Annual Report 2007 - TenCate

Annual Report 2007
Royal Ten Cate
‘ Today’s product development
is the basis for tomorrow’s
success.’ Tatjana Topalovic
‘ By co-operating within TenCate
Protective Fabrics and sharing
each other’s knowledge, we
can leverage scale, synergy
and strength in the market.
With every opportunity that
arises, we can see the added
value made possible by
this worldwide teamwork.’
Tara Glover
‘ Our R&D specialists work intensively
with the leading knowledge
carriers, including our suppliers,
customers, institutions and universities.
As a result, we have an international
R&D machine that enables
us to innovate more efficiently
every time. That’s what makes the
difference!’ Robert Lenferink
PEOPLE THAT MAKE THE DIFFERENCE
‘ All the parties
involved have made
a positive contribution
to this special
project. It’s a good
demonstration of
professional skill
and co-operation.’
Raymond Veldhuis

WE WANT TO BE KNOWN FOR THE DIFFERENCE WE MAKE, THIS IS THE FOCUS OF OUR TAGLINE
‘Materials’ best describes all our
products. Our materials are at the
crossroads of textile technology
and chemical processes.
We play an active role, contributing
to progress in our industries.
We bring measurable benefits to our customers
through the functionality of our materials.
Commercial overview

Commercial overview as
ADVANCED TEXTILES
& COMPOSITES SECTOR
PROTECTIVE & OUTDOOR FABRICS
◾ TenCate Protective Fabrics Europe/Asia
◾ TenCate Protective Fabrics USA
◾ TenCate Technical Fabrics
Protective and safety fabrics for applications in
specialist professions and industry and for outdoor
applications
AEROSPACE & ARMOUR
COMPOSITES
◾ TenCate Advanced Composites
◾ TenCate Advanced Armour
Composites for applications in the aerospace
industry, bullet-, needle- and fragment-proof
materials and specialist industrial applications
GEOSYNTHETICS
& GRASS SECTOR
at 31 December 2007
The division into market groups is based on the clustering of operating companies which co-operate intensively in the field of production technology,
research and development, marketing and sales. These market groups are combined into sectors. A complete overview of the legal entities which make
up the Group can be found on the inside back cover.
◾ Countries where TenCate
is established or represented
Royal Ten Cate Annual Report 2007
GEOSYNTHETICS
◾ TenCate Geosynthetics
Synthetic fabrics, nonwovens and grids for
applications in civil engineering, the environmental
market, the construction industry, agriculture,
sport and recreation
GRASS
◾ TenCate Thiolon
◾ TenCate Thiobac
Artificial grass systems and components for
top-flight sports and recreational and landscape
applications
TECHNICAL COMPONENTS /
HOLDING & SERVICES SECTOR
In addition to the holding activities, this sector
includes TenCate Enbi.
TENCATE ENBI
(Technical) rollers and components based on
rubber and foam technology for paper transport
and image transfer in printers, copiers, fax
machines, postal sorting machines, automated
teller machines, insulation and heating systems
and technical applications

Profile
Royal Ten Cate (TenCate) is a multinational
company which combines textile technology
with related chemical processes in the development,
production and marketing of functional
materials. Various market applications
are created around this technological basis.
Within the strategic core activities, TenCate
presents itself as a developer and producer of
specialist materials with high-quality, functional
characteristics. TenCate stimulates and
structures technological innovation and
product and process development in such a
way as to occupy long-term leading positions
in markets.
Materials that make a difference means that
TenCate produces materials that are distinctive.
TenCate develops high-quality, functional
solutions jointly with partners and end-users.
TenCate materials must be advanced, offering
greater added value. TenCate materials are
mainly used for:
◾ safety and protection;
◾ aerospace;
◾ sport and recreation;
◾ infrastructure and the environment.
TenCate employs over 4,000 people worldwide
and strives to operate in an ethically and
socially responsible way. On this basis it
encourages employees to be both proactive
and enterprising. It thereby demonstrates its
ambition to achieve progress for all stakeholders.
Geographic breakdown of sales in 2007
in per cent
◾ By destination
◾ By origin
50
45
40
35
30
25
20
15
10
5
0
NETHERLANDS
BELGIUM
GERMANY
UNITED KINGDOM
FRANCE
AUSTRIA
ITALY
OTHER EU
OTHER EUROPE
USA + CANADA
REST OF THE WORLD
ASIA

Annual Report 2007
Royal Ten Cate
Commercial overview Inside cover
Profile Inside cover
Financial highlights 3
Key developments in 2007 4
Evaluation of action plans 5
Actions for 2008 6
Vision, mission, strategy and objectives 7
Foreword by the Chairman of the Executive Board 8
The TenCate share 10
The power of innovation 13
Report of the Supervisory Board 15
Corporate governance 18
The Boards 20
Report of the Executive Board 22
General 22
Financial performance 24
SWOT analysis 27
Risk management 27
Information technology 34
Personnel & Organisation 34
Socially responsible enterprise 36
Post balance sheet events 40
Outlook 41
Sector reports 42
Advanced Textiles & Composites 44
Geosynthetics & Grass 54
Technical Components / Holding & Services 64
Financial statements 2007 69
Other information 126
Ten-year summary 130
List of operating companies and associated companies Outside backcover
Colophon Outside backcover

EBITA AND NET PROFIT
in millions of euros
◾ Operating result before amortisation
(EBITA)
◾ Net profit *
81
72
63
54
45
36
27
18
9
0
2003 2004 2005 2006 2007
PER-SHARE DATA
in euros
◾ Cash flow *
◾ Net profit *
◾ Dividend
3.6
3.2
2.8
2.4
2.0
1.6
1.2
0.8
0.4
0.0
2003 2004 2005 2006 2007
* Excluding result from divested activities and exceptional income (2007: € 3.1 million net).
2 Royal Ten Cate Annual Report 2007
REVENUES BY SECTOR
in millions of euros
◾ Advanced Textiles & Composites
◾ Geosynthetics & Grass
◾ Technical Components/Holding & Services
540
480
420
360
300
240
180
120
60
0
2003 2004 2005 2006 2007
EBITA PER SECTOR
in millions of euros
◾ Advanced Textiles & Composites
◾ Geosynthetics & Grass
◾ Technical Components/Holding & Services
48
42
36
30
24
18
12
6
0
– 6
2003 2004 2005 2006 2007

Financial highlights
In millions of euros, unless stated otherwise
PROFIT AND LOSS ACCOUNT 2007 2006
Revenues 886.0 770.5
Operating result before depreciation and amortisation (EBITDA) 102.1 73.2
Operating result before amortisation (EBITA) 73.0 51.1
Operating result before amortisation as % of revenues 8.2% 6.6%
Operating result (EBIT) 69.4 50.1
Net profit 46.4 76.0
Net profit excluding result from divested activities and exceptional income * 43.0 34.0
BALANCE SHEET AND RETURN
Net capital employed 585.0 375.7
EBITA as % of net average capital employed 15.2% 13.3%
Net interest-bearing debt 230.4 87.2
CASH FLOW
Cash fl ow from operating activities 27.8 45.2
Net investments / divestments of fixed assets – 51.8 – 38.5
Free cash fl ow – 24.0 6.7
Net acquisition / disposal of operating companies and associated companies – 175.1 62.7
OUTSTANDING SHARES (X 1,000)
Average number of outstanding shares 22,797 20,749
Number of outstanding shares at year-end 23,556 21,063
PER-SHARE DATA
Net profit 2.04 3.66
Net profit excluding result on divested activities and exceptional income * 1.89 1.64
Cash flow excluding result on divested activities and exceptional income * **
3.32 2.75
Dividend 0.80 0.70
Equity 13.16 11.33
EMPLOYEES
Number of staff years at year-end 4,020 3,532
*
2007: concerns in particular income from sale of real estate and associated charges: € 3.1 million net.
** Including book profit on sale of Synbra and Ten Cate Plasticum.
Royal Ten Cate Annual Report 2007
3
**

Key developments in 2007
◾ Group revenues grew to € 886 million.
Revenue growth in the strategic core
activities totalled 21%, including 16%
organic growth.
◾ EBITA increased 43% to € 73 million.
The organic growth amounted to 29%.
The growth was achieved in particular as
a result of the strong results in safety
fabrics for military applications, rescue
services and professional wear.
◾ Continuing growth in the EBITA margin to
8.2%, particularly as a result of cost control
and higher added value in the product
portfolio.
◾ The net profit excluding the result from
divested activities and exceptional
income grew 26.5% to € 43.0 million.
◾ High sales of military orders in the US
for fire-resistant fabrics (TenCate
Defender M).
4 Royal Ten Cate nv Annual report 2007
◾ Lower earnings from artificial grass (on
an organic basis) due to start-up costs for
substantial capacity increases and adjustments
to logistics processes; strong contribution
from TenCate Thiolon Middle
East.
◾ The market for geosynthetics in the US,
the largest geographic market for TenCate
Geosynthetics in volume terms, is under
pressure. As a result, margins are lower.
Developments in the rest of the world
market are favourable.
◾ 10% share issue and increase in the
financing facility at the beginning of 2007
to finance the acquisition of Roshield and
Mattex (TenCate Thiolon Middle East) and
possible future acquisitions.
◾ Completion of the acquisition of Roshield
(February) and announcement of the
acquisition of Composix (December).
These considerably strengthen TenCate’s
position in the vehicle armour market and
increase its growth potential.
Composix
At the beginning of 2008, the TenCate Aerospace & Armour Composites group acquired Composix, a leading company in the fast-
growing American armour market. Composix produces advanced armour solutions for the protection of vehicles, aircraft, vessels
and military personnel. The company enjoys an excellent reputation as a developer of revolutionary concepts. Composix is now a
major partner of the US Army and related producers. The acquisition of Composix is a major step in the implementation of the
strategy aimed at further growth in the world’s largest armour market.
◾ Strengthening of the position in the artificial
grass market through the acquisition
of Mattex (TenCate Thiolon Middle East)
in April and intensive strategic and commercial
co-operation with market participants.
◾ Acquisition of Phoenixx (July). This is an
important technological acquisition,
because it includes the acquisition of UD
technology (unidirectional composites).
That is important for further increasing
the use of composites in civil aviation.
The technology also offers attractive
potential in oil extraction (drill pipes).

Evaluation of action plans
Evaluation of action plans for 2007 announced
in the 2006 annual report.
◾ Buy & build – fix it/exit
The buy & build policy was implemented
energetically by means of the various
acquisitions made in 2007.
The measures taken in the artificial grass
business – apart from the acquisition
made – did not contribute sufficiently to
the required restoration of profitability.
TenCate, together with partners, aims to
achieve a general improvement in the
quality of artificial grass systems. Good
progress was made with the development
of the system approach, in which attention
is focused on the sport characteristics
of the overall artificial grass system.
TenCate has acquired important patents
which are necessary to achieve this
objective. These form the basis for the
development of a new generation of artificial
grass systems.
The process of concentrating production
at Nijverdal-Noord will take several years,
due partly to the necessary permits and
organisational and technological developments.
The expansion of the capacity of TenCate
Aerospace & Armour Composites was
completed. This is important partly for
the resumption of supplies to Airbus,
including for the A380 (TenCate in the
Netherlands) and future developments at
Boeing (TenCate in the United States).
◾ Knowledge protection
Knowledge protection is a constant action
point. TenCate made progress in acquiring
important strategic knowledge during the
financial year. Examples include the cooperation
with third parties in digital finishing
processes, patents for new artificial
grass solutions and the acquisition of
UD technology in the field of composites.
◾ Creating conditions for revenue growth in
Asia
When developing sales in Asia, TenCate
must be mindful of the need to protect its
technological knowledge and market position
elsewhere in the world.
Major progress was made with the construction
of a new plant for geosynthetics
in Zhuhai (China). This plant will be operational
in the course of 2008. Contacts
were also established with local market
participants. These must now be developed
strategically and commercially.
◾ Promotion of innovative developments
The annual ‘Competition and Innovation
Monitor’, a survey conducted by Erasmus
University in Rotterdam, led to another
innovation award being conferred on
TenCate. It received the designation of
‘most innovative company’, both technologically
and socially.
◾ Management development
In addition to personalised guidance and
support, TenCate provides training programmes
for groups of potential managers.
The ‘TenCate Active Programme’,
conducted jointly with TSM Business
School, was launched in 2007. This programme
proved extremely successful and
was viewed as very stimulating.
Royal Ten Cate Annual Report 2007
5

Actions for 2008
◾ Consolidation of the strategic positions
secured as a result of the acquisitions
made in 2007 and at the beginning of
2008. The acquired companies are intended
to strengthen the product, market and
technology positions. It is important to
operate on the basis of a single concept
and a single integrated market group.
◾ Further implementing the policy in the
Grass group, which is focused on raising
the quality of artificial grass systems.
Attention will also be devoted to the
price/quality ratio of the worldwide product
portfolio. The commercial and operational
measures (such as process control
and operational excellence) are intended
to deliver greater customer satisfaction
and a higher profit contribution.
6
Royal Ten Cate Annual Report 2007
◾ Further development of digital textile finishing
should be seen in 2008. In co-operation
with Xennia, the aim is to devise
specific ideas for improved products and/
or product innovations.
◾ Continued focus on sustainability and on
communication with stakeholders on sustainability
based on concrete actions and
the sustainable characteristics of our
product/market combinations.
◾ Control of growth in working capital. It is
important to maintain a tight liquidity policy
having regard to the available liquidity
headroom and the company’s growth
objectives.
◾ Combining purchasing flows where possible
and desirable. Purchasing is part of
the strategic concept in our value chain
model. This process must be further optimised.
◾ Development of management competences
for a growing company with worldwide
operations.
◾ In 2008 the group companies worldwide
will be connected to Global Active Directory.
The IT organisation for corporate
applications will be strengthened.

Vision, mission, strategy and objectives
VISION
A characteristic feature of our activities is the
major influence of technology. For the production
of new materials, TenCate will be able to
draw additionally on technological developments
which lie outside its core area. Textile,
chemical and materials technology will develop
into materials science. This will give rise
to new functional materials to replace the
existing materials. The materials and systems
will be available for use in existing and new
product/market combinations. On the basis of
their specific characteristics and functionalities,
they will make a positive contribution to
the developments and performance in the
industries in which we operate.
TenCate’s future will to a large extent be
determined by social themes, such as the
increased need for security and protection,
water management, energy consumption and
the environment.
MISSION
TenCate strives for leadership in growing
markets for specialist, functional materials.
To that end the company uses its broad technological
base, the individual skills of the
employees and a strong position in the value
Materials science
Materials science is an interdisciplinary field which has interfaces with chemistry, mechanics, mechanical engineering, civil and
electrical engineering and physics. It forms the relationship between production processes, performance, characteristics and the
structure of materials. With the increasing attention being devoted to nanotechnology, materials science has developed into one of
the main research areas at university level.
chain. By developing solutions, TenCate
creates advances in the market sectors in
which it operates. The added value for customers
and end-users results in more highly
rated products and profitable growth for the
company. That also creates value for shareholders.
TenCate strives for an internal culture based
on professionalism, openness, efficiency,
enthusiasm and respect. The core values of
the company are based on entrepreneurship,
innovative capability and a focus on results.
STRATEGY
Our strategy, which is characterised by market
leadership, value chain management, a
focus on specialist materials, growth (buy &
build) and a balanced portfolio of products
and strategic activities, has been enhanced
with the inclusion of the following:
◾ investment in fast-growing markets and/
or specific material applications
◾ investment in complementary technologies
◾ achievement of critical mass and strategic
coherence between activities.
FINANCIAL OBJECTIVES
◾ The net capital employed must generate a
sufficient return. The operating result
before amortisation as a percentage of
net capital employed must be at least
15%;
◾ The financial position must be sufficiently
solid. The ratio of net interest-bearing
debt to operating result before amortisation
and depreciation (EBITDA) must be
structurally lower than 2.5;
◾ The long-term growth of net earnings per
share before amortisation must be at
least 10%;
◾ An appropriate profit margin must be
achieved. The EBITA margin should gradually
rise to at least 10%.
Production
Structure
Performance
Characteristics

Foreword by the Chairman
of the Executive Board
DEVELOPMENTS AND RESULTS
Our buy & build policy was a central feature
once again in 2007. In strategic terms we
were highly successful during the year. Major
strategic developments took place both in our
artificial grass activities and in the field of
antiballistic composites. The acquisitions further
strengthened our position in the value
chain.
TenCate considerably strengthened its position
in vehicle armour this year, both in Europe
and in the United States, with the acquisitions
of Roshield and Composix. Vehicle
armour is considered to be a growth market.
Another notable development in 2007 was the
exceptional growth in revenues from fire-resistant
fabrics for use by the US Army.
Products were developed to meet the specifications
of the end-user, an area in which
TenCate occupies a distinctive position.
In this case it is quite appropriate to speak of
‘materials that make a difference’.
The 2007 picture was mixed. While some
business units recorded remarkable revenues
and profit growth, others lagged behind. In
our artificial grass activities, the major expansion
of production in the Netherlands and the
8
Royal Ten Cate Annual Report 2007
US and the acquisition of Mattex has not yet
resulted in satisfactory earnings growth. The
improvement will be gradual, taking into
account commercial relationships and our
links with other parties in the value chain.
TenCate Thiolon Middle East performed in
line with our expectations.
The market for geosynthetics in the US fell
short of expectations, putting downward
pressure on our earnings. Conditions elsewhere
in the world were more favourable.
Further progress was made with the integration
of the activities of TenCate Geosyn thetics
Europe.
The 16% organic growth in revenues from our
core businesses was inhibited by the developments
referred to above, particularly in artificial
grass and geosynthetics. In the mediumterm,
however, these will be attractive
markets offering TenCate good growth opportunities
worldwide, partly in view of the
strengthening of our strategic positioning.
Net profit excluding the result from divested
activities and exceptional income grew 26.5%
to € 43.0 million. TenCate is therefore continuing
the growth trend of previous years.
INNOVATION
Innovation is part of our long-term outlook
and one of the pillars of our value chain management
model. Hence we are fully engaged
in generating tomorrow’s growth. This is also
evident from the very high level of investments
in 2007, amounting to approximately
€ 63 million. Acquisitions are also giving us
access to new technologies, with which we
are accelerating developments and achieving
growth. An example is the acquisition of
Phoenixx in the United States.
Knowledge development and protection are
an important area of attention. A number of
development projects, including digital finishing
processes (DigiTex), offer bright prospects.
The focus on technological developments
is necessary in order for us to maintain
a leading position in our core markets in the
future.
Our technology focus has not gone unnoticed,
as is evidenced by the various awards conferred
on TenCate. One of these is the Erasmus
Innovation Award 2006/2007. The image
which this creates is important for TenCate as
a development partner.

COST CONTROL
As a result of our worldwide market position,
TenCate must maintain a sharper focus on
costs, particularly with regard to the European
production sites. This is partly due to the
strong relative rise in the value of the euro,
especially against the US dollar. Cost control
is also one of the pillars of our strategic model
and one in which we have developed a certain
expertise.
In most European countries it is more difficult
to switch rapidly to a lower cost platform than
elsewhere in the world. In the Netherlands,
major developments are taking place to combine
production as far as possible, making use
of new sustainable technologies. Among other
things, this leads to considerably lower energy
and environmental costs. It is nevertheless
a process that will take several years.
STAKEHOLDERS
In line with the prevailing stock market conditions,
particularly in the mid- and small-caps
segment, the price trend in 2007 was disappointing
overall. The major strategic developments
have not yet resulted in a positive valuation.
However, the way is open for further
growth, in view of our positioning and the
expectations for the market. Moreover, on the
basis of our strategic concept we will continue
to look for companies which supplement
and strengthen our international market,
product and technology positions.
We will endeavour to persuade shareholders
of the importance of long-term objectives for
growth and technological developments. With
a view to our future growth, the necessary
financial scope must be provided for favourable
developments within our strategic portfolio
approach.
The profit growth achieved would not have
been possible without the commitment of
many people. TenCate has attained a higher
level in terms of both revenues and market
positioning. The current market approach,
which is focused far more on solutions and
systems than on products, demands different
competences and skills from personnel and
management. It is a major challenge to manage
the growth appropriately and further
develop the right skills on an operational
level.
TenCate is a company with considerable
potential, with people who have a passion to
perform and an innate entrepreneurial spirit.
On the basis of the developments detailed
above and the acquisitions made, continuing
profit growth is expected.
L. de Vries
Chairman of the Executive Board
Royal Ten Cate Annual Report 2007 9

The TenCate share
Source: NYSE Euronext
ISIN code: NL 0000375731
Reuters code: NTCN.AS
Bloomberg code: KTC.NA
◾ KTC
◾ AEX
◾ AScX
AS AT 31 DECEMBER
Number of ordinary
shares in issue *
Par value
Highest price
Lowest price
Closing price
Net earnings per share **
2007 2006
23,591,686 21,069,546
€ 2.50 € 2.50
€ 34.05 € 24.84
€ 19.92 € 18.65
€ 21.27 € 23.21
€ 1.89 € 1.64
Dividend per share
*
Fully diluted.
€ 0.80 € 0.70
** Excluding result from divested activities and exceptional
10
income.
Royal Ten Cate Annual Report 2007
152.5
145.0
137.5
130.0
122.5
115.0
107.5
100.0
92.5
85.0
77.5
JAN FEB MA APR MAY JUN JUL AUG SEP OKT NOV DEC
INVESTOR RELATIONS OBJECTIVE
TenCate conducts an active investor relations
policy with the aim of establishing a wide
international reputation for the company in
terms of its profile, strategy and results.
Although a large proportion of TenCate shares
are held by institutional investors, we also
devote attention to private investors. We aim
to maintain regular contact with existing and
potential shareholders. There has been a further
increase in the number of foreign roadshows,
conferences and individual contacts
with investors.
Because our products have specialist applications
in niche markets, we endeavour to provide
the fullest possible information on the
underlying developments. Although there is a
wide range of applications, it is important to
highlight our organisation’s focus on technology,
knowledge and skill and to present
TenCate as an integrated, multinational company.
COMMUNICATION POLICY
We strive for a transparent communication
policy and aim to improve it constantly. That
is reflected among other things in the further
rise in the assessment of our reporting.

Geographical spread of shareholdings
in percentage
◾ The Netherlands
◾ Belgium/Luxembourg
◾ United Kingdom
◾ USA/Canada
◾ Others
2007
52%
23%
5%
12%
8%
2006
52%
20%
5%
11%
12%
TenCate has a well-diversified shareholder base.
Although the strategic markets in which
TenCate operates show differences in terms
of dynamics and market structure, there are
also important similarities. The way in which
we operate strategically within these markets
follows the same principles. In our communication
we provide detailed information on
underlying market developments and the performance
and prospects of the various market
areas.
In order to provide greater insight into the
nature of the projects in which TenCate is
represented, we endeavour to draw attention
to our activities through free publicity. We
also carry out targeted advertising and sponsorship
activities.
LISTING
The TenCate share is listed on NYSE Euronext
Amsterdam. A number of banks and securities
houses are actively involved in trading in the
share. As at 31 December 2007 there were
23,556,158 outstanding ordinary shares, each
of a par value of € 2.50. The closing price of
the share at the end of December 2007 was
€ 21.27.
SHAREHOLDERS
TenCate strives for an international spread of
institutional and other shareholders. The area
we cover with our roadshows has been further
expanded. The aim is also to achieve a
certain balance between investors with shortterm
and longer-term horizons. The private
investor is important for TenCate too (15% of
the shares is in private hands) and is informed
by means of specific activities.
TenCate has a well diversified shareholder
base. There is still a concentration of shareholders
in the United Kingdom, but a good
level of interest is also evident among US
investors.
Apart from the holdings notified through the
Netherlands Authority for the Financial Markets
(AFM), a number of institutional investors
have significant holdings (< 5%) in Ten-
Cate. These are mostly specialist small-cap
investment funds. Approximately 50 institutional
investors in TenCate shares are known
to the company.
DISCLOSURE OF MAJOR HOLDINGS
IN LISTED COMPANIES ACT
The register maintained by the AFM in connection
with the disclosure of major holdings
in listed companies contains details of the fol-
Royal Ten Cate Annual Report 2007 11

lowing investors (percentages based on AFM
returns or recent returns by the respective
shareholders):
Kempen Capital Management N.V. 11.21%
Schroders plc 9.7%
WAM Acquisitions GP, Inc. 8.7%
Aviva plc. (Delta Lloyd) 5,9%
Source: AFM, as at 26 February 2007.
OPTION PLAN, SHAREHOLDINGS
OF PERSONNEL AND EXECUTIVE
BOARD
Details of the option plan for managers and
members of the Executive Board can be found
on page 121 of this report. The shares repurchased
by the company are connected with
the coverage of granted options, which have
become fully vested.
Changes in the number of outstanding shares
Number at end of 2006
Issue of shares
Increase in share capital as a result of stock dividend
Number at end of 2007
Possible increase as a result of options
Shares repurchased for options and share savings plan
Fully diluted
12
Royal Ten Cate Annual Report 2007
The Executive Board and the employees hold
a total of 147,881 TenCate shares. The members
of the Supervisory Board hold no TenCate
shares.
Details of the company’s shares and options
held by members of the Executive Board can
be found on pages 117 and 122 of this report.
DIVIDEND POLICY
There are opportunities for TenCate in the
strategic markets. It is expected that the
growth will be continued in the years ahead.
There will also be new technological developments.
Our preference is as far as possible to
finance our growth internally and retain a
sound financial basis. Investments are expected
to remain above the level of depreciation
in the forthcoming years (see financial objectives).
21,063,292
2,106,329
386,537
23,556,158
591,402
– 555,874
23,591,686
The dividend policy is based on a payout of
approximately 40% of the profit. Shareholders
are offered a choice of cash or shares
charged to the share premium reserve.
It is proposed to set the dividend in respect of
2007 at € 0.80 per € 2.50 par value share,
payable in cash or in the form of a stock dividend.
The value of the stock dividend will be
as close as possible to the cash dividend, subject
to rounding.
Important dates in 2008
Publication of 2007
full-year figures 27 February
Annual General Meeting
of Shareholders 3 April
Ex-dividend date 7 April
Record date for dividend eligibility 9 April
Option period for cash
or stock dividend 10 to 25 April inclusive
Payment of cash dividend;
delivery of shares (stock) 2 May
First-quarter figures 2008 29 April
Half-year figures 2008 20 August
Third-quarter figures 2008 30 October

The power of innovation
SUCCESSFUL INNOVATION
Innovation is one of the four cornerstones of
our value chain management model. This
forms our strategic reference framework. Ten-
Cate has long been able to reinvent itself and
chart a new course at the appropriate time.
For successful innovation it is important to
focus on technology and applications. We
expressly opt for product/market combinations
in which functional specifications for
materials play a crucial role.
Successful innovation is a creative process. It
must also be focused on those characteristics
and requirements that play a distinguishing
role in the specific applications in which our
products will potentially be used. Over the
years, TenCate has secured distinctive positions
in strategic markets by exercising effective
control of this process. The innovation
process was recognised in 2007 with the
Erasmus Innovation Award. According to the
jury report, TenCate is characterised by a
unique form of entrepreneurship and longterm
objectives, with innovation and efficiency
being paramount. TenCate’s innovation
process was described as social innovation:
‘the development of new management skills
(dynamic management), the application of
Erasmus Innovation Award 2006/2007
TenCate was honoured with the Erasmus Innovation Award 2006/2007. The jury declared TenCate to be the most innovative and
competitive organisation in the Netherlands on the basis of its clear vision, a good balance between innovation and efficiency and
co-operation internally and with companies and knowledge institutions.
innovative organisational principles (flexible
organisation) and the implementation of highquality
work forms (smarter working and
development of talent) (source: Netherlands
Centre for Social Innovation).
EUROPEAN INNOVATION POLICY
The European Union has set itself the objective
of becoming one of the most knowledgeintensive
economies in the world by 2010, by
pursuing a targeted development policy. The
objective of a clean manufacturing industry
also makes it necessary to carry out process
innovations aimed among other things at
achieving a more sustainable production process,
lower energy consumption, a reduction in
the use of chemicals and the reduction of
waste. TenCate has already made great
strides towards this objective, including the
commissioning of an innovative water treatment
plant and the renewal of the bleaching
line at Nijverdal-Noord.
TenCate is participating in European framework
programmes, including DigiTex (textile
finishing by means of surface nanotechnology).
TenCate chairs the European technology
platform for textiles and is involved in European
programmes aimed at further developing
‘The organisation is characterised by a unique form of entrepreneurship and long-term objectives, in which innovation and effi-
ciency are central. TenCate rapidly develops innovative solutions through the use of innovatory management control.’
the use of composites in aviation, focusing
among other things on noise reduction and
fuel savings.
DEVELOPMENTS IN
THE NETHERLANDS
In the Netherlands too, and particularly in the
the Twente region where TenCate is one of
the largest employers, increasing attention is
being devoted to the need for innovation. The
Twente Innovation Platform has conducted
research into the strengths and qualities of
the region, in order to promote regional development
in the longer term. A joint approach
has been adopted, known as the ‘Twentse
Innovatieroute’. Five clusters have been
formed, one of which is Materials & High-Tech
Systems. TenCate will contribute to this as a
developer and producer of functional materials.
Two innovation projects have now been
approved. The projects will initiate developments
in the field of biopolymers and new
applications for composites.

MARKET DEVELOPMENTS
TenCate’s innovation policy is focused primarily
on providing solutions for worldwide
trends. The following trends have an important
influence on future growth for TenCate:
◾ Increase in personal security and protection
levels (armed forces, industry, emergency
assistance)
◾ Fuel savings/light materials (aviation,
automotive, shipping)
◾ Global warming and water management
◾ Environmental protection
◾ Developments in sport and recreation.
When developing new product/market combinations,
it is important to co-operate effectively
with companies which have access to
the necessary complementary knowledge.
The process will increasingly be one of open
innovation. This shortens the time to market,
something that is essential nowadays.
14
Royal Ten Cate Annual Report 2007
FOCUS ON TECHNOLOGY
For TenCate, technology is one of the main
spearheads of innovation. Co-operation with
knowledge institutions is essential. Technological
development can signify a breakthrough,
dramatically cut costs and generate
new product/market combinations.
The developments in the field of surface nanotechnology
and the versatility of our production
processes are very encouraging.
With regard to acquisitions, the focus in particular
is on technologies which deliver considerable
added value for our developments.
There are many examples, such as the knowledge
acquired in fire-retardance in safety
fabrics (TenCate Protective Fabrics) and UD
(unidirectional) technology for aerospace composites
(Phoenixx).
TenCate is devoting increasing attention to
the importance of patents and the protection
of internally generated and acquired knowledge.

Report of the Supervisory Board
ANNUAL REPORT
We hereby present the 2007 annual report as
prepared by the Executive Board, incorporating
the financial statements. The financial
statements have been audited by KPMG
Accountants NV and were discussed with the
Executive Board on 26 February 2008, in the
presence of the auditor. We are therefore of
the opinion that the annual report fulfils the
transparency requirements and forms a good
basis on which the Supervisory Board can
account for its supervision.
We propose that you accordingly approve the
financial statements, including the dividend
proposal, and grant discharge to the Executive
Board in respect of its policy and to the
Supervisory Board in respect of its supervision.
SUPERVISION
The Supervisory Board held plenary meetings
with the Executive Board and the Financial
Director on six occasions in 2007, on the basis
of a fixed schedule. It also met independently
on several occasions.
In addition, the Board held two supplementary
meetings in connection with proposed acquisitions
and their financing.
All members attended at least seven of the
eight meetings.
In a supplementary meeting in January, the
Supervisory Board discussed the proposed
acquisitions of Mattex (TenCate Thiolon
Middle East) and Roshield. The agenda also
included the intended share issue and the
new syndicated loan of € 250 million. Discussions
also took place on the quality of the
management.
In February, the Board discussed the annual
figures, the external auditors’ reports, the
dividend proposal, the granting of options to
the management and the press release to be
issued. The Board also discussed up-to-date
information on Mattex and its financing, made
preparations for the general meeting of shareholders
and discussed the appointment of
Mr J. Wegstapel as a member of the Executive
Board.
Finally, the Board met independently of the
Executive Board, to consider the composition
and performance of both the Supervisory and
Executive Boards.
At the end of March, preparations were made
for the general meeting of shareholders and
the results up to the end of February were
discussed.
At the beginning of May, the results for the
first quarter of 2007 were on the agenda and
the Board considered TenCate’s management
structure.
In August, the agenda included the results for
the second quarter, the half-year figures and
the auditors’ reports. The Board also considered
the current acquisition projects. It also
assessed the acquisition of Polyfelt in December
2005 and discussed the state of the current
legal proceedings and the intended
changes in the composition of the Supervisory
Board.
Following press reports of an investigation by
the Public Prosecutor’s Office concerning the
1995 tax return of Mr De Vries, the Chairman
of the Executive Board, the Supervisory Board
Royal Ten Cate Annual Report 2007 15

expressed its confidence in Mr De Vries in
September. The Board also published a
commentary and a chronological summary of
the relevant facts.
As stated in the press release of 13 October
2007, TenCate has also noted the fact that the
Public Prosecutor’s Office has extended its
investigation to include the financial statements
and tax return for 1995. In the opinion
of TenCate, the past annual accounts and
returns are correct.
At the end of October, the agenda included
the financial results up to the end of the third
quarter and further consideration was given
to progress with acquisitions, including those
of Composix, YLA and Edel Grass.
In two meetings in December, the agenda
included the 2008 budget, the progress of the
acquisitions of Composix, YLA, Edel Grass
and Xennia, their impact on the financing
requirements and the composition of the
Supervisory Board. Discussions took place
on the intended retirement of Messrs
A.W. Veenman and C.W. Versteeg, as well
as the intended appointment of Mr J.C.M.
Hovers.
16
Royal Ten Cate Annual Report 2007
One or two representatives of the Board took
part in five consultative meetings of the Central
Works Council, at which they obtained
detailed
affairs.
information on the company’s
INDEPENDENCE
All members of the Supervisory Board are
independent within the meaning of the bestpractice
provisions of the Corporate Governance
Code. No TenCate shares or options are
held by the members of the Supervisory
Board.
SUPERVISORY BOARD COMMITTEES
The Supervisory Board has two committees:
the Financial Committee chaired by
Mr E. Ten Cate and the combined Remuneration,
Selection and Appointments Committee
chaired by Mr F. Van Vught. Their task is to
prepare for the analysis and decision-making
in relation to subjects within their specific
areas of knowledge.
FINANCIAL COMMITTEE
The entire Financial Committee met on three
occasions in 2007. The meetings were held to
prepare for the discussion of the 2006 annual
figures and the 2007 half-year figures and, in
the third quarter, to discuss a number of
specific subjects.
In the February meeting, which was devoted
to the 2006 full-year figures, the Committee
discussed the internal financial report for
2006, the summary of current legal proceedings,
the auditors’ report by KPMG and the
2006 financial statements.
The agenda also included specific aspects
of the Mattex acquisition (TenCate Thiolon
Middle East), such as the sale and purchase
agreement, the legal structure, including the
compulsory 51% shareholding of a resident of
the United Arab Emirates, the budget for
2007, the share issue and the new syndicated
loan. TenCate’s international tax position was
also assessed.
In August, the Financial Committee discussed
the preparations for the half-year figures. It
also discussed the termination of the existing
Group Financing Company, its successor outside
the Netherlands, the establishment of a
cash pool, the current transfer pricing matters
and the launch of a cost management project
with the aim of improving and standardising
the cost prices in the operating companies.

In December, the Financial Committee discussed
a number of specific subjects, including
once again the cost management project,
the IT strategy, the regular test for possible
goodwill impairments in operating companies
and the establishment of the new financing
company in Switzerland.
REMUNERATION REPORT
No substantive changes were made to the
remuneration policy, as set out in detail in the
2005 annual report. However, at the beginning
of 2007 it was noted that due to the company’s
growth the post of the CEO of Royal
Ten Cate had risen to Hay level 30. In view of
the large difference between the medians of
Hay levels 29 and 30, it was decided in 2007
to implement an interim rise towards level 30.
The annual salary of Mr L. de Vries was
increased by 10% in 2007.
Mr J. Wegstapel joined the Executive Board
in March 2007.
The remuneration of the Executive Board is
shown in note 56.2 on page 116 of this report.
New armour concept for personal security
DSM Dyneema, in co-operation with TenCate Advanced Armour, has developed Dyneema ® HB50. This allows additional weight
saving, or alternatively a higher level of protection with the same weight for the wearer. Wearing comfort is also increased. There
is urgent demand in the market for lighter, more comfortable vests which afford a higher degree of protection. The modernisation
of army units and internal security services lies behind the growing demand in this field. With Dyneema HB50 TenCate has a
unique product with which it aims to further extend its lead over its competitors.
VARIABLE REMUNERATION
In 2007 Mr L. de Vries received the maximum
results-linked remuneration in 2006, amounting
to 50% of the annual salary, having
comfortably met the specified performance
criteria.
Almelo, 26 February 2008
Supervisory Board
A.W. Veenman, Chairman
P.P.A.I. Deiters, Vice-Chairman
F.A. van Vught
C.W. Versteeg
E. ten Cate

Corporate governance
CORPORATE GOVERNANCE
STRUCTURE
The Supervisory Board and the Executive
Board endorse the main principles of corporate
governance. The few exceptions which
apply within TenCate mostly relate to the
nature and size of the organisation. They do
not affect the basic principles of good corporate
management and integrity. Details of
the few exceptions to the best-practice provisions
can be found on the TenCate website.
The corporate governance structure is based
on the voluntary application of the two-tier
board structure. The main elements of this
are:
◾ The financial statements are adopted by
the general meeting of shareholders.
◾ Supervisory directors are appointed by
the general meeting of shareholders on
the basis of nominations by the Supervisory
Board. The profile of the members
of the Supervisory Board is first discussed
at the general meeting of shareholders at
the time of adoption and on each subsequent
modification.
18
Royal Ten Cate Annual Report 2007
◾ The general meeting of shareholders and
the works council can recommend persons
to the Supervisory Board for nomination
as supervisory directors.
◾ In the case of one-third of the members of
the Supervisory Board, the Supervisory
Board will in principle place in nomination
the name of a person recommended by
the works council (works council’s reinforced
right of recommendation).
◾ In the event of an outright majority of the
votes, the general meeting of shareholders
representing at least one-third of the
issued share capital may reject the nomination
by the Supervisory Board.
◾ The members of the Executive Board are
appointed by the general meeting of
shareholders on the basis of a binding
nomination by the Supervisory Board.
Corporate governance within TenCate is
based on the following principles:
◾ Value creation for shareholders
This means making optimum use of the
available resources. In the context of
internal financial control, financial ratios
and metrics are monitored closely. These
reflect the performance in terms of cash
flow generating assets, efficiency, mar-
◾
gins and the return on capital employed.
Consideration is also given to longer-term
continuity. TenCate takes account of efficient
use of natural resources and its
social responsibilities.
Quality of the management and appropriate
remuneration
The remuneration policy must make it
possible to attract high-quality management
which is appropriate for the specialised
and multinational character of
TenCate. The performance pay structure
must be transparent and focused on key
performance indicators. The Supervisory
Board’s Remuneration Committee is
responsible for further developing the
remuneration policy and assessing the
performance criteria for members of the
Executive Board.

Water treatment
TenCate operating companies have already been implementing major features
◾ Code of conduct for management and
employees
The company has a code of integrity, a
whistleblowers scheme and rules to prevent
abuse of inside information.
◾ Disclosure
Disclosed information must fulfil criteria
of accuracy, completeness and promptness
and comply with IFRS standards, in
order to provide stakeholders with the
most transparent and accurate information
possible on the performance and outlook.
The main risks must be stated and
evaluated.
The information on TenCate’s corporate
strategy is communicated clearly.
◾
TenCate provides full quarterly financial
reports.
TenCate maintains an open communication
policy, providing regular information
on important commercial developments.
Financial control and risk monitoring
The Supervisory Board forms a financial
committee from among its members to
supervise the financial performance,
acquisitions, divestments and general risk
policy.
TenCate has invested considerable sums in a new in-house waste water treatment plant at the Nijverdal-Noord production com-
plex. This anaerobic plant, the first in the Netherlands, entered service in June 2007 and is now fully operational. The plant will
bring about a reduction of approximately 40% in environmental costs at this site.
of socially responsible enterprise for a long period.
◾ Avoidance of conflicts of interest
TenCate is alert to conflicts of interest.
These are addressed and where necessary
avoided.
◾ Social responsibility
TenCate strives to maintain good relations
with other parties in its vicinity and
with stakeholders. The company endeavours
to limit environmental impact as far
as possible. Substantial environmental
investments are made for this purpose.
TenCate operating companies have already
been implementing major features of socially
responsible enterprise for a long period.
In order to ensure that the policy is widely
disseminated, it is increasingly publicised
internally.
Royal Ten Cate Annual Report 2007 19

The Boards
AS AT 1 JANUARY 2008
SUPERVISORY BOARD
A.W. Veenman (60) Chairman 1) 2)
Commenced in office: 1996
End of current term: 2008
CEO of Nederlandse Spoorwegen
Supervisory director of Rabobank Group
Supervisory director of TenneT Holding B.V.
P.P.A.I. Deiters (64) Vice-Chairman 1)
Commenced in office: 1998
End of current term: 2010
Former director of Berghaus International Fashion
Supervisory director of G-III Apparel Group Ltd
Supervisory director of Bandolera B.V.
Supervisory director of Tootal B.V.
Consultant to the European Bank for Reconstruction
and Development EBRD
Supervisory director of HVEG Investments B.V.
F.A. van Vught (57) 2*)
Commenced in office: 2000
End of current term: 2008
Member of the Group of Policy Advisors
of the President of the European Commission
Member of the Executive Board of the
European University Association
Acting Crown-appointed member of the Social and
Economic Council of the Netherlands
1) Member of the Financial Committee
2) Member of the combined Remuneration, Selection and
Appointments Committee
*)
Chairman
20
Royal Ten Cate Annual Report 2007
Member of the University Grants Committee
of Hong Kong
Supervisory director of Rova N.V.
Chairman of the Executive Board of Nether (Netherlands
House for Education and Research, Brussels)
Chairman of the Board of ESMU (European Centre
for Strategic Management of Universities, Brussels)
C.W. Versteeg (72)
Commenced in office: 2000
End of current term: 2008
Former General Manager of the Sheltered Employment
Service in Groningen
Supervisory director of Esso Nederland BV
Supervisory director of Koops-Furness NV
E. ten Cate (62) 1*)
Commenced in office: 2004
End of current term: 2008
Director of Bank ten Cate & Cie N.V.
Chairman of the Supervisory Board of Nyloplast N.V.
Supervisory director of Nesbic Investment Fund
Supervisory director of Pas Reform B.V.
EXECUTIVE BOARD
L. de Vries (56), Chairman
J. Wegstapel (52), member
MANAGEMENT COMMITTEE
The Management Committee comprises the
Executive Board and the following group and
corporate directors.
TenCate Advanced Textiles & Composites
F.B. Bruns (65)
TenCate Aerospace & Armour Composites
D. Hendriks (49)
TenCate Protective Fabrics (Europe/Asia)
D. Olsen (53)
TenCate Protective Fabrics (North America)
TenCate Geosynthetics & Grass
D.C. Clarke (49)
TenCate Geosynthetics
C.W.J.M. de Jong (50)
TenCate Grass
TenCate Technical Components
B.R. Denekamp (52)
TenCate Enbi
Holding
J. Lock (61)
Corporate Director Finance & Administration
R. Bijkersma (49)
Corporate Director Personnel & Organisation

L. de Vries
J. Lock
D. Hendriks
B.R. Denekamp
J. Wegstapel
D.C. Clarke
D. Olsen
R. Bijkersma
F.B. Bruns
C.W.J.M. de Jong
Royal Ten Cate Annual Report 2007 21

Report of the Executive Board
GENERAL
BUY & BUILD
TenCate made good progress with the implementation
of its by & build strategy during the
reporting year. The focus of the strategy was
in the area of aerospace & armour composites.
In addition to a major strengthening of
the market position in vehicle armour
(Roshield and Composix) and a planned capacity
expansion, TenCate strengthened its technological
position (Phoenixx). This offers
favourable prospects for future growth.
An important acquisition was also made in
the artificial grass market (TenCate Thiolon
Middle East), and major capacity expansions
took place in production. These nevertheless
led to high start-up costs, which temporarily
had a negative impact on earnings. The developments
in the artificial grass market left a
considerable mark on the past financial year.
Major shifts on both the supply and demand
sides of the market were seen within a short
period. From our leading market position, we
took the necessary strategic, operational and
technological steps at the end of 2006 and in
2007. The current production base and the
commercial joint ventures provide an excellent
foundation for future developments.
22
Royal Ten Cate nv Annual report 2007
COMMERCIAL DEVELOPMENTS
The Advanced Textiles & Composites and
Geosynthetics & Grass sectors showed a
mixed picture. On the one hand there were
favourable commercial and financial developments
in protective fabrics and composites
(antiballistics and aircraft industry). On the
other hand, less good results were recorded
in the market groups in geosynthetics and
artificial grass. The above-mentioned start-up
costs in artificial grass production in the
Netherlands and the sluggish US infrastructure
and construction market, coupled with a
sharp rise in raw material costs, put earnings
under pressure. Outside the United States,
which is the main sales area, developments in
the field of geosynthetics were substantially
more positive. The acquisition of Mattex
(TenCate Thiolon Middle East) in Dubai, a producer
of artificial grass fibres, performed in
line with expectations and made an excellent
contribution.
In the markets in which TenCate Enbi operates,
the trend towards the relocation of production
to low-wage countries continued in
2007. The importance of the Asian market is
therefore increasing. Good progress was
made with the diversification policy in Europe
Anti-evaporation fabric
The growing shortage of water for consumption and irrigation in dry areas leads to disappointing harvests and lower water quality.
An intensive search is going on to find new ways of saving water. TenCate Nicolon Anti Vapour Cover is an anti-evaporation fabric
which is positioned above water basins. The fabric (with additional UV stabiliser) is provided as a system, including any necessary
technical advice. It is a light and strong structure which allows rainwater to pass through and provides a great deal of shade.
Patents were obtained for the main countries in Southern Europe in 2006.
and the United States. Sales growth was also
recorded in new markets for high-quality rubber
and foam products.
TenCate operates in worldwide growth markets.
The prospects for these remain favourable.
Nevertheless, attention must be devoted
to the effects of the weaker dollar, which has
impaired the competitive position of European
companies in the world market. In some
areas, TenCate can compensate for currency
trends as a result of having production facilities
and purchasing sources outside Europe.
Our leading market positions are not only
focused on size and market share, but are also
based on our technological skills, knowledge,
patents and firm position in the value chain.
We are successfully strengthening this position
every year by focusing on costs, product
differentiation, marketing to end-users and
innovation.

Analysis of 2007 results by sector
in millions of euros
2007 2006 Difference Organic
Of which Acquisition/
currency divestment
Net sales
Advanced Textiles & Composites 350.3 279.7 + 25% + 26% – 6% + 5%
Geosynthetics & Grass 468.3 397.5 + 18% + 8% – 5% + 15%
Technical Components / Holding & Services 67.4 93.3 – 28% – – 3% – 25%
886.0 770.5 + 15% + 14% – 5% + 6%
Operating result before amortisation (EBITA)
Advanced Textiles & Composites 40.2 21.3 + 88% + 86% – 12% + 14%
Geosynthetics & Grass 30.4 25.6 + 19% – 22% – 6% + 47%
Technical Components / Holding & Services 2.4 4.2 – – – –
73.0 51.1 + 43% + 29% – 9% + 23%
Amortisation – 3.6 – 1.0
Operating result (EBIT) 69.4 50.1 + 39%
Finance charges – 11.3 – 8.0 + 41%
Pre-tax result 58.1 42.1 + 38%
Profit tax – 11.9 – 11.4 + 4%
Result from participating interests – 3.4
Result from ordinary operations 46.2 34.1 + 35%
Result from divested activities 0.3 42.0
Result after tax 46.5 76.1 – 39%
EBITA margins 2007 2006
Advanced Textiles & Composites 11.5% 7.6%
Geosynthetics & Grass 6.5% 6.4%
8.2% 6.6%
Royal Ten Cate Annual Report 2007 23

FINANCIAL PERFORMANCE
RESULT AFTER TAX
The net profit in 2007 amounted to € 46.4 million.
That includes a book profit of € 0.3 million
on the divestment of operating companies.
On a major real-estate transaction, a
pretax profit of € 4.1 million was recorded, or
€ 3.1 million after tax. If these exceptional
profits are excluded, the net result rose from
€ 34.0 million to € 43.0 million, a rise of
26.5%.
As a result of the acquisitions made during
the reporting year, the amortisation of intangible
fixed assets increased from € 1.0 million
to € 3.6 million. With the acquisitions planned
in 2008, this item will rise further.
COMPOSITION OF THE GROUP
In line with the strategic focus, the following
companies were acquired or divested in 2007:
◾ Roshield A/S in Denmark on 15 February
2007, a Danish company in the field of
vehicle armour, with revenues of € 16 million.
This company, now renamed TenCate
Advanced Armour Denmark, was integrated
into the European division of the
Aerospace & Armour group in 2007.
◾ TenCate Thiolon Middle East LLC on
29 March 2007, a Dubai-based producer
of mainly monofilament artificial grass
with annual revenues of approximately
€ 60 million. TenCate Thiolon Middle East
provides a high-quality product at low
cost and represents a major strengthening
of the TenCate Grass group.
◾ Phoenixx TPC on 27 July 2007, a company
based in Taunton (Massachusetts, USA),
which owns a valuable unidirectional
technology for thermoplastics, which will
be further developed in the Aerospace &
Armour group, particularly for aerospace
applications.
◾ Business Key in Barcelona was divested.
This small trading company was formerly
part of the Mega Valves group, which was
divested in 2005.
REVENUES
Revenues rose 15% in 2007, including 14% on
an organic basis.
The Advanced Textiles & Composites sector
grew fastest, by 25%, including 26% on an
organic basis. The main contribution to growth
came from the United States, where demand
for fire-resistant materials for military uni-
Acquisition of artificial grass activities of Mattex Leisure (TenCate Thiolon Middle East)
The acquisition of the artificial grass activities of Mattex Leisure Industries in Dubai was completed at the end of March. Now
renamed TenCate Thiolon Middle East, the company produces mainly monofilament artificial grass yarns. TenCate can now serve
the global market from three production sites with a broad and distinctive product portfolio and respond even more efficiently to
the strong increase in demand for artificial grass fibres.
forms once again increased strongly. The protection
of military personnel and their vehicles
against fire and attacks will also remain
a prominent theme in the years ahead, not
only in the United States but also in other
parts of the world.
The Geosynthetics & Grass sector also
achieved revenue growth (+18%), the bulk of
which resulted from the acquisition of
TenCate Thiolon Middle East in Dubai (+15%).
The sector’s organic growth amounted to 8%,
with a negative currency effect of 5%. While
TenCate Thiolon encountered production
problems in the Netherlands and the United
States, TenCate Thiolon Middle East provided
an important complement to the TenCate
product offering.
The revenues of the Technical Components /
Holding & Services sector decreased by 28%
as a result of the divestment of TenCate Plasticum
(in April 2006) and Business Key (in
April 2007). This sector continues to include
TenCate Enbi, a number of services and the
holding company, with stable revenues on an
organic basis.

OPERATING RESULT BEFORE AMORTISATION
(EBITA)
The operating result before amortisation
(EBITA) rose 43% in 2007, from € 51.1 million
to € 73.0 million. On an organic basis, the rise
was 29%.
The Advanced Textiles & Composites sector
achieved EBITA growth of 88%, including 86%
on an organic basis. Both American and Dutch
fire-resistant fabrics contributed to this
improvement.
The Geosynthetics & Grass sector recorded
19% EBITA growth, but disappointed with an
organic 22% decrease in the operating result
after amortisation. The grass businesses in
the Netherlands and the United States introduced
new production lines, which experienced
technical problems in the peak months
of 2007. These have now been largely solved.
The Geosynthetics group experienced difficulties
in the United States due to the stagnation
of the US housing market as well as high raw
material prices, which could not be passed on
until the second half of 2007. The European,
Asian and Australian geosynthetics activities
performed well.
The Technical Components / Holding & Services
sector showed a decrease in EBITA, in
addition to the above-mentioned divestments.
This was mainly due to the sale of Plasticum
in 2006.
RAW MATERIAL COSTS
Raw material costs represented 52% of revenues,
as in 2006. Raw material prices rose.
This rise, which mainly occurred in the second
half, could only be passed on after a time lag.
As a result, the vast majority of the selling
price adjustments will not have an effect until
2008. Raw materials for fire-resistant and
bullet-proof materials were in short supply
again in 2007.
PERSONNEL COSTS
Personnel costs accounted for 20% of revenues
in 2007, a decrease of two percentage
points compared to 2006 (22%). This decrease
was the result of the acquisition of TenCate
Thiolon Middle East in Dubai, where personnel
costs are 20-25% of those in Western
Europe.
The costs in Asia, where part of TenCate’s
growth is generated, are on average at the
same level as in the Middle East.
TAXES
The tax rate fell further from 27.2% to 20.5%.
Of this decrease, 3.5 percentage points is
attributable to TenCate Thiolon Middle East.
The company also benefited from a non-recurring
tax gain relating to previous years and
from the use of tax losses available for setoff
in France.
WORKING CAPITAL
The working capital increased by 20% in
2007:
Working capital at
€ 179.2 million
end of 2006
(82 days)
Acquisitions/
divestments + 6.9
Organic growth in 2007 + 34.7
Exchange differences – 10.5
Total € 210.3 million
(84 days)
The increase was partly due to the high sales
and production in the fourth quarter.
The level will decrease again at the beginning
of 2008.
Royal Ten Cate Annual Report 2007 25

INVESTMENTS
In 2007, € 62.9 million was invested, compared
to depreciation and amortisation of
€ 32.7 million.
Some of the major projects were:
◾ the construction of a geosynthetics
plant in Zhuhai (China)
◾ monofilament grass lines in Nijverdal
(overrun from 2006)
◾ monofilament grass lines in Dayton (US)
(overrun from 2006)
◾ machines and infrastructure TenCate
Advanced Composites
The above projects will facilitate the expected
growth in the years ahead.
Cash flows and financing
The acquisitions, investments and growth of
the working capital led to an increased capital
requirement of almost € 200 million in
2007.
Over € 50 million of this was covered by a
(sub-10%) share issue in February and the
renewed syndicated loan of € 250 million in
March 2007.
In connection with the four intended acquisi-
26
Royal Ten Cate Annual Report 2007
tions at the end of 2007, the € 250 million
syndicated loan was increased to € 400 million
in February 2008. Further information can
be found in ‘post balance sheet events’ on
page 40.
Despite the increase in long-term bank debt
TenCate remained comfortably within the
covenants agreed with the banks in 2007.
The ratio of net interest bearing debt to
EBITDA at the end of 2007 was 2.18.
Shareholders’ equity at the end of 2007
amounted to € 310 million, with solvency of
43.0%.
Cash flows 2007 2006
Net profit * 43.0 34.0
Depreciation/amortisation 32.7 23.1
75.7 57.1
Increase in working capital of existing activities – 35.2 – 4.0
Investments – 62.9 – 43.0
Other items – 1.6 – 3.9
Cash flow before acquisitions and divestments – 24.0 + 6.2
Acquisitions – 182.9 – 1.3
Divestments + 7.8 + 64.0
Funding
– 199.1 + 68.9
Share issue (net) + 50.6 –
Repurchase of shares, cash dividend, issue of repurchased shares – 7.9 – 12.7
Increase (+) / decrease (–) in debt et al. + 156.4 – 56.2
+ 199.1 – 68.9
*
Excluding result from divested activities and exceptional income.

Successful embankment trial for geosynthetics
TenCate Geosynthetics North America carried off the IFAI Award of Excellence 2007 for its contribution to the extension of one of
the runways at Yeager Airport in West Virginia. The construction of a 73-metre-high embankment proved the most effective, sus-
tainable and ethically responsible solution. The company supplied various qualities of geosynthetics and professional technical
support. The result: an extended runway which meets all the safety requirements with an embankment that is now largely covered
with vegetation.
In market segments such as safety fabrics, antiballistics, geotextiles and
artificial grass, TenCate has a technological lead, in many cases with associated
SWOT ANALYSIS
As part of the strategic planning, SWOT analyses
are carried out at operating company
level. Within this process, strengths and
weaknesses are compared with opportunities
and threats. Strategic actions are then identified.
The annual report contains only a schematic
account of the main points of the SWOT
analysis. For competition reasons, strategic
actions by operating companies or market
groups are only stated if they have been
published previously (see pages 28 and 29).
RISK MANAGEMENT
There are risks associated with the business
strategy. External economic factors, unpredictability
of market developments, calamities
and human factors can impede the achievement
of business objectives. TenCate strives
to control the achievement of strategic and
operational objectives as fully as possible. To
that end, TenCate has access to appropriate
risk management and control measures. As a
result of these:
◾ the main risks are identified in time and
remain limited to an acceptable level;
◾ there is a reasonable degree of certainty
that the financial reporting contains no
material misstatements;
◾ the applicable regulations and legislation
are complied with.
The market areas in which TenCate operates
– protective fabrics, aerospace, antiballistics,
geotextiles, artificial grass and technical components
– entail specific strategic and commercial
risks. In most cases, TenCate pursues
these activities on four continents, each with
its own dynamics. TenCate is therefore not
part of a monoculture. Consequently, none of
the risks detailed below will have a dominant
influence.
A number of specific significant risks applying
to TenCate have been identified. The summary
of the main specific risk areas below is not
exhaustive. It is possible that risks which
have not currently been identified or which
are not seen as material will subsequently
have a significant negative effect on
TenCate’s ability to achieve its business
objectives. The risk management and control
measures are aimed at timely identification of
these risks.
market leadership.
MARKET RISKS
Market
The market risks differ depending on the market
segment. In some segments, such as base
fabrics for professional wear, there is intensive
competition and high price elasticity.
In addition, production of less distinctive
products is gradually shifting to Asia.
In other market segments, such as safety fabrics,
antiballistics, geotextiles and artificial
grass, TenCate has a technological lead, in
many cases with associated market leadership.
This provides no guarantee for the
future. Products which reach the end of their
life cycle must be 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 longterm
development programmes, such as the
aerospace market. Developments in these
markets are reasonably stable, being protect-
Royal Ten Cate Annual Report 2007 27

TENCATE’S STRENGTHS
◾ Knowledge-intensive and flexible company,
focused on the development of new
materials which meet functional requirements
in the market.
◾ Short time to market due to good control
of the innovation process.
◾ Broad technological basis in the field of
textile technology and related chemical
processes.
◾ Innovative and distinctive in the value
chain.
◾ Leading positions in market niches worldwide.
◾ As a result of scale benefits, substantial
investments are possible for future developments,
such as environmental investments
and digital finishing (DigiTex).
◾ Synergy effects within and between business
sectors.
◾ Positive corporate image and strategic
focus based on value chain management.
◾ Guaranteed market positions through
(industrial) certifications, patents and
licences.
◾ Production sites on three continents.
28
Royal Ten Cate Annual Report 2007
Points for improvement
◾ Even greater market focus, with the provision
of solutions occupying a central
position.
◾ Better spread of knowledge within
◾
TenCate, by devoting a great deal of
attention to training and internal management
development programmes.
Further strengthening of the Asian organisation,
based on both the logistics
processes and the market potential of this
region.
◾ Strengthening of the market position in
emerging Eastern European countries in
order to benefit from the growth in the
region.
◾ Further reduction of the cost base and
increase in efficiency at sites in Europe.
OPPORTUNITIES
◾ Tighter regulations on safety and protection,
such as the modernisation programmes
in the defence market (safety,
protection, wearing comfort and new
functionalities) and appropriate water
management worldwide.
◾ Advanced materials and smart textiles
are growth markets, with European subsidy
programmes.
◾ Product differentiation of the new sales
in existing or new markets.
◾ Hyperfragmentation, particularly in European
markets with divergent standards,
offers possibilities for functional materials
with different specifications.
◾ Emerging markets which will introduce
standards following the example of developed
markets.
◾ Increasing concern for safety and durability
of artificial grass sports pitches.
TenCate, together with its commercial
partners, takes responsibility for guaranteeing
quality by means of a system
approach based on performance characteristics.
Chain integration is beneficial
for quality guarantees to end-users.

THREATS/RISKS
◾ Dependence on the purchasing side, temporary
shortages of certain raw materials.
◾ Rising raw-material costs cannot always
be passed on directly, and cannot always
be hedged.
◾ Seepage of knowledge; a technologyoriented
company such as TenCate is
vulnerable and must therefore guard its
knowledge domain to the maximum
extent possible.
◾ Greater visibility of the TenCate brand
also means higher business-critical risk.
CHALLENGES FOR TENCATE
◾ Strengthening knowledge protection and
the patent position
Growth of the knowledge domain and
strengthening of knowledge protection
form the basis for the company’s future.
The acquisitions made in 2007 have considerably
strengthened and expanded the
knowledge position. This can benefit
existing product/market combinations,
but can also open up new markets.
People that make a difference
Pleasure at work is important, otherwise it’s just a job!
◾ System approach
Greater internal coherence within
◾
TenCate and increased scale through
organic growth and acquisitions strengthen
the position in the purchasing market.
Conceptual commercial approach
The increasing concern for the safety and
durability of artificial grass sports pitches
must be translated into clear system concepts.
TenCate must develop these concepts
further, largely with partners in the
artificial grass chain. This conceptual
approach is one of the foundations of
future profit growth.
◾ Further strengthening of the position in
Asia and emerging European countries
Intensification of commercial activities in
markets which are growing strongly but
in which TenCate still generates a relatively
small proportion of sales (Asia,
Central Europe). The expansion of Geosynthetics
production in China must form
the basis for the further growth of local
sales in the Asian market.
◾ Reduced dependence on oil products
TenCate will promote activities which
reduce the dependence on oil-related raw
materials. The use of more natural raw
materials is also a positive development
with a view to sustainability.
◾ Links with other industrial sectors to
develop new applications for materials
Co-operation will increasingly take place
with other business sectors in order to
generate solutions. The acquisition of
Xennia is illustrative in this regard. As a
result of TenCate’s innovative character
and greater visibility in the market, the
company is considered to be a good partner.
The plans for open innovation centres
should be seen in this context.
Royal Ten Cate Annual Report 2007 29

ed by qualification processes. A precondition
is that TenCate adheres to the quality guidelines
specified by the customers.
Although in various markets there is a dependency
on very large customers, at the consolidated
level no single customer accounts for
more than 4% (2006: 3%) of revenues, while
the five largest customers jointly represented
no more than 13% of revenues in 2007 (2006:
9%).
Macroeconomics
Macroeconomic developments have an influence
on the level of demand for TenCate’s
products. An important factor is government
expenditure in the major countries. The
demand for protective fabrics and antiballistics
is controlled by public sector bodies, in
particular defence forces and fire brigades.
Demand for geotextiles and artificial grass
products is driven by public sector investments
in infrastructure and sports facilities.
Factors which determine government policy in
the above markets are security policy and
economic growth. Strong commercial networks
and the associated information provision
make it possible to anticipate government
plans promptly and efficiently.
30
Royal Ten Cate Annual Report 2007
Raw materials
A limited number of raw materials determine
a large part of the materials consumed by the
TenCate companies. This concerns in particular
cotton, aramid fibres and various gradations
of polyethylene and polypropylene.
Prices in the commodity market may fluctuate
widely. The price of plastics is determined
partly by the oil price, but in particular by
shortages or surpluses in the market.
Price rises can be passed on to the customer
with a time lag of three to six months. The
same applies to price reductions. In some situations
an automatic price adjustment clause
is included in customer contracts.
In the case of super-strength or fire-resistant
armour fibres, regular shortages occur or a
strong dependence develops on a single supplier.
In such situations suitable agreements
have been entered into with the supplier.
TenCate operating companies will increasingly
take part jointly in negotiations with major
suppliers, in order to achieve optimum conditions
in terms of price, quality and delivery
reliability.
Vikings in the Netherlands
The vehicle fleet of the Netherlands Marine Corps has been expanded with the addition of 74 brand-new Viking vehicles.
The armouring of the vehicles includes spall liners from TenCate. The BVs-10, a fully amphibious vehicle, is ideal for use in
theatres such as Iraq and Afghanistan. The Vikings are intended for crisis management operations.
FINANCIAL RISKS
Currencies
Approximately 42% of TenCate’s revenues are
denominated in euros. The main currency risk
incurred by Ten Cate is in respect of the US
dollar (43% of sales) and a number of more or
less dollar-related currencies such as the
Hong Kong, Singapore and Australian dollar,
the Chinese renminbi and the dirham (Dubai).
With regard to currencies, we draw a distinction
between competition, transaction and
translation risk.
The competition risk concerns the changing
competitive position vis-à-vis competitors in
areas with a different currency. This risk is
hedged over the subsequent six months by
means of options. Thereafter a permanent
answer must be found to the new situation.
Transactions in foreign currencies are immediately
hedged by means of futures or options.
These are mainly transactions by European
operating companies denominated in US dollars
and British pounds.
Since foreign operating companies, particularly
those using US dollars and related currencies,
make an important profit contribution
to the Group results, these transaction risks
The vehicles were supplied by the Swedish company BAE Systems Hägglunds. The Marine Corps forms part of the UK/NL Landing
force together with the United Kingdom. The British Army also has Vikings, making co-operation easier.

TenCate’s environmental policy is based on limiting the environmental impact
as far as possible. Measures have been taken to avoid environmental risks.
are hedged. The expected profit contribution
is hedged at the beginning of the financial
year. For 2008, put options have been purchased
at a level of €/$=1.50.
Interest
The company’s financing is fairly centralised.
The risk of interest rate rises is in principle
hedged 90% for the following year and 75%
and 50% for the subsequent years, taking into
account the expected interest rate trends.
The preference is to use caps for this purpose.
Pension provisions
TenCate has placed the pension provision for
Dutch employees with Stichting Pensioenfonds
Koninklijke TenCate. This average salary
scheme is designated as ‘defined benefit’ in
accordance with IFRS reporting rules. A sharp
fall in prices on international securities
exchanges may lead to a decrease in the value
of the pension fund’s investments. The result
of this and of interest rate developments may
be that the provision for pension liabilities on
the Royal Ten Cate balance sheet increases
under the new IFRS guidelines. The pension
fund has taken measures itself within its
investment policy, partly as a result of the
Financial Assessment Framework (including
interest rate risk management), involving a
reduction in the risk profile.
The company has concluded an implementation
contract with Stichting Pensioenfonds
Koninklijke TenCate, under which the financial
contribution remains limited to an average
contribution. This moves within an agreed
range depending on the financial situation of
the fund.
In the other countries there are defined contribution
schemes in the vast majority of
cases.
ORGANISATIONAL AND LEGAL RISKS
TenCate is involved in various legal proceedings
resulting from normal business operations.
In the proceedings between United
Fabrics and TenCate, which began in 2000
and have been reported on previously, The
Supreme Court issued a judgment on 7 April
2006. Part of the claim, based on a commercial
alliance, was dismissed. With regard to
the remainder of the claim, relating to a management
alliance, the other party has been
instructed to demonstrate the damage suffered.
A bank guarantee of € 1.8 million has
been provided.
Environment
TenCate’s environmental policy is based on
limiting any impact on the environment as far
as possible. Regular checks are carried out
both by the holding company and by the managements
of operating companies and measures
are taken to avoid environmental risks.
Textile finishing in particular may involve the
use of chemicals which must be covered by
guarantees. The waste water from textile finishing
in the Netherlands is treated by provincial
water treatment plants. In Nijverdal-
Noord a new in-house water treatment plant
entered service in June 2007.
TenCate considers that the environmental
risks have been limited as fully as possible.
Environmental coordinators have been
appointed at local level who are familiar with
the specific situation and implement local legislation
and regulations accordingly.
Product development
Product development is the lifeline for the
years ahead. It must be 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 forfeits a significant
part of its competitive advantage.
Royal Ten Cate Annual Report 2007 31

The product development process has been
structured in accordance with strict procedures
and criteria.
Production and product liability
TenCate has various small- to medium-scale
production processes, for example involving
fewer than 100 employees. Where there is a
relatively low degree of production automation
there is a higher risk of human error. Incidents
in production can never be ruled out.
These may lead to a loss of quality in the endproducts,
claims from customers or even a
temporary halt in the production process.
However, TenCate carries out preventive
inspections of its products and almost all
plants are ISO-certified. Control of production
processes and quality management are important
priorities in order to avoid product claims.
In 2007 work took place to standardise and
tighten up the standard sales conditions.
32
Royal Ten Cate Annual Report 2007
Management and personnel
TenCate’s organisation strategy is based on a
decentralized model. The group directors and
operating company managements determine
the company policy to a large extent independently
and take entrepreneurial decisions.
Not having the right man or woman in the
right place can result in an operating company
rapidly losing its lead or even falling behind
its competitors. For this reason the selection
criteria for new management personnel have
been tightened up, with an assessment forming
part of the key management recruitment
procedure.
Another risk is dependence on key officers,
often with an R&D or market background. It is
necessary to ensure that this expertise is
retained and shared across the organisation.
This is achieved by guaranteeing knowledge.
CONTINUITY OF INFORMATION PROVISION
Each operating company has its own systems
for control and transaction processing in the
main operating processes. Systems for communication
and generic workplace automation
are implemented to a large extent centrally.
Disruptions to these systems can impede
operating processes. The risks are limited as
far as possible by means of information security
and fallback procedures. The operation of
these facilities is tested periodically.
Risk management and control system
The overall risk management and control
measures are based on a number of key elements.
MANAGEMENT ENVIRONMENT
The company strives for a culture of openness,
integrity, professionalism, enthusiasm,
efficiency and respect. Core values are entrepreneurship,
innovation and a focus on
results.
Every employee is made aware of these cultural
elements and the obligation to comply
with all applicable legislation and regulations.
The Integrity Code and the Confidential
Adviser Scheme set out the general rules of
conduct with which employees must comply.

ORGANISATION
TenCate’s organisational structure is based
on providing support for a co-operation structure
in which each person’s responsibilities
are clearly defined and performances are
measurable.
This is reflected in a group structure in which
groups and operating companies bear responsibility
for results. The group managements
determine the group strategy, promote consistency
and synergy and are responsible for
exploiting the market positions in the value
chain.
Central management support departments
with functional responsibilities contribute to
the coordination.
The above objectives are facilitated by a
number of procedures, including the TenCate
Accounting Manual.
Managements of group companies and operating
companies are controlled on the basis of
a formalised planning and control cycle.
INFORMATION PROVISION, COMMUNICA-
TION AND PROCESS MONITORING
Systems for internal information provision
and communication are primarily aimed at giving
employees and managers appropriate
information for their own areas of responsibil-
A good grounding for American football
American football demands a lot from the players and the pitch. The level is high, particularly in the United States, and the sport is
played very widely. Artificial grass from TenCate Thiolon provides safety, comfort and a consistent playing surface. The correct
combination of fibres and infill minimises the risk of skin damage in sliding tackles. Artificial grass pitches can be used and played
on intensively. An artificial grass pitch for American football is designed on a completely customised basis – right down to the club
logo on the pitch. After all, fibres can be produced in any colour.
ity. A whistleblowers scheme and a complaints
scheme enable employees to inform
the company management about undesirable
situations.
It is important to maintain direct contact
between the Executive Board, group managements
and operating company directors.
Direct discussion takes place regularly,
depending on the matter at hand. More formally,
extensive monthly reporting takes
place and the performance, results, outlook
and certain facets of risk management are
discussed once each quarter. Risk management
also forms part of the consultation with
the Financial Committee of the Supervisory
Board.
MANAGEMENT ACTIVITIES
Risk management is a responsibility of the
management at all levels.
All managers and controllers sign a twiceyearly
letter of representation on the financial
reporting/internal control.
All financial regulations are included in the
TenCate Accounting Manual. With effect from
2007, the managements and controllers of the
operating companies include a declaration in
all their reports to the effect that the results
have been compiled in accordance with this
manual.
Each year the external auditors assess the
structure and operation of the administrative
organisation and internal control, to the
extent relevant to the auditing of the financial
statements. They report on this to the management,
the Executive Board and the Supervisory
Board.
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 between insurance cover, premium
levels and own risk is reassessed each year.
Regular inspections and follow-up increase
the continuity of the business processes,
reduce production outages and lead to lower
risk costs. Damage prevention and preventive
investments improve the risk profile.
Royal Ten Cate nv Annual report 2007 33

EVALUATION OF RISK MANAGEMENT
AND CONTROL SYSTEMS
The Executive Board is of the opinion that:
◾ the risk management and control systems
provide a reasonable degree of certainty
that the financial reporting is free of
material misstatements;
◾ the risk management and control systems
have operated correctly in the reporting
year;
◾ there are no indications that the risk management
and control systems will not
operate correctly during the current year.
However well designed our internal risk management
and control systems are, they can
never provide absolute certainty that objectives
in the field of strategy, operation,
reporting and compliance with laws and rules
will always be achieved. In taking decisions
we are aware that:
◾ human errors of judgement may arise;
◾ cost/benefit assessments are always
made when accepting risks and taking
control measures;
◾ human failings and even simple errors or
mistakes can have major consequences;
◾ conspiracies by officials can lead to circumvention
of internal control measures;
◾ the management of parts of the company
can permanently or temporarily negate
agreements made with the Executive
Board.
This statement should not be interpreted as
being a statement in accordance with the
requirements of section 404 of the Sarbanes
Oxley Act in the United States, which does
not apply to Royal Ten Cate.
INFORMATION TECHNOLOGY
IT strategy and policy
Good progress has been made with the continuing
standardisation of the generic applications,
such as e-mail, internet and intranet.
The responsibility and management of these
applications will increasingly be placed with
the holding company. The wide variety of
websites has been reduced to a common website
in which each business manages its own
content. This fulfils the objective of corporate
branding. E-mail addresses have also been
standardised to tencate.com.
The ERP implementation of JOMAR at
TenCate Thiolon North USA has been implemented
on schedule and on budget. The
implementation of JOMAR at TenCate Protective
Fabrics USA is also progressing well. This
New suits for Göteborg fire brigade
The Göteborg fire brigade has chosen TenCate Millenia Light® as the outer material for 550 new firefighter suits. Factors such as
comfort and durability were decisive. Millenia Light is a comfortable outer material which provides optimum protection. It is
extremely durable. Millenia Light is the lightest material with such high wearing comfort and heat resistance. Millenia Light is a
good example of the commercial synergy between the TenCate companies in the Netherlands and the United States. A number of
fire brigades have now chosen Millenia Light.
implementation is expected to be completed
on schedule at the end of 2008.
TenCate Advanced Armour in France and
TenCate Thiolon Middle East are now connected
to the TenCate network in the Netherlands.
Action plans in 2008
In 2008 the Group companies worldwide will
be connected to Global Active Directory. The
IT organisation for corporate applications will
be strengthened. The standardisation of ERP
systems in each group will be continued. In
addition, the ERP systems at TenCate Geosynthetics
in the Netherlands and TenCate
Armour Composites in France and Denmark
will be updated.
PERSONNEL & ORGANISATION
PERSONNEL & ORGANISATION POLICY
The P&O policy is implemented on a decentralized
basis. The P&O group management
support department initiates in particular global
programmes in areas such as talent and
management development, organisational
issues and compensation & benefits. In order
to support our corporate objectives, P&O provides
a limited number of systems and instru-

‘Talent is a spring from which clear fresh water constantly flows; and this spring
ments based on uniformity and transparency.
Leadership is central. The P&O instruments
must support these.
Year-end
Year-end
Number of employees
(in staff years)
2007 2006
Netherlands 975 962
Rest of Europe 582 619
United States 1,527 1,527
Asia/Australia 641 424
Middle East 295 –
Total 4,020 3,532
During the reporting year, TenCate expanded
its worldwide presence with the acquisition
of Mattex Leisure Industries (Dubai), Roshield
(Denmark) and Phoenixx (USA) as well as the
construction of a production facility in Zhuhai
(China). As a result, TenCate’s international
character has been strengthened and international
value chains can be controlled more
effectively. Social and ethical considerations
as well as economic factors are key criteria
when creating jobs in geographic areas that
are ‘new’ to TenCate.
becomes less valuable if it is not used properly.’
ORGANISATIONAL DEVELOPMENT
TenCate’s innovative strength is underpinned
to a large extent by the decentralized structure
of the organisation. Responsibilities are
placed as low as possible in the organisation.
Entrepreneurship is central at all levels in the
operating companies. Efficient, central management
by the holding company strengthens
the core values of the corporate culture: innovative
capability, entrepreneurship, a focus on
results, trust and co-operation. An appropriate
degree of autonomy in the various operating
companies and the active search for
mutual and external co-operation form part of
the company’s culture.
TALENT AND MANAGEMENT DEVELOPMENT
For an enterprising and growing organisation
such as TenCate, the prompt identification
and development of in-house talent to provide
tomorrow’s management remains an important
key to success. Talent is about more than
having sufficient competences. Passion is
also a very important motive.
MANAGEMENT DEVELOPMENT
TenCate recognises the importance of investing
in knowledge and skills of the current and
potential management. The core values of
entrepreneurship, leadership, innovative
capability, a focus on results and co-operation
are being systematically strengthened in a
four-layer management development (MD)
programme. The purpose of this international
TenCate programme is to ensure appropriate
succession, development of current and
potential management and the attraction of
the right talents around the world.
An important benchmark for the further rollout
of the International (MD) programme was
the first year of the TenCate Active programme.
This programme is aimed at promoting
innovative capability, entrepreneurship
and situational leadership. The programme
has been developed in co-operation with TSM
Business School, which uses an international
network of universities, business schools and
teachers. It provides an important basis for
our organisation’s innovative capability.
Royal Ten Cate Annual Report 2007 35

The first group of talented employees completed
this TenCate Active programme in the
Netherlands during the reporting year. The
participants are given guidance to provide
them with a better understanding of the strategy
formation process and its tactical and
operational implementation and enable them
to adjust this process as necessary. In the
active learning part, the participants completed
a strategic assignment in three multidisciplinary
teams. The presented projects, which
must be completed as a fully fledged business
plan, were particularly successful. Various
aspects of these business plans will be followed
up in practice.
In addition to the acquired knowledge, skill,
expertise and attitude, an important added
value of this programme is the mutual cooperation
between the managers in the various
strategic product groups and disciplines.
The TenCate Active programme will be implemented
throughout Europe and in the United
States in 2008.
The international MD programme will be
expanded this year with the inclusion of an
executive programme, a talent scouting programme
and a trainee programme. In these
programmes too, the emphasis will be on
entrepreneurship, leadership and a focus on
results. Continuous scouting, assessment (of
potential), evaluation and development of talent
form the core of each programme. The
various programmes will be aligned organically
and will introduce important horizontal
and vertical co-operation between the various
operating companies and disciplines. The
local management plays an important role in
the development of these programmes, so
that local needs are met as fully as possible.
The programme fits in with the existing systems
in the field of development and succession
planning, as part of the P&O policy memorandum
2006-2010.
EMPLOYMENT CONDITIONS
TenCate aims to offer its employees a comprehensive,
modern and market-oriented
package of benefits including options where
possible. TenCate believes it is important that
employees should also have a competitive
package of employment conditions in the
future.
The globally developed remuneration policy
for the international senior and upper management,
based on the Hay system, was further
refined and rolled out to the acquired
TenCate People Program
TenCate invests in the knowledge and skills of current and potential managers. Entrepreneur-
ship, leadership, innovative capability, a focus on results and co-operation are core values.
These are reinforced in a four-layer management development (MD) programme. The aim of
the international TenCate People Program is to ensure appropriate succession, management
development and the attraction of the right talents worldwide.
businesses during the reporting year. In addition,
a detailed benchmark was introduced for
the various benefits provided in TenCate companies.
SAFETY
Our employees on all continents are professional
people who have a sense of enterprise
focused on results and solutions and are prepared
to take on challenges. They strive for
success in their own group and in the interests
of TenCate as a worldwide company. To
that end they are given an opportunity to
develop and flourish individually and professionally
within a national and international
working environment. We offer them a safe
working environment and attractive and challenging
duties and responsibilities, with room
for initiative and creativity.
SOCIALLY RESPONSIBLE
ENTERPRISE
Investing in sustainable enterprise occupies
an important place in TenCate. In day-to-day
practice, the operating companies give high
priority to more sustainable production. Quality
assurance and process management are
aimed at allowing production to take place as
effectively and efficiently as possible. Most

TenCate operating companies have certification
systems which guarantee quality
(ISO 9001) or sustainability (ISO 14001). If certification
has yet to be obtained, work is carried
out to further embed the systems in the
organisation.
TenCate further developed its central policy
principles for socially responsible enterprise
during the reporting year. The necessary
improvements were made and various investments
were carried out in order to fulfil and
implement the previously defined key objectives.
These related to areas such as chainoriented
environmental protection, recycling
and reuse, quality assurance, safety and protection,
professionalism and integrity of
employees and social commitment.
These principles are being made increasingly
measurable and transparent in the company.
The ultimate aim is to enable both the company,
its immediate environment and its stakeholders
to benefit from this socially responsible
approach.
CHAIN-ORIENTED ENVIRONMENTAL
PROTECTION
Sustainability and ethics have for many years
played an important role in the working processes
of all operating companies. TenCate
strives for production processes which limit
environmental impacts to a minimum. TenCate
is conscious of its position in the chain.
TenCate also uses its influence with suppliers
to achieve sustainable enterprise objectives
in the value chain. This chain-oriented
approach makes it possible to achieve objectives
which also have an influence outside the
company itself. Internally, TenCate encourages
consideration of sustainable enterprise by
presenting best practices in its personnel
media. In this way operating companies are
encouraged to devise projects of their own.
The environmental protection systems are
aimed at limiting the use of raw materials, the
consumption of water and energy and emissions.
Efforts are made jointly with raw material
suppliers and customers to further reduce
environmental effects. Examples are replacing
chemical additives with environmentally
friendlier alternatives, improvements in the
production process, reduced energy and water
consumption, the reuse of hot process water
and the mapping of energy and waste
streams. TenCate uses only chemicals and
paints which are included in the textile environmental
database. Most chemicals and artificial
fibres are purchased by TenCate from
large multinationals, most of which operate a
policy focused on sustainability.
The TenCate operating companies devote a
great deal of attention to the management of
waste streams. In addition to the consistent
separation of waste materials, a mass balance
sheet is maintained at various productions
sites. This serves as preparation for the
limitation of waste flows in the entire production
process.
A number of Dutch operating companies were
able to make further reductions in water and
energy consumption at industry level during
the past reporting year. The related agreements
had previously been set out in a covenant.
The aim is to achieve an energy saving
of 10% in ten years. Every three years an
energy saving plan is drawn up and implemented.
In this way any savings can be
weighed against the necessary investments.
Energy savings along the entire chain are central
in this covenant.
Royal Ten Cate Annual Report 2007 37

RECYCLING AND REUSE
Specific materials such as glass and bulbs,
board and paper, iron and steel, as well as
wood, are separated as far as possible. These
are recycled elsewhere. Any hazardous waste
is collected separately and removed by recognised
processing companies.
Residual and scrap materials are recycled.
Certain parts of the production waste are
used by third parties as a base material for
use in new products. For example, the production
waste from yarns and fabrics from
TenCate Advanced Composites are ground
into a pulp which can be reused in various
applications as a strengthening material.
The residual waste from yarns and fibres at
TenCate Thiolon and TenCate Thiobac is converted
by means of recycling into usable raw
materials for other purposes, such as packaging
materials and various injection moulding
products made by third parties.
TenCate Thiolon and TenCate Advanced Textiles
jointly carried out a waste prevention
investigation during the reporting year. The
findings will be used to further refine the
existing environmental control system.
TenCate Grass and TenCate Protective Fabrics
in Nijverdal had already combined the hot and
cold water resulting from their respective
processes. The advantages of this discovery
were once again seen in lower energy costs
and an absence of discharge levies during the
reporting year. This represents a double
saving for the environment.
QUALITY ASSURANCE
Most TenCate operating companies are qualified
in accordance with ISO 9001 standards.
In view of the demands made on TenCate
products, quality plays a key role.
Various customers also apply additional quality
standards, which must be met. That is the
case for example of materials for aerospace
applications.
SAFETY AND PROTECTION
TenCate gives the utmost priority to a safe
working environment worldwide. The negligible
percentage of industrial accidents underlines
this ambition. Safety is about protective
equipment and awareness. Safe machines
must be used safely. Training and information
are targeted means of keeping employees
mindful of possible risks. The operational
Artificial grass in the Forbidden City
Artificial grass made by TenCate has lain in the Forbidden City since October 2005. In 2007, new artificial grass matting was
installed in the former Imperial Palace in Beijing, bearing the new TenCate logo.
The Forbidden City (Gu Gong) in the centre of Beijing is the home of the National Flag Guard. The Guard forms an important part of
the Chinese army. Its duties include the protection of Tian An Men square, which lies to the south of it. Every year the ground here
is walked on by several million visitors.
management is required to remind colleagues
on the shopfloor of the operational arrangements
for personal protection. Quality, Health
& Safety and Environment officers have been
appointed within the operating companies.
They monitor the performance in these areas
in the operating companies.
PROFESSIONALISM AND INTEGRITY
Professionalism underpins TenCate’s qualitybased
approach and operation. Professionalism
comes fully to fruition every day in its
operating companies. But integrity is also an
important subject within the multinational.
TenCate’s integrity code once again served as
the basis for all actions by the operating companies
at home and abroad during the year.
TenCate enters into various relationships with
its stakeholders as a supplier, developer, partner
and producer. Trust forms the basis of
every relationship. One of TenCate’s core values
is reliability. The integrity code involves
everyone who is employed in TenCate or one
of 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.

COMMITTED AND ACTIVE
TenCate’s commitment to the communities in
which the company operates is and will
remain strong. In all countries in which
TenCate’s operating companies are established,
the regional bonds are based on dedication,
loyalty and pride. Personnel associations
regularly organise a range of activities
for their members. Employees in the Netherlands
and abroad take part in cultural, social
and sporting activities, either in teams or individually.
TenCate Thiolon is a partner of the Johan
Cruyff Foundation, which provides sports
facilities for less advantaged children in the
Netherlands. TenCate Thiolon is a founding
partner of Cruyff Courts. This organisation
lays artificial grass pitches for young people
in urban areas. TenCate Thiolon works with
paid football organisations and local authority
neighbourhood organisations with a view to
further increasing the acceptance and spread
of artificial grass pitches.
TenCate Advanced Composites once again
provided sponsorship in kind for the Delft student
team, which won the World Solar Challenge
in Australia for the fourth time in suc-
cession with its Nuna4 solar-powered car.
The victory was due in part to the car’s light
weight and very strong composite materials
from TenCate. In addition, the Delft DUT racing
team ended in a prominent position in the
Formula Student ranking for composite racing
cars. TenCate also provided sponsorship in
kind for these students. The best road-holding,
the lightest possible construction and the
highest achievable speed were central for the
team. The team’s design also scored highly in
the design prize associated with the competition.
As a result of their participation, the
Delft automotive students became more
familiar with the innovative applications
offered by TenCate materials. Over the forthcoming
reporting year a number of students
from both teams will deploy their knowledge
and experience in order to make a success of
Professor Wubbo Ockels’s ‘Superbus’.
TenCate is supplying the composite material
which will be used in the construction of the
Superbus.
CO-OPERATION AND PARTICIPATION
Various operating companies within TenCate
have entered into co-operation agreements
with universities and colleges. They provide
materials for research and development by
students. Intern places are also made available
for graduates of these educational institutions.
Students carry out case studies and
feasibility studies in TenCate operating companies
in order to test new materials or trial
existing materials for new applications.
TenCate receives many requests for sponsorship
and donations. Although the company
operates a restrictive sponsorship policy, support
was provided for appropriate sporting
and cultural activities during the reporting
year. An essential feature is a connection
with TenCate materials and products. For the
parties concerned, sponsorship in kind is
often the most practical contribution to their
efforts. The sponsorship and donation policy
will be reviewed in the forthcoming reporting
year and will be streamlined where necessary.
TRANSPARENCY
The principles of socially responsible enterprise
will be further developed in the company
on the basis of the ‘people’, ‘planet’ and ‘profit’
elements. The refinement of the underlying
principles will make the central control more
transparent and measurable, both in qualitative
and quantitative terms. With effect from
Royal Ten Cate Annual Report 2007 39

the forthcoming reporting year, these subjects
will also be highlighted more effectively in
the company’s reporting and promotional output.
POST BALANCE SHEET EVENTS
1. YLA INC
On 22 January, TenCate announced that
agreement had been reached on the acquisition
of YLA Inc of Benicia, California, USA.
YLA is a producer of advanced thermoset
composites. The company supplies materials
for the construction of satellites, solar panels,
communications, space launch vehicles,
defence and energy production.
This acquisition gives TenCate a market share
of over 50% in the use of thermoset composites
in the American space industry.
YLA and its subsidiary CCS Composites generated
2007 revenues of $ 23 million and are
profitable. The acquisition price was $ 32 million
free of debt. The acquisition still has to
be approved by the US authorities.
2. XENNIA TECHNOLOGY LTD
On 29 January, TenCate announced that an
agreement had been signed to acquire 75% of
the issued share capital of Xennia Technology
Ltd of Cambridge, Great Britain.
Xennia develops inks and coating fluids as
well as the related control software. The
company holds a large number of patents in
this field. TenCate has been working closely
with Xennia on the DigiTex-project, a development
for digital textile finishing, with grants
from the European Union. The project is now
reaching the phase of development of commercial
applications for textile finishing.
Xennia generated revenues of GBP 7 million in
2007 and was profitable.
3. COMPOSIX CO.
On 31 January, TenCate announced that – following
the press release of 11 December 2007
– the acquisition of Composix Co (Newark,
Ohio, USA) had been completed.
Composix is the US market leader in the protection
of military vehicles, vessels and aircraft
by means of composites. The customers
of Composix are vehicle manufacturers and
other suppliers to the US Army.
Composix generated revenues in excess of
$ 100 million in 2007 and is highly profitable.
The acquisition price is $ 68 million free of
debt, with the possibility of an earn-out of
$ 10 million if a particular profit target is
achieved in 2008 and 2009.
Innovation prize for warning system
TenCate Geosynthetics Asia received the Joint Research Innovation Award 2006 for the development of the Slope Failure Early
Warning System. This system provides an early warning of subsidence in slopes. The system is based on TenCate GeoDetect ® .
The geotextile is equipped with optical sensors and draws attention at an early stage to the type of deformations – down to hun-
dredths of a percent – which precede subsidence. TenCate Geosynthetics Asia developed the Slope Failure Early Warning System
in co-operation with a local university.
Following the acquisition of Roshield (Denmark)
in February 2007, the current acquisition
of Composix represents a major strengthening
of TenCate’s market leadership in the
field of vehicle protection.
4. EDEL GRASS
On 12 December 2007, Oranjewoud and
TenCate jointly announced that they had
signed a letter of intent concerning the
intended acquisition of Edel Grass (Genemuiden).
This acquisition is expected to be completed
in the first quarter of 2008, after which
Oranjewoud and TenCate will each hold
a 50% share.
Edel Grass is a leading supplier of artificial
grass systems, particularly for hockey,
tennis and football in the European and African
markets. Edel Grass generated 2007 revenues
of approximately € 30 million and was
profitable. The combination of knowhow and
the complementary nature of the partners
leads to the creation of a high-quality player
with a wide knowledge of the artificial grass
market.

5. INCREASE IN SYNDICATED LOAN
The above acquisitions require total resources
of approximately € 90 million. Partly for this
reason it is intended to increase the existing
syndicated loan of € 250 million by € 150 million
to € 400 million.
On 26 February 2008, the date of this annual
report, the commitments from the participating
banks were more than sufficient to conclude
the increase successfully. The planned
signing date of the new agreement is 27 February
2008.
OUTLOOK
TenCate has completed a process of strong
strategic development, as a result of which
its position in the respective value chains has
been further reinforced. The technological
base has also been strengthened by means of
technologies developed in-house and others
acquired externally, including in the field of
digital finishing technology (DigiTex). Technology
positions provide the foundation for
TenCate’s future growth.
On the basis of worldwide trends in safety
and protection, army modernisation programmes,
aerospace (light structures), water
management and the environment, we are
expecting to play a major role in these trends
as an innovative materials supplier. Sport and
recreation are growth markets par excellence.
Continuing growth is expected in the artificial
grass market.
The strong position in the United States in the
field of fire-resistant materials for military
equipment will be further expanded geographically.
There is now specific interest in
these materials in Europe. The new Berry
Amendment exemption (exemption for imports
into the United States) is beneficial for our
leading position in the American market.
The acquisition of Composix completed at the
end of January 2008 gives TenCate a good
starting position in the growing American
market for vehicle armour.
In view of the measures taken in Geosynthetics
& Grass, an organic margin improvement
is expected in this sector. The new site in
China for the production of geosynthetics will
enter service in the first half of 2008.
The recently announced acquisitions of Edel
Grass, YLA / CCS and Xennia are expected to
be completed shortly. In order to finance the
acquisitions, the existing syndicated loan
facility will be increased in the short term.
TenCate expects to achieve further profit
growth in 2008. The economic trends in the
United States, which may also affect the rest
of the global economy, and the trend in a US
dollar exchange rate are sources of uncertainty.
TenCate expects no major negative consequences
from any decrease in consumer
spending.
Royal Ten Cate Annual Report 2007 41

Optimum protection for the Police and Marechaussee
42
Royal Ten Cate Annual Report 2007
Tara Glover, Business Development Director
TenCate Protective Fabrics USA
‘By co-operating within TenCate Protective Fabrics and sharing each
other’s knowledge, we can leverage scale, synergy and strength in
the market. With every opportunity that arises, we can see the added
value made possible by this worldwide teamwork.’
The new multithreat security vest for the Police
and Marechaussee is based on a unique concept.
The vest protects the wearer against fi rearms
bullets, knives and needles. It is also the
thinnest, most fl exible and most comfortable
solution for this level of threat.
Twenty-seven police forces in the Netherlands are being issued with a new security vest. It
is bullet-, needle- and fragment-proof (multithreat) and at the same time suffi ciently thin and
fl exible – qualities that are important but diffi cult to combine. The vest was developed by
TenCate Advanced Composites in co-operation with the German company BSSt, the producer
and supplier of protective and security equipment. After extensive tests, this consortium’s
vest proved best at meeting the required specifi cation in terms of security, service

Advanced Textiles & Composites
Raymond Veldhuis,
Quality Assurance Manager
‘All the parties involved have made a positive contribution
to this special project. It’s a good demonstration of
professional skill and co-operation.’
‘TenCate not only plays an active part in developing projects
and fi nding solutions, but is also involved in the product itself.
That gives us a good feeling. After all, we’re working with
materials that save human lives.’
Who contributed what? TenCate Advanced
Composites specialises among other things in
developing and producing composite materials
for armour (personal and vehicle protection)
and aerospace. The Group increasingly
presents itself as a developer and supplier of
customer-specifi c protection solutions.
BSSt specialises in the production of security
vests based on a unique individual measurement
system. BSSt and TenCate Advanced
Composites have co-operated on projects regularly
over the last ten years. ‘We have a very
high regard for TenCate’s co-operation and
position,’ said Achim Baumann.
and wearing comfort. The specifi cation was drawn up in consultation with the police trade
unions.
The vest will also be used by the Marechaussee, the Authority for Judicial Institutions and
the Dutch National Police Services Agency. A total of around 30,000 vests are being supplied.
TenCate Advanced Composites is now working on materials which can be used to
produce even lighter and cheaper equipment.
Achim Baumann, Director of BSSt
Royal Ten Cate Annual Report 2007 43

Advanced Textiles & Composites
KEY FIGURES
Advanced Textiles & Composites 2007 2006 2005 2004 2003
in millions of euros, unless stated otherwise
Revenues
Operating result before amortisation
350.3 279.7 285.6 229.9 169.9
(EBITA) 40.2 21.3 16.8 11.2 8.6
EBITA margin (%) 11.5 7.6 5.9 4.9 5.1
Operating result (EBIT) 38.7 20.9 16.5 11.1 8.6
Investments 17.0 11.7 13.2 4.0 6.0
Depreciation and amortisation 10.8 6.1 6.2 5.6 4.1
Net capital employed 197.6 124.9 124.2 113.6 78.1
Staff years at year-end 1,238 1,203 1,171 1,204 813
Return on net assets (%) 21.8 17.1 13.5 10.5 11.6
ACTIVITIES
The Advanced Textiles & Composites sector
consists of the following market groups:
◾ TenCate Protective & Outdoor Fabrics
High-grade protective and safety fabrics for
the defence and professional wear market,
and for the high-grade segment of the outdoor
market.
44
Royal Ten Cate Annual Report 2007
◾ TenCate Aerospace & Armour Composites
Composites intended in particular for the aerospace
industry and special industrial applications
and for armour, including plate materials
with bullet-, needle- and fragment-proof
characteristics.
SALES AND RESULTS
During the reporting year the revenues of this
sector amounted to € 350 million (2006: € 280
million). This growth was primarily due to a
strong increase in sales of safety fabrics. A
large proportion of the growth was accounted
for by US defence orders, in which TenCate is
proving highly successful with new fireresistant
products. Sales of aerospace composites
came under pressure due to delays at
Airbus in the launch of the A380.
On an organic basis, revenues rose by 26%.
EBITA showed strong growth to € 40.2 million
(2006: € 21.3 million). On an organic basis,
EBITA was 86% higher.
TenCate has set a target of 10% for its operating
EBITA margin. During the reporting year
the margin amounted to 11.5% (2006: 7.6%),
as a result of which the group target was
comfortably achieved.

INVESTMENTS
Investments once again exceeded the level of
depreciation in 2007. The total investments in
this sector (€ 17.0 million) showed a rise compared
to the previous year (2006: € 11.7 million).
The investments are focused particularly
on future growth, mainly in composites, higher
efficiency and environmental aspects,
anticipating continuous rises in energy prices
and large-scale customisation. Production in
the Netherlands will be streamlined and
further modernised in order to reduce costs
further.
A major investment programme, which is
expected to be completed in the first quarter
of 2008, relates to the further expansion of
production capacity for the second generation
of TenCate Cetex ® . These high-pressuredeformable,
fibre-reinforced composites
(thermoplastics) have been developed for the
construction of, among other things, the latest
generation of aircraft. A new production
hall has now entered service in Nijverdal.
A third press has been operational at the site
since October 2007.
TenCate Defender M
Following the example of the US Army, the US Marine Corps has decided to purchase TenCate Defender M. TenCate develops
and produces protective fabrics such as Defender M specifically to meet the strict requirements of government specifications. The
costs of Defender M are considerably lower than those of traditional flame-resistant fabrics which have been approved for military
applications. At the same time it offers the wearer excellent protection and comfort, is very durable and withstands the tough
conditions in the field.
Considerable sums have also been invested in
a new in-house waste water treatment plant
at the Nijverdal-Noord production complex.
This anaerobic plant, the first in the Netherlands,
entered service in June 2007 and is
now fully operational. The plant will bring
about a sharp reduction in environmental
costs at this site.
Another important investment activity during
the reporting year relates to the production
line for flame-retardant material. It is an
investment both in a further increase in quality
and in greater production efficiency. It also
anticipates the growing market demand for
flame-retardant fabrics.
The plans for the gradual concentration of
production processes at the Nijverdal-Noord
production site were further developed during
the reporting year. The positive effects of this
were already evident in 2007. In 2008, this
process will be continued and further investments
will be made. The innovative production
processes (including digital finishing
under the DigiTex name), which are focused
on product development and sustainable process
development, were continued in 2007 and
have led to interesting results. Although this
process is still in the laboratory phase, the
trial production of new products is expected
to be able to start in 2008. This is seen as one
of the most innovative developments in the
last few decades. As a result of these developments,
the acquisition of a majority interest
in Xennia (UK) was announced at the beginning
of 2008. Xennia is an industrial partner
in the DigiTex project.
PROTECTIVE & OUTDOOR FABRICS
MARKET POSITION AND STRATEGY
TenCate is the market leader in protective
fabrics in the United States (particularly the
firefighting and defence markets) and in
Europe (mainly the industrial market) and is a
worldwide leader in high-quality concepts for
personal protection in the professional wear
market, including:
◾ firefighting and defence markets
◾ industrial market and
◾ health sector.
TenCate has specialised in the production of
safety fabrics. These are marketed under
TenCate brand names. Although TenCate’s
direct customers are mostly producers and
distributors of industrial clothing, the specifications
are determined to a large extent by

the end-users. The tightening of safety
requirements in work situations has led to
greater demand for high-quality protection.
Personal protection is based on European and
North American standards, which have been
drawn up for various industries. TenCate has
developed tailor-made products for these
markets. An important competitive advantage,
in addition to successful product development
and our broad technological base, is
efficient production, particularly for volume
products. The long-term, innovative projects
and investments are intended to reduce the
cost base significantly.
TenCate conducts a policy focused on value
chain management, in which the market position
has been considerably strengthened in
the past few years. End-user marketing and
product differentiation based on an integrated
commercial and technological platform have
proved successful. The marketing of fabrics
for specific risk areas provides a targeted
response to various safety requirements and
risks in a range of working situations. As a
result of TenCate’s scale and increasing integration,
new and existing products and technologies
are being increasingly exchanged
between the various geographic markets.
Examples of this are the introduction of
TenCate TecaSafe Plus in the United States
and TenCate Millenia in Europe. Synergy is
achieved by means of relatively lower development
costs, purchasing advantages and a
wide product portfolio. On the basis of
TenCate’s existing infrastructure, market
share is now being built up in regions including
Eastern Europe, Asia and South America.
GENERAL PERFORMANCE IN 2007
In line with the strategy, strong growth was
once again achieved in 2007 in the European
and particularly the North American market
for protective fabrics for protective clothing
and professional wear, particularly in the
defence market (United States). TenCate once
again gained significant market share through
specialization and the direct approach to endusers.
The proportion of revenues accounted for by
high-grade and fire-resistant safety fabrics is
increasing further, partly as a result of the
growing awareness of safety. TenCate works
constantly on innovation and improvement in
the wearing comfort of high-grade safety fabrics
(humidity regulation, air permeability,
weight). On the basis of new products and its
Better protection against heat and fire
technological capacities, TenCate is highly
successful with new safety fabrics. In particular,
there is growing demand for such materials
in the American market, especially for
American defence forces. Large orders were
received for the Defender M and Gen2 during
the reporting year. As a result, there was
exceptional growth in TenCate’s market position
in the United States in 2007.
In Europe too, TenCate has further developed
the market for safety fabrics on the basis of
the innovative technological knowhow available
in the Group. The first orders were completed
for high-grade fire-resistant fabrics
(Millenia Light ® ) for the European firefighting
market during the reporting year. In these
products, various functional layers are combined
to produce a safety concept. This is an
example of our system approach, aimed at
providing a solution and based on a set of
functional characteristics.
The extensive specialization in fire-resistant
protection in North America offers further
good opportunities in Europe and will further
improve TenCate’s position in the firefighting
market. There is also growing demand for
fire-resistant protection in military applica-
TenCate Protective Fabrics develops and produces fabrics which give protection against all kinds of dangers. One of those dangers
is heat and fire. The demand for flame-resistant fabrics is growing fast and will continue to grow in the next five years. One of the
reasons is that tighter regulations for protective clothing are being imposed in a growing number of countries. TenCate’s success in
this market is due in part to the fact that TenCate materials combine optimum protection with a high degree of comfort.

In protective fabrics TenCate is the market leader in the United States and Europe
and occupies a leading worldwide position in high-quality concepts for personal
tions outside the United States, and growth is
also being achieved in the industrial market in
Europe.
TenCate is the only company in its market
with a global approach. That gives it the necessary
critical mass. It is therefore able to
take full advantage of the knowledge and
experience in the various geographic markets.
There is high market potential, but it will only
be possible to meet demand fully once the
production capacity of the raw material suppliers
has been increased further.
The start-up of the new continuous wide
bleaching machine (CBB) for textile finishing
at the Nijverdal-Noord site in mid-2006 was
an important step forward. This is an example
of successful process innovation. After the
start-up phase, this innovation had a positive
effect on quality, capacity, costs and delivery
reliability during the reporting year. The CBB
is unique in the textile industry and optimises
the production process. This machine is
also of importance for the DigiTex project,
because it achieves a considerably higher
level of quality.
The market for outdoor fabrics has shown
hardly any growth for a number of years. With
its high-grade functional materials, TenCate
mainly targets the camping and external awnings
market. In 2007 the strategy was refined,
with a further streamlining of production
activities in order to remain closely aligned
with market developments. In addition to
quality, TenCate focuses mainly on environmental
and health aspects and fire safety.
OUTLOOK
The market for protective fabrics for protective
clothing and professional wear continues
to offer very good prospects. TenCate has an
excellent position, with large ongoing orders.
TenCate operates end-user marketing to tailor
its product range more closely to specific risk
groups. New and existing products and technologies
are increasingly being exchanged
among the various geographic markets.
As a market leader in the high-grade segment
of the outdoor fabrics market, TenCate anticipates
market trends and customer-specific
requirements with lightweight, flame-resistant
fabric, contemporary designs and maintenance-friendly
fabric. Since we use no harmful
or toxic products in the production process,
protection in the professional wear market.
TenCate positions itself as a ‘green’ alternative
to mainly Asian products.
AEROSPACE & ARMOUR
COMPOSITES
MARKET POSITION AND STRATEGY
TenCate is one of the world’s leading companies
in the field of composites for aviation and
armour. This market position as a material
supplier was considerably strengthened during
the reporting year, partly through the strategic
acquisition of the Danish company
Roshield (vehicle armour and personal protection)
and the composites company Phoenixx
TPC in the United States. In addition, the
acquisition of Composix in the United States
(vehicle armour), which was announced at the
end of 2007, was completed at the beginning
of 2008.
TenCate focuses mainly on applications of
composites with high functionality, in which
weight saving and low production and process
costs for users of these materials in the
value chain are important distinguishing characteristics.
TenCate operates in markets with
high barriers to entry. The competitive position
in the markets of importance for TenCate
is determined above all by the qualification
Royal Ten Cate Annual Report 2007 47

asis and references. These provide assurance
that TenCate will continue to play a role
in the supply of specified materials in specific
programmes. TenCate is innovative, flexible
and prepared to co-operate as a development
partner over the long term.
TenCate Aerospace Composites
TenCate occupies a leading position in the
field of continuously fibre-reinforced hightemperature
deformable composites (thermoplastics).
These composites, under the name
of TenCate Cetex ® , were developed for the
construction of the latest generation of aircraft,
but also have other applications. The
acquisition of Phoenixx TPC is an excellent fit
with this market position. The Phoenixx unidirectional
(UD) technology strengthens the
position of TenCate’s thermoplastic Cetex ®
production line worldwide. It provides major
support for the further growth of TenCate’s
aerospace activities in this industry. In addition,
Phoenixx has developed composites for
applications in oil and gas extraction. As a
result, there is increasing growth potential for
this technology.
48
Royal Ten Cate Annual Report 2007
Apart from the weight saving, thermoplastics
provide cost benefits when they are processed
to manufacture the structural components
of an aircraft. The use of composite
materials is growing strongly in the aviation
industry. This has been prompted by the
desire to build aircraft more economically and
to limit fuel consumption and noise emissions.
As a result of the innovative developments at
Airbus (A380), the use of composites is accelerating
rapidly. TenCate is a supplier to Airbus,
Boeing, Embraer and Cirrus, among others.
The use of composites will increase
further, for both the new Airbus A350 and the
new Boeing 787, which comes to the market
in 2008. Approximately half of the primary
structure of the Boeing 787 will consist of
composites. TenCate occupies a good strategic
position in this market, since the increase
in Cetex ® applications exceeds the growth of
overall composite use.
TenCate Armour Composites
TenCate is active worldwide in this market.
As a result of the acquisition of Roshield,
TenCate has secured a leading position in the
European market for personal and vehicle protection.
In the Asian and American markets,
TenCate has a strong position as a supplier of
high-grade composites for the armour industry.
TenCate’s activities in the field of personal
(fire-resistant) protection provide a supplement
to the defence market.
Roshield is a strong design partner for vehicle
producers in antiballistic protection. Projects
in the field of vehicle protection involve customised
production and must be tailored to
specific threat levels. Antiballistic protection
is used widely in military personnel transport,
particularly by countries involved in peacekeeping
missions. Roshield has large, longterm
orders, including for the armouring of
existing army trucks (add-on armour) and antiballistic
protection for different types of
ships, including patrol boats. The acquisition
of Composix gives TenCate a position in the
US market comparable to that in the European
market. Substantial programmes have been
announced for the US market, and Composix
will potentially enable TenCate to play a
greater role.

TenCate is focusing increasingly on safety
concepts based on a multi-risk approach. In
the armour market there has been a worldwide
increase in the use of armour for increasingly
serious threat levels. The choice of composites
has been prompted by weight saving
and functional characteristics. By combining
materials, it is possible to develop safety concepts
for different threat levels. The market is
characterised by large projects and tenders,
and bids can often be submitted jointly with
other parties as a consortium. TenCate is
highly specialised and internationally well
established in this market and works closely
with a number of major suppliers. There is
also good co-operation with leading vehicle
producers (road transport, shipbuilding and
aviation).
GENERAL PERFORMANCE IN 2007
Aerospace & Armour Composites revenues
grew in 2007 mainly due to the acquisition of
Roshield. The European activities fell short of
expectations, mainly due to the delays at Airbus
and in the delivery of armour orders and
lower sales of personal protection.
Protecting ships against enemy fire
In September 2006, TenCate Advanced Armour Denmark won an international tender for the development, design, production and
installation of an antiballistic system for two new flexible support ships and three frigates for the Danish Navy. They are based on
ceramic armour plates and a unique assembly system. The armouring of the first ship has now been completed. The fifth and final
ship will be equipped with protection in a few years.
The delivery delays which occurred during the
year were not completely eliminated. The
deliveries to Airbus for the A380 were back
on track towards the end of the reporting
year.
In the market for aerospace composites,
TenCate was successful in winning new qualifications
(Boeing, Airbus). Qualifications are
an important precondition for operation in
these markets, which are characterised by
high demands in areas such as security, and
process control.
Sales in the US grew strongly, but growth is
being reduced somewhat by the sharp fall in
the value of the dollar (currency translation
effect).
The armour market is a project-based market,
with revenue levels fluctuating annually.
Overall there was growth. TenCate already
has a substantial portfolio of future orders.
The proportion of revenues accounted for by
armour composites in the vehicle market grew
relatively strongly during the reporting year,
partly as a result of the acquisitions.
Aerospace
In this sector the delays at Airbus (A380)
affected TenCate to some extent during the
reporting year, particularly with regard to
activities in the Netherlands. This was offset
by activities in the United States and by new
applications and product development in the
field of Cetex ® . Good growth was achieved
here both with new and existing customers.
Cetex ® System 3, a triple-component system
is being successfully applied in increasing
numbers of interior parts.
This represents a major entry into the maintenance
market, where materials are used in
existing aircraft.
The favourable trend in demand for TenCate
Cetex ® System 3 continued in 2007. It is a
lightweight and cost-effective system solution
for interior parts of aircraft and other
high-grade applications. The growth was due,
among other things, to the outstanding
mechanical characteristics of the composite
material, such as lower production costs,
higher fire safety and lower flue gas emissions.
The material is also used in floor parts
and aircraft seats.

The Brazilian company Embraer qualified Ten-
Cate Cetex ® in 2006 for its new Phenom 100
and 300 business jets. The Cetex share is nevertheless
still small. This aircraft will be operational
at the end of 2008. Orders have been
received for hundreds of aircraft. Embraer is
also continuing to develop new parts based
on Cetex ® , which will result in further growth
in this customer relationship.
TenCate is also involved in the development
of the A350-XWB. For this type of aircraft,
which will be operational in 2013, Airbus will
make large-scale use of lightweight composite
materials.
In addition to thermoplastics, TenCate has
composites with other technical characteristics
(thermosets). These are used particularly
in military aviation and for smaller private aircraft.
There is great demand for these particularly
in the military and business markets.
Thermosets are also used in the space, radar
and telecommunications markets.
Armour
Bullet- and fragment-proof materials, integrated
into safety concepts, account for the
bulk of revenues in this sector. The rise in rev-
50
Royal Ten Cate Annual Report 2007
enues was mainly due to Roshield and organic
growth in the United States. The strategic
focus on vehicle protection in our buy & build
policy resulted in a further rise in revenues in
this market segment and led to a considerable
strengthening of the market position.
A substantial order was received from the
United Kingdom in the third quarter, relating
to an urgent operational requirement for delivery
in the fourth quarter. The delivery was
almost fully completed but ran over into the
first quarter of 2008. This order also represents
a strong reference for TenCate in this
market, which is important for possible follow-up
orders.
A number of attractive contracts were also
concluded for the armouring of naval vessels
and vessel components. Delivery for these
European naval programmes began in 2007
and will also run into the current financial
year.
There is growing demand for multi-threat protection:
simultaneous protection against
threats from bullets, knives and needles. This
activity is another example of the desired system
approach. These segments are gaining in
importance. TenCate has a good European
order book, including orders from the Dutch
National Police Services Agency (KLPD). Some
uncertainty with regard to the time of delivery
of (project-related) orders is inherent in this
market. Consequently, periodic sales fluctuations
occur. TenCate reduces this uncertainty
by operating worldwide, but fluctuations cannot
be avoided.
In 2007, TenCate recorded growing sales of
multi-threat systems for personal protection,
which are being further developed. TenCate
Pro-Tector ® offers particular advantages in
terms of weight, flexibility, humidity resistance
and ease of incorporation in vests. The
company participated in various worldwide
programmes. DSM Dyneema ® has developed
a new armour concept in exclusive cooperation
with TenCate, which affords lighter protection
against various types of munitions and
consequently provides greater wearing comfort.
TenCate is also supplying the spall liners (protection
against metal splinters following shell
impact) for a new infantry combat vehicle for
the Dutch army. The order is for 184 vehicles,
which are replacing the YPR armoured vehicle

As a result of the acquisition of Roshield, TenCate has secured a leading position
from 2007. TenCate is now also co-operating
on a similar Danish vehicle project.
The acquisition of Composix, a leading company
in the fast-growing American armour
market, was announced at the end of 2007
and completed at the beginning of 2008. Composix
produces advanced armouring solutions
(fibre-reinforced composites and ceramics) for
the protection of vehicles, aircraft, vessels
and military personnel. The company has an
excellent reputation as a developer of revolutionary
concepts and as a technology partner.
Partly as a result of this, Composix has
become a major partner of the US government
and related producers.
The acquisition of Composix is an important
step in the implementation of the strategy of
achieving further growth in the world’s largest
armour market.
in the European market for personal and vehicle protection.
OUTLOOK
Aerospace
The outlook for TenCate in this segment is
excellent. TenCate has established a technological
position that enables us to present
ourselves as a development partner. Various
innovative development programmes are currently
under way, some of which are subsidised.
Sales for the A380 are set to increase considerably
in 2008. TenCate occupies an excellent
position with the Cetex ® material, which is
increasingly being used in various segments
of the aircraft industry. The outlook for this
composite material, particularly in combination
with the market position of Phoenixx, is
therefore extremely favourable. TenCate has
an excellent basis within the A350 XWB
project.
TenCate is also one of the few Dutch suppliers
to the aircraft industry that are qualified
for the AS/EN 9100 certificate. TenCate will
consequently play a growing role in the United
States. The company has also completed a
number of new US qualifications, which will
make a growing contribution to the aerospace
segment in this market.
Armour
Attractive new qualifications have been completed
for 2008 with a number of important
market players in the armour market. TenCate
has built up a strong position in the past few
years. Jointly with Roshield and Composix,
TenCate will be able to build up a large market
share in the field of vehicle protection in
both Europe and the United States. There are
major synergies among the various TenCate
companies, which operate in the market as a
group.
As a result of the further modernisation of
various defence units, there will be strong
organic growth at TenCate in 2008. This
applies in particular to high-value programmes
for vehicle protection in both the United
States and Europe, but also in the field of personal
protection.
Royal Ten Cate Annual Report 2007 51

Supply of artificial grass components for Olympic hockey
52
Royal Ten Cate Annual Report 2007
Esther Brummelhuis,
‘In addition to players’ safety, key factors for us in new
developments are the specifi c characteristics of
hockey, such as ball roll, the control and speed
of the ball and avoiding injuries.’
Communication & PR Manager,
TenCate Thiolon
TenCate is supplying artifi cial grass for four
pitches on which the hockey matches will be
played during the Olympic Games in Beijing.
Due to a special design concept, these pitches
have improved shock absorption. What is more,
TenCate’s LSR ® technology makes them safer
for players if they come into contact with the
artifi cial grass matting.
Sports Technology International, the Australian partner of TenCate Thiolon, has won the
contract to supply the artifi cial grass pitches on which the Olympic hockey matches will be
played in Beijing. A special concept has been developed for the Olympic hockey pitches in
close co-operation with the strategic partners. This offers on the one hand better physical
protection as a result of improved shock absorption and on the other hand a greater ability
to retain water. The system is based on TenCate’s Low Sliding Resistance LSR ® technology.

Geosynthetics & Grass
For TenCate, players’ safety and avoiding injuries
are key principles in new developments.
TenCate has a leading position in research and
development and is aware of its social responsibility.
Environmental aspects are also integrated
into the development of a safe overall
Vincent Homrighausen,
concept consisting of an upper layer and substructure.
The Chinese men’s hockey team is
very enthusiastic about the playing characteristics.
‘This is the best hockey pitch in China.
It’s top quality!’ said captain Song Yi.
Sales & Marketing Manager Asia,
TenCate Thiolon
TenCate Thiolon supplied the artificial grass fibres and Sports Technology International
installed the pitches.
The pitches are important reference projects for safer and more durable hockey pitches.
At the request of the Chinese Hockey Association, the pitches have also been edged with a
yellow and red strip. These colours symbolise the Chinese fl ag.
‘ The specially developed concept allows
players to make full use of their technique.
That makes the game more attractive for
players and spectators alike.’
Royal Ten Cate Annual Report 2007 53

Geosynthetics & Grass
KEY FIGURES
Geosynthetics & Grass 2007 2006 2005 2004 2003
in millions of euros, unless stated otherwise
Revenues
Operating result before amortisation
468.3 397.5 273.9 231.9 213.0
(EBITA) 30.4 25.6 23.8 21.8 17.6
EBITA margin (%) 6.5 6.4 8.7 9.4 8.3
Operating result (EBIT) 28.3 25.5 23.8 21.8 16.9
Investments 44.9 28.9 10.5 5.3 8.3
Depreciation and amortisation 20.0 13.7 7.9 7.9 8.7
Net capital employed 354.8 215.8 206.4 98.2 102.1
Staff years at year-end 2,053 1,633 1,544 1,176 1,121
Return on net assets (%) 9.7 12.9 22.6 21.9 16.7
ACTIVITIES
The Geosynthetics & Grass sector consists of
the following market groups:
◾ TenCate Geosynthetics
Fabrics, grids and nonwovens for use in civil
engineering, the construction industry and the
environmental market. TenCate also produces
industrial fabrics for various applications,
such as fish farms, agribusiness, sport and
recreation.
◾ TenCate Grass
Artificial grass (Thiolon ® Grass) for a wide
range of sport applications. TenCate produces
the artificial grass fibre and backing. From
2007 TenCate is also supplying infill and other
components, according to its own specifications,
which play a part in determining the
characteristics of an artificial grass pitch.
Fibre production accounts for by far the largest
proportion of sales.
Protection against melting ice
The glaciers in Austria have shrunk by 15% since 1969. As a result, lift pillars can become dislodged, rocks can appear on the sur-
face and lifts can become unreachable on skis. TenCate Geosynthetics Austria has developed TenCate TopTex GLS. This material
reflects sunlight, so the heat does not penetrate the fabric. The structure ensures that snow does not slide away, thereby minimis-
ing the risk of avalanches. Water, which could accelerate the melting process, flows rapidly from the material. TenCate TopTex has
no impact on flora and fauna.
SALES AND RESULTS
Revenues in the TenCate Geosynthetics &
Grass sector amounted to € 468 million during
the year under review, a rise of 18% (2006:
€ 398 million). This rise was almost entirely
due to the acquisition of Mattex (TenCate
Thiolon Middle East) in April 2007. On an
organic basis, the revenue rise was 8%. EBITA
rose from € 25.6 million to € 30.4 million. The
rise was limited by the sluggishness of the
geosynthetics market in the United States
and start-up costs in the production of artificial
grass fibres. On an organic basis, EBITA
decreased by 22%. TenCate Thiolon Middle
East made a good contribution to the results.
The EBITA margin rose slightly during the year
to 6.5% (2006: 6.4%). The positive impact of
TenCate Thiolon Middle East was negated by
the market situation in the United States, the
production problems in artificial grass and the
strong rise in raw material costs. Conditions
have now been created for a considerable
improvement in results, due to cost reductions,
improved process control in artificial
grass production and price rises.

TenCate is the only producer which operates worldwide with a broad portfolio
INVESTMENTS
The total investments in this sector rose 55%
to € 44.9 million, compared to € 28.9 million in
2006. Depreciation and amortisation rose
strongly to € 20.0 million, partly due to the
acquisition of Mattex in 2007.
Considerable sums were invested in the construction
of a new production site for geosynthetics
in China in 2007. This plant entered
service in April 2008.
In addition, an investment plan for artificial
grass production drawn up at the end of 2006
was expanded in 2007 due to the growing
demand in the global market. TenCate has a
major competitive advantage because it
serves the global market from three production
sites: Dubai, the United States and the
Netherlands. This is an important factor, partly
due to the sharp fall in the value of the dollar.
TenCate Thiolon Middle East will be the
largest production facility in the Grass group
in 2008.
of both specialist products and systems and volume products.
GEOSYNTHETICS
MARKET POSITION AND STRATEGY
Geosynthetics is the collective name for fabrics,
grids and nonwovens, which are mainly
used in civil engineering, agriculture and the
construction industry. The use of these materials
is mainly aimed at (erosion) protection,
ground stability, land reclamation, drainage,
separation of strata and strengthening of
dykes and sheet piling. Customers for these
products are mainly the dredging industry and
construction companies. TenCate is the only
producer which operates worldwide with a
broad portfolio of both specialist products and
systems and volume products.
The market leadership position should ensure
further profitable growth in this sector. In the
implementation of the global strategy, market
positions with a strong brand image (TenCate
Mirafi ® , TenCate Polyfelt ® , TenCate Bidim ®
and TenCate Nicolon ® labels) are exploited.
TenCate has substantial production and distribution
resources for geosynthetics in the
United States, Europe and South-East Asia.
The growth strategy is focused particularly on
innovative products with high added value.
The Group aims for growth particularly in Asia
and South America. In the United States,
TenCate is successful on the basis of a strategy
focused on offering a wide range of products
with a high level of service and technical
support. Partly as a result of acquisitions and
their integration in the past few years, a position
similar to that in America has been
secured or is being developed in Europe,
South-East Asia and Australasia. The integrated
companies are complementary in
terms of market area, product portfolio and
technology.
TenCate has been active in the market for
geosynthetics for a number of years and continuously
develops new, high-grade applications,
such as the TenCate Geotube ® concept.
Geotube, a large container for sand, is being
used successfully worldwide in the construction
of hydraulic structures, coastal protection
and land reclamation. Further development of
this concept has led to a solution in the environmental
market, whereby sludge is cleared
from ports, canals and lakes. In the case of
industrial sludge, for example from the paper
and pulp industry, Geotube works as a filtering
and dewatering technology (high performance
filtration fabric). These products can be
used in a wide range of water management
Royal Ten Cate Annual Report 2007 55

applications. Their use worldwide is increasing,
partly as a result of natural disasters,
flooding and water shortages.
TenCate has a reputation in the market as one
of the most innovative suppliers. TenCate
Geosynthetics North America has once again
received an award for technological innovation.
This time it related to the way in which
improvements were made to the security zone
on one of the runways at Yeager Airport
(Charleston, United States).
GENERAL PERFORMANCE IN 2007
The Geosynthetics market group had a difficult
year overall as a result of the deterioration
in the market conditions in the United
States, which is the main sales region. In Asia
and Australia in particular, the market situation
was much more favourable.
In Europe, continuing revenue growth was
achieved, although the market for large
projects involving geotextiles was less active.
There is nevertheless a discernible trend
whereby customers are looking increasingly
at the environmental effects of the chosen
solutions. Geosynthetics are generally environmentally
friendly and result in cost sav-
ings, two characteristics which are rated positively.
Margins have decreased considerably. This is
a result of the sluggish demand in the United
States and a continuing rise in raw material
prices as a result of higher oil prices, which
could not be passed on sufficiently in selling
prices.
The worldwide strategy was further implemented
during the reporting year. This is
focused on gearing the various production
facilities and technologies to the required
product portfolio, product innovations and
growth in new applications and geographic
areas. In addition to dominant positions in the
United States, Europe and Asia, TenCate is
increasingly looking at growth potential in the
Middle East and Eastern Europe.
Over 50% of the materials and systems are
used in infrastructure projects and civil engineering.
In addition, materials are supplied for
the construction industry, the recreation market
and the agricultural sector. TenCate has a
substantial market share in growing mats for
the mushroom cultivation sector.
Valuable orders were received and attractive
A highway on solid ground
TenCate geosynthetics are being used in the widening of the R6 in the Czech Republic. The new four-lane highway is part of the
route between Prague and the Czech-German border. The section is 7.54 km long and covers an area of 190,000 m². It has eight
bridges. The embankments have a total area of 880,000 m³.
Five qualities of geosynthetic materials are being used: for the strengthening of the embankments, the foundations of the bridge
abutments, soil stabilisation and the building of temporary construction access roads. TenCate is able to supply the full range of
geosynthetics: wovens, nonwovens and grids.
projects were completed in the field of infrastructure
and the environment in 2007:
◾ Through the use of geosynthetics, temporary
roads and accommodation were built
within a short time and at modest cost in
2007 for over 100,000 Mississippi residents
made homeless by Hurricane
Katrina.
◾ TenCate geosynthetics were used in the
widening of the R6 in the Czech Republic.
The new four-lane highway is part of the
route between Prague and the Czech-
German border.
◾ 93,000 m² of TenCate Geolon ® was sup-
◾
plied for the Zuidwending salt extraction
area near Veendam. The use of this geotextile
means that the entire working area
remains accessible by vehicles.
TenCate Geosynthetics North America
now also focuses on paving restoration
(asphalt repairs) and other road-building
projects.
◾ Construction of a 73-metre-high slope
with TenCate Miragrid ® , TenCate
Miramesh ® and TenCate Mirafi ® ◾
for the
extension of one of the runways at Yeager
Airport (West Virginia, USA).
TenCate Polyfelt geotextiles were used in
the construction of a diversion canal in

the Teesta Dam IV project in West Bengal,
India.
Geotube ® systems were also used in 2007 for
land reclamation, coastal protection and dyke
construction:
◾ In order to protect NASA’s Wallops Flight
Center against storms and other violent
natural phenomena, a two-meter-high
and over 1,500-meter-long wall was
erected using TenCate Geotube containers
on the beach at Wallops Island
(Virginia).
◾ The beaches and tourist facilities at Cancun
in Mexico, which had been affected
by Hurricane Wilma, have been permanently
protected by Geotube systems
from TenCate since 2007.
◾ Geotube is being used in the rebuilding
work at the Rijksmuseum in Amsterdam.
Sludge resulting from the removal of
floors is being dewatered by means of
custom-made Geotube.
TenCate also develops interactive materials
using glass fibre technology. Examples include
TenCate GeoDetect ® and TenCate Hydro-
Detect ® . GeoDetect makes it possible to
monitor reinforced soil structures locally and
to deal with subsidence before it becomes
critical. This system is already proving its
worth, for example under high-speed lines,
where subsidence can lead to dangerous situations
and must therefore be detected immediately.
OUTLOOK
Cost savings were made particularly at the
Geosynthetics production sites in the United
States at the end of 2007 in view of the
market situation.
The number of large projects can nevertheless
lead to fluctuations in revenues from year
to year. The market outlook is positive on the
whole, despite the mediocre outlook for economic
growth.
TenCate’s market position for infrastructure
projects will be further strengthened in 2008
with the start-up of production activities in
China. This offers excellent prospects for revenue
and profit growth. The growth is expected
partly on the basis of the strategy focused
on the development of products with additional
added value and the increasing attention
devoted to water management and
environmental protection.
GRASS
MARKET POSITION AND STRATEGY
In terms of volume, technology and innovative
capability, TenCate is the world market leader
in artificial grass fibres. TenCate also has a
leading position in carpet backing for artificial
grass carpet, particularly in the high-quality
market segment (sports pitches).
In the artificial grass market, a distinction is
drawn between the sport market and the
landscaping market (recreational applications,
public green spaces, landscape applications,
etc.) The sport market is the largest area of
application, although landscaping is growing
rapidly, particularly in the United States and
Southern Europe. TenCate’s products are used
in both market segments.
Royal Ten Cate Annual Report 2007 57

TenCate’s policy is aimed at further developing
its leading role in the artificial grass sector
for the future. In addition to measures
aimed at operational and logistical improvements,
this includes:
◾ product differentiation in order to accommodate
various technical product characteristics;
◾ endeavouring to promote awareness
◾
among end-users of the importance of a
good, durable and safe pitch (brand
awareness and system approach);
acceleration of technological developments
based on patent positions (new
generations of artificial grass fibres and
systems);
◾ repositioning through greater control over
the value chain and embedding of the system
philosophy.
TenCate aims to co-operate with market participants
who endorse the system concept
approach:
◾ systematic development of sports pitches,
with predictable technical characteristics;
◾ provision of a wide range of artificial
grass systems, focusing on the specific
requirements of users;
◾ increase in the current quality standards,
with greater attention being devoted to
the level of technical characteristics;
◾ safe base for players;
◾ development of a cost-effective total concept
in order to put the product within
reach of a wider target group;
◾ partnerships in the chain to guarantee the
quality of the end-product, made from
high-quality system components;
◾ end-user marketing, whereby TenCate
and its partners provide advice for endusers,
such as associations, clubs and
other interested parties, on the system
performance of the sports pitch, either
directly or through its commercial partners;
◾ transparency with regard to the characteristics
and durability of the sports
pitch;
◾ exclusion of possibly environmentally
unfriendly or harmful raw materials.
TenCate aims to remain distinctive by means
of high-quality products and systems and
intensive R&D, in close co-operation with
knowledge institutions. This includes co-operation
with the Institute for Sport & Leisure of
the University of Twente, TNO and other test-
Bird-free verges
ing and research centres. In this way it is able
to provide sound advice and information for
end-users.
COMPLETION OF THE STRATEGIC FRAME-
WORK OF VALUE CHAIN MANAGEMENT
The acquisition of Mattex at the beginning of
2007 further strengthened TenCate’s position
as a fibre producer. For almost 40 years,
TenCate has developed, produced and marketed
artificial grass fibres and carpet backing
for artificial grass pitches for various uses.
TenCate has a leading role in research and
development and is therefore aware of its
social responsibility. In contact sports such as
football, player safety is of paramount importance.
Environmental aspects are also integrated
into the development of a safe total
concept consisting of an upper layer and substructure.
Recycling costs are also taken into
account. These products, assembled into artificial
grass systems with specific technical
characteristics, are supplied in particular to
companies in the carpet sector, marketing
organisations and installation companies
which offer end-users total concepts.
Birds are not only dangerous to aviation but also constitute a major cost. TenCateThiolon Aviation LSR ® is artificial grass based on
the tried-an-tested LSR technology but is tougher than traditional artificial grass fibres and natural grass. This quality has there-
fore been developed specially for use on taxiways and runways at airports. Birds and other animals do not like this tough surface
and therefore stay away. In addition, the artificial grass matting is unaffected by engine emissions or the cleaning of the paving.
Thiolon Aviation LSR provides extra stabilisation. What is more, air traffic is not impeded by mowing equipment.

An important motive behind the value chain
management strategy in the artificial grass
market is that TenCate wishes to exercise
greater control of the overall artificial grass
system in terms of technical characteristics,
quality, service life and environmental
aspects.
In the context of end-user marketing, one of
the cornerstones of the value chain management
model, attention is devoted to
the importance of branding. The TenCate
Thiolon ® brand has a strong quality image.
The brand is also seen as progressive and
innovative.
End-users and decision-makers are constantly
developing greater knowledge of artificial
grass. There is a trend in the market whereby
greater importance is being attached to quality,
durability and safety. Our branding policy
reflects this trend.
UEFA, FIFA and the associations are increasingly
focusing on the technical performance
aspects, quality and playing characteristics of
sports pitches and how they develop. Local
authorities, which are important customers,
are gaining increasing knowledge of artificial
In terms of volume, technology and innovative capability,
TenCate is the world market leader in artificial grass fibres.
grass. TenCate sees this as a positive development.
In this connection a development can also be
seen whereby TenCate will co-operate more
closely with marketing organisations. In some
of these organisations (Greenfields, Edel
Grass), TenCate has a minority interest. The
principal motive is to guarantee quality and
system development.
Another cornerstone of our value chain management
is innovation, which will lead to a
fourth-generation artificial grass system.
TenCate is producing an integrated system
combining the main technical characteristics,
such as shock absorption, friction resistance
and ball roll.
Adjustments have also been made with regard
to cost control and product differentiation.
The acquisition of Mattex also generates cost
advantages for us, making a positive contribution
to the overall competitive position.
TenCate has devoted a great deal of attention
to product differentiation in the past few
years. The company has developed a broad
product portfolio, with distinctive products
for various areas of application.
The growing artificial grass market is also
attracting new players, particularly in Asia.
New fibre producers are emerging mainly
from the carpet industry (backward integration).
Because of the increasing professionalism
in the market, it is becoming more difficult
to secure a position from the lower end of
the market. TenCate’s current position in the
overall value chain and the focus on systems,
coupled with our innovative capabilities, constitute
a considerable competitive advantage.
Guaranteeing quality is a challenge. The
industry as a whole wants to offer better
quality guarantees in terms of quality criteria,
delivery conditions and performance guarantees
for end-users. The European Synthetic
Turf Organisation (ESTO) has been formed
with this objective. A similar development
took place previously in the United States. In
Asia, TenCate has established its own quality
guarantee system, giving end-users assurance
as to the origin of the product and the
associated quality guarantees.
TenCate aims to position itself worldwide as
a leading player in the artificial grass market.
Royal Ten Cate Annual Report 2007 59

GENERAL PERFORMANCE IN 2007
The Grass group recorded revenue and earnings
growth in the year under review, partly
as a result of the acquisition of Mattex Leisure
Industries at the beginning of 2007. The
artificial grass market showed global growth
of approximately 10% to 15%, depending on
the region and the market segment. In organic
terms, the revenue growth was under pressure
from the fall in the value of the dollar and
delays in the start-up of new equipment.
The Grass group embarked on a major conversion
and expansion at the end of 2006 and the
beginning of 2007, in view of the current and
future growth of the artificial grass market as
a whole and the strong increase in demand
for monofilament (MF) fibres in particular. The
new product portfolio, a larger proportion of
MF fibres and combined fibre products (multifilaments),
which bring together various functional
characteristics, made changes necessary
in the production processes. The
consequences were evident mostly at the production
site in the Netherlands. The expansion
and conversion operation was accompanied
by start-up problems. As a result, output
did not reach the required level in terms of
volume and costs until the end of the year.
This put downward pressure on earnings.
60
Royal Ten Cate Annual Report 2007
The acquisition of TenCate Thiolon Middle
East enabled TenCate to meet a large part of
the increased demand for MF products.
Artificial grass is a global market, in which a
number of global market participants are buyers
of TenCate products. A plan has been
drawn up for the Grass group whereby the
global market will be optimally served from
three production sites. In 2008, the product
portfolio and the price-performance ratios are
being harmonised worldwide to create a global
product portfolio.
The Grass group also includes production of
backing, the material on which fibres are tufted
by carpet producers. Sales of outdoor
backing for artificial grass carpet are growing,
while production of indoor backing is
being scaled down. Since 2007, TenCate has
also provided the infill between the grass
fibres (Thiolon Infill Pro ® ). The type of infill is
one of the factors that determines the performance
of the artificial grass pitch. The
infill is made of environmentally friendly thermoplastic
granules and contains no harmful
materials. The provision of a co-ordinated set
of components makes it possible to market
system concepts together with components
that are used in the substructure. Currently
the market is lacking total concepts that enable
the end-user to make choices based on
the desired performance or playing characteristics
of the pitch. This approach is being
increasingly developed by TenCate in co-operation
with partners in the chain. This is a strategic
development, which was further implemented
during the reporting year and
increases the company’s distinctive capability.
The European market is shifting as a result of
growing demand from football, particularly
towards fibres with a strong visual similarity
to natural grass. TenCate is meeting this trend
with new fibres which guarantee the desired
technical characteristics. These fibre types
are used by bodies such as FIFA (FIFA Home),
at the KNVB training complex and by a number
of professional football clubs.
TenCate’s Australian partner, Sports Technology
International, won the contract in 2007 to
supply the artificial grass pitches on which
the Olympic hockey matches will be played in
Beijing. A special concept was developed for
these artificial grass pitches as a result of
close co-operation between the two compa-

nies. This offers on the one hand greater
physical protection through improved shock
absorption and on the other hand increased
water drainage. The hockey pitches also provide
a safe base if players come into contact
with the pitch, because the system is based
on TenCate’s LSR ® (Low Sliding Resistance)
technology. The Olympic pitches are important
reference projects for TenCate, demonstrating
its ability to supply safe and durable
hockey pitches. Hockey accounts for a considerable
proportion of TenCate’s revenues but is
largely a replacement market.
OUTLOOK
The volume of the global market is expected
to grow annually by an average of 10-15% in
the years ahead. Geographically, however,
there are major differences. The European
market, which is dominated by football, is the
largest geographic market, followed by the
American market. The Asian market, which is
still heavily focused on multi-sport applications
for schools and universities and other
institutions is growing rapidly. This also
means that the number of local suppliers will
increase, partly due to the relatively lower
quality requirements and import restrictions,
particularly those imposed by the Chinese
Olympic artificial grass
Sports Technology International, a partner of TenCate, has been awarded the contract to supply artificial grass pitches on which
the Olympic hockey matches will be played in Beijing. A special design concept has been developed for these artificial grass
pitches, based on TenCate’s LSR® technology. This concept has improved shock absorption and increased water drainage. The
pitches also provide a safe base for players. For TenCate, safety and avoiding injuries are key principles in new developments. The
Chinese men’s hockey team is very enthusiastic about the playing characteristics.
authorities. TenCate is therefore studying the
possibility and desirability of local production.
In Europe there is a broad market, with a
range of sports being played on artificial
grass. Further growth will be achieved mainly
as a result of growing acceptance of artificial
grass in football. Acceptance of artificial
grass is high in the United States and the
market is more uniform (American football,
high-school market). Continuing growth is
expected in this market, despite the mediocre
economic outlook.
Further investments in production capacity
will take place in 2008, in line with market
developments and the strategy. The strategic
and operational steps taken in the past year
should lead to considerably higher results in
2008, although these remain partly dependent
on trends in raw material prices (PE/PP)
and the dollar.

The power of innovation
62
Royal Ten Cate Annual Report 2007
Robert Lenferink,
‘Our R&D specialists work intensively with the leading knowledge
carriers, including our suppliers, customers, institutions and
universities. As a result, we have an international R&D machine
that enables us to innovate more effi ciently every time. That’s what
makes the difference!’
Head of R&D, TenCate Advanced Composites
The Erasmus Innovation Award jury declared TenCate to be the most innovative and competitive
organisation in the Netherlands. It was impressed by the way in which the company
combines technological and social innovation. TenCate's innovation process was described
as social innovation: ‘the development of new management skills (dynamic management),
the application of innovative organisational principles (fl exible organisation) and the implementation
of high-quality work forms (smarter working and development of talent)’.

Erasmus Innovation Award
Tatjana Topalovic,
Product Development Engineer
TenCate Advanced Textiles
‘Today’s product development is the basis for tomorrow’s success.’
Innovation forms one of the four cornerstones
of our value chain management model. To succeed
with innovation, it is important to be
focused on the technology and applications.
We deliberately select product-market combinations
in which functional specifi cations for
materials play a decisive role.
Successful innovation is a creative process
which must also be targeted at those characteristics
and requirements that are distinctive
for the specifi c areas of application in which
our products can potentially be used. Through
effective control of this process, TenCate has
successfully secured distinctive positions in
strategic key markets over the years.
TenCate's innovation policy is mainly aimed at providing solutions for worldwide trends.
A number of trends are important for TenCate’s future growth, such as increased security
and protection levels, fuel economy, water management, environmental protection and
developments in the fi eld of sport and recreation.
Technology forms one of the spearheads of innovation for TenCate. When developing new
product/market combinations, it is important to co-operate with institutions that have the
necessary complementary knowledge.
Frank Spaan, Director of
Corporate Development
& Investor Relations
‘Successful innovation is the result of channelling creativity,
mobilising knowledge and applying a binding agent in the
organisation on the basis of a clear strategic vision.’
Royal Ten Cate Annual Report 2007 63

Technical Components /
Holding & Services
KEY FIGURES
Technical Components/
Holding & Services 2007 2006 2005 2004 2003
in millions of euros, unless stated otherwise
Revenues
Operating result before amortisation
67.4 93.3 127.0 179.2 186.7
(EBITA) * 2.4 4.2 – 1.5 1.7 3.6
Operating result (EBIT) 2.4 3.7 – 1.8 1.7 3.2
Investments 1.0 2.4 2.5 2.7 2.6
Depreciation and amortisation 1.9 3.3 5.2 5.7 6.8
Staff years at year-end
*
including exceptional income.
729 696 863 1,254 1,311
ACTIVITIES
TenCate Enbi is the only commercial group in
this sector. The other companies in the Technical
Components sector have been divested
as part of the fix it/exit policy.
TenCate Enbi is one of the major global players
in the development and production of
(technical) rollers and components based on
rubber and foam technology for paper transport
and image transfer in printers, copiers
and fax machines, and for postal sorting
machines and ATMs.
64
Royal Ten Cate Annual Report 2007
In the financial reports, the data for TenCate
Enbi are combined with those of the holding
company and the related TenCate services.
SALES AND RESULTS
TenCate Enbi’s revenues decreased by 3%
during the reporting year. On an organic basis,
they remained unchanged.
Strong revenue growth was recorded in Asia,
but there was a decline in revenues from the
office equipment market in the United States
and Europe. The revenues from diversified
markets also grew, particularly the market for
components for heating equipment and the
automotive industry. The decrease in EBITA
was mainly due to the sale of Plasticum in
2006.
MARKET POSITION AND STRATEGY
TenCate Enbi’s core markets performed well.
Strong growth (> 10%) was recorded in the
market for colour laser printers. The inkjet
printer market also showed healthy growth of
approximately 8%. Niche markets, such as
photo printers and ATMs, are also showing
growth.
There are nevertheless geographic differences.
The European market is contracting, as a
result of which consolidation is taking place.
The weakness of the dollar is benefiting producers
outside the eurozone. The TenCate
Enbi production site in China is now operational
and should have a positive impact on
future developments.
The company also serves a number of niche
markets, including postal sorting machines,
the automotive industry, ATMs, photo printers
and heating systems. High-grade products are
developed in co-operation with the customer.
In addition, in-house products are developed
and produced for the OEMs. In order to offset

TenCate Enbi is a leading supplier to major European, American and Asian printer and
copier manufacturers and one of the few suppliers operating on these three continents.
the loss of revenues in the European market,
TenCate Enbi has also focused on the replacement
market for laser printer cartridges.
TenCate Enbi is endeavouring to broaden its
customer portfolio. Major progress was made
towards this objective again in 2007, partly as
a result of supplying fuser rollers to a leading
South Korean printer manufacturer.
TenCate Enbi fulfils high technological and
quality requirements. The development of
new products and innovations is a precondition
for generating further growth and
replacement sales in a market with ever
shorter life cycles.
GENERAL PERFORMANCE IN 2007
TenCate Enbi can look back on a satisfactory
year. The company is responding rapidly to
global shifts in production by OEMs. The sites
in Singapore and China in particular are taking
advantage of this trend.
Sales in the replacement market are growing
slowly. This is mainly due to lengthy qualification
procedures.
Supplying fuser rollers to South Korea
After more than two years of close co-operation between the technologists at Samsung in South Korea and the fuser roller R&D
department in Rochester (NY, USA), TenCate Enbi began supplying fuser rollers from its production site at Zhuhai (China).
These are used in Samsung’s high-volume laser printer platforms.
In Europe, it has been decided to carry out an
organizational integration of the sites in Germany
and Hungary. This will lead to greater
commercial strength and cost reductions in
2008.
OUTLOOK
TenCate Enbi is looking to 2008 with confidence.
In order to achieve growth, it is necessary
to generate replacement sales continuously.
With sites in the United States, Europe and
Asia, TenCate Enbi can react appropriately to
developments in the world market, which is
dominated by a number of large players
(OEMs). The developments in market participants
are important for further developments
at TenCate Enbi.
The relocation of production due to cost savings
remains an ongoing process, particularly
for volume products. High-grade production
for niche markets takes place on a more
regional basis.
TenCate has previously expressed its intention
of divesting TenCate Enbi. No time limit
has been set. The policy therefore remains to
achieve further strategic development, so
that TenCate Enbi can continue to present
itself as a reliable long-term development
partner. Continuity, quality and reliability in
all aspects of the operating process are
accordingly key principles.

Innovative learning
66
Royal Ten Cate Annual Report 2007
‘In addition to practical co-operation with colleagues, the programme
offers detailed insights which can be applied to day-to-day operational
management and innovative business cases. The TenCate Active programme
is the ideal TenCate mix of people, knowledge and materials!’
Jeroen Boks, Global Product Manager
Personal Protection, TenCate Advanced
Composites
Entrepreneurship, leadership, innovative capability,
a focus on results and co-operation are
core values which are strengthened in
TenCate’s management development (MD) programme.
The aim is to ensure appropriate succession,
the development of current and
potential management and the attraction of
talent worldwide. The TenCate Active programme
forms part of the efforts in the MD
area.
For an enterprising and growing organisation such as TenCate, timely identification and
development of in-house talent for tomorrow’s management is an important key to success.
The company operates a four-layer international management development programme
focusing on appropriate succession, the development of current and potential management
and the attraction of the right talents. The MD programme strengthens core values such as
entrepreneurship, leadership, innovative capability, a focus on results and co-operation.

Management development
Marleen Schuite,
The TenCate Active programme has been
developed in co-operation with TSM Business
School and is generally viewed as an innovative
programme.
In addition to the acquired knowledge, skill,
expertise and attitude, an important added
value is the co-operation between the strategic
product groups and disciplines.
‘As well as providing knowledge and insight
with regard to TenCate’s strategy, the TenCate
The MD programme will be implemented in Europe and the United States and expanded to
include an executive programme, a talent-scouting programme and a trainee programme. In
these programmes too, the emphasis will be on entrepreneurship, leadership and a focus on
results. Continuous scouting, assessment, evaluation and talent development form the core
of every programme.
Active programme provides a secure, inspiring
and effective learning environment in which
there is space for innovation and development.’
The Active programme also offers insights into
operational management and business cases –
from explanatory strategic analyses to the
well-founded implementation of our strategic
pillars.
‘The Business Projects section is an excellent example of
how you can take professionals out of their physical work
environment and have them work together in an inspiring
learning environment. As a programme manager I’m very
proud of the participants’ end-result and the commitment
showed by the management.’
Business Development Manager, TSM Business School
Royal Ten Cate Annual Report 2007 67

68
Royal Ten Cate Annual Report 2007

Financial statements 2007
Royal Ten Cate
Consolidated profit and loss account 71
Consolidated balance sheet 72
Consolidated cash flow statement 74
Consolidated statement of changes in Group equity 76
Notes to the consolidated financial statements 77
1 General information on Royal Ten Cate 77
2 General principles for financial reporting 77
3 Principles for the preparation of the financial
statements 77
4 Consolidation principles 78
5 Foreign currencies 79
6 Derivatives 79
7 Hedge accounting 80
8 Segment reporting 80
9 Revenues 80
10 Raw materials and manufacturing supplies 80
11 Lease payments 80
12 Financial income and expenses 81
13 Profit tax 81
14 Earnings per share 82
15 New standards and interpretations
not yet applied 82
16 Principles for the cash flow statement 83
17 Tangible fixed assets 83
18 Intangible fixed assets 84
19 Inventories 85
20 Trade and other receivables 85
21 Cash and cash equivalents 85
22 Impairment 85
23 Share capital 86
24 Pension liabilities 87
Royal Ten Cate Annual Report 2007 69

25 Share-based payments 87
26 Provisions 88
27 Long-term debts 88
28 Trade creditors 88
Notes to the consolidated profit and loss account 89
29 Segment information 89
30 Acquisitions and divestment of subsidiaries 91
31 Personnel costs 93
32 Other operating costs 93
33 Financial income and expenses 94
34 Profit tax 94
35 Result from associated companies 95
36 Result from divested operations 95
Notes to the consolidated balance sheet 96
37 Tangible fixed assets 96
38 Intangible fixed assets 98
39 Other participating interests 99
40 Other long-term receivables and investments 99
41 Deferred tax receivables and liabilities 100
42 Inventories 100
43 Trade debtors 101
44 Other receivables 101
45 Cash and cash equivalents 101
46 Equity 101
47 Earnings per share 104
48 Long-term debts 105
49 Pension liabilities 107
50 Provisions 110
70
Royal Ten Cate Annual Report 2007
Other information 111
51 Financial instruments 111
52 Liabilities not shown in the balance sheet 115
53 Investment liabilities 116
54 Contingent liabilities 116
55 Post balance sheet events 116
56 Related parties 116
57 Estimates and judgments formed by
the management 117
Company financial statements 118
58 Company profit and loss account 118
59 Company balance sheet before appropriation
of profit 118
Notes to the company financial statements 119
60 Financial fixed assets 119
61 Equity 120
62 Called and paid-up capital 120
63 Ordinary shares 120
64 Share premium reserve 120
65 Statutory reserves 121
66 Other reserves 121
67 Option plan 121
68 Provisions 124
69 Long-term liabilities 124
70 Short-term liabilities 124
71 Other information 125

Consolidated profit and loss account
in millions of euros note 2007 2006
Revenues 29 886.0 770.5
Changes in inventories of finished products and work in progress – 11.7 – 4.8
Raw materials and manufacturing supplies 463.6 402.2
Work contracted out and other external expenses 54.9 34.7
Personnel costs 31 178.3 171.2
Depreciation and impairment 37 29.1 22.1
Amortisation 38 3.6 1.0
Other operating costs 32 98.8 94.0
Total operating expenses 816.6 720.4
OPERATING RESULT 69.4 50.1
Financial income 33 0.5 0.1
Financial expenses 33 – 11.8 – 8.1
NET FINANCIAL EXPENSES – 11.3 – 8.0
PRE-TAX RESULT 58.1 42.1
Profit tax 34 – 11.9 – 11.4
Result after tax but before divestment of activities 46.2 30.7
Result from participating interests 35 – 3.4
Result from divested operations after tax 36 0.3 42.0
RESULT AFTER TAX 46.5 76.1
ATTRIBUTABLE TO:
Shareholders of parent company (net income) 46.4 76.0
Minority interests 0.1 0.1
Weighted average number of shares (x 1,000) 47 22,797 20,749
Weighted average number of shares after dilution (x 1,000) 47 22,967 21,264
Net profit per share (euro)
corrected to take account of result from divested activities and
2.04 3.66
exceptional income* 1.89 1.64
Diluted net result per share (euro)
corrected to take account of result from divested activities and
2.02 3.57
exceptional income*
* 2007: Concerns in particular income from the sale of real estate and associated expenses: € 3.1 million net.
1.87 1.60
2006: Adjusted for comparison purposes.
Royal Ten Cate Annual Report 2007 71

Consolidated balance sheet
in millions of euros note 31 December 2007 31 December 2006
FIXED ASSETS
Tangible fixed assets 37 218.1 165.8
Intangible assets 38 136.8 12.4
Other participating interests 39 1.3 1.3
Other long-term receivables 40 4.9 5.1
Deferred tax receivables 41 13.6 11.9
Total fixed assets 374.7 196.5
CURRENT ASSETS
Inventories 42 176.2 157.7
RECEIVABLES
Trade debtors 43 145.8 109.0
Profit tax receivables 3.8 4.7
Other receivables 44 16.6 14.5
Cash and cash equivalents 45 4.8 6.7
Total current assets 347.2 292.6
TOTAL ASSETS 721.9 489.1
72
Royal Ten Cate Annual Report 2007

in millions of euro note 31 December 2007 31 December 2006
GROUP EQUITY 46
Share capital 58.9 52.7
Share premium reserve 50.7 6.3
Statutory reserve – 19.5 – 2.0
Other reserves 173.6 105.7
Undistributed Result 46.4 76.0
Equity attributable to shareholders of the company 310.1 238.7
Minority interests 0.3 0.2
Group equity 310.4 238.9
LONG-TERM LIABILITIES
Long-term debts 48 222.3 63.5
Pension liabilities 49 28.5 31.8
Provisions 50 11.4 11.8
Deferred profit tax liabilities 41 0.9 0.2
Total long-term liabilities 263.1 107.3
SHORT-TERM LIABILITIES
Banks, current accounts 45 12.5 29.1
Repayment of long-term debt 48 0.4 1.3
Trade creditors and other payables 128.9 103.1
Provisions 50 3.4 5.8
Profit tax payable 3.2 3.6
Total short-term liabilities 148.4 142.9
Total liabilities 411.5 250.2
TOTAL GROUP EQUITY AND LIABILITIES 721.9 489.1
Royal Ten Cate Annual Report 2007 73

Consolidated cash flow statement
in millions of euros note 2007 2006
CASH FLOW FROM OPERATING ACTIVITIES
Result after tax 46.5 76.1
Adjustments for
Depreciation and impairment 37 29.1 22.1
Amortisation 38 3.6 1.0
Interest 33 10.9 7.1
Exchange rate differences 33 0.4 0.9
Profit tax 34 11.9 11.4
Result from associated companies 35 – – 3.4
Result from divested operations 36 – 0.3 – 42.0
Result from sale of tangible fixed assets 32 – 9.7 – 3.7
Costs of option plan 1.1 0.2
Change in provisions and pension liabilities
CASH FLOW FROM OPERATING ACTIVITIES (EBIT)
– 5.3 – 4.0
BEFORE CHANGE IN WORKING CAPITAL 88.2 65.7
CHANGES IN WORKING CAPITAL
Inventories – 19.8 – 6.7
Receivables – 31.6 – 11.7
Short-term liabilities 16.2 14.4
– 35.2 – 4.0
CASH FLOW FROM OPERATING ACTIVITIES 53.0 61.7
Interest paid – 11.1 – 7.3
Profit tax paid – 14.1 – 9.2
CASH FLOW FROM OPERATING ACTIVITIES 27.8 45.2
74
Royal Ten Cate Annual Report 2007

in millions of euros note 2007 2006
CASH FLOW FROM INVESTING ACTIVITIES
Income from sale of tangible fixed assets 32 11.1 4.5
Interest received 0.3 0.2
Dividend received 40 – 0.6
Divested activities less cash 30 7.8 64.0
Receipt of long-term receivables 0.2 0.2
Acquisition of operating companies less cash acquired 30 – 182.9 –
Acquisition of associated company 30 – – 1.3
Cash acquired from joint venture included in consolidation – 0.3
Investments in intangible fixed assets 38 – 1.4 – 0.7
Investments in tangible fixed assets 37 – 61.5 – 42.3
Increase in long-term receivables – 0.5 – 1.8
CASH FLOW FROM INVESTING ACTIVITIES – 226.9 23.7
CASH FLOW FROM OPERATING AND INVESTING ACTIVITIES – 199.1 68.9
CASH FLOW FROM FINANCING ACTIVITIES
Issue of new shares 50.6 –
Issue of repurchased shares 1.0 0.3
Repurchase of own shares – 4.2 – 7.2
Drawdown of long-term debt 215.3 0.6
Repayment of long-term debt – 56.2 – 68.1
Dividend payment to shareholders – 4.7 – 5.8
CASH FLOW FROM FINANCING ACTIVITIES 201.8 – 80.2
CHANGE IN CASH* 2.7 – 11.3
Cash on 1 January – 22.4 – 21.3
Currency differences in cash 12.0 10.2
CASH AS AT 31 DECEMBER
* Cash includes: cash and cash equivalents minus banks, current accounts (see note 45).
– 7.7 – 22.4
Royal Ten Cate Annual Report 2007 75

Consolidated statement of changes in Group equity
in millions of euros
76
Royal Ten Cate Annual Report 2007
Share
capital
Share
premium
Retained
earnings of
associated
companies
Translation
differences
Retained
earnings
Undistributed
profit
Undistributed
result
BALANCE AS AT 1 JANUARY 2006 52.0 7.0 23.9 4.6 63.4 0.4 30.5 181.8
Foreign currency translation differences
Release of statutory reserve on sale
–6.2 –6.2
of participating interest –0.4 –0.4
Result for 2006 76.0 76.0
TOTAL RESULT FOR 2006 – – – – 6.6 – – 76.0 69.4
2005 profit appropriation 4.4 13.5 0.1 –18.0 –
Dividend paid –5.8 –5.8
Stock dividend
Transfer of statutory reserve on sale
0.7 –0.7 6.7 –6.7 –
of participating interest – 28.3 28.3 –
Share-based payments 0.2 0.2
Issue of repurchased shares 0.3 0.3
Repurchase of own shares –7.2 –7.2
TOTAL OTHER CHANGES 0.7 – 0.7 – 23.9 – 41.8 0.1 – 30.5 – 12.5
BALANCE AS AT 31 DECEMBER 2006 52.7 6.3 – –2.0 105.2 0.5 76.0 238.7
BALANCE AS AT 1 JANUARY 2007 52.7 6.3 – –2.0 105.2 0.5 76.0 238.7
Foreign currency translation differences –18.8 –18.8
Result for 2007 46.4 46.4
TOTAL RESULT FOR 2007 – – – – 18.8 – – 46.4 27.6
2006 profit appropriation 1.3 58.5 – 59.8 –
Dividend paid – 4.7 – 4.7
Stock dividend 0.9 – 0.9 11.5 – 11.5 –
Issue of shares 5.3 45.3 50.6
Share-based payments 1.1 1.1
Issue of repurchased shares 1.0 1.0
Repurchase of own shares – 4.2 – 4.2
TOTAL OTHER CHANGES 6.2 44.4 1.3 – 67.9 – – 76.0 43.8
BALANCE AS AT 31 DECEMBER 2007 58.9 50.7 1.3 – 20.8 173.1 0.5 46.4 310.1
MINORITY INTERESTS
Balance as at 1 January 2006 –
In consolidation of Geofabrics Australasia 0.1
Result for 2006 0.1
Balance as at 31 December 2006 0.2
Result for 2007 0.1
Balance as at 31 December 2007 0.3
Total
equity

Notes to the consolidated financial statements
ACCOUNTING STANDARDS
1 GENERAL INFORMATION ON ROYAL TEN CATE
Koninklijke Ten Cate nv (Royal Ten Cate) (the Company) is established in Almelo, the Netherlands.
The consolidated financial statements of the Company comprise those of the Company and its operating companies
(referred to collectively as the ‘Group’) and the Group’s interests in other (non-consolidated) participating
interests and a proportionally consolidated joint venture. The financial statements have been prepared by the
Executive Board. The 2007 annual report and accounts were discussed on 26 February 2008 at the meeting of
the Supervisory Board. They were released for publication on 27 February 2008. They will be presented to the
general meeting of shareholders for adoption on 3 April 2008.
The parent company financial statements form part of the 2007 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 GENERAL PRINCIPLES FOR FINANCIAL REPORTING
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards, as adopted within the EU (hereinafter EU-IFRS) and with Title 9 of Book 2 of the Netherlands Civil
Code.
3 PRINCIPLES FOR THE PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements are presented in millions of euros, unless stated otherwise. The financial statements
have been prepared on the basis of historical cost, except for the following assets and liabilities, which are
valued at market value: derivative financial instruments and financial instruments held for trading purposes.
In preparing the financial statements, the Executive Board has in some cases used estimates and assumptions
which affect the amounts stated in the consolidated financial statements (see note 57). Changes in estimates
and assumptions may affect amounts reported in future years. The actual results may differ from such estimates.
The accounting principles set out below have been applied consistently by the Group’s operating companies and
joint venture for the periods presented in the consolidated financial statements.
Royal Ten Cate Annual Report 2007 77

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4 CONSOLIDATION PRINCIPLES
4.1 Operating companies
Operating companies are companies in which the Group directly and/or indirectly has a controlling interest. 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 operating companies are included in the consolidated financial statements from the first to the last date on
which control is exercised.
4.2 Associated companies, joint ventures and other participating interests
Associated companies are companies in which the Group can exert significant influence on the financial and
operational policy, but in which it has no controlling interest and which are not therefore included in the consolidation.
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. Associated companies are accounted for using the equity
method.
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 legally enforceable or actual
liability on behalf of the associated company. Other participating interests over which no significant influence is
exerted are valued at market value and the dividend is stated in the profit and loss account when it is made payable.
If no market 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 operating companies 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 non-consolidated companies and proportionally consolidated joint
ventures are eliminated in proportion to the Group’s interest in the respective company. Unrealised losses are
eliminated in the same way as unrealised profits, but only to the extent that there is no indication of impairment.
78
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5 FOREIGN CURRENCIES
5.1 Transactions in foreign currencies
Receivables and liabilities denominated in foreign currencies are converted into euros at the rate prevailing on
the balance sheet 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 into euros at the exchange rate on the transaction date.
5.2 Financial statements of foreign operating companies
The profit and loss accounts of foreign operating companies are converted into euros at the exchange rate on
the transaction date. Assets and liabilities including goodwill are converted at the rates on the balance sheet
date. The resulting translation differences are carried in equity. If a foreign activity is fully or partly divested,
the respective amount is transferred from equity to the profit and loss account. The rates of the main currencies
against the euro are as follows:
Closing rate Average rate
2007 2006 2007 2006
US dollar 1.46 1.32 1.37 1.26
Hungarian forint (100) 2.54 2.51 2.52 2.64
Danish krone 7.45 – 7.45 –
UAE dirham 5.36 – 5.03 –
Singapore dollar 2.12 2.02 2.06 2.00
Malaysian ringgit 4.88 4.66 4.72 4.62
6 DERIVATIVES
Royal Ten Cate uses derivatives in order to hedge exchange rate and interest rate risks resulting from operating,
financing and investing activities. Examples are interest rate caps and swaps as well as currency options and
forward contracts. In accordance with its treasury policy, the Group does not use derivatives for trading purposes.
Nor does it issue such derivatives. Any derivatives which do not meet the requirements for hedge accounting
are stated as trading instruments. Derivatives are valued at market value. The inclusion of the resulting
income or expense depends on the nature of the item being hedged. The market value of interest rate swaps
is the estimated amount which the Group would receive or would have to pay in order to terminate the swap
on the balance sheet date, taking into account the current interest rate and the current creditworthiness of the
counterparty/counterparties in the swap. The market value of foreign exchange forward contracts is the quoted
market price (forward price) on the balance sheet date.
Royal Ten Cate Annual Report 2007 79

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7 HEDGE ACCOUNTING
Where specific conditions are met (IAS 39 88), hedge accounting can be applied. Under these specific conditions,
there must be a demonstrable one-on-one relationship between the risk and the hedge instrument. In such
a situation, the profit or loss is stated directly in equity during the term of the risk and the hedge instrument.
When the risk and/or the hedge instrument terminates, the result is stated in the profit and loss account or in
the cost price of the first-time inclusion of the non-financial asset or liability. If no hedge accounting is applied,
profits or losses on the hedge instrument are always stated in the profit and loss account. No hedge accounting
was applied in the 2007 financial statements.
8 SEGMENT REPORTING
A segment is a clearly distinguishable part of the Group which is engaged in the supply of products or services
(business segment), or the supply of products or services in a particular economic environment (geographic segment)
which has a different risk and return profile than other segments. The Group’s primary segmentation is
based on business segments.
9 REVENUES
Revenues comprise the revenues from goods and services supplied to third parties, less discounts and any taxes
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 balance sheet date. No revenues are recognised 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.
10 RAW MATERIALS AND MANUFACTURING SUPPLIES
The consumption of raw materials and manufacturing supplies is calculated on the basis of historical cost.
11 LEASE PAYMENTS
11.1 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.
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Royal Ten Cate Annual Report 2007

11.2 Financial leasing
Lease payments are stated partly as financing charges 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.
12 FINANCIAL INCOME AND EXPENSES
The financial income and expenses include the interest charges on cash, interest-bearing investments, interest
charges on financial lease payments, foreign exchange translation differences and results of derivatives for
which no hedge accounting is used. Interest income and expenses are included in the profit and loss account on
the basis of the effective interest rate method.
13 PROFIT TAX
The tax on profit for the financial year includes the taxation that is payable, available for set-off and deferred in
respect of the reporting period. The tax is stated in the profit and loss account, except where it relates to items
which are included directly in equity, in which case the tax is stated in equity.
Tax that is payable and available for set-off in respect of the reporting period is the tax which is expected to be
payable on the taxable result, calculated on the basis of tax rates which have been set on the balance sheet
date, or on which a firm decision has been taken by the balance sheet date, and corrections to tax payable in
respect of previous years.
A provision is formed for deferred tax differences using the balance sheet liability method for timing 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 timing differences: non-tax-deductible goodwill and the difference
between the economic and fiscal value of operating companies, associated companies, joint ventures
and other participating interests. The amount of the provision for deferred 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 balance sheet date, have been specified by law or in respect of which an effective legal decision has
been taken. The amount of deferred tax receivables is reduced to the extent that it is no longer likely that the
associated tax benefit will be realised.
Additional taxes on the profit in respect of dividend payments are stated at the same time as the liability to pay
the respective dividend.
Royal Ten Cate Annual Report 2007 81

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14 EARNINGS PER SHARE
The Group presents ordinary and diluted earnings per share for the ordinary share capital. The net result per
ordinary share is calculated on the basis of the profit attributable to shareholders or the loss divided by the
weighted average number of ordinary shares in issue during the reporting period. In the calculation of the diluted
earnings per share, 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.
15 NEW STANDARDS AND INTERPRETATIONS NOT YET APPLIED
A number of new standards, amendments to standards and interpretations were not in force in 2007 and have
therefore not been applied to these consolidated financial statements:
◾ IFRS 8 – Operating segments, the replacement for IAS 14 Segment Reporting: introduces the management
approach to segment reporting. This becomes compulsory with effect from 2009 and is consistent with the
breakdown which the management uses for internal purposes. The impact of IFRS 8 on TenCate is currently
being analysed.
◾ Revision of IAS 23 – Borrowing costs: the existing possibility of charging financing expenses in connection
with the construction or purchase of an asset directly to the result is no longer permitted under the amended
standard. Instead, financing costs must be capitalised. This already happens in the case of significant
investments.
◾ IFRIC 14, IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction:
IAS 19 states that pension surpluses may be capitalised if they are available to the company. The
interpretation states that this is the case if the company has unconditional rights to the surplus. An existing
minimum cover ratio may have consequences for this. IFRIC 14 applies to financial years commencing on or
after 1 January 2008 and earlier application is recommended. The impact of IFRIC 14 on TenCate is currently
being analysed.
◾ IFRS3 – Business Combinations will be adjusted with effect from 1 July 2009.
◽ On the basis of the amended standard, acquisition costs must from now on be charged directly to the
result. At present they are still capitalised as part of goodwill.
◽ The value of an earn out arrangement on the acquisition date is based on the market value. Changes
in the market value will from now on be stated directly as a charge to the result (currently corrected in
goodwill).
◾ Other new standards such as
◽ IFRIC 11, IFRS 2– Group and Treasury Share Transactions
◽ IFRIC 12 Service Concession Arrangements
◽ IFRIC 13, Customer Loyalty Programmes
are not expected to have any material impact on TenCate.
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16 PRINCIPLES FOR THE CASH FLOW STATEMENT
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 market 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 cash management of
the Group are included in the balance of cash and bank current accounts as part of the consolidated cash flow
statement.
17 TANGIBLE FIXED ASSETS
17.1 Owned assets
Tangible fixed assets are valued at cost less accumulated depreciation (see 17.4) and impairments (see
note 22).
The cost price of self-manufactured assets comprises material costs, direct labour costs and an appropriate portion
of directly attributable overheads.
Where tangible fixed assets consist of components with differing useful lives, these are stated as separate
items under tangible fixed assets.
17.2 Leased assets
Lease agreements in which the Group actually assumes all risks and benefits of ownership are classified as
financial leases. Tangible fixed assets which are acquired by means of financial leases are valued at the lower
of market value and the discounted value of the minimum lease payments at the inception of the lease, less
accumulated depreciation (see 17.4) and impairments (see note 22). Lease payments are stated as described in
note 11.
17.3 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 costs of such periodic replacement
expenses can be reliably determined. All other expenses are charged to the profit and loss account when
they are incurred.
Royal Ten Cate Annual Report 2007 83

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17.4 Depreciation
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 periodically assessed.
18 INTANGIBLE FIXED ASSETS
18.1 Goodwill
All acquisitions are accounted for using the purchase accounting method. Goodwill results from the acquisition
of subsidiaries, associated companies and joint ventures and is the difference between the cost of the acquisition
and the net market value of the acquired identifiable assets, liabilities and contingent liabilities.
Up until 2000, goodwill was charged to equity. In the years 2001 to 2003 it was stated at cost less depreciation.
Since 1 January 2004, goodwill has no longer been amortised but is valued at cost less accumulated impairments).
Goodwill is allocated to cash generating units.
18.2 Research and development
Costs of 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.
Costs of 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 product or process is technically
and commercially feasible and the Group has sufficient resources to complete the development. The capitalised
costs include material costs, direct labour 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 depreciation and impairments (note 22).
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18.3 Other Intangible assets
Other intangible fixed assets acquired by the Group are valued at cost less accumulated amortisation and
impairments (note 22). Costs of internally generated goodwill and trademarks are stated as an expense in the
profit and loss account when they are incurred.
18.4 Expenses after first-time inclusion
Expenses after the first-time inclusion of capitalised intangible fixed assets are capitalised only if they lead
to an increase in the future economic benefits embodying the particular asset to which they relate. All other
expenses are charged to the profit and loss account when they are incurred.
18.5 Amortisation
Amortisation costs are charged to the profit and loss account by the straight-line method on the basis of the
estimated useful life of intangible fixed assets. Goodwill is tested each year on the balance sheet date to
assess whether any impairment has arisen. The amortisation of other intangible fixed assets begins as soon as
the assets are available for use. The estimated useful life is a maximum of ten years.
19 INVENTORIES
Inventories are stated at the lower of cost or net realisable value. The net realisable value is the estimated sale
price in ordinary operations, less the estimated costs of completion and the sale costs. The cost of inventories
is based on the FIFO (First In, First Out) principle and includes the costs incurred on the acquisition of inventories
and of bringing them to the existing location and to the existing condition. In the case of inventories of finished
products and work in progress, the cost price includes an appropriate portion of the indirect costs based on the
normal production capacity, in addition to the direct costs.
20 TRADE AND OTHER RECEIVABLES
Trade and other receivables with a term of less than one year are stated at amortised cost less impairment
losses.
21 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and immediately claimable credit balances.
Current account credit balances 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.
22 IMPAIRMENT
The book value of the Group’s assets, except that of inventories (note 19) and deferred tax receivables (note 13)
is examined at each balance sheet 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 balance
sheet date.
Royal Ten Cate Annual Report 2007 85

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
An impairment is recognised when the book value of an asset or the cash generating unit thereof is higher than
the realisable value. It is first charged to any allocated goodwill and then deducted from the book value of the
other assets.
22.1 Calculation of the realisable value
The realisable value is the higher of the recoverable amount or the value in use. In determining the value in
use, the discounted 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. 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.
22.2 Reversal of impairments
An impairment relating to goodwill cannot be reversed. In the case of other assets, an assessment is made on
the balance sheet 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 no higher than the book value
which would have been determined after the deduction of depreciation, if no impairment had been recognised.
23 SHARE CAPITAL
23.1 Share capital
The share capital is classified as equity.
23.2 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 under ‘Other reserves’ and presented as a deduction from total assets.
23.3 Dividend
Dividend is stated as a liability in the period in which it is declared.
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Royal Ten Cate Annual Report 2007

24 PENSION LIABILITIES
24.1 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.
24.2 Defined benefit schemes
The Group’s net liability in respect of defined benefit pension rights is calculated separately for each scheme by
estimating the amount of the future payments which employees have earned in the present and previous reporting
periods in exchange for their services. This payment is discounted in order to determine the present value,
with the market value of the fund investments being deducted. The discount rate is the yield on the balance
sheet date of bonds with an AA creditworthiness rating and a term similar to that of the Group’s liabilities. The
calculation is carried out by an authorised actuary on the basis of the projected unit credit method.
If the payments under a pension scheme are increased, the proportion of the higher payment 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 granting of the rights. If the rights are granted immediately, the expense is stated
immediately in the profit and loss account.
With regard to the actuarial profits and losses which arise in the calculation of the Group’s liability under a pension
scheme, to the extent that the stated accumulated actuarial profits and losses exceed the higher of 10% of
the discounted value of the gross liability under defined benefit pension rights or the market value of the fund
investments (in other words: remains within the corridor), that portion is stated in the profit and loss account
over the expected average residual service period of employees participating in the scheme. Otherwise the
actuarial profit or loss is not stated.
When the calculation results in a receivable for the Group, the stated asset item is limited to the net total of any
unstated actuarial losses and back-service costs and the discounted value of the lower of future repayments by
the fund or future pension contributions.
25 SHARE-BASED PAYMENTS
The option plan enables the Group’s management to acquire shares in the legal entity. The market value of the
granted options is stated under personnel costs, with a corresponding entry in equity. The market 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 market value of the granted options is determined on the basis of a binomial
model, taking account of the conditions under which the options have been granted.
Royal Ten Cate Annual Report 2007 87

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26 PROVISIONS
A provision is stated in the balance sheet if there is a legally enforceable or actual obligation for the Group as a
result of an event in the past and it is likely that an outflow of resources will be required to settle such liability.
If the effect of this is material, the provisions are determined by discounting the expected future cash flows
using a discount rate before tax which reflects the current market valuations of the time value of money and, if
necessary, the specific risks of the liability.
26.1 Claims and guarantees
The provision for guarantees relates to goods and services supplied and the provision for claims relates to
claims for damages and possible legal costs.
26.2 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.
26.3 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 relevant period, as in the case of defined benefit pension
schemes.
26.4 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 LONG-TERM DEBTS
When included for the first time, interest-bearing loans received are stated at market value less attributable
transaction costs. After the first-time inclusion, 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
ofthe effective interest method over the term of the loans.
28 TRADE CREDITORS
Trade creditors and other payables are stated at amortised cost.
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Notes to the consolidated profit and loss account
29 SEGMENT INFORMATION
Segment information is provided for the business and geographical segments of the Group. The primary segmentation
basis, business segments, reflects the Group’s management structure and internal reporting structure.
The prices for transactions between the segments are determined on an objective, business basis.
The results, assets and liabilities of a segment comprise items which can be attributed directly or reasonably to
the segment. Financial income and expenses and profit tax are not allocated to the segments.
Investments in fixed assets in the segment relate to the total costs incurred during the reporting period for the
acquisition of the assets of the segment which are expected to remain in use for longer than a reporting period.
Business segments
The Group distinguishes the following main business segments:
◾ Advanced Textiles & Composites
◽ Manufacture and sale of protective and safety fabrics for professional wear, outdoor fabrics, personal
and vehicle protection and composites for technological applications in aerospace
◾ Geosynthetics & Grass
◽ Manufacture and sale of fabrics and nonwovens for civil engineering and environmental projects and
manufacture and sale of artificial grass fibres
◾ Technical Components/Holding & Services
◽ Manufacture and sale of rubber and foam rollers for the office equipment industry, as well as country
holding companies and service companies
Geographic segments
The segments are active 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 segment are based on the geographic location of the asset.
Royal Ten Cate Annual Report 2007 89

NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT
29.1 Segment information
29.2 Analysis by business segment
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Royal Ten Cate Annual Report 2007
Advanced Textiles
& Composites
Geosynthetics
& Grass
Technical Components/
Holding & Services/
eliminations Consolidated
in millions of euros 2007 2006 2007 2006 2007 2006 2007 2006
Revenues 350.3 279.7 468.3 397.5 67.4 93.3 886.0 770.5
Intercompany sales 1.3 1.0 – – – 1.3 – 1.0 – –
Total revenues 351.6 280.7 468.3 397.5 66.1 92.3 886.0 770.5
Operating result 38.7 20.9 28.3 25.5 2.4 3.7 69.4 50.1
Financial income and expenses – 11.3 – 8.0
Result from associated companies 0.7 2.7 3.4
Result from divested activities 0.3 42.0 0.3 42.0
Profit tax – 11.9 – 11.4
Minority interests -0.1 -0.1 – 0.1 – 0.1
Net profit 46.4 76.0
Assets of segments 247.2 167.7 430.5 266.1 42.9 54.0 720.6 487.8
Investments in other participating interests – – – – 1.3 1.3 1.3 1.3
Total assets 247.2 167.7 430.5 266.1 44.2 55.3 721.9 489.1
Liabilities of segment *) 65.7 56.0 83.9 77.6 261.9 116.6 411.5 250.2
Investments 17.0 11.7 44.9 28.9 1.0 2.4 62.9 43.0
Depreciation and impairment 9.3 5.7 17.9 13.6 1.9 2.8 29.1 22.1
Amortisation
* (excluding intercompany loans)
1.5 0.4 2.1 0.1 – 0.5 3.6 1.0
29.3 Analysis by geographic location Revenues Assets
Investments in tangible &
intangible fixed assets
2007 2006 2007 2006 2007 2006
Netherlands 234.4 222.6 157.8 148.6 24.8 18.0
Rest of Europe 162.4 158.6 153.1 104.2 2.6 2.8
North America 373.6 336.4 206.6 183.0 14.0 18.0
Asia/Australia 115.6 52.9 204.4 53.3 21.5 4.2
Total 886.0 770.5 721.9 489.1 62.9 43.0

30 ACQUISITIONS AND DIVESTMENT OF SUBSIDIARIES
30.1 Acquisitions 2007
On 15 February 2007 the Group acquired 100% of the shares off Roshield A/G of Odense, Denmark for a cash
payment of € 35 million. The acquisition was consolidated in the Group’s accounts from 15 February. The Group’s
revenues would have been € 1.2 million higher if the acquisition had taken place on 1 January 2007. The net
income would not have been materially different. The goodwill paid amounts to € 31.1 million.
On 29 March 2007 the Group acquired the assets and liabilities of Mattex Leisure Industries of Dubai for a
cash payment of $ 175 million. Advance payments for investments in machinery, higher working capital and
an expected earnout of $ 3 million ultimately led to a total acquisition price of $ 189 million. The acquisition
was consolidated in the Group’s accounts from 29 March. If the acquisition had taken place on 1 January,
the revenues of the group would have been € 11 million higher. The goodwill paid amounts to $ 105.3 million
(€ 80.1 million).
On 12 August the Group acquired the shares of Phoenixx, Taunton (MA, USA) for a cash payment of $ 7.25 million
with an earnout arrangement up to a maximum of $ 3 million. The acquisition was consolidated in the Group’s
accounts from 12 August. If the acquisition had taken place on 1 January 2007, the revenues would have been
€ 1.2 million higher. The goodwill paid has been provisionally determined at $ 4.9 million (€ 3.6 million).
The amounts of the acquisitions have been allocated to the identified acquired assets and liabilities, which are
based on the market value.
Royal Ten Cate Annual Report 2007 91

NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT
30.2 Effects of the acquisition of subsidiaries
The effect of the above acquisitions on the assets and liabilities was as follows:
92
Royal Ten Cate Annual Report 2007
Advanced
Textiles &
Composities
Recognised values Fair value adjustments Book value adjustments
Geosynthetics
& Grass Group
Advanced
Textiles &
Composities
Geosynthetics
& Grass Group
Advanced
Textiles &
Composities
Geosynthetics
& Grass Group
Tangible fixed assets 1.7 31.2 32.9 5.5 5.5 1.7 25.7 27.4
Intangible fixed assets 6.9 15.7 22.6 6.9 15.7 22.6 –
Deferred tax receivables 1.1 – 1.1 – 1.1 1.1
Inventories 1.6 8.2 9.8 1.0 1.0 1.6 7.2 8.8
Trade and other receivables 1.5 17.8 19.3 – 1.5 17.8 19.3
Cash and cash equivalents – 0.3 0.3 – 0.3 0.3
Deferred tax liabilities – 1.3 – – 1.3 – 1.3 – 1.3 –
Interest-bearing loans – 0.1 – – 0.1 – – 0.1 – 0.1
Banks, current accounts – 0.9 – – 0.9 – – 0.9 – 0.9
Trade creditors and other payables – 4.8 – 11.4 – 16.2 – – 4.8 – 11.4 – 16.2
NET IDENTIFIABLE ASSETS
AND LIABILITIES 5.7 61.8 67.5 5.6 22.2 27.8 0.1 39.6 39.7
Goodwill on acquisition 34.7 80.1 114.8
Purchase price paid in cash 40.4 141.9 182.3
Acquired cash minus short-term bank debts 0.9 – 0.3 0.6
Cash outflow 41.3 141.6 182.9
30.3 Divestments in 2007
Proceeds
The following interests were sold in 2007:
(including cash)
◾ Business Key on 16 February 2007 (100% interest)
◾ SCI La Domitienne on 8 December 2007
7.2
(100% interest) 0.3
The following companies were closed in 2007:
◾ TenCate Enbi Mexico 0.2
◾ TenCate Nicolon Asia 0.1
7.8

30.4 Divested activities
The effect of the sale of the operations of Business Key and SCI La Domitienne in 2007 on the 2006 and 2007
profit and loss account was as follows:
2007 2006
Revenues 1.4 11.3
Costs of raw materials and manufacturing supplies and work contracted out – 1.0 – 9.1
Other costs – 0.3 – 1.5
Operating result 0.1 0.7
31 PERSONNEL COSTS 2007 2006
Wages and salaries 127.9 125.4
Social charges 31.6 28.8
Costs of option plan 1.1 0.2
Pension costs 4.4 5.0
Temporary personnel 13.3 11.8
Personnel costs 178.3 171.2
The pension costs comprise € 1.2 million (2006: € 2.0 million) in respect of defined benefit pension schemes and
€ 3.2 million (2006: € 3.0 million) in respect of defined contribution schemes (see note 49.3).
32 OTHER OPERATING COSTS
32.1 Government subsidies
The group’s profit and loss account includes € 2.5 million of government subsidies in 2007 (2006: € 1.2 million).
32.2. Research and development
The costs associated with research and development amounted to € 8.2 million in 2007 (2006: € 8.1 million), of
which € 3.2 million (2006: € 3.4 million) has been stated in personnel costs and € 5.0 million (2006: € 4.7 million)
in other operating costs.
Royal Ten Cate Annual Report 2007 93

NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT
32.3 Book value of sale of tangible fixed assets
In 2007 the Group sold buildings and land on which a book profit of € 9.5 million was recorded.
94
Royal Ten Cate Annual Report 2007
2007 2006
Buildings and land 9.5 3.1
Others 0.2 0.6
Result from sale 9.7 3.7
Book value of sold assets 1.4 0.8
Proceeds of sale 11.1 4.5
33 FINANCIAL INCOME AND EXPENSES 2007 2006
Interest income 0.5 0.1
Interest expenses – 11.4 – 7.2
Foreign exchange translation differences – 0.4 – 0.9
– 11.3 – 8.0
34 PROFIT TAX 2007 2006
Profit taxes payable
Current financial year – 15.2 – 14.2
Release of provision in respect of previous years 2.1 1.4
Deferred profit tax
– 13.1 – 12.8
Valuation of timing differences – – 1.0
Use of tax losses 1.2 2.4
1.2 1.4
Total tax charge in profit and loss account – 11.9 – 11.4

Reconciliation with applicable tax rate 2007 2006
% Euro % Euro
Pre-tax result 58.1 42.1
Tax on profit at local profit tax rate 30.1% 17.5 36.2% 15.3
Losses not yet available for set-off 1.5% 0.9 0.6% 0.2
Non-tax deductible costs 0.2% 0.1 1.0% 0.4
Tax-exempt income – 5.6% – 3.3 – 4.2% – 1.7
Use of loss set-off – 2.0% – 1.2 – 5.6% – 2.4
Deferred taxes in connection with change of rates – – 2.3% 1.0
Others – 3.7% – 2.1 – 3.1% – 1.4
Tax charge in profit and loss account 20.5% 11.9 27.2% 11.4
The decrease in the weighted average tax rate from 36.2% to 30.1% is due in particular to the reduction in the
Dutch tax rate from 29.6% to 25.5% and the fact that in 2007 a substantial part of the pretax profit was generated
in Dubai, where no profit tax is levied.
35 RESULT FROM PARTICIPATING INTERESTS
No result from participating interests applied in 2007 (2006: € 3.4 million).
36 RESULT FROM DIVESTED OPERATIONS
See note 30.3.
2007 2006
Business Key 0.2 –
SCI La Domitienne 0.1 –
Synbra Group – 39.3
Plasticum Group – 2.7
TenCate Nicolon Australia – – 0.1
Landscape Solutions – 0.1
Result from divested operations 0.3 42.0
Royal Ten Cate Annual Report 2007 95

Notes to the consolidated balance sheet
in millions of euros
37 TANGIBLE FIXED ASSETS
96
Royal Ten Cate Annual Report 2007
Land. operating
buildings and
dwellings
Plant and
equipment
Others
operating
assets Prepayments Total
Acquisition value:
Balance as at 1 January 2006 124.3 301.8 46.8 12.5 485.4
Changes as a result of consolidations 2.0 2.9 0.7 – 5.6
Investments 5.0 34.5 2.4 0.4 42.3
Changes as a result of deconsolidations – 11.4 – 35.0 – 12.6 – 0.5 – 59.5
Divestments – 2.3 – 2.2 – 0.4 – – 4.9
Exchange rate differences – 4.6 – 9.8 – 0.7 – 0.7 – 15.8
Balance as at 31 December 2006 113.0 292.2 36.2 11.7 453.1
Changes as a result of consolidations 7.6 24.6 0.5 0.8 33.5
Investments 12.4 34.7 3.3 11.1 61.5
Changes as a result of deconsolidations – 1.4 – – 0.4 – – 1.8
Divestments – 3.6 – 3.0 – 0.9 – – 7.5
Exchange rate differences – 3.7 – 12.5 – 0.9 – 0.8 – 17.9
Balance as at 31 December 2007
Depreciation and impairment
124.3 336.0 37.8 22.8 520.9
Balance as at 1 January 2006 54.5 230.1 39.4 – 324.0
Depreciation 4.0 16.1 2.0 – 22.1
Changes as a result of deconsolidations – 4.4 – 32.0 – 10.8 – – 47.2
Divestments – 1.7 – 2.2 – 0.2 – – 4.1
Exchange rate differences – 1.1 – 5.7 – 0.7 – – 7.5
Balance as at 31 December 2006 51.3 206.3 29.7 – 287.3
Changes as a result of consolidations – 0.6 – – 0.6
Depreciation 4.2 20.5 2.1 – 26.8
Impairment – 2.3 – – 2.3
Changes as a result of deconsolidations – 0.4 – – 0.3 – – 0.7
Divestments – 2.5 – 2.7 – 0.9 – – 6.1
Exchange rate differences – 1.2 – 5.7 – 0.5 – – 7.4
Balance as at 31 December 2007 51.4 221.3 30.1 – 302.8
Book value
Balance as at 1 January 2006 69.8 71.7 7.4 12.5 161.4
Balance as at 31 December 2006 61.7 85.9 6.5 11.7 165.8
Balance as at 31 December 2007 72.9 114.7 7.7 22.8 218.1

37.1 Impairment and reversal of impairment
The Group recorded an impairment charge of € 2.3 million in respect of machinery in 2007.
This amount is stated in the consolidated profit and loss account under depreciation and impairment. No impairment
charges were reversed during the year.
37.2 Leased plant and equipment
The Group leases buildings, plant and equipment under a number of financial lease contracts.
As at 31 December 2007 the net book value of these assets was € 1.2 million (31 December 2006: € 2.4 million).
The leased buildings, plant and equipment serve as collateral for the lease liabilities (see note 48).
37.3 Collateral
As at 31 December 2007, as was the case as at 31 December 2006, no land and buildings were encumbered as
collateral for bank loans.
37.4 Depreciation charge
The depreciation charge of € 26.8 million (2006: € 22.1 million) is included in depreciation and impairment in the
profit and loss account.
Royal Ten Cate Annual Report 2007 97

NOTES TO THE CONSOLIDATED BALANCE SHEET
38 INTANGIBLE FIXED ASSETS Goodwill Developments
98
Royal Ten Cate Annual Report 2007
Trademarks.
patents and
other items Total
Cost
Balance as at 1 January 2006 13.3 – 4.0 17.3
Change as a result of consolidation 0.4 – – 0.4
Investments – 0.2 0.5 0.7
Divestments – – – –
Exchange rate differences – 1.1 – – 0.4 – 1.5
Balance as at 31 December 2006 12.6 0.2 4.1 16.9
Change as a result of consolidation 114.8 – 22.6 137.4
Investments – 0.3 1.1 1.4
Change as a result of deconsolidation – 1.0 – – – 1.0
Divestments – – – 0.1 – 0.1
Exchange rate differences – 9.1 – – 1.9 – 11.0
Balance as at 31 December 2007 117.3 0.5 25.8 143.6
Amortisation and impairment
Balance as at 1 January 2006 2.8 – 0.7 3.5
Change as a result of consolidation 0.2 – – 0.2
Amortisation and Impairment 0.5 – 0.5 1.0
Divestments – – – –
Exchange rate differences – 0.2 – – – 0.2
Balance as at 31 December 2006 3.3 – 1.2 4.5
Amortisation – 0.1 3.5 3.6
Change as a result of deconsolidation – 0.9 – – – 0.9
Divestments – – – –
Exchange rate differences – 0.2 – – 0.2 – 0.4
Balance as at 31 December 2007 2.2 0.1 4.5 6.8
Book value
Balance as at 1 January 2006 10.5 – 3.3 13.8
Balance as at 31 December 2006 9.3 0.2 2.9 12.4
Balance as at 31 December 2007 115.1 0.4 21.3 136.8
38.1 Amortisation and Impairment
The Group recognised no impairment charges in 2007 (2006: € 0.5 million).

38.2 Testing of the impairment for cash generating units which include goodwill
The following units include goodwill items:
2007 2006
Advanced Textiles & Composites (TenCate Advanced Armour France and TenCate
Advanced Armour Denmark/Phoenixx USA)
Geosynthetics & Grass (Thiolon USA/Geofabrics Australasia/
35.7 1.2
TenCate Thiolon Middle East/Geosynthetics North America) 79.4 8.1
115.1 9.3
The Group tested the existing goodwill for impairment in 2007. The value in use has been determined on the
basis of future cash flows, based on current results and a five-year forecast. For the period after five years
no growth percentage is applied. The discount rate used is 9.5%. The net rea lizable value is the market value
minus sale costs. Both values are above the book value of the companies including goodwill. with the result that
no impairment has been recognised. The changes in 2007 relate largely to the acquired associated companies
amounting to € 114.8 million (note 30.2).
38.3 Amortisation and impairment
The amortisation of € 3.6 million (2006: € 1.0 million) is included in the ‘Amortisation’ item in the profit and
loss account.
39 OTHER PARTICIPATING INTERESTS
The main other participating interests included below are Greenfields bv (Kampen. 20%) and Landscape
Solutions (Goirle. 20%).
Other
companies Loans Total
Balance as at 1 January 2007 1.3 – 1.3
No changes – – –
Balance as at 31 December 2007 1.3 – 1.3
The other participating interests are valued at cost.
40 OTHER LONG-TERM RECEIVABLES AND INVESTMENTS
The main long-term receivables and investments relate to an investment of pension assets at TenCate Geosynthetics
North America (€ 2.6 million) and an advance payment in connection with long-term leases in China and
Malaysia (€ 1.8 million).
Royal Ten Cate Annual Report 2007 99

NOTES TO THE CONSOLIDATED BALANCE SHEET
41 DEFERRED PROFIT TAX RECEIVABLES AND LIABILITIES
The deferred profit tax receivables and liabilities stated in the balance sheet are attributable to the following
items:
100 Royal Ten Cate Annual Report 2007
Assets Liabilities Net
2007 2006 2007 2006 2007 2006
Tangible fixed assets – 0.1 – 3.4 – 2.5 – 3.4 – 2.4
Intangible fixed assets 0.7 0.4 – 2.2 – 2.6 – 1.5 – 2.2
Financial fixed assets 0.5 0.3 – 0.2 – 0.2 0.3 0.1
Inventories 2.0 1.6 – – 2.0 1.6
Other receivables 0.3 0.3 – – 0.3 0.3
Pension provisions 6.0 7.7 – – 6.0 7.7
Other provisions 4.9 3.6 – – 0.3 4.9 3.3
Tax value of loss carry-forwards 2.9 2.3 – – 2.9 2.3
Others 1.2 1.0 – – 1.2 1.0
Deferred profit tax receivables/liabilities 18.5 17.3 – 5.8 – 5.6 12.7 11.7
Balance of receivables and liabilities
Net deferred profit tax receivables/
– 4.9 – 5.4 4.9 5.4 – –
liabilities 13.6 11.9 – 0.9 – 0.2 12.7 11.7
41.1 Deferred profit tax receivables not shown in the balance sheet
As at 31 December 2007 there was € 16.0 million (2006: € 13.7 million) of unused losses available for set-off
(tax € 3.1 million). No deferred profit tax receivable was included in respect of this amount because it is unlikely
that the Group will be able to take advantage of future taxable profit.
42 INVENTORIES 2007 2006
Raw materials and manufacturing supplies 49.1 40.7
Semi-manufactures 39.0 32.9
Finished products 88.1 84.1
Inventories 176.2 157.7

43 TRADE DEBTORS
Trade debtors are stated at nominal value after deduction of provisions deemed necessary. Transfers to
provisions for doubtful debts are included in the profit and loss account under work contracted out and other
external expenses.
44 OTHER RECEIVABLES 2007 2006
Receivable in respect of other taxes 2.3 2.6
Other receivables and prepayments 14.3 11.9
Other receivables 16.6 14.5
The other taxes receivable relate mainly to reclaimable VAT.
45 CASH AND CASH EQUIVALENTS 2007 2006
Bank balances 4.7 6.6
Cash balances 0.1 0.1
Cash and cash equivalents 4.8 6.7
Banks. current accounts – 12.5 – 29.1
Cash in the cash flow statement – 7.7 – 22.4
At the end of 2007 and 2006 all amounts were freely available.
46 EQUITY
A statement of changes in Group equity can be found on page 76.
46.1 Ordinary shares 2007 2006
number x 1,000
Outstanding as at 1 January 2007 21,063 20,784
Issue of shares 2,106 –
Issued stock dividend 387 279
Outstanding as at 31 December 2007 23,556 21,063
The authorised share capital amounts to € 200 million divided into 80 million shares of a par value of € 2.50.
The issued capital as at 31 December 2007 amounts to 23,556,158 ordinary shares of a par value of € 2.50 (as at
31 December 2006: 21,063,292 ordinary shares of a par value of € 2.50).
Royal Ten Cate Annual Report 2007 101

NOTES TO THE CONSOLIDATED BALANCE SHEET
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. The Executive Board
proposes that as at 31 December 2007 a dividend of € 0.80 (2006: € 0.70) per ordinary share be paid as a charge
against reserves, payable at shareholders’ discretion in cash or in shares. The proposed dividend forms part of
the undistributed result on 31 December 2007.
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 a period of 18 months ending on 30 September 2008. 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 2007 2006
number x 1,000
Outstanding as at 1 January 509 207
Repurchased shares 175 345
Exercise of options – 125 – 38
Issued in connection with share plan – 3 – 5
Outstanding as at 31 December 556 509
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. The shares repurchased in 2007 were
purchased at an average price of € 23.99.
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 a period of 18 months ending on 30 September 2008. 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.
102 Royal Ten Cate Annual Report 2007

46.4 Retained earnings of associated companies
The reserve has been formed in respect of associated companies and joint ventures in which the free disposal
of retained earnings is subject to restrictions.
46.5 Translation differences
The reserve for translation differences comprises all exchange rate differences which arise due to the
translation of the financial statements of foreign activities outside the eurozone. These exchange rate
differences (translation risk) are carried in equity. The accumulation of the respective amount began on
1 January 2004.
46.6 Undistributed Result
Subsequent to the balance sheet date the following dividend has been proposed. which has not yet been
included in the balance sheet.
2007 2006
€ 0.80 per ordinary share (2006: € 0.70) 18.8 16.2
46.7 Objective with regard to equity
The objective with regard to the equity 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 the financing, in accordance with the covenants relating to the syndicated loan, the longer-term
objective is a ratio of net debt to EBITDA of a maximum of 2.5. Following larger acquisitions, this ratio may be
temporarily higher, but in no case greater than 3.5. The calculation as at 31 December 2007 and 2006 can be
specified as follows:
31 December
2007
31 December
2006
Long-term interest-bearing liabilities 222.3 63.5
Short-term portion of long-term liabilities 0.4 1.3
Current accounts and short-term interest-bearing debts 12.5 29.1
Total debt 235.2 93.9
Minus: cash and cash equivalents 4.8 6.7
Net debt 230.4 87.2
EBITDA* 105.7 72.5
Net debt / EBITDA 2.18 1.21
* In accordance with the covenant relating to the loan facility, the EBITDA for acquired and divested businesses is annualised. The effect of
this extrapolation is a € 3.6 million increase in EBITDA.
Royal Ten Cate Annual Report 2007 103

NOTES TO THE CONSOLIDATED BALANCE SHEET
47 EARNINGS PER SHARE
47.1 Ordinary earnings per share
The calculation of the ordinary earnings per share as at 31 December 2007 is based on the net profit attributable
to holders of ordinary shares of € 46.4 million (2006: € 76.0 million) and a weighted average number of outstanding
ordinary shares during the 2007 financial year of 22,797,063 (2006: 20,749,431), calculated as follows:
104 Royal Ten Cate Annual Report 2007
2007 2006
Net profit for the financial year attributable to holders of ordinary shares 46.4 76.0
Weighted average number of ordinary shares 2007 2006
number x 1,000
Outstanding ordinary shares on 1 January 21,063 20,784
Issue of shares 1,847 –
Effect of ordinary shares held (including repurchased shares) – 535 – 338
Effect of shares issued in connection with stock dividend 387 279
Effect of shares issued as a result of exercised option rights 33 21
Effect of shares issued as a result of share savings plan 2 3
Weighted average number of ordinary shares 22,797 20,749

47.2 Diluted earnings per share
The calculation of the diluted earnings per share as at 31 December 2007 is based on the net profit of € 46.4
million (2006: € 76.0 million) attributable to the holders of ordinary shares and the weighted average number
of outstanding ordinary shares during the 2007 financial year of 22,966,852 (2006: 21,264,631). calculated as
follows:
2007 2006
Net profit for the financial year attributable to holders of ordinary shares 46.4 76.0
Weighted average number of ordinary shares 2007 2006
number x 1,000
Weighted average number of ordinary shares 22,797 20,749
Effect of outstanding option rights 170 515
Weighted average number of ordinary shares (after dilution) 22,967 21,264
48 LONG-TERM DEBTS 2007 2006
Bank loans 219.5 59.6
Financial lease liabilities 1.1 2.3
Other loans 2.1 2.9
222.7 64.8
Less: repayment of loans in forthcoming year – 0.4 – 1.3
Long-term debts 222.3 63.5
Royal Ten Cate Annual Report 2007 105

NOTES TO THE CONSOLIDATED BALANCE SHEET
48.1 Conditions and repayment schedule
106 Royal Ten Cate Annual Report 2007
2007
Total
2008
< 1 year
2009
1 – 2 years
2010/12
2 – 5 years
2013 ff.
> 5 years
Bank loans
euro – Euribor + margin 214.1 – – 214.1 – 52.6
USD – variable interest 2.7 – – – 2.7 3.1
AUD – variable interest 2.6 0.1 – 1.8 0.7 3.9
Financial lease liabilities
euro – fixed interest 7.00% – – – – – 0.1
euro – fixed interest 6.51% – – – – – 1.0
euro – fixed interest 4.30% 1.1 0.1 0.2 0.7 0.1 1.2
euro – fixed interest 6.96% 0.1 – – 0.1 – –
Other loans
euro – fixed interest 0.5 – 3.0% 0.2 0.2 – – – 1.0
euro – fixed interest 1.00% 1.9 – – 1.9 – 1.9
Long-term debts 222.7 0.4 0.2 218.6 3.5 64.8
The euro loan with variable interest (Euribor + margin) is a syndicated loan of € 250 million concluded with a
syndicate of ten banks on 16 February 2007. € 215 million of this facility was drawn as at 31 December 2007.
The term of the loan is five years (up to 16 February 2012) with the possibility of extension up to seven years.
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 debt/EBITDA ratio. which is calculated quarterly in respect of the preceding
12 months. The interest margin above Euribor will be between 0.30% and 0.85%. At the end of 2007 the
margin was 0.50%.
The aforementioned syndicated loan is subject to a number of covenants, the principal of which are:
◾ total net debt/EBITDA + result from associated companies less than 3, with the possibility of an increase to
3.5 following an acquisition;
◾ EBITDA/net interest greater than 4;
◾ joint guarantee of operating companies with total assets of at least 60% of the TenCate total.
TenCate fulfilled these conditions as at the balance sheet date.
In the event of a change of control of the company. the syndicated loan of € 250 million is immediately
repayable.
The USD loan with variable interest concerns a USD 4 million loan from the Development Authority of Pike
County Industrial Revenue Bonds. Repayment is due in full in 2018.
2006
Total

The AUD loan with a variable interest rate was granted by Westpac Banking Corporation. It has been extended
and has a residual term of six years.
The euro loans with a fixed interest rate between 0.5% and 3% were granted by Forschungsförderungsfond,
Vienna and Oberbank AG, Linz.
Of the total of long-term loans, 98% have variable interest. The risk associated with this variability is hedged by
means of a number of instruments (caps, swaps).
49 PENSION LIABILITIES 2007 2006
Defined benefit schemes
Discounted value of covered liabilities 298.6 316.1
Market value of fund investments 304.7 302.8
Discounted value of net liabilities – 6.1 13.3
Unstated actuarial profits and losses 26.8 11.0
Total defined benefit schemes 20.7 24.3
Other liabilities in respect of pensions 7.8 7.5
Pension liabilities 28.5 31.8
49.1 Changes in the valuation of liabilities as at the balance sheet date 2007 2006
Balance of liabilities as at 1 January 316.1 326.5
Service costs 3.7 4.3
Members’ contributions 3.1 3.2
Interest costs 14.6 13.8
Benefits paid – 12.9 – 14.3
Curtailment income – – 3.9
Actuarial differences – 26.0 – 13.5
Balance as at 31 December 298.6 316.1
Royal Ten Cate Annual Report 2007 107

NOTES TO THE CONSOLIDATED BALANCE SHEET
49.2 Investments 2007 2006
Balance as at 1 January 302.8 289.1
Expected return 17.1 14.3
Employer’s contribution 4.8 4.8
Members’ contributions 3.1 3.2
Actuarial profits and losses – 10.3 5.7
Benefits paid – 12.8 – 14.3
Balance as at 31 December 304.7 302.8
Analysis of investments as at 31 December 2007 2006
Bonds 158.6 158.6
Shares 102.1 105.0
Hedge funds 16.7 15.4
Real estate 24.0 23.3
Cash 3.3 0.5
Pension fund investments 304.7 302.8
49.3 Charge stated in profit and loss account 2007 2006
Service costs – 3.7 – 4.3
Interest on the liabilities – 14.6 – 13.8
Expected return on fund investments 17.1 14.3
Curtailment income – 3.9
Pension costs in respect of past service – 1.8
Pension income/charges – 1.2 1.9
The pension charges have been stated in the 2007 profit and loss account in an amount of € 1.2 million under
personnel costs. In 2006 the pension charges were stated in the profit and loss account in an amount of € 2.0
million under personnel costs, while the curtailment income (€ 3.9 million), resulting from the sale of Plasticum
on 25 April 2006, was stated in the result from divested operations. At the end of 2005 an amount of € 1.8
million in respect of pension agreements relating to the transitional scheme in the new pension scheme was
included in actuarial differences as at 1 January 2006. As a result of the final calculations, this amount was
released in 2006 and credited to the result under personnel costs.
The actual return on fund investments amounts to € 6.8 million (2006 € 20.0 million).
108 Royal Ten Cate Annual Report 2007

Netherlands
The defined pension scheme concerns 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 other liabilities in respect of pensions comprise defined contribution pension schemes and/or old-age provisions.
One of these defined contribution schemes is a 401K (savings) scheme in the United States. The contribution
to this scheme is based on agreed rules.
49.4 Liability in respect of defined benefit schemes
The main actuarial assumptions as at the balance sheet date (in weighted averages):
2007 2006
Discount rate as at 31 December 5.5% 4.6%
Expected return on fund investments as at 31 December 5.9% 5.7%
Future wage increases 2.7% 2.4%
Future pension increases 2.0% 1.7%
Assumptions with regard to future mortality figures are based on published statistical data and mortality tables.
The mortality tables used are the GBM and GBV survival tables for 2000 – 2005 with an age reduction of three
years for men and zero years for women. The age difference between men and women is set at three years.
A loading of 3.5% has been applied for future improvement in life expectancy on the liability and 6.0% on
the service cost. The total expected long-term return on investments is 5.9%. This percentage is based on the
portfolio as a whole and not on the sum of the returns in separate investment categories. The expected return
is based on non-corrected historical returns. A 0.1% increase or decrease in the discount rate results in an
increase/decrease of € 0.1 million in annual charges and of € 4.1 million in the liability.
Royal Ten Cate Annual Report 2007 109

NOTES TO THE CONSOLIDATED BALANCE SHEET
Historical information 2007 2006 2005 2004
Discounted value of covered liabilities 298.6 316.1 326.5 302.4
Market value of fund investments 304.7 302.8 289.1 265.9
Discounted value of net liabilities
Experience adjustments arising on liabilities of the
– 6.1 13.3 37.4 36.5
scheme* 2.7 – 1.6 – –
Experience adjustments arising on fund investments – 10.3 5.7 15.7 5.8
* No figures are available for 2005 and 2004.
The Group expects to contribute € 4.9 million to defined benefit schemes in 2008 (2007: € 4.8 million).
50 PROVISIONS
110 Royal Ten Cate Annual Report 2007
Guarantee/
claims
Other
personnel
liabilities Environment Other Total
Balance as at 1 January 2007 8.7 4.6 1.8 2.6 17.7
Formed as charge against result 1.5 0.3 0.2 0.6 2.6
Released to result – 1.9 – 0.1 – – 0.8 – 2.8
Expenditure in current year – 2.1 – 0.2 – – 0.2 – 2.5
Exchange rate differences – 0.2 – – – – 0.2
Balance as at 31 December 2007 6.0 4.6 2.0 2.2 14.8
Of which short-term
as at 31 December 2006 4.9 – – 0.9 5.8
as at 31 December 2007 2.6 – – 0.8 3.4
The amount released to the result has been included as follows in the profit and loss account:
Personnel costs 0.7
Other operating costs 2.1
Total 2.8
The guarantee provision relates to goods and services supplied and the provision for claims relates to damage
claims and possible legal costs.
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).
The future additional premium payable under the ‘PEMBA’ act on premium differentiation and market forces in
incapacity insurance has been released (2006: € 0.7 million).

Other information
51 FINANCIAL INSTRUMENTS
As part of the normal business operations, the Group incurs liquidity, credit, interest and currency risks. The risk
of fluctuations in exchange rates and interest rates is hedged using derivatives.
51.1 Liquidity risk
The liquidity risk is the risk of TenCate being unable to meet its liabilities when they fall due. TenCate’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.
The contractual term of the financial liabilities as at 31 December 2007, including expected interest payments,
can be analysed as follows:
Book value
Contractual
cash flow
2008
< 1 year
2009
1-2 years
2010/12
2-5 years
2013 ff.
> 5 years
Financial liabilities
(excluding derivatives)
Long-term debts 222.7 268.1 – 11.3 – 11.3 – 240.8 – 4.7
Banks, current accounts
Trade and other creditors,
12.5 – 12.5 – 12.5 – – –
excluding derivatives 128.5 – 128.5 – 128.5 – – –
Financial liabilities
(including derivatives)
Interest rate swaps
Forward foreign exchange
– 0.1 0.3 0.3 – – –
contracts – 0.8 1.0 0.6 0.4 – –
Forward/currency swap contracts 0.1 – 0.1 – 0.1 – – –
Total 362.9 – 407.9 – 151.5 – 10.9 – 240.8 – 4.7
51.2 Credit risk
The management has drawn up a credit policy and the credit risk is constantly monitored.
In the case of all supplies above a certain amount, the customer is subjected to a credit assessment and, where
possible, the debtor position is insured. All European operating companies, as well as a number of American
and Asian companies, have credit insurance.
On the balance sheet date there were no major concentrations of credit risk. The residual credit risk is the
balance sheet value of each financial asset, after deduction of derivatives.
Royal Ten Cate Annual Report 2007 111

OTHER INFORMATION
The book value of the financial assets reflects the maximum exposure to credit risk. The maximum exposure can
be defined as follows:
112 Royal Ten Cate Annual Report 2007
31 December
2007
31 December
2006
Trade debtors and other (long-term) receivables 163.9 127.3
Cash and cash equivalents 4.8 6.7
Forward foreign exchange contracts and options 2.3 0.5
Interest rate swaps 0.3 0.2
Interest rate caps 0.8 0.6
Total 172.1 135.3
The age of the trade debtors and the provision for bad debts can be analysed as follows:
2007 2006
Gross Impairment Gross Impairment
0-60 days 143.7 0.5 107.8 0.5
60-120 days 2.1 0.4 1.6 0.3
120-360 days 1.3 0.9 1.0 0.6
Over 360 days 2.2 1.7 1.7 1.7
Balance as at 31 December 149.3 3.5 112.1 3.1
The movements in the provision for trade debtors are as follows:
2007 2006
Balance as at 1 January 3.1 4.2
Change as a result of consolidations/deconsolidations – 0.1 –
Formed as charge against result 2.0 1.7
Released to result – 1.0 – 0.9
Written off during the year – 0.3 – 1.6
Exchange rate differences – 0.2 – 0.3
Balance as at 31 December 3.5 3.1

51.3 Interest rate risk
The policy with regard to interest rate risks is stated in the risk section on page 31 of this report.
The aim of the interest rate policy is to limit the finance charges as far as possible. Interest rate instruments
can be used in order to adjust the fixed or variable interest character of finance to the required profile.
The Group has entered into interest rate swaps and a number of caps in order to fulfil this purpose within the
policy of the Group.
The following interest rate instruments were outstanding at the end of 2007:
◾ interest rate swap to 31-12-08: € 25 million received variable: payment 3.38% fixed
◾ interest rate swap to 02-01-18: USD 4 million received variable: payment 4.47% fixed
◾ interest rate swap to 05-02-08: € 5 million received variable: payment 3.46% fixed
◾ interest rate cap 30-12-05 to 31-12-09: € 25 million 3.5%
◾ interest rate cap 30-03-07 to 30-12-08: € 75 million 4.5%
◾ interest rate cap 31-12-08 to 30-12-09: € 40 million 4.5%
◾ interest rate cap 31-12-09 to 30-12-10: € 15 million 4.5%
◾ interest rate cap 14-06-07 to 31-12-08: € 30 million 4.5%
The Group classifies the interest rate swaps and the interest rate caps as cash flow hedging and values
them at market value. The net market value of the swaps as at 31 December 2007 of € 0.1 million comprises
€ 0.3 million included under other receivables and € 0.2 million included under trade creditors and other payables.
The net market value of the caps amounting to € 0.8 million is included under other receivables.
51.4 Currency risk
The Group incurs currency risks on sales and purchases denominated in currencies other than the euro.
The currencies which give rise to this risk are primarily the US dollar, the UAE dirham and, to a lesser extent,
the Singapore dollar, the Chinese renminbi and the Malaysian ringgit.
Transaction risks
The Group hedges all trade receivables and debts denominated in foreign currencies. To that end it uses foreign
exchange forward contracts and options. Most forward contracts have a term of less than one year after the
balance sheet date. If necessary they are extended.
Competition risks
The Group also hedges the estimated currency risk of the expected purchases and sales in the subsequent six
months. Currency options are used for this purpose.
With regard to monetary assets and liabilities held in currencies other than the euro, the Group ensures that
the net risk remains at an acceptable level, by purchasing or selling foreign currencies as necessary in the spot
market in order to eliminate short-term imbalances.
The principal of the USD, and AUD loans of the Group is not hedged, because these loans have been drawn by
subsidiaries which have corresponding assets in the same currency.
Royal Ten Cate Annual Report 2007 113

OTHER INFORMATION
Additional note on currency risk
TenCate’s exposure to currency risks can be analysed as follows:
114 Royal Ten Cate Annual Report 2007
31 December 2007 31 December 2006
USD GBP EUR USD GBP EUR
Transaction risk – 2.5 5.1 – 9.8 – 3.0 0.9 – 0.6
Competition risk 4.0 2.2 15.2 8.2 1.9 0.9
Risk before hedging 1.5 7.3 5.4 5.2 2.8 0.3
Forward contracts – 0.6 – 6.7 7.3 2.3 – 0.6 1.6
Option contracts 0.5 – 0.9 6.1 – 4.2 – 1.7 – 2.3
Risk after hedging 1.4 – 0.3 18.8 3.3 0.5 – 0.4
The foreign currencies have been converted into euros at the balance sheet rate.
The transaction risk in USD and EUR relates respectively to debts in USD and EUR of operating companies
outside the dollar and euro zones. The debt in euros mainly concerns TenCate Thiolon Middle East. The transaction
risk in GBP concerns GBP receivables of operating companies outside the United Kingdom, particularly
the armour companies in France and Denmark.
The competition risk concerns the balance of expected revenues and costs in the stated currencies of operating
companies located outside the respective regions. The exposure in EUR mainly concerns TenCate Thiolon Middle
East and was rectified at the beginning of January 2008.
51.5 Future transactions
The Group classifies foreign exchange forward contracts and options to hedge future transactions as cash flow
hedging and values them at market value. The net market value of forward contracts and options to hedge future
transactions as at 31 December 2007 amounted to € 2.1 million, of which € 2.3 million was included under other
receivables and € 0.2 million under trade creditors and other payables.
51.6 Assets and liabilities included in the balance sheet
Changes in the market 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 market 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 (see note 33).

51.7 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.
The effect of a general rise of one percentage point in the interest rate on the pre-tax result in 2007 is estimated
at € 0.4 million negative (2006: € 0.7 million). This calculation takes account of the concluded interest
rate swaps or caps.
A general rise of one percentage point in the value of the euro against other currencies would have had no
effect on the pre-tax result in 2007 (2006: € 0.2 million). Existing options and forward contracts have been taken
into account in this calculation.
A general rise of one percentage point in the value of the euro against other currencies would have reduced the
equity by approximately € 2.1 million (2006: € 0.7 million) as a result of translation differences.
51.8 Estimate of market value
Details are given below of the main methods and assumptions used in estimating the market value of financial
instruments appearing in the statement.
Foreign currency forward contracts are valued on the basis of quoted market prices. In the case of interest rate
swaps, bank statements are used.
The market 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 market 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 market value.
52 LIABILITIES NOT SHOWN IN THE BALANCE SHEET
Operational lease as lessee
Payments due under non-cancellable operational lease agreements are as follows:
2007 2006
Less than 1 year 4.7 3.8
Between two and five years 10.7 8.5
More than five years 15.6 8.5
31.0 20.8
The Group leases buildings, plant, vehicles and office equipment under operational leases. The leased buildings
have a term of 10 to 15 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.
Royal Ten Cate Annual Report 2007 115

OTHER INFORMATION
53 INVESTMENT LIABILITIES
In 2007 the Group entered into contractual liabilities for the purchase of tangible fixed assets amounting to
€ 47.7 million (2006: € 31.5 million). Of this, € 22.8 million has already been prepaid and included under tangible
fixed assets.
54 CONTINGENT LIABILITIES
The Group has received claims for damages arising from the conduct of business. Provisions for these have
been formed to the extent necessary. A claim for damages has been lodged against Royal Ten Cate nv 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. On 24 May 2002 the district court of Almelo dismissed the claim in its entirety. In a judgment on
10 February 2004 the court of appeal of Arnhem dismissed the claim in respect of the outsourcing agreement
and referred the claim in respect of the management agreement back to the plaintiff, requiring the latter to
substantiate its loss before the court. On 10 May 2004 both Royal Ten Cate and the receiver of United Fabrics
lodged appeals in cassation against the appeal court’s judgment. The Supreme Court issued a ruling on 7 April
2006 upholding the appeal court’s judgment. The claim in respect of the outsourcing agreement has thus permanently
lapsed. There remains a damages assessment procedure with regard to the management agreement.
Royal Ten Cate considers this claim unfounded and is contesting it. The attachment of the Synbra shares was
lifted in 2006 prior to the sale of this associated company, in exchange for a bank guarantee of € 1.8 million.
There were no new developments to report in these proceedings at the end of 2007.
55 POST BALANCE SHEET EVENTS
A commentary on events subsequent to the balance sheet date can be found on page 127.
56 RELATED PARTIES
56.1 Identity of related parties
Related parties concern relationships between the Group and its subsidiaries, the associated companies, a joint
venture and the executive and supervisory directors.
56.2 Directors’ remuneration
The remuneration of the members of the Executive Board was as follows:
L. de Vries J. Wegstapel
1
P.H. van der Vorm
2
in thousands of euros 2007 2006 2007 2006 2007 2006
Periodic remuneration 461 421 259 – 57 300
Results-related pay 231 210 – – – –
Pension costs 413 282* 40 – – –
* Adjusted for comparison purposes.
1
As at 29 March 2007.
1,105 913 299 – 57 300
2 Up to and including 29 March 2007.
116 Royal Ten Cate Annual Report 2007

In addition to the above pension costs, costs of € 110,000 were incurred in 2007 (2006: € 57,000) for repairs in
respect of the Early Retirement (Pre-pension and Life Course Savings) Act. As at 31 December 2007, Mr De Vries
held 124,928 shares in the company (31 December 2006: 44,922 shares).
Messrs De Vries and Wegstapel are participating in the Group’s share option plan. See also note 67.
The remuneration of the members of the Supervisory Board was as follows:
in euros
2007 2006
A.W. Veenman – Chairman1, 2 38,154 32,700
P.P.A.I. Deiters – Vice-Chairman1 29,343 25,900
F.A. van Vught2, * 23,532 19,100
C.W. Versteeg 20,535 19,100
E. ten Cate 1, * 23,532 19,100
1 Member of the Financial Committee.
2 Member of the combined Remuneration, Selection and Appointments Committee.
* Chairman.
The members of the Supervisory Board held no shares or option rights of Royal Ten Cate at the end of 2007.
56.3 Operating companies
A list of (significant) operating companies and associated companies can be found inside the back cover of this
report.
57 ESTIMATES AND JUDGMENTS FORMED BY THE MANAGEMENT
The Executive Board and the Financial Director have 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.
With regard to the pensions, the main actuarial assumptions are stated in note 49.4. 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 and goodwill, 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 2007.
135,096 115,900
Royal Ten Cate Annual Report 2007 117

Company financial statements
58 COMPANY PROFIT AND LOSS ACCOUNT 2007 2006
in millions of euros
Result from associated companies after tax 46.6 31.2
Result from divested operations after tax – 39.2
Other results after tax – 0.2 5.6
NET RESULT 46.4 76.0
59 COMPANY BALANCE SHEET BEFORE APPROPRIATION OF PROFIT note 2007 2006
in millions of euros
FINANCIAL FIXED ASSETS 60
Participating interests in operating companies 336.1 186.1
Other participating interests 1.3 1.3
Loans to operating companies 210.3 140.1
Deferred profit tax receivables 3.7 2.6
Other receivables – 0.1
551.4 330.2
CURRENT ASSETS
Due from operating companies 2.1 0.5
Other receivables 3.2 2.0
118 Royal Ten Cate Annual Report 2007
5.3 2.5
TOTAL ASSETS 556.7 332.7
EQUITY
Share capital 61 58.9 52.7
Share premium reserve 64 50.7 6.3
Statutory reserves 65 – 19.5 – 2.0
Other reserves 66 173.6 105.7
Undistributed Result 46.4 76.0
310.1 238.7
PROVISIONS 68 3.3 3.0
LONG-TERM LIABILITIES 69 223.3 56.0
SHORT-TERM LIABILITIES 70 20.0 35.0
TOTAL EQUITY AND LIABILITIES 556.7 332.7

Notes to the company financial statements
General
Accounting principles
In determining the accounting principles for its parent company financial statements, Royal Ten Cate nv 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 exerted are
valued in accordance with the net asset value 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 nv in the results of these
companies. Results from transactions involving a transfer of assets and liabilities between Royal Ten Cate and
its associated companies and between individual associated companies are not included to the extent that they
can be considered to be unrealised.
60 FINANCIAL FIXED ASSETS
Interest in
operating
companies
Other
participating
interests
Loans to
operating
companies
Deferred tax
receivables Receivables Total
Balance as at 1 January 186.1 1.3 140.1 2.6 0.1 330.2
Acquisitions 140.5 140.5
Sales – 0.3 – 0.3
Translation differences – 18.8 – 11.9 – 30.7
Loans granted – 199.9 199.9
Repayment of loans – – 117.8 – 0.1 – 117.9
Result from associated companies 46.6 46.6
Dividend of associated companies – 18.0 – 18.0
Added to result – 1.1 1.1
Balance as at 31 December 336.1 1.3 210.3 3.7 – 551.4
Royal Ten Cate nv is at the head of the Group and has capital interests in the operating companies stated on the
cover.
Royal Ten Cate Annual Report 2007 119

NOTES TO THE COMPANY FINANCIAL STATEMENTS
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 76.
62 CALLED AND PAID-UP CAPITAL 2007 2006
Authorised share capital 200.0 200.0
Of which not issued 141.1 147.3
58.9 52.7
63 ORDINARY SHARES 2007 2006
The authorised share capital consists of:
80,000,000 ordinary shares of € 2.50 200.0 200.0
Balance as at 1 January 2007 2006
Ordinary shares 21,063,292 and 20,784,472 52.7 52.0
Issued shares 2,106,329 5.3 –
Issued stock dividend 386,537 and 278,820 0.9 0.7
Issued share capital as at 31 December 58.9 52.7
64 SHARE PREMIUM RESERVE 2007 2006
Balance as at 1 January 6.3 7.0
Premium on issued shares 45.3 –
Issued stock dividend – 0.9 – 0.7
Balance as at 31 December 50.7 6.3
The share premium reserve is available for distribution to shareholders.
120 Royal Ten Cate Annual Report 2007

65 STATUTORY RESERVES 2007 2006
65.1 Retained earnings of associated companies
Balance as at 1 January – 23.9
Added from appropriation of profit in respect of 2006 and 2005 1.3 4.4
Transfer to other reserves in connection with sale of associated company – – 28.3
Balance as at 31 December 1.3 –
This reserve has been created for associated companies and joint ventures where free disposal of retained
earnings is subject to restriction.
65.2 Translation differences 2007 2006
Balance as at 1 January – 2.0 4.6
Change in 2007 and 2006 – 18.8 – 6.2
Released to result in connection with sale of associated company – – 0.4
Translation differences as at 31 December – 20.8 – 2.0
Balance of statutory reserve as at 31 December – 19.5 – 2.0
66 OTHER RESERVES 2007 2006
Balance as at 1 January 105.7 63.8
Added from 2006 and 2005 result 70.0 20.3
Transfer from retained earnings of associated companies – 28.3
Repurchase of own shares for share savings plan/option plan – 4.2 – 7.2
Share and option plans 1.1 0.2
Issue of repurchased shares for share savings plan/option plan 1.0 0.3
Other reserves as at 31 December 173.6 105.7
67 OPTION PLAN
Since 2000 Royal Ten Cate has operated a revised 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. If after three years a specified performance level has been
attained, the options confer the right to acquire a € 2.50 ordinary share at the option exercise price.
Royal Ten Cate Annual Report 2007 121

NOTES TO THE COMPANY FINANCIAL STATEMENTS
The performance condition is that the earnings per share over the previous three years must have increased at
least by a percentage equal to inflation plus 3% per year. The exercise period of the option is between the third
and sixth years after the conditional granting of the option rights. The 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 termination of employment.
In principle options amounting to approximately 1% 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 2008
On 26 February 2008 the intention was to grant 267,000 conditional options at the average market price during
the five stock exchange trading days following publication of the annual results on 27 February 2008. The distribution
is as follows:
27-02-2008 * 28-02-2007
Members of the Executive Board 92,000 60,000
Management and management support staff 175,000 145,000
* Provisional.
267,000 205,000
67.2 Statement of movements in options of the Executive Board in 2007
Issued on Term until
122 Royal Ten Cate Annual Report 2007
Number
of options
Exercise
price
Exercised/
lapsed
to 2006
Exercised
in 2007
Lapsed
in 2007
Outstanding
31-12-2007
Exercisable
31-12-2007
27-02-2002 27-2-2008 40,000 6.42 – 40,000 – – –
25-02-2003 25-2-2009 40,000 6.18 – 40,000 – – –
25-02-2004 25-2-2010 40,000 10.29 – – – 40,000 40,000
22-02-2005 22-2-2011 50,000 15.17 – – – 50,000 –
01-03-2006 01-3-2012 60,000 23.63 – – – 60,000 –
28-02-2007 28-2-2013 60,000 25.77 – – – 60,000 –
290,000 – – 80,000 – 210,000 40,000
26-02-2008 26-2-2014
approx.
92,000
The option series from 2002 to 2007 inclusive concern only Mr De Vries. The grant in 2008 concerns Mr De Vries
(60,000 options) and Mr Wegstapel (32,000).

67.3 Statement of movements in options of management and management support staff in 2007
Issued on Term until
Number
of options
Exercise
price
Exercised/
lapsed
to 2006
Exercised
in 2007
Lapsed
in 2007
Outstanding
31-12-2007
Exercisable
31-12-2007
27-2-2002 27-2-2008 40,000 6.42 38,400 800 – 800 800
25-2-2003 25-2-2009 48,200 6.18 38,200 4,200 – 5,800 5,800
25-2-2004 25-2-2010 55,600 10.29 2,200 39,798 – 13,602 13,602
22-2-2005 22-2-2011 102,400 15.17 10,400 – – 92,000 –
01-3-2006 01-3-2012 141,200 23.63 13,000 – – 128,200 –
28-2-2007 28-2-2013 145,000 25.77 – – 4,000 141,000 –
532,400 – 102,200 44,798 4,000 381,402 20,202
26-2-2008 26-2-2014
approx.
175,000
67.4 Complete statement of movements in options in 2007
Issued on Term until
Number
of options
Exercise
price
Exercised/
lapsed
to 2006
Exercised
in 2007
Lapsed
in 2007
Outstanding
31-12-2007
Exercisable
31-12-2007
27-2-2002 27-2-2008 80,000 6.42 38,400 40,800 – 800 800
25-2-2003 25-2-2009 88,200 6.18 38,200 44,200 – 5,800 5,800
25-2-2004 25-2-2010 95,600 10.29 2,200 39,798 – 53,602 53,602
22-2-2005 22-2-2011 152,400 15.17 10,400 – – 142,000 –
01-3-2006 01-3-2012 201,200 23.63 13,000 – – 188,200 –
28-2-2007 28-2-2013 205,000 25.77 – – 4,000 201,000 –
822,400 – 102,200 124,798 4,000 591,402 60,202
26-2-2008 26-2-2014
approx.
267,000
The Group received € 944,409 for the 124,798 options which were exercised during the year. The weighted
average exercise price was € 7.57 and the weighted average share price at sale was € 22.56.
67.5 Share savings plan
All employees in the Netherlands have been offered the opportunity to participate in the share savings plan.
The maximum amount per participant in 2007 was € 1,226 (2006: € 1,226). 3,274 shares were saved through
this plan in 2007, as a result of which employees have saved a total of 48,228 shares since 2002. The Group has
received € 95,744 for 3,274 saved shares (average of € 29.24).
Royal Ten Cate Annual Report 2007 123

NOTES TO THE COMPANY FINANCIAL STATEMENTS
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.
Number of shares repurchased at end of 2006 508,946
Repurchase of shares in 2007 175,000
Issued in respect of options – 124,798
Issued in respect of share savings plan – 3,274
Number at end of 2007 555,874
68 PROVISIONS 2007 2006
Guarantees and claims 3.0 3.0
Others 0.3 –
Balance of provisions as at 31 December 3.3 3.0
The term of the provisions exceeds one year.
69 LONG-TERM LIABILITIES 2007 2006
Syndicated loan 214.1 52.6
Loans from operating companies 9.2 3.4
Balance of long-term liabilities as at 31 December 223.3 56.0
The conditions of the syndicated loan can be found in the notes to the consolidated balance sheet on page 106.
70 SHORT-TERM LIABILITIES 2007 2006
Banks, current accounts 17.4 32.7
Owed to consolidated operating companies – 0.1
Trade creditors and other payables 2.6 2.2
Balance of short-term liabilities as at 31 December 20.0 35.0
124 Royal Ten Cate Annual Report 2007

71 OTHER INFORMATION
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 operating companies.
The company forms a tax group together with the majority of the Dutch operating companies for corporation and
sales tax. Each of the operating companies is severally liable for the tax payable by all the companies included
in the tax group.
Letters of guarantee
The company has not issued any letters of guarantee on behalf of foreign operating companies as security for
these companies’ payment liabilities on the balance sheet date.
In respect of the damages assessment procedure relating to the claim of United Fabrics (see note 54), a letter of
guarantee has been issued in an amount of € 1.8 million.
Almelo, 26 February 2008
Executive Board
L. de Vries, Chairman
J. Wegstapel
Supervisory Board
A.W. Veenman, Chairman
P.P.A.I. Deiters, Vice-Chairman
F.A. van Vught
C.W. Versteeg
E. ten Cate
Royal Ten Cate Annual Report 2007 125

Other information
To the General Meeting of Shareholders of Royal Ten Cate
AUDITOR’S REPORT
Report on the financial statements
We have audited the financial statements 2007 of Royal Ten Cate Almelo, for the year 2007 as set out on pages
71 to 125. The financial statements consist of the consolidated financial statements and the company financial
statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December
2007, profit and loss account, statement of changes in equity and cash flow statement for the year then ended,
and a summary of significant accounting policies and other explanatory notes. The company financial statements
comprise the company balance sheet as at 31 December 2007, the company profit and loss account for
the year then ended and the notes.
Management’s responsibility
Company’s 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. This responsibility includes: designing, implementing and
maintaining internal control relevant to the preparation and fair presentation of the financial statements that
are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our
audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance 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.
126 Royal Ten Cate Annual Report 2007

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 2007, and of its result and its cash flow 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 2007, 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 requirement under 2:393 sub 5 part e of the Netherlands Civil Code, we report, to the
extent of our competence, that the management board report is consistent with the financial statements as
required by 2:391 sub 4 of the Netherlands Civil Code.
Enschede, 26 February 2008
KPMG ACCOUNTANTS N.V.
A.J.M. Oude Weernink RA
POST BALANCE SHEET EVENTS
1. YLA Inc
On 22 January, TenCate announced that agreement had been reached on the acquisition of YLA Inc of Benicia,
California, USA.
YLA is a producer of advanced thermoset composites. The company supplies materials for the construction of
satellites, solar panels, communications, space vehicles, defence and energy production.
This acquisition gives TenCate a market share of over 50% in the use of thermoset composites in the American
space industry.
YLA and its subsidiary CCS Composites generated 2007 revenues of $ 23 million and were profitable. The acquisition
price was $ 32 million free of debt. The acquisition still has to be approved by the US authorities.
Royal Ten Cate Annual Report 2007 127

ADDITIONAL DATA
2. Xennia Technology Ltd
On 29 January, TenCate announced that an agreement had been signed to acquire 75% of the issued share
capital of Xennia Technology Ltd of Cambridge, Great Britain.
Xennia develops inks and coating fluids as well as the related control software. The company holds a large
number of patents in this field. TenCate has been working closely with Xennia on the DigiTex project, a development
for digital textile finishing, with grants from the European Union. The project is now reaching the phase of
development of commercial applications for textile finishing.
Xennia generated revenues of GBP 7 million in 2007 and was profitable.
3. Composix Co.
On 31 January, TenCate announced that – following the press release of 11 December 2007 – the acquisition of
Composix Co (Newark, Ohio, USA) had been completed.
Composix is the US market leader in the protection of military vehicles, vessels and aircraft by means of composites.
The customers of Composix are vehicle manufacturers and other suppliers to the US Army.
Composix generated revenues in excess of $ 100 million in 2007 and is highly profitable. The acquisition price
is $ 68 million free of debt, with the possibility of an earn-out of $ 10 million if a particular profit target is
achieved in 2008 and 2009.
Following the acquisition of Roshield (Denmark) in February 2007, the current acquisition of Composix represents
a major strengthening of TenCate’s market leadership in the field of vehicle protection.
4. Edel Grass
On 12 December 2007, Oranjewoud and TenCate jointly announced that they had signed a letter of intent
concerning the intended acquisition of Edel Grass (Genemuiden).
This acquisition is expected to be completed in the first quarter of 2008, after which Oranjewoud and TenCate
will each hold a 50% share.
Edel Grass is a leading supplier of artificial grass systems, particularly for hockey, tennis and football in the
European and African markets. Edel Grass generated 2007 revenues of approximately € 30 million and was
profitable. The combination of knowhow and the complementary nature of the partners leads to the creation of
a high-quality player with a wide knowledge of the artificial grass market.
5. Increase in syndicated loan
The above acquisitions require total resources of approximately € 90 million. Partly for this reason it is intended
to increase the existing syndicated loan of € 250 million by € 150 million to € 400 million.
On 26 February 2008, the date of this annual report, the commitments from the participating banks were
more than sufficient to conclude the increase successfully. The planned signing date of the new agreement is
27 February 2008.
128 Royal Ten Cate Annual Report 2007

PROVISIONS OF THE ARTICLES OF ASSOCIATION RELATING TO APPROPRIATION OF PROFIT
(Article 27)
General
The authorised capital is divided into ordinary shares.
Summary of the provisions of the articles of association
1.
2.
3.
4.
5.
6.
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.
With the approval of the Supervisory Board, the Executive Board is authorised to determine the part of the
profit that will be reserved.
The sum remaining from the profit after the reservation in accordance with paragraph 2 is at the disposal of
the general meeting of shareholders.
Shares held by the company in its own capital are not taken into account in calculating the appropriation of
profit.
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.
A shareholder’s claim for payment shall be time-barred after a period of five years has elapsed.
PROPOSED APPROPRIATION OF PROFIT
in millions of euros
2007 2006
Net result 46.4 76.0
Added to other reserves in accordance with article 27, paragraph 2 of the articles of association – 26.5 – 58.5
19.9 17.5
Net addition to the reserve for retained earnings of associated companies – 1.4 – 1.3
18.5 16.2
Undistributed dividend balance from previous year 0.5 0.5
Payment of € 0.80 (32%) and € 0.70 (28%) dividend to holders of ordinary shares in accordance
19.0 16.7
with article 27 paragraph 3 of the articles of association – 18.8 – 16.2
Undistributed dividend balance at year end, which is transferred to the relevant account 0.2 0.5
Royal Ten Cate Annual Report 2007 129

Ten-year summary
in millions of euros, unless stated otherwise
130 Royal Ten Cate Annual Report 2007
Figures based on IFRS
Figures based on Dutch GAAP
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
CONSOLIDATED PROFIT
AND LOSS ACCOUNT
Revenues
Changes in inventories of finished
886.0 770.5 686.5 641.0 569.6 602.1 620.0 620.2 665.5 632.9 620.8
products and work in progress – 11.7 – 4.8 0.5 – 12.6 – 2.6 – 2.4 6.0 – 3.2 9.6 5.2 – 8.9
Raw materials and manufacturing supplies
Work contracted out and other external
463.6 402.2 353.8 332.1 280.7 289.9 297.2 294.4 279.8 276.0 279.0
expenses 54.9 34.7 29.3 29.5 28.8 36.4 37.9 36.3 48.6 44.8 51.4
Personnel costs 178.3 171.2 161.6 159.7 142.9 151.3 159.1 160.2 165.5 159.2 153.4
Depreciation and amortisation 32.7 23.1 19.3 19.2 19.6 24.0 26.0 25.2 30.1 27.9 27.5
Other operating costs 98.8 94.0 83.5 78.5 71.5 79.0 78.9 74.7 91.0 85.3 81.5
Total operating expenses 816.6 720.4 648.0 606.4 540.9 578.2 605.1 587.6 624.6 598.4 583.9
OPERATING RESULT 69.4 50.1 38.5 34.6 28.7 23.9 14.9 32.6 40.9 34.5 36.9
Financial expenses – 11.3 – 8.0 – 4.6 – 6.8 – 7.0 – 12.0 – 12.9 – 10.6 – 10.2 – 9.7 – 10.1
PRE-TAX RESULT 58.1 42.1 33.9 27.8 21.7 11.9 2.0 22.0 30.7 24.8 26.8
Profit tax
RESULT AFTER TAX BUT BEFORE RESULT
– 11.9 – 11.4 – 11.5 – 9.2 – 5.3 1.7 0.7 – 3.3 – 9.0 – 8.4 – 9.1
FROM PARTICIPATING INTERESTS 46.2 30.7 22.4 18.6 16.4 13.6 2.7 18.7 21.7 16.4 17.7
Share in net income of associated companies 0.3 45.4 8.1 5.1 3.9 5.4 3.5 5.5 – 0.1 0.7 0.6
RESULT AFTER TAX 46.5 76.1 30.5 23.7 20.3 19.0 6.2 24.2 21.6 17.1 18.3
Extraordinary items after tax – – – – – 12.3 – 12.0 – – – 59.0 – 4.5
NET INCOME AFTER TAX 46.5 76.1 30.5 23.7 20.3 31.3 – 5.8 24.2 21.6 – 41.9 13.8
Minority interests – 0.1 – 0.1 – – 0.1 – – 0.2 0.1 – – – 0.1 –
NET PROFIT 46.4 76.0 30.5 23.6 20.3 31.1 – 5.7 24.2 21.6 – 42.0 13.8
Dividend 18.8 16.2 12.5 10.2 8.5 7.7 2.4 9.8 8.6 6.2 6.4
Operating result as % of revenues 7.8% 6.5% 5.6% 5.4% 5.0% 4.0% 2.4% 5.3% 6.1% 5.4% 6.0%
Return on equity 22.5% 36.1% 18.6% 17.0% 12.9% 22.0% – 4.2% 17.8% 16.9% – 27.8% 8.0%
Return on net capital employed 14.3% 14.4% 15.3% 13.5% 11.7% 9.7% 5.9% 13.6% 13.5% 11.5% 11.3%

in millions of euros, unless stated otherwise
CONSOLIDATED BALANCE SHEET
Figures based on IFRS
Figures based on Dutch GAAP
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
Tangible fixed assets 218.1 165.8 161.4 118.8 118.1 130.5 154.3 151.5 143.6 157.1 162.1
Intangible fixed assets 136.8 12.4 13.8 12.1 10.6 12.8 14.7 – – – –
Financial fixed assets 19.8 18.3 35.2 19.9 11.4 9.2 5.6 7.5 3.4 2.9 24.9
Total fixed assets 374.7 196.5 210.4 150.8 140.1 152.5 174.6 159.0 147.0 160.0 187.0
Inventories 176.2 157.7 157.5 138.6 110.0 117.4 124.6 134.6 112.0 116.1 117.9
Receivables 166.2 128.2 125.0 98.8 91.7 89.8 109.7 107.0 96.2 107.2 108.2
Securities and cash 4.8 6.7 4.6 2.7 5.8 2.9 0.1 0.4 0.4 0.5 0.3
Total current assets 347.2 292.6 287.1 240.1 207.5 210.1 234.4 242.0 208.6 223.8 226.4
TOTAL ASSETS 721.9 489.1 497.5 390.9 347.6 362.6 409.0 401.0 355.6 383.8 413.4
Equity* 310.1 238.7 181.8 146.5 162.0 152.9 129.5 140.6 130.5 125.0 176.5
Minority interests 0.3 0.2 – 0.1 0.1 0.2 0.1 0.4 0.1 – 0.1
Group equity 310.4 238.9 181.8 146.6 162.1 153.1 129.6 141.0 130.6 125.0 176.6
Provisions 40.8 43.8 56.1 52.1 15.6 15.1 14.4 – – – –
Long-term debts 222.3 63.5 130.2 74.1 82.9 107.0 77.7 11.2 11.3 9.2 9.9
Banks and short term loans 12.9 30.4 27.1 24.6 13.9 8.9 99.7 83.1 92.6 106.5 94.1
Other short-term debts 135.5 112.5 102.3 93.5 73.1 78.5 87.6 67.4 25.1 42.6 49.5
TOTAL LIABILITIES 721.9 489.1 497.5 390.9 347.6 362.6 409.0 401.0 355.6 383.8 413.4
Guarantee capital/total capital 43% 49% 37% 38% 47% 42% 32% 37% 41% 38% 50%
Acquisitions /(de)consolidations
Investments in tangible and intangible
175.1 – 63.0 40.8 29.2 0.3 1.4 23.6 14.8 34.6 0.5 11.1
fixed assets 62.9 43.0 26.2 12.0 16.9 17.0 28.5 29.5 33.7 29.2 29.8
Depreciation and amortisation 32.7 23.1 19.3 19.2 19.6 24.0 26.0 25.2 30.1 27.9 27.5
Cash flow 79.2 99.2 49.8 42.9 39.9 57.5 27.7 49.4 51.7 – 14.1 41.3
Number of staff years at year-end 4,020 3,532 3,578 3,634 3,245 3,278 3,625 3,585 3,970 3,886 3,848
Number of outstanding shares (x 1,000) 23,556 21,063 20,784 20,472 20,096 19,192 18,872 18,872 18,092 18,092 17,732
Maximum increase from conversion – – – – – – 768 1,200 1,716 2,296 2,936
Net earnings per € 2.50 share 2.04 3.66 1.48 1.17 1.03 1.63 – 0.31 1.30 1.20 – 2.34 0.78
Dividend per share in euros 0.80 0.70 0.60 0.50 0.43 0.40 0.13 0.52 0.48 0.34 0.36
Closing price in euros 21.27 23.21 21.50 13.55 9.02 6.25 6.50 8.23 9.38 7.26 9.93
* With effect from 2003 equity including dividend payable.
Royal Ten Cate Annual Report 2007 131

Operating companies, associated
companies and other interests
as at 31 December 2007
ADVANCED TEXTILES & COMPOSITES
TenCate Advanced Textiles bv Nijverdal (NL)
Holding Ten Cate Advanced Textiles group
TenCate Protect bv Nijverdal (NL)
Fabrics for work and protective clothing and professional wear
TenCate Protective Fabrics USA Union City, Georgia, USA
Fabrics for protective clothing
TenCate Technical Fabrics bv Nijverdal (NL)
Outdoor fabrics
TenCate Advanced Spinning bv Nijverdal (NL)
High-grade yarns and fabrics for applications in specialist professions and
outdoor applications
TenCate Permess Interlinings Hong Kong ltd Hong Kong, China
TenCate Permess (Wuxi) Advanced Textiles co ltd Xishan, China
Sale and production of interlinings
TenCate Advanced Composites bv Nijverdal (NL)
Components for aircraft construction and antiballistic materials
TenCate Advanced Armour S.A.S. Vienne, France
TenCate Advanced Armour Danmark A/S Vissenbjerg,
Antiballistic materials Denmark
TenCate Advanced Composites USA inc Morgan Hill,
California, USA
Phoenixx TPC inc Taunton, Massachusetts, USA
Components for aerospace and antiballistic materials
GEOSYNTHETICS & GRASS
TenCate Geosynthetics North America inc Atlanta, Georgia,
USA
TenCate Geosynthetics Austria GmbH Linz, Austria
TenCate Geosynthetics France S.A.S. Bezons, France
TenCate Geosynthetics Netherlands bv Almelo (NL)
TenCate Geosynthetics Asia sdn bhd Kuala Lumpur, Malaysia
Geofabrics Australasia pty ltd (50%)
Geotextiles and industrial fabrics
Cheltenham, Australia
TenCate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur,
Malaysia
TenCate Geosynthetics (Thailand) ltd Bangkok, Thailand
TenCate Geosynthetics pte ltd Singapore
TenCate Geosynthetics Italia srl Lazzata, Italy
TenCate Geosynthetics (UK) ltd Telford, United Kingdom
TenCate Geosynthetics sl Madrid, Spain
TenCate Geosynthetics Schweiz AG Zurich, Switzerland
TenCate Geosynthetics Deutschland GmbH Dietzenbach,
Germany
TenCate Geosynthetics Polska Spzoo Krakow, Poland
TenCate Geosynthetics CZ sro Prague, Czech Republic
TenCate Geosynthetics Rumania
Sales offices
Bucharest, Rumania
TenCate Thiolon bv Nijverdal (NL)
TenCate Thiolon North America inc Dayton, Tennessee, USA
TenCate Thiolon Middle East (49%) 1) Synthetic turf fibres
Dubai, UAE
TenCate Thiobac bv Nijverdal (NL)
Backing for synthetic turf
1) Due to the legislation in Dubai, 51% is held by a local partner.
Royal Ten Cate has 100% economic ownership.

TECHNICAL COMPONENTS
TenCate Enbi International bv Beek (NL)
TenCate Enbi GmbH Opladen, Germany
TenCate Enbi Kft Rétság, Hungary
TenCate Enbi inc Shellbyville, Indiana, USA
TenCate Enbi pte ltd Singapore
TenCate Enbi Zhuhai co ltd Zhuhai, China
Technical rollers and components for printers, copiers, fax machines,
postal sorting machines, automated teller machines, insulation and
heating systems
OTHERS
The operating companies listed here are consolidated in the financial statements, with the exception
of the companies shown as non-consolidated. Some interests of minor relevance to the overall
picture have been omitted from the list, in accordance with article 379, paragraph 3, Book 2 of the
Netherlands Civil Code. The companies are wholly owned, unless otherwise stated.
TenCate Assurantiën bv Almelo (NL)
Insurance
TenCate Nederland bv Almelo (NL)
Royal Ten Cate USA inc Atlanta, Georgia, USA
TenCate UK ltd London, United Kingdom
TenCate France S.A.S. Paris, France
TenCate Deutschland GmbH Opladen, Germany
TenCate Danmark A/S Copenhagen, Denmark
Royal Ten Cate Pacific ltd Hong Kong, China
Royal Ten Cate China Holding ltd
Country holding companies
Hong Kong, China
Ten Cate Finance AG Schaffhausen, Switzerland
Financing company
NON-CONSOLIDATED COMPANIES
DIS Enbi Seals Ireland ltd (20%) Portlaoise, Ireland
Seals
GreenFields bv (20%) Kampen (NL)
Marketing organisation for synthetic turf
Landscape Solutions bv (20%) Goirle (NL)
Synthetic turf for landscaping
Royal Ten Cate Annual Report 2007

Colophon
Text
Royal Ten Cate
Translation
VVH business translations, Utrecht (NL)
Concept and realisation
C&F Report Amsterdam B.V.
Photography
Picture Report, Amsterdam
Staff sgt. Curt Cashour, MNC-I Public Affairs
Royal Ten Cate
Number of copies printed
3,000
Operating companies, associated companies and other interests

Royal Ten Cate
Stationsstraat 11
7607 GX Almelo
The Netherlands
P.O. Box 58
7600 GD Almelo
The Netherlands
Telephone +31 (0)546 544 338
Fax +31 (0)546 824 655
Corporate development & investor relations
F.R. Spaan, director
f.spaan@tencate.com
www.tencate.com