specialist chemicals and systems
annual
report and accounts
2008 norman hay plc is a specialist chemicals group
focused on the construction automotive and 
oil  gas industries
we market a portfolio of leading chemical brands
recognised and respected by a diverse range of
industries around the world
welcome
contents
financial highlights 1
business divisions 2
our brands 3
chairman’s statement 4
worldwide presence 6
chief executive’s business review 7
directors and executive team 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 47
notes to the financial statements 
of the parent company 48
notice of meeting 55
advisers inside back cover a n n u a l r e p o r t 20 0 8 1
pretax profits increased to £24m 2007 £23m 
revenue up to £27m 2007 £24m 
final dividend for the year of 20p making the total
for the full year 40p 2007 44p
net asset value per share increased by 17 to 81p 2007 69p 
financial highlights 2008 w w w n o r m a n h ay co m 2
business divisions
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
automotive manufacturers
automotive suppliers
general engineering
foundry  die cast industry
gas  water industries
our norman hay businesses
ultraseal international
norman hay engineering
mx systems international
specialist 
construction chemicals
– solutions for underground 
construction and waterproofing
about us
we are world leaders in specialist
construction chemicals for underground
construction waterproofing leak
sealing ground stabilisation substrate
repair and protection
our client industries
construction and buildings
tunnels and mining
utilities  airports
civil engineering  highways
surface  underground rail
ports  water authorities
our norman hay businesses
tam international
specialist 
industrial coatings
– solutions for surface release wear 
and corrosion resistance
about us
we are world leaders in industrial surface
coatings and finishing 
we modify component surfaces to
improve performance in hostile and
challenging environments
our client industries
aviation and aerospace
mining and extraction
marine
oil gas and petrochemical
precision engineering
our norman hay businesses
armourcote
surface technology
norman hay engineering
applied precision coatings
hi tech coatings
advanced surface treatments 
a  portfolio of leading chemical brands
recognised and respected around the world
worldclass chemicals from the norman hay group
surface coatings automotive sealants construction chemicals a n n u a l r e p o r t 20 0 8 3
our brands
world class brands recognised and respected around the world
our products and services are used by some of the world’s largest companies on a variety of prestigious projects
ultraseal sealants are used by bmw for their new six cylinder engine being built in germany and austria
tam’s construction chemicals have been used in the uk at wembley stadium in hong kong on the tsing ma
bridge and in singapore for the mrt
armourcote’s coatings are used to enhance the performance of rolls royce aircraft engines
our specialist chemical brands are globally recognised for product excellence value and reliability – key attributes
that have built our reputation and enviable record in customer loyalty
norman hay engineering with its renowned plasticraft and ardrox brands supplies our three chemical divisions 
and their customers with advanced surface treatment and nondestructive testing equipment
norman hay product groups norman hay brands
armourcote
armourcote
tricem
hitech
apc
surface technology
ast
ultraseal international
mx
rexeal
mx2
pc50466
electroseal
tam international
tamseal
tampur
tamcrete
tamacryl
tamsil
tamrez
tamshot
tamcem 2008wasarecordyearforthenormanhaygroup
withapretaxprofitof£24monaturnoverof£27m
theseresultsincludeforeignexchangegainsandthe
saleofthebkfreeholdsitewhichwepreviously
announcedinapril2008
ourstrongperformanceinthefirsthalfoftheyear
sloweddownsignificantlyinthesecondhalfasthe
effectsoftheglobalfinancialcrisisimpactedmanyof
ourcustomersfrommidseptemberonwards
yourboardiscontinuingtorespondtothefast
changingeconomicenvironmentbyensuringthatall
effortsaretargetedonourmostsignificantsales
opportunitieswhilstintroducingfurthercostcontrols
acrossthegroup
ourpositionisstrengthenedbyfocusingonthreevery
differentmarketsworldwideprovidingspecialist
chemicalproductsfortheconstructionautomotive
andoilgasindustries
thestrategicmoveintospecialistchemicalproducts
hasbroughtglobalsalesopportunities–especiallyin
theasiapacificregion–reducingourexposuretothe
worseningbusinessclimateintheukparticularlyin
theautomotivesector
thisdiversificationhasbroughtbalancetoourglobal
customerbaseandseenourinternationalrevenues
increaseto48oftotalgroupsales
dividends
yourdirectorsrecommendafinaldividendforthe
yearof20p200726pmakingthetotalforthefull
year40p200744pasmallreductioninthese
difficulttimes
ifapprovedattheannualgeneralmeetingtobeheld
on24june2009thedividendwillbepaidon31july
2009toshareholdersontheregisteron26june2009
businessoverview
thegroupcomprisesthreechemicaldivisions
armourcote–surfacecoatings
inordertobeabletoofferthefullrangeofarmourcote
specialisedcoatingstoourglobaloilgascustomer
basewehaveexpandedhitechcoatingsinperth
westernaustraliaandopenedabrandnewfacilityin
portklangmalaysia
theintegrationofnewprocessesintotheexisting
businessinperthprovedimmediatelyprofitablethe
newstartupoperationinmalaysiawhichhasmade
lossesintheperiodtodateisexpectedtomoveinto
profitinthesecondhalfof2009
therehasbeensignificantpressureonmarginsin
ouruksubcontractsurfacecoatingsandtreatment
businessesinordertomitigatetheeffectsofthis
pressureweacquiredadvancedsurfacetreatments
limitedanothercoventrybasedoperationandhave
centralisedallzincandalloyelectroplatingonto
onesite
ultraseal–automotivesealants
2008provedtobeastrongyearintermsofsalesand
profitabilitydespitethewelldocumenteddownturn
oftheglobalautomotivesectorinthelastquarterof
theyear
ultrasealinternationaldeliveredandinstalled25new
processplantsduringtheyearineuropeandasia
manufacturedattheirbasesintheukindiaand
chinatheseplantswillfurtherexpandtheglobal
customerbasefortheirconsumablechemicalsin
thecomingyear
newanddevelopingmarketsreturnedpositiveand
realgrowthwhilstthetraditionalterritoriesalso
heldupwell
theongoinginternationaleconomicsituationis
naturallyofconcernandwehavemodifiedourshort
termobjectivesandfocustominimisetheimpact
ofthissituationonwhatisaspecialisedandniche
globalbusiness
wwwnor m anhaycom 4
16627 22052009 proof 6
“
chairman’s statement
16627normanhafront81215 pre  22509  1418  page 4 taminternational
–constructionchemicals
salesfromthetaminternationalgroupgrewstrongly
inthelast12monthsaswecontinuetoinvestinits
globalinfrastructure
tam’snewtunnellingminingdivisionhasbeen
formedtooperateprimarilyintheasiapacific
regionandissupportedbyournewtaiwanese
operationwhichmanufacturesthespecialised
constructionchemicalsandadditivesrequiredfor
thisimportantindustrysector
thestartupcostsofthesenewoperationshave
impactedtam’soverallresultsandwhilstthiswill
continueduringthesecondquarterof2009we
believethatthesebusinesseswillconsiderablybenefit
thefuturestrengthofthegroup
normanhayengineering
–chemicalengineering
ourengineeringbusinesscontinuestoperformwell
andprofitablyinitsincreasinglyglobalmarket
designingandmanufacturingourownrangeof
chemicalprocessplantssupportsthethreechemical
divisionsofthegroup
thebespokesystemsincludemetalfinishingplants
extractionpollutioncontrolequipmentvacuum
impregnationandnondestructivetestingequipment
staff
onbehalfoftheboardandourshareholdersiwould
liketothankallofthegroup’sstafffortheirconsistent
hardworkloyaltyandcommitmenttothegroup
workingaswedointhesechallengingtimesiam
confidentthattheywillcontinuetodeliverexcellent
servicetoourcustomers
wehaveinevitablyhadtolosesomeofourstaffas
wecontinuouslyscaleourbusinessesinlinewiththe
changingoperatingandeconomicenvironment
thatisnotadecisioneasilytakenandthenecessity
ofitisregrettedbyusall
outlook
theturmoilinthefinancialmarketsispushingmany
industrialisednationsintorecessionanditisdifficult
toevaluateexactlyhowthiswillimpactourbusinesses
in2009
despitebeingwellstructuredtoweatherthestorm
economicweaknessinourmainmarketssignificantly
affectedourtradinginthefirstquarterofthisyear
manygovernmentsaroundtheworldareinvesting
orplanningtoinvestinmajorcivilengineering
andinfrastructureprojectsasawayofcombating
thedownturnthiswillhelptobolstertheglobal
constructionindustryandinduecourseour
constructionchemicalsandengineeringbusinesses
shouldbenefit
sofarthisyearwehavesetupnewoperationsin
indonesiaandindiatocomplementthosesetup
in2008intaiwanandmalaysiainevitablythese
newbusinessesputastrainonresourcesduring
theirstartupperiodsbuttheywillformpartofthe
bedrockofourfuturegrowthwhennormaltrading
conditionsreturn
inmarch2009wemovedthetamukoperationfrom
daventrytoourcoventrysiteinordertooptimise
resourcesandpoolitsmanufacturingfacilitieswith
thoseofultrasealinternational
inthesamemonthnormanhayengineeringsecured
amajor£4mcontractforanaerospaceprocessfacility
tobeinstalledinthekingdomofsaudiarabia
themeasuresthatwehavetakenandcontinueto
taketomaximiseefficienciesminimiseoperating
costsandrefocusourmarketswillstandthegroup
ingoodsteadtocomethroughthiscurrentperiod
ofeconomicturmoil
theconditionalcontractthatwehadenteredintowith
uniteforthesaleofthecoventrysitehasbeen
terminatedbymutualagreementasplanning
permissionfortheproposedstudentaccommodation
developmentwasnotforthcoming
weexpecttradingtoimproveduringthesecond
quarterassomeofourcustomersrestockandthis
trendshouldcontinueintothesecondhalfofthisyear
peterlhay
chairman
27may2009
a nnual r ep ort 2008 5
16627 22052009 proof 6
our position is strengthened by focusing on three very different markets
worldwide providing specialist chemical products for the construction
automotive and oil  gas industries
“
”
16627normanhafront81215 pre  22509  1418  page 5 w w w n o r m a n h ay co m 6
worldwide presence
the norman hay group of companies has its own operations across 5 continents 
and distributors agents and resellers in over 25 countries
we are an international group that is familiar with different standards different 
cultures and different operating environments
we continue to seek new prospective distributors who believe they can develop 
our regional presence
our operations span the globe a n n u a l r e p o r t 20 0 8 7
chief executive ’ s business review
norman hay group review of 2008
the group’s strategy is to create growth through the
global expansion of our businesses i am pleased to say
that we were again successful in achieving this in 2008
financial performance
revenue up 13
international revenue up 28
profits from operations increased to £24m
sales in the year to 31 december 2008 grew by 13 
to £27m 2007 £240m a pretax profit of £24m 
2007 £23m was achieved after significant start up
costs for new operations were offset by exchange gains
and the profit on the sale of the bk engineering site 
in leighton buzzard
basic earnings per share of 107p 2007 114p would
have been 162p 2007 163p excluding the taxation
charge the taxation adjustments are further explained
in note 9 to the financial statements
set against the challenges of world economic
conditions this has been another successful trading
year for the group we continued to increase the
group’s earnings in the first half of the year however
performance was impacted in the final quarter as our
customers were affected by the global financial crisis
operations
our operations are divided into three chemical
divisions supported by our engineering division which
designs and manufactures a wide range of chemical
process plants
armourcote – specialist surface coatings
ultraseal – automotive sealants
tam – construction chemicals 
these three leading brands are recognised and
respected by a diverse range of industries and sought
after by many of the world’s leading multinational
manufacturers
armourcote – surface coatings
the surface coatings business did not perform as well 
as in the preceding year our new venture in malaysia
incurred a start up loss of £193k before adjusting 
for exchange gains and in addition we incurred
reorganisation costs in the coventry operation as we
integrated it in to the ast business which we acquired
in july 2008 our uk based businesses providing
specialist surface coatings for the oil  gas sector
having started slowly recovered to finish the 
year strongly
armourcote serves a number of markets including
automotive engineering and oil  gas as we see a 
major deterioration in the automotive sector other
markets are proving to be more resilient and our
leeds and scotland based operations that are
predominantly focused on the oil  gas markets 
have started 2009 strongly
the diversity in the markets we service should help to
offset the bleak outlook in manufacturing expected 
over the next twelve months
ultraseal – automotive sealants
ultraseal’s performance in 2008 was above
expectations with pretax profits up 21 on the
preceeding year the impact of increased market 
share and positive exchange gains boosted results 
sustainability and a corporate responsibility towards
the environment has always been the focus for
ultraseal international throughout 2008 we continued
to pursue the development of new products and
services that will allow ultraseal’s customers to adopt
new solutions which will enable them to reduce their
carbon footprints and effluent streams w w w n o r m a n h ay co m 8
chief executive ’ s business review continued
ultraseal – automotive sealants cont’d
although the automotive sector suffered in the second
half of 2008 the global nature of our business helped 
to offset the decline in europe and the usa
as part of our focus on “total solutions to porosity”
ultraseal international has become the exclusive
distributor for the lubrolene range of patented die
lubricants for the greater european area these
products from a leading japanese manufacturer are
unique in their field and represent the most advanced
products available in the world bringing both huge
environmental and financial benefits to users they
represent a demonstrable synergy with the ultraseal
range of advanced impregnation sealants in that 
they focus on better quality products and provide lower
manufacturing costs and reduced environmental
impact for the customer 
the outlook for 2009 is difficult to forecast as the
reduction in new automotive manufacturing schedules
is yet to stabilise as a result we are expecting a fall 
in profitability compared with 2008
norman hay engineering
– chemical engineering
the results for 2008 were better than in 2007 as
despite lower sales improvements in margins resulted
in a 12 increase in profits
the year has started well with us securing a major
contract with messier services uk to supply and install
process lines for a new aircraft landing leg repair facility
in saudi arabia
tam – construction chemicals
we continued to expand the construction chemicals
operations in 2008 sales grew by 64 to £69m 
2007 £42m although profitability did not grow at the
same rate the manufacturing and distribution facility
in taiwan incurred start up losses and the australian
operation produced a loss for the year the tam
australia strategy is now realigned and cost reduction
measures have resulted in a small operating profit being
achieved in november and december
tam international is growing into a truly global
supplier of a broad range of construction chemicals 
with our new taiwan facility which became operational
in july manufacturing advanced admixes and
associated chemical products
the global expansion will continue in 2009 with the
establishment of sales and marketing operations in
indonesia and india together with the signing up of
new distributors in vietnam and malaysia 
although many sections of the construction industry
are experiencing difficult times the tam business
which is predominately involved in structural repairs
and infrastructure projects will benefit from
opportunities which arise as governments increase
spending in these areas to offset the impact of the
global recession a n n u a l r e p o r t 20 0 8 9
norman hay plc
norman hay made two significant appointments during
2008 in order to strengthen the team at group level
lee shelton – director of international business
development
lee shelton was appointed director of international
business development in january 2008 and he relocated
from japan to hong kong in march 2009 in this new
role lee will focus on driving growth opportunities
across the asiapacific region
nick ogden – group financial controller of norman hay plc
and finance director of surface technology plc
nick ogden was appointed in june 2008 in order 
to strengthen the overall financial control and
management of our increasingly international
operations
nick has joined us from bdo stoy hayward llp where he
had been audit manager for norman hay since 2004
his insight into the group has enabled him quickly to
contribute to improvements in the financial
management of group businesses
current trading
whilst the current global economic environment
presents us with new challenges there are a number 
of positives 
the norman hay engineering order book boosted by the
messier order for saudi arabia now stands at its highest
ever level 
in addition there has been a significant increase in new
enquiries associated with this success and several new
opportunities are being explored
elsewhere tam international has recently received a
£26m contract to supply specialist construction
chemicals for the hong kong west drainage 
tunnel project
victor p bellanti
chief executive 
27 may 2009
this has been another successful trading year for the group
despite the challenges of world economic conditions
“
”
summary
the norman hay group
has been successful
in its strategy for sales growth
through the global expansion
of its businesses
current trading cont’d
we are in a strong position to repeat this success on 
a number of other up and coming infrastructure projects 
in the asiapacific region
the actions that we have taken to tackle
the uncertainties in the financial markets will ensure 
that the group is well placed to move forward in 
the next 12 months directors and executive t eam
w w w n o r m a n h ay co m 10
executive directors
peter l hay 
chairman
peter hay was appointed to the board in 1977 
he was group technical director for five years
and subsequently group managing director for
eleven years
victor p bellanti 
chief executive
victor bellanti joined norman hay plc in 1993 as
financial 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
since 1964 he was group sales  marketing director
before serving as chairman from 1984 to 1993 
david w miller 
nonexecutive director
david miller was chief operating officer for 7 years
before he retired at the end of 2006 he rejoined the
board as a nonexecutive director in february 2007 
executive team
lee shelton
director of international business development
– norman hay plc
lee shelton joined ultraseal in 1999 and was previously
based in japan as asiapacific director following his
promotion in 2008 he is now based in hong kong
nick ogden 
group financial controller 
– norman hay plc 
nick ogden who is also finance director of surface
technology plc joined norman hay plc in 2008 from
bdo stoy hayward llp where he was a senior manager
in their business assurance team
brigid cattle 
company secretary 
– norman hay plc
brigid cattle was appointed company secretary
of norman hay plc in september 2000 previously
she was human resources director of ultraseal
international
ronnie ross 
managing director 
– surface technology international
ronnie ross  joined the east kilbride surface finishing
business in 1986 in 2008 he was promoted 
to managing director of surface technology 
international with operations in scotland 
malaysia and perth in western australia
martyn crowther 
managing director 
– armourcote
martyn crowther joined the leeds based business in
1974 he was appointed operations director in 1990
and promoted to managing director of armourcote’s
uk operations in 2008
gary lloyd 
managing director 
– ultraseal international
gary lloyd joined ultraseal in 1988 and was appointed
managing director in 1996 he is responsible for all
ultraseal’s global operations 
mike priddle
managing director 
– norman hay engineering
mike priddle joined ultraseal in march 1987 and was
appointed engineering director in 1998 in 2007 
he was promoted to managing director of norman 
hay engineering
martin robbins
managing director 
– tam international
martin robbins is based in hong kong and is
responsible for tam’s global operations he retains a 
25 shareholding in tam international which was
acquired by norman hay plc in december 2006 report of the directors
the directors have pleasure in submitting their annual
report and audited financial statements for the year
ended 31 december 2008
results and dividends
the group income statement is set out on page 16 and
shows revenue for the year of £270m and profits on
ordinary activities before tax of £236m
principal activities and business review
the principal activities and business information on
pages 4 and 5 chairman’s statement and chief
executive’s business review on pages 79 provide
detailed information relating to the group and the
operation and development of the business for the 
year ended 31 december 2008
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
chemicals and have extended our global reach to
service the requirements of our multinational
customer base
the economic conditions in financial markets have led
to greater uncertainty the impact of which is also
discussed within the review on pages 45 the
information contained in these pages summarises 
the actions that the group has taken to tackle these
uncertainties and to ensure that the group is well
placed to move forward in the next 12 months
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
establishing clearly defined procedures for the
authorisation of major new investments and
commitments and
ensuring that exposure to foreign exchange is
minimised through prompt payment of intergroup
current accounts
the board and management teams continue to
monitor potential risk areas and adjust tactical and
strategic plans accordingly to protect our businesses
proactive working capital management and analysis 
of historic and anticipated trading patterns assist the
board in its decision making financial reviews are
undertaken at board and management levels to
analyse and understand current and future results
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 30 of the financial statements
directors
the directors of the company shown on page 10 held
office throughout the year mr david miller retires by
rotation and being eligible offers himself for reelection
a n n u a l r e p o r t 20 0 8 11 report of the directors continued
directors’ interests
interest in shares
the interests of the directors and their immediate
families in the share capital of the company remained
unchanged between the dates set out below
1 january and
31 december 2008
beneficial
p l hay 2210870
a m hay 1108170
d w miller 264750
v p bellanti 125000
the details of the directors’ interests in share options
which remained unchanged between the dates shown
are as follows
interest in share options
1 january and
31 december 2008
p l hay approveda 144925
v p bellanti approved a 144925
v p bellanti unapproved b 620075
p l hay unapproved b 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 2008 the middle market price of the
ordinary shares was 795p per share and the range
during the year was between 79p and 1285p
substantial shareholdings
at 31 december 2008 the company had 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 487500 329
miss a hendy 452500 305
westcombe investments 446000 301
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 2008 creditors represented 54 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 up to and including the balance
sheet date and the date of this report
w w w n o r m a n h ay co m 12 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 £1155 2007  £819 no political contributions
were made
land and buildings
it is likely that the open market value of our freehold
land and buildings is significantly higher than the
recorded carrying value no valuation has been
undertaken that allows us to quantify this difference
auditors
the directors have taken all the necessary steps 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
27 may 2009
a n n u a l r e p o r t 20 0 8 13 statement of directors’ responsibilities
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
w w w n o r m a n h ay co m 14 independent auditors’ report
we have audited the group and parent company
financial statements the “financial statements” of
norman hay plc for the year ended 31 december 2008
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
the other information comprises welcome financial
highlights the business divisions our brands the
chairman’s statement worldwide presence the chief
executive’s business review the directors and executive
team 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 2008 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 2008
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
27 may 2009
a n n u a l r e p o r t 20 0 8 15 w w w n o r m a n h ay co m 16
2008 2007
note £000 £000
revenue 2 27001 23959
cost of sales 17175 15327
gross profit 9826 8632
distribution expenses 1036 631
administrative expenses 6857 5749
other income 497 143
profit from operations 3 2430 2395
finance income 4 139 190
finance costs 5 206 243
profit before taxation 2363 2342
taxation 7 810 672
profit after taxation 1553 1670
attributable to
equity holders of the parent 1562 1637
minority interest 9 33
1553 1670
basic earnings per share 9 107p 114p
diluted earnings per share 9 104p 109p
the notes shown on pages 20 to 46 form part of these financial statements 
w w w n o r m a n h ay co m 16
consolidated income statement
for the year ended 31 december 2008 a n n u a l r e p o r t 20 0 8 17 a n n u a l r e p o r t 20 0 8 17
consolidated balance sheet
at 31 december 2008
2008 2007
note £000 £000 £000 £000
assets
noncurrent assets
intangible assets 10 2952 2437
property plant and equipment 11 5837 4633
investments 12 26 26
other receivables – 72
total noncurrent assets 8815 7168
current assets
inventories 13 2846 1795
trade and other receivables 14 7206 6774
cash and cash equivalents 15 1015 801
asset held for sale 11 – 271
total current assets 11067 9641
total assets 19882 16809
liabilities
current liabilities
other financial liabilities 16 512 659
trade and other payables 17 4380 3870
provisions 18 114 142
current tax liabilities 19 653 682
total current liabilities 5659 5353
noncurrent liabilities
other financial liabilities 20 2000 1331
trade and other payables 21 –
deferred tax liabilities 21 422 144
total noncurrent liabilities 2443 1475
total liabilities 8102 6828
net assets 11780 9981
equity
share capital 24 1481 1481
share premium account 25 1254 1254
capital redemption reserve 25 94 94
other nondistributable reserve 25 766 766
reserve for own shares 25 322 322
share scheme reserve 25 43 26
foreign exchange reserve 25 772 36
retained earnings 25 7372 6475
equity attributable to equity holders of
the parent company 11460 9810
minority interest 320 171
total equity 11780 9981
the financial statements were approved and authorised for issue by the board on 27 may 2009 
victor p bellanti
director 
the notes shown on pages 20 to 46 form part of these financial statements  consolidated cash flow statement
for the year ended 31 december 2008
2008 2007
cash flows from operating activities note £000 £000
profit from operations 2430 2395
release of negative goodwill 231 –
impairment of intangibles – 15
depreciation 566 383
profitloss on sale of property plant and equipment 378 38
share option charge 17 17
increase in inventories 614 515
decreaseincrease in receivables 886 864
decreaseincrease in payables 721 167
decreaseincrease in provisions 28 48
finance income 139 190
finance costs 206 243
tax paid 781 414
net cash generated from operating activities 1079 1217
cash flows from investing activities
acquisition of subsidiaries net of cash acquired 26 210 383
purchase of property plant and equipment 1030 847
expenditure on intangibles – 15   
proceeds from disposal of property plant and equipment 691 18
net cash used in investing activities        549 1227
cash flows from financing activities
dividends paid to shareholders 669 554
net proceeds from issue of ordinary share capital – 112
payments for purchase of share capital in subsidiary 26 –
net proceeds from issue of share capital to minority shareholders 197 –
purchase of long term incentive plan shares – 322
finance lease repayment 59 31
new loans raised 303 581
repayment of loans 214 546
net cash used in financing activities     468 760
net increasedecrease in cash and cash equivalents 62 770
cash and cash equivalents at the beginning of the year 541 1264
effects of foreign exchange rate changes 224 47
cash and cash equivalents at the end of the year 15 827 541
the notes shown on pages 20 to 46 form part of these financial statements 
w w w n o r m a n h ay co m 18 consolidated statement of 
recognised income and expense
for the year ended 31 december 2008
2008 2007
£000 £000
exchange differences on translation of foreign operations 723 75
deferred tax movements in respect of share option scheme 4 4
net income recognised directly in equity 727 71
profit for the year 1553 1670
total recognised income and expense for the year 2280 1741
attributable to
equity shareholders 2302 1708
minority interests 22 33
2280 1741
a n n u a l r e p o r t 20 0 8 19 notes to the group financial statements
1  accounting policies
these financial statements have been prepared in accordance with international financial reporting standards international
accounting standards and interpretations collectively “ifrs” issued by the international accounting standards board “iasb”
as endorsed by the european union “endorsed ifrs” and with those parts of the companies act 1985 applicable to companies
preparing financial statements in accordance with ifrs
the parent company financial statements have been prepared in accordance with applicable united kingdom accounting
standards and are shown in pages 47 to 54
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 2009 or later periods and which the group has decided not to adopt
early these are
ifrs 8 operating segments ifrs 8 is mandatory for accounts periods beginning on or after 1 january 2009 this standard will
replace ias 14 ifrs 8 will require an entity to adopt a ‘management approach’ to report on the financial performance of its
operating segments and also about the entity’s products and services the geographical areas in which it operates and its
major customers the information to be reported would be what management uses internally for allocating resources to
operating segments
as it is a disclosure standard ifrs 8 is not expected to affect reported net assets or results of the group
management is currently assessing the impact of this revision on the financial statements
ifrs 3 business combinations revised 2008 and complementary amendments to ias 27 consolidated and separate
financial statements ifrs 3 revised 2008 and the complementary amendments to ias 27 are both mandatory for
accounting periods beginning on or after 1 july 2009 but are not as yet endorsed for use in the european union
there are certain significant changes to the requirements of ifrs 3 and options available when accounting for business
combinations in future periods
management is currently assessing the impact of ifrs 3 revised 2008 and complementary amendments to ias 27 on the
group financial statements
ias 1 presentation of financial statements revised 2007 ias 1 revised 2007 is mandatory for accounts periods beginning
on or after 1 january 2009
this revision of ias 1 will require a change in how the consolidated income statement is presented by the inclusion of a
statement of comprehensive income which includes items taken directly to equity with the exception of transactions  with
the shareholders of the group
this new presentation will either be in terms of one single statement of comprehensive income or as two separate
statements comprising a group income statement which is currently presented and a further statement of comprehensive
income which incorporates only those items to be taken directly to equity
management is currently reviewing the impact of ias 1 revised 2007 on the presentation of the group financial statements
amendments to ifrs 7 improving disclosures about financial instruments this amendment is mandatory for accounts
periods beginning on or after 1 january 2009 but is not as yet endorsed for use in the european union
the amendment requires the analysis of each class of financial asset and financial liability into a threelevel fair value
measurement hierarchy it requires additional disclosures in respect of those financial instruments classified as level three
namely those that are measured using a valuation technique which uses inputs that are not based on observable market
data it also implements some changes to the definition of and disclosures associated with liquidity risk
management is currently assessing the impact of this revision on the financial statements
w w w n o r m a n h ay co m 20 1  accounting policies continued
standards interpretations and amendments to published standards not yet effective continued
improvements to ifrs the improvements to ifrs are mandatory for accounts periods beginning on or after 1 january 2009
this amendment takes various forms including the clarification of the requirements of ifrs and the elimination of
inconsistencies between standards the most significant changes cover the following issues the classification of assets and
liabilities as held for sale where a noncontrolling interest is retained accounting by companies that routinely sell assets
previously held for rental to others accounting for loans given at a nil or below market rate of interest the reversal of
impairments against investments in associates accounted for using the equity method the timing of expense recognition for
costs incurred on advertising and other promotional activity and accounting for properties in the course of construction
management is currently assessing the impact of this revision on the financial statements
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
amendment to ifrs 2 sharebased payments vesting conditions and cancellation effective for periods beginning on or after
1 january 2009
ias 23 borrowing costs revised effective for accounting periods beginning on or after 1 january 2009
ifric 13 customer loyalty programmes effective for periods beginning on or after 1 july 2008
ifric 15 agreements for the contribution of real estate effective for periods beginning on or after 1 january 2009
ifric 16 hedges of a net investment in a foreign operation effective for periods beginning on or after 1 october 2008
ifric 17 distribution of noncash assets to owners effective for periods beginning on or after 1 july 2009
ifric 18 transfer of assets from customers effective for periods beginning on or after 1 july 2009
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
amendments to ias 39 financial investments recognition and measurement eligible hedged items effective for periods
beginning on or after 1 july 2009
embedded derivatives amendments to ifric 9 and ias 39 effective for periods beginning on or after 30 july 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 and where the fair value of the net assets exceeds the cost of acquisition the difference is recorded as
negative 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
a n n u a l r e p o r t 20 0 8 21 notes to the group financial statements continued
1  accounting policies continued
revenue continued
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
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 2007 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
negative goodwill
where the fair value of the assets required exceeds the acquisition cost the negative goodwill that arises is recorded as income
within the income statement
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
w w w n o r m a n h ay co m 22 1  accounting policies continued
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
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 the amount of the provision is the difference between the net carrying
amount and the present value of the future expected cashflows associated with the impaired receivable for trade receivables
such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in
the income statement on confirmation that the trade receivable will not be collectible the gross carrying value of the asset is
written off against the associated provision
a n n u a l r e p o r t 20 0 8 23 notes to the group financial statements continued
1  accounting policies continued
trade payables
trade payables and other shortterm monetary liabilities are initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method
deferred contingent consideration
where deferred consideration arises upon an acquisition there is an estimation of the factors that affect this consideration and
a value attributed as deferred consideration this is reviewed annually
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
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 differences 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 monthly exchange rate where longterm group loans exist that arise as a result of acquisition the
movement on the loans that arises through fluctuations on the exchange rate is taken to the foreign exchange reserve
w w w n o r m a n h ay co m 24 1  accounting policies continued
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 12 months  after the
balance sheet date
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
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
the valueinuse calculation requires the entity to estimate future cash flows expected to arise from the cash generating unit
and a suitable discount rate in order to calculate present value
a n n u a l r e p o r t 20 0 8 25 notes to the group financial statements continued
1  accounting policies continued
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 liabilities is an amount of £156000 payable in respect of the acquisition of one of the subsidiary companies the
deferred consideration is calculated based on an estimate of future profits of the subsidiary and therefore cannot be estimated
with certainty the amount recognised in the financial statements is the discounted value of future profits based upon a linear
projection of profits
inventory provisions
group inventory levels are constantly reviewed and should there be an indication of impairment or obsolescence the inventory
is written down to its assessed net realisable value
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 chemicals chemicals for use in the construction industry to prevent the ingress of water and to improve
structural integrity
plant manufacture manufacture of a range of chemical processing plant and equipment
during the year the directors have reconsidered the allocation of head office costs and have determined that certain of these costs
can be allocated on a reasonable basis the comparative figures have been adjusted accordingly leading to £11 million 
of previously unallocated costs in 2007 being allocated to segments to ensure that the comparatives are presented on a 
consistent basis
segment information about these businesses is presented below
year ended 31 december 2008
automotive construction surface plant eliminations consolidated
sealants chemicals coatings manufacture
revenue
external sales 5937 6940 9860 4264 – 27001
intersegment sales 26 –– 73 99 –
total revenue 5963 6940 9860 4337 99 27001
segment result 1131 35 625 236 2027
unallocated corporate income 403
profit from operations 2430
finance income 139
finance costs 206
profit before taxation 2363
taxation 810
profit after taxation 1553
w w w n o r m a n h ay co m 26 2  segmental analysis continued
other information
automotive construction surface plant corporate consolidated
sealants chemicals coatings manufacture assets
capital additions including
intangibles and acquisitions 7 592 1245 18 – 1862
depreciation 47 127 312 35 45 566
balance sheet
segment assets 4785 6739 5753 1956 649 19882
segment liabilities 946 1046 1250 1119 3741 8102
segment net assetsliabilities 3839 5693 4503 837 3092 11780
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
year ended 31 december 2007
automotive construction surface plant eliminations consolidated
sealants chemicals 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 936 44 1205 210 – 2395
unallocated corporate expenses –
profit from operations 2395
finance income 190
finance costs 243
profit before taxation 2342
taxation 672
profit after taxation 1670
other information
automotive construction surface plant corporate consolidated
sealants chemicals coatings 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
a n n u a l r e p o r t 20 0 8 27 notes to the group financial statements continued
2  segmental analysis continued
by secondary segment – geographical
the analysis of revenue by location of customer is as follows 2008 2007
£000 £000
united kingdom 14084 13875
rest of europe 3316 3912
usa 1146 1094
asiapacific 7454 4736
rest of the world 1001 342
27001 23959
the analysis of assets by location is as follows 2008 2007
£000 £000
united kingdom 12690 12799
usa 421 533
asiapacific 6771 3477
19882 16809
additions to property plant and equipment and intangible assets 2008 2007
£000 £000
united kingdom 1082 974
usa 1 4
asiapacific 779 445
1862 1423
3  profit from operations
2008 2007
£000 £000
this is stated after charging
depreciation of tangible fixed assets 566 383
profitloss on disposal of property plant 
and equipment 378 38
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 97 65
taxation services 35 17
remuneration services – 4
services relating to corporate finance transactions 8 –
other 23 12
cost of inventories recognised as an expense 9211 9478
cost of inventories written off during the year 105 –
research and development 176 180
operating lease rentals – plant and machinery 263 106
– properties 344 60
share option expense 17 17
foreign exchange gains 384 100
w w w n o r m a n h ay co m 28 4  finance income
2008 2007
£000 £000
interest on bank deposits 139 190
5  finance costs
2008 2007
£000 £000
interest on bank loans and overdrafts 196 239
hire purchase interest 10 4
206 243
6  employees
2008 2007
number number
the average number of employees including executive directors during the year comprised
office and management 152 140
manufacturing 195 152
347 292
£000 £000
staff costs including executive directors during the year amounted to
wages and salaries 8243 6884
social security costs 725 621
other pension costs note 27 425 302
share option expense 17 17
9410 7824
a n n u a l r e p o r t 20 0 8 29 notes to the group financial statements continued
7  taxation
2008 2007
£000 £000
uk corporation tax – charge for the year 628 679
– adjustment in respect of previous periods 36 34
current tax on foreign income for the year 87 45
751 690
deferred tax – transfer tofrom deferred tax account 45 41
– adjustment in respect of previous periods 14 23
810 672
the tax assessed in the year is lower than the standard rate of corporation tax in the uk
the difference is explained below 2008 2007
£000 £000
tax on profit on ordinary activities at the standard rate of
corporation tax in the uk of 28 2007 30 662 703
adjustment in respect of previous periods 36 34
prior year adjustments in deferred tax 14 23
expenses not deductible for tax purposes 98 60
tax effect of property disposal 113 –
withdrawal of ibas 85 –
income not taxable for tax purposes 116 72
unrelieved tax losses 192 –
marginal relief – 2
effect of changes in tax rates 9 5
effect of different tax rates of subsidiaries in other jurisdictions 57 1
total tax charge for the year 810 672
on 6 april 2008 the rate of corporation tax changed from 30 to 28 this will affect future years’ tax charges
8  dividends
2008 2007
£000 £000
final dividend paid of 26p 2007 20p per share 378 293
interim dividend paid of 20p 2007 18p per share 291 261
669 554
dividends declared after the balance sheet date but before approval of
financial statements of 20p 2007 26p per share 291 378
dividends are recognised in the financial statements when they are paid and not declared the 2008 financial statements
recognised the interim dividend that was both paid and declared in 2008 and also the final dividend that was paid in 2008 
but declared in the prior year financial statements for the year ended 31 december 2007
w w w n o r m a n h ay co m 30 9  earnings per ordinary share
2008 2007
£000 £000
profit on ordinary activities after tax 1562 1637
basic earnings per ordinary share number number
000s 000s
weighted average number of ordinary shares in issue 14546 14400
earnings per share 107p 114p
diluted earnings per share number number
000s 000s
weighted average number of ordinary shares in issue including relevant share options 15053 15069
earnings per share 104p 109p
profit before tax per share 2008 2007
£000 £000
profit on ordinary activities before tax 2363 2342
number number
000s 000s
weighted average number of ordinary shares in issue 14546 14400
profit before tax per share 162p 163p
the increase in taxation charge is in part due to the withdrawal of ibas this is further disclosed in note 7 to the financial
statements
a n n u a l r e p o r t 20 0 8 31 notes to the group financial statements continued
10  intangible assets
brands goodwill total
cost or valuation £000 £000 £000
at 1 january 2007 500 1543 2043
additions – 79 79
acquisition of subsidiary – 337 337
foreign exchange differences – 31 31
at 1 january 2008 500 1990 2490
additions – 156 156
other movements – 140 140
foreign exchange differences – 222 222
disposals – 16 16
at 31 december 2008 500 2492 2992
amortisation
at 1 january 2007 –88
impairment provision – 15 15
foreign exchange differences – 30 30
at 1 january 2008 – 53 53
disposals – 16 16
foreign exchange differences –33
at 31 december 2008 – 40 40
net book value
at 31 december 2008 500 2452 2952
at 1 january 2008 500 1937 2437
at 1 january 2007 500 1535 2035
impairment of goodwill and brands
the recoverable amount of each cash generating unit cgu connected to the brand’s value has been determined from valuein
use calculations based on cashflow assumptions for a five year period extrapolated with no growth to 31 december 2018
the tam brand has been assessed as having an indefinite useful life when coupled with continuing market spend to maintain
the brand during 2008 the tam group expanded into new product ranges and new markets the tam brand is therefore still
considered to have an indefinite useful life
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
w w w n o r m a n h ay co m 32 10  intangible assets continued
mx applied
tam systems precision hitech
international international coatings coatings
discount rate 10 10 10 10
£000 £000 £000 £000
goodwill 1189 475 315 473
brands 500 –––
there is no impairment of goodwill or brands the directors do not believe that the impairment reviews are sensitive to changes
in major assumptions the directors used a discount rate of 20 in the previous year all other assumptions in the current and
prior year remain the same
11  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 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 1 january 2008 3065 577 4037 354 8033
additions – 127 985 30 1142
acquisition of subsidiary –– 424 – 424
exchange differences – 26 295 9 330
reclassified –– 11 – 11
disposals –– 175 14 189
at 31 december 2008 3065 730 5577 379 9751
a n n u a l r e p o r t 20 0 8 33 notes to the group financial statements continued
11  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 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 1 january 2008 507 97 2546 250 3400
provided during the year 32 36 443 55 566
exchange differences – 11 69 5 85
reclassified –– 11 – 11
disposals –– 136 12 148
at 31 december 2008 539 144 2933 298 3914
net book value
at 31 december 2008 2526 586 2644 81 5837
at 1 january 2008 2558 480 1491 104 4633
at 1 january 2007 2588 470 941 95 4094
the net book value of plant vehicles and fixtures includes £151000 2007 £62000 in respect of assets held under finance
leases and hire purchase contracts depreciation charged on these assets amounted to £33000 2007 £10000
the asset held for sale at 31 december 2007 of £271000 was disposed of during the year ended 31 december 2008
12  investments
£000
other investments 26
at 1 january 2008 and at 31 december 2008
there is no material change in the fair value of the group’s investments
13  inventories
2008 2007
£000 £000
raw materials and consumables 1494 861
work in progress 127 –
long term contract balances – 140
finished goods 1225 794
2846 1795
w w w n o r m a n h ay co m 34 14  trade and other receivables
2008 2007
£000 £000
amounts receivable for sale of goods 6230 5580
allowance for doubtful debts 177 148
trade receivables 6053 5432
amounts due from contract customers 97 826
other receivables 476 110
prepayments and accrued income 577 406
corporation tax 3 –
7206 6774
the carrying values of the group’s trade and other receivables are denominated in the following currencies
2008 2007
£000 £000
sterling 4376 4696
euros 322 781
us dollars 217 134
hong kong dollars 236 161
singapore dollars 988 575
australian dollars 535 254
other currencies 529 173
7203 6774
at 31 december 2008 trade and contract receivables of £553000 2007 £346000 were past due but not impaired they relate
to customers with no default history the ageing of these receivables from invoice date is as follows
2008 2007
£000 £000
up to 3 months 140 88
3 to 6 months 238 149
6 to 12 months 175 109
553 346
at 31 december 2008 trade receivables of £177000 2007 £148000 were past due and impaired the basis for these
impairments were default on repayments financial difficulties of customers and specific invoices under dispute all other trade
receivables are considered recoverable no objective evidence has arisen post balance sheet to indicate otherwise
the receivables relate to various trading activities of the group the ageing of these receivables is as follows
2008 2007
£000 £000
up to 3 months 12 85
3 to 6 months 64 63
6 to 12 months 101 –
177 148
a n n u a l r e p o r t 20 0 8 35 notes to the group financial statements continued
14  trade and other receivables continued
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
2008 2007
£000 £000
opening balance 148 188
acquisition of subsidiary 101 –
increases in provisions 86 73
amounts utilised 118 20
amounts released 52 97
foreign exchange differences arising 12 4
177 148
15  cash and cash equivalents
2008 2007
£000 £000
cash 1015 801
within the cash flow statement the cash and cash equivalents line includes bank overdrafts of £188000 2007 £260000 the
currency distribution of cash and cash equivalents at 31 december was as follows
2008 2007
£000 £000
sterling 66 148
euros 52 –
us dollars 139 332
hong kong dollars 172 –
singapore dollars 102 110
australian dollars 272 132
other currencies 212 79
1015 801
w w w n o r m a n h ay co m 36 16  current other financial liabilities
2008 2007
£000 £000
bank overdraft secured 188 260
bank loans secured 214 200
finance lease and hire purchase secured 53 25
other loans 57 174
512 659
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
2008 2007
£000 £000
sterling 445 460
hong kong dollars 10 2
singapore dollars 4 3
australian dollars 39 194
taiwan dollars 14 –
512 659
17  current trade and other payables
2008 2007
£000 £000
trade payables 2080 1971
amounts due to contract customers 51 64
other taxation and social security costs 639 456
other payables 384 258
accruals and deferred income 926 1121
payments on account 300 –
4380 3870
18  provisions
2008
total
£000
at 1 january 2008 142
additional provision in the year 46
release of provision in the year 44
utilisation of provision 30
at 31 december 2008 114
all of the above amounts relate to warranties and are included within current liabilities
the warranty provisions relate to the process plant manufacturing operation standard warranty terms are one to two years
a n n u a l r e p o r t 20 0 8 37 notes to the group financial statements continued
19   current tax liabilities
2008 2007
£000 £000
uk corporation tax 471 538
foreign tax 182 144
653 682
20  noncurrent other financial liabilities
2008 2007
£000 £000
bank loans secured 550 750
other loans 1370 540
finance leases and hire purchase secured 80 41
2000 1331
the currency distribution of noncurrent financial liabilities at 31 december was as follows
2008 2007
£000 £000
sterling 672 773
us dollars 104 75
hong kong dollars 872 446
australian dollars 352 34
other currencies – 3
2000 1331
maturity of debt loans  overdrafts finance leases
2008 2007 2008 2007
£000 £000 £000 £000
in one year or less 426 645 65 31
in more than one year but not more than two years 1477 807 52 25
in more than two years but not more than five years 517 666 31 17
2420 2118 148 73
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 interest on the bank overdraft is payable at 2 above bank base rate
the above analysis assumes no movement in base rate
w w w n o r m a n h ay co m 38 21  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
2008 2008 2008
£000 £000 £000
at 1 january 2008 180 36 144
credit to income statement 3 23 26
acquired with subsidiary – 90 90
other movements – 214 214
at 31 december 2008 177 245 422
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
the majority of the other movements of £214000 relates to deferred tax on intangible assets and on the withdrawal of
industrial buildings allowances
accelerated
capital temporary
allowances differences
2007 2007 2007
£000 £000 £000
at 1 january 2007 178 32 146
charge to income statement 14 4 18
disposal of subsidiary 15 – 15
charged to equity 1–1
at 31 december 2007 180 36 144
22 obligations under finance leases
present value of
amounts payable under finance leases minimum lease payments minimum lease payments
2008 2007 2008 2007
£000 £000 £000 £000
within one year 65 31 61 30
in the second to the fifth year inclusive 84 42 72 36
149 73 133 66
less future finance charges 16 7 – –
present value of lease obligations 133 66 133 66
less amount due for settlement within 12 months
shown under current liabilities 53 25
amount due for settlement after 12 months 80 41
a n n u a l r e p o r t 20 0 8 39 notes to the group financial statements continued
23  total commitments under operating leases
land and buildings plant
2008 2007 2008 2007
£000 £000 £000 £000
payable in one year 449 74 152 90
payable in two to five years 1077 386 263 84
payable after five years 1624 1718 – –
3150 2178 415 174
24  share capital
2008 2007
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 14812 1481
at 31 december 2008 266282 shares were held by the norman hay plc employee benefit trust 2007 266282
at 31 december 2008 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
w w w n o r m a n h ay co m 40 25  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 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 1 january 2008 1481 1254 94 766 322 26 36 6475 9810 171 9981
share scheme charge –– –– – 17 –– 17 – 17
minority interest in subsidiary
incorporated –– –– –– –– – 197 197
minority interest in subsidiary
acquired –– –– –– –– – 26 26
retained profit for the year –– –– –– – 1562 1562 9 1553
dividends paid in year –– –– –– – 669 669 – 669
deferred tax in respect of share 
options –– –– –– –4 4– 4
exchange translation differences 
on consolidation –– –– –– 736 – 736 13 723
at 31 december 2008 1481 1254 94 766 322 43 772 7372 11460 320 11780
notes
1 share capital represents the nominal value of shares in issue
2 the share premium account represents the difference between the amount paid by shareholders subscribing for new
shares and the nominal value of those shares
3 the capital redemption reserve relates to purchases by the company of its own shares
4 other nondistributable reserve arises from elimination of share capital of acquired companies in excess of nominal
value of shares issued
5 reserve for own shares is the sum paid for shares held by the company’s long term incentive plan
6 the share scheme reserve represents the fair value of share options granted
7 the foreign exchange reserve arises from fluctuations in the value of net assets denominated in currencies other 
than sterling
8 retained earnings is the accumulated distributable profits of the norman hay plc group of companies
9 minority interests represents the interests of the minority shareholders in subsidiaries of the group
a n n u a l r e p o r t 20 0 8 41 notes to the group financial statements continued
26  acquisitions
on 17 july 2008 surface technology plc a trading subsidiary of norman hay plc acquired the trade and assets of advanced
surface treatments limited ast ast operates highly automated plating lines which permit greater production throughput
than the plating lines that surface technology plc previously operated
it has not been possible to disclose the revenue and profit of the group had the acquisition of ast occurred on 1 january 2008
surface technology plc acquired the assets of ast and as a consequence the financial information regarding the trading activities
prior to the acquisition date of 17 july 2008 is not available and the management of the group cannot obtain this information
the following net assets were acquired
book and
fair value
£000
non current assets
property plant and equipment 424
current assets 343
current liabilities 846
deferred tax liability 90
net liabilities acquired 169
cash consideration receivable 400
net liabilities acquired 169
negative goodwill arising on acquisition 231
the net cash sum expended in the current year on the acquisition was as follows
£000
cash received as consideration 100
net cash acquired on acquisition 310
210
in addition to the consideration received above a further £300000 is due during 2009 of this £100000 was received in april
the remaining £200000 is overdue but there are measures in place to ensure that this outstanding amount is collected and as
a consequence the directors remain confident that the £200000 will be received
the negative goodwill arising upon the acquisition has been recognised in the income statement within administrative
expenses
in november 2007 surface technology plc a trading subsidiary of norman hay plc acquired the entire share capital of hitech
coatings pty ltd the initial consideration was £380000 and an additional amount of £156000 has been treated as deferred 
in the year ended 31 december 2008 no assessment of the deferred consideration was made in the prior year financial
statements due to the proximity of the acquisition to the year end
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  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
w w w n o r m a n h ay co m 42 26  acquisitions continued
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
consideration including costs on acquisition of £25000 561
net assets acquired 156
goodwill arising on acquisition 405
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 during the year ended 31 december 2007 £101000 was paid to purchase the remaining minority shareholding in
applied precision coatings limited
27  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 a scheme a pension charge of £425000
2007 £302000 represents the contribution payable by the group to those schemes
28  related party transactions
remuneration of key management personnel 2008 2007
directors’ remuneration consists of £000 £000
aggregate emoluments 396 473
pension contributions 91 36
gain on exercise of share options – 114
fees 74 51
561 674
the highest paid director had a salary of £206000 2007 £251000 including performance related pay benefits in kind and a
pension contribution of £38000 2007 £25000
the company contributed £91000 2007 £36000 towards the personal pension plans of two directors 2007 two including
the highest paid director
the share option expense in respect of key management personnel was £17000 2007 £17000
a n n u a l r e p o r t 20 0 8 43 notes to the group financial statements continued
29  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
2008 2008 2007 2007
weighted weighted
average average
exercise exercise
pence number pence number
outstanding at the beginning of the year 69 1330000 63 1617750
exercised during the year –– 39 287750
69 1330000 69 1330000
the exercise price of options outstanding at the end of the year was 69p 2007 69p
there were no options exercisable at the year end
the group did not enter into any sharebased payment transactions with parties other than employees during the current 
or previous period
details of all outstanding share options are disclosed in the report of the directors including periods over which they 
are exercisable
30  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
financial assets
loans and receivables – these comprise trade and other receivables and positive cash balances held at financial institutions
financial liabilities
trade and other payables
bank borrowings and other loans
w w w n o r m a n h ay co m 44 30  financial instruments – risk management continued
the group is exposed through its operations to the following financial risks
credit risk
fair value and 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 by obtaining reports from external credit agencies these
credit ratings are taken into account by the group
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 permitted 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 institutions all such deposits are
made with reputable banks quantitative disclosures of the credit risk exposure in relation to trade and other receivables are
disclosed in note 14
the maximum exposure to credit risk at 31 december 2008 is £8218000 31 december 2007 £7575000
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 2008 and 2007 the group’s
borrowings at variable rate were denominated in sterling hong kong dollars and australian dollars on the sterling borrowings
interest is payable at 2 above bank base rate whilst for the borrowings denominated in hong kong dollars and australian
dollars interest is payable at 125 above bank base rate
at 31 december 2008 if interest rates on the group’s borrowings had been 100 basis points higher with all other variables held
constant the effect on profit before taxation would have been an increase in the charge of £12000 2007 £34000 a reduction
of 100 basis points would have had an equal and opposite effect
a n n u a l r e p o r t 20 0 8 45 notes to the group financial statements continued
30  financial instruments – risk management continued
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 to ensure that all intergroup current accounts are settled within 30 days of a sale occurring thus
minimising the effects of currency fluctuations
the effect of a strengthening of 10 in the rate of exchange in the currencies against sterling at the balance sheet date would
have resulted in an estimated net increase in pretax profit and an increase in net assets of £29000 2007 £15000 and the
effect of a weakening of 10 in the rate of exchange in the currencies against sterling at the balance sheet date would have
resulted in an estimated net decrease in pretax profit for the year and a decrease in net assets of approximately £31000 2007
£17000
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 2008 the group had unused facilities of £1312000 2007 £1249000
the annual working capital facility of £1500000 was renewed on 26 march 2009 and a facility for a further £900000 was
granted on 15 april 2009 after the group secured a major contract with messier services uk
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 and where the amount of the facility is above a
certain level agreement of the board is needed
capital management
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 the
reduction of debt and the management of loans between group companies the group considers not only its shortterm position
but also its longterm operational and strategic objectives
w w w n o r m a n h ay co m 46 2008 2007
note £000 £000 £000 £000
fixed assets
tangible assets 6 2529 2844
investments 7 13165 13165
15694 16009
current assets
debtors 8 2215 1205
cash at bank and in hand 2 1
2217 12063
creditors due within one year 9 3193 3032
net current liabilities 976 1826
total assets less current liabilities 14718 14183
creditors due after one year 10 8160 8244
provision for liabilities 11 40 50
8200 8294
net assets 6518 5889
capital and reserves
equity share capital 12 1481 1481
share premium account 13 1253 1253
revaluation reserve 13 524 531
capital redemption reserve 13 94 94
share scheme reserve 13 43 26
profit and loss account 13 3123 2504
shareholders’ funds 6518 5889
the financial statements were approved and authorised for issue by the board on 27 may 2009
victor p bellanti
director
the notes shown on pages 48 to 54 form part of these financial statements
parent company balance sheet
prepared in accordance with uk gaap
at 31 december 2008
a n n u a l r e p o r t 20 0 8 47 notes to the financial statements of
the parent company
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 united kingdom accounting standards and the companies act 1985
2  summary of significant accounting policies
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
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 the 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
w w w n o r m a n h ay co m 48 2  summary of significant accounting policies continued
financial instruments
financial instruments are measured initially and subsequently at cost
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
2008 2007
number number
the average number of employees during the year including executive directors comprised
office and management 7 6
£000 £000
staff costs during the year including executive directors amounted to
wages and salaries 610 582
social security costs 72 91
other pension costs 131 115
813 788
directors’ remuneration consists of
aggregate emoluments 396 473
pension contributions 91 36
gain on exercise of share options – 114
fees 74 51
561 674
the highest paid director had a salary of £206000 2007 £251000 including performance related pay benefits in kind and 
a pension contribution of £38000 2007 £25000
the company contributed £91000 2007 £36000 towards the personal pension plans of two directors 2007 two including
the highest paid director
a n n u a l r e p o r t 20 0 8 49 notes to the financial statements of
the parent company continued
4  dividends
2008 2007
£000 £000
final dividend paid of 26p 2007 20p per share 378 293
interim dividend paid of 20p 2007 18p per share 291 261
669 554
dividends declared after the balance sheet date but before approval of
financial statements of 20p 2007 26p per share 291 378
dividends are recognised in the financial statements when they are paid and not declared the 2008 financial statements
recognised the interim dividend that was both paid and declared in 2008 and also the final dividend that was paid in 2008 
but declared in the prior year financial statements for the year ended 31 december 2007
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 £1281000 2007 £551000 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 2008 3293 86 29 3408
disposals 377 –– 377
at 31 december 2008 2916 86 29 3031
depreciation
at 1 january 2008 501 41 22 564
provided during the year 25 14 5 44
disposals 106 –– 106
at 31 december 2008 420 55 27 502
net book value
at 31 december 2008 2496 31 2 2529
at 31 december 2007 2792 45 7 2844
2008 2007
freehold land and buildings included at £000 £000
open market value on 16 november 1992 2850 2850
cost 66 443
2916 3293
the historical balances of freehold land and buildings are
cost 2321 2698
accumulated depreciation 349 440
1972 2258
w w w n o r m a n h ay co m 50 7  investments
£000
other investments
cost 13165
at 1 january 2008 and at 31 december 2008
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 75 effluent treatment systems
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 chemicals for the
construction industry
tam international hong kong ltd  china 75 supply of chemicals for the construction industry
tam international singapore pte ltd singapore 75 supply of chemicals for the construction industry 
tam international australia pty ltd australia 75 manufacture and supply of chemicals for the
construction industry
tam international taiwan co ltd taiwan 49 manufacture and supply of chemicals for the
tunnelling and mining industry
advanced surface treatments ltd england 100 surface engineering and finishing of metals
armourcote malaysia sdn bhd malaysia 100 surface engineering and finishing of metals
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 tam international taiwan co limited is controlled by norman hay
plc by virtue of norman hay plc’s controlling interest in tam international group holdings limited
a n n u a l r e p o r t 20 0 8 51 notes to the financial statements of
the parent company continued
8  debtors
2008 2007
£000 £000
trade debtors 46 57
amount owed by subsidiaries 2099 1124
other debtors 36 5
prepayments and accrued income 34 19
2215 1205
all amounts included in debtors are receivable within one year
9  creditors due within one year
2008 2007
£000 £000
bank overdraft and loans secured 2771 2557
trade creditors 103 68
amounts owed to subsidiaries 138 184
taxation and social security costs 24 80
other creditors – 25
accruals and deferred income 107 54
corporation tax 50 64
3193 3032
the bank overdraft and loans are secured over certain of the group’s assets and undertakings
10  creditors due after one year
2008 2007
£000 £000
bank loans secured 550 750
amounts owed to subsidiaries 7610 7494
8160 8244
loans and overdrafts are repayable as follows
in one year or less 2771 2557
in more than one year but not more than two years 550 750
3321 3307
w w w n o r m a n h ay co m 52 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
2008
£000
at 1 january 2008 50
credit to profit and loss account 10
at 31 december 2008 40
12  share capital
at 31 december 2008 at 31 december 2007
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 14812 1481
details of movement in share capital can be found in note 25 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 2008 1481 1253 531 94 26 2504 5889
share scheme charge ––– – 17 – 17
movement in reserves –– 7 ––7 –
retained profit for the year ––– –– 1281 1281
dividends paid in year ––– –– 669 669
at 31 december 2008 1481 1253 524 94 43 3123 6518
14  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
15  contingent liabilities
the company had outstanding guarantees in respect of subsidiary undertakings amounting to £205000 at 31 december 2008
2007 £84000
16  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
a n n u a l r e p o r t 20 0 8 53 17  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
2008 2008 2007 2007
weighted weighted
average average
exercise exercise
pence number pence number
outstanding at the beginning of the year 69 1330000 63 1617750
exercised during the year –– 39 287750
69 1330000 69 1330000
the exercise price of options outstanding at the end of the year was 69p 2007 69p
there were no options exercisable at the year end
details of all outstanding share options are disclosed in the report of the directors including periods over which they 
are exercisable
w w w n o r m a n h ay co m 54
notes to the financial statements of
the parent company continued notice is hereby given that the sixty third annual general meeting of the company will be held at norman hay plc 
godiva place coventry on 24 june 2009 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 2008
2 to declare a final dividend for the year ended 31 december 2008
3 to reelect as a director mr david miller 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 2010
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 18 june 2008 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 2010 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
registered office by order of the board
godiva place brigid m cattle
coventry cv1 5pn 27 may 2009
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 22 june 2009 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
a n n u a l r e p o r t 20 0 8 55 shareholder’ s notes
w w w n o r m a n h ay co m 56 advisers
secretary and registered office
brigid m cattle
godiva place
coventry  cv1 5pn
registered number 405025
independent 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
1st floor 34 south gyle crescent
south gyle business park
edinburgh  eh12 9eb
nominated adviser and broker
brewin dolphin securities limited
po box 512
national house
36 st ann street
manchester  m60 2ep
financial marketing
haggie financial llp
10 fenchurch avenue
london  ec3m 5bn
the environment
the group recognises the importance of corporate social
responsibility and continues its development in this area 
the group’s approach is to develop a culture of good corporate
citizenship as seen in its actions and activities norman hay plc
godiva place
coventry
cv1 5pn
t  44 0 24 7622 9373
f 44 0 24 7622 4420
e infonormanhay com
y p p
wwwnormanhaycom


Summary:
 a n n u a l r e p o r t 20 0 8 1
pretax profits increased to £24m 2007 £23m 
revenue up to £27m 2007 £24m 
final dividend for the year of 20p making the total
for the full year 40p 2007 44p
net asset value per share increased by 17 to 81p 2007 69p 
financial highlights 2008