17666	 18052010	 proof	6 17666	 18052010	 proof	6
specialist chemicals and systems
norman hay plc
godiva place
coventry
cv1 5pn
t  44 0 24 7622 937 3
f 44 0 24 7622 4420
e infonormanhay com
www normanhay com
2 0 0 9
annual report and accounts
annual report and accounts 2009 norman hay plc 17666	 18052010	 proof	6 17666	 18052010	 proof	6
w elc ome
norman hay plc is one of the world’s leading specialist 
chemical and systems suppliers to the aerospace 
automotive oil  gas and construction industries 
our advanced products are designed to enable our 
customers to maximise the reliability and operating 
performance of their components and materials
our year in brief 1
introduction – our businesses 2
chairman’s statement 4
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 statement of  
comprehensive income 16
consolidated statement of  
financial position 17
consolidated cash flow statement 18
consolidated statement of  
changes in equity 19
notes to the group financial statements 20
parent company balance sheet 46
notes to the financial statements of 
the parent company 47
notice of meeting 55
advisers inside back cover
contents
secretary and registered office
brigid m cattle
godiva place
coventry  
cv1 5pn
registered number 405025
independent auditors
bdo 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
4 sun court
66–67 cornhill
london 
ec3v 3nb 
we take our responsibilities seriously and work continuously  
to improve our environmental performance 
 
advisers
the environment matters 17666	 20052010	 proof	10
page 1
our y ear in brief
	 continued 	 profitability	 in	 difficult	 conditions
	 pretax 	 profits	 £09m	 2008	 £24m
	 revenue 	 £262m	 2008	 £27m
	 international 	 revenue	 51	 2008	 48
	 cash 	 generated	 from	 operations	 £18m	 2008	 £11m
	 increased 	 dividend	 for	 the	 year	 of	 43p	 2008	 40p 17666	 20052010	 proof	10
page 2
2009
annual report and accounts
page 2
the norman hay group of companies has 
operations across five continents with 
distributors agents and resellers in over 
25 countries
as	 a	 leading	 specialist	 chemicals	 and	 systems	
group	 our	 diverse	 and	 global	 operations	
enable	 us	 to	 take	 advantage	 of	 opportunities	
in	 developing	 economies	 and	 markets
the	 depth	 and	 breadth	 of	 our	 people’s	
experience	 has	 been	 key	 in	 partnering	 with	
prestigious	 customers	 such	 as	 rollsroyce	
bae	 systems	 and	 the	 bmw	 group
we	 maintain	 our	 market	 leading	 status	
by	 pursuing	 new	 initiatives	 adapting	 to	
emerging	 markets	 and	 strengthening	
the	 world	 class	 brands	 of	 our	 productled	
businesses
surface coatings 
we specialise in 
modifying component 
surfaces to operate in 
harsh environments   
we coat products to 
assist surface release 
friction control and 
corrosion protection 
impregnation sealants
we provide permanent 
solutions to porosity 
in materials especially 
metal castings
we seal materials to 
improve our customers’ 
component quality and 
performance 
construction chemicals   
we provide chemicals 
for all aspects 
of underground 
construction  
we provide chemicals 
for water sealing 
bonding ground 
stabilisation grouting 
coating and repairing  
chemical process plant    
we design build 
and commission 
impregnation and 
surface treatment 
process plant and 
equipment 
we operate and manage 
inhouse impregnation 
and surface treatment 
plants at our customers’ 
premises
introduction – our businesses 
strength through global diversity and people
what our products do 17666	 20052010	 proof	10
page 3
£66m
plasticraft	 part	 of	 the	 norman	 hay	
chemical	 engineering	 division	 secured	
a	 £66m	 contract	 from	 rollsroyce	 in	
2009	 for	 process	 plant	 and	 equipment	
to	 be	 installed	 in	 singapore
as	 the	 uk’s	 foremost	 supplier	 of	
surface	 treatment	 equipment	 to	
the	 global	 aerospace	 sector	 this	
prestigious	 contract	 is	 for	 the	 supply	
of	 ten	 chemical	 process	 lines	 for	
the	 manufacture	 of	 aeroengine	
components 17666	 20052010	 proof	10
page 4
2009
annual report and accounts
page 4
chairman ’ s statement
i	 am	 delighted	 to	 announce	 that	 following	
a	 challenging	 first	 half	 the	 norman	 hay	
group	 saw	 a	 significant	 recovery	 in	 the	
second	 half	 of	 2009
we	 view	 our	 pretax	 profit	 for	 the	 year	 as	 an	 extremely	
satisfactory	 result
our	 full	 year	 result	 includes	 profit	 on	 the	 disposal	 of	 the	
remaining	 wet	 processing	 operations	 on	 our	 coventry	
city	 centre	 site	 as	 reported	 in	 our	 interim	 statement	
this	 is	 a	 profit	 on	 sale	 of	 £862000	 on	 a	 deferred	
consideration	 basis	 after	 taking	 into	 account	 the	 direct	
costs	 of	 the	 disposal
the	 cost	 reduction	 programme	 we	 undertook	 in	 the	 first	
half	 of	 2009	 mitigated	 the	 effects	 of	 a	 downturn	 in	 global	
trading	 additionally	 revenue	 in	 the	 second	 half	 rose	 by	
11	 compared	 to	 the	 first	 half
our	 exposure	 to	 the	 economic	 downturn	 in	 the	 uk	
was	 limited	 by	 the	 international	 diversification	 of	 our	
productled	 businesses	 in	 addition	 our	 impregnation	
sealants	 and	 construction	 chemicals	 companies	 now	
generate	 the	 majority	 of	 their	 business	 overseas	 as	 will	
the	 engineering	 business	 in	 2010	 and	 2011
our	 surface	 coatings	 division	 in	 which	 most	 business	
units	 are	 ukbased	 requires	 its	 operations	 to	 be	 sited	
geographically	 close	 to	 its	 customers	 because	 of	 the	
subcontract	 nature	 of	 its	 business	 it	 has	 therefore	 been	
significantly	 affected	 by	 the	 severe	 downturn	 in	 uk	
manufacturing	
however	 we	 have	 successfully	 won	 business	 from	
competitors	 who	 have	 struggled	 in	 the	 recent	 financial	
climate	
also	 following	 the	 successful	 example	 of	 our	 overseas	
productbased	 divisions	 we	 are	 in	 the	 process	 of	 building	
an	 international	 market	 for	 our	 subcontract	 coatings	
businesses	 with	 operations	 recently	 opening	 up	 and	
developing	 in	 malaysia	 australia	 and	 mainland	 china
dividends
a	 second	 interim	 dividend	 for	 the	 year	 of	 23p	
announced	 on	 2	 march	 2010	 was	 paid	 to	 shareholders	
on	 26	 march	 2010	 in	 place	 of	 a	 final	 dividend	 for	 the	 year	
making	 the	 total	 for	 the	 full	 year	 43p	 2008	 40p
it	 is	 intended	 that	 future	 dividend	 payments	 will	 be	 paid	
in	 line	 with	 the	 normal	 dividend	 schedule
business overview 
ultraseal	 –	 impregnation	 sealants	
despite	 the	 challenges	 facing	 the	 global	 automotive	
industry	 ultraseal	 international	 was	 the	 largest	
contributor	 to	 group	 profits	 during	 the	 year
the	 main	 effect	 of	 the	 downturn	 in	 general	 for	 this	 sector	
was	 the	 cancellation	 or	 delay	 of	 major	 projects	 this	
resulted	 in	 a	 very	 low	 order	 book	 for	 capital	 equipment	
although	 consumable	 sealant	 sales	 were	 affected	 to	 a	
lesser	 degree
despite	 this	 the	 business	 still	 managed	 to	 trade	
profitably	 in	 the	 first	 half	 of	 the	 year	 and	 saw	 an	
excellent	 recovery	 in	 the	 second	 half	 as	 demand	
began	 to	 recover	 in	 the	 usa	 also	 chinese	 automotive	
manufacturing	 returned	 to	 significant	 levels	 of	
production	 which	 is	 particularly	 positive	 for	 our	
operation	 in	 shanghai	
we	 expect	 these	 trends	 to	 continue	 in	 2010
armourcote –	 surface	 coatings
overall	 the	 second	 half	 of	 2009	 was	 less	 profitable	 than	
the	 first	 half	 as	 a	 result	 of	 weakened	 demand	 from	 the	 oil	
	 gas	 sector	 as	 many	 major	 projects	 were	 delayed
our	 hitech	 coatings	 operation	 in	 perth	 western	
australia	 reported	 a	 small	 loss	 for	 the	 year	 this	 was	
primarily	 due	 to	 the	 costs	 associated	 with	 a	 management	
restructure	 in	 2009	 and	 trading	 in	 the	 first	 quarter	 of	
2010	 has	 been	 encouraging	
our	 operation	 in	 port	 klang	 malaysia	 which	 we	 opened	
in	 late	 2007	 has	 seen	 a	 great	 improvement	 year	 on	 year	
and	 will	 benefit	 from	 new	 levels	 of	 capital	 investment	 in	
the	 oil	 extraction	 industries	 in	 that	 region
both	 our	 australian	 and	 malaysian	 coating	 facilities	
are	 now	 accredited	 to	 iso	 90012008	 and	 iso	 14001	
which	 are	 important	 factors	 in	 our	 relationship	 with	
multinational	 suppliers	 to	 the	 oil	 	 gas	 industry	
we	 are	 generally	 the	 preferred	 supplier	 of	 the	 advanced	
surface	 coatings	 used	 by	 the	 oil	 	 gas	 industry	 to	 protect	
the	 sophisticated	 drilling	 production	 and	 transmission	
equipment	 utilised	 to	 harvest	 hydrocarbons	 from	 all	 over	
the	 world	 in	 the	 harshest	 of	 conditions	 and	 extremes	 of	
climate
our	 automotive	 surface	 coatings	 business	 in	 the	 uk	 also	
suffered	 in	 the	 downturn	 despite	 having	 centralised	 all	
zinc	 and	 alloy	 electroplating	 onto	 one	 site	 in	 coventry	
during	 2008	 the	 conditions	 in	 uk	 manufacturing	 proved	
to	 be	 so	 severe	 that	 we	 continued	 to	 suffer	 significant	
operating	 losses	 in	 the	 business
we	 undertook	 a	 substantial	 restructure	 and	 cost	
reduction	 programme	 at	 our	 coventry	 operation	 in	 2009	
and	 the	 unit	 is	 trading	 considerably	 better	 than	 at	 this	
time	 last	 year	
astec	 dalian	 in	 eastern	 china	 performed	 well	 and	
profitably	 in	 2009	 the	 future	 for	 this	 business	 looks	
promising	 on	 the	 back	 of	 a	 recovering	 us	 automotive	
market	 and	 the	 continuing	 expansion	 of	 the	 chinese	
domestic	 automotive	 market
we have successfully won business 
from competitors who have struggled 
in the recent financial climate
“
” 17666	 20052010	 proof	10
page 5
2009
annual report and accounts
tam international	 –	 construction	 chemicals	
we	 have	 made	 significant	 progress	 in	 developing	 our	
construction	 chemicals	 business	 in	 the	 three	 years	 that	
we	 have	 controlled	 tam	
during	 that	 time	 we	 have	 built	 tam	 into	 a	 wellrespected	
brand	 leader	 in	 construction	 chemicals	 and	 broadened	 its	
potential	 marketplace	 with	 the	 creation	 of	 a	 tunneling	 	
mining	 division	 this	 now	 supplies	 our	 niche	 products	 to	
many	 of	 the	 major	 underground	 projects	 in	 the	 regions	
where	 we	 already	 have	 sales	 or	 manufacturing	 operations	
the	 business	 performed	 better	 in	 the	 second	 half	 of	 the	 year	
although	 not	 all	 locations	 are	 yet	 profitable	 at	 the	 operating	
level	 this	 is	 a	 result	 of	 major	 infrastructure	 projects	 being	
delayed	 in	 hong	 kong	 and	 taiwan	 and	 difficult	 economic	
conditions	 continuing	 to	 prevail	 in	 the	 uk
australia	 was	 less	 affected	 by	 the	 global	 economic	
recession	 and	 this	 coupled	 with	 strengthening	 the	
management	 team	 saw	 the	 tam	 australia	 business	
return	 to	 profit	 in	 the	 year
norman hay engineering	 –	 chemical	 process	 plant
following	 a	 strong	 performance	 in	 2009	 with	 continuing	
profitability	 the	 year	 ended	 with	 a	 record	 order	 book	
which	 will	 provide	 substantial	 growth	 for	 the	 business	
during	 2010	 and	 2011
as	 a	 manufacturer	 of	 bespoke	 process	 plants	 primarily	
for	 the	 aerospace	 and	 automotive	 markets	 our	 chemical	
engineering	 group	 combines	 elements	 of	 both	 service
related	 and	 productled	 businesses
as	 such	 we	 have	 been	 able	 to	 develop	 the	 business	
internationally	 with	 the	 majority	 of	 plant	 installations	 in	
the	 next	 two	 years	 being	 outside	 of	 the	 uk	 this	 makes	
norman	 hay	 engineering	 the	 latest	 of	 our	 businesses	 to	
benefit	 from	 our	 expansion	 into	 international	 markets
during	 2009	 we	 were	 awarded	 a	 number	 of	 significant	
overseas	 contracts
 in	 march	 we	 were	 selected	 to	 supply	 and	 install	 a	
large	 repair	 and	 overhaul	 facility	 for	 aircraft	 landing	
gear	 in	 saudi	 arabia
 in	 may	 we	 secured	 a	 major	 contract	 in	 turkey	 for	
an	 ndt	 booth	 system	 to	 carry	 out	 dye	 penetrant	
application	 and	 inspection	 at	 the	 critical	 stage	 in	 the	
repair	 and	 overhaul	 of	 aircraft	 engines
 in	 december	 we	 were	 proud	 to	 be	 awarded	 our	
largest	 ever	 single	 contract	 –	 an	 order	 from	
rollsroyce	 for	 process	 plant	 and	 equipment	 to	
be	 installed	 in	 singapore	 during	 2011
staff
i	 would	 like	 to	 pay	 tribute	 to	 all	 of	 our	 group	 staff	 who	
have	 been	 operating	 under	 considerable	 pressure	 while	
our	 businesses	 have	 been	 adjusting	 to	 changing	 world	
economic	 conditions	
their	 professionalism	 dedication	 and	 flexibility	 has	
been	 instrumental	 in	 recovering	 the	 group’s	 operating	
profitability	 in	 a	 short	 period	 of	 time
o u tlook
in	 last	 year’s	 annual	 statement	 i	 said	 that	
our	 efforts	 were	 being	 carefully	 targeted	 at	
our	 most	 significant	 sales	 opportunities	
tam	 international	 our	 construction	
chemicals	 division	 has	 been	 working	
closely	 in	 2009	 with	 the	 normet	 group	
manufacturers	 of	 specialist	 underground	
construction	 machinery	 this	 cooperation	
has	 led	 to	 a	 e62	 million	 machinery	 deal	 in	
hong	 kong	 combined	 with	 the	 supply	 of	
construction	 chemicals	 a	 similar	 deal	 has	
also	 been	 arranged	 in	 taiwan	 and	 we	 plan	 to	
build	 further	 on	 this	 successful	 partnership	
in	 other	 markets	
the	 synergies	 between	 tam	 and	 normet	 led	
to	 the	 formation	 of	 a	 global	 partnership	 in	
april	 2010	 with	 normet	 acquiring	 40	 of	
the	 issued	 share	 capital	 of	 tam	 normet’s	
global	 reach	 and	 expertise	 will	 enable	 us	 to	
rapidly	 expand	 tam’s	 client	 base	 we	 believe	
this	 significant	 move	 will	 be	 beneficial	 for	
the	 group	 our	 clients	 and	 our	 shareholders	
we	 are	 particularly	 pleased	 with	 the	
progress	 and	 prospects	 for	 our	 ultraseal	 and	
armourcote	 businesses	 as	 the	 market	 in	
mainland	 china	 continues	 to	 pick	 up	
i	 expect	 that	 the	 group’s	 trading	
performance	 will	 continue	 to	 improve	
and	 will	 be	 further	 enhanced	 as	 the	 world	
economy	 returns	 to	 growth
peter l hay
chairman
19	 may	 2010 2009
annual report and accounts
17666	 20052010	 proof	10
page 6
£40m
in	 q1	 2009	 we	 successfully	 secured	 a	
£4m	 contract	 for	 an	 aerospace	 process	
facility	 to	 be	 installed	 in	 the	 kingdom	
of	 saudi	 arabia
the	 new	 chemical	 processing	 shop	 for	
messier	 services	 is	 for	 the	 repair	 and	
overhaul	 of	 aircraft	 landing	 gears	 for	
both	 narrow	 and	 wide	 bodied	 aircraft
this	 turnkey	 project	 includes	 all	 process	
tanks	 and	 solution	 conditioning	
equipment	 material	 handling	 and	
effluent	 treatment	 systems	 as	 well	 as	
providing	 ongoing	 service	 support 2009
annual report and accounts
17666	 20052010	 proof	10
page 7
introduction
2009	 turned	 out	 to	 be	 a	 challenging	 year	 for	 the	 global	
economy	 with	 many	 sectors	 affected	 by	 harsh	 trading	
conditions	 the	 markets	 in	 which	 norman	 hay	 operates	
were	 no	 exception	
the	 dramatic	 reduction	 in	 the	 automotive	 sector	 and	
reduced	 demand	 from	 the	 oil	 	 gas	 industries	 in	 the	
second	 half	 of	 the	 year	 had	 a	 significant	 impact	 on	
performance
however	 we	 responded	 swiftly	 and	 decisively	 to	 the	
worldwide	 economic	 downturn	 by	 restructuring	 and	
adjusting	 our	 plans	 to	 meet	 the	 changing	 operating	
environment	
underpinning	 this	 was	 a	 reduction	 of	 the	 cost	 base	 in	 our	
existing	 operations	 in	 order	 to	 reflect	 changed	 market	
conditions	 careful	 financial	 management	 within	 our	
businesses	 coupled	 with	 firm	 control	 of	 expenditure	 and	
group	 resources	 ensured	 that	 we	 were	 able	 to	 adjust	 to	
these	 demanding	 economic	 conditions	
these	 strong	 controls	 have	 also	 enabled	 us	 to	 continue	 to	
invest	 in	 new	 opportunities	 where	 they	 arise	 and	 whilst	
our	 recent	 investments	 have	 led	 to	 an	 increase	 in	 our	
overhead	 base	 these	 additional	 costs	 have	 been	 focused	
and	 tightly	 controlled
the	 majority	 of	 our	 operations	 were	 affected	 by	 the	
decline	 in	 world	 markets	 conditions	 started	 to	 ease	
during	 the	 second	 half	 of	 2009	 and	 this	 combined	 with	
the	 actions	 we	 had	 taken	 in	 the	 first	 half	 saw	 first	 half	
trading	 losses	 of	 £05m	 reversed	 to	 a	 trading	 profit	 of	
£04m	 in	 the	 second	 half
operations
norman	 hay	 provides	 products	 and	 services	 to	 customers	
across	 diverse	 markets	 and	 is	 focused	 on	 key	 global	
market	 sectors	 through	 its	 main	 brands
ultraseal –	 impregnation	 sealants 
ultraseal	 was	 particularly	 impacted	 by	 the	 decline	 in	 the	
automotive	 sector	 and	 first	 half	 results	 reflected	 the	
massive	 global	 decline	 in	 vehicle	 production	 that	 hit	 hard	
in	 the	 last	 quarter	 of	 2008	
in	 the	 first	 half	 of	 2009	 sales	 were	 down	 46	 on	 the	 first	
half	 of	 the	 previous	 year	 but	 the	 second	 half	 was	 much	
more	 encouraging	 with	 business	 beginning	 to	 recover	 to	
more	 normal	 levels	 in	 most	 markets
this	 rise	 in	 revenues	 in	 the	 second	 half	 of	 2009	 resulted	
in	 full	 year	 sales	 being	 down	 23	 on	 the	 previous	 year	 a	
marked	 improvement	 on	 the	 trend	 in	 the	 first	 half
in	 order	 to	 manage	 this	 decline	 in	 business	 careful	 cost
management	 plans	 were	 put	 in	 place	
in	 north	 america	 with	 automotive	 demand	 beginning	
to	 fall	 from	 midway	 through	 2008	 as	 the	 global	 recession	
made	 its	 mark	 we	 restructured	 our	 usa	 operation	 to	
help	 offset	 the	 lower	 levels	 of	 business	
automotive	 business	 in	 north	 america	 recovered	 in	 the	
latter	 part	 of	 2009	 reflecting	 wider	 economic	 conditions	
and	 this	 trend	 was	 repeated	 in	 europe	 and	 the	 asia
pacific	 region
ultraseal’s	 strategy	 of	 diversifying	 its	 operations	
geographically	 making	 it	 less	 dependent	 on	 western	
economies	 has	 certainly	 helped	 the	 business	 through	
this	 tumultuous	 period
we	 are	 cautiously	 optimistic	 for	 the	 business	 in	 2010	
as	 there	 are	 signs	 of	 a	 return	 to	 previous	 levels	 of	
automotive	 manufacturing	 it	 remains	 to	 be	 seen	 if	 this	
resurgence	 is	 sustainable	 but	 ultraseal	 international	
has	 focused	 and	 structured	 its	 worldwide	 operations	 to	
take	 advantage	 of	 any	 new	 opportunities	 that	 arise	 in	 its	
global	 markets	
chief executive ’ s business review
supplying high technology chemical 
systems combined with bespoke 
engineering solutions for the 
aerospace automotive oil  gas and 
construction industries around the 
world is proving to be an increasingly 
successful formula for the group
“
” 17666	 20052010	 proof	10
2009
annual report and accounts
page 8 page 8 page 8
chief executive ’ s business review continued
armourcote –	 surface	 coatings
armourcote	 serves	 a	 number	 of	 markets	 including	
automotive	 engineering	 and	 oil	 	 gas
the	 uk	 businesses	 focused	 on	 the	 automotive	 sector	
were	 significantly	 impacted	 by	 the	 recession	 this	
has	 only	 recently	 begun	 to	 abate	 albeit	 at	 a	 modest	
pace	 the	 largest	 reduction	 was	 in	 our	 coventry	 based	
electroplating	 operation	 which	 achieved	 only	 46	 of	 its	
expected	 revenue	
in	 october	 we	 acquired	 business	 from	 a	 competitor	
which	 has	 helped	 to	 reduce	 the	 coventry	 unit’s	
dependence	 on	 the	 uk	 automotive	 sector
also	 during	 the	 year	 the	 group	 disposed	 of	 its	 remaining	
wet	 processing	 operations	 on	 our	 main	 coventry	 site	
the	 consideration	 receivable	 from	 this	 disposal	 is	 based	
upon	 the	 future	 sales	 of	 the	 purchaser	 there	 is	 no	 set	
termination	 date	 for	 this	 agreement
the	 leeds	 east	 kilbride	 and	 irvine	 operations	 are	
predominantly	 focused	 on	 the	 oil	 	 gas	 markets	 these	
businesses	 performed	 strongly	 in	 the	 first	 half	 with	
turnover	 up	 8	 on	 the	 previous	 year	
however	 conditions	 slowed	 in	 the	 second	 half	 and	 the	
reduction	 in	 revenues	 has	 continued	 into	 2010
the	 impact	 of	 the	 recession	 on	 the	 overseas	 operations	
has	 been	 varied	 as	 follows
 the	 operation	 in	 port	 klang	 malaysia	 moved	 into	
profit	 in	 early	 2010	
 hitech	 coatings	 in	 perth	 western	 australia	 saw	
year	 on	 year	 revenue	 fall	 by	 18	 as	 a	 consequence	 of	
the	 decline	 in	 revenue	 a	 reduction	 in	 management	
overheads	 was	 undertaken	 to	 provide	 a	 lower	 cost	
base	 for	 the	 future
 astec	 dalian	 in	 eastern	 china	 where	 we	 manage	 and	
operate	 a	 customer’s	 inhouse	 zinc	 plating	 operation	
performed	 well	 and	 was	 profitable	 in	 2009	 volumes	
have	 increased	 considerably	 in	 recent	 months	 on	
the	 back	 of	 a	 recovery	 in	 the	 us	 automotive	 market	
and	 continuing	 expansion	 of	 the	 chinese	 domestic	
market	
	 we	 are	 currently	 exploring	 further	 opportunities	 to	
roll	 out	 this	 concept	 of	 managing	 our	 customers’	 in
house	 processing	 plants	 on	 a	 global	 basis
tam international	 –	 construction	 chemicals
tam	 has	 made	 significant	 progress	 since	 it	 became	 part	
of	 the	 norman	 hay	 group	 three	 years	 ago	 turnover	 grew	
by	 15	 in	 2009	 although	 this	 was	 below	 our	 forecasts	
delays	 in	 infrastructure	 projects	 in	 hong	 kong	 and	
taiwan	 have	 impacted	 profitability	 resulting	 in	 an	 overall	
loss	 for	 the	 year	
despite	 the	 global	 recession	 we	 have	 continued	 to	 invest	
in	 the	 geographical	 expansion	 of	 tam	 which	 included	
the	 setting	 up	 of	 a	 subsidiary	 in	 indonesia	 to	 service	 the	
large	 gold	 mining	 industry	 in	 the	 region	
in	 the	 latter	 part	 of	 2009	 tam	 international	 worked	 with	
normet	 a	 leader	 in	 the	 supply	 of	 equipment	 and	 vehicles	
for	 mining	 and	 underground	 construction	 which	 proved	
to	 be	 mutually	 beneficial	
as	 a	 consequence	 of	 this	 successful	 working	 relationship	
we	 have	 now	 formed	 a	 strategic	 alliance	 with	 normet	
who	 in	 april	 2010	 purchased	 30	 of	 norman	 hay’s	
interest	 in	 tam’s	 issued	 share	 capital	 for	 £24m	 with	
the	 possibility	 that	 normet	 can	 at	 their	 option	 acquire	
100	 of	 the	 share	 capital	 in	 2014	 the	 consideration	 for	
this	 would	 be	 based	 upon	 a	 multiple	 of	 six	 times	 profit	 of	
the	 business	 in	 the	 year	 immediately	 preceding	 the	 sale	
under	 the	 call	 option	 the	 minimum	 amount	 due	 for	 the	
remainder	 of	 norman	 hay’s	 equity	 in	 tam	 is	 £51m	 and	
the	 maximum	 is	 £1425m
the	 terms	 of	 this	 transaction	 mean	 that	 from	 the	 date	 of	
the	 initial	 sale	 tam	 will	 no	 longer	 be	 accounted	 for	 as	 a	
subsidiary
the	 partnership	 brings	 together	 the	 construction	
chemical	 consumables	 of	 tam	 with	 the	 international	
manufacture	 and	 enhanced	 distribution	 of	 normet’s	
application	 hardware	 both	 companies	 share	 a	 common	
global	 marketplace	 in	 construction	 solutions	 for	
waterproofing	 injection	 and	 repair	 of	 structures	 together	
with	 major	 construction	 projects	 in	 civil	 engineering	
tunneling	 and	 mining	 and	 we	 believe	 that	 this	 will	
considerably	 strengthen	 both	 of	 our	 companies	
this	 new	 partnership	 should	 help	 to	 accelerate	 the	
growth	 of	 the	 tam	 business	 and	 we	 look	 forward	 to	 a	
successful	 working	 alliance	 with	 normet
norman hay’s position is strong and 
the actions we have taken to improve 
efficiency and diversify in to growth 
markets will leave us well placed to 
benefit from economic recovery
“
” 17666	 20052010	 proof	10
page 9
2009
annual report and accounts
norman hay engineering –	 chemical	 process	 plant
2009	 was	 a	 very	 successful	 year	 for	 norman	 hay	
engineering	 with	 a	 record	 value	 of	 orders	 received	 for	
its	 plasticraft	 and	 ardrox	 branded	 chemical	 process	
equipment	
during	 the	 year	 we	 have	 continued	 to	 build	 and	 develop	
the	 company’s	 reputation	 as	 a	 major	 supplier	 to	 the	
world’s	 aerospace	 market
the	 majority	 of	 equipment	 is	 utilised	 in	 the	 aerospace	
industry’s	 original	 equipment	 manufacture	 oem	 and	
maintenance	 repair	 and	 overhaul	 mro	 operations	 two	
major	 contracts	 in	 each	 sector	 formed	 the	 basis	 for	 the	
2009	 success
through	 the	 company’s	 achievements	 in	 the	 year	
norman	 hay	 engineering	 has	 secured	 a	 record	 order	
book	 for	 2010	 including	 projects	 in	 saudi	 arabia	 and	
singapore	
this	 provides	 us	 with	 an	 enviable	 position	 of	 continuity	
and	 stability	 throughout	 2010	 and	 2011	 this	 will	 	
enable	 the	 business	 to	 continue	 to	 strengthen	 as	 a	
leading	 player	 in	 the	 uk	 and	 global	 marketplace
during	 the	 first	 two	 quarters	 of	 2010	 we	 have	 	
continued	 to	 enjoy	 a	 strong	 level	 of	 enquiries	 for	 other	
major	 installations
cash
despite	 challenging	 trading	 conditions	 in	 2009	 the	
group	 generated	 a	 positive	 cash	 flow	 and	 reduced	 total	
bank	 borrowings	 to	 £08m	 from	 £10m	 at	 the	 end	 of	 the	
previous	 year
following	 the	 part	 disposal	 of	 tam	 international	 in	 april	
2010	 we	 are	 currently	 cash	 positive
dividends
the	 level	 of	 dividend	 payment	 to	 shareholders	 is	 a	
reflection	 of	 the	 board’s	 confidence	 in	 the	 group
having	 maintained	 the	 half	 year	 payout	 at	 the	 2008	
level	 board	 members	 felt	 that	 recent	 trading	 conditions	
enabled	 a	 second	 interim	 dividend	 of	 23p	 per	 share	 to	 be	
paid	 giving	 a	 total	 dividend	 for	 the	 year	 of	 43p	
the	 second	 interim	 dividend	 was	 paid	 in	 order	 to	 bring	
the	 income	 forward	 into	 the	 200910	 tax	 year	 and	
replaces	 the	 final	 dividend
o u tlook
supplying	 high	 technology	 chemical	 systems	
combined	 with	 bespoke	 engineering	
solutions	 for	 the	 aerospace	 automotive	 oil	
	 gas	 and	 construction	 industries	 around	
the	 world	 is	 proving	 to	 be	 an	 increasingly	
successful	 formula	 for	 the	 group
although	 we	 expect	 challenging	 conditions	
to	 continue	 in	 2010	 norman	 hay’s	 position	
is	 strong	 and	 the	 actions	 we	 have	 taken	
to	 improve	 efficiency	 and	 to	 diversify	 our	
productled	 businesses	 into	 growth	 markets	
will	 leave	 us	 well	 placed	 to	 benefit	 from	
economic	 recovery	
victor p bellanti
chief	 executive
19	 may	 2010 17666	 20052010	 proof	10
2009
annual report and accounts
page 10 page 10
directors and executive t eam
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
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
victor p bellanti
chief	 executive
victor	 bellanti	 joined	 norman	 hay	 plc	 in	 1993	 as	
financial	 director	 and	 was	 appointed	 chief	 executive	 in	
march	 2000
david w miller
nonexecutive	 director
david	 miller	 was	 chief	 operating	 officer	 for	 seven	 years	
before	 he	 retired	 at	 the	 end	 of	 2006	 he	 rejoined	 the	
board	 as	 a	 nonexecutive	 director	 in	 february	 2007
executive 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
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
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
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	 llp 
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
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
martin robbins
managing	 director	 –	 	
tam	 international
martin	 robbins	 is	 based	 in	 hong	 kong	 and	 is	 	
responsible	 for	 tam’s	 global	 operations		 martin	 has	 a	
wealth	 of	 experience	 in	 the	 construction	 industry 2009
annual report and accounts
17666	 20052010	 proof	10
page 11 page 11
report of the directors
the	 directors	 have	 pleasure	 in	 submitting	 their	 annual	
report	 and	 audited	 financial	 statements	 for	 the	 year	
ended	 31	 december	 2009
results and dividends
the	 consolidated	 statement	 of	 comprehensive	 income	 	
is	 set	 out	 on	 page	 16	 and	 shows	 revenue	 for	 the	 year	 	
of	 £262m	 and	 profits	 on	 ordinary	 activities	 before	 tax	 	
of	 £09m
dividends	 paid	 in	 the	 year	 are	 shown	 in	 note	 8	 of	 the	
financial	 statements
principal activities and business review
the	 principal	 activities	 of	 the	 group	 are	 shown	 on	 page	 2	 	
the	 principal	 activity	 of	 the	 company	 is	 a	 holding	
company	 the	 business	 information	 on	 pages	 4	 and	 5	
chairman’s	 statement	 and	 chief	 executive’s	 business	
review	 on	 pages	 7	 to	 9	 provide	 detailed	 information	
relating	 to	 the	 group	 and	 the	 operation	 and	 development	
of	 the	 business	 for	 the	 year	 ended	 31	 december	 2009
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
the	 economic	 conditions	 in	 financial	 markets	 have	 led	 to	
greater	 uncertainty	 the	 impact	 of	 which	 is	 also	 discussed	
within	 the	 review	 on	 pages	 4	 and	 5	 and	 on	 pages	 7	 to	 9	
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	 and	 forward	 contracting	 where	
applicable
the	 board	 and	 management	 teams	 continue	 to	 monitor	
potential	 risk	 areas	 and	 adjust	 tactical	 and	 strategic	 plans	
accordingly	 to	 protect	 our	 businesses
pro	 active	 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
our	 personnel	 are	 another	 key	 element	 and	 principal	 risk	
of	 managing	 the	 group’s	 growth	 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	 accepts	 its	
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	 31	
of	 the	 financial	 statements
directors
the	 directors	 of	 the	 company	 shown	 on	 page	 10	 held	
office	 throughout	 the	 year	 mr	 anthony	 hay	 retires	 by		
rotation	 and	 being	 eligible	 offers	 himself	 for	 reelection 17666	 20052010	 proof	10
2009
annual report and accounts
page 12 page 12
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	 are	 set	 out	
below
	 1	 january	 31 	 december
	 2009	 2009
	 beneficial	 beneficial
p	 l	 hay	 2210870	 2210870
a	 m	 hay	 1108170	 1108170
d	 w	 miller	 264750	 269750
v	 p	 bellanti	 125000	 125000
the	 details	 of	 the	 directors’	 interests	 in	 share	 options	 are	
as	 follows
interest in share options
	 1	 january	 31 	 december
	 2009	 2009
p	 l	 hay	 approved
a
	 144925	 144925
v	 p	 bellanti	 approved
a
	 144925	 144925
p	 l	 hay	 approved
b
	 	 –	 32000
v	 p	 bellanti	 approved
b
	 –	 32000 	
p	 l	 hay	 unapproved
c
	 –	 388075
v	 p	 bellanti	 unapproved
c
	 –	 588075
p	 l	 hay	 unapproved
d
	 420075	 –
v	 p	 bellanti	 unapproved
d
	 620075	 –
a
	 	 the 	 approved	 options	 are	 exercisable	 between	 5	 july	
2009	 and	 4	 july	 2016	 at	 69p	 per	 share
b
	 	 the 	 approved	 options	 are	 exercisable	 between		
1	 december	 2012	 and	 30	 november	 2019	 at	 625p		
per	 share
c
	 	 the 	 unapproved	 options	 are	 exercisable	 between	
1	 december	 2009	 and	 30	 november	 2019	 at	 625p	
per	 share	 upon	 the	 share	 price	 achieving	 150p	 or	 a	
change	 in	 control
d
	 	 these 	 unapproved	 options	 were	 replaced	 by	 b	 and	
c	 during	 the	 year
at	 31	 december	 2009	 the	 middle	 market	 price	 of	 the	
ordinary	 shares	 was	 64p	 per	 share	 and	 the	 range	 during	
the	 year	 was	 between	 55p	 and	 885p
	
substantial shareholdings
at	 31	 december	 2009	 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
westcombe	 investments	 518500	 350
mr	 n	 hendy	 500000	 337
miss	 a	 hendy	 468000	 316
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	 2009	 creditors	 represented	 49	 days	 2008	
54	 days	 of	 purchases	 for	 the	 year
indemnity cover
third	 party	 indemnity	 cover	 for	 the	 directors	 was	 in	 force	
during	 the	 year	 up	 to	 and	 including	 the	 year	 end	 date	
and	 the	 date	 of	 this	 report	 2009
annual report and accounts
17666	 20052010	 proof	10
page 13 page 13
report of the directors continued
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	
£470	 2008	 £1155	 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
subsequent events
in	 april	 2010	 the	 group	 disposed	 of	 30	 of	 its	
investment	 in	 tam	 international	 group	 holdings	 limited	
further	 information	 relating	 to	 this	 disposal	 is	 contained	
within	 note	 28	 of	 the	 financial	 statements
going concern
the	 directors	 have	 reviewed	 the	 latest	 forecasts	 prepared	
by	 all	 of	 the	 group’s	 companies	 and	 divisions	 and	 these	
demonstrate	 that	 the	 group	 will	 remain	 a	 going	 concern	
for	 the	 foreseeable	 future
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	 llp	 have	 expressed	 its	 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
19	 may	 2010 17666	 20052010	 proof	10
2009
annual report and accounts
page 14 page 14
statement of directors’ responsibilities
directors’ responsibilities
the	 directors	 are	 responsible	 for	 preparing	 the	 annual	
report	 and	 the	 financial	 statements	 in	 accordance	 with	
applicable	 law	 and	 regulations	
company	 law	 requires	 the	 directors	 to	 prepare	 financial	
statements	 for	 each	 financial	 year	 under	 that	 law	 the	
directors	 have	 elected	 to	 prepare	 the	 group	 financial	
statements	 in	 accordance	 with	 international	 financial	
reporting	 standards	 ifrss	 as	 adopted	 by	 the	 european	
union	
the	 directors	 have	 chosen	 to	 prepare	 financial	
statements	 for	 the	 company	 in	 accordance	 with	 united	
kingdom	 generally	 accepted	 accounting	 practice	
under	 company	 law	 the	 directors	 must	 not	 approve	
the	 financial	 statements	 unless	 they	 are	 satisfied	 that	
they	 give	 a	 true	 and	 fair	 view	 of	 the	 state	 of	 affairs	 of	
the	 group	 and	 company	 and	 of	 the	 profit	 or	 loss	 of	 the	
group	 for	 that	 period	
the	 directors	 are	 also	 required	 to	 prepare	 financial	
statements	 in	 accordance	 with	 the	 rules	 of	 the	 london	
stock	 exchange	 for	 companies	 trading	 securities	 on	 the	
alternative	 investment	 market	
in	 preparing	 these	 financial	 statements	 the	 directors	 are	
required	 to
 select	 suitable	 accounting	 policies	 and	 then	 apply	
them	 consistently
 make	 judgements	 and	 accounting	 estimates	 that	 are	
reasonable	 and	 prudent
 for	 the	 group	 financial	 statements	 state	 whether	
they	 have	 been	 prepared	 in	 accordance	 with	 ifrss	
as	 adopted	 by	 the	 european	 union	 subject	 to	 any	
material	 departures	 disclosed	 and	 explained	 in	 the	
financial	 statements
 for	 the	 company	 financial	 statements	 state	 whether	
applicable	 uk	 accounting	 standards	 have	 been	
followed	 and
 prepare	 the	 financial	 statements	 on	 a	 going	 concern	
basis	 unless	 it	 is	 inappropriate	 to	 presume	 that	 the	
company	 will	 continue	 in	 business
the	 directors	 are	 responsible	 for	 keeping	 adequate	
accounting	 records	 that	 are	 sufficient	 to	 show	 and	
explain	 the	 company’s	 transactions	 and	 disclose	 with	
reasonable	 accuracy	 at	 any	 time	 the	 financial	 position	
of	 the	 company	 and	 enable	 them	 to	 ensure	 that	 the	
financial	 statements	 comply	 with	 the	 requirements	 of	
the	 companies	 act	 2006	 they	 are	 also	 responsible	 for	
safeguarding	 the	 assets	 of	 the	 company	 and	 hence	 for	
taking	 reasonable	 steps	 for	 the	 prevention	 and	 detection	
of	 fraud	 and	 other	 irregularities
website publication
the	 directors	 are	 responsible	 for	 ensuring	 the	 annual	
report	 and	 the	 financial	 statements	 are	 made	 available	
on	 a	 website	 financial	 statements	 are	 published	 on	
the	 company’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	 company’s	 website	
is	 the	 responsibility	 of	 the	 directors	 the	 directors’	
responsibility	 also	 extends	 to	 the	 ongoing	 integrity	 of	 the	
financial	 statements	 contained	 therein 2009
annual report and accounts
17666	 20052010	 proof	10
page 15 page 15
independent auditors’ report
we	 have	 audited	 the	 financial	 statements	 of	 norman	 hay	
plc	 for	 the	 year	 ended	 31	 december	 2009	 which	 comprise	
the	 consolidated	 statement	 of	 financial	 position	 and	
company	 balance	 sheet	 the	 consolidated	 statement	
of	 comprehensive	 income	 the	 consolidated	 cash	 flow	
statement	 the	 consolidated	 statement	 of	 changes	 in	
equity	 and	 the	 related	 notes	 the	 financial	 reporting	
framework	 that	 has	 been	 applied	 in	 the	 preparation	 of	
the	 group	 financial	 statements	 is	 applicable	 law	 and	
international	 financial	 reporting	 standards	 ifrss	 as	
adopted	 by	 the	 european	 union	 the	 financial	 reporting	
framework	 that	 has	 been	 applied	 in	 preparation	 of	 the	
parent	 company	 financial	 statements	 is	 applicable	 law	
and	 united	 kingdom	 accounting	 standards	 united	
kingdom	 generally	 accepted	 accounting	 practice	
this	 report	 is	 made	 solely	 to	 the	 company’s	 members	
as	 a	 body	 in	 accordance	 with	 chapter	 3	 of	 part	 16	 of	
the	 companies	 act	 2006	 our	 audit	 work	 has	 been	
undertaken	 so	 that	 we	 might	 state	 to	 the	 company’s	
members	 those	 matters	 we	 are	 required	 to	 state	 to	 them	
in	 an	 auditors’	 report	 and	 for	 no	 other	 purpose	 to	 the	
fullest	 extent	 permitted	 by	 law	 we	 do	 not	 accept	 or	
assume	 responsibility	 to	 anyone	 other	 than	 the	 company	
and	 the	 company’s	 members	 as	 a	 body	 for	 our	 audit	
work	 for	 this	 report	 or	 for	 the	 opinions	 we	 have	 formed
respective responsibilities of directors and 
auditors
as	 explained	 more	 fully	 in	 the	 statement	 of	 directors’	
responsibilities	 the	 directors	 are	 responsible	 for	
the	 preparation	 of	 the	 financial	 statements	 and	 for	
being	 satisfied	 that	 they	 give	 a	 true	 and	 fair	 view	
our	 responsibility	 is	 to	 audit	 the	 financial	 statements	
in	 accordance	 with	 applicable	 law	 and	 international	
standards	 on	 auditing	 uk	 and	 ireland	 those	 standards	
require	 us	 to	 comply	 with	 the	 auditing	 practices	 board’s	
apb’s	 ethical	 standards	 for	 auditors	
scope of the audit of the financial statements
an	 audit	 involves	 obtaining	 evidence	 about	 the	 amounts	
and	 disclosures	 in	 the	 financial	 statements	 sufficient	 to	
give	 reasonable	 assurance	 that	 the	 financial	 statements	
are	 free	 from	 material	 misstatement	 whether	 caused	 by	
fraud	 or	 error	 this	 includes	 an	 assessment	 of	 whether	
the	 accounting	 policies	 are	 appropriate	 to	 the	 group’s	
and	 the	 parent	 company’s	 circumstances	 and	 have	
been	 consistently	 applied	 and	 adequately	 disclosed	 the	
reasonableness	 of	 significant	 accounting	 estimates	 made	
by	 the	 directors	 and	 the	 overall	 presentation	 of	 the	
financial	 statements
opinion on financial statements
	 in	 our	 opinion	
 the	 financial	 statements	 give	 a	 true	 and	 fair	 view	 of	
the	 state	 of	 the	 group’s	 and	 the	 parent	 company’s	
affairs	 as	 at	 31	 december	 2009	 and	 of	 the	 group’s	
profit	 for	 the	 year	 then	 ended
 the	 group	 financial	 statements	 have	 been	 properly	
prepared	 in	 accordance	 with	 ifrss	 as	 adopted	 by	 the	
european	 union
 the	 parent	 company’s	 financial	 statements	 have	
been	 properly	 prepared	 in	 accordance	 with	 united	
kingdom	 generally	 accepted	 accounting	 practice	
and
 the	 financial	 statements	 have	 been	 prepared	 in	
accordance	 with	 the	 requirements	 of	 the	 companies	
act	 2006
opinion on other matters prescribed by the 
companies act 2006
in	 our	 opinion	 the	 information	 given	 in	 the	 directors’	
report	 for	 the	 financial	 year	 31	 december	 2009	 for	 which	
the	 financial	 statements	 are	 prepared	 is	 consistent	 with	
the	 financial	 statements	
matters on which we are required to report by 
exception
we	 have	 nothing	 to	 report	 in	 respect	 of	 the	 following	
matters	 where	 the	 companies	 act	 2006	 requires	 us	 to	
report	 to	 you	 if	 in	 our	 opinion
 adequate	 accounting	 records	 have	 not	 been	 kept	
by	 the	 parent	 company	 or	 returns	 adequate	 for	 our	
audit	 have	 not	 been	 received	 from	 branches	 not	
visited	 by	 us	 or
 the	 parent	 company	 financial	 statements	 are	 not	 in	
agreement	 with	 the	 accounting	 records	 and	 returns	
or
 certain	 disclosures	 of	 directors’	 remuneration	
specified	 by	 law	 are	 not	 made	 or
 we	 have	 not	 received	 all	 the	 information	 and	
explanations	 we	 require	 for	 our	 audit
thomas lawton senior statutory auditor
for	 and	 on	 behalf	 of	 bdo	 llp 	 statutory	 auditor	
birmingham	
united	 kingdom
19	 may	 2010 page 16
17666	 20052010	 proof	10
2009
annual report and accounts
consolidated statement of comprehensive income 
for the year ended 31 december 2009 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 note	 £000	 £000
revenue	 	 	 	 	 2	 26200	 27001
cost	 of	 sales	 	 	 	 	 	 17446	 17175
gross profit	 	 	 	 	 	 8754	 9826
distribution	 expenses	 	 	 	 	 1064	 1036
administrative	 expenses	 	 	 	 	 7692	 6857
other	 income	 	 	 	 	 	 	 71	 497
profit	 on	 disposal	 of	 operation	 	 	 	 13	 862	 –
profit from operations	 	 	 	 3	 	 931	 2430
finance	 income	 	 	 	 	 4	 	 40	 139
finance	 costs	 	 	 	 	 5	 106	 206
profit before taxation 	 	 	 	 	 	 865	 2363
taxation	 	 	 	 	 7	 	 96	 810
profit after taxation	 	 	 	 	 	 	 769	 1553
other	 comprehensive	 income	 for	 the	 year	 after	 tax
exchange	 differences	 on	 translation	 of	 foreign	 operations	 	 	 	 140 	 723
deferred	 tax	 on	 items	 taken	 directly	 to	 equity	 	 	 	 	 	 27	 	 4
other	 comprehensive	 income	 for	 the	 year	 net	 of	 tax	 	 	 	 	 167 	 727
total comprehensive income for the year 	 	 	 	 	 602	 	 2280
profit attributable to
owners	 of	 the	 parent	 	 	 	 	 	 	 925	 1562
minority	 interest	 	 	 	 	 	 	 156	 9
	 	 	 	 	 	 	 	 769	 1553
total comprehensive income attributable to
owners	 of	 the	 parent	 	 	 	 	 	 750	 	 2302 	
minority	 interest	 	 	 	 	 	 148	 	 22
	 	 	 	 	 	 	 	 602	 	 	 2280
earnings per share 
basic	 earnings	 per	 share	 	 	 	 9	 64p	 107p
diluted	 earnings	 per	 share	 	 	 	 9	 	 63p	 104p
the	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements 2009
annual report and accounts
page 17
17666	 20052010	 proof	10
consolidated statement of financial position 
at 31 december 2009 
	 2009	 2008
	 	 	 	 	 note	 £000 £000	 £000	 £000
assets
noncurrent assets
intangible	 assets	 	 	 10	 2981	 	 2952
property	 plant	 and	 equipment	 	 11	 5702	 	 5837
investments	 	 	 12	 26	 	 26
other	 receivables	 	 	 	 13	 858	 	 –
total noncurrent assets	 	 	 	 9567	 	 8815
current assets
inventories	 	 	 14	 2510	 	 2846
trade	 and	 other	 receivables	 	 15	 8569	 	 7206
cash	 and	 cash	 equivalents	 	 16	 1160 	 	 1015
total current assets	 	 	 	 	 12239	 	 11067
total assets	 	 	 	 	 21806	 	 	 19882
liabilities
current liabilities
other	 financial	 liabilities	 	 17	 529	 	 512
trade	 and	 other	 payables	 	 18	 7402	 	 4380
provisions	 	 	 19	 	 99	 	 114
current	 tax	 liabilities	 	 	 20	 	 32	 	 653
total current liabilities	 	 	 	 8062	 	 5659
noncurrent liabilities
other	 financial	 liabilities	 	 21	 1460	 	 2000
trade	 and	 other	 payables	 	 	 –	 	 21
deferred	 tax	 liabilities	 	 22	 481	 	 422
total noncurrent liabilities	 	 	 	 1941	 	 2443
total liabilities	 	 	 	 	 10003	 	 8102
net assets	 	 	 	 	 11803	 	 	 11780
equity
share	 capital	 	 	 25	 	 1481	 	 1481
share	 premium	 account	 	 	 	 1254	 	 1254
capital	 redemption	 reserve	 	 	 	 94	 	 94
other	 nondistributable	 reserve	 	 	 	 766	 	 766
reserve	 for	 own	 shares	 	 	 	 322	 	 322
share	 scheme	 reserve		 	 	 	 43	 	 43
foreign	 exchange	 reserve	 	 	 	 	 624	 	 	 772
retained	 earnings	 	 	 	 	 7688	 	 7372
equity attributable to equity holders of
the parent company 	 	 	 	 11628	 	 	 11460
minority interest	 	 	 	 	 	 175	 	 	 320
total equity	 	 	 	 	 11803	 	 11780
the	 financial	 statements	 were	 approved	 and	 authorised	 for	 issue	 by	 the	 board	 on	 19	 may	 2010	
victor p bellanti 
director	
the	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements page 18
17666	 20052010	 proof	10
2009
annual report and accounts
consolidated cash flow statement 
for the year ended 31 december 2009
	 	 	 	 	 	 	 2009	 2008
cash flows from operating activities	 	 	 	 note	 £000	 £000
profit	 from	 operations	 	 	 	 	 	 931	 2430
release	 of	 negative	 goodwill	 	 	 	 	 – 	 231
impairment	 of	 intangible	 fixed	 assets	 	 	 	 	 	 15	 –
depreciation	 	 	 	 	 	 656	 566
lossprofit	 on	 sale	 of	 property	 plant	 and	 equipment	 	 	 	 	 15	 	 378
share	 option	 charge	 	 	 	 	 	 	 –	 17
decreaseincrease	 in	 inventories	 	 	 	 	 304	 614
increasedecrease	 in	 receivables	 	 	 	 	 2105	 	 886
increasedecrease	 in	 payables	 	 	 	 	 	 2682	 721
increasedecrease	 in	 provisions	 	 	 	 	 	 15	 28
cash	 generated	 from	 operations	 	 	 	 	 2513	 1927
finance	 income	 	 	 	 	 	 	 40	 139
finance	 costs	 	 	 	 	 	 106	 206
tax	 paid	 	 	 	 	 	 690	 781
net cash generated from operating activities	 	 	 	 	 1757	 1079
cash flows from investing activities
acquisition	 of	 subsidiaries	 net	 of	 cash	 acquired	 	 	 	 	 	 8	 210
purchase	 of	 property	 plant	 and	 equipment	 	 	 	 	 	 452 	 1030
expenditure	 on	 intangibles	 	 	 	 	 	 49	 –
proceeds	 from	 disposal	 of	 property	 plant	 and	 equipment	 	 	 	 	 16	 	 691
net cash used in investing activities	 	 	 	 	 477	 	 549
cash flows from financing activities
dividends	 paid	 to	 shareholders	 	 	 	 	 582	 669
payments	 for	 purchase	 of	 share	 capital	 in	 subsidiary	 	 	 	 –	 26
net	 proceeds	 from	 issue	 of	 share	 capital	 to	 minority	 shareholders		 	 	 	 3	 	 197
finance	 lease	 repayment	 	 	 	 	 76	 59
new	 loans	 raised	 	 	 	 	 	 	 265	 303
repayment	 of	 loans	 	 	 	 	 	 698	 214
net cash used in financing activities	 	 	 	 	 1088	 468
net increase in cash and cash equivalents 	 	 	 	 	 192	 	 62
cash and cash equivalents at the beginning of the year	 	 	 	 827	 	 541
effects	 of	 foreign	 exchange	 rate	 changes	 	 	 	 	 	 29	 	 224
cash and cash equivalents at the end of the year 	 	 	 16	 990	 	 827
the	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements 2009
annual report and accounts
page 19
17666	 20052010	 proof	10
consolidated statement of changes in equity 
for the year ended 31 december 2009
	 	 	 	 	 other
	 	 	 	 capital	 non
	 	 	 	 share	 redemp	 distribut	 reserve	 share	 foreign
	 	 share	 premium	 tion	 able	 for 	 own	 scheme	 exchange	 retained	 	 minority	 total
	 	 capital	 account	 reserve	 reserve	 shares	 reserve	 reserve	 earnings	 total	 interest	 equity
	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
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
dividends	 paid	
in	 year	 –	 –	 –	 –	 –	 –	 –	 669	 669	 –	 669
total	 comprehensive	
income	 for
the	 year	 –	 –	 –	 –	 –	 –	 736	 1566	 2302	 22	 2280
at	 1	 january	
2009	 1481	 1254	 94	 766	 322	 43	 772	 7372	 11460	 320	 11780
minority	 interest	
in	 subsidiary	
shares	 issued	
during	 the	 year	 –	 –	 –	 –	 –	 –	 –	 –	 –	 3	 3
dividends	 paid	
in	 year	 –	 –	 –	 –	 –	 –	 –	 582	 582	 –	 582
total	 comprehensive	
income	 for	
the	 year	 –	 –	 –	 –	 –	 –	 148	 898	 750	 148	 602
at 31 december  
2009 1481 1254 94 766 322 43 624 7688 11628 175 11803
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	 the	 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	 norman	 hay	 plc	 employee	 benefit	 trust	
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	 cumulative	 comprehensive	 income	 less	 items	 recognised	 in	 other	 equity	 reserves	
9	 	minority 	 interest	 represents	 the	 interests	 of	 the	 minority	 shareholders	 in	 subsidiaries	 of	 the	 group	
the	 notes	 shown	 on	 pages	 20	 to	 45	 form	 part	 of	 these	 financial	 statements page 20
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements 
for the year ended 31 december 2009
1  accounting policies 
these	 financial	 statements	 have	 been	 prepared	 in	 accordance	 with	 international	 financial	 reporting	 standards	
international	 accounting	 standards	 and	 interpretations	 collectively	 “ifrss”	 issued	 by	 the	 international	 accounting	
standards	 board	 “iasb”	 as	 endorsed	 by	 the	 european	 union	 “endorsed	 ifrss”	 and	 with	 those	 parts	 of	 the	 companies	 act	
2006	 applicable	 to	 companies	 preparing	 financial	 statements	 in	 accordance	 with	 ifrss	
the	 parent	 company	 financial	 statements	 have	 been	 prepared	 in	 accordance	 with	 applicable	 united	 kingdom	 accounting	
standards	 and	 are	 shown	 on	 pages	 46	 to	 54	
new standards adopted during the year
 ifrs 8 operating segments	 requires	 an	 entity	 to	 adopt	 a	 “management	 approach”	 to	 report	 on	 the	 financial	
performance	 of	 the	 operating	 segments	 and	 also	 about	 the	 entity’s	 products	 and	 services	 the	 geographical	 areas	 in	
which	 it	 operates	 and	 its	 major	 customers	 the	 information	 reported	 is	 what	 management	 uses	 internally	 for	 allocating	
resources	 to	 operating	 segments
 ias 1 presentation of financial statements	 revised	 2007	 requires	 a	 change	 in	 the	 presentation	 by	 the	 inclusion	 of	 a	
statement	 of	 comprehensive	 income	 to	 replace	 the	 consolidated	 income	 statement	 this	 new	 statement	 includes	 items	
taken	 directly	 to	 equity	 with	 the	 exception	 of	 transactions	 with	 the	 shareholders	 of	 the	 group
	 this 	 new	 presentation	 is	 in	 the	 form	 of	 one	 single	 statement	 the	 “consolidated	 statement	 of	 comprehensive	 income”
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 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	 2010	 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	 this	 revision	 on	 the	 financial	 statements
 improvements to ifrss the improvements to ifrss are mandatory for accounting periods beginning on or after 
1 january 2010
	 this 	 amendment	 takes	 various	 forms	 including	 the	 clarification	 of	 the	 requirements	 of	 ifrss	 and	 the	 elimination	 of	
inconsistencies	 between	 standards	 the	 most	 significant	 changes	 cover	 the	 following	 issues	 the	 disclosure	 requirements	
of	 other	 ifrss	 do	 not	 generally	 apply	 to	 noncurrent	 assets	 or	 disposal	 groups	 classified	 as	 held	 for	 sale	 total	 assets	
for	 each	 reportable	 segment	 need	 only	 be	 disclosed	 when	 such	 information	 is	 regularly	 provided	 to	 the	 chief	 operating	
decision	 maker	 that	 the	 terms	 of	 a	 liability	 that	 could	 at	 the	 option	 of	 the	 counterparty	 result	 in	 its	 settlement	 by	 the	
issue	 of	 equity	 instruments	 do	 not	 affect	 its	 classification	 and	 that	 only	 expenditures	 which	 result	 in	 a	 recognised	 asset	
can	 be	 classified	 as	 a	 cash	 flow	 from	 investing	 activities	 it	 also	 confirms	 that	 the	 combination	 of	 entities	 or	 businesses	
under	 common	 control	 and	 the	 contribution	 of	 a	 business	 on	 the	 formation	 of	 a	 joint	 venture	 are	 outside	 of	 the	 scope	 	
of	 ifrs	 2	
	 management	 is	 currently	 assessing	 the	 impact	 of	 this	 revision	 on	 the	 financial	 statements
 ias 24 related party disclosures	 is mandatory for accounting periods beginning on or after 1 january 2011	
the	 revision	 to	 ias	 24	 is	 in	 response	 to	 concerns	 that	 the	 previous	 disclosure	 requirements	 and	 the	 definition	 of	 a	 related	
party	 were	 too	 complex	 and	 difficult	 to	 apply	 in	 practice	
	 the	 revised	 standard	 addresses	 these	 concerns	 by
	 providing 	 a	 revised	 definition	 of	 a	 related	 party	 the	 current	 definition	 of	 a	 related	 party	 has	 been	 simplified	 and	
inconsistencies	 eliminated	 the	 revised	 definition	 will	 mean	 that	 some	 entities	 will	 have	 more	 related	 parties	 for	 which	
disclosures	 will	 be	 required	 the	 entities	 that	 are	 most	 likely	 to	 be	 affected	 are	 those	 that	 are	 part	 of	 a	 group	 that	
includes	 both	 subsidiaries	 and	 associates	 and	 entities	 with	 shareholders	 that	 are	 involved	 with	 other	 entities
	 management 	 is	 currently	 assessing	 the	 impact	 of	 ias	 24	 on	 the	 group	 financial	 statements 2009
annual report and accounts
page 21
17666	 20052010	 proof	10
1  accounting policies continued
 ifrs 9 financial instruments is mandatory for accounting periods beginning on or after 1 january 2013
	 ifrs 	 9	 will	 eventually	 replace	 ias	 39	 in	 its	 entirety	 however	 the	 process	 has	 been	 divided	 into	 three	 main	 components	
classification	 and	 measurement	 impairment	 and	 hedge	 accounting	
	 ifrs	 9	 addresses	 the	 classification	 and	 measurement	 of	 financial	 assets	 only	 the	 requirements	 for	 the	 classification	
and	 measurement	 of	 financial	 liabilities	 will	 be	 finalised	 and	 added	 to	 ifrs	 9	 once	 issues	 related	 to	 the	 recognition	 of	
changes	 in	 an	 entity’s	 own	 credit	 risk	 have	 been	 addressed
	 	 management 	 is	 currently	 assessing	 the	 impact	 of	 ifrs	 9	 on	 the	 group	 financial	 statements
the	 following	 are	 also	 standards	 interpretations	 and	 amendments	 to	 published	 statements	 not	 yet	 effective	 and	 which	 are	
not	 considered	 to	 be	 relevant	 to	 the	 group	
	
 amendments to ifrs 2 group cashsettled sharebased payments transactions	 effective	 for	 accounting	 periods	
beginning	 on	 or	 after	 1	 january	 2010
 amendments to ias 32 classification of rights issues	 effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 february	
2010
 ifric 13 customer loyalty programmes	 effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 july	 2009	
 ifric 14 ias 19 limit on a defined benefit asset minimum funding requirements and their interaction	 effective	 for	
accounting	 periods	 beginning	 on	 or	 after	 1	 january	 2011
 ifric 16 hedges of a net investment in a foreign operation	 effective	 for	 accounting	 periods	 beginning	 on	 or	 after	
1	 october	 2009	
 ifric 17 distribution of noncash assets to owners	 effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 july	 2009	
 ifric 18 transfer of assets from customers	 effective	 for	 accounting	 periods	 beginning	 on	 or	 after	 1	 july	 2009	
 ifric 19 extinguishing financial liabilities with equity instruments	 effective	 for	 accounting	 periods	 on	 or	 after	
1	 april	 2010
 amendments to ias 39 financial investments recognition and measurement eligible hedged items	 effective	 for	
accounting	 periods	 beginning	 on	 or	 after	 1	 july	 2009	 and
 embedded derivatives amendments to ifric 9 and ias 39	 effective	 for	 accounting	 periods	 beginning	 on	 or	 after	
30	 june	 2009
the following principal accounting policies have been applied consistently yearonyear 
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	 t o	 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	 intra
group	 sales	
longterm	 contracts	 are	 assessed	 on	 a	 contractbycontract	 basis	 where	 the	 outcome	 of	 a	 longterm	 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	 year	 end	 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	 page 22
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
1  accounting policies continued
research and development 
expenditure	 on	 applied	 research	 and	 development	 is	 charged	 to	 profit	 or	 loss	 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	 profit	 or	 loss	 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	 pro	 rata	 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	 ifrss	 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	 acquired	 exceeds	 the	 acquisition	 cost	 the	 negative	 goodwill	 that	 arises	 is	 recorded	 as	
income	 within	 profit	 or	 loss	
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	 ifrss	 all	 intangible	 assets	 with	 indefinite	 lives	 are	 reviewed	 for	 impairment	 on	 an	 annual	 basis	
property plant and equipment 
property	 plant	 and	 equipment	 is	 held	 at	 cost	 less	 accumulated	 depreciation	 although	 some	 assets	 are	 carried	 at	 deemed	
cost	 being	 the	 carrying	 value	 of	 freehold	 land	 and	 buildings	 as	 at	 31	 december	 1999	 all	 additions	 since	 this	 date	 are	 stated	
at	 cost	
depreciation	 is	 provided	 on	 property	 plant	 and	 equipment	 other	 than	 freehold	 land	 and	 plant	 in	 the	 course	 of	 construction	
at	 rates	 calculated	 to	 write	 off	 the	 cost	 or	 deemed	 cost	 less	 estimated	 residual	 value	 of	 each	 asset	 evenly	 over	 its	 expected	
useful	 life	 as	 follows	
freehold	 buildings	 	 45	 years
long	 leasehold	 property	 over 	 term	 of	 lease
plant	 vehicles	 and	 fixtures	 3 	 to	 10	 years
computer	 equipment	 	 2	 to	 5	 years
impairment	 tests	 on	 the	 carrying	 value	 of	 property	 plant	 and	 equipment	 are	 undertaken	 at	 the	 end	 of	 each	 year	 if	 events	 or	
changes	 in	 circumstances	 indicate	 that	 the	 carrying	 value	 may	 not	 be	 recoverable	
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	
other	 comprehensive	 income	 are	 transferred	 to	 profit	 or	 loss 2009
annual report and accounts
page 23
17666	 20052010	 proof	10
1  accounting policies continued
noncurrent assets – other receivables
where	 a	 longterm	 receivable	 arises	 as	 a	 result	 of	 a	 disposal	 there	 is	 an	 annual	 estimation	 of	 the	 factors	 that	 affect	 this	
deferred	 consideration	 and	 a	 revaluation	 made	 if	 required
inventories 
inventories	 are	 valued	 at	 the	 lower	 of	 cost	 on	 a	 first	 in	 first	 out	 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	 first	 in	 first	 out	 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	 cash	 flows	 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	 profit	 or	 loss	 on	 confirmation	 that	 the	 trade	 receivable	 will	 not	 be	 collectable	 the	 gross	 carrying	
value	 of	 the	 asset	 is	 written	 off	 against	 the	 associated	 provision
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	 changes	 in	 the	 carrying	 amount	 of	 the	 liability	 as	 a	 consequence	 of	 	
reestimation	 result	 in	 an	 amendment	 to	 the	 carrying	 amount	 of	 the	 related	 goodwill	 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	 profit	 or	 loss	
lease	 payments	 are	 analysed	 between	 capital	 and	 interest	 components	 so	 that	 the	 interest	 element	 of	 the	 payment	
is	 charged	 to	 profit	 or	 loss	 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	 profit	 or	 loss	 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	 shortterm	 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	 page 24
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
1  accounting policies continued
foreign currency translation 
functional	 currency	
the	 consolidated	 financial	 statements	 are	 presented	 in	 sterling	 which	 is	 the	 company’s	 functional	 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	 profit	 or	 loss	
foreign	 currency	 monetary	 assets	 and	 liabilities	 are	 translated	 at	 the	 exchange	 rates	 ruling	 at	 the	 year	 end	 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	 year	 end	 date	 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	 recorded	 in	 other	 comprehensive	 income	 and	 are	 shown	 in	 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	 on	 disposal	 of	 the	 foreign	 operation	 the	 amounts	 reflected	 in	 the	
foreign	 exchange	 reserve	 are	 recycled	 to	 profit	 or	 loss
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	 profit	 or	 loss	 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	 year	 end	 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	 year	 end	 date	
deferred	 tax	 is	 provided	 in	 full	 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	 year	 end	 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 
sharebased	 payments	
where	 share	 options	 are	 awarded	 to	 employees	 the	 fair	 value	 of	 the	 options	 at	 the	 date	 of	 grant	 is	 charged	 to	 profit	 or	
loss	 over	 the	 vesting	 period	 nonmarket	 vesting	 conditions	 are	 taken	 into	 account	 by	 adjusting	 the	 number	 of	 equity	
instruments	 expected	 to	 vest	 at	 each	 year	 end	 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	 profit	 or	 loss	 in	 the	 year	 in	 which	 they	 become	 payable	 2009
annual report and accounts
page 25
17666	 20052010	 proof	10
1  accounting policies continued
employee	 benefit	 trust	 ebt
as	 the	 company	 is	 deemed	 to	 have	 control	 of	 its	 ebt	 it	 is	 treated	 as	 a	 subsidiary	 and	 consolidated	 for	 the	 purposes	 of	 the	
consolidated	 financial	 statements	 	 the	 ebt’s	 assets	 other	 than	 investments	 in	 the	 company	 shares	 liabilities	 income	 and	
expenses	 are	 included	 on	 a	 linebyline	 basis	 in	 the	 consolidated	 financial	 statements	 	 the	 ebt’s	 investment	 in	 the	 company’s	
shares	 is	 deducted	 from	 equity	 in	 the	 consolidated	 statement	 of	 financial	 position	 as	 if	 they	 were	 treasury	 shares
critical accounting estimates and judgements 
in	 applying	 the	 group’s	 accounting	 policies	 set	 out	 above	 management	 is	 required	 to	 make	 certain	 estimates	 and	 judgements	
concerning	 the	 future	 these	 judgements	 are	 regularly	 reviewed	 and	 updated	 as	 necessary	 the	 estimates	 and	 judgements	 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	
revenue	 recognition	 –	 longterm	 contracts	
in	 applying	 the	 group’s	 accounting	 policy	 set	 out	 above	 if	 the	 outcome	 of	 a	 longterm	 contract	 can	 be	 estimated	 reliably	
contract	 revenue	 is	 recognised	 by	 reference	 to	 the	 stage	 of	 completion	 of	 the	 contract	 activity	 the	 stage	 of	 completion	 is	
regularly	 reviewed	 and	 updated	 the	 actual	 result	 could	 vary	 from	 the	 value	 used	 in	 profit	 or	 loss	 however	 as	 these	 are	
reviewed	 on	 a	 monthly	 basis	 any	 difference	 is	 not	 expected	 to	 be	 significant	
deferred	 consideration	 payable
included	 within	 liabilities	 is	 an	 amount	 of	 £85000	 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	 estimated	 profits
deferred	 consideration	 receivable
included	 within	 assets	 is	 an	 amount	 of	 £974000	 receivable	 in	 respect	 of	 the	 disposal	 of	 the	 remaining	 wet	 processing	
operations	 from	 our	 coventry	 site	 this	 consideration	 receivable	 has	 been	 calculated	 as	 the	 total	 of	 the	 expected	 annual	
amounts	 receivable	 from	 the	 purchaser	 discounted	 at	 an	 appropriate	 rate	 the	 expected	 annual	 amounts	 receivable	 are	
based	 on	 a	 percentage	 of	 the	 sales	 of	 the	 purchaser	 there	 is	 no	 set	 termination	 date	 for	 this	 agreement	
the	 calculation	 of	 the	 amount	 will	 be	 reviewed	 next	 year	 and	 in	 following	 years	 if	 there	 is	 a	 change	 in	 circumstances	
indicating	 that	 the	 underlying	 value	 of	 the	 asset	 has	 changed	 to	 a	 significant	 extent		 changes	 in	 the	 expected	 annual	
amounts	 receivable	 or	 the	 appropriate	 discount	 rate	 could	 change	 the	 value	 of	 the	 recorded	 asset
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 
the	 group’s	 business	 activities	 are	 organised	 into	 four	 main	 operating	 divisions		 these	 divisions	 except	 for	 the	 chemical	
process	 plant	 division	 contain	 further	 business	 units		 each	 individual	 business	 unit	 is	 managed	 separately	 as	 well	 as	
collectively	 on	 a	 divisional	 basis	 and	 is	 considered	 to	 be	 an	 operating	 segment
the	 chief	 operating	 decision	 maker	 is	 the	 board	 of	 directors		 the	 information	 reviewed	 by	 the	 board	 of	 directors	 includes	
the	 revenues	 and	 profits	 before	 finance	 income	 and	 finance	 cost	 of	 the	 individual	 business	 units	 comprising	 each	 division	
and	 in	 total	 for	 each	 division
for	 the	 purpose	 of	 the	 segmental	 disclosures	 certain	 nonreportable	 business	 units	 have	 been	 aggregated	 together	 to	
create	 other	 reportable	 segments		 the	 reported	 segments	 are	 shown	 in	 the	 disclosures	 under	 the	 relevant	 main	 operating	
divisional	 headings
the	 principal	 activities	 are	 as	 follows
 impregnation	 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
 surface	 coatings	 application	 of	 a	 range	 of	 surface	 coatings	 to	 customers’	 products
 chemical	 process	 plant	 manufacture 	 of	 a	 range	 of	 chemical	 processing	 plant	 and	 equipment page 26
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
2  segmental analysis continued
segment	 information	 about	 these	 businesses	 is	 presented	 below	
year ended 31 december 2009
	 	 	 	 	 chemical	
	 impregnation	 construction 	 	 surface	 process	 elimina
	 sealants	 chemicals	 	 coatings 	 	 plant	 tions
	 	 	 	 	 	 asia
	 	 	 uk	 other	 uk	 pacific	 uk	 other	 uk	 	 total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
external	 segmental	 revenue	 3237 1314 1125 6876 8170 1091 4387 – 26200
intersegmental	 revenues	 250 – 78 – – – 256 584 –
total	 segmental	 revenue	 3487 1314 1203 6876 8170 1091 4643 584 26200
segmental	 result	 	
predepreciation	 	 574 67  137 48 840 53 142 – 1587
depreciation	 	 5 38 14 151 351 66 31 – 656
segmental	 result	 	
postdepreciation	 	 569 29 151 103 489 13 111 – 931
unallocated	 corporate	 income	 	 	 	 	 	 	 	 	 –
profit	 from	 operations	 	 	 	 	 	 	 	 	 931
finance	 income	 	 	 	 	 	 	 	 	 	 40
finance	 costs	 	 	 	 	 	 	 	 	 	106
profit	 before	 taxation		 	 	 	 	 	 	 	 	 865
taxation	 	 	 	 	 	 	 	 	 	 96
profit	 after	 taxation	 	 	 	 	 	 	 	 	 	 769
	
	
	 	 	 	 chemical 	 	
	 impregnation	 construction	 surface	 process
	 sealants	 chemicals	 	 coatings 	 	 plant
	 	 	 	 	 	 asia
	 	 	 uk	 other	 uk	 pacific	 uk	 other	 uk	 total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
segmental	 trade	 receivables	
amounts	 due	 from	 contract	
customers	 and	 inventory	 	 1009 425  508  3011 2047  412 2774 10186
intangible	 assets	 	 	 	 	 	 	 	 	 2981
property	 plant	 and	 equipment	 	 	 	 	 	 	 	 5702
investments	 	 	 	 	 	 	 	 	 26
other	 longterm	 receivables	 	 	 	 	 	 	 	 858
other	 receivables	 	 	 	 	 	 	 	 	 275
prepayments	 and	 accrued	 income	 	 	 	 	 	 	 	 604
corporation	 tax	 	 	 	 	 	 	 	 	 14
cash	 and	 cash	 equivalents	 	 	 	 	 	 	 	 1160
	 	 	 	 	 	 	 	 	 21806
	
	 	 	 	 chemical	 	
	 impregnation	 construction 	 	 surface	 process	 corporate
	 sealants	 chemicals	 coatings	 	 plant	 assets
	 	 	 	 	 	 asia
	 	 	 uk	 other	 uk	 pacific	 uk	 other	 uk	 uk	 total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
capital	 additions	 	 — 12 8 261  252 147  3  12  695
	 2009
annual report and accounts
page 27
17666	 20052010	 proof	10
2  segmental analysis continued
year ended 31 december 2008
	 	 	 	 	 chemical	
	 impregnation	 construction 	 	 surface	 process	 elimina
	 sealants	 chemicals	 	 coatings 	 	 plant	 tions
	 	 	 	 	 	 asia
	 	 	 uk	 other	 uk	 pacific	 uk	 other	 uk	 	 total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
external	 segmental	 revenue	 4714	 1223	 1676 	 	 5264	 9259	 601	 4264	 –	 27001
intersegmental	 revenues	 26	 –	 –	 –	 –	 –	 73 	 	 99	 –
total	 segmental	 revenue	 4740	 1223	 1676 	 	 5264	 9259	 601	 4337 	 	 99	 27001
segmental	 result	
predepreciation	 	 1141	 37	 26 	 	 188	 922	 60	 271	 –	 2593
depreciation	 	 21	 26	 26 	 	 101	 305	 52	 35	 –	 566
segmental	 result	 	
postdepreciation	 	 1120	 11	 52 	 	 87	 617	 8	 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
	
	 	 	 	 chemical 	 	
	 impregnation	 construction	 surface	 process
	 sealants	 chemicals	 	 coatings 	 	 plant
	 	 	 	 	 	 asia
	 	 	 uk	 other	 uk	 pacific	 uk	 other	 uk	 total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
segmental	 trade	 receivables	
amounts	 due	 from	 contract	
customers	 and	 inventory	 	 1149	 346 	 	 410 	 	 3079	 2839 	 	 214	 959	 8996
intangible	 assets	 	 	 	 	 	 	 	 	 2952
property	 plant	 and	 equipment	 	 	 	 	 	 	 	 5837
investments	 	 	 	 	 	 	 	 	 26
other	 receivables	 	 	 	 	 	 	 	 	 476
prepayments	 and	 accrued	 income	 	 	 	 	 	 	 	 577
corporation	 tax	 	 	 	 	 	 	 	 	 3
cash	 and	 cash	 equivalents	 	 	 	 	 	 	 	 1015
	 	 	 	 	 	 	 	 	 	 19882
	
	 	 	 	 chemical	 	
	 impregnation	 construction 	 	 surface	 process	 corporate
	 sealants	 chemicals	 coatings	 	 plant	 assets
	 	 	 	 	 	 asia
	 	 	 uk	 other	 uk 	 	 pacific	 uk	 other	 uk	 uk	 total
	 	 	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000	 £000
capital	 additions	 	 5	 2	 23 	 	 569 	 	 896	 349	 18	 —	 1862
in	 the	 above	 tables	 uk	 relates	 to	 uk	 based	 businesses	 and	 other	 relates	 to	 nonuk	 based	 businesses	
consolidation	 journals	 are	 considered	 immaterial	 by	 the	 board	 of	 directors	 and	 have	 been	 netted	 off	 in	 the	 operating	 	
division	 to	 which	 they	 relate page 28
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
2  segmental analysis continued
	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 £000	 £000
analysis	 of	 revenues	 by	 location	 of	 customer
united	 kingdom	 	 	 	 	 	 12849	 14084
australia	 	 	 	 	 	 2715	 2010
rest	 of	 the	 world	 	 	 	 	 	 10636	 10907
	 	 	 	 	 	 	 26200	 27001
analysis	 of	 noncurrent	 assets	 by	 location	
united	 kingdom	 	 	 	 	 	 7322	 6579
rest	 of	 the	 world	 	 	 	 	 	 2245	 2236
	 	 	 	 	 	 	 9567	 8815
3 profit from operations
	 	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 	 £000	 £000
this	 is	 stated	 after	 charging
depreciation	 of	 tangible	 fixed	 assets	 	 	 	 	 656	 566
lossprofit	 on	 disposal	 of	 property	 plant
and	 equipment	 	 	 	 	 	 	 	 	 15	 	 378
impairment	 of	 intangible	 fixed	 assets	 	 	 	 	 	 15	 	 –
profit	 on	 disposal	 of	 operation	 	 	 	 	 	 	 862	 –
auditors’	 remuneration	 –	 fees 	 payable	 to	 the	 company’s	 auditors	 for	 the
	 	 	 audit 	 of	 the	 company’s	 annual	 accounts	 	 	 10	 6
	 	 –	 fees 	 payable	 to	 the	 company’s	 auditors	 and	 its
	 	 	 associates 	 for	 other	 services
	 	 	 the 	 audit	 of	 the	 company’s	 subsidiaries	 pursuant
	 	 	 to 	 legislation	 	 	 	 	 83	 97
	 	 	 taxation 	 services	 	 	 	 17	 35
	 	 	 services 	 relating	 to	 corporate	 finance	 transactions	 	 8	 8
	 	 	 other	 	 	 	 	 –	 23
cost	 of	 inventories	 recognised	 as	 an	 expense	 	 	 	 	 9504	 9211
cost	 of	 inventories	 written	 off	 during	 the	 year	 	 	 	 	 48	 	 105	
research	 	 	 	 	 	 	 110	 176
operating	 lease	 rentals	 –	 plant 	 and	 machinery	 	 	 	 290	 263
	 	 –	 properties 	 	 	 	 	 	 433	 	 344
share	 option	 expense	 	 	 	 	 	 	 –	 17
foreign	 exchange	 lossesprofits	 	 	 	 	 	 	 98	 384 2009
annual report and accounts
page 29
17666	 20052010	 proof	10
4 finance income 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
interest	 on	 bank	 deposits	 	 	 	 	 	 40	 139
5  finance costs
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
interest	 on	 bank	 loans	 and	 overdrafts	 	 	 	 	 	 61	 196
hire	 purchase	 interest	 	 	 	 	 	 15	 	 10
other	 	 	 	 	 	 	 30	 	 –
	 	 	 	 	 	 	 	 106	 	 206
6  employees
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 number	 number
the	 average	 number	 of	 employees	 including	 executive	 directors	 during	 the	 year	 comprised
office	 and	 management	 	 	 	 	 157	 152
manufacturing	 	 	 	 	 	 182	 195
	 	 	 	 	 	 	 	 339	 347
	 	 	 	 	 	 	 	 £000	 £000
staff	 costs	 including	 executive	 directors	 during	 the	 year	 amounted	 to
wages	 and	 salaries	 	 	 	 	 	 8253	 8243
social	 security	 costs	 	 	 	 	 	 682	 725
other	 pension	 costs	 note	 27	 	 	 	 	 385	 425
share	 option	 expense		 	 	 	 	 –	 17
	 	 	 	 	 	 	 9320	 9410 page 30
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
7   taxation 
	 	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 	 £000	 £000
uk	 corporation	 tax	 –	 charge 	 for	 the	 year	 	 	 	 89	 628
	 	 –	 adjustment 	 in	 respect	 of	 previous	 periods	 	 	 	 45	 	 36
current	 tax	 on	 foreign	 income	 for	 the	 year	 	 	 	 	 	 20	 87
	 	 	 	 	 	 	 	 	 64	 751
deferred	 tax	 –	 transfer 	 to	 deferred	 tax	 account	 	 	 	 39	 	 45	
	 	 –	 adjustment 	 in	 respect	 of	 previous	 periods	 	 	 	 7	 14
	 	 	 	 	 	 	 	 96	 810
the	 tax	 assessed	 in	 the	 year	 is	 lower	 than	 the	 standard	 rate	 of	 corporation	 tax	 in	 the	 uk
	 	 	 	 	 	 	 	 2009	 2008
the	 difference	 is	 explained	 below	 	 	 	 	 	 	 £000	 £000
tax	 on	 profit	 on	 ordinary	 activities	 at	 the	 standard	 rate	 of
corporation	 tax	 in	 the	 uk	 of	 28	 	 	 	 	 	 	 242	 662
adjustment	 in	 respect	 of	 previous	 periods	 	 	 	 	 	 45	 	 36
prior	 year	 adjustments	 in	 deferred	 tax	 	 	 	 	 7	 14
expenses	 not	 deductible	 for	 tax	 purposes	 	 	 	 	 48	 98
tax	 effect	 of	 property	 disposal	 	 	 	 	 	 	 –	 113
withdrawal	 of	 tax	 allowances	 	 	 	 	 	 	 	 85	 	 85 	
withholding	 tax	 paid	 	 	 	 	 	 	 	 21	 –
income	 not	 taxable	 for	 tax	 purposes	 	 	 	 	 	 	 –	 116
unrelieved	 tax	 losses	 	 	 	 	 	 	 	 61	 192 	
capital	 losses	 utilised	 	 	 	 	 	 	 	 279	 –	
effect	 of	 changes	 in	 tax	 rates	 	 	 	 	 	 	 – 	 9
effect	 of	 different	 tax	 rates	 of	 subsidiaries	 in	 other	 jurisdictions	 	 	 	 	 –	 57
other	 deferred	 tax	 movement	 	 	 	 	 	 	 30 	 –
total	 tax	 charge	 for	 the	 year	 	 	 	 	 	 	 	 96	 	 810
8   dividends
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
final	 dividend	 paid	 of	 20p	 2008	 26p	 per	 share	 	 	 	 	 291	 378
interim	 dividend	 paid	 of	 20p	 2008	 20p	 per	 share	 	 	 	 291	 291
	 	 	 	 	 	 	 	 582	 669
dividends	 declared	 after	 the	 balance	 sheet	 date	 but	 before	 approval	 of
financial	 statements	 of	 23p	 2008	 20p	 per	 share		 	 	 	 335	 291
dividends	 are	 recognised	 in	 the	 financial	 statements	 when	 they	 are	 paid	 and	 not	 declared	 the	 2009	 financial	 statements	
recognised	 the	 interim	 dividend	 that	 was	 both	 paid	 and	 declared	 in	 2009	 and	 also	 the	 final	 dividend	 that	 was	 paid	 in	 2009	
but	 declared	 in	 the	 prior	 year	 financial	 statements	 for	 the	 year	 ended	 31	 december	 2008 2009
annual report and accounts
page 31
17666	 20052010	 proof	10
9   earnings per ordinary share 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
profit	 on	 ordinary	 activities	 after	 tax	 	 	 	 	 	 925	 1562
basic earnings per ordinary share
	 	 	 	 	 	 	 number	 number
	 	 	 	 	 	 	 000s	 000s
weighted	 average	 number	 of	 ordinary	 shares	 in	 issue	 	 	 	 14546	 14546
earnings	 per	 share	 	 	 	 	 	 64p	 107p
diluted earnings per share
	 	 	 	 	 	 	 number	 number
	 	 	 	 	 	 	 	 000s	 000s
weighted	 average	 number	 of	 ordinary	 shares	 in	 issue	 including	 relevant	 share	 options	 	 14588	 15053
earnings	 per	 share	 	 	 	 	 	 	 63p	 104p
10 intangible assets 
	 	 	 	 	 	 	 brands	 goodwill	 total
cost or valuation	 	 	 	 	 £000	 £000	 £000
at	 1	 january	 2008	 	 	 	 	 500	 1990	 2490
additions	 	 	 	 	 –	 	 156	 156
acquisition	 of	 subsidiary	 	 	 	 –	 	 140	 140
foreign	 exchange	 differences	 	 	 	 –	 	 222 	 	 222
disposals	 	 	 	 	 –	 16	 16
at 1 january 2009     500 2492 2992
additions	 	 	 	 	 –	 	 94	 	 94
foreign	 exchange	 differences	 	 	 	 –	 44	 44
at 31 december 2009     500 2542 3042
amortisation
at	 1	 january	 2008	 	 	 	 	 –	 	 53 	 	 53
disposals	 	 	 	 	 –	 	 16 	 	 16
foreign	 exchange	 differences	 	 	 	 –	 	 3	 	 3
at 1 january 2009     –  40 40
impairment	 provision	 	 	 	 	 –	 	 15	 	 15
foreign	 exchange	 differences	 	 	 	 –	 	 6	 6
at 31 december 2009     – 61 61
net book value
at 31 december 2009     500 2481 2981
at	 1	 january	 2009	 	 	 	 	 500	 2452	 2952
at	 1	 january	 2008	 	 	 	 	 500	 1937	 2437
impairment of goodwill and brands 
the	 recoverable	 amount	 of	 each	 cash	 generating	 unit	 cgu	 connected	 to	 the	 brand’s	 value	 has	 been	 determined	 from	 	
valueinuse	 calculations	 based	 on	 cash	 flow	 assumptions	 for	 a	 five	 year	 period	 to	 31	 december	 2014	 extrapolated	 with	 no	
growth	 to	 31	 december	 2019	
the	 tam	 brand	 has	 been	 assessed	 as	 having	 an	 indefinite	 useful	 life	 when	 coupled	 with	 continuing	 market	 spend	 to	 	
maintain	 the	 brand	 during	 2009	 the	 tam	 group	 expanded	 into	 new	 product	 ranges	 new	 markets	 and	 new	 territories	 and	
the	 part	 disposal	 of	 tam	 international	 in	 april	 2010	 provided	 further	 evidence	 of	 the	 value	 of	 the	 brand	 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	 page 32
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
10 intangible assets continued
	 	 	 	 	 	 mx	 applied 	
	 	 	 	 	 tam	 systems	 precision	 hitech
	 	 	 	 	 international	 international	 coatings	 coatings	 others
discount	 rate	 	 	 13	 13	 13	 13 	 	 13
	 	 	 	 	 £000	 £000	 £000	 £000 	 	 £000
goodwill	 	 	 1147	 475	 315	 470 	 	 74
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	 10	 in	 the	 previous	 year	 all	 other	 assumptions	 in	 the	
current	 and	 prior	 year	 remain	 the	 same	
11 property plant and equipment 
	 	 	 	 	 long
	 	 	 	 	 freehold	 	 leasehold	 plant
	 	 	 	 	 land	 and	 land 	 and	 vehicles 	 and
	 	 	 	 	 buildings	 buildings	 fixtures	 computers	 total
cost	 	 	 £000	 £000	 £000	 £000	 £000
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 1 january 2009   3065 730 5577 379 9751
additions	 	 	 	 86	 	 18	 412	 72	 	 588
acquisition	 of	 subsidiary	 	 –	 –	 	 13	 –	 	 13
exchange	 differences		 	 –	 3	 	 43 	 	 4	 50
reclassified	 	 	 –	 –	 	 3	 	 3	 	 –	
disposals	 	 	 –	 	 16	 80	 2	 98
at 31 december 2009   3151 729 5876 448  10204 2009
annual report and accounts
page 33
17666	 20052010	 proof	10
11 property plant and equipment continued
	 	 	 	 	 	 	 long 	
	 	 	 	 freehold	 leasehold	 plant
	 	 	 	 land 	 and	 land 	 and	 vehicles 	 and
	 	 	 	 buildings	 buildings	 fixtures	 computers	 total
depreciation	 	 	 £000	 £000	 £000	 £000	 £000
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 1 january 2009   539  144  2933 298  3914
provided	 during	 the	 year	 	 32 	 	 34 	 	 545 	 	 45 	 	 656 	
acquisition	 of	 subsidiary	 	 –	 –	 	 6	 –	 	 6
exchange	 differences	 	 	 	 –	 3	 	 4 	 	 2 	 	 9 	
reclassified	 	 	 –	 	 –	 	 1	 	 1	 	 –	
disposals	 	 	 –	 	 16 	 	 49 	 	 –	 	 65 	
at 31 december 2009   571  159  3430  342 4502 
net book value
at 31 december 2009   2580  570  2446  106  5702
at	 1	 january	 2009	 	 	 2526 	 	 586 	 	 2644 	 	 81 	 	 5837 	
at	 1	 january	 2008	 	 	 2558	 480 	 	 1491 	 	 104	 4633
the	 net	 book	 value	 of	 plant	 vehicles	 and	 fixtures	 includes	 £212000	 2008	 £151000	 in	 respect	 of	 assets	 held	 under	 finance	
leases	 and	 hire	 purchase	 contracts	 depreciation	 charged	 on	 these	 assets	 amounted	 to	 £52000	 2008	 £33000	
12 investments 
	 	 	 	 	 	 	 	 £000 	
other	 investments	 	 	 	 	 	 	 26
at	 1	 january	 2009	 and	 at	 31	 december	 2009
there	 is	 no	 material	 change	 in	 the	 fair	 value	 of	 the	 group’s	 investments
13 other receivables
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
amounts	 receivable	 from	 sale	 of	 operation	 	 	 	 	 	 858	 	 –
the	 above	 reflects	 the	 consideration	 receivable	 from	 the	 disposal	 of	 the	 remaining	 wet	 processing	 operations	 on	 the	
coventry	 site	 due	 after	 more	 than	 one	 year	 an	 amount	 of	 £116000	 in	 respect	 of	 this	 disposal	 is	 due	 in	 less	 than	 one	 year	
and	 is	 included	 in	 other	 receivables
the	 total	 consideration	 receivable	 of	 £974000	 has	 been	 calculated	 as	 the	 annual	 amounts	 expected	 to	 be	 receivable	
from	 the	 purchaser	 at	 an	 agreed	 percentage	 of	 specified	 sales	 of	 the	 purchaser	 over	 the	 next	 ten	 years	 discounted	 at	 an	
appropriate	 rate	 there	 is	 no	 set	 termination	 date	 for	 this	 agreement
after	 the	 deduction	 of	 closure	 costs	 a	 profit	 of	 £862000	 has	 been	 recognised	 in	 the	 consolidated	 statement	 of	
comprehensive	 income	 in	 respect	 of	 this	 disposal page 34
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
14 inventories
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
raw	 materials	 and	 consumables	 	 	 	 	 	 1258 	 1494
work	 in	 progress	 	 	 	 	 	 	 51	 	 127 	
finished	 goods	 	 	 	 	 	 	 1201 	 1225
	 	 	 	 	 	 	 	 2510	 2846
15  trade and other receivables 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
amounts	 receivable	 for	 sale	 of	 goods	 	 	 	 	 7706	 6230
allowance	 for	 doubtful	 debts	 	 	 	 	 	 179	 177
trade	 receivables	 	 	 	 	 	 7527	 6053
amounts	 due	 from	 contract	 customers	 	 	 	 	 	 149	 	 97
other	 receivables	 	 	 	 	 	 275	 476
prepayments	 and	 accrued	 income	 	 	 	 	 604	 	 577
corporation	 tax	 	 	 	 	 	 14	 3
	 	 	 	 	 	 	 8569	 7206
the	 carrying	 values	 of	 the	 group’s	 trade	 and	 other	 receivables	 including	 longterm	 receivables	 are	 denominated	 in	 the	
following	 currencies
	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
sterling	 	 	 	 	 	 6158	 4376
euros	 	 	 	 	 	 327	 322
us	 dollars	 	 	 	 	 	 230	 217
hong	 kong	 dollars	 	 	 	 	 	 217	 236
singapore	 dollars	 	 	 	 	 	 752	 988
australian	 dollars	 	 	 	 	 	 657	 535
other	 currencies	 	 	 	 	 	 	 1072	 529
	 	 	 	 	 	 	 9413	 7203
at	 31	 december	 2009	 trade	 and	 contract	 receivables	 of	 £1127000	 2008	 £553000	 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
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
up	 to	 3	 months	 	 	 	 	 	 696	 	 140
3	 to	 6	 months	 	 	 	 	 	 340	 238
6	 to	 12	 months	 	 	 	 	 	 	 91	 175
	 	 	 	 	 	 	 1127	 553 2009
annual report and accounts
page 35
17666	 20052010	 proof	10
15  trade and other receivables continued
at	 31	 december	 2009	 trade	 receivables	 of	 £179000	 2008	 £177000	 were	 past	 due	 and	 impaired	 the	 basis	 for	 these	
impairments	 was	 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	 yearend	 to	 indicate	 otherwise	
the	 receivables	 relate	 to	 various	 trading	 activities	 of	 the	 group	 the	 ageing	 of	 these	 receivables	 is	 as	 follows	
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
up	 to	 3	 months	 	 	 	 	 	 20	 12
3	 to	 6	 months	 	 	 	 	 	 62	 64
6	 to	 12	 months	 	 	 	 	 	 	 97	 	 101
	 	 	 	 	 	 	 	 179	 177
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	
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
opening	 balance	 	 	 	 	 	 177	 148
acquisition	 of	 subsidiary	 	 	 	 	 –	 	 101
increases	 in	 provisions	 	 	 	 	 99	 86
amounts	 utilised	 	 	 	 	 	 22 	 118
amounts	 released	 	 	 	 	 	 80	 52
foreign	 exchange	 differences	 arising	 	 	 	 	 	 5	 	 12
	 	 	 	 	 	 	 	 179	 177
16  cash and cash equivalents
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
cash	 	 	 	 	 	 	 1160 	 1015
within	 the	 cash	 flow	 statement	 the	 cash	 and	 cash	 equivalents	 line	 includes	 bank	 overdrafts	 of	 £170000	 2008	 £188000	
the	 currency	 distribution	 of	 cash	 and	 cash	 equivalents	 at	 31	 december	 was	 as	 follows
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
sterling	 	 	 	 	 	 	 119	 	 66
euros	 	 	 	 	 	 	 190	 	 52
us	 dollars	 	 	 	 	 	 	 205	 	 139 	
hong	 kong	 dollars	 	 	 	 	 	 135	 	 172
singapore	 dollars	 	 	 	 	 	 	 88	 	 102
australian	 dollars	 	 	 	 	 	 110	 	 272
other	 currencies	 	 	 	 	 	 313	 	 212
	 	 	 	 	 	 	 1160 	 1015 page 36
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
17  current other financial liabilities 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
bank	 overdraft	 secured	 	 	 	 	 170	 188
bank	 loans	 secured	 	 	 	 	 	 273	 214
finance	 leases	 and	 hire	 purchase	 agreements	 secured	 	 	 	 86	 53
other	 loans	 	 	 	 	 	 –	 	 57
	 	 	 	 	 	 	 	 529	 512
the	 bank	 overdraft	 and	 loans	 are	 secured	 over	 certain	 of	 the	 group’s	 assets	 and	 undertakings	 and	 are	 denominated	 in	
sterling	 and	 taiwanese	 dollars
the	 finance	 leases	 and	 hire	 purchase	 agreements	 are	 secured	 on	 the	 assets	 to	 which	 they	 relate
the	 currency	 distribution	 of	 current	 financial	 liabilities	 at	 31	 december	 was	 as	 follows
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
sterling	 	 	 	 	 	 366	 445
hong	 kong	 dollars	 	 	 	 	 	 	 34	 	 10
singapore	 dollars	 	 	 	 	 	 3	 4
australian	 dollars	 	 	 	 	 	 53	 	 39
taiwan	 dollars	 	 	 	 	 	 	 73	 	 14 	
	 	 	 	 	 	 	 	 529	 512
18  current trade and other payables
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
trade	 payables	 	 	 	 	 	 2167	 2080
amounts	 due	 to	 contract	 customers	 	 	 	 	 	 8	 51
other	 taxation	 and	 social	 security	 costs	 	 	 	 	 	 441	 639
other	 payables	 	 	 	 	 	 	 260	 384
accruals	 and	 deferred	 income	 	 	 	 	 	 2052	 	 926
payments	 on	 account	 	 	 	 	 	 2474 	 300
	 	 	 	 	 	 	 	 7402	 4380
19  provisions 
	 	 	 	 	 	 	 	 2009 
        total 
        £000 
at	 1	 january	 2009	 	 	 	 	 	 	 114
additional	 provision	 in	 the	 year	 	 	 	 	 	 34
release	 of	 provision	 in	 the	 year	 	 	 	 	 	 16
utilisation	 of	 provision	 	 	 	 	 	 33
at 31 december 2009 	 	 	 	 	 	 	 99
all	 of	 the	 above	 amounts	 relate	 to	 warranties	 and	 are	 included	 within	 current	 liabilities
the	 warranty	 provisions	 relate	 to	 the	 chemical	 process	 plant	 manufacturing	 operation	 standard	 warranty	 terms	 are	 one	 to	
two	 years 2009
annual report and accounts
page 37
17666	 20052010	 proof	10
20 current tax liabilities
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
uk	 corporation	 tax	 	 	 	 	 	 –	 471
foreign	 tax	 	 	 	 	 	 	 32	 182
	 	 	 	 	 	 	 	 32	 653
21  noncurrent other financial liabilities
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
bank	 loans	 secured	 	 	 	 	 	 350	 550
other	 loans	 	 	 	 	 	 	 995	 	 1370
finance	 leases	 and	 hire	 purchase	 secured	 	 	 	 	 	 115	 80
	 	 	 	 	 	 	 	 1460	 2000
the	 currency	 distribution	 of	 noncurrent	 financial	 liabilities	 at	 31	 december	 was	 as	 follows
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
sterling	 	 	 	 	 	 373	 672
us	 dollars	 	 	 	 	 	 	 93	 	 104
hong	 kong	 dollars	 	 	 	 	 	 386	 872
australian	 dollars	 	 	 	 	 	 	 597	 352
singapore	 dollars	 	 	 	 	 	 	 11	 –
	 	 	 	 	 	 	 1460	 2000
maturity of debt
	 loans	 	 overdrafts	 finance	 leases
	 	 	 	 	 	 2009	 2008	 2009	 2008
	 	 	 	 	 	 £000	 £000	 £000	 £000
in	 one	 year	 or	 less	 	 	 	 452	 426	 100	 65
in	 more	 than	 one	 year	 but	 not	 more	 than	 two	 years	 	 	 1122	 	 1477	 	 79	 52
in	 more	 than	 two	 years	 but	 not	 more	 than	 five	 years	 	 247	 517	 	 48	 31
	 	 	 	 	 1821	 2420	 	 227	 	 148
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 page 38
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
22  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
	 	 	 	 	 	 	 2009 2009 2009
       £000 £000 £000
at	 1	 january	 2009	 	 	 	 	 262  160 422
credit	 to	 profit	 or	 loss	 	 	 	 	 24 8 32
other	 movements	 	 	 	 	 85  6 91
at 31 december 2009 	 	 	 	 323 158 481
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	
other	 movements	 relates	 to	 the	 withdrawal	 of	 certain	 tax	 allowances	
	 	 	 	 	 	 accelerated 	
	 	 	 	 	 	 	 capital	 temporary
	 	 	 	 	 	 	 allowances	 differences
	 	 	 	 	 	 	 2008	 2008	 2008
	 	 	 	 	 	 	 £000	 £000	 £000
at	 1	 january	 2008	 	 	 	 	 180	 36	 144
credit	 to	 profit	 or	 loss	 	 	 	 	 3	 	 23	 26
disposal	 of	 subsidiary	 	 	 	 	 –	 	 90	 90
other	 movements	 	 	 	 	 	 85	 	 129	 	 214
at	 31	 december	 2008	 	 	 	 	 262	 160	 422
23  obligations under finance leases
amounts	 payable	 under	 finance	 leases
	 	 	 present	 value	
	 minimum	 lease	 of	 minimum
	 payments	 lease	 payments
	 	 	 	 	 	 2009	 2008	 2009	 2008
	 	 	 	 	 	 £000	 £000	 £000	 £000
within	 one	 year	 	 	 	 	 100	 65	 94	 61
in	 the	 second	 to	 the	 fifth	 year	 inclusive	 	 	 	 127	 84 	 	 107	 72
	 	 	 	 	 	 227	 	 149	 201	 	 133
less	 future	 finance	 charges	 	 	 	 26 	 16	 –	 –
present value of lease obligations    201  133  201  133
less	 amount	 due	 for	 settlement	 within	 12	 months
shown	 under	 current	 liabilities	 	 	 	 	 86	 53
amount due for settlement after 12 months 	 	 	 	 	 115	 80 2009
annual report and accounts
page 39
17666	 20052010	 proof	10
24  total commitments under operating leases 
	 	 land	 and	 buildings	 plant
	 	 	 	 	 	 2009	 2008	 2009	 2008
	 	 	 	 	 	 £000	 £000	 £000	 £000
payable	 in	 one	 year	 	 	 	 	 426	 	 449 	 	 165	 	 152
payable	 in	 two	 to	 five	 years	 	 	 1094 	 1077	 	 467	 	 263
payable	 after	 five	 years	 	 	 1558	 1624	 –	 –
	 	 	 	 	 3078 3150	 632	 415
25  share capital
	 	 2009	 2008
	 	 	 	 	 	 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
266282	 shares	 were	 held	 by	 the	 norman	 hay	 plc	 employee	 benefit	 trust	 at	 31	 december	 2009	 2008	 266282	
at	 31	 december	 2009	 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	 64000	 ordinary	 shares	 these	 approved	 options	 are	 exercisable	 between	 1	 december	 2012	 and	 30	 november	 2019	 	
at	 625p	 per		 share
c	 on 	 976150	 ordinary	 shares	 these	 unapproved	 share	 options	 are	 exercisable	 between	 1	 december	 2009	 and	 	
30	 november	 2019	 at	 625p	 per	 share	 upon	 the	 share	 price	 achieving	 150p	 or	 a	 change	 in	 control
d	 on 	 125000	 ordinary	 shares	 these	 approved	 options	 are	 exercisable	 between	 12	 january	 2012	 and	 11	 january	 2019	 at	 	
795p	 per	 share page 40
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
26  acquisitions 
2009
on	 13	 july	 2009	 advanced	 surface	 treatments	 limited	 a	 trading	 subsidiary	 of	 norman	 hay	 plc	 acquired	 the	 shares	 of	 astec	
technologies	 dalian	 co	 ltd	
had	 the	 acquisition	 occurred	 on	 1	 january	 2009	 additional	 revenue	 to	 the	 group	 would	 have	 been	 £565000	 and	 additional	
profit	 to	 the	 group	 would	 have	 been	 £79000
the	 following	 net	 assets	 were	 acquired	
	 	 	 	 	 	 	 	 book 	 and	
	 	 	 	 	 	 	 	 fair 	 value	
	 	 	 	 	 	 	 	 £000 	
non current assets 
property	 plant	 and	 equipment	 	 	 	 	 	 7
current assets	 	 	 	 	 	 	 150
current liabilities	 	 	 	 	 	 	 174
net liabilities acquired	 	 	 	 	 	 17
consideration	 –	 costs	 on	 acquisition	 	 	 	 	 	 28
net	 liabilities	 acquired	 	 	 	 	 	 17
goodwill	 arising	 on	 acquisition	 	 	 	 	 	 45
2008
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 	
noncurrent 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	 prior	 year	 on	 the	 acquisition	 was	 as	 follows
	 	 	 	 	 	 	 	 	 £000
cash	 received	 as	 consideration	 	 	 	 	 	 100
net	 cash	 acquired	 on	 acquisition	 	 	 	 	 	 310
	 	 	 	 	 	 	 	 210 	 2009
annual report and accounts
page 41
17666	 20052010	 proof	10
26  acquisitions continued
in	 addition	 to	 the	 consideration	 received	 above	 a	 further	 £300000	 was	 due	 of	 this	 £100000	 was	 received	 in	 april	 2009	
	
in	 2010	 a	 further	 £10000	 and	 assets	 with	 a	 value	 of	 £75000	 were	 received	 as	 consideration	 in	 respect	 of	 the	 remaining	
£200000	 deferred	 consideration	 the	 remaining	 balance	 was	 written	 off	 in	 the	 2009	 financial	 statements
the	 negative	 goodwill	 of	 £231000	 arising	 upon	 the	 acquisition	 has	 been	 recognised	 in	 the	 consolidated	 statement	 of	
comprehensive	 income	 within	 administrative		 expenses	 in	 2008
	
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	
£385000	 2008	 £425000	 represents	 the	 contribution	 payable	 by	 the	 group	 to	 those	 schemes	
	
28  subsequent events 
in	 april	 2010	 the	 group	 disposed	 of	 30	 of	 its	 investment	 in	 tam	 international	 group	 holdings	 limited	 for	 £24m	 with	 	
the	 possibility	 that	 normet	 can	 at	 their	 option	 acquire	 100	 of	 the	 share	 capital	 in	 2014	 the	 consideration	 for	 this	
would	 be	 based	 upon	 a	 multiple	 of	 six	 times	 profit	 of	 the	 business	 in	 the	 year	 immediately	 preceding	 the	 sale	 under	 the	
call	 option	 the	 minimum	 amount	 due	 for	 the	 remainder	 of	 norman	 hay’s	 equity	 in	 tam	 is	 £51m	 and	 the	 maximum	 is	
£1425m	
29  related party transactions 
remuneration of key management personnel
	 	 	 	 	 	 	 2009	 2008
directors’	 remuneration	 consists	 of	 	 	 	 	 £000	 £000
aggregate	 emoluments	 	 	 	 	 407	 396
pension	 contributions	 	 	 	 	 	 52	 91
fees	 	 	 	 	 	 80	 74
	 	 	 	 	 	 	 	 539	 561
the	 highest	 paid	 director	 had	 a	 salary	 of	 £197000	 2008	 £206000	 including	 performance	 related	 pay	 benefits	 in	 kind	 and	
had	 a	 pension	 contribution	 of	 £32000	 2008	 £38000	
the	 company	 contributed	 £52000	 2008	 £91000	 towards	 the	 personal	 pension	 plans	 of	 two	 directors	 2008	 two	
including	 the	 highest	 paid	 director	
the	 share	 option	 expense	 in	 respect	 of	 key	 management	 personnel	 was	 £nil	 2008	 £17000	 page 42
17666	 20052010	 proof	10
2009
annual report and accounts
notes to the group financial statements continued
for the year ended 31 december 2009
30  sharebased payment 
norman	 hay	 plc	 operates	 two	 equitysettled	 sharebased	 remuneration	 schemes	 for	 employees	 a	 longterm	 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	 service	 period	
under	 the	 unapproved	 scheme	 the	 shares	 are	 only	 exercisable	 at	 a	 share	 price	 of	 150p	 or	 a	 change	 in	 control	
	 	 	 	 	 	 2009 2009	 2008	 2008
	 	 	 	 	 	 weighted	 	 weighted
	 	 	 	 	 	 average	 	 average
	 	 	 	 	 	 exercise	 	 exercise
	 	 	 	 	 	 pence number	 pence	 number
outstanding	 at	 the	 beginning	 of	 the	 year	 	 	 69 1330000	 69	 1330000
cancelled	 during	 the	 year	 	 	 69  1040150	 –	 –
replacement	 options	 issued	 during	 the	 year	 	 	 	 625 1040150	 –	 –
granted	 during	 the	 year	 	 	 795 125000	 –	 –
	 	 	 	 	 65 1455000	 69	 1330000
the	 weighted	 average	 exercise	 price	 of	 options	 outstanding	 at	 the	 end	 of	 the	 year	 was	 65p	 2008	 69p	
at	 the	 year	 end	 289850	 options	 2008	 nil	 options	 were	 exercisable	
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	 note	 25	 of	 the	 financial	 statements	 including	 periods	 during	 which	
they	 are	 exercisable	
there	 was	 no	 share	 options	 charge	 during	 the	 year	 as	 the	 charge	 had	 been	 overprovided	 in	 earlier	 years
the	 following	 information	 is	 relevant	 in	 the	 determination	 of	 the	 fair	 value	 of	 options	 granted	 during	 the	 year	 under	 the	
equitysettled	 sharebased	 remuneration	 schemes	 operated	 by	 norman	 hay	 plc
equitysettled – 125000 options granted during the year
option	 pricing	 model	 used	 	 	 	 	 	black–scholes
weighted	 average	 share	 price	 at	 grant	 date	 pence	 	 	 	 	 	 76
exercise	 price	 pence		 	 	 	 	 	 795
expected	 option	 life	 days	 	 	 	 	 	 1095
equitysettled
expected	 volatility	 	 	 	 	 	 	 20
expected	 dividend	 growth	 rate	 	 	 	 	 	 46
riskfree	 interest	 rate		 	 	 	 	 	 3
equitysettled – 64000 options granted during the year
option	 pricing	 model	 used	 	 	 	 	 black–scholes
weighted	 average	 share	 price	 at	 grant	 date	 pence	 	 	 	 	 	 606
exercise	 price	 pence		 	 	 	 	 	 625
expected	 option	 life	 days	 	 	 	 	 	 1095
equitysettled
expected	 volatility	 	 	 	 	 	 	 20
expected	 dividend	 growth	 rate	 	 	 	 	 	 46
riskfree	 interest	 rate		 	 	 	 	 	 3 2009
annual report and accounts
page 43
17666	 20052010	 proof	10
30  sharebased payment continued
equitysettled – 976150 options granted during the year
option	 pricing	 model	 used	 	 	 	 	 	 monte 	 carlo
weighted	 average	 share	 price	 at	 grant	 date	 pence	 	 	 	 	 	 606
exercise	 price	 pence		 	 	 	 	 	 625
expected	 option	 life	 days	 	 	 	 	 	 1095
equitysettled
expected	 volatility	 	 	 	 	 	 	 20
expected	 dividend	 growth	 rate	 	 	 	 	 	 46
riskfree	 interest	 rate		 	 	 	 	 	 3
31  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 
for	 all	 financial	 assets	 and	 liabilities	 the	 book	 value	 is	 an	 approximation	 of	 fair	 value	
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	
finance	 leases	 and	 hire	 purchase	 contracts
the	 group	 is	 exposed	 through	 its	 operations	 to	 the	 following	 financial	 risks	
 credit	 risk	
 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	 on	 the	 following	 pages	 page 44
17666	 20052010	 proof	10
2009
annual report and accounts
31  financial instruments – risk management continued
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	 has	 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	 15	
the	 maximum	 exposure	 to	 credit	 risk	 at	 31	 december	 2009	 is	 £10573000	 31	 december	 2008	 £8218000	
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	 2009	 and	 2008	 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	 2009	 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	 £43000	 2008	 £12000	 a	
reduction	 of	 100	 basis	 points	 would	 have	 had	 an	 equal	 and	 opposite	 effect	
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	 yearend	 date	 would	
have	 resulted	 in	 an	 estimated	 net	 increase	 in	 pretax	 profit	 and	 an	 increase	 in	 net	 assets	 of	 £2000	 2008	 £29000	 and	
the	 effect	 of	 a	 weakening	 of	 10	 in	 the	 rate	 of	 exchange	 in	 the	 currencies	 against	 sterling	 at	 the	 year	 end	 date	 would	 have	
resulted	 in	 an	 estimated	 net	 decrease	 in	 pretax	 profit	 for	 the	 year	 and	 a	 decrease	 in	 net	 assets	 of	 approximately	 £2000	
2008	 £31000	
notes to the group financial statements continued
for the year ended 31 december 2009 2009
annual report and accounts
page 45
17666	 20052010	 proof	10
31  financial instruments – risk management continued
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	 2009	 the	 group	 had	 unused	 working	 capital	 facilities	 of	 £1442000	 2008	 £1312000	
the	 annual	 working	 capital	 facility	 was	 increased	 to	 £2250000	 on	 12	 february	 2010	 and	 a	 guarantee	 facility	 for	 a	 further	
£2000000	 was	 granted	 after	 the	 group	 secured	 a	 major	 contract	 with	 rollsroyce	 singapore	 pte	 ltd	
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	 yearend	
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	 page 46
17666	 20052010	 proof	10
2009
annual report and accounts
	 	 2009	 2008
	 	 	 	 	 note	 £000 £000	 £000	 £000
fixed assets
tangible	 assets	 	 	 6	 2499	 	 2529
investments	 	 	 7	 13165	 	 13165
	 	 	 	 	 	 15664	 	 15694
current assets
debtors	 	 	 8	 3800	 	 2215
cash	 at	 bank	 and	 in	 hand	 	 	 1	 	 2
	 	 	 	 	 3801	 	 	 2217
creditors	 due	 within	 one	 year	 	 9	 3322	 	 3193
net current assetsliabilities	 	 	 	 479	 	 	 976
total assets less current liabilities	 	 	 	 16143	 	 14718
creditors due after one year	 	 10	 9177	 	 8160
provision for liabilities	 	 11	 29	 	 40
	 	 	 	 	 	 9206	 	 8200
net assets	 	 	 	 	 6937	 	 6518
capital and reserves
equity	 share	 capital	 	 	 12	 	 1481	 	 1481
share	 premium	 account	 	 13	 	 1253	 	 1253
revaluation	 reserve	 	 	 13	 	 517	 	 524
capital	 redemption	 reserve	 	 13	 	 94	 	 94
share	 scheme	 reserve		 	 13	 	 43	 	 43
profit	 and	 loss	 account	 	 13	 	 3549	 	 3123
shareholders’ funds	 	 	 	 	 6937	 	 6518
the	 financial	 statements	 were	 approved	 and	 authorised	 for	 issue	 by	 the	 board	 on	 19	 may	 2010
victor p bellanti 
director	
the	 notes	 shown	 on	 pages	 47	 to	 54	 form	 part	 of	 these	 financial	 statements
parent company balance sheet 
prepared	 in	 accordance	 with	 uk	 gaap	
at 31 december 2009  2009
annual report and accounts
page 47
17666	 20052010	 proof	10
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	 2006	
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	 write	 off	 the	 cost	 or	 valuation	 less	 the	 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	
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	 page 48
17666	 20052010	 proof	10
2009
annual report and accounts
3   employees 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
directors’	 remuneration	 consists	 of
aggregate	 emoluments	 	 	 	 	 407	 396
pension	 contributions	 	 	 	 	 	 52	 91
fees	 	 	 	 	 	 80	 74
	 	 	 	 	 	 	 	 539	 561
the	 highest	 paid	 director	 had	 a	 salary	 of	 £197000	 2008	 £206000	 including	 performance	 related	 pay	 benefits	 in	 kind	 and	
had	 a	 pension	 contribution	 of	 £32000	 2008	 £38000	
the	 company	 contributed	 £52000	 2008	 £91000	 towards	 the	 personal	 pension	 plans	 of	 two	 directors	 2008	 two	
including	 the	 highest	 paid	 director	
4   dividends
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
final	 dividend	 paid	 of	 20p	 2008	 26p	 per	 share	 	 	 	 	 291	 378
interim	 dividend	 paid	 of	 20p	 2008	 20p	 per	 share	 	 	 	 291	 291
	 	 	 	 	 	 	 582	 669
dividends	 declared	 after	 the	 balance	 sheet	 date	 but	 before	 approval	 of
financial	 statements	 of	 23p	 2008	 20p	 per	 share		 	 	 	 335	 291 	
dividends	 are	 recognised	 in	 the	 financial	 statements	 when	 they	 are	 paid	 and	 not	 declared	 the	 2009	 financial	 statements	
recognised	 the	 interim	 dividend	 that	 was	 both	 paid	 and	 declared	 in	 2009	 and	 also	 the	 final	 dividend	 that	 was	 paid	 in	 2009	
but	 declared	 in	 the	 prior	 year	 financial	 statements	 for	 the	 year	 ended	 31	 december	 2008
5  company profit for the financial year
the	 company	 has	 taken	 advantage	 of	 the	 exemption	 allowed	 under	 section	 408	 of	 the	 companies	 act	 2006	 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	 £1001000	 2008	 £1281000	 which	 is	 dealt	 with	 in	 the	 financial	 statements	 of	 the	 parent	
company
notes to the financial statements of the parent company 
continued 2009
annual report and accounts
page 49
17666	 20052010	 proof	10
6   tangible assets
	 	 	 	 	 freehold	 plant
	 	 	 	 	 	 land	 and	 vehicles
	 	 	 	 	 	 buildings	 and 	 fixtures	 computers	 total
	 	 	 	 	 	 £000	 £000	 £000	 £000
company
cost or valuation	 	 	 	 2916	 86	 29	 3031
at	 1	 january	 2009
additions	 	 	 	 	 11	 –	 1	 	 12
disposals	 	 	 	 –	 	 14	 –	 	 14
at 31 december 2009    2927 72 30  3029
depreciation
at	 1	 january	 2009	 	 	 	 420	 55	 27	 502
provided	 during	 the	 year	 	 	 25	 15	 2	 42
disposals	 	 	 	 –	 	 14	 –	 14
at 31 december 2009    445 56 29 530
net book value
at 31 december 2009    2482 16 1 2499
at	 31	 december	 2008	 	 	 	 2496	 31	 2	 2529
	 	 	 	 	 	 	 	 2009	 2008
freehold	 land	 and	 buildings	 included	 at	 	 	 	 	 £000	 £000
open	 market	 value	 on	 16	 november	 1992	 	 	 	 	 2850	 2850
cost	 	 	 	 	 	 77	 	 66
	 	 	 	 	 	 	 2927	 2916
the	 historical	 balances	 of	 freehold	 land	 and	 buildings	 are
cost	 	 	 	 	 	 2332	 2321
accumulated	 depreciation	 	 	 	 	 367 	 349
	 	 	 	 	 	 	 1965	 1972
7   investments 
	 	 	 	 	 	 	 	 £000 	
other	 investments	
cost	 	 	 	 	 	 	 13165
at	 1	 january	 2009	 and	 at	 31	 december	 2009 page 50
17666	 20052010	 proof	10
2009
annual report and accounts
7   investments continued
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
advanced	 surface	 treatments	 ltd	 england	 100	 surface 	 engineering	 and	 finishing	 of	 metals
armourcote	 malaysia	 sdn	 bhd	 malaysia	 100	 surface 	 engineering	 and	 finishing	 of	 metals
astec	 technologies	 dalian	 co	 ltd	 	 china 	 	 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	 tunneling	 and	 mining	 industry
pt	 tam	 international	 indonesia	 	 indonesia	 	 74	 	 supply	 of	 chemicals	 for	 the	
	 	 	 	 	 construction	 industry
all	 the	 above	 subsidiaries	 are	 included	 in	 the	 consolidated	 financial	 statements	
for	 all	 undertakings	 listed	 above	 the	 country	 of	 operation	 is	 the	 same	 as	 the	 country	 of	 incorporation	 or	 registration	
	 	 these 	 undertakings	 are	 indirectly	 held	 by	 norman	 hay	 plc	 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	
8   debtors 
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
trade	 debtors	 	 	 	 	 	 –	 46
amount	 owed	 by	 subsidiaries	 	 	 	 	 3726	 2099
other	 debtors	 	 	 	 	 	 	 15	 	 36
prepayments	 and	 accrued	 income	 	 	 	 	 	 26	 34
corporation	 tax	 	 	 	 	 	 33	 –
	 	 	 	 	 	 	 3800	 2215
all	 amounts	 included	 in	 debtors	 are	 receivable	 within	 one	 year
notes to the financial statements of the parent company 
continued 2009
annual report and accounts
page 51
17666	 20052010	 proof	10
9   creditors due within one year
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
bank	 overdraft	 and	 loans	 secured	 	 	 	 	 2353	 2771
trade	 creditors	 	 	 	 	 	 	 78	 	 103 	
amounts	 owed	 to	 subsidiaries	 	 	 	 	 716	 138
taxation	 and	 social	 security	 costs	 	 	 	 	 49	 24
accruals	 and	 deferred	 income	 	 	 	 	 126 	 107 	
corporation	 tax	 	 	 	 	 	 –	 50
	 	 	 	 	 	 	 3322	 3193
the	 bank	 overdraft	 and	 loans	 are	 secured	 over	 certain	 of	 the	 group’s	 assets	 and	 undertakings
10  creditors due after one year
	 	 	 	 	 	 	 	 2009	 2008
	 	 	 	 	 	 	 	 £000	 £000
bank	 loans	 secured	 	 	 	 	 	 350	 550
amounts	 owed	 to	 subsidiaries	 	 	 	 	 8827	 7610
	 	 	 	 	 	 	 9177	 8160
loans	 and	 overdrafts	 are	 repayable	 as	 follows
in	 one	 year	 or	 less	 	 	 	 	 	 2353	 2771
in	 more	 than	 one	 year	 but	 not	 more	 than	 two	 years	 	 	 	 350	 550
	 	 	 	 	 	 	 	 2703	 3321
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	
	 	 	 	 	 	 	 	 2009 
        £000 
at	 1	 january	 2009	 	 	 	 	 	 	 40
credit	 to	 profit	 and	 loss	 account	 	 	 	 	 	 11
at	 31	 december	 2009	 	 	 	 	 	 	 29
12  share capital
	 at 31 december 2009	 at 	 31	 december	 2008
	 	 	 	 	 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 page 52
17666	 20052010	 proof	10
2009
annual report and accounts
13  reserves
	 	 	 share	 	 capital	 share	 profit
	 	 share	 premium 	 	 revaluation	 	 redemption	 scheme	 and 	 loss
	 	 capital	 account	 reserve	 reserve	 reserve	 account	 total
company	 £000	 £000	 £000	 £000	 £000	 £000	 £000
at	 1	 january	 2009	 1481	 1253	 524	 94	 43	 3123	 6518
movement	 in	 reserves	 – – 7 – – 7 –
retained	 profit	 for	 the	 year	 – – – – – 1001 1001
dividends	 paid	 in	 year	 – – – – – 582 582
at 31 december 2009 1481 1253 517 94 43 3549 6937
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	 wholly	 owned	 subsidiaries	
the	 following	 table	 summarises	 the	 transactions	 with	 related	 parties	 during	 the	 year
	 	 	 	 	 	 	 expenses
	 	 	 	 	 	 	 paid	
	 	 	 at	 	 	 	 	 for 	 on	 at 	 31
	 	 	 1	 january	 loans 	 made	 interest	 management	 behalf 	 of	 december
	 	 	 2009	 repayments	 charged	 charges	 subsidiary	 2009
2009	 	 £000	 £000	 £000	 £000	 £000	 £000
tam	 international	 group	 holdings	 ltd	 1299 462 27 – – 1788
tam	 international	 uk	 ltd	 45 – – – 18 63
tam	 international	 hong	 kong	 ltd	 – – – – 15 15
lancy	 technology	 ltd	 	 15 15 – 15 – 15
	 	 	 1359 447 27 15 33 1881
	 	 	 	 	 	 	 expenses
	 	 	 	 	 	 	 paid	
	 	 	 at	 	 	 	 for 	 on	 at 	 31
	 	 	 1	 january	 loans 	 made	 interest	 management	 behalf 	 of	 december
	 	 	 2008	 repayments	 charged	 charges	 subsidiary	 2008
2008	 	 £000	 £000	 £000	 £000	 £000	 £000
tam	 international	 group	 holdings	 ltd	 422	 828	 49	 –	 –	 1299
tam	 international	 uk	 ltd	 33	 –	 –	 –	 12	 45
lancy	 technology	 ltd	 	 –	 –	 –	 15	 –	 15
	 	 	 455	 828	 49	 15	 12	 1359
all	 of	 the	 above	 companies	 are	 75	 owned	 subsidiary	 undertakings	 of	 norman	 hay	 plc	 either	 directly	 or	 indirectly	 owned
15  contingent liabilities 
there	 are	 crossguarantees	 in	 respect	 of	 bank	 borrowings	 of	 other	 group	 companies	
at	 31	 december	 2009	 the	 amount	 of	 bank	 loans	 and	 overdrafts	 outstanding	 in	 respect	 thereof	 was	 £194000	 2008	 £nil
the	 company	 is	 part	 of	 a	 vat	 group	 at	 december	 the	 vat	 liability	 of	 other	 companies	 in	 that	 vat	 group	 was	 £102000	
2008	 £205000
notes to the financial statements of the parent company 
continued 2009
annual report and accounts
page 53
17666	 20052010	 proof	10
16  cash flow statement 
the	 company	 is	 exempt	 from	 the	 requirement	 to	 publish	 a	 cash	 flow	 statement	 because	 a	 consolidated	 cash	 flow	
statement	 for	 the	 group	 has	 been	 presented	 see	 page	 18	
17  sharebased payment 
norman	 hay	 plc	 operates	 two	 equitysettled	 sharebased	 remuneration	 schemes	 for	 employees	 a	 longterm	 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	 service	 period	
under	 the	 unapproved	 scheme	 the	 shares	 are	 only	 exercisable	 at	 a	 share	 price	 of	 150p	 or	 a	 change	 in	 control	
	 	 	 	 	 	 2009 2009	 2008	 2008
	 	 	 	 	 	 weighted	 	 weighted
	 	 	 	 	 	 average	 	 average
	 	 	 	 	 	 exercise	 	 exercise
	 	 	 	 	 pence number	 pence	 number
outstanding	 at	 the	 beginning	 of	 the	 year	 	 	 69 1330000	 69	 1330000
cancelled	 during	 the	 year	 	 	 69  1040150	 –	 –
replacement	 options	 issued	 during	 the	 year	 	 	 	 625 1040150	 –	 –
granted	 during	 the	 year	 	 	 795  125000	 –	 –
	 	 	 	 	 65 1455000	 69	 1330000
the	 weighted	 average	 exercise	 price	 of	 options	 outstanding	 at	 the	 end	 of	 the	 year	 was	 65p	 2008	 69p	
289850	 options	 2008	 nil	 options	 were	 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	 note	 25	 of	 the	 group’s	 financial	 statements	 including	 periods	 over	
which	 they	 are	 exercisable	
there	 was	 no	 share	 options	 charge	 during	 the	 year	 as	 the	 charge	 had	 been	 overprovided	 in	 earlier	 years
the	 following	 information	 is	 relevant	 in	 the	 determination	 of	 the	 fair	 value	 of	 options	 granted	 during	 the	 year	 under	 the	
equitysettled	 sharebased	 remuneration	 schemes	 operated	 by	 norman	 hay	 plc
equitysettled – 125000 options granted during the year
option	 pricing	 model	 used	 	 	 	 	 	black–scholes
weighted	 average	 share	 price	 at	 grant	 date	 pence	 	 	 	 	 	 76
exercise	 price	 pence		 	 	 	 	 	 795
expected	 option	 life	 days	 	 	 	 	 	 1095
equitysettled
expected	 volatility	 	 	 	 	 	 	 20
expected	 dividend	 growth	 rate	 	 	 	 	 	 46
riskfree	 interest	 rate		 	 	 	 	 	 3 page 54
17666	 20052010	 proof	10
2009
annual report and accounts
17  sharebased payment continued
equitysettled – 64000 options granted during the year
option	 pricing	 model	 used	 	 	 	 	 black–scholes
weighted	 average	 share	 price	 at	 grant	 date	 pence	 	 	 	 	 	 606
exercise	 price	 pence		 	 	 	 	 	 625
expected	 option	 life	 days	 	 	 	 	 	 1095
equitysettled
expected	 volatility	 	 	 	 	 	 	 20
expected	 dividend	 growth	 rate	 	 	 	 	 	 46
riskfree	 interest	 rate		 	 	 	 	 	 3
equitysettled – 976150 options granted during the year
option	 pricing	 model	 used	 	 	 	 	 	 monte 	 carlo
weighted	 average	 share	 price	 at	 grant	 date	 pence	 	 	 	 	 	 606
exercise	 price	 pence		 	 	 	 	 	 625
expected	 option	 life	 days	 	 	 	 	 	 1095
equitysettled
expected	 volatility	 	 	 	 	 	 	 20
expected	 dividend	 growth	 rate	 	 	 	 	 	 46
riskfree	 interest	 rate		 	 	 	 	 	 3
18  post balance sheet events 
in	 april	 2010	 the	 company	 disposed	 of	 30	 of	 its	 investment	 in	 tam	 international	 group	 holdings	 limited	 for	 £24m	 with	
the	 possibility	 that	 normet	 can	 at	 their	 option	 acquire	 100	 of	 the	 share	 capital	 in	 2014		 the	 consideration	 for	 this	 would	
be	 based	 on	 a	 multiple	 of	 six	 times	 profit	 of	 the	 business	 in	 the	 year	 immediately	 preceding	 the	 sale	 under	 the	 call	 option	
the	 minimum	 due	 for	 the	 remainder	 of	 norman	 hay’s	 equity	 in	 tam	 is	 £51m	 and	 the	 maximum	 is	 £1425m	
notes to the financial statements of the parent company 
continued 2009
annual report and accounts
page 55
17666	 20052010	 proof	10
notice of meeting
notice is hereby given	 that	 the	 sixty	 fourth	 annual	 general	 meeting	 of	 the	 company	 will	 be	 held	 at	 norman	 hay	 plc	
godiva	 place	 coventry	 on	 23	 june	 2010	 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	 2009
2	 to 	 reelect	 as	 a	 director	 mr	 anthony	 hay	 who	 retires	 by	 rotation	 in	 accordance	 with	 article	 84	 of	 the	 articles	 of	
association
3	 to 	 reappoint	 the	 auditors	 a	 resolution	 to	 reappoint	 bdo	 llp	 as	 auditors	 will	 be	 proposed	 at	 the	 forthcoming	 annual	
general	 meeting
4	 to 	 authorise	 the	 directors	 to	 fix	 the	 auditors’	 remuneration
5	 to 	 consider	 and	 if	 thought	 fit	 approve	 as	 an	 ordinary	 resolution
51	 that	 in	 accordance	 with	 article	 7a	 of	 the	 company’s	 articles	 of	 association	 and	 part	 18	 chapter	 4	 of	 the	 companies	
act	 2006	 “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	
52	 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	 2011
ii	 be 	 limited	 to	 2000000	 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	
53	 this	 authority	 shall	 only	 be	 capable	 of	 variation	 revocation	 or	 renewal	 by	 the	 company	 in	 general	 meeting	
6	 	 to 	 consider	 and	 if	 thought	 fit	 approve	 as	 a	 special	 resolution	
	 that	 the	 directors	 be	 and	 are	 hereby	 empowered	 pursuant	 to	 section	 570	 of	 the	 act	 to	 allot	 equity	 securities	 as	
defined	 in	 that	 act	 and	 pursuant	 to	 an	 authority	 dated	 24	 june	 2009	 given	 to	 the	 directors	 to	 allot	 relevant	 securities	
as	 defined	 in	 that	 act	 as	 if	 the	 provisions	 of	 section	 5611	 of	 the	 act	 did	 not	 apply	 to	 any	 such	 allotment	 until	 the	
conclusion	 of	 the	 annual	 general	 meeting	 to	 be	 held	 in	 2011	 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	 any	 aggregate	 nominal	 amount	 	
of	 £75000	
registered	 office	 by	 order	 of	 the	 board
godiva	 place	 brigid m cattle
coventry	 	 19	 may	 2010
cv1	 5pn	
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	 6	 pm	 on	 21	 june	 2010	 or	 in	 the	 event	 that	
the	 meeting	 is	 adjourned	 on	 the	 register	 of	 members	 as	 at	 6	 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	 page 56
17666	 20052010	 proof	10
2009
annual report and accounts
shareholder’ s notes 17666	 18052010	 proof	6 17666	 18052010	 proof	6
w elc ome
norman hay plc is one of the world’s leading specialist 
chemical and systems suppliers to the aerospace 
automotive oil  gas and construction industries 
our advanced products are designed to enable our 
customers to maximise the reliability and operating 
performance of their components and materials
our year in brief 1
introduction – our businesses 2
chairman’s statement 4
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 statement of  
comprehensive income 16
consolidated statement of  
financial position 17
consolidated cash flow statement 18
consolidated statement of  
changes in equity 19
notes to the group financial statements 20
parent company balance sheet 46
notes to the financial statements of 
the parent company 47
notice of meeting 55
advisers inside back cover
contents
secretary and registered office
brigid m cattle
godiva place
coventry  
cv1 5pn
registered number 405025
independent auditors
bdo 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
4 sun court
66–67 cornhill
london 
ec3v 3nb 
we take our responsibilities seriously and work continuously  
to improve our environmental performance 
 
advisers
the environment matters 17666	 18052010	 proof	6 17666	 18052010	 proof	6
specialist chemicals and systems
norman hay plc
godiva place
coventry
cv1 5pn
t  44 0 24 7622 937 3
f 44 0 24 7622 4420
e infonormanhay com
www normanhay com
2 0 0 9
annual report and accounts
annual report and accounts 2009 norman hay plc


Summary:
 2009
annual report and accounts
17666	 20052010	 proof	10
page 7
introduction
2009	 turned	 out	 to	 be	 a	 challenging	 year	 for	 the	 global	
economy	 with	 many	 sectors	 affected	 by	 harsh	 trading	
conditions	 the	 markets	 in	 which	 norman	 hay	 operates	
were	 no	 exception	
the	 dramatic	 reduction	 in	 the	 automotive	 sector	 and	
reduced	 demand	 from	 the	 oil	 	 gas	 industries	 in	 the	
second	 half	 of	 the	 year	 had	 a	 significant	 impact	 on	
performance
however	 we	 responded	 swiftly	 and	 decisively	 to	 the	
worldwide	 economic	 downturn	 by	 restructuring	 and	
adjusting	 our	 plans	 to	 meet	 the	 changing	 operating	
environment	
underpinning	 this	 was	 a	 reduction	 of	 the	 cost	 base	 in	 our	
existing	 operations	 in	 order	 to	 reflect	 changed	 market	
conditions	 careful	 financial	 management	 within	 our	
businesses	 coupled	 with	 firm	 control	 of	 expenditure	 and	
group	 resources	 ensured	 that	 we	 were	 able	 to	 adjust	 to	
these	 demanding	 economic	 conditions	
these	 strong	 controls	 have	 also	 enabled	 us	 to	 continue	 to	
invest	 in	 new	 opportunities	 where	 they	 arise	 and	 whilst	
our	 recent	 investments	 have	 led	 to	 an	 increase	 in	 our	
overhead	 base	 these	 additional	 costs	 have	 been	 focused	
and	 tightly	 controlled
the	 majority	 of	 our	 operations	 were	 affected	 by	 the	
decline	 in	 world	 markets	 conditions	 started	 to	 ease	
during	 the	 second	 half	 of	 2009	 and	 this	 combined	 with	
the	 actions	 we	 had	 taken	 in	 the	 first	 half	 saw	 first	 half	
trading	 losses	 of	 £05m	 reversed	 to	 a	 trading	 profit	 of	
£04m	 in	 the	 second	 half
operations
norman	 hay	 provides	 products	 and	 services	 to	 customers	
across	 diverse	 markets	 and	 is	 focused	 on	 key	 global	
market	 sectors	 through	 its	 main	 brands
ultraseal –	 impregnation	 sealants 
ultraseal	 was	 particularly	 impacted	 by	 the	 decline	 in	 the	
automotive	 sector	 and	 first	 half	 results	 reflected	 the	
massive	 global	 decline	 in	 vehicle	 production	 that	 hit	 hard	
in	 the	 last	 quarter	 of	 2008	
in	 the	 first	 half	 of	 2009	 sales	 were	 down	 46	 on	 the	 first	
half	 of	 the	 previous	 year	 but	 the	 second	 half	 was	 much	
more	 encouraging	 with	 business	 beginning	 to	 recover	 to	
more	 normal	 levels	 in	 most	 markets
this	 rise	 in	 revenues	 in	 the	 second	 half	 of	 2009	 resulted	
in	 full	 year	 sales	 being	 down	 23	 on	 the	 previous	 year	 a	
marked	 improvement	 on	 the	 trend	 in	 the	 first	 half
in	 order	 to	 manage	 this	 decline	 in	 business	 careful	 cost
management	 plans	 were	 put	 in	 place	
in	 north	 america	 with	 automotive	 demand	 beginning	
to	 fall	 from	 midway	 through	 2008	 as	 the	 global	 recession	
made	 its	 mark	 we	 restructured	 our	 usa	 operation	 to	
help	 offset	 the	 lower	 levels	 of	 business	
automotive	 business	 in	 north	 america	 recovered	 in	 the	
latter	 part	 of	 2009	 reflecting	 wider	 economic	 conditions	
and	 this	 trend	 was	 repeated	 in	 europe	 and	 the	 asia
pacific	 region
ultraseal’s	 strategy	 of	 diversifying	 its	 operations	
geographically	 making	 it	 less	 dependent	 on	 western	
economies	 has	 certainly	 helped	 the	 business	 through	
this	 tumultuous	 period
we	 are	 cautiously	 optimistic	 for	 the	 business	 in	 2010	
as	 there	 are	 signs	 of	 a	 return	 to	 previous	 levels	 of	
automotive	 manufacturing	 it	 remains	 to	 be	 seen	 if	 this	
resurgence	 is	 sustainable	 but	 ultraseal	 international	
has	 focused	 and	 structured	 its	 worldwide	 operations	 to	
take	 advantage	 of	 any	 new	 opportunities	 that	 arise	 in	 its	
global	 markets	
chief executive ’ s business review
supplying high technology chemical 
systems combined with bespoke 
engineering solutions for the 
aerospace automotive oil  gas and 
construction industries around the 
world is proving to be an increasingly 
successful formula for the group
“
” 17666	 20052010	 proof	10
2009
annual report and accounts
page 8 page 8 page 8
chief executive ’ s business review continued
armourcote –	 surface	 coatings
armourcote	 serves	 a	 number	 of	 markets	 including	
automotive	 engineering	 and	 oil	 	 gas
the	 uk	 businesses	 focused	 on	 the	 automotive	 sector	
were	 significantly	 impacted	 by	 the	 recession	 this	
has	 only	 recently	 begun	 to	 abate	 albeit	 at	 a	 modest	
pace	 the	 largest	 reduction	 was	 in	 our	 coventry	 based	
electroplating	 operation	 which	 achieved	 only	 46	 of	 its	
expected	 revenue	
in	 october	 we	 acquired	 business	 from	 a	 competitor	
which	 has	 helped	 to	 reduce	 the	 coventry	 unit’s	
dependence	 on	 the	 uk	 automotive	 sector
also	 during	 the	 year	 the	 group	 disposed	 of	 its	 remaining	
wet	 processing	 operations	 on	 our	 main	 coventry	 site	
the	 consideration	 receivable	 from	 this	 disposal	 is	 based	
upon	 the	 future	 sales	 of	 the	 purchaser	 there	 is	 no	 set	
termination	 date	 for	 this	 agreement
the	 leeds	 east	 kilbride	 and	 irvine	 operations	 are	
predominantly	 focused	 on	 the	 oil	 	 gas	 markets	 these	
businesses	 performed	 strongly	 in	 the	 first	 half	 with	
turnover	 up	 8	 on	 the	 previous	 year	
however	 conditions	 slowed	 in	 the	 second	 half	 and	 the	
reduction	 in	 revenues	 has	 continued	 into	 2010
the	 impact	 of	 the	 recession	 on	 the	 overseas	 operations	
has	 been	 varied	 as	 follows
 the	 operation	 in	 port	 klang	 malaysia	 moved	 into	
profit	 in	 early	 2010	
 hitech	 coatings	 in	 perth	 western	 australia	 saw	
year	 on	 year	 revenue	 fall	 by	 18	 as	 a	 consequence	 of	
the	 decline	 in	 revenue	 a	 reduction	 in	 management	
overheads	 was	 undertaken	 to	 provide	 a	 lower	 cost	
base	 for	 the	 future
 astec	 dalian	 in	 eastern	 china	 where	 we	 manage	 and	
operate	 a	 customer’s	 inhouse	 zinc	 plating	 operation	
performed	 well	 and	 was	 profitable	 in	 2009	 volumes	
have	 increased	 considerably	 in	 recent	 months	 on	
the	 back	 of	 a	 recovery	 in	 the	 us	 automotive	 market	
and	 continuing	 expansion	 of	 the	 chinese	 domestic	
market	
	 we	 are	 currently	 exploring	 further	 opportunities	 to	
roll	 out	 this	 concept	 of	 managing	 our	 customers’	 in
house	 processing	 plants	 on	 a	 global	 basis
tam international	 –	 construction	 chemicals
tam	 has	 made	 significant	 progress	 since	 it	 became	 part	
of	 the	 norman	 hay	 group	 three	 years	 ago	 turnover	 grew	
by	 15	 in	 2009	 although	 this	 was	 below	 our	 forecasts	
delays	 in	 infrastructure	 projects	 in	 hong	 kong	 and	
taiwan	 have	 impacted	 profitability	 resulting	 in	 an	 overall	
loss	 for	 the	 year	
despite	 the	 global	 recession	 we	 have	 continued	 to	 invest	
in	 the	 geographical	 expansion	 of	 tam	 which	 included	
the	 setting	 up	 of	 a	 subsidiary	 in	 indonesia	 to	 service	 the	
large	 gold	 mining	 industry	 in	 the	 region	
in	 the	 latter	 part	 of	 2009	 tam	 international	 worked	 with	
normet	 a	 leader	 in	 the	 supply	 of	 equipment	 and	 vehicles	
for	 mining	 and	 underground	 construction	 which	 proved	
to	 be	 mutually	 beneficial	
as	 a	 consequence	 of	 this	 successful	 working	 relationship	
we	 have	 now	 formed	 a	 strategic	 alliance	 with	 normet	
who	 in	 april	 2010	 purchased	 30	 of	 norman	 hay’s	
interest	 in	 tam’s	 issued	 share	 capital	 for	 £24m	 with	
the	 possibility	 that	 normet	 can	 at	 their	 option	 acquire	
100	 of	 the	 share	 capital	 in	 2014	 the	 consideration	 for	
this	 would	 be	 based	 upon	 a	 multiple	 of	 six	 times	 profit	 of	
the	 business	 in	 the	 year	 immediately	 preceding	 the	 sale	
under	 the	 call	 option	 the	 minimum	 amount	 due	 for	 the	
remainder	 of	 norman	 hay’s	 equity	 in	 tam	 is	 £51m	 and	
the	 maximum	 is	 £1425m
the	 terms	 of	 this	 transaction	 mean	 that	 from	 the	 date	 of	
the	 initial	 sale	 tam	 will	 no	 longer	 be	 accounted	 for	 as	 a	
subsidiary
the	 partnership	 brings	 together	 the	 construction	
chemical	 consumables	 of	 tam	 with	 the	 international	
manufacture	 and	 enhanced	 distribution	 of	 normet’s	
application	 hardware	 both	 companies	 share	 a	 common	
global	 marketplace	 in	 construction	 solutions	 for	
waterproofing	 injection	 and	 repair	 of	 structures	 together	
with	 major	 construction	 projects	 in	 civil	 engineering	
tunneling	 and	 mining	 and	 we	 believe	 that	 this	 will	
considerably	 strengthen	 both	 of	 our	 companies	
this	 new	 partnership	 should	 help	 to	 accelerate	 the	
growth	 of	 the	 tam	 business	 and	 we	 look	 forward	 to	 a	
successful	 working	 alliance	 with	 normet
norman hay’s position is strong and 
the actions we have taken to improve 
efficiency and diversify in to growth 
markets will leave us well placed to 
benefit from economic recovery
“
” 17666	 20052010	 proof	10
page 9
2009
annual report and accounts
norman hay engineering –	 chemical	 process	 plant
2009	 was	 a	 very	 successful	 year	 for	 norman	 hay	
engineering	 with	 a	 record	 value	 of	 orders	 received	 for	
its	 plasticraft	 and	 ardrox	 branded	 chemical	 process	
equipment	
during	 the	 year	 we	 have	 continued	 to	 build	 and	 develop	
the	 company’s	 reputation	 as	 a	 major	 supplier	 to	 the	
world’s	 aerospace	 market
the	 majority	 of	 equipment	 is	 utilised	 in	 the	 aerospace	
industry’s	 original	 equipment	 manufacture	 oem	 and	
maintenance	 repair	 and	 overhaul	 mro	 operations	 two	
major	 contracts	 in	 each	 sector	 formed	 the	 basis	 for	 the	
2009	 success
through	 the	 company’s	 achievements	 in	 the	 year	
norman	 hay	 engineering	 has	 secured	 a	 record	 order	
book	 for	 2010	 including	 projects	 in	 saudi	 arabia	 and	
singapore	
this	 provides	 us	 with	 an	 enviable	 position	 of	 continuity	
and	 stability	 throughout	 2010	 and	 2011	 this	 will	 	
enable	 the	 business	 to	 continue	 to	 strengthen	 as	 a	
leading	 player	 in	 the	 uk	 and	 global	 marketplace
during	 the	 first	 two	 quarters	 of	 2010	 we	 have	 	
continued	 to	 enjoy	 a	 strong	 level	 of	 enquiries	 for	 other	
major	 installations
cash
despite	 challenging	 trading	 conditions	 in	 2009	 the	
group	 generated	 a	 positive	 cash	 flow	 and	 reduced	 total	
bank	 borrowings	 to	 £08m	 from	 £10m	 at	 the	 end	 of	 the	
previous	 year
following	 the	 part	 disposal	 of	 tam	 international	 in	 april	
2010	 we	 are	 currently	 cash	 positive
dividends
the	 level	 of	 dividend	 payment	 to	 shareholders	 is	 a	
reflection	 of	 the	 board’s	 confidence	 in	 the	 group
having	 maintained	 the	 half	 year	 payout	 at	 the	 2008	
level	 board	 members	 felt	 that	 recent	 trading	 conditions	
enabled	 a	 second	 interim	 dividend	 of	 23p	 per	 share	 to	 be	
paid	 giving	 a	 total	 dividend	 for	 the	 year	 of	 43p	
the	 second	 interim	 dividend	 was	 paid	 in	 order	 to	 bring	
the	 income	 forward	 into	 the	 200910	 tax	 year	 and	
replaces	 the	 final	 dividend
o u tlook
supplying	 high	 technology	 chemical	 systems	
combined	 with	 bespoke	 engineering	
solutions	 for	 the	 aerospace	 automotive	 oil	
	 gas	 and	 construction	 industries	 around	
the	 world	 is	 proving	 to	 be	 an	 increasingly	
successful	 formula	 for	 the	 group
although	 we	 expect	 challenging	 conditions	
to	 continue	 in	 2010	 norman	 hay’s	 position	
is	 strong	 and	 the	 actions	 we	 have	 taken	
to	 improve	 efficiency	 and	 to	 diversify	 our	
productled	 businesses	 into	 growth	 markets	
will	 leave	 us	 well	 placed	 to	 benefit	 from	
economic	 recovery	
victor p bellanti
chief	 executive
19	 may	 2010