yule catto  co plc  annual report 2010
yule catto  co plc
temple fields
harlow
essex cm20 2bh
uk
t 44 01279 442 791
f 44 01279 641 360
wwwyulecattocom
yule catto  co plc
annual report
for the year ended 31 december 2010
being part of 
all our lives introduction business review governance group financial statements company financial statements other information
financial highlights 01 
group overview 02 
yule catto – a world class business 03 
chairman’s statement 04 
chief executive’s report  06 
 polymer chemicals  06 
 pharma chemicals 10 
 impact chemicals 10 
 financial review 12 
 corporate social responsibility report 14
independent auditors’ report 73 
company balance sheet 74 
notes to the company financial statements 75 
independent auditors’ report 35 
consolidated income statement 36 
consolidated statement of comprehensive income 37 
consolidated statement of changes in equity 37 
consolidated balance sheet 38 
consolidated cash flow statement 39 
notes to the consolidated financial statements 40 
directors and advisers 22 
report of the directors 23 
corporate governance 26 
directors’ remuneration report 30 
statement of directors’ responsibilities 34 
principal subsidiaries and joint ventures 82 
five year financial summary 83 
notice of meeting 84 
the group delivered a 19 
improvement in underlying 
profit before tax and achieved 
a further substantial reduction 
in its debt over the course  
of the year
yule catto  co plc
annual report and accounts 2010 85
introduction business review governance group financial statements company financial statements other information
note 2 for this purpose the time of receipt will be taken to be the  
time as determined by the time stamp applied to the message by  
the crest application host from which the issuer’s agent is able to 
retrieve the message by enquiry to crest in the manner prescribed by 
crest after this time any change of instructions to proxies appointed 
through crest should be communicated to the appointee through 
other means 
10  crest members and where applicable their crest sponsors 
or voting service providers should note that euroclear uk  ireland 
limited does not make available special procedures in crest for  
any particular message normal system timings and limitations will 
therefore apply in relation to the input of crest proxy instructions  
it is the responsibility of the crest member concerned to take 
or if the crest member is a crest personal member or sponsored 
member or has appointed a voting service provider to procure that 
his crest sponsor or voting service providers takes such action 
as shall be necessary to ensure that a message is transmitted by 
means of the crest system by any particular time in this connection 
crest members and where applicable their crest sponsors or 
voting system providers are referred in particular to those sections  
of the crest manual concerning practical limitations of the crest 
system and timings 
11  the company may treat as invalid a crest proxy instruction in the 
circumstances set out in regulation 355a of the uncertificated 
securities regulations 2001 
12  any corporation which is a member can appoint one or more 
corporate representatives who may exercise on its behalf all of its 
powers as a member provided that they do not do so in relation  
to the same shares 
13  under section 527 of the companies act 2006 members meeting 
the threshold requirements set out in that section have the right to 
require the company to publish on a website a statement setting  
out any matter relating to i the audit of the company’s accounts 
including the auditor’s report and the conduct of the audit that are 
to be laid before the annual general meeting or 
  ii any circumstance connected with an auditor of the company 
ceasing to hold office since the previous meeting at which annual 
accounts and reports were laid in accordance with section 437  
of the companies act 2006 the company may not require the 
shareholders requesting any such website publication to pay its 
expenses in complying with sections 527 or 528 of the companies 
act 2006 where the company is required to place a statement on 
a website under section 527 of the companies act 2006 it must 
forward the statement to the company’s auditor not later than the 
time when it makes the statement available on the website the 
business which may be dealt with at the annual general meeting 
includes any statement that the company has been required under 
section 527 of the companies act 2006 to publish on a website
 
14  any member attending the meeting has the right to ask questions  
the company must cause to be answered any such question relating 
to the business being dealt with at the meeting but no such answer 
need be given if a to do so would interfere unduly with the 
preparation for the meeting or involve the disclosure of confidential 
information b the answer has already been given on a website in the 
form of an answer to a question or c it is undesirable in the interests 
of the company or the good order of the meeting that the question  
be answered 
15  a copy of this notice and other information required by  
section 311a of the companies act 2006 can be found at  
wwwyulecattocom
designed and produced by the college wwwthecollegeukcom
notes to the notice of meeting
1  members are entitled to appoint a proxy to exercise all or any  
of their rights to attend and to speak and vote on their behalf at  
the meeting a shareholder may appoint more than one proxy in 
relation to the annual general meeting provided that each proxy  
is appointed to exercise the rights attached to a different share or 
shares held by that shareholder a proxy need not be a shareholder 
of the company a proxy form which may be used to make such 
appointment and give proxy instructions accompanies this notice 
2  to be valid any proxy form or other instrument appointing a proxy 
must be received by post or during normal business hours only  
by hand at computershare investor services plc the pavilions 
bridgwater road bristol bs99 6zy or at the electronic address 
provided in the proxy form in each case no later than 48 hours before 
the time appointed for holding the meeting or any adjourned meeting 
3  the return of a completed proxy form other such instrument or any 
crest proxy instruction as described in paragraph 9 below will 
not prevent a shareholder attending the annual general meeting 
and voting in person if heshe wishes to do so 
4  any person to whom this notice is sent who is a person nominated 
under section 146 of the companies act 2006 to enjoy information 
rights a ‘nominated person’ may under an agreement between 
himher and the shareholder by whom heshe was nominated have 
a right to be appointed or to have someone else appointed as a 
proxy for the annual general meeting if a nominated person has no 
such proxy appointment right or does not wish to exercise it heshe 
may under any such agreement have a right to give instructions to 
the shareholder as to the exercise of voting rights 
5  the statement of the rights of shareholders in relation to the 
appointment of proxies in paragraphs 1 and 2 above does not apply 
to nominated persons the rights described in these paragraphs 
can only be exercised by shareholders of the company 
6  to be entitled to attend and vote at the annual general meeting 
and for the purpose of the determination by the company of the 
votes they may cast shareholders must be registered in the 
register of members of the company at close of business on 
tuesday 10 may 2011 or in the event of any adjournment on the 
date which is two days before the time of the adjourned meeting 
changes to the register of members after the relevant deadline 
shall be disregarded in determining the rights of any person to 
attend and vote at the meeting 
7  the company’s capital consists of 339880769 ordinary shares 
with voting rights 
8  crest members who wish to appoint a proxy or proxies through 
the crest electronic proxy appointment service may do so by 
using the procedures described in the crest manual crest 
personal members or other crest sponsored members and those 
crest members who have appointed a service providers should 
refer to their crest sponsor or voting service providers who will 
be able to take the appropriate action on their behalf 
9  in order for a proxy appointment or instruction made using the 
crest service to be valid the appropriate crest message  
a ‘crest proxy instruction’ must be properly authenticated in 
accordance with euroclear uk  ireland limited’s specifications 
and must contain the information required for such instruction as 
described in the crest manual available via wwweuroclearcom
crest the message regardless of whether it constitutes the 
appointment of a proxy or is an amendment to the instruction given 
to a previously appointed proxy must in order to be valid be 
transmitted so as to be received by the issuer’s agent id 3ra50 by 
the latest times for the receipt of proxy appointments specified in  yule catto  co plc
annual report and accounts 2010 01
introduction business review governance group financial statements company financial statements other information
financial highlights
underlying performance
a
ifrs
continuing operations
2010
£’000
2009
£’000
2010
£’000
2009
£’000
total sales
b
645791 532162 651480 543398 
ebitda
c
69503 64092 69503 64092 
operating profit 54885 49416 63006 21406 
profit before taxation 47045 39547 57811 7136 
earnings per share
g h
162p 133p 220p 26p 
dividends per share
d g
26p na 26p na
net borrowings
e
63370 88038 76044 97646 
cash generated from operations 42228 64499 42228 64499 
free cash flow before dividends
f
9825 39001 9825 39001
the above table represents the results of yule catto  co plc its subsidiaries and its share of joint ventures
a underlying performance excludes special items as shown on the consolidated income statement
b as defined in the accounting policies at note 2
c as defined in the accounting policies at note 2 and reconciled at note 36
d see note 11
e as shown on the consolidated balance sheet on page 38
f as shown within the consolidated cash flow statement on page 39
g as restated for rights issue – see note 37
h as restated – see note 12
underlying performance
the group’s management uses underlying performance to plan for control and assess the performance of the group underlying performance differs from the statutory 
ifrs performance as it excludes the effect of special items which are defined in note 2 the board’s view is that underlying performance provides more meaningful 
information for the group’s investors and so it is the primary focus of the group’s narrative reporting where appropriate statutory performance inclusive of special items  
is also described
   profit before taxation up 19 to 
£47 0 million 2009 £396 million
  polymers operating profit ahead  
by 10
   earnings per share up 22 at  
162 pence 2009 1 33 pence
   substantial reduction in net debt  
to £63 million 2009 £88 million
total sales
£646m
earnings per share
162p
profit before taxation
£470m
increase in profit before taxation
 19
 underlying performance yule catto  co plc
annual report and accounts 2010 02
group overview
divisions
 polymer chemicals 
key products
–  e m ul s i o n s
–  s y n th e ti c l a ti c e s
–  a dhe si v e s
–  natural rubber latex
–  l i qui d po l y b u t a d i e n e
–  p ol y v i n y l a l c oh ol
–  p o l y v i n y l a c e t a t e
–  alkyd and polyester resins
markets
–  su r f a c e c oa t i ngs
–  c on s t r uct i on
–  dipping – eg gloves
–  carpets and nonwoven
 impact chemicals 
key products
–  i n or g a n i c s p e c ia l it i e s
markets
–  c a t a ly s t pr e c u r s or s
–  f la m e r e t a rd a n ts
– iodates
 pharma chemicals 
key products
–  generic and ethical  
pharmaceutical actives
–  development and manufacture  
of clinical phase compounds
markets
–  generic and ethical drug  
manufacture
–  g e n e r i c dr u gs
the group delivered a 19 improvement in 
underlying profit before tax and achieved  
a further substantial reduction in its debt  
over the course of the year these results 
consolidate the considerable progress we 
have made over the last three years 
the highlight of the year was the 
acquisition of polymerlatex announced  
in december which will substantially 
enhance the group’s scale and growth 
opportunities yule catto  co plc
annual report and accounts 2010 03
introduction business review governance group financial statements company financial statements other information
yule catto – a world class business
principal subsidiaries and joint venture as listed on page 82 locations yule catto
belgium 01 synthomer sa mouscron 
china 02 yule catto asia ltd guangzhou 
egypt 03 synthomer sae sharkiya 
england 04 synthomer ltd batley 
 05 synthomer ltd harlow 
 06 synthomer ltd ossett
 07 synthomer ltd stallingborough 
 08 william blythe ltd accrington
germany 09 synthomer gmbh langelsheim
malaysia 10  revertex malaysia  synthomer  
sdn bhd kluang
mexico 11 uquifa mexico sacv cuernavaca
netherlands 12 synthomer bv hasselt 
 13 synthomer bv oss 
saudi arabia 14  synthomer middle east company 
dammam 
south africa 15  revertex chemicals pty ltd  
 synthomer south africa durban 
spain 16 uquifa sa barcelona 
 17 uquifa sa lliçà de vall 
 18 uquifa sa sant celoni 
vietnam 19  synthomer vietnam co ltd  
ho chi minh city
locations polymerlatex
finland 20 eka polymerlatex oy oulu
germany 21 polymerlatex gmbh marl
 22 polymerlatex gmbh worms
italy 23 polymerlatex srl filago
malaysia 24  polymerlatex sdn bhd pasir gudang
uae 25 polymerlatex gmbh dubai 
  the group announced the acquisition of polymerlatex 
on 13 december 2010 the acquisition was not 
complete at the date of the annual accounts
11
08
09
06
05
07
23
20
17 18
16
04
12
13
01 21
22
03
14
25
15
02
10
24
19 yule catto  co plc
annual report and accounts 2010 04
performance
2010 was a very good year for yule catto building on the 
strong improvement in group performance delivered in 2009
underlying group profit before tax increased by 19  
to £470 million and earnings rose by 22 to 162 pence  
per share net debt reduced further by £25 million to only  
£63 million in the last three years we have lowered our net  
debt by £107 million whilst improving earnings per share by 
62 despite the deep recession of 2009 
the group’s core business of polymers accounted for 85  
of group revenue in 2010 and 88 of divisional operating 
profits volumes were ahead in most areas of the business  
and operating profit increased by 10 a good result after  
the strong improvement of 27 we achieved in 2009 
our strategy in polymers remains focused on geographical 
expansion around existing business hubs further increasing  
our presence in emerging markets particularly in asia and in 
developing market sectors where our technology new product 
development and manufacturing capabilities give us a real 
competitive advantage we started construction of 15000 tonnes 
of new nitrile capacity during the year and we expect production 
from this expansion to commence in the first half of 2011
the pharma business now represents just 10 of group 
revenue and 7 of divisional operating profit the business 
started slowly with a weak first quarter but performance 
improved during the year full year operating profit was  
£11 million below prior year 
our one remaining impact business william blythe continued 
to improve generating £35 million of operating profit and we 
expect it will continue to show further improvement over the 
course of 2011 
total sales by destination  
as derived from note 4 to financial statements on page 48
uk – 118 
other europe – 341 
asia – 338 
rest of the world – 203
divisional operating profit  
as derived from note 4 to financial statements on page 46
polymer chemicals – 877 
pharma chemicals – 69 
impact chemicals – 54
chairman’s statement yule catto  co plc
annual report and accounts 2010 05
 2010 was a very good  
year for yule catto 
building on the strong 
improvement in group 
performance delivered 
in 2009
introduction business review governance group financial statements company financial statements other information
i would like to thank all of our employees whose continuing 
support and contribution has made 2010 such a successful 
year for the group
outlook
looking forward we will be reporting results for the enlarged 
group in our core markets we continue to anticipate several 
years of low growth in western markets with global growth 
generally driven by emerging markets following the acquisition 
of polymerlatex we will have a stronger business in europe 
and we will remain well placed to access the attractive 
opportunities in asia and other emerging economies with over  
a third of our combined polymers business in these markets 
we continue to anticipate significant operational synergies from 
the acquisition and we expect the combined business will enjoy 
additional market development opportunities
raw material prices have risen strongly over recent months 
exacerbated by the situation in the middle east both yule catto 
and polymerlatex have been successful in passing through 
price increases in recent years and we intend to continue to 
remain focused on this in the enlarged group
both yule catto and polymerlatex have made a solid start  
to the year and we are confident about the prospects for the 
enlarged group in the years ahead
 
peter wood
chairman
9 march 2011
polymerlatex acquisition
the highlight of the year was the acquisition of polymerlatex  
for a consideration of £376 million which we announced in 
december 2010 this is a transformational transaction for the 
group substantially increasing the scale and opportunities of 
our core polymer business we anticipate eventual annual cost 
synergies of £20 million from the integration of the business 
the group’s balance sheet has also been strengthened  
with the significant amount of equity and debt raised for the 
acquisition and my thanks go to our shareholders for their 
support in this important transaction we expect to complete 
the transaction at the end of march 
dividend
the group returned to paying dividends at the half year with  
an interim payment of 2 pence per share with a commitment  
to pay at least 5 pence in total for the full year the remaining  
3 pence per share would equate to £44 million on the original 
number of shares in issue prior to the acquisition of polymerlatex 
at the time of the polymerlatex announcement the group 
undertook to honour the cash commitment and the final 
recommended dividend is therefore a cash dividend of  
£44 million which on the enlarged number of shares  
equates to 13 pence per share 
safety health and environment
the group is absolutely committed to the continuous 
improvement of its performance in respect of safety health  
and the environment 2010 marked the end of yule catto’s first 
period of commitment to the chemical industries sustainable 
development goals i am delighted to report over the ten years 
of this commitment our performance has sharply improved  
and the decade ended with all of our sustainability targets 
significantly bettered yule catto  co plc
annual report and accounts 2010 06
567 2010
518 2009
5520 2010
4433 2009
the group delivered a 19 improvement in underlying profit 
before tax and achieved a further substantial reduction in its 
debt over the course of the year this was a good performance 
consolidating the substantial increase in profits and debt 
reduction we delivered in 2009
overview
polymers 85 of sales saw volumes increase by 4  
for the year whilst increasing its operating profit by 10 to 
£567 million as expected this was characterised by strong 
demand growth in asia and only modest improvement 
elsewhere we progressed the expansion of our nitrile facility  
in malaysia commencing construction of 15000 tonnes of new 
capacity which will start production in the first half of 2011 
the acquisition of polymerlatex was announced in december 
2010 and is on track to complete by the end of march 2011 and 
will substantially increase the scale of our polymer business 
polymerlatex is a leading global player in latex products with  
a strong and diversified portfolio of products and well invested 
facilities in europe and asia its combination with yule catto will 
result in a business with increased scale established market 
positions improved cash generation capability and a product 
portfolio that will provide a foundation from which the enlarged 
group can grow and compete more effectively in a consolidating 
emulsion polymers market it will also accelerate our strategy  
of investment in new products and expansion into attractive 
emerging markets
pharmaceuticals 10 of sales saw a decline in profits of  
£11 million after a slow start to the year we filed 3 drug master 
files dmf’s in the year as we continue to develop our generic 
pipeline the api manufacturing industry however remains 
challenging with competition from cheaper manufacturing 
economies in asia continuing to develop 
we completed most of the restructuring of the impact division 
with the sale of four of the five operating units over the course of 
2008 during 2010 the remaining business william blythe further 
improved delivering operating profits of some £35 million 
the core products of polymer division are waterbased 
emulsion polymers formulated around vinyl acetate and acrylic 
dispersions styrene and nitrile butadiene rubber as well as 
polyvinyl alcoholacetate and a number of smaller specialist 
products the division’s manufacturing assets consist of  
22 production units on 14 sites within four geographical regions 
– europe south east asia middle east and south africa and 
employing approximately 1300 people the division trades 
under the synthomer and revertex brand names around the 
world and its products are utilised in a wide range of industries 
including coatings adhesives and construction where they 
deliver a range of product performance benefits from 
enhanced waterproofing to scratch resistance it is also a major 
supplier to the medical industry where its natural rubber and 
synthetic nitrile latex polymers are used in the manufacture  
of condoms catheters surgical and examination gloves where 
it holds a world leading position
2010 proved to be another successful year for the division  
in challenging circumstances with progress again made on a 
number of fronts in many markets there was positive economic 
recovery particularly in asia however europe and the us proved 
more sluggish and remained weaker than had been predicted  
in most markets volumes developed strongly through the first 
half although this was followed by more variable performance  
in some european markets in the later part of the year the 
division’s full year polymer volumes were up 4 led by excellent 
performance in nitrile butadiene rubber alkyd resins and 
specialities which all delivered significant double digit growth
raw material supply and pricing in particular acrylic and 
butadiene monomers created a number of difficulties which  
the business worked hard to overcome throughout the year  
all monomer prices showed a resilient upward move during the 
year and this combined with a tight supply environment created 
a number of challenges for the business however the division 
was generally able to mitigate these by effective procurement 
strategies enabling production to continue albeit with 
significantly higher input prices in the light of the rising raw 
material costs and relatively stable demand in europe the 
division’s priority was to ensure a balanced approach to margin 
and volume with a continued focus on value delivery which  
was broadly successful the cost strategy employed in 2009 
delivered benefits in 2010 with full year costs down on 2009
chief executive’s report
total sales £’m 
divisional operating profit £’m 
 underlying performance
polymer chemicals yule catto  co plc
annual report and accounts 2010 07
introduction business review governance group financial statements company financial statements other information
innovation interior
more information at
wwwyulecattocom
emultex vv67 series
emultex vv67series is a new range of polymer dispersions 
introduced in 2010 for use in modern domestic wall and ceiling 
paints the emultex vv67series uses new monomer 
combinations in the design of binders for highly washable 
scrub resistant vinyl wall paints emultex vv673 in particular can 
be used in a wide range of matt and silk paint finishes and has 
been designed to meet stringent requirements set out by the 
european community ecolabel regulations for indoor paints 
 
revacryl 30128 
revacryl 30128 a new apeo free pure acrylic copolymer 
dispersion was developed to complement our existing flooring 
adhesive range produced as an adhesive for laying carpet tiles 
it offers excellent adhesion to a wide range of backing materials 
the overall polymer design not only provides a permanently 
tacky film to prevent loose lay carpet tiles from moving but  
also allows the carpet to be lifted and replaced with ease
revacryl 5737 
revacryl 5737 was developed as a new polymer for the 
formulation of solvent free low odour emulsion paints for 
interior decorating the polymer is used in high quality  
wash resistant paints another innovative product created  
to meet the most stringent demands for environmentally 
friendly low voc interior paints that are becoming  
increasingly important to global markets
synthomer 3560 
synthomer 3560 is a new crosslinked polymer latex for  
woven carpets that meets the latest regulatory and indoor  
air quality requirements synthomer 3560 gives a high quality 
carpet backing with good runnability on the coater and a  
high penetration into the woven yarn the product has excellent 
cut edge strength in the end application leading to a high 
quality and durable carpet
polymers saw volumes 
increase by 4 whilst 
increasing operating 
profit by 1 0
1
2
4
3
3
1
4
2 yule catto  co plc
annual report and accounts 2010 08
we upgraded our latex and lithene research facilities during  
the year and higher margin new product launches supported 
profitability over the course of the year
the uk business in particular suffered during the year with 
three unplanned events holding back latex production volumes 
over the course of the year butadiene supply issues in the first 
quarter were effectively resolved by sourcing higher cost raw 
materials from europe a styrene fire at the stallingborough 
plant temporarily impacted production in the third quarter and 
the extremely cold weather in december reduced our ability  
to produce and ship
synthetic latex
polymer division’s synthetic latex dispersions business 
consists of two product families styrene butadiene rubber 
sbr manufactured in germany and the uk and nitrile 
butadiene rubber nbr manufactured in the uk and malaysia
overall sbr latex had a very positive year with a degree of 
recovery in the construction and specialities market with non 
carpet volumes improving by almost 7 over 2009 previously 
mentioned issues in stallingborough did limit progress in the 
carpet market where conditions also remained difficult and 
volumes were down on prior year
in nbr the business experienced strong demand for gloves in 
part bolstered by the high cost of natural rubber margins were 
held stable in the face of rising monomer costs and strong 
competition to meet the continued growth in demand for nbr 
the board approved a new phase of expansion in malaysia 
which is expected to start up before the end of h1 2011 and 
add 15000 tonnes of capacity
dispersions
2010 was a disappointing year for dispersions with low 
customer demand in the european decorative paint market 
slightly lower volumes than 2009 were also experienced in 
south africa and the middle east however strong margin 
management allowed these businesses to deliver an improved 
bottom line asia as in most other product groups developed 
positively during the year with volumes strongly ahead 
chief executive’s report continued
compounds
the european carpet market remains in a volatile state  
and while there is evidence that the market is strengthening 
volumes declined slightly from 2009 while a number of 
customers have reported anticipated improvements this 
is yet to be reflected in visible demand or actual sales
specialities
polyvinyl alcohol
alcotex
®
 had another very good year with excellent progress  
in both volume and margin demand globally recovered and 
volumes moved ahead strongly with a particularly strong 
performance in asia during the year further investment was 
made in improving plant performance which resulted in several 
record months of production
 
liquid polybutadiene
2010 saw a very strong recovery in lithene
®
 sales on the back 
of a more buoyant automotive sector volumes increased 
strongly and the work on improving product mix has continued 
to deliver benefits further investments in the plant during the 
year have delivered more consistent quality and the ability of 
this plant to produce at higher levels of output 
alkyds and polyester
the recovery of industrial markets in south east asia drove 
demand for alkyd resins while the lack of new infrastructure 
projects severely retarded polyester sales the flexible nature of 
these plants allowed more alkyd resin to be produced resulting 
in a double digit volume increase and strong margins while 
polyester experienced a decline in aggregate the combined 
business delivered a good volume increase and improved 
profitability
natural rubber
natural rubber had a very difficult year with volumes down 6 
heavy rainfall in southern thailand and malaysia resulted in 
lower volumes of field latex and cl60 which resulted in a strong 
and consistently upward move for the natural rubber price 
these conditions forced many manufacturers to halt production 
or switch to nbr where they could resulting in the lowest sales 
volume achieved for a number of years however this volume 
deficit was more than compensated by higher pricing and 
increased margin yule catto  co plc
annual report and accounts 2010 09
introduction business review governance group financial statements company financial statements other information
more information at
wwwyulecattocom
innovation infrastructure
higher margin new 
product launches 
supported profitability 
over the course of  
the year
synthomer 902series 
synthomer has developed the 902series of sbr latices  
for chemical bonding of polyester nonwoven reinforcement 
materials for roofing applications modified bitumen membranes 
for modern and ecological flat or lowslope roofing systems 
require high performance reinforcement materials such as  
fiber glass polyester or composite materials based on a  
highly crosslinked polymer these latices provide excellent 
processability as well as the required strength and thermo
dimensional stability performance in the finished nonwoven 
materials they contribute to the durability of modern flat roofing 
systems for both industrial and residential construction projects 
revacryl 5511 
revacryl 5511 enables the formulation of coatings with high 
water resistance excellent crack bridging properties and low 
dirt pick up a new elastomeric acrylic copolymer dispersion 
has been introduced for flexible exterior wall coatings the 
polymer was designed for coatings which are extremely flexible 
under cold conditions but do not become tacky and attract dirt 
at higher temperatures coatings based on revacryl 5511 can 
be applied to exterior walls with cracks of up to 2mm and 
remain in excellent condition even after exposure to low 
temperatures
synthomer 11003
synthomer 11003 is based on the latest styrene butadiene  
latex technology the next generation polymer for ‘liquid  
applied membrane’ products damp proof membranes has 
been specifically developed to meet demanding environmental 
and regulatory needs the main application is protecting 
substrates like plasterboard and wood against water and 
moisture vapour the liquid membrane is typically applied  
on the wall before tiling for example in bathrooms and similar 
wet room constructions 
revacryl 5840 
revacryl 5840 is an environmentally friendly apeofree  
and low odour styrene acrylic copolymer for primer 
applications revacryl 5840 has been designed to form  
a polymer film sealing the substrate surface and ensuring 
excellent adhesion of the subsequently applied levelling 
compound high performance primers are required for  
example when applying self levelling flooring compounds  
in order to ensure good bonding of the compound to the 
substrate revacryl 5840 has been designed to be used  
on mineral surfaces as a universal adhesion promoter in 
demanding applications
1
2
4
3
3
1
4
2 yule catto  co plc
annual report and accounts 2010
309 2010
236 2009
35 2010
20 2009
45 2010
56 2009
629 2010
653 2009
10
pharma chemicals manufactures a broad range of active 
pharmaceutical ingredients for the life science industry at 
manufacturing facilities in barcelona spain and cuernavaca 
mexico the products are marketed to a broad range of blue 
chip generic and ethical customers who formulate and 
distribute the finished dosage form 
destocking at most of our customers finished in the first six 
months and the order book strengthened through the year 
however following the weak start to the year the business 
ended the year with operating profits some £11 million below 
2009 costs remained in line with expectations even after 
taking into account utility and raw material price rises this was 
achieved by continued productivity and process improvements 
throughout the year
our strategy of selective dossier development saw the approval 
of a marketing authorisation in portugal for omeprazole we 
intend to roll this out to the wider european market over the 
next 18 months the strategy of registration of other marketing 
authorisations of an enlarged range of generic products was 
developed during 2010 and we made our first finished dosage 
sales of pantoprazole
in mexico the sales increases of 2009 were consolidated  
in 2010 through a strong increase in generic sales versus 
ethical products 
impact chemicals originally comprised five businesses  
four of which were sold during 2008 the remaining business 
william blythe is a worldwide supplier of inorganic specialities 
based on copper iodine and tin from its uk manufacturing 
facility products are used in a range of applications such as 
semiconductor manufacture pharmaceutical actives nontoxic 
flame retardants safety glass coatings and catalysts
during the period william blythe traded ahead of 2009
 
pharma chemicals
total sales £’m 
divisional operating profit £’m 
 underlying performance
impact chemicals
total sales £’m 
divisional operating profit £’m 
 underlying performance
chief executive’s report continued yule catto  co plc
annual report and accounts 2010 11
introduction business review governance group financial statements company financial statements other information
more information at
wwwyulecattocom
innovation in asia
investment 
the group is investing £7 million in its ‘phase v’ 
expansion of its nitrile latex facility in malaysia  
this will bring 15000 tonnes of new capacity on  
line in the first half of 2011 the group remains 
committed to longterm investment in nitrile 
latex to support its customers in the high growth 
synthetic gloves market 
innovation 
synthomer has invested heavily in research and 
development facilities in malaysia to support the 
nitrile latex market this investment has paid off  
with well over 50 of sales in 2010 from products 
introduced in the last three years one example is 
our self crosslinking grade which removes the need 
for accelerators in the glove dipping process which 
can cause allergies thereby creating a premium 
product for the glove market 
yule catto  co plc
annual report and accounts 2010 11 yule catto  co plc
annual report and accounts 2010 12
income statement – underlying performance
total sales increased by 21 driven in the main by the recovery 
of input price increases and volume gains in the polymer 
business translation increased turnover by 22 turnover 
within europe comprised some 46 of sales 2009 50 with 
sales outside europe heavily skewed towards asia and other 
developing economies which accounted for 46 of turnover 
underlying operating profit of £549 million was ahead by 11 
driven by higher polymer profitability whilst finance costs fell  
to £78 million 2009 £99 million on lower net borrowings
the underlying tax rate of 19 2009 20 reflects the benefits 
of pioneer status on our investment in malaysia 
profit attributable to minority interests was £13 million  
2009 £16 million
the resultant underlying earnings per share of 162 pence 
is a yearonyear increase of 22 the group committed to  
a minimum dividend per share of 5 pence for 2010 of which  
2 pence was paid for the interim results consistent with that 
promise a final cash dividend of £44 million being 3 pence 
multiplied by the number of shares prior to the polymerlatex 
acquisition will be paid post the rights issue to fund the 
acquisition the number of shares in circulation is 340 million 
and this therefore equates to a final cash dividend per share  
of 13 pence
income statement – special items
to provide a clearer indication of the group’s underlying 
performance a number of special items are shown in a 
separate column of the consolidated income statement  
special items include 
•	 sale of revertex finewaters the sale of this business  
was completed in june 2010 and the revenue and profits  
of that business are shown as special items in 2009 and 
2010 additionally the gain on disposal and the share of  
that gain attributable to minority interests are shown as 
special items in 2010
•	 various cross currency and interest rate swaps for hedging 
purposes which involve maturities of up to seven 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 gain of £26 million 2009 loss 
£44 million is segregated from the underlying performance
•	 the expenses of winding down the italian pharma site  
the closure of which was announced in 2007
•	 release of tax provisions relating to historic issues that  
were closed during the course of 2010 of £66 million
•	 acquisition cost relating to the purchase of polymerlatex  
of £42 million charged in the year
pensions
in the main uk defined benefit pension scheme the majority  
of investments are in equities equity markets improved in 2010 
and overall the fund delivered a return of 116 the yield on 
highquality corporate bonds decreased somewhat 03 
during the year which increased liabilities the company made 
cash contributions to the fund in the year of £136 million the 
government announced the replacement of rpi with cpi as the 
measure of inflation during the year most of the group pension 
liabilities in payment receive either fixed or rpi linked increases 
consequently this change has only affected the liabilities with 
respect to the period in deferment and has reduced liabilities 
by some £7 million the overall effect of these changes was that 
there was a decrease in the deficit of the scheme which stood 
at £56 million at the end of 2010 2009 £70 million 
the uk scheme was closed to future accrual during 2009  
and as at the end of 2010 there were no active members  
in the scheme
ifrs
on an unadjusted ifrs basis group revenue increased  
by £1045 million to £6325 million profit before taxation at 
£578 million was £507 million higher than the previous period 
reflecting the change between the years in the mark to market 
of the group’s currency swaps the profit on disposal of 
businesses and goodwill impairment incurred in 2009
borrowings 
underlying net debt reduced significantly during the year
capital expenditure slowed substantially in 2009 with the  
global recession to £87 million capex increased during 2010 
but at £106 million remained below depreciation
investment in the cash costs of running the italian pharma  
site came to some £14 million whilst net proceeds from 
divestments totalled £109 million from the sale of revertex 
finewaters net of distribution to the minority shareholders
working capital outflow for the year was £119 million  
as expected with the impact of volumes and input costs 
increases control of working capital is a core focus of  
the business management 
financial review yule catto  co plc
annual report and accounts 2010
governance group financial statements company financial statements other information business review introduction
13
minority interest dividends increased substantially to £66 million 
due to the distribution of 30 of the proceeds from the sale of 
revertex finewaters to the minority shareholders 
the combination of stronger ebitda low capex divestment 
proceeds and the substantial working capital outflow resulted in 
underlying net debt reducing to £634 million from £880 million 
at the end of 2009
refinancing and liquidity
at the year end the group had us private placement  
debt net of derivatives of £75 million additionally the group 
had £182 million in a 5 year loan in malaysian ringgit and an 
undrawn £30 million revolving loan facility maturing december 
2011 in december the group agreed a new three year  
£210 million loan facility for the acquisition of polymerlatex  
and received net proceeds of £219 million from the rights issue 
in january the existing £30 million loan facility was therefore 
cancelled in january 2011 £24 million of us private placement 
debt is due in 2012 
net debt to ebitda the group’s key leverage metric fell to 
under 10 at the end of the year from 13 at the end of 2009 yule catto  co plc
annual report and accounts 2010 14
introduction
2010 marked the end of the first period of yule catto’s 
commitment to the chemical industries’ sustainable 
development goals and therefore provides an opportunity to 
look back over a longer period at the company’s environmental 
and safety performance the commitments were signed in 
2005 but related to our performance over the first decade of  
the 21st century over that period the group’s performance  
has sharply improved in 2010 we emitted less than 1 of the 
sulphur dioxide we released in 2000 our personal safety 
performance as measured by reportable lost time accidents 
those involving over 3 days absence from work has improved 
by a factor of 3 over the decade our performance on all lost 
time accidents is now over 25 better to that achieved on 
average by the european chemical industry and our energy 
consumption per tonne has reduced by a third on all the 
sustainable development measures used by the group the 
decade ended with performance significantly better than the 
targets set all of this is a tribute to the hard work done by our 
employees to ensure ever safer working on our sites and 
continuing improvements in the group’s environmental 
performance
progress was maintained in many areas in 2010 with further 
improvements in measures such as ‘near miss’ reporting water 
use and the release of both sulphur dioxide and nitrogen oxides 
to the atmosphere however on a number of other measures 
our performance did not keep up the rate of improvement seen 
in recent years and on energy and reportable accidents 
performance was slightly worse in 2010 compared to 2009 
our policy commitments
yule catto remains committed to both the global chemical 
industries’ responsible care
®
 initiative and to the principles  
of sustainable development as set out in the uk chemical 
industries association ‘cia’ sustainable development ‘sd’ 
guiding principles
responsible care
®
 aims to improve and enhance the  
chemical industry’s safety health and environmental ‘she’ 
performance year on year yule catto has been committed  
to responsible care
®
 since the 1990s and this commitment 
remains at the core of our efforts towards excellence in 
corporate social responsibility all yule catto sites are  
required to adhere to these principles and actively support  
the group’s efforts to achieve continuous improvement in  
our she performance
the yule catto group has been committed to the cia’s sd 
guiding principles since they were published in 2005 and we 
have reported annually against the targets set out in those 
principles each year since then the commitment was re
confirmed in 2010 when the sd principles were resigned by 
the current chief executive and the chairman of the yule catto 
board the sd principles are followed by the group’s sites 
around the world and are used both to set annual improvement 
targets especially for our environmental performance and to 
help the group to define its route to a safe and sustainable 
business yule catto’s principles include a strong commitment 
to open reporting of our environmental performance reflected 
in this annual report and full respect for the people and 
communities amongst whom we work
she performance and achievements during 2010
the longterm performance of yule catto against our targets 
and metrics remains very good although the performance in 
2010 slipped back in a number of areas when compared to  
the excellent results achieved in 2009 of the five ‘headline’ 
measures used to monitor group performance two showed 
improvement in 2010 whilst three fell slightly though all would 
have been ‘best ever’ performance 23 years ago ‘near miss’ 
reporting – a leading indicator of both staff involvement and 
sites’ intent to spot and remove hazards – improved again with 
all sites achieving over 3 ‘near miss’ reports per employee 
during the year over the group as a whole the rate improved  
to nearly 5 ‘near misses’ per member of staff – an excellent 
performance our consumption of water also fell both in 
absolute terms and as measured by usage per tonne of 
production the group’s water usage is now only half what  
it was at the beginning of the decade
the number of reportable lost time accidents ‘rlta’ 
increased compared to 2009 with the group’s rlta frequency 
rate increasing to 036 per 100000 hours worked the quantity 
of waste disposed to landfill increased significantly as we 
remediated a number of sites and sent material previously 
located on site for offsite disposal we anticipate this situation 
will continue into 2011 excluding this oneoff situation waste 
from ongoing operations declined again in 2010 the group’s 
energy consumption increased somewhat during the year 
though the performance still gave the group its second best 
performance ever and meant that the group as a whole 
produced over 3 tonnes of product using the same quantity  
of energy used to produce 2 tonnes of product in 2000
on many other measures environmental performance 
improved our measured discharges of heavy metals are only 
25 of what they were in 2008 and less than 4 of the figures 
for 2000 our releases of acid gases to atmosphere reduced 
again and are now much less than 1 of their 2000 values  
and our releases of both carbon as carbon oxygen demand 
and phosphorous to water were lower than ever before
following improvements to our measurement systems and 
increased output our recorded discharge of volatile organic 
compounds ‘voc’s’ has increased again in 2010 projects to 
abate these releases are at an advanced design stage and the 
abatement plants should be fully operational by the end of 2012
the yule catto board and the group executive committee 
continue to monitor performance in all these areas and provide 
leadership in driving the group to continued improvements 
across all aspects of she performance
managing safety and environmental performance
safety and environmental performance is fully integrated 
into yule catto’s management structure and is always a  
line management responsibility staff at all levels have to 
manage their own health and safety performance and take  
care of those around them as well as managing the she 
performance of all those for whom they are responsible  
to assist in this management process the group has a set  
of she management policies and procedures which make  
up the yule catto she management system ‘shems’  
this system has been extensively revised and extended in 2010 
to cover most areas of she performance and now provides 
comprehensive coverage of the procedures yule catto expects 
corporate social responsibility report yule catto  co plc
annual report and accounts 2010 15
governance group financial statements company financial statements other information business review introduction
all sites to have in place during 2011 and 2012 sites will be 
implementing policies and procedures which ensure these 
practices meet the yule catto shems expectations 
the group also has an accident and incident management 
system ‘aims’ to assist in the management of all actual  
events and all ‘near misses’ throughout the group the system 
provides automatic email alerts to senior management of 
significant events and provides a mechanism for storing 
and sharing the learning gained from accident and incident 
investigations 
she performance is always a primary duty for management 
at all levels in the group the practices adopted in previous 
years remain a cornerstone of our efforts towards continuous 
improvement in she performance the practices include
•	 she performance is discussed in all management meetings 
as the first agenda item
•	 yule catto conduct regular indepth she audits of all sites  
to assess performance and identify opportunities for 
improvement the results of the audits are discussed both 
with the site involved and with wider management for 
example at the group executive committee
•	 the group aims is used to collect and analyse data on  
all accidents incidents and ‘near misses’ on our site  
the system ensures that all of these are appropriately 
investigated with the most serious or potentially serious 
incidents being fully investigated to root causes the system 
is then used to ensure that the identified actions to prevent 
recurrence are put in place
•	 sites are expected to implement policies procedures and 
practices in line with the group’s shems and to provide 
training for all their staff to ensure that these are used by staff 
at all times
•	 key measures of she performance are collected monthly or 
quarterly as appropriate and reported to the group executive 
and to the board this process is mirrored at company and 
site level to give management and staff a clear picture of 
current performance
•	 key leading performance indicators covering items such as 
inspections and engineering performance metrics are being 
collected and reported to senior management to give 
assurance of good performance at site hardware level
•	 senior managers have she targets as part of their annual 
objectives other employees have similar objectives set 
either on an individual or a site basis
•	 group she visits to sites to carry out training and 
development of key staff
health safety and accident performance
the group’s performance on reportable lost time accidents 
‘rltas’ declined in 2010 there were 15 rltas in the year 
resulting in a rise in the group’s rlta frequency rate from  
0235 to 036 per 100000 hours worked 100000 hours is  
very broadly a working lifetime however even this rise meant 
that 2010 was the third best year in yule catto’s history in 2010 
a yule catto employee was three times less likely to have a 
reportable accident than they were in 2000 the number of 
accidents resulting in less than 3 days lost time ‘lta’s’ did not 
change between 2009 and 2010 which meant that the group 
was still comfortably below the frequency rate for all lost time 
accidents reported by the european chemical industry 
confederation ‘cefic’ the uk chemical industry remains 
amongst the safest manufacturing industries in the world and 
the chemical industries association ‘cia’ collects data on its 
member’s performance yule catto aims to be at or below the 
average frequency rate for cia member companies in all our 
operations around the world
process safety and reportable safety incidents
although already at low levels in 2009 there was a fall in the 
number of significant reportable safety incidents in 2010  
by definition process safety incidents have the potential to be 
damaging to people plant and the environment and are always 
subject to rigorous investigation 
the four process safety incidents which occurred in 2010 
included a fire at synthomer’s stallingborough plant a non
standard reaction in a reactor at synthomer’s plant in vietnam 
which caused the contents of a vessel to be relieved through 
the emergency vents the loss of a significant amount of 
flammable material when a valve was left open at the base of an 
vessel during a filling operation and a decomposition in a drier 
at william blythe which released a significant volume of oxygen 
into the plant there were no personnel injuries in these 
incidents and only minor product releases which caused no 
lasting damage to the environment recognising the importance 
of process safety staff in south africa and malaysia attended 
the uk institution of chemical engineers ‘icheme’ process 
safety training course when it was run in those countries yule 
catto participated in the production of this course which was 
run inhouse for 25 members of staff from across our european 
and saudi arabian operations two further inhouse courses 
have been arranged for 2011 in europe
3 day lost time accident frequency rate per 100000 hours
reportable lost time accident frequency rates
00
02
04
06
08
10
12
10 09 08 07 06 05 04 03 02 01 00
actual
10 09 08 07 06 05 04 03 02 01 00
4
6
4 4 4
2
4
26 26
66
4
reportable safety incidents yule catto  co plc
annual report and accounts 2010 16
occupational health  hygiene
for the second year in a row there were no cases of 
occupational disease reported by our sites around the world 
this is an excellent result especially as a number of the 
materials handled on our sites notably in pharmaceutical 
division are known to be potent sensitising agents we achieve 
this by limiting the exposure of our staff to the chemicals they 
handle using the standard hierarchy of removal reduction 
control and protection given the complex and precise 
chemistry of our processes it will never be possible to remove 
all hazardous chemicals from our sites and this means that 
control of exposure by engineering means backed up by the 
extensive use of personal protective equipment ‘ppe’ will 
always be a major concern for operational and she staff on our 
sites to assist in the correct assessment of chemical exposure 
risk the group’s assessment program based on the principles 
of the uk control of substances hazardous to health 
regulations has continued to be rolled out to our sites in all 
divisions assessment of the adequacy of controls at site level 
and the provision of advice on how to improve controls on 
chemical exposure has continued to be a matter of discussion 
during the group she audits
the health of our staff is monitored by a comprehensive set  
of medical arrangements on all of our sites staff who work with 
chemicals are provided with regular medical examinations by 
trained occupational health nurses or doctors whilst always 
respecting medical confidentiality the doctors who provide the 
service in each country inform the local company in the case  
of a reportable disease which could be caused by a work 
activity they are also asked to inform the company if their 
overview of the health of our staff causes them concern 
audit programme
the she performance of all yule catto sites is audited by  
an inhouse team on a 2year rolling cycle to provide senior 
management – at site divisional and group level – with  
a picture of the fundamental she performance of group 
operations the audits which incorporate a scoring system are 
based on the principles of responsible care
®
 management and 
are used to provide guidance to sites on areas for improvement 
the results of the audits are monitored closely by the group 
executive committee who are committed to achieving high 
standards of she performance on all yule catto sites during 
2010 additional resources were allocated to the audit process 
to ensure that problems were adequately assessed and in  
2011 additional resources are being allocated at both site and 
group level to improve performance where problems have 
been identified
asset protection and insurance inspections
an incident at langelsheim in late 2009 and the fire at 
stallingborough in 2010 meant that for the first time for a 
number of years the group has had significant insured losses 
these losses have been carefully managed with our insurers  
a process which has been considerably helped by the close 
cooperative work carried out between yule catto and our 
insurer’s surveying team who visit our sites on a 2year cycle 
these biennial insurance surveys serve as a ‘sense check’ on 
our own internal audits and have pointed out a number of areas 
for possible improvement on group sites many of the possible 
improvements have been addressed allowing an improvement 
in our insurer’s rating of our risk profile this improvement and  
a commitment to continuing to improve over the next few years 
has helped to keep control of the future cost of our global risk 
insurance which has fallen by one third over the past six years 
regulatory affairs reach and ghs
the registration evaluation authorisation and restriction of 
chemicals ‘reach’ regulations have been in force for over  
2 years now and their impact has begun to be felt not only by the 
chemical industry in europe but also by the users of our products 
2010 saw the first of the registration deadlines come into force 
with all chemicals manufactured at over 1000 tonnes per annum 
requiring to be registered as well as a series of chemicals  
which were regarded as being of ‘high concern’ although the 
great majority of yule catto’s products were exempt from the 
registration requirements being polymers we did have to register 
some materials either because they were monomers used in 
products imported into the eu or because they were directly 
manufactured materials all of the registrations required by each  
of the divisions were completed successfully and the registrations 
confirmed by the responsible body the european chemicals 
agency ‘echa’
the first registration deadline in reach was also the first deadline 
for notification of the hazard classification and the labelling of all 
materials sold in the european union under a second european 
directive this directive which was implemented across the eu  
as the classification packaging and labelling ‘clp’ regulations 
came into force on 20 january 2010 and implemented the united 
nations globally harmonised system ‘ghs’ for the classification 
and labelling of all chemicals under the regulations all hazardous 
chemicals sold in the eu had to be notified to echa together with 
their hazard classification and the labels which would be attached 
to all packages of the material at the same time the rules for 
classification were changed as were the symbols which must be 
used to convey hazard information polymer dispersions and the 
latex emulsions produced by the group are classified as mixtures 
and are not therefore within the scope of the regulations until 2015 
this meant that polymer division only had to notify 52 raw 
materials and 1 manufactured substance by the 1 december 
deadline but essentially all the products of the other divisions  
had to be reassessed relabelled and notified group companies 
had to modify their internal processes to deal with all the revised 
information coming from our suppliers and give extensive training 
to staff who have to deal with chemicals which now have different 
labels attached this was done successfully 
ghs is being introduced in most other countries around the 
world over the next few years and a number of countries are 
introducing systems similar to reach our experience in 
europe dealing with reach and ghs puts the group in  
a good position to deal with these changes as they occur 
corporate social responsibility report continued yule catto  co plc
annual report and accounts 2010 17
governance group financial statements company financial statements other information business review introduction
sustainable development  
performance report 2010
managing our environmental responsibilities
yule catto is firmly committed to the concepts of sd as a 
company yule catto was one of the initial group of signatories 
to the programme of sd goals put forward by uk cia to its 
member companies in 2005 the company’s commitment to 
these sd goals has been shown by a continuous record of 
investment in environmental improvement and a continuous 
record of achievement against the targets set this has led to  
a significant reduction of our environmental impacts since 2000 
although we are now at the end of this 10 year improvement 
cycle yule catto remain committed to continuing advances in 
sd performance and the company will be proposing a further 
set of targets for the next 5 year period during 2011 
not all of the group’s measures of our sd performance are 
recorded in the graphs presented here a good number of  
the other measures which we use internally also show very 
significant improvement over the last 10 years as examples 
our releases of nitrogen oxides to air have fallen by more than 
80 per production tonne over the last 10 years our releases 
of phosphorous to water have fallen by over 75 over the  
same period and our releases of heavy metals are down from 
45 gmtonne to 0147 gmtonne a better than 96 reduction  
all of these have been achieved by incremental improvement  
in the operational systems on our sites investment in improved 
equipment for environmental control and of course ever
improving performance by our site staff to give better quality 
product produced with more carefully husbanded resources 
whilst producing less waste
this record of success is reflected in all of our sd measures 
which have improved considerably since 2000 indeed all are 
well ahead of the targets we set for improvement over this 
period however on 3 measures the group performed less  
well in 2010 than in 2009 though the performance was still 
considerably better than in earlier years and below target the 
measures which performed less well were waste production 
energy use and voc releases in the case of voc releases this 
reflects the improved measurement methods used from 2009 
which give a much better estimate of actual releases from our 
processes and in the case of waste it reflects the need to deal 
with legacy wastes dating back 40 years on one of our sites
energy
although 2010 saw an increase in energy use per tonne 
compared to 2009 it was still easily the second best year 
ever for energy consumption across yule catto over the  
10 year period the group’s energy consumption per tonne  
has improved such that the energy used to make 2 tonnes  
in 2000 now makes over 3 tonnes of product compared to 
our 10year sd commitment energy consumption was 30 
better than the target set the increase in energy use was 
widely distributed across most of the group’s sites it partly 
reflects lower volumes and changing products mix but this is an 
area where yule catto remains committed to further significant 
improvements in both specific energy use and decarbonisation 
of our energy supplies we will be proposing new group energy 
targets during 2011 for the next 5 year period which will reflect 
these commitments 
global warming
both of the main contributors to yule catto’s global warming 
performance moved adversely in 2010 the group’s energy 
performance per tonne was worse than 2009 discussed 
above and the quantity of vocs released also increased  
the quantity of vocs increased for the second year in a row 
mainly due to an increase in the production of nitrile rubber for 
the gloves market in malaysia the manufacture of this grade  
of latex is inherently more likely to give rise to the release 
of vocs than other materials we produce there were also 
higher releases at our stallingborough plant in the uk again 
associated with the grades of material being produced and 
higher production levels although these releases contribute  
to the environmental cost of the group’s operations we  
have not been able to detect any adverse environmental 
consequences locally from the materials released none the 
less at both of these plants there are active projects to abate  
the releases and these are expected to be fully implemented  
by the end of 2012
although the performance in 2010 was disappointing the  
longer term picture is still of continuing improvement in the 
group’s releases of greenhouse gases with only the period from  
20072009 being better than the figure for 2010 yule catto beat 
its 10year target by 16 and improved by 37 over the decade
gigajoules used per production tonne
energy consumption
00
10
20
30
40
50
60
10 09 08 07 06 05 04 03 02 01 00
actual
10year target
tonnes carbon dioxide equivalent release per production tonne
global warming burden
000
005
010
015
020
025
030
035
040
045
10 09 08 07 06 05 04 03 02 01 00
actual
10year target yule catto  co plc
annual report and accounts 2010 18
atmospheric acidification
the group’s contribution to atmospheric acidification  
was reduced by a further 26 in 2010 compared to 2009 
although the absolute change is small compared to the very 
large decreases in previous years – achieved by significant 
capital investment in flue gas scrubbing at the holiday 
pigment’s sites which yule catto formerly owned – it represents 
a further 750 kg reduction in sulphurous gases emitted by 
group sites the group emissions are less than 08 of what 
they were at the beginning of the decade and less than 16  
of the 10 year target for 2010 the emissions which remain are 
concentrated at two of our sites these releases represent 90 
of the group total the group will be examining these releases 
in 2011 to see if abatement systems would be appropriate or if 
other measures can be taken to reduce them
water use
yule catto’s water consumption fell again in 2010 both in  
the absolute quantity of water used and by a further 275 on  
a per tonne basis this reduction helps to ensure the longterm 
sustainability of our business as water is an increasingly 
important and sometimes scarce resource in many regions of 
the world water supply can be a significant constraint on both 
industry and agriculture yule catto sites are generally in areas 
where water supply is not a constraint and we are fortunate to 
have relatively reliable sources of both potable and process 
water for our sites this security of supply is especially 
important for polymer division where water is not only vital to 
the safety of our processes but where the great majority of our 
product is sold as a dispersion in water water supplies were a 
constraint during the year at our malaysian site and action has 
been taken to ensure that a reliable piped supply will always be 
available in future in a number of cases our supplies of water 
come from our own renewable sources where we have this 
type of supply we monitor the source carefully so that we can 
be certain that it is not being depleted 
kgs sulphur dioxide equivalent released per production tonne
atmospheric acidification burden 
00
10
20
30
40
50
60
10 09 08 07 06 05 04 03 02 01 00
actual
10year target
waste disposal
as noted above hazardous waste disposal increased in 2010 as 
we rectified historical issues despite this setback the hazardous 
waste disposal to landfill from group sites in 2010 was still only 
27 of 2000 levels and only 35 of our sd target this long
term achievement is more impressive when the reclassification 
of many formerly nonhazardous wastes as hazardous waste is 
taken into account
the cessation of use of the onsite landfill at kluang malaysia in 
february 2010 which was only used for nonhazardous waste 
meant that the quantity of nonhazardous waste sent to landfill 
dropped by over 60 in 2010 alternative methods of disposal 
have had to be found and these have generally involved offsite 
disposal with waste streams sent as hazardous waste however 
the excellent work done by sites in finding alternative outlets for 
material previously sent to landfill which in one case has even 
involved the recovery of previously dumped material has reduced 
the quantity disposed of in this way by 85 compared to 2000
m 3 per production tonne
water consumption 
00
10
20
30
40
50
60
70
80
90
100
10 09 08 07 06 05 04 03 02 01 00
actual
10year target
tonnes waste per production tonne
hazardous waste disposed to land 
0000
0002
0004
0006
0008
0010
0012
0014
10 09 08 07 06 05 04 03 02 01 00
actual
10year target
corporate social responsibility report continued yule catto  co plc
annual report and accounts 2010 19
governance group financial statements company financial statements other information business review introduction
environmental incidents 
the number of environmental reportable incidents increased 
slightly between 2009 and 2010 the incidents reported are 
either unforeseen releases mainly spillages on site which have 
managed to circumvent the site’s containment system or are 
routine releases from our effluent treatment plants ‘etp’ 
which have breached their permitted limits all these incidents 
have been investigated and appropriate remedial actions taken 
to reduce the chance of the incident being repeated although 
all such incidents are matters of concern to yule catto none of 
the incidents in 2010 have led to any noticeable environmental 
damage being reported to any group company two of the 
incidents were in durban south africa where the site has  
plans to construct new etp during the coming year this  
will considerably improve the quality of the effluent routinely 
released and reduce the chances of exceeding the release 
limits in future even if the local authorities further tighten the 
permitted releases from the plant
tonnes per production tonne
nonhazardous waste disposed to land 
0000
0005
0010
0015
0020
0025
0030
10 09 08 07 06 05 04 03 02 01 00
10 09 08 07 06 05 04 03 02 01 00
8 8
10
19
4
7
4
22
44
49
8
reportable environmental incidents yule catto  co plc
annual report and accounts 2010 20
environmental kpis
the uk department for environment food and rural affairs ‘defra’ published guidelines for reporting environmental key 
performance indicators in 2006 the key measures suggested were energy use emissions to air waste disposal and water 
consumption on an absolute and a per tonne basis yule catto has reported on these indicators for a number of years and to  
aid transparency in environmental performance reporting yule catto adopted defra’s preferred format in 2008 for the report  
on our 2007 performance this format is used in the table below which gives the data for the period 20082010
2010 2009 2008
 change 
20082010
 change
20092010
energy consumption
1
     
gj 2092339 1967478 2633940 2056 635
gas 698891 641691 934577
light oil 28178 24885 82920
heavy oil 64326 61046 35254
steam 161617 147456 165912
electricity primary basis 1138600 1086779 1409021
gjtonne production 2942 2765 3327 1156 641
emissions to air
2
     
carbon dioxide co 2
tonnes 104572 98289 131787 2065 639
tonnes co 2tonne production 0147 0138 0166 1166 656
sulphur dioxide so 2
tonnes 272 279 1140 7616 264
kilos so 2tonne production 0038 0039 0144 7347 258
nitrous oxides nox
tonnes 1945 2003 3084 3693 289
kilos noxtonne production 0027 0028 0039 2986 283
volatile organic compounds voc
tonnes 2407 2155 2081 1567 1171
kilos voctonne production 3385 3028 2628 2877 1178
water usage     
cubic metres m
3
 3271018 3366442 4417697 2596 283
public potable supply 879006 938084 1358705
raw water from river 1514427 1609773 2285307
raw water from borehole 337058 308738 443308
raw water from canal – 2565 15282
raw water from other 540527 507282 315094
m
3
tonne production 4600 4731 5580 1757 278
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 and therefore include both direct emissions and indirect emissions related  
to boughtin electricity   
 
corporate social responsibility report continued yule catto  co plc
annual report and accounts 2010 21
governance group financial statements company financial statements other information business review introduction
21
2010 2009 2008
 change 
20082010
 change
20092010
waste management
hazardous waste
tonnes 22398 12131 18848 1884 8464
hazardous waste sent offsite
recycled – energy recovery 5243 1981 4855
recycled – separated reprocessed 9010 3865 5164
incinerated – no energy recovery 6332 3462 4232
disposed by landfill 1578 817 1158
other 667 6510 119
hazardous waste disposed onsite
incinerated onsite with energy recovery – – 1335
incinerated onsite with no energy recovery 129 1941 1986
disposed to onsite landfill
haz waste tonnestonne production 0031 0017 0024 3124 8474
nonhazardous waste
tonnes 9002 12809 15206 4080 2972
nonhazardous waste sent offsite
recycled – energy recovery 1940 3077 3413
recycled – separated reprocessed 3311 1418 2326
incinerated – no energy recovery – 777 220
disposed by landfill 2084 6041 6976
other – municipality 1606 1580 1437
nonhazardous waste disposed of onsite
recycled – energy recovery – – –
incinerated – no energy recovery – – –
disposed by landfill 600 616 1031
nonhaz waste tonnestonne production 0013 0018 0019 3338 2968
total waste tonnestonne production 0044 0035 0043 269 2598
production
tonnes 711138 711560 791711 1018 006 yule catto  co plc
annual report and accounts 2010 22
executive directors 
a m whitfield
2
 – chief executive
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 49
d c blackwood
4
 – finance director
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 51
nonexecutive directors 
p s wood
2
 – chairman
joined the board in 2001 and was appointed chairman on  
1 february 2009 he was chief executive of the bss group 
plc until retirement at the end of 2005 and is a nonexecutive 
director of rpc group plc he is a member of the institute of 
chartered accountants of england and wales age 63
the hon a g catto
4
 
joined the board in 1981 he is managing director of cairnsea 
investments ltd a private investment company and a non
executive director of several early stage companies that have 
been backed by cairnsea until 1995 he was a managing 
director of lazard brothers and prior to this he was with  
j p morgan and morgan grenfell  co age 58
dr a a dobbie
1234
joined the board in august 2007 he is a founding director of 
cogency chemical consultants limited a director of nitech 
solutions limited and marine biopolymers limited and is 
chairman of chemical sciences scotland age 59
dato’ lee hau hian
4
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 57
j k maiden
1234
 – 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 49
1 member of audit committee
2 member of nomination committee
3 member of remuneration committee
4 standing for reelection at 2011 agm
registered office 
yule catto  co plc
temple fields
harlow
essex
cm20 2bh
registered no 98381
secretary
richard atkinson
bankers
banco de sabadell sa
barclays bank plc
commerzbank ag 
hsbc bank plc
maybank – malayan banking berhad
joint stockbrokers
rbs hoare govett limited and collins stewart europe limited
registrars
computershare investor services plc
lochside house
7 lochside avenue
edinburgh park
edinburgh
eh12 9dj
auditors
deloitte llp
chartered accountants and statutory auditor 
cambridge uk
solicitors
pinsent masons llp
salans llp
squire sanders  dempsey uk llp
directors and advisers yule catto  co plc
annual report and accounts 2010 23
introduction business review governance group financial statements company financial statements other information
the directors submit their annual report including a 
management report and the audited financial statements  
for the year ended 31 december 2010
results and dividends
profit attributable to shareholders for the year was £49738000
the interim dividend of 2 pence per share was paid on  
1 1 november 2010 the directors recommend a final dividend of  
13 pence per share payable on 8 july 201 1 to those shareholders 
registered at the close of business on 10 june 201 1 a dividend 
reinvestment plan is available to shareholders and this alternative 
will continue to be offered until further notice
principal activities and business review 
the principal activities of the company and a business review 
are set out on pages 4 to 21 and form part of the report of  
the directors
acquisitions and disposals
on 2 june 2010 the group’s joint venture subsidiary  
revertex finewaters sdn bhd was sold to h b fuller 
company on 13 december 2010 the group exchanged 
contracts with polymerlatex holdings bv for the acquisition  
of polymerlatex deutschland beteiligungsgesellschaft mbh 
polymerlatex further details of these transactions are 
contained in notes 28 and 29 and in relation to the latter in the 
prospectus dated 13 december 2010
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 is contained in note 21 to the financial 
statements
directors 
the present membership of the board is shown on page  
22 all of whom served throughout the year 
the hon a g catto dato’ lee hau hian dr a a dobbie  
mr j k maiden and mr d c blackwood retire and will be 
seeking reelection at the forthcoming annual general meeting 
none of the directors seeking reelection has a service contract 
other than mr blackwood who has 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 remuneration report 
on pages 30 to 33
director indemnity provisions
under the company’s articles of association the directors  
of the company have the benefit of a qualifying thirdparty 
indemnity provision which provides that they shall be 
indemnified by the company against certain liabilities as 
permitted by sections 232 and 234 of the companies act 2006 
and against costs incurred by them in relation to any liability for 
which they are indemnified the company has purchased and 
maintains insurance against directors’ and officers’ liabilities in 
relation to the company
share capital and control
details of the company’s share capital are contained in note 25 
to the financial statements on 31 december 2010 194217 582 
shares were provisionally allotted nil paid in connection with the 
rights issue announced on 13 december 2010 on 17 january 
2011 such 194217 582 shares were allotted fully paid  
no shares were repurchased in 2010 a total of 8361 shares 
were purchased on the open market on behalf of the 
shareholders who elected to participate in the dividend 
reinvestment plan
the rights and obligations attaching to the company’s ordinary 
shares being the only class of issued share capital as well  
as the powers of the company’s directors are set out in the 
company’s articles of association copies of which can be 
obtained from companies house or can be downloaded from 
the company’s website there are no restrictions on the voting 
rights attaching to the company’s ordinary shares or on the 
transfer of securities in the company no person holds 
securities in the company carrying special rights with regard  
to the control of the company the company is not aware of 
any agreements between holders of securities that may result  
in restrictions on the transfer of securities or on voting rights 
unless expressly specified to the contrary in the articles of 
association of the company the company’s articles of 
association may be amended by special resolution of the 
company’s shareholders
other than in relation to its borrowings which unless certain 
conditions are satisfied become repayable on a takeover the 
company is not party to any significant agreements that would 
take effect alter or terminate upon a change of control following 
a takeover bid
the company does not have agreements with any director or 
employee that would provide compensation for loss of office  
or employment resulting from a takeover
all of the company’s share schemes contain provisions relating 
to a change of control outstanding options and awards would 
normally vest and become exercisable on a change of control 
subject to the satisfaction of any performance conditions at  
that time
contractual arrangements 
the group has contractual and other arrangements with 
numerous third parties in support of its business operations 
the disclosure in this report of information about any such third 
parties is not considered to be necessary for an understanding 
of the development performance or position of the group’s 
business
report of the directors
for the year ended 31 december 2010 yule catto  co plc
annual report and accounts 2010 24
major shareholdings
other than the shareholdings disclosed as directors’ interests in 
the remuneration report as at 18 february 2011 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 
64111401 1886 direct interest 
old mutual asset 
managers uk ltd 22005930 647 indirect 
 
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 2011 annual general meeting to make market 
purchases of not more than 14566318 of the company’s 
ordinary shares in accordance with the terms of the special 
resolution passed at the 2010 annual general meeting  
a resolution will be tabled at the 2011 annual general meeting  
to renew this authority
employee involvement
the group is organised on a decentralised basis so  
as to promote greater employee involvement and better 
communications with employees each group company is 
encouraged to make its employees aware of the financial and 
economic factors affecting the performance of the company 
performance related bonus schemes are in operation in a 
number of group companies
a longterm share incentive plan for directors and senior 
executives was introduced in 2002 with the approval of 
shareholders
uk pension funds 
the trustees have reviewed the independent investment 
management of the assets of the company pension schemes  
in the uk and assured themselves of the security and controls 
in place in particular it is the trustees’ policy not to invest in 
yule catto shares nor lend money to the company
creditor payment policy
the group’s policy is to make payments to creditors and other 
suppliers in accordance with terms of payment agreed at the 
time the contract of supply is made subject to all the terms and 
conditions of the order being satisfied by the supplier trade 
creditor days of the company for the year ended 31 december 
2010 were 31 days 2009 25 days based on the ratio of trade 
creditors at the year end to the amounts invoiced during the 
year by trade creditors
charitable donations
charitable donations in the year amounted to £73507  
2009 £56208 there were no political donations during the year
statement as to disclosure of information to auditors
each director of the company confirms that so far as he  
is aware there is no relevant audit information of which the 
company’s auditors are 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 auditors are aware of that 
information for these purposes relevant audit information 
means information needed by the company’s auditors in 
connection with preparing their reports on pages 35 and 73 
this confirmation is given and should be interpreted in 
accordance with section 418 of the companies act 2006
corporate governance
the corporate governance report is set out on pages 26 to 29 
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 expiry of the £30 million multicurrency revolving credit 
facility on 24 december 2011 and its cancellation after the 
year end and
•	 the obligations associated with the pending acquisition  
of polymerlatex and the associated rights issue and debt 
funding arrangements as detailed in the prospectus dated  
13 december 2010
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
report of the directors continued yule catto  co plc
annual report and accounts 2010 25
introduction business review governance group financial statements company financial statements other information
principal risks and uncertainties
the directors have appropriately considered the group’s 
principal risks and uncertainties including the following
•	 conditions in the global economy economic fluctuations in 
customer industries and volatility and cyclicality of the global 
chemicals and polymers markets may adversely affect the 
results of operations financial condition and cash flows of  
the group
•	 volatility in raw material prices and energy prices may 
adversely affect the profitability of the group and its working 
capital position
•	 the failure of the group to procure key raw materials may 
lead to production interruptions that may adversely affect  
the profitability of the group and its working capital position
•	 the markets in which the group operates are highly 
competitive and the group may lose market share to other 
producers or sellers of water based polymers or to other 
products that can be substituted for the products of the 
group
•	 the group operates in a number of different geographies 
which may present different legal and regulatory risks  
in addition the group operates in a number of different tax 
regimes which may increase the volatility of the effective  
tax rate and cash tax rate of the group
•	 the ability of the group to compete is highly dependent on its 
ability to develop technological innovations to introduce new 
products and to protect its intellectual property trade secrets 
and knowhow failure to do so could have an adverse affect 
on the group 
•	 the group may be liable for damages based on product 
liability claims brought against its customers in enduse 
markets in addition compliance with extensive 
environmental health and safety laws and regulations could 
require material expenditure changes in the operations of  
the group or site remediation
•	 the manufacture storage and transportation of chemicals  
is inherently dangerous and any incidents relating to the 
hazards which the group faces may adversely affect its 
financial condition results of operations and reputation
•	 fluctuations in currency exchange rates may significantly 
impact the results of the operations of the group and may 
significantly affect the comparability of financial results 
between financial periods
•	 credit market conditions and credit ratings may restrict the 
ability of the group to obtain credit facilities or to refinance its 
existing debt facilities in the longer term in addition interest 
rate fluctuations and increases in bank lending margins  
may increase the group’s costs of borrowing in the longer 
term and 
•	 the group has funding risks relating to defined benefit 
pension schemes and any deterioration in the value of assets 
in which the pension scheme has invested as against the 
financial obligations to make payments to members of the 
schemes could have an adverse affect on the group
a description of how the company manages these risks  
is contained in the chief executive’s report and the  
financial review
key performance indicators 
management monitors a number of financial and nonfinancial 
key performance indicators which are disclosed within the 
chief executive’s report the financial review and corporate 
social responsibility report these key performance indicators 
include divisional sales and underlying operating profit net debt 
reportable safety incidents energy usage and water 
consumption 
cautionary statement
the purpose of this report is to provide information to the 
members of the company it contains certain forwardlooking 
statements with respect to the operations performance  
and financial condition of the group by their nature these 
statements involve uncertainty since future events and 
circumstances can cause results and developments to  
differ materially from those anticipated the forwardlooking 
statements reflect knowledge and information available at the 
date of preparation of this report and the company undertakes 
no obligation to update these forwardlooking statements 
nothing in this report should be construed as a profit forecast
auditors
a resolution to reappoint deloitte llp as the company’s 
auditors will be proposed at the annual general meeting
annual general meeting 
the annual general meeting will be held at 230pm on 
thursday 12 may 2011 at manor of groves hotel high wych 
sawbridgeworth hertfordshire cm21 0ju
by order of the board
r atkinson 
secretary
9 march 2011 yule catto  co plc
annual report and accounts 2010 26
corporate governance
this compliance statement is produced in relation to the 
combined code on corporate governance ‘the code’ which 
was published in june 2008 by the financial reporting council
statement of compliance 
the company considers that it has complied throughout the 
financial year ended 31 december 2010 with the provisions  
set out in section 1 of the code
application of the code 
the main principles of section 1 of the code were applied  
as follows
the board
operation of the board
the activities of the company are controlled by the board 
which during 2010 comprised two executive directors  
and six nonexecutive directors until 28 june 2010 when  
mr g r menzies resigned and the number of nonexecutive 
directors was reduced to five the roles of chairman and  
chief executive are clearly divided between mr p s wood 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 the nonexecutive 
directors all have wide business and boardroom experience 
gained in a broad range of business sectors
the board has reserved to itself a schedule of matters which 
includes setting longterm objectives for the group and the 
strategies to be employed in achieving them setting policies  
in the areas of safety health and the environment recruitment 
and employment risk management and treasury and subject 
to materiality thresholds decisions on the raising of capital 
financial commitments capital expenditure acquisitions  
and disposals and the prosecution defence and settlement  
of litigation
during 2010 the board held six scheduled meetings to review 
current and projected performance and to determine strategic 
issues and 9 meetings in connection with the acquisition of 
polymerlatex and the associated rights issue 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 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
the board has delegated to the chief executive 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 is responsible for all aspects of daytoday 
operational control of the group and execution of the group 
strategy the chief executive has established and chairs an 
executive committee whose other members are the divisional 
chief executives the finance director the deputy finance 
director the company secretary and the director of group 
human resources to assist him in the performance of his 
duties and which meets once a month the chairman receives 
the minutes of the executive committee and all directors 
receive a monthly trading summary and commentary from the 
finance director and an update report from the chief executive
board membership and balance
the chairman chief executive and senior independent director 
are identified on page 22 the chairmen and members of the 
audit nomination and remuneration committees are identified 
below the board considers dr a a dobbie and mr j k maiden 
to be independent in accordance with the provisions of the 
code mr g r menzies was considered to be independent  
up until his resignation
during 2010 the company was in compliance with the 
requirements of code provision a32 for ‘smaller’ companies  
to have at least two independent nonexecutive directors 
following the reentry of the company into the ftse 250 index  
on 14 september 2010 the board is seeking two additional 
independent nonexecutive directors in order to achieve a 
balance of at least half the board excluding the chairman 
comprising independent nonexecutive directors
the board held a total of 15 meetings in 2010 in addition the 
chairman held one separate meeting with the nonexecutive 
directors without the executive directors being present to 
appraise the performance of the executive management  
the nonexecutive directors also met once without the 
chairman to appraise his performance
the table below shows the number of meetings of the board 
audit remuneration and nomination committees held during 
the year and the number of meetings attended by each director 
where a director is unable to attend a board or committee 
meeting his views on agenda items are canvassed in advance 
of the meeting and incorporated into the discussions
 
number of 
meetings held board audit remuneration nomination
15 3 4 3
number of 
meetings attended
d c blackwood 1515 na na na
a g catto 1515 na na na
a a dobbie 1515 33 44 33
lee hau hian 1515 na na na
j k maiden 1515 33 44 33
g r menzies
1
55 11 23 00
a m whitfield 1515 na na 33
p s wood 1515 na na 33
1 resigned on 28 june 2010 yule catto  co plc
annual report and accounts 2010 27
introduction business review governance group financial statements company financial statements other information
induction and training
induction arrangements are in place in order to ensure  
new directors receive a full formal and tailored induction on 
appointment the skills and knowledge of board members  
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 2010 at a meeting of the nonexecutive directors 
chaired by the chairman
•	 a meeting of the nonexecutive directors in the absence of 
the chairman chaired by the senior independent director 
was held in november 2010 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 self
assessment 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 2010
nonexecutive directors are appointed for threeyear terms 
those nonexecutive directors who have served longer than 
nine years on the board are subject to annual reelection by 
shareholders with other directors subject to reelection at  
least every three years
shareholder communications
dialogue with institutional investors is conducted on a regular 
basis by the chief executive and the finance director 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 and the finance director at 
sufficient shareholder presentations and meetings that he fully 
understands the issues and concerns of major shareholders 
the chief executive 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 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 wwwyulecattocom  
to communicate with its shareholders where it publishes interim 
and full year results company announcements share price  
and corporate governance and other investor information
board committees
the board has formally established audit nomination 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
audit committee
during 2010 the audit committee comprised mr j k maiden 
chairman dr a a dobbie and mr g r menzies until 28 june 
2010 when mr menzies resigned from the board following 
which the committee comprised mr maiden and dr dobbie  
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 position outside 
the group the committee has established a detailed remit 
regarding the application of financial reporting and internal 
control principles which covers
•	 monitoring the integrity of the financial statements of the 
group and any formal announcements relating to the  
group’s financial performance and reviewing significant 
financial reporting judgements contained therein
•	 reviewing the group’s internal financial controls and the 
group’s internal control and risk management systems
the finance director and senior members of his department 
attend meetings of the committee as part of the review of the 
group’s interim and final statements prior to their submission  
to the board the committee meets periodically with the 
company’s auditors to discuss the adequacy of the group’s 
financial management internal controls and information 
systems the committee’s remit also includes the review  
of the terms of engagement effectiveness independence  
and objectivity of the auditors including the extent of nonaudit 
services and fees payable to the auditors which is carried  
out and discussed with the auditors on a periodic basis with 
regard to seeking to ensure the independence and objectivity  
of the auditors the audit committee’s policy is to avoid the 
auditors providing services in areas which may create or be 
perceived to create a conflict of interest accordingly other than 
in circumstances where time constraints render it impractical or 
assignments are of a minor nature the auditors are not invited 
to tender or propose for services of the following nature 
corporate finance legal information technology and systems 
recruitment or remuneration accounting internal audit or 
control acquisition due diligence valuations or appraisals 
actuarial or general business consulting in addition the auditors 
have been requested not to provide services to executive 
directors or senior executives nonexecutive directors are 
required to disclose any relationship they have with the auditors yule catto  co plc
annual report and accounts 2010 28
corporate governance continued
the group does not have an internal audit function  
the committee has reviewed this during the year and has 
concluded that there are in place appropriate procedures  
for assuring the integrity and effectiveness of the group’s 
governance risk management and control processes  
the board has accepted this recommendation
the current auditors were first appointed in 2002 and their 
appointment was reviewed by the committee in 2009 details of 
audit and nonaudit fees paid to them in 2010 are set out in note 
6 on page 49 nonaudit fees principally relate to miscellaneous 
services rendered in connection with the pending acquisition of 
polymerlatex which were not considered to give rise to any 
conflict of interest the board accepts the committee’s 
recommendation that the current auditors be proposed for 
reappointment at the forthcoming annual general meeting 
the committee met formally 3 times during 2010 principally 
to discharge its duties in connection with the 2009 report  
and financial statements the 2010 interim financial statements 
and the scope and planning of the audit of the 2010 report  
and financial statements in addition the chairman of the 
committee had regular dialogue with the auditors during  
the course of the year as well as complying with the terms  
of its remit during the year the committee carried out a review 
of its content
nomination committee
during 2010 the nomination committee comprised  
mr p s wood chairman dr a a dobbie mr j k maiden  
mr g r menzies and mr a m whitfield on 28 june 2010  
mr menzies resigned from the committee and the board  
the committee is responsible for the regular review of the 
structure size and composition of the board and the making  
of recommendations with regard to any changes leading the 
process for board appointments and nominating candidates for 
nonexecutive positions and considering succession planning 
the committee is leading the process seeking two additional 
independent nonexecutive directors referred to above  
the nomination committee held 3 meetings during 2010
remuneration committee
all matters relating to the remuneration committee and 
remuneration are covered in the remuneration report set 
out on pages 30 to 33
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 auditors are set out on pages  
34 and 24 respectively statements by the auditors about their 
reporting responsibilities are set out on pages 35 and 73 
respectively a report on the approach to internal control is  
set out below the directors endeavour to make the annual 
report and financial statements as informative and 
understandable as possible
internal control
the board of directors has ultimate responsibility for the 
group’s system of internal control and sets appropriate  
policies to ensure that the code requirements on internal 
control are met
the system of internal control deployed within the group  
is designed to reduce the risks of failure to meet business 
objectives but these risks cannot be eliminated the internal 
control system adopted can therefore only provide reasonable 
not absolute assurance about meeting such business 
objectives or against material misstatement or loss
a 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 2010 and up to the date of approval  
of the annual report and accounts and accords with the 
turnbull guidance
the system is applied at all material subsidiaries and a  
‘bottom up’ risk profile is created by evaluating the information 
at business divisional and group level individual directors 
within yule catto’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 at a board meeting of the subsidiary 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 yule catto audit committee
the individual business risk reports are formally reviewed at 
a board meeting of the subsidiary every six months out of 
which a revised report is submitted which identifies changes  
in the risk environment
the process was last reviewed by the yule catto board of 
directors in march 2010
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 2010 are reviewed in the reports of the 
chairman chief executive group finance director and the 
directors’ 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 14 to 21 reviews the group’s performance in this 
connection in 2010 yule catto  co plc
annual report and accounts 2010 29
introduction business review governance group financial statements company financial statements other information
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 auditors 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 and
•	 consideration of a consolidated risk management report 
setting out the main conclusions from the internal control 
process
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
environmental social and governance matters
in january 2007 the association of british insurers ‘abi’ 
published a revised version of its guidelines on responsible 
investment disclosure these guidelines require statements  
on the extent to which environmental social and governance 
matters are taken into account by the board and identified 
assessed managed and monitored particularly in relation  
to the risks and opportunities they present to the value of  
the company
the company is a member of the ftse4good index
environmental matters
the maintenance of high standards of environmental  
together with health and safety protection is central to the 
company’s business a separate statement on safety health 
and environmental ‘she’ matters has been a feature of the 
annual report for a number of years the corporate social 
responsibility report statement on pages 14 to 21 incorporates 
the abi guidelines and includes a report on the initiatives the 
company has adopted regarding sustainable development
social and ethical matters
the board takes account of social and ethical matters as part 
of its review of internal control which by virtue of its approach  
to risk identification covers areas which encompass social and 
ethical matters
the board is conscious of its responsibility to the communities 
in which the group’s businesses operate and is supportive of 
local initiatives by management
the board is also aware of the reputational risk associated  
with social and ethical issues and has a groupwide code of 
business conduct on corruption and anticompetitive activities 
which is available on the company’s website and upon request 
from the company secretary the purpose of this code is to 
ensure that the group’s employees have a clear understanding 
of the principles that are important in these areas when 
conducting the group’s business the application of the  
code is explained to senior management at regular intervals  
and they are charged with its communication throughout  
their businesses supported by internal and external training  
a compliance procedure was initiated in 2007 involving annual 
certification by the senior management of each operating 
company and since 2009 a procedure for maintaining a register 
of and where appropriate gaining prior approval for gifts 
entertainment and corporate hospitality has been instituted  
a report is made to the audit committee annually on the code 
and the company’s whistleblowing procedure
governance
the board’s approach to governance training of directors  
and identification and assessment of risk is set out above yule catto  co plc
annual report and accounts 2010 30
directors’ remuneration report
the following report complies with the relevant provisions of the 
large and mediumsized companies and groups accounts 
and reports regulations 2008 and satisfies the requirements 
of the listing rules of the financial services authority and  
the combined code on corporate governance which was 
published in june 2008 by the financial reporting council  
all figures relating to shares including shareholdings and share 
options have been restated to take account of the effect of  
the rights issue announced on 13 december 2010
remuneration committee 
during 2010 the remuneration committee comprised  
dr a a dobbie chairman mr j k maiden and mr g r menzies 
until 28 june 2010 when mr menzies resigned from the board 
following which the committee comprised dr dobbie and  
mr maiden 
the committee is responsible for determining the company’s 
policy on executive remuneration and the specific remuneration 
for the chairman and each of the executive directors including 
pension rights the committee is also responsible for reviewing 
the remuneration of senior executives throughout the group 
the committee was assisted in its deliberations on executive 
directors’ remuneration by the chief executive and took advice 
from and used the services of hewitt new bridge street hnbs 
– a trading name of aon hewitt limited and grant thornton uk 
llp grant thornton hewitt associates became part of aon 
group in 2010 and aon limited provide insurance broking 
services to the group grant thornton provides corporate tax 
advice to the company the board as a whole determines the 
remuneration of the nonexecutive directors including members 
of the remuneration committee 
 
the remuneration committee met 4 times during 2010
remuneration policy
nonexecutive directors’ remuneration
it is the board’s policy to review fees paid to nonexecutive 
directors periodically a review of nonexecutive director 
remuneration was last carried out in december 2006  
with the assistance of advice provided by monks part of 
pricewaterhousecoopers llp  with effect from 1 january 2007 
nonexecutive director fees are as follows £30000 pa for those 
who do not sit on a committee £33000 pa for those who do 
sit on a committee £36000 pa for those who are committee 
chairmen the fees payable to the chairman of the board are 
£110000 pa
nonexecutive directors are not eligible to receive awards under 
any of the company’s share schemes or other employee benefit 
schemes nor does the company make any contribution to their 
pension arrangements
executive directors’ remuneration
the company’s policy for 2010 was and continues to be  
to structure executive pay in such a way that key executives 
may be recruited motivated and retained through being  
offered remuneration packages that are competitive the major 
element of the remuneration package of senior executives is  
a competitive basic salary which is reviewed with effect from  
1 january each year for this purpose the committee uses 
industry and sector data and surveys as appropriate to help 
inform its decisions and to provide a reference point for the 
purposes of recommending basic salaries commensurate with 
operational performance and attainment of strategic objectives 
whilst not adopting set formulae the committee is also sensitive 
to the pay and employment conditions elsewhere in the  
group when considering annual salary increases and total 
remuneration in awarding the executive directors a 3 increase 
in basic salary with effect from 1 january 2010 the committee 
took into account the level of increases made to employees  
of the group in the uk which were in line with this figure  
the increase in basic salary with effect from 1 january 2011 
noted below under ‘remuneration details’ were awarded by  
the committee following consideration of the additional duties 
and responsibilities that will be required of the executive 
directors in connection with the acquisition of polymerlatex and 
the increased scale and market capitalisation of the group the 
committee also has the discretion to consider the company’s 
performance on environmental social and governance matters 
when setting the remuneration of the executive directors
in addition the remuneration committee has overseen  
the introduction of incentives which are designed to reward  
the achievement of predetermined targets by the individuals 
concerned these incentives which were designed in 
accordance with the provisions of schedule a to the code 
currently comprise an annual cash incentive plan and 
membership of an approved longer term incentive plan the 
‘performance plan’ the committee does not consider that  
the incentive structure for senior executives gives rise to 
environmental social or governance risks by inadvertently 
motivating irresponsible behaviour
•	 annual incentive arrangements
for 2010 the company operated an incentive plan the 
growth securities ownership plan gsop for the executive 
directors and senior group employees related to growth in 
profit before tax as a result of the growth achieved in 2010 
maximum payments will be made to the executive directors 
and other participants under the gsop  the maximum net 
amount payable to executive directors in 2010 under the 
gsop was 60 and 80 of basic pay for the finance 
director and the chief executive respectively 
for senior operational management the 2010 annual cash 
bonus payments were based on appropriate combinations  
of profit cash flow working capital and safety and 
environmental targets in 2010 the bonuses were subject to 
limits of between 50 to 60 of basic pay depending on levels 
of seniority yule catto  co plc
annual report and accounts 2010 31
introduction business review governance group financial statements company financial statements other information
•	 share plan
the performance plan was introduced in 2002 following 
shareholder approval at that year’s annual general meeting 
and covers the executive directors senior group employees 
and senior operational management an award consists of a 
right to acquire shares which can be exercised for a nominal 
price subject to the company satisfying performance 
conditions the value of shares awarded under the 
performance plan in any financial year to any individual 
currently may not exceed 100 of their annual basic salary 
following review by the remuneration committee and 
shareholder approval awards made since 2006 have been 
subject to performance conditions related to relative and 
absolute growth in total shareholder return in order to better 
align the interests of the participants in the performance plan 
with shareholders details of performance conditions are set 
out at page 33 an award made prior to 2011 which vests in 
accordance with the performance conditions will only be 
exercisable and allocated shares may only be transferred as 
to onehalf after the third anniversary of the date the award is 
made and as to the remaining half after the fourth anniversary 
of the date the award is made an award made from 2011 
onwards which vests will be exercisable and allocated shares 
will be transferred in full after the third anniversary of the  
date the award is made in order to further align the interests 
of the executive directors and shareholders there are share 
ownership requirements in connection with the performance 
plan requiring the retention of 30 of the shares acquired by 
executive directors until such time as ordinary shares in the 
company have been built up to a level equivalent in value  
to their annual basic salary 
during 2010 1132667 shares were awarded under the 
performance plan 
the shares comprised in the awards granted in 2008 have 
vested in full as the performance conditions have been met 
•	 pension arrangements 
during 2010 mr a m whitfield and mr d c blackwood 
became eligible to participate in the group personal pension 
plan and receive payments from the company which they 
may use either in conjunction with that plan andor to enable 
them to make their own arrangements there are no 
unfunded pension promises or similar arrangements for 
directors 
•	 remuneration details
the amount and components of the directors’ remuneration 
are set out below at the 2010 salary review basic salaries  
for the executive directors were increased with effect from  
1 january 2011 to £430000 132 increase and £270000 
10 increase for the chief executive and finance director 
respectively no elements of remuneration other than basic 
salary are pensionable 
•	 service contracts
no director other than mr a m whitfield and  
mr d c blackwood has a service contract mr whitfield’s 
contract is dated 22 november 2005 has no unexpired term  
provides for a notice period of one year and makes no 
provision for predetermined compensation on termination 
mr blackwood’s contract is dated 12 september 2007  has 
no unexpired term provides for a notice period of one year 
and makes no provision for predetermined compensation  
on termination 
the remuneration committee’s policy on contracts and 
notice periods for executive directors is to seek to comply 
with best practices in corporate governance 
all nonexecutive directors are appointed in writing the first 
year of each director’s appointment is shown in the directors’ 
biographies on page 22 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 27
•	 nonexecutive directorships held by the executive directors
mr whitfield is a nonexecutive director of the chemical 
industries association limited for which he does not receive 
any remuneration mr blackwood is a member of the board 
for actuarial standards for which he receives and retains 
£10000 pa respectively
•	 total shareholder return over five years
the following graph compares the share price performance 
of the company by reference to total shareholder return with 
that of the ftse 250 which is considered to be the most 
appropriate index against which to make a comparison
agm approval
the directors’ remuneration report has been submitted to the 
2011 annual general meeting for approval
yule catto shareholder return versus ftse 250 total return 
cumulative years ended 31 december
0
50
100
150
200
250
10 09 08 07 06 05
 yule catto
 ftse 250 yule catto  co plc
annual report and accounts 2010 32
directors’ remuneration report continued
audited information
directors’ remuneration
emoluments
2010
£’000
2009
£’000
the total amounts for directors’ remuneration and other benefits were
emoluments 1381 1366
the emoluments of the individual executive directors holding office during the year were
 base
salary
2010
£
annual
incentive
arrangement
2010
£
benefits
2010
£
total
2010
£
total
2009
£
a m whitfield – highest paid director 380000 304000 27374 711374 693071 
d c blackwood 245500 147300 17356 410156 399860 
the annual incentive arrangement is discussed in more detail on page 30 of the remuneration report  
pension arrangements
to fund their pension arrangements mr a m whitfield and mr d c blackwood received the following payments 
2010
£
2009
£
a m whitfield 95000 92500 
d c blackwood 49100 47900 
directors’ fees
the fees of the individual nonexecutive directors holding office during the year were 
2010
£
2009
£
p s wood – chairman 110000 103833
the hon a g catto 30000 30000
dr a a dobbie 36000 35500
dato’ lee hau hian 30000 30000
j k maiden 36000 36000
g r menzies 18000 30000
260000 265333 
the nonexecutive directors receive no other remuneration in addition to their fee 
shareholdings
given below are details of the interests of the directors in the share capital of the company at 31 december 2010  
and 31 december 2009
 ordinary shares options
2010
 restated
2009
 restated
2009
prior to
restatement 2010 2009
d c blackwood 40833 40833 17500 1345442 1126328
the hon a g catto 2046955 3073377 1315604 – –
7741950 12177020 5197093 – –
dr a a dobbie 114853 114853 49223 – –
dato’ lee hau hian 24763 24763 10613 – –
j k maiden nil nil nil – –
a m whitfield 14000 14000 6000 2078889 1949086
p s wood 51914 51914 22249 – –
 nonbeneficial interest
on 4 january 2011 mr j k maiden purchased 2523 shares all directors holding shares on 13 december 2010 other than the 
hon a g catto took up their full rights under the terms of the rights issue announced on that date
between 31 december 2010 and 19 february 2011 there were no other changes in the directors’ holdings yule catto  co plc
annual report and accounts 2010 33
introduction business review governance group financial statements company financial statements other information
executive options
at 
010110
 number of options during the year
at
311210
exercise 
price
notional 
value
 £
exercise
 period granted lapsed exercised
a m whitfield 209356 – 209356 – – – – –
346738 i – – – 346738 – 696943 20112018
1392992ii – – – 1392992 – 2799914 20122019
– 339159iii – – 339159 – 681710 20132020
1949086 339159 209356 – 2078889 – 4178567
 
at 
010110
 number of options during the year
at
311210
exercise 
price
notional 
value
 £
exercise
 period granted lapsed exercised
d c blackwood 224647i – – – 224647 – 451540 20112018
901681ii – – – 901681 – 1812379 20122019
– 219114iii – – 219114 – 440419 20132020
1126328 219114 – – 1345442 – 2704338
i the awards made in 2008 to mr a m whitfield and mr d c blackwood were subject to the following performance conditions 
  a absolute total shareholder return condition vesting in respect of 50 of the shares comprised in the award upon the 
company’s total shareholder return ‘tsr’ over a three year period ended on 31 december 2010 increasing by the rise  
in rpi plus 1576 or more compared with the company’s tsr at the start of the three year performance period vesting  
in respect of 25 of the shares comprised in the award upon the company’s tsr increasing by the rise in rpi plus 927  
over the three year performance period and vesting in respect of between 25 to 50 of the shares for performance  
between these points on a straight line basis with lesser performance resulting in no part of the 50 of the shares vesting
  b relative total shareholder return condition vesting in respect of 50 of the shares comprised in the award upon the growth 
in the company’s tsr over the three year performance period exceeding the growth of the ftse 250 total return index  
over the same three year period by 769 or more vesting in respect of 5 of the shares comprised in the award upon  
the growth in the company’s tsr over the three year performance period being equal to the growth of the ftse total return 
index over the same period and vesting in respect of between 5 to 50 of the shares for performance between these points 
on a straight line basis with lesser performance resulting in no part of the 50 of the shares vesting  
 
the 2008 awards have vested in full due to the maximum performance criteria being exceeded 
ii  for the awards made in 2009 the same performance conditions apply as for the awards made in 2008 measured over a three 
year period ending on 31 december 2011
iii  for the awards made in 2010 the same performance conditions apply as for the awards made in 2008 measured over a three 
year period ending on 31 december 2012
the notional value of unexercised share options is based on the midmarket price of a share on 31 december 2010 of 201 pence 
during the year the market price as restated for the effect of the rights issue announced on 13 december 2010 ranged between 
10365 pence and 20279 pence
by order of the board
r atkinson 
secretary
9 march 2011 yule catto  co plc
annual report and accounts 2010 34
statement of directors’ responsibilities 
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 judgments and accounting estimates that are 
reasonable and prudent
•	 state whether applicable uk accounting standards have 
been followed subject to any material departures disclosed 
and explained in the financial statements and
•	 prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the company will 
continue in business
in preparing the group financial statements international 
accounting standard 1 requires that directors
•	 properly select and apply accounting policies
•	 present information including accounting policies in a 
manner that provides relevant reliable comparable and 
understandable information 
•	 provide additional disclosures when compliance with the 
specific requirements in ifrss are insufficient to enable users 
to understand the impact of particular transactions other 
events and conditions on the entity’s financial position and 
financial performance and
•	 make an assessment of the company’s ability to continue  
as a going concern
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the company and enable them to 
ensure that the financial statements comply with the companies 
act 2006 they are also responsible for safeguarding the assets 
of the company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities
other matters
the directors are responsible for the maintenance and integrity 
of the corporate and financial information included on the 
company’s website legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions
responsibility statement 
we confirm that to the best of our knowledge
•	 the financial statements prepared in accordance with the 
relevant financial reporting framework give a true and fair 
view of the assets liabilities financial position and profit or 
loss of the company and the undertakings included in the 
consolidation taken as a whole and
•	 the management report includes a fair review of the 
development and performance of the business and the 
position of the company and the undertakings included  
in the consolidation taken as a whole together with a 
description of the principal risks and uncertainties that  
they face
by order of the board 
a m whitfield d c blackwood
chief executive group finance director
9 march 2011 yule catto  co plc
annual report and accounts 2010 35
introduction business review governance group financial statements company financial statements other information
independent auditors’ report  
to the members of yule catto  co plc
we have audited the group financial statements of  
yule catto  co plc for the year ended 31 december 2010 
which comprise the consolidated income statement the 
consolidated statement of comprehensive income the 
consolidated statement of changes in equity the consolidated 
balance sheet the consolidated cash flow statement and the 
related notes 1 to 37 the financial reporting framework that  
has been applied in their preparation is applicable law and 
international financial reporting standards ‘ifrss’ as  
adopted by the european union
this report is made solely to the company’s members  
as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken so 
that we might state to the company’s members those matters 
we are required to state to them in an auditor’s report and for  
no other purpose to the fullest extent permitted by law we do 
not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit 
work for this report or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities 
statement the directors are responsible for the preparation  
of the group financial statements and for being satisfied that 
they give a true and fair view our responsibility is to audit  
and express an opinion on the group financial statements in 
accordance with applicable law and international standards  
on auditing uk and ireland those standards require us to 
comply with the auditing practices board’s ethical standards 
for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or  
error this includes an assessment of whether the accounting 
policies are appropriate to the group’s circumstances and  
have been consistently applied and adequately disclosed  
the reasonableness of significant accounting estimates made 
by the directors and the overall presentation of the financial 
statements
opinion on financial statements
in our opinion the group financial statements
•	 give a true and fair view of the state of the group’s affairs as at 
31 december 2010 and of its profit for the year then ended
•	 have been properly prepared in accordance with ifrss as 
adopted by the european union and
•	 have been prepared in accordance with the requirements of 
the companies act 2006 and article 4 of the ias regulation
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the directors’ report for 
the financial year for which the group financial statements are 
prepared is consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to 
you if in our opinion
•	 certain disclosures of directors’ remuneration specified by law 
are not made or
•	 we have not received all the information and explanations we 
require for our audit
under the listing rules we are required to review
•	 the directors’ statement contained within directors’ report 
in relation to going concern 
•	 the part of the corporate governance statement relating  
to the company’s compliance with the nine provisions of the 
june 2008 combined code specified for our review and
•	 certain elements of the report to shareholders by the board 
on directors’ remuneration
other matter
we have reported separately on the parent company financial 
statements of yule catto  co plc for the year ended  
31 december 2010 and on the information in the directors’ 
remuneration report that is described as having been audited 
stuart henderson senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory auditor
cambridge united kingdom
9 march 2011 yule catto  co plc
annual report and accounts 2010 36
consolidated income statement
for the year ended 31 december 2010
 2010 2009
note
underlying 
performance
£’000
special
items
£’000
ifrs
£’000
underlying
performance
£’000
special
items
£’000
ifrs
£’000
continuing operations
group revenue 45 626765 5689 632454 516712 11236 527948
share of joint ventures’ revenue 45 19026 – 19026 15450 – 15450
total sales 645791 5689 651480 532162 11236 543398 
group revenue 626765 5689 632454 516712 11236 527948 
company and subsidiaries before 
 special items 51951 – 51951 48174 – 48174
impairment of goodwill 3 – – – – 30000 30000
acquisition costs 3 – 4182 4182 – – – 
operations sold or closed  
 during the year 4 – 12303 12303 – 1990 1990
company and subsidiaries 51951 8121 60072 48174 28010 20164 
share of joint ventures 45 2934 – 2934 1242 – 1242 
operating profitloss 5 54885 8121 63006 49416 28010 21406
interest payable 8 8266 – 8266 10308 – 10308
interest receivable 8 426 – 426 439 – 439 
7840 – 7840 9869 – 9869
fair value adjustment 38 – 2645 2645 – 4401 4401
finance costs 7840 2645 5195 9869 4401 14270
profitloss before taxation 47045 10766 57811 39547 32411 7136
taxation 9 9095 6558 2537 7981 9065 1084 
profitloss for the year from  
 continuing operations 37950 17324 55274 31566 23346 8220 
discontinued operations
profit for the year from  
 discontinued operations 3 – – – – 3668 3668
profitloss for the year 37950 17324 55274 31566 19678 11888
profit attributable to  
 minority interests 26 1300 4236 5536 1572 630 2202
profitloss attributable to  
 equity holders of the parent 26 36650 13088 49738 29994 20308 9686
37950 17324 55274 31566 19678 11888
earnings per share
from continuing operations
– basic 12 162p 58p 220p 133p 107p 26p 
– diluted 12 157p 57p 214p 129p 103p 26p
from continuing and discontinued operations
– basic 12 162p 58p 220p 133p 91p 42p
– diluted 12 157p 57p 214p 129p 87p 42p
special items 
the special items are shown in more detail in note 3 
 as restated for rights issue – see note 12 yule catto  co plc
annual report and accounts 2010 37
introduction business review governance group financial statements company financial statements other information
consolidated statement of comprehensive income
for the year ended 31 december 2010
 2010 2009
minority
interests
£’000
equity 
holders 
of the parent
£’000
total
£’000
minority
interests
£’000
equity
holders of
the parent
£’000
total
£’000
profit for the year 5536 49738 55274 2202 9686 11888 
actuarial gains and losses – 76 76 – 12619 12619
gainslosses on a hedge of a net  
 investment taken to equity – 1732 1732 – 253 253
gainslosses on cash flow hedges  
 arising during the period – 4495 4495 – 678 678
exchange differences on translation  
 of foreign operations 649 6030 6679 825 6933 7758
tax relating to components of other 
 comprehensive income – 300 300 – 306 306 
other comprehensive income for the period 649 12633 13282 825 20177 21002
total comprehensive income for the period 6185 62371 68556 1377 10491 9114
 
consolidated statement of changes in equity
share
capital
£’000
share
premium
£’000
capital
redemption
reserve
£’000
own 
shares
£’000
hedging and
translation
reserve
£’000
cash flow
hedging
reserve
£’000
retained
earnings
£’000
total
£’000
minority
interest
£’000
total
equity
£’000
at 1 january 2010 14566 33034 949 – 934 – 19 47634 6903 54537
profit for the year – – – – – – 49738 49738 5536 55274
other comprehensive 
  income for the period – – – – 7762 4495 376 12633 649 13282
total comprehensive 
  income for the period – – – – 7762 4495 50114 62371 6185 68556
dividends paid – – – – – – 2913 2913 6585 9498
investment by 
  minority interest – – – – – – – – 130 130
divestment by 
  minority interest – – – – – – – – 384 384
sharebased payments – – – – – – 776 776 – 776
at 31 december 2010 14566 33034 949 – 6828 4495 46444 106316 6249 112565
share
capital
£’000
share
premium
£’000
capital
redemption
reserve
£’000
own 
shares
£’000
hedging and
translation
reserve
£’000
cash flow
hedging
reserve
£’000
retained
earnings
£’000
total
£’000
minority
interest
£’000
total
equity
£’000
at 1 january 2009 14566 33034 949 – 6252 678 2056 57535 9157 66692
profit for the year – – – – – – 9686 9686 2202 11888
other comprehensive  
  income for the period – – – – 7186 678 12313 20177 825 21002
total comprehensive  
  income for the period – – – – 7186 678 2627 10491 1377 9114
dividends paid – – – – – – – – 3631 3631
shares purchased by  
  esop trust 47 – – – 47 – 47
sharebased payments – – – 47 – – 590 543 – 543
at 31 december 2009 14566 33034 949 – 934 – 19 47634 6903 54537 yule catto  co plc
annual report and accounts 2010 38
consolidated balance sheet
31 december 2010
note
2010
£’000
2009
£’000
noncurrent assets
goodwill 14 124027 124027
other intangible assets 15 363 604
property plant and equipment 16 102568 103815
deferred tax assets 10 161 1139
investment in joint ventures 17 3716 3798
230835 233383
current assets
inventories 18 65379 56145
trade and other receivables 19 111285 99006
cash and cash equivalents 20 36211 42384
derivatives at fair value 21 22765 11763
total current assets 235640 209298
current liabilities
borrowings 20 9876 38924
trade and other payables 23 140079 125609
current tax liability 9 28763 34556
total current liabilities 178718 199089
noncurrent liabilities
borrowings 20 102379 101106
trade and other payables 23 144 216
deferred tax liability 10 6672 9044
post retirement benefit obligations 24 65997 78689
175192 189055
net assets 112565 54537
equity 
called up share capital 25 14566 14566
share premium 26 33034 33034
capital redemption reserve 26 949 949
hedging and translation reserve 26 6828 934
cash flow hedging reserve 26 4495 –
retained earnings 26 46444 19
equity attributable to equity holders of the parent 106316 47634
minority interests 26 6249 6903
total equity 112565 54537
analysis of net borrowings
cash and cash equivalents 20 36211 42384 
current borrowings 20 9876 38924
noncurrent borrowings 20 102379 101106
net borrowings 76044 97646
deduct special items 20 12674 9608
net borrowings underlying performance 63370 88038
 
the financial statements were approved by the board of directors and authorised for issue on 9 march 2011 they are signed  
on its behalf by 
 
a m whitfield 
d c blackwood 
directors 
  yule catto  co plc
annual report and accounts 2010 39
introduction business review governance group financial statements company financial statements other information
consolidated cash flow statement
for the year ended 31 december 2010
note
 2010 2009
£’000 £’000 £’000 £’000
operating
cash generated from operations 27 42228 64499 
 interest received 426 439 
 interest paid 9630 10959
net interest paid 9204 10520
 uk corporation tax paid 39 139
 overseas corporate tax paid 8693 6673
total tax paid 8732 6812
net cash inflow from operating activities 24292 47167 
investing 
dividends received from joint ventures 17 2667 1899 
 purchase of property plant and equipment 10592 8687
 sale of property plant and equipment 43 2253 
net capital expenditure and financial investment 10549 6434
 purchase of businesses 29 371 – 
 sale of businesses 28 16075 8760 
net cash impact of acquisitions and disposals 15704 8760 
net cash inflow from investing activities 7822 4225 
financing
equity dividends paid 11 2913 – 
dividends paid to minority interests 26 6585 3631
investment by minority shareholder 130 – 
purchase of own shares 26 – 47
repayment of borrowings 30 35978 33472
proceeds of noncurrent borrowings – 19740 
net cash outflow from financing activities 45346 17410
decreaseincrease in cash and bank overdrafts during the year 13232 33982 
comprised of
cash and cash equivalents 30 10657 20157 
bank overdrafts 30 2575 13825 
13232 33982 
reconciliation of net cash flow from operating activities  
to movement in net borrowings
net cash inflow from operating activities 24292 47167 
add back dividends received from joint ventures 17 2667 1899 
less net capital expenditure and financial investment 10549 6434
less dividends paid to minority interests 26 6585 3631
free cash flow before dividends 9825 39001 
net cash impact of acquisitions and disposals 2829 15704 8760 
investment by minority shareholder 130 –
purchase of own shares 26 – 47
equity dividends paid 11 2913 – 
exchange movements 1922 270
movement in net borrowings underlying performance 24668 47444 yule catto  co plc
annual report and accounts 2010 40
notes to the consolidated financial statements
31 december 2010
1 general information
yule catto  co plc is a company incorporated in the united 
kingdom under the companies act the address of the 
registered office is given on page 22 
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
in the current year the following new and revised standards 
have been adopted 
•	 ifrs 2 amended 2009 – share based payments
•	 ifrs 3 amended 2008 – business combinations
•	 ias 27 amended 2008 – consolidated and separate 
financial statements
•	 ias 28 amended 2008 – investments in associate
•	 ias 39 amended 2008 – eligible hedged items
•	 ifric 17 – distributions of noncash assets to owners
•	 the improvements to ifrss may 2009
no amendments to these financial statements have been  
made as a result of adopting these new and revised standards 
and interpretations except the expensing of acquisition costs  
as incurred
at the date of authorisation of these financial statements  
the following standards and interpretations which have not 
been applied in these financial statements were in issue but  
not yet effective 
•	 ifrs 9 – financial instruments – classification and 
measurement
•	 ias 24 amended 2009 – related party disclosures
•	 ias 32 amended 2009 – classification of rights issue
•	 ifric 14 amended 2009 – prepayments of a minimum 
funding requirement
•	 ifric 19 – extinguishing financial liabilities with equity 
instruments
all amendments to the standards noted above result from  
the 2010 annual improvement process
the directors do not anticipate that the adoption of these 
standards and interpretations in future periods will have  
a material impact on the financial statements of the group
2 significant accounting policies
basis of accounting
the financial statements have been prepared in accordance 
with international financial reporting standards ‘ifrss’  
the financial statements have also been prepared in 
accordance with ifrss adopted by the european union and 
therefore the group financial statements comply with article 4 
of the eu ias regulation the financial statements have been 
prepared on the historical cost basis except for the revaluation 
of certain properties and financial instruments as discussed in 
the report of the directors on page 24 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 subsequently any losses applicable to the 
minority interest in excess of the minority interest are allocated 
against the interests of the parent except to the extent that the 
minority has a binding obligation and is able to make an 
additional investment to cover the losses
all intragroup transactions balances income and expenses 
are eliminated on consolidation yule catto  co plc
annual report and accounts 2010 41
introduction business review governance group financial statements company financial statements other information
2 significant accounting policies continued
goodwill
goodwill arising on consolidation represents the excess of the 
cost of acquisition over the group’s interest in the fair value of the 
identifiable assets and liabilities of a subsidiary associate or jointly 
controlled entity at the date of acquisition goodwill is recognised 
as an asset and reviewed for impairment at least annually any 
impairment is recognised immediately in the consolidated income 
statement and is not subsequently reversed 
for the purpose of impairment testing goodwill is allocated to 
each of the group’s cash generating units expected to benefit 
from the synergies of the combination cashgenerating units  
to which goodwill has been allocated are tested for impairment 
annually or more frequently when there is an indication that the 
unit may be impaired if the recoverable amount of the cash
generating unit is less than the carrying amount of the unit the 
impairment loss is allocated first to reduce the carrying amount 
of any goodwill allocated to the unit and then to the other assets 
of the unit prorata on the basis of the carrying amount of each 
asset in the unit 
on disposal of a subsidiary associate or jointly controlled  
entity the attributable amount of goodwill is included in the 
determination of the profit or loss on disposal
goodwill arising on acquisitions before the date of transition  
to ifrss has been retained at the previous uk gaap amounts 
subject to being tested for impairment at that date goodwill 
written off to reserves under uk gaap prior to 1998 has not 
been reinstated and is not included in determining any 
subsequent profit or loss on disposal
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 probable that the asset created will generate future 
economic benefits and
•	 the development cost of the asset can be measured reliably
no research or development costs met the criteria for required 
capitalisation under 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 net of 
depreciation and any provision for impairment except for 
freehold land and land grants in malaysia which are not 
depreciated the cost or valuation 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 tangible and intangible assets excluding goodwill
at each balance sheet date the group reviews the carrying 
amounts of its tangible and intangible assets to determine 
whether there is any indication that those assets have suffered 
an impairment loss if any such indication exists the recoverable 
amount of the asset is estimated in order to determine the 
extent of the impairment loss if any where the asset does  
not generate cash flows that are independent from other 
assets the group estimates the recoverable amount of the 
cashgenerating unit to which the asset belongs
recoverable amount is the higher of fair value less costs to sell 
and value in use in assessing value in use the estimated future 
cash flows are discounted to their present value using a pretax 
discount rate that reflects current market assessments of the 
time value of money and the risks specific to the asset for which 
the estimates of future cash flows have not been adjusted 
if the recoverable amount of an asset or cashgenerating unit 
is estimated to be less than its carrying amount the carrying 
amount of the asset or cashgenerating unit is reduced to its 
recoverable amount an impairment loss is recognised as an 
expense immediately unless the relevant asset is carried at a 
revalued amount in which case the impairment loss is treated 
as a revaluation decrease
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 unless the relevant asset 
is carried at its revalued amount in which case the reversal of 
impairment loss is treated as a revaluation increase yule catto  co plc
annual report and accounts 2010 42
2 significant accounting policies continued
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 
amortised costs
bank borrowings
interestbearing bank loans and overdrafts are recorded at the 
proceeds received net of direct issue costs finance charges 
including premiums payable on settlement or redemption and 
direct issue costs are accounted for on an accruals basis to  
the profit and loss account using the effective interest method 
and are added to the carrying amount of the instrument to the 
extent that they are not settled in the period in which they arise
trade payables
trade payables are measured at initial recognition at fair value 
and are subsequently measured at amortised cost using the 
effective interest rate method
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 21
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 tangible fixed assets 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 
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
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 43
introduction business review governance group financial statements company financial statements other information
2 significant accounting policies continued
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 hedge
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 profit or loss 
and is included in the ‘other gains and losses’ line of the  
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
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 income 
statement because it excludes items of income or expense that 
are taxable or deductible in other years and it further excludes 
items that are never taxable or deductible the group’s liability 
for current tax is calculated using tax rates that have been 
enacted or substantively enacted by the balance sheet date
deferred tax is the tax expected to be payable or recoverable 
on differences between the carrying amounts of assets and 
liabilities in the financial statements and the corresponding  
tax bases used in the computation of taxable profit and is 
accounted for using the balance sheet liability method deferred 
tax liabilities are generally recognised for all taxable temporary 
differences and deferred tax assets are recognised to the extent 
that it is probable that taxable profits will be available against 
which deductible temporary differences can be utilised 
deferred tax liabilities are recognised for taxable temporary 
differences arising on investments in subsidiaries and 
associates and interests in joint ventures except where the 
group is able to control the reversal of the temporary difference 
and it is probable that the temporary difference will not reverse 
in the foreseeable future
the carrying amount of deferred tax assets is reviewed at each 
balance sheet date and reduced to the extent that it is no longer 
probable that sufficient taxable profits will be available to allow 
all or part of the asset to be recovered
deferred tax is calculated at the tax rates that are expected  
to apply in the period when the liability is settled or the asset  
is realised deferred tax is charged or credited in the income 
statement except when it relates to items charged or credited 
directly to equity in which case the deferred tax is also dealt 
with in equity yule catto  co plc
annual report and accounts 2010 44
2 significant accounting policies continued
retirement benefit costs 
the costs of defined benefit contributions to the group’s 
pension schemes and of augmenting existing pensions are 
charged to the 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 statement of comprehensive income
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 in accordance with the transitional provisions  
ifrs 2 has been applied to all grants of equity instruments after 
7 november 2002 that were unvested as of 1 january 2006
the group issues equitysettled sharebased payments  
to certain employees equitysettled sharebased payments  
are measured at fair value at the date of grant the fair value 
determined at the grant date of the equitysettled sharebased 
payments is expensed on a straightline basis over the vesting 
period based on the group’s estimate of shares that will 
eventually vest
definitions
total sales
total sales represent the total of revenue from yule catto  co 
plc its subsidiaries and its share of the revenue of joint ventures 
operating profit
operating profit represents profit before financing costs and 
taxation 
ebitda
ebitda is calculated as operating profit before depreciation 
amortisation and special items
special items
the following are disclosed separately in order to provide  
a clearer indication of the group’s underlying performance
•	 amortisation of acquired intangible assets
•	 impairment of noncurrent assets
•	 costs of business combinations as defined by ifrs 3 and 
related debt issue costs
•	 restructuring and site closure costs
•	 fair value adjustment – mark to market adjustments in 
respect of cross currency and interest rate derivatives used 
for hedging purposes where ias 39 hedge accounting is  
not applied
•	 other nonrecurring and nonoperating items and
•	 tax impact of above items
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
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 45
introduction business review governance group financial statements company financial statements other information
2 significant accounting policies continued
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 deferred tax assets 
particularly in respect of the uk pension liability tax losses  
and accelerated capital allowances determination 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 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 are reversed if the conditions for impairment are  
no longer present evaluating whether an asset is impaired or  
if an impairment should be reversed requires a high degree of 
judgement and may depend to a large extent on the selection  
of key assumptions about the future
determining whether goodwill is impaired requires an 
estimation of the value in use of the cashgenerating  
units to which goodwill has been allocated the value in use 
calculation requires the entity to estimate the future cash flows 
expected to arise from the cashgenerating unit and a suitable 
discount rate in order to calculate present value the industry 
growth rates used within the forecast future cash flows are 
developed with reference to external sources but are subject 
to estimation uncertainty 
post retirement benefit obligations
included in the actuaries’ calculation of the post retirement 
benefit obligations are a number of assumptions these are 
shown in detail in note 24
closure of manufacturing sites and site remediation costs
included in costs to close the manufacturing sites are 
estimates for redundancy decontamination and dismantling 
costs these estimates are based on experience gained in 
previous closures but are subject to uncertainty arising from 
the individual sites’ circumstances historical use and local 
regulations
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 yule catto  co plc
annual report and accounts 2010 46
3 special items 
2010
£’000
2009
£’000
continuing operations
total sales
revenue of operations sold or closed during the year 5689 11236
operating profitloss
operating profit of operations sold or closed during the year 890 1990
impairment of goodwill see note 14 – 30000
acquisition costs see note 29 4182 –
profit arising from the sale or closure of operations see note 7 11413 –
8121 28010
finance costs
fair value adjustment see note 8 2645 4401
profitloss before taxation from continuing operations 10766 32411
taxation settlement of historical issues 6558 9065
profitloss for the year from continuing operations 17324 23346
discontinued operations
total sales
revenue of operations sold or closed during the year – 772
operating profit of discontinued operations
operating profit of operations sold or closed during the year – 22
profit arising from the sale or closure of operations see note 7 – 3652
– 3674
taxation
taxation on operating profit of operations sold or closed during the year – 6
profit for the year from discontinued operations – 3668 
4 segmental analysis 
the group is organised into the 3 divisions described in the group overview on page 2 of this annual report that overview also 
provides a summary of the key products from which each segment derives its revenues the chief operating decision maker of the 
group is considered to the executive committee which reviews internal reports prepared on a divisional basis in order to allocate 
the resources of the group and to assess business performance the 3 divisions polymer chemicals pharma chemicals and 
impact chemicals are therefore considered to be the group’s reportable segments
no single customer accounts for more than 10 of the group’s revenues no information is provided at the divisional level to the 
executive committee concerning interest revenues interest expense depreciation or amortisation income taxes other material 
noncash items or material items disclosed in accordance with ias 197
 total sales operating profit
2010
underlying
performance
£’000
special
 items
£’000
ifrs
£’000
underlying
performance
£’000
special
 items
£’000
ifrs
£’000
analysis by activity
continuing activity
polymer chemicals 532955 5689 538644 53810 13161 66971
share of polymer joint ventures 19026 – 19026 2934 – 2934
551981 5689 557670 56744 13161 69905
pharma chemicals 62933 – 62933 4450 858 3592
impact chemicals 30877 – 30877 3539 – 3539
total sales 645791 5689 651480
divisional operating profit 64733 12303 77036
unallocated corporate expenses 9848 4182 14030
operating profit 54885 8121 63006
 
 
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 47
introduction business review governance group financial statements company financial statements other information
4 segmental analysis continued
 total sales operating profit
2009
underlying
performance
£’000
special
 items
£’000
ifrs
£’000
underlying
performance
£’000
special
 items
£’000
ifrs
£’000
analysis by activity
continuing activity
polymer chemicals 427862 11236 439098 50520 1990 52510
share of polymer joint ventures 15450 – 15450 1242 – 1242
443312 11236 454548 51762 1990 53752
pharma chemicals 65296 – 65296 5571 30000 24429
impact chemicals 23554 – 23554 1967 – 1967
total sales 532162 11236 543398
divisional operating profitloss 59300 28010 31290
unallocated corporate expenses 9884 – 9884
operating profitloss 49416 28010 21406
 
special items 
2010
pharma
chemicals
£’000
polymer
chemicals
£’000
unallocated
corporate
expenses
£’000
total
£’000
revenue of businesses sold or closed during the year – 5689 – 5689
operating profitloss of businesses sold or closed during the year – 890 – 890
profit arising from the sale or closure of operations see note 7 858 12271 – 11413
acquisition costs – – 4182 4182
858 13161 4182 8121
  
2009
pharma
chemicals
£’000
polymer
chemicals
£’000
unallocated
 corporate
expenses
£’000
total
£’000
revenue of businesses sold or closed during the year – 11236 – 11236
operating profit of businesses sold or closed during the year – 1990 – 1990
impairment of goodwill 30000 – – 30000
30000 1990 – 28010
 
2010
total 
assets
£’000
total
 liabilities
£’000
capital
expenditure
£’000
depreciation
and
amortisation
£’000
analysis by activity
continuing activity
polymer chemicals 234306 155541 6921 9752
pharma chemicals 63069 21261 2939 4337
impact chemicals 9700 15980 718 222
307075 192782 10578 14311
holding companies 4554 48873 147 307
302521 241655 10725 14618
share of polymer joint ventures see note 17 8442 4726
goodwill see note 14 124027
net borrowings see note 20 76044
434990 322425
net assets 112565 yule catto  co plc
annual report and accounts 2010 48
4 segmental analysis continued
2009
total 
assets
£’000
total
liabilities
£’000
capital
expenditure
£’000
depreciation
and
amortisation
£’000
analysis by activity
continuing activity
polymer chemicals 181537 154221 3772 9720
pharma chemicals 64151 20893 3219 4545
impact chemicals 8340 16766 292 76
254028 191880 7283 14341
holding companies 18594 56231 33 411
272622 248111 7316 14752
share of polymer joint ventures see note 17 7013 3368
goodwill see note 14 124027
net borrowings see note 20 97646 
403662 349125
net assets 54537
geographical information
 total sales segment net assets capital expenditure
2010
£’000
2009
£’000
2010
£’000
2009
£’000
2010
£’000
2009
£’000
analysis by region of operation
united kingdom 160082 165454 144247 164506 2493 1323
other europe 197121 183424 134478 130578 2979 2827
asia 201861 154830 53367 50226 2864 1373
rest of world 92416 39690 20984 11858 2389 1793
651480 543398 64582 28156 10725 7316
goodwill 124027 124027
net borrowings 76044 97646
net assets 112565 54537
2010
£’000
2009
£’000
analysis of total sales by destination 
united kingdom 76663 71753
other europe 221869 198053
asia 220269 160123
africa and middle east 69845 63654
rest of world 62834 49815
651480 543398
intersegmental sales
in addition to the amounts included above intersegmental sales of £264000 2009 £231000 were made as set out below
these sales were eliminated on consolidation
2010
polymer
 chemicals
£’000
pharma
 chemicals
£’000
impact
 chemicals
£’000
total
£’000
polymer chemicals – – – –
pharma chemicals – – – –
impact chemicals – 264 – 264
total – 264 – 264
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 49
introduction business review governance group financial statements company financial statements other information
4 segmental analysis continued
2009
polymer
chemicals
£’000
pharma
 chemicals
£’000
impact 
chemicals
£’000
total
£’000
polymer chemicals – – – –
pharma chemicals – – – –
impact chemicals – 231 – 231 
total – 231 – 231 
5 operating profit
company
and
subsidiaries
2010
£’000
joint 
ventures
2010
£’000
total
2010
£’000
company 
and
subsidiaries
2009
£’000
joint 
ventures
2009
£’000
total
2009
£’000
total sales 632454 19026 651480 527948 15450 543398
cost of sales 501381 13752 515133 403052 12317 415369
gross profit 131073 5274 136347 124896 3133 128029
distribution costs 45259 1280 46539 42027 942 42969
administrative expenses 32973 1060 34033 32705 949 33654
special items 7231 – 7231 30000 – 30000
operating profit 60072 2934 63006 20164 1242 21406
2010
£’000
2009
£’000
operating profit is stated after charging the following
depreciation 14315 14345
amortisation 303 331
hire of plant and equipment 2127 2001
other lease rentals 3004 3047
research and development expenditure 9472 9584
profit arising from the sale or closure of operations 11413 –
impairment of goodwill – 30000
acquisition costs 4182 – 
6 auditors’ remuneration
2010
£’000
2009
£’000
fees payable to the company’s auditors for
 audit of the company’s annual accounts 7 7
fees payable to the company’s auditors and their associates for
 audit of the company’s subsidiaries pursuant to legislation 409 409
total audit fees 416 416
reporting accountant fees 515 –
total audit and related service fees 931 416
tax services 10 36
services relating to pending acquisition of polymerlatex 235 –
other services 26 25
total nonaudit fees 271 61
the other services provided by the group auditors relate to assistance given in grant applications and sundry projects yule catto  co plc
annual report and accounts 2010 50
7 profitloss arising from the sale or closure of an operation
2010
£’000
2009
£’000
continuing operations
closure of uquifa’s italian manufacturing site 858 – 
sale of revertex finewaters sdn bhd 12271 – 
11413 – 
discontinued operations
sale of oxford chemicals ltd – 3944 
write back of excess provision of holiday encres sa – 371 
costs associated with prior year disposals – 663
– 3652 
11413 3652
in each case assets retained that cannot be sold are written off to the extent that workers are not redeployed termination terms 
are agreed
8 finance costs
2010
£’000
2009
£’000
interest payable on bank loans and overdrafts 5251 6789
interest payable on other loans 3015 3519
8266 10308
less interest receivable 426 439
net interest payable 7840 9869
fair value adjustment 2645 4401
total finance costs 5195 14270
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
9 current taxation
2010
£’000
2009
£’000
continuing operations
current tax
uk corporation tax 58 11
overseas taxation 9963 8377
10021 8366
deferred tax
origination and reversal of temporary differences 926 385
9095 7981
special items see note 3 6558 9065
total tax on profit before taxation 2537 1084
discontinued operations
tax on special items – uk – 6
tax charge for the year on discontinued operations – 6
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 51
introduction business review governance group financial statements company financial statements other information
9 current taxation continued
uk corporation tax is calculated at 28 2009 28 of the estimated assessable profit for the year taxation for other jurisdictions 
is calculated at the rates prevailing in the respective jurisdictions
2010
£’000
2009
£’000
tax expense
continuing operations 2537 1084
discontinued operations – 6
total tax expense 2537 1078
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
2010
£’000
2009
£’000
profit before taxation – continuing operations 57811 7136
profit before taxation – discontinued operations – 3674
profit before taxation 57811 10810
tax on profit before taxation at standard uk corporation tax rate of 28 2009 28 16187 3027
effects of
expenses not deductible for tax purposes 4006 727
tax incentives and items not subject to tax 17059 5718
losses not recognised less utilisation of losses not previously recognised 203 988
higherlower tax rates on overseas earnings 484 7
other deferred tax asset not recognised less amounts now recognised 88 458
adjustments to tax charge in respect of prior periods 903 501
effect of change of rate on deferred tax 63 52
tax charge for year 2537 1078
tax charges to other comprehensive income
2010
£’000
2009
£’000
deferred tax credit on items recognised directly in other comprehensive income 300 306
300 306
current tax liabilities
2010
£’000
2009
£’000
current tax liabilities 28763 34556 yule catto  co plc
annual report and accounts 2010 52
10 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
2010
accelerated
 tax
 depreciation
£’000
other
£’000
total
£’000
at 1 january 5568 3476 9044
chargecredit to income statement 581 2785 2204 
exchange adjustment 103 65 168 
at 31 december 6046 626 6672
deferred tax assets
2010
pensions
£’000
other
£’000
total
£’000
at 1 january 91 1048 1139 
charged to income statement 230 1048 1278
credited through retained earnings 300 – 300 
at 31 december 161 – 161 
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
2010
£’000
2009
£’000
uk pension liability 17208 19589 
tax losses 22414 8136 
accelerated capital allowances 3737 18747 
other timing differences 1164 628 
42195 47100
11 ordinary dividends
2010
pence per
share
2009
pence per
share
2010
£’000
2009
£’000
interim dividend as originally disclosed 20 – 2913 – 
restatement see note 37 07 – 
restated interim dividend 13 – 
proposed final dividend 13 – 4370 – 
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included 
as a liability in these financial statements
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 53
introduction business review governance group financial statements company financial statements other information
12 earnings per share
 2010 2009
underlying
 performance
special
 items ifrs
underlying
 performance
special 
items ifrs
£’000 £’000 £’000 £’000 £’000 £’000
from continuing operations
earnings profit attributable to equity holders  
 of the parent 36650 13088 49738 29994 23976 6018 
number
’000
number
’000
number
’000
number
’000
number
’000
number
’000
weighted average number of ordinary shares  
 in issue – basic
as originally calculated 226268 226268 226268 145660 145660 145660 
restatement see note 37 80608 80608 80608 
restated 226268 226268 226268 
basic earnings per share
as originally calculated 162p 58p 220p 206p 165p 41p 
restatement see note 37  73p 58p 15p
restated 133p 107p 26p 
weighted average number of ordinary shares  
 in issue – diluted
as originally calculated 232786 232786 232786 149382 149382 149382 
restatement see note 37 82668 82668 82668 
restated 232050 232050 232050 
diluted earnings per share
as originally calculated 157p 57p 214p 201p 161p 40p 
restatement see note 37  72p 58p 14p
restated 129p 103p 26p 
from continuing and discontinued operations
earnings profit attributable to equity holders  
 of the parent 36650 13088 49738 29994 20308 9686  yule catto  co plc
annual report and accounts 2010 54
12 earnings per share continued
 2010 2009
underlying
performance
number
’000
special 
items
number
’000
ifrs
number
’000
underlying
performance
number
’000
special 
items
number
’000
ifrs
number
’000
weighted average number of ordinary shares  
 in issue – basic
as originally calculated 226268 226268 226268 145660 145660 145660 
restatement see note 37 80608 80608 80608 
restated 226268 226268 226268 
basic earnings per share
as originally calculated 162p 58p 220p 206p 140p 66p 
restatement see note 37 73p 49p 24p
restated 133p 91p 42p 
weighted average number of ordinary shares 
 in issue – diluted
as originally calculated 232786 232786 232786 149382 149382 149382 
restatement see note 37 82668 82668 82668 
restated 232050 232050 232050 
diluted earnings per share
as originally calculated 157p 57p 214p 201p 136p 65p 
restatement see note 37 72p 49p 23p
restated 129p 87p 42p
13 employees
2010
number
2009
number
the average monthly number of employees during the year by activity was
polymer chemicals 1326 1435 
pharma chemicals 388 421 
impact chemicals 80 155 
holding companies 33 34 
1827 2045 
share of joint ventures 45 48 
1872 2093 
2010
£’000
2009
£’000
the aggregate remuneration of all group employees comprised
wages and salaries 50650 51600 
social security costs 8350 7866 
post retirement benefit obligations 3289 4208 
62289 63674 
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 55
introduction business review governance group financial statements company financial statements other information
14 goodwill
2010
£’000
2009
£’000
cost
at 1 january and 31 december 263939 263939
accumulated impairment losses
at 1 january 139912 109912
impairment losses for the year – 30000
at 31 december 139912 139912
net book value
at 31 december 124027 124027
the group tests goodwill annually for impairment at the balance sheet date or more frequently if there are indications that 
goodwill might be impaired
cash generating units ‘cgu’ comprise primarily acquired entities monitored at business unit level the exception is where 
management monitor a cgu across similar businesses as a whole or components of businesses largely independent of other 
parts of those businesses 
the allocation of the carrying value of goodwill is represented below
31 december
 2008 
net book
 value
£’000
           31 december 2009 31 december 2010
impairment
 during the
 year 
£’000
net book
 value 
£’000
impairment
 during the 
year
 £’000
net book
 value 
£’000
polymer chemicals
synthomer ltd and harlow chemical company ltd 70521 – 70521 – 70521
synthomer gmbh 13120 – 13120 – 13120
synthomer hasselt bv 3089 – 3089 – 3089
synthomer vietnam co ltd 412 – 412 – 412
87142 – 87142 – 87142
pharma chemicals
uquifa spain sa and uquifa mexico sacv 66885 30000 36885 – 36885
66885 30000 36885 – 36885
total 154027 30000 124027 – 124027
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
a discount rate of 9 has been used in each calculation 
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 40 and 50 
have been used representing management’s best estimate of each cgu’s circumstances and these do not exceed the longterm 
growth rates for the markets concerned
the estimated recoverable amount of the group’s pharma chemicals division is similar to its carrying value and consequently  
any adverse change in key assumptions would in isolation cause an impairment loss to be recognised other than pharma 
chemicals management believes that no reasonably possible change in any of the above key assumptions would cause the 
carrying value of any cash generating unit to exceed its recoverable amount yule catto  co plc
annual report and accounts 2010 56
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
£’000
environmental
licences
£’000
total
£’000
cost 
at 1 january 2010 5551 215 5766 
exchange adjustments 546 – 546 
additions 49 – 49 
disposals 22 – 22
at 31 december 2010 6124 215 6339 
accumulated amortisation and impairment
at 1 january 2010 4947 215 5162
exchange adjustments 528 – 528
amortisation charge for the year 303 – 303
disposals 17 – 17
at 31 december 2010 5761 215 5976
net book value
at 31 december 2010 363 – 363 
software
£’000
environmental
licences
£’000
total
£’000
cost 
at 1 january 2009 6163 215 6378 
exchange adjustments 626 – 626
additions 72 – 72 
disposals 58 – 58
at 31 december 2009 5551 215 5766
accumulated amortisation and impairment
at 1 january 2009 5294 215 5509
exchange adjustments 620 – 620
amortisation charge for the year 331 – 331
disposals 58 – 58
at 31 december 2009 4947 215 5162
net book value
at 31 december 2009 604 – 604 
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 57
introduction business review governance group financial statements company financial statements other information
16 property plant and equipment
  land and buildings
 leaseholds
plant and
equipment
£’000
total
£’000
freeholds
£’000
long
£’000
short
£’000
cost 
at 1 january 2010 45514 4887 7298 329803 387502 
exchange adjustments 264 3 1038 2584 3889 
additions 345 – 36 10344 10725 
sale of subsidiary undertaking 1255 – – 2255 3510
disposals – – – 1499 1499
at 31 december 2010 44868 4890 8372 338977 397107 
accumulated depreciation and impairment
at 1 january 2010 18732 2304 863 261788 283687 
exchange adjustments 137 – 124 166 179
depreciation charge for the year 729 129 164 13293 14315 
sale of subsidiary undertaking 198 – – 1599 1797
disposals – – – 1487 1487
at 31 december 2010 19126 2433 1151 271829 294539 
net book value
at 31 december 2010 25742 2457 7221 67148 102568 
  land and buildings
 leaseholds
plant and
equipment
£’000
total
£’000
freeholds
£’000
long
£’000
short
£’000
cost 
at 1 january 2009 48189 4889 6766 341378 401222 
exchange adjustments 3139 2 519 13914 17574
additions 1252 – 1051 4941 7244 
disposals 788 – – 2602 3390
at 31 december 2009 45514 4887 7298 329803 387502 
accumulated depreciation and impairment
at 1 january 2009 18800 2175 776 261365 283116 
exchange adjustments 785 – 62 9916 10763
depreciation charge for the year 1031 129 149 13112 14421 
disposals 314 – – 2773 3087
at 31 december 2009 18732 2304 863 261788 283687 
net book value
at 31 december 2009 26782 2583 6435 68015 103815 
freehold land amounting to £9357000 2009 £9357 000 has not been depreciated
of the depreciation charge for the year £nil 2009 £76000 relates to discontinued operations yule catto  co plc
annual report and accounts 2010 58
17 investment in joint ventures
2010
£’000
2010
£’000
2009
£’000
2009
£’000
at 1 january
share of noncurrent assets 1028 1091
share of current assets 6135 10219
share of current liabilities 3365 6362
3798 4948
 share of income 19026 15450
 share of expenses 15955 14096
3071 1354
 tax 137 112 
 dividends paid during the year 2667 1899 
 exchange adjustments 349 493
 retained loss 82 1150
at 31 december
share of noncurrent assets 974 1028
share of current assets 7468 6135
share of current liabilities 4726 3365
3716 3798
a list of principal subsidiary undertakings and joint ventures is given on page 82
18 inventories
2010
£’000
2009
£’000
raw materials and consumables 26886 22750 
work in progress 1656 1398 
finished goods 36837 31997 
65379 56145 
the value of stock written off during the year was £1605000 2009 £853000
 there is no material difference between the balance sheet value of inventories and their replacement cost
19 trade and other receivables
2010
£’000
2009
£’000
trade receivables 100031 86468 
amounts owed by joint ventures 549 395 
other receivables 8378 7793 
prepayments and accrued income 2327 4350 
111285 99006 
the directors consider that the carrying amount of trade and other receivables approximates to their fair value
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 59
introduction business review governance group financial statements company financial statements other information
19 trade and other receivables continued
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 
2010
£’000
2009
£’000
not yet due 85505 74844 
060 days overdue 14828 11854 
61120 days overdue 832 986 
over 120 days due 1633 2140 
102798 89824 
less provision for impairment 2767 3356
 100031 86468 
provision for impairment of receivables 
2010
£’000
2009
£’000
at 1 january 3356 2722 
exchange adjustments 22 11 
chargecredit for the year 66 733 
amounts written off as uncollectible 501 110
at 31 december 2767 3356 
the provision is predominantly against trade receivables more than 61 days overdue
20 cash and borrowings
2010
£’000
2009
£’000
current borrowings
bank loans
bank loans and overdrafts 6565 3608 
malaysian ringgits 100 million sixyear amortising term loan 3311 2372 
other loans
136000000 766 guaranteed senior unsecured notes due 8 september 2010 – 27949 
£15000000 699 guaranteed senior unsecured notes due 8 september 2010 – 5000 
9876 38929 
less capitalised costs – 5
9876 38924  yule catto  co plc
annual report and accounts 2010 60
20 cash and borrowings continued
2010
£’000
2009
£’000
noncurrent borrowings
bank loans
unsecured £30 million revolving credit facility expiring 2011 – – 
malaysian ringgits 100 million sixyear amortising term loan 14853 15936 
other bank loans 461 1283 
other loans
43000000 555 guaranteed senior unsecured notes due 2 september 2012 27794 26996 
70000000 578 guaranteed senior unsecured notes due 2 september 2014 45246 43948 
22000000 598 guaranteed senior unsecured notes due 2 september 2016 14220 13812 
102574 101975 
less capitalised costs 195 869
102379 101106 
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 2010 the group had available £30 million 2009 £30 million of undrawn committed borrowing facilities in respect 
of which all conditions precedent had been met this facility was cancelled by the company in january 2011 following receipt of 
the rights issue proceeds and a new facility of £210 million was signed but not drawndown
 in aggregate £873 million associated with which is the currency impact of derivatives of £127 million net £746 million
 the directors calculate the carrying value of the group’s borrowings as follows
 analysis of borrowings at carrying value by currency 
sterling
£’000
us dollar
£’000
euro
£’000
other
£’000
total
£’000
31 december 2010
 bank loans and overdrafts 3277 97 2967 224 6565
 bank loans – – 437 18188 18625
 loan notes – 87260 – – 87260
 capitalised costs 195 – – – 195
3082 87357 3404 18412 112255
 cash and cash equivalents 36211
 net borrowings 76044 
 deduct special item 12674
 net borrowings underlying performance 63370 
31 december 2009
 bank loans and overdrafts – 14 3410 184 3608
 bank loan – – 1283 18308 19591
 loan notes 5000 112705 – – 117705
 capitalised costs 874 – – – 874
4126 112719 4693 18492 140030
 cash and cash equivalents 42384
 net borrowings 97646 
 deduct special item 9608
 net borrowings underlying performance 88038 
 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 prior to the adoption of ifrs
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 61
introduction business review governance group financial statements company financial statements other information
21 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 20 and equity attributable to equity holders of the parent comprising 
issued capital reserves and retained earnings as disclosed in note 26
 the group’s principal financial instruments comprise borrowings some cash and liquid resources and various items such as 
trade debtors and trade creditors that arise directly from its operations the group also uses interest rate swaps currency swaps 
and forward foreign currency contracts to manage the interest rate and currency risks arising from the group’s operations and its 
sources of finance
 it is and has been throughout the period under review the group’s policy that no trading in financial instruments shall  
be undertaken 
 set out below is a comparison by category of book values and fair values of the group’s financial assets and liabilities
 carrying value  
 at 31 december
 fair values 
 at 31 december
2010
£’000
2009
£’000
2010
£’000
2009
£’000
fair value of financial assets
trade and other receivables excluding prepayments 108958 94656 108958 94656 
cash and cash equivalents 36211 42384 36211 42384
derivatives at fair value 22765 11763 22765 11763
167934 148803 167934 148803
fair value of financial liabilities
loan notes 87065 116831 92775 118754
bank loans and overdrafts 25190 23199 25190 23199 
trade and other payables excluding accruals 117699 103664 117699 103664 
229954 243694 235664 245617
fair values have been obtained from the relevant institutions where appropriate where market values are not available fair values 
of financial assets and financial liabilities have been calculated by discounting expected future cash flow at prevailing interest rates 
and by applying year end exchange rates the carrying amount of shortterm borrowings approximates to book value
the fair value of the group’s financial instruments are measured using inputs other than quoted prices that are directly  
or indirectly observable
the main risks arising from the group’s financial instruments are market risk and liquidity risk the board reviews and agrees 
policies for managing each of these risks and they are summarised below together with related disclosure required by ifrs
market risk
 the group’s main exposure to market risk is in the form of interest rate risk and foreign currency risk the policies adopted  
to address these risks are as follows
 interest rate risk
  the group finances its operations through a mixture of retained profits loan notes and bank borrowings the group borrows 
at both fixed and floating rates of interest and uses interest rate swaps to generate the desired interest profile in order to 
manage the group’s exposure to interest rate fluctuations
 foreign currency risk
  the group uses currency borrowings forward contracts and currency swaps to hedge overseas net assets which are 
predominantly denominated in euros profit translation exposures are not hedged
  the group hedges currency transaction exposures at the point of confirmed order using forward foreign exchange contracts 
the group’s policy is where practicable to hedge all exposures on monetary assets and liabilities consequently there are no 
material currency exposures to disclose 2009 none yule catto  co plc
annual report and accounts 2010 62
21 financial instruments continued
impact on income statement
changes in the fair value of derivative contracts amounting to £2644680 have been credited to the income statement in the year 
2009 charge of £4400652 these changes are shown separately as a special item in the consolidated income statement
hedge accounting 
the group has a number of cross currency and interest rate 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
as disclosed in note 29 the group anticipates making a euro purchase of €443 million in respect of the pending acquisition  
to the extent that this will be funded out of sterling resources the group has taken out forward foreign exchange contracts to  
fix the sterling value of a percentage of this anticipated euro purchase these contracts have been accounted for as cash flow 
hedges as permitted by ias 39
in addition the group has taken out forward foreign exchange contract to fix the sterling value of it’s net investments in certain 
foreign operations which have a euro functional currency these contracts 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 2010 was
floating rate
borrowings
2010
£’000
fixed rate
borrowings
2010
£’000
total
borrowings
2010
£’000
floating rate
borrowings
2009
£’000
fixed rate
borrowings
2009
£’000
total
 borrowings
2009
£’000
sterling 37668 40000 77668 2223 105000 107223
euro 3404 – 3404 4693 – 4693
us dollar 97 – 97 14 – 14
other 18412 – 18412 18492 – 18492
59581 40000 99581 25422 105000 130422
cash and cash equivalents 36211 42384
net borrowings underlying performance 63370 88038
 the effective interest rate for the year was 48 2009 69
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
 2010 2009
  income statement
equity
ifrs
 £m
 income statement
equity
ifrs
 £m
underlying
 £m
ifrs
 £m
underlying
 £m
ifrs
 £m
interest rate sensitivity analysis
uk interest rate  10 04 15 – 01 24 – 
euro interest rate  10 01 01 – 01 01 – 
us interest rate  10 – 31 – – 38 – 
foreign currency sensitivity analysis
euro exchange rate  10 11 11 31 05 05 32 
us dollar exchange rate  10 – 12 – – 11 – 
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 63
introduction business review governance group financial statements company financial statements other information
21 financial instruments continued
the interest rate sensitivity analysis has been determined based on the exposure to interest rates for both derivatives and  
nonderivative instruments at the balance sheet date for floating rate liabilities the analysis is prepared assuming the amount  
of liability outstanding at the balance sheet date was outstanding for the whole year
the foreign currency sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their 
translation at the period end for a 10 change in foreign currency rates the sensitivity analysis includes external loans as well as 
loans to foreign operations within the group where the denomination of the loan is in a currency other than the functional currency 
of the lender or borrower
liquidity risk
the objective of the group is to meet financial commitments as and when they fall due the board closely monitors liquidity 
through monthly management accounts
at the year end yule catto  co plc had the following principal facilities
a committed syndicated bank revolving credit facility of £30 million this facility was cancelled by the company in january 2011 
following receipt of the rights issue proceeds and a new facility of £210 million was signed but not drawndown 
unsecured loan notes totalling approximately £75 million raised from the us private placement market in 2004 with maturity 
between 2012 and 2016 these loan notes provide the group’s longterm requirements please see note 20 for further details 
a rm 100 million £18 million six year amortising loan through its malaysian subsidiary synthomer sdn bhd
the following table details the remaining contractual maturity for nonderivative financial liabilities
 2010 2009
 amount due amount due
within 
one
 year
£’000
between 
1 and 
2 years
£’000
between 
2 and 5
 years
£’000
after 5 
years
£’000
total
£’000
within 
one year
£’000
between 
1 and 2
 years
£’000
between 
2 and 5
 years
£’000
after 
5 years
£’000
total
£’000
noninterest bearing
trade and other  
 payables excluding 
 accruals 117555 144 – – 117699 103448 216 – – 103664 
variable interest rate 
  instruments
bank loans and  
 overdrafts 10502 3935 11872 461 26770 6427 4400 14200 – 25027 
fixed interest rate  
 instruments
loan notes 5008 32802 53027 15071 105908 40855 4864 82541 15464 143724 
133065 36881 64899 15532 250377 150730 9480 96741 15464 272415
the following table details the remaining contractual maturity for nonderivative financial assets
 2010 2009
 amount due amount due
within 
one
 year
£’000
between 
1 and 
2 years
£’000
between 
2 and 5
 years
£’000
after 5 
years
£’000
total
£’000
within 
one year
£’000
between 
1 and 2
 years
£’000
between 
2 and 5
 years
£’000
after 
5 years
£’000
total
£’000
noninterest bearing
trade and other
 receivables excluding 
 prepayments 108958 – – – 108958 94656 – – – 94656 
variable interest rate  
 instruments
cash and cash 
 equivalents 36211 – – – 36211 42384 – – – 42384 
145169 – – – 145169 137040 – – – 137040  yule catto  co plc
annual report and accounts 2010 64
21 financial instruments continued
the following table details the remaining contractual maturity for its derivative financial instruments
 2010 2009
 amount due amount due
within 
one
 year
£’000
between 
1 and 
2 years
£’000
between 
2 and 5
 years
£’000
after 5 
years
£’000
total
£’000
within 
one year
£’000
between 
1 and 2
 years
£’000
between 
2 and 5
 years
£’000
after 
5 years
£’000
total
£’000
interest rate swaps – – – – – 3984 – – – 3984 
cross currency swaps 2212 2441 2658 186 7497 3845 2370 4732 333 11280
foreign exchange
 forward contracts 4576 – – – 4576 26 – – – 26 
2364 2441 2658 186 2921 165 2370 4732 333 7270
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 
22 assets held for sale
 there were no assets held for sale at the year end 2009 nil
23 trade and other payables
2010
£’000
2009
£’000
amount due within one year
trade creditors 90880 78961 
other creditors 26675 24487 
accruals and deferred income 22524 22161 
140079 125609
amount due in greater than one year
other creditors 144 216
140233 125825
accruals and deferred income includes £756000 2009 £1413000 in respect of restructuring costs
average trade creditor days in 2010 was 64 2009 68 this figure represents trade creditor days for all trading operations within 
the group calculated as a weighted average based on cost of sales
the directors consider that the carrying amount of trade payables approximates to their fair value
24 post retirement benefit obligations
charge to income statement in respect of the group’s pension schemes
 2010 
 £’000
 2009 
 £’000
 2008 
 £’000
 2007 
 £’000
 2006 
 £’000
uk overseas total uk overseas total uk overseas total uk overseas total uk overseas total
defined benefit 1761 717 2478 3168 699 3867 977 427 1404 1598 763 2361 2200 763 2963
defined   
 contribution 1400 881 2281 486 762 1248 388 771 1159 159 952 1111 299 712 1011
3161 1598 4759 3654 1461 5115 1365 1198 2563 1757 1715 3472 2499 1475 3974
defined benefit  
 – special item – – – – – – – – – 10797 – 10797 – – – 
3161 1598 4759 3654 1461 5115 1365 1198 2563 9040 1715 7325 2499 1475 3974
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 65
introduction business review governance group financial statements company financial statements other information
24 post retirement benefit obligations continued
the fair value of the assets in the schemes and the present value of the liabilities in the schemes at each balance sheet date were
 2010 
 £’000
 2009 
 £’000
 2008 
 £’000
 2007 
 £’000
 2006 
 £’000
uk overseas total uk overseas total uk overseas total uk overseas total uk overseas total
present value of
 funded 
 defined
 benefit
 obligations 250180 15274265454 241475 13971 255446 205721 13449 219170 228966 15530 244496 260425 16591 277016
fair value of 
 scheme 
 assets 193722 5735 199457 171515 5242 176757 138293 5318 143611 195325 7935 203260 191137 7995 199132
post retirement 
 benefit  
 obligations 56458 9539 65997 69960 8729 78689 67428 8131 75559 33641 7595 41236 69288 8596 77884
   
uk pension schemes
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
contributions to the scheme are charged to the profit and loss account to spread the cost of pensions over employees’ working 
lives within the group
defined benefit scheme
a full actuarial valuation was carried out as at 6 april 2006 and updated to 31 december 2010 by a qualified actuary the major 
assumptions used by the actuary were
2010 2009 2008 2007 2006
rate of increase in salaries na 300 260 310 330
rate of increase in pensions in payment 325 300 250 250 250
rate of increase in pensions in deferment 225 300 250 250 250
discount rate 540 570 650 590 520
rates of return on plan assets 712 822 731 733 695
inflation assumption 325 300 260 310 280
amount charged to operating profit
2010
£’000
2009
£’000
current service cost 607 1493 
expected return on plan assets 12296 11393
interest cost relating to pension scheme liabilities 13450 13068 
1761 3168
actuarial loss recognised in the statement of comprehensive income 
2010
£’000
2009
£’000
actual return less expected return on pension scheme assets 7576 21209 
experience gains and losses arising on the scheme liabilities 6500 32753
1076 11544 yule catto  co plc
annual report and accounts 2010 66
24 post retirement benefit obligations continued
history of experience gains and losses
2010 2009 2008 2007 2006
difference between the expected and  
 actual return on scheme assets
amount £’000 7576 21209 64742 5891 13800 
percentage of scheme assets  391 1237 4682 302 722
experience gains and losses arising on the scheme liabilities
amount £’000 6500 32753 25273 25872 30988
percentage of the present value of scheme liabilities  260 1356 1229 1130 1190
total actuarial lossesgains recognised in the statement  
 of recognised income and expense
amount £’000 1076 11544 39469 19981 17188
percentage of the present value of scheme liabilities  043 478 1919 873 661
the actual return on plan assets was £19872000 2009 £32602000
movements in the present value of defined benefit obligations were as follows
2010
£’000
2009
£’000
at 1 january 241475 205721
current service cost 607 1493
interest cost 13450 13068
contributions from scheme members 48 438
experience gains and losses arising on the scheme liabilities 6500 32753
cash paid by sponsoring companies 577 1229
benefits paid 11323 10769
at 31 december 250180 241475
movements in the fair value of the scheme assets were as follows
2010
£’000
2009
£’000
at 1 january 171515 138293 
expected return on scheme assets 12296 11393 
actual return less expected return on pension scheme assets 7576 21209 
contributions from sponsoring companies 13610 10951 
contributions from scheme members 48 438 
benefits paid 11323 10769
at 31 december 193722 171515 
contributions from the sponsoring companies are expected to be £9600000 in 2011
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at each 
balance sheet date were 
2010

2010
£’000
2009

2009
£’000
2008

2008
£’000
2007

2007
£’000
2006

2006
£’000
equities 770 110402 800 113373 900 90241 800 148447 790 154821 
bonds 540 60829 570 54243 670 47614 517 44925 492 36316 
property 770 10480 – – – –
cash 200 12011 200 3899 425 438 425 1953 425 – 
total fair value of assets 193722 171515 138293 195325 191137 
present value of scheme
  liabilities 250180 241475 205721 228966 260425
post retirement benefit
  obligations 56458 69960 67428 33641 69288
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 67
introduction business review governance group financial statements company financial statements other information
24 post retirement benefit obligations continued
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 german schemes where in line with common practice the assets 
are held within the respective company 
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 2010 the major assumptions do not differ significantly from those disclosed above in relation 
to the uk pension schemes 
amount charged to operating profit
2010
£’000
2009
£’000
current service cost 216 224 
expected return on plan assets 68 239
interest cost relating to pension scheme liabilities 569 714 
717 699
actuarial lossgain recognised in the statement of comprehensive income  
2010
£’000
2009
£’000
actual return less expected return on pension scheme assets 527 2 
experience gains and losses arising on the scheme liabilities 1527 1077
1000 1075
the actual return on plan assets was £595000 2009 £241000 gain
analysis of the movements in the net balance sheet liability before deferred tax 
2010
£’000
2009
£’000
net liability at 1 january 8729 8131
total expense as detailed above 717 699
contributions made 490 572 
actuarial gain 1000 1075
exchange movements 417 604 
net liability at 31 december 9539 8729
25 share capital
2010
£’000
2009
£’000
issued and fully paid
145663187 2009 145663187 ordinary shares of 10 pence each 14566 14566 
issued and nil paid
194217582 2009 nil ordinary shares of 10 pence each see note 29 – – 
ordinary shares carry no right to fixed income 
as permitted by the companies act 2006 the company removed references to authorised share capital from its articles  
of association at the annual general meeting on 6 may 2010 this change took effect from 6 may 2010 yule catto  co plc
annual report and accounts 2010 68
25 share capital continued
share options
as at 31 december 2010 the following options were outstanding
executive share options number option price
exercisable between 20102012 2194 a
exercisable between 20112018 1018471 a
exercisable between 20122019 4364415 a
exercisable between 20132020 1132673 a
a  options granted under the performance share plan and the longerterm deferred bonus plan with a total exercise price of £55
26 changes in equity
share
capital
£’000
share
premium
£’000
capital
redemption
reserve
£’000
own 
shares
£’000
hedging
 and
translation
reserve
£’000
cash flow
hedging
reserve
£’000
minority
interest
£’000
retained
earnings
£’000
total
£’000
at 1 january 2010 14566 33034 949 – 934 – 6903 19 54537
profit for the year – – – – – – 5536 49738 55274
actuarial gains and losses – – – – – – – 76 76
tax relating to components of 
  other comprehensive income – – – – – – – 300 300
exchange differences on cash  
  flow hedging deferred to equity – – – – – 4495 – – 4495
exchange differences on  
 translation of overseas
 operations – – – – 6030 – 649 – 6679
net investment hedging – – – – 1732 – – – 1732
total recognised income 
 for the period – – – – 7762 4495 6185 50114 68556
dividends paid – – – – – – 6585 2913 9498
investment by minority interest – – – – – – 130 – 130
divestment by minority interest – – – – – – 384 – 384
shares purchased by esop trust – – – – – – – – –
sharebased payments – – – – – – – 776 776
at 31 december 2010 14566 33034 949 – 6828 4495 6249 46444 112565
share
capital
£’000
share
premium
£’000
capital
redemption
reserve
£’000
own 
shares
£’000
hedging
 and
translation
reserve
£’000
cash flow
hedging
reserve
£’000
minority
interest
£’000
retained
earnings
£’000
total
£’000
at 1 january 2009 14566 33034 949 – 6252 678 9157 2056 66692
profit for the year – – – – – – 2202 9686 11888
actuarial gains and losses – – – – – – – 12619 12619
tax relating to components of 
  other comprehensive income – – – – – – – 306 306
exchange differences on cash  
  flow hedging deferred to equity – – – – – 678 – – 678
exchange differences on  
  translation of overseas
 operations – – – – 6933 – 825 – 7758
net investment hedging – – – – 253 – – – 253
total recognised expenditure 
 income for the period – – – – 7186 678 1377 2627 9114
dividends paid – – – – – – 3631 – 3631
shares purchased by esop trust – – – 47 – – – – 47
sharebased payments – – – 47 – – – 590 543
at 31 december 2009 14566 33034 949 – 934 – 6903 19 54537
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 69
introduction business review governance group financial statements company financial statements other information
27 reconciliation of operating profit to cash generated from operations
2010
£’000
2009
£’000
operating profit – continuing operations 63006 21406
operating profit for the year from discontinued operations – 3674
less share of profits of joint ventures 2934 1242
60072 23838
depreciation and amortisation 14616 14771
impairment of goodwill – 30000
profit arising from the sale or closure of operations 11413 3652
acquisition costs 4182 –
profit on sale of fixed assets 36 76
sharebased payments 333 1306
cash impact of termination of businesses 1445 3591
pension funding in excess of ias 19 charge 12191 10678
increasedecrease in inventories 8362 4690
increasedecrease in trade and other receivables 14210 20779
increasedecrease in trade and other payables 10682 10276
cash generated from operations 42228 64499
28 disposal of subsidiaries
the group disposed of the following interest in group companies in 2010
company name date of sale purchaser division sale type
revertex finewaters sdn bhd 2 june 2010 third party trade polymer chemicals share
the net assets of the company at the date of disposal were as follows
revertex
finewaters
sdn bhd
£’000
property plant and equipment 1713
inventories 1316
trade receivables 3440
net borrowing 386
deferred tax liability 140
current tax liability 92
trade payables 2774
3849
less minority interest 384
3465
profit on disposal 12271
total consideration 15736
satisfied by
cash net of disposal costs 16075
accrued costs of disposal 339
15736
the impact of this disposal on the group’s results in the current period and prior periods is disclosed in note 3 yule catto  co plc
annual report and accounts 2010 70
29 acquisition of subsidiary
on 13 december 2010 yule catto  co plc entered in to an agreement to acquire the entire issued share capital of polymerlatex 
deutschland beteiligungsgesellschaft mbh for a total transaction value of €443 million £376 million this acquisition is to be 
funded partly by a 4 for 3 right issue to raise £225 million and partly by increased bank borowings completion of the acquisition 
is conditional on the receipt of competition clearance from the relevant authorities further details can be found in the prospectus 
dated 13 december 2010
costs associated with this transaction of £4182000 are included in special items see note 3 £371000 of these costs were 
settled in 2010 
30 analysis of changes in net borrowings
1 january
2010
£’000
reclassification 
of borrowings
£’000
cash inflows
outflows
£’000
exchange and
other movements
£’000
31 december
2010
£’000
cash and cash equivalents 42384 – 10657 4484 36211 
current borrowing – bank overdrafts 3608 – 2575 382 6565
38776 – 13232 4102 29646 
current borrowings 35316 3311 35878 562 3311
noncurrent borrowings 101106 3311 100 4684 102379
net borrowings 97646 – 22746 1144 76044
deduct special item 9608 12674
net borrowings underlying performance 88038 63370
    
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 uk gaap 
31 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
2010
£’000
2009
£’000
shortterm employee benefits 2987 2938
post retirement benefit obligations 257 250
sharebased payments 1148 1069
4392 4257
the key management figures given above include the directors and all participants of the performance share plan
32 commitments 
2010
£’000
2009
£’000
capital expenditure authorised but not provided for in the accounts
contracted 3970 1064 
2010
£000
2009
£000
commitments under operating leases are as follows
payments under operating leases which fall due
within 1 year 3208 2538 
between 2 and 5 years 6090 6037 
after 5 years 5785 6081 
15083 14656 
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 71
introduction business review governance group financial statements company financial statements other information
33 contingent assets contingent liabilities and guarantees
guarantees of the parent company in respect of bank and other facilities of subsidiaries and joint ventures totalled £18782000 
2009 £18309000
other guarantees and contingent liabilities of the group amount to £1076000 2009 £1376000
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
in connection with a disputed tax assessment in the amount of ¤11020000 by the spanish tax authorities union quimico 
farmaceutica sa has given a charge dated 5 november 2010 over its two manufacturing sites the charge guarantees a total  
sum of ¤13230000
34 sharebased payments
save as you earn share option plan
 this plan which is available to almost all uk employees provides for a grant price equal to the average quoted market price of  
the group shares on the date of grant the vesting period is five to seven years followed by an exercise period of six months after 
which the options expire furthermore options are forfeited if the employee leaves the group before the options vest
options
2010
weighted 
av exercise
price £
2010
options
2009
weighted 
av exercise
price £
2009
outstanding at 1 january 13872 2610 13872 2610 
lapsed during the period 13872 2610 – 2610 
outstanding at 31 december – 13872 
exercisable at 31 december – 13872 
 no grants have been made under the plan since 7 november 2002 and the group has elected not to apply ifrs 2 to awards 
made before that date for options expected to be settled with shares purchased by the yule catto employee benefit trust in the 
open market the charge to profit reflects the anticipated cash cost of these shares spread over the vesting period for options 
expected to be settled by the issue of new shares no charge to profit is made
executive share option schemes
details of the share option schemes available to senior management are included in the remuneration report on pages 30 to 33 
 for grants made after 7 november 2002 the charge to profit is calculated on the assumption that given that the exercise price 
is effectively nil the share price at grant provides a reasonable estimate of the option value at grant 
 for grants made before 7 november 2002 the charge to profit is based on the anticipated cash cost of acquiring shares to meet 
the options exercised 
options
2010
weighted 
av exercise
price £
2010
options
2009
weighted 
av exercise
price £
2009
outstanding at 1 january 5780786 – 1226535 – 
restated see note 37 678273
outstanding at 1 january restated 5780786 – 1904808 –
granted during the period 1132673 – 4364415 – 
exercised during the period – – 119533 – 
lapsed during the period 395706 – 368904 – 
outstanding at 31 december 6517753 – 5780786 – 
exercisable at 31 december 2194 2194 
 
 for options outstanding as at 31 december 2010 the exercise price was £nil and the weighted average remaining contractual life 
was 50 years 2009 57 years  yule catto  co plc
annual report and accounts 2010 72
34 sharebased payments continued
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 2010 the trust held 3418 2009 3418 ordinary shares in the company with a market value of  
£7000 2009 £5000 and a provisional allotment of 4597 nil paid ordinary shares in the company with a market value of £4000 
2009 nil the dividends on these shares have been waived all of the shares are under option costs are amortised over the life  
of the plans
35 share price information
the middle market value of the listed ordinary shares at 31 december 2010 was 2010 pence during the year the market price 
ranged between 1037 pence and 2028 pence the market value of the listed ordinary shares at 31 march 1982 was 195 pence 
the latest ordinary share price is available on the financial times cityline service telephone 09058 171690 
the share prices in the proceeding paragraph have been restated as discussed in note 37
36 reconciliation of ebitda
 underlying performance ifrs
2010
£’000
2009
£’000
2010
£’000
2009
£’000
operating profit 54885 49416 63006 21406
less profit arising from the sale or closure of operations – – 11413 –
less operating profit of businesses sold or closed during the year – – 890 1990
add acquisition costs – – 4182 –
add impairment of goodwill – – – 30000
add back amortisation 303 331 303 331
add back depreciation 14315 14345 14315 14345
ebitda 69503 64092 69503 64092
 
37 impact of rights issue
the company announced a 4 for 3 rights issue on 13 december 2010 the new shares were provisionally allotted nil paid on  
31 december 2010
 to the extent that these new shares contained a bonus element the following have been restated in accordance with accepted 
practise up to and including 30 december 2010 
 
 earnings per share reduced by a factor of 6439   
 dividends per share reduced by a factor of 6439 
 share option  increased by a factor of 1553 
share price   reduced by a factor of 6439 
notes to the consolidated financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 73
introduction business review governance group financial statements company financial statements other information
independent auditors’ report  
to the members of yule catto  co plc
we have audited the parent company financial statements  
of yule catto  co plc for the year ended 31 december 2010 
which comprise the company balance sheet and the related 
notes 1 to 16 the financial reporting framework that has been 
applied in their preparation is applicable law and united 
kingdom accounting standards united kingdom generally 
accepted accounting practice
this report is made solely to the company’s members  
as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken so 
that we might state to the company’s members those matters 
we are required to state to them in an auditor’s report and for  
no other purpose to the fullest extent permitted by law we do 
not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit 
work for this report or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities 
statement the directors are responsible for the preparation of 
the parent company financial statements and for being satisfied 
that they give a true and fair view our responsibility is to audit 
and express an opinion on the parent company financial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards 
require us to comply with the auditing practices board’s  
ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting 
policies are appropriate to the parent company’s circumstances 
and have been consistently applied and adequately disclosed 
the reasonableness of significant accounting estimates  
made by the directors and the overall presentation of the 
financial statements
opinion on financial statements
in our opinion the parent company financial statements
•	 give a true and fair view of the state of the company’s affairs 
as at 31 december 2010
•	 have been properly prepared in accordance with united 
kingdom generally accepted accounting practice and
•	 have been prepared in accordance with the requirements  
of the companies act 2006
opinion on other matters prescribed by the  
companies act 2006
in our opinion
•	 the part of the directors’ remuneration report to be audited 
has been properly prepared in accordance with the 
companies act 2006 and
•	 the information given in the directors’ report for the financial 
year for which the financial statements are prepared is 
consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters 
where the companies act 2006 requires us to report to you  
if in our opinion
•	 adequate accounting records have not been kept by the 
parent company or returns adequate for our audit have not 
been received from branches not visited by us or
•	 the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or
•	 certain disclosures of directors’ remuneration specified by  
law are not made or
•	 we have not received all the information and explanations  
we require for our audit
other matter
we have reported separately on the group financial statements 
of yule catto  co plc for the year ended 31 december 2010
stuart henderson senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory auditor
cambridge united kingdom
9 march 2011 yule catto  co plc
annual report and accounts 2010 74
company balance sheet
31 december 2010
note
2010
£’000
2009
£’000
fixed assets
tangible fixed assets 6 2559 2533 
investments 7 334137 334130 
336696 336663 
current assets
debtors 8 1705 978 
cash at bank and in hand 940 1603 
derivatives at fair value 18189 11737 
20834 14318 
creditors – due within one year
borrowings 9 3266 32944
other creditors 10 109307 112756
112573 145700
net current liabilities 91739 131382
total assets less current liabilities 244957 205281 
creditors – due after more than one year
borrowings 9 87065 83887
net assets 157892 121394 
capital and reserves
called up share capital 11 14566 14566 
share premium 12 33034 33034 
revaluation reserve 12 822 824 
capital redemption reserve 12 949 949 
profit and loss account 12 108521 72021 
capital employed 157892 121394 
analysis of net borrowings
cash at bank and in hand 940 1603 
borrowings due in less than one year 3266 32944
borrowings due after more than one year 87065 83887
net borrowings 89391 115228
deduct special item 12674 9608 
net borrowings underlying performance 9 76717 105620
the financial statements of yule catto  co plc registered number 98381 were approved on 9 march 2011 
a m whitfield
d c blackwood
directors yule catto  co plc
annual report and accounts 2010 75
introduction business review governance group financial statements company financial statements other information
notes to the company financial statements
31 december 2010
1 accounting policies
the principal accounting policies are summarised below  
they have all been applied consistently throughout the year  
and the preceding year
basis of accounting
the financial statements have been prepared under the 
historical cost convention as modified by the revaluation  
of certain fixed assets and comply with applicable uk 
accounting standards
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 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
the company has taken advantage of the transitional provisions 
of frs 15 ‘tangible fixed assets’ and retained the book 
amounts of certain freehold properties which were revalued 
prior to implementation of that standard
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
debt
debt is initially stated at the amount of the net proceeds after 
deduction of issue costs 
dividends
dividends are accrued where declared and unpaid at the 
balance sheet date  
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 tax
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 group’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 are recognised on the 
group’s balance sheet when the group becomes a party to  
the contractual provisions of the instrument
trade receivables
trade receivables 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 payables
trade payables are not interestbearing and are stated at their 
nominal value
equity instruments
equity instruments issued by the company are recorded at  
the proceeds received net of direct issue costs
derivative financial instruments
the company uses derivative financial instruments to reduce 
exposure to foreign exchange risk and interest rate movements 
the company 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  yule catto  co plc
annual report and accounts 2010 76
1 accounting policies continued
net borrowings
net borrowings represents cash and cash equivalents together with short and longterm borrowings as adjusted for the effect  
of related derivative instruments irrespective of whether they qualify for hedge accounting
pension funding
the costs of contributions to the group’s pension schemes and of augmenting existing pensions are charged to the profit and  
loss account on a systematic basis over the expected period of benefits from employees’ service
the uk defined benefit scheme is funded with the assets of the scheme held separately from those of the group in separate 
trusteeadministered funds 
payments to defined contribution retirement benefit schemes are charged as an expense as they fall due
2 auditors’ remuneration
the audit fee of yule catto  co plc amounted to £7000 2009 £7 000
3 employees
2010
number
2009
number
the average monthly number of employees during the year was 26 29 
2010
£’000
2009
£’000
the aggregate remuneration of all company employees comprised
wages and salaries 2291 2260 
social security costs 275 273 
post retirement benefits 155 153 
2721 2686
 
4 profitloss attributable to equity shareholders
uk gaap basis
2010
£’000
2009
£’000
attributable to yule catto  co plc 38913 10053
as permitted by section 408 of the companies act 2006 no profit and loss account is presented for yule catto  co plc 
the above has been calculated on a uk gaap basis as this is consistent with the continued presentation of yule catto  co plc’s accounts under uk gaap
5 ordinary dividends
2010
pence per
share
2009
pence per
share
2010
£’000
2009
£’000
interim dividend as originally disclosed 20 – 2913 – 
restatement see note 37 to the consolidated financial statements 07 – 
restated interim dividend 13 – 
proposed final dividend 13 – 4370 – 
 
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included  
as a liability in these financial statements
notes to the company financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 77
introduction business review governance group financial statements company financial statements other information
6 tangible fixed assets
 land and buildings
freeholds
£’000
long
leaseholds
£’000
plant and
equipment
£’000
total
£’000
cost or valuation
at 1 january 2010 2777 89 1442 4308 
additions – – 147 147 
disposals – – – – 
at 31 december 2010 2777 89 1589 4455 
at cost 12 – 1589 1601 
at professional valuation in 1985 2765 89 – 2854 
2777 89 1589 4455 
depreciation
at 1 january 2010 491 47 1237 1775 
charge for the year 20 2 99 121 
eliminated on disposals – – – – 
at 31 december 2010 511 49 1336 1896 
net book value
at 31 december 2010 2266 40 253 2559 
net book value
at 31 december 2009 2286 42 205 2533 
properties included at valuation would have been stated on a historical cost basis at cost of £1877000 2009 £1877 000 and 
depreciation of £437000 2009 £420000
freehold land amounting to £1781000 2009 £1781000 has not been depreciated
7 investments
subsidiaries
£’000
joint
ventures
£’000
other
investments
£’000
total
£’000
cost
at 1 january 2010 334942 500 59 335501 
additions – – 18 18 
at 31 december 2010 334942 500 77 335519 
provisions
at 1 january 2010 1118 220 33 1371 
amortisation – – 11 11 
at 31 december 2010 1118 220 44 1382 
net book value
at 31 december 2010 333824 280 33 334137 
net book value
at 31 december 2009 333824 280 26 334130 
details of the principal group companies are given on page 82 yule catto  co plc
annual report and accounts 2010 78
8 debtors
2010
£’000
2009
£’000
other debtors 1605 900 
prepayments and accrued income 100 78 
1705 978 
9 borrowings
2010
£’000
2009
£’000
current borrowings
bank loans
bank loans and overdrafts 3266 –
other loans
136000000 766 guaranteed senior unsecured notes due 8 september 2010 – 27949 
£15000000 699 guaranteed senior unsecured notes due 8 september 2010 – 5000 
3266 32949 
less capitalised costs – 5
3266 32944 
noncurrent borrowings
bank loans
unsecured £30 million revolving credit facility expiring 2011 – – 
other loans
43000000 555 guaranteed senior unsecured notes due 2 september 2012 27794 26996 
70000000 578 guaranteed senior unsecured notes due 2 september 2014 45246 43948 
22000000 598 guaranteed senior unsecured notes due 2 september 2016 14220 13812 
87260 84756 
less capitalised costs 195 869
87065 83887
 in aggregate £873 million associated with which is the currency impact of derivatives of £127 million net £746 million
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents 
at 31 december 2010 the company had available £30 million 2009 £30 million of undrawn committed borrowing facilities in 
respect of which all conditions precedent had been met this facility was cancelled by the company in january 2011 following 
receipt of the rights issue proceeds and a new facility of £210 million was signed but not drawn down
notes to the company financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 79
introduction business review governance group financial statements company financial statements other information
9 borrowings continued
analysis of borrowings at carrying value by currency
the directors calculate the carrying value of the company’s borrowings as follows
sterling
£’000
us dollar
£’000
euro
£’000
total
£’000
31 december 2010
 bank loans and overdrafts 2994 175 97 3266 
 loan notes – 87260 – 87260 
 capitalised costs 195 – – 195
2799 87435 97 90331 
 cash and cash equivalents 940
 net borrowings 89391 
 deduct special item 12674
 net borrowings underlying performance 76717
31 december 2009
 loan notes 5000 112705 – 117705 
 capitalised costs 874 – – 874
4126 112705 – 116831 
 cash and cash equivalents 1603
 net borrowings 115228 
 deduct special item 9608
 net borrowings underlying performance 105620
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
10 other creditors
2010
£’000
2009
£’000
amount due within one year
trade creditors 1674 1088 
other taxation and social security 97 114 
other creditors 2216 2341 
amounts owed to subsidiaries 96922 104111 
accruals and deferred income 8398 5102 
109307 112756 
11 share capital
2010
£’000
2009
£’000
issued and fully paid
145663187 2009 145663187 ordinary shares of 10 pence each 14566 14566 
issued and nil paid
194217582 2009 nil ordinary shares of 10 pence each – – 
ordinary shares carry no right to fixed income 
as permitted by the companies act 2006 the company removed references to authorised share capital from its articles of 
association at the annual general meeting on 6 may 2010 this change took effect from 6 may 2010 yule catto  co plc
annual report and accounts 2010 80
11 share capital continued
as at 31 december 2010 the following options were outstanding
executive share options number option price
exercisable between 20102012 2194 a
exercisable between 20112018 1018471 a
exercisable between 20122019 4364415 a
exercisable between 20132020 1132673 a
a  options granted under the performance share plan and the longerterm deferred bonus plan with a total exercise price of £55
12 share premium and reserves
share
premium
£’000
revaluation
reserve
£’000
capital
redemption
reserve
£’000
profit and
loss account
£’000
total
£’000
at 1 january 2010 33034 824 949 72021 106828 
profit for the year – – – 38913 38913 
dividends – – – 2913 2913
retained profit for the year – – – 36000 36000 
sharebased payments – – – 500 500 
revaluation depreciation – 2 – – 2
at 31 december 2010 33034 822 949 108521 143326 
13 related party transactions
there were no related party transactions during the year 2009 none
14 guarantees and other financial commitments
the company has given guarantees amounting to £18782000 2009 £18309000 in respect of bank and other facilities  
of subsidiaries and joint ventures
15 pension commitments 
the group participates in a funded scheme with both a defined benefit and defined contribution section the yule catto group 
retirement benefit scheme the scheme’s defined benefit section was closed to new members with effect from 31 december 
1998 and with effect from 1 january 1999 a defined contribution section was introduced and is open to all eligible group 
employees during 2009 the group announced that it intended to close the defined benefit scheme to future accrual this process 
commenced in 2009 and was completed in september 2010
the assets of the scheme are held separately from those of the companies concerned 
the pension charge for the year for the company amounted to £14213000 2009 £6972000
in accordance with frs 17  the company will account for its contributions to the defined benefit scheme as if it were a defined 
contribution scheme because it is not possible to identify the company’s share of the assets and liabilities in the scheme on a 
consistent and reasonable basis the latest actuarial valuation of the scheme prepared for the purposes of making transitional 
disclosure in accordance with frs 17 shows a net pension liability of £56458000 at 31 december 2010
frs 17 disclosure
due to the application of ias 19 to the group financial statements resulting in changes to the required disclosures at group level 
the disclosure requirements of frs 17 for the group have been included below
a full actuarial valuation was carried out as at 6 april 2006 and updated to 31 december 2010 by a qualified actuary the major 
assumptions used by the actuary were
2010 2009 2008 2007 2006
rate of increase in salaries na 300 260 310 330
rate of increase in pensions in payment 325 300 250 250 250
rate of increase in pension in deferment 225 300 250 250 250
discount rate 540 570 650 590 520
inflation assumption 325 300 260 310 280
notes to the company financial statements continued
31 december 2010 yule catto  co plc
annual report and accounts 2010 81
introduction business review governance group financial statements company financial statements other information
15 pension commitments continued
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at each 
balance sheet date were
2010

2010
£’000
2009

2009
£’000
2008

2008
£’000
2007

2007
£’000
2006

2006
£’000
equities 770 110702 800 113673 900 90541 800 148747 790 155121
bonds 540 60829 570 54243 670 47614 517 44925 492 36316 
property 770 10480 – – – – – – – – 
cash 200 12011 200 3899 425 438 425 1953 425 – 
total fair value of assets 194022 171815 138593 195625 191437
present value of scheme
 liabilities 250180 241475 205721 228966 260425
deficit in the scheme 56158 69660 67128 33341 68988
related deferred tax asset – – – – – 
net pension liability 56158 69660 67128 33341 68988
contributions from the sponsoring companies are expected to be £9600000 in 2011
analysis of the amount that would have been charged to operating profit under frs 17
2010
£’000
2009
£’000
current service cost 607 1493 
607 1493 
analysis of the amount that would have been charged to net finance income under frs 17
2010
£’000
2009
£’000
expected return on pension scheme assets 12296 11393
interest on pension scheme liabilities 13450 13068 
1154 1675 
analysis of the actuarial lossgain that would have been recognised in the statement of total recognised gains and losses
2010
£’000
2009
£’000
actual return less expected return on pension scheme assets 7576 21209 
experience gains and losses arising on the scheme liabilities 6500 32753
1076 11544
history of experience gains and losses
2010 2009 2008 2007 2006
difference between the expected and  
 actual return on scheme assets
amount £’000 7576 21209 64742 5891 13800 
percentage of scheme assets  390 1234 4671 301 721
experience lossesgains on scheme liabilities
amount £’000 6500 32753 25273 25872 30988
percentage of the present value of scheme liabilities  260 1356 1229 1130 1190
total actuarial lossesgains recognised in  
 the statement of total recognised gains and losses
amount £’000 1076 11544 39469 19981 17188
percentage of the present value of scheme liabilities  043 478 1919 873 661
16  sharebased payments
for details of sharebased payments please refer to note 34 to the consolidated financial statements on page 71 yule catto  co plc
annual report and accounts 2010 82
principal subsidiaries and joint ventures
operating companies
country of
incorporation
and operation
effective
group interest
in equity

arkem pty ltd south africa 50

distributor of speciality chemicals and allied products
synthomer middle east company saudi arabia 49

synthetic resin emulsions
revertex chemicals pty ltd south africa 100
synthetic resin and emulsions and allied products
revertex malaysia sdn bhd malaysia 70
synthetic resin and emulsions natural rubber latices plasticers
and allied products
synthomer bv netherlands 100
compounds of synthetic rubber latices
synthomer gmbh germany 100
synthetic rubber latices and related compounds
synthomer ltd england 100
synthetic rubber latices and emulsions
synthomer sa belgium 100
compounds dispersions and adhesives
synthomer sae egypt 88
compounds of synthetic and natural rubber latices
synthomer sdn bhd malaysia 100
synthetic rubber latices and related compounds
synthomer vietnam co ltd vietnam 60
synthetic adhesives
union quimico farmaceutica sa uquifa spain 100
pharmaceutical actives and intermediates
uquifa mexico sacv mexico 100
pharmaceutical actives and intermediates
william blythe ltd england 100
inorganic chemicals
holding companies
holiday chemical holdings england 100
yule catto international sa france 100
yule catto bv netherlands 100
yule catto financing ltd ireland 100
yule catto holdings gmbh germany 100
yule catto international ltd england 100
yule catto spain sl spain 100
yule catto nederland bv netherlands 100
 joint ventures
 shares held by yule catto  co plc yule catto  co plc
annual report and accounts 2010 83
introduction business review governance group financial statements company financial statements other information
underlying performance a
2010
£’000
2009
£’000
2008
£’000
2007
£’000
2006
£’000
total sales 645791 532162 591081 503533 476216 
ebitda b 69503 64092 56961 54585 53056 
operating profit c 54885 49416 41694 41165 40270 
finance costs 7840 9869 10502 11497 11443
profit before taxation 47045 39547 31192 29668 28827 
basic earnings per share f g 162p 133p 112p 100p 86p 
dividends per share f 26p na 26p 62p 60p 
dividend cover f 62 na 44 16 14 
net borrowings e 63370 88038 135482 170831 166271
free cash flow before dividends d 9825 39001 7781 14012 8479 
capital expenditure 10592 8687 17707 16994 18468 
ifrs – continuing operations
2010
£’000
2009
£’000
2008
£’000
2007
£’000
2006
£’000
total sales 651480 543398 602153 512925 485137 
ebitda b 69503 64092 56961 54585 53056 
operating profit c 63006 21406 40786 41032 22533 
finance costs 5195 14270 1887 7050 7825
profit before taxation 57811 7136 38899 33982 14708 
basic earnings per share f g 220p 26p 143p 115p 17p 
dividends per share f 26p na 26p 62p 60p 
dividend cover f 85 na 55 19 03 
net borrowings e 76044 97646 161448 150341 150656
free cash flow before dividends d 9825 39001 7781 14012 8479 
capital expenditure 10592 8687 17707 16994 18468 
a as presented in the consolidated income statement on page 36
b as defined in the accounting policies at note 2 and derived in note 36
c as defined in note 2 to the financial statements on pages 40 to 45
d as shown with the consolidated cash flow statement on page 39
e as defined in note 2 to the financial statements and derived in note 30
f as restated see note 37
g as restated see note 12
five year financial summary yule catto  co plc
annual report and accounts 2010 84
notice of meeting
notice is hereby given that the annual general meeting of the 
company will be held at the manor of groves hotel high wych 
sawbridgeworth hertfordshire cm21 0ju on thursday 12 may 
2011 at 230 pm for the following purposes
resolutions 12 13 and 14 will be proposed as special 
resolutions all other resolutions will be proposed as  
ordinary resolutions
ordinary business
1  to receive and adopt the report of the directors and audited 
financial statements for the year ended 31 december 2010
2  to consider the recommendation of the directors as  
to a final dividend for the year ended 31 december 2010 
and if thought fit to declare a final dividend accordingly
3   to approve the report of the board on directors’ 
remuneration for the year ended 31 december 2010
4  to reelect as a director the hon a g catto
5  to reelect as a director dato’ lee hau hian
6 to reelect as a director dr a a dobbie
7 to reelect as a director mr j k maiden
8 to reelect as a director mr d c blackwood
9  to reappoint deloitte llp as auditors of the company to 
hold office until the conclusion of the next annual general 
meeting at which accounts are laid before the company
10  to authorise the directors to determine the remuneration  
of the auditors
special business
11   to resolve that the authority conferred on the directors by 
article 52 of the company’s articles of association be 
renewed for the period ending at the end of the annual 
general meeting in 2012 or on 30 june 2012 whichever  
is the earlier and for such period the section 551 amount 
shall be £11329358 such authority shall be in substitution 
for all previous authorities pursuant to section 551 of the 
companies act 2006
12  to resolve that subject to the passing of resolution 11 
above the power conferred on the directors by article 53 
of the company’s articles be renewed for the period 
referred to in such resolution and for such period the 
section 561 amount shall be £1699403 such authority 
shall be in substitution for all previous powers pursuant  
to section 561 of the companies act 2006
13  that the company be unconditionally and generally 
authorised for the purpose of section 701 of the companies 
act 2006 ‘the act’ to make market purchases as defined 
in section 6934 of the act of ordinary shares of 10p each 
in the capital of the company provided that
  a  the maximum number of shares which may be purchased 
is 33988076
 b  the minimum price which may be paid for each share  
is 10p exclusive of expenses
 
 c  the maximum price which may be paid for a share is  
an amount equal to 105 of the average of the closing 
middle market quotations of the company’s ordinary 
shares as derived from the london stock exchange daily 
official list for the five business days immediately 
preceding the day on which such share is contracted  
to be purchased exclusive of expenses and
 d  this authority shall expire at the conclusion of the next 
annual general meeting of the company or if earlier  
15 months after the passing of this resolution except in 
relation to the purchase of shares the contract for which 
was concluded before the expiry of such authority and 
which might be executed wholly or partly after such 
expiry unless such authority is renewed prior to  
such time
14  that a general meeting other than an annual general 
meeting may be called on not less than 14 clear days’ 
notice
by order of the board
r atkinson
secretary
9 march 2011
registered office
temple fields
central road
harlow
essex
cm20 2bh
registered in england and wales number 98381 introduction business review governance group financial statements company financial statements other information
financial highlights 01 
group overview 02 
yule catto – a world class business 03 
chairman’s statement 04 
chief executive’s report  06 
 polymer chemicals  06 
 pharma chemicals 10 
 impact chemicals 10 
 financial review 12 
 corporate social responsibility report 14
independent auditors’ report 73 
company balance sheet 74 
notes to the company financial statements 75 
independent auditors’ report 35 
consolidated income statement 36 
consolidated statement of comprehensive income 37 
consolidated statement of changes in equity 37 
consolidated balance sheet 38 
consolidated cash flow statement 39 
notes to the consolidated financial statements 40 
directors and advisers 22 
report of the directors 23 
corporate governance 26 
directors’ remuneration report 30 
statement of directors’ responsibilities 34 
principal subsidiaries and joint ventures 82 
five year financial summary 83 
notice of meeting 84 
the group delivered a 19 
improvement in underlying 
profit before tax and achieved 
a further substantial reduction 
in its debt over the course  
of the year
yule catto  co plc
annual report and accounts 2010 85
introduction business review governance group financial statements company financial statements other information
note 2 for this purpose the time of receipt will be taken to be the  
time as determined by the time stamp applied to the message by  
the crest application host from which the issuer’s agent is able to 
retrieve the message by enquiry to crest in the manner prescribed by 
crest after this time any change of instructions to proxies appointed 
through crest should be communicated to the appointee through 
other means 
10  crest members and where applicable their crest sponsors 
or voting service providers should note that euroclear uk  ireland 
limited does not make available special procedures in crest for  
any particular message normal system timings and limitations will 
therefore apply in relation to the input of crest proxy instructions  
it is the responsibility of the crest member concerned to take 
or if the crest member is a crest personal member or sponsored 
member or has appointed a voting service provider to procure that 
his crest sponsor or voting service providers takes such action 
as shall be necessary to ensure that a message is transmitted by 
means of the crest system by any particular time in this connection 
crest members and where applicable their crest sponsors or 
voting system providers are referred in particular to those sections  
of the crest manual concerning practical limitations of the crest 
system and timings 
11  the company may treat as invalid a crest proxy instruction in the 
circumstances set out in regulation 355a of the uncertificated 
securities regulations 2001 
12  any corporation which is a member can appoint one or more 
corporate representatives who may exercise on its behalf all of its 
powers as a member provided that they do not do so in relation  
to the same shares 
13  under section 527 of the companies act 2006 members meeting 
the threshold requirements set out in that section have the right to 
require the company to publish on a website a statement setting  
out any matter relating to i the audit of the company’s accounts 
including the auditor’s report and the conduct of the audit that are 
to be laid before the annual general meeting or 
  ii any circumstance connected with an auditor of the company 
ceasing to hold office since the previous meeting at which annual 
accounts and reports were laid in accordance with section 437  
of the companies act 2006 the company may not require the 
shareholders requesting any such website publication to pay its 
expenses in complying with sections 527 or 528 of the companies 
act 2006 where the company is required to place a statement on 
a website under section 527 of the companies act 2006 it must 
forward the statement to the company’s auditor not later than the 
time when it makes the statement available on the website the 
business which may be dealt with at the annual general meeting 
includes any statement that the company has been required under 
section 527 of the companies act 2006 to publish on a website
 
14  any member attending the meeting has the right to ask questions  
the company must cause to be answered any such question relating 
to the business being dealt with at the meeting but no such answer 
need be given if a to do so would interfere unduly with the 
preparation for the meeting or involve the disclosure of confidential 
information b the answer has already been given on a website in the 
form of an answer to a question or c it is undesirable in the interests 
of the company or the good order of the meeting that the question  
be answered 
15  a copy of this notice and other information required by  
section 311a of the companies act 2006 can be found at  
wwwyulecattocom
designed and produced by the college wwwthecollegeukcom
notes to the notice of meeting
1  members are entitled to appoint a proxy to exercise all or any  
of their rights to attend and to speak and vote on their behalf at  
the meeting a shareholder may appoint more than one proxy in 
relation to the annual general meeting provided that each proxy  
is appointed to exercise the rights attached to a different share or 
shares held by that shareholder a proxy need not be a shareholder 
of the company a proxy form which may be used to make such 
appointment and give proxy instructions accompanies this notice 
2  to be valid any proxy form or other instrument appointing a proxy 
must be received by post or during normal business hours only  
by hand at computershare investor services plc the pavilions 
bridgwater road bristol bs99 6zy or at the electronic address 
provided in the proxy form in each case no later than 48 hours before 
the time appointed for holding the meeting or any adjourned meeting 
3  the return of a completed proxy form other such instrument or any 
crest proxy instruction as described in paragraph 9 below will 
not prevent a shareholder attending the annual general meeting 
and voting in person if heshe wishes to do so 
4  any person to whom this notice is sent who is a person nominated 
under section 146 of the companies act 2006 to enjoy information 
rights a ‘nominated person’ may under an agreement between 
himher and the shareholder by whom heshe was nominated have 
a right to be appointed or to have someone else appointed as a 
proxy for the annual general meeting if a nominated person has no 
such proxy appointment right or does not wish to exercise it heshe 
may under any such agreement have a right to give instructions to 
the shareholder as to the exercise of voting rights 
5  the statement of the rights of shareholders in relation to the 
appointment of proxies in paragraphs 1 and 2 above does not apply 
to nominated persons the rights described in these paragraphs 
can only be exercised by shareholders of the company 
6  to be entitled to attend and vote at the annual general meeting 
and for the purpose of the determination by the company of the 
votes they may cast shareholders must be registered in the 
register of members of the company at close of business on 
tuesday 10 may 2011 or in the event of any adjournment on the 
date which is two days before the time of the adjourned meeting 
changes to the register of members after the relevant deadline 
shall be disregarded in determining the rights of any person to 
attend and vote at the meeting 
7  the company’s capital consists of 339880769 ordinary shares 
with voting rights 
8  crest members who wish to appoint a proxy or proxies through 
the crest electronic proxy appointment service may do so by 
using the procedures described in the crest manual crest 
personal members or other crest sponsored members and those 
crest members who have appointed a service providers should 
refer to their crest sponsor or voting service providers who will 
be able to take the appropriate action on their behalf 
9  in order for a proxy appointment or instruction made using the 
crest service to be valid the appropriate crest message  
a ‘crest proxy instruction’ must be properly authenticated in 
accordance with euroclear uk  ireland limited’s specifications 
and must contain the information required for such instruction as 
described in the crest manual available via wwweuroclearcom
crest the message regardless of whether it constitutes the 
appointment of a proxy or is an amendment to the instruction given 
to a previously appointed proxy must in order to be valid be 
transmitted so as to be received by the issuer’s agent id 3ra50 by 
the latest times for the receipt of proxy appointments specified in  yule catto  co plc  annual report 2010
yule catto  co plc
temple fields
harlow
essex cm20 2bh
uk
t 44 01279 442 791
f 44 01279 641 360
wwwyulecattocom
yule catto  co plc
annual report
for the year ended 31 december 2010
being part of 
all our lives


Summary:
 yule catto  co plc
annual report and accounts 2010 06
567 2010
518 2009
5520 2010
4433 2009
the group delivered a 19 improvement in underlying profit 
before tax and achieved a further substantial reduction in its 
debt over the course of the year this was a good performance 
consolidating the substantial increase in profits and debt 
reduction we delivered in 2009
overview
polymers 85 of sales saw volumes increase by 4  
for the year whilst increasing its operating profit by 10 to 
£567 million as expected this was characterised by strong 
demand growth in asia and only modest improvement 
elsewhere we progressed the expansion of our nitrile facility  
in malaysia commencing construction of 15000 tonnes of new 
capacity which will start production in the first half of 2011 
the acquisition of polymerlatex was announced in december 
2010 and is on track to complete by the end of march 2011 and 
will substantially increase the scale of our polymer business 
polymerlatex is a leading global player in latex products with  
a strong and diversified portfolio of products and well invested 
facilities in europe and asia its combination with yule catto will 
result in a business with increased scale established market 
positions improved cash generation capability and a product 
portfolio that will provide a foundation from which the enlarged 
group can grow and compete more effectively in a consolidating 
emulsion polymers market it will also accelerate our strategy  
of investment in new products and expansion into attractive 
emerging markets
pharmaceuticals 10 of sales saw a decline in profits of  
£11 million after a slow start to the year we filed 3 drug master 
files dmf’s in the year as we continue to develop our generic 
pipeline the api manufacturing industry however remains 
challenging with competition from cheaper manufacturing 
economies in asia continuing to develop 
we completed most of the restructuring of the impact division 
with the sale of four of the five operating units over the course of 
2008 during 2010 the remaining business william blythe further 
improved delivering operating profits of some £35 million 
the core products of polymer division are waterbased 
emulsion polymers formulated around vinyl acetate and acrylic 
dispersions styrene and nitrile butadiene rubber as well as 
polyvinyl alcoholacetate and a number of smaller specialist 
products the division’s manufacturing assets consist of  
22 production units on 14 sites within four geographical regions 
– europe south east asia middle east and south africa and 
employing approximately 1300 people the division trades 
under the synthomer and revertex brand names around the 
world and its products are utilised in a wide range of industries 
including coatings adhesives and construction where they 
deliver a range of product performance benefits from 
enhanced waterproofing to scratch resistance it is also a major 
supplier to the medical industry where its natural rubber and 
synthetic nitrile latex polymers are used in the manufacture  
of condoms catheters surgical and examination gloves where 
it holds a world leading position
2010 proved to be another successful year for the division  
in challenging circumstances with progress again made on a 
number of fronts in many markets there was positive economic 
recovery particularly in asia however europe and the us proved 
more sluggish and remained weaker than had been predicted  
in most markets volumes developed strongly through the first 
half although this was followed by more variable performance  
in some european markets in the later part of the year the 
division’s full year polymer volumes were up 4 led by excellent 
performance in nitrile butadiene rubber alkyd resins and 
specialities which all delivered significant double digit growth
raw material supply and pricing in particular acrylic and 
butadiene monomers created a number of difficulties which  
the business worked hard to overcome throughout the year  
all monomer prices showed a resilient upward move during the 
year and this combined with a tight supply environment created 
a number of challenges for the business however the division 
was generally able to mitigate these by effective procurement 
strategies enabling production to continue albeit with 
significantly higher input prices in the light of the rising raw 
material costs and relatively stable demand in europe the 
division’s priority was to ensure a balanced approach to margin 
and volume with a continued focus on value delivery which  
was broadly successful the cost strategy employed in 2009 
delivered benefits in 2010 with full year costs down on 2009
chief executive’s report
total sales £’m 
divisional operating profit £’m 
 underlying performance
polymer chemicals yule catto  co plc
annual report and accounts 2010 07
introduction business review governance group financial statements company financial statements other information
innovation interior
more information at
wwwyulecattocom
emultex vv67 series
emultex vv67series is a new range of polymer dispersions 
introduced in 2010 for use in modern domestic wall and ceiling 
paints the emultex vv67series uses new monomer 
combinations in the design of binders for highly washable 
scrub resistant vinyl wall paints emultex vv673 in particular can 
be used in a wide range of matt and silk paint finishes and has 
been designed to meet stringent requirements set out by the 
european community ecolabel regulations for indoor paints 
 
revacryl 30128 
revacryl 30128 a new apeo free pure acrylic copolymer 
dispersion was developed to complement our existing flooring 
adhesive range produced as an adhesive for laying carpet tiles 
it offers excellent adhesion to a wide range of backing materials 
the overall polymer design not only provides a permanently 
tacky film to prevent loose lay carpet tiles from moving but  
also allows the carpet to be lifted and replaced with ease
revacryl 5737 
revacryl 5737 was developed as a new polymer for the 
formulation of solvent free low odour emulsion paints for 
interior decorating the polymer is used in high quality  
wash resistant paints another innovative product created  
to meet the most stringent demands for environmentally 
friendly low voc interior paints that are becoming  
increasingly important to global markets
synthomer 3560 
synthomer 3560 is a new crosslinked polymer latex for  
woven carpets that meets the latest regulatory and indoor  
air quality requirements synthomer 3560 gives a high quality 
carpet backing with good runnability on the coater and a  
high penetration into the woven yarn the product has excellent 
cut edge strength in the end application leading to a high 
quality and durable carpet
polymers saw volumes 
increase by 4 whilst 
increasing operating 
profit by 1 0
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annual report and accounts 2010 08
we upgraded our latex and lithene research facilities during  
the year and higher margin new product launches supported 
profitability over the course of the year
the uk business in particular suffered during the year with 
three unplanned events holding back latex production volumes 
over the course of the year butadiene supply issues in the first 
quarter were effectively resolved by sourcing higher cost raw 
materials from europe a styrene fire at the stallingborough 
plant temporarily impacted production in the third quarter and 
the extremely cold weather in december reduced our ability  
to produce and ship
synthetic latex
polymer division’s synthetic latex dispersions business 
consists of two product families styrene butadiene rubber 
sbr manufactured in germany and the uk and nitrile 
butadiene rubber nbr manufactured in the uk and malaysia
overall sbr latex had a very positive year with a degree of 
recovery in the construction and specialities market with non 
carpet volumes improving by almost 7 over 2009 previously 
mentioned issues in stallingborough did limit progress in the 
carpet market where conditions also remained difficult and 
volumes were down on prior year
in nbr the business experienced strong demand for gloves in 
part bolstered by the high cost of natural rubber margins were 
held stable in the face of rising monomer costs and strong 
competition to meet the continued growth in demand for nbr 
the board approved a new phase of expansion in malaysia 
which is expected to start up before the end of h1 2011 and 
add 15000 tonnes of capacity
dispersions
2010 was a disappointing year for dispersions with low 
customer demand in the european decorative paint market 
slightly lower volumes than 2009 were also experienced in 
south africa and the middle east however strong margin 
management allowed these businesses to deliver an improved 
bottom line asia as in most other product groups developed 
positively during the year with volumes strongly ahead 
chief executive’s report continued
compounds
the european carpet market remains in a volatile state  
and while there is evidence that the market is strengthening 
volumes declined slightly from 2009 while a number of 
customers have reported anticipated improvements this 
is yet to be reflected in visible demand or actual sales
specialities
polyvinyl alcohol
alcotex
®
 had another very good year with excellent progress  
in both volume and margin demand globally recovered and 
volumes moved ahead strongly with a particularly strong 
performance in asia during the year further investment was 
made in improving plant performance which resulted in several 
record months of production
 
liquid polybutadiene
2010 saw a very strong recovery in lithene
®
 sales on the back 
of a more buoyant automotive sector volumes increased 
strongly and the work on improving product mix has continued 
to deliver benefits further investments in the plant during the 
year have delivered more consistent quality and the ability of 
this plant to produce at higher levels of output 
alkyds and polyester
the recovery of industrial markets in south east asia drove 
demand for alkyd resins while the lack of new infrastructure 
projects severely retarded polyester sales the flexible nature of 
these plants allowed more alkyd resin to be produced resulting 
in a double digit volume increase and strong margins while 
polyester experienced a decline in aggregate the combined 
business delivered a good volume increase and improved 
profitability
natural rubber
natural rubber had a very difficult year with volumes down 6 
heavy rainfall in southern thailand and malaysia resulted in 
lower volumes of field latex and cl60 which resulted in a strong 
and consistently upward move for the natural rubber price 
these conditions forced many manufacturers to halt production 
or switch to nbr where they could resulting in the lowest sales 
volume achieved for a number of years however this volume 
deficit was more than compensated by higher pricing and 
increased margin yule catto  co plc
annual report and accounts 2010 09
introduction business review governance group financial statements company financial statements other information
more information at
wwwyulecattocom
innovation infrastructure
higher margin new 
product launches 
supported profitability 
over the course of  
the year
synthomer 902series 
synthomer has developed the 902series of sbr latices  
for chemical bonding of polyester nonwoven reinforcement 
materials for roofing applications modified bitumen membranes 
for modern and ecological flat or lowslope roofing systems 
require high performance reinforcement materials such as  
fiber glass polyester or composite materials based on a  
highly crosslinked polymer these latices provide excellent 
processability as well as the required strength and thermo
dimensional stability performance in the finished nonwoven 
materials they contribute to the durability of modern flat roofing 
systems for both industrial and residential construction projects 
revacryl 5511 
revacryl 5511 enables the formulation of coatings with high 
water resistance excellent crack bridging properties and low 
dirt pick up a new elastomeric acrylic copolymer dispersion 
has been introduced for flexible exterior wall coatings the 
polymer was designed for coatings which are extremely flexible 
under cold conditions but do not become tacky and attract dirt 
at higher temperatures coatings based on revacryl 5511 can 
be applied to exterior walls with cracks of up to 2mm and 
remain in excellent condition even after exposure to low 
temperatures
synthomer 11003
synthomer 11003 is based on the latest styrene butadiene  
latex technology the next generation polymer for ‘liquid  
applied membrane’ products damp proof membranes has 
been specifically developed to meet demanding environmental 
and regulatory needs the main application is protecting 
substrates like plasterboard and wood against water and 
moisture vapour the liquid membrane is typically applied  
on the wall before tiling for example in bathrooms and similar 
wet room constructions 
revacryl 5840 
revacryl 5840 is an environmentally friendly apeofree  
and low odour styrene acrylic copolymer for primer 
applications revacryl 5840 has been designed to form  
a polymer film sealing the substrate surface and ensuring 
excellent adhesion of the subsequently applied levelling 
compound high performance primers are required for  
example when applying self levelling flooring compounds  
in order to ensure good bonding of the compound to the 
substrate revacryl 5840 has been designed to be used  
on mineral surfaces as a universal adhesion promoter in 
demanding applications
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