norman hay plc 
 
 
 
 
 
report and accounts 2007  a nnual r ep ort 20 07
01
welcome
financial highlights 2007
the norman hay group is a specialist chemicals business 
focused on global opportunities for sealants and surface coatings
designed to operate in hostile and challenging environments
we market a portfolio of industry brand leaders recognised 
and respected by a diverse range of industries around the world
● revenue up 18 
● international revenue up 45 
● operating profits before nonrecurring items up 16
● pretax profits increased to £234m
● earnings per share increased to 114p
● dividend for the year up 33 
contents
financial highlights 1
business divisions 2
worldwide presence 3
chairman’s statement 4
chief executive’s business review 6
directors and advisers 10
report of the directors 11
statement of directors’ responsibilities 14
independent auditors’ report 15
consolidated income statement 16
consolidated balance sheet 17
consolidated cash flow statement 18
consolidated statement of recognised 
income and expense 19
notes to the group financial statements 20
parent company balance sheet 48
notes to the financial statements 
of the parent company 49
notice of meeting 57
form of proxy 59
77354 pre  19508  1841  page 1 business divisions
n or m an h ay p l c
02
automotive sealants
“we make things pressuretight”
specialist impregnation
sealants
– solutions for managing microporosity
in castings
about us
we are world leaders in the supply of
thermocure methacrylate sealants for
the impregnation of porous metal
castings sub contract sealing systems 
and impregnation process plant
our client industries
general engineering
automotive suppliers
gas  water industries
automotive manufacturers
foundry  die cast industry
our norman hay businesses
ultraseal
norman hay engineering
mx systems international
construction sealants
“we make things waterproof”
specialist waterproof sealants
– solutions for structural waterproofing
about us
we are world leaders in specialist
chemicals for waterproofing leak sealing
ground stabilisation substrate repair 
and protection of constructions above 
and below ground
our client industries
ports  water authorities 
water retaining structures
construction and buildings
tunnels utilities  airports
surface  underground rail
civil engineering  highways
our norman hay businesses
tam international
surface coatings
“we make things tougher”
specialist industrial coatings
– solutions for surface release wear 
and corrosion resistance
about us
we are world leaders in industrial surface
coatings and associated process plant 
we modify component surfaces to
improve performance in hostile and
challenging environments
our client industries
marine
precision engineering
mining and extraction
aviation and aerospace
sterile food manufacture 
oil gas and petrochemical
our norman hay businesses
armourcote
surface technology
norman hay engineering
applied precision coatings
hi tech coatings
we operate a portfolio of brand leaders recognised and
respected around the world
our specialist chemical divisions
77354 pre77354 pre  20508  1925  page 2 a nnual r ep ort 20 07
worldwide presence
03
we are accelerating our global activities and developing our worldwide
infrastructure of manufacturing units sales offices and distribution networks
we continue to make selective acquisitions appoint new distributors and 
invest in joint ventures to take advantage of emerging world markets
group locations distributor network
usa  ann arbor  uk 
east kilbride
leeds
coventry
daventry
slough
india  pune singapore
china  shanghai  
japan  tokyo 
hong kong
australia 
adelaide
brisbane
perth
malaysia 
port klang
77354 pre  19508  1841  page 3 chairman’ s statement
n or m a n h ay p l c
04
2007 was another excellent year for the norman
hay group with underlying operating profits up 16 
on the previous year
our continuing success results from streamlining our
lower margin operating units in the uk coupled with 
a drive to increase international revenues
this focus has exposed the improved high margins we 
are able to achieve in the niche chemical businesses 
in which we specialise and which we are developing
around the world
dividends
a final dividend for the year of 26p is proposed 
2006 20p making the total for the year 44p an
increase of 33 on the preceding year’s total of 33p
if approved at the annual general meeting to be held
on 18 june 2008 the dividend will be paid on 25 july
2008 to shareholders on the register on 20 june 2008
business overview a focus on 
chemical excellence
norman hay plc’s strength lies in our niche chemical
businesses their names and brands are recognised and
respected around the world 
the group comprises three main chemical divisions
surface coatings — “armourcote”
automotive sealants — “ultraseal”
construction sealants — “tam international”
these three primary divisions are supported by the
engineering operation which manufactures specialist
process plant and equipment
business in the uk for our subcontract surface coating
services has remained strong and we are reaching out
to service the requirements of our multinational
customers by investing in operations overseas 
in november 2007 we acquired hitech coatings 
in perth western australia and in the second 
quarter of 2008 we announced the opening of our 
new armourcote facility in port klang malaysia 
these businesses will jointly service the growing
requirements of the oil and gas exploration industries
of the region
international demand for our ultraseal range of
recyclable impregnation sealants for the automotive
industry remains strong with new installations in
europe india and china
our acquisition of tam international at the end of 2006
has allowed us to enter the construction industry a
new and significant market place for the group 
during the year we have invested in strengthening
tam’s technical manufacturing and marketing
infrastructure so as to allow the business to expand
substantially over the next few years
the engineering business an amalgamation of all of
the group’s historic plant manufacturing operations
has performed well this year 
well known and respected for the quality of its
engineering design the business has continued to
develop its strong customer base worldwide
staff
as the group grows and we welcome new colleagues
from around the globe to our operations i would like 
to thank all those working in our existing businesses
their hard work and dedication and in many cases
long service has allowed us to build the strong base
upon which our international expansion is founded
77354 pre  19508  1841  page 4 a nnual r ep ort 20 07
05
current position and outlook
in april of this year following the sale of our 
bk engineering business to its management in 2006
we sold the freehold site in bedfordshire
we are still working with unite plc but as yet have 
not been able to secure an acceptable planning
consent for student accommodation on our coventry
city centre site 
as the city council continues to review plans for the
renewal of coventry our site remains excellently
located for whatever shape that plan eventually takes
in addition to our aim listing the group’s ordinary
shares were also admitted to trading on plus markets
in march 2008 with the same ticker symbol hnn as
on aim 
this will i believe help bring increased liquidity for
shareholders as well as providing greater access to
investors norman hay’s shares will continue to be
quoted and traded on aim 
i am pleased to say that the year has started well 
and current trading remains buoyant throughout
the group 
peter l hay
chairman
20 may 2008 
the group has
successfully executed
the initial stage of its 
refocused strategy 
on specialist chemical
products we are now
strongly positioned 
to realise the global
opportunities of these
value added growth
markets
77354 pre  19508  1841  page 5 n or m a n h ay p l c
06
chief executive’ s business review
norman hay group review of 2007
i am pleased to report that the norman hay group 
has continued to pursue successfully its strategy of
worldwide growth during 2007
financial performance
the reported profit before tax for the year was £234m
representing an 8 increase over last year — another
record for the group the group’s balance sheet remains
strong with low gearing
operations
our operations are divided into three primary divisions
and brands 
specialist surface coatings — “armourcote”
automotive sealants — “ultraseal”
construction industry sealants — “tam”
the three primary divisions are supported by norman
hay engineering manufacturers of chemical process
plant and equipment each division contains various
respected subbrands and products
our three world leading
chemical brands are
77354 pre  19508  1841  page 6 a nnual r ep ort 20 07
specialist surface coatings armourcote
brand armourcote
surface coatings are designed to inhibit corrosion and
provide surface release for marine petrochemical
general engineering and sterile food manufacturing
equipment the armourcote brand is one of the strongest
names in the market place 
leedsbased armourcote was acquired in 1988 along
with surface finishing businesses in coventry and east
kilbride which now operate under the name of surface
technology plc
armourcote’s reputation is founded on consistent high
quality attention to detail and the ability to handle
components of all sizes this differentiates armourcote
from the competition it specialises in solving problems
and providing the technical expertise that our
customers have come to expect from us 
as well as operating from our leeds headquarters
where the process development centre is located the
armourcote range of coatings is offered through a
growing number of subcontract business locations
these surface technology subcontract centres operate
in the uk from sites in scotland leeds coventry and
slough giving us the ability to respond rapidly to
customer needs throughout the country 
as our major oil tool customers expand their operations
in south east asia armourcote’s strategic focus has
been on opportunities to provide process facilities on 
a global basis 
in the second quarter of 2008 the new armourcote
facility in malaysia became operational this facility
will complement hitech coatings located in perth
western australia which norman hay acquired in
november 2007 
the oil and gas exploration and extraction industries
which we serve are becoming increasingly active in the
waters off the western coast of australia stretching up
to the malaysian peninsula together our two new
operations will service the needs of our oil tool
customers in providing the range of armourcote
coatings required to protect their components 
working in these hostile marine environments
in december 2007 we acquired the remaining minority
shareholding of apc ltd and we are in the process of
relocating the operation from bradford to a new facility
close to our armourcote business in leeds
the surface coatings division continues to produce
excellent results the integration of hitech coatings
and the opening of the new malaysian business give a
positive outlook for 2008 as we expand into promising
emerging markets 
07
77354 pre  19508  1841  page 7 chief executive’ s business review continued
n or m a n h ay p l c
automotive sealants ultraseal
brands ultrasealrexealmx
ultraseal international is a global leader in providing
practical solutions to the ubiquitous problem of micro
porosity in metal castings using a process known as
resin impregnation norman hay plc acquired ultraseal 
in 1999
ultraseal is the acknowledged world leader in its field
providing consumable sealant and capital vacuum
impregnation equipment to a global customer base
predominantly in the automotive sector
the focus and commitment to the automotive industry
is demonstrated by the strategic location of a wholly
owned subsidiary in the detroit area of usa a sales 
and distribution office in tokyo a joint venture and
manufacturing facility in india and more recently 
by establishing licensee and joint venture companies 
in the rapidly expanding chinese market 
ultraseal is also world renowned for the development
and supply of the only globally approved recycling
sealant 
the research and development programme in its
coventry laboratories continues to focus on advanced
products that are not only more environmentally
friendly but which also have less overall requirement
on energy consumption thus reducing the carbon
footprint for this sector of industry
ultraseal has an excellent technically supported sales
and distribution network worldwide a key part of its
strategy is to seek out additional companies whose
products could be added to its global offering to the
automotive industry 
ultraseal produced good profits in 2007 and the
demand for impregnation sealants remains strong
construction industry sealants tam
brands tampurtamacryltamsil
tamsealtamcrete
tam international is a world leader in structural
waterproofing using specialist polymers and epoxies
norman hay plc acquired 75 of tam international in
december 2006
tam has manufactured and supplied specialist
chemicals and waterproofing products for the
construction and building industry for over 25 years
it has sales distribution and manufacturing activities
strategically located worldwide to serve the global
construction industry the main manufacturing sites
are  in the uk and australia with smaller blending
facilities in singapore and hong kong
the world market for construction chemicals is
estimated to be in the region of 20bn tam operates
in niche product areas bringing the opportunity to
grow substantially both organically and geographically
tam is currently in the process of reviewing a variety 
of manufacturing and distribution opportunities
including joint ventures in the gulf states india
taiwan and other emerging markets 
sales grew during 2007 as a strategic review of the
business was undertaken tam made a modest
contribution to overall group profits in the year 
as we invested in a stronger sales and marketing
capability designed to support our high expectations
for the future 
08
77354 pre  19508  1841  page 8 a nnual r ep ort 20 07
chemical process plant and equipment
norman hay engineering
norman hay engineering our process plant operation
manufactures capital plant and equipment under the
plasticraft pmd ultraseal and ardrox banners
this supports the activities of ultraseal international
with the design and manufacture of highly specialised
vacuum impregnation plants for turnkey projects
predominantly for the automotive industry 
plasticraft and pmd branded metal processing plants 
are designed for aerospace automotive and general
engineering customers and are complemented by 
the ardrox range of ndt nondestructive testing 
crack detection machines
summary
norman hay plc is sharply
focused on industries and
customers that value its
unique products innovative
technologies and processes
we will actively continue
to seek out opportunities
for acquisitions joint
ventures and new
partnerships with
distributors to support
our worldwide growth 
victor p bellanti
chief executive 
20 may 2008
09
77354 pre  19508  1841  page 9 directors and advisers
n or m a n h ay p l c
10
executive directors
peter l hay  chairman
peter hay  has been on the board of the company for thirty five years serving as managing director for 
eleven years
victor p bellanti  chief executive
victor bellanti has been with norman hay plc for fourteen years a graduate qualified accountant
he was previously the group finance director and was appointed chief executive in march 2000
nonexecutive directors
anthony m hay  nonexecutive director
anthony hay has been a director of the company for forty four years served as chairman from 1984 to 
1993 and is independent from the day to day running of the group he is chairman of the audit and 
remuneration committees
david w miller  nonexecutive director
david miller chief operating officer up until his retirement on 30 december 2006 was employed by 
norman hay plc for seven years following a successful international executive career in february 2007 
david rejoined the company as a nonexecutive director
secretary and registered office
brigid m cattle
godiva place coventry  cv1 5pn
registered number 405025
auditors
bdo stoy hayward llp
125 colmore row birmingham b3 3sd
bankers
bank of scotland 38 st andrew square
edinburgh  eh2 2yr
close brothers 10 crown place
london  ec2a 4ft
registrars
equiniti
po box 28448
finance house
orchard brae
edinburgh  eh4 1wq
nominated adviser and broker
brewin dolphin securities limited
po box 512
national house
36 st ann street
manchester  m60 2ep
77354 pre  19508  1841  page 10 a nnual r ep ort 20 07
report of the directors
11
the directors have pleasure in submitting their annual
report and audited financial statements for the year 
ended 31 december 2007
results and dividends
the group income statement is set out on page 16 
and shows revenue for the year of £240m and profits 
on ordinary activities before tax of £234m
revenue has risen 18 whilst pre tax profits are up 
by 77
business review
the business information on pages 2 and 3 and the
chairman’s statement and chief executive’s business
review on pages 49 provide detailed information
relating to the group and the operation and
development of the business for the year ended
31 december 2007
principal risks and uncertainties
during the last year the group has continued 
to execute strategies to optimise business
opportunities and minimise exposure to principal 
risks and uncertainties
we have now established the group framework 
built on three separate business divisions surface
coatings automotive sealants and construction
sealants and have extended our global reach to
improve our geographical presence
as the group expands worldwide there is a potential
risk of financial loss or damage to our reputation
resulting from inadequate or failed internal processes
and systems or the actions of people or external
events the group manages these potential risks
through appropriate controls and loss mitigation
actions examples include
taking sufficient insurance cover including business
interruption
maintaining disaster recovery plans for all 
major sites
maintaining rigorous data backup procedures
carrying out a regular review of the principal
suppliers and customers of the group and how
each impacts on the group’s business
regularly reviewing performance against budgets
and forecasts and
establishing clearly defined procedures for the
authorisation of major new investments and
commitments
the board and management teams continue to
monitor potential risk areas and adjust tactical and
strategic plans accordingly to protect our businesses
another key element and principal risk of managing
the group’s growth is our personnel it is important
that the group succeeds in attracting developing and
retaining qualified experienced and motivated staff
worldwide
the board of directors of norman hay accept their
collective responsibility in providing health and safety
leadership and regard the effective management of
health and safety risks as key to the fulfilment of the
group’s business objectives
financial instruments
details of the use of financial instruments and
financial instruments risk management are contained
in note 32 of the financial statements
international financial reporting standards ifrs
the adoption of ifrs is mandatory for uk aim listed
groups’ consolidated financial statements with effect
from 1 january 2007
the group has prepared the 31 december 2007
financial statements in accordance with ifrs including
the 2006 comparatives 
directors
the directors of the company shown on page 10 
held office throughout the year  mr peter hay retires 
by rotation and being eligible offers himself for
reelection
77354 pre  19508  1841  page 11 report of the directors continued
n or m a n h ay p l c
12
directors’ interests
interest in shares
the interests of the directors and their immediate
families in the share capital of the company on the
dates set out below are as follows
at 1 january 31 december 
2007 2007
beneficial beneficial
p l hay 1910221 2210870
a m hay 1107521 1108170
v p bellanti 125000 125000
d w miller 92000 264750
details of the directors’ interests in share options 
are as follows
interest in share options
opening at closing at
1 january 31 december 
2007 2007
p l hay approveda 144925 144925
v p bellanti approved a 144925 144925
v p bellanti unapproved b 620075 620075
p l hay unapproved b 420075 420075
a the approved options are exercisable between 
5 july 2009 and 4 july 2016 at 69p per share
b the unapproved options are exercisable between 
5 july 2006 and 4 july 2016 at 69p per share 
upon the share price achieving 250p or a change 
in control
at 31 december 2007 the middle market price of the
ordinary shares was 1145p per share and the range 
during the year was between 77p and 1525p
substantial shareholdings
at 31 december 2007 the company has been notified 
of the following holdings in the issued share capital 
of the company
ordinary shares 
mr p l hay 2210870 1492
mrs g luker 1476571 996
mr a m hay 1108170 748
miss c bewsher 747161 504
mr d bewsher 746511 503
mr n hendy 467500 315
miss a hendy 405000 273
westcombe investments 352500 237
mr hendy and miss hendy may be considered
associates of westcombe investments these three
shareholders do not consider themselves to be a
concert party under the rules of the takeover panel
however they consider that they may be deemed to 
be acting in concert by certain regulatory bodies
save as disclosed no other person or company has a
material interest in the shares of the company of 3 
or more or being an investment manager interests
aggregating to 10 or more
creditors payment policy
the group’s policy for all suppliers is to fix terms of
payment when agreeing the terms of each business
transaction to ensure the supplier is aware of those 
terms and to abide by the agreed terms of payment 
at 31 december 2007 creditors represented 57 days 
of purchases for the year the company has negligible
trade creditors
indemnity cover
third party indemnity cover for the directors was 
in force during the year
77354 pre  19508  1841  page 12 a nnual r ep ort 20 07
13
employees
the directors place considerable value on the
involvement of employees and recognise the
importance of communicating effectively on matters
which affect their current and future interests 
this communication is achieved through regular
meetings at local operating level and through 
informal briefing sessions
the group’s policy is to ensure that as far as is
reasonably practicable there is a working environment
which will minimise the risk to health and safety of its 
employees and those persons who are authorised 
to be on its premises
the group continues to give full and fair consideration
to applications for employment from disabled persons
having regard to their particular aptitudes and abilities
if an employee becomes disabled the group endeavours
to continue his or her employment if this is practicable
and in appropriate cases special training may be given
donations
donations for charitable purposes during the year 
were £819 200  £2149 no political contributions
were made
new articles of association
in order to bring our current articles of association 
into line with the companies act 2006 amendments
have been made to our current articles as defined 
in the attached appendix to the annual report
resolutions to approve the new articles and to 
take account of provisions that come into force 
on 1 october 2008 will be made at the annual 
general meeting on 18 june 2008
the new articles of association will be available for
inspection at our registered office or at the office of
halliwells solicitors 1 threadneedle street london
ec2r 8ay
auditors
all of the current directors have taken all the steps that
they ought to have taken to make themselves aware of
any information needed by the company’s auditors for
the purposes of their audit and to establish that the
auditors are aware of that information the directors
are not aware of any relevant audit information of
which the auditors are unaware 
bdo stoy hayward llp have expressed their willingness
to continue in office and a resolution to reappoint
them will be proposed at the forthcoming annual
general meeting
by order of the board
brigid m cattle
company secretary
20 may 2008
6
77354 pre  19508  1841  page 13 statement of directors’ responsibilities
n or m a n h ay p l c
14
directors’ responsibilities
the directors are responsible for keeping proper
accounting records which disclose with reasonable
accuracy at any time the financial position of the
group for safeguarding the assets of the company 
for taking reasonable steps for the prevention and
detection of fraud and other irregularities and for the
preparation of a directors’ report which complies with
the requirements of the companies act 1985
the directors are responsible for preparing the annual
report and the financial statements in accordance 
with the companies act 1985 the directors are 
also required to prepare financial statements for the
group in accordance with international financial
reporting standards as adopted by the european 
union ifrs and the rules of the london stock
exchange for companies trading securities on the
alternative investment market the directors have
chosen to prepare financial statements for the group
holding company norman hay plc the company in
accordance with uk generally accepted accounting
practice uk gaap
group financial statements
international accounting standard 1 requires 
that financial statements present fairly for each
financial year the group’s financial position financial
performance and cash flows this requires the faithful
representation of the effects of transactions other
events and conditions in accordance with the
definitions and recognition criteria for assets liabilities
income and expenses set out in the international
accounting standards board’s ‘framework for the
preparation and presentation of financial statements’
in virtually all circumstances a fair presentation will 
be achieved by compliance with all applicable ifrs 
a fair presentation also requires the  directors to
consistently select and apply appropriate
accounting policies
present information including accounting 
policies in a manner that provides relevant 
reliable comparable and understandable
information and
provide additional disclosures when compliance
with the specific requirements in ifrs is
insufficient to enable users to understand the
impact of particular transactions other events and
conditions on the entity’s financial position and
financial performance 
parent company financial statements
company law requires the directors to prepare
financial statements for each financial year which 
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 these financial statements
the directors are required to
select suitable accounting policies and then apply
them consistently
prepare the financial statements on a going concern
basis unless it is inappropriate to presume that the
company will continue in business 
make judgments and estimates that are reasonable
and prudent and
state whether applicable accounting standards have
been followed subject to any material departures
disclosed and explained in the financial statements
financial statements are published on the group’s
website in accordance with legislation in the united
kingdom governing the preparation and dissemination
of financial statements which may vary from
legislation in other jurisdictions the maintenance and
integrity of the group’s website is the responsibility of
the directors the directors’ responsibility also extends
to the ongoing integrity of the financial statements
contained therein 
77354 pre  19508  1841  page 14 a nnual r ep ort 20 07
independent auditors’ report
15
we have audited the group and parent company
financial statements the “financial statements” of
norman hay plc for the year ended 31 december 2007
which comprise the consolidated income statement
the consolidated and company balance sheets the
consolidated cash flow statement the consolidated
statement of recognised income and expense and the
related notes these financial statements have been
prepared under the accounting policies set out therein
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual
report and accounts and group financial statements 
in accordance with applicable law and international
financial reporting standards ifrs as adopted by 
the european union and for preparing the parent
company financial statements in accordance with
applicable law and united kingdom accounting
standards united kingdom generally accepted
accounting practice are set out in the in the 
statement of directors’ responsibilities
our responsibility is to audit the financial statements 
in accordance with relevant legal and regulatory
requirements and international standards on 
auditing uk and ireland
we report to you our opinion as to whether the
financial statements give a true and fair view and 
have been properly prepared in accordance with the
companies act 1985 and whether the information
given in the directors’ report is consistent with those
financial statements we also report to you if in our
opinion the company has not kept proper accounting
records if we have not received all the information and
explanations we require for our audit or if information
specified by law regarding directors’ remuneration and
other transactions is not disclosed
we read other information contained in the 
annual report and consider whether it is consistent
with the audited financial statements the other
information comprises the financial highlights the
business divisions the worldwide presence the
chairman’s statement the chief executive’s business
review the directors and advisers and the report
of the directors we consider the implications for 
our report if we become aware of any apparent
misstatements or material inconsistencies with the
financial statements our responsibilities do not
extend to any other information
our report has been prepared pursuant to the
requirements of the companies act 1985 and for no
other purpose no person is entitled to rely on this
report unless such a person is a person entitled to rely
upon this report by virtue of and for the purpose of the
companies act 1985 or has been expressly authorised
to do so by our prior written consent save as above we
do not accept responsibility for this report to any other
person or for any other purpose and we hereby
expressly disclaim any and all such liability
basis of audit opinion
we conducted our audit in accordance with
international standards on auditing uk and ireland
issued by the auditing practices board an audit
includes examination on a test basis of evidence
relevant to the amounts and disclosures in the financial
statements it also includes an assessment of the
significant estimates and judgments made by the
directors in the preparation of the financial statements
and of whether the accounting policies are appropriate
to the group’s and company’s circumstances
consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all
the information and explanations which we considered
necessary in order to provide us with sufficient evidence to
give reasonable assurance that the financial statements
are free from material misstatement whether caused
by fraud or other irregularity or error in forming our
opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements
opinion
in our opinion
the group financial statements give a true and fair
view in accordance with ifrs as adopted by the
european union of the state of the group’s affairs
as at 31 december 2007 and of its profit for the
year then ended
the parent company financial statements give a
true and fair view in accordance with united
kingdom generally accepted accounting practice
of the state of the parent company’s affairs as at
31 december 2007
the financial statements have been properly prepared
in accordance with the companies act 1985 and 
the information given in the directors’ report is
consistent with the financial statements
bdo stoy hayward llp
chartered accountants and registered auditors
birmingham
20 may 2008
77354 pre  19508  1841  page 15 consolidated income statement
for the year ended 31 december 2007
n or m a n h ay p l c
16
2007 2006
note £000 £000
revenue 2 23959 20250
cost of sales 15327 12857
gross profit 8632 7393
distribution expenses 631 370
administrative expenses 5606 5088
other operating income – 133
operating profit before nonrecurring items 2395 2068
profit on sale of assets 4 – 417
loss on disposal of business 5 – 290
operating profit 3 2395 2195
finance income 6 190 193
finance costs 7 243 214
profit on ordinary activities before taxation 2342 2174
taxation 9 672 573
profit on ordinary activities after taxation 1670 1601
attributable to
equity holders of the parent 1637 1575
minority interest 33 26
1670 1601
basic earnings per share 11 114p 108p
diluted earnings per share 11 114p 107p
all amounts relate to continuing activities
the notes shown on pages 20 to 47 form part of these financial statements
77354 accounts  19508  2005  page 16 a nnual r ep ort 20 07
consolidated balance sheet
at 31 december 2007
17
2007 2006
note £000 £000 £000 £000
assets
noncurrent assets
intangible assets 12 2437 2035
property plant and equipment 13 4633 4094
investments 14 26 26
other receivables 72 198
total noncurrent assets 7168 6353
current assets
inventories 15 1795 1181
trade and other receivables 16 6774 5718
cash and cash equivalents 17 801 1464
assets held for sale 33 271 271
total current assets 9641 8634
total assets 16809 14987
liabilities
current liabilities
other financial liabilities 18 659 822
trade and other payables 19 3870 3352
provisions 20 142 190
current tax liabilities 21 682 405
total current liabilities 5353 4769
noncurrent liabilities
other financial liabilities 22 1331 1026
deferred tax liabilities 23 144 146
total noncurrent liabilities 1475 1172
total liabilities 6828 5941
net assets 9981 9046
equity
share capital 26 1481 1452
share premium account 27 1254 1170
capital redemption reserve 27 94 94
other nondistributable reserve 27 766 766
reserve for own shares 27 322 –
share scheme reserve 27 26 9
foreign exchange reserve 27 36 39
retained earnings 27 6475 5396
equity attributable to equity holders of 
the parent company 9810 8848
minority interest 171 198
total equity 9981 9046
the financial statements were approved and authorised by the board on 20 may 2008
peter l hay
director
the notes shown on pages 20 to 47 form part of these financial statements
77354 accounts  19508  2005  page 17 consolidated cash flow statement
for the year ended 31 december 2007
n or m a n h ay p l c
18
2007 2006
cash flows from operating activities note £000 £000
operating profit before nonrecurring items 2395 2068
impairment of intangibles 15 8
depreciation 383 476
lossprofit on sale of assets 38 78
share option charge 17 9
increasedecrease in inventories 515 195
increasedecrease in receivables 864 543
increasedecrease in payables 167 739
increase in provisions 48 21
finance income 190 193
finance costs 243 214
tax paid 414 333
net cash generated from operating activities 1217 2149
cash flows from investing activities
acquisition of subsidiaries net of cash acquired 28 383 1757
purchase of property plant and equipment 847 269
expenditure on intangibles 15 –
proceeds from sale of business – 17
net borrowing disposed of with subsidiary undertaking – 134
proceeds from disposal of property plant and equipment 18 836
net cash used in investing activities 1227 1039
cash flows from financing activities
dividends paid to shareholders 554 407
dividends paid to minority shareholders – 38
net proceeds from issue of ordinary share capital 112 – 
purchase of long term incentive plan shares 322 –
finance lease repayment 31 62
new loans raised 581 – 
repayment of loans 546 50
net cash used in financing activities 760 557
net decreaseincrease in cash and cash equivalents 770 553
cash and cash equivalents at the beginning of the year 1264 711
effects of foreign exchange rate changes 47 –
cash and cash equivalents at the end of the year 17 541 1264
the notes shown on pages 20 to 47 form part of these financial statements
77354 accounts  19508  2005  page 18 a nnual r ep ort 20 07
consolidated statement of 
recognised income and expense
for the year ended 31 december 2007
19
2007 2006
£000 £000
exchange differences on translation of foreign operations 75 38
deferred tax movements in respect of share option scheme 4 6
net income recognised directly in equity 71 32
profit for the year 1670 1601
total recognised income and expense for the year 1741 1569
attributable to
equity shareholders 1708 1543
minority interests 33 26
1741 1569
77354 accounts  19508  2005  page 19 notes to the group financial statements
n or m a n h ay p l c
20
1  accounting policies
accounting convention
the group previously reported its financial statements under uk generally accepted accounting practice gaap from 
1 january 2007 the group is required to prepare its financial statements in accordance with eu endorsed international
financial reporting standards ifrs international accounting standards ias and interpretations ifric and sic “endorsed
ifrs” and  with those parts of the companies act 198 to 5 companies preparing financial statements in accordance with ifrs
the comparative data for year ended 31 december 2006 has been restated and reconciliations are included in note 33 to
explain the changes 
the parent company has not adopted international financial reporting standards its results are reported under uk gaap 
on pages 48 to 56
first time adoption of ifrs
the group’s transition date to “endorsed ifrs” was 1 january 2006 which is the beginning of the comparative period for the
year ended 31 december 2007 the group has applied ifrs 1 for the first time adoption of endorsed ifrs and has elected to
use the following exemptions
● ifrs 3 has not been applied retrospectively to business combinations that occurred before 1 january 2006
● cumulative translation differences for foreign operations have been deemed to be nil at 1 january 2006 consequently 
any gain or loss arising on a subsequent disposal will exclude translation differences that arose before 1 january 2006
● ifrs 2 has not been applied to options in issue which were granted prior to 7 november 2002
standards interpretations and amendments to published standards not yet effective
certain new standards amendments and interpretations to existing standards have been published that are mandatory for
the group’s accounting periods beginning on or after 1 january 2008 or later periods and which the group has decided not to
adopt early these are
● ifrs 8 operating segments effective for accounting periods beginning on or after 1 january 2009 this standard sets out
requirements for the disclosure of information about an entity’s operating segments and also about the entity’s products
and services the geographical areas in which it operates and its major customers it replaces ias 14 segmental reporting
the group expects to apply this standard in the period beginning on 1 january 2009 as this is a disclosure standard it will
not have any impact on the results or net assets of the group
● ifrs 3 business combinations and complementary amendments to ias 27 consolidated and separate financial statements
both effective for accounting periods on or after 1 july 2009 this revised standard and amendments are still to be endorsed
by the eu the revised ifrs 3 and amendments to ias 27 arise from a joint project with the financial accounting standards
board fasb the us standards setter and result in ifrs being largely converged with the related recently issued us
requirements there are very significant changes to the requirements of ifrs and options available if accounting for
business combinations management is currently assessing the impact of revised ifrs 3 and amendments to ias 27 on 
the financial statements
● ias 1 presentation of financial statements – a revised approach effective for accounting periods beginning on or after 
1 january 2009 as this is a disclosure standard it will not have any impact on the results or net assets of the group 
it will impact the presentation and format of the primary statements and notes and these disclosures will be revised
accordingly in the 2009 financial statements
77354 accounts  19508  2005  page 20 a nnual r ep ort 20 07
21
1  accounting policies continued
the following are also standards interpretations and amendments to published statements not yet effective but which are
not considered to be relevant to the group
● ias 23 borrowing costs revised effective for accounting periods beginning on or after 1 january 2009
● ifric 11 ifrs 2 group and treasury share transactions effective for periods beginning on or after 1 march 2007
● ifric 12 service concession arrangements effective for periods beginning on or after 1 january 2008
● ifric 13 customer loyalty programmes effective for periods beginning on or after 1 july 2008
● ifric 14 ias 19 the limit on a defined benefit asset minimum funding requirements and their interaction effective for
periods beginning on or after 1 january 2008
● amendments to ias 32 financial instruments presentation and ias 1 presentation of financial statements – puttable
financial instruments and obligations arising on liquidation effective for accounting periods beginning on or after
1 january 2009
the following principal accounting policies have been applied
basis of consolidation
subsidiaries are entities controlled by the company control exists where the company has the power directly or indirectly to
govern the financial and operating policies of an entity so as to obtain benefits from its activities the results of subsidiaries
are included in the consolidated financial statements from the date that control commences until the date that control ceases
acquisitions are accounted for by the purchase method the cost of an acquisition is measured as the fair value at the date of
exchange of the consideration provided plus costs directly attributable to the acquisition identifiable assets and liabilities of
the acquired business that meet the conditions for recognition under ifrs 3 are recognised at their fair value at the date 
of acquisition to the extent that the cost of an acquisition exceeds the fair value of the net assets acquired the difference 
is recorded as goodwill 
transactions between and balances with group companies are eliminated together with unrealised gains on intercompany
transactions accounting policies of acquired companies are changed where necessary to be consistent with those of the group
revenue
revenue is recognised when performance has occurred and a right to consideration has been obtained this is normally
when goods have been delivered or services provided to the customer title and risk of loss have been transferred and
collection of related receivables is probable revenue excludes value added and other sales taxes trade discounts and
intragroup sales
longterm contracts are assessed on a contractbycontract basis where the outcome of a long term contract can be estimated
reliably contract revenue and contract costs are recognised by reference to the stage of completion of the contract activity the
percentage of completion method at the balance sheet date and profit that is estimated to fairly reflect the profit arising up
to that date when it is probable that total contract costs will exceed total contract revenue the expected loss is recognised 
as an expense immediately
77354 accounts  19508  2005  page 21 notes to the group financial statements continued
n or m a n h ay p l c
22
1  accounting policies continued
research and development
expenditure on applied research and development is charged to the income statement in the year in which it is incurred
unless such costs should be capitalised under the requirements of the applicable standard no development projects met the
criteria for capitalisation
dividends
the final dividend is only recognised at the point it is declared and approved by the shareholders at the annual general
meeting interim dividends are recognised on payment
intangible assets
goodwill
goodwill arising on an acquisition of an undertaking is the difference between the fair value of the consideration paid 
and the fair value of the assets and liabilities acquired goodwill which is recognised as an asset is reviewed for impairment
at least annually any impairment is recognised immediately in the 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 combination cash generating units to which goodwill has been allocated are tested for impairment annually or
more frequently where there is an indication that the unit may be impaired if the recoverable amount of the cash generating unit
is less than the carrying amount of the unit the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit prorata on the basis of the carrying amount of each asset in the unit 
on disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal
goodwill arising on acquisitions before the date of transition to ifrs 1 january 2006 has been retained at the previous uk
gaap amounts subject to being tested for impairment as noted goodwill written off to reserves under uk gaap prior 
to 1998 has not been reinstated and is not included in determining any subsequent profit or loss on disposal
other intangible assets
separable intangible assets such as trademarks licences and brands are recognised separately from goodwill on all
acquisitions after the date of transition brands identified have been assessed as having an indefinite useful life when coupled
with continuing marketing spend to maintain the brand
under ifrs all intangible assets with indefinite lives are reviewed for impairment on an annual basis
property plant and equipment
property plant and equipment is held at cost less accumulated depreciation although some assets are carried at deemed cost
being the carrying value of freehold land and buildings as at 31 december 1999 all additions since this date are stated at cost
depreciation is provided on property plant and equipment other than freehold land and plant in the course of construction 
at rates calculated to write off the cost or deemed cost less estimated residual value of each asset evenly over its expected
useful life as follows
freehold buildings 45 years
long leasehold property over term of lease
plant vehicles and fixtures 3 to 10 years
computer equipment 2 to 5 years
impairment tests on the carrying value of property plant and equipment are undertaken at the end of each year if events 
or changes in circumstances indicate that the carrying value may not be recoverable
77354 accounts  19508  2005  page 22 a nnual r ep ort 20 07
23
1  accounting policies continued
investments available for sale
investments available for sale are recorded at fair value unrealised gains and losses arising on the remeasurement are recorded
in equity on disposal or impairment of the investments cumulative gains and losses previously recognised in equity are
transferred to the income statement
noncurrent assets held for sale
noncurrent assets classified as held for sale are measured at the lower of the carrying value and the fair value less costs to sell
noncurrent assets are classified as held for sale if their carrying value will be recovered through the sale transaction rather
than through continuing use this condition is regarded as met only when the sale is highly probable and the asset is available
for immediate sale in its present condition and management is committed to the sale which is expected to qualify for
recognition as a completed sale within one year from the date of recognition
inventories
inventories are valued at the lower of cost on a firstin firstout basis and net realisable value costs incurred in bringing each
product to its present location and condition comprise
● raw materials – cost of purchase on a firstin firstout basis
● work in progress and finished goods – cost of raw materials and labour plus attributable overheads based on the normal
level of activity
● net realisable value is based on estimated selling price less further costs to completion and disposal
● provision is made for obsolete and slow moving items
trade receivables 
trade receivables are stated initially at fair value then measured at amortised cost less allowances for provisions provisions for
impairment are recognised when there is objective evidence that the group will not be able to collect all amounts due according to
the original terms of the receivable any impairment recorded is the difference between the carrying value of the receivables and
the estimated future cash flows discounted where appropriate any impairment required is recorded in the income statement
leased assets
assets held under leasing agreements and hire purchase contracts where the group has substantially all the risks and rewards
of ownership “finance leases” are treated as if they had been purchased outright the amount capitalised is the present
value of the minimum lease payments payable during the lease term the corresponding leasing commitments are shown as
borrowings depreciation over the shorter of the assets’ useful life and the lease term on the relevant assets is charged to the
income statement
lease payments are analysed between capital and interest components so that the interest element of the payment is 
charged to the income statement over the period of the lease and represents a constant proportion of the balance of capital
repayments outstanding the capital part reduces the amount payable to the lessor
all other leases are treated as operating leases their annual rentals are charged to the income statement on a straightline
basis over the term of the lease
borrowings
borrowings are recognised initially at their fair value net of the associated finance costs and thereafter at amortised cost 
the associated finance costs are amortised to the income statement over the life of the borrowings borrowings are classified
as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months
after the balance sheet date 
77354 accounts  19508  2005  page 23 notes to the group financial statements continued
n or m a n h ay p l c
24
1  accounting policies continued
provisions
provision is made for onerous contracts and for product warranty claims when the group has a present obligation as a result
of past events and it is more likely than not that an outflow of economic benefits will be required to settle the obligation 
and the amount can be reliably estimated provisions are discounted to present value where the impact is significant using 
a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation
cash and cash equivalents
cash and cash equivalents includes cash in hand deposits at call with banks and other short term highly liquid investments
that are readily convertible to a known amount of cash and are considered to be subject to insignificant risk of changes in
value bank overdrafts are shown within borrowings as current liabilities but included within cash and cash equivalents 
in the cash flow statement
foreign currency translation
functional and presentation currency
the consolidated financial statements are presented in sterling which is the company’s functional and presentation currency
items included in the financial statements of each of the group’s entities are measured using the currency of the primary
economic environment in which the entity operates the functional currency
transactions and balances
transactions in foreign currencies are translated into the functional currency of the transacting entity at the foreign exchange
rate ruling at the date of the transaction foreign exchange difference arising are recognised in the income statement foreign
currency monetary assets and liabilities are translated at the exchange rates ruling at the balance sheet date
group companies
the results of foreign operations are translated into sterling at the average rate of exchange in the accounting period and the
assets and liabilities are translated into sterling at the closing rate at the date of the balance sheet on consolidation the
effect of variances in exchange rates between the beginning and end of the financial year on the opening net investment in
foreign undertakings are taken to the foreign exchange reserve as are any exchange differences arising through the translation
of results using the average exchange rate
current and deferred taxation
the tax expense represents the sum of the tax currently payable on the profit for the year and the deferred tax provision 
for taxation is made using tax rates that have been enacted or substantively enacted at the balance sheet date 
deferred tax is provided in full using the balance sheet liability method in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements except for
differences arising on
● the initial recognition of goodwill
● the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction affects neither accounting nor taxable profit and
● investments in subsidiaries and jointly controlled entities where the group is able to control the timing of the reversal of
the difference and it is probable that the difference will not reverse in the foreseeable future
deferred taxation is calculated using tax rates that are expected to apply when the related deferred taxation asset is realised
or the related deferred taxation liability is settled
the carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits are available to allow all or part of the asset to be recovered
77354 accounts  19508  2005  page 24 a nnual r ep ort 20 07
25
1  accounting policies continued
employee benefit costs
share based payments
where share options are awarded to employees the fair value of the options at the date of grant is charged to the income
statement over the vesting period nonmarket vesting conditions are taken into account by adjusting the number 
of equity instruments expected to vest at each balance sheet date so that ultimately the cumulative amount recognised 
over the vesting period is based on the number of options that eventually vest market vesting conditions are factored into 
the fair value of the options granted as long as all other vesting conditions are satisfied a charge is made irrespective of
whether the market vesting conditions are satisfied 
pensions
contributions to the group’s defined contribution scheme and to statemanaged retirement benefit schemes are charged 
to the income statement in the year in which they become payable 
critical accounting estimates and judgments
in applying the group’s accounting policies set out above management is required to make certain estimates and judgments
concerning the future these judgments are regularly reviewed and updated as necessary the estimates and judgments that
have the most significant effect on the amounts included in these consolidated financial statements are as follows
intangible assets and impairment
the group is required to test whether goodwill and brands have suffered any impairment the recoverable amounts of cash
generating units connected to the recorded goodwill and brands have been determined based on valueinuse estimations 
revenue recognition – long term contracts
in applying the group’s accounting policy set out above if the outcome of a long term contract can be estimated reliably
contract revenue is recognised by reference to the stage of completion of the contract activity these are regularly reviewed
and updated the actual result could vary from the value used in the income statement however as these are reviewed on a
monthly basis any difference is not expected to be significant
deferred consideration 
included within assets is an amount of £135000 2006 £246000 due in respect of deferred consideration following the
disposal of the subcontract impregnation business in 2005 the deferred consideration is calculated based on a percentage
of future revenues of the business which was disposed of and therefore cannot be estimated with certainty the amount
recognised in the financial statements is the discounted value of estimated revenues based on a linear projection of
current revenues
2  segmental analysis
by primary segment — business group
for management purposes the group is organised into four main operating divisions these divisions are the basis on which
the group reports its primary segment information the principal activities are as follows
surface coating application of a range of surface coatings to customers’ products
automotive sealants sealants for use in the engineering industry to counter microporosity
construction sealants chemicals for use in the construction industry to prevent the ingress of water and to improve
structure integrity
plant manufacture manufacture of a range of chemical processing plant and equipment
77354 accounts  19508  2005  page 25 notes to the group financial statements continued
n or m a n h ay p l c
26
2  segmental analysis continued
segment information about these businesses is presented below
year ended 31 december 2007
automotive construction surface plant eliminations consolidated
sealants sealants coatings manufacture
revenue
external sales 5008 4255 9342 5354 – 23959
intersegment sales 22 1 – 362 385 –
total revenue 5030 4256 9342 5716 385 23959
segment result 1552 43 1701 210 – 3506
unallocated corporate expenses 1111
operating profit 2395
finance income 190
finance costs 243
profit before tax 2342
tax 672
profit after tax 1670
other information
automotive construction surface plant corporate consolidated
sealants sealants coating manufacture assets
capital additions including
intangibles and acquisitions 19 252 1044 62 46 1423
depreciation 59 51 202 32 39 383
impairment losses recognised
in income – – 15 – – 15
balance sheet
segment assets 3827 4293 5397 2744 548 16809
segment liabilities 841 703 938 1385 2961 6828
segment net assetsliabilities 2986 3590 4459 1359 2413 9981
segment assets include tangible assets intangible assets investments inventory receivables other than tax and intercompany
receivables and cash net of operating overdrafts in each segment segment liabilities for operating segments include trade and
other payables and provisions corporate liabilities also include tax payable and other current and noncurrent liabilities
77354 accounts  19508  2005  page 26 a nnual r ep ort 20 07
27
2  segmental analysis continued
year ended 31 december 2006
automotive construction surface plant eliminations consolidated
sealants sealants coating manufacture
revenue
external sales 5304 – 8705 6241 – 20250
intersegment sales 28 – 9 395 432 – 
total revenue 5332 – 8714 6636 432 20250 
segment result 1589 – 1156 127 – 2872
unallocated corporate expenses 804
operating profit before nonrecurring items 2068
other gains and losses 127
finance income 193
finance costs 214
profit before tax 2174
tax 573
profit after tax 1601
other information
automotive construction surface plant corporate consolidated
sealants sealants coating manufacture assets
capital additions including
intangibles and acquisitions 36 1389 124 68 41 1658
depreciation 59 – 255 121 41 476
impairment losses recognised
in income – – 8 – – 8
balance sheet
segment assets 2875 3328 4934 2084 1766 14987
segment liabilities 756 352 1124 1196 2513 5941
segment net assetsliabilities 2119 2976 3810 888 747 9046
segment assets include tangible assets intangible assets investments inventory receivables other than tax and intercompany
receivables and cash net of operating overdrafts in each segment segment liabilities for operating segments include trade and
other payables and provisions corporate liabilities also include tax payable and other current and noncurrent liabilities
77354 accounts  19508  2005  page 27 notes to the group financial statements continued
n or m a n h ay p l c
28
2  segmental analysis continued
by secondary segment – geographical
the analysis of revenue by location of customer is as follows 2007 2006
£000 £000
united kingdom 13875 13279
rest of europe 3912 3591
usa 1094 1501
asiapacific 4736 79
rest of the world 342 1800
23959 20250
the analysis of assets by location is as follows 2007 2006
£000 £000
united kingdom 12799 12337
usa 533 436
asiapacific 3477 2214
16809 14987
additions to property plant and equipment and intangible assets 2007 2006
£000 £000
united kingdom 974 1651
usa 4 2
asiapacific 445 5
1423 1658
3  operating profit 2007 2006
£000 £000
this is stated after charging
impairment of intangible assets 15 8
depreciation of tangible fixed assets 383 476
auditors’ remuneration – fees payable to the company’s auditors for the
audit of the company’s annual accounts 6 6
– fees payable to the company’s auditors and  its
associates for other services
the audit of the company’s subsidiaries pursuant
to legislation 65 41
taxation services 17 40
remuneration services 4 17
other 12 –
cost of inventories recognised as an expense 9478 6187
research and development 180 198
operating lease rentals – plant and machinery 106 113
– properties 60 148
share option expense 17 9
77354 accounts  19508  2005  page 28 a nnual r ep ort 20 07
29
4  profit on sale of assets
2007 2006
£000 £000
plasticraft ltd property – 417
5  loss on sale of business
2007 2006
£000 £000
profit on sale of impregnation business and assets – 100
loss on sale of bk engineering ltd – 390
– 290
6  finance income
2007 2006
£000 £000
interest on bank deposits 190 193
7  finance costs
2007 2006
£000 £000
interest on bank loans and overdrafts 239 200
hire purchase interest 4 14
243 214
8  employees
2007 2006
number number
the average number of employees including executive directors during the year comprised
office and management 140 103
manufacturing 152 162
292 265
£000 £000
staff costs including executive directors during the year amounted to
wages and salaries 6884 5952
social security costs 621 633
other pension costs note 29 387 315
share option expense 17 9
7909 6909
77354 accounts  19508  2005  page 29 notes to the group financial statements continued
n or m a n h ay p l c
30
9  taxation
2007 2006
£000 £000
uk corporation tax – charge for the year 679 509
– adjustment in respect of previous periods 34 12
current tax on foreign income for the year 45 2
690 523
deferred tax – transfer fromto deferred tax account 41 50
– adjustment in respect of previous periods 23 –
672 573
the tax assessed in the year is lower than the standard rate of corporation tax in the uk
the difference is explained below 2007 2006
£000 £000
tax on profit on ordinary activities at the standard rate of 
corporation tax in the uk of 30 2006 30 703 652
expenses not deductible for tax purposes 60 70
prior year adjustments in deferred tax 23 – 
utilisation of tax losses – 143
chargeable gains – 18
income not taxable for tax purposes 72 45
unrelieved tax losses – 13
marginal relief 2 4
effect of changes in tax rates 5 – 
effect of different tax rates of subsidiaries in other jurisdictions 1 – 
adjustment in respect of previous periods 34 12
total tax charge for the year 672 573
on 6 april 2008 the rate of corporation tax changed from 30 to 28 this will affect future years’ tax charges
10  dividends
2007 2006
£000 £000
final dividend paid of 20p 2006 15p per share 261 218
interim dividend paid of 18p 2006 13p per share 293 189
554 407
dividends declared after the balance sheet date but before approval of
financial statements of 26p 2006 20p per share 378 290
77354 accounts  19508  2005  page 30 a nnual r ep ort 20 07
31
11  earnings per ordinary share
2007 2006
£000 £000
profit on ordinary activities after tax 1637 1575
basic earnings per ordinary share number number
000s 000s
weighted average number of ordinary shares in issue 14306 14524
earnings per share 114p 108p
diluted earnings per share number number
000s 000s
weighted average number of ordinary shares in issue including relevant share options 14356 14733
earnings per share 114p 107p
12  intangible assets
brands goodwill total
cost or valuation £000 £000 £000
at 1 january 2006 – 887 887
additions 500 808 1308
disposals – 152 152
at 1 january 2007 500 1543 2043
additions – 79 15
acquisition of subsidiary – 337 401
foreign exchange differences – 31 31
at 31 december 2007 500 1990 2490
amortisation
at 1 january 2006 – – –
impairment provision – 8 8
at 1 january 2007 – 8 8
impairment provision – 15 15
foreign exchange differences – 30 30
at 31 december 2007 – 53 53
net book value
at 31 december 2007 500 1937 2437
at 1 january 2007 500 1535 2035
at 1 january 2006 – 887 887
77354 accounts  19508  2005  page 31 notes to the group financial statements continued
n or m a n h ay p l c
32
12  intangible assets continued
impairment of goodwill and brands
the recoverable amount of each cash generating unit cgu connected to the brand’s value has been determined from 
valueinuse calculations based on cashflow projections covering a ten year period to 31 december 2017
operating margins have been based on past experience and future expectations in the light of anticipated economic and 
market conditions discount rates are based on the group’s current conservative assessment of specific risks related to 
the cgu
mx applied
tam systems precision hitech
international international coatings coatings
discount rate 20 20 20 20
£000 £000 £000 £000
goodwill 838 475 315 309
brands 500 – – –
excess of recoverable amount above carrying values of cgus 836 1230 587 406
13  property plant and equipment
freehold long leasehold plant 
land and land and vehicles and
buildings buildings fixtures computers total
cost £000 £000 £000 £000 £000
at 1 january 2006 3570 552 5928 475 10525
additions 41 – 161 67 269
acquisition of subsidiary – – 80 1 81
exchange differences – – 9 9 – 
disposals 275 4 1707 32 2018
reclassified as held for sale 271 – – – 271
disposal of subsidiary 1072 90 1162
at 1 january 2007 3065 548 3399 412 7424
additions – 27 822 54 903
acquisition of subsidiary – 3 101 – 104
exchange differences – 1 12 – 11
reclassified – – 14 14 – 
disposals – – 283 126 409
at 31 december 2007 3065 577 4037 354 8033
77354 accounts  19508  2005  page 32 a nnual r ep ort 20 07
33
13  property plant and equipment continued
freehold long leasehold plant 
land and land and vehicles and
buildings buildings fixtures computers total
depreciation £000 £000 £000 £000 £000
at 1 january 2006 490 63 4310 390 5253
provided during the year 40 15 380 41 476
exchange differences – – 9 9 – 
disposals 53 – 1570 17 1640
disposal of subsidiary – – 671 88 759
at 1 january 2007 477 78 2458 317 3330
provided during the year 30 18 285 50 383
acquisition of subsidiary – 1 38 – 39 
exchange differences – – 1 – 1
reclassified – – 7 7 –
disposals – – 229 124 353
at 31 december 2007 507 97 2546 250 3400
net book value
at 31 december 2007 2558 480 1491 104 4633
at 1 january 2007 2588 470 941 95 4094
at 1 january 2006 3080 489 1618 85 5272
the net book value of plant vehicles and fixtures includes £62000 2006 £7000 in respect of assets held under finance
leases and hire purchase contracts
depreciation charged on these assets amounted to £10000 2006 £24000 
14  investments
£000
other investments 26
at 1 january 2007 and at 31 december 2007
there is no material change in the fair value of the group’s investments
15  inventories
2007 2006
£000 £000
raw materials and consumables 861 358
work in progress – 21
long term contract balances 140 39
finished goods 794 763
1795 1181
long term contract balances comprise
net costs less foreseeable losses 140 39
payments on account 64 –
76 39
77354 accounts  19508  2005  page 33 notes to the group financial statements continued
n or m a n h ay p l c
34
16  trade and other receivables
2007 2006
£000 £000
amounts receivable for sale of goods 5580 3576
allowance for doubtful debts 148 188
trade receivables 5432 3388
amounts due from contract customers 826 1358 
other receivables 110 279
prepayments and accrued income 406 693
6774 5718
the carrying values of the group’s trade and other receivables are denominated in the following currencies
2007 2006
£000 £000
sterling 4696 4708
euros 781 36
us dollars 134 150
hong kong dollars 161 109
singapore dollars 575 511
australian dollars 254 168
other currencies 173 36
6774 5718
at 31 december 2007 trade and contract receivables of £346000 2006 £222000 were past due but not impaired they relate 
to customers with no default history the ageing of these receivables is as follows
2007 2006
£000 £000
3 to 6 months 346 222
346 222
at 31 december 2007 trade receivables of £198000 2006 £179000 were past due and impaired
the receivables relate to various trading activities of the group the ageing of these receivables is as follows
2007 2006
£000 £000
up to 3 months 85 56
3 to 6 months 113 123
198 179
the group records impairment losses on its trade receivables separately from gross receivables the movements on this
allowance account during the year are as follows
2007 2006
£000 £000
opening balance 188 99
acquisition of subsidiary – 62
increases in provisions 73 63
amounts utilised 20 4
amounts released 97 32
foreign exchange differences arising 4 –
148 188
77354 accounts  19508  2005  page 34 a nnual r ep ort 20 07
35
17  cash and cash equivalents
2007 2006
£000 £000
cash 801 1464
within the cash flow statement the cash and cash equivalents line includes bank overdrafts of £260000 2006 £200000
the currency distribution of cash and cash equivalents at 31 december was as follows
2007 2006
£000 £000
sterling 148 1090
euros – 75
us dollars 332 150
singapore dollars 110 –
australian dollars 132 95
other currencies 79 54
801 1464
18  current other financial liabilities
2007 2006
£000 £000
bank overdraft secured 260 200
bank loans secured 200 200
finance lease and hire purchase secured 25 28
other loans 174 394
659 822
the bank overdraft and loans are secured over certain of the group’s assets and undertakings and are denominated in sterling
the finance leases and hire purchase agreement are secured on the assets to which they relate
the currency distribution of current financial liabilities at 31 december was as follows
2007 2006
£000 £000
sterling 460 205
hong kong dollars 2 244
singapore dollars 3 200
australian dollars 194 173
659 822
19  trade and other payables
2007 2006
£000 £000
trade payables 1971 1613
amounts due to contract customers 64 – 
other taxation and social security costs 456 624
other payables 258 57
accruals and deferred income 1121 1058
3870 3352
77354 accounts  19508  2005  page 35 notes to the group financial statements continued
n or m a n h ay p l c
36
20  provisions 2007
total
£000
at 1 january 2007 190
release of provision in the year 25
utilisation of provision 23
at 31 december 2007 142
all of the above amount is included within current liabilities
the warranty provisions relate to the process plant manufacturing operation the standard terms of the warranty are one 
to two years
21  current tax liabilities 2007 2006
£000 £000
uk corporation tax 538 328
foreign tax 144 77
682 405
22  noncurrent other financial liabilities 2007 2006
£000 £000
bank loans secured 750 950
other loans 540 76
finance leases and hire purchase secured 41 – 
1331 1026
the currency distribution of noncurrent financial liabilities at 31 december was as follows
2007 2006
£000 £000
sterling 773 950
us dollars 75 76
hong kong dollars 446 –
australian dollars 34 –
other currencies 3 –
1331 1026
maturity of debt loans  overdrafts finance leases
2007 2006 2007 2006
£000 £000 £000 £000
in one year or less 645 812 31 29
in more than one year but not more than two years 807 218 25 – 
in more than two years but not more than five years 666 908 17 – 
2118 1938 73 29
the bank loans are repayable by equal monthly instalments and interest is payable at 125 above bank base rate the
repayment figures include capital and interest
the above analysis assumes no movement in base rate
77354 accounts  19508  2005  page 36 a nnual r ep ort 20 07
37
23  noncurrent tax liabilities
the amount of deferred taxation provided which relates to accumulated depreciation being lower than accumulated capital
allowances and other temporary differences is as follows
accelerated
capital temporary
allowances differences
2007 2007 2007
£000 £000 £000
at 1 january 2007 178 32 146
credit to income statement 14 4 18
acquired with subsidiary 15 – 15
other movements 1 – 1
at 31 december 2007 180 36 144
deferred tax assets have been recognised in respect of all such tax losses and other temporary differences giving rise to
deferred tax assets where the directors believe it is probable that the assets will be recovered
accelerated
capital temporary
allowances differences
2006 2006 2006
£000 £000 £000
at 1 january 2006 193 24 169
charge to income statement 50 – 50
disposal of subsidiary 65 – 65
charged to equity – 8 8
at 31 december 2006 178 32 146
24  obligations under finance leases
present value of
amounts payable under finance leases minimum lease payments minimum lease payments
2007 2006 2007 2006
£000 £000 £000 £000
within one year 31 29 30 28
in the second to the fifth year inclusive 42 – 36 – 
73 29 66 28
less future finance charges 7 1 – – 
present value of lease obligations 66 28 66 28
less amount due for settlement within 12 months 
shown under current liabilities 25 28
amount due for settlement after 12 months 41 – 
77354 accounts  19508  2005  page 37 notes to the group financial statements continued
n or m a n h ay p l c
38
25  total commitments under operating leases
land and buildings plant
2007 2006 2007 2006
£000 £000 £000 £000
payable in one year 74 103 90 85
payable in two to five years 386 179 84 131
payable after five years 1718 1742 – –
2178 2024 174 216
26  share capital
2007 2006
number value number value
000 £000 000 £000
authorised – ordinary shares of 10p each 18000 1800 18000 1800
allotted and fully paid – ordinary shares of 10p each 14812 1481 14524 1452
the group issued 287750 shares following the exercise of share options resulting in a total number of shares in issue at
31 december 2007 of 14811750 the consideration for these shares amounted to £111656
the group considers its capital to comprise its ordinary share capital share premium and accumulated retained earnings in
managing its capital the group’s primary objective is to ensure its continued ability to provide a consistent return for its equity
shareholders through a combination of capital growth and distributions 
in order to achieve this objective the group monitors its gearing to balance risks and returns at an acceptable level and also 
to maintain a sufficient funding base to enable the group to meet its working capital and strategic investment needs in
making decisions to adjust its capital structure to achieve these aims either through altering its dividend policy new shares
issues or the reduction of debt the group considers not only its shortterm position but also its longterm operational and
strategic objectives
at 31 december 2007 266282 shares were held by the employee norman hay plc  benefit trust 2006 nil
at 31 december 2007 the following options were outstanding including those relating to directors as detailed on page 12
of this annual report
a  on 289850 ordinary shares these approved options are exercisable between 5 july 2009 and 4 july 2016 at 69p per share
b  on 1040150 ordinary shares these unapproved options are exercisable between 5 july 2006 and 4 july 2016 at 69p per
share upon the share price achieving 250p or a change in control
77354 accounts  19508  2005  page 38 a nnual r ep ort 20 07
39
27  analysis of changes in equity
other non total
share capital distribu reserve share foreign share
share premium redemption table for own scheme exchange retained holders minority total
capital account reserve reserve shares reserve reserve earnings equity interest equity
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
at 1 january 2006 1452 1170 94 766 – – –4221 7703 41 7744
share scheme charge – – – – – 9 – – 9 – 9
acquisition of tam
international group
holdings ltd – – – – – – – – – 221 221
retained profit for the year– – – – – – –1582 1582 26 1556
dividends paid in year – – – – – – – 407 407 38 445
exchange translation 
differences on 
consolidation – – – – – – 39 – 39 39
at 1 january 2007 1452 1170 94 766 – 9 39 5396 8848 198 9046
share scheme charge – – – – – 17 – – 17 – 17
issue of new shares 29 84 – – – – – – 113 – 113
own shares acquired – – – – 322 – – – 322 – 322
minority interest in 
subsidiary acquired – – – – – – – – – 60 60
retained profit for the year– – – – – – –1637 1637 33 1670
dividends paid in year – – – – – – – 554 554 – 554
deferred tax in respect of 
share options – – – – – – – 4 4 – 4
exchange translation 
differences on 
consolidation – – – – – – 75 – 75 – 75
at 31 december 2007 1481 1254 94 766 322 26 36 6475 9810 171 9981
notes
1 the share premium account represents the difference between the amount paid by shareholders subscribing for new
shares and the nominal value of those shares
2 the capital redemption reserve relates to purchases by the company of its own shares
3 other nondistributable reserve arises from elimination of share capital of acquired companies in excess of nominal 
value of shares issued
4 reserve for own shares is the sum paid for shares held by the company’s long term incentive plan
5 the foreign exchange reserve arises from fluctuations in the value of net assets denominated in currencies other 
than sterling
6 retained earnings is the accumulated distributable profits of the norman hay plc group of companies
7 minority interests represents the interests of the minority shareholders in subsidiaries of the group
77354 accounts  19508  2005  page 39 notes to the group financial statements continued
n or m a n h ay p l c
40
28  acquisitions
in november 2007 surface technology plc a trading subsidiary of norman hay plc acquired the entire share capital of hitech
coatings pty ltd for £380000
this acquisition has provided the group with the opportunity to expand the armourcote subcontract surface coatings service
into the asiapacific region in order to support oil and gas customer operations
it has not been possible to state the revenue and profit before tax of the company for the year ended 31 december 2007 as
prior to the acquisition the company’s financial year end was 30 june 2007
at the time of acquisition the company held the following net assets
book and
fair value
non current assets £000
intangible assets 85
property plant and equipment 64
149
current assets 200
current liabilities 193
net assets acquired 156
cash consideration including costs on acquisition of £25000 405
net assets acquired 156
goodwill arising on acquisition 249
costs on acquisition include £25000 paid to auditors and legal advisors
the net cash sum expended on the acquisition was as follows
£000
cash paid as consideration 380
cash paid as acquisition expenses 25
less cash acquired on acquisition 123
282
in addition to the above a further £101000 was paid to purchase the minority shareholding in apc limited
on 22 december 2006 norman hay plc acquired a 75 interest in tam international group holdings ltd and its subsidiaries
tam international uk ltd tam international hong kong ltd tam international singapore pte tam international australia pty
for a consideration of £1816000 the assets and liabilities are included in the consolidated balance sheet using the acquisition
method of accounting
the addition of tam international has strengthened the group’s diversification by entering the construction and civil
engineering markets and extended our geographical presence through enhanced sales channels leading  to the consideration
paid being in excess of the fair value of the assets acquired
77354 accounts  19508  2005  page 40 a nnual r ep ort 20 07
41
28  acquisitions continued
it has not been possible to state the revenue and profit before tax of the company for the year ended 31 december 2006 as 
the tam group of companies did not have coterminus year ends
tam tam tam tam
international international international international
uk hong kong singapore australia book 
ltd ltd pte pty fair value
£000 £000 £000 £000 £000
non current assets
property plant and equipment 6 12 1 62 81
current assets 378 183 679 417 1657
current liabilities 288 109 335 163 677
minority interest 169
net assets acquired 508
cash consideration including expenses of £116000 1816
net assets acquired 508
intangible assets arising on acquisition 1308
the directors allocated £500000 of the intangible assets arising on acquisition to brands with the balance being regarded 
as goodwill
costs on acquisition include £32000 paid to auditors in respect of corporate finance advice
the net cash sum expended on the acquisition was as follows
£000
cash paid as consideration 1700
cash paid as acquisition expenses 116
less cash acquired on acquisition 259
loan acquired 200
1757
29  pension costs
the group operates a number of defined contribution pension schemes the assets of these schemes are held separately from
those of the group in independently administered funds two directors are members of the scheme a pension charge of
£387000 2006 £315000 represents the contribution payable by the group to those schemes
30  related party transactions
remuneration of key management personnel 2007 2006
directors’ remuneration consists of £000 £000
aggregate emoluments 473 609
pension contributions 36 41
compensation for loss of office – 47
gain on exercise of share options 114 –
fees 51 –
674 697
the highest paid director had a salary of £251000 2006 £212000 including performance related pay benefits in kind and a
pension contribution of £25000 2006 £20000
the company contributed £36000 2006 £41000 towards the personal pension plans of two directors 2006 three
including the highest paid director
the share option expense in respect of key management personnel was £17000 2006 £9000
77354 accounts  19508  2005  page 41 notes to the group financial statements continued
n or m a n h ay p l c
42
31  sharebased payment
norman hay plc operates two equitysettled share based remuneration schemes for employees a long term incentive scheme
and an unapproved scheme for executive directors and senior management all uk employees are eligible to participate in 
the long term incentive scheme the only vesting condition is that the employee remains an employee of the group over the
savings period
under the unapproved scheme the shares are only exercisable at a share price of 250p or a change in control
2007 2007 2006 2006
weighted weighted
average average
exercise exercise
pence number pence number
outstanding at the beginning of the year 63 1617750 39 287750 
granted during the year – – 69 1330000 
exercised during the year 39 287750 – –
69 1330000 69 1617750
the exercise price of options outstanding at the end of the year was 69p 2006 375p 69p to 
there were no options exercisable at the year end
the following information is relevant in the determination of the fair values of options granted during 2006 under the share
based remuneration schemes operated by norman hay plc
2007 2006
equitysettled
option pricing model used blackscholes blackscholes
weighted average share price at grant date pence 68 68
exercise price pence 69 69
weighted average contractual life days 1095 1095
expected volatility 20 20
expected dividend growth rate 5 5
riskfree interest rate 5 5
equitysettled
option pricing model used monte carlo monte carlo
weighted average share price at grant date pence 68 68
exercise price pence 69 69
weighted average contractual life days 1095 1095
expected volatility 20 20
expected dividend growth rate 5 5
riskfree interest rate 5 5
the share based remuneration expense comprises 2007 2006
£000 £000
equitysettled schemes 17 9
the volatility assumption measured at the standard deviation of expected share price returns is based on a statistical analysis
of daily prices over the last 2 years
the group did not enter into any sharebased payment transactions with parties other than employees during the current or
previous period
77354 accounts  19508  2005  page 42 a nnual r ep ort 20 07
43
32  financial instruments – risk management
in common with all other businesses the group is exposed to risks that arise from its use of financial instruments this note
describes the group’s objectives policies and processes for managing those risks and the methods used to measure them
further quantitative information in respect of these risks is presented throughout these financial statements there have been
no substantive changes in the group’s exposure to financial instrument risks its objectives policies and processes for
managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note
principal financial instruments
the principal financial instruments used by the group from which financial instrument risk arises are as follows
● trade receivables
● cash at bank
● bank overdrafts
● investments in unquoted equity securities uk and overseas
● trade and other payables
● floatingrate bank loans
● other loans 
the directors consider that the carrying amount of trade receivables trade and other payables and loans approximate to their
fair values
the group is exposed through its operations to the following financial risks
● credit risk
● fair value or cash flow interest rate risk
● foreign exchange risk
● other market price risk
● liquidity risk
general      objectives     policies      and    processes
the board has overall responsibility for the determination of the group’s risk management objectives and policies and whilst
retaining ultimate responsibility for them it has delegated the authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the group’s finance function the board receives monthly reports
through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies
it sets the overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly affecting
the group’s competitiveness and flexibility further details regarding these policies are set out below
credit risk
credit risk is the risk of financial loss to the group if a customer or a counterparty to a financial instrument fails to meet its
contractual obligations the group is mainly exposed to credit risk from credit sales it is group policy implemented locally 
to assess the credit risk of new customers before entering into contracts such credit ratings are taken into account by local
business practices
the management of each operating business have established credit policies under which each new customer is analysed
individually for creditworthiness before the group’s standard payment and delivery terms and conditions are offered their
review includes external ratings when available and in some cases bank references purchase limits are established for each
customer which represent the maximum open amount without requiring approval from senior management or the group
chief executive if appropriate these limits are reviewed regularly and customers that fail to meet the group’s benchmark
creditworthiness may transact with the group on a prepayment basis
credit risk also arises from cash and cash equivalents and deposits with banks and financial instruments quantitative
disclosures of the credit risk exposure in relation to trade and other receivables are disclosed in note 16 
77354 accounts  19508  2005  page 43 notes to the group financial statements continued
n or m a n h ay p l c
44
32  financial instruments – risk management continued
fair value and cash flow interest rate risk 
the group is exposed to cash flow interest rate risk from longterm borrowings at variable rates local operations are not
permitted to borrow longterm from external sources without permission from the group during 2007 and 2006 the group’s
borrowings at variable rate were denominated in sterling hong kong dollars and australian dollars
foreign exchange risk 
foreign exchange risk arises because the group has operations located in various parts of the world whose functional currency
is not the same as the group functional currency although its global market penetration reduces the group’s operational risk
in that it has diversified into several markets the group’s net assets arising from such overseas operations are exposed to
currency risk resulting in gains or losses on retranslation into sterling foreign exchange risk also arises when individual group
entities enter into transactions denominated in a currency other than their functional currency
the group’s policy is where possible to allow group entities to settle liabilities denominated in their functional currency with
the cash generated from their own operations in that currency
market risk
market risk arises from the group’s use of interest bearing tradable and foreign currency financial instruments it is the risk
that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates interest
rate risk foreign exchange rates currency risk or other market factors other price risk
liquidity risk
liquidity risk arises from the group’s management of working capital and the finance charges and principal repayments on its
debt instruments it is the risk that the group will encounter difficulty in meeting its financial obligations as they fall due
at 31 december 2007 the group had unused facilities of £1249000 2006 £1500000 including the annual working capital
facility of £1500000 which was renewed on 2 january 2008
the group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due
to achieve this aim it reviews its forward cash requirement on a monthly basis for a minimum of three months ahead 
the board receives cash flow projections on a monthly basis as well as information regarding cash balances at the balance
sheet date these projections indicated that the group expected to have sufficient liquid resources to meet its obligations
under all reasonably expected circumstances the liquidity risk of each group entity is managed centrally by the group
treasury function each operation has a facility with group treasury the amount of the facility being based on budgets the
budgets are set locally and agreed by the board in advance enabling the group’s cash requirements to be anticipated where
facilities of group entities need to be increased approval must be sought from the group chief executive where the amount
of the facility is above a certain level agreement of the board is needed
77354 accounts  19508  2005  page 44 a nnual r ep ort 20 07
45
33  ifrs reconciliations
the reconciliations of equity as at 1 january 2006 date of transition to ifrs and at 31 december 2006 date of last
uk gaap financial statements and the reconciliation of profit for 2006 as required by ifrs 1 are shown below
reconciliation of equity at 1 january 2006 accounting tax
effect of effect of
transition transition
uk gaap to ifrs to ifrs ifrs
note £000 £000 £000 £000
assets
noncurrent assets
intangible assets 887 – – 887 
property plant and equipment 5272 – – 5272 
investments 26 – – 26 
total noncurrent assets 6185 – – 6185 
current assets
inventories 1057 – – 1057 
trade and other receivables 5693 – – 5693 
cash and cash equivalents 711 – – 711 
total current assets 7461 – – 7461 
total assets 13646 – – 13646 
liabilities
current liabilities
other financial liabilities 282 – – 282 
trade and other payables 1 4012 169 – 3843 
provisions 1 – 169 – 169 
current tax liabilities 239 – – 239 
total current liabilities 4533 – – 4533 
noncurrent liabilities
other financial liabilities 1200 – – 1200 
deferred tax 6  7 34 – 135 169 
total noncurrent liabilities 1234 – 135 1369 
total liabilities 5767 – 135 5902 
total assets less total liabilities 7879 – 135 7744 
equity
share capital 1452 – – 1452 
share premium account 1170 – – 1170 
revaluation reserve 4 545 545 – – 
capital redemption reserve 94 – – 94 
other nondistributable reserve 766 – – 766 
reserve for own shares – – – 
foreign exchange reserve – – – 
retained earnings 4 6  7 3811 545 135 4221 
equity attributable to equity holders 
of the parent company 7838 – 135 7703 
minority interests 41 41 
total equity 7879 – 135 7744 
77354 accounts  19508  2005  page 45 notes to the group financial statements continued
n or m a n h ay p l c
46
33  ifrs reconciliations continued
reconciliation of equity at 31 december 2006 accounting tax
effect of effect of
transition transition
uk gaap to ifrs to ifrs ifrs
note £000 £000 £000 £000
assets
noncurrent assets
intangible assets 2  3 1985 50 – 2035 
property plant and equipment 5 4365 271 – 4094 
investments 26 – 26 
other receivables 8 – 198 – 198 
total noncurrent assets 6376 23 – 6353 
current assets
inventories 1181 – – 1181 
trade and other receivables 8 5916 198 – 5718 
cash and cash equivalents 1464 – – 1464 
assets held for sale 5 – 271 – 271 
total current assets 8561 73 – 8634 
total assets 14937 50 – 14987 
liabilities
current liabilities
other financial liabilities 822 – – 822 
trade and other payables 1 3542 190 – 3352
provisions 1 – 190 – 190 
current tax liabilities 405 – – 405 
total current liabilities 4769 – – 4769 
noncurrent liabilities
other financial liabilities 1026 – – 1026 
deferred tax liabilities 6  7 19 – 127 146 
total noncurrent liabilities 1045 – 127 1172 
total liabilities 5814 – 127 5941 
total assets less total liabilities 9123 50 127 9046 
equity
share capital 1452 – – 1452 
share premium account 1170 – – 1170 
revaluation reserve 4 538 538 – – 
capital redemption reserve 94 – – 94 
other non distributable  reserve 766 – – 766 
reserve for own shares – – 
share scheme reserve 9 – – 9 
foreign exchange reserve 9 – 39 – 39
retained earnings 3 4  9 4896 627 127 5396 
equity attributable to equity holders 
of the parent company 8925 50 127 8848 
minority interests 198 198 
total equity 9123 50 127 9046 
77354 accounts  19508  2005  page 46 a nnual r ep ort 20 07
47
33  ifrs reconciliations continued
reconciliation of the income statement to 31 december 2006 accounting tax
effect of effect of
transition transition
uk gaap to ifrs to ifrs ifrs
note £000 £000 £000 £000
revenue 20250 – – 20250
cost of sales 12857 – – 12857
gross profit 7393 – – 7393
distribution expenses 370 – – 370
administrative expenses 3 5138 50 – 5088
other operating income 133 – – 133
operating profit 2018 50 – 2068
profit on sale of assets 417 – – 417
loss on disposal of business 290 – – 290
finance income 193 – – 193
finance costs 214 – – 214
profit on ordinary activities before taxation 2124 50 – 2174
taxation 7 575 – 2 573
profit on ordinary activities after taxation 1549 50 2 1601
attributable to
equity holders of the parent 1523 50 2 1575
minority interest 26 – – 26
profit for the financial year 1549 50 2 1601
basic earnings per share 105p 03p – 108p
diluted earnings per share 103p 04p – 107p
transition notes
1 provisions were included with ‘trade and other payables’ under uk gaap 
2 intangible assets at 31 december 2006 included a sum of £500000 relating to the value of the tam brands
3 amortisation of goodwill of £50000 per annum is not required under ifrs as this asset is subject to an annual impairment
review
4 under ifrs the revaluation reserve is now transferred to retained earnings
5 the bedfordshire site which was leased to the owners of bk engineering limited is treated as an ‘asset held for sale’ this
was subsequently sold in april 2008
6 the revaluation of property gives rise to a liability for deferred tax of £161000 which is recognised under ifrs
7 the expense relating to share based payments is not tax deductible at the time of grant and this gives rise to deferred tax
adjustments
8 the long term element of the debt due in relation to the sale of certain business and assets now is  shown as ‘other
receivables’ in ‘noncurrent assets’ see deferred consideration note 1
9 foreign exchange differences arising on translation of overseas subsidiaries are now shown separately
77354 accounts  19508  2005  page 47 parent company balance sheet
prepared in accordance with uk gaap
at 31 december 2007
n or m a n h ay p l c
48
2007 2006
note £000 £000 £000 £000
fixed assets
tangible assets 6 2844 2837
investments 7 13165 13165
16009 16002
current assets
debtors 8 1205 373
cash at bank and in hand 1 787
1206 1160
creditors due within one year 9 3032 3092
net current liabilities 1826 1932
total assets less current liabilities 14183 14070
creditors due after one year 10 8244 8182
provision for liabilities 11 50 125
8294 8307
net assets 5889 5763
capital and reserves
equity share capital 12 1481 1452
share premium account 13 1253 1170
revaluation reserve 13 531 538
capital redemption reserve 13 94 94
share scheme reserve 13 26 9
profit and loss account 13 2504 2500
shareholders’ funds 5889 5763
the financial statements were approved and authorised by the board on 20 may 2008
peter l hay
director
the notes shown on pages 49 to 56 form part of these financial statements
77354 accounts  20508  1741  page 48 a nnual r ep ort 20 07
notes to the financial statements of
the parent company
49
1  basis of presentation
the accounts are prepared under the historical cost convention as modified to include the revaluation of certain assets and 
in accordance with applicable uk gaap and the companies act 1985
2  summary of significant accounting policies
accounting convention
the financial statements have been prepared under the historical cost convention as modified by the revaluation of land 
and buildings and are in accordance with applicable accounting standards the following principal accounting policies have 
been applied
land and buildings
the company has continued to follow the transitional arrangements of frs 15 ‘tangible fixed assets’ to retain the carrying
value of freehold land and buildings as at 31 december 1999 as deemed cost all additions since this date are stated at cost
where an asset that was previously revalued is disposed of its book value is eliminated and an appropriate transfer made 
from the revaluation reserve to the profit and loss reserve
depreciation and amortisation
depreciation and amortisation are provided at rates calculated to writeoff the cost or valuation less estimated residual value 
of each asset except for freehold land evenly over its expected useful life as follows
freehold buildings 45 years
plant vehicles and fixtures 3 to 10 years
computer equipment 2 to 5 years
impairment tests on the carrying value of goodwill are undertaken at the end of the first full year following acquisition and in
other years if events or changes in circumstances indicate that the carrying value may not be recoverable
investments
investments held as fixed assets are stated at cost less any provision for impairment
foreign currency translation
where transactions are entered into by an operation in a currency other than the operation’s functional currency the
transactions are translated at the rates ruling when they occurred foreign currency monetary assets and liabilities are
translated at the rates ruling at the balance sheet date any differences are taken to the profit and loss account for the year
deferred taxation
deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by balance sheet
date except that
● deferred tax is not recognised on timing differences arising on revalued properties unless the group has entered into 
a binding sale agreement and is not proposing to take advantage of rollover relief and
● the recognition of deferred tax assets is limited to the extent that the group anticipates making sufficient taxable profits
in the future to absorb the reversal of the underlying timing differences
deferred tax balances arising from underlying timing differences in respect of tax allowances on industrial buildings are
reversed if and when all conditions for retaining those allowances have been met deferred tax balances are not discounted
77354 accounts  19508  2005  page 49 notes to the financial statements of
the parent company continued
n or m a n h ay p l c
50
2  summary of significant accounting policies continued
financial instruments
financial instruments are measured initially and subsequently at cost
the company’s exposure to credit risk is primarily attributable to its trade debtors and this risk is managed by running credit
checks on new customers and by monitoring payments against contractual agreements
our treasury function is carried out on a day to day basis depositing any surplus funds on the short term money market
the company has maintained a long term loan with the bank of scotland in order to provide readily accessible cash for future
investments and acquisitions
the board considers cash flow projections on a monthly basis
sharebased payment
where share options are awarded to employees the fair value of the options at the date of grant is charged to the profit
and loss account over the vesting period nonmarket vesting conditions are taken into account by adjusting the number 
of equity instruments expected to vest at each balance sheet date so that ultimately the cumulative amount recognised 
over the vesting period is based on the number of options that eventually vest market vesting conditions are factored 
into the fair value of the options granted as long as all other vesting conditions are satisfied a charge is made irrespective 
of whether the market vesting conditions are satisfied the cumulative expense is not adjusted for failure to achieve a market
vesting condition
3  employees
2007 2006
number number
the average number of employees including executive directors during the year comprised
office and management 6 6
£000 £000
staff costs including executive directors during the year amounted to
wages and salaries 582 699
social security costs 91 89
other pension costs 115 116
788 904
directors’ remuneration consists of
aggregate emoluments 473 609
pension contributions 36 41
compensation for loss of office – 47
gain on exercise of share options 114 – 
fees 51 – 
674 697
the highest paid director had a salary of £251000 2006 £212000 including performance related pay benefits in kind and a
pension contribution of £25000 2006 £20000
the company contributed £36000 2006 £41000 towards the personal pension plans of two directors 2006 three including
the highest paid director
77354 accounts  19508  2005  page 50 a nnual r ep ort 20 07
51
4  dividends
2007 2006
£000 £000
final dividend paid of 20p 2006 15p per share 261 218
interim dividend paid of 18p 2006 13p per share 293 189
554 407
dividends declared after the balance sheet date but before approval of
financial statements of 26p 2006 20p per share 378 290
5  company profit for the financial year
the company has taken advantage of the exemption allowed under section 230 of the companies act 1985 and has not
presented its own profit and loss account in these financial statements the group profit for the year includes a profit after tax
and before dividends of £551000 2006 £1576000 which is dealt with in the financial statements of the parent company
6  tangible assets
freehold plant 
land and vehicles
buildings and fixtures computers total
£000 £000 £000 £000
company
cost or valuation
at 1 january 2007 3293 43 35 3371
additions – 43 3 46
disposals – – 9 9
at 31 december 2007 3293 86 29 3408
depreciation
at 1 january 2007 478 31 25 534
provided during the year 23 10 6 39
disposals – – 9 9
at 31 december 2007 501 41 22 564
net book value
at 31 december 2007 2792 45 7 2844
at 31 december 2006 2815 12 10 2837
2007 2006
freehold land and buildings included at £000 £000
open market value on 16 november 1992 2850 2850
cost 443 443
3293 3293
the historical balances of freehold land and buildings are
cost 2698 2698
accumulated depreciation 463 440
2235 2258
77354 accounts  19508  2005  page 51 notes to the financial statements of
the parent company continued
n or m a n h ay p l c
52
7  investments
£000
other investments
cost 13165
at 1 january 2007 and at 31 december 2007
subsidiary undertakings
the principal undertakings in which the company’s interest at the year end is 20 or more are as follows
country of proportion of voting
incorporation rights and ordinary
subsidiary undertaking or registration share capital held nature of business
surface technology plc england 100 surface engineering impregnation and finishing
of metals supply of impregnation equipment
and chemicals and ndt equipment
ultraseal usa inc usa 100 distributors of impregnation equipment
and chemicals
lancy technology ltd england 67 eff ent treatment systems lu
ultraseal asia ltd  bvi 75 holding company for ultraseal shanghai ltd
ultraseal shanghai ltd  china 75 processing and distribution centre for 
impregnation chemicals and equipment
hitech coatings pty ltd  australia 100 surface engineering and finishing of metals
mx systems international ltd england 100 supply of impregnation equipment
and chemistry
applied precision coatings ltd  england 100 surface engineering and finishing of metals
tam international group holdings ltd england 75 holding company for the following tam 
trading companies
tam international uk ltd  england 75 manufacture and supply of sealants for the
construction industry
tam international hong kong ltd  china 75 supply of sealants for the construction industry
tam international singapore pte ltd singapore 75 supply of sealants for the construction industry
tam international australia pty ltd australia 75 manufacture and supply of sealants for the
construction industry
all the above subsidiaries are included in the consolidated financial statements
for all undertakings listed above the country of operation is the same as the country of incorporation or registration
 these undertakings are indirectly held by norman hay plc
77354 accounts  19508  2005  page 52 a nnual r ep ort 20 07
53
8  debtors
2007 2006
£000 £000
trade debtors 57 17
amount owed by subsidiaries 1124 316
other debtors 5 5
prepayments and accrued income 19 15
corporation tax – 20
1205 373
all amounts included in debtors are receivable within one year
9  creditors due within one year
2007 2006
£000 £000
bank overdraft and loans secured 2557 1763
trade creditors 68 162
amounts owed to subsidiaries 184 938
taxation and social security costs 80 103
other creditors 25 – 
accruals and deferred income 54 126
corporation tax 64 –
3032 3092
the bank overdrafts and loans are secured over certain of the group’s assets and undertakings
10  creditors due after one year
2007 2006
£000 £000
bank loans secured 750 950
amounts owed to subsidiaries 7494 7232
8244 8182
loans and overdrafts are repayable as follows
in one year or less 2557 1763
in more than one year but not more than two years 750 950
3307 2713
77354 accounts  19508  2005  page 53 notes to the financial statements of
the parent company continued
n or m a n h ay p l c
54
11  provision for liabilities
the amount of deferred taxation provided which relates to accumulated depreciation being lower than accumulated
capital allowances and other timing differences is as follows
2007
£000
at 1 january 2007 125
credit to profit and loss account 5
other movement 70
at 31 december 2007 50
12  share capital at 31 december 2007 at 31 december 2006
number value number value
000 £000 000 £000
authorised – ordinary shares of 10p each 18000 1800 18000 1800
allotted and fully paid – ordinary shares of 10p each 14812 1481 14524 1452
details of movement in share capital can be found in note 26 to the group financial statements
13  reserves share capital share profit total
share premium revaluation redemption scheme and loss
capital account reserve reserve reserve account
company £000 £000 £000 £000 £000 £000 £000
at 1 january 2007 1452 1170 538 94 9 2500 5763
issue of new shares 29 83 – – – – 112
share scheme charge – – – – 17 – 17
movement in reserves – – 7 – – 7 – 
retained profit for the year – – – – – 551 551
dividends paid in year – – – – – 554 554
at 31 december 2007 1481 1253 531 94 26 2504 5889
14  reconciliation of movements in shareholders’ funds
2007 2006
£000 £000
profit for the financial year 551 1576
dividends paid 554 407
3 1169
issue of new shares 112 – 
share scheme charge 17 9
net additions to shareholders’ funds 126 1178
opening shareholders’ funds 5763 4585
closing shareholders’ funds 5889 5763
77354 accounts  19508  2005  page 54 a nnual r ep ort 20 07
55
15  related party transactions
the company is exempt under the terms of financial reporting standard 8 ‘related party disclosures’ from disclosing related
party transactions with entities that are part of the group or investees of the group
16  contingent liabilities
the company had outstanding guarantees in respect of subsidiary undertakings amounting to £84000 at 31 december 2007 
2006 £109000
17  cash flow statement
the company is exempt from the requirement to publish a cash flow statement because a cash flow statement for the group
has been presented see page 18
18  sharebased payment
norman hay plc operates two equitysettled share based remuneration schemes for employees a long term incentive scheme
and an unapproved scheme for executive directors and senior management all uk employees are eligible to participate in 
the long term incentive scheme the only vesting condition is that the employee remains an employee of the group over the
savings period
under the unapproved scheme the shares are only exercisable at a share price of 250p or a change in control
2007 2007 2006 2006
weighted weighted
average average
exercise exercise
pence number pence number
outstanding at the beginning of the year 63 1617750 39 287750 
granted during the year – – 69 1330000 
exercised during the year 39 287750 – –
69 1330000 63 1617750
the exercise price of options outstanding at the end of the year was 69p 2006 375p 69p to 
there were no options exercisable at the year end
77354 accounts  19508  2005  page 55 n or m a n h ay p l c
56
18  sharebased payment continued
the following information is relevant in the determination of the fair values of options granted during 2006 under the share
based remuneration schemes operated by norman hay plc
2007 2006
equitysettled
option pricing model used blackscholes blackscholes
weighted average share price at grant date pence 68 68
exercise price pence 69 69
weighted average contractual life days 1095 1095
expected volatility 20 20
expected dividend growth rate 5 5
riskfree interest rate 5 5
equitysettled
option pricing model used monte carlo monte carlo
weighted average share price at grant date pence 68 68
exercise price pence 69 69
weighted average contractual life days 1095 1095
expected volatility 20 20
expected dividend growth rate 5 5
riskfree interest rate 5 5
the share based remuneration expense comprises 2007 2006
£000 £000
equitysettled schemes 17 9
the volatility assumption measured at the standard deviation of expected share price returns is based on a statistical analysis
of daily prices over the last 2 years
the group did not enter into any sharebased payment transactions with parties other than employees during the current or
previous period
notes to the financial statements of
the parent company continued
77354 accounts  19508  2005  page 56 a nnual r ep ort 20 07
notice of meeting
57
notice is hereby given that the sixty first annual general meeting of the company will be held at norman hay plc 
godiva place coventry on 18 june 2008 at 11 am for the following purposes
1 to receive and adopt the directors’ report and audited financial statements for the year ended 31 december 2007
2 to declare a final dividend for the year ended 31 december 2007
3 to reelect as a director mr peter hay who retires by rotation in accordance with article 84 of the articles of association
4 to reappoint the auditors a resolution to reappoint bdo stoy hayward llp as auditors will be proposed at the forthcoming
annual general meeting
5 to authorise the directors to fix the auditors’ remuneration
6 to consider and if thought fit approve as an ordinary resolution
61 that in accordance with article 7a of the company’s articles of association and part v chapter vii of the companies act
1985 “the act” the company be and it is hereby authorised generally and unconditionally pursuant to section 166 of
the act to make market purchases of any of its own shares on such terms and in such a manner as the board of
directors of the company may from time to time determine
62 the general authority conferred by this resolution shall
i expire on the date of the annual general meeting of the company to be held in 2009
ii be limited to 750000 shares of the company
iii not permit the payment per share of less than 10p nor more than 5 above the average of the middle market
quotations derived from the stock exchange daily official list of the shares for the ten business days before 
any such purchase is made
iv before expiry entitle the company to enter into any contract for the purchase of its own shares which will or might
be executed wholly or partly after its expiration
63 this authority shall only be capable of variation revocation or renewal by the company in general meeting
7 to consider and if thought fit approve as a special resolution
that the directors be and are hereby empowered pursuant to section 95 of the act to allot equity securities as defined 
in that act and pursuant to an authority dated 22 june 2007 given to the directors to allot relevant securities as defined in
that act as if the provisions of section 891 of the act did not apply to any such allotment until the conclusion of the
annual general meeting to be held in 2009 or 15 months whichever comes first in respect of
i allotments in connection with rights issues subject only to such exclusions as the directors may feel necessary or
expedient to deal with fractional entitlements or legal or practical requirements of an recognised regulatory body 
in any territory and
ii the allotment for cash otherwise than pursuant to i of equity securities up to an aggregate nominal amount
of £75000
77354 accounts  19508  2005  page 57 n or m a n h ay p l c
58
8 adoption of new articles of association
it is proposed in this resolution to adopt new articles of association the “new articles” in order to update the company’s
current articles of association the “current articles” primarily to take account of changes in english company law
brought about by the companies act 2006
the principal changes introduced in the new articles are summarised in part 1 of the appendix to this document other
changes which are of a minor technical or clarifying nature and also some more minor changes which merely reflect
changes made by the companies act 2006 have not been noted in the appendix to this document the new articles
showing all the changes to the current articles are available for inspection as noted on page 13 of this document
9 amendment to articles of association on 1 october 2008
it is proposed in this resolution to amend the new articles to take account of provisions of the companies act 2006 
which are expected to come into force on 1 october 2008 relating to directors’ conflicts of interest the change to the 
new articles which is being proposed in resolution 9 is summarised in part 2 of the appendix to this document 
the amendments which are being proposed to the new articles are available for inspection as noted on page 13 
of this document
registered office by order of the board
godiva place brigid m cattle
coventry cv1 5pn 20 may 2008
notes
1 a member entitled to attend and vote at this meeting is entitled to appoint one or more proxies to attend and on a poll vote on 
hisher behalf a proxy need not be a member of the company a form of proxy is attached for use at the meeting members should
complete sign and return this so as to reach the office of the company’s registrars not less than 48 hours before the time appointed 
for the holding of the meeting by so doing they will not be precluded from attending and voting at the meeting in person should they 
be able to do so
2 a register of directors’ interests and those of their families in the shares of the company and copies of relevant directors’ service contracts
will be available for inspection at norman hay plc godiva place coventry from the date of this notice until the close of the meeting
3 as permitted by regulation 41 of the uncertificated securities regulations 2001 shareholders who hold shares in uncertified form must
be enrolled on the company’s register of members at 600 pm on 16 june 2008 or in the event that the meeting is adjourned on the
register of members as at 600 pm two days prior to the time of any adjourned meeting provided such time is not more than 48 hours
prior to the time of any adjourned meeting in order to be entitled to attend andor vote at the meeting in respect of the number of
shares registered in their name at such time changes to entries on the register of members after that time will be disregarded in
determining the rights of any person to attend andor vote at the meeting
notice of meeting continued
77354 accounts  19508  2005  page 58 a nnual r ep ort 20 07
form of proxy
form of proxy for use at the annual general meeting to be held on 18 june 2008
59
iwe 
name in full in block capitals please
of 
being a membermembers of norman hay plc hereby appoint the chairman of the meeting
or † 
as myour proxy to vote for meus and on myour behalf at the annual general meeting of the company to be held at 11 am on
18 june 2008 and at any adjournment thereof
dated this  day of  2008
signature 
please indicate by inserting a cross in the appropriate space how you wish your vote to be cast on all the resolutions
mentioned if you sign this form and return it without specific directions your proxy will vote or abstain at his discretion 
this proxy will be used only in the event of a poll being directed or demanded
resolutions for against
1 to receive and adopt the directors’ report and financial statements
2 to declare a final dividend
3 to reelect mr peter hay as a director
4 to reappoint the auditors
5 to authorise the directors to fix the auditors’ remuneration
6 to authorise the company to buy its own shares
7 to disapply section 891 companies act 1985 to share issues
8 to adopt the new articles of association
9 to amend the articles of association on 1 october 2008
notes
1 to be effective this form must be lodged with the registrars equiniti aspect house lancing west sussex bn99 6zr not later than 
fortyeight hours before the meeting
2 any alteration in this form should be initialled
3 in the case of joint holders the vote of the senior who tenders a vote whether in person of by proxy shall be accepted to the exclusion 
of the other joint holders and for this purpose seniority shall be determined by the order the names appear in the register of members
4 in the case of a corporation this form should be executed either under its common seal or under the hand of an officer or attorney 
duly authorised
5 completion and return of this form will not preclude shareholders from attending and voting at the meeting should they subsequently
decide to do so
† if it is desired to appoint any other person who need not be a member of the company to act as proxy insert the name in the space
provided above and strike out the reference to the chairman
✂
77354 accounts  19508  2135  page 59 business reply service
licence no sea 10850
1 1
second fold
third fold
first fold
equiniti
aspect house
lancing
west sussex
bn99 6zr
77354 accounts  19508  2005  page 60


Summary:
 a nnual r ep ort 20 07
01
welcome
financial highlights 2007
the norman hay group is a specialist chemicals business 
focused on global opportunities for sealants and surface coatings
designed to operate in hostile and challenging environments
we market a portfolio of industry brand leaders recognised 
and respected by a diverse range of industries around the world
● revenue up 18 
● international revenue up 45 
● operating profits before nonrecurring items up 16
● pretax profits increased to £234m
● earnings per share increased to 114p
● dividend for the year up 33 
contents
financial highlights 1
business divisions 2
worldwide presence 3
chairman’s statement 4
chief executive’s business review 6
directors and advisers 10
report of the directors 11
statement of directors’ responsibilities 14
independent auditors’ report 15
consolidated income statement 16
consolidated balance sheet 17
consolidated cash flow statement 18
consolidated statement of recognised 
income and expense 19
notes to the group financial statements 20
parent company balance sheet 48
notes to the financial statements 
of the parent company 49
notice of meeting 57
form of proxy 59
77354 pre  19508  1841  page 1