Annual Report 2006 - TenCate

Annual Report 2006
Royal Ten Cate

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
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.
ADVANCED TEXTILES
& COMPOSITES SECTOR
PROTECTIVE & OUTDOOR FABRICS
� TenCate Protect
� 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 Composites USA
� TenCate Advanced Armour
Composites for applications in the aerospace
industry, bullet-, needle- and fragment-proof
materials and specialist industrial applications
� Countries where TenCate
is established or represented
Royal Ten Cate Annual Report 2006
GEOSYNTHETICS
& GRASS SECTOR
GEOSYNTHETICS
� TenCate Geosynthetics EU
� TenCate Geosynthetics North America
� TenCate Geosynthetics Asia
Synthetic fabrics, nonwovens and grids
for applications in civil engineering,
the environmental market, the
construction industry, agriculture,
sport and recreation
GRASS
� TenCate Thiolon
� TenCate Thiolon North America
� TenCate Thiobac
Artificial grass systems and components
(fibres, backing, infill and sub-base) for topflight
sports and recreational and landscape
applications
TenCate Cetex®
This is TenCate Cetex, a thermoplastic composite material
that is qualified for various applications in the aircraft
industry. The material stands out because of its excellent
mechanical characteristics, such as fire safety and high
surface quality. It is also light in weight.
TenCate Cetex is used by Boeing and Airbus, among others,
in the wings, floor components, baggage compartments and
other interior parts of aircraft such as the A340, A380, Boeing
747 and Boeing 787.
Thermoplastic composites can be formed by manufacturers
into any required shape under specific temperature and
pressure. They can also easily be recycled.

TECHNICAL COMPONENTS
SECTOR
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
BUSINESS KEY
Trading in technical products for agriculture,
horticulture, industry and construction
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 develops and produces materials that
are distinctive. The materials are mostly incorporated
in an end-product or system, as a
result of which the end-product or system
itself becomes distinctive. TenCate strives for
an active process, in order to develop highquality,
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 approximately 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, as part of its aim of
achieving progress for all stakeholders.
* Including Roshield and Ten Cate Thiolon Middle East.
Geographic breakdown of sales in 2006
in per cent
� By destination
� By origin
50
45
40
35
30
25
20
15
10
5
0
BELGIUM
NETHERLANDS
ENGLAND
GERMANY
AUSTRIA
FRANCE
OTHER EUROPE
OTHER EU
SPAIN
ITALY
REST OF THE WORLD
ASIA
USA, CANADA

Annual Report 2006
Royal Ten Cate nv
Commercial overview
Profile
Financial highlights
Key developments in 2006
Evaluation of action plans
Actions for 2007
Mission, strategy and objectives
Foreword by the Chairman of the Executive Board
The TenCate share
Report of the Supervisory Board
The Boards
Materials that make a difference
Report of the Executive Board
General
Financial performance
SWOT analysis
Challenges for TenCate
Information technology
Personnel & Organisation
Organisational development
Socially responsible enterprise
Post balance sheet events
Outlook
Corporate governance
Risks and risk management
Sector reports
Advanced Textiles & Composites
Geosynthetics & Grass
Technical Components
2006 financial statements
Additional data
Ten-year summary
Colophon
Inside cover
Inside cover
3
4
5
6
7
8
10
13
16
18
20
20
20
24
24
26
27
27
29
32
33
33
35
40
42
50
60
67
120
126
Outside backcover

OPERATING RESULT
AND NET PROFIT
in millions of euros
� Operating result
� Net profit *
2
54
48
42
36
30
24
18
12
6
0
2002 2003 2004 2005 2006
FIGURES PER SHARE
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
2002 2003 2004 2005 2006
* Excluding extraordinary result 2002: + € 12.3 million
and 2006 (sale Synbra) € 39.3 million.
Royal Ten Cate nv Annual Report 2006
SALES PER SECTOR
in millions of euros
� Advanced Textiles & Composites
� Geosynthetics & Grass
� Technical Components
450
400
350
300
250
200
150
100
50
0
2002 2003 2004 2005 2006
EBIT PER SECTOR
in millions of euros
� Advanced Textiles & Composites
� Geosynthetics & Grass
� Technical Components
27
24
21
18
15
12
9
6
3
0
2002 2003 2004 2005 2006

Financial highlights
in millions of euros, unless stated otherwise
PROFIT AND LOSS ACCOUNT
Revenues
Operating result before depreciation & amortisation (EBITDA)
Operating result (EBIT)
Net profit
Net profit excluding result from divested activities
CASH FLOW
Depreciation and amortisation
Cash flow before change in working capital
Changes in working capital
Investments in tangible and intangible fixed assets
Acquisitions/deconsolidations
Cash flow from operating and investment activities
RATIOS (%)
Operating result as % of sales (EBIT margin)
Operating result as % of net capital employed (RONA)
Net profit as % of equity
Risk capital/total capital (solvency ratio)
PER SHARE DATA IN EUROS
Net profit
Net profit excluding result from sale of Synbra (basis of dividend)
Net profit excluding all divested activities
Cash flow **
Dividend
Payout in % **
Shareholders’ equity
OTHER KEY FIGURES
Number of staff years at year-end
* Adjusted for the purposes of comparison.
** Excluding income from sale of Synbra.
2006
770.5
73.2
50.1
76.0
34.0
23.1
65.7
– 4.0
43.0
– 63.0
68.9
6.5
14.4
36.1
48.8
3.66
1.76
1.64
2.88
0.70
40%
11.33
3,532
2005
686.5
57.8
38.5
30.5
26.8
19.3
59.2
– 23.9
26.2
40.8
– 45.0
5.6
15.3
18.6
36.5
1.48
1.48
1.30
2.42
0.60
40%
8.75
3,578
Royal Ten Cate nv Annual Report 2006 3
*

Key developments in 2006
� Sales growth of 12.2% to € 771 million,
of which 4.9% was organic. The organic
growth was mainly affected by the lower
growth of the artificial grass activities.
� Increase of 30% in the operating result to
€ 50 million. On an organic basis, the rise
was 17.6%. The increase occurred across
a broad front, but resulted mainly from the
activities in protective fabrics (US),
geosynthetics, aerospace and armour composites
and components for printers and
copiers.
� On a consolidated basis, the EBIT margin
increased to 6.5%. Significant growth was
achieved in the Advanced Textiles & Composites
sector. A decrease was recorded in
the Geosynthetics & Grass sector.
� Net profit grew by 26.5% to € 34 million,
excluding the result from divestments of
€ 42 million. The reported net profit is € 76
million.
4
Royal Ten Cate nv Annual Report 2006
� Sales and results in the Grass group fell
short of expectations. Measures were
announced in the fourth quarter which will
strengthen TenCate’s market position in
the artificial grass market and consequently
improve the margins.
� Major advances were made with regard to
the fix it/exit policy with the divestments
of Synbra Group (50%) and Plasticum.
� Polyfelt was fully integrated in TenCate
Geosynthetics, which now operates worldwide
as a single integrated group and has
become engaged in large projects.
� Significant growth was achieved in
America in the field of protective fabrics.
Large military orders have been
announced.
� TenCate Advanced Composites won new
orders, including from Boeing (787) and
Embraer. This will bolster future sales
growth.
� The acquisition of Roshield in Denmark
(vehicle protection) was announced at the
end of 2006. This transaction is being
completed at the start of 2007.
� In mid-2006 a declaration of intent was
signed with the Province of Overijssel and
the District of Hellendoorn with regard to
urban development and concentration of
industrial activities.

Evaluation of action plans
Evaluation of action plans which were
announced for 2006 in the 2005 annual report.
� Corporate branding
The corporate branding project was successfully
completed. It included a critical
assessment of our brand policy worldwide.
This led among other things to greater
commercial consistency. Our publications
are now also being produced in the new
house style.
� Integration of Polyfelt
The integration of Polyfelt proceeded
according to plan. The Polyfelt organisation
in Europe, Asia and Australia was
successfully merged with TenCate Geosynthetics,
the worldwide market leader in
geosynthetics.
� Progress of the acquisition
and divestment policy
Significant progress was made with regard
to divestments. The interest in Synbra
Group was sold with a book profit of
€ 39 million. TenCate Plasticum was
divested at the beginning of 2006 (book
profit of € 3 million). TenCate made known
during the year that it saw various possi-
bilities for acquisitions. The acquisition of
Roshield was announced at the beginning
of December 2006; the acquisition will
considerably strengthen the activities in
the field of ballistic vehicle protection.
� Further strengthening and
embedding of knowledge protection
TenCate has established various patents.
Knowledge protection is an important subject
in new developments.
� Further development of
the digital finishing process
Approval was obtained in the second half
of 2006 for the Digitex innovation project,
which had been submitted to the European
Commission. This means that the project
will be subsidised with European funds.
The development work will take four
years.
� Internal co-operation
TenCate companies mostly operate on the
basis of shared technological knowledge.
This requires co-operation, for example in
research and development. Exchanges of
products and technologies also take place
on an operational and commercial level.
� Management development
At the end of 2006 an active learning
programme was developed in co-operation
with TSM Business School. The objectives
include the promotion of innovative capacity,
entrepreneurship and the situational
leadership of the participants.
� Construction of production
facilities in Asia
New investments were made in both
TenCate Enbi and TenCate Geosynthetics.
� Concentration of production in
TenCate Protective & Outdoor Fabrics
(Advanced Textiles & Composites sector)
TenCate participated actively in a successful
pilot project run by the government
with the aim of accelerating government
procedures for plant relocations and
permit applications. The declaration of
intent for the Nijverdal-Noord Master Plan
was signed with the local and provincial
authorities in mid-2006. The gradual
concentration of the production process
was initiated with the delivery of the new
continuous wide bleaching machine.
Royal Ten Cate nv Annual Report 2006 5

Actions for 2007
The actions for this year include the challenges
based on the SWOT analysis.
� Buy & build – fix it/exit policy
In 2007 the measures taken in the Grass
group should lead to a considerable
improvement in results. The system
approach (performance of the overall
sports pitch) will be developed further.
The Nijverdal-Noord Master Plan should
ultimately deliver a significant cost reduction.
It will also be a major spearhead of
the new developments based on an open
innovation centre. As part of this plan,
steps will be taken in 2007, including an
expansion of capacity in TenCate Aerospace
& Armour Composites.
Although the divestments have almost
been completed, this remains an area of
attention.
6
Royal Ten Cate nv Annual Report 2006
� Knowledge protection
TenCate is a knowledge-intensive company
which has to be innovative in order to
maintain its lead. The establishment or
acquisition of patents and licences is an
important process which requires constant
attention.
� Creating conditions for sales growth in
Asia and other emerging geographic
markets
TenCate already operates in a large
number of countries. The possibilities are
being investigated of developing the
market for TenCate products in a broader
sense, using the existing network and
possibly third parties.
� Promoting innovative developments
TenCate is active in this regard on many
fronts. Mr D. Hendriks (Group Director
TenCate Protective & Outdoor Fabrics) is
Chairman of the European Technology Platform
for Textiles & Clothing. Some development
projects are of a strategic nature
and are therefore not publicly disclosed.
� Management development
TenCate requires young talent in order to
achieve its ambitions. Measures have
been initiated to secure such talent both
internally and externally.

Mission, strategy and objectives
MISSION
TenCate strives for leadership in growing market
niches for specialist functional materials.
To that end it uses its broad technological
base, the specialist skills available within the
company and its strong position in the value
chain. In markets which make high demands in
terms of functionality, TenCate offers highgrade
solutions. The objective is to contribute
to progress in the sectors in which TenCate
operates. The added value for its customers
results in higher valuation of the materials and
profitable growth for the company. That also
creates value for shareholders.
STRATEGY
The strategy is characterised by:
� market leadership;
� value chain management:
� cost leadership in combination with
� product differentiation, focusing on
specific applications and customer
requirements;
� end-user marketing and an industrial
brand policy;
� technological innovation.
� a focus on markets for specialised materials;
TenCate rewarded for transparency and innovation
In 2006 TenCate was nominated among other things for the Sijthoff Prize, the prize for the best financial reporting. TenCate also
received a high score in the Scenter Annual Report Prize 2006. The company was also nominated for the Rematch Investor
Relations Awards 2006 and received the Roland Berger Award in the Merger & Acquisitions category. TenCate also carried off
prizes in the product area, such as the 'Ei van Columbus 2006' in the sustainable production technology category for Digitex
(digital textile finishing). For projects in the field of Geosynthetics, TenCate received two Outstanding Achievement Awards and an
Award of Excellence from the Industrial Fabrics Association International.
� growth (buy & build);
� a balanced portfolio of strategic activities
and the scaling down of non-core activities
fix it/exit).
The value chain management is focused
on occupying leading market positions and
thereby achieving critical mass and strategic
coherence. In this way a healthy cost basis is
formed and capacity is created for investments
which are necessary for further growth.
QUALITATIVE STRATEGIC
OBJECTIVES
� value creation for shareholders –
�
achieving profitable growth based on our
knowledge, skill and internal synergy,
taking into account our social responsibilities;
achieving critical mass in product/market
combinations by occupying leading positions
in worldwide market niches;
� a healthy financial position with sufficient
strength to undertake acquisitions;
� a balanced portfolio of activities –
product/market combinations differ in
terms of growth potential and risk profile;
� promoting an open culture for progress
and innovation;
� a commercial organisation which thinks in
terms of systems (solutions) instead of the
traditional role of the provider of (system)
components.
FINANCIAL OBJECTIVES
� return on capital employed (operating
result as a % of net capital employed) of
at least 15% and generation of sufficient
liquidity for innovative developments and
acquisitions.
� profitable growth, reflected in a gradual
rise in the operating EBIT margin (target of
at least 8%).
� strong balance sheet position (solvency of
at least 35%); the main covenants that
determine borrowing capacity are:
� total debt/EBITDA + result from
participating interests < 3;
� interest cover > 4.
� longer-term net profit growth of at least
10% per annum.

Foreword by the Chairman
of the Executive Board
In strategic terms we once again made good
progress in 2006. That applies both to the buy
& build policy for our core activities and to the
fix it/exit policy in particular for the Technical
Components sector.
Sales grew by over 12% in 2006 to € 771
million. In organic terms, the growth was 5%
higher than in the previous year. The growth in
net profit, corrected to take account of divestments,
remained high at around 27%, reaching
€ 34 million.
BUY & BUILD
The integration of Polyfelt, which was acquired
at the end of 2005, proceeded according to
plan. Polyfelt has been fully integrated in the
TenCate Geosynthetics group, which operates
on the basis of close international cooperation.
The group was involved in some
attractive projects in 2006.
Agreement was reached on the acquisition
of Roshield at the end of 2006. This Danish
company will considerably strengthen the
TenCate Advanced Composites group in the
field of vehicle protection.
8
Royal Ten Cate nv Annual Report 2006
As a result of the co-operation with Green-
Fields, the TenCate Grass group took the first
step towards strategic alliances with commercial
organisations and their direct access to
the end-user. This co-operation process will be
extended with the addition of other parties to
form a network of high-quality partners. In this
context TenCate also entered into a worldwide
strategic alliance at the beginning of 2007
with FieldTurf Tarkett, a leading marketing
organisation for artificial grass systems for
sport applications. The organisation has extensive
knowledge of patented artificial grass
systems. For TenCate, the alliance provides
improved access to the market. It also provides
considerable support for the strategic focus on
systems and system characteristics.
A major project which began in 2006 is the
Nijverdal-Noord Master Plan. This provides for
TenCate’s production plants in Almelo and
Nijverdal to be brought together on a single
site.
An important initial step in this direction was
taken with the entry into service of the continuous
wide bleaching machine at TenCate
Advanced Textiles. This is unique in our sector
in terms of its size and technological advancement.
With regard to technological innovation,
progress was made with the Digitex project
(digitisation of textile finishing), for which a
European subsidy was obtained.
FIX IT/EXIT
Substantial progress was also made with our
divestment policy. Both TenCate Plasticum and
our interest in Synbra Group were sold. This
generated substantial income from divestments.
The profit recovery at TenCate Enbi
continued in 2006.
PERFORMANCE
Although TenCate operates in growth markets
and occupies leading positions, there are
differences between the various sectors in
terms of the – predominantly positive –
developments. There was a striking improvement
in the operating result in the Advanced
Textiles and Composites sector. This was due
mainly to the strong developments in the field
of protective fabrics in the US and our growth
in sales of composite materials for the core
markets of aerospace and armour (ballistic
protection).

In some units our results show room for
improvement. The decrease in the operating
result of the Geosynthetics & Grass sector in
relation to sales (EBIT margin) was due in
particular to the disappointing performance of
our artificial grass activities. However, the
artificial grass market is developing apace,
with major changes occurring in environmental
factors and competitive relationships. As
market leader we must respond appropriately
to these developments. In 2006 the Executive
Board was actively engaged in redefining our
strategic policy for that purpose. From 2007,
adjustments will be made to our policy in order
to strengthen our artificial grass proposition in
line with the market (see page 56).
In 2006 we defined a stronger company-wide
profile for TenCate as a producer of functional
materials. Our branding project was successfully
implemented during the year. It has led to
greater recognition among our (potential)
customers. TenCate is seen more as a single
company in which quality and functionality are
important core values.
Our materials are increasingly used in systems
which provide solutions for the market.
TenCate itself also provides system solutions.
By offering system components, it is possible
Master Plan combines business concentration and an open knowledge centre
Under the Master Plan, TenCate is planning to merge its plants in Nijverdal-Noord. A declaration of intent has been signed with
the Province of Overijssel and the District of Hellendoorn. An open knowledge centre is being established around the TenCate
companies in Nijverdal-Noord. In this centre, industry, universities and other knowledge institutions will jointly develop initiatives
for new products and production processes. This fits in with the plans of the Twente Innovation Platform, which has the objective
of clustering the Materials & Mechatronics sectors. The developments produced by TenCate in the last few years may provide a
positive impetus for an innovative platform for new materials for different areas of application.
to provide a total solution. This requires us to
maintain a constant market focus and enter
into partnerships with our customers and local
market operators/distributors. The system
approach is occupying an increasingly
important place.
STAKEHOLDERS
Shareholders value the strength of TenCate.
The international diversification of the shareholder
base increased further in 2006. There
must also be a balance between short-term
objectives and the long-term strategy. The aim
is to reflect this balance in our shareholder
base. In the short term we are focusing primarily
on achieving growth in our strategic core
markets and on increasing our efficiency by
continuing to operate in a cost-conscious way.
The short-term effects of our investments
are also analysed. The strategy is clearly
formulated in the context of what we refer to
as value chain management. Our strategic
activities are focused on leading positions in
worldwide market niches. These give us a
distinctive position in the value chain and are
focused on long-term continuity.
At this point I should like to thank the
employees of TenCate for their commitment in
the past year. Being a market leader does not
mean we can rest on our laurels. Each of
us must demonstrate entrepreneurship. The
situation in the artificial grass market has
also shown that in a changing environment
additional effort is required on the part of the
market leader and from our employees.
Flexibility in the labour factor is important in
order to grow on a global scale. We must be
increasingly aware of that particularly in the
Netherlands, because our employment system
is fairly inflexible and hence relatively
expensive. Flexibility and speed of reaction are
of great importance. In this regard, employees,
works councils and trade unions were called
upon to show commitment once again in 2006.
I would like to express my gratitude for the
constructive co-operation.
L. de Vries, Chairman of the Executive Board
Royal Ten Cate nv Annual Report 2006 9

The TenCate Share
Source: Euronext
ISIN code: NL 0000375731
Reuters code: NTCN.AS
Bloomberg code: KTC.NA
� KTC
� AMX
� AEX
Number of ordinary
shares in issue *
Par value
Highest price
Lowest price
Closing price
Net earnings per share **
21,069,546 20,955,932
€ 2.50 € 2.50
€ 24.84 € 24.25
€ 18.65 € 12.89
€ 23.21 € 21.50
€ 1.76 € 1.48
Dividend per share € 0.70 € 0.60
*
10
Fully diluted and after split of par value
from € 10.00 to € 2.50.
**
Excluding result from sale of Synbra.
2006
Royal Ten Cate nv Annual Report 2006
2005
130
125
120
115
110
105
100
95
90
85
80
JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC
LISTING
The TenCate share is listed on Euronext
Amsterdam (Next 150) and forms part of the
Amsterdam Small Cap Index. A number of
banks and securities houses are actively
involved in trading in the share. The stockmarket
trading volume of the TenCate share
rose once again. A 4:1 split of the TenCate
ordinary shares was effected in mid-April
2006; each now has a par value of € 2.50. The
closing price of the share on 29 December was
€ 23.21, with a closing price at the end of 2005
of € 21.50 (€ 86 before 4:1 split). The number
of shares currently in issue is 23,169,621,
following an issue of 2,106,329 shares on
12 February 2007.
INVESTOR RELATIONS
TenCate conducts an active investor relations
policy. A large number of roadshows were held
once again in the Netherlands and abroad.
There were many individual contacts with
investors, and investors also showed interest
in visiting our production sites. A visit was
organised for them to the continuous wide
bleaching machine at TenCate Advanced
Textiles.

Geographical spread of shareholdings
in percentage
� The Netherlands
� Belgium/Luxembourg
� United Kingdom
� USA/Canada
� Others
2005
48%
26%
6%
14%
6%
2006
52%
20%
5%
11%
12%
Private investors are also important in
investor relations. Private individuals make up
approximately 13% of our shareholder base.
Shareholders are regularly informed of
important developments through our house
journal TenCate Update, which is accessible to
everyone and can be requested via the website.
Although TenCate strives for open and
transparent communication, due account must
be taken of competitive positions and the
interests of suppliers and customers. Various
external assessments relating to transparency
and investor relations policy indicate that
our financial communication is increasingly
appreciated.
SHAREHOLDERS
TenCate strives for an international spread of
institutional and other shareholders. Attention
is also devoted to the investment style
(growth/value) and profile of the investor
(focus on short or long term). TenCate currently
has a well-diversified shareholder base.
Although the concentration in the United
Kingdom decreased from the 2005 level to
around 20%, the percentage reflects the
importance of that market for the TenCate
share, as was the case last year. Increased
holdings of TenCate shares were observed
particularly in France, Scandinavia and
Switzerland.
Apart from the holdings notified through
the Dutch Financial Markets Authority,
approximately six institutional investors have
holdings of 2-4%. These are mostly specialist
small cap investment funds. Approximately
45 different institutional investors in TenCate
shares are known to the company.
DISCLOSURE OF MAJOR HOLDINGS
IN LISTED COMPANIES ACT
During the year under review Stichting
Pensioenfonds Shell ceased to have a
disclosable holding and notice was received
of an 11.21% interest held by Schroders and
an 8.99% interest held by WAM. Kempen
Capital Management N.V. is a professional
asset manager for companies including Orange
Oranje Participaties N.V. and Orange Deelnemingen
Fund N.V.
Kempen Capital Management N.V. 14.92%
Schroders plc 11.21%
Aviva plc (Delta Lloyd) 5.08%
WAM Acquisitions GP, Inc 8.99%
Source: Dutch Financial Markets Authority
Royal Ten Cate nv Annual Report 2006 11

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 116 of this report. The shares repurchased
by the company are connected with the
coverage of granted options.
The Executive Board and the personnel hold a
total of 63,348 TenCate shares.
Details of the company’s shares and options
held by members of the Executive Board can be
found on page 110 of this report.
DIVIDEND PROPOSAL, POLICY
ON DIVIDEND AND RESERVES
Sizeable investments are required in order to
achieve growth. There are opportunities for
TenCate in the strategic markets. It is expected
that the growth will be continued in the years
Changes in the number of outstanding shares
Number at the end of 2005
Increase in share capital as a result of stock dividend
Number at the end of 2006
Possible increase as a result of options
Shares repurchased for options and share savings plan
Fully diluted
Investor Relations & Corporate Communication
F.R. Spaan
P.O. Box 58
7600 GD Almelo
Telephone +31 (0)546 544 338
Fax +31 (0)546 824 655
f.spaan@tencate.com
www.tencate.com
12
Royal Ten Cate nv Annual Report 2006
The international diversification of TenCate’s
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.
The dividend policy is based on a payout of
40% of profit (excluding the result from divestments).
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
2006 at € 0.70 per € 2.50 par value share,
payable in cash or as a stock dividend. The
payout percentage, adjusted to take account of
the result from the sale of Synbra, is 40%
of profit.
shareholder base increased further in 2006.
20,784,472
278,820
21,063,292
515,200
– 508,946
21,069,546
Important dates in 2007
Publication of 2006
full-year figures 1 March
Annual General Meeting
of Shareholders 29 March
Ex-dividend date 2 April
Record date for
dividend eligibility 4 April
Option period for
cash or stock dividend 5 April to 20 April
Payment of cash dividend;
delivery of shares (stock) 27 April
First-quarter figures 2007 2 May
Half-year figures 2007 22 August
Third-quarter figures 2007 1 November

Report of the Supervisory Board
We hereby present the 2006 annual report as
prepared by the Executive Board, incorporating
the financial statements. The financial statements
have been audited by KPMG Accountants
and were discussed in detail with the
Executive Board on 28 February 2007. 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.
RESULTS AND DIVIDEND
Royal Ten Cate recorded a net profit of € 76.0
million in 2006, including € 34.0 million from
ordinary operations (a rise of 27%) and € 42.0
million from the sale of Plasticum and the 50%
interest in Synbra.
We approve the proposal of the Executive
Board to set the dividend at € 0.70 per € 2.50
par value share (= 28%). This proposal is in line
with the policy of distributing approximately
40% of the operating profit to shareholders.
We propose that the General Meeting of
Shareholders accordingly approve the financial
statements 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
on seven occasions in 2006 with the Executive
Board and the Financial Director. It also met
independently.
On 12 April 2006 a visit was made to the
TenCate Advanced Textiles and TenCate
Thiolon plants in Nijverdal. The board took
the opportunity to appraise itself of the state
of affairs in these companies.
On 8 December 2006, almost one year after
the acquisition, the Supervisory Board visited
TenCate Geosynthetics Austria (formerly
Polyfelt) in Linz. In addition to a visit to the
plant, the Board took the opportunity to learn
of the developments.
At the seven regular meetings, in addition to
the trend in the results, the board devoted
particular attention to:
� the composition of the Executive Board,
leading to the intended appointment of
Mr J. Wegstapel as the successor to
Mr P.H. van der Vorm;
� the evaluation of the management by the
Executive Board, in particular the group
directors;
� the strategy of Royal TenCate, as set out
on page 7 of this annual report;
� the divestments of TenCate Plasticum,
TenCate Nicolon Australia and the 50%
interest in Synbra Group;
� the intended divestment of the remaining
companies in the Technical Components
sector: TenCate Enbi and Business Key;
� the acquisition of Roshield, as well as
the strategic connection with the other
European armour activities;
� the developments at the TenCate Grass
group. These were assessed in depth from
a strategic, commercial and operational
perspective. The same applies to the
proposed acquisition of Mattex, which
should be seen as an appropriate
response;
� the financing of these acquisitions, as
well as the refinancing of the existing
syndicated loan and the intended share
issue;
� a number of possible acquisitions in
addition to Roshield and Mattex which
either have not led to an acquisition or are
still being examined;
� the main investment projects, including
the continuous wide bleaching machine
for TenCate Protect in Nijverdal, the
Royal TenCate nv Annual Report 2006 13

construction of a geotextile plant in Zhuhai
(China) and expansion investments in the
TenCate Aerospace & Armour Composites
group, as well as the TenCate Grass group;
� the Nijverdal Master Plan, with the consequences
for the seven Nijverdal plants, as
well as the plans to establish aerospacerelated
industrial activities at Twente
airport;
� the deeply regrettable fatal accident at
TenCate Technical Fabrics on 13 March;
� corporate governance, leading among
other things to the amendment to the
articles of association approved at the
meeting of shareholders of 4 April 2006.
This included the splitting of the € 10 par
value share into four shares of a par value
of € 2.50, the cancellation of the financing
preference shares and the protection
preference shares and finally the
�
dematerialisation of the TenCate share;
the 2005 annual report and the related discussion
with the auditor, the quarterly
reports in 2006 and the latest estimates
for the 2006 annual results;
� the system used to grant options to the
management of Royal Ten Cate;
� the budget for 2007.
14
Royal Ten Cate nv Annual Report 2006
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.
WORKS COUNCIL
The Supervisory Board was represented at
most of the consultative meetings of the
Central Works Council.
SUPERVISORY BOARD COMMITTEES
The Supervisory Board has two committees:
the Financial Committee and the combined
Remuneration, Selection and Appointments
Committee. Their task is to prepare for
the analysis and decision-making in
relation to subjects within their specific
areas of knowledge, thereby increasing the
effectiveness of the full Supervisory Board.
FINANCIAL COMMITTEE
The Financial Committee comprises Messrs
E. ten Cate (Chairman), A.W. Veenman and
P.P.A.I. Deiters. The Committee met on two
occasions in 2006 in order to prepare for the
discussion of the half-year and full-year figures
in the full Supervisory Board. This took place in
the presence of the Executive Board, the
Financial Director and the external auditor.
The matters considered included the following:
� the 2005 annual report and the 2006
half-year figures;
� the report of the auditors KPMG, including
findings with regard to the administrative
organisation and internal auditing,
�
computerisation, taxes and expenses
claims. The independence of KPMG was
confirmed;
current legal proceedings and claims
and the associated risks;
� risk management, on which a report
appears on pages 35 ff;
� transfer pricing and in particular the
provision of the required documentation,
in order to avoid tax risks as far as
possible;
� treasury management, including the
�
establishment of a cash pool;
the IT policy, IT security and a code of
conduct for the use of e-mail, internet
and intranet.
� the operational audits at a number of
operating companies.

REMUNERATION REPORT
No changes were made in 2006 to the
remuneration policy set out in the 2005
annual report.
SALARY
As a result of the change to the system used in
the Hay Group Boardroom Guide, the market
image of the salary position of the Chairman of
the Executive Board will be based henceforth
on the job weightings expressed in Hay levels.
The previously applied categories (TenCate fell
within the B category) have been translated
into Hay levels.
The annual salary of Mr L. de Vries was
adjusted to 100% of the median of the
Hay system used. This resulted in an increase
of 7.4%.
The remuneration of the Executive Board is
stated in note 58.3 on page 110 of this report.
Protection in high-risk work
TenCate Protective Fabrics has developed TenCate Oasis, a fabric which protects workers in the aluminium industry against
molten metal drops and cryolite. When working with molten aluminium, there is a risk that it will not drip from the clothing but
will adhere to it. The heat will then penetrate the fabric, potentially causing severe burns. Cryolite is even hotter and adheres
even more. TenCate Oasis has a number of unique characteristics: it offers protection against molten metal drops, radiation
heat, flames and other risks associated with molten material. Oasis feels light and is flexible and comfortable to wear. It also
has excellent breathing and permanently flame-resistant characteristics.
The annual report fulfils the market requirements for transparency.
VARIABLE REMUNERATION
Mr L. de Vries received results-linked
remuneration in 2006 amounting to 50% of
annual salary as a result of having comfortably
exceeded the specified performance criteria.
Mr De Vries will also receive results-linked
remuneration amounting to 50% of annual
salary in respect of 2006.
Almelo, 28 February 2007
Supervisory Board
A.W. Veenman. Chairman
P.P.A.I. Deiters, Vice-Chairman
F.A. van Vught
C.W. Versteeg
E. ten Cate

The Boards
SUPERVISORY BOARD
A.W. Veenman (59) Chairman 1) 2)
Commenced in office: 1996; end of current term: 2008
CEO of Nederlandse Spoorwegen
Supervisory director of Rabobank Groep
Supervisory director of TenneT Holding B.V.
P.P.A.I. Deiters (63) 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 Berghave B.V. Venture Capital
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 Lowland Fashion
Investments B.V.
F.A. van Vught (56) 2*)
Commenced in office: 2000; end of current term: 2008
Member of the Group of Policy Advisors of the
Chairman of the European Committee
Member of the Executive Board of the European
University Association Member of the National
Innovation Platform
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.
16
Royal Ten Cate nv Annual Report 2006
Member of the University Grants Committee
of Hong Kong
Supervisory director of Rova N.V.
C.W. Versteeg (71)
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 (61) 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 (55), Chairman
P.H. van der Vorm (67), Member
MANAGEMENT COMMITTEE
The Management Committee comprises the
Executive Board and the following group and
corporate directors:
TenCate Advanced Textiles & Composites
F.B. Bruns (64)
TenCate Aerospace & Armour Composites
D. Hendriks (48)
TenCate Protective & Outdoor Fabrics
(Europe/Asia)
D. Olsen (52)
TenCate Protective Fabrics
(North America)
TenCate Geosynthetics & Grass
D.C. Clarke (48)
TenCate Geosynthetics
W.H. Smith (53)
TenCate Grass
TenCate Technical Components
B.R. Denekamp (51)
TenCate Enbi
Holding
J. Lock (60)
Corporate Director Finance & Administration
L.J. Kuipers (64) a.i.
Corporate Director Personnel & Organisation

L. de Vries
F.B. Bruns
D. Hendriks
P.H. van der Vorm
D.C. Clarke
D. Olsen
J. Lock
B.R. Denekamp
W.H. Smith
Royal Ten Cate nv Annual Report 2006 17

Materials that make a difference
TenCate develops and produces high-grade
functional materials. Markets are selected
which make functional demands upon materials,
for example as a result of legislation and
standards. TenCate operates in growth markets
in which personal security and protection play
a particularly important role. In many respects
our materials provide the required protection
on the basis of the developed functional
characteristics. In the eyes of the end-user,
TenCate materials must constitute an important
distinctive element in the end-product or
total concept.
Market requirements evolve and standards are
adjusted, or new materials are developed as a
result of technological inventions. TenCate is
characterised by a culture focused on progress
and further product and market development.
This increasingly takes place jointly with the
customer. In addition, TenCate applies a system-based
approach as far as possible: a composition
of materials with different functional
characteristics which are co-ordinated with
each other. Our broad technological base in the
field of textiles and related chemical processes
plays an important role in this regard. Intensive
internal co-operation therefore takes place in
order to make optimum use of the knowledge
and skills.
18
Royal Ten Cate nv Annual Report 2006
STRATEGIC FRAMEWORK
TenCate’s mission is underpinned by market
leadership and growth based on our technology.
This is achieved by providing high-grade
solutions in the form of materials and systems
with functional characteristics. The mission
has been translated into a strategy centred on
value chain management. Problem-solving
ability is guaranteed in the context of product
differentiation. In addition, TenCate applies
Reliable
Progressive
Knowledgable
Resourceful
user-end marketing, (technological) innovation
and cost control as elements of its strategic
policy. End-user marketing is playing an increasing
role, which is essential for a company
producing functional materials. TenCate is an
innovative company and once again acquired a
number of new patents in 2006 and aims to be
a leader in the technological field.
CUSTOMER REQUIREMENTS
TenCate has a wide diversity of end-users. An
important customer group comprises (suppliers
to) original equipment manufacturers (OEMs)
and the institutional market (public sector
bodies, including defence ministries). Institutions
such as hospitals, emergency services
and suppliers to these sectors also form part of
the major customer groups. In the artificial
grass market, the customer requirements
at the level of the individual player are even
relevant with regard to the safety and playing
characteristics of the pitch. Although customer
requirements are to a large extent related to
safety and protection, TenCate materials must
fulfil a wide range of functional characteristics
in the various markets.
An important factor is that there are usually
specified characteristics for the material.
End-user marketing is also focused on active
participation in the specification process, so
that the purchasing process takes place partly
on the basis of intrinsic aspects.
The commercial policy is increasingly directed
towards the provision of systems solutions.

TenCate has single-product systems and multiproduct
systems. In the latter case different
products are combined to form a system
solution. An example is an artificial grass
system which consists of artificial grass fibre,
backing, infill and a shock-absorbent underlay.
The commercial policy in 2006 can once
again be illustrated by a number of TenCate
materials:
� Cetex ® System 3 – triple-layer laminated
composite material, specially aimed at
new interior design in modern aircraft;
� GeoDetect/HydroDetect ® – detection
material incorporated in geotextiles which
records subsidence and breaching of
dykes;
� Geotube ® – for the cleaning of polluted
lakes in Sweden, the biggest order ever
received;
� the TenCate Thiolon ® artificial grass
system for the FIFA Home – a solution for
artificial grass based on Thiolon Xtreme ®
for top-flight sports (fulfils the FIFA Two
Star Recommended system requirements);
High-level TenCate materials
In close co-operation with Lockheed Martin, the American producer of commercial satellites, TenCate Advanced Composites USA
has developed a lightweight, high-grade composite material for the bearing structures of the solar-cell-powered A2100 satellite.
These solar array substrate panels are crucial for the energy supply to the satellite. The use of new material combinations and
special resin systems has made it possible to design extendable solar panels of a greater length. At the same time a considerable
weight saving has been achieved.
� TenCate Aramid ® Camouflage – solution
for flame-resistant fabrics with infrared
reflection and camouflage print for military
applications in the US;
� International Achievement Award 2006
from the International Fabrics Association
– three projects in the US based on
TenCate Mirafi® (geosynthetics).

Report of the Executive Board
GENERAL
Our strategy is set out briefly on page 7 of this
report. Value chain management occupies a
central place within the strategic policy.
The four pillars of this concept – cost control,
product differentiation, end-user marketing
and innovation – are monitored intensively in
each operating company. If the situation
requires it, the focus of the operationalisation
of the strategy must be shifted. In the markets
in which TenCate operates, the position in the
value chain must be such that TenCate can
continue to play a distinctive role. This should
support margin growth.
In the field of protective fabrics there
is increasing co-operation between our
European and American activities. This is
strengthening the joint position in the
value chain. TenCate is a leader worldwide
in the supply of protective concepts for
protective clothing. TenCate has been highly
successful with this in the United States,
particularly for military applications and firefighting.
In these markets TenCate is able to
build up a lead on the basis of innovative
products and good contact with decisionmakers
in end-markets. Action plans have
been introduced at the Dutch production
20
Royal Ten Cate nv Annual Report 2006
sites as part of the Master Plan with regard to
technological innovation and cost control.
Although the group has a strong position in the
field of composites in the core markets of
aerospace and armour, there is scope for a
further expansion of our position by means
of targeted acquisitions. The focus is primarily
on technology (innovation) and product
differentiation. This is still a relatively small
activity within TenCate, but one which is
showing above-average growth.
In Geosynthetics, the required positioning in
the value chain has almost been achieved.
Polyfelt, which was acquired at the end of
2005, has now been fully incorporated in the
TenCate Geosynthetics organisation and has
considerably strengthened our organisation.
There was a vigorous response to the
decrease in margins which emerged in the
Geosynthetics & Grass sector in 2006. The
main strategic movements in 2006 occurred
in the Grass group.
Within the Grass group greater emphasis is
being placed on cost control and end-user
marketing in order to implement the principles
of our strategic concept more fully. The
intended acquisition of the artificial grass
activities of Mattex Leisure Industries, which
will form part of TenCate Thiolon Middle East,
is an important step in our commercial
positioning, but it also means a reduction in
our cost base. The commercial alliances that
have been announced will strengthen our
end-user marketing in the commercial
implementation of our system approach in
the artificial grass sector.
FINANCIAL PERFORMANCE
RESULT AFTER TAX
Net profit rose in 2006 for the fifth year in
succession, this time to € 76 million. Adjusted
for income from divestments, net profit
rose from € 26.8 million to € 34.0 million
in 2006 (+27%). The main contribution to
this increase came from the Advanced Textiles
& Composites sector.
COMPOSITION OF THE COMPANY
Substantial progress was made once again in
2006 with the concentration on the two sectors
of Advanced Textiles & Composites and
Geosynthetics & Grass.

Analysis of 2006 results by sector
in millions of euros
Revenues
Advanced Textiles & Composites
Geosynthetics & Grass
Technical Components
Other
Operating result (EBIT)
Advanced Textiles & Composites
Geosynthetics & Grass
Technical Components
Other
Finance charges
Pre-tax result
Tax on profits
Result from participating interests
Result from ordinary operations
Minority interest
Result from divested activities
Net profit
2006
279.7
397.5
92.7
0.6
770.5
20.9
25.5
6.2
– 2.5
50.1
-8.0
42.1
– 11.4
3.4
34.1
– 0.1
42.0
76.0
2005
285.6
273.9
126.3
0.7
686.5
16.5
23.8
7.1
– 8.9
38.5
– 4.6
33.9
– 11.5
4.4
26.8
–
3.7
30.5
Difference
-2%
+ 45%
– 27%
–
+ 12%
+ 27%
+ 7%
–13%
–
+ 30%
+ 74%
+ 24%
+ 1%
– 25%
+ 27%
+ 149%
Organic
+ 8%
+ 2%
+ 6%
–
+ 5%
+ 26%
– 20%
+ 14%
–
+ 18%
Of which
currency
–
– 1%
– 1%
–
– 1%
– 1%
– 1%
– 1%
–
– 1%
EBIT margins
Advanced Textiles & Composites
Geosynthetics & Grass
Technical Components
Acquisition/
divestment
– 10%
+ 44%
– 32%
–
+ 8%
+ 2%
+ 28%
– 26%
–
+ 13%
2006
7.5%
6.4%
6.7%
6.5%
2005
5.8%
8.7%
5.6%
5.6%
Royal Ten Cate nv Annual Report 2006 21

The following were divested:
� On 25 April 2006: Plasticum – five operating
companies in the field of packaging,
supplying caps and customer-specific
closures. The Plasticum group generated
sales of € 36 million and a net profit
of € 0.8 million in 2005. This divestment
generated a result of € 2.7 million.
� On 2 August 2006: Synbra Group bv (50%)
– a European company operating in the
field of EPS applications for building
insulation and packaging for the food and
non-food sector. In 2005, Synbra Group
recorded sales (on a 100% basis) of
€ 262 million and – before goodwill amortisation
– a net profit of over € 8 million.
The divestment of Synbra Group generated
a result of € 39.3 million.
Preparations were also made in 2006 for two
acquisitions:
� Roshield, a Danish company in the field of
vehicle armour and personal protection.
Roshield generated sales of approximately
€ 14 million in 2006. The acquisition was
completed in mid-February.
22
Royal Ten Cate nv Annual Report 2006
� Mattex Leisure Industries, established in
Dubai and specialising in artificial grass,
especially monofilament fibres, with a
natural appearance.
These acquisitions will represent an important
strengthening of two of TenCate’s strategic
market groups, namely armour composites and
artificial grass.
REVENUES
Consolidated revenues rose 12% in 2006,
including 5% on an organic basis, –1% as a
result of currency effects and +8% due to the
net effect of acquisitions and divestments
(see the table on page 21).
The strongest organic sales growth came from
the Advanced Textiles & Armour group. That
was particularly the case in the United States,
where demand for safety materials remained
high.
The Geosynthetics & Grass group achieved
45% sales growth, mainly as a result of the
addition of Polyfelt.
The organic sales growth remained limited
to 2%, because of the hesitant American
economy in the second half of the year.
The higher raw material costs were largely
(70%) passed on to customers.
OPERATING RESULT (EBIT)
The operating result increased by 30%, including
+18% organically and +13% due to the net
effect of acquisitions and divestments.
Three of the four sectors showed a healthy
performance with high organic growth figures.
That was the case of fire-resistant safety
fabrics (particularly in the US), at Aerospace
& Armour, Technical Components (TenCate
Enbi) and in the Other Activities (Holding)
sector. By contrast, in the Geosynthetics
& Grass sector the operating result fell by 20%
on an organic basis. This was due to two
causes. The weakening of the US economy
in the second half of the year led to a decrease
in sales and underutilisation of production
capacity. The competitive position of the Grass
group was also weakened by a shortage
of fibres with a natural appearance (monofilament)
and increasing competition. After
careful consideration, this led to the intended
acquisition of Mattex Leisure Industries.

PERSONNEL COSTS
Personnel costs amount to 22% of sales.
There are large differences in the costs per
employee: approximately € 52,000 in the
Netherlands, € 45,000 in the rest of Europe,
€ 46,000 in the US and € 16,000 in Asia/
Australia. Although personnel costs are not the
only decisive factor in the choice of a location,
the differences are becoming increasingly
important on a global playing field.
TAXES
The tax rate fell from 33.8% to 27.2% in 2006.
This was partly due to a decrease in the
proportion of TenCate’s profit contributed by
American operating companies (with high tax
rates). There were also two incidental factors.
The reduction of Dutch corporation tax led
(paradoxically) to higher costs in connection
with a lower deferred tax receivable (effect
+2.3%). On the other hand, the improved
results in France led to the formation of a
deferred tax asset with a beneficial effect of
€ 1.8 million (effect – 4.2%).
INVESTMENTS
A total of € 43 million was invested in 2006,
against a depreciation level of € 23 million.
Organic growth requires the use of new tech-
nologies and capacity increases, and in some
cases bottlenecks have to be eliminated. Major
projects in 2006 were:
� TenCate Thiolon NL: 5 monofilament lines
and automation of packing.
� TenCate Thiolon USA: plant expansion and
two monofilament lines.
� TenCate Geosynthetics North America:
acquisition of a small nonwoven plant.
� TenCate Geosynthetics Asia: advance
payment for machines for geotextiles
plant in Zhuhai (China).
Cash flows
Net profit before divestments
Depreciation/amortisation
Increase in working capital of existing activities (–)
Investments
Other
Cash flow before acquisitions and divestments
Acquisition of Polyfelt
Divestments 1)
1) 2005: Mega Valves, Permess Europa
2006: TenCate Plasticum, Synbra Group (50%)
� TenCate Protect: continuous wide bleaching
machine and water treatment plant
(continuation from 2005).
CASH FLOWS
As a result of the divestment of TenCate
Plasticum and Synbra Group (50%) and the
fact that the intended acquisitions of Roshield
and Mattex were not completed in 2006,
the cash flow was strongly positive.
2006
34.0
23.1
57.1
– 4.0
– 43.0
– 5.2
+ 4.9
2005
26.8
19.3
46.1
– 23.9
– 26.2
– 0.2
– 4.2
– 71.9
+ 31.1
– 45.0
Royal Ten Cate nv Annual Report 2006 23
–
+ 64.0
+ 68.9

WORKING CAPITAL
The working capital fell slightly, both in
absolute terms and in days. The shortage of
some raw materials decreased, making it less
necessary to build inventories.
FINANCING AND INTEREST
As a result of the positive cash flow and the
divestments, it was possible to reduce the
interest-bearing debt from € 157 million to € 94
million at the end of 2006. The average interest-bearing
debt nevertheless increased from
€ 103 million to € 132 million. This was due
to the timing of the Polyfelt acquisition: € 71
million on 15 December 2005. In combination
with a rise in Euribor (from 2.6% to 3.5%) and
dollar interest rates, this led to substantially
higher interest costs: from € 4.0 million to
€ 7.0 million.
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 stated only if they have
been previously disclosed.
CHALLENGES FOR TENCATE
� Strengthening knowledge protection and
the patent position.
The knowledge domain is handled with
care in terms of personnel and in the field
of security and internal culture. Knowledge
protection must be incorporated early in
the development process.
� System approach
System solutions are a fairly new
development within TenCate. With its
broad technological basis and the
available knowledge, TenCate is in a
position to combine functional materials
into systems. This increases its problemsolving
ability and increases profitability.
� Communication
TenCate will harmonise the internet
communication by the various parts of the
group to a greater extent in 2007. Good
communication about what TenCatematerials
add to a system can reduce the
business-critical risk for TenCate with
A unique machine in the textile industry
In mid-2006, TenCate Advanced Textiles began using a process-driven continuous wide bleaching machine. The capacity of the
machine, combined with its fully integrated control system, makes the machine unique in the textile industry. The new machine
carries out three separate operations in a single procedure. That results in higher processing speed and efficiency in operation and
logistics. The quality of the materials used is also higher and the machine is more efficient in its use of energy, chemicals and
water. Microprocessors in the machine enable it to measure all the variables for each formulation and if necessary to adjust the
quantity of water and chemicals and the speed and pressure.
regard to systems to which TenCate
does not contribute. Communication can
increase the distinctive capability.
� Optimisation of partnerships
In order to implement end-user marketing
more efficiently, links are established with
commercial operators with direct access to
end-markets. An example of this is the cooperation
with parties in the artificial
grass market announced in 2006.
� Further strengthening of the position in
Asia and emerging European countries.
As in the case of geosynthetics, these
geographic areas will be relevant for the
intensification of activities in the other
market groups, either independently or
through partners.
� 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.

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 as a result of a strong market focus.
� Broad technological basis in the field of textile technology and
related chemical processes.
� Innovative and distinctive in the value chain.
� Leading world market positions in niches.
� Scale benefits mean that extensive 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.
POINTS FOR IMPROVEMENT
� Faster change to an even more market-focused organisation.
� Wider spreading of knowledge within TenCate, by devoting a
great deal of attention to training and education and an internal
management development programme.
� 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 the efficiency of
European sites, in addition to the initial steps in that direction in the
Netherlands.
OPPORTUNITIES
� Tighter regulations on safety and protection, such as the modernisation
programmes in defence (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.
� The positioning of TenCate as a single company based on a connecting
strategy among operating companies, with attractive customers.
� 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.
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.
� In the case of sharp fluctuations and strong rises in oil prices, these
can only be allowed for to a limited extent in market prices.
� Seepage of knowledge; a technology-oriented 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 businesscritical
risk.
Royal Ten Cate nv Annual Report 2006 25

� 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. 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.
INFORMATION TECHNOLOGY
Information technology (IT) is the nervous
system of an organisation. More extensive
internationalisation as a result of acquisitions
and the increase in worldwide activities
requires fast, efficient and secure communication
between systems and people. Hence there
is a greater focus on internal and external
communication. The vital role of IT then
becomes evident. Further progress was made
in this regard in 2006.
PROJECTS IN 2006
One of the most important projects which
TenCate conducted in 2006 was the implementation
of the security policy. Important aspects
are the logical and physical security of the
information systems. For example, the move
26
Royal Ten Cate nv Annual Report 2006
was completed from the group’s own computer
areas to a specialist hosting company. In order
to ensure continuity, access to the network
has been guaranteed by the installation of a
1 Gigabit internet ring.
IT STRATEGY AND POLICY
Royal TenCate has drawn up an IT strategy
memorandum. This provides among other
things for a clear separation between automation
supply and demand. On the basis of the
strategy, specific guidelines have been
developed for automation, and these have
been implemented. Flexibility and costeffective
deployment of automation will
continue to play an important role in the
future. The further standardisation of systems
will make a positive contribution to this.
ACTION PLANS IN 2007
In order to guarantee the quality of the
projects and the management of the IT
processes, targeted IT audits will once again
take place in 2007. In a number of projects
external specialists will be deployed to provide
advice and handle the implementation.
In the context of standardisation, work will
begin in 2007 on the implementation of the
JOMAR ERP package at TenCate Thiolon USA
and TenCate Protective Fabrics in America.
The Dutch companies will also take a decision
in 2007 on the ERP applications to be used.
The establishment of automation for the newly
acquired companies Roshield and Mattex
and for the move of the head office to a new
location in 2007 will need to be effectively
supervised.
A business case will also be drawn up in order
to link the TenCate companies to a joint
network, based on Active Directory. The main
advantages expected from this are greater
flexibility, rapid delivery and lower costs for
the connection of new companies.

PERSONNEL & ORGANISATION
Number of employees
(in staff years)
Netherlands
Rest of Europe
United States
Asia/Australia
Total
In 2006 the operating companies of TenCate
Plasticum (part of the Technical Components
sector) were demerged from the group.
All-in-one protection
Year end
2006
962
619
1,527
424
3,532
The organisational model is focused on managing the
ORGANISATIONAL DEVELOPMENT
The organisational model chosen in 2005 was
implemented during the year under review.
This model is focused on managing the worldwide
value chains in which TenCate operates.
TenCate strives worldwide for a corporate
culture with the following main characteristics:
� professionalism;
� openness;
� versatility;
� efficiency.
By being willing to learn from each other,
with the aim of being ‘best in class’, and
continuing to invest in the available high-grade
knowledge, we aim to further strengthen our
position in the global market. The core values
of our company are:
� entrepreneurship;
� innovation;
� focus on results.
worldwide value chains in which TenCate operates.
Our employees make the difference and
determine whether we fulfil our ambitions.
TenCate Pro-Tector is a protective material which has a wide range of uses and is suitable for multi-threat concepts. It offers
protection against bullets, knives and needles. This was previously only possible with a heavy construction, but TenCate
Pro-Tector is light, thin and flexible. It gives the wearer optimum all-in-one protection against a wide range of bullets, knives and
other stabbing weapons in accordance with various international standards. The uses include law enforcement, military, VIP,
coastguard and special forces.
Year end
2005
1,122
684
1,427
345
3,578
MANAGEMENT DEVELOPMENT
In the context of the investment in the
knowledge and skills of the management, an
active learning programme has been developed
in co-operation with TSM Business School.
This began in December 2006 and is due to run
for approximately one year. The programme
is focused among other things on the strengthening
of management qualities in general.
One of the objectives is the promotion of the
innovative capability, entrepreneurship and
situational leadership of the participants.
Projects relating to strategies, tactics and
operations form the common theme of the
training. All participants begin the course with
an individual development assessment.
PERSONNEL POLICY
The Personnel & Organisation policy memorandum
2006-2010 was drawn up in 2006, with
the title: ‘Employees that make a difference’.
The policy has the following main themes:
� strengthening competences and expanding
knowledge;
� transformation to more flexible employees
who think in terms of processes;
� enthusing and inspiring employees and
building loyalty;

� further developing, sharing and
guaranteeing knowledge and skills,
�
technologies and market intelligence;
appropriate succession planning;
� increasing international co-operation;
� promoting results-oriented working and
more performance-oriented pay;
� strengthening active coaching from P&O
to and for the line management;
� increased uniformity in policies and
guidelines from P&O;
� effective deployment and further
professionalisation of P&O systems.
A balanced intake and recruitment policy was
conducted in 2006. Depending on the available
potential and the further strengthening of
competences, it was decided to fill vacant
positions both internally and externally.
At the end of 2006 a campaign was launched
to recruit young technical and commercial
talent. By means of advertisements placed
in a number of media and a presence at job
fairs for example at the University of Twente
and Saxion College in Enschede attention
was drawn to TenCate as a progressive
multinational employer. The response to this
recruitment was very gratifying.
28
Royal Ten Cate nv Annual Report 2006
The training and development of employees is
an area of constant attention. At all levels,
employees can develop further in terms of
knowledge, skills and competences. This took
place intensively in 2006 by means of on-thejob
training, specialised training courses, skills
training and coaching by internal and external
experts.
Performance interviews at ‘CAO 1’ level began
to be conducted in two operating companies
in the Outdoor & Protective and Armour
& Aerospace groups in the first half of 2006.
In close consultation with the joint works
council of these groups, this led to approval
of the request to introduce performance
interviews at ‘CAO 1’ level in the other
operating companies in 2007 (extending into
2008).
EMPLOYMENT CONDITIONS
The global remuneration policy for senior and
upper management developed in 2005 was
transposed to specific regions such as the US
during the year under review. The employment
conditions of acquired companies are also
being harmonised with those of TenCate on a
phased basis.
The framework provided by the industry-wide
collective labour agreement for the fashion,
interior, carpet and textile industry concluded
for the period 2005-2008 was given further
substance in 2006. Within this framework,
TenCate wishes to introduce more customised
employment conditions, in consultation with
the trade unions and the Central Works Council.
The new pension scheme for TenCate
employees came into force on 1 January 2006.
It is an average salary scheme. The early
retirement scheme was discontinued as a
result of the legal changes on 1 January 2006.
To compensate for this, there is higher pension
accumulation for retirement from the age of
65. As a result of the introduction of a new
transitional scheme, the higher accumulation
will also apply to past membership years.
In the new scheme the higher accumulation
can be used to bring forward the actual
retirement date.

TenCate believes it is important that
employees should continue to receive good
incomes in the future. A life course savings
scheme was therefore introduced in 2006.
20% of employees took part in this scheme
in 2006. They can save for the life course
scheme from various financial sources.
TenCate has arranged group health insurance
and employment-related employers’ insurance.
If an employee chooses to take part in this
group insurance, TenCate contributes to the
costs. These insurances are part of the policy
of further reducing and controlling sickness
absence.
REPRESENTATIVE CONSULTATION
Many subjects were discussed with the
Central Works Council in 2006. The Central
Works Council played a constructive role,
particularly with regard to acquisitions
and divestments,
The Central Works Council made an important
contribution to the introduction of the code of
integrity and the associated whistleblowers
scheme. It was intensively involved in the
recommendation processes concerning the
sale of the Plasticum businesses, the sale of
the interest in Synbra Group, the co-operation
with GreenFields, the appointment of a
member of the Executive Board and the
acquisition of the Danish company Roshield.
In the periodic consultation with the management,
the Central Works Council fulfilled
its reporting role in a very appropriate way
with regard to the activities in the operating
companies. Under the heading of employment
matters, subjects are regularly placed on the
agenda which are of importance for all
TenCate employees, such as the life course
savings scheme, the absenteeism policy,
supplementary working conditions specified
in the collective labour agreement and
consultations with employee organisations.
SOCIALLY RESPONSIBLE
ENTERPRISE
Sustainable enterprise is an integral part of
TenCate’s operations. The operating companies
have sustainable production high on their
agenda. That is evident in, among other things,
the ISO 14001 certification obtained by most
of the Dutch operating companies and the
investments made.
TenCate formulated central policy principles
for socially responsible enterprise in 2006.
These include the following key points:
� environmental protection in the production
process;
� product quality;
� safety;
� employee expertise;
� integrity;
� innovation
� respect for society.
These central policy principles are being
further developed in terms of policy with
measurable criteria for the whole company.
Royal Ten Cate nv Annual Report 2006 29

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 exerts its influence from the supplier’s
position in order to achieve sustainable
enterprise objectives throughout the value
chain. As a result of this chain approach,
it is possible to achieve objectives which also
have an impact outside the company itself.
TenCate promotes consideration of sustainable
enterprise by demonstrating best practices
through internal media. Good projects are
demonstrated. Operating companies are
encouraged to put forward their own projects.
ENVIRONMENTAL PROTECTION
Most Dutch production sites have been certified
in accordance with ISO standard 14001.
This environmental protection system is the
basis on which TenCate strives to limit the
use of raw materials, water and energy
consumption and emissions. Working jointly
with raw material suppliers and customers, the
company continuously examines possible ways
of reducing environmental effects. Examples
include replacing chemical additives by
environmentally friendly materials, improving
the production process, reducing energy and
water consumption, reusing hot process water
and analysing energy and waste flows.
TenCate only uses chemicals and paints that
are included in the textile environmental
database in Veenendaal.
TenCate is working constantly on the further
development of the production system, taking
into account the increasing environmental
regulations. These investments in the machine
fleet have a positive effect both on the
environment and on the quality of the products.
TenCate Advanced Textiles began using a new
continuous wide bleaching machine in 2006.
It is an extremely innovative machine for the
textile sector because of its very advanced
computer-controlled operation. This machine is
the result of intensive co-operation between
TenCate and the builder of the machine. Prior
to its construction, TenCate commissioned
the University of Twente to carry out a
detailed analysis of the pretreatment process.
This resulted in a pretreatment machine that
is unique in the sector worldwide and
handles energy and water very efficiently.
In combination with its own water purification
system, in which biogas can be produced,
Partner of the Johan Cruyff Foundation
it is expected to deliver an energy saving
of 7%.
The TenCate operating companies devote a
great deal of attention to the control of waste
flows. 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.
By first ascertaining where any mass losses
occur, a solution can be devised for each unit.
Further in the chain a saving has been
achieved in the waste flows by shipping
products from the TenCate Grass group to
customers in plastic sleeves rather than cardboard
boxes.
Operating companies have also entered into
agreements with industry associations to
reduce water and energy consumption at
industry level. These agreements have been
set out in a covenant. The aim of this covenant
is to achieve an energy saving of 10% within
10 years. This will be achieved by drawing up
and implementing an energy-saving plan every
three years, with possible savings being
weighed up against the level of investment.
TenCate is a corporate partner of the Johan Cruyff Foundation. TenCate Thiolon is a founding partner of Cruyff Courts KNVB
pitches. Approximately 100 Cruyff Courts KNVB pitches are being laid in the Netherlands in co-operation with the KNVB.
Cruyff Courts are grass plots laid in accordance with a fixed pattern, with an artificial grass base that is safe and able to
withstand intensive use. A Cruyff Court encourages young people to take part in sport and football in their own district. The aim is
to promote playing together, integration and social contact.

The covenant looks expressly at possibilities
for saving energy throughout the chain.
QUALITY
The operating companies use operational
management systems and apply high quality
standards. Most of the companies are qualified
in accordance with the ISO 9001 standard.
In view of the demands made upon TenCate
products, quality plays an important role. Some
customers apply additional quality standards
which must be met, as in the case of materials
for aerospace applications. As a result of close
quality monitoring during the production
process, TenCate products meet strict quality
requirements.
SAFETY AND EXPERTISE OF EMPLOYEES
A safe working environment in TenCate worldwide
has the utmost priority. Safety has to do
with safe machines and personal protection
equipment which makes work safer. TenCate
creates a safe working environment for all its
employees and encourages its employees to
work safely by means of information and
training. Internal training programmes are held
to make employees constantly alert to possible
risks. In spite of this, a fatal accident occurred
at one of the TenCate Advanced Textiles sites.
This accident is very greatly regretted.
Measures have been taken locally in order to
prevent any recurrence.
In addition to the legal requirements, research
is carried out on the level of exposure to
occupational risks. All employees are subject
to a periodic occupational health examination.
This covers subjects such as the general
physical condition, hearing and working
atmosphere.
Quality, Health & Safety and Environment
officers have been appointed within the
operating companies. They monitor the
situation in the operating companies with
regard to these areas.
INTEGRITY
TenCate has drawn up a code of integrity and
rules concerning persons of trust. The code
forms the basis for all actions of our operating
companies in the Netherlands and abroad.
TenCate enters into relationships with those
around it as a supplier, developer, partner, etc.
These relationships are based not only on
trust, our technological knowledge and skills or
the quality of our products, but also on our
working methods and our treatment of the
environment and social organisations. The
code is intended to contribute to this trust.
TenCate therefore adheres to this code of
integrity and expects all its employees to do
likewise. The code of integrity concerns everyone
who is employed in TenCate or its
operating companies. The code is inextricably
linked to each individual contract of
employment. In order to support this code,
a central compliance officer and a person
of trust have been appointed. The code is
included in full on the website.
Because TenCate purchases some raw
materials, particularly raw cloth, in low-wage
countries, a code of conduct has been drawn
up. Suppliers are asked to sign the code,
thereby declaring that they will act in
accordance with the UN Declaration of Human
Rights, the UN Declaration of Children’s rights
(article 32:1), International Labour Organisation
(ILO) agreements on forced labour, child labour
and equal treatment of employees. Annual
visits are made to verify whether the suppliers
are indeed adhering to this code.
Royal Ten Cate nv Annual Report 2006 31

Most chemicals and synthetic fibres are
purchased from large multinationals. These
companies are also requested to sign the code
of conduct. In most cases they have a clear
policy on sustainable enterprise.
INNOVATIONS
TenCate is constantly engaged in innovation in
relation to its products and production
systems, with a focus on safety and protection.
TenCate works with its knowledge partners to
achieve this. The company aims to continually
improve the performance of its products in its
product development.
RESPECT FOR SOCIETY
Many of TenCate’s products contribute directly
to the safety and protection of users. Our
involvement in the community of which we
form part is evidenced by, among other things,
our support for local cultural and sporting
events in the Netherlands and abroad.
TenCate is a corporate partner of the Johan
Cruyff Foundation, which enables less
advantaged children in the Netherlands to take
part in sports. TenCate Thiolon is a founding
partner of Cruyff Courts. This organisation lays
artificial grass playing surfaces for young
people in urban areas. TenCate Thiolon has
also entered into a partnership with the Royal
Dutch Football Association (KNVB) in order to
bridge the gap between street football and
club football by laying Cruyff Courts KNVB
pitches. This involves co-operation with
professional football clubs and local authority
neighbourhood organisations.
MEASURABILITY
The aforementioned central principles in the
field of sustainable enterprise are being
further developed. These central principles
allow centralised direction based on
quantitative principles. They also enable
the effects of the policy to be measured.
POST BALANCE SHEET EVENTS
At the beginning of February 2007 TenCate
reached agreement on the acquisition of the
artificial grass activities of Mattex Leisure
Industries by means of an assets/liabilities
transaction, with an acquisition price of
US$ 178 million. Mattex is a Dubai-based
producer of artificial grass fibres and other
products. Its artificial grass activities are being
taken over by a newly formed company,
TenCate Thiolon Middle East LLC. The
Very Light Jet with the aid of TenCate composites
acquisition was partly financed by an issue
of shares. It is expected to be completed in the
first quarter of 2007.
The acquisition of Mattex, which specialises
mainly in the production and sale of monofilament
fibres, considerably strengthens the
position and further development of TenCate
Thiolon, in both a strategic and an operational
sense. TenCate Thiolon can now respond more
effectively to demand in both the volume
segment and the market segment for customerspecific
fibres and artificial grass systems.
The TenCate Grass group expects to achieve
synergy benefits through increased efficiency
and economies of scale.
In mid-February 2007 the acquisition of
Roshield was completed. Roshield is a leading,
innovative company in the European market for
vehicle armour and personal protection.
The acquisition price was € 34.7 million. The
company is based in Odense (Denmark).
Roshield will form part of the TenCate
Aerospace & Armour Composites group. The
technological knowledge, distribution facilities
and activities of TenCate and Roshield are a
good fit. The two companies co-operate
commercially in the provision of solutions
Embraer had for some time been looking for possible ways of using composite materials in its range of executive aircraft.
With technical support from TenCate Advanced Composites and TenCate Cetex®, the aircraft builder has developed a number of
wing components as part of its Very Light Jet programme. After a qualification process, the thermoplastic Cetex laminates are
incorporated in the ribs in the stabilisers of the Phenom 100 and 300. The main principles in the design of these jet aircraft were
optimum comfort, outstanding performance and low operating costs. The business jets will come onto the market in 2008 and
2009 and will carry 6 to 9 passengers over a distance of 2,500 km at Mach 0.7.

for ballistic protection. The acquisition
strengthens TenCate’s leading position in the
European market for personal protection and
vehicle armour.
OUTLOOK
TenCate’s strategic core markets offer good
prospects. Barring unforeseen circumstances,
a substantial increase in sales and profit is
expected, partly as a result of the recent and
intended acquisitions.
The profit growth in 2007 compared to the
2006 net profit, corrected to take account of
divestments, is expected to be at least 25%.
In the field of protective fabrics, above average
growth is expected particularly in the United
States. The outlook is also favourable for composites
(armour and aerospace), partly due to
the acquisition of Roshield. Roshield has
recently received long-term orders worth
approximately € 20 million.
The acquisition of Mattex is expected to be
completed in the near future, subject to the
necessary formal approvals from local authorities.
The strengthening of the position of
Many of TenCate’s products contribute
directly to the safety and protection of users.
TenCate Grass in the value chain is expected to
have a significant positive effect on sales and
results. TenCate Thiolon Middle East (Mattex)
is expected to have a strong positive effect on
net profit, having regard to the low cost base.
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. The 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.
� 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.
Royal Ten Cate nv Annual Report 2006 33

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, margins
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 developing the remuneration policy and
assessing the performance criteria for
members of the Executive Board.
� 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.
Safe covering for waste water plants
To comply with tighter environmental legislation, a US producer of viscose had to cover two open waste water plants. The site,
comprising two 160 x 160 metre open lagoons, was filled with a five-metre-thick marsh-like layer of mud. An extremely strong,
high-grade geotextile from TenCate was used to cover the lagoons. As a result of the use of these geotextiles, the earth-moving
could be carried out using vehicles that were able to travel across the covered lagoons. A conveyor belt system would have been
far more expensive. With this solution from TenCate the system meets all the environmental requirements for the years ahead and
the site has been safely covered.
� 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.
Operating companies have long
implemented major elements of socially
responsible enterprise. In order to ensure
that the policy is widely disseminated, it is
increasingly publicised internally.

RISKS AND RISK MANAGEMENT
The niche markets in which Royal Ten Cate
operates – protective fabrics, aerospace,
antiballistics, geotextiles and artificial grass –
entail a spreading of strategic and commercial
risks. Moreover, TenCate conducts these activities
in most cases on four continents, each
with its own dynamic. TenCate is therefore not
part of a monoculture. Consequently, none of
the risks detailed below will have a dominant
influence. Risk management nevertheless
continues to be co-ordinated at group level.
RISK MANAGEMENT IN 2006
On the basis of risk assessments from previous
years, it was decided in 2005 that priority
would be given in 2006 to the strengthening of
the marketing and sales functions, product
renewal, the protection of intellectual property
and the attraction and retention of good key
officers.
Good progress was made in a number of areas
in 2006. For example, much more attention is
now devoted to the protection of intellectual
property and its timely patenting. The strengthening
of the marketing and sales functions was
also a central theme in 2006, and the career
development of key officers is now monitored
more closely at group level.
The most important form of risk management
is direct contact between the Executive Board,
the group managements and the 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.
1. Market risks
The market risks differ in each niche. In some
niches, such as base fabrics for professional
wear, there is fierce competition and high price
elasticity. In addition, production of less
distinctive products is gradually shifting
to Asia.
In other niches, such as those for safety fabrics,
antiballistics, geotextiles and artificial
grass, TenCate has a technical lead combined
with market leadership. That provides no
guarantee for the future. Products which reach
the end of their life cycle must be succeeded
on time by new versions. 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.
Finally, there are niches in which development
programmes last many years, such as the
aerospace market. Here the development is
reasonably stable, being protected by
qualification processes. A precondition is of
course that TenCate adheres to the quality
guidelines specified by the customers.
Although in various niches there is a dependence
on very large customers, at consolidated
level no single customer accounts for more
than 3% of sales (2005: 4%), while the five
largest customers collectively accounted for no
more than 9% of sales in 2006 (2005: 11%).
Royal Ten Cate nv Annual Report 2006 35

2. Raw material risks
Prices in the commodity market may fluctuate
widely. The price of plastics is determined
indirectly 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 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. Ten Cate operating companies
will increasingly participate jointly in the
negotiations with large suppliers, in order
to achieve a maximum result from the
negotiations.
3. Environmental risks
TenCate’s environmental policy is based on
minimising any impact on the environment.
Periodic inspections are carried out both centrally
and by local authorities, and measures
are taken in order to avoid environmental risks.
Textile finishing in particular may involve the
use of chemicals which must be covered by
guarantees. The waste water from the textile
finishing process is treated in provincial water
treatment plants. In June 2007, a new internal
water treatment plant will enter service at
Nijverdal-Noord. It has cost € 2.2 million
but will considerably reduce the future
environmental impact.
TenCate considers that the environmental risks
have been limited as fully as possible. Environmental
co-ordinators have been appointed at
local level who know the local situation and
implement the local laws and regulations.
4. Product development risks
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-tomarket
is too long, TenCate will lose a large
part of its competitive advantage. The product
development process has been structured in
accordance with strict procedures and criteria.
These processes were evaluated and, where
necessary, adjusted once again in 2006.
TenCate spall liners provide protection against metal splinters
TenCate has developed a spall liner, a material which protects occupants and equipment against serious anti-tank threats.
This spall liner ensures that after an impact metal splinters do not find their way through the entire vehicle, but are deflected into
a limited area like a ray. The material has been developed in co-operation with the Dutch Army.
The TenCate spall liner has been selected for the Dutch CV9035 vehicle project due to its low weight and high effectiveness.
Commercial production began in August 2006. TenCate’s spall liners have also been fitted in other vehicles, such as the Leopard II
tank and BVS10 transport vehicles.
5. Production and product liability risks
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. With regard to the processing of such
claims, work has been carried out to tighten
the procedures applied by the operating
companies, with a view to more critical and
objective assessment of claims.
6. Management risks
It is increasingly the case that having the right
management for a group or operating company
is the main concern for TenCate. The combination
of strategic insight, commercial and
interpersonal skills as well as decision-making
ability appears to be less widely spread than
we would wish.

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. The selection criteria for new
management have therefore been tightened.
Another risk is dependence on key personnel,
often with an R&D background. It is necessary
to ensure that this expertise is retained
and shared across the organisation. This is
achieved by guaranteeing knowledge. We are
aware that it is people who make or break a
company. TenCate endeavours to create the
right mentality through a culture of robust
task-setting, if necessary with confrontation,
but not without an appropriate measure of
humour.
7. Insurable risks
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.
8. Currency risks
Approximately 50% of TenCate’s sales are
denominated in euros. The main currency risk
incurred by TenCate is in respect of the US dollar
(45% of sales) and a number of more or less
dollar-related currencies such as the Hong
Kong, Singapore and Australian dollar and the
Chinese renminbi.
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. Translation risks arising
from the ownership of operating companies
outside the eurozone were not hedged up to
2004. In view of the fact that American operating
companies make a substantial contribution
to the result, their profit has been hedged in
dollars since 2005. At the beginning of 2007 a
contribution to net profit of over $ 20 million
was hedged with a put option at € 1 = $ 1.35.
In this way the translation risk of a currency
effect on the results of TenCate is limited with
regard to the dollar. Translation risks outside
the euro and dollar zones only affect 5% of
TenCate’s results and are therefore not
hedged.
9. Interest rate risks
The financing of the group is more than 90%
centralised. The risk of an interest rate rise is
in principle 90% hedged in the subsequent
year and 75% and 50% respectively for the
following years, taking into account expected
interest rate trends. The preference is to use
caps for this purpose. A rise of one percentage
point in interest is estimated to have a
negative effect of € 0.7 million on the pretax
result in 2006.
Royal Ten Cate nv Annual Report 2006 37

10. Risks of pension provisions
TenCate has placed the pension provision for
Dutch employees with Stichting Pensioenfonds
Koninklijke TenCate. This pension scheme is
designated as defined benefit under IFRS
reporting rules. A sharp fall in prices on international
securities exchanges could 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 scheme was converted
from a final salary scheme to an average salary
scheme at the beginning of 2006. As a result,
the risk of the influence of raises in salary
in the pension provision has decreased.
In this regard the pension fund itself has taken
measures and will take further measures
within its investment policy, partly as a result
of the Financial Assessment Framework
(including interest rate risk management),
resulting in a lowering of the risk profile. In the
other countries there are defined contribution
schemes.
11. Tax risks
Disputes with tax authorities in various countries
constitute a growing risk, particularly
with regard to the issue of transfer pricing.
TenCate is involved in a number of disputes
with tax authorities. However, sufficient
provisions have been set aside. Appropriate
transfer pricing documentation has been
drawn up.
12. Continuity of information provision
In principle, each group has its own
information system. For most Dutch operating
companies there is a shared service centre.
Measures have been taken to guarantee
continuity. The main hardware for the
Nijverdal-based companies has been
accommodated in a highly secure remote
computing centre. As announced in 2005,
an IT security policy has been drawn up
incorporating the necessary security measures.
13. Legal risks
TenCate is involved in various legal proceedings
resulting from its 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.
Safe camping
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.
TenCate is confident of the outcome.
The attachment of the Synbra shares was
lifted prior to the sale by the issue of a bank
guarantee of € 1.8 million. A provision of € 8.7
million has been recognised in respect of the
total warranties and claim risks.
14. Risk management and system
of measures
Risk management is a responsibility of the
management at all levels. In addition, corporate
rules have been drawn up for powers,
audits, treasury, investments, IT management,
budgets, the greatly expanded monthly
reporting, insurances and legal matters. All
managers and controllers sign a twice-yearly
letter of representation on the financial
reporting/internal control.
All financial regulations are included in the
TenCate Accounting Manual. From 2007, the
managements and controllers of the operating
companies declare for each report that the
results have been prepared in accordance
TenCate has introduced a new flame-resistant fabric for tents. This quality is particularly suitable for group tents, such as tepees.
Because liquids are boiled and fires are lit in these tents, flame-resistance is very important. TenCate has developed an inherently
flame-resistant outdoor fabric for this type of application. This fabric offers high-quality, long-lasting flame-resistance, providing
safety for campers.

with the accounting manual. This manual
can be accessed by authorised parties via
the internet.
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. Rules concerning persons
of trust were introduced in 2006. Any
employee who suspects abuse can report it
to a person of confidence. The rules are set
out on the TenCate website.
STATEMENT
With regard to the financial reporting risks, the
Executive Board considers:
� that the risk management and control
systems provide a reasonable degree of
assurance that the financial reports are
free of material misstatements;
� that the risk management and control
systems have operated correctly during the
year under review;
� that there are no indications that the risk
management and control systems will not
operate correctly during the current year;
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.
Royal Ten Cate nv Annual Report 2006 39

Safety and comfort for first class air travel

TenCate Cetex® System 3 is used among other things as a floor component for fully adjustable first class aircraft seats. Because
these seats are often fitted diagonally, aircraft manufacturers have encountered design problems. These have now been remedied
by using a floor plate made of TenCate Cetex System 3, which, with a seat and a passenger, can withstand a crash with a force of
16 G. The composite material contributes therefore to a safe and comfortable flight.
TenCate Cetex System 3 has a lightweight sandwich construction based on thermoplastics. The panels can be fitted rapidly,
meet strict aviation standards for fire safety and have a high surface quality. In this way TenCate is also helping to reduce fuel
consumption and emissions.

Advanced Textiles & Composites
KEY FIGURES
Advanced Textiles & Composites 2006 2005 2004 2003 2002
in millions of euros
Revenues 279.7 285.6 229.9 169.9 175.6
Operating result (EBIT) 20.9 16.5 11.1 8.6 8.2
EBIT margin 7.5 5.8 4.8 5.1 4.7
Investments 11.7 13.2 4.0 6.0 3.7
Depreciation and amortisation 6.1 6.2 5.6 4.1 4.3
Net assets 124.9 124.2 113.6 78.1 77.3
Staff years at year-end 1,203 1,171 1,204 813 855
Return on net assets (%) 16.8 13.3 10.3 11.6 11.1
ACTIVITIES
The Advanced Textiles & Composites sector
consists of the following market groups:
� TenCate Protective & Outdoor Fabrics
High-grade protective and safety fabrics
for the professional wear market, as well
as outdoor fabrics for the high-quality
segment of the tent and awning market
42
Royal Ten Cate nv Annual Report 2006
� TenCate Aerospace & Armour
Composites
Composites intended in particular for aerospace
and special industrial applications
as well as for armour, including plate
materials with bullet-proof and fragmentproof
characteristics and for protection
against needles and knives.
SALES AND RESULTS
Sales in this sector amounted to € 280 million
during the year under review (2005: € 286
million). The slight decrease in sales compared
to 2005 is due to the divestment of the
Permess/Multistiq group. On an organic basis,
sales rose by 8%. The operating result
grew strongly to € 20.9 million. (2005: € 16.5
million). On an organic basis the operating
result was 26% higher.
TenCate has a target for the EBIT margin of at
least 8%. Although the EBIT margin during the
year under review rose to 7.5% (2005: 5.8%), it
is not yet at the required level. This is partly a
consequence of temporarily higher costs due to
extensive investment programmes.
INVESTMENTS
The level of investments in 2006 was higher
than the level of depreciation of € 6.1 million.
The total investments in this sector (€ 11.7
million) showed a decrease compared to the
previous year.

An important investment activity concerns the
production of protective and outdoor fabrics in
the Netherlands (Nijverdal). The plans for the
gradual concentration of the production
processes – in the context of the Nijverdal-
Noord Master Plan – were officially announced
midway through the year under review. At the
same time, work began on the modernisation
and reorganisation of the production process,
with the aim of achieving efficiency improvements
and cost reductions. Innovative production
processes have also been introduced
(including digital finishing under the Digitex
name), with the aim of product development
and cost savings. The entry into service of the
new continuous wide bleaching machine for
textile finishing in mid-2006 was also an
important step forwards. This new technology
has a positive effect on quality, capacity, costs
and delivery reliability.
Another major investment programme currently
being implemented (over € 13 million) is
aimed primarily at a increasing the production
capacity for advanced composites for aerospace
activities.
Further improvement in fire brigade safety
TenCate Protective Fabrics has launched Millenia Light® in the European fire brigade market. Millenia Light is based on high-
strength fibres. The top layer is extremely resistant to tears, cuts and wear. The material is durable and also remains strong and
flexible after exposure to heat and UV rays and performs almost 100% better than any top layer in standardised flame tests.
Millenia Light is the lightest material that offers such high wearing comfort and heat resistance.
PROTECTIVE & OUTDOOR FABRICS
MARKET POSITION AND STRATEGY
TenCate is the market leader in protective
fabrics in the United States (particularly in the
firefighting market) and in Europe (mainly the
industrial market) and therefore has a leading
position worldwide in high-quality concepts for
personal protection in the professional wear
market, including:
� firefighting and defence market
� industrial market and
� health sector.
TenCate has specialised in the production
of safety fabrics. These are marketed under
TenCate brand names. 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 means of competition is
efficient production, particularly for volume
products. The innovative multi-year (investment)
projects are intended to significantly
reduce the cost base.
Millenia Light is an example of the commercial synergy between the TenCate companies in the Netherlands and the United States.
For the fire brigade market it is a major advance. Various fire brigades have now ordered suits with a Millenia Light top layer.
TenCate conducts a policy aimed at management
of the value chain. Combined with the
acquisition and subsequent integration of
Southern Mills, as well as other factors, this
has considerably strengthened the market
position in the past few years. End-user
marketing and product differentiation have
been successful. The company anticipates
the various safety requirements and risks
in a wide range of work situations by
marketing fabrics for specific risk areas. The
scale which TenCate has achieved makes it
possible to exchange products and technology
between the various geographic markets.
This generates savings in development costs,
gives rise to purchasing advantages and gives
TenCate a broad product portfolio. A market
share in Asia will be developed on the basis of
TenCate’s existing infrastructure.

GENERAL PERFORMANCE IN 2006
Continued strong growth was recorded in the
European and particularly the North American
market for protective fabrics for protective
clothing and professional wear in 2006.
TenCate once again gained market share
on these continents as a result of its specialisation
in these markets and by means of
a direct approach to end-users. High-grade
safety fabrics account for a growing share
of sales.
A new generation of safety fabrics has been
developed for the market for high-grade fireresistant
protective clothing, with high
wearing comfort for both the military market
(TenCate Aramid Camouflage) and the
industrial market (TenCate TecaSafe Plus).
TenCate works continuously to improve the
wearing comfort of high-grade safety fabrics
(moisture regulation, air permeability, weight).
There is growing demand for such products,
particularly in the American market. TenCate’s
market position in the US resulted in a number
of large defence orders for fire-resistant
camouflage fabric in 2006.
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. Through
Southern Mills, TenCate has a considerable
share of the firefighting market in North
America, which is also of importance for the
European market position. For example, the
concept was extended from North America to
the European firefighting market under the
brand name TenCate Millenia ® in 2006 with
Millenia XT and Millenia Light. Different
functional layers are combined to produce a
security concept. The extensive specialisation
in fire-resistant protection in North America
provides further good opportunities in the
European market and will improve TenCate’s
position in the firefighting market. Growth
was also achieved in the industrial market
in Europe.
The new environmentally friendly bleaching
line entered service at the Nijverdal-Noord
production site in mid-2006. This is unique
within the textile industry and optimises the
production process. This machine is also
of importance for the DigiTex project, because
it enables a considerably higher quality
level (degree of whiteness) to be achieved.
TenCate iTex ® is an innovative technological
development for digital textile finishing.
The digitisation of the processes makes them
easier to control. This technology will also
open up new markets as a result of new
functionalities in fabrics. The iTex ® project was
awarded a European subsidy in October 2006.
The development, with 26 companies and
(scientific) institutions, is currently in the initial
phase. It will be some time before the first
products appear in the market.
The market for outdoor fabrics remained stable
again in 2006. In the outdoor fabrics market
TenCate produces awnings and tentcloth for
the quality segment. It does not focus on the
market for small tents, which are usually made
of cheaper materials. Ten Cate does not
produce any products based on materials such
as PVC and others which entail health risks.
In addition to quality, TenCate devotes
particular attention in its production activity
to environmental and health aspects and
safety.
TenCate material provides the basis for a successful composite aircraft
Over the past seven years, TenCate Advanced Composites USA has supplied composite material to Cirrus Design Corporation for
the production of the successful SR20 and SR22 aircraft series. TenCate supplies large runs of materials of a consistently high
quality, with which Cirrus produces more than 60 aircraft per month. TenCate’s delivery reliability with large volumes of aviation-
qualified composite materials enables Cirrus Design to produce one of the best commercial aircraft that is currently available.

OUTLOOK
The outlook remains favourable for the
protective fabrics market for protective
clothing and professional wear. TenCate is well
positioned in this market. It is increasingly
tailoring its product range to specific risk
groups and has enhanced the concept of enduser
marketing. The production capacity in the
United States will be further expanded in 2007.
As the market leader in tentcloth, TenCate
observes the market trends and responds
with innovations such as lightweight and
flame-resistant fabric, contemporary designs
and maintenance-friendly fabric. TenCate
strengthens its market position by creating
added value. TenCate continues to focus
on environmentally friendly fabrics and
finishes. The emphasis is on further
quality improvement and customer-specific
requirements.
In protective fabrics TenCate has a leading position
worldwide in high-quality concepts for personal protection.
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. TenCate concentrates on
applications of composites with a high degree
of functionality, in which weight saving is
often not the only important or decisive
characteristic. 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 basis 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 partner in development programmes 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
Cetex ® ) were developed for the construction of
the latest generation of aircraft, but also have
other applications. In addition to a weight
saving, thermoplastics deliver cost benefits for
the aviation industry in the processing of
components which make up the structure of an
aircraft. There has been a large increase in the
use of composite materials in the aviation
industry. This has been prompted by the desire
to build aircraft more economically and to limit
fuel consumption and noise emissions.
The innovative developments at Airbus in
the field of advanced materials have greatly
accelerated the use of composites. The Airbus
A380 includes a substantial proportion of
composites. The use of composites will
increase further in both the new Airbus A350
and the new Boeing 787, which will enter
the market in 2008. Approximately half of the
primary structure of the Boeing 787 will
consist of composites. TenCate occupies a
good strategic position. The increase in Cetex ®
applications in the past few years has exceeded
the growth of composite use as a whole.
TenCate Armour Composites
TenCate is active worldwide in this market and
occupies an important position in the complete
range of personal and vehicle protection.
The position in the aviation industry is an
advantage. In terms of its structure, the market
Royal Ten Cate nv Annual Report 2006 45

for vehicle protection has great similarities
with the aviation industry. TenCate focuses
increasingly on security 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
and aviation).
GENERAL PERFORMANCE IN 2006
The American activities grew relatively strongly
again in Aerospace & Armour Composites in
2006. This is closely related to the activities of
the US Army and current government budgets.
The growth elsewhere in the world is more
moderate. The Aerospace segment grew
substantially, but armour composites still
account for the largest share of sales.
46
Royal Ten Cate nv Annual Report 2006
Aerospace
This sector grew substantially during the year
under review, particularly with regard to sales
in TenCate Cetex (thermoplastic composites).
Although the delays at Airbus (A380) will also
affect TenCate from 2007, the consequences
are not significant. Other outlets have been or
are being found for this advanced material in
other segments of Airbus and among other
producers, such as private and business
aircraft.
The year under review was characterised by
strong growth in demand for TenCate
Cetex ® System 3. This is a lightweight and
cost-effective system solution for interior parts
of aircraft, which also lends itself to other
high-grade applications. The growth results
mainly from the excellent mechanical and
other characteristics of the composite
material, such as the lower production costs,
the higher fire safety and lower waste
gas emissions. The material forms part of
maintenance and renewal programmes and is
also used among other things in floor
components and aircraft seats. There are
currently more than 4,000 aircraft seats in use
with TenCate Cetex ® System 3.
The Brazilian manufacturer Embraer has also
qualified TenCate Cetex for its new Phenom
100 and 300 business jets. This aircraft will be
operational at the end of 2008. Orders have
already been received for several hundred
aircraft. Embraer is also developing new
components based on Cetex, which will result
in further growth in this 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. Demand is high, particularly in the
business market. Thermosets are also used
n the radar and telecommunications market.

Armour
Bullet-proof and fragment-proof materials,
integrated into safety concepts, account for
the largest share of sales in this sector. Sales
rose strongly again, mainly due to strong
growth in the US. The strategic focus on
vehicle protection resulted in growing sales in
this market segment and will ultimately
provide a more even order flow, as well as a
positive margin trend.
The share of vehicle protection is on a rising
trend. There is also growing demand for multithreat
protection. This involves simultaneous
protection against threats from bullets, knives,
and (hypodermic) needles. These segments are
becoming increasingly important. Although the
number of tenders for personal protection was
somewhat disappointing in 2006, Ten Cate has
a good order book. Some uncertainty with
regard to the time of delivery of (projectrelated)
orders is inherent in this market.
Consequently, periodic sales fluctuations
occur. TenCate reduces this uncertainty by
operating worldwide.
Comfortable multi-threat protection offering a perfect fit
TenCate won the tender from the Dutch
National Police Services Agency (KLPD) in 2006
for the supply of 30,000 bullet-proof, knifeproof
and fragment-proof vests for the Dutch
police. The KLPD has followed the trend
for multi-risk protection. The consortium
comprising TenCate and BSST (the producer of
the vests) was judged to have the best safety
concept, partly on the basis of weight and
wearing comfort.
TenCate introduced multi-threat material
concepts (Pro-Tector) for personal protection in
2006. TenCate Pro-Tector provides advantages
in particular in terms of weight, flexibility,
watertightness and ease of incorporation in
vests. The company participated in various
worldwide programmes. Further growth is
expected in 2007.
TenCate is also supplying the spall liners for a
new infantry combat vehicle for the Dutch
army. This involves 184 vehicles, which will
replace the YPR armoured vehicle from 2007.
TenCate has now been approached with a view
to co-operation in a similar Danish vehicle
project.
In close co-operation with BSSt GmbH of Germany, TenCate Advanced Composites supplies a bullet-, needle- and stab-proof vest
for the Dutch police. The vest is able to offer such triple protection due to its innovative overall concept. It is flexible and weighs
just 2 to 2.5 kilos. The low weight and the limited size mean that the vest can be worn comfortably under a shirt. Due to its
completely individual measurements, this is also the first vest that is comfortable for both women and men.
TenCate focuses increasingly on security
concepts based on a multi-risk approach.
The changing role of the Navy (coastal protection)
is leading to interesting developments in
the protection of vessels.
OUTLOOK
Aerospace
TenCate has an excellent position with
the Cetex ® material, which is being used
increasingly in various segments of the aircraft
industry. The outlook for this composite
material is therefore favourable. In order to
achieve the planned growth, a new production
hall with a third press will enter service in
Nijverdal in mid-2007. The AS/EN 9100
certificate has also been obtained. This makes
TenCate one of the few qualified Dutch
companies to operate in accordance with this
system, which is intended for suppliers to the
aircraft industry.
Armour
As a result of the modernisation programmes
in various defence units, TenCate is experiencing
strong growth, particularly in high-grade
programmes for vehicle protection. The acquisition
of the Danish company Roshield will
contribute to this in 2007. In this market
TenCate focuses particularly on concepts
based on a combination of threat levels.

Electronic dyke monitoring increases the safety of dykes
TenCate Geosynthetics is developing HydroDetect, a monitoring system based on geotextiles with interwoven optical fibres.
The coating and weaving of the fibres for this functionality is sensitive, specialist work. The geotextile is buried in the core of
the dyke. HydroDetect takes continuous measurements through the optical fibres using the characteristics of the reflected light,
which is tension- and temperature-dependent.

In addition to deformations and tensions in the core of the dyke, HydroDetect records leaks and moisture.
Using special recording equipment, changes can be observed up to several hundredths of a percent. In this way it is
possible to detect deformations and tensions as well as leaks. Measures can then be taken to prevent
a breach of the dyke.

Geosynthetics & Grass
KEY FIGURES
Geosynthetics & Grass 2006 2005 2004 2003 2002
in millions of euros
Revenues 397.5 273.9 231.9 213.0 223.3
Operating result (EBIT) 25.5 23.8 21.8 16.9 17.2
EBIT margin 6.4 8.7 9.4 7.9 7.7
Investments 28.9 10.5 5.3 8.3 8.8
Depreciation and amortisation 13.7 7.9 7.9 8.7 10.0
Net assets 215.8 206.4 98.2 102.1 108.1
Staff years at year-end 1,633 1,544 1,176 1,121 1,065
Return on net assets (%) 12.9 22.6 21.7 16.1 14.1
ACTIVITIES
The Geosynthetics & Grass sector consists of
the following market groups:
� TenCate Geosynthetics
Fabrics, grids and nonwovens for use in
civil engineering projects, 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 the
carpet 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.
Fast, noise-free dewatering system
The Port of Arcachon in France had to be dredged. Since the port is an important tourist attraction, the dredging had to be carried
out rapidly and without noise and also had to take up little space. Previously the sludge could still be removed to the Atlantic
Ocean, but tighter environmental legislation meant that this was no longer possible. A local contractor decided to conduct a trial
with the TenCate Geotube® system. By adding polymers to the dredging sludge in the Geotube system, the sludge was rapidly
dewatered. As a result, the volume and weight decreased rapidly. The solid materials could then be removed by truck for further
processing.
SALES AND RESULTS
In the year under review, sales in the TenCate
Geosynthetics & Grass sector amounted to
€ 398 million, a rise of 45% (2005: € 274 million).
This rise was almost entirely due to the
acquisition of Polyfelt (on 15 December 2005).
The operating result rose from € 23.8 million to
€ 25.5 million. On an organic basis, the operating
result decreased by 20%.
The EBIT margin fell during the year under
review to 6.4% (2005: 8.7%). This is mainly
due to the higher costs associated with
extensive investment programmes and lower
margins on the artificial grass activities as a
result of increased competition. Measures
were taken during the year under review in
order to achieve efficiency improvements, cost
control and greater distinctive capability

INVESTMENTS
The total investments in this sector rose 175%.
€ 28.9 million was invested during the year
under review, compared to € 10.5 million in
2005. Depreciation and amortisation amounted
to € 13.7 million in 2006.
Considerable sums were invested in 2006 in
the expansion of production capacity in China
(Geosynthetics) and in Dayton and Nijverdal for
monofilament fibres.
GEOSYNTHETICS
MARKET POSITION AND STRATEGY
As a result of the acquisition of Polyfelt at
the end of 2005, TenCate has acquired a
leading position in the geosynthetics market
worldwide. TenCate operates in the market
under the name of TenCate Geosynthetics.
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.
The market leadership should ensure further
profitable growth in this sector. In the
implementation of the global strategy, market
positions with a strong brand image (Mirafi ® ,
Polyfelt ® , Bidim ® and Nicolon ® labels) are
exploited.
In addition to the United States, TenCate has
substantial production and distribution
facilities in Europe and south-east Asia for
geosynthetics with TenCate Geosynthetics
Austria (Polyfelt) and France (Bidim). Both
companies have a prominent presence in these
regions. The companies integrated in the
organisation are entirely complementary in
terms of market area, product portfolio and
technology. With plants in Linz (Austria),
Bezons (France) and Kuala Lumpur (Malaysia)
and ten sales offices spread across Europe
and South-East Asia, as well as a 50%
interest in Geofabrics Australasia, with a
dominant share of the Australian market,
TenCate Geosynthetics Austria and France
represent an important strengthening of
TenCate Geosynthetics. A position has therefore
been attained, or can be built up, which is
comparable to that in America. TenCate is
successful in the US on the basis of a strategy
aimed at offering a wide range of products
with a high level of service and technical
support.
TenCate has been active for many years in the
geosynthetics market and constantly develops
new applications, such as the TenCate
Geotube ® concept. Geotube ® , a large container
filled with sand, has already been in use
successfully for a number of years worldwide
for the construction of water works, 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 from,
for example, the paper and pulp industry,
Geotube ® operates as a filtering and
dewatering technology (high performance
filtration fabric). These products can be used
in a wide range of water management
applications. Their use worldwide is
increasing, partly as a result of natural
disasters, flooding and water shortages.
Royal Ten Cate nv Annual Report 2006 51

GENERAL PERFORMANCE IN 2006
For TenCate Geosynthetics 2006 was
dominated by the integration of Polyfelt. Partly
as a result of favourable market developments,
considerable progress was made in increasing
profitability in Europe and Asia. There
was growth in both the geotextiles and the
industrial fabrics market, with a good level of
capacity utilisation. The new product line at
the Linz site, based on a technology developed
in-house, improved further in 2006. The cooling
of the US economy impacted the growth of
activities in that country, leading to somewhat
lower margins.
A global strategy was formulated and
implemented during the year under review.
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 US, Europe and Asia, TenCate
is increasingly looking at growth potential in
the Middle East and Eastern Europe.
More than 50% of materials are used in infrastructure
projects (geoproducts and systems)
and in civil engineering. In addition, materials
are supplied for the construction industry, the
recreation market and the agricultural sector.
TenCate has a share of over 50% of the
mushroom cultivation sector. Substantial
growth was achieved in grids and nonwovens
for varied applications once again in 2006.
Filtration is another application for which
new products were developed. As a result
of the acquisition of Polyfelt, TenCate has
considerably strengthened the position in the
European and Asian project market. In this
market, which has higher margins, there is
growing demand for technological support and
assistance for materials in systems solutions.
TenCate is well positioned for this and made it
a focus of its strategy.
The companies in the sector won a number
of attractive projects and orders in the infrastructure
and environment area in 2006:
� TenCate is involved in one of the most
important infrastructure projects in Korea,
the largest Geotube order ever obtained;
� TenCate is involved with Geotube in an
extensive water treatment project in two
lakes in Sweden which are polluted with
sludge from the paper and pulp industry;
� TenCate Geosynthetics Iberia was involved
in an extensive project with geotextiles in
A more economical way to bridge the gap
The Incheon Bridge is being built to link the Korean city of Seoul to Incheon Airport. At the mainland end, the access road is being
built on reclaimed land. Instead of the usual construction using steel sheet piling, TenCate Geotube® is being used. As a result
there are two causeways with a height of five metres, 100 metres apart. Sand is being deposited between the causeways,
creating a work island for the building of the bridge and the approach road. Approximately 18 km of Geotube has been used to
build the causeways.
a former mining area in Calaña (Spain)
which had to be fully integrated into the
environment;
� TenCate’s Geotube technology was chosen
for the dewatering of dredging sludge
(120,000 m3) from the area around Venice;
� a pilot was successfully completed in the
US for the dewatering of industrial sludge.
Geotube systems were also used in 2006 for
land reclamation, coastal protection and dyke
construction. Interesting developments are
taking place in the latter field, such as the
possibility of early detection of defects in
dykes (HydroDetect). This is a monitoring
system based on geotextiles with interwoven
optical fibres. This geotextile is buried in
the core of the dyke. Using special
recording equipment, it is possible to detect
deformations and tensions such as leaks.
Measures can then be taken to prevent a
breach. TenCate is already applying the
principle in GeoDetect, a geotextile with
integrated optical fibres. GeoDetect makes it
possible to monitor reinforced soil structures
and deal with subsidence before it becomes
critical. Fifteen projects have been successfully
completed worldwide with GeoDetect.
Two trial projects are currently under way

for HydroDetect. There is considerable market
potential and in Europe the projects announced
in the field of water management and dyke
construction will provide a boost for this
market segment.
TenCate Nicolon Australia was sold to
Geofabrics Australasia (a TenCate joint
venture) in order to serve the Australian
market more efficiently.
OUTLOOK
TenCate’s position in the European and Asian
market for infrastructure projects has been
considerably strengthened through the integration
of Polyfelt. This offers excellent prospects
for further sales and profit growth, in spite
of the economic uncertainties in America.
This growth is expected partly on the basis of
the increasing attention devoted to water
management and environmental protection.
TenCate’s position in the geosynthetics market offers
excellent prospects for further sales and profit growth.
GRASS
MARKET POSITION AND DEVELOPMENTS
TenCate is the global market leader in terms
of volume and innovation in the market for
artificial grass fibres. The company has been
developing, producing and marketing artificial
grass fibres and carpet backing for artificial
grass pitches for various applications for
almost 40 years. 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 taken into account in the development of a
safe overall concept, consisting of a top layer
and a base TenCate has leading products and
systems. These are supplied to companies
which offer total concepts to end-users,
such as companies in the carpet sector and
marketing organisations
The volume of the world market is expected to
grow in the next few years by an average of
15% per year. Geographically, however, there
are major differences. According to external
sources (2005), the European artificial grass
market accounted for over 40% of total
demand in 2005. The American market is
somewhat smaller, with a share of over 35%,
although the growth trend is much higher.
This is due not only to the enormous market
potential, but also to the higher degree of
acceptance. Artificial grass has been widely
accepted for much longer in America. It is used
not only for American football but also for
other sports and for university and high-school
pitches. The continuing growth in the market is
attracting new market participants. This is also
one of the challenges in a growth market. The
industry intends jointly to ensure better quality,
with quality criteria, delivery conditions and
warranties providing a better guarantee for
end users.
TenCate is well represented in the European
and American market. The TenCate Thiolon ®
brand has a strong quality image in that
country. Quality and characteristics such as
ball behaviour, friction resistance of the boot
and sliding performance are aspects which
have developed strongly among end-users
in the American market. In Europe too there
is evidence of a trend towards greater
importance being attached to quality and
safety. That is due to the fact that particularly
local authorities, which are major customers,
are accumulating greater knowledge of
artificial grass.
Royal Ten Cate nv Annual Report 2006 53

In addition, the public debate on the use of
rubber infill based on recycled vehicle tyres in
sports pitches has stimulated discussion of
safety and environmental aspects. TenCate
sees this as a positive development.
TenCate has built up a close relationship
with many suppliers of artificial grass
pitches. In the US, the emphasis is on
marketing organisations. In Europe, carpet
producers also occupy an important position.
In the context of end-user marketing, TenCate
itself is also active in dealings with end-users,
partly on the basis of the knowledge
accumulated in the field of research and
development. In this regard TenCate is an
important partner in the chain, for both direct
customers and end-users.
A large number of sports are played on
artificial grass around the world. Football is
one of the main growth markets. FIFA and
UEFA now allow artificial grass to be used up
to the highest level, but acceptance among
top-flight clubs is slow. Nevertheless,
increasing interest is evident and the
prejudices are disappearing. That is because
players are finding that a new generation of
artificial grass pitches provides a real
alternative in periods in which it is almost
impossible to play on natural grass.
The Grass group also includes production of
backing, the material on which fibres are
tufted by carpet producers. Growth is being
achieved in outdoor backing for artificial grass
carpet. The production of indoor backings is
gradually being scaled down because of low
margins. In 2006, TenCate also began supplying
infill (Thiolon Infill Pro), which occupies the
space between the grass fibres. The type of
infill is one of the factors that determines
performance of the artificial grass pitch. This
infill is made not of recycled material but
of environmentally friendly thermoplastic
granules and is therefore free of any harmful
substances. The supply of infill is a necessary
step in order to be able to market system
concepts, together with components which are
used in the base. At present, there are still too
few total concepts in the market which enable
the end-user to make choices on the basis
of the required performance or playing
characteristics of the pitch. This approach is
being developed further together with partners
in the chain. This is an important strategic
development and one which increases the
distinctive capability.
Super artificial grass for the Superdome
The Superdome in New Orleans (Louisiana, USA) was severely damaged by hurricane Katrina in August 2005. It was subsequently
used as a reception centre for 25,000 residents who had been made homeless. A year later the completely renovated stadium was
the venue for the first home game of the New Orleans Saints. The Superdome had a completely new artificial grass pitch based on
TenCate Thiolon ® fibres. Thiolon grass fibres have been designed for optimum performance in competitions at every level, but are
also suitable for other events. The pitch provides footballers in the NFL and other leagues with a fast and stable base which
protects them against injuries.
STRATEGY
TenCate’s strategy is focused on supplying
high-quality artificial grass fibres and backing
for a large number of sports and landscaping
(landscape applications, green spaces).
TenCate distinguishes itself through product
differentiation in various artificial grass
applications for top-flight sports and recreation
sport on a competition level. However, the
European amateur market still makes too few
specific demands on the quality aspects and is
therefore still highly price-sensitive. However,
this is changing to some extent, because of
increasing awareness of the performance
of sports pitches. In the past there was a
strong emphasis on innovation and product
differentiation. In the context of system
development, the focus is being shifted more
to cost control and marketing.
In addition to a focus on costs, TenCate will
develop system concepts in order to make
quality differences in sports pitches clearer.
The strategy here too is focused on exploiting
economies of scale within the strategic
concept of value chain management.
Within the system concept, TenCate aims to
co-operate with market operators who endorse
this 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, in which TenCate,
together with partners, advises endusers
such as leagues, clubs and other
interested parties directly or through its
sales partners with regard to the system
performance of the pitch;
� transparency with regard to the
�
characteristics and durability of the sports
pitch
exclusion of possibly environmentally
unfriendly or harmful raw materials.
TenCate seeks to maintain its distinctive
position by supplying high-quality products and
systems and carrying out 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 testing
and research centres. In this way it is able to
provide sound advice and information for
end-users.
GENERAL PERFORMANCE IN 2006
Growth in the Grass group fell short of
expectations during the year under review.
This was due partly to a delay in the laying of
new sports pitches in the US. There was also a
substantial shift in demand. The European
market in particular saw a shift within a short
period as a result of growing demand from
football.
The football market is increasingly demanding
fibres with a strong visual similarity to natural
grass. TenCate has anticipated this by developing
new fibres (including monofilament fibres)
in which the required technical characteristics
are guaranteed. These fibre types are used by,
among others, FIFA, which chose a TenCate
Thiolon system for the FIFA Home in Zurich
during the year under review, the KNVB
training complex, Heracles Almelo, AGOVV and
leading clubs such as PSV and Ajax for their
training pitches
Hockey, which also accounts for a large share
of sales, is a replacement market.
The large extension of the production capacity
for monofilaments, which was completed after
some delay, involved high costs. Because of
the switch of production, there was temporary
sales shortfall, because for a certain period it
was not possible to meet demand from the
market.
Due to increasing competition, there was
a further tightening of margins, particularly
in the volume segment (amateur market).
The margins in this market declined further
compared to 2005.
Both internal and external factors, as stated
previously, put pressure on results. Measures
were therefore taken during the year under
review, with the aim of achieving further
efficiency improvement, improvement in
logistics processes and cost control.
Royal Ten Cate nv Annual Report 2006 55

In 2006 TenCate drew up an action plan in
order to shape its future leading role in the
artificial grass sector. In addition to measures
aimed at operational and logistical improvements,
these are:
� adaptation of the product portfolio in order
to accommodate the shift in demand to
football;
� making end-users aware 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
artificial grass systems);
� repositioning through greater control over
the value chain and embedding of the
system philosophy.
In order to accelerate the technological
developments, TenCate signed a declaration of
intent in 2006 with GreenFields in Kampen
with a view to the joint development of a new
artificial grass system (fourth-generation
artificial grass). This concept is based on an
integrated artificial grass system.
In order to strengthen TenCate’s current
knowledge position, a patent is being acquired
from GreenFields, thereby significantly
enhancing our existing worldwide patent
position. The development of the fourthgeneration
artificial grass system is aimed
partly at reducing the cost of the artificial
grass system.
The repositioning in the value chain is taking
place partly as a result of greater co-operation
with strategic partners. With GreenFields this
co-operation entails the following:
� TenCate sells 80% of the shares in
Landscape Solutions (artificial grass for
landscaping under the Royal Grass brand
name) to a company associated with
GreenFields;
� TenCate continues to supply artificial grass
fibres and backing for the Royal Grass
brand to GreenFields;
� GreenFields will be among the market
participants that work closely with
TenCate, in both the development and
commercial areas.
Attractive artificial grass saves precious water
Severe shortages of rainwater occur regularly in southern Europe. Partly for that reason, artificial grass is becoming increasingly
popular for use in public open spaces in various local authority areas. It looks very natural and needs no water. The company
responsible for laying the pipes which supply and remove water investigated the payback period of Royal Grass in open
installations on roundabouts and central reservations in Madrid. It turned out to be less than four years. In that way TenCate is
helping to limit water consumption.
TenCate has also entered into a strategic
alliance with FieldTurf Tarkett, the leading
marketing organisation in the United States
and Europe for artificial grass systems for
many sport applications. FieldTurf Tarkett has
extensive knowledge of patented artificial
grass systems and excellent access to the
market. For Ten Cate, the partnerships deliver
improved access to the end-market. It provides
major support for the strategic focus on
systems and system characteristics.

OUTLOOK
The artificial grass market is experiencing
structural growth, with an expected average
of 15%. The announced acquisition of the
artificial grass activities of Mattex Leisure
Industries in February 2007 will further
strengthen TenCate’s position worldwide. The
products supplied by Mattex (TenCate Thiolon
Middle East) are an excellent addition to the
existing product portfolio.
The alliances with FieldTurf Tarkett and
GreenFields give TenCate more direct access to
end-markets, lending further support to the
system concept. In 2007 the production facility
at Nijmegen (Nymplex site) will be absorbed in
TenCate Thiolon in Nijverdal. This will involve
non-recurring costs. There will be a further
expansion of production capacity and
adjustments to logistics in 2007. It is expected
that TenCate will be better able to anticipate
market demand in 2007. Important strategic
steps were taken at the end of 2006 and in the
first quarter of 2007. These are expected to
make a positive contribution to the result
in 2007.
TenCate also strives for a system approach in the artificial grass market.
Royal Ten Cate nv Annual Report 2006 57

ATMs run on rollers
Never a banknote too many or too few. That is no coincidence. In thousands of ATMs worldwide rollers from TenCate Enbi
are doing their work. You cannot see them, but these rollers ensure that the correct number of banknotes are issued.
Time after time, millions of times a day in all currencies.

TenCate Enbi rollers process more than 150 different types of currency, if necessary at a speed of more than 40 banknotes per second.
That requires very precise technology. TenCate Enbi supplies materials for the right solution. The self-regenerating surfaces of the
rollers ensure a reliable and durable performance. With truly invisible precision.

Technical Components
KEY FIGURES
Technical Components 2006 2005 2004 2003 2002
in millions of euros
Revenues 92.7 126.3 178.7 186.3 202.5
Operating result (EBIT) 6.2 7.1 8.9 8.6 3.5
EBIT margin 6.7 5.6 5.0 4.6 1.7
Investments 2.2 2.5 2.7 2.5 4.4
Depreciation and amortisation 2.7 4.8 5.7 6.6 9.5
Net assets 27.9 44.9 68.5 79.9 92.1
Staff years at year-end 661 828 1,223 1,281 1,327
Return on net assets (%) 21.5 13.5 11.9 9.9 3.3
ACTIVITIES
The Technical Components sector consists of:
� TenCate Enbi
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 automated
teller machines.
60
Royal Ten Cate nv Annual Report 2006
� Business Key
Business Key, the only remaining part of
the Mega Valves International group which
was sold in the spring of 2005, is a small
Spanish company trading in components
for fluid systems for agriculture and
horticulture, industry and the construction
sector. In view of the limited size of this
unit, no separate performance report is
presented.
SALES AND RESULTS
Sales decreased during the year under review
to € 93 million. (2005: € 126 million). This was
mainly due to the sale of TenCate Plasticum).
On an organic basis, sales grew 6%. This
increase was due in particular to growth of
TenCate Enbi in Europe and the United States.
The operating result amounted to € 6.2 million
(2005: € 7.1 million). On an organic basis, the
operating result was 14% higher.
MARKET POSITION AND STRATEGY
OF TEN CATE ENBI
TenCate Enbi is a leading supplier to major
European and American printer and copier
producers and is one of the few suppliers to
operate on three continents. Europe, America
and Asia. Competitors operate primarily in
local markets. The market is price-sensitive
and cost control is therefore of great
importance. In order to optimise logistics, it is
necessary to manufacture products in the
immediate vicinity of the customer (OEM).
TenCate Enbi is a major supplier to producers
of printers and copiers. It also serves a number
of niche markets, including those for postal
sorting machines, automated teller machines,
insulation and heating systems.

High-grade products are developed in co-operation
with the customer. The company also
develops and produces its own products for
OEMs as well as rollers for cartridges for the
replacement market. TenCate Enbi is striving to
broaden its customer portfolio. In 2006 it
achieved major progress in this regard,
including its qualification as a supplier to a
Korean OEM of laser printers. TenCate Enbi
stands out from its competitors because of its
high-grade knowledge and products, high
delivery reliability and a competitive cost level.
Moreover, the company is able to react quickly
to global shifts in production by OEMs. The
sites in Singapore and China are particularly
well-placed to benefit from the latter trend.
TenCate Enbi fulfils high technological and
quality requirements. The development of new
products is essential in order to generate
replacement sales in a market with ever
shorter life cycles and achieve further growth.
TenCate Enbi has all the necessary tools for
success, although it has become clear that
allowance must be made for protracted
qualification procedures that are intended to
ensure that the requirements are met in almost
all circumstances.
As a result of its global spread of production
facilities, the introduction of in-house products
and a larger customer base, TenCate Enbi’s risk
profile has improved greatly. There is also
more certainty of further earnings growth.
PERFORMANCE IN 2006
The Technical Components sector showed
a further improvement in results in 2006.
TenCate Enbi benefited from positive developments
in the European companies in Germany
and Hungary.
Sales at TenCate Enbi increased during the
year under review after falling in previous
years due to restructuring. This is a positive
development, particularly in view of the fact
that one of the largest customers has opted for
backward integration. The challenge is to
generate replacement sales in time in a market
in which products are becoming obsolete ever
faster and in which production is constantly
being transferred to low-wage countries, such
as China and Malaysia.
A new strategic market is the replacement
market for (colour) laser printer cartridges.
TenCate Enbi further expanded its position in
this market in 2006. It produces its own rollers
for laser printer cartridges based on its own
technological knowledge. These rollers fulfil
the same criteria as those applied for the
OEMs. For logistics reasons, the production of
rollers for the replacement market is tied more
to individual regions, making it attractive for
all TenCate Enbi sites. In addition to the fact
that this is an important potential market for
TenCate Enbi, this helps provide a better
foundation for the company. Corporate risks,
such as customer dependence and underutilisation
of capacity, are thereby reduced.
The market penetration, however, has been
slower than expected due to protracted
qualification procedures.
TenCate Enbi has a good basis for further
growth in both the OEM and the replacement
market, given that the company is well known
for its high quality and delivery reliability. This
enables TenCate Enbi to penetrate new
markets, with other industrial applications for
rubber and foam technology. Further major
orders were received from existing customers in
2006 for new platforms for printers and copiers.
Royal Ten Cate nv Annual Report 2006 61

OUTLOOK
TenCate Enbi operates in a global market
which is dominated by a number of large
players. Customers will continue to transfer
production in order to make cost savings. The
transfer of production to low-wage countries
applies mainly to the production of volume
products. High-grade production for niche
markets is taking place on an increasingly
regional basis. With sites in the United States,
Europe and Asia, TenCate Enbi can respond
appropriately to every possible development.
In the longer term it therefore expects further
growth in sales and earnings.
TenCate has previously expressed its intention
of divesting TenCate Enbi. No time limit has
been put on the divestment.
62
Royal Ten Cate nv Annual Report 2006

X-ray photographs turned out fast with TenCate Enbi
When the highest-quality photographs are required for X-ray examinations or other uses, TenCate Enbi offers a helping hand.
The rollers are made from materials which are resistant to developing and fixing liquids. Broken leg or wrist? Preventive examina-
tion? Doctors and medical personnel can rapidly obtain razor-sharp photographs and use them to provide the necessary treatment.
The Technical Components sector showed
a further improvement in results in 2006.
Royal Ten Cate nv Annual Report 2006 63

More comfort and better fire protection for military personnel
TenCate Protective Fabrics USA has developed a second-generation Universal Camouflage Pattern fabric. This material, based on
aramid fibres and a patented process, is more comfortable than the current military standard, but that is not at the expense of the
fire resistance and other functional characteristics. In that way TenCate can meet the US Army’s requirement for fire-resistant
camouflage uniforms to provide better protection for its military personnel.

TenCate has a leading role in the US military market for fire-resistant camouflage print fabrics. Clothing manufacturers use
the TenCate materials to produce clothing for the crews of combat vehicles, aircraft and other high-risk environments.

66
Royal Ten Cate nv Annual Report 2006

Financial statements 2006
Royal Ten Cate
Consolidated profit and loss account
Consolidated balance sheet
Consolidated cash flow statement
Equity
Notes to the consolidated financial statements
1 General information on Royal Ten Cate
2 General principles for financial reporting
3 Principles for the preparation
of the financial statements
4 Consolidation principles
5 Foreign currencies
6 Derivatives
7 Hedge accounting
8 Segment reporting
9 Revenues
10 Raw materials and manufacturing supplies
11 Lease payments
12 Financial income and expenses
13 Profit tax
14 Earnings per share
15 New standards and interpretations
not yet applied
16 Principles for the cash flow statement
17 Tangible fixed assets
18 Intangible fixed assets
19 Inventories
20 Trade and other receivables
21 Cash and cash equivalents
22 Impairment
23 Share capital
24 Pension liabilities
69
70
72
74
75
75
75
75
76
76
77
77
78
78
78
78
78
79
79
79
80
80
81
82
82
82
82
83
83
Royal Ten Cate Annual Report 2006 67

25 Share-based payments
26 Provisions
27 Long-term debts
28 Trade creditors and other payables
Notes to the consolidated profit and loss account
29 Segment information
30 Acquisitions and divestment of subsidiaries
31 Personnel costs
32 Other operating costs
33 Financial income and expenses
34 Profit tax
35 Result from associated companies
36 Result from divested activities
37 Notes to the consolidated balance sheet
38 Tangible fixed assets
39 Intangible fixed assets
40 Associated companies
41 Other long-term receivables and investments
42 Deferred tax receivables and liabilities
43 Inventories
44 Trade debtors
45 Other receivables
46 Cash and cash equivalents
47 Equity
48 Earnings per share
49 Long-term debts
50 Pension liabilities
51 Provisions
68
Royal Ten Cate Annual Report 2006
84
84
85
85
86
86
88
89
89
90
90
91
91
92
92
94
95
96
96
96
97
97
97
97
99
100
102
105
52 Other information
53 Financial instruments
54 Liabilities not shown in the balance sheet
55 Investment liabilities
56 Contingent liabilities
57 Subsequent events
58 Related parties
59 Estimates and judgments formed by
the management
60 Company financial statements
61 Company profit and loss account
62 Company balance sheet
63 Notes to the company financial statements
64 Financial fixed assets
65 Equity
66 Called and paid-up capital
67 Ordinary shares
68 Share premium reserve
69 Retained earnings of associated companies
70 Other reserves
71 Option scheme
72 Provisions
73 Long-term liabilities
74 Short-term liabilities
75 Other information
Additional data
Auditors’ report
Post balance sheet events
Provision of the articles of association
relating to appropriation of profit
Proposed appropriation of profit
Ten-year summary
106
106
108
108
109
109
109
111
112
112
113
114
114
115
115
115
115
116
116
116
118
118
118
118
120
121
123
125
125
126

Consolidated profit and loss account
in millions of euros
Revenues
Changes in inventories of finished products and work in progress
Raw materials and manufacturing supplies
Work contracted out and other external expenses
Personnel costs
Depreciation and amortisation
Other operating costs
Total operating expenses
OPERATING RESULT
Financial income
Financial expenses
NET FINANCIAL EXPENSES
PRE-TAX RESULT
Profit tax
Result after tax but before divestment of activities
Result from associated companies
Result from divested activities after tax
RESULT AFTER TAX
ATTRIBUTABLE TO:
Shareholders of the company (net profit)
Minority interests
Weighted average number of shares (x 1,000)*
Weighted average number of shares after dilution (x 1,000)*
Net earnings per share (euro)*
– corrected for result from sale of Synbra
Diluted net earnings per share*
– corrected for result from sale of Synbra
* After split of par value of shares from € 10 to € 2.50.
note
29
31
32
33
33
34
35
36
48
48
2006
770.5
– 4.8
402.2
34.7
171.2
23.1
94.0
720.4
50.1
0.1
– 8.1
– 8.0
42.1
– 11.4
30.7
3.4
42.0
76.1
76.0
0.1
20,749
21,264
3.66
1.76
3.57
1.72
2005
686.5
0.5
353.8
29.3
161.6
19.3
83.5
648.0
38.5
0.2
– 4.8
– 4.6
33.9
– 11.5
22.4
4.4
3.7
30.5
30.5
–
20,567
20,946
1.48
1.48
1.46
1.46
Royal Ten Cate Annual Report 2006 69

Consolidated balance sheet
in millions of euros
FIXED ASSETS
Tangible fixed assets
Intangible fixed assets
Associated companies
Long-term receivables from associated companies
Other long-term receivables
Deferred tax receivables
Total fixed assets
CURRENT ASSETS
Inventories
Receivables
Trade debtors
Tax receivables
Other receivables
Cash and cash equivalents
Total current assets
TOTAL ASSETS
70
Royal Ten Cate Annual Report 2006
note
38
39
40
40
41
42
43
44
45
46
31 December 2006
165.8
12.4
1.3
–
5.1
11.9
157.7
109.0
4.7
14.5
6.7
196.5
292.6
489.1
161.4
13.8
16.9
0.5
4.0
13.8
157.5
105.9
3.8
15.3
31 December 2005
4.6
210.4
287.1
497.5

in millions of euros
GROUP EQUITY
Share capital
Share premium reserve
Statutory reserve*
Other reserves*
Undistributed result
Equity attributable to shareholders of the company
Minority interests
Group equity
LONG-TERM LIABILITIES
Long-term debt
Pension liabilities
Provisions
Deferred tax liabilities
Total long-term liabilities
SHORT-TERM LIABILITIES
Banks, current accounts
Repayment of long-term debts
Trade creditors and other payables
Provisions
Tax payable
Total short-term liabilities
Total liabilities
TOTAL GROUP EQUITY AND LIABILITIES
* Adjusted for comparison purposes.
note
47
49
50
51
42
46
49
51
31 December 2006
52.7
6.3
– 2.0
105.7
76.0
63.5
31.8
11.8
0.2
29.1
1.3
103.1
5.8
3.6
238.7
0.2
238.9
107.3
142.9
250.2
489.1
52.0
7.0
28.5
63.8
30.5
130.2
37.6
18.1
0.4
31 December 2005
25.9
1.2
96.4
5.2
0.7
181.8
–
181.8
186.3
129.4
315.7
497.5
Royal Ten Cate Annual Report 2006 71

Consolidated cash flow statement
in millions of euros
CASH FLOW FROM OPERATING ACTIVITIES
Result after tax
Adjustments for:
Depreciation
Amortisation
Interest
Exchange rate differences
Profit tax
Result from associated companies
Result from divested activities
Result from sale of tangible fixed assets
Share-based payment transactions settled in
equity instruments
Change in provisions
CASH FLOW FROM OPERATING ACTIVITIES (EBIT)
BEFORE CHANGE IN WORKING CAPITAL
CHANGES IN WORKING CAPITAL
Inventories
Receivables
Short-term liabilities
Cash flow from operating activities
Interest paid
Profit tax paid
Cash flow from operating activities
72
Royal Ten Cate Annual Report 2006
note
38
39
33
33
34
35
36
32
76.1
22.1
1.0
7.1
0.9
11.4
– 3.4
– 42.0
– 3.7
0.2
– 4.0
– 6.7
– 11.7
14.4
2006
65.7
– 4.0
61.7
– 7.3
– 9.2
45.2
30.5
18.6
0.7
5.0
– 0.4
11.5
– 4.4
– 3.7
– 0.7
0.5
1.6
– 14.1
– 17.8
8.0
2005
59.2
– 23.9
35.3
– 5.0
– 12.3
18.0

in millions of euros
CASH FLOW FROM INVESTING ACTIVITIES
Income from sale of tangible fixed assets
Interest received
Dividend received
Divested activities less cash
Receipt of long-term receivables
Acquisition of operating companies less cash acquired
Acquisition of associated company
Cash acquired from joint venture included in consolidation
Investments in intangible fixed assets
Investments in tangible fixed assets
Increase in long-term receivables
CASH FLOW FROM INVESTING ACTIVITIES
CASH FLOW FROM OPERATING AND INVESTING ACTIVITIES
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares
Repurchase of own shares
Drawdown of long-term debt
Repayment of long-term debt
Dividend payment to shareholders
Dividend payment to minority shareholders
CASH FLOW FROM FINANCING ACTIVITIES
CHANGE IN CASH*
Cash on 1 January
Currency differences in cash
CASH AS AT 31 DECEMBER
* Cash includes cash and cash equivalents minus banks, current accounts (see note 46).
note
32
40
30
30
39
38
4.5
0.2
0.6
64.0
0.2
–
– 1.3
0.3
– 0.7
– 42.3
– 1.8
0.3
– 7.2
0.6
– 68.1
– 5.8
–
2006
23.7
68.9
– 80.2
– 11.3
– 21.3
10.2
– 22.4
3.5
0.4
–
31.1
0.3
– 71.9
–
–
– 0.4
– 25.8
– 0.2
0.2
–
57.0
– 3.3
– 4.7
–
2005
– 63.0
– 45.0
49.2
4.2
– 19.6
– 5.9
– 21.3
Royal Ten Cate Annual Report 2006 73

Equity
in millions of euros
BALANCE AS AT 1 JANUARY 2005
Appropriation of 2004 profit
Dividend paid
Stock dividend
Foreign exchange translation differences
Share-based payments
Issue of repurchased shares for
share savings plan/option plan
Result for 2005
BALANCE AS AT 31 DECEMBER 2005
BALANCE AS AT 1 JANUARY 2006
Appropriation of 2005 profit
Dividend paid
Stock dividend
Foreign exchange translation differences
Release of statutory reserve
on sale of associated company
Share-based payments
Issue of repurchased shares for
share savings plan/option plan
Repurchase of own shares
for share savings plan/option plan
Result for 2006
BALANCE AS AT 31 DECEMBER 2006
MINORITY INTERESTS
Balance as at 1 January 2005
Acquisition of 10% of shares of Business Key
Balance as at 31 December 2005
In consolidation of Geofabrics Australasia
Result for 2006
Balance as at 31 December 2006
74
Royal Ten Cate Annual Report 2006
Share
capital
51.2
0.8
52.0
52.0
0.7
52.7
0.1
– 0.1
–
0.1
0.1
0.2
Share
premium
7.8
– 0.8
7.0
7.0
– 0.7
6.3
Retained
earnings of
associated
companies
21.7
2.2
23.9
23.9
4.4
– 28.3
–
Translation
differences
– 4.9
9.5
4.6
4.6
– 6.2
– 0.4
– 2.0
Retained
earnings
46.1
11.0
5.5
0.5
0.3
63.4
63.4
13.5
6.7
28.3
0.2
0.3
– 7.2
105.2
Undistributed
profit
0.2
0.2
0.4
0.4
0.1
0.5
Undistributed
result
23.6
– 13.4
– 4.7
– 5.5
30.5
30.5
30.5
– 18.0
– 5.8
– 6.7
76.0
76.0
Total
equity
145.7
–
– 4.7
–
9.5
0.5
0.3
30.5
181.8
181.8
–
– 5.8
–
– 6.2
– 0.4
0.2
0.3
– 7.2
76.0
238.7

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 include the Company and its operating companies
(referred to collectively as the Group) and the Group’s interests in (non-consolidated) associated companies and
a joint venture. The 2006 annual report and accounts were discussed on 28 February 2007 at the meeting of the
Supervisory Board. The financial statements were prepared by the Executive Board and were released for
publication on 1 March 2007. They will be presented to the General Meeting of Shareholders for adoption on
29 March 2006.
The parent company financial statements form part of the 2006 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.
2 GENERAL PRINCIPLES FOR FINANCIAL REPORTING
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards, as adopted within the European Union, 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: derivatives, financial instruments held for trading purposes.
In preparing the financial statements the management has in some cases used estimates and assumptions
which affect the amounts stated in the consolidated financial statements (see note 59). 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 2006 75

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 and joint ventures
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 is 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. Associated companies over which no significant influence is exerted are
valued at cost.
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 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.
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.
76
Royal Ten Cate Annual Report 2006

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 with 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:
US dollar
Singapore dollar
Hong Kong dollar
Hungarian forint (100)
Malaysian ringgit
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.
7 HEDGE ACCOUNTING
2006
1.32
2.02
10.27
2.51
4.66
Closing rate
Average rate
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 2005 and 2006 financial statements.
2005
1.18
1.97
9.18
2.53
4.48
2006
1.26
2.00
9.76
2.64
4.62
2005
1.25
2.07
9.69
2.49
4.72
Royal Ten Cate Annual Report 2006 77

NOTES TO THE CONSOLIDATED 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.
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.
78
Royal Ten Cate Annual Report 2006

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 and a joint
venture. 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.
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 2006 and have
therefore not been applied to these consolidated financial statements:
� IFRS 7 Financial instruments: disclosures and the amendment to IAS 1
Presentation of financial statements: capital disclosures require an entity to provide more detailed notes
on the importance of financial instruments for the financial position and results together with qualitative
and quantitative information on the nature and extent of the risks. IFRS 7 and the amended IAS 1 become
compulsory with regard to the Group’s financial statements in 2007 and require detailed supplementary
notes on the Group’s financial instruments and share capital.
Royal Ten Cate Annual Report 2006 79

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
� IFRIC 10 Interim financial reporting and impairment prohibits the reversal of a goodwill impairment,
an investment in an equity instrument or a financial asset valued at cost where these have been recognised
in a prior interim period. IFRIC 10 becomes compulsory with regard to the Group’s financial statements in
2007 and applies to goodwill, investments in equity instruments and financial assets valued at cost, with
retroactive effect from the date on which the Group applied the valuation criteria of IAS 36 and IAS 39
(1 January 2004).
16 PRINCIPLES FOR THE CASH FLOW STATEMENT
The cash flow statement has been prepared in accordance with the indirect method. A distinction is drawn in
the cash flow statement between cash flows from operating, investment and financing activities.
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 required 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 separately stated item under tangible fixed assets
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.
80
Royal Ten Cate Annual Report 2006

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
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).
18.3 Other intangible fixed assets
Other intangible fixed assets acquired by the Group are valued at cost less accumulated depreciation and impairments
(note 22). Costs of internally generated goodwill and trademarks are stated as an expense in the profit
and loss account as soon as they are incurred.
Royal Ten Cate Annual Report 2006 81

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18.4 Expenses after first-time inclusion
Expenses after the first-time inclusion of capitalised intangible fixed assets are only capitalised 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 five 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.
20 TRADE AND OTHER RECEIVABLES
Trade and other receivables with a term of less than one year are stated at nominal value less any provision
deemed necessary.
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 fixed assets which are not yet available for use, the realisable value is estimated at each balance
sheet date. 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.
82
Royal Ten Cate Annual Report 2006

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 impairment can 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.
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
day 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.
Royal Ten Cate Annual Report 2006 83

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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, 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 scheme 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.
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.
84
Royal Ten Cate Annual Report 2006

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.
26.5 Incapacity costs
The provision for incapacity costs has been created in respect of the future additional premium under the
‘PEMBA’ act on premium differentiation and market forces in incapacity insurance.
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 of
the effective interest method over the term of the loans.
28 TRADE CREDITORS AND OTHER PAYABLES
Trade creditors and other payables are stated at nominal value.
Royal Ten Cate Annual Report 2006 85

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, is based on 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
� Manufacture and sale of rubber and foam rollers for the office equipment industry, packaging and
closures for consumer goods (overcaps and spray caps up to 1 May 2006).
Geographic segments
The segments are managed on a global level, but 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.
86
Royal Ten Cate Annual Report 2006

29.1 Segment information
29.2 Analysis by business segment
in millions of euros 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005
Revenues
Intercompany sales
Total revenues
Operating result
Financial income and expenses
Result from associated companies
Result from divested activities
Profit tax
Minority interests
Net profit
Assets of segments
Investments in associated companies
Total assets
Liabilities of segment*
Investments
Depreciation and amortisation
* Excluding intercompany loans.
29.3 Analysis by geographic location
Netherlands
Rest of Europe
North America
Asia/Australia
Total
Advanced Textiles
& Composites
279.7
1.0
280.7
20.9
167.7
–
167.7
56.0
11.7
6.2
2006
222.6
158.6
336.4
52.9
770.5
285.6
2.2
287.8
16.5
1.7
162.3
–
162.3
55.5
13.2
6.2
397.5
–
397.5
25.5
0.7
– 0.1
266.1
–
266.1
77.6
28.9
13.6
Geosynthetics
& Grass
273.9
–
273.9
23.8
242.3
7.3
249.6
64.3
10.5
7.9
Net sales Assets
2005
257.2
91.5
316.2
21.6
686.5
2006
148.6
104.2
183.0
53.3
489.1
2005
144.2
137.2
179.3
36.8
497.5
92.7
–
92.7
6.2
2.7
37.5
–
37.5
17.3
2.2
2.7
2006
18.0
2.8
18.0
4.2
43.0
Technical
Components
126.3
–
126.3
7.1
2.0
58.3
0.1
58.4
23.9
2.5
4.8
Investments
in (in)tangible
fixed assets
2005
10.5
1.7
13.6
0.4
26.2
Other operating
activities/
eliminations Consolidated
0.6
– 1.0
– 0.4
– 2.5
2.7
39.3
16.5
1.3
17.8
99.3
0.2
0.6
0.7
– 2.2
– 1.5
– 8.9
4.4
17.7
9.5
27.2
172.0
–
0.4
770.5
–
770.5
50.1
– 8.0
3.4
42.0
– 11.4
– 0.1
76.0
487.8
1.3
489.1
250.2
43.0
23.1
686.5
–
686.5
38.5
– 4.6
4.4
3.7
– 11.5
–
30.5
480.6
16.9
497.5
315.7
26.2
19.3
Royal Ten Cate Annual Report 2006 87

NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT
30 ACQUISITIONS AND DIVESTMENT OF SUBSIDIARIES
30.1 Acquisitions in 2006
Following the sale of the interest in TenCate Nicolon Australia to Geofabrics Australasia, a 50% associated
company, the contracts between the Group and the co-shareholder of Geofabrics Australasia were amended.
With effect from 1 July 2006 control, has been exercised jointly and the 50% interest in Geofabrics Australasia
has been proportionally consolidated from that date.
On 29 November 2006 the Group acquired 20% of the shares of GreenFields bv, which were acquired for a cash
payment of € 1.3 million.
30.2 Divestments in 2006
The following interests were sold in 2006: Proceeds (including debt)
Plasticum group on 25 April 2006 (100% interest) € 14.4 million
TenCate Nicolon Australia on 24 May 2006 (100% interest) € 1.1 million
Synbra Group on 2 August 2006 (50% associated company) € 48.4 million
Landscape Solutions on 29 November 2006 (sale of 80% of share capital) € 0.1 million
30.3 Effects of the disposal of operating companies and associated companies
Tangible fixed assets
Associated companies
Other long-term receivables/deferred taxes
Inventories
Trade and other receivables
Cash and cash equivalents
Equity (reserve for translation differences)
Long-term debts
Banks, current accounts
Provisions
Trade creditors and other payables
Net identified assets and liabilities
Consideration received in cash
Cash purchased/sold
Net cash flow
Since the sales did not qualify as ‘discontinued operations’ under IFRS 5, the effects have not been stated
separately in the consolidated profit and loss account.
88
Royal Ten Cate Annual Report 2006
2006
– 12.3
– 12.2
– 2.2
– 4.7
– 8.1
– 0.1
0.4
2.5
0.9
7.1
7.5
– 21.2
63.2
0.8
64.0

The effect of the sale of the activities of Plasticum group, TenCate Nicolon Australia and Landscape Solutions in
2006 on the profit and loss account for 2006 and 2005 was as follows:
Revenues
Costs of raw materials and manufacturing supplies
and work contracted out
Other costs
Operating result
31 PERSONNEL COSTS
Wages and salaries
Social charges
Costs of option scheme
Pension costs
Temporary personnel
Personnel costs
The pension costs comprise € 2.0 million in respect of defined benefit pension schemes and € 3.0 million in
respect of defined contribution schemes (see note 50.3).
32 OTHER OPERATING COSTS
32.1 Government subsidies
The Group was granted government subsidies amounting to € 1.2 million in 2006 (2005: € 1.4 million).
32.2 Research and development
Geosynthetics
& Grass
Technical
Components
Geosynthetics
& Grass
Technical
Components
The costs associated with research and development amounted to € 8.1 million in 2006 (2005: € 5.8 million), of
which € 3.4 million (2005: € 2.3 million) has been stated in personnel costs and € 4.7 million (2005: € 3.4 million)
in other operating costs.
3.3
– 2.2
– 0.7
0.4
2006
13.0
– 6.6
– 6.1
0.3
7.8
– 5.5
– 1.7
0.6
2006
125.4
28.8
0.2
5.0
11.8
171.2
2005
36.2
– 17.9
– 16.5
1.8
2005
116.2
25.7
0.5
8.8
10.4
161.6
Royal Ten Cate Annual Report 2006 89

NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT
32.3 Result and income from sale of tangible fixed assets
In 2006 the Group sold a building and land on which a book profit of € 3.1 million was recorded.
Building and land
Other items
Result from sale
Book value of sold assets
Proceeds of sale
33 FINANCIAL INCOME AND EXPENSES
Interest income
Interest expenses
Foreign exchange translation differences
Net financial expenses
34 PROFIT TAX
34.1 Profit taxes payable
Current financial year
Release of provision in respect of previous years
34.2 Deferred profit tax
Valuation of timing differences
Use of tax losses
Total tax charge in profit and loss account
90
Royal Ten Cate Annual Report 2006
2006
3.1
0.6
3.7
0.8
4.5
2006
0.1
– 7.2
– 0.9
– 8.0
2006
– 14.2
1.4
– 12.8
– 1.0
2.4
1.4
– 11.4
2005
–
0.7
0.7
2.8
3.5
2005
0.2
– 5.2
0.4
– 4.6
2005
– 13.5
1.5
– 12.0
–
0.5
0.5
– 11.5

34.3 Reconciliation with applicable tax rate
Pre-tax result
Tax on profit at local profit tax rate
Losses not yet available for set-off
Non-tax deductible costs
Tax-exempt income
Use of loss set-off
Change of rate
Other items
Tax charge in profit and loss account
The change of rate is associated with the reduction of the tax rate in the Netherlands to 25.5% with effect from
1 January 2007.
35 RESULT FROM ASSOCIATED COMPANIES
The result of € 3.4 million (2005: € 4.4 million) relates to the share in the profit of Synbra Group BV (up to July
2006) and the share in the profit of Geofabrics Australasia for the first half of 2006.
36 RESULT FROM DIVESTED ACTIVITIES
See note 30.4.
Synbra Group
Plasticum Group
TenCate Nicolon Australia
Landscape Solutions
Mega Valves North Group
Permess Europe Group
Result from divested activities
%
36.2%
0.6%
1.0%
– 4.2%
– 5.6%
2.3%
– 3.1%
27.2%
2006
euro
42.1
15.3
0.2
0.4
– 1.7
– 2.4
1.0
– 1.4
11.4
%
38.9%
3.5%
1.3%
– 3.8%
– 1.5%
–
– 4.6%
33.8%
2006
39.3
2.7
– 0.1
0.1
–
–
42.0
2005
euro
33.9
13.3
1.2
0.4
– 1.4
– 0.5
–
– 1.5
11.5
2005
–
–
–
–
2.0
1.7
3.7
Royal Ten Cate Annual Report 2006 91

37 Notes to the consolidated balance sheet
in millions of euros
38 TANGIBLE FIXED ASSETS
Acquisition value
Balance as at 1 January 2005
Changes as a result of consolidations
Investments
Changes as a result of deconsolidations
Divestments
Exchange rate differences
Balance as at 31 December 2005
Balance as at 1 January 2006
Changes as a result of consolidations
Investments
Changes as a result of deconsolidations
Divestments
Exchange rate differences
Balance as at 31 December 2006
Depreciation
Balance as at 1 January 2005
Changes as a result of consolidations
Depreciation
Changes as a result of deconsolidations
Divestments
Exchange rate differences
Balance as at 31 December 2005
Balance as at 1 January 2006
Depreciation
Changes as a result of deconsolidations
Divestments
Exchange rate differences
Balance as at 31 December 2006
Book value
Balance as at 1 January 2005
Balance as at 31 December 2005
Balance as at 31 December 2006
92
Royal Ten Cate Annual Report 2006
Land,
industrial
buildings and
dwellings
95.4
34.3
1.2
– 10.6
– 0.8
4.8
124.3
124.3
2.0
5.0
– 11.4
– 2.3
– 4.6
113.0
40.3
13.1
3.1
– 3.2
– 0.2
1.4
54.5
54.5
4.0
– 4.4
– 1.7
– 1.1
51.3
55.1
69.8
61.7
Plant and
equipment
234.3
55.7
14.0
– 9.5
– 4.1
11.4
301.8
301.8
2.9
34.5
– 35.0
– 2.2
– 9.8
292.2
182.3
39.7
13.6
– 8.9
– 4.0
7.4
230.1
230.1
16.1
– 32.0
– 2.2
– 5.7
206.3
52.0
71.7
85.9
Other
operating
assets
41.5
10.4
2.3
– 7.5
– 0.9
1.0
46.8
46.8
0.7
2.4
– 12.6
– 0.4
– 0.7
36.2
35.0
8.6
1.9
– 6.4
– 0.5
0.8
39.4
39.4
2.0
– 10.8
– 0.2
– 0.7
29.7
6.5
7.4
6.5
Fixed assets
not used in the
production
Prepayments process
3.7
–
8.3
–
–
0.5
12.5
12.5
–
0.4
– 0.5
–
– 0.7
11.7
–
–
–
–
–
–
–
–
–
–
–
–
–
3.7
12.5
11.7
4.3
–
–
–
– 4.9
0.6
–
–
–
–
–
–
–
–
2.8
–
–
–
– 3.2
0.4
–
–
–
–
–
–
–
1.5
–
–
Total
379.2
100.4
25.8
– 27.6
– 10.7
18.3
485.4
485.4
5.6
42.3
– 59.5
– 4.9
– 15.8
453.1
260.4
61.4
18.6
– 18.5
– 7.9
10.0
324.0
324.0
22.1
– 47.2
– 4.1
– 7.5
287.3
118.8
161.4
165.8

38.1 Impairment and reversal of impairment
The Group recognised no impairment in 2006. No impairments were reversed during the year.
38.2 Leased plant and equipment
The Group leases buildings, plant and equipment under a number of financial lease contracts.
As at 31 December 2006 the net book value of these assets was € 2.4 million (31 December 2005: € 2.5 million).
The leased buildings, plant and equipment serve as collateral for the lease liabilities (see note 49).
38.3 Collateral
As at 31 December 2006, as was the case as at 31 December 2005, no land and buildings were encumbered as
collateral for bank loans.
38.4 Depreciation charge
The depreciation charge of € 22.1 million (2005: € 18.6 million) is included in depreciation and amortisation in
the profit and loss account.
Royal Ten Cate Annual Report 2006 93

NOTES TO THE CONSOLIDATED BALANCE SHEET
39 INTANGIBLE FIXED ASSETS
Cost
Balance as at 1 January 2005
Change as a result of consolidation
Investments
Divestments
Exchange rate differences
Balance as at 31 December 2005
Change as a result of consolidation
Investments
Divestments
Exchange rate differences
Balance as at 31 December 2006
Amortisation
Balance as at 1 January 2005
Amortisation/Impairments
Divestments
Exchange rate differences
Balance as at 31 December 2005
Change as a result of consolidation
Amortisation/Impairments
Divestments
Exchange rate differences
Balance as at 31 December 2006
Book value
Balance as at 1 January 2005
Balance as at 31 December 2005
Balance as at 31 December 2006
39.1 Amortisation/Impairments
The impairment of goodwill (€ 0.5 million) concerns the operating company Business Key.
94
Royal Ten Cate Annual Report 2006
Goodwill
11.7
–
0.3
– 0.2
1.5
13.3
0.4
–
–
– 1.1
12.6
2.3
0.3
– 0.2
0.4
2.8
0.2
0.5
–
– 0.2
3.3
9.4
10.5
9.3
Research/
development
–
–
–
–
–
–
–
0.2
–
–
0.2
–
–
–
–
–
–
–
–
–
–
–
–
0.2
Trademarks
and usage
rights
3.1
0.1
0.4
– 0.1
0.5
4.0
–
0.5
–
– 0.4
4.1
0.4
0.4
– 0.1
–
0.7
0.5
–
–
1.2
2.7
3.3
2.9
Total
14.8
0.1
0.7
– 0.3
2.0
17.3
0.4
0.7
–
– 1.5
16.9
2.7
0.7
– 0.3
0.4
3.5
0.2
1.0
–
– 0.2
4.5
12.1
13.8
12.4

39.2 Testing of the impairment for cash generating units which include goodwill
The following units include goodwill items:
Advanced Textiles & Composites (TenCate Advanced Armour)
Geosynthetics & Grass (Thiolon USA/Geofabrics Australasia)
Technical Components (Business Key)
In 2006 the Group tested the realisable value of the goodwill on the basis of the market value less sale costs.
The calculation uses future cash flows based on current results from operations and a five-year forecast. The
realisable value exceeds the book value of the cash generating units including goodwill to such an extent that no
impairment has been recognised. The changes in 2006 related largely to changes in exchange rates and the
impairment in respect of Business Key.
39.3 Amortisation/impairments
The amortisation of € 1.0 million (2005: € 0.7 million) is included in the ‘Depreciation and amortisation’ item in
the profit and loss account.
40 ASSOCIATED COMPANIES
The main associated companies included below are: Greenfields bv (Kampen, 20%) and Landscape Solutions bv
(Goirle, 20%).
Balance as at 1 January 2006
On acquisition of Greenfields (20%)
Result of Synbra up to July 2006
Result of Geofabrics Australasia up to June 2006
Foreign exchange translation differences
Dividend received from Geofabrics Australasia
Sale of 50% interest in Synbra
In consolidation of Geofabrics Australasia on 1 July 2006
Balance as at 31 December 2006
Associated
companies
16.9
1.3
2.7
0.7
– 0.7
– 0.6
– 12.2
– 6.8
1.3
The interest in Greenfields BV has for the present been valued at cost and no 2006 result has been recognised.
2006
1.2
8.1
–
9.3
Loans
0.5
–
–
–
–
–
–
– 0.5
–
2005
1.2
8.8
0.5
10.5
Total
17.4
1.3
2.7
0.7
– 0.7
– 0.6
– 12.2
– 7.3
1.3
Royal Ten Cate Annual Report 2006 95

NOTES TO THE CONSOLIDATED BALANCE SHEET
41 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 (€ 2.8 million) and an advance payment in connection with a long-term lease in China
and Malaysia (€ 1.9 million).
42 DEFERRED TAX RECEIVABLES AND LIABILITIES
The deferred tax receivables and liabilities stated in the balance sheet are attributable to the following items:
Tangible fixed assets
Intangible fixed assets
Financial fixed assets
Inventories
Other receivables
Pension provisions
Other provisions
Tax value of loss carry-forwards
Other
Deferred tax receivables/liabilities
Balance of receivables and liabilities
Net deferred tax receivables/liabilities
42.1 Deferred tax receivables not shown in the balance sheet
As at 31 December 2006 no deferred tax receivable was included in respect of an amount of € 13.7 million (2005:
€ 19.2 million) of losses available for set-off, because it is unlikely that the Group will be able to take advantage
of future taxable profit.
43 INVENTORIES
Raw materials and manufacturing supplies
Semi-manufactures
Finished products
Inventories
96
Royal Ten Cate Annual Report 2006
2006
0.1
0.4
0.3
1.6
0.3
7.7
3.6
2.3
1.0
17.3
– 5.4
11.9
Assets
2005
1.5
0.5
0.4
2.1
0.6
11.0
2.8
0.4
0.6
19.9
– 6.1
13.8
2006
– 2.5
– 2.6
– 0.2
–
–
–
– 0.3
–
–
– 5.6
5.4
– 0.2
Liabilities
2005
– 2.4
– 3.1
– 0.2
– 0.7
–
–
–
–
– 0.1
– 6.5
6.1
– 0.4
2006
40.7
32.9
84.1
157.7
2006
– 2.4
– 2.2
0.1
1.6
0.3
7.7
3.3
2.3
1.0
11.7
–
11.7
2005
44.2
30.8
82.5
157.5
Net
2005
– 0.9
– 2.6
0.2
1.4
0.6
11.0
2.8
0.4
0.5
13.4
–
13.4

44 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 direct sale costs (work contracted
out and other external costs).
45 OTHER RECEIVABLES
Receivable in respect of other taxes
Other receivables and prepayments
Other receivables
The other taxes receivable relate mainly to reclaimable VAT.
46 CASH AND CASH EQUIVALENTS
Bank balances
Cash balances
Cash and cash equivalents
Banks, current accounts
Cash in the cash flow statement
At the end of 2006 all amounts were freely available (end of 2005 € 0.2 million not freely available).
47 EQUITY
A statement of changes in equity can be found on page 74.
47.1 Ordinary shares
number x 1,000
Outstanding as at 1 January 2006*
Stock dividend issued
Outstanding as at 31 December 2006
* After split of par value from € 10 to € 2.50.
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 2006 amounts to 21,063,292 ordinary shares of a par value of € 2.50
(as at 31 December 2005: 20,784,472 ordinary shares of a par value of € 2.50).
2006
2.6
11.9
14.5
2006
6.6
0.1
6.7
– 29.1
– 22.4
2006
20,784
279
21,063
2005
2.8
12.5
15.3
2005
4.6
–
4.6
– 25.9
– 21.3
2005
20,472
312
20,784
Royal Ten Cate Annual Report 2006 97

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 2006 a dividend of € 0.70 (2005: € 0.60) 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 2006.
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 2007. The power to issue
shares concerns 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.
47.2 Repurchased ordinary shares
number x 1,000
Outstanding as at 1 January*
Repurchased shares
Exercise of options
Issued in connection with share plan
Outstanding as at 31 December
* After split of par value from € 10 to € 2.50.
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 repurchased shares have been purchased
at an average price of € 20.91.
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 3 October 2007. 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).
47.3 Share premium
The share premium reserve is to be considered as paid-up capital.
98
Royal Ten Cate Annual Report 2006
2006
207
345
– 38
– 5
509
2005
244
–
– 30
– 7
207

47.4 Retained earnings of associated companies
The reserve has been formed in respect of associated companies in which the free disposal of retained earnings
is subject to restrictions.
47.5 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.
47.6 Undistributed result
Subsequent to the balance sheet date the following dividend has been proposed, which has not yet been
included in the balance sheet.
€ 0.70 per ordinary share (2005: € 0.60)
After issue of 2,106,329 shares on 12 February 2007
48 EARNINGS PER SHARE
48.1 Ordinary earnings per share
The calculation of the ordinary earnings per share as at 31 December 2006 is based on the net profit attributable
to holders of ordinary shares of € 76.0 million (2005: € 30.5 million) and a weighted average number of outstanding
ordinary shares during the 2006 financial year of 20,749,431 (2005: 20,567,296), calculated as follows:
Net profit for the financial year attributable to holders of ordinary shares
Weighted average number of ordinary shares
number x 1,000
Outstanding ordinary shares on 1 January
Effect of ordinary shares held (including repurchased shares)
Effect of shares issued in connection with stock dividend
Effect of shares issued as a result of exercised option rights
Effect of shares issued as a result of share savings plan
Weighted average number of ordinary shares as at 31 December
2006
16.2
2006
76.0
2006
20,784
– 338
279
21
3
20,749
2005
12.5
2005
30.5
2005
20,472
– 244
312
23
4
20,567
Royal Ten Cate Annual Report 2006 99

NOTES TO THE CONSOLIDATED BALANCE SHEET
48.2 Diluted earnings per share
The calculation of the diluted earnings per share as at 31 December 2006 is based on the net profit of
€ 76.0 million attributable to the holders of ordinary shares (2005: € 30.5 million) and the weighted average number
of outstanding ordinary shares during the 2006 financial year of 21,264,631 (2005: 20,945,896), calculated as
follows:
Net profit for the financial year attributable
holders of ordinary shares
Weighted average number of ordinary shares
number x 1.000
Weighted average number of ordinary shares as at 1 January
Effect of outstanding option rights
Weighted average number of ordinary shares (after dilution)
as at 31 December
49 LONG-TERM DEBTS
Secured bank loans
Financial lease liabilities
Other unsecured loans
Less: repayment of loans in forthcoming year
Long-term debts
100
Royal Ten Cate Annual Report 2006
2006
76.0
2006
20,749
515
21,264
2006
59.6
2.3
2.9
64.8
– 1.3
63.5
2005
30.5
2005
20,567
379
20,946
2005
125.7
2.4
3.3
131.4
– 1.2
130.2

49.1 Conditions and repayment schedule
Secured bank loans
EUR – Euribor + margin
USD – variable interest
GBP – fixed interest 6.39%
SGD – fixed interest 5.38%
AUD – variable interest
Financial lease liabilities
EUR – fixed interest 7.00%
EUR – fixed interest 8.00%
EUR – fixed interest 6.51%
Other unsecured loans
USD – fixed interest 10%
EUR – fixed interest 0.5 – 3.0%
EUR – fixed interest 1.00%
Long-term debts
The euro loan with variable interest (Euribor + margin) is a syndicated loan of € 120 million concluded with a
syndicate of six banks. € 53 million of this facility was drawn as at 31 December 2006. The term of the loan is
five years (up to 30 November 2009) and 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 will be calculated quarterly in respect of
the preceding 12 months. The interest margin above three-month Euribor will be between 0.35% and 0.70%.
At the end of 2006 the margin was 0.35%.
The aforementioned syndicated loan is subject to a number of covenants, the principal of which are:
� total debt/EBITDA + Result from associated companies less than 3;
� EBITDA/net interest greater than 4;
2006
Total
52.6
3.1
–
–
3.9
2006
< 1 year
2007
1-2 years
2008/10
2-5 years
2011 ff.
> 5 years
� joint guarantee of operating companies with total assets of at least 60% of the Ten Cate 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 € 120 million is immediately
repayable.
0.1
1.2
1.0
–
1.0
1.9
64.8
–
–
–
–
0.1
0.1
0.1
0.1
–
0.9
–
1.3
–
–
–
–
0.2
–
0.1
0.1
–
0.1
–
0.5
52.6
–
–
–
3.6
–
0.5
0.2
–
–
–
56.9
–
3.1
–
–
–
–
0.5
0.6
–
–
1.9
6.1
2005
Total
119.5
3.4
2.5
0.3
–
0.1
1.2
1.1
0.2
1.2
1.9
131.4
Royal Ten Cate Annual Report 2006 101

NOTES TO THE CONSOLIDATED BALANCE SHEET
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.
The AUD loan with a variable interest rate was granted by Westpac Banking Corporation and has a term of three
years.
The euro loans with a fixed interest rate between 0.5% and 3% were granted by Forschungsförderungsfond,
Vienna, and Öberbank AG, Linz.
Of the total of long-term loans, 92% have variable interest. The risk associated with this variability is hedged by
means of a number of instruments (caps, swaps).
50 PENSION LIABILITIES
Defined benefit schemes
Discounted value of covered liabilities
Market value of fund investments
Discounted value of net liabilities
Unstated actuarial profits and losses
Total defined benefit schemes
Other liabilities in respect of pensions
Pension liabilities
50.1 Changes in the valuation of liabilities as at the balance sheet date
Balance of liabilities as at 1 January
Decrease in connection with divestment of associated companies
Service costs
Interest costs
Benefits paid
Curtailment income
Actuarial differences
Balance as at 31 December
102
Royal Ten Cate Annual Report 2006
2006
316.1
302.8
13.3
11.0
24.3
7.5
31.8
2006
326.5
–
326.5
7.5
13.8
– 14.3
– 3.9
– 13.5
316.1
2005
326.5
289.1
37.4
– 6.4
31.0
6.6
37.6
2005
302.4
– 3.9
298.5
9.8
13.6
– 13.2
– 2.5
20.3
326.5

50.2 Investments
Balance as at 1 January
Reduction in connection with divestment of associated companies
Expected return
Employer’s contribution
Members’ contributions
Actuarial profits and losses
Benefits paid
Balance as at 31 December
Analysis of investments as at 31 December
Bonds
Shares
Private loans
Hedge funds
Real estate
Cash
Pension fund investments
50.3 Charge stated in profit and loss account
Pension costs attributed to the year of service
Interest on the liabilities
Expected return on fund investments
Curtailment income
Pension costs in respect of previous years
Pension income/charges
The pension charges have been stated in the profit and loss account in an amount of € 2.0 million under personnel
costs, whereas the curtailment income (€ 3.9 million), as a result of the divestment of Plasticum on 25 April
2006, has been stated under the result from divested activities. 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.
2006
289.1
–
289.1
14.3
4.8
3.2
5.7
– 14.3
302.8
2006
158.6
105.0
–
15.4
23.3
0.5
302.8
2006
– 4.3
– 13.8
14.3
3.9
1.8
1.9
2005
265.9
– 3.0
262.9
14.4
5.3
4.0
15.7
– 13.2
289.1
2005
143.2
94.3
9.6
14.4
19.3
8.3
289.1
2005
– 5.8
– 13.6
14.3
2.5
–
– 2.6
Royal Ten Cate Annual Report 2006 103

NOTES TO THE CONSOLIDATED BALANCE SHEET
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.
50.4 Liability in respect of defined benefit schemes
The main actuarial assumptions as at the balance sheet date (in weighted averages):
Discount rate as at 31 December
Expected return on fund investments as at 31 December
Future wage increases
Future pension increases
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 1995 – 2000 with a two-year age reduction.
The age difference between men and women is set at three years. Account has been taken of expected future
ageing by means of an actuarial correction to the liability. The total expected long-term return on investments
is 5.7%. 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 the non-corrected historical returns. A 0.2% decrease
in the discount rate results in a decrease of € 0.3 million in annual charges and an increase of € 9.4 million in
the liability.
Historical information
Discounted value of covered liabilities
Market value of fund investments
Discounted value of net liabilities
Experience adjustments arising on liabilities of the scheme*
Experience adjustments arising on fund investments
* No figures are available for 2005 and 2004.
104
Royal Ten Cate Annual Report 2006
2006
316.1
302.8
13.3
– 1.6
5.7
2006
4.60%
5.70%
2.40%
1.70%
2005
326.5
289.1
37.4
15.7
2005
4.00%
5.00%
2.50%
1.50%
2004
302.4
265.9
36.5
5.8

In 2007 the Group expects to contribute € 1.3 million to defined benefit schemes.
51 PROVISIONS
Balance as at 1 January 2006
Formed as charge against result
Released to result
Expenditure in current year
Exchange rate differences
Balance as at 31 December 2006
Of which short-term
as at 31-12-2005
as at 31-12-2006
Guarantee/
claims
9.9
4.5
– 2.5
– 3.1
– 0.1
8.7
The amount released to the result has been included as follows in the profit and loss account:
Result from divested activities
Work contracted out and other external costs
Personnel costs
Other operating costs
Total
3.9
4.9
Other
personnel
liabilities
Environment
Reorganisation
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 is included under other items. The provision at the end of 2006 amounted to € 0,7 million
(2005: € 0.9 million).
5.4
– 0.7
– 0.1
4.6
–
–
1.7
0.1
1.8
–
–
0.6
– 0.5
– 0.1
–
0.6
–
Other
5.7
0.3
– 3.1
– 0.3
2.6
0.7
0.9
Total
23.3
4.9
– 6.8
– 3.6
– 0.1
17.7
5.2
5.8
3.1
1.3
0.6
1.8
6.8
Royal Ten Cate Annual Report 2006 105

52 Other information
53 FINANCIAL INSTRUMENTS
As part of the normal business operations, the Group incurs credit, interest and currency risks. The risk of
fluctuations in exchange rates and interest rates is hedged using derivatives.
53.1 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.
53.2 Interest rate risk
The policy with regard to interest rate risks is stated in the risk section on page 35 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 2006:
� 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 31-12-07: € 30 million 3.5%
� interest rate cap 30-12-05 to 31-12-09: € 25 million 3.5%
� interest rate cap 31-03-06 to 31-12-07: € 20 million 3.5%
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 2006 of € 0.2 million comprises € 0.4 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 € 0.6 million is included under other receivables.
53.3 Currency risk
The Group incurs currency risks on sales and purchases denominated in currencies other than the functional
currency of the operating companies in the Group. The currencies which give rise to this risk are primarily the
US dollar and, to a lesser extent, the Hong Kong, Singapore and Australian dollar, the Chinese renminbi and
the Malaysian ringgit.
106 Royal Ten Cate Annual Report 2006

Transaction risks
The Group hedges the 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.
53.4 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 2006 amounted to € 0.4 million, of which € 0.5 million was included under other
receivables and € 0.1 million under trade creditors and other payables.
53.5 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).
53.6 Sensitivity analyses
In managing interest rate and currency risks, the Group’s aim is to limit the effect of short-term fluctuations on
the Group result. In the longer term, however, sustained changes in exchange rates and interest rates will have
an effect on the consolidated result.
The effect of a general rise of one percentage point in the interest rate on the pre-tax result in 2006 is estimated
at € 0.7 million negative (2005: € 0.8 million). This calculation takes account of the interest rate swaps or caps.
A general rise of one percentage point in the value of the euro against other currencies would have reduced the
pre-tax result by an expected € 0.2 million (2005: € 0.1 million). Existing options and forward contracts have
been taken into account in this calculation.
Royal Ten Cate Annual Report 2006 107

OTHER INFORMATION
53.7 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 value of future cash flows, discounted at the
interest rate for comparable 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.
54 LIABILITIES NOT SHOWN IN THE BALANCE SHEET
Operational lease as lessee
Payments due under non-cancellable operational lease agreements are as follows
Less than 1 year
Between two and five years
More than five years
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.
55 INVESTMENT LIABILITIES
In 2006 the Group entered into contractual liabilities for the purchase of tangible fixed assets amounting to
€ 31.5 million (2005: € 18.9 million). Of this, € 11.7 million has already been prepaid and included under tangible
fixed assets.
108
Royal Ten Cate Annual Report 2006
2006
3.8
8.5
8.5
20.8
2005
4.6
9.0
4.2
17.8

56 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 made against Royal Ten Cate by United Fabrics nv, a company registered in the
Netherlands Antilles (majority shareholder in Textielgroep Twenthe nv). The claim is based on an outsourcing
and management agreement from 1998 and originally amounted to € 56 million. 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 prior to the sale of this
associated company, in exchange for a bank guarantee of € 1.8 million.
57 SUBSEQUENT EVENTS
A commentary on events subsequent to the balance sheet date can be found on page 123.
58 RELATED PARTIES
58.1 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.
58.2 Transactions
The 100% interest in TenCate Nicolon Australia was transferred to Geofabrics Australasia (50% interest) in
2006. The sale price was based on the market value. See note 30.1.
Royal Ten Cate Annual Report 2006 109

OTHER INFORMATION
58.3 Directors’ remuneration
The remuneration of the members of the Executive Board was as follows:
in thousands of euros
Periodic remuneration
Results-related pay (in respect of the previous year)
Pension costs
Remuneration in connection with change in pension
accumulation
In addition to the above pension contribution, compensation of € 232,000 was also paid for reduced accumulation.
In 2005 a catch-up payment was made in respect of past service (€277,000). As at 31 December 2006,
Mr De Vries held 44,922 shares in the company (31-12-2005: 43,764 shares).
Mr De Vries is participating in the Group share option plan (see note 71) and on 31 December 2006 held the following
options:
Issued on
27-02-2002
25-02-2003
25-02-2004
22-02-2005
01-03-2006
Mr P.H. van der Vorm has a management agreement which is based on the number of days worked. As at
31 December 2006 Mr Van der Vorm held no shares and had no Royal Ten Cate option rights.
110
Royal Ten Cate Annual Report 2006
Term until
27-02-2008
25-02-2009
25-02-2010
22-02-2011
01-03-2012
2006
421
210
107
–
738
Unconditional
in
2005
2006
2007
2008
2009
L. de Vries
2005
392
196
119
227
934
Number
40,000
40,000
40,000
50,000
60,000
230,000
2006
300
–
–
–
300
Exercise
price
6.42
6.18
10.29
15.17
23.63
P.H. van der Vorm
2005
369
–
–
–
369
Outstanding
40,000
40,000
40,000
50,000
60,000
230,000

The remuneration of the members of the Supervisory Board was as follows:
in euros
A.W. Veenman – Chairman
P.P.A.I. Deiters – Vice-Chairman
C.J.A.J.M. van Gestel (†)
F.A. van Vught
C.W. Versteeg
E. ten Cate
The members of the Supervisory Board held no shares or option rights of Royal Ten Cate at the end of 2006.
58.4 Operating companies
A list of (significant) subsidiaries and associated companies can be found inside the back cover of this report.
59 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 50.4. 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 51.
With regard to impairments in the case of loss-making companies, an examination has been carried out to
determine whether the realisable value of any cash generating unit was lower than the book value. This proved
to be the case with Business Key. See note 39.2.
2006
32,700
25,900
–
19,100
19,100
19,100
115,900
2005
32,700
25,900
4,775
19,100
19,100
19,100
120,675
Royal Ten Cate Annual Report 2006 111

60 Company financial statements
61 COMPANY PROFIT AND LOSS ACCOUNT
in millions of euros
Result from associated companies after tax
Result from divested activities after tax
Other results after tax
NET RESULT
112 Royal Ten Cate Annual Report 2006
2006
31.2
39.2
5.6
76.0
2005
26.1
–
4.4
30.5

62 COMPANY BALANCE SHEET
in millions of euros
FINANCIAL FIXED ASSETS
Interests in operating companies
Associated companies
Loans to operating companies
Deferred tax receivables
Other receivables
CURRENT ASSETS
Due from operating companies
Other receivables
TOTAL ASSETS
EQUITY
Share capital
Share premium reserve
Statutory reserve
Other reserves
Undistributed Result
PROVISIONS
LONG-TERM LIABILITIES
SHORT-TERM LIABILITIES
TOTAL EQUITY AND LIABILITIES
note
64
65
72
73
74
2006
186.1
1.3
140.1
2.6
0.1
330.2
0.5
2.0
2.5
332.7
52.7
6.3
– 2.0
105.7
76.0
238.7
3.0
56.0
35.0
332.7
2005
164.0
9.5
155.9
2.0
0.3
331.7
1.3
3.8
5.1
336.8
52.0
7.0
28.5
63.8
30.5
181.8
4.6
122.5
27.9
336.8
Royal Ten Cate Annual Report 2006 113

63 Notes to the company financial statements
GENERAL
Accounting principles
In determining the accounting principles for its parent company financial statements, Royal Ten Cate uses the
option available under article 2.362 paragraph 8 of the Netherlands Civil Code. This means that the accounting
principles for the parent company financial statements of Royal Ten Cate are the same as those applying to the
consolidated financial statements. Associated companies over which significant influence is 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 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.
64 FINANCIAL FIXED ASSETS
Balance as at 1 January
Acquisitions
Sale/Liquidation
Translation differences
Loans granted
Repayment of loans
Result from associated companies
Dividend of associated companies
Added to result
Balance as at 31 December
Royal Ten Cate is at the head of the Group and has capital interests in the operating companies stated on the
cover.
114 Royal Ten Cate Annual Report 2006
Interest in
operating
companies
164.0
17.9
– 2.2
– 6.2
28.5
– 15.9
186.1
Associated
companies
9.5
1.3
– 12.2
2.7
1.3
Loans
to operating
companies
155.9
– 10.5
85.7
– 91.0
140.1
Deferred
tax
receivables
2.0
0.6
2.6
Other
receivables
0.3
– 0.2
0.1
Total
331.7
19.2
– 14.4
– 16.7
85.7
– 91.2
31.2
– 15.9
0.6
330.2

65 EQUITY
The equity of the parent company financial statements corresponds to the equity of the consolidated financial
statements. A statement of changes in equity can be found on page 74.
66 CALLED AND PAID-UP CAPITAL
Authorised share capital
Of which not issued
67 ORDINARY SHARES
The authorised share capital consists of:
80,000,000 ordinary shares of € 2.50
7,000,000 ordinary shares of € 10
3,000,000 A preference shares (financing prefs) of € 10
10,000,000 B preference shares (protection prefs) of € 10
Balance as at 1 January
Ordinary shares 20,784,472 and 20,472,060*
Issued stock dividend 278,820 and 314,412*
Issued share capital as at 31 December
* After share split reducing the par value from € 10 to € 2.50.
68 SHARE PREMIUM RESERVE
Balance as at 1 January
Issued stock dividend
Balance as at 31 December
The share premium reserve is available for distribution to shareholders.
2006
200.0
147.3
52.7
2006
200.0
–
–
–
200.0
2006
52.0
0.7
52.7
2006
7.0
– 0.7
6.3
2005
200.0
148.0
52.0
2005
–
70.0
30.0
100.0
200.0
2005
51.2
0.8
52.0
2005
7.8
– 0.8
7.0
Royal Ten Cate Annual Report 2006 115

NOTES TO THE COMPANY FINANCIAL STATEMENTS
69 RETAINED EARNINGS OF ASSOCIATED COMPANIES
Balance as at 1 January
Added from appropriation of profit in respect of 2005 and 2004
Transfer to other reserves in connection with sale of associated company
Balance as at 31 December
This reserve has been formed in respect of associated companies in which the free disposal of retained earnings
is subject to restrictions.
69.2 Translation differences
Balance as at 1 January
Change in 2006 and 2005
Released to result in connection with sale of associated company
Balance as at 31 December
Balance of statutory reserve as at 31 December
70 OTHER RESERVES
Balance as at 1 January
Added from 2005 and 2004 result
Transfer from retained earnings of associated companies
Repurchase of own shares for share savings plan/option plan
Share and option schemes
Issue of repurchased shares for share savings plan/option plan
Balance as at 31 December
71 OPTION SCHEME
With effect from 2000 Royal Ten Cate has 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.
116 Royal Ten Cate Annual Report 2006
2006
23.9
4.4
– 28.3
–
2006
4.6
– 6.2
– 0.4
– 2.0
– 2.0
2006
63.8
20.3
28.3
– 7.2
0.2
0.3
105.7
2005
21.7
2.2
–
23.9
2005
– 4.9
9.5
–
4.6
28.5
2005
46.3
16.7
–
–
0.5
0.3
63.8

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 the maximum number of options granted in any one year will not exceed 1% of the total number of
shares outstanding. The exercise of options is subject to the restrictions laid down in the Securities Transactions
Supervision Act.
71.1 Share savings plan
All employees in the Netherlands have been given the possibility of participating in the share savings plan. The
maximum amount per participant in 2006 was € 1,226 (2005: € 1,226). 4,794 shares were saved under this
scheme in 2006, taking the total number of shares ‘saved’ by employees since 2002 to 44,954.
71.2 Repurchasing of 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 2005
Shares repurchased in 2006
Issued in respect of options
Issued in respect of share savings plan
Number at end of 2006
71.3 Granting of options in 2007
On 28 February 2007 the intention was to grant 220,000 conditional options at the average market price during
the five stock exchange trading days following publication of the annual results on 1 March 2007.
The distribution is as follows:
Members of the Executive Board
Members of the Management
* Provisional
28-02-2007*
60.000
160.000
220.000
207,140
345,000
– 38,400
– 4,794
508,946
01-03-2006
60.000
141.200
201.200
Royal Ten Cate Annual Report 2006 117

NOTES TO THE COMPANY FINANCIAL STATEMENTS
71.4 Statement of movements in options in 2006
Issued on
27-2-2002
25-2-2003
25-2-2004
22-2-2005
01-3-2006
28-2-2007
The Group received € 237,500 for the 38,400 options which were exercised during the year and € 111,961 for the
4,794 shares relating to the share savings plan.
72 PROVISIONS
Guarantees and claims
Others
The term of the provisions exceeds one year.
73 LONG-TERM LIABILITIES
Syndicated loan
Loans from operating companies
The conditions of the syndicated loan can be found in the notes to the consolidated balance sheet on page 101.
74 SHORT-TERM LIABILITIES
Banks, current accounts
Owed to consolidated operating companies
Trade creditors and other payables
118 Royal Ten Cate Annual Report 2006
Term until
27-2-2008
25-2-2009
25-2-2010
22-2-2011
01-3-2012
28-2-2013
Number of
options
80.000
88.200
95.600
152.400
201.200
617.400
220.000
Exercise
price
6.42
6.18
10.29
15.17
23.63
14.75
–
Exercised/
lapsed to
2005
37.600
–
–
–
37.600
–
2006
3.0
–
3.0
2006
52.6
3.4
56.0
2006
32.7
0.1
2.2
35.0
Exercised
in 2006
800
37.600
–
–
38.400
–
2005
1.9
2.7
4.6
2005
119.5
3.0
122.5
2005
25.4
_
2.5
27.9
Lapsed
in 2006
–
600
2.200
10.400
13.000
26.200
–
Outstanding
31-12-2006
41.600
50.000
93.400
142.000
188.200
515.200
–

75 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 56), a letter of
guarantee has been issued in an amount of € 1.8 million.
Almelo, 28 February 2007
Executive Board
L. de Vries, Chairman
P.H. van der Vorm
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 2006 119

Additional data
Royal Ten Cate
120 Royal Ten Cate Annual Report 2006

To the General Meeting of Shareholders of Royal Ten Cate
Auditor’s report
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements 2006 of Royal Ten Cate Almelo, for the year 2006 as set out on pages
69 to 119. 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
2006, 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 2006, 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.
Royal Ten Cate Annual Report 2006 121

AUDITOR’S REPORT
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 2006, 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 2006, 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, 28 February 2007
KPMG ACCOUNTANTS N.V.
A.J.M. Oude Weernink RA
122
Royal Ten Cate Annual Report 2006

Post balance sheet events
a. Mattex Leisure Industries
On 12 February 2007 TenCate announced that it had reached agreement with the owners of Mattex Leisure
Industries of Dubai on the acquisition of the artificial grass activities by means of an assets/liabilities transaction.
The artificial grass activities will be placed in a newly formed company: TenCate Thiolon Middle East LLC. It is
expected that this company will generate revenues of USD 70 million (€ 53 million) in 2007.
The acquisition price will be USD 178 million (€ 136 million). TenCate Thiolon Middle East will be fully integrated
into the TenCate Grass Group.
b. Share issue
On the same day, 12 February, 2,106,329 new ordinary shares were issued (less than 10% of the outstanding
share capital) at a price of € 24.50 per share. This resulted in a gross amount of € 51.6 million being added in
new equity.
The delivery of and payment for the new shares took place on 15 February, the day on which the new shares
were also listed on the Eurolist of Euronext Amsterdam. These shares are also entitled to dividend in respect
of 2006.
c. Issue of syndicated loan
On 13 February the issue of a new syndicated loan of € 250 million was announced. This loan, in addition to the
share issue of € 51 million, will be used to finance the acquisition of Mattex and Roshield and to replace
the existing loan.
It is expected that the loan will be concluded on 16 March.
d. Closing of Roshield acquisition
The closure of and payment for the acquisition of Roshield A/G took place on 16 February, after approval had
been granted by the Danish ministry of Justice.
Roshield, which is based in Odense (Denmark), is a young, fast growing company in the field of vehicle armour
and personal protection. It has recently won a number of major long-term orders worth approximately
€ 20 million.
Roshield will become part of the European Armour activities of TenCate Aerospace & Armour Composites.
The acquisition price is unchanged at € 34.7 million.
Royal Ten Cate Annual Report 2006 123

POST BALANCE SHEET EVENTS
e. Estimated effect on the balance sheet of Royal Ten Cate
The effect of the acquisition of Mattex and Roshield, as well as the share issue, on the balance sheet of Royal
Ten Cate as at 31 December 2006 can be described as follows on a pro-forma basis:
Total assets Equity + liabilities
TenCate 489 TenCate equity
Mattex/Roshield 190 TenCate interest-bearing debt
TenCate other items
679
The figures stated above for Mattex/Roshield are based on the locally applicable valuation principles.
The difference between the purchase price of the two companies and the net assets is € 138 million.
On the basis of IFRS 3 Business Combinations, the net assets will be valued at fair value following the acquisition
of Mattex and Roshield.
124
Royal Ten Cate Annual Report 2006
Previous
239 +
94 +
156 +
489 +
Increase
51 =
123 =
16 =
190 =
New
290
217
172
679
43%
32%
25%
100%

Provisions of the articles of association relating
to appropriation of profit
(Article 27)
General
The authorised capital comprises only ordinary shares.
Summary of the provisions of the articles of association
1 Profit distributions may only take place to the extent that the equity of the company exceeds the paid
and called-up part of the issued capital plus the reserves which must be held by law.
2 With the approval of the Supervisory Board, the Executive Board is authorised to determine the part of the
profit that will be reserved.
3 The sum remaining from the profit after the reservation in accordance with paragraph 2 is at the disposal of
the general meeting of shareholders.
4 Shares held by the company in its own capital are not taken into account in calculating the appropriation
of profit.
5 The dividend payable shall be made payable no later than 30 days after adoption of the financial statements
by the general meeting of shareholders. It shall be made payable only to the authorised persons in whose
name the shares are held. Such payments shall discharge the company.
6 A shareholder’s claim for payment shall be time-barred after a period of five years has elapsed.
Proposed appropriation of profit
in millions of euros
Net profit
Added to other reserves in accordance with article 27, paragraph 2 of the articles of association
Net addition to the reserve for retained earnings of associated companies
Undistributed dividend balance from previous year
Payment of € 0.70 (28%) and € 0.60 (24%) dividend to holders of ordinary shares in accordance
with article 27 paragraph 3 of the articles of association*
Undistributed dividend balance at year end, which is transferred to the relevant account
* After issue of 2,106,329 shares on 12 February 2007.
2006
76.0
– 58.5
17.5
– 1.3
16.2
0.5
16.7
– 16.2
0.5
2005
30.5
– 13.5
17.0
– 4.4
12.6
0.4
13.0
– 12.5
0.5
Royal Ten Cate Annual Report 2006 125

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

CONSOLIDATED BALANCE SHEET
Tangible fixed assets
Intangible fixed assets
Financial fixed assets
Total fixed assets
Inventories
Receivables
Securities and cash
Total current assets
TOTAL ASSETS
Equity*
Minority interests
Group equity
Provisions
Long-term liabilities
Banks and short term loans
Other short-term liabilities
TOTAL LIABILITIES
Guarantee capital/total capital
Acquisitions /(de)consolidations
Investments in tangible and intangible
fixed assets
Depreciation and amortisation
Cash flow
Number of staff years at year-end
Number of outstanding shares (x 1,000)**
Maximum increase from conversion**
Net earnings per € 2.50 share
Dividend per share in euro
Closing price in euro
* With effect from 2003 equity including dividend payable.
** After split of par value of shares from € 10.00 to € 2.50.
2006
165.8
12.4
18.3
196.5
157.7
128.2
6.7
292.6
489.1
238.7
0.2
238.9
43.8
63.5
30.4
112.5
489.1
49%
– 63.0
43.0
23.1
99.1
3,532
21,063
–
3.66
0.70
23.21
Figures based on IFRS Figures based on Dutch GAAP
2005
161.4
13.8
35.2
210.4
157.5
125.0
4.6
287.1
497.5
181.8
–
181.8
56.1
130.2
27.1
102.3
497.5
37%
40.8
26.2
19.3
49.8
3,578
20,784
–
1.48
0.60
21.50
2004
118.8
12.1
19.9
150.8
138.6
98.8
2.7
240.1
390.9
146.5
0.1
146.6
52.1
74.1
24.6
93.5
390.9
38%
29.2
12.0
19.2
42.9
3,634
20,472
–
1.17
0.50
13.55
2003
118.1
10.6
11.4
140.1
110.0
91.7
5.8
207.5
347.6
162.0
0.1
162.1
15.6
82.9
13.9
73.1
347.6
47%
0.3
16.9
19.6
39.9
3,245
20,096
–
1.03
0.43
9.02
2002
130.5
12.8
9.2
152.5
117.4
89.8
2.9
210.1
362.6
152.9
0.2
153.1
15.1
107.0
8.9
78.5
362.6
42%
1.4
17.0
24.0
57.5
3,278
19,192
–
1.63
0.40
6.25
2001
154.3
14.7
5.6
174.6
124.6
109.7
0.1
234.4
409.0
129.5
0.1
129.6
14.4
77.7
99.7
87.6
409.0
32%
23.6
28.5
26.0
27.7
3,625
18,872
768
– 0.31
0.13
6.50
2000
151.5
–
7.5
159.0
134.6
107.0
0.4
242.0
401.0
140.6
0.4
141.0
11.2
83.1
67.4
98.3
401.0
37%
14.8
29.5
25.2
49.4
3,585
18,872
1,200
1.30
0.52
8.23
1999
143.6
–
3.4
147.0
112.0
96.2
0.4
208.6
355.6
130.5
0.1
130.6
11.3
92.6
25.1
96.0
355.6
41%
34.6
33.7
30.1
51.7
3,970
18,092
1,716
1.20
0.48
9.38
1998
157.1
–
2.9
160.0
116.1
107.2
0.5
223.8
383.8
125.0
–
125.0
9.2
106.5
42.6
100.5
383.8
38%
0.5
29.2
27.9
– 14.1
3,886
18,092
2,296
– 2.34
0.34
7.26
1997
162.1
–
24.9
187.0
117.9
108.2
0.3
226.4
413.4
176.5
0.1
176.6
9.9
94.1
49.5
83.3
413.4
50%
11.1
29.8
27.5
41.3
3,848
17,732
2,936
0.78
0.36
9.93
Royal Ten Cate Annual Report 2006 127

Operating companies, associated
companies and other interests
as at 31 December 2006
ADVANCED TEXTILES & COMPOSITES
Ten Cate Advanced Textiles bv Nijverdal (NL)
Holding Ten Cate Advanced Textiles group
Ten Cate Protect bv Nijverdal (NL)
Fabrics for work and protective clothing and professional wear
Ten Cate Protective Fabrics USA inc Union City, Georgia, USA
Fabrics for protective clothing
Ten Cate Technical Fabrics bv Nijverdal (NL)
Outdoor fabrics
Ten Cate Advanced Weaving Nijverdal (NL)
Fabrics for applications in specialist professions and outdoor applications
Ten Cate Advanced Spinning bv Nijverdal (NL)
High-grade yarns
Ten Cate Permess Interlinings Hong Kong ltd Hong Kong, China
Ten Cate Permess Xishan Xishan, China
Sale and production of interlinings
Ten Cate Advanced Composites bv Nijverdal (NL)
Components for aircraft construction and antiballistic materials
Ten Cate Advanced Composites USA inc San José,
Components for aerospace and antiballistic materials California, USA
Ten Cate Advanced Armour S.A.S. Vienne, France
Antiballistic materials
GEOSYNTHETICS & GRASS
Ten Cate Geosynthetics Netherlands bv Almelo (NL)
Ten Cate Geosynthetics North America inc Atlanta, Georgia, USA
Ten Cate Geosynthetics Austria GmbH Linz, Austria
Ten Cate Geosynthetics France S.A.S. Bezons, France
Ten Cate Geosynthetics Asia sdn bhd Kuala Lumpur, Malaysia
Geofabrics Australasia pty ltd (50%)
Geotextiles and industrial fabrics
Cheltenham, Australia
Ten Cate Geosynthetics sdn bhd (Malaysia) Kuala Lumpur,
Malaysia
Ten Cate Geosynthetics (Thailand) ltd Bangkok, Thailand
Ten Cate Geosynthetics pte ltd Singapore
Ten Cate Geosynthetics Italia sri Lazzata, Italy
Ten Cate Geosynthetics (UK) ltd Telford, United Kingdom
Ten Cate Geosynthetics sl Madrid, Spain
Ten Cate Geosynthetics Schweiz AG Zurich, Switzerland
Ten Cate Deutschland GmbH Dietzenbach, Germany
Ten Cate Geosynthetics Polska Spzoo Krakow, Poland
Ten Cate Geosynthetics CZ sro Prague, Czech Republic
Sales offices
Ten Cate Thiolon bv Nijverdal (NL)
Ten Cate Thiolon North America inc Dayton, Tennessee, USA
Artificial grass fibres
Ten Cate Thiobac bv Nijverdal (NL)
Backing for artificial grass and carpets

TECHNICAL COMPONENTS
Ten Cate Enbi International bv Beek (NL)
Ten Cate Enbi GmbH Opladen, Germany
Ten Cate Enbi Kft Rétság, Hungary
Ten Cate Enbi inc Shellbyville, Indiana, USA
Ten Cate Enbi pte ltd Singapore
Ten Cate 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
Business Key sl Barcelona, Spain
Trading in components for fluid systems for agriculture, horticulture,
industry and construction
OTHERS
Ten Cate Assurantiën bv Almelo (NL)
Insurance
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.
Ten Cate Nederland bv Almelo (NL)
Royal Ten Cate USA inc Atlanta, Georgia, USA
Ten Cate UK ltd London, United Kingdom
Ten Cate France S.A.S. Paris, France
Ten Cate Deutschland GmbH Opladen, Germany
Royal Ten Cate Pacific ltd Hong Kong, China
Royal Ten Cate China Holding ltd
Country holding companies
Hong Kong, China
NON-CONSOLIDATED COMPANIES
DIS Enbi Seals Ireland ltd (20%) Portlaoise, Ireland
Seals
GreenFields bv (20%) Kampen (NL)
Marketing organisation for artificial grass
Landscape Solutions bv (20%) Goirle (NL)
Artificial grass for landscaping
Royal Ten Cate Annual Report 2006

COLOPHON
Text
Royal Ten Cate
Translation
VVH business translations, Utrecht (NL)
Concept and realisation
C&F Report Amsterdam B.V.
Photography
Picture Report, Amsterdam
Getty Images
Royal Ten Cate
Arjan Reef
Pete Sajic
Number of copies printed
2,500
Operating companies, associated companies and other interests

Royal Ten Cate
Egbert Gorterstraat 3
7607 GB Almelo
The Netherlands
P.O. Box 58
7600 GD Almelo
The Netherlands
Telephone +31 (0)546 544 911
Fax +31 (0)546 814 145
royal@tencate.com
www.tencate.com