Koninklijke TenCate Annual Report 2010 English

Royal Ten Cate
Royal Ten Cate MATERIALS THAT MAKE A DIFFERENCE

Colophon Royal Ten Cate
Annual Report 2010

Text Concept and realisation Photography Courtesy © AFPT Courtesy © Luzerner Polizei investor relations & corporate development Our materials are at the cutting edge of Our systems and materials generate Our customers make a difference with our
Royal Ten Cate C&F Report Amsterdam B.V., Peter Cox Courtesy © Airbus S.A.S. Unfalldienst F.R. Spaan, director textile technology, chemical technology added-value solutions. materials and systems. This generates
royal@tencate.com and material technology. growth and continuity.
Translation
Amsterdam Paul Haverkort
Frans Dekker
Courtesy © Boeing
Courtesy © Eurocopter EADS
Courtesy © NASA
Courtesy © SIRPA Air
Annual Report 2010
VVH business translations, Anthony Jeuland Courtesy © EVD International NL Courtesy © Superbus Stationsstraat 11
Maartensdijk, Netherlands Martin Lucas Courtesy © Gulfstream Courtesy © US Department 7607 GX Almelo, Netherlands
Joost van Baars Courtesy © Multicam of Defense
P.O. Box 58
7600 GD Almelo, Netherlands
Our clear vision, mission and strategy give direction to

Telephone +31 (0) 546 544 911
the company. The strategy is focused on value-chain
Fax +31 (0) 546 814 145
management.
www.tencate.com
The TenCate business model underpins the day-to-day
structuring, implementation and operationalisation of
the business. Our challenge lies in striking the ultimate
balance between the four cornerstones.
Superbus, the innovative mobility concept devised by former

astronaut Prof. Dr. Wubbo Ockels, was officially launched in
September 2010 at the Internationale Automobil-Ausstellung
in Hanover, Germany. Every aspect of the Superbus concept
is focused on sustainability. TenCate is involved in the
project as a material supplier. TenCate Cetex® materials
are used in the body and the eight doors of the vehicle.
Safety, flexibility and sustainability are the key characteris-
tics of Superbus. Safety, light weight and high strength were
the design requirements and hence the reasons for choos-
ing thermoplastic composites from TenCate. Sustainability
both underpins and reflects the pursuit of continuity of
TenCate. The company’s products and systems make a major
contribution to a world in which themes such as safety,
Connected to end-user marketing protection and sustainability have become a matter of
course.
Operating companies, associated companies and other interests Commercial overview and profile
Royal Ten Cate
Annual Report 2010

Translation
Frans Dekker
Courtesy © Boeing
Courtesy © NASA
Annual Report 2010
P.O. Box 58

Telephone +31 (0) 546 544 911
Fax +31 (0) 546 814 145
management.
www.tencate.com

course.
COMMERCIAL OVERVIEW PROFILE SUBSIDIARIES, ASSOCIATED
as at 1 January 2011 COMPANIES AND OTHER INTERESTS
as at 31 December 2010
The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries which co-operate intensively in research & development, ADVANCED TEXTILES & COMPOSITES GEOSYNTHETICS & GRASS OTHER ACTIVITIES NON-CONSOLIDATED COMPANIES
Royal Ten Cate (TenCate) is a multinational government-related entities, system
production, marketing and sales.
company which combines textile technology integrators, OEMs (original equipment
An overview of the legal entities which make up the company can be found on the inside back cover. Ten Cate Advanced Textiles bv Nijverdal, Netherlands Ten Cate Geosynthetics North America inc Atlanta (Georgia), USA Xennia Technology ltd (79%) Letchworth, UK GreenFields bv (32%) Genemuiden, Netherlands
with chemical processes in the development manufacturers) and their direct suppliers. Group activities of the TenCate Advanced Textiles group in the Netherlands Specialist inkjet technology for industrial applications Marketing organisation for synthetic turf systems
Ten Cate Geosynthetics Austria GmbH Linz, Austria
and production of functional materials. TenCate presents itself as a developer and
ADVANCED TEXTILES & COMPOSITES SECTOR Ten Cate Protect bv Nijverdal, Netherlands Ten Cate Geosynthetics France sas Bezons, France Ten Cate Systems bv Nijverdal, Netherlands Landscape Solutions bv (25%) Goirle, Netherlands
Various applications (product-market producer of materials, modules and systems Development activities Marketing and production organisation for synthetic turf for landscaping use
Ten Cate Protective Fabrics USA inc Union City (Georgia), USA Ten Cate Geosynthetics Netherlands bv Almelo, Netherlands
technology combinations) have been with distinctive characteristics. The Fabrics for professional wear and safety clothing as well as outdoor
PROTECTIVE FABRICS OUTDOOR FABRICS SPACE & AEROSPACE COMPOSITES INDUSTRIAL COMPOSITES ADVANCED ARMOUR Ten Cate Geosynthetics Asia sdn bhd Kuala Lumpur, Malaysia Ten Cate Enbi International bv Beek, Netherlands
created around this technological basis. company operates a value-chain model applications TenCate Enbi group holding company
Protective and safety fabrics and Protective fabrics for outdoor Advanced composites, compounds and Advanced composites, compounds Materials and integrated systems for advanced Ten Cate Industrial Zhuhai co ltd Zhuhai, China
aimed at occupying distinctive positions Geosynthetics and industrial fabrics
multi-risk solutions for industry, applications. systems for the aerospace industry. and systems for industrial composite and ceramic materials and integrated Ten Cate – Union Protective Fabrics Asia ltd (50.65%) Ten Cate Enbi GmbH Opladen, Germany
TenCate materials are mainly used for: through technological innovation, cost Fabrics for protective clothing
services, firefighting and defence. applications, including automotive, systems for the protection of police, army, Bangkok, Thailand Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur, Malaysia Ten Cate Enbi kft Rétság, Hungary
◾ personal safety and protection of the leadership, product differentiation and
industrial components and energy air force, navy and civilian service personnel, Ten Cate Geosynthetics (Thailand) ltd Bangkok, Thailand Ten Cate Enbi inc Shelbyville (Indiana), USA
living and working environment; end-user marketing.
extraction. vehicles and vessels. Ten Cate Advanced Composites bv Nijverdal, Netherlands Ten Cate Geosynthetics pte ltd Singapore Ten Cate Enbi inc Rochester (New York), USA
◾ modernisation of equipment used by TenCate produces solutions for end-users Advanced composites for the aircraft industry Ten Cate Geosynthetics Italia srl Lazzata, Italy Ten Cate Enbi pte ltd Singapore
armed forces, fire brigades and police; by operating in network structures, such as and antiballistic applications
◾ TenCate Protective Fabrics ◾ TenCate Outdoor Fabrics ◾ TenCate Advanced Composites ◾ TenCate Advanced Composites ◾ TenCate Advanced Armour Americas Ten Cate Geosynthetics (UK) ltd Telford, UK Ten Cate Enbi Zhuhai co ltd Zhuhai, China
◾ aerospace (lower fuel costs due to open innovation centres and partnerships, Technical rollers and components for printers, copiers, fax machines, postal
Americas Europe Americas Americas ◾ TenCate Advanced Armour EMEA Ten Cate Advanced Armour sas Vienne, France Ten Cate Geosynthetics sl Madrid, Spain
lighter materials); and by making acquisitions in sorting machines, ATMs, insulation and heating systems
◾ TenCate Protective Fabrics EMEA ◾ TenCate Advanced Composites ◾ TenCate Advanced Composites Ten Cate Advanced Armour Danmark a/s Vissenbjerg, Denmark Ten Cate Geosynthetics Schweiz AG Zurich, Switzerland
◾ water management, infrastructure and complementary fields. The solution-focused Advanced ceramics and composites for antiballistic applications
◾ TenCate Protective Fabrics Asia EMEA EMEA Ten Cate Deutschland GmbH Dietzenbach, Germany Ten Cate Assurantiën bv Almelo, Netherlands
care for the environment; system approach plays a key role. Insurance
Ten Cate Advanced Composites USA inc Morgan Hill (California), USA Ten Cate Geosynthetics Polska Spzoo Kraków, Poland
◾ industrial applications. The policy, focused on control of the value
GEOSYNTHETICS & GRASS SECTOR Phoenixx TPC inc Taunton (Massachusetts), USA Ten Cate Geosynthetics CZ sro Prague, Czech Republic Ten Cate Nederland bv Almelo, Netherlands
chain, has already resulted in leading
YLA inc Benicia (California), USA Ten Cate Geosynthetics Rumania Bucharest, Romania Ten Cate USA inc Atlanta (Georgia), USA
TenCate selects market areas mainly on positions in worldwide niche markets. Sales offices
GEOSYNTHETICS INDUSTRIAL FABRICS GRASS CCS Composites inc Benicia (California), USA Ten Cate USA inc Washington D.C., USA
the basis of global trends, specifically in Advanced composites for aerospace and industrial applications
Synthetic fabrics, non-wovens Synthetic fabrics, non-wovens and Synthetic turf components and integrated Ten Cate Thiolon bv Nijverdal, Netherlands Ten Cate UK ltd London, UK
the safety / protection and sustainability / TenCate employs around 4,720 people
and grids for solutions and applica- grids for solutions and applications systems for top-flight sports, recreation and Ten Cate Advanced Armor USA inc Newark (Ohio), USA Ten Cate Thiolon North America inc Dayton (Tennessee), USA Ten Cate France sas Paris, France
environmental fields. With regard to worldwide and strives to operate in an Advanced composites for vehicle armour
tions in infrastructure and civil in agriculture and horticulture, the landscape projects. Ten Cate Thiolon Middle East (49%)1 Dubai, UAE Ten Cate Deutschland GmbH Opladen, Germany
the characteristics of the materials ethically and socially responsible way. Synthetic turf components and systems
engineering. environmental sector, the construc- TenCate Advanced Armour UK (AML) Swindon, UK Ten Cate Danmark a/s Copenhagen, Denmark
(specifications), the markets are usually reg- TenCate encourages its employees to be
tion industry and recreation. AML India Private ltd (90%) Noida, India Ten Cate Thiobac bv Nijverdal, Netherlands Royal Ten Cate Pacific ltd Hong Kong, China
ulated by governments or agencies on the enterprising, flexible and creative, thereby Design and production of materials for vehicle armour Backing for synthetic turf systems Royal Ten Cate China Holding ltd Hong Kong, China
basis of legislation and regulations. demonstrating its aim of achieving progress Country holding companies
◾ TenCate Geosynthetics ◾ TenCate Industrial Fabrics ◾ TenCate Grass Americas Edel Grass bv (50%) Genemuiden, Netherlands
The direct customers of TenCate are mainly and sustainability for all stakeholders. Marketing and installation of synthetic turf systems
Americas Americas ◾ TenCate Grass EMEA Ten Cate Finance AG Schaffhausen, Switzerland
◾ TenCate Geosynthetics EMEA ◾ TenCate Industrial Fabrics ◾ TenCate Grass Asia TigerTurf NZ ltd (80%) Auckland, New Zealand Financing company
◾ TenCate Geosynthetics Asia EMEA TigerTurf Australia pty ltd (80%) Campbellfield, Australia
◾ TenCate Industrial Fabrics Asia TigerTurf (UK) ltd (80%) Hartlebury, UK
Tiger Sports Americas inc (80%) Austin (Texas) USA
OTHER ACTIVITIES SECTOR TenCate has its own production sites and sales offices in the following countries ( ): Geographic breakdown of sales in 2010
(all as at 28 April 2010; as at 31 March 2009: 49%)
in per cent Marketing and production organisations for synthetic turf systems
INKJET TECHNOLOGY TECHNICAL COMPONENTS HOLDING & SERVICES
Specialist inkjet technology for Technical rollers and components, Holding company activities 50
industrial production processes. particularly for printers, copiers, fax ◾ Koninklijke Ten Cate nv 45
machines, postal sorting machines
40
and ATMs.
35 1) Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate The operating companies listed here are consolidated in the financial statements, with the exception
has 100% economic ownership.
◾ Xennia Technology ◾ TenCate Enbi North America 30 of the companies shown as non-consolidated. Some interests of minor relevance to the overall
North America Europe Italy Middle East Oceania
◾ TenCate Enbi EMEA 25
United States Belgium Netherlands Dubai Australia picture have been omitted from the list, in accordance with article 379, paragraph 3, Book 2
◾ TenCate Enbi Asia Denmark Austria New Zealand 20
South America Germany Poland Asia of the Netherlands Civil Code. The companies are wholly owned unless stated otherwise.
Brazil United Kingdom Romania China 15
France Spain India
Hungary Czech Republic Malaysia 10
Ireland Switzerland Singapore
5
◾ By destination
Thailand
0 ◾ By origin
BELGIUM
GERMANY
NETHERLANDS
UK
FRANCE
AUSTRIA
ITALY
SPAIN
OTHER EU
OTHER EUROPE
MIDDLE EAST
USA + CANADA
SOUTH AMERICA
CENTRAL AND
ASIA
REST OF THE WORLD

Royal Ten Cate Annual Report 2010 Royal Ten Cate Annual Report 2010
40
and ATMs.
France Spain India
5
◾ By destination
Thailand
0 ◾ By origin
BELGIUM
GERMANY
NETHERLANDS
UK
FRANCE
AUSTRIA
ITALY
SPAIN
OTHER EU
OTHER EUROPE
MIDDLE EAST
USA + CANADA
SOUTH AMERICA
CENTRAL AND
ASIA
REST OF THE WORLD

Annual report 2010
Royal Ten Cate
Profile Inside cover

Commercial overview Inside cover
Geographic presence
Financial highlights 3
Key developments in 2010 4
Evaluation of 2010 action plans 5
Vision, mission, strategy and objectives 6
TenCate technology overview 8
Foreword by the Chairman of the Executive Board 10
The TenCate share 12
Share listing 12
Investor relations policy and communication 12
Dividend policy and proposed dividend 12
Disclosure of Major Holdings in Listed Companies Act 13
Option plan 13
Spread of shareholdings 13
Connected to end-user marketing 15
Report of the Supervisory Board 17
The Boards 20
Report of the Executive Board 23
General 23
Financial performance 23
Activities by sector 31
Post balance sheet events 59
Outlook 59
Actions for 2011 60
Corporate information 61
Corporate governance 61
SWOT analysis 62
Risk management 65
Human resources management 72
Corporate information technology 74
Corporate technology 75
Corporate intellectual property 76
Corporate social responsibility 78
Statement by the Executive Board 83
Financial statements 2010 85
Other information 160
Ten-year summary 164
Operating companies, associated companies
and other interests Inside cover
Colophon Outside cover
EBITA AND NET RESULT REVENUES BY SECTOR
in millions of euros in millions of euros
◾ Operating result before amortisation ◾ Advanced Textiles & Composites

◾ Net result ◾ Geosynthetics & Grass
◾ Other activities
108 540
96 480
84 420
72 360
60 300
48 240
36 180
24 120
12 60
0 0
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
EBITA BY SECTOR PER-SHARE DATA

in millions of euros in millions of euros
◾ Advanced Textiles & Composites ◾ Net result

◾ Geosynthetics & Grass ◾ Dividend
72 2.70
63 2.40
54 2.10
45 1.80
36 1.50
27 1.20
18 0.90
9 0.60
0 0.30
–9 0.00
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
2 Royal Ten Cate

Financial highlights in millions of euros unless stated otherwise
PROFIT AND LOSS ACCOUNT 2010 2009
Revenues 984.5 842.1

Operating result before depreciation and amortisation (EBITDA) 119.5 75.4
Operating result before amortisation (EBITA) 85.0 41.5
Operating result before amortisation as % of revenues (EBITA margin) 8.6% 4.9%
Operating income (EBIT) 74.6 32.7
Net result 46.0 23.9
Net result before divested operations and impairment * 46.0 19.3
CONSOLIDATED BALANCE SHEET AND RETURN
Net capital employed (year-end) 715.4 620.9

Return (EBITA) on average net capital employed 12.1% 5.7%
Net interest bearing debt (year-end) 240.7 195.5
CONSOLIDATED CASH FLOW
Cash flow from operating activities 29.1 144.8

Investments less divestments of fixed assets – 20.4 – 12.9
Free cash flow 8.7 131.9
Balance of acquisitions/disposals of operating companies and participating interests – 24.7 3.3
OUTSTANDING SHARES (X 1,000)
Number of outstanding shares at year-end 25,502 25,068

Weighted average number of shares (before dilution) 25,026 24,544
Weighted average number of shares (after dilution) 25,216 24,616
PER-SHARE DATA
Net result 1.84 0.97

Net result before divested operations and impairment 1.84 0.79
Diluted net result 1.82 0.97
Diluted net result before divested operations and impairment 1.82 0.79
Dividend per share 0.75 0.60
Equity 16.94 15.19
EMPLOYEES
Number of staff years at year-end 4,271 3,805

– of which in the Netherlands 785 862
* 2009: excluding income from the sale of Geofabrics, Permess Hong Kong and impairment.
Annual Report 2010 3

Key developments in 2010
◾ 17% revenue growth ◾ New office for TenCate businesses in USA
Revenues amounted to € 984.5 million 2010 (organic growth of TenCate USA opened an office in Washington D.C. under the name
+10%). Strong growth was achieved despite the limited economic of Public and Government Relations TenCate USA in November
recovery. The largest contribution to the increase in revenues 2010. It operates as a branding and marketing platform for all
came from the synthetic turf businesses. The largest organic rise TenCate companies in the United States and is responsible mainly
in revenues was at TenCate Enbi (Other Activities sector). for promoting business and positioning the TenCate brand.
◾ Net profit growth 92.5% ◾ Successful product differentiation in safety fabrics
Whereas in 2009 the primary objective was to control debt, As a result of new product concepts in safety fabrics (including
attention in 2010 shifted to profit optimisation. The internal TenCate Tecasafe™ Plus), the market share for professional wear
measures to achieve this were completed during the year. in industrial markets increased considerably. The United States in
This led to a substantial recovery in results and delivered strong particular is a growth market for TenCate.
improvement potential, particularly in the TenCate businesses in ◾ Resumption of deliveries to the commercial aviation industry
the Netherlands. Deliveries to Airbus and Boeing resumed in the second half of
◾ Recovery in results of synthetic turf activities 2010. Besides the Airbus A380 and the Boeing 787, TenCate is
The substantial recovery particularly in the results of the synthetic qualified for various aircraft, including the Airbus A350 XWB,
turf businesses led to an 87% rise in EBITA in the Geosynthetics & for which TenCate Cetex® also began supplying products.
Grass sector to € 31.4 million. This was mainly due to a change of ◾ Shortages in the fibre market
policy with regard to inventory planning, logistics and production. Due to the enormous success of products such as TenCate
The focus was shifted to the Dubai production site, which Defender™ M, supplies of certain raw materials (mainly aramid
delivered cost benefits. fibres) came under pressure. Producers failed to adjust volumes
◾ Alliances with downstream market participants in the synthetic immediately in response to the sharp rise in demand. The rises in
turf market raw material prices had no notable negative impact on TenCate.
Major progress was made in 2010 in implementing the commercial ◾ Establishment of International Advisory Board
strategy through alliances with high-calibre market participants, Professor J.G. de Hoop Scheffer, retired General D.L. Berlijn and
including TigerTurf. A side effect of this were additional costs to K. Blextoon are the members of the International Advisory Board of
streamline market activities and make organisational and other TenCate, which provides the Executive Board with advice and
improvements. support, mainly with regard to the defence and aerospace markets.
◾ Record sales of TenCate Defender™ M products The safety and protection market theme is high on political
2010 was a year of two halves for TenCate Protective Fabrics USA agendas. A positive profile for TenCate and its advanced materials
(part of the Advanced Textiles & Composites sector). In the first in government-related markets will strengthen the company’s
half, revenues from TenCate Defender™ M were low due to an position.
adaption of the camouflage print to the specific terrain conditions
in Afghanistan. In the second half, however, revenues reached
record levels. Fourth-quarter revenues rose to around US $ 60
million.
4 Royal Ten Cate

Evaluation of 2010 action plans
◾ Policy focused on profit growth ◾ Renewed focus on acquisitions
The policy conducted in 2009 on cost control and product The intended activation of the buy & build strategy led to a number
differentiation provided a good foundation for the profit recovery of acquisitions within TenCate Geosynthetics, Xennia Technology,
achieved in 2010. the TenCate Grass group and the European businesses in the field
◾ Focus on emerging markets and partnerships of antiballistics (armour composites). The syndicated bank facility
The policy towards emerging markets proved successful. Revenue was refinanced at the end of 2010, providing greater flexibility
growth was achieved particularly in Asia and South America in the with regard to the credit requirement in seasonal patterns and
field of protective fabrics and geotextiles. The co-operation with creating sufficient headroom for future acquisitions.
partners in the value chain also led to a number of attractive
projects. These were reported on regularly. The partnerships
(downstream activities) in the synthetic turf market resulted in a
larger market share but entailed initial costs.
◾ Technology development / R&D
Good progress was made with regard to R&D co-operation. In
addition to three existing open innovation centres (TAPAS, TPRC
and AMRC), agreement was reached with the Province of
Overijssel on a subsidy for the Open Innovation Centre for
Advanced Materials (OICAM) in Nijverdal. Consultations also took
place with the Ministry for Economic Affairs on the further
embedding of advanced materials as a focal activity. The initiative
taken by leading companies in the east of the Netherlands to pool
innovation strengths (Advanced Materials Oost-Nederland,
AMMON) can also be viewed in this context.
◾ Turnaround in production in the Netherlands
The turnaround in the Dutch businesses of TenCate has been a
success. Cost control and a focus on high-quality, knowledge-
intensive production have led to a strong recovery in results. From
cost management, the focus has gradually shifted to strengthening
the commercial positioning. The developments in inkjet technology
as an innovative finishing process were somewhat delayed by the
problems encountered by Xennia Technology with a supplier of
inkjet heads, which made it impossible to commence trial
production at Nijverdal before the end of the year.

Vision, mission, strategy and objectives
VISION MISSION
TenCate develops and produces functional materials which are Progress is one of the principal motives of TenCate. The company
distinctive in terms of their characteristics. TenCate focuses on aims to be a leader in providing sustainable solutions for complex
worldwide trends in the field of safety / protection and sustainability / requirements relating to personal protection and protection of the
environment, as well as derivative themes, which promote the growth personal environment. TenCate has secured a leading position in its
of the company. markets worldwide and can fulfil that leading role, partly as a result
Markets demand specific critical functionalities to meet specific needs, of its broad technological competence.
which are usually determined by standardisation or legislation and
regulations. Safety / protection and sustainability / environment are STRATEGY
trends that are tightly regulated worldwide. The TenCate strategy is based on the concept of global value chain
TenCate operates in the field of material science. Technological management. On this basis TenCate works with numerous links in the
development is an important means of complying with standards chain in sustainable growth markets. The four cornerstones of this
and meeting requirements or adjusting standards in such a way that policy are:
progress can be made in terms of functionalities. 1. End-user marketing and an industrial intellectual property policy;
TenCate products are used in systems. TenCate increasingly provides 2. Product differentiation, targeted at specific applications and
the overall solution, either independently or in co-operation with customer requirements;
partners. 3. Cost leadership;
4. Technological innovation.
The acquisition policy over the past few years has resulted in a leading
technological and market position, enabling critical mass to be
achieved. The global presence in submarkets and the wide product
portfolio in combination with TenCate’s leading technological position
and innovative character represent important competitive advantages.
6 Royal Ten Cate

OBJECTIVES
QUALITATIVE STRATEGIC OBJECTIVES FINANCIAL OBJECTIVES
◾ Creation of shareholder value through profitable growth based on ◾ The net capital employed must generate a sufficient return.
our knowledge, skill and internal synergy. In this way we can take The operating income before amortisation as a percentage of
account of our social responsibilities, from both an economic and average net capital employed must be at least 15%.
social perspective. ◾ The financial position must be sufficiently solid. The ratio of net
◾ Achievement of critical mass in product-market-technology interest-bearing debt to operating income before depreciation and
combinations by securing leading positions in worldwide market amortisation (EBITDA) must be structurally lower than 2.5.
niches. ◾ The target of 10% annual profit growth is based on EBITA
◾ Achievement of a healthy financial position with sufficient (operating result before amortisation). To this end, the buy & build
strength for acquisitions. strategy will be pursued. Higher added value and efficiency are
◾ Management of a balanced portfolio of activities, in which also necessary, since the organic growth of the core activities will
product-market-technology combinations differ in terms of growth be below 10% on average.
opportunities and risk profile. ◾ An appropriate profit margin must be achieved. The consolidated
◾ Stimulation of an open, creative and enterprising culture for EBITA margin should rise to at least 10%.
progress, change and renewal.
◾ Management of a global commercial organisation which thinks
in terms of (system) solutions within the overall value chain.
TenCate – a strong brand

TenCate is one of the Dutch listed (midcap) companies with the most valuable brands. At the beginning of 2010, the value of the
TenCate corporate brand was estimated at € 83 million, and the total value of the TenCate brands at € 100 million. TenCate
conducts an industrial brand policy within an overall brand architecture. The brand policy is focused on end-user marketing and
associated with product differentiation. The role of the TenCate corporate brand will be further strengthened in the years ahead.
That will deepen and expand the identity and promote the transparency and reputation of the company.

TenCate technology overview
GLOBAL TRENDS
END-USER Safety and protection, sustainability and environment
END-USER MARKETS
MARKETING
market
management
DIFFERENTIATION PRODUCTS (materials, modules, systems)

protective fabrics outdoor fabrics space composites aerospace composites
portfolio
VALUE CHAIN MANAGEMENT
management
COST LEADER
MATERIAL TECHNOLOGY
Fiber technology Textile technology
process
management
Basic technologies
P Physics BT Biomedical technology
C Chemistry / Chemical engineering ME Mechanical engineering
PC Nanotechnology / Polymer chemistry E Electronics

INNOVATION
8 Royal Ten Cate

TenCate business model © TenCate
business
END-USER MARKETING development INNOVATION
market technology
market process
EXTERNAL VALUE CHAIN MANAGEMENT INTERNAL
management management
product process
DIFFERENTIATION portfolio COST LEADER

management
armour composites geosynthetics industrial fabrics grass
business
development
Finish technology
M Mechatronics
IT ICT
B Biosciences
© TenCate

Foreword by the Chairman
of the Executive Board
REVENUE GROWTH AND STRONG PROFIT GROWTH The 2010 result was achieved partly due to an excellent contribution
IN A SLUGGISH ECONOMIC CLIMATE from the TenCate Protective Fabrics USA market group. The most
TenCate created a good basis for recovery by intervening rapidly in its striking aspect was the increase in sales of the TenCate Defender™ M
financial management and shifting its commercial attention to new product portfolio from the beginning of the fourth quarter.
markets and geographic areas. This recovery in activities was broadly In addition to sales of protective fabrics to the US Army, the industrial
based in 2010. market recorded strong growth.
Revenues reached € 985 million, almost back to the level recorded
in the outstanding 2008 financial year. Net profit amounted to The second half of 2010 saw a gradual recovery in the market for
€ 46 million, representing a 92% rise compared to 2009. aerospace composites, particularly in relation to Airbus Industries.
Since the economic recovery has so far remained limited, this inspires The forecast revenue growth in thermoplastic composites (TenCate
confidence in the future of TenCate. Cetex ®) was slowed in past years by technical delays in the start-up
Nevertheless, in 2011 there is still a need to remain vigilant with of full-scale production of new aircraft. This had a major impact on
regard to costs, to exercise restraint with regard to investments and TenCate as a supplier. This situation has now been resolved.
to keep working capital under control. TenCate is expected to continue Since TenCate occupies a leading position in this area and such
to fulfil its ambition with regard to profitable growth. composites are increasingly being incorporated in aerospace
structures, the outlook for the years ahead is positive. There is
POSITIVE OPERATIONAL TREND increasing interest in TenCate materials, not only from the aerospace
The underlying operational trend is more positive than the figures sector but also from other industrial market participants.
suggest. In some areas, it became clear that suppliers were having
difficulty keeping up with the strong growth in demand. This led to A number of Dutch businesses and knowledge institutions are
shortages in some commodity markets and caused a lag in revenues providing an important foundation for the material technology cluster,
particularly in the Advanced Textiles & Composites sector. as can be seen from the innovation centres based around the
University of Twente and Delft University of Technology of which
At the beginning of the year, shareholders were given the prospect TenCate is a cofounder. TenCate is participating as a launch partner,
of a recovery in results in the synthetic turf businesses. The together with Airbus, Boeing and Fokker Aerostructures, among others.
relationship of TenCate with this end-market was successfully TenCate has the necessary technology in house to anticipate the trend
reorganised. This is part of the strategic process in which TenCate is towards strong, light materials, particularly in the field of mobility and
focusing on more sustainable systems and greater transparency in energy extraction.
terms of price-quality ratios. Although this process of increasing chain
integration entailed additional costs, the overall result increased
strongly in 2010.
TenCate Grass Europe completes process optimisation

As the result of an extensive transformation process, TenCate Grass Europe (Nijverdal) was turned into a flexible, customer-
focused and efficiently managed production unit in 2010. The production of grass yarns now takes place in a single hall.
The improved layout of the plant guarantees efficient production and efficient use of employees. The packing of products and
internal transportation are fully automated. Data transmission systems are interconnected as far as possible. Logistical planning
and inventory management have been further improved. Quality and the related procedures are constantly monitored to
permanently guarantee the quality for which TenCate Grass is known.
10 Royal Ten Cate

Although the growth of Xennia Technology (digital inkjet technology) Investments in tangible fixed assets, however, remained limited during
fell short of expectations due to delivery problems with a major the financial year (€ 16.2 million). In a number of growth areas, such as
supplier, strategic advances were nonetheless made. composites, the level of investments in previous years was such that
The company began producing its own inks in 2010. Activities were capacity is sufficient at present.
also strengthened in the field of software for operating systems. A new financing facility was arranged at the end of 2010 which fits
As a launch customer, TenCate is set to begin digital trial production in well with the growth ambitions of TenCate.
in textile finishing in the course of 2011.
An important aspect of the growth of TenCate relates to developments
SUCCESSFUL COST CUTTING IN DUTCH BUSINESSES in Asia and South America. The two main growth activities in these
Following the measures taken in 2009 in the Dutch businesses, 2010 regions are protective fabrics and geotextiles (infrastructure and
was marked by the flexiblisation of costs and increased efficiency. environmental market). TenCate increased its positions in these
TenCate would concentrate increasingly on high-grade, knowledge- markets in 2010.
intensive production and technology development. Good progress was
made in this field and a clear improvement in results was achieved. Finally, the issue of sustainability within the company as a whole is an
This improvement process will be continued in the years ahead with increasingly important area of attention. This will be developed further
more intensive end-user marketing. in 2011 in terms of both form and content.
ACTIVATION OF BUY & BUILD STRATEGY I would like to express my gratitude to the employees for their
With a brief interruption in 2009, TenCate has made growth-financed commitment and their high degree of co-operation with colleagues
acquisitions in the past two years which have been crucial for the throughout the group. A technology company such as TenCate stands
group’s further development. Although acquisitions can entail to benefit from smart combinations of technical skills and solution-
additional risks, the risk appetite of TenCate is rightly limited. focused operation.
Acquisitions have always been complementary in product-market-
technology combinations that are related to the existing portfolio of
TenCate. The market positions were steadily strengthened in this way
in the course of 2010. At the beginning of 2010 it was announced that
TenCate would intensify the buy & build strategy.
L. de Vries, President and CEO

The TenCate share
SHARE LISTING is now being published in two languages and distributed worldwide
The TenCate share is listed on NYSE Euronext Amsterdam and forms among all employees, as well as to all stakeholders who have signed
part of the AMX index. The share is actively followed by around ten up for it (via the website). The magazine provides an insight into the
analysts from leading Dutch banks and securities houses. growth trends at TenCate as well as background information on the
group’s activities worldwide.
As at 31 December 2010, 25,501,907 ordinary TenCate shares were in The communication policy will be increasingly focused on markets
issue, each of a par value of € 2.50. The closing price of the share was and stakeholders outside the Netherlands, having regard to their
€ 28.00. commercial importance. Intensive communication took place with
stakeholders in the US market in 2010 in relation to the TenCate
INVESTOR RELATIONS POLICY AND COMMUNICATION Defender™ M product.
As a result of the financial crisis, institutional investors had a greatly
increased preference for larger listed stocks with high liquidity. DIVIDEND POLICY AND PROPOSED DIVIDEND
There was also a sharp decrease in the activities of hedge funds, TenCate aims to achieve further profitable growth in its core markets.
which led to a change in the shareholder base in 2010. A great deal of In 2010 it was announced that after a period in which cash
interest was evident among investors with a long-term horizon, who management had been the priority, the buy & build strategy would
positively value the growth trends in TenCate. In the second half of the be intensified so that no further calls had to be made on the financial
year particular attention was devoted to communication with the markets.
private investors market. A constant line of conduct was maintained in terms of dividend
policy. The distribution percentage in principle is 40%, payable at
The aforementioned stock market trends led to the average daily shareholders’ discretion either in cash or in shares as a charge to
trading volume decreasing in 2010 to 58,406 shares (2009: 102,106). the share premium reserve.
As a result of newly established electronic trading platforms,
approximately three-quarters of trading in the share takes place In respect of the 2010 financial year it is proposed to set the dividend
through NYSE Euronext. The reported trading turnover relates to the at € 0.75 per € 2.50 par value share, payable at shareholders’ discretion
Euronext figures. either in cash or in shares as a charge to the share premium reserve.
Although turnover in the stock market decreased, TenCate was among
the companies with the highest price performance.
Internal and external communication was more closely aligned in terms

of form and content at the beginning of 2010. Greater attention was
also devoted to the substance of the TenCate corporate brand.
The TenCate txtures customer magazine was relaunched in 2010 and
30
Source NYSE Euronext ◾ Royal Ten Cate 28
ISIN code NL 0000375731 ◾ AEX 26
Reuters code NTCN.AS ◾ AMX 24
Bloomberg code KTC.NA ◾ AsCX 22
20
18
16
14
12
10
JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC
12 Royal Ten Cate
Number of shares in issue OPTION PLAN, SHAREHOLDINGS OF PERSONNEL
Number of shares in issue on 31 December 2009 25,067,580 AND EXECUTIVE BOARD
Increase in share capital as a result of stock dividend 434,327 Details of the option plan and shareholdings of managers and members
Number of shares in issue 31 December 2010 25,501,907 of the Executive Board can be found on page 154 of this annual report.
Any shares repurchased by the company relate to the hedging of
Changes in the number of shares in issue 2010 2009 granted options.
Par value € 2.50 € 2.50
Lowest price € 17.30 € 10.31 Important dates in 2011
Highest price € 28.83 € 18.50 Publication of 2010 full-year figures 2 March
Closing price € 28.00 € 18.43 Annual General Meeting of Shareholders 21 April
Earnings per share € 1.84 € 0.97 Ex-dividend date 27 April
Dividend per share € 0.75 € 0.60 Record date: determination of dividend entitlements 29 April
Option period for cash or stock dividend 2 to 20 May
DISCLOSURE OF MAJOR HOLDINGS IN LISTED Publication of trading update for first quarter of 2011 3 May
COMPANIES ACT Payment of dividend / delivery of shares (stock) 25 May
The register maintained by the Netherlands Authority for the Financial Publication of half-year figures 2011 2 August
Markets (AFM) in connection with the disclosure of major holdings Publication of trading update for third-quarter of 2011 3 November
in listed companies contains details of the following investors with
interests in excess of 5% (source: AFM).
Name Date of disclosure Percentage
Delta Lloyd N.V. 1 November 2006 5.08%

Schroders plc 27 October 2009 8.25%
Kempen Oranje Participaties N.V. 1 January 2010 6.34%
Ameriprise Financial Inc 1 May 2010 7.69%
Delta Lloyd Deelnemingen Fonds N.V. 22 June 2010 10.16%
On the basis of the accompanying geographic breakdown of relatively

large shareholdings held by institutional investors (approximately two-
thirds of the shares is issue), the distribution remains almost the same
as in the previous year. Approximately 15% to 20% of the shares in
issue are held by private investors in the Netherlands.
Geographic spead of institutional shareholders 2010 in per cent

44%
6%
4% ◾ Netherlands
◾ United Kingdom
14% ◾ United States
◾ Germany / Switzerland
◾ Belgium
22% ◾ Scandinavia
10%
PROTECTIVE FABRICS
The renowned TenCate Defender™ M

fabric from TenCate Protective Fabrics is
used not only in the protective clothing
of American soldiers, but also as a
thermal liner for fire fighters’ turnout
gear in the US. This high-tech material
has patented flame-resistant properties
that are inherent in the fabric so they
will not wash or wear out. The protective
fabric is breathable and naturally wicks
perspiration away from the body, yet is
lightweight and comfortable enough for
station wear clothing, like shirts, jackets
and trousers.
Because TenCate Defender™ M was

originally designed for the military, it
also has excellent resistance to wear,
tear and fading. This ensures a longer
useful garment life for fire fighters’
turnout gear. TenCate Defender™ M
is a tri-blend fabric, consisting of 65
percent Lenzing FR ® Rayon, 25 percent
para-aramid and 10 percent nylon. The
fabric has been available since the
summer of 2010 in a variety of colours,
including solids and special camouflage
prints, in order to meet the needs of
both structural and wildland fire fighting
organizations in the United States.
Connected through end-user marketing

Connected to end-user marketing
PROVISION OF CUSTOMER-ORIENTED SOLUTIONS TenCate focuses on applications in which the materials used are
The strategic framework of TenCate, which was devised and governed by strict and often high standards. Markets are usually
introduced a decade ago, is based on four cornerstones, in which value regulated by the government in terms of the applicable standards,
chain management is implemented: for example with regard to environmental or employment legislation.
◾ End-user marketing The main standards apply in the field of safety and protection.
◾ Product differentiation Sustainability standards are increasingly being introduced. In most
◾ Cost leadership cases materials have to meet strict tender specifications or safety
◾ Technological innovation regulations, as in the case of the aviation industry.
The transition to a more market-oriented organisation has also shifted
Translating customer requirements into system solutions is one of the the emphasis increasingly to the added value of revenues. Added value
principles of end-user marketing. This annual report provides further is also important in order to control quality and other aspects of the
details of these cornerstones of the TenCate business model. Although value chain.
the immediate customer base of TenCate mainly comprises
government-related parties, system integrators, OEMs and their direct ORGANISATION
suppliers, it is important to know the demands made by end-users and This strategy leads to a growing degree of internal co-operation and
to anticipate new material requirements. These often originate in laws, coherence in the technological and commercial field. TenCate refers to
regulations or standards. product-market-technology combinations. By co-operating internally
and mobilising knowledge and skills particularly in the technological
MATERIAL CHARACTERISTICS field, new solutions are constantly produced. Examples of this are the
TenCate develops and produces materials with a wide range of weaving of synthetic turf systems and the successful introduction of
characteristics. The underlying technologies, techniques, processes, TenCate Tecasafe ® Plus and TenCate Defender™ M in the US industrial
patents, formulations, etc. constitute the binding factor. TenCate market and the European defence and police market respectively.
materials increasingly form part of systems which combine materials, The more solution-oriented approach is also giving rise to an upgrading
modules or technologies. of the marketing and sales process. The network of agents and dealers
In recent years the focus of attention in the commercial process has is increasingly being replaced by specialist resellers and specialists.
gradually shifted from the direct customer to the specific requirements
of end users. These requirements often originate in laws, regulations
or standards.
business
END-USER MARKETING development INNOVATION
market technology
market process
EXTERNAL VALUE CHAIN MANAGEMENT INTERNAL
management management
product process
DIFFERENTIATION portfolio COST LEADER

management

> CONNEC T ED TO END-USER M A RK E T ING
CO-OPERATION IN THE VALUE CHAIN

A cohesive market approach means connecting with the entire value
chain, both upstream and downstream. TenCate increasingly operates
in networks within the value chains. This leads to co-operation with
parties including OEMs (original equipment manufacturers), knowledge
institutions, technology partners, suppliers, governments, international
specialist companies in water management and the environment,
specialists in the processing of composite materials and companies
marketing synthetic turf concepts. TenCate is also reaping the
benefits of open co-operation in the scientific and research field.
By maintaining this external focus and a readiness to combine
strengths, TenCate intends to maintain its lead in the technological
field, as a guarantee that it will continue to offer customer-focused
solutions over the long term.
New thematic format for txtures customer magazine

From 2010, the txtures customer magazine is being published four times a year in a new, more thematic format. With this
publication, TenCate aims to show a wide target group in a readable way how safety/protection and sustainability /
environmental trends and related market themes are the binding factors in the company. It also shows the importance of TenCate
activities for the customer or the market. The corporate website provides background information, up-to-date photographs and
film images. Where possible, each article includes the name of a contact from whom more detailed, expert information can be
obtained.
16 Royal Ten Cate

Report of the Supervisory Board
ANNUAL REPORT During the joint meetings, the Supervisory Board dealt with subjects
We hereby present the 2010 annual report as prepared by the such as the strategy of the three sectors within TenCate, the SWOT
Executive Board, incorporating the financial statements. The financial analyses, risk management, as well as various acquisition proposals,
statements have been audited by KPMG Accountants NV and were including those relating to AML and Emas Kiara.
discussed with the Executive Board on 1 March 2011, in the presence
of the auditor. The unqualified auditor’s report is included on page 160. Particular attention was devoted to the interests in the TenCate Grass
We are therefore of the opinion that the annual report fulfils the group and their inadequate returns.
transparency requirements and forms a good basis on which the
Supervisory Board can account for its supervision. Other subjects included the refinancing by means of a new € 450
We propose that you accordingly adopt the financial statements, million syndicated loan, the 2011 budget, the situation with regard to
approve the dividend proposal and grant discharge to the Executive digital finishing and printing at Xennia, the TenCate Enbi divestment
Board in respect of its policy and to the Supervisory Board in respect of process and qualifications of the group management and the
its supervision. management level below it.
COMPOSITION Discussions took place in the autumn on the appointment of a

Mr R. van Gelder was appointed as a member of the Supervisory Board successor to the interim CFO, J. Lock. This resulted in the intended
with effect from 8 April 2010. As former Chairman of the Executive appointment of B. Cornelese at the General Meeting of Shareholders
Board of Koninklijke Boskalis Westminster and of Heijmans, Mr Van of 21 April 2011. We are very grateful to Mr Lock for his contribution,
Gelder has extensive management and international business which he made in the two additional years after his initial retirement.
experience.
Mr P.P.A.I. Deiters was reappointed for a term of four years and The financial results were discussed at the end of each quarter.
re-elected as Vice-Chairman of the Supervisory Board. The external auditor reported on his findings during the discussion on
the 2009 full-year figures and first-half figures for 2010.
SUPERVISION
The Supervisory Board held plenary meetings with the Executive Board The board deliberated independently of the Executive Board on
on seven occasions in 2010, on the basis of a fixed schedule. It also the composition and performance of the Supervisory Board and the
met independently on several occasions. The meetings discussed the performance of the Executive Board, as well as on the remuneration
performance of both the Executive Board and the individual directors. of the Executive Board.
The Supervisory Board also assessed its own performance, as well as
that of the committees and the individual supervisory directors.
All members attended the meetings.

> REPOR T OF T HE SUPER V ISORY BOA RD
Representatives of the Board also took part in six consultative SUPERVISORY BOARD COMMITTEES
meetings of the Central Works Council. They participated in the The Supervisory Board has two committees: the financial committee
discussions and took note of the activities and events within the chaired by Mr E. ten Cate and the combined Remuneration, Selection
company. and Appointments Committee chaired by Mr F.A. van Vught. Their task
is to analyse subjects within their specific knowledge areas and to
CORPORATE GOVERNANCE prepare decisions to be taken in the plenary meetings of the
In accordance with the recommendations of the Corporate Governance Supervisory Board. In April 2010, Mr R. van Gelder became a member
Committee, the amended code applicable with effect from 2009 was of the Financial Committee, as a successor to Mr Deiters, who in turn
discussed at the General Meeting of Shareholders of 8 April 2010. became a member of the Remuneration, Selection and Appointments
The Supervisory Board and the Executive Board have endorsed the Committee.
main principles of the amended Code. It is therefore being applied in
full by the company. The only variations applicable within Royal Ten FINANCIAL COMMITTEE
Cate concern primarily the size of the company. These variations and The Financial Committee met in plenary sessions on four occasions in
the associated explanation fit in better with the operating method of 2010 to prepare for the discussion of the 2009 annual figures, the 2010
TenCate. The variations applied by TenCate can be viewed on the quarterly and half-yearly figures and a number of specific subjects.
company’s website (www.tencate.com).
In-depth consideration was given to matters such as the internal
INDEPENDENCE control and reporting system, the cost management system and the
All members of the Supervisory Board are independent within the intention to introduce a functional income statement with effect from
meaning of the best-practice provisions of the Corporate Governance 1 January 2012, the refinancing, the tax position particularly in the
Code. Netherlands, the ICT situation in the groups and at corporate level, the
impairment calculations, the policy with regard to audit services, the
No TenCate shares or options are held by the members of the management letter from the external auditor, and the follow-up to his
Supervisory Board. recommendations.
COMBINED REMUNERATION, SELECTION AND APPOINTMENTS

COMMITTEE
Discussions took place in the autumn on the appointment of a new
CFO. This led to the intended appointment of Mr B. Cornelese at the
General Meeting of Shareholders of 21 April 2011.
Establishment of International Advisory Board

TenCate operates in markets that often include public sector end-users and is therefore partly dependent on government orders.
The growing number of relationships with institutions and governments means there is an increasing need for specific expertise in
this field. TenCate has therefore established an International Advisory Board to support the Executive Board and provide strategic
advice. The Advisory Board members (from right to left) are Messrs J.G. de Hoop Scheffer, K. Blekxtoon and D.L. Berlijn. Their
relevant experience, international networks and reputation will make a positive contribution to the positioning of TenCate in the
international market.
18 Royal Ten Cate

REMUNERATION REPORT This took into account on the one hand the fact that income fell sharply
The 2010 remuneration report has been posted on the company’s in 2009 compared to 2008, mainly as a result of the financial crisis, and
website. on the other hand the fact that the Board took the appropriate
measures in time in order to reduce costs and continue to comply with
PRINCIPLES OF THE REMUNERATION POLICY the bank covenants. He was also granted 60,000 options at an exercise
The Supervisory Board of Royal Ten Cate applies a remuneration policy price of € 18.96.
in respect of the company’s management, based on the following
principles: For the CFO, the fixed annual salary is set at Hay level 26. The variable
◾ Remuneration of the management is aimed at attracting and salary component is a maximum of 40% of the fixed salary.
retaining senior managers; In 2010, Mr Lock received a pro rata percentage of 22.5% as variable
◾ The remuneration policy must conform to the company’s corporate remuneration in respect of 2009. He was also granted 30,000 options
governance policy; at an exercise price of € 18.96.
◾ The remuneration must reflect the strategic and financial
objectives and be to a large extent performance-oriented, with a The full report can be found on the website under Corporate
good balance between short and long-term results and objectives; Governance/documents.
◾ The remuneration must not include any incentives which give rise
to behaviour directed towards personal interests that conflicts The remuneration of the Executive Board is stated in note 56.2 on page
with the company’s interests; 148 of this report.
◾ A scenario analysis is drawn up each year with regard to the
possible outcomes of the remuneration policy. Almelo, 1 March 2011
The posts of CEO and CFO of Royal Ten Cate are based on Hay-levels. Supervisory Board
In the case of the CEO, Hay level 30 is applied. This level corresponds J.C.M. Hovers, Chairman
to an organisation of the size, complexity and international character of P.P.A.I. Deiters, Vice-Chairman
Royal Ten Cate. The variable remuneration component is a maximum of F.A. van Vught
50% of the fixed annual salary. E. ten Cate
R. van Gelder
In 2010, Mr de Vries received a variable salary component in respect of
2009 amounting to 37.5% of the fixed annual salary.

The Boards (as at 1 January 2011)
EXECUTIVE BOARD
L. de Vries (1951), President and Chief Executive Officer J. Lock (1946), Chief Financial Officer
20 Royal Ten Cate

SUPERVISORY BOARD
J.C.M. Hovers (m, 1943) Chairman 1) 2)

Commenced in office: 2008
End of current term: 2012
Chairman of the Supervisory Board of C1000 B.V.
Chairman of the Supervisory Board of Plieger NV
Chairman of the Supervisory Board of Syntech Holding B.V.
Chairman of the Supervisory Board of Smeva B.V.
Chairman of the Supervisory Board of Teleconnect Inc
Member of the Supervisory Board of Randstad Groep Nederland bv From left to right: E. ten Cate, F.A. van Vught, J.C.M. Hovers,
Former Chief Executive Officer of OCE NV R. van Gelder en P.P.A.I. Deiters
Former Chief Executive Officer of Stork NV
E. ten Cate (m, 1945) 1*)
P.P.A.I. Deiters (m, 1943) Deputy Chairman 2) Commenced in office: 2004
Commenced in office: 1998 End of current term: 2012
End of current term: 2014 Director of Bank ten Cate & Cie N.V.
Member of the Supervisory Board of Tootal B.V. Chairman of the Supervisory Board of Hydratec Industries N.V. (formerly: Nyloplast N.V).
Consultant to the European Bank for Reconstruction and Development (EBRD) Chairman of the Supervisory Board of Lias Industry BV
Chairman of the Supervisory Board of Bandolera B.V. Chairman of the Supervisory Board of Rijksmuseum Twenthe
Chairman of the Supervisory Board of Fashion Linq B.V. Member of the Supervisory Board of Medisch Spectrum Twente
Former director of Berghaus International Fashion
R. van Gelder BA (m, 1945) 1)
F.A. van Vught (m, 1950) 2*) Commenced in office: 2010
Commenced in office: 2000 End of current term: 2014
End of current term: 2012 Member of the Supervisory Board of Board Heijmans N.V.
High-level policy advisor, European Commission Vice-Chairman of the Supervisory Board of SBM Offshore N.V.
Chairman of European Center for Strategic Management of Universities, Brussels Member of the Supervisory Board of Holcim Western Europe Ltd.
Supervisory Director of ROVA N.V. Member of the Board of the Association of Securities-Issuing Companies
Chairman of the Supervisory Board of Medisch Spectrum Twente Former Chief Executive Officer of Koninklijke Boskalis Westminster N.V.
Former Chairman of the Governing Board and Rector of the University of Twente Former Chief Executive Officer of Heijmans N.V.
All members of the Supervisory Board are of Dutch nationality.
1) Member of the Financial Committee
2) Member of the combined Remuneration, Selection and Appointments Committee
*) Chairman

ADVANCED ARMOUR
In September 2010 TenCate Advanced

Armour concluded a cooperation
agreement with the Danish company
ABDS Aps for the patent development
of TenCate ABDS ™, an ‘active blast
defence’ system for the protection
of people and materiel against
shrapnel and flames. This innovative
defence solution will provide life-
saving protection against a number of
improvised explosive devices, such
as roadside bombs, which form the
greatest threat in war zones.
TenCate Advanced Armour together

with the patent holders is engaged
in developing the active protection
system from scale model to a full-scale
demonstrator. The partners are actively
working together in view of the urgent
need for this innovation by end-users.
Their aim is to offer this technical
solution to the protection market in a
relatively short period of time. They
are doing this within the value chain in
close cooperation with selected Original
Equipment Manufacturers in Europe and
North America.
TenCate’s participation in this active

armour is complementary to its
current armour solutions in the vehicle
protection business.
Connected through technological innovation
Report of the Executive Board
GENERAL A number of small acquisitions were made. There are increasing
The 2010 financial year was marked by recovery. TenCate Protective opportunities in the market. TenCate is well positioned in this regard.
Fabrics USA recorded an impressive performance. Refinancing took place at the end of 2010 by means of a new
TenCate Defender™ M was once again the leading flame-resistant syndicated loan facility, providing greater flexibility for acquisitions.
material for US Army uniforms. The overall market demand for
protective fabrics was concentrated in the third and (particularly) FINANCIAL PERFORMANCE
fourth quarters. That entailed inevitable logistical challenges. NET RESULT
The success had a positive influence on other markets in which The net result rose to € 46.0 million 2010 (2009: € 23.9 million).
TenCate operates around the world. The tight financial policy conducted in 2009, with reductions in costs
and working capital, provided an excellent basis in 2010.
The sharp inventory reduction in the aviation industry came to an end These good results were due in particular to the upstream activities of
during the year. Activity in this industry has gradually picked up again TenCate Grass (synthetic turf yarns) and TenCate Protective Fabrics
and optimism with regard to the recovery has grown. USA (TenCate Defender™ M).
The promise of a strong recovery in the synthetic turf businesses COMPOSITION OF THE COMPANY
was fulfilled. Not only did revenues and results increase strongly, but One company was acquired in 2010:
further steps were also taken in the strategic developments. This ◾ AML UK Ltd, a supplier of lightweight composite armour solutions.
process initially led to additional costs. The developments in the global This represented another step in the formation of a pan-European
value chain pose a major challenge for the future. As market leader, armour organisation. AML generates revenues of € 14 million.
TenCate plays an initiating role in the process of chain integration with A 51% interest was acquired in February, which was increased to
the aim of improving the quality of synthetic turf systems. 100% in October.
◾ The interest in the TigerTurf group was increased as agreed from
Revenues on the whole showed organic growth of 10%. A restrained 49% to 80% in April 2010. TigerTurf produces and markets
economic recovery is taking place. The availability of government synthetic turf pitches in New Zealand, Australia, the United
budgets provides an important basis for TenCate. The performance Kingdom and the United States.
was also influenced by the onset of shortages and rises in the prices
of raw materials.
Good progress was made with cost control and internal operational
measures in the Dutch production companies, leading to a substantial
improvement in results. This was one of the main action points for
2010.

> REPOR T OF T HE E X ECU TIV E BOA RD
Of which Acquisition/
Analysis of 2010 results by sector 2010 2009 Difference Organic currency divestment
in millions of euros
Net sales
Advanced Textiles & Composites 448.4 397.3 +13% +6% +4% +3%
Geosynthetics & Grass 469.3 392.1 +20% +12% +5% +3%
Other activities 66.8 52.7 +27% +22% +5% –
984.5 842.1 +17% +10% +4% +3%
Operating result before amortisation

(EBITA)
Advanced Textiles & Composites 43.8 31.7 +38% +27% +6% +5%
Geosynthetics & Grass 31.4 16.8 +87% +118% +20% – 51%
Other activities 9.8 – 7.0 – – – –
85.0 41.5 +105% +109% +14% – 18%
Amortisation – 10.4 – 8.8

Operating result (EBIT) 74.6 32.7 +128%
Impairment of financial fixed assets – – 4.9

Net financial expenses – 10.0 – 7.8
Pre-tax result 64.6 20.0 +223%
Profit tax – 17.9 – 5.6
Results from ordinary operations after tax 46.7 14.4 +224%
Result from divested operations – 9.5 EBITA margins 2010 2009
Net result from associated companies – 1.3 – 0.8 Advanced Textiles & Composites 9.8% 8.0%
Minority interest 0.6 0.8 Geosynthetics & Grass 6.7% 4.3%
Net result 46.0 23.9 +92% Consolidated 8.6% 4.9%
24 Royal Ten Cate

REVENUES OPERATING INCOME BEFORE AMORTISATION
Net revenues increased in 2010 by 17%, including 10% on an organic Operating income before amortisation (EBITA) increased by 105%
basis. The stronger dollar resulted in a positive currency effect of 4%. to € 85 million.
The acquisition of AML and the majority interest in TigerTurf led to
an acquisition effect of 3% on revenues. The EBITA of the Advanced Textiles & Composites sector rose by 38%,
including 27% on an organic basis. All activities contributed.
Revenues in the Advanced Textiles & Composites sector increased ◾ Protective Fabrics Europe recovered due to a sharp reduction in
by 13%, including 6% on an organic basis. All activities contributed: costs combined with revenue growth from high-grade products;
◾ In Europe, Protective Fabrics Europe recorded growth in protective ◾ Protective Fabrics USA maintained its position as a preferred
and safety fabrics; supplier to the US Army and achieved new successes in the
◾ In the USA, Protective Fabrics USA continued its success with industrial market;
TenCate Defender™ M and developed a new product champion ◾ Aerospace & Armour Europe adjusted its costs in line with the
with TenCate Tecasafe ® Plus; temporary decline in demand;
◾ In Aerospace & Armour Europe, organic growth failed to ◾ Aerospace & Armour USA once again made a substantial
materialise in 2010, but the acquisition of AML led to a strategic contribution to the result.
and geographic strengthening of the European armour activities;
◾ Aerospace & Armour USA won a number of large armour orders In the Geosynthetics & Grass sector, EBITA increased by 87%,
and aerospace revenues picked up again. including 118% on an organic basis. The negative acquisition effect
was due to the divestment of Geofabrics Australasia in 2009 and the
Revenues in the Geosynthetics & Grass sector grew by 20%, including consolidation of TigerTurf in 2010.
12% on an organic basis, 5% due to currency effects and 3% due to ◾ In Geosynthetics, businesses in the USA in particular took
acquisition effects (consolidation of TigerTurf). advantage of government investments in infrastructure and
◾ Geosynthetics Europe recorded no growth; infrastructure increasing exports to South America. In Europe and Asia, an
investments in Europe fell back; increase in market share was accompanied by smaller margins.
◾ Geosynthetics in the USA and Asia, by contrast, benefited fully ◾ The TenCate Grass upstream segment (production of synthetic turf
from the economic upturn in 2010; yarns) achieved an exceptionally strong recovery in its result,
◾ Sales of TenCate Grass grew strongly worldwide and led to a partly due to the strong strategic position of this business;
strong recovery in results, partly as a result of the cost reductions ◾ The TenCate Grass downstream segment (production and
made in 2009. installation of synthetic turf pitches) operates in a relatively young
and still unstable market with small margins.
In the Other Activities sector (growth of 27%, including 22% organic),
TenCate Enbi also showed strong revenue growth.
PE price development in € / kg PP price development in $ / lb
1.8 0.9
1.6 0.8
1.4 0.7
1.2 0.6
1.0 0.5
0.8 0.4
0.6 0.3
0.4 0.2
JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC
◾ 2010 ◾ 2009 Annual Report 2010 25

PROTECTIVE FABRICS
In the spring of 2010 the US Marine

Corps Systems Command awarded
a major contract for flame-resistant
Inclement Weather Combat Shirts
(IWCS). The order was won by Short
Bark Inc., the company that produces
these garments. TenCate Defense &
Tactical – a business unit of TenCate
Protective Fabrics USA – supplies the
protective TenCate Defender™ M fabrics.
The garments were distributed during
the course of the year to US marines
deployed abroad, such as those in
Afghanistan, in support of Operation
Enduring Freedom.
Use of military imagery does not imply or constitute U.S. DoD endorsement.
The new garments consist of products
from the TenCate Defender™ M family,
including the first military adoption
of a laminate. In addition, the IWCS
garments are based on a new stretch
woven technology as well as two
variations of knit fabrics. The flame-
resistant IWCS was designed to provide
increased protection from wind and
rain, while offering breathable water
repellency in cold weather climates.
Since 2007 TenCate Defender™ M fabrics
have repeatedly been chosen by US
ground troops.

> REPOR T OF T HE E X ECU T IV E BOA RD
The Other Activities sector turned around from a € 7.0 million loss to a Average numbers 2010 2009
positive EBITA of € 9.8 million as a result of two factors: Netherlands 809 900 – 10%
◾ the very strong profit recovery at TenCate Enbi; Rest of Europe 682 580 +17%
◾ the introduction of a corporate branding fee (€ 8.4 million) charged United States 1,471 1,418 +4%
to the operating companies for the use of the TenCate ® brand. Middle East 317 335 – 5%
Australasia 811 833 – 3%
RAW MATERIAL COSTS 4,090 4,066 +1%
The raw material costs as a percentage of revenues, including the Year-end
change in inventories, increased from 48% to 50%. This was due to: Own personnel 4,271 3,805 +12%
◾ an increase in inventories of finished product (filling the pipeline); Temporary personnel 373 137 +172%
◾ a sharp rise in the main raw material costs, which could only be 4,644 3,942 +18%
passed on in part.
The average costs per member of personnel increased slightly from
PERSONNEL COSTS € 41,000 to € 43,000 (+ 5%). Revenues per member of personnel
Personnel costs as a percentage of revenues decreased from 20.5% increased from € 199,500 to € 225,400 (+ 13%).
to 19%. The increase in production and revenues (+ 17%) was partly
absorbed by a smaller increase in in-house personnel (costs + 6.7%) TAXES
and partly by a large number of temporary personnel. The tax rate decreased from 28.0% to 27.7%. The fiscal position has
become more balanced as the profit is spread more evenly across the
The average staff count increased by only 1%, but decreased countries. The losses in the Netherlands have been greatly reduced.
particularly in the Netherlands. The increase in Europe was due Despite that, no deferred tax receivables have been recognised with
to the acquisitions of AML UK and TigerTurf UK. The staff count effect from the third quarter of 2009.
is now increasing again, as can be seen from the final totals.

> REPOR T OF T HE E X ECU T IV E BOA RD
WORKING CAPITAL CASH FLOW AND FINANCING

After the working capital had been cut back sharply in 2009 due to the Due to the improvement in the result, the cash flow initially increased
financial crisis and to comply with the bank covenants, the scope strongly. However, the increase in working capital resulting from the
required for growth and a recovery in returns was provided in 2010. growth led to a slightly negative cash flow.
in millions of euros 2010 days 2009 days In millions of euros 2010 2009
Balance at end of previous Result after tax 45.4 23.1

year 157.0 67 262.0 90 Depreciation 34.5 33.9
Acquisitions/divestments 9.3 – 6.2 Amortisation 10.4 8.8
Organic increase/decrease 47.9 – 96.0 Other items, mainly tax accrual 24.3 7.5
Exchange rate differences 9.7 – 2.8 Cash flow before increase/reduction in working
Balance at end of year 223.9 82 157.0 67 capital 114.6 73.3
INVESTMENTS Increase/reduction in working capital – 59.5 95.5

Investments were again restrained in 2010. Interest/taxes paid – 26.0 – 24.0
Cash flow from operating activities 29.1 144.8
in millions of euros 2010 2009
Tangible fixed assets 16.2 13.1 Investments – 21.3 – 17.3

Development costs and other intangible assets 5.1 4.2 Divestments 0.9 26.4
21.3 17.3 Acquisitions/participating interests – 24.7 – 18.7
Other items – 2.0 – 0.9
The corresponding depreciation amounted to € 34.5 million Cash flow from operating and investing
(2009: € 33.9 million) and amortisation amounted to € 10.4 million activities – 18.0 134.3
(2009: € 8.8 million).
The ratio of net interest-bearing debt to EBITDA (bank definition)
The main investment projects in 2010 were: was 2.1 at the end of 2010 (covenant = maximum 3.0). Group equity
TenCate Protective Fabrics USA: air weaving machines amounted to € 435.7 million with a solvency ratio of 48.9%.
TenCate Geosynthetics USA: upgrade of non-woven line
TenCate Grass USA: capacity expansion for TenCate
XP Blade™ extrusion
Xennia Technology: various development projects
28 Royal Ten Cate

AEROSPACE COMPOSITES
In May 2010, the TenCate Advanced

Composites group in the United
States reached a long-term supply
agreement with aircraft manufacturer
Boeing. The extension of this fi ve year
contract was the culmination of many
years of design and build efforts on
compression-moulded hydraulic and
fuel line clamp assemblies for the
Boeing 787 Dreamliner. In addition
to these components, TenCate also
supplies composite materials for other
applications – including TenCate Cetex ®
thermoplastic composites for the Boeing
787 along with low dielectric composites
for the aircraft’s radome.
As a technology partner, TenCate

works together with both end-users
and suppliers in the development and
use of composite materials in new and
existing aircraft. The TenCate Advanced
Composites programme focuses on
a next generation of TenCate Cetex ®
thermoplastic composites to meet the
performance needs of the industry.
The hydraulic and fuel line assemblies

are supplied directly to both Boeing and
Tier 1 suppliers. The thermoset clamp
assemblies secure the hydraulic and fuel
lines running through the wing. These
clamp assemblies are an integral part of
the fuel and hydraulic systems. Connected through end-user marketing
VALUE CHAINS SECTOR ADVANCED TEXTILES & COMPOSITES
END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS

PROTECTIVE FABRICS PROTECTIVE FABRICS PROTECTIVE FABRICS PROTECTIVE FABRICS PROTECTIVE FABRICS
• Industrial safety
• Emergency response
(VALUE ADDED) • Garment makers
• Distributors
ISO 9001 | ISO 14001 (EMEA)
• R&D
• Spinning
• Chemical suppliers
• Polymer suppliers
• Chemicals
• Polymers
• Military & Police
• Services & Industries
RESELLERS • Weaving
• Knitting
• Fibre suppliers
PROTECTIVE FABRICS • Pre-treatment

• Dyeing
• Distributors • Finishing
• PPE-dealers • Laminating
• Laundries • Quality control
• Packaging & Logistics
• Marketing & Sales
OUTDOOR FABRICS OUTDOOR FABRICS OUTDOOR FABRICS OUTDOOR FABRICS OUTDOOR FABRICS OUTDOOR FABRICS
ISO 9001 | ISO 14001 (EMEA)
• Leisure • Distributors • Confectioners • R&D • Chemical suppliers • Chemicals

• Home & Terrace • Dealers • Spinning • Polymer suppliers • Polymers
• Emergency response • Weaving • Fibre suppliers
• Refugee response • Pre-treatment • Fabric suppliers
• Military • Dyeing
• Finishing
• Quality control

AEROSPACE COMPOSITES AEROSPACE COMPOSITES AEROSPACE COMPOSITES AEROSPACE COMPOSITES AEROSPACE COMPOSITES
• Aviation • Original Equipment • R&D • Chemical suppliers • Chemicals
- Interior Manufacturers (OEM) • Weaving • Polymer suppliers • Polymers
ISO 9001 | AS 9100
- Exterior - Prime contractors • Pre-treatment • Fibre suppliers • Glass

• Radomes & Antennas • Tier 1 & Tier 2 • Chemical finishing • Fabric suppliers
• Space - Suppliers of integrated • Calandering
• Military structures and assemblies • Impregnation
• Tier 3 • Consolidation
- Subcontracted part • Moulding
manufacturers • Quality control
INDUSTRIAL COMPOSITES INDUSTRIAL COMPOSITES INDUSTRIAL COMPOSITES INDUSTRIAL COMPOSITES INDUSTRIAL COMPOSITES
• Automotive • Original Equipment • R&D • Chemical suppliers • Chemicals
• Oil & Gas Manufacturers (OEM) • Weaving • Polymer suppliers • Polymers
• Commercial & Industrial • Pre-treatment • Fibre suppliers • Glass
• Sports & Leisure • Chemical finishing • Fabric suppliers
ISO 9001
• Medical • Calandering
• Impregnation
• Consolidation
• Moulding
• Quality control
ADVANCED ARMOUR ADVANCED ARMOUR ADVANCED ARMOUR ADVANCED ARMOUR ADVANCED ARMOUR
• Military • Original Equipment • R&D • Chemical suppliers • Chemicals
- Land forces Manufacturers (OEM) • Designing & Testing • Polymer suppliers • Polymers
- Naval forces - Vehicle manufacturers • Production & Construction • Fibre suppliers • Ceramics
- Air forces - Shipyards - Spall-liners • Fabric suppliers • Metals
- Special forces - Aircraft manufacturers - Add-on-Armour • Ceramic suppliers • Glass
ISO 9001
• Law enforcement - Body armour - Structural composites • Ballistic metal supplliers

• Personal protection manufacturers - Body armour inserts
• Cash-in-transit - Helmet manufacturers - Ready to fit solutions
- Cash-in-transit vehicle - Survivability packages
converters • Quality control
ADVANCED TEXTILES & COMPOSITES
KEY FIGURES
Advanced Textiles & Composites 2010 2009 2008 2007 2006
in millions of euros unless stated otherwise
Revenues 448.4 397.3 481.0 350.3 279.7
Operating result before amortisation (EBITA) 43.8 31.7 61.5 40.2 21.3
EBITA margin (%) 9.8 8.0 12.8 11.5 7.6
Operating result (EBIT) 38.6 27.0 52.9 38.7 20.9
Investments 4.5 4.2 11.7 17.0 11.7
Depreciation and amortisation 15.2 14.2 17.6 10.8 6.1
Net capital employed 281.7 234.0 286.4 197.6 124.9
Staff years at year-end 1.519 1.340 1.651 1.238 1.203
EBITA as percentage of average net capital employed 16.7 12.0 22.9 22.6 17.1
ACTIVITIES REVENUES AND RESULTS

The Advanced Textiles & Composites sector consists of the following The Advanced Textiles & Composites sector recorded a 13% rise in
market groups revenues in 2010 to € 448.4 million (2009: € 397.3 million). The organic
◾ TenCate Protective Fabrics and TenCate Outdoor Fabrics growth amounted to 6%. The currency effect was + 4%. Acquisitions
High-grade protective and safety fabrics and multi-risk solutions and divestments resulted in a 3% rise in revenues.
for the defence and professional wear market, and for the high-
grade segment of the outdoor market. The increase in revenues resulted mainly from the positive
◾ TenCate Space & Aerospace Composites developments in the TenCate Protective Fabrics market group and was
TenCate Industrial Composites and due in particular to the higher sales of flame-resistant fabrics for US
TenCate Advanced Armour Army uniforms (TenCate Defender™ M). New products such as TenCate
Composites and systems for the space and aerospace market and TecaSafe™ Plus also led to an increase in sales in the industrial market
special industrial applications and for personal protection and for safety fabrics.
vehicle armour (Armour market group), including composite
materials and compounds with bullet-, fragment-, knife- and
needle-proof characteristics.
PROTECTIVE FABRICS BUSINESS MODEL ADVANCED COMPOSITES BUSINESS MODEL

END-USER MARKETING INNOVATION END-USER MARKETING INNOVATION
End-user marketing through TenCate Inkjet technology as a production process Further development of OEM relations AMDS™ active blast countermeasure
Defense & Tactical business unit Effective use of internal and external IP (solutions) system
Brand awareness combined with Internal combination of technological Alliances with local partners (armour) (Open) innovation (TAPAS, TPRC, AMRC)
end-user risk awareness (what does knowledge / social innovation International Advisory Board to support Qualifications in new programmes
TenCate offer as added value) Executive Board
Total cost of ownership; cost-effective
solutions
Strengthening of the portfolio (TenCate Internal benchmarking Development of applications outside Internal benchmarking
Tecasafe™ Plus) Further growth in operating results (NL) traditional market areas Exploiting economies of scale through
Product development based on inkjet Outsourcing potential Wide deployment of unidirectional tape volume growth
technology technology Outsourcing potential
Fibre blends Business development projects
Alliances with partners (suppliers, make (development of value chain)
or buy)
PRODUCT DIFFERENTIATION COST LEADERSHIP PRODUCT DIFFERENTIATION COST LEADERSHIP

> REPOR T OF T HE E X ECU TIV E BOA RD > Advanced Textiles & Composites
There were also positive developments in the TenCate Space & The market for professional wear and work wear is tightly regulated,
Aerospace Composites and TenCate Advanced Armour market groups. with governments enacting legislation specifying safety standards in
Demand for aerospace composites (Airbus, Boeing) grew positively, certain risk areas. TenCate customers are ready-to-wear clothing
particularly from the second half. On the other hand, the armour producers and industrial clothing laundries offering a total range for
composites market in Europe in particular was characterised by end-users. TenCate focuses on industrial markets, firefighting and
budgetary tightness among national governments, which led to delays emergency services as well as the healthcare sector. New products,
in projects. The project-related nature of the revenues is an inherent such as TenCate Tecasafe™ Plus for the American market in particular,
feature of this market. are playing an important role in the continuing market development.
The concepts developed by TenCate for this market are very promising,
The operating result before amortisation of intangible fixed assets as the products are well positioned in terms of both price and
rose by 27% on an organic basis to € 43.8 million (2009: € 31.7 million). performance.
The currency effect was + 6%. The EBITA margin rose to 9.8%
(2009: 8.0%). The profit recovery in this sector was due particularly Defence applications are a relatively young and highly successful
to a recovery in the results of the Dutch TenCate businesses, in both development. TenCate Defender™ is considered to be the US standard
safety fabrics and composites, and the strong revenue growth of for uniforms with flame-resistant protection. As a result, this product
TenCate Defender™ M. The growth in demand for raw materials, is one of the major pillars underpinning TenCate’s strong growth in the
including aramid and paramid (synthetic fibres) and carbon fibres, defence markets. As part of TenCate Protective Fabrics, the TenCate
nevertheless outstripped the supply, which somewhat inhibited Defense & Tactical business unit on the one hand responds to the
the revenue and profit growth. principle of end-user marketing with the TenCate Defender™ platform
(the development of specifications in close co-operation with various
TENCATE PROTECTIVE FABRICS end-users) and on the other hand serves as a vehicle for the
AND TENCATE OUTDOOR FABRICS development of a worldwide sales strategy. The strategy with regard
MARKET POSITION AND STRATEGY to TenCate Defender™ M is focused on expansion both in geographic
TenCate Protective Fabrics is the market leader in America and Europe terms and with regard to other defence applications (product
in the field of protective fabrics. The products offer protection against differentiation).
risks in the workplace, for example from chemicals, fire and static
electricity. The American defence market is of great importance in The TenCate strategy is focused on the use of end-user marketing to
view of its scale. TenCate has acquired leading positions in various make target groups aware of protection concepts and multi-risk
segments of this market, for which specific concepts have been or solutions, thereby increasing TenCate’s involvement in defining
are being developed. TenCate Defender™ M materials are the most specifications in tenders. That is being achieved successfully among
important of these. customers in areas such as the petrochemical industry. TenCate’s
positioning is supported by an industrial brand policy based mainly on
TenCate Tecashield® for riot shields

The shields carried by around 1,500 members of the Dutch Mobile Unit for Riot Control were fitted with new black covers and
armrests based on TenCate Tecashield® in 2010. During the testing phase, the material scored highly on aspects such as wear,
flame and chemical resistance. TenCate Tecashield® gives the shield extra protection and makes it easier to carry. The order
resulted partly from a targeted end-user approach. TenCate familiarises the market with the materials and solutions that it offers
and the latest developments. In that way it seeks to influence the specifications, quality criteria and functional characteristics
demanded by end-users.
32 Royal Ten Cate

quality and functionality in the field of high-grade protection. of 18 months. TenCate Defense & Tactical is supplying TenCate
TenCate supplies unique solution-focused concepts (systems). Defender™ M fabrics for this order. The clothing is being distributed to
These have proved successful in use with the US Army. US Marines stationed abroad in countries such as Afghanistan.
The new IWCS equipment comprises a number of products from the
TenCate has a broad technological base and access to the worldwide TenCate Defender™ M portfolio, including the first military application
commodities market. This is the result of its long-term focus on this of a TenCate Defender™ M laminate. This IWCS equipment is also
niche market and its scale as a global player. In addition to activities based on new stretch-fabric technology and two different webs.
and strong market positions in the US and Europe, TenCate formed a The flame-resistant IWCS was designed in order to provide additional
joint venture in Thailand (TenCate – Union Protective Fabrics Asia) for protection against wind and rain in cold weather, while the material is
the production of safety fabrics for the Asian market. This is a water-repellent and has air-permeable characteristics.
strategic position for the further development of this region.
A major order for TenCate Defender™ M was also received from the
GENERAL PERFORMANCE Swedish producer Gulins Business Design AB. This represents the first
A good performance was recorded in the United States and Europe in substantial sale outside the United States. It involves supplying the
2010. The businesses operating the field of protective industrial fabrics Norwegian defence logistics organisation (FLO) with inherently flame-
(particularly TenCate Tecasafe™ Plus) and outdoor fabrics recovered resistant TenCate Defender™ M fabric in the new dark-blue colour.
compared to 2009. In the United States, the businesses involved in The fabric will be used for over 25,000 items of clothing to protect
fire-resistant fabrics for US Army uniforms (particularly TenCate Norwegian marines. This order is the result of ongoing development
Defender™ M), continued to grow strongly, mainly from the end of the based on customer-specific requirements. Drawing on patented
third quarter. The development of new products based on both the technology and the success of TenCate Defender™ M developed by
TenCate Defender™ M (defence market) and Tecasafe™ Plus (industrial TenCate Protective Fabrics in North America, the research &
market) platform was continued on the basis of international development team at TenCate Protective Fabrics in Nijverdal (the
co-operation and exchanges of knowledge within the group. Netherlands) has created a new composition, as a result of which the
protective fabric is now also available in dark blue and black. TenCate
TenCate applied a process of product differentiation to develop a Defender™ M was already available in various camouflage patterns
product portfolio for TenCate Defender™ M with a wide range of and single colours for the uniforms of land and air forces. Now it can
potential applications for air, land and naval forces. As a result, also be used for other markets, such as the navy and the police
TenCate again obtained qualification for new projects with TenCate (including riot police and special squads), which mainly operate in black
Defender™ M variants. In the first half of the year, for example, or blue. The fabric for this order is being produced at Nijverdal.
a contract was awarded to Short Bark Inc. in Venore (Tennessee, USA)
by the Systems Command of the US Marine Corps to supply 180,000
flame-resistant Inclement Weather Combat Shirts (IWCS) over a period

PROTECTIVE FABRICS
Thanks to patented technology and

the success of TenCate Defender™ M,
developed by TenCate Protective
Fabrics in the US, the R&D team of
TenCate Protective Fabrics in the
Netherlands developed a new blend. As
a result this protective fabric has also
become available in the colours dark
blue and black. TenCate Defender™ M
was already being supplied in a variety
of camouflage patterns and solid colours
for the uniforms of air and land forces.
With this newly developed blend, the

fabric has been used since mid-2010 in
other markets, such as marine corps and
police forces, including riot police and
special squads, who mainly wear dark
colours on operations. The Norwegian
FLO (Defence Logistics Organization)
ordered TenCate Defender™ M fabric
in the new colour dark navy to protect
their marines. This order was the result
of ongoing product development based
on specific customer requirements. The
unique properties of the fabric include
protection against heat and flame,
anti-static properties when there is a
risk of explosion, wearing comfort and
freedom of movement. The fabric has
durable colour performance and is cool,
breathable and moisture-regulating
thanks to Lenzing ® FR fibres.
> REPOR T OF T HE E X ECU T IV E BOA RD > Advanced Textiles & Composites
Independent tests have shown that the TenCate Defender™ M product Research is being conducted into the use of TenCate Defender™ M
portfolio offers the best price-performance ratio. This material is used in firefighting clothing. This product has patented, inherently flame-
in various components of the standard personal equipment for the US resistant characteristics which will not wash out or wear and is ideal
Army. The choice is based on aspects such as wearing comfort, for use as a thermal lining for protective clothing worn by firefighters.
optimum protection and price-quality ratio. The protection of military
personnel remains an important focus of innovation and growth. Over TenCate saw a recovery of sales in the industrial market in both in the
half of the sales recorded in protective fabrics in the United States are United States and Europe in 2010. This effect was evident particularly
related to defence applications. TenCate Defender™ M accounts for in Europe, where the industrial market constitutes the main segment.
the bulk of such sales. The reorganisation of the Dutch protective fabrics businesses proved
It was therefore positive to learn at the beginning of 2011 that the effective. The expansion of the product portfolio, which involved in
existing exemption under the US Berry Amendment on the import of particular optimising characteristics such as wearing comfort and
flame-resistant rayon fibres into the United States will be extended protection, led to an increased order intake. In the industrial market in
to 2015. It was originally intended to expire in 2013. The US Berry the US, TenCate is gaining substantial market share with flame-
Amendment requires that products purchased by the US Department of resistant protection based on the TenCate Tecasafe™ Plus developed
Defense, including textiles, be produced in the United States, and that for this market. This product has achieved strong sales growth. It is a
requirement extends to raw materials for fibres. The TenCate good example of a successful combination of American and European
Defender™ M product portfolio of TenCate Protective Fabrics USA in product knowledge. TenCate achieved success with this product among
Union City (Georgia, USA) uses a fibre mix that includes FR rayon fibre large companies in the oil industry in both the American and Asian
from Lenzing AG in Austria. The flame-resistant fibres produced with it markets. These market positions will be further expanded in 2011.
for the US Army uniforms are nevertheless manufactured entirely in The growth in the production of protective fabrics in Thailand is being
the United States. TenCate Protective Fabrics USA has thereby created positively impacted by the above developments.
around 10,000 US jobs. A large number of US companies are involved.
The import exemption underlines this fibre’s strategic importance in TenCate Outdoor Fabrics introduced an inherently flame-resistant
meeting the demand for high-quality flame-resistant fabrics for US fabric for group tents in 2010, under the name of TenCate
uniforms, so that US military personnel can be afforded optimum Campshield™. This is a follow-up to the success of flame-resistant
protection. The exemption is also important for the US textile industry, fabrics in adjacent markets. The tent fabric is resistant to scorching,
which must be able to supply substantial volumes with a high degree annealing and sparking. In addition to scouting, international aid
of reliability. organisations and tour operators are interested in TenCate
The US firefighting market is the second important market. This market Campshield™.
was sluggish due to budget cuts in lower public authorities. TenCate is
nevertheless in an excellent position to respond to market demand,
having regard to the increasing demand for cheaper solutions.

TECHNOLOGICAL DEVELOPMENTS TENCATE SPACE & AEROSPACE COMPOSITES

In 2010 Xennia Technology successfully manufactured trial AND TENCATE ADVANCED ARMOUR
manufactured on its own machine for digital textile finishing. MARKET POSITION AND STRATEGY
This is an innovative way of finishing or printing technical textiles TenCate is one of the leading companies in the field of armour
to a very high standard. It is used to produce new products with new materials (armour composites) and space and aerospace composites.
functionalities. Substantial savings are also possible in water and These are composite materials and compounds which replace
energy consumption and the use of chemicals. This digital inkjet traditional materials such as steel and aluminium, make a major
technology strengthens the foundations for future – sustainable – contribution to weight saving and have better functional
production. The industrial implementation process will begin in characteristics. The strategy is focused mainly on securing a leading
the near future. technological position, developing material science, knowledge of
production processes in the industrial chain and direct access to end-
OUTLOOK markets and OEMs, partly on the basis of integrated concepts and
The outlook for 2011 is positive. In the United States, healthy growth systems. Qualifications are crucially important in order to operate
in the defence market is expected through to the third quarter. in future programmes in these markets.
A substantial increase in orders is also expected for industrial
applications (TenCate Tecasafe™ Plus) . A positive trend in results The largest proportion of sales and composites is related to ballistic
is expected in Europe following the earlier streamlining of the protection (armour composites). TenCate Advanced Armour is the
organisation in the Netherlands and the improvement in market global market leader in (complex) concepts for ballistic protection of
conditions. Consequently, and on the basis of further market and personnel and vehicles. These increasingly have to be supplied on an
product development, including in Asia and South America, increasing integrated basis, so in-house design and production facilities are
growth is expected in protective fabrics worldwide. TenCate has an required. TenCate therefore operates from sites in the United States,
excellent basis for such growth. the United Kingdom, France, the Netherlands, Denmark and India.
A wide geographic presence is required, together with an extensive,
innovative and constantly developing portfolio (Active Armour
Systems). The American market is by far the largest. In Europe,
the United Kingdom is an important market.
Customers who are responding to rising threat levels include

particularly large industrial conglomerates in the defence industry,
producers of trucks, aircraft, helicopters etc. and the related suppliers.
Governments (defence ministries) determine the specifications.
TenCate operates as a single group for the exchange of knowledge
TenCate Aerospace Composites supplies prepreg systems for heat shield

TenCate Aerospace Composites USA is partnering with Lockheed Martin in the development of prepreg systems as a basis for
the heat shield on the Orion spacecraft. TenCate has already been involved for some time in the development of materials and
components which resist exceptionally high temperatures and the erosive effect of spaceflight, for example. A new resin system
has been developed for this programme. This system opens the way to easier and more efficient production techniques in
comparison with other high-temperature resin systems. It can be used in numerous commercial applications, including aircraft,
launch vehicles and aerodynamic cab-top fairings for trucks.
36 Royal Ten Cate

and solutions. The company occupies an important position as a (fibre-) business jets, as well as in military aviation. The main civil aviation
independent producer of composites and processes a range of fibres customers are Airbus and Boeing and their direct suppliers. These two
including aramid, glass, carbon and HPPE for third parties. TenCate producers have defined the basis on which the market is being further
offers a wide range of products, systems and solutions in this market. developed. The TenCate Cetex ® material now occupies a strong
position. Among other products, the leading edge of the wing (J nose)
An important aspect of these (defence) markets is the project-oriented and the engine intakes are manufactured from this lightweight and
character. This means that TenCate companies must have a flexible strong (noise-reducing) material. TenCate Cetex ® is also being used in
cost structure. The global presence, the breadth of the product the Boeing 787. In many cases, for reasons of confidentiality, it is not
portfolio and the conceptual approach are important strengths of the possible to provide specific information on these components
organisation. These are increasingly being exploited both within the manufactured with TenCate materials.
group and with other TenCate market groups. This will give further
significance to the system approach and achieve market synergy. TenCate was involved as a technology partner in the development of
For example, there will increasingly be joint presentations at trade materials and their application in the design of new aircraft. TenCate
fairs and conferences as well as joint marketing, strengthening the has taken an important step with the development of unidirectional
TenCate proposition in the defence market. This concerns the general (UD) tape technology for the aerospace sector. This UD technology is
protection of personnel and materiel based on fabrics and armour complementary to existing production processes for composites.
composites. A conceptual approach to the theme of protection is more This has further strengthened the position as a development partner
effective than a more product-focused, individual approach. and supplier for the entire aviation sector.
In the aviation market, the material is used in interior and structural GENERAL PERFORMANCE OF TENCATE SPACE & AEROSPACE
components. The scope of application of aerospace composites is still COMPOSITES
fairly limited overall, but is growing considerably. The new generations The market for aerospace composites remained very sluggish in the
of aircraft are providing a substantial impetus for growth. As a result first half of 2010. This was due to continuing destocking in the overall
of the underlying economic conditions and technical problems among value chain as a result of further delays in the Airbus A380 and Boeing
OEM, leading to delays in programmes, the current production level is 787 programmes. The market situation in the second half of the
lower than originally planned. This was mainly the case of the Airbus reporting year showed a clear improvement.
A380 and the Boeing 787. This market has enormous potential for
TenCate. TenCate Advanced Composites in the United States concluded a long-
term supply contract with Boeing in the second quarter. The extension
In the United States, TenCate Space Composites has a leading role in of this originally five-year contract was the result of many years of
composites for satellite programmes. In the aviation industry, TenCate effort in the design and production of pressure-cast mounting clips for
Aerospace Composites operates in the field of civil aviation and the hydraulic and fuel pipes in the Boeing 787 Dreamliner. In addition

ADVANCED ARMOUR
In the spring of 2010 TenCate Advanced

Armour in both Europe and the United
States received large orders for the
delivery of antiballistic composite
materials. The delivery of these orders,
which are specifically focused on
protecting both people and materiel,
will extend over a number of years.
TenCate Advanced Armour is involved
in the design and production and in the
integration of these armour systems into
vehicles and helicopters.
The orders are from the European

company Eurocopter and several
American customers, such as General
Dynamics Land Systems and BAE
Systems. A number of orders were
placed directly with TenCate by the
American military. By focusing on
broadening its product portfolio,
TenCate Advanced Armor USA now has
a balanced and diversified sales base.
TenCate Advanced Armour EMEA also
occupies an excellent position for the
future. In 2010 work started on building a
new factory in France for the production
of protective material for helicopters.

to these components, TenCate supplies composite materials – During the reporting year TenCate made good progress with the further
including TenCate Cetex ® – for other applications on the Boeing 787. development and market acceptance of unidirectional (UD) tape
The mounting clips are supplied directly both to Boeing and to its technology for various sectors, including aerospace, oil and gas. This
suppliers. The thermoset clips are used to secure the hydraulic and fuel UD technology is complementary to existing production processes for
pipes which pass through the wing. The mounting clips are an integral composites. It strengthens the position as a development partner and
part of the fuel and hydraulic system of the Boeing 787 Dreamliner. supplier to the entire aircraft sector.
This programme is an illustration of how TenCate offers its customers
profitable solutions by combining design and manufacturing. TenCate Advanced Composites USA has entered into an agreement
with 3M to supply TenCate with 3M™ matrix resin for customised
At the beginning of November, TenCate Advanced Composites Europe TenCate prepreg products. The innovative 3M technology is being
entered into an agreement to supply TenCate Cetex ® carbon laminates introduced In various new markets. As a leading developer and
for use in the new Airbus A350 XWB and other EADS applications. producer of thermohardening and thermoplastic prepregs, TenCate
Under this agreement, TenCate Cetex ® will be supplied to various supplies high-tech materials to various markets. These include
Tier 1 and Tier 2 partners of Airbus producing fuselage shells and aerospace, shipping, infrastructure and oil and gas extraction. As a
components for the Airbus A350 XWB. The TenCate Cetex ® material – technology enabler, 3M looks for best-in-class partners who recognise
which is characterised by high strength and low weight – will be used the value of innovative products and ideas and jointly bring them to
in the reinforcing structure for the fuselage of the Airbus A350 XWB. new markets. The agreement centres on 3M™ matrix resin, a patented
The thermoplastic material is already being used in existing Airbus resin technology which can be used – in combination with the design
programmes, including the Airbus A380. The fabric-reinforced and product knowledge – to produce stronger, lighter and more
thermoplastic composites are used in many components in the sustainable composites. As a result of 3M’s patented resin technology,
secondary structure and for applications inside aircraft. The supply of manufacturers no longer need to compromise between toughness /
TenCate Cetex ® material for the Airbus A350 XWB programme once flexibility and rigidity / hardness. The resin improves the performance
again underlines the importance of light, strong and mouldable characteristics of both aspects.
thermoplastic material. One of the advantages of using thermoplastic
composites is the possibility of large-volume series production. The aerospace sector (including communication and navigation
satellites) in the United States, Europe and Asia continued to show
steady growth for composite materials. Growth in the military aviation
industry stagnated.

TenCate once again obtained new qualifications in a number of areas particularly in the second half of the year. This was due to the adoption
in which composites can be used, such as the aircraft industry, of a different, more end-user focused approach in the sales efforts.
satellite construction and the energy sector. Obtaining these The expectations for the market as a whole remain structurally
qualifications, in which TenCate continues to invest, is important positive.
for future sales.
An important growth market is unmanned vehicles (UAVs) for military TenCate substantially strengthened its market position during the
applications and the satellite industry. These market positions were reporting year with the acquisition of the leading AML UK Ltd armour
considerably strengthened in 2010. As a result, the number of business in Swindon (United Kingdom). This acquisition gives TenCate
applications of TenCate composites is set to increase further. In the complete access to the UK market for lightweight composite armour
longer term, the trend towards lightweight composites materials solutions. TenCate already designs and produces a series of armour
remains positive, in view of the superior characteristics. The materials for vehicle protection (including aircraft and navy ships) for
development co-operation in the Dutch aviation cluster with both the British Ministry of Defence and associated contractors. Major
Airbus (TAPAS consortium) and Boeing (TPRC) anticipates this trend. modernisation and expansion programmes are planned in the United
These joint ventures underline the importance of the joint aim of Kingdom. This acquisition enables TenCate to expand its market and
achieving strong growth in the share of composites used in aviation, technology position, particularly in the field of armour products for
partly by improving processing technologies and widening applications. vehicles, aircraft and ships. Partly due to complementarity, the
TenCate is focusing in particular on special (industrial) applications of acquisition is also an important next step towards a pan-European
composites, for example in the automotive industry (TenCate Industrial armour organisation. Together with TenCate Aerospace Composites
Composites). This will ultimately be the third important market and TenCate Advanced Armour in the United States, this organisation
segment for TenCate, alongside Space & Aerospace Composites has an extensive portfolio of technologies and solutions for the global
and Advanced Armour. market.
GENERAL PERFORMANCE OF TENCATE ADVANCED ARMOUR At the beginning of 2010, TenCate received substantial (confidential)
In 2010, a trend was evident in Europe whereby the market which was orders to supply antiballistic composites. These defence orders –
previously dominated by substantial, urgent orders is developing more which are due to be delivered over a number of years – are worth at
towards new system programmes. These usually have a turnaround least € 40 million. Thanks to these new orders, TenCate Advanced
time of several years, as in the case of the major Eurocopter project. Armour will be involved for a number of years in the design, production
The contract for this will contribute to sales growth from 2011. and integration of armour systems for vehicle protection programmes.
In organic terms, there was a small decrease in sales in Europe,
particularly as a result of budget restrictions among national
governments. In the United States, sales of armour composites and
systems for vehicles and personal protection improved strongly,
TenCate Liba® passes live ammunition test with flying colours

Military personnel in Iraq and Afghanistan are exposed to various threats, such as roadside bombs and portable anti-tank grenade
launchers. One way to protect them is to use solutions based on TenCate Liba®. In mid-October 2010, TenCate Advanced Armour
and Dynamit Nobel Defence invited customers to observe the antiballistic characteristics offered by this type of solution. TenCate
Liba® is a patented protection solution based on ceramic pellets embedded in an elastic polymer matrix. It is considerably lighter
than conventional steel. It was subjected to heavy gunfire during the demonstration days and passed the test with flying colours.
40 Royal Ten Cate

In the first quarter TenCate Advanced Armour USA also won contracts TenCate Advanced Armour Denmark signed a co-operation agreement
for vehicle armour and personal protection worth around US $ 25 in 2010 for the patented development of the ABDS™ active blast
million, with an option of additional sales worth US $ 10 million. countermeasure system and for the right to acquire a majority holding
The orders came from various US producers of army vehicles, such as in a company to be set up to market this concept. The concept offers
General Dynamics Land Systems and BAE Systems. These also include better protection of army vehicles against roadside bombs and has
orders placed directly with TenCate by the US Army. Due to the focus considerable market potential. A demonstrator was built at the end of
on expanding the current product lines and customer portfolio, TenCate 2010, which successfully demonstrated the principle in operation.
Advanced Armour USA now has a more balanced and more diversified The patent is confidential.
sales base than in the previous years. The market group has positioned
itself well for the future.
TenCate Advanced Armour USA maintains close relationships with

various army vehicle OEMs and is closely involved in a wide range of
high-profile vehicle programmes, each with unique ballistic protection
solutions. Examples are armoured Humvees, Stryker, the Family of
Medium Tactical Vehicle (FMTV) and the Mine Resistant Ambush
Protected Vehicle (MRAP) and Small Arms Protective Insert (SAPI)
projects. This market group is also achieving success in the supply of
armour composites such as the unidirectionally reinforced Aramid
Shield product line. This resulted in additional contracts for vehicle
armour worth US $ 18.5 million in the third quarter. That consolidated
the strong market position for vehicle armour in the United States. The
materials were supplied before the end of 2010 to two major producers
of military vehicles and to the US Army. The armour for the US Army is
based on TenCate advanced armour composite technology and offers
the lightest, most efficient armour possible for these highly demanding
applications.

OUTLOOK FOR TENCATE SPACE & AEROSPACE COMPOSITES

AND TENCATE ADVANCED ARMOUR
In the advanced armour market the timing of potential sales remains
uncertain, since it is dependent on larger defence orders and projects
and the speed at which they are awarded. In Europe, the market
is increasingly being developed in the direction of new system
programmes. TenCate has already secured strong positions in a number
of programmes. These are making a positive contribution to the trend
in revenues and profit. National government budgets are liable to delay
or restrict developments. The Eurocopter project is set to become
an increasingly important part of the European activities.
The expectations for the American market remain structurally

positive, partly in view of the growing threat levels. These are
placing increasing demands on vehicle and personal protection
and consequently on innovative systems and solutions.
The structural demand for TenCate composites from in the civil

aviation industry is positive. This is partly a result of the qualifications
obtained by the company. The market is expected to recover further
in the current year. Uncertainty nevertheless remains with regard to
economic developments and potential financing problems facing
airlines acquiring new aircraft. The expectations for the military
aviation market and for satellite programmes remain positive.
42 Royal Ten Cate

PROTECTIVE FABRICS
Just two years after it was launched

in North America, TenCate Protective
Fabrics passed the milestone of one
million yards of flame-retardant fabric
for protective work clothing in February
2010. High-tech material from the
TenCate Tecasafe ® Plus brand was
originally developed in Europe and then
adapted to customer requirements in
the American market, thus enabling
this end-user approach to become a
success. During the rest of the year too
TenCate Protective Fabrics NA did an
excellent job in protecting employees,
as safety on the work fl oor comes to
occupy an ever more important place on
the international agenda, and not just in
Europe and North America, but in Asia
too.
Wearers of work clothing need reliable

protection from fire hazards caused
by static electricity, welding splashes
or electric arcs and at the same time
this clothing must be both comfortable
and durable. TenCate Tecasafe ® Plus
forms part of an extensive range of
flame-resistant fabrics from TenCate
Protective Fabrics NA for industrial
applications, contingency planning and
other uses. It is available in a wide range
of colours, including yellow to ensure
that road workers are always highly
visible. Connected through end-user marketing
VALUE CHAINS SECTOR GEOSYNTHETICS & GRASS

GEOSYNTHETICS GEOSYNTHETICS GEOSYNTHETICS GEOSYNTHETICS GEOSYNTHETICS
• Civil work
• Water & Environment
(VALUE ADDED) • Distributors
• Contractors
• R&D
• Weaving
• Chemicals
• Polymers
• Industrial
• Oil & Gas
RESELLERS • Retailers • Non-woven • Fabric suppliers
ISO 9001
• Knitting • Yarn suppliers

• Renewable energy GEOSYNTHETICS • Grids
• Pre-treatment
• Dealers • Finishing
• Subcontractors • Quality control
INDUSTRIAL FABRICS INDUSTRIAL FABRICS INDUSTRIAL FABRICS INDUSTRIAL FABRICS INDUSTRIAL FABRICS INDUSTRIAL FABRICS
• Agricultural • Dealers • Agricultural cooperations • R&D • Chemical suppliers • Chemicals
• Industrial • Subcontractors • Departments of Defence • Weaving • Polymer suppliers • Polymers
• Military • Converters • Non-woven • Fabric suppliers
ISO 9001
• Pre-treatment • Yarn suppliers

• Finishing
• Quality control

GRASS GRASS GRASS GRASS GRASS
• Soccer
• American Football
(VALUE ADDED) • Tufters
• Weavers
• R&D
• Spinning yarns
• Chemicals
• Polymers
• Hockey RESELLERS • Weaving backing
ISO 9001
• Tennis • Finishing yarns

• Golf GRASS • Finishing backing
• Padel • Quality control
• Multisport • Installers • Packaging & Logistics
• Landscaping • Marketing organisations • Marketing & Sales
44 Royal Ten Cate

GEOSYNTHETICS & GRASS
KEY FIGURES
Geosynthetics & Grass 2010 2009 2008 2007 2006
Revenues 469.3 392.1 497.8 468.3 397.5
Operating result before amortisation (EBITA) 31.4 16.8 37.8 30.4 25.6
EBITA margin (%) 6.7 4.3 7.6 6.5 6.4
Operating result (EBIT) 27.7 13.8 34.8 28.3 25.5
Investments 9.9 9.0 29.0 44.9 28.9
Net capital employed 380.8 332.7 427.4 354.8 215.8
Staff years at year-end 2,128 1,795 2,129 2,053 1,633
EBITA as percentage of average net capital employed 8.2 4.1 8.8 8.9 12.9
ACTIVITIES (upstream activities), the TenCate Grass group includes a growing

The Geosynthetics & Grass sector consists of the following market proportion of system development and marketing businesses
groups: (downstream activities).
◾ TenCate Geosynthetics and TenCate Industrial Fabrics
Fabrics, grids and nonwovens for solutions and applications in REVENUES AND RESULTS
structures for civil engineering projects, the construction industry The Geosynthetics & Grass sector showed a major improvement in its
and the environmental market, as well as industrial fabrics for results. Revenues in both markets rose by a total of 20% to € 469.3
various applications, such as agribusiness, sport and recreation. million (2009: € 392.1 million), close to the level achieved in the
◾ TenCate Grass outstanding 2008 financial year. On an organic basis, the growth
Synthetic turf components and systems, including (integrated) amounted to 12%. The currency effect was + 5%. Acquisitions resulted
synthetic grass fibres and backing, for applications such as in a 3% increase in sales. Partly as a result of the consolidation of
football, hockey and other sports pitches, as well as landscaping. downstream activities, the revenues of TenCate Grass grew faster in
In addition to the production of fibres and carpet backing relative terms than those of TenCate Geosynthetics.
GEOSYNTHETICS BUSINESS MODEL GRASS BUSINESS MODEL

END-USER MARKETING INNOVATION END-USER MARKETING INNOVATION
Strengthening of position in project New functionalities (sensoring) Direct access to market Fourth-generation developments
market through alliances Biopolymers System approach, total cost of ownership Biomechanical characteristics
Local co-operation with partners Filtration solutions Focus on quality improvement and Guarantee concept
(emerging markets) environmental aspects
‘Green building' positioning Increase in knowledge level among users
(associations)
Claim system ownership jointly Internal benchmarking

Rationalisation of product portfolio Internal benchmarking with partners (control of quality and Optimisation of Dutch production results
Focus on infrastructure and environment Lean & mean sales organisation (EU) performance) Constant focus on cost reduction
Existing products / new markets Reorganisation / relocation of Dutch Outperformance in terms of wear combined with qualitative out-
(defence) production resistance (guarantees at component performance (product champions)
Link to synthetic turf products level)
Sustainable concepts
PRODUCT DIFFERENTIATION COST LEADERSHIP PRODUCT DIFFERENTIATION COST LEADERSHIP

> REPOR T OF T HE E X ECU T IV E BOA RD > Geosynthetics & Grass
The markets for geosynthetics in Asia and the United States, the main TENCATE GEOSYNTHETICS AND
geographic markets, fared well. In the United States, this was partly TENCATE INDUSTRIAL FABRICS
due to an increase in the number of infrastructure projects. However, MARKET POSITION AND STRATEGY
no structural recovery is yet evident in either market. Growth TenCate is the world’s largest producer of high-strength geosynthetics
opportunities are also being exploited in South America and Asia, (fabrics and non-wovens) for infrastructure, the construction industry
where there are increasing commercial activities in the infrastructure and the environment. The portfolio also comprises materials (industrial
project and environmental market. The synthetic turf businesses also fabrics) for applications in the agriculture, horticulture and leisure
fared well in the US market. sectors. On the basis of the business model, TenCate operates close to
the market with production sites in Europe, the United States and Asia.
The European market for both geosynthetics and synthetic turf This also gives rise to logistical and pricing advantages. Geosynthetics
activities presented a less positive picture. Operational and contributes by far the largest proportion of revenues in this market
commercial policy changes were implemented in the synthetic turf group.
businesses, including a further consolidation of downstream activities.
These made an important contribution to the increase in revenues. A distinction should be drawn between wovens, non-wovens (fleeces)
There is strong demand for newly developed, high-grade and wear- and grids. In general, woven products are stronger. The non-woven
resistant TenCate synthetic turf fibres. market is a volume market. The important factor for TenCate is that
the company is strongly represented in both market segments and
The operating result before amortisation of intangible fixed assets provides extensive technical advice on the use of geosynthetics for
rose by 118% on an organic basis to € 31.4 million (2009: € 16.8 civil engineers, construction managers and contractors. Here too
million). The currency effect was + 20% and the effect of acquisitions/ the aim is to achieve a system approach focused on solutions.
divestments was 51%. EBITA rose much more strongly than revenues in Geosynthetics form part of the overall structure and deliver functional
relative terms, due to major benefits from the cost measures taken in added value.
previous years. The active control of working capital also contributed.
On the other hand, EBITA, which has not yet reached the desired level, ‘Sustainable building’ is an increasingly important theme. The market
came under pressure from costs associated with the streamlining of is devoting increasing attention to the positive environmental aspects
the downstream businesses in the synthetic turf market and a of geosynthetics. The use of environmental arguments and the
provision recognised for the planned transfer of geotextile production reduction of environmental effects are therefore receiving greater
from Almelo to Nijverdal-Noord. The EBITA margin rose overall by 6.7% emphasis in the promotion, design and specifications. Alternatives to
(2009: 43%). The margin is below the desired level (minimum 10%). TenCate geosynthetics are usually concrete, stone and steel, which
Apart from the aspects referred to above, this was due in particular to often have to be transported over long distances. In the case of
the low margin of the European geosynthetics businesses. The margin geosynthetics, by contrast, locally available materials (sand, sludge)
on the synthetic turf businesses is satisfactory. are used. In the case of land reclamation (hydraulic filling with sand)
46 Royal Ten Cate

there is usually considerably less need for dredging, which has positive geosynthetics. This barrier fits in perfectly with the natural landscape.
environmental effects. In Rio de Janeiro, partly in readiness for the 2016 Olympic Games,
2.1 million m³ of sludge has to be removed, some of which is polluted.
GENERAL PERFORMANCE By constructing three storage and dewatering zones using TenCate
The TenCate Geosynthetics group showed a clear recovery in 2010. Geotube ® technology, this sludge is being dewatered and stored
Its market share also increased. Raw material prices were higher on safely. TenCate Geotube ® also provided a solution for the construction
average than in 2009, due to the slight economic upturn (oil price rises) of two dams on a riverbed in a basin used for tailings in Honduras.
and increasing demand. On balance, this was a less favourable Geosynthetics are often used in the building of roads and railway lines
development for TenCate, although these price rises were absorbed on less stable foundations in various large-scale projects in Asia.
after a certain time lag.
Part of the strategy is to exchange products and system solutions
It was a good year particularly for the businesses in the United States, between the various geographic regions. In the United States, TenCate
partly due to the US Government’s stimulus measures for the Geosynthetics began focusing in 2010 on the introduction and sale of
infrastructure market, where demand was stronger than expected. TenCate GeoDetect ® systems. This monitoring system, based on
The private market is still somewhat sluggish. The previous cost geotextiles equipped with optical fibres, has been in use in Europe for
measures bore fruit, so results increased relatively strongly. a number of years. In the Netherlands, the system has been used in the
IJkdijk project. It is important that the government develops pilots and
The European market remained stable at a fairly low level. Growth provides a testing ground to showcase technological skills in the field
opportunities are being exploited in Asia and South America. TenCate of water management.
strengthened its position in the Asian market, taking advantage of
positive economic developments. The commercial activities in the The marketing of such more complicated systems solutions constitutes
major infrastructure project market (civil engineering) and the a new challenge. Partnerships can accelerate the market introduction.
environmental market are increasing. An acquisition was also made To this end, TenCate has been co-operating technically and
(which was completed in 2011), as an integral part of the TenCate commercially since the beginning of 2010 with Roctest, the world’s
Asia strategy. largest manufacturer of fibre optic sensors for civil engineering.
The joint venture combines the strengths of each company, enabling
TenCate Geosynthetics is contributing to a range of attractive projects customers to benefit from innovative solutions in real-time monitoring
worldwide. In Chile, over 30 million m² of TenCate Mirafi® non-wovens with geotextiles. It provides detailed information on possible
are being supplied for the expansion of lithium extraction in the deformations: displacements, soil erosion, settlement and other
Atacama desert (for use in batteries in electric cars) by SQM. To guard changes in features such as inclines, slopes, walls, roadways,
against the danger of avalanches, the Austrian resort of Kappl chose railways and dyke bodies.
TenCate Polyslope ®, a system solution based on reinforced
IAA Award of Excellence 2010 for Incheon Bridge Project

In October 2010, TenCate Geosynthetics North America won an IAA Award of Excellence 2010 in the Geosynthetic Products
category. It was the sixth successive year that the company had received an award. The winning project was the contribution to
the Incheon Bridge Project in South Korea, in which TenCate Geotube® technology was used. This technology is a durable and
cost-effective method for protecting coasts, creating islands in the sea and reclaiming land. The award underlines the important
role played by TenCate Geosynthetics in providing solutions for critical environmental and infrastructure projects worldwide.

There are areas of overlapping activities in the field of geosynthetics OUTLOOK

and synthetic turf. In the United States, TenCate Geosynthetics TenCate expects to achieve further growth in the activities in this
obtained a patent for TenCate Miramesh ® SG. SG stands for synthetic market group in 2011. Growth is expected in infrastructure projects
grass. It is an open-mesh geotextile in which synthetic turf fibres are and as a result of new applications for water management and the
integrated. This open-woven geotextile was specially designed to environmental market.
strengthen constructed slopes, counter erosion and provide an Growth is also expected in Europe as a result of a change to the sales
immediate, lasting green appearance due to its combination with organisation. Cost measures are also being taken with the aim of
synthetic turf fibres. Joint developments also took place for sound- increasing profitability. In this context, the production facilities in
proofing walls and the absorption of particulate matter. Almelo (Netherlands) are being transferred to the production site of
all the other Dutch activities in Nijverdal-Noord (Netherlands).
TenCate Geosynthetics North America received the International
Achievement Award (IAA) of Excellence for the sixth successive time
in October 2010 from the Industrial Fabrics Association International.
This was in recognition for the contribution to the Incheon Bridge
Project in South Korea, in which TenCate Geotube ® technology
was used.
In November 2010, TenCate concluded an agreement to acquire the

geosynthetics activities of Emas Kiara Industries Berhad. This is a
listed company in Rawang (Malaysia). This transaction is taking place
at the beginning of 2011. Emas Kiara Industries is a major producer and
supplier of a wide range of geosynthetic products and solutions.
Its primary focus is on the Asian markets. The acquisition considerably
strengthens the position and activities of TenCate Geosynthetics in
this fast-growing region and will substantially increase the sales of
TenCate of geosynthetics in this region.
48 Royal Ten Cate

GEOSYNTHETICS
Since the beginning of 2010 TenCate

Geosynthetics has also been focusing on
the market introduction and sale of its
intelligent geotextile in North America.
In doing so it has been working closely
with Roctest and others. The market
launch of TenCate GeoDetect ® was very
successful. This monitoring system
has been in use in Europe for a couple
of years and is entirely consistent with
TenCate’s system philosophy. Its launch
in the US has enabled marketing efforts
in geotechnology to be coordinated
worldwide.
In 2010 further development of the

world’s first intelligent geotextile was
intensified. TenCate GeoDetect ® is a
system for monitoring geostructures
for deformation in critical earth
structures. This geotextile, which
incorporates fibre optics, also includes
special instrumentation equipment and
software. This provides an early warning
of the slightest ground deformation and
of any changes in temperature and strain
in embankments and dykes, making it
possible to take measures to prevent a
breach. The system is buried in existing
dyke bodies, and is used during the
construction of sea walls, railways and
roads and the building of retaining walls,
tunnels and underground structures and
pipelines. Connected through end-user marketing
TENCATE GRASS of the quality, playing characteristics and durability of synthetic turf
MARKET POSITION AND STRATEGY pitches. The alliances with market participants are giving rise to joint
The TenCate Grass group has a leading market position worldwide technological and other developments and further reductions in the
(fibres and backing) in synthetic turf systems. TenCate is almost at the time to market.
beginning of the supply chain. The strategy is being continuously
reinforced in all cornerstones of the strategic framework (value chain In the second quarter, the interest in TigerTurf (synthetic turf
management). The demand and supply side of the market are distribution and installation) was increased from 49% to 80%, in
developing strongly. Downstream consolidation is taking place in the implementation of a previously agreed acquisition resolution.
sector as a result of higher quality requirements among end-users, At the beginning of 2011, an agreement was reached with GreenFields
the greater importance of research and development, high certification whereby TenCate would acquire a majority interest in the company.
costs, environmental and sustainability requirements and tight A letter of intent was also signed with C.S.C. Ceelen Sport
availability of bank financing for small market operators. It is not Constructies for the joint product and system development, systems
desirable for TenCate to finance the synthetic turf market, however, marketing and the acquisition of a minority interest in a newly formed
so supply and payment conditions have been tightened. marketing platform for system development. In this marketing concept,
Edel Grass, GreenFields and TigerTurf are the labels with which
TenCate conducts an active strategic policy in order to maintain TenCate will operate in the market for sport systems. Independent
a leading position in terms of market share and technology. With partners also operate under their own brand names in the market.
production sites in the Netherlands, Dubai and the US, TenCate has These are co-branded with the Powered by TenCate™ label.
deployed its production facilities cost-effectively, with the emphasis
on volume production in the Middle East, and the logistical lines to the As a result of intensive co-operation within the value chain, there
market are short. Within this strategic policy, TenCate also leads the is now greater control of the overall production process. Quality
way in entering into partnerships with key providers of synthetic turf guarantees throughout the chain are of great importance, because
systems. Tight inventory management is also maintained. The pricing there is growing quality awareness in the market. Close co-operation
policy has been closely geared to the seasonal pattern in the synthetic also contributes to environmentally friendly and sustainable concepts,
turf market. as well as the recycling of sports pitches. The quality image of sport
systems related to TenCate is strengthened by co-operation in the
Interests in downstream activities (marketing and installation value chain. The links between TenCate Grass and its partners make
companies) are increasingly being integrated. TenCate thereby for a strong combination along the entire length of the value chain.
combines expertise in the development and production of synthetic turf
fibres and carpet backing, as well as research and development in the In the downstream activities of TenCate the companies retain their
field of sport characteristics, with the knowledge of system developers commercial identity, because there is a growing trend towards market
and installation companies. The aim is to accelerate the improvement segmentation. GreenFields and Edel Grass are both FIFA Preferred
TenCate Tapeslide™ XP fibres for intensively used sports pitches

Many sports pitches are used for both training and competitive matches. Totals in excess of 3,000 playing hours per year are not
exceptional. TenCate Tapeslide™ XP fibre has been developed for such pitches. A large number of intensively used pitches
worldwide have been equipped with TenCate Tapeslide™ XP technology since it was launched, and every single pitch is still in
excellent condition. The hundred-plus Cruyff Courts in the Netherlands are a good example. Architects and specifiers increasingly
opt for TenCate Tapeslide™ XP fibres in the knowledge that it is the most durable synthetic turf fibre on the market.
50 Royal Ten Cate

Producers. These market operators must meet high quality standards GENERAL PERFORMANCE
in project management, installation and after-sales service. The TenCate Grass group achieved excellent results during the
By maintaining strategic partnerships, TenCate aims to achieve reporting year, particularly as a result of internal measures and
optimum geographic coverage with a broad product portfolio based on favourable market developments in the United States. Worldwide,
a differentiated brand policy for all sports and landscaping markets, TenCate recorded organic growth of well over 10%. The market in
thus ensuring that a direct relationship is maintained with end-users Europe was sluggish, while in Asia TenCate grew slightly in line with
(consumers, sports associations, local authorities, etc.). the market. This performance enabled TenCate to further increase its
global market share. This growth was partly a result of major
The technology component has also been strongly developed within operational and commercial policy changes.
the TenCate Grass group. TenCate has a large number of valuable
formulations and patents in the field of fibre and process technology. Across the board there is strong growth for newly developed, high-
Formulations are being developed in-house (particularly in the United quality fibre types and systems. The turf fibre production volume
States) which give fibres high wear resistance and make them flexible increased compared to 2009, reflecting an increased share of the
and resilient. Technologies available within TenCate as a whole are synthetic grass fibre market. The close relationship with strategic
drawn upon to devise new methods for the production of synthetic turf market operators also led to an increased market share.
carpet with increasing functionalities. TenCate has for many years
been in the lead in new developments. For example, it has developed In the United States, TenCate Grass expanded its production capacity
its own woven synthetic grass design. By means of weaving, TenCate for its most durable synthetic turf product, TenCate XP Blade™ in 2010.
has for the first time produced a complete top layer for synthetic turf Greater emphasis is being placed on this product in the market, leading
pitches instead of separate components (synthetic turf fibres and to a strong rise in orders. TenCate XP Blade™ is being sold worldwide,
carpet backing). In these developments, the company sets itself the particularly for very intensively used pitches.
task of developing a product which makes a positive contribution to the
prevention of sports injuries. In that way end-users can have synthetic Football is the main growth market. The improvement in the
turf for a safe and sustainable sporting experience. performance of synthetic turf sports pitches, particularly for football,
is one of the prime challenges in this market. The market penetration
The sports market is currently the main market in synthetic turf. of synthetic turf in sport is showing structural growth, but is still at a
The market for landscaping is nevertheless growing strongly and fairly low level worldwide (well below 10%). It is a relatively young
ultimately has equivalent if not greater potential. Both reduced market, with still a great deal of ignorance of the qualitative
maintenance and environmental factors (savings in consumption of characteristics of synthetic turf.
water, artificial fertiliser and pesticides) are important reasons for the
acceptance of synthetic turf in gardens and public green spaces.

Better co-operation, the exclusive use of environmentally friendly TECHNOLOGICAL DEVELOPMENTS

components, reduction in the cost of purchasing and replacement, The fibre technology of TenCate is being continuously developed.
as well as providing a greater degree of certainty with regard to Good results are being achieved with improved fibre resilience and
performance, are having a positive effect on acceptance. In this wear-resistance, As a result, fibres in sports pitches remain upright
connection, TenCate Grass entered into a co-operation agreement with longer, leading to a long-term improvement in both playing
the process certifier INTRON in 2010, in order to be able to issue a characteristics and appearance.
performance guarantee (insured by Allianz) for synthetic turf systems
at FIFA 2 Star level. To that end, producers of synthetic turf systems An important technological development is weaving technology.
are certified by INTRON with regard to quality control. FIFA 2 Star is This development helps provide greater control of the technical
the performance level defined by the federation for top-flight characteristics of the entire top layer and the development of systems
competitive football. with lower installation costs. It also has a positive impact on the cost
of reinstallation if the pitch needs to be replaced. Cradle-to-cradle
As a basis for sport, synthetic turf offers potentially unprecedented concepts are being developed in parallel. It will ultimately also be
advantages compared to natural grass, such as playability during possible to use biopolymers for biodegradable systems in this area.
the entire year, predictable playing characteristics, lower water
consumption and maintenance. The initial investment is higher, OUTLOOK
but the operating costs are considerably lower. In the positioning of The operational and commercial policy changes, as well as the further
TenCate Grass in the market, quality aspects played a strong role in integration of downstream activities, provide a good basis for further
the co-operation with partners and sports federations. Good progress growth. The challenge, however, is to operate the downstream
was again made in this area. TenCate Grass is placing increasing activities as cost-effectively as possible.
emphasis on the provision of guarantees with regard to important The markets in Europe in particular are influenced by the availability
qualitative aspects. For TenCate XP Blade™ for example, an optional of government budgets. Sports complexes are often owned by local
five-year warranty is being offered for wear-resistance to underline authorities. Developments in Europe are expected to be influenced
the durability of the fibre and the playing characteristics. TenCate is by budget cuts in 2011.
the only supplier to offer this in the market. All other sports markets are stable or showing slight growth. Strong
growth is expected in the landscaping market, based mainly on water
scarcity.
52 Royal Ten Cate

GRASS
The Sportboulevard Enschede

Foundation officially linked its name
to that of TenCate in September 2010.
For the past fi ve years TenCate has
supported the development of high
quality facilities for recreational sports
owned by Enschede city council. With
an innovative programme, new sports
facilities based on synthetic turf are
being phased in. TenCate contribution
consists of sponsoring in kind, the
provision of technical support and
development of new materials and
systems for use in sports.
The TenCate Sportboulevard Enschede

is one of the New Sports Opportunities
Field Labs, which are used by the
NOC*NSF to focus on innovative
recreational sports. These include padel,
originally a Spanish racket sport, which
is rapidly gaining in popularity. Durable
TenCate Tapeslide ® XT has been used for
the development of the padel courts.
Other organizations involved include

the Enschede city council, sports clubs,
primary schools and a health centre. In
addition, the field lab is being developed
through cooperation with the University
of Twente and others. This will allow
new developments to be tested both
scientifically and in practice.
Connected with society
On the 84 th birthday of the British Queen,
Elizabeth II, Xennia Technology was
presented with a Queen’s Award 2010.
The Queen’s Awards for Enterprise
are the most prestigious form of
recognition for business performance
in the United Kingdom. This award
underlines the success of the innovative
inkjet solutions that Xennia markets
worldwide.
As a result of its strategic approach to

innovations in inkjet technology, Xennia
serves major industrial markets, such as
textile finishing, ceramics, packaging,
product decoration, biotechnology and
health care. Printed electronics can also
benefi t from Xennia’s modular inkjet
solutions.
Xennia Technology was founded in 1996

and has been part of TenCate since
2008. Xennia is an innovative driving
force in the world of inkjet printing.
As a leading supplier of industrial
inkjet solutions, Xennia is bringing
about a technological revolution in the
obsolescent production processes of
specific industries. By making industrial
inkjet printers a reliable and profi table
part of these production processes,
Xennia has succeeded in translating the
ideas and requirements of its customers
into inkjet reality. Connected through technological innovation
OTHER ACTIVITIES
KEY FIGURES
Other activities 2010 2009 2008 2007 2006
Revenues 66.8 52.7 53.8 67.4 93.3

Operating result before amortisation (EBITA) 9.8 – 7.0 – 3.9 2.4 * 4.2
Operating result (EBIT) 8.3 – 8.1 – 3.9 2.4 3.7
Investments 6.9 4.1 7.3 1.0 2.4
Staff years at year-end 624 670 657 729 696
* Including exceptional items
ACTIVITIES (around 32%). Xennia Technology had to contend with delays in the
The Other Activities sector comprises Xennia Technology, TenCate Enbi supply of printheads, as a result of which sales of both components
and Holding & Services. and inks fell short of the forecast growth. The long-term growth
◾ Xennia Technology outlook nevertheless remains unchanged.
Specialist inkjet technology for industrial applications, such as the
medical sector and the food and textile industry. XENNIA TECHNOLOGY
◾ TenCate Enbi MARKET POSITION AND STRATEGY
Technical rollers and components particularly for printers, copiers, Xennia Technology ltd of the UK (79%) specialises in the development
fax machines, postal sorting machines and automated teller of industrial production processes based on inkjet technology.
machines. The company focuses mainly on textile printing and finishing,
decoration and coating of materials, the packaging industry, printed
REVENUES AND RESULTS electronics and medical applications. This represents a revolution
The revenues of the Other Activities sector (Inkjet Technology, for TenCate in the field of coatings and textile finishing, because
Technical Components and Holding & Services) amounted to functional characteristics can be applied to materials on a nano scale.
€ 66.8 million (2009: € 52.7 million). EBITA amounted to € 9.8 million
(2009: – € 7.0 million). The result was positively impacted by a For a number of applications, including textile materials, the
corporate branding fee of € 8.4 million. The holding company derives technology is still in the start-up phase. Inkjet printing on textiles has
its income principally from interest on loans and management fees. been in use for some time, but for small runs and at low production
A strong turnaround was achieved at TenCate Enbi, amid a slight speeds.
market recovery. Revenues were well above the 2009 level

> REPOR T OF T HE E X ECU TIV E BOA RD > Other activities
The technology offers the prospect of major progress in reducing the Due to the rapid development of the market as a whole and the still
consumption of energy and raw materials, as well as in the accuracy limited capacity of suppliers, a shortage of components (printheads)
of the process (controllability and quality). Other advantages are the arose, causing delays to a number of developments. Xennia responded
individualisation of volume products (mass customisation) and product to this by entering into new relationships with suppliers.
innovation.
In terms of their revenue contribution, inkjet systems for the ceramic
Xennia combines technology (hardware solutions) with operating tile industry in China and Europe are the main commercial solution
systems (software) and its own ink formulations to develop industrial at present.
production systems. The 2010 financial year was devoted mainly
to the development of the value chain and the strengthening of the OUTLOOK
organisation. In the years ahead, Xennia Technology will be an important technology
partner in various innovation programmes. However, there will be an
As a technology partner, is Xennia is one of the few companies increasing emphasis on in-house commercial activities, namely sales of
operating in this way in the market. It therefore has a number of modules, systems and inks. Xennia has formulated a growth strategy
important relationships with OEMs and machine manufacturers. focusing on a number of niche markets, including textiles, in which
TenCate is one of the main launch customers.
GENERAL PERFORMANCE
Good progress was made in 2010 with the development of the internal Xennia Technology and TenCate will take steps to implement the
organisation of Xennia. Cametrics was acquired in order to bring technology for textile finishing in 2011. This is currently at the R&D
specialist software development in-house. The company also began project stage. A progressive assessment will be made of the extent
producing inks (coating fluids) internally for applications in the field to which the technology can be implemented commercially.
of textiles, among others.
The sales organisation was strengthened and work began on The broadening of the supplier base in 2010 will reduce the
developing an international distribution organisation. Particular dependence with regard to critical components. This has strengthened
attention was also focused on the positioning of the brand portfolio the commercial position.
in the inkjet industry.
The European DigiTex framework project was successfully completed

at the end of 2010. This has provided both Xennia and TenCate with a
good knowledge base for implementing inkjet technology in their own
production organisation.
56 Royal Ten Cate

TENCATE ENBI GENERAL PERFORMANCE
MARKET POSITION AND STRATEGY In the field of product development, attention during the reporting year
TenCate Enbi develops and produces technical rollers and components was devoted primarily to projects with a high likelihood of success for
based on rubber and foam technology for paper transport and image core relationships. Priority was given to projects from which revenues
transfer in printers, copiers and fax machines, as well as for postal could be generated in a relatively short time. Commercial contacts
sorting machines and automated teller machines. The products have with existing core customers (leading OEMs in the printer and copier
to meet strict qualification requirements with regard to technical market) were deepened. Higher priority was also given to the
characteristics. recruitment of new Asian customers with sustainable revenue
TenCate Enbi occupies an important position as a leading supplier of potential.
major European, American and Asian printer and copier producers.
A substantial increase in revenues was achieved at TenCate Enbi. Asia
TenCate Enbi is one of few suppliers to operate on three continents: is an important growth market. TenCate Enbi has its own production
Europe, North America and Asia. Competitors operate mainly locally. capacity in Zhuhai (China). This local site works closely with other sites
As an industrial supplier it is important as a partner in the logistics around the world.
chain to deliver added value on competitive terms and to serve as a
sounding board for technological development processes. The market showed a slight recovery, of which TenCate Enbi took full
advantage. However, there was some rebuilding of inventories in the
In addition to the office market, TenCate Enbi serves niche markets, overall value chain in 2010. The structural recovery in the market was
such as postal sorting machines, ATMs, photo printers and insulation limited. In Europe, replacement sales were found to make up for the
(foam-based products). A strong development capacity is an important substantial loss of sales in the printer and copier market. Sales growth
precondition for success in this market, which increasingly has shorter was also achieved in Europe in 2010, as in the case of insulation for hot
production cycles. water boilers and automotive customers (sound insulation).
By reducing costs further, TenCate Enbi has a cost-effective local OUTLOOK

production facilities on three continents. The company co-operates For TenCate Enbi it is important to continue developing the presence in
intensively worldwide in the field of product development. the Asian market (China and Japan), where growth opportunities are to
be found among large market participants.
It is also important to obtain product qualifications on a continuous
basis for new printer platforms. The global market for printers and
copiers is expected to show moderate growth in 2011.
Xennia Technology introduces new modules and systems

Xennia Technology introduced new inkjet modules, inks and composite materials for inkjet printing systems in mid-2010.
The inkjet modules enable OEMs and mechanical engineering partners to devise reliable inkjet printing solutions. Xennia uses
water-based inks but absolutely no solvent-based inks. The company uses composite materials from TenCate Aerospace
Composites in its latest design for inkjet printing systems. This offers mechanical stability over a wide range of temperatures
and leads to more accurate printing. That means lower operating costs and reduced energy consumption. This development is a
good example of synergy within TenCate.

ADVANCED ARMOUR
At the beginning of 2010 TenCate

Advanced Armour strengthened its
position in the United Kingdom armour
market. The acquisition of the armour
company AML UK Ltd in Swindon
(United Kingdom) has provided TenCate
unlimited access to the British market for
lightweight composite armour solutions.
This acquisition was another major step
for TenCate in the creation of a pan-
European armour organization. Together
with its sister organizations in the United
States, TenCate Advanced Armour offers
an extensive portfolio of technologies
and system solutions to the global
marketplace for the protection of people
and materiel.
TenCate Advanced Armour UK is a

leading designer and developer of
revolutionary concepts and prototypes
for armouring. As a technology partner,
it manufactures armour materials for the
protection of vehicles, aircraft and ships.
It also provides a range of products for
the security market. There are currently
a number of major modernization and
expansion programmes planned by the
British Ministry of Defence and allied
contracting parties. The integration of
the AML organization within TenCate
went off extremely smoothly and
successfully and was enthusiastically
received. Connected through end-user marketing
> REPOR T OF T HE E X ECU T IV E BOA RD > Other activities
POST BALANCE SHEET EVENTS In summary, the developments below are the main pillars for further
On 25 February, TenCate acquired a majority of the shares of recovery:
GreenFields. The intention is to bring the percentage to 75% in the ◾ Continuing strong performance by TenCate Defender™ M
short term. and expansion of applications (for example riot police) and new
TenCate has also signed a letter of intent with C.S.C. Ceelen Sport geographic markets;
Constructies bv, a leading installer of synthetic turf pitches. ◾ Growing share of the industrial market for protective fabrics;
◾ Recovery in the aircraft industry;
PERFORMANCE AND OUTLOOK ◾ Marketing of previous (technological) developments (such as new
The trend in the order intake was favourable overall. Governments and synthetic turf systems, widening of applications for composites);
related customer groups account for a considerable proportion of ◾ Good basis in armour markets (EU and US);
revenues. For the group as a whole, no major negative effect is ◾ Growth in Asian and South American markets (geotextiles,
expected from lower government expenditure, since TenCate materials protective fabrics);
are aligned with global trends which are of importance for these ◾ Increase in profit margin on geosynthetics activities.
market groups.
In view of the above developments, further growth in revenues and net
Promising developments are under way in the markets in which profit is expected – barring unforeseen circumstances.
TenCate operates. Activities in the aerospace industry are increasing
and, after initial delays, new aircraft programmes have now entered
the production phase. Another promising development is the ABDS™
active blast countermeasure system. This is a patented concept to
provide army vehicles with better protection against roadside bombs.
In the synthetic turf market, TenCate has initiated a development

aimed at increasing integration and co-operation within the value
chain, focusing attention on sustainable synthetic turf systems.
The priority is on margin growth (upstream combined with downstream
activities).

Actions for 2011
◾ Strengthening of corporate profile ◾ Continuation of the buy & build strategy
Stronger profile and positioning for TenCate as a company Composites remain one of the focal activities because this market
particularly in the American market. This can be seen as a home is growing strongly. TenCate sees attractive opportunities across
market, in view of the dominant share of revenues and profits. a wide range of applications, including thermoplastic composites
◾ Reinforcement of the concept of sustainability and introduction (TenCate Cetex ®).
of measurable performance indicators ◾ Leadership in the consolidation in the synthetic turf market
TenCate operates in sustainable markets (safety and protection, The global alliance strategy will be rolled out further in 2011. It is
water and environmental management) and conducts a policy aimed at strategic and commercial partnerships to achieve better
focused on sustainability. However, this policy is still not geographic coverage and qualitative improvements, particularly in
sufficiently underpinned and measurable in the global organisation. the field of sports systems. End-users and sports federations are
This also includes a strengthening of the policy on emission growing strongly and becoming more critical with regard to quality
allowances. The new monitoring protocol for CO 2 emissions will and durability.
be submitted for the period 2013-2020 in mid-2011. ◾ New applications for TenCate materials and technological
◾ Longer-term profit growth competences
The past two years were dominated by particular economic The TenCate Defender™ M business model is worthy of replication.
circumstances, requiring a policy that produced the maximum This model is based on R&D/patents, material knowledge,
effect in the short term. The introduction of new technological and worldwide access to commodity markets, effective anticipation
other developments means there will again be increasing scope to of specific requirements of customer groups (solution-focused
invest in the future. One of the main developments is the approach) and almost full outsourcing of production. In other areas
forthcoming introduction of inkjet technology as a finishing process too, the company’s specific capabilities can be used to develop
technology on a nano scale. materials for new applications.
◾ Implementation of emerging markets strategy ◾ Acceleration of profit growth at Xennia Technology
There is a discernible trend whereby emerging markets Xennia Technology is on track in its strategic development.
increasingly require high-grade materials. There is also a desire to Through the effective marketing of existing developed concepts,
produce locally. TenCate will study the potential for global growth the emphasis is on a business model focused less on R&D and
both independently and jointly with local partners, while ensuring more on profitability.
that specific technological competencies are sufficiently
protected.
60 Royal Ten Cate

Corporate information
CORPORATE GOVERNANCE ◾ The general meeting of shareholders and the works council can
CORPORATE GOVERNANCE STRUCTURE recommend persons to the Supervisory Board for nomination as
The Supervisory Board and the Executive Board endorse the main supervisory directors;
corporate governance principles as set out in the provisions of the ◾ In the case of one-third of the members of the Supervisory Board,
Corporate Governance Code amended by the Monitoring Committee the Supervisory Board will in principle place in nomination the
in December 2008. name of a person recommended by the works council (works
council’s reinforced right of recommendation);
No detailed adjustments to the Corporate Governance Policy were ◾ In the event of an outright majority of the votes, the general
made in 2010 in response to the new code. TenCate already largely meeting of shareholders representing at least one-third of the
complied with the Code and the same applies to the amended issued share capital may reject the nomination by the Supervisory
principles of the Code. As was the case with the previous Code, for the Board;
amended version there are a number of exceptions applicable within ◾ The members of the Executive Board are appointed by the general
TenCate, relating mainly to the nature and size of the company. meeting of shareholders on the basis of a binding nomination by
They do not affect the basic principles of good corporate management the Supervisory Board.
and integrity. The exceptions to the best practice provisions are stated
on the TenCate corporate website. Corporate governance within TenCate is based on the following
principles:
The Executive Board’s statement on the internal risk and control ◾ Value creation for shareholders
systems can be found on page 70 of this annual report. This means making optimum use of the available resources. In the
context of internal financial control, financial ratios and metrics
The corporate governance structure is based on the voluntary are monitored closely. These reflect the performance in terms of
application of the two-tier board structure. The main elements cash flow generating assets, efficiency, margins and the return on
of this are: capital employed. Consideration is also given to longer-term
◾ The financial statements are adopted by the general meeting continuity. TenCate takes account of efficient use of natural
of shareholders; resources and its social responsibilities.
◾ Supervisory directors are appointed by the general meeting of ◾ Quality of the management and appropriate remuneration
Shareholders on the basis of nominations by the Supervisory The remuneration policy is intended to attract high-quality
Board. The profile of the members of the Supervisory Board is first management consistent with the specialist and multinational
discussed at the general meeting of shareholders at the time of character of TenCate. The performance pay structure must be
adoption and on each subsequent modification; transparent and focused on key performance indicators.
The Supervisory Board’s Remuneration Committee is responsible

> CORPOR AT E INF ORM ATION
for developing the remuneration policy and assessing the ◾ Social responsibility and sustainable enterprise
performance criteria for members of the Executive Board. TenCate strives to maintain good relations with other parties in its
◾ Code of conduct for management and employees vicinity and with stakeholders. The company endeavours to limit
The company has a code of integrity, a whistleblowers scheme and the environmental impact as far as possible. This principle is also
rules to prevent abuse of inside information. There is also a code included in the code of conduct for employees. Substantial
of conduct on the use of internal and external social media. This is environmental investments are made for this purpose. Operating
a dynamic process in which the code of conduct can be refined or companies have long implemented major elements of socially
supplemented from time to time. responsible enterprise.
◾ Disclosure
TenCate conducts an open communication policy and provides SWOT ANALYSIS
regular information on its important commercial developments. The SWOT analysis in this report provides an overview of (the main
Information provision must fulfil the criteria of accuracy, points of) the internal and external factors which can influence
completeness and timeliness and comply with transparency strategy formation and implementation. For each market sector this is
guidelines and IFRS standards, in order to give stakeholders the shown elsewhere in this report by means of a schematic overview.
most transparent and accurate view possible of the performance A description of the main aspects of the group’s strategy and factors
and outlook. The main risks must be stated and evaluated. which influence it is provided below.
Clear communication takes place on TenCate’s corporate strategy.
Only a market-compliant trading update is provided for the first GENERAL
and third quarters, in accordance with the legislation which came The strategic framework in which TenCate operates is provided by the
into force in December 2008. value chain management model. Its main theme is the development of
◾ Financial control and risk monitoring actions which enable TenCate to exercise control in the value chain and
The Supervisory Board forms a financial committee from among maintain a distinctive, unique positioning. The value chain management
its members to supervise the financial performance, acquisitions, model is based on four pillars: cost leadership, product differentiation,
divestments and general risk policy. end-user marketing and technological innovation. The SWOT analysis
◾ Avoidance of conflicts of interest is therefore approached from this perspective.
TenCate is alert to conflicts of interest. These are addressed
and where necessary avoided. THE STRENGTH OF TENCATE
TenCate is constantly alert to possibilities for extending its corporate
branding. Through end-user marketing, activities are developed in
order to highlight the contribution made by TenCate materials in
systems. In view of the value which can be vested in the TenCate
brand, TenCate can successfully position the company’s core values
Increasing brand awareness in protective fabrics

Targeted end-user marketing makes customers and end-users aware of the characteristics, service life and cost advantages of
materials supplied by TenCate Protective Fabrics for protective work clothing. These materials, such as TenCate Tecasafe® Plus,
TenCate Oasis™ and TenCate Tuffweld®, are based on internally developed fibre blends for specific applications. At the beginning
of 2007, TenCate Tecasafe® Plus was successfully launched in the industrial safety market in the United States. The material is
more comfortable and has a longer service life than flame-retardant fabrics from other suppliers. Due to its price and service life,
it delivers substantial cost benefits for industrial laundries and rental companies.
62 Royal Ten Cate

(innovative, solution-focused, high-quality and reliable) through OPPORTUNITIES
corporate branding. The fact that TenCate is clearly visible as a TenCate operates in sustainable growth markets which are largely
supplier of materials and solutions for leading customers provides driven by global trends (water scarcity, safety, environment, etc.).
important underpinning in this regard. The group’s technological skills and leading positions in global niche
The branding and PR activities in 2011 will be focused largely markets constantly give rise to opportunities. An example is the
on the American market, in view of its relative importance. active armour solution for protection against roadside bombs.
A strong corporate positioning also provides a good basis for This opportunity will be further developed into a marketable concept
potential acquisitions. jointly with partners in the course of 2011.
The developments in the field of inkjet technology also constitute one
IMPROVEMENT POINTS of the main challenges for the future. Not only does this technology
In the previous annual report it was stated that attention would again make the production process more cost-efficient and environmentally
be focused on growth. Although a number of minor acquisitions were friendly, but it also offers abundant scope for product differentiation.
made, greater attention needs to be devoted to an acceleration of the The European DigiTex project was completed successfully in 2010.
growth process. Emerging markets will play an important role in this Work is being carried out on the implementation of this technology in
regard, and attention must also be focused on the time to market of production processes in the field of coating / finishing, initially with
innovative developments. The risks inherent in growth processes will textile substrates.
of course be closely monitored.
THREATS
An inventory has now been made of all projects, focusing on their The threats from the financial crisis are behind us, although vigilance
applicability in the market, feasibility and reproducibility and the is still called for.
appropriate strategic fit with the company’s core activities. Although technological and other developments and the currency/
export policy in Asia can be seen as a threat to the Western world
In this regard, the implementation of new activities (product- (level playing field), TenCate also sees this as an opportunity. Chain
market-technology combinations) at operational level is a point for integration (value chain management model) and the system approach
improvement. Increased efforts must be made, in co-operation with are aspects of the way in which TenCate defends its positions in
third parties, to achieve faster market acceptance, with a certain established Western markets. Strong development is also taking place
degree of chain integration requited at an early stage. in the Asian market, where there is growing demand for high-grade
materials and solutions.
It is necessary to guard against excessively unilateral growth and

dependence on the American defence market. Developments allowing
a gradual diversification of revenues have been successfully

GRASS
Happy Turf
The Dutch Happy Street pavilion

attracted well over seven million
visitors during the World Expo in
Shanghai (China). Every day Chinese
and foreign visitors took advantage of
the opportunity to relax in the shadow
of the compact city fl oating above them.
TenCate Grass was responsible for the
development of the synthetic turf park.
Using organic principles, the Dutch
architect John Körmeling designed and
built typically Dutch houses along a
trade route laid out in a figure of eight,
the Chinese lucky number. Each house
showcased Dutch Design, mostly with a
technological slant. In one of these a fire
fighting system from TenCate Protective
Fabrics was on display.
The construction of the pavilion took

less than a year and installation of the
synthetic turf field in green and blue,
just a couple of weeks. Dutch visitors
included the Crown Prince and his wife.
The World Expo opened in May and
closed at the end of October 2010. The
pavilion has now been taken down and
the materials, including the synthetic
turf, either reused or recycled.
Connected with society

> CORPOR AT E INF ORM AT ION
implemented. The American market nevertheless remains an important RISK MANAGEMENT

market for TenCate in relative terms. Enterprise entails risks. TenCate aims to identify and control these
The availability of certain synthetic fibres may become temporarily risks as early as possible. Because TenCate operates in different
restricted. TenCate has partly neutralised this threat by being markets – protective fabrics, aerospace, antiballistics, geotextiles,
fibre-independent with regard to certain material characteristics. synthetic turf and print technologies – it also faces different risks in
Several options are usually available for types of fibre. each individual market.
Risk control models have therefore been developed, which are updated
CHALLENGES and discussed with the group management at least four times a year.
The growth of the company also demands different management
qualities. Management development is therefore high on the agenda. STRATEGIC RISKS
By expanding the clusters (span of control), the aim is also to attract In order to assess the strategic risks, TenCate uses a business model
high-calibre management staff and bring about greater internal based on four cornerstones showing the positions which a particular
co-ordination and synergy. On a continental level, the organisation group occupies:
must be controlled with a more local market orientation (local for
local). End-user marketing Technological innovation
Product differentiation Cost leadership
A strong response has been delivered to the financial challenge

described in the previous report with regard to the synthetic turf Cost leadership relates to a competitive cost structure and operational
businesses. Here too, important strategic policy changes have been excellence, also referred to as the ‘last line of defence’. If the company
implemented. The process of restructuring the value chain, however, is no longer able to distinguish itself with new products, there is no
is not yet complete. other defence than to lower costs.
Product differentiation concerns the ability to constantly bring new,
TenCate has the stated ambition of achieving strong growth in the field improved products to the market and thereby maintain a lead over the
of composite materials. Although the focus on the aerospace and competition.
armour markets can be described as progressive in terms of End-user marketing concerns the position and power in the value chain.
technology, it is an important challenge to develop applications in other The stronger the relationship with the end-user, the greater the
areas. The technology of TenCate (thermoplastic composites) is influence in this value chain.
particularly suitable for developing composite applications for Finally, technological innovation is aimed at fundamental improvements
industrially produced components, as in the automotive industry. to products based on research & development and patent protection.

This analysis enables us to carry out a rapid and clear assessment programmes, such as the aerospace market. Growth in revenues is
of the strategic position of the company and to adjust its course protected by qualification processes. A precondition is that TenCate
accordingly. continues to adhere to the quality guidelines specified by the
customers.
A second frequently used model is the SWOT analysis, in which the
W (weaknesses) and the T (threats) represent the internal and external Macroeconomic developments
risks. Macroeconomic developments have a major impact on the level of
This analysis also provides a basis for the discussion of measures with demand for TenCate products. Sales in some market groups are directly
the management in order to reduce the risk. impacted by the level of economic activity of industrial customers and
end-users. There are also major differences between individual
The following overview of the main specific risk areas is not geographic markets. The Asian and US economies improved in 2010,
necessarily complete. It is possible that risks which have yet to be but the European economy has yet to do so.
identified or are seen as non-material will nevertheless subsequently
have a major negative impact. The risk management and control An important factor is government expenditure in the major countries.
measures are aimed at timely identification of such risks. The demand for protective fabrics and antiballistics is controlled by
public sector bodies, in particular defence forces and fire brigades.
MARKET RISKS Demand for geotextiles and synthetic turf products is driven by public
Market sector investments in infrastructure and sports facilities. Factors
The market risks differ depending on the market segment. In some which determine government policy in the above markets include
segments, such as base fabrics for professional wear, there is security policy and economic growth. With strong commercial
intensive competition and high price elasticity. In addition, production networks and the associated information provision, government plans
of less distinctive products is gradually shifting to Asia. In other market can be anticipated promptly and efficiently.
segments, such as safety fabrics, antiballistics, geotextiles and As a result of flexibility in cost structures, it is possible to compensate
artificial grass, TenCate has a technological lead, in many cases with for the consequences of a certain degree of reduction in demand.
associated market leadership. This provides no guarantee for the This flexibility is achieved among other things by flexible deployment
future. Products which reach the end of their life cycle must be of labour and partial outsourcing in some market groups.
succeeded in good time by new, improved and distinctive versions.
Protection and patenting of intellectual property strengthens the
unique positions of the products. End-user marketing provides pull
effects, as a result of which the value chain is controlled more
effectively and distinctive ability is rewarded by the market.
There are also markets which feature long-term development
66 Royal Ten Cate

Raw materials Not having the right man or woman in the right place can result in an
A limited number of raw materials determine a large part of the operating company rapidly losing its lead or even falling behind its
materials consumed by the TenCate companies. This concerns in competitors. For this reason the selection criteria for new management
particular aramid fibres and differentiating gradations of polyethylene personnel have been tightened up. An assessment forms part of the
and polypropylene. key management recruitment procedure.
Prices in the commodity market may fluctuate widely. The price of Another risk is dependence on key officers, often with an R&D or
plastics is determined partly by the oil price, but in particular by market background. It is necessary to ensure that this expertise is
shortages or surpluses in the market. Price rises can be passed on to retained and shared across the organisation. This is achieved by
customers with a time lag of one to six months. The same applies to guaranteeing knowledge.
price reductions. In some cases an automatic price adjustment clause
is included in customer contracts. Production and product liability
TenCate has various small- to medium-scale production processes, for
In the case of super-strength or fire-resistant armour fibres, regular example involving fewer than 100 employees. Where there is a
shortages occur or a strong dependence develops on a single supplier. relatively low degree of production automation there is a higher risk of
These entail risks of availability and disproportionate price rises. human error. Incidents in production can never be ruled out. These may
Active efforts are being made to reduce this dependence by using lead to a loss of quality in the end-products, claims from customers or
alternatives. TenCate operating companies are increasingly taking part even a temporary halt in the production process. However, TenCate
jointly in negotiations with major suppliers, in order to achieve carries out preventive inspections of its products and almost all plants
optimum conditions in terms of price, quality and delivery reliability. are ISO-certified. Control of production processes and quality
management are important priorities in order to avoid product claims.
OPERATIONAL RISKS In that context, uniform sales conditions are being introduced as far as
Management and personnel possible.
The TenCate organisation strategy is based on a decentralised model.
The group directors and operating company managements determine Product development
the company policy to a large extent independently and take Product development is the lifeline for the years ahead. It must be
entrepreneurial decisions. managed with care. If products are brought to market too early, this
can result in teething troubles, recalls and damage. On the other hand,
if the time-to-market is too long, TenCate will lose a large part of its
competitive advantage. The product development process has been
structured in accordance with strict procedures and criteria.
TenCate Polyslope® for avalanche protection

Kappl, a popular winter sports resort in the Austrian Tyrol, is protected against avalanches by a barrier based on TenCate
Polyslope® S. It is an environmentally friendly and attractively priced system consisting of fibre-reinforced geosynthetics, glass
fibre erosion control and a formwork made of geogrids. Geosynthetics were chosen because the mountain location ruled out
conventional solutions and the barrier had to fit in well with the landscape. The 600-metre-long and 25-metre-high avalanche
barrier has been constructed 2,200 metres above sea level, where the avalanche is halted before it attains its maximum speed
and strength. The barrier has been installed using locally available natural materials.

Environment and adopt a more aggressive, formal stance. Partly for that reason, the
The environmental policy of TenCate is based on limiting any impact on fiscal risk profile is increasing. This can relate to both corporation tax
the environment as far as possible. Regular checks are carried out both and import duties and VAT.
by the holding company and by the management of operating
companies and measures are taken to avoid environmental risks. FINANCIAL RISKS
Textile finishing in particular may involve the use of chemicals which Financing and liquidity risks
must be covered by guarantees. The waste water from textile finishing The company’s financing is overwhelmingly decentralised through
in the Netherlands and the United States is treated in the company’s corporate treasury. The operating companies receive their funds on the
own water treatment plants. basis of clear agreements.
TenCate considers that the environmental risks have been limited as The main financing source is the € 450 million syndicated loan, which
fully as possible. Environmental co-ordinators have been appointed at was renewed in December 2010 for a five-year term.
local level who are familiar with the specific situation and implement The loan is subject to a number of covenants, principally concerning
local legislation and regulations accordingly. the debt/EBITDA ratio. In view of the specific seasonal pattern in
TenCate’s financing requirement, it has been agreed that the ratio in
Continuity of information provision the first quarter may be 3.25, in the second quarter 3.5 and in the third
Each operating company has its own systems for control and and fourth quarters 3.0. The risk of a breach of covenant thus is
transaction processing in the main operating processes. From the substantially reduced. The monitoring of this risk is an important
perspective of costs and risk control, systems for communication and priority in the treasury policy.
generic workplace organisation are increasingly implemented centrally.
Disruptions to these systems can impede operating processes. Interest rates
As a result of procedures for information security and remote storage, The risk of interest rate rises is in principle hedged 90% for the
the risks are limited as far as possible. following year and 75% and 50% for the subsequent years, taking into
The operation of these facilities is tested periodically. account the expected interest rate trends. The preference is to use
caps for this purpose, but, depending on the cost, swaps may also be
LEGAL AND TAX RISKS used. The impact of the change in value of financial instruments on the
TenCate is involved in various legal proceedings resulting from normal company’s results is mitigated as far as possible by the use of hedge
business operations. The progress of these proceedings is monitored accounting.
continuously. A summary is discussed in the finance committee of the
Supervisory Board twice a year. Currencies
Approximately 30% of TenCate revenues are in euros. The major
As part of their aim of reducing budget deficits, governments are currency risk incurred by TenCate is in respect of the US dollar (50% of
encouraging their local tax authorities to intensify their inspections revenues) and a number of more or less dollar-related currencies such
68 Royal Ten Cate

OUTDOOR FABRICS
TenCate Outdoor Fabrics produces

TenCate RSQshield ™ fabric for the
protection of firefighters and other
emergency workers who release
casualties from crashed vehicles.
This fabric satisfies all necessary
requirements in that it is weather
resistant, fungicidal, water repellent
and dirt resistant. Its fluorescent yellow,
high visibility coating ensures that the
set is clearly visible. The fabric does not
absorb water when it rains.
TenCate RSQshield ™ is incorporated

into the RescueProtectionSet™ for the
emergency response market, which
was launched during the Interschutz
Exhibition in Germany in mid-2010. This
handy set was specially developed
by one of TenCate Outdoor Fabrics’
customers in the Netherlands. When the
roof of a crashed vehicle is cut away,
sharp edges and protrusions often
remain. It is essential to cover these in
order to protect both emergency workers
and casualties from being injured. This
prevents new trauma being suffered
and allows emergency workers to work
more efficiently and faster. Since the
lightweight fabric is also resistant to
both flames and sparks, the process of
cutting open the vehicle can progress
much more safely. The covers can be
attached by means of strong magnets. Connected through end-user marketing
as the Singapore and Australian dollar, the Chinese yuan renmimbi a result of the Financial Assessment Framework (including interest rate
and the dirham in Dubai (10%). risk management), involving a reduction in the risk profile.
With regard to currencies, Ten Cate draws a distinction between The company has concluded an implementation contract with
competition, transaction and translation risk. The competition risk Stichting Pensioenfonds Koninklijke Ten Cate nv, under which the
concerns the changing competitive position vis-à-vis competitors financial contribution remains limited to an average contribution. This
in areas with a different currency. This risk is hedged over the moves within an agreed range depending on the financial situation of
subsequent six months by means of options. Thereafter a permanent the fund.
answer must be found to the new situation. Transactions in foreign In the other countries there are defined contribution schemes in the
currencies are immediately hedged by means of futures or options. vast majority of cases.
These are mainly transactions by European operating companies
denominated in US dollars and British pounds. The translation risk RISK MANAGEMENT AND CONTROL SYSTEM
arises when operating companies outside the eurozone make The overall risk management and control measures are based on
a substantial profit contribution, while their currency weakens a number of key elements.
against the euro. This is liable to occur particularly in the case of
the American operating companies. They are offset by means of Culture
opposite positions with regard to competitive risk. The company strives for a culture of openness, integrity,
professionalism, enthusiasm, efficiency and respect. Core values are
Pension provisions entrepreneurship, innovation and a focus on results. Every employee is
TenCate has placed the pension provision for Dutch employees with made aware of these cultural elements and the obligation to comply
Stichting Pensioenfonds Koninklijke Ten Cate nv. This average salary with all applicable legislation and regulations. The Integrity Code and
scheme is designated as ‘defined benefit’ in accordance with IFRS the Confidential Adviser Scheme set out the general rules of conduct
reporting rules. A sharp fall in prices on international securities with which employees must comply.
exchanges could lead to a decrease in the value of the pension fund’s
investments. In the event of a decrease in interest rates, the present Organisation and communication
value of the liabilities increases. In such situations the cover ratio may The organisational structure of TenCate is based on clearly defining
fall sharply. That also happened in 2008, 2009 and 2010, as a result each person’s responsibilities and making performances measurable.
of which the company had to pay € 2.3 million in additional pension This is reflected in a group structure in which groups and operating
contributions. The result of this and of interest rate developments companies bear responsibility for results. The group managements
may be that the provision for pension liabilities on the Royal Ten Cate determine the group strategy, promote consistency and synergy and
balance sheet increases under the new IFRS guidelines. The pension are responsible for exploiting the market positions in the value chain.
fund has taken measures itself within its investment policy, partly as Central management support departments in the company with
70 Royal Ten Cate

functional responsibilities contribute to the co-ordination. to the management, the Executive Board and the Supervisory Board.
Managements of operating companies are controlled on the basis of a
formalised planning and control cycle. Where risks are insurable, such as for fire and loss of profits and third-
party and product liability, they are laid off to insurers. The balance
Systems for internal information provision and communication are between insurance cover, premium levels and own risk is reassessed
primarily aimed at giving employees and managers appropriate each year. Regular inspections and follow-up increase the continuity of
information for their own areas of responsibility. A whistleblowers the business processes, reduce production outages and lead to lower
scheme and a complaints scheme enable employees to inform the risk costs. Damage prevention and preventive investments improve the
company management about undesirable situations. risk profile.
It is important to maintain direct contact between the Executive Board, Evaluation of risk management and control systems
group managements and operating company directors. Direct The Executive Board is of the opinion that:
discussion takes place regularly, depending on the matter at hand. ◾ The risk management and control systems provide a reasonable
More formally, extensive monthly reporting takes place and the degree of certainty that the financial reporting is free of material
performance, results, outlook and certain facets of risk management misstatements;
are discussed once each quarter. Risk management also forms part of ◾ The risk management and control systems have operated correctly
the consultation with the Financial Committee of the Supervisory in the reporting year;
Board. ◾ There are no indications that the risk management and control
systems will not operate correctly during the current year.
RISK MANAGEMENT
Risk management is a responsibility of the management at all levels. However well designed our internal risk management and control
All managers and controllers sign a twice-yearly letter of systems are, they can never provide absolute certainty that objectives
representation on the financial reporting / internal control. in the field of strategy, operation, reporting and compliance with laws
and rules will always be achieved. In taking decisions we are aware
All financial regulations are included in the TenCate Accounting that:
Manual. The managements and controllers of the operating companies ◾ Human errors of judgement may arise;
declare in respect of their reports that the results have been compiled ◾ Cost-benefit assessments must constantly be made when taking
in accordance with this manual. on risks and taking control measures;
◾ Human failings and even simple errors or mistakes can have major
Each year the external auditors assess the structure and operation of consequences;
the administrative organisation and internal control, to the extent ◾ Conspiracies by officials can lead to circumvention of internal
relevant to the auditing of the financial statements. They report on this control measures;

◾ The management of parts of the company can permanently or The HR policy remains focused on development and growth, leadership
temporarily negate agreements made with the Executive Board. and reinforcing behaviour which fits in with our company’s core values:
innovative, solution-focused, high-quality and reliable. TenCate will
This statement should not be interpreted as being a statement in therefore continue to work on improving and strengthening the
accordance with the requirements of section 404 of the Sarbanes organisation.
Oxley Act in the United States, which does not apply to Royal Ten Cate.
ORGANISATIONAL DEVELOPMENT
HUMAN RESOURCES MANAGEMENT Entrepreneurship is key at all levels in the groups. Efficient central
HUMAN RESOURCES POLICY control from the holding company strengthens the core values.
The 2010 financial year was marked by a further strengthening of the An appropriate degree of autonomy and active pursuit of internal and
organisation, after an economically challenging period, in order to external co-operation are consistent with the culture of TenCate.
successfully continue the implementation of the TenCate strategy.
The development of skills and improved employee performance The market leadership role of TenCate requires strong leadership and
remained an important focus of attention. a clear organisational structure. Within TenCate, this structure
At the end of 2010, TenCate employed approximately 4,270 people consists of three sectors operating worldwide: Advanced Textiles
in 25 countries on three continents. & Composites, Geosynthetics & Grass and Other Activities.
The management of each of these groups has extensive responsibility
Own employees Year-end 2010 Year-end 2009 for the operational management of its own group. That strengthens
(in number of staff years) entrepreneurship. Important frameworks within which the groups must
Netherlands 785 862 operate are the TenCate strategy and annual plans. That means the
Rest of Europe 724 569 head office in the Netherlands need only be of limited size.
United States 1,542 1,314
Asia / Australia 878 777 In adjusting the staff count in 2009 in line with the changed market
Middle East 342 283 circumstances, a great deal of care was devoted to retaining critical
Total 4,271 3,805 knowledge and skills, in order to guarantee continuity in the
organisation and allow rapid upscaling. It became clear in 2010 that
this approach had worked. Where necessary, TenCate was able to
scale up rapidly to meet increased market demand.
10Cate
At TenCate we are
1 Effective doing the right things

2 Efficient doing things right
3 Creative thinking more flexibly
4 Flexible acting more flexibly
5 Enterprising recognizing and maximizing opportunities
6 Innovative breaking new ground at the cutting edge of technology
7 Reliable saying what you do and doing what you say
8 Committed dedicated, dependable and proud
9 A team we collaborate as individuals and also as teams
10 The difference to our clients materials that make a difference
72 Royal Ten Cate

Corporate technology
The Digitex project, which is funded

under the EU Sixth Framework
programme, has been carried out
over the past four years. This joint
research and innovation programme
of the European Textile Industries
was coordinated by TenCate. At the
final conference in December 2010
new breakthrough technologies and
functionalities were presented to the
public, with sustainable possibilities
like smart textiles, green factories and
mass customization becoming ever more
real. New solutions for more sustainable
processes were also developed.
The Digitex project raised awareness

in the European textile industry about
the developments and possibilities
that digital finishing can offer. Digital
printing on textiles will be the first step
to be taken in the foreseeable future
and this will be followed by digital
dyeing. Digital finishing will then also
start to provide new functionalities
and qualities for technical and other
textile materials, which cannot be
achieved in the traditional way. The new
functionalities, which were developed
for digital printing, present features for
antibacterial treatments, single-sided
hydrophobic functions, controlled
release systems and special chromic
functionalities. Connected through technological innovation
TALENT AND MANAGEMENT DEVELOPMENT TenCate operates in many countries, each of which has its own laws
For an enterprising organisation such as TenCate, the early and cultures. The operating companies therefore conduct their own
identification and development of in-house talent is an important key personnel policies geared to the local situation, although these are
to success. Talent is about more than having sufficient competences. governed by conditions and general principles specified by the group.
Passion is also a very important motive.
SAFETY
As part of the TenCate Talent programme, a business game was Our employees on all continents are professional people who have a
completed involving a simulation based on a comparable situation sense of enterprise focused on results and solutions and are prepared
at TenCate. A number of international teams, each with five to six to take on challenges. A safe, high-quality working environment is of
participants and drawn from various companies and disciplines, great importance in this regard and has the utmost priority. The policy
competed to achieve the highest scores. Participation was voluntary. of TenCate is aimed at implementing or structuring all operations and
processes in such a way that all forms of personal injury and damage
A capability assessment programme for the senior management was to health can be avoided. This aim forms the basis of the health and
also begun in the reporting year. This shows the extent to which safety policy implemented in all our companies. This results among
TenCate is fulfilling its growth ambitions with the current management other things in a relatively low level of sickness absence.
and the areas in which we need to develop, train and strengthen.
Stimulation of mobility also plays an important role in this regard. CORPORATE INFORMATION TECHNOLOGY
DEVELOPMENTS IN 2010
EMPLOYMENT CONDITIONS IT organisation
TenCate offers its employees a comprehensive and competitive Good progress was made in 2010 in merging the decentralised IT
package of employment conditions. To this end, regular surveys organisations into regional shared service centres. Information
are conducted, in co-operation with Hay Group and local employer Systems USA was established in 2010 and became operational on
organisations. TenCate operates a uniform remuneration policy for 1 January 2011. Preparations began for an IT shared service centre in
the management of all businesses. The bonus systems for the senior Asia. The three regional shared service centres are scheduled to be
management are also determined centrally. That takes place operational and interconnected by 1 January 2012. That will complete
exclusively on the basis of the result of the operating company and the transformation from a decentralised IT organisation to an IT shared
in some cases also partly on the basis of the results of the TenCate service centre organisation.
group as a whole.
Communication
Building on the previous investments in the secure Global TenCate
Network, the existing intranet has been completely overhauled for
internal communication. It will be rolled out worldwide in the course of
TenCate creates its own worldwide network

At the end of 2010, TenCate created its own Global TenCate Network. The process included concentrating the IT services in three
IT shared service centres: EMEA (Europe and Dubai), USA and Asia. Within this worldwide network, all operating companies are
interconnected and their IT infrastructure is standardised. In addition to conventional telephone systems, employees worldwide
have access to the internet, intranet, e-mail and Office Communicator. The result is fast, reliable, universally accessible
communication and IT support, cost-efficiency and a contribution to the clear presentation of the company. This process
innovation is consistent with the TenCate Green IT objective.
74 Royal Ten Cate

2011. A framework agreement for mobile telephony has been entered CORPORATE TECHNOLOGY
into for the Dutch businesses, which delivers a 53% cost saving. The long-term policy with regard to pioneering and other technological
The policy and guidelines on the use of social media are ready for innovations is being prepared in close co-operation by the corporate
implementation in 2011. development and corporate technology departments.
Projects DEVELOPMENTS IN 2010

Cognos Controller, the central consolidation system, was rolled out Biobased
further to the operating companies in 2010. In 2010, the corporate technology department was directly involved in
The use of the Citrix platform, a compression technology, will relieve the innovation project known as Biobased, which is the collective name
the burden on the local IT management and bring about a further for products made from natural raw materials that are biodegradable
standardisation of IT systems. and harmless to man and the environment. Specific biodegradable
product concepts will be developed within three years.
Investments The Netherlands aims to pioneer the development of biobased
Various investment requests to replace obsolete ERP systems were technology. As the market leader, TenCate intends to occupy a
approved in 2010. They included MS Dynamics at TenCate Protective prominent position. TenCate is initially working on biodegradable
Fabrics Thailand and TenCate Advanced Armour Europe, SAP at geotextiles which will compost spontaneously after a predefined time
TenCate Geosynthetics Nederland, JOMAR at TigerTurf USA and and disappear from the ground. For the biobased yarns, TenCate is
the JD Edwards upgrade at TenCate Geosynthetics Malaysia. These examining among other things the suitability of a biodegradable
projects will be delivered in 2011. This replacement has brought about biopolymer developed by DSM. The project has been established with
a further standardisation of the aforementioned four packages in the the aid of Ontwikkelingsmaatschappij OOST NV and the Twente
ERP landscape within TenCate. Innovation Platform.
The upgrade to SAN (storage capacity) and the backup and rollout
of VOIP (voice-over IP) in the Dutch businesses have been approved. Three-dimensional weaving
Over the past year, the corporate technology department made steady
PLANS FOR 2011 progress in the further development and refinement of the new
The IT organisation will be aligned on the basis of the IT shared service technology for three-dimensional weaving of synthetic turf. New
centre concept and the businesses in Asia will be connected to patents are being added to existing patents for this technology. One of
IS-APAC. Projects will also be launched for secure access to the objectives of this innovation project is the process integration of
information on websites and mobile devices, such as tablet PCs and almost all functionalities of a synthetic turf system within a single
smartphones. product. The installation of a number of pilot pitches (so-called
FieldLabs) provided the basis for applied scientific research and
practical experience in 2010.

Recyclable synthetic turf CORPORATE INTELLECTUAL PROPERTY

Thanks to a sophisticated product design, a fully recyclable synthetic BRANDS
turf pitch has been produced for landscaping, a first in this industry. TenCate has an overall brand architecture in which the corporate brand
After the end of the service life of the pitch, the processed materials forms the basis for both corporate communication and market
can be directly reused in the TenCate Grass production process. This communication. Product brands appear in a form consistent with the
pioneering concept was installed at two trial locations in Europe in the powerful corporate brand. On the basis of this architecture, an
autumn of 2010. A patent is pending for this innovative synthetic turf industrial brand policy is conducted which fits in with the end-user
system. marketing strategy of the TenCate market groups. The brand policy is
closely associated with the product differentiation cornerstone of the
Inkjet technology TenCate business model. By systematically evaluating the brand
In the autumn of 2010, initial preparations were made for the planned portfolios of the various market groups and product portfolios, the
industrial implementation of inkjet technology for TenCate Protective coherence between the brands, customers and products in each market
Fabrics in Nijverdal (NL). This process is being followed closely by this is intensified, structurally enhancing the corporate image and
market group’s site in America, since there are also opportunities in reputation.
the US market. This technological switch is a complex process, but
could amount to a revolution in the field of textile finishing. By basing the marketing strategy on the TenCate business model, it
can be deployed along the entire value chain. Industrial branding is an
Textile waste important part of the marketing strategy of TenCate, even though it
The possibilities for reuse and recycling are steadily increasing. operates primarily in a business-to-business environment.
Against this background, TenCate is investigating the possibilities for The importance of strong – protected and monitored – brands in an
converting textile waste into new products with added value. This fits industrial environment increased further during the past year. In
in with the Texperium sustainability project launched in 2010. particular, attention was devoted to the brands relating to product
champions, such as TenCate Cetex ® and TenCate Defender™ M.
PLANS FOR 2011
A number of new innovation projects are planned in the year ahead. The increasing visibility of TenCate at end-user level – at the beginning
Each of these is associated with a specific stage in the TenCate of the value chain – is made possible in part by earlier co-branding and
technology roadmaps. ingredient-branding initiatives. Following the introduction of two
The Open Innovation Centre for Advanced Materials (OICAM) is due to corporate labels in 2009 – TenCate Materialized™ at product level and
open in Nijverdal (NL), where TenCate will co-operate with numerous Powered by TenCate™ at company level – licensing agreements were
other parties in a series of innovative projects, such as the use of Norit drawn up by TenCate Outdoor Fabrics and TenCate Grass in particular
filtering technology combined with geotextiles. with market participants in order to make TenCate materials visible to
the consumer at the end of the value chain.
76 Royal Ten Cate

GEOSYNTHETICS
TenCate Miramesh ® biaxial

geosynthetics are used as a face wrap
material for steepend slope applications.
In the summer of 2010 TenCate
Geosynthetics obtained a patent for its
TenCate Miramesh ® SG. This open woven
geotextile was designed specifically
to reinforce steepened slopes and
wire basket wall applications and to
immediately produce a permanent green
appearance, thanks to its combination
with synthetic turf fibres. The product
eliminates the need for overseeding
steep slopes. By also eliminating the
need for topsoil infill, it immediately
creates a finished, fully vegetated
wall face. Additionally, the synthetic
turf fibres provide an extra layer of UV
protection, which doubles its long-term
UV resistance, thus increasing product
stability. As this open woven mesh biaxial
product provides an immediate green
appearance, it also solves the problem of
supporting vegetation growth in difficult
climatic conditions.
The issue of this patent for TenCate

Miramesh ® SG underlines the innovative
power of TenCate Geosynthetics. The
development of unique and patentable
products allows specific implementation
of the TenCate strategy of combining
product differentiation, technological
innovation and end-user marketing. Connected through end-user marketing
During the past year, careful work was again carried out to further protecting TenCate innovations is assessed at every stage, for example
strengthen the role of the corporate brand in order to promote the by means of patent filing.
identity, transparency and reputation of the company as a whole and
develop the brand promises. The corporate brand is one of the By consistently recording all relevant information on innovations,
company’s most important intangible assets. In July 2010 it was appropriate protection can be achieved. Furthermore, in consultation
announced that TenCate was among the top 100 companies with the with the departments involved, specific knowledge or skills can be
most valuable brands. TenCate ranks 85th with total corporate brand licensed to partners in the value chain in certain cases.
value of € 108 million. The brand rating of TenCate had previously been
set at A+ (extra strong). (Source: Brand Competence, The Dutch Top During the past decade there has been a strong increase in the number
100 corporate brands ranking 2010). of patents filed by and issued to TenCate. At the same time, the
effectiveness of the various patent portfolios is monitored closely.
A brand overview is available digitally on the TenCate internet site. In 2010 a total of over 650 patents were filed and issued.
PATENTS For competition reasons, no disclosures are made concerning the

TenCate conducts an active patent policy to protect technological details of these patents and their distribution within the company.
knowledge and skill with regard to a growing number of innovations.
This policy is based on the TenCate business model. The Legal Affairs CORPORATE SOCIAL RESPONSIBILITY
department co-ordinates the protection of intellectual property. This The TenCate sustainability policy forms an integral part of the pursuit
department was expanded with the addition of a representative office of continuity in the company. This policy relates in part to the quality
in the United States in 2010. of operational management, production processes and product
characteristics. Another part relates to treatment of the environment.
Within the TenCate market groups, the R&D departments decide jointly The remainder of the policy concerns numerous aspects of social and
with the commercial departments whether and when new materials, societal responsibility.
modules or systems will be introduced to the market as integrated or
non-integrated products. Regular co-operation takes place with TenCate products and systems make a substantial contribution to a
partners in the value chain. On the basis of the TenCate business better world in which trends such as safety and protection,
model, the research and development process is associated with sustainability and the environment are central. The market themes
process management, business development (market development) and derived from these trends include personal safety, protection of the
product and market management. This approach guarantees at the environment, limitation of energy consumption and CO 2 emissions,
same time that the company will remain constantly ‘connected’ with waste and sludge processing, product recycling, water management
end users for whom standardisation, standards and a growing number and environmental care. It is an important task for TenCate to
of sustainability aspects are of central importance. The possibility of formulate answers to these trends and themes, propose concrete
Recycling of carbon composites: gains in terms of the environment and materials

More and more companies are realising that supplies of raw materials and additives are not inexhaustible. By using smart
development and production techniques and choosing recyclable basic materials and ‘green’ suppliers, it is possible to give new
life to valuable waste materials. With small logistical adjustments to the collection system for carbon woven edges, thermoplastic
prepregs and sawing waste from laminates, Ten Cate Advanced Composites bv is managing to achieve considerable savings in
the costs of its waste streams. The high-grade composite waste is particularly suitable for recycling. It can be used to strengthen
diecast parts for industrial applications.
78 Royal Ten Cate

solutions and thereby drive developments in a positive direction. SUSTAINABILITY
It keeps the company alert in striking an optimum balance between In certain markets, a lengthy process is undertaken in order to obtain
quality and environmental policy. specifications of sustainable or more sustainable materials. The
aviation industry is a good example. Product innovation is then a lever
TenCate operating companies implemented numerous important to prise open the door to long-term solutions, aided by the rise in fuel
aspects of corporate social responsibility in 2010. Thanks to the direct costs due to the expected scarcity in the (near) future. The further
basis in the TenCate business model, concrete results were again tightening of noise abatement measures by governments is also
achieved in the past year in terms of quality and sustainability, both in contributing to this. Thanks to strong, lightweight composite materials,
the process and product management and in market management. TenCate provides a range of sustainable solutions. These are then
As a result, a growing number of products (materials, modules or transposed into other markets and sectors. To that end, the new
systems) of TenCate have sustainable functionalities or a completely TenCate Industrial Composites market group was established at the
sustainable composition. end of 2010, which will focus among other things on the use of
composite materials in automotive, wind energy and other industrial
The future availability of essential natural resources (biodiversity) is a applications.
growing point of attention for TenCate. TenCate aims to maintain
control of developments by focusing increasingly on numerous sub- Composites are used increasingly in civil aviation. Existing aircraft
areas – such as integrated environmental policy, the prevailing energy already contain approximately 25% composites, such as tail pieces,
policy, the progressive policy on emission allowances, the (eco-) wing ribs and interior components. New generations of aircraft such
efficiency of production and the intended biobased innovations. as the A380 and the Boeing 787 comprise more than 50% composites.
That makes a growing contribution to fuel reduction, noise abatement
and efficiency. In April 2010, TenCate Advanced Composites and its
partners received the JEC Award 2010 for the innovative use of
composite laminate in the tail section of the Gulfstream G650 business
aircraft.
In the autumn of 2010, a number of trial locations in Europe were

equipped with a fully recyclable synthetic turf lawn for landscaping,
a first in this industry. Thanks to sophisticated product design, the
processed materials can easily be separated at the end of the lawn’s
life and reused directly in the TenCate production process.

Thermoplastic materials are frequently

used in the aircraft industry, but still
limited in high load-bearing aircraft
parts. The new generation of plastic
composite materials consists of a
thermoplastic resin and fibres. The
resin melts when heated and can be
modelled into any desirable shape.
These advanced materials are important
for the long-term development of
more sustainable aviation. TenCate
Advanced Composites and a number of
Dutch companies and institutes have
specialized during the past few years
in the development and use of new
thermoplastic composite materials and
corresponding technology.
In the TAPAS consortium there is

collaboration with aircraft manufacturer
Airbus for material, processing and
joining technologies and design.
The technology is being specifically
developed for future Airbus applications,
including primary structural parts like
the fuselage and wings. The aim is to put
Airbus and the thermoplastics cluster in
an excellent position for future Airbus
programs. These different technologies
are required for the construction and
testing of full-scale demonstrators:
a fuselage scale and a torsion box.
Preparations were made in 2010 and in
2011 the demonstrators will be built. Connected through open innovation
QUALITY AND THE ENVIRONMENT Steps have been taken to increase the comparability of these data.
In the manufacturing process TenCate devotes specific attention to the In the Netherlands, work began with a new eco-tool which provides
responsible handling of raw materials, reduction of waste and rejects substantiated and comparative information on the environmental
and recycling. Quality assurance is and will remain the guiding impact of textiles and other materials. TenCate Protective Fabrics and
principle. That starts with product design and ongoing product TenCate Outdoor Fabrics are involved as pilots in the implementation in
development. TenCate aims to impact the environment as little as 2011. The environmental categories in the ultimate scorecard include
possible. impact on the climate, CO 2 equivalent, energy, water and chemical
consumption, transport and land occupancy. Various processes or
This principle is part of the code of conduct for employees. TenCate products are compared, and the effects of adjustments to the process
gives the utmost priority to a safe working environment worldwide, or product are visible. That makes it even easier to set priorities for any
in order to prevent industrial accidents and protect the operating and measures to improve the environmental profile. In addition, the relative
business environment. Quality, Health & Safety and Environment environmental contributions of the products or processes can be
officers have been appointed in most operating companies. clearly determined. It is then possible to ascertain which products have
They monitor the performance in these areas on the production sites. a minimal environmental footprint during the production, use and
The corporate risk manager once again visited all production sites waste phases.
worldwide in 2010. Adjustments and improvements were made where
necessary and feasible. This approach is in line with the industry objectives. In a European
context, the Modint sector organisation drew up a roadmap in 2010 for
Almost all production sites have been established or certified in the period to 2030. By that time, the technical textile industry should
accordance with ISO 9001 and/or ISO 14001 standards. For certain be able to provide a flexible and sustainable solution for the needs of
processes – such as the production of materials for aviation, customers and users. TenCate is leading the way in pursuing this
antiballistics and protective fabrics, additional standards and objective. By already working further on technologies and techniques
requirements apply. Environmental legislation and environmental care for the processing of so-called biobased, biodegradable, recyclable or
are guaranteed in the quality policy. In the value chain, they form the secondary raw materials, it will be increasingly easy for TenCate to
basis for dealing with suppliers, but also with customers. That ensures manufacture biologically, chemically or mechanically recyclable
that the production process and the chain remain controllable. products by using cleaner production techniques. The technology
The theme of chain responsibility fits in closely with the value chain roadmaps used by TenCate point the way to the creation of future-
management applied by TenCate. The value chains of the market proof (sustainable) functionalities and materials.
groups of TenCate are presented transparently in this report, although
the underlying details are not disclosed, for competition reasons.
Similarly, due to the confidentiality of quality and environmental data,
no quantitative information is disclosed.

TenCate believes that it limited environmental risks to the best of its TenCate among other things chairs the European Technology Platform
ability once again in 2010. On the basis of the environmental control (ETP) for the Future of Textiles and Clothing in order to stimulate
systems, the company endeavoured to reduce the use of raw materials, renewal and sustainability in the sector. TenCate chairs the governing
water and energy consumption and emissions. Local legislation and board of Modint, the Dutch sector organisation.
regulations were implemented by the Quality, Health & Safety and
Environment officers. The high European standards form the guiding Once again in 2010, TenCate Grass worked with national and
principle for production site at other locations around the world. international football federations on the future standardisation and
The waste water from textile finishing in the Netherlands and the standards for football on synthetic turf. At the end of 2010, new test
United States is treated in internal installations. Heat and cold pitches were laid, on which scientific research will be carried out into
storage facilities are also used to conserve energy. Only chemicals the sport effects of new (woven) synthetic turf systems.
and dyes listed in the textile environmental database are used in the
Netherlands. TenCate purchases most chemicals and artificial fibres Progress was made in 2010 with the development of inkjet technology
from multinationals worldwide which conduct a policy focused on for textile processes. Work started at the end of the year on the
sustainability. construction of the first trial machine, which will be installed in a trial
plant in the Netherlands in 2011. This revolutionary technology may
The TenCate operating companies devote a great deal of attention to represent a breakthrough for the entire textile sector. In view of its
the control of waste flows. In addition to coherent waste separation, environmental aspects – clean manufacturing industry, high degree of
various production sites maintain a mass balance sheet. This serves process automation, efficient processes (higher productivity and
as preparation for the limitation of waste flows in the entire production flexibility), lower energy consumption, enormous water savings, local-
process. Specific materials such as glass and bulbs, board and paper, for-local production and mass customisation – this development
wood, iron and steel are separated as far as possible. Any hazardous process is part of a wide European innovation programme.
waste is collected separately and removed by recognised processing An international conference in December 2010 was presented with
companies. The quantity of residual process waste that is recycled is the results of the European DigiTex project, in which TenCate had
gradually being increased. Some plants are now approaching full a leading role.
recycling.
SOCIAL COMMITMENT
In order to make progress in the sector, TenCate Protective Fabrics took TenCate has a high degree of social commitment. Initiatives take place
part in various standardisation committees again last year, on both at almost every production or office site around the world to expand
a Dutch (NEN standard) and a European (CEN standard) scale. the links with stakeholders or interested parties. In most cases such
By exerting targeted influence on standards and requirements which close relationships have already existed for a long time. That is the
products must fulfil, it is possible simultaneously to achieve the case, for example, of the principal sponsorship of TenCate of the
maximum for end-users and the environment. In a European context, Heracles Almelo professional football club, as well as the sponsorship
82 Royal Ten Cate

of the Military Boekelo, Almelose Ruiterdagen and Triathlon Holten STATEMENT BY THE EXECUTIVE BOARD
(all in the Netherlands), among others. In 2010, TenCate became As the Executive Board of Royal Ten Cate, we have prepared the
a sponsor and gave its name to TenCate Sportboulevard Enschede, annual report and the financial statements for 2010.
where around 20 amateur sports associations work closely with the
local authority and businesses in order to publicise recreational sports We declare that to the best of our knowledge:
among the population. Synthetic turf sports systems fulfil an important ◾ The financial statements give a true and fair view of the assets,
role in this regard. On the basis of the FieldLab approach, research and liabilities and the financial position of the company and its
development is being carried out in co-operation with bodies such as consolidated businesses;
the University of Twente. ◾ The annual report gives a true and fair view of the position on the
balance sheet date and the state of affairs of the company and its
TenCate Advanced Armour and TenCate Protective Fabrics are taking associated companies during the year and that the principal risks
part in interesting initiatives in both Europe and America in order to have been stated in the annual report.
support wounded soldiers during their recovery and return to society.
Almelo, 1 March 2011
IDENTITY AND INTEGRITY
All employees within TenCate have access to ‘10Cate’, which Executive Board
represents the identity of the company. These ten core values are L. de Vries, President and CEO
universal within the worldwide company. 10Cate is centred on the J. Lock, CFO
customer and is entirely consistent with the TenCate business model.
10Cate and the business model provide the guiding principles for each
employee.
One of the TenCate core values is reliability. The integrity code applies
to everyone employed by TenCate or its operating companies. The code
is part of each individual contract of employment. A central compliance
officer and a confidential adviser have been appointed to support the
code.
TenCate Sportboulevard Enschede: a field lab for sports innovations

TenCate has linked its name to Sportboulevard Enschede, where high-quality facilities are being created for recreational sports
and an innovative programme is being set up for new sports facilities based on synthetic turf. TenCate contribution includes
the development of innovative sports facilities based on various uses of artificial turf and the creation of a field lab, where new
developments can be tested scientifically and in practical situations. Sport is an innovative market. Sponsorship of sporting
activities gives TenCate a direct link to technological innovations in sport. Sport sponsorship is one of the ways in which
TenCate demonstrates its social commitment.

INDUSTRIAL COMPOSITES
The Superbus concept was developed

a couple of years ago by former
astronaut Prof. Wubbo Ockels. The
Superbus can provide comfortable,
demand-driven point-to-point transport
to 23 passengers, and, thanks to its
high speed, can compete with cars
and trains. The electrically powered
Superbus consumes as much energy
when driving at 250 kilometres per hour
as a normal bus at 100 km per hour.
The Superbus was officially presented
in Amsterdam at the beginning of
December 2010.
TenCate Advanced Composites supplied

various composite materials for the
construction of the Superbus. In addition
to composites for its construction,
carbon material was supplied for the
panels of the hinged doors. Thanks
to its excellent safety features, this
material has already been widely used
in the interior of aircraft. The use of
composite materials makes the 15-metre
long Superbus low in weight and yet
extremely strong. Its chassis is made
entirely of carbon fibre composite from
TenCate and others. The Superbus
consists of several compartments,
accessible on each side through eight
hinged doors. The door panels on the
inside are made of TenCate Cetex ®
fireproof carbon laminate. Connected through product differentiation
Financial statements 2010
Royal Ten Cate
Consolidated profit and loss account 88
Consolidated statement of comprehensive income 89
Consolidated balance sheet 90
Consolidated cash flow statement 92
Consolidated statement of changes in group equity 94
Notes to the consolidated financial statements 95

1. General information on Royal Ten Cate 95
2. General principles for financial reporting 95
3. Principles for the preparation of the financial
statements 96
4. Consolidation principles 96
5. Foreign currencies 97
6. Derivatives 98
7. Hedge accounting 99
8. Segment reporting 99
9. Revenues 99
10. Government subsidies 100
11. Raw materials and manufacturing supplies 100
12. Lease payments 100
13. Financial income and expenses 100
14. Profit tax 101
15. Earnings per share 102
16. New standards and interpretations
not yet applied 102
17. Principles for the preparation
of the cash flow statement 102
18. Intangible assets 102
19. Tangible fixed assets 104
20. Inventories 105
21. Trade debtors and other receivables 105
22. Cash and cash equivalents 105
23. Impairment 105
Royal Ten Cate Annual Report 2010 85

24. Share capital 106 Notes to the consolidated balance sheet 119
25. Pension liabilities 107 38. Intangible assets 119
26. Share-based payments 108 39. Tangible fixed assets 122
27. Provisions 108 40. Investments in associated companies
28. Long-term debts 109 and financial fixed assets 123
29. Trade creditors 109 41. Deferred profit tax assets and liabilities 125
30. Determination of fair value 109 42. Inventories 127
43. Trade debtors 127
44. Other receivables 128
Notes to the statement of comprehensive income 111 45. Cash and cash equivalents 128
31. Operating segments 111 46. Total shareholders’ equity 128
32. Acquisitions and divestment of 47. Earnings per share 131
participating interests 113 48. Long-term debts 132
33. Personnel costs 115 49. Pension liabilities 134
34. Other operating costs 115 50. Provisions 137
35. Net financial expenses 116
36. Profit tax 117 Other information 139
37. Result from divested operations 118 51. Financial instruments 139
52. Liabilities not shown in the balance sheet 146
53. Investment liabilities 147
54. Contingent liabilities 147
55. Subsequent events 147
56. Related parties 147
57. Estimates and judgments formed
by the management 150
86 Royal Ten Cate Annual Report 2010

Company financial statements 151
58. Company profit and loss account 151
59. Company balance sheet (before appropriation
of the result) 151
Notes to the company financial statements 152

60. Financial fixed assets 152
61. Equity 152
62. Called and paid-up capital 153
63. Ordinary shares 153
64. Share premium reserve 153
65. Legal reserves 153
66. Other reserves 154
67. Option plan 154
68. Provisions 158
69. Long-term liabilities 158
70. Short-term liabilities 158
71. Auditor’s fees 159
72. Liabilities not shown in the balance sheet 159
Other information 160
Ten-year summary 164

Consolidated profit and loss account
For the financial year ending on 31 December, in millions of euros note 2010 2009
Revenues 31 984.5 842.1
Changes in inventories of finished products and work in progress – 17.8 29.8

Raw materials and manufacturing supplies 501.1 391.6
Work contracted out and other external expenses 73.9 63.1
Personnel costs 33 188.0 173.0
Depreciation 39 34.5 33.9
Amortisation 38 10.4 8.8
Other operating costs 34 119.8 109.2
Total operating expenses 909.9 809.4
OPERATING RESULT 74.6 32.7
Impairment of financial fixed assets 35 – – 4.9

Financial income 35 0.6 1.2
Financial expenses 35 – 10.6 – 9.0
NET FINANCIAL EXPENSES – 10.0 – 12.7
RESULT BEFORE PROFIT TAX 64.6 20.0

Profit tax 36 – 17.9 – 5.6
NET RESULT 46.7 14.4
Result from divested operations after profit tax 37 – 9.5
Net result from associated companies – 1.3 – 0.8
RESULT AFTER PROFIT TAX 45.4 23.1
Result attributable to:

Shareholders of the company 46.0 23.9
Non-controlling interests – 0.6 – 0.8
Result after profit tax 45.4 23.1
Weighted average number of shares (x 1,000) 47 25,026 24,544

Weighted average number of shares after dilution (x 1,000) 47 25,216 24,616
Earnings per share (in euros) 47 1.84 0.97
Diluted earnings per share (in euros) 47 1.82 0.97
The notes in sections 1 to 72 form an integral part of these financial statements.

Consolidated statement of comprehensive income
RESULT AFTER PROFIT TAX 45.4 23.1
Other comprehensive income after profit tax

Foreign currency translation differences for foreign activities 46 19.0 – 6.5
Effective part of changes in the hedging reserve (hedge accounting) 46 – 3.4 – 0.2
OTHER COMPREHENSIVE INCOME AFTER PROFIT TAX 15.6 – 6.7
TOTAL COMPREHENSIVE INCOME AFTER PROFIT TAX 61.0 16.4
Attributable to:
Shareholders of the company 61.2 17.0
Non-controlling interests – 0.2 – 0.6
TOTAL COMPREHENSIVE INCOME AFTER PROFIT TAX 61.0 16.4

Consolidated balance sheet
in millions of euros note 31 December 2010 31 December 2009
NON-CURRENT ASSETS
Goodwill 38 192.6 161.9
Other intangible assets 38 50.2 41.9
Tangible fixed assets 39 214.2 214.7
Investments in associated companies 40 5.2 18.9
Financial fixed assets 40 10.1 6.6
Deferred profit tax assets 41 20.3 19.8
Total non-current assets 492.6 463.8
CURRENT ASSETS
Inventories 42 216.9 155.0
Receivables
Trade debtors 43 151.0 100.8
Profit tax receivables 0.7 3.2
Other receivables 44 18.1 12.9
Cash and cash equivalents 45 11.6 12.8

Total current assets 398.3 284.7
TOTAL ASSETS 890.9 748.5

in millions of euros note 31 December 2010 31 December 2009
GROUP EQUITY 46
Share capital 63.8 62.7
Share premium reserve 45.8 46.9
Translation reserve 3.3 – 15.3
Hedging reserve – 3.6 – 0.2
Reserve for own shares – 10.4 – 11.7
Other reserves and undistributed result 333.0 298.4
Total shareholders’ equity 431.9 380.8
Non-controlling interests 3.8 4.1
Group equity 435.7 384.9
NON-CURRENT LIABILITIES
Long-term debts 48 195.2 192.0
Pension liabilities 49 18.5 21.0
Provisions 50 10.2 10.4
Deferred profit tax liabilities 41 4.2 4.3
Total non-current liabilities 228.1 227.7
CURRENT LIABILITIES
Cash loans, overdrafts 45 55.7 14.7
Repayment of long-term debt 48 1.4 1.6
Trade creditors and other payables 159.3 112.1
Provisions 50 7.1 4.8
Profit tax liabilities 3.6 2.7
Total current liabilities 227.1 135.9
Total liabilities 455.2 363.6
TOTAL GROUP EQUITY AND LIABILITIES 890.9 748.5

Consolidated cash flow statement
CASH FLOW FROM OPERATING ACTIVITIES

Result after profit tax 45.4 23.1
Adjustments for:
Depreciation 39 34.5 33.9
Amortisation 38 10.4 8.8
Net financing expenses before exchange rate differences 35 10.4 8.0
Impairment of financial fixed assets – 4.9
Profit tax 36 17.9 5.6
Net result from associated companies 1.3 0.8
Result from divested operations, after profit tax 37 – – 9.5
Result from sale of tangible fixed assets 34 – 0.1 – 1.3
Costs of option scheme 1.4 1.2
Change in provisions and pension liabilities – 6.6 – 2.2
CASH FLOW FROM OPERATING ACTIVITIES BEFORE
CHANGE IN WORKING CAPITAL 114.6 73.3
CHANGES IN WORKING CAPITAL

Inventories – 43.3 48.1
Receivables – 36.0 62.9
Short-term liabilities 19.8 – 15.5
– 59.5 95.5
CASH FLOW FROM OPERATING ACTIVITIES 55.1 168.8
Interest paid – 8.3 – 9.0
Profit tax paid – 17.7 – 15.0
NET CASH FLOW FROM OPERATING ACTIVITIES 29.1 144.8

in millions of euros note 2010 2009
CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from sale of tangible fixed assets 34 0.9 4.4
Interest received 0.1 1.1
Divested operations less cash – 22.0
Acquisition of subsidiaries less cash acquired 32 – 24.0 – 0.3
Investments in intangible assets 38 – 5.1 – 4.2
Investments in tangible fixed assets 39 – 16.2 – 13.1
Investments in associated companies 40 – 0.2 – 18.4
Investments in other participating interests 40 – 0.5 –
Increase in long-term receivables – 2.1 – 2.0
NET CASH FLOW FROM INVESTING ACTIVITIES – 47.1 – 10.5
NET CASH FLOW FROM OPERATING AND INVESTING ACTIVITIES – 18.0 134.3
CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from exercise of share options 1.3 0.1
Repayment of long-term debts – 221.6 – 117.3
Drawing of long-term debts 203.8 –
Dividend payment to shareholders – 5.9 – 4.5
NET CASH FLOW FROM FINANCING ACTIVITIES – 22.4 – 121.7
CHANGE IN CASH AND CASH EQUIVALENTS – 40.4 12.6

Cash and cash equivalents on 1 January 45 – 1.9 – 14.0
Exchange rate and translation differences in cash and cash equivalents – 1.8 – 0.5
CASH AND CASH EQUIVALENTS ON 31 DECEMBER 45 – 44.1 – 1.9

Consolidated statement of changes in group equity
in millions of euros Other
Reserve reserves and Non-
Share Share Translation Hedging for own undistributed controlling Group
capital premium reserve reserve shares result Total interests equity
BALANCE AS AT 1 JANUARY 2009 59.9 49.7 – 8.6 – – 11.8 277.7 366.9 5.1 372.0
TOTAL COMPREHENSIVE INCOME
FOR THE REPORTING PERIOD
Result after profit tax 23.9 23.9 – 0.8 23.1
Currency translation differences – 6.7 – 6.7 0.2 – 6.5
Hedging result after profit tax – 0.2 – 0.2 – 0.2
Total – – – 6.7 – 0.2 – 23.9 17.0 – 0.6 16.4
TRANSACTIONS WITH SHAREHOLDERS

Dividend to shareholders 2.8 – 2.8 – 4.5 – 4.5 – 4.5
Share-based payment transactions 1.2 1.2 1.2
Issue of repurchased shares 0.1 0.1 0.1
Acquisition of non-controlling interests – 0.4 – 0.4
Total 2.8 – 2.8 – – 0.1 – 3.3 – 3.2 – 0.4 – 3.6
BALANCE AS AT 31 DECEMBER 2009 /
1 JANUARY 2010 62.7 46.9 – 15.3 – 0.2 – 11.7 298.4 380.8 4.1 384.9
TOTAL COMPREHENSIVE INCOME
FOR THE REPORTING PERIOD
Result after profit tax 46.0 46.0 – 0.6 45.4
Currency translation differences 18.6 18.6 0.4 19.0
Hedging result after profit tax – 3.4 – 3.4 – – 3.4
Total – – 18.6 – 3.4 – 46.0 61.2 – 0.2 61.0
TRANSACTIONS WITH SHAREHOLDERS

Dividend to shareholders 1.1 – 1.1 – 5.9 – 5.9 – 5.9
Share-based payment transactions 1.4 1.4 1.4
Issue of repurchased shares 1.3 1.3 1.3
Acquisition of non-controlling interests
without a change of control – 6.9 – 6.9 – 0.1 – 7.0
Total 1.1 – 1.1 – – 1.3 – 11.4 – 10.1 – 0.1 – 10.2
BALANCE AS AT 31 DECEMBER 2010 63.8 45.8 3.3 – 3.6 – 10.4 333.0 431.9 3.8 435.7

Notes to the consolidated financial statements
ACCOUNTING STANDARDS
1 GENER AL INFORM AT I ON ON ROYAL T E N CAT E

Koninklijke Ten Cate nv (Royal Ten Cate) (the company) is established in Almelo, the Netherlands.
The consolidated financial statements of the company comprise the financial statements of the company and its
subsidiaries (referred to collectively as the ‘Group’) and the Group’s interests in other (non-consolidated)
participating interests, associated companies and proportionally consolidated joint ventures. The financial
statements have been prepared by the Executive Board.
The 2010 annual report and accounts were discussed on 1 March 2011 at the meeting of the Supervisory Board.
They were released for publication on 2 March 2011. They will be presented to the general meeting of
shareholders for adoption on 21 April 2011.
The parent company financial statements form part of the 2010 financial statements of Royal Ten Cate.
Royal Ten Cate has made use of the exemption pursuant to article 2:402 of Book 2 of the Netherlands Civil Code
with regard to the parent company financial statements.
The original financial statements were prepared in the Dutch language. This document is a version translated
into English. In the event of any differences between the English and the Dutch text, the latter shall prevail.
2 GENER AL P RINC I PL E S F OR F I NANCI AL RE PORT I NG

The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards, as adopted within the EU (hereinafter EU-IFRS) and with Part 9 of Book 2 of the Netherlands Civil
Code.
Changes to the principles for financial reporting

Effects of acquisitions
With effect from 1 January 2010 the Group is applying IFRS 3 Business Combinations (2008) in determining the
effects of acquisitions. The amended principles are not being applied retroactively and have no significant effect
on earnings per share.
For acquisitions on or after 1 January 2010 the Group determines the goodwill on the basis of the fair value of
the paid consideration, the carrying amount of any non-controlling interests in the acquired company and,
if applicable, the fair value of the previous interest in the acquiree. The net amount of the identified assets
acquired and the accepted liabilities is deducted. These amounts are determined from the date of acquisition.
If the goodwill is negative, the book profit is stated directly in the profit and loss account. Any non-controlling
interests are valued at their share of the carrying amount of identifiable assets of the acquiree on the acquisition
date.
With effect from 1 January 2010 any transaction costs other than those related to the issue of loans or equity
instruments allocated to the Group as a result of acquisitions are charged to the result when they arise.

> NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Effects of acquisitions of non-controlling interests

With effect from 1 January 2010 the Group is applying IAS 27 Consolidated and Separate Financial Statements
(2008) in determining the effects of acquisitions of non-controlling interests. The amended principles are not
being applied retroactively and have no effect on earnings per share in the reporting period. From 1 January
2010 acquisitions of non-controlling interests are valued as transactions with shareholders (charged directly to
equity) and therefore no goodwill is recognised. Previously, goodwill on the acquisition of non-controlling
interests was valued and represented the amount by which the costs of the additional investment exceeded the
net asset value of the interest in the company on the acquisition date.
3 P RINC IPLES FOR T HE PRE PARAT I ON OF T HE F I NAN C I A L S TAT E M E N T S

The financial statements are presented in millions of euros (the euro being the Company’s functional currency)
unless stated otherwise. The financial statements have been prepared on the basis of historical cost, except for
the following material balance sheet items, which are valued at fair value: derivatives and financial instruments
held for trading purposes.
In preparing the financial statements, the Executive Board has used estimates and assumptions which affect
the application of accounting standards and reported amounts stated in the consolidated financial statements
(see note 57). The actual results may differ from such estimates. The estimates and underlying assumptions are
continuously assessed. Revised estimates are stated in the period in which the estimates are revised and in
future periods in which the revision has consequences.
The accounting principles set out below have been applied consistently by the Group’s subsidiaries and joint
ventures for the periods presented in these consolidated financial statements. Certain comparative information
has been adjusted for the sake of comparability.
4 C ONS OLIDATION PRI NCI PL E S

4.1 Subsidiaries
Subsidiaries are undertakings in which the company directly and/or indirectly has a controlling interest.
The assessment of whether there is a controlling interest takes account of potential voting rights that are
exercisable at the time. The company has a direct or indirect controlling interest if it can determine the financial
and operational policy of a company in such a way that it can derive a benefit from the activities of that
company. The financial statements of subsidiaries are included in the consolidated financial statements from
the first date on which control is exercised to the date on which such control ends. Non-controlling interests in
the Group result and the shareholders equity of the Group are stated separately. Losses in connection with non-
controlling interests are allocated to the non-controlling interests even if a deficit arises for the non-controlling
interests in question.

4.2 Associated companies, joint ventures and other participating interests
Associated companies are entities in which the Group has significant influence on the financial and operational
policy, but in which it has no controlling interest and which therefore are not included in the consolidation.
Significant influence is assumed to exist if the group holds between 20% and 50% of the voting rights in another
entity. Associated companies are accounted for using the equity method and are stated at cost including
transaction costs on first-time inclusion.
If the Group’s share in losses exceeds the book value of the associated company, the book value is stated at
zero and further losses are no longer stated, unless the Group has entered into a liability or has made payments
on behalf of the associated company.
Joint ventures are companies over which the Group has joint control and in which such control has been set
forth in an agreement and in which strategic decisions on the financial and operational policy are taken on the
basis of unanimity. Joint ventures are proportionally consolidated.
Other participating interests over which no significant influence is exercised are valued at fair value and the
dividend is stated in the profit and loss account when it is made payable. If no fair value is available and other
methods do not result in a reasonable estimate, the investment is valued at cost less impairment.
4.3 Elimination of transactions on consolidation

Intragroup balances and transactions between the subsidiaries in the Group and unrealised profits and losses
on such transactions are eliminated in the preparation of the consolidated financial statements. Unrealised
profits on Group transactions with proportionally consolidated joint ventures and investments stated in
accordance with the equity method are eliminated in proportion to the Group’s interest in the investment.
Unrealised losses are eliminated in the same way as unrealised profits, but only to the extent that there is no
indication of impairment.
5 FOR EIGN CURR EN CI E S
5.1 Transactions in foreign currencies

Receivables and liabilities denominated in foreign currencies are converted into euros at the rate prevailing on
the reporting date. Transactions in foreign currencies are converted into euros at the exchange rate applying on
the transaction date. Foreign exchange translation differences are stated in the profit and loss account.
Non-monetary assets and liabilities which are denominated in foreign currencies and valued on the basis of
historical cost are converted at the exchange rate on the transaction date.

5.2 Subsidiaries and joint ventures outside the eurozone

The revenues and expenses of operating companies outside the eurozone are converted into euros at the
exchange rate on the transaction date. Assets and liabilities including goodwill and fair value adjustments in
respect of acquisitions are converted at the rate on the reporting date. The resulting translation differences are
carried in other comprehensive income. The proportionate share of the currency translation difference is
allocated to any non-controlling interests. If an activity outside the eurozone is fully or partly divested, the
accumulated exchange rate difference is transferred from equity to the profit and loss account as part of the
result of the sale. The rates of the main currencies against the euro are as follows:
Closing rate Average rate
2010 2009 2010 2009
US dollar 1.34 1.43 1.33 1.39

British pound 0.86 0.89 0.86 0.89
Danish krone 7.45 7.44 7.45 7.45
UAE dirham 4.93 5.27 4.88 5.12
Malaysian ringgit 4.10 4.91 4.29 4.92
Singapore dollar 1.71 2.01 1.81 2.02
Chinese yuan 8.82 9.79 9.00 9.54
Australian dollar 1.31 1.60 1.45 1.78
6 DER IVATIV ES
The Group uses derivatives in order to hedge exchange rate and interest rate risks resulting from operating,
financing and investing activities. Examples are currency options and forward contracts as well as interest rate
caps and swaps. In accordance with its treasury policy, the Group does not use derivatives for trading purposes.
Nor does it issue such derivatives. Derivatives are treated as trading instruments. Derivatives are valued at fair
value on first-time inclusion. The resulting income or expense is stated directly in the profit and loss account
unless hedge accounting is applied (see section 7).
The fair value of derivatives is the estimated amount which the Group would receive or would have to pay in
order to terminate the derivative on the reporting date, taking into account the current exchange rates and the
current interest rate.

7 HEDGE ACC OUNT I NG
Where specific conditions are met, hedge accounting can be applied. Under these specific conditions, there
must be a demonstrable relationship between the variability of the future cash flows or balance sheet positions
(of the hedged item) and the hedging instrument, the relationship must be documented and the hedge must be
sufficiently effective. The Group applies cash flow hedge accounting to interest rate derivatives. In this situation,
the effective portion of the changes in the fair value of the derivative financial instrument is stated directly in
other comprehensive income of the hedging reserve in equity. The ineffective portion of the changes in the fair
value of the derivative financial instrument is stated directly in the profit and loss account. If the hedged future
transactions are stated in the profit and loss account, the transfer takes place from equity to the profit and loss
account or is stated in the cost price on the first-time inclusion of the non-financial asset or liability. If no hedge
accounting is applied, profits or losses on the derivative financial instrument are stated directly in the profit and
loss account.
8 S EGMENT REPORT I NG
An operating segment is a part of the Group conducting business activities which can result in revenues and
expenses, including revenues and expenses associated with transactions with other parts of the Group. The
Group determines and presents operating segments on the basis of the information reported internally to the
Chief Operating Decision Maker (CODM) committees, which take the important operating decisions in the
segment.
The operating results of an operating segment are assessed periodically by the CODM committees in order to
decide on the allocation of resources to the segment and for performance assessment.
The investment expenses of a segment concern the total expenses incurred during the reporting period for the
acquisition of tangible fixed assets and intangible assets with the exception of goodwill.
The assets and liabilities of the segment concern items which are or may reasonably be allocated directly.
Unallocated assets comprise profit tax receivables and cash and cash equivalents. The unallocated liabilities
comprise interest-bearing loans and profit tax liabilities.
9 REVENUES
Revenues comprise the revenues from goods and services supplied to third parties. These are stated at the
fair value of the consideration received or to be received, less taxes and any volume, trade or payment
discounts due.
Revenues from sales of goods are recognised in the profit and loss account when the main risks and benefits
of ownership have been transferred to the purchaser.
Revenues from services supplied are recognised in the profit and loss account in proportion to the extent
of performance of the work applying on the reporting date.

No revenues are recognised if the extent of the revenues cannot be reliably determined and if significant
uncertainties remain with regard to the collection of the remuneration due, the associated costs or the possible
return of goods, and also if there is a protracted management involvement with such goods.
The Group also carries out projects to manufacture assets under contracts with third parties. The costs relating
to a project recognized when they are incurred. Revenues from projects in progress are recognised in proportion
to the degree of completion of the project. Expected losses on projects are stated immediately in the profit and
loss account.
10 GOV ER NMENT SUBSI DI E S

Subsidies granted as compensation for expenses incurred by the Group are systematically stated as income in
the profit and loss account in the same period as that in which the subsidisable expenses are incurred and as
soon as there is a reasonable certainty that they will be received and that the Group will fulfil the attached
conditions. Subsidies granted to compensate the Group for the cost of an asset are systematically stated as
cost of sales in the profit and loss account during the useful life of the asset.
11 R AW MATERIALS AND M ANUFACT URI NG SUPPL IE S

The consumption of raw materials and manufacturing supplies is calculated on the basis of historical cost.
12 LEAS E PAY MENTS

12.1 Operational leasing
Lease payments in respect of operational leasing are stated in the profit and loss account on a straight-line
basis over the lease term. Remuneration received as an incentive to effect leases are stated as an integral part
of the total lease costs in the profit and loss account over the lease term.
12.2 Financial leasing

Lease payments are stated partly as financial expenses and partly as a repayment of the outstanding liability.
The financing costs are allocated to each period of the total lease term in such a way that this results in
a constant periodic interest rate on the residual balance of the liability.
13 FINANCIAL INCOM E AND E XPE NSE S

Financial income and expenses include the interest income and expenses on invested and borrowed monies,
interest charges on financial lease payments, foreign exchange rate differences, results from other participating
interests and results of derivatives for which no hedge accounting is used and the realised and ineffective
portion of the change in the fair value of derivatives for which hedge accounting is used. Interest income and
expenses are stated in the profit and loss account as they accrue on the basis of the effective interest method.
Material financial expenses in the construction period which are directly attributable to the acquisition,
construction or production of an eligible asset (which will require a considerable period before it is ready for
use or sale) are capitalised as part of the costs of that asset. Dividend income from other participating interests
is stated in the profit and loss account at the time at which the entity’s right to payment is established.

14 PR OFIT TAX
The tax on profit for the financial year includes the profit tax that is payable, available for set-off and deferred
in respect of the reporting period. The profit tax is stated in the profit and loss account, except where it relates
to items which are included directly in equity or in other comprehensive income. Profit tax that is payable and
available for set-off in respect of the reporting period is the profit tax which is expected to be payable on the
taxable result, calculated on the basis of tax rates which have been set on the reporting date, or on which a firm
decision has been taken by the reporting date, and any corrections to profit tax payable in respect of previous
years. Additional taxes on profit from dividend payments are stated at the same time as the liability to pay the
respective dividend.
A receivable / provision is recognised for deferred tax differences using the balance sheet liability method for
temporary differences between the book value of assets and liabilities for the financial reporting and the fiscal
book value of the items concerned. No provision is formed in respect of two temporary differences: non-tax-
deductible goodwill and the difference between the economic and fiscal value of subsidiaries, associated
companies, joint ventures and other participating interests. The amount of the provision for deferred profit tax
liabilities is based on the method by which the book value of the assets and liabilities is expected to be realised
or settled, using tax rates which, on the reporting date, have been specified by law or in material terms.
Deferred profit tax assets and liabilities are offset if there is a legally enforceable right to offset the profit tax
assets and liabilities and such assets and liabilities relate to profit tax imposed by the same tax authority on the
same taxable entity, or on different taxable entities which intend to offset the profit tax assets and liabilities or
whose profit tax assets and liabilities are realised simultaneously.
A deferred profit tax asset is only recognised in respect of unused tax losses, tax income and deductible
temporary differences to the extent that it is likely that future taxable profits will be available which can be
applied for the realisation of the timing difference. Deferred profit tax assets are reviewed on each reporting
date and reduced if it is no longer likely that the associated tax benefit will be realised.

15 EAR NINGS PER S HARE

The Group presents ordinary and diluted earnings per share for the ordinary share capital. The earnings per
ordinary share are calculated on the basis of the net result attributable to shareholders of the Group divided by
the weighted average number of ordinary shares in issue during the reporting period (corrected to take account
of own shares). In the calculation of the diluted earnings, the weighted average number of ordinary shares in
issue during the reporting period is corrected to take account of the potential dilutive effect on the ordinary
shares arising from the share options granted to employees.
16 NEW STANDARDS AND I NT E RPRE TAT I ONS NOT YE T A P P LI E D

A number of new standards, amendments to standards and interpretations were not in force in 2010 and have
therefore not been applied to these consolidated financial statements. None of these standards is expected to
have a significant effect on the consolidated financial statements of the Group.
17 P RINC IPLES FOR T HE PRE PARAT I ON OF T HE CASH FLO W S TAT E M E N T

Cash flows from operating activities are presented on the basis of the indirect method. Cash flows in foreign
currencies are converted at the exchange rate on the date of the cash flow or on a cash basis. Changes which
have not resulted in cash flows, such as exchange rate differences, acquisitions, financial lease liabilities,
changes in fair value, recognised share-related transactions and similar transactions are eliminated in this
statement. Dividends paid to shareholders are included in the cash flow from financing activities. Dividends
received are stated in the cash flow from investing activities, and interest paid is stated in the cash flow from
operating activities. Overdrafts which are immediately repayable and form part of the Group’s cash management
are included in the balance of cash and bank current accounts as part of the consolidated cash flow statement.
18. INTANGIBLE ASS E T S

18.1 Goodwill
Details of the valuation of goodwill on first-time inclusion from 1 January 2010 can be found in note 2. Up until
2000, goodwill was charged to equity. In the years 2001 to 2003 it was stated at cost less amortisation. Since 1
January 2004, goodwill has no longer been amortised but has been valued at cost less accumulated impairments.
The book value of the goodwill on investments stated in investments in associated companies is included in the
book value of the respective investment. An impairment loss on such an investment is not allocated to any
asset, including goodwill, that is part of the book value of the investment stated in accordance with the equity
method.
Goodwill is allocated to cash generating units and is tested each year on the reporting date to assess whether
there is any indication of impairment.

18.2 Other intangible assets
The other intangible assets consist of:
Research and development

Expenses for research activities carried out with a view to acquiring new scientific or technical knowledge
and insights are stated as an expense in the profit and loss account when they are incurred.
Expenses for development activities, in which research results are used for a plan or design for the production
of new or substantially improved products and processes, are capitalised if the development costs can be
reliably determined, product or process is technically and commercially feasible and the Group has sufficient
resources to complete the development and use or sell the asset. The capitalised expenses include material
costs, direct labour costs, financing costs and an appropriate portion of directly attributable overheads. Other
development costs are stated as an expense in the profit and loss account when they are incurred. The
capitalised development costs are valued at cost less accumulated amortisation and accumulated impairments
(see note 23).
Other intangible assets

Other intangible assets acquired by the Group relate to customer relationships, trademark rights, patents,
software and similar rights. These intangible assets are valued at cost less accumulated amortisation and
accumulated impairments (see note 23). Costs of internally generated goodwill and trademarks are stated as an
expense in the profit and loss account when they are incurred.
18.3 Expenses after first-time inclusion

Expenses after the first-time inclusion of capitalised intangible assets are capitalised only if they lead to an
increase in the future economic benefits embodied in the particular asset to which they relate. All other
expenses are charged to the profit and loss account when they are incurred.
18.4 Amortisation
Amortisation is calculated on the cost of the asset, less the residual value.
Amortisation costs are charged on a straight-line basis to the profit and loss account in accordance with the
estimated useful life of intangible assets. Goodwill is tested each year on the reporting date to assess whether
any impairment has arisen. The amortisation of other intangible assets begins as soon as the assets are
available for use.
The estimated economic life is as follows:
◾ Development costs 5 years
◾ Other intangible assets 3 – 14 years
The amortisation method, economic life and residual value are assessed periodically and adjusted if necessary.

19 TANGIBLE FIX ED ASSE T S
19.1 Owned assets

Tangible fixed assets are valued at cost less accumulated depreciation (see 19.4) and accumulated impairments
(see note 23).
The cost of self-manufactured assets comprises material costs, direct labour costs and any other costs
attributable directly to the preparation of the asset for use, any costs of dismantling and removing the asset, the
costs of restoring the location in which the asset is held and capitalised financing costs.
Where tangible fixed assets consist of components with differing useful lives, these are stated as separate
items under tangible fixed assets.
The profit or loss on the sale of a tangible fixed asset is determined by comparing the sales proceeds with the
book value of the tangible fixed asset. The net difference is stated under other operating income/expenses in
the profit and loss account.
19.2 Leased assets

Leases in which the Group actually assumes all the risks and benefits of ownership are classified as financial
leases. Tangible fixed assets which are required by means of financial leases are valued on first-time inclusion
at the lower of fair value and the present value of the minimum lease payments at the inception of the lease,
less accumulated depreciation (see note 19.4) and impairments (see note 23). Lease payments are stated as
described in note 12.
19.3 Expenses after first-time inclusion

Expenses incurred for the replacement of a component of a tangible fixed asset are capitalised provided the
future economic benefits resulting from the asset accrue to the Group and the cost of such replacement
expenses can be reliably determined. All other expenses are charged to the profit and loss account when they
are incurred.
19.4 Depreciation
Depreciation is calculated on the cost of an asset less the residual value. Depreciation is charged to the profit
and loss account on the basis of the straight-line method over the estimated economic life of each component
of a tangible fixed asset. Land is not depreciated.
The estimated economic life is as follows:
◾ buildings 33 years
◾ fixtures and installations in buildings 10 years
◾ plant and equipment 7 – 10 years
◾ inventory 5 years
◾ computers and office equipment 3 – 5 years
The depreciation method, economic life and residual value are assessed periodically and adjusted if necessary.

20 INVENTORIES
Inventories are stated at the lower of cost or net realisable value. The cost of inventories is based on the FIFO
(first in, first out) principle and includes the costs incurred for the acquisition of the inventories, their production
or conversion and bringing them to the existing location and condition. In the case of inventories of finished
products and work in progress, the cost includes in addition to the direct costs an appropriate portion of the
indirect costs based on the normal production capacity. The net realisable value is the estimated sale price in
ordinary operations, less the estimated costs of completion and the sale costs.
21 T RADE DEBTOR S AND OT HE R RE CE I VABL E S

Trade debtors and other receivables with a term of less than one year are stated at amortised cost less
impairments.
22 CASH AND CASH E QUI VAL E NT S

Cash and cash equivalents comprise cash balances and immediately claimable credit balances with an original
term of three months or less. Overdrafts at banks which are immediately claimable and form an integral part of
the Group’s cash management are included as part of the cash and cash equivalents for the purposes of the
cash flow statement.
23 IMPAIRMENT
The book value of the Group’s assets, except that of inventories (see note 20) and deferred profit tax assets (see
note 14) is examined at each reporting date in order to determine whether there are indications of impairment.
If there are such indications, an estimate is made of the realisable value of the asset. In the case of goodwill
and intangible assets which are not yet available for use, the realisable value is estimated at each reporting
date. This also applies if there is an indication of impairment.
An impairment is recognised when the book value of an asset or the cash generating unit thereof is higher than
the estimated realisable value. It is first charged to any allocated goodwill and then deducted proportionately
from the book value of the other assets.
For the testing of impairments, assets which cannot be tested individually are combined into the smallest
distinguishable group of assets which, as a result of continuous use, generates cash flow that is broadly
independent of the incoming cash flows from other assets or groups of assets (the cash generating unit). Taking
into account the operating segment before aggregation, cash generating units to which goodwill has been
allocated for the testing of goodwill with regard to impairment are combined in such a way that the level at
which such impairment is tested reflects the lowest level at which goodwill is monitored in internal reporting.
Goodwill acquired in a business combination is allocated to groups of cash generating units which are expected
to benefit from the synergy advantages of the combination.

23.1 Calculation of the realisable value

The realisable value is the higher of the recoverable amount, less costs to sell, and the value in use.
In determining the value in use, the present value of the estimated future cash flows is calculated using a
discount rate before tax which reflects both the current market valuations of the time value of money and the
specific risks relating to the asset or cash generating unit. In the case of an asset which generates no cash
receipts which are to a large degree independent of other assets, the realisable value is determined for the
cash generating unit to which the asset belongs.
23.2 Reversal of impairments

An impairment relating to goodwill cannot be reversed. In the case of other assets, an assessment is made on
the reporting date as to whether an impairment must be reversed if there is a change in the estimates on which
the realisable value was based.
An impairment is only reversed to the extent that the book value of the asset is not higher than the book value
which would have been determined after the deduction of depreciation, if no impairment had been recognised.
Goodwill which is part of the book value of an investment in an associated company is not recognised separately
and therefore not tested separately for impairment. Instead, the total amount of the investment in an associated
company is tested for impairment as a single asset if there are objective indications that the investment in an
associated company may be subject to impairment.
24 S HARE CAPITAL
24.1 Share capital

The share capital is classified as equity.
24.2 Repurchase of own shares

On the repurchase of share capital which is stated in the balance sheet as equity, the amount of the paid
consideration, including directly attributable costs, is stated as a change in equity. Repurchased shares are
classified in the reserve for own shares and presented as a deduction from equity.
24.3 Dividend
Dividend is stated as a liability in the period in which it is declared.

25 PENSION LIABILI T I E S
25.1 Defined contribution schemes

Liabilities relating to contributions to defined contribution pension schemes are charged to the profit and loss
account in the period to which they relate.
25.2 Defined benefit schemes

The Group’s net liability in respect of defined benefit pension schemes is calculated separately for each scheme
by estimating the amount of the future entitlement which employees have earned in the present and previous
reporting periods in exchange for their services. This entitlement is discounted in order to determine the present
day value, with the fair value of the fund investments being deducted. The discount rate is the yield on the
reporting date of bonds which have an AA credit rating and a period to maturity which approximates the term of
the Group’s liabilities and are denominated in the currency in which the entitlements arise. The calculation is
performed by an authorised actuary on the basis of the projected unit credit method. If the entitlements under a
pension scheme are increased, the proportion of the higher entitlement which relates to employees’ past service
is stated as an expense in the profit and loss account on a straight-line basis over the average period up to the
vesting of the rights. If the rights are vested immediately, the expense is stated immediately in the profit and
loss account.
With regard to the actuarial profits and losses that arise in the calculation of the Group’s liability under a
pension scheme, in so far as any accumulated actuarial profits or losses not yet recognised amount to more
than 10% of the present value of the gross liabilities in respect of defined benefit pension rights or of the fair
value of the fund investments if this is greater (in other words: remains within the corridor), that element is
recognised in the profit and loss account over the expected average remaining service period of the employees
participating in the scheme. For the remainder, the actuarial profit or loss is not recognised.
When the calculation results in a receivable for the Group, the recognised asset item is limited to an amount
not exceeding any unrecognised back-service costs and the present value of economic benefits in the form of
any future repayments by the fund or, if lower, future pension contributions.

26 SHAR E-BAS ED PAYM E NT S

The option scheme enables the Group’s management to acquire shares in Royal Ten Cate. The fair value of the
granted options is stated under personnel costs, with a corresponding entry in equity. The fair value is
determined on the grant date and is allocated over the period up to the time at which the management acquires
an unconditional right to the options. The amount stated as costs is adjusted annually to the number of options
which will be exercised. The fair value of the granted options is determined on the basis of the binomial model,
taking account of the conditions under which the options have been granted. Valuation factors include the share
price on the valuation date, the exercise price of the instrument, the expected volatility, the weighted average
expected term of the instruments (based on past experience and the conduct of the instrument holders),
the expected dividends and the risk-free interest rate (based on government bonds).
27 PR OV ISIONS
A provision is recognised in the balance sheet if there is a legally enforceable or actual obligation as a result of
a past event and it is likely that an outflow of resources will be required to settle such liability and such outflow
can be reliably estimated. If the effect of this is material, the provisions are determined by discounting the
expected future cash flows using a discount rate before profit tax which reflects the current market valuations
of the time value of money and, if necessary, the specific risks of the liability. Interest accrual is stated as
a financial expense.
27.1 Claims and guarantees

The provision for claims relates to damages claims and any litigation costs. The provision for guarantees relates
to goods and services supplied and is based on historical guarantee data.
27.2 Reorganisation
Reorganisation provisions are included if the Group has formalised a detailed plan for the reorganisation and
has begun or publicly announced the reorganisation. The reorganisation provision does not include costs
incurred in relation to future activities.
27.3 Other personnel liabilities

Long service leave and other allowances such as anniversaries form part of the provisions under other personnel
liabilities. These provisions are accumulated over the respective period as in the case of defined benefit pension
schemes, albeit that actuarial profits or losses are included in the profit and loss account in the period in which
they arise.

27.4 Environment
In accordance with the Group’s published environmental policy and the applicable legal obligations, a provision
for the clearance of environmental pollution is formed when the pollution occurs.
27.5 Onerous contracts

A provision is recognised in the balance sheet for onerous contracts if the benefits which the Group expects
to obtain from a contract are lower than the unavoidable costs of fulfilling the liabilities under the contract.
The provision is valued at the lower of the present value of the expected costs of terminating the contract or the
present value of the expected net costs of continuing the contract.
28 LONG-TERM DEBT S
When included for the first time, interest-bearing loans received are stated at fair value less directly attributable
transaction costs. After first-time recognition, interest-bearing loans are valued at amortised cost, with the
difference between the cost and the redemption price being stated in the profit and loss account on the basis
of the effective interest method over the term of the loans.
29 T RADE CR EDITORS
Trade creditors and other payables are stated at amortised cost.
30 DETERMINATION OF FAI R VAL UE

A number of principles and the group’s information provision require the determination of the fair value of both
financial and non-financial assets and liabilities. For the purposes of valuation and information provision,
the fair value is determined on the basis of the following methods. If applicable, further information on the
principles for determining the fair value is provided in the section of these notes applying specifically to the
respective asset or the respective liability.
Tangible fixed assets

The fair value of tangible fixed assets included as a result of a business combination is the estimated amount
for which a property could be exchanged on the date of acquisition between a willing buyer and a willing seller
in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably. The
market value of other tangible fixed assets and inventories is based on the listed market prices of comparable
assets and items where available, and where applicable on replacement costs.

Intangible assets
The fair value of patents and trademarks acquired as part of a business combination is determined on the basis
of the discounted estimated royalties which have been avoided as a result of ownership of the patent or
trademark. The fair value of customer relationships acquired in a business combination is determined using the
excess earnings method over several periods, with the respective assets being valued after deduction of a real
return on all other assets which jointly constitute the associated cash flows. The fair value of other intangible
assets is based on the expected present value of the cash flow from the use and ultimate sale of the asset.
Inventories
The fair value of inventories acquired as part of a business combination is determined on the basis of the
estimated sale price in normal business operation, less the estimated costs of completion and the sale costs,
plus a reasonable profit margin reflecting the completion and sale effort.
Trade debtors and other receivables

The fair value of trade debtors and other receivables, excluding projects in hand on behalf of third parties,
is estimated at the present value of the future cash flows, on the basis of the market interest rate applying on
the reporting date. This fair value is determined for information purposes or if the trade debtors and other
receivables are acquired by means of a business combination.

Notes to the profit and loss account
31 OP ER ATING SEGM E NT S
The Group consists of three segments, as described below. The segments offer a range of products and services,
are managed separately and use various technologies. The summary below describes the activities of the
various segments of the Group:
◾ Advanced Textiles & Composites
Manufacture and sale of protective and safety fabrics for professional wear, outdoor fabrics, composites for
personal and vehicle protection and composites for technological applications in aerospace.
◾ Geosynthetics & Grass
Manufacture and sale of fabrics and non-wovens for civil engineering, environmental projects, recreational and
industrial applications and manufacture and sale of synthetic turf fibres and backing for a range of applications.
Manufacture and sale of rubber and foam rollers for the office equipment industry and related products,
development, production and sale of inkjet technology and related components for industrial applications,
as well as country holding companies and service companies.
Limited transactions take place between the segments. The prices for these transactions are determined on an
objective business basis.
There is no segment in which the Group depends on sales to a single customer for all its revenues.
Analysis by geographic location

The segments operate on four continents, namely Europe, North America, Australia and Asia. In the presentation
of information based on geographic segments, the revenues of the segment are based on the geographic
location of origin. The assets of the segments are based on the geographic location of the assets.
The table below presents each of the reporting segments. The performance is determined on the basis of the
segment’s pre-tax profit, as stated in the internal management report to the CODM committees.

> NOTES TO THE PROFIT AND LOSS ACCOUNT
31.1 Analysis by operating segment
Advanced Textiles Geosynthetics Eliminations between

& Composites & Grass Other Activities the segments Consolidated
in millions of euros 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
EXTERNAL REVENUES 448.4 397.3 469.3 392.1 66.8 52.7 – – 984.5 842.1
Revenue from transactions
between segments 0.8 0.7 0.4 0.1 14.2 1.3 – 15.4 – 2.1 – –
Depreciation and amortisation – 15.2 – 14.2 – 26.2 – 25.3 – 3.5 – 3.2 – – – 44.9 – 42.7
OPERATING RESULT 38.6 27.0 27.7 13.8 8.3 – 8.1 – – 74.6 32.7
Financial income 1 0.1 0.2 0.4 0.5 14.6 19.8 – 14.9 – 19.4 0.2 1.1
Financial expenses – 6.9 – 9.1 – 4.9 – 6.5 – 13.7 – 12.8 14.9 19.4 – 10.6 – 9.0
Impairments of financial
fixed assets – – – – 4.9 – – – – – – 4.9
Segment profit to be reported
before profit tax 31.7 18.0 25.6 3.3 7.3 – 1.3 – – 64.6 20.0
Profit tax – – – – – – – – – 17.9 – 5.6
Result from divested operations,
after profit tax – – 0.6 – 10.1 – – – – – 9.5
Net result of associated
companies – – – 1.3 – 0.8 – – – – – 1.3 – 0.8
ASSETS AND LIABILITIES

Assets of segments 352.5 267.8 432.1 358.5 68.0 67.4 – – 852.6 693.7
Investments in associated
companies – – 5.2 18.9 – – – – 5.2 18.9
Investments in other
participating interests 0.5 – – – – – – – 0.5 –
Unallocated assets – – – – – – – – 32.6 35.9
Total assets 353.0 267.8 437.3 377.4 68.0 67.4 – – 890.9 748.5
Liabilities of segment 2 77.7 48.3 72.8 61.9 44.6 38.3 – – 195.1 148.5
Unallocated liabilities – – – – – – – – 260.1 215.1
Total liabilities 77.7 48.3 72.8 61.9 44.6 38.3 – – 455.2 363.6
Investment expenditure 4.5 4.2 9.9 9.0 6.9 4.1 – – 21.3 17.3
1 Excluding € 0.4 million consolidated translation differences (2009: € 0.1 million).

2 Excluding intercompany loans.

31.2 Analysis by geographic location Revenues by origin Non-current assets by origin*
2010 2009 2010 2009
Netherlands 178.0 172.8 57.6 68.5

Rest of Europe 170.8 149.7 100.8 84.9
North America 484.8 400.8 141.4 128.6
Asia / Australia / Middle East 150.9 118.8 162.4 155.4
TOTAL 984.5 842.1 462.2 437.4
* Non-current assets exclude derivative financial instruments and deferred profit tax receivables. The 2009 figures have been adjusted for
comparison purposes.
32 AC QUISITIONS AND DI VE ST M E NT OF PART I CI PAT I N G I N T E R E S T S
32.1 Acquisitions
On 9 February 2010 the Group acquired 51% of the shares of AML UK Ltd in Swindon (United Kingdom). The
remaining 49% was acquired on 5 October 2010. The purchase price was £ 12.2 million in cash. The goodwill
amounts to € 4.6 million. AML UK (now TenCate Advanced Armour UK Ltd) is a leading company in the armour
market in the United Kingdom and is mainly involved in the design and manufacture of materials for vehicle
armour. It also offers a range of products for the security market. The addition of AML to the European activities
of TenCate Advanced Armour results in a wider geographic presence, particularly in one of the world’s largest
markets. The combination of technology, production capacity, purchasing power and market positions of the two
companies delivers strong synergies. This strategic step increases the relative importance of composites within
TenCate’s overall portfolio of materials. This acquisition has been included in the Advanced Textiles &
Composites sector.
On 28 April 2010 the Group acquired an additional 31% interest in the shares of TigerTurf NZ Ltd in Auckland
(New Zealand), TigerTurf UK Ltd in Hartlebury (United Kingdom), TigerSports Americas Inc in Austin
(United States) and TigerTurf Australia pty ltd in Campbellfield (Victoria, Australia) for a cash payment of
NZD 14.7 million. The goodwill amounts to € 15.9 million. The Group now holds 80% of the shares in the
TigerTurf group and has an option to purchase the remaining 20% in 2011. The vendor also has an option to sell
the remaining 20% to the Group. As at 31 December 2010, the purchase price still payable amounted to
€ 4.2 million and TigerTurf was fully consolidated. This acquisition has been included in the Geosynthetics
& Grass sector. The determination of the purchase price allocation has not yet been completed.
On 1 December 2010 Xennia Technology ltd acquired a 100% interest in Cametrics for a cash sum of £ 1.1
million (€ 1.2 million). The goodwill amounts to € 0.7 million. As at 31 December 2010 the purchase price still
payable amounted to € 0.6 million.

The acquisitions are stated in accordance with the acquisition method (IFRS 3). The acquisition amounts have
been allocated to the identified acquired assets and liabilities, which are based on the fair value.
The expected synergy effects for the Group result in a total of € 21.2 million of goodwill paid for the acquisitions.
The goodwill has also increased by € 0.7 million in connection with the settlement of earn-outs in respect of
acquisitions from previous years. The goodwill is not deductible for tax purposes.
The effect of the acquisitions on revenues and results after tax in 2010 amounts to €40.9 million and – € 4.1
million respectively. The Group’s revenues would have been approximately €18 million higher if the acquisition
had taken place on 1 January 2010. The effect on the net result would have been approximately – € 5 million.
The Group incurred costs of € 0.7 million in relation to the acquisitions in respect of external legal expenses,
due diligence costs and stamp duty.
32.2 Effects of the acquisition of subsidiaries

The effect of the above acquisitions on the assets and liabilities was as follows:
Identifiable
acquired
assets and
liabilities
in millions of euros
Tangible fixed assets 6.7

Intangible assets 11.3
Deferred profit tax receivables 1.0
Inventories 11.1
Trade debtors and other receivables 14.4
Cash and cash equivalents 1.0
Other reserves 6.9
Deferred profit tax liabilities – 3.8
Provisions for guarantees and claims – 3.2
Interest-bearing loans – 9.6
Banks, current accounts – 0.9
Trade creditors and other payables – 16.2
Net identifiable assets and liabilities 18.7
Goodwill on acquisition 21.9
Purchase price 40.6
Value of existing interest – 12.6
Outstanding amount payable – 4.8
Outstanding amount payable: prior years adjustment 0.9
Acquired cash less short-term bank debts – 0.1
Cash outflow 24.0

The acquisitions have been combined in the above table, because none of the acquired companies individually
has a material effect. In 2010 an amount of € 6.9 million was charged to the other reserves in connection with
transactions with non-controlling shareholders to acquire the remaining interests in AML and TigerTurf.
The prior years adjustment relates to the settlement of an earn-out.
32.3 Divested operations

No operations were divested in 2010.
The impact of the CTI/Geofabrics Australasia pty ltd and Ten Cate Permess Interlinings Hong Kong ltd operations
divested in 2009 on the profit and loss account for 2009 was as follows:
2010 2009
Revenues – 17.3
Costs of raw materials and manufacturing supplies and work contracted out – 9.4
Other costs – 6.2
Operating result – 1.7
33 PERS ONNEL COST S 2010 2009
Wages and salaries 139.2 128.7

Social charges 26.8 26.4
Costs of option scheme 1.4 1.2
Pension costs 5.2 5.8
Temporary personnel 10.6 6.8
Other personnel costs 4.8 4.1
Personnel costs 188.0 173.0
The pension costs comprise € 1.7 million (2009: € 2.8 million) in respect of defined benefit pension schemes
(see note 49.3) and € 3.5 million (2009: € 3.0 million) in respect of defined contribution schemes.
The average number of employees (permanent and temporary) in the Group in 2010 was 4,644 (2009: 3,942).
34 OTHER OPERATING COST S
34.1 Government subsidies

The Group’s profit and loss account includes € 2.8 million of government subsidies in 2010 (2009: € 1.5 million).
The subsidies relate to subsidised research and development projects.

34.2 Research and development

The costs associated with research and development amounted to € 9.2 million in 2010 (2009: € 9.3 million), of
which € 6.7 million (2009: € 6.8 million) has been stated in personnel costs and € 2.5 million (2009: € 2.5 million)
in other operating costs.
34.3 Book profit on sale of tangible fixed assets

In 2010 the Group sold land and buildings on which a total book profit of € 0.1 million was recorded
(2009: € 1.3 million).
2010 2009
Land and buildings – 1.3

Other 0.1 –
Result from sale 0.1 1.3
Book value of sold assets 0.8 3.1
Proceeds of sale 0.9 4.4
34.4 Operating lease expenses

The Group included € 8.4 million of expenses relating to operating lease agreements in other operating costs
in 2010 (2009: € 7,3 million).
35 NET FINANCIAL E XPE NSE S 2010 2009
Interest income 0.2 1.1

Foreign currency translation differences 0.4 0.1
Financial income 0.6 1.2
Interest expenses – 6.4 – 9.0

Realised change in the fair value of derivatives for which hedge accounting is used – 2.8 –
Ineffective portion of the change in the fair value of derivatives for which hedge
accounting is used – 0.1 –
Result of derivatives for which no hedge accounting is used – 1.3 –
Impairment of financial fixed assets* – – 4.9
Financial expenses and impairment – 10.6 – 13.9
Net financial expenses – 10.0 – 12.7
* see note 40.2

36 PR OFIT TAX 2010 2009
Profit tax payable

Current financial year – 21.3 – 13.9
Recognition of previously unrecognised tax losses 0.7 1.9
Overprovision in previous years 0.1 0.2
– 20.5 – 11.8
Deferred profit tax
Origination and reversal of temporary differences 2.5 –
Recognition of previously unrecognised tax losses 1.5 5.1
Change in unrecognised temporary differences – 1.2 1.1
Change in tax rates – 0.2 –
2.6 6.2
Total profit tax charge in profit and loss account – 17.9 – 5.6
Reconciliation with applicable profit tax rate 2010 2009
Result before profit tax 64.6 20.0

Tax on profit at average weighted local profit tax rate 27.6% 17.8 40.0% 8.0
Losses in reporting year for which no tax losses have been
recognised 5.1% 3.3 7.5% 1.5
Non-tax-deductible costs 0.9% 0.6 9.0% 1.8
Tax-exempt income – 4.5% – 2.9 – 10.5% – 2.1
Change in tax rates 0.3% 0.2 – –
Change in unrecognised temporary differences 1.9% 1.2 – 6.5% – 1.3
Recognition of previously unrecognised tax losses – 3.4% – 2.2 – 11.0% – 2.2
Other items – 0.2% – 0.1 – 0.5% – 0.1
Tax charge in the profit and loss account 27.7% 17.9 28.0% 5.6
The decrease in the weighted average tax rate from 40.0% to 27.6% results particularly from changes in the
various countries’ shares in the result before profit tax. In comparison with 2009, a larger share of the result
was generated in countries with a relatively lower tax rate in 2010.

37 R ES ULT FROM DIVE ST E D OPE RAT I ONS 2010 2009
CTI / Geofabrics Australasia pty ltd – 10.1

Ten Cate Permess Interlinings Hong Kong ltd – – 0.6
Result from divested operations after profit tax – 9.5

Notes to the consolidated balance sheet
in million of euros
Other
intangible
38. INTANGIBLE AS SE T S Goodwill Development assets Total
Cost
Balance as at 1 January 2009 167.3 1.3 62.5 231.1
Change resulting from divested operations – 0.5 – – – 0.5
Investments 0.1 3.8 0.3 4.2
Exchange rate differences – 3.0 – – 0.4 – 3.4
Balance as at 31 December 2009 163.9 5.1 62.4 231.4
Acquisitions 21.9 – 11.3 33.2

Investments – 4.9 0.2 5.1
Exchange rate differences 9.2 – 3.5 12.7
Amortisation
Amortisation – 0.4 8.4 8.8
Change resulting from divested operations – 0.2 – – – 0.2
Exchange rate differences – – – –
Amortisation – 0.9 9.5 10.4

Exchange rate differences 0.4 – 1.2 1.6
Book value

> NOTES TO THE CONSOLIDATED BALANCE SHEET
38.1 Amortisation/impairment
The Group recognised no impairment losses on intangible assets in 2010 (2009: € 0).
38.2 Testing of impairment for cash generating units which include goodwill
The goodwill is attributable to cash generating units as follows:
2010 2009
TenCate Grass 104.9 80.3

TenCate Advanced Armour EU 35.8 31.2
TenCate Advanced Composites USA 19.5 19.1
TenCate Advanced Armour USA 21.8 20.4
Overige 10.6 10.9
Totaal 192.6 161.9
The Group tested the existing goodwill for impairment in 2010.

The realisable value has been determined on the basis of the value in use. The value in use is based on the
future cash flows over the forthcoming three years, based on historical empirical data, market expectations and
strategic plans. No growth rate is applied for the period beyond three years. The value in use in 2010 has been
determined in the same way as in 2009. On the basis of this test, no goodwill impairment has been recognised.
The changes in 2010 related to acquisitions and exchange rate differences.
Principal assumptions made in estimating the present value of cash flows

The principal assumptions made in calculating the realisable value concern discount rates, revenue growth and
EBITDA margins.
Discount rate
The discount rate is a pre-tax measure based on the risk-free interest rate for 10-year government bonds issued
in the relevant market, adjusted for the risk premium for both the higher risk of securities investments and the
systemic risk of TenCate. The discount rates used for taxes range from 7.7% to 9.9% (2009: 8.8% to 11.3%).
The discount rates used have decreased compared to 2009 due to a decrease in the risk-free interest rate.
Revenue growth
The expected revenue growth is expressed as the compound annual growth in the first three years of the
schedules used to test impairment and is based on past experience, market expectations and strategic plans.

EBITDA margin
The EBITDA margin is EBITDA as a percentage of expected revenues in 2013. 2013 is the final year of the cash
flow forecast. The cash flow forecast for 2013 is also used for the calculation of the perpetual cash flow.
Sensitivity to changes in assumptions

We have investigated the sensitivity of the main assumptions (discount rate, revenue growth and EBITDA
margin) and concluded that adjustments to these assumptions could not reasonably result in the book value
exceeding the realisable value.
38.3 Amortisation
The amortisation of € 10,4 million (2009: € 8.8 million) has been stated in ‘Amortisation’ in the profit and loss
account.

Land and Other Operating

operating Plant and operating assets under
39 TANGIBLE FIXED ASSE T S buildings equipment assets construction Total
Acquisition value:
Balance as at 1 January 2009 129.6 394.7 43.1 8.6 576.0
Change as a result of divested operations – 1.6 – 5.8 – 1.3 – – 8.7
Investments 2.4 8.9 1.8 – 13.1
Divestments – 2.6 – 4.4 – 0.8 – – 7.8
Exchange rate differences – 1.2 – 4.2 – 0.2 – 0.6 – 6.2
Balance as at 31 December 2009 126.6 389.2 42.6 8.0 566.4
Acquisitions 0.8 4.1 1.5 0.3 6.7

Investments 6.2 10.7 2.0 – 2.7 16.2
Divestments – 1.1 – 2.1 – 0.2 – – 3.4
Exchange rate differences 5.3 13.8 1.4 1.1 21.6
Depreciation
Balance as at 1 January 2009 52.6 243.4 32.6 – 328.6
Change as a result of divested operations – – 2.0 – 0.5 – – 2.5
Depreciation 5.0 25.9 3.0 – 33.9
Divestments – 0.1 – 4.0 – 0.5 – – 4.6
Exchange rate differences – 0.6 – 2.5 – 0.6 – – 3.7
Balance as at 31 December 2009 56.9 260.8 34.0 – 351.7
Depreciation 5.7 25.7 3.1 – 34.5

Divestments – 0.5 – 2.0 – 0.1 – – 2.6
Exchange rate differences 1.8 7.2 0.7 – 9.7
Balance as at 31 December 2010 63.9 291.7 37.7 – 393.3
Book value:
Balance as at 1 January 2009 77.0 151.3 10.5 8.6 247.4

39.1 Impairment and reversal of impairment
The Group recognised no impairment of tangible fixed assets in 2010 (2009: € 0).
No impairment losses were reversed during the year.
39.2 Leased buildings, plant and equipment

The Group leases buildings, plant and equipment under a number of financial leases.
The net book value of these assets as at 31 December 2010 was € 5.4 million (31 December 2009: € 5.3 million).
The leased buildings, plant and equipment serve as collateral for the financial lease liabilities (see note 48).
39.3 Collateral
As at 31 December 2010 plant and equipment belonging to Ten Cate – Union Protective Fabrics Asia Ltd
worth € 7.1 million (2009: € 6,0 million) was pledged as collateral for a credit facility of € 10.1 million
(2009: € 5.8 million). € 6.3 million of this credit facility was drawn as at the end of 2010 (2009: € 0.5 million).
39.4 DEPR EC IATION CHARGE

The depreciation charge of € 34.5 million (2009: € 33.9 million) has been stated in depreciation in the profit and
loss account.
40 INVESTMENTS IN ASSOCI AT E D COM PANI E S AND FI N A N C I A L FI X E D A S S E T S
40.1 Associated companies

Op 27 August 2010 the interest in Landscape Solutions B.V. was increased from 20% to 25% as a result of
a restructuring of Landscape Solutions.
The investments in associated companies in 2009 concerned investments in TigerTurf and GreenFields.
In 2010 the Group acquired control of the TigerTurf businesses and TigerTurf was therefore included in the
consolidation.
The associated companies item relates to the 25% interest in the shares of Landscape Solutions B.V. and the
32% interest in the shares of GreenFields which the Group held as at 31 December 2010.
The share in the net income of associated companies amounted to – € 1.3 million (2009: – € 0.8 million).
As a result of the increase in the additional interest, a net positive result of € 0.1 million has been recognised in
the result from associated companies in respect of the realisation of translation differences and fair value
adjustments in the interest in TigerTurf and the operating result of the associated interest up to 28 April 2010.
The Group received no dividend payments from associated companies in 2010 (2009: € 0). The associated
companies have a book value of € 5.2 million as at 31 December 2010 (31 December 2009: € 18.9 million).

Associated companies and joint ventures

The summary financial data have not been adjusted in respect of the percentage owned by the Group and can
be analysed as follows on 31 December:
2010 2009
Non-current assets 10.9 49.8

Current assets 24.4 50.7
Total assets 35.3 100.5
Current liabilities 21.3 30.9

Non-current liabilities 12.9 27.5
Total liabilities 34.2 58.4
Revenues 78.6 105.7

Costs 88.5 105.1
Profit/(loss) – 9.9 0.6
The changes in the associated companies item were as follows:

2010 2009
Balance as at 1 January 18.9 –

Investments 0.2 18.4
Divestment as a result of obtaining control – 12.6 –
Transferred from other participating interests – 1.3
Result – 1.3 – 0.8
Balance as at 31 December 5.2 18.9
40.2 Financial fixed assets

The financial fixed assets can be analysed as follows:
2010 2009
Other participating interests 0.5 –

Other long-term receivables and investments 9.6 6.6
Other participating interests

The other participating interest concerns a 16% interest in Performance Fabrics and Fibers LLC (PFF), Andrews
(South Carolina). On 24 September 2010 the Group signed a co-operation agreement for the patent development
of the Active Blast Defence System (ABDS™). This involved the acquisition of a 10% interest with the right to
acquire a majority interest in ABDS ApS.

Under other participating interests the Group recognised an impairment of € 4.9 million in 2009 in the
non-strategic financial participation in PFF in the Geosynthetics & Grass sector.
2010 2009
Balance as at 1 January – 6.2

Investments 0.5 –
Impairment – – 4.9
Transferred to associated companies – – 1.3
Balance as at 31 December 0.5 –
Other long-term receivables and investments

The main long-term receivables and investments concern invested pension assets at a number of American
subsidiaries of € 7.2 million (2009: € 4.6 million) and an advance payment in connection with long-term lease
rights in China and Malaysia amounting to € 2.1 million (2009: € 1.9 million).
41 DEFER RED P ROFI T TAX ASSE T S AND L I ABI L I T I E S

The deferred profit tax assets and liabilities recognised in the balance sheet are attributable to the following
items:
Receivables Liabilities Net
2010 2009 2010 2009 2010 2009
Intangible assets – – – 10.1 – 5.1 – 10.1 – 5.1

Tangible fixed assets – – – 5.1 – 2.6 – 5.1 – 2.6
Financial fixed assets – 0.3 – – – 0.3
Inventories 5.3 3.8 – – 5.3 3.8
Derivatives 1.3 – – – 1.3 –
Other receivables 1.0 0.3 – – 1.0 0.3
Pension provisions 5.6 6.4 – – 5.6 6.4
Other provisions 4.1 2.8 – – 4.1 2.8
Tax value of loss carry-forwards 13.7 10.3 – – 13.7 10.3
Other items 0.3 0.1 – – 0.8 0.3 – 0.7
Deferred profit tax asset/liability 31.3 24.0 – 15.2 – 8.5 16.1 15.5
Set-off assets and liabilities – 11.0 – 4.2 11.0 4.2 – –
Net deferred profit tax asset/liability 20.3 19.8 – 4.2 – 4.3 16.1 15.5

The change in the temporary differences during the financial year can be specified as follows:
Recognised Acquired
As at As at Recognised in other com- though As at
1 January Recognised in 31 December in profit prehensive business 31 December
2009 profit and loss 2009 and loss income combinations 2010
Intangible assets – 6.6 1.5 – 5.1 – 1.5 – – 3.5 – 10.1

Tangible fixed assets – 4.4 1.8 – 2.6 – 2.2 – – 0.3 – 5.1
Financial fixed assets – 0.4 0.7 0.3 – 0.3 – – –
Inventories 3.4 0.4 3.8 1.3 – 0.2 5.3
Derivatives – – – 0.2 1.1 – 1.3
Other receivables 0.4 – 0.1 0.3 0.7 – – 1.0
Pension provisions 7.1 – 0.7 6.4 – 0.8 – – 5.6
Other provisions 3.6 – 0.8 2.8 0.5 – 0.8 4.1
Tax value of loss carry-forwards 5.1 5.2 10.3 3.4 – – 13.7
Other items 0.8 – 1.5 – 0.7 1.0 – – 0.3
Deferred profit tax asset/liability 9.0 6.5 15.5 2.3 1.1 – 2.8 16.1
Of the amount stated in the profit and loss account – € 0.3 million (2009: € 0.3 million) is included in the result
from associated companies.
The realisation of the deferred profit tax receivables depends on the future taxable profit turning out to be
higher than the profit from the reversal of taxable temporary differences. On the basis of a projection of the
estimated taxable profit and the existing fiscal planning possibilities, it is considered probable that sufficient
taxable profit will be generated in future for the realisation of these deferred profit tax receivables.
Deferred profit tax assets not recognised in the balance sheet

As at 31 December 2010 there were € 50.6 million (2009: € 46.4 million) of unused losses available for set-off.
No deferred profit tax asset has been recognised in respect of this amount because it is currently unlikely that
future taxable profit will be available to the Group for the losses to be set-off. The amount of profit tax
concerned as at 31 December 2010 was € 11.6 million (2009: € 10.6 million).

The expiry periods of the unused losses available for set-off are shown in the table below:
2010 2009
Within 2 – 5 years 12.3 11.3

After 5 years 18.8 16.6
Unspecified period 19.5 18.5
Unused losses available for set-off 50.6 46.4
42 INVENTORIES 2010 2009
Raw materials and manufacturing supplies 67.5 45.3

Semi-manufactures 51.6 32.5
Finished products 97.8 77.2
Inventories 216.9 155.0
In 2010 the raw materials and manufacturing supplies and changes in finished products and work in progress
included as costs of sales amounted to € 483.3 million (2009: € 421.4 million). In 2010 the reduction in
the inventory value included as an expense amounted to a net recoverable amount of € 3.3 million
(2009: € 6.1 million). The reversal of the reduction in the inventory value in 2010 amounted to € 2.7 million
(2009: € 1.5 million), as a result of the reduced risk profile of the inventories. The inventory value included as an
expense and the reversal have been stated under raw materials and manufacturing supplies.
43 T RADE DEBTOR S 2010 2009
Due from third parties 146.9 94.1

Due from associated companies 3.9 6.6
Due from joint ventures 0.2 0.1
Trade debtors 151.0 100.8
Trade and other receivables with a term of less than one year are stated at amortised cost less impairments.
Transfers to provisions for doubtful debts are included in the profit and loss account under work contracted out
and other external expenses.
As at 31 December 2010 trade debtors with a value of € 14.5 million (2009: € 12.8 million) were encumbered as
security for credit facilities amounting to € 20.2 million (2009: € 19.3 million). € 16.4 million of this credit facility
was drawn as at the end of 2010 (2009: € 12.1 million).

44 OTHER RECEIVAB L E S 2010 2009
Receivable in respect of other taxes 2.8 2.1

Derivatives at fair value 1.0 1.4
Other receivables and prepayments 14.3 9.4
Other receivables 18.1 12.9
Amounts due in respect of other taxes receivable relate mainly to reclaimable VAT.
As at 31 December 2010 the prepayments amounted to € 8.6 million (2009: € 3.8 million).
45 C AS H AND C AS H E QUI VAL E NT S 2010 2009
Bank balances 11.0 12.7

Cash balances 0.6 0.1
Cash and cash equivalents 11.6 12.8
Cash loans, overdrafts – 55.7 – 14.7
Cash in the cash flow statement – 44.1 – 1.9
All amounts were freely available at the end of 2010 and 2009.
46 TOTAL SHAREHOLDERS’ EQUITY

A statement of changes in equity can be found on page 94.
46.1 Ordinary shares 2010 2009
x 1,000
In issue and fully paid up as at 1 January 25,068 23,967

Issued stock dividend 434 1,101
In issue and fully paid up as at 31 December 25,502 25,068
The authorised share capital amounts to € 200 million, divided into 80 million ordinary shares with a par value
of € 2.50. The issued capital as at 31 December 2010 amounts to 25,501,907 ordinary shares with a par value of
€ 2.50 (as at 31 December 2009: 25,067,580 ordinary shares with a par value of € 2.50).
The holders of ordinary shares are entitled to dividend as approved periodically by the General Meeting of
Shareholders. They are also entitled to cast one vote per share at meetings of the company.

Issue of shares and limitation of pre-emptive right
The general meeting of shareholders has granted the Executive Board the power to issue shares and to exclude
or restrict the pre-emptive right for the period ending on 30 September 2011. The power to issue shares concerns
10% of the issued share capital plus a further issue up to a maximum of 10% of the issued share capital in the
event that the issue takes place in the context of a merger or acquisition. The same applies to the power of the
Executive Board, with the approval of the Supervisory Board, to restrict or exclude the pre-emptive right.
46.2 Repurchased ordinary shares 2010 2009
x 1,000
In issue as at 1 January 521 527

Exercise of options – 84 –
Issued in connection with share savings plan –4 –6
In issue as at 31 December 433 521
The aim of the repurchase of ordinary shares is to avoid the dilution of earnings per share by the granting of
options and the issue of shares as part of the share savings plan. No shares in the company were repurchased
in 2010 (2009: 0).
Repurchase of own shares

The general meeting of shareholders has granted the Executive Board the power to acquire fully paid-up shares
in the company (or certificates thereof) for the period ending on 7 October 2011. The maximum number of shares
which may thus be acquired is 10% of the issued capital at the time of acquisition of the shares (or certificates
thereof).
46.3 Share premium

The share premium reserve is to be considered as paid-up capital.
46.4 Translation reserve

The translation reserve comprises all exchange rate differences which arise due to the translation of the
financial statements of activities outside the eurozone. These exchange rate differences are carried in equity.
The accumulation of the respective amount began on 1 January 2004 and is not available for distribution to
shareholders. As a result of the sale of the Group’s 50% share in CTI / Geofabrics Australasia pty ltd and the
sale of Ten Cate Permess Interlinings Hong Kong ltd, € 1.0 million of the translation differences was charged to
the result in 2009. € 1.3 million was credited to the result in 2010 in respect of the step acquisition of TigerTurf
and the closure of TenCate Permess Xishan.

46.5 Hedging reserve

The hedging reserve consists of the unrealised effective portion of the accumulated change in the fair value of
the derivatives used to hedge the interest rate risk. The reserve is not available for distribution to shareholders.
A negative reserve reduces the amount freely available for distribution from the reserves.
The balance of the hedging reserve after tax was – € 3.6 million as at 31 December 2010 (2009: – € 0.2 million).
46.6 Other reserves and undistributed result

Subsequent to the reporting date the following dividend has been proposed, which has not yet been included in
the balance sheet. It is proposed to set the dividend in respect of 2010 at € 0.75 per € 2.50 par value share
(2009: € 0.60), payable optionally in cash or in the form of stock dividend.
2010 2009
€ 0.75 per ordinary share (2009: € 0.60) 18.8 15.0
46.7 Other comprehensive income

The other comprehensive income consist of the foreign currency translation differences and the unrealised
effective portion of derivatives for which hedge accounting is used. The tax effect of the other comprehensive
income is € 1.1 million (2009: 0) and relates to the hedging reserve.
46.8 Objective with regard to equity and financing

The objective with regard to equity and financing, as in 2009, is to guarantee the continuity of the company by
means of attractive returns for shareholders and by guaranteeing benefits for other stakeholders. The capital
structure is adjusted if necessary in line with economic developments and the risks relating to assets.
With regard to financing, the longer-term objective is a ratio of net debt to EBITDA of a maximum of 2.5.

The calculation as at 31 December is as follows:
31 December 31 December
2010 2009
Long-term interest-bearing liabilities 195.2 192.0

Short-term portion of long-term liabilities 1.4 1.6
Cash loans and overdrafts 55.7 14.7
Total debt 252.3 208.3
Less: cash and cash equivalents 11.6 12.8
Net debt 240.7 195.5
EBITDA * 115.2 82.9
Net debt/EBITDA 2.09 2.36
* 2010: EBITDA adjusted to take account of the effect of acquired and divested businesses, non-recurring items and non-cash fair value
adjustments: – € 4.3 million. 2009: EBITDA adjusted to take account of the effect of acquired and divested businesses, the result of
divested operations and non-cash fair value adjustments: € 7.5 million.
47 E AR NINGS PER S HARE
47.1 Ordinary earnings per share

The calculation of the ordinary earnings per share as at 31 December 2010 is based on the net income of
€ 46.0 million (2009: € 23.9 million) attributable to holders of ordinary shares and a weighted average number
of outstanding ordinary shares during the 2010 financial year of 25,025,965 (2009: 24,544,316), calculated
as follows:
2010 2009
Net profit for the financial year attributable to holders of ordinary shares 46.0 23.9
Weighted average number of ordinary shares 2010 2009
x 1,000
Ordinary shares in issue on 1 January 25,068 23,967

Effect of ordinary shares held (including repurchased shares) – 521 – 527
Effect of shares issued in connection with stock dividend 434 1,101
Effect of shares issued as a result of exercised option rights 42 –
Effect of shares issued as a result of share savings plan 3 3
Weighted average number of ordinary shares as at 31 December 25,026 24,544

47.2 Diluted earnings per share

The calculation of the diluted earnings per share as at 31 December 2010 is based on the net income of
€ 46.0 million (2009: € 23.9 million) attributable to holders of ordinary shares and the weighted average number
of outstanding ordinary shares during the 2010 financial year of 25,216,255 (2009: 24,616,148), calculated
as follows:
2010 2009
Net profit for the financial year attributable to holders of ordinary shares 46.0 23.9
Weighted average number of ordinary shares 2010 2009
x 1,000
Weighted average number of ordinary shares as at 31 December 25,026 24,544

Effect of outstanding option rights 190 72
Weighted average number of ordinary shares (after dilution)
as at 31 December 25,216 24,616
48 LONG-TER M DEBT S 2010 2009
Syndicated loan 188.8 185.1

Financial lease liabilities 4.3 4.5
Other loans 3.5 4.0
196.6 193.6
Less: repayment of loans in forthcoming year – 1.4 – 1.6
Long-term debts 195.2 192.0

2016
2010 2011 2012 2013/2015 and after 2009
Total < 1 year 1 – 2 years 2 – 5 years > 5 years Total
Syndicated loan
EUR – variable interest 47.2 – – 47.2 – 38.8
USD – variable interest 141.6 – – 141.6 – 146.3
Financial lease liabilities

EUR – fixed interest 8.00% 0.5 0.2 0.2 0.1 – 0.7
EUR – variable interest 3.0 0.5 2.5 – – 3.7
THB – fixed interest 3.45% 0.1 – – 0.1 – 0.1
GBP – fixed interest 6% – 7% 0.2 – – 0.2 – –
NZD – fixed interest 11% – 14% 0.1 0.1 – –
AUD – fixed interest 4% – 11% 0.4 0.2 0.2 – – –
Other loans
USD – variable interest 3.0 – – – 3.0 2.8
EUR – fixed interest 0.5% – 3.0% 0.1 0.1 – – – 0.1
EUR – fixed interest 1.00% 0.4 0.4 – – – 1.1
Long-term debts 196.6 1.4 2.9 189.3 3.0 193.6
The existing syndicated loan was repaid in December 2010. The new syndicated loan of € 450.0 million
(2009: € 388,9 million), which is available for drawing in various currencies, was concluded with a syndicate
of 11 banks on 8 December 2010. € 188.8 million of this facility was drawn as at 31 December 2010
(2009: € 185.1 million). The loan has a term of five years (to 8 December 2015). Repayment is due in full on the
maturity date. The loan is valued at amortised cost in accordance with the effective interest method.
The interest rate payable is linked to the net debt/EBITDA ratio, which is calculated quarterly in respect of the
preceding 12 months. The EBITDA for acquired and divested businesses is annualised. In accordance with the
agreements entered into with the banks, the EBITDA is also adjusted to take account of non-recurring items and
non-cash fair value adjustments in the interest. The interest margin above Euribor respectively Libor will be
between 0.70% and 1.50%. A utilisation fee of 0.20% is payable if more than 50% of the facility is drawn.
At the end of 2010 the interest margin was 1.20% (2009: 0.625%).

The aforementioned syndicated loan is subject to a number of covenants, the principal of which are:
◾ total net debt/EBITDA less than 3.25 at the end of the first quarter of each year, less than 3.50 at the end of
the second quarter of each year and less than 3.00 at the end of the third and fourth quarters of each year,
with the once-only possibility of an increase of 0.25 for two successive quarters following an acquisition,
but no higher than 3.50;
◾ EBITDA/net interest greater than 4;
◾ joint guarantee of subsidiaries with total assets of at least 60% of the Group total.
The Group fulfilled these conditions as at the reporting date.
In the event of a change of control of the Company, the syndicated loan is immediately repayable if a two-thirds
majority of the lenders so require.
The € 3.0 million (2009: € 3.7 million) financial lease liability relates to a building in Hungary.
The USD loan with variable interest concerns a $ 4.0 million loan (2009: $ 4.0 million) from the Development
Authority of Pike County Industrial Revenue Bonds. Repayment is due in full in 2018.
Of the total of long-term loans, 99% had variable interest in 2010 (2009: 99%). The risk associated with this
variability has been hedged by means of a number of instruments (caps, swaps). Details of the interest rate risk
borne by the Group can be found in note 51.3.
49 PENSION LIABILI T I E S 2010 2009
Defined benefit schemes

Present value of obligations 295.8 295.7
Fair value of plan assets 316.7 298.5
Present value of net liabilities – 20.9 – 2.8
Unrecognised actuarial profits and losses 28.9 15.4
Total defined benefit schemes 8.0 12.6
Other liabilities in respect of pensions 10.5 8.4
Pension liabilities 18.5 21.0

49.1 Changes in the valuation of defined benefit obligations as at the reporting date
2010 2009
Balance as at 1 January 295.7 275.1

Transfers from other pension liabilities – 3.0
Service costs 3.2 2.9
Members’ contributions 2.9 3.1
Interest costs 15.8 15.7
Benefits paid – 16.2 – 15.9
Actuarial differences – 5.6 11.8
49.2 Movement in the fair value of plan assets 2010 2009

Transfers from other pension liabilities – 2.5
Expected return 17.1 16.6
Employer’s contribution 6.3 8.0
Members’ contributions 2.9 3.1
Actuarial differences 8.1 11.8
Benefits paid – 16.2 – 15.9
Analysis of plan assets as at 31 December 2010 2009
Bonds 150.1 158.6

Shares 119.0 96.4
Hedge funds 25.0 11.5
Real estate 15.6 25.2
Cash 3.1 3.4
Other items 3.9 3.4
Pension fund investments 316.7 298.5
49.3 Charge stated in the profit and loss account 2010 2009
Service costs – 3.2 – 2.9

Asset ceiling test in accordance with IAS 19.58 0.2 – 0.8
Interest on liabilities – 15.8 – 15.7
Expected return on fund investments 17.1 16.6
Pension expenses/income – 1.7 – 2.8

The pension charges have been stated in the 2010 profit and loss account in an amount of € 1.7 million
(2009: € 2.8 million) under personnel costs. The actual return on fund investments amounts to € 25.2 million
(2009: € 28.4 million).
Netherlands
The defined pension scheme concerns in particular the pension rights of the Dutch employees which have been
placed with Stichting Pensioenfonds Koninklijke Ten Cate.
The main features of the scheme are:
◾ pension accumulation based on average salary;
◾ accumulation rate of 2.1%;
◾ conditional indexation, the target level being equivalent to 90% of wage growth for active members
(employees) and 90% of price growth for inactive members (pensioners and members with paid-up
entitlements);
◾ the employer contribution is increased by 50% if the cover ratio falls below 110%.
Agreements have been entered into with the pension fund in respect of the contribution payable.
The contribution percentage varies within an agreed range, depending on the cover ratio of the pension fund.
The current agreements cover the period up to 31 December 2014.
Other liabilities
The other liabilities in respect of pensions relate to defined contribution schemes and a number of specific old-
age provisions. The principal defined contribution scheme is a 401K (savings) scheme in the United States.
49.4 Principles for defined benefit schemes

The main actuarial assumptions as at the reporting date (in weighted averages):
2010 2009
Discount rate as at 31 December 5.3% 5.4%

Expected return on plan assets as at 31 December 5.7% 5.8%
Future wage increases 2.5% 2.5%
Future pension increases 1.0% 1.4%
Assumptions with regard to future mortality figures are based on published statistical data and mortality
probabilities. The mortality table used is the 2010-2060 forecast table of the Netherlands Actuarial Association
with a correction factor dependent on age and gender. For the valuation of partner’s pensions the age difference
between men and women has been set at three years. The total expected long-term return on the investments
is 5.7% (2009: 5.8%). This percentage is based on the sum of the returns in separate investment categories.

A 0.1% change in the discount rate will result in no change in the annual charges (2008: 0). However,
a 0.1% change in the discount rate will cause the liability to rise or fall by € 4.0 million (2009: € 4.0 million).
Historical information 2010 2009 2008 2007 2005
Present value of defined benefit obligations 295.8 295.7 275.1 298.6 316.1
Fair value of plan assets 316.7 298.5 272.4 304.7 302.8
Present value of net liabilities – 20.9 – 2.8 2.7 – 6.1 13.3
Experience adjustments arising on obligations
of the scheme 9.4 4.4 0.8 2.7 – 1.6
Experience adjustments arising on plan assets 8.1 11.8 – 42.3 – 10.3 5.7
The Group expects to contribute € 6.5 million of employer’s contributions to defined benefit pension schemes
in 2011 (2010: € 6.3 million). The pension expense in respect of 2011 is estimated at € 0.6 million
(2010: € 2.0 million).
Reorgani- Other
Guarantee/ sation personnel Total
50. PR OV ISIONS claims provision liabilities Environment Other 2010
Balance as at 1 January 2010 3.5 3.3 5.9 1.9 0.6 15.2

Changes due to acquisition 3.2 – – – – 3.2
Provisions made during the year 2.3 2.6 0.6 0.1 0.2 5.8
Released to result – 0.7 – 0.7 – – – – 1.4
Expenditure in current year – 3.1 – 4.4 – 0.6 – – 0.2 – 8.3
Reclassification 2.7 – – – – 2.7
Exchange rate differences 0.1 – – – – 0.1
Balance as at
31 December 2010 8.0 0.8 5.9 2.0 0.6 17.3
Of which short-term
As at 31 December 2009 1.1 3.3 0.4 – – 4.8
As at 31 December 2010 5.5 0.8 0.5 – 0.3 7.1

The amount released to the result has been included in the profit and loss account as follows:
2010 2009
Personnel costs – 0.4

Other operating costs 2.1 0.8
Total 2.1 1.2
The guarantee provision relates to goods and services supplied and the provision for claims relates to damage
claims and possible legal costs.
A reorganisation was announced at TenCate Protective Fabrics Europe in 2010, which was almost completed
during the financial year.
The provision for other personnel liabilities has been formed in respect of long-term leave and other allowances,
such as anniversaries.
The environmental provision has been formed for expected costs of decontamination of industrial sites,
on the basis of functional decontamination (maintenance of business use).

Other information
51. FINANC IAL INS TR UM E NT S

As part of the normal business operations, the Group incurs liquidity, credit, interest and currency risks.
The risk of fluctuations, mainly in exchange rates and interest rates, is hedged using derivatives.
51.1. Liquidity risk

The liquidity risk is the risk of the Group being unable to meet its liabilities when they fall due. The Group’s
policy on control of the liquidity risk is to guarantee to the best of its ability that sufficient liquidities
are available to meet its liabilities on time, in both normal and exceptional situations. € 258.4 million
of the syndicated loan of € 450.0 million (2009: € 388.9 million) was undrawn as at 31 December 2010
(2009: € 202.6 million).
The term of the financial liabilities as at 31 December 2010 was as follows:
Expected cash 2016

flow (including 2011 2012 2013/15 and after
Book value interest) < 1 year 1-2 years 2-5 years > 5 years
Financial liabilities
(excluding derivatives)
Long-term debts 196.6 – 231.4 – 5.7 – 7.1 – 215.6 – 3.0
Cash loans, overdrafts 55.7 – 55.7 – 55.7 – – –
Trade and other creditors,
excluding derivatives 152.4 – 152.4 – 152.4 – – –
Derivatives
Interest rate swaps 5.5 – 6.1 – 2.5 – 2.9 – 0.4 – 0.3
Forward foreign exchange
contracts 1.4 – 1.4 – 1.4 – – –
Total financial liabilities
(including derivatives) 411.6 – 447.0 – 217.7 – 10.0 – 216.0 – 3.3

> OTHER INFORMATION
The term of the financial liabilities as at 31 December 2009 was as follows:
Expected cash 2016

flow (including 2011 2012 2013/15 and after
Book value interest) < 1 year 1-2 years 2-5 years > 5 years
Financial liabilities
(excluding derivatives)
Long-term debts 193.6 – 198.9 – 3.5 – 5.6 – 187.0 – 2.8
Cash loans, overdrafts 14.7 – 14.7 – 14.7 – – –
Trade and other creditors,
excluding derivatives 111.0 – 111.0 – 111.0 – – –
Derivatives
Interest rate swaps 0.7 – 11.9 – 3.2 – 3.2 – 5.0 – 0.5
Forward foreign exchange
contracts 0.4 – 0.4 – 0.4 – – –
Total financial liabilities
(including derivatives) 320.4 – 336.9 – 132.8 – 8.8 – 192.0 – 3.3
51.2 Credit risk

Credit risk is the risk of a financial loss for the Group if a customer or counterparty to a financial instrument fails
to discharge its contractual obligations. Credit risks result in particular from trade debtors and, to a more limited
extent, investments in securities.
The Group’s exposure to credit risk is mainly determined by the specific characteristics of the individual
customers.
Credit risk is limited by in-house investigations into the creditworthiness of new and existing customers based
on sources such as external reports, annual reports and payment history or by insuring the credit risk.
The internal credit limits specified on the basis of in-house research are reviewed at least once a year.
Customers for which no credit limit has been issued (internally or by the insurer) can only do business with the
Group on the basis of guaranteed payment.
Goods are subject to reservation of ownership. In the event of non- payment, the Group has a preferential claim
to the extent that the goods are still present. The Group does not demand collateral for trade and other
receivables.
Impairments are stated as direct sale costs in the profit and loss account as work contracted out and other
external costs.

The Group has no particular concentration risks in respect of trade debtors.
The book value of the financial assets reflects the maximum exposure to credit risk. The maximum exposure can
be defined as follows:
2010 2009
Trade debtors 151.0 100.8

Other (long-term) receivables 26.7 18.1
Forward foreign exchange contracts and options 0.8 0.5
Interest rate swaps 0.2 0.7
Interest rate caps – 0.2
Total 190.3 133.1
The age of the trade debtors and the related impairments can be analysed as follows:
2010 2009
Gross Provision Gross Provision
Not due – 60 days overdue 147.0 2.1 96.5 1.3

60 – 120 days overdue 3.8 0.5 1.8 0.1
120 – 360 days overdue 2.9 0.7 2.1 0.4
Over 360 days overdue 2.9 2.3 3.9 1.7
Balance as at 31 December 156.6 5.6 104.3 3.5
The movements in the provision for trade debtors are as follows:
2010 2009

Acquisitions 1.3 –
Change as a result of divested operations – – 0.2
Formed as charge against result 2.3 1.0
Released to result – 1.1 – 1.2
Written off during the year – 0.6 – 0.3
Exchange rate differences 0.2 –

> OTHER INFORMATION
The Group believes that, with the exception of the foregoing, no provision for impairment is required in respect
of trade creditors which are not due or which are up to 60 days overdue.
51.3 Interest rate risk

99% of the interest-bearing debts have a variable interest rate (2009: 99%). The risk of a rise in interest rates is
in principle hedged 90% for the subsequent year and 75% and 50% respectively for the years thereafter. Both
interest rate swaps and caps are used for this purpose. The impact of changes in the value of these financial
instruments on the Group’s result is limited as far as possible by the use of hedge accounting. The conditions
applying to the interest-bearing debt are set out in note 48.
At the end of 2010 the net balances of outstanding interest rate instruments were as follows:
◾ interest rate cap to 31-12-2011: € 20 million, 3.5%
◾ interest rate cap to 31-12-2011: $ 20 million, 3.5%
◾ interest rate cap to 31-12-2011: $ 70 million, 4.5%
◾ interest rate swap to 31-12-2013: € 50 million, received variable, payment 2.48% fixed
◾ interest rate swap to 31-12-2012: $ 70 million, received variable, payment 2.215% fixed
The Group values the interest rate swaps and interest rate caps at fair value (see paragraph 51.8). Of the fair
value of the interest rate swaps as at 31 December 2010, € 0.2 million (2009: € 0.7 million) is included under
Other receivables and € 5.5 million (2009: € 0.7 million) under trade creditors and other payables. The fair value
of the caps as at 31 December 2010 is zero (2009: € 0.2 million, included under Other receivables).
The table below shows the periods in which the cash flows that are the subject of cash flow hedge accounting
are expected to take place and in which they will affect the profit or loss.
Expected
2010 Book value cash flow < 1 years 1-2 years 2-5 years
Interest rate swaps

Assets – – – – –
Liabilities – 4.5 – 4.6 – 2.2 – 2.4 –
Interest rate caps

Assets – – – – –
Liabilities – – – – –

Expected
2009 Book value cash flow < 1 years 1-2 years 2-5 years
Interest rate swaps

Assets – – – – –
Liabilities – 0.2 – 0.2 – 0.6 – 0.1 0.5
Interest rate caps

Assets 0.1 – – – –
Liabilities – – – – –
51.4 Currency risk

The Group incurs currency risks on sales and purchases denominated in currencies other than the functional
currency of the respective subsidiary. The currencies in which risk is incurred are mainly the euro, the US dollar
and the British pound.
Transaction risk
The Group hedges trade receivables and debts denominated in foreign currencies, to the extent that these may
have a material effect on the result. To that end it uses foreign exchange forward contracts and currency options.
The forward contracts have a term of less than one year after the reporting date. If necessary they are extended.
The forward contracts are valued at fair value.
The principal amounts of the loans drawn in foreign currencies are used to hedge intercompany loans in foreign
currencies to subsidiaries which report in the respective currency.
Competition risk
The Group hedges the estimated currency risk of the expected purchases and sales in the subsequent six months
as far as possible. Currency options are used for this purpose.
Translation risk
The translation risk on the result of subsidiaries outside the eurozone is offset internally against euro-
denominated revenues of subsidiaries outside the eurozone.

> OTHER INFORMATION
Exposure
The exposure to currency risks in respect of trading transactions of the entities in the Group on the reporting
date is as follows:
2010 2009
USD GBP EUR USD GBP EUR
Transaction risk – 6.2 2.1 3.3 2.1 2.3 15.1

Competition risk 3.3 1.3 17.2 8.6 1.5 13.1
Risk before hedging – 2.9 3.4 20.5 10.7 3.8 28.2
Forward contracts 5.2 – 1.6 – 5.0 – 1.5 – 2.3 – 12.1

Option contracts 1.6 – 0.9 – – 0.6 – 1.5 – 0.9
Risk after hedging 3.9 0.9 15.5 8.6 – 15.2
The foreign currencies have been converted into euros at the closing rate.
The USD risk after hedging relates mainly to the expected revenues in USD of Asian subsidiaries. Due to
restrictions in financial markets, this risk is not hedged. The GBP risk relates mainly to trade receivables and
expected revenues of European subsidiaries. The EUR risk relates mainly to trade receivables and expected
revenues in euros from Ten Cate Thiolon Middle East and Ten Cate Thiolon USA. The expected revenues form a
natural hedge for the translation risk on the result of subsidiaries which report in dollars or dollar-linked
currencies.
The Group values options and foreign exchange forward contracts at fair value. The fair value of options is
determined on the basis of statements supplied by banks. The fair value of foreign exchange forward contracts
with an underlying value below €5 million is determined on the basis of statements supplied by the bank; in the
case of higher amounts the Group’s own calculation model is used. The fair value of the options to hedge future
transactions as at 31 December 2010 amounted to € 0.1 million (2009: € 0.2 million). This amount has been
included in other receivables. The net fair value of the forward foreign exchange contracts was € 0.7 million
(2009: € 0.1 million). This amount has been included in Other debts.
51.5 Assets and liabilities included in the balance sheet

Changes in the fair value of foreign exchange forward contracts and options which are used to hedge, in an
economic sense, monetary assets and liabilities denominated in foreign currencies are stated in the profit and
loss account. Both changes in the fair value of forward contracts and options and the exchange rate differences
relating to monetary balance sheet items are included as exchange rate differences under net financial
expenses.

Fair value versus book value
The fair value and book value of financial assets and liabilities stated in the balance sheet are as follows:
2010 2009
Book value Fair value Book value Fair value
Assets valued at fair value

Interest rate derivatives to which hedge accounting
is applied – – 0.1 0.1
Other interest rate derivatives 0.2 0.2 0.8 0.8
Currency derivatives 0.8 0.8 0.5 0.5
1.0 1.0 1.4 1.4
Assets valued at amortised cost

Trade debtors and other receivables 168.1 168.1 112.3 112.3
Cash and cash equivalents 11.6 11.6 12.8 12.8
179.7 179.7 125.1 125.1
Liabilities valued at fair value

Interest rate swaps to which hedge accounting is applied – 4.5 – 4.5 – 0.2 – 0.2
Other interest rate derivatives – 1.0 – 1.0 – 0.5 – 0.5
Currency derivatives – 1.4 – 1.4 – 0.4 – 0.4
– 6.9 – 6.9 – 1.1 – 1.1
Liabilities valued at amortised cost

Syndicated loan – 188.8 – 188.8 – 185.1 – 180.8
Financial lease liabilities – 4.3 – 4.3 – 4.5 – 4.5
Other loans – 3.5 – 3.5 – 4.0 – 4.0
Trade creditors and other payables – 152.4 – 152.4 – 111.0 – 111.0
Cash loans and overdrafts – 55.7 – 55.7 – 14.7 – 14.7
– 404.7 – 404.7 – 319.3 – 315.0
The fair value of the syndicated loan is the same as the book value, because it was refinanced in December
2010 and therefore has a margin consistent with market conditions.
51.6 Sensitivity analyses

In managing interest rate and currency risks, the Group’s aim is to limit the effect of short-term fluctuations on
the Group result. In the longer term, however, sustained changes in exchange rates and interest rates will have
an effect on the consolidated result.

> OTHER INFORMATION
The effect of a general interest rate rise of one per cent on the pre-tax result in 2010 is estimated at
– € 0.9 million (2009: € 1.1 million). The effect of a general interest rate rise of one per cent on equity is
estimated at € 4.1 million before tax (2009: € 2.7 million) due to the use of hedge accounting.
A general rise of one percentage point in the value of the euro against other currencies would have reduced
the result after tax by an expected € 0.4 million (2009: € 0.2 million). A general rise of one per cent in the
value of the euro against other currencies would have reduced the equity by approximately € 2.8 million
(2009: € 2.7 million).
51.7 Estimate of fair value

Details are given below of the main methods and assumptions used in estimating the fair value of financial
instruments.
The fair value of foreign exchange forward contracts is calculated by discounting the difference between the
contractual and the current forward price, multiplied by the principal amount of the contract, for the residual
term at the market interest rate.
The fair value of interest rate swaps is calculated by discounting the difference between the contractual and
the current interest, multiplied by the principal amount of the interest rate swap, for the residual term at the
market interest rate. The result is periodically checked against bank statements.
Bank statements are used to determine the fair value of interest rate caps. These statements are inspected to
ensure that they are reasonable with the aid of techniques based on discounted cash flows based on the
conditions and terms of the contract and using market interest rates for a comparable instrument as at the
reporting date.
The fair value of long-term debts is calculated on the basis of the discounted value of expected future cash
flows from repayments and interest payments.
The fair value of financial lease liabilities is estimated on the basis of the present value of future cash flows,
discounted at the interest rate for similar lease agreements.
In the case of trade debtors, other receivables, trade creditors and other short-term debts which fall due within
one year, the nominal value is deemed to reflect the fair value. The financial instruments valued on the basis of
fair value fall into category 2 as in 2009: no quoted market price in an active market, with the fair value being
determined indirectly.
52 LIABILITIES NOT SHOW N I N T HE BAL ANCE SHE E T

Operational lease as lessee
Payments due under non-cancellable operational lease agreements are as follows:
2010 2009
Less than one year 7.2 6.2

Between one and five years 15.0 13.8
More than five years 14.0 9.3
36.2 29.3

The Group leases buildings, plant, vehicles and office equipment under operational leases. The leased buildings
have a term of ten to fifteen years. Lease payments are indexed annually. None of the lease agreements include
conditional lease payments. In principle the Group does not act as a lessor. The term of the other lease
agreements is a maximum of five years.
53 INVESTMENT LIABI L I T I E S
In 2010 the Group entered into contractual liabilities for the purchase of tangible fixed assets. The amount of
the liabilities as at 31 December 2010, after deduction of advance payments already made during the financial
year, is € 4.9 million (2009: € 5.3 million).
54 CONTINGENT LIABI L I T I E S
The Group has received claims for damages arising from the conduct of business. With the exception of those
stated below, the claims are not deemed to be substantial and provisions have been recognised to the extent
necessary.
A claim for damages has been made against Royal Ten Cate by United Fabrics NV, a company registered in the
Netherlands Antilles (majority shareholder in Textielgroep Twenthe NV). The claim is based on an outsourcing
and management agreement from 1998 and originally amounted to € 56 million. The claim in respect of the
outsourcing agreement has lapsed permanently as a result of a judgement by the Supreme Court in 2006. The
plaintiff was ordered to demonstrate the damage suffered in respect of the management agreement. TenCate is
confident with regard to the remainder of the proceedings.
55 SUBS EQUENT EVE NT S

A commentary on events subsequent to the reporting date can be found on page 162.
56 RELATED PAR TIES
56.1 Identity of related parties

Related parties concern relationships between the Group and its subsidiaries, associated companies and other
participating interests, joint ventures, the TenCate pension fund and the members of the Executive and
Supervisory Board.

> OTHER INFORMATION
56.2 Directors’ remuneration

The remuneration of the menbers of the Executive Board was as follows:
L. de Vries J. Lock1 J. Wegstapel2
in thousands of euros 2010 2009* 2010 2009* 2010 2009
Periodic remuneration 613 576 300 225 – 298

Results-related pay for the
previous year 230 279 68 – – 86
Pension costs 189 986 85 32 – 59
Early Retirement (Pre-pension and
Life Course Savings) Act 58 110 – – – –
Special remuneration 51 – – – – 447
Option costs 338 369 169 85 – –
1,479 2,320 622 342 – 890
1 From 1 April 2009.
2 To 31 October 2009.
* Adjusted for comparison purposes.
The special remuneration paid to Mr De Vries in respect of 2010 concerns an anniversary payment.
The results-related pay of Mr De Vries amounts to a maximum of 50% of the fixed annual salary. In 2010,
Mr De Vries received a variable salary component in respect of 2009 amounting to 37.5% of the fixed annual
salary. This took into account the fact that the result fell sharply in 2009 compared to 2008, mainly due to the
financial crisis, and the fact that the Board took the appropriate measures in time in order to reduce costs and
continue to comply with the bank covenants. Mr Lock’s variable salary component is a maximum of 40% of the
fixed salary. In 2010, Mr Lock received a pro rata percentage of 22.5% as variable remuneration in respect
of 2009.
As at 31 December 2010 Mr De Vries held 176,901 shares in the Company (31 December 2009: 136,901 shares)
and 350,000 options (31 December 2009: 330,000 options). Mr Lock held 4,453 shares (31 December 2009: 259)
in the Company and 94,000 options (31 December 2009: 68,000 options). Messrs De Vries and Lock are
participating in the Group’s share option plan. The costs of the options are charged to the result in three years.
The options granted to Mr Lock are charged to the result in 1.5 years due to his retirement in 2011. See also
note 67.

The remuneration of the members of the Supervisory Board was as follows:
2010 2009
in euros
J.C.M. Hovers – Chairman 1, 2 39,972 39,972

P.P.A.I. Deiters – Vice-Chairman 2 30,492 30,492
F.A. van Vught 2, * 25,008 25,008
E. ten Cate 1 25,008 25,008
R. van Gelder 1, 3 22,869 –
143,349 120,480
1 Member of the Financial Committee.
2 Member of the combined Remuneration, Selection and Appointments Committee.
3 From 8 April 2010.
* Chairman.
Mr Deiters received remuneration amounting to US $ 15,000 in 2009 and 2010 in respect of his supervisory
directorship of Ten Cate Thiolon Middle East in Dubai. The members of the Supervisory Board held no shares or
option rights of Royal Ten Cate at the end of 2010.
56.3 Transactions with associated companies, other participating interests and joint ventures
During the 2010 financial year, associated companies, other (non-consolidated) participating interests and
joint ventures purchased goods from the Group amounting to € 19.2 million (2009: € 20.9 million). As at
31 December 2010 the outstanding trade receivables due to the Group from associated companies amounted to
€ 3.9 million (2009: € 6.6 million) and from joint ventures € 0.2 million (2009: € 0.1 million). The Group has less
than € 0.1 million of trade accounts payable to associated companies and joint ventures.
Transactions with other associated companies and joint ventures take place on an objective, business basis.
56.4 Subsidiaries
A list of (significant) subsidiaries and associated companies can be found inside the back cover of this report.

> OTHER INFORMATION
57 ES TIMATES AND J UDGM E NT S F ORM E D BY T HE M A N A G E M E N T

The Executive Board has conducted discussions with the Financial Committee on the critical principles for the
financial reporting and estimates, as well as the application of such principles and estimates. Information on
assumptions and uncertainties regarding estimates which entail a substantial risk of a material adjustment in
the subsequent financial year is included in the following notes:
◾ With regard to the pensions, the main actuarial assumptions are stated in note 49.
◾ With regard to guarantees and claims, provisions have been formed whenever there is an actual liability or
it is likely that an outflow of funds will be necessary. The result of this is stated in note 50.
◾ With regard to impairments in the case of loss-making companies, an examination has been carried out to
determine whether the realisable value of any cash generating unit was lower than the book value. This
was not the case in 2010 and 2009. Future detrimental changes in the estimate as a result of changed
assumptions may lead to the realisable value falling below the book value. See note 38.2.
◾ Estimates with regard to the use of tax losses are included in note 41.

Company financial statements
58 COMPANY P ROFI T AND L OSS ACCOUNT

In millions of euros note 2010 2009
Result from participating interests after profit tax 60 46.6 29.1

Other results after profit tax – 0.6 – 5.2
NET INCOME 46.0 23.9
59. COMPANY BALANCE SHE E T ( BE F ORE APPROPRI ATI O N O F T H E R E S U LT )

In millions of euros 2010 2009
FINANCIAL FIXED ASSETS 60

Participating interests in subsidiaries 672.6 628.1
Loans to subsidiaries 83.4 49.8
Deferred profit tax assets 13.5 12.3
Total fixed assets 769.5 690.2
CURRENT ASSETS
Due from subsidiaries 1.5 0.2
Other receivables 0.4 1.1
Total current assets 5.0 4.2
TOTAL ASSETS 774.5 694.4
EQUITY
Share capital 62 63.8 62.7
Share premium reserve 64 45.8 46.9
Legal reserve 65 2.5 – 11.1
Other reserves 66 273.8 258.4
Undistributed result 46.0 23.9
431.9 380.8
PROVISIONS 68 1.6 1.6
LONG-TERM LIABILITIES 69 192.4 190.2
SHORT-TERM LIABILITIES 70 148.6 121.8

TOTAL EQUITY AND LIABILITIES 774.5 694.4

Notes to the company financial statements
General
Accounting principles
The parent company financial statements of Royal Ten Cate form an inseparable whole with the 2010 financial
statements of Royal Ten Cate and have been prepared in accordance with the statutory requirements of Part 9
of Book 2 of the Netherlands Civil Code. In determining the accounting principles for its parent company financial
statements, Royal Ten Cate uses the option available under article 2.362 paragraph 8 of the Netherlands Civil
Code. This means that the accounting principles for the parent company financial statements of Royal Ten Cate
are the same as those applying to the consolidated financial statements. Associated companies over which
significant influence is exercised are valued in accordance with the equity method. The consolidated financial
statements have been prepared in accordance with the standards set by the International Accounting Standards
Board and adopted by the European Union. A description of these standards can be found in the accounting
policies applicable to the consolidated financial statements.
The share in the results of associated companies includes the share of Royal Ten Cate in the results of these
companies. Results from transactions involving a transfer of assets and liabilities between Royal Ten Cate and
its participating interests and between individual participating interests are not included to the extent that they
can be considered to be unrealised.
Deferred
Interest in Loans to profit tax
60 FINANCIAL FIXED ASSE T S subsidiaries subsidiaries receivables Total
Balance as at 1 January 628.1 49.8 12.3 690.2

Investments/capital contributions 11.0 – – 11.0
Translation differences 19.5 1.9 – 21.4
Loans granted – 58.2 – 58.2
Repayment of loans – – 26.5 – – 26.5
Result from subsidiaries 46.6 – – 46.6
Dividend of subsidiaries – 32.6 – – – 32.6
Change in deferred tax – – 1.2 1.3
Balance as at 31 December 672.6 83.4 13.5 769.5
Royal Ten Cate is at the head of the Group and has capital interests in the subsidiaries stated on the cover.
61 EQUITY
The equity in the parent company financial statements corresponds to the equity in the consolidated financial
statements. A statement of changes in equity can be found on page 94.

62 CALLED AND PAID- UP CAPI TAL 2010 2009
Authorised share capital 200.0 200.0

Of which not issued 136.2 137.3
63.8 62.7
63 OR DINARY SHAR E S 2010 2009
The authorised share capital consists of:

80,000,000 ordinary shares of € 2.50 200.0 200.0
Issued share capital

Balance as at 1 January 2010 2009
Ordinary shares 25,067,580 and 23,966,901 62.7 59.9

Issued stock dividend 434,327 and 1,100,679 1.1 2.8
64 SHAR E P REMIUM RE SE RVE 2010 2009

Issued stock dividend – 1.1 – 2.8
The share premium reserve is available for distribution to shareholders.
65 LEGAL R ES ER VES
65.1 Retained earnings of subsidiaries 2010 2009
Balance as at 1 January – 2.7

Added from appropriation of result in respect of 2010 and 2009 – –
Transferred to other reserves through sale of joint venture – – 2.7
Balance as at 31 December – –
This reserve has been created for associated companies, other participating interests and joint ventures where
free disposal of retained earnings is subject to restriction.

> NOTES TO THE COMPANY FINANCIAL STATEMENTS
65.2 Translation differences 2010 2009
Balance as at 1 January – 15.3 – 8.6

Change 18.6 – 6.7
Balance as at 31 December 3.3 – 15.3
65.3 Hedging reserve 2010 2009
Balance as at 1 January – 0.2 –

Change – 3.4 – 0.2
Balance as at 31 December – 3.6 – 0.2
65.4 Other legal reserves 2010 2009
Balance as at 1 January 4.4 –

Transfer from Other reserves – 1.6 4.4
The other legal reserves concern capitalised development costs, undistributable reserves of subsidiaries
and the hedging reserve.
Balance of legal reserves as at 31 December 2.5 – 11.1
66 OTHER RESERV ES 2010 2009

Transferred to Other legal reserves 1.6 – 4.4
Added from 2009 and 2008 result 18.0 46.9
Transferred from legal reserves through sale of joint venture _ 2.7
Share and option schemes 1.4 1.2
Issue of repurchased shares for share savings plan/option plan 1.3 0.1
Acquisition of non-controlling interests – 6.9 –
Other items – – 0.2
67 OPTION P LAN
Royal Ten Cate operates a stock option plan for the management, established by the Supervisory Board.
The maximum possible account has been taken of the recommendations of VNO-NCW and the Dutch Investors’
Association (VEB). Those eligible for options are members of the Executive Board, the corporate and group
directors and a number of managers. The implementation of the share option plan is supervised by the
compliance officer.

The options are granted on a conditional basis. During the vesting period, a performance condition must be
fulfilled. This condition is that the earnings per share, adjusted to take account of non-recurring items, over the
past three, four or five years must have increased on average by a percentage equal to inflation plus 3% per
year. If this performance condition has been fulfilled, the options become unconditional and may be exercised,
unless restrictions have been imposed by the Netherlands Authority for the Financial Markets.
The total term of the options is six to ten years. The exercise period is three to five years. The vesting period is
three to a maximum of five years.
The option exercise price is equivalent to the average price of the Royal Ten Cate share on Euronext Amsterdam
nv on the five stock exchange trading days following publication of the annual figures. Each granted option right
lapses on early termination of employment.
In principle options amounting to approximately 1.5% of the total number of shares outstanding will be granted
in any one year. The exercise of options is subject to the restrictions laid down in the Securities Transactions
Supervision Act.
67.1 Granting of options in 2011

On 1 March 2011 the intention was to grant 305,000 conditional options at the average market price during the
five stock exchange trading days following publication of the annual results on 2 March 2011. The distribution is
as follows:
01-03-2011* 03-03-2010**
Members of the Executive Board 100,000 90,000

Management and management support staff 205,000 196,500
305,000 286,500
* provisional
** final
67.2 Statement of movements in options of the Executive Board in 2010
L. de Vries
Number of Exercised/ Exercised Lapsed Outstanding Exercisable
Issued on Term until options Exercise price lapsed to 2009 in 2010 in 2010 31-12-2010 31-12-2010
25-02-2003 25-02-2011 40,000 6.18 40,000 – – – –

25-02-2004 25-02-2012 40,000 10.29 – 40,000 – – –
22-02-2005 22-02-2013 50,000 15.17 – – – 50,000 50,000
01-03-2006 01-03-2014 60,000 23.63 – – – 60,000 60,000
28-02-2007 28-02-2017 60,000 25.77 – – – 60,000 60,000
05-03-2008 05-03-2018 60,000 22.50 – – 60,000 –
03-03-2009 03-03-2019 60,000 11.70 – – – 60,000 –
03-03-2010 03-03-2020 60,000 18.96 – – – 60,000 –
430,000 40,000 40,000 – 350,000 170,000
01-03-2011 01-03-2021 60,000

J. Lock
25-02-2003 25-02-2011 – 6.18 – – – – –

25-02-2004 25-02-2012 4,000 10.29 – 4,000 – – –
22-02-2005 22-02-2013 12,000 15.17 – – – 12,000 12,000
01-03-2006 01-03-2014 16,000 23.63 – – – 16,000 16,000
28-02-2007 28-02-2017 16,000 25.77 – – – 16,000 16,000
05-03-2008 05-03-2018 20,000 22.50 – – – 20,000 –
03-03-2009 03-03-2019 – 11.70 – – – – –
03-03-2010 03-03-2020 30,000 18.96 – – – 30,000 –
98,000 – 4,000 – 94,000 44,000
01-03-2011 01-03-2021 40,000
44,000 options were exercised in 2010 (2009: no options exercised). The weighted average share price on the
exercise date was € 17.58.
In March 2011 it was intended to grant 60,000 options to Mr De Vries and 40,000 options to Mr Lock. 40,000 of
the options in the 2009 series are reserved for outstanding performance, a decision on which will be taken in
due course. These options are not included in the above statements.
67.3 Statement of movements in options of management and management support staff in 2010

25-02-2003 25-02-2011 48,200 6.18 44,600 2,400 – 1,200 1,200

25-02-2004 25-02-2012 51,600 10.29 42,798 1,200 – 7,602 7,602
22-02-2005 22-02-2013 90,400 15.17 31,400 20,000 – 39,000 39,000
01-03-2006 01-03-2014 125,200 23.63 26,200 11,600 – 87,400 87,400
28-02-2007 28-02-2017 129,000 25.77 11,000 5,000 12,000 101,000 101,000
05-03-2008 05-03-2018 187,000 22.50 43,000 – 20,000 124,000 –
03-03-2009 03-03-2019 176,250 11.70 2,000 – 10,000 164,250 –
03-03-2010 03-03-2020 196,500 18.96 – – – 196,500 –
1,004,150 200,998 40,200 42,000 720,952 236,202
01-03-2011 01-03-2021 205,000

67.4 Complete statement of movements in options in 2010

25-02-2003 25-02-2011 88,200 6.18 84,600 2,400 – 1,200 1,200

25-02-2004 25-02-2012 95,600 10.29 42,798 45,200 – 7,602 7,602
22-02-2005 22-02-2013 152,400 15.17 31,400 20,000 – 101,000 101,000
01-03-2006 01-03-2014 201,200 23.63 26,200 11,600 – 163,400 163,400
28-02-2007 28-02-2017 205,000 25.77 11,000 5,000 12,000 177,000 177,000
05-03-2008 05-03-2018 267,000 22.50 43,000 – 20,000 204,000 –
03-03-2009 03-03-2019 276,250 11.70 2,000 – 10,000 264,250 –
03-03-2010 03-03-2020 286,500 18.96 – – – 286,500 –
1,572,150 240,998 84,200 42,000 1,204,952 450,202
01-03-2011 01-03-2021 305,000
84,200 options were exercised in 2010 (2009: no options exercised). The weighted average share price on the
exercise date for share options exercised in 2010 was € 21.69.
The fair value of the share-based payment plans on the grant date has been determined on the basis of the
following input:
2010 2009
Fair value on grant date

Price on grant date (15-day average) € 18.27 € 12.14
Exercise price € 18.96 € 11.70
Expected volatility 36.9% 36.0%
Option term 8 jaar 8 jaar
Expected dividend yield 2.65% 3.37%
Risk-free interest rate 3.13% 3.28%
67.5 Share savings plan

All employees in the Netherlands have been given the possibility of participating in the share savings plan.
The maximum amount per participant in 2010 was € 1,226 (2009: € 1,226).
The following savings were accumulated through this plan:
In 2010: 3,936 (2009: 5,855) shares
Up to 2010: 61,846 (2009: 57,910) shares

67.6 Repurchased shares

In principle the company will repurchase shares in order to prevent any dilution of earnings per share caused by
the granting of options.
2010 2009
number of shares
Number as at 1 January 521,392 527,247

Issued in respect of options – 84,200 –
Issued in respect of share savings plan – 3,936 – 5,855
Balance as at 31 December 433,256 521,392
68 P ROVIS IONS 2010 2009
Guarantees and claims 1.6 1.6

Other items – –
The term of the provisions exceeds one year.
69 LONG-TER M LIAB I L I T I E S 2010 2009
Syndicated loan 188.8 185.1

Loans from subsidiaries 3.6 5.1
The conditions of the syndicated loan can be found in note 48 in the notes to the consolidated balance sheet.
70 S HORT-TER M LIABI L I T I E S 2010 2009
Cash loans, overdrafts 139.1 112.0

Owed to consolidated subsidiaries 1.1 8.1
Trade creditors and other payables 8.4 1.7
The short-term liabilities are due in less than one year.

71 AUDITOR ’S FEES
The following fees of KPMG Accountants N.V. and the other entities affiliated to the KPMG network have been
charged to the Group, in accordance with article 382a Part 9 of Book 2 of the Netherlands Civil Code.
Fees 2010 2009
in thousands of euros
Examination of the financial statements 790 760

Other audit assignments 320 286
Other non-audit services 340 204
Total 1,450 1,250
72 LIABILITIES NOT SHOW N I N T HE BAL ANCE SHE E T

The company has issued a declaration of liability in accordance with article 403 of Book 2 of the Netherlands
Civil Code on behalf of its Dutch subsidiaries.
The company forms a tax group together with the majority of the Dutch subsidiaries for corporation and sales
tax. Each of these subsidiaries is severally liable for the tax payable by all the companies included in the tax
group.
We also refer to the notes in the section 54 concerning contingent liabilities. Guarantees have also been issued
for a number of foreign subsidiaries.
Almelo, 1 March 2011
Executive Board
L. de Vries, President
J. Lock
Supervisory Board
J.C.M. Hovers, Chairman
P.P.A.I. Deiters, Vice-Chairman
F.A. van Vught
E. ten Cate
R. van Gelder

Other information
IN D EPENDENT AUDITOR’S RE PORT

To the General meeting of shareholders of Royal Ten Cate
Report on the financial statements

We have audited the accompanying financial statements 2010 of Royal Ten Cate, Almelo, as set out on pages
85 to 159 of this report. The financial statements include the consolidated financial statements and the company
financial statements. The consolidated financial statements comprise the consolidated balance sheet as at
31 December 2010, the consolidated statements of comprehensive income, the consolidated statement of
changes in group equity and the consolidated cash flow statement for the year then ended, and notes,
comprising a summary of the significant accounting policies and other explanatory information. The company
financial statements comprise the company balance sheet as at 31 December 2010, the company profit and loss
account for the year then ended and the notes, comprising a summary of the accounting policies and other
explanatory information.
Management’s responsibility
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of
the Netherlands Civil Code, and for the preparation of the management board report in accordance with Part 9
of Book 2 of the Netherlands Civil Code. Furthermore, management is responsible for such internal control as it
determines is necessary to enable the preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion with respect to the consolidated financial statements

In our opinion, the consolidated financial statements give a true and fair view of the financial position of
Royal Ten Cate as at 31 December 2010 and of its result and its cash flows for the year then ended in accordance
with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of
the Netherlands Civil Code.
Opinion with respect to the company financial statements

In our opinion, the company financial statements give a true and fair view of the financial position of
Royal Ten Cate as at 31 December 2010 and of its result for the year then ended in accordance with Part 9 of
Book 2 of the Netherlands Civil Code.
Report on other legal and regulatory requirements

Pursuant to the legal requirements under Section 2:393 sub 5 at e and f of the Netherlands Civil Code, we have
no deficiencies to report as a result of our examination whether the management board report, to the extent we
can assess, has been prepared in accordance with part 9 of Book 2 of this Code, and if the information as
required under Section 2:392 sub 1 at b - h has been annexed. Further, we report that the management board
report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub
4 of the Netherlands Civil Code.
Amstelveen, 1 March 2011
KPMG ACCOUNTANTS N.V.
T. van der Heijden RA

> OTHER INFORMATION
SU B SEQUENT EV ENTS
On 25 February, TenCate acquired a majority of the shares of GreenFields. The intention is to bring the
percentage to 75% in the short term.
TenCate has also signed a letter of intent with C.S.C. Ceelen Sport Constructies, a leading installer of synthetic
turf pitches.
PRO VISIONS OF THE A RT I CL E S OF ASSOCI AT I ON RE L AT I N G T O A P P R O P R I AT I O N O F P R O FI T

(Article 27)
General
The authorised capital is divided into ordinary shares.
Summary of the provisions of the articles of association

1. Profit distributions may only take place to the extent that the equity of the Company exceeds the paid and
called-up part of the issued capital plus the reserves which must be held by law.
2. With the approval of the Supervisory Board, the Executive Board is authorised to determine the part of the
profit that will be reserved.
3. The sum remaining from the profit after the reservation in accordance with paragraph 2 is at the disposal of
the general meeting of shareholders.
4. Shares held by the Company in its own capital are not taken into account in calculating the appropriation of
profit.
5. The dividend payable shall be made payable no later than 30 days after adoption of the financial statements
by the general meeting of shareholders. It shall be made payable only to the authorised persons in whose
name the shares are held. Such payments shall discharge the Company.
6. A shareholder’s claim for payment shall be time-barred after a period of five years has elapsed.

PRO POSED APP ROPR I AT I ON OF PROF I T
In millions of euros 2010 2009
Net income 46.0 23.9

Added to other reserves in accordance with article 27, paragraph 2 of the articles of association – 28.5 – 4.5
17.5 19.4
Net change in the legal reserves 1.6 – 4.2
19.1 15.2
Undistributed dividend balance from previous year 0.0 0.0
19.1 15.2
Payment of € 0.75 and € 0.60 dividend to holders of ordinary shares in accordance with article 27 paragraph 3
of the articles of association – 18.8 – 15.0
Undistributed dividend balance at year end, which is transferred to the relevant account 0.3 0.2

Ten-year summary
In millions of euros, unless stated otherwise Figures based on

Figures based on IFRS Dutch GAAP
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
CO N S OLIDATED
PRO F IT AND LOS S ACC OUNT
Revenues 984.5 842.1 1,032.6 886.0 770.5 686.5 641.0 569.6 602.1 620.0
Changes in inventories of finished products and
work in progress – 17.8 29.8 – 18.0 – 11.7 – 4.8 0.5 – 12.6 – 2.6 – 2.4 6.0
Raw materials and manufacturing supplies 501.1 391.6 562.0 463.6 402.2 353.8 332.1 280.7 289.9 297.2
Work contracted out and other external expenses 73.9 63.1 60.7 54.9 34.7 29.3 29.5 28.8 36.4 37.9
Personnel costs 188.0 173.0 190.3 178.3 171.2 161.6 159.7 142.9 151.3 159.1
Other operating costs 119.8 109.2 111.5 98.8 94.0 83.5 78.5 71.5 79.0 78.9
Depreciation and impairment 34.5 33.9 30.7 29.1 22.1 18.6 18.9 18.5 22.9 25.0
EBITA 85.0 41.5 95.4 73.0 51.1 39.2 34.9 29.8 25.0 15.9
Amortisation 10.4 8.8 11.6 3.6 1.0 0.7 0.3 1.1 1.1 1.0
OPERATING RESULT (EBIT) 74.6 32.7 83.8 69.4 50.1 38.5 34.6 28.7 23.9 14.9
Net financial expenses – 10.0 – 12.7 – 13.7 – 11.3 – 8.0 – 4.6 – 6.8 – 7.0 – 12.0 – 12.9
RESULT BEFORE PROFIT TAX 64.6 20.0 70.1 58.1 42.1 33.9 27.8 21.7 11.9 2.0
Profit tax – 17.9 – 5.6 – 19.1 – 11.9 – 11.4 – 11.5 – 9.2 – 5.3 1.7 0.7
RESULT AFTER PROFIT TAX BUT BEFORE
RESULT FROM PARTICIPATING INTERESTS 45.4 14.4 51.0 46.2 30.7 22.4 18.6 16.4 13.6 2.7
Share in net income of associated companies – 1.3 8.7 – 0.3 45.4 8.1 5.1 3.9 5.4 3.5
RESULT AFTER PROFIT TAX 45.4 23.1 51.0 46.5 76.1 30.5 23.7 20.3 19.0 6.2
Extraordinary items after profit tax – – – – – – – – 12.3 – 12.0
RESULT AFTER PROFIT TAX 45.4 23.1 51.0 46.5 76.1 30.5 23.7 20.3 31.3 – 5.8
Non-controlling interests 0.6 0.8 0.1 – 0.1 – 0.1 – – 0.1 – – 0.2 0.1
NET RESULT 46.0 23.9 51.1 46.4 76.0 30.5 23.6 20.3 31.1 – 5.7
Dividend 18.8 15.0 20.4 18.8 16.2 12.5 10.2 8.5 7.7 2.4
EBITA in % of revenues 8.6% 4.9% 9.2% 8.2% 6.6% 5.7% 5.4% 5.2% 4.2% 2.6%
Return on net capital employed* 12.1% 5.7% 13.4% 13.1% 14.4% 15.3% 13.5% 11.7% 9.7% 5.9%
* Prior to 2007, based on net capital employed at year-end

In millions of euros, unless stated otherwise Figures based on
Figures based on IFRS Dutch GAAP
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
CO N SOLIDATED BALANCE SHE E T

Intangible assets 242.8 203.8 212.1 136.8 12.4 13.8 12.1 10.6 12.8 14.7
Tangible fixed assets 214.2 214.7 247.4 218.1 165.8 161.4 118.8 118.1 130.5 154.3
Financial fixed assets 35.6 45.3 25.1 19.8 18.3 35.2 19.9 11.4 9.2 5.6
Total fixed assets 492.6 463.8 484.6 374.7 196.5 210.4 150.8 140.1 152.5 174.6
Inventories 216.9 155.0 211.5 176.2 157.7 157.5 138.6 110.0 117.4 124.6
Receivables 169.8 116.9 187.7 166.2 128.2 125.0 98.8 91.7 89.8 109.7
Securities and cash 11.6 12.8 5.4 4.8 6.7 4.6 2.7 5.8 2.9 0.1
Total current assets 389.3 284.7 404.6 347.2 292.6 287.1 240.1 207.5 210.1 234.4
TOTAL ASSETS 890.9 748.5 889.2 721.9 489.1 497.5 390.9 347.6 362.6 409.0
Equity* 431.9 380.8 366.9 310.1 238.7 181.8 146.5 162.0 152.9 129.5
Non-controlling interests 3.8 4.1 5.1 0.3 0.2 – 0.1 0.1 0.2 0.1
Group equity 435.7 384.9 372.0 310.4 238.9 181.8 146.6 162.1 153.1 129.6
Provisions 40.0 40.5 43.5 40.8 43.8 56.1 52.1 15.6 15.1 14.4
Long-term debts 195.2 192.0 316.2 222.3 63.5 130.2 74.1 82.9 107.0 77.7
Banks and short-term loans 57.1 16.3 20.3 12.9 30.4 27.1 24.6 13.9 8.9 99.7
Other short-term debts 162.9 114.8 137.2 135.5 112.5 102.3 93.5 73.1 78.5 87.6
TOTAL LIABILITIES 890.9 748.5 889.2 721.9 489.1 497.5 390.9 347.6 362.6 409.0
* With effect from 2003 equity before appropriation of profit.
Group equity/total capital 49% 51% 42% 43% 49% 37% 38% 47% 42% 32%
Acquisitions /(de)consolidations 24.7 – 3.3 88.1 175.1 – 63.0 40.8 29.2 0.3 1.4 23.6
Investments in tangible and intangible
fixed assets 21.3 17.3 48.0 62.9 43.0 26.2 12.0 16.9 17.0 28.5
Depreciation and amortisation 44.9 42.7 42.3 32.7 23.1 19.3 19.2 19.6 24.0 26.0
Number of staff years at year-end 4,271 3,805 4,437 4,020 3,532 3,578 3,634 3,245 3,278 3,625
Number of shares outstanding at year-end

(x 1,000) 25,502 25,068 23,967 23,556 21,063 20,784 20,472 20,096 19,192 18,872
Net earnings per € 2.50 share 1.84 0.97 2.18 2.04 3.66 1.48 1.17 1.03 1.63 – 0.31
Dividend per share in euros 0.75 0.60 0.85 0.80 0.70 0.60 0.50 0.43 0.40 0.13
Closing price in euros 28.00 18.43 16.05 21.27 23.21 21.50 13.55 9.02 6.25 6.50

Corporate technology
Biobased
Geosynthetic materials benefi t from

use of the most durable yarns, such
as those used in for example TenCate
Geotube ® systems. This woven material
has already been used for many years
to dewater and consolidate sludge
and industrial waste (such as dredged
materials, paper pulp and slurry) in a
sustainable way. Artificial dyke bodies
are also made with this material. After
proven service many of these systems
are left in the ground because their
removal is either unnecessary or
difficult.
Biobased is the collective name

for products made of natural raw
materials that are biodegradable
and harmless to both people and the
environment. TenCate’s Corporate
Technology department is working in
the Biobased Technology & Economy
project on biobased geotextiles that
will spontaneously compost after a
pre-set time and thus disappear from
the ground. TenCate is investigating the
suitability of a degradable biopolymer
that is to be developed. The new yarn
will also be made suitable for functional
applications in other durable TenCate
products.

TenCate Aerospace Composites,

together with Fokker Aerostructures
(NL), Gulfstream Aerospace Corporation
(USA), KVE Composites Group (NL) and
Ticona GmbH (GE), were presented the
JEC 2010 Innovation Award in Paris in
April 2010. This prestigious prize in the
category Aeronautics was awarded
to the parties involved in the design,
development and production of the first
aircraft rudder and elevator to be made
of welded thermoplastic composite. This
primary structural part of the Gulfstream
G650 forms an integral part of the new
tail section of this business aircraft.
The JEC Award is the recognition of a

top achievement, which came about
through close cooperation between the
Gulfstream Aerospace Corporation and
the above-mentioned partners. TenCate
Aerospace Composites manufactured
the carbon-fibre- reinforced laminate.
This composite remains stiff, impact-
resistant and dimensionally stable, even
when exposed to elevated temperatures
and aggressive fluids. The increased
use of thermoplastic composite in the
aviation industry is a trend, focused on
weight reduction, fuel savings and the
need for recycling. Thanks to its flame-
retardant properties, it meets the high
safety standards.
40
and ATMs.
France Spain India
5
◾ By destination
Thailand
0 ◾ By origin
BELGIUM
GERMANY
NETHERLANDS
UK
FRANCE
AUSTRIA
ITALY
SPAIN
OTHER EU
OTHER EUROPE
MIDDLE EAST
USA + CANADA
SOUTH AMERICA
CENTRAL AND
ASIA
REST OF THE WORLD

40
and ATMs.
France Spain India
5
◾ By destination
Thailand
0 ◾ By origin
BELGIUM
GERMANY
NETHERLANDS
UK
FRANCE
AUSTRIA
ITALY
SPAIN
OTHER EU
OTHER EUROPE
MIDDLE EAST
USA + CANADA
SOUTH AMERICA
CENTRAL AND
ASIA
REST OF THE WORLD

Royal Ten Cate
Annual Report 2010

Translation
Frans Dekker
Courtesy © Boeing
Courtesy © NASA
Annual Report 2010
P.O. Box 58

Telephone +31 (0) 546 544 911
Fax +31 (0) 546 814 145
management.
www.tencate.com

course.
Royal Ten Cate
Annual Report 2010

Translation
Frans Dekker
Courtesy © Boeing
Courtesy © NASA
Annual Report 2010
P.O. Box 58

Telephone +31 (0) 546 544 911
Fax +31 (0) 546 814 145
management.
www.tencate.com

course.

Koninklijke TenCate Annual Report 2010 English

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Royal Ten Cate

Royal Ten Cate MATERIALS THAT MAKE A DIFFERENCE

Annual Report 2010

Our clear vision, mission and strategy give direction to

Superbus, the innovative mobility concept devised by former

Annual Report 2010

Our clear vision, mission and strategy give direction to

Superbus, the innovative mobility concept devised by former

REST OF THE WORLD

REST OF THE WORLD

Profile Inside cover

◾ Operating result before amortisation ◾ Advanced Textiles & Composites

EBITA BY SECTOR PER-SHARE DATA

◾ Advanced Textiles & Composites ◾ Net result

2 Royal Ten Cate

PROFIT AND LOSS ACCOUNT 2010 2009

Revenues 984.5 842.1

CONSOLIDATED BALANCE SHEET AND RETURN

Net capital employed (year-end) 715.4 620.9

CONSOLIDATED CASH FLOW

Cash flow from operating activities 29.1 144.8

OUTSTANDING SHARES (X 1,000)

Number of outstanding shares at year-end 25,502 25,068

Net result 1.84 0.97

Number of staff years at year-end 4,271 3,805

Annual Report 2010 3

4 Royal Ten Cate

Annual Report 2010 5

6 Royal Ten Cate

TenCate – a strong brand

Annual Report 2010 7

END-USER Safety and protection, sustainability and environment

DIFFERENTIATION PRODUCTS (materials, modules, systems)

P Physics BT Biomedical technology

C Chemistry / Chemical engineering ME Mechanical engineering

PC Nanotechnology / Polymer chemistry E Electronics

8 Royal Ten Cate

DIFFERENTIATION portfolio COST LEADER

armour composites geosynthetics industrial fabrics grass

Annual Report 2010 9

TenCate Grass Europe completes process optimisation

permanently guarantee the quality for which TenCate Grass is known.

10 Royal Ten Cate

L. de Vries, President and CEO

Annual Report 2010 11

Internal and external communication was more closely aligned in terms

Name Date of disclosure Percentage

Delta Lloyd N.V. 1 November 2006 5.08%

On the basis of the accompanying geographic breakdown of relatively

Geographic spead of institutional shareholders 2010 in per cent

The renowned TenCate Defender™ M

Because TenCate Defender™ M was

Connected through end-user marketing

DIFFERENTIATION portfolio COST LEADER

Annual Report 2010 15

CO-OPERATION IN THE VALUE CHAIN

New thematic format for txtures customer magazine

16 Royal Ten Cate

COMPOSITION Discussions took place in the autumn on the appointment of a

Annual Report 2010 17

COMBINED REMUNERATION, SELECTION AND APPOINTMENTS

Establishment of International Advisory Board

18 Royal Ten Cate

Annual Report 2010 19