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Specialist Chemicals and Systems
Norman Hay plc
Godiva Place
Coventry
CV1 5PN
T : +44 (0) 24 7622 937 3
F: +44 (0) 24 7622 4420
E: info@normanhay .com
www .normanhay .com
2 0 0 9
Annual Report and Accounts
Annual Report and Accounts 2009 Norman Hay plc 17666	 18/05/2010	 Proof	6 17666	 18/05/2010	 Proof	6
W elc ome
Norman Hay plc is one of the world’s leading specialist 
chemical and systems suppliers to the aerospace, 
automotive, oil & gas and construction industries. 
Our advanced products are designed to enable our 
customers to maximise the reliability and operating 
performance of their components and materials.
Our Year in Brief 1
Introduction – Our Businesses 2
Chairman’s Statement 4
Chief Executive’s Business Review 7
Directors and Executive Team 10
Report of the Directors 11
Statement of Directors’ Responsibilities 14
Independent Auditors’ Report 15
Consolidated Statement of  
Comprehensive Income 16
Consolidated Statement of  
Financial Position 17
Consolidated Cash Flow Statement 18
Consolidated Statement of  
Changes in Equity 19
Notes to the Group Financial Statements 20
Parent Company Balance Sheet 46
Notes to the Financial Statements of 
the Parent Company 47
Notice of Meeting 55
Advisers Inside Back Cover
Contents
Secretary and Registered Office
Brigid M Cattle
Godiva Place
Coventry  
CV1 5PN
Registered Number 405025
Independent Auditors
BDO LLP
125 Colmore Row
Birmingham  
B3 3SD
Bankers
Bank of Scotland
38 St Andrew Square
Edinburgh  
EH2 2YR
Close Brothers
10 Crown Place
London  
EC2A 4FT
Registrars
Equiniti
1st Floor, 34 South Gyle Crescent  
South Gyle Business Park 
Edinburgh  
EH12 9EB
Nominated Adviser and Broker 
Brewin Dolphin Securities Limited 
PO Box 512
National House
36 St Ann Street
Manchester 
M60 2EP
Financial Marketing
Haggie Financial LLP
4 Sun Court
66–67 Cornhill
London 
EC3V 3NB 
We take our responsibilities seriously and work continuously  
to improve our environmental performance. 
 
Advisers
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page 1
Our Y ear in Brief
	 Continued 	 profitability	 in	 difficult	 conditions
	 Pre-tax 	 profits	 £0.9m	 (2008:	 £2.4m)
	 Revenue 	 £26.2m	 (2008:	 £27m)
	 International 	 Revenue	 51%	 (2008:	 48%)
	 Cash 	 generated	 from	 operations	 £1.8m	 (2008:	 £1.1m)
	 Increased 	 dividend	 for	 the	 year	 of	 4.3p	 (2008:	 4.0p) 17666	 20/05/2010	 Proof	10
page 2
2009
Annual Report and Accounts
page 2
The Norman Hay Group of companies has 
operations across five continents, with 
distributors, agents and resellers in over 
25 countries.
As	 a	 leading	 specialist	 chemicals	 and	 systems	
Group,	 our	 diverse	 and	 global	 operations	
enable	 us	 to	 take	 advantage	 of	 opportunities	
in	 developing	 economies	 and	 markets.
The	 depth	 and	 breadth	 of	 our	 people’s	
experience	 has	 been	 key	 in	 partnering	 with	
prestigious	 customers	 such	 as	 Rolls-Royce,	
BAE	 Systems	 and	 the	 BMW	 Group.
We	 maintain	 our	 market	 leading	 status	
by	 pursuing	 new	 initiatives,	 adapting	 to	
emerging	 markets	 and	 strengthening	
the	 world	 class	 brands	 of	 our	 product-led	
businesses.
Surface coatings 
We specialise in 
modifying component 
surfaces to operate in 
harsh environments   
We coat products to 
assist surface release, 
friction control, and 
corrosion protection 
Impregnation sealants
We provide permanent 
solutions to porosity 
in materials, especially 
metal castings
We seal materials to 
improve our customers’ 
component quality and 
performance 
Construction chemicals   
We provide chemicals 
for all aspects 
of underground 
construction  
We provide chemicals 
for water sealing, 
bonding, ground 
stabilisation, grouting, 
coating and repairing  
Chemical process plant    
We design, build 
and commission 
impregnation and 
surface treatment 
process plant and 
equipment 
We operate and manage 
in-house impregnation 
and surface treatment 
plants at our customers’ 
premises
Introduction – Our Businesses 
Strength through global diversity and people
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page 3
£6.6m
Plasticraft,	 part	 of	 the	 Norman	 Hay	
Chemical	 Engineering	 Division,	 secured	
a	 £6.6m	 contract	 from	 Rolls-Royce	 in	
2009	 for	 process	 plant	 and	 equipment	
to	 be	 installed	 in	 Singapore.
As	 the	 UK’s	 foremost	 supplier	 of	
surface	 treatment	 equipment	 to	
the	 global	 aerospace	 sector,	 this	
prestigious	 contract	 is	 for	 the	 supply	
of	 ten	 chemical	 process	 lines	 for	
the	 manufacture	 of	 aero-engine	
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2009
Annual Report and Accounts
page 4
Chairman ’ s Statement
I	 am	 delighted	 to	 announce	 that,	 following	
a	 challenging	 first	 half,	 the	 Norman	 Hay	
Group	 saw	 a	 significant	 recovery	 in	 the	
second	 half	 of	 2009.
We	 view	 our	 pre-tax	 profit	 for	 the	 year	 as	 an	 extremely	
satisfactory	 result.
Our	 full	 year	 result	 includes	 profit	 on	 the	 disposal	 of	 the	
remaining	 wet	 processing	 operations	 on	 our	 Coventry	
City	 Centre	 site,	 as	 reported	 in	 our	 interim	 statement.	
This	 is	 a	 profit	 on	 sale	 of	 £862,000	 on	 a	 deferred	
consideration	 basis,	 after	 taking	 into	 account	 the	 direct	
costs	 of	 the	 disposal.
The	 cost	 reduction	 programme	 we	 undertook	 in	 the	 first	
half	 of	 2009	 mitigated	 the	 effects	 of	 a	 downturn	 in	 global	
trading.	 Additionally,	 revenue	 in	 the	 second	 half	 rose	 by	
11%	 compared	 to	 the	 first	 half.
Our	 exposure	 to	 the	 economic	 downturn	 in	 the	 UK	
was	 limited	 by	 the	 international	 diversification	 of	 our	
product-led	 businesses.	 In	 addition,	 our	 impregnation	
sealants	 and	 construction	 chemicals	 companies	 now	
generate	 the	 majority	 of	 their	 business	 overseas,	 as	 will	
the	 engineering	 business	 in	 2010	 and	 2011.
Our	 surface	 coatings	 division,	 in	 which	 most	 business	
units	 are	 UK-based,	 requires	 its	 operations	 to	 be	 sited	
geographically	 close	 to	 its	 customers	 because	 of	 the	
sub-contract	 nature	 of	 its	 business.	 It	 has	 therefore	 been	
significantly	 affected	 by	 the	 severe	 downturn	 in	 UK	
manufacturing.	
However,	 we	 have	 successfully	 won	 business	 from	
competitors	 who	 have	 struggled	 in	 the	 recent	 financial	
climate.	
Also,	 following	 the	 successful	 example	 of	 our	 overseas	
product-based	 divisions,	 we	 are	 in	 the	 process	 of	 building	
an	 international	 market	 for	 our	 sub-contract	 coatings	
businesses	 with	 operations	 recently	 opening	 up	 and	
developing	 in	 Malaysia,	 Australia	 and	 mainland	 China.
Dividends
A	 second	 interim	 dividend	 for	 the	 year	 of	 2.3p,	
announced	 on	 2	 March	 2010,	 was	 paid	 to	 shareholders	
on	 26	 March	 2010	 in	 place	 of	 a	 final	 dividend	 for	 the	 year,	
making	 the	 total	 for	 the	 full	 year	 4.3p	 (2008:	 4.0p).
It	 is	 intended	 that	 future	 dividend	 payments	 will	 be	 paid	
in	 line	 with	 the	 normal	 dividend	 schedule.
Business Overview 
Ultraseal	 –	 Impregnation	 Sealants	
Despite	 the	 challenges	 facing	 the	 global	 automotive	
industry,	 Ultraseal	 International	 was	 the	 largest	
contributor	 to	 Group	 profits	 during	 the	 year.
The	 main	 effect	 of	 the	 downturn	 in	 general	 for	 this	 sector	
was	 the	 cancellation	 or	 delay	 of	 major	 projects.	 This	
resulted	 in	 a	 very	 low	 order	 book	 for	 capital	 equipment,	
although	 consumable	 sealant	 sales	 were	 affected	 to	 a	
lesser	 degree.
Despite	 this,	 the	 business	 still	 managed	 to	 trade	
profitably	 in	 the	 first	 half	 of	 the	 year	 and	 saw	 an	
excellent	 recovery	 in	 the	 second	 half	 as	 demand	
began	 to	 recover	 in	 the	 USA.	 Also	 Chinese	 automotive	
manufacturing	 returned	 to	 significant	 levels	 of	
production,	 which	 is	 particularly	 positive	 for	 our	
operation	 in	 Shanghai.	
We	 expect	 these	 trends	 to	 continue	 in	 2010.
Armourcote –	 Surface	 Coatings
Overall,	 the	 second	 half	 of	 2009	 was	 less	 profitable	 than	
the	 first	 half	 as	 a	 result	 of	 weakened	 demand	 from	 the	 oil	
&	 gas	 sector	 as	 many	 major	 projects	 were	 delayed.
Our	 Hi-Tech	 Coatings	 operation	 in	 Perth,	 Western	
Australia,	 reported	 a	 small	 loss	 for	 the	 year.	 This	 was	
primarily	 due	 to	 the	 costs	 associated	 with	 a	 management	
restructure	 in	 2009,	 and	 trading	 in	 the	 first	 quarter	 of	
2010	 has	 been	 encouraging.	
Our	 operation	 in	 Port	 Klang,	 Malaysia,	 which	 we	 opened	
in	 late	 2007,	 has	 seen	 a	 great	 improvement	 year	 on	 year,	
and	 will	 benefit	 from	 new	 levels	 of	 capital	 investment	 in	
the	 oil	 extraction	 industries	 in	 that	 region.
Both	 our	 Australian	 and	 Malaysian	 coating	 facilities	
are	 now	 accredited	 to	 ISO	 9001/2008	 and	 ISO	 14001,	
which	 are	 important	 factors	 in	 our	 relationship	 with	
multinational	 suppliers	 to	 the	 oil	 &	 gas	 industry.	
We	 are	 generally	 the	 preferred	 supplier	 of	 the	 advanced	
surface	 coatings	 used	 by	 the	 oil	 &	 gas	 industry	 to	 protect	
the	 sophisticated	 drilling,	 production	 and	 transmission	
equipment	 utilised	 to	 harvest	 hydrocarbons	 from	 all	 over	
the	 world	 in	 the	 harshest	 of	 conditions	 and	 extremes	 of	
climate.
Our	 automotive	 surface	 coatings	 business	 in	 the	 UK	 also	
suffered	 in	 the	 downturn.	 Despite	 having	 centralised	 all	
zinc	 and	 alloy	 electroplating	 onto	 one	 site	 in	 Coventry	
during	 2008,	 the	 conditions	 in	 UK	 manufacturing	 proved	
to	 be	 so	 severe	 that	 we	 continued	 to	 suffer	 significant	
operating	 losses	 in	 the	 business.
We	 undertook	 a	 substantial	 restructure	 and	 cost	
reduction	 programme	 at	 our	 Coventry	 operation	 in	 2009	
and	 the	 unit	 is	 trading	 considerably	 better	 than	 at	 this	
time	 last	 year.	
ASTEC	 Dalian	 in	 Eastern	 China	 performed	 well	 and	
profitably	 in	 2009.	 The	 future	 for	 this	 business	 looks	
promising,	 on	 the	 back	 of	 a	 recovering	 US	 automotive	
market	 and	 the	 continuing	 expansion	 of	 the	 Chinese	
domestic	 automotive	 market.
We have successfully won business 
from competitors who have struggled 
in the recent financial climate
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page 5
2009
Annual Report and Accounts
TAM International	 –	 Construction	 Chemicals	
We	 have	 made	 significant	 progress	 in	 developing	 our	
construction	 chemicals	 business	 in	 the	 three	 years	 that	
we	 have	 controlled	 TAM.	
During	 that	 time,	 we	 have	 built	 TAM	 into	 a	 well-respected	
brand	 leader	 in	 construction	 chemicals	 and	 broadened	 its	
potential	 marketplace	 with	 the	 creation	 of	 a	 Tunneling	 &	
Mining	 division.	 This	 now	 supplies	 our	 niche	 products	 to	
many	 of	 the	 major	 underground	 projects	 in	 the	 regions	
where	 we	 already	 have	 sales	 or	 manufacturing	 operations.	
The	 business	 performed	 better	 in	 the	 second	 half	 of	 the	 year,	
although	 not	 all	 locations	 are	 yet	 profitable	 at	 the	 operating	
level.	 This	 is	 a	 result	 of	 major	 infrastructure	 projects	 being	
delayed	 in	 Hong	 Kong	 and	 Taiwan	 and	 difficult	 economic	
conditions	 continuing	 to	 prevail	 in	 the	 UK.
Australia	 was	 less	 affected	 by	 the	 global	 economic	
recession	 and	 this,	 coupled	 with	 strengthening	 the	
management	 team,	 saw	 the	 TAM	 Australia	 business	
return	 to	 profit	 in	 the	 year.
Norman Hay Engineering	 –	 Chemical	 Process	 Plant
Following	 a	 strong	 performance	 in	 2009	 with	 continuing	
profitability,	 the	 year	 ended	 with	 a	 record	 order	 book,	
which	 will	 provide	 substantial	 growth	 for	 the	 business	
during	 2010	 and	 2011.
As	 a	 manufacturer	 of	 bespoke	 process	 plants,	 primarily	
for	 the	 aerospace	 and	 automotive	 markets,	 our	 chemical	
engineering	 group	 combines	 elements	 of	 both	 service-
related	 and	 product-led	 businesses.
As	 such,	 we	 have	 been	 able	 to	 develop	 the	 business	
internationally,	 with	 the	 majority	 of	 plant	 installations	 in	
the	 next	 two	 years	 being	 outside	 of	 the	 UK.	 This	 makes	
Norman	 Hay	 Engineering	 the	 latest	 of	 our	 businesses	 to	
benefit	 from	 our	 expansion	 into	 international	 markets.
During	 2009,	 we	 were	 awarded	 a	 number	 of	 significant	
overseas	 contracts:
 In	 March	 we	 were	 selected	 to	 supply	 and	 install	 a	
large	 Repair	 and	 Overhaul	 facility	 for	 aircraft	 landing	
gear	 in	 Saudi	 Arabia.
 In	 May	 we	 secured	 a	 major	 contract	 in	 Turkey	 for	
an	 NDT	 booth	 system	 to	 carry	 out	 dye	 penetrant	
application	 and	 inspection	 at	 the	 critical	 stage	 in	 the	
repair	 and	 overhaul	 of	 aircraft	 engines.
 In	 December	 we	 were	 proud	 to	 be	 awarded	 our	
largest	 ever	 single	 contract	 –	 an	 order	 from	
Rolls-Royce	 for	 process	 plant	 and	 equipment	 to	
be	 installed	 in	 Singapore	 during	 2011.
Staff
I	 would	 like	 to	 pay	 tribute	 to	 all	 of	 our	 Group	 staff,	 who	
have	 been	 operating	 under	 considerable	 pressure	 while	
our	 businesses	 have	 been	 adjusting	 to	 changing	 world	
economic	 conditions.	
Their	 professionalism,	 dedication	 and	 flexibility	 has	
been	 instrumental	 in	 recovering	 the	 Group’s	 operating	
profitability	 in	 a	 short	 period	 of	 time.
O u tlook
In	 last	 year’s	 annual	 statement,	 I	 said	 that	
our	 efforts	 were	 being	 carefully	 targeted	 at	
our	 most	 significant	 sales	 opportunities.	
TAM	 International,	 our	 construction	
chemicals	 division,	 has	 been	 working	
closely	 in	 2009	 with	 the	 Normet	 Group,	
manufacturers	 of	 specialist	 underground	
construction	 machinery.	 This	 co-operation	
has	 led	 to	 a	 E6.2	 million	 machinery	 deal	 in	
Hong	 Kong,	 combined	 with	 the	 supply	 of	
construction	 chemicals.	 A	 similar	 deal	 has	
also	 been	 arranged	 in	 Taiwan	 and	 we	 plan	 to	
build	 further	 on	 this	 successful	 partnership	
in	 other	 markets.	
The	 synergies	 between	 TAM	 and	 Normet	 led	
to	 the	 formation	 of	 a	 global	 partnership	 in	
April	 2010,	 with	 Normet	 acquiring	 40%	 of	
the	 issued	 share	 capital	 of	 TAM.	 Normet’s	
global	 reach	 and	 expertise	 will	 enable	 us	 to	
rapidly	 expand	 TAM’s	 client	 base.	 We	 believe	
this	 significant	 move	 will	 be	 beneficial	 for	
the	 Group,	 our	 clients	 and	 our	 shareholders.	
We	 are	 particularly	 pleased	 with	 the	
progress	 and	 prospects	 for	 our	 Ultraseal	 and	
Armourcote	 businesses	 as	 the	 market	 in	
mainland	 China	 continues	 to	 pick	 up.	
I	 expect	 that	 the	 Group’s	 trading	
performance	 will	 continue	 to	 improve	
and	 will	 be	 further	 enhanced	 as	 the	 world	
economy	 returns	 to	 growth.
Peter L Hay
Chairman
19	 May	 2010 2009
Annual Report and Accounts
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page 6
£4.0m
In	 Q1	 2009,	 we	 successfully	 secured	 a	
£4m	 contract	 for	 an	 aerospace	 process	
facility	 to	 be	 installed	 in	 the	 Kingdom	
of	 Saudi	 Arabia.
The	 new	 chemical	 processing	 shop	 for	
Messier	 Services	 is	 for	 the	 repair	 and	
overhaul	 of	 aircraft	 landing	 gears	 for	
both	 narrow	 and	 wide	 bodied	 aircraft.
This	 turnkey	 project	 includes	 all	 process	
tanks	 and	 solution	 conditioning	
equipment,	 material	 handling	 and	
effluent	 treatment	 systems,	 as	 well	 as	
providing	 ongoing	 service	 support. 2009
Annual Report and Accounts
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page 7
Introduction
2009	 turned	 out	 to	 be	 a	 challenging	 year	 for	 the	 global	
economy,	 with	 many	 sectors	 affected	 by	 harsh	 trading	
conditions.	 The	 markets	 in	 which	 Norman	 Hay	 operates	
were	 no	 exception.	
The	 dramatic	 reduction	 in	 the	 automotive	 sector,	 and	
reduced	 demand	 from	 the	 oil	 &	 gas	 industries	 in	 the	
second	 half	 of	 the	 year	 had	 a	 significant	 impact	 on	
performance.
However,	 we	 responded	 swiftly	 and	 decisively	 to	 the	
worldwide	 economic	 downturn	 by	 restructuring	 and	
adjusting	 our	 plans	 to	 meet	 the	 changing	 operating	
environment.	
Underpinning	 this	 was	 a	 reduction	 of	 the	 cost	 base	 in	 our	
existing	 operations	 in	 order	 to	 reflect	 changed	 market	
conditions.	 Careful	 financial	 management	 within	 our	
businesses	 coupled	 with	 firm	 control	 of	 expenditure	 and	
Group	 resources	 ensured	 that	 we	 were	 able	 to	 adjust	 to	
these	 demanding	 economic	 conditions.	
These	 strong	 controls	 have	 also	 enabled	 us	 to	 continue	 to	
invest	 in	 new	 opportunities	 where	 they	 arise	 and,	 whilst	
our	 recent	 investments	 have	 led	 to	 an	 increase	 in	 our	
overhead	 base,	 these	 additional	 costs	 have	 been	 focused	
and	 tightly	 controlled.
The	 majority	 of	 our	 operations	 were	 affected	 by	 the	
decline	 in	 world	 markets.	 Conditions	 started	 to	 ease	
during	 the	 second	 half	 of	 2009	 and	 this,	 combined	 with	
the	 actions	 we	 had	 taken	 in	 the	 first	 half,	 saw	 first	 half	
trading	 losses	 of	 £0.5m	 reversed	 to	 a	 trading	 profit	 of	
£0.4m	 in	 the	 second	 half.
Operations
Norman	 Hay	 provides	 products	 and	 services	 to	 customers	
across	 diverse	 markets	 and	 is	 focused	 on	 key	 global	
market	 sectors	 through	 its	 main	 brands.
Ultraseal –	 Impregnation	 Sealants 
Ultraseal	 was	 particularly	 impacted	 by	 the	 decline	 in	 the	
automotive	 sector,	 and	 first	 half	 results	 reflected	 the	
massive	 global	 decline	 in	 vehicle	 production	 that	 hit	 hard	
in	 the	 last	 quarter	 of	 2008.	
In	 the	 first	 half	 of	 2009,	 sales	 were	 down	 46%	 on	 the	 first	
half	 of	 the	 previous	 year,	 but	 the	 second	 half	 was	 much	
more	 encouraging,	 with	 business	 beginning	 to	 recover	 to	
more	 normal	 levels	 in	 most	 markets.
This	 rise	 in	 revenues	 in	 the	 second	 half	 of	 2009	 resulted	
in	 full	 year	 sales	 being	 down	 23%	 on	 the	 previous	 year,	 a	
marked	 improvement	 on	 the	 trend	 in	 the	 first	 half.
In	 order	 to	 manage	 this	 decline	 in	 business,	 careful	 cost-
management	 plans	 were	 put	 in	 place.	
In	 North	 America,	 with	 automotive	 demand	 beginning	
to	 fall	 from	 midway	 through	 2008	 as	 the	 global	 recession	
made	 its	 mark,	 we	 restructured	 our	 USA	 operation	 to	
help	 offset	 the	 lower	 levels	 of	 business.	
Automotive	 business	 in	 North	 America	 recovered	 in	 the	
latter	 part	 of	 2009,	 reflecting	 wider	 economic	 conditions,	
and	 this	 trend	 was	 repeated	 in	 Europe	 and	 the	 Asia-
Pacific	 region.
Ultraseal’s	 strategy	 of	 diversifying	 its	 operations	
geographically,	 making	 it	 less	 dependent	 on	 Western	
economies,	 has	 certainly	 helped	 the	 business	 through	
this	 tumultuous	 period.
We	 are	 cautiously	 optimistic	 for	 the	 business	 in	 2010,	
as	 there	 are	 signs	 of	 a	 return	 to	 previous	 levels	 of	
automotive	 manufacturing.	 It	 remains	 to	 be	 seen	 if	 this	
resurgence	 is	 sustainable,	 but	 Ultraseal	 International	
has	 focused	 and	 structured	 its	 worldwide	 operations	 to	
take	 advantage	 of	 any	 new	 opportunities	 that	 arise	 in	 its	
global	 markets.	
Chief Executive ’ s Business Review
Supplying high technology chemical 
systems, combined with bespoke 
engineering solutions, for the 
aerospace, automotive, oil & gas and 
construction industries around the 
world is proving to be an increasingly 
successful formula for the Group
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2009
Annual Report and Accounts
page 8 page 8 page 8
Chief Executive ’ s Business Review continued
Armourcote –	 Surface	 Coatings
Armourcote	 serves	 a	 number	 of	 markets	 including	
Automotive,	 Engineering	 and	 Oil	 &	 Gas.
The	 UK	 businesses	 focused	 on	 the	 automotive	 sector	
were	 significantly	 impacted	 by	 the	 recession.	 This	
has	 only	 recently	 begun	 to	 abate,	 albeit	 at	 a	 modest	
pace.	 The	 largest	 reduction	 was	 in	 our	 Coventry	 based	
electroplating	 operation	 which	 achieved	 only	 46%	 of	 its	
expected	 revenue.	
In	 October,	 we	 acquired	 business	 from	 a	 competitor,	
which	 has	 helped	 to	 reduce	 the	 Coventry	 unit’s	
dependence	 on	 the	 UK	 automotive	 sector.
Also,	 during	 the	 year	 the	 Group	 disposed	 of	 its	 remaining	
wet	 processing	 operations	 on	 our	 main	 Coventry	 site.	
The	 consideration	 receivable	 from	 this	 disposal	 is	 based	
upon	 the	 future	 sales	 of	 the	 purchaser.	 There	 is	 no	 set	
termination	 date	 for	 this	 agreement.
The	 Leeds,	 East	 Kilbride	 and	 Irvine	 operations	 are	
predominantly	 focused	 on	 the	 oil	 &	 gas	 markets.	 These	
businesses	 performed	 strongly	 in	 the	 first	 half,	 with	
turnover	 up	 8%	 on	 the	 previous	 year.	
However,	 conditions	 slowed	 in	 the	 second	 half	 and	 the	
reduction	 in	 revenues	 has	 continued	 into	 2010.
The	 impact	 of	 the	 recession	 on	 the	 overseas	 operations	
has	 been	 varied	 as	 follows:
 The	 operation	 in	 Port	 Klang,	 Malaysia	 moved	 into	
profit	 in	 early	 2010.	
 Hi-Tech	 Coatings	 in	 Perth,	 Western	 Australia,	 saw	
year	 on	 year	 revenue	 fall	 by	 18%.	 As	 a	 consequence	 of	
the	 decline	 in	 revenue,	 a	 reduction	 in	 management	
overheads	 was	 undertaken	 to	 provide	 a	 lower	 cost	
base	 for	 the	 future.
 ASTEC	 Dalian	 in	 Eastern	 China,	 where	 we	 manage	 and	
operate	 a	 customer’s	 in-house	 zinc	 plating	 operation,	
performed	 well	 and	 was	 profitable	 in	 2009.	 Volumes	
have	 increased	 considerably	 in	 recent	 months	 on	
the	 back	 of	 a	 recovery	 in	 the	 US	 automotive	 market	
and	 continuing	 expansion	 of	 the	 Chinese	 domestic	
market.	
	 We	 are	 currently	 exploring	 further	 opportunities	 to	
roll	 out	 this	 concept	 of	 managing	 our	 customers’	 in-
house	 processing	 plants	 on	 a	 global	 basis.
TAM International	 –	 Construction	 Chemicals
TAM	 has	 made	 significant	 progress	 since	 it	 became	 part	
of	 the	 Norman	 Hay	 Group	 three	 years	 ago.	 Turnover	 grew	
by	 15%	 in	 2009,	 although	 this	 was	 below	 our	 forecasts.	
Delays	 in	 infrastructure	 projects	 in	 Hong	 Kong	 and	
Taiwan	 have	 impacted	 profitability,	 resulting	 in	 an	 overall	
loss	 for	 the	 year.	
Despite	 the	 global	 recession,	 we	 have	 continued	 to	 invest	
in	 the	 geographical	 expansion	 of	 TAM,	 which	 included	
the	 setting	 up	 of	 a	 subsidiary	 in	 Indonesia	 to	 service	 the	
large	 gold	 mining	 industry	 in	 the	 region.	
In	 the	 latter	 part	 of	 2009	 TAM	 International	 worked	 with	
Normet,	 a	 leader	 in	 the	 supply	 of	 equipment	 and	 vehicles	
for	 mining	 and	 underground	 construction,	 which	 proved	
to	 be	 mutually	 beneficial.	
As	 a	 consequence	 of	 this	 successful	 working	 relationship,	
we	 have	 now	 formed	 a	 strategic	 alliance	 with	 Normet	
who,	 in	 April	 2010,	 purchased	 30%	 of	 Norman	 Hay’s	
interest	 in	 TAM’s	 issued	 share	 capital	 for	 £2.4m,	 with	
the	 possibility	 that	 Normet	 can	 (at	 their	 option)	 acquire	
100%	 of	 the	 share	 capital	 in	 2014.	 The	 consideration	 for	
this	 would	 be	 based	 upon	 a	 multiple	 of	 six	 times	 profit	 of	
the	 business	 in	 the	 year	 immediately	 preceding	 the	 sale.	
Under	 the	 call	 option,	 the	 minimum	 amount	 due	 for	 the	
remainder	 of	 Norman	 Hay’s	 equity	 in	 TAM	 is	 £5.1m	 and	
the	 maximum	 is	 £14.25m.
The	 terms	 of	 this	 transaction	 mean	 that	 from	 the	 date	 of	
the	 initial	 sale,	 TAM	 will	 no	 longer	 be	 accounted	 for	 as	 a	
subsidiary.
The	 partnership	 brings	 together	 the	 construction	
chemical	 consumables	 of	 TAM	 with	 the	 international	
manufacture	 and	 enhanced	 distribution	 of	 Normet’s	
application	 hardware.	 Both	 companies	 share	 a	 common	
global	 marketplace	 in	 construction	 solutions	 for	
waterproofing,	 injection	 and	 repair	 of	 structures	 together	
with	 major	 construction	 projects	 in	 civil	 engineering,	
tunneling	 and	 mining	 and	 we	 believe	 that	 this	 will	
considerably	 strengthen	 both	 of	 our	 companies.	
This	 new	 partnership	 should	 help	 to	 accelerate	 the	
growth	 of	 the	 TAM	 business	 and	 we	 look	 forward	 to	 a	
successful	 working	 alliance	 with	 Normet.
Norman Hay’s position is strong and 
the actions we have taken to improve 
efficiency and diversify in to growth 
markets will leave us well placed to 
benefit from economic recovery
“
” 17666	 20/05/2010	 Proof	10
page 9
2009
Annual Report and Accounts
Norman Hay Engineering –	 Chemical	 Process	 Plant
2009	 was	 a	 very	 successful	 year	 for	 Norman	 Hay	
Engineering,	 with	 a	 record	 value	 of	 orders	 received	 for	
its	 Plasticraft	 and	 Ardrox	 branded	 chemical	 process	
equipment.	
During	 the	 year	 we	 have	 continued	 to	 build	 and	 develop	
the	 Company’s	 reputation	 as	 a	 major	 supplier	 to	 the	
world’s	 aerospace	 market.
The	 majority	 of	 equipment	 is	 utilised	 in	 the	 aerospace	
industry’s	 original	 equipment	 manufacture	 (OEM)	 and	
maintenance,	 repair	 and	 overhaul	 (MRO)	 operations.	 Two	
major	 contracts	 in	 each	 sector	 formed	 the	 basis	 for	 the	
2009	 success.
Through	 the	 Company’s	 achievements	 in	 the	 year,	
Norman	 Hay	 Engineering	 has	 secured	 a	 record	 order	
book	 for	 2010,	 including	 projects	 in	 Saudi	 Arabia	 and	
Singapore.	
This	 provides	 us	 with	 an	 enviable	 position	 of	 continuity	
and	 stability	 throughout	 2010	 and	 2011.	 This	 will	 	
enable	 the	 business	 to	 continue	 to	 strengthen	 as	 a	
leading	 player	 in	 the	 UK	 and	 global	 marketplace.
During	 the	 first	 two	 quarters	 of	 2010,	 we	 have	 	
continued	 to	 enjoy	 a	 strong	 level	 of	 enquiries	 for	 other	
major	 installations.
Cash
Despite	 challenging	 trading	 conditions	 in	 2009,	 the	
Group	 generated	 a	 positive	 cash	 flow	 and	 reduced	 total	
bank	 borrowings	 to	 £0.8m	 from	 £1.0m	 at	 the	 end	 of	 the	
previous	 year.
Following	 the	 part	 disposal	 of	 TAM	 International	 in	 April	
2010	 we	 are	 currently	 cash	 positive.
Dividends
The	 level	 of	 dividend	 payment	 to	 shareholders	 is	 a	
reflection	 of	 the	 Board’s	 confidence	 in	 the	 Group.
Having	 maintained	 the	 half	 year	 payout	 at	 the	 2008	
level,	 Board	 members	 felt	 that	 recent	 trading	 conditions	
enabled	 a	 second	 interim	 dividend	 of	 2.3p	 per	 share	 to	 be	
paid,	 giving	 a	 total	 dividend	 for	 the	 year	 of	 4.3p.	
The	 second	 interim	 dividend	 was	 paid	 in	 order	 to	 bring	
the	 income	 forward	 into	 the	 2009/10	 tax	 year	 and	
replaces	 the	 final	 dividend.
O u tlook
Supplying	 high	 technology	 chemical	 systems,	
combined	 with	 bespoke	 engineering	
solutions,	 for	 the	 aerospace,	 automotive,	 oil	
&	 gas	 and	 construction	 industries	 around	
the	 world	 is	 proving	 to	 be	 an	 increasingly	
successful	 formula	 for	 the	 Group.
Although	 we	 expect	 challenging	 conditions	
to	 continue	 in	 2010,	 Norman	 Hay’s	 position	
is	 strong	 and	 the	 actions	 we	 have	 taken	
to	 improve	 efficiency	 and	 to	 diversify	 our	
product-led	 businesses	 into	 growth	 markets	
will	 leave	 us	 well	 placed	 to	 benefit	 from	
economic	 recovery.	
Victor P Bellanti
Chief	 Executive
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2009
Annual Report and Accounts
page 10 page 10
Directors and Executive T eam
Executive Directors
Peter L Hay
Chairman
Peter	 Hay	 was	 appointed	 to	 the	 Board	 in	 1977.	 He	 was	
Group	 Technical	 Director	 for	 five	 years	 and	 subsequently	
Group	 Managing	 Director	 for	 eleven	 years.
Non-Executive Directors
Anthony M Hay
Non-Executive	 Director
Anthony	 Hay	 has	 been	 a	 Director	 of	 the	 Company	 since	
1964.	 He	 was	 Group	 Sales	 &	 Marketing	 Director	 before	
serving	 as	 Chairman	 from	 1984	 to	 1993.
Victor P Bellanti
Chief	 Executive
Victor	 Bellanti	 joined	 Norman	 Hay	 plc	 in	 1993	 as	
Financial	 Director	 and	 was	 appointed	 Chief	 Executive	 in	
March	 2000.
David W Miller
Non-Executive	 Director
David	 Miller	 was	 Chief	 Operating	 Officer	 for	 seven	 years	
before	 he	 retired	 at	 the	 end	 of	 2006.	 He	 rejoined	 the	
Board	 as	 a	 Non-Executive	 Director	 in	 February	 2007.
Executive Team
Brigid Cattle
Company	 Secretary	 –	 	
Norman	 Hay	 plc
Brigid	 Cattle	 was	 appointed	 Company	 Secretary		 of	
Norman	 Hay	 plc	 in	 September	 2000.	 Previously	 she	 was	
Human	 Resources	 Director	 of	 Ultraseal	 International.
Gary Lloyd
Managing	 Director	 –	 	
Ultraseal	 International
Gary	 Lloyd	 joined	 Ultraseal	 in	 1988	 and	 was	 appointed	
Managing	 Director	 in	 1996.	 He	 is	 responsible	 for	 all	
Ultraseal’s	 global	 operations.
Martyn Crowther
Managing	 Director	 –	 	
Armourcote
Martyn	 Crowther	 joined	 the	 Leeds	 based	 business	 in	
1974.	 He	 was	 appointed	 Operations	 Director	 in	 1990	
and	 promoted	 to	 Managing	 Director	 of	 Armourcote’s	 UK	
operations	 in	 2008.
Lee Shelton
Director	 of	 International	 Business	 Development	 –	
Norman	 Hay	 plc
Lee	 Shelton	 joined	 Ultraseal	 in	 1999	 and	 was	 previously	
based	 in	 Japan	 as	 Asia-Pacific	 Director.	 Following	 his	
promotion	 in	 2008	 he	 is	 now	 based	 in	 Hong	 Kong.
Nick Ogden
Group	 Financial	 Controller	 –	 	
Norman	 Hay	 plc
Nick	 Ogden,	 who	 is	 also	 Finance	 Director	 of	 Surface	
Technology	 plc,	 joined	 Norman	 Hay	 plc	 in	 2008	 from	 	
BDO	 LLP .
Mike Priddle
Managing	 Director	 –	 	
Norman	 Hay	 Engineering
Mike	 Priddle	 joined	 Ultraseal	 in	 March	 1987	 and	 was	
appointed	 Engineering	 Director	 in	 1998.	 In	 2007	 he	
was	 promoted	 to	 Managing	 Director	 of	 Norman	 Hay	
Engineering.
Ronnie Ross
Managing	 Director	 –	 	
Surface	 Technology	 International
Ronnie	 Ross	 joined	 the	 East	 Kilbride	 surface	 finishing	
business	 in	 1986.	 In	 2008	 he	 was	 promoted	 to	 Managing	
Director	 of	 Surface	 Technology	 International	 with	
operations	 in	 Scotland,	 Malaysia	 and	 Perth	 in	 Western	
Australia.
Martin Robbins
Managing	 Director	 –	 	
TAM	 International
Martin	 Robbins	 is	 based	 in	 Hong	 Kong	 and	 is	 	
responsible	 for	 TAM’s	 global	 operations.		 Martin	 has	 a	
wealth	 of	 experience	 in	 the	 construction	 industry. 2009
Annual Report and Accounts
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page 11 page 11
Report of the Directors
The	 Directors	 have	 pleasure	 in	 submitting	 their	 annual	
report	 and	 audited	 financial	 statements	 for	 the	 year	
ended	 31	 December	 2009.
Results and dividends
The	 Consolidated	 Statement	 of	 Comprehensive	 Income	 	
is	 set	 out	 on	 page	 16	 and	 shows	 revenue	 for	 the	 year	 	
of	 £26.2m	 and	 profits	 on	 ordinary	 activities	 before	 tax	 	
of	 £0.9m.
Dividends	 paid	 in	 the	 year	 are	 shown	 in	 Note	 8	 of	 the	
financial	 statements.
Principal activities and business review
The	 principal	 activities	 of	 the	 Group	 are	 shown	 on	 page	 2.	 	
The	 principal	 activity	 of	 the	 Company	 is	 a	 holding	
Company.	 The	 business	 information	 on	 pages	 4	 and	 5	
(Chairman’s	 Statement)	 and	 Chief	 Executive’s	 Business	
Review	 on	 pages	 7	 to	 9	 provide	 detailed	 information	
relating	 to	 the	 Group	 and	 the	 operation	 and	 development	
of	 the	 business	 for	 the	 year	 ended	 31	 December	 2009.
Principal risks and uncertainties
During	 the	 last	 year,	 the	 Group	 has	 continued	 to	 execute	
strategies	 to	 optimise	 business	 opportunities	 and	
minimise	 exposure	 to	 principal	 risks	 and	 uncertainties.
The	 economic	 conditions	 in	 financial	 markets	 have	 led	 to	
greater	 uncertainty,	 the	 impact	 of	 which	 is	 also	 discussed	
within	 the	 review	 on	 pages	 4	 and	 5	 and	 on	 pages	 7	 to	 9.	
The	 information	 contained	 in	 these	 pages	 summarises	
the	 actions	 that	 the	 Group	 has	 taken	 to	 tackle	 these	
uncertainties	 and	 to	 ensure	 that	 the	 Group	 is	 well	 placed	
to	 move	 forward	 in	 the	 next	 12	 months.
As	 the	 Group	 expands	 worldwide	 there	 is	 a	 potential	 risk	
of	 financial	 loss	 or	 damage	 to	 our	 reputation	 resulting	
from	 inadequate	 or	 failed	 internal	 processes	 and	 systems,	
or	 the	 actions	 of	 people	 or	 external	 events.	 The	 Group	
manages	 these	 potential	 risks	 through	 appropriate	
controls	 and	 loss	 mitigation	 actions.
Examples	 include:
 taking	 sufficient	 insurance	 cover,	 including	 business	
interruption;
 maintaining	 disaster	 recovery	 plans	 for	 all	 major	
sites;
 maintaining	 rigorous	 data	 back-up	 procedures;	
 carrying	 out	 a	 regular	 review	 of	 the	 principal	 suppliers	
and	 customers	 of	 the	 Group,	 and	 how	 each	 impacts	
on	 the	 Group’s	 business;
 regularly	 reviewing	 performance	 against	 budgets	 and	
forecasts;
 establishing	 clearly	 defined	 procedures	 for	 the	
authorisation	 of	 major	 new	 investments	 and	
commitments;	 and
 ensuring	 that	 exposure	 to	 foreign	 exchange	 is	
minimised	 through	 prompt	 payment	 of	 inter-Group	
current	 accounts,	 and	 forward	 contracting	 where	
applicable.
The	 Board	 and	 management	 teams	 continue	 to	 monitor	
potential	 risk	 areas	 and	 adjust	 tactical	 and	 strategic	 plans	
accordingly	 to	 protect	 our	 businesses.
Pro	 active	 working	 capital	 management	 and	 analysis	 of	
historic	 and	 anticipated	 trading	 patterns	 assist	 the	 Board	
in	 its	 decision	 making.	 Financial	 reviews	 are	 undertaken	
at	 Board	 and	 management	 levels	 to	 analyse	 and	
understand	 current	 and	 future	 results.
Our	 personnel	 are	 another	 key	 element	 and	 principal	 risk	
of	 managing	 the	 Group’s	 growth.	 It	 is	 important	 that	 the	
Group	 succeeds	 in	 attracting,	 developing	 and	 retaining,	
qualified,	 experienced	 and	 motivated	 staff	 worldwide.
The	 Board	 of	 Directors	 of	 Norman	 Hay	 accepts	 its	
collective	 responsibility	 in	 providing	 health	 and	 safety	
leadership	 and	 regard	 the	 effective	 management	 of	
health	 and	 safety	 risks	 as	 key	 to	 the	 fulfilment	 of	 the	
Group’s	 business	 objectives.
Financial Instruments
Details	 of	 the	 use	 of	 Financial	 Instruments	 and	 Financial	
Instruments	 Risk	 Management	 are	 contained	 in	 Note	 31	
of	 the	 Financial	 Statements.
Directors
The	 Directors	 of	 the	 Company,	 shown	 on	 page	 10,	 held	
office	 throughout	 the	 year.	 Mr	 Anthony	 Hay	 retires	 by		
rotation	 and,	 being	 eligible,	 offers	 himself	 for	 re-election. 17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
page 12 page 12
Report of the Directors continued
Directors’ interests
Interest in shares
The	 interests	 of	 the	 Directors	 and	 their	 immediate	
families	 in	 the	 share	 capital	 of	 the	 Company	 are	 set	 out	
below:
	 1	 January	 31 	 December
	 2009	 2009
	 Beneficial	 Beneficial
P	 L	 Hay	 2,210,870	 2,210,870
A	 M	 Hay	 1,108,170	 1,108,170
D	 W	 Miller	 264,750	 269,750
V	 P	 Bellanti	 125,000	 125,000
The	 details	 of	 the	 Directors’	 interests	 in	 share	 options,	 are	
as	 follows:
Interest in share options
	 1	 January	 31 	 December
	 2009	 2009
P	 L	 Hay	 Approved
(a)
	 144,925	 144,925
V	 P	 Bellanti	 Approved
(a)
	 144,925	 144,925
P	 L	 Hay	 Approved
(b)
	 	 –	 32,000
V	 P	 Bellanti	 Approved
(b)
	 –	 32,000 	
P	 L	 Hay	 Unapproved
(c)
	 –	 388,075
V	 P	 Bellanti	 Unapproved
(c)
	 –	 588,075
P	 L	 Hay	 Unapproved
(d)
	 420,075	 –
V	 P	 Bellanti	 Unapproved
(d)
	 620,075	 –
(a)
	 	 The 	 approved	 options	 are	 exercisable	 between	 5	 July	
2009	 and	 4	 July	 2016	 at	 69p	 per	 share.
(b)
	 	 The 	 approved	 options	 are	 exercisable	 between		
1	 December	 2012	 and	 30	 November	 2019	 at	 62.5p		
per	 share.
(c)
	 	 The 	 unapproved	 options	 are	 exercisable	 between	
1	 December	 2009	 and	 30	 November	 2019	 at	 62.5p	
per	 share	 upon	 the	 share	 price	 achieving	 150p	 or	 a	
change	 in	 control.
(d)
	 	 These 	 unapproved	 options	 were	 replaced	 by	 (b)	 and	
(c)	 during	 the	 year.
At	 31	 December	 2009	 the	 middle	 market	 price	 of	 the	
ordinary	 shares	 was	 64p	 per	 share,	 and	 the	 range	 during	
the	 year	 was	 between	 55p	 and	 88.5p.
	
Substantial shareholdings
At	 31	 December	 2009,	 the	 Company	 had	 been	 notified	 of	
the	 following	 holdings	 in	 the	 issued	 share	 capital	 of	 the	
Company
	 Ordinary
	 Shares	 %
Mr	 P	 L	 Hay	 2,210,870	 14.92
Mrs	 G	 Luker	 1,476,571	 9.96
Mr	 A	 M	 Hay	 1,108,170	 7.48
Miss	 C	 Bewsher	 747,161	 5.04
Mr	 D	 Bewsher	 746,511	 5.03
Westcombe	 Investments	 518,500	 3.50
Mr	 N	 Hendy	 500.000	 3.37
Miss	 A	 Hendy	 468,000	 3.16
Mr	 Hendy	 and	 Miss	 Hendy	 may	 be	 considered	 associates	
of	 Westcombe	 Investments.	 These	 three	 shareholders	 do	
not	 consider	 themselves	 to	 be	 a	 concert	 party	 under	 the	
rules	 of	 the	 Takeover	 Panel.	 However,	 they	 consider	 that	
they	 may	 be	 deemed	 to	 be	 acting	 in	 concert	 by	 certain	
regulatory	 bodies.
Save	 as	 disclosed,	 no	 other	 person	 or	 company	 has	 a	
material	 interest	 in	 the	 shares	 of	 the	 Company	 of	 3%	
or	 more	 or,	 being	 an	 investment	 manager,	 interests	
aggregating	 to	 10%	 or	 more.
Creditors payment policy
The	 Group’s	 policy	 for	 all	 suppliers	 is	 to	 fix	 terms	 of	
payment	 when	 agreeing	 the	 terms	 of	 each	 business	
transaction,	 to	 ensure	 the	 supplier	 is	 aware	 of	 those	
terms	 and	 to	 abide	 by	 the	 agreed	 terms	 of	 payment.	 At	
31	 December	 2009	 creditors	 represented	 49	 days	 (2008:	
54	 days)	 of	 purchases	 for	 the	 year.
Indemnity cover
Third	 party	 indemnity	 cover	 for	 the	 Directors	 was	 in	 force	
during	 the	 year,	 up	 to	 and	 including	 the	 year	 end	 date	
and	 the	 date	 of	 this	 report.	 2009
Annual Report and Accounts
17666	 20/05/2010	 Proof	10
page 13 page 13
Report of the Directors continued
Employees
The	 Directors	 place	 considerable	 value	 on	 the	
involvement	 of	 employees	 and	 recognise	 the	 importance	
of	 communicating	 effectively	 on	 matters	 which	 affect	
their	 current	 and	 future	 interests.	 This	 communication	
is	 achieved	 through	 regular	 meetings	 at	 local	 operating	
level	 and	 through	 informal	 briefing	 sessions.
The	 Group’s	 policy	 is	 to	 ensure	 that,	 as	 far	 as	 is	
reasonably	 practicable,	 there	 is	 a	 working	 environment	
which	 will	 minimise	 the	 risk	 to	 health	 and	 safety	 of	 its	
employees	 and	 those	 persons	 who	 are	 authorised	 to	 be	
on	 its	 premises.
The	 Group	 continues	 to	 give	 full	 and	 fair	 consideration	
to	 applications	 for	 employment	 from	 disabled	 persons,	
having	 regard	 to	 their	 particular	 aptitudes	 and	 abilities.	 If	
an	 employee	 becomes	 disabled,	 the	 Group	 endeavours	 to	
continue	 his	 or	 her	 employment	 if	 this	 is	 practicable	 and,	
in	 appropriate	 cases,	 special	 training	 may	 be	 given.
Donations
Donations	 for	 charitable	 purposes	 during	 the	 year	 were	
£470	 (2008:	 £1,155).	 No	 political	 contributions	 were	
made.
Land and buildings
It	 is	 likely	 that	 the	 open	 market	 value	 of	 our	 freehold	 land	
and	 buildings	 is	 significantly	 higher	 than	 the	 recorded	
carrying	 value.	 No	 valuation	 has	 been	 undertaken	 that	
allows	 us	 to	 quantify	 this	 difference.
Subsequent events
In	 April	 2010,	 the	 Group	 disposed	 of	 30%	 of	 its	
investment	 in	 TAM	 International	 Group	 Holdings	 Limited,	
further	 information	 relating	 to	 this	 disposal	 is	 contained	
within	 Note	 28	 of	 the	 financial	 statements.
Going Concern
The	 Directors	 have	 reviewed	 the	 latest	 forecasts	 prepared	
by	 all	 of	 the	 Group’s	 companies	 and	 divisions	 and	 these	
demonstrate	 that	 the	 Group	 will	 remain	 a	 going	 concern	
for	 the	 foreseeable	 future.
Auditors
The	 Directors	 have	 taken	 all	 the	 necessary	 steps	 to	 make	
themselves	 aware	 of	 any	 information	 needed	 by	 the	
Company’s	 auditors	 for	 the	 purposes	 of	 their	 audit	 and	 to	
establish	 that	 the	 auditors	 are	 aware	 of	 that	 information.	
The	 Directors	 are	 not	 aware	 of	 any	 relevant	 audit	
information	 of	 which	 the	 auditors	 are	 unaware.
BDO	 LLP	 have	 expressed	 its	 willingness	 to	 continue	
in	 office	 and	 a	 resolution	 to	 reappoint	 them	 will	 be	
proposed	 at	 the	 forthcoming	 Annual	 General	 Meeting.
By	 order	 of	 the	 Board
Brigid M Cattle
Company	 Secretary
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2009
Annual Report and Accounts
page 14 page 14
Statement of Directors’ Responsibilities
Directors’ responsibilities
The	 Directors	 are	 responsible	 for	 preparing	 the	 annual	
report	 and	 the	 financial	 statements	 in	 accordance	 with	
applicable	 law	 and	 regulations.	
Company	 law	 requires	 the	 Directors	 to	 prepare	 financial	
statements	 for	 each	 financial	 year.	 Under	 that	 law	 the	
Directors	 have	 elected	 to	 prepare	 the	 Group	 financial	
statements	 in	 accordance	 with	 International	 Financial	
Reporting	 Standards	 (IFRSs)	 as	 adopted	 by	 the	 European	
Union.	
The	 Directors	 have	 chosen	 to	 prepare	 financial	
statements	 for	 the	 Company	 in	 accordance	 with	 United	
Kingdom	 Generally	 Accepted	 Accounting	 Practice.	
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	 and	 of	 the	 profit	 or	 loss	 of	 the	
Group	 for	 that	 period.	
The	 Directors	 are	 also	 required	 to	 prepare	 financial	
statements	 in	 accordance	 with	 the	 rules	 of	 the	 London	
Stock	 Exchange	 for	 companies	 trading	 securities	 on	 the	
Alternative	 Investment	 Market.	
In	 preparing	 these	 financial	 statements,	 the	 Directors	 are	
required	 to:
 select	 suitable	 accounting	 policies	 and	 then	 apply	
them	 consistently;
 make	 judgements	 and	 accounting	 estimates	 that	 are	
reasonable	 and	 prudent;
 for	 the	 Group	 financial	 statements,	 state	 whether	
they	 have	 been	 prepared	 in	 accordance	 with	 IFRSs	
as	 adopted	 by	 the	 European	 Union,	 subject	 to	 any	
material	 departures	 disclosed	 and	 explained	 in	 the	
financial	 statements;
 for	 the	 Company	 financial	 statements,	 state	 whether	
applicable	 UK	 Accounting	 Standards	 have	 been	
followed;	 and
 prepare	 the	 financial	 statements	 on	 a	 going	 concern	
basis	 unless	 it	 is	 inappropriate	 to	 presume	 that	 the	
Company	 will	 continue	 in	 business.
The	 Directors	 are	 responsible	 for	 keeping	 adequate	
accounting	 records	 that	 are	 sufficient	 to	 show	 and	
explain	 the	 Company’s	 transactions	 and	 disclose	 with	
reasonable	 accuracy	 at	 any	 time	 the	 financial	 position	
of	 the	 Company	 and	 enable	 them	 to	 ensure	 that	 the	
financial	 statements	 comply	 with	 the	 requirements	 of	
the	 Companies	 Act	 2006.	 They	 are	 also	 responsible	 for	
safeguarding	 the	 assets	 of	 the	 Company	 and	 hence	 for	
taking	 reasonable	 steps	 for	 the	 prevention	 and	 detection	
of	 fraud	 and	 other	 irregularities.
Website publication
The	 Directors	 are	 responsible	 for	 ensuring	 the	 annual	
report	 and	 the	 financial	 statements	 are	 made	 available	
on	 a	 website.	 Financial	 statements	 are	 published	 on	
the	 Company’s	 website	 in	 accordance	 with	 legislation	
in	 the	 United	 Kingdom	 governing	 the	 preparation	
and	 dissemination	 of	 financial	 statements,	 which	
may	 vary	 from	 legislation	 in	 other	 jurisdictions.	 The	
maintenance	 and	 integrity	 of	 the	 Company’s	 website	
is	 the	 responsibility	 of	 the	 Directors.	 The	 Directors’	
responsibility	 also	 extends	 to	 the	 ongoing	 integrity	 of	 the	
financial	 statements	 contained	 therein. 2009
Annual Report and Accounts
17666	 20/05/2010	 Proof	10
page 15 page 15
Independent Auditors’ Report
We	 have	 audited	 the	 financial	 statements	 of	 Norman	 Hay	
plc	 for	 the	 year	 ended	 31	 December	 2009	 which	 comprise	
the	 Consolidated	 Statement	 of	 Financial	 Position	 and	
Company	 Balance	 Sheet,	 the	 Consolidated	 Statement	
of	 Comprehensive	 Income,	 the	 Consolidated	 Cash	 Flow	
Statement,	 the	 Consolidated	 Statement	 of	 Changes	 in	
Equity	 and	 the	 related	 notes.	 The	 financial	 reporting	
framework	 that	 has	 been	 applied	 in	 the	 preparation	 of	
the	 Group	 financial	 statements	 is	 applicable	 law	 and	
International	 Financial	 Reporting	 Standards	 (IFRSs)	 as	
adopted	 by	 the	 European	 Union.	 The	 financial	 reporting	
framework	 that	 has	 been	 applied	 in	 preparation	 of	 the	
parent	 Company	 financial	 statements	 is	 applicable	 law	
and	 United	 Kingdom	 Accounting	 Standards	 (United	
Kingdom	 Generally	 Accepted	 Accounting	 Practice).	
This	 report	 is	 made	 solely	 to	 the	 Company’s	 members,	
as	 a	 body,	 in	 accordance	 with	 Chapter	 3	 of	 Part	 16	 of	
the	 Companies	 Act	 2006.	 Our	 audit	 work	 has	 been	
undertaken	 so	 that	 we	 might	 state	 to	 the	 Company’s	
members	 those	 matters	 we	 are	 required	 to	 state	 to	 them	
in	 an	 auditors’	 report	 and	 for	 no	 other	 purpose.	 To	 the	
fullest	 extent	 permitted	 by	 law,	 we	 do	 not	 accept	 or	
assume	 responsibility	 to	 anyone	 other	 than	 the	 Company	
and	 the	 Company’s	 members	 as	 a	 body	 for	 our	 audit	
work,	 for	 this	 report,	 or	 for	 the	 opinions	 we	 have	 formed.
Respective responsibilities of Directors and 
auditors
As	 explained	 more	 fully	 in	 the	 statement	 of	 Directors’	
responsibilities,	 the	 Directors	 are	 responsible	 for	
the	 preparation	 of	 the	 financial	 statements	 and	 for	
being	 satisfied	 that	 they	 give	 a	 true	 and	 fair	 view.	
Our	 responsibility	 is	 to	 audit	 the	 financial	 statements	
in	 accordance	 with	 applicable	 law	 and	 International	
Standards	 on	 Auditing	 (UK	 and	 Ireland).	 Those	 standards	
require	 us	 to	 comply	 with	 the	 Auditing	 Practices	 Board’s	
(APB’s)	 Ethical	 Standards	 for	 Auditors.	
Scope of the audit of the financial statements
An	 audit	 involves	 obtaining	 evidence	 about	 the	 amounts	
and	 disclosures	 in	 the	 financial	 statements	 sufficient	 to	
give	 reasonable	 assurance	 that	 the	 financial	 statements	
are	 free	 from	 material	 misstatement,	 whether	 caused	 by	
fraud	 or	 error.	 This	 includes	 an	 assessment	 of:	 whether	
the	 accounting	 policies	 are	 appropriate	 to	 the	 Group’s	
and	 the	 parent	 Company’s	 circumstances	 and	 have	
been	 consistently	 applied	 and	 adequately	 disclosed;	 the	
reasonableness	 of	 significant	 accounting	 estimates	 made	
by	 the	 Directors;	 and	 the	 overall	 presentation	 of	 the	
financial	 statements.
Opinion on financial statements
	 In	 our	 opinion:	
 the	 financial	 statements	 give	 a	 true	 and	 fair	 view	 of	
the	 state	 of	 the	 Group’s	 and	 the	 parent	 Company’s	
affairs	 as	 at	 31	 December	 2009	 and	 of	 the	 Group’s	
profit	 for	 the	 year	 then	 ended;
 the	 Group	 financial	 statements	 have	 been	 properly	
prepared	 in	 accordance	 with	 IFRSs	 as	 adopted	 by	 the	
European	 Union;
 the	 parent	 Company’s	 financial	 statements	 have	
been	 properly	 prepared	 in	 accordance	 with	 United	
Kingdom	 Generally	 Accepted	 Accounting	 Practice;	
and
 the	 financial	 statements	 have	 been	 prepared	 in	
accordance	 with	 the	 requirements	 of	 the	 Companies	
Act	 2006.
Opinion on other matters prescribed by the 
Companies Act 2006
In	 our	 opinion	 the	 information	 given	 in	 the	 Directors’	
report	 for	 the	 financial	 year	 31	 December	 2009	 for	 which	
the	 financial	 statements	 are	 prepared	 is	 consistent	 with	
the	 financial	 statements.	
Matters on which we are required to report by 
exception
We	 have	 nothing	 to	 report	 in	 respect	 of	 the	 following	
matters	 where	 the	 Companies	 Act	 2006	 requires	 us	 to	
report	 to	 you	 if,	 in	 our	 opinion:
 adequate	 accounting	 records	 have	 not	 been	 kept	
by	 the	 parent	 Company,	 or	 returns	 adequate	 for	 our	
audit	 have	 not	 been	 received	 from	 branches	 not	
visited	 by	 us;	 or
 the	 parent	 Company	 financial	 statements	 are	 not	 in	
agreement	 with	 the	 accounting	 records	 and	 returns;	
or
 certain	 disclosures	 of	 Directors’	 remuneration	
specified	 by	 law	 are	 not	 made;	 or
 we	 have	 not	 received	 all	 the	 information	 and	
explanations	 we	 require	 for	 our	 audit.
Thomas Lawton (senior statutory auditor)
For	 and	 on	 behalf	 of	 BDO	 LLP ,	 statutory	 auditor	
Birmingham	
United	 Kingdom
19	 May	 2010 page 16
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2009
Annual Report and Accounts
Consolidated Statement of Comprehensive Income 
for the year ended 31 December 2009 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 Note	 £000	 £000
Revenue	 	 	 	 	 2	 26,200	 27,001
Cost	 of	 sales	 	 	 	 	 	 (17,446)	 (17,175)
Gross profit	 	 	 	 	 	 8,754	 9,826
Distribution	 expenses	 	 	 	 	 (1,064)	 (1,036)
Administrative	 expenses	 	 	 	 	 (7,692)	 (6,857)
Other	 income	 	 	 	 	 	 	 71	 497
Profit	 on	 disposal	 of	 operation	 	 	 	 13	 862	 –
Profit from operations	 	 	 	 3	 	 931	 2,430
Finance	 income	 	 	 	 	 4	 	 40	 139
Finance	 costs	 	 	 	 	 5	 (106)	 (206)
Profit before taxation 	 	 	 	 	 	 865	 2,363
Taxation	 	 	 	 	 7	 	 (96)	 (810)
Profit after taxation	 	 	 	 	 	 	 769	 1,553
Other	 comprehensive	 income	 for	 the	 year,	 after	 tax
Exchange	 differences	 on	 translation	 of	 foreign	 operations	 	 	 	 (140) 	 723
Deferred	 tax	 on	 items	 taken	 directly	 to	 equity	 	 	 	 	 	 (27)	 	 4
Other	 comprehensive	 income	 for	 the	 year,	 net	 of	 tax	 	 	 	 	 (167) 	 727
Total comprehensive income for the year 	 	 	 	 	 602	 	 2,280
Profit attributable to:
Owners	 of	 the	 parent	 	 	 	 	 	 	 925	 1,562
Minority	 interest	 	 	 	 	 	 	 (156)	 (9)
	 	 	 	 	 	 	 	 769	 1,553
Total comprehensive income attributable to:
Owners	 of	 the	 parent	 	 	 	 	 	 750	 	 2,302 	
Minority	 interest	 	 	 	 	 	 (148)	 	 (22)
	 	 	 	 	 	 	 	 602	 	 	 2,280
Earnings per share 
Basic	 earnings	 per	 share	 	 	 	 9	 6.4p	 10.7p
Diluted	 earnings	 per	 share	 	 	 	 9	 	 6.3p	 10.4p
The	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements. 2009
Annual Report and Accounts
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Consolidated Statement of Financial Position 
at 31 December 2009 
	 2009	 2008
	 	 	 	 	 Note	 £000 £000	 £000	 £000
Assets
Non-current assets
Intangible	 assets	 	 	 10	 2,981	 	 2,952
Property,	 plant	 and	 equipment	 	 11	 5,702	 	 5,837
Investments	 	 	 12	 26	 	 26
Other	 receivables	 	 	 	 13	 858	 	 –
Total non-current assets	 	 	 	 9,567	 	 8,815
Current assets
Inventories	 	 	 14	 2,510	 	 2,846
Trade	 and	 other	 receivables	 	 15	 8,569	 	 7,206
Cash	 and	 cash	 equivalents	 	 16	 1,160 	 	 1,015
Total current assets	 	 	 	 	 12,239	 	 11,067
Total assets	 	 	 	 	 21,806	 	 	 19,882
Liabilities
Current liabilities
Other	 financial	 liabilities	 	 17	 529	 	 512
Trade	 and	 other	 payables	 	 18	 7,402	 	 4,380
Provisions	 	 	 19	 	 99	 	 114
Current	 tax	 liabilities	 	 	 20	 	 32	 	 653
Total current liabilities	 	 	 	 8,062	 	 5,659
Non-current liabilities
Other	 financial	 liabilities	 	 21	 1,460	 	 2,000
Trade	 and	 other	 payables	 	 	 –	 	 21
Deferred	 tax	 liabilities	 	 22	 481	 	 422
Total non-current liabilities	 	 	 	 1,941	 	 2,443
Total liabilities	 	 	 	 	 10,003	 	 8,102
Net assets	 	 	 	 	 11,803	 	 	 11,780
Equity
Share	 capital	 	 	 25	 	 1,481	 	 1,481
Share	 premium	 account	 	 	 	 1,254	 	 1,254
Capital	 redemption	 reserve	 	 	 	 94	 	 94
Other	 non-distributable	 reserve	 	 	 	 766	 	 766
Reserve	 for	 own	 shares	 	 	 	 (322)	 	 (322)
Share	 scheme	 reserve		 	 	 	 43	 	 43
Foreign	 exchange	 reserve	 	 	 	 	 624	 	 	 772
Retained	 earnings	 	 	 	 	 7,688	 	 7,372
Equity attributable to equity holders of
the parent company 	 	 	 	 11,628	 	 	 11,460
Minority interest	 	 	 	 	 	 175	 	 	 320
Total equity	 	 	 	 	 11,803	 	 11,780
The	 financial	 statements	 were	 approved	 and	 authorised	 for	 issue	 by	 the	 Board	 on	 19	 May	 2010.	
Victor P Bellanti 
Director	
The	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements. page 18
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2009
Annual Report and Accounts
Consolidated Cash Flow Statement 
for the year ended 31 December 2009
	 	 	 	 	 	 	 2009	 2008
Cash flows from operating activities	 	 	 	 Note	 £000	 £000
Profit	 from	 operations	 	 	 	 	 	 931	 2,430
Release	 of	 negative	 goodwill	 	 	 	 	 – 	 (231)
Impairment	 of	 intangible	 fixed	 assets	 	 	 	 	 	 15	 –
Depreciation	 	 	 	 	 	 656	 566
Loss/(profit)	 on	 sale	 of	 property,	 plant	 and	 equipment	 	 	 	 	 15	 	 (378)
Share	 option	 charge	 	 	 	 	 	 	 –	 17
Decrease/(increase)	 in	 inventories	 	 	 	 	 304	 (614)
(Increase)/decrease	 in	 receivables	 	 	 	 	 (2,105)	 	 886
Increase/(decrease)	 in	 payables	 	 	 	 	 	 2,682	 (721)
Increase/(decrease)	 in	 provisions	 	 	 	 	 	 15	 (28)
Cash	 generated	 from	 operations	 	 	 	 	 2,513	 1,927
Finance	 income	 	 	 	 	 	 	 40	 139
Finance	 costs	 	 	 	 	 	 (106)	 (206)
Tax	 paid	 	 	 	 	 	 (690)	 (781)
Net cash generated from operating activities	 	 	 	 	 1,757	 1,079
Cash flows from investing activities
Acquisition	 of	 subsidiaries	 net	 of	 cash	 acquired	 	 	 	 	 	 8	 (210)
Purchase	 of	 property,	 plant	 and	 equipment	 	 	 	 	 	 (452) 	 (1,030)
Expenditure	 on	 intangibles	 	 	 	 	 	 (49)	 –
Proceeds	 from	 disposal	 of	 property,	 plant	 and	 equipment	 	 	 	 	 16	 	 691
Net cash used in investing activities	 	 	 	 	 (477)	 	 (549)
Cash flows from financing activities
Dividends	 paid	 to	 shareholders	 	 	 	 	 (582)	 (669)
Payments	 for	 purchase	 of	 share	 capital	 in	 subsidiary	 	 	 	 –	 (26)
Net	 proceeds	 from	 issue	 of	 share	 capital	 to	 minority	 shareholders		 	 	 	 3	 	 197
Finance	 lease	 repayment	 	 	 	 	 (76)	 (59)
New	 loans	 raised	 	 	 	 	 	 	 265	 303
Repayment	 of	 loans	 	 	 	 	 	 (698)	 (214)
Net cash used in financing activities	 	 	 	 	 (1,088)	 (468)
Net increase in cash and cash equivalents 	 	 	 	 	 192	 	 62
Cash and cash equivalents at the beginning of the year	 	 	 	 827	 	 541
Effects	 of	 foreign	 exchange	 rate	 changes	 	 	 	 	 	 (29)	 	 224
Cash and cash equivalents at the end of the year 	 	 	 16	 990	 	 827
The	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements. 2009
Annual Report and Accounts
page 19
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Consolidated Statement of Changes in Equity 
for the year ended 31 December 2009
	 	 	 	 	 Other
	 	 	 	 Capital	 non-
	 	 	 	 Share	 redemp-	 distribut-	 Reserve	 Share	 Foreign
	 	 Share	 premium	 tion	 able	 for 	 own	 scheme	 exchange	 Retained	 	 Minority	 Total
	 	 capital	 account	 reserve	 reserve	 shares	 reserve	 reserve	 earnings	 Total	 interest	 equity
	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
At	 1	 January	
2008	 1,481	 1,254	 94	 766	 (322)	 26	 36	 6,475	 9,810	 171	 9,981
Share	 scheme	
charge	 –	 –	 –	 –	 –	 17	 –	 –	 17	 –	 17
Minority	 interest	
in	 subsidiary	
incorporated	 –	 –	 –	 –	 –	 –	 –	 –	 –	 197	 197
Minority	 interest	
in	 subsidiary	
acquired	 –	 –	 –	 –	 –	 –	 –	 –	 –	 (26)	 (26)
Dividends	 paid	
in	 year	 –	 –	 –	 –	 –	 –	 –	 (669)	 (669)	 –	 (669)
Total	 comprehensive	
income	 for
the	 year	 –	 –	 –	 –	 –	 –	 736	 1,566	 2,302	 (22)	 2,280
At	 1	 January	
2009	 1,481	 1,254	 94	 766	 (322)	 43	 772	 7,372	 11,460	 320	 11,780
Minority	 interest	
in	 subsidiary	
shares	 issued	
during	 the	 year	 –	 –	 –	 –	 –	 –	 –	 –	 –	 3	 3
Dividends	 paid	
in	 year	 –	 –	 –	 –	 –	 –	 –	 (582)	 (582)	 –	 (582)
Total	 comprehensive	
income	 for	
the	 year	 –	 –	 –	 –	 –	 –	 (148)	 898	 750	 (148)	 602
At 31 December  
2009 1,481 1,254 94 766 (322) 43 624 7,688 11,628 175 11,803
Notes	
1.	Share	 capital	 represents	 the	 nominal	 value	 of	 shares	 in	 issue.	
2.	The	 Share	 premium	 account	 represents	 the	 difference	 between	 the	 amount	 paid	 by	 shareholders	 subscribing	 for	 new	
shares	 and	 the	 nominal	 value	 of	 those	 shares.	
3.	The	 Capital	 redemption	 reserve	 relates	 to	 purchases	 by	 the	 Company	 of	 its	 own	 shares.	
4.	Other	 non-distributable	 reserve	 arises	 from	 the	 elimination	 of	 share	 capital	 of	 acquired	 companies	 in	 excess	 of	 nominal	
value	 of	 shares	 issued.	
5.	Reserve	 for	 own	 shares	 is	 the	 sum	 paid	 for	 shares	 held	 by	 the	 Norman	 Hay	 plc	 Employee	 Benefit	 Trust.	
6.	The	 Share	 scheme	 reserve	 represents	 the	 fair	 value	 of	 share	 options	 granted.	
7.	The	 Foreign	 exchange	 reserve	 arises	 from	 fluctuations	 in	 the	 value	 of	 net	 assets	 denominated	 in	 currencies	 other	 than	
Sterling.	
8.	 	Retained 	 earnings	 is	 the	 cumulative	 comprehensive	 income	 less	 items	 recognised	 in	 other	 equity	 reserves.	
9.	 	Minority 	 interest	 represents	 the	 interests	 of	 the	 minority	 shareholders	 in	 subsidiaries	 of	 the	 Group.	
The	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements. page 20
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2009
Annual Report and Accounts
Notes to the Group Financial Statements 
for the year ended 31 December 2009
1  Accounting policies 
These	 financial	 statements	 have	 been	 prepared	 in	 accordance	 with	 International	 Financial	 Reporting	 Standards,	
International	 Accounting	 Standards	 and	 Interpretations	 (collectively	 “IFRSs”)	 issued	 by	 the	 International	 Accounting	
Standards	 Board	 (“IASB”)	 as	 endorsed	 by	 the	 European	 Union	 (“endorsed	 IFRSs”)	 and	 with	 those	 parts	 of	 the	 Companies	 Act	
2006	 applicable	 to	 companies	 preparing	 financial	 statements	 in	 accordance	 with	 IFRSs.	
The	 parent	 company	 financial	 statements	 have	 been	 prepared	 in	 accordance	 with	 applicable	 United	 Kingdom	 accounting	
standards	 and	 are	 shown	 on	 pages	 46	 to	 54.	
New standards adopted during the year
 IFRS 8, Operating segments	 requires	 an	 entity	 to	 adopt	 a	 “management	 approach”	 to	 report	 on	 the	 financial	
performance	 of	 the	 operating	 segments,	 and	 also	 about	 the	 entity’s	 products	 and	 services,	 the	 geographical	 areas	 in	
which	 it	 operates,	 and	 its	 major	 customers.	 The	 information	 reported	 is	 what	 management	 uses	 internally	 for	 allocating	
resources	 to	 operating	 segments.
 IAS 1, Presentation of financial statements	 (revised	 2007)	 requires	 a	 change	 in	 the	 presentation	 by	 the	 inclusion	 of	 a	
Statement	 of	 Comprehensive	 Income	 to	 replace	 the	 Consolidated	 Income	 Statement.	 This	 new	 statement	 includes	 items	
taken	 directly	 to	 equity	 (with	 the	 exception	 of	 transactions	 with	 the	 shareholders	 of	 the	 Group).
	 This 	 new	 presentation	 is	 in	 the	 form	 of	 one	 single	 statement,	 the	 “Consolidated	 Statement	 of	 Comprehensive	 Income”.
Standards, interpretations and amendments to published standards not yet effective
Certain	 new	 standards,	 amendments	 and	 interpretations	 to	 existing	 standards	 have	 been	 published	 that	 are	 mandatory	 for	
the	 Group’s	 accounting	 periods	 beginning	 on	 or	 after	 1	 January	 2009	 or	 later	 periods	 and	 which	 the	 Group	 has	 decided	 not	
to	 adopt	 early.	 These	 are:	
 IFRS 3, Business combinations	 (revised 2008) and complementary amendments to IAS 27: Consolidated and separate 
financial statements	
	 IFRS	 3	 (revised	 2008)	 and	 the	 complementary	 amendments	 to	 IAS	 27	 are	 both	 mandatory	 for	 accounting	 periods	
beginning	 on	 or	 after	 1	 July	 2010,	 but	 are	 not	 as	 yet	 endorsed	 for	 use	 in	 the	 European	 Union.	
	
	 There	 are	 certain	 significant	 changes	 to	 the	 requirements	 of	 IFRS	 3,	 and	 options	 available,	 when	 accounting	 for	 business	
combinations	 in	 future	 periods.
	 Management 	 is	 currently	 assessing	 the	 impact	 of	 this	 revision	 on	 the	 financial	 statements.
 Improvements to IFRSs, the improvements to IFRSs are mandatory for accounting periods beginning on or after 
1 January 2010
	 This 	 amendment	 takes	 various	 forms,	 including	 the	 clarification	 of	 the	 requirements	 of	 IFRSs	 and	 the	 elimination	 of	
inconsistencies	 between	 Standards.	 The	 most	 significant	 changes	 cover	 the	 following	 issues:	 The	 disclosure	 requirements	
of	 other	 IFRSs	 do	 not	 generally	 apply	 to	 non-current	 assets	 (or	 disposal	 groups)	 classified	 as	 held	 for	 sale;	 total	 assets	
for	 each	 reportable	 segment	 need	 only	 be	 disclosed	 when	 such	 information	 is	 regularly	 provided	 to	 the	 chief	 operating	
decision	 maker;	 that	 the	 terms	 of	 a	 liability	 that	 could,	 at	 the	 option	 of	 the	 counterparty,	 result	 in	 its	 settlement	 by	 the	
issue	 of	 equity	 instruments	 do	 not	 affect	 its	 classification;	 and	 that	 only	 expenditures	 which	 result	 in	 a	 recognised	 asset	
can	 be	 classified	 as	 a	 cash	 flow	 from	 investing	 activities.	 It	 also	 confirms	 that	 the	 combination	 of	 entities	 or	 businesses	
under	 common	 control	 and	 the	 contribution	 of	 a	 business	 on	 the	 formation	 of	 a	 joint	 venture	 are	 outside	 of	 the	 scope	 	
of	 IFRS	 2.	
	 Management	 is	 currently	 assessing	 the	 impact	 of	 this	 revision	 on	 the	 financial	 statements.
 IAS 24, Related party disclosures	 is mandatory for accounting periods beginning on or after 1 January 2011	
The	 revision	 to	 IAS	 24	 is	 in	 response	 to	 concerns	 that	 the	 previous	 disclosure	 requirements	 and	 the	 definition	 of	 a	 related	
party	 were	 too	 complex	 and	 difficult	 to	 apply	 in	 practice.	
	 The	 revised	 standard	 addresses	 these	 concerns	 by:
	 Providing 	 a	 revised	 definition	 of	 a	 related	 party,	 the	 current	 definition	 of	 a	 related	 party	 has	 been	 simplified	 and	
inconsistencies	 eliminated.	 The	 revised	 definition	 will	 mean	 that	 some	 entities	 will	 have	 more	 related	 parties	 for	 which	
disclosures	 will	 be	 required.	 The	 entities	 that	 are	 most	 likely	 to	 be	 affected	 are	 those	 that	 are	 part	 of	 a	 Group	 that	
includes	 both	 subsidiaries	 and	 associates,	 and	 entities	 with	 shareholders	 that	 are	 involved	 with	 other	 entities.
	 Management 	 is	 currently	 assessing	 the	 impact	 of	 IAS	 24	 on	 the	 Group	 Financial	 Statements. 2009
Annual Report and Accounts
page 21
17666	 20/05/2010	 Proof	10
1  Accounting policies (continued)
 IFRS 9, Financial instruments is mandatory for accounting periods beginning on or after 1 January 2013
	 IFRS 	 9	 will	 eventually	 replace	 IAS	 39	 in	 its	 entirety.	 However,	 the	 process	 has	 been	 divided	 into	 three	 main	 components:	
Classification	 and	 measurement;	 Impairment;	 and	 Hedge	 accounting.	
	 IFRS	 9	 addresses	 the	 classification	 and	 measurement	 of	 financial	 assets	 only.	 The	 requirements	 for	 the	 classification	
and	 measurement	 of	 financial	 liabilities	 will	 be	 finalised	 and	 added	 to	 IFRS	 9	 once	 issues	 related	 to	 the	 recognition	 of	
changes	 in	 an	 entity’s	 own	 credit	 risk	 have	 been	 addressed.
	 	 Management 	 is	 currently	 assessing	 the	 impact	 of	 IFRS	 9	 on	 the	 Group	 Financial	 Statements.
The	 following	 are	 also	 standards,	 interpretations	 and	 amendments	 to	 published	 statements	 not	 yet	 effective,	 and	 which	 are	
not	 considered	 to	 be	 relevant	 to	 the	 Group.	
	
 Amendments to IFRS 2, Group cash-settled share-based payments transactions	 (effective	 for	 accounting	 periods	
beginning	 on	 or	 after	 1	 January	 2010);
 Amendments to IAS 32, Classification of rights issues	 (effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 February	
2010);
 IFRIC 13, Customer loyalty programmes	 (effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 July	 2009);	
 IFRIC 14, IAS 19, Limit on a defined benefit asset, minimum funding requirements and their interaction	 (effective	 for	
accounting	 periods	 beginning	 on	 or	 after	 1	 January	 2011);
 IFRIC 16, Hedges of a net investment in a foreign operation	 (effective	 for	 accounting	 periods	 beginning	 on	 or	 after	
1	 October	 2009);	
 IFRIC 17, Distribution of non-cash assets to owners	 (effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 July	 2009);	
 IFRIC 18, Transfer of assets from customers	 (effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 July	 2009);	
 IFRIC 19, Extinguishing financial liabilities with equity instruments	 (effective	 for	 accounting	 periods	 on	 or	 after	
1	 April	 2010);
 Amendments to IAS 39, Financial investments, recognition and measurement; eligible hedged items	 (effective	 for	
accounting	 periods	 beginning	 on	 or	 after	 1	 July	 2009);	 and
 Embedded derivatives: amendments to IFRIC 9 and IAS 39	 (effective	 for	 accounting	 periods	 beginning	 on	 or	 after	
30	 June	 2009).
The following principal accounting policies have been applied consistently year-on-year: 
Basis of consolidation 
Subsidiaries	 are	 entities	 controlled	 by	 the	 Company.	 Control	 exists	 where	 the	 Company	 has	 the	 power,	 directly	 or	 indirectly,	 to	
govern	 the	 financial	 and	 operating	 policies	 of	 an	 entity	 so	 as	 to	 obtain	 benefits	 from	 its	 activities.	 The	 results	 of	 subsidiaries	 are	
included	 in	 the	 Consolidated	 financial	 statements	 from	 the	 date	 that	 control	 commences	 until	 the	 date	 that	 control	 ceases.	
Acquisitions	 are	 accounted	 for	 by	 the	 purchase	 method.	 The	 cost	 of	 an	 acquisition	 is	 measured	 as	 the	 fair	 value	 at	 the	 date	 of	
exchange	 of	 the	 consideration	 provided	 plus	 costs	 directly	 attributable	 to	 the	 acquisition.	 Identifiable	 assets	 and	 liabilities	 	
of	 the	 acquired	 business	 that	 meet	 the	 conditions	 for	 recognition	 under	 IFRS	 3	 are	 recognised	 at	 their	 fair	 value	 at	 the	 date	
of	 acquisition.	 T o	 the	 extent	 that	 the	 cost	 of	 an	 acquisition	 exceeds	 the	 fair	 value	 of	 the	 net	 assets	 acquired,	 the	 difference	 is	
recorded	 as	 goodwill	 and,	 where	 the	 fair	 value	 of	 the	 net	 assets	 exceeds	 the	 cost	 of	 acquisition,	 the	 difference	 is	 recorded	 as	
negative	 goodwill.	
Transactions	 between,	 and	 balances	 with,	 Group	 companies	 are	 eliminated	 together	 with	 unrealised	 gains	 on	 inter-company	
transactions.	 Accounting	 policies	 of	 acquired	 companies	 are	 changed	 where	 necessary	 to	 be	 consistent	 with	 those	 of	 the	 Group.	
Revenue 
Revenue	 is	 recognised	 when	 performance	 has	 occurred	 and	 a	 right	 to	 consideration	 has	 been	 obtained.	 This	 is	 normally	
when	 goods	 have	 been	 delivered	 or	 services	 provided	 to	 the	 customer,	 title	 and	 risk	 of	 loss	 have	 been	 transferred	 and	
collection	 of	 related	 receivables	 is	 probable.	 Revenue	 excludes	 value	 added	 and	 other	 sales	 taxes,	 trade	 discounts	 and	 intra-
Group	 sales.	
Long-term	 contracts	 are	 assessed	 on	 a	 contract-by-contract	 basis.	 Where	 the	 outcome	 of	 a	 long-term	 contract	 can	 be	
estimated	 reliably,	 contract	 revenue	 and	 contract	 costs	 are	 recognised	 by	 reference	 to	 the	 stage	 of	 completion	 of	 the	
contract	 activity	 (the	 percentage	 of	 completion	 method)	 at	 the	 year	 end	 date	 and	 profit	 that	 is	 estimated	 to	 fairly	 reflect	 the	
profit	 arising	 up	 to	 that	 date.	 When	 it	 is	 probable	 that	 total	 contract	 costs	 will	 exceed	 total	 contract	 revenue,	 the	 expected	
loss	 is	 recognised	 as	 an	 expense	 immediately.	 page 22
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2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
1  Accounting policies (continued)
Research and development 
Expenditure	 on	 applied	 research	 and	 development	 is	 charged	 to	 profit	 or	 loss	 in	 the	 year	 in	 which	 it	 is	 incurred,	 unless	 such	
costs	 should	 be	 capitalised	 under	 the	 requirements	 of	 the	 applicable	 standard.	 No	 development	 projects	 met	 the	 criteria	 for	
capitalisation.	
Dividends 
The	 final	 dividend	 is	 only	 recognised	 at	 the	 point	 it	 is	 declared	 and	 approved	 by	 the	 shareholders	 at	 the	 Annual	 General	
Meeting.	 Interim	 dividends	 are	 recognised	 on	 payment.
Intangible assets 
Goodwill	
Goodwill	 arising	 on	 an	 acquisition	 of	 an	 undertaking	 is	 the	 difference	 between	 the	 fair	 value	 of	 the	 consideration	 paid	 and	
the	 fair	 value	 of	 the	 assets	 and	 liabilities	 acquired.	 Goodwill	 which	 is	 recognised	 as	 an	 asset	 is	 reviewed	 for	 impairment	 at	
least	 annually.	 Any	 impairment	 is	 recognised	 immediately	 in	 profit	 or	 loss	 and	 is	 not	 subsequently	 reversed.	
For	 the	 purpose	 of	 impairment	 testing,	 goodwill	 is	 allocated	 to	 each	 of	 the	 Group’s	 cash	 generating	 units	 expected	 to	
benefit	 from	 the	 synergies	 of	 combination.	 Cash	 generating	 units	 to	 which	 goodwill	 has	 been	 allocated	 are	 tested	 for	
impairment	 annually,	 or	 more	 frequently	 where	 there	 is	 an	 indication	 that	 the	 unit	 may	 be	 impaired.	 If	 the	 recoverable	
amount	 of	 the	 cash	 generating	 unit	 is	 less	 than	 the	 carrying	 amount	 of	 the	 unit,	 the	 impairment	 loss	 is	 allocated	 first	 to	
reduce	 the	 carrying	 amount	 of	 any	 goodwill	 allocated	 to	 the	 unit	 and	 then	 to	 the	 other	 assets	 of	 the	 unit	 pro	 rata	 on	 the	
basis	 of	 the	 carrying	 amount	 of	 each	 asset	 in	 the	 unit.	
On	 disposal	 of	 a	 subsidiary	 the	 attributable	 amount	 of	 goodwill	 is	 included	 in	 the	 determination	 of	 the	 profit	 or	 loss	 on	
disposal.	
Goodwill	 arising	 on	 acquisitions	 before	 the	 date	 of	 transition	 to	 IFRSs	 (1	 January	 2007)	 has	 been	 retained	 at	 the	 previous	 UK	
GAAP	 amounts	 subject	 to	 being	 tested	 for	 impairment	 as	 noted.	 Goodwill	 written	 off	 to	 reserves	 under	 UK	 GAAP	 prior	 to	
1998	 has	 not	 been	 reinstated	 and	 is	 not	 included	 in	 determining	 any	 subsequent	 profit	 or	 loss	 on	 disposal.	
Negative	 goodwill	
Where	 the	 fair	 value	 of	 the	 assets	 acquired	 exceeds	 the	 acquisition	 cost,	 the	 negative	 goodwill	 that	 arises	 is	 recorded	 as	
income	 within	 profit	 or	 loss.	
Other intangible assets 
Separable	 intangible	 assets,	 such	 as	 trademarks,	 licences	 and	 brands,	 are	 recognised	 separately	 from	 goodwill	 on	 all	
acquisitions	 after	 the	 date	 of	 transition.	 Brands	 identified	 have	 been	 assessed	 as	 having	 an	 indefinite	 useful	 life	 when	
coupled	 with	 continuing	 marketing	 spend	 to	 maintain	 the	 brand.	
Under	 IFRSs	 all	 intangible	 assets	 with	 indefinite	 lives	 are	 reviewed	 for	 impairment	 on	 an	 annual	 basis.	
Property, plant and equipment 
Property,	 plant	 and	 equipment	 is	 held	 at	 cost	 less	 accumulated	 depreciation,	 although	 some	 assets	 are	 carried	 at	 deemed	
cost,	 being	 the	 carrying	 value	 of	 freehold	 land	 and	 buildings	 as	 at	 31	 December	 1999.	 All	 additions	 since	 this	 date	 are	 stated	
at	 cost.	
Depreciation	 is	 provided	 on	 property,	 plant	 and	 equipment,	 other	 than	 freehold	 land	 and	 plant	 in	 the	 course	 of	 construction,	
at	 rates	 calculated	 to	 write	 off	 the	 cost	 or	 deemed	 cost,	 less	 estimated	 residual	 value	 of	 each	 asset,	 evenly	 over	 its	 expected	
useful	 life	 as	 follows:	
Freehold	 buildings	 	 45	 years
Long	 leasehold	 property	 Over 	 term	 of	 lease
Plant,	 vehicles	 and	 fixtures	 3 	 to	 10	 years
Computer	 equipment	 	 2	 to	 5	 years
Impairment	 tests	 on	 the	 carrying	 value	 of	 property,	 plant	 and	 equipment	 are	 undertaken	 at	 the	 end	 of	 each	 year	 if	 events	 or	
changes	 in	 circumstances	 indicate	 that	 the	 carrying	 value	 may	 not	 be	 recoverable.	
Investments available for sale 
Investments	 available	 for	 sale	 are	 recorded	 at	 fair	 value.	 Unrealised	 gains	 and	 losses	 arising	 on	 the	 remeasurement	 are	
recorded	 in	 equity.	 On	 disposal	 or	 impairment	 of	 the	 investments,	 cumulative	 gains	 and	 losses	 previously	 recognised	 in	
other	 comprehensive	 income	 are	 transferred	 to	 profit	 or	 loss. 2009
Annual Report and Accounts
page 23
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1  Accounting policies (continued)
Non-current assets – other receivables
Where	 a	 long-term	 receivable	 arises	 as	 a	 result	 of	 a	 disposal,	 there	 is	 an	 annual	 estimation	 of	 the	 factors	 that	 affect	 this	
deferred	 consideration,	 and	 a	 revaluation	 made	 if	 required.
Inventories 
Inventories	 are	 valued	 at	 the	 lower	 of	 cost	 on	 a	 first	 in,	 first	 out	 basis,	 and	 net	 realisable	 value.	 Costs	 incurred	 in	 bringing	
each	 product	 to	 its	 present	 location	 and	 condition	 comprise:	
 Raw	 materials	 –	 cost	 of	 purchase	 on	 a	 first	 in,	 first	 out	 basis.	
 Work	 in	 progress	 and	 finished	 goods	 –	 cost	 of	 raw	 materials	 and	 labour	 plus	 attributable	 overheads	 based	 on	 the	 normal	
level	 of	 activity.	
Net	 realisable	 value	 is	 based	 on	 estimated	 selling	 price	 less	 further	 costs	 to	 completion	 and	 disposal.	 Provision	 is	 made	 for	
obsolete	 and	 slow	 moving	 items.	
Trade receivables 
Trade	 receivables	 are	 stated	 initially	 at	 fair	 value,	 then	 measured	 at	 amortised	 cost	 less	 allowances	 for	 provisions.	
Provisions	 for	 impairment	 are	 recognised	 when	 there	 is	 objective	 evidence	 that	 the	 Group	 will	 not	 be	 able	 to	 collect	 all	
amounts	 due	 according	 to	 the	 original	 terms	 of	 the	 receivable.	 The	 amount	 of	 the	 provision	 is	 the	 difference	 between	 the	
net	 carrying	 amount	 and	 the	 present	 value	 of	 the	 future	 expected	 cash	 flows	 associated	 with	 the	 impaired	 receivable.	
For	 trade	 receivables,	 such	 provisions	 are	 recorded	 in	 a	 separate	 allowance	 account	 with	 the	 loss	 being	 recognised	 within	
administrative	 expenses	 in	 profit	 or	 loss.	 On	 confirmation	 that	 the	 trade	 receivable	 will	 not	 be	 collectable,	 the	 gross	 carrying	
value	 of	 the	 asset	 is	 written	 off	 against	 the	 associated	 provision.
Trade payables 
Trade	 payables	 and	 other	 short-term	 monetary	 liabilities	 are	 initially	 recognised	 at	 fair	 value	 and	 subsequently	 carried	 at		
amortised	 cost	 using	 the	 effective	 interest	 method.	
Deferred contingent consideration 
Where	 deferred	 consideration	 arises	 upon	 an	 acquisition,	 there	 is	 an	 estimation	 of	 the	 factors	 that	 affect	 this	 consideration,	
and	 a	 value	 attributed	 as	 deferred	 consideration.	 Changes	 in	 the	 carrying	 amount	 of	 the	 liability	 as	 a	 consequence	 of	 	
re-estimation	 result	 in	 an	 amendment	 to	 the	 carrying	 amount	 of	 the	 related	 goodwill.	 This	 is	 reviewed	 annually.	
Leased assets 
Assets	 held	 under	 leasing	 agreements	 and	 hire	 purchase	 contracts,	 where	 the	 Group	 has	 substantially	 all	 the	 risks	 and	
rewards	 of	 ownership	 (“finance	 leases”),	 are	 treated	 as	 if	 they	 had	 been	 purchased	 outright.	 The	 amount	 capitalised	 is	 the	
present	 value	 of	 the	 minimum	 lease	 payments	 payable	 during	 the	 lease	 term.	 The	 corresponding	 leasing	 commitments	 are	
shown	 as	 borrowings.	 Depreciation	 over	 the	 shorter	 of	 the	 assets’	 useful	 life	 and	 the	 lease	 term	 on	 the	 relevant	 assets	 is	
charged	 to	 profit	 or	 loss.	
Lease	 payments	 are	 analysed	 between	 capital	 and	 interest	 components	 so	 that	 the	 interest	 element	 of	 the	 payment	
is	 charged	 to	 profit	 or	 loss	 over	 the	 period	 of	 the	 lease	 and	 represents	 a	 constant	 proportion	 of	 the	 balance	 of	 capital	
repayments	 outstanding.	 The	 capital	 part	 reduces	 the	 amount	 payable	 to	 the	 lessor.	
All	 other	 leases	 are	 treated	 as	 operating	 leases.	 Their	 annual	 rentals	 are	 charged	 to	 profit	 or	 loss	 on	 a	 straight-line	 basis	 over	
the	 term	 of	 the	 lease.	
Provisions 
Provision	 is	 made	 for	 onerous	 contracts	 and	 for	 product	 warranty	 claims	 when	 the	 Group	 has	 a	 present	 obligation	 as	 a	 result	
of	 past	 events,	 and	 it	 is	 more	 likely	 than	 not	 that	 an	 outflow	 of	 economic	 benefits	 will	 be	 required	 to	 settle	 the	 obligation,	
and	 the	 amount	 can	 be	 reliably	 estimated.	 Provisions	 are	 discounted	 to	 present	 value	 where	 the	 impact	 is	 significant,	 using	
a	 discount	 rate	 that	 reflects	 current	 market	 assessments	 of	 the	 time	 value	 of	 money	 and	 the	 risks	 specific	 to	 the	 obligation.	
Cash and cash equivalents 
Cash	 and	 cash	 equivalents	 includes	 cash	 in	 hand,	 deposits	 at	 call	 with	 banks,	 and	 other	 short-term	 highly	 liquid	 investments	
that	 are	 readily	 convertible	 to	 a	 known	 amount	 of	 cash	 and	 are	 considered	 to	 be	 subject	 to	 insignificant	 risk	 of	 changes	 in	
value.	 Bank	 overdrafts	 are	 shown	 within	 Borrowings	 as	 current	 liabilities,	 but	 included	 within	 Cash	 and	 cash	 equivalents	 in	
the	 Cash	 Flow	 Statement.	 page 24
17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
1  Accounting policies (continued)
Foreign currency translation 
Functional	 currency	
The	 Consolidated	 financial	 statements	 are	 presented	 in	 Sterling,	 which	 is	 the	 Company’s	 functional	 currency.	 Items	 included	
in	 the	 financial	 statements	 of	 each	 of	 the	 Group’s	 entities	 are	 measured	 using	 the	 currency	 of	 the	 primary	 economic	
environment	 in	 which	 the	 entity	 operates	 (the	 functional	 currency).	
Transactions	 and	 balances	
Transactions	 in	 foreign	 currencies	 are	 translated	 into	 the	 functional	 currency	 of	 the	 transacting	 entity	 at	 the	 foreign	
exchange	 rate	 ruling	 at	 the	 date	 of	 the	 transaction.	 Foreign	 exchange	 differences	 arising	 are	 recognised	 in	 profit	 or	 loss.	
Foreign	 currency	 monetary	 assets	 and	 liabilities	 are	 translated	 at	 the	 exchange	 rates	 ruling	 at	 the	 year	 end	 date.	
Group	 companies	
The	 results	 of	 foreign	 operations	 are	 translated	 into	 Sterling	 at	 the	 average	 rate	 of	 exchange	 in	 the	 accounting	 period,	 and	
the	 assets	 and	 liabilities	 are	 translated	 into	 Sterling	 at	 the	 closing	 rate	 at	 the	 year	 end	 date.	 On	 consolidation	 the	 effect	 of	
variances	 in	 exchange	 rates	 between	 the	 beginning	 and	 end	 of	 the	 financial	 year	 on	 the	 opening	 net	 investment	 in	 foreign	
undertakings	 are	 recorded	 in	 other	 comprehensive	 income	 and	 are	 shown	 in	 the	 foreign	 exchange	 reserve,	 as	 are	 any	
exchange	 differences	 arising	 through	 the	 translation	 of	 results	 using	 the	 average	 monthly	 exchange	 rate.	 Where	 long-term	
Group	 loans	 exist	 that	 arise	 as	 a	 result	 of	 acquisition,	 the	 movement	 on	 the	 loans	 that	 arises	 through	 fluctuations	 on	 the	
exchange	 rate	 is	 taken	 to	 the	 foreign	 exchange	 reserve.	 On	 disposal	 of	 the	 foreign	 operation,	 the	 amounts	 reflected	 in	 the	
foreign	 exchange	 reserve	 are	 recycled	 to	 profit	 or	 loss.
Borrowings 
Borrowings	 are	 recognised	 initially	 at	 their	 fair	 value,	 net	 of	 the	 associated	 finance	 costs,	 and	 thereafter	 at	 amortised	 cost.	
The	 associated	 finance	 costs	 are	 amortised	 to	 profit	 or	 loss	 over	 the	 life	 of	 the	 borrowings.	 Borrowings	 are	 classified	 as	
current	 liabilities	 unless	 the	 Group	 has	 an	 unconditional	 right	 to	 defer	 settlement	 of	 the	 liability	 for	 at	 least	 12	 months	 after	
the	 year	 end	 date.	
Current and deferred taxation 
The	 tax	 expense	 represents	 the	 sum	 of	 the	 tax	 currently	 payable	 on	 the	 profit	 for	 the	 year,	 and	 the	 deferred	 tax.	 Provision	
for	 taxation	 is	 made	 using	 tax	 rates	 that	 have	 been	 enacted	 or	 substantively	 enacted	 at	 the	 year	 end	 date.	
Deferred	 tax	 is	 provided	 in	 full	 in	 respect	 of	 temporary	 differences	 arising	 between	 the	 tax	 bases	 of	 assets	 and	 liabilities	 and	
their	 carrying	 amounts	 in	 the	 Consolidated	 financial	 statements	 except	 for	 differences	 arising	 on:	
 the	 initial	 recognition	 of	 goodwill;	
 the	 initial	 recognition	 of	 an	 asset	 or	 liability	 in	 a	 transaction	 which	 is	 not	 a	 business	 combination	 and	 at	 the	 time	 of	 the	
transaction	 affects	 neither	 accounting	 nor	 taxable	 profit;	 and	
 investments	 in	 subsidiaries	 and	 jointly	 controlled	 entities	 where	 the	 Group	 is	 able	 to	 control	 the	 timing	 of	 the	 reversal	 of	
the	 difference	 and	 it	 is	 probable	 that	 the	 difference	 will	 not	 reverse	 in	 the	 foreseeable	 future.	
Deferred	 taxation	 is	 calculated	 using	 tax	 rates	 that	 are	 expected	 to	 apply	 when	 the	 related	 deferred	 taxation	 asset	 is	
realised	 or	 the	 related	 deferred	 taxation	 liability	 is	 settled.	
The	 carrying	 amount	 of	 deferred	 tax	 assets	 is	 reviewed	 at	 each	 year	 end	 date	 and	 reduced	 to	 the	 extent	 that	 it	 is	 no	 longer	
probable	 that	 sufficient	 taxable	 profits	 are	 available	 to	 allow	 all	 or	 part	 of	 the	 asset	 to	 be	 recovered.	
Employee benefit costs 
Share-based	 payments	
Where	 share	 options	 are	 awarded	 to	 employees,	 the	 fair	 value	 of	 the	 options	 at	 the	 date	 of	 grant	 is	 charged	 to	 profit	 or	
loss	 over	 the	 vesting	 period.	 Non-market	 vesting	 conditions	 are	 taken	 into	 account	 by	 adjusting	 the	 number	 of	 equity	
instruments	 expected	 to	 vest	 at	 each	 year	 end	 date	 so	 that,	 ultimately,	 the	 cumulative	 amount	 recognised	 over	 the	 vesting	
period	 is	 based	 on	 the	 number	 of	 options	 that	 eventually	 vest.	 Market	 vesting	 conditions	 are	 factored	 into	 the	 fair	 value	
of	 the	 options	 granted.	 As	 long	 as	 all	 other	 vesting	 conditions	 are	 satisfied,	 a	 charge	 is	 made	 irrespective	 of	 whether	 the	
market	 vesting	 conditions	 are	 satisfied.	
Pensions	
Contributions	 to	 the	 Group’s	 defined	 contribution	 scheme	 and	 to	 State-managed	 retirement	 benefit	 schemes	 are	 charged	
to	 profit	 or	 loss	 in	 the	 year	 in	 which	 they	 become	 payable.	 2009
Annual Report and Accounts
page 25
17666	 20/05/2010	 Proof	10
1  Accounting policies (continued)
Employee	 Benefit	 Trust	 (EBT)
As	 the	 Company	 is	 deemed	 to	 have	 control	 of	 its	 EBT,	 it	 is	 treated	 as	 a	 subsidiary	 and	 consolidated	 for	 the	 purposes	 of	 the	
Consolidated	 financial	 statements.	 	 The	 EBT’s	 assets	 (other	 than	 investments	 in	 the	 Company	 shares),	 liabilities,	 income	 and	
expenses	 are	 included	 on	 a	 line-by-line	 basis	 in	 the	 Consolidated	 financial	 statements.	 	 The	 EBT’s	 investment	 in	 the	 Company’s	
shares	 is	 deducted	 from	 equity	 in	 the	 Consolidated	 statement	 of	 financial	 position	 as	 if	 they	 were	 treasury	 shares.
Critical accounting estimates and judgements 
In	 applying	 the	 Group’s	 accounting	 policies	 set	 out	 above	 management	 is	 required	 to	 make	 certain	 estimates	 and	 judgements	
concerning	 the	 future.	 These	 judgements	 are	 regularly	 reviewed	 and	 updated	 as	 necessary.	 The	 estimates	 and	 judgements	 that	
have	 the	 most	 significant	 effect	 on	 the	 amounts	 included	 in	 these	 Consolidated	 financial	 statements	 are	 as	 follows:	
Intangible	 assets	 and	 impairment	
The	 Group	 is	 required	 to	 test	 whether	 goodwill	 and	 brands	 have	 suffered	 any	 impairment.	 The	 recoverable	 amounts	 of	 cash	
generating	 units	 connected	 to	 the	 recorded	 goodwill	 and	 brands	 have	 been	 determined	 based	 on	 value-in-use	 estimations.	
The	 value-in-use	 calculation	 requires	 the	 entity	 to	 estimate	 future	 cash	 flows	 expected	 to	 arise	 from	 the	 cash	 generating	
unit	 and	 a	 suitable	 discount	 rate	 in	 order	 to	 calculate	 present	 value.	
Revenue	 recognition	 –	 long-term	 contracts	
In	 applying	 the	 Group’s	 accounting	 policy	 set	 out	 above,	 if	 the	 outcome	 of	 a	 long-term	 contract	 can	 be	 estimated	 reliably,	
contract	 revenue	 is	 recognised	 by	 reference	 to	 the	 stage	 of	 completion	 of	 the	 contract	 activity.	 The	 stage	 of	 completion	 is	
regularly	 reviewed	 and	 updated,	 the	 actual	 result	 could	 vary	 from	 the	 value	 used	 in	 profit	 or	 loss.	 However,	 as	 these	 are	
reviewed	 on	 a	 monthly	 basis	 any	 difference	 is	 not	 expected	 to	 be	 significant.	
Deferred	 consideration	 payable
Included	 within	 liabilities	 is	 an	 amount	 of	 £85,000	 payable	 in	 respect	 of	 the	 acquisition	 of	 one	 of	 the	 subsidiary	 companies.	 The	
deferred	 consideration	 is	 calculated	 based	 on	 an	 estimate	 of	 future	 profits	 of	 the	 subsidiary,	 and	 therefore	 cannot	 be	 estimated	
with	 certainty.	 The	 amount	 recognised	 in	 the	 financial	 statements	 is	 the	 discounted	 value	 of	 future	 estimated	 profits.
Deferred	 consideration	 receivable
Included	 within	 assets	 is	 an	 amount	 of	 £974,000	 receivable	 in	 respect	 of	 the	 disposal	 of	 the	 remaining	 wet	 processing	
operations	 from	 our	 Coventry	 site.	 This	 consideration	 receivable	 has	 been	 calculated	 as	 the	 total	 of	 the	 expected	 annual	
amounts	 receivable	 from	 the	 purchaser	 discounted	 at	 an	 appropriate	 rate.	 The	 expected	 annual	 amounts	 receivable	 are	
based	 on	 a	 percentage	 of	 the	 sales	 of	 the	 purchaser.	 There	 is	 no	 set	 termination	 date	 for	 this	 agreement.	
The	 calculation	 of	 the	 amount	 will	 be	 reviewed	 next	 year	 and	 in	 following	 years	 if	 there	 is	 a	 change	 in	 circumstances	
indicating	 that	 the	 underlying	 value	 of	 the	 asset	 has	 changed	 to	 a	 significant	 extent.		 Changes	 in	 the	 expected	 annual	
amounts	 receivable	 or	 the	 appropriate	 discount	 rate	 could	 change	 the	 value	 of	 the	 recorded	 asset.
Inventory	 provisions	
Group	 inventory	 levels	 are	 constantly	 reviewed	 and,	 should	 there	 be	 an	 indication	 of	 impairment	 or	 obsolescence,	 the	
inventory	 is	 written	 down	 to	 its	 assessed	 net	 realisable	 value.
2  Segmental analysis 
The	 Group’s	 business	 activities	 are	 organised	 into	 four	 main	 operating	 divisions.		 These	 divisions	 (except	 for	 the	 Chemical	
Process	 Plant	 division)	 contain	 further	 business	 units.		 Each	 individual	 business	 unit	 is	 managed	 separately	 (as	 well	 as	
collectively	 on	 a	 divisional	 basis)	 and	 is	 considered	 to	 be	 an	 operating	 segment.
The	 chief	 operating	 decision	 maker	 is	 the	 Board	 of	 Directors.		 The	 information	 reviewed	 by	 the	 Board	 of	 Directors	 includes	
the	 revenues	 and	 profits	 before	 finance	 income	 and	 finance	 cost	 of	 the	 individual	 business	 units	 comprising	 each	 division	
and	 in	 total	 for	 each	 division.
For	 the	 purpose	 of	 the	 segmental	 disclosures,	 certain	 non-reportable	 business	 units	 have	 been	 aggregated	 together	 to	
create	 other	 reportable	 segments.		 The	 reported	 segments	 are	 shown	 in	 the	 disclosures	 under	 the	 relevant	 main	 operating	
divisional	 headings.
The	 principal	 activities	 are	 as	 follows:
 Impregnation	 Sealants:	 	 Sealants	 for	 use	 in	 the	 engineering	 industry	 to	 counter	 micro-porosity
 Construction	 Chemicals:	 Chemicals 	 for	 use	 in	 the	 construction	 industry	 to	 prevent	 the	 ingress	 of	 water	 and	 to	
improve	 structural	 integrity
 Surface	 Coatings:	 Application	 of	 a	 range	 of	 surface	 coatings	 to	 customers’	 products
 Chemical	 Process	 Plant:	 Manufacture 	 of	 a	 range	 of	 chemical	 processing	 plant	 and	 equipment page 26
17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
2  Segmental analysis (continued)
Segment	 information	 about	 these	 businesses	 is	 presented	 below.	
Year ended 31 December 2009
	 	 	 	 	 Chemical	
	 Impregnation	 Construction 	 	 Surface	 Process	 Elimina-
	 Sealants	 Chemicals	 	 Coatings 	 	 Plant	 tions
	 	 	 	 	 	 Asia-
	 	 	 UK	 Other	 UK	 Pacific	 UK	 Other	 UK	 	 Total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
External	 segmental	 revenue	 3,237 1,314 1,125 6,876 8,170 1,091 4,387 – 26,200
Inter-segmental	 revenues	 250 – 78 – – – 256 (584) –
Total	 segmental	 revenue	 3,487 1,314 1,203 6,876 8,170 1,091 4,643 (584) 26,200
Segmental	 result	 	
pre-depreciation	 	 574 67  (137) 48 840 53 142 – 1,587
Depreciation	 	 (5) (38) (14) (151) (351) (66) (31) – (656)
Segmental	 result	 	
post-depreciation	 	 569 29 (151) (103) 489 (13) 111 – 931
Unallocated	 corporate	 income	 	 	 	 	 	 	 	 	 –
Profit	 from	 operations	 	 	 	 	 	 	 	 	 931
Finance	 income	 	 	 	 	 	 	 	 	 	 40
Finance	 costs	 	 	 	 	 	 	 	 	 	(106)
Profit	 before	 taxation		 	 	 	 	 	 	 	 	 865
Taxation	 	 	 	 	 	 	 	 	 	 (96)
Profit	 after	 taxation	 	 	 	 	 	 	 	 	 	 769
	
	
	 	 	 	 Chemical 	 	
	 Impregnation	 Construction	 Surface	 Process
	 Sealants	 Chemicals	 	 Coatings 	 	 Plant
	 	 	 	 	 	 Asia-
	 	 	 UK	 Other	 UK	 Pacific	 UK	 Other	 UK	 Total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
Segmental	 trade	 receivables,	
amounts	 due	 from	 contract	
customers	 and	 inventory	 	 1,009 425  508  3,011 2,047  412 2,774 10,186
Intangible	 assets	 	 	 	 	 	 	 	 	 2,981
Property,	 plant	 and	 equipment	 	 	 	 	 	 	 	 5,702
Investments	 	 	 	 	 	 	 	 	 26
Other	 long-term	 receivables	 	 	 	 	 	 	 	 858
Other	 receivables	 	 	 	 	 	 	 	 	 275
Prepayments	 and	 accrued	 income	 	 	 	 	 	 	 	 604
Corporation	 tax	 	 	 	 	 	 	 	 	 14
Cash	 and	 cash	 equivalents	 	 	 	 	 	 	 	 1,160
	 	 	 	 	 	 	 	 	 21,806
	
	 	 	 	 Chemical	 	
	 Impregnation	 Construction 	 	 Surface	 Process	 Corporate
	 Sealants	 Chemicals	 Coatings	 	 Plant	 Assets
	 	 	 	 	 	 Asia-
	 	 	 UK	 Other	 UK	 Pacific	 UK	 Other	 UK	 UK	 Total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
Capital	 additions	 	 — 12 8 261  252 147  3  12  695
	 2009
Annual Report and Accounts
page 27
17666	 20/05/2010	 Proof	10
2  Segmental analysis (continued)
Year ended 31 December 2008
	 	 	 	 	 Chemical	
	 Impregnation	 Construction 	 	 Surface	 Process	 Elimina-
	 Sealants	 Chemicals	 	 Coatings 	 	 Plant	 tions
	 	 	 	 	 	 Asia-
	 	 	 UK	 Other	 UK	 Pacific	 UK	 Other	 UK	 	 Total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
External	 segmental	 revenue	 4,714	 1,223	 1,676 	 	 5,264	 9,259	 601	 4,264	 –	 27,001
Inter-segmental	 revenues	 26	 –	 –	 –	 –	 –	 73 	 	 (99)	 –
Total	 segmental	 revenue	 4,740	 1,223	 1,676 	 	 5,264	 9,259	 601	 4,337 	 	 (99)	 27,001
Segmental	 result	
pre-depreciation	 	 1,141	 37	 (26) 	 	 188	 922	 60	 271	 –	 2,593
Depreciation	 	 (21)	 (26)	 (26) 	 	 (101)	 (305)	 (52)	 (35)	 –	 (566)
Segmental	 result	 	
post-depreciation	 	 1,120	 11	 (52) 	 	 87	 617	 8	 236	 –	 2,027
Unallocated	 corporate	 income	 	 	 	 	 	 	 	 	 403
Profit	 from	 operations	 	 	 	 	 	 	 	 	 2,430
Finance	 income	 	 	 	 	 	 	 	 	 	 139
Finance	 costs	 	 	 	 	 	 	 	 	 	 (206)
Profit	 before	 taxation		 	 	 	 	 	 	 	 	 2,363
Taxation	 	 	 	 	 	 	 	 	 	 (810)
Profit	 after	 taxation	 	 	 	 	 	 	 	 	 	 1,553
	
	 	 	 	 Chemical 	 	
	 Impregnation	 Construction	 Surface	 Process
	 Sealants	 Chemicals	 	 Coatings 	 	 Plant
	 	 	 	 	 	 Asia-
	 	 	 UK	 Other	 UK	 Pacific	 UK	 Other	 UK	 Total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
Segmental	 trade	 receivables,	
amounts	 due	 from	 contract	
customers	 and	 inventory	 	 1,149	 346 	 	 410 	 	 3,079	 2,839 	 	 214	 959	 8,996
Intangible	 assets	 	 	 	 	 	 	 	 	 2,952
Property,	 plant	 and	 equipment	 	 	 	 	 	 	 	 5,837
Investments	 	 	 	 	 	 	 	 	 26
Other	 receivables	 	 	 	 	 	 	 	 	 476
Prepayments	 and	 accrued	 income	 	 	 	 	 	 	 	 577
Corporation	 tax	 	 	 	 	 	 	 	 	 3
Cash	 and	 cash	 equivalents	 	 	 	 	 	 	 	 1,015
	 	 	 	 	 	 	 	 	 	 19,882
	
	 	 	 	 Chemical	 	
	 Impregnation	 Construction 	 	 Surface	 Process	 Corporate
	 Sealants	 Chemicals	 Coatings	 	 Plant	 Assets
	 	 	 	 	 	 Asia-
	 	 	 UK	 Other	 UK 	 	 Pacific	 UK	 Other	 UK	 UK	 Total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
Capital	 additions	 	 5	 2	 23 	 	 569 	 	 896	 349	 18	 —	 1,862
In	 the	 above	 tables,	 UK	 relates	 to	 UK	 based	 businesses	 and	 Other	 relates	 to	 non-UK	 based	 businesses.	
Consolidation	 journals	 are	 considered	 immaterial	 by	 the	 Board	 of	 Directors	 and	 have	 been	 netted	 off	 in	 the	 Operating	 	
division	 to	 which	 they	 relate. page 28
17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
2  Segmental analysis (continued)
	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 £000	 £000
Analysis	 of	 revenues	 by	 location	 of	 customer
United	 Kingdom	 	 	 	 	 	 12,849	 14,084
Australia	 	 	 	 	 	 2,715	 2,010
Rest	 of	 the	 World	 	 	 	 	 	 10,636	 10,907
	 	 	 	 	 	 	 26,200	 27,001
Analysis	 of	 non-current	 assets	 by	 location	
United	 Kingdom	 	 	 	 	 	 7,322	 6,579
Rest	 of	 the	 World	 	 	 	 	 	 2,245	 2,236
	 	 	 	 	 	 	 9,567	 8,815
3 Profit from operations
	 	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 	 £000	 £000
This	 is	 stated	 after	 charging:
Depreciation	 of	 tangible	 fixed	 assets	 	 	 	 	 656	 566
Loss/(profit)	 on	 disposal	 of	 property,	 plant
and	 equipment	 	 	 	 	 	 	 	 	 15	 	 (378)
Impairment	 of	 intangible	 fixed	 assets	 	 	 	 	 	 15	 	 –
Profit	 on	 disposal	 of	 operation	 	 	 	 	 	 	 862	 –
Auditors’	 remuneration	 –	 fees 	 payable	 to	 the	 Company’s	 auditors	 for	 the
	 	 	 audit 	 of	 the	 Company’s	 annual	 accounts	 	 	 10	 6
	 	 –	 fees 	 payable	 to	 the	 Company’s	 auditors	 and	 its
	 	 	 associates 	 for	 other	 services:
	 	 	 The 	 audit	 of	 the	 Company’s	 subsidiaries,	 pursuant
	 	 	 to 	 legislation	 	 	 	 	 83	 97
	 	 	 Taxation 	 services	 	 	 	 17	 35
	 	 	 Services 	 relating	 to	 corporate	 finance	 transactions	 	 8	 8
	 	 	 Other	 	 	 	 	 –	 23
Cost	 of	 inventories	 recognised	 as	 an	 expense	 	 	 	 	 9,504	 9,211
Cost	 of	 inventories	 written	 off	 during	 the	 year	 	 	 	 	 48	 	 105	
Research	 	 	 	 	 	 	 110	 176
Operating	 lease	 rentals	 –	 plant 	 and	 machinery	 	 	 	 290	 263
	 	 –	 properties 	 	 	 	 	 	 433	 	 344
Share	 option	 expense	 	 	 	 	 	 	 –	 17
Foreign	 exchange	 losses/(profits)	 	 	 	 	 	 	 98	 (384) 2009
Annual Report and Accounts
page 29
17666	 20/05/2010	 Proof	10
4 Finance income 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Interest	 on	 bank	 deposits	 	 	 	 	 	 40	 139
5  Finance costs
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Interest	 on	 bank	 loans	 and	 overdrafts	 	 	 	 	 	 61	 196
Hire	 purchase	 interest	 	 	 	 	 	 15	 	 10
Other	 	 	 	 	 	 	 30	 	 –
	 	 	 	 	 	 	 	 106	 	 206
6  Employees
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 Number	 Number
The	 average	 number	 of	 employees,	 including	 Executive	 Directors,	 during	 the	 year	 comprised:
Office	 and	 management	 	 	 	 	 157	 152
Manufacturing	 	 	 	 	 	 182	 195
	 	 	 	 	 	 	 	 339	 347
	 	 	 	 	 	 	 	 £000	 £000
Staff	 costs,	 including	 Executive	 Directors,	 during	 the	 year	 amounted	 to:
Wages	 and	 salaries	 	 	 	 	 	 8,253	 8,243
Social	 security	 costs	 	 	 	 	 	 682	 725
Other	 pension	 costs	 (Note	 27)	 	 	 	 	 385	 425
Share	 option	 expense		 	 	 	 	 –	 17
	 	 	 	 	 	 	 9,320	 9,410 page 30
17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
7   Taxation 
	 	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 	 £000	 £000
UK	 Corporation	 Tax	 –	 charge 	 for	 the	 year	 	 	 	 89	 628
	 	 –	 adjustment 	 in	 respect	 of	 previous	 periods	 	 	 	 (45)	 	 36
Current	 tax	 on	 foreign	 income	 for	 the	 year	 	 	 	 	 	 20	 87
	 	 	 	 	 	 	 	 	 64	 751
Deferred	 tax	 –	 transfer 	 to	 deferred	 tax	 account	 	 	 	 39	 	 45	
	 	 –	 adjustment 	 in	 respect	 of	 previous	 periods	 	 	 	 (7)	 14
	 	 	 	 	 	 	 	 96	 810
The	 tax	 assessed	 in	 the	 year	 is	 lower	 than	 the	 standard	 rate	 of	 corporation	 tax	 in	 the	 UK.
	 	 	 	 	 	 	 	 2009	 2008
The	 difference	 is	 explained	 below:	 	 	 	 	 	 	 £000	 £000
Tax	 on	 profit	 on	 ordinary	 activities	 at	 the	 standard	 rate	 of
corporation	 tax	 in	 the	 UK	 of	 28%	 	 	 	 	 	 	 242	 662
Adjustment	 in	 respect	 of	 previous	 periods	 	 	 	 	 	 (45)	 	 36
Prior	 year	 adjustments	 in	 deferred	 tax	 	 	 	 	 (7)	 14
Expenses	 not	 deductible	 for	 tax	 purposes	 	 	 	 	 48	 98
Tax	 effect	 of	 property	 disposal	 	 	 	 	 	 	 –	 (113)
Withdrawal	 of	 tax	 allowances	 	 	 	 	 	 	 	 85	 	 85 	
Withholding	 tax	 paid	 	 	 	 	 	 	 	 21	 –
Income	 not	 taxable	 for	 tax	 purposes	 	 	 	 	 	 	 –	 (116)
Unrelieved	 tax	 losses	 	 	 	 	 	 	 	 61	 192 	
Capital	 losses	 utilised	 	 	 	 	 	 	 	 (279)	 –	
Effect	 of	 changes	 in	 tax	 rates	 	 	 	 	 	 	 – 	 9
Effect	 of	 different	 tax	 rates	 of	 subsidiaries	 in	 other	 jurisdictions	 	 	 	 	 –	 (57)
Other	 deferred	 tax	 movement	 	 	 	 	 	 	 (30) 	 –
Total	 tax	 charge	 for	 the	 year	 	 	 	 	 	 	 	 96	 	 810
8   Dividends
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Final	 dividend	 paid	 of	 2.0p	 (2008:	 2.6p)	 per	 share	 	 	 	 	 291	 378
Interim	 dividend	 paid	 of	 2.0p	 (2008:	 2.0p)	 per	 share	 	 	 	 291	 291
	 	 	 	 	 	 	 	 582	 669
Dividends	 declared	 after	 the	 balance	 sheet	 date	 but	 before	 approval	 of
financial	 statements	 of	 2.3p	 (2008:	 2.0p)	 per	 share		 	 	 	 335	 291
Dividends	 are	 recognised	 in	 the	 financial	 statements	 when	 they	 are	 paid	 and	 not	 declared.	 The	 2009	 financial	 statements	
recognised	 the	 interim	 dividend	 that	 was	 both	 paid	 and	 declared	 in	 2009,	 and	 also	 the	 final	 dividend	 that	 was	 paid	 in	 2009	
but	 declared	 in	 the	 prior	 year	 financial	 statements	 for	 the	 year	 ended	 31	 December	 2008. 2009
Annual Report and Accounts
page 31
17666	 20/05/2010	 Proof	10
9   Earnings per ordinary share 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Profit	 on	 ordinary	 activities	 after	 tax	 	 	 	 	 	 925	 1,562
Basic earnings per ordinary share
	 	 	 	 	 	 	 Number	 Number
	 	 	 	 	 	 	 000s	 000s
Weighted	 average	 number	 of	 ordinary	 shares	 in	 issue	 	 	 	 14,546	 14,546
Earnings	 per	 share	 	 	 	 	 	 6.4p	 10.7p
Diluted earnings per share
	 	 	 	 	 	 	 Number	 Number
	 	 	 	 	 	 	 	 000s	 000s
Weighted	 average	 number	 of	 ordinary	 shares	 in	 issue	 including	 relevant	 share	 options	 	 14,588	 15,053
Earnings	 per	 share	 	 	 	 	 	 	 6.3p	 10.4p
10 Intangible assets 
	 	 	 	 	 	 	 Brands	 Goodwill	 Total
Cost or valuation	 	 	 	 	 £000	 £000	 £000
At	 1	 January	 2008	 	 	 	 	 500	 1,990	 2,490
Additions	 	 	 	 	 –	 	 156	 156
Acquisition	 of	 subsidiary	 	 	 	 –	 	 140	 140
Foreign	 exchange	 differences	 	 	 	 –	 	 222 	 	 222
Disposals	 	 	 	 	 –	 (16)	 (16)
At 1 January 2009     500 2,492 2,992
Additions	 	 	 	 	 –	 	 94	 	 94
Foreign	 exchange	 differences	 	 	 	 –	 (44)	 (44)
At 31 December 2009     500 2,542 3,042
Amortisation
At	 1	 January	 2008	 	 	 	 	 –	 	 53 	 	 53
Disposals	 	 	 	 	 –	 	 (16) 	 	 (16)
Foreign	 exchange	 differences	 	 	 	 –	 	 3	 	 3
At 1 January 2009     –  40 40
Impairment	 provision	 	 	 	 	 –	 	 15	 	 15
Foreign	 exchange	 differences	 	 	 	 –	 	 6	 6
At 31 December 2009     – 61 61
Net book value
At 31 December 2009     500 2,481 2,981
At	 1	 January	 2009	 	 	 	 	 500	 2,452	 2,952
At	 1	 January	 2008	 	 	 	 	 500	 1,937	 2,437
Impairment of goodwill and brands 
The	 recoverable	 amount	 of	 each	 cash	 generating	 unit	 (CGU)	 connected	 to	 the	 brand’s	 value	 has	 been	 determined	 from	 	
value-in-use	 calculations	 based	 on	 cash	 flow	 assumptions	 for	 a	 five	 year	 period	 to	 31	 December	 2014,	 extrapolated	 with	 no	
growth	 to	 31	 December	 2019.	
The	 TAM	 brand	 has	 been	 assessed	 as	 having	 an	 indefinite	 useful	 life	 when	 coupled	 with	 continuing	 market	 spend	 to	 	
maintain	 the	 brand.	 During	 2009	 the	 TAM	 Group	 expanded	 into	 new	 product	 ranges,	 new	 markets	 and	 new	 territories,	 and	
the	 part	 disposal	 of	 TAM	 International	 in	 April	 2010	 provided	 further	 evidence	 of	 the	 value	 of	 the	 brand.	 The	 TAM	 brand	 is	
therefore	 still	 considered	 to	 have	 an	 indefinite	 useful	 life.	
Operating	 margins	 have	 been	 based	 on	 past	 experience	 and	 future	 expectations	 in	 the	 light	 of	 anticipated	 economic	 and	 	
market	 conditions.	 Discount	 rates	 are	 based	 on	 the	 Group’s	 current	 conservative	 assessment	 of	 specific	 risks	 related	 to	 the	 CGU.	 page 32
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2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
10 Intangible assets (continued)
	 	 	 	 	 	 MX	 Applied 	
	 	 	 	 	 TAM	 Systems	 Precision	 Hi-Tech
	 	 	 	 	 International	 International	 Coatings	 Coatings	 Others
Discount	 rate	 	 	 13%	 13%	 13%	 13% 	 	 13%
	 	 	 	 	 £000	 £000	 £000	 £000 	 	 £000
Goodwill	 	 	 1,147	 475	 315	 470 	 	 74
Brands	 	 	 500	 –	 –	 –	 –
There	 is	 no	 impairment	 of	 goodwill	 or	 brands.	 The	 Directors	 do	 not	 believe	 that	 the	 impairment	 reviews	 are	 sensitive	 to	
changes	 in	 major	 assumptions.	 The	 Directors	 used	 a	 discount	 rate	 of	 10%	 in	 the	 previous	 year.	 All	 other	 assumptions	 in	 the	
current	 and	 prior	 year	 remain	 the	 same.	
11 Property, plant and equipment 
	 	 	 	 	 Long
	 	 	 	 	 Freehold	 	 leasehold	 Plant,
	 	 	 	 	 land	 and	 land 	 and	 vehicles 	 and
	 	 	 	 	 buildings	 buildings	 fixtures	 Computers	 Total
Cost	 	 	 £000	 £000	 £000	 £000	 £000
At	 1	 January	 2008	 	 	 3,065	 577	 4,037	 354	 8,033
Additions	 	 	 –	 	 127	 985	 30 	 	 1,142
Acquisition	 of	 subsidiary	 	 –	 –	 424	 –	 424
Exchange	 differences		 	 –	 	 26 	 	 295 	 	 9	 	 330
Reclassified	 	 	 –	 –	 	 11	 –	 	 11
Disposals	 	 	 –	 –	 (175)	 (14)	 (189)
At 1 January 2009   3,065 730 5,577 379 9,751
Additions	 	 	 	 86	 	 18	 412	 72	 	 588
Acquisition	 of	 subsidiary	 	 –	 –	 	 13	 –	 	 13
Exchange	 differences		 	 –	 (3)	 	 (43) 	 	 (4)	 (50)
Reclassified	 	 	 –	 –	 	 (3)	 	 3	 	 –	
Disposals	 	 	 –	 	 (16)	 (80)	 (2)	 (98)
At 31 December 2009   3,151 729 5,876 448  10,204 2009
Annual Report and Accounts
page 33
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11 Property, plant and equipment (continued)
	 	 	 	 	 	 	 Long 	
	 	 	 	 Freehold	 leasehold	 Plant,
	 	 	 	 land 	 and	 land 	 and	 vehicles 	 and
	 	 	 	 buildings	 buildings	 fixtures	 Computers	 Total
Depreciation	 	 	 £000	 £000	 £000	 £000	 £000
At	 1	 January	 2008	 	 	 507	 97	 2,546	 250	 3,400
Provided	 during	 the	 year	 	 32	 36	 443	 55	 566
Exchange	 differences		 	 –	 	 11	 	 69	 5	 	 85
Reclassified	 	 	 –	 –	 	 11	 –	 	 11
Disposals	 	 	 –	 –	 (136)	 	 (12)	 (148)
At 1 January 2009   539  144  2,933 298  3,914
Provided	 during	 the	 year	 	 32 	 	 34 	 	 545 	 	 45 	 	 656 	
Acquisition	 of	 subsidiary	 	 –	 –	 	 6	 –	 	 6
Exchange	 differences	 	 	 	 –	 (3)	 	 (4) 	 	 (2) 	 	 (9) 	
Reclassified	 	 	 –	 	 –	 	 (1)	 	 1	 	 –	
Disposals	 	 	 –	 	 (16) 	 	 (49) 	 	 –	 	 (65) 	
At 31 December 2009   571  159  3,430  342 4,502 
Net book value
At 31 December 2009   2,580  570  2,446  106  5,702
At	 1	 January	 2009	 	 	 2,526 	 	 586 	 	 2,644 	 	 81 	 	 5,837 	
At	 1	 January	 2008	 	 	 2,558	 480 	 	 1,491 	 	 104	 4,633
The	 net	 book	 value	 of	 plant,	 vehicles	 and	 fixtures	 includes	 £212,000	 (2008:	 £151,000)	 in	 respect	 of	 assets	 held	 under	 finance	
leases	 and	 hire	 purchase	 contracts.	 Depreciation	 charged	 on	 these	 assets	 amounted	 to	 £52,000	 (2008:	 £33,000).	
12 Investments 
	 	 	 	 	 	 	 	 £000 	
Other	 investments	 	 	 	 	 	 	 26
At	 1	 January	 2009	 and	 at	 31	 December	 2009.
There	 is	 no	 material	 change	 in	 the	 fair	 value	 of	 the	 Group’s	 investments.
13 Other receivables
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Amounts	 receivable	 from	 sale	 of	 operation	 	 	 	 	 	 858	 	 –
The	 above	 reflects	 the	 consideration	 receivable	 from	 the	 disposal	 of	 the	 remaining	 wet	 processing	 operations	 on	 the	
Coventry	 site	 due	 after	 more	 than	 one	 year.	 An	 amount	 of	 £116,000	 in	 respect	 of	 this	 disposal	 is	 due	 in	 less	 than	 one	 year	
and	 is	 included	 in	 other	 receivables.
The	 total	 consideration	 receivable	 of	 £974,000	 has	 been	 calculated	 as	 the	 annual	 amounts	 expected	 to	 be	 receivable	
from	 the	 purchaser	 (at	 an	 agreed	 percentage	 of	 specified	 sales	 of	 the	 purchaser)	 over	 the	 next	 ten	 years,	 discounted	 at	 an	
appropriate	 rate.	 There	 is	 no	 set	 termination	 date	 for	 this	 agreement.
After	 the	 deduction	 of	 closure	 costs	 a	 profit	 of	 £862,000	 has	 been	 recognised	 in	 the	 Consolidated	 Statement	 of	
Comprehensive	 Income	 in	 respect	 of	 this	 disposal. page 34
17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
14 Inventories
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Raw	 materials	 and	 consumables	 	 	 	 	 	 1,258 	 1,494
Work	 in	 progress	 	 	 	 	 	 	 51	 	 127 	
Finished	 goods	 	 	 	 	 	 	 1,201 	 1,225
	 	 	 	 	 	 	 	 2,510	 2,846
15  Trade and other receivables 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Amounts	 receivable	 for	 sale	 of	 goods	 	 	 	 	 7,706	 6,230
Allowance	 for	 doubtful	 debts	 	 	 	 	 	 (179)	 (177)
Trade	 receivables	 	 	 	 	 	 7,527	 6,053
Amounts	 due	 from	 contract	 customers	 	 	 	 	 	 149	 	 97
Other	 receivables	 	 	 	 	 	 275	 476
Prepayments	 and	 accrued	 income	 	 	 	 	 604	 	 577
Corporation	 tax	 	 	 	 	 	 14	 3
	 	 	 	 	 	 	 8,569	 7,206
The	 carrying	 values	 of	 the	 Group’s	 trade	 and	 other	 receivables	 (including	 long-term	 receivables)	 are	 denominated	 in	 the	
following	 currencies:
	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Sterling	 	 	 	 	 	 6,158	 4,376
Euros	 	 	 	 	 	 327	 322
US	 dollars	 	 	 	 	 	 230	 217
Hong	 Kong	 dollars	 	 	 	 	 	 217	 236
Singapore	 dollars	 	 	 	 	 	 752	 988
Australian	 dollars	 	 	 	 	 	 657	 535
Other	 currencies	 	 	 	 	 	 	 1,072	 529
	 	 	 	 	 	 	 9,413	 7,203
At	 31	 December	 2009	 trade	 and	 contract	 receivables	 of	 £1,127,000	 (2008:	 £553,000)	 were	 past	 due	 but	 not	 impaired.	 They	
relate	 to	 customers	 with	 no	 default	 history.	 The	 ageing	 of	 these	 receivables	 from	 invoice	 date	 is	 as	 follows:
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Up	 to	 3	 months	 	 	 	 	 	 696	 	 140
3	 to	 6	 months	 	 	 	 	 	 340	 238
6	 to	 12	 months	 	 	 	 	 	 	 91	 175
	 	 	 	 	 	 	 1,127	 553 2009
Annual Report and Accounts
page 35
17666	 20/05/2010	 Proof	10
15  Trade and other receivables (continued)
At	 31	 December	 2009	 trade	 receivables	 of	 £179,000	 (2008:	 £177,000)	 were	 past	 due	 and	 impaired.	 The	 basis	 for	 these	
impairments	 was	 default	 on	 repayments;	 financial	 difficulties	 of	 customers;	 and	 specific	 invoices	 under	 dispute.	 All	 other	
trade	 receivables	 are	 considered	 recoverable,	 no	 objective	 evidence	 has	 arisen	 post	 year-end	 to	 indicate	 otherwise.	
The	 receivables	 relate	 to	 various	 trading	 activities	 of	 the	 Group.	 The	 ageing	 of	 these	 receivables	 is	 as	 follows:	
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Up	 to	 3	 months	 	 	 	 	 	 20	 12
3	 to	 6	 months	 	 	 	 	 	 62	 64
6	 to	 12	 months	 	 	 	 	 	 	 97	 	 101
	 	 	 	 	 	 	 	 179	 177
The	 Group	 records	 impairment	 losses	 on	 its	 trade	 receivables	 separately	 from	 gross	 receivables.	 The	 movements	 on	 this	
allowance	 account	 during	 the	 year	 are	 as	 follows:	
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Opening	 balance	 	 	 	 	 	 177	 148
Acquisition	 of	 subsidiary	 	 	 	 	 –	 	 101
Increases	 in	 provisions	 	 	 	 	 99	 86
Amounts	 utilised	 	 	 	 	 	 (22) 	 (118)
Amounts	 released	 	 	 	 	 	 (80)	 (52)
Foreign	 exchange	 differences	 arising	 	 	 	 	 	 5	 	 12
	 	 	 	 	 	 	 	 179	 177
16  Cash and cash equivalents
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Cash	 	 	 	 	 	 	 1,160 	 1,015
Within	 the	 Cash	 Flow	 Statement,	 the	 Cash	 and	 cash	 equivalents	 line	 includes	 bank	 overdrafts	 of	 £170,000	 (2008:	 £188,000).	
The	 currency	 distribution	 of	 cash	 and	 cash	 equivalents	 at	 31	 December	 was	 as	 follows:
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Sterling	 	 	 	 	 	 	 119	 	 66
Euros	 	 	 	 	 	 	 190	 	 52
US	 dollars	 	 	 	 	 	 	 205	 	 139 	
Hong	 Kong	 dollars	 	 	 	 	 	 135	 	 172
Singapore	 dollars	 	 	 	 	 	 	 88	 	 102
Australian	 dollars	 	 	 	 	 	 110	 	 272
Other	 currencies	 	 	 	 	 	 313	 	 212
	 	 	 	 	 	 	 1,160 	 1,015 page 36
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2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
17  Current other financial liabilities 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Bank	 overdraft	 (secured)	 	 	 	 	 170	 188
Bank	 loans	 (secured)	 	 	 	 	 	 273	 214
Finance	 leases	 and	 hire	 purchase	 agreements	 (secured)	 	 	 	 86	 53
Other	 loans	 	 	 	 	 	 –	 	 57
	 	 	 	 	 	 	 	 529	 512
The	 bank	 overdraft	 and	 loans	 are	 secured	 over	 certain	 of	 the	 Group’s	 assets	 and	 undertakings	 and	 are	 denominated	 in	
Sterling	 and	 Taiwanese	 dollars.
The	 finance	 leases	 and	 hire	 purchase	 agreements	 are	 secured	 on	 the	 assets	 to	 which	 they	 relate.
The	 currency	 distribution	 of	 current	 financial	 liabilities	 at	 31	 December	 was	 as	 follows:
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Sterling	 	 	 	 	 	 366	 445
Hong	 Kong	 dollars	 	 	 	 	 	 	 34	 	 10
Singapore	 dollars	 	 	 	 	 	 3	 4
Australian	 dollars	 	 	 	 	 	 53	 	 39
Taiwan	 dollars	 	 	 	 	 	 	 73	 	 14 	
	 	 	 	 	 	 	 	 529	 512
18  Current trade and other payables
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Trade	 payables	 	 	 	 	 	 2,167	 2,080
Amounts	 due	 to	 contract	 customers	 	 	 	 	 	 8	 51
Other	 taxation	 and	 social	 security	 costs	 	 	 	 	 	 441	 639
Other	 payables	 	 	 	 	 	 	 260	 384
Accruals	 and	 deferred	 income	 	 	 	 	 	 2,052	 	 926
Payments	 on	 account	 	 	 	 	 	 2,474 	 300
	 	 	 	 	 	 	 	 7,402	 4,380
19  Provisions 
	 	 	 	 	 	 	 	 2009 
        Total 
        £000 
At	 1	 January	 2009	 	 	 	 	 	 	 114
Additional	 provision	 in	 the	 year	 	 	 	 	 	 34
Release	 of	 provision	 in	 the	 year	 	 	 	 	 	 (16)
Utilisation	 of	 provision	 	 	 	 	 	 (33)
At 31 December 2009 	 	 	 	 	 	 	 99
All	 of	 the	 above	 amounts	 relate	 to	 warranties	 and	 are	 included	 within	 current	 liabilities.
The	 warranty	 provisions	 relate	 to	 the	 Chemical	 Process	 Plant	 manufacturing	 operation.	 Standard	 warranty	 terms	 are	 one	 to	
two	 years. 2009
Annual Report and Accounts
page 37
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20 Current tax liabilities
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
UK	 corporation	 tax	 	 	 	 	 	 –	 471
Foreign	 tax	 	 	 	 	 	 	 32	 182
	 	 	 	 	 	 	 	 32	 653
21  Non-current other financial liabilities
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Bank	 loans	 (secured)	 	 	 	 	 	 350	 550
Other	 loans	 	 	 	 	 	 	 995	 	 1,370
Finance	 leases	 and	 hire	 purchase	 (secured)	 	 	 	 	 	 115	 80
	 	 	 	 	 	 	 	 1,460	 2,000
The	 currency	 distribution	 of	 non-current	 financial	 liabilities	 at	 31	 December	 was	 as	 follows:
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Sterling	 	 	 	 	 	 373	 672
US	 dollars	 	 	 	 	 	 	 93	 	 104
Hong	 Kong	 dollars	 	 	 	 	 	 386	 872
Australian	 dollars	 	 	 	 	 	 	 597	 352
Singapore	 dollars	 	 	 	 	 	 	 11	 –
	 	 	 	 	 	 	 1,460	 2,000
Maturity of debt
	 Loans	 &	 overdrafts	 Finance	 leases
	 	 	 	 	 	 2009	 2008	 2009	 2008
	 	 	 	 	 	 £000	 £000	 £000	 £000
In	 one	 year	 or	 less	 	 	 	 452	 426	 100	 65
In	 more	 than	 one	 year	 but	 not	 more	 than	 two	 years	 	 	 1,122	 	 1,477	 	 79	 52
In	 more	 than	 two	 years	 but	 not	 more	 than	 five	 years	 	 247	 517	 	 48	 31
	 	 	 	 	 1,821	 2,420	 	 227	 	 148
The	 bank	 loans	 are	 repayable	 by	 equal	 monthly	 instalments	 and	 interest	 is	 payable	 at	 1.25%	 above	 bank	 base	 rate.	 The	
repayment	 figures	 include	 capital	 and	 interest.	 Interest	 on	 the	 bank	 overdraft	 is	 payable	 at	 2%	 above	 bank	 base	 rate.
The	 above	 analysis	 assumes	 no	 movement	 in	 base	 rate. page 38
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2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
22  Non-current tax liabilities 
The	 amount	 of	 deferred	 taxation	 provided,	 which	 relates	 to	 accumulated	 depreciation	 being	 lower	 than	 accumulated	 capital	
allowances,	 and	 other	 temporary	 differences,	 is	 as	 follows:	
	 	 	 	 	 	 Accelerated 	
	 	 	 	 	 	 	 capital	 Temporary
	 	 	 	 	 	 	 allowances	 differences
	 	 	 	 	 	 	 2009 2009 2009
       £000 £000 £000
At	 1	 January	 2009	 	 	 	 	 262  160 422
Credit	 to	 profit	 or	 loss	 	 	 	 	 (24) (8) (32)
Other	 movements	 	 	 	 	 85  6 91
At 31 December 2009 	 	 	 	 323 158 481
Deferred	 tax	 assets	 have	 been	 recognised	 in	 respect	 of	 all	 such	 tax	 losses	 and	 other	 temporary	 differences	 giving	 rise	 to	
deferred	 tax	 assets	 where	 the	 Directors	 believe	 it	 is	 probable	 that	 the	 assets	 will	 be	 recovered.	
Other	 movements	 relates	 to	 the	 withdrawal	 of	 certain	 tax	 allowances.	
	 	 	 	 	 	 Accelerated 	
	 	 	 	 	 	 	 capital	 Temporary
	 	 	 	 	 	 	 allowances	 differences
	 	 	 	 	 	 	 2008	 2008	 2008
	 	 	 	 	 	 	 £000	 £000	 £000
At	 1	 January	 2008	 	 	 	 	 180	 (36)	 144
Credit	 to	 profit	 or	 loss	 	 	 	 	 (3)	 	 (23)	 (26)
Disposal	 of	 subsidiary	 	 	 	 	 –	 	 90	 90
Other	 movements	 	 	 	 	 	 85	 	 129	 	 214
At	 31	 December	 2008	 	 	 	 	 262	 160	 422
23  Obligations under finance leases
Amounts	 payable	 under	 finance	 leases:
	 	 	 Present	 value	
	 Minimum	 lease	 of	 minimum
	 payments	 lease	 payments
	 	 	 	 	 	 2009	 2008	 2009	 2008
	 	 	 	 	 	 £000	 £000	 £000	 £000
Within	 one	 year	 	 	 	 	 100	 65	 94	 61
In	 the	 second	 to	 the	 fifth	 year	 inclusive	 	 	 	 127	 84 	 	 107	 72
	 	 	 	 	 	 227	 	 149	 201	 	 133
Less	 future	 finance	 charges	 	 	 	 (26) 	 (16)	 –	 –
Present value of lease obligations    201  133  201  133
Less	 amount	 due	 for	 settlement	 within	 12	 months
(shown	 under	 current	 liabilities)	 	 	 	 	 (86)	 (53)
Amount due for settlement after 12 months 	 	 	 	 	 115	 80 2009
Annual Report and Accounts
page 39
17666	 20/05/2010	 Proof	10
24  Total commitments under operating leases 
	 	 Land	 and	 buildings	 Plant
	 	 	 	 	 	 2009	 2008	 2009	 2008
	 	 	 	 	 	 £000	 £000	 £000	 £000
Payable	 in	 one	 year	 	 	 	 	 426	 	 449 	 	 165	 	 152
Payable	 in	 two	 to	 five	 years	 	 	 1,094 	 1,077	 	 467	 	 263
Payable	 after	 five	 years	 	 	 1,558	 1,624	 –	 –
	 	 	 	 	 3,078 3,150	 632	 415
25  Share capital
	 	 2009	 2008
	 	 	 	 	 	 Number Value	 Number	 Value
	 	 	 	 	 	 000 £000	 000	 £000
Authorised	 –	 ordinary	 shares	 of	 10p	 each	 	 	 18,000 1,800	 18,000	 1,800
Allotted	 and	 fully	 paid	 –	 ordinary	 shares	 of	 10p	 each	 	 14,812 1,481	 14,812	 1,481
266,282	 shares	 were	 held	 by	 the	 Norman	 Hay	 plc	 Employee	 Benefit	 Trust	 at	 31	 December	 2009	 (2008:	 266,282).	
At	 31	 December	 2009	 the	 following	 options	 were	 outstanding,	 including	 those	 relating	 to	 Directors,	 as	 detailed	 on	 page	 12	 	
of	 this	 Annual	 Report:	
(a)	 On 	 289,850	 ordinary	 shares,	 these	 approved	 options	 are	 exercisable	 between	 5	 July	 2009	 and	 4	 July	 2016	 at	 69p	 per	
share.	
(b)	 On	 64,000	 ordinary	 shares,	 these	 approved	 options	 are	 exercisable	 between	 1	 December	 2012	 and	 30	 November	 2019	 	
at	 62.5p	 per		 share.
(c)	 On 	 976,150	 ordinary	 shares,	 these	 unapproved	 share	 options	 are	 exercisable	 between	 1	 December	 2009	 and	 	
30	 November	 2019	 at	 62.5p	 per	 share	 upon	 the	 share	 price	 achieving	 150p	 or	 a	 change	 in	 control.
(d)	 On 	 125,000	 ordinary	 shares,	 these	 approved	 options	 are	 exercisable	 between	 12	 January	 2012	 and	 11	 January	 2019	 at	 	
79.5p	 per	 share. page 40
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2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
26  Acquisitions 
2009
On	 13	 July	 2009	 Advanced	 Surface	 Treatments	 Limited	 (a	 trading	 subsidiary	 of	 Norman	 Hay	 plc)	 acquired	 the	 shares	 of	 ASTEC	
Technologies	 (Dalian)	 Co	 Ltd.	
Had	 the	 acquisition	 occurred	 on	 1	 January	 2009,	 additional	 revenue	 to	 the	 Group	 would	 have	 been	 £565,000	 and	 additional	
profit	 to	 the	 Group	 would	 have	 been	 £79,000.
The	 following	 net	 assets	 were	 acquired:	
	 	 	 	 	 	 	 	 Book 	 and	
	 	 	 	 	 	 	 	 fair 	 value	
	 	 	 	 	 	 	 	 £000 	
Non current assets 
Property,	 plant	 and	 equipment	 	 	 	 	 	 7
Current assets	 	 	 	 	 	 	 150
Current liabilities	 	 	 	 	 	 	 (174)
Net liabilities acquired	 	 	 	 	 	 (17)
Consideration	 –	 costs	 on	 acquisition	 	 	 	 	 	 28
Net	 liabilities	 acquired	 	 	 	 	 	 17
Goodwill	 arising	 on	 acquisition	 	 	 	 	 	 45
2008
On	 17	 July	 2008	 Surface	 Technology	 plc	 (a	 trading	 subsidiary	 of	 Norman	 Hay	 plc)	 acquired	 the	 trade	 and	 assets	 of	 Advanced	
Surface	 Treatments	 Limited	 (AST).	 AST	 operates	 highly	 automated	 plating	 lines	 which	 permit	 greater	 production	 throughput	
than	 the	 plating	 lines	 that	 Surface	 Technology	 plc	 previously	 operated.	
It	 has	 not	 been	 possible	 to	 disclose	 the	 revenue	 and	 profit	 of	 the	 Group	 had	 the	 acquisition	 of	 AST	 occurred	 on	 1	 January	
2008.	 Surface	 Technology	 plc	 acquired	 the	 assets	 of	 AST	 and	 as	 a	 consequence	 the	 financial	 information	 regarding	 the	 trading	
activities	 prior	 to	 the	 acquisition	 date	 of	 17	 July	 2008	 is	 not	 available,	 and	 the	 management	 of	 the	 Group	 cannot	 obtain	 this	
information.	
The	 following	 net	 assets	 were	 acquired:	
	 	 	 	 	 	 	 	 Book 	 and	
	 	 	 	 	 	 	 	 fair 	 value	
	 	 	 	 	 	 	 	 £000 	
Non-current assets 
Property,	 plant	 and	 equipment	 	 	 	 	 	 424
Current assets 	 	 	 	 	 	 343
Current liabilities	 	 	 	 	 	 	 (846)
Deferred tax liability 	 	 	 	 	 	 (90)
Net liabilities acquired	 	 	 	 	 	 (169)
Cash	 consideration	 receivable	 	 	 	 	 	 400
Net	 liabilities	 acquired	 	 	 	 	 	 (169)
Negative	 goodwill	 arising	 on	 acquisition	 	 	 	 	 	 231
The	 net	 cash	 sum	 expended	 in	 the	 prior	 year	 on	 the	 acquisition	 was	 as	 follows:
	 	 	 	 	 	 	 	 	 £000
Cash	 received	 as	 consideration	 	 	 	 	 	 100
Net	 cash	 acquired	 on	 acquisition	 	 	 	 	 	 (310)
	 	 	 	 	 	 	 	 (210) 	 2009
Annual Report and Accounts
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26  Acquisitions (continued)
In	 addition	 to	 the	 consideration	 received	 above,	 a	 further	 £300,000	 was	 due.	 Of	 this,	 £100,000	 was	 received	 in	 April	 2009.	
	
In	 2010,	 a	 further	 £10,000	 and	 assets	 with	 a	 value	 of	 £75,000	 were	 received	 as	 consideration	 in	 respect	 of	 the	 remaining	
£200,000	 deferred	 consideration.	 The	 remaining	 balance	 was	 written	 off	 in	 the	 2009	 financial	 statements.
The	 negative	 goodwill	 of	 £231,000	 arising	 upon	 the	 acquisition	 has	 been	 recognised	 in	 the	 Consolidated	 Statement	 of	
Comprehensive	 Income	 within	 administrative		 expenses	 in	 2008.
	
27  Pension costs 
The	 Group	 operates	 a	 number	 of	 defined	 contribution	 pension	 schemes.	 The	 assets	 of	 these	 schemes	 are	 held	 separately	
from	 those	 of	 the	 Group,	 in	 independently	 administered	 funds.	 Two	 Directors	 are	 members	 of	 a	 scheme.	 A	 pension	 charge	 of	
£385,000	 (2008:	 £425,000)	 represents	 the	 contribution	 payable	 by	 the	 Group	 to	 those	 schemes.	
	
28  Subsequent events 
In	 April	 2010,	 the	 Group	 disposed	 of	 30%	 of	 its	 investment	 in	 TAM	 International	 Group	 Holdings	 Limited	 for	 £2.4m,	 with	 	
the	 possibility	 that	 Normet	 can	 (at	 their	 option)	 acquire	 100%	 of	 the	 share	 capital	 in	 2014.	 The	 consideration	 for	 this	
would	 be	 based	 upon	 a	 multiple	 of	 six	 times	 profit	 of	 the	 business	 in	 the	 year	 immediately	 preceding	 the	 sale.	 Under	 the	
call	 option,	 the	 minimum	 amount	 due	 for	 the	 remainder	 of	 Norman	 Hay’s	 equity	 in	 TAM	 is	 £5.1m	 and	 the	 maximum	 is	
£14.25m.	
29  Related party transactions 
Remuneration of key management personnel
	 	 	 	 	 	 	 2009	 2008
Directors’	 remuneration	 consists	 of:	 	 	 	 	 £000	 £000
Aggregate	 emoluments	 	 	 	 	 407	 396
Pension	 contributions	 	 	 	 	 	 52	 91
Fees	 	 	 	 	 	 80	 74
	 	 	 	 	 	 	 	 539	 561
The	 highest	 paid	 Director	 had	 a	 salary	 of	 £197,000	 (2008:	 £206,000)	 including	 performance	 related	 pay,	 benefits	 in	 kind,	 and	
had	 a	 pension	 contribution	 of	 £32,000	 (2008:	 £38,000).	
The	 Company	 contributed	 £52,000	 (2008:	 £91,000)	 towards	 the	 personal	 pension	 plans	 of	 two	 Directors	 (2008:	 two)	
including	 the	 highest	 paid	 Director.	
The	 share	 option	 expense	 in	 respect	 of	 key	 management	 personnel	 was	 £nil	 (2008:	 £17,000).	 page 42
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2009
Annual Report and Accounts
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
30  Share-based payment 
Norman	 Hay	 plc	 operates	 two	 equity-settled	 share-based	 remuneration	 schemes	 for	 employees:	 a	 long-term	 incentive	
scheme	 and	 an	 unapproved	 scheme	 for	 Executive	 Directors	 and	 senior	 management.	 All	 UK	 employees	 are	 eligible	 to	
participate	 in	 the	 long	 term	 incentive	 scheme,	 the	 only	 vesting	 condition	 is	 that	 the	 employee	 remains	 an	 employee	 of	 the	
Group	 over	 the	 service	 period.	
Under	 the	 unapproved	 scheme,	 the	 shares	 are	 only	 exercisable	 at	 a	 share	 price	 of	 150p	 or	 a	 change	 in	 control.	
	 	 	 	 	 	 2009 2009	 2008	 2008
	 	 	 	 	 	 Weighted	 	 Weighted
	 	 	 	 	 	 average	 	 average
	 	 	 	 	 	 exercise	 	 exercise
	 	 	 	 	 	 (pence) Number	 (pence)	 Number
Outstanding	 at	 the	 beginning	 of	 the	 year	 	 	 69 1,330,000	 69	 1,330,000
Cancelled	 during	 the	 year	 	 	 69  (1,040,150)	 –	 –
Replacement	 options	 issued	 during	 the	 year	 	 	 	 62.5 1,040,150	 –	 –
Granted	 during	 the	 year	 	 	 79.5 125,000	 –	 –
	 	 	 	 	 65 1,455,000	 69	 1,330,000
The	 weighted	 average	 exercise	 price	 of	 options	 outstanding	 at	 the	 end	 of	 the	 year	 was	 65p	 (2008:	 69p).	
At	 the	 year	 end,	 289,850	 options	 (2008:	 nil	 options)	 were	 exercisable.	
The	 Group	 did	 not	 enter	 into	 any	 share-based	 payment	 transactions	 with	 parties	 other	 than	 employees	 during	 the	 current	 or	
previous	 period.	
Details	 of	 all	 outstanding	 share	 options	 are	 disclosed	 in	 Note	 25	 of	 the	 Financial	 Statements,	 including	 periods	 during	 which	
they	 are	 exercisable.	
There	 was	 no	 share	 options	 charge	 during	 the	 year	 as	 the	 charge	 had	 been	 over-provided	 in	 earlier	 years.
The	 following	 information	 is	 relevant	 in	 the	 determination	 of	 the	 fair	 value	 of	 options	 granted	 during	 the	 year	 under	 the	
equity-settled	 share-based	 remuneration	 schemes	 operated	 by	 Norman	 Hay	 plc.
Equity-settled – 125,000 options granted during the year
Option	 pricing	 model	 used	 	 	 	 	 	Black–Scholes
Weighted	 average	 share	 price	 at	 grant	 date	 (pence)	 	 	 	 	 	 76
Exercise	 price	 (pence)		 	 	 	 	 	 79.5
Expected	 option	 life	 (days)	 	 	 	 	 	 1,095
Equity-settled
Expected	 volatility	 	 	 	 	 	 	 20%
Expected	 dividend	 growth	 rate	 	 	 	 	 	 4.6%
Risk-free	 interest	 rate		 	 	 	 	 	 3%
Equity-settled – 64,000 options granted during the year
Option	 pricing	 model	 used	 	 	 	 	 Black–Scholes
Weighted	 average	 share	 price	 at	 grant	 date	 (pence)	 	 	 	 	 	 60.6
Exercise	 price	 (pence)		 	 	 	 	 	 62.5
Expected	 option	 life	 (days)	 	 	 	 	 	 1,095
Equity-settled
Expected	 volatility	 	 	 	 	 	 	 20%
Expected	 dividend	 growth	 rate	 	 	 	 	 	 4.6%
Risk-free	 interest	 rate		 	 	 	 	 	 3% 2009
Annual Report and Accounts
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30  Share-based payment (continued)
Equity-settled – 976,150 options granted during the year
Option	 pricing	 model	 used	 	 	 	 	 	 Monte 	 Carlo
Weighted	 average	 share	 price	 at	 grant	 date	 (pence)	 	 	 	 	 	 60.6
Exercise	 price	 (pence)		 	 	 	 	 	 62.5
Expected	 option	 life	 (days)	 	 	 	 	 	 1,095
Equity-settled
Expected	 volatility	 	 	 	 	 	 	 20%
Expected	 dividend	 growth	 rate	 	 	 	 	 	 4.6%
Risk-free	 interest	 rate		 	 	 	 	 	 3%
31  Financial instruments – Risk Management 
In	 common	 with	 all	 other	 businesses,	 the	 Group	 is	 exposed	 to	 risks	 that	 arise	 from	 its	 use	 of	 financial	 instruments.	 This	 note	
describes	 the	 Group’s	 objectives,	 policies	 and	 processes	 for	 managing	 those	 risks	 and	 the	 methods	 used	 to	 measure	 them.	
Further	 quantitative	 information	 in	 respect	 of	 these	 risks	 is	 presented	 throughout	 these	 financial	 statements.	 There	 have	
been	 no	 substantive	 changes	 in	 the	 Group’s	 exposure	 to	 financial	 instrument	 risks,	 its	 objectives,	 policies	 and	 processes	 for	
managing	 those	 risks	 or	 the	 methods	 used	 to	 measure	 them	 from	 previous	 periods	 unless	 otherwise	 stated	 in	 this	 note.	
Principal financial instruments 
For	 all	 financial	 assets	 and	 liabilities	 the	 book	 value	 is	 an	 approximation	 of	 fair	 value.	
The	 principal	 financial	 instruments	 used	 by	 the	 Group,	 from	 which	 financial	 instrument	 risk	 arises,	 are	 as	 follows:	
Financial	 assets:	
Loans	 and	 receivables	 –	 these	 comprise	 trade	 and	 other	 receivables,	 and	 positive	 cash	 balances	 held	 at	 financial	 institutions.	
Financial	 liabilities:	
Trade	 and	 other	 payables.	
Bank	 borrowings	 and	 other	 loans.	
Finance	 leases	 and	 hire	 purchase	 contracts.
The	 Group	 is	 exposed	 through	 its	 operations	 to	 the	 following	 financial	 risks:	
 Credit	 risk	
 Cash	 flow	 interest	 rate	 risk	
 Foreign	 exchange	 risk	
 Other	 market	 price	 risk	
 Liquidity	 risk	
General objectives, policies and processes 
The	 Board	 has	 overall	 responsibility	 for	 the	 determination	 of	 the	 Group’s	 risk	 management	 objectives	 and	 policies	 and,	 whilst	
retaining	 ultimate	 responsibility	 for	 them,	 it	 has	 delegated	 the	 authority	 for	 designing	 and	 operating	 processes	 that	 ensure	 the	
effective	 implementation	 of	 the	 objectives	 and	 policies	 to	 the	 Group’s	 finance	 function.	 The	 Board	 receives	 monthly	 reports	
through	 which	 it	 reviews	 the	 effectiveness	 of	 the	 processes	 put	 in	 place	 and	 the	 appropriateness	 of	 the	 objectives	 and	 policies	
it	 sets.	 The	 overall	 objective	 of	 the	 Board	 is	 to	 set	 policies	 that	 seek	 to	 reduce	 risk	 as	 far	 as	 possible	 without	 unduly	 affecting	 the	
Group’s	 competitiveness	 and	 flexibility.	 Further	 details	 regarding	 these	 policies	 are	 set	 out	 on	 the	 following	 pages:	 page 44
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2009
Annual Report and Accounts
31  Financial instruments – Risk Management (continued)
Credit	 Risk	
Credit	 risk	 is	 the	 risk	 of	 financial	 loss	 to	 the	 Group	 if	 a	 customer	 or	 a	 counterparty	 to	 a	 financial	 instrument	 fails	 to	 meet	 its	
contractual	 obligations.	 The	 Group	 is	 mainly	 exposed	 to	 credit	 risk	 from	 credit	 sales.	 It	 is	 Group	 policy,	 implemented	 locally,	
to	 assess	 the	 credit	 risk	 of	 new	 customers	 before	 entering	 into	 contracts,	 by	 obtaining	 reports	 from	 external	 credit	 agencies.	
These	 credit	 ratings	 are	 taken	 into	 account	 by	 the	 Group.	
The	 management	 of	 each	 operating	 business	 has	 established	 credit	 policies	 under	 which	 each	 new	 customer	 is	 analysed	
individually	 for	 creditworthiness	 before	 the	 Group’s	 standard	 payment	 and	 delivery	 terms	 and	 conditions	 are	 offered.	 Their	
review	 includes	 external	 ratings,	 when	 available	 and,	 in	 some	 cases,	 bank	 references.	 Purchase	 limits	 are	 established	 for	 each	
customer,	 which	 represent	 the	 maximum	 open	 amount	 permitted	 without	 requiring	 approval	 from	 senior	 management	 or	
the	 Group	 Chief	 Executive	 if	 appropriate.	 These	 limits	 are	 reviewed	 regularly	 and	 customers	 that	 fail	 to	 meet	 the	 Group’s	
benchmark	 creditworthiness	 may	 transact	 with	 the	 Group	 on	 a	 prepayment	 basis.	
Credit	 risk	 also	 arises	 from	 cash	 and	 cash	 equivalents	 and	 deposits	 with	 banks	 and	 financial	 institutions.	 All	 such	 deposits	 are	
made	 with	 reputable	 banks.	 Quantitative	 disclosures	 of	 the	 credit	 risk	 exposure	 in	 relation	 to	 trade	 and	 other	 receivables,	 are	
disclosed	 in	 Note	 15.	
The	 maximum	 exposure	 to	 credit	 risk	 at	 31	 December	 2009	 is	 £10,573,000	 (31	 December	 2008:	 £8,218,000).	
Cash	 flow	 interest	 rate	 risk	
The	 Group	 is	 exposed	 to	 cash	 flow	 interest	 rate	 risk	 from	 long-term	 borrowings	 at	 variable	 rates.	 Local	 operations	 are	 not	
permitted	 to	 borrow	 long-term	 from	 external	 sources	 without	 permission	 from	 the	 Group.	 During	 2009	 and	 2008,	 the	
Group’s	 borrowings	 at	 variable	 rate	 were	 denominated	 in	 Sterling,	 Hong	 Kong	 dollars	 and	 Australian	 dollars.	 On	 the	 Sterling	
borrowings	 interest	 is	 payable	 at	 2%	 above	 bank	 base	 rate,	 whilst	 for	 the	 borrowings	 denominated	 in	 Hong	 Kong	 dollars	 and	
Australian	 dollars	 interest	 is	 payable	 at	 1.25%	 above	 bank	 base	 rate.	
At	 31	 December	 2009,	 if	 interest	 rates	 on	 the	 Group’s	 borrowings	 had	 been	 100	 basis	 points	 higher	 with	 all	 other	 variables	
held	 constant,	 the	 effect	 on	 profit	 before	 taxation	 would	 have	 been	 an	 increase	 in	 the	 charge	 of	 £43,000	 (2008:	 £12,000).	 A	
reduction	 of	 100	 basis	 points	 would	 have	 had	 an	 equal	 and	 opposite	 effect.	
Foreign	 exchange	 risk	
Foreign	 exchange	 risk	 arises	 because	 the	 Group	 has	 operations	 located	 in	 various	 parts	 of	 the	 world	 whose	 functional	
currency	 is	 not	 the	 same	 as	 the	 Group	 functional	 currency.	 Although	 its	 global	 market	 penetration	 reduces	 the	 Group’s	
operational	 risk	 in	 that	 it	 has	 diversified	 into	 several	 markets,	 the	 Group’s	 net	 assets	 arising	 from	 such	 overseas	 operations	
are	 exposed	 to	 currency	 risk	 resulting	 in	 gains	 or	 losses	 on	 retranslation	 into	 Sterling.	 Foreign	 exchange	 risk	 also	 arises	 when	
individual	 Group	 entities	 enter	 into	 transactions	 denominated	 in	 a	 currency	 other	 than	 their	 functional	 currency.	
The	 Group’s	 policy	 is	 to	 ensure	 that	 all	 inter-Group	 current	 accounts	 are	 settled	 within	 30	 days	 of	 a	 sale	 occurring,	 thus	
minimising	 the	 effects	 of	 currency	 fluctuations.	
The	 effect	 of	 a	 strengthening	 of	 10%	 in	 the	 rate	 of	 exchange	 in	 the	 currencies	 against	 Sterling	 at	 the	 year-end	 date	 would	
have	 resulted	 in	 an	 estimated	 net	 increase	 in	 pre-tax	 profit	 and	 an	 increase	 in	 net	 assets	 of	 £2,000	 (2008:	 £29,000),	 and	
the	 effect	 of	 a	 weakening	 of	 10%	 in	 the	 rate	 of	 exchange	 in	 the	 currencies	 against	 Sterling	 at	 the	 year	 end	 date	 would	 have	
resulted	 in	 an	 estimated	 net	 decrease	 in	 pre-tax	 profit	 for	 the	 year	 and	 a	 decrease	 in	 net	 assets	 of	 approximately	 £2,000	
(2008:	 £31,000).	
Notes to the Group Financial Statements continued
for the year ended 31 December 2009 2009
Annual Report and Accounts
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31  Financial instruments – Risk Management (continued)
Market	 risk	
Market	 risk	 arises	 from	 the	 Group’s	 use	 of	 interest	 bearing,	 tradable	 and	 foreign	 currency	 financial	 instruments.	 It	 is	 the	 risk	
that	 the	 fair	 value	 or	 future	 cash	 flows	 of	 a	 financial	 instrument	 will	 fluctuate	 because	 of	 changes	 in	 interest	 rates	 (interest	
rate	 risk),	 foreign	 exchange	 rates	 (currency	 risk)	 or	 other	 market	 factors	 (other	 price	 risk).	
Liquidity	 risk	
Liquidity	 risk	 arises	 from	 the	 Group’s	 management	 of	 working	 capital	 and	 the	 finance	 charges	 and	 principal	 repayments	 on	
its	 debt	 instruments.	 It	 is	 the	 risk	 that	 the	 Group	 will	 encounter	 difficulty	 in	 meeting	 its	 financial	 obligations	 as	 they	 fall	 due.	
At	 31	 December	 2009	 the	 Group	 had	 unused	 working	 capital	 facilities	 of	 £1,442,000	 (2008:	 £1,312,000).	
The	 annual	 working	 capital	 facility	 was	 increased	 to	 £2,250,000	 on	 12	 February	 2010	 and	 a	 guarantee	 facility	 for	 a	 further	
£2,000,000	 was	 granted,	 after	 the	 Group	 secured	 a	 major	 contract	 with	 Rolls-Royce	 Singapore	 Pte	 Ltd.	
The	 Group’s	 policy	 is	 to	 ensure	 that	 it	 will	 always	 have	 sufficient	 cash	 to	 allow	 it	 to	 meet	 its	 liabilities	 when	 they	 become	 due.	
To	 achieve	 this	 aim,	 it	 reviews	 its	 forward	 cash	 requirement	 on	 a	 monthly	 basis	 for	 a	 minimum	 of	 three	 months	 ahead.	
The	 Board	 receives	 cash	 flow	 projections	 on	 a	 monthly	 basis	 as	 well	 as	 information	 regarding	 cash	 balances.	 At	 the	 year-end	
date,	 these	 projections	 indicated	 that	 the	 Group	 expected	 to	 have	 sufficient	 liquid	 resources	 to	 meet	 its	 obligations	 under	
all	 reasonably	 expected	 circumstances.	 The	 liquidity	 risk	 of	 each	 Group	 entity	 is	 managed	 centrally	 by	 the	 Group	 treasury	
function.	 Each	 operation	 has	 a	 facility	 with	 Group	 treasury,	 the	 amount	 of	 the	 facility	 being	 based	 on	 budgets.	 The	 budgets	
are	 set	 locally	 and	 agreed	 by	 the	 Board	 in	 advance,	 enabling	 the	 Group’s	 cash	 requirements	 to	 be	 anticipated.	 Where	 facilities	
of	 Group	 entities	 need	 to	 be	 increased,	 approval	 must	 be	 sought	 from	 the	 Group	 Chief	 Executive	 and	 where	 the	 amount	 of	
the	 facility	 is	 above	 a	 certain	 level,	 agreement	 of	 the	 Board	 is	 needed.	
Capital Management 
The	 Group	 considers	 its	 capital	 to	 comprise	 its	 ordinary	 share	 capital,	 share	 premium	 and	 accumulated	 retained	 earnings.	
In	 managing	 its	 capital	 the	 Group’s	 primary	 objective	 is	 to	 ensure	 its	 continued	 ability	 to	 provide	 a	 consistent	 return	 for	 its	
equity	 shareholders	 through	 a	 combination	 of	 capital	 growth	 and	 distributions.	
In	 order	 to	 achieve	 this	 objective,	 the	 Group	 monitors	 its	 gearing	 to	 balance	 risks	 and	 returns	 at	 an	 acceptable	 level	 and	 also	
to	 maintain	 a	 sufficient	 funding	 base	 to	 enable	 the	 Group	 to	 meet	 its	 working	 capital	 and	 strategic	 investment	 needs.	 In	
making	 decisions	 to	 adjust	 its	 capital	 structure	 to	 achieve	 these	 aims,	 either	 through	 altering	 its	 dividend	 policy,	 new	 shares	
issues,	 the	 reduction	 of	 debt,	 and	 the	 management	 of	 loans	 between	 Group	 companies,	 the	 Group	 considers	 not	 only	 its	
short-term	 position	 but	 also	 its	 long-term	 operational	 and	 strategic	 objectives.	 page 46
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2009
Annual Report and Accounts
	 	 2009	 2008
	 	 	 	 	 Note	 £000 £000	 £000	 £000
Fixed assets
Tangible	 assets	 	 	 6	 2,499	 	 2,529
Investments	 	 	 7	 13,165	 	 13,165
	 	 	 	 	 	 15,664	 	 15,694
Current assets
Debtors	 	 	 8	 3,800	 	 2,215
Cash	 at	 bank	 and	 in	 hand	 	 	 1	 	 2
	 	 	 	 	 3,801	 	 	 2,217
Creditors	 due	 within	 one	 year	 	 9	 3,322	 	 3,193
Net current assets/(liabilities)	 	 	 	 479	 	 	 (976)
Total assets less current liabilities	 	 	 	 16,143	 	 14,718
Creditors due after one year	 	 10	 9,177	 	 8,160
Provision for liabilities	 	 11	 29	 	 40
	 	 	 	 	 	 (9,206)	 	 (8,200)
Net assets	 	 	 	 	 6,937	 	 6,518
Capital and reserves
Equity	 share	 capital	 	 	 12	 	 1,481	 	 1,481
Share	 premium	 account	 	 13	 	 1,253	 	 1,253
Revaluation	 reserve	 	 	 13	 	 517	 	 524
Capital	 redemption	 reserve	 	 13	 	 94	 	 94
Share	 scheme	 reserve		 	 13	 	 43	 	 43
Profit	 and	 loss	 account	 	 13	 	 3,549	 	 3,123
Shareholders’ funds	 	 	 	 	 6,937	 	 6,518
The	 financial	 statements	 were	 approved	 and	 authorised	 for	 issue	 by	 the	 Board	 on	 19	 May	 2010.
Victor P Bellanti 
Director	
The	 notes	 shown	 on	 pages	 47	 to	 54	 form	 part	 of	 these	 financial	 statements.
Parent Company Balance Sheet 
Prepared	 in	 accordance	 with	 UK	 GAAP	
at 31 December 2009  2009
Annual Report and Accounts
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Notes to the Financial Statements of the Parent Company
1   Basis of presentation 
The	 accounts	 are	 prepared	 under	 the	 historical	 cost	 convention,	 as	 modified	 to	 include	 the	 revaluation	 of	 certain	 assets,	 and	
in	 accordance	 with	 applicable	 United	 Kingdom	 Accounting	 Standards	 and	 the	 Companies	 Act	 2006.	
2   Summary of significant accounting policies 
Land and buildings 
The	 Company	 has	 continued	 to	 follow	 the	 transitional	 arrangements	 of	 FRS	 15	 ‘Tangible	 Fixed	 Assets’	 to	 retain	 the	 carrying	
value	 of	 freehold	 land	 and	 buildings	 as	 at	 31	 December	 1999	 as	 deemed	 cost.	 All	 additions	 since	 this	 date	 are	 stated	 at	 cost.	
Where	 an	 asset	 that	 was	 previously	 revalued	 is	 disposed	 of,	 its	 book	 value	 is	 eliminated	 and	 an	 appropriate	 transfer	 made	
from	 the	 revaluation	 reserve	 to	 the	 profit	 and	 loss	 reserve.	
Depreciation and amortisation 
Depreciation	 and	 amortisation	 are	 provided	 at	 rates	 calculated	 to	 write	 off	 the	 cost	 or	 valuation,	 less	 the	 estimated	 residual	
value	 of	 each	 asset,	 except	 for	 freehold	 land,	 evenly	 over	 its	 expected	 useful	 life	 as	 follows:	
Freehold	 buildings	 	 45	 years
Plant,	 vehicles	 and	 fixtures	 3 	 to	 10	 years
Computer	 equipment	 	 2	 to	 5	 years
Investments 
Investments	 held	 as	 fixed	 assets	 are	 stated	 at	 cost	 less	 any	 provision	 for	 impairment.	
Foreign currency translation 
Where	 transactions	 are	 entered	 into	 by	 an	 operation,	 in	 a	 currency	 other	 than	 the	 operation’s	 functional	 currency,	 the	
transactions	 are	 translated	 at	 the	 rates	 ruling	 when	 they	 occurred.	 Foreign	 currency	 monetary	 assets	 and	 liabilities	 are	
translated	 at	 the	 rates	 ruling	 at	 the	 Balance	 Sheet	 date.	 Any	 differences	 are	 taken	 to	 the	 profit	 and	 loss	 account	 for	 the	 year.	
Deferred taxation 
Deferred	 tax	 balances	 are	 recognised	 in	 respect	 of	 all	 timing	 differences	 that	 have	 originated	 but	 not	 reversed	 by	 the	 Balance	
Sheet	 date	 except	 that:
 deferred	 tax	 is	 not	 recognised	 on	 timing	 differences	 arising	 on	 revalued	 properties	 unless	 the	 Group	 has	 entered	 into	 a	
binding	 sale	 agreement	 and	 is	 not	 proposing	 to	 take	 advantage	 of	 rollover	 relief;	 and	
 the	 recognition	 of	 deferred	 tax	 assets	 is	 limited	 to	 the	 extent	 that	 the	 Group	 anticipates	 making	 sufficient	 taxable	 profits	
in	 the	 future	 to	 absorb	 the	 reversal	 of	 the	 underlying	 timing	 differences.	
Financial Instruments 
Financial	 Instruments	 are	 measured	 initially	 and	 subsequently	 at	 cost.	
Share-based payment 
Where	 share	 options	 are	 awarded	 to	 employees,	 the	 fair	 value	 of	 the	 options	 at	 the	 date	 of	 grant	 is	 charged	 to	 the	 profit	
and	 loss	 account	 over	 the	 vesting	 period.	 Non-market	 vesting	 conditions	 are	 taken	 into	 account	 by	 adjusting	 the	 number	 of	
equity	 instruments	 expected	 to	 vest	 at	 each	 Balance	 Sheet	 date	 so	 that,	 ultimately,	 the	 cumulative	 amount	 recognised	 over	
the	 vesting	 period	 is	 based	 on	 the	 number	 of	 options	 that	 eventually	 vest.	 Market	 vesting	 conditions	 are	 factored	 into	 the	 fair	
value	 of	 the	 options	 granted.	 As	 long	 as	 all	 other	 vesting	 conditions	 are	 satisfied,	 a	 charge	 is	 made	 irrespective	 of	 whether	
the	 market	 vesting	 conditions	 are	 satisfied.	 The	 cumulative	 expense	 is	 not	 adjusted	 for	 failure	 to	 achieve	 a	 market	 vesting	
condition.	 page 48
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Annual Report and Accounts
3   Employees 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Directors’	 remuneration	 consists	 of:
Aggregate	 emoluments	 	 	 	 	 407	 396
Pension	 contributions	 	 	 	 	 	 52	 91
Fees	 	 	 	 	 	 80	 74
	 	 	 	 	 	 	 	 539	 561
The	 highest	 paid	 Director	 had	 a	 salary	 of	 £197,000	 (2008:	 £206,000),	 including	 performance	 related	 pay,	 benefits	 in	 kind	 and	
had	 a	 pension	 contribution	 of	 £32,000	 (2008:	 £38,000).	
The	 Company	 contributed	 £52,000	 (2008:	 £91,000)	 towards	 the	 personal	 pension	 plans	 of	 two	 Directors	 (2008:	 two)	
including	 the	 highest	 paid	 Director.	
4   Dividends
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Final	 dividend	 paid	 of	 2.0p	 (2008:	 2.6p)	 per	 share	 	 	 	 	 291	 378
Interim	 dividend	 paid	 of	 2.0p	 (2008:	 2.0p)	 per	 share	 	 	 	 291	 291
	 	 	 	 	 	 	 582	 669
Dividends	 declared	 after	 the	 Balance	 Sheet	 date	 but	 before	 approval	 of
financial	 statements	 of	 2.3p	 (2008:	 2.0p)	 per	 share		 	 	 	 335	 291 	
Dividends	 are	 recognised	 in	 the	 financial	 statements	 when	 they	 are	 paid	 and	 not	 declared.	 The	 2009	 financial	 statements	
recognised	 the	 interim	 dividend	 that	 was	 both	 paid	 and	 declared	 in	 2009,	 and	 also	 the	 final	 dividend	 that	 was	 paid	 in	 2009	
but	 declared	 in	 the	 prior	 year	 financial	 statements	 for	 the	 year	 ended	 31	 December	 2008.
5  Company profit for the financial year
The	 Company	 has	 taken	 advantage	 of	 the	 exemption	 allowed	 under	 Section	 408	 of	 the	 Companies	 Act	 2006	 and	 has	 not	
presented	 its	 own	 profit	 and	 loss	 account	 in	 these	 financial	 statements.	 The	 Group	 profit	 for	 the	 year	 includes	 a	 profit	 after	
tax	 and	 before	 dividends	 of	 £1,001,000	 (2008:	 £1,281,000)	 which	 is	 dealt	 with	 in	 the	 financial	 statements	 of	 the	 parent	
Company.
Notes to the Financial Statements of the Parent Company 
continued 2009
Annual Report and Accounts
page 49
17666	 20/05/2010	 Proof	10
6   Tangible assets
	 	 	 	 	 Freehold	 Plant,
	 	 	 	 	 	 land	 and	 vehicles
	 	 	 	 	 	 buildings	 and 	 fixtures	 Computers	 Total
	 	 	 	 	 	 £000	 £000	 £000	 £000
Company
Cost or valuation	 	 	 	 2,916	 86	 29	 3,031
At	 1	 January	 2009
Additions	 	 	 	 	 11	 –	 1	 	 12
Disposals	 	 	 	 –	 	 (14)	 –	 	 (14)
At 31 December 2009    2,927 72 30  3,029
Depreciation
At	 1	 January	 2009	 	 	 	 420	 55	 27	 502
Provided	 during	 the	 year	 	 	 25	 15	 2	 42
Disposals	 	 	 	 –	 	 (14)	 –	 (14)
At 31 December 2009    445 56 29 530
Net book value
At 31 December 2009    2,482 16 1 2,499
At	 31	 December	 2008	 	 	 	 2,496	 31	 2	 2,529
	 	 	 	 	 	 	 	 2009	 2008
Freehold	 land	 and	 buildings	 included	 at:	 	 	 	 	 £000	 £000
Open	 market	 value	 on	 16	 November	 1992	 	 	 	 	 2,850	 2,850
Cost	 	 	 	 	 	 77	 	 66
	 	 	 	 	 	 	 2,927	 2,916
The	 historical	 balances	 of	 freehold	 land	 and	 buildings	 are:
Cost	 	 	 	 	 	 2,332	 2,321
Accumulated	 depreciation	 	 	 	 	 (367) 	 (349)
	 	 	 	 	 	 	 1,965	 1,972
7   Investments 
	 	 	 	 	 	 	 	 £000 	
Other	 investments	
Cost	 	 	 	 	 	 	 13,165
At	 1	 January	 2009	 and	 at	 31	 December	 2009 page 50
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2009
Annual Report and Accounts
7   Investments (continued)
Subsidiary undertakings
The	 principal	 undertakings	 in	 which	 the	 Company’s	 interest	 at	 the	 year	 end	 is	 20%	 or	 more	 are	 as	 follows:
	 	 	 	 Country	 of	 Proportion 	 of	 voting
	 	 	 	 incorporation	 rights 	 and	 ordinary
Subsidiary	 undertaking	 or	 registration	 share 	 capital	 held	 Nature	 of	 business
Surface	 Technology	 plc	 England	 100%	 Surface 	 engineering,	 impregnation	 and	
	 	 	 	 	 finishing	 of	 metals.	 Supply	 of	
	 	 	 	 	 impregnation	 equipment	 and
	 	 	 	 	 chemicals	 and	 NDT	 equipment.
Ultraseal	 USA	 Inc	 	 USA	 100%	 Distributors	 of	 impregnation
	 	 	 	 	 equipment	 and	 chemicals.
Lancy	 Technology	 Ltd	 	 England	 75%	 Effluent	 treatment	 systems.
Ultraseal	 Asia	 Ltd	 *	 	 BVI	 75%	 Holding 	 company	 for	 Ultraseal	 Shanghai	 Ltd.
Ultraseal	 Shanghai	 Ltd	 *	 China	 75%	 Processing	 and	 distribution	 centre	 for
	 	 	 	 	 impregnation 	 chemicals	 and	 equipment.
Hi-Tech	 Coatings	 Pty	 Ltd	 *	 Australia	 100%	 Surface 	 engineering	 and	 finishing	 of	 metals.
MX	 Systems	 International	 Ltd	 England	 100%	 Supply	 of	 impregnation	 equipment
	 	 	 	 	 and	 chemistry.
Applied	 Precision	 Coatings	 Ltd	 *	 England	 100%	 Surface 	 engineering	 and	 finishing	 of	 metals.
Advanced	 Surface	 Treatments	 Ltd*	 England	 100%	 Surface 	 engineering	 and	 finishing	 of	 metals.
Armourcote	 Malaysia	 Sdn	 Bhd*	 Malaysia	 100%	 Surface 	 engineering	 and	 finishing	 of	 metals.
ASTEC	 Technologies	 (Dalian)	 Co	 Ltd*	 	 China 	 	 100%	 	 Surface 	 engineering	 and	 finishing	 of	 metals.
TAM	 International	 Group	 Holdings	 Ltd	 England	 75%	 Holding 	 company	 for	 the	 following	 TAM
	 	 	 	 	 trading	 companies:
TAM	 International	 UK	 Ltd	 *	 England	 75%	 Manufacture	 and	 supply	 of	 chemicals	
	 	 	 	 	 for	 the	 construction	 industry.
TAM	 International	 Hong	 Kong	 Ltd	 *	 China	 75%	 Supply	 of	 chemicals	 for	 the	
	 	 	 	 	 construction	 industry.
TAM	 International	 Singapore	 Pte	 Ltd*	 	 Singapore 	 	 75%	 Supply	 of	 chemicals	 for	 the	
	 	 	 	 	 construction	 industry.
TAM	 International	 Australia	 Pty	 Ltd*	 	 Australia	 75%	 Manufacture	 and	 supply	 of	 chemicals
	 	 	 	 	 	 for	 the	 construction	 industry.
TAM	 International	 Taiwan	 Co	 Ltd*	 Taiwan	 49%	 Manufacture	 and	 supply	 of	 chemicals	
	 	 	 	 	 for	 the	 tunneling	 and	 mining	 industry.
PT	 TAM	 International	 Indonesia*	 	 Indonesia	 	 74%	 	 Supply	 of	 chemicals	 for	 the	
	 	 	 	 	 construction	 industry.
All	 the	 above	 subsidiaries	 are	 included	 in	 the	 Consolidated	 financial	 statements.	
For	 all	 undertakings	 listed	 above,	 the	 Country	 of	 operation	 is	 the	 same	 as	 the	 Country	 of	 incorporation	 or	 registration.	
*	 	 These 	 undertakings	 are	 indirectly	 held	 by	 Norman	 Hay	 plc.	 TAM	 International	 Taiwan	 Co	 Limited	 is	 controlled	 by	 	
Norman	 Hay	 plc,	 by	 virtue	 of	 Norman	 Hay	 plc’s	 controlling	 interest	 in	 TAM	 International	 Group	 Holdings	 Limited.	
8   Debtors 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Trade	 debtors	 	 	 	 	 	 –	 46
Amount	 owed	 by	 subsidiaries	 	 	 	 	 3,726	 2,099
Other	 debtors	 	 	 	 	 	 	 15	 	 36
Prepayments	 and	 accrued	 income	 	 	 	 	 	 26	 34
Corporation	 tax	 	 	 	 	 	 33	 –
	 	 	 	 	 	 	 3,800	 2,215
All	 amounts	 included	 in	 debtors	 are	 receivable	 within	 one	 year.
Notes to the Financial Statements of the Parent Company 
continued 2009
Annual Report and Accounts
page 51
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9   Creditors due within one year
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Bank	 overdraft	 and	 loans	 (secured)	 	 	 	 	 2,353	 2,771
Trade	 creditors	 	 	 	 	 	 	 78	 	 103 	
Amounts	 owed	 to	 subsidiaries	 	 	 	 	 716	 138
Taxation	 and	 social	 security	 costs	 	 	 	 	 49	 24
Accruals	 and	 deferred	 income	 	 	 	 	 126 	 107 	
Corporation	 tax	 	 	 	 	 	 –	 50
	 	 	 	 	 	 	 3,322	 3,193
The	 bank	 overdraft	 and	 loans	 are	 secured	 over	 certain	 of	 the	 Group’s	 assets	 and	 undertakings.
10  Creditors due after one year
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
Bank	 loans	 (secured)	 	 	 	 	 	 350	 550
Amounts	 owed	 to	 subsidiaries	 	 	 	 	 8,827	 7,610
	 	 	 	 	 	 	 9,177	 8,160
Loans	 and	 overdrafts	 are	 repayable	 as	 follows:
In	 one	 year	 or	 less	 	 	 	 	 	 2,353	 2,771
In	 more	 than	 one	 year	 but	 not	 more	 than	 two	 years	 	 	 	 350	 550
	 	 	 	 	 	 	 	 2,703	 3,321
11  Provision for liabilities 
The	 amount	 of	 deferred	 taxation	 provided,	 which	 relates	 to	 accumulated	 depreciation	 being	 lower	 than	 accumulated	 capital	
allowances,	 and	 other	 timing	 differences,	 is	 as	 follows:	
	 	 	 	 	 	 	 	 2009 
        £000 
At	 1	 January	 2009	 	 	 	 	 	 	 40
Credit	 to	 profit	 and	 loss	 account	 	 	 	 	 	 (11)
At	 31	 December	 2009	 	 	 	 	 	 	 29
12  Share capital
	 At 31 December 2009	 At 	 31	 December	 2008
	 	 	 	 	 Number Value	 Number	 Value
	 	 	 	 	 	 000 £000	 000	 £000
Authorised	 –	 ordinary	 shares	 of	 10p	 each	 	 	 18,000 1,800	 18,000	 1,800
Allotted	 and	 fully	 paid	 –	 ordinary	 shares	 of	 10p	 each	 	 14,812 1,481	 14,812	 1,481
Details	 of	 movement	 in	 share	 capital	 can	 be	 found	 in	 Note	 25	 to	 the	 Group	 Financial	 Statements. page 52
17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
13  Reserves
	 	 	 Share	 	 Capital	 Share	 Profit
	 	 Share	 premium 	 	 Revaluation	 	 redemption	 scheme	 and 	 loss
	 	 capital	 account	 reserve	 reserve	 reserve	 account	 Total
Company	 £000	 £000	 £000	 £000	 £000	 £000	 £000
At	 1	 January	 2009	 1,481	 1,253	 524	 94	 43	 3,123	 6,518
Movement	 in	 reserves	 – – (7) – – 7 –
Retained	 profit	 for	 the	 year	 – – – – – 1,001 1,001
Dividends	 paid	 in	 year	 – – – – – (582) (582)
At 31 December 2009 1,481 1,253 517 94 43 3,549 6,937
14  Related party transactions 
The	 Company	 is	 exempt	 under	 the	 terms	 of	 Financial	 Reporting	 Standard	 8	 ‘Related	 party	 disclosures’	 from	 disclosing	
related	 party	 transactions	 with	 wholly	 owned	 subsidiaries.	
The	 following	 table	 summarises	 the	 transactions	 with	 related	 parties	 during	 the	 year:
	 	 	 	 	 	 	 Expenses
	 	 	 	 	 	 	 paid	
	 	 	 At	 	 	 	 	 for 	 on	 At 	 31
	 	 	 1	 January	 Loans 	 made/	 Interest	 Management	 behalf 	 of	 December
	 	 	 2009	 (repayments)	 charged	 charges	 subsidiary	 2009
2009	 	 £000	 £000	 £000	 £000	 £000	 £000
TAM	 International	 Group	 Holdings	 Ltd	 1,299 462 27 – – 1,788
TAM	 International	 UK	 Ltd	 45 – – – 18 63
TAM	 International	 Hong	 Kong	 Ltd	 – – – – 15 15
Lancy	 Technology	 Ltd	 	 15 (15) – 15 – 15
	 	 	 1,359 447 27 15 33 1,881
	 	 	 	 	 	 	 Expenses
	 	 	 	 	 	 	 paid	
	 	 	 At	 	 	 	 for 	 on	 At 	 31
	 	 	 1	 January	 Loans 	 made/	 Interest	 Management	 behalf 	 of	 December
	 	 	 2008	 (repayments)	 charged	 charges	 subsidiary	 2008
2008	 	 £000	 £000	 £000	 £000	 £000	 £000
TAM	 International	 Group	 Holdings	 Ltd	 422	 828	 49	 –	 –	 1,299
TAM	 International	 UK	 Ltd	 33	 –	 –	 –	 12	 45
Lancy	 Technology	 Ltd	 	 –	 –	 –	 15	 –	 15
	 	 	 455	 828	 49	 15	 12	 1,359
All	 of	 the	 above	 companies	 are	 75%	 owned	 subsidiary	 undertakings	 of	 Norman	 Hay	 plc	 either	 directly	 or	 indirectly	 owned.
15  Contingent liabilities 
There	 are	 cross-guarantees	 in	 respect	 of	 bank	 borrowings	 of	 other	 Group	 companies.	
At	 31	 December	 2009	 the	 amount	 of	 bank	 loans	 and	 overdrafts	 outstanding	 in	 respect	 thereof	 was	 £194,000	 (2008:	 £nil).
The	 Company	 is	 part	 of	 a	 VAT	 group.	 At	 December	 the	 VAT	 liability	 of	 other	 companies	 in	 that	 VAT	 group	 was	 £102,000	
(2008:	 £205,000)
Notes to the Financial Statements of the Parent Company 
continued 2009
Annual Report and Accounts
page 53
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16  Cash flow statement 
The	 Company	 is	 exempt	 from	 the	 requirement	 to	 publish	 a	 cash	 flow	 statement	 because	 a	 Consolidated	 cash	 flow	
statement	 for	 the	 Group	 has	 been	 presented	 (see	 page	 18).	
17  Share-based payment 
Norman	 Hay	 plc	 operates	 two	 equity-settled	 share-based	 remuneration	 schemes	 for	 employees:	 a	 long-term	 incentive	
scheme	 and	 an	 unapproved	 scheme	 for	 Executive	 Directors	 and	 senior	 management.	 All	 UK	 employees	 are	 eligible	 to	
participate	 in	 the	 long	 term	 incentive	 scheme,	 the	 only	 vesting	 condition	 is	 that	 the	 employee	 remains	 an	 employee	 of	 the	
Group	 over	 the	 service	 period.	
Under	 the	 unapproved	 scheme,	 the	 shares	 are	 only	 exercisable	 at	 a	 share	 price	 of	 150p	 or	 a	 change	 in	 control.	
	 	 	 	 	 	 2009 2009	 2008	 2008
	 	 	 	 	 	 Weighted	 	 Weighted
	 	 	 	 	 	 average	 	 average
	 	 	 	 	 	 exercise	 	 exercise
	 	 	 	 	 (pence) Number	 (pence)	 Number
Outstanding	 at	 the	 beginning	 of	 the	 year	 	 	 69 1,330,000	 69	 1,330,000
Cancelled	 during	 the	 year	 	 	 69  (1,040,150)	 –	 –
Replacement	 options	 issued	 during	 the	 year	 	 	 	 62.5 1,040,150	 –	 –
Granted	 during	 the	 year	 	 	 79.5  125,000	 –	 –
	 	 	 	 	 65 1,455,000	 69	 1,330,000
The	 weighted	 average	 exercise	 price	 of	 options	 outstanding	 at	 the	 end	 of	 the	 year	 was	 65p	 (2008:	 69p).	
289,850	 options	 (2008:	 nil	 options)	 were	 exercisable	 at	 the	 year	 end.	
The	 Group	 did	 not	 enter	 into	 any	 share-based	 payment	 transactions	 with	 parties	 other	 than	 employees	 during	 the	 current	
or	 previous	 period.	
Details	 of	 all	 outstanding	 share	 options	 are	 disclosed	 in	 Note	 25	 of	 the	 Group’s	 Financial	 Statements,	 including	 periods	 over	
which	 they	 are	 exercisable.	
There	 was	 no	 share	 options	 charge	 during	 the	 year	 as	 the	 charge	 had	 been	 over-provided	 in	 earlier	 years.
The	 following	 information	 is	 relevant	 in	 the	 determination	 of	 the	 fair	 value	 of	 options	 granted	 during	 the	 year	 under	 the	
equity-settled	 share-based	 remuneration	 schemes	 operated	 by	 Norman	 Hay	 plc.
Equity-settled – 125,000 options granted during the year
Option	 pricing	 model	 used	 	 	 	 	 	Black–Scholes
Weighted	 average	 share	 price	 at	 grant	 date	 (pence)	 	 	 	 	 	 76
Exercise	 price	 (pence)		 	 	 	 	 	 79.5
Expected	 option	 life	 (days)	 	 	 	 	 	 1,095
Equity-settled
Expected	 volatility	 	 	 	 	 	 	 20%
Expected	 dividend	 growth	 rate	 	 	 	 	 	 4.6%
Risk-free	 interest	 rate		 	 	 	 	 	 3% page 54
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2009
Annual Report and Accounts
17  Share-based payment (continued)
Equity-settled – 64,000 options granted during the year
Option	 pricing	 model	 used	 	 	 	 	 Black–Scholes
Weighted	 average	 share	 price	 at	 grant	 date	 (pence)	 	 	 	 	 	 60.6
Exercise	 price	 (pence)		 	 	 	 	 	 62.5
Expected	 option	 life	 (days)	 	 	 	 	 	 1,095
Equity-settled
Expected	 volatility	 	 	 	 	 	 	 20%
Expected	 dividend	 growth	 rate	 	 	 	 	 	 4.6%
Risk-free	 interest	 rate		 	 	 	 	 	 3%
Equity-settled – 976,150 options granted during the year
Option	 pricing	 model	 used	 	 	 	 	 	 Monte 	 Carlo
Weighted	 average	 share	 price	 at	 grant	 date	 (pence)	 	 	 	 	 	 60.6
Exercise	 price	 (pence)		 	 	 	 	 	 62.5
Expected	 option	 life	 (days)	 	 	 	 	 	 1,095
Equity-settled
Expected	 volatility	 	 	 	 	 	 	 20%
Expected	 dividend	 growth	 rate	 	 	 	 	 	 4.6%
Risk-free	 interest	 rate		 	 	 	 	 	 3%
18  Post balance sheet events 
In	 April	 2010,	 the	 Company	 disposed	 of	 30%	 of	 its	 investment	 in	 TAM	 International	 Group	 Holdings	 Limited	 for	 £2.4m,	 with	
the	 possibility	 that	 Normet	 can	 (at	 their	 option)	 acquire	 100%	 of	 the	 share	 capital	 in	 2014.		 The	 consideration	 for	 this	 would	
be	 based	 on	 a	 multiple	 of	 six	 times	 profit	 of	 the	 business	 in	 the	 year	 immediately	 preceding	 the	 sale.	 Under	 the	 call	 option,	
the	 minimum	 due	 for	 the	 remainder	 of	 Norman	 Hay’s	 equity	 in	 TAM	 is	 £5.1m	 and	 the	 maximum	 is	 £14.25m.	
Notes to the Financial Statements of the Parent Company 
continued 2009
Annual Report and Accounts
page 55
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Notice of Meeting
Notice is hereby given	 that	 the	 sixty	 fourth	 Annual	 General	 Meeting	 of	 the	 Company	 will	 be	 held	 at	 Norman	 Hay	 plc,	
Godiva	 Place,	 Coventry	 on	 23	 June	 2010	 at	 11	 am	 for	 the	 following	 purposes:	
1	 To	 receive	 and	 adopt	 the	 Directors’	 Report	 and	 audited	 financial	 statements	 for	 the	 year	 ended	 31	 December	 2009.
2	 To 	 re-elect	 as	 a	 Director	 Mr	 Anthony	 Hay	 who	 retires	 by	 rotation	 in	 accordance	 with	 Article	 84	 of	 the	 Articles	 of	
Association.
3	 To 	 reappoint	 the	 auditors.	 A	 resolution	 to	 reappoint	 BDO	 LLP	 as	 auditors	 will	 be	 proposed	 at	 the	 forthcoming	 Annual	
General	 Meeting.
4	 To 	 authorise	 the	 Directors	 to	 fix	 the	 auditors’	 remuneration.
5	 To 	 consider	 and,	 if	 thought	 fit,	 approve	 as	 an	 Ordinary	 Resolution:
5.1)	 That	 in	 accordance	 with	 Article	 7A	 of	 the	 Company’s	 Articles	 of	 Association	 and	 Part	 18,	 Chapter	 4	 of	 the	 Companies	
Act	 2006	 (“the	 Act”)	 the	 Company	 be	 and	 it	 is	 hereby	 authorised	 generally	 and	 unconditionally	 (pursuant	 to	 Section	
166	 of	 the	 Act)	 to	 make	 market	 purchases	 of	 any	 of	 its	 own	 shares	 on	 such	 terms	 and	 in	 such	 a	 manner	 as	 the	 Board	
of	 Directors	 of	 the	 Company	 may	 from	 time	 to	 time	 determine.	
5.2)	 The	 general	 authority	 conferred	 by	 this	 resolution	 shall:	
i)	 expire	 on	 the	 date	 of	 the	 Annual	 General	 Meeting	 of	 the	 Company	 to	 be	 held	 in	 2011;
ii)	 be 	 limited	 to	 2,000,000	 shares	 of	 the	 Company;
iii)	 	 not 	 permit	 the	 payment	 per	 share	 of	 less	 than	 10p	 nor	 more	 than	 5%	 above	 the	 average	 of	 the	 middle	 market	
quotations	 (derived	 from	 The	 Stock	 Exchange	 Daily	 Official	 List)	 of	 the	 shares	 for	 the	 ten	 business	 days	 before	 any	
such	 purchase	 is	 made;	
iv)	 	 before 	 expiry	 entitle	 the	 Company	 to	 enter	 into	 any	 contract	 for	 the	 purchase	 of	 its	 own	 shares	 which	 will	 or	 might	
be	 executed	 wholly	 or	 partly	 after	 its	 expiration.	
5.3)	 This	 authority	 shall	 only	 be	 capable	 of	 variation,	 revocation	 or	 renewal	 by	 the	 Company	 in	 General	 Meeting.	
6	 	 To 	 consider	 and,	 if	 thought	 fit,	 approve	 as	 a	 Special	 Resolution:	
	 That	 the	 Directors	 be	 and	 are	 hereby	 empowered	 pursuant	 to	 Section	 570	 of	 the	 Act	 to	 allot	 equity	 securities	 (as	
defined	 in	 that	 Act)	 and	 pursuant	 to	 an	 authority	 dated	 24	 June	 2009,	 given	 to	 the	 Directors	 to	 allot	 relevant	 securities	
(as	 defined	 in	 that	 Act)	 as	 if	 the	 provisions	 of	 Section	 561(1)	 of	 the	 Act	 did	 not	 apply	 to	 any	 such	 allotment	 until	 the	
conclusion	 of	 the	 Annual	 General	 Meeting	 to	 be	 held	 in	 2011	 or	 15	 months	 whichever	 comes	 first	 in	 respect	 of:	
i)	 	 allotments 	 in	 connection	 with	 rights	 issues	 (subject	 only	 to	 such	 exclusions	 as	 the	 Directors	 may	 feel	 necessary	 or		
expedient	 to	 deal	 with	 fractional	 entitlements	 or	 legal	 or	 practical	 requirements	 of	 an	 recognised	 regulatory	 body		 in	
any	 territory);	 and	
ii)	 	 the 	 allotment	 for	 cash	 (otherwise	 than	 pursuant	 to	 (i))	 of	 equity	 securities	 up	 to	 any	 aggregate	 nominal	 amount	 	
of	 £75,000.	
Registered	 office:	 By	 order	 of	 the	 Board
Godiva	 Place	 Brigid M Cattle
Coventry	 	 19	 May	 2010
CV1	 5PN	
Notes:	
1	 	 A 	 member	 entitled	 to	 attend	 and	 vote	 at	 this	 Meeting	 is	 entitled	 to	 appoint	 one	 or	 more	 proxies	 to	 attend	 and,	 on	 a	 poll,	
vote	 on	 his/her	 behalf.	 A	 proxy	 need	 not	 be	 a	 member	 of	 the	 Company.	 A	 form	 of	 proxy	 is	 attached	 for	 use	 at	 the	 Meeting.	
Members	 should	 complete,	 sign	 and	 return	 this	 so	 as	 to	 reach	 the	 office	 of	 the	 Company’s	 Registrars	 not	 less	 than	 48	 hours	
before	 the	 time	 appointed	 for	 the	 holding	 of	 the	 Meeting.	 By	 so	 doing	 they	 will	 not	 be	 precluded	 from	 attending	 and	
voting	 at	 the	 Meeting	 in	 person	 should	 they	 be	 able	 to	 do	 so.	
2	 	 A 	 register	 of	 Directors’	 interests	 and	 those	 of	 their	 families	 in	 the	 shares	 of	 the	 Company	 and	 copies	 of	 relevant	 Directors’	
service	 contracts	 will	 be	 available	 for	 inspection	 at	 Norman	 Hay	 plc,	 Godiva	 Place,	 Coventry	 from	 the	 date	 of	 this	 notice	
until	 the	 close	 of	 the	 Meeting.	
3	 	 As 	 permitted	 by	 Regulation	 41	 of	 the	 Uncertificated	 Securities	 Regulations	 2001,	 shareholders	 who	 hold	 shares	 in	
uncertified	 form	 must	 be	 enrolled	 on	 the	 Company’s	 register	 of	 members	 at	 6	 pm	 on	 21	 June	 2010	 or,	 in	 the	 event	 that	
the	 Meeting	 is	 adjourned,	 on	 the	 register	 of	 members	 as	 at	 6	 pm	 two	 days	 prior	 to	 the	 time	 of	 any	 adjourned	 meeting	
(provided	 such	 time	 is	 not	 more	 than	 48	 hours	 prior	 to	 the	 time	 of	 any	 adjourned	 meeting),	 in	 order	 to	 be	 entitled	 to	
attend	 and/or	 vote	 at	 the	 Meeting	 in	 respect	 of	 the	 number	 of	 shares	 registered	 in	 their	 name	 at	 such	 time.	 Changes	 to	
entries	 on	 the	 register	 of	 members	 after	 that	 time	 will	 be	 disregarded	 in	 determining	 the	 rights	 of	 any	 person	 to	 attend	
and/or	 vote	 at	 the	 Meeting.	 page 56
17666	 20/05/2010	 Proof	10
2009
Annual Report and Accounts
Shareholder’ s Notes 17666	 18/05/2010	 Proof	6 17666	 18/05/2010	 Proof	6
W elc ome
Norman Hay plc is one of the world’s leading specialist 
chemical and systems suppliers to the aerospace, 
automotive, oil & gas and construction industries. 
Our advanced products are designed to enable our 
customers to maximise the reliability and operating 
performance of their components and materials.
Our Year in Brief 1
Introduction – Our Businesses 2
Chairman’s Statement 4
Chief Executive’s Business Review 7
Directors and Executive Team 10
Report of the Directors 11
Statement of Directors’ Responsibilities 14
Independent Auditors’ Report 15
Consolidated Statement of  
Comprehensive Income 16
Consolidated Statement of  
Financial Position 17
Consolidated Cash Flow Statement 18
Consolidated Statement of  
Changes in Equity 19
Notes to the Group Financial Statements 20
Parent Company Balance Sheet 46
Notes to the Financial Statements of 
the Parent Company 47
Notice of Meeting 55
Advisers Inside Back Cover
Contents
Secretary and Registered Office
Brigid M Cattle
Godiva Place
Coventry  
CV1 5PN
Registered Number 405025
Independent Auditors
BDO LLP
125 Colmore Row
Birmingham  
B3 3SD
Bankers
Bank of Scotland
38 St Andrew Square
Edinburgh  
EH2 2YR
Close Brothers
10 Crown Place
London  
EC2A 4FT
Registrars
Equiniti
1st Floor, 34 South Gyle Crescent  
South Gyle Business Park 
Edinburgh  
EH12 9EB
Nominated Adviser and Broker 
Brewin Dolphin Securities Limited 
PO Box 512
National House
36 St Ann Street
Manchester 
M60 2EP
Financial Marketing
Haggie Financial LLP
4 Sun Court
66–67 Cornhill
London 
EC3V 3NB 
We take our responsibilities seriously and work continuously  
to improve our environmental performance. 
 
Advisers
The Environment Matters 17666	 18/05/2010	 Proof	6 17666	 18/05/2010	 Proof	6
Specialist Chemicals and Systems
Norman Hay plc
Godiva Place
Coventry
CV1 5PN
T : +44 (0) 24 7622 937 3
F: +44 (0) 24 7622 4420
E: info@normanhay .com
www .normanhay .com
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Annual Report and Accounts
Annual Report and Accounts 2009 Norman Hay plc