wwwsynthomercom
annual report 2012 contents
overview
01  financial and commercial highlights
02  our products
03  our markets
04 creating value – our strengths
05 creating value – our strategy
06 where we are
07  chairman’s statement
business review
09  chief executive ofﬁcer’s report
13  financial review
15  corporate social responsibility report
governance
26  directors and advisers
27  report of the directors
30  corporate governance
35  directors’ remuneration report
40  statement of directors’ responsibilities
group ﬁnancial statements
41  independent auditor’s report
42 consolidated income statement
43  consolidated statement
of comprehensive income
43 consolidated statement
of changes in equity
44  consolidated balance sheet
45  consolidated cash ﬂow statement
46  notes to the consolidated
ﬁnancial statements
company ﬁnancial statements
79  independent auditor’s report
80  company balance sheet
81  notes to the company
ﬁnancial statements
other information
89  principal subsidiaries and joint ventures
90  fiveyear ﬁnancial summary
synthomer is a specialty chemical
company and one of the world’s
leading producers of aqueous
polymers
using our innovative technology
we produce sophisticated
formulations for thousands
of customers in a diversity
of industries from coatings
and construction to healthcare
and automotive
we help our customers to create
marketleading products ranging
from adhesives and sealants to
medical gloves carpets and paints
which are used every day all
around the globe
we have built a strong platform for
growth through our leading market
positions in europe and expansion
into emerging markets which
is underpinned by our exposure
to global megatrends including
an increasing demand for
environmentally friendly technology overview
01 synthomer plc annual report 2012
financial and commercial highlights







®


total sales
£1 1118m
proﬁt before taxation
£981m
earnings per share
220p
increase in proﬁt
before taxation
1 6
dividend per share
55p
change in dividend 
per share
57
underlying 
performance a proforma a ifrs
as reported
2012
£m
2011
£m
2012
£m
2011
£m
2012
£m
2011
£m
continuing operations
total sales 11118 1 1 168 11118 12688 11118 1 1 168 
ebitda note 33 1274 1152 1274 1322 1274 1152 
operating proﬁt 1090 964 1090 1097 749 544 
proﬁt before taxation 981 848 981 960 623 395 
earnings per share 220p 188p 167p 98p 
dividends per share note 10 55p 35p 55p 35p 
net borrowings b 1558 1643 1415 1561 
a  underlying performance excludes special items as shown on the consolidated income statement 2011 proforma includes the underlying 
performance of polymerlatex for q1 2011 with an estimated interest costs of £21 million
b see page 44 02 synthomer plc annual report 2012
our products
synthetic latex
consists of three principal product 
families styrene butadiene rubber sbr 
manufactured in germany and italy nitrile 
butadiene rubber nbr manufactured in 
italy and malaysia and high solids styrene 
butadiene rubber hssbr produced in 
germany hssbr is shown in specialties 
in the chart
dispersions
consists of primarily vinyl and acrylic 
based emulsion polymers used in a wide 
range of applications including in the 
coating construction adhesives and 
textile industries these products are 
manufactured at our facilities in germany 
italy uk south africa middle east 
malaysia and vietnam
compounds
these products are specially formulated 
at our plants in the uk netherlands and 
egypt using sbr latex hssbr latex 
natural rubber latex and a wide range 
of other functional materials
specialties
comprise a number of specialty polymers 
mainly non aqueous including polyvinyl 
alcohol liquid polybutadiene high solid 
sbr latex and chloroprene specialties 
also includes inorganic products based 
on copper tin and iodine from the group’s 
one remaining nonpolymer business
sales by product
a latex – 49
b specialties – 24
c compounds – 5
d dispersions – 22
a nbr – 34
b sbr – 66
a
b
c
d
a
b
no1
nbr latex
producer globally
no1
high solids sbr 
latex producer 
globally
no1
sbr latex 
producer in europe 03 synthomer plc annual report 2012
overview
03 synthomer plc annual report 2012
our markets
a western europe – 55
b eastern europe – 4
c north america – 4
d asia – 28
e africa  middle east – 8
f rest of world – 1
a western europe – 55
b eastern europe – 4
c north america – 4
d asia – 28
e africa  middle east – 8
f rest of world – 1
sales by market
sales by destination
a construction  coatings – 24
b  health  protection – 20
c  carpet compounds  foam – 19
d  paper – 17
e functional polymers – 13
f  performance polymers – 7
a
b
c
d
e
f
a
b c
f
d
e
health  protection
medical clean room and industrial 
gloves medical devices eg catheters 
condoms and other dipped latex goods
paper
coated paper and paperboard 
ﬁnecoated paper lightweight coated 
paper food packaging and other 
specialty paper grades
construction  coatings
construction 
cement and mortar modiﬁcation 
bitumen modiﬁcation concrete repair 
systems and plasticisers bonding 
aids primers ﬂooring and construction 
adhesives liquid applied membranes 
ﬂexible roof coatings sealants 
and primers
coatings
acrylic and vinyl acetate copolymers 
for walls interior  exterior gloss
semigloss emulsion paints plasters
textured ﬁnishes ﬂexible wall coatings 
wood paints and stains anticorrosion 
paints industrial coatings and water
based ﬁllers
carpet compounds  foam
binding and backing of tufted and 
other carpets foam backed carpets 
automotive and artiﬁcial grass foams 
for mattresses pillows and shoes
functional polymers
nonwoven fabrics insulation textile 
coatings printing gaskets masking 
tapes specialty nongraphic papers 
abrasives tyre cord pressure 
sensitive adhesives packaging 
and wood adhesives
performance polymers
lithene
®
 – for various automotive 
applications in electrical insulation and 
sound damping alcotex – polyvinyl 
alcohol used as a stabilising material 
in the pvc polymerisation process 
polyvinyl acetate – for solvent 
adhesives polyester resins and 
composites inorganic nonpolymer 
specialties – for catalysts ﬂame 
retardants and other niche applications
no3
acrylic dispersion
producer in europe
no1
acrylic and vinylic
dispersion producer
in the middle east
37
of total sales to
emerging markets 04 creating value – our strengths
innovative technology




application diversity 



manufacturing excellence




global footprint




 05 synthomer plc annual report 2012
overview
creating value – our strategy
strong market positions


drive emerging market 
growth






investing in knowledge 
and innovation






actions in 2012 actions in 2012


® ®
ultra will drive market share ultra will drive market share
actions in 2012 actions in 2012


emerging markets emerging markets

actions in 2012 actions in 2012




supported by ‘green’ credentials supported by ‘green’ credentials 06 synthomer plc annual report 2012
where we are
europe  north america 63 of sales
63
13 manufacturing plants
2 rd centres
 sales by destination
asia  rest of world 37 of sales
37
8 manufacturing plants
1 rd centre
key   plant location   sales ofﬁce   rd centre   head ofﬁce
locations
china 01 shanghai synthomer chemical co ltd
guangzhou  shanghai
egypt 02 synthomer sae 10th of ramadan city
england 03
04
04
05
06
07
synthomer uk ltd batley
synthomer uk ltd harlow
synthomer plc harlow
synthomer uk ltd ossett
synthomer uk ltd stallingborough
william blythe ltd accrington
finland 08 eka synthomer oy oulu
germany 09
10
11
synthomer gmbh langelsheim
synthomer deutschland gmbh marl
synthomer deutschland gmbh worms
italy 12 synthomer srl filago
malaysia13
14
revertex malaysia sdn bhd 
synthomer sdn bhd kluang  kuala lumpur
synthomer sdn bhd 
quality polymer sdn bhd pasir gudang
netherlands 15
16
synthomer bv hasselt
synthomer bv oss
saudi arabia 17 synthomer middle east company dammam
south africa 18 synthomer pty ltd durban
uae 19 synthomer sales gmbh dubai
usa 20 synthomer llc atlanta
vietnam 21 synthomer vietnam co ltd ho chi minh city















03
07
06
05
04
15
16
10
09
11
12
europe
01
02
20
18
19
17
08
21
13 14
rest of world 07 synthomer plc annual report 2012
overview
overview
in a challenging environment synthomer delivered a resilient set of results 
in 2012 achieving a second successive year of record proﬁt before tax 
this was achieved despite poor economic conditions in europe weakening 
of the euro against sterling and challenging trading conditions for our asian 
nitrile latex business where additional capacity and competitive behaviour 
impacted our performance
2012 was the ﬁrst full year of trading since the transformational acquisition 
of polymerlatex in march 201 1 and the completion of our divestiture 
programme the group beneﬁted from increased scale an enhanced 
product portfolio stronger market positions and greater efﬁciencies 
delivered from the polymerlatex integration to reﬂect the group’s 
subsequent transformation into a focused specialty chemical company 
we changed the group’s name to synthomer plc towards the end of 
the year we trade under the synthomer brand around the world and 
the name is widely recognised and respected by our customers 
full year performance 
during the year group sales declined by 12 to £11118 million 
201 1 proforma £12688 million volumes were 5 lower than 
the previous year as a result of weaker european demand 
operating proﬁts were broadly ﬂat at £1090 million 201 1 proforma 
£1097 million the beneﬁt of synergies and margin management offset the 
adverse impact of the poor economic conditions in europe the weakness 
in the euro and the challenging trading conditions in our nitrile latex business
group proﬁt before tax was £98 1 million 201 1 proforma £960 million 
despite the economic difﬁculties of recent years this is the 6th consecutive 
year that we have increased underlying group proﬁt before tax
earnings per share were 220p 201 1 underlying 188p an increase of 
17 with the beneﬁt of the ﬁrst whole year’s trading since the polymerlatex 
acquisition in march 201 1
strategy
we continue to focus on being a leading producer of aqueous polymers 
our strategy is to deliver growth through geographic expansion in emerging 
markets where megatrends including population growth urbanisation 
and increasing wealth are driving demand for our products across the 
region in these highgrowth regions we are able to beneﬁt from the 
leading technologies rd and manufacturing capabilities which we have 
developed in european markets to give us a strong competitive advantage 
in new geographies
our european business remains highly cash generative allowing us to 
invest in emerging market opportunities our new 70000 tonne nitrile latex 
capacity expansion in pasir gudang malaysia which was completed at 
the end of the year and was commissioned during january 2013 represents 
one such opportunity we anticipate having sbr latex manufacturing 
capability in malaysia from the middle of this year something we have 
been targeting for several years we continue to look for further investment 
opportunities to expand our footprint in asia
integration process and synergies
the integration of polymerlatex is now essentially complete synergies 
delivered in the year were £19 million a yearonyear improvement of 
£16 million over the £3 million delivered in 201 1 at the beginning of 
2012 we committed to a higher synergy target of £25 million and we 
remain conﬁdent of delivering the balance of the synergies in 2013 
balance sheet
net debt was slightly lower than the start of the year at £156 million 
this represents a net borrowing to ebitda ratio of 12 which the board 
considers to be a prudent leverage position 
dividend
the board has recommended a ﬁnal dividend of 33p per share making 
a total dividend for the year of 55p the board committed to this level of 
dividend in our interim results announcement on 28 august 2012 together 
with an undertaking to move the dividend cover to three times by 2015 
the full year dividend of 55p represents an increase of 57 over the 
previous year
safety health and environment
the group is absolutely committed to the continuous improvement of its 
performance in respect of safety health and the environment i am pleased 
that almost all of the metrics that we measure in this area showed good 
improvement over the prior year
people
the group has achieved a great deal in recent years with its transformation 
to a focused specialty polymers business none of this could have been 
achieved without the hard work and dedication of the group’s employees 
and i thank all of them for their support and hard work during this period
board composition
we have strengthened the board this year with a number of appointments 
just jansz and jinya chen respectively bring extensive knowledge of 
the chemical sector and asian markets and operations ishbel macpherson 
who joined the board in may 2012 has indicated that in order to focus in 
other areas she does not intend to stand for reelection and i should like 
to thank ishbel for her contribution during her time with us
current trading and outlook
we have made a solid start to the year nevertheless we expect the 
macroeconomic environment in europe to continue to result in challenging 
trading conditions through 2013 our expectations for the asian nitrile 
market remain unchanged with improvements expected from the end of 
this year with our nonnitrile capacity in asia fully utilised we will continue to 
invest in capacity in emerging markets to build our platform for future growth 
beyond 2013 we expect demand growth in our emerging markets to 
remain strong and overall the board remains conﬁdent in the group’s 
longterm prospects and strategy
neil johnson
chairman
14 march 2013
chairman’s statement 08 synthomer plc annual report 2012 08 synthomer plc annual report 2012
innovation – lithene
®
ultra
during the year the group made a substantial 
investment to improve the performance of its 
lithene
®
 products for our customers lithene
® 
liquid polybutadienes are produced at synthomer’s 
stallingborough uk plant lithenes are sold 
globally for use in a diverse range of applications 
including automotive sealants mould release 
products coating additives rubber modiﬁers 
electrical encapsulants and fragrance gels 
lithene
®
 products are part of the group’s 
performance polymers business segment 
the new improved products are being sold under 
the lithene
®
ultra brand product characteristics 
of the new range of products include low voc 
content low odour and in certain application 
areas the new range can deliver performance 
improvements such as improved curing and 
higher strength
automotive sealants
economy safety and reﬁnement are key 
drivers in automotive design lithene
®
ultra 
products provide an unseen contribution 
to all of these when formulated into 
high performance sound deadening 
and structural sealants their unique 
polymer structures form the basis of 
custom formulations able to exceed 
demanding global automotive standards 
while reducing vehicle weight and 
lowering cabin air emissions
rubber modiﬁcation
synthetic rubbers are an important 
component in many cables for demanding 
applications such as power transmission 
and oil well control systems lithene
®
ultra 
polybutadienes are designed to work 
in these specialised rubbers to enhance 
physical properties ensuring performance 
and durability in increasingly harsh 
operating environments
printing plates
lithene
®
 products are a major 
component in many flexographic 
printing plates contributing to print 
quality and plate durability with the 
constant growth in flexographic printing 
applications from labels to high quality 
ﬂexible packaging across all ink 
technologies the wide range of 
lithene
®
ultra products provides global 
printing plate manufacturers the ﬂexibility 
to design advanced plate solutions
lithene lithene
® ®
 plant stallingborough uk plant stallingborough uk 09 synthomer plc annual report 2012
overview
2012 was the ﬁrst full year of trading since the polymerlatex acquisition 
in 201 1 the group is now a larger more focused specialty chemical 
company with the scale and capability to grow in chosen markets 
we are now focused on being one of the world’s leading aqueous polymer 
producers with our market leading positions in europe and expanding 
business in asia enabling us to add value to our customers and generate 
returns for our stakeholders 
during the year we largely completed the integration work associated with 
the acquisition of polymerlatex synergies from that integration reached 
approximately £19 million in the year a £16 million yearonyear increase 
a further £6 million of annualised synergies are anticipated in 2013 to reach 
a total of £25 million
two years into the integration the broader business beneﬁts are very clear 
we now have a stronger management team and enhanced capability 
in the areas of product development and process knowhow combined 
with a more modern and cost effective asset base and stateoftheart 
rd facilities
business performance 
2012 was a very challenging year from a trading perspective demand in 
europe was weak on the back of the eurozone crisis and we saw volume 
reductions of 8 in our europe  north america ena segment however 
we compensated for the volume declines through higher unit margins 
which we continue to manage actively to optimise proﬁtability the weaker 
euro also affected the translation of european results into sterling with an 
adverse effect of £55 million on operating proﬁt synergy delivery was 
predominantly in europe and overall therefore operating proﬁt in our 
ena segment was strongly ahead of 201 1 
in asia and rest of world arw our nonnitrile businesses delivered very 
good growth with ebit up 20 in nitrile excess capacity and consequent 
aggressive pricing behaviour by regional competitors served to substantially 
lower results in our interim results we stated our expectations that we 
do not expect any substantive improvement in these conditions for 
12 18 months since then the market has stabilised and is performing 
broadly in line with our expectations at the interim results and we continue 
to expect improvements towards the end of 2013 
looking further ahead we and our customers continue to expect to see 
demand growth of 10 15 over the coming years for nitrile latex with our 
leading share of approximately one third of the market and our position as 
the only current local supplier we continue to anticipate substantial future 
proﬁts from this business as the environment improves
we continued to invest in our business during the year with net capital 
expenditure in the year of £38 1 million up from £219 million in 201 1 
alongside the capital invested to facilitate site closures as part of the 
synergy delivery we have been investing heavily to support the future 
organic growth of the business we completed a substantial expansion 
of our nitrile facility in pasir gudang malaysia and ongoing investment 
in the same facility will enable us to produce sbr to sell into the region – 
an objective we have been pursuing for several years and which will 
provide us with enhanced operational ﬂexibility in europe we have invested 
in our lithene
®
 business to improve our product offering and to launch 
our new lithene
®
ultra range of products we also recently commenced 
an investment to support growth in our specialty alcotex business – 
a business where we are global no 1 and product manufactured in 
the uk is shipped to pvc manufacturers around the world
we have had a number of successful product launches during the year 
and we remain very focused on tailoring and deploying our existing 
western technology to support growth in emerging markets – particularly 
in the areas of construction  coatings and functional polymers
raw materials as in recent years remained volatile prices strengthened 
through the ﬁrst few months of the year before easing back and were 
relatively stable over the last quarter this pattern was similar to what we 
saw in 201 1 we continue to manage these price movements effectively 
through our general approach to margin management
divisional performance 
we manage the business in two segments ‘europe  north america’ 
ena and ‘asia  rest of world’ arw the reported results are on an 
‘origination basis’  meaning the segmental sales and operating proﬁts are 
reported based on where the product is manufactured we export many 
specialty products from europe to asia looking at sales on a destination 
basis europe  north america comprises 63 of group turnover with 
asia  rest of world accounting for 37
europe  north america ena
7969
7777
2012 2012
2011
underlying – as reported
sales £m
980
731
2012 2012
2011
operating profit £m
7969
9130
2012 2012
2011
underlying – proforma
sales £m
980
855
2012 2012
2011
operating profit £m
8259
9008
2012 2012
2011
volumes ktes
  underlying performance excludes special items as shown on the consolidated 
income statement 
  reconciliation of underlying performance to proforma results is provided in the 
ﬁnancial review
chief executive ofﬁcer’s report
business review 10 synthomer plc annual report 2012






investing in high growth markets






















 11 synthomer plc annual report 2012
business review
operating proﬁt in our ena business was ahead by 15 despite volumes 
for the year being down 8 demand generally softened in the second half 
of the year as the eurozone crisis continued to affect the region demand 
was weakest for sales into the construction market this particularly 
impacted our construction  coatings and functional polymers 
business units
ena beneﬁted from synergies with the £16 million yearonyear 
improvement attributable principally to europe but this was somewhat 
offset by the translation effect of the weaker euro against sterling which 
adversely impacted operating proﬁt in ena by £55 million as part of the 
synergy delivery we announced the closure of three plants in ena two were 
closed during the course of 201 1 the third plant in batley uk is expected 
to close in the second quarter of 2013 when capital investment to facilitate 
this is concluded at our stallingborough dispersions facility this will bring 
to a close the rationalisation of the european manufacturing network 
there were multiple product launches in ena during the year these 
included several new pressure sensitive adhesive grades new grades for 
textile print adhesives and a new thermomouldable carpet latex product 
we also developed a new range of lithene
®
 products marketed under 
the brand of lithene
®
ultra which we expect to see good growth from 
during 2013
asia  rest of world arw
3149
3391
2012
2011
2012
2011
underlying – as reported
sales £m
191
321
2012
2011
2012
2011
operating profit £m
3149
3558
2012 2012
2011
underlying proforma
sales £m
191
330
2012 2012
2011
operating profit £m
3477
3337
2012 2012
2011
volumes ktes
  underlying performance excludes special items as shown on the consolidated 
income statement 
  reconciliation of underlying performance to proforma results is provided in the 
ﬁnancial review
operating proﬁt in our arw segment was lower by 42 nonnitrile 
businesses in arw which are predominantly in our construction  
coatings business unit were strongly ahead in 2012 with operating proﬁt 
up by 20 as previously highlighted our nitrile business was affected by 
aggressive pricing in the market driven largely by excess manufacturing 
capacity overall volumes in arw were ahead by 4
since we reported on the turbulence in the nitrile market at the half year the 
business has generally stabilised and developed as we expected although 
we are not anticipating any substantive improvement until towards the end 
of 2013 we continue to invest in this high growth sector and at the end 
of 2012 we completed our 70000 tonne expansion of our nitrile facility 
in pasir gudang we also commenced work on converting one of our 
nbr lines to facilitate sbr production which we will use to supply up to 
70000 tonnes of sbr into asia
a key part of the group’s strategy is to add value through our technology 
and knowhow by deploying it into asia and other emerging markets 
we had several new product launches in the region in 2013 these included 
additives for polyester resin moulding a high water resistant wood adhesive 
product and an improved self crosslinking nitrile latex grade we also have 
two major product launches in the nitrile latex sector scheduled for 2013
adrian whitﬁeld
chief executive ofﬁcer
14 march 2013
chief executive ofﬁcer’s report
continued 12 synthomer plc annual report 2012
leveraging technology in emerging markets
a key part of the group’s strategy is to exploit its 
technology into applications in emerging markets 
in line with megatrends affecting these economies 
alongside superior performance and quality 
this includes the trend to “green” products with 
the elimination of apeo and formaldehyde from 
products in these regions these include products 
sold under our plextol revacryl and emultex trade 
names and a range of customer speciﬁc grades 
in south east asia synthomer now offers products 
that can be formulated to meet the most demanding 
regional environmental standards such as the 
malaysian ecolabel and the singapore green label 
in all interior and exterior coating applications 
new offerings that use synthomer core technology 
are continually in development with products such 
as the recently launched revacryl 4370 for premium 
interior paints
markets in south africa are also moving to more 
environmentally friendly coating systems a growing 
application is the use of gypsumbased plasters that 
are applied over conventional plasters to achieve an 
ultrasmooth ﬁnish this requires that a pigmented 
plaster primer be applied over it to ensure adhesion 
of subsequent waterbased topcoats traditionally 
these primers have been based on solventbased 
products as conventional waterbased primers 
cannot meet the performance requirements 
synthomer has developed revacryl 8000 
an emulsiﬁed system that can be formulated into 
waterbased coatings using conventional thickeners 
and can eliminate the use of white spirits 
this innovative solution has allowed access to 
this growing market sector with a product that 
both matches the performance of solvent 
systems whilst delivering a signiﬁcantly reduced 
environmental burden
revacryl 8000 replaces solventbased 
systems in plaster primers
revacryl 4370 is an apeo free styrene 
acrylic polymer dispersion with a wide 
range of paint applications
plextol 4151 is a ﬁne particle sized 
apeo free acrylic polymer dispersion 
for premium high durability 
exterior paints
nbr latex plant pasir gudang malaysia nbr latex plant pasir gudang malaysia dispersions plant dammam saudi arabia dispersions plant dammam saudi arabia 13 synthomer plc annual report 2012
business review
income statement
the acquisition of polymerlatex in march 201 1 substantially changed 
the size of the group to allow a meaningful comparison of the results 
for 2012 with 201 1 the table below shows proforma results by adjusting 
the underlying performance of the group in 201 1 to include results of 
polymerlatex for q1 201 1 and to allow for an estimated interest cost of 
£2 1 million for that quarter the underlying proforma results provided 
the most meaningful comparison of yearonyear performance
proforma results 2012 2011
underlying
£m
underlying
£m
polymerlatex
q1 2011
£m
proforma
£m
group
sales
11118 11168152012688
operating proﬁt
1090 9641331097
proﬁt before tax 981 848112960
europe  
north america
sales
7969 777713539130
operating proﬁt 980 731124855
asia  row
sales
3149 33911673558
operating proﬁt 191 32109330
unallocated
operating proﬁt 81 88 – 88
sales operating proﬁt and proﬁt before tax – 
underlying non proforma
total sales decreased by 04 to £11118 million with underlying volume 
declines and currency translation effects broadly offset by the beneﬁt of 
one extra full quarter of turnover from the polymerlatex acquisition in the 
year group operating proﬁt increased by 13 mainly due to the extra 
quarters proﬁt from the polymerlatex acquisition whilst proﬁt before tax 
increased by 16 to £98 1 million on an underlying non proforma basis
tax and eps – underlying non proforma
the group’s underlying tax rate of 22 201 1 23 remains low reﬂecting 
the beneﬁts of pioneer status extended tax holiday on our nitrile business 
in malaysia and a zero rate in the uk the group does not expect to pay 
tax in the uk for the foreseeable future due to brought forward losses and 
deﬁcit contributions to the uk pension scheme which are tax deductible
proﬁt attributable to minority interests was £18 million 201 1 £16 million
as a result overall the underlying earnings per share for 2012 was 220p 
compared to 188p per share for 201 1 this is an increase in underlying 
earnings per share of 17 
dividend
the group committed to a full year dividend of 55p for 2012 at the time of 
the interim announcement with an interim dividend of 22p a ﬁnal dividend 
of 33p per share is therefore recommended payable on 5 july 2013 to 
shareholders on the register on 7 june 2013 the total dividend of 55p 
represents an increase of 57 over 201 1
special items and ifrs
the group reports its ﬁnancial results according to international financial 
reporting standards ifrs however to provide a clearer indication of the 
group’s underlying performance a number of special items are split out 
and shown in a separate column of the consolidated income statement 
due to their oneoff or noneconomic nature and are excluded from the 
comments on underlying performance above and throughout the chief 
executive’s review of business performance special items comprise
 restructuring costs associated with delivering the synergy targets for 
the polymerlatex acquisition of £67 million £60 million cash costs and 
£07 million noncash costs at the time of the acquisition the group 
announced an estimated total cash expenditure of approximately 
£20 million to deliver these synergies cash costs of £158 million 
were expensed in 201 1 together with £44 million of noncash costs 
 various crosscurrency and interest rate swaps for hedging purposes 
which involve maturities of up to ﬁve years ifrs requires that where the 
strict requirements of ias39 are not met changes in the market value 
should be recognised annually in the income statement however such 
ﬁnancial instruments are maintained by the group for the length of the 
contract and over their lifetime have a fair value of nil hence the notional 
annual adjustment a loss of £17 million 201 1 loss £33 million is 
segregated from the underlying performance 
 amortisation of intangibles of £27 4 million comprising £258 million in 
the company and subsidiaries and £16 million in share of joint ventures 
ifrs acquisition accounting requires an explicit number to be placed 
on certain intangibles and amortised through the consolidated income 
statement with the balance of the excess of the purchase price over 
the physical assets being carried as goodwill which is subject to annual 
impairment testing the amortisation expense arising from this has been 
treated as a special item and will continue to be so as the associated 
intangible assets are fully amortised 
 tax credits of £17 3 million of which £86 million was in respect of the 
release of notional deferred tax associated with the amortisation of 
acquired intangibles and £16 million represented the tax relief from 
restructuring and site closure costs additionally a deferred tax asset 
of £7  1 million was recognised for the uk and has been included in 
special items 
balance sheet
goodwill decreased to £2409 million at the end of 2012 from £2447 million 
at the end of 201 1 due to translation 
acquired intangible assets which arose as a result of the polymerlatex 
acquisition decreased to £1356 million at 31 december 2012 from 
£1654 million in the prior year this movement reﬂects regular annual 
amortisation of £258 million reported in special items and currency 
translation
property plant and equipment increased to £1996 million at 
31 december 2012 compared to £1836 million at 31 december 201 1 
additions during the year comprised £403 million of capital expenditure 
net £38 1 million
the net deferred tax liability has decreased to £407 million from 
£614 million during the year the decrease is primarily due to the 
recognition of a deferred tax asset of £7  1 million in the uk the beneﬁt of 
which was reported in special items and £86 million of notional deferred 
tax associated with acquired intangibles reported in special items
financial review 14 synthomer plc annual report 2012
pensions
in the main uk deﬁned beneﬁt pension scheme the majority of investments 
are in equities all asset classes performed well over the course of 2012 
with a total return on assets excluding cash of 14 1 the yield on 
highquality corporate bonds decreased slightly during the year which 
increased liabilities the company made cash contributions to the fund 
in the year of £188 million of which £10 million is a prepayment of 2013 
contributions the overall effect of these changes was that there was a 
small decrease in the deﬁcit of the scheme which stood at £695 million 
at the end of 2012 201 1 £739 million 
an actuarial valuation for 2012 will be ﬁnalised by mid 2013 due to the 
prepayment cash contributions in 2013 are expected to be of the order 
of £5 million
the uk scheme was closed to future accrual during 2009 and there are 
no active members in the scheme
overseas net pension liabilities increased to £502 million 201 1 £440 million 
reﬂecting a lower discount rate in germany the nonuk schemes are 
primarily traditional german unfunded ‘on balance sheet’ arrangements
borrowings cash ﬂow and liquidity 
the following cash ﬂow is in the format used by management and it 
provides a clearer presentation of the movements in underlying net 
borrowings than the ifrs statement
2012
audited
£m
2011
audited
£m
underlying operating proﬁt 
before joint ventures 1041 916
movement in working capital 13 50
depreciation and amortisation
 underlying 184 188
capital expenditure net 381 219
interest paid net 113 152
tax paid 188 199
pension funding in excess of 
ias19 charge 173 110
minority interest and joint venture
cash ﬂows 32 63
operating cash ﬂow 389 437
cash impact of restructuring 114 62
acquisitions and disposals net – 3538
acquisition costs 04 44
dividends paid 153 84
net proceeds on issue of shares – 2169
exchangeother 33 113
movement in underlying borrowings 85 1009
closing underlying net borrowings 1558 1643
ebitda – management
operating proﬁt inc joint ventures 1090 964
depreciation – continuing 184 188
total management ebitda 1274 1152
  includes the release of collateral held against a guarantee that was treated 
as a working capital outﬂow in 2011
 2011 includes £81 million ebitda from the disposed pharma business
underlying net borrowings reduced during the year to £1558 million
group management ebitda increased to £127 4 million reﬂecting the effect 
of a full year ownership of polymerlatex 201 1 nine months from 1 april 
net capital expenditure increased substantially in 2012 to £38 1 million 
net £403 million gross due to organic expansion in malaysia and spend 
to facilitate the delivery of the acquisition synergies
pension funding in excess of ias19 charge of £17 3 million includes a 
£10 million prepayment to the uk pension fund this will result in lower 
cash contributions in 2013
underlying working capital outﬂow for the year was £13 million
financing and liquidity
as at the end of 2012 the group had the following drawn term over one 
year to maturity funding in place
£m
euro denominated bank loan maturing march 2015 1454
us private placements 569
less associated currency hedges and costs 80
total 1943
this compares to a net borrowing position of £1558 million the group 
had an undrawn £60 million revolving loan facility maturing march 2015 
and a net cash position cash and cash equivalents less short term 
overdrafts and factoring debt of £329 million
in arriving at the group’s net borrowings £204 million of nonrecourse 
off balance sheet factoring has been added back as a special item 
excluding this adjustment net borrowings would have been £1354 million 
this factoring facility expired at the end of december 2012 and settled 
over january and february 2013 – though as this is adjusted back into 
net borrowings its termination has no impact on the group’s stated 
net borrowings
underlying net borrowings to ebitda the group’s key leverage metric 
was 12 at the end of 2012 201 1 12
david blackwood
chief financial ofﬁcer
14 march 2013
financial review
continued 15 synthomer plc annual report 2012
business review
introduction – she performance and achievements during 2012
2012 was another year of signiﬁcant progress for synthomer plc in 
environmental and safety performance on nearly all of our environmental 
metrics the group improved again and continues to comfortably beat the 
targets we set for ourselves in 2005 for our environmental performance 
the consolidation of group operations following the acquisition of 
polymerlatex in 201 1 has given signiﬁcant environmental gains this is 
most notable in the group’s emissions of volatile organic compounds 
vocs which fell sharply by over 26 on a per tonne of production basis 
during the year 
the group is also very pleased to be able to report that the ‘over 3day’ 
accident rate approximately halved in 2012 to give the group its best ever 
performance for personal safety the fall in the accident rate meant that our 
employees had a chance of being injured at work of less than one quarter 
of the rate in 2000 two sites had notable achievements oulu in finland 
achieved 4000 days 1 1 years without a single day lost due to an accident 
and the nbr pasir gudang site in malaysia achieved 1000 days especially 
remarkable given the number of contractors on site for the major expansion 
projects the improvement in the accident rate was achieved by a major 
programme of employee engagement during the year culminating in 
a groupwide safety week in october this programme was strongly 
supported and indeed led by worker’s councils and site safety committees 
throughout the company with regional meetings for safety representatives 
to share experiences and help drive improvement on all our sites 
only one key measure did not improve in 2012 water use per tonne of 
production which had fallen by 265 in 201 1 rose by 27 in 2012 
despite the increase usage per tonne is easily the second best result for 
synthomer and is still nearly 25 below the 2010 ﬁgure energy use in the 
year fell again by 35 compared to 201 1 and this was accompanied by a 
fall in carbon dioxide emissions of 46 per tonne of production as noted 
above the improvement in energy performance was accompanied by a 
sharp reduction in the releases of vocs which fell by 21 in absolute terms 
during the year together the improvements in energy consumption and 
voc release meant that the group reduced its releases of greenhouse 
gases by 8 in 2012 
the improved energy performance was partly achieved by a sharp 
reduction in the use of oil as a fuel and this in turn led to a further reduction 
of 25 in the group’s sulphur dioxide emissions on a per tonne basis 
this fall followed a reduction of 77 in 201 1 and means that the group has 
now achieved a 999 reduction in sulphur dioxide emissions since 2000 
although production at william blythe increased our discharges of heavy 
metals per tonne of production reduced for the fourth year in a row giving 
the best ever performance of only 0096 gms per tonne of production
despite one off waste arising associated with plant closure synthomer’s 
production of waste fell signiﬁcantly during the year the fall in hazardous 
waste was particularly marked falling from 21646 tonnes in 201 1 
to 8461 tonnes in 2012 though this was assisted by the sale of the 
pharmaceutical division overall waste per tonne of production fell 
by over 51 from 28kg in 201 1 to 14kg per tonne in 2012 
under the auspices of the european chemical industries council ceﬁc 
synthomer has been involved in a 3 year comparative study of the carbon 
footprint of polymer products the study discussed further below has 
shown that synthomer and the european polymer industry as a whole 
have improved their energy efﬁciency since the last study was done in 1999 
whilst the results depend on the product mix of each individual company 
we are pleased to report that synthomer performs well compared to the 
rest of the industry 
during the year the company maintained its strong focus on process 
safety a further 50 members of staff went through the icheme’s 
weeklong assessed training course on the subject and a programme 
of improved metrics is being introduced to give the board and executive 
committee better insight into the company’s performance whilst it is 
pleasing to be able to report that there was only one serious process 
safety incident in 2012 which was handled without safety or environmental 
consequences the company is mindful of the need for continuing – 
and indeed ever improving – vigilance in this area
our policy commitments
following discussions at all levels in the company synthomer’s safety 
health and environment she policy was revised during 2012 
the revisions are aimed at ensuring our fundamental commitment to 
good she performance is well understood across the company’s 
operations in all regions our three longterm goals are
 to minimise any environmental burden created by our activities
 to have no accidents or incidents and
 to have no adverse impact on the health of those who work in or live 
near our operations nor on the health of those who use our products
these goals are embedded in the company’s she management system 
and in the annual she improvement plans which each site prepares 
each year
the group remains committed to both the global chemical industries’ 
responsible care
®
 initiative and to the principles of sustainable 
development sd as set out in the uk chemical industries association 
cia sd guiding principles responsible care
®
 aims to improve and 
enhance the chemical industry’s she performance year on year 
synthomer has been a signatory to responsible care
®
 since the 1990s and 
we remain committed to both the principles and the practice of responsible 
care
®
 all synthomer sites are required to adhere to these principles and 
actively support the group’s efforts to achieve continuous improvement 
in our she performance
the synthomer group has been committed to the cia’s sd guiding 
principles since they were published in 2005 and we use these principles 
in guiding the contents of our annual report when the principles were 
set out improvement targets were set for the uk chemical industry 
and we have continued to use those targets to judge our performance 
improvements year on year our continuing involvement in both 
responsible care
®
 and sustainable development was conﬁrmed in 
2012 when the chief executive and the chairman of the synthomer board 
resigned the two sets of principles the principles include a strong 
commitment to open reporting of environmental performance and this is 
reﬂected in this annual report the sd principles including full respect for 
the people and communities amongst whom we work are followed by the 
group’s sites around the world 
corporate social responsibility report 16 synthomer plc annual report 2012
the two sets of principles are used together to form the core of synthomer plc’s 
adherence to global corporate social responsibility the policies that we 
have in this area are being extended throughout our supply chain to 
ensure all our partners understand our rejection of practices such as the 
employment of child labour or unfair discrimination and our acceptance 
of rights such as that to join any lawful worker’s association or trades union
synthomer plc set itself the target of achieving accreditation of the whole 
company to the environmental management standard iso 14001 by 
the end of 2014 the ﬁrst steps towards this were achieved in 2012 
by the successful accreditation of both our central environmental 
management system and a number of individual sites to a new matrix 
model the accreditation will be extended to further sites during 2013 
and is on schedule to be completed by the end of 2014
as noted in the discussion of our energy performance the chemical 
industry is energy intensive and is therefore heavily affected by the need to 
reduce the release of greenhouse gases ghgs in europe the drive for 
reduction is principally set out in the european union’s carbon reduction 
commitment crc this commitment requires a very signiﬁcant absolute 
reduction in carbon dioxide release over the period to 2020 and then a 
minimum of an 80 reduction by 2050 the control of other ghgs is also 
essential and for synthomer these are almost entirely the vocs used in our 
processes we have for some time reported our overall ghg releases in our 
annual report and we expect to have no signiﬁcant problems in complying 
with the uk government’s requirement for all publicly quoted companies 
to report their ghg releases from next year synthomer plc is committed 
to the control of all ghg releases we continue to take low carbon energy 
electricity from the stallingborough waste incinerator and remain 
committed to seeking to decarbonise our energy supply by using 
low carbon or carbonneutral energy supply options where feasible
synthomer plc has been a member of ftse4good for a number 
of years and is committed to maintaining membership of that index
managing safety and environmental performance
the management of she performance in synthomer has continued to 
evolve through modiﬁcation extension and improvement of the existing 
company systems the focus during 2012 has been on involvement of 
staff at all levels and changes are being made in response to suggestion 
for improvements or sometimes concerns which have come from 
synthomer staff however it remains one of our principles that safety and 
environmental performance is the responsibility of all synthomer staff and 
that all staff are expected to be responsible for their own safety and to 
take care of those around them likewise all staff have a role to play in the 
environmental performance of our sites whether it is in recycling energy 
conservation or managing their site’s environmental discharges the 
management of safety and environmental performance is fully integrated 
into synthomer’s management structure with all staff having responsibility 
for those who report to them
synthomer has two principal systems to assist in the management of she 
all accidents events which cause personal injury and incidents events 
which cause property damage environmental release cause complaints 
or result in other harm are recorded in the group’s aims accident and 
incident management system database aims has been in place for 
over 10 years and the system is used to record and categorise and then 
to manage the investigation of all accidents and incidents the system 
is also used to record and manage “near misses” events or hazardous 
situations which under other circumstances could have caused an accident 
or incident the system provides a way of tracking events and examining 
what is happening on our sites for trends or common failings
the second system is a set of management policies standards and 
procedures which make up the synthomer she management system 
shems shems continues to be extended to cover new areas and is 
currently being shifted to the companywide document controller system 
which will make it more widely available and help manage documents to 
ensure they are kept up to date the elements of shems set the standards 
sites are expected to achieve and provide guidance on how they should 
achieve those standards shems covers most areas of she performance 
with comprehensive coverage of the procedures synthomer expects all 
sites to have in place the system is now supported by guide packs 
documents which set out the principal steps sites have to take to comply 
with shems elements sites are expected to operate to shems standards 
and procedures or to demonstrate that they have their own equivalent 
standards and procedures already in place 
she performance is always the primary duty for management at all levels 
in the group the practices adopted in previous years remain a cornerstone 
of our efforts towards continuous improvement in she performance 
the practices include
 she performance is discussed in all management meetings as the ﬁrst 
agenda item
 synthomer conduct regular indepth she audits of all sites to assess 
performance and identify opportunities for improvement the results 
of the audits are discussed both with the site involved and with wider 
management for example at the group executive committee 
an overview of the results of the audit process is reported to the 
board at least half yearly
 the group aims system is used to collect and analyse data on all 
accidents incidents and “near misses” on our sites the system ensures 
that all of these are appropriately investigated with the most serious 
or potentially serious incidents being fully investigated to root causes 
the system is then used to ensure that the identiﬁed actions to prevent 
recurrence are put in place using an action management tracking 
system “lessons learned” are produced from the investigation reports 
and circulated to all sites with a positive feedback system to ensure the 
lessons have been considered and implemented
 sites are expected to implement policies procedures and practices 
in line with the group’s shems and to provide training for all their staff 
to ensure that these are used by staff at all times working towards 
this group requirement william blythe have introduced a competence 
management system in line with uk guidance and successfully passed 
a part ‘a’ competence check inspection by the uk regulator hse 
the lessons from this will be incorporated into shems during 2013
 key measures leading and lagging indicators of she performance 
are collected monthly or quarterly as appropriate and reported to the 
group executive and to the board this process is mirrored at company 
and site level to give management and staff a clear picture of current 
performance
corporate social responsibility report
continued 17 synthomer plc annual report 2012
business review
 key leading performance indicators covering items such as inspections 
and engineering performance metrics are collected and reported to 
senior management to assess both equipment and management 
performance synthomer’s internal inspections and audits are designed 
to identify bad news and ensure it gets to the top management allowing 
time to address matters before a potential incident occurs in line with 
this key element stallingborough site is introducing an asset integrity 
management system designed to focus attention on critical plant and 
ensure protective devices are reliably maintained once complete this 
system will be rolled out to all sites in the group
 senior managers have she targets as part of their annual objectives 
these she targets are cascaded to give all employees supporting 
objectives either on an individual or a site basis and
 central she staff regularly visit sites to carry out training and 
development of key staff to ensure all sites are aware of their legal 
obligations and current good practice and to monitor and guide current 
she performance
health safety and accident performance
despite all the difﬁculties with accurate reporting and the fact that it is a 
lagging indicator ‘over 3day’ – or ‘reportable’ – lost time accident 
rltas rates remain a widely used comparative measure of occupational 
safety across a range of industries synthomer has for many years used 
rltas as a key measurement so it is pleasing to report a signiﬁcant 
improvement in the group’s performance on rltas with the best ever 
annual ﬁgure being achieved beating the previous record low in 2009 
there were 12 rltas in the year and the group’s rlta frequency rate 
dropped to below 023 per 100000 hours worked for 2012 100000 hours 
is very broadly a working lifetime a synthomer employee was less than 
one quarter as likely to have an ‘over 3day’ accident in 2012 than they 
were in 2000 the number of accidents resulting in less than 3 days lost 
time ltas dropped from 13 in 201 1 to 8 incidents in 2012 and the all 
lost time accident rate fell to 037  this compares to the most recently 
reported frequency rate for all lost time accidents quoted by the european 
chemical industry confederation ceﬁc in their responsible care report 
which is 066 
the uk chemical industry remains amongst the safest manufacturing 
industries in the world and synthomer’s objective is to achieve 
uk standard performance in all our operations around the world 
our target for rltas is to achieve a performance which is better than the 
average for cia member companies however our performance goals go 
beyond these more serious accidents and from 2013 we will be widening 
the range of injuries we report on annually to include all injuries requiring 
more than ﬁrst aid treatment
reportable lost time accident frequency rates
00
02
04
06
08
10
12
00 01 02 03 04 05 06 07 08 09 10 11 12
099
095
073
057
057
043
054
037
025
036
023
042
024
3 day lost time accident frequency rate
per 100000 hours
process safety and reportable safety incidents
the topic of process safety has continued to grow in importance for the 
chemical industry exempliﬁed by the well attended conference between 
the european and american chemical industry associations in 2012 
discussing common reporting standards for process safety incidents 
and by the oecd publication “corporate governance for process safety” 
produced with american european and se asian participation we 
participated in the conference to ensure our understanding of the emerging 
metrics and the oecd report was discussed at both executive and board 
level culminating in a special board session on the subject process safety 
failures whilst rare given the scale of the process industries can have 
devastating consequences as was seen in a number of serious events 
around the world in 2012 we recognise that we have to manage the 
operation of our plants to ensure that our process safety – the set of 
procedures and practices which ensure that our processes are safe 
to operate – matches the hazards of what we do
because process incidents have the potential to be very damaging to 
people plant and the environment our aim is always to have defences 
in depth to prevent serious incidents we use our aims system to record 
and monitor even minor process incidents and upsets as we recognise they 
could lead to signiﬁcant incidents under different circumstances these 
records are analysed and the lessons shared internally and externally 
there were two reportable chemical process safety incidents in 2012 – 
a release of methylethylketone in the durban plant and a small ﬁre in the 
drains of the kluang dispersions plant neither caused any injury or any 
lasting environmental damage the two other incidents noted in the graph 
were both related to mechanical equipment failures again neither of these 
led to injury or environmental damage  18 synthomer plc annual report 2012
corporate social responsibility report
continued
process safety is a key section of shems indeed the ﬁrst section after our 
policies have been set out the procedures in shems have been written 
learning from the work done by regulators such as hse  tüv international 
standards and competent organisations such as safed and eemua 
it has also been made a focus in the group she audit with sites now 
receiving explicit feedback on their performance in this area we are 
developing and improving our process safety performance indicators 
to ensure they are well understood and that they provide appropriate 
information to senior management on the workings of the process 
safety system 
we continue to work to improve the understanding of process safety at all 
levels of the company using the institution of chemical engineers icheme 
process safety course the full 5day course is used with operations and 
engineering staff with a 2day course for senior managers used with the 
most senior managers in synthomer two process safety training courses 
were run inhouse in 2012 one in the uk and one in germany attended by 
staff with 9 different native languages from europe africa and asia staff in 
malaysia and south africa also attended the icheme public courses in 
those countries hazard  operability study hazop training courses were 
held in europe and malaysia in 2012 extending process safety awareness 
through the operational teams process safety and hazop training is part 
of our development programme and synthomer intends to roll out such 
training to all relevant personnel in the organisation two process safety 
courses and one hazop course are currently programmed for 2013
reportable safety incidents
00
66
02 01 04 03 06 05 07 08 10 09 12 11
0
10
20
30
40
50
60
70
26 26
4
2
4 44 4 4 4
6
13
occupational health  hygiene
synthomer has a challenging goal in occupational health to have no 
adverse impact on the health of those who work in or live near our 
operations nor to those who use our products in 2012 there was just 
one case of occupational disease reported by our sites this was a case 
of dermatitis to a worker in the kluang natural rubber plant the individual 
fully recovered following relocation to alternative work within the site
during the year we started to bring together the best of occupational health 
practice from around the group using learning from our group she audits 
as an example the biological monitoring programme at our filago site 
prompted a full medical review of this type of monitoring for all our sites 
especially those where we have bulk storage of raw materials with high 
health hazards all sites are expected to have systems in place to limit 
the exposure of staff to hazardous materials and these expectations are 
detailed in our occupational health standard written in conjunction with our 
medical experts given the nature of our chemistry it will never be possible 
to remove all hazardous chemicals from our sites we therefore need 
secure risk assessments to demonstrate that we are properly controlling 
potential exposure wherever possible by engineering means though 
always backed up by the use of appropriate personal protective equipment 
ppe to assist sites in the thorough assessment of the risk from exposure 
to chemicals hazardous to health the group has continued to extend the 
coverage geographical and by substance of our electronic assessment 
programme which is based on the principles of the uk control of 
substances hazardous to health regulations this system is currently 
being extended to make it available to staff in the languages used on 
their own site
during health and safety week all sites joined in a wide range of health 
promotion initiatives nearly all from employee ideas these included 
a pedometer walking challenge at the harlow site concept housekeeping 
at oss managing stress workshops at the durban site and a visit to the 
german occupational safety exhibition in dortmund by marl employees
we were delighted to be invited to attend the launch of the cia sustainable 
health metrics tool in april 2012 this tool has provided us with a credible 
process to assess and benchmark how well health programmes at site 
level are meeting corporate requirements review of the 14 key health 
performance elements will enable us to raise standards by identifying 
priorities and tracking improvements our aim is to explore how our sites 
manage their occupational health programmes using sustainable health 
leading indicators and check on the health performance of our organisation 
using performance lagging indicators we have continued to enhance our 
comprehensive range of medical arrangements for each site staff who 
work with breathing apparatus in the uk now undergo additional medical 
surveillance to assess their ﬁtness to wear such equipment and this will be 
rolled out groupwide we encourage all staff to report health concerns 
which could have been caused by a work activity and occupational health 
professionals monitor the overall health of our staff drawing any potential 
problems to our attention whilst always respecting medical conﬁdentiality 
with this in mind we are committed to supporting conﬁdential health 
and wellbeing employee assistance programmes around the group  19 synthomer plc annual report 2012
business review
audit programme
synthomer has an internal audit regime which is designed to provide 
management at all levels with an insight into the she and process safety 
performance of our sites the audits use an internal team of experienced 
chemists and engineers to visit all our operating sites on a 3year cycle 
the audits which incorporate a scoring system developed from the 
principles of the cia’s responsible care
®
 management system are 
demanding with 3 or 4 auditors visiting the sites for a week long audit in 
order to share learning spread best practice and enhance performance 
site managers she managers and site engineers from other sites join the 
audit team to add crosssite auditing experience to the work of the central 
team the audits include a detailed questionnaire with several hundred 
questions covering areas from she policy to environmental performance 
and from healthcare to engineering standards the questionnaires are 
reviewed annually and modiﬁed where necessary to ensure they remain 
effective for use on all the sites in the group especially as operational 
practices and equipment evolve
after the audit the audit team produces a comprehensive report which 
includes not only their assessment of the site’s current performance but 
also a set of detailed recommendations setting out the actions which need 
to be taken by the site over the period before the next audit these reports 
are discussed by management both to give a consistent view of the she 
performance of group operations and to guide improvement plans to 
ensure improving performance across the group the results of the 
audits are monitored closely by the group executive committee who 
are committed to achieving high standards of she performance on 
all synthomer sites an overview of the outcome of the audits is also 
discussed by the synthomer board
in 2012 the audit process concentrated on the sites which had joined the 
group over the preceding two years and by the year end all sites except 
one had been audited in 2013 the audits will cover sites which have been 
part of the group for a number of years 
asset protection and insurance inspections
the company had no major insured losses in 2012 and this good record 
has enabled us to continue to control the costs of our insurance this cost 
control has been aided by our property insurers having an improved 
estimation of the risk control measures which the company has in place 
these measures are surveyed by our property insurers in biennial insurance 
surveys carried out by their surveyors working with synthomer’s internal 
she teams they are also reviewed on a companywide basis in the twice 
yearly meetings held with the insurer’s risk management team to review 
the group’s risk proﬁle and to discuss progress in dealing with any issues 
identiﬁed during the insurance surveys the surveys and meetings are 
also useful opportunities for synthomer to discuss current standards and 
thinking with an external team
regulatory affairs reach and ghs
although there were no major deadlines to meet in 2012 activity to 
deal with both reach the eu’s registration evaluation authorisation 
and restriction of chemicals regulations and ghs the un’s globally 
harmonised system for chemical classiﬁcation and labelling continued 
at a high rate throughout the year preparatory work continued for the next 
round of reach registrations in 2013 though it now seems that the costs 
are likely to be lower than previously projected with only two materials 
needing to registered by our polymer companies work has also continued 
on integration of all the regulatory affairs work for our polymer business in 
one expert group to ensure that consistent accurate information is always 
available to all our customers to facilitate this work our global sap system 
is being made available in a consistent form to all of our locations the ﬁrst 
site to beneﬁt from this was filago in italy which went live towards the end 
of 2012 this has entailed work on ensuring the accuracy of safety data 
sheets sds and ensuring they align with the data on the sds of 
raw material suppliers across all our suppliers and across all countries 
the beneﬁts of the work done so far will be seen as the system is rolled out 
across all sites over the next few years
the initial implementation of ghs only applied to single chemicals with 
mixtures not due to change until 2015 in the eu however some countries 
outside the eu have gone for a faster introduction and materials sold 
in china japan and korea for example will need to be labelled to 
ghs standards in 201314 preparatory work for the implementation 
of ghs to mixtures – which are the majority of our polymer products – 
started in 2012 and will be a major focus for regulatory affairs throughout 
2013 continuing up to the 2015 deadline 
the work of the regulatory affairs has impacts both inside and outside 
the company with the provision of accurate information including sds 
to our customers being an essential part of our business offering feedback 
from customers on the information provided continues to be very good 
the safety information stored in the systems used by our central team 
is also used to give uptodate safety information to our operational 
employees enabling them to ensure that proper handling systems are in 
place to handle the materials used to manufacture our products these 
systems are currently going through an upgrade to make information 
available in multiple languages ensuring that chemical hazard information is 
easily available in the local language of the great majority of our operational 
staff worldwide 20 synthomer plc annual report 2012
corporate social responsibility report
continued
sustainable development performance report 
managing our environmental responsibilities
the synthomer group treats its responsibility to protect the environment 
as one of our core values where possible we will exceed our statutory 
obligations and our revised she policy includes a commitment to 
“work effectively with local regulators to ensure legal compliance and where 
technically and economically practicable exceed requirements” we are 
also committed as signatories to the sustainable development sd goals 
put forward by the uk chemical industry association cia in 2005 to 
improving our environmental performance year on year synthomer plc 
as yule catto has over the past 10 years monitored the environmental 
performance of all the company’s site activities and has generated 
a record of signiﬁcant improvement in all the areas we monitor we are 
comfortably exceeding the targets set as part of our sd commitment this 
has been achieved by signiﬁcant investment in both process improvement 
– avoiding the production or release of environmental pollutants – and in 
abatement equipment where some releases are inevitable signiﬁcant 
investments required for environmental reasons in 2012 have included 
a €12 million monomer recovery plant in kluang initially reducing and then 
essentially eliminating the group’s biggest voc release and investment in 
new or substantially improved efﬂuent treatment plant in vietnam malaysia 
and the uk
synthomer were one of the ﬁrst signatory companies to the cia’s 
sustainable development principles in 2005 signing up to the principles 
was accompanied by the setting of demanding improvement targets 
for the group’s environmental performance over the ﬁrst decade of the 
21st century we have carried those targets on into a second decade as a 
benchmark against which we can measure our improvement achievement 
against the targets is monitored by the synthomer board on a quarterly 
basis and more frequently by operational management up to group 
executive level environmental management is integrated into the 
company’s she management system shems but the commitment to 
environmental excellence is underlined by the intention to have all the sites 
at present in the group accredited to iso 14001 by the end of 2014 
whilst the releases which are most likely to have an impact on the 
environment are recorded in the graphs presented in this report we monitor 
a number of other measures internally all of these other measures also 
show very signiﬁcant improvement over the last 10 years and most are 
continuing to improve year on year as examples our releases of nitrogen 
oxides to air have fallen by more than 70 per production tonne since 
2000 our releases of phosphorous to water have fallen by over 90 since 
2000 and our releases of heavy metals are down from 45 gmtonne to 
0096 gmtonne a better than 97 reduction these have been achieved 
by investment in better systems for environmental control the development 
of better processes better process control focusing on avoiding releases 
and other losses and incremental improvement in the operational systems 
on our sites all of this is underpinned by the performance of our site staff 
who have driven improvement and whose aims are to produce better 
quality product using more carefully husbanded resources whilst 
producing less waste
this record of success is reﬂected in the formally reported sd measures 
all but two of which improved in 2012 and all of which have improved very 
considerably since 2000 all of the sd targets set for the group have been 
comfortably bettered the two cases where the group performed less well 
in 2012 compared with 201 1 were water usage and the production of 
nitrous oxides nox which increased for the second year in a row in 2012 
the group improved its energy performance and regained its longterm 
trend for our continuing operations waste production per tonne of product 
was down as quality and ‘right ﬁrst time’ production improved on vocs 
there was a signiﬁcant decrease 21 in the absolute quantity released 
despite an 8 increase in production tonnage compared to 201 1
epdla lci project
the european polymer dispersion and latex association epdla is 
a focused interest group which operates under the auspices of ceﬁc 
the confederation of the european chemical industry epdla undertook 
an intensive study in 1999 to calculate the carbon footprint of the polymers 
being produced by the group’s members the study has been repeated 
as a full life cycle inventory lci study over the last couple of years and 
synthomer has contributed to the new study as constituent companies 
of synthomer did to the original study the methodology of the lci study 
was set by pwc who also provided external validation this was a detailed 
study and required a very high quantity and quality of data with all the major 
producers in europe contributing to the project coverage was between 
55 and 70 of the european tonnage produced varying slightly by 
product family
the study found that the main contributors to the environmental impact of 
the polymers being produced are the monomers used in their manufacture 
monomers account for 8090 of the total impact for both global warming 
potential and total primary energy content of the polymers produced 
this was true for all the polymer groups studied whether based on 
styrene butadiene acrylics or vinyl acetate environmentally the impact 
of the different polymer groups was not distinguishable however the 
environmental impact of the polymers studied had reduced signiﬁcantly 
since the ﬁrst study a 5 reduction in overall global warming potential since 
1999 and even higher reductions in the total primary energy used ranging 
from a 15 reduction for sbr polymers to 20 for pure acrylic or vinyl 
acetate polymers for synthomer in particular the lci study showed that 
our products gave results which are either better than or at the same level 
as the industrial average this positive result for synthomer is no reason 
for complacency and we continue to work on reducing our future 
environmental impact both as an end in itself and to keep up with 
improvements in our industry in general  21 synthomer plc annual report 2012
business review
energy
by its nature the chemical industry is a heavy energy user though as the 
ceﬁc sponsored study discussed above has shown the carbon footprint 
of our products is dominated by the energy embedded in the monomers 
we use not withstanding this energy use by the group remains a key 
performance indicator and we continue to target a 4 improvement in 
speciﬁc energy consumption year on year speciﬁc energy consumption 
in 2012 was helped by the different technologies brought into the group 
following the acquisition of polymerlatex in 201 1 though this was partly 
offset by lower production volumes on some sites overall speciﬁc energy 
consumption across the synthomer group fell by 35 compared with 
201 1 and was 137 lower than in 2010 the longterm trend shows the 
group used less than half the energy per tonne that was used in 2001 
consumption in 2012 was 38 better than the extrapolated 2012 target 
it should be noted that the group’s energy consumption quoted here 
includes allowances for energy embedded in site services such as 
compressed air or cooling water when these are bought in rather than 
generated by our own plant
despite the improvements achieved the cost of energy remains a 
signiﬁcant challenge to synthomer synthomer achieved an 1 1 reduction 
in the cost of energy per tonne of production compared to 201 1 the most 
signiﬁcant energy cost is electricity which accounts for 43 of the group’s 
total energy bill 
the reduction in speciﬁc energy use has improved the group’s carbon 
dioxide co
2
 emissions per tonne and this is reﬂected in the global 
warming burden discussed below the co
2
 release ﬁgure quoted in the 
environmental kpi section includes both direct release from carbon fuels 
burned on site and the calculated release from electricity consumed 
including that embedded in site services
in line with defra advice and as in previous years releases of co
2
 from 
electricity generation have assumed generation efﬁciency and co
2
 releases 
rates in line with the average for the uk national grid however in line 
with our goal of decarbonising the group’s energy use we are exploring 
different energy supplies with the aim of reducing co
2
 releases faster than 
improvements in our energy consumption to this end we have signed 
a longterm contract to buy electricity from drax power station in the uk 
which already uses over a million tonnes of biomass as fuel reducing its net 
co
2
 production by nearly 2 million tonnes in 201 1 drax will fully convert one 
of its six combustion units to biomass in 2013 reducing their net releases 
we also recognise that the electricity supplies we use in different countries 
have different thermal efﬁciencies and rates of co
2
 production in line with 
the uk government’s requirement for full reporting of greenhouse gas 
ghg emissions from next year we are exploring more accurate ways of 
calculating our ghg emissions given the wide range of countries in which 
we operate
in december 2012 langelsheim germany successfully gained 
certiﬁcation for their energy management system through the din en 
50001 energy management standard the goals of the standard are to 
increase overall energy efﬁciency using a systematic approach to energy 
management across the site langelsheim is the ﬁrst of a number of sites 
seeking this accreditation
energy consumption
gigajoules used per production tonne
0
1
2
3
4
5
6
00 01 02 03 04 05 06 07 08 09 10 11 12
476
557 
509
452
412
391
364
333
283
294
263
254
452
476
471 466
460
455
445
439 434 429 424
419
413
450
10 year target actual
global warming
there are two signiﬁcant releases from synthomer companies which 
contribute to global warming co
2
 released during energy generation 
and the release of vocs the improvement in energy consumption has 
been discussed above and this led to a 46 improvement in co
2
 releases 
per tonne of product total voc releases reduced by 21 for 2012 
compared with 201 1 partly due to the closure of the stallingborough latex 
plant which was the second largest emitter of voc in the group and partly 
due to reductions in the releases from the latex plant in kluang the 
combination of these two improvements meant that the global warming 
burden of the group’s activities improved in 2012 by some 8 giving the 
group its best ever performance for the second year running overall 
performance was 65 better than in 2001 and the group was 28 below 
the extrapolated target for 2012 
after examining different options a scheme to recover a large proportion of 
the vocs released from the nbr plant at kluang was developed in 20101 1 
and the equipment was installed in 2012 this equipment costing some 
€12 million is now being commissioned and is designed to recover over 
65 of the vocs being released by the kluang nbr plant this will lead to 
very signiﬁcant further reductions in voc release during 2013 once the 
recovery plant is running this scheme will be followed hopefully also during 
2013 by a further scheme which will burn the residual vocs with full energy 
recovery to give a plant with low overall voc releases 22 synthomer plc annual report 2012
corporate social responsibility report
continued
global warming burden
tonnes co
2
 equivalent release per production tonne
00 01 02 03 04 05 06 07 08 09 10 11 12
0287
0294
0279
0265
0272
0257
0250
0243
0235
0228
0221
0214
0206
0294
0406
0229
0185
0221
0237
0197
0182
0173
0176
0185
0154
0142
000
005
010
015
020
025
030
035
040
045
10 year target actual
nb – the releases of vocs from the kluang nbr plant were incorrectly calculated 
and signiﬁcantly overstated in 2011 the ﬁgures have been recalculated and are 
now given on a consistent basis both in the data table at the end of this section 
and in the graph above
atmospheric acidiﬁcation
having already achieved such large reductions in atmospheric emission of 
acid gases further reductions are becoming harder to achieve our direct 
emissions are now almost entirely sulphur oxides either from burning oil 
for steam raising or from using diesel fuel to generate electricity in areas 
where the grid supply is not reliable this means that our performance is 
signiﬁcantly dependent on matters beyond our control however by using 
low sulphur fuels and because electrical supplies were more reliable in 
2012 emissions were again reduced the amount of sulphur dioxide so
2
 
fell by over 25 compared to 201 1 to a little over 8 tonnes in total for the 
year this is less than one third of the ﬁgure for 2010 and the group’s 
emissions of so
2
 per tonne of production are now 0 13 of what they 
were in 2000 and 03 of the extrapolated 2012 target
atmospheric acidiﬁcation burden
kgs so
2
 equivalent released per production tonne
0
1
2
3
4
5
6
00 01 02 03 04 05 06 07 08 09 10 11 12
4818
4580
4340
4100
3850
3610
3370
3132
2891
2650
2409
2168
19261
4818
3916
4291
4502
2223
0592
0554
0310
0145
0039 0008 0038 0006
10 year target actual
water use
water consumption across the synthomer group saw a slight increase 
from 201 1 increasing by 26 compared to the year before on a per tonne 
of product basis however this slight rise still gave the second best 
performance ever nearly 25 better than 2010 which was then the group’s 
best the increase reﬂects the change in product mix during 2012 with the 
closures of mouscron and of latex production in stallingborough and the 
start of transfer of production from the batley site on the other hand many 
of the company’s sites continued to reduce their annual consumption 
during 2012 water use per tonne of production has reduced by nearly 
two thirds since 2000 63 reduction and is less than 50 of the 
extrapolated target for 2012 despite the slight increase in usage 
the cost of water fell by 2 overall
water remains a vital resource for society as a whole and for industrial 
development for our operations water is vital to our production processes 
both to provide safety in reactor operation and as an essential part of 
our polymer dispersion products we are fortunate that most of our 
plants operate in areas where water supply is not currently signiﬁcantly 
constrained and where rainfall is relatively abundant on our kluang 
malaysia site we have an onsite water collection system which provides 
the great majority of our water given the increasing production on this 
site and previously unexpected dry periods the onsite supply has been 
strengthened by the provision of boreholes and a piped supply from 
offsite sources
two sites in particular operate in areas with constrained water supply 
dammam saudi arabia and durban south africa dammam now relies 
on external piped water which occasionally has to be supplemented 
by water in tankers and in durban increasing population and rising living 
standards are putting pressures on the available supply we also recognise 
that existing supplies on other sites may become constrained if weather 
patterns change with global warming the group continues to target a 
4 reduction in water use per tonne each year and further initiatives to 
reduce water usage are underway with trials to for example reduce water 
use in reactor washing and to reuse more water onsite for cleaning or 
other purposes
water consumption
m
3
 per production tonne
0
2
4
6
8
10
00 01 02 03 04 05 06 07 08 09 10 12 11
950
931
912 893
874 855
836
817
798
779
741
760
722
950
780
712
584
600
665
582
562 558
473
460
338
347
10 year target actual 23 synthomer plc annual report 2012
business review
waste disposal
the total amount of hazardous waste produced in 2012 was markedly less 
than in 201 1 reducing by over 46 despite production increasing by 8 
of this hazardous waste 57 was able to be recycled recovered or burnt 
as a fuel – in a cement kiln for example the most difﬁcult of the remaining 
hazardous wastes have to be incinerated which is energy consuming and 
can be environmentally unpopular in 2012 the amount needing incineration 
was reduced by 3387 tonnes 66 despite the increased production 
compared with 201 1 the absolute quantity of hazardous waste sent to 
landﬁll was only 20 of the 2002 amount despite production having 
more than doubled
hazardous waste disposed to land
tonnes waste per production tonne
00 01 02 03 04 05 06 07 08 09 10 11 12
00088
00090
00086
00081
00083
00079
00077
00074
00072
00070
00068
00066
00064
0000
0002
0004
0006
0008
0010
0012
0014
00090
00120 00120
00090
00060
00055
00030
00025
00011 00013
00017
00024
00014
10 year target actual
the absolute quantity of nonhazardous waste produced fell by 20 
in 2012 and the speciﬁc quantity is now less than 10 of the quantity 
disposed of to landﬁll in 2000 this has been achieved through recycling 
recovery and reuse of waste materials 
the use of imaginative environmentally friendly disposal routes has been 
so successful that for a number of synthomer’s sites the net production 
of waste is now zero – all their waste is recovered recycled or reused 
the lessons learned by these sites are being shared with other sites in the 
synthomer group to reduce the quantity of waste requiring ﬁnal disposal 
still further
unfortunately in the uk the previously composted polymer waste from 
the stallingborough site is now going for municipal treatment following 
the uk environment agency’s decision to remove the permit to recycle 
this material this decision is being actively discussed with the authorities 
and it is hoped that recycling will be resumed during 2013
nonhazardous waste disposed to land
tonnes waste per production tonne
00 01 02 03 04 05 06 07 08 09 10 12 11
0000
0005
0010
0015
0020
0025
0030
0022
0018
0021
0016
0015
0026
0017
0012
0009
0010
0003
0002
0002
environmental incidents
the number of environmental incidents which were reportable to the 
authorities and led to a release of material to the environment was 14 in 
2012 an increase on previous years all of the incidents were associated 
with the operation of the two efﬂuent treatment plants etps which 
service the company’s site in kluang malaysia none of the incidents were 
found to have caused more than transitory environmental harm these two 
plants have been underperforming for some time and they have each been 
the subject of a signiﬁcant upgrade during the year on the site’s nbr plant 
the investment has focused on the monomer recovery plant discussed 
earlier under voc releases which will signiﬁcantly reduce the pressure 
on the etp  especially by removing acrylonitrile residues from the water 
to be treated the second etp  which serves the rest of the site has had 
to deal with a very diverse inﬂow and investment has focused on better 
pretreatment at individual plant level both of these investments were 
completed in late 2012 and will be commissioned in early 2013 
improvements should be seen over the next year 
other environmental projects in 2012 included the completion of a new 
combined chemical and biological etp at synthomer’s vietnam plant 
to meet tightened release limits to the local environment this plant is 
currently being fully commissioned additional solid separation was also 
commissioned in stallingborough to reduce cod loading on that site’s etp  
the new etp planned for the company’s durban site was again delayed 
but the site operated within its consent limits throughout the year a new 
etp for the dammam site in saudi arabia is currently being constructed 
and will come into operation in the ﬁrst half of 2013
there were a number of smaller nonreportable environmental incidents 
during the year which caused no environmental damage but which were 
reported internally and investigated to determine their cause in each case 
appropriate preventive or mitigation measures were put in place to prevent 
any future environmental harm 
reportable environmental incidents
0
10
20
30
40
50
00 02 01 04 03 06 05 07 08 10 09 12 11
49
44
22
4
77
4
88 8
10
19
14 24 synthomer plc annual report 2012
environmental kpis
the uk department for environment food and rural affairs defra published guidelines for reporting environmental key performance indicators in 
2006 the key measures suggested were energy use emissions to air waste disposal and water consumption on an absolute and a per tonne basis 
synthomer has reported on these indicators for a number of years and to aid transparency in environmental reporting we adopted defra’s preferred 
format in 2008 for the report on our 2007 performance this format is used in the table below which gives the data for the period 20102012
2012 2011 2010
 change
 20102012
 change
20112012
energy consumption
1
gj 3284233 3144349 2092339 5696 445
gas 681636 793671 698891
light oil 28568 25884 28178
heavy oil 2964 57166 64326
steam 770207 657120 161617
electricity primary basis 1796093 1604767 1 138600
gjtonne production 2544 2633 2942 1354 339
emissions to air
2
carbon dioxide co
2

tonnes 161981 156900 104572 5490 324
tonnes co
2
tonne production 0125 0 131 0 147 1468 451
sulphur dioxide so
2

tonnes 82 982726978 1590
kilos so
2
tonne production 00064 00082 00382 8335 2221
nitrous oxides nox
tonnes 5178 4230 1945 16619 2242
kilos noxtonne production 00401 00354 00274 4661 1324
volatile organic compounds voc
3
tonnes 1800 2278 2407 2521 2096
kilos voctonne production 1394 1907 3385 5881 2689
water usage
cubic metres m
3
4474648 4036053 3271018 3680 1087
public potable supply 938673 1003420 879006
raw water from river 1895727 1277 868 1514427
raw water from borehole 224696 524965 337 058
raw water from canal 0 00
raw water from other 1415552 1229800 540527
m
3
tonne production 3466 3380 4600 2465 255
1 data relates to site usage of all fuels excluding transport
2  emissions to air have been calculated from the usage of all fuels excluding transport fuel they therefore include both direct emissions and indirect emissions 
related to boughtin electricity steam compressed air cooling water etc
3  reexamination of the company’s voc emissions has shown that the ﬁgure was signiﬁcantly overstated in 2011 the 2011 ﬁgure has been recalculated 
and all ﬁgures are now on a consistent basis
corporate social responsibility report
continued 25 synthomer plc annual report 2012
2012 2011 2010
 change
 20102012
 change
20112012
waste management
hazardous waste
tonnes 8461 21646 21946 6145
6090
hazardous waste sent offsite
recycled – energy recovery 1441 6944 5243
recycled – separated reprocessed 3257 6723 9010
incinerated – no energy recovery 1728 5116 6332
disposed by landﬁll 1698 2837 1126
other 192 2434 667
hazardous waste disposed onsite
incinerated onsite with energy recovery 145 00
incinerated onsite with no energy recovery 0 0129
disposed to onsite landﬁll 0 210039
hazardous waste tonnestonne production 00066 00181 00309 7876
6384
nonhazardous waste
tonnes 9407 11891 9002 450
1971
nonhazardous waste sent offsite
recycled – energy recovery 1635 3060 1940
recycled – separated reprocessed 2452 4641 3311
incinerated – no energy recovery 1 22 0
disposed by landﬁll 2348 2407 2084
other – municipality 2972 171 1 1606
nonhazardous waste disposed of onsite
recycled – energy recovery 0 00
incinerated – no energy recovery 0 00
disposed by landﬁll 0 50 60
nonhazardous waste
tonnestonne production 00073 00100 00127 4244 2683
total waste
tonnestonne production 00139 00281 00435 6820 5072
production
tonnes 1291112 1 194232 711138 8156 8 11
4 percentage changes are calculated from the base data and may differ slightly from changes calculated from the data in the table because of rounding
business review 26 synthomer plc annual report 2012
executive directors


joined the group and was appointed to the board in march 2006 
he assumed the role of chief executive in august 2006 prior to 
appointment he was chief executive of the plastics division of 
d s smith plc age 51

joined the group and was appointed to the board in october 2007  
prior to appointment he was group treasurer of imperial chemical 
industries plc age 53
nonexecutive directors



joined the board in september 201 1 and was appointed chairman 
in may 2012 he is chairman of motability operations group plc and an 
independent nonexecutive director of the business growth fund age 63

 joined the board in 1981 he is managing director of cairnsea investments 
limited a private investment company and a nonexecutive director of 
several early stage companies that have been backed by cairnsea age 60

joined the board in october 2012 he is a corporate vice president of 
alcoa inc and a board member of china zhong nan university age 60 


joined the board in april 2012 until july 2010 he was head technology 
business and a member of the management team of lyondellbasell 
he is founder and managing director of expertise beyond borders bv 
an independent technology management consultancy age 56

joined the board in 1993 and stood down in 2000 to become an 
alternate director he rejoined the board in 2002 he is a director 
of kuala lumpur kepong bhd and batu kawan bhd age 59

joined the board in may 2012 she is chairman of speedy hire plc and 
holds nonexecutive directorships at may gurney integrated services plc 
dignity plc and dechra pharmaceuticals plc age 52 



joined the board in august 2007  he is group finance director of national 
express group plc and a fellow of the chartered institute of management 
accountants age 51
1 member of audit committee
2 member of nomination committee
3 member of remuneration committee
registered ofﬁce
synthomer plc
temple fields
harlow
essex
cm20 2bh
registered number 98381
company secretary
richard atkinson
bankers
barclays bank plc
commerzbank ag 
hsbc bank plc
joint stockbrokers
barclays capital and canaccord genuity limited
registrars
computershare investor services plc
lochside house
7 lochside avenue
edinburgh park
edinburgh
eh12 9dj
independent auditors
pricewaterhousecoopers llp
chartered accountants and statutory auditor 
st albans uk
solicitors
herbert smith freehills llp 
pinsent masons llp
squire sanders uk llp
directors and advisers 27 synthomer plc annual report 2012
the directors submit their annual report including a business review 
and the audited consolidated ﬁnancial statements for the year ended 
31 december 2012
results and dividends
the proﬁt attributable to shareholders for the year was £566 million
the interim dividend of 22 pence per share was paid on 8 november 2012 
the directors recommend a ﬁnal dividend of 33 pence per share payable 
on 5 july 2013 to those shareholders registered at the close of business 
on 7 june 2013 a dividend reinvestment plan is available to shareholders 
and this alternative will continue to be offered until further notice
principal activities and business review 
the principal activities of the company and its subsidiaries and a 
business review are set out on pages 7 to 25 and form part of the report 
of the directors
financial instruments
details of the group’s use of ﬁnancial instruments and its ﬁnancial risk 
management objectives and policies and of its exposure to price credit 
liquidity and cash ﬂow risk in relation to such instruments are contained 
in note 22 to the ﬁnancial statements
directors
the present membership of the board is shown on page 26 all of 
whom served throughout the year except for dr jansz ms macpherson 
and mr chen who joined the board on 2 april 2012 17 may 2012 and 
5 october 2012 respectively all the directors will retire and will be seeking 
election or reelection as appropriate at the forthcoming annual general 
meeting except for ms macpherson who is leaving the board 
none of the directors seeking election or reelection has a service contract 
other than mr whitﬁeld and mr blackwood who each have a service 
contract which contains a twelve month notice period details of directors’ 
emoluments and the interests of each director in the share capital of 
the company are shown in the directors’ remuneration report on 
pages 35 to 39
director indemnity provisions
under the company’s articles of association the directors of the company 
have the beneﬁt of a qualifying thirdparty indemnity provision which 
provides that they shall be indemniﬁed by the company against certain 
liabilities as permitted by sections 232 and 234 of the companies act 2006 
and against costs incurred by them in relation to any liability for which they 
are indemniﬁed the company has purchased and maintains insurance 
against directors’ and ofﬁcers’ liabilities in relation to the company
share capital and control
details of the company’s share capital are contained in note 25 
to the ﬁnancial statements during 2012 no shares were issued or 
repurchased a total of 226528 shares were purchased on the open 
market on behalf of the shareholders who elected to participate in the 
dividend reinvestment plan
the rights and obligations attaching to the company’s ordinary shares 
being the only class of issued share capital as well as the powers of the 
company’s directors are set out in the company’s articles of association 
copies of which can be obtained from companies house or can be 
downloaded from the company’s website there are no restrictions on the 
voting rights attaching to the company’s ordinary shares or on the transfer 
of securities in the company no person holds securities in the company 
carrying special rights with regard to the control of the company the 
company is not aware of any agreements between holders of securities 
that may result in restrictions on the transfer of securities or on voting rights 
unless expressly speciﬁed to the contrary in the articles of association 
of the company the company’s articles of association may be amended 
by special resolution of the company’s shareholders
other than in relation to its borrowings which unless certain conditions 
are satisﬁed become repayable on a takeover the company is not party 
to any signiﬁcant agreements that would take effect alter or terminate upon 
a change of control following a takeover bid the company does not 
have agreements with any director or employee that would provide 
compensation for loss of ofﬁce or employment resulting from a takeover
all of the company’s share schemes contain provisions relating to a change 
of control outstanding options and awards would normally vest and 
become exercisable on a change of control subject to the satisfaction 
of any performance conditions at that time
contractual arrangements
the group has contractual and other arrangements with numerous third 
parties in support of its business operations the disclosure in this report of 
information about any such third parties is not considered to be necessary 
for an understanding of the development performance or position of the 
group’s business
major shareholdings
other than the shareholdings disclosed as directors’ interests in the 
remuneration report as at 22 february 2013 the company had been 
notiﬁed under section 5 of the disclosure and transparency rules of the 
uk listing authority of the following signiﬁcant holdings of voting rights in 
its ordinary shares
ordinary
shares
number
percentage
of ordinary
shares in
issue
nature of
holding
kuala lumpur
kepong berhad group 66111401 1945
direct
interest
standard life 
investments limited 37412994 1101
direct and
indirect
interest
report of the directors 
for the year ended 31 december 2012
governance 28 synthomer plc annual report 2012
employment policies
the group gives every consideration to applications for employment 
from disabled persons employees who become disabled are given every 
opportunity to continue employment under normal terms and conditions 
with appropriate training career development and promotion wherever 
possible the group seeks to achieve equal opportunities in employment 
through recruitment and training policies
authority to purchase own shares 
the company has a general authority which expires at the conclusion of 
the 2013 annual general meeting to make market purchases of not more 
than 33988076 of the company’s ordinary shares in accordance with the 
terms of the special resolution passed at the 2012 annual general meeting 
a resolution will be tabled at the 2013 annual general meeting to renew 
this authority
employee involvement
the group encourages employee involvement in its affairs and makes 
use of an intranet system to promote such involvement and to aid 
communication with employees the group is currently implementing a 
project in order to establish whether its current communication procedures 
can be improved an annual management conference is held to bring 
senior managers together to share ideas and develop policy and values 
dialogue takes place regularly with employee representative groups to 
make employees aware of the ﬁnancial and economic factors affecting 
the performance of the group performance related bonus schemes are 
in operation throughout the group
a new longterm share incentive plan for directors and senior executives 
was introduced in 201 1 with the approval of shareholders
uk pension funds
the trustees have reviewed the independent investment management 
of the assets of the company pension schemes in the uk and assured 
themselves of the security and controls in place in particular it is the 
trustees’ policy not to invest in synthomer plc shares nor lend money 
to the company
creditor payment policy
the group’s policy is to make payments to creditors and other suppliers 
in accordance with terms of payment agreed at the time the contract of 
supply is made subject to all the terms and conditions of the order being 
satisﬁed by the supplier the company signed up to the uk prompt 
payment code in january 2013 trade creditor days of the company for 
the year ended 31 december 2012 were 22 days 201 1 28 days based 
on the ratio of trade creditors at the year end to the amounts invoiced during 
the year by trade creditors
charitable donations
charitable donations in the year amounted to £62000 201 1 £53500 
there were no political donations during the year 201 1 £nil
statement as to disclosure of information to auditor
each director of the company conﬁrms that so far as he is aware 
there is no relevant audit information of which the company’s auditor is 
unaware and that he has taken all the steps that he ought to have taken as 
a director in order to make himself aware of any relevant audit information 
and to establish that the company’s auditor is aware of that information 
for these purposes relevant audit information means information needed 
by the company’s auditor in connection with preparing their reports on 
pages 41 and 79 
this conﬁrmation is given and should be interpreted in accordance with 
section 418 of the companies act 2006
corporate governance
the corporate governance report is set out on pages 30 to 34 and forms 
part of the report of the directors
principal risks and uncertainties
the directors have appropriately considered the group’s principal risks 
and uncertainties including the following
 conditions in the global economy economic ﬂuctuations in customer 
industries and volatility and cyclicality of the global chemicals and 
polymers markets may adversely affect the results of operations 
ﬁnancial condition and cash ﬂows of the group
 volatility in raw material prices and energy prices may adversely 
affect the proﬁtability of the group and its working capital position
 the failure of the group to procure key raw materials may lead to 
production interruptions that may adversely affect the proﬁtability 
of the group and its working capital position
 the markets in which the group operates are highly competitive 
and the group may lose market share to other producers or sellers 
of waterbased polymers or to other products that can be substituted 
for the products of the group
 the group operates in a number of different geographies which may 
present different legal and regulatory risks in addition the group 
operates in a number of different tax regimes which may increase 
the volatility of the effective tax rate and cash tax rate of the group
 the ability of the group to compete is highly dependent on its ability 
to develop technological innovations to introduce new products and 
to protect its intellectual property trade secrets and knowhow failure 
to do so could have an adverse affect on the group 
 the group may be liable for damages based on product liability claims 
brought against its customers in enduse markets in addition 
compliance with extensive environmental health and safety laws and 
regulations could require material expenditure changes in the operations 
of the group or site remediation
 the manufacture storage and transportation of chemicals is inherently 
dangerous and any incidents relating to the hazards which the group 
faces may adversely affect its ﬁnancial condition results of operations 
and reputation
 fluctuations in currency exchange rates may signiﬁcantly impact the 
results of the operations of the group and may signiﬁcantly affect the 
comparability of ﬁnancial results between ﬁnancial periods
 credit market conditions and credit ratings may restrict the ability of the 
group to obtain credit facilities or to reﬁnance its existing debt facilities 
in the longer term in addition interest rate ﬂuctuations and increases 
in bank lending margins may increase the group’s costs of borrowing 
in the longer term and 
 the group has funding risks relating to deﬁned beneﬁt pension schemes 
and any deterioration in the value of assets in which the pension scheme 
has invested as against the ﬁnancial obligations to make payments to 
members of the schemes could have an adverse affect on the group
report of the directors 
for the year ended 31 december 2012 continued 29 synthomer plc annual report 2012
 governance 
not all these risks can be managed or substantially mitigated the group 
has a number of key processes to effect reduction and some mitigation 
of operational risks where reasonably practical including
 active management processes to manage margins and recover input 
cost increases from customers
 sourcing strategies to access multiple sources for key raw materials
 actively managed innovation processes
 product quality control and testing processes
 a centralised internal audit function dedicated to she issues and 
programmes for continuous improvement across all major 
she areas and 
 internal audit and business performance review processes the format 
of which were enhanced in 2012
financial risks are partly mitigated through currency and interest rate 
hedging and the group has a policy on leverage limits and seeks to ensure 
it has adequate borrowing headroom on a twelve month forecast basis
going concern
the directors have acknowledged the latest guidance on going concern 
and in reaching their conclusions have taken into account factors including
 the group’s euro denominated £150 million term loan facility and 
£60 million multicurrency revolving credit facility the termination dates 
of which were extended from 13 december 2013 to 31 march 2015 
on 22 december 201 1
 the second repayment under the 2004 series private placement notes 
of us70 million due in september 2014
further discussion on liquidity and ﬁnancing is provided in the financial 
review
after making enquiries and taking account of reasonably possible 
changes in trading performance the directors have concluded that 
the company and the group have adequate resources to continue in 
operational existence for the foreseeable future
accordingly they continue to adopt the going concern basis in preparing 
the annual report and accounts
key performance indicators
management monitors a number of ﬁnancial and nonﬁnancial key 
performance indicators which are disclosed within the chief executive 
ofﬁcer’s report the financial review and corporate social responsibility 
report these key performance indicators include divisional sales and 
underlying operating proﬁt net borrowings reportable safety incidents 
energy usage and water consumption
cautionary statement
the purpose of this report is to provide information to the members of 
the company it contains certain forwardlooking statements with respect 
to the operations performance and ﬁnancial condition of the group 
by their nature these statements involve uncertainty since future events 
and circumstances can cause results and developments to differ materially 
from those anticipated the forwardlooking statements reﬂect knowledge 
and information available at the date of preparation of this report and the 
company undertakes no obligation to update these forwardlooking 
statements nothing in this report should be construed as a proﬁt forecast
independent auditors
a resolution to appoint pricewaterhousecoopers llp as the company’s 
auditor will be proposed at the annual general meeting
annual general meeting 
the annual general meeting will be held at 1 100 am on 
thursday 16 may 2013 at manor of groves hotel high wych 
sawbridgeworth hertfordshire cm21 0ju
by order of the board
r atkinson
company secretary
14 march 2013 30 synthomer plc annual report 2012
report from the chairman
dear shareholder
as well as achieving a second successive year of record proﬁtability 2012 
also saw an enhancement in our standards of corporate governance
i succeeded peter wood as chairman of the board in may 2012 and 
during the course of the year three new independent nonexecutive 
directors were recruited to regain board balance following the retirement 
of peter and sandy dobbie at the 2012 annual general meeting the 
appointment of just jansz ishbel macpherson and jinya chen widened 
the general diversity skills and business background of the board and 
i was delighted to welcome them to the company ishbel macpherson 
has subsequently announced her intention not to stand for election at 
the forthcoming agm 
our chairman of the audit committee jez maiden highlights the work of 
that committee later in this report which included a tender process for the 
group’s audit services and implementation of an internal audit programme 
i took over as chairman of the remuneration committee in february 2013 
and a report on all matters relating to remuneration and the work 
performed in 2012 under the chairmanship of sandy and subsequently 
ishbel is also set out separately considerable work will be required 
in 2013 to adapt to the new uk government proposals for reforming 
directors’ remuneration and associated reporting and i will oversee the 
implementation of these important changes
the nomination committee which i have chaired since march 2012 
had a very busy year as a result of the recruitment referred to above 
the committee will now manage the process for the appointment of 
a further independent nonexecutive director following the vacancy that 
will arise in may and will seek to ensure that an appropriate mix of skills 
experience and diversity is maintained
there is little compulsory change required to corporate governance 
reporting for 2012 however your board is monitoring closely the signiﬁcant 
developments which are expected to impact on reporting for 2013 
as a number of these developments still require ﬁnalisation we have only 
adopted the anticipated changes to a limited extent in this year’s annual 
report 2012 is the last year in which we report against the uk corporate 
governance code “the code” which was published in june 2010 by the 
financial reporting council following the publication of a revised code in 
september 2012 which is applicable to our reporting for 2013
our full statements on compliance and the application of the main 
principles of the code are set out in the following sections of this report
neil johnson
chairman
statement of compliance
the company considers that it has complied throughout the ﬁnancial year 
ended 31 december 2012 with the provisions set out in the code except 
in relation to the composition of the board and its nomination committee 
further details on these matters are set out in this report
application of the code
the main principles of the code were applied as follows
leadership and effectiveness
operation of the board
the activities of the company are controlled by the board which 
during 2012 comprised two executive directors and seven to eight 
nonexecutive directors in anticipation of the retirement of mr p s wood 
and dr a a dobbie at the 2012 annual general meeting and the 
appointment of mr n a johnson as chairman three new independent 
nonexecutive directors were recruited during the course of the year 
dr j j c jansz ms i j s macpherson and mr j chen the roles of 
chairman and chief executive ofﬁcer are clearly divided between 
mr johnson who heads the board in his capacity as nonexecutive 
chairman and mr a m whitﬁeld who has responsibility for the running 
of the company’s business as chief executive ofﬁcer the nonexecutive 
directors all have wide business and boardroom experience gained in 
a broad range of business sectors
the board has reserved to itself a schedule of matters which includes 
setting longterm objectives for the group and the strategies to be 
employed in achieving them setting policies in the areas of safety health 
and the environment recruitment and employment risk management 
and treasury and subject to materiality thresholds decisions on the raising 
of capital ﬁnancial commitments capital expenditure acquisitions and 
disposals and the prosecution defence and settlement of litigation
during 2012 the board held six scheduled meetings to review current and 
projected performance and to determine strategic issues the directors 
receive in advance full information on all matters to be discussed at board 
meetings as well as a detailed review of performance prepared by the 
chief executive ofﬁcer the board has established audit nomination and 
remuneration committees which are discussed below
in addition arrangements are made each year for the board to visit 
up to two of the group’s operational sites and meet local management 
ad hoc site visits are facilitated for individual nonexecutive directors 
on request during 2012 the board held a meeting at the ofﬁces of its 
malaysian businesses in kuala lumpur in conjunction with that board 
meeting presentations were given by local senior management and the 
directors visited the group’s malaysian plants
the board has delegated to the chief executive ofﬁcer responsibility for 
the development and preparation of the business plan for the group and 
the annual group budget for recommendation to the board as the senior 
executive director the chief executive ofﬁcer is responsible for all aspects 
of daytoday operational control of the group and execution of the group 
strategy the chief executive ofﬁcer has established and chairs an 
executive committee whose other members are the chief financial ofﬁcer 
the chief operating ofﬁcer the chief counsel and company secretary 
the vice president – human resources the vice president – europe 
middle east  africa the vice president – south east asia the vice 
president – finance and the vice president operational excellence  
engineering to assist him in the performance of his duties and which 
meets once a month the chairman has available to him the minutes of the 
executive committee and all directors receive a monthly trading summary 
and commentary from the chief financial ofﬁcer and an update report from 
the chief executive ofﬁcer
corporate governance 31 synthomer plc annual report 2012
governance
board membership and balance
the chairman chief executive ofﬁcer and senior independent director 
are identiﬁed on page 26 the chairmen and members of the audit 
nomination and remuneration committees are identiﬁed below the board 
considers mr j k maiden dr j j c jansz ms i j s macpherson and 
mr j chen are independent in accordance with the provisions of the code
for some ﬁve months of 2012 the company was not in compliance with 
the requirement of code provision b12 for half the board excluding the 
chairman to comprise independent nonexecutive directors following 
completion of a recruitment exercise in 2012 which culminated with the 
appointment of mr j chen in october 2012 the board returned to 
compliance with this requirement
the board held a total of six meetings in 2012 in addition the chairman 
held one separate meeting with the nonexecutive directors without the 
executive directors being present to appraise the performance of the 
executive management the nonexecutive directors also met once 
without the chairman to appraise his performance
the table below shows the number of meetings of the board audit 
remuneration and nomination committees held during the year and the 
number of meetings attended by each director where a director is unable 
to attend a board or committee meeting his views on agenda items are 
canvassed in advance of the meeting and incorporated into the discussions
number of meetings held board audit remuneration nomination
64 4 1
number of meetings attended
d c blackwood
66 na na na
a g catto
66 na na na
a a dobbie
 6
33 11 22 na
n a johnson
66 01 22 11
lee hau hian
56 na na na
j k maiden
66 44 34 01
a m whitﬁeld
66 na na 11
p s wood
 6
33 na na na
d fournier
 1 5
12 11 12 na
j j c jansz
 2
44 33 22 na
i j s macpherson
 3
23 33 22 na
j chen
 4
11 na na na
1 appointed on 1 january 2012
2 appointed on 2 april 2012
3 appointed on 17 may 2012
4 appointed on 5 october 2012
5 retired on 13 march 2012
6 retired on 17 may 2012
induction and training
induction arrangements are in place in order to ensure new directors 
receive a full formal and tailored induction on appointment the chairman 
reviews and agrees the training and development needs of the directors 
and the skills and knowledge of the board as a whole are updated by 
brieﬁngs provided by the company’s internal resources and materials 
and seminars offered by external advisers
performance evaluation
performance evaluations of the board its committees and its directors 
were carried out in the last year by the following internal processes
 an assessment of the performance of individual nonexecutive 
directors is carried out by the chairman through a rolling programme 
of onetoone discussions using performance evaluation questions as 
the centrepiece for those discussions every nonexecutive director is 
assessed in this way once a year 
 the performance of the executive directors was reviewed in august 2012 
at a meeting of the nonexecutive directors chaired by the chairman 
 a meeting of the nonexecutive directors in the absence of the 
chairman chaired by the senior independent director was held in 
november 2012 to evaluate the performance of the chairman taking into 
account the views of the executive directors and 
 the board and its committees carry out an annual selfassessment of 
performance led by the chairman and the chairman of each committee 
respectively the results of assessment questionnaires completed by 
those chairmen were reviewed by the relevant committees and the 
board and were shared with and discussed by the board as a whole 
at its meeting in november 2012 and january 2013 
2012 saw signiﬁcant change to the board’s composition with a 
strengthening of its effectiveness and a widening of its skills business 
background and general diversity due to this change it was considered 
that it would be too early to consider the introduction of an externally 
facilitated board evaluation process during 2012
nonexecutive directors are appointed for threeyear terms all directors 
submit themselves for annual election at each annual general meeting
board committees
the board has formally established nomination audit and remuneration 
committees each with their own terms of reference which set out their 
respective roles and the authority delegated to them by the board copies 
of the terms of reference are available upon request from the company 
secretary and can also be downloaded from the company’s website 
since 17 may 2012 the nomination committee has not complied with 
the composition requirements of code provision b21 in that a majority 
of its members were not independent nonexecutive directors the board 
considers that the current composition of the nomination committee 
provides it with the ﬂexibility and speed of decision making that is necessary 
in connection with the interview process required for making nominations 
to ﬁll board vacancies accordingly the board does not currently intend to 
make any changes to the composition of this committee all nonexecutive 
directors have a standing invitation to attend committee meetings unless 
they are notiﬁed otherwise  32 synthomer plc annual report 2012
audit committee
dear shareholder
during 2012 the committee carried out substantial work in connection 
with the provision of the group’s external audit services and internal 
audit processes
as the external auditor had been in place since 2002 and their appointment 
was last reviewed in 2009 it was decided that 2012 was an appropriate 
point at which to put the group’s audit services contract out to tender 
the committee oversaw the tender process which was initiated in 
april 2012 and conducted by senior ﬁnancial management and involved 
formal proposals and presentations from three audit ﬁrms following a 
rigorous process which took into account qualiﬁcation expertise 
resources independence and value for money the committee’s 
recommendation to the board that pricewaterhousecoopers llp be 
appointed was accepted and the appointment was made on 12 july 2012 
there were no contractual obligations that acted to restrict the committee’s 
recommendation i would like to thank the outgoing auditors deloitte llp  
for their service over the last ten years and welcome on your behalf 
pricewaterhousecoopers llp as our new auditor
following an assessment of the effectiveness of the 2012 audit carried 
out by way of a review and discussion with the external audit team and 
the company’s senior ﬁnancial management the committee is pleased 
to recommend to you that pricewaterhousecoopers llp be appointed 
as auditor at the forthcoming annual general meeting
as anticipated in the 201 1 audit committee report a formalised programme 
of outsourced internal audit services managed by a member of the 
company’s senior ﬁnancial management was put into operation from 
the beginning of 2012 the committee approved the appointment of 
kpmg uk llp at the end of 201 1 as the provider of the outsourced 
services and agreed a three year work plan with reports to be made to 
the committee twice a year the ﬁrst year of the programme has worked 
well with all the businesses acquired as part of the polymerlatex 
acquisition in 201 1 being the subject of internal audit reports in 2012 
the second year of the programme will be rolled out in 2013 and is being 
supplemented as it was in 2012 by operational review visits performed 
by senior ﬁnancial management
the committee also covered the other matters delegated to it by the 
board under its remit during the course of the year and these are reported 
on in the following section of this report
finally i would like to thank my fellow committee members whose 
details are set out below for their support and look forward to working 
with alex catto who joined the committee this month
jez maiden
audit committee chairman
audit committee membership since 1 january 2012
jez maiden chairman
just jansz from 17 may 2012
alex catto from 6 march 2013
ishbel macpherson from 17 may 2012 until 7 february 2013
sandy dobbie until 17 may 2012
neil johnson until 17 may 2012
dominique fournier until 13 march 2012
the role of the audit committee
throughout 2012 the audit committee was chaired by mr j k maiden 
and comprised three independent nonexecutive directors mr maiden is 
considered by the board to have ‘recent and relevant ﬁnancial experience’ 
for the purposes of provision c3 1 of the code due to his current ﬁnancial 
position outside the group the committee has established a detailed 
remit regarding the application of ﬁnancial reporting and internal control 
principles which covers
 monitoring the integrity of the ﬁnancial statements of the group and any 
formal announcements relating to the group’s ﬁnancial performance and 
reviewing signiﬁcant ﬁnancial reporting judgements contained in them 
 reviewing the group’s internal ﬁnancial controls and the group’s internal 
control and risk management systems 
 monitoring and reviewing the effectiveness of the group’s internal audit 
function
 making recommendations to the board regarding the appointment 
of the external auditor and approving their remuneration and terms 
of engagement
 reviewing and monitoring the external auditor’s independence 
and objectivity and the effectiveness of the audit process and
 developing and implementing policy on the engagement of the 
external auditor to supply nonaudit services
the chief financial ofﬁcer and senior members of his department attend 
meetings of the committee as part of the review of the group’s interim 
and annual ﬁnancial statements prior to their submission to the board 
the committee meets periodically with the company’s auditor without 
management present to discuss the adequacy of the group’s ﬁnancial 
management internal controls and information systems and to review the 
terms of their engagement effectiveness independence and objectivity 
with regard to seeking to ensure the independence and objectivity of 
the auditor the audit committee’s policy is to avoid the auditor providing 
services in areas which may create or be perceived to create a conﬂict of 
interest accordingly other than in circumstances where time constraints 
render it impractical or assignments are of a minor nature the auditor is not 
invited to tender or propose for services of the following nature corporate 
ﬁnance legal information technology and systems recruitment or 
remuneration accounting internal audit or control acquisition due 
diligence valuations or appraisals actuarial or general business consulting 
in addition the auditor has been requested not to provide services to 
executive directors or senior executives except where approved by the 
audit committee nonexecutive directors are required to disclose any 
relationship they have with the auditor prior to appointment in july 2012 
pricewaterhousecoopers llp were providing and have continued to 
provide personal tax advice to the chief executive ofﬁcer and expatriate tax 
services to the group’s senior managers who are required to work outside 
their home country the committee do not consider that the provision of 
these services creates any conﬂict of interest as they are of a minor nature 
and are provided by individuals and teams who are not involved in the audit 
and accordingly have approved their continuation
details of audit and nonaudit fees paid to the auditor in 2012 are set out 
in note 6 on page 56 nonaudit fees principally relate to tax compliance 
and tax advisory services 
corporate governance
continued 33 synthomer plc annual report 2012
governance
the committee met formally 4 times during 2012 and carried out 
the following main activities in addition to the items mentioned in the 
chairman’s overview
 reviewed the ﬁnancial statements in the 201 1 annual report and 
the 2012 interim statement 
 reviewed the scope and effectiveness of the external audit 
 monitored the effectiveness of the internal controls and risk 
management 
 received reports from the external auditor on the major ﬁndings 
of its work 
 approved the annual audit plan 
 reviewed its remit and
 reviewed the group’s whistleblowing arrangements
in addition the chairman of the committee had regular dialogue with 
the auditor during the course of the year
nomination committee
the composition of the nomination committee since 1 january 2012 
has been as follows
neil johnson chairman since 17 may 2012
jez maiden
adrian whitﬁeld
peter wood until 17 may 2012 and chairman until that date
sandy dobbie until 17 may 2012
the committee is responsible for the regular review of the structure size 
and composition of the board and the making of recommendations with 
regard to any changes leading the process for board appointments 
and nominating candidates for nonexecutive positions and considering 
succession planning
the committee led the process for nominating dr j j c jansz 
ms i j s macpherson and mr j chen for appointment as independent 
nonexecutive directors this process involved a thorough review 
of a range of candidates put forward by an independent recruitment 
consultancy which conducted an extensive search process the diversity 
including gender of the board was taken into account by the committee 
when making nominations
the committee also reviewed senior management succession planning 
within the group during the course of the year
the nomination committee held one formal meeting during 2012 and 
a number of informal meetings and telephone calls as well as numerous 
interviews in connection with the nomination process referred to above
the board adopted a policy on diversity in march 2013 this policy seeks 
to ensure that diversity in its broadest sense is taken into account in the 
process of making appointments on merit against objective selection 
criteria copies of the policy are available at wwwsynthomercom
remuneration committee
all matters relating to the remuneration committee and remuneration 
are covered in the remuneration report set out on pages 35 to 39
relations with shareholders
dialogue with institutional investors is conducted on a regular basis by the 
chief executive ofﬁcer and the chief financial ofﬁcer and meetings take 
place following the announcement of interim and full year results and at 
other times according to circumstances
the board has adopted a set of shareholder communication principles 
in order to ensure that board members develop an understanding of the 
views of the group’s major shareholders these principles require the 
chairman to be present with the chief executive ofﬁcer and the chief 
financial ofﬁcer at sufﬁcient shareholder presentations and meetings 
that he fully understands the issues and concerns of major shareholders
the chief executive ofﬁcer reports on shareholder relations at each 
board meeting communications with shareholders relating to corporate 
governance matters are conducted by the chairman with the assistance 
of the chairmen of the audit nomination and remuneration committees 
written reports on all meetings between nonexecutive directors and 
institutional shareholders and their representative bodies are presented 
to the board at the ﬁrst opportunity following such meetings as is all 
correspondence with them
the senior independent director is available to shareholders if they have 
concerns which contact through the normal channels of the chairman or 
the chief executive ofﬁcer has failed to resolve or for which such contact 
is inappropriate
the board seeks to encourage participation of all shareholders and in 
particular private investors at the company’s annual general meeting and 
endeavours to ensure all board members are in attendance in particular 
the chairmen of the remuneration audit and nomination committees 
are available to answer questions
the company makes use of its website wwwsynthomercom to 
communicate with its shareholders where it publishes interim and full year 
results company announcements share price and corporate governance 
and other investor information
accountability
an explanation of the directors’ responsibility for preparing the 
ﬁnancial statements their report that the business is a going concern 
a responsibility statement and their statement as to disclosure of information 
to the auditor are set out on pages 40 and 28 respectively statements by 
the auditor about its reporting responsibilities are set out on pages 41 and 
79 respectively
a report on the approach to internal control is set out below the directors 
endeavour to make the annual report and ﬁnancial statements as 
informative and understandable as possible
internal control
the board of directors has ultimate responsibility for the group’s system 
of internal control and sets appropriate policies to ensure that the code 
requirements on internal control are met the system of internal control 
deployed within the group is designed to reduce the risks of failure to 
meet business objectives but these risks cannot be eliminated the internal 
control system adopted can therefore only provide reasonable not 
absolute assurance about meeting such business objectives or against 
material misstatement or loss
the group’s internal controls over the ﬁnancial reporting and consolidation 
processes are designed under the supervision of the chief financial ofﬁcer 
to provide reasonable assurance regarding the reliability of ﬁnancial reporting 
and the preparation and fair presentation of the group’s published ﬁnancial 
statements for external reporting purposes in accordance with ifrs 34 synthomer plc annual report 2012
an ongoing process for identifying evaluating and managing signiﬁcant 
business risks faced by the group has been in place since 2000 
this has since been built upon so as to embed further the process into 
the businesses and to enhance the usefulness of the relevant processes 
and information and has been operated throughout 2012 and up to the 
date of approval of the annual report and accounts and accords with the 
turnbull guidance
the system is applied across the group on a functional and regional basis 
and a ‘bottom up’ risk proﬁle is created by evaluating the information at an 
operational and group level individual senior managers within synthomer’s 
businesses identify and assess key risks associated within their area of 
responsibility based on formal management information and interaction 
with colleagues customers suppliers and other parties
the individual submissions are consolidated reviewed and agreed by 
the executive committee a business risk report is prepared that is closely 
linked to business strategy and takes account of key internal and external 
factors risks are prioritised using a common risk matrix which forms the 
basis of a single corporate risk report that is reviewed and discussed by 
the audit committee
the individual business risk reports are formally reviewed every six months 
out of which a revised report is submitted which identiﬁes changes in the 
risk environment
the process was last reviewed by the synthomer board of directors in 
march 2013 the nature of the risks identiﬁed as a result of this process 
during the year primarily relate to matters of an operational and ﬁnancial 
nature and the most signiﬁcant of those which faced the group in 2012 
are reviewed in the reports of the chairman chief executive ofﬁcer 
chief financial ofﬁcer and the report of the directors
risks associated with safety health and the environment are by the nature 
of the group’s business always of the utmost concern and the corporate 
social responsibility report on pages 15 to 25 reviews the group’s 
performance in this connection in 2012
the processes which are used by the board either directly or where 
appropriate through the audit committee to review the effectiveness of the 
internal control and risk management systems including in relation to the 
ﬁnancial reporting process and the process for preparing consolidated 
accounts include the following
 a review of the external audit work plan 
 consideration of reports from management and external parties 
including the auditor on the system of internal ﬁnancial control and 
any material control weaknesses 
 a quarterly review of safety health and environmental performance 
 discussion with management of the actions taken on any possible 
problem areas for the business identiﬁed by board members or in 
the audit report 
 consideration of a consolidated risk management report setting out 
the main conclusions from the internal control process and 
 a biannual report from the internal audit function
in addition the board
 receives copies of the minutes from all audit committee meetings 
 considers the role of the group insurance programme 
 receives regular written and oral reports from management on all 
aspects of production operations ﬁnancial and risk management 
matters and 
 in compliance with provision c2 1 of the combined code the board 
regularly reviews and approves the effectiveness of the group’s system 
of internal controls
the board conﬁrms that a review of the effectiveness of the company’s 
risk management and internal control systems was carried out in 2012
environmental social and governance matters
in january 2007 the association of british insurers abi published a revised 
version of its guidelines on responsible investment disclosure these 
guidelines require statements on the extent to which environmental social 
and governance matters are taken into account by the board and identiﬁed 
assessed managed and monitored particularly in relation to the risks and 
opportunities they present to the value of the company
the company is a member of the ftse4good index
environmental matters
the maintenance of high standards of environmental together with health 
and safety protection is central to the company’s business a separate 
statement on safety health and environmental she matters has been 
a feature of the annual report for a number of years the corporate social 
responsibility report statement on pages 15 to 25 incorporates the 
abi guidelines and includes a report on the initiatives the company 
has adopted regarding sustainable development
social and ethical matters
the board takes account of social and ethical matters as part of its review 
of internal control which by virtue of its approach to risk identiﬁcation 
covers areas which encompass social and ethical matters
the board is conscious of its responsibility to the communities in which 
the group’s businesses operate and encourages local engagement 
by management which includes supporting environmental health and 
education initiatives
the board is also aware of the reputational and legal risks associated with 
social and ethical issues and has a groupwide code of business conduct 
on corruption and anticompetitive activities which is available on the 
company’s website and upon request from the company secretary the 
purpose of this code is to ensure that the group’s employees have a clear 
understanding of the principles that are important in these areas when 
conducting the group’s business the application of the code is explained 
to senior management at regular intervals and they are charged with its 
communication throughout their businesses supported by internal and 
external training a compliance procedure involving annual certiﬁcation by 
regional senior management and a procedure for maintaining a register of 
and where appropriate gaining prior approval for gifts entertainment and 
corporate hospitality operates throughout the group a report is made to 
the audit committee annually on the code and the company’s 
whistleblowing procedure
governance
the board’s approach to governance training of directors and identiﬁcation 
and assessment of risk is set out above
corporate governance
continued 35 synthomer plc annual report 2012
governance
the following report complies with the relevant provisions of the 
large and mediumsized companies and groups accounts and reports 
regulations 2008 and satisﬁes the requirements of the listing rules of 
the financial services authority and the uk corporate governance code 
which was published in june 2010 by the financial reporting council
principal areas of focus for the remuneration committee during 2012
following a high level of activity in 201 1 including a review of remuneration 
policies the introduction of a new longterm incentive plan and a review of 
nonexecutive directors’ fees the remuneration committee “committee” 
dealt with more routine matters in 2012 these principally comprised 
carrying out pay reviews for the executive directors the setting of annual 
bonus targets for 2012 and determining performance targets and making 
awards under the longterm incentive plan the committee also oversaw 
the introduction of revised share ownership guidelines for the executive 
directors and senior management
the salary increase for the chief executive ofﬁcer effective from 
1 january 2013 included implementation of a commitment arising from 
the 201 1 remuneration review but executive director pay reviews otherwise 
reﬂected inﬂation related awards the fees paid to the nonexecutive 
directors remained static in 2012 2012 saw the making of normal awards 
for the ﬁrst time under the performance share plan introduced in 201 1 and 
awards made in 2010 under the now superseded 2002 longterm incentive 
plan 2002 psp were conﬁrmed as having fully vested in march 2013 when 
tested under the performance criteria based on absolute and relative total 
shareholder return 
role of the remuneration committee and its advisers
during 2012 the committee comprised three independent nonexecutive 
directors with dr dobbie handing over the role of chairman to 
ms macpherson in may 2012 the composition of the committee 
since 1 january 2012 has been as follows
neil johnson until 17 may 2012 and since 7 february 2013 and chairman
jez maiden
just jansz since 17 may 2012
ishbel macpherson from 17 may 2012 until 7 february 2013 and chairman 
until that date
sandy dobbie until 17 may 2012
dominique fournier until 13 march 2012
attendance at committee meetings during 2012 is set out on page 31
the committee is responsible for determining in agreement with the 
board the company’s policy on executive remuneration and the speciﬁc 
remuneration for the chairman and each of the executive directors 
including pension rights within the terms of the agreed policy the 
committee is also responsible for reviewing the remuneration of senior 
executives throughout the group the committee was assisted in its 
deliberations on the chief financial ofﬁcer’s remuneration by the chief 
executive ofﬁcer and also took independent advice from and used the 
services of new bridge street a trading name of aon hewitt limited 
during the year aon hewitt limited is part of aon group as is aon limited 
which provides insurance broking services to the group the committee 
is satisﬁed that this in no way compromises the provision of independent 
advice by new bridge street
new bridge street was paid £1 1500 for its services in 2012 which 
included assistance with the preparation of the 201 1 remuneration report 
to shareholders general advice to the committee and guidance on the 
implications of the uk government’s proposed remuneration reporting 
regulations no director is involved in any discussions relating to their 
own remuneration
the committee met four times during 2012
remuneration policy
executive directors’ remuneration
the company’s central policy for 2012 was and continues to be to structure 
executive pay in such a way that key executives may be recruited motivated 
and retained through being offered remuneration packages that are 
competitive the committee has the discretion to consider the company’s 
performance on environmental social and governance matters when 
setting the remuneration of the executive directors
remuneration of the executive directors comprises
 a base salary 
 performance related incentives being an annual cash bonus plan 
and the 201 1 performance share plan and 
 pension and ancillary beneﬁts 
the major element of the remuneration package is a competitive basic 
salary with a further signiﬁcant proportion being structured so as to 
link rewards to corporate performance pension and other beneﬁts are 
provided at a level so as to assist with recruitment and retention incentive 
arrangements were designed in accordance with the provisions of 
schedule a to the uk corporate governance code no elements 
of remuneration other than basic salary are pensionable
the details of these are set out below
the committee does not consider that the incentive structure for senior 
executives gives rise to environmental social or governance risks by 
inadvertently motivating irresponsible behaviour 
base salaries
the basic salary of senior executives is reviewed with effect from 1 january 
each year the committee also takes into account the pay and employment 
conditions elsewhere in the group when considering annual salary 
increases and total remuneration
during 2012 the chief executive ofﬁcer and the chief financial ofﬁcer 
received basic annual salaries of £472500 and £305000 respectively 
with increases to £500000 582 and £312625 25 respectively 
implemented from 1 january 2013
annual incentive arrangements
for 2012 the company operated cash bonus plans for the executive 
directors and senior management related to the achievement of proﬁt 
before tax targets the absolute entry level proﬁt targets under the plan 
were not achieved however goals for synergy and integration beneﬁts were 
met and accordingly the remuneration committee exercised its discretion 
and awarded bonuses of 27 of salary to the executive directors for 2012 
the potential maximum amount payable to the executive directors under 
the plan remained at 100 of basic annual salary for senior management 
the potential maximum amount payable under the 2012 annual cash bonus 
plans were subject to limits of between 50 to 80 of basic annual salary 
depending on levels of seniority all bonus arrangements inherited as a 
result of the acquisition of polymerlatex in 201 1 have been terminated 
for 2013 the annual bonus arrangements will operate within a similar 
framework to 2012
share plans
201 1 performance share plan
the 201 1 performance share plan was introduced in 201 1 following 
shareholder approval at a general meeting held in june 201 1 and covers 
the executive directors and senior management an award consists of a 
right to acquire shares which can be exercised for a nominal price subject 
to the company satisfying performance conditions the value of shares 
awarded under the 201 1 performance share plan in any ﬁnancial year to 
any individual normally may not exceed 150 of their annual basic salary 
however in line with market practice bigger awards may be made in 
exceptional circumstances of up to a further 150 of salary
directors’ remuneration report 36 synthomer plc annual report 2012
the award policy for 2012 was and remains for 2013 that annual awards 
of 100 of salary are made and should this policy increase the committee 
would consult with key shareholders in advance
the current performance policy is that two performance conditions apply 
to normal annual awards under the 201 1 performance share plan one half 
of the awards will vest subject to a relative total shareholder return tsr 
performance condition comparing the company’s tsr against the tsr 
of the constituents of the ftse 250 index excluding investment trusts and 
ﬁnancial services companies over a three year period an underpin applies 
to the tsr performance condition which permits the committee at its 
discretion to scale down the vesting of this part of an award in exceptional 
circumstances if it considers that the level of vesting is not reﬂective of the 
company’s underlying ﬁnancial performance the other half of the awards 
will vest subject to an earnings per share eps performance condition 
relating to the annualised three year growth in eps the committee has 
the discretion to reduce or defer the level of vesting of an award under 
both the tsr and eps performance conditions where an event has 
occurred such as a material health and safety incident as a result of 
which the committee considers that it would be inappropriate for vesting 
to occur in accordance with the tsr and eps performance conditions
the committee chose targets that comprise an equal mix of tsr and 
eps growth as they consider it provides an appropriate blend of share price 
and ﬁnancial conditions which best aligns the interests of management with 
the interests of shareholders
the 201 1 performance share plan provides for clawback if the group’s 
accounts have been materially misstated or there has been an error in the 
calculation of any performance conditions which results in an overpayment
the ﬁrst normal awards were made under the 201 1 performance share 
plan in march 2012 of 100 of salary to the chief executive ofﬁcer and the 
chief financial ofﬁcer and awards of between 20 and 100 of salary 
were made to a group of senior executives the performance conditions 
attaching to those awards are set out on page 39
in order to further align the interests of the executive directors and 
shareholders there are share ownership requirements in connection with 
both the 2002 psp and the 201 1 performance share plan requiring the 
retention of 25 of the shares acquired by the executive director until such 
time as the executive directors’ holding of ordinary shares in the company 
has been built up to a level equivalent in value to annual basic salary taking 
into account shares comprised in vested unexercised awards as permitted 
by the share ownership guidelines this target as at 31 december 2012 has 
been met
compliance with share ownership guidelines based on
director
actual share ownership
as a  of 2012 salary
calculated on closing
share price 311212
actual share ownership
plus vested unexercised
awards as a  2012 salary
calculated on closing
share price on 311212
a m whitﬁeld
6 100
d c blackwood 11 100
during 2012 866456 shares were the subject of awards made under the 
201 1 performance share plan
2002 psp
the shares comprised in the awards granted in 2010 under the 2002 
psp have vested in full as the performance conditions related to absolute 
and relative total shareholder return were exceeded by a margin of 400 
and 100 respectively 
for the purposes of determining the extent to which performance 
conditions have been met tsr data is sourced from external advisers 
and relevant calculations are presented to the committee by the group 
finance and company secretary functions for its review before formal 
vesting takes place
pension arrangements
mr a m whitﬁeld and mr d c blackwood are eligible to participate in the 
group personal pension plan and receive payments of 25 and 20 of 
basic annual salary respectively from the company which they may use 
either in conjunction with that plan andor to enable them to make their 
own arrangements there are no unfunded pension promises or similar 
arrangements for directors
beneﬁts
ancillary beneﬁts comprise a fully expensed car and private health 
insurance
executive directors’ service contracts
no director other than mr a m whitﬁeld and mr d c blackwood has 
a service contract mr whitﬁeld’s contract is dated 22 november 2005 
and mr blackwood’s is dated 12 september 2007  both contracts have 
no unexpired term provide for a notice period of one year or at the option 
of the company payment of an amount equal to one year’s salary on 
early termination and otherwise make no provision for predetermined 
compensation on termination
the committee’s policy on contracts and notice periods for executive 
directors is to seek to comply with best practice in corporate governance
nonexecutive directorships held by the executive directors
mr whitﬁeld is a nonexecutive director of chemical industries association 
limited for which he does not receive any remuneration he was also 
a nonexecutive director of az electronic materials sa until 25 may 2012 
for which he received and retained £22564 in 2012 mr blackwood was 
a member of the board for actuarial standards until june 2012 for which 
he received and retained £5000 in 2012
nonexecutive directors’ remuneration and terms of appointment
the board determines the remuneration of the nonexecutive directors 
including members of the remuneration committee which is reviewed 
on a biennial basis
during 2012 the chairman’s fee was £140000 per annum with other 
nonexecutive director fees as follows £40000 per annum for those who 
do not sit on a committee £45000 per annum for those who do sit on a 
committee £50000 per annum for those who are committee chairmen 
and the senior independent director
nonexecutive directors are not eligible to receive awards under any 
of the company’s share plans or other employee beneﬁt schemes nor 
does the company make any contribution to their pension arrangements
all nonexecutive directors are appointed in writing
directors’ remuneration report
continued 37 synthomer plc annual report 2012
governance
in addition to mr n a johnson’s letter of appointment as chairman the 
company has entered into a consultancy agreement with ci international 
consulting limited for the provision of consultancy services by 
mr johnson the total of the annual fees paid to mr johnson and to 
ci international consulting limited equates to the fees due to an individual 
fulﬁlling the role of chairman of £140000 per annum the ﬁrst year of each 
director’s appointment is shown in the directors’ biographies on page 26 
the periods of appointment and the requirements for reelection of 
nonexecutive directors are provided within the performance evaluation 
section of the corporate governance report on page 31
total shareholder return over ﬁve years
the graph compares the share price performance of the company 
by reference to total shareholder return with that of the ftse 250 which 
is considered to be the most appropriate index against which to make 
a comparison
synthomer shareholder return versus ftse 250 total return
cumulative years ended 31 december 
07 08 09 10 12 11
200
180
160
140
120
100
80
60
40
20
0
synthomer ftse 250
agm approval
the directors’ remuneration report has been submitted to the 2013 annual general meeting for approval
remuneration details
the amount and components of the directors’ remuneration are set out below
audited information
directors’ remuneration
emoluments
2012
£000
2011
£000
the total amounts for directors’ remuneration and other beneﬁts were
emoluments 1435 1799
the emoluments of the individual executive directors holding ofﬁce during the year were
base
salary
2012
£
annual
incentive
 arrangements
2012
£
beneﬁts
2012
£
beneﬁts
in lieu of
pension
2012
£
total
2012
£
total
2011
£
a m whitﬁeld – highest paid director
472500
1
127575 31790 120461 752326 1031057
d c blackwood 305000 82350 24765 61000 473115 616281
1  before payment a m whitﬁeld sacriﬁced part of his basic salary pension contributions equal to the amount given up were made into a pension plan for the 
beneﬁt of his dependants the amount shown in the basic salary column reﬂects the full amount earned
the annual incentive arrangements are discussed in more detail on page 35 of the remuneration report
nonexecutive directors’ fees
the fees of the individual nonexecutive directors holding ofﬁce during the year were
2012
£
2011
£
n a johnson
106100 16667
p s wood
53318 132500
the hon a g catto
40000 37 500
dr a a dobbie
18850 46500
dato’ lee hau hian
40000 37 500
j k maiden
50000 46500
d fournier
7500 –
dr j j c jansz
33750 –
i j s macpherson
31667 –
j chen 9432 –
390617 317 167 38 synthomer plc annual report 2012
the nonexecutive directors receive no other remuneration in addition to their fee
shareholdings
given below are details of the interests of the directors in the share capital of the company at 31 december 2012 and 31 december 201 1
number of
ordinary shares
number of
options
2012 2011 2012 2011
d c blackwood
17500 40833 1736071 1602826
the hon a g catto
1946955 2046955
7741950 7741950
dato’ lee hau hian
44763 24763
n a johnson
100000 –
j k maiden
2523 2523
a m whitﬁeld
14000 14000 1671050 2507 862
dr j j c jansz
10000––
i j s macpherson
5449––
j chen –––
  nonbeneﬁcial interest
between 31 december 2012 and 22 february 2013 there were no changes in the directors’ holdings
executive options
number of options during the year
at
010112 granted lapsed exercised
at
311212
exercise
price
notional
value
£
exercise
period
a m whitﬁeld
346738
i
––346738 – –– –
1392992
ii
––696496 696496 – 1313591
12 march 2012
12 march 2019
339159
iii
–– – 339159 – 639654
11 march 2013
11 march 2020
222551
iv
–– – 222551 –419731
20 april 2014
20 april 2021
206422
v
–– – 206422 –389312
29 june 2014
29 june 2021
–206422
vi
–– 206422 –389312
15 march 2015
15 march 2022
2507862 206422 – 1043234 1671050 –3151600
  options exercised at a price of 2468 pence per share on 23 march 2012
number of options during the year
at
010112 granted lapsed exercised
at
311212
exercise
price
notional
value
£
exercise
period
d c blackwood
224647
i
–– – 224647 –423684
13 march 2011
13 march 2018
901681
ii
–– – 901681 –1700570
12 march 2012
12 march 2019
219114
iii
–– – 219114 –413249
11 march 2013
11 march 2020
133531
iv
–– 133531 –251839
20 april 2014
20 april 2021
123853
v
–– 123853 –233587
29 june 2014
29 june 2021
–133245
vi
–– 133245 –251300
15 march 2015
15 march 2022
1602826 133245 – – 1736071 – 3274229
directors’ remuneration report
continued 39 synthomer plc annual report 2012
governance
vested awards
i the awards made in 2008 under the 2002 psp were subject to the following performance conditions
a  absolute total shareholder return condition 50 of the shares comprised in the award would vest upon the company’s total shareholder return 
tsr over a three year period ended on 31 december 2010 increasing by the rise in rpi plus 1576 or more compared with the company’s 
tsr at the start of the three year performance period 25 of the shares comprised in the award would vest upon the company’s tsr increasing 
by the rise in rpi plus 927 over the three year performance period and between 25 to 50 of the shares would vest for performance between 
these points on a straightline basis with lesser performance resulting in no part of the 50 of the shares vesting 
b  relative total shareholder return condition 50 of the shares comprised in the award would vest upon the growth in the company’s tsr over 
the three year performance period exceeding the growth of the ftse 250 total return index over the same three year period by 7 69 or more 
5 of the shares comprised in the award would vest upon the growth in the company’s tsr over the three year performance period being equal 
to the growth of the ftse total return index over the same period and between 5 to 50 of the shares would vest for performance between 
these points on a straightline basis with lesser performance resulting in no part of the 50 of the shares vesting 
the 2008 awards vested in march 201 1 in full due to the maximum performance criteria being exceeded 
ii  for the awards made in 2009 under the 2002 psp the same performance conditions applied as for the awards made in 2008 measured over a three 
year period ending on 31 december 201 1 
the 2009 awards vested in march 2012 in full due to the maximum performance criteria being exceeded 
iii  for the awards made in 2010 under the 2002 psp the same performance conditions applied as for the awards made in 2008 measured over a three 
year period ending on 31 december 2012
the 2010 awards vested in march 2013 in full due to the maximum performance criteria being met
unvested awards
iv  for the awards made in april 201 1 under the 2002 psp the same absolute total shareholder condition applied to 50 of the shares comprised in 
the award as for awards made in 2008 measured over a three year period ending 31 december 2013 for the other 50 of the shares comprised in 
the award the following conditions applied 50 of the shares comprised in the award will vest upon the company’s tsr at the end of the three year 
period ending on 31 december 2013 being in the top quartile of the tsr of the companies in the ftse 250 index 5 of the shares comprised in 
the award will vest upon the company’s tsr at the end of the three year period ending on 31 december 2013 being at least equal to the ftse 250 
total return index and between 5 and 50 of the shares will vest for performance between these points on a straightline base with lesser 
performance resulting in no part of the 50 of the shares vesting
v  for the exceptional awards made in june 201 1 under the 201 1 performance share plan 100 of the shares comprised in the award will vest if 
earnings per share eps for 2013 is equal to or greater than 303 pence no shares will vest if eps for 2013 is less than 27 3 pence and between 
27 3 pence and 303 pence vesting will be on a straightline basis 
vi  the awards made in march 2012 under the 201 1 performance share plan were subject to the following performance conditions
a  relative total shareholder return condition 50 of the shares comprised in the award will vest upon the company’s tsr at the end of the three 
year period ending on 31 december 2014 being in the top quartile of the companies in the ftse 250 index excluding investment trusts and 
ﬁnancial services companies 125 of the shares comprised in the award will vest upon the company’s tsr at the end of the three year period 
ending on 31 december 2014 being at least at the median of the same comparator group and between 125 and 50 of the shares will vest 
for performance between these points on a straightline basis with lesser performance resulting in no part of the 50 of the shares vesting
b eps condition 50 of the shares comprised in the award will vest if earnings per share eps for 201 4 is equal to or greater than 32 pence per share 
no shares will vest if eps for 2014 is less than 28 pence and between 28 pence and 32 pence per share vesting will be on a straight line basis
the notional value of unexercised share options is based on the midmarket price of a share on 31 december 2012 of 1886 pence during the year the 
market price ranged between 127 4 pence and 2510 pence
by order of the board
r atkinson
company secretary
14 march 2013 40 synthomer plc annual report 2012 40 synthomer plc annual report 2012
financial statements including adoption of going concern basis
the directors are responsible for preparing the annual report and the 
ﬁnancial statements in accordance with applicable law and regulations
company law requires the directors to prepare ﬁnancial statements for 
each ﬁnancial year under that law the directors are required to prepare 
the group ﬁnancial statements in accordance with international financial 
reporting standards ifrss as adopted by the european union and article 
4 of the ias regulation and have elected to prepare the parent company 
ﬁnancial statements in accordance with united kingdom generally 
accepted accounting practice united kingdom accounting standards 
and applicable law under company law the directors must not approve 
the accounts unless they are satisﬁed that they give a true and fair view of 
the state of affairs of the company and of the proﬁt or loss of the company 
for that period 
in preparing the parent company ﬁnancial statements the directors are 
required to
 select suitable accounting policies and then apply them consistently
 make judgements and accounting estimates that are reasonable and 
prudent
 state whether applicable uk accounting standards have been followed 
subject to any material departures disclosed and explained in the 
ﬁnancial statements and
 prepare the ﬁnancial statements on the going concern basis unless it 
is inappropriate to presume that the company will continue in business
in preparing the group ﬁnancial statements international accounting 
standard 1 requires that directors
 properly select and apply accounting policies
 present information including accounting policies in a manner that 
provides relevant reliable comparable and understandable information 
 provide additional disclosures when compliance with the speciﬁc 
requirements in ifrss are insufﬁcient to enable users to understand 
the impact of particular transactions other events and conditions 
on the entity’s ﬁnancial position and ﬁnancial performance and
 make an assessment of the company’s ability to continue as a 
going concern
the directors are responsible for keeping adequate accounting records that 
are sufﬁcient to show and explain the company’s transactions and disclose 
with reasonable accuracy at any time the ﬁnancial position of the company 
and enable them to ensure that the ﬁnancial statements comply with the 
companies act 2006 they are also responsible for safeguarding the 
assets of the company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities
other matters
the directors are responsible for the maintenance and integrity of the 
corporate and ﬁnancial information included on the company’s website 
legislation in the united kingdom governing the preparation and 
dissemination of ﬁnancial statements may differ from legislation in 
other jurisdictions
responsibility statement 
we conﬁrm that to the best of our knowledge
 the ﬁnancial statements prepared in accordance with the relevant 
ﬁnancial reporting framework give a true and fair view of the assets 
liabilities ﬁnancial position and proﬁt or loss of the company and the 
undertakings included in the consolidation taken as a whole and
 the management report includes a fair review of the development and 
performance of the business and the position of the company and the 
undertakings included in the consolidation taken as a whole together 
with a description of the principal risks and uncertainties that they face
by order of the board 
a m whitﬁeld d c blackwood
chief executive ofﬁcer chief financial ofﬁcer
14 march 2013
statement of directors’ responsibilities 41 synthomer plc annual report 2012 41 synthomer plc annual report 2012
we have audited the group ﬁnancial statements of synthomer plc for the 
year ended 31 december 2012 which comprise the consolidated income 
statement the consolidated statement of comprehensive income the 
consolidated statement of changes in equity the consolidated balance 
sheet the analysis of net borrowings the consolidated cash ﬂow statement 
and the related notes 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
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ responsibilities set out 
on page 40 the directors are responsible for the preparation of the group 
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 group 
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 ethical standards for auditors
this report including the opinions has been prepared for and only for the 
company’s members as a body in accordance with chapter 3 of part 16 
of the companies act 2006 and for no other purpose we do not in giving 
these opinions accept or assume responsibility for any other purpose or 
to any other person to whom this report is shown or into whose hands it 
may come save where expressly agreed by our prior consent in writing
scope of the audit of the ﬁnancial statements
an audit involves obtaining evidence about the amounts and disclosures in 
the ﬁnancial statements sufﬁcient to give reasonable assurance that the 
ﬁnancial statements are free from material misstatement whether caused 
by fraud or error this includes an assessment of whether the accounting 
policies are appropriate to the group’s circumstances and have been 
consistently applied and adequately disclosed the reasonableness of 
signiﬁcant accounting estimates made by the directors and the overall 
presentation of the ﬁnancial statements in addition we read all the ﬁnancial 
and nonﬁnancial information in the annual report to identify material 
inconsistencies with the audited ﬁnancial statements if we become aware 
of any apparent material misstatements or inconsistencies we consider the 
implications for our report
opinion on ﬁnancial statements 
in our opinion the group ﬁnancial statements
 give a true and fair view of the state of the group’s affairs as at 
31 december 2012 and of its proﬁt and cash ﬂows for the year 
then ended
 have been properly prepared in accordance with ifrss as adopted 
by the european union and
 have been prepared in accordance with the requirements of 
the companies act 2006 and article 4 of the las regulation 
opinion on other matter prescribed by the companies act 2006 
in our opinion
 the information given in the report of the directors’ for the ﬁnancial year 
for which the group ﬁnancial statements are prepared is consistent with 
the group ﬁnancial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you if 
in our opinion
 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 
under the listing rules we are required to review
 the directors’ statement set out on page 29 in relation to 
going concern
 the part of the corporate governance statement relating to the 
company’s compliance with the nine provisions of uk corporate 
governance code speciﬁed for our review and
 certain elements of the report to shareholders by the board on 
directors’ remuneration
other matter
we have reported separately on the parent company ﬁnancial statements 
of synthomer plc for the year ended 31 december 2012 and on the 
information in the directors’ remuneration report that is described as 
having been audited
andrew latham senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
st albans
14 march 2013
independent auditor’s report to the 
members of synthomer plc
group
ﬁnancial statements 42 synthomer plc annual report 2012
consolidated income statement
for the year ended 31 december 2012
2012 2011
note
underlying 
performance
£m
special
items
£m
ifrs
£m
underlying
performance
£m
special
items
£m
ifrs
£m
continuing operations
group revenue 45 10530 – 10530 10594 – 10594 
share of joint ventures revenue 45 588 – 588 574 – 574 
total sales 11118 – 11118 1 1 168 – 11168 
group revenue 10530 – 10530 10594 – 10594 
company and subsidiaries 
before special items 1041 – 1041 916 – 916 
restructuring and site closure 3 – 67 67 – 202 202
acquisition costs 3 – – – – 14 14
amortisation of acquired intangibles 3 – 258 258 – 191 191
company and subsidiaries 1041 325 716 916 407 509 
share of joint ventures 45 49 16 33 48 13 35 
operating proﬁtloss 5 1090 341 749 964 420 544 
interest payable 7 116 – 116 123 – 123
interest receivable 7 07 – 07 07 – 07 
109 – 109 116 – 116
fair value adjustment 37 – 17 17 – 33 33
finance costs 109 17 126 116 33 149
proﬁtloss before taxation 981 358 623 848 453 395 
taxation 8 217 173 44 195 149 46
proﬁtloss for the year from  
continuing operations 764 185 579 653 304 349 
discontinued operations
loss for the year from
discontinued operations 3 – – – – 402 402
proﬁtloss for the year 764 185 579 653 706 53
proﬁt attributable to minority interests 18 05 13 16 – 16 
proﬁtloss attributable to equity  
holders of the parent 746 180 566 637 706 69
764 185 579 653 706 53
earningsloss per share 
from continuing operations
– basic11 220p 53p 167p 188p 90p 98p 
– diluted 11 216p 52p 164p 184p 88p 96p 
from continuing and 
discontinued operations
– basic11 220p 53p 167p 188p 208p 20p
– diluted 11 216p 52p 164p 184p 204p 20p
special items
the special items are shown in more detail in note 3 43 synthomer plc annual report 2012
group
ﬁnancial statements
43 synthomer plc annual report 2012
consolidated statement of comprehensive income
for the year ended 31 december 2012
 2012 2011
equity
holders of
 the parent
£m
minority
interests
£m
total
£m
equity
holders of
 the parent
£m
minority
interests
£m
total
£m
proﬁtloss for the period 566 13 579 69 16 53
actuarial gains and losses 200 – 200 340 – 340
gainslosses on cash ﬂow hedges arising during the period 05 – 05 73 – 73
exchange differences on translation of foreign operations 79 02 81 44 02 46
gains on a hedge of a net investment taken to equity 01 – 01 05 – 05 
tax relating to components of other comprehensive income
see note 8 19 – 19 13 – 13 
other comprehensive expense for the period 254 02 256 439 02 441
total comprehensive incomeexpense for the period 312 11 323 508 14 494
consolidated statement of changes in equity
for the year ended 31 december 2012
share
capital
£m
share
premium
£m
capital
redemption
reserve
£m
own
shares
£m
hedging and
translation
reserve
£m
cash ﬂow
hedging
reserve
£m
retained
earnings
£m
total
£m
minority
interest
£m
total
equity
£m
at 1 january 2012 340230509– 2928 10 26451062751
proﬁt for the period ––––– – 56656613579
actuarial gains and losses ––––– – 200 200 – 200
gains on cash ﬂow hedges
 arising during the period ––––– 05– 05– 05
exchange differences
on translation of
foreign operations –––– 79 – – 79 02 81
gains on a hedge of a net
investment taken to equity –––– 01– – 01 –01
tax relating to components 
of other comprehensive
income see note 8 ––––– – 1919– 19
total comprehensive
 expenseincome
for the period –––– 78 0538531211323
dividends paid ––––– – 153 153 – 153
sharebased payments ––––– – 55 55 – 55
at 31 december 2012 340230509– 49 23 16727491172866
at 1 january 2011 14633009– 68454651063631126
lossproﬁt for the period – ––– – – 69 69 1653
actuarial gains and losses – ––– – – 340 340 – 340
losses on cash ﬂow hedges
arising during the period – ––– – 73 – 73 – 73
exchange differences
on translation of
foreign operations – ––– 44 – – 44 02 46
gains on a hedge of a net 
investment taken to equity – ––– 05– – 05– 05
tax relating to components 
of other comprehensive
income see note 8 – ––– – – 1313– 13
total comprehensive
 expenseincome
for the period – ––– 39 73 396 508 14494
dividends paid – ––– – – 85 85 – 85
investment by minority interest –– – – – – – 2929
issue of share capital 1942059–– – – –2253– 2253
expenses on issue of shares –84 – – – – – 84 – 84
shares purchased 
by esop trust –– – 07– – – 07– 07
sharebased payments – – – 07 – – 0601 – 01
at 31 december 2011 340230509 2928 10 26451062751 44 synthomer plc annual report 2012
consolidated balance sheet
31 december 2012
note
2012
£m
2011 
£m
noncurrent assets
goodwill 13 2409 2447
acquired intangible assets 14 1356 1654
other intangible assets 15 06 09
property plant and equipment 16 1996 1836
financial asset 17 56 56
deferred tax assets 9 102 11
investment in joint ventures 18 139 143
6064 6156
current assets
inventories 19 781 738
trade and other receivables 20 1390 1467
cash and cash equivalents 21 537 859
derivatives at fair value 22 87 174
total current assets 2795 3238
current liabilities
borrowings 21 04 317
trade and other payables 23 1848 1937
current tax liability 8 388 379
derivatives at fair value 22 43 56
total current liabilities 2283 2689
noncurrent liabilities
borrowings 21 2004 2159
trade and other payables 23  – 02
deferred tax liability 9 509 614
post retirement beneﬁt obligations 24 1197 1179
3710 3954
net assets 2866 2751
equity 
called up share capital 25 340 340
share premium 2305 2305
capital redemption reserve 09 09
hedging and translation reserve 49 29
cash ﬂow hedging reserve 23 28
retained earnings 167 10
equity attributable to equity holders of the parent 2749 2645
minority interests 117 106
total equity 2866 2751
the ﬁnancial statements on pages 42 to 78 were approved by the board of directors and authorised for issue on 14 march 2013 
they are signed on its behalf by
a m whitﬁeld
d c blackwood
directors
analysis of net borrowings
note
2012
£m
2011 
£m
cash and cash equivalents 21 537 859
current borrowings 21 04 317
financial asset 17 56 56
noncurrent borrowings 21 2004 2159
net borrowings 1415 1561
special item deduct fair value adjustment 21 61 128
special item add nonrecourse factoring 21 204 210
net borrowings underlying performance 1558 1643 45 synthomer plc annual report 2012
group
ﬁnancial statements
consolidated cash ﬂow statement
for the year ended 31 december 2012
2012 2011
note £m £m £m £m
operating
cash generated from operations 26 857 802 
interest received 07 07 
interest paid 120 159
net interest paid 113 152
uk corporation tax paid – 01
overseas corporate tax paid 188 198
total tax paid 188 199
net cash inﬂow from operating activities 556 451 
investing
dividends received from joint ventures 18 32 34 
purchase of property plant and equipment 392 242
sale of property plant and equipment 11 23 
net capital expenditure and ﬁnancial investment 381 219
purchase of businesses – 3654
sale of businesses – 285 
net cash impact of acquisitions and disposals – 3369
net cash outﬂow from investing activities 349 3554
financing
equity dividends paid10 153 85
investment by minority shareholder – 29 
proceeds on issue of shares – 2253 
expenses on issue of shares – 84
purchase of own shares – 07
repayment of borrowings 27 369 43
proceeds of noncurrent borrowings – 1541 
net cash outﬂowinﬂow from ﬁnancing activities 522 3604 
decreaseincrease in cash and bank overdrafts during the year 315 501 
comprised of
cash and cash equivalents 27 311 422 
bank overdrafts 27 04 79 
315 501 
note
2012
£m
2011 
£m
net cash inﬂow from operating activities 556 451 
add back reduction in factored invoices 06 98 
add back dividends received from joint ventures 18 32 34 
less net capital expenditure and ﬁnancial investment 381 219
213 364 
net cash impact of acquisitions underlying – 3961
net cash impact of disposals underlying – 342 
investment by minority shareholder – 29 
proceeds on issue of shares – 2253 
expenses on issue of shares – 84
purchase of own shares – 07
equity dividends paid10 153 85
exchange movements 25 140 
movement in net borrowings underlying performance 85 1009
reconciliation of net cash ﬂow from operating activities 
to movement in net borrowings 46 synthomer plc annual report 2012 46 synthomer plc annual report 2012
notes to the consolidated ﬁnancial statements
31 december 2012
1 general information
synthomer plc is a company incorporated in the united 
kingdom under the companies act the address of the 
registered ofﬁce is given on page 26 these ﬁnancial 
statements are presented in pounds sterling because that 
is the currency of the primary economic environment in 
which the group operates foreign operations are included 
in accordance with the policies set out in note 2
new and amended standards adopted by the group
there are no ifrss or ifric interpretations that are effective 
for the ﬁrst time for the ﬁnancial year beginning on or after 
1 january 2012 that would be expected to have a material 
impact on the group
new standards and interpretations not yet adopted
a number of new standards and amendments to standards 
and interpretations are effective for annual periods beginning 
after 1 january 2012 and have not been applied in preparing 
these consolidated ﬁnancial statements none of these is 
expected to have a signiﬁcant effect on the consolidated 
ﬁnancial statements of the group except the following 
set out below
amendment to ias1 ‘financial statement presentation’ 
regarding other comprehensive income the main change 
resulting from these amendments is a requirement for entities 
to group items presented in ‘other comprehensive income’ 
oci on the basis of whether they are potentially reclassiﬁable 
to proﬁt or loss subsequently reclassiﬁcation adjustments 
the amendments do not address which items are presented 
in oci
ifrs 13 ‘fair value measurement’ aims to improve 
consistency and reduce complexity by providing a precise 
deﬁnition of fair value and a single source of fair value 
measurement and disclosure requirements for use across 
ifrss the requirements which are largely aligned between 
ifrss and us gaap do not extend the use of fair value 
accounting but provide guidance on how it should be applied 
where its use is already required or permitted by other 
standards within ifrss or us gaap
ias19 ‘employee beneﬁts’ was amended in june 2011 
the most signiﬁcant impact on the group in its 2013 ﬁnancial 
statements will be to replace interest cost and expected return 
on plan assets with a net interest amount that is calculated 
by applying the discount rate to the net deﬁned beneﬁt liability 
asset this change is expected to reduce the group’s 
reported proﬁt by £32 million this net interest charge will 
be reported as part of ﬁnance costs rather than as a charge 
to operating proﬁt the additional amount to be reclassiﬁed 
is estimated to be £19 million to yield a total net interest charge 
of £51 million
ifrs 9 ‘financial instruments’ addresses the classiﬁcation 
measurement and recognition of ﬁnancial assets and 
ﬁnancial liabilities ifrs 9 was issued in november 2009 and 
october 2010 it replaces the parts of ias39 that relate to the 
classiﬁcation and measurement of ﬁnancial instruments ifrs 9 
requires ﬁnancial assets to be classiﬁed into two measurement 
categories those measured as at fair value and those measured 
at amortised cost the determination is made at initial 
recognition the classiﬁcation depends on the entity’s business 
model for managing its ﬁnancial liabilities the standard retains 
most of the ias39 requirements the main change is that 
in cases where the fair value option is taken for ﬁnancial 
liabilities the part of a fair value change due to an entity’s own 
credit risk is recorded in other comprehensive income rather 
than the income statement unless this creates an accounting 
mismatch the group is yet to assess ifrs 9’s full impact and 
intends to adopt ifrs 9 no later than the accounting period 
beginning on or after 1 january 2015 subject to endorsement 
by the eu the group will also consider the impact of the 
remaining phases of ifrs 9 when completed by the board
ifrs 10 ‘consolidated ﬁnancial statements’ builds on 
existing principles by identifying the concept of control as 
the determining factor in whether an entity should be included 
within the consolidated ﬁnancial statements of the parent 
company the standard provides additional guidance to assist 
in the determination of control where this is difﬁcult to assess 
the group is yet to assess ifrs 10’s full impact and intends to 
adopt ifrs 10 no later than the accounting period beginning
on or after 1 january 2014 following endorsement by the eu
ifrs 12 ‘disclosures of interests in other entities’ includes 
the disclosure requirements for all forms of interests in other 
entities including joint arrangements associates special 
purpose vehicles and other off balance sheet vehicles the 
group is yet to assess ifrs 12’s full impact and intends to 
adopt ifrs 12 no later than the accounting period beginning 
on or after 1 january 2014 following endorsement by the eu
there are no other ifrss or ifric interpretations that are not 
yet effective that would be expected to have a material impact 
on the group 47 synthomer plc annual report 2012
group
ﬁnancial statements
47 synthomer plc annual report 2012
2 signiﬁcant accounting policies
basis of accounting
the ﬁnancial statements have been prepared in accordance 
with international financial reporting standards ifrss the 
ﬁnancial statements have also been prepared in accordance 
with ifrss adopted by the european union and therefore the 
group ﬁnancial statements comply with article 4 of the eu ias 
regulation the ﬁnancial statements have been prepared on 
the historical cost basis except for the revaluation of ﬁnancial 
instruments as discussed in the report of the directors on 
page 29 the ﬁnancial statements have been prepared on a 
going concern basis the principal accounting policies adopted 
are set out below
basis of consolidation
the consolidated ﬁnancial statements incorporate the ﬁnancial 
statements of the company and entities controlled by the 
company its subsidiaries made up to 31 december each 
year control is achieved where the company has the power to 
govern the ﬁnancial and operating policies of an investee entity 
so as to obtain beneﬁts from its activities
the results of subsidiaries acquired or disposed of during the 
year are included in the consolidated income statement from 
the effective date of acquisition or up to the effective date of 
disposal as appropriate where necessary adjustments are 
made to the ﬁnancial statements of subsidiaries to bring the 
accounting policies used into line with those used by the group
the results of joint ventures are accounted for using equity 
accounting
minority interests in the net assets of consolidated subsidiaries 
are identiﬁed separately from the group’s equity therein 
minority interests consist of the amount of those interests 
at the date of the original business combination see below 
and the minority’s share of changes in equity since the date 
of combination
all intragroup transactions balances income and expenses 
are eliminated on consolidation
goodwill
goodwill arising on consolidation represents the excess of 
the cost of acquisition over the group’s interest in the fair 
value of the identiﬁable assets and liabilities of a subsidiary 
associate or jointly controlled entity at the date of acquisition 
goodwill is recognised as an asset and reviewed for 
impairment at least annually any impairment is recognised 
immediately in the consolidated income statement and is not 
subsequently reversed
for the purpose of impairment testing goodwill is allocated to 
each of the group’s cash generating units expected to beneﬁt 
from the synergies of the combination cashgenerating units 
to which goodwill has been allocated are tested for impairment 
annually or more frequently when there is an indication that 
the unit may be impaired if the recoverable amount of the 
cashgenerating unit is less than the carrying amount of the 
unit the impairment loss is allocated ﬁrst to reduce the carrying 
amount of any goodwill allocated to the unit and then to the 
other assets of the unit prorata on the basis of the carrying 
amount of each asset in the unit
on disposal of a subsidiary associate or jointly controlled 
entity the attributable amount of goodwill is included in the 
determination of the proﬁt or loss on disposal
goodwill arising on acquisitions before the date of transition 
to ifrss has been retained at the previous uk gaap amounts 
subject to being tested for impairment at that date goodwill 
written off to reserves under uk gaap prior to 1998 has 
not been reinstated and is not included in determining any 
subsequent proﬁt or loss on disposal
business combinations
acquisitions of subsidiaries and businesses are accounted 
for using the acquisition method the consideration for each 
acquisition is measured at the aggregate of the 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 acquisitionrelated 
costs are recognised in proﬁt or loss as incurred
the acquiree’s identiﬁable assets liabilities and contingent 
liabilities that meet the conditions for recognition under 
ifrs 3 2008 are recognised at their fair value at the 
acquisition date except that
 deferred tax assets or liabilities and liabilities or assets 
related to employee beneﬁt arrangements are recognised 
and measured in accordance with ias12 income taxes 
and ias19 employee beneﬁts respectively
 assets or disposal groups that are classiﬁed as held for sale 
in accordance with ifrs 5 noncurrent assets held for sale 
and discontinued operations are measured in accordance 
with that standard
if the initial accounting for a business combination is 
incomplete by the end of the reporting period in which the 
combination occurs the group reports provisional amounts 
for the items for which the accounting is incomplete those 
provisional amounts are adjusted during the measurement 
period see below or additional assets or liabilities are 
recognised to reﬂect new information obtained about facts 
and circumstance that existed as of the acquisition date that 
if known would have affected the amounts as of that date
the measurement period is the period from the date of 
acquisition to the date the group obtains complete information 
about facts and circumstances that existed as of the 
acquisition date and is subject to a maximum of one year
acquired intangible assets
intangible assets acquired through acquisition are measured 
at their fair value and are amortized on a straightline basis 
over their estimated useful lives on the following bases
customer relationships –  between 5 and 8 years
technology – 10 years
where necessary the fair value at acquisition and estimated 
useful lives for these intangible assets are based on 
independent valuation reports 48 synthomer plc annual report 2012
2 signiﬁcant accounting policies continued
other intangible assets
software development and environmental licensing costs 
resulting in development of a longterm intangible asset are 
measured initially at cost and are amortised on a straightline 
basis over their estimated useful lives as follows
software – between 3 and 5 years
an internallygenerated intangible asset arising from the 
group’s product development is recognised only if all 
of the following conditions in ias38 are met
 an asset is created that can be separately identiﬁed 
such as software and new processes
 it is probable that the asset created will generate future 
economic beneﬁts and
 the development cost of the asset can be measured reliably
no research or development costs met the criteria for required 
capitalisation under ias38 during the year
where no internallygenerated intangible asset can be 
recognised development expenditure is recognised as 
an expense in the period in which it is incurred
property plant and equipment
property plant and equipment is stated at cost original 
purchase price and the costs attributable to bringing the 
asset to its working condition for its intended use net of 
depreciation and any provision for impairment except for 
freehold land and land grants in malaysia which are not 
depreciated the cost of property plant and equipment is 
depreciated on a straightline basis over its expected useful 
life as follows
freehold building – 50 years
leasehold land and buildings –  the lesser of 50 years and 
the period of the lease
plant and equipment –  between 3 and 10 years
impairment of property plant and equipment and intangible 
assets excluding goodwill
at each balance sheet date the group reviews the carrying 
amounts of its plant property and equipment and intangible 
assets to determine whether there is any indication that those 
assets have suffered an impairment loss if any such indication 
exists the recoverable amount of the asset is estimated in 
order to determine the extent of the impairment loss if any 
where the asset does not generate cash ﬂows that are 
independent from other assets the group estimates the 
recoverable amount of the cashgenerating unit to which 
the asset belongs
recoverable amount is the higher of fair value less costs to 
sell and value in use in assessing value in use the estimated 
future cash ﬂows are discounted to their present value using a 
pretax discount rate that reﬂects current market assessments 
of the time value of money and the risks speciﬁc to the asset 
for which the estimates of future cash ﬂows have not been 
adjusted
if the recoverable amount of an asset or cashgenerating unit 
is estimated to be less than its carrying amount the carrying 
amount of the asset or cashgenerating unit is reduced to its 
recoverable amount an impairment loss is recognised as an 
expense immediately
when an impairment loss subsequently reverses the carrying 
amount of the asset or cashgenerating unit is increased to 
the revised estimate of its recoverable amount but so that 
the increased carrying amount does not exceed the carrying 
amount that would have been determined had no impairment 
loss been recognised in prior years a reversal of an 
impairment loss is recognised immediately in proﬁt or loss
operating leases
operating lease payments are expensed on a straightline 
basis to the income statement over the term of the relevant 
lease any beneﬁts received as an incentive to enter into an 
operating lease are also spread on a straightline basis over 
the lease term
inventories
inventories are stated at the lower of cost and net realisable 
value cost comprises direct materials and where applicable 
direct labour costs and those overheads that have been 
incurred in bringing the inventories to their present location 
and condition cost is calculated using the weighted average 
method net realisable value represents the estimated selling 
price less all estimated costs of completion and costs to be 
incurred in marketing selling and distribution provision is 
made for obsolete slowmoving or defective items where 
appropriate
financial instruments
financial assets and ﬁnancial liabilities are recognised on the 
group’s balance sheet when the group becomes a party to 
the contractual provisions of the instrument
loans and receivables
trade receivables
trade receivables are measured at initial recognition at fair 
value and are subsequently measured at amortised cost using 
the effective interest rate method appropriate allowances for 
estimated irrecoverable amounts are recognised in proﬁt or loss 
where there is objective evidence that the asset is impaired
all trade receivables that are factored by third parties are 
done so on a nonrecourse basis at the point of factoring 
the group forfeits the right to future cash ﬂows from these 
receivables and those amounts are derecognised the cost 
of factoring receivables is recognised as a ﬁnance cost in 
the period in which the receivable is factored
amortised costs
bank borrowings
interestbearing bank loans and overdrafts are recorded at the 
proceeds received net of direct issue costs finance charges 
including premiums payable on settlement or redemption and 
direct issue costs are accounted for on an accruals basis to 
the proﬁt and loss account using the effective interest method 
and are added to the carrying amount of the instrument to the 
extent that they are not settled in the period in which they arise
trade payables
trade payables are measured at initial recognition at fair value 
and are subsequently measured at amortised cost using the 
effective interest rate method
notes to the consolidated ﬁnancial statements
continued 49 synthomer plc annual report 2012
group
ﬁnancial statements
derivative ﬁnancial instruments
the group uses derivative ﬁnancial instruments to reduce 
exposure to foreign exchange risk and interest rate 
movements the group does not hold or issue derivative 
ﬁnancial instruments for speculative purposes
the use of ﬁnancial derivatives is governed by the group’s 
policies approved by the board of directors which provide 
written principles on the use of ﬁnancial derivatives as set out 
in note 22
impairment of ﬁnancial assets
at each balance sheet date the group reviews the carrying 
amounts of its ﬁnancial assets to determine whether there is 
any indication that those assets have suffered an impairment 
loss if any such indication exists the recoverable amount of 
the asset is estimated in order to determine the extent of the 
impairment loss if any
finance costs
finance costs of debt are recognised in the income statement 
over the term of such instruments at an effective interest rate 
on the carrying amount finance costs that are directly 
attributable to the construction of property plant and 
equipment are capitalised as part of the cost of those assets 
in accordance with ias23
foreign currencies
in preparing the ﬁnancial statements of the individual 
companies transactions in currencies other than the entity’s 
functional currency are recorded at the rates of exchange 
prevailing on the dates of the transactions at each balance 
sheet date monetary assets and liabilities that are 
denominated in foreign currencies are retranslated at the rates 
prevailing on the balance sheet date nonmonetary assets 
and liabilities carried at fair value that are denominated in 
foreign currencies are translated at the rates prevailing at 
the date when the fair value was determined nonmonetary 
items that are measured in terms of historical cost in a foreign 
currency are not retranslated
in order to hedge its exposure to certain foreign exchange 
risks the group enters into forward contracts and options 
see below for details of the group’s accounting policies in 
respect of such derivative ﬁnancial instruments
on consolidation the assets and liabilities of the group’s 
overseas operations are translated at exchange rates prevailing 
on the balance sheet date income and expense items are 
translated at the average exchange rates for the period unless 
exchange rates ﬂuctuate signiﬁcantly exchange differences 
arising if any are classiﬁed as equity and transferred to the 
group’s translation reserve such translation differences are 
recognised as income or as expenses in the period in which 
the operation is disposed of
goodwill and fair value adjustments arising on the acquisition 
of a foreign entity are treated as assets and liabilities of the 
foreign entity and translated at the closing rate the group 
has elected to treat goodwill and fair value adjustments arising 
on acquisitions before the date of transition to ifrss as 
sterlingdenominated assets and liabilities
derivative ﬁnancial instruments
the group enters into a variety of derivative ﬁnancial 
instruments to manage its exposure to interest rate and 
foreign exchange rate risk including foreign exchange forward 
contracts interest rate swaps and foreign currency options
derivatives are initially recognised at fair value at the date 
a derivative contract is entered into and are subsequently 
remeasured to their fair value at each balance sheet date 
a derivative with a positive fair value is recognised as a ﬁnancial 
asset whereas a derivative with a negative fair value is 
recognised as a ﬁnancial liability the resulting gain or loss is 
recognised in proﬁt or loss immediately unless the derivative 
is designated and effective as a hedging instrument in which 
event the timing of the recognition in proﬁt or loss depends 
on the nature of the hedge relationship the group designates 
certain derivatives as either hedges of highly probable forecast 
transactions or hedges of foreign currency risk of ﬁrm 
commitments cash ﬂow hedges or hedges of net 
investments in foreign operations
hedge accounting
the group designates certain hedging instruments which 
include derivatives embedded derivatives and nonderivatives 
in respect of foreign currency risk as either cash ﬂow hedges 
or hedges of net investments in foreign operations
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 cash ﬂows of the hedged item
cash ﬂow hedges
the effective portion of changes in the fair value of derivatives 
that are designated and qualify as cash ﬂow hedges are 
deferred in equity the gain or loss relating to the ineffective 
portion is recognised immediately in the consolidated income 
statement
amounts deferred in equity are recycled in proﬁt or loss in the 
periods when the hedged item is recognised in proﬁt or loss 
in the same line of the income statement as the recognised 
hedged item however when the forecast transaction that is 
hedged results in the recognition of a nonﬁnancial asset or a 
nonﬁnancial liability the gains and losses previously deferred 
in equity are transferred from equity and included in the initial 
measurement of the cost of the nonﬁnancial asset or 
nonﬁnancial liability
hedge accounting is discontinued when the group revokes the 
hedging relationship the hedging instrument expires or is sold 
terminated or exercised or no longer qualiﬁes for hedge 
accounting any cumulative gain or loss deferred in equity
 at that time remains in equity and is recognised when the 
forecast transaction is ultimately recognised in proﬁt or loss 
when a forecast transaction is no longer expected to occur 
the cumulative gain or loss that was deferred in equity is 
recognised immediately in proﬁt or loss 50 synthomer plc annual report 2012
2 signiﬁcant accounting policies continued
hedges of net investments in foreign operations
hedges of net investments in foreign operations are accounted 
for similarly to cash ﬂow hedges any gain or loss on the 
hedging instrument relating to the effective portion of the 
hedge is recognised in equity in the foreign currency translation 
reserve the gain or loss relating to the ineffective portion 
is recognised immediately in proﬁt or loss and is included 
in the ‘other gains and losses’ line of the income statement
cash and cash equivalents
cash and cash equivalents includes cash in hand deposits held 
at call with banks restricted cash balances which become fully 
liquid within three months or less and other shortterm highly 
liquid investments with original maturities of three months or less
taxation
the tax expense represents the sum of the tax currently 
payable and deferred tax
the tax currently payable is based on taxable proﬁt for the 
year taxable proﬁt differs from net proﬁt as reported in the 
consolidated 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 
using tax rates that have been enacted or substantively 
enacted by the balance sheet date
deferred tax is the tax expected to be payable or recoverable 
on differences between the carrying amounts 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 generally 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
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
the carrying amount of deferred tax assets is reviewed at 
each balance sheet date and reduced to the extent that it 
is no longer probable that sufﬁcient taxable proﬁts will be 
available to allow all or part of the asset to be recovered
deferred tax is calculated at the tax rates that are expected 
to apply in the period when the liability is settled or the asset 
is realised deferred tax is charged or credited in the income 
statement except when it relates to items charged or credited 
directly to equity in which case the deferred tax is also dealt 
with in equity
retirement beneﬁt costs
the costs of deﬁned beneﬁt contributions to the group’s 
pension schemes and of augmenting existing pensions are 
charged to the consolidated income statement on a systematic 
basis over the expected period of beneﬁts from employees’ 
service
payments to deﬁned contribution retirement beneﬁt schemes 
are charged as an expense as they fall due
actuarial gains on the deﬁned beneﬁt schemes are recognised 
in full in each period in which they occur they are recognised 
outside of the consolidated income statement and are 
presented in the consolidated statement of comprehensive 
income
the liability recognised in the balance sheet in respect of 
deﬁned beneﬁt pension plans is the present value of the 
deﬁned beneﬁt obligation at the end of the reporting period 
less the fair value of plan assets together with adjustments 
for unrecognised pastservice costs the deﬁned beneﬁt 
obligation is calculated annually using the projected unit credit 
method the present value of the deﬁned beneﬁt obligation is 
determined by discounting the estimated future cash outﬂows 
using interest rates of highquality corporate bonds that are 
denominated in the currency in which the beneﬁts will be paid 
and that have terms to maturity approximating to the terms of 
the related pension obligation
the uk deﬁned beneﬁt scheme is funded with the assets 
of the scheme held separately from those of the group 
in separate trusteeadministered funds
for the german schemes the assets are included within the 
assets of the respective companies as permitted under local 
laws the assets of the other overseas schemes are held 
separately from those of the group
provisions
provisions for warranty costs are recognised at the date of 
sale of the relevant products at the directors’ best estimate 
of the expenditure required to settle the group’s liability
provisions for restructuring costs are recognised when the 
group has a detailed formal plan for the restructuring that 
has been communicated to affected parties
revenue recognition
revenue is measured at the fair value of the consideration 
received or receivable and represents amounts receivable 
for goods provided in the normal course of business net 
of discounts vat and other salesrelated taxes
sales of goods are recognised when goods are delivered and 
title has passed where delivery is deﬁned in accordance with 
incoterms 2000
sharebased payments
the group has applied the requirements of ifrs 2 
sharebased payments
the group issues equitysettled sharebased payments to 
certain employees equitysettled sharebased payments 
are measured at fair value at the date of grant the fair value 
determined at the grant date of the equitysettled sharebased 
payments is expensed on a straightline basis over the vesting 
period based on the group’s estimate of shares that will 
eventually vest
notes to the consolidated ﬁnancial statements
continued 51 synthomer plc annual report 2012
group
ﬁnancial statements
deﬁnitions
total sales
total sales represent the total of revenue from the company 
its subsidiaries and its share of the revenue of joint ventures
operating proﬁt
operating proﬁt represents proﬁt from continuing activities 
before ﬁnancing costs and taxation
ebitda
ebitda is calculated as operating proﬁt before depreciation 
amortisation and special items as deﬁned below
special items
the following are disclosed separately in order to provide 
a clearer indication of the group’s underlying performance
 amortisation of acquired intangible assets
 impairment of noncurrent assets
 costs of business combinations as deﬁned by ifrs 3 
and related debt issue costs
 restructuring and site closure costs
 fair value adjustment – mark to market adjustments in 
respect of cross currency and interest rate derivatives 
used for hedging purposes where ias39 hedge accounting 
is not applied
 amounts advanced in respect of invoices sold under 
nonrecourse factoring arrangements
 other nonrecurring and nonoperating items
 tax impact of the above items and
 settlement of prior period tax issues
underlying performance
underlying performance represents the statutory performance 
of the group under ifrs excluding special items
net borrowings
net borrowings represents cash and cash equivalents together 
with short and long term borrowings as adjusted for the effect 
of related derivative instruments irrespective of whether 
they qualify for hedge accounting nonrecourse factoring 
arrangements and the inclusion of financial assets
critical judgements in applying accounting policies
the following are the critical judgements apart from those 
involving estimations see below that the group has made 
in the process of applying the accounting policies and that 
have the most signiﬁcant effect on the amounts recognised 
in the ﬁnancial statements
going concern
the assessment that the ﬁnancial statements should be 
prepared on a going concern basis requires the directors to 
make a judgement that after taking account of reasonably 
possible changes in trading performance the group has 
adequate resources to continue in operational existence for 
the foreseeable future
recognition of deferred tax assets
the group activities give rise to signiﬁcant potential deferred 
tax assets particularly in respect of the uk pension liability 
tax losses and accelerated capital allowances determination 
of whether these assets should be recognised requires a 
high degree of management judgement and is dependent on 
management’s ability to project future earnings from activities 
that may apply loss positions carried forward against future 
income taxes
key sources of estimation uncertainty
the preparation of consolidated ﬁnancial statements requires 
that management make estimates and assumptions that 
affect reported amounts of assets and liabilities income and 
expenses the estimates and associated assumptions are 
based on historical experience and various other factors that 
are believed to be reasonable under the circumstances the 
result of which form the basis of making the judgements about 
carrying values of assets and liabilities that are not readily 
apparent from other sources actual results may differ from 
these estimates the estimates and underlying assumptions 
are reviewed on an ongoing basis taking the current and 
expected future market conditions into consideration
impairmentreversal of impairment
the group has signiﬁcant investments in property plant and 
equipment acquired intangibles and goodwill changes in the 
circumstances or expectations of future performance of an 
individual asset may be an indicator that the asset is impaired 
requiring the book value to be written down to its recoverable 
amount impairments excluding goodwill are reversed if the 
conditions for impairment are no longer present evaluating 
whether an asset is impaired or if an impairment should be 
reversed requires a high degree of judgement and may depend 
to a large extent on the selection of key assumptions about 
the future
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 entity to estimate the future cash ﬂows expected 
to arise from the cashgenerating unit and a suitable discount 
rate in order to calculate present value the industry 
growth rates used within the forecast future cash ﬂows are 
developed with reference to external sources but are subject 
to estimation uncertainty
post retirement beneﬁt obligations
included in the actuaries’ calculation of the post retirement 
beneﬁt obligations are a number of assumptions these are 
shown in detail in note 24
current tax liability and deferred tax
the group annually incurs signiﬁcant amounts of income taxes 
payable to various jurisdictions around the world and it also 
recognises signiﬁcant changes in deferred tax assets and 
deferred tax liabilities all of which are based on management’s 
interpretations of applicable laws regulations and relevant 
court decisions the quality of these estimates is highly 
dependent upon management’s ability to properly apply 
what can be very complex sets of rules and to recognise 
changes in applicable rules 52 synthomer plc annual report 2012
3 special items
the special items are made up as follows
2012
£m
2011
£m
continuing operations
operating proﬁtloss
restructuring and site closure  – cash costs 60 158
– noncash costs 07 44
acquisition costs – 14
amortisation of acquired intangibles see note 14 – subsidiaries 258 191
– share of joint ventures 16 13
341 420
finance costs
fair value adjustment see note 7 17 33
loss before taxation from continuing operations 358 453
taxation see note 8 173 149
loss for the year from continuing operations 185 304
the restructuring and site closure costs charged to the consolidated income statement above are in respect of post acquisition 
activities to integrate the former polymerlatex business with that of the existing group ‘cash costs’ represent those charges 
which have or will be defrayed in the form of cash settlements to third parties as disclosed in note 26 at 31 december 2012 
£114 million 2011 £58 million of these costs have been physically paid to third parties ‘noncash costs’ represent charges 
for the write off of speciﬁc ﬁxed assets and stocks held on sites which are being closed as part of the integration exercise
2012
£m
2011
£m
discontinued operations
total sales
revenue of operations sold or closed during the year – 631
operating lossproﬁt of discontinued operations
operating proﬁt of operations sold or closed during the year – 41
impairment of goodwill see note 13 – 369
impairment of ﬁxed assets prior to sale of operation – 56
loss arising from the sale or closure of operations – 08
– 392
taxation
taxation on operating loss of operations sold or closed during the year – 10
loss for the year from discontinued operations – 402
the loss for the year from discontinued operations is attributable solely to equity holders of the parent
notes to the consolidated ﬁnancial statements
continued 53 synthomer plc annual report 2012
group
ﬁnancial statements
4 segmental analysis
substantially all revenues earned by the group are from the sale of polymer products derived from petrochemical monomers
no single customer accounts for more than 10 of the group’s revenues no information is provided at the divisional level to 
the executive committee concerning interest revenues interest expense depreciation or amortisation income taxes or other 
material noncash items
2012
total sales operating proﬁt
underlying
performance
£m
special
items
£m
ifrs
£m
underlying
 performance
£m
special
items
£m
ifrs
£m
analysis by activity
continuing activity
polymer chemicals – europe  north america
subsidiaries 7638– 7638962260 702
share of joint ventures 331– 3311816 02
7969– 7969980276 704
polymer chemicals – asia  rest of world
subsidiaries 2892– 289216065 95
share of joint ventures 257– 25731– 31
3149– 314919165 126
total sales 11118 – 11118
divisional operating proﬁt 1171341 830
unallocated corporate expenses 81 – 81
operating proﬁtloss 1090341 749
total share of joint ventures
polymer chemicals – europe  north america 331– 3311816 02
polymer chemicals – asia  rest of world 257– 25731– 31
588– 5884916 33
2011
total sales operating proﬁt
underlying
performance
£m
special
items
£m
ifrs
£m
underlying
performance
£m
special
items
£m
ifrs
£m
analysis by activity
continuing activity
polymer chemicals – europe  north america
subsidiaries 7435– 7435706355 351
share of joint ventures 342– 3422513 12
7777 – 7777731368 363
polymer chemicals – asia  rest of world
subsidiaries 3159– 315929838 260
share of joint ventures 232– 23223– 23
3391– 339132138 283
total sales 1 1 168– 11168
divisional operating proﬁt 1052406 646
unallocated corporate expenses 88 14 102
operating proﬁt 964420 544
total share of joint ventures
polymer chemicals – europe  north america 342– 3422513 12
polymer chemicals – asia  rest of world 232– 23223– 23
574– 5744813 35 54 synthomer plc annual report 2012
4 segmental analysis continued
special items
2012
polymer
chemicals –
europe 
north
america
£m
polymer
chemicals –
asia 
rest of
world
£m
unallocated
corporate
expenses
£m
total
£m
restructuring  site closure  – cash costs 57 03 – 60
– noncash costs 07 – – 07
amortisation of acquired intangibles 196 62 – 258
share of joint ventures special items 16 – – 16
276 65 – 341
2011
polymer
chemicals –
europe 
north
america
£m
polymer
chemicals –
asia 
rest of
world
£m
unallocated
corporate
expenses
£m
total
£m
restructuring  site closure  – cash costs 153 05 – 158
– noncash costs 44 – – 44
amortisation of acquired intangibles 158 33 – 191
share of joint ventures special items 13 – – 13
acquisition costs – – 14 14
368 38 14 420
2012
total
assets
£m
total
liabilities
£m
capital
expenditure
£m
depreciation
and
 amortisation
£m
analysis by activity
continuing activity
subsidiaries
polymer chemicals – europe  north america 25191680 133101
polymer chemicals – asia  rest of world 1770639 27082
42892319 403183
unallocated assets and liabilities 731255 0101
43623574 404 184
share of joint ventures see note 18 272133
goodwill see note 13 2409–
acquired intangibles and related deferred tax 1356411
net borrowings see note 21 –1415
8399 5533
net assets 2866
notes to the consolidated ﬁnancial statements
continued 55 synthomer plc annual report 2012
group
ﬁnancial statements
2011
total
assets
£m
total 
liabilities
£m
capital
expenditure
£m
depreciation
and
amortisation
£m
analysis by activity
continuing activity
subsidiaries
polymer chemicals – europe  north america 22421636 7294
polymer chemicals – asia  rest of world 1623705 14092
38652341 212186
unallocated assets and liabilities 3691316 0102
discontinued activity
pharma chemicals – – 4140
42343657 254 228
share of joint ventures see note 18 256113
goodwill see note 13 2447–
acquired intangibles and related deferred tax 1654509
net borrowings see note 21 – 1561
85915840
net assets 2751
2012
£m
2011
£m 
analysis of total sales by destination
western europe 6071 6092
eastern europe 480 359
north america 455 388
asia 3096 3175
africa and middle east 960 958
rest of world 56 196
11118 1 1 168
intersegmental sales
in addition to the amounts included above intersegmental sales of £119 million 2011 £43 million were made as set out below 
these sales were eliminated on consolidation
2012
polymer
chemicals –
europe 
north
america
£m
polymer
chemicals –
asia 
rest of
 world
£m
total
£m
polymer chemicals – europe  north america –7979
polymer chemicals – asia  rest of world 40– 40
total 4079119
2011
polymer
chemicals –
europe 
north
america
£m
polymer
chemicals –
asia 
rest of
world
£m
total
£m
polymer chemicals – europe  north america – 1717
polymer chemicals – asia  rest of world 26– 26
total 261743 56 synthomer plc annual report 2012 56 synthomer plc annual report 2012
5 operating proﬁt
2012 2011
company
and
subsidiaries
£m
joint
ventures
£m
total
£m
company
and
subsidiaries
£m
joint
ventures
£m
total
£m
total sales 10530 588 11118 10594 574 11168 
cost of sales 8517 488 9005 8582 494 9076
gross proﬁt 2013 100 2113 2012 80 2092 
distribution costs 520 18 538 750 16 766
administrative expenses 452 33 485 346 16 362
special items 325 16 341 407 13 420
operating proﬁt 716 33 749 509 35 544 
2012
£m
2011
£m
operating proﬁt is stated after chargingcrediting the following
depreciation 181 224 
amortisation acquired intangibles see note 14 258 191 
amortisation other intangibles see note 15 03 04 
hire of plant and equipment 25 25 
other lease rentals 30 38 
research and development expenditure 80 125 
6 auditor’s remuneration
2012
£000
2011
£000
fees payable to the company’s auditor for
audit of the company’s annual accounts and the consolidated accounts 87 132
fees payable to the company’s auditor and their associates for other services to the group
audit of the company’s subsidiaries 392 469
total audit fees 479 601
audit related assurance services 2 34
tax compliance services 36 22
other taxation advisory services 11 91
services relating to the acquisition of polymerlatex – 17
other services 15 6
total nonaudit fees 64 170
the other services provided by the group auditor in the current year related to translation of foreign ﬁnancial statements 
other taxation advisory services relate to advice on employment tax and other sundry projects
details of the company’s policy on the use of auditor for nonaudit services the reasons why the auditor was used rather than 
another supplier and how the auditor’s independence and objectivity was safeguarded are set out in the audit committee 
section of the corporate governance report on page 32 no services were provided pursuant to contingent fee arrangements
7 finance costs
2012
£m
2011
£m
interest payable on bank loans and overdrafts 88 92
interest payable on other loans 28 31
116 123
less interest receivable 07 07
net interest payable 109 116
fair value adjustment 17 33
total ﬁnance costs 126 149
the fair value adjustment is the mark to market adjustment in respect of cross currency and interest rate derivatives used for 
hedging purposes where ias39 hedge accounting is not applied
notes to the consolidated ﬁnancial statements
continued 57 synthomer plc annual report 2012
group
ﬁnancial statements
8 taxation
2012
£m
2011
£m
continuing operations
current tax
uk corporation tax 01 01 
overseas taxation 219 203 
220 204 
deferred tax 
origination and reversal of temporary differences 03 09
217 195 
special items 
current tax
historic issues – 7 4
restructuring and site closure costs 16 24
deferred tax
recognition of uk deferred tax asset 71 – 
amortisation on acquired intangibles 86 5 1
173 149
total tax on proﬁt before taxation 44 46
discontinued operations
tax on special items – 10
tax charge for the year on discontinued operations – 10
uk corporation tax is calculated at 245 2011 265 of the estimated assessable proﬁt for the year taxation for other 
jurisdictions is calculated at the rates prevailing in the respective jurisdictions
2012
£m
2011
£m
tax expense
continuing operations 44 46 
discontinued operations – 10 
total tax expense 44 56 
reconciliation of tax expense to proﬁt before taxation
the differences between the total tax expense shown above and the amount calculated by applying the standard rate of 
uk corporation tax to the proﬁt before tax is as follows
2012
£m
2011
£m
proﬁt before taxation – continuing operations 623 395 
tax on proﬁt before taxation continuing operations at standard uk corporation tax rate of 245
2011 265
153 105 
effects of
expenses not deductible for tax purposes 17 87 
tax incentives and items not subject to tax 44 66
losses not recognised less utilisation of losses not previously recognised – 05 
higher tax rates on overseas earnings 08 08 
other deferred tax asset not recognised less amounts now recognised 86 35
adjustments to tax charge in respect of prior periods 04 60
effect of change of rate on deferred tax – 01 
tax charge for year 44 45  58 synthomer plc annual report 2012
8 taxation continued
tax charges to other comprehensive income
2012
£m
2011
£m
deferred tax credit in respect of actuarial losses 19 13
current tax liabilities
2012
£m
2011
£m
current tax liabilities 388 37 9
9 deferred taxation
deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise to deferred 
tax assets to the extent that it is probable that these assets will be recovered no deferred tax is recognised on the unremitted 
earnings of overseas subsidiaries and joint ventures as the earnings are continually reinvested by the group no tax is expected 
to be payable on them in the foreseeable future
the movements in deferred tax assets and liabilities prior to offset are shown below
deferred tax liabilities
2012
accelerated
tax
depreciation
£m
acquired
intangibles
£m
other
£m
total 
£m
at 1 january 110 509 05614
chargedcredited to income statement –860389
exchange adjustment 03120116
at 31 december 107 411 09509
deferred tax assets
2012
pensions
£m
at 1 january 11 
credited to income statement 71 
credited through retained earnings 19 
exchange adjustment 01 
at 31 december 102 
deferred tax asset not recognised
deferred tax assets are not recognised when it is not probable that taxable proﬁts will be available against which the deferred tax 
asset could be utilised
the amounts of deferred tax not recognised at the balance sheet dates are as follows
2012
£m
2011
£m
uk pension liability 88 185
tax losses 107 81
accelerated capital allowances 28 39
other timing differences 03 12
226 293
notes to the consolidated ﬁnancial statements
continued 59 synthomer plc annual report 2012
group
ﬁnancial statements
59 synthomer plc annual report 2012
10 ordinary dividends
2012
pence per
share
2011
pence per
share
2012
£m
2011
£m 
interim dividend 22 12 75 41 
proposed ﬁnal dividend 33 23 112 78 
the proposed ﬁnal dividend is subject to approval by shareholders at the annual general meeting and has not been included as 
a liability in these ﬁnancial statements
11 earnings per share
number of shares
2012
number
’000
2011
number
’000
weighted average number of ordinary shares for the purposes of basic earnings per share 339549 339611 
effect of dilutive potential ordinary shares 
share options 5527 75 16 
weighted average number of ordinary shares for the purposes of diluted earnings per share 345076 347127 
earnings per share
2012 2011
underlying
performance
£m
 special
 items
 £m
ifrs
£m
underlying
performance
£m
special
items
£m
ifrs
£m
from continuing operations
earnings proﬁt attributable to equity holders
of the parent 746 180 566 637 304 333 
basic earnings per share 220p 53p 167p 188p 90p 98p 
diluted earnings per share 216p 52p 164p 184p 88p 96p 
from continuing and discontinued operations 
earnings proﬁt attributable to equity holders
of the parent 746 180 566 637 706 69
basic earnings per share 220p 53p 167p 188p 208p 20p
diluted earnings per share 216p 52p 164p 184p 204p 20p
12 employees
2012
number
2011
number
the average monthly number of employees during the year by activity was
continuing activity 
polymer chemicals – europe  north america 1151 1300 
polymer chemicals – asia  rest of world 817 747 
holding companies 23 29 
1991 2076 
share of joint ventures 63 65 
discontinued activity 
pharma chemicals – 398 
2054 2539 
2012
£m
2011
£m
the aggregate remuneration of all group employees comprised
wages and salaries 640 791 
social security costs 95 109 
post retirement beneﬁt obligations 84 80 
share based payments 11 13 
830 993 
directors’ emoluments are disclosed in the remuneration report on page 37 60 synthomer plc annual report 2012
13 goodwill
2012
£m
2011
£m
cost
at 1 january 3546 2639
recognised on acquisition – 1642
exchange adjustments 38 66
eliminated on disposal – 669
at 31 december 3508 3546
accumulated impairment losses
at 1 january 1099 1399
impairment losses for the year – 369
eliminated on disposal – 669
at 31 december 1099 1099
net book value
at 31 december 2409 2447
the group tests goodwill annually for impairment at the balance sheet date or more frequently if there are indications that 
goodwill might be impaired
goodwill acquired in a business combination is allocated at acquisition to the cash generating units “cgus” that are 
expected to beneﬁt from that business combination
the allocation of the carrying value of goodwill is represented below
net
book value
at 1 january
2011
£m
recognised
on
acquisition
£m
exchange
adjustments
£m
impairment
during
the year
£m
net
book value
at
31 december
2011
£m
exchange
adjustments
£m
net
book value
 at
31 december
2012
£m
polymer chemicals
europe  north america 867130963 002113 30 2083
asia  rest of world 0433303 00334 08 326
871164266 002447 38 2409
pharma chemicals 
uquifa spain sa and uquifa 
mexico sacv 3690000369 00 0000
total 1240164266 369 2447 38 2409
the recoverable amounts for cgus are determined from value in use calculations based upon discounted cash ﬂows the key 
assumptions for those discounted cash ﬂow calculations are the discount rate proﬁtability and growth rate the discount rate 
is based on the group’s weighted average cost of capital adjusted where appropriate for the risk premium attributable to the 
particular cgus activities and geography of operation proﬁtability and growth rates are based on past experience combined 
with management’s expectations for future business performance which is informed by a number of factors including economic 
growth internal plans and competitor and customer activity
discount rates of 11 2011 11 and 12 2011 12 have been used in the above calculations for europe  north america 
and asia  rest of world respectively
the proﬁt used in the cash ﬂows for the ﬁrst year is derived from management forecasts for years 2 to 10 a growth rate is applied 
the proﬁt for year 10 is then assumed to apply without further growth into perpetuity growth rates of between 2 2011 2 
and 5 2011 5 have been used for europe  north america and asia  rest of world respectively representing management’s 
best estimate of each cgus circumstances and these do not exceed the long term growth rates for the markets concerned
of the net book value of goodwill at 31 december 2012 £705 million 2011 £705 million is located in the uk
notes to the consolidated ﬁnancial statements
continued 61 synthomer plc annual report 2012
group
ﬁnancial statements
14 acquired intangible assets
customer
relationships
£m
technology
£m
total
£m
cost
at 1 january 2012 1810 29 1839 
exchange adjustments 44 – 44
at 31 december 2012 1766 29 1795 
accumulated amortisation and impairment
at 1 january 2012 183 02 185 
exchange adjustments 04 – 04
amortisation charge for the year 255 03 258 
at 31 december 2012 434 05 439 
net book value
at 31 december 2012 1332 24 1356 
customer
relationships
£m
technology
£m
total
£m
cost
at 1 january 2011
recognised on acquisition 1881 31 1912 
exchange adjustments 71 02 73
at 31 december 2011 1810 29 1839 
accumulated amortisation and impairment
at 1 january 2011
amortisation charge for the year 189 02 191 
exchange adjustments 06 – 06
at 31 december 2011 183 02 185 
net book value
at 31 december 2011 1627 27 1654  62 synthomer plc annual report 2012 62 synthomer plc annual report 2012
15 other intangible assets
expenditure on research activities is recognised as an expense in the period in which it is incurred
no development expenditure met the requirements to be recognised as an internally generated intangible asset therefore all 
development costs in the period were expensed
software
£m
environmental
 licences
£m
total
£m
cost
at 1 january 2012 60 – 60 
exchange adjustments 01 – 01
additions 01 – 01 
at 31 december 2012 60 – 60 
accumulated amortisation and impairment
at 1 january 2012 51 – 51 
exchange adjustments – – –
amortisation charge for the year 03 – 03 
at 31 december 2012 54 – 54 
net book value
at 31 december 2012 06 – 06 
software 
£m
environmental
 licences
£m
total
£m
cost
at 1 january 2011 61 02 63 
exchange adjustments 05 – 05
additions 05 – 05 
acquisition of subsidiary undertaking 07 – 07 
disposals – 01 01
sale of subsidiary undertaking 08 01 09
at 31 december 2011 60 – 60 
accumulated amortisation and impairment
at 1 january 2011 58 02 60 
exchange adjustments 04 – 04
amortisation charge for the year 04 – 04 
disposals – 01 01
sale of subsidiary undertaking 07 01 08
at 31 december 2011 51 – 51 
net book value
at 31 december 2011 09 – 09 
notes to the consolidated ﬁnancial statements
continued 63 synthomer plc annual report 2012
group
ﬁnancial statements
16 property plant and equipment
land and buildings
leaseholds
plant and 
equipment
£m
total 
£m
freeholds
£m
long
£m
short
£m
cost
at 1 january 2012 500 53 175 3513 4241 
exchange adjustments 09 – 05 64 78
additions 03 – – 400 403 
disposals 60 – – 80 140
at 31 december 2012 434 53 170 3769 4426 
accumulated depreciation and impairment
at 1 january 2012 193 26 12 2174 2405 
exchange adjustments – – – 31 31
depreciation charge for the year 19 01 05 156 181 
assets written down pending closure of business 03 – – 02 05 
disposals 52 – – 78 130
at 31 december 2012 163 27 17 2223 2430 
net book value
at 31 december 2012 271 26 153 1546 1996 
land and buildings
leaseholds
plant and
equipment
£m
total
£m
freeholds
£m
long
£m
short
£m
cost
at 1 january 2011 449 49 84 3390 3972 
exchange adjustments 23 – 03 148 174
additions 09 – 25 220 254 
acquisition of subsidary undertaking 207 04 69 923 1203 
sale of subsidiary undertaking 124 – – 855 979
disposals 18 – – 17 35
at 31 december 2011 500 53 175 3513 4241 
accumulated depreciation and impairment
at 1 january 2011 191 25 11 2718 2945 
exchange adjustments 08 – – 101 109
depreciation charge for the year 20 01 01 202 224 
assets written down pending closure of business 13 – – 29 42 
impairment of assets prior to sale of subsidiary undertaking – – – 56 56 
sale of subsidiary undertaking 23 – – 715 738
disposals – – – 15 15
at 31 december 2011 193 26 12 2174 2405 
net book value
at 31 december 2011 307 27 163 1339 1836 
freehold land amounting to £37 million 2011 £63 million has not been depreciated 64 synthomer plc annual report 2012
17 financial asset
the group disposed of its pharma chemicals business on 30 november 2011 part of the consideration agreed with the 
buyer totalling 100m was in the form of a deferred payment to the group which will be made by the buyer on or before 
30 september 2014 in the event that the buyer is unable to fulﬁl his obligation this deferred consideration is secured by an 
irrevocable bank guarantee held in favour of synthomer plc by hsbc bank plc
in view of the security held the directors consider this deferred consideration virtually certain to be received and have therefore 
included it in these ﬁnancial statements as a noncurrent financial asset and within the group’s deﬁnition of net borrowings 
the amount of £56 million 2011 £56 million included in noncurrent assets represents the agreed amount of 100 million 
discounted at the rate of 5 per annum from 30 september 2014 to date of completion plus an appropriate amount unwound 
on this discounting in the period up to 31 december 2012
18 investment in joint ventures
2012
£m
2012
£m
2011
£m
2011
£m
at 1 january
share of noncurrent assets 102 09
share of current assets 154 75
share of current liabilities 100 47
share of noncurrent liabilities 13 –
143 37
share of net assets of acquired joint venture – 110
143 147
share of income 588 574
share of expenses including special items 553 535
35 39
 tax 02 04
33 35
dividends paid during the year 32 34
exchange adjustments 05 05
retained loss 04 04
at 31 december 
share of noncurrent assets 82 102
share of current assets 190 154
share of current liabilities 133 100
share of noncurrent liabilities – 13
139 143
a list of principal subsidiary undertakings and joint ventures is given on page 89
19 inventories
2012
£m
2011
£m
raw materials and consumables 306 286 
finished goods 475 452 
781 738 
the value of stock written off during the year was £08 million 2011 £14 million
there is no material difference between the balance sheet value of inventories and their replacement cost
the nature of the chemical reaction necessary to produce ﬁnished goods from raw materials is such that ‘work in progress’ 
is not a material part of the group’s inventory at any given point of time
notes to the consolidated ﬁnancial statements
continued 65 synthomer plc annual report 2012
group
ﬁnancial statements
20 trade and other receivables
2012
£m
2011
£m
trade receivables 1200 1219 
amounts owed by joint ventures 06 09 
other receivables 167 229 
prepayments and accrued income 17 10 
1390 1467 
the directors consider that the carrying amount of trade and other receivables approximates to their fair value
credit risk
amounts presented in the balance sheet are net of allowances for doubtful receivables estimated by the group’s management 
based on prior experience and their assessment of the current economic environment the group has no signiﬁcant concentration 
of credit risk with exposure spread over a large number of customers
before accepting a new customer the group uses appropriate procedures to assess the potential customer’s credit quality in 
order to set a credit limit
ageing of trade receivables
2012
£m
2011
£m
not yet due 987 1034 
0 – 60 days overdue 203 190 
61 – 120 days overdue 28 19 
over 120 days due 34 20 
1252 1263 
less provision for impairment 52 44
1200 1219 
provision for impairment of receivables
2012
£m
2011
£m
at 1 january 44 28 
exchange adjustments 03 01
provisions of acquired businesses – 12 
provisions of sold businesses – 05
creditcharge for the year 10 15 
amounts written off as uncollectible 05 05
at 31 december 52 44 
the provision is predominantly against trade receivables more than 61 days overdue 66 synthomer plc annual report 2012
21 cash and borrowings
2012
£m
2011
£m
current borrowings
bank loans
bank loans and overdrafts 04 – 
malaysian ringgits 100 million sixyear amortising term loan – 39 
other loans
430m 555 guaranteed senior unsecured notes due 2 september 2012 – 278 
04 317 
noncurrent borrowings
bank loans 
unsecured £1500 million multicurrency term loan facility expiring 2015 1454 1490 
malaysian ringgits 100 million sixyear amortising term loan – 98 
other loans
700m 578 guaranteed senior unsecured notes due 2 september 2014 433 453 
220m 598 guaranteed senior unsecured notes due 2 september 2016 136 142 
2023 2183 
less capitalised costs 19 24
2004 2159 
 in aggregate £569 million associated with which is the currency impact of derivatives of £61 million net £508 million
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents or government 
bond rates appropriate to the country in which the borrowing is incurred
at 31 december 2012 the group had available £600 million 2011 £600 million of undrawn committed borrowing facilities in 
respect of which all conditions precedent had been met
the directors calculate the carrying value of the group’s borrowings as follows
analysis of borrowings at carrying value by currency
sterling
£m
us dollar
£m
euro
£m
other
£m
total
£m
31 december 2012
bank loans and overdrafts 04––– 04
bank loans –– 1454– 1454
loan notes –569–– 569
capitalised costs 19 – – – 19
15 5691454– 2008
cash and cash equivalents 537
financial asset – see note 17 56
net borrowings 1415
deduct special item fair value adjustment 61
add special item nonrecourse factoring 204
net borrowings underlying performance 1558
notes to the consolidated ﬁnancial statements
continued 67 synthomer plc annual report 2012
group
ﬁnancial statements
21 cash and borrowings continued
sterling
£m
us dollar
£m
euro
£m
other
£m
total
£m
31 december 2011
bank loans – – 14901371627
loan notes – 873–– 873
capitalised costs 24 – – – 24
24 87314901372476
cash and cash equivalents 859
financial asset – see note 17 56
net borrowings 1561
deduct special item fair value adjustment 128
add special item nonrecourse factoring 210
net borrowings underlying performance 1643
the special item fair value adjustment represents the revaluation of us dollar loan notes from the rate of the related cross 
currency swaps to the year end rate together with the transitional adjustment required to reﬂect movements in fair value caused 
by variations in interest rates and subsequent amortisation thereof to the extent that these constituted effective hedges prior to 
the adoption of ifrs
cash and cash equivalents are deposited with ﬁnancial institutions with a credit rating of a or higher
22 financial instruments
the group’s treasury function operates procedures designed to reduce or eliminate ﬁnancial risk and ensure that funds are available 
for current and future needs the policies are approved by the board and the use of ﬁnancial instruments is strictly controlled
the group manages its capital to ensure that entities in the group will be able to continue as going concerns while maximising 
the return to stakeholders through the optimisation of the debt and equity balance the capital structure of the group consists 
of debt which includes the cash and borrowings disclosed in note 21 and equity attributable to equity holders of the parent 
comprising issued capital reserves and retained earnings
the group’s principal ﬁnancial instruments comprise borrowings some cash and liquid resources and various items such as 
trade debtors and trade creditors that arise directly from its operations the group also uses interest rate swaps currency 
swaps and forward foreign currency contracts to manage the interest rate and currency risks arising from the group’s operations 
and its sources of ﬁnance
it is and has been throughout the period under review the group’s policy that no trading in derivative financial instruments shall 
be undertaken
set out below is a breakdown of the group’s ﬁnancial assets and liabilities
2012 2011
loans and
receivables
£m
fair value
through
proﬁt
and loss
£m
loans and
receivables
£m
fair value
through
proﬁt
and loss
£m
financial assets
trade and other receivables excluding prepayments 1373– 1457–
cash and cash equivalents 537– 859–
financial asset –56 –56
derivatives at fair value –87 –174
1910143 2316230
amortised
cost
£m
derivative
instruments in
designated
hedge
accounting
£m
amortised
cost
£m
derivative
instruments in
designated
hedge
accounting
£m
financial liabilities
loan notes 569– 873–
bank loans and overdrafts 1439– 1603–
derivatives at fair value –43 –56
trade and other payables excluding accruals 1451– 1463–
345943 393956 68 synthomer plc annual report 2012
22 financial instruments continued
set out below is a comparison by category of book values and fair values of the group’s ﬁnancial assets and liabilities
carrying values
at 31 december
fair values
at 31 december
2012
£m
2011
£m
2012
£m
2011
£m
fair value of ﬁnancial assets
trade and other receivables excluding prepayments 1373 1457 1373 1457
cash and cash equivalents 537 859 537 859
financial asset 56 56 56 56
derivatives at fair value 87 174 87 174
2053 2546 2053 2546
fair value of ﬁnancial liabilities
loan notes 569 872 596 918
bank loans and overdrafts 1439 1604 1435 1604
derivatives at fair value 43 56 43 56
trade and other payables excluding accruals 1451 1463 1451 1463
3502 3995 3525 4041
fair values have been obtained from the relevant institutions where appropriate where market values are not available fair values 
of ﬁnancial assets and ﬁnancial liabilities have been calculated by discounting expected future cash ﬂow at prevailing interest 
rates and by applying year end exchange rates the carrying amount of shortterm borrowings approximates to book value
the fair value of the group’s ﬁnancial instruments are measured using inputs other than quoted prices that are directly or 
indirectly observable
the main risks arising from the group’s ﬁnancial instruments are market risk and liquidity risk the board reviews and agrees 
policies for managing each of these risks and they are summarised below together with related disclosure required by ifrs
market risk
the group’s main exposure to market risk is in the form of interest rate risk and foreign currency risk the policies adopted to 
address these risks are as follows
interest rate risk
the group ﬁnances its operations through a mixture of retained proﬁts loan notes and bank borrowings the group borrows at 
both ﬁxed and ﬂoating rates of interest and uses interest rate swaps to generate the desired interest proﬁle in order to manage the 
group’s exposure to interest rate ﬂuctuations
foreign currency risk
the group uses currency borrowings forward contracts and currency swaps to hedge overseas net assets which are 
predominantly denominated in euros proﬁt translation exposures are not hedged
the group hedges currency transaction exposures at the point of conﬁrmed order using forward foreign exchange contracts 
the group’s policy is where practicable to hedge all exposures on monetary assets and liabilities consequently there are 
no material currency exposures to disclose 2011 none
impact on income statement
changes in the fair value of derivative contracts amounting to £17 million have been debited to the income statement in the 
year 2011 debit of £33 million these changes are shown separately as a special item in the consolidated income statement
notes to the consolidated ﬁnancial statements
continued 69 synthomer plc annual report 2012
group
ﬁnancial statements
22 financial instruments continued
hedge accounting
the group has a number of cross currency swaps that are used to reduce the exposure to interest rate and currency risk
these swaps are fully effective at eliminating the risks they address the group has reviewed the requirements necessary to 
permit the application of hedge accounting under ias39 it has concluded that the costs involved in meeting these requirements 
cannot be justiﬁed and therefore ias39 hedge accounting will not be applied
changes in the fair value of derivative ﬁnancial instruments to which hedge accounting is not applied are recognised in the 
income statement as they arise
the group has designated a number of interest rate swap agreements acquired as part of the acquisition of polymerlatex 
group which in combination represent a ﬂoating to ﬁxed interest rate swap on a principal euro amount of €156 million as an 
effective hedge against the interest rate exposure associated with a substantial portion of the group’s euro denominated ﬂoating 
rate £150 million term loan as such these contracts are now accounted for as cashﬂow hedges as permitted by ias39
in addition the group has taken out forward foreign exchange contracts to ﬁx the sterling value of its net investments in 
certain foreign operations which have a euro functional currency these contracts together with €1778 million drawn on 
the multicurrency term loan facility have been accounted for as net investment hedges as permitted by ias39
interest rate risk proﬁle
financial liabilities
after taking into account the various interest rate and currency swaps entered into by the group the currency and interest rate 
exposure of the group as at 31 december 2012 was
2012 2011
floating rate
borrowings
£m
fixed rate
borrowings
£m
total
borrowings
£m
floating rate
borrowings
£m
fixed rate
borrowings
£m
total
borrowings
£m
sterling 193 300 493 321 400 721 
euro 179 1275 1454 183 1307 1490 
us dollar – – – – – – 
other – – – 137 – 137 
372 1575 1947 641 1707 2348 
cash and cash equivalents 537 859
financial asset – see note 17 56 56
add special item nonrecourse factoring 204 210 
net borrowings underlying performance 1558 1643 
the effective interest rate for the year was 47 2011 44
sensitivity analysis
the following table illustrates the effect on the income statement and items that are recognised directly in equity that would result 
from reasonably possible movements in uk and us interest rates and in euro and us dollar to sterling exchange rates before 
the effect of tax
2012 2011
income statement equity income statement equity
underlying
 £m
ifrs
 £m
ifrs
 £m
underlying
 £m
ifrs
 £m
 ifrs
 £m
interest rate sensitivity analysis
uk interest rate  10 02 06 – 03 12 – 
euro interest rate  10 04 04 12 04 04 25
us interest rate  10 – 13 – – 22 – 
foreign currency sensitivity analysis
euro exchange rate  10 04 04 33 08 08 36 
us dollar exchange rate  10 – 07 – – 11 –  70 synthomer plc annual report 2012
22 financial instruments continued
the interest rate sensitivity analysis has been determined based on the exposure to interest rates for both derivatives and 
nonderivative instruments at the balance sheet date for ﬂoating rate liabilities the analysis is prepared assuming the amount 
of liability outstanding at the balance sheet date was outstanding for the whole year
the foreign currency sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts 
their translation at the period end for a 10 change in foreign currency rates the sensitivity analysis includes external loans as 
well as loans to foreign operations within the group where the denomination of the loan is in a currency other than the functional 
currency of the lender or borrower
liquidity risk
the objective of the group is to meet ﬁnancial commitments as and when they fall due the board closely monitors liquidity 
through monthly management accounts
at the year end synthomer plc had the following principal facilities
a committed syndicated bank facility of £210 million comprising a £150 million term loan which was drawndown in euros on 
completion of the polymerlatex acquisition and a £60 million revolving credit facility which was undrawn at 31 december 2012
unsecured loan notes totalling approximately £51 million raised from the us private placement market in 2004 with maturity 
between 2014 and 2016 these loan notes provide the group’s longterm requirements please see note 21 for further details
the following table details the remaining contractual maturity for nonderivative ﬁnancial liabilities
2012 2011
amount due amount due
within
one year
£m
between
1 and
2 years
£m
between
2 and
5 years
 £m
after
5 years
 £m
total 
£m
within
one year
£m
between
1 and
2 years
£m
between
2 and
5 years
 £m
after
5 years
 £m
total 
£m
noninterest bearing
trade and other 
payables excluding
 accruals 1451 – – – 1451 1461 02 – – 1463 
variable interest 
rate instruments
bank loans 
and overdrafts 39 34 1462 – 1535 97 99 1614 – 1810 
fixed interest 
rate instruments
loan notes 33 466 153 – 652 328 35 647 – 1010 
1523 500 1615 – 3638 1886 136 2261 – 4283 
the following table details the remaining contractual maturity for nonderivative ﬁnancial assets
2012 2011
amount due amount due
within
one year
£m
between
1 and
2 years
£m
between
2 and
5 years
 £m
after
5 years
 £m
total 
£m
within
one year
£m
between
1 and
2 years
£m
between
2 and
5 years
 £m
after
5 years
 £m
total 
£m
noninterest bearing
trade and other 
 receivables
 excluding
 prepayments 1373 – – – 1373 1457 – – – 1457 
financial asset – 56 – – 56 – – 56 – 56 
variable interest rate
instruments 
cash and cash 
 equivalents 537 – – – 537 859 – – – 859 
1910 56 – – 1966 2316 – 56 – 2372 
notes to the consolidated ﬁnancial statements
continued 71 synthomer plc annual report 2012
group
ﬁnancial statements
22 financial instruments continued
the following table details the remaining contractual maturity for its derivative ﬁnancial instruments
2012 2011
amount due amount due
within
one year
£m
between
1 and
2 years
£m
between
2 and
5 years
 £m
after
5 years
 £m
total 
£m
within
one year
£m
between
1 and
2 years
£m
between
2 and
5 years
£m
after
5 years
 £m
total
£m
interest rate swaps 45 – – – 45 24 23 – – 47
cross currency 
 swaps 14 10 03 – 27 19 12 15 – 46
foreign exchange
forward contracts 07 – – – 07 08 – – – 08 
66 10 03 – 79 35 35 15 – 85
in accordance with ifrs 7  the above table shows undiscounted cash ﬂows in contrast ias39 requires these items to be carried in 
the balance sheet at fair value which is based on discounted cash ﬂows
23 trade and other payables
2012
£m
2011
£m
amount due within one year
trade creditors 1219 1028 
other creditors 232 434 
accruals and deferred income 397 475 
1848 1937 
amount due in greater than one year
other creditors – 02 
1848 1939 
average trade creditor days in 2012 was 66 2011 51 this ﬁgure represents trade creditor days for all trading operations within 
the group calculated as a weighted average based on cost of sales
the directors consider that the carrying amount of trade payables approximates to their fair value
24 post retirement beneﬁt obligations
charge to income statement in respect of the group’s pension schemes
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
uk overseas total uk overseas total uk overseas total uk overseas total uk overseas total
deﬁned beneﬁt 062733 122436180725320739100414
deﬁned
contribution 153651 182644140923050813040812
216384 305080321648371552141226 72 synthomer plc annual report 2012 72 synthomer plc annual report 2012
24 post retirement beneﬁt obligations continued
the fair value of the assets in the schemes and the present value of the liabilities in the schemes at each balance sheet date were
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
uk overseas total uk overseas total uk overseas total uk overseas total uk overseas total
present value
of funded
 deﬁned
 beneﬁt 
 obligations 3015 568 3583 2721 500 3221 2502 153 2655 2415 140 2555 2057 135 2192
fair value of
 scheme
 assets 2320 66 2386 1982 60 2042 1937 58 1995 1715 53 1768 1383 53 1436 
post retirement
 beneﬁt
 obligations 695 502 1197 739 440 1179 565 95 660 700 87 787 674 82 756
uk pension schemes
the group’s uk deﬁned beneﬁt scheme was closed to future accrual in 2009 all pension beneﬁts since that time are provided 
by way of a deﬁned contribution scheme
the assets of the scheme are held separately from those of the companies concerned
contributions to the scheme are charged to the proﬁt and loss account to spread the cost of pensions over employees’ working 
lives within the group
deﬁned beneﬁt scheme
the major assumptions used in the calculation of the ias19 liability are
2012 2011 2010 2009 2008
rate of increase in salaries na na na 300 260
rate of increase in pensions in payment 300 300 325 300 250
rate of increase in pensions in deferment 200 200 225 300 250
discount rate 460 480 540 570 650
rates of return on plan assets 656 662 7 12 822 731
inﬂation assumption 300 300 325 300 260
in addition for calculating the 2012 liability the mortality tables used assumed a 65 year old man will live to 869 and a 
65 year old woman will live to 890 with a 125 improvement rate
notes to the consolidated ﬁnancial statements
continued 73 synthomer plc annual report 2012
group
ﬁnancial statements
73 synthomer plc annual report 2012
24 post retirement beneﬁt obligations continued
amount charged to operating proﬁt
2012
£m
2011
£m 
current service cost 05 07 
expected return on plan assets 130 127
interest cost relating to pension scheme liabilities 131 132 
06 12
actuarial loss recognised in the statement of comprehensive income
2012
£m
2011
£m 
actual return less expected return on pension scheme assets 132 104
experience gains and losses arising on the scheme liabilities 276 191
144 295
2012
£m
2011
£m 
cumulative actuarial lossesgains recognised in the statement of other comprehensive income 831 687
history of experience gains and losses
2012 2011 2010 2009 2008
difference between the expected and actual return on
scheme assets
amount £m 132 104 76 212 647
percentage of scheme assets  57 53 39124468
experience gains and losses arising on the scheme
 liabilities
amount £m 276 191 65 328 253 
percentage of the present value of scheme liabilities  92 70 26 136 123
total actuarial lossesgains recognised in the statement
of recognised income and expense
amount £m 144 295 11 116 394
percentage of the present value of scheme liabilities  48 108 0448 192
the actual return on plan assets was £26159000 2011 £2263000
movements in the present value of deﬁned beneﬁt obligations were as follows
2012
£m
2011
£m 
at 1 january 2721 2502
current service cost 05 07
interest cost 132 132
experience gains and losses arising on the scheme liabilities 276 191
cash paid by sponsoring companies 05 07 
beneﬁts paid 112 104 
at 31 december 3015 2721 74 synthomer plc annual report 2012
24 post retirement beneﬁt obligations continued 
movements in the fair value of the scheme assets were as follows
2012
£m
2011
£m 
at 1 january 1982 1937 
expected return on scheme assets 130 127 
actual return less expected return on pension scheme assets 132 104
contributions from sponsoring companies 188 126 
beneﬁts paid 112 104
at 31 december 2320 1982 
contributions from the sponsoring companies are expected to be less than £5000000 in 2013
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at 
each balance sheet date were
2012

2012 
£m
2011

2011 
£m
2010

2010 
£m
2009

2009 
£m
2008

2008 
£m 
equities 780 1192 780 1048 770 1104 800 1134 900 903 
bonds 460 808 480 694 540 608 570 543 670 476 
property 780 201 780 187 770 105 – – 
cash 100 119 080 53 200 120 200 38 425 04 
total fair value of assets 2320 1982193717151383
present value of scheme
 liabilities 3015 2721 2502 2415 2057
post retirement beneﬁt
 obligations 695 739 565 700 674
overseas pension schemes
the group operates a number of smaller overseas pension and postretirement schemes the assets of these schemes 
are held separately from those of the group with the exception of the unfunded german schemes net liability £477 million 
2011 £427 million where in line with common practice the assets are held within the respective companies
deﬁned beneﬁt schemes
the aggregated pension disclosure below for the overseas deﬁned beneﬁt schemes has been compiled from a number of 
actuarial valuations at 31 december 2012
the largest of these schemes accounts for £378 million 2011 £345 million of the deﬁcit at 31 december 2012 the major 
assumptions used in the actuarial valuation of this scheme are
2012 2011
rate of increase in salaries 300 300
rate of increase in pensions 200 200
discount rate 380 450
inﬂation assumption 300 300
the major assumption used in the valuation of the other overseas schemes do not differ signiﬁcantly from the above
amount charged to operating proﬁt
2012
£m
2011
£m
current service cost 05 05 
expected return on plan assets 01 01
interest cost relating to pension scheme liabilities 23 20 
27 24 
notes to the consolidated ﬁnancial statements
continued 75 synthomer plc annual report 2012
group
ﬁnancial statements
24 post retirement beneﬁt obligations continued
actuarial lossgain recognised in the statement of comprehensive income
2012
£m
2011
£m 
actual return less expected return on pension scheme assets 06 03 
experience gains and losses arising on the scheme liabilities 62 48
56 45
2012
£m
2011
£m 
cumulative actuarial lossesgains recognised in the statement of other comprehensive income 83 27
the actual return on plan assets was £07 million 2011 £04 million gain
analysis of the movements in the net balance sheet liability before deferred tax
2012
£m
2011
£m 
net liability at 1 january 440 95
acquisition of polymerlatex – 308
total expense as detailed above 27 23
contributions made 13 11 
actuarial gain 56 45
exchange movements 08 20 
net liability at 31 december 502 440
25 share capital
2012
£m
2011
£m 
issued and fully paid
339880769 2011 339880769 ordinary shares of 10 pence each 340 340
ordinary shares carry no right to ﬁxed income
share options
as at 31 december 2012 the following options were outstanding
executive share options number option price
exercisable between 20132018 224647 a
exercisable between 20132019 2257 495 b
exercisable between 20132020 926046 c
exercisable between 20142021 1252443 d
exercisable between 20152022 866456 e
a options granted under the performance share plan with a total exercise price of £2
b options granted under the performance share plan with a total exercise price of £9
c options granted under the performance share plan with a total exercise price of £16
d options granted under the performance share plan with a total exercise price of £17
e options granted under the performance share plan with a total exercise price of £23 76 synthomer plc annual report 2012
26 reconciliation of operating proﬁt to cash generated from operations
2012
£m
2011
£m 
operating proﬁt – continuing operations 749 544
operating proﬁt – discontinued operations – 41
less share of proﬁts of joint ventures 33 35
716 550
adjustments for
depreciation underlying 181 224
amortisation underlying 03 04
amortisation special items 258 191
restructuring and site closure – cash costs 60 158
– noncash costs 07 44
sharebased payments 11 13
acquisition costs expensed in the period – 14
proﬁt on sale of ﬁxed assets 01 02
acquisition costs cash spent in the period 04 44
termination of interest swap acquired – 30
share based payments – cash cost 68 –
cash impact of restructuring and site closure 114 58
cash impact of termination of discontinued operations – 04
pension funding in excess of ias19 charge 173 110
increasedecrease in inventories 59 73
decreaseincrease in trade and other receivables 48 85
decrease in trade and other payables 08 136
cash generated from operations 857 802
reconciliation of movement in working capital
2012
£m
2011
£m 
increasedecrease in inventories 59 73
decreaseincrease in trade and other receivables 48 85
decrease in trade and other payables 08 136
movement in working capital 19 148
add back reduction in factored invoices 06 98
movement in working capital underlying 13 50
27 analysis of changes in net borrowings
1 january
2012
£m
cash inﬂows
outﬂows
£m
exchange
and other
movements
£m
31 december
2012
£m
cash and cash equivalents 859 311 11 537 
current borrowing – bank overdrafts – 04 – 04
859 315 11 533 
financial asset 56 – – 56 
current borrowings 317 277 40 – 
noncurrent borrowings 2159 92 63 2004
net borrowings 1561 54 92 1415
deduct special item fair value adjustment 128 – 67 61 
1433 54 25 1354
add special item factoring 210 – 06 204
net borrowings underlying performance 1643 54 31 1558
the special item represents the revaluation of us dollar loan notes from the rate of the related cross currency swaps to the 
year end rate together with the transitional adjustment required to reﬂect movements in fair value caused by variations in 
interest rates and subsequent amortisation thereof to the extent that these constituted effective economic hedges
notes to the consolidated ﬁnancial statements
continued 77 synthomer plc annual report 2012
group
ﬁnancial statements
28 related party transactions
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and 
are not included in this note transactions between the company and its subsidiaries are disclosed in the company’s ﬁnancial 
statements where appropriate
key management compensation
2012
£m
2011
£m 
shortterm employee beneﬁts 36 37 
post retirement beneﬁt obligations 03 03 
sharebased payments 15 14 
54 54 
the key management ﬁgures given above include the directors and members of the executive committee 
29 commitments
2012
£m
2011
£m 
capital expenditure authorised but not provided for in the ﬁnancial statements
contracted 137 94 
2012
£m
2011
£m 
commitments under operating leases are as follows
payments under operating leases which fall due
within 1 year 34 38 
between 2 and 5 years 74 85 
after 5 years 166 176 
274 299 
30 contingent assets contingent liabilities and guarantees
guarantees of the parent company in respect of bank and other facilities of subsidiaries and joint ventures totalled £57 million
2011 £175 million
other guarantees and contingent liabilities of the group amount to £03 million 2011 £04 million
the company and its subsidiaries have in the normal course of business entered into guarantees and counterindemnities 
in respect of performance bonds relating to the group’s own contracts 78 synthomer plc annual report 2012
31 sharebased payments
executive share option schemes
details of the share option schemes available to senior management are included in the remuneration report on pages 35 to 39
the charge to proﬁt is calculated on the assumption that given that the exercise price is effectively nil the share price at grant 
provides a reasonable estimate of the option value at grant
options
2012
weighted
average
exercise
price £ 
2012
options
2011
weighted
average
exercise
price £ 
2011
outstanding at 1 january 7515639 – 6517753 – 
granted during the period 866456 – 1411135 – 
exercised during the period 2793242 – 124086 – 
lapsed during the period 61766 – 289163 – 
outstanding at 31 december 5527087 – 7515639 – 
exercisable at 31 december 736412 1783959 
for options outstanding as at 31 december 2012 the exercise price was £nil and the weighted average remaining contractual life 
was 42 years 2011 44 years
yule catto employee beneﬁt trust
the company established a trust the yule catto employee beneﬁt trust on 17 july 1996 to distribute shares to employees 
enabling the obligations under the yule catto longerterm performance share plan and the yule catto longerterm deferred 
bonus plan to be met the trust is managed by the rbc trustees guernsey limited an independent company located in 
guernsey
at 31 december 2012 the trust held 331502 2011 331502 ordinary shares in the company with a market value of 
£06 million 2011 £05 million
the dividends on these shares have been waived all of the shares are under option costs are amortised over the life of 
the plans
32 share price information
the middle market value of the listed ordinary shares at 31 december 2012 was 1886 pence during the year the market 
price ranged between 1274 pence and 2510 pence the latest ordinary share price is available on the financial times cityline 
service telephone 09058 171690
33 reconciliation of ebitda
underlying performance ifrs
2012
£m
2011
£m
2012
£m
2011
£m
operating proﬁt 1090 964 749 544 
add acquisition costs – – – 14 
add restructuring and site closure – cash costs – – 60 158 
add restructuring and site closure – noncash costs – – 07 44 
add back amortisation – underlying 03 04 03 04 
add back amortisation – special items a – – 274 204 
add back depreciation – underlying 181 184 181 184 
ebitda 1274 1152 1274 1152 
a including amounts attributable to joint ventures
notes to the consolidated ﬁnancial statements
continued 79 synthomer plc annual report 2012
company
ﬁnancial statements
independent auditor’s report to the 
members of synthomer plc
we have audited the parent company ﬁnancial statements of 
synthomer plc for the year ended 31 december 2012 which 
comprise the parent company balance sheet and the related notes 
the ﬁnancial reporting framework that has been applied in their 
preparation is applicable law and united kingdom accounting 
standards united kingdom generally accepted accounting practice
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ responsibilities 
set out on page 40 the directors are responsible for the preparation 
of the parent company 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 parent company 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 ethical standards for auditors 
this report including the opinions has been prepared for and only 
for the company’s members as a body in accordance with chapter 3 
of part 16 of the companies act 2006 and for no other purpose 
we do not in giving these opinions accept or assume responsibility 
for any other purpose or to any other person to whom this report is 
shown or into whose hands it may come save where expressly agreed 
by our prior consent in writing
scope of the audit of the ﬁnancial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the ﬁnancial statements sufﬁcient to give reasonable 
assurance that the ﬁnancial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of signiﬁcant 
accounting estimates made by the directors and the overall 
presentation of the ﬁnancial statements in addition we read all 
the ﬁnancial and nonﬁnancial information in the annual report to 
identify material inconsistencies with the audited ﬁnancial statements 
if we become aware of any apparent material misstatements or 
inconsistencies we consider the implications for our report
opinion on ﬁnancial statements 
in our opinion the parent company ﬁnancial statements
 give a true and fair view of the state of the company’s affairs as at 
31 december 2012
 have been properly prepared in accordance with united kingdom 
generally accepted accounting practice and 
 have been prepared in accordance with the requirements of the 
companies act 2006
opinion on other matters prescribed by the companies act 2006 
in our opinion
 the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the companies act 2006 
and 
 the information given in the directors’ report for the ﬁnancial year 
for which the parent company ﬁnancial statements are prepared 
is consistent with the parent company ﬁnancial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters where 
the companies act 2006 requires us to report to you if in our opinion 
 adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been received 
from branches not visited by us or 
 the parent company ﬁnancial statements 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 
other matter
we have reported separately on the group ﬁnancial statements 
of synthomer plc for the year ended 31 december 2012
andrew latham senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
st albans
14 march 2013 80 synthomer plc annual report 2012
company balance sheet
31 december 2012
note
2012
£m
2011 
£m
fixed assets
tangible ﬁxed assets 5 26 26 
investments 6 2892 2729 
2918 2755 
current assets
debtors 7 7670 1 17 43 
cash at bank and in hand 49 311 
derivatives at fair value 87 174 
7806 12228 
creditors – amounts falling due within one year
borrowings 8 654 723
other creditors 10 1211 8139
1865 8862
net current assetsliabilities 5941 3366 
total assets less current liabilities 8859 6121 
creditors – amounts falling due after more than one year
borrowings 8 2004 2061
net assets 6855 4060 
capital and reserves
called up share capital 11 340 340 
share premium 12 2305 2305 
revaluation reserve 12 08 08 
capital redemption reserve 12 09 09 
proﬁt and loss account 12 4193 1398 
shareholders funds 6855 4060 
analysis of net borrowings
cash at bank and in hand 49 311 
borrowings due in less than one year 654 723
borrowings due after more than one year 2004 2061
net borrowings 2609 2473
deduct special item 61 128 
net borrowings underlying performance 8 2548 2345
the ﬁnancial statements of synthomer plc formerly yule catto  co plc registered number 98381 on pages 80 to 88 
were approved on 14 march 2013
a m whitﬁeld
d c blackwood
directors 81 synthomer plc annual report 2012
company
ﬁnancial statements
1 accounting policies
the principal accounting policies are summarised below 
they have all been applied consistently throughout the year 
and the preceding year
basis of accounting
the ﬁnancial statements have been prepared on the 
going concern basis under the historical cost convention as 
modiﬁed by the revaluation of certain ﬁxed assets and comply 
with applicable uk accounting standards and the companies 
act 2006
foreign currencies
transactions in foreign currencies are recorded at the rate 
of exchange at the date of the transaction or if hedged 
at the forward contract rate monetary assets and liabilities 
denominated in foreign currencies at the balance sheet date 
are reported at the rates of exchange prevailing at that date or 
if appropriate at the forward contract rate
tangible ﬁxed assets
tangible ﬁxed assets are stated at cost or valuation net of 
depreciation and any provision for impairment cost includes 
the original purchase price of the asset plus the costs 
attributable to bringing the asset to its working condition 
for its intended use except for freehold land which is not 
depreciated the cost or valuation of tangible ﬁxed assets is 
depreciated on a straightline basis over their expected useful 
lives as follows
freehold buildings  – 50 years
leasehold land and buildings  –  the lesser of 50 years 
and the period of the lease
plant and equipment  – between 3 and 10 years
revaluation of properties
where depreciation charges are increased following a 
revaluation an amount equal to the increase is transferred 
annually from the revaluation reserve to the proﬁt and loss 
account as a movement on reserves on the disposal or 
recognition of a provision for impairment of a revalued 
ﬁxed asset any related balance remaining in the revaluation 
reserve is also transferred to the proﬁt and loss account 
as a movement on reserves
investments
fixed asset investments are shown at cost less provision 
for impairment
intercompany
intercompany balances are shown gross unless a right 
of set off exists
borrowings
borrowings are initially stated at the amount of the net 
proceeds after deduction of issue costs
taxation
current tax including uk corporation tax and foreign tax is 
provided at amounts expected to be paid or recovered using 
the tax rates and laws that have been enacted or substantively 
enacted by the balance sheet date
deferred taxation
deferred tax is recognised in respect of all timing differences 
that have originated but not reversed at the balance sheet date 
where transactions or events that result in an obligation to pay 
more tax in the future or a right to pay less tax in the future 
have occurred at the balance sheet date timing differences 
are differences between the company’s taxable proﬁts and 
its results as stated in the ﬁnancial statements that arise from 
the inclusion of gains and losses in tax assessments in periods 
different from those in which they are recognised in the 
ﬁnancial statements
a net deferred tax asset is regarded as recoverable and 
therefore recognised only when on the basis of all available 
evidence it can be regarded as more likely than not that there 
will be suitable taxable proﬁts from which the future reversal 
of the underlying timing differences can be deducted
deferred tax is measured at the average tax rates that are 
expected to apply in the periods in which the timing differences 
are expected to reverse based on tax rates and laws that have 
been enacted or substantively enacted by the balance sheet date
deferred tax is measured on a nondiscounted basis
financial instruments
financial assets and ﬁnancial liabilities including derivative 
instruments are recognised on the company balance sheet 
when the company becomes a party to the contractual 
provisions of the instrument
trade debtors
trade debtors do not carry any interest and are stated at 
their nominal value as reduced by appropriate allowances 
for estimated irrecoverable amounts
bank borrowings
interestbearing bank loans and overdrafts are recorded at the 
proceeds received net of direct issue costs finance charges 
including premiums payable on settlement or redemption and 
direct issue costs are accounted for on an accrual basis to 
the proﬁt and loss account using the effective interest method 
and are added to the carrying amount of the instrument to the 
extent that they are not settled in the period in which they arise 
trade creditors
trade creditors are not interestbearing and are stated at their 
nominal value
equity instruments
equity instruments issued by the company are recorded at 
the proceeds received net of direct issue costs
derivative ﬁnancial instruments
the company enters into derivative ﬁnancial instruments to 
manage its exposure to interest rate and foreign exchange rate 
risk including cross currency interest rate swaps and forward 
foreign exchange contracts the company does not hold or 
issue derivative ﬁnancial instruments for speculative purposes
notes to the company ﬁnancial statements
31 december 2012 82 synthomer plc annual report 2012
1 accounting policies continued
derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured 
to their fair value at each balance sheet date a derivative with a positive fair value is recognised as a ﬁnancial asset whereas a 
derivative with a negative fair value is recognised as a ﬁnancial liability the resulting gain or loss is recognised in the proﬁt and 
loss account immediately unless the derivative is designated and effective as a hedging instrument in which event the timing of 
the recognition in the proﬁt and loss account depends on the nature of the hedge relationship the company designates certain 
derivatives as fair value hedges
the use of ﬁnancial derivatives is governed by the group’s policies approved by the board of directors which provide written 
principles on the use of ﬁnancial derivatives
fair value hedge accounting
changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the proﬁt and loss 
account together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk 
the company only applies fair value hedge accounting for foreign currency exposure associated with the underlying hedged 
item the gain or loss relating to the ineffective portion is also recognised in the proﬁt and loss account
net borrowings
net borrowings represents cash and cash equivalents together with short and longterm borrowings as adjusted for the effect 
of related derivative instruments irrespective of whether they qualify for hedge accounting
pension funding
the costs of contributions to the group’s pension schemes and of augmenting existing pensions are charged to the proﬁt and 
loss account on a systematic basis over the expected period of beneﬁts from employees’ service
the uk deﬁned beneﬁt scheme is funded with the assets of the scheme held separately from those of the group in separate 
trusteeadministered funds
payments to deﬁned contribution retirement beneﬁt schemes are charged as an expense as they fall due
2 auditor’s remuneration
the audit fee of synthomer plc amounted to £4000 2011 £7 000
3 proﬁt attributable to equity shareholders
uk gaap basis
2012
£m
2011
£m 
attributable to synthomer plc formerly – yule catto  co plc 3000 391 
as permitted by section 408 of the companies act 2006 no proﬁt and loss account is presented for synthomer plc 
formerly yule catto  co plc
  the above has been calculated on a uk gaap basis as this is consistent with the continued presentation of synthomer plc’s formerly yule catto  co plc 
accounts under uk gaap
4 ordinary dividends
2012
pence
per share
2011
pence
per share
2012
£m
2011
£m 
interim dividend 22 12 75 41 
proposed ﬁnal dividend 33 23 112 78 
the proposed ﬁnal dividend is subject to approval by shareholders at the annual general meeting and has not been included 
as a liability in these ﬁnancial statements
notes to the company ﬁnancial statements
continued 83 synthomer plc annual report 2012
company
ﬁnancial statements
5 tangible ﬁxed assets
land and buildings
freeholds
£m
long 
leaseholds
£m
plant and
equipment
£m
total
£m
cost or valuation
at 1 january 2012 28 01 17 46 
additions – – 02 02 
disposals – – 01 01
at 31 december 2012 28 01 18 47 
at cost – – 18 18 
at professional valuation in 1985 28 01 – 29 
28 01 18 47 
accumulated depreciation
at 1 january 2012 05 01 14 20 
charge for the year 01 – 01 02 
eliminated on disposals – – 01 01
at 31 december 2012 06 01 14 21 
net book value
at 31 december 2012 22 – 04 26 
net book value
at 31 december 2011 23 – 03 26 
properties included at valuation would have been stated on a historical cost basis at cost of £19 million 2011 £19 million and 
depreciation of £05 million 2011 £05 million
freehold land amounting to £18 million 2011 £18 million has not been depreciated
6 investments
subsidiaries
£m
joint
ventures
£m
other
investments
£m
total
£m
cost
at 1 january 2012 2737 05 01 2743 
additions 2847 – – 2847 
transfers to group companies 2127 – – 2127
disposals 67 – – 67
hedge adjustment see below 07 – – 07 
at 31 december 2012 3397 05 01 3403 
provisions
at 1 january 2012 11 02 01 14 
impairment 503 – – 503 
released on disposals 06 – – 06
at 31 december 2012 508 02 01 511 
net book value
at 31 december 2012 2889 03 – 2892 
net book value
at 31 december 2011 2726 03 – 2729 
a list of principal subsidiary undertakings and joint ventures is given on page 89 84 synthomer plc annual report 2012
6 investments continued
additions for the year represent the investment in ennismore limited a company incorporated in jersey a total amount 
of €3501 million £2847 million was invested the company has designated its euro denominated £150 million multicurrency 
term loan facility of €177 8 million see note 8 as a frs 26 fair value hedge against €177 8 million of this investment under frs 26 
the hedged portion of this investment is retranslated at the year end spot rate with the resulting gain or loss being taken to the 
proﬁt and loss account where it is fully offset by the exchange gain or loss resulting from the retranslation of the term loan 
facility at the same date
also included within the movement in investments during the year were the transfer of the company’s investment in synthomer 
uk limited to a subsidiary of the group and the disposal and impairment of various nontrading companies which are no 
longer required
7 debtors
2012
£m
2011
£m
amounts owed by subsidiaries 7668 1 1626 
other debtors 02 117 
7670 1 17 43 
prior year intercompany balances have been restated to accord with the presentation adopted in the current period this had 
the effect of increasing amounts owed by subsidiaries by £8036 million and increasing amounts owed to subsidiaries by an 
equivalent amount
8 borrowings
2012
£m
2011
£m
current borrowings
bank loans
bank loans and overdrafts 654 445 
other loans
430 million 555 guaranteed senior unsecured notes due 2 september 2012 – 278
654 723
noncurrent borrowings
bank loans
unsecured £1500 million multicurrency term loan facility expiring 2015 1454 1490 
other loans
700 million 578 guaranteed senior unsecured notes due 2 september 2014 433 453 
220 million 598 guaranteed senior unsecured notes due 2 september 2016 136 142 
2023 2085 
less capitalised costs 19 24
2004 2061 
 in aggregate £569 million 2011 £873 million associated with which is the currency impact of derivatives of £61 million 2011 £128 million net £508 million
2011 £745 million
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents
at 31 december 2012 the company had available £600 million 2011 £600 million of undrawn committed borrowing facilities 
in respect of which all conditions precedent had been met
notes to the company ﬁnancial statements
continued 85 synthomer plc annual report 2012 85 synthomer plc annual report 2012
company
ﬁnancial statements
8 borrowings continued
analysis of borrowings at carrying value by currency
the directors calculate the carrying value of the company’s borrowings as follows
sterling
£m
us dollar
£m
euro
£m
total
£m
31 december 2012
bank loans and overdrafts 262 14 1832 2108 
loan notes – 569 – 569 
capitalised costs 19 – – 19
243 583 1832 2658 
cash and cash equivalents 49
net borrowings 2609 
deduct special item 61
net borrowings underlying performance 2548 
sterling
£m
us dollar 
£m
euro 
£m
total 
£m
31 december 2011
bank loans and overdrafts 7 9 08 1848 1935 
loan notes – 873 – 873 
capitalised costs 24 – – 24
55 881 1848 2784 
cash and cash equivalents 311
net borrowings 2473 
deduct special item 128
net borrowings underlying performance 2345 
cash and cash equivalents comprise cash at bank and other shortterm highly liquid investments with a maturity of three months 
or less
  the special item represents the revaluation of us dollar loan notes from the rate of the related cross currency swaps to the year end rate together with the 
transitional adjustment required to reﬂect movements in fair value caused by variations in interest rates and subsequent amortisation thereof to the extent 
that these constituted effective hedges under pre frs 26 uk gaap
9 financial instruments
the fair value of derivative ﬁnancial instruments has been disclosed in the company’s balance sheet as
2012 2011
loans
and
 receivables
£m
fair value
 through
proﬁt
and loss
£m
total
carrying
value
£m
loans and
receivables
£m
fair value
through
proﬁt
and loss
£m
total
carrying
value
£m
fair value of ﬁnancial assets
trade and other receivables excluding
 prepayments 7670– 7670 1 17 43– 11743
cash and cash equivalents 49– 49 311– 311
derivatives at fair value –8787 –174174
7719877806 12054174 12228
2012 2011
loans and
payables at
 amortised
 cost
£m
fair value
 through
proﬁt
and loss
£m
total
carrying
value
£m
loans and
payables at
amortised
 cost
£m
fair value
through
proﬁt
and loss
£m
total
carrying
value
£m
fair value of ﬁnancial liabilities
loan notes 569– 569 873– 873
bank loans and overdrafts 2089 – 2089 1911– 1911
trade and other payables excluding accruals 1150– 1150 8070– 8070
3808 – 3808 10854–10854
a fuller description of ﬁnancial instruments is included in note 22 of the consolidated ﬁnancial statements on pages 67 to 71 86 synthomer plc annual report 2012
10 other creditors
2012
£m
2011
£m
amount due within one year
trade creditors 06 12 
amounts owed to subsidiaries 1135 8036 
other taxation and social security 01 01 
other creditors 08 21 
accruals and deferred income 61 69 
1211 8139 
11 called up share capital
2012
£m
2011
£m
issued and fully paid
339880769 2011 339880769 ordinary shares of 10 pence each 340 340 
issued and nil paid
nil 2011 nil ordinary shares of 10 pence each – –
ordinary shares carry no right to ﬁxed income
share options
as at 31 december 2012 the following options were outstanding
executive share options number option price
exercisable between 20132018 224647 a
exercisable between 20132019 2257 495 b
exercisable between 20132020 926046 c
exercisable between 20142021 1252443 d
exercisable between 20152022 866456 e
a options granted under the performance share plan with a total exercise price of £2
b options granted under the performance share plan with a total exercise price of £9
c options granted under the performance share plan with a total exercise price of £16
d options granted under the performance share plan with a total exercise price of £17
e options granted under the performance share plan with a total exercise price of £23
notes to the company ﬁnancial statements
continued 87 synthomer plc annual report 2012
company
ﬁnancial statements
12 share premium and reserves 
share
premium
£m
revaluation
reserve
£m
capital
redemption
reserve
£m
proﬁt and
loss account
£m
total
£m
at 1 january 2012 2305 08 09 1398 3720 
proﬁt for the year – – – 3000 3000 
dividends – – – 153 153
retained proﬁt for the year – – – 2847 2847 
sharebased payments – – – 52 52
at 31 december 2012 2305 08 09 4193 6515 
13 related party transactions
there were no related party transactions during the year 2011 none other than those in respect of key management 
compensation which are disclosed in note 28 of the consolidated ﬁnancial statements on page 77
14 guarantees and other ﬁnancial commitments
the company has given guarantees amounting to £57 million 2011 £175 million in respect of bank and other facilities of 
subsidiaries and joint ventures
15 pension commitments
the group participates in a funded scheme with both a deﬁned beneﬁt and deﬁned contribution section the yule catto group 
retirement beneﬁt scheme the scheme’s deﬁned beneﬁt section was closed to new members with effect from 31 december 1998 
and with effect from 1 january 1999 a deﬁned contribution section was introduced and is open to all eligible group employees 
during 2009 the group announced that it intended to close the deﬁned beneﬁt scheme to future accrual this process commenced 
in 2009 and was completed in september 2010
the assets of the scheme are held separately from those of the companies concerned
the pension charge for the year for the company amounted to £194 million 2011 £141 million
in accordance with frs 17  the company will account for its contributions to the deﬁned beneﬁt scheme as if it were a deﬁned 
contribution scheme because it is not possible to identify the company’s share of the assets and liabilities in the scheme on a 
consistent and reasonable basis the latest actuarial valuation of the scheme prepared for the purposes of making transitional 
disclosure in accordance with frs 17 shows a net pension liability of £695 million at 31 december 2012 2011 £739 million
frs 17 disclosure
due to the application of ias19 to the group ﬁnancial statements resulting in changes to the required disclosures at group level 
the disclosure requirements of frs 17 for the group have been included below
the major assumptions used in the calculation of the frs 17 liability are
2012 2011 2010 2009 2008
rate of increase in salaries na na na 300 260
rate of increase in pensions in payment 300 300 325 300 250
rate of increase in pensions in deferment 200 200 225 300 250
discount rate 460 480 540 570 650
inﬂation assumption 300 325 325 300 260 88 synthomer plc annual report 2012
15 pension commitments continued
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at 
each balance sheet date were
2012

2012 
£m
2011

2011 
£m
2010

2010 
£m
2009

2009 
£m
2008

2008 
£m
equities 780 1192 660 1048 770 1104 800 1134 900 903 
bonds 460 808 480 694 540 608 570 543 670 476 
property 780 201 660 187 770 105 – – – – 
cash 100 119 080 53 200 120 200 38 425 04 
total fair value
of assets 2320 1982 1937 1715 1383 
present value of
scheme liabilities 3015 2721 2502 2415 2057
deﬁcit in 
the scheme 695 739 565 700 674
related deferred 
tax asset 71 – – – – 
net pension liability 624 739 565 700 674
contributions from the sponsoring companies are expected to be less than £50 million in 2013
analysis of the amount that would have been charged to operating proﬁt under frs 17
2012
£m
2011
£m
current service cost 05 07
05 07 
analysis of the amount that would have been charged to net ﬁnance income under frs 17
2012
£m
2011
£m
expected return on pension scheme assets 130 127
interest on pension scheme liabilities 131 132 
01 05 
analysis of the actuarial lossgain that would have been recognised in the statement of total recognised gains and losses
2012
£m
2011
£m
actual return less expected return on pension scheme assets 132 104
experience gains and losses arising on the scheme liabilities 276 191
144 295
history of experience gains and losses
2012 2011 2010 2009 2008
difference between the expected and 
actual return on scheme assets
amount £m 132 104 76 212 647
percentage of scheme assets  57 52 39123467
experience lossesgains on scheme liabilities
amount £m 276 191 65 328 253
percentage of the present value of scheme liabilities  92 70 26 136 123
total actuarial lossesgains recognised in 
the statement of total recognised gains and losses
amount £m 144 295 11116 394
percentage of the present value of scheme liabilities  48 108 0448 192
16 sharebased payments
for details of sharebased payments please refer to note 31 to the consolidated ﬁnancial statements on page 78
notes to the company ﬁnancial statements
continued 89 synthomer plc annual report 2012
other information
operating companies
country of
 incorporation
 and operation
group interest
 in equity

arkem pty ltd south africa 50

distributor of specialty chemicals and allied products
eka synthomer oy finland 50

styrenebutadiene latex products
quality polymer sdn bhd malaysia70
acrylic and vinyl polymer dispersions
revertex malaysia sdn bhd malaysia70
synthetic resin and emulsions natural rubber latices plasticers and allied products
synthomer bv netherlands 100
latex based compounds
synthomer pty ltd south africa 100
synthetic resin and emulsions and allied products
synthomer deutschland gmbh germany 100
synthetic rubber latices and emulsions
synthomer gmbh germany 100
synthetic rubber latices
synthomer uk ltd england 100
synthetic emulsions latex based compounds polyvinyl alcoholacetate and liquid polybutadiene
synthomer middle east company saudi arabia49

acrylic and vinyl resin emulsions
synthomer sae egypt 88
latex based compounds
synthomer sdn bhd malaysia100
synthetic rubber latices 
synthomer srl italy 100
synthetic rubber latices and acrylic polymer dispersions
synthomer vietnam co ltd vietnam 60
acrylic and vinyl emulsions
william blythe ltd england 100
inorganic chemicals
holding companies
synthomer holdings ltd england 100
yule catto holdings gmbh germany 100
yule catto nederland bv netherlands 100
 joint ventures
 shares held by synthomer plc
principal subsidiaries and joint ventures fiveyear ﬁnancial summary
underlying performance a f
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
total sales 11118 1 1 168 5829 4669 5272 
ebitda b 1274 1152 607 540 420 
operating proﬁt c 1090 964 504 438 364 
finance costs 109 116 78 98 105
proﬁt before taxation 981 848 426 340 259 
basic earnings per share 220p 188p 145p 113p 92p 
dividends per share 55p 35p 26p na 26p 
dividend cover 40 54 56 na 35 
net borrowings e 1558 1643 634 880 1355
capital expenditure d 392 242 106 87 170 
ifrs – continuing operations f
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
total sales 11118 1 1 168 5885 4781 5383 
ebitda b 1274 1152 607 540 420 
operating proﬁt c 749 544 594 459 373 
finance costs 126 149 52 143 19
proﬁt before taxation 623 395 542 316 354 
basic earnings per share f 167p 98p 207p 1 18p 129p 
dividends per share 55p 35p 26p na 26p
dividend cover 30 28 80 na 50 
net borrowings e 1415 1561 760 976 1614
capital expenditure d 392 242 106 87 170 
a as presented in the consolidated income statement on page 42
b as deﬁned in the accounting policies at note 2 and reconciled in note 33
c as deﬁned in note 2 to the ﬁnancial statements on page 51
d as shown with the consolidated cash ﬂow statement on page 45
e as deﬁned in note 2 to the ﬁnancial statements and reconciled in note 21
f 2008 to 2010 ﬁgures restated to exclude pharma chemicals
90 synthomer plc annual report 2012 notes
91 synthomer plc annual report 2012 92 synthomer plc annual report 2012 92 synthomer plc annual report 2012
notes printing and paper this report has been printed in the uk by the colourhouse
they are accredited with iso 14001 hold full fsc chain of custody they are also
carbon neutral all inks used are vegetablebased the paper used is heaven 42
which is fully recyclable and biodegradable and is an fsc mixed sources accredited
material using an elemental chlorine free ecf process and is partly bleached
using a totally chlorine free tcf process one of synthomer’s ‘litex p’ polymers
was used in the manufacture of this paper
if you have ﬁnished reading this report and no longer wish to retain it
please pass it on to other interested readers or recycle it thank you
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essex cm20 2bh
uk
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Summary:
 overview
01 synthomer plc annual report 2012
financial and commercial highlights







®


total sales
£1 1118m
proﬁt before taxation
£981m
earnings per share
220p
increase in proﬁt
before taxation
1 6
dividend per share
55p
change in dividend 
per share
57
underlying 
performance a proforma a ifrs
as reported
2012
£m
2011
£m
2012
£m
2011
£m
2012
£m
2011
£m
continuing operations
total sales 11118 1 1 168 11118 12688 11118 1 1 168 
ebitda note 33 1274 1152 1274 1322 1274 1152 
operating proﬁt 1090 964 1090 1097 749 544 
proﬁt before taxation 981 848 981 960 623 395 
earnings per share 220p 188p 167p 98p 
dividends per share note 10 55p 35p 55p 35p 
net borrowings b 1558 1643 1415 1561 
a  underlying performance excludes special items as shown on the consolidated income statement 2011 proforma includes the underlying 
performance of polymerlatex for q1 2011 with an estimated interest costs of £21 million
b see page 44