 2021

Company Registration no. 03690830

120

COMPANY CASH FLOW STATEMENT
All amounts in millions

LUXFER HOLDINGS PLC

CASH FLOWS FROM OPERATING ACTIVITIES
Net income / (loss) for the year
Adjustments to reconcile net income / (loss) for the year to net cash flows from

continuing operating activities:

Note

2020

£M

2019

£M

19.1

(0.6)

Deferred income taxes
Share based compensation charges net of cash settlement
Net interest
Dividends received
Exchange difference charged to income statement
Changes in operating assets and liabilities:

Increase in receivables
(Decrease) / increase in payables

Movement in retirement benefits obligations
NET CASH FLOWS USED IN OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received
Intercompany loans: debt funding
Intercompany loans: interest received
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH FLOWS BEFORE FINANCING

FINANCING ACTIVITIES
Interest and similar finance costs paid on banking facilities
Interest paid on Loan Notes
Repayment on Loan Notes
Dividends paid
Shares sold from ESOP
NET CASH FLOWS USED IN FINANCING ACTIVITIES

NET MOVEMENT IN CASH AND CASH EQUIVALENTS
Net foreign exchange differences
Cash and cash equivalents at January 1
Cash and cash equivalents at December 31

During the year all intercompany balances were converted into trading loans.

0.7
1.2
(2.8)
(14.5)
2.1

(24.6)
(33.1)
(3.8)
(55.7)

14.5
66.3
4.8
85.6
29.9

(0.5)
(0.7)
(18.7)
(10.8)
0.8
(29.9)

—
—
—
—

0.7
(0.1)
(3.8)
—
1.7

(0.6)
5.3
(3.8)
(1.2)

—
1.6
6.5
8.1
6.9

—
(0.7)
—
(10.7)
2.8
(8.6)

(1.7)
—
1.7
—

41
41

121

LUXFER HOLDINGS PLC

COMPANY STATEMENT OF CHANGES IN EQUITY
All amounts in millions

Equity attributable to the equity shareholders of the parent

Note

Ordinary
share
capital
£M

14.5

—

Deferred
share
capital
£M
76.2

Share
premium
account
£M
42.5

Treasury
shares
£M

Retained
earnings
£M

Own
shares held
by ESOP
£M

Share based
compensation
reserve
£M

Total
equity
£M

—

(0.6)

(2.8)

152.1

(1.6)

—

(0.6) 280.3

—

(0.6)

—

(1.4)

—

(1.4)

—

0.4

—

2.6

0.1

4.2

—

0.2

—

(1.6)

(10.7)

—

6.9

0.2

(10.7)

14.5

76.2

49.4

(2.6)

139.8

—

19.1

—

0.2

0.4

(1.2)

—

0.4

—

(1.6)

—

(10.7)

3.1

—

3.1

2.8

0.0

0.3

(7.9)

(3.5)

(4.8)

(8.0)

(5.4) 270.7

—

19.1

—

(13.3)

—

(13.3)

At January 1, 2019
Net income for the year

Remeasurement of defined
benefit retirement plan

Deferred income taxes on
items taken to other
comprehensive income

Total comprehensive

income for the year

Equity dividends

Equity settled share based
compensation charges

Shares sold from ESOP

Utilization of treasury
shares

Utilization of ESOP shares

Other changes in equity in
the year

At December 31, 2019
Net profit for the year

Remeasurement of defined
benefit retirement plan

Deferred income taxes on
items taken to other
comprehensive income

Total comprehensive loss

for the year

Equity dividends paid

Equity settled share based
compensation charges

Shares sold from ESOP

—

0.1

0.2

(1.0)

—

2.6

—

8.4

—

(10.8)

2.2

—

0.8

(2.5)

(1.0)

(0.3)

(8.8)

(5.7) 270.3

—

2.6

—

8.4

(10.8)

—

42
Utilization of ESOP shares 42
Other changes in equity

in the year

—

0.7

1.4

—

2.1

—

(10.8)

At December 31, 2020

14.5

76.2

51.5

(2.6)

137.4

122

LUXFER HOLDINGS PLC

36. Significant accounting policies

Authorization of financial statements

The Company financial statements for the year ended December 31, 2020 were authorized for issue by the
Board of Directors on April 29, 2021 and the balance sheet was signed on the Board’s behalf by A. Maskara.
Luxfer Holdings PLC is a company incorporated and domiciled in England and Wales.

Basis of preparation

The Company financial statements have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 as they apply to companies reporting under IFRS.

The accounting policies set out in this note to the financial statements have been applied in preparing these
financial statements and comparative information.

The Company financial statements have been prepared on a historical cost basis, except where IFRS requires
or permits fair value measurement, and are presented in GBP, the functional currency of the Company. From
January 1, 2021 the functional and presentational currency will be USD.

The directors have a reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. In assessing the appropriateness of adopting the going concern
basis in the preparation of these financial statements, cash forecasts and projections have been prepared to
June 2022. Throughout the forecasted period, there is sufficient headroom in our covenant compliance which
would enable the Group to drawdown on the RCF and therefore not impact the Company's ability to continue as
a going concern. Therefore the directors continue to apply the going concern basis for accounting in the
preparation of the Company financial statements.

Investments

Investments in subsidiary undertakings are stated at cost less, where appropriate, provisions for impairment.

Loans to subsidiary undertakings and joint ventures are initially recorded at fair value; they are then
subsequently carried at amortised cost. The loans are interest bearing.

The Company grants share-based payments to the employees of subsidiary companies. Each period, the fair
value of the employee services received by the subsidiary as a capital contribution from the Company is
reflected as an addition to investments.

The Company has applied IFRS 9 and the expected credit loss model when valuing its loans to investments.

Functional and presentational currency

Items included in the financial statements of the Company are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”), which is GBP sterling. The
presentational currency of the Company is GBP sterling.

Other accounting policies

As applicable, the accounting policies of the Company follow those of the Group set out in Note 1 to the
consolidated financial statements. The critical accounting judgments and key sources of estimation uncertainty
applicable for the Company financial statements are impairment of non-financial assets, pensions and deferred
income taxes.

123

LUXFER HOLDINGS PLC

37. Directors’ interests

Disclosure of individual directors’ remuneration, share interests, share options, long-term incentive schemes,
pension contributions and pension entitlements required by the Companies Act 2006 are shown within the
Remuneration Report on pages 39 to 56 and form part of these financial statements.

38. Investments

Cost and net book value:
At January 1, 2019
Additions
Repayment of loans to subs
Exchange difference
At December 31, 2019
Additions
Repayment of loans to subs
Exchange difference
At December 31, 2020

Investments in
subsidiary
undertakings
£M

Loans to
subsidiary
undertakings
£M

Capital
contributions
£M

218.0
—
—
—
218.0
—
—
—
218.0

108.8
—
(1.6)
(2.3)
104.9
—
(66.3)
(1.0)
37.6

7.2
1.3
—
—
8.5
3.8
—
—
12.3

Total
£M

334.0
1.3
(1.6)
(2.3)
331.4
3.8
(66.3)
(1.0)
267.9

Details of the investments in which the Group or the Company holds share capital at December 31, 2020, are as
follows:

BA Holdings, Inc.*

Biggleswick Limited *

Name of company

Luxfer Australia Pty Limited *

Luxfer Group Services Limited *
Lumina Trustee Limited 1

Country of
incorporation
U.S. 3
England and Wales2
England and Wales2
England and Wales2
Australia6
England and Wales2
Luxfer Gas Cylinders Limited *
Luxfer Gas Cylinders China Holdings Limited * England and Wales2
Republic of China7
England and Wales2
England and Wales2
England and Wales2
U.S. 3
England and Wales2
England and Wales2
U.S.8

Luxfer Gas Cylinders (Shanghai) Co., Limited *

Luxfer Group UK Pension Trustee Limited*#

Luxfer Overseas Holdings Limited *

Magnesium Elektron Limited *

Luxfer Group 2000 Limited

MEL Chemicals, Inc.*

Luxfer Group Limited

Luxfer, Inc.*

Magnesium Elektron North America, Inc. *

Niagara Metallurgical Products Limited *

Reade Manufacturing, Inc.*

Luxfer Gas Cylinders S.A.S. *

Luxfer Canada Limited *

Luxfer Germany GmbH *

Luxfer Magtech Inc.*

Luxfer Magtech International Limited *
GTM Technologies, LLC *

Name of company
Other Investments

Nikkei-MEL Co Limited *

U.S.5
Canada9
U.S.5
France4
Canada10
Germany11
U.S.5
England and Wales2
U.S.12

Country of
incorporation

Holding

Common stock

Ordinary shares

Common stock

Ordinary shares

Common stock /

Preference shares

Common stock

Ordinary shares

Common stock

Ordinary shares

Common stock

Common stock
Capital Interest

Proportion of voting
rights and shares held

Nature of
business
100% Holding company

100%

Non trading

100% Property Services

100% Trustee company

100%

Distribution

Engineering

100% Holding company

100%

Manufacturing

100% Holding company

100%

Non trading

Engineering

100% Holding company

100%

100%
100%

Manufacturing

Engineering

Manufacturing

Manufacturing
Engineering

Holding

Proportion of voting
rights and shares held

Nature of
business

Japan13

Ordinary shares

50 %

Distribution

All shareholdings stated are valid for both 2020 and 2019 except where indicated

124

LUXFER HOLDINGS PLC

Subsidiary undertakings are all held directly by the Company unless indicated.
* Held by a subsidiary undertaking.
# Registered in 2020
1 Acts as bare trustee in connection with the 2007 share capital reorganisation.
2 Registered address: Lumns Lane, Manchester, M27 8LN, England.
3 Registered address: 1679 S. Dupont Hwy, Ste 100, Dover, DE 199091, U.S.
4 Registered address: 7 Rue de l’Industrie, 63360 Gerzat, France.
5 Registered address: The Corporation Trust Company, Corporate Trust Center, 1209 Orange Street, Wilmington, DE 19801, U.S.
6 Registered address: Unit 4, 171-175 Newton Road, Wetherill Park, NSW 2164, Australia.
7 Registered address: No. 123, Lane 150, Pingbei Road, Minghang District, Shanghai, PRC 201109, China.
8 Registered address: c/o CT Corporation, 830 Bear Tavern Road, Trenton, NJ 08628, U.S.
9 Registered address: David Toswell of Blake, Cassels & Graydon LLP, 1114 Harvest Drive, Pickering, ON, L1X 1B6, Canada.
10 Registered address: (Torys) 525-8th Avenue S.W, 46th Floor, Eighth Avenue Place East, Calgary, Alberta, T2P 1G1, Canada.
11 Registered address: Am Alten Stadtpark 37, 44791 Bochum, Germany.
12 Registered address: Corporation Service Comp., 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, DE 19808, USA
13 Registered address: NYK Tennoz Building, 2-20 Higashi-Shinagawa 2-chome, Shinagawa-ku, Tokyo, 140-8628, Japan

During 2020 the Group disposed of one of its joint ventures, Luxfer Uttam India Private Limited and liquidated its
associate, Sub 161 Pty Limited.

39. Deferred income taxes

At January 1, 2019
Credited/(charged) to income statement

Charged to other comprehensive income

At December 31, 2019
Charged to income statement

Credited to other comprehensive income

At December 31, 2020

Tax losses and
other timing
differences
£M
3.2

0.3

—

3.5
(0.5)
—
3.0

Retirement
benefit
obligations
£M
4.6
(1.0)
0.4
4.0
(0.2)
2.6
6.4

Total
£M
7.8

(0.7)

0.4

7.5

(0.7)

2.6
9.4

At the balance sheet date, the Company has no unrecognized deferred income tax assets relating to losses
(2019: nil). A deferred tax asset of £3.0 million (2019: £3.5 million) has been recognized in relation to timing
differences and losses, to the extent that it is deemed probable that sufficient taxable profit will be available
against which the losses may be utilized.

40. Trade and other receivables

Amounts owed by Group undertakings

Other debtors

December 31,
2020

December 31,
2019

£M

25.5

0.5

26.0

£M

1.9

0.7

2.6

The amounts owed by Group undertakings are unsecured and repayable on demand.

The other debtors balance relates to unamortized finance costs attributed to the revolving credit facility. As the
facility was nil at the year end, these finance costs have been reclassified from bank and other loans into other
debtors.

41. Cash and cash equivalents

Cash is swept into a concentration account held within a subsidiary undertaking. Cash at bank and in hand earns
interest at floating rates based on daily bank deposit rates. The directors consider that the carrying value of cash
and cash equivalents approximates to their fair value.

125

LUXFER HOLDINGS PLC

42. Share capital and Reserves
Ordinary share capital
(a)

December 31,
2020

December 31,
2019

December 31,
2020

December 31,
2019

No.

Authorized:
Ordinary shares of £0.50 each
40,000,000
Deferred ordinary shares of £0.0001 each 761,845,338,444
761,885,338,444

Allotted, called up and fully paid:
Ordinary shares of £0.50 each
29,000,000
Deferred ordinary shares of £0.0001 each 761,835,338,444
761,864,338,444

40,000,000

761,845,338,444

761,885,338,444

29,000,000

761,835.338444

761,864,338,444

£M

20.0

76.2

96.2

14.5

76.2

90.7

£M

20.0

76.2

96.2

14.5

76.2

90.7

The rights of the shares are as follows:

Ordinary shares of £0.50 each

Deferred ordinary shares of £0.0001 each

The deferred shares have no entitlement to dividends or to vote. On a winding up (but not otherwise) the
holders of the deferred shares shall be entitled to the repayment of the paid up nominal amount of the deferred
shares, but only after any payment to the holders of ordinary shares of an amount equal to 100 times the amount
paid up on such ordinary shares.

(b)

Share premium account

At January 1, 2019

Shares sold from ESOP

Utilization of treasury shares

Utilization of ESOP shares

At December 31, 2019

Shares sold from ESOP

Utilization of ESOP shares

At December 31, 2020

£M

42.5

2.6

0.1

4.2

49.4

0.7

1.4

51.5

(c)

Treasury shares

At January 1, 2019
Utilization of treasury shares

At December 31, 2019

At December 31, 2020

£M

(2.8)

0.2

(2.6)

At December 31, 2020, there were 350,335 treasury shares held at a cost of £2.6 million (2019: 352,499
treasury shares held at a cost of £2.6 million).

126

(d)

Own shares held by ESOP

At January 1, 2019
Utilization of ESOP shares

Shares sold from ESOP

At December 31, 2019
Utilization of ESOP shares

Shares sold from ESOP

At December 31, 2020

LUXFER HOLDINGS PLC

£M

(1.6)

0.2

(1.2)

0.1

(1.0)

At December 31, 2020, there were 1,013,512 ordinary shares of £0.50 each (2019: 1,216,220 ordinary shares of
£0.50 each) held by The Luxfer Group Employee Share Ownership Plan.

43. Bank and other loans

Non‑current
Loan Notes due 2021 - gross

Unamortized finance costs

Loan Notes due 2021 - net

December 31,
2020

December 31,
2019

£M
—

—

£M
18.9

(0.1)

18.8

The seven-year private placement was repayable in full in 2021, and bore interest at 3.67% and was unsecured.
However, we voluntarily chose to repay the notes early, on December 31, 2020. Therefore, at December 31,
2020, the total amount outstanding on the Loan Notes due 2021 was nil, which is shown in bank and other loans.

At December 31, 2020, there were £0.5 million of unamortized finance costs attributed to the revolving credit
facility. As the facility was transferred to a subsidiary undertaking during 2019, these finance costs have been
reclassified into other debtors.

The maturity profile of the Group’s undiscounted contractual payments is disclosed in Note 29 in the
consolidated financial statements.

44. Trade and other payables

Amounts owed to Group undertakings

Accruals

December 31,
2020
£M

December 31,
2019
£M

—

—
—

28.7

0.2
28.9

The amounts owed to Group undertakings were unsecured, repayable on demand and no interest was charged.

127

LUXFER HOLDINGS PLC

45. Financial instruments

The following disclosures relating to financial instruments have been prepared on a basis which excludes
short‑term debtors and creditors which have resulted from the Company’s operating activities.

(a)

Financial instruments of the Company

The financial instruments of the Company other than short‑term debtors and creditors were as follows:

Financial instruments:
Financial assets:
Loans to subsidiary undertakings
Financial liabilities(1):
Loan Notes due 2021

Book value
December 31,
2020
£M

Fair value
December 31,
2020
£M

Book value
December 31,
2019
£M

Fair value
December 31,
2019
£M

37.6

—

37.6

—

104.9

18.9

19.0

(1)

All financial assets mature within one year; however, there is no current intention to seek repayment of loans to
subsidiary undertakings. The maturity of the financial liabilities is disclosed in Note 29 in the consolidated
financial statements.

At December 31, 2020 the amount drawn in bank and other loans was nil (2019: £18.9 million), denominated in
U.S. dollars.

The fair value calculations were performed on the following basis:

Loans to subsidiary undertakings

The carrying value approximates to the fair value.

Bank loans

At December 31, 2020, bank and other loans of nil (2019: £18.9 million) were outstanding. There were also £0.5
million of unamortized finance costs attributed to the revolving credit facility classified within prepayments.

Fair value hierarchy

At December 31, 2020, the Company used the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly.

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based
on observable market data.

(b)

Interest rate risks

Interest rate risk profile on financial assets

As the Company holds no cash or external loans at December 31, 2020, the interest rate risk is negligible.

128

LUXFER HOLDINGS PLC

Interest rate risk profile on financial liabilities

The following table sets out the carrying value, by original maturity, of the Company’s financial instruments that
were exposed to both fixed and variable interest rate risk. The carrying values include interest payments to be
made and interest rates on the Company’s variable rate debt have been based on a forward curve.

At December 31, 2020

At December 31, 2019

Within
12 months
£M

1 to 5
years
£M

> 5
years
£M

Total
£M

Within
12 months
£M

1 to 5
years
£M

> 5
years
£M

Total
£M

Fixed interest rate risk:
Loan Notes due 2021

(including interest payments)

—
—

0.7

19.4
19.4

—
—

20.1

(c)

Undrawn committed facilities

At December 31, 2020, the Group had committed banking facilities of $150.0 million (£109.8 million). The
facilities were for providing loans and overdrafts, with a separate facility for letters of credit which at
December 31, 2020 was £1.0 million ($1.3 million). Of the committed facilities, $4.1 million (£3.0 million) was
drawn, no loans were drawn across the Group and $nil for letters of credit were utilized.

At December 31, 2019, the Group had committed banking facilities of $150.0 million (£113.5 million). The
facilities were for providing loans and overdrafts, with a separate facility for letters of credit which at
December 31, 2019 was £1.0 million ($1.3 million). Of the committed facilities, no loans were drawn across the
Group and $nil for letters of credit were utilized.

46. Financial risk management objectives and policies

The Company’s financial instruments comprise bank and other loans and cash and cash equivalents. The main
risks arising from the Company’s financial instruments are cash flow interest rate risk, foreign currency
translation risk, credit risk and capital risk management.

Foreign currency translation risk

The Company is exposed to translation risk on both its income statement, based on average exchange rates,
and its balance sheet with regards to period end exchange rates. The net exposure to external USD loans at
December 31, 2020 was nil.

Credit risk

The Company is exposed to credit risk on the loans which have been provided to subsidiary undertakings. The
total exposure regarding these loans is £37.6 million. None of the loans are past due or are been deemed
impaired.

Capital risk management

The capital structure of the Company consists of shareholders' equity, debt and cash and cash equivalents. For
the foreseeable future, the Board will maintain a capital structure for the Company that supports the Group's
strategic objectives through:

• Managing funding and liquidity; and

• Maintaining a strong, investment-grade credit rating.

129

LUXFER HOLDINGS PLC

External net debt reconciliation

Cash at bank
and in hand

Bank and other
loans

Finance costs in
other debtors

£M

Total

£M

Net debt at January 1, 2019

Cash flows

Other non-cash movements

Net debt at December 31, 2019

Cash flows

Other non-cash movements

Net debt at December 31, 2020

(1.7)

1.7

—

19.5

—

(0.7)

18.8

(18.7)

(0.1)

—

(1.1)

—

0.4

(0.7)

—

0.2

(0.5)

16.7

1.7

(0.3)

18.1

(18.7)

0.1

(0.5)

47. Retirement benefits

The Company is a member of the Luxfer Group Pension Plan (“the Plan”), a defined benefit scheme in the U.K.
The levels of funding are determined by periodic actuarial valuations. The assets of the Plan are generally held
in separate trustee administered funds.

Remeasurements are recognised in full in the period in which they occur. The liability recognized in the balance
sheet represents the present value of the defined benefit obligation, as reduced by the fair value of plan assets.
The cost of providing benefits is determined using the Projected Unit Credit Method.

The full deficit relating to the Plan has been included in the Company statement of financial position. This is
because there is no allocation of the deficit between the various subsidiary companies. The Directors consider
the sponsor to be the ultimate parent company in the Group.

The Plan closed to new members in 1998, new employees then being eligible for a defined contribution plan.
With effect from April 2004, the Plan changed from a final salary to a career average revalued earnings benefit
scale. In August 2005, a plan specific earnings cap of £60,000 per annum subject to inflation increases was
introduced, the figure has risen to £76,000 in 2015. In October 2007, the rate of the future accrual for pension
was reduced and a longevity adjustment was introduced to mitigate against the risk of further unexpected
increases in life expectancies. In 2015, following a consultation with the trustees and members, it was agreed
the Plan would close to future accrual of benefits effective from April 5, 2016 and for the purpose of increasing
pensions in payment, to use the Consumer Prices Index (“CPI”) as the reference index in place of the Retail
Prices Index (“RPI”) where applicable. The weighted average duration of the expected benefit payments from
the plan is around 18 years. The pension cost of the Plan is assessed in accordance with the advice of an
independent firm of professionally qualified actuaries, Lane Clark & Peacock LLP. The Plan is registered with
HMRC for tax purposes, operates separately from the Company and is managed by an independent set of
trustees. The Plan operates under UK trust law and the trust is a separate legal entity from the Company. The
Plan is governed by a Board of Trustees, composed of two member nominated Trustees and four company
appointed Trustees.

The Trustees are required by law to act in the best interests of scheme members and are responsible for setting
certain policies (e.g. investment funding) together with the Company. A schedule of payments provides for deficit
funding, which is based upon minimum annual contributions of £3.8 million per year, together with additional
variable contributions based on 15% of net earnings of Luxfer Holdings PLC between £12.0 million and £24.0
million, and 10% of net earnings of Luxfer Holdings PLC in excess of £24.0 million.

The total charge to the Company’s income statement for 2020 for retirement benefits was £1.0 million (2019:
charge of £1.2 million).

130

The movement in the pension liabilities is shown below:

Balance at January 1

Charged to the income statement

Net interest on net liability

Administrative expenses

Past service cost

Cash contributions

Charged to the statement of comprehensive income

Balance at December 31

The financial assumptions used in the calculations were:

Discount rate

Inflation related assumptions:

Pre-2030

Retail Price Inflation

Consumer Price Inflation

Pension increases—pre 6 April 1997
—1997 ‑ 2005
—post 5 April 2005

Post-2030

Retail Price Inflation

Consumer Price Inflation

Pension increases—pre 6 April 1997
—1997 ‑ 2005
—post 5 April 2005

Other principal actuarial assumptions:
Life expectancy of male in the U.K. aged 65 at accounting date

Life expectancy of male in the U.K. aged 65 at 20 years after accounting date

Investment strategies

LUXFER HOLDINGS PLC

2020
£M

2019
£M

23.1

24.8

0.4

0.5

0.1

(4.4)

13.3

33.0

0.7

0.5

—

(4.3)

1.4

23.1

2020
%

2019
%

1.40

2.10

2.90

1.80

1.70

1.90

1.60

2.70

2.60

2.20

2.60

2.00

2.90

2.00

1.80

2.10

1.70

2.90

2.00

1.80

2.10

1.70

2020
Years

2019
Years

21.5

22.9

21.5

22.8

For the Plan, the assets are invested in a diversified range of asset classes and include matching assets
(comprising fixed interest and index linked bonds and swaps) and growth assets (comprising all other assets).
The Trustees have formulated a de-risking strategy to help control the short term risks of volatility associated
with holding growth assets. The Trustees also monitor the cost of a buy-in to secure pensioner liabilities with an
insurance company to ensure they are able to act if such an opportunity arises. Other options to progressively
reduce the scale of the liabilities are discussed between the Trustees and the Company.

Risk exposures

The Company is at risk of adverse experience relating to the defined benefit plan.

The Plan holds a high proportion of assets in equity and other growth investments, with the intention of growing
the value of assets relative to liabilities. The Company is at risk if the value of liabilities grows at a faster rate
than the plan assets, or if there is a significant fall in the value of these assets not matched by a fall in the value
of liabilities. If these events occurred, this would be expected to lead to an increase in the Company’s future
cash contributions.

131

The amounts recognized in the income statement in respect of the pension plan were as follows:

LUXFER HOLDINGS PLC

In respect of defined benefit plan:
Net interest on net liability

Administrative expenses

Past service cost

Total charge for defined benefit plan

2020
£M

2019
£M

0.4

0.5

0.1

1.0

0.7

0.5

—

1.2

For the year, the amount of charge recognised in the Statement of Comprehensive Income is £13.3 million
(2019: £1.4 million).

The actual return on the plan assets was a gain of £20.9 million (2019: gain of £28.6 million).

The value of the plan assets and liabilities were:

Assets in active markets:
Equities and growth funds

Government bonds

Corporate bonds

Cash

Total market value of assets

Present value of plan liabilities

Deficit in the Plan

Related deferred income tax assets

Net pension liabilities

2020
£M

2019
£M

111.5

111.1

46.2

103.7

1.4
262.8
(295.8)
(33.0)
6.4
(26.6)

39.9

97.7

0.1

248.8

(271.9)

(23.1)

4.0

(19.1)

The Plan does not invest directly in property occupied by the Company or in financial securities issued by the
Company.

Analysis of movement in the present value of the defined benefit obligations:

At January 1

Service cost

Interest on obligation

Actuarial losses

Benefits paid

At December 31

2020
£M

2019
£M

271.9

245.5

0.1

5.5

29.1

(10.8)
295.8

—

7.0

30.0

(10.6)

271.9

The sensitivities regarding the principal assumptions used to measure the present value of the defined benefit
obligations are set out below:

Assumption
Discount rate

CPI inflation (and related increases)

Post retirement mortality

Change in assumption

Impact on total defined
benefit obligations

Increase/decrease by 0.1%

Decrease/increase by 2%

Increase/decrease by 0.1%

Increase/decrease by 1%

Increase by 1 year

Increase by 4%

132

Analysis of movement in the present value of the fair value of plan assets:

At January 1

Interest on plan assets

Actuarial gains / (losses)

Contributions from employers

Administrative expenses

Benefits paid

At December 31

LUXFER HOLDINGS PLC

2020
£M

2019
£M

248.8

5.1
15.8
4.4
(0.5)
(10.8)
262.8

220.7

6.3

28.6

4.3

(0.5)

(10.6)

248.8

The estimated amount of employer contributions expected to be paid to the defined benefit pension plan for the
year ending December 31, 2020 is £4.4 million (2019: £4.3 million actual employer contributions).

48. Related party transactions

During 2020, the Company has made the following transactions and has the following outstanding balances at
December 31, 2020 with related parties:

Name of related party
Luxfer Group Limited
MEL Chemicals, Inc.
Luxfer Overseas Holdings Limited
BA Holdings, Inc.
Magnesium Elektron North America, Inc.
Luxfer Group 2000 Limited
Luxfer Magtech Inc.
Luxfer Gas Cylinders Limited

Income

Expenditure

Balances outstanding

Interest
£M
0.2
0.2
0.2
1.0
0.3
0.3
2.5
0.1

Management
recharges
£M
(0.5)
—
—
—
—
—
—
—

Investments
£M
—
—
—
7.3
—
—
30.3
—

Trade and other
receivables
£M
23.8
—
1.6
—
—
—
0.1
—

Trade and other
payables
£M
—
—
—
—
—
—
—
—

Of the balances outstanding held within investments, these balances are all interest bearing and are based on
market rates of interest.

Included within trade and other receivables is a loan to Luxfer Group Limited for £23.7 million. This loan is
interest bearing, unsecured and is repayable on demand.

During 2019, the Company has made the following transactions and has the following outstanding balances at
December 31, 2019 with related parties:

Name of related party
Luxfer Group Limited
MEL Chemicals, Inc.
Luxfer Overseas Holdings Limited
BA Holdings, Inc.
Magnesium Elektron North America, Inc.
Magnesium Elektron Limited
Luxfer Group 2000 Limited
Luxfer Holdings NA, LLC
Luxfer Magtech Inc.
Luxfer Gas Cylinders Limited

Income

Expenditure

Balances outstanding

Interest
£M
0.4
0.3
0.4
1.5
0.4
0.2
0.6
0.1
2.6
0.1

Management
recharges
£M
(0.4)
—
—
—
—
—
—
—
—
—

Investments
£M
5.0
5.3
10.0
24.2
7.7
4.7
14.3
—
31.3
2.4

Trade and other
receivables
£M
—
—
—
0.4
0.1
0.2
0.4
—
0.7
0.1

Trade and other
payables
£M
(28.7)
—
—
—
—
—
—
—
—
—

Included within trade and other payables is a loan from Luxfer Group Limited for £28.6 million. This loan is non-
interest bearing, unsecured and is repayable on demand.

133

LUXFER HOLDINGS PLC

In addition to the transactions above, share based compensation recharges have been made to Luxfer, Inc.,
Luxfer Gas Cylinders Limited, Luxfer Group Limited, BA Holdings, Inc., Magnesium Elektron Limited, Magnesium
Elektron North America Inc, MEL Chemicals Inc, Luxfer Magtech Inc, and Luxfer Canada Limited for £1.4
million, £0.2 million, £0.4 million, £0.6 million, £0.2 million, £0.1million, £0.4 million, £0.1 million and £0.4 million
respectively (2019: Luxfer Gas Cylinders Limited, Luxfer Group Limited and Magnesium Elektron Limited for
£0.1 million, £1.0 million, £1.2 million, £1.0 million and £0.2 million respectively). These amounts are recognised
as capital contributions in the year.

Other than the transactions mentioned above, no other related party transactions have been identified.

49. Post balance sheet events

As from January 1, 2021 the functional currency of Luxfer Holdings PLC has changed to from GBP sterling to
USD.

On March 15, 2021 a subsidiary undertaking of the the company completed the acquisition of Structural
Composites Industries ("SCI") business of Worthington Industries, Inc. for $20 million in cash, subject to working
capital adjustments. SCI is a U.S. composite cylinder business based in Pomona, California.

On March 25, 2021, a subsidiary undertaking sold the trade and assets of its U.S.aluminum cylinder business for
$21m million cash, a gain of $6.7 million has been recognized in 2021, net of $2.8 million tax in the consolidated
income statement.

134