treatt plc
annual report and  
financial statements 2013
a world of 
difference
in the world of ingredient solutions  
we’re at the core of product innovation
treatt plc  
northern way  
bury st edmunds  
suffolk ip32 6nl uk
tel 01284 702500   
fax 01284 703809 
email enquiriestreattcom
wwwtreattcom
wwwearthoilcom
treatt plc annual report and financial statements  2013   about the
group
overview
01 group strategy
02 what we do
04 highlights
05 group five year trading record
06 chairman’s statement
07 chief executive officer’s report
09 financial review
11 directors’ report
16 strategic report
governance
18 corporate governance statement
23 directors’ remuneration report
36 independent auditor’s report to  
 the members of treatt plc
financial statements
38 group income statement
39  group statement of comprehensive income
40  group and parent company statements  
of changes in equity
42  group and parent company balance sheets
43  group and parent company statement  
of cash flows
44  group reconciliation of net cash flow  
to movement in net debt
45 notes to the financial statements
74 notice of annual general meeting
86 financial calendar
87 parent company information and advisers
treatt is a worldleading  
innovative ingredient solutions 
provider for the flavour fragrance 
and consumer goods industries
t reatt places great emphasis on investing resources into developing firsthand 
knowledge and relationships with growers and suppliers to ensure a sustainable  
fair and rewarding future for all its stakeholders investors customers growers  
and staff – across the globe
the group has manufacturing sites on three continents with sales offices in the  
uk usa france and china our manufacturing sites are certified to the global  
food safety initiative gfsi approved standard which serves as a testament of  
our commitment to quality and safety  and allows t reatt to supply across the globe
by developing innovative solutions for multinational customers and providing 
unparalleled customer service t reatt continues to create outstanding value for  
both its customers and its shareholders treatt plc annual report and financial statements 2013   01
group  
strategy
t reatt’ s strategy consists of delivering profitable and sustainable 
growth by means of a focused sales approach and marketdriven new 
product development this strategy is underpinned by continued 
innovation addedvalue manufacturing and by driving efficiency 
improvements across the group  
treatt takes pride in its positive culture 
which creates the environment for employee 
engagement key to the successful delivery  
of its strategy through proactive share save 
schemes in the uk and the us employees 
are able to build shareholdings in the business 
which is encouraged by the board 
innovation
product development and a vibrant product 
portfolio are market and customer driven 
investment
treatt will invest to maintain its competitive 
advantage and equip the business with the 
technology capacity and skill set required to 
meet our strategic objectives
growth
treatt’s strategic targets will be achieved 
through a global focused sales approach 
control of overheads and unlocking operational 
efficiency
adding value
treatt provides ingredient solutions that address 
customer and market needs such as authentic 
and unique flavour profiles costeffective and 
stable fragrance specialties and ingredients that 
naturally impart sweetness without calories
treatt products
125

300

9m

years experience
employees
kg shipped pa
•  citrus oils
•  spice and herb oils
•   treattarome
®
 natural distillates from the  
named food
•  functional ingredients
•  natural isolates
•  organic and ethical trade ingredients
•  natural cosmetic ingredients
•  fragrance ingredients
 
soft
drinks
tea coffee
personal 
care
alcoholic 
beverages
flavour

fragrance 02   treatt plc annual report and financial statements 2013
t reatt  
what we do
essential oils citrus treattarome
®
treatt’s essential oils are derived from 
a variety of origins and are distilled and 
blended in various qualities for food flavour 
fragrance and cosmetic applications
treatt has always been known for the 
quality of its citrus products and now 
produces various ranges including 
citrustt™ citreatt
®
 and the new unique 
treattzest™ concentrated citrus oils
treattaromes are a range of 100 natural 
‘from the named food’ water soluble 
clear essences suitable for numerous 
applications from beverages to ice creams 
and savoury sauces
behind the scenes 
scan here to watch ‘behind the scenes’ 
videos of how treattaromes are produced 
or visit  
wwwtreattcomproductstreattarome
pineapple
banana
kiwi
coffee
honey
cucumber
tea
watermelon
a world of difference
innovative ingredient solutions
our indepth knowledge of flavour 
and fragrance ingredients allows us 
to provide direct access to unique 
ingredient solutions 
which customers 
would not usually 
find elsewhere 
this allows our customers to create 
signature products using t reatt’ s 
specialties which can set their product 
apart from the competition treatt plc annual report and financial statements 2013   03
wellness
treatt’s wellness range of products are 
noncaloric 100 natural essences that 
impart desirable flavour and mouthfeel 
while smoothing out the sweetness profile 
and undesirable lingering characteristics 
associated with stevia and other 
sweeteners
aroma ingredients
treatt offers an extensive selection of aroma 
ingredients which deliver an authentic 
aromatic profile to a variety of flavours and 
fragrances
vegetable oils
treatt through its cosmetic ingredients 
division earthoil also specialises in 
conventional organic and fair trade cold 
pressed vegetable seed oils a variety of 
vegetable fruit and tree seeds are pressed 
to produce quality oils in our kenyan facility
organic essential oils
treatt’s diverse product range includes 
organicallycertified and fair trade 
ingredients for the flavour fragrance  
and cosmetics industries
fair trade 
principles
earthoil in kenya
earthoil the 
cosmetics ingredients 
division of t reatt  
is committed to  
fair t rade principles 
through its fair for 
life certification
here in kenya farmers are being taught 
about composting good agricultural 
practices organic and fair trade 
requirements 04   treatt plc annual report and financial statements 2013
 t reatt  
highlights
treatt is continually launching new products to provide solutions to 
customer and market needs more and more consumers are seeking 
low calorie betterforyou beverages to improve their overall health and 
wellness 
eager to tap into this buoyant market drinks manufacturers across the 
globe are looking for innovative solutions to enable them to produce 
healthier beverages while addressing the challenges associated with 
natural sweeteners such as stevia as a solution treatt has created 
treattsweet
™
 a natural flavour ingredient that makes sweet flavours 
taste better
world coffee consumption continues to grow thanks in part 
to new markets such as china but also due to new varieties of 
coffee drinks such as iced coffee becoming more mainstream  
t o help manufacturers create goodtasting coffee beverages treatt 
has developed some exciting natural ingredients which impart the 
authentic coffee flavour that consumers are looking for 
with alcoholic beverages an increasing focus for t reatt an innovative 
natural distillate cascade hop treattarome
®
 was developed to 
enable brewers to adjust the aroma of hop whilst avoiding the cost 
and bitterness associated with additional hopping
treatt will continue to use its expertise to develop other innovative 
solutions based on market and consumer demand
  the dividend per share shown relates to the interim dividend declared and final 
dividend proposed both of which are paid after the year end and under ifrs 
accounted for in the subsequent financial year
the directors visiting treatt’s plant in lakeland florida
revenue  
£741m
operating profit  
operating profit increased by 233
233
return on capital employed  
roce grew from 144 to 194
194
net cash flow  
net cash inflow of £47m
£47m
£741m
£740m
adjusted profit before tax  
£62m
£62m
£51m
adjusted earnings per share  
432p
432p
344p
dividends per share  
185p
185p
155p
net assets per share  
£262
£262
£248
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
financial highlights treatt plc annual report and financial statements 2013   05
group five year trading record
 2009 2010 2011 2012 2013
 £’000 £’000 £’000 £’000 £’000
income statement     
revenue 56313 63298 74518 74009 74097
ebitda preexceptionals 5012 6032 8032 6891 8278
operating profit 3893 4904 6864 5628 6938
adjusted profit before taxation 3501 4503 6372 5060 6227
growth in adjusted profit before taxation 143 286 415 206 231
     
exceptional items — 2432 — 598 1093
profit before taxation 3501 2071 6372 4462 5134
     
taxation 1013 1417 2017 1390 1655
noncontrolling interest 3 1 7 — —
profit for the year attributable to owners of the parent company 2485 653 4348 3072 3479
balance sheet     
goodwill 4272 1051 1192 1080 1075
other intangible assets 290 250 742 718 684
property plant and equipment 9847 10250 10120 11543 11718
deferred tax assetliability 245 19 261 594 723
noncurrent trade and other receivables 586 586 586 586 586
current assets 28687 34311 35847 38053 38340
current liabilities 15954 14292 12592 17345 12484
noncurrent trade and other payables 789 — 135 23 23
noncurrent bank loans 1773 7348 7606 5469 8889
postemployment benefits 2000 1596 803 838 1589
noncurrent derivative financial instruments — — 864 1033 577
redeemable loan notes net 675 675 675 675 675
total equity 22736 22518 25551 26003 27 443
cash flow     
cash generated from operations 10675 2361 8312 1482 9250
taxation paid 755 1312 1998 1279 649
net interest paid 541 387 527 618 714
dividends paid 1138 1222 1330 1490 1585
additions to noncurrent assets net of proceeds 1005 1571 1540 2787 1578
acquisitiondisposal of interests in joint ventures or subsidiaries — 38 14 — 9
net purchasesale of own shares by share trust 65 87 100 306 91
other 407 5 16 43 151
movement in net debt 6894 2087 2987 4955 4655
total net debt 8894 10981 7994 12949 8294
ratios     
net operating margin
1
 69 77 92 76 94
return on capital employed
2
 123 146 205 144 194
average net debt to ebitda
3
 246 165 118 152 128
adjusted basic earnings per share 245p 303p 425p 344p 432p
growth in adjusted basic earnings per share 259 236 405 191 256
dividend per share
4
 120p 130p 145p 155p 185p
dividend cover adjusted to exclude exceptionals
4
 203 232 292 222 233
net assets per share 2170p 2149p 2438p 2480p 2620p
notes on calculations
1  operating profit divided by revenue
2  operating profit divided by total equity plus net debt
3  average of net debt at start and end of financial year divided by ebitda
4  the dividend per share shown relates to the interim dividend declared and final dividend proposed both of which are paid after the year end and under ifrs accounted for in the 
subsequent financial year 06   treatt plc annual report and financial statements 2013
chairman’ s  
statement
results
the performance of the group in a year of significant change has 
been very encouraging and it is pleasing to report that results for 
the last year were better than had been originally forecast pre
exceptional profits for the financial year increased by 23 to £62m 
2012 £51m and adjusted basic earnings per share grew by 26 
to 432p 2012 344p revenue which can fluctuate due to changes 
in product mix and movements in raw material prices was steady 
at £741m 2012 £740m adjusted earnings before interest tax 
depreciation and amortisation increased by 20 to £83m 2012 
£69m operating profit margins rose in the year from 76 to 94 
leading to operating profits rising by 23 to £69m 2012 £56m
cash flows of the group can vary from one year to the next because 
of movements in raw material prices and the strategic purchasing 
decisions made by our very experienced procurement team 2013 
saw a very encouraging net cash inflow of £47m reducing net debt 
by more than a third to £83m 2012 £129m resulting in a modest 
average net debt to ebitda ratio of 13 times 2012 15 times
the exceptional items totalling £11m reported in these results relate 
to corporate finance and other related oneoff costs £05m and 
the legal and professional costs in relation to the ongoing earnout 
dispute in relation to the acquisition of the earthoil group £06m 
further details concerning the contingent liability in respect of this 
dispute are given in note 27
dividends
the board is proposing a net final dividend of 130p 2012 104p 
increasing the total dividend for the year by 19 to 185p 2012 155p 
per share if approved by shareholders at the forthcoming agm the 
final dividend will be payable on 4 april 2014 to all shareholders on 
the register at close of business on 28 february 2014 shareholders 
who wish to participate in the dividend reinvestment plan for this and 
future dividends should elect to do so by 10 march 2014
board changes
following ten years as a nonexecutive director we bade farewell 
to peter thorburn this year peter’s contribution to the board over 
a decade of major change for the group has been immense and 
as a uk national resident in florida he has been particularly closely 
associated with the success of treatt usa over the last few years 
i would very much like to place on record our thanks to peter for 
everything he has done for treatt and to wish him and his family well 
for the future
i was delighted to welcome jeff iliffe to the board as a nonexecutive 
director during the year jeff is the chief financial officer of abcam 
plc and brings with him a wealth of financial and city experience 
which will i have no doubt be of great benefit to the board
corporate governance
in addition to jeff iliffe’s appointment as audit committee chairman it 
has been a very busy year for other aspects of corporate governance 
as well 
new rules apply to companies reporting on financial years ending 
on or after 30 september 2013 – which means that treatt is one of 
the companies now needing at very short notice to deal with new 
procedures on remuneration policy gender diversity greenhouse 
gas reporting and the strategic report in consequence this year’s 
annual report contains a significant amount of new and additional 
information 
the remuneration committee consulted major shareholders on its 
remuneration policy and together with a new long term incentive 
plan will be putting these proposals before shareholders at the 
forthcoming agm in february 2014
a full and comprehensive risk review has also been undertaken 
reviewed and approved by the board
shareholder relations
following the decision of the bovill family to dispose of their 
shareholding earlier this year i would like to formally recognise and 
thank hugo bovill and his family for their dedication and stewardship 
of treatt over the years treatt has a proud heritage which will be built 
upon as the business continues to grow
i am also therefore delighted to welcome some new names to 
treatt’s share register and i look forward to updating all shareholders 
regularly on the ongoing progress being made by the group
review of the year
i mentioned in my report last year that the board was carrying out a 
thorough review of the business ceo daemmon reeve developed 
a new strategic plan which met with the board’s approval and which 
was rolled out to all colleagues through a series of workshops in 
january 2013 daemmon discusses the new strategy in detail in his 
report
turning now to the performance of the business over the last twelve 
months we were anticipating a year of steady growth and it is clear 
that the new strategy gained traction very quickly although q1 was 
as ever a seasonally quiet period for the group from the turn of the 
year business has been pleasing with both the treatt and earthoil 
branded businesses performing well sales revenues remained 
unchanged but a combination of improved margins and stringent 
overhead control has delivered the 23 growth in adjusted pretax 
profits being reported
treatt’s strong technical and procurement experience with raw 
material ingredients is enabling the business to both transition up the 
value chain and margins to grow notwithstanding top line sales value 
being impacted by lower average costs of key raw materials at the 
same time overall costs have been reduced with the centralising of 
the group finance function delivering a particularly noteworthy saving
the steady improvement in earthoil’s results is also very pleasing to 
report with profits almost doubling compared with the year before 
its innovative range of cosmetic ingredient solutions and increasing 
interest in fair trade activities puts earthoil in a good position to deliver 
material profits in years to come 
people
it is always extremely important but particularly this year with all the 
changes which have taken place over the last eighteen months 
that i publicly express the sincere thanks of the board to all treatt 
and earthoil colleagues for their hard work and contribution to the 
success of treatt
prospects
the group has made a solid start to the new financial year with 
further progress on strategy implementation continuing focus on key 
markets including the alcoholic and nonalcoholic beverage sectors 
and ongoing development of exciting new and innovative products 
the board is confident that the group will again show good progress 
in the coming year
tim jones
chairman
6 december 2013
 excluding exceptional items
adjusted earnings 
per share increased 
by 26 and dividends 
per share by 19
tim jones
chairman treatt plc annual report and financial statements 2013   07
chief executive officer’ s  
report
overview
treatt has had a good year with profit before exceptionals up by 23 
adjusted earnings per share 26 higher and net debt 36 lower 
than a year ago and i would like to begin by thanking my colleagues 
throughout the group for their endeavours and engagement which 
has enabled us to report such a pleasing set of figures our new 
strategy which has been clearly communicated throughout the treatt 
organisation has been the central core to our success colleagues 
are very clear about what treatt is and the values we stand for with 
greater focus clarity and cost control as central pillars to our strategy 
it has enabled treatt to begin the necessary path of preparing our 
business for the next stage of our growth as an innovative ingredient 
solution provider the year has been exciting as well as challenging 
and i have been delighted to see so many colleagues flourishing 
and contributing to the business in a wide variety of ways creating 
the environment for colleagues to succeed is very motivating for me 
personally and our work on this continues 
strategy
as our strategy further beds in to treatt and we look to the future we 
are building a sound platform to progress from 
through greater focus and meaningful engagement with customers 
who can bring treatt long term sustainable value we will create 
opportunities of consequence with products that excite customers 
and make them want to engage with us 
‘one treatt’ strategy for growth
our strategy is clear  to grow group profitability and margins in the 
flavour fragrance and consumer goods markets through
in addition to growth a companywide culture of cost control is an 
important aspect of our strategy and has encompassed everything 
from energy savings to process improvements from reduction in 
global freight costs to savings on departmental consumables 
our new strategy is 
the central core to 
our success
daemmon reeve
chief executive officer
sales prospects
a key aspect of growing sales is retention of existing customers 
with acute focus on the overall value to the group our sales team is 
incentivised to both retain as well as grow our business by focussing 
on those accounts where meaningful opportunities are evident we 
increase our prospects and aligning our technical resources with 
those opportunities maximises our chances of success  and as part 
of this we are currently working on a number of exciting opportunities 
with major beverage companies
raw material risk management
the volatility of raw material prices and their availability continues 
to present challenges for the group but the proven experience 
expertise and innovation of our global procurement team has enabled 
treatt to mitigate the extremes of these impacts empowerment of 
our team to move nimbly and authoritatively in markets also provides 
treatt with an important competitive advantage 
our most significant raw material orange oil has seen prices 
reaching highs of more than double the previous forty year peak and 
a far greater level of volatility in the last three years than had been 
the case previously the potential therefore exists for revenues on  
most notably  some lower margin aspects of our citrus ingredients 
business to have an effect on the top line performance of the group 
as longstanding treatt followers will be aware consequently in the 
short term the leadership team have a greater focus on contribution 
margin as opposed to solely focusing purely on sales as a better 
indicator of the success of our strategy
the treatt brand
to ensure clarity for our customers we are marketing our business 
as treatt the treatt brand is trusted by our global customer base 
as being synonymous with exceptional quality and outstanding 
service whilst the legal entities of r c treatt and treatt usa remain 
the focus and the branding of the business will continue to be built 
around one treatt this is reflected in our new website and can 
also be seen at the trade exhibitions we attend around the globe 
a single branding message ensures clarity for our customers and 
supports our strategy of operating as one holistic treatt business it 
also enables us to globalise key departments in order to maximise 
synergies and strengthen our customer offering due to its unique 
offering as a supplier of specialist cosmetic ingredient solutions the 
earthoil brand will continue to flourish as a separate distinct and 
highly valued brand in its own right
aligning our organisation
our procurement sales it and finance departments are now truly 
global and the resultant benefits in the form of cost savings and the 
synergistic effect of teams working with clarity of direction and greater 
alignment are tangible the fully integrated global sales structure 
enables greater focus on multinational flavour fragrance and fmcg 
customers our marketing will increasingly be focused which has 
proven to be very effective this year with increasing press coverage 
in our targeted markets further improvements in the organisational 
focus and structure of the group will be taking place in 2014 
focused 
sales 
approach
cost 
control 
concentrated 
product 
range
excellent 
quality and 
service 
well motivated 
and 
experienced 
workforce 
marketdriven 
new product 
development
increasing 
group 
margins  08   treatt plc annual report and financial statements 2013
chief executive officer’s report
continued
we have made good progress in developing positive cultural change 
and enhancing team spirit within the business and this work central 
to our strategy will continue 
innovation
it is vital that our colleagues feel empowered fulfilled and motivated in 
their roles within the group and we are taking further steps to create 
an environment where cutting edge innovation is both fostered and 
thrives a significant aspect of this is that teams are working closer than 
ever across the group and with this much improved communication 
new product development and innovation is being marketdriven 
to create more innovative products with greater market potential 
members of our technical team are increasingly visiting customers 
with our sales staff to provide essential technical support engaging 
with counterparts in key accounts to get firsthand feedback from 
customers on our new innovations enables rapid fine tuning to meet 
customer needs
to illustrate using just one example of our innovation efforts we 
have developed a range of products targeted towards wellness 
applications the arrival of stevia and other natural nonnutritive 
sweeteners in the marketplace stimulated us to take another 
look at how our treattaromes might be used in combination with 
natural sweeteners our team found that a certain mixture of our 
treattarome
®
 essences provided sweet flavour notes and taste 
experience and importantly masked the lingering stevia taste with 
mellow softness as we looked further into the different products in 
which stevia is used we perceived a need for products that were 
more closely tailored to the needs of the application carbonated soft 
drinks needing a different profile to still applications for example and 
other specialised versions were developed to broaden the scope of 
our product offerings
enhancing customer value
we have engaged with our customers at all levels to determine 
how treatt’s products can enhance customer value if we delight 
customers they return and importantly turn to us when they have 
new requirements building trust to build business has been a key 
element of our success our strategy enables our teams to build and 
firm relationships for the long term
treatt usa and r c treattearthoil have built on last year’s success 
and continue to enjoy british retail consortium ‘a’ grade status with 
fewer and fewer areas for improvement identified
r c treatt
much work has taken place in the uk to modernise business 
practices to derive efficiency and improve productivity this work 
continues into the current fiscal year management and their teams 
taking ownership of business improvement processes has been 
particularly effective and the level of crossdepartmental collaboration 
is high focus on key areas of the business such as addedvalue 
specialty manufactured chemicals has delivered pleasing results at 
accounts which provide sustainable value for the business lower 
performing products have been delisted from our offering to enable 
greater focus on those products which bring more sustainable value 
to our business and this work continues engagement with the 
strategy has been and continues to be very high
a review of treatt’s uk site has been under consideration by the 
directors for some time the board and operations management 
are working closely to ensure that we make the right investment 
decisions at the right time for the future of our business in order to 
ensure we have a fit for purpose uk manufacturing facility to improve 
efficiency across the business and drive value for our shareholders for 
the long term this review currently remains a work in progress and 
no decisions have yet been made
treatt usa
treatt usa had a year of consolidation with an anticipated tougher 
year in key orange oil markets overstocking of ingredients at some 
accounts and underperforming beverages at others led to lower than 
anticipated sales of specialty nonorange product ranges negatively 
affecting profitability however optimism levels remain healthy in 
the business with relationships with key accounts being in good 
shape good progress is also being made with some potential key 
accounts which are receiving much attention in the business the 
sales opportunity pipeline looks promising and this should translate 
into meaningful opportunities for the business in the next year or two
earthoil
i am pleased to report that earthoil the group’s niche cosmetic 
ingredients business had a record year and its third successive year of 
profitability again the strategy guided the meaningful progress made 
with a greater focus on those customers who can bring sustainable 
business receiving increased focus and technical support important 
wins at new material accounts also enabled the business to perform 
well in february we appointed our new director of african operations 
leopold kerama who is driving further efficiency improvements in our 
kenyan manufacturing facilities as we develop our business 
sustainability
i was privileged to visit our earthoil facility in kenya in august to witness 
first hand not only the excellent work being done by our teams but also 
the responsibility it shows towards the local community by assisting 
the farmers to organise themselves into a society the kenya organic 
oil farmers association so that they are properly represented and 
able to carry out communal projects through fair for life certification 
we pay a fair trade premium for the products we purchase into a 
community fund to be used for projects as decided by the farmers 
and workers themselves so far this has funded scholarships for 
seven children from poor families to attend secondary school and 
there are plans afoot to build a social hall where farmers and workers 
can carry out educational and social activities
outlook
whilst the macroeconomic situation is still fragile in many corners of 
the globe we remain optimistic that the realignment and refreshment 
of our business through our strategy coupled with healthy levels of 
consumer goods innovation most notably in the beverage sector 
will enable treatt to continue on its path of progress with excitement 
and renewed determination challenges remain and we will not be 
complacent in this regard but we look forward with confidence as 
a business importantly we have an excellent team empowered 
motivated and equipped to deliver the results
daemmon reeve
chief executive officer
key points
new strategy with greater focus clarity and cost control 
aimed at accelerating underlying revenue growth  
retention of meaningful existing business and maximising 
prospects for growth
creating an environment for effective innovation
enhanced customer value for improved profitability treatt plc annual report and financial statements 2013   09
financial 
review
income statement
the group’s revenue can fluctuate due to changes in product mix 
and movements in raw material prices consequently whilst revenue 
for the year remained unchanged at £741m 2012 £740m gross 
margins being a greater driver of bottom line growth rose from 
226 to 237 this together with tight control of costs resulted in 
a healthy 23 increase in preexceptional operating profit of £13m 
to £69m 2012 £56m
exceptional costs in the year of £11m were incurred in connection 
with shareholderrelated matters and professional fees relating to 
the earthoil earnout dispute excluding these costs earnings before 
interest tax depreciation and amortisation for the year increased by 
20 to £83m 2012 £69m profit before tax after exceptional items 
of £11m rose by 15 to £51m 2012 £45m further information 
on the exceptional items is given in note 8
the proposed total dividend for the year has been increased by 194 
to 185p per share resulting in a dividend cover of 24 times pre
exceptional earnings for the year and a rolling three year cover after 
exceptionals of 22 times the board’s policy is to maintain dividend 
growth on a consistent basis at between 2 and 25 times three year 
rolling cover with this year’ s dividend representing an increase of 65 
over the last five years basic earnings per share adjusted to exclude 
exceptionals – see note 11 for the year increased by 26 to 432p 
2012 344p the calculation of earnings per share excludes those 
shares which are held by the treatt employee benefit trust ebt 
since they do not rank for dividend and is based upon profit after tax
whilst the group’s functional currency is the british pound ‘sterling’ 
as explained below the amount of business which is transacted in 
other currencies creates foreign exchange risk particularly with the 
us dollar and to a more limited extent with the euro during the year 
the us dollar fluctuated considerably but ended the year almost 
where it started with a closing balance sheet rate of 162 2012 
161 as explained further in this report under ‘treasury policies’ 
the group hedges its foreign exchange risk at r c treatt by holding 
and managing us dollar borrowings and taking out forward currency 
contracts this can result in timing differences in the short term giving 
rise to retranslation gains or losses in the income statement this has 
resulted in a very small gain of £01m in 2013 compared to a gain of 
£03m in 2012 there was a currency loss of £02m 2012 loss of 
£03m in ‘the statement of comprehensive income’ in relation to 
the group’ s investment in overseas subsidiaries principally in respect 
of treatt usa
the group’s net finance costs for the year increased by 15 to 
£07m 2012 £06m as a result of higher levels of debt in h1 before 
cash flows then improved sharply in h2 as a consequence of the 
improvement in profitability interest cover for the year improved to 
106 times 2012 99 times 
as part of the group’s risk management in 2011 r c treatt fixed 
9m of us dollar borrowings at 568 for ten years by way of an 
interest rate swap this swap has been designated as a ‘hedge’ in 
accordance with ifrs and consequently any movements in the mark
tomarket of the swap are taken directly to equity at the balance 
sheet date the fair value liability net of deferred tax of the swap was 
£05m 2012 £08m 
group tax charge
the current tax charge of £15m 2012 £09m represents an effective 
tax rate based on profit before tax and exceptional items of 265 
2012 208 the previous year having benefitted from significant 
accelerated capital allowances in the us the overall tax charge has 
increased by £03m to £17m 2012 £14m resulting in an overall 
effective tax rate which was almost unchanged at 32 2012 31 
there were no significant adjustments required to the previous year’s 
tax estimates with the current and deferred rates of tax continuing 
to fall in the uk until they reach an expected 20 the group’ s overall 
effective tax rates are expected to fall for the next two years
balance sheet 
group shareholders’ funds grew by £14m 2012 £04m in the year 
to £274m 2012 £260m with net assets per share increasing by 
56 to £262 2012 £248 over the last five years net assets per 
share have grown by 27 net current assets now represent 94 
2012 80 of shareholders’ funds the board has chosen not to 
avail itself of the option under ifrs to revalue land and buildings 
annually and therefore all the group’s land and buildings are held at 
historical cost net of depreciation in the balance sheet it should be 
noted that net assets have been reduced by £06m 2012 £07m as 
a result of shares held by the ebt  due to the accounting requirements 
for employee trusts this impact will be reversed when these shares 
are used to satisfy employee share option schemes
cash flow
in 2013 group net debt fell by £47m to £83m 2012 £129m with 
a corresponding reduction in the level of gearing from 50 to 30 
the group has a mix of secured and unsecured borrowing facilities 
totalling £199m of which only £28m expire in one year or less the 
group’s borrowing facilities are held with hsbc bank of america and 
lloyds banking group with the majority of facilities now held on three 
to five year terms with expiry dates staggered to fall in different years 
the group continues to enjoy positive relationships with its banks 
and expects all facilities to be renewed without difficulty when they fall 
due the reduction in cash tied up in working capital for the year was 
£24m largely due to an increase in trade creditors inventory levels 
for the group increased by 3 to £237m 2012 £229m this level 
of inventory which is highly significant in cash terms arises because 
as an ingredients specialist treatt takes many annual and in some 
cases longerterm contracts with customers as well as servicing the 
immediate spot needs of its diverse customer base the success of 
the business has been built upon managing geographic political and 
climatic risk of supply for our customers by judicious purchasing and 
inventory management to ensure continuity of supply and availability 
therefore it is part of the group’s business model to hold significant 
levels of inventory although only less than 5 is on average more 
than a year old
operating margins 
increased from 76 
to 94 whilst costs 
were kept under 
tight control
richard hope
finance director 10   treatt plc annual report and financial statements 2013
financial review
continued
the level of capital expenditure in the year was at the lower end of 
expectations with a total spend of £14m compared to £27m in 
2012 this was fairly evenly spread between the uk and us being 
focused primarily on addedvalue investment in manufacturing 
processes to create improved capabilities and efficiencies together 
with ongoing investment in technical facilities to enhance the group’ s 
rd capabilities together with continuous development of the it 
platforms and infrastructure 
treatt employee benefit trust
during the year the group continued its annual programme of offering 
share option saving schemes to staff in the uk and usa under 
us tax legislation staff at treatt usa are able to exercise options 
annually whilst the uk schemes provide for threeyear savings plans 
in addition 22000 2012 nil full market value options were granted 
to directors and senior management as part of these programmes 
including the full market value options options were granted over a 
total of 52000 2012 52000 shares during the year whilst 40000 
2012 47000 were exercised the employee benefit trust ebt 
currently holds 217000 shares 2012 256000 acquired in the 
market in order to satisfy future option schemes without causing 
shareholder dilution furthermore by holding shares in the ebt for 
some time before they are required to satisfy the exercise of options 
it is expected that the current programme of employee share option 
schemes will be selffinancing as the proceeds from share options 
which vest are expected to exceed the original cost of the shares 
acquired
final salary pension scheme
the threeyear actuarial review of the r c treatt final salary pension 
scheme was carried out in january 2012 the result of which was 
that the company agreed to maintain contributions at their current 
levels in order to eliminate the actuarial deficit by 2019 despite this 
the ias 19 “employee benefits” pension liability net of deferred tax 
increased in the year from £06m to £13m the principal cause 
of this increase was the assumption of a higher rate of inflation in 
the future both in respect of cpi and rpi which increased gross 
liabilities by £19m
following consultation with members it was agreed that the scheme 
would not be subject to any further accruals after 31 december 2012 
and instead members of the final salary pension scheme were offered 
membership of the company’s defined contribution pension plan 
with effect from 1 january 2013 as a consequence a curtailment 
gain of £02m was recognised in last year’ s financial statements this 
means that the defined benefit scheme has now been derisked as 
far as it is practicable and reasonable to do so
financial risk management
the group operates conservative treasury policies to ensure that no 
unnecessary risks are taken with the group’s assets
no investments other than cash and other shortterm deposits are 
currently permitted where appropriate these balances are held in 
foreign currencies but only as part of the group’s overall hedging 
activity as explained below
the nature of t reatt’ s activities is such that the group could be affected 
by movements in certain exchange rates principally between sterling 
and the us dollar but other currencies such as the euro can have a 
material effect as well this risk manifests itself in a number of ways
firstly the value of the foreign currency net assets of treatt usa and 
the overseas earthoil companies can fluctuate with sterling currently 
these are not hedged as the risks are considered insufficient to justify 
the cost of putting the hedge in place 
secondly with r c treatt exporting throughout the world fluctuations 
in sterling’s value can affect both the gross margin and operating 
costs sales are principally made in three currencies in addition to 
sterling with the us dollar being the most significant even if a sale 
is made in sterling its price may be set by reference to its us dollar 
denominated raw material price and therefore has an impact on the 
sterling gross margin raw materials are also mainly purchased in us 
dollars and therefore us dollar bank accounts are operated through 
which us dollar denominated sales and purchases flow hence it 
is sterling’s relative strength against the us dollar that is of prime 
importance 
as well as affecting the cash value of sales us dollar exchange 
movements can also have a significant effect on the replacement 
cost of stocks which affects future profitability and competitiveness
the group therefore has a policy of maintaining the majority of cash 
balances including the main group overdraft facilities in us dollars 
and to a lesser extent in euros as this is the most cost effective 
means of providing a natural hedge against movements in exchange 
rates where it is more cost effective to do so the group will enter 
into forward currency contracts as well consequently during the 
year forward currency contracts have been entered into which hedge 
part of r c treatt’s foreign exchange risk these contracts have 
been designated as formal ‘hedge’ arrangements with movements 
in marktomarket valuations initially taken to equity and recycled 
to the income statement to match with the appropriately hedged 
currency receipts currency accounts are also run for the other main 
currencies to which r c treatt is exposed this policy will protect the 
group against the worst of any shortterm swings in currencies
richard hope
finance director
the steady improvement  
in earthoil’ s results is also  
very pleasing to report treatt plc annual report and financial statements 2013   11
directors’ report
financial statements
the directors present their report and the audited financial statements 
for the group for the year ended 30 september 2013
results and dividends
the results of the group for the year are set out on page 38  
profit before tax for the year excluding exceptional items was 
£6227000 2012 £5060000
the directors recommend a final dividend of 130p 2012 104p per 
ordinary share
this when taken with the interim dividend of 55p 2012 51p  
per share paid on 18 october 2013 gives a total dividend of 185p  
2012 155p per share for the year ended 30 september 2013
corporate governance
the corporate governance statement on pages 18 to 22 forms part 
of this directors’ report
directors
the directors of the parent company are shown on page 87 
appointment and replacement of directors
rules about the appointment and replacement of directors are set out 
in the parent company’s articles of association further details are 
provided in the corporate governance statement on page 19
details of the executive directors’ contracts and notice periods 
are given in the directors’ remuneration report on page 29 the 
executive directors’ contracts are terminable by the group giving the 
required notice period of one year for the ceo and finance director 
and two years for the hr director who retires at the conclusion of the 
agm in february 2014 
in accordance with the parent company’s articles of association and 
as reported in the corporate governance statement on page 19 in 
recognition of provision b71 of the uk corporate governance code 
david johnston retires by rotation and jeff iliffe retires having been 
appointed during the year anita haines is retiring from the board as 
human resources director but is standing for reelection as a non
executive director all three directors being eligible offer themselves 
for reelection the nomination committee confirms that the 
individuals’ performances continue to be effective and to demonstrate 
commitment to the role including commitment of time for board and 
committee meetings and any other duties
directors’ interests in shares
the interests of directors in shares of the parent company are shown 
in the directors’ remuneration report on page 33
substantial shareholders
in accordance with rule 5 of the disclosure and transparency rules 
of the financial services authority the parent company has been 
notified of the following holdings of 3 or more of the voting rights 
at 5 december 2013 the latest practicable reporting date prior to 
publication of this document
 number 
schroder investment management 1703269 1659
discretionary unit fund managers 1580000 1539
henderson volantis capital 841859 820
miton capital partners 522500 509
james sharp stockbrokers 345711 337
barclayshare stockbrokers 322048 314
conflicts of interest
no director had an interest in any contract of significance during the 
year the group has procedures in place for managing conflicts of 
interests if a director becomes aware that they or a connected party 
have an interest in an existing or proposed transaction with the group 
they should notify the company secretary as soon as possible and 
before the next meeting directors have a continuing obligation to 
update any changes to conflicts and the board formally reviews them 
annually 
directors’ and officers’ liability insurance
the group maintains directors’ and officers’ liability insurance which 
is reviewed annually the insurance covers the directors and officers 
of the parent company and its subsidiaries against the costs of 
defending themselves in civil proceedings taken against them in their 
capacity as a director or officer of a group company and in respect 
of damages or civil fines or penalties resulting from the unsuccessful 
defence of any proceedings
research and development
product innovation and research and development are a critical part of 
the group’s strategy and business model as outlined in the strategic 
report on pages 16 to 17 the main research and development activity 
undertaken by the group is in the area of new product development 
the group utilises its strong technical capabilities to develop innovative 
products that provide solutions for customers particularly in the food 
and beverage area in this way it seeks to make itself indispensable to 
a key group of major global multinational companies in the opinion 
of the directors continuity of investment in this area is essential for the 
maintenance of the group’ s market position and for future growth
financial instruments
information on the group’s financial risk management objectives and 
policies and on the exposure of the group to relevant risks in respect 
of financial instruments is set out in note 28 of the financial statements
going concern
the group’s business activities together with the factors likely to 
affect its future development performance and position are set out 
in the chairman’s statement ceo’s report and financial review on 
pages 6 to 10 
in determining whether the group and parent company’s financial 
statements can be prepared on a going concern basis the directors 
considered the group’s business activities together with the factors 
likely to affect its future development performance and position the 
review also included the financial position of the group its cash flows 
and borrowing facilities the key factors considered by the directors 
were
• the implications of the challenging economic environment 
and future uncertainties on the group revenues and profits by 
undertaking forecasts and projections on a regular basis 
• the impact of the competitive environment within which the 
group’ s businesses operate
• the potential actions that could be taken in the event that revenues 
are worse than expected to ensure that operating profit and cash 
flows are protected and
• the group’s access to overdraft facilities and committed bank 
facilities to meet daytoday working capital requirements during 
the period all the group’s banking facilities which were due for 
renewal have been renewed on either existing or improved terms 
the group also has in place a ten year fixed interest rate swap for 
9m in order to protect hedge the group against possible future 
increases in interest rates 12   treatt plc annual report and financial statements 2013
directors’ report
continued
as at the date of this report the directors have a reasonable expectation 
that the group and parent company have adequate resources to 
continue in business for the foreseeable future accordingly the 
financial statements have been prepared on the going concern basis
health and safety
the group’ s ongoing investment in health and safety continued during 
the financial year and forms an integral part of the group’s strategy 
remaining at the forefront of all of our operations particular emphasis 
is placed upon continuous improvement by way of a comprehensive 
safety management system designed to monitor and measure 
top line policies and procedures and a range of key indicators are 
maintained and reported at every board meeting 
a top to bottom culture of safety awareness and responsibility is 
actively promoted and a training programme of accredited safety 
management and awareness courses is in place across the workforce 
to help underpin the efforts of the health and safety professionals 
already employed within the group 
employee health and wellbeing is monitored and dedicated and 
bespoke support is provided where necessary 
environment
the group is committed to good environmental practice it places 
importance on the impact of its operations on the environment and 
on ensuring that it operates and adopts responsible practices group 
performance and risk reviews are undertaken and monitored on a 
regular basis and reported to the board
environm ental p erformanc e and strat egy
the group has for a long time managed energy fuel and waste 
disposal costs with the aim of lessening the group’s environmental 
impact whilst reducing cost and improving efficiencies in accordance 
with the companies act 2006 strategic report and directors’ 
report regulations 2013 the group is now required to report its 
greenhouse gas emissions the release of greenhouse gases notably 
carbon dioxide generated by burning fossil fuels is understood to 
have an impact on global temperatures weather patterns and weather 
severity which can directly and indirectly affect the group’s business 
as a supplier of natural ingredients adverse weather events can have 
an effect on crop yields resulting in higher commodity prices and 
limited supply examples of this have been seen in 2013 with a large 
freeze in northern argentina causing reduced yields of lemon oil and 
in 20045 when the florida hurricanes caused significant reductions in 
crops of orange and grapefruit 
environm ental i m prov em ent s in 2013
the group continuously evaluates ways of reducing its impact on 
the environment and during the year has implemented a number of 
improvements at each of its subsidiaries
r c treatt
• new refrigerant systems installed which provide lower carbon 
emissions
• the introduction of variable speed drives on main thermal oil 
heaters improving energy consumption
• the introduction of adaptive controls on main process chillers
• cessation of the use of hexane r educing carbon emissions
• reuse of aqueousmethanol waste by the waste contractor 
through input in an anaerobic biodigester
treatt usa
• energy efficient led lights with motion sensors installed in large 
cold and freezer boxes
• use of well water in place of treated city water for water pump 
seals 
• recycling the well water rather than sending it to the city water 
sewage treatment
• installation of dust collection filters for tea leaf processing to 
protect workers and the environment
earthoil
• installation of a grease trap to remove grease from water 
discharged into the sewage system
• use of large capacity tanks to export oil to some customers rather 
than smaller drums 
g r eenhou se g a s emi ssion s
the group has adopted a greenhouse gas reporting policy and a 
management system based on the iso 1406412006 methodology 
which has been used to calculate the group’s scope 1 and 2 
emissions in 2013 for activities within the operational control of the 
group it is not currently intended to report scope 3 emissions
in measuring the group’ s greenhouse gas emissions the sales offices 
in the uk france and china in which a maximum of two staff are 
employed have been excluded on the grounds of materiality on the 
basis that emissions from utility consumption which is included in the 
rent are estimated to be less than a materiality threshold of 5 of 
overall group emissions additionally  since the earthoil india operation 
closed in january 2013 and the subsidiary primarily consisted of an 
office its emissions are also considered to be immaterial whilst 
the majority of the data has been accurately recorded from invoice 
information since the timing of the implementation of the legislation 
has only recently been announced some opening data for the year 
has not been recorded and estimates have been made on a prorated 
basis an example being vehicle mileage 
as this is the first occasion on which the group has reported its 
greenhouse gas emissions there is no comparable data in respect 
of prior years
 2013
scope 1 – direct co
2
 emissions tonnes co
2
e 1428
scope 2 – indirect co
2
 emissions tonnes co
2
e 2617
total tonnes co
2
e emissions 4045
gco
2
e emissions per kg of product shipped  408
data included in this table has been independently verified by carbon 
credentials energy services ltd and is covered by an assurance 
report ghg emissions have been calculated using the appropriate 
2013 defra conversion factors 
wa st e
approximately 90 of treatt usa’s refuse goes into one container 
which is picked up by a recycle company and separated into different 
recycle types the remaining 10 composed of restroom and canteen 
refuse is collected by the local authority as required by law treatt plc annual report and financial statements 2013   13
at r c treatt certain employees throughout the business are 
appointed as waste champions with additional responsibility for the 
reduction and efficient use of waste streams in their areas all waste 
streams in the uk continue to work towards a zero land fill waste 
strategy in addition r c treatt’s waste oil with a calorific value is sent 
for use as biomass thereby further reducing the company’s carbon 
footprint and eliminating disposal costs 
earthoil kenya utilises macadamia nut husks as a biomass fuel 
source burning an average of 22000kgs per month to produce heat 
for its distillation plant as well as providing efficiencies in fuel costs 
and reducing waste from the facility the use of this biomass has a net 
zero climate impact 
wat er the group has decided to record water consumption data whilst 
recording its greenhouse gas emissions in order to gain a greater 
understanding of its environmental impact the largest consumer of 
water in the group is treatt usa which uses large quantities in its 
manufacturing processes and the cleaning of its specialist equipment 
due to its high consumption treatt usa recently replaced its closed 
loop cooling water circuit with direct cooling from deep well water 
on all still condensers this well water is then recycled back into the 
aquifer via a second deep well the system provides significant local 
environmental benefits as well as reduced energy usage
the group’ s own crop growing area in kenya uses rain water harvested 
in its own dam a borehole and water pumped from a nearby river for 
which it pays a small annual fee it does not purchase any water from 
a water treatment company 
in recording water consumption for the group the sales offices in the 
uk france and china and the earthoil india operation have been 
excluded on the basis that water usage is included in the rent whilst 
the majority of the data has been accurately recorded from invoice 
information some opening data for the year has not been recorded 
and estimates on consumption have been made on a prorata basis 
as this is the first occasion on which the group has reported its water 
consumption there is no comparable data in respect of prior years
 2013
t otal water used m³ 39708
water efficiency litres per kg of product shipped 400
data included in this table has been independently verified by carbon 
credentials energy services ltd and is covered by an assurance 
report
employment policies
the group is committed to a policy of recruitment and promotion on 
the basis of aptitude and ability without discrimination applications for 
employment by disabled persons are given full and fair consideration 
for suitable vacancies having regard to their particular aptitudes and 
abilities where a person becomes disabled while in the group’s 
employment a suitable position will be sought for that person within 
the group where practical
employee involvement
meetings are held with employees to discuss the operations and 
progress of the business and employees are encouraged to become 
involved in the success of the group through share option schemes 
see note 24 in particular executive directors make half yearly results 
presentations to all employees and encourage questions and dialogue 
on any matters pertaining to the performance or activities within the 
group in addition the information exchange committee iec at  
r c treatt exists in order to encourage a further exchange of ideas 
and information between the company and its employees the iec 
is chaired by the human resources director and the members of the 
committee are all employees below management level who represent 
all departments and areas of the business in the uk board members 
make a point of visiting all group affiliates and regularly carry out site 
visits and tours and thereby engage in meaningful discussions with 
employees at all levels within the organisation allemployee bonus 
schemes based on the performance of the business remain in place
structure of share capital
as at 30 september 2013 the parent company’s share capital 
comprises ordinary shares with a nominal value of 10 pence each  
all of the parent company’s issued ordinary shares are fully paid 
up and rank equally in all respects the rights attached to them in 
addition to those conferred on their holders by law are set out in 
the articles a copy of which can be obtained on request from the 
company secretary
details of the issued ordinary share capital of the parent company 
and movements during the year are set out in note 23 of the financial 
statements during both the current and prior period the parent 
company did not issue any new shares
 
restrictions on transfer of securities
there are no restrictions on the transfer of ordinary shares or on 
the exercise of voting rights attached to them except i where the 
parent company has exercised its right to suspend their voting rights 
or to prohibit their transfer following the omission of their holder or 
any person interested in them to provide the parent company 
with information requested by it in accordance with part 22 of the 
companies act 2006 or ii where their holder is precluded from 
exercising voting rights by the financial services authority’s listing 
rules or the city code on takeovers and mergers
rights and obligations of ordinary shares
on a show of hands at a general meeting every holder of ordinary 
shares present in person or by proxy and entitled to vote shall have 
one vote and on a poll every member present in person or by proxy 
and entitled to vote shall have one vote for every ordinary share held 
subject to the relevant statutory provisions and the articles holders of 
ordinary shares are entitled to a dividend where declared or paid out 
of profits available for such purposes
articles of association
the powers of the directors are conferred on them by uk legislation 
and the articles of association changes to the articles must be 
approved by shareholders passing a special resolution at a general 
meeting
powers of the directors and purchase of own 
shares
at the forthcoming annual general meeting in 2014 the parent 
company will be seeking shareholder authority for the directors’ 
to purchase up to 10 of the parent company’s ordinary shares 
although at present the directors have no plans to buy back any  14   treatt plc annual report and financial statements 2013
directors’ report
continued
shares it is however considered prudent to have the authority in 
place in order that the parent company is able to act at short notice if 
circumstances warrant a resolution will also be proposed at the 2014 
annual general meeting to give the directors the power to issue new 
shares up to an amount of 33 of the existing issued share capital in 
line with the latest institutional guidelines issued by the association of 
british insurers abi of which 5 of the existing issued share capital 
can be issued by disapplying preemption rights these authorities if 
granted by shareholders at the annual general meeting will expire at 
the conclusion of the annual general meeting in 2015 it is the parent 
company’s intention to seek renewal of these authorities annually
treatt employee benefit trust the ‘ebt’
the ebt holds ordinary shares in the parent company acquired in 
the market in order to meet obligations under the group’s employee 
share option schemes no shares 2012 100000 shares were 
purchased by the ebt during the year ended 30 september 2013 
the trustees have waived their voting rights and their right to receive 
dividends other than 0001 pence per share in respect of the ordinary 
shares held by the trust 
annual general meeting and restrictions on 
voting deadlines
the annual general meeting of the parent company will be held at 
treatt plc northern way bury st edmunds suffolk ip32 6nl on 
24 february 2014 the notice of meeting and explanatory notes 
are given on pages 74 to 85 the notice of any general meeting will 
specify the deadline for exercising voting rights and appointing a proxy 
or proxies to vote in relation to resolutions to be proposed at a general 
meeting the number of proxy votes for against or withheld in respect 
of each resolution are announced and published on the treatt website 
after the meeting
auditors
baker tilly uk audit llp has indicated its willingness to continue  
in office on the recommendation of the audit committee resolutions 
are to be proposed at the annual general meeting for the re
appointment of baker tilly uk audit llp as auditors of the parent 
company and its subsidiaries and to authorise the board to fix their 
remuneration the remuneration of the auditors for the year ended 30 
september 2013 is fully disclosed in note 5 to the financial statements
statement of directors’ responsibilities
the directors are responsible for preparing the directors’ report the 
strategic report the directors’ remuneration report the corporate 
governance statement and the financial statements in accordance 
with applicable law and regulations
 
company law requires the directors to prepare group and parent 
company financial statements for each financial year the directors 
are required under the listing rules of the financial services authority 
to prepare group financial statements in accordance with international 
financial reporting standards “ifrs” as adopted by the european 
union “eu” and have elected under company law to prepare the 
parent company financial statements in accordance with ifrs as 
adopted by the eu
 
the financial statements are required by law and ifrs adopted by 
the eu to present fairly the financial position of the group and the 
parent company and the financial performance of the group the 
companies act 2006 provides in relation to such financial statements 
that references in the relevant part of that act to financial statements 
giving a true and fair view are references to their achieving a fair 
presentation
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 the parent company and of the 
profit of the group for that period 
 
in preparing each of the group and parent company financial 
statements the directors are required to
a select suitable accounting policies and then apply them 
consistently
b make judgements and estimates that are reasonable and prudent
c state whether they have been prepared in accordance with ifrss 
adopted by the eu
d prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the group and the 
parent company will continue in business
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the group’s and 
the parent company’s transactions and disclose with reasonable 
accuracy at any time the financial position of the group and the parent 
company and enable them to ensure that the financial statements 
and the directors’ remuneration report comply with the companies 
act 2006 and as regards the group financial statements article 4 
of the ias regulation they are also responsible for safeguarding the 
assets of the group and the parent company and hence for taking 
reasonable steps for the prevention and detection of fraud and other 
irregularities
directors’ statement pursuant to the disclosure 
and transparency rules
each of the directors whose names and functions are listed in the 
directors’ report confirms that to the best of their knowledge
a the financial statements prepared in accordance with ifrs as 
adopted by the eu give a true and fair view of the assets liabilities 
financial position and profit of the group and parent company 
and the undertakings included in the consolidation taken as a 
whole and
b the strategic report contained in the annual report includes a fair 
review of the development and performance of the business and 
the position of the group and the undertakings included in the 
consolidation taken as a whole together with a description of the 
principal risks and uncertainties that they face
statement as to disclosure of information  
to auditors
the directors who were in office on the date of approval of these 
financial statements have confirmed as far as they are aware 
that there is no relevant audit information of which the auditors are 
unaware each of the directors have confirmed that they have taken 
all the steps that they ought to have taken as directors in order to 
make themselves aware of any relevant audit information and to 
establish that it has been communicated to the auditors
this report was approved by the board on 6 december 2013
anita steer
secretary treatt plc annual report and financial statements 2013   15
richard hope was appointed 
finance director in may 2003 
he qualified as a chartered 
accountant in 1990 at 
pricewaterhousecoopers and 
was appointed a fellow of the 
institute of chartered accountants 
in england and wales in 2010 
richard has held senior finance 
positions in valueadded 
manufacturing businesses for 
almost twenty years having 
previously worked as head of 
finance at hampshire cosmetics 
limited from 1996 until 2003
richard hope
finance director
anita haines joined r c treatt  
co limited in january 1988 as 
company secretary and was 
appointed human resources hr 
manager in september 2000 she 
was appointed hr director of the 
group in october 2002 anita will 
be retiring as human resources 
director with effect from 24 
february 2014 and will be seeking 
reelection as a nonexecutive 
director 
anita haines
human resources director
daemmon reeve has extensive 
industry experience and 
knowledge having been employed 
at r c treatt  co limited the 
group’s uk operating subsidiary 
from 1991 to 2010 during this 
time he gained widespread 
experience in technical 
operational sales and purchasing 
disciplines daemmon was 
appointed ceo of treatt usa 
in july 2010 and group ceo in 
august 2012
daemmon reeve
chief executive officer
tim jones is nonexecutive 
chairman of treatt having joined 
the board in february 2012 and 
is ceo and secretary of allia he 
is also nonexecutive director 
and trustee of skillsbridge a 
community support organisation 
tim’s 35year career spans 
financial services sme startups 
and social entrepreneurship he 
has worked across the us middle 
east and europe with posts 
including head of marketing at 
royal insurance and european 
managing director at direct 
marketing corporation he is a 
fellow of the royal society for the 
arts an associate of the chartered 
insurance institute an associate 
fellow at saïd business school 
and entrepreneurinresidence 
at the centre for entrepreneurial 
learning 
tim jones
jeff iliffe joined the board in 
february 2013 and is chief 
financial officer and director of 
cambridgebased abcam plc 
an aim listed global leader in 
the supply of high quality protein 
research tools he has extensive 
experience of the city industry 
and internetbased business 
jeff was a corporate financier at 
panmure gordon  co between 
1989 and 1996 during which time 
he advised treatt and has held 
a number of financial positions at 
companies including enviros group 
limited and plethora solutions 
plc an aim listed company prior 
to joining abcam in 2007 he 
was chief financial officer at the 
ecommerce company st minver 
ltd
jeff iliffe
dr david johnston was appointed 
to the board in may 2011 david 
has a phd in biochemistry and has 
worked for firmenich one of the 
leading global flavour and fragrance 
companies for over 13 years in a 
variety of roles most recently as 
vice president of innovation and 
design david was also a member 
of the flavour executive team at 
firmenich and held the position 
of vice president of the european 
flavour association david is 
currently part owner of natural 
taste consulting
david johnston
ian neil was appointed to the 
board in december 2009 he 
was with international flavors and 
fragrances for 25 years in a variety 
of international management roles 
including vice president europe 
africa and middle east “eame” 
flavors ian is currently the uk 
director of perfotec bv  a laser 
micro perforation provider for the 
fresh produce packaging industry
 senior independent director
ian neil
executive directors
nonexecutive directors
1
1 1 1 1 chair chair chair

2 2 2 2 3 3 3 3
1 nomination committee
2 remuneration committee
3 audit committee 16   treatt plc annual report and financial statements 2013
strategic report
overview
the group is required to produce a strategic report complying with 
the requirements of the companies act 2006 strategic report and 
directors’ report regulations 2013 ‘the regulations’ 
an overview of the group’s strategy and business model is set out 
on page 1 and together with the chairman’s statement ceo’s 
report and financial review on pages 6 to 10 form part of this group 
strategic report this incorporates a review of the group’s activities 
its business performance and developments during the year as well as 
an indication of likely future developments 
the board approved a new group strategy in december 2012 and this 
was presented to all employees in the uk and us by the ceo during 
january 2013 underpinning the strategy outlined on page 1 is a clear 
focus on delivering longterm and consistent growth in profitability by 
focusing on those customers and products which can bring t reatt long 
term sustainable value
our business model is designed to bridge the gap between the 
raw material and providing the quality ingredient solutions which 
our customers want in doing so we are increasingly leveraging our 
position as a key supplier to major global multinational corporations 
key to the success of our business model is our experience and 
knowledge of the ingredients we handle and our focus on product 
innovation
we are clear about what we do and this is outlined on page 2  
in serving the flavour fragrance and consumer goods industries we 
place a particular emphasis on the beverage market where many of 
our innovative ingredient solutions are used
in order to deliver longterm sustainable profit growth there are four 
key pillars to our strategy which support a focused sales approach
• quality – we have an excellent reputation for delivering quality 
products but we are not complacent we invest continuously in 
our quality control and assurance processes to ensure that our 
customers receive quality products right first time
• cost control – we continually bear down on costs and 
improve the efficiency of our business in order to deliver the best 
possible returns for shareholders where we can we manage our 
costs globally in order to maximise our efficiency
• positive culture – we strongly believe that a happy well
motivated workforce is a more successful one as part of strategy 
implementation we have moved to ‘one treatt’ and operate the 
business on a progressively global platform a business is only as 
good as its people – we attract and promote the most talented 
people to drive our business forward and foster a culture of 
responsibility accountability and openness
• health  safety – this is the number one priority in the 
business without a safe business the group cannot exist we 
continuously train and retrain our staff to ensure that we operate 
best health and safety practices throughout the organisation
key performance indicators kpis
1
kpis have been set at group level having been devised to allow the board and shareholders to monitor the group as a whole as well as the 
operating businesses within the group the group has financial kpis which it monitors on a regular basis at board level and where relevant at 
operational executive management meetings as follows
 2013 2012 2011 2010 2009
growth in adjusted profit before tax 231 206 415 286 143
growth in adjusted basic earnings per share 256 191 405 236 259
net operating margin 94 76 92 77 69
return on capital employed
2
 194 144 205 146 123
average net debt to ebitda 128 152 118 165 246
1 all kpis are calculated excluding exceptional items
2 return is defined as operating profit capital employed is defined as net assets plus net debt further explanation of the calculations is given on page 5
in addition the board monitors a number of nonfinancial key performance indicators relating to health and safety and employee wellbeing  
as follows
    2013 2012
number of reportable accidents across the group    3 4
average number of sick days per employee    345 403 treatt plc annual report and financial statements 2013   17
risks and uncertainties
the group has provided in the chairman’s statement ceo report 
financial review and the notes to the financial statements details of 
various risks and uncertainties it faces which include
• foreign exchange risk particularly with regard to the us dollar as 
many of the group’s raw materials are considered to be dollar
denominated commodities
• credit risk in ensuring payments from customers are received in 
full and on a timely basis
• legislative and regulatory risk as new requirements are being 
imposed on business and the industries with which the group 
are involved for example the european reach registration 
evaluation authorisation and restriction of chemicals legislation
• movements in commodity and essential oil prices often caused 
by unpredictable weather patterns or other sudden changes in 
supply or demand for example the impact of the 2004 florida 
hurricanes on grapefruit oil prices the 2008 movement in lemon 
oil prices and the sharp rise and fall in orange oil prices between 
2010 and 2012
the group has taken appropriate steps to manage and control these 
risks which include
• the implementation of a foreign exchange risk management policy 
as explained in the financial review
• agreeing appropriate payment terms with customers including 
where necessary payment in advance or by securing payment 
through bank letters of credit
• taking a proactive and leading role in ensuring the group’s 
systems and procedures are adapted to ensure compliance with 
new or changing legislative or regulatory requirements
• ensuring that group purchases of raw materials are based upon a 
wellresearched understanding of the risks involved and ensuring 
that appropriate inventory balances are held in order to meet 
future demand whilst not holding excessive levels which may 
expose the group to unnecessary levels of risk
group risk is regularly reviewed at board level to ensure that risk 
management is being implemented and monitored effectively
the group regularly reviews its commercial insurance programme and 
maintains an appropriate and adequate portfolio of insurance policies 
in line with the nature size and complexity of the business
the group also continues to have in place a ‘business continuity’ 
team whose ongoing responsibility is to assess the issues which 
the group would face should it experience a major and unforeseen 
disaster and to put in place a clear action plan as to how the group 
would continue to operate successfully in such an event
diversity
appointments within the group are made on merit according to the 
balance of skills and experience offered by prospective candidates 
whilst acknowledging the benefits of diversity  individual appointments 
are made irrespective of personal characteristics such as race 
disability gender sexual orientation religion or age 
as a manufacturing group few women apply for positions  
within the production areas however women are well represented  
in other areas of the business and account for 29 of both the 
group workforce and group senior management positions as at  
30 september 2013 
position male female t otal
group director 6 1 7
senior manager 27 11 38
other employees 186 78 264
t otal employees 219 90 309
social community and human rights issues
the group endeavours to impact positively on the communities in 
which it operates earthoil in particular is committed to purchasing oils 
directly from source at a fair and sustainable price and works closely 
with growers in underdeveloped countries through fair for life – 
social and fair trade certification 
long term and trusted support and cooperation has also been 
a driver for positive change which has led to earthoil’s kenyan 
organic oil farmers association koofa increasing from its initial 90 
members to now well over 500 producers in addition community 
funds provide further benefits to the farmers and their families such 
as scholarships and a project is currently underway to build a social 
hall for community activities
ethical concerns and human rights issues have always played an 
important role in treatt’s company philosophy and the group’s 
ethical and social accountability statement details the standards of 
behaviour which treatt regards as acceptable provision of a safe 
clean working environment free from discrimination coercion and the 
use of child or forced labour is a basic right of all employees which 
treatt expects of its business partners as a minimum standard the 
group is often audited by its customers to assess compliance with 
minimum acceptable standards including ethical and human rights 
considerations 
this strategic report was approved by the board on 6 december 
2013
anita steer
secretary 18   treatt plc annual report and financial statements 2013
corporate governance statement
compliance with the uk corporate governance 
code
the board confirms that throughout the year ended 30 september 
2013 the group has complied with the provisions set out in the uk 
corporate governance code
1
 except for clause d15 in that one 
executive director who has announced their intention to retire as 
an executive director has a service contract which provides for 
two years notice this noncompliance will no longer apply from 
february 2014 in addition and as explained in the directors’ 
remuneration report the board does not fully comply with d22  
in that the remuneration of group senior managers is determined by 
the executive directors as the remuneration committee believe that 
they are best placed to make this decision however remuneration 
proposals in respect of senior managers are reviewed by the 
remuneration committee the bonuses of all senior managers in the 
group are approved by the remuneration committee
the board is accountable to the parent company’s shareholders for 
good governance and the statement set out below describes how 
the principles identified in the uk corporate governance code are 
applied by the group
the directors consider the annual report and financial statements 
taken as a whole to be fair balanced and understandable and 
provides the information necessary for shareholders to assess the 
group’s performance business model and strategy
the terms of reference of all the committees can be found on the 
treatt website at wwwtreattcom
leadership
details of the directors who served during the year the positions they 
hold and the committees of which they are members are shown 
on page 15 the board consists of four nonexecutive directors 
of which tim jones is chairman and three executive directors of 
which daemmon reeve is chief executive officer anita haines will 
retire as an executive director at the conclusion of the annual general 
meeting and is standing for reelection as a nonexecutive director 
there is a clear division of responsibility between the chief executive 
officer who is required to develop and lead business strategies and 
processes to enable the group’ s business to meet the requirements of 
its shareholders and the chairman who is responsible for leadership 
of the board and ensuring that appropriate conditions are created 
to enable the board to be effective in providing entrepreneurial 
leadership to the company the key functions of the chairman are 
to conduct board meetings meetings of shareholders and to ensure 
that all directors are properly briefed in order to take a full and 
constructive part in board discussions the chairman has regular 
contact with the nonexecutive directors without the presence of the 
executive directors concerns relating to the executive management 
of the group or the performance of the other nonexecutive directors 
may be raised with the senior independent director who is ian neil
the board meets at least five times each year and more frequently 
where business needs require with attendance in person or by 
video conference required at each meeting in addition regular 
contact is maintained by email and telephone with written updates 
provided in respect of ongoing issues enabling regular input from 
all board members on a biannual basis a board meeting is held  
at the group’s us subsidiary treatt usa to enable closer interaction 
of the nonexecutive directors with the senior management and staff 
day to day management of the group is delegated to the executive 
directors however the board has a schedule of matters reserved 
to it for decision and the requirement for board approval on these 
matters is communicated widely throughout the senior management 
of the group these matters which are reviewed periodically 
include material capital commitments commencing or settling major 
litigation business acquisitions and disposals appointments to 
subsidiary company boards and dividend policy 
to enable the board to function effectively and directors to 
discharge their responsibilities full and timely access is given to  
all relevant information in the case of board meetings this consists of 
a comprehensive set of papers including regular business progress 
reports and discussion documents regarding specific matters 
board meetings are of sufficient duration to enable debate and 
discussion ensuring adequate analysis of issues during the decision 
making process further opportunity for more informal and extended 
discussion is provided at board lunches which take place after every 
board meeting and also provide the board with an opportunity to 
meet members of staff who are invited to attend
there is an agreed procedure for directors to take independent 
professional advice if necessary and at the group’s expense this is 
in addition to the access which every director has to the company 
secretary the secretary is charged by the board with ensuring that 
board procedures are followed and that there are good information 
flows within the board and its committees and between senior 
management and nonexecutive directors
at t reatt there is a commitment to high standards of corporate 
governance throughout the group and this is reflected in our governance 
principles policies and practices we believe that effective governance 
not only in the boardroom but right across the business ultimately 
produces a better business and supports longterm performance
tim jones 
chairman
1 a copy of the uk corporate governance code can be obtained from wwwfrcorguk treatt plc annual report and financial statements 2013   19
effectiveness
the directors believe that the board having been refreshed in  
2011 2012 and 2013 has an appropriate balance of skills and 
experience with financial technical industry specific and general 
business disciplines being represented the structure of the board 
ensures that no one director is dominant in the decisionmaking 
process and that open debate and discussion is encouraged 
there is a suitable balance between the number of executive  
and nonexecutive directors 
the importance of a diverse board including gender diversity 
which has been the subject of recent debate in respect of board 
composition is recognised and supported by the directors of 
treatt plc the board is conscious of the benefits of diversity in the 
boardroom and within management positions within the group our 
policy is to recruit the best possible candidate for each individual role 
having regard to qualifications experience and personality without 
prejudice to a candidate’s characteristics 
the board considers that all the nonexecutive directors are 
independent of management and free of any relationship which could 
materially interfere with the exercise of their independent judgement 
in accordance with the uk corporate governance code in the event 
of her reelection as a nonexecutive director in february 2014 
anita haines will not be regarded as independent as defined by the 
code having just retired as an executive director none of the non
executive directors have a significant interest in the shares of treatt 
plc and all receive a fixed fee for their services however  in exceptional 
circumstances where significant additional time commitment is 
required a nonexecutive director may if approved by the board 
or remuneration committee as required be paid an additional fee 
the board is satisfied that the chairman’s other commitments do not 
detract from the extent or the quality of the time which he is able to 
devote to the group
nomination committee
members of the nomination committee throughout the year are 
shown on page 87 the nomination committee’s principal remit is 
to consider the appointment or retirement of directors to review 
proposed nominations and make recommendations thereon to the 
board
appointments to the board of both executive and nonexecutive 
directors are considered by the nomination committee which 
consults with executive directors and ensures that a wide range of 
candidates are considered the committee considers the skills mix of 
the serving directors to identify potential gaps or areas where increased 
strength is required in accordance with treatt’ s board diversity policy 
and having recognised the benefit of having an appropriate level of 
diversity on the board to support the achievement of its strategic 
objectives the committee also considers the benefits of all aspects 
of diversity including but not limited to race disability gender sexual 
orientation religion belief age and culture the recommendations 
of the nomination committee are ultimately made to the full board 
which considers them before any appointment is made 
during the year jeff iliffe was appointed as a nonexecutive director 
it had been recognised that following the change of chairman in 
2012 financial skills and city experience were underrepresented on 
the board amongst the nonexecutive directors and a nonexecutive 
director with those skills was sought to bridge the gap although 
the role was not openly advertised a number of applications were 
received and considered jeff iliffe who had previously worked with 
treatt when he was at panmure gordon  co between 1989 and 
1996 attended a series of interviews with the nomination committee 
and subsequently the executive directors following satisfactory 
completion of this process the appointment was approved by the 
full board 
upon appointment directors are provided with access to an 
appropriate external training course and to advice from the group’s 
solicitors in respect of their role and duties as a public company 
director where they have significant relevant experience for the role 
training may be felt to be unnecessary in addition all new directors 
receive an induction to acquaint them with the group this takes the 
form of site tours meetings with other board members and senior 
management and the provision of an induction pack which contains 
general information about the group its structure and key personnel 
together with copies of relevant policies and procedures financial 
information and briefings on directors’ responsibilities and corporate 
governance 
the nomination committee is also responsible for the annual 
evaluation of the board its committees and its directors during the 
year an evaluation of the board its committees and each individual 
director is carried out internally with the assistance of the company 
secretary as the board believes it has the appropriate resources 
and experience to undertake the reviews the board and committee 
reviews are conducted under the supervision of the appropriate 
chairman the board evaluation process involved completion by 
each board member of a comprehensive anonymous questionnaire 
designed to evaluate each of the essential components of an effective 
board the results which were benchmarked against the previous 
year’s evaluation demonstrated that performance is effective overall 
these results were reported to the committee and action points 
agreed to further improve performance
the performance of individual directors is evaluated by the chairman 
in conjunction with the chief executive officer in the case of other 
executive directors the chairman is evaluated by the chief 
executive officer and senior independent director the process 
includes individual performance meetings at which past performance 
is discussed and evaluated and future objectives established in the 
event that training and development needs are identified during 
the evaluation process suitable resources or training are provided 
during the course of the year the board has undertaken training on 
corporate governance provided by an external trainer specialising in 
board support
any director appointed during the year is required under the 
provisions of the articles of association to retire and seek election by 
shareholders at the next annual general meeting the articles also 
require that one third of the directors retire by rotation each year and 
seek reelection at the annual general meeting provided always that 
all directors must be subject to reelection at intervals of no more than 
three years any nonexecutive director having been in post for nine 
years or more is subject to annual reelection the directors required 
to retire are those in office longest since their previous reelection 20   treatt plc annual report and financial statements 2013
corporate governance statement
continued
other costs incurred to support the group in discussions with the 
bovill family shareholders and related matters
•  the treatment of the contingent consideration included within the 
investment of the earthoil group
•  the level of provisions made against the carrying value of inventories 
and
•  the estimation of taxable profits in the jurisdictions in which the 
group operates to support the current tax liability 
after due challenge and debate the committee was content that 
the assumptions made and judgements applied in these areas 
which where possible are supported by external advice or other 
corroborative evidence are reasonable and therefore agreed with 
management recommendations
the committee also reviewed compliance with the additional 
disclosure requirements recently introduced for companies reporting 
on financial years ending on or after 30 september 2013 which 
the group is reporting on for the first time this included changes 
to the reporting on directors’ remuneration and the introduction of 
the remuneration policy the new strategic report and reports on 
greenhouse gas emissions and gender diversity
membership and meetings
members of the audit committee throughout the year are shown on 
page 87 the committee has met twice since the approval of the 2012 
financial statements the auditor attended these meetings other than 
when their appointment or performance was being reviewed the 
chief executive officer finance director and other senior finance staff 
attend as and when appropriate the committee has discussions 
at least once a year with the auditor without management being 
present furthermore the committee chairman meets informally 
with and has access to the finance director to discuss matters 
considered relevant to the committee’s duties
external auditor
the committee has oversight of the relationship with the external 
auditor and is responsible for monitoring the auditor’ s independence 
objectivity and compliance with professional and regulatory 
requirements the incumbent auditors baker tilly uk audit llp  were 
invited to submit a full audit tender in 2009 and were reappointed on 
an annual rolling contract but with a longterm agreement on fees 
on the basis of their proposal during the year the committee has 
monitored baker tilly’s effectiveness and performance and were 
satisfied that baker tilly were providing the audit services agreed 
the committee has therefore recommended to the board that baker 
tilly be reappointed in 2014
the level of nonaudit fees and their effect on the auditor’s 
independence or objectivity is also considered on a regular basis 
the split between audit and nonaudit fees for the year under review 
appears in note 5 nonaudit fees are generally paid mainly in respect 
of tax compliance services and advice on share schemes the group 
has a policy to ensure that the provision of such services does not 
impair their independence or objectivity and when considering the use 
of the auditor to undertake nonaudit assignments management give 
consideration at all times to the provisions of the frc guidance on 
audit committees with regard to the preservation of independence
audit committee
role and responsibilities
the main responsibilities of the audit committee “the committee” are 
•  to monitor the integrity of the annual report of the group and to 
review and report to the board on significant financial reporting 
issues and judgements which it contains having regard to matters 
communicated to it by the auditor
•  to review the content of the annual report and advise the board 
on whether taken as a whole it presents a balanced assessment 
of the group’s position and provides the information necessary for 
shareholders to assess the group’s performance business model 
and strategy
•  to oversee the relationship with the auditor including making 
recommendations to the board on their appointment remuneration 
and terms of engagement the committee also monitors their 
independence and objectivity and sets the policy for nonaudit 
work
•  to make recommendations to the board on the requirement for an 
internal audit function and
•  to ensure that procedures are in place whereby staff of the group 
may in confidence raise concerns about possible improprieties 
in matters of financial reporting or other matters the committee 
has arrangements in place for the proportionate and independent 
investigation of such matters and for appropriate followup action
activities since the last report
•  the composition of the committee was reviewed and on appointment 
to the board in february 2013 jeff iliffe was invited to join as 
chairman jeff is deemed by the board to have significant recent 
and relevant financial experience he is a chartered accountant 
with over 20 years experience in the financing and management of 
companies both in the city and in industry
•  a review of the committee’s terms of reference was undertaken 
and revisions made to reflect the current responsibilities of the 
committee
•  a review of the requirement for an internal audit function was 
undertaken given the structure of the group and the level of 
control exercised by the management team the establishment of a 
formal internal audit function was not considered to be necessary 
at present as the group develops the need for such a function will 
be kept under review
•  the committee met with the auditor to agree the scope of audit 
work to be undertaken and agree the audit fee
•  a review of the auditor’s performance was undertaken to ensure 
that they remain objective and independent and to assess the 
effectiveness of the audit 
•  the group’s annual report for 2013 was reviewed to ensure that 
taken as a whole it was fair balanced and understandable this 
included consideration of a report from the auditor on their audit 
and review of the financial statements and
•  the policy for the engagement of the external auditor for nonaudit 
related services was reviewed together with an assessment of its 
implementation during the year
financial reporting
amongst the matters considered by the committee were the key 
accounting issues matters and judgement in relation to the group’s 
2013 annual report and financial statements relating to
•  the presentation of the financial statements and in particular the 
treatment of exceptional items in respect of legal and professional 
fees relating to the earthoil contract dispute and advisory fees and  treatt plc annual report and financial statements 2013   21
remuneration committee
the remuneration committee’s primary responsibility is to determine 
the remuneration of the executive directors of the group ensuring 
that there is a sufficient balance between the levels of ordinary 
remuneration and performancerelated elements designed to 
promote the group’s long term success
full details of the directors’ remuneration and a statement of the 
group’ s remuneration policy are set out in the directors’ remuneration 
report appearing on pages 23 to 35 members of the remuneration 
committee throughout the year are shown on page 87 the chief 
executive officer attends meetings of the remuneration committee 
to discuss the performance of the other executive directors and 
make proposals as necessary but is not present when his own 
position is being discussed
each executive director abstains from any discussion or voting at 
full board meetings on remuneration committee recommendations 
where the recommendations have a direct bearing on their own 
remuneration package the details of each executive director’s 
individual package are fixed by the committee in line with the policy 
adopted by the full board
accountability
the board is responsible for reviewing and approving the annual report and financial statements the half year results and other financial 
statements made to ensure they present a balanced assessment of the group’s position drafts of all financial releases are provided to the 
board in a timely manner and directors’ feedback is discussed and incorporated where appropriate prior to publication
attendance at meetings
the members of the board during the year and its committees together with their attendance are shown below
   audit  nomination remuneration
 board committee  committee committee
number of meetings held in year 6 2 3 5
daemmon reeve 
chief executive officer 6 na 3 na
anita haines
human resources director 6 na na na
richard hope
finance director 6 na na na
tim jones 6 2 3 5
nonexecutive director and chairman chairman  chairman 
jeff iliffe 5 1 2 4
nonexecutive director from 25 february 2013  chairman
david johnston 6 2 3 5
nonexecutive director  
ian neil 6 2 3 5
senior independent nonexecutive director  chairman 1  chairman
peter thorburn 1 1 1 1
nonexecutive director until 25 february 2013 
as permitted by the parent company’s articles of association directors may participate in the minuted decisions via telephone or video 
communication where it is impractical for them to attend in person  22   treatt plc annual report and financial statements 2013
information technology
the group operates on a common centrally managed computer 
platform this provides common reporting and control systems and 
the ability to manage and interrogate businesses remotely however 
there are associated risks with having the entire group it systems on 
a common platform such as it security access rights and business 
continuity these risks are mitigated by an ongoing focus on it 
security through a process of continuous investment in it facilities
capital investment
the group has clearly defined guidelines for capital expenditure 
these include annual budgets appraisal and review procedures 
and levels of authority postinvestment appraisals are performed for 
major investments
risk assessment and information
operational management in conjunction with the executive directors 
who report regularly to the board are responsible for identification 
and evaluation of significant risks applicable to their area of business 
and the design and operation of suitable internal controls details of 
the principal risks associated with the group’s activities are given in 
the strategic report on page 17
relations with shareholders
the group places a great deal of importance on communication with 
its shareholders the parent company mails to all shareholders its full 
annual report and financial statements this information together with 
the quarterly interim management statements half yearly statements 
and other financial announcements is also available on the group’s 
website and upon request to other parties who have an interest in 
the group’s performance 
there is regular dialogue with individual institutional and other major 
shareholders as well as presentations after the half and full year 
results the views of major shareholders are communicated and 
discussed at board meetings and nonexecutive directors may 
request meetings with major shareholders should they wish to do so 
and vice versa all shareholders have the opportunity to put questions 
at the parent company’s annual general meeting
this report was approved by the board on 6 december 2013
anita steer
secretary
financial and internal control
the board confirms that a process for the ongoing identification 
evaluation and management of significant risks faced by the group 
has been in place throughout the year and to the date of approval 
of this report which complies with the guidance ‘internal control 
guidance to directors’ “the turnbull guidance” the process is 
subject to regular review by the board and there were no significant 
internal control issues identified during the year
the directors are responsible for the group’s system of internal 
control the effectiveness of which is reviewed by them annually this 
covers all controls including those in relation to financial reporting 
processes including the preparation of consolidated accounts in 
addition to monitoring reports received via the executive directors 
they consider the risks faced by the group whether the control 
systems are appropriate and consult with internal and external 
experts on environmental insurance legal and health and safety 
compliance however such a system can only provide reasonable 
but not absolute assurance against material misstatement or loss 
the key procedures that the directors have established to provide 
effective internal controls are as follows
financial reporting
a detailed formal budgeting process for all group businesses 
culminates in an annual group budget which is approved by the 
board results for the group and its main constituent businesses 
are reported monthly against the budget to the board and revised 
forecasts for the year are prepared through the year the group 
uses a standardised consolidation system for the preparation of 
the group’s monthly management accounts half year and annual 
consolidated financial statements which is subject to review by 
senior management throughout the consolidation process
the board monitors the integrity of all financial announcements 
released by the group ensuring that among other things appropriate 
accounting standards and policies are applied consistently that 
all material information is presented and that the disclosures are 
accurate 
financial and accounting principles
financial controls and accounting policies are set by the board so as 
to meet appropriate levels of effective financial control compliance 
with these policies and controls is reviewed where necessary by 
external auditors
corporate governance statement
continued treatt plc annual report and financial statements 2013   23
directors’ remuneration report
annual statement
introduction
as chairman of the remuneration committee i am pleased to 
present our report on directors’ remuneration 
this report has been prepared in accordance with the new legislation 
relating to the reporting of directors’ remuneration and complies with 
the companies act 2006 ‘the act’ and schedule 8 of the large 
and mediumsized companies and groups accounts and reports 
regulations 2008 the ‘regulations’ as amended the report also 
meets the relevant requirements of the listing rules of the financial 
conduct authority and describes how the board has applied the 
principles of the uk corporate governance code relating to directors’ 
remuneration in accordance with the act the remuneration report is 
now divided into two sections a remuneration policy report which 
describes our approach to remuneration and an implementation 
report which details the remuneration paid to the directors during 
the financial year under review the remuneration policy report and 
the implementation report will be put to binding and advisory votes 
respectively at the agm of the parent company on 24 february 
2014
2013 performance
as detailed elsewhere in this report the group performed well in 
2013 meeting upwardly revised expectations for adjusted pre
tax profit and earnings per share the group’s new strategic plan 
although only approved in late 2012 showed some early signs of 
success contributing towards the year’s result the base salaries of 
anita haines and daemmon reeve were increased with effect from 1 
october 2013 by 1 and 27 respectively in line with the increases 
received by staff generally the base salary of richard hope was 
increased by 8 following the identification of a misalignment with 
benchmarking data relative to other fledgling index companies 
remuneration policy
the aim of our remuneration policy is to attract and retain 
appropriately skilled and experienced directors with the ability to 
deliver the group’s strategic objectives and obtain good returns 
for shareholders in accordance with the group’s values this may 
be achieved through an appropriate combination of salary benefits 
and performancerelated longer term incentives which align the 
interests of directors with shareholders following consultation with 
the group’s major shareholders a share retention policy has been 
adopted by the board which imposes a shareholding requirement of 
200 of salary on the chief executive officer and 150 of salary on 
the finance director 
the committee believes that this policy is aligned with our business 
strategy outlined elsewhere in this report the committee is also 
satisfied that within the remuneration policy  and particularly in respect 
of the setting of performance targets there is a sufficient balance 
between encouraging entrepreneurial behaviour without encouraging 
excessive risktaking 
 
in a departure from provision d22 of the uk corporate governance 
code the remuneration of group senior management is determined 
by the executive directors since the board believes that the 
executive directors are best placed to make this decision however 
remuneration proposals in respect of senior managers are reviewed 
and monitored by the committee to ensure consistency and 
proportionality the bonuses of all senior managers in the group are 
approved by the committee
decisions made during the year
in line with its terms of reference the following key matters were 
considered by the committee during the year 
• approval of the 2012 directors’ remuneration report 
• agreement of the bonuses payable for the 2012 financial year
• grant of share options to directors under the treatt 2005 
approved and unapproved share option schemes and the 
setting of performance conditions 
• review of the remuneration policy and the remuneration 
arrangements for the executive directors and chairman 
• review of salary levels for the executive directors and agreement 
of salary increases for the 2014 financial year 
• to propose a long term incentive plan to shareholders at the 
2014 agm which will operate in place of the existing treatt 2005 
approved and unapproved share option schemes and
• to propose an allemployee share incentive plan to shareholders 
at the 2014 agm
during the year all elements of the packages of the executive 
directors were reviewed and no significant changes have been made 
although greater emphasis will be placed on sharebased incentives 
going forward with new plans as detailed above being proposed to 
shareholders
i hope that shareholders will support the resolutions on directors 
remuneration and the new share schemes and i will be available at 
the agm to answer any questions you may have
ian neil
chairman
remuneration committee
members of the committee are shown on page 87 and for full 
biographies of the committee members see page 15 the terms of 
reference of the committee can be found on the treatt website at 
wwwtreattcom
policy section
remuneration policy report
the committee’s policy is to ensure that remuneration structures are 
simple transparent and proportional to the size and complexity of the 
business whilst ensuring that executive directors are fairly rewarded 
for the role they undertake the main principles of the remuneration 
policy are
• salaries should be competitive but not excessive when compared 
to similar companies
• remuneration packages should align the interests of directors 
with shareholders by using stretching performance metrics that 
provide a strong link to the creation of shareholder value
• there should be appropriate balance between fixed and 
performancerelated pay to ensure delivery of results over the 
short medium and longer term
• performance metrics should not encourage a culture of excessive 
risk taking
• directors should invest in and retain shares in treatt
the committee reviews its policy annually to determine whether it 
remains effective and aligned to the group strategy as a result of 
this review greater emphasis will be placed on longerterm share
based incentives to more closely align the interests of directors with 
shareholders and provide stretching longer term targets to encourage 
strong performance
the current intention is that the framework of this remuneration policy 
will apply for future years  24   treatt plc annual report and financial statements 2013
executive directors’ remuneration
the following table sets out a summary of each element of the executive directors’ remuneration how it operates the maximum opportunity 
available applicable performance metrics and changes to remuneration for the 2014 financial year
element —
purpose and link  
to strategy operation
maximum 
opportunity
performance 
metrics
changes for 2014 
financial year
base salary
help recruit and retain 
high calibre executive 
directors
to provide a competitive 
salary relative to the size 
of the group
reflects individual 
experience and the role
reviewed annually by the 
committee with changes taking 
effect from 1 october unless a 
change in responsibility requires an 
interim review
influenced by personal 
performance and by the increase in 
salaries of other group employees 
normally benchmarked at 
intervals of 3 years against similar 
companies and targeted broadly at 
the median level 
discretion may be exercised for the 
purpose of retention
excluding a review 
required by a 
change in role or 
responsibility to align 
with benchmarking 
or in exceptional 
circumstances the 
annual increase 
should not exceed 
the average 
salary increase of 
employees within  
the group
individual and 
company 
performance are 
considered
no changes have been 
made to the salary review 
process
base salary increase for 
richard hope addresses 
the misalignment with 
benchmarking other 
base salary increases are 
consistent with increases 
of group employees
the car and fuel 
allowances of daemmon 
reeve and richard 
hope have been rolled 
into salary to provide a 
simpler remuneration 
structure
benefits
help recruit and retain 
high calibre executive 
directors
entitlement to the following benefits 
on the same terms as employees 
in the country in which director is 
resident
private healthcare  except that 
daemmon reeve also receives 
family cover in the uk life 
assurance permanent health 
insurance – except that daemmon 
reeve receives enhanced long 
term disability cover allemployee 
share schemes
any new benefits introduced to 
staff generally shall be provided to 
directors on equal or comparable 
terms
discretion may be exercised to 
provide appropriate benefits that 
might become payable as a result 
of a new business requirement 
such as a need for a director to 
relocate 
except as otherwise 
stated these are on 
the same terms as 
the benefits received 
by other employees 
in the country in 
which the director is 
resident
not applicable none
directors’ remuneration report
continued treatt plc annual report and financial statements 2013   25
element —
purpose and link  
to strategy operation
maximum 
opportunity
performance 
metrics
changes for 2014 
financial year
annual bonus
note 1
provides an element 
of at risk pay which 
incentivises the 
achievement of good 
annual financial results 
aligns directors’ interests 
with shareholders
the rules of the executive 
directors bonus scheme and the 
performance targets are reviewed 
every three years
a bonus pool is calculated by 
reference to the achievement 
of performance targets for the 
financial year and each director 
is entitled to a set percentage of 
the pool subject to the maximum 
opportunity
bonuses are subject to 
determination by the committee 
after year end and are paid in cash 
in december 
discretion may be exercised 
in respect of the treatment of 
exceptional items which may 
have the effect of increasing or 
decreasing the bonus pool 
100 of salary the bonus pool 
is based on an 
amount by which 
adjusted pretax 
profit exceeds a 
minimum level 
the bonus pool 
ranges from 
3 of pretax 
profit above the 
threshold level rising 
incrementally to a 
maximum of 16 
for performance 
exceeding the 
threshold by a 
specified margin
for 2014 bonuses the 
committee’s discretion 
has been extended to 
include the ability to 
reduce bonus where 
circumstances have 
created a sufficiently 
significant impact on 
the reputation of the 
group to justify in the 
view of the committee 
the operation of this 
discretion
the bonus pool is being 
recalibrated and will 
range from 15 to 9 
of profits in excess of a 
minimum level
daemmon reeve will be 
eligible to receive 60 
of the pool and richard 
hope 40
share options
note 2
incentivises directors 
to achieve returns for 
shareholders over a 
longer time frame
aligns directors’ interests 
with shareholders
the group has one approved and 
one unapproved share option 
scheme which were approved by 
shareholders in february 2005 
grants of options are considered 
annually after year end the 
quantum of awards are reviewed 
to ensure that they are in line with 
market rates
 
awards must be made at market 
price with vesting dependent on 
the achievement of performance 
conditions over a period 
determined by the committee 
which shall be a minimum of  
3 years 
discretion may be exercised in 
respect of the performance criteria 
by replacing the current measure 
with a similarly appropriate 
measure or combination of 
measures
the committee may also exercise 
the specific discretions contained 
within the rules of the scheme as 
approved by shareholders
100 of salary based 
on market value of 
shares at date of 
grant
performance is 
measured over 
three years the 
vesting of the 
options shall be 
subject to growth 
in adjusted basic 
eps exceeding 
a minimum level 
during the period 
from date of grant 
to date of vesting 
20 vests at 
threshold rising 
incrementally 
to 100 for 
performance 
exceeding the 
threshold by a 
specified margin
options lapse if 
performance criteria 
are not met at the 
end of the three 
year performance 
period
none 26   treatt plc annual report and financial statements 2013
element —
purpose and link  
to strategy operation
maximum 
opportunity
performance 
metrics
changes for 2014 
financial year
long t erm incentive 
plan note 2
incentivises directors 
to achieve returns for 
shareholders over a 
longer time frame
aligns directors interests 
with shareholders
the board has proposed an 
ltip which will be put before 
shareholders at the agm in 
february 2014
the committee will consider 
awards of shares under the 
ltip annually and will review the 
quantum of awards to ensure that 
they are in line with market rates
awards will be made at nil cost 
with vesting dependent on the 
achievement of performance 
conditions over a period 
determined by the committee 
which shall be a minimum of  
3 years
discretion may be exercised in 
respect of the performance criteria 
by replacing the current measure 
with a similarly appropriate 
measure or combination of 
measures
the committee may also exercise 
the specific discretions contained 
within the rules of the scheme as 
approved by shareholders
100 of salary based 
on market value of 
shares at date of 
grant
the vesting of the 
awards shall be 
subject to growth 
in adjusted basic 
eps exceeding 
a minimum level 
during the period 
from date of grant 
to date of vesting 
20 vests at 
threshold rising 
incrementally 
to 100 for 
performance 
exceeding the 
threshold by a 
specified margin
awards lapse if 
performance criteria 
are not met at the 
end of the three 
year performance 
period
if approved 2014 will be 
the first year in which this 
scheme will operate
share retention policy holding requirements
ceo – 200 of basic salary
fd – 150 of basic salary
directors are required to retain 
shares acquired under share
based incentive awards until the 
holding requirements are met 
save that they are permitted to 
sell sufficient shares to pay any 
exercise price and all applicable 
taxes due in respect of that award
not applicable not applicable this policy is effective 
from 6 december 2013
pension
help recruit and retain 
high calibre executive 
directors and to provide 
a competitive package 
relative to the size of the 
group
entitlement to receive employer 
contributions into a defined 
contribution pension scheme on 
the same terms as employees in 
the country in which the director is 
resident
daemmon reeve also receives a 
contribution into a supplemental 
executive retirement plan serp
uk employees  
9 base salary 
contribution or 15 
where previously 
a member of the 
defined benefit 
pension scheme no 
personal contribution 
required in either 
case
us employees – up 
to 6 base salary 
contribution which 
matches personal 
contribution
serp  4 base 
salary contribution 
no personal 
contribution required
not applicable none
directors’ remuneration report
continued treatt plc annual report and financial statements 2013   27
element —
purpose and link  
to strategy operation
maximum 
opportunity
performance 
metrics
changes for 2014 
financial year
recruitment of 
executive directors
enable recruitment of 
high calibre executive 
directors able to 
contribute to the success 
of the group
salary will be set to reflect skills 
and experience of incoming 
director and market rate for the 
role to be undertaken
existing benefits and incentives 
of the group to be used with 
participation on the same basis as 
existing directors
payment of relocation expenses 
where relevant
in the event of an internal 
promotion any commitments made 
prior to promotion may continue 
to be honoured when they would 
otherwise be inconsistent with this 
policy 
discretion may be exercised in 
exceptional circumstances and 
existing entitlements with current 
employer such as bonus and 
share schemes may be bought 
out on a like for like basis and 
subject to performance conditions
recruitment awards 
are subject to the 
maximum value of 
any outstanding 
awards forgone by 
the recruit
based on existing 
treatt performance 
conditions
not applicable
clawback
to ensure executive 
directors do not 
benefit from errors or 
misconduct 
provisions are to be included 
in performancerelated 
remuneration to enable 
clawback of remuneration 
which has been overpaid due 
to material misstatement of the 
group’s accounts errors made 
in calculation or a director’s 
misconduct
not applicable not applicable these provisions will be 
included in respect of 
2014 and onwards
notes
1 the performance targets were set by the remuneration committee and are reviewed annually to ensure that they continue to incentivise 
strong financial performance the committee continues to believe that this performance measure offers a balance between the needs 
of shareholders in providing good profitability and providing a measure of performance over which the executive directors have direct 
influence the committee considers that the level of performance required is appropriately stretching
 the bonuses of staff and senior management are restricted to between 12 and 75 of base salary depending on seniority role and 
market conditions
2 performance targets are set by the committee at the date of grant of the options to ensure that they are appropriately stretching the 
committee considers adjusted basic eps to be a complete and appropriate measure of performance capturing revenue growth and 
operating margin eps targets are aligned with the board’s strategy
 
 if the ltip is approved by shareholders in february 2014 it will replace the approved and unapproved share option schemes and no further 
grants will be made under these schemes after february 2014 renewal of the approved and unapproved share option schemes will not 
be sought once they expire in february 2015 the ltip permits the grant of nil cost options which subject to remaining an employee and 
the satisfaction of performance criteria provide the participants with the benefit of the full market value of the shares 
 awards under the approved and unapproved schemes and the proposed ltip may be made to senior executives who have significant 
influence over the group’ s ability to meet its strategic targets with such awards being subject to the achievement of performance conditions 
set by the committee at the date of grant 28   treatt plc annual report and financial statements 2013
nonexecutive directors’ remuneration
element —
purpose and link  
to strategy operation
maximum 
opportunity changes for 20132014
fees
to recruit high calibre  
nonexecutive directors
to reward additional 
responsibility by virtue of position 
as chairman of the board or 
chairman of a committee
subject to an aggregate limit within the 
articles of association for which the 
board has proposed an increase which 
will be put before shareholders at the 
agm in february 2014
reviewed annually with changes taking 
effect from 1 october 
the chairman’s fees are reviewed  
by the committee and the other non
executives’ fees are reviewed by the 
board excluding the nonexecutives 
influenced by the increase in salaries of 
other group employees and by personal 
performance
benchmarked against similar companies 
and targeted broadly at the median level 
additional fees may be paid in respect 
of increased responsibility or time 
commitment required by the role or in 
respect of invoiced consultancy fees 
where relevant
excluding a review 
required by a change 
in role or responsibility 
or to align with 
benchmarking the 
annual increase should 
not exceed the average 
increase of employees 
within the group
fee increase for tim jones 
takes account of an increase in 
the time commitment required 
for the role and addresses the 
misalignment with benchmarking
fee increases for the other 
nonexecutive directors are 
consistent with increases of 
group employees except that 
a small additional fee has been 
awarded in respect of the 
position of chairman of the audit 
and remuneration committees
where exceptional circumstances arise the committee shall have discretion to approve payments not specifically referred to above where the 
committee acting in good faith and taking into account the needs of the wider business considers it reasonable and appropriate to do so
illustration of remuneration policy
the graphs below provide estimates of the potential future reward for each of the executive directors based on their current roles the 
remuneration policy outlined on pages 23 to 30 and base salaries as at 1 october 2013 although daemmon reeve is paid in us dollars the 
figures below are in pounds sterling at an exchange rate of £1156 being the average rate over the preceding twelve months
as the illustrations are forwardlooking anita haines is not included as an executive director as she will be stepping down from her position at 
the agm on 24 february 2014 and will be standing for reelection as a nonexecutive director
500
400
300
200
100
0
minimum on target maximum minimum on target maximum
chief executive officer  
daemmon reeve
finance director  
richard hope
salary
benefits
pension
bonus
share options
only those share options which potentially vest in 2014 have been included and have been calculated as the difference in market value at 
30 september 2013 being £6025 and the option price following the consolidation of car and fuel allowances into salaries richard hope’s 
benefits total less than £1000 per annum and are not shown
directors’ remuneration report
continued
£’000
remuneration policy illustration treatt plc annual report and financial statements 2013   29
comparison of remuneration policy 
this policy sets out the remuneration structure applicable to directors of the group salary levels and incentive arrangements applicable to 
other group employees are determined by reference to local employment conditions for comparative roles 
budgeted salary increases for group employees are taken into consideration when determining increases for the executive directors
employees are provided with a competitive benefits package including healthcare life assurance and pension recent replacement of the 
defined benefit scheme in the uk has applied equally to all employees including directors consistent with directors employees are eligible to 
participate in an annual bonus scheme with conditions linked to the performance of their operating subsidiary and the group overall employee 
share ownership is encouraged across the group and participation particularly in the uk is strong if approved the introduction of a share 
incentive plan in the uk is designed to further encourage employee share ownership eligible employees including executive directors are 
able to participate in the allemployee share schemes on equal terms executive directors and key employees with the greatest potential to 
influence achievement of the group’ s strategic objectives are provided with share options or long t erm incentives if approved by shareholders 
designed to encourage strong group performance 
the group does not consult with employees in respect of the executive directors remuneration policy however the committee receives 
regular updates on salary and bonus levels across the group and is aware of how the remuneration of directors compares to employees 
in addition when setting remuneration levels for the executive directors the committee takes account of the levels of remuneration received 
by executive directors of similar companies that are selected on the grounds of
• size in terms of turnover profits and number of people employed
• a ranking within the ftse fledgling index or ftse small cap ind ex
• the diversity and complexity of the business
• the geographical spread of its business and
• market segment
whilst remuneration consultants have not been engaged regular benchmarking is undertaken against companies within the ftse fledgling 
and small cap indexes using salary reports and surveys of established remuneration consultants 
directors’ contracts
ex ecutiv e d ir ector s
the committee reviews the contractual terms of new and existing executive directors to ensure that they reflect best practice and are designed 
to attract and retain suitable candidates the committee considers that a rolling contract terminable on twelve months’ notice by either party is 
appropriate the notice period of anita haines which she is currently serving and expires at the 2014 agm is historic and is no longer regarded 
as appropriate by the committee 
summary of director’s service contracts as at 30 september 2013
   
 date of contract notice period
daemmon reeve  30 october 2012 12 months
richard hope   12 may 2003  12 months
anita haines  24 december 2002 2 years
 richard hope signed a new contract on 1 october 2013 which is consistent with the new remuneration policy
summary of the key elements of directors’ service contracts
provision summary
notice period 12 months by either party
 exception — anita haines
termination payment daemmon reeve — payment in lieu of notice clause providing for base salary and benefits payable  
 during notice period
 richard hope — no provision for payment in lieu of notice
salary reviewed annually with effect from 1 october each year
benefits private healthcare life assurance permanent health insurance or other disability cover pension
 participation in discretionary incentive arrangements determined by the committee 30   treatt plc annual report and financial statements 2013
the directors’ contracts are available for inspection at the company’s registered office during normal business hours
future contracts are to provide for remuneration obligations comparable to those set out above taking into consideration role and responsibility 
except in exceptional circumstances where additional incentive is required in order to secure the services of an outstanding candidate 
n on ex ecutiv e d ir ector s
all nonexecutive directors are subject to the same terms and conditions of appointment which provide for the payment of fees for their 
services in connection with board and board committee meetings in their nonexecutive capacities they do not qualify for participation in any 
of the group’s bonus share option or other incentive schemes and they are not eligible for pension scheme membership 
the terms and conditions of appointment of nonexecutive directors are available for inspection at the company’s registered office during 
normal business hours
payments for loss of office
in accordance with the uk corporate governance code notice periods shall not exceed a maximum of twelve months
in normal circumstances it is expected that termination payments for executive directors should not exceed current salary and benefits for the 
notice period when determining termination payments in the event of early termination the committee will take into account a variety of factors 
including length of service personal and company performance the director’ s obligation to mitigate his loss statutory compensation to which 
a director may be entitled and legal fees and other payments which may be payable under a settlement agreement 
a director who has been given notice by the company for any reason other than on the grounds of injury disability redundancy or change 
of control shall only be eligible to a payment under the bonus scheme at the discretion of the committee which will take into account the 
circumstances leading to the notice
directors have no entitlement to performancerelated sharebased incentives the unvested portion of which will generally lapse following 
termination of employment however in certain circumstances such as injury disability or redundancy share options which shall be prorated 
by reference to the amount of the performance period completed and subject to performance conditions may be exercised within six months 
of termination where termination is for any other reason share options may only be exercised at the discretion of and to the extent permitted 
by the committee acting fairly and reasonably
payments to a former director
the compensation for loss of office agreed with hugo bovill the former group managing director comprised ongoing elements which the 
company is contractually obligated to continue to pay the value of these ongoing elements was accrued in the figure for compensation for 
loss of office disclosed in the 2012 annual report and financial statements
the company agreed to a fixed sum to provide future private medical insurance for mr bovill and his children the annual premiums paid by 
the company in respect of this cover will be deducted from the fixed sum until the residual amount is insufficient to cover the annual premium 
whereupon the company’s obligations will cease
additionally due to the length of mr bovill’s tenure the company agreed to a small fixed sum to provide outplacement advice which is payable 
upon invoice
external appointments
whilst neither of the executive directors currently serve as nonexecutive directors on the boards of other companies it is recognised that 
such appointments would provide an opportunity to gain broader experience outside of treatt which would benefit the group in the event that 
the directors are offered such positions and providing that they are not likely to lead to a conflict of interest or significant constraints on time 
executive directors may with the prior approval of the board accept nonexecutive appointments and retain the fees received
shareholder views
the remuneration committee has engaged proactively with the group’s major shareholders in respect of the details of this policy and 
welcomed feedback received from them the committee will also consult with major shareholders prior to any material changes to the 
remuneration policy
this remuneration policy if approved at the 2014 annual general meeting shall be effective immediately
directors’ remuneration report
continued treatt plc annual report and financial statements 2013   31
implementation report 
the following section of this report provides details of the implementation of the policy for the year ended 30 september 2013
directors’ remuneration audited
the tables below report a single figure for total remuneration for each individual executive and nonexecutive director respectively 
 
 daemmon reeve richard hope anita haines
executive directors 2013 2012 2013 2012 2013 2012
salary 201 66 142 138 121 119
taxable benefits note 1 14 4 21 21 20 20
annual bonus note 2 171 54 118 78 118 78
share options vesting in the financial year 4 3 5 3 5 3
pension 16 — 14 12 26 30
 405 127 300 252 290 250
 remuneration shown for daemmon reeve in the prior year relates only to the period of five months following his appointment to the board  in may 2012
 fees
nonexecutive directors     2013 2012
tim jones     42 18
jeff iliffe from 25 february 2013     20 —
david johnston     29 29
ian neil     29 29
peter thorburn until 25 february 2013     15 31
     135 107
 remuneration shown for tim jones in the prior year relates only to the period of seven months following his appointment to the board in february 2012
note 1 taxable benefits provided to executive directors include a car allowance fuel and private medical insurance as explained in the 
remuneration policy report with effect from 1 october 2013 car allowances and reimbursement of fuel expenses will be incorporated into 
basic salaries for all directors other than those retiring during the year
note 2 details relating to the annual bonus are as follows
the annual bonus for executive directors is calculated based upon the amount by which profit before tax and exceptional items at the 
discretion of the remuneration committee exceeds a minimum level of 10 of adjusted net assets with the actual result for the year being 
a return on adjusted net assets of 245 net assets are adjusted to exclude any movement in the pension liability which is considered to be 
outside the control of the executive directors the annual bonus is capped at a maximum of 100 of annual basic salary the annual bonus 
as a percentage of the maximum achievable was as follows
     2013 2012
daemmon reeve     85 50
richard hope     83 56
anita haines     97 66
the proportion of fixed and variable pay exclusive of pension benefits and share options is shown below for the executive directors
  basic salary annual bonus
   2013 2012 2013 2012
daemmon reeve   54 55 46 45
richard hope   55 64 45 36
anita haines    51 60 49 40 32   treatt plc annual report and financial statements 2013
performance graph
this performance graph shows treatt 
plc’s performance measured by 
total shareholder return compared 
with the performance of the ftse all 
share index also measured by total 
shareholder return which has been 
selected by the board as being the 
most appropriate measure against 
which to benchmark its performance
• treatt plc
• ftse all share
25000
20000
15000
10000
5000
000
sep 08 sep 09 sep 10 sep 11 sep 12 sep 13
 shareholder return from 30908
total shareholder return 20082013
ceo remuneration
the following table provides historical data on remuneration in respect of the directors performing the role of chief executive office for each 
of the years covered by the performance graph
 2013 2012
2
 2011 2010 2009
total remuneration £’000 405 274 447 281 307
annual bonus as  of maximum
1
 85 11
3
 104 47 30
share options vesting as  of maximum
4
 100 100 100 100 100
1 prior to 2012 there was no cap on the payment of annual bonuses to executive directors therefore the percentage of annual salary is shown by way of comparative
2 the ceo remuneration for 2012 is the combined remuneration paid to the current and previous ceo for the periods when they held that post
3 the 2012 annual bonus only related to two months of the financial year
4 all share options vested in full as they were allemployee share options which were not subject to performance conditions
the percentage change in remuneration of the director undertaking the role of ceo compared to employees as a whole was as follows
    salaries bonus
ceo    60
1
 32
2
employees
3
    45 74
1 the percentage increase in ceo salary compares the 2013 salary of the current ceo to the combined 2012 salaries of the current and previous ceo for the periods when they held 
that post
2 the percentage increase in bonus compares the 2013 bonus of the current ceo with the annualised equivalent bonus earned by the current ceo in 2012 in his capacity as ceo
3 the employees used for comparison are those uk and us employees who for the salary comparison were employed for the whole of the 2013 financial year and for bonuses for the 
whole of both the 2012 and 2013 financial years
relative importance of spend on pay
wages and salaries are the most significant overhead cost in the group the following table sets out in a manner prescribed by the 
regulations the relative importance of employee remuneration as compared to distributions to shareholders and other significant  
uses of profit the most significant of which taxation has therefore been selected
   2013 2012 movement
total remuneration
1
   10837  9852  10
dividends
2
     1585  1490  6
current tax
3
        1496      901  66
1 total remuneration includes wages salaries and pension costs as disclosed in note 6
2  dividends paid in the financial year as disclosed in note 10
3  current tax payable in respect of the financial year as disclosed in note 9
directors’ remuneration report
continued treatt plc annual report and financial statements 2013   33
directors’ interests audited
the directors who held office at 30 september 2013 had the following interests in the shares of the parent company
  unvested share unvested
 shares held options with allemployee
 outright or vested performance conditions share options
 2013 2012 2013 2012 2013 2012
executive directors      
daemmon reeve 14944 8897 15639 — 635 1088
richard hope 27 769 10971 2564 — 2650 3359
anita haines 10136 8839 — — — 1297
nonexecutive directors      
tim jones 12499 10751 — — — —
there have been no changes between 1 october 2013 and 5 december 2013 the latest date practicable to obtain the information prior to 
publication of this document other than an additional 236 shares received by richard hope under a dividend reinvestment plan
the table below shows the value of executive directors’ interests in shares as at 30 september 2013 as a percentage of their base salary
   value of
 value of shares held  interest as  of
 outright or vested base salary
1
 base salary
 2013 2012 2013 2012
2
 2013 2012
 £’000 £’000 £’000 £’000  
daemmon reeve  90  31 201 158 45 19
richard hope  167  38 142 138 118 27
anita haines  61  30 121 119 50 26
1 base salary is the average basic gross pay for the corresponding year 
2 the comparative salary for daemmon reeve is for the whole of the 2012 financial year and not from the date of his appointment to the board
share option schemes audited
the following share options were granted to executive directors during the financial year
    share price face min 
   date of at date value performance performance
 scheme basis grant of grant £’000 award end date
daemmon reeve espp 2013 1 allstaff 15 jul 13 £600 4 na na
 iso 2013 2 individual 14 dec 12 £395 62 20 30917
richard hope saye 2013 3 allstaff 15 jul 13 £600 4 na na
 aso 2013 4 individual 14 dec 12 £395 10 20 30915
1  espp employee stock purchase plan share options are offered to us employees subject to tax exempt limits at a discount of 15 of the share price at date of grant and are 
exercisable after one year
2  iso incentive stock options are granted at the share price at date of grant subject to performance conditions
3  saye save as you earn share options are offered to uk employees subject to tax exempt limits at a discount of 20 of the average share price for the three days preceding the date 
of grant and are exercisable after three years
4 aso approved share options are granted at the average share price for the three days preceding the date of grant subject to performance conditions
the performance conditions for iso and aso options are as follows
average annual growth in adjusted basic earnings per share during the period from date of grant to date of vesting the option shall vest on 
the following sliding scale 20 where average annual growth equals or exceeds 6 40 where average annual growth equals or exceeds 
7 60 where average annual growth equals or exceeds 8 80 where average annual growth equals or exceeds 9 and 100 where 
average annual growth equals or exceeds 10 34   treatt plc annual report and financial statements 2013
the share options of the directors in office during the year are as set out below
   at granted exercised expired at
 exercise exercise 1 oct  during during during 30 sep
 dates price 2012 the year the year the year 2013
daemmon reeve jul 2013 284p 1088 — 1088 — —
 jul 2014 501p — 635 — — 635
 dec 2017 – dec 2022 395p — 15639 — — 15639
   1088 16274 1088 — 16274
      
richard hope sep 2013 – feb 2014 222p 1297 — 1297 — —
 sep 2014 – feb 2015 340p 849 — — — 849
 sep 2015 – feb 2016 267p 1213 — — — 1213
 sep 2016 – feb 2017 489p — 588 — — 588
 dec 2015 – dec 2022 390p — 2564 — — 2564
   3359 3152 1297 — 5214
anita haines sep 2013 – feb 2014 222p 1297 — 1297 — —
      
the aggregate amount of gains made by the directors on the exercise of share options in the year was £14000 2012 £13000
there have been no further changes in the interests of the directors to subscribe for or acquire shares between 1 october 2013 and  
5 december 2013 the latest date practicable to obtain the information prior to publication of this document
the market price of the shares at 30 september 2013 was £6025 and the range during the financial year was £3425 to £6325 all market 
price figures are derived from the daily official list of the london stock exchange
pensions audited
certain executive directors are deferred members of the r c treatt  co limited pension  assurance scheme following its closure to future 
accruals on 31 december 2012 the plan was a noncontributory hm revenue  customs approved defined benefit occupational pension 
scheme its main features are
• a normal pension age of 65 but early r etirement may be permitted from age 55
• a pension at normal pension age of two thir ds of final pensionable salary subject to completion of 20 years’ service
• life assurance cover of four times basic annual salary
• spouse’s pension on death
pensionable salary is the member’s basic salary excluding all bonuses from 1 october 2004 pensionable salary was restricted to the lower 
of actual salary and salary as at 1 january 2004 as adjusted for the cumulative increase in inflation until retirement 
the pension entitlement of these directors is as follows
 increase in accrued transfer value
 pension during year in respect of increase accrued t otal
 excluding inflation excluding inflation pension at
 normal 2013 2012 2013 2012 2013 2012
 retirement date £ £ £ £ £ £
daemmon reeve 24 sep 2036 65 — 385 5457 20178 19680
anita haines  6 nov 2017 593 1499 8309 21637 43816 42293
the transfer values have been calculated on the basis of actuarial advice in accordance with regulation 7b2 of the occupational pension 
schemes transfer values regulations 1996 further details of the scheme are included in note 25
directors’ remuneration report
continued treatt plc annual report and financial statements 2013   35
in addition contributions to defined money purchase pension plans were made as follows
     2013 2012
     £’000 £’000
daemmon reeve     15 —
richard hope     14 12
anita haines     14 —
 following the closure of the defined benefit scheme with effect from 1 january 2013 daemmon reeve and anita haines were in receipt of contributions towards money purchase pension plans  
as shown
statement of voting
at the annual general meeting held on 25 february 2013 the vot es cast in respect of the resolution to approve the directors’ remuneration 
report were as follows
for 753 against 247 votes withheld 1510874
audit notes 
in accordance with section 421 of the companies act 2006 and the regulations where indicated certain information contained within the 
implementation section of this report has been audited the remaining sections are not subject to audit
this report was approved by the board and signed on its behalf on 6 december 2013
anita steer
secretary 36   treatt plc annual report and financial statements 2013
independent auditor’s report to the members of treatt plc
we have audited the group and parent company financial statements 
“the financial statements” on pages 38 to 73 the financial reporting 
framework that has been applied in their preparation is applicable law 
and international financial reporting standards ifrss as adopted 
by the european union and as regards the parent company financial 
statements as applied in accordance with the provisions of the 
companies act 2006 
this report is made solely to the parent 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 parent company’s members those matters we are required 
to state to them in an auditor’s report and for no other purpose to 
the fullest extent permitted by law we do not accept or assume 
responsibility to anyone other than the parent company and the 
parent 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 auditor
as more fully explained in the directors’ responsibilities statement 
set out on page 14 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 and express an 
opinion on 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
a description of the scope of an audit of financial statements is provided 
on the financial reporting council’s website at httpwwwfrcorguk
ourworkcodesstandardsauditandassurancestandardsand
guidancestandardsandguidanceforauditorsscopeofaudituk
privatesectorentityissued1december2010aspx
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 30 september 
2013 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 financial statements have been properly 
prepared in accordance with ifrss as adopted by the european 
union and as applied in accordance with the provisions of the 
companies act 2006 and
• the financial statements have been prepared in accordance with 
the requirements of the companies act 2006 and as regards the 
group financial statements article 4 of the ias regulation
opinion on other matters prescribed by the 
companies act 2006
in our opinion
• the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the companies act 
2006 
• the information given in the strategic report and the directors’ 
report for the financial year for which the financial statements are 
prepared is consistent with the financial statements and
• the information given in the corporate governance statement set 
out on pages 18 to 22 in compliance with rules 725 and 726 
in the disclosure rules and transparency rules sourcebook 
issued by the financial conduct authority information about 
internal control and risk management systems in relation to 
financial reporting processes and about share capital structures 
is consistent with the financial statements
matters on which we are req uired to report by 
exception
we have nothing to report in respect of the following
•  under the isas uk and ireland we are required to report to you if 
in our opinion information in the annual report is
• materially inconsistent with the information in the audited 
financial statements or
• apparently materially incorrect based on or materially 
inconsistent with our knowledge of the group acquired in 
the course of performing our audit or
• otherwise misleading
in particular we are required to consider whether we have identified 
any inconsistencies between our knowledge acquired during the audit 
and the directors’ statement that they consider the annual report is 
fair balanced and understandable and whether the annual report 
appropriately discloses those matters that we communicated to the 
audit committee which we consider should have been disclosed
•  under the companies act 2006 we are required to report to you if 
in our opinion
• adequate accounting records have not been kept by the 
parent company or returns adequate for our audit have not 
been received from branches not visited by us or
• the parent company financial statements and the part of 
the directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or
• certain disclosures of directors’ remuneration specified by 
law are not made or
• we have not received all the information and explanations 
we require for our audit or
• a corporate governance statement has not been prepared 
by the parent company treatt plc annual report and financial statements 2013   37
• under the listing rules we are required to review
• the directors’ statement set out on pages 11 and 12 in 
relation to going concern 
• the part of the corporate governance statement on page 
18 relating to the parent company’s compliance with the 
nine provisions of the uk corporate governance code 
specified for our review and
• certain elements of the report to shareholders by the board 
on directors’ remuneration
our assessment of risks of material misstatement
we identified the following risks as being those which had the most 
significant impact on our audit strategy and set out below how each 
of these were addressed by the scope of our audit
• the valuation of inventories and in particular the determination of 
provisions against obsolete slow moving and defective lines and 
against items where expected net realisable value is lower than 
cost
 we reconfirmed our understanding of the basis for determining 
inventory provisions and the controls over this process and 
considered whether these continued to be appropriate and 
consistently applied we tested a sample of inventory provisions 
considered their appropriateness and reviewed post year end 
transactions to consider whether there were further inventory 
lines which ought to have been provided for we also reviewed 
the outcome of prior year provisions
• the accounting for and disclosure of the claim made by the 
vendors of the earthoil subsidiaries acquired in 2008 in respect 
of the deferred consideration relating to their earnout
we reviewed the progress of the claim and considered 
the independent professional advice in connection with 
management’s assessment of the group’s liability in respect of 
the earnout and the disclosures relating to the contingent liability 
relating to this claim we reviewed the accounting treatment and 
disclosures regarding the costs incurred in defending the claim 
and reviewed post year end transactions for omitted liabilities in 
this regard we undertook specific post balance sheet enquiries 
to confirm that events to the date of signing the audit report were 
appropriately reflected and disclosed
our application of materiality
when establishing our overall audit strategy  we set certain thresholds 
which help us to determine the nature timing and extent of our audit 
procedures and to evaluate the effects of misstatements both 
individually and on the financial statements as a whole during 
planning we determined a magnitude of uncorrected misstatements 
that we judge would be material for the financial statements as a 
whole fsm during planning fsm was calculated as £400000 
which was not changed during the course of our audit
we agreed with the audit committee that we would report to them 
all unadjusted differences in excess of £10000 as well as differences 
below those thresholds that in our view warranted reporting on 
qualitative grounds
an overview of the scope of our audit 
our group audit approach focused on the parent company and 
the three key trading subsidiaries two in the uk and one in the us 
the uk entities are subject to local statutory audit completed to 
the group reporting timetable the us entity is not subject to local 
statutory audit and has been subject to full scope audit to group 
materiality the us entity audit was undertaken by the same team as 
the uk statutory audits
these audits covered 98 of group revenue 98 of group profit 
before tax and 99 of group total assets 
charles fray senior statutory auditor
for and on behalf of baker tilly uk audit llp  statutory auditor
chartered accountants
abbotsgate house
hollow road
bury st edmunds
suffolk ip32 7fa
6 december 2013 38   treatt plc annual report and financial statements 2013
group income statement
for the year ended 30 september 2013
  2013 2012
 notes £’000 £’000
revenue 4 74097 74009
   
cost of sales  56510 57319
gross profit  17 587 16690
   
administrative expenses  10649 11062
operating profit  5 6938 5628
   
loss on disposal of subsidiaries 15 60 —
finance revenue 7 85 108
finance costs 7 736 676
profit before taxation and exceptional items  6227 5060
   
exceptional items 8 1093 598
profit before taxation  5134 4462
   
taxation 9 1655 1390
profit for the period attributable to owners of the parent company  3479 3072
earnings per share   
    
basic 11 340p 300p
diluted 11 339p 299p
adjusted basic 11 432p 344p
adjusted diluted 11 430p 343p
all amounts relate to continuing operations
notes 1  29 form part of these financial statements treatt plc annual report and financial statements 2013   39
group statement of comprehensive income
for the year ended 30 september 2013
  2013 2012
 notes £’000 £’000
profit for the period attributable to owners of the parent company  3479 3072
   
other comprehensive incomeexpense   
items that may be reclassified subsequently to profit or loss
currency translation differences on foreign currency net investment  180 339
current tax on foreign currency translation differences 9 30 9
deferred tax on foreign currency translation differences 9 — 12
fair value movement on cash flow hedge 28 546 169
deferred tax on fair value movement 16 135 30
  261 481
   
items that will not be reclassified subsequently to profit or loss
actuarial loss on defined benefit pension scheme 25 1058 478
current tax credit on actuarial loss 9 72 —
deferred tax credit on actuarial loss 16 158 110
  828 368
other comprehensive expense for the period  567 849
t otal comprehensive income for the period attributable to owners of the parent company  2912 2223
notes 1  29 form part of these financial statements 40   treatt plc annual report and financial statements 2013
group and parent company statements of changes in equity
for the year ended 30 september 2013
   own 
   shares in   foreign
 share share share hedging exchange retained t otal
 capital premium trust reserve reserve earnings equity
group £’000 £’000 £’000 £’000 £’000 £’000 £’000
1 october 2011 1048 2757 485 864 974 22121 25551
profit for the period — — — — — 3072 3072
other comprehensive 
  incomeexpense
exchange differences net of tax — — — — 339 3 342
fair value movement on cash
  flow hedge net of tax — — — 169 — 30 139
actuarial gain on defined benefit 
  pension scheme net of tax — — — — — 368 368
total comprehensive income — — — 169 339 2731 2223
transactions with owners 
dividends — — — — — 1490 1490
sharebased payments — — — — — 25 25
movement in own shares in 
  share trust — — 251 — — — 251
loss on release of shares in 
  share trust — — — — — 55 55
1 october 2012 1048 2757 736 1033 635 23332 26003
profit for the period — — — — — 3479 3479
other comprehensive 
  incomeexpense
exchange differences net of tax — — — — 180 30 150
fair value movement on cash 
  flow hedge net of tax — — — 546 — 135 411
actuarial loss on defined 
  benefit pension scheme net of tax — — — — — 828 828
total comprehensive income — — — 546 180 2546 2912
transactions with owners 
dividends — — — — — 1585 1585
sharebased payments — — — — — 22 22
movement in own shares in 
  share trust — — 114 — — — 114
loss on release of shares in 
  share trust — — — — — 23 23
30 september 2013 1048 2757 622 487 455 24292 27 443
notes 1  29 form part of these financial statements treatt plc annual report and financial statements 2013   41
group and parent company statements of changes in equity
for the year ended 30 september 2013
     own 
     shares in  
   share share share retained t otal
   capital premium trust earnings equity
parent company   £’000 £’000 £’000 £’000 £’000
1 october 2011   1048 2757 485 1330 4650
profit for the period   — — — 2058 2058
total comprehensive income   — — — 2058 2058
transactions with owners
dividends   — — — 1490 1490
movement in own shares in share trust   — — 251 — 251
loss on release of shares in share trust   — — — 55 55
1 october 2012   1048 2757 736 1843 4912
profit for the period   — — — 1571 1571
total comprehensive income   — — — 1571 1571
transactions with owners
dividends   — — — 1585 1585
movement in own shares in share trust   — — 114 — 114
capital contribution to subsidiary undertakings  — — — 22 22
loss on release of shares in share trust   — — — 23 23
30 september 2013   1048 2757 622 1828 5011
notes 1  29 form part of these financial statements 42   treatt plc annual report and financial statements 2013
group and parent company balance sheets
as at 30 september 2013 registered number 1568937
 group parent company 
  2013 2012 2013 2012
 notes £’000 £’000 £’000 £’000
assets     
noncurrent assets     
goodwill 12 1075 1080 — —
other intangible assets 13 684 718 — —
property plant and equipment 14 11718 11543 — —
investment in subsidiaries 15 — — 5238 5216
deferred tax assets 16 278 286 — —
trade and other receivables 18 586 586 586 586
redeemable loan notes receivable 28 — — 1350 1350
  14341 14213 7174 7152
current assets     
inventories 17 23669 22915 — —
trade and other receivables 18 13207 13959 454 58
current tax assets  128 252 — —
derivative financial instruments 28 219 — — —
cash and cash equivalents 19 1117 927 — —
  38340 38053 454 58
t otal assets  52681 52266 7 629 7210
liabilities     
current liabilities     
borrowings 20 522 8407 1915 1566
provisions 21 49 — — —
trade and other payables 22 11292 8938 4 34
current tax liabilities  621 — — —
  12484 17345 1919 1600
net current assetsliabilities  25856 20708 1465 1542
noncurrent liabilities     
deferred tax liabilities  16 1001 880 — —
borrowings 20 8889 5469 — —
trade and other payables 22 23 23 23 23
postemployment benefits 25 1589 838 — —
derivative financial instruments 28 577 1033 — —
redeemable loan notes payable 28 675 675 675 675
  12754 8918 698 698
t otal liabilities  25238 26263 2617 2298
net assets  27 443 26003 5011 4912
equity
share capital 23 1048 1048 1048 1048
share premium account  2757 2757 2757 2757
own shares in share trust  622 736 622 736
hedging reserve  487 1033 — —
foreign exchange reserve  455 635 — —
retained earnings  24292 23332 1828 1843
t otal equity attributable to owners of the parent company   27 443 26003 5011 4912
notes 1  29 form part of these financial statements
the financial statements were approved by the board of directors and authorised for issue on 6 december 2013 and were signed on its behalf by
tim jones richard hope
chairman finance director  treatt plc annual report and financial statements 2013   43
group and parent company statement of cash flows
for the year ended 30 september 2013
 group parent company 
  2013 2012 2013 2012
 notes £’000 £’000 £’000 £’000
cash flow from operating activities     
profit before taxation  5134 4462 1560 2033
adjusted for      
  foreign exchange loss  — 258 — —
  depreciation of property plant and equipment 14 1219 1104 — —
  amortisation of intangible assets 13 181 159 — —
  loss on disposal of property plant and equipment  3 — — —
  loss on disposal of subsidiaries 15 60 — — —
  net finance costs 7 714 618 44 66
  sharebased payments  24 22 25 — —
  increase in fair value of derivatives 28 129 — — —
  decrease in postemployment benefit obligation   307 443 — —
operating cash flow before movements in working capital  6897 5667 1604 2099
movements in working capital     
  increase in inventories  789 2578 — —
  decreaseincrease in trade and other receivables  876 2104 397 173
  increasedecrease in trade and other payables and provisions  2266 497 29 156
cash generated from operations  9250 1482 1178 2116
  taxation paidreceived  649 1279 11 24
net cash from operating activities  8601 203 1189 2140
cash flow from investing activities     
  disposal of subsidiaries 15 9 — — —
  proceeds on disposal of property plant and equipment  2 — — —
  purchase of property plant and equipment 14 1433 2651 — —
  purchase of intangible assets 13 147 136 — —
  interest received 7 22 58 20 37
  1565 2729 20 37
cash flow from financing activities     
  decreaseincrease in bank loans  2223 692 — —
  amounts converted to noncurrent borrowings  — 3158 — —
  interest paid 7 736 676 64 103
  dividends paid 10 1585 1490 1585 1490
  net salepurchase of own shares by share trust  91 306 91 306
  4453 1378 1558 1899
net increasedecrease in cash and cash equivalents  2583 1148 349 278
       
cash and cash equivalents at beginning of period  1341 178 1566 1844
       
effect of foreign exchange rates  147 15 — —
cash and cash equivalents at end of period  1095 1341 1915 1566
cash and cash equivalents comprise     
cash and cash equivalents 19 1117 927 — —
bank borrowings 20 22 2268 1915 1566
  1095 1341 1915 1566
notes 1  29 form part of these financial statements 44   treatt plc annual report and financial statements 2013
group reconciliation of net cash flow to movement in net debt
for the year ended 30 september 2013
  2013 2012
  £’000 £’000
increasedecrease in cash and cash equivalents  2436 1163
decreaseincrease in bank loans  2223 692
amounts converted from current borrowings  — 3158
cash inflowoutflow from change in net debt in the period  4659 5013
   
effect of foreign exchange rates  4 58
movement in net debt in the period  4655 4955
net debt at start of the period  12949 7994
net debt at end of the period  8294 12949
notes 1  29 form part of these financial statements treatt plc annual report and financial statements 2013   45
notes to the financial statements
for the year ended 30 september 2013
1 general information
treatt plc ‘the parent company’ is a public limited company incorporated in the united kingdom and domiciled in england and wales 
the parent company’s shares are traded on the london stock exchange the address of the registered office is included within the parent 
company information section on page 87 
2 adoption of new and revised accounting standards
new and amended accounting standards
the following new standards and amendments to standards none of which have a material impact on these financial statements are mandatory 
and relevant to the group for the first time for the financial year ending 30 september 2013
• ias 1 presentation of financial statements – amendments to revise presentation of other comprehensive income – published june 2011
accounting standards in issue but not yet effective
at the date of authorisation of these financial statements the following standards and interpretations which have not been applied in these 
financial statements and which are considered potentially relevant were in issue but not yet effective
 annual improvements 20092011 – published may 2012
 ias 19  employee benefits – amendments from postemployment benefits project – published june 2011
 ias 27  separate financial statements – published may 2011
 ias 28  investments in associates and joint ventures – published may 2011
 ias 32  financial instruments presentation – offsetting of assets and liabilities – published december 2011
 ifrs 7  financial instruments disclosures – offsetting of assets and liabilities – published december 2011
 ifrs 9  financial instruments classification and measurement of assets and liabilities – published november 2009 reissued october  
 2010 reissued for deferral of effective date december 2011
 ifrs 10  consolidated financial statements – published may 2011 and amended june 2012 and october 2012
 ifrs 11  joint arrangements – published may 2011 and amended june 2012
 ifrs 12  disclosure of interests in other entities – published may 2011 and amended june 2012 and october 2012
 ifrs 13  fair value measurement – published may 2011
 eu endorsed
the directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial 
statements of the group or the parent company when the relevant standards and interpretations come into effect
3 significant accounting policies
the significant accounting policies which have been used in the preparation of these financial statements are set out below
accounting convention
the group is required to prepare its annual consolidated financial statements in accordance with international financial reporting standards 
ifrs as adopted for use by the european union the parent company has also prepared its own financial statements in accordance with 
ifrs as adopted by the european union the financial statements have also been prepared under the historical cost convention unless a fair 
value basis is required by ifrs and are in accordance with the companies act 2006 applicable for companies reporting under ifrs
of the profit for the financial year £16m 2012 £21m has been dealt with in the accounts of the parent company the parent company has 
taken advantage of the exemption under section 408 of the companies act 2006 and has not presented its own income statement in these 
financial statements
 
basis of consolidation
the group accounts consolidate the accounts of treatt plc and all of its subsidiaries entities controlled by the parent company made up to 
30 september each year control is achieved where the parent company has the power to govern the financial and operating policies of an 
investee entity so as to obtain benefits from its activities all intragroup transactions balances and unrealised gains on transactions between 
group companies are eliminated on consolidation unrealised losses are also eliminated unless the transaction provides evidence of an 
impairment of the asset transferred
going concern
the directors have at the time of approving the financial statements a reasonable expectation that the parent company and the group have 
adequate resources to continue in operational existence for the foreseeable future thus they continue to adopt the going concern basis of 
accounting in preparing the financial statements further detail is contained in the directors’ report on page 11
presentation of financial statements 
the primary statements within the financial information contained in this document have been presented in accordance with ias 1 “presentation 
of financial statements”  46   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
3 significant accounting policies continued
investments in subsidiaries
investments in subsidiaries in the parent company balance sheet are stated at cost less any provision for impairment
business combinations
the acquisition of subsidiaries is accounted for using the purchase method the cost of the acquisition is measured at the aggregate fair 
values at the date of exchange of assets given liabilities incurred or assumed and equity instruments issued by the group in exchange for 
control of the acquiree the acquiree’s identifiable assets liabilities and contingent liabilities that meet the conditions for recognition under ifrs 
3 are recognised at their fair value at the acquisition date except for noncurrent assets or disposal groups that are classified as held for sale 
in accordance with ifrs 5 “noncurrent assets held for sale and discontinued operations” which are recognised and measured at fair value 
less costs to sell
the accounting policy for goodwill is shown later in this note under intangible assets
the interest of noncontrolling shareholders in the acquiree is initially measured at the noncontrolling interest’s proportion of the net fair value 
of the assets liabilities and contingent liabilities recognised
revenue recognition
revenue represents amounts receivable net of trade discounts vat and other sales related taxes revenue is recognised in these financial 
statements when goods are physically despatched from the group andor parent company’s premises or other storage depots irrespective 
of the terms of trade
effect of changes in foreign exchange rates
transactions in currencies other than pounds sterling are recorded at the rate of exchange at the date of transaction assets and liabilities in 
foreign currencies are translated into pounds sterling in the balance sheet at the yearend rate the exchange rate of the us dollar the principal 
foreign currency was 162 2012 161 at the year end
income and expense items of the group’s overseas subsidiaries are translated into pounds sterling at the average rate for the year their 
balance sheets are translated at the rate ruling at the balance sheet date
exchange differences which arise from the translation of the opening net assets and results of foreign subsidiaries and from translating the 
income statement at an average rate are taken to reserves under ias 21 “the effects of changes in foreign exchange rates” these 
cumulative translation differences which are recognised in the statement of comprehensive income are separately accounted for within 
reserves and are transferred from equity to the income statement in the event of the disposal of a foreign operation all other exchange 
differences are taken to the income statement 
 
research and development expenditure
expenditure on research activities is recognised as an expense and charged to the income statement in the period in which it is incurred
expenditure arising from any specific development is recognised as an asset only if all of the following conditions are met
• an asset is created that can be identified
• it is probable that the asset created will generate future economic benefits and
• the development cost of the asset can be measur ed reliably
development expenditure meeting these conditions is amortised on a straight line basis over its useful life where these conditions for capitalising 
development expenditure have not been met the related expenditure is recognised as an expense in the period in which it is incurred
leases
rentals receivable under operating leases are recognised in the income statement as and when they fall due
rentals payable under operating leases where substantially all of the benefit and risks of ownership remain with the lessor are charged against 
profits on a straightline basis over the term of the lease treatt plc annual report and financial statements 2013   47
3 significant accounting policies continued
taxation
the tax expense represents the sum of the tax currently payable and deferred tax attributable to current profits 
current tax
the tax currently payable is based on taxable profit for the year taxable profit differs from net profit as reported in the income statement 
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never 
taxable or deductible the group’s liability for current tax is calculated by using tax rates that have been enacted or substantially enacted by 
the balance sheet date where the group andor parent company have a net current tax asset in one legal jurisdiction and a liability in another 
and consequently have no legal right of set off then these assets and liabilities will be shown separately on the balance sheet as required by 
ias 12 “income taxes”
current tax is charged or credited in the income statement except when it relates to items credited or charged directly to equity in which case 
the current tax is also dealt with in equity
deferred tax
deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial 
statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability 
method deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it 
is probable that taxable profits will be available against which deductible temporary differences can be utilised such assets and liabilities are 
not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition other than in a business 
combination of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit
deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in 
joint ventures except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference 
will not reverse in the foreseeable future as the group is in fact in a position to control the timing of the reversal of the temporary differences 
arising from its investments in subsidiaries it is not required to recognise a deferred tax liability in view of the variety of ways in which these 
temporary differences may reverse and the complexity of the tax laws it is not possible to accurately compute the temporary differences 
arising from such investments 
deferred tax is recognised in respect of the retained earnings of overseas subsidiaries and associates only to the extent that at the balance 
sheet date dividends have been accrued as receivable or a binding agreement to distribute past earnings in future has been entered into by 
the subsidiary or associate
deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse 
based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date 
where the group andor parent company have a net deferred tax asset in one legal jurisdiction and a liability in another and consequently have 
no legal right of set off then these assets and liabilities will be shown separately on the balance sheet as required by ias 12 “income taxes”
deferred tax is charged or credited in the income statement except when it relates to items credited or charged directly to equity in which 
case deferred tax is also dealt with in equity
post balance sheet events and dividends 
ias 10 “events after the balance sheet date” requires that final dividends proposed after the balance sheet date should not be recognised 
as a liability at that balance sheet date as the liability does not represent a present obligation as defined by ias 37 “provisions contingent 
liabilities and contingent assets” consequently final dividends are only recognised as a liability once formally approved at the annual general 
meeting and interim dividends are not recognised until paid
cash flow
the statement of cash flows explains the movement in cash and cash equivalents and short term borrowings
property plant and equipment
property plant and equipment is stated at cost less depreciation 
depreciation is provided on all property plant and equipment except freehold and long leasehold land using the straightline basis to write off 
the cost of the asset less estimated residual value as follows
• plant and machinery 410 years
• buildings 50 years 48   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
3 significant accounting policies continued
intangible assets
other intangible assets
amortisation which is included within administrative expenses is provided on all intangible assets other than goodwill using the straightline 
basis to write off the cost of the asset less estimated residual value as follows
• software licenses   4 years
• lease premium   85 years
goodwill
goodwill arising on consolidation represents the excess of the cost of the business combination over the group’s interest in the net fair value 
of the identifiable assets liabilities and contingent liabilities at the date of acquisition goodwill is initially recognised as an asset at cost and is 
subsequently measured at cost less any accumulated impairment losses goodwill which is recognised as an asset is reviewed for impairment 
at least annually in relation to the cash generating unit it represents any impairment is recognised immediately in the income statement and 
is not subsequently reversed on disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or 
loss on disposal
impairment of property plant and equipment and intangible assets
provision will be made should any impairment in the value of properties or other noncurrent assets occur
the need for any noncurrent asset impairment write down is assessed by comparison of the carrying value of the asset against the higher of 
net realisable value and value in use
inventories
inventories are stated at the lower of cost and net realisable value cost is based on raw material costs plus attributable overheads
net realisable value is based on estimated selling price less further costs expected to be incurred through to disposal provision is made for 
obsolete slowmoving and defective items
onerous contracts
provisions for onerous contracts are recognised when the expected benefits from a contract are lower than the unavoidable costs of meeting 
the contract’s obligations
financial instruments
financial assets and financial liabilities are recognised on the group andor parent company’s balance sheet when the group andor parent 
company have become a party to the contractual provisions of the instrument
financial assets
financial assets held by the group are either classified as held for trading or are accounted for as trade receivables loans other receivables and 
cash and cash equivalents at amortised cost the classification depends on the nature and purpose of the financial assets and is determined 
at the time of initial recognition
trade and other receivables
trade and other receivables are initially recognised at fair value they are subsequently measured at their amortised cost using the effective 
interest method less any provision for impairment a provision for impairment is made where there is objective evidence including customers 
with financial difficulties or in default on payments that amounts will not be recovered in accordance with original terms of the agreement a 
provision for impairment is established when the carrying value of the receivable exceeds the present value of the future cash flow discounted 
using the original effective interest rate the carrying value of the receivable is reduced through the use of an allowance account and any 
impairment loss is recognised in the income statement
loans receivable
all loans receivable are initially recognised at fair value after initial recognition interestbearing loans are measured at amortised cost less any 
impairment loss recognised to reflect irrecoverable amounts an impairment loss is recognised in profit or loss when there is objective evidence 
that the asset is impaired and is measured as the difference between the loan’s carrying amount and the present value of estimated future 
cash flows discounted at the effective interest rate computed at initial recognition impairment losses are reversed in subsequent periods when 
an increase in the loan’s recoverable amount can be related objectively to an event occurring after the impairment was recognised subject to 
the restriction that the carrying amount of the loan at the date the impairment is reversed shall not exceed what the amortised cost would have 
been had the impairment not been recognised
cash and cash equivalents
cash and cash equivalents includes cash in hand deposits held at call with banks other short term highly liquid investments with original 
maturities of three months or less bank overdrafts that are repayable on demand and form an integral part of the group’s cash management 
are included as a component of cash and cash equivalents for the purposes of the consolidated cash flow statement bank overdrafts are 
shown within borrowings in current liabilities on the balance sheet treatt plc annual report and financial statements 2013   49
3 significant accounting policies continued
financial liabilities and equity instruments
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into an equity 
instrument is any contract that evidences a residual interest in the assets of the group or parent company after deducting all of its liabilities
interestbearing loans and borrowings
all loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs after initial recognition interest
bearing loans and borrowings are measured at amortised cost using the effective interest method all borrowing costs are recognised in the 
income statement in the period in which they are incurred
trade payables
trade payables are not interestbearing and are stated at their nominal value
equity instruments
equity instruments issued by the parent company are recorded at the proceeds received net of direct issue costs
derivative financial instruments and hedge accounting
the group’s activities expose it to both the financial risks of changes in foreign currency exchange rates and interest rates from time to time 
the group uses foreign exchange forward contracts and interest rate swap contracts to hedge some of these exposures the group does 
not use derivative financial instruments for speculative purposes the use of financial derivatives is governed by the group’s policies approved 
by the board further information on currency and interest rate management is provided in note 28 “financial instruments” changes in the 
fair value of derivative financial instruments that are designated and effective as cash flow hedging instruments are recognised directly in 
equity the ineffective portion is recognised immediately in the income statement if the cash flow hedge of a firm commitment or forecasted 
transaction results in the recognition of an asset or a liability then at the time the asset or liability is recognised the associated gains or losses 
on the derivative that had been previously recognised in equity are included in the initial measurement of the asset or liability for transactions 
that do not result in the recognition of an asset or a liability amounts deferred in equity are recognised in the income statement in the same 
period in which the hedged item affects net profit or loss changes in the fair value of derivative financial instruments that do not qualify for 
hedge accounting are recognised in the income statement as they arise at the inception of the hedge relationship the entity documents the 
relationship between the hedging instrument and the hedged item along with its risk management objectives and its strategy for undertaking 
various hedge transactions furthermore at the inception of the hedge and on an ongoing basis the group documents whether the hedging 
instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item 
hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised or no longer qualifies for hedge 
accounting at that time any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted 
transaction occurs if a hedging transaction is no longer expected to occur the net cumulative gain or loss that was recognised in equity is 
recognised immediately in profit or loss for the period
 
pension costs
one of the group’s uk subsidiaries r c treatt  co limited operates a defined benefit scheme through an independently administered 
pension scheme
for defined benefit retirement plans the cost of providing benefits is determined using the projected unit credit method with actuarial valuations 
being carried out every three years and updated at each balance sheet date the postemployment benefits obligation recognised in the 
balance sheet represents the present value of the defined benefit pension obligations adjusted for unrecognised past service cost and as 
reduced by the fair value of scheme assets any asset resulting from this calculation is limited to past service costs plus the present value of 
available refunds and reductions in future contributions to the scheme
in accordance with ias 19 “employee benefits” the asset or liability in the defined benefit pension scheme is recognised as an asset or 
liability of the group under noncurrent assets or liabilities under the heading “postemployment benefits” the deferred tax in respect of “post
employment benefits” is netted against other deferred tax assets and liabilities relating to the same jurisdiction see t axation accounting policy 
and included in the deferred taxation asset or liability shown under noncurrent assets or liabilities
the service cost and expected return on assets net of interest on scheme liabilities are reflected in the income statement for the period in 
place of the actual cash contribution made all experience gains or losses on the assets and liabilities of the scheme together with the effect 
of changes in assumptions are reflected as a gain or loss in the statement of comprehensive income
the group also operates a number of defined contribution pension schemes the contributions for these schemes are charged to the income 
statement in the year in which they become payable
 
share options and the employee benefit trust
shares held by the “treatt employee benefit trust” for the purpose of fulfilling obligations in respect of various employee share plans are 
deducted from equity in the group and parent company balance sheets the treatment in the parent company balance sheet reflects the 
substance of the entity’s control of the trust 50   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
3 significant accounting policies continued
sharebased payments 
ifrs 2 “sharebased payments” requires that an expense for equity instruments granted be recognised in the financial statements based on 
their fair value at the date of grant the group has adopted the blackscholes model for the purposes of computing fair value of options under 
ifrs the fair value excludes the effect of non marketbased vesting conditions this expense which is in relation to share option schemes 
for staff in the uk and usa is recognised on a straightline basis over the vesting period of the scheme based on the group’s estimate of the 
number of equity instruments that will eventually vest 
at each balance sheet date the group revises its estimate of the number of equity instruments expected to vest as a result of the effect of 
non marketbased vesting conditions the impact of the revision of the original estimates if any is recognised in profit or loss such that the 
cumulative expense reflects the revised estimate with a corresponding adjustment to the employee share option reserve
savingsrelated share options granted to employees are treated as cancelled when employees cease to contribute to the scheme cancelled 
options are accounted for as an acceleration of vesting the unrecognised grant date fair value is recognised in profit or loss in the year that 
the options are cancelled
where the parent company grants options over its shares to employees in subsidiaries it recognises this as a capital contribution equivalent to 
the sharebased payment charge recognised in the group income statement in the financial statements of the parent company this capital 
contribution is recognised as an increase in the cost of investment in subsidiaries with the corresponding credit being recognised directly in 
equity
details of sharebased payments are disclosed in note 24 
critical accounting estimates assumptions and judgements
estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future 
events that are believed to be reasonable under the circumstances the group makes estimates and assumptions concerning the future 
the resulting accounting estimates and assumptions will by definition seldom equal the related actual results the group has evaluated the 
estimates and assumptions that have been made in relation to the carrying amounts of assets and liabilities in these financial statements 
the key accounting judgements and sources of estimation uncertainty with a significant risk of causing a material adjustment to assets and 
liabilities in the next 12 months include the following
critical accounting estimates and assumptions
pensions – movements in equity markets interest rates and life expectancy could materially affect the level of surpluses and deficits in the 
defined benefit pension scheme the key assumptions used to value pension assets and liabilities are set out in note 25 ‘pension schemes’
useful economic life and residual value estimates – the group reviews the useful economic lives and residual values attributed to assets on 
an ongoing basis to ensure they are appropriate changes in economic lives or residual values could impact the carrying value and charges 
to the income statement in future periods
provisions – using information available at the balance sheet date the directors make judgements based on experience on the level of provision 
required further information received after the balance sheet date may impact the level of provision required
sharebased payments – in accordance with ifrs 2 “sharebased payments” share options and other share awards are measured at fair 
value at the date of grant the fair value determined is then expensed in the income statement on a straight line basis over the vesting period 
with a corresponding increase in equity the fair value of the options is measured using the blackscholes option pricing model the valuation 
of these sharebased payments requires several judgements to be made in respect of the number of options that are expected to be exercised 
details of the assumptions made in respect of each of the sharebased payment schemes are disclosed in note 24 ‘sharebased payments’ 
changes in these assumptions could lead to changes in the income statement expense in future periods
goodwill – determining whether goodwill is impaired requires an estimation of the value in use of the cashgenerating units to which goodwill 
has been allocated the value in use calculation requires the group to estimate the future cash flows expected to arise from the cash
generating unit and a suitable discount rate in order to calculate present value goodwill can also include an estimate of deferred consideration 
payable using assumptions which are consistent with those used to determine the carrying value of goodwill future changes in performance 
or disposals could also impact the value of goodwill details of the assumptions made in respect of goodwill and deferred consideration are 
disclosed in note 12 these estimates could change materially in future years in line with actual and expected future performance 
taxation – the group operates in a number of tax jurisdictions and estimation is required of taxable profit in order to determine the group’s 
current tax liability there are transactions and calculations for which the ultimate tax determination can be uncertain the group periodically 
evaluates situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate based on 
amounts expected to be paid to the tax authorities
critical accounting judgements
deferred tax assets  deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be 
available against which the losses can be utilised management judgement is required to determine the amount of deferred tax assets that can 
be recognised based upon the likely timing and level of future taxable profits together with future tax planning strategies treatt plc annual report and financial statements 2013   51
3 significant accounting policies continued
description of the nature and purpose of each reserve within equity
share premium account  the share premium account represents amounts received in excess of the nominal value of shares on issue of new 
shares
own shares in share trust  own shares in share trust relate to shares held in the treatt employee benefit trust the ‘ebt’ the shares held in 
the ebt are all held to meet options to be exercised by employees the number of shares held by the ebt together with the net acquisition 
costs are shown in the statement of changes in equity dividends on these shares have been waived except for 0001p per share the market 
value of the shares held by the ebt at 30 september 2013 was £1304000 2012 £884000
hedging reserve  the hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging 
instruments related to hedged transactions that have not yet occurred
foreign exchange reserve  the foreign exchange reserve records exchange differences arising from the translation of the financial statements 
of overseas subsidiaries
retained earnings  retained earnings comprises the group’s annual profits and losses actuarial gains and losses on the defined benefit 
pension scheme and dividend payments combined with the employee share option reserve which represents the equity component of share 
based payment arrangements
4 segmental information
group
business segments
ifrs 8 requires operating segments to be identified on the basis of internal financial information reported to the chief operating decision 
maker codm the group’s codm has been identified as the board of directors who are primarily responsible for the allocation of resources 
to the segments and for assessing their performance the disclosure in the group accounts of segmental information is consistent with the 
information used by the codm in order to assess profit performance from the group’s operations 
during the year following the implementation of a new strategy by the board the group now operates as one global business segment 
the group is engaged in the manufacture and supply of ingredient solutions for the flavour fragrance and consumer goods markets with 
manufacturing sites in the uk us and kenya many of the group’ s activities including sales manufacturing technical it and finance are now 
being managed globally on a group basis
geographical segments
the following table provides an analysis of the group’s revenue by geographical market irrespective of the origin of the goods or services
 2013 2012
revenue by destination £’000 £’000
united kingdom  10016  9764
rest of europe  19837  17830
the americas  26661  28792
rest of the world  17 583  17623
 74097 74009
  
all group revenue is in respect of the sale of goods other than property rental income of £16000 2012 £16000 no customer represented 
more than 10 of group revenue
noncurrent assets by geographical location excluding deferred tax assets were as follows
 2013 2012
 £’000 £’000
united kingdom  7 622 7749
united states  6139  5869
rest of the world 302  309
 14063 13927 52   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
5 operating profit is stated after chargingcrediting
 2013 2012
group £’000 £’000
depreciation of property plant  equipment 1219 1104
amortisation of intangible assets included in administrative expenses 181 159
loss on disposal of property plant  equipment 3 —
research and development costs 657 512
operating leases  
  – plant  machinery 17 32
  – land  buildings 75 49
net exchange gain on trading activities 56 258
rent receivable 16 16
cost of inventories recognised as expense 46548 48337
shipping costs 1569 1677
it  telephony costs 565 540
insurance costs 457 444
energy  utility costs 543 501
the analysis of auditor’s remuneration is as follows  
fees payable to the parent company’s auditors and their associates for the audit of
  – the parent company and group accounts 28 27
  – the group’s subsidiaries pursuant to legislation 57 55
t otal audit fees 85 82
    
fees payable to the parent company’s auditors and their associates for other services  
  to the group
  – tax compliance services 11 12
  – tax advisory services — 1
  – corporate finance services included in exceptional items 34 —
  – overunder accrual from prior years and disbursements 4 5
t otal nonaudit fees  41 18
6 employees
group
number of employees
during the year the average number of staff employed by the group including directors was as follows
 2013 2012
 number number
technical and production 182 151
administration and sales 122 134
 304 285
  
employment costs  
the followings costs were incurred in respect of the above
 2013 2012
 £’000 £’000
wages and salaries 10127 9223
social security costs 992 877
pension costs see note 25 710 629
sharebased payments see note 24 22 25
 11851 10754
directors 
the information on directors’ emoluments and share options set out on pages 31 to 35 form part of these financial statements treatt plc annual report and financial statements 2013   53
7  net finance costs
  2013 2012
group  £’000 £’000
finance revenue  – bank interest received 22        58
 – pension finance income see note 25 63 50
  85 108
finance costs     – bank overdraft interest paid 555  517
 – other bank finance costs  56 46
 – loan interest paid 115 103
 – loan note interest paid 10 10
  736 676
 
8 exceptional items
the exceptional item referred to in the income statement can be categorised as follows
 2013 2012
group £’000 £’000
compensation for loss of office — 598
legal and professional fees 634 —
corporate finance advisory and other costs 459 —
 1093 598
   
the exceptional items in the year all relate to nonrecurring items the legal and professional fees relate to the earthoil earnout contract dispute 
the corporate finance advisory and other costs relate to advice taken to support the group in discussions with the bovill family shareholders 
and related matters
9 taxation
 2013 2012
group £’000 £’000
analysis of tax charge in income statement  
current tax  
uk corporation tax on profits for the period 953 206
adjustments to uk tax in respect of previous periods 7 12
overseas corporation tax on profits for the period 581 700
adjustments to overseas tax in respect of previous periods 45 7
total current tax 1496 901
deferred tax  
origination and reversal of temporary differences 163 533
effect of reduced tax rate on opening assets and liabilities 3 —
adjustments in respect of previous periods 1 44
total deferred tax see note 16 159 489
tax on profit on ordinary activities 1655 1390
analysis of tax creditcharge in other comprehensive income
current tax  
foreign currency translation differences 30 9
actuarial loss on defined benefit pension scheme 72 —
deferred tax  
foreign currency translation differences — 12
cash flow hedges 135 30
actuarial loss on defined benefit pension scheme 158 110
total tax credit recognised in other comprehensive income 125 137 54   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
9 taxation continued
factors affecting tax charge for the year  
the tax assessed for the year is different from that calculated at the standard rate of corporation tax in the uk of 235 2012 25   
the differences are explained below
 2013 2012
 £’000 £’000
profit before tax multiplied by standard rate of uk corporation tax at 235 2012 25 1206 1116
  
effects of  
expenses not deductible in determining taxable profit and other items 300 92
difference in tax rates on overseas earnings 188 231
adjustments to tax charge in respect of prior years 39 49
t otal tax charge for the year 1655 1390
  
the main rate of uk corporation tax was reduced from 24 to 23 with effect from 1 april 2013 the group’s effective uk corporation tax  
rate for the year was therefore 235 2012 25 the adjustments in respect of prior years relate to the finalisation of previous year’s tax 
computations
in march 2013 the uk government published the finance bill 2013 that included proposals to reduce further the main rate of uk corporation 
tax to 21 with effect from 1 april 2014 and to 20 with effect from 1 april 2015 the finance bill 2013 was substantively enacted in 2 july 
2013 the reduction to 21 has been reflected in these financial statements and the further reduction to 20 will affect the group’s tax 
expense for the 2014 financial year onwards
10 dividends
 dividend per share for years
 ended 30 september
 2013
2
 2012
1
 2011
1
 2013 2012
parent company and group pence pence pence £’000 £’000
equity dividends on ordinary shares     
interim dividend 55p 51p 48p 521 493
final dividend 130p 104p 97p 1064 997
 185p 155p 145p 1585 1490
1 accounted for in the subsequent year in accordance with ifrs
2 the declared interim dividend for the year ended 30 september 2013 of 55 pence was approved by the board on 9 may 2013 and was paid on 18 october 2013 accordingly it has 
not been included as a deduction from equity at 30 september 2013 the proposed final dividend for the year ended 30 september 2013 of 130 pence will be voted on at the annual 
general meeting on 24 february 2014 both dividends will therefore be accounted for in the financial statements for the year ended 30 september 2014
11 earnings per share
basic earnings per share
basic earnings per share is based on the weighted average number of ordinary shares in issue and ranking for dividend during the year the 
weighted average number of shares excludes shares held by the ebt
 2013 2012
earnings £’000 3479 3072
weighted average number of ordinary shares in issue no ‘000 10228 10227
basic earnings per share pence 340p 300p treatt plc annual report and financial statements 2013   55
11 earnings per share continued
diluted earnings per share
diluted earnings per share is based on the weighted average number of ordinary shares in issue and ranking for dividend during the year 
adjusted for the effect of all dilutive potential ordinary shares
the number of shares used to calculate earnings per share eps have been derived as follows
 2013 2012
 no ’000 no ’000
weighted average number of shares 10481 10481
weighted average number of shares held in the ebt 253 254
weighted average number of shares used for calculating basic eps 10228 10227
  
executive share option schemes 2 —
savingsrelated share options 45 36
  
weighted average number of shares used for calculating diluted eps 10275 10263
diluted earnings per share pence 339p 299p
adjusted earnings per share
adjusted earnings per share measures are calculated based on profits for the year attributable to owners of the parent company before 
exceptional items as follows
 2013 2012
 £’000 £’000
earnings for calculating basic and diluted earnings per share 3479 3072
adjusted for
exceptional items see note 8 1093 598
taxation thereon 155 150
earnings for calculating adjusted earnings per share 4417 3520
adjusted basic earnings per share pence 432p 344p
adjusted diluted earnings per share pence 430p 343p
12 goodwill 
 goodwill
group £’000
cost  
1 october 2011 3624
decrease in estimated deferred consideration 112
1 october 2012 3512
disposal of cash generating unit 5
30 september 2013 3507
accumulated impairment losses  
1 october 2011 2432
1 october 2012 2432
30 september 2013 2432
carrying amount  
30 september 2013 1075
30 september 2012 1080 56   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
12 goodwill continued
in march 2007 the parent company acquired 50 of earthoil plantations limited and earthoil kenya epz pty limited collectively known as 
‘earthoil’ and in the financial year ending 30 september 2008 the remaining 50 of earthoil was acquired the consideration for the second 
50 is entirely based upon an earnout formula in relation to the profits of earthoil in the calendar years 2010 and 2011 deferred consideration 
of £23000 2012 £23000 has been included in goodwill in relation to the earnout notice which has been issued but not yet settled as it is the 
subject of an ongoing dispute see note 27 
the goodwill arising on the acquisition of earthoil is attributable to the anticipated profitability of earthoil’s products in new and rapidly growing 
existing markets and the anticipated future operating synergies from the combination
 
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired the recoverable 
amount of goodwill arising on the acquisition of earthoil is determined from value in use calculations the key assumptions for the value in 
use calculations are those regarding the discount rates revenue overhead growth rates and perpetuity growth rate management estimates 
discount rates using pretax rates that reflect market assessments of the time value of money and the risks specific to earthoil as at the year 
ended 30 september 2013 the impairment review has concluded that the value in use of earthoil now significantly exceeds its carrying value 
in performing this impairment review the group has prepared cash flow forecasts derived from the most recent financial budgets approved by 
the board and then estimates revenue growth for the following four years at 625 2012 625 per annum with overheads assumed to 
increase at 5 2012 5 per annum thereafter a growth rate for pretax profit of 2 2012 2 per annum is assumed into perpetuity a 
rate of 125 2012 125 has been used to discount the forecast cash flows the key assumptions are based on past experience adjusted 
for expected changes in future conditions
based upon this impairment review the recoverable amount of earthoil exceeds its carrying amount by £102m 2012 £60m the recoverable 
amount is most sensitive to changes in the discount rate and sales growth a 1 change in the discount rate would affect the recoverable 
amount by £1m and a 1 change in sales growth would also change the recoverable amount by £1m
13 other intangible assets
 lease software
 premium licences t otal
group £’000 £’000 £’000
cost     
1 october 2011 343 629 972 
exchange adjustment — 1 1 
additions — 136 136 
1 october 2012 343 764 1107 
additions — 147 147 
disposals — 73 73 
30 september 2013 343 838 1181 
amortisation     
1 october 2011 5 225 230 
charge for period 4 155 159 
1 october 2012 9 380 389 
charge for period 4 177 181 
disposals — 73 73 
30 september 2013 13 484 497 
net book value   
30 september 2013 330 354 684 
30 september 2012 334 384 718 
intangible assets with a net book value of £4000 2012 £2000 have been pledged as security in relation to the industrial development loan 
detailed in note 20 treatt plc annual report and financial statements 2013   57
14 property  plant and equipment
 land  plant 
 buildings machinery t otal
group £’000 £’000 £’000
cost     
1 october 2011 6379 8989 15368
exchange adjustment 120 118 238
additions — 2651 2651
disposals — 10 10
1 october 2012 6259 11512 17771
exchange adjustment 10 50 60
additions 12 1421 1433
disposals — 443 443
disposal of subsidiary — 7 7
30 september 2013 6261 12433 18694
depreciation     
1 october 2011 710 4538 5248
exchange adjustment 23 91 114
charge for period 139 965 1104
disposals — 10 10
1 october 2012 826 5402 6228
exchange adjustment 4 26 30
charge for period 136 1083 1219
disposals — 439 439
disposal of subsidiary — 2 2
30 september 2013 958 6018 6976
net book value
30 september 2013 5303 6415 11718
30 september 2012 5433 6110 11543
 
analysis of land  buildings
  2013 2012
net book value  £’000 £’000
freehold  4548 4662
long leasehold  755 771
  5303 5433
included in plant and machinery are assets in the course of construction totalling £516000 2012 £354000
property plant and equipment with a net book value of £58m 2012 £55m has been pledged as security in relation to the industrial 
development loan and equipment financing loan detailed in note 20
  2013 2012
capital commitments  £’000 £’000
contracted but not provided for    134 304 58   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
15 investments in subsidiaries
 t otal
parent company £’000
cost 
1 october 2011 5328
decrease in estimated deferred consideration 112
1 october 2012 5216
capital contribution to subsidiaries 22
30 september 2013 5238
  2013 2012
parent company  £’000 £’000
subsidiary  
r c treatt  co limited – at cost
50000 ordinary shares of £1 each fully paid  2318 2299
  
treatt usa inc – at cost
2975000 common stock of us1 each fully paid  1845 1842
  
earthoil plantations limited
4051000 ordinary shares of 50p each fully paid  923 923
  
earthoil kenya pty limited
2500 ‘a’ ordinary shares of kes20 each fully paid
2500 ‘b’ ordinary shares of kes20 each fully paid  152 152
  5238 5216
subsidiary country holding principal activity
r c treatt  co limited england 100 supply of flavour and fragrance ingredients
treatt usa inc usa 100 supply of flavour and fragrance ingredients
earthoil plantations limited  england 100 supply of natural cosmetic ingredients
earthoil kenya epz pty limited  kenya 100 supply of organic  fair trade vegetable oils
earthoil extracts limited kenya 100 supply of organic  fair trade essential oils
group
the loss on disposal of subsidiaries relates to earthoil india private limited that ceased to trade as at 31 december 2012 and resulted in a loss 
of £60000 due to the immaterial amounts involved no further disclosures have been made treatt plc annual report and financial statements 2013   59
16 deferred taxation
  2013 2012
group  £’000 £’000
uk deferred tax asset  278 286
overseas deferred tax liability  1001 880
net deferred tax liability  723 594
a reconciliation of the net deferred liability is shown below
 uk deferred tax overseas deferred tax t otal
 post   other  other
 employment fixed cash flow temporary fixed temporary
 benefits assets hedge differences assets differences 
group £’000 £’000 £’000 £’000 £’000 £’000 £’000
1 october 2011 193 260 207 131 631 99 261
exchange differences — — — — 32 4 28
chargecredit to income 
  statement 111 65 1 68 401 25 489
chargecredit to equity 110 — 30 12 — — 128
1 october 2012 192 195 238 51 1000 120 594
exchange differences — — — — 7 — 7
chargecredit to income 
  statement 17 29 27 16 111 17 159
creditcharge to other 
  comprehensive income 158 — 135 — — — 23
30 september 2013 333 166 76 35 1104 103 723
at the balance sheet date earthoil plantations limited had unused tax losses of £nil 2012 £224000 available for offset against its future 
profits and r c treatt  co limited had a deferred tax asset in relation to its pension liability r c treatt  co limited has a specific plan in place 
to reverse the deficit and so this deferred tax asset has also been recognised
the deferred tax rate applied to uk companies within the group is 21 2012 23 as legislation has been substantively enacted which 
reduces the main rate of uk corporation tax from 23 for the 201314 tax year to 21 in 201415 a further reduction to 20 for the 201516 
tax year has also been substantively enacted and will be reflected in the 2014 financial statements
17  inventories
  2013 2012
group  £’000 £’000
raw materials  11736 11887
work in progress and intermediate products  8135 5631
finished goods  3798 5397
  23669 22915
inventory with a carrying value of £81m 2012 £82m has been pledged as security in relation to the industrial development loan detailed  
in note 20 60   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
18 trade and other receivables
 group parent company 
  2013 2012 2013 2012
current £’000 £’000 £’000 £’000
trade receivables 11448 12368 — —
amounts owed by subsidiaries — — 454 45
other receivables 931 851 — 13
prepayments 828 740 — —
 13207 13959 454 58
 group parent company 
  2013 2012 2013 2012
noncurrent £’000 £’000 £’000 £’000
other receivables 586 586 586  586 
     
the group’s credit risk is primarily attributable to its trade receivables before accepting any new customer the group uses a range of 
information including credit reports industry data and other publicly or privately available information in order to assess the potential customer’ s 
credit quality and defines credit limits by customer and where appropriate will only accept orders on the basis of cash in advance or if secured 
through a bank letter of credit processes are in place to manage trade receivables and overdue debt and to ensure that appropriate action is 
taken to resolve issues on a timely basis credit control operating procedures are in place to review all new customers existing customers are 
reviewed as management become aware of any specific changes in circumstances the average credit period taken for trade receivables is 59 
days 2012 57 days an impairment review has been undertaken at the balance sheet date to assess whether the carrying amount of financial 
assets is deemed recoverable the primary credit risk relates to customers which have amounts due outside of their credit period a provision 
for impairment is made when there is objective evidence of impairment which is usually indicated by a delay in the expected cash flows or 
nonpayment from customers the amounts presented in the balance sheet are net of amounts that are individually determined to be impaired 
of £02m 2012 £01m estimated by the group’s management based on prior experience and their assessment of the current economic 
environment the group’s top five customers represent 25 2012 23 of the group’s turnover these customers have favourable credit 
ratings and consequently reduce the credit risk of the group’s overall trade receivables the directors consider that the carrying amount of 
trade and other receivables approximates to their fair value the group holds no collateral against these receivables at the balance sheet date 
 
the ageing profile of trade receivables which are past their due date but not impaired is as follows
 number of days past the due date
  130 3160 over 60
group  £’000 £’000 £’000
2013  1842 489 187
 
2012  1471 780 285
the ageing profile of impaired trade receivables is as follows
 number of days past the due date
 current 130 3160 over 60
group £’000 £’000 £’000 £’000
2013 95 17 1 51
2012 35 6 4 104
   treatt plc annual report and financial statements 2013   61
18 trade and other receivables continued
at 30 september 2013 £32m 2012 £31m of trade receivables were denominated in sterling £69m 2012 £8m in us dollars and £15m 
2012 £12m in euros the currency risk in respect of trade receivables is managed in conjunction with the other currency risks faced by the 
group as part of its overall hedging strategy for further details see note 28 and the financial review on pages 69 to 72
trade receivables with a carrying value of £26m 2012 £28m have been pledged as security in relation to the industrial development loan 
detailed in note 20
there is no credit risk associated with noncurrent other receivables of £06m 2012 £06m as these amounts are contractually fully recoverable 
against loan notes payable of £07m 2012 £07m when they fall due and are recoverable at an earlier date if deferred consideration in respect 
of earthoil becomes payable 
19 cash and cash equivalents
group
cash and cash equivalents of £1117000 2012 £927000 comprise cash held by the group and short term deposits with an original maturity 
of one month or less the carrying amount of these assets approximates to their fair value
a detailed analysis of cash balances by currency is shown in note 28 all material cash balances are held with the group’s main banks being 
lloyds banking group hsbc and bank of america the credit ratings of these banks are considered to be satisfactory
20 borrowings
 group parent company 
  2013 2012 2013 2012
current £’000 £’000 £’000 £’000
us term loans 500 566 —  — 
uk revolving credit facilities — 5573 — —
bank borrowings 22 2268 1915 1566
 522 8407 1915 1566
 group 
  2013 2012
noncurrent £’000 £’000
us term loans 2096 2311
uk revolving credit facilities 6793 3158
 8889 5469
us loans and borrowings
us term loans include an industrial development loan of £1279000 2012 £1440000 and equipment financing loans of £1317000 2012 
£1438000 
the industrial development loan is repayable by fixed quarterly instalments over 20 years ending on 1 july 2021 the rate of interest payable 
has been fixed at 366 for ten years ending on 1 july 2021 by way of an interest rate swap which covers the full term of the loan the fair 
value of this interest rate swap at the yearend was £135000 2012 £196000 based on yea end exchange rates the fair value of this swap 
is not included on the balance sheet or through the income statement as the amount involved is not material similarly the directors do not 
apply hedge accounting in respect of us borrowings due to the lack of materiality of the items involved 
the equipment financing loans of £1026000 2012 £1296000 and £291000 2012 £142000 are repayable by fixed monthly instalments 
over five years ending on 30 march and 31 december 2017 with fixed interest rates of 436 and 289 respectively
the us dollar overdraft facility ‘line of credit’ of 4 million is a four year facility expiring in 2017 the us term loans and line of credit both held 
by treatt usa inc are secured by a fixed and floating charge over treatt usa’s current and noncurrent assets 62   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
20 borrowings continued
other borrowings
the group’s uk overdraft facilities are unsecured uk borrowings of 9m are held on a three year revolving credit facility rcf which expires 
in 2016 and £12m on a three year rcf expiring in 2015 the rate of interest on 9m of uk revolving credit facilities has been fixed for ten 
years at a rate of 568 through an interest rate swap hedge accounting has been applied to the fair value of this swap details of which are 
provided in note 28
borrowings are repayable as follows
  2013 2012
  £’000 £’000
– in one year or less  522 8407
– in more than one year but not more than two years  1749 436
– in more than two years but not more than five years  6647 4383
– in more than five years  493 650
  9411 13876
further information on group borrowing facilities is given in notes 27 and 28 including a detailed analysis of cash balances by currency
borrowing facilities
at 30 september 2013 the group had total borrowing facilities of £199m 2012 £201m of which £60m 2012 £116m expire in one year 
or less and £116m 2012 £72m were undrawn
  
21 provisions
  2013 2012
group  £’000 £’000
onerous contract provision  
at start of year  — 79
utilised in year  — 79
additional provision in year  49 —
balance at end of year  49 —
onerous contract provisions relate to losses which are or were expected to materialise in the following twelve months on fixed price contracts 
as a result of significant increases in certain raw material prices
22 trade and other payables
 group parent company 
  2013 2012 2013 2012
current £’000 £’000 £’000 £’000
trade payables 7 434 5275 —  — 
amounts owed to subsidiaries — — — 27
other taxes and social security costs 415 580 4 3
accruals 3443 3083 — 4
 11292 8938 4 34
 group parent company 
  2013 2012 2013 2012
noncurrent £’000 £’000 £’000 £’000
other creditors and accruals 23 23 23 23 treatt plc annual report and financial statements 2013   63
22 trade and other payables continued
trade payables principally comprise amounts for trade purchases and ongoing costs the directors consider that the carrying amount of trade 
and other payables approximates to their fair values
at 30 september 2013 £22m 2012 £12m of trade payables were denominated in sterling £41m 2012 £25m in us dollars and £09m 
2012 £05m in euros the currency risk in respect of trade payables is managed in conjunction with the other currency risks faced by the 
group as part of its overall hedging strategy for further details see note 28 and the financial review on pages 69 to 72
noncurrent other creditors and accruals relates to the deferred consideration payable to the vendors in relation to the acquisition of earthoil 
see note 12 for further information 
23 share capital
 
parent company and group 2013 2013 2012 2012 
called up allotted and fully paid £’000 number £’000 number
at start and end of period 1048 10481034 1048  10481034 
     
the parent company has one class of ordinary shares with a nominal value of 10p each which carry no right to fixed income
24 sharebased payments
group
the group has applied the requirements of ifrs2 “sharebased payments” 
the group operates executive share option schemes for directors and senior management within the group in addition to issuing uk and us 
approved savingsrelated share options for employees of certain subsidiaries options are granted with a fixed exercise price and will lapse 
when an employee leaves the group subject to certain ‘good leaver’ provisions
under the schemes listed below options have been granted to subscribe for the following number of existing ordinary shares of 10p each in the 
capital of the parent company all share options are expected to be settled via the transfer of shares out of the “treatt employee benefit trust”
the options outstanding at 30 september 2013 for which a sharebased payment charge of £22000 2012 £25000 has been made are as 
follows
 number number exercise
 of shares exercised price per
 outstanding in year share date option exercisable
uk executive options 2012 2564 — 3900p dec 2015 – dec 2022
us executive options 2012 19548 — 3950p dec 2015 – dec 2022
uk saye
1
 scheme 2011  22170 — 3400p sep 2014  mar 2015
uk saye scheme 2012 40178 — 2670p sep 2015  mar 2016
uk saye scheme 2013 25652 — 4890p sep 2016  mar 2017
us espp
2
 scheme 2013 4409 — 5010p july 2014
1 save as you earn 
2 employee stock purchase plan 64   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
24 sharebased payments continued
the fair value per option granted using the “blackscholes” model and the assumptions used in the sharebased payments calculations are 
as follows
     uk exec us exec us espp
  saye 2011 saye 2012 saye 2013 2012 2012 2013
share price at date of grant  4225p 3165p 6175p 3900p 3900p 6175p
contractual life  35 years 35 years 35 years 10 years 10 years 1 year
expected life  3 years 3 years 3 years 3 years 5 years 1 year
expected volatility  218 211 236 211 217 268
riskfree interest rate  183 057 130 084 084 130
dividend yield  32 47 26 40 40 26
expected cancellations  150 100 100 00 00 100
expected forfeitures  150 100 100 250 250 100
fair value per option at date of grant  765p 406p 1318p 412p 422p 1142p
expected volatility was determined by calculating the historical volatility of the group’ s share price over a period equivalent to the vesting period 
of the respective options prior to their date of grant
the riskfree interest rate was based on the simple average of the historical daily gilt yields quoted for five year benchmark gilts during the 
month in which a grant of options is made
details of movements in share options during the year were as follows
  2013  2012
  weighted  weighted
  average  average
 no of exercise no of exercise 
 options price options price
outstanding at start of period 111671 £269 120283 £237
granted during the period 52173 £450 52139 £269
forfeited during the period 7 722 £278 3038 £309
exercised during the period 39797 £230 46531 £170
expired during the period — — 7716 £364
cancelled during the period 1804 £303 3466 £250
outstanding at end of period 114521 £364 111671 £269
exercisable at end of period — — — —
forfeiture arises when the employee is no longer entitled to participate in the savingsrelated share option scheme as a consequence of leaving 
the group whereas cancellation arises when a participant voluntarily chooses to cease their membership of a scheme within the vesting period 
the options outstanding had a weighted average remaining contractual period of 37 years 2012 24 years the weighted average actual 
market share price on date of exercise for share options exercised during the year was 6284 pence 2012 3425 pence and the weighted 
average fair value of options granted during the year was 923 pence 2012 397 pence treatt plc annual report and financial statements 2013   65
25 pension schemes
group
the group operates a whollyfunded defined benefit pension scheme for certain uk employees the scheme’s assets are held separately 
from the assets of the group and are administered by trustees and managed professionally from 1 october 2001 this scheme was closed to 
new entrants pensionable salary for the remaining members of the scheme is based upon the lower of their actual salary upon retirement or 
leaving the group and their 2003 salary as increased by inflation following consultation with members they agreed that the scheme will not 
be subject to any further accruals after 31 december 2012 and instead members of the final salary pension scheme were offered membership 
of a defined contribution pension plan with effect from 1 january 2013
defined contribution schemes are operated on behalf of eligible employees the assets of which are held separately from those of the group 
in independently administered funds
the pension charge for the year principally represents contributions payable to the defined contribution schemes together with the current 
service cost for the year until 31 december 2012 as explained above in relation to the defined benefit pension scheme amounting to
  2013 2012
  £’000 £’000
defined benefit scheme – current service cost  112 481
defined contribution schemes  574 312
curtailment gain  — 188
other pension costs  24 24
  710 629
the group accounts for pensions in accordance with ias 19 “employee benefits” details of which are as follows
the valuation used for ias 19 disclosures in respect of the defined benefit pension scheme “the scheme” has been based on the most 
recent actuarial valuation at 1 january 2012 carried out by barnett waddingham and updated by mrs l lawson a fellow of the institute and 
faculty of actuaries to take account of the requirements of ias 19 in order to assess the liabilities of the scheme at 30 september 2013 
scheme assets are stated at their market value as at that date
the financial assumptions used to calculate scheme liabilities and assets under ias 19 are
 2013 2012
discount rate 465 460
expected return on scheme assets 617 523
rate of increase in salaries na na
rate of increase in pensions in payment – cpi max 5 235 160
rate of increase in pensions in payment – cpi max 3 220 155
rate of increase in pensions in payment – cpi max 25 200 150
rate of inflation cpi 235 160
rate of inflation rpi 335 260
mortality table 100 of s1pxa table with  100 of s1pxa table with
 cmi2011 projections with a  cmi2011 projections with a
 long term average rate of  long term average rate of
 improvement of 1 pa improvement of 1 pa 
life expectancy for male aged 65 now 221 220
life expectancy for male aged 65 in 10 years’ time 227 226
commutation allowance 20 20 66   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
25 pension schemes continued
the expected return on individual classes of pension scheme assets are determined by reference to external indices and after taking advice 
from external advisers the overall expected rate of return shown above is the weighted average of the returns allowing for anticipated balances 
held in each asset class according to the scheme’s investment strategy the group expects to make ongoing contributions of approximately 
£297000 to its defined benefit pension scheme in 2014 2013 £389000
 2013 2012
 £’000 £’000
scheme assets  
equities 8653 9011
target return funds 5213 —
bonds 3256 5560
other 49 1027
fair value of scheme assets 17 171 15598
    
present value of funded obligations scheme liabilities 18760  16436
deficit in the scheme recognised in the balance sheet 1589 838
related deferred tax 333 192
net pension liability 1256              646
changes in scheme liabilities    
balance at start of period 16436 14477
current service cost 112 481
interest cost 747 788
curtailment — 188
benefits paid 560 612
actuarial loss 2025 1490
balance at end of period 18760 16436
changes in scheme assets    
balance at start of period 15598 13674
expected return on scheme assets 810 838
employer contributions 356 686
benefits paid 560 612
actuarial gain 967 1012
balance at end of period 17 171 15598 treatt plc annual report and financial statements 2013   67
25 pension schemes continued
 2013 2012
 £’000 £’000
amount charged to operating profit  
current service cost excluding employee contributions 112 481
curtailment — 188
t otal operating charge 112 293
amount credited to finance revenue
expected return on assets 810 838
interest on scheme liabilities 747 788
net finance revenue 63 50
net expense recognised in income statement 49 243
amount recognised in statement of comprehensive income
actual less expected return on assets 967 1012
experience gains on liabilities — 41
effect of change in assumptions on liabilities            2025 1531
t otal loss recognised in statement of comprehensive income 1058 478
actual return on scheme assets 1777 1850
statement of comprehensive income  
actuarial gain from assets 967 1012
actuarial loss from liabilities 2025 1490
actuarial loss recognised in statement of comprehensive income 1058 478
cumulative actuarial loss recognised in statement of comprehensive income 2343 1285
movement in balance sheet net liability during the period 
net liability at start of period 838 803
current service cost 112 481
curtailment — 188
cash contribution 356 686
other finance income 63                  50
actuarial loss 1058 478
net liability at end of period 1589 838
history of scheme assets liabilities experience gains and losses 
 
 2013 2012 2011 2010 2009
 £’000 £’000 £’000 £’000 £’000
scheme assets 17 171 15598 13674 13737 12427
scheme liabilities 18760 16436 14477 15333 14427
net liability 1589 838 803 1596 2000
difference between expected and actual returns 
  on scheme assets 967 1012 1099 151 544
     
experience gainslosses on scheme liabilities — 41 20 110 190
     
total actuarial lossgain 1058 478 599 172 1821 68   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
25 pension schemes continued
approximate effect of change of assumptions on liability values at 30 september 2013
change increases liability by
  £’000
reduce discount rate by 025 pa 880
increase inflation and all related assumptions by 01 pa 255
increase life expectancy by one year 540
26 commitments under operating leases
the group as lessee
as at 30 september 2013 the group had total commitments for future minimum lease payments under noncancellable operating leases 
which fall due as follows
 2013 2012
 £’000 £’000
within one year 28 40
within one to two years 10 18
in two to five years 21     31 
 59 89
the group as lessor
as at 30 september 2013 the group had contracted with tenants for the following future minimum lease payments which fall due as follows
 2013 2012
 £’000 £’000
within one year 8 8
27  contingent liabilities
parent company
the parent company has guaranteed the industrial development loan and ‘line of credit’ for treatt usa inc at the balance sheet date the 
liability covered by this guarantee amounted to us2070000 £1279000 2012 us2325000 £1440000
the parent company has also guaranteed certain bank borrowings of its uk subsidiaries r c treatt  co limited and earthoil plantations 
limited at the yearend the liabilities covered by this guarantee amounted to £4322000 2012 £9089000
parent company and group
as previously reported the sellers of the earthoil group which was wholly acquired in april 2008 see note 12 have filed a claim in the 
chancery division of the high court against the parent company for £18m which has subsequently been extended to £23m the claim 
relates to various matters in respect of the earnout being the deferred consideration payable to the sellers in respect of the acquisition of the 
earthoil group following the determination of some preliminary issues in november 2013 this matter may now proceed to be determined by 
an independent expert although there are still matters to be determined by the court and there can therefore be no certainty of the eventual 
outcome the costs of resolving the dispute currently total £647000 of which the current year’s costs of £634000 have been included in 
exceptional items the total eventual legal and professional fees of the dispute are currently unknown but are likely to exceed £1m treatt plc annual report and financial statements 2013   69
28 financial instruments
parent company and group
capital risk management
the group and parent company manage their capital to ensure that entities in the group will be able to continue as going concerns whilst 
maximising the return to stakeholders through the optimisation of the debt and equity balance the capital structure of the group consists of 
net debt and equity shareholders’ funds the group is not subject to any externally imposed capital requirements board policy is to operate 
with a mix of short and medium term borrowings in recent years the group have converted £325m of committed one year borrowings and 
9m of overdraft in the uk into three year revolving credit facilities and a 4m line of credit facility in the us into a four year facility none of these 
facilities expire in the same financial years and all bank facilities are operated independently and are therefore not syndicated the group’s net 
debt position is monitored daily and reviewed by management on a weekly basis further details of the group’s capital management are given 
in the chairman’s statement ceo’s report and financial review on pages 6 to 10
categories of financial instruments
in the following table those financial instruments which are measured subsequent to initial recognition at fair value are required to be grouped 
into levels 1 to 3 based on the degree to which the fair value is observable
• level 1 – fair value measurements are those derived from quoted prices unadjusted in active markets for identical assets or liabilities
• level 2 – fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the 
asset or liability either directly ie as prices or indirectly ie derived from prices and
• level 3 – fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based 
on observable market data unobservable inputs
 group parent company 
  2013 2012 2013 2012
 £’000 £’000 £’000 £’000
financial assets    
redeemable loan notes receivable from subsidiaries — — 1350 1350
trade receivables 11448 12368 — —
cash and cash equivalents 1117 927 — —
derivative financial instruments – forward currency contracts level 2 219 — — —
 12784 13295 1350 1350
financial liabilities    
redeemable loan notes payable 675 675 675 675
trade payables 7 434 5275 — —
bank borrowings 22 2268 1915 1566
uk revolving credit facilities 6793 8731 — —
us term loans 2596 2878 — —
derivative financial instruments – interest rate swap level 2 577 1033 — —
 18097 20860 2590 2241
fair values of financial assets and liabilities
the estimated fair values of financial assets and liabilities is not considered to be significantly different from their carrying values 
financial risk management objectives
the group and parent company collate information from across the business and report to the board on key financial risks these risks 
include credit risk liquidity risk interest rate risk and currency risk the group has policies in place which have been approved by the board 
to manage these risks the group does not enter into traded financial instruments as the costs involved currently outweigh the risks they seek 
to protect against speculative purchases of financial instruments are not made 70   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
28 financial instruments continued
credit risk management
credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group or parent 
company the group’s credit risk is primarily attributable to its trade receivables and details of how this risk is managed are explained in note 
18 the credit risk on liquid funds is limited because the counterparties are banks with good credit ratings assigned by international credit 
rating agencies as outlined in note 19 the directors are of the opinion that there are no significant concentrations of credit risk the carrying 
amount of financial assets recorded in the financial statements which is net of impairment losses represents the group and parent company’s 
maximum exposure to credit risk
the loan notes receivable by the parent company are made up as follows
 2013 2012
 £’000 £’000
variable rate unsecured loan notes 2015 a 950  950
variable rate unsecured loan notes 2015 b 400 400
 1350 1350
the loan notes are redeemable in full on 31 december 2015 or from 31 march 2009 on request from the issuer interest is receivable at 1 
above uk base rate as disclosed in note 29 the loan notes are receivable by the parent company from two of its whollyowned subsidiaries 
comprising the earthoil group although the earthoil group has access to the group’s banking facilities on a standalone basis there is 
technically a credit risk attaching to the loan notes however given that the earthoil group is now trading profitably and the parent company 
has control over when the loan notes are redeemed this credit risk is not considered to be significant
further details of the group’s credit risk management are given in notes 18 and 19
liquidity risk management
liquidity risk refers to the risk that the group may not be able to fund the day to day running of the group liquidity risk is reviewed by the 
board at all board meetings the group manages liquidity risk by monitoring actual and forecast cash flows and matching the maturity profiles 
of financial assets and liabilities the group also monitors the drawdown of debt against the available banking facilities and reviews the level of 
reserves liquidity risk management ensures sufficient debt funding is available for the group’s day to day needs board policy is to maintain a 
reasonable headroom of unused committed bank facilities
the group has a number of debt facilities details of which including their terms and maturity profile are given in note 20
the board also monitors the group’s banking covenants which are calculated under ifrs there were no breaches during the year or prior 
period
interest rate risk management
the group is exposed to interest rate risk on short to medium term borrowings primarily with three major institutions being hsbc lloyds 
banking group and bank of america the risk is managed by maintaining borrowings with several institutions across a number of currencies 
principally us dollar and sterling long term financing is primarily used to finance long term capital investment
the group hedges a portion of its interest rate risk through an interest rate swap which has the effect of fixing the interest rate on a notional 
principal of us9 million of borrowings the interest rate swap is for a period of ten years ending in 2020 and swaps variable 3 month us libor 
for a fixed rate of 568 the group has complied with the requirements of ias39 ‘financial instruments recognition and measurement’ and 
designated this interest rate swap as a cash flow hedge the hedge was 100 effective during the period and is expected to be going forward 
and consequently the carrying value which is the same as the fair value of the interest rate swap has been taken to the hedging reserve 
and the corresponding liability as at 30 september 2013 of £577000 2012 £1033000 is shown under noncurrent liabilities – ‘derivative 
financial instruments’ the fair value of the interest rate swap equates to the marktomarket valuation of the swap provided by hsbc and 
represents the amount which the group would expect to pay in order to close the swap contract at the balance sheet date the gain for the 
period of £546000 2012 £169000 loss is shown in the ‘statement of comprehensive income’ 
the derivative financial instrument for the interest rate swap described above is classified as level 2 treatt plc annual report and financial statements 2013   71
28 financial instruments continued
interest rate risk management continued
interest rate risk is further diversified by having a mix of fixed and floating rate borrowings as well as holding borrowings in a range of currencies 
as follows
 floating rate fixed rate
group financial liabilities financial liabilities t otal
 2013 2012 2013 2012 2013 2012
financial liabilities £’000 £’000 £’000 £’000 £’000 £’000
bank borrowings      
us dollars 6062 6052 2596 8309 8658 14361
sterling 106 1974 — — 106 1974
other 258 562 — — 258 562
total net debt 5698 4640 2596 8309 8294 12949
loan notes payable      
sterling 675 675 — — 675 675
 6373 5315 2596 8309 8969 13624
 bank borrowings are shown net of positive cash balances as rights of setoff exist
the parent company bank borrowings were all held in sterling
interest on floating rate bank deposits is based on uk base rates or currency libor as applicable interest on bank overdrafts is charged at 
135275 above bank base or currency libor rates the terms of the loan notes receivable are shown within this note
fixed rate financial liabilities comprise the industrial development loan of us2070000 2012 us2325000 equipment financing term 
loans of 2133000 2012 2093000 and 9000000 revolving credit facility see note 20 
the loan notes payable by the parent company and group are made up as follows
 2013 2012
 £’000 £’000
series a variable rate unsecured loan notes 2015 475 475
series b variable rate unsecured loan notes 2015 200 200
 675 675
the loan notes are redeemable in full on 31 december 2015 or at an earlier date once 50 of the corresponding loan notes receivable have 
been redeemed interest is payable at 1 above uk base rate 
interest rate sensitivity analysis has been performed on the floating rate financial liabilities to illustrate the impact on group profits if interest 
rates increased or decreased this analysis assumes the liabilities outstanding at the period end were outstanding for the whole period  
a 100 bps increase or decrease has been used comprising management’s assessment of reasonably possible changes in interest rates  
if interest rates had been 100 bps higher or lower then profit before taxation for the year ended 30 september 2013 would have decreased 
or increased as follows
 group parent company 
  2013 2012 2013 2012
 £’000 £’000 £’000 £’000
impact on profit before tax of 1 interest rate movement 101 146 12 9
it has been assumed that all other variables remained the same when preparing the interest rate sensitivity analysis and that floating rate short 
term bank borrowings in the same currency are netted against each other for the purpose of interest rate calculation 72   treatt plc annual report and financial statements 2013
notes to the financial statements
for the year ended 30 september 2013 continued
28 financial instruments continued
foreign currency risk management
foreign currency risk management occurs at a transactional level on revenues and purchases in foreign currencies and at a translational level 
in relation to the translation of overseas operations the group’ s main foreign exchange risk is the us dollar board policy is for uk businesses 
to mitigate us dollar transactional exposures by holding borrowings in us dollars and euros as well as by entering into forward currency 
contracts further details of the group’s foreign currency risk management can be found in the chairman’s statement ceo’s report and 
financial review on pages 6 to 10
at 30 september 2013 the notional principal amount of outstanding foreign currency contracts that are held to hedge the group’ s transaction 
exposures was £6361000 2012 £nil for accounting purposes the group has designated the foreign currency contracts as cash flow 
hedges at 30 september 2013 the fair value of the contracts was £219000 2012 £nil during 2013 a gain of £90000 2012 £nil was 
recognised in other comprehensive income in respect of these contracts and a gain of £129000 2012 £nil was reclassified from equity to 
profit or loss and included in operating profit
the derivative financial instrument for the foreign currency contracts described above is classified as level 2
the group’s currency exposure being those exposures arising from transactions where the net currency gains and losses will be recognised 
in the income statement is as follows
net foreign currency financial assetsliabilities
 us dollar other t otal
 £’000 £’000 £’000
at 30 september 2013 5056 1077 3979
   
at 30 september 2012 2772 335 2437
   
a currency sensitivity analysis has been performed on the financial assets and liabilities to sensitivity of a 10 increasedecrease in the 
pounds sterling to us dollar exchange rate a 10 strengthening of the us dollar has been used comprising management’s assessment of 
reasonably possible changes in us dollar exchange rates the impact on profit for the period in the income statement would be a loss on net 
monetary assets or liabilities of £562000 2012 £308000 in management’s opinion the sensitivity analysis is unrepresentative of the inherent 
foreign exchange risk since it is limited to the yearend exposure and does not reflect the exposure during the year
29 related party  transactions
the following transactions were carried out with related parties
group
remuneration of key management personnel
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate further information 
about the remuneration of individual directors is provided in the directors’ remuneration report on pages 31 to 35
 2013 2012
 £’000 £’000
salaries and other shortterm employee benefits 1070 852
termination benefits — 586
employers’ social security costs 111 132
pension contributions to money purchase schemes 42 12
sharebased payments 3 2
 1226 1584
  
during the year two directors 2012 three were members of a defined benefit pension scheme until the scheme was closed to future accrual 
with effect from 31 december 2012 the aggregate accumulated total pension as at 30 september 2013 was £64000 2012£157000 treatt plc annual report and financial statements 2013   73
29 related party  transactions continued
director’s loan
in 2010 two years before his appointment to the board daemmon reeve was granted an interest free loan of 50000 £31000 by the parent 
company to assist with relocating to the us upon his appointment as ceo of treatt usa the loan is being repaid in equal monthly instalments 
having repaid 16250 £11683 during the year the balance outstanding at 30 september 2013 was 1250 £772
 2013 2012
parent company £’000 £’000
interest received from  
  earthoil plantations limited 14 31
  earthoil kenya pty epz limited 6 6
  
dividends received from  
  r c t reatt  co limited 948 1491
  treatt usa inc 654 641
  
redeemable loan notes receivable  
  earthoil plantations limited 950 950
  earthoil kenya pty epz limited 400 400
  
amounts owed toby parent company  
  earthoil plantations limited 157 45
  r c treatt  co limited 297 27
 
the redeemable loan notes are redeemable in full on 31 december 2015 or from 31 march 2009 on request from the issuer interest is 
receivable at 1 above uk base rate amounts owed to the parent company are unsecured and will be settled in cash 74   treatt plc annual report and financial statements 2013
notice of annual general meeting
this document is important and requires your immediate attention if you are in any doubt as to what 
action to take you are recommended to consul t your stockbroker solicitor accountant or other 
independent adviser authorised under the financial services and markets act 2000
if you have sold or transferred all of your ordinary shares in treatt plc you should pass this document together with the accompanying  
form of proxy to the person through whom the sale or transfer was made for transmission to the purchaser or transferee
notice of the annual general meeting which has been convened for 24 february 2014 at 1030 am at treatt plc northern way bury st 
edmunds suffolk ip32 6nl is set out below 
to be valid forms of proxy must be completed and returned in accordance with the instructions printed thereon so as to be received by the 
company’s registrars capita asset services the registry 34 beckenham road beckenham kent br3 4tu as soon as possible and in any 
event not later than 48 hours excluding weekends and public holidays before the time appointed for holding the meeting
notice is hereby given that the annual general meeting of the shareholders of treatt plc the “company” will be held at treatt plc northern 
way bury st edmunds suffolk ip32 6nl on 24 february 2014 at 1030 am for the transaction of the following business
ordinary business
1 to receive the accounts and the reports of the directors and the auditors for the year ended 30 september 2013
2 to approve the directors’ remuneration report
3 to approve a final dividend of 130p per share on the ordinary shares of the company for the year ended 30 september 2013
4 to reelect jeff iliffe as a director of the company
5 to reelect anita haines as a director of the company
6 to reelect david johnston as a director of the company
7 to reappoint baker tilly uk audit llp as auditors of the company to hold office from the conclusion of this meeting until the conclusion 
of the next annual general meeting 
8 to authorise the directors to determine the remuneration of the auditors of the company
special business
to consider and if thought fit to pass the following resolutions of which resolutions 9 to 13 will be proposed as ordinary resolutions and 
resolutions 14 and 15 will be proposed as special resolutions
9 approval of remuneration policy
 that
 the remuneration policy be and is hereby approved
10 authority to allot securities
 that
a  in accordance with section 551 of the companies act 2006 the ‘act’ the directors be and are hereby generally and unconditionally 
authorised to exercise all the powers of the company to allot shares in the company and to grant rights to subscribe for or to convert 
any security into shares in the company rights within the terms of the restrictions and provisions following namely
i this authority shall unless previously revoked varied or renewed expire on the earlier of the date of the next annual general 
meeting of the company following the passing of this resolution and 23 may 2015 and
ii this authority shall be limited to the allotment of shares and the granting of rights up to an aggregate nominal amount of £345850 
representing approximately 33 per cent of the existing issued share capital of the company
b for the purpose of subparagraph a above
i the said power shall allow and enable the directors to make an offer or agreement which would or might require shares to be 
allotted or rights to be granted after such expiry and the directors may allot shares and grant rights in pursuance of such an offer 
or agreement as if the power conferred hereby had not expired and
ii words and expressions defined in or for the purpose of part 17 of the act shall bear the same meaning herein
11 increase in aggregate fees to nonexecutive directors
 that
 the maximum aggregate fees permitted to be paid to the nonexecutive directors’ of the company pursuant to article 183 of the 
company’s articles of association be and is hereby increased from £150000 to £225000 treatt plc annual report and financial statements 2013   75
12 approval of long term incentive plan
 that
 the treatt plc long term incentive plan the main terms of which are summarised in the explanatory notes accompanying this notice of 
meeting to be constituted by the rules produced to the meeting and signed by the chairman for the purposes of identification be and is 
hereby approved and adopted for five years from the date of approval by shareholders 
13 approval of share incentive plan
 that
 the t reatt plc share incentive plan the main terms of which are summarised in the explanatory notes accompanying this notice of meeting 
to be constituted by the trust deed and rules produced to the meeting and signed by the chairman for the purposes of identification be 
and is hereby approved and adopted for ten years from the date of approval by shareholders and the directors are hereby authorised
a  to do all acts and things necessary to carry the same into effect including the making of any changes to the trust deed and rules 
as may be necessary to obtain the approval of hm revenue  customs andor such other approvals as the directors may consider 
necessary or desirable to obtain and
b  at their discretion to adopt similar allemployee plans as they deem appropriate for the benefit of employees and directors of the 
company and its subsidiaries on identical terms which are located outside the united kingdom 
14 disapplication of preemption rights for up to 5 of existing share capital
 that
a conditionally upon the passing of resolution 10 above and in accordance with section 570 of the act the directors be and are hereby 
given power to allot equity securities pursuant to the authority conferred by resolution 10 above as if section 561 of the said act did 
not apply to any such allotment provided that
i the power hereby granted shall be limited
aa to the allotment of equity securities in connection with or pursuant to an offer by way of rights to the holders of shares in the 
company and other persons entitled to participate therein in the proportion as nearly as may be to such holders’ holdings 
of such shares or as appropriate to the number of shares which such other persons are for these purposes deemed to hold 
subject only to such exclusions or other arrangements as the directors may feel necessary or expedient to deal with fractional 
entitlements or legal or practical problems under the laws of or the requirements of any recognised regulatory body in any 
territory and
bb to the allotment otherwise than pursuant to subparagraph iaa of this proviso of equity securities up to an aggregate 
nominal amount of £52400 representing approximately 5 per cent of the existing issued share capital of the company
ii the power hereby granted shall expire on the earlier of the date of the next annual general meeting of the company following the 
passing of this resolution and 23 may 2015
 b  i the said power shall allow and enable the directors to make an offer or agreement before the expiry of the said power which  
  would or might require securities to be allotted pursuant to the agreement as if the power conferred herein had not expired and 
ii  words and expressions defined in or for the purpose of part 17 of the act shall bear the same meaning herein
15 authority to purchase own shares
 that
 the company is hereby generally and unconditionally authorised to make market purchases within the meaning of section 693 of the act 
of ordinary shares of 10p each in the capital of the company “ordinary shares” provided that
a the maximum number of ordinary shares authorised to be purchased is 1048000 representing approximately 10 per cent of the 
present issued share capital of the company
b the minimum price excluding stamp duty dealing or other costs which may be paid for an ordinary share so purchased is 10p
c the maximum price which may be paid for an ordinary share so purchased is an amount equal to 5 per cent above the average of 
the middle market quotations shown for an ordinary share in the london stock exchange daily official list on the five business days 
immediately preceding the day on which that ordinary share is purchased
d the authority hereby conferred shall expire at the conclusion of the annual general meeting of the company to be held in 2015 unless 
such authority is renewed varied or revoked prior to such time and
e the company may prior to the expiry of such authority make a contract to purchase ordinary shares under the authority hereby 
conferred which will or may be executed wholly or partly after the expiry of such authority and may make a purchase of ordinary shares 
in pursuance of any such contract
by order of the board registered office
anita steer northern way
secretary bury st edmunds
 suffolk
19 december 2013 ip32 6nl 
  
the note on voting procedures and general rights of shareholders together with explanatory notes on the resolutions to be put to the meeting 
which follow on pages 76 to 80 form part of this notice 76   treatt plc annual report and financial statements 2013
notice of annual general meeting
continued
note on voting procedures and general rights of shareholders
only those persons entered in the register of members of the company the register as at 600pm on 20 february 2014 the record date 
shall be entitled to attend or vote at the agm in respect of the number of ordinary shares in the capital of the company registered in their 
names at that time changes to entries on the register for certificated or uncertificated shares of the company after the record date shall be 
disregarded in determining the rights of any person to attend or vote at the agm should the agm be adjourned to a time not more than 48 
hours after the record date that time will also apply for the purpose of determining the entitlement of members to attend and vote and for 
the purpose of determining the number of votes they may cast at the adjourned agm should the agm be adjourned for a longer period to 
be so entitled members must have been entered on the register by 600pm two days prior to the adjourned agm excluding weekends and 
public holidays or if the company gives notice of the adjourned agm at the time specified in such notice
voting at the meeting will be conducted by poll rather than on a show of hands which the board believes provides a more accurate reflection 
of shareholder views and takes into account the number of shares held by each member those shareholders who are unable to attend the 
meeting should submit a form of proxy as detailed below shareholders attending the meeting may also wish to vote in advance of the meeting 
by submitting a form of proxy members who have done so will not need to vote at the meeting unless they wish to change their vote or the 
way in which the proxy is instructed to vote 
 
a member entitled to attend and vote at this meeting may appoint a proxy or proxies to attend and vote instead of him or her the proxy need 
not be a member of the company a form of proxy is provided with this notice and instructions for use are shown on the form additional forms 
of proxy can be obtained from the company’s registrars on tel no 0871 664 0300 calls cost 10p per minute plus network extras lines are open 
830 am to 530 pm monday to friday instruments appointing proxies must be lodged with the company’s registrars not less than 48 hours 
before the time fixed for the meeting to be effective completion and return of a form of proxy will not preclude a member from attending and 
voting in person at the meeting or any adjournment of the meeting
an abstention option is provided on the form of proxy to enable you to instruct your proxy to abstain on any particular resolution however it 
should be noted that an abstention in this way is not a ‘vote’ in law and will not be counted in the calculation of the proportion of the votes ‘for’ 
and ‘against’ a resolution
crest members who wish to appoint a proxy or proxies through the crest electronic proxy appointment service may do so for the annual 
general meeting to be held on 24 february 2014 and any adjournments of the meeting by using the procedures described in the crest 
manual crest personal members or other crest sponsored members and those crest members who have appointed a voting service 
providers should refer to their crest sponsor or voting service providers who will be able to take the appropriate action on their behalf 
please note the following
a in order for a proxy appointment or instruction made using the crest service to be valid the appropriate crest message a “crest proxy 
instruction” must be properly authenticated in accordance with euroclear uk  ireland limited’s “eui” specifications and must contain 
the information required for such instructions as described in the crest manual the message regardless of whether it constitutes the 
appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must in order to be valid be transmitted 
so as to be received by the issuer’s agent id ra10 by the latest times for receipt of proxy appointments specified in this notice of the 
annual general meeting for this purpose the time of receipt will be taken to be the time as determined by the timestamp applied to the 
message by the crest applications host from which the issuer’s agent is able to retrieve the message by enquiry to crest in the manner 
prescribed by crest after this time any change of instructions to proxies appointed through crest should be communicated to the 
appointee through other means
b crest members and where applicable their crest sponsors or voting service providers should note that eui does not make available 
special procedures in crest for any particular messages normal system timings and limitations will therefore apply in relation to the 
input of crest proxy instructions it is the responsibility of the crest member concerned to take or if the crest member is a crest 
personal member or sponsored member or has appointed a voting service providers to procure that his crest sponsor or voting service 
providers takes such action as shall be necessary to ensure that a message is transmitted by means of the crest system by any 
particular time in this connection crest members and where applicable their crest sponsors or voting service providers are referred 
in particular to those sections of the crest manual concerning practical limitations of the crest system and timings
c the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a of the uncertificated 
securities regulations 2001 treatt plc annual report and financial statements 2013   77
the right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person and who have been nominated 
to receive communications from the company in accordance with section 146 of the companies act 2006 “nominated persons” nominated 
persons may have a right under an agreement with the registered shareholder who holds the shares on their behalf to be appointed or to have 
someone else appointed as a proxy alternatively if nominated persons do not have such a right or do not wish to exercise it they may have 
a right under such an agreement to give instructions to the person holding the shares as to the exercise of voting rights
a member of the company which is a corporation may authorise a person or persons to act as its representatives at the agm in accordance 
with the provisions of the companies act 2006 as amended by the companies shareholders’ rights regulations 2009 each such 
representative may exercise on behalf of the corporation the same powers as the corporation could exercise if it were an individual member 
of the company provided that they do not do so in relation to the same shares it is therefore no longer necessary to nominate a designated 
corporate representative
pursuant to section 319a of the companies act 2006 the company must cause to be answered at the agm any question relating to the 
business being dealt with at the agm which is put by a member attending the meeting except in certain circumstances including if it is 
undesirable in the interests of the company or the good order of the meeting that the question be answered or if to do so would involve the 
disclosure of confidential information 
members satisfying the thresholds in section 338 of the companies act 2006 may require the company to give to members of the company 
entitled to receive notice of the agm notice of a resolution which those members intend to move and which may properly be moved at the 
agm a resolution may properly be moved at the agm unless i it would if passed be ineffective whether by reason of any inconsistency with 
any enactment or the company’s constitution or otherwise ii it is defamatory of any person or iii it is frivolous or vexatious the business 
which may be dealt with at the agm includes a resolution circulated pursuant to this right a request made pursuant to this right may be in hard 
copy or electronic form must identify the resolution of which notice is to be given must be authenticated by the persons making it and must 
be received by the company not later than 6 weeks before the date of the agm
members satisfying the thresholds in section 338a of the companies act 2006 may request the company to include in the business to be 
dealt with at the agm any matter other than a proposed resolution which may properly be included in the business at the agm a matter 
may properly be included in the business at the agm unless i it is defamatory of any person or ii it is frivolous or vexatious a request made 
pursuant to this right may be in hard copy or electronic form must identify the matter to be included in the business must be accompanied by 
a statement setting out the grounds for the request must be authenticated by the persons making it and must be received by the company 
not later than 6 weeks before the date of the agm
in accordance with section 311a of the companies act 2006 the contents of this notice of meeting details the total number of shares in 
respect of which members are entitled to exercise voting rights at the agm the total voting rights members are entitled to exercise at the agm 
and if applicable any members’ statements members’ resolutions or members’ matters of business received by the company after the date 
of this notice will be available on the company’s website wwwtreattcom
as at 19 december 2013 the company’s issued share capital consists of 10481034 ordinary shares the total number of voting rights in the 
company as at 19 december 2013 the latest practicable reporting date prior to publication of this document is 10264523 
a statement of directors’ share transactions and copies of their service contracts and the letters of appointment of the nonexecutive directors 
are available for inspection during usual business hours at the registered office of the company from the date of this notice until the date of the 
annual general meeting saturdays sundays and public holidays excluded and will be available at the place of the meeting for fifteen minutes 
prior to and during the meeting
except as provided above members who wish to communicate with the company in relation to the meeting should do so using the following 
means
calling the company secretary on 44 1284 702500 
emailing the company secretary on cosectreattcom or
writing to the company secretary treatt plc northern way bury st edmunds suffolk ip32 6nl 78   treatt plc annual report and financial statements 2013
notice of annual general meeting
continued
explanatory notes
report and accounts resolution 1
the directors of the company must present the accounts to the meeting
directors’ remuneration report resolution 2
changes to the companies act 2006 implemented by the enterprise and regulatory reform act 2013 provide that a quoted company may 
not make a remuneration payment to a director of the company unless the payment is consistent with the company’s remuneration policy 
as approved by shareholders or the payment is approved by a shareholders’ resolution the legislation requires two resolutions to be put to 
shareholders on separate sections of the directors’ remuneration report the first of these is an advisory resolution on the implementation 
section of the directors’ remuneration report which details the remuneration packages paid to directors during the year ended 30 september 
2013 you can find the implementation section of the directors’ remuneration report on page 31
declaration of a dividend resolution 3
a final dividend can only be paid after the shareholders at a general meeting have approved it a final dividend of 130p per ordinary share is 
recommended by the directors for payment to shareholders who are on the register of members at the close of business on 28 february 2014 
if approved the date of payment of the final dividend will be 4 april 2014 an interim dividend of 55 pence per ordinary share was paid on 18 
october 2013 this represents an increase of 30 pence per share or 194 per cent on the total 2012 dividend
reelection of directors resolutions 4 5 and 6
in accordance with the articles of association all directors retire at least every three years and all newly appointed directors retire at the first 
annual general meeting following their appointment furthermore any nonexecutive director having been in post for nine years or more is 
subject to annual reelection
at this meeting jeff iliffe anita haines and david johnston will retire and stand for reelection as directors short biographies of these directors 
are given on page 15 anita haines will retire as an executive director at the conclusion of the annual general meeting and is standing for 
reelection as a nonexecutive director having considered the performance of and contribution made by each of the directors standing for 
reelection the board remains satisfied that the performance of each of the relevant directors continues to be effective and to demonstrate 
commitment to the role and as such recommends their reelection
reappointment and remuneration of auditors resolutions 7 and 8
resolutions 8 and 9 propose the reappointment of baker tilly uk audit llp as auditors of the company and authorise the directors to set 
their remuneration
remuneration policy report resolution 9
as referred to under resolution 2 above two resolutions are required to be put to shareholders on separate sections of the directors’ 
remuneration report the second of these is a binding resolution passed by a majority to approve the company’s remuneration policy the 
policy which is set out on pages 23 to 30 will apply to all payments made to directors from the date the policy is approved by shareholders 
since the resolution is binding it will be necessary for the company to convene an extraordinary general meeting to put the resolution to 
shareholders again in the event that it is not passed at the annual general meeting 
directors’ authority to allot securities resolution 10
your directors may only allot ordinary shares or grant rights over ordinary shares if authorised to do so by shareholders this resolution seeks 
to grant authority to the directors to allot unissued share capital of the company and grant rights and will expire at the conclusion of the next 
annual general meeting of the company in 2015 or if earlier on 23 may 2015 the date which is 15 months after the date of passing of the 
resolution there is no present intention of exercising this authority which would give directors authority to allot relevant securities up to an 
aggregate nominal value of £345850 approximately 33 per cent of the company’s issued ordinary share capital as at 19 december 2013
increase in aggregate fees payable to the nonexecutive directors’ resolution 11
article 183 provides that the ordinary remuneration of the nonexecutive directors shall not exceed £150000 per annum in aggregate unless 
a higher sum is determined by ordinary resolution of the company the limit was last increased at the annual general meeting in 2009
although anita haines’ resignation as an executive director will not affect the overall number of directors on the board her appointment as 
a nonexecutive director will have an effect on the aggregate fees of nonexecutive directors taking them above the current maximum the 
proposed increase in the maximum aggregate fees to £225000 will provide the board with sufficient flexibility to ensure that the skills expertise 
and diversity of the board remain appropriate for the future and that the board is sufficiently balanced to enable it to fulfill its obligations to 
shareholders
shareholders should note that increasing the maximum aggregate fees for nonexecutive directors does not mean that shareholders are 
approving an increase in the fees payable to each current nonexecutive director increases in individual nonexecutive directors fees will be 
subject to the remuneration policy detailed under resolution 9 above  treatt plc annual report and financial statements 2013   79
approval of long term incentive plan resolution 12
this resolution proposes the introduction of a long t erm incentive plan ‘ltip’ for employees and directors a summary of the proposed rules 
of the ltip is provided in appendix a below a full copy of the rules is available on the treatt website at wwwtreattcom and will be available 
for inspection at the annual general meeting
one of the key principles of the remuneration policy is to link rewards to directors and key employees to the creation of longer term value 
for shareholders historically few sharebased incentives have been awarded to directors but it is recognised that this is an important aspect 
of remuneration and it is therefore intended that the grant of appropriate awards of sharebased incentives with stretching performance 
conditions will be considered annually the remuneration committee believes that the introduction of the ltip will
• enhance the group’s remuneration framework
• assist in the retention and motivation of directors and key employees who are focused on executing the business strategy
• ensure that there is sufficient focus on driving shareholder value by providing appropriate rewards for success 
• align the interests of participants with those of shareholders and
• reflect developments in corporate governance and market practice
approval of share incentive plan resolution 13
this resolution proposes the introduction of a new share incentive plan ‘sip’ for employees and directors a summary of the proposed rules 
of the sip is provided in appendix b below a full copy of the rules and trust deed are available on the treatt website at wwwtreattcom and 
will be available for inspection at the annual general meeting
the company wishes to launch the sip  which will run alongside the existing all employee save as you earn share option scheme under 
which shares are purchased at the end of a three year savings period in order to align the interests of all employees with those of shareholders 
and further foster employee share ownership the directors believe that the introduction of the sip will provide employees with an opportunity 
to further invest in the company’s shares
disapplication of preemption rights resolution 14
under section 561 of the act if the directors wish to allot any of the unissued shares or grant rights over shares or sell treasury shares for 
cash other than pursuant to an employee share scheme they must in the first instance offer them to existing shareholders in proportion to 
their holdings there may be occasions however when the directors will need the flexibility to finance business opportunities by the issue of 
ordinary shares without a preemptive offer to existing shareholders this cannot be done under the act unless the shareholders have first 
waived their preemption rights
resolution 14 asks the shareholders to do this and apart from rights issues or any other preemptive offer concerning equity securities the 
authority will be limited to the issue of shares for cash up to a maximum aggregate nominal value of £52400 which includes the sale on a 
non preemptive basis of any shares held in treasury which is equivalent to approximately 5 per cent of the company’s issued ordinary share 
capital as at 19 december 2013 shareholders will note that this resolution also relates to treasury shares and will be proposed as a special 
resolution
this resolution seeks a disapplication of the preemption rights on a rights issue so as to allow the directors to make exclusions or such other 
arrangements as may be appropriate to resolve legal or practical problems which for example might arise with overseas shareholders if given 
the authority will expire at the conclusion of the next annual general meeting of the company in 2015 or if earlier 23 may 2015 the date which 
is 15 months after the date of passing of the resolution
authority to purchase own shares resolution 15
in certain circumstances it may be advantageous for the company to purchase its own shares and resolution 15 seeks the authority from 
shareholders to continue to do so the directors will continue to exercise this power only when in the light of market conditions prevailing 
at the time they believe that the effect of such purchases will be to increase earnings per share and is in the best interests of shareholders 
generally other investment opportunities appropriate gearing levels and the overall position of the company will be taken into account when 
exercising this authority
any shares purchased in this way will be cancelled and the number of shares in issue will be reduced accordingly save that the company 
may hold in treasury any of its own shares that it purchases pursuant to the act and the authority conferred by this resolution this gives the 
company the ability to reissue treasury shares quickly and costeffectively and provides the company with greater flexibility in the management 
of its capital base it also gives the company the opportunity to satisfy employee share scheme awards with treasury shares once held in 
treasury the company is not entitled to exercise any rights including the right to attend and vote at meetings in respect of the shares further 
no dividend or other distribution of the company’s assets may be made to the company in respect of the treasury shares 80   treatt plc annual report and financial statements 2013
notice of annual general meeting
continued
the resolution specifies the maximum number of ordinary shares that may be acquired approximately 10 per cent of the company’s issued 
ordinary share capital as at 19 december 2013 and the maximum and minimum prices at which they may be bought
the total number of options to subscribe for ordinary shares that were outstanding at 19 december 2013 the latest practicable reporting date 
prior to publication of this document was 114521 the proportion of issued share capital that they represented at that time was 109 per cent 
and the proportion of issued share capital that they will represent if the full authority to purchase shares existing and being sought is used is 
121 per cent
resolution 15 will be proposed as a special resolution to provide the company with the necessary authority if given this authority will expire 
at the conclusion of the next annual general meeting of the company in 2015 or if earlier 23 may 2015 the date which is 15 months after the 
date of passing of the resolution
the directors intend to seek renewal of this power at subsequent annual general meetings treatt plc annual report and financial statements 2013   81
appendix a
summary of provisions of the treatt plc long term incentive plan “l tip” 
the company proposes to introduce the ltip to incentivise directors and employees
the ltip is capable of making awards of share options which are unapproved for tax purposes in the uk and restricted stock units in the us 
it is intended that the ltip will be used to make awards of “nil cost” share options to selected employees of the company in the uk and 
restricted stock units which may at the discretion of the company be satisfied by the transfer of shares or payment in cash of equivalent 
value once vesting conditions have been met to employees in the us to allow them to share in the success of the group and promote 
motivation and retention 
all awards will be made in accordance with the company’s remuneration policy as approved by shareholders from time to time
it is proposed that all options granted under the ltip will have an exercise price equal to the nominal value of a share in the case of a 
subscription option and nil in the case of an option to acquire existing shares held in the treatt employee benefit trust restricted stock units 
will similarly be awarded for the nominal value in the case of newly issued shares and nil in the case of existing shares 
grants of awards
awards may be granted to eligible employees at the discretion of the board awards may be granted only during the period of
i 42 days following the date of adoption of the l tip by the company
ii 42 days following the announcement of yearly  half yearly or other period financial results of the company
iii 28 days after the person to whom it is granted first becoming an employee
ii subject to the model code any other date on which the dir ectors consider that exceptional circumstances justify the grant of options or
iii in the event that any statute order or regulation prevents the company from making awards the award will be made within the relevant 
period indicated above after that restriction is removed
eligibility
all fulltime employees and directors of the group shall be eligible to participate in the ltip at the discretion of the board
performance conditions
the board will impose performance conditions applying over a period of at least three years that must be satisfied before awards vest the 
performance conditions which will be determined at the time of grant to ensure that they are sufficiently stretching will be set in accordance 
with the remuneration policy
clawback
in the event of a material misstatement of the company’s published financial results used to determine the quantum of awards granted or 
assess the satisfaction of performance conditions or in the event of an error made in calculation or an award holder’s gross misconduct 
awards may be reduced adjusted or cancelled as determined by the remuneration committee the ‘committee’ to the extent that awards 
have already been exercised the committee may having considered all the circumstances require the award holder to return any shares 
received or the amounts of any proceeds of sale of such shares net of tax
limit of participation
the market value of shares over which awards may be made under the ltip when added to the market value of shares or rights or 
opportunities to acquire them provided under any other employee share scheme of the company except a tax approved savingsrelated 
share option scheme may not exceed 150 of the participant’ s salary for the financial year in which the award is made or if greater 150 of 
the participant’s salary for the previous year 
salary for this purpose is basic gross salary excluding bonuses company pension contributions and any other benefits in kind this limit may 
be exceeded if the committee considers that exceptional circumstances exist
t otal number of shares available
the total number of shares that may be newly issued by the company under awards made under the ltip on any day when added to the 
total number of shares which remain issuable pursuant to rights or opportunities granted under any other employees’ share scheme in the 10 
years before that day will not exceed 10 of the total share capital in issue on that day 
for this purpose newly issued shares will include shares issued out of treasury it will not include rights or opportunities to subscribe for new 
shares which are in fact satisfied by the transfer of existing shares by another shareholder
vesting of restricted stock units and exercise of options
awards will vest once performance conditions have been either satisfied or waived or are treated as satisfied under the provisions described 
below  82   treatt plc annual report and financial statements 2013
notice of annual general meeting
continued
options shall generally be exercisable after a period beginning with the date on which it is established that a performance condition has been 
satisfied and ending up to ten years from the date of grant restricted stock units may not be sold exchanged pledged or otherwise disposed 
of until they vest to the extent that they do not vest awards will lapse
in the case of a takeover demerger or a statutory reconstruction the committee may at its discretion and acting fairly and reasonably 
determine the proportion or number of awards that will vest subject to whether and to what extent the performance conditions should be 
deemed to be satisfied 
award holders may be able to exchange their awards under the ltip for awards over the shares of the company making any takeover or on 
an internal reconstruction involving the company coming under the control of another but remaining under the control of the person or persons 
who had control of the company before the reconstruction
employees leaving the company
if an award holder ceases to hold office or employment with the group as a good leaver awards shall vest at the date of cessation but shall 
be prorated by reference to the amount of the performance period completed and subject to satisfaction or deemed satisfaction of the 
performance conditions 
a good leaver is any employee leaving by reason of injury or disability redundancy death in service the transfer of the employment outside 
the group or the sale of a company outside the group if an award holder dies after having ceased to hold employment with the group the 
committee may determine the extent to which any unvested awards vest
if an award holder leaves for any other reason all awards which have not by then vested will vest only to the extent determined by the 
committee at its discretion acting reasonably shall determine 
variation of share capital
in the event of a variation of share capital the directors may adjust the number of shares under the award and where appropriate the exercise 
price to reflect such variation this adjustment shall be subject to confirmation by the auditors that such adjustment is fair and reasonable 
alteration of the l tip
the directors may at any time alter or amend the provisions of the ltip provided that no alteration may be made to the advantage of existing 
or new award holders without the approval of shareholders by ordinary resolution except for any such alteration where the amendments are 
minor to benefit the administration of the ltip  to take account of a change in legislation or to obtain or maintain favourable tax treatment
pensions
benefits under the ltip will not be pensionable
  treatt plc annual report and financial statements 2013   83
appendix b
summary of provisions of treatt plc share incentive plan “sip”
it is proposed that the company will introduce an h m revenue  customs approved share incentive plan the “sip” to provide all uk 
employees of the group with the opportunity to acquire shares in the company on a tax efficient basis 
the terms of the sip are set out in below 
the sip provides for the acquisition of shares the sip will be governed by a trust deed and rules which will be submitted for approval to h 
m revenue  customs the sip will be operated through a uk resident trust the “trust” the trustees of the trust the “trustees” will buy or 
subscribe for shares that are awarded to or acquired by employees under the sip and will hold these shares in the trust on their behalf under 
the terms of the sip 
the main features of the sip are as follows
eligibility
all employees of the group who are resident and ordinarily resident in the united kingdom and who are determined by the company to be 
qualifying employees are eligible to participate in any offer made by the company under the plan nonuk resident employees may also be 
invited to participate in the sip 
the company may require employees to have completed a minimum qualifying period of employment before they are eligible to participate 
but such period may not exceed 18 months ending on the date shares are awarded andor purchased under the sip  
basis for participation
the sip provides for the acquisition by participating employees of one or more of four categories of shares 
the company may award “free shares” to participants and or allow participants to give up salary to purchase “partnership shares” and to the 
extent that they do so the company may award up to two “matching shares” for each partnership share purchased any dividends arising on 
shares held in the sip may also be reinvested to acquire further “dividend shares” under the sip  
the directors will determine in any year whether participation in the sip will be offered and if so the basis on which each of the above 
categories may be offered 
free shares
the company may award free shares to participating employees subject to the annual statutory individual limits
the number of free shares awarded to participants will be determined by the directors on the basis of objective criteria and may also be 
subject to performance measures performance measures may be based on personal team or divisional targets and the relevant measure 
selected will be notified to all qualifying employees
partnership shares
the company may invite applications from qualifying employees to enter into a contract under the sip to buy partnership shares by deduction 
from pretax salary subject to the annual statutory individual limits the company may specify a maximum number of shares to be available 
for purchase as partnership shares under any particular invitation
as determined by the directors deductions may either be
a transferred directly to the trustees to be applied in the acquisition of partnership shares within 30 days of the deduction from salary the 
trustees will acquire partnership shares which will then be held in the trust on the participant’s behalf the purchase price paid for the 
partnership shares will be determined as the market value of the shares on the date of acquisition or
b accumulated over an accumulation period and held in an account until the end of an accumulation period not exceeding 12 months within 
30 days of the end of the accumulation period the trustees shall apply the accumulated funds to acquire partnership shares and hold 
such shares in the trust on the participant’s behalf the directors will decide in respect of each offer whether the purchase price paid for 
the partnership shares will be determined as the market value of the shares at the start of the accumulation period or the market value on 
the day the shares are acquired or the lower of those two values 
  84   treatt plc annual report and financial statements 2013
notice of annual general meeting
continued
matching shares
where the company decides to offer the opportunity for the acquisition of partnership shares it may also offer matching shares to those 
participants who elect to buy partnership shares allocations of matching shares will be made on the same day as partnership shares are 
acquired on behalf of participants by the trustees 
the company will decide the basis on which matching shares are allocated subject to the statutory individual limits allocations of matching 
shares will be made to all participants on the same basis the maximum permissible number of matching shares according to the law is two 
matching shares for each partnership share purchased
dividend shares
participants will be entitled to dividends paid on their free shares matching shares and partnership shares while they are held in the trust
at the discretion of the directors dividends arising on shares held in the trust under the sip may either be paid directly to a participant in cash 
or reinvested subject to the individual limits for the acquisition of further shares under the sip on behalf of the participant
individual limits
the value of free shares which may be awarded to a participant under the sip in any year shall not exceed the statutory maximum which with 
effect from april 2014 will be £3600 per annum 
the maximum amount which can be deducted from a participant’s salary for the purpose of buying partnership shares shall not exceed the 
statutory maximum which with effect from april 2014 will be the lower of 10 of salary or £1800 per annum
the number of matching shares which may be awarded to a participant purchasing partnership shares under the sip shall not exceed the 
statutory maximum which is currently two matching shares for every one partnership share purchased 
there is no limit on the number or value of shares that may be acquired in the plan as dividend shares
holding periods
free shares and matching shares must be held in the trust by the trustees for a holding period of between three and five years or if earlier 
until the employee leaves the group the directors shall determine the applicable holding period at the time the offer is made 
dividend shares must be held in the trust by the trustees for a holding period of three years or if earlier until the employee leaves the group
participants may withdraw their partnership shares from the sip at any time
t ermination of employment and forfeiture provisions
on termination of employment with the company or any company within the group a participant is required to withdraw all shares from the 
sip other than those which are forfeited under the terms of any offer under the sip 
the sip may provide for free shares andor matching shares to be forfeited if an employee terminates employment with the group within a 
specified period the “forfeiture period” unless the termination of employment is by reason of death injury disability or sale of the business for 
which the participant works out of the group or the participant’s employment is transferred out of the group the forfeiture period may not 
exceed three years from the date the allocation of free sharesmatching shares is made 
in addition the directors may provide that matching shares may be subject to forfeiture if the corresponding partnership shares are withdrawn 
within three years of purchase
voting rights
the directors will determine whether participants shall have the right to exercise any voting rights attaching to shares held under the sip  
limits on the issue of shares
the sip will be subject to a limit on the number of new shares in the company that may be issued in any rolling tenyear period not more than 
10 of the issued ordinary share capital of the company may be issued or issuable pursuant to the rights acquired in total under the sip  the 
treatt plc long term incentive plan and any other employees’ share schemes adopted by the company
adjustment of awards
on a variation of the capital of the company the number of shares held under the sip will be adjusted in such manner as the directors 
determine subject to written confirmation from the company’s auditors that the adjustment is in their opinion fair and reasonable treatt plc annual report and financial statements 2013   85
reconstructions and takeovers
in the event of any reconstruction or change in control of the company shares must be either withdrawn from the sip  or if certain circumstances 
are met exchanged for shares in the new holding which will continue to be held in the trust under the sip under the same terms and subject 
to the same rights and restrictions as the original shares 
alterations
the sip may at any time be altered by the directors in any respect provided that the prior approval of the shareholders in general meeting 
will be obtained for alterations or additions to the advantage of participants except for minor amendments to benefit the administration of the 
sip  to take account of existing or proposed legislation or to obtain or maintain favourable tax exchange control or regulatory treatment for 
participants in the sip or for the company and or any member of the group 
to the extent required by the law h m revenue  customs approval will be sought in respect of any proposed amendment to a “key feature” 
of the sip ie being a feature which is necessary to meet the requirements of the relevant legislation governing the sip 
rights attaching to shares
ordinary shares allotted under the sip will rank equally with all other shares of the company for the time being in issue and the company will 
apply for admission of any new shares issued under the sip to any relevant exchange 
funding the sip
each participating company within the group may fund the trustees of the trust to subscribe for or buy shares in the market or privately the 
company may only fund the trust at such time that it has sufficient distributable reserves to do so the acquisition price for private purchases 
must not be materially more than the market price of a share at that time and the subscription of shares must be at market value or if higher 
at nominal value
general
benefits under the sip are not pensionable 86   treatt plc annual report and financial statements 2013
201213
financial year ended  30 september 2013
results for year announced  9 december 2013
annual report and financial statements published 19 december 2013
annual general meeting 24 february 2014
final dividend for 2013 goes ‘exdividend’  26 february 2014
record date for 2013 final dividend  28 february 2014
last day for dividend reinvestment plan election 10 march 2014
final dividend for 2013 paid  4 april 2014
201314
interim results to 31 march 2014 announced  20 may 2014
interim dividend for 2014 goes ‘exdividend’ 10 september 2014
record date for 2014 interim dividend  12 september 2014
last day for dividend reinvestment plan election 22 september 2014
financial year ended  30 september 2014
interim dividend for 2014 paid 17 october 2014
results for year to 30 september 2014 announced 9 december 2014
final dividend for 2014 paid  3 april 2015
 these dates are provisional and may be subject to change
financial calendar treatt plc annual report and financial statements 2013   87
directors tim jones chairman and nonexecutive director
 daemmon reeve chief executive officer
 anita haines human resources director
 richard hope finance director
 jeff iliffe nonexecutive director – from 25 feb 2013
 david johnston nonexecutive director
 ian neil nonexecutive director
 peter thorburn nonexecutive director – until 25 feb 2013
  anita haines will retire as an executive director with effect from 24 february 2014 but will continue  
  to serve as a nonexecutive director thereafter
secretary anita steer
registered office northern way bury st edmunds suffolk ip32 6nl
 tel  44 0 1284 702500 email cosectreattcom
 website httpwwwtreattcom
registered number 1568937
audit committee ian neil chairman until 25 feb 2013
 jeff iliffe chairman and committee member from 25 feb 2013
 tim jones
 david johnston 
 peter thorburn until 25 feb 2013 
remuneration committee ian neil chairman
 jeff iliffe from 25 feb 2013
 tim jones
 david johnston 
 peter thorburn until 25 feb 2013
nomination committee tim jones chairman
 daemmon reeve
 jeff iliffe from 25 feb 2013
 david johnston 
 ian neil
 peter thorburn until 25 feb 2013
 
brokers investec investment banking 2 gresham street london ec2v 7qp 
auditors baker tilly uk audit llp
 abbotsgate house hollow road bury st edmunds suffolk ip32 7fa
solicitors eversheds llp  one wood street london ec2v 7qp 
 greene and greene 80 guildhall street bury st edmunds suffolk ip33 1qb
bankers hsbc bank plc 140 leadenhall street london ec3v 4ps
 lloyds banking group black horse house castle park cambridge cb3 0ar
 bank of america 5th floor  101 e kennedy boulevard tampa fl 33602
registrars capita asset services the registry  34 beckenham road beckenham kent br3 4tu
share price  treatt plc’s share price is available on wwwftcom annual and interim reports are available on the 
group’s website wwwtreattcom  
parent company information and advisers 88   treatt plc annual report and financial statements 2013   about the
group
overview
01 group strategy
02 what we do
04 highlights
05 group five year trading record
06 chairman’s statement
07 chief executive officer’s report
09 financial review
11 directors’ report
16 strategic report
governance
18 corporate governance statement
23 directors’ remuneration report
36 independent auditor’s report to  
 the members of treatt plc
financial statements
38 group income statement
39  group statement of comprehensive income
40  group and parent company statements  
of changes in equity
42  group and parent company balance sheets
43  group and parent company statement  
of cash flows
44  group reconciliation of net cash flow  
to movement in net debt
45 notes to the financial statements
74 notice of annual general meeting
86 financial calendar
87 parent company information and advisers
treatt is a worldleading  
innovative ingredient solutions 
provider for the flavour fragrance 
and consumer goods industries
t reatt places great emphasis on investing resources into developing firsthand 
knowledge and relationships with growers and suppliers to ensure a sustainable  
fair and rewarding future for all its stakeholders investors customers growers  
and staff – across the globe
the group has manufacturing sites on three continents with sales offices in the  
uk usa france and china our manufacturing sites are certified to the global  
food safety initiative gfsi approved standard which serves as a testament of  
our commitment to quality and safety  and allows t reatt to supply across the globe
by developing innovative solutions for multinational customers and providing 
unparalleled customer service t reatt continues to create outstanding value for  
both its customers and its shareholders treatt plc
annual report and  
financial statements 2013
a world of 
difference
in the world of ingredient solutions  
we’re at the core of product innovation
treatt plc  
northern way  
bury st edmunds  
suffolk ip32 6nl uk
tel 01284 702500   
fax 01284 703809 
email enquiriestreattcom
wwwtreattcom
wwwearthoilcom
treatt plc annual report and financial statements  2013


Summary:
 treatt plc annual report and financial statements 2013   07
chief executive officer’ s  
report
overview
treatt has had a good year with profit before exceptionals up by 23 
adjusted earnings per share 26 higher and net debt 36 lower 
than a year ago and i would like to begin by thanking my colleagues 
throughout the group for their endeavours and engagement which 
has enabled us to report such a pleasing set of figures our new 
strategy which has been clearly communicated throughout the treatt 
organisation has been the central core to our success colleagues 
are very clear about what treatt is and the values we stand for with 
greater focus clarity and cost control as central pillars to our strategy 
it has enabled treatt to begin the necessary path of preparing our 
business for the next stage of our growth as an innovative ingredient 
solution provider the year has been exciting as well as challenging 
and i have been delighted to see so many colleagues flourishing 
and contributing to the business in a wide variety of ways creating 
the environment for colleagues to succeed is very motivating for me 
personally and our work on this continues 
strategy
as our strategy further beds in to treatt and we look to the future we 
are building a sound platform to progress from 
through greater focus and meaningful engagement with customers 
who can bring treatt long term sustainable value we will create 
opportunities of consequence with products that excite customers 
and make them want to engage with us 
‘one treatt’ strategy for growth
our strategy is clear  to grow group profitability and margins in the 
flavour fragrance and consumer goods markets through
in addition to growth a companywide culture of cost control is an 
important aspect of our strategy and has encompassed everything 
from energy savings to process improvements from reduction in 
global freight costs to savings on departmental consumables 
our new strategy is 
the central core to 
our success
daemmon reeve
chief executive officer
sales prospects
a key aspect of growing sales is retention of existing customers 
with acute focus on the overall value to the group our sales team is 
incentivised to both retain as well as grow our business by focussing 
on those accounts where meaningful opportunities are evident we 
increase our prospects and aligning our technical resources with 
those opportunities maximises our chances of success  and as part 
of this we are currently working on a number of exciting opportunities 
with major beverage companies
raw material risk management
the volatility of raw material prices and their availability continues 
to present challenges for the group but the proven experience 
expertise and innovation of our global procurement team has enabled 
treatt to mitigate the extremes of these impacts empowerment of 
our team to move nimbly and authoritatively in markets also provides 
treatt with an important competitive advantage 
our most significant raw material orange oil has seen prices 
reaching highs of more than double the previous forty year peak and 
a far greater level of volatility in the last three years than had been 
the case previously the potential therefore exists for revenues on  
most notably  some lower margin aspects of our citrus ingredients 
business to have an effect on the top line performance of the group 
as longstanding treatt followers will be aware consequently in the 
short term the leadership team have a greater focus on contribution 
margin as opposed to solely focusing purely on sales as a better 
indicator of the success of our strategy
the treatt brand
to ensure clarity for our customers we are marketing our business 
as treatt the treatt brand is trusted by our global customer base 
as being synonymous with exceptional quality and outstanding 
service whilst the legal entities of r c treatt and treatt usa remain 
the focus and the branding of the business will continue to be built 
around one treatt this is reflected in our new website and can 
also be seen at the trade exhibitions we attend around the globe 
a single branding message ensures clarity for our customers and 
supports our strategy of operating as one holistic treatt business it 
also enables us to globalise key departments in order to maximise 
synergies and strengthen our customer offering due to its unique 
offering as a supplier of specialist cosmetic ingredient solutions the 
earthoil brand will continue to flourish as a separate distinct and 
highly valued brand in its own right
aligning our organisation
our procurement sales it and finance departments are now truly 
global and the resultant benefits in the form of cost savings and the 
synergistic effect of teams working with clarity of direction and greater 
alignment are tangible the fully integrated global sales structure 
enables greater focus on multinational flavour fragrance and fmcg 
customers our marketing will increasingly be focused which has 
proven to be very effective this year with increasing press coverage 
in our targeted markets further improvements in the organisational 
focus and structure of the group will be taking place in 2014 
focused 
sales 
approach
cost 
control 
concentrated 
product 
range
excellent 
quality and 
service 
well motivated 
and 
experienced 
workforce 
marketdriven 
new product 
development
increasing 
group 
margins  08   treatt plc annual report and financial statements 2013
chief executive officer’s report
continued
we have made good progress in developing positive cultural change 
and enhancing team spirit within the business and this work central 
to our strategy will continue 
innovation
it is vital that our colleagues feel empowered fulfilled and motivated in 
their roles within the group and we are taking further steps to create 
an environment where cutting edge innovation is both fostered and 
thrives a significant aspect of this is that teams are working closer than 
ever across the group and with this much improved communication 
new product development and innovation is being marketdriven 
to create more innovative products with greater market potential 
members of our technical team are increasingly visiting customers 
with our sales staff to provide essential technical support engaging 
with counterparts in key accounts to get firsthand feedback from 
customers on our new innovations enables rapid fine tuning to meet 
customer needs
to illustrate using just one example of our innovation efforts we 
have developed a range of products targeted towards wellness 
applications the arrival of stevia and other natural nonnutritive 
sweeteners in the marketplace stimulated us to take another 
look at how our treattaromes might be used in combination with 
natural sweeteners our team found that a certain mixture of our 
treattarome
®
 essences provided sweet flavour notes and taste 
experience and importantly masked the lingering stevia taste with 
mellow softness as we looked further into the different products in 
which stevia is used we perceived a need for products that were 
more closely tailored to the needs of the application carbonated soft 
drinks needing a different profile to still applications for example and 
other specialised versions were developed to broaden the scope of 
our product offerings
enhancing customer value
we have engaged with our customers at all levels to determine 
how treatt’s products can enhance customer value if we delight 
customers they return and importantly turn to us when they have 
new requirements building trust to build business has been a key 
element of our success our strategy enables our teams to build and 
firm relationships for the long term
treatt usa and r c treattearthoil have built on last year’s success 
and continue to enjoy british retail consortium ‘a’ grade status with 
fewer and fewer areas for improvement identified
r c treatt
much work has taken place in the uk to modernise business 
practices to derive efficiency and improve productivity this work 
continues into the current fiscal year management and their teams 
taking ownership of business improvement processes has been 
particularly effective and the level of crossdepartmental collaboration 
is high focus on key areas of the business such as addedvalue 
specialty manufactured chemicals has delivered pleasing results at 
accounts which provide sustainable value for the business lower 
performing products have been delisted from our offering to enable 
greater focus on those products which bring more sustainable value 
to our business and this work continues engagement with the 
strategy has been and continues to be very high
a review of treatt’s uk site has been under consideration by the 
directors for some time the board and operations management 
are working closely to ensure that we make the right investment 
decisions at the right time for the future of our business in order to 
ensure we have a fit for purpose uk manufacturing facility to improve 
efficiency across the business and drive value for our shareholders for 
the long term this review currently remains a work in progress and 
no decisions have yet been made
treatt usa
treatt usa had a year of consolidation with an anticipated tougher 
year in key orange oil markets overstocking of ingredients at some 
accounts and underperforming beverages at others led to lower than 
anticipated sales of specialty nonorange product ranges negatively 
affecting profitability however optimism levels remain healthy in 
the business with relationships with key accounts being in good 
shape good progress is also being made with some potential key 
accounts which are receiving much attention in the business the 
sales opportunity pipeline looks promising and this should translate 
into meaningful opportunities for the business in the next year or two
earthoil
i am pleased to report that earthoil the group’s niche cosmetic 
ingredients business had a record year and its third successive year of 
profitability again the strategy guided the meaningful progress made 
with a greater focus on those customers who can bring sustainable 
business receiving increased focus and technical support important 
wins at new material accounts also enabled the business to perform 
well in february we appointed our new director of african operations 
leopold kerama who is driving further efficiency improvements in our 
kenyan manufacturing facilities as we develop our business 
sustainability
i was privileged to visit our earthoil facility in kenya in august to witness 
first hand not only the excellent work being done by our teams but also 
the responsibility it shows towards the local community by assisting 
the farmers to organise themselves into a society the kenya organic 
oil farmers association so that they are properly represented and 
able to carry out communal projects through fair for life certification 
we pay a fair trade premium for the products we purchase into a 
community fund to be used for projects as decided by the farmers 
and workers themselves so far this has funded scholarships for 
seven children from poor families to attend secondary school and 
there are plans afoot to build a social hall where farmers and workers 
can carry out educational and social activities
outlook
whilst the macroeconomic situation is still fragile in many corners of 
the globe we remain optimistic that the realignment and refreshment 
of our business through our strategy coupled with healthy levels of 
consumer goods innovation most notably in the beverage sector 
will enable treatt to continue on its path of progress with excitement 
and renewed determination challenges remain and we will not be 
complacent in this regard but we look forward with confidence as 
a business importantly we have an excellent team empowered 
motivated and equipped to deliver the results
daemmon reeve
chief executive officer
key points
new strategy with greater focus clarity and cost control 
aimed at accelerating underlying revenue growth  
retention of meaningful existing business and maximising 
prospects for growth
creating an environment for effective innovation
enhanced customer value for improved profitability