leadin g inn o v ati on  
 i n aq ueo u s p ol yme rs
synthomer plc annual report 2013
synthomer plc
temple fields 
harlow
essex cm20 2bh  
uk
t 44 01279 436 211
f 44 01279 444 025
wwwsynthomercom
synthomer plc annual report 2013
excellence
innovation
growth
17585 instinctif 6541synthomer annual report cover awtp ev3indd   46 20032014   1911 designed and produced by instinctif partners wwwinstinctifcom
photograph on page 3 courtesy of peter wirtzaktiv wirtschaftszeitung
photograph on page 11 courtesy of topi raulo
printed by park communications on fsc
®
 certiﬁed paper park is an emas certiﬁed 
company and its environmental management system is certiﬁed to iso 14001  
 100 of the inks used are vegetable oil based 95 of press chemicals are recycled 
for further use and on average 99 of any waste associated with this production will 
be recycled this document is printed on heaven 42 a paper containing 100 virgin 
ﬁbre sourced from wellmanaged responsible fsc
®
 certiﬁed some pulp used in this 
product is bleached using an elemental chlorine free ecf process and some 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
contents
overview 
01 financial and commercial highlights
02 chairman’s statement
strategic report
04 our strategy 
05 our business model 
06 our products
07 our market focus
08 our locations
 10 our people
 12 chief executive ofﬁcer’s report
 15 financial review
 18 principal risks and uncertainties
20  corporate social 
responsibility report 
governance
24 directors and advisers
25 corporate governance
32 directors’ remuneration report
49 report of the directors
51  statement of directors’ 
responsibilities
group ﬁnancial statements
52 independent auditor’s report
56 consolidated income statement
57  consolidated statement  
of comprehensive income
57  consolidated statement  
of changes in equity
58 consolidated balance sheet
58 analysis of net borrowings
59  consolidated cash ﬂow statement
59  reconciliation of net cash ﬂow 
from operating activities to 
movement in net borrowings
60  notes to the consolidated 
ﬁnancial statements 
company ﬁnancial statements
95 independent auditor’s report
97 balance sheet
98  notes to the ﬁnancial statements 
other information
105  principal subsidiaries and  
joint ventures
106 fiveyear ﬁnancial summary
innovation excellence growth
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 synthomer plc annual report 2013  01  
overview
£1336m
net debt
9
change in  
dividend per share
60p
dividend per share
£901m
proﬁt before taxation
£10549m
total sales
 
 
207p
earnings per share
financial highlights
underlying  
performance
a
ifrs
as reported
2013
£m
2012
restated
£m
2013
£m
2012
restated
£m
continuing operations
total sales
 b
10549 11118 10549 11118 
ebitda note 5 1240 1296 1240 1296 
operating proﬁt 1048 1112 750 771
proﬁt before taxation 901 946 591 588 
earnings per share 207p 209p 142p 156p
dividends per share note 10 60p 55p 60p 55p
net borrowings
 c
 1336 1558 1385 1415
a  underlying performance excludes special items as shown in the consolidated income statement  
this is primarily amortisation of acquired intangibles of £284 million 2012 £274 million
b  total sales includes group revenue and share of joint venture revenue
c  see page 58
 
commercial highlights
• £901 million underlying pbt
• new 70000 tonne nitrile latex 
capacity expansion completed  
in pasir gudang malaysia
• a number of successful product 
launches achieved during the year 
including sbrbiopolymer hybrids
• commissioned new dispersions 
capacity at stallingborough uk  
and closed batley uk facility
 based on underlying performance 02  synthomer plc annual report 2013  
dividend
the board has recommended an 
increased ﬁnal dividend of 36p per 
share making a total dividend for the 
year of 60p the full year dividend of 
60p represents an increase of 91 
over the previous year and a dividend 
cover of 35 times on track with  
the board’s commitment to reduce  
dividend cover to three times by 2015
safety health and environment
the group is 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 aqueous 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
i am delighted that brendan connolly 
joined the board as an independent 
nonexecutive director on 20 january 
2014 brendan was until june 2013 
a senior executive at intertek group plc 
and had previously been chief executive 
ofﬁcer of moody international which 
was acquired by intertek in 2011  
prior to intertek brendan spent more 
than 25 years of his career with 
schlumberger in senior international 
roles over three continents
outlook
whilst european macroeconomic 
indicators have started to show some 
more positive trends we still see limited 
evidence of a sustained improvement 
in trading conditions in europe we have 
seen some signs of modest demand 
improvement in our european 
construction  coatings functional 
polymers and performance polymers 
overview
the group experienced another 
challenging year in 2013 the economic 
environment in europe continued  
to impact our trading performance 
leading to a modest decline in  
earnings for the year while this is a 
disappointment after several years of 
continuous improvement the board 
believes the overall result demonstrates 
the group’s resilience in the context of 
the economic conditions the underlying 
performance reﬂects the beneﬁts of 
synthomer’s transition over the last 
5 years into a major player in specialty 
aqueous polymers
full year performance
underlying group sales declined  
51 to £10549 million 2012  
£1  1 11 8 million with group volumes 
slightly up despite a 25 decline 
in europe due to the effect of the 
challenging trading environment 
underlying group operating proﬁt for  
the year was £1048 million 2012 
£1112 million a 58 decline on 2012 
this was due principally to operating 
proﬁt in our european  north american 
ena business being 10 down on the 
prior year at £898 million where for the 
ﬁrst time in 6 years we saw our average 
cash margins decline encouragingly 
asia and row business arw proﬁts 
rose by 21 to £231 million as the 
market conditions we experienced in 
our nitrile business in 2012 recovered 
ahead of our initial expectations
underlying group proﬁt before tax  
was £901 million 2012 £946 million 
a decline of 48 whilst earnings  
per share at 207p 2012 209p  
was down by 10 after deducting 
special items ifrs proﬁt before tax  
was £591 million 2012 £588 million
strategy
our strategy remains unchanged 
focusing on delivering growth through 
geographic expansion in emerging 
markets where megatrends such  
as population growth urbanisation  
and increasing wealth are driving 
demand for our products across the 
region in these highgrowth regions  
we are able to leverage the leading 
technologies rd and manufacturing 
capabilities which we have developed 
in european markets to give us a strong 
competitive advantage we have worked 
hard to optimise our business in europe 
since the polymerlatex acquisition  
and ongoing cost management remains 
a key focus of the group particularly  
in the current economic environment
given the economic situation in europe 
we are taking some selfhelp actions in 
our european business we have set in 
progress a programme to reduce costs 
by ¤10 million this programme will have 
a cash cost of some ¤15 million of which 
¤5 million will be capital expenditure
despite the weaker trading conditions 
in europe our business remains  
highly cash generative allowing us to 
continue to invest in emerging market 
opportunities during the year we 
commissioned our new 70000 tonne 
nitrile latex capacity expansion in pasir 
gudang malaysia and also established 
sbr manufacturing capability on the 
site we expanded our middle east 
facilities and will further expand them 
during 2014 along with bringing new 
capacity in vietnam on stream 
additionally we continue to look  
for further investment opportunities  
to expand our footprint in asia
balance sheet
net debt at £1336 million was 
£222 million lower than the start  
of the year this represents a net 
borrowing to ebitda ratio of 11  
which the board considers to be 
a prudent leverage position
chairman’s statement overview
synthomer plc annual report 2013  03  
segments in recent months however 
we have entered 2014 with unit cash 
margins across the ena business slightly 
below the 2013 average and weakening 
of the euro through the second half of 
2013 will create a yearonyear drag
we expect some further improvement 
in asia as the supply demand position 
in nitrile tightens and synthomer 
continues to beneﬁt from additional 
capacity and investment
the board remains conﬁdent that 
synthomer is well placed for the future 
despite the european trading conditions
neil johnson
chairman
27 february 2014
“ our strategy remains unchanged focusing on delivering 
growth through geographic expansion in emerging markets 
we are able to leverage the leading technologies rd and 
manufacturing capabilities which we have developed 
in european markets to give us a strong competitive 
advantage”
 neil johnson 
 chairman 04  synthomer plc annual report 2013  
our strategy – how we create value
investing in knowledge  
and innovation
•  drive growth and efﬁciency through new 
products and processes
•  expand product development pipeline
•  develop ‘environmentally sustainable’ 
products and processes
actions in 2013
•  production of environmentally friendly paper latex grade 
and extension into other applications under development
• further new nitrile latex grades launched and 
in development
•  product launches in emerging markets such as chopped 
strand glass ﬁbre mats polyester composites
• increasing rate of patent ﬁlings
strong market positions
•  demonstrates technical and commercial 
strength
•  high customer intimacy and knowledge  
of their processes
•  aligns synthomer and market needs
•  underpinned by supply chain excellence
positions in 2013
•  no1 sbr latex producer in europe
•  no 2 aqueous polymer producer in europe
•  no1 global nitrile latex producer
•  no1 dispersions producer in malaysia
• no1 dispersions producer saudi arabia
leverage european capability 
to drive emerging market growth
•  centres of ‘excellence’ in europe in innovation 
supply chain and systems to provide a strong 
base to grow the rest of the business
•  reinvest european ‘knowhow’ market proﬁle 
and cash ﬂow to drive overall growth rate
•  extend emerging market footprint product 
range and capacity
actions in 2013
•  additional 70000 tonnes of latex capacity available  
in malaysia
•  multiple dispersion product launches across  
emerging markets 
•  completed ﬁrst phase expansion of capacity increase  
in middle east and initiated the second phase to  
provide 100000 tonnes of capacity in 2014
excellence
growth
innovation synthomer plc annual report 2013  05  
strategic report
innovation and knowledge
•  sell a unique formulation not a chemical
• highly experienced and expert personnel
•  customer intimacy collaboration and alignment  
driving innovation
•  manufacturing process intellectual property
•  fast and commercially focused rd capabilities
growth
•  high exposure to global megatrends
• formulations in applications all around us
•  over 4000 customers across the world
•  broad product range
•  european engine room and centre of excellence 
generating cash for investment and growth in  
emerging markets
•  emerging market exposure 37 of 2013 sales
•  expand global footprint to further leverage group 
capability and technology
•  local production sites high water content of aqueous 
polymers excludes ‘out of region’ competitors
excellence
•  highly cost effective ﬂexible production capabilities
• world class people
•  flexible logistics operations
• commercial model
our business model 06  synthomer plc annual report 2013  
a
b
c
d
a latex – 49
b specialties – 24
c dispersions – 22
d compounds – 5
synthetic latex
consists of three principal product 
families styrene butadiene latex  
sbr manufactured in germany and 
italy nitrile butadiene latex nbr 
manufactured in italy and malaysia  
and high solids styrene butadiene 
latex 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
our products
 no1
nbr latex 
producer globally
sales by product
no1
high solids sbr  
latex producer 
globally
a nbr – 34
b sbr – 66
 no1
sbr latex 
producer in europe
a
b
excellence
growth
innovation synthomer plc annual report 2013  07  
strategic report
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
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  
waterbased ﬁllers
our market focus
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 western europe – 54
b eastern europe – 5
c north america – 4
d asia – 28
e africa  middle east – 8
f rest of world – 1
37
of total sales to 
emerging markets
no1
acrylic and vinylic  
dispersion producer  
in the middle east
no1
pvoh for pvc 
global producer
a
b
c
d
e
f
a
b
c
d
e
f 08  synthomer plc annual report 2013  
our locations – global focus
19
rest of world
key  manufacturing site  sales ofﬁce  rd centre  head ofﬁce
 several sites have more than one manufacturing plant
locations
china 01 shanghai synthomer chemical co ltd  
guangzhou  shanghai 
egypt 02 synthomer sae 10th of ramadan city 
england 03
03
04
05
06
synthomer uk ltd harlow
synthomer plc harlow
synthomer uk ltd ossett
synthomer uk ltd stallingborough
william blythe ltd accrington
   
 
finland 07 eka synthomer oy oulu 
germany 08
09
10
synthomer gmbh langelsheim
synthomer deutschland gmbh marl 
synthomer deutschland gmbh worms
  
italy 11 synthomer srl filago 
malaysia 12 
13
 revertex malaysia sdn bhd  
synthomer sdn bhd kluang  kuala lumpur
synthomer sdn bhd  
quality polymer sdn bhd pasir gudang
  
netherlands 14
15
synthomer bv hasselt
synthomer bv oss 
saudi arabia 16 synthomer middle east company dammam 
south africa 17 synthomer pty ltd durban  
uae 18 synthomer fze dubai
usa 19 synthomer llc atlanta
vietnam 20 synthomer vietnam co ltd ho chi minh city
europe
06
05
09
08
14
15
10
11
03
04
63
europe  north 
america sales
15 manufacturing plants 
2 rd centres synthomer plc annual report 2013  09  
strategic report
our manufacturing plants in europe are well located to supply our 
customers with a strong presence in germany the industrial heartland 
of europe in asia we have manufacturing in malaysia and vietnam and 
growing sales and technical services activities in china and we also 
have long established positions in the middle east and south africa
37
asia  rest of world sales
8 manufacturing plants  
 1 rd centre
20
12
01
17
02
16
18
07
13
 sales by destination 10  synthomer plc annual report 2013  
diversity
total male female
board 8 80
senior management 21 18 3
employees 2097 1707 390
our people
at synthomer we are continually 
working to develop our position as  
a key industrial partner as we drive  
for operational excellence our staff  
are fundamental to the success of  
our strategic objectives and are at  
the forefront of striving for excellence 
and innovation across all areas of our 
business the rd facilities in harlow 
uk marl germany and kluang 
malaysia together with local specialist 
teams for technical sales and marketing 
continue to develop new products 
which help synthomer’s customers 
separate themselves from their 
competitors we also have a signiﬁcant 
proportion of employees located in our 
numerous operations in emerging 
markets where they can best serve 
customers requirements
 43
employees 
in emerging  
markets
 2 09 7
total group  
employees
customers requirements customers requirements
 2 09 7 2 09 7
total group  
employees
235
employees working  
in innovation synthomer plc annual report 2013  11  
strategic report
developing greener products
the trend to make products more 
sustainable by using renewable raw 
materials is irreversible and applies to 
almost all industrial markets no matter 
how mature they are synthomer has 
developed a new range of sbrbiopolymer 
hybrids that not only provide improved 
environmental aspects but also give the 
opportunity of optimising the cost
performance balance in the use of the 
emulsion products the technology is 
applicable to a wide range of application 
areas and working with suppliers of bio
polymers and our customers we have 
an active rd programme looking at 
the commercial exploitation of the 
new materials
during 2013 the ﬁrst two new products 
using this technology have been launched 
for use in the paper market the grades in 
the litex px range have been developed 
as precoat and top coat binder systems 
for coated paper and board applications 
these products demonstrate excellent 
stability and runnability on high speed paper 
coating lines whilst maintaining print 
performance of the ﬁnal paper
investment in our oulu finland facility 
has been completed to allow the consistent 
and efﬁcient production of the biopolymer 
hybrids with full production starting in 
october 2013 the second phase of 
investment is now underway in our marl 
germany facility to allow the transfer of 
technology for the production of the  
emulsions in the second half of 2014  
for both the paper market and other 
applications segments 
innovation
excellence
growth
innovation 12  synthomer plc annual report 2013  
divisional performance
we manage the group as two 
businesses ‘europe  north america’ 
ena and ‘asia  rest of world’  
arw the reported results are on  
an ‘origination basis’ meaning the 
business sales and operating proﬁts are 
reported based on where the product is 
manufactured ena accounted for 71 
of group sales and arw for 29 of 
group sales we export many specialty 
products from europe to asia looking 
at sales on a destination basis ena 
comprises 63 of group sales with 
arw accounting for 37 within the 
two businesses we approach the 
market through six strategic business 
unit segments “paper”  “carpet 
compounds and foam” ccf 
“construction and coatings” cc 
“functional polymers” fp 
“performance polymers” pp and 
“health and protection” hp – which 
includes our asian nitrile latex business
europe  north america ena
operating proﬁt in our ena business 
was down by 104 with aggregate 
volumes 25 lower
the economic situation in europe 
continued to impact demand 
particularly in our construction related 
segments which was most pronounced 
early in the year when poor weather 
resulted in soft demand in what is 
normally a seasonally strong period  
we have also seen a reduction in 
average unit cash margins
this margin impact has been most 
pronounced in our paper and ccf 
segments whilst declines in cc 
pp and fp were very modest
volumes for the year were lower across 
the construction related segments  
of cc pp  fp and ccf  despite the 
overall decline in the european paper 
market we saw some volume 
improvement in our paper segment 
increasing our share overall albeit  
on generally lower unit cash margins
overview
2013 was a challenging year for the 
group with underlying group operating 
proﬁt of £1048 million 58 below 
prior year
the general economic situation in 
europe with lower demand led to 
a lower ena operating proﬁt as we 
entered 2014 the operating environment  
in europe remained challenging 
encouragingly we saw recovery  
in our asian nitrile business come 
through ahead of our expectations  
in 2013 and overall operating proﬁt  
in asia and row was ahead
net of interest and a reduced tax rate 
earnings were down slightly on 2012
this was the ﬁrst year that underlying 
earnings have declined since 2006 
when we started the process of 
transforming the company into a 
focused specialty aqueous polymers 
business whilst this was disappointing 
we continued to make good overall 
progress during the year in improving 
the capability of the business to deliver 
future growth and maintain a tight 
control on costs 
the acquisition of polymerlatex three 
years ago was an important part of  
the transformation of the group into  
a focused specialty aqueous polymer 
group we have now effectively 
completed the work on delivering  
the integration synergies from the 
acquisition with the closure of the  
batley site in the uk
during the year we further strengthened 
the group’s executive management 
team with the recruitment of new 
regional vp’s for both asia and europe
i believe we are well placed for the 
future focused on aqueous polymers 
with 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
we saw clear evidence that our rate of 
innovation is improving with a number 
of patent ﬁlings during the year the new 
product launches from 2012 including 
new lithene
®
 ultra grew well during 
2013 we also launched two new nitrile 
grades during the year looking forward 
the quality of our innovation pipeline  
is encouraging and we believe we  
are well set for future growth we expect 
several new product launches during 
the coming year across our business 
including new products in nitrile latex
new products launched in the last 
5 years contributed over 12 of 2013 
group revenues we are conﬁdent of 
being able to improve this percentage 
and have a midterm target of sales 
from new products deﬁned as products 
launched in the preceding 5 years 
increasing to a level where they contribute 
20 of annual group revenues
on the investment front we 
commissioned two new nitrile latex  
lines in malaysia at the beginning of 
2013 our dispersion expansion in 
stallingborough to allow the closure  
of batley was completed in paper  
we completed the investment in 
biopolymer hybrid latex in finland  
and commenced investment in 
germany for the same and similar 
products we continued to invest  
in many smaller projects to improve  
the overall capability of our plants  
to drive our commercial and cost 
effectiveness in servicing our customer 
base we will be expanding our 
vietnamese and saudi arabian 
dispersions capacity during 2014 and 
are currently developing plans to further 
expand our nitrile latex capacity in asia
raw material price volatility was 
relatively low during the year compared 
to recent years albeit with a modest 
decline over the year this modest 
decline in input prices has lowered 
working capital requirements slightly  
and helped in the reduction of net debt 
to £1336 million
 
chief executive ofﬁcer’s report synthomer plc annual report 2013  13  
strategic report
“ we are well placed for the future focused on aqueous 
polymers with 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”
adrian whitﬁeld
chief executive ofﬁcer
a further 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 we have launched 
a new product range for chopped 
strand glass ﬁbre mat applications 
where our knowledge of textile binders 
has been effectively used in a new 
application area our new nitrile grade 
for examination gloves was launched to 
the market which offered a signiﬁcant 
improvement in ﬁlm strength to support 
the market trend of lower glove weights 
this was combined with a versatile 
performance on the glove dipping line 
giving our customers process and 
formulation ﬂexibility market acceptance 
was extremely positive and by the end 
of the year the new grade was the 
biggest selling product in the synthomer 
range further development work to 
extend the product line is ongoing 
adrian whitﬁeld
chief executive ofﬁcer
27 february 2014
after reporting ena volumes down 
51 in the ﬁrst half of the year demand 
generally remained soft in the second 
half of the year as the difﬁcult economic 
conditions in europe continued to affect 
performance overall volumes in the 
second half of the year were similar 
to prior year with the volume declines 
in the construction related segments 
predominantly occurring in the ﬁrst half 
of the year
there were multiple product launches 
in ena during the year two new 
biopolymer hybrid products were 
launched to the coated paper market 
based on our new technology platform 
to optimise performance and cost 
a new lithene
®
 ultra grade was 
introduced to the market in a niche 
encapsulation area which was enabled 
by our improved low voc capability 
market introductions for highsolids 
sbr have been made for the us asphalt 
market and for foam applications that 
meet the speciﬁc demands in china 
a number of other products are in the 
initial commercialisation phase for 
example in wood coatings pressure 
sensitive adhesives and ﬂooring 
adhesive segments where we expect 
to see full market launch next year
ena is our platform for cash generation 
to drive future global growth we have 
worked hard since the polymerlatex 
acquisition to create an optimised 
business in europe with the closure 
of three plants and the delivery of 
substantial cost reductions which have 
positioned us well to deal with the 
economic situation however ongoing 
cost management remains a key focus  
of the group and we have launched  
a programme comprising a broad range 
of further improvements which will help 
support performance during 2014 and 
2015 the programme will reduce costs 
in the business by ¤10 million per 
annum by the end of 2015 critical 
elements in delivering this will be 
increased process and energy efﬁciency 
productivity improvements and 
optimised systems across all functions 
we anticipate cash cost of circa 
¤15 million for the implementation of 
this programme of which ¤5 million 
will be capex
asia  rest of world arw 
operating proﬁt in our arw segment was 
higher by 209 on 82 higher volumes
since we reported on the turbulence in 
the nitrile market half way through 2012 
the business having stabilised in the 
second half of 2012 developed ahead 
of our expectations during 2013 we 
expect to see supply demand tighten 
during 2014 with a further improvement 
in proﬁtability
the nonnitrile business has seen  
good demand as we exited the year 
we experienced a slight deterioration  
in the competitive environment in 
southeast asia as a competitor 
prepared to bring new dispersion 
capacity in malaysia on line to service 
the region
overall we continue to see good 
prospects for the nonnitrile business 
in asia expansion in the region is a core 
part of our strategy and we will bring  
on further capacity in middle east and 
vietnam in 2014 we also continue to 
pursue opportunities for growth in the 
region through acquisition
europe  north america ena asia  rest of world arw
underlying – as reported
sales £m
2012
2013 7448
7969
underlying – as reported
sales £m
2012
2013 3101
3149
operating profit £m
2012
2013 898
1002
volumes ktes
2012
2013 8055
8259
operating profit £m
2012
2013 231
191
volumes ktes
2012
2013 3762
3477
  underlying performance excludes special items as shown on the consolidated income statement 14  synthomer plc annual report 2013  
operating efﬁciently
synthomer was one of the ﬁrst companies to 
sign the uk chemical industries association’s 
sustainable development principles as part 
of this commitment we strive to improve our 
environmental performance year on year
to help the company achieve this objective 
a comprehensive performance monitoring 
structure has been in place for over 10 years 
and resulted in a steady improvement of  
our environmental performance to continue 
this trend and reduce speciﬁc energy 
consumption consumption per ton 
synthomer has begun implementing 
a comprehensive energy management 
system ems
since 2011 synthomer has undertaken 
a scheme to establish ems to meet  
the iso50001 standard at a number  
of its european sites as a result our 
site in langelsheim germany acquired 
the iso50001 accreditation in 2012  
this success has led the way for our three 
production sites labs and ofﬁces in marl  
to work towards achieving the standard
the marl site began work on achieving  
the iso50001 accreditation in 2012 
implementing a number of projects designed 
to improve efﬁciency one of the key projects 
involved the installation and optimisation  
of a new stripper for the puriﬁcation of sbr 
latex as a key part of the energy savings 
the new stripping process is much more 
efﬁcient and allows signiﬁcant savings in 
steam and electrical energy eg to run 
pumps the steam consumption of the  
plant using the new stripper has reduced  
by over 23 this has resulted in annual 
savings of 16000 mwh enough energy to 
heat 800 terraced houses for an entire year 
this initiative is one of many which focus  
on improving operational efﬁciency and have 
a positive impact on synthomer’s operational 
and ﬁnancial performance
excellence
800
a new stripping process 
results in energy savings 
equivalent to the  
annual consumption  
of 800 houses
excellence
growth
innovation synthomer plc annual report 2013  15  
strategic report
income statement
sales operating proﬁt and proﬁt before tax – 
underlying performance
total sales decreased by 51 to £10549 million 2012 
£11118 million with group operating proﬁt also 58 lower 
at £1048 million 2012 £1112 million this was due to the 
difﬁcult trading conditions that persisted in europe throughout 
the year as a result proﬁt before tax also declined by 48 
to £901 million
tax and eps – underlying performance
the group’ s underlying tax rate of 20 2012 22 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  
2012 £18 million
as a result overall the underlying earnings per share for 2013 
was 207p compared to 209p per share for 2012 a slight 
decrease of 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 £14 million 
2012 £67 million of which £60 million were cash costs 
and £07 million noncash costs these are the ﬁnal costs 
associated with the integration programme
• various crosscurrency and interest rate swaps for hedging 
purposes which involve maturities of up to three years 
ifrs requires that where the strict requirements of ias 39 
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 £12 million 2012 loss £17 million is segregated from 
the underlying performance
• amortisation of intangibles of £284 million comprising 
£267 million in the company and subsidiaries and 
£17 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 until  
the associated intangible assets are fully amortised
after deducting special items from underlying performance the 
ifrs proﬁt before tax was £591 million 2012 £588 million 
and earnings per share were 142p 2012 156p
restatement for adopting ias 19 revised
the group adopted ias 19 revised from 1 january 2013 and 
has applied this retrospectively to comparator periods the 
effect of adoption on the group’s proﬁt in 2012 was to reduce 
both underlying and total reported proﬁt after tax in 2012 by 
£35 million in addition £22 million of expenses relating to 
the expected return on plan assets and interest expense on 
the pension liability previously reported within operating 
expenses have been classiﬁed to ﬁnance costs in 2012 
dividend
the board has proposed an increased ﬁnal dividend of  
36p which with the interim dividend of 24p brings the total 
dividend for the year to 60p per share this is 35 times 
covered 2012 38 times and in line with the board’s 
commitment to reduce the dividend cover to three times 
by 2015
balance sheet
goodwill increased to £2411 million at the end of 2013  
from £2409 million at the end of 2012 due to foreign 
currency translation
acquired intangible assets which arose as a result of the 
polymerlatex acquisition decreased to £1095 million at 
31 december 2013 from £1356 million in the prior year  
this movement reﬂects regular annual amortisation of 
£267 million reported in special items and currency translation
property plant and equipment increased to £2031 million 
at 31 december 2013 compared to £1996 million at 
31 december 2012 additions during the year comprised 
£349 million of capital expenditure
the net deferred tax liability has decreased to £438 million 
from £509 million during the year 
assets held for sale relate to approximately 1600 acres of 
agricultural land in malaysia which is currently used to operate 
a palm oil and natural rubber plantation during the year the 
board decided to dispose of this land and to cease the 
plantation operations land value at a cost of £11 million 
relating to 1600 acres is included in assets held for sale as  
at 31 december 2013 as at 31 december 2013 the 70 
owned malaysian subsidiary revertex malaysia sdn bhd  
had through its wholly owned subsidiary kind action sdn bhd 
exchanged conditional contracts with 6 purchasers for the 
sale of approximately 700 acres of plantation land for a price 
of approximately £27 million
financial review 16  synthomer plc annual report 2013  
completion of the sales is conditional on obtaining approval 
from the malaysian estate land board and other local 
approvals as the land is being sold for redevelopment 
it is anticipated that it will take up to 2 years for the 
approvals to be obtained we are actively continuing 
to seek purchasers for the remaining 900 acres
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 2013 with a total return on assets 
excluding cash of 124 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 £8 million which was a prepayment of 2014 
contributions the overall effect of these changes was that 
there was a decrease in the deﬁcit of the scheme which 
stood at £603 million at the end of 2013 2012 £695 million 
due to the prepayment cash contributions in 2014 are 
expected to be of the order of £8 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 £526 million 
2012 £502 million 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
2013
audited
£m
2012
audited
£m
underlying operating proﬁt  
 before joint ventures 999 1063
movement in working capital 58 13
depreciation and amortisation  
 underlying 192 184
capital expenditure net 350 381
interest paid net 93 113
tax paid 174 188
pension funding in excess  
 of ias 19 charge 87 195
minority interest and joint venture  
 cash ﬂows 38 32
free cash ﬂow 583 389
cash impact of restructuring 38 114
acquisition costs – 04
dividends paid 194 153
exchangeother 129 33
movement in underlying borrowings 222 85
closing underlying net borrowings 1336 1558
2013
audited
£m
2012
audited
£m
ebitda – management
operating proﬁt  inc joint venture’s 1048 1112
depreciation – continuing 192 184
total management ebitda 1240 1296
underlying net borrowings reduced during the year  
to £1336 million
group management ebitda decreased slightly to 
£1240 million reﬂecting the lower operating proﬁt 
net capital expenditure decreased in 2013 to £350 million 
net gross expenditure of £391 million was reduced by 
proceeds received from the sale of a plot of land in italy 
remaining from the pharma business
pension funding in excess of ias 19 charge of £87 million 
includes the £8 million prepayment to the uk pension fund
underlying working capital inﬂow for the year was £58 million 
and was favourably affected by generally lower input costs 
from raw materials
financing and liquidity 
as at the end of 2013 the group had the following drawn 
term funding in place
£m
euro denominated bank loan maturing march 2015 1485
us private placements 557
less associated currency hedges and costs 58
total 1984
this compares to a net borrowing position of £1336 million 
the group had an undrawn £60 million revolving loan facility 
maturing march 2015 and a net cash position cash and  
cash equivalents less shortterm overdrafts of £59 million
of the total us private placements £424 million 70 million 
is repayable on 2 september 2014 and is classiﬁed as 
repayable within one year the remaining £133 million 
22 million is due for repayment on 2 september 2016
 
underlying net borrowings to ebitda the group’s key 
leverage metric was 1  1 at the end of 2013 2012 12
david blackwood
chief financial ofﬁcer
27 february 2014
financial review 
continued
  2012 includes the release of collateral held against a guarantee that  
was treated as a working capital outﬂow in 2011 exchangeother includes 
£62 million paid in settlement of longterm incentive schemes 
2012 £68 million synthomer plc annual report 2013  17  
strategic report
emerging market growth
synthomer has a long history of working with 
our customers to develop new products and 
dedicated formulations that meet the ever 
changing needs of the market
utilising a combination of our vinyl acetate 
emulsion polymerisation technology and 
extensive experience in textile binding 
applications we commissioned project 
‘dreamliner’ a new product line for chopped 
strand glass ﬁbre mats csm
the technology behind project ‘dreamliner’ 
gave birth to our new emultex 9500 series  
of waterborne plasticised vinyl acetate 
products that are used for the bonding of 
csm these products are designed to provide 
good mouldability and clarity in the processing 
stage whilst offering a low odour and 
yellowing effect on the ﬁnished product 
the emultex 9500 series have a number of 
key uses in the boat automotive components 
windmills and water tank markets 
designed as a modular system the new 
emultex series allows customisation to adjust 
the handle of the material from soft to hard 
and gives a wide range of formulating options 
the initial range has been put into production 
at our dammam site in saudi arabia and 
commercial supply has commenced to 
selected customers in the region and further 
target markets in india and china have 
been approached 
the emultex 9500 product line will be 
supported through the expansion of our 
dammam site which will provide the 
opportunity to develop speciality dispersion 
products for manufacture in reactors 
previously used in producing high volume 
binders for the coatings market these 
binders will now be produced by a new 
reactor on the site which will bring total 
dammam production capacity up to  
 100000 tons
growth
100000 tons
dammam capacity 
increased to  
100000 tons
excellence
growth
innovation 18  synthomer plc annual report 2013  
strategic risks strategy for mitigation
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 the group
the group maintains a balanced portfolio of products 
serving a wide range of end markets around the globe 
business performance at geographical level and 
business unit is closely monitored and corrective  
actions are taken as necessary
the markets in which the group operates are  
highly competitive and the group may lose market 
share to other producers of waterbased polymers 
or to other products that can be substituted for the 
products of the group
the group continues to invest in existing and new 
products and technologies through rd the group 
continues to invest in new facilities to allow the group  
to maintain its key market positions as part of the 
group’s strategic planning process it identiﬁes and 
converts acquisition targets to enhance market 
positions and provide new technologies
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 continues to invest in existing and new 
products and technologies through rd as part  
of the group’s strategic planning process it identiﬁes 
and converts acquisition targets to enhance market 
positions and provide new technologies 
the failure of the group to procure key raw materials 
may lead to production interruptions and volatility in 
the prices of such raw materials and energy prices 
may adversely affect the proﬁtability of the group  
and its working capital position
sourcing strategies are in place groupwide to access 
multiple sources for key raw materials and the group 
works closely with key suppliers to ensure availability 
the group looks to identify alternative raw materials 
where possible
the group actively manages margins and recovers 
input cost increases from customers where possible
operational risks
the group may be liable for damages based on 
product liability claims brought against its customers  
in enduse markets
technically qualiﬁed personnel and control systems 
are in place around the group to ensure products 
meet quality requirements all sites operate quality 
management systems
the group has a groupwide product liability 
insurance which provides £50 million of cover
principal risks and uncertainties synthomer plc annual report 2013  19  
strategic report
operational risks continued strategy for mitigation
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
detailed safety health and environmental she
processes are documented in operating guidance 
which is updated and communicated to staff on 
a regular basis 
robust maintenance programmes are undertaken  
in order to ensure that our facilities meet up to group 
and local legal requirements
the group operates a central internal audit function 
dedicated to she issues and programmes for 
continuous improvement across all major she areas 
are in place groupwide
the ongoing success of the group is dependent  
on attracting and retaining high quality senior 
management and staff who can effectively manage  
the group’s operations
the group offers competitive compensation  
packages with annual bonus and longterm incentive 
arrangements for key employees appropriate notice 
periods and noncompete clauses are used to mitigate 
shortterm risk for key employees the group is also 
developing a succession plan for key positions
financial risks
as a signiﬁcant proportion of the group’s turnover  
and assets are in currencies other than pounds  
sterling 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
the group has a policy of hedging all signiﬁcant 
foreign exchange transactional exposure at operating 
company level and also hold debt facilities in key 
currencies to offset ﬂuctuations in overseas 
asset values
the group’s balance sheet and cash ﬂow or 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
the group closely monitors cash ﬂow and working 
capital performance on a monthly basis and regularly 
reviews covenant compliance the group has a policy 
on leverage limits and has adequate headroom on 
a twelve month forecast basis through a range of 
facilities with varying expiry dates interest rate risk 
is managed through the use of interest rate hedging 
as required
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 
effect on the group
the uk scheme was closed to future accrual during 
2009 the risks are mitigated by paying appropriate 
contributions into the funds and through balanced 
investment strategies which are designed to avoid  
a material impact to the fund assets 20  synthomer plc annual report 2013  
commitment to safety health and  
environmental she performance
the board and the group executive committee are fully 
committed to improving she performance and to the 
involvement of staff at all sites and at all levels in our she 
programmes she performance is always a primary duty  
for management at all levels in the group and all are aligned  
to our three longterm goals which are
1  to minimise any environmental burden created by 
our activities
2  to have no accidents or incidents and
3  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
the group adopts the following she management practices 
with the aim of continuously improving she performance
• 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 group accident and incident management system 
aims is used to collect and analyse data on all accidents 
incidents and “near misses” on our sites 
• sites implement the group’s she management system 
shems or implement an equivalent system which works 
to the same or higher standards 
• sites provide training for staff to ensure that they 
understand group and site systems both in she and 
more generally 
• 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 
• key leading performance indicators covering items such 
as inspections and engineering performance are collected 
and reported to senior management to assess both 
equipment and management performance 
• 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
for more information relating to the group’s activities  
in relation to corporate social responsibility please see 
wwwsynthomercom
health safety and accident performance
lost time accidents
during the year the number of all lost time accidents ltas 
accidents involving one or more complete days away from 
work fell by a third to a new low for the group this excellent 
performance was exempliﬁed by eka synthomer in finland 
who have now achieved 12 years without a lost time accident
 
107
097
071
067
053
043
040
048
061
038
12
10
08
06
04
02
00
actual rate lost time accidents
026
13
accidents per 100000 
hours worked
03 04 07 09 11 12 06 05 08 10
the group’s performance on ‘over 3day’ accidents was  
the same as it was in 2012 with 12 such accidents and 
a consequent frequency rate of 023 per 100000 hours 
worked in common with many other chemical companies 
we have started to collect data on a wider range of accidents 
essentially all those involving more than ﬁrst aid treatment  
our frequency rate for this type of accident is similar to 
or better than those reported by similar chemical companies 
and shows a falling trend
 
099
095
073
057
057
043
054
034
024
036
025
043
023
10
08
06
04
02
00
actual rate 3 day lost time accident frequency rates
023
accidents per 100000 
hours worked
13 12 11 10 00 01 04 06 08 09 03 02 05 07
environmental performance
since 2000 we have reported signiﬁcant reductions year 
onyear in our global warming burden emissions per tonne 
reduced by a third between 2000 and 2006 and calculated 
on the same basis have reduced by a further 25 since then 
with the introduction of mandatory greenhouse gas ghg 
reporting we have reexamined the calculation our emissions 
to comply with the most recent guidance which should give 
a better reﬂection of the actual effects of the company’s 
corporate social responsibility report synthomer plc annual report 2013  21  
strategic report
operations we have also identiﬁed previously unreported 
releases of refrigerant gases which though small in volume 
have a large global warming impact these changes have 
the effect of increasing our reported releases so it is good 
to report that 2012 and 2013 have seen the lowest global 
warming burden per tonne of production in the group’s 
history even on the new basis releases have reduced by 
well over 40 since 2000
energy
overall speciﬁc energy consumption across the synthomer 
group fell by 18 compared with 2012 and was 51  
lower than in 2011 the longterm trend shows the group 
used less than half the energy per tonne that was used in 
2001 consumption in 2013 was 39 better than the 
extrapolated 2013 target calculated using 2000 as the base 
line and applying the chemical industry association cias 
sustainable development sd targets which the group 
signed up to in 2005 
 
60
50
40
30
20
10
00
10 year target
actual
energy consumption
408 413
419
424 429
450
445
439
434 476
gigajoules used 
per prodution tonne
476
471
466
455
557
509
452
452
412
452
391
364
283
294
333
263
254 250
13 12 11 10 00 01 04 06 08 09 03 02 05 07
water use
synthomer group companies used nearly 300000 m
3
 less 
water in 2013 than in 2012 and reduced their water usage  
by 83 on a per production tonne basis this excellent 
performance more than reversed the slight increase seen in 
2012 and means that water consumption per tonne of the 
group is less than half of the ﬁgure seen as recently as 2005 
and roundly a third of what it was in 2000 
 
950
780
712
584
600
665
582
562
473
558
460
338 347
318
703 722
741
931
912
893
874
855
836
817
798 779
760
950 100
80
60
40
20
00
target – base 2000
actual
water consumption
m
3
 per production tonne
13 12 11 10 00 01 04 06 08 09 03 02 05 07
waste disposal
hazardous waste sent to landﬁll reduced by almost 50  
in 2013 compared to 2012 the quantity of waste going to 
landﬁll per tonne of production is less than 10 of the amount 
sent in 2000 and less than 30 of that sent as recently 
as 2011
 
0012
0010
0008
0006
0004
0002
0000
10 year target
actual
hazardous waste disposed to land
00064
00064
00068
00070
00080
00079
00077
00074
00072
00090
tonnes waste per prodution tonne
00090
00088
00086
00083
00081
00120 00120
00090
00060
00055
00030
00025
00011
00017
00014
00024
00013
00007
13 12 11 10 00 01 04 06 08 09 03 02 05 07
greenhouse gas emissions
the company has reported environmental kpis in the format 
recommended by defra which since 2008 have included 
greenhouse gas ghg emissions the overall format for 
quantitative data has been retained and includes defra’s 
other recommended kpis reporting trends on a 3year rolling 
basis it has been revised to comply with defra’s 2013 
guidance internal data collection has also been revised for 
ﬁnancial year 2013 to give improved compliance with the 
revised guidance
reporting parameters
the 2013 ﬁnancial year reporting includes all manufacturing 
operations but does not cover all ofﬁce locations where these 
are not colocated with manufacturing these locations will 
have no material effect on the group’s overall ghg emissions 
being estimated at less than 01 of the group total
all known emissions from manufacturing process have been 
included including energy directly used and the indirect energy 
costs of heating cooling and other site services where these 
are provided by a third party they include estimates for the 
effects of the release of volatile organic compounds vocs 
and refrigerant gases the only known emissions which have 
not been included are direct emissions of co
2
 from onsite 
waste treatment this has not currently been quantiﬁed
the group have no known uses or releases of perﬂuorocarbons 
or sulphur hexaﬂuoride all releases of nitrous oxide or 
methane are associated with energy production and are not 
separately quantiﬁed
the group continues to report scope 1  2 emissions
no estimate has been made of scope 3 emissions
the group continues to use emissions per production tonne 
as its intensity ratio the data source for all emissions factors 
co
2
e is defra may 2013 22  synthomer plc annual report 2013  
calculation methodologies
all direct energy production from fossil fuels has been 
aggregated on a group wide basis and converted to co
2
e by 
using the appropriate defra emissions factors no allowance 
has been made for possible country to country variation
electricity has been converted to co
2
e on a country by 
country basis using the conversion factors given by 
defra for 2013 and previous years it should be noted 
that these generally refer to actual country performance  
2 years earlier than the quoted date ie 2013 factors relate 
to 2011 performance
synthomer’s stallingborough site takes all its electricity on an 
exclusive contract from an adjacent waste incinerator this 
electricity is certiﬁed as “green” by the uk government but 
no credit has been taken for this 
vocs have been aggregated on a group basis and converted 
to co
2
e using a factor of 11 this ﬁgure has been used by uk 
cia member companies since 2005 and is at the upper end 
of the range for vocs
information on the release of refrigerant gases has been 
collected for 20112013 the releases for each individual gas 
has been aggregated in each year to give a group release 
and then converted to co
2
e using the equivalence factors 
given by defra for each gas
performance in 2013
the inclusion of refrigerant gases and the calculation of co
2
e 
for electricity on a country by country basis have had a 
signiﬁcant impact on the group’s calculated greenhouse gas 
emissions two unforeseen releases of refrigerant – due to 
equipment failure – have shown that these releases are more 
signiﬁcant than previously estimated they add some 7 to 
the group’s total global warming burden in 2013 known 
and estimated usage in 2011 and 2012 add 3  6 to 
the group’s ghg releases in those years
achieving a signiﬁcant reduction in the actual losses from  
our operations will be an urgent target in 2014
the group hoped to achieve signiﬁcant reductions in voc 
releases in 2013 unfortunately commissioning problems  
with the bd recovery system at kluang mean that the hoped 
reductions there were not realised in 2013 work continued 
throughout the year to bring the plant online and the unit  
was operating at the year end a new boiler which will burn 
residual voc from the kluang nbr plant with full heat 
recovery was installed late in 2013 and is currently 
commissioning better measurement of releases from the 
kluang nbr plant showed a reduction of some 350 tonnes 
compared to the estimates for previous years
in harlow a new cryogenic voc recovery unit came online 
towards the year end but too late to have any signiﬁcant effect 
on the voc releases from the site in 2013 releases from the 
harlow site increased broadly in line with production t aken 
together with the releases known and estimated from other 
synthomer plant the group reduced its releases of vocs in 
2013 by 250 tonnes
despite a 18 improvement in energy efﬁciency in 2013 
changing to using country speciﬁc ﬁgures for the co
2
 
equivalent for electricity has a very marked effect on the 
group’s performance in each year from 20112013 there  
is an increase in ghg emissions due to the higher co
2
e  
for electricity generation in countries such as south africa  
and saudi arabia
this effect is particularly strong in 2013 as malaysia’s co
2
e 
increased to 65 above the uk due to the 2 year delay  
in ﬁgures this actually refers to malaysia’s co
2
e performance 
in 2011 in that year there was a shortage of the natural gas 
which normally generates 60 of malaysia’s electricity due 
to problems in their offshore gas ﬁelds well over half of 
the country’s electricity came from burning coal with 
consequently much higher co
2
 emissions this change 
increased the group’s co
2
 releases by 11 
despite these adverse effects the overall picture of the 
group’s performance remains good the last 3 years are 
the best in the group’s history with emissions per tonne 
lower than they have ever been 
045
040
035
030
025
020
015
010
005
000
10 year target
previous basis
revised defra guidelines
global warming burden
0199
0221 0214
0206
0257
0250
0235 0243
0228
0294
tonnes carbon dioxide co 2 equivalent
released per prodution tonne
0294
0287
0279
0272
0265
0406
0229
0185
0221
0237
0197
0182 0176
0185
0173
0158
0169
0151
0161
0148
0166
13 12 11 10 00 01 04 06 08 09 03 02 05 07
corporate social responsibility report 
continued synthomer plc annual report 2013  23  
strategic report
environment kpis
the tables present environmental kpis for 2011–13 with a coverage and format in line with defra’s guidance as updated 
in 2013 to comply with the reporting required under the companies act 2006 strategic report and report of the directors’ 
regulations 2013
energy consumption
1
2013 2012 2011
 change 
2011–2013
 change 
2012–2013
gj 3284931 3284233 3144349 447 002
gas 678053 681636 793671
light oil 30643 28568 25884
heavy oil 4778 2964 57166
steam 719593 770207 657120
electricity primary basis 1847052 1796093 1604767
gjtonne production 2499 2544 2633 509 176
emissions to air
2
     
carbon dioxide co
2
 equivalent from energy
3
tonnes 185860 175935 170720 887 564
tonnes co
2
 equivalenttonne production 0141 0136 0143 109 376
sulphur dioxide so
2

tonnes 261 211 220 1896 2376
kilos so
2
tonne production 00199 00164 00184 808 2156
nitrous oxides nox
4
tonnes 3847 6999 6180 3774 4503
kilos noxtonne production 00293 00542 00517 4344 4601
volatile organic compounds voc
tonnes 1550 1800 2278 3193 1388
kilos voctonne production 1179 1394 1907 3816 1541
refrigerant releases hcfc and others
5
kilogrammes 4459 3731 1820 14500 1951
tonnes co
2
 equivalent 15231 12646 6340
kilos refrigeranttonne production 00034 00029 00015 12259 1739
total carbon dioxide co
2
 equivalent releases
6
tonnes 218145 208384 202115 793 468
tonnes co
2
 equivalenttonne production 0166 0161 0169 194 282
notes
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 with the exception of transmission and distribution losses for electricity 
these losses are in scope 3 this report is for scope 1  2 
3  co
2
 equivalent emissions include contributions from ch
4
 and n
2
o associated with combustion
4  nox emissions are predominantly those from combustion processes the co
2
 equivalent global warming potential contribution from these releases  
is already included in the co
2
 from energy ﬁgure above
5  data on refrigerant gas losses has been collected for 2013 and has been collected for 2011 and 2012 wherever possible where site data is not available  
for 2011  2012 losses have been assumed to be the same as in 2013 annual losses of refrigerant have been converted to the co
2
 equivalent ﬁgures  
using the substance by substance ﬁgures published by defra based on the materials consumed within the group
6  the total co
2
e ﬁgure is the total of the co
2
 equivalent from energy  the voc contribution assuming an average factor of 1 1 kg co
2
e per kg voc  
 the refrigerant contribution 
7  percentage changes are calculated from the base data and may differ slightly from changes calculated from the data in the tables because of rounding 24  synthomer plc annual report 2013  
executive directors
a m whitﬁeld
2
 – chief executive ofﬁcer
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 52
d c blackwood – chief financial ofﬁcer
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 54
nonexecutive directors
n a johnson
23
 – chairman
joined the board in september 2011 and was appointed 
chairman in may 2012 he is chairman of motability 
operations group plc and e2v technologies plc and the  
senior independent nonexecutive director of the business 
growth fund age 64
the hon a g catto
1
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 61
j chen
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 61
b w d connolly
3
joined the board on 20 january 2014 until june 2013 
he was a senior executive at intertek group plc and  
had previously been chief executive ofﬁcer of moody 
international which was acquired by intertek in 2011  
he is a nonexecutive director of cape plc age 57
dr j j c jansz
13
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 57
dato’ lee hau hian
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 60
j k maiden
123
 – senior independent director
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 52
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 synthomer plc annual report 2013  25  
governance
report from the chairman
dear shareholder
corporate governance was a primary focus for your 
board throughout 2013 as a result of the requirement 
to comply with and report on the new directors’ 
remuneration report regulations and the september 
2012 uk corporate governance code for the ﬁrst time 
in this annual report a project was initiated in the ﬁrst 
quarter of the year to meet the requirements for 
reporting on directors’ remuneration and a full report 
on the work undertaken by the remuneration 
committee in this regard is given in the remuneration 
committee report
the nomination committee was tasked with the 
process of identifying candidates for ﬁlling the 
independent nonexecutive director position left vacant 
by the departure of ishbel macpherson in may 2013 
i was very pleased to announce the appointment of 
brendan connolly at the start of 2014 who has agreed 
to take over from me as chairman of the remuneration 
committee next month
the audit committee expanded the scope of its remit 
in 2013 and will return to full compliance with the 
composition requirements of the code from march 2014
your board continues to review and develop its 
governance policies and processes and to seek to report 
to shareholders in a meaningful and clear manner i am 
pleased to present our full statements on compliance 
and application of the code in 2013 in the rest of this 
report which i hope you ﬁnd informative
neil johnson
chairman
statement of compliance
the company considers that it has complied throughout the 
ﬁnancial year ended 31 december 2013 with the provisions 
set out in the code except in relation to the composition of 
the board and its committees in that
• the board lacked one independent nonexecutive director 
in order to be balanced
• the audit and remuneration committees each comprised 
two independent nonexecutive directors instead of three
• the nomination committee was not composed of a 
majority of independent nonexecutive directors
further details on these matters and how they have been 
addressed 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 2013 comprised two executive directors and 
seven nonexecutive directors until the 2013 annual general 
meeting after which the number of nonexecutive directors 
reduced to six 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 non
executive 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 2013 the board held eight scheduled meetings to 
review current and projected performance and to determine 
strategic issues with a half day dedicated to an annual 
strategy development review 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 2013  
the board held a meeting in marl germany and in filago 
italy at the ofﬁces of its businesses in conjunction with those 
board meetings presentations were given by local senior 
management and the directors were given the opportunity 
to visit the group’s 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 – southeast 
corporate governance 26  synthomer plc annual report 2013  
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
board membership and balance
the chairman chief executive ofﬁcer and senior 
independent director are identiﬁed on page 24 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 mr j chen and  
mr b w d connolly are independent in accordance  
with the provisions of the code
for some seven months of 2013 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 2013 which culminated with the 
appointment of mr b w d connolly in january 2014 the  
board has returned to compliance with this requirement
the board held a total of eight meetings in 2013 in addition 
the chairman held one separate meeting with the non
executive 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
84 41
number of meetings 
attended
d c blackwood 88 na na na
a g catto 88 44 na na
n a johnson 88 na 44 11
lee hau hian 88 na na na
j k maiden 88 44 44 11
a m whitﬁeld 78 na na 01
j j c jansz 88 44 44 na
i j s macpherson
1
15 na na na
j chen 78 na na na
   two meetings were held to deal exclusively with remuneration matters
1 retired on 16 may 2013
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 non
executive 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 2013 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 september 2013 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 2013
the board has not introduced an externally facilitated board 
evaluation process during 2013 but continues to keep the 
beneﬁts of doing so under review
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 all nonexecutive directors have  
a standing invitation to attend committee meetings unless 
they are notiﬁed otherwise
corporate governance
continued synthomer plc annual report 2013  27  
governance
audit committee membership since 1 january 2013
jez maiden chairman
just jansz
alex catto
ishbel macpherson
from 6 march 2013 
until 7 february 2013
the role of the audit committee
throughout 2013 the audit committee was chaired by 
mr j k maiden and comprised at least two independent 
nonexecutive directors together with one nonindependent 
nonexecutive director following the appointment of 
mr b w d connolly to the committee with effect from 
march 2014 the committee will revert to comprising three 
independent nonexecutive directors mr maiden is 
considered by the board to have ‘recent and relevant ﬁnancial 
experience’ for the purposes of provision c31 of the code 
due to his current ﬁnancial role 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 selection and 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 board has during the year extended the 
committee’s remit such that the committee now also 
• advises the board in connection with its obligation 
under section c11 of the code on whether the 
annual report and accounts taken as a whole is 
fair balanced and understandable and provides the 
information necessary for shareholders to assess 
the performance of the group along with its 
business model and strategy
• ensures that the external audit services contract is 
put out to tender at least once every ten years and
• reports on the signiﬁcant issues that it considered in 
relation to the ﬁnancial statements and how these 
were addressed
audit committee chairman’s statement
dear shareholder
during 2013 the committee’s work focused on 
implementation of the changes to narrative reporting and 
the corporate governance environment which applied 
to the group with effect from the start of the year in 
addition to our normal support of the group’s internal 
control and external audit work
at the request of the board the committee has extended 
its remit to include a review of the content of the annual 
report and accounts in order to advise the board on its 
statement required by section c11 of the uk corporate 
governance code described below the committee  
has also reviewed how it reports to the board and to 
shareholders on the discharge of its responsibilities and 
continues to seek to enhance reporting to both
following the external audit tender process undertaken  
in 2012 which resulted in the appointment of 
pricewaterhousecoopers llp in july that year the 
committee has monitored the effectiveness of the audit 
process and is pleased to recommend their reappointment 
at the 2014 annual general meeting
the second year of our three year work plan relating 
to cosourced internal audit services was successfully 
completed in 2013 the result was that all the group’s 
operating companies have now been visited by kpmg uk 
llp  the cosourced internal auditor or received visits from 
the company’s head of internal audit and senior members 
of the head ofﬁce ﬁnance team to review controls and in 
the case of larger operating companies they have received 
both visits 
the committee’s work during the course of the year also 
involved discharging its other responsibilities for those 
matters delegated to it by the board under its remit and 
which is reported on in the following section of this report
alex catto served on the committee during the year on an 
interim basis and will be replaced by brendan connolly in 
march 2014 i would like to thank alex for his work and 
welcome brendan to the committee
jez maiden
audit committee chairman 28  synthomer plc annual report 2013  
auditor objectivity and independence
with regard to seeking to ensure the independence and 
objectivity of the auditor the audit committee’s policy which 
was reviewed and revised during the year is to ensure that  
the auditor’s integrity is not compromised by restricting their 
involvement in the provision of nonaudit services where a 
conﬂict of interest real or perceived may exist the policy 
splits the approval of nonaudit work into three categories
• services which are prohibited
• services which are preapproved subject to limits
• services which require speciﬁc approval on a  
casebycase basis
prohibited services include
• maintaining or preparing accounting records and 
ﬁnancial statements
• the design and implementation of ﬁnancial information 
systems or ﬁnancial controls
• secondments to the group
• recruitment and remuneration related services for key 
management positions
• appraisal valuation and actuarial services
• tax services which require interpretation of tax law 
or reliance on accounting treatments
• legal services unrelated to the audit
a full copy of the policy on the provision of nonaudit services 
by the external auditor is available on the company website
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 2013 
are set out in note 6 on page 71 nonaudit fees principally 
relate to tax compliance and tax advisory services and due 
diligence work in relation to potential acquisitions
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 and as part of the 
internal audit process 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 the auditor’s engagement effectiveness 
independence and objectivity
activities during the year
the committee met formally four times during 2013 and 
carried out the following main activities in addition to the items 
mentioned in the chairman’s overview
• reviewed the ﬁnancial statements in the 2012 annual 
report and the 2013 interim statement
• reviewed the scope and effectiveness of the external audit
• reviewed the group’s risk register
• monitored the effectiveness of internal controls and 
risk management
• received reports from the external auditor on the major 
ﬁndings of its work
• approved the annual external audit plan and the basis 
on which the auditor assesses materiality
• received a report on the group’s tax provisions 
and restructuring
• approved a new policy on the provision of nonaudit 
services by the external auditor
• reviewed the remit and effectiveness of the committee 
• reviewed the group’s whistleblowing arrangements 
• reviewed the group’s internal audit plan and
• received detailed reports and presentations from kpmg 
the cosourced internal auditors and the reviews 
undertaken by senior members of head ofﬁce ﬁnance 
team reviewed reports relating to the implementation  
of recommendations from internal audit visits to enable  
the committee to assess the improvements in the group’s 
controls and reporting and where further actions are 
required considered and approved the plan for 2014 
internal audit reviews which will complete the initial three 
year cycle under which all group companies will be visited  
by kpmg and senior members of group ﬁnance during 
the cycle
in addition the chairman of the committee had regular 
dialogue with the external auditor during the course of the year
corporate governance
continued synthomer plc annual report 2013  29  
governance
nomination committee
nomination committee membership since 1 january 2013
neil johnson chairman
jez maiden
adrian whitﬁeld
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 
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 are 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
the committee led the process for nominating 
mr b w d connolly for appointment as an independent 
nonexecutive director this process involved a thorough 
review of a range of candidates put forward by an 
independent recruitment consultancy heidrick  struggles 
with which the company has no other connection which 
conducted an extensive search process the diversity 
including gender of the board was taken into account  
by the committee when making this nomination
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 
2013 and a number of informal meetings and telephone calls 
as well as several 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 a copy of the 
policy is available at wwwsynthomercom further details  
on the company’s approach to diversity is contained within 
the strategic report
assessment of effectiveness of the external audit
during the year the committee evaluated the performance 
independence and effectiveness of the external auditors 
as part of this process feedback was obtained from head 
ofﬁce and operating company staff involved with the external 
audit together with the committee’s meetings with the 
external auditors the committee assessed the robustness  
of the audit the quality of delivery of the audit against the 
agreed plan and the competence with which the auditors 
handle key accounting and audit adjustments considering 
all of these factors the committee concluded that the 
external auditors were effective
financial reporting and signiﬁcant judgements
as part of their monitoring of the integrity of the ﬁnancial 
statements the committee reviews whether suitable 
accounting policies have been adopted whether management 
has made appropriate estimates and judgements and also 
seeks support from the external auditors to assess them
the main issues reviewed in the year ended 31 december 
2013 are set out below
• provisions for uncertain taxation positions
  signiﬁcant judgement is exercised by management  
with advice from appropriate tax advisors to arrive at  
the amounts provided for tax as the ﬁnal tax outcome of 
several transactions is uncertain and may not be known  
for several years as part of their audit the external auditor 
reviewed the judgements that had been made using tax 
specialists as appropriate and provided the committee 
with an assessment of the appropriateness of 
management judgements
• deﬁned beneﬁt pension accounting
  the group operates a number of deﬁned beneﬁt schemes 
which have signiﬁcant liabilities as outlined in note 25 to 
the group financial statements although the uk schemes  
are closed to future accrual they are sensitive to changes  
in actuarial assumptions during their audit the external 
auditor evaluated the assumptions and methodologies 
used by the group’s actuarial advisors and management 
and assessed whether the assumptions made were 
appropriate and not materially different from external 
benchmarks the external auditors reported to us that  
they were satisﬁed with the assumptions used and with  
the way that the schemes had been accounted for 30  synthomer plc annual report 2013  
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
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 2013 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
remuneration committee
all matters relating to the remuneration committee and 
remuneration are covered in the remuneration report  
set out on pages 32 to 48
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 
alternatively the chairman is also available for meetings with 
major shareholders at their request
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 50 and 51 respectively statements by the auditor 
about its reporting responsibilities are set out on pages 52 
to 55 and 95 to 96 respectively
corporate governance 
continued synthomer plc annual report 2013  31  
governance
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 20 to 23 includes 
a report on the initiatives the company has adopted 
regarding sustainable development
social community and human rights 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 group
wide code of business conduct on corruption and anti
competitive 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
the group’s operating activities are highly regulated in 
all territories and largely carried out in countries that have 
established legislation on human rights issues as such 
information on human rights issues is not considered to 
be necessary for an understanding of the development 
performance or position of the group’s business the group 
has nonetheless adopted a policy on equal opportunities 
diversity and human rights which is available at 
wwwsynthomercom
the company is a member of the ftse4good index
the process was last reviewed by the synthomer board of 
directors in february 2014 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 2013 are 
reviewed in the strategic report
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 20 to 23 reviews the group’s performance in this 
connection in 2013
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 internal and external 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 c21 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 2013 32  synthomer plc annual report 2013  
directors’ remuneration report
remuneration committee chairman’s statement
dear shareholder
i am pleased to present the company’s directors’ remuneration report for the ﬁnancial year ending 31 december 2013 
during the year we undertook a comprehensive review of our executive director pay arrangements we have concluded 
that the key principles and parameters of our remuneration policy do not need to change the key elements of pay are
• a competitive base salary
• a shortterm cash based incentive
• a longterm share based incentive
as part of the review we undertook a full benchmarking review of executive director remuneration the conclusions were 
that base salaries and other ﬁxed pay elements are broadly competitive
the incentive structure was reviewed in the context of supporting synthomer’s strategy to build a strong platform 
for longterm proﬁtable growth the key changes we have made to our policy are as follows
• addition of strategic measures under the annual bonus and the performance share plan
• a modest increase to psp award opportunity
• a recognition that eps targets under the psp should be stretching but must also calibrate with the expectations  
for the business
we undertook extensive shareholder consultation on our proposals the committee was very pleased with the 
constructive dialogue and responses from its shareholders to the new policy 
outturns for 2014
for 2014 base salaries have been increased by 25 which is lower than the average across the allemployee population 
under the annual bonus plan the threshold level of pbt performance was not met and no annual bonuses have been paid
directors’ remuneration report
this is the ﬁrst report presented in the new format as prescribed by the new reporting regulations accordingly our 
directors’ remuneration policy will be subject to a binding vote and our annual report on remuneration will be subject  
to an advisory vote we hope we will have the support of our shareholders for both reports 
remuneration committee
i am delighted to report that brendan connolly who joined your board and the committee in january 2014 has agreed 
to take over the chair of the committee next month i would like to thank the members of the committee for their work 
and support during my chairmanship
neil johnson
chairman synthomer plc annual report 2013  33  
governance
directors’ remuneration – policy principles
the key principles for executive directors’ remuneration at synthomer are as follows
• sufﬁcient to attract and retain executive directors of the ability and expertise necessary to achieve the strategic goals  
of the company
• incentivise executive directors by rewarding performance and driving the right behaviours
• align executive director reward with the experience of shareholders 
in setting executive directors’ remuneration the committee takes account of pay and conditions throughout the company  
the committee also considers corporate governance requirements and best practice in terms of remuneration structures and 
the process of setting executive remuneration
the committee reviews performance targets regularly to ensure that they do not encourage or motivate inappropriate risk 
taking furthermore the committee when necessary will take into account any environmental social and governance esg 
events and the audit committee’s risk assessment when assessing performance
the following diagram provides an overview of the key elements of reward for executive directors and the performance 
measures used
directors’ remuneration policy
the following sections set out our directors’ remuneration policy the “policy” this policy will be put forward for shareholder 
approval at the 2014 agm in accordance with section 439a of the companies act 2006 this policy is effective from the 2014 
agm on 1 may 2014
the committee reserves the right to make any remuneration payments and payments for loss of ofﬁce including exercising any 
discretions available to it in connection with such payment notwithstanding that they are not in line with the policy set out below 
where the terms of the payment were agreed i before the policy came into effect or ii at a time when the relevant individual 
was not a director of the company and in the opinion of the committee the payment was not in consideration for the individual 
becoming a director of the company for these purposes “payments” includes the committee satisfying awards of variable 
remuneration and in relation to an award over shares the terms of the payment were “agreed” at the time the award is granted 
base salary pension  
and beneﬁts
annual bonus
at least 70 –  
proﬁt before tax
up to 30 –  
strategic and 
operational objectives
at least 40 –  
relative tsr
at least 40 –  
eps growth
up to 20 –  
strategic measures
performance 
share plan 34  synthomer plc annual report 2013  
policy table
element
purpose and 
link to strategy operation
maximum 
opportunity
performance 
measures
base salary supports the 
recruitment  
and retention  
of executive 
directors
reﬂects the 
individual’s skills 
experience 
performance  
and role within 
the company
salary levels are generally 
reviewed annually by the 
committee
when reviewing salary levels 
the committee takes into 
account
• the individual’s skills 
experience and 
performance 
• the size and scope of the 
individual’s responsibilities 
• pay and conditions 
elsewhere in the group
• pay at companies of  
similar size and
• the complexity and 
international scope of 
the group
for 2014 executive director 
salaries are
• a m whitﬁeld £512500
• d c blackwood £320441
there is no overall 
maximum for salary 
opportunity or increases 
salary increases will 
normally be inline with 
the increases awarded 
to other employees 
within the group 
larger increases may  
be made under certain 
circumstances 
including but not  
limited to
• an increase in  
the scope andor 
responsibility of  
the individual’s role 
• the development of 
the individual within 
the role
• alignment to market 
levels and
• corporate events 
such as a signiﬁcant 
acquisition or group 
restructuring which 
impact the scope 
of role
none although 
individual and company 
performance are factors 
taken into account when 
considering salary 
increases
beneﬁts provided to 
support the 
retention and 
recruitment of 
executive 
directors
beneﬁts to executive directors 
may include private health 
insurance life insurance and a 
fully expensed car from time 
to time the committee may 
review the beneﬁts provided 
the remuneration committee 
may remove beneﬁts that 
executive directors receive or 
introduce other beneﬁts if it 
considers it is appropriate to 
do so any other beneﬁts will 
be proportionate with the 
current beneﬁts provided
where executive directors 
are required to relocate or 
complete an international 
assignment the remuneration 
committee may offer 
additional beneﬁts or vary 
beneﬁts according to local 
practice
there is no overall 
maximum for beneﬁts 
the cost of insurance 
beneﬁts may vary from 
yeartoyear depending 
on the individual 
circumstances 
the level of any 
relocation beneﬁts 
allowances and 
expenses will depend 
on the speciﬁc 
circumstances
none
directors’ remuneration report 
continued synthomer plc annual report 2013  35  
governance
element
purpose and 
link to strategy operation
maximum 
opportunity
performance 
measures
annual  
bonus
incentivises  
the delivery of 
ﬁnancial strategic 
and operational 
objectives selected 
to support our 
business strategy 
within the year
performance targets will be 
determined by the committee 
at the beginning of the 
performance period 
the committee will assess 
performance against these 
targets following the end of 
the performance period
the committee may adjust 
awards upward or downward 
to reﬂect the overall 
performance of the company 
or the individual
100 of salary at least 70 of awards 
are subject to adjusted 
proﬁt before tax or  
other relevant ﬁnancial 
measure targets
up to 30 of awards 
are subject to strategic 
and operational 
measures including 
personal objectives
the award for threshold 
performance is normally 
20 of maximum
2011 
performance 
share plan
approved by 
shareholders  
at the 2011 
egm
incentivises 
executive 
directors to  
deliver sustained 
performance  
and sustainable 
returns for 
shareholders  
over the longer 
term 
awards of shares or nilcost 
options are made annually 
with vesting conditional on 
the company’s performance 
against longterm targets 
over a three year 
performance period
the committee may reduce 
or defer the level of vesting of 
an award where an event has 
occurred such as a material 
health or safety incident
awards may give rise to 
dividend equivalents
the committee may  
clawback awards up to  
three years after vesting 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  
overpayment
all vested awards net of  
tax if applicable must be 
retained by executive  
directors until share  
ownership guidelines  
are met
under the plan rules 
approved by 
shareholders the value 
of shares awarded to  
an individual in any one 
year may not normally 
exceed 150 of salary 
annual awards to 
executive directors are
• a m whitﬁeld 125 
of salary
• d c blackwood 
110 of salary 
under the plan rules 
approved by 
shareholders there  
is the ability to make 
additional awards  
in exceptional 
circumstances
additional awards may 
be made in the case  
of a transformative 
company event any 
such awards would be 
subject to additional 
shareholding guidelines 
or holding periods  
to be determined by  
the committee
any additional award 
would be subject to  
the overall plan limit  
of 300 of salary
• at least 40 based 
on relative tsr 
performance
• at least 40 based 
on eps growth 
targets 
• up to 20 based  
on performance 
measures linked to 
the delivery of the 
business strategy 
• no single measure 
will constitute more 
than 50 of an 
annual award
a maximum of 25  
of each element will  
vest for threshold 
performance
the committee may 
amend the ﬁnal vesting 
level under the tsr 
element if it does not 
consider it to be 
reﬂective  
of the underlying 
performance of the 
group 
any additional awards 
made in exceptional 
circumstances will be 
subject to performance 
conditions and vesting 
schedules as 
determined by the 
committee at the  
time of award  36  synthomer plc annual report 2013  
element
purpose and 
link to strategy operation
maximum 
opportunity
performance 
measures
pension provide a 
competitive level 
of retirement 
beneﬁts to 
support both 
retention and 
recruitment of 
executive 
directors 
executive directors are  
eligible to participate in the 
group personal pension plan
executive directors may 
receive payments as a cash 
allowance which they may  
use either in conjunction  
with that plan andor to  
enable them to make their 
own arrangements
maximum of 25 
of base salary
none
legacy plans and awards
2002 performance share plan – awards of nil cost options were made prior to 29 june 2011 and all awards under it will have 
fully vested or lapsed prior to the effective date of this policy awards were made subject to tsr performance conditions
2011 performance share plan – awards of nil cost options were made in 2012 and 2013 and remain unvested these awards 
are subject to tsr and eps performance conditions 
an exceptional award was made in 2011 under the 2011 plan this award was subject to an eps performance condition  
and will lapse in full prior to the effective date of the policy
shareholding 
guidelines
the company operates shareholding guidelines for executive directors the current guidelines are detailed 
in the annual report on remuneration page 42
provisions to withhold or recover sums paid under incentives are as detailed in the table above no other elements  
of remuneration are subject to recovery provisions 
the committee may make minor amendments to the policy for regulatory exchange control tax or administrative purposes 
or to take account of a change in legislation without obtaining shareholder approval for that amendment 
the 2011 performance share plan shall be operated in accordance with the rules of the plan as approved by shareholders 
in accordance with the plan rules
• the performance condition may be replaced or varied if an event occurs which causes the committee reasonably to 
consider that it would be appropriate to amend the performance condition in which case the committee can vary or replace 
the performance condition provided that the amended performance condition is in its opinion fair reasonable and not 
materially less difﬁcult than the original condition when set 
• the committee may determine that awards will be settled in cash
• the committee may make adjustments to awards in the event of a variation of share capital a demerger rights issue 
special dividend or other similar events
performance measures and targets
annual bonus
the annual bonus performance measures are chosen to provide an appropriate balance between incentivising executive 
directors to meet ﬁnancial targets for the year and to deliver speciﬁc strategic and operational goals this balance allows  
the remuneration committee to effectively reward performance against the key elements of our strategy
the bonus targets are set by the remuneration committee each year to ensure that executive directors are appropriately 
focused on the key objectives for the next 12 months targets are set by reference to the company’s business plan
directors’ remuneration report 
continued
policy table continued synthomer plc annual report 2013  37  
governance
performance share plan
the performance measures under the psp are set to align with the longterm strategy of the company and longterm value 
creation for shareholders
• eps growth – reﬂects the ﬁnancial performance of the company the committee sets targets to be appropriately stretching 
with regard to a number of internal and external reference points
• relative tsr – total shareholder return tsr reﬂects the company’s ultimate delivery of value to shareholders 
the committee considers that this promotes alignment between the interests of executive directors and the shareholder 
experience 
• strategic measures – this element directly incentivises management to deliver the company’s key strategic priorities 
• the committee considers that this performance framework represents an appropriate and balanced basis on which 
to measure the performance of the company
difference in policy for executive directors and other employees
the remuneration policy for our executive directors is designed in accordance with the same principles that underpin 
remuneration for the wider employee population the wider employee group also participate in performancebased incentives 
throughout the group base salary and beneﬁt levels are set in accordance with the prevailing market conditions differences 
between executive director pay policy and other employee pay reﬂect the seniority of the individuals the prevailing market 
conditions and the corporate governance practices for executive director remuneration the key difference in policy is that 
for executive directors a greater proportion of total remuneration is based on incentives 
nonexecutive director fees
non
executive 
director fees
the board reviews nonexecutive director fees periodically when reviewing fee levels the board  
may consider the scope and time commitment of the role the skills and experience of the individual  
and fee levels at other companies nonexecutive directors do not participate in the determination  
of their own fees
nonexecutives are paid differential fee levels based on their membership of board committees 
chairmanship of board committees or role as senior independent director
expenses incurred in the performance of nonexecutive duties for the company may be reimbursed  
or paid for directly by the company as appropriate including any tax due on the expenses 
chairman 
fees
the remuneration committee review chairman fees periodically when reviewing fee levels they  
may consider the scope and time commitment of the role the skills and experience of the individual  
and fee levels at other companies the chairman does not participate in the determination of the fee level
expenses incurred in the performance of duties for the company may be reimbursed or paid for directly 
by the company as appropriate including any tax due on the expenses 
total fees to nonexecutives including the chairman operate within the cap deﬁned in the articles of association currently 
£750000 per annum
recruitment policy
executive directors
the committee would have regard to the following principles when agreeing the components of a remuneration package  
upon the recruitment of a new executive director
• base salary will be set taking into account the principles set out in the policy table and may be set at a level higher or lower 
than the previous incumbent 
• the committee may on appointing an executive director need to ‘buy out’ remuneration arrangements forfeited on leaving 
a previous employer any buyout would take into account the terms of the arrangements eg form of award performance 
conditions timeframe being forfeited in the previous package the form of any award would be determined at the time  
and the committee may if necessary make use of lr 942 of the listing rules for the purpose of buyout awards only  
the overriding principle will be that any replacement buyout awards will in the opinion of the committee be no more 
valuable than the entitlement which has been forfeited  38  synthomer plc annual report 2013  
directors’ remuneration report 
continued
• annual bonus opportunity will be no more than the maximum set out in the policy table the committee may determine 
that for the ﬁrst year of appointment the annual bonus award will be subject to such conditions as it may determine
• psp opportunity will be no more than the plan rules maximum set out in the policy table the exceptional maximum may 
be used for the purpose of recruitment
• the maximum variable pay opportunity on recruitment excluding buyouts is 400 of salary consistent with the maximums 
in the policy table above
• the committee may extend leaving arrangements to include a payment in lieu of notice to cover beneﬁts as well as base 
salary for the outstanding period
other
for interim positions a cash supplement may be paid rather than salary for example a nonexecutive director taking on an 
executive function on a shortterm basis
where an executive is appointed from within the company the normal policy of the company is that any legacy arrangements 
would be honoured in line with the original terms and conditions and that they would be appointed on a new service contract 
similarly if an executive director is appointed following the acquisition of or merger with another company legacy terms and 
conditions would be honoured
nonexecutive directors and chairman 
in the event of the appointment of a new nonexecutive director or chairman remuneration arrangements will be in line with  
the principles detailed in the relevant table above
service contracts
the current contracts in place for executive directors are as follows
director date of contract
a m whitﬁeld 22 november 2005
d c blackwood 12 september 2007
there is no unexpired term as each of the executive directors’ contracts is on a rolling basis save in circumstances justifying 
summary termination the notice period for each of the above contracts is one year service contracts for new executive 
directors will be limited to 12 months’ notice 
the executive directors are also entitled to 25 working days’ holiday plus public holidays per holiday year
all nonexecutive directors are appointed in writing letters of appointment do not include entitlement to participation in the 
company’s share incentive plans or any other of its employee beneﬁts and do not currently have a notice period the company 
may add a notice period of no more than 3 months the nonexecutive directors are subject to annual reelection there is  
no right to compensation for loss of ofﬁce if they are not reelected or if the company terminates the appointment because  
the nonexecutive director has accepted a position with another company without prior board approval and which the board 
reasonably considers likely to give rise to a material conﬂict 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 26 
directors’ service contracts and letters of appointment are available for inspection at the company’s registered ofﬁce during 
normal business hours and will be available at the annual general meeting
policy on payment for loss of ofﬁce
the committee takes a number of factors into account when determining leaving arrangements for an executive director
• where either party gives notice of the termination of an executive directors’ employment the committee may make 
a payment in lieu of notice based on the base salary for the outstanding period other than this provision the obligation  
to pay accrued but untaken holiday and as outlined below regarding bonus and the performance share plan service 
contracts make no provision for predeﬁned compensation on termination the committee may include beneﬁts  
including pension for the payment in respect of the outstanding period the following principles shall apply when 
determining payments for loss of ofﬁce for current and new executive directors notwithstanding the provisions of the 
executive directors service contracts the committee may structure compensation payments in such a way as it deems 
appropriate for example considering making phased payments andor requiring the executive director to mitigate his loss 
taking into account the circumstances of departure including performance and bearing in mind any potential consequences synthomer plc annual report 2013  39  
governance
• if employment is terminated by the company the departing executive directors may have a legal entitlement under statute  
or otherwise to additional amounts which would need to be met in addition the committee retains discretion to settle any 
claims by or on behalf of the executive director in return for making an appropriate payment and contributing to legal fees 
incurred by the executive director in connection with termination of employment where the company wishes to enter into 
a settlement agreement and the individual must seek independent legal advice these arrangements will be used sparingly 
and only entered into where the committee believes it is in the best interests of the company and its shareholders to do so
• while there is no entitlement to a bonus when a director leaves employment or serves notice before 31 march following  
the year end except in the case of death or retirement the committee may award an annual bonus for leavers taking into 
account the circumstances of departure any bonus would normally be subject to performance and time prorating and 
would not be made in circumstances of poor performance 
• the treatment of outstanding share awards is governed by the relevant share plan rules the following table summarises  
the leaver provisions of the 2011 performance share plan under which executive directors may currently hold awards 
in the form of share options or conditional rights to receive shares
plan
‘good leaver’  
categories treatment for ‘good leaver’
treatment for  
‘other leaver’
2011 performance 
share plan
• death
• injury illhealth 
or disability
• transfer of 
employing 
company or 
business 
outside group
• retirement with 
agreement of 
the committee
• redundancy
• any other 
reason as 
determined by 
the committee
• awards will normally vest on a timeapportioned 
basis and subject to the achievement of 
performance conditions at the relevant vesting 
date the committee may disapply or modify  
the time prorating of unvested awards
• the vesting date for such awards will normally  
be the original vesting date although the 
committee may determine that awards can vest 
upon the later of cessation of employment or the 
assessment of any performance condition relating 
to such cessation
• awards in the form of options that vest early due  
to cessation of employment may be exercisable 
until the earlier of i 12 months from the date of 
vesting and ii the normal expiry of the exercise 
period following this date unexercised awards  
will lapse
• if the participant ceases employment after the 
normal vesting date options may be exercisable 
until the earlier of 12 months from the date of 
cessation or the normal expiry of the exercise 
period following this date unexercised awards  
will lapse
• in the event of death following cessation of 
employment all unvested awards shall vest  
on the date of death on a timeapportioned  
basis and subject to the achievement of 
performance conditions
unvested awards 
normally lapse in full 
unless otherwise 
determined by the 
committee 40  synthomer plc annual report 2013  
directors’ remuneration report 
continued
vested shares under the 2002 performance share plan are exercisable before the sooner of ten years from the date of grant 
of the original award or twelve months from the date of cessation of employment
where an award is made for the purpose of recruitment for example a buyout award then the leaver provisions would be 
determined at the time of award having regard to the circumstances of the recruitment the terms of awards being bought 
out and the principles for leavers in the current policy
on change of control or in the event of a demerger special dividend or other similar event treatment will be in accordance 
with the rules of the 2011 performance share plan
in the event of a change of control of the company unvested awards may vest subject to achievement of the performance 
conditions and time prorating in such circumstances the committee may elect to disapply or modify the time prorating 
of unvested awards in the event of an internal reorganisation the committee may determine that unvested awards are 
automatically surrendered for a new award which the committee determines is equivalent to the surrendered award including 
as to any performance condition except that it shall be over shares in the acquiring company or some other company
in the event of a demerger special dividend or other similar event which in the opinion of the committee would materially  
affect the market price of shares the committee may allow awards to vest subject to time prorating unless disapplied and 
achievement of the performance conditions
illustrations of application of remuneration policy
the following charts illustrate the different elements of the executive directors’ remuneration under three different performance 
scenarios ‘minimum ‘target’ and ‘maximum’ the assumptions used are provided below the charts the illustrations are based 
on annual bonus awards for 2014 and performance share plan awards to be made in 2014
a m whitﬁeld d c blackwood 
 
 
minimumtarget maximum
fixed pay annual bonus performance share plan
£2000000
£1800000
£1600000
£1400000
£1200000
£1000000
£800000
£600000
£400000
£200000
£0
100 59
27
28
14
35
£114m
£183m
£067m
37
 
minimumtarget maximum
fixed pay annual bonus performance share plan
£2000000
£1800000
£1600000
£1400000
£1200000
£1000000
£800000
£600000
£400000
£200000
£0
100 59
28
30
13
33
£069m
£108m
£041m
38
component minimum target maximum
fixed base salary base salary for 2014
pension value of cash supplement for 2014
beneﬁts taxable value of annual beneﬁts provided in 2013
variable annual bonus 0 of salary 60 of salary 100 of salary 
2011 performance share plan
1
0 vesting 25 vesting 100 vesting
1  the value for the performance share plan is based on the face value of annual psp awards under the forward looking policy and base salaries for 2014 
the calculation excludes share price growth or dividends during the performance period synthomer plc annual report 2013  41  
governance
consideration of employment conditions elsewhere in the company
when setting the policy for the remuneration of the executive directors the committee has regard to the pay and employment 
conditions of employees within the group the committee considers salary increases within the business but does not formally 
consider comparison metrics
the committee does not consult directly with employees when formulating the remuneration policy for executive directors 
consideration of shareholder views
the committee undertook a comprehensive review of the remuneration policy during 2013 the committee consulted with  
its largest shareholders as part of this process and shareholders’ comments were taken into account by the committee  
in ﬁnalising the remuneration policy
annual report on remuneration
operation of the executive director remuneration policy for 2014
during 2013 the committee undertook a comprehensive review of executive remuneration this review was on a ‘clean sheet’ 
basis with the aim of developing a longterm remuneration policy that supports synthomer’s strategy and which will remain 
in place for at least three years see policy report pages 33 to 41 the key changes we have made to our policy are as follows
• addition of strategic measures under the annual bonus and the performance share plan psp 
• a modest increase to psp award opportunity this reﬂects a market review of total remuneration opportunity against the 
background of the performance demonstrated by our highly experienced management team and the increased size and 
scale of the group 
• a recognition that eps targets under the psp should be stretching but must also calibrate with the expectations  
for the business 
the speciﬁc remuneration arrangements for 2014 are described below 
base salary salary increases of 25 effective 1 january 2014 
2014 salaries
• a w whitﬁeld £512500
• d c blackwood £320441
pension and beneﬁts no changes executives receive a cash allowance in lieu of pension contributions 
a fully expensed car and private health insurance 
2014 cash allowances in lieu of pension contributions
• a w whitﬁeld 25 of salary
• d c blackwood 20 of salary
annual bonus for 2014 performance under the annual bonus will be measured on the 
following basis
• 80 subject to performance against underlying proﬁt before tax targets
• 20 subject to performance measures against key strategic and 
operational objectives
• targets and objectives are considered by the board to be commercially 
sensitive however the committee will provide information on targets and 
objectives retrospectively
2014 maximum award opportunity
• a w whitﬁeld 100 of salary
• d c blackwood 100 of salary 42  synthomer plc annual report 2013  
performance share plan for awards made in 2014 performance will be measured as follows
• 40 based on relative tsr performance versus ftse 250 excluding 
investment trusts and ﬁnancial services companies 
 – 25 of this element will vest for median performance
 – 100 vesting for upper quartile performance 
 – vesting on a straight line basis between these points
• 40 based on underlying eps growth 
 – 25 of this element will vest for eps growth of 45 per annum 
 – 100 vesting for eps growth of 10 per annum 
 – vesting on a straight line basis between these points 
 –  this target range was set following consideration of the longterm strategy 
and the outlook for the markets in which we operate
• 20 based on performance against three equally weighted measures directly 
linked to the delivery of the business strategy 
 –  proportion of sales from new products measured over the 5 years to the  
end of the performance period – incentivising greater innovation through new 
product development
 –  growth in asia ebit – incentivising growing the scale and proﬁtability  
of operations in emerging markets
 –  cumulative europe ebitda – incentivising the delivery of stable cash ﬂows 
from our more mature european business to fund this international growth
 – for each of these measures 25 will vest for threshold performance
 –  the targets for these measures and the level of performance achieved  
will be disclosed following the end of the performance period
2014 maximum award opportunity
• a w whitﬁeld 125 of salary 
• d c blackwood 110 of salary
shareholding guidelines executives are required to build unfettered interests in shares of at least 100  
of salary the committee will keep the level under review
single ﬁgure of remuneration for executive directors
year
base 
salary
£
beneﬁts
1
£
annual 
bonus
£
longterm 
incentives
2
£
pension
£
total
£
executive directors
a m whitﬁeld 2013 500000 32457 0 265812 125000 923269
2012 472500 31790 127575 734279 120461 1486605
d c blackwood 2013 312625 26275 0 159503 62525 560928
2012 305000 24765 82350 474381 61000 947496
1   this is the total taxable value of beneﬁts received by each director during 2013 the table below provides details of the main component of the relevant beneﬁts 
paid to executive directors
directors’ remuneration report 
continued
car expenses
a m whitﬁeld £31733
d c blackwood £25551
2  for 2013 the longterm incentives are the value i of the award granted under the 2002 psp and made in 2011 which is due to vest in april 2014 and  
ii of the award granted under the 2011 psp and also made in 2011 which is due to vest in june 2014 both based on the average share price for the three 
month period ending 31 december 2013 for 2012 the longterm incentives are the value of the award granted under the 2002 psp and made in 2010 which 
vested on 11 march 2013 based on the share price at the date of vesting further information about the level of vesting is provided in this report
operation of the executive director remuneration policy for 2014 continued synthomer plc annual report 2013  43  
governance
additional information for single ﬁgure remuneration
base salary
the base salary for senior executives is reviewed with effect from 1 january each year the committee reviewed the positioning 
of executive director base salaries in late 2013 in the context of the prevailing economic circumstances and taking into account 
pay and employment conditions elsewhere in the group the base salary levels effective 1 january 2014 are set out below 
2013 
base salary
2014 
base salary  change
a m whitﬁeld £500000 £512500 25
d c blackwood £312625 £320441 25
annual bonus
2013 award
for 2013 the company operated a cash bonus plan for the executive directors related to the achievement of proﬁt before 
tax targets the entry level proﬁt target under the plan of £95 million was not achieved and therefore no bonus payments 
were made 
2002 performance share plan
2011 award included in single ﬁgure of remuneration for 2013
the awards made in april 2011 under the 2002 psp were subject to absolute shareholder return and relative shareholder  
return conditions as follows
a absolute total shareholder return condition
increase in company tsr above rpi  
over 3 year period ended 31 december 2013 percentage of award that vests performance achieved
1576 or more 50
rpi  323  
giving 50 vesting
927 25
more than 927 but no more than 1576 straight line vesting on a pro rata basis 
between 25 and 50
less than 927 nil
b relative total shareholder return condition 
company tsr performance  
over 3 year period ended 31 december 2013 percentage of award that vests performance achieved
company tsr in the upper quartile of the  
tsr of companies in the ftse 250 index 50
company tsr  
below ftse 250  
total return index  
giving nil vesting
company tsr between ftse 250 total  
return index and upper quartile tsr of  
ftse 250 index
straight line vesting on a pro rata basis 
between 5 and 50
company tsr equal to ftse 250 total  
return index 5
company tsr below ftse 250 total  
return index nil
the 2011 awards which will vest in april 2014 are as follows
no of shares 
in award
no of shares 
that lapse
no of shares 
that vest 
exercise 
period
a m whitﬁeld 222551 111275 111276 until 
april 2021 d c blackwood 133531 66765 66766 44  synthomer plc annual report 2013  
directors’ remuneration report 
continued
2011 performance share plan
2011 award in single ﬁgure of remuneration for 2013
the awards made in june 2011 under the 2011 psp were an exceptional grant of awards to reward attainment of truly 
exceptional business performance following the acquisition of polymerlatex in march 2011 and were subject to an absolute 
earnings per share performance condition as follows
eps for the 2013 ﬁnancial year percentage of an award that vests performance achieved
303 pence or more 100
eps of 207 pence  
giving nil vesting
between 273 pence and 303 pence on a straightline basis  
between 0 and 100 
less than 273 pence 0
the 2011 awards will lapse in june 2014 as follows
no of shares 
in award
no of shares 
that lapse
no of shares 
that vest
a m whitﬁeld 206422 206422 0
d c blackwood 123853 123853 0
2013 award
the awards made in april 2013 were as follows
scheme basis of award
number 
of shares face value
percentage 
vesting at 
threshold 
performance
performance 
period 
end date
a m whitﬁeld 2011 psp – nil cost options 100 of salary 266808 £500000 2531122015
d c blackwood 2011 psp – nil cost options 100 of salary 166822 £312625 25 31122015
the face value of the awards is calculated using the share price at the date of grant being 24 april 2013 which was 
1874 pence per share
the awards made in april 2013 under the 2011 psp were subject to the following performance conditions
relative total shareholder return condition eps condition
company relative tsr performance against the  
ftse 250 index excluding investment trusts and 
ﬁnancial services companies over 3 year period 
ending 31 december 2014 eps for the 2015 ﬁnancial year percentage of award that will vest
upper quartile 293 pence or more 50
between median and upper quartile between 255 pence and 293 pence on a straight line basis between 
 125 and 50
median 255 pence 125
below median less than 255 pence 0
pension entitlements
both executive directors receive a cash allowance in lieu of pension contributions the chief executive previously participated  
in the group personal pension plan no additional beneﬁt is receivable in the event of a director retiring early
cash allowance
 of salary 
a m whitﬁeld 25
d c blackwood 20 synthomer plc annual report 2013  45  
governance
single ﬁgure of remuneration for nonexecutive directors
nonexecutive directors base fee
committee 
membership 
fee
committee 
chair fee total
n a johnson 2013 140000 – – 140000
2012 106100 – – 106100
the hon a g catto 2013 40000 4167 – 44167
2012 40000 – – 40000
j chen 2013 40000 – – 40000
2012 9432 – – 9432
dr j jansz 2013 40000 5000 – 45000
2012 29840 3730 – 33570
dato’ lee hau hian 2013 40000 – – 40000
2012 40000 – – 40000
j k maiden 2013 40000 5000 5000 50000
2012 40000 5000 5000 50000
i j s macpherson
1
2013 15067 1883 1883 18833
2012 24933 3117 3117 31167
1 resigned on 16 may 2013
the nonexecutive director and chairman’s fees were reviewed in january 2014 nonexecutive director fees were left 
unchanged from 2013 except that it was determined that an additional fee of £5000 would be introduced for the nonexecutive 
director undertaking the role of the senior independent director with effect from 1 january 2014 the chairman’s fee was 
increased from £140000 to £160000 with effect from same date
directors’ shareholding and share interests number of sharesoptions
interests in 
company 
shares 
31 december 
2013
vested 
unexercised 
performance 
related options 
31 december 
2013
1
total 
unfettered 
interests in 
shares and 
vested options 
31 december 
2013
unvested 
performance 
related options 
31 december 
2013
23
share options 
exercised 
during 2013
share 
ownership 
requirements 
 of salary
interests in 
shares at 
31 december 
2013 
 of salary
4
a m whitﬁeld 14000 406394 420394 902203 629261 100 100
d c blackwood 17500 237151 254651 557451 1108291 100 100
the hon a g catto 1746955
7741950
dato’ lee hau hian 44763
n a johnson 100000
j k maiden 2523
dr j j c jansz 10000
j chen –
i j s macpherson na
 non beneﬁcial interest
1   the vested unexercised performance related options comprise the awards made under the 2002 psp in 2009 and 2010 these awards will remain exercisable 
until 2019 and 2020 respectively 
2   this includes unvested nilcost options relating to the 2011 psp award which will vest in april 2014 for a m whitﬁeld this is a nilcost option over  
 111276 shares for d c blackwood this is a nilcost option over 66766 shares an equal number of options for each executive director will lapse
3   unvested performance related options comprise the awards made under the 2011 psp in 2011 2012 and 2013 details of the performance conditions 
attaching to the 2011 and 2013 awards are set out on pages 35 and 36 respectively
the performance conditions attaching to the 2012 awards are as follows
relative total shareholder return condition eps condition
company relative tsr performance against the ftse 250 index excluding 
investment trusts and ﬁnancial services companies over 3 year period ending  
31 december 2014 eps for the 2014 financial year percentage of award that will vest
upper quartile 32 pence or more 50
between median and upper quartile between 28 pence and 32 pence
on a straight line basis between 
125 and 50
median 28 pence 125
below median less than 28 pence 0 46  synthomer plc annual report 2013  
directors’ remuneration report 
continued
4    executive directors are required to hold 100 of their annual salary in the company’s shares until this requirement is met no sales of shares that  
vest under longterm incentive plans are permitted other than to satisfy tax liabilities that arise on the exercise of share awards under such plans  
 the committee considers that unfettered unexercised vested nilcost awards are economically equivalent to shares and as such that they should count  
on a net of tax basis toward compliance with the 100 salary guideline the committee will keep the guideline level of share interest under review
payments to past directors
no payments were made to past directors during the year
payments for loss of ofﬁce
no payments for loss ofﬁce were made during the year
performance graph and table
the graph and the table below allow comparison of the total shareholder return of the company and the chief executive 
remuneration outcomes over the last ﬁve years
300
250
200
150
100
50
0
13 10 11 09 12
ftse 250
synthomer plc
the graph compares the total shareholder return performance of the company with that of the ftse 250 which is considered 
to be the most appropriate index against which to make a comparison
2009 2010 2011 2012 2013
ceo total single ﬁgure of remuneration £000 786 1484 3934 1487 923
bonus  of maximum awarded 80 80 100 27 0
lti  of maximum vesting 0 100 100 100 50
the ceo total single ﬁgure of remuneration includes salary beneﬁts and pension contributions paid in the year together  
with bonuses and longterm incentive awards which vested based on performance in the year
percentage change in remuneration of director undertaking the role of chief executive compared with uk group employees
the table below sets out the increase in total remuneration of the chief executive and that of the employees of the group’s 
main uk trading subsidiary total employee pay is based on the total salary beneﬁts and bonuses for employees of that 
company comprising some 360 employees the directors consider that this employee population is the most relevant for 
comparison purposes taking into account geographical location and remuneration structure
salary
 increase
taxable 
beneﬁts
 increase
annual 
bonus
 increase 
a m whitﬁeld 58 2 0
total employee pay beneﬁts and bonuses 14 52 0 synthomer plc annual report 2013  47  
governance
relative importance of spend on pay
the table below shows the relative importance of the group’s all employee remuneration expense compared with returns 
to shareholders by way of dividends
2013
£m
2012
£m  change
dividends 194 153 268
total employee remuneration 687 640 73
dividends are the dividends paid in the year total employment remuneration is the consolidated salary cost for all 
group employees
emoluments
2013
£000
2012
£000
the total amounts for directors’ remuneration and other beneﬁts were
emoluments 1249 1435
external appointments
executive directors are permitted to accept external appointments with the prior approval of the board provided that there is  
no adverse impact to their role and duties to the company any fees arising from such appointments may be retained by the 
executive directors where the appointment is unrelated to the group’s business
mr a m whitﬁeld is a nonexecutive director of the chemical industries association limited and assumed the role of president 
on 1 july 2013 and does not receive any remuneration for either position
remuneration committee
remuneration committee membership since 1 january 2013
neil johnson chairman from 7 february 2013
jez maiden
just jansz 
ishbel macpherson until 7 february 2013 and chairman until that date
brendan connolly joined the committee on 23 january 2014 and will become chairman of the committee on 1 march 2014 at which time neil johnson  
will step down
the committee’s composition was non compliant with the requirements of code provision d2 for most of 2013 as it was 
comprised of only two independent nonexecutive directors and the company chairman was also chairman of the committee 
this composition was adopted as an interim measure due to the board not having available to it the resources to staff a fully 
compliant remuneration committee and in the circumstances it was considered most appropriate for the chairman to lead the 
processes required to meet the new director remuneration reporting regulations
attendance at committee meetings is set out on page 26
key duties of the committee
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  48  synthomer plc annual report 2013  
directors’ remuneration report  
continued
advisers
the chief executive ofﬁcer chief financial ofﬁcer and company secretary are invited to attend committee meetings to 
contribute to the committee in its deliberations however no individual is involved in discussions or is part of any decisions 
relating to their own remuneration
the committee received independent advice from new bridge street a trading name of aon hewitt limited for the three 
months to 31 march 2013 following a review from april 2013 the committee appointed deloitte llp as the committee’s 
independent remuneration advisors 
during the year new bridge street provided advice on market data that materially assisted the committee the fees paid to 
new bridge street in respect of this work in 2013 totalled £1000 aon hewitt limited is part of aon group as is aon limited 
which provides insurance broking services to the group the committee was satisﬁed that this did not compromise the 
independence of the advice received from new bridge street 
during the year deloitte provided advice on new reporting regulations market data and other remuneration matters that 
materially assisted the committee the fees paid to deloitte in respect of this work were charged on a time and expenses basis 
and totalled £93850 for advice in 2013 deloitte also provided tax services to the company in the year the committee was 
satisﬁed that this did not compromise the independence of the advice received
both new bridge street and deloitte are founding members of the remuneration consultants group and adhere to its code  
of conduct in each case the ﬁrms were appointed directly by the committee and the committee is satisﬁed that the advice 
received was objective and independent
statement of voting at general meeting
the table below sets out the results of the vote on the directors’ remuneration report over the last 3 years
votes for votes against votes withheld
member number  of vote number  of vote number
2013 directors’ remuneration report 142635459 69 64414560 31 52978664
2012 directors’ remuneration report 237328379 97 7514128 3 6746102
2011 directors’ remuneration report 231668058 95 13155928 5 143288
voting outcome
following the 2013 agm the chairman spoke with a number of institutional shareholders in relation to the key concerns  
the points raised included the exercise of discretion to award an annual bonus for exceeding synergy targets and the 58 
increase to the ceo’s salary 
shortly before the agm the committee had appointed deloitte llp to assist in a comprehensive review of the executive 
director arrangements the committee considered shareholders’ concerns as part of this review 
the proposals were developed on a ‘clean sheet’ basis taking into account the following perspectives
• the strategy of the business and ensuring that incentives and performance measures supported that strategy
• best practice and corporate governance developments
• market review against companies of similar size and complexity
the committee chairman consulted extensively with shareholders following the review before ﬁnalising the proposals it was 
appreciated that there were a range of views from shareholders on various matters however the committee was pleased 
with the dialogue and level of support received during this process 
a number of shareholders raised the question of increasing shareholding guidelines the committee is currently satisﬁed that 
the current shareholding guidelines are entirely consistent with practice in comparable ftse 250 companies the committee 
will keep this area under review
by order of the board
r atkinson
company secretary
27 february 2014 synthomer plc annual report 2013  49  
governance
the directors submit their annual report and the audited 
consolidated ﬁnancial statements for the year ended 
31 december 2013
strategic report
the strategic report which includes the principal activities 
in the course of the year and the principal risks and 
uncertainties for the company can be found on  
pages 4 to 23
results and dividends
the proﬁt attributable to shareholders for the year was 
£483 million the interim dividend of 24 pence per share  
was paid on 7 november 2013 the directors recommend 
a ﬁnal dividend of 36 pence per share payable on 4 july 2014 
to those shareholders registered at the close of business on 
6 june 2014 a dividend reinvestment plan is available to 
shareholders and this alternative will continue to be offered 
until further notice
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 24  
all of whom served throughout the year apart from mr b w d 
connolly who joined on 20 january 2014 all the directors will 
retire and will be seeking election or reelection as appropriate 
at the forthcoming annual general meeting
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 32 to 48
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 
26 to the ﬁnancial statements during 2013 no shares were 
issued or repurchased a total of 195730 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
major shareholdings
other than the shareholdings disclosed as directors’  
interests in the remuneration report as at 14 february 2014 
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 44162410 1299
direct and 
indirect 
interest
ubs global asset 
management 17029199 501
direct and 
indirect 
interest
old mutual plc 17238190 507
direct 
interest and 
qualifying 
ﬁnancial 
instruments
report of the directors
for the year ended 31 december 2013 50  synthomer plc annual report 2013  
report of the directors
for the year ended 31 december 2013 continued
corporate governance
the corporate governance report is set out on pages
25 to 31 and forms part of the report of the directors
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 
which terminate on 31 march 2015 and
• 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 strategic report
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
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 1100 am 
on 1 may 2014 at manor of groves hotel high wych 
sawbridgeworth hertfordshire cm21 0ju
by order of the board
r atkinson
company secretary
27 february 2014
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 2014 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 2013 annual general 
meeting a resolution will be tabled at the 2014 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 
engaged in an ongoing project to improve its communication 
procedures an annual management conference is held to 
bring senior managers together to share ideas and develop 
policy and values and behaviours dialogue takes place 
regularly with employees to make them aware of the ﬁnancial 
and economic factors affecting the performance of the group 
performance related bonus schemes are in operation 
throughout the group
political donations
no political donations were made in the year
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
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 52 to 55 
and 95 to 96
this conﬁrmation is given and should be interpreted in 
accordance with section 418 of the companies act 2006 synthomer plc annual report 2013  51  
governance
statement of directors’ responsibilities
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
• as required by the uk corporate governance code 
the annual report and ﬁnancial statements taken as a 
whole provides the information necessary to assess the 
group’s performance business model and strategy and 
is fair balanced and understandable
by order of the board
a m whitﬁeld   d c blackwood
chief executive ofﬁcer chief financial ofﬁcer
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 52  synthomer plc annual report 2013  
report on the group ﬁnancial statements
our opinion  
 in our opinion the group ﬁnancial statements deﬁned below
• give a true and fair view of the state of the group’s affairs as at 31 december 2013 and of the group’s proﬁt and cash ﬂows 
for the year then ended
• have been properly prepared in accordance with international financial reporting standards 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 ias regulation
this opinion is to be read in the context of what we say in the remainder of this report
what we have audited
the group ﬁnancial statements the “ﬁnancial statements” which are prepared by synthomer plc comprise
• the consolidated balance sheet and analysis of net borrowings as at 31 december 2013
• the consolidated income statement and consolidated statement of comprehensive income for the year then ended
• the consolidated statement of changes in equity and consolidated cash ﬂow statement for the year then ended and
• the notes to the ﬁnancial statements which include a summary of signiﬁcant accounting policies and other 
explanatory information
the ﬁnancial reporting framework that has been applied in their preparation comprises applicable law and ifrss as adopted  
by the european union
what an audit of ﬁnancial statements involves 
we conducted our audit in accordance with international standards on auditing uk and ireland isas uk  ireland  
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 for the ﬁnancial year to identify material 
inconsistencies with the audited ﬁnancial statements and to identify any information that is apparently materially incorrect based 
on or materially inconsistent with the knowledge acquired by us in the course of performing the audit if we become aware of  
any apparent material misstatements or inconsistencies we consider the implications for our report
overview of our audit approach
materiality
we set certain thresholds for materiality these helped us to determine the nature timing and extent of our audit procedures 
and to evaluate the effect of misstatements both individually and on the ﬁnancial statements as a whole 
based on our professional judgement we determined materiality for the group ﬁnancial statements as a whole to be 
£41 million which represents 45 of underlying proﬁt being proﬁt before tax adjusted for special items we used underlying 
proﬁt for our materiality judgement because it is the principal measure used by the directors in the annual report to discuss  
the group’s ﬁnancial performance 
we agreed with the audit committee that we would report to them misstatements identiﬁed during our audit above £200000 
as well as misstatements below that amount that in our view warranted reporting for qualitative reasons
independent auditor’s report 
to the members of synthomer plc synthomer plc annual report 2013  53  
group ﬁnancial statements
overview of the scope of our audit
the group has business operations worldwide principally in europe and asia the largest being germany malaysia and  
the uk the group ﬁnancial statements are a consolidation of reporting units being holding companies intermediate holding 
companies and operations based in thirteen countries comprised of nineteen trading companies 
in establishing the overall approach to the group audit we determined the type of work that needed to be performed at the 
reporting units by us as the group engagement team or component auditors within pwc operating under our instruction 
where the work was performed by component auditors we determined the level of involvement we needed to have in the audit 
work at those reporting units to be able to conclude whether sufﬁcient appropriate audit evidence had been obtained as a basis 
for our opinion on the group ﬁnancial statements as a whole the group engagement team visited operations in germany and 
the uk as part of the audit 
in determining our scope we considered the nature location and size of the group’s operations at each component and any 
signiﬁcant issues reported by local statutory audit teams around the group 
based on this scoping our group audit focused on six reporting units which were all subject to audits of their complete ﬁnancial 
information and included germany malaysia and the uk together with various head ofﬁce companies which were also subject 
to audits of their complete ﬁnancial information this accounted for 78 of the group’s revenue 79 of the group’s operating 
proﬁt and 83 of the group’s underlying proﬁt before tax 
areas of particular audit focus
in preparing the ﬁnancial statements the directors made a number of subjective judgements for example in respect of 
signiﬁcant accounting estimates that involved making assumptions and considering future events that are inherently uncertain 
we primarily focused our work in these areas by assessing the directors’ judgements against available evidence forming our 
own judgements and evaluating the disclosures in the ﬁnancial statements
in our audit we tested and examined information using sampling and other auditing techniques to the extent we considered 
necessary to provide a reasonable basis for us to draw conclusions we obtained audit evidence through testing the 
effectiveness of controls substantive procedures or a combination of both 
we considered the following areas to be those that required particular focus in the current year this is not a complete list  
of all risks or areas of focus identiﬁed by our audit we discussed these areas of focus with the audit committee their report  
on those matters that they considered to be signiﬁcant issues in relation to the ﬁnancial statements is set out on page 29
area of focus
how the scope of our audit addressed 
the area of focus
provisions for uncertain taxation positions
we focused on this area because the group has a number 
of signiﬁcant taxation provisions which by their nature 
require an element of judgement to determine an 
appropriate level to record them at 
we requested and read the latest correspondence between 
the group and the overseas tax authorities 
we discussed the potential tax exposure with senior group 
management and the basis for their positions with the 
group’s inhouse tax specialists 
we utilised our experience of similar challenges elsewhere 
to independently assess the evidence for these provisions 
deﬁned beneﬁt pension accounting 
we focused on this area because the group has signiﬁcant 
deﬁned beneﬁt pension schemes in the uk and germany 
with a material net pension liability recorded on the group 
balance sheet the net liability is based on a number  
of assumptions and is highly sensitive to small changes 
in these
we evaluated the reasonableness of the assumptions used 
for the valuation of the uk and german pension schemes 
focusing on the key ﬁnancial and nonﬁnancial assumptions 
where a small movement in the assumption could lead to a 
signiﬁcant movement in the net pension liability the key 
assumptions were the discount rate and mortality 
assumptions which are disclosed in note 25 of the group 
ﬁnancial statements
we compared these assumptions to our expected range  
for similar schemes as at the year end  54  synthomer plc annual report 2013  
area of focus
how the scope of our audit addressed 
the area of focus
fraud in revenue recognition 
isas uk  ireland presume there is a risk of fraud in 
revenue recognition because of the pressure management 
may feel to achieve the planned results or expectations
we focused on whether the revenue recognised 
corresponded to sales transactions that took place in  
the period t o address this we tested a sample of revenue 
transactions in the year to supporting documentation  
we also used data analysis techniques to identify any 
unusual transactions relating to revenue and tested these 
in addition we tested manual journal entries posted to 
revenue accounts obtaining supporting evidence to 
determine that the journal was appropriate 
risk of management override of internal controls 
isas uk  ireland require us to consider the risk 
associated with management override of controls  
we assessed the overall control environment of the group 
including the arrangements for staff to “whistleblow” 
inappropriate actions and assessed the results of the 
group’s internal audit reviews that took place in the year 
we examined the signiﬁcant accounting estimates and 
judgements relevant to the ﬁnancial statements for evidence 
of bias by the directors that may represent a risk of material 
misstatement due to fraud with a particular focus on 
centrally held provisions and accruals we also evaluated 
controls in place over the approval and processing of 
manual journals testing manual journals that we considered 
to be higher risk in nature and obtaining supporting 
evidence to determine that these journals were appropriate
going concern
under the listing rules we are required to review the directors’ statement set out on page 51 in relation to going concern  
we have nothing to report having performed our review
as noted in the directors’ statement the directors have concluded that it is appropriate to prepare the group’s ﬁnancial 
statements using the going concern basis of accounting the going concern basis presumes that the group has adequate 
resources to remain in operation and that the directors intend it to do so for at least one year from the date the  
ﬁnancial statements were signed as part of our audit we have it that the directors’ use of the going concern basis 
is appropriate
however because not all future events or conditions can be predicted these statements are not a guarantee as to the  
group’s ability to continue as a going concern
opinion on matters prescribed by the companies act 2006
in our opinion the information given in the strategic report and the directors’ report for the ﬁnancial year for which the group  
ﬁnancial statements are prepared is consistent with the group ﬁnancial statements
other matters on which we are required to report by exception
adequacy of information and explanations received
under the companies act 2006 we are required to report to you if in our opinion we have not received all the information  
and explanations we require for our audit we have no exceptions to report arising from this responsibility
directors’ remuneration
under the companies act 2006 we are required to report to you if in our opinion certain disclosures of directors’ remuneration 
speciﬁed by law have not been made and under the listing rules we are required to review certain elements of the report 
to shareholders by the board on directors’ remuneration we have no exceptions to report arising from these responsibilities
independent auditor’s report 
to the members of synthomer plc continued synthomer plc annual report 2013  55  
group ﬁnancial statements
corporate governance statement
under the listing rules we are required to review the part of the corporate governance statement relating to the company’s 
compliance with nine provisions of the uk corporate governance code ‘the code’ we have nothing to report having 
performed our review
on page 51 of the annual report as required by the code provision c11 the directors state that they consider the annual 
report taken as a whole to be fair balanced and understandable and provides the information necessary for members to 
assess the group’s performance business model and strategy on page 29 as required by c38 of the code the audit 
committee has set out the signiﬁcant issues that it considered in relation to the ﬁnancial statements and how they were 
addressed under isas uk  ireland we are required to report to you if in our opinion
• the statement given by the directors is materially inconsistent with our knowledge of the group acquired in the course  
of performing our audit or
• the section of the annual report describing the work of the audit committee does not appropriately address matters 
communicated by us to the audit committee
we have no exceptions to report arising from this responsibility
other information in the annual report
under isas uk  ireland we are required to report to you if in our opinion information in the annual report is
• materially inconsistent with the information in the audited ﬁnancial statements or
• apparently materially incorrect based on or materially inconsistent with our knowledge of the group acquired  
in the course of performing our audit or
• is otherwise misleading
we have no exceptions to report arising from this responsibility
responsibilities for the ﬁnancial statements and the audit
our responsibilities and those of the directors 
as explained more fully in the directors’ responsibilities statement set out on page 51 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 
isas uk  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 
other matter 
we have reported separately on the parent company ﬁnancial statements of synthomer plc for the year ended 31 december 2013 
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 
27 february 2014 56  synthomer plc annual report 2013  
2013 2012 restated
note
underlying 
performance
£m
special 
items
£m
ifrs
£m
underlying 
performance
£m
special 
items
£m
ifrs
£m
continuing operations
group revenue 45 9927  – 9927 10530  – 10530 
share of joint ventures’ revenue 45 622  – 622 588  – 588 
total sales 10549  – 10549 11118  – 11118 
group revenue 9927  – 9927 10530  – 10530 
company and subsidiaries  
 before special items 999  – 999 1063  – 1063 
restructuring and site closure 3  – 14 14 – 67 67
amortisation of  
 acquired intangibles 3  – 267 267 – 258 258
company and subsidiaries 999 281 718 1063 325 738 
share of joint ventures 45 49 17 32 49 16 33 
operating proﬁtloss 5 1048 298 750 1112 341 771 
interest payable 7 105 – 105 116 – 116
interest receivable 7 09  – 09 07  – 07 
96 – 96 109 – 109
ias 19 interest charge 51 – 51 57 – 57
fair value adjustment 37 – 12 12 – 17 17
finance costs 147 12 159 166 17 183
proﬁtloss before taxation 901 310 591 946 358 588 
taxation 8 180 85 95 217 173 44
proﬁtloss for the year 721 225 496 729 185 544 
proﬁt attributable to  
 minority interests 18 05 13 18 05 13 
proﬁtloss attributable to  
 equity holders of the parent 703 220 483 711 180 531 
721 225 496 729 185 544 
earningsloss per share 
– basic 11 207p 65p 142p 209p 53p 156p 
– diluted 11 205p 64p 141p 206p 52p 154p 
special items  
the special items are shown in more detail in note 3
consolidated income statement
for the year ended 31 december 2013 synthomer plc annual report 2013  57  
group ﬁnancial statements
2013 2012 restated
equity 
holders of 
the parent
£m
minority 
interests
£m
total
£m
equity 
holders of 
the parent
£m
minority 
interests
£m
total
£m
proﬁt for the year 483 13 496 531 13 544 
actuarial gains and losses 44  – 44 165 – 165
tax relating to components of other comprehensive income  
 see note 8 –  –  – 19  – 19 
total items that will not be reclassiﬁed to proﬁt or loss 44  – 44 146 – 146
gains on cash ﬂow hedges arising during the year 23  – 23 05  – 05 
exchange differences on translation of foreign operations 115 10 125 79 02 81
gains on a hedge of a net investment taken to equity 36 – 36 01  – 01 
total items that may be reclassiﬁed subsequently  
 to proﬁt or loss 128 10 138 73 02 75
other comprehensive expense for the year 84 10 94 219 02 221
total comprehensive income for the year 399 03 402 312 11 323
consolidated statement of comprehensive income
for the year ended 31 december 2013
consolidated statement of changes in equity
for the year ended 31 december 2013
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 2013 340 2305 09 – 49 23 167 2749 117 2866
proﬁt for the year –– –– – – 483 483 13 496
actuarial gains and losses –– –– – – 44 44 – 44
gains on cash ﬂow hedges  
 arising during the year –– –– – 23 – 23 – 23
exchanges differences  
 on translation of  
 foreign operations –– –– 115 –– 115 10 125
gains on a hedge of a net  
 investment taken to equity –– –– 36 –– 36 – 36
tax relating to components  
 of other comprehensive  
 income see note 8 –– – – ––– –––
total comprehensive  
 expenseincome  
 for the year –– –– 151 23 527 399 03 402
dividends paid –– –– – – 194 194 – 194
sharebased payments –– –– – – 49 49 – 49
at 31 december 2013 340 2305 09 – 200 – 451 2905 120 3025
at 1 january 2012 restated 340 2305 09 – 29 28 10 2645 106 2751
proﬁt for the year –– –– – – 531 531 13 544
actuarial gains and losses –– –– – – 165 165 – 165
gains on cash ﬂow hedges  
 arising during the year –– –– – 05 – 05 – 05
exchanges 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 –– –– – – 19 19 – 19
total comprehensive  
 expenseincome  
 for the year –– –– 78 05 385 312 11 323
dividends paid –– –– – – 153 153 – 153
sharebased payments –– –– – – 55 55 – 55
at 31 december 2012 340 2305 09 – 49 23 167 2749 117 2866 58  synthomer plc annual report 2013  
consolidated balance sheet
31 december 2013
note
2013
£m
2012
£m
noncurrent assets
goodwill 13 2411 2409
acquired intangible assets 14 1095 1356
other intangible assets 15 05 06
property plant and equipment 16 2031 1996
financial asset 17 – 56
deferred tax assets 9 99 102
investment in joint ventures 18 130 139
total noncurrent assets 5771 6064
current assets
inventories 19 794 781
trade and other receivables 20 1333 1390
financial asset 17 58 –
cash and cash equivalents 21 590 537
derivatives at fair value 22 64 87
total current assets 2839 2795 
assets classiﬁed as held for sale 23 11 –
current liabilities
borrowings 21 424 04
trade and other payables 24 1610 1848
current tax liability 8 386 388
derivatives at fair value 22 – 43
total current liabilities 2420 2283
noncurrent liabilities
borrowings 21 1609 2004
deferred tax liability 9 438 509
post retirement beneﬁt obligations 25 1129 1197
total noncurrent liabilities 3176 3710
net assets 3025 2866
equity 
called up share capital 26 340 340
share premium 2305 2305
capital redemption reserve 09 09
hedging and translation reserve 200 49
cash ﬂow hedging reserve – 23
retained earnings 451 167
equity attributable to equity holders of the parent 2905 2749
minority interests 120 117
total equity 3025 2866
the ﬁnancial statements on pages 56 to 94 were approved by the board of directors and authorised for issue on  
27 february 2014 they are signed on its behalf by
a m whitﬁeld    d c blackwood    directors
analysis of net borrowings
note
2013
£m
2012
£m
cash and cash equivalents 21 590 537
current borrowings 21 424 04
financial asset 17 58 56
noncurrent borrowings 21 1609 2004
net borrowings 1385 1415
special item deduct fair value adjustment 21 49 61
special item add nonrecourse factoring 21  – 204
net borrowings underlying performance 1336 1558 synthomer plc annual report 2013  59  
group ﬁnancial statements
consolidated cash ﬂow statement
for the year ended 31 december 2013
2013 2012
note £m £m £m £m
operating
cash generated from operations 27 925 925 
 interest received 09 07 
 interest paid 102 120
net interest paid 93 113
 uk corporation tax paid –  –  
 overseas corporate tax paid 174 188
total tax paid 174 188
net cash inﬂow from operating activities 658 624 
investing 
dividends received from joint ventures 18 38 32 
 purchase of property plant and equipment 391 392
 sale of property plant and equipment 41 11 
net capital expenditure 350 381
net cash outﬂow from investing activities 312 349
financing
equity dividends paid 10 194 153
settlement of equitysettled share based payments 62 68
decrease in borrowings 28 –  369
net cash outﬂow from ﬁnancing activities 256 590
increasedecrease in cash cash equivalents and  
 bank overdrafts during the year 90 315
cash cash equivalents and bank overdrafts at 1 january 28 533 859 
cash inﬂowsoutﬂows
 cash and cash equivalents 28 86 311
 bank overdrafts 28 04 04
90 315
exchange and other movements 28 33 11
cash cash equivalents and bank overdrafts at 31 december 28 590 533 
reconciliation of net cash ﬂow from operating 
activities to movement in net borrowings
note
2013
£m
2012
£m
net cash inﬂow from operating activities 658  624  
add back reduction in factored invoices 204 06  
add back dividends received from joint ventures 18 38  32 
less net capital expenditure and ﬁnancial investment 350 381
550 281  
equity dividends paid 10 194 153
settlement of equitysettled share based payments 62 68
exchange movements 72 25 
movement in net borrowings underlying performance 222 85  60  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
31 december 2013
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 24
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
the following standards have been adopted by the group 
for the ﬁrst time for the ﬁnancial year beginning on or after 
1 january 2013 and have a material impact on the group
amendment to ias 1 ‘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
ias 19 ‘employee beneﬁts’ was revised in june 2011  
the changes on the group’s accounting policies has been  
as follows to immediately recognise all past service costs and 
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  
see note 33 for the impact on the ﬁnancial statements
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
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 2013 and have not been applied in preparing 
these consolidated ﬁnancial statement none of these is 
expected to have a signiﬁcant effect on the consolidated 
ﬁnancial statements of the group except the following set  
out below
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 
adoption of this standard will have no impact on the primary 
statements the only signiﬁcant impact will be an increase  
in the disclosure relating to the investment in joint ventures
2 signiﬁcant accounting policies
basis of accounting
these ﬁnancial statements have been prepared in accordance 
with international financial reporting standards as adopted 
by the european union ifrss as adopted by the eu ifric 
interpretations and the companies act 2006 applicable to 
companies reporting under ifrs 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 50 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 at the operating segment level 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 group ﬁnancial statements
synthomer plc annual report 2013  61  
group ﬁnancial statements
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 
32008 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 ias 12 income taxes 
and ias 19 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 amortised 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
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 ias 38 are met
• an asset is created that can be separately identiﬁed  
such as software and new processes
• it is technically feasible to complete the asset
• management intends to complete the development
• there is an ability to use or sell the asset once development 
has been completed
• it is probable that the asset created will generate future 
economic beneﬁts
• adequate technical ﬁnancial and other resources  
to complete the development are available and
• the development cost of the asset can be measured reliably
no research or development costs met the criteria for  
required capitalisation under ias 38 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 
accumulated 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 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
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 62  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
2 signiﬁcant accounting policies continued
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 income statement 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
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 ias 23
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  group ﬁnancial statements
synthomer plc annual report 2013  63  
group ﬁnancial statements
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 sterling
denominated 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
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 64  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
2 signiﬁcant accounting policies continued
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
deferred income tax assets and liabilities are offset when  
there is a legally enforceable right to offset current tax assets 
against current tax liabilities and when the deferred income 
taxes assets and liabilities relate to income taxes levied by the 
same taxation authority on either the taxable entity or different 
taxable entities where there is an intention to settle the 
balances on a net basis
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 share 
based payments is expensed on a straightline basis over  
the vesting period
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
• 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 ias 39 hedge accounting is 
not applied group ﬁnancial statements
synthomer plc annual report 2013  65  
group ﬁnancial statements
• 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 longterm 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 growth rates used 
within the forecast future cash ﬂows are developed with 
reference to external sources but are subject to estimation 
uncertainty see note 13 for more details
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 25
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 66  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
3 special items
the special items are made up as follows
2013
£m
2012
£m
continuing operations
operating proﬁtloss
restructuring and site closure – cash costs 14 60
– noncash costs – 07
amortisation of acquired intangibles see note 14 – subsidiaries 267 258
– share of joint ventures 17 16
298 341
finance costs
fair value adjustment see note 7 12 17
loss before taxation from continuing operations 310 358
taxation see note 8 85 173
loss for the year from continuing operations 225 185
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 27 at 31 december 2013 
£38 million 2012 £114 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  group ﬁnancial statements
synthomer plc annual report 2013  67  
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 the chief operating decision maker concerning interest revenues interest expense depreciation  
or amortisation income taxes or other material noncash items
total sales operating proﬁt
2013
underlying
performance
£m
special
items
£m
ifrs
£m
underlying
performance
£m
special
items
£m
ifrs
£m
analysis by activity
continuing activity
europe  north america
subsidiaries 7103 – 7103 882 219 663
share of joint ventures 345 – 345 16 17 01
7448 – 7448 898 236 662
asia  rest of world
subsidiaries 2824 – 2824 198 62 136
share of joint ventures 277 – 277 33 – 33
3101 – 3101 231 62 169
total sales 10549 – 10549
divisional operating proﬁt 1129 298 831
unallocated corporate expenses 81 – 81
operating proﬁtloss 1048 298 750
total share of joint ventures
europe  north america 345 – 345 16 17 01
asia  rest of world 277 – 277 33 – 33
622 – 622 49 17 32
total sales operating proﬁt
2012 restated
underlying
performance
£m
special
items
£m
ifrs
£m
underlying
performance
£m
special
items
£m
ifrs
£m
analysis by activity
continuing activity
europe  north america
subsidiaries 7638 – 7638 984 260 724
share of joint ventures 331 – 331 18 16 02
7969 – 7969 1002 276 726
asia  rest of world
subsidiaries 2892 – 2892 160 65 95
share of joint ventures 257 – 257 31 – 31
3149 – 3149 191 65 126
total sales 11118 – 11118
divisional operating proﬁt 1193 341 852
unallocated corporate expenses 81 – 81
operating proﬁt 1112 341 771
total share of joint ventures
europe  north america 331 – 331 18 16 02
asia  rest of world 257 – 257 31 – 31
588 – 588 49 16 33 68  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
4 segmental analysis continued
special items
2013
europe 
north
america
£m
asia  rest
of world
£m
unallocated
corporate
expenses
£m
total
£m
restructuring  site closure – cash costs 14 – – 14
restructuring  site closure – noncash costs – – – –
amortisation of acquired intangibles 205 62 – 267
share of joint ventures special items 17 – – 17
236 62 – 298
2012
europe 
north
america
£m
asia  rest
of world
£m
unallocated
corporate
expenses
£m
total
£m
restructuring  site closure – cash costs 57 03 – 60
restructuring  site closure – noncash costs 07 – – 07
amortisation of acquired intangibles 196 62 – 258
share of joint ventures special items 16 – – 16
276 65 – 341
2013
total assets
£m
total
liabilities
£m
capital
expenditure
£m
depreciation
and
amortisation
£m
analysis by activity
continuing activity
subsidiaries
europe  north america 2310 876 151 110
asia  rest of world 1814 563 199 82
4124 1439 350 192
unallocated assets and liabilities 114 171 – –
4238 1610 350 192
share of joint ventures see note 18 257 127
goodwill see note 13 2411 –
acquired intangibles and related deferred tax 1095 333
current and deferred taxation – 392
post retirement beneﬁt obligations – 1129
net borrowings see note 21 – 1385
8001 4976
net assets 3025
the above table has been enhanced by the inclusion of taxation and post retirement beneﬁt obligations as separate line 
items the prior year comparatives below have been similarly represented to ensure consistency synthomer plc annual report 2013  69  
group ﬁnancial statements
2012 restated
total assets
£m
total
liabilities
£m
capital
expenditure
£m
depreciation
and
amortisation
£m
analysis by activity
continuing activity
subsidiaries
europe  north america 2306 1096 133 101
asia  rest of world 1770 572 270 82
4076 1668 403 183
unallocated assets and liabilities 184 223 02 01
4260 1891 405 184
share of joint ventures see note 18 272 133
goodwill see note 13 2409 –
acquired intangibles and related deferred tax 1356 411
current and deferred taxation – 384
post retirement beneﬁt obligations – 1197
net borrowings see note 21 – 1415
8297 5431
net assets 2866
analysis of total sales by destination
2013
£m
2012
£m
western europe 5746 6071
eastern europe 500 480
north america 382 455
asia 2907 3096
africa and middle east 960 960
rest of world 54 56
10549 11118
intersegmental sales
in addition to the amounts included above intersegmental sales of £192 million 2012 £119 million were made as set out 
below these sales were eliminated on consolidation
2013
europe 
north
america
£m
asia  rest
of world
£m
total
£m
europe  north america – 117 117
asia  rest of world 75 – 75
total 75 117 192
2012
europe 
north
america
£m
asia  rest
of world
£m
total
£m
europe  north america – 79 79
asia  rest of world 40 – 40
total 40 79 119 70  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
5 operating proﬁt
2013
£m
2012
restated
£m
group revenue 9927 10530 
share of joint ventures revenue 622 588 
total sales 10549 11118 
group revenue 9927 10530 
cost of sales 8193 8691
gross proﬁt 1734 1839 
sales and marketing costs 233 228
administrative expenses 310 364
share of joint ventures 49 49 
ebitda 1240 1296 
depreciation and amortisation 192 184
operating proﬁt – underlying performance 1048 1112 
special items 298 341
operating proﬁt – ifrs 750 771 
the breakdown of operating proﬁt has been revised to provide a clearer indication of performance the table below provides 
further details of the restatements made in relation to the 2012 ﬁgures
as originally
reported
£m
amount
reclassiﬁed
£m
ias 19
restatement
see note 33
£m
restated
£m
group revenue 10530 – – 10530 
cost of sales 8517 174 – 8691
gross proﬁt 2013 174 – 1839 
distribution costs 520 520 – – 
sales and marketing costs – 228 – 228
administrative expenses 452 66 22 364
share of joint ventures 33 16 – 49
depreciation and amortisation – 184 – 184
special items 325 16 – 341
operating proﬁt – ifrs 749 00 22 771 
2013
£m
2012 
£m
operating proﬁt is stated after charging the following
amortisation acquired intangibles see note 14 267 258 
amortisation other intangibles see note 15 02 03 
depreciation see note 16 190 181 
hire of plant and equipment 34 25 
other lease rentals 30 30 
research and development expenditure see below 135 133 
the deﬁnition of research and development expenditure has been amended to include technical services 
as a result the 2012 comparative has increased from £80 million to £133 million synthomer plc annual report 2013  71  
group ﬁnancial statements
6 auditors’ remuneration
2013
£000
2012 
£000
fees payable to the company’s auditor for 
 audit of the company’s annual accounts and the consolidated accounts 87 87
fees payable to the company’s auditor and their associates for other services to the group 
 audit of the company’s subsidiaries 374 392
total audit fees 461 479
audit related assurance services 5 2
tax compliance services 147 36
other taxation advisory services 64 11
other services 156 15
total nonaudit fees 372 64
the other services provided by the group auditor in the current year related mainly to due diligence on potential acquisitions 
other taxation advisory services relate to advice on employment tax and other sundry projects
details of the company’ s policy on the use of the 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 27 to 29 no services were provided pursuant to contingent fee arrangements
7 finance costs
2013
£m
2012
restated
£m
interest payable on bank loans and overdrafts 84 88
interest payable on other loans 21 28
105 116
less interest receivable 09 07
96 109
ias 19 interest charge 51 57
net interest payable 147 166
fair value adjustment 12 17
total ﬁnance costs 159 183
the fair value adjustment is the mark to market adjustment in respect of cross currency and interest rate derivatives used  
for hedging purposes where ias 39 hedge accounting is not applied
8 taxation
2013
£m
2012
restated
£m
continuing operations
current tax
uk corporation tax – 01 
overseas taxation 172 219 
172 220 
deferred tax
origination and reversal of temporary differences 08 03
180 217 
special items
current tax
restructuring and site closure costs 04 16
deferred tax
recognition of uk deferred tax asset – 71
amortisation of acquired intangibles 81 86
85 173
total tax on proﬁt before taxation 95 44  72  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
8 taxation continued
uk corporation tax is calculated at 2325 2012 245 of the estimated assessable proﬁt for the year taxation for other 
jurisdictions is calculated at the rates prevailing in the respective jurisdictions
as a result of the provisions of finance act 2012 to reduce the uk corporation tax rate from 24 to 23 from 1 april 2013  
the applicable rate of corporation tax for the year is 2325 finance act 2013 introduced further changes to the main rate  
of corporation tax which was reduced from 23 to 21 from 1 april 2014 and to 20 from 1 april 2015 uk deferred tax 
balances have therefore been remeasured to reﬂect the rate at which they are expected to reverse
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
2013
£m
2012
 restated
£m
proﬁt before taxation – continuing operations 591 588 
tax on proﬁt before taxation continuing operations at standard
 uk corporation tax rate of 2325 2012 245 137 144 
effects of
expenses not deductible for tax purposes 26 26 
tax incentives and items not subject to tax 47 44
higher tax rates on overseas earnings 14 08 
other deferred tax asset not recognised less amounts now recognised 45 86
adjustments to tax charge in respect of prior periods 02 04
effect of change of rate on deferred tax 08 – 
tax charge for year 95 44 
tax charges to other comprehensive income
2013
£m
2012
 restated
£m
deferred tax credit in respect of actuarial losses – 19
current tax liabilities
2013
£m
2012
 restated
£m
current tax liabilities 386 388
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
2013
accelerated
tax
depreciation
£m
acquired
intangibles
£m
other
£m
total
£m
at 1 january 107 411 09 509
chargedcredited to income statement 01 82 05 76
exchange adjustment 01 04 – 05
at 31 december 109 333 04 438 synthomer plc annual report 2013  73  
group ﬁnancial statements
deferred tax assets
2013
pensions
£m
at 1 january 102 
credited to income statement 03
at 31 december 99 
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
2013
£m
2012 
£m
uk pension liability 55 88
tax losses 92 107
accelerated capital allowances 20 28
other timing differences 03 03
164 226
10 ordinary dividends
2013
pence per
share
2012
pence per
share
2013
£m
2012
£m
interim dividend 24 22 81 75 
proposed ﬁnal dividend 36 33 122 112 
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
2013
number
’000
2012
number
’000
weighted average number of ordinary shares for the purposes of basic earnings per share 339549 339549 
effect of dilutive potential ordinary shares 
share options 4010 5527 
weighted average number of ordinary shares for the purposes of diluted earnings per share 343559 345076 
earnings per share
2013 2012 restated
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 703 220 483 711 180 531 
basic earnings per share 207p 65p 142p 209p 53p 156p 
diluted earnings per share 205p 64p 141p 206p 52p 154p 74  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
12 employees
2013
number 
2012
number
the average monthly number of employees during the year by activity was
continuing activity
europe  north america 1168 1151 
asia  rest of world 842 817 
holding companies 20 23 
2030 1991 
share of joint ventures 67 63 
2097 2054 
the share of joint ventures is calculated by applying the group’s effective interest to the average number of employees for each 
joint venture
2013
£m
2012
restated
£m
the aggregate remuneration of all group employees comprised
wages and salaries 687 640 
social security costs 93 95 
pension costs 110 118 
share based payments 08 11 
898 864 
directors’ emoluments are disclosed in the remuneration report on pages 32 to 48
13 goodwill
2013
£m
2012 
£m
cost
at 1 january 3508 3546
exchange adjustments 02 38
at 31 december 3510 3508
accumulated impairment losses
at 1 january and at 31 december 1099 1099
net book value
at 31 december 2411 2409
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
2012
£m
exchange
adjustments
£m
net book
value at
31 december
2012
£m
exchange
adjustments
£m
net book
value at
31 december
2013
£m
europe  north america 2113 30 2083 31 2114
asia  rest of world 334 08 326 29 297
total 2447 38 2409 02 2411 synthomer plc annual report 2013  75  
group ﬁnancial statements
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 cgu’s 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 2012 11 and 12 2012 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 2012 2 and 5 2012 5 have been used for europe  north america and asia  rest of world respectively 
representing management’s best estimate of each cgu’s circumstances and these do not exceed the longterm growth  
rates for the markets concerned
there is no reasonable possible change in key assumptions that would lead to an impairment
of the net book value of goodwill at 31 december 2013 £705 million 2012 £705 million is located in the uk
14 acquired intangible assets
customer
relationships
£m
technology
£m
total
£m
cost
at 1 january 2013 1766 29 1795 
exchange adjustments 03 01 02
at 31 december 2013 1763 30 1793 
accumulated amortisation and impairment
at 1 january 2013 434 05 439 
exchange adjustments 08 – 08
amortisation charge for the year 264 03 267 
at 31 december 2013 690 08 698 
net book value
at 31 december 2013 1073 22 1095 
customer
relationships
£m
technology
£m
total
£m
cost
at 1 january 2012
recognised on acquisition 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 
amortisation charge for the year 255 03 258 
exchange adjustments 04 – 04
at 31 december 2012 434 05 439 
net book value
at 31 december 2012 1332 24 1356 76  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
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
cost 
at 1 january 2013 60 
exchange adjustments 01
additions 01 
at 31 december 2013 60 
accumulated amortisation and impairment
at 1 january 2013 54 
exchange adjustments 01
amortisation charge for the year 02 
at 31 december 2013 55 
net book value
at 31 december 2013 05 
software 
£m
cost 
at 1 january 2012 60 
exchange adjustments 01
additions 01 
at 31 december 2012 60 
accumulated amortisation and impairment
at 1 january 2012 51 
exchange adjustments –
amortisation charge for the year 03 
at 31 december 2012 54 
net book value
at 31 december 2012 06  synthomer plc annual report 2013  77  
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 
a 1 january 2013 434 53 170 3769 4426 
exchange adjustments – – 15 104 119
additions 07 – 34 308 349 
transferred to assets classiﬁed as held for sale 11 – – – 11
disposals 37 01 – 36 74
at 31 december 2013 393 52 189 3937 4571 
accumulated depreciation and impairment
at 1 january 2013 163 27 17 2223 2430 
exchange adjustments 01 – 02 41 44
depreciation charge for the year 19 01 05 165 190 
disposals – – – 36 36
at 31 december 2013 181 28 20 2311 2540 
net book value
at 31 december 2013 212 24 169 1626 2031 
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 
freehold land amounting to £37 million 2012 £37 million has not been depreciated 78  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
17 financial asset
the group disposed of its pharma chemicals business on 30 november 2011 part of the consideration agreed with the  
buyer totalling 100 million 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 financial asset and within the group’s deﬁnition of net borrowings
the amount of £58 million 2012 £56 million 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 2013
18 investment in joint ventures
2013
£m
2013
£m
2012
£m
2012
£m
at 1 january
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
share of income 622 588
share of expenses including special items 588 553
34 35
tax 02 02
32 33
dividends paid during the year 38 32
exchange adjustments 03 05
share of loss after dividends 09 04
at 31 december
share of noncurrent assets 70 82
share of current assets 187 190
share of current liabilities 127 133
share of noncurrent liabilities – –
130 139
a list of principal subsidiary undertakings and joint ventures is given on page 105
19 inventories
2013
£m
2012 
£m
raw materials and consumables 302 306 
finished goods 492 475 
794 781 
the value of stock written off during the year was £01 million 2012 £08 million
the cost of inventory recognised as an expense and included in cost of sales amounted to £7637 million 2012 £8190 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  synthomer plc annual report 2013  79  
group ﬁnancial statements
20 trade and other receivables
2013
£m
2012 
£m
trade receivables 1224 1200 
amounts owed by joint ventures 06 06 
other receivables 89 167 
prepayments and accrued income 14 17 
1333 1390 
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
2013
£m
2012 
£m
not yet due 976 987 
0 – 60 days overdue 263 203 
61 – 120 days overdue 12 28 
over 120 days due 25 34 
1276 1252 
less provision for impairment 52 52
1224 1200 
provision for impairment of receivables
2013
£m
2012 
£m
at 1 january 52 44 
exchange adjustments 01 03 
creditcharge for the year 02 10 
amounts written off as uncollectible 01 05
at 31 december 52 52 
the provision is predominantly against overdue trade receivables 80  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
21 cash and borrowings
2013
£m
2012 
£m
current borrowings
bank loans
bank loans and overdrafts – 04 
700 million 578 guaranteed senior unsecured notes due 2 september 2014 424 – 
424 04 
noncurrent borrowings
bank loans
unsecured £1500 million multicurrency term loan facility expiring 2015 1485 1454 
other loans
700 million 578 guaranteed senior unsecured notes due 2 september 2014 – 433 
220 million 598 guaranteed senior unsecured notes due 2 september 2016 133 136 
1618 2023 
less capitalised costs 09 19
1609 2004 
 in aggregate £557 million associated with which is the currency impact of derivatives of £49 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 2013 the group had available £600 million 2012 £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 2013
bank overdrafts – – – – –
bank loans – – 1485 – 1485
loan notes – 557 – – 557
capitalised costs 09 – – – 09
09 557 1485 – 2033
cash and cash equivalents 590
financial asset – see note 17 58
net borrowings 1385
deduct special item fair value adjustment 49
add special item nonrecourse factoring –
net borrowings underlying performance 1336 synthomer plc annual report 2013  81  
group ﬁnancial statements
sterling
£m
us dollar
£m
euro
£m
other
£m
total
£m
31 december 2012
bank overdrafts 04 – – – 04
bank loans – – 1454 – 1454
loan notes – 569 – – 569
capitalised costs 19 – – – 19
15 569 1454 – 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
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 it is management’s intention to maintain the underlying net 
borrowings to ebitda metric to between one and two times
2013 2012 
net borrowings – underlying performance £m 1336 1558
ebitda £m – see note 5 1240 1296
underlying net borrowings  ebitda 11 12 82  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
22 financial instruments continued
2013 2012
loans and
receivables
£m
fair value
through
proﬁt
or loss
£m
loans and
receivables
£m
fair value
through
proﬁt
or loss
£m
financial assets
trade and other receivables excluding prepayments 1319 – 1373 –
cash and cash equivalents 590 – 537 –
financial asset 58 – 56 –
derivatives at fair value – 64 – 87
1967 64 1966 87
amortised
cost
£m
derivative
instruments in
designated
hedge
accounting
£m
amortised
cost
£m
derivative
instruments in
designated
hedge
accounting
£m
financial liabilities
loan notes 557 – 569 –
bank loans and overdrafts 1485 – 1439 –
derivatives at fair value – – – 43
trade and other payables excluding accruals 1349 – 1451 –
3391 – 3459 43
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
2013
£m
2012
£m
2013
£m
2012
£m
fair value of ﬁnancial assets
trade and other receivables excluding prepayments 1319 1373 1319 1373
cash and cash equivalents 590 537 590 537
financial asset 58 56 58 56
derivatives at fair value 64 87 64 87
2031 2053 2031 2053
fair value of ﬁnancial liabilities
loan notes 557 569 572 596
bank loans and overdrafts 1485 1439 1485 1435
derivatives at fair value – 43 – 43
trade and other payables excluding accruals 1349 1451 1349 1451
3391 3502 3406 3525
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 synthomer plc annual report 2013  83  
group ﬁnancial statements
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 2012 none
impact on income statement
changes in the fair value of derivative contracts amounting to £12 million have been debited to the income statement in the 
year 2012 debit of £17 million these changes are shown separately as a special item in the consolidated income statement
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 ias 39 it has concluded that the costs involved in meeting these 
requirements cannot be justiﬁed and therefore ias 39 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 cash flow hedges as permitted 
by ias 39 these contracts matured on 31 december 2013 and have not been renewed
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 multi 
currency term loan facility have been accounted for as net investment hedges as permitted by ias 39
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 2013 was
2013 2012
floating rate
borrowings
£m
fixed rate
borrowings
£m
total
borrowings
£m
floating rate
borrowings
£m
fixed rate
borrowings
£m
total
borrowings
£m
sterling 199 300 499 193 300 493 
euro 1485 – 1485 179 1275 1454 
us dollar – – – – – – 
other – – – – – – 
1684 300 1984 372 1575 1947 
cash and cash equivalents 590 537
financial asset – see note 17 58 56
add special item nonrecourse factoring – 204
net borrowings underlying performance 1336 1558
the effective interest rate for the year was 47 2012 47 84  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
22 financial instruments continued
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
2013 2012
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 03 – 02 06 – 
euro interest rate  10 15 15 – 04 04 12
us interest rate  10 – 07 – – 13 – 
foreign currency sensitivity analysis
euro exchange rate  10 – – 23 04 04 33 
us dollar exchange rate  10 – 04 – – 07 – 
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 2013 
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
2013 2012
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 1349 ––– 1349 1451 ––– 1451 
variable interest  
 rate instruments
 bank loans  
 and overdrafts 35 1494 –– 1529 39 34 1462 – 1535 
fixed interest  
 rate instruments
 loan notes 457 08 141 – 606 33 466 153 – 652
1841 1502 141 – 3484 1523 500 1615 – 3638 synthomer plc annual report 2013  85  
group ﬁnancial statements
the following table details the remaining contractual maturity for nonderivative ﬁnancial assets
2013 2012
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 1319 ––– 1319 1373 ––– 1373
financial asset 58 ––– 58 – 56 –– 56 
variable interest rate  
 instruments 
 cash and cash  
 equivalents 590 ––– 590 537 ––– 537 
1967 ––– 1967 1910 56 –– 1966 
the following table details the remaining contractual maturity for its derivative ﬁnancial instruments
2013 2012
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
cross currency  
 swaps 12 02 01 – 15 14 10 03 – 27
foreign exchange  
 forward contracts ––––– 07 –– – 07
12 02 01 – 15 66 10 03 – 79
in accordance with ifrs 7 the above table shows undiscounted cash ﬂows in contrast ias 39 requires these items to be 
carried in the balance sheet at fair value which is based on discounted cash ﬂows 
23 asset classiﬁed as held for sale
2013
£m
2012 
£m
freehold land 11 – 
the group owns approximately 1900 acres of agricultural land in malaysia on which is currently operated a palm oil and 
natural rubber plantation 
the land is owned by kind action sdn bhd which is a wholly owned subsidiary of revertex malaysia sdn bhd which has 
a 30 minority interest
the directors decided during the year to dispose of this land excluding the 300 acres immediately surrounding the 
manufacturing facilities on the open market
at 31 december 2013 contracts have been exchanged on 700 acres for a total consideration of approximately £27 million
these disposals are subject to regulatory approval which may take up to 2 years 86  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
24 trade and other payables
2013
£m
2012 
£m
amount due within one year
trade creditors 1098 1219 
other creditors 251 232 
accruals 261 397 
1610 1848 
average trade creditor days in 2013 was 60 2012 66 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
25 post retirement beneﬁt obligations
charge to income statement in respect of the group’s pension schemes
2013 2012 restated
uk
£m
overseas
£m
total
£m
uk
£m
overseas
£m
total
£m
deﬁned beneﬁt 37 26 63 41 26 67
deﬁned contribution 13 34 47 15 36 51
50 60 110 56 62 118
 
amounts recognised in the statement of comprehensive income
2013 2012 restated
uk
£m
overseas
£m
total
£m
uk
£m
overseas
£m
total
£m
actuarial gains and losses 44 00 44 109 56 165
amount included in the balance sheet arising from the group’s deﬁned beneﬁt scheme obligation
2013 2012
uk
£m
overseas
£m
total
£m
uk
£m
overseas
£m
total
£m
present value of funded deﬁned beneﬁt  
 obligation 3159 596 3755 3015 568 3583
fair value of scheme assets 2556 70 2626 2320 66 2386 
net liability arising from deﬁned beneﬁt  
 obligation 603 526 1129 695 502 1197
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 schemes are held separately from those of the companies concerned
deﬁned beneﬁt scheme
the deﬁned beneﬁt scheme is administered by a separate fund that is legally separated from the company 
the trustees of the pension fund are required by law to act in the interest of the fund and of all relevant stakeholders in 
the scheme the trustees of the pension are responsible for the investment policy with regard to the assets of the fund
a full actuarial valuation was carried out as at 6 april 2012 and updated to 31 december 2013 by a qualiﬁed actuary
the group has agreed that it will aim to eliminate the pension plan deﬁcit over the next 8 years synthomer plc annual report 2013  87  
group ﬁnancial statements
the scheme is exposed to a number of risks the most signiﬁcant of which are detailed below
asset return risk the plan liabilities are calculated using a discount rate set with reference to corporate bond yields 
if plan assets underperform this yield this will increase the deﬁcit the scheme holds a signiﬁcant 
proportion of equities which are expected to outperform corporate bonds on the longterm while 
providing volatility and risk in the shortterm 
interest rate risk a decrease in corporate bond yields will increase plan liabilities although this will be partially  
offset by an increase in the value of the plans’ bond holdings
longevity risk the majority of the plans’ obligations are to provide beneﬁts for the life of the member  
so increases in life expectancy will result in an increase in the plans’ liabilities 
the risk relating to beneﬁts to be paid to the dependents of scheme members widow and orphan beneﬁts is reinsured  
by an external insurance company
the major assumptions used for the purposes of the actuarial valuations were as follows
2013 2012 
rate of increase in pensions in payment 330 300
rate of increase in pensions in deferment 230 200
discount rate 455 460
inﬂation assumption 330 300
assumptions regarding future mortality are based on actuarial advice in accordance with published statistics these assumptions 
translate into an average life expectancy in years for a pensioner retiring at 65 as follows
2013 2012 
retiring today
males 875 874
females 899 898
retiring in 20 years
males 892 891
females 919 918
signiﬁcant actuarial assumptions for the determination of the deﬁned beneﬁt obligation are discount rate and mortality 
the sensitivity analysis below has been determined based on reasonably possible changes of the assumptions occurring  
at the end of the reporting period assuming that all other assumptions are held constant
assumption change in assumption impact on scheme liabilities
discount rate increasedecrease by 1 decreaseincrease by £45 million
rate of mortality increase by 1 year increase by £9 million
the above senstivities are based on a change of assumption while holding all other assumptions constant in practice this is 
unlikely to occur and changes in some of the assumptions may have some correlation when calculating the sensitivity of the 
deﬁned beneﬁt obligation to signiﬁcant actuarial assumptions the same method present value of the deﬁned beneﬁt obligation 
calculated with the projected unit credit method at the end of the reporting period has been applied as when calculating the 
pension liability recognised within the balance sheet  88  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
25 post retirement beneﬁt obligations continued
the movements in the deﬁned beneﬁt obligation over the year is as follows
2013 2012
present value
 of funded
 deﬁned beneﬁt
 obligation
£m
fair value of
 scheme assets
£m
net liability 
arising from 
deﬁned beneﬁt 
obligation
£m
present value 
of funded 
deﬁned beneﬁt 
obligation
£m
fair value of
scheme assets
£m
net liability 
arising from 
deﬁned beneﬁt
obligation
£m
at 1 january 3015 2320 695 2721 1982 739
current service cost 05 – 05 05 – 05
interest expenseincome 139 107 32 131 95 36
amounts recognised in income in respect  
 of deﬁned beneﬁt schemes 144 107 37 136 95 41
remeasurement
 return on plan assets excluding
  amounts included in interest
 expenseincome – 164 164 – 167 167 
 gainslosses from changes in ﬁnancial
 assumptions 120 – 120 276 – 276
amounts recognised in the statement of  
 comprehensive income 120 164 44 276 167 109
contributions
 employers 05 80 85 05 189 194 
payments from plans
 beneﬁt payments 115 115 – 113 113 – 
at 31 december 3159 2556 603 3015 2320 695
plan assets are comprised as follows
2013
£m
2012 
£m
equities 1205 1192 
bonds 1046 808 
property 222 201 
cash 83 119 
total fair value of assets 2556 2320 
all investments in equities bonds and property are quoted
the weighted average duration of the beneﬁt obligation at the end of the reporting period is 155 years 2012 160 years
contributions from the sponsoring companies are expected to be £80 million in 2014 synthomer plc annual report 2013  89  
group ﬁnancial statements
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 £513 million 
2012 £477 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 2013
the largest of these schemes accounts for £383 million 2012 £378 million of the deﬁcit at 31 december 2013  
the major assumption used in the actuarial valuation of this scheme are
2013 2012 
rate of increase in salaries 300 300
rate of increase in pensions 200 200
discount rate 380 380
mortality assumptions
investigations have been carried out within the past three years into the mortality experience of the group’s deﬁned beneﬁt 
scheme these investigations concluded that the current mortality assumptions include sufﬁcient allowance for future 
improvements in mortality rates the assumed life expectations on retirement at age 65 are
2013 2012 
retiring today 
males 860 858
females 910 908
retiring in 20 years
males 893 891
females 942 941
the major assumption used in the valuation of the other overseas schemes do not differ signiﬁcantly from the above
the movements in the deﬁned beneﬁt obligation over the year is as follows
2013 2012
present value
 of funded
 deﬁned beneﬁt
 obligation
£m
fair value of
 scheme assets
£m
net liability 
arising from 
deﬁned beneﬁt 
obligation
£m
present value 
of funded 
deﬁned beneﬁt 
obligation
£m
fair value of
scheme assets
£m
net liability 
arising from 
deﬁned beneﬁt
obligation
£m
at 1 january 568 66 502 500 60 440
current service cost 07 – 07 05 – 05
interest expenseincome 21 02 19 22 01 21
amounts recognised in income in respect  
 of deﬁned beneﬁt schemes 28 02 26 27 01 26
remeasurement
 return on plan assets excluding
 amounts included in interest
 expenseincome – 01 01 – 06 06 
 gainslosses from changes in ﬁnancial
 assumptions 01 – 01 62 – 62
amounts recognised in the statement of  
 comprehensive income 01 01 00 62 06 56
contributions less payments from plans 15 – 15 12 – 12 
exchange adjustments 14 01 13 09 01 08 
at 31 december 596 70 526 568 66 502 90  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
26 share capital
2013
£m
2012 
£m
issued and fully paid
339880769 2012 339880769 ordinary shares of 10 pence each 340 340 
ordinary shares carry no right to ﬁxed income 
share options
as at 31 december 2013 the following options were outstanding
executive share options number option price
exercisable between 20132019 85272 a
exercisable between 20132020 751933 b
exercisable between 20142021 1252443 c
exercisable between 20152022 833499 d
exercisable between 20162023 1087019 e
a options granted under the performance share plan with a total exercise price of £1
b options granted under the performance share plan with a total exercise price of £11
c options granted under the performance share plan with a total exercise price of £0
d options granted under the performance share plan with a total exercise price of £0
e options granted under the performance share plan with a total exercise price of £0
27 reconciliation of operating proﬁt to cash generated from operations
2013
£m
2012
restated
£m
operating proﬁt – continuing operations 750 771
less share of proﬁts of joint ventures 32 33
718 738
adjustments for
 depreciation underlying 190 181
 amortisation underlying 02 03
 amortisation special items 267 258
 restructuring and site closure – cash costs 14 60
 – noncash costs – 07
 sharebased payments 08 11
 proﬁt on sale of ﬁxed assets 03 01
acquisition costs cash spent in the year – 04
cash impact of restructuring and site closure 38 114
ias 19 interest charge 51 57
pension funding in excess of ias 19 charge 36 138
increase in inventories 33 59
decrease in trade and other receivables 34 48
decrease in trade and other payables 147 08
cash generated from operations 925 925
reconciliation of movement in working capital
increase in inventories 33 59
decrease in trade and other receivables 34 48
decrease in trade and other payables 147 08
movement in working capital 146 19
add back reduction in factored invoices 204 06
movement in working capital underlying 58 13 synthomer plc annual report 2013  91  
group ﬁnancial statements
28 analysis of changes in net borrowings
1 january 
2013
£m
cash inﬂows 
outﬂows
£m
exchange 
and other 
movements
£m
31
 december
 2013
£m
cash and cash equivalents 537 86 33 590 
current borrowing – bank overdrafts 04 04 – – 
533 90 33 590 
financial asset 56 – 02 58 
current borrowings – 447 23 424
noncurrent borrowings 2004 447 52 1609
net borrowings 1415 90 60 1385
deduct special item fair value adjustment 61 – 12 49 
1354 90 72 1336
add special item factoring 204 204 – – 
net borrowings underlying performance 1558 294 72 1336
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
29 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
2013
£m
2012
£m
shortterm employee beneﬁts 32 36 
post retirement beneﬁt obligations 04 03 
sharebased payments 05 15 
41 54 
the key management ﬁgures given above include the directors and members of the executive committee
30 commitments
2013
£m
2012
£m
capital expenditure authorised but not provided for in the ﬁnancial statements
contracted 69 137 
2013
£m
2012
£m
commitments under operating leases are as follows
payments under operating leases which fall due
within 1 year 33 34 
between 2 and 5 years 67 74 
after 5 years 140 166 
240 274 
31 contingent assets contingent liabilities and guarantees
guarantees of the parent company in respect of bank and other facilities of subsidiaries and joint ventures totalled £55 million 
2012 £57 million
other guarantees and contingent liabilities of the group amount to £04 million 2012 £03 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 92  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
32 sharebased payments
executive share option schemes
details of the share option schemes available to senior management are included in the remuneration report  
on pages 32 to 48
options
2013
weighted
av exercise
price £
2013
options
2012
weighted
av exercise
price £
2012
outstanding at 1 january 5527087 – 7515639 – 
granted during the period 1087019 – 866456 – 
exercised during the period 2570983 – 2793242 – 
lapsed during the period 32957 – 61766 – 
outstanding at 31 december 4010166 – 5527087 – 
exercisable at 31 december 374181 736412 
for options outstanding as at 31 december 2013 the exercise price was £nil and the weighted average remaining contractual 
life was 46 years 2012 42 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 2013 the trust held 331502 ordinary shares 2012 331502 in the company with a market value  
of £08 million 2012 £06 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
33 restatement on adoption of ias 19 revised
ias 19 revised “employee beneﬁts” was amended in june 2011 and is effective for ﬁnancial years beginning on or after 
 1 january 2013 the company has implemented ias 19 revised in the year ended 31 december 2013 the speciﬁc impact of 
this on the income statement is a change in the calculation of the interest income on plan assets this was previously based on 
the expected returns on the various asset types held within the investment portfolio it is now calculated at the same rate used 
to calculate the interest expense on the pension liability being a discount rate derived from corporate bonds the difference 
between this calculated return and the actual return is reported as an actuarial gainloss through reserves 
in addition as part of the implementation of ias 19 revised the group has chosen to classify the interest expense on the net 
pension liability within ﬁnance costs the expected return on plan assets and interest expense on the pension liability were 
previously reported as part of operating expenses 
the change in accounting policy has been applied retrospectively to the comparator periods 
there is no signiﬁcant change to the net pension liability or to net assets as a result of the adoption of ias 19 revised  
as a result no restatement of the balance sheet is required 
restatement of prior full year period to 31 december 2012 
the effect of adopting ias 19 revised on the group’s proﬁt is to reduce both underlying and total reported proﬁt after tax  
by £35 million for the prior fullyear ended 31 december 2012 in addition £22 million of expenses relating to the expected 
return on plan assets and interest expense on the pension liability previously reported within operating expenses have been 
reclassiﬁed to ﬁnance costs  synthomer plc annual report 2013  93  
group ﬁnancial statements
the full impact on the income statement is set out in the tables below 
consolidated income statement
year ended 31 december 2012
as originally 
reported
£m
change in 
accounting 
policy
£m
restated
£m
underlying basis
europe  north america 980 22 1002
asia  rest of world 191 – 191
unallocated corporate costs 81 – 81
operating proﬁt 1090 22 1112
finance costs 109 57 166
proﬁtloss before taxation 981 35 946
taxation 217 – 217
proﬁtloss for the year 764 35 729
earnings per share – basic 220p 11p 209p 
earnings per share – diluted 216p 10p 206p 
year ended 31 december 2012
as originally 
reported
£m
change in 
accounting 
policy
£m
restated
£m
ifrs
europe  north america 704 22 726
asia  rest of world 126 – 126
unallocated corporate costs 81 – 81
operating proﬁt 749 22 771
finance costs 126 57 183
proﬁtloss before taxation 623 35 588
taxation 44 – 44
proﬁtloss for the year 579 35 544
earnings per share – basic 167p 11p 156p 
earnings per share – diluted 164p 10p 154p 
the impact on the statement of comprehensive income is as follows
consolidated statement of comprehensive income
year ended 31 december 2012
as originally 
reported
£m
change in 
accounting 
policy
£m
restated
£m
proﬁtloss for the year 579 35 544
actuarial lossesgains 200 35 165
gains on cash ﬂow hedges arising during the year 05 – 05
exchange differences on translation of foreign operations 81 – 81
gains on a hedge of a net investment taken to equity 01 – 01
tax relating to components of other comprehensive income 19 – 19
other comprehensive expenseincome for the year 256 35 221
total comprehensive income for the year 323 – 323 94  synthomer plc annual report 2013  
notes to the consolidated ﬁnancial statements 
continued
34 share price information
the middle market value of the listed ordinary shares at 31 december 2013 was 2545 pence during the year the market price 
ranged between 1774 pence and 2578 pence the latest ordinary share price is available on the financial times cityline service 
telephone 09058 171690 synthomer plc annual report 2013  95  
company ﬁnancial statements
independent auditor’s report 
to the members of synthomer plc
report on the parent company 
ﬁnancial statements
our opinion 
in our opinion the parent company ﬁnancial statements
• give a true and fair view of the state of the parent 
company’s affairs as at 31 december 2013
• 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
 this opinion is to be read in the context of what we say in 
the remainder of this report
what we have audited
the parent company ﬁnancial statements which are 
prepared by synthomer plc comprise
• the parent company balance sheet as at 31 december 
2013
• the notes to the parent company ﬁnancial statements 
which include a summary of signiﬁcant accounting policies 
and other explanatory information
the ﬁnancial reporting framework that has been applied  
in their preparation comprises applicable law and united 
kingdom accounting standards united kingdom generally 
accepted accounting practice
in applying the ﬁnancial reporting framework the directors 
have made a number of subjective judgements for example  
in respect of signiﬁcant accounting estimates in making such 
estimates they have made assumptions and considered 
future events
what an audit of ﬁnancial statements involves 
we conducted our audit in accordance with international 
standards on auditing uk  ireland “isas uk  ireland” 
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 synthomer annual report the ‘annual 
report’ to identify material inconsistencies with the audited 
parent company ﬁnancial statements and to identify any 
information that is apparently materially incorrect based on 
or materially inconsistent with the knowledge acquired by 
us in the course of performing the audit if we become aware 
of any apparent material misstatements or inconsistencies 
we consider the implications for our report
opinions on matters prescribed by the companies  
act 2006
in our opinion
• the information given in the strategic report and the 
directors’ report for the ﬁnancial year for which the parent 
company ﬁnancial statements are prepared is consistent 
with the parent company ﬁnancial statements
• the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance with  
the companies act 2006
other matters on which we are required to report  
by exception
adequacy of accounting records and information 
and explanations received
under the companies act 2006 we are required to report  
to you if in our opinion
• we have not received all the information and explanations 
we require for our audit or
• 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
we have no exceptions to report arising from this 
responsibility
directors’ remuneration
under the companies act 2006 we are required to report if 
in our opinion certain disclosures of directors’ remuneration 
speciﬁed by law have not been made we have no exceptions 
to report arising from this responsibility
other information in the annual report
under isas uk  ireland we are required to report to you 
if in our opinion information in the annual report is
• materially inconsistent with the information in the audited 
parent company ﬁnancial statements or
• apparently materially incorrect based on or materially 
inconsistent with our knowledge of the parent company 
acquired in the course of performing our audit or
• is otherwise misleading
we have no exceptions to report arising from this 
responsibility
responsibilities for the ﬁnancial statements 
and the audit
our responsibilities and those of the directors 
as explained more fully in the directors’ responsibilities 
statement set out on page 51 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  96  synthomer plc annual report 2013  
independent auditor’s report 
to the members of synthomer plc continued
our responsibility is to audit and express an opinion on the 
parent company ﬁnancial statements in accordance with 
applicable law and isas uk  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
other matter
we have reported separately on the group ﬁnancial 
statements of synthomer plc for the year ended 
31 december 2013
andrew latham senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
st albans
27 february 2014 synthomer plc annual report 2013  97  
company ﬁnancial statements
company balance sheet
31 december 2013
note
2013
£m
2012
£m
fixed assets
tangible ﬁxed assets 5 22 26 
investments 6 3022 2892 
3044 2918 
current assets
debtors 7 7370 7670 
cash at bank and in hand 156 49 
derivatives at fair value 64 87 
7590 7806 
creditors – amounts falling due within one year
borrowings 8 571 654
other creditors 10 1358 1211
1929 1865
net current assets 5661 5941 
total assets less current liabilities 8705 8859 
creditors – amounts falling due after more than one year
borrowings 8 1608 2004
net assets 7097 6855 
capital and reserves
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 4435 4193 
shareholders funds 7097 6855 
analysis of net borrowings
cash at bank and in hand 156 49 
borrowings due in less than one year 571 654
borrowings due after more than one year 1608 2004
net borrowings 2023 2609
deduct special item 49 61 
net borrowings underlying performance 8 1974 2548
the ﬁnancial statements of synthomer plc registered number 98381 on pages 97 to 104 were approved on 27 february 2014
a m whitﬁeld
d c blackwood
directors 98  synthomer plc annual report 2013  
notes to the company ﬁnancial statements
31 december 2013
1 accounting policies
the principal accounting policies are summarised below  
they have all been applied consistently throughout the year 
and the preceding year
the company has taken advantage of the exemption from 
preparing a cash ﬂow statement under the terms of frs1 
“cash flow statement” the cash ﬂows of the company are 
included in the synthomer plc group ﬁnancial statements
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 synthomer plc annual report 2013  99  
company ﬁnancial statements
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
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
in accordance with frs17 the company accounts for its contributions to the deﬁned beneﬁts 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 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 auditors’ remuneration
the audit fee of synthomer plc amounted to £4000 2012 £4000
3 proﬁt attributable to equity shareholders
uk gaap basis
2013
£m
2012 
£m
attributable to synthomer plc 484 3000 
as permitted by section 408 of the companies act 2006 no proﬁt and loss account is presented for synthomer plc
 the above has been calculated on a uk gaap basis as this is consistent with the continued presentation of synthomer plc’s accounts under uk gaap 
4 ordinary dividends
2013
pence per
share
2012
pence per
share
2013
£m
2012
£m
interim dividend 24 22 81 75 
proposed ﬁnal dividend 36 33 124 112 
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 100 synthomer plc annual report 2013 
notes to the company ﬁnancial statements 
continued
5 tangible ﬁxed assets
land and buildings
freeholds
£m
long
leaseholds
£m
plant and
equipment
£m
total
£m
cost or valuation
at 1 january 2013 28 01 18 47 
disposals – 01 18 19
at 31 december 2013 28 – – 28 
at cost – – – – 
at professional valuation in 1985 28 – – 28 
28 – – 28 
accumulated depreciation
at 1 january 2013 06 01 14 21 
eliminated on disposals – 01 14 15
at 31 december 2013 06 – – 06 
net book value
at 31 december 2013 22 – – 22 
net book value
at 31 december 2012 22 – 04 26 
properties included at valuation would have been stated on a historical cost basis at cost of £19 million 2012 £19 million  
and depreciation of £05 million 2012 £05 million
freehold land amounting to £18 million 2012 £18 million has not been depreciated
6 investments
subsidiaries
£m
joint
ventures
£m
other
investments
£m
total
£m
cost
at 1 january 2013 3397 05 01 3403 
additions 99 – – 99 
disposals 508 – – 508
hedge adjustment see below 31 – – 31 
at 31 december 2013 3019 05 01 3025 
provisions
at 1 january 2013 508 02 01 511 
released on disposals 508 – – 508
at 31 december 2013 – 02 01 03 
net book value
at 31 december 2013 3019 03 – 3022 
net book value
at 31 december 2012 2889 03 – 2892 
a list of principal subsidiary undertakings and joint ventures is given on page 105 synthomer plc annual report 2013  101  
company ﬁnancial statements
additions for the year represent an additional investment in ennismore limited a company incorporated in jersey  
a total amount of ¤115 million £99 million was invested 
the company has designated its euro denominated £150 million multi currency term loan facility of ¤1778 million  
see note 8 as a frs 26 fair value hedge against ¤1778 million its investment in ennismore limited 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
disposals during the year represent previously impaired nontrading companies which have been disposed of as part  
of a restructuring exercise
7 debtors
2013
£m
2012 
£m
amounts owed by subsidiaries 7369 7668 
other debtors 01 02 
7370 7670
8 borrowings
2013
£m
2012 
£m
current borrowings
bank loans
bank loans and overdrafts 146 654 
other loans
700 million 578 guaranteed senior unsecured notes due 2 september 2014 425 – 
571 654 
noncurrent borrowings
bank loans
unsecured £1500 million multicurrency term loan facility expiring 2015 1485 1454 
other loans
700 million 578 guaranteed senior unsecured notes due 2 september 2014 – 433 
220 million 598 guaranteed senior unsecured notes due 2 september 2016 133 136 
1618 2023 
less capitalised costs 10 19
1608 2004 
  in aggregate £558 million 2012 £569 million associated with which is the currency impact of derivatives of £49 million 2012 £61 million net £509 million 
2012 £508 million
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents 
at 31 december 2013 the company had available £600 million 2012 £600 million of undrawn committed borrowing facilities 
in respect of which all conditions precedent had been met  102 synthomer plc annual report 2013 
notes to the company ﬁnancial statements
continued
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 2013
bank loans and overdrafts 78 – 1553 1631 
loan notes – 558 – 558 
capitalised costs 10 – – 10
68 558 1553 2179 
cash and cash equivalents 156
net borrowings 2023 
deduct special item 49
net borrowings underlying performance 1974 
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 
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
2013 2012
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 7370 – 7370 7670 – 7670
cash and cash equivalents 156 – 156 49 – 49
derivatives at fair value – 64 64 – 87 87
7526 64 7590 7719 87 7806 synthomer plc annual report 2013  103  
company ﬁnancial statements
2013 2012
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 558 – 558 569 – 569
bank loans and overdrafts 1621 – 1621 2089 – 2089
trade and other payables excluding accruals 1323 – 1323 1150 – 1150
3502 – 3502 3808 – 3808
a fuller description of ﬁnancial instruments is included in note 22 of the consolidated ﬁnancial statements on page 81 to 85
10 other creditors
2013
£m
2012 
£m
amount due within one year
trade creditors – 06 
amounts owed to subsidiaries 1314 1135 
other taxation and social security – 01 
other creditors 09 08 
accruals and deferred income 35 61 
1358 1211
11 called up share capital
details of the companies share capital and outstanding share options are shown at note 26 of the consolidated ﬁnancial 
statements on page 90
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 2013 2305 08 09 4193 6515 
proﬁt for the year – – – 484 484 
dividends – – – 194 194
retained proﬁt for the year – – – 290 290 
sharebased payments – – – 48 48
at 31 december 2013 2305 08 09 4435 6757 
13 related party transactions
there were no related party transactions during the year 2012 none other than those in respect of key management 
compensation which are disclosed in note 29 of the consolidated ﬁnancial statements on page 91
14 guarantees and other ﬁnancial commitments
the company has given guarantees amounting to £55 million 2012 £57 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  104 synthomer plc annual report 2013 
notes to the company ﬁnancial statements 
continued
15 pension commitments continued
the pension charge for the year for the company amounted to £00 million 2012 £141 million 
a valuation under frs17 has not been performed at group level and therefore the deﬁcit calculated in accordance with ias 19 
of £603 million 2012 – £695 million is disclosed as a permitted alternative 
for details of the ias 19 valuation assumptions and movement in the year please refer to the uk pension scheme section  
of note 25 to the consolidated ﬁnancial statements on page 86 to 89
16 sharebased payments
for details of sharebased payments please refer to note 32 to the consolidated ﬁnancial statements on page 92 synthomer plc annual report 2013  105  
other information
principal subsidiaries and joint ventures
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 malaysia 70
acrylic and vinyl polymer dispersions
revertex malaysia sdn bhd malaysia 70
synthetic resin and emulsions natural rubber latices 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 polybutadine
synthomer middle east company saudi arabia 49

acrylic and vinyl resin emulsions
synthomer sae egypt 88
latex based compounds
synthomer sdn bhd malaysia 100
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 106  synthomer plc annual report 2013  
underlying performance a f
2013
£m
2012
 restated g
£m
2011
 restated g
£m
2010
 restated g
£m
2009
 restated g
£m
total sales 10549 11118 11168 5829 4669 
ebitda b 1240 1296 1172 613 547 
operating proﬁt c 1048 1112 984 510 445 
finance costs 147 166 162 112 133
proﬁt before taxation 901 946 822 398 313 
basic earnings per share 207p 209p 180p 133p 101p 
dividends per share 60p 55p 35p 26p na
dividend cover 35 38 51 51 na
net borrowings d 1336 1558 1643 634 880
capital expenditure e 391 392 242 106 87 
ifrs – continuing operations f
2013
£m
2012
 restated g
£m
2011
 restated g
£m
2010
 restated g
£m
2009
 restated g
£m
total sales 10549 11118 11168 5885 4781 
ebitda b 1240 1296 1172 613 547 
operating proﬁt c 750 771 563 600 465 
finance costs 159 183 195 86 177
proﬁt before taxation 591 588 368 514 289 
basic earnings per share f 142p 156p 90p 195p 106p 
dividends per share 60p 55p 35p 26p na
dividend cover 24 28 26 75 na
net borrowings d 1385 1415 1561 760 976
capital expenditure e 391 392 242 106 87 
a as presented in the consolidated income statement on page 56
b as deﬁned in the accounting policies at note 2 and reconciled in note 5
c as deﬁned in note 2 to the ﬁnancial statements on page 64
d as deﬁned in note 2 to the financial statements and reconciled in note 21
e as shown with the consolidated cash ﬂow statement
f 2009 and 2010 ﬁgures exclude pharma chemicals segment
g restated for impact of ias 19 revised
fiveyear ﬁnancial summary  synthomer plc annual report 2013  107  
notes
other information 108  synthomer plc annual report 2013  
notes designed and produced by instinctif partners wwwinstinctifcom
photograph on page 3 courtesy of peter wirtzaktiv wirtschaftszeitung
photograph on page 11 courtesy of topi raulo
printed by park communications on fsc
®
 certiﬁed paper park is an emas certiﬁed 
company and its environmental management system is certiﬁed to iso 14001  
 100 of the inks used are vegetable oil based 95 of press chemicals are recycled 
for further use and on average 99 of any waste associated with this production will 
be recycled this document is printed on heaven 42 a paper containing 100 virgin 
ﬁbre sourced from wellmanaged responsible fsc
®
 certiﬁed some pulp used in this 
product is bleached using an elemental chlorine free ecf process and some 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
contents
overview 
01 financial and commercial highlights
02 chairman’s statement
strategic report
04 our strategy 
05 our business model 
06 our products
07 our market focus
08 our locations
 10 our people
 12 chief executive ofﬁcer’s report
 15 financial review
 18 principal risks and uncertainties
20  corporate social 
responsibility report 
governance
24 directors and advisers
25 corporate governance
32 directors’ remuneration report
49 report of the directors
51  statement of directors’ 
responsibilities
group ﬁnancial statements
52 independent auditor’s report
56 consolidated income statement
57  consolidated statement  
of comprehensive income
57  consolidated statement  
of changes in equity
58 consolidated balance sheet
58 analysis of net borrowings
59  consolidated cash ﬂow statement
59  reconciliation of net cash ﬂow 
from operating activities to 
movement in net borrowings
60  notes to the consolidated 
ﬁnancial statements 
company ﬁnancial statements
95 independent auditor’s report
97 balance sheet
98  notes to the ﬁnancial statements 
other information
105  principal subsidiaries and  
joint ventures
106 fiveyear ﬁnancial summary
innovation excellence growth
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  leadin g inn o v ati on  
 i n aq ueo u s p ol yme rs
synthomer plc annual report 2013
synthomer plc
temple fields 
harlow
essex cm20 2bh  
uk
t 44 01279 436 211
f 44 01279 444 025
wwwsynthomercom
synthomer plc annual report 2013
excellence
innovation
growth
17585 instinctif 6541synthomer annual report cover awtp ev3indd   46 20032014   1911


Summary:
 12  synthomer plc annual report 2013  
divisional performance
we manage the group as two 
businesses ‘europe  north america’ 
ena and ‘asia  rest of world’  
arw the reported results are on  
an ‘origination basis’ meaning the 
business sales and operating proﬁts are 
reported based on where the product is 
manufactured ena accounted for 71 
of group sales and arw for 29 of 
group sales we export many specialty 
products from europe to asia looking 
at sales on a destination basis ena 
comprises 63 of group sales with 
arw accounting for 37 within the 
two businesses we approach the 
market through six strategic business 
unit segments “paper”  “carpet 
compounds and foam” ccf 
“construction and coatings” cc 
“functional polymers” fp 
“performance polymers” pp and 
“health and protection” hp – which 
includes our asian nitrile latex business
europe  north america ena
operating proﬁt in our ena business 
was down by 104 with aggregate 
volumes 25 lower
the economic situation in europe 
continued to impact demand 
particularly in our construction related 
segments which was most pronounced 
early in the year when poor weather 
resulted in soft demand in what is 
normally a seasonally strong period  
we have also seen a reduction in 
average unit cash margins
this margin impact has been most 
pronounced in our paper and ccf 
segments whilst declines in cc 
pp and fp were very modest
volumes for the year were lower across 
the construction related segments  
of cc pp  fp and ccf  despite the 
overall decline in the european paper 
market we saw some volume 
improvement in our paper segment 
increasing our share overall albeit  
on generally lower unit cash margins
overview
2013 was a challenging year for the 
group with underlying group operating 
proﬁt of £1048 million 58 below 
prior year
the general economic situation in 
europe with lower demand led to 
a lower ena operating proﬁt as we 
entered 2014 the operating environment  
in europe remained challenging 
encouragingly we saw recovery  
in our asian nitrile business come 
through ahead of our expectations  
in 2013 and overall operating proﬁt  
in asia and row was ahead
net of interest and a reduced tax rate 
earnings were down slightly on 2012
this was the ﬁrst year that underlying 
earnings have declined since 2006 
when we started the process of 
transforming the company into a 
focused specialty aqueous polymers 
business whilst this was disappointing 
we continued to make good overall 
progress during the year in improving 
the capability of the business to deliver 
future growth and maintain a tight 
control on costs 
the acquisition of polymerlatex three 
years ago was an important part of  
the transformation of the group into  
a focused specialty aqueous polymer 
group we have now effectively 
completed the work on delivering  
the integration synergies from the 
acquisition with the closure of the  
batley site in the uk
during the year we further strengthened 
the group’s executive management 
team with the recruitment of new 
regional vp’s for both asia and europe
i believe we are well placed for the 
future focused on aqueous polymers 
with 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
we saw clear evidence that our rate of 
innovation is improving with a number 
of patent ﬁlings during the year the new 
product launches from 2012 including 
new lithene
®
 ultra grew well during 
2013 we also launched two new nitrile 
grades during the year looking forward 
the quality of our innovation pipeline  
is encouraging and we believe we  
are well set for future growth we expect 
several new product launches during 
the coming year across our business 
including new products in nitrile latex
new products launched in the last 
5 years contributed over 12 of 2013 
group revenues we are conﬁdent of 
being able to improve this percentage 
and have a midterm target of sales 
from new products deﬁned as products 
launched in the preceding 5 years 
increasing to a level where they contribute 
20 of annual group revenues
on the investment front we 
commissioned two new nitrile latex  
lines in malaysia at the beginning of 
2013 our dispersion expansion in 
stallingborough to allow the closure  
of batley was completed in paper  
we completed the investment in 
biopolymer hybrid latex in finland  
and commenced investment in 
germany for the same and similar 
products we continued to invest  
in many smaller projects to improve  
the overall capability of our plants  
to drive our commercial and cost 
effectiveness in servicing our customer 
base we will be expanding our 
vietnamese and saudi arabian 
dispersions capacity during 2014 and 
are currently developing plans to further 
expand our nitrile latex capacity in asia
raw material price volatility was 
relatively low during the year compared 
to recent years albeit with a modest 
decline over the year this modest 
decline in input prices has lowered 
working capital requirements slightly  
and helped in the reduction of net debt 
to £1336 million
 
chief executive ofﬁcer’s report synthomer plc annual report 2013  13  
strategic report
“ we are well placed for the future focused on aqueous 
polymers with 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”
adrian whitﬁeld
chief executive ofﬁcer
a further 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 we have launched 
a new product range for chopped 
strand glass ﬁbre mat applications 
where our knowledge of textile binders 
has been effectively used in a new 
application area our new nitrile grade 
for examination gloves was launched to 
the market which offered a signiﬁcant 
improvement in ﬁlm strength to support 
the market trend of lower glove weights 
this was combined with a versatile 
performance on the glove dipping line 
giving our customers process and 
formulation ﬂexibility market acceptance 
was extremely positive and by the end 
of the year the new grade was the 
biggest selling product in the synthomer 
range further development work to 
extend the product line is ongoing 
adrian whitﬁeld
chief executive ofﬁcer
27 february 2014
after reporting ena volumes down 
51 in the ﬁrst half of the year demand 
generally remained soft in the second 
half of the year as the difﬁcult economic 
conditions in europe continued to affect 
performance overall volumes in the 
second half of the year were similar 
to prior year with the volume declines 
in the construction related segments 
predominantly occurring in the ﬁrst half 
of the year
there were multiple product launches 
in ena during the year two new 
biopolymer hybrid products were 
launched to the coated paper market 
based on our new technology platform 
to optimise performance and cost 
a new lithene
®
 ultra grade was 
introduced to the market in a niche 
encapsulation area which was enabled 
by our improved low voc capability 
market introductions for highsolids 
sbr have been made for the us asphalt 
market and for foam applications that 
meet the speciﬁc demands in china 
a number of other products are in the 
initial commercialisation phase for 
example in wood coatings pressure 
sensitive adhesives and ﬂooring 
adhesive segments where we expect 
to see full market launch next year
ena is our platform for cash generation 
to drive future global growth we have 
worked hard since the polymerlatex 
acquisition to create an optimised 
business in europe with the closure 
of three plants and the delivery of 
substantial cost reductions which have 
positioned us well to deal with the 
economic situation however ongoing 
cost management remains a key focus  
of the group and we have launched  
a programme comprising a broad range 
of further improvements which will help 
support performance during 2014 and 
2015 the programme will reduce costs 
in the business by ¤10 million per 
annum by the end of 2015 critical 
elements in delivering this will be 
increased process and energy efﬁciency 
productivity improvements and 
optimised systems across all functions 
we anticipate cash cost of circa 
¤15 million for the implementation of 
this programme of which ¤5 million 
will be capex
asia  rest of world arw 
operating proﬁt in our arw segment was 
higher by 209 on 82 higher volumes
since we reported on the turbulence in 
the nitrile market half way through 2012 
the business having stabilised in the 
second half of 2012 developed ahead 
of our expectations during 2013 we 
expect to see supply demand tighten 
during 2014 with a further improvement 
in proﬁtability
the nonnitrile business has seen  
good demand as we exited the year 
we experienced a slight deterioration  
in the competitive environment in 
southeast asia as a competitor 
prepared to bring new dispersion 
capacity in malaysia on line to service 
the region
overall we continue to see good 
prospects for the nonnitrile business 
in asia expansion in the region is a core 
part of our strategy and we will bring  
on further capacity in middle east and 
vietnam in 2014 we also continue to 
pursue opportunities for growth in the 
region through acquisition
europe  north america ena asia  rest of world arw
underlying – as reported
sales £m
2012
2013 7448
7969
underlying – as reported
sales £m
2012
2013 3101
3149
operating profit £m
2012
2013 898
1002
volumes ktes
2012
2013 8055
8259
operating profit £m
2012
2013 231
191
volumes ktes
2012
2013 3762
3477
  underlying performance excludes special items as shown on the consolidated income statement 14  synthomer plc annual report 2013  
operating efﬁciently
synthomer was one of the ﬁrst companies to 
sign the uk chemical industries association’s 
sustainable development principles as part 
of this commitment we strive to improve our 
environmental performance year on year
to help the company achieve this objective 
a comprehensive performance monitoring 
structure has been in place for over 10 years 
and resulted in a steady improvement of  
our environmental performance to continue 
this trend and reduce speciﬁc energy 
consumption consumption per ton 
synthomer has begun implementing 
a comprehensive energy management 
system ems
since 2011 synthomer has undertaken 
a scheme to establish ems to meet  
the iso50001 standard at a number  
of its european sites as a result our 
site in langelsheim germany acquired 
the iso50001 accreditation in 2012  
this success has led the way for our three 
production sites labs and ofﬁces in marl  
to work towards achieving the standard
the marl site began work on achieving  
the iso50001 accreditation in 2012 
implementing a number of projects designed 
to improve efﬁciency one of the key projects 
involved the installation and optimisation  
of a new stripper for the puriﬁcation of sbr 
latex as a key part of the energy savings 
the new stripping process is much more 
efﬁcient and allows signiﬁcant savings in 
steam and electrical energy eg to run 
pumps the steam consumption of the  
plant using the new stripper has reduced  
by over 23 this has resulted in annual 
savings of 16000 mwh enough energy to 
heat 800 terraced houses for an entire year 
this initiative is one of many which focus  
on improving operational efﬁciency and have 
a positive impact on synthomer’s operational 
and ﬁnancial performance
excellence
800
a new stripping process 
results in energy savings 
equivalent to the  
annual consumption  
of 800 houses
excellence
growth
innovation