yule catto  co plc
annual report
for the year ended 31 december 2007
being part 
of all our lives a year of solid progress in the
development of the group good growth 
in polymers and ongoing improvement
within impact chemicals
contents
01 financial highlights
02 being part of all our lives
06 group overview
07 yule catto around the world
08 chairman’s statement
business review
09 chief executive’s report
09 polymer chemicals
11 pharma chemicals
12 impact chemicals
13 financial review
15 corporate social responsibility report
21 directors and advisers
22 report of the directors
24 corporate governance
28 directors’ remuneration report
33 directors’ interests
35 statement of directors’ responsibilities
group financial statements
36 independent auditors’ report 
37 consolidated income statement
38 consolidated balance sheet
39 consolidated cash flow statement
40 consolidated statement of recognised income and expense
41 notes to the consolidated financial statements
company financial statements
70 independent auditors’ report 
71 company balance sheet
72 notes to the company financial statements
other information
80 principal subsidiaries and joint ventures
82 five year financial summary
83 notice of meeting yule catto  co plc 
annual report and accounts 2007 
01
financial highlights
underlying performance
a
ifrs
2007 2006 2007 2006
£’000 £’000 £’000 £’000
t otal sales
b
580641 557357 580641 565786 
ebitda
c
62027 61272 62027 61272 
operating profit 46014 42959 28574 21451 
profit before taxation 34517 31516 21524 13626 
profit attributable to equity holders of the parent 25192 21352 13785 3427 
earnings per share 173p 147p 95p 24p 
dividends per share
d
96p 93p 96p 93p 
net borrowings 170831 166271 150341 150656 
cash generated from operations 49447 46376 49447 46376 
free cash flow before dividends
e
14012 8479 14012 8479 
the above table represents the results of yule catto  co plc its subsidiaries and its share of joint ventures
a underlying performance excludes special items as shown on the consolidated income statement
b as defined in the accounting policies at note 2
c as defined in the accounting policies at note 2 and reconciled at note 34
d dividends comprise an interim dividend paid during the year and a final dividend proposed at the year end see note 11
e as shown within the consolidated cash flow statement on page 39
• underlying profit before tax up 10 to £345 million 
• another year of good growth in polymers operating profit up 62
• ongoing improvement within impact chemicals
t otal sales
£5806m
earnings per share
17  3p
profit before taxation
£345m
increase in dividend per share
32
 underlying performance yule catto  co plc 
annual report and accounts 2007 
02
being part of all our lives
at home at work and in 
the community
we are a leading chemicals group and a trusted
partner for manufacturers around the world
they use our raw materials to produce a wide
range of products that are an essential part 
of everyday life drugs detergents plastics
adhesives paper carpet… our technology
contributes to every aspect of modern life
yule catto  co plc 
annual report and accounts 2007 
02 being part of all our lives
at home
we produce a range of polymer
dispersions or ‘emulsions’ for many of the
worlds largest paint manufacturers which
form the base for the decorative paint we
see all around us in every day life
the group produces hair dyes and
fragrance ingredients
our polymer dispersions are used in a
range of adhesives for the construction
packing wood and label industry they
are in used throughout the home in a
huge range of applications – such as 
tile adhesives and sealants
3
2
1
1 coatings 3 adhesives 2 personal care being part of all our lives
at work
we provide raw material to the plastics
industry via our auxiliary polymer
business whilst our flamtard flame
retardant product is used in plastic 
cable coatings which has superior
environmental characteristics and lower
smoke emissions than alternatives
we are a leading producer of nitrile latex
which is used in the manufacture of
medical and ‘clean room’ gloves
we are a leading provider of sbr latex
which has extensive use in building
materials as well as textiles and as 
a foam backing for carpets and rugs
6
4
5
6 plastics 5 gloves 4 construction we produce a range of pharmaceutical
products that contribute to individuals
health and well being these include 
antibacterials antiulcer and heart
drugs we also produce antiparasitic
drugs which help people in developing
countries
we are the worlds leading producer of
ultramarine blue we also produce a
range of photochromic pigments used in
applications as diverse as in light reactive
glasses and antifraud protection
we produce high impact flavour
ingredients for the food and 
drink industry
being part of all our lives
in the community
7
9
8
7 health 8 pigments 9 food and drink group overview
yule catto  co plc 
annual report and accounts 2007 
06
t otal sales by destination
as derived from note 4 to the financial statements on page 47
■ uk – 157
■ other europe – 399
■ asia – 259
■ rest of world – 185
■ polymer chemicals – 798
■ pharma chemicals – 144
■ impact chemicals – 58
divisional operating profit
as derived from note 4 to the financial statements on page 45
dividend per share
9 6p
underlying borrowings
£1 70 8m
polymer chemicals
key products
– emulsions
– synthetic latices
– adhesives
– natural rubber latex
– liquid polybutadiene
– polyvinyl alcohol
– polyvinyl acetate
– alkyd and polyester resins
markets
– surface coatings
– construction
– dipping – eg gloves
– carpets and non woven textiles
– paper
– adhesives
– pvc manufacture
pharma chemicals
key products
– generic and ethical 
pharmaceutical actives
– development and manufacture 
of clinical phase compounds
markets
– generic and ethical drug manufacture
– generic drugs
impact chemicals
key products
– ultramarine pigments
– photochromic dyes
– hair dyes
– iodine and metal salts
– flavour and fragrance ingredients
markets
– plastics
– ophthalmic
– timber treatment
– photographic
– cosmetics
– catalyst precursors
– food ingredients
– fragrances
– toiletries
– detergents yule catto around the world
■ polymer chemicals
■ pharma chemicals
■ impact chemicals
locations
9 hartlepool – oxford chemicals ltd
10 accrington – william blythe ltd
11 batley – synthomer ltd
12 hull – holliday pigments ltd
13 huddersfield – james robinson ltd
14 ossett – synthomer ltd
15 stallingborough – synthomer ltd
16 harlow – synthomer ltd
17 langelsheim – synthomer gmbh
18 barneveld – pfw aroma chemicals bv
19 oss – synthomer bv
20 hasselt – synthomer hasselt bv
21 comines – holliday pigments sa
22 mouscron – synthomer sa
23 dieburg – james robinson gmbh
24 milan – uquifa italia spa
25 lliçà de vall – uquifa sa
26 barcelona – holliday chemicals espana
sa  uquifa sa
27 sant celoni – uquifa sa
9
10
13
11
14
12
15
18
19 20
16
21
22
23
17
24
25 26
27
1
3
4 5
8
6
7
2
locations
1 cuernavaca – uquifa mexico sacv
2 durban – revertex chemical pty ltd
3 damman – synthomer middle east ltd
4 vapi – james robinson india pvt ltd
5 kluang – revertex malaysia 
synthomer sdn bhd
6 klang – revertex finewaters sdn bhd
7 bangkok – revertex thailand ltd
8 guangzhou – yule catto asia ltd
yule catto  co plc 
annual report and accounts 2007 
07
principal subsidiaries and joint ventures as listed on pages 80 to 81 yule catto  co plc 
annual report and accounts 2007 
08
2007 was a good year for the group 
we made steady progress across all 
of our divisions in both our operational
performance and strategic plans to
develop the group for the future this
showed through in the financial results
the polymers business had another
good year of growth in volumes and
profit our strategy in polymers remains
focused on geographical expansion
around our existing business hubs and
developing market sectors where our
product technology and manufacturing
capabilities give us real competitive
advantage 
we are investing heavily in additional
nitrile capacity in malaysia to take full
advantage of the continued growth in 
this product and the asian region
our pharma business continued to 
grow the range of generic and ethical
products that it plans to manufacture 
by registering further drug master files in
the year as we had previously indicated
pharma earnings declined in part due to
the phasing of orders in the second half
of the year we announced plans to exit
our italian site to improve the operational
cost base and the productivity of the
business this exit is proceeding to plan 
impact chemicals has had a challenging
year but has delivered significant
improvement we are clearly seeing 
the benefits of our strategy to raise 
the performance of these businesses
through restructuring and focusing 
on market segments offering better
margins and growth 
overall underlying group profit 
before taxation increased some 10 
to £345 million and earnings per 
share by 18 to 17 3 pence per share
the directors recommend a final dividend
of 57 pence a share which would make
the full payment for the year 96 pence
2006 93 pence a share an increase 
of 32 subject to shareholders’
approval the dividend will be paid on 
4 july to members on the register at 
close of business on 6 june
the working conditions and safety 
of our employees everywhere remains
paramount in the operation of our
business we set targets annually to
reduce levels of lost time accidents 
and against this measure we have been
improving our safety performance for
many years i am pleased we have made
further progress in 2007 and have had
our best ever year in terms of both 
“all accident” and “lost time accident”
rates we remain fully committed to the
principles of sustainable development
and have made significant progress
against all of the 10year targets in our
sustainable development programme
this has been a year in which much has
been achieved on behalf of the directors
and shareholders i would like to thank 
all our employees everywhere for their
commitment and contribution towards
the company’ s success
outlook
the closing months of 2007 and the 
start of 2008 were characterised by
concerns of lower economic growth in
the usa and parts of western europe
we have however made a satisfactory
start to 2008 with continuing momentum
in our polymers business 
chairman’s statement
we will continue to expand the geography
and customer base of our principal
polymers business new product
development remains an important
element of how we will achieve this 
in addition we continue to look for
additional ways to improve our
productivity and reduce our cost base
we have already committed ourselves 
to further investment in asia for significant
additional latex capacity and should
benefit from the rapid growth there
consequently we expect another year of
good results from our polymer business
in our pharma business we will continue
to develop new generic products for future
filing whilst our previously announced re
structuring will be complete by the end 
of 2008 the remedial measures taken in
the impact chemicals business should
lead to further improvement in its results
as we enter the year the raw material
situation for monomers looks set to
remain volatile we coped well with 
this situation in polymers in 2007 through
selling price increases and reformulation
and will continue to manage our response
in a similar manner as 2008 progresses
anthony richmondwatson
12 march 2008 
we made steady progress across 
all of our divisions in both our
operational performance and
strategic plans to develop the group yule catto  co plc 
annual report and accounts 2007 
09
overview
2007 has been a year in which the group
has moved forward on a number of fronts
to develop the business the result of this
process is clearly demonstrated by the
10 increase in underlying group profit
before taxation it has also been another
year in which the recent history of rising
raw material prices has persisted and 
we have had to work hard to mitigate the
impact of this against this background
we have made good progress across 
the portfolio and although the global
economy looks challenging we are
cautiously optimistic about the group’ s
performance in 2008
polymers 73 of total sales grew 
sales volumes by 43 and underlying
operating profit by 62 this was
achieved in an environment of volatile 
and generally increasing monomer
pricing and ongoing supply constraints
we sustained our operating margins 
year on year at 97
the previously announced expansion 
of nitrile capacity in kluang malaysia 
was brought on line in november and
immediately sold out the group has
committed itself to significant further
expansion during 2008 this site is well
located to provide reliable supply to major
glove manufacturers market growth for
synthetic gloves remains strong and this
investment confirms our intent to remain
as a leading supplier
we also completed the expansion of our
mouscron belgium dispersion facility
where capacity increased by 30
pharmaceuticals 11 of total sales 
saw sales little changed at £638 million
however second half year sales were
substantially lower than the first half due
to order phasing which in part resulted 
in reduced underlying profitability of 
£7 4 million the generic drug market
continues to grow strongly but as
always is characterised by price erosion
following patent expiry our strategy to
address this is to maximise operating
efficiencies whilst expanding our product
portfolio during the year we announced
the closure of our italian site and the
transfer of production to mexico and
spain to improve the cost base and
productivity of the business looking
forward our programme of increasing
our generic drugs pipeline made good
progress with a further six drug master
files registered
impact chemicals 16 of total sales
has suffered over several years from
aggressive competition and suboptimal
assets during 2007 we announced the
closure of two facilities within this business
the hull plant of holliday pigments and
the german plant of james robinson
both plant closures are running to
schedule in early 2008 we announced 
a restructuring of the william blythe plant
in church we have already seen some 
of the benefit of these actions with an
increase in underlying profits in 2007 to
£30 million from £10 million in 2006
good cash management remains 
a key priority for the group borrowings
increased modestly but this was
attributable to the impact of the
strengthening euro on our euro
denominated debt during the year 
we have focused hard on the effective
management of working capital with
average working capital reducing by 
£66 million compared with prior year
whilst capital expenditure was at similar
levels to 2006 we invested around 
£90 million in restructuring the majority
of which we will recover when we sell 
the sites and assets we are exiting 
polymer chemicals
we operate 13 factories within four
geographical regions europe pacific
rim middle east and south africa core
products are waterbased polymers
both dispersions and latices polyvinyl
alcoholacetate and a number of more
specialised products
2007 was another good year for our
polymer businesses sales volumes 
were at record levels up 43 with 
sales turnover up 67 operating profits
were up 62 compared to 2006 and
operating margins were sustained at
97 these good results were achieved
against a background of restricted
monomer availability volatile prices 
and restructuring within some of our 
core markets
although the global economy 
looks challenging we are cautiously
optimistic about the group’s
performance in 2008
business review
chief executive’s report yule catto  co plc 
annual report and accounts 2007 
10
business review
chief executive’s report continued
whilst the product portfolio and the
geographic coverage of our operations
remained unchanged the main growth 
of our activities occurred in asia in
kluang malaysia in order to meet the
growing sales demand we were able to
bring forward our latex expansion plans 
in two phases with a 33 increase in
capacity in april and a further expansion
in november effectively increasing 
the installed capacity by circa 60
compared to 2006 concurrently the
mouscron belgium dispersion plant 
was subject to a major debottlenecking
project which was completed in late 
2007 increasing the dispersion capacity
of the site by 30 in addition minor 
debottlenecking took place on the latex
plant in langelsheim germany in the
usa we initiated dispersion manufacture
under a toll manufacturing arrangement
with a local polymeriser
these enhancements in capacity 
are already being effectively used and
further production capacity expansion 
is planned for 2008 nevertheless
maintaining the excellent growth seen
over the past few years was a difficult
challenge in 2007  polymer producers
generally had to endure repeated
interruptions in raw material supplies 
and increases in all major monomer
costs the industry was characterised 
by feedstock shortages which in turn
affected the supply lines of all our top 
ten raw materials many of our suppliers
called force majeure as they either were
unable to get the necessary feedstock
volumes or they experienced significant
plant outages this situation was not
helped by the cost of oil the backbone 
of the feedstock supply which increased
69 during the year 
as a result we worked hard to reflect
these costs in the market place
however we hope that the additional
global capacity for a number of
monomers planned for commissioning 
in the fourth quarter of 2008 and
throughout 2009 will alleviate the tight
raw material supply and allow input
prices to ease in due course
for polymer division this restricted
monomer supply and volatile raw 
material pricing together with continued
restructuring of some of our core markets
encouraged us to advance our product
development programmes to stimulate
demand in 2007 we widened our nitrile
latex dispersions and polybutadiene
product portfolios whilst at the same
time developing complementary products
to sell alongside our core latex dispersion
and polyvinyl alcohol activities
synthetic latex
throughout 2007 the european latex
market was subject to further customer
rationalisation particularly in the large
commodity markets such as paper 
our business whilst experiencing some
disturbance from this restructuring
remains speciality orientated we were
able to increase sales despite a number
of our main markets not growing as
customers sought to manufacture in
other parts of the world the market for
our synthetic nitrile latex grew significantly
as a result of the greater use of synthetic
rubber gloves in the health and semi
medical markets and we were able 
to benefit from this through the newly
commissioned capacity at our kluang
factory in malaysia 
expanding our operations in asia remains
a key part of polymer division’ s strategy
and in 2008 we expect the momentum 
to continue with increases in both latex
and dispersion capacity planned
dispersions
the dispersion market unfortunately
experienced the worst of the raw material
volatility however with the advantage 
of dispersion production in all our 
regional activities combined with good
technical support and continued product
development we were able to maintain
supply and service to all our customers
as a result we gained market share and
are able to report record dispersion
volumes whilst retaining our market
leadership in the uk south africa 
the middle east and malaysia
specialities
the group manufactures a variety of
speciality polymer chemicals including
polyvinyl alcohol
t o maintain our status as the world’ s
leading supplier of low hydrolysis
polyvinyl alcohol to the pvc industry 
we have changed the profile of our
technical package to meet the ongoing
demand of the pvc resins industry in so
doing we have added new products to
the range specifically designed for the
technological and geographic changes
which have occurred in the manner and
location in which pvc is produced as a
result the polymer division is now not
only able to supply its well established
primary and secondary pvc stabilisers
but has added newly developed grades
alongside supplementary polymers 
used in the polymerisation of pvc
increase in divisional operating profit
 underlying performance
62
sales
2006
2007
£3991m 
£4252m 
divisional operating profit
2006
2007
£388m 
£412m  yule catto  co plc 
annual report and accounts 2007 
11
t otal volume increase to record levels
42
liquid polybutadiene
in 2007 sales of liquid polybutadiene 
were at a record level and 101 higher 
in tonnes compared to 2006 the
expansion of the production facilities 
in 2006 provided the capacity to develop
sales and in 2007 the geographic portfolio
now includes asia and the usa a further
expansion of production is planned 
for 2008
alkyds and polyester
our resin business operates from 
the kluang malaysia site with sales
predominantly in south east asia sales
this year have been at record levels 86
and 162 higher than 2006 for alkyds
and polyester respectively this is a
notable achievement considering the
significant increase in raw material prices
which always gives rise to fluctuations 
in demand our excellent service and
product quality have enabled this
significant growth
pharma chemicals
2007 sales were at a similar level to those
in 2006 however sales in the second 
half were reduced as a consequence 
of order phasing we continued to make
progress on our filings of drug master
files dmf’ s and six dmf’ s were filed 
in 2007  following a thorough review 
a decision was made at the mid year 
to close our italian plant and transfer a
number of products to spain and mexico
to underpin our future competiveness
and profitability
in our spanish plants sales were solid
with volumes at their highest level for a
number of years this was supported by
strong sales of enteric coated omeprazole
pellets following the approval of our 
inhouse manufacturing capacity late 
in 2006 pantoperazole was launched 
in spain at the back end of the year and
over the next few years our partner will 
be rolling sales out in europe as the
patent expires in various european
countries our other antiulcer franchises
did particularly well including ranitidine
our antibacterial ciprofloxacine sold
well in europe with a number of customers
improving their market share a number
of new products were introduced at the
pilot plant level to support approvals in 
a number of european markets and the
usa we continue to move products 
out of the pilot plant into mainstream
production allowing us to develop further
new products our spanish pilot plant is
fully loaded until the second half of 2008
for both development and customer 
specific products 
pricing pressure was heightened by the
dollareuro exchange rate and increased
raw material costs for all producers
including the chinese and indian
competition a marketing strategy was
implemented in the last quarter of the
year to increase prices and restore
margins going forward
our mexican plant had its best year 
in sales and operating profit for the last
ten years the results were achieved 
by a combination of much improved
volumes of intermediates and active
pharmaceutical intermediates api’ s 
as well as the launch of zolpidem in the
usa following patent expiry a number 
of generic franchises in the antiparasitic
antifungal and arthritic field saw good
growth in sales to both europe and the
usa with several key generic customers
launching products it was pleasing to
note that this growth came from products
that uquifa launched in 20034 and have
been awaiting regulatory approvals in
various markets our investment in
obtaining regulatory approvals is key 
to our success and goes on apace 
the pilot plant was partially upgraded 
to help in the number of filed dmf’ s 
the relationship between the mexican
peso and the dollar meant margins 
were not unduly undermined however
as in spain the increased cost of raw
materials was of concern and in the last
quarter the same marketing strategy on
selling prices was rolled out in mexico
sales
2006
2007
£644m 
£638m 
divisional operating profit
2006
2007
£81m 
£74m 
 underlying performance yule catto  co plc 
annual report and accounts 2007 
12
the combination of lower pricing and
eurodollar exchange meant margins 
in italy were significantly lower than in
previous years after a thorough review
we announced the closure of the main
manufacturing plant in italy a number of
products are being transferred to spain
and mexico and regulatory approval is
currently being sought this transfer will
be complete in 2008 at the same time
following the announcement of the
closure of the james robinson dieburg
site in germany a number of additional
pharmaceutical products are currently
being transferred to spain approval of
the level 5 high containment facility was
obtained and production of a cytotoxic
product for a large pharmaceutical
company has already commenced
we also announced our intention 
of constructing a greenfield site in 
china to underpin our raw material and
intermediate position we continue 
to make progress on this and the final
selection of the site is nearing completion
impact chemicals
impact chemicals division comprises 
• james robinson manufacturing hair
photochromic and other dyes 
• william blythe manufacturing iodine
and metal salts 
• holliday pigments manufacturing
ultramarine pigments
• oxford chemicals manufacturing 
high impact flavour chemicals and 
• pfw manufacturing aroma chemicals 
2007 was a year of improving financial
performance but one which again
presented the division with a number 
of significant commercial and 
operational challenges 
sales for the year were below prior 
year as we focused on producing 
and selling higher margin products 
in the first half of 2007  it became 
clear that the market and operational
challenges in some of our businesses
continued to inhibit the speed of 
turnround of the impact division 
after extensive review this led to the
announcement and implementation 
of selective restructuring to deliver 
the required financial improvements
consequently the division announced
that it would concentrate the manufacture
of all ultramarine at its comines site in
france with the closure of operations 
at holliday pigments in hull this closure
was completed in the fourth quarter 
on schedule the transfer to comines
has gone smoothly with the business
showing greatly improved financial
performance in the fourth quarter 
in the third quarter an announcement 
was made on the closure of james
robinson’ s dieburg site in germany 
this reflected the decline of the james
robinson photographic business and
continued pricing pressure from chinese
competition the site is scheduled 
to close at the end of 2008 and is a 
key step for james robinson in the
ongoing refocus of its portfolio to 
higher value applications
whilst these changes were being
progressed the division continued to
focus on supporting its leading position 
in many markets of note is the continued
development of oxford’ s “natural flavours”
strategy which will result in a number 
of new materials coming to the market 
in 2008 this strategy is enhanced by 
the establishment of a new three year
research project focused on sulphur
chemistry supported by the uk
government t echnology strategy board
tsb at pfw the fourth quarter saw the
introduction of new “musk” materials 
to support the expansion of polycyclic
musk usage in the fragrance industry
william blythe successfully opened its
new iodine facility which will benefit the
sales of higher value products such as
smp and periodic acid key materials
used in the silk screen printing and 
silicon wafer industry
overall 2007  can be seen as one 
of good progress for the division whilst
difficult decisions had to be taken new
opportunities have opened up in several
businesses and we have made strides 
in building greater sustainability into the
division’ s financial performance
business review
chief executive’s report continued
t wo successive half years 
of improving profitability
£3m
sales
2006
2007
£939m 
£916m 
divisional operating profit
2006
2007
£10m 
£30m 
 underlying performance yule catto  co plc 
annual report and accounts 2007 
13
income statement – underlying
performance
t otal sales increased by 42 to 
£5806 million driven by good volume
growth in polymers turnover remains
predominately within europe with some
56 of sales 2006 58 however we
continue to make progress in other parts
of the world in particular asia assisted 
by ongoing investment in the malaysian
facility asian sales now account for 26
of the business 2006 23 and will
continue to increase with our commitment
to further expansion in 2008
with the international nature of the
business movements in foreign currency
exchange rates can affect the value of
transactions made by the group where
pricing of our products is in non domestic
currency and in the translation of results
from overseas subsidiaries with regard
to the former the group generally hedges
transactions once entered into and in
addition where exchange rates continue
to be adverse we look to increase sale
prices or sell in domestic currency the
latter is mainly influenced by the euro
with the malaysian ringgit and south
african rand becoming more significant
in 2007  the average rate for the euro 
was comparable to 2006 so translation
effects were not significant
average borrowings for the period were
nearly 2 lower than 2006 though the
net interest charge of £115 million was
1 higher than last year world interest
rates have drifted up during the year 
but a large proportion of the group’ s
exposure is hedged which has softened
the adverse impact
the underlying tax rate of 22 reflects 
the benefits of pioneer status on our
investment in malaysia and the settlement
of some prior year tax positions this is an
improvement on the prior year rate of 28
profit attributable to minority interests 
has increased to £17 million due to the
success of the revertex operations in the
far east which has a 30 shareholding
external to the group
the resultant underlying earnings per
share of 17 3 pence is a yearonyear
increase of 18 a final dividend of 
57 pence per share has been proposed
by the board which would take the full
year payout to 96 pence an increase 
of 32 underlying dividend cover is 
18 times
income statement – special items
t o provide a clearer indication of the
group’ s underlying performance a
number of special items are shown 
in a separate column of the income
statement special items includes 
• during the year we announced the
closure of our italian pharma plant
holliday pigments hull site and the
james robinson manufacturing plant
in dieburg germany site closure 
and run down costs for these activities
are disclosed in special items this
includes the write down of fixed assets
on these sites as appropriate
• we utilise various cross currency 
and interest rate swaps for hedging
purposes which involve maturities of
up to twelve years ifrs requires that
where the strict requirements of ias 39
are not met changes in the market
value should be recognised annually in
the income statement however such
financial instruments are maintained by
the group for the length of the contract
and over their lifetime have a fair value
of nil hence the notional annual
adjustment is segregated from the
underlying performance
• as a result of the actions taken 
in 2007 to reduce the cost of the
group’ s uk pension scheme the
group recognised an exceptional 
profit of £108 million 2006 £nil 
being the reduction of accrued 
benefits arising from these actions
this profit is shown in special items
business review
financial review
t otal sales increased by 42 
to £5806 million driven by good
volume growth in polymers yule catto  co plc 
annual report and accounts 2007 
14
pensions
in the main uk defined benefit pension
scheme the majority of investments are in
equities whilst equity markets delivered
positive returns during the year the actual
return of 37 fell below the expected
return the yield on aa bonds increased
significantly during the year which has
reduced liabilities and action taken by
the group to manage employee benefits
further reduced liabilities by £108 million
the overall effect of these changes was a
significant reduction in the net balance
sheet liability to £336 million for this
scheme 
ifrs
on an unadjusted ifrs basis group
revenue increased by £139 million to
£5656 million reflecting good growth 
in polymer chemicals partly offset by a
reduction in impact division following the
2006 restructuring profit before taxation
at £215 million was £7 9 million higher
than the previous period of which 
£30 million relates to a better trading
performance with the remainder being 
a reduction in the special items
borrowings 
net underlying borrowings adjusted 
for the marktomarket effect of
derivatives are slightly up on to last 
year at £1708 million due to the impact
of a stronger euro on the group’ s euro
denominated debt which resulted in 
an increase of £56 million
in 2006 we reported a year of increased
capital expenditure following a number
of years of lower capital investment 
this has continued in 2007 as we have
invested in expanding the malaysia nitrile
facility a similar level of investment in
2008 will be directed at further capacity
expansion and various upgrades in
process efficiency 
overall the programme of restructuring
the impact chemicals and pharma
divisions is expected to be broadly cash
neutral however the timing of closure
events has initially resulted in a net cash
outflow across 2006 and 2007  with 
a gross spend of £90 million in 2007  
this was partially offset by sale proceeds
of £24 million from associated assets
mainly the sale of james robinsons’
huddersfield site further sales are
expected in 2008 and beyond including
the hapton site william blythe the
dieburg site james robinson and 
the uquifa italy site
in a period of rising raw materials cost
combined with good volume growth 
in many of our businesses upward
pressure on working capital becomes
more acute however we have focused
very hard on this area during 2007 and
despite increased input costs we have
reduced working capital during the year
by £40 million 
business review
financial review continued
yule catto  co plc 
annual report and accounts 2007 
14 yule catto  co plc 
annual report and accounts 2007 
15
business review
corporate social responsibility report 
overview
yule catto made excellent progress on both its safety and its
environmental performance in 2007  the group had the lowest
ever number of significant accidents resulting in its lowest ever 
over 3day accident rate and the lowest ever overall lost time
accident rate the group improved its performance on all of its
major sustainable development targets including improving
energy efficiency by 7 and reducing water usage by 86 
since 2000 energy usage per tonne of production is down by
nearly one quarter and water consumption is down by 44 
over the same period the production of acid gases is down 
by over 90 to just 7 of the quantity produced in 2000
regrettably despite excellent overall progress an employee
died whilst engaged in a routine cleaning operation at our
mexico site in august the company extends its sincere
sympathy to the family we will ensure that all relevant lessons
are learnt from this tragic event
our policy commitments
yule catto is committed to the principles and practice of the
global chemical industry’ s responsible care
®
programme 
all sites are expected to adhere to these principles and the
group she safety health and environment audit programme
is designed to confirm compliance in 2005 the group committed
its support to the uk chemical industries association’ s sustainable
development guiding principles these represent a significant
element of yule catto’ s she commitments and define a route
to a safe and sustainable chemical industry with open reporting
of our performance and full respect for the people and
communities amongst whom we work
highlights and achievements during 2007
at the beginning of 2007  yule catto set itself a demanding 
4 target for energy reduction during the year this was done 
in response to the rising importance placed on global warming
and in recognition of the key but not exclusive role industry 
will play in dealing with this problem this new energy reduction
target went alongside the existing sustainable development
targets for the other key measures of sustainability including
water use atmospheric acidification global warming and
hazardous waste
group companies rose to this challenge and managed to
reduce energy consumption per tonne by some 7 in 2007 
making a cumulative reduction of 236 since 2000 there
were also notable improvements in other sustainable
development performance measures including a 40
reduction in the discharge of acid gases and a 16 reduction 
in the disposal of hazardous waste to landfill the company’ s
accident performance for 2007 was its best ever and we
experienced some 30 less accidents than in 2006 
we have continued to improve our resources and processes 
to support our drive for improvement in our she performance
• the group she  sustainable development policies were
revised approved and issued by the chief executive
• the group she team was strengthened to provide better
support to individual group companies group she audit
procedures were updated and a two year programme for 
the implementation of new she standards was initiated
• a group wide process safety management system 
was introduced
• standard hazop software has been adopted across 
the company
managing safety and environmental performance
yule catto strongly believes that safety is a primary
responsibility for managers and employees at all levels 
in the company and that safety should be managed in the 
same way as the rest of our business objectives senior
managers have she targets as part of their annual objectives
and bonuses management meetings always discuss she
matters as the first agenda item
the group has two main management processes 
in relation to she
• we have information gathering systems to record 
and summarise all accidents incidents and near misses
which occur across the group the same system is used 
to monitor the company’ s response to accidents and
incidents ensuring that they are properly investigated
appropriate lessons are learned and the necessary 
remedial actions are put in place
• we measure and report the key indicators of she
performance monthly these are discussed at all levels of
management and at site she committees the groupwide
report is discussed as the first agenda item at yule catto’ s
executive committee meetings and the reports are drawn
together to provide a quarterly input to the yule catto board yule catto  co plc 
annual report and accounts 2007 
16
business review
corporate social responsibility report continued
safety and accident performance
like most companies in the uk yule catto uses a headline
measure of the rate of over 3 day lost time accidents to measure
safety performance across the european union these are
generally the accidents which have to be reported to the
appropriate regulatory authorities on this measure the group
made a significant improvement to its accident rate in 2007
reducing the rate to 037 accidents per 100000 hours worked
this is an improvement of approximately 30 compared to
2006 and represents the company’ s best year ever t o put 
this in context 100000 hours very broadly represents a
working lifetime
reportable lost time accident frequency rates
we also measure all lost time accidents again 2007
represented the company’ s best ever year with a frequency 
rate of 053 per 100000 hours this is well below the 
european average reported in 2006 as measured by cefic
the european chemical industry council of 067 accidents
per 100000 hours worked
the number of significant reportable safety incidents remains 
at a very low level 
reportable safety incidents
07 06 05 04 03 02 01 00
44 4
2
4
26 26
66
00
02
04
06
08
10
12
07 06 05 04 03 02 01 00
3 day lost time accident frequency rate per 100000 hours
audit programme
t o support our objectives of improvement in she performance
we have an active she audit programme this programme 
was upgraded during 2007 to deliver a clear view of current
performance it also now enables sites to identify areas for
improvement more clearly and over a period of time allow 
sites to track their performance improvement 
asset protection process safety management 
and insurance inspections
yule catto losses from fire or process safety related incidents
remain at a low level this is achieved by both our own internal
management and she audit processes and by biennial risk
audits carried out by our global property and business risk
insurers these external audits produce recommendations
which are discussed within the businesses and then assessed
against their practicality and costeffectiveness this process 
of working in partnership with our insurers creates transparency
which in turn helps yule catto achieve competitive pricing for 
its global risk insurance
reach
the european parliament passed the regulation evaluation
and assessment of chemicals regulations reach in december
2006 and the regulations went through the rest of the european
union’ s legislative stages rapidly thereafter to become eu law in
early 2007  these regulations require all chemicals produced or
used in europe of more than 1 tonne per year to be registered
over the next 11 years the registration process will involve 
a risk assessment of the chemical for both human and
environmental effects the depth of the risk assessment 
and the date by which it is required to be presented to the 
new european chemicals agency will be determined by the
tonnage made and used unless the chemical is of high concern
in which case the date for registration will be brought forward
although the regulations have been finalised a great deal of
work is still being done by both regulators and industry on the
interpretation and implementation of reach 
before the start of full registration which will be from the
beginning of 2009 there will be a preregistration period
between 1 june 2008 and 1 december 2008 during this 
time all chemicals which manufacturers or importers intend 
to continue to place on the european market after 1 december
2008 are to be preregistered any chemical which is not 
preregistered by 1 december 2008 will not be allowed to 
be sold or used inside the eu without going through a full
registration procedure yule catto will ensure that all our
products and raw materials are preregistered as required
group companies have been preparing for the implementation
of reach for several years we have brought in independent
consulting support to work with our group companies to help
ensure we remain on track for full compliance the first impact
of reach has been a sharp increase in customer and supplier
enquiries about the chemicals we sell manufacture and use  yule catto  co plc 
annual report and accounts 2007 
17
although reach is a new requirement it can be seen as 
an extension of yule catto’ s longterm commitment to the
principles of product stewardship we have expert staff in
group companies who are able to provide safety advice on 
our products and their application to our customers these
experts are active in industry groups at a uk and european
level spreading good practice and ensuring that yule catto
companies’ advice is comparable to the best in our field
sustainable development performance
report 2007
managing our environmental responsibilities
as signatories to the uk chemical industries association’ s
sustainable development goals the yule catto group 
is committed to a 10 year programme of reducing its
environmental impact the base year for this commitment 
was 2000 with targets for significant improvements by 2010
progress across group companies is such that on all the
targets yule catto has already achieved the reductions 
required to comply with the 2010 goals indeed current
performance levels are between 13 to 87 better than 
the relevant individual 2010 targets however we will 
continue to set annual objectives for yet further improvement
t o achieve this each site has specific targets a number 
of these targets have required very significant capital investment
– for example the flue gas desulphurisation plant at holliday
pigments comines – and the environmental benefits of this
investment are now flowing through to group performance 
all the targets are set on a per production tonne basis and the
graphs reproduced below show how the group’ s performance
has improved over the last 7 years since the baseline year 
of 2000
energy
yule catto has already passed its 2010 target for energy
reduction per tonne of product yule catto set a target of 4
reduction in energy in 2007 and this target has been set again
for 2008 when a further 4 reduction is aimed for
energy consumption
0
1
2
3
4
5
6
10 09 08 07 06 05 04 03 02 01 00
actual
10 year target
gigajoules used per production tonne
global warming
the threat of global warming has become a major issue around
the world over the last few years and its importance increased
further in 2007 with new european and global targets being set
the group’ s global warming burden is expressed as tonnes of
carbon dioxide equivalent and this was reduced by 63 in
2007  giving a cumulative reduction of 34 since 2000 
global warming burden
atmospheric acidification
by the installation of high efficiency flue gas desulphurisation
units at both of the group’ s ultramarine pigment factories the
release of acidic gases to atmosphere has been reduced by
over 93 compared to 2000 to just 18th of the target value 
for 2010 with the closure of the holliday pigments factory in
hull uk this target will be reset for 2008 and subsequent
years but it is certain that the group will continue to beat the
2010 sustainable development target by a comfortable margin
atmospheric acidification burden
00
10
20
30
40
50
60
10 09 08 07 06 05 04 03 02 01 00
actual
10 year target
kgs sulphur dioxide equivalent released per production tonne
000
005
010
015
020
025
030
035
040
045
10 09 08 07 06 05 04 03 02 01 00
actual
10 year target
tonnes carbon dioxide equivalent release per production tonne yule catto  co plc 
annual report and accounts 2007 
18
business review
corporate social responsibility report continued
water use
water is an increasingly precious resource worldwide and 
one which is vital for the safe and productive operation of 
the chemical industry yule catto companies use water for
amongst other things cleaning process equipment as a key
constituent in our processes and for cooling chemical reactions
to keep them safe water use per tonne of product had already
been reduced by over a third by the end of 2006 and 2007 
has seen a further reduction of 86 bringing the cumulative
reduction since 2000 to 44 this is already 30 below the
2010 target but the group has targeted a further 4 reduction
in water use in 2008
water consumption
waste disposal
the near 50 reduction in hazardous waste disposal seen in
2006 could not be repeated in 2007 but a further very significant
reduction of 167 was achieved this achievement brings the
reduction since 2000 to in excess of 70 and means that the
group’ s hazardous waste production was less than 40 of the
2010 target this has been achieved despite a reclassification
of the term “hazardous” as applied to waste in the european
union this reclassification had the effect of significantly
increasing the range of wastes that had to be classified as
hazardous and makes the reduction achieved even more striking
hazardous waste disposed to land
0000
0002
0004
0006
0008
0010
0012
0014
10 09 08 07 06 05 04 03 02 01 00
actual
10 year target
tonnes waste per production tonne
00
10
20
30
40
50
60
70
80
90
100
10 09 08 07 06 05 04 03 02 01 00
actual
10 year target
m3 per production tonne
the quantity of nonhazardous waste disposed of to land 
also declined very sharply in 2007  by nearly 30 compared 
to 2006 as with other targets the reduction since 2000 is very
marked at 45 this performance measure does not have 
an agreed industrywide reduction target
nonhazardous waste disposal to land
environmental incidents 
the number of environmental incidents remains at a very 
low level and nearly all are minor excursions above permitted
discharges limits it is of course the policy of all yule catto
companies to remain within discharge limits at all times but
these minor excursions whilst regrettable have not produced
any longterm noticeable environmental damage 
reportable environmental incidents
one notable incident which illustrates this was related to
the extremely heavy rainfall experienced in parts of the uk 
in june 2007  this downpour in which the rain expected in 
a month fell in little over an hour overwhelmed the drains at 
our stallingborough site the torrential rain then carried material
being discharged to the site’ s effluent treatment system over 
the site boundary and into the surrounding fields because 
of the quantity of rain the dilution was very high and the water
whilst mildly discoloured caused absolutely no environmental
damage the uk environment agency whilst confirming that
the event was reportable to them agreed that no environmental
damage had occurred 
07 06 05 04 03 02 01 00
88
4
7
4
22
44
49
0000
0005
0010
0015
0020
0025
0030
10 09 08 07 06 05 04 03 02 01 00
tonnes per production tonne yule catto  co plc 
annual report and accounts 2007 
19
environmental kpis
the uk department for food environment and rural affairs defra published guidelines for reporting environmental key
performance indicators in 2006 the three key measures suggested were energy use waste disposal and water consumption 
yule catto has reported on these indicators for a number of years but not in the suggested format t o aid transparency of reporting
environmental performance the data for the period 20052007 has been recast into the suggested format and is reproduced 
in the table below
 change 
2007 2006 2005 20052007
energy consumption
1
gj’s 3063455 3186354 3424246 1054
gas 1159183 1257724 1395182
light oil 82120 83070 105293
heavy oil 46202 73630 85420
steam 179939 187173 192040
electricity primary basis 1596011 1584757 1646311
gj’ st onne production 364 391 454 1982
emissions to air 
2
carbon dioxide co
2

000 t onnes 153308 160421 173164 1147
t onnes co
2
t onne production 0182 01966 0229
sulphur dioxide so
2

tonnes 261 452 446 4148
kilos so
2
t onne production 031 0554 0592
nitrous oxides nox
tonnes 3846 6425 57 11 3266
kilos noxt onne production 0046 0079 0076
volatile organic compounds voc’ s 
3
tonnes 636
kilos voc’ st onne production 0755
water usage
cubic metres m
3
 4481713 5095279 5012552 1059
public potable supply 1480577 1618898 1664567
raw water from river 2439170 2651619 2735090
raw water from borehole 420921 446747 410793
raw water form canal 5169 37304 75410
raw water from other 135876 340711 126692
m
3
t onne production 532 58 665 2000
1 data relates to site usage of all fuels excluding transport
2 emissions to air have been calculated from the usage of all fuels excluding transport fuel and therefore include both direct emissions and indirect emissions 
related to boughtin electricity
3 accurate figures for previous years are not available  yule catto  co plc 
annual report and accounts 2007 
20
business review
corporate social responsibility report continued
 change
2007 2006 2005 20052007
waste management
hazardous waste
000 t onnes 23469 2144 3147 2543
hazardous waste sent offsite
recycled – energy recovery 5675 4195 4833
recycled – separated reprocessed 6749 635 15854
incinerated – no energy recovery 2106 2438 2903
disposed by landfill 2075 2326 1493
other 0151 0225 0374
hazardous waste disposed onsite
incinerated onsite with energy recovery 4181 2878 0126
incinerated onsite with no energy recovery 2532 2925 3208
disposed to onsite landfill
haz waste t onnest onne production 0027 0026 0042 3571
nonhazardous waste
000 t onnes 1647 2106 3166 47 98
nonhazardous waste sent offsite
recycled – energy recovery 367 435 332
recycled – separated reprocessed 193 190 7 04
incinerated – no energy recovery 002 002 024
disposed by landfill 905 1249 1933
other – municipality 077 094 136
nonhazardous waste disposed onsite
recycled – energy recovery 0 0 036
incinerated – no energy recovery 0 0017 0
disposed by landfill 1024 1337 002
nonhaz waste t onnest onne production 0020 0026 0042 5238
production
tonnes 842578 815812 754091 1173
the table shows the striking progress the group has made on its environmental targets over the last 3 years at a time when
production has risen by 117 absolute emissions of carbon dioxide the principal greenhouse gas have fallen by 114 
this is due to the increased energy efficiency our production facilities have been able to achieve nearly 20 less energy per
tonne of production and an absolute reduction of 105
a similar picture emerges with water where absolute usage is down by 106 and by 20 judged on the per production tonne
measure waste hazardous and nonhazardous is also down sharply hazardous waste fell by over 25 between 2005 and 
2007  and nonhazardous waste fell by 48  yule catto  co plc 
annual report and accounts 2007 
21
directors and advisers 
executive directors
a m whitfield – chief executive
joined the group and appointed to the board in march 2006 
he assumed the role of chief executive in august 2006 prior 
to appointment he was chief executive of the plastics division 
of d s smith plc age 46
d c blackwood 
4
– finance director
joined the group and appointed to the board in october 2007 
prior to appointment he was group treasurer of imperial 
chemical industries plc age 49
nonexecutive directors
a e richmondwatson 
4
– chairman
joined the board in 1978 and was appointed chairman in 
may 2000 he is the deputy chairman of melrose resources plc 
and was deputy chairman of morgan grenfell group plc from
1989 until retirement in 1996 he is a member of the institute 
of chartered accountants of scotland age 66
the hon a g catto 
4
joined the board in 1981 he is managing director of 
cairnsea investments ltd a private investment company 
and a nonexecutive director of several early stage companies
that have been backed by cairnsea until 1995 he was a
managing director of lazard brothers and prior to this he 
was with j p morgan and morgan grenfell  co age 55
dr a a dobbie 
234
joined the board in august 2007  he is a founding director 
of cogency chemical consultants limited a director of nit ech
solutions limited and chairman of chemical sciences scotland
and evolva sa age 56
r h hunting 
12
joined the board in 2000 he is chairman of hunting plc 
age 61
dato’ lee hau hian 
4
joined the board in 1993 and stood down in 2000 to become
an alternate director he rejoined the board in 2002 he is a
director of kuala lumpur kepong bhd and batu kawan bhd
age 54
dato’ seri lee oi hian 
4
joined the board in 1981  he is chairman of kuala lumpur
kepong bhd and a director of batu kawan bhd age 57 
j k maiden 
134
joined the board in august 2007  he is chief finance officer 
of northern foods plc he is a fellow of the certified institute 
of management accounts age 46
c j williams 
13
joined the board in december 2005 he was one of the 
most senior executives at sca a leading producer of
packaging and hygiene products until retirement in 2005 
he is the nonexecutive chairman of clondalkin group
chairman of the supervisory board of treofan and sits on 
the boards of turkcell and kloeckner pentaplast age 66
p s wood 
123
– senior independent director
joined the board in 2001 he was chief executive of 
the bss group plc until retirement at the end of 2005 and 
is chairman of white young green plc and a nonexecutive
director of rpc group plc and grafton group plc he is 
a member of the institute of chartered accountants 
of england and wales age 60
1 member of audit committee
2 member of nomination committee
3 member of remuneration committee
4 standing for reelection at 2008 agm
registered office
yule catto  co plc
t emple fields
harlow
essex
cm20 2bh
registered no 98381
secretary
richard atkinson
bankers
abn amro bank nv
banca nazionale del lavoro spa
banca popolare italiana
banco de sabadell sa
barclays bank plc
crédit industriel et commercial
fortis bank nederland nv
hsbc bank plc
the royal bank of scotland plc
merchant bankers
merrill lynch international
stockbrokers
merrill lynch international
registrars
computershare investor services plc
lochside house
7 lochside avenue
edinburgh park
edinburgh
eh12 9dj
auditors
deloitte  t ouche llp
solicitors
linklaters llp
hammonds
pinsent masons llp report of the directors
for the year ended 31 december 2007
the directors submit their annual report and the audited
financial statements for the year ended 31 december 2007 
results and dividends
profit attributable to shareholders for the year was
£13785000
the interim dividend of 39p per share was paid on 
16 november 2007  the directors recommend a final dividend
of 57p per share payable on 4 july 2008 to those shareholders
registered at the close of business on 6 june 2008 a dividend
reinvestment plan is available to shareholders and this
alternative will continue to be offered until further notice
principal activities and business review 
the principal activities of the company and a business review
are set out on pages 9 to 20
disposals
on 9 february 2008 conditional contracts were exchanged 
with vivimed labs limited for the sale of the entire issued share
capital of james robinson limited and other associated assets
financial instruments
details of the group’ s use of financial instruments and its
financial risk management objectives and policies and of its
exposure to price credit liquidity and cashflow risk in relation
to such instruments is contained in note 21 to the financial
statements
directors
the present membership of the board is shown on page 21 
all directors served throughout the year apart from dr a a dobbie
and mr j k maiden who were appointed on 14 august 2007 
and mr d c blackwood who was appointed on 1 october 2007 
the hon a g catto mr d c blackwood dr a a dobbie 
dato’ seri lee oi hian dato’ lee hau hian mr j k maiden 
and mr a e richmondwatson retire and will be seeking 
reelection at the forthcoming annual general meeting
mr blackwood has a service contract which contains a 
notice period of three months none of the other directors
seeking reelection has a service contract
details of directors’ emoluments and the interests of each
director in the share capital of the company are shown in the
remuneration report on pages 28 to 32
yule catto  co plc 
annual report and accounts 2007 
22
director indemnity provisions
under the company’ s articles of association the directors 
of the company have the benefit of a qualifying third party
indemnity provision which provides that they shall be
indemnified by the company against certain liabilities as
permitted by sections 232 and 234 of the companies act 2006
and against costs incurred by them in relation to any liability for
which they are indemnified the company has purchased and
maintains insurance against directors’ and officers’ liabilities in
relation to the company
share capital and control
details of the company’ s share capital are contained in note 24
to the financial statements during 2007 no shares were issued
or repurchased a total of 41730 shares were purchased on
the open market on behalf of shareholders who elected to
participate in the dividend reinvestment plan
the rights and obligations attaching to the company’ s 
ordinary shares being the only class of issued share capital 
as well as the powers of the company’ s directors are set 
out in the company’ s articles of association copies of which
can be obtained from companies house or by writing to the
company secretary there are no restrictions on the voting
rights attaching to the company’ s ordinary shares or on the
transfer of securities in the company no person holds securities
in the company carrying special rights with regard to the control
of the company the company is not aware of any agreements
between holders of securities that may result in restrictions on
the transfer of securities or on voting rights unless expressly
specified to the contrary in the articles of association of the
company the company’ s articles of association may be
amended by special resolution of the company’ s shareholders
other than in relation to its borrowings which unless certain
conditions are satisfied become repayable on a takeover the
company is not party to any significant agreements that would
take effect alter or terminate upon a change of control following
a takeover bid
the company does not have agreements with any director or
employee that would provide compensation for loss of office or
employment resulting from a takeover
all of the company’ s share schemes contain provisions relating
to a change of control outstanding options and awards would
normally vest and become exercisable on a change of control
subject to the satisfaction of any performance conditions at 
that time yule catto  co plc 
annual report and accounts 2007 
23
major shareholdings
other than the shareholdings disclosed as directors’ interests 
in the remuneration report as at 29 february 2008 the
company had been notified under section 5 of the disclosure
and transparency rules of the uk listing authority of the
following significant holdings of voting rights in its ordinary shares
per cent
ordinary of ordinary
shares shares in nature of
number issue holding
kuala lumpur 
kepong berhad 27414414 1882 direct interest
franklin resources inc 17472562 1200 indirect interest
ubs global asset part direct 
management uk limited interest 
and ubs global asset 
management life limited 8646817 594 part indirect 
dr m j peagram 5178502 356 direct interest
legal  general group plc 4501892 309 direct interest
employment policies
the group gives every consideration to applications for
employment from disabled persons employees who become
disabled are given every opportunity to continue employment
under normal terms and conditions with appropriate training
career development and promotion wherever possible the
group seeks to achieve equal opportunities in employment
through recruitment and training policies
authority to purchase own shares
the company has a general authority which expires at the
conclusion of the 2008 annual general meeting to make
market purchases of not more than 14566318 of the company’ s
ordinary shares in accordance with the terms of the special
resolution passed at the 2007 annual general meeting 
a resolution will be tabled at the 2008 annual general meeting 
to renew this authority
employee involvement
the group is organised on a decentralised basis so as 
to promote greater employee involvement and better
communications with employees each group company is
encouraged to make its employees aware of the financial and
economic factors affecting the performance of the company
performance related bonus schemes are in operation in a
number of group companies
t wo longer term share incentive plans for directors and 
senior executives were introduced in 2002 and 2006 with 
the approval of shareholders
uk pension funds
the trustees have reviewed the independent investment
management of the assets of the company pension schemes 
in the united kingdom and assured themselves of the security
and controls in place in particular it is the trustees’ policy not 
to invest in yule catto shares nor lend money to the company
creditor payment policy
the group’ s policy is to make payments to creditors and other
suppliers in accordance with terms of payment agreed at the
time the contract of supply is made subject to all the terms and
conditions of the order being satisfied by the suppliertrade
creditor days of the company for the year ended 31 december
2007 were 31 days 2006 32 days based on the ratio of trade
creditors at the year end to the amounts invoiced during the
year by trade creditors
charitable donations
charitable donations in the year amounted to £54000
2006 £92000 there were no political donations during 
the year
statement as to disclosure of information to auditors
each director of the company confirms that so far as he is
aware there is no relevant audit information of which the
company’ s auditors are unaware and that he has taken all the
steps that he ought to have taken as a director in order to make
himself aware of any relevant audit information and to establish
that the company’ s auditors are aware of that information for
these purposes relevant audit information means information
needed by the company’ s auditors in connection with preparing
their reports on pages 36 and 70this confirmation is given and
should be interpreted in accordance with s234za of the
companies act 1985
auditors
a resolution to reappoint deloitte  t ouche llp as 
the company’ s auditors will be proposed at the 
annual general meeting
annual general meeting
the annual general meeting will be held at noon on 
thursday 15 may 2008 at saddlers’ hall 40 gutter lane
london ec2v 6br
by order of the board
r atkinson
secretary
12 march 2008 corporate governance 
this compliance statement is produced in relation to the
combined code on corporate governance “the code” which
was published in june 2006 by the financial reporting council
statement of compliance
the company considers that it has complied throughout the
financial year ended 31 december 2007 with the provisions 
set out in section 1 of the code
application of the code
the main and supporting principles of section 1 of the 
code were applied as follows
the board
operation of the board
the activities of the company are controlled by the board 
which comprises two executive directors and nine non
executive directors the roles of chairman and chief executive
are clearly divided between mr a e richmondwatson who
heads the board in his capacity as nonexecutive chairman 
and mr a m whitfield who has responsibility for the running of
the company’ s business as chief executive the nonexecutive
directors all have wide business and boardroom experience
gained in a broad range of business sectors
the board has reserved to itself a schedule of matters which
includes setting long term objectives for the group and the
strategies to be employed in achieving them setting policies 
in the areas of safety health and the environment recruitment
and employment risk management and treasury and subject
to materiality thresholds decisions on the raising of capital
financial commitments capital expenditure acquisitions and
disposals and the prosecution defence and settlement 
of litigation
the board meets quarterly to review current and projected
performance and to determine strategic issues the directors
receive in advance full information on all matters to be
discussed at board meetings as well as a detailed quarterly
review of performance prepared by the chief executive the
board has established audit nomination and remuneration
committees which are discussed below
in addition arrangements are made each year for the board 
to visit up to two of the group’ s operational sites and meet 
local management ad hoc site visits are facilitated for 
individual non executive directors on request
the board has delegated to the chief executive responsibility
for the development and preparation of the business plan for 
the group and the annual group budget for recommendation to
the board as the senior executive director the chief executive
is responsible for all aspects of day to day operational control 
of the group and execution of the group strategy the chief
executive has established and chairs an executive committee
whose other members are the divisional chief executives the
finance director the deputy finance director and the company
secretary to assist him in the performance of his duties and
which meets once a month the chairman receives the minutes
of the executive committee and all directors receive a monthly
trading summary and commentary
yule catto  co plc 
annual report and accounts 2007 
24
board membership and balance
the chairman chief executive and senior independent 
director are identified on page 21 the chairmen and members
of the audit nomination and remuneration committees are
identified below
the board met on four occasions in 2007  all board and
committee meetings were fully attended during 2007 except 
for the board meetings held in march august and december
when dato’ seri lee oi hian was unable to attend
the board considers the following nonexecutive directors 
to be independent in accordance with the provisions of the
code dr a a dobbie mr r h hunting mr j k maiden 
mr c j williams and mr p s wood
induction and training
induction arrangements are in place in order to ensure 
new directors receive a full formal and tailored induction 
on appointment the skills and knowledge of board members 
are updated by briefings provided by the company’ s internal
resources and materials and seminars offered by external advisers
performance evaluation
performance evaluations of the board its committees and 
its directors were carried out in the last year by the following
internal processes
• an assessment of the performance of individual non
executive directors is carried out by the chairman through 
a rolling programme of onetoone discussions using
performance evaluation questions as the centrepiece 
for those discussions every nonexecutive director is
assessed in this way once a year
• the performance of the executive directors was reviewed in
september 2007 at a meeting of the nonexecutive directors
chaired by the chairman
• a meeting of the nonexecutive directors in the absence 
of the chairman chaired by the senior independent director
was held in december 2007 to evaluate the performance 
of the chairman taking into account the views of the
executive directors and
• the board and its committees carry out an annual self
assessment of performance led by the chairman and the
chairman of each committee respectively the results of
assessment questionnaires completed by those chairmen
were reviewed by the relevant committees and the board 
and were shared with and discussed by the board as a 
whole at its meeting in december 2007 
nonexecutive directors are appointed for three year terms
those nonexecutive directors who have served longer than
nine years on the board are subject to annual reelection by
shareholders with other directors subject to reelection at 
least every three years yule catto  co plc 
annual report and accounts 2007 
25
shareholder communications
dialogue with institutional investors is conducted on a regular
basis by the chief executive and the finance director and
meetings take place following the announcement of interim and
full year results and at other times according to circumstances
the board has adopted a set of shareholder communication
principles in order to ensure that board members develop an
understanding of the views of the group’ s major shareholders
these principles require the chairman to be present with 
the chief executive and the finance director at sufficient
shareholder presentations and meetings so that he fully
understands the issues and concerns of major shareholders
the chairman reports on shareholder relations at each board
meeting communications with shareholders relating to
corporate governance matters are conducted by the chairman
with the assistance of the chairmen of the audit nomination
and remuneration committees written reports on all meetings
between non executive directors and institutional shareholders
and their representative bodies are presented to the board 
at the first opportunity following such meetings as is all
correspondence with them
the board seeks to encourage participation of all shareholders
and in particular private investors at the company’ s annual
general meeting and endeavours to ensure all board members
are in attendance in particular  the chairmen of the remuneration
audit and nomination committees are available to 
answer questions
the company makes use of its website wwwyulecattocom 
to communicate with its shareholders where it publishes interim
and full year results company announcements share price 
and corporate governance and other investor information
board committees
the board has formally established audit nomination 
and remuneration committees each with their own terms 
of reference which set out their respective roles and the
authority delegated to them by the board copies of the 
terms of reference are available upon request from the
company secretary and can also be downloaded from 
the company’ s website
audit committee
the audit committee comprised mr p j welch chairman 
mr r h hunting mr p s wood and mr c j williams until 
16 may 2007  thereafter it comprised mr p s wood chairman
mr r h hunting and mr c j williams until 30 august 2007 
when mr j k maiden joined it mr welch was and mr wood 
and mr maiden are considered by the board to have “recent 
and relevant financial experience” for the purposes of provision
c31 of the code the committee has established a detailed
remit regarding the application of financial reporting and internal
control principles the finance director and senior members of
his department attend meetings of the committee as part of the
review of the group’ s interim and final statements prior to their
submission to the board the committee meets periodically
with the company’ s auditors to discuss the adequacy of the
group’ s financial management internal controls and information
systems the committee’ s remit includes the review of the cost
effectiveness independence and objectivity of the auditors
including the extent of nonaudit services and fees payable 
to the auditors which is carried out and discussed with the
auditors on a periodic basis with regard to seeking to ensure
the independence and objectivity of the auditors the audit
committee’ s policy is to avoid the auditors providing services 
in areas which may create or be perceived to create a conflict 
of interest accordingly other than in circumstances where 
time constraints render it impractical or assignments are 
of a minor nature the auditors are not invited to tender or
propose for services of the following nature corporate finance
legal information technology and systems recruitment or
remuneration accounting internal audit or control acquisition
due diligence valuations or appraisals actuarial or general
business consulting in addition the auditors have been
requested not to provide services to executive directors 
or senior executives nonexecutive directors are required 
to disclose any relationship they have with the auditors
the group does not have an internal audit function 
the committee has reviewed this during the year and has
concluded that there are in place appropriate procedures 
for assuring the integrity and effectiveness of the group’ s
governance risk management and control processes 
the board has accepted this recommendation
the current auditors were first appointed in 2002 and their
appointment was reviewed by the committee in 2006 details 
of audit and nonaudit fees paid to them in 2007 are set out in
note 6 on page 48 nonaudit fees principally relate to taxation
advice the board accepts the committee’ s recommendation
that the current auditors be proposed for reappointment at the
forthcoming annual general meeting
the committee met formally three times during 2007 and 
the chairman of the committee had regular dialogue with the
auditors during the course of the year as well as complying with
the terms of its remit during the year the committee reviewed 
its remit and with the approval of the board updated it
nomination committee
the nomination committee comprised mr r h hunting
chairman mr p j welch and mr p s wood until 16 may 2007 
thereafter it comprised mr r h hunting chairman mr p s wood
and mr a e richmondwatson until 30 august 2007 when 
mr richmondwatson was replaced by dr a a dobbie 
the committee is responsible for the regular review of the
structure size and composition of the board and the making 
of recommendations with regard to any changes leading the
process for board appointments and nominating candidates for
nonexecutive positions and considering succession planning
the committee led the process for recruiting the finance director
and was assisted in this process by an external recruitment
consultancy the committee also nominated dr a a dobbie 
and mr j k maiden for appointment as nonexecutive directors
messrs dobbie and maiden were nominated as replacements
on the board for dr m j peagram and mr p j welch respectively
following a review of prospective candidates put forward by an
external recruitment consultancy the nomination committee
held two formal meetings during 2007 and a number of informal
discussions and interviews associated with the foregoing
recruitment processes corporate governance continued
remuneration committee
all matters relating to the remuneration committee and
remuneration are covered in the remuneration report 
set out on pages 28 to 32
accountability
an explanation of the directors’ responsibility for preparing 
the financial statements their report that the business is a going
concern and their statement as to disclosure of information 
to the auditors are set out on pages 35 and 23 respectively
statements by the auditors about their reporting responsibilities
are set out on pages 36 and 70 respectively a report on the
approach to internal control is set out below the directors
endeavour to make the annual report and financial statements
as informative and understandable as possible
internal control
the board of directors has ultimate responsibility for the group’ s
system of internal control and sets appropriate policies to
ensure that the code requirements on internal control are met
the system of internal control deployed within the group 
is designed to reduce the risks of failure to meet business
objectives but these risks cannot be eliminated the internal
control system adopted can therefore only provide reasonable
not absolute assurance about meeting such business
objectives or against material misstatement or loss
a process for identifying evaluating and managing significant
business risks faced by the group has been in place since 2000
this has since been built upon so as to embed further the
process into the businesses and to enhance the usefulness of
the relevant processes and information and has been operated
throughout 2007 and up to the date of approval of the annual
report and accounts and accords with the turnbull guidance
the system is applied at all material subsidiaries and a 
“bottom up” risk profile is created by evaluating the information
at business divisional and group level
individual directors within yule catto’ s businesses identify and
assess key risks associated within their area of responsibility
based on formal management information and interaction with
colleagues customers suppliers and other parties
the individual submissions are consolidated reviewed and
agreed at a board meeting of the subsidiary a business risk
report is prepared that is closely linked to business strategy 
and takes account of key internal and external factors risks 
are prioritised using a common risk matrix which forms the
basis of a single corporate risk report that is reviewed and
discussed by the yule catto audit committee
yule catto  co plc 
annual report and accounts 2007 
26
the individual business risk reports are formally reviewed at a
board meeting of the subsidiary every six months out of which 
a revised report is submitted which identifies changes in the 
risk environment
the process was last reviewed by the yule catto board of
directors in march 2007 
the nature of the risks identified as a result of this process
during the year primarily relate to matters of an operational
nature and the most significant of those which faced the 
group in 2007 are reviewed in the reports of the chairman 
chief executive and group finance director
risks associated with safety health and the environment are 
by the nature of the group’ s business always of the utmost
concern and the corporate social responsibility report on
pages 15 to 20 reviews the group’ s performance in this
connection in 2007 
the processes which are used by the board either directly 
or where appropriate through the audit committee to review
the effectiveness of the internal control system includes 
the following
• a review of the external audit work plan
• consideration of reports from management and external
parties including the auditors on the system of internal
financial control and any material control weaknesses
• quarterly review of safety health and environmental
performance
• discussion with management of the actions taken on any
possible problem areas for the business identified by board
members or in the audit report and
• consideration of a consolidated risk management report
setting out the main conclusions from the internal control
process
in addition the board
• receives copies of the minutes from all audit committee
meetings
• considers the role of the group insurance programme
• receives regular written and oral reports from management
on all aspects of production operations financial and risk
management matters and
• in compliance with provision c21 of the combined code 
the board regularly reviews and approves the effectiveness 
of the group’ s system of internal controls yule catto  co plc 
annual report and accounts 2007 
27
environmental social and governance matters
in january 2007 the association of british insurers abi
published a revised version of its guidelines on responsible
investment disclosure these guidelines require statements 
on the extent to which environmental social and governance
matters are taken into account by the board and identified
assessed managed and monitored particularly in relation 
to the risks and opportunities they present to the value of 
the company
environmental matters
the maintenance of high standards of environmental 
together with health and safety protection is central to the
company’ s business a separate statement on safety health
and environmental she matters has been a feature of the
annual report for a number of years the corporate social
responsibility report statement on pages 15 to 20
incorporates the abi guidelines and includes a report on 
the initiatives the company has adopted regarding 
sustainable development
social and ethical matters
the board takes account of social and ethical matters as part 
of its review of internal control which by virtue of its approach 
to risk identification covers areas which encompass social 
and ethical matters
the board is conscious of its responsibility to the communities
in which the group’ s businesses operate and is supportive 
of local initiatives by management
the board is also aware of the reputational risk associated 
with social and ethical issues and has a group wide code 
of business conduct on corruption and anticompetitive
activities the purpose of this code is to ensure that the group’ s
employees have a clear understanding of the principles that are
important in these areas when conducting the group’ s business
the application of the code is explained to senior management
at regular intervals who are charged with its communication
throughout their businesses a compliance procedure was
initiated in 2007 involving annual certification by the senior
management of each operating company a report is made 
to the audit committee annually on the code and the
company’ s whistleblowing procedure
governance
the board’ s approach to governance training of directors 
and identification and assessment of risk is set out above directors’ remuneration report
the following report complies with the directors’ remuneration
report regulations 2002 and satisfies the requirements 
of the listing rules of the financial services authority and 
the combined code on corporate governance which was
published in june 2006 by the financial reporting council
remuneration committee
the remuneration committee comprised mr p s wood
chairman mr p j welch and mr c j williams until 16 may
2007  thereafter it comprised of mr p s wood chairman 
mr r h hunting and mr c j williams until 30 august 2007 when
dr a a dobbie and mr j k maiden joined and mr r h hunting
stood down the committee is responsible for determining the
company’ s policy on executive remuneration and the specific
remuneration for the chairman and each of the executive
directors including pension rights the committee is also
responsible for reviewing the remuneration of senior executives
throughout the group the committee was assisted in its
deliberations on executive directors’ remuneration by monks
part of pricewaterhousecoopers llp  “monks” and the chief
executive with the approval of the remuneration committee
monks was retained by the company and during the year
provided general executive remuneration advice for salary
review purposes and advice on incentives employer pension
contributions and company car allowances the board as a
whole determines the remuneration of the nonexecutive
directors including members of the remuneration committee
the remuneration committee met three times during 2007 and
each meeting was fully attended by the committee’ s members
remuneration policy
nonexecutive directors’ remuneration
it is the board’ s policy to review fees paid to nonexecutive
directors periodically a review of nonexecutive director
remuneration was last carried out in december 2006 with 
the assistance of advice provided by monks with effect from 
1 january 2007 nonexecutive director fees are as follows
£30000 pa for those who do not sit on a committee £33000
pa for those who do sit on a committee £36000 pa for those
who are committee chairmen the fees payable to the
chairman of the board are £110000 pa
nonexecutive directors are not eligible to receive awards under
any of the company’ s share schemes or other employee benefit
schemes nor does the company make any contribution to their
pension arrangements
executive directors’ remuneration
the company’ s policy for 2007 was and continues to be to
structure executive pay in such a way that key executives may
be recruited motivated and retained through being offered
remuneration packages that are competitive for this purpose
the committee uses data provided by external independent
surveys relevant to the industry or sector in which each yule
yule catto  co plc 
annual report and accounts 2007 
28
catto subsidiary operates whilst not adopting set formulae 
the committee is also sensitive to the pay and employment
conditions elsewhere in the group when considering annual
salary increases and total remuneration the committee also
has the discretion to consider the company’ s performance on
environmental social and governance matters when setting 
the remuneration of the executive directors
the major element of the remuneration package of senior
executives is a competitive basic salary which is reviewed 
with effect from 1 january each year for executive directors 
this review is conducted with the assistance of an annual
independent survey of salaries at uk industrial and service
companies with a similar profile to the company in terms 
of overseas operations turnover and market capitalisation 
the survey presents market guidelines for basic pay and
increases in basic salaries for executive directors in the uk
during the previous twelve months the committee then uses
this information to recommend basic salaries for the executive
directors in line with the board’ s policy of awarding for good
performance a basic salary of approximately the market median
for companies of a similar size and complexity in addition 
the remuneration committee has overseen the introduction 
of incentives which are designed to reward the achievement 
of predetermined targets by the individuals concerned 
these incentives which were designed in accordance with 
the provisions of schedule a to the code currently comprise
annual cash bonuses and membership of one of two shareholder
approved longer term incentive plans the “share plans” 
the committee does not consider that the incentive structure
for senior executives gives rise to environmental social 
or governance risks by inadvertently motivating 
irresponsible behaviour
• annual cash bonuses
the annual cash bonus payment for the executive directors
and senior head office employees is an amount equal to 
a percentage of basic pay calculated by reference to the
annual growth in the company’ s basic earnings per share 
for underlying performance eps after taking account of 
the annual rise in the rate of headline inflation rpi for the
maximum bonus to be awarded eps growth must exceed
rpi plus 10 for the minimum bonus to be awarded eps
growth must exceed rpi plus 25 the percentage of basic
pay which will be awarded for performance between these
points is calculated on a straight line basis with no bonus
being awarded if eps growth is rpi plus 25 or less for
2007 the maximum and minimum percentage of basic pay
awardable to the executive directors upon attainment of the
maximum and minimum performance criteria was 80 and
5 respectively yule catto  co plc 
annual report and accounts 2007 
29
for divisional chief executives and managing directors 
of subsidiary companies the annual cash bonus payments
are based on appropriate combinations of profit cash flow
working capital and safety and environmental targets in
2007 the bonuses were subject to limits of 60 and 50 
of basic pay respectively
• share plans
the share plans comprise the performance share plan 
the “performance plan” and the yule catto deferred 
bonus plan 2006 the “deferred plan”
the performance plan was introduced in 2002 following
shareholder approval at that year’ s annual general meeting
and covers the executive directors divisional chief executives
and senior head office employees an award consists of a
right to acquire shares which can be exercised for a nominal
price subject to the company satisfying performance conditions
the value of shares awarded under the performance plan in
any financial year to any individual currently may not exceed
100 of their annual basic salary for awards made from
2002 to 2005 performance conditions related to growth in
earnings per share over a three year period following review
by the remuneration committee and shareholder approval
the earnings per share based performance conditions were
replaced by performance conditions related to relative and
absolute growth in total shareholder return these conditions
were chosen in order to better align the interests of the
participants in the performance plan with shareholders
details of performance conditions are set out at pages 33 
to 34 an award which vests in accordance with the former
and current performance conditions will only be exercisable
and allocated shares may only be transferred as to one half
after the third anniversary of the date the award is made and
as to the remaining half after the fourth anniversary of the
date the award is made in order to further align the interests
of the executive directors and shareholders there are share
ownership requirements in connection with the performance
plan requiring the retention of a percentage of the shares
acquired by executive directors until such time as ordinary
shares in the company have been built up to a level
equivalent in value to their annual basic salary
the deferred plan covers managing directors of subsidiary
companies and was introduced following approval at the
2006 annual general meeting to replace an expired plan 
an award takes the form of a deferred bonus structured as 
a deferred right to acquire shares in the company which can
be exercised for a nominal price after three years the value
of shares subject to an award is determined by reference 
to sustained growth in the profit before tax set at a minimum 
of 5 per annum of the company or subsidiary for which the
participant works by reference to a base year determined 
at the date of grant the value of shares subject to an award
may not exceed 30 of any participant’ s basic salary in any
year the application of the plan is currently under review
during 2007 478173 shares and 9497 shares were
awarded under the performance plan and the deferred 
plan respectively
for the awards made under the performance share plan 
in 2005 the remuneration committee decided that as the
results of the group for the year ended 31 december 2004
have been converted onto an audited ifrs basis that basic
earnings per share for underlying performance should
replace adjusted earnings per share for the purposes 
of comparing performance in 2004 with that for 2007 
executive directors are entitled to participate in grants of
options made under the company’ s savingsrelated share
option scheme as and when these are made
• pension arrangements
mr a m whitfield and mr d c blackwood are not members 
of the company pension scheme and receive payments 
from the company to enable them to make their own
arrangements there are no unfunded pension promises 
or similar arrangements for directors mr s v cummins was 
a member of the company pension scheme t o the extent
that his benefits from the company pension scheme were
restricted payments were made to him to enable him 
to make his own arrangements
• remuneration details
the amount and components of the directors’ 
remuneration are set out below no elements of
remuneration other than basic salary are pensionable 
a payment was made to mr whitfield during the year of
£25000 in respect of compensation for loss of vested
options with his former employer
• service contracts
no director other than mr a m whitfield and mr d c blackwood
has a service contract mr whitfield’ s contract is dated 
22 november 2005 has no unexpired term provides for 
a notice period of one year and makes no provision for pre
determined compensation on termination mr blackwood’ s
contract is dated 12 september 2007  has no unexpired
term provides for a notice period of three months increasing
to 12 months after one year’ s service and makes no provision
for predetermined compensation on termination 
mr s v cummins resigned as a director on 22 march 2007
and ceased to be employed by the company on 26 july
2007  details of his termination payment are set out on page 
34 his service contract comprised a letter of appointment
dated 21 june 1999 had no unexpired term provided for 
a notice period of one year and made no provision for 
predetermined compensation on termination
the remuneration committee’ s policy on contracts and
notice periods for executive directors is to seek to comply 
with best practices in corporate governance directors’ remuneration report continued
all nonexecutive directors are appointed in writing the first
year of each director’ s appointment is shown in the directors’
biographies on page 21 the periods of appointment and the
requirements for reelection of nonexecutive directors are
provided within the performance evaluation section of the
corporate governance report on page 24
• nonexecutive directorships held by the executive directors
mr whitfield does not hold any nonexecutive directorships
mr blackwood is a non executive member of the cabinet
office audit and risk committee and is a member of the
board for actuarial standards for which he receives and
retains £4000 and £10000 per annum respectively
• t otal shareholder return over five years
the following graph compares the share price performance
of the company by reference to total shareholder return with
that of the ftse 250 and is considered to be the most
appropriate index against which to make a comparison
yule catto  co plc 
annual report and accounts 2007 
30
yule catto total shareholder return versus ftse 250 total return
cumulative years ended 31 december 2007
agm approval
the directors’ remuneration report has been submitted to the
2008 annual general meeting for approval
0
50
100
150
200
250
300
350
2007 2006 2005 2004 2003 2002
yule catto
ftse 250 yule catto  co plc 
annual report and accounts 2007 
31
audited information
directors’ remuneration
2007 2006
emoluments £’000 £’000
the total amounts for directors’ remuneration and other benefits were
emoluments 1156 1270 
compensation for loss of office 293 – 
1449 1270 
the emoluments of the individual executive directors holding office during the year were
base
salary bonuses benefits total total
2007 2007 2007 2007 2006
££££ £
a m whitfield – highest paid director 335000 268000 18016 621016 266559 
d c blackwood 57500 35250 1857 94607 – 
s v cummins to 220307 58294 – 4940 63234 274733 
in addition to the above a m whitfield received £25000 in compensation for loss of benefits due from his previous employer 
and s v cummins received £293159 as compensation for loss of office
pension arrangements
a m whitfield and d c blackwood are not members of the company’ s defined benefit pension scheme the yule catto group
retirement benefits scheme t o fund their pension arrangements they received the following payments
2007 2006 
£ £
a m whitfield 83750 50000 
d c blackwood 11500 – 
s v cummins was an active member of the yule catto group retirement benefits scheme until he ceased to be an employee of the
group on 26 july 2007 when he became a deferred member his accrued entitlement the amount that would be paid each year 
on retirement is shown below
accrued
increase in accrued pension 
accrued
pension at excluding pension at
010107 inflation inflation 311207
£££ £
s v cummins 12562 742 1283 13812
the following table sets out the transfer value of his accrued benefits under the scheme calculated in accordance with guidance
note gn11 published by the institute of actuaries and the faculty of actuaries
transfer increase in directors’
value transfercontributions transfer
at value during during the value at
010107 the year year 311207
£££ £
s v cummins 119670 16747 1246 137663
the pension benefits of s v cummins through membership of the yule catto group retirement benefits scheme are restricted 
by the scheme rules t o fund his pension arrangements above this limit he received a payment of £11659 2006 £50400 directors’ remuneration report continued
directors’ fees
the fees of the individual nonexecutive directors holding office during the year were
2007 2006
£ £
a e richmondwatson – chairman 110000 100000 
the hon a g catto 30000 26000 
dr a a dobbie 12269 – 
r h hunting 36000 26000 
dato’ lee hau hian 30000 26000 
dato’ seri lee oi hian 30000 26000 
j k maiden 12269 – 
dr m j peagram 8758 33000 
p j welch 13799 26000 
c j williams 33000 26000 
p s wood 36000 26000 
352095 315000 
the nonexecutive directors receive no other remuneration in addition to their fee
fees in respect of the services of c j williams were paid to colin williams consulting
yule catto  co plc 
annual report and accounts 2007 
32 yule catto  co plc 
annual report and accounts 2007 
33
directors’ interests
shareholdings
given below are details of the interests of the directors in the share capital of the company at 31 december 2007 
and 31 december 2006
ordinary shares options
2007 2006 2007 2006
d c blackwood 10000 na
the hon a g catto 1187170 1187170
5593192 4020806
dr a a dobbie nil na
r h hunting 6000 6000
dato’ lee hau hian 10613 10613
dato’ seri lee oi hian 27248 27248
j k maiden nil na
a e richmondwatson 798647 798647
159632 159632
a m whitfield 6000 nil 259160 124352
c j williams nil nil
p s wood 2500 2500
 nonbeneficial interest
between 31 december 2007 and 29 february 2008 there were no changes in the directors’ holdings
executive and savingsrelated options
number of options
notional
at
during the year
at exercise value exercise
010107 granted lapsed exercised 311207 price £ period
a m whitfield 124352 c ii – – – 124352 – 234092 20092016
– c iii 134808 – – 134808 – 253776 20102017
124352 134808 – – 259160
number of options
at
during the year
at exercise exercise
010107 granted lapsed exercised 220307 price period
s v cummins 2448 a – – – 2448 2610p 20072008
92975 b – 92975 – – –
84806 c i – – – 84806 –
104455 c ii – – – 104455 –
– c iii 105432 – – 105432 –
284684 105432 92975 – 297141
a options granted under the yule catto employee savingsrelated share option scheme
b options granted under the yule catto performance share plan at 200 pence total exercise price which have lapsed due to
failure to meet a performance target
c options granted under the yule catto performance share plan at 200 pence total exercise price conditional upon the following
performance targets
i if mr s v cummins was still employed by the company the award made in 2005 to him would have vested in respect of 
100 of the shares only if the company’ s basic earnings per share for underlying performance over a three year period ended
on 31 december 2007 had increased by more than the annual rise in rpi plus 6 per annum compound compared with the
company’ s basic earnings per share for underlying performance for the year ended 31 december 2004 of 139p with basic
earnings per share for underlying performance to be calculated on a consistent basis under ifrs the award would not have
vested in respect of any shares unless the company’ s earnings per share over the same period has increased by at least the
annual rise in rpi plus 3 per annum compound at which point the award would have vested in respect of 30 of the shares
under the award the proportion of the award which would have vested for an increase in the company’ s earnings per share
over the same period between these points would have been calculated on a straight line basis directors’ interests continued
as mr cummins ceased to be employed by the company on 26 july 2007 the performance criteria were tested by reference
to the company’ s earnings per share for the year ended 31 december 2006 and were determined by the remuneration
committee not to have been met and accordingly the award has lapsed
ii for the award made in 2006 to mr a m whitfield it will vest in respect of 50 of the shares only if the company’ s total
shareholder return tsr over a three year period ending on 31 december 2008 has increased by the rise in rpi plus 
1576 or more compared with the company’ s tsr at the start of the three year performance period if growth in the
company’ s tsr is equal to the rise in rpi plus 7 69 over the three year performance period 25 of the shares subject
to the award will vest performance between these points will result in between 25 to 50 of the shares vesting on a
straight line basis with lesser performance resulting in no part of the 50 of the shares vesting vesting of the other 50 
of the shares subject to an award will be based on the growth in the company’ s tsr compared with the growth of the 
ftse 250 total return index over the same three year period if the company’ s tsr exceeds the ftse 250 total return index
by 7 69 or more over the three year period 50 of the shares subject to an award will vest if growth in the company’ s tsr
is equal to the ftse 250 over the three year performance period 5 of the shares subject to the award will vest performance
between these points will result in between 5 to 50 of the shares vesting on a straight line basis with lesser performance
resulting in no part of the 50 of the shares vesting
the award made in 2006 to mr s v cummins was granted subject to the same performance criteria as for mr whitfield
however as mr cummins ceased to be employed by the company on 26 july 2007 the performance criteria were tested as at
that date and were determined by the remuneration committee not to have been met and accordingly the award has lapsed
iii for the award made in 2007 to mr a m whitfield it will vest in respect of 50 of the shares only if the company’ s total
shareholder return tsr over a three year period ending on 31 december 2009 has increased by the rise in rpi plus 1576
or more compared with the company’ s tsr at the start of the three year performance period if growth in the company’ s tsr
is equal to the rise in rpi plus 927 over the three year performance period 25 of the shares subject to the award will vest
performance between these points will result in between 25 to 50 of the shares vesting on a straight line basis with lesser
performance resulting in no part of the 50 of the shares vesting vesting of the other 50 of the shares subject to an award
will be based on the growth in the company’ s tsr compared with the growth of the ftse 250 total return index over the
same three year period if the company’ s tsr exceeds the ftse 250 total return index by 7 69 or more over the three year
period 50 of the shares subject to an award will vest if growth in the company’ s tsr is equal to the ftse 250 over the three
year performance period 5 of the shares subject to the award will vest performance between these points will result in
between 5 to 50 of the shares vesting on a straight line basis with lesser performance resulting in no part of the 50 
of the shares vesting
the award made in 2007 to mr s v cummins was granted subject to the same performance criteria as for mr whitfield
however as mr cummins ceased to be employed by the company on 26 july 2007 the performance criteria were tested as at
that date and were determined by the remuneration committee not to have been met and accordingly the award has lapsed
the notional value of unexercised share options is based on the midmarket price of a share on 31 december 2007 of 18825
pence during the year the market price ranged between 149 pence and 25825 pence
by order of the board
r atkinson
secretary
12 march 2008
yule catto  co plc 
annual report and accounts 2007 
34 yule catto  co plc 
annual report and accounts 2007 
35
statement of directors’ responsibilities
financial statements including adoption 
of going concern basis
the directors are responsible for preparing the annual report
directors’ remuneration 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 the directors are required 
by the ias regulation to prepare the group financial statements
under ifrss ifrss as adopted by the european union the group
financial statements are also required by law to be properly
prepared in accordance with the companies act 1985 and
article 4 of the ias regulation 
international accounting standard 1 requires that ifrs financial
statements present fairly for each financial year the company’ s
financial position financial performance and cash flows this
requires the faithful representation of the effects of transactions
other events and conditions in accordance with the definitions
and recognition criteria for assets liabilities income and expenses
set out in the international accounting standards board’ s
‘framework for the preparation and presentation of financial
statements’ in virtually all circumstances a fair presentation 
will be achieved by compliance with all applicable ifrss
however directors are also required to
• properly select and apply accounting policies
• present information including accounting policies in a
manner that provides relevant reliable comparable and
understandable information and 
• provide additional disclosures when compliance with the
specific requirements in ifrss are insufficient to enable users
to understand the impact of particular transactions other
events and conditions on the entity’ s financial position and
financial performance
the directors have elected to prepare the parent company
financial statements in accordance with united kingdom
generally accepted accounting practice united kingdom
accounting standards and applicable law the parent
company financial statements are required by law to give a true
and fair view of the state of affairs of the company in preparing
these financial statements the directors are required to
• select suitable accounting policies and then apply them
consistently
• make judgments and estimates that are reasonable 
and prudent
• state whether applicable uk accounting standards have
been followed subject to any material departures disclosed
and explained in the financial statements and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business
the directors are responsible for keeping proper accounting
records that disclose with reasonable accuracy at any time 
the financial position of the company and enable them to ensure
that the parent company financial statements comply with the
companies act 1985 they are also responsible for safeguarding
the assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities
other matters
the directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company’ s website legislation in the united kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions independent auditors’ report to the members 
of yule catto  co plc
we have audited the group financial statements of yule catto  co
plc for the year ended 31 december 2007 which comprise the
consolidated income statement the consolidated balance sheet
the consolidated cash flow statement the consolidated
statement of recognised income and expense and the related
notes 1 to 35 these group financial statements have been
prepared under the accounting policies set out therein we have
also audited the information in the directors’ remuneration report
that is described as having been audited
we have reported separately on the parent company 
financial statements of yule catto  co plc for the year 
ended 31 december 2007 
this report is made solely to the company’ s members as a body  
in accordance with section 235 of the companies act 1985 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 t o 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
the directors’ responsibilities for preparing the annual report the
directors’ remuneration report and the group financial statements
in accordance with applicable law and international financial
reporting standards ifrss as adopted by the european union 
are set out in the statement of directors’ responsibilities
our responsibility is to audit the group financial statements in
accordance with relevant legal and regulatory requirements 
and international standards on auditing uk and ireland
we report to you our opinion as to whether the group financial
statements give a true and fair view whether the group financial
statements have been properly prepared in accordance with the
companies act 1985 and article 4 of the ias regulation and
whether the part of the directors’ remuneration report described as
having been audited has been properly prepared in accordance
with the companies act 1985 we also report to you whether in our
opinion the information given in the directors’ report is consistent
with the group financial statements the information given in the
directors’ report includes that specific information that is cross
referred from the business review section of the directors’ report
in addition we report to you if in our opinion we have not received 
all the information and explanations we require for our audit or if
information specified by law regarding directors’ remuneration 
and other transactions is not disclosed
we review whether the corporate governance statement reflects
the company’ s compliance with the nine provisions of the 2006
combined code specified for our review by the listing rules of the
financial services authority  and we report if it does not we are not
required to consider whether the board’ s statements on internal
control cover all risks and controls or form an opinion on the
effectiveness of the group’ s corporate governance procedures 
or its risk and control procedures
yule catto  co plc 
annual report and accounts 2007 
36
we read the other information contained in the annual report 
as described in the contents section and consider whether it is
consistent with the audited group financial statements the other
information comprises only the directors’ report the chairman’ s
statement the unaudited part of the directors’ remuneration report
the enhanced business review and the corporate governance
statement we consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies
with the group financial statements our responsibilities do not
extend to any further information outside the annual report
basis of audit opinion
we conducted our audit in accordance with international
standards on auditing uk and ireland issued by the auditing
practices board an audit includes examination on a test basis 
of evidence relevant to the amounts and disclosures in the group
financial statements and the part of the directors’ remuneration
report to be audited it also includes an assessment of the
significant estimates and judgments made by the directors in the
preparation of the group financial statements and of whether the
accounting policies are appropriate to the group’ s circumstances
consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the
information and explanations which we considered necessary 
in order to provide us with sufficient evidence to give reasonable
assurance that the group financial statements and the part 
of the directors’ remuneration report to be audited are free 
from material misstatement whether caused by fraud or other
irregularity or error  in forming our opinion we also evaluated the
overall adequacy of the presentation of information in the group
financial statements and the part of the directors’ remuneration
report to be audited
opinion
in our opinion
• the group financial statements give a true and fair view in
accordance with ifrss as adopted by the european union 
of the state of the group’ s affairs as at 31 december 2007 
and of its profit for the year then ended
• the group financial statements have been properly prepared in
accordance with the companies act 1985 and article 4 of the
ias regulation 
• the part of the directors’ remuneration report described as
having been audited has been properly prepared in accordance
with the companies act 1985 and
• the information given in the directors’ report is consistent with
the group financial statements
separate opinion in relation to ifrss
as explained in note 2 to the group financial statements the group 
in addition to complying with its legal obligation to comply with ifrss
as adopted by the european union has also complied with the
ifrss as issued by the international accounting standards board
in our opinion the group financial statements give a true and fair
view in accordance with ifrss of the state of the group’ s affairs 
as at 31 december 2007 and of its profit for the year then ended
deloitte  t ouche llp
chartered accountants and registered auditors 
cambridge united kingdom
12 march 2008 yule catto  co plc 
annual report and accounts 2007 
37
consolidated income statement
for the year ended 31 december 2007
2007 2006
continuing operations continuing operations
underlying underlying 
performance special items ifrs performance special items ifrs
note £’000 £’000 £’000 £’000 £’000 £’000
group revenue 45565595 –565595 543226 8429 551655 
share of joint ventures’ revenue 45 15046 – 15046 14131 – 14131 
t otal sales 580641 – 580641 557357 8429 565786 
group revenue 565595 – 565595 543226 8429 551655 
company and subsidiaries 
before special items 44885 – 44885 41888 – 41888 
operations sold or closed 
during the year 4 – 28237 28237 – 1809 1809
uk pension fund – 
past service credit 23 – 10797 10797 – – – 
impairment of noncurrent assets 4 – – – – 19699 19699
company and subsidiaries 44885 17440 27445 41888 21508 20380 
share of joint ventures 45 1129 – 1129 1071 – 1071 
operating profitloss 5 46014 17440 28574 42959 21508 21451 
interest payable 8 16046 – 16046 13564 – 13564
interest receivable 8 4549 – 4549 2121 – 2121
11497 – 11497 11443 – 11443
fair value adjustment 8 – 4447 4447 – 3618 3618 
finance costs 11497 4447 7050 11443 3618 7825
profitloss before taxation 34517 12993 21524 31516 17890 13626 
taxation 9 7646 1586 6060 8820 35 8855
profitloss for the year 26871 11407 15464 22696 17925 4771 
profit attributable to minority interests 25 1679 – 1679 1344 – 1344 
profit attributable to equity 
holders of the parent 25 25192 11407 13785 21352 17925 3427 
26871 11407 15464 22696 17925 4771 
earnings per share – basic 12 173p 78p 95p 147p 123p 24p 
– diluted 12 172p 78p 94p 146p 123p 23p 
special items
the special items are shown in more detail in note 3 consolidated balance sheet
31 december 2007
2007 2006
note £’000 £’000
noncurrent assets
goodwill 14 172443 172443
other intangible assets 15 591 439
property plant and equipment 16 108468 110167
deferred tax assets 10 762 1179
investment in joint ventures 17 3177 3300
285441 287528
current assets
inventories 18 65001 66080
trade and other receivables 19 115078 105166
cash and cash equivalents 20 108352 65917
derivatives at fair value 21 1813 –
290244 237163
current liabilities
borrowings 20 133585 57802
trade and other payables 22 148300 124892
current tax liability 9 48948 52100
derivatives at fair value 21 26000 22336
356833 257130
noncurrent liabilities
borrowings 20 125108 158771
trade and other payables 22 460 372
deferred tax liability 10 6445 6316
post retirement benefit obligations 23 41236 77884
173249 243343
net assets 45603 24218
equity
called up share capital 24 14566 14566
share premium 25 33034 33034
capital redemption reserve 25 949 949
hedging and translation reserve 25 9087 7371
retained earnings 25 416 21031
equity attributable to equity holders of the parent 39878 20147
minority interests 25 5725 4071
t otal equity 45603 24218
analysis of net borrowings
cash and cash equivalents 20 108352 65917 
current borrowings 20 133585 57802
noncurrent borrowings 20 125108 158771
net borrowings 150341 150656
add back special items 20 20490 15615
net borrowings underlying performance 170831 166271
the financial statements were approved by the board of directors and authorised for issue on 12 march 2008 they are signed on
its behalf by
a m whitfield
d c blackwood
directors
yule catto  co plc 
annual report and accounts 2007 
38 yule catto  co plc 
annual report and accounts 2007 
39
consolidated cash flow statement
for the year ended 31 december 2007
2007 2006
note £’000 £’000 £’000 £’000
operating
cash generated from operations 26 49447 46376 
interest received 4549 2121 
interest paid 15611 13581
net interest paid 11062 11460
uk corporation tax received 1179 – 
overseas corporate tax paid 11636 9196
t otal tax paid 10457 9196
net cash inflow from operating activities 27928 25720
investing
dividends received from joint ventures 17 1202 1385 
purchase of property plant and equipment 16994 18468
sale of property plant and equipment 2413 1539 
net capital expenditure and financial investment 14581 16929
sale of businesses 27 – 3660 
net cash impact of acquisitions and disposals – 3660 
net cash outflow from investing activities 13379 11884
financing
equity dividends paid 11 13689 13251
dividends paid to minority interests 25 537 1697
purchase of own shares 25 246
issue of shares – 1291 
proceeds of noncurrent borrowings 28 174 154 
net cash outflow from financing activities 14077 13749
increase in cash and bank overdrafts during the year 472 87 
comprised of
cash and cash equivalents 28 51896 23160 
bank overdrafts 28 51424 23073
472 87 
reconciliation of net cash flow from operating 
activities to movement in net borrowings
net cash inflow from operating activities 27928 25720 
add back dividends received from joint ventures 17 1202 1385 
less net capital expenditure and financial investment 14581 16929
less dividends paid to minority interests 25 537 1697
free cash flow before dividends 14012 8479 
net cash impact of acquisitions and disposals 27 – 3660 
purchase of own shares 25 25 246
issue of shares 25 – 1291 
equity dividends paid 11 13689 13251
exchange movements 4858 613
movement in net borrowings underlying performance 4560 680 consolidated statement of recognised 
income and expense
for the year ended 31 december 2007
2007 2006
minority equity holders minority equity holders 
interests of the parent t otal interests of the parent t otal
£’000 £’000 £’000 £’000 £’000 £’000
actuarial gains and losses – 21698 21698 – 13551 13551
t ax on items recognised directly in equity – 519 519 – 1409 1409
exchange differences 512 1716 1204 296 6890 7186
profit for the year 1679 13785 15464 1344 3427 4771 
t otal recognised incomeexpenditure 
for the period 2191 33248 35439 1048 18423 17375
yule catto  co plc 
annual report and accounts 2007 
40 yule catto  co plc 
annual report and accounts 2007 
41
notes to the consolidated financial statements
31 december 2007
1 general information
yule catto  co plc is a company incorporated in the united
kingdom under the companies act 1985 the address of the
registered office is given on page 21
these financial statements are presented in pounds sterling
because that is the currency of the primary economic environment
in which the group operates foreign operations are included 
in accordance with the policies set out in note 2
at the date of authorisation of these financial statements 
the following standards and interpretations which have not
been applied in these financial statements were in issue but 
not yet effective 
ifrs 8 operating segments 
amendments to ias 1 presentation of financial statements 
– a revised presentation 
amendments to ias 23 borrowing costs
ifric 11 ifrs 2 group and treasury share transactions 
ifric 12 service concession arrangements 
ifric 13 customer loyalty programmes
ifric 14 ias 19 the limit on a defined benefit asset 
minimum funding requirements and their interaction
2 significant accounting policies
basis of accounting
the financial statements have been prepared in accordance
with international financial reporting standards ifrss the
financial statements have also been prepared in accordance
with ifrss adopted by the european union and therefore the
group financial statements comply with article 4 of the eu ias
regulation the financial statements have been prepared on 
the historical cost basis except for the revaluation of certain
properties and financial instruments the principal accounting
policies adopted are set out below
basis of consolidation
the consolidated financial statements incorporate the 
financial statements of the company and entities controlled 
by the company its subsidiaries made up to 31 december
each year control is achieved where the company has the
power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities
the results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from
the effective date of acquisition or up to the effective date 
of disposal as appropriate where necessary adjustments 
are made to the financial statements of subsidiaries to bring 
the accounting policies used into line with those used by 
the group
the results of joint ventures are accounted for using 
equity accounting
minority interests in the net assets of consolidated 
subsidiaries are identified separately from the group’ s equity
therein minority interests consist of the amount of those
interests at the date of the original business combination 
see below and the minority’ s share of changes in equity since
the date of combination subsequently any losses applicable 
to the minority interest in excess of the minority interest are
allocated against the interests of the parent except to the extent
that the minority has a binding obligation and is able to make 
an additional investment to cover the losses
all intragroup transactions balances income and expenses
are eliminated on consolidation
goodwill
goodwill arising on consolidation represents the excess of the
cost of acquisition over the group’ s interest in the fair value of
the identifiable assets and liabilities of a subsidiary associate 
or jointly controlled entity at the date of acquisition goodwill 
is recognised as an asset and reviewed for impairment at least
annually any impairment is recognised immediately in 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 the combination cashgenerating units 
to which goodwill has been allocated are tested for impairment
annually or more frequently when there is an indication that the
unit may be impaired if the recoverable amount of the cash
generating unit is less than the carrying amount of the unit the
impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets
of the unit prorata on the basis of the carrying amount of each
asset in the unit an impairment loss recognised for goodwill is
not reversed in a subsequent period
on disposal of a subsidiary associate or jointly controlled entity
the attributable amount of goodwill is included in the
determination of the profit or loss on disposal
goodwill arising on acquisitions before the date of transition 
to ifrss has been retained at the previous uk gaap amounts
subject to being tested for impairment at that date goodwill
written off to reserves under uk gaap prior to 1998 has not
been reinstated and is not included in determining any
subsequent profit or loss on disposal
other intangible assets
software development and environmental licensing costs
resulting in development of a long term intangible asset are
measured initially at cost and are amortised on a straightline
basis over their estimated useful lives
an internallygenerated intangible asset arising from the 
group’ s product development is recognised only if all of the
following conditions in ias 38 are met
• an asset is created that can be separately identified 
such as software and new processes
• it is probable that the asset created will generate future
economic benefits and
• the development cost of the asset can be measured reliably notes to the consolidated financial statements continued
31 december 2007
2 significant accounting policies continued
no research or development costs met the criteria for 
required capitalisation under ias 38 during the year
where no internallygenerated intangible asset can be
recognised development expenditure is recognised as 
an expense in the period in which it is incurred 
property plant and equipment
property plant and equipment is stated at cost net of
depreciation and any provision for impairment except for
freehold land and land grants in malaysia which are not
depreciated the cost or valuation of property plant and
equipment is depreciated using a straight line basis over 
its expected useful life as follows
freehold buildings – 50 years
leasehold land and buildings – the lesser of 50 years and 
the period of the lease
plant and equipment – between 3 and 10 years
impairment of tangible and intangible assets excluding goodwill
at each balance sheet date the group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered
an impairment loss if any such indication exists the recoverable
amount of the asset is estimated in order to determine the
extent of the impairment loss if any where the asset does not
generate cash flows that are independent from other assets 
the group estimates the recoverable amount of the cash
generating unit to which the asset belongs
recoverable amount is the higher of fair value less costs to sell
and value in use in assessing value in use the estimated future
cash flows are discounted to their present value using a pretax
discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted
if the recoverable amount of an asset or cashgenerating unit 
is estimated to be less than its carrying amount the carrying
amount of the asset or cashgenerating unit is reduced to its
recoverable amount an impairment loss is recognised as an
expense immediately unless the relevant asset is carried at a
revalued amount in which case the impairment loss is treated
as a revaluation decrease
operating leases
operating lease payments are expensed on a straight line basis
to the income statement over the term of the relevant lease any
benefits received as an incentive to enter into an operating lease
are also spread on a straight line basis over the lease term
yule catto  co plc 
annual report and accounts 2007 
42
inventories
inventories are stated at the lower of cost and net realisable
value cost comprises direct materials and where applicable
direct labour costs and those overheads that have been
incurred in bringing the inventories to their present location 
and condition cost is calculated using the weighted average
method net realisable value represents the estimated selling
price less all estimated costs of completion and costs to be
incurred in marketing selling and distribution provision is made
for obsolete slowmoving or defective items where appropriate
financial instruments
financial assets and financial liabilities are recognised on the
group’ s balance sheet when the group becomes a party to the
contractual provisions of the instrument
loans and receivables
trade receivables
trade receivables are measured at initial recognition at fair 
value and are subsequently measured at amortised cost using
the effective interest rate method appropriate allowances for
estimated irrecoverable amounts are recognised in profit or loss
where there is objective evidence that the asset is impaired 
amortised costs
bank borrowings
interestbearing bank loans and overdrafts are recorded at the
proceeds received net of direct issue costs finance charges
including premiums payable on settlement or redemption and
direct issue costs are accounted for on an accruals basis to the
profit and loss account using the effective interest method and
are added to the carrying amount of the instrument to the extent
that they are not settled in the period in which they arise
trade payables
trade payables are measured at initial recognition at fair value
and are subsequently measured at amortised cost using the
effective interest rate method
fair value through the income statement
derivative financial instruments
the group uses derivative financial instruments to reduce
exposure to foreign exchange risk and interest rate movements
the group does not hold or issue derivative financial
instruments for speculative purposes
the use of financial derivatives is governed by the group’ s
policies approved by the board of directors which provide
written principles on the use of financial derivatives as set 
out in note 21 
impairment of financial assets
at each balance sheet date the group reviews the carrying
amounts of its financial assets to determine whether there is 
any indication that those assets have suffered an impairment
loss if any such indication exists the recoverable amount of 
the asset is estimated in order to determine the extent of the
impairment loss if any yule catto  co plc 
annual report and accounts 2007 
43
finance costs
finance costs of debt are recognised in the income statement
over the term of such instruments at a constant rate on the
carrying amount finance costs that are directly attributable 
to the construction of tangible fixed assets are capitalised as
part of the cost of those assets in accordance with ias 23
foreign currencies 
in preparing the financial statements of the individual
companies transactions in currencies other than the entity’ s
functional currency are recorded at the rates of exchange
prevailing on the dates of the transactions at each balance
sheet date monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing 
on the balance sheet date nonmonetary assets and liabilities
carried at fair value that are denominated in foreign currencies
are translated at the rates prevailing at the date when the fair
value was determined nonmonetary items that are measured
in terms of historical cost in a foreign currency are not
retranslated
in order to hedge its exposure to certain foreign exchange risks
the group enters into forward contracts and options see below
for details of the group’ s accounting policies in respect of such
derivative financial instruments
on consolidation the assets and liabilities of the group’ s
overseas operations are translated at exchange rates prevailing
on the balance sheet date income and expense items are
translated at the average exchange rates for the period unless
exchange rates fluctuate significantly exchange differences
arising if any are classified as equity and transferred to the
group’ s translation reserve such translation differences are
recognised as income or as expenses in the period in which 
the operation is disposed of
goodwill and fair value adjustments arising on the acquisition 
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate the group has
elected to treat goodwill and fair value adjustments arising on
acquisitions before the date of transition to ifrss as sterling
denominated assets and liabilities
taxation
the tax expense represents the sum of the tax currently 
payable and deferred tax
the tax currently payable is based on taxable profit for the year
t axable profit differs from net profit as reported in the income
statement because it excludes items of income or expense that
are taxable or deductible in other years and it further excludes
items that are never taxable or deductible the group’ s liability
for current tax is calculated using tax rates that have been
enacted or substantially enacted by the balance sheet date
deferred tax is the tax expected to be payable or recoverable 
on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding 
tax bases used in the computation of taxable profit and is
accounted for using the balance sheet liability method deferred
tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised 
deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and
associates and interests in joint ventures except where the
group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse
in the foreseeable future
the carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered
deferred tax is calculated at the tax rates that are expected 
to apply in the period when the liability is settled or the asset
is realised deferred tax is charged or credited in the income
statement except when it relates to items charged or credited
directly to equity in which case the deferred tax is also dealt 
with in equity
retirement benefit costs 
the costs of defined benefit contributions to the group’ s
pension schemes and of augmenting existing pensions are
charged to the income statement on a systematic basis over 
the expected period of benefits from employees’ service
payments to defined contribution retirement benefit schemes
are charged as an expense as they fall due
actuarial gains on the defined benefit schemes are recognised
in full in each period in which they occur they are recognised
outside of profit or loss and are presented in the statement of
recognised income and expense
the uk defined benefit scheme is funded with the assets 
of the scheme held separately from those of the group in
separate trusteeadministered funds 
for the german schemes the assets are included within the
assets of the respective companies as permitted under local
laws the assets of the other overseas schemes are held
separately from those of the group
provisions
provisions for warranty costs are recognised at the date of sale
of the relevant products at the directors’ best estimate of the
expenditure required to settle the group’ s liability
provisions for restructuring costs are recognised when the
group has a detailed formal plan for the restructuring that has
been communicated to affected parties notes to the consolidated financial statements continued
31 december 2007
2 significant accounting policies continued
revenue recognition
revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable 
for goods and services provided in the normal course of
business net of discounts vat and other salesrelated taxes
sales of goods are recognised when goods are delivered and
title has passed where delivery is defined in accordance with
incoterms 2000
share based payments
the group has applied the requirements of ifrs 2 sharebased
payments in accordance with the transitional provisions ifrs
2 has been applied to all grants of equity instruments after 7
november 2002 that were unvested as of 1 january 2006
the group issues equitysettled sharebased payments to
certain employees equitysettled sharebased payments 
are measured at fair value at the date of grant the fair value
determined at the grant date of the equitysettled sharebased
payments is expensed on a straightline basis over the vesting
period based on the group’ s estimate of shares that will
eventually vest
definitions
total sales
t otal sales represent the total of revenue from yule catto 
 co plc its subsidiaries and its share of the revenue 
of joint ventures
operating profit
operating profit represents profit before financing costs 
and taxation 
ebitda
ebitda is calculated as operating profit before depreciation
amortisation and nonrecurring items
nonrecurring items
nonrecurring items includes those items that are not directly 
or indirectly associated with the group’ s trading performance
which need to be separately disclosed in order to enable
improved understanding of the accounts by users
nonrecurring items are defined as
• profit or loss impact arising from the sale or closure 
of an operation
• impairment of noncurrent assets and
• other nonoperating or oneoff items
yule catto  co plc 
annual report and accounts 2007 
44
special items
the following are disclosed separately in note 3 as special 
items in order to provide a clearer indication of the group’ s
underlying performance
• nonrecurring items
• marktomarket adjustments in respect of cross currency 
and interest rate derivatives used for hedging purposes 
where ias 39 hedge accounting is not applied and
• revaluation of us dollar loan notes from the rate of the 
related cross currency swaps to the year end rate
net borrowings
net borrowings represents cash and cash equivalents together
with short and long term borrowings as adjusted for the effect
of related derivative instruments irrespective of whether they
qualify for hedge accounting
critical accounting judgements and key sources 
of estimation uncertainty
in the process of applying the group’ s accounting policies
which are described above management has made the
following judgements that have the most significant effect on 
the amounts to be recognised in the financial statements apart
from those involving estimations which are dealt with below
impairment of goodwill 
determining whether goodwill is impaired requires an 
estimation of the value in use of the cashgenerating units to
which goodwill has been allocated the value in use calculation
requires the entity to estimate the future cash flows expected 
to arise from the cashgenerating unit and a suitable discount
rate in order to calculate present value the carrying amount 
of goodwill at the balance sheet date was £1724 million after 
an impairment loss of £589 million was recognised during the
transition to ifrs in 2004 details of the impairment loss
calculation are provided in note 14
post retirement benefit obligations
included in the actuaries’ calculation of the post retirement
benefit obligations are a number of assumptions these are
shown in detail in note 23
current tax liability
when calculating the current tax liability an appropriate estimate
has been made regarding the outstanding items in respect of
previous years with various tax authorities to which the outcome
of discussions is uncertain
closure of manufacturing sites
included in costs to close the manufacturing sites are estimates
for redundancy decontamination and dismantling costs these
estimates are based on experience gained in previous closures yule catto  co plc 
annual report and accounts 2007 
45
3 special items
special items
the special items are made up as follows
special items special items
2007 2006
£’000 £’000
t otal sales
revenue of operations sold or closed during the year – 8429
operating profitloss
operating profitloss of operations sold or closed during the year – 117
profit or loss arising from the sale or closure of operations see note 7 28237 1926
28237 1809
uk pension fund – past service credit 10797 –
impairment of noncurrent assets – 19699
17440 21508
finance costs
fair value adjustment see note 8 4447 3618
taxation
t axation on operating profitloss of operations sold or closed during the year 1586 35
t axation on profit or loss arising from the sale or closure of operations – –
1586 35
4 segmental analysis 
primary format
t otal sales operating profit
underlying special underlying special
performance items ifrs performance items ifrs
2007 £’000 £’000 £’000 £’000 £’000 £’000
analysis by activity
continuing activity
polymer chemicals 410175 – 410175 40028 – 40028
share of polymer joint ventures 15046 – 15046 1129 – 1129
425221 – 425221 41157 – 41157
pharma chemicals 63784 – 63784 7443 12461 5018
impact chemicals 91636 – 91636 3005 15776 12771
t otal sales 580641 – 580641
divisional operating profit 51605 28237 23368
unallocated corporate expenses 5591 10797 5206
operating profit 46014 17440 28574
t otal sales operating profit
underlying special underlying special
performance items ifrs performance items ifrs
2006 £’000 £’000 £’000 £’000 £’000 £’000
analysis by activity
continuing activity
polymer chemicals 384953 – 384953 37678 – 37678
share of polymer joint ventures 14131 – 14131 1071 – 1071
399084 – 399084 38749 – 38749
pharma chemicals 64404 – 64404 8133 – 8133
impact chemicals 93869 8429 102298 964 21508 20544
t otal sales 557357 8429 565786
divisional operating profit 47846 21508 26338
unallocated corporate expenses 4887 – 4887
operating profit 42959 21508 21451 notes to the consolidated financial statements continued
31 december 2007
4 segmental analysis continued
special items
unallocated 
pharma impact corporate 
chemicals chemicals expenses total
2007 £’000 £’000 £’000 £’000
revenue of businesses sold or closed during the year ––––
profit or loss arising from the sale or closure of operations 12461 15776 – 28237
uk pension fund – past service credit – – 10797 10797
12461 15776 10797 17440
unallocated 
pharma impact corporate 
chemicals chemicals expenses total
2006 £’000 £’000 £’000 £’000
revenue of businesses sold or closed during the year – 8429 – 8429
operating profitloss of businesses sold or closed during the year – 117 – 117
profit or loss arising from the sale or closure of operations – 1926 – 1926
impairment of noncurrent assets – 19699 – 19699
– 21508 – 21508
depreciation 
total total capital and 
assets liabilities expenditure amortisation
2007 £’000 £’000 £’000 £’000
analysis by activity
continuing activity
polymer chemicals 175479 110894 11758 7111
pharma chemicals 61525 25242 3289 5205
impact chemicals 54121 44605 3511 3079
291125 180741 18558 15395
holding companies 664 90652 129 618
291789 271393 18687 16013
share of polymer joint ventures 7338 4233
goodwill see note 14 172443
net borrowings 150341
471570 425967
net assets 45603
depreciation 
total total capital and 
assets liabilities expenditure amortisation
2006 £’000 £’000 £’000 £’000
analysis by activity
continuing activity
polymer chemicals 147891 109147 8284 6931
pharma chemicals 62419 20668 6036 4273
impact chemicals 56981 51822 3782 6417
267291 181637 18102 17621
holding companies 11587 98882 96 692
278878 280519 18198 18313
share of polymer joint ventures 7453 3381 
goodwill see note 14 172443
net borrowings 150656
net assets 458774 434556
24218
yule catto  co plc 
annual report and accounts 2007 
46 yule catto  co plc 
annual report and accounts 2007 
47
secondary format
t otal sales segment net assets capital expenditure
2007 2006 2007 2006 2007 2006
£’000 £’000 £’000 £’000 £’000 £’000
analysis by region of operation
united kingdom 163914 176985 61329 87758 4617 5498
other europe 240707 237598 34668 46549 7029 7435
asia 134618 112776 40955 33907 6489 4201
rest of world 41402 38427 9207 9733 552 1064
580641 565786 23501 2431 18687 18198
goodwill 172443 172443
net borrowings 150341 150656
net assets 45603 24218
2007 2006
£’000 £’000
analysis of total sales by destination
united kingdom 91349 98203
other europe 231560 227158
asia 150332 128003
africa and middle east 55428 54005
rest of world 51972 58417
580641 565786
intersegmental sales
in addition to the amounts included above intersegmental sales of £2837 000 2006 £2545000 were made as set out below 
these sales were eliminated on consolidation
polymer pharma impact 
chemicals chemicals chemicals total
2007 £’000 £’000 £’000 £’000
polymer chemicals ––––
pharma chemicals – – 673 673
impact chemicals – 2164 – 2164
total – 2164 673 2837
polymer pharma impact 
chemicals chemicals chemicals total
2006 £’000 £’000 £’000 £’000
polymer chemicals ––––
pharma chemicals – – 511 511
impact chemicals – 2034 – 2034
total – 2034 511 2545 notes to the consolidated financial statements continued
31 december 2007
5 operating profit
company and joint company and joint 
subsidiaries ventures total subsidiaries ventures total
2007 2007 2007 2006 2006 2006
£’000 £’000 £’000 £’000 £’000 £’000
t otal sales 565595 15046 580641 551655 14131 565786
cost of sales 450305 12381 462686 436290 11607 447897
gross profit 115290 2665 117955 115365 2524 117889
distribution costs 43299 784 44083 42873 628 43501
administrative expenses 44546 752 45298 52112 825 52937
operating profit 27445 1129 28574 20380 1071 21451
2007 2006
£’000 £’000
operating profit is stated after chargingcrediting the following
depreciation 15766 18086
amortisation 247 227
hire of plant and equipment 1770 1439
other lease rentals 2931 2832
research and development expenditure 9083 10495
loss or profit arising from the sale or closure of operations 28237 1926
uk pension fund – past service credit 10797 –
6 auditors’ remuneration
2007 2006
£’000 £’000
fees payable to the company’ s auditors for
– audit of the company’ s annual accounts 7 7
fees payable to the company’ s auditors and their associates for
– audit of the company’ s subsidiaries pursuant to legislation 478 478
t otal audit fees 485 485
t ax services 56 79
other services 29 –
t otal nonaudit fees 85 79
the other services provided by the group auditors relate to assistance given in grant applications and sundry projects
7 profit or loss arising from the sale or closure of operations
2007 2006
cash fixed asset 
costs write off t otal total
£’000 £’000 £’000 £’000
profit or loss arising from the sale or closure of operations
closure of uquifa’ s italian manufacturing site 6151 6310 12461 – 
closure of holliday pigments uk manufacturing site 7616 – 7616 – 
closure of james robinson’ s german manufacturing site 6050 3869 9919 – 
sale of huddersfield site 1759 – 1759 – 
sale of brencliffe ltd – – – 198 
sale of holliday dispersions ltd and sa – – – 485 
sale of autoclenz ltd – – – 699 
restructuring of james robinson ltd – – – 235 
restructuring of william blythe ltd – – – 336 
sale of reabrook limited – – – 3994
releases from provisions created prior to 2006 – – – 115
18058 10179 28237 1926
in each case assets retained that cannot be sold are written off t o the extent that workers are not redeployed termination terms
are agreed
yule catto  co plc 
annual report and accounts 2007 
48 yule catto  co plc 
annual report and accounts 2007 
49
8 finance costs
2007 2006
£’000 £’000
interest payable on bank loans and overdrafts 11316 9227
interest payable on other loans 4730 4337
16046 13564
less interest receivable 4549 2121
net interest payable 11497 11443
fair value adjustment 4447 3618
t otal finance costs 7050 7825
the fair value adjustment is the mark to market adjustment in respect of cross currency and interest rate derivatives used for
hedging purposes where ias 39 hedge accounting is not applied
9 current taxation
2007 2006
£’000 £’000
current tax
uk corporation tax 1585 –
overseas taxation 9578 8553
7993 8553
t ax on special items – overseas 1586 35
t ax charge for the year 6407 8588
deferred tax
origination and reversal of temporary differences 347 267
t otal tax on profit before taxation 6060 8855
uk corporation tax is calculated at 30 2006 30 of the estimated assessable profit for the year t axation for other jurisdictions is
calculated at the rates prevailing in the respective jurisdictions
reconciliation of tax expense to profit before taxation
the differences between the total current tax shown above and the amount calculated by applying the standard rate of uk
corporation tax to the profit before tax is as follows
2007 2006
£’000 £’000
profit before taxation 21524 13626
t ax on profit before taxation at standard uk corporation tax rate of 30 2006 30 6457 4088
effects of
expenses not deductible for tax purposes 503 6702
t ax incentives 3089 1165
losses not recognised less utilisation of losses not previously recognised 1691 459
higher tax rates on overseas earnings 837 10
t ax effect on share of results of joint ventures 339 321
t ax charge for year 6060 8855
t ax charges to equity
2007 2006
£’000 £’000
current tax charge on items recognised directly in equity – –
deferred tax charge on items recognised directly in equity 519 1409
519 1409
current tax liabilities
2007 2006
£’000 £’000
current tax liabilities 48948 52100 notes to the consolidated financial statements continued
31 december 2007
10 deferred taxation
deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise to deferred tax
assets to the extent that it is probable that these assets will be recovered no deferred tax is recognised on the unremitted earnings
of overseas subsidiaries and joint ventures as the earnings are continually reinvested by the group no tax is expected to be
payable on them in the foreseeable future
the movements in deferred tax assets and liabilities prior to offset are shown below
deferred tax liabilities
accelerated 
tax 
depreciation other total
2007 £’000 £’000 £’000
at 1 january 5034 1282 6316
credit to pl account 276 71 347 
exchange adjustment 451 25 476
at 31 december 5209 1236 6445
deferred tax assets
pensions other total
2007 £’000 £’000 £’000
at 1 january 1179 – 1179
credited to pl account 102 – 102 
charged through pl reserves 519 – 519
at 31 december 762 – 762 
all of the deferred tax assets were available for offset against deferred tax liabilities and hence the net deferred tax provision 
at 31 december 2007 is as follows
net deferred tax assetliability
total
£’000
at 31 december 2007 5683
at 31 december 2006 5137
deferred tax asset not recognised
deferred tax has not been recognised where it has been assumed that the deferred tax asset is not recoverable the amounts 
of deferred tax not recognised at the balance sheet dates are as follows
2007 2006
£’000 £’000
uk pension liability 9419 20786
t ax losses 3463 5107
accelerated capital allowances 11183 11781
other timing differences 2731 2780
26796 40454
in march 2007 the uk government announced that they would introduce legislation that would reduce the corporation tax rate to
28 with effect from 1 april 2008 deferred tax asset not recognised for the uk entities previously stated at 30 of the temporary
differences have been restated at 28 of those amounts
yule catto  co plc 
annual report and accounts 2007 
50 yule catto  co plc 
annual report and accounts 2007 
51
deferred tax on unremitted overseas earnings
the estimated deferred tax relating to the retained profits held within subsidiary group companies and not yet remitted excluding
any mitigation through use of loss relief double taxation credits and other reliefs is as follows
2007 2006
£’000 £’000
deferred tax not recognised 66965 68243
at the balance sheet date the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries
associates and joint ventures was £67 3 million 2006 £688 million calculation of the potential deferred tax liability has not been
undertaken as the group is in a position to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future if the temporary differences were to reverse in the future it is probable that the
majority of the potential tax liability would be covered by tax credits in respect of tax paid locally
11 dividends
2007 2006
£’000 £’000
ordinary
– prior year final of 55 pence per share 2005 53 pence 8011 7670 
– interim of 39 pence per share 2006 38 pence 5678 5581 
13689 13251 
– proposed final of 57 pence per share 2006 55 pence 8303 8011 
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included 
as a liability in these financial statements
12 earnings per share
2007 2006
underlying special underlying special 
performance items ifrs performance items ifrs
£’000 £’000 £’000 £’000 £’000 £’000
earnings profit attributable 
to equity holders of the parent 25192 11407 13785 21352 17925 3427 
earnings per share 173p 78p 95p 147p 123p 24p 
diluted earnings per share 172p 78p 94p 146p 123p 23p 
earnings per share are calculated using the weighted average number of shares in issue during the year of 145639000
2006 145535000
diluted earnings per share are calculated using the weighted average number of shares in issue in the year as adjusted for dilutive
share options of 146355000 2006 146469000
13 employees
2007 2006
number number
the average monthly number of employees during the year by activity was
polymer chemicals 1442 1439 
pharma chemicals 473 461 
impact chemicals 604 696 
holding companies 45 42 
2564 2638 
share of joint ventures 108 117 
2672 2755 notes to the consolidated financial statements continued
31 december 2007
13 employees continued
2007 2006
£’000 £’000
the aggregate remuneration of all group employees comprised
wages and salaries 57646 59109 
social security costs 9642 9421 
post retirement benefit obligations 3472 4148 
70760 72678 
14 goodwill
2007 2006
£’000 £’000
cost
at 31 december 309371 309371
accumulated impairment losses
at 31 december 136928 136928
net book value
at 31 december 172443 172443
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired
cash generating units “cgu” comprise primarily acquired entities monitored at business unit level the exception is where
management monitor a cash generating unit across similar businesses as a whole or components of businesses largely
independent of other parts of that business
the allocation of the carrying value of goodwill is represented below
31 december 2005 31 december 2006 31 december
impairments impairments 2007
net book during net book during net book 
value the year value the year value
polymer chemicals
synthomer ltd and harlow chemical company ltd 70521 – 70521 – 70521
synthomer gmbh 13120 – 13120 – 13120
synthomer hasselt bv 3089 – 3089 – 3089
86730 – 86730 – 86730
pharma chemicals
uquifa spain sa 61713 – 61713 – 61713
uquifa mexico sacv 5172 – 5172 – 5172
66885 – 66885 – 66885
impact chemicals
holliday chemical espana sa 97 – 97 – 97
holliday france sa 136 – 136 – 136
holliday pigments ltd and sa 14977 – 14977 – 14977
james robinson gmbh 3382 – 3382 – 3382
other 236 – 236 – 236
18828 – 18828 – 18828
total 172443 – 172443 – 172443
in compiling the above table the recoverable amounts for the cgus are determined from value in use calculations based upon
discounted cash flows the key assumptions for the discounted cash flow calculations are those regarding the discount rate profit
and growth rate management estimates pretax discount rates that reflect current market assessments of the time value of money
and the risks specific to each cgu discount rates of 80 – 100 have been used the profit used in the cash flows for the first five
years is derived from management forecasts for years 6 to 10 a growth rate is applied the profit for year 10 is then assumed to
apply without further growth into perpetuity growth rates of between 25 and 50 have been used representing management’ s
best estimate of each cgu’ s circumstances and these do not exceed average long term growth rates for the markets concerned
yule catto  co plc 
annual report and accounts 2007 
52 yule catto  co plc 
annual report and accounts 2007 
53
15 other intangible assets
expenditure on research activities is recognised as an expense in the period in which it is incurred
no development expenditure met the requirements to be recognised as an internally generated intangible asset therefore all
development costs in the period were expensed
environmental 
software licences total
£’000 £’000 £’000
cost 
at 1 january 2007 6035 215 6250 
exchange adjustments 280 – 280
additions 349 – 349
at 31 december 2007 6104 215 6319
accumulated amortisation and impairment
at 1 january 2007 5596 215 5811
exchange adjustments 330 – 330
amortisation charge for the year 247 – 247
at 31 december 2007 5513 215 5728
net book value
at 31 december 2007 591 – 591
environmental 
software licences total
£’000 £’000 £’000
cost 
at 1 january 2006 6483 215 6698
exchange adjustments 192 – 192
additions 183 – 183
disposals 439 – 439
at 31 december 2006 6035 215 6250 
accumulated amortisation and impairment
at 1 january 2006 5883 – 5883
exchange adjustments 119 – 119
amortisation charge for the year 227 – 227
impairment of non current assets – 215 215
disposals 395 – 395
at 31 december 2006 5596 215 5811
net book value
at 31 december 2006 439 – 439 notes to the consolidated financial statements continued
31 december 2007
16 property plant and equipment
land and buildings
leaseholds
plant and
freeholds long short equipment total
£’000 £’000 £’000 £’000 £’000
cost 
at 1 january 2007 60185 4818 809 343428 409240
exchange adjustments 2944 16 166 16658 19784
additions 940 20 595 16783 18338 
assets written off on closure of business 10660 – – 61947 72607
disposals 104 256 36 1665 2061
at 31 december 2007 53305 4598 1534 313257 372694 
accumulated depreciation and impairment
at 1 january 2007 27198 1987 40 269848 299073 
exchange adjustments 1306 2 18 12144 13470
depreciation charge for the year 1265 125 80 14296 15766
assets written off on closure of business 7093 – – 55335 62428
disposals 11 14 34 1596 1655
at 31 december 2007 22665 2100 104 239357 264226
net book value
at 31 december 2007 30640 2498 1430 73900 108468
land and buildings
leaseholds
plant and
freeholds long short equipment total
£’000 £’000 £’000 £’000 £’000
cost 
at 1 january 2006 69733 4837 473 342532 417575
exchange adjustments 2354 19 – 7970 10343
additions 295 – – 17720 18015 
reclassifications 336 – 336 – – 
disposals 7153 – – 885416007
at 31 december 2006 60185 4818 809 343428 409240 
accumulated depreciation and impairment
at 1 january 2006 24859 1862 187 250603 277511
exchange adjustments 860 1 – 5311 6172
depreciation charge for the year 1570 126 5 16385 18086 
impairment of non current assets 3762 – – 15722 19484 
reclassifications 152 152 – – 
disposals 2285 – – 7551 9836
at 31 december 2006 27198 1987 40 269848 299073 
net book value
at 31 december 2006 32987 2831 769 73580 110167 
freehold land amounting to £9357 000 2006 £9357 000 has not been depreciated
yule catto  co plc 
annual report and accounts 2007 
54 yule catto  co plc 
annual report and accounts 2007 
55
17 investment in joint ventures
2007 2007 2006 2006
£’000 £’000 £’000 £’000
at 1 january
share of noncurrent assets 1012 1251
share of current assets 6516 5837
share of noncurrent liabilities – –
share of current liabilities 4228 3024
3300 4064
share of income 15046 14131
share of expenses 13806 12938
1240 1193
tax 111 122
dividends paid during the year 1202 1385
exchange adjustments 50 450
retained loss 123 764
at 31 december
share of noncurrent assets 975 1012
share of current assets 6439 6516
share of noncurrent liabilities – –
share of current liabilities 4237 4228
3177 3300
there are no significant contingent liabilities to which the group is exposed nor does the group have any significant contingent
liabilities in relation to its interest in the joint ventures
a list of principal subsidiaries and joint ventures is given on pages 80 to 81
18 inventories
2007 2006
£’000 £’000
group
raw materials and consumables 22457 21068 
work in progress 4513 5808 
finished goods 38031 39204 
65001 66080
there is no material difference between the balance sheet value of inventories and their replacement cost
19 trade and other receivables
2007 2006
£’000 £’000
trade receivables 102169 95176 
amounts owed by joint ventures 44 147
other receivables 9557 6008 
prepayments and accrued income 3308 3835
115078 105166 
the directors consider that the carrying amount of trade and other receivables approximates to their fair value
credit risk
amounts presented in the balance sheet are net of allowances for doubtful receivables estimated by the group’ s management
based on prior experience and their assessment of the current economic environment the group has no significant concentration
of credit risk with exposure spread over a large number of customers
before accepting a new customer the group uses appropriate procedures to assess the potential customer’ s credit quality in order
to set a credit limit notes to the consolidated financial statements continued
31 december 2007
19 trade and other receivables continued
ageing of trade receivables
2007 2006
£’000 £’000
not yet due 86262 82090 
0 – 60 days overdue 15353 12783 
61 – 120 days overdue 1287 1220 
over 120 days due 1042 1032 
103944 97125 
less provision for impairment 1775 1949
102169 95176 
provision for impairment of receivables
2007 2006
£’000 £’000
at 1 january 1949 2505 
exchange adjustments 80 38
credit for the year 12 15
amounts written off as uncollectible 233 484
amounts recovered previously written off 9 19
at 31 december 1775 1949 
the provision is predominantly against trade receivables more than 61 days overdue
20 cash and borrowings
cash pooling
the group runs notional pooling facilities in a number of countries principally the uk the structure facilitates interest and balance
compensation of cash and bank overdrafts this notional pooling does not meet the strict setoff rules under ifrs and as a result
the cash and bank overdraft balances must be reported ‘gross’ on the balance sheet
the table below shows the impact of netting the cash and overdraft balances in each of the pooled facilities it is the opinion of the
directors that this treatment reflects the commercial reality of the group’ s position with its banks
2007 2006
bank loans bank loans 
and and 
cash overdrafts cash overdrafts
£’000 £’000 £’000 £’000
as disclosed under ifrs 108352 104623 65917 57802
notional pooling adjustment 82646 82646 48635 48635 
underlying position 25706 21977 17282 9167
2007 2006
£’000 £’000
current borrowings
bank loans
bank loans and overdrafts 104623 57802
other loans
136000000 7 66 guaranteed senior unsecured notes due 8 september 2010 24013 – 
£15000000 699 guaranteed senior unsecured notes due 8 september 2010 5000 – 
133636 57802 
less capitalised costs 51 – 
133585 57802 
 these notes are repayable in three equal tranches on 8 september 2008 2009 and 2010
yule catto  co plc 
annual report and accounts 2007 
56 yule catto  co plc 
annual report and accounts 2007 
57
2007 2006
£’000 £’000
noncurrent borrowings
bank loans
unsecured £60 million revolving credit facility expiring 2009 – – 
other loans
136000000 7 66 guaranteed senior unsecured notes due 8 september 2010 48025 75596 
£15000000 699 guaranteed senior unsecured notes due 8 september 2010 10000 15000
43000000 555 guaranteed senior unsecured notes due 2 september 2012 21529 21949 
70000000 578 guaranteed senior unsecured notes due 2 september 2014 35048 35731
22000000 598 guaranteed senior unsecured notes due 2 september 2016 11015 11229 
125617 159505 
less capitalised costs 509 734
125108 158771 
 these notes are repayable in three equal tranches on 8 september 2008 2009 and 2010
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents or government
bond rates appropriate to the country in which the borrowing is incurred 
at 31 december 2007  the group had available £60 million 2006 £60 million of undrawn committed borrowing facilities in respect
of which all conditions precedent had been met
the directors calculate the carrying value of the group’ s borrowings as follows
analysis of borrowings at carrying value by currency
sterling us dollar euro other t otal
£’000 £’000 £’000 £’000 £’000
31 december 2007
bank loans and overdrafts 44780 2638 55517 1688 104623
loan notes 15000 139630 – – 154630
capitalised costs 560 – – – 560
59220 142268 55517 1688 258693
cash and cash equivalents 108352
net borrowings 150341 
add back special item 20490 
net borrowings underlying performance 170831 
31 december 2006
bank loans and overdrafts 14127 3472 35754 4449 57802
loan notes 15000 144505 – – 159505
capitalised costs 734 – – – 734
28393 147977 35754 4449 216573
cash and cash equivalents 65917
net borrowings 150656 
add back special item 15615 
net borrowings underlying performance 166271 
cash and cash equivalents comprise cash at bank and other short term highly liquid investments with a maturity of three months 
or less
the special item represents the revaluation of us dollar loan notes from the rate of the related cross currency swaps to the year 
end rate together with the transitional adjustment required to reflect movements in fair value caused by variations in interest rates
and subsequent amortisation thereof to the extent that these constituted effective hedges under uk gaap  notes to the consolidated financial statements continued
31 december 2007
21 financial instruments
the group’ s treasury function operates procedures designed to reduce or eliminate financial risk and ensure that funds are available
for current and future needs the policies are approved by the board and the use of financial instruments is strictly controlled
the group manages its capital to ensure that entities in the group will be able to continue as going concerns while maximising the
return to stakeholders through the optimisation of the debt and equity balance the capital structure of the group consists of debt
which includes the cash and borrowings disclosed in note 20 and equity attributable to equity holders of the parent comprising
issued capital reserves and retained earnings as disclosed in note 25
the group’ s principal financial instruments comprise borrowings some cash and liquid resources and various items such as trade
debtors and trade creditors that arise directly from its operations the group also uses interest rate swaps currency swaps and
forward foreign currency contracts to manage the interest rate and currency risks arising from the group’ s operations and its
sources of finance
it is and has been throughout the period under review the group’ s policy that no trading in financial instruments shall be undertaken
set out below is a comparison by category of book values and fair values of the group’ s financial assets and liabilities
carrying values fair values
at 31 december at 31 december
2007 2006 2007 2006
£’000 £’000 £’000 £’000
fair value of financial assets
trade and other receivables excluding prepayments 111770 101331 111770 101331 
cash and cash equivalents 108352 65917 108352 65917
derivatives at fair value 1813 – 1813 –
221935 167248 221935 167248
fair value of financial liabilities
loan notes 154070 158771 174741 178319
bank loans and overdrafts 104623 57802 104623 57802 
derivatives at fair value 26000 22336 26000 22336 
trade and other payables 148760 125264 148760 125264
433453 364173 454124 383721
fair values have been obtained from the relevant institutions where appropriate where market values are not available fair values 
of financial assets and financial liabilities have been calculated by discounting expected future cash flow at prevailing interest rates
and by applying year end exchange rates the carrying amount of short term borrowings approximate to book value
the main risks arising from the group’ s financial instruments are market risk and liquidity risk the board reviews and agrees
policies for managing each of these risks and they are summarised below together with related disclosure required by ifrs
market risk
the group’ s main exposure to market risk is in the form of interest rate risk and foreign currency risk the policies adopted to
address these risks are as follows
interest rate risk
the group finances its operations through a mixture of retained profits loan notes and bank borrowings the group borrows at
both fixed and floating rates of interest and uses interest rate swaps to generate the desired interest profile in order to manage the
group’ s exposure to interest rate fluctuations
foreign currency risk
the group uses currency borrowings forward contracts and currency swaps to hedge overseas net assets which are
predominantly denominated in euros profit translation exposures are not hedged
the group hedges currency transaction exposures at the point of confirmed order using forward foreign exchange contracts the
group’ s policy is where practicable to hedge all exposures on monetary assets and liabilities consequently there are no material
currency exposures to disclose 2006 none
yule catto  co plc 
annual report and accounts 2007 
58 yule catto  co plc 
annual report and accounts 2007 
59
impact on income statement
changes in the fair value of derivative contracts amounting to £4446883 have been credited to the income statement in the year
2006 credit of £3618002 these changes are shown separately as a special item in the consolidated income statement
hedge accounting
the group has a number of cross currency and interest rate swaps that are used to reduce the exposure to interest rate and
currency risk
these swaps are fully effective at eliminating the risks they address
the group has reviewed the requirements necessary to permit the application of hedge accounting under ias 39 it has concluded
that the costs involved in meeting these requirements cannot be justified and therefore ias 39 hedge accounting will not be applied
changes in the fair value of derivative financial instruments to which hedge accounting is not applied are recognised in the income
statement as they arise
interest rate risk profile
financial liabilities
after taking into account the various interest rate and currency swaps entered into by the group the currency and interest rate
exposure of the group as at 31 december 2007 was
floating rate fixed rate t otal floating rate fixed rate t otal 
borrowings borrowings borrowings borrowings borrowings borrowings
2007 2007 2007 2006 2006 2006
£’000 £’000 £’000 £’000 £’000 £’000
sterling 89340 130000 219340 53513 135000 188513
euro 55517 – 55517 35754 – 35754
us dollar 2638 – 2638 3472 – 3472
other 1688 – 1688 4449 – 4449
149183 130000 279183 97188 135000 232188 
cash and cash equivalents 108352 65917
net borrowings underlying performance 170831 166271 
the effective interest rate for the year was 68 2006 66
sensitivity analysis
the following table shows the illustrative effect on the income statement and items that are recognised directly in equity that would
result from reasonably possible movements in changes in uk and us interest rates and in euro  us dollar to sterling exchange
rate before the effect of tax
2007 2006
income statement equity income statement equity
underlying ifrs ifrs underlying ifrs ifrs
 £m  £m  £m  £m  £m  £m
interest rate sensitivity analysis
uk interest rate  10 08 54 – 06 54 –
euro interest rate  10 06 06 – 04 04 – 
us interest rate  10 – 64 – – 60 – 
foreign currency sensitivity analysis
euro exchange rate  10 – 09 41 – 25 41 
us dollar exchange rate  10 03 13 – 03 15 –
the interest rate sensitivity analysis has been determined based on the exposure to interest rates for both derivatives and non
derivative instruments at the balance sheet date for floating rate liabilities the analysis is prepared assuming the amount of liability
outstanding at the balance sheet date was outstanding for the whole year
the foreign currency sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their
translation at the period end for a 10 change in foreign currency rates the sensitivity analysis includes external loans as well as
loans to foreign operations within the group where the denomination of the loan is in a currency other than the functional currency
of the lender or borrower notes to the consolidated financial statements continued
31 december 2007
21 financial instruments continued
liquidity risk
the objective of the company is to meet financial commitments as and when they fall due the board closely monitors liquidity
through monthly management accounts
at the year end yule catto  co plc had the following principal facilities
a committed syndicated bank revolving credit facility of £60 million which expires in november 2009 this credit facility was 
negotiated in november 2004
unsecured loan notes totalling approximately £175 million raised from the us private placement market in 1999 and 2004 
with maturity between 2008 and 2016 these loan notes provide the group’ s long term requirements please see note 20 
for further details
the following table details the remaining contractual maturity for its nonderivative financial liabilities
2007 2006
amount due amount due
between between between between 
within 1 and 2 and after within 1 and 2 and after 
one year 2 years 5 years 5 years t otal one year 2 years 5 years 5 years t otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
noninterest bearing
trade and 
other payables 148300 460 – – 148760 124892 372 – – 125264 
variable interest 
rate instruments
bank loans and 
overdrafts 104623 – – – 104623 57802 – – – 57802 
fixed interest 
rate instruments
loan notes 33461 33429 33461 74209 174560 – 33358 66880 74148 174386
286384 33889 33461 74209 427943 182694 33730 66880 74148 357452
the following table details the remaining contractual maturity for its nonderivative financial assets
2007 2006
amount due amount due
between between between between 
within 1 and 2 and after within 1 and 2 and after 
one year 2 years 5 years 5 years t otal one year 2 years 5 years 5 years t otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
noninterest bearing
trade and other 
receivables excluding
prepayments 111770 – – – 111770 101331 – – – 101331 
variable interest 
rate instruments
cash and 
cash equivalents108352 – – – 108352 65917 – – – 65917
220122 – – – 220122 167248 – – – 167248 
yule catto  co plc 
annual report and accounts 2007 
60 yule catto  co plc 
annual report and accounts 2007 
61
the following table details the remaining contractual maturity for its derivative financial instruments
2007 2006
amount due amount due
between between between between 
within 1 and 2 and after within 1 and 2 and after 
one year 2 years 5 years 5 years t otal one year 2 years 5 years 5 years t otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
interest rate swaps 148 171 119 – 142 602 602 786 – 1990
cross currency swaps1904 1485 3305 1368 8062 434 434 1452 1106 3426
foreign exchange 
forward contracts 1152 – – – 1152 – – – – – 
2908 1656 3424 1368 9356 1036 1036 2238 1106 5416
in accordance with ifrs 7  the above table show undiscounted cashflows in contrast ias 39 requires these items to be carried in
the balance sheet at fair value which is based on discounted cashflows 
22 trade and other payables
2007 2006
£’000 £’000
amount due within one year
trade creditors 89964 83513
other creditors 26845 24109
accruals and deferred income 31491 17270
148300 124892
amount due in greater than one year
other creditors 460 372
148760 125264
accruals and deferred income includes £14171000 2006 £1807 000 in respect of restructuring costs
average trade creditor days in 2007 was 67 2006 68 this figure represents trade creditor days for all trading operations within the
group calculated as a weighted average based on cost of sales
the directors consider that the carrying amount of trade payables approximates to their fair value notes to the consolidated financial statements continued
31 december 2007
23 post retirement benefit obligations
charge to income statement in respect of the group’ s pension schemes
2007 2006 2005 2004 2003
uk overseas t otal uk overseas t otal uk overseas t otal uk overseas t otal uk overseas t otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
defined benefit 1598 763 2361 2200 937 3137 4000 226 4226 4700 217 4917 5100 952 6052
defined contribution 159 952 1111 299 712 1011 347 710 1057 338 636 974 265 743 1008
1757 1715 3472 2499 1649 4148 4347 936 5283 5038 853 5891 5365 1695 7060
defined benefit 
– special item 10797 – 10797 – – – – – – – – – – – – 
9040 1715 7325 2499 1649 4148 4347 936 5283 5038 853 5891 5365 1695 7060
the fair value of the assets in the schemes and the present value of the liabilities in the schemes at each balance sheet date were
2007 2006 2005 2004 2003
uk overseas t otal uk overseas t otal uk overseas t otal uk overseas t otal uk overseas t otal
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
present value of 
funded defined 
benefit obligations 228966 15530 244496 260425 16591 277016 225000 16233 241233 203800 14297 218097 191100 14000 205100
fair value of 
scheme assets 195325 7935 203260 191137 7995 199132 167400 4196 171596 138500 3795 142295 121100 3600 124700
post retirement 
benefit obligations 33641 7595 41236 69288 8596 77884 57600 12037 69637 65300 10502 75802 70000 10400 80400
uk pension schemes
the group participates in a funded scheme with both a defined benefit and defined contribution section the yule catto group
retirement benefit scheme the scheme’ s defined benefit section was closed to new members with effect from 31 december
1998 and with effect from 1 january 1999 a defined contribution section was introduced and is open to all eligible group employees
the assets of the scheme are held separately from those of the companies concerned 
contributions to the scheme are charged to the profit and loss account to spread the cost of pensions over employees’ working
lives within the group
defined benefit scheme
a full actuarial valuation was carried out as at 6 april 2006 and updated to 31 december 2007 by a qualified actuary the major
assumptions used by the actuary were
2007 2006 2005 2004 2003
rate of increase in salaries 310 330 350 360 350
rate of increase in pensions in payment 250 250 250 250 250
discount rate 590 520 490 540 550
rates of return on plan assets 733 695 7 21 7 26 7 26
inflation assumption 310 280 250 260 250
amount charged to operating profit
2007 2006
£’000 £’000
current service cost 2252 3200 
gain on settlements and curtailments – 300
past service credit 10797 – 
expected return on plan assets 13885 11500
interest cost relating to pension scheme liabilities 13231 10800 
9199 2200
the past service credit relates to reductions in the benefits provided by the scheme which were actioned during the year this item
is disclosed as a special item 
yule catto  co plc 
annual report and accounts 2007 
62 yule catto  co plc 
annual report and accounts 2007 
63
actuarial gainloss recognised in the statement of recognised income and expense
2007 2006
£’000 £’000
actual return less expected return on pension scheme assets 5891 13800 
experience gains and losses arising on the scheme liabilities 25872 30988
19981 17188
history of experience gains and losses
2007 2006 2005 2004 2003
difference between the expected and actual 
return on scheme assets
amount £’000 5891 13800 17200 8300 12300
percentage of scheme assets 302 7 22 1027 599 1010
experience gains and losses arising on 
the scheme liabilities
amount £’000 25872 30988 12100 5500 26300
percentage of the present value of scheme liabilities 1130 1190 538 270 1380
t otal actuarial gainslosses recognised in the 
statement of recognised income and expense
amount £’000 19981 17188 5100 2800 14000
percentage of the present value of scheme liabilities 873 661 227 137 7 30
the actual return on plan assets was £25400000 2006 £27 300000
movements in the present value of defined benefit obligations were as follows
2007 2006
£’000 £’000
at 1 january 260425 225000
current service cost 2252 3200
past service cost 10797 – 
interest cost 13231 10800
contributions from scheme members 746 900
experience gains and losses arising on the scheme liabilities 25872 30988
benefits paid 11019 10163
gains on settlements and curtailments – 300
at 31 december 228966 260425
movements in the fair value of the scheme assets were as follows
2007 2006
£’000 £’000
at 1 january 191137 167400 
expected return on scheme assets 13885 11500
actual return less expected return on pension scheme assets 5891 13800 
contributions from sponsoring companies 6467 7700 
contributions from scheme members 746 900 
benefits paid 11019 10163
at 31 december 195325 191137 
contributions from the sponsoring companies are expected to be £5835000 in 2008 notes to the consolidated financial statements continued
31 december 2007
23 post retirement benefit obligations continued
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at each
balance sheet date were
2007 2007 2006 2006 2005 2005 2004 2004 2003 2003
 £’000  £’000  £’000  £’000  £’000
equities 800 148447 790154821 750134900 775110000 775 97700 
bonds 517 44925 492 36316 463 31800 513 27600 525 22600
cash 425 1953 425 – 400 700 400 900 400 800
t otal fair value 
of assets 195325 191137 167400 138500 121100
present value of 
scheme liabilities 228966 260425 225000 203800 191100
post retirement 
benefit obligations 33641 69288 57600 65300 70000
overseas pension schemes
the group operates a number of smaller overseas pension and postretirement schemes the assets of these schemes are held
separately from those of the group with the exception of the german schemes where in line with common practice the assets are
held within the respective company
defined benefit schemes
the aggregated pension disclosure below for the overseas defined benefit schemes has been compiled from a number of actuarial
valuations at 31 december 2007  the major assumptions do not differ significantly from those disclosed above in relation to the uk
pension schemes 
amount charged to operating profit
2007 2006
£’000 £’000
current service cost 417 474 
expected return on plan assets 397 244
interest cost relating to pension scheme liabilities 743 707 
763 937 
actuarial gain recognised in the statement of recognised income and expense
2007 2006
£’000 £’000
actual return less expected return on pension scheme assets 1481 166
experience gains and losses arising on the scheme liabilities 2784 118 
changes in assumptions underlying the present value of the scheme liabilities 414 3685 
1717 3637 
the actual return on plan assets was £144000 2006 £228000
analysis of the movements in the net balance sheet liability before deferred tax
2007 2006
£’000 £’000
net liability at 1 january 8596 12037
t otal expense as detailed above 763 937
contributions made 733 480 
actuarial gain 1717 3637 
exchange movements 687 261 
net liability at 31 december 7596 8596
yule catto  co plc 
annual report and accounts 2007 
64 yule catto  co plc 
annual report and accounts 2007 
65
24 share capital
2007 2006
£’000 £’000
authorised
219111230 2006 219111230 ordinary shares of 10 pence each 21911 21911
issued and fully paid
145663187 2006 145663187 ordinary shares of 10 pence each 14566 14566 
ordinary shares carry no right to fixed income 
share options
as at 31 december 2007 the following options were outstanding
executive share options number option price
exercisable between 2007–2010 1884 a
exercisable between 2008–2012 5784 a
exercisable between 2008–2015 115172 a
exercisable between 2009–2013 6706 a
exercisable between 2009–2016 264895 a
exercisable between 2010–2017 321340 a
saye options number option price
exercisable between 2008–2009 293974 2610p
a options granted under the performance share plan longer t erm deferred bonus plan and the deferred bonus plan 2006 with a total exercise price of £54
25 changes in equity
capital hedging and
share share redemption own translation minority retained
capital premium reserve shares reserve interest earnings total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
at 1 january 2007 14566 33034 949 – 7371 4071 21031 24218
profit for the year ––––– 1679 13785 15464
actuarial gains and losses –––––– 21698 21698
t ax on items recognised 
directly in equity –––––– 519 519
exchange differences on 
translation of overseas
operations –––– 7429 512 – 7941
net investment hedging –––– 9145 – – 9145
t otal recognised expenditure
 income for the period –––– 1716 2191 34964 35439
dividends paid ––––– 537 13689 14226
shares purchased by 
esop trust – – – 25––– 25
share based payments – – – 25 – – 172 147
at 31 december 2007 14566 33034 949 – 9087 5725 416 45603 notes to the consolidated financial statements continued
31 december 2007
yule catto  co plc 
annual report and accounts 2007 
66
25 changes in equity continued
capital hedging and
share share redemption own translation minority retained
capital premium reserve shares reserve interest earnings total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
at 1 january 2006 14480 31829 949 – 481 4720 4009 55506
profit for the year ––––– 1344 3427 4771
actuarial gains and losses –––––– 13551 13551
t ax on items recognised 
directly in equity –––––– 1409 1409
exchange differences 
on translation of 
overseas operations –––– 7558 296 – 7854
net investment hedging –––– 668–– 668
t otal recognised expenditure
income for the period –––– 6890 1048 11533 17375
dividends paid ––––– 1697 13251 14948
shares purchased 
by esop trust – – – 246––– 246
share based payments – – – 246 – – 256 502
issue of shares 86 1205––––– 1291
at 31 december 2006 14566 33034 949 – 7371 4071 21031 24218
26 reconciliation of operating profit to cash generated from operations
2007 2006
£’000 £’000
operating profit 28574 21451
less share of profits of joint ventures 1129 1071
27445 20380
impairment of noncurrent assets – 19699
depreciation and amortisation 16013 18313
profit or loss arising from the sale or closure of operations 28237 1926
uk pension fund – past service credit 10797 –
profit on sale of fixed assets 196 794
share based payments 298 299
cash impact of termination of businesses 8985 6096
pension funding in excess of ias 19 charge 5550 3181
decreaseincrease in inventories 3925 3947
increase in trade and other receivables 6398 10496
increase in trade and other payables 6434 10547
unrealised exchange gains 979 274
cash generated from operations 49447 46376
27 disposal of subsidiary
the disposal in the 2006 accounts related to reabrook limited yule catto  co plc 
annual report and accounts 2007 
67
28 analysis of changes in net borrowings
exchange 
1 january reclassification cash inflows and other 31 december 
2007 of borrowings outflows movements 2007
£’000 £’000 £’000 £’000 £’000
cash and cash equivalents 65917 – 51896 9461 108352
current borrowing – bank overdrafts 57802 – 51424 4603 104623
8115 – 472 4858 3729 
current borrowings – loan notes – 28962 – 28962
noncurrent borrowings 158771 28962 174 4875 125108
net borrowings 150656 – 298 17 150341
add back special item 15615 20490
net borrowings underlying performance 166271 170831
the special item represents the revaluation of us dollar loan notes from the rate of the related cross currency swaps to the year 
end rate together with the transitional adjustment required to reflect movements in fair value caused by variations in interest rates
and subsequent amortisation thereof to the extent that these constituted effective hedges under uk gaap 
29 related party transactions
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and 
are not included in this note transactions between the company and its subsidiaries are disclosed in the company’ s financial
statements where appropriate
key management compensation
2007 2006
£’000 £’000
short term employee benefits 3242 2563 
post retirement benefit obligations 279 833 
share based payments 1185 1009 
4706 4405 
the key management figures given above include the directors and all participants of the performance share plan
30 commitments
2007 2006
£’000 £’000
capital expenditure authorised but not provided for in the accounts
contracted 6240 3680 
2007 2006
£’000 £’000
commitments under operating leases are as follows
payments under operating leases which fall due
within 1 year 2028 2589 
between 2 and 5 years 2979 5595 
after 5 years 11272 11268 
16279 19452 
31 contingent assets contingent liabilities and guarantees
guarantees of the parent company in respect of bank and other facilities of subsidiaries and joint ventures totalled 
£18178000 2006 £14049000 
other guarantees and contingent liabilities of the group amount to £1361000 2006 £1363000
the company and its subsidiaries have in the normal course of business entered into guarantees and counterindemnities 
in respect of performance bonds relating to the group’ s own contracts notes to the consolidated financial statements continued
31 december 2007
32 share based payments
save as you earn share option plan
this plan which is available to almost all uk employees provides for a grant price equal to the average quoted market price of the
group shares on the date of grant the vesting period is five to seven years followed by an exercise period of six months after
which the options expire furthermore options are forfeited if the employee leaves the group before the options vest
weighted weighted
av exercise av exercise
options price £ options price £
2007 2007 2006 2006
outstanding at 1 january 333980 2610 1347254 1889 
exercised during the period – 862917 1508 
lapsed during the period 40006 2610 150357 2478
outstanding at 31 december 293974 2610 333980 1889 
exercisable at 31 december 259431 – 
no grants have been made under the plan since 7 november 2002 and the group has elected not to apply ifrs 2 to awards made
before that date for options expected to be settled with shares purchased by the yule catto employee benefit trust in the open
market the charge to profit reflects the anticipated cash cost of these shares spread over the vesting period for options expected
to be settled by the issue of new shares no charge to profit is made
for options outstanding as at 31 december 2007  the exercise price is £261 and the weighted average remaining contractual life
was 07 years 2006 17 years
executive share option schemes
details of the share option schemes available to senior management are included in the remuneration report on pages 28 to 32
for grants made after 7 november 2002 the charge to profit is calculated on the assumption that given that the exercise price is
effectively nil the share price at grant provides a reasonable estimate of the option value at grant
for grants made before 7 november 2002 the charge to profit is based on the anticipated cash cost of acquiring shares to meet
the options exercised
weighted weighted
av exercise av exercise
options price £ options price £
2007 2007 2006 2006
outstanding at 1 january 973539 0057 1322258 0372
granted during the period 321340 – 426983 – 
exercised during the period 35328 1579 128493 0411
lapsed during the period 543770 – 647209 0028 
outstanding at 31 december 715781 – 973539 0057 
exercisable at 31 december 1884 12157 
for options outstanding as at 31 december 2007  the exercise price was £nil and the weighted average remaining contractual life
was 5 years 2006 47 years
yule catto employee benefit trust
the company established a trust the yule catto employee benefit trust on 17 july 1996 to distribute shares to employees
enabling the obligations under the yule catto longer t erm performance share plan and the yule catto longer t erm deferred
bonus plan to be met the trust is managed by the rbc trustees guernsey limited an independent company located in
guernsey at 31 december 2007  the trust held 24161 2006 24161 ordinary shares in the company with a market value 
of £45000 2006 £56000 the dividends on these shares have been waived all of the shares are under option costs are 
amortised over the life of the plans
yule catto  co plc 
annual report and accounts 2007 
68 yule catto  co plc 
annual report and accounts 2007 
69
33 share price information
the middle market value of the listed ordinary shares at 31 december 2007 was 18825 pence during the year the market price
ranged between 14900 pence and 25825 pence the market value of the listed ordinary shares at 31 march 1982 was 195 pence
the latest ordinary share price is available on the financial times cityline service telephone 09060 034567 
34 reconciliation of ebitda
underlying performance ifrs
2007 2006 2007 2006
£’000 £’000 £’000 £’000
operating profit 46014 42959 28574 21451
less profit or loss arising from the sale or closure of operations – – – 117
less operating profit or loss of businesses sold or closed during the year – – 28237 1926
less uk pension fund – past service credit – – 10797 –
add back impairment of noncurrent assets – – – 19699
add back amortisation 247 227 247 227
add back depreciation 15766 18086 15766 18086
ebitda 62027 61272 62027 61272
35 post balance sheet event
on 11 february 2008 the company announced that it had exchanged conditional contracts for the sale of the entire issued 
share capital of james robinson limited and certain other associated assets for an estimated consideration of 2115 million 
plus working capital of approximately 45 million
the completion of the sale is conditional on amongst other things the purchaser obtaining shareholder approval for the 
acquisition which is expected to be obtained by mid april 2008
should the conditions be met and completion be achieved the financial impact of this sale will be reflected in the company’ s 
2008 financial statements independent auditors’ report to the members 
of yule catto  co plc
we have audited the parent company financial statements 
of yule catto  co plc for the year ended 31 december 2007
which comprise the balance sheet and the related notes 1 
to 16 these parent company financial statements have been
prepared under the accounting policies set out therein
we have reported separately on the group financial statements
of yule catto  co plc for the year ended 31 december 2007
and on the information in the directors’ remuneration report 
that is described as having been audited
this report is made solely to the company’ s members as a
body in accordance with section 235 of the companies act
1985 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
t o 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
the directors’ responsibilities for preparing the annual report
and the parent company financial statements in accordance
with applicable law and united kingdom accounting standards
united kingdom generally accepted accounting practice 
are set out in the statement of directors’ responsibilities
our responsibility is to audit the parent company financial
statements in accordance with relevant legal and regulatory
requirements and international standards on auditing 
uk and ireland
we report to you our opinion as to whether the parent 
company financial statements give a true and fair view and
whether the parent company financial statements have been
properly prepared in accordance with the companies act 1985
we also report to you whether in our opinion the directors’
report is consistent with the parent company financial
statements the information given in the directors’ report
includes that specific information that is cross referred from 
the business review section of the directors’ report
in addition we report to you if in our opinion the company 
has not kept proper accounting records if we have not 
received all the information and explanations we require for 
our audit or if information specified by law regarding directors’
remuneration and other transactions is not disclosed
we read the other information contained in the annual report
as described in the contents section and consider whether 
it is consistent with the audited parent company financial
statements we consider the implications for our report if we
become aware of any apparent misstatements or material
inconsistencies with the parent company financial statements
our responsibilities do not extend to any further information
outside the annual report
yule catto  co plc 
annual report and accounts 2007 
70
basis of audit opinion
we conducted our audit in accordance with international
standards on auditing uk and ireland issued by the auditing
practices board an audit includes examination on a test 
basis of evidence relevant to the amounts and disclosures 
in the parent company financial statements it also includes 
an assessment of the significant estimates and judgments
made by the directors in the preparation of the parent company
financial statements and of whether the accounting policies 
are appropriate to the company’ s circumstances consistently
applied and adequately disclosed
we planned and performed our audit so as to obtain all the
information and explanations which we considered necessary 
in order to provide us with sufficient evidence to give reasonable
assurance that the parent company financial statements are
free from material misstatement whether caused by fraud 
or other irregularity or error in forming our opinion we also
evaluated the overall adequacy of the presentation of
information in the parent company financial statements
opinion
in our opinion
• the parent company financial statements give a true and fair
view in accordance with united kingdom generally accepted
accounting practice of the state of the company’ s affairs as
at 31 december 2007
• the parent company financial statements have been properly
prepared in accordance with the companies act 1985 and
• the information given in the directors’ report is consistent
with the parent company financial statements
deloitte  t ouche llp
chartered accountants and registered auditors
cambridge
united kingdom
12 march 2008 yule catto  co plc 
annual report and accounts 2007 
71
company balance sheet 
31 december 2007
2007 2006
note £’000 £’000
fixed assets
t angible fixed assets 6 2602 2578 
investments 7 194253 134262 
196855 136840 
current assets
debtors 8 245333 286318 
cash at bank and in hand 868 221 
246201 286539 
creditors – due within one year
borrowings 9 118750 39324
other creditors 10 11913 9702
derivatives at fair value 23035 22336
153698 71362
net current assets 92503 215177 
t otal assets less current liabilities 289358 352017 
creditors – due after more than one year
borrowings 9 125107 158771
net assets 164251 193246 
capital and reserves
called up share capital 11 14566 14566 
share premium 12 33034 33034 
revaluation reserve 12 828 830 
capital redemption reserve 12 949 949 
profit and loss account 12 114874 143867 
capital employed 164251 193246
analysis of net borrowings
cash at bank and in hand 868 221 
borrowings due in less than one year 118750 39324
borrowings due after more than one year 125107 158771
net borrowings 242989 197874
add back special item 20490 15615
net borrowings underlying performance 9 263479 213489
approved on 12 march 2008
a m whitfield
d c blackwood
directors notes to the company financial statements
31 december 2007
1 accounting policies
the principal accounting policies are summarised below 
they have all been applied consistently throughout the year 
and the preceding year
basis of accounting
the financial statements have been prepared under the historical
cost convention as modified by the revaluation of certain fixed
assets and comply with applicable uk accounting standards
foreign currencies
transactions in foreign currencies are recorded at the rate 
of exchange at the date of the transaction or if hedged 
at the forward contract rate monetary assets and liabilities
denominated in foreign currencies at the balance sheet date 
are reported at the rates of exchange prevailing at that date or 
if appropriate at the forward contract rate
t angible fixed assets
t angible fixed assets are stated at cost or valuation net of
depreciation and any provision for impairment except for
freehold land which is not depreciated the cost or valuation 
of tangible fixed assets is depreciated using a straight line 
basis over their expected useful lives as follows
freehold buildings – 50 years
leasehold land and buildings – the lesser of 50 years and 
the period of the lease
plant and equipment – between 3 and 10 years
revaluation of properties
the group has taken advantage of the transitional provisions of
frs 15 “t angible fixed assets” and retained the book amounts
of certain freehold properties which were revalued prior to
implementation of that standard
where depreciation charges are increased following a revaluation
an amount equal to the increase is transferred annually from the
revaluation reserve to the profit and loss account as a movement
on reserves on the disposal or recognition of a provision for
impairment of a revalued fixed asset any related balance
remaining in the revaluation reserve is also transferred to the 
profit and loss account as a movement on reserves
investments
fixed asset investments are shown at cost less provision for
impairment
debt
debt is initially stated at the amount of the net proceeds after
deduction of issue costs
dividends
dividends are accrued where declared and unpaid at the
balance sheet date
taxation
current tax including uk corporation tax and foreign tax is
provided at amounts expected to be paid or recovered using
the tax rates and laws that have been enacted or substantially
enacted by the balance sheet date
deferred taxation
deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay
more tax in the future or a right to pay less tax in the future have
occurred at the balance sheet date timing differences are
differences between the group’ s taxable profits and its results
yule catto  co plc 
annual report and accounts 2007 
72
as stated in the financial statements that arise from the inclusion 
of gains and losses in tax assessments in periods different from
those in which they are recognised in the financial statements
a net deferred tax asset is regarded as recoverable and
therefore recognised only when on the basis of all available
evidence it can be regarded as more likely than not that there
will be suitable taxable profits from which the future reversal of
the underlying timing differences can be deducted
deferred tax is measured at the average tax rates that are
expected to apply in the periods in which the timing differences are
expected to reverse based on tax rates and laws that have been
enacted or substantively enacted by the balance sheet date
deferred tax is measured on a nondiscounted basis
financial instruments
financial assets and financial liabilities are recognised on the
group’ s balance sheet when the group becomes a party to the
contractual provisions of the instrument
trade receivables
trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts
bank borrowings
interestbearing bank loans and overdrafts are recorded at the
proceeds received net of direct issue costs finance charges
including premiums payable on settlement or redemption and
direct issue costs are accounted for on an accrual basis to the
profit and loss account using the effective interest method and
are added to the carrying amount of the instrument to the extent
that they are not settled in the period in which they arise
trade payables
trade payables are not interestbearing and are stated at their
nominal value
equity instruments
equity instruments issued by the company are recorded at the
proceeds received net of direct issue costs
derivative financial instruments
the company uses derivative financial instruments to reduce
exposure to foreign exchange risk and interest rate movements
the company does not hold or issue derivative financial
instruments for speculative purposes
the use of financial derivatives is governed by the group’ s
policies approved by the board of directors which provide
written principles on the use of financial derivatives
net borrowings
net borrowings represents cash and cash equivalents together
with short and long term borrowings as adjusted for the effect
of related derivative instruments irrespective of whether they
qualify for hedge accounting
pension funding
the costs of contributions to the group’ s pension schemes and
of augmenting existing pensions are charged to the profit and
loss account on a systematic basis over the expected period of
benefits from employees’ service
the uk defined benefit scheme is funded with the assets of the
scheme held separately from those of the group in separate
trusteeadministered funds
payments to defined contribution retirement benefit schemes
are charged as an expense as they fall due yule catto  co plc 
annual report and accounts 2007 
73
2 auditors’ remuneration
the audit fee of yule catto  co plc amounted to £6500 2006 £6500
3 employees
2007 2006
number number
the average monthly number of employees during the year was 34 31
2007 2006
£’000 £’000
the aggregate remuneration of all company employees comprised
wages and salaries 2495 2522
social security costs 293 303
post retirement benefits 354 496
3142 3321
4 lossprofit attributable to equity shareholders
2007 2006
£’000 £’000
uk gaap basis
attributable to yule catto  co plc 15304 2466
as permitted by section 230 of the companies act 1985 no profit and loss account is presented for yule catto  co plc
 the above has been calculated on a uk gaap basis as this is consistent with the continued presentation of yule catto and co plc’ s accounts under uk gaap 
5 dividends
2007 2006
£’000 £’000
ordinary – prior year final of 55 pence per share 2005 53 pence 8011 7670
– interim of 39 pence per share 2006 38 pence 5678 5581
13689 13251
– proposed final of 57 pence per share 2006 55 pence 8303 8011
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as a
liability in these financial statements notes to the company financial statements continued
31 december 2007
6 tangible fixed assets
land and buildings
long plant and
freeholds leaseholds equipment total
£’000 £’000 £’000 £’000
cost or valuation
at 1 january 2007 2777 89 1432 4298
additions – – 129 129
disposals – – 102 102
at 31 december 2007 2777 89 1459 4325
at cost 12 – 1459 1471
at professional valuation in 1985 2765 89 – 2854
2777 89 1459 4325
depreciation
at 1 january 2007 430 41 1249 1720
charge for the year 20 2 83 105
eliminated on disposals – – 102 102
at 31 december 2007 450 43 1230 1723
net book value
at 31 december 2007 2327 46 229 2602
net book value
at 31 december 2006 2347 48 183 2578 
properties included at valuation would have been stated on a historical cost basis at cost of £1877000 2006 £1877000 and
depreciation of £386000 2006 £369000
freehold land amounting to £1781000 2006 £1781000 has not been depreciated
yule catto  co plc 
annual report and accounts 2007 
74 yule catto  co plc 
annual report and accounts 2007 
75
7 investments
joint other
subsidiaries ventures investments total
£’000 £’000 £’000 £’000
cost
at 1 january 2007 135062 500 46 135608 
additions 60000 – – 60000 
at 31 december 2007 195062 500 46 195608 
provisions
at 1 january 2007 1118 220 8 1346 
amortisation – – 9 9 
at 31 december 2007 1118 220 17 1355
net book value
at 31 december 2007 193944 280 29 194253
net book value
at 31 december 2006 133944 280 38 134262 
details of the principal group companies are given on pages 80 to 81
8 debtors
2007 2006
£’000 £’000
amounts owed by subsidiaries 238403 282817
other debtors 2430 584 
prepayments and accrued income 88 94 
corporate tax 4412 2823 
245333 286318 
9 borrowings
2007 2006
£’000 £’000
current borrowings
bank loans
bank loans and overdrafts 89788 39324 
other loans
136000000 7 66 guaranteed senior unsecured notes due 8 september 2010 24013 –
£15000000 699 guaranteed senior unsecured notes due 8 september 2010 5000 –
118801 39324
less capitalised costs 51 –
118750 39324
 these notes are repayable in three equal tranches on 8 september 2008 2009 and 2010 notes to the company financial statements continued
31 december 2007
9 borrowings continued
2007 2006
£’000 £’000
noncurrent borrowings
bank loans
unsecured £60 million revolving credit facility expiring 2009 – –
other loans
136000000 7 66 guaranteed senior unsecured notes due 8 september 2010 48025 75596
£15000000 699 guaranteed senior unsecured notes due 8 september 2010 10000 15000
43000000 555 guaranteed senior unsecured notes due 2 september 2012 21529 21949
70000000 578 guaranteed senior unsecured notes due 2 september 2014 35048 35731
22000000 598 guaranteed senior unsecured notes due 2 september 2016 11015 11229
125617 159505 
less capitalised costs 510 734
125107 158771 
 these notes are repayable in three equal tranches on 8 september 2008 2009 and 2010
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents 
at 31 december 2007  the company had available £60 million 2006 £60 million of undrawn committed borrowing facilities in
respect of which all conditions precedent had been met
the directors calculate the carrying value of the company’ s borrowings as follows
analysis of borrowings at carrying value by currency
sterling us dollar euro total
£’000 £’000 £’000 £’000
31 december 2007
bank loans and overdrafts 33082 2489 54217 89788
loan notes 15000 139630 – 154630 
capitalised costs 561 – – 561
47521 142119 54217 243857 
cash and cash equivalents 868
net borrowings 242989 
add back special item 20490 
net borrowings underlying performance 263479 
31 december 2006
bank loans and overdrafts 7533 2688 29103 39324
loan notes 15000 144505 – 159505
capitalised costs 734 – – 734
21799 147193 29103 198095
cash and cash equivalents 221
net borrowings 197874
add back special item 15615
net borrowings underlying performance 213489
cash and cash equivalents comprise cash at bank and other short term highly liquid investments with a maturity of three months 
or less
the special item represents the revaluation of us dollar loan notes from the rate of the related cross currency swaps to the year end rate together with the transitional
adjustment required to reflect movements in fair value caused by variations in interest rates and subsequent amortisation thereof to the extent that these constituted
effective hedges under pre frs 26 uk gaap 
yule catto  co plc 
annual report and accounts 2007 
76 yule catto  co plc 
annual report and accounts 2007 
77
10 other creditors
2007 2006
£’000 £’000
amount due within one year
trade creditors 1110 695 
other taxation and social security 131 128 
other creditors 1944 2125 
accruals and deferred income 8728 6754 
11913 9702 
11 share capital
2007 2006
£’000 £’000
authorised
219111230 2006 219111230 ordinary shares of 10 pence each 21911 21911 
issued and fully paid
145663187 2006 145663187 ordinary shares of 10 pence each 14566 14566 
share options
as at 31 december 2007 the following options were outstanding
executive share options number option price
exercisable between 20072010 1884 a
exercisable between 20082012 5784 a
exercisable between 20082015 115172 a
exercisable between 20092013 6706 a
exercisable between 20092016 264895 a
exercisable between 20102017 321340 a
saye options number option price
exercisable between 20082009 293974 2610p
a options granted under the performance share plan and the longer t erm deferred bonus plan and the deferred bonus plan 2006 with a total exercise price of £54
12 share premium and reserves
capital
share revaluation redemption profit and
premium reserve reserve loss account t otal
£’000 £’000 £’000 £’000 £’000
at 1 january 2007 33034 830 949 143867 178680 
profit for the year – – 15304 15304
dividends – – – 1368913689
retained loss for the year – – – 28993 28993
revaluation depreciation – 2 – – 2
at 31 december 2007 33034 828 949 114874 149685 notes to the company financial statements continued
31 december 2007
13 related party transactions
there were no related party transactions during the year 2006 none
14 guarantees and other financial commitments
the company has given guarantees amounting to £18178000 2006 £14049000 in respect of bank and other facilities
of subsidiaries and joint ventures
15 pension commitments 
the group participates in a funded scheme with both a defined benefit and defined contribution section the yule catto group
retirement benefit scheme the scheme’ s defined benefit section was closed to new members with effect from 31 december 1998 
and with effect from 1 january 1999 a defined contribution section was introduced and is open to all eligible group employees
the assets of the scheme are held separately from those of the companies concerned 
the pension charge for the year for the company amounted to £2623000 2006 £2087000
in accordance with frs 1 7  the company will account for its contributions to the defined benefit scheme as if it were a defined
contribution scheme because it is not possible to identify the company’ s share of the assets and liabilities in the scheme on a
consistent and reasonable basis the latest actuarial valuation of the scheme prepared for the purposes of making transitional
disclosure in accordance with frs 17 show a net pension liability of £69288000 at 31 december 2006
frs 17 disclosure
due to the application of ias 19 to the group financial statements resulting in changes to the required disclosures at group level 
the disclosure requirements of frs 17 for the group have been included below
a full actuarial valuation was carried out as at 6 april 2006 and updated to 31 december 2007 by a qualified actuary the major
assumptions used by the actuary were
2007 2006 2005 2004 2003
rate of increase in salaries 310 330 350 360 350
rate of increase in pensions in payment 250 250 250 250 250
discount rate 590 520 490 540 550
inflation assumption 310 280 250 260 250
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return 
at each balance sheet date were
2007 2007 2006 2006 2005 2005 2004 2004 2003 2003
 £’000  £’000  £’000  £’000  £’000
equities 800 148447 790 154821 750 135200 775 110300 775 98000 
bonds 517 44925 492 36316 463 31800 513 27600 525 22600 
cash 425 1953 – – 400 700 400 900 400 800 
t otal fair value of assets 195325 191137 167700 138800 121400 
present value of 
scheme liabilities 228966 260425 225000 203800 191100
deficit in the scheme 33641 69288 57300 65000 69700
related deferred tax asset – – – – 3600 
net pension liability 33641 69288 57300 65000 66100
contributions from the sponsoring companies are expected to be £5835000 in 2008 2007 £6467000
yule catto  co plc 
annual report and accounts 2007 
78 yule catto  co plc 
annual report and accounts 2007 
79
analysis of the amount that would have been charged to operating profit under frs 17
2007 2006
£’000 £’000
current service cost 2252 3200 
past service credit 10797 – 
gain on settlements and curtailments – 300
8545 2900 
analysis of the amount that would have been charged to net finance income under frs 17
2007 2006
£’000 £’000
expected return on pension scheme assets 13885 11500
interest on pension scheme liabilities 13231 10800 
654 700
analysis of the actuarial gainloss that would have been recognised in the statement of total recognised gains and losses
2007 2006
£’000 £’000
actual return less expected return on pension scheme assets 7228 13800 
experience gains and losses arising on the scheme liabilities 25872 30988
18644 17188
history of experience gains and losses
2007 2006 2005 2004 2003
difference between the expected and 
actual return on scheme assets
amount £’000 7228 13800 17200 8300 12300 
percentage of scheme assets 370 7 22 1027 599 1010
experience losses on scheme liabilities
amount £’000 25872 30988 12100 5500 27800
percentage of the present value of scheme liabilities 1130 1190 538 270 1450
t otal actuarial gainslosses recognised in the 
statement of total recognised gains and losses
amount £’000 18644 17188 5100 2800 14000
percentage of the present value of scheme liabilities 814 661 227 137 7 30
16 share based payments
for details of share based payments please refer to note 32 to the consolidated financial statements on page 68 principal subsidiaries and joint ventures
effective
country of group interest
incorporation and in equity
operating companies operation 
arkem pty ltd south africa 50
distributor of speciality chemicals and allied products
dhahran harco chemical industries ltd saudi arabia 49
synthetic resin emulsions
holliday chemical espana sa spain 100
sales agent and distributor
holliday france sa france 100
sales agent and distributor
holliday pigments ltd england 100
ultramarine pigments
holliday pigments sa france 100
ultramarine pigments
james robinson gmbh germany 100
fine chemicals
james robinson india pvt ltd india 66
fine chemicals intermediates
james robinson ltd england 100
fine chemicals
oxford chemicals ltd england 100
flavour chemicals
pfw aroma chemicals bv netherlands 100
fragrance chemicals
revertex chemicals pty ltd south africa 100
synthetic resin emulsions and allied products
 shares held by yule catto  co plc
 joint ventures
yule catto  co plc 
annual report and accounts 2007 
80 yule catto  co plc 
annual report and accounts 2007 
81
effective
country of group interest
incorporation and in equity
operating companies continued operation 
revertex finewaters sdn bhd malaysia 63
adhesives
revertex malaysia sdn bhd malaysia 70
synthetic resin and emulsions natural rubber latices plasticers and allied products
synthomer bv netherlands 100
compounds of synthetic rubber latices
synthomer gmbh germany 100
synthetic rubber latices and related compounds
synthomer hasselt bv netherlands 100
compounds of synthetic rubber latices
synthomer ltd england 100
synthetic rubber latices and emulsions
synthomer sa belgium 100
compounds dispersions and adhesives
synthomer sdn bhd malaysia 100
synthetic rubber latices and related compounds
union quimico farmaceutica sa uquifa spain 100
pharmaceutical actives and intermediates
uquifa italia spa italy 100
pharmaceutical actives and intermediates
uquifa mexico sacv  mexico 100
pharmaceutical actives and intermediates
william blythe ltd england 100
inorganic chemicals 
holding companies
holliday chemical holdings england 100
holliday international sa france 100
yule catto bv netherlands 100
yule catto financing ltd ireland 100
yule catto holdings gmbh germany 100
yule catto international ltd england 100
yule catto spain sl spain 100
yule catto nederland bv netherlands 100
 shares held by yule catto  co plc
 joint ventures five year financial summary
yule catto  co plc 
annual report and accounts 2007 
82
ifrs underlying performance
a
uk gaap
2007 2006 2005 2004 2004 2003
£’000 £’000 £’000 £’000 £’000 £’000
t otal sales 580641 557357 516458 503121 549444 550114 
ebitda
b
62027 61272 65477 65614 66871 96474 
operating profit
c
46014 42959 46186 45088 43961 73432
finance costs 11497 11443 11741 12930 12950 13518
profit before taxation 34517 31516 34445 32158 31011 59914 
earnings per share
d
173p 147p 167p 139p 139p 276p 
dividends per share 96p 93p 90p 134p 134p 130p 
dividend cover 18 16 19 10 10 21 
net borrowings
c
170831 166271 165591 187641 187641 177276
free cash flow before dividends
e
14012 8479 19786 13344 13344 62979 
capital expenditure 16994 18468 14331 16920 16920 21734 
a as presented in note 3 to the financial statements on page 45
b as defined in the accounting policies at note 2 and derived in note 34
c as defined in note 2 to the financial statements on pages 41 to 44
d under uk gaap this figure is adjusted to exclude amortisation
e as shown with the consolidated cash flow statement on page 39 yule catto  co plc 
annual report and accounts 2007 
83
notice of meeting
notice is hereby given that the annual general meeting 
of the company will be held at saddlers’ hall 40 gutter lane
london ec2v 6br on thursday 15 may 2008 at 12 noon 
for the following purposes
ordinary business
1 t o receive and adopt the report of the directors and audited
financial statements for the year ended 31 december 2007 
2 t o consider the recommendation of the directors as to 
a final dividend for the year ended 31 december 2007 
and if thought fit to declare a final dividend accordingly
3 t o approve the report of the board on directors’
remuneration for the year ended 31 december 2007 
4 t o reelect as a director mr d c blackwood
5 t o reelect as a director the hon a g catto
6 t o reelect as a director dr a a dobbie
7 t o reelect as a director dato’ lee hau hian
8 t o reelect as a director dato’ seri lee oi hian
9 t o reelect as a director mr j k maiden
10 t o reelect as a director mr a e richmondwatson
1 1 t o reappoint deloitte  t ouche llp as auditors of the
company to hold office until the conclusion of the next
annual general meeting at which accounts are laid 
before the company
12 t o authorise the directors to determine the remuneration 
of the auditors
special business
t o consider and if thought fit to pass the following resolutions
resolution 13 being proposed as an ordinary resolution and
resolutions 14 15 and 16 being proposed as special
resolutions
13 that
i the authority conferred on the directors by paragraph
92 of article 9 of the company’ s articles of association
be renewed for the period ending on the date of the
annual general meeting in 2009 or on 15 august 2009
whichever is the earlier and for such period the section
80 amount shall be £4855439 and
ii such authority shall be in substitution for all previous
authorities pursuant to section 80 of the companies act
1985 which are hereby revoked without prejudice to any
allotment of securities prior to the date of this resolution
or thereafter pursuant to any offer or agreement made
prior thereto
14 that
i subject to the passing of resolution 13 set out in the
notice of annual general meeting dated 12 march
2008 the power conferred on the directors by
paragraph 93 of article 9 of the company’ s articles 
of association be renewed for the period referred to in
such resolution and for such period the section 89
amount shall be £728315 and
ii such authority shall be in substitution for all previous
powers pursuant to section 89 of the companies act
1985 which are hereby revoked without prejudice to 
any allotment or sale of securities prior to the date 
of this resolution or thereafter pursuant to any offer 
or agreement made prior thereto
15 that the company be unconditionally and generally
authorised for the purpose of section 166 of the companies
act 1985 “the act” to make market purchases as defined
in section 163 of the act of ordinary shares of 10p each in
the capital of the company provided that
a the maximum number of shares which may be
purchased is 14566318
b the minimum price which may be paid for each share 
is 10p exclusive of expenses
c the maximum price which may be paid for a share is 
an amount equal to 105 of the average of the closing
middle market quotations of the company’ s ordinary
shares as derived from the london stock exchange
daily official list for the five business days immediately
preceding the day on which such share is contracted 
to be purchased exclusive of expenses and
d this authority shall expire at the conclusion of the next
annual general meeting of the company or if earlier 
15 months after the passing of this resolution except in
relation to the purchase of shares the contract for which
was concluded before the expiry of such authority and
which might be executed wholly or partly after such
expiry unless such authority is renewed prior to 
such time
16 that the amendments to the articles of association of 
the company contained in the document produced to the
meeting and initialled by the chairman for the purposes of
identification be and they are approved and the document
be adopted as the articles of association of the company 
in substitution for and to the complete exclusion of all the
existing articles of association of the company
by order of the board
r atkinson
secretary
12 march 2008
t emple fields
harlow
essex
cm20 2bh notice of meeting continued
notes
i a member of the company entitled to attend and vote at 
the above meeting may appoint one or more proxies to
attend speak and vote in his stead a proxy need not also
be a member of the company the right to appoint a proxy
does not apply to persons whose shares are held on their
behalf by another person and who have been nominated to
receive communications from the company in accordance
with section 146 of the companies act 2006 to enjoy
information rights ‘nominated persons’ nominated
persons may have a right under an agreement with the
registered shareholder who holds the shares on their behalf
to be appointed or to have someone else appointed as a
proxy alternatively if nominated persons do not have such 
a right or do not wish to exercise it they may have a right
under such an agreement to give instructions to the person
holding the shares as to the exercise of voting rights
ii a form of proxy is enclosed which to be valid must be
completed and deposited with computershare investor
services plc the pavilions bridgwater road bristol 
bs99 6zy not less than 48 hours before the time appointed
for holding the meeting or any adjourned meeting the
completion and return of a form of proxy will not prevent 
a member who wishes to do so from attending and voting 
in person
iii the company pursuant to regulation 41 of the
uncertificated securities regulations 2001  specifies 
that only those holders of ordinary shares registered in 
the register of members of the company at 11pm on
tuesday 13 may 2008 shall be entitled to attend and vote 
at the aforesaid annual general meeting in respect of 
such number of shares registered in their name at that 
time changes to entries on the register of members after
11pm on tuesday 13 may 2008 shall be disregarded in
determining the rights of any person to attend or vote 
at the meeting
yule catto  co plc 
annual report and accounts 2007 
84
iv in order to facilitate voting by corporate representatives 
at the meeting arrangements will be put in place at the
meeting so that i if a corporate shareholder has appointed
the chairman of the meeting as its corporate representative
with instructions to vote on a poll in accordance with the
directions of all of the other corporate representatives 
for that shareholder at the meeting then on a poll those
corporate representatives will give voting directions to the
chairman and the chairman will vote or withhold a vote 
as corporate representative in accordance with those
directions and ii if more than one corporate representative
for the same corporate shareholder attends the meeting but
the corporate shareholder has not appointed the chairman
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poll and the other corporate representatives will give voting
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for further details of this procedure the guidance includes 
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v the company’ s capital consists of 145663187 ordinary
shares with voting rights designed and produced by 
the college 44 020 7457 2030 yule catto  co plc
temple fields 
harlow
essex cm20 2bh
t 44 01279 442 791
f 44 01279 641 360
wwwyulecattocom


Summary:
 yule catto  co plc 
annual report and accounts 2007 
09
overview
2007 has been a year in which the group
has moved forward on a number of fronts
to develop the business the result of this
process is clearly demonstrated by the
10 increase in underlying group profit
before taxation it has also been another
year in which the recent history of rising
raw material prices has persisted and 
we have had to work hard to mitigate the
impact of this against this background
we have made good progress across 
the portfolio and although the global
economy looks challenging we are
cautiously optimistic about the group’ s
performance in 2008
polymers 73 of total sales grew 
sales volumes by 43 and underlying
operating profit by 62 this was
achieved in an environment of volatile 
and generally increasing monomer
pricing and ongoing supply constraints
we sustained our operating margins 
year on year at 97
the previously announced expansion 
of nitrile capacity in kluang malaysia 
was brought on line in november and
immediately sold out the group has
committed itself to significant further
expansion during 2008 this site is well
located to provide reliable supply to major
glove manufacturers market growth for
synthetic gloves remains strong and this
investment confirms our intent to remain
as a leading supplier
we also completed the expansion of our
mouscron belgium dispersion facility
where capacity increased by 30
pharmaceuticals 11 of total sales 
saw sales little changed at £638 million
however second half year sales were
substantially lower than the first half due
to order phasing which in part resulted 
in reduced underlying profitability of 
£7 4 million the generic drug market
continues to grow strongly but as
always is characterised by price erosion
following patent expiry our strategy to
address this is to maximise operating
efficiencies whilst expanding our product
portfolio during the year we announced
the closure of our italian site and the
transfer of production to mexico and
spain to improve the cost base and
productivity of the business looking
forward our programme of increasing
our generic drugs pipeline made good
progress with a further six drug master
files registered
impact chemicals 16 of total sales
has suffered over several years from
aggressive competition and suboptimal
assets during 2007 we announced the
closure of two facilities within this business
the hull plant of holliday pigments and
the german plant of james robinson
both plant closures are running to
schedule in early 2008 we announced 
a restructuring of the william blythe plant
in church we have already seen some 
of the benefit of these actions with an
increase in underlying profits in 2007 to
£30 million from £10 million in 2006
good cash management remains 
a key priority for the group borrowings
increased modestly but this was
attributable to the impact of the
strengthening euro on our euro
denominated debt during the year 
we have focused hard on the effective
management of working capital with
average working capital reducing by 
£66 million compared with prior year
whilst capital expenditure was at similar
levels to 2006 we invested around 
£90 million in restructuring the majority
of which we will recover when we sell 
the sites and assets we are exiting 
polymer chemicals
we operate 13 factories within four
geographical regions europe pacific
rim middle east and south africa core
products are waterbased polymers
both dispersions and latices polyvinyl
alcoholacetate and a number of more
specialised products
2007 was another good year for our
polymer businesses sales volumes 
were at record levels up 43 with 
sales turnover up 67 operating profits
were up 62 compared to 2006 and
operating margins were sustained at
97 these good results were achieved
against a background of restricted
monomer availability volatile prices 
and restructuring within some of our 
core markets
although the global economy 
looks challenging we are cautiously
optimistic about the group’s
performance in 2008
business review
chief executive’s report yule catto  co plc 
annual report and accounts 2007 
10
business review
chief executive’s report continued
whilst the product portfolio and the
geographic coverage of our operations
remained unchanged the main growth 
of our activities occurred in asia in
kluang malaysia in order to meet the
growing sales demand we were able to
bring forward our latex expansion plans 
in two phases with a 33 increase in
capacity in april and a further expansion
in november effectively increasing 
the installed capacity by circa 60
compared to 2006 concurrently the
mouscron belgium dispersion plant 
was subject to a major debottlenecking
project which was completed in late 
2007 increasing the dispersion capacity
of the site by 30 in addition minor 
debottlenecking took place on the latex
plant in langelsheim germany in the
usa we initiated dispersion manufacture
under a toll manufacturing arrangement
with a local polymeriser
these enhancements in capacity 
are already being effectively used and
further production capacity expansion 
is planned for 2008 nevertheless
maintaining the excellent growth seen
over the past few years was a difficult
challenge in 2007  polymer producers
generally had to endure repeated
interruptions in raw material supplies 
and increases in all major monomer
costs the industry was characterised 
by feedstock shortages which in turn
affected the supply lines of all our top 
ten raw materials many of our suppliers
called force majeure as they either were
unable to get the necessary feedstock
volumes or they experienced significant
plant outages this situation was not
helped by the cost of oil the backbone 
of the feedstock supply which increased
69 during the year 
as a result we worked hard to reflect
these costs in the market place
however we hope that the additional
global capacity for a number of
monomers planned for commissioning 
in the fourth quarter of 2008 and
throughout 2009 will alleviate the tight
raw material supply and allow input
prices to ease in due course
for polymer division this restricted
monomer supply and volatile raw 
material pricing together with continued
restructuring of some of our core markets
encouraged us to advance our product
development programmes to stimulate
demand in 2007 we widened our nitrile
latex dispersions and polybutadiene
product portfolios whilst at the same
time developing complementary products
to sell alongside our core latex dispersion
and polyvinyl alcohol activities
synthetic latex
throughout 2007 the european latex
market was subject to further customer
rationalisation particularly in the large
commodity markets such as paper 
our business whilst experiencing some
disturbance from this restructuring
remains speciality orientated we were
able to increase sales despite a number
of our main markets not growing as
customers sought to manufacture in
other parts of the world the market for
our synthetic nitrile latex grew significantly
as a result of the greater use of synthetic
rubber gloves in the health and semi
medical markets and we were able 
to benefit from this through the newly
commissioned capacity at our kluang
factory in malaysia 
expanding our operations in asia remains
a key part of polymer division’ s strategy
and in 2008 we expect the momentum 
to continue with increases in both latex
and dispersion capacity planned
dispersions
the dispersion market unfortunately
experienced the worst of the raw material
volatility however with the advantage 
of dispersion production in all our 
regional activities combined with good
technical support and continued product
development we were able to maintain
supply and service to all our customers
as a result we gained market share and
are able to report record dispersion
volumes whilst retaining our market
leadership in the uk south africa 
the middle east and malaysia
specialities
the group manufactures a variety of
speciality polymer chemicals including
polyvinyl alcohol
t o maintain our status as the world’ s
leading supplier of low hydrolysis
polyvinyl alcohol to the pvc industry 
we have changed the profile of our
technical package to meet the ongoing
demand of the pvc resins industry in so
doing we have added new products to
the range specifically designed for the
technological and geographic changes
which have occurred in the manner and
location in which pvc is produced as a
result the polymer division is now not
only able to supply its well established
primary and secondary pvc stabilisers
but has added newly developed grades
alongside supplementary polymers 
used in the polymerisation of pvc
increase in divisional operating profit
 underlying performance
62
sales
2006
2007
£3991m 
£4252m 
divisional operating profit
2006
2007
£388m 
£412m