4 for 3 Rights Issue of up to 194,217,582 New Ordinary Shares

Proof 5: 13.12.10

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000, if you are resident in the UK or, if not, from another appropriately authorised independent financial adviser. If you sell or have sold or otherwise transferred all of your Existing Ordinary Shares (other than ex-rights) held in certificated form before 8.00 a.m. on 31 December 2010 (the ‘‘ex-rights date’’), please forward this document, together with the accompanying Form of Proxy and any Provisional Allotment Letter that you may receive, duly renounced, as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee except that such documents should not be forwarded or transmitted into any jurisdiction where to do so might constitute a violation of local securities laws or regulations including, but not limited to, (subject to certain exceptions) the US and the Excluded Territories. If you sell or have sold or otherwise transferred Ordinary Shares (other than ex-rights) held in uncertificated form before the ex-rights date, a claim transaction will automatically be generated by Euroclear which, on settlement, will transfer the appropriate number of Nil Paid Rights to the purchaser or transferee. If you have sold or transferred part of your holding of Existing Ordinary Shares you should immediately consult the stockbroker, bank or other agent through whom the sale or transfer was effected. This document, which comprises (i) a circular prepared in compliance with Listing Rule 13 and (ii) a prospectus relating to the Rights Issue prepared in accordance with the Prospectus Rules of the UK Listing Authority under section 73A of FSMA, has been approved by the FSA in accordance with section 85 of FSMA and made available to the public in accordance with paragraph 3.2 of the Prospectus Rules. The Directors, whose names appear on page 26 of this document, and Yule Catto accept responsibility for the information contained in this document. To the best of the knowledge of the Directors and Yule Catto (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and contains no omission likely to affect the import of such information. The Existing Ordinary Shares are listed on the premium segment of the Official List maintained by the UK Listing Authority and traded on the London Stock Exchange’s main market for listed securities. Applications will be made to the UK Listing Authority for the New Ordinary Shares to be admitted to the Official List and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the London Stock Exchange’s market for listed securities. It is expected that Admission will become effective and dealings in the New Ordinary Shares, nil paid, will commence for normal settlement at 8.00 a.m. on 31 December 2010. The distribution of this document and/or the accompanying documents, and/or the transfer of Nil Paid Rights, Fully Paid Rights and/ or New Ordinary Shares, into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document and/or the accompanying documents come should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdictions.  (incorporated in England and Wales with registered number 98381) 4 for 3 Rights Issue of up to 194,217,582 New Ordinary Shares at 116 pence per New Ordinary Share, Acquisition of the entire issued share capital of PolymerLatex Deutschland Beteiligungsgesellschaft mbH and Notice of General Meeting

HSBC Bank plc Barclays Capital Sole Financial Adviser, Sole Sponsor, Joint Global Coordinator and Joint Bookrunner Joint Global Coordinator and Joint Bookrunner

Collins Stewart RBS Hoare Govett Joint Bookrunner and Joint Corporate Broker Joint Bookrunner and Joint Corporate Broker

Commerzbank AG Co-Lead Manager

Your attention is drawn to the letter from the Chairman of Yule Catto that is set out in Part I of this document, recommending you vote in favour of the Resolutions to be proposed at the General Meeting. You should read the whole of this document and any documents incorporated herein by reference. Shareholders and any other persons contemplating a purchase of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares or whether to vote in favour of the Resolutions should review the section of this document entitled ‘‘Risk Factors’’ set out on pages 12 to 23 for a discussion of certain factors that should be considered when deciding on what action to take in relation to the Rights Issue and in deciding whether or not to purchase the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares or whether to vote in favour of the Resolutions. Notice of a General Meeting of Yule Catto, to be held at the offices of the Company at Temple Fields, Central Road, Harlow, Essex CM20 2BH on 30 December 2010 at 11.00 a.m. is set out at the end of this document. The Form of Proxy for use at the General Meeting is enclosed with this document and should be completed in accordance with the instructions printed on the Form of Proxy and returned to the Group’s registrars Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by no later than 11.00 a.m. on 24 December 2010. Completion and return of the Forms of Proxy will not preclude you from attending and voting at the General Meeting, should you so wish. The latest time and date for acceptance and payment in full under the Rights Issue is expected to be 11.00 a.m. on 17 January 2011. The procedure for acceptance and payment is set out in Part IV of this document. Certain information in relation to Yule Catto is incorporated by reference into this document. Capitalised terms have the meanings ascribed to them in Part XIII of this document. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied on as having been so authorised. The delivery of this document shall not, under any circumstances, create any implication that there has been no change in the affairs of Yule Catto since the date of this document or that the information in it is correct as of any subsequent time. HSBC, Barclays Capital, RBS and Collins Stewart are authorised and regulated by the FSA. Commerzbank is authorised by BaFin and regulated in the UK by the FSA. HSBC is acting for Yule Catto and no one else in connection with the Acquisition and the Rights Issue and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Acquisition or the Rights Issue, and will not be responsible to anyone other than Yule Catto for providing the protections afforded to its client or for providing advice in relation to the Acquisition or the Rights Issue. Each of Barclays Capital, RBS, Collins Stewart and Commerzbank are acting for Yule Catto and no one else in connection with the Rights Issue and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Rights Issue or the Acquisition and will not be responsible to anyone other than Yule Catto for providing the protections afforded to their respective clients or for providing advice in relation to the Acquisition or the Rights Issue. Qualifying non-CREST Shareholders should retain this document for reference pending receipt of a Provisional Allotment Letter. Qualifying CREST Shareholders should note that they will receive no further written communication from the Group in respect of the Rights Issue. They should accordingly retain this document for, inter alia, details of the action they should take in respect of the Rights Issue. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Rights Issue. Holdings of Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. None of the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares nor the Provisional Allotment Letters have been or will be registered under the United States Securities Act of 1933 (the ‘‘Securities Act’’), as amended, or under the securities laws of any state or other jurisdiction of the United States or qualify for distribution under any of the relevant securities laws of the Excluded Territories. The Nil Paid Rights, Fully Paid Rights, New Ordinary Shares and PALs are being offered and sold only outside the United States in offshore transactions in accordance with Regulation S. Subject to certain exceptions, none of the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares nor the Provisional Allotment Letters may be offered, sold, resold, delivered or transferred, directly or indirectly, in or into the US or the Excluded Territories. Overseas Shareholders and any person (including, without limitation, custodians, nominees and trustees) who have a contractual or other legal obligation to forward this document to a jurisdiction outside the United Kingdom should read the paragraph entitled ‘‘Overseas Shareholders’’ in Part IV of this document. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, Nil Paid Rights, Fully Paid Rights, New Ordinary Shares or Provisional Allotment Letters offered by any person in any jurisdiction in which such an offer or solicitation is unlawful. Apart from the responsibilities and liabilities, if any, which may be imposed on the Underwriters by the FSMA or the regulatory regime established thereunder, the Underwriters do not accept any responsibility whatsoever, and they make no representation or warranty, express or implied for, the contents of this document, including its accuracy, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Group, the Acquisition or the Rights Issue and nothing in this document is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. The Underwriters accordingly disclaim all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which any of them might otherwise have in respect of this document.

United States The Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have not been and will not be registered under the Securities Act or under any relevant securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within, in, or into the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in compliance with state laws. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares in the United States. The offer is being made outside the United States in offshore transactions, as deﬁned in, and in reliance on, Regulation S. None of the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares or this document or any other offering document has been approved or disapproved by the US Securities and Exchange Commission, any federal or state securities commission or any other US regulatory authority nor has any such authority passed upon or endorsed the merits of the Rights Issue or the accuracy or the adequacy of this document. Any representation to the contrary is a criminal offence in the United States.

2 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Until 40 days after commencement of the Rights Issue, an offer, sale or transfer of Nil Paid Rights, Fully Paid Rights, New Ordinary Shares or Provisional Allotment Letters within the United States by a dealer (whether or not participating in the Rights Issue) may violate the registration requirements of the Securities Act.

Australia This document has not been lodged with the Australian Securities & Investments Commission and is only directed to certain categories of exempt persons. Accordingly, if you receive this document in Australia you warrant and agree that you will not offer any of the shares issued to you pursuant to this document for resale in Australia within 12 months of those shares being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act 2001 (Cth) of Australia.

Canada The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares have not been and will not be registered under the securities legislation of any province or territory of Canada. Subject to certain exceptions, none of the Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares will be directly or indirectly offered for subscription or purchase, taken up, sold, delivered, renounced or transferred in or into Canada. Therefore, subject to certain exceptions, the Rights Issue will not be made within Canada and Provisional Allotment Letters not be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in Canada.

South Africa The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares have not been and will not be registered under the securities legislation of any province or territory of South Africa. Subject to certain exceptions, none of the Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares will be directly or indirectly offered for subscription or purchase, taken up, sold, delivered, renounced or transferred in or into South Africa. Therefore, subject to certain exceptions, the Rights Issue will not be made within South Africa and Provisional Allotment Letters not be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in South Africa.

EEA In relation to each member state of the EEA which has implemented the Prospectus Directive (each, a ‘‘Relevant Member State’’) (except for the United Kingdom) an offer to the public of the Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares may not be made in that Relevant Member State other than the offers contemplated in this document in the United Kingdom once this document has been approved by the FSA except that an offer to the public in that Relevant Member State of any Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than c43,000,000 and (3) an annual net turnover of more than c50,000,000, as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Joint Sponsors for any such offer; or (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares shall result in a requirement for the publication by the Company or the Joint Sponsors of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an ‘‘offer to the public’’ in relation to any Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares to be offered so as to enable an investor to decide to purchase any Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Japan The Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares have not been and will not be registered under the Financial Instruments and Exchange Law, as amended (the ‘‘FIEL’’). This document is not an offer of securities for sale, directly or indirectly, in Japan or to, or for the beneﬁt of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or entity organised under the laws of Japan) or to others for reoffer or resale, directly or indirectly, in Japan or to, or for the beneﬁt of, any resident of Japan, except pursuant to an exemption from the registration requirements under the FIEL and

3 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS otherwise in compliance with such law and any other applicable laws, regulations and ministerial guidelines of Japan.

Switzerland This document does not constitute an prospectus within the meaning of Articles 652a and 1156 of the Swiss Code of Obligations or a listing prospectus according to Article 32 of the Listing Rules of the SWX Swiss Exchange. The Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares will not be listed on the SWX Swiss Exchange and, therefore, the document does not comply with the disclosure standards of the Listing Rules of the SWX Swiss Exchange. Accordingly, the Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares may not be offered to the public in or from Switzerland, but only to a selected and limited group of investors, which do not subscribe the New Ordinary Shares with a view to distribution to the public. The investors may be individually approached by the Banks from time to time. This document is personal to each offeree and does not constitute an offer to any other person. The document may only be used by those persons to whom it has been handed out in connection with the offer described herein and may neither directly nor indirectly be distributed or made available to other persons without the express consent of the Company. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in or from Switzerland.

Malaysia This document is not intended to be and will not be circulated in Malaysia in any manner whatsoever and accordingly no offer nor acceptance pursuant to the terms of this document shall or is intended to be made in Malaysia. The proposed Rights Issue and this document have not been approved or registered with any regulatory authority in Malaysia (including the Malaysian Securities Commission). In accepting this document and/or the proposed Rights Issue, each Shareholder acknowledges and agrees that no such offer is made in Malaysia and that the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have not been and will not be registered under the securities legislation of Malaysia or with the Malaysian Securities Commission. Therefore, subject to certain exceptions, the Rights Issue will not be made within Malaysia and Provisional Allotment Letters not be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in Malaysia. The contents of this document are not to be construed as legal, business or tax advice. Each Shareholder should consult his, her or its own legal adviser, ﬁnancial adviser or tax adviser for legal, ﬁnancial or tax advice. The contents of Yule Catto’s website do not form part of this document.

4 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS CONTENTS

SUMMARY 6 RISK FACTORS 12 EXPECTED TIMETABLE OF PRINCIPAL EVENTS 24 RIGHTS ISSUE STATISTICS 25 DIRECTORS, COMPANY SECRETARY AND ADVISERS 26 IMPORTANT INFORMATION 28 PART I – LETTER FROM THE CHAIRMAN OF YULE CATTO & CO PLC 33 PART II – SUMMARY OF THE PRINCIPAL TERMS OF THE ACQUISITION 41 PART III – QUESTIONS AND ANSWERS ON THE RIGHTS ISSUE 43 PART IV – TERMS AND CONDITIONS OF THE RIGHTS ISSUE 48 PART V – INFORMATION ON YULE CATTO 73 PART VI – INFORMATION ON POLYMERLATEX 81 PART VII – OPERATING AND FINANCIAL REVIEW OF THE YULE CATTO GROUP 88 PART VIII – FINANCIAL INFORMATION ON YULE CATTO 108 PART IX – FINANCIAL INFORMATION ON POLYMERLATEX 109 PART X – UNAUDITED PRO FORMA FINANCIAL INFORMATION 152 PART XI – ADDITIONAL INFORMATION 156 PART XII – DOCUMENTS INCORPORATED BY REFERENCE 193 PART XIII – DEFINITIONS 195 PART XIV – GLOSSARY 200 NOTICE OF GENERAL MEETING OF YULE CATTO & CO PLC 201

5 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS SUMMARY

The following information should be read as an introduction to and in conjunction with the full text of this document. Any investment decision relating to Yule Catto, the Rights Issue, the Acquisition, or the Enlarged Group should be based on a consideration of this document as a whole, including the documents incorporated by reference. Shareholders should therefore read this entire document and not rely solely on this summary. In particular, Shareholders should not rely on the summarised ﬁnancial information in this Summary and should read the ﬁnancial information contained in the remainder of the document. Civil liability will attach to those persons responsible for this summary (including any translation of this summary) in any member state of the European Economic Area, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document. Where a claim relating to the information contained in this document is brought before a court in a member state of the European Economic Area, the claimant may, under the national legislation of the member state where the claim is brought, be required to bear the costs of translating this document before the legal proceedings are initiated.

1. Introduction The Board announced on 13 December 2010 that Yule Catto had (through its wholly-owned subsidiary Yule Catto Holdings GmbH) entered into an agreement with PolymerLatex Holdings B.V. to acquire the entire issued share capital of PolymerLatex.

2. Summary of the terms of the Acquisition On 13 December 2010, the Board announced that the Company had entered into a conditional agreement with PolymerLatex Holdings B.V. (a company owned by funds controlled by TowerBrook) to acquire the entire issued share capital of PolymerLatex for cash consideration of c157 million (£133 million) and to assume the PolymerLatex Group’s existing net indebtedness of c286 million (£243 million), giving a total transaction value of c443 million (£376 million1). In addition, the Enlarged Group will continue to fund the PolymerLatex Group’s unfunded pension liability, which, as at 31 December 2009, was estimated at c31 million (£26 million). Completion under the Acquisition Agreement is conditional upon: * resolutions being passed by Shareholders approving, inter alia, the Acquisition and the Rights Issue; * Admission becoming effective; * relevant competition clearances in connection with the Acquisition being obtained; and * there not having occurred a material adverse change in the business of the PolymerLatex Group prior to Completion. In the event that such conditions are not satisﬁed (or waived) within six months of the date of the Acquisition Agreement, the Acquisition Agreement will terminate with immediate effect.

3. Background to and reasons for the Acquisition The Directors believe that the Acquisition delivers a number of strategic beneﬁts to Yule Catto, including the following: * building Yule Catto’s position in the xSBR market by adding European manufacturing assets, new end-markets and applications development capabilities; * providing Yule Catto with access to additional nitrile latex capacity in Malaysia. This offers the opportunity to expand Yule Catto’s product offering in the growing synthetic latex protective gloves market; and * providing Yule Catto with access to additional manufacturing process expertise, research and development and technical service capabilities. The Directors believe that the Acquisition will result in a business with increased scale, established market positions, improved cash generation capability and a leading product portfolio that will provide a foundation from which the Enlarged Group can grow and compete more effectively in a consolidating emulsion polymers market, while investing in new products and capacities in emerging markets.

1 Sterling amount based on the c:£ exchange rate of c1.18: £1.

6 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 4. Financial Effects of the Acquisition The Directors expect the Acquisition to be accretive to earnings per share in 2011 and signiﬁcantly accretive thereafter. This is based on an assumed completion date of 1 January 20111 and before any exceptional restructuring costs. The Board believes that the Enlarged Group will be able to achieve annual cost synergies of at least £20 million, the majority of which are expected to be achieved through efﬁciency improvements in manufacturing operations and the selling, general and administrative functions of the Enlarged Group. The expected cost of realising these synergies is approximately £20 million, the majority of which will be incurred in 2011.

5. Financing the Acquisition Yule Catto proposes to fund the Acquisition and associated costs by way of:

* a 4 for 3 rights issue of New Ordinary Shares at a price of 116 pence per share to raise gross proceeds of approximately £225 million; and

* New Credit Facilities comprising a euro-denominated £150 million 3 year term loan facility and a £60 million 3 year multicurrency revolving credit facility (of which £15 million will be drawn down for the purposes of funding the Acquisition).

6. Information on Yule Catto Yule Catto is a FTSE 250 chemical manufacturer, with assets in Europe, Asia, the Middle East, South Africa and Mexico. It is the Group’s ultimate parent company. The Group has three operating divisions: Polymer Chemicals, Pharma Chemicals and Impact Chemicals. The selected consolidated historical ﬁnancial information presented below has been prepared in accordance with IFRS and has been extracted without material adjustment from, and should be read together with:

* Yule Catto’s audited consolidated ﬁnancial statements included in its Annual Report and Accounts for each of the years ended 31 December 2009, 2008 and 2007 (incorporated by reference into this document); and

* Yule Catto’s unaudited condensed consolidated financial statements included in its Interim Results for the six month periods ended on 30 June 2010 and 2009 (incorporated by reference into this document). 6 months 6 months ended ended Year ended Year ended Year ended 30 Jun 30 Jun 31 Dec 31 Dec 31 Dec 2010 2009 2009 2008 2007 £000 £000 £000 £000 £000 Underlying Total sales* 326,647 264,299 532,162 591,081 503,533 EBITDA 36,061 31,277 63,930 56,961 54,585 Operating profit 28,699 24,177 49,416 41,694 41,165 EBITDA margin 11.0% 11.8% 12.0% 9.6% 10.8% Earnings per share 12.6p 10.0p 20.6p 17.4p 15.5p Dividends declared per share 2.0p 0.0p 0.0p 4.0p 9.6p Cash generated from operations 15,596 23,173 64,499 44,299 49,447 Free cash flow before dividend (4,815) 12,121 39,001 7,781 14,012

IFRS Total sales* 332,336 269,656 543,398 602,153 512,925 EBITDA 36,061 31,277 63,930 56,961 54,585 Operating proﬁt 41,438 25,670 21,406 40,786 41,032 EBITDA margin 10.9% 11.6% 11.8% 9.5% 10.6% Earnings per share 21.1p 9.9p 6.6p 37.7p 9.5p Dividends per share 2.0p 0.0p 0.0p 4.0p 9.6p Cash generated from operations 15,596 23,173 64,499 44,299 49,447 Free cash ﬂow before dividends (4,815) 12,121 39,001 7,781 14,012 * Total sales include the Group’s share of joint ventures’ revenue, which is excluded from Group revenue.

1 Shareholders should note that completion of the Acquisition is subject to certain conditions, including competition clearances, and is expected to occur within four months from the date of the document.

7 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 7. Information on PolymerLatex PolymerLatex was founded in 1996 as a 50:50 joint venture between Bayer AG and Degussa AG and is a developer, manufacturer and distributor of emulsion polymer products with assets in Europe and Asia. The PolymerLatex Group operates through six industry teams: Paper, Carpet, Foam, Construction and Paints, Protective Gloves and Functional Polymers. PolymerLatex has been majority owned by funds managed by TowerBrook Capital Partners (UK) LLP since 2003. A summary of key income statement and cash flow figures of the PolymerLatex Group for the three financial years ended 31 December 2009 is set out below.

Year ended Year ended Year ended 31 Dec 31 Dec 31 Dec 2009 2008 2007 d000 d000 d000 Underlying Total sales* 386,670 516,075 493,305 EBITDA 54,573 49,611 62,849 Operating profit 37,161 25,167 42,252 EBITDA margin 14.1% 9.6% 12.7% Cash generated from operations 47,855 47,483 49,178 Free cash flow before dividend 390 11,543 (975) IFRS Total sales* 386,670 516,075 493,305 EBITDA 40,165 43,906 60,054 Operating profit 12,484 5,408 25,415 EBITDA margin 10.4% 8.5% 12.2% Cash generated from operations 47,855 47,483 49,178 Free cash flow before dividends 390 11,543 (975) * Total sales includes the PolymerLatex Group’s share of the Finnish joint venture’s revenue.

8. Current trading and prospects of Yule Catto In the six months to 30 June 2010, underlying total sales, as compared to the same period in the prior financial year, increased by 24 per cent. Underlying operating profit for the same six month period increased by 19 per cent.. Underlying EBITDA margin was down 0.8 per cent. compared with the same period in the prior financial year. The increase in total sales was mainly driven by strong performance in the Polymer Chemicals division, which represented 86 per cent. of divisional operating profit. The decrease in underlying EBITDA margin was mainly due to sharply increased raw material prices, which the Group has had some success in passing through to customers. Trading since 30 June 2010 has been in line with management expectations.

9. Current trading and prospects of PolymerLatex The PolymerLatex Group saw strong trading throughout the ﬁrst six months of 2010, with underlying total sales of c279.6 million and underlying EBITDA of c33.8 million. Unit cash margin has improved which was mainly driven by greater volume and a higher cash margin. Management believe that, since 30 June 2010, the PolymerLatex Group’s trading performance has continued in line with these trends.

10. Principal terms of the Rights Issue The New Ordinary Shares will be offered by way of rights at 116 pence per share to Qualifying Shareholders (other than, subject to certain exemptions, Shareholders in the US and the Excluded Territories) on the basis of: 4 New Ordinary Shares for every 3 Existing Ordinary Shares. The Issue Price represents a discount of approximately 55.4 per cent. to the Closing Price for an Existing Ordinary Share of 260 pence on 10 December 2010 (being the latest practicable date prior to the date of the Announcement) and discount of approximately 34.7 per cent. to the theoretical ex- rights price (calculated by reference to the Closing Price).

8 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares. The Rights Issue has been fully underwritten by the Underwriters (save in respect of those New Ordinary Shares which are being taken up pursuant to the KLK Irrevocable Undertaking) and is conditional upon: * the Resolutions being passed, without amendment, at the General Meeting; * Admission becoming effective by not later than 8.00 am on 31 December 2010 (or such later time and/or date as Yule Catto and the Joint Global Co-ordinators may agree); and * the Acquisition Agreement not having been terminated, and the Acquisition not ceasing to be capable of Completion in accordance with the terms of the Acquisition Agreement prior to Admission; and * the Underwriting Agreement having become unconditional in all respects (save for conditions relating to Admission) and not having been terminated in accordance with its terms prior to Admission. KLK, which is a signiﬁcant Shareholder, has given an irrevocable undertaking to take up (and procure the take up of) the full entitlement of the KLK Group under the Rights Issue. The KLK Group is being paid a commission of 1.75 per cent. of the aggregate value, at the Issue Price, of the New Ordinary Shares KLK has agreed to take up (and procure the take up of) under the Rights Issue. Application has been made to the UK Listing Authority and to the London Stock Exchange for the New Ordinary Shares to be admitted to the Ofﬁcial List of the UK Listing Authority and to be admitted to trading on the main market for listed securities of the London Stock Exchange.

11. Use of proceeds of the Rights Issue The proceeds of the Rights Issue will be used to fund part of the consideration for the Acquisition and repayment of part of the existing debt of the PolymerLatex Group, together with the associated transaction and acquisition costs. In the event that the Rights Issue completes but Completion does not take place, the Directors intend to return substantially all of the net proceeds of the Rights Issue to Shareholders within a reasonable period of time. The Company would seek to return these proceeds in as tax efﬁcient a manner as possible for all Shareholders.

12. Dividend policy The New Ordinary Shares will carry the entitlement to all future dividend payments made by the Company, including any final dividend for the 2010 financial year. Due to the enlarged number of shares that will be in issue as a result of the Rights Issue at the time it is paid, the 2010 final dividend per Ordinary Share will be diluted accordingly. Following completion of the Acquisition and Rights Issue, the Board intends to pursue a progressive dividend policy. This will reflect the effect of the anticipated synergies and the longer term growth profile of the Group, while also taking into account the organic growth opportunities in which the Group expects to invest, in particular in emerging markets. All future dividend payments will be subject to the Company having sufficient distributable reserves and profits available for the purpose and will take into account the Group’s cash flows, debt repayments and the need to maintain an appropriate level of dividend cover.

13. Risk factors Shareholders should consider carefully the key risks and uncertainties listed below: * Conditions in the global economy may adversely affect the financial condition of the Yule Catto Group and, following the Acquisition, the Enlarged Group * Volatility and cyclicality of the global chemicals and polymers markets and in customer industries important to the Yule Catto Group and, following the Acquisition, the Enlarged Group may adversely affect the financial condition of the Yule Catto Group and, following the Acquisition, the Enlarged Group * Fluctuations in the prices for raw materials may adversely affect the financial condition of the Yule Catto Group and, following the Acquisition, the Enlarged Group * Volatility in energy prices may adversely affect the financial condition of the Yule Catto Group and, following the Acquisition, the Enlarged Group

9 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS * The failure of raw materials suppliers to perform their obligations under supply agreements, or the inability of the Yule Catto Group or the Enlarged Group to replace or renew these agreements when they expire, could adversely affect the financial condition of the Yule Catto Group and, following the Acquisition, the Enlarged Group * The markets in which the Yule Catto Group operates and, following the Acquisition, the Enlarged Group will operate in are highly competitive, and the Yule Catto Group and the Enlarged Group may lose market share to other producers * Generally, the Yule Catto Group does not and, following the Acquisition, the Enlarged Group will not have long term contracts with customers, and the loss of customers could adversely affect sales and profitability * Concentration of customers in certain markets means the loss of a small number of customers could have a significant adverse effect on the Yule Catto Group and, following the Acquisition, the Enlarged Group * Chemical manufacturing storage and transportation is inherently hazardous and any incidents relating to the hazards which the Yule Catto Group and, following the Acquisition, the Enlarged Group face may adversely effect their financial condition and reputation * The ability of the Yule Catto Group and, following the Acquisition, the Enlarged Group to compete is and will remain highly dependent on its ability to develop technological innovations and to introduce new products * If the Yule Catto Group and, following the Acquisition, the Enlarged Group are unable to protect their intellectual property, trade secrets and know-how the Yule Catto Group and, following the Acquisition, the Enlarged Group may be adversely affected * The Yule Catto Group and, following the Acquisition, the Enlarged Group may be liable for damages based on product liability claims brought against their customers in end-use markets * The Yule Catto Group and, following the Acquisition, the Enlarged Group are exposed to local business and political risks in the different countries in which they operate * Any delay or interruption to planned expansion of operational capacity of the Yule Catto Group and, following the Acquisition, the Enlarged Group may result in the failure to meet customer demand in growing markets * Compliance with extensive environmental, health and safety laws and regulations could require material expenditure, changes in the operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group or site remediation * Changes in the law and regulation in the jurisdictions in which they operate and trade may have an adverse effect on the Yule Catto Group and, following the Acquisition, the Enlarged Group * Loss of key personnel or the inability to attract and retain new qualified personnel may have an adverse effect on the Yule Catto Group and the Enlarged Group * Fluctuations in currency exchange rates may significantly impact the results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group and the comparability of financial results between financial periods * Credit market conditions and credit ratings may restrict the ability of the Yule Catto Group and, following the Acquisition, the Enlarged Group to obtain credit facilities or to refinance its existing debt facilities in the longer term * Interest rate fluctuation and increases in bank lending margins may increase the Yule Catto Group’s and, following the Acquisition, the Enlarged Group’s costs of borrowing in the longer term * The Yule Catto Group and, following the Aquisition, the Enlarged Group have funding risks relating to defined benefit pension schemes and any deterioration of the value of the assets in which the pension schemes have invested as against the financial obligations to make payments to members of the scheme could have an adverse effect on the Yule Catto Group and, following the Acquisition, the Enlarged Group * The products of the Yule Catto Group and, following the Acquisition, the Enlarged Group may infringe the intellectual property rights of others, which may cause the Yule Catto Group and, following the Acquisition, the Enlarged Group to incur unexpected costs or be prevented from selling their products

10 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS * The Acquisition is subject to a number of conditions which, if not satisfied, could result in the Acquisition not completing * Limited warranties have been obtained by the Yule Catto Group in connection with the Acquisition which could result in the Yule Catto Group and, following the Acquisition, the Enlarged Group incurring unexpected liabilities * The PolymerLatex Group may fail to secure renewals of their land interests at their manufacturing sites in Marl, Worms and Filago which may, following the Acquisition, have an adverse effect on the Enlarged Group * Certain customers and suppliers of the PolymerLatex Group may, following the Acquisition, exercise rights of termination in their contracts which may have adverse effect on the Enlarged Group * The Enlarged Group’s success will be dependent upon its ability to successfully integrate the PolymerLatex Group * The covenants contained in the New Credit Agreement include financial and other covenants that could restrict the Group’s and, following the acquisition, the Enlarged Group’s activities or flexibility or ability to undertake strategic or significant transactions * The market price of the Nil Paid Rights, the Fully Paid Rights and/or the Ordinary Shares could be subject to significant fluctuations * The Company may offer additional shares in the future, which may adversely affect the market price of the Ordinary Shares * The Company’s ability to pay dividends in the future is uncertain * If Qualifying Shareholders do not take up the offer of New Ordinary Shares under the Rights Issue their proportionate ownership and voting interests in the Company will be reduced * An active trading market in Nil Paid Rights and the Fully Paid Rights may not develop * The Ordinary Shares and the New Ordinary Shares may not be suitable investments for all the recipients of this document * Disposals of Nil Paid Rights, Fully Paid Rights or Ordinary Shares by major investors may reduce the market price of the Ordinary Shares * The ability of Overseas Shareholders to bring actions or enforce judgments against the Company or the Directors may be limited

11 c103902pu010 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS RISK FACTORS

You should carefully consider the risks and uncertainties described below, in addition to the other information in this document. The risks and uncertainties described below represent all of those known to the Directors as at the date of this document which the Directors consider to be material. However, these risks and uncertainties are not the only ones facing the Yule Catto Group and/or, following the Acquisition, the Enlarged Group; additional risks and uncertainties not presently known to the Directors, or that the Directors currently consider to be immaterial, could also impair the business of the Yule Catto Group and/or, following the Acquisition, the Enlarged Group. If any or a combination of these risks actually occurs, the business, ﬁnancial condition and operating results of the Yule Catto Group and/ or, following the Acquisition, the Enlarged Group could be adversely affected. In such case, the market price of the Ordinary Shares could decline and you may lose all or part of your investment.

RISKS RELATING TO THE YULE CATTO GROUP, POLYMERLATEX GROUP AND THE ENLARGED GROUP Conditions in the global economy may adversely affect the results of operations, financial condition and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group The products of the Yule Catto Group are, and, following the Acquisition, the products of the Enlarged Group will be, sold in markets that are sensitive to changes in general economic conditions, such as construction and carpet products. A downturn in general economic conditions could adversely affect the demand for the products produced by the Yule Catto Group or, as the case may be, the Enlarged Group, resulting in pressure on the prices, volumes and margins achieved or achievable. A decline in demand or a shift to lower-margin products resulting from deteriorating economic conditions could adversely affect sales of products and/or the profitability of the Yule Catto Group and, following the Acquisition, the Enlarged Group and could also result in impairments of certain of their assets. The business and operating results of the Yule Catto Group and the PolymerLatex Group have been affected by the global recession and other challenges that affected and continue to affect the global economy and the customers of the Yule Catto Group and the PolymerLatex Group. There can be no assurance that global economic conditions will continue to improve and there is a risk that some or all of the key markets of the Yule Catto Group and/or, following the Acquisition, the Enlarged Group may experience economic decline or a prolonged period of no or negligible growth in the future. If conditions in the global economy or in the key markets in which the Yule Catto Group or, following the Acquisition, the Enlarged Group operate deteriorate it may have a significant adverse effect on the results of operations, financial condition of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

Volatility and cyclicality of the global chemicals and polymers markets and economic fluctuations in customer industries important to the Yule Catto Group and, following the Acquisition, the Enlarged Group may adversely affect the results of operations, financial condition and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group The business of the Yule Catto Group is, and, following the Acquisition, the Enlarged Group will be, exposed to the volatile and cyclical nature of the chemicals and polymers markets. Depending on the individual market, and to some extent the geographic region, the Yule Catto Group’s and PolymerLatex Group’s businesses alternate between periods of market growth and periods of stagnation or market decline. The transition from market growth to market decline can be very swift. Additionally, the performance of the chemicals and polymers markets is affected by the performance of the industries in which the customers of the Yule Catto Group and the PolymerLatex Group operate. A weak economic climate in the relevant customer industries typically results in lower sales volumes for the chemical and polymer products supplied by the Yule Catto Group and the PolymerLatex Group. Developments in the medical sector, the construction industry and the textiles and paper industries also affect the Yule Catto Group and the PolymerLatex Group. The industries in which the Yule Catto Group’s and the PolymerLatex Group’s customers operate are, in turn, strongly influenced by global economic developments. The volatile and cyclical nature of the global chemicals and polymers markets together with weak or declining growth in customer industries could lead to a reduction in prices and sales volumes and thus affect sales growth and capacity utilisation at the Yule Catto Group and, following the

12 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Acquisition, the Enlarged Group, which could have material adverse effects on their ﬁnancial condition, results of operations and cash ﬂows.

Fluctuations in the prices for raw materials may adversely affect the results of operations, financial condition and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group The Yule Catto Group is, and, following the Acquisition, the Enlarged Group will be, dependent on numerous raw materials from various sources. The costs of raw materials constitute a large proportion of the total production costs for the Yule Catto Group and, following the Acquisition, the Enlarged Group and on average constitutes some 65 per cent. of the cost of sales of the Yule Catto Group. The most important raw materials for the Yule Catto Group and the Enlarged Group are butadiene, styrene, vinyl acetate, acrylonitrile and butyl acrylate and the volatility of the prices of these key materials is driven by the volatility in oil prices and by general supply and demand in the market. In some cases the Yule Catto Group procures and, following the Acquisition, the Enlarged Group will procure, raw materials on the basis of spot contracts rather than long-term supply agreements and consequently the Yule Catto Group is, and, following the Acquisition the Enlarged Group will, to a certain extent be exposed to the volatility of raw material prices. The profitability of the Yule Catto Group is, and, following the Acquisition the profitability of the Enlarged Group will be, dependent on its ability to pass increases in raw material costs to customers. The failure of Yule Catto Group or, following the Acquisition, the Enlarged Group to pass on higher raw material costs to its customers could have an adverse effect on the financial condition, results of operations and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

Volatility in energy prices may adversely affect the results of operations, financial condition and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group. The Yule Catto Group requires and, following the Acquisition, the Enlarged Group will require, large quantities of energy from various sources for use in production facilities with greatest reliance on oil, natural gas and electricity. Energy prices are volatile but the long term trend is for energy prices to continue to rise as demand increases at a faster rate than supply. Energy costs constitute a significant proportion of the total production costs for the Yule Catto Group and, following the Acquisition, the Enlarged Group. During the financial year ended 31 December 2009, energy costs represented approximately 20 per cent. of the total production costs of the Yule Catto Group. The profitability of the Yule Catto Group is, and, following the Acquisition the profitability of the Enlarged Group will be, dependent on its ability to pass increases in energy costs to customers. The failure of Yule Catto Group or, following the Acquisition, the Enlarged Group to pass on higher energy costs to its customers could have an adverse effect on the financial condition, results of operations and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group. In addition, higher energy costs can affect the prices of raw materials, increasing the cost to the Yule Catto Group or, following the Acquisition, the Enlarged Group of raw materials.

The failure of raw materials suppliers to perform their obligations under supply agreements, or the inability of the Yule Catto Group or, following the Acquisition, the Enlarged Group to replace or renew these agreements when they expire, could increase the cost for these materials, interrupt production or otherwise adversely affect the results of operations, financial condition, cash flows and reputation of the Yule Catto Group and, following the Acquisition, the Enlarged Group The Yule Catto Group is, and, following the Acquisition, the Enlarged Group will be, reliant on suppliers of raw materials to a significant extent. The failure of suppliers to comply with their obligations in relation to the quantity and/or quality of raw materials in a timely manner may adversely affect the ability of the Yule Catto Group or, following the Acquisition, the Enlarged Group, to meet commitments to its customers, adversely affecting the business, results of operations and reputation of the Yule Catto Group, or, as the case may be, the Enlarged Group. In the event that one or more suppliers ceases to supply the Yule Catto Group or, following the Acquisition, the Enlarged Group, with raw materials for any reason, there can be no assurance that the Yule Catto Group or, following the Acquisition, the Enlarged Group, can source alternative supplies on a timely basis or at all. Moreover, there can be no assurance that any alternative supplier will be able to supply such materials at an acceptable price. The failure of the Yule Catto Group or, following the Acquisition, the Enlarged Group, to replace key suppliers of raw materials at acceptable

13 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS prices in these circumstances may adversely affect the business, results of operations and/or proﬁtability of the Yule Catto Group or, following the Acquisition, the Enlarged Group and/or may result in a material interruption to the business of the Yule Catto Group or, as the case may be, the Enlarged Group.

The markets in which the Yule Catto Group operates, and, following the Acquisition, the Enlarged Group will operate in, are highly competitive, and the Yule Catto Group and the Enlarged Group may lose market share to other producers or sellers of water based polymers or to producers of other products that can be substituted for the products of the Yule Catto Group and the Enlarged Group The global chemicals and polymers markets in which the Yule Catto Group operates and, following the Acquisition, the Enlarged Group will operate are highly competitive and there is significant competition from large international producers, as well as from smaller regional competitors who may improve their competitive position in the core end-use markets of the Yule Catto Group and the Enlarged Group by successfully introducing new products, improving their manufacturing processes or expanding their capacity or manufacturing facilities. Competition between producers of water based polymers and other products with similar properties can result in significant pressure on prices which may adversely affect sales volumes, revenues and margins achieved by the Yule Catto Group or, following the Acquisition, the Enlarged Group. This in turn may adversely affect the financial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group. In addition, if the Yule Catto Group and, following the Acquisition, the Enlarged Group are unable to keep pace with competitors’ product and manufacturing process innovations and efficiencies, the financial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group could be materially adversely affected.

Generally, the Yule Catto Group does not and, following the Acquisition the Enlarged Group will not have long term contracts with customers, and the loss of customers could adversely affect sales and profitability A large proportion of the business of the Yule Catto Group is and, following the Acquisition, of the Enlarged Group will be, based primarily upon individual sales orders from the customers. As such, the customers of the Yule Catto Group and, following the Acquisition, the Enlarged Group have strong purchasing power and flexibility in their choice of preferred supplier at any given time and could cease to buy products at any time and for any reason. The lack of long-term sales contracts increases the vulnerability of the Yule Catto Group and, following the Acquisition, the Enlarged Group to adverse impacts on its results of operations and cashflows in the event that the competitive position of the Yule Catto Group or, as the case may be, the Enlarged Group, deteriorates for any reason. If multiple customers elect not to purchase products from the Yule Catto Group or, following the Acquisition, the Enlarged Group and the Yule Catto Group or, as the case may be, the Enlarged Group are unable to replicate the sales volumes and revenue generated by such customers, the revenues, profitability, financial condition and results of operations of the Yule Catto Group or, as the case may be, the Enlarged Group could be adversely affected.

Concentration of customers in certain markets means the loss of a small number could have a significant adverse effect on the Yule Catto Group and, following the Acquisition, the Enlarged Group In certain markets in which the Yule Catto Group and, following the Acquisition, the Enlarged Group operate, there is a relatively high concentration of customers where a small number of customers represent a significant percentage of the total market. The loss of a small number of customers in these markets could materially adversely affect the sales and profitability of the Yule Catto Group or, as the case may be, the Enlarged Group in that market. In addition, with respect to certain customer industries, the enhanced purchasing power of customers in highly consolidated markets has led to increased pressure on prices and margins. This could adversely affect the results of operations and financial condition of the Yule Catto Group or, as the case may be, the Enlarged Group

Chemical manufacturing, storage and transportation is inherently hazardous and any incidents relating to the hazards which the Yule Catto Group and, following the Acquisition, the Enlarged Group face may adversely affect their ﬁnancial condition, results of operations and reputation The risks associated with chemical manufacturing and the related storage and transportation of raw materials, products and wastes exist in the operations of the Yule Catto Group and, following the

14 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Acquisition, the Enlarged Group and in the operations of other occupants with whom manufacturing sites are shared. These potential risks include, but are not necessarily limited to, explosions and fires, mechanical failure and chemical spills and other discharges or releases of toxic or hazardous substances or gases. These risks could lead to a material interruption or suspension of operations and have an adverse effect on the productivity and profitability of a particular manufacturing facility or on the Yule Catto Group or, following the Acquisition, the Enlarged Group as a whole. The loss or shutdown of operations over an extended period at any of the major manufacturing facilities of the Yule Catto Group or, following the Acquisition, the Enlarged Group could have a material adverse effect on the financial condition and results of operations of the Yule Catto Group and/or the Enlarged Group (as the case may be). In addition, the occurrence of one of these risks may result in personal injury and loss of life, damage to property and contamination of the environment, which may result in a suspension of operations and the imposition of civil or criminal penalties, including governmental fines, expenses for remediation and claims brought by governmental entities or third parties. The costs of such an event may be substantial and such an event could materially adversely affect the business, results of operations and profitability of the Yule Catto Group or, following the Acquisition, the Enlarged Group. In addition, such an event could be seriously detrimental to the reputation of the Yule Catto Group or, following the Acquisition, the Enlarged Group, and could have a material adverse effect on the ability of the Yule Catto Group or, as the case may be, the Enlarged Group, to obtain or maintain its existing licences and key commercial and governmental relationships.

The ability of the Yule Catto Group and, following the Acquisition, the Enlarged Group to compete is and will remain highly dependent on its ability to develop technological innovations and to introduce new products. Failure to do so could have an adverse effect on the Yule Catto Group and, following the Acquisition, the Enlarged Group The ability of the Yule Catto Group and, following the Acquisition, the Enlarged Group to compete is and will remain highly dependent on its ability to develop technological innovations and to introduce new products to satisfy the demands of its customers. In future, alternative materials and technologies could be developed, or existing materials and technologies improved, which could be used in place of the products and technologies supplied by the Yule Catto Group and, following the Acquisition, the Enlarged Group. If new types of materials or technologies with favourable characteristics are developed or existing materials or technologies improved by other producers, or if technological developments or improvements in processes result in competitors being able to offer products at lower prices than the products offered by the Yule Catto Group or, as the case may be, the Enlarged Group, there is a risk that customers could replace products offered by the Yule Catto Group and, following the Acquisition, the Enlarged Group with materials or technologies offered by competitors. If, in this case, the Yule Catto Group and, following the Acquisition, the Enlarged Group are not in a position to compete on the basis of quality and/or price, this could lead to substantial declines in sales, which could adversely affect the financial condition and results of operations of the Yule Catto Group and the Enlarged Group. In addition, customers of the Yule Catto Group and, following the Acquisition, the Enlarged Group may introduce new generations of their own products or require new technological and increased performance specifications that would require the Yule Catto Group or, as the case may be, the Enlarged Group to develop customised products. Innovation or other changes in the Yule Catto Group and, following the Acquisition, the Enlarged Group’s customers’ product performance requirements may also adversely affect the demand for the products of the Yule Catto Group or, as the case may be, the Enlarged Group. The future growth of the Yule Catto Group and, following the Acquisition, the Enlarged Group will depend on its ability to gauge the direction of the commercial and technological progress in all key end-use markets, and upon its ability to successfully develop, manufacture and market products in such changing end-use markets. The Yule Catto Group and, following the Acquisition, the Enlarged Group need to continue to identify, develop and market innovative products on a timely basis to replace existing products in order to maintain the profit margins and competitive position of the Yule Catto Group or, as the case may be, the Enlarged Group. If the Yule Catto Group and the Enlarged Group fail to keep pace with evolving technological innovations or fail to modify products in response to customers’ needs, then the business, financial condition and results of operations of the Yule Catto Group and,

15 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS following the Acquisition, the Enlarged Group could be adversely affected as a result of the associated reduction in sales and proﬁtability.

If the Yule Catto Group and, following the Acquisition, the Enlarged Group are unable to protect their intellectual property, trade secrets and know-how the results of operations, financial condition and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group may be adversely affected The success of the Yule Catto Group and, following the Acquisition, the Enlarged Group relies to a significant degree on its ability to protect and preserve intellectual property and other proprietary information and know-how including processes, apparatuses, technology, trade secrets, trade names and proprietary manufacturing expertise, methods and compounds and the failure to protect such rights could harm the competitive position of the Yule Catto Group and, following the Acquisition, the Enlarged Group with respect to the manufacturing of some of their products The Yule Catto Group depends and, following the Acquisition, the Enlarged Group will depend, on non-patentable business secrets and confidential know-how, particularly in relation to technically sophisticated products. However, the Yule Catto Group and, following the Acquisition, the Enlarged Group may be unable to prevent third parties from using intellectual property and other proprietary information of the Yule Catto Group or, following the Acquisition, the Enlarged Group without authorisation or independently developing intellectual property and other proprietary information that is similar to the intellectual property of the Yule Catto Group or, following the Acquisition, the Enlarged Group, particularly in those countries where the laws do not afford comprehensive protection of proprietary rights. Additionally, there is no guarantee that the Yule Catto Group and/ or, following the Acquisition, the Enlarged Group can prevent the disclosure of business secrets. The use of the intellectual property and other proprietary information and know-how of the Yule Catto Group and, following the Acquisition, the Enlarged Group by an unauthorised third party could reduce or eliminate any competitive advantage that has been developed, cause the Yule Catto Group or, as the case may be, the Enlarged Group to lose sales or otherwise adversely affect the business, results of operations or financial condition of the Yule Catto Group or, as the case may be, the Enlarged Group. If it becomes necessary for the Yule Catto Group or the Enlarged Group to litigate to protect these rights, any proceedings could be burdensome and costly, and the Yule Catto Group or, as the case may be, the Enlarged Group may not be successful.

The Yule Catto Group and, following the Acquisition, the Enlarged Group may be liable for damages based on product liability claims brought against their customers in end-use markets which may have an adverse effect on the ﬁnancial condition of the Yule Catto Group and, following the Acquisition, the Enlarged Group Many of the products of the Yule Catto Group and, following the Acquisition, the Enlarged Group provide critical performance attributes to customers’ products that are sold to consumers. The sale of these products involves the risk of product liability claims. If a person were to bring a product liability claim in respect of a product which contains products produced by the Yule Catto Group or, following the Acquisition, the Enlarged Group, it is possible that the Yule Catto Group or, as the case may be, the Enlarged Group may be named as a defendant in that claim or may be subject to separate litigation brought by its customer. A successful product liability claim or series of claims against the Yule Catto Group and/or the Enlarged Group could have a material adverse effect on the ﬁnancial condition or results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

The Yule Catto Group and, following the Acquisition, the Enlarged Group are exposed to local business and political risks in the different countries in which they operate which may adversely affect their ﬁnancial condition and results of operations The Yule Catto Group and the PolymerLatex Group have signiﬁcant operations, including manufacturing facilities, research and development facilities, sales personnel and customer support operations in jurisdictions including Germany, Malaysia, South Africa, China, Spain, Mexico, Dubai, Finland, Italy and the UK. The international nature of these operations exposes the Yule Catto Group and, following the Acquisition, will expose the Enlarged Group to certain material risks inherent in doing business in certain jurisdictions, principally comprising the following:

* domestic and foreign customs and tariffs or other trade barriers;

* increased costs of transportation or shipping;

* credit risk and ﬁnancial conditions of local customers and distributors;

16 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS * potentially adverse tax consequences, including imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries; * foreign currency exchange restrictions and fluctuations; and * local political and social conditions, including the possibility of hyperinflationary conditions and political instability in certain countries. The Yule Catto Group and, following the Acquisition, the Enlarged Group may not be successful in developing and implementing policies and strategies to address the foregoing factors in a timely and effective manner at each location where the Yule Catto Group and the Enlarged Group operate or do business. Consequently, the occurrence of one or more of the foregoing factors could have a material adverse effect on the international operations or upon the financial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

Any delay or interruption to planned expansion of operational capacity of the Yule Catto Group and, following the Acquisition, the Enlarged Group may result in the failure to meet customer demand in growing markets, which may in turn, affect the results of operations, financial condition and cash flows of the Yule Catto Group and, following the Acquisition, the Enlarged Group The success of the Yule Catto Group and following the Acquisition, the Enlarged Group relies to a degree on its ability to pursue a strategy of expanding its operational manufacturing capacity in the markets in which it believes have greatest growth potential. As part of its current expansion programme the Yule Catto Group is expanding its nitrile latex and dispersions production capacity in Asia to meet anticipated growth in customer demand. Any delay or interruption to the construction programme for this additional capacity would in turn have an effect on this additional capacity coming online in order to meet customer requirements. This could result in customers seeking to source products from competitors of the Yule Catto Group and, following the Acquisition, the Enlarged Group which in turn may have an adverse effect on the financial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

Compliance with extensive environmental, health and safety laws and regulations could require material expenditure, changes in the operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group or site remediation which may in turn have a material adverse effect on the financial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group The Yule Catto Group and the PolymerLatex Group use large quantities of hazardous substances and generate hazardous wastes in their manufacturing operations. Consequently, the operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group are and will continue to be subject to extensive environmental, health and safety laws and regulations at both the national and local level in multiple jurisdictions. Many of these laws and regulations have become more stringent over time and the costs of compliance with these requirements may increase, including costs associated with any necessary capital investments. In addition, the production facilities of the Yule Catto Group and the PolymerLatex Group require operating permits that are subject to renewal and, in some circumstances, revocation. The necessary permits may not be issued or continue in effect, and any issued permits may contain significant and costly new requirements. Compliance with environmental and health and safety laws generally increases the costs of transportation and storage of raw materials and finished products, as well as the costs of storage and disposal of wastes. Additionally the Yule Catto Group and the PolymerLatex Group operate (and have previously operated) on production sites, some of which have been used for industrial and manufacturing purposes for decades and on which significant contamination has occurred in the past, especially with regard to soil and groundwater. An example of this is PolymerLalex’s Bromsgrove site, where manufacturing has ceased but where remediation work to deal with historical contamination is expected to be required. Costs associated with existing and potential obligations to secure or remediate contaminated sites in accordance with environmental protection regulations could have a material adverse effect on the financial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group. Some environmental laws could impose on the Yule Catto Group and, following the Acquisition, the Enlarged Group the entire cost of clean-up of contamination present at a facility even though neither the Yule Catto Group nor the PolymerLatex Group caused the contamination. These laws often identify the site owner as one of the parties that can be jointly and severally liable for on-site remediation, regardless of fault or whether the original activity was legal at the time it occurred.

17 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The factors mentioned above could, either individually or in the aggregate, have an adverse effect on the ﬁnancial condition and results of operations of the Yule Catto Group and the Enlarged Group and could, in addition, harm their reputation and customer relations.

Changes in the law and regulation in the jurisdictions in which they operate and trade may have an adverse effect on the Yule Catto Group and, following the Acquisition, the Enlarged Group The regulatory environment for the business activities of the Yule Catto Group and, following the Acquisition, the Enlarged Group is continuously changing at the international, supra-national and national levels, in light of technological progress, the public’s increased safety needs and awareness with respect to quality and the environment and the increasingly demanding requirements of customers regarding product quality and speciﬁcation. The tightening of the rules, regulations, controls and laws with which the Yule Catto Group and, following the Acquisition, the Enlarged Group must comply could subject them to even more rigorous controls than at present with regard to its handling of substances or hazardous materials, as well as the production, use, recycling or disposal thereof. Such tightening could require signiﬁcant capital expenditure and therefore have adverse effects on the production costs and the product portfolio of the Yule Catto Group and the Enlarged Group or expose them to considerable liability risks.

Further changes to the rules, regulations, controls and laws with which the Yule Catto Group and, following the Acquisition, the Enlarged Group must comply may result in signiﬁcantly increased costs of compliance which in turn may have an adverse effect on the ﬁnancial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

Loss of key personnel or the inability to attract and retain new qualified personnel may have an adverse effect on the Yule Catto Group and the Enlarged Group The success of the Yule Catto Group and, following the Acquisition, the Enlarged Group in the highly competitive markets in which they operate will continue to depend to a significant extent on certain key, highly skilled employees of the Yule Catto Group and, following the Acquisition, the Enlarged Group. The Yule Catto Group is and, following the Acquisition, the Enlarged Group will be, dependent on the expertise of their executive directors, heads of divisions, regional managers and research and development directors. Loss of the services of any of such key, highly skilled employees could have an adverse effect on the prospects of the Yule Catto Group or, following the Acquisition, the Enlarged Group. The Yule Catto Group and, following the Acquisition, the Enlarged Group may not be able to retain key employees or to recruit qualified individuals. The loss of key employees could result in high transition costs and could disrupt the operations of the Yule Catto Group and the Enlarged Group, which could in turn have an adverse effect on the financial condition and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

Fluctuations in currency exchange rates may significantly impact the results of operations of the Yule Catto Group and the Enlarged Group and may significantly affect the comparability of financial results between financial periods The operations of the Yule Catto Group are and, following the Acquisition, the operations of the Enlarged Group will be conducted by subsidiaries in many countries. The results of the operations and the financial position of these subsidiaries are currently in the case of the Yule Catto Group and will be, following the Acquisition, in the case of the Enlarged Group, reported in the relevant foreign currencies and then translated into pounds sterling at the applicable exchange rates for inclusion in the Enlarged Group’s consolidated financial statements.

The Yule Catto Group and, following the Acquisition, the Enlarged Group will incur currency transaction risk when entering into either a purchase or sale transaction using a currency other than the local currency of the transacting entity. The Yule Catto Group does and, following the Acquisition, the Enlarged Group will enter into hedging transactions using derivative financial instruments to seek to minimize exposure to certain foreign currency fluctuations but given the volatility of international exchange rates, there can be no assurance that the Yule Catto Group and, following the Acquisition, the Enlarged Group will be able to effectively manage currency transaction risks or that any volatility in currency exchange rates will not have a material adverse effect on the financial condition or results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group. In addition, currency fluctuations may affect the comparability of the results of operations of the Yule Catto Group and the Enlarged Group between financial periods.

18 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Credit market conditions and credit ratings may restrict the ability of the Yule Catto Group and, following the acquisition, the ability of the Enlarged Group to obtain credit facilities or to refinance its existing debt facilities in the longer term Conditions in the credit markets, although improving, remain challenging and financial institutions continue to apply very stringent lending criteria to the approval of any commercial lending transactions. If current market conditions continue, it will be more costly and more difficult for Yule Catto or, following the Acquisition, the Enlarged Group to refinance its debt facilities as they fall due in the longer-term (although none of these debt facilities are due to be refinanced in the twelve months following the date of this document). Although Yule Catto has no current intention to raise new funds, it may become more costly to raise new funds to take advantage of opportunities. If Yule Catto or, following the Acquisition, the Enlarged Group is unable to refinance its debt facilities or access new debt facilities this may, in the longer-term, have a material adverse effect on the Yule Catto Group’s and, following the Acquisition, the Enlarged Group’s business, financial condition and results of operations.

Interest rate fluctuation and increases in bank lending margins may increase the Yule Catto Group’s and, following the Acquisition, the Enlarged Group’s costs of borrowing in the longer term The Yule Catto Group’s and, following the Acquisition, the Enlarged Group’s interest costs in respect of its borrowings will, in the longer term, increase in the event of rising interest rates. Rising interest rates may also have a more general effect on confidence, resulting in lower demand in the industries in which the Yule Catto Group and the PolymerLatex Group are active and this could have a material adverse effect on the Yule Catto Group’s and, following the Acquisition, the Enlarged Group’s business, results of operations and overall financial condition.

The Yule Catto Group and the PolymerLatex Group have funding risks relating to defined benefit pension schemes and any deterioration of the value of the assets in which the pension scheme have invested as against the financial obligations to make payments to members of the schemes could have an adverse effect on the Yule Catto Group and, following the Acquisition, the Enlarged Group The Yule Catto Group has funding risks relating to its UK defined benefit pension scheme (which has been closed to new members and which is not now accruing any further liabilities). The pension fund liabilities are partially matched with a portfolio of assets but the nature of the defined benefit scheme means it is subject to risks related to actuarial projections of mortality and inflation (each of which may impact the value of the scheme’s liabilities for accounting purposes) and returns on assets (which impacts the aggregate amount of assets available to set off against the liabilities of the scheme). The scheme contains a high proportion of equity assets, which exposes the scheme to volatility in equity markets and which may therefore result in significant fluctuations in the size of the deficit. As at the end of 2009, the deficit in relation to the Yule Catto Group’s defined benefit pension scheme stood at approximately £70 million, calculated in accordance with IAS 19. However, in the current economic climate, with volatile bond and equity markets, there is an increased risk that this deficit position may deteriorate and should the defined benefit section of the Yule Catto Group’s pension scheme be wound up, this deficit would be a much higher amount, equal to the additional funding necessary to secure all liabilities of the scheme with an insurance company. The Yule Catto Group came to an agreement with the trustees of the scheme in 2010 to make annual payments of £10 million in 2010, rising gradually to £14 million in 2019, into the scheme to remediate the deficit. If the deficit in the scheme were to increase, following the next review in 2012, for any reason, or if the trustees decided to change investment strategy or otherwise to seek additional contributions following such review, there is a risk that the business, results of operations, financial position and cash flows of the Yule Catto Group or, following the Acquisition, the Enlarged Group, may be materially adversely affected. In addition, actions by the pension regulators or the trustees of the Yule Catto Group’s defined benefit pension scheme and/or any material revisions to the existing pension legislation could result in significant additional cost and could therefore have a material adverse effect on the Yule Catto Group’s, and, following the Acquisition, the Enlarged Group’s business, results of operations and overall financial condition. In addition, pursuant to the terms of the Acquisition, Yule Catto has agreed to continue to fund PolymerLatex’s unfunded pension liability under its defined benefit pension schemes which, as at 31 December 2009, was estimated at c31 million (£26 million). If the assets of these schemes deteriorate in value in comparison to the liabilities and funding obligations of the schemes this could have a

19 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS material adverse effect on the PolymerLatex Group and, following the Acquisition, the Enlarged Group.

The products of the Yule Catto Group and, following the Acquisition, the Enlarged Group may infringe the intellectual property rights of others, which may cause the Yule Catto Group and, following the Acquisition, the Enlarged Group to incur unexpected costs or be prevented from selling their products Many of the competitors of the Yule Catto Group and, following the Acquisition, the Enlarged Group own a substantial amount of intellectual property, proprietary information and know-how that the Yule Catto Group and the Enlarged Group must continually monitor to avoid infringing. There can be no guarantee that the products and processes of the Yule Catto Group and, following the Acquisition the Enlarged Group do not and will not infringe intellectual property rights belonging to others.

The Yule Catto Group and, following the Acquisition, the Enlarged Group may also be subject to legal proceedings and claims in the ordinary course of the business, including claims of alleged infringement of the patents, trademarks and other intellectual property rights of third parties by the Yule Catto Group or, following the Acquisition, the Enlarged Group or licensees in connection with their use of the products of the Yule Catto Group or, following the Acquisition, the Enlarged Group. Intellectual property litigation is expensive and time-consuming, regardless of the merits of any claim, and could divert management’s attention from operating the business of the Yule Catto Group or, following the Acquisition, the Enlarged Group. If the Yule Catto Group or, following the Acquisition, the Enlarged Group were to discover that their processes, technologies or products infringe the valid intellectual property rights of others, the Yule Catto Group or, as the case may be, the Enlarged Group might need to obtain licenses from these parties or substantially re-engineer products in order to avoid infringement. The Yule Catto Group or, as the case may be, the Enlarged Group may not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to re-engineer products successfully. Moreover, if the Yule Catto Group or, following the Acquisition, the Enlarged Group are sued for infringement and lose, they could be required to pay substantial damages and/or be prevented from using or selling the infringing products or technology. Any of the foregoing could cause the Yule Catto Group or, following the Acquisition, the Enlarged Group to incur signiﬁcant costs and prevent them from selling their products and this could have an adverse effect on the ﬁnancial conditions and results of operations of the Yule Catto Group and, following the Acquisition, the Enlarged Group.

RISK FACTORS RELATING TO THE ACQUISITION

The Acquisition is subject to a number of conditions which, if not satisﬁed, could result in the Acquisition not completing The implementation of the Acquisition is subject to the satisfaction (or waiver, where applicable) of a number of conditions, including the approval of Yule Catto’s shareholders at the General Meeting and certain regulatory ﬁlings being made with relevant national competition authorities.

There is no guarantee that these (or other) conditions will be satisﬁed (or waived, if applicable), in which case the Acquisition will not be completed. The conditions are more fully described in Part II of this document. If the Rights Issue becomes unconditional but the Acquisition does not, the Company will raise proceeds in the Rights Issue that will not subsequently be used to pay the purchase price for the Acquisition.

Limited warranties have been obtained by the Yule Catto Group in connection with the Acquisition which could result in the Yule Catto Group and, following the Acquisition, the Enlarged Group incurring unexpected liabilities As is often the case on acquisitions from private equity sellers in an auction sale process, Yule Catto has received very limited representations, warranties or other indemnities of any kind in connection with the Acquisition. Yule Catto will therefore acquire the entire issued share capital of PolymerLatex pursuant to the Acquisition, together with any potential risks and liabilities adequate protection in respect of which has not been obtained in the Acquisition Agreement. If any issues arise after Completion in respect of those areas, Yule Catto and the Enlarged Group could be left with unexpected additional liabilities or obligations, and with no ability to reclaim any of the consideration it has paid.

20 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Any failure by the PolymerLatex Group or, following the Acquisition, the Enlarged Group to obtain renewals of their land interests in certain manufacturing sites may adversely affect the business, results of operations and/or profitability of the PolymerLatex Group or, following the Acquisition, the Enlarged Group and/or may result in a material interruption to the business of the PolymerLatex Group or, as the case may be, the Enlarged Group. The PolymerLatex Group holds title to two hereditary building rights relating to their manufacturing sites in Marl and Worms, Germany, and a leasehold interest in its production site in Filago, Italy. The hereditary building rights relating to Marl and Worms expire on 31 December 2026 and 30 December 2028 respectively. The leasehold interest in Filago expires on 31 December 2026. The renewal of the interests in these manufacturing sites requires mutual agreement with the land owners who have granted such rights and any failure by the PolymerLatex Group or, following the acquisition, the Enlarged Group to obtain such renewals would require them to find alternative sites for the manufacture of the products currently produced at these sites which may in turn adversely affect the business, results of operations and/or profitability of the PolymerLatex Group or, following the Acquisition, the Enlarged Group and/or may result in a material interruption to the business of the PolymerLatex Group or, as the case may be, the Enlarged Group.

If, following the Acquisition, any customer or supplier of the PolymerLatex Group exercises any right to terminate their contract with the PolymerLatex Group this may adversely affect the business, results of operations and/or proﬁtability of the Enlarged Group. The PolymerLatex Group is currently party to certain customer and supplier contracts which contain provisions for termination of those contracts on a change in the ownership of PolymerLatex or any member of the PolymerLatex Group. If, following completion of the Acquisition, any counterparty to these contracts exercises their right to terminate such contracts this may adversely affect the business, results of operations and/or proﬁtability of the Enlarged Group.

The Enlarged Group’s success will be dependent upon its ability to successfully integrate the PolymerLatex Group and any failure to do this may have an adverse effect on the Enlarged Group The Enlarged Group may encounter numerous integration challenges in connection with the Acquisition, including challenges which are not currently foreseeable. In addition, the Enlarged Group’s management and resources may be diverted away from its core business activities due to personnel being required to assist in the integration process. This integration process may take longer than expected, or difficulties relating to the integration, of which the Board is not yet aware, may arise. This could adversely affect the implementation of the Enlarged Group’s plans, and the Enlarged Group may not be successful in addressing risks or problems encountered in connection with the integration and failure to do so may adversely affect its business or financial condition. In addition, there is a risk that synergy benefits may fail to materialise, or they may be materially lower than have been estimated which may have a material adverse affect on the financial condition of the Enlarged Group and/or the costs of achieving the targeted synergies may be higher than anticipated.

RISK FACTORS RELATING TO THE TERMS OF THE NEW CREDIT FACILITIES The covenants contained in the New Credit Agreement include financial and other covenants including restrictions on the ability of the Group and, following the Acquisition, the Enlarged Group to incur additional financial indebtedness, grant security, make acquisitions or disposals, enter into mergers and repurchase shares as well as covenants related to the Acquisition. These could restrict the Group’s and, following the Acquisition, the Enlarged Group’s activities or flexibility or ability to undertake strategic or significant transactions.

RISKS RELATING TO THE RIGHTS ISSUE AND THE NEW ORDINARY SHARES The market price of the Nil Paid Rights, the Fully Paid Rights and/or the Ordinary Shares could be subject to significant fluctuations The market price of the Nil Paid Rights, the Fully Paid Rights and/or the Ordinary Shares could be subject to significant fluctuations due to a variety of factors, including variations in the Group’s or the PolymerLatex Group’s operating or financial results, business developments relating to the Group, the PolymerLatex Group or other companies in the industries and markets in which the Group and/ or the PolymerLatex Group operate, the operating and share price performance of other companies in the industries and markets in which the Group and/or the PolymerLatex Group operates, regulatory changes affecting the Company’s operations, changes in macro-economic and/or general market conditions, the general performance of the London Stock Exchange, changes in sentiment in the

21 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS market regarding the Acquisition, the Rights Issue or the Ordinary Shares (or similar securities) or speculation about the Company’s business in the press, media or the investment community. Stock markets have, from time to time, experienced signiﬁcant price and volume ﬂuctuations that have affected the market prices for securities and which may be unrelated to the Group’s operating performance or prospects. Furthermore, the Group’s operating results and prospects from time to time may be below the expectations of market analysts and investors. Any of these events could result in a decline in the market price of the Nil Paid Rights, the Fully Paid Rights and/or the Ordinary Shares and investors may, therefore, not recover all or any part of their original investment.

The Company may offer additional shares in the future, which may adversely affect the market price of the Ordinary Shares The Company may offer additional shares in the future, which may adversely affect the market price of the Ordinary Shares. The Company has no current plans for a subsequent offering of its shares or of rights or invitations to subscribe for shares. However, it is possible that the Company may decide to offer additional shares in the future. An additional offering of shares by the Company or the public perception that an offering may occur, could have an adverse effect on the market price of the Company’s Ordinary Shares.

The Company’s ability to pay dividends in the future is uncertain The Company’s ability to pay dividends in the future is uncertain. Future dividends to be received by the Shareholders will depend on the progress of the businesses and the Company’s continuing ability to be proﬁtable. Under the Companies Act 2006, the Company can only pay dividends to the extent that it has distributable reserves and cash available for this purpose. The dividend policy of the Company is described in paragraph 9 of Part I of this document.

If Qualifying Shareholders do not take up the offer of New Ordinary Shares under the Rights Issue their proportionate ownership and voting interests in the Company will be reduced If Qualifying Shareholders do not take up the offer of New Ordinary Shares under the Rights Issue by 11.00 a.m. on 17 January 2011, the latest date for acceptance and payment in full in respect of their entitlements, their proportionate ownership and voting interests in the Company will be signiﬁcantly reduced. If a Qualifying Shareholder elects to sell his or her unexercised Nil Paid Rights or does not participate in the Rights Issue, the consideration such Shareholder receives from the disposal of its Nil Paid Rights or the placing or taking up of New Ordinary Shares represented by such shareholder’s Nil Paid Rights may not be sufﬁcient to compensate such shareholder fully for the dilution of his or her percentage ownership of the Company’s share capital which results due to the Rights Issue.

An active trading market in Nil Paid Rights and the Fully Paid Rights may not develop An active trading market in the Nil Paid Rights or the Fully Paid Rights may not develop on the London Stock Exchange during the trading period. Accordingly, the market for Nil Paid Rights may be highly illiquid. In addition, because the trading price of the Nil Paid Rights and the Fully Paid Rights depends on the trading price of the Ordinary Shares, the Nil Paid Rights and the Fully Paid Rights prices may be volatile and subject to the same risks as noted elsewhere herein.

The Ordinary Shares and the New Ordinary Shares may not be suitable investments for all the recipients of this document The Ordinary Shares and the New Ordinary Shares may not be a suitable investment for all the recipients of this document. Before making a final decision, investors are advised to consult an appropriate independent investment adviser authorised under FSMA if they are in the UK or, if they are not in the UK, another appropriately authorised financial advisor who specialises in advising on acquisitions of shares and other securities. The value of the Ordinary Shares and/or the New Ordinary Shares and the income received from them can go down as well as up and investors may not recover all or any part of their original investment. In the event of a winding-up of the Group, the Ordinary Shares and the New Ordinary Shares will rank behind any liabilities of the Group and, therefore, any return for Shareholders will depend on the Group’s assets being sufficient to meet the prior entitlements of creditors.

22 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Disposals of Nil Paid Rights, Fully Paid Rights or Ordinary Shares by major investors may reduce the market price of the Ordinary Shares Sales of a substantial number of Ordinary Shares in the market after the Rights Issue, whether from investors who acquired New Ordinary Shares in the Rights Issue or from pre-existing Shareholders, or the perception that these sales might occur, could adversely depress the market price of the Ordinary Shares. Additionally, if Qualifying Shareholders do not take up a material amount of their Nil Paid Rights and instead sell them in the market, nil paid, the share price might be negatively affected and the Nil Paid Rights might become worthless. Signiﬁcant sales of Fully Paid Rights may also negatively affect the price of the Fully Paid Rights or New Ordinary Shares. As at the date of this document, KLK holds 18.82 per cent. of the Company’s shares. Save for the restrictions contained in the irrevocable undertaking described in paragraph 11.4.1 of Part XI, KLK is not subject to any restrictions on the sale or other disposition of Ordinary Shares in connection with the Rights Issue or otherwise. Sales of a substantial number of Nil Paid Rights, Fully Paid Rights or Ordinary Shares, or the perception that these sales might occur, could depress the market price of the Nil Paid Rights, Fully Paid Rights and/or Ordinary Shares.

The ability of Overseas Shareholders to bring actions or enforce judgments against the Company or the Directors may be limited The ability of an Overseas Shareholder to bring an action against the Company may be limited under law. The Company is a public limited company incorporated in England and Wales. The rights of holders of Ordinary Shares are governed by English law and by the Company’s Articles. These rights may differ from the rights of shareholders in non-UK corporations. An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers. All the Directors are residents of the UK other than Dato’ Lee Hau Hian, who is resident in Malaysia. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and executive officers within the Overseas Shareholder’s country of residence or to enforce against the Directors and executive officers judgments of courts of the Overseas Shareholder’s country of residence based on civil liabilities under that country’s securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors or executive officers who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or executive officers in any original action based solely on foreign securities laws brought against the Company or the Directors in a court of competent jurisdiction in England or other countries.

23 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the times and dates in the table below is indicative only and may be subject to change.

Event Time/date Announcement of the Rights Issue 13 December 2010 Date of this document 13 December 2010 Record Date close of business on 22 December 2010 Latest time and date for receipt of Forms of Proxy 11.00 a.m. on 24 December 2010 General Meeting 11.00 a.m. on 30 December 2010 Despatch of Provisional Allotment Letters (to Qualifying Non- 30 December 2010 CREST Shareholders only) Notice published in London Gazette 31 December 2010 Dealings commence in New Ordinary Shares, nil paid, on the 8.00 a.m. on 31 December 2010 London Stock Exchange and Existing Ordinary Shares marked ‘‘ex’’ rights Nil Paid Rights credited to stock accounts in CREST as soon as practicable after 8.00 a.m. (Qualifying CREST Shareholders only) on 31 December 2010 Nil Paid and Fully Paid Rights enabled in CREST as soon as practicable after 8.00 a.m. on 31 December 2010 Recommended latest time and date for requesting withdrawal of 4.30 p.m. on 11 January 2011 Nil Paid or Fully Paid Rights from CREST (i.e., if your Nil Paid Rights are in CREST and you wish to convert them into certificated form) Recommended latest time and date for depositing renounced 3.00 p.m. on 12 January 2011 Provisional Allotment Letters, nil paid or fully paid, into CREST or for dematerialising Nil Paid or Fully Paid Rights into a CREST stock account Latest time and date for splitting Provisional Allotment Letters, 3.00 p.m. on 13 January 2011 nil paid and fully paid Latest time and date for acceptance and payment in full and 11.00 am. on 17 January 2011 registration of renounced Provisional Allotment Letters Commencement of dealings in New Ordinary Shares, fully paid, on 8.00 a.m. on 18 January 2011 the London Stock Exchange New Ordinary Shares in uncertificated form credited to stock 18 January 2011 accounts in CREST Despatch of definitive share certificates for New Ordinary Shares by 25 January 2011 in certificated form Expected date of Completion of the Acquisition within four months from the date of this document

General notes: 1. The ability to participate in the Rights Issue is subject to certain restrictions relating to Shareholders with registered addresses outside the UK, details of which are set out in Part IV of this document. 2. Each of the times and dates set out in the above timetable and mentioned in this document and the Provisional Allotment Letter is subject to change by the Company, in which event details of the new times and dates will be notiﬁed to the UK Listing Authority, the London Exchange and, where appropriate, Qualifying Shareholders. 3. References to times in this document are to London (GMT) time. 4. Different deadlines and procedures for applications may apply in certain cases. For example, if you hold you Existing Ordinary Shares through a CREST member or other nominee, that person may set an earlier date for application and payment then the dates noted above. 5. If you have any queries on the procedure for acceptance and payment, you should refer to Part III of this document which answers some of the questions most often asked by shareholders about rights issues or alternatively you should contact the Registrar on 0870 707 1421 (UK only) or +44 870 707 1421 (if calling outside the UK). This service is available from 8.30 a.m. to 5.30 p.m. Monday to Friday (except bank holidays). For legal reasons, the Registrar will not be able to provide advice on the merits of the Rights Issue or Acquisition or to provide legal, business, ﬁnancial, tax or investment advice. Calls from within the UK are charged at 8 pence per minute (including VAT) from a BT landline. Other service providers’ costs may vary.

24 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS RIGHTS ISSUE STATISTICS

Issue Price per New Ordinary Share 116 pence Basis of Rights Issue 4 New Ordinary Shares for every 3 Existing Ordinary Shares Number of Ordinary Shares in issue at the date of this document 145,663,187 Number of New Ordinary Shares to be provisionally allotted Up to 194,217,582 pursuant to the Rights Issue Number of Ordinary Shares in issue immediately following Up to 339,880,769 completion of the Rights Issue New Ordinary Shares as a percentage of the enlarged issued Up to 57.1 per cent. share capital of the Group following the Rights Issue Estimated gross proceeds of the Rights Issue approx. £225 million Estimated proceeds of the Rights Issue to be retained by the approx. £211 million Group (net of commissions and transaction costs) Estimated expenses of the Rights Issue and the Acquisition approx. £14 million

General notes: The above assumes the passing of the Resolutions set out in the General Meeting Notice. No Ordinary Shares will be issued as a result of the exercise of any options or awards under the Yule Catto Share Schemes between the date of this document and completion of the Rights Issue Fractional entitlements to shares will not be issued and will be rounded down.

25 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS DIRECTORS, COMPANY SECRETARY AND ADVISERS

Directors: Peter Scott Wood Chairman Adrian Michael Whitfield Chief Executive David Charles Blackwood Finance Director Jeremy Kim Maiden Senior Independent Non-executive Director The Hon. Alexander Gordon Catto Non-executive Director Dr Alexander Archibald Dobbie Independent Non-executive Director Dato’ Lee Hau Hian Non-executive Director Company secretary: Richard Atkinson Registered office: Temple Fields Harlow Essex CM20 2BH Sole financial adviser, HSBC Bank plc sole sponsor, joint 8 Canada Square global coordinator and London joint bookrunner: E14 5HQ Joint global Barclays Bank PLC coordinator and joint 5 The North Colonnade bookrunner: Canary Wharf London E14 4BB Joint bookrunner and RBS Hoare Govett Limited joint corporate broker: 250 Bishopsgate London EC2M 4AA Joint bookrunner and Collins Stewart Europe Limited joint corporate broker: 88 Wood Street London EC2V 7QR Co-lead manager: Commerzbank AG 30 Gresham Street London EC2V 7PG Auditors and reporting Deloitte LLP accountants: City House 126-130 Hills Road Cambridge CB2 1RY Legal advisers to the Pinsent Masons LLP Company: 1 Park Row Leeds LS1 5AB Legal advisers to the Herbert Smith LLP sole financial adviser, Exchange House sole sponsor, joint Primrose Street global coordinators, London joint bookrunners and EC2A 2HS underwriters:

26 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Registrars Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ Receiving Agents: Computershare Investor Services PLC Corporate Actions Projects Bristol BS99 6AH

27 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS IMPORTANT INFORMATION

Presentation of financial information The Group publishes its financial statements in pounds sterling (‘‘£’’ or ‘‘sterling’’). The abbreviations ‘‘£m’’ or ‘‘£ million’’ represents millions of pounds sterling, and references to ‘‘pence’’ and ‘‘p’’ represent pence in the UK. The financial information presented in a number of tables in this document has been rounded to the nearest whole number or the nearest decimal place. Therefore, the sum of the numbers in a column may not equate exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

International Financial Reporting Standards As required by the Act and Article 4 of the European Union IAS Regulation, the consolidated financial statements of the Group are prepared in accordance with IFRS issued by the IASB and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB as adopted by the European Union. The historical financial statements in this document have been prepared in accordance with IFRS as adopted by the European Commission for use in the European Union, including IAS and interpretations, adopted by the IASB. The significant IFRS accounting policies applied in the historical financial statements of the Yule Catto Group and the PolymerLatex Group are applied consistently in the financial information in this Prospectus. In making an investment decision, prospective investors must rely on their own examination of the information regarding the Company, the Yule Catto Group and the PolymerLatex Group, the terms of the Rights Issue and the financial and other information in this Prospectus.

Sources of information The audited financial information relating to the Yule Catto Group as at and for the years ended 31 December 2009, 2008 and 2007 is incorporated by reference into this document pursuant to Part XII of this document and has been extracted without material adjustment from the consolidated financial statements of the Yule Catto Group contained in its 2009, 2008 and 2007 Annual Report and Accounts. The audits of the financial information contained in the Company’s 2009, 2008 and 2007 Annual Reports and Accounts were performed in accordance with International Standards on Auditing (UK and Ireland). The unaudited financial information relating to the Yule Catto Group as at and for the six months ended 30 June 2010 and 2009 is incorporated by reference into this document pursuant to Part XII of this document and has been extracted without material adjustment from the Interim Results. The documents incorporated by reference herein are important and should be reviewed along with this document. Copies of the documents incorporated by reference will be available for inspection in accordance with paragraph 25 of Part XI of this document. None of the financial information included in or incorporated by reference herein was prepared in accordance with generally accepted accounting principles in the United States or audited in accordance with auditing standards generally accepted in the United States or auditing standards of the Public Company Accounting Oversight Board (United States).

Forward-looking statements This document contains certain forward-looking statements. Forward-looking statements can be indentified by the use of words such as ‘‘may’’, ‘‘will’’, ‘‘should’’, ‘‘predict’’, ‘‘assurance’’, ‘‘risk’’, ‘‘expect’’, ‘‘intend’’, ‘‘estimate’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘plan’’, ‘‘seek’’, ‘‘continue’’, or other similar expression that are predictive or indicative of future events. Statements in this document that are not historical facts are hereby identified as ‘‘forward-looking statements’’. Such forward-looking statements in this document, include, without limitation, those regarding the Group’s and the Enlarged Group’s financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, estimated cost savings, capital and other expenditures, competitive positions, production and sales targets, growth opportunities for existing products, plans and objectives of management and other matters. Statements in this

28 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS document that are not historical facts are hereby identified as ‘‘forward-looking statements’’. Such forward-looking statements, wherever they occur in this document, are necessarily based on assumptions reflecting the views of Yule Catto and involve a number of known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and its Directors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation: economic and business cycles, the terms and conditions of the Group’s financing arrangements, foreign currency rate fluctuations, competition in the Group’s principal markets, acquisitions or disposals of businesses or assets and trends in the Group’s principal industries. As such, forward-looking statements are no guarantee of future performance. You are advised to read this document and the information incorporated by reference into this document in their entirety, and, in particular, the Summary, the Risk Factors and Parts I, V, VI and VII of this document for a further discussion of the factors that could affect the Group’s future performance and the industries and markets in which it operates. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as at the date of this document. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules and any law, Yule Catto does not have any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, further events or otherwise. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules and any law, Yule Catto expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Yule Catto’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. In light of these risks, uncertainties and assumptions, the events described in forward looking statements in this document might not occur. Prospective investors should specifically consider the factors identified in this document which could cause actual results to differ before making an investment decision. Investors should note that the contents of these paragraphs relating to forward- looking statements are not intended to qualify the statements made as to sufficiency of working capital in this document.

Notice to investors in the US and the Excluded Territories The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been approved or disapproved by the Securities and Exchange Commission, any federal or state securities commission in the US or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares or the Provisional Allotment Letters or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the US. This document does not constitute an offer of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares to any person with a registered address, or who is resident or located, in the US or, subject to certain exemptions, any of the Excluded Territories. The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been and will not be registered under the relevant laws of any state, province or territory of the US or any of the Excluded Territories and may not be offered, sold, resold, taken up, exercised, renounced, transferred or delivered, directly or indirectly, within, in, or into the US or any Excluded Territory except pursuant to an applicable exemption from registration requirements. The ability of an Overseas Shareholder to bring an action against the Company may be limited under law. The Company is a public limited company incorporated in England. The rights of holders of Ordinary Shares are governed by English law and by the Company’s Articles of Association. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. Each person to whom the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares or the Provisional Allotment Letters are distributed, offered or sold outside the US (other than US Persons) will be deemed by its subscription for, or purchase of, the Nil Paid Rights, the Fully Paid Rights or New Ordinary Shares to have represented and agreed, on its behalf and on behalf of any investor

29 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS accounts for which it is subscribing for or purchasing the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares, as the case may be, that: (a) it is not a US Person and it is acquiring the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares from the Company, in an ‘‘offshore transaction’’ as deﬁned in Regulation S; and (b) the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have not been offered to it by the Company, by means of any ‘‘directed selling efforts’’ as deﬁned in Regulation S.

Notice to EEA investors In relation to each member state of the EEA which has implemented the Prospectus Directive (each, a‘‘relevant member state’’) (except for the UK), with effect from and including the date on which the Prospectus Directive was implemented in that relevant member state (the ‘‘relevant implementation date’’), no Nil Paid Rights, Fully Paid Rights or New Ordinary Shares have been offered or will be offered pursuant to the Rights Issue to the public in that relevant member state prior to the publication of a prospectus in relation to the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that with effect from and including the relevant implementation date, offers of Nil Paid Rights, Fully Paid Rights and New Ordinary Shares may be made to the public in that relevant member state at any time: (a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than c43 million; and (iii) an annual turnover of more than c50 million, as shown in its last annual or consolidated accounts; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Nil Paid Rights, Fully Paid Rights or New Ordinary Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of the foregoing paragraph an ‘‘offer to the public’’ in relation to any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the Rights Issue and any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares to be offered so as to enable an investor to decide to purchase any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares, as the same may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state, and the expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC and includes any relevant implementing measure in each relevant member state. In the case of any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the Nil Paid Rights, the Fully Paid Rights and/or the New Ordinary Shares acquired by it in the Rights Issue have not been acquired on a non- discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances which may give rise to an offer of any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares to the public other than their offer or resale in a relevant member state to qualified investors as so defined or in circumstances in which the prior consent of the Company and the Joint Bookrunners has been obtained to each such proposed offer or resale. Each of the Company and the Joint Bookrunners and their respective affiliates, and others, will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement. Notwithstanding the above, a person who is not a qualified investor and who has notified the Company and the Joint Bookrunners of such fact in writing may, with the consent of the Company and the Joint Bookrunners be permitted to subscribe for or purchase Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in the Rights Issue.

Notice to overseas investors All Overseas Shareholders and any person (including, without limitation, a nominee, custodian or trustee) who has a contractual or other legal obligation to forward this document or any Provisional

30 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Allotment Letter, if and when received, or other document relating to the Rights Issue or Acquisition to a jurisdiction outside the UK, should read paragraph 2.6 of Part IV of this document. An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers. All of the Directors and executive officers are residents of the UK other than Dato’ Lee Hau Hian, who is resident in Malaysia. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and executive officers within the Overseas Shareholder’s country of residence or to enforce against the Directors and executive officers judgments of courts of the Overseas Shareholder’s country of residence based on civil liabilities under that country’s securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors or executive officers who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or executive officers in any original action based solely on the foreign securities laws brought against the Company or the Directors or the executive officers in a court of competent jurisdiction in England or other countries.

Notice to all investors Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in this document for any purpose other than considering an investment in the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares is prohibited. By accepting delivery of this document, each offeree of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares agrees to the foregoing. The distribution of this document and/or the Provisional Allotment Letters and/or the transfer of the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares into jurisdictions other than the UK may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, subject to certain exceptions, such documents should not be distributed, forwarded to or transmitted in or into the US or the Excluded Territories or into any other jurisdiction where the extension or availability of the Rights Issue would breach any applicable law. For further information on the manner of distribution of the New Ordinary Shares, and transfer restrictions to which they are subject, see paragraph 2.6 of Part IV of this document. The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters are not transferable, except in accordance with, and the distribution of this document is subject to, the restrictions set out in paragraph 2.6 of Part IV of this document. No action has been taken by the Company or by the Underwriters that would permit an offer of the New Ordinary Shares or possession or distribution of this document or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than in the UK. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied upon as having been authorised by the Company or by the Underwriters. Neither the delivery of this document nor any subscription or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Group since the date of this document or that the information in this document is correct as at any time subsequent to its date. No statement in this document is intended as a proﬁt forecast. In making an investment decision, each investor must rely on its own examination, analysis and enquiry of the Company and the Group and the terms of the Rights Issue and Acquisition, including the merits and risks involved. Apart from the responsibilities and liabilities, if any, which may be imposed on the Underwriters by the FSMA or the regulatory regime established thereunder, the Underwriters do not accept any responsibility whatsoever, and they make no representation or warranty, express or implied for, the contents of this document, including its accuracy, completeness or veriﬁcation or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Group, the Acquisition or the Rights Issue and nothing in this document is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. The Underwriters accordingly disclaim all and any liability whatsoever, whether arising in tort, contract or

31 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS otherwise (save as referred to above) which any of them might otherwise have in respect of this document. None of the Underwriters, nor any person acting on behalf of any of them, accepts any responsibility or obligation to update, review or revise the information in this document or to publish or distribute any information which comes to its or their attention after the date of this document, and the distribution of this document shall not constitute a representation by the Underwriters, or any such person, that this document will be updated, reviewed or revised or that any such information will be published or distributed after the date hereof. The Underwriters, as underwriters of the Rights Issue, may engage in trading activity for the purpose of hedging their commitment under the Underwriting Agreement. Such activity may include purchases and sales of securities of the Company and related or other securities or instruments (including the Shares, Nil Paid Rights and Fully Paid Rights). The Underwriters, or any afﬁliate thereof acting as an investor for its or their own account(s), may subscribe for, retain, purchase or sell Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters and/or New Ordinary Shares or related investments for its or their own account(s) and in that capacity may offer or sell such securities or other investments otherwise than in connection with the Rights Issue. Accordingly, references in this document to New Ordinary Shares being offered or placed should be read as including any offering or placement of New Ordinary Shares to each of the Underwriters or any of their afﬁliates acting in such capacity. The aforementioned entities do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any applicable legal or regulatory requirements.

Incorporation by reference Certain information in relation to the Yule Catto Group has been incorporated by reference in this document. Please see Part XII of this document.

No incorporation of website information The contents of the websites of the Group or the PolymerLatex Group do not form part of this document.

Deﬁnitions Capitalised terms have the meanings ascribed to them in Part XIII of this document.

General Notice Nothing contained in this document is intended to constitute investment, legal, tax, accounting or other professional advice. This document is for your information only and nothing in this document is intended to endorse or recommend a particular course of action. You should consult with an appropriate professional for speciﬁc advice rendered on the basis of your situation.

Where to ﬁnd help Part III ‘‘Questions and Answers on the Rights Issue’’ of this document answers some of the questions most often asked by shareholders about rights issues. If you have further questions, please telephone the Registrar on 0870 707 1421 (UK only) or +44 870 707 1421 (if calling outside the UK) This service is available from 8.30 a.m. to 5.30 p.m. Monday to Friday (except bank holidays) Please note that, for legal reasons, the Registrar will not be able to provide advice on the merits of the Rights Issue or Acquisition or to provide legal, business, ﬁnancial tax or investment advice. Calls from within the UK are charged at 8 pence per minute (including VAT) from a BT landline. Other service providers’ costs may vary.

32 c103902pu020 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART I

LETTER FROM THE CHAIRMAN OF YULE CATTO & CO PLC

(incorporated in England and Wales with registered number 98381)

Directors Registered Ofﬁce: Peter Wood, Chairman Temple Fields Adrian Whitﬁeld, Chief Executive Harlow David Blackwood, Finance Director Essex Jeremy Maiden, Senior Independent Non-Executive Director CM20 2BH The Hon. Alexander Catto, Non-Executive Director Dr Alexander Dobbie, Independent Non-Executive Director Dato’ Hau Hian Lee, Non-Executive Director 13 December 2010 Dear Shareholder

Acquisition of PolymerLatex and a 4 for 3 Rights Issue of New Ordinary Shares at a price of 116 pence per share

1. Introduction to the Acquisition On 13 December 2010, the Board announced that the Company had (through its wholly owned subsidiary Yule Catto Holdings GmbH) entered into a conditional agreement with PolymerLatex Holdings B.V., a company owned by funds controlled by TowerBrook to acquire the entire issued share capital of PolymerLatex for cash consideration of c157 million (£133 million) and to assume the PolymerLatex Group’s existing net indebtedness of c286 million (£243 million), giving a total transaction value of c443 million (£376 million1). In addition, the Enlarged Group will continue to fund the PolymerLatex Group’s unfunded pension liability, which, as at 31 December 2009, was estimated at c31 million (£26 million). The management of Yule Catto views the Acquisition as a compelling, transformational opportunity to acquire a leading emulsion polymers franchise. The proposed combination will offer a number of benefits including increased scale and market share, a broader product offering and an improved new product pipeline. In addition, the Directors believe that the combination will generate significant synergies from improved asset utilisation, operational efficiencies and streamlined back office functions. The purpose of this letter is, amongst other things: (i) to explain the background to, and reasons for, the Acquisition, (ii) to explain why the Directors believe that the Acquisition will assist in promoting the success of the Company and is in the best interests of the Company and the Shareholders as a whole, and (iii) to recommend that you vote in favour of the Resolutions to be proposed at the General Meeting. The Acquisition and associated fees and expenses will be funded from a combination of: * a Rights Issue of New Ordinary Shares at a price of 116 pence per share on the basis of 4 New Ordinary Shares for every 3 Existing Ordinary Shares, raising gross proceeds of approximately £225 million; and

* New Credit Facilities comprising a euro denominated £150 million 3-year term loan facility and a £60 million 3-year multicurrency revolving credit facility (of which £15 million will be drawn down for the purposes of funding the Acquisition). The New Ordinary Shares will represent approximately 57.1 per cent. of the enlarged share capital of the Company following the Rights Issue. In view of its size relative to that of Yule Catto, the Acquisition constitutes a Class 1 transaction under the Listing Rules and accordingly is conditional on Shareholder approval. Resolutions to approve the Acquisition and to grant authorities required to implement the Rights Issue will be proposed at a General Meeting of the Company to be held on 30 December 2010 at 11.00 a.m.. The General Meeting Notice is set out at the end of this document.

1 Sterling amount based on the c:£ exchange rate of c1.18:£1

33 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The Rights Issue is fully underwritten (except for the New Ordinary Shares which the KLK Group has irrevocably undertaken to take up) by HSBC and Barclays Capital as Joint Global Co-ordinators and Joint Bookrunners and by the other Underwriters. KLK has irrevocably undertaken to the Company and the Underwriters that they will vote (and will procure votes held by other members of the KLK Group) in favour of the Resolutions and to take up (and procure the take up of) the full entitlement of the KLK Group to New Ordinary Shares. This will result in companies in the KLK Group acquiring in aggregate 36,552,552 New Ordinary Shares representing approximately 18.82 per cent. of the New Ordinary Shares to be issued under the Rights Issue.

2. Background to and reasons for the Acquisition Over the past four years, Yule Catto has undergone a significant internal restructuring focused on gross margin improvement, cost reductions, improved cash generation and portfolio realignment. Yule Catto divested several non-core assets to focus primarily on its Polymer Chemicals division, particularly its emulsion polymers product lines. As a result, the core business of Yule Catto is now the Polymer Chemicals division, which accounted for over 80 per cent. of revenues and almost 90 per cent. of divisional operating profits in 2009. Over the same period, the emulsion polymers sector in which Yule Catto and PolymerLatex operate has undergone a period of consolidation, which has resulted in production capacity rationalisation and allowed the sector to enjoy relatively stable and resilient financial performance despite a challenging global economic environment. In the context of the Company’s strategic focus on the polymers sector, Yule Catto identified PolymerLatex as a potential strategic acquisition some time ago. PolymerLatex is a leading global player in latex products operating through a network of well invested facilities in Europe and Asia. The Directors believe that the Acquisition at this time presents a compelling opportunity with a strong strategic, operational and financial rationale. The PolymerLatex Group’s portfolio of well-located operational plants complements Yule Catto’s existing operations and the Directors believe that the Enlarged Group will benefit from the experience and contribution of the employees of the PolymerLatex Group who will join the Enlarged Group. The Directors believe that the addition of new products and technology will facilitate growth in traditional Yule Catto and PolymerLatex products as well as enabling diversification into new products and end-markets through the combined product and application development capability of the Enlarged Group. Overall, the Acquisition adds further scale and diversity to the Company’s current specialty offering. Specifically, the Directors believe that the Acquisition delivers a number of strategic benefits to Yule Catto, including: * building Yule Catto’s position in the xSBR market by adding European manufacturing assets, new end-markets and applications development capabilities, enabling Yule Catto to compete more effectively in this market segment; * providing Yule Catto with access to additional, modern, purpose-built nitrile latex capacity in Malaysia. This offers the opportunity to expand Yule Catto’s product offering in the growing synthetic latex protective gloves market. The PolymerLatex Group’s manufacturing facilities in Malaysia also offer growth opportunities for Yule Catto in xSBR in the Asian market; and * providing Yule Catto with access to additional manufacturing process expertise, research and development and technical service capabilities. The Directors believe that the Acquisition will help to accelerate the Company’s strategy of growing its Polymer Chemicals division in attractive emerging markets, where PolymerLatex’s technology, new product development and manufacturing capabilities will strengthen its market position. The Directors intend that the expected improved cash flow profile of the Enlarged Group will be used to fund organic growth opportunities in emerging markets and the addition of the PolymerLatex Group’s new plant in Malaysia will reduce planned capital expenditure on the Group’s own nitrile latex facilities supplying the protective glove end-market in Asia. The Directors believe that the Acquisition will allow Yule Catto to achieve its previously stated emerging market objectives more quickly, while also increasing the scale and efficiency of its core European operations. Overall, the Directors believe that the Acquisition is a transformational opportunity that will result in a business with increased scale, established market positions, improved cash generation capability and

34 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS a product portfolio that will provide a foundation from which the Enlarged Group can grow and compete more effectively in a consolidating emulsion polymers market, while investing in new products and capacity in emerging markets. The Board believes that the Enlarged Group will be able to achieve annual cost synergies of at least £20 million. The majority of these synergies are expected to be achieved through efficiency improvements within the manufacturing operations and the selling, general and administrative functions of the Enlarged Group. The Board expects to benefit from around 30 per cent. of these synergies in 2011, with the full benefit of the synergies being realised in 2012 and beyond. It is expected that the cost of realising these synergies will be approximately £20 million, of which the significant majority would be incurred in 2011, with the remainder being incurred in 2012. In addition, the Board expects to make additional capital expenditure of approximately £23 million to realise these synergies with this additional initial cost expected to be offset by expected capital expenditure savings during the first three years of ownership. These statements of estimated cost savings relate to future actions and circumstances which by their nature involve risks, uncertainties, contingencies and other factors. As a result, the cost savings referred to may not be achieved, or those achieved may be materially different from those estimated.

Strategy of the Enlarged Group The Directors’ strategic priorities following the Acquisition and integration of the PolymerLatex business will continue to be focused on geographical expansion around the existing platform of the Enlarged Group, with a particular focus on further enhancing the Group’s presence in Asia. The Directors intend that the Enlarged Group can use the anticipated additional free cash ﬂow generated from the Acquisition to fund organic growth opportunities in emerging markets. With an improving demand environment, the Directors expect to invest in further manufacturing capacity in nitrile and xSBR in Asia in order to meet this rising demand. In Europe, strategic priorities following the Acquisition will be focused on delivering the targeted synergies. Furthermore, the Directors plan to focus efforts on implementing a comprehensive integration plan which will combine best practices from both Yule Catto and PolymerLatex to lower production cost, enhance customer service and further strengthen the Enlarged Group’s new product pipeline.

3. Overview of the PolymerLatex Group The PolymerLatex Group is an established player in the development, production and distribution of emulsion polymer products. It is headquartered in Germany and operates with manufacturing facilities in Marl (Germany), Worms (Germany), Filago (Italy) and Johor Bahru (Malaysia), a tolling arrangement in Dubai and a joint venture manufacturing facility in Oulu (Finland). PolymerLatex is currently owned by funds advised by TowerBrook. The PolymerLatex Group has a diverse product portfolio and operates through six industry teams which are aligned with their respective market segments: Paper, Carpet, Foam, Construction & Paints, Protective Gloves and Functional Polymers (Textiles and Adhesives). The PolymerLatex Group gross assets as at 31 December 2009 (the most recent date for which audited ﬁnancial statements for the PolymerLatex Group have been prepared), were c393.8 million and the underlying loss before tax attributable to those assets, for the year ended 31 December 2009, was c20.4 million. In the year ended 31 December 2009, the PolymerLatex Group achieved underlying sales of c386.7 million and for the six months to 30 June 2010, underlying total sales of c279.6 million and underlying EBITDA of c33.8 million, which represented a strong performance. These ﬁgures have been prepared in accordance with Yule Catto’s accounting policies. An accountants’ report on the PolymerLatex Group covering the three years ended 31 December 2009 restated into IFRS is set out in Part IX of this document.

4. Financing the Acquisition The Acquisition and associated fees and expenses will be funded from a combination of:

* a Rights Issue of New Ordinary Shares at a price of 116 pence per share on the basis of 4 New Ordinary Shares for every 3 Existing Ordinary Shares. Up to 194,217,582 New Ordinary Shares will be issued, raising gross proceeds of approximately £225 million; and

35 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS * New Credit Facilities comprising a euro denominated £150 million 3-year term loan facility and a £60 million 3-year multicurrency revolving credit facility (of which £15 million will be drawn down for the purposes of funding the Acquisition). The Rights Issue is described in Part IV of this document. The New Credit Facilities are described in paragraph 11.5 of Part XI of this document.

5. Financial impact of the Acquisition and Rights Issue The Directors expect the Acquisition to be accretive to earnings per share in 2011 and signiﬁcantly accretive thereafter with a return on investment exceeding the Enlarged Group’s weighted average cost of capital for the year ended 31 December 2011. The Board’s expectation is based upon an assumed acquisition completion date of 1 January 2011 and does not take into account any exceptional restructuring costs. You should note that completion of the Acquisition is subject to certain conditions, including competition clearances, and is expected to occur within four months from the date of this document. The Directors believe that the Enlarged Group’s balance sheet will remain robust, with an estimated £45 million of liquidity in the form of cash and facilities remaining available to draw down at Completion, and believe that it will provide the ﬂexibility to execute both Yule Catto’s existing planned investment programme and that of the Enlarged Group. The Rights Issue will result in dilution of 57.1 per cent. if existing Shareholders do not take up their rights under the Rights Issue. The Rights Issue is conditional, amongst other things, upon the passing of the Resolutions, Admission, and the Underwriting Agreement having become unconditional in all respects (other than conditions referring to Admission) and not having been terminated in accordance with its terms prior to Admission. The Rights Issue is not conditional on Completion. However if, before Admission, the Acquisition Agreement has been terminated or the conditions to the Acquisition cease to be capable of satisfaction, the Rights Issue will not proceed.

6. Principal terms of the Acquisition The Acquisition values the PolymerLatex Group at c443 million (£376 million1), such amount to be satisﬁed by the repayment on Completion of all third party indebtedness of the PolymerLatex Group, estimated to be c286 million (£243 million) (the ‘‘Net Debt Settlement Amount’’), and the balance, estimated to be c157 million (£133 million), (the ‘‘Equity Value Amount’’) being the cash consideration payable for the issued share capital of PolymerLatex. The Equity Value Amount is subject to adjustment in the event that there is a shortfall or excess in the working capital of the PolymerLatex Group at Completion or in the event that there is an increase or decrease in the Net Debt Settlement Amount. The Enlarged Group will continue to fund the PolymerLatex Group’s unfunded pension liability which as at 31 December 2009 was estimated to be c31 million (£26 million). Completion under the Acquisition Agreement is conditional upon: * resolutions being passed by Shareholders approving, inter alia, the Acquisition and the Rights Issue; * Admission becoming effective; * relevant competition clearances in connection with the Acquisition being obtained; * there not having occurred a material adverse change in the PolymerLatex Group’s business prior to Completion. In the event that such conditions are not satisﬁed within six months of the date of the Acquisition Agreement, the Acquisition Agreement will terminate with immediate effect. Part II of this document contains a more detailed summary of the principal terms of the Acquisition.

7. Summary of the Rights Issue Under the terms of the Rights Issue, the New Ordinary Shares are being offered, by way of rights, to Qualifying Shareholders (other than, subject to certain exemptions, Shareholders in the US and the Excluded Territories) at 116 pence per New Ordinary Share, payable in full on acceptance by not

1 Sterling amount based on the c:£ exchange rate of c1.18:£1.

36 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS later than 11.00 a.m. on 17 January 2011. Up to 194,217,582 New Ordinary Shares will be issued, raising approximately £211 million (net of underwriting commissions, the commission payable to KLK pursuant to the KLK Irrevocable Undertaking and transaction costs). The Issue Price of 116 pence per New Ordinary Share represents a discount of approximately 55.4 per cent. to the Closing Price and a discount of approximately 34.7 per cent. to the theoretical ex-rights price (calculated by reference to the Closing Price). The Rights Issue is being made on the following basis: 4 New Ordinary Shares for every 3 Existing Ordinary Shares held by Qualifying Shareholders on the Record Date and so in proportion to any other number of Existing Ordinary Shares then held, and otherwise on the terms and conditions as set out in this document and, in the case of Qualifying non-CREST Shareholders (other than, subject to certain exemptions, Shareholders with registered addresses in, or who are resident in the US and the Excluded Territories) only, the Provisional Allotment Letter. New Ordinary Shares representing fractional entitlements will not be allotted to Qualifying Shareholders and entitlements to New Ordinary Shares will be rounded down to the nearest whole number and any fractional entitlements will be disregarded. Holdings of Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with Existing Ordinary Shares, including the right to all future dividends or other distributions made, paid or declared after the date of issue. Details of the rights attaching to Ordinary Shares appear in the Articles of Association, a description of which appears in paragraph 7 of Part XI of this document. The Rights Issue is conditional upon: (a) the Resolutions being passed, without amendment, at the General Meeting; (b) Admission becoming effective by not later than 8.00 a.m. on 31 December 2010 (or such later time and/or date as Yule Catto and the Joint Global Co-ordinators may agree); (c) the Acquisition Agreement not having been terminated and the Acquisition not ceasing to be capable of Completion in accordance with the terms of the Acquisition Agreement prior to Admission; and (d) the Underwriting Agreement having become unconditional in all respects (save for conditions relating to Admission) and not having been terminated in accordance with its terms prior to Admission. KLK, a significant Shareholder, has irrevocably undertaken to take up (and procure the take up of) the full entitlement of the KLK Group under the Rights Issue and to vote (and procure votes) in favour of the Resolutions. This will result in companies in the KLK Group acquiring in aggregate 36,552,552 New Ordinary Shares, representing approximately 18.82 per cent. of the New Ordinary Shares to be issued under the Rights Issue. The KLK Group is being paid a commission of 1.75 per cent. of the aggregate value, at the Issue Price, of the New Ordinary Shares KLK has agreed to take up (and procure the take up of) under the Rights Issue and the Company is not paying any underwriting fee in respect of these New Ordinary Shares. The Underwriters have agreed, subject to the terms and conditions of the Underwriting Agreement, to underwrite the Underwritten Shares (being all of the New Ordinary Shares other than the New Ordinary Shares which are the subject of the KLK Irrevocable Undertaking). Application has been made to the UK Listing Authority for the New Ordinary Shares to be admitted to the Official List and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on its main market for listed securities. It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence on the London Stock Exchange, nil paid, at 8.00 a.m. on 31 December 2010. The latest time and date for acceptance and payment in full of the New Ordinary Shares will be 11.00 a.m. on 17 January 2011. Based on the Closing Price of 260 pence per share and the proposed Issue Price of 116 pence for each New Ordinary Share, the theoretical ex-rights price of an Ordinary Share is 178 pence. The terms and conditions of the Rights Issue, including the procedure for acceptance and payment and the procedure in respect of rights not taken up, are set out in Part IV of this document.

37 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Qualifying non-CREST Shareholders Subject to the passing of the Resolutions, Qualifying non-CREST Shareholders (other than, subject to certain exemptions, Shareholders with registered addresses in, or who are resident in the US and the Excluded Territories) will be sent a Provisional Allotment Letter on 30 December 2010 which will indicate the number of New Ordinary Shares provisionally allotted to such Qualifying non-CREST Shareholders pursuant to the Rights Issue. Qualifying non-CREST Shareholders should retain this document for reference pending receipt of a Provisional Allotment Letter. Qualifying non-CREST Shareholders should note that, other than the Provisional Allotment Letter, they will receive no further written communication from the Company in respect of the subject matter of this document.

Qualifying CREST Shareholders Subject to the passing of the Resolutions, Qualifying CREST Shareholders (other than, subject to certain exemptions, Shareholders in the US and the Excluded Territories) (none of whom will receive a Provisional Allotment Letter) are expected to receive a credit to their appropriate stock accounts in CREST in respect of the Nil Paid Rights to which they are entitled on 31 December 2010. The Nil Paid Rights so credited are expected to be enabled for settlement by CREST as soon as practicable after Admission. Qualifying CREST Shareholders should note that they will receive no further written communication from the Company in respect of the subject matter of this document. They should accordingly retain this document for, amongst other things, details of the action they should take in respect of the Rights Issue. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Rights Issue.

Overseas Shareholders Shareholders resident in any jurisdiction other than the United Kingdom should refer to paragraph 2.6 of Part IV of this document for further information.

Settlement The New Ordinary Shares will be capable of being held in certificated or uncertificated form. Pending the issue of definitive certificates for the New Ordinary Shares, transfers will be certified against the register. No temporary documents of title in respect of the New Ordinary Shares will be issued. Any New Ordinary Shares to be issued in certificated form will be represented by definitive share certificates, which are expected to be despatched by post to the persons entitled thereto at that person’s registered address (provided that such registered address is not in the United States or any other jurisdiction outside the United Kingdom). The attention of Qualifying Shareholders with Ordinary Shares in uncertificated form or who wish to receive their New Ordinary Shares in uncertificated form is drawn to paragraph 2.2 of Part IV of this document.

8. Use of proceeds of the Rights Issue The net proceeds of the Rights Issue, which are fully underwritten (save for the New Ordinary Shares which are the subject of the KLK Irrevocable Undertaking), will be approximately £211 million, which will be used to fund part of the consideration for the Acquisition and repayment of part of the existing debt of the PolymerLatex Group. In the event that the Rights Issue proceeds but Completion does not take place, the Directors intend to return substantially all of the net proceeds of the Rights Issue to Shareholders within a reasonable period of time. The Company would seek to return these proceeds in as tax efﬁcient a manner as possible for all Shareholders but certain Shareholders, including some Overseas Shareholders and individuals, may suffer a tax charge on any repayment and, accordingly, their ﬁnancial position may be adversely affected.

9. Final Dividend and Future Dividend Policy The New Ordinary Shares will carry the entitlement to all future dividend payments made by the Company, including any ﬁnal dividend for the 2010 ﬁnancial year.

38 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The Board has previously committed that the 2010 full year dividend would be no less than 5.0 pence per Ordinary Share. The Company paid an interim dividend of 2.0 pence per Ordinary Share on 11 November 2010. The Board intends that the total aggregate cash amount paid in dividends for 2010 will be in line with its previous commitment. However, due to the enlarged number of shares that will be in issue as a result of the Rights Issue at the time it is paid, the 2010 final dividend per Ordinary Share will be diluted accordingly. Following completion of the Acquisition and Rights Issue, the Board intends to pursue a progressive dividend policy. This will reflect the effect of the anticipated synergies and the longer term growth profile of the Group, while also taking into account the organic growth opportunities in which the Group expects to invest, in particular in emerging markets. All future dividend payments will be subject to the Company having sufficient distributable reserves and profits available for the purpose and will take into account the Group’s cash flows, debt repayments and the need to maintain an appropriate level of dividend cover.

10. Current trading and prospects of Yule Catto and PolymerLatex (a) Yule Catto In the six months to 30 June 2010, underlying total sales, as compared to the same period in the prior financial year, increased by 24 per cent. Underlying operating profit for the same six month period increased by 19 per cent. Underlying EBITDA margin was down 0.8 per cent. compared with the same period in the prior financial year. The increase in total sales was mainly driven by strong performance in the Polymer Chemicals division, which represented 86 per cent. of divisional operating profit. The decrease in EBITDA margin was mainly due to sharply increased raw material prices, which the Group has had some success in passing through to customers. Trading since 30 June 2010 has been in line with management expectations. (b) PolymerLatex The PolymerLatex Group saw strong trading throughout the first six months of 2010, with underlying total sales of c279.6 million and underlying EBITDA of c33.8 million. Unit cash margin improved which was mainly driven by greater volume and a higher cash margin. Management believe that, since 30 June 2010, the PolymerLatex Group’s trading performance has continued in line with these trends.

11. General Meeting A notice convening the General Meeting to be held at 11.00 a.m. on 30 December 2010 at the ofﬁces of the Company is set out at the end of this document. The purpose of the General Meeting is to seek Shareholder approval of the Resolutions in connection with the Acquisition and the Rights Issue. Resolution 1 is not conditional upon Resolution 2, but the Acquisition will not proceed unless the Rights Issue is completed. Resolution 2 is expressly conditional upon the passing of Resolution 1. A summary of the Resolutions is set out below:

Resolution 1 To approve the Acquisition and to authorise the Directors to make any non-material amendment, variation, waiver or extension to the terms or conditions of the Acquisition and to do all such other things as they may consider necessary, desirable or expedient in connection with the Acquisition.

Resolution 2 Subject to the approval of Resolution 1 above and conditional upon the Underwriting Agreement having become unconditional in all respects, save for any condition relating to Admission having occurred, to authorise the Directors to allot up to 228,205,662 Ordinary Shares, representing approximately 156.67 per cent. of Yule Catto’s issued share capital as at 10 December 2010, the last practicable date before the publication of this document. This will enable Yule Catto to allot sufﬁcient Ordinary Shares to satisfy its obligations in connection with the Rights Issue and also leave it with headroom equal to approximately 10 per cent. of the expected share capital following the Rights Issue. This authority will expire at the conclusion of the next annual general meeting of the Company or, if earlier, on 30 June 2011. The full text of the Resolutions is set out in the notice convening the General Meeting at the end of this document.

39 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 12. Action to be taken (a) The General Meeting You will ﬁnd enclosed with this document the Form of Proxy for use at the General Meeting or at any adjournment thereof. You are requested to complete and sign the Form of Proxy in accordance with the instructions printed on it and return it as soon as possible to, but in any event so as to be received no later than 11.00 a.m. on 24 December 2010 by the Registrar, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE. You may also deliver the Form of Proxy by hand to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE during usual business hours until this deadline. CREST members may also choose to use the CREST electronic proxy appointment service in accordance with the procedures set out in the notice convening the General Meeting at the end of this document. The lodging of the Form of Proxy (or the electronic appointment of a proxy) will not preclude you from attending and voting at the meeting in person if you so wish. (b) Rights Issue On the basis that dealings commence on 31 December 2010, the latest time for acceptance by Shareholders under the Rights Issue will be 11.00 a.m. on 17 January 2011. The procedure for acceptance and payment is set out in Part IV of this document. Further details will also appear in the Provisional Allotment Letter which, if all the Resolutions are passed at the General Meeting, will be sent to all Qualifying Non-CREST Shareholders (other than, subject to certain exemptions, Shareholders in the US and the Excluded Territories). If you are in any doubt what action you should take, you should immediately seek your own ﬁnancial advice from your stockbroker, bank manager, solicitor or other independent professional adviser duly authorised under FSMA who specialises in advice on the acquisition of shares and other securities. The Board’s recommendation for the action you should take is set out in paragraph 15 below.

13. Further information and risk factors Your attention is drawn to the further information set out in Part II to Part XIV (inclusive) of this document and, in particular, to the risk factors on pages 12 to 23 of this document.

14. Financial advice The Board has received ﬁnancial advice from HSBC in relation to the Acquisition. In providing its ﬁnancial advice to the Board, HSBC has taken into account the Board’s assessment of the commercial merits of the Acquisition.

15. Recommendation and voting intentions The Board considers that the Rights Issue and Acquisition, and each of the Resolutions are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends Shareholders to vote in favour of each of the Resolutions as the Shareholder Directors intend to do (or procure) in respect of their beneﬁcial shareholdings amounting to 1,421,189 Ordinary Shares in aggregate as at the date of this document (representing approximately 0.97 per cent. of Yule Catto’s existing issued share capital).

16. Directors’ and KLK Group’s intentions in relation to the Rights Issue Each of the Shareholder Directors and KLK have irrevocably undertaken to take up in full their rights and, in the case of KLK, to procure the take up in full of the rights of the KLK Group to acquire New Ordinary Shares under the Rights Issue in respect of their own beneficial shareholdings held at the time of the General Meeting, other than The Hon. Alexander Catto, who in respect of his beneficial interest, will be selling sufficient rights to allow him to purchase the balance of his allotment.

Yours faithfully

Peter Wood Chairman

40 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART II

SUMMARY OF THE PRINCIPAL TERMS OF THE ACQUISITION

1. Acquisition Agreement The Acquisition Agreement was entered into on 13 December 2010 between the Seller, the Managers, Yule Catto and its wholly-owned subsidiary Yule Catto Holdings GmbH (the ‘‘Buyer’’) pursuant to which the Buyer will acquire the entire issued share capital of PolymerLatex. Yule Catto has guaranteed the obligations of the Buyer under the Acquisition Agreement.

2. Consideration and adjustments The Acquisition values the PolymerLatex Group at c443 million (£376 million1), such amount to be satisﬁed by the repayment on Completion of all third party PolymerLatex indebtedness, estimated to be c286 million (£243 million) (the ‘‘Net Debt Settlement Amount’’), and the balance, estimated to be c157 million (£133 million), (the ‘‘Equity Value Amount’’) being the cash consideration payable for the issued share capital of PolymerLatex. The Equity Value Amount is subject to adjustment in the event that there is a shortfall or excess in the working capital or taxes balance of the PolymerLatex Group at Completion or in the event that there is an increase or decrease in the Net Debt Settlement Amount. The Enlarged Group will continue to fund the PolymerLatex Group’s unfunded pension liability which, as at 31 December 2009, was estimated at c31 million (£26 million). On Completion, c13.5 million will be retained from the Equity Value Amount and deposited into a third party cash escrow account to satisfy any warranty claims of which the Buyer becomes aware prior to expiry of the limitation period set out in paragraph 4 below. Following expiry of such period, and assuming the absence of any outstanding claims, the Seller shall be entitled to the release of the balance from the escrow account.

3. Conditions of the Acquisition Completion under the Acquisition Agreement is conditional upon: * resolutions being passed by Shareholders approving, inter alia, the Acquisition and the Rights Issue; * Admission becoming effective; * relevant anti-trust clearances in connection with the Acquisition being obtained; and * there not having occurred a material adverse change in the PolymerLatex Group’s business prior to Completion. In the event that such conditions are not satisﬁed (or waived) within six months of the date of the Acquisition Agreement, the Acquisition Agreement will terminate with immediate effect.

4. Warranties The Acquisition Agreement contains title and certain operational warranties given by the Seller and the Managers (together the ‘‘Warrantors’’) given, as is often the case in purchases from private equity sellers, subject to the Warrantors’ actual awareness. The warranties include, amongst other things, accounting and ﬁnancial, material contracts, taxation, property and environmental matters. The Acquisition Agreement does not contain any tax or environmental indemnities. All warranty claims under the Acquisition Agreement are subject to certain time limitations. The maximum aggregate liability for a breach of warranty is limited to the amount standing to the credit of the retention account and claims must be notiﬁed prior to the end of 15 months following the date of Completion. The PolymerLatex Group owns a latex manufacturing plant in Bromsgrove, UK. Production at this site ceased on 28 February 2009 and the Enlarged Group will assume remediation and clean up costs incurred in closing the site permanently. Yule Catto has engaged environmental specialists to assess the likely remediation and clean up costs and the ongoing liability of the site prior to its disposal and the Board has taken this cost into account in making the initial offer for the PolymerLatex Group and in arriving at the Equity Value Amount. Accordingly no indemnities are given by the Seller in the Acquisition Agreement in respect of such liabilities.

1 Sterling amount based on the c:£ exchange rate of c1.18:£1.

41 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 5. Conduct of PolymerLatex’s business prior to Completion The Seller has undertaken, pursuant to the terms of the Acquisition Agreement, that, during the period prior to Completion, PolymerLatex will carry on its business as a going concern in the ordinary and usual course and will not take certain actions without the prior written consent of the Buyer. In addition, the warranties are to be repeated by the Warrantors on Completion. In the event of a material adverse change in the PolymerLatex Group’s business during the period prior to Completion, the Buyer shall be entitled to terminate the Acquisition Agreement.

6. Adjustment to the Equity Value Amount The Equity Value Amount has been determined on the basis of expected trade working capital of PolymerLatex at Completion of c45 million and other working capital of c10 million and a taxes balance of c13.6 million. Following Completion a statement of the PolymerLatex Group’s actual working capital and net debt and taxes balance shall be calculated as at Completion and the Equity Value Amount shall be adjusted in the event that there is a shortfall or excess in the working capital and/or taxes balance of the PolymerLatex Group at Completion or if there is any increase or decrease in the Debt Settlement Amount.

7. Termination of the Acquisition Agreement In the event that the conditions referred to in paragraph 3 above have not been satisﬁed, within six months of the date of the Acquisition Agreement, the Acquisition Agreement will terminate with immediate effect.

8. Break fee The Acquisition Agreement contains a break fee in the amount of approximately £3.8 million (representing 1 per cent. of the market capitalisation of Yule Catto as at the date of the Acquisition Agreement), which shall be payable by the Buyer to the Seller in the event that the Seller, the Buyer or Yule Catto terminates the Acquisition Agreement due to the resolutions approving the Acquisition and facilitating the Rights Issue not being passed by Shareholders at the General Meeting or due to competition clearances in connection with the Acquisition not being obtained.

42 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART III

QUESTIONS AND ANSWERS ON THE RIGHTS ISSUE

The questions and answers set out in this Part III are intended to be in general terms only and, as such, you should read Part IV of this document for full details of what action you should take. If you are in any doubt as to what action you should take, you are recommended to seek immediately your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser, duly authorised under the FSMA if you are resident in the UK or, if not, from another appropriately authorised independent financial adviser. This Part III deals with general questions relating to the Rights Issue and more specific questions relating to Ordinary Shares held by persons resident in the UK who hold their Ordinary Shares in certificated form only. If you are an Overseas Shareholder, you should read paragraph 2.6 of Part IV of this document and you should take professional advice as to whether you are eligible and/or you need to observe any formalities to enable you to take up your rights. If you hold your Ordinary Shares in uncertificated form (that is, through CREST) you should read Part IV of this document for full details of what action you should take. If you are a CREST sponsored member, you should also consult your CREST sponsor. If you do not know whether your Ordinary Shares are in certificated or uncertificated form, please call the Registrar between 8.30 a.m. and 5.30 p.m. on any Business Day on 0870 707 1421 (from inside the UK) or +44 870 707 1421 (from outside the UK). Calls to the Registrar’s 0870 707 1421 number are charged at 8p per minute (including VAT) from a BT landline. Other service providers’ costs may vary. Calls to the Registrar’s +44 870 707 1421 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. For legal reasons, the Shareholder Helpline will be unable to give advice on the merits of the Rights Issue or the Acquisition or to provide legal, business, financial, tax or investment advice.

1. What is a rights issue? A rights issue is a way for companies to raise money. Companies do this by giving their existing shareholders a right to buy further shares in proportion to their existing shareholdings. This Rights Issue is an offer by Yule Catto of up to 194,217,582 New Ordinary Shares at a price of 116 pence per New Ordinary Share. If you hold Ordinary Shares on the Record Date, and you are a ‘‘Qualifying Shareholder’’ (i.e. you do not, subject to certain exceptions, have a registered address in, or are not located or resident in, the US or any of the Excluded Territories), you will be entitled to buy New Ordinary Shares under the Rights Issue. If you hold your Existing Ordinary Shares in certiﬁcated form, your entitlement will be set out in your Provisional Allotment Letter (which is due to be sent to you after the General Meeting). New Ordinary Shares are being offered to Qualifying Shareholders in the Rights Issue at a discount to the share price on the last Business Day before the details of the Rights Issue and Acquisition were announced on 13 December 2010. The Issue Price of 116 pence per New Ordinary Share represents a 34.7 per cent. discount to the theoretical ex-rights price based on the closing middle- market price quotation as derived from the London Stock Exchange’s Daily Ofﬁcial List of 260 pence per Ordinary Share on 10 December 2010, the last Business Day prior to the date of announcement of the terms of the Rights Issue. Because of this discount and while the market value of the Existing Ordinary Shares exceeds the Issue Price, the right to buy the New Ordinary Shares is potentially valuable. The Rights Issue is on the basis of 4 New Ordinary Shares for every 3 Existing Ordinary Share held by Qualifying Shareholders on the Record Date. If you are a Qualifying Shareholder and you do not want to buy the New Ordinary Shares to which you are entitled, you can instead sell or transfer your Nil Paid Rights to those New Ordinary Shares and receive the net proceeds, if any, of the sale or transfer in cash. This is referred to as dealing ‘‘nil paid’’.

2. I hold my Existing Ordinary Shares in certiﬁcated form. How do I know if I am eligible to participate in the Rights Issue? If you receive a Provisional Allotment Letter and, subject to certain exceptions, are not a holder with a registered address in, or who are resident or located in, the US or in any of the Excluded

43 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Territories, then you should be eligible to participate in the Rights Issue (as long as you have not sold all of your Existing Ordinary Shares before 8.00 a.m. on 31 December 2010 (the time when the Existing Ordinary Shares are expected to be separated to be marked ‘‘ex-rights’’ by the London Stock Exchange)).

3. I hold my Existing Ordinary Shares in certiﬁcated form. What do I need to do in relation to the Rights Issue? Subject to Shareholders approving the Resolutions at the General Meeting to be held on 30 December 2010, if you hold your Existing Ordinary Shares in certiﬁcated form and do not have a registered address in the US or one of the Excluded Territories, you will be sent a Provisional Allotment Letter that shows: * how many Existing Ordinary Shares you held at the close of business on 22 December 2010 (the Record Date for the Rights Issue); * how many New Ordinary Shares you are entitled to buy; * how much you need to pay if you want to take up your right to buy all the New Ordinary Shares provisionally allotted to you in full; and * what action you must take if you wish to participate in the Rights Issue or sell any of your Nil Paid Rights. Subject to certain exceptions, if you have a registered address in the US or any of the Excluded Territories, you will not receive a Provisional Allotment Letter.

4. I am a Qualifying Shareholder with a registered address in the UK and I hold my Existing Ordinary Shares in certificated form. What are my choices and what should I do with the Provisional Allotment Letter? 4.1 If you want to take up all of your rights If you want to take up all of your rights to subscribe for the New Ordinary Shares to which you are entitled, all you need to do is send the Provisional Allotment Letter, together with your cheque or banker’s draft for the full amount, payable to ‘‘Yule Catto & Co plc Rights Issue’’ and crossed ‘‘A/C payee only’’, by post (during normal business hours) to Computershare Investor Services PLC, Corporation Actions Projects, Bristol BS99 6AH or by hand to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE, to arrive by no later than 11.00 a.m. on 17 January 2011. Within the UK only, you can use the reply-paid envelope which will be enclosed with the Provisional Allotment Letter. Full instructions are set out in Part IV of this document and will be set out in the Provisional Allotment Letter. A definitive share certificate will then be sent to you for the New Ordinary Shares that you take up. Your definitive share certificate for New Ordinary Shares is expected to be despatched to you by no later than 25 January 2011. You will need your Provisional Allotment Letter to be returned to you if you want to deal in your Fully Paid Rights. Your Provisional Allotment Letter will not be returned to you unless you tick the appropriate box on the Provisional Allotment Letter. Third party cheques will not be accepted with the exception of building society cheques or banker’s drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the cheque or draft to such effect. The account name should be the same as that shown on the application. Post-dated cheques will not be accepted. 4.2 If you do not want to take up your rights at all If you do not want to take up your rights, you do not need to do anything. If you do not return your Provisional Allotment Letter subscribing for the New Ordinary Shares to which you are entitled by 11.00 a.m. on 17 January 2011, we have made arrangements under which the Joint Bookrunners will try to find investors to take up your rights and the rights of others who have not taken them up. If the Joint Bookrunners find investors who agree to pay a premium above the Issue Price and the related expenses of procuring those investors (including any applicable brokerage and commissions and amounts in respect of value added tax), you will be sent a cheque for your share of the amount of that premium provided that this is £5.00 or more. Cheques are expected to be despatched on or around 25 January 2011 and will be sent to your existing address appearing on Yule Catto’s register of members (or to the first-named holder if you hold your Existing Ordinary Shares jointly). If the Joint Bookrunners cannot find investors who agree to pay a premium over the Issue Price and related expenses so that your

44 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS entitlement would be £5.00 or more, you will not receive any payment. Alternatively, if you do not want to take up your rights, you can sell or transfer your Nil Paid Rights (see paragraph 4.4 below).

4.3 If you want to take up some but not all of your rights If you want to take up some but not all of your rights and wish to sell some or all of those you do not want to take up, you should ﬁrst apply to have your Provisional Allotment Letter split by completing Form X on the Provisional Allotment Letter, and returning it by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE, to be received by 3.00 p.m. on 13 January 2011, together with a covering letter stating the number of split Provisional Allotment Letters required and the number of Nil Paid Rights to be comprised in each split Provisional Allotment Letter. You should then deliver the split Provisional Allotment Letter representing the New Ordinary Shares that you wish to accept together with your cheque or banker’s draft to Computershare (see paragraph 4.1 above) to be received by 11.00 a.m. on 17 January 2011. Alternatively, if you only want to take up some of your rights (but not sell some or all of the rest), you should complete Form X on the Provisional Allotment Letter and return it by 11.00 a.m. on 17 January 2011 with a cheque or banker’s draft together with an accompanying letter indicating the number of Nil Paid Rights that you wish to take up, in accordance with the provisions set out in the Provisional Allotment Letter. Further details are set out in Part IV of this document and will be set out in the Provisional Allotment Letter.

4.4 If you want to sell all of your rights If you want to sell all of your rights, you should complete and sign Form X on the Provisional Allotment Letter (if it is not already marked ‘‘Original Duly Renounced’’) and pass the entire letter to your stockbroker, bank manager or other appropriate ﬁnancial adviser or to the transferee (provided they are not in the US or any of the Excluded Territories). The latest time and date for selling all of your rights is 11.00 a.m. on 17 January 2011. Please ensure, however, that you allow enough time so as to enable the person acquiring your rights to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. 17 January 2011.

5. I acquired my Existing Ordinary Shares prior to the Record Date (22 December 2010) and hold my Existing Ordinary Shares in certiﬁcated form. What if I do not receive a Provisional Allotment Letter? If Shareholders approve the Resolutions at the General Meeting to be held on 30 December 2010, and you do not receive a Provisional Allotment Letter but hold your Ordinary Shares in certiﬁcated form, this probably means that you are not eligible to participate in the Rights Issue. Some Qualifying Non-CREST Shareholders, however, will not receive a Provisional Allotment Letter but may still be eligible to participate in the Rights Issue, namely:

* Qualifying CREST Shareholders who held their Existing Ordinary Shares in uncertiﬁcated form on 22 December 2010 and who have converted them to certiﬁcated form;

* Qualifying Non-CREST Shareholders who bought Existing Ordinary Shares before 22 December 2010 but were not registered as the holders of those shares at the close of business on 22 December 2010; and

* certain Overseas Shareholders (see question 12 of this Part III below). If you do not receive a Provisional Allotment Letter but think that you should have received one, please contact the Registrar on 0870 707 1421 (from inside the UK) or +44 870 707 1421 (from outside the UK) between 8.30 a.m. and 5.30 p.m. on any Business Day. Calls to the Registrar’s 0870 707 1421 number are charged at 8p per minute (including VAT) from a BT landline. Other service providers’ costs may vary. Calls to the Registrar’s +44 870 707 1421 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. For legal reasons, the Shareholder Helpline will be unable to give advice on the merits of the Rights Issue or the Acquisition or to provide legal, business, ﬁnancial, tax or investment advice.

45 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 6. If I buy Ordinary Shares after the Record Date (22 December 2010) will I be eligible to participate in the Rights Issue? If you buy Ordinary Shares after the Record Date but prior to 8.00 a.m. on 31 December 2010 (the time when the Existing Ordinary Shares are expected to start trading ex-rights on the London Stock Exchange), you may be eligible to participate in the Rights Issue. If you are in any doubt, please consult your stockbroker, bank or other appropriate ﬁnancial adviser, or whoever arranged your share purchase, to ensure you claim your entitlement. If you buy Ordinary Shares at or after 8.00 a.m. on 31 December 2010, you will not be eligible to participate in the Rights Issue in respect of those Ordinary Shares.

7. I hold my Existing Ordinary Shares in certificated form. If I take up my rights, when will I receive my New Ordinary Share certificate? If you take up your rights under the Rights Issue, share certificates for the New Ordinary Shares are expected to be posted by no later than 25 January 2011.

8. What if the number of New Ordinary Shares to which I am entitled is not a whole number: am I entitled to fractions of shares? Your entitlement to New Ordinary Shares will be calculated at the Record Date. If the result is not a whole number, you will not receive a fraction of a New Ordinary Share and your entitlement will be rounded down to the nearest whole number and any fractional entitlements to New Ordinary Shares will be disregarded.

9. Will I be taxed if I take up or sell my rights or if my rights are sold on my behalf? If you are resident in the UK for tax purposes, you should not have to pay UK tax when you take up your rights, although the Rights Issue will affect the amount of UK tax you may pay when you subsequently sell your Ordinary Shares. However, assuming that you hold your Ordinary Shares as an investment, rather than for the purposes of a trade, you may (subject to any available exemption or relief) be subject to capital gains tax on any proceeds that you receive from the sale of your rights (unless, generally, the proceeds do not exceed £3,000, or, if more, 5 per cent., of the market value of your Ordinary Shares, although in that case the amount of UK tax you may pay when you subsequently sell all or any of your Ordinary Shares may be affected). Further information for Qualifying Shareholders who are resident in the UK for tax purposes is contained in Part XI of this document. This information is intended as a general guide to the current tax position in the UK and Qualifying Shareholders should consult their own tax advisers regarding the tax treatment of the Rights Issue in light of their own circumstances. Qualifying Shareholders who are in any doubt as to their tax position, or who are subject to tax in any other jurisdiction, should consult an appropriate professional adviser as soon as possible. Please note, the Registrar will not be able to give you any advice on any taxation issues.

10. I understand that there is a period when there is trading in the Nil Paid Rights. What does this mean? If you do not want to buy the New Ordinary Shares being offered to you under the Rights Issue, you can instead sell or transfer your rights (called ‘‘Nil Paid Rights’’) to those New Ordinary Shares and receive the net proceeds of the sale or transfer in cash. This is referred to as dealing ‘‘nil paid’’. This means that, during the Rights Issue offer period (i.e. between 31 December 2010 and 11.00 a.m. on 17 January 2011), a person can either purchase Ordinary Shares (which will not carry any entitlement to participate in the Rights Issue) or can trade in the Nil Paid Rights.

11. I hold my Existing Ordinary Shares in certificated form. What if I want to sell the New Ordinary Shares for which I have paid? Provided the New Ordinary Shares have been paid for and you have requested the return of the receipted Provisional Allotment Letter, you can transfer the Fully Paid Rights by completing Form X (the form of renunciation) on the receipted Provisional Allotment Letter in accordance with the instructions set out in the Provisional Allotment Letter until 11.00 a.m. on 17 January 2011. After that time, you will be able to sell your New Ordinary Shares in the normal way. The share certificate relating to your New Ordinary Shares is expected to be despatched to you by no later than 25 January 2011. Pending despatch of the share certificate, instruments of transfer will be certified by Computershare against the register.

46 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Further details are set out in Part IV of this document.

12. What should I do if I live outside the UK? Your ability to take up rights to New Ordinary Shares may be affected by the laws of the country in which you live and you should take professional advice as to whether you require any governmental or other consents or need to observe any other formalities to enable you to take up your rights. Shareholders resident outside the UK should refer to the information in paragraph 2.6 of Part IV of this document, particularly those in the US, Australia, Canada, Japan or the Republic of South Africa. If you do not have a registered address in the EEA and have not given to the Company an address in the EEA for the sending of notices, the offer by way of rights will be made to you through a notice in the London Gazette, details of which are provided in paragraph 2.6.10 of Part IV of this document. Subject to certain exceptions where required to comply with overseas securities laws, you will also receive a copy of this document and, if you hold your shares in certficated form, a provisional allotment letter to facilitate your participation in the Rights Issue. Yule Catto has made arrangements under which the Joint Bookrunners will try to find investors to take up your rights and those of other Shareholders who have not taken up their rights. If the Joint Bookrunners find investors who agree to pay a premium above the Issue Price and the related expenses of procuring those investors (including any applicable brokerage and commissions and amounts in respect of value added tax), you will be sent a cheque for your share of the amount of that premium provided that this is £5.00 or more. Cheques are expected to be despatched on or around 25 January 2011 and will be sent to your address appearing on Yule Catto’s register of members (or to the first-named holder if you hold your Ordinary Shares jointly). If the Joint Bookrunners cannot find investors who agree to pay a premium over the Issue Price and related expenses so that your entitlement would be £5.00 or more, you will not receive any payment.

13. Will the Rights Issue affect the future dividends Yule Catto pays? The New Ordinary Shares will carry the entitlement to all future dividend payments made by the Company, including any final dividend for the 2010 financial year. The Board has previously committed that the 2010 full year dividend would be no less than 5.0 pence per Ordinary Share. The Company paid an interim dividend of 2.0 pence per Ordinary Share on 11 November 2010. The Board intends that the total aggregate cash amount paid in dividends for 2010 will be in line with its previous commitment. However, due to the enlarged number of shares that will be in issue as a result of the Rights Issue at the time it is paid, the 2010 final dividend per Ordinary Share will be diluted accordingly. Following completion of the Acquisition and Rights Issue, the Board intends to pursue a progressive dividend policy. This will reflect the effect of the anticipated synergies and the longer term growth profile of the Group, while also taking into account the organic growth opportunities in which the Group expects to invest, in particular in emerging markets. All future dividend payments will be subject to the Company having sufficient distributable reserves and profits available for the purpose and will take into account the Group’s cash flows, debt repayments and the need to maintain an appropriate level of dividend cover.

47 c103902pu030 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART IV

TERMS AND CONDITIONS OF THE RIGHTS ISSUE

1. Introduction The Company is proposing to raise approximately gross proceeds of £225 million (approximately £211 million net of underwriting commissions, the commission payable pursuant to the KLK Irrevocable Undertaking and transaction costs) by way of a rights issue of up to 194,217,582 New Ordinary Shares. The funds will be used to fund part of the consideration for the Acquisition. Subject to the terms and fulfilment of the conditions of the Underwriting Agreement, the New Ordinary Shares will be offered by way of rights at 116 pence per share, payable in full on acceptance by Qualifying Shareholders on the basis of: 4 New Ordinary Shares for every 3 Existing Ordinary Share held on the Record Date (and so in proportion for any other number of Existing Ordinary Shares then held) and otherwise on the terms and conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders, in the Provisional Allotment Letters. Fractional entitlements to New Ordinary Shares will not be allotted to Qualifying Shareholders. Entitlements to New Ordinary Shares will be rounded down to the nearest whole number of New Ordinary Shares and the resulting fractional entitlements will be disregarded. Holdings of Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. The Issue Price of 116 pence per New Ordinary Share represents a discount of 55.4 per cent. to the middle market closing price of 260 pence per Ordinary Share on 10 December 2010, the last trading day prior to the announcement of the Rights Issue, and 34.7 per cent. to the theoretical ex-rights price based on this closing price. The Rights Issue is not conditional on Completion of the Acquisition. In the unlikely event that the Rights Issue proceeds but Completion does not take place, the Directors intend to return substantially all of the proceeds of the Rights Issue to Shareholders within a reasonable period of time. The Company would seek to return these proceeds in as tax efficient a manner as possible for all Shareholders but certain Shareholders, such as some Overseas Shareholders and individuals, may suffer a tax charge on any repayment and, accordingly, their financial position may be adversely affected. KLK, which is a significant Shareholder, has irrevocably undertaken to take up (and procure the take up of) the full entitlement of the KLK Group under the Rights Issue and to vote (and procure votes) in favour of the Resolutions. This will result in the KLK Group acquiring 36,552,552 New Ordinary Shares, representing approximately 18.82 per cent. of the New Ordinary Shares to be issued under the Rights Issue. The KLK Group is being paid a commission of 1.75 per cent. of the aggregate value, at the Issue Price, of the New Ordinary Shares KLK have agreed to take up (and procure the take up of) under the Rights Issue. Further details of the KLK Irrevocable Undertaking are set out at paragraph 11.4.1 of Part XI. Qualifying Shareholders who do not take up entitlements to New Ordinary Shares will have their proportionate shareholdings in the Company diluted by approximately 57.1 per cent. Those Qualifying Shareholders who take up their rights in full will, subject to fractions, have the same proportionate voting and distribution rights as held on the Record Date. The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Ordinary Shares now in issue, including the right to all dividends and other distributions hereafter declared, made or paid. The attention of Overseas Shareholders or any person (including, without limitation, a custodian, nominee or trustee) who has a contractual or other legal obligation to forward this document into a jurisdiction other than the UK is drawn to paragraph 2.6 of this Part IV below. Subject to the provisions of paragraph 2.6, Qualifying Shareholders with a registered address in the US or an Excluded Territory will not be sent this document or Provisional Allotment Letters and will not have their CREST accounts credited with Nil Paid Rights. Applications have been made to the UK Listing Authority and to the London Stock Exchange for the New Ordinary Shares to be admitted to the Official List and (nil paid and fully paid) to trading on the London Stock Exchange’s main market for listed securities respectively. It is expected that

48 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Admission will become effective on 31 December 2010 and that dealings in the New Ordinary Shares, nil paid, will commence on the London Stock Exchange by 8.00 a.m. on that date. The Existing Ordinary Shares and the New Ordinary Shares will be in registered form and capable of being held in certificated form or uncertificated form via CREST. The Existing Ordinary Shares are already admitted to CREST. No further application for admission to CREST is required for the New Ordinary Shares and all of the New Ordinary Shares when issued and fully paid may be held and transferred by means of CREST. Applications have been made for the Nil Paid Rights and the Fully Paid Rights to be admitted to CREST. Euroclear requires the Company to confirm to it that certain conditions (imposed by the CREST Manual) are satisfied before Euroclear will admit any security to CREST. It is expected that these conditions will be satisfied, in respect of the Nil Paid Rights and the Fully Paid Rights, on Admission. As soon as practicable after satisfaction of the conditions, the Group will confirm this to Euroclear. The ISIN for the New Ordinary Shares will be the same as that of the Existing Ordinary Shares being GB0009887422. The ISIN code for the Nil Paid Rights is GB00B4XSGG66 and for the Fully Paid Rights is GB00B4VSGT14. None of the New Ordinary Shares are being made available to the public other than pursuant to the Rights Issue. The Rights Issue has been fully underwritten by the Underwriters (save in respect of those New Ordinary Shares which are the subject of the KLK Irrevocable Undertaking) and is conditional, inter alia, upon: * the Resolutions being passed, without amendment, at the General Meeting; * Admission becoming effective by not later than 8.00 a.m. on 31 December 2010 (or such later date as the Company and the Joint Global Co-ordinators may agree); * the Acquisition Agreement not having been terminated, and the Acquisition not having ceased to be capable of Completion in accordance with the terms of the Acquisition Agreement prior to Admission; and * the Underwriting Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms. If the Underwriting Agreement is not declared or does not become unconditional by Admission or if it is terminated by the Underwriters prior to Admission upon the occurrence of certain specified events, the Rights Issue will be revoked and not proceed. The Underwriting Agreement is not capable of termination following Admission. The Joint Bookrunners may arrange sub-underwriting for some, all or none of the New Ordinary Shares. A summary of certain terms and conditions of the Underwriting Agreement is contained in paragraph 11.3 of Part XI of this document. The Group will not proceed with the Rights Issue if the Underwriting Agreement is terminated at any time prior to Admission and commencement of dealings in the New Ordinary Shares (nil paid). Subject, inter alia, to the conditions referred to above being satisfied and save as provided in paragraph 2.6 below, it is intended that: (i) Provisional Allotment Letters (which constitute temporary documents of title) in respect of Nil Paid Rights will be despatched to Qualifying Non-CREST Shareholders (other than Qualifying Shareholders with a registered address in the US or an Excluded Territory, except where the Company and the Joint Bookrunners are satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) at their own risk on 30 December 2010; (ii) the Registrar will instruct Euroclear to credit the appropriate stock accounts of Qualifying CREST Shareholders (other than Qualifying Shareholders with a registered address in the US or an Excluded Territory, except where the Company and the Joint Bookrunners are satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) with their entitlements to Nil Paid Rights with effect from 8.00 a.m. on 31 December 2010; (iii) the Nil Paid Rights and the Fully Paid Rights will be enabled for settlement by Euroclear by 8.00 a.m. on 31 December 2010, as soon as practicable after the Company has confirmed to Euroclear that all the conditions for admission of such rights to CREST have been satisfied;

49 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS (iv) New Ordinary Shares will be credited to the relevant Qualifying Shareholders (or their renouncees) who validly take up their rights by no later than 18 January 2011; and

(v) share certiﬁcates for the New Ordinary Shares will be despatched to Qualifying Non-CREST Shareholders (or their renouncees) who validly take up their rights by no later than 25 January 2011.

This document constitutes the offer of New Ordinary Shares to all Qualifying CREST Shareholders (other than Qualifying Shareholders with a registered address or who are resident in the US or the Excluded Territories, or are otherwise located in the United States, except where the Company and the Joint Bookrunners are satisﬁed that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) by way of enablement of the Nil Paid Rights and the Fully Paid Rights (as set out in paragraph (iii) above); and to Qualifying non-CREST Shareholders (other than Qualifying Shareholders with a registered address in or who are resident in the US or the Excluded Territories, or are otherwise located in the United States except where the Company is satisﬁed that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) by way of a Provisional Allotment Letter (as set out in paragraph (i) above). Pursuant to the Companies Act, the offer of New Ordinary Shares to Qualifying Shareholders with registered addresses outside the EEA will also be made to such Shareholders through a notice in the London Gazette, details of which are provided in paragraph 2.6.10 of this Part IV below.

All documents including Provisional Allotment Letters (which constitute temporary documents of title) and cheques and certiﬁcates posted to, by or from Qualifying Shareholders and/or their transferees or renouncees (or their agents, as appropriate) will be posted at their own risk.

Any person accepting and/or renouncing a Provisional Allotment Letter or requesting registration of the New Ordinary Shares comprised therein and any CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in paragraph 2.2 of this Part IV below is deemed to have made the representations and warranties set out in paragraph 2.2.2(d) of this Part IV below.

2. Action to be taken The action to be taken in respect of the New Ordinary Shares depends on whether, at the relevant time, the Nil Paid Rights or the Fully Paid Rights in respect of which action is to be taken are in certiﬁcated form (that is, are represented by Provisional Allotment Letters) or are in uncertiﬁcated form (that is, are in CREST).

If you are a Qualifying Non-CREST Shareholder, please refer to paragraph 2.1 and paragraphs 2.3 to 2.9 of this Part IV.

If you are a Qualifying CREST Shareholder, please refer to paragraph 2.2 and paragraphs 2.3 to 2.9 of this Part IV and to the CREST Manual for further information on the CREST procedures referred to below.

If you are a Qualifying Non-CREST Shareholder or Qualifying CREST Shareholder with a registered address in the US or any of the Excluded Territories, please refer in particular to paragraph 2.6 of this Part IV, which sets out information for Overseas Shareholders.

CREST sponsored members should refer to their CREST sponsors, as only their CREST sponsors will be able to take the necessary action speciﬁed below to take up their entitlements or otherwise to deal with the Nil Paid Rights or Fully Paid Rights of CREST sponsored members.

All enquiries in relation to the Provisional Allotment Letters should be directed to the Registrar between 8.30 a.m. and 5.30 p.m on any Business Day on 0870 707 1421 (from inside the UK) or +44 870 707 1421 (from outside the UK). Calls to the Registrar’s 0870 707 1421 number are charged at 8p per minute (including VAT) from a BT landline. Other service providers’ costs may vary. Calls to the Registrar’s +44 870 707 1421 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. For legal reasons, the Registrar will be unable to give advice on the merits of the Rights Issue or the Acquisition or to provide legal, business, ﬁnancial, tax or investment advice.

50 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 2.1 Action to be taken by Qualifying Non-CREST Shareholders in relation to the Nil Paid Rights represented by Provisional Allotment Letters 2.1.1 General The Provisional Allotment Letters are expected be despatched to Qualifying Non-CREST Shareholders on 30 December 2010. The Provisional Allotment Letter, which constitutes a temporary document of title, will set out: (a) the holding at the Record Date of Existing Ordinary Shares in certificated form on which a Qualifying Non-CREST Shareholder’s entitlement to New Ordinary Shares has been based; (b) the aggregate number of New Ordinary Shares in certificated form which have been provisionally allotted to that Qualifying Non-CREST Shareholder; (c) the procedures to be followed if a Qualifying Non-CREST Shareholder wishes to dispose of all or part of his entitlement or to convert all or part of his entitlement into uncertificated form; and (d) instructions regarding acceptance and payment, consolidation, splitting and registration of renunciation. On the basis that Provisional Allotment Letters are posted on 30 December 2010, and that dealings in Nil Paid Rights commence on 31 December 2010, the latest time and date for acceptance and payment in full will be 11.00 a.m. on 17 January 2011. If the Rights Issue is delayed so that Provisional Allotment Letters cannot be despatched on 30 December 2010, the expected timetable, as set out at the front of this document, will be adjusted accordingly and the revised dates will be set out in the Provisional Allotment Letter and announced through a Regulatory Information Service. All references in this Part IV should be read as being subject to such adjustment.

2.1.2 Procedure for acceptance and payment (a) Qualifying Non-CREST Shareholders who wish to accept in full Holders of Provisional Allotment Letters who wish to take up all of their entitlements must return the Provisional Allotment Letter, in accordance with the instructions thereon, together with a cheque or banker’s draft in pounds sterling, made payable to ‘‘Yule Catto & Co plc Rights Issue’’ and crossed ‘‘A/C payee only’’, for the full amount payable on acceptance, by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE so as to arrive as soon as possible and in any event so as to be received no later than the latest time for acceptance and payment in full stated in the Provisional Allotment Letter, which is 11.00 a.m. on 17 January 2011. If you post the Provisional Allotment Letter within the UK by ﬁrst class post, it is recommended that you allow at least four days for delivery. A reply-paid envelope will be enclosed with the Provisional Allotment Letter for use within the UK only for this purpose.

(b) Qualifying Non-CREST Shareholders who wish to accept in part Holders of Provisional Allotment Letters who wish to take up some but not all of their Nil Paid Rights and wish to sell some or all of those rights which they do not want to take up, should ﬁrst apply for split Provisional Allotment Letters by completing Form X on the Provisional Allotment Letter and returning it, together with a covering letter stating the number of split Provisional Allotment Letters required and the number of Nil Paid Rights or Fully Paid Rights (if appropriate) to be comprised in each split Provisional Allotment Letter, by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE by 3.00 p.m. on 13 January 2011, the last date and time for splitting Nil Paid Rights or Fully Paid Rights. The Provisional Allotment Letter will then be cancelled and exchanged for the split Provisional Allotment Letters required.

51 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Such holders of Provisional Allotment Letters should then deliver the split Provisional Allotment Letter representing the rights they wish to take up together with a cheque or banker’s draft in pounds sterling for this number of rights, payable to ‘‘Yule Catto & Co plc Rights Issue’’ and crossed ‘‘A/C payee only’’ to arrive by 11.00 a.m. on 17 January 2011, the last date and time for acceptance. The further split Provisional Allotment Letters (representing the New Ordinary Shares the Shareholder does not wish to take up) will be required in order to sell those rights not being taken up. Alternatively, Qualifying Non-CREST Shareholders who wish to take up some of their rights, without selling or transferring the remainder, should complete Form X on the original Provisional Allotment Letter and return it, together with a covering letter conﬁrming the number of rights to be taken up and a cheque or banker’s draft in pounds sterling to pay for this number of New Ordinary Shares, by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE. In this case, the Provisional Allotment Letter and payment must be received by Computershare by 3.00 p.m. on 13 January 2011, the last date and time for splitting Nil Paid Rights.

(c) Company’s discretion as to validity of acceptances If payment is not received in full by 11.00 a.m. on 17 January 2011, the provisional allotment will (unless the Group has exercised its right to treat as valid an acceptance as set out herein) be deemed to have been declined and will lapse. The Company may elect, with the agreement of the Joint Bookrunners, but shall not be obliged, to treat as valid Provisional Allotment Letters and accompanying remittances which are received through the post not later than 10.00 a.m. on 18 January 2011 (the cover bearing a legible postmark not later than 11.00 a.m. on 17 January 2011). The Company may also (in its sole discretion) treat a Provisional Allotment Letter as valid and binding on the person(s) by whom or on whose behalf it is lodged even if not completed in accordance with the relevant instructions or not accompanied by a valid power of attorney where required. The Company reserves the right to treat as invalid any acceptance or purported acceptance of the New Ordinary Shares that appears to the Company to have been executed in, dispatched from, or that provided an address for delivery of deﬁnitive share certiﬁcates for New Ordinary Shares in, the US or an Excluded Territory. A Qualifying Non-CREST Shareholder who makes a valid acceptance and payment in accordance with this paragraph 2 is deemed to request that the New Ordinary Shares to which they will become entitled be issued to them on the terms set out in this document and subject to the Articles of Association of the Company.

(d) Payments All payments must be in pounds sterling and made by cheque or banker’s draft made payable to ‘‘Yule Catto & Co plc Rights Issue’’ and crossed ‘‘A/C payee only’’. Cheques or banker’s drafts must be drawn on a bank or building society or branch of a bank or building society in the UK or Channel Islands which is either a settlement member of the Cheque and Credit Clearing Group Limited or the CHAPS Clearing Group Limited or which has arranged for its cheques and banker’s drafts to be cleared through the facilities provided by any of those companies or committees and must bear the appropriate sort code in the top right-hand corner. Third party cheques will not be accepted with the exception of building society cheques or banker’s drafts where the building society or bank has conﬁrmed the name of the account holder by stamping or endorsing the cheque or draft to such effect. The account name should be the same as that shown on the application. Post-dated cheques will not be accepted. Cheques or banker’s drafts will be presented for payment upon receipt. The Joint Bookrunners and the Company reserve the right to instruct Computershare to seek special clearance of cheques and banker’s drafts to allow value to be obtained for remittances at the earliest

52 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS opportunity. Interest will not be paid on payments made before they are due but will accrue for the beneﬁt of the Company. It is a term of the Rights Issue that cheques shall be honoured on ﬁrst presentation and the Company may elect to treat as invalid acceptances in respect of which cheques are not so honoured. All documents, cheques and banker’s drafts sent through the post will be sent at the risk of the sender. Payments via CHAPS, BACS or electronic transfer will not be accepted.

If the New Ordinary Shares have already been allotted to a Qualifying Non-CREST Shareholder prior to any payment not being so honoured upon ﬁrst presentation or such acceptances being treated as invalid, the Company and the Joint Bookrunners may (in their absolute discretion as to manner, timing and terms) make arrangements for the sale of such New Ordinary Shares on behalf of such Qualifying Non-CREST Shareholders and hold the proceeds of sale (net of the Company’s reasonable estimate of any loss it has suffered as a result of the same and of the expenses of the sale, including, without limitation, any stamp duty or SDRT payable on the transfer of such New Ordinary Shares, and of all amounts payable by such Qualifying Non-CREST Shareholders pursuant to the terms of the Rights Issue in respect of the acquisition of such New Ordinary Shares) on behalf of such Qualifying Non-CREST Shareholders. None of the Company or the Joint Bookrunners or any other person shall be responsible for, or have any liability for, any loss, expense or damage suffered by such Qualifying Non- CREST Shareholders as a result.

2.1.3 Money Laundering Regulations It is a term of the Rights Issue that to ensure compliance with the Money Laundering Regulations, the Registrar may require verification of the identity of the person by whom or on whose behalf a Provisional Allotment Letter is lodged with payment (which requirements are referred to below as the ‘‘verification of identity requirements’’). The person(s) (the ‘‘acceptor’’) who, by lodging a Provisional Allotment Letter with payment, as described above, accept(s) the allotment of the New Ordinary Shares (the ‘‘relevant shares’’) comprised in such Provisional Allotment Letter (being the provisional allottee or, in the case of renunciation, the person named in such Provisional Allotment Letter) shall thereby be deemed to agree to provide the Registrar and/or the Company with such information and other evidence as they or either of them may require to satisfy the verification of identity requirements.

If the Registrar determines that the verification of identity requirements apply to an acceptance of an allotment and the verification of identity requirements have not been satisfied (which the Registrar shall in its absolute discretion determine) by 11.00 a.m. on 17 January 2011, the Company may, in its absolute discretion, and without prejudice to any other rights of the Company, treat the acceptance as invalid or may confirm the allotment of the relevant shares to the acceptor but (notwithstanding any other term of the Rights Issue) such shares will not be issued to him or registered in his name until the verification of identity requirements have been satisfied (which the Registrar shall in its absolute discretion determine). If the acceptance is not treated as invalid and the verification of identity requirements are not satisfied within such period, being not less than seven days after a request for evidence of identity is despatched to the acceptor, as the Company may in its absolute discretion allow, the Company will be entitled to make arrangements (in its absolute discretion as to manner, timing and terms) to sell the relevant shares (and for that purpose the Company will be expressly authorised to act as agent of the acceptor). Any proceeds of sale (net of expenses) of the relevant shares which shall be issued to and registered in the name of the purchaser(s) or an amount equivalent to the original payment, whichever is the lower, will be held by the Company on trust for the acceptor, subject to the requirements of the Money Laundering Regulations. The Registrar is entitled in its absolute discretion to determine whether the verification of identity requirements apply to any acceptor and whether such requirements have been satisfied. None of the Company, the Registrar or the Joint Bookrunners will be liable to any person for any loss suffered or incurred as a result of the exercise of any such discretion or as a result of any sale of relevant shares.

53 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Return of a Provisional Allotment Letter with the appropriate remittance will constitute a warranty from the acceptor that the Money Laundering Regulations will not be breached by acceptance of such remittance. If the verification of identity requirements apply, failure to provide the necessary evidence of identity may result in your acceptance being treated as invalid or in delays in the despatch of a receipted fully paid Provisional Allotment Letter or a share certificate. The verification of identity requirements will not usually apply: (a) if the acceptor is an organisation required to comply with the Money Laundering Directive 2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing; or (b) if the acceptor is a regulated UK broker or intermediary acting as agent and is itself subject to the Money Laundering Regulations; or (c) if the acceptor (not being an acceptor who delivers his acceptance in person) makes payment by way of a cheque drawn on an account in the name of such acceptor; or (d) if the aggregate subscription price for the relevant shares is less than c15,000 or its pounds sterling equivalent. Where the verification of identity requirements apply, please note the following as this will assist in satisfying the requirements. Satisfaction of the verification of identity requirements may be facilitated in the following ways: (i) if payment is made by cheque or banker’s draft in pounds sterling drawn on a branch in the UK of a bank or building society and bears a UK bank sort code number in the top right-hand corner, the following applies. Cheques should be made payable to ‘‘Yule Catto & Co plc Rights Issue’’ and crossed ‘‘A/C payee only’’. Third party cheques will not be accepted with the exception of building society cheques or banker’s drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the building society cheque/ banker’s draft to such effect. The account name should be the same as that shown on the application; (ii) if the Provisional Allotment Letter is lodged with payment by an agent which is an organisation of the kind referred to in (a) above or which is subject to anti-money laundering regulation in a country which is a member of the Financial Action Task Force (the non-European Union members of which are Argentina, Australia, Brazil, Canada, Hong Kong, Iceland, Japan, Mexico, New Zealand, Norway, the Russian Federation, Singapore, South Africa, Switzerland, Turkey, the US and, by virtue of their membership of the Gulf Co-operation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), the agent should provide written confirmation with the Provisional Allotment Letter that it has that status and a written assurance that it has obtained and recorded evidence of the identity of the persons for whom it acts and that it will on demand make such evidence available to the Registrar or the relevant authority; or (iii) if the Provisional Allotment Letter is lodged by hand by the acceptor in person, he should ensure that he has with him evidence of identity bearing his photograph (for example, his passport) and evidence of his address from an appropriate third party, for example, a recent bill from a gas, electricity or telephone company or a bank statement, in each case bearing the acceptor’s address. In order to confirm the acceptability of any written assurance referred to in (ii) above or any other case, the acceptor should contact the Registrar.

2.1.4 Dealings in Nil Paid Rights Assuming the Rights Issue becomes unconditional, dealings on the London Stock Exchange in the Nil Paid Rights are expected to commence at 8.00 a.m. on 31 December 2010. A transfer of Nil Paid Rights can be made by renunciation of the Provisional Allotment Letter in accordance with the instructions printed on it and delivery of the letter to the transferee. The latest time and date for registration of renunciation of Provisional Allotment Letters, nil paid, is expected to be 11.00 a.m. on 17 January 2011.

54 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 2.1.5 Dealings in Fully Paid Rights After acceptance of the provisional allotment and payment in full in accordance with the provisions set out in this document and the Provisional Allotment Letter, the Fully Paid Rights may be transferred by renunciation of the relevant Provisional Allotment Letter and delivering it, by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE by not later than 11.00 a.m. on 17 January 2011. To do this, Qualifying Non-CREST Shareholders will need to have their fully paid Provisional Allotment Letters returned to them after acceptance has been effected by Computershare. However, fully paid Provisional Allotment Letters will not be returned to Shareholders unless their return is requested by ticking the appropriate box on the Provisional Allotment Letter. After 17 January 2011, the New Ordinary Shares will be in registered form and transferable in the usual way (see paragraph 2.1.10 below).

2.1.6 Renunciation and splitting of Provisional Allotment Letters Qualifying Non-CREST Shareholders who wish to transfer all of their Nil Paid Rights or, after acceptance of the provisional allotment and payment in full, Fully Paid Rights comprised in a Provisional Allotment Letter may (save as required by the laws of certain overseas jurisdictions) renounce such allotment by completing and signing Form X on the Provisional Allotment Letter (if it is not already marked ‘‘Original Duly Renounced’’) and passing the entire Provisional Allotment Letter to their stockbroker or bank or other appropriate ﬁnancial adviser or to the transferee. Once a Provisional Allotment Letter has been renounced, the letter will become a negotiable instrument in bearer form and the Nil Paid Rights or Fully Paid Rights (as appropriate) comprised in the Provisional Allotment Letter may be transferred by delivery of the Provisional Allotment Letter to the transferee. The latest time and date for registration of renunciation of Provisional Allotment Letters, fully paid, is 11.00 a.m. on 17 January 2011. If a holder of a Provisional Allotment Letter wishes to have only some of the New Ordinary Shares registered in his name and to transfer the remainder, or wishes to transfer all the Nil Paid Rights or (if appropriate) Fully Paid Rights but to different persons, he may have the Provisional Allotment Letter split, for which purpose he or his agent must complete and sign Form X on the Provisional Allotment Letter. The Provisional Allotment Letter must then be delivered by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE by not later than 3.00 p.m. on 13 January 2011, to be cancelled and exchanged for the split Provisional Allotment Letters required. The number of split Provisional Allotment Letters required and the number of Nil Paid Rights or (as appropriate) Fully Paid Rights to be comprised in each split letter should be stated in an accompanying letter. Form X on split Provisional Allotment Letters will be marked ‘‘Original Duly Renounced’’ before issue. The Company reserves the right to refuse to register any renunciation in favour of any person in respect of which the Company believes such renunciation may violate applicable legal or regulatory requirements, including (without limitation) any renunciation in the name of any person with an address outside the UK. Alternatively, Qualifying Non-CREST Shareholders who wish to take up some of their rights, without transferring the remainder, should complete Form X on the original Provisional Allotment Letter and return it, together with a covering letter conﬁrming the number of rights to be taken up and a cheque or banker’s draft in pounds sterling to pay for this number of New Ordinary Shares, by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE. In this case, the Provisional Allotment Letter and payment must be received by Computershare by 11.00 a.m. on 17 January 2011.

55 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 2.1.7 Registration in names of Qualifying Shareholders A Qualifying Shareholder who wishes to have all his entitlement to New Ordinary Shares registered in his name must accept and make payment for such New Ordinary Shares in accordance with the provisions summarised in this document and set out in the Provisional Allotment Letter but need take no further action. A share certiﬁcate is expected to be sent to him by post by not later than 25 January 2011.

2.1.8 Registration in names of persons other than Qualifying Shareholders originally entitled In order to register Fully Paid Rights in certiﬁcated form in the name of someone other than the Qualifying Shareholders(s) originally entitled, the renouncee or his agent(s) must complete Form Y on the Provisional Allotment Letter (unless the renouncee is a CREST member who wishes to hold such New Ordinary Shares in uncertiﬁcated form, in which case Form X and the CREST Deposit Form must be completed (see paragraph 2.2 below)) and deliver the entire Provisional Allotment Letter, when fully paid, by post to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE by not later than the latest time for registration of renunciations, which is expected to be 11.00 a.m. on 17 January 2011. Registration cannot be effected unless and until the New Ordinary Shares comprised in a Provisional Allotment Letter are fully paid.

The New Ordinary Shares comprised in several renounced Provisional Allotment Letters may be registered in the name of one holder (or joint holders) if Form Y on the Provisional Allotment Letter is completed on one Provisional Allotment Letter (the ‘‘Principal Letter’’) and all the Provisional Allotment Letters are delivered in one batch. Details of each Provisional Allotment Letter (including the Principal Letter) should be listed in the Consolidated Listing Form adjacent to Forms X and Y of the Principal Letter and the allotment number of the Principal Letter should be entered in the space provided on each of the other Provisional Allotment Letters.

2.1.9 Deposit of Nil Paid Rights or Fully Paid Rights into CREST The Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter may be converted into uncertiﬁcated form, that is, deposited into CREST (whether any such conversion arises as a result of a renunciation of those rights or otherwise). Similarly, Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certiﬁcated form, that is, withdrawn from CREST. Subject as provided in the next paragraph (or in the Provisional Allotment Letter), normal CREST procedures (including timings) apply in relation to any such conversion. You are recommended to refer to the CREST Manual for details of such procedures.

The procedure for depositing the Nil Paid Rights represented by the Provisional Allotment Letter into CREST, whether such rights are to be converted into uncertificated form in the name(s) of the person(s) whose name(s) and address appear(s) on page 1 of the Provisional Allotment Letter or in the name of a person or persons to whom the Provisional Allotment Letter has been renounced, is as follows: Form X and the CREST Deposit Form (both in the Provisional Allotment Letter) will need to be completed and the Provisional Allotment Letter deposited with the CCSS. In addition, the normal CREST Stock Deposit procedures will need to be carried out, except that (a) it will not be necessary to complete and lodge a separate CREST Transfer Form (prescribed under the Stock Transfer Act 1963) with the CCSS and (b) only the whole of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter may be deposited into CREST. If you wish to deposit some only of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter into CREST, you must first apply for split Provisional Allotment Letters by following the instructions in paragraph 2.1.6 above. If the rights represented by more than one Provisional Allotment Letter are to be deposited, the CREST Deposit Form on each Provisional Allotment Letter must be completed and deposited. The Consolidated Listing Form (as defined in the Regulations) must not be used.

56 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS A holder of Nil Paid Rights (or, if appropriate, the Fully Paid Rights) represented by a Provisional Allotment Letter who is proposing to convert those rights into uncertiﬁcated form (whether following a renunciation of such rights or otherwise) is recommended to ensure that the conversion procedures are implemented in sufﬁcient time to enable the person holding or acquiring the Nil Paid Rights (or, if appropriate, the Fully Paid Rights) in CREST following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 17 January 2011. In particular, having regard to processing times in CREST and on the part of Computershare, the latest recommended time for depositing a renounced Provisional Allotment Letter (with Form X and the CREST Deposit Form in the Provisional Allotment Letter duly completed) with the CCSS (in order to enable the person acquiring the Nil Paid Rights (or, if appropriate, the Fully Paid Rights) in CREST as a result of the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 17 January 2011) is 3.00 p.m. on 12 January 2011. When Form X and the CREST Deposit Form (both in the Provisional Allotment Letter) have been completed, the title to the Nil Paid Rights or the Fully Paid Rights represented by the Provisional Allotment Letters will cease to be renounceable or transferable by delivery and, for the avoidance of doubt, any entries in Form Y will not subsequently be recognised or acted upon by Computershare. All renunciations or transfers of Nil Paid Rights or Fully Paid Rights must be effected through the CREST system once such Nil Paid Rights or Fully Paid Rights have been deposited into CREST. CREST sponsored members should contact their CREST sponsor as only their CREST sponsor will be able to take the necessary action to take up the entitlement or otherwise to deal with the Nil Paid Rights or Fully Paid Rights of the CREST sponsored member.

2.1.10 Issue of New Ordinary Shares in definitive form Definitive share certificates in respect of the New Ordinary Shares to be held in certificated form are expected to be despatched by post by 25 January 2011 at the risk of the persons entitled thereto to Qualifying Non-CREST Shareholders (or their transferees who hold Fully Paid Rights in certificated form), or in the case of joint holdings, to the first-named Shareholders, at their registered address (unless lodging agent details have been completed on the Provisional Allotment Letter). After despatch of the definitive share certificates, Provisional Allotment Letters will cease to be valid for any purpose whatsoever. Pending despatch of definitive share certificates, instruments of transfer of the New Ordinary Shares will be certified by Computershare against the register.

2.1.11 Posting All documents and cheques posted by Shareholders or renouncees or their agent(s) will be posted at their risk.

2.2 Action to be taken in relation to Nil Paid Rights in CREST 2.2.1 General It is expected that each Qualifying CREST Shareholder will receive a credit to his CREST stock account of his entitlement to Nil Paid Rights on 31 December 2010 (subject as provided in paragraph 2.6 of this Part IV in relation to certain Overseas Shareholders). The CREST stock account to be credited will be an account under the participant ID and member account ID that apply to the Existing Ordinary Shares in uncertiﬁcated form held on the Record Date by the Qualifying CREST Shareholder in respect of which the Nil Paid Rights are provisionally allotted. The Nil Paid Rights will constitute a separate security for the purposes of CREST and can accordingly be transferred, in whole or in part, by means of CREST in the same manner as any other security that is admitted to CREST. If, for any reason, it is impracticable to credit the stock accounts of Qualifying CREST Shareholders, or to enable the Nil Paid Rights by 8.00 a.m. on 31 December 2010, Provisional Allotment Letters shall, unless the Company and the Joint Bookrunners determine otherwise, be sent out in substitution for the Nil Paid Rights which have not been so credited or enabled and the expected timetable as set out in this document will be adjusted as appropriate. References to dates and times in this document should be read as

57 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS subject to any such adjustment. The Company will make an appropriate announcement to a Regulatory Information Service giving details of any revised dates but Qualifying CREST Shareholders may not receive any further written communication. CREST members who wish to take up all or some of their entitlements in respect of, or otherwise to transfer their, Nil Paid Rights or Fully Paid Rights held by them in CREST should refer to the CREST Manual for further information on the CREST procedures referred to below. If you are a CREST sponsored member, you should consult your CREST sponsor if you wish to take up your entitlement, as only your CREST sponsor will be able to take the necessary action to take up your entitlements or otherwise to deal with your Nil Paid Rights or Fully Paid Rights.

2.2.2 Procedure for acceptance and payment (a) MTM instructions CREST members who wish to take up all or part of their entitlement in respect of Nil Paid Rights in CREST must send (or, if they are CREST sponsored members, procure that their CREST sponsor sends) an MTM instruction to Euroclear which, on its settlement, will have the following effect: (i) the crediting of a stock account of Computershare, under the participant ID and member account ID specified below, with the number of Nil Paid Rights to be taken up; (ii) the creation of a settlement bank payment obligation (as defined in the CREST Manual), in accordance with the RTGS payment mechanism (as defined in the CREST Manual), in favour of the RTGS settlement bank of Computershare in pounds sterling, in respect of the full amount payable on acceptance in respect of the Nil Paid Rights referred to in paragraph 2.2.2(a)(i) above; and (iii) the crediting of a stock account of the accepting CREST member (being an account under the same participant ID and member account ID as the account from which the Nil Paid Rights are to be debited on settlement of the MTM instruction) of the corresponding number of Fully Paid Rights to which the CREST member is entitled on taking up his Nil Paid Rights referred to in paragraph 2.2.2(a)(i) above.

(b) Contents of MTM instructions The MTM instruction must be properly authenticated in accordance with Euroclear’s speciﬁcations and must contain, in addition to the other information that is required for settlement in CREST, the following details: (i) the number of Nil Paid Rights to which the acceptance relates; (ii) the participant ID of the accepting CREST member; (iii) the member account ID of the accepting CREST member from which the Nil Paid Rights are to be debited; (iv) the participant ID of Computershare, in its capacity as a CREST receiving agent. This is 3RA06; (v) the member account ID of Computershare, in its capacity as a CREST receiving agent. This is YALTRIPL; (vi) the number of Fully Paid Rights that the CREST member is expecting to receive on settlement of the MTM instruction. This must be the same as the number of Nil Paid Rights to which the acceptance relates; (vii) the amount payable by means of the CREST assured payment arrangements on settlement of the MTM instruction. This must be the full amount payable on acceptance in respect of the number of Nil Paid Rights referred to in paragraph 2.2.2(b)(i) above; (viii) the intended settlement date. This must be not later than 11.00 a.m. on 17 January 2011; (ix) the Nil Paid Rights ISIN number which is GB00B4XSGG66;

58 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS (x) the Fully Paid Rights ISIN number which is GB00B4VSGT14; (xi) the Corporate Action Number for the Rights Issue. This will be available by viewing the relevant corporate action details in CREST; and (xii) contact name and telephone number in the shared note ﬁeld.

(c) Valid acceptance An MTM instruction complying with each of the requirements as to authentication and contents set out in paragraph 2.2.2(b) above will constitute a valid acceptance where either: (i) the MTM instruction settles by not later than 11.00 a.m. on 17 January 2011; or (ii) at the discretion of the Company (a) the MTM instruction is received by Euroclear by not later than 11.00 a.m. on 17 January 2011, (b) a number of Nil Paid Rights at least equal to the number of Nil Paid Rights inserted in the MTM instruction is credited to the CREST stock member account of the accepting CREST member speciﬁed in the MTM instruction at 11.00 a.m. on 17 January 2011. An MTM instruction will be treated as having been received by Euroclear for these purposes at the time at which the instruction is processed by the Network Providers’ Communications Host (as deﬁned in the CREST Manual) at Euroclear of the network provider used by the CREST member (or by the CREST sponsored member’s CREST sponsor). This will be conclusively determined by the input time stamp applied to the MTM instruction by the Network Providers’ Communications Host.

(d) Representations, warranties and undertakings of CREST members A CREST member or CREST sponsored member who makes a valid acceptance in accordance with this paragraph 2.2.2 represents, warrants and undertakes to the Company, and the Joint Bookrunners that he has taken (or procured to be taken), and will take (or procure to be taken), whatever action is required to be taken by him or by his CREST sponsor (as appropriate) to ensure that the MTM instruction concerned is capable of settlement at 11.00 a.m. on 17 January 2011 (or until such later time and date as the Company and the Joint Bookrunners may determine). In particular, the CREST member or CREST sponsored member represents, warrants and undertakes that, at 11.00 a.m. on 17 January 2011 (or until such later time and date as the Company, and the Joint Bookrunners may determine), there will be sufficient Headroom within the Cap (as those terms are defined in the CREST Manual) in respect of the cash memorandum account to be debited with the amount payable on acceptance to permit the MTM instruction to settle. CREST sponsored members should contact their CREST sponsor if they are in any doubt. If there is insufficient Headroom within the Cap (as those terms are defined in the CREST Manual) in respect of the cash memorandum account of a CREST member or CREST sponsored member for such amount to be debited or the CREST member’s or CREST sponsored member’s acceptance is otherwise treated as invalid and New Ordinary Shares have already been allotted to such CREST member or CREST sponsored member, the Company and the Joint Bookrunners may (in their absolute discretion as to the manner, timing and terms) make arrangements for the sale of such New Ordinary Shares on behalf of that CREST member or CREST sponsored member and hold the proceeds of sale (net of the Group’s reasonable estimate of any loss that it has suffered as a result of the acceptance being treated as invalid and of the expenses of sale including, without limitation, any stamp duty or SDRT payable on the transfer of such New Ordinary Shares, and of all amounts payable by the CREST member or CREST sponsored member pursuant to the Rights Issue in respect of the acquisition of such New Ordinary Shares) on behalf of such CREST member or CREST sponsored member. None of the Company, nor the Joint Bookrunners nor any other person shall be responsible for, or have any liability for, any loss, expense or damage suffered by such CREST member or CREST sponsored member as a result.

59 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS (e) CREST procedures and timings CREST members and CREST sponsors (on behalf of CREST sponsored members) should note that Euroclear does not make available special procedures in CREST for any particular corporate action. Normal system timings and limitations will therefore apply in relation to the input of an MTM instruction and its settlement in connection with the Rights Issue. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST sponsored member, to procure that his CREST sponsor takes) the action necessary to ensure that a valid acceptance is received as stated above by 11.00 a.m. on 17 January 2011. In connection with this, CREST members and (where applicable) CREST sponsors are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

(f) CREST member’s undertaking to pay A CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in this paragraph 2.2.2, (a) undertakes to pay to the Company, or procure the payment to the Company of, the amount payable in pounds sterling on acceptance in accordance with the above procedures or in such other manner as the Company may require (it being acknowledged that, where payment is made by means of CREST RTGS payment mechanism, the creation of an RTGS payment obligation in pounds sterling in favour of the Registrar’s RTGS settlement bank (as deﬁned in the CREST Manual) in accordance with the RTGS payment mechanism shall, to the extent of the obligation so created, discharge in full the obligation of the CREST member (or CREST sponsored member) to pay the amount payable on acceptance) and (b) requests that the Fully Paid Rights and/or New Ordinary Shares to which he will become entitled be issued to him on the terms set out in this document and subject to the Articles of Association of the Company. If the payment obligations of the relevant CREST member or CREST sponsored member in relation to such New Ordinary Shares are not discharged in full and such New Ordinary Shares have already been allotted to the CREST member or CREST sponsored member, the Joint Bookrunners and the Company may (in their absolute discretion as to manner, timing and terms) make arrangements for the sale of such New Ordinary Shares on behalf of the CREST member or CREST sponsored member and hold the proceeds of sale (net of the Group’s reasonable estimate of any loss that has been suffered as a result of the same and of the expenses of the sale, including, without limitation, any stamp duty or SDRT payable on the transfer of such New Ordinary Shares, and of all amounts payable by such CREST member or CREST sponsored member pursuant to the terms of the Rights Issue in respect of the acquisition of such New Ordinary Shares) or an amount equal to the original payment of the CREST member or CREST sponsored member. None of the Company, nor the Joint Bookrunners nor any other person shall be responsible for, or have any liability for, any loss, expense or damage suffered by the CREST member or CREST sponsored member as a result.

(g) Company’s discretion as to rejection and validity of acceptances The Company may agree, in its absolute sole discretion, to: (i) reject any acceptance constituted by an MTM instruction, which is otherwise valid, in the event of breach of any of the representations, warranties and undertakings set out or referred to in this paragraph 2.2.2. Where an acceptance is made as described in this paragraph 2.2.2 which is otherwise valid, and the MTM instruction concerned fails to settle by 11.00 a.m. on 17 January 2011 (or by such later time and date as the Company, and the Joint Bookrunners have determined), the Group shall be entitled to assume, for the purposes of its right to reject an acceptance contained in this paragraph 2.2.2, that there has been a breach of the representations, warranties and undertakings set out or referred to in this paragraph 2.2.2, unless the Company is aware of any reason outside the control of the CREST member or CREST sponsor (as appropriate) concerned for the failure of the MTM instruction to settle;

60 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS (ii) treat as valid (and binding on the CREST member or CREST sponsored member concerned) an acceptance which does not comply in all respects with the requirements as to validity set out or referred to in this paragraph 2.2.2;

(iii) accept an alternative properly authenticated dematerialised instruction from a CREST member or (where applicable) a CREST sponsor as constituting a valid acceptance in substitution for, or in addition to, an MTM instruction and subject to such further terms and conditions as the Company, and the Joint Bookrunners may determine;

(iv) treat a properly authenticated dematerialised instruction (in this sub-paragraph, the ‘‘first instruction’’) as not constituting a valid acceptance if, at the time at which Computershare receives a properly authenticated dematerialised instruction giving details of the first instruction, either the Company or Computershare has received actual notice from Euroclear of any of the matters specified in Regulation 35(5)(a) of the Regulations in relation to the first instruction. These matters include notice that any information contained in the first instruction was incorrect or notice of lack of authority to send the first instruction; and

(v) accept an alternative instruction or notiﬁcation from a CREST member or CREST sponsored member or (where applicable) a CREST sponsor, or extend the time for acceptance and/or settlement of an MTM instruction or any alternative instruction or notiﬁcation if, for reasons or due to circumstances outside the control of any CREST member or CREST sponsored member or (where applicable) CREST sponsor, the CREST member or CREST sponsored member is unable validly to take up all or part of his Nil Paid Rights by means of the above procedures. In normal circumstances, this discretion is only likely to be exercised in the event of an interruption, failure or breakdown of CREST (or of any part of CREST) or on the part of facilities and/or systems operated by Computershare in connection with CREST.

2.2.3 Money Laundering Regulations If you hold your Nil Paid Rights in CREST and apply to take up all or part of your entitlement as agent for one or more persons and you are not a UK or EU regulated person or institution (e.g., a UK ﬁnancial institution), then, irrespective of the value of the application, the Registrar is entitled to take reasonable measures to establish the identity of the person or persons (or the ultimate controller of such person or persons) on whose behalf you are making the application. You must therefore contact the Registrar before sending any MTM instruction or other instruction so that appropriate measures may be taken.

Submission of an MTM instruction which constitutes, or which may on its settlement constitute, a valid acceptance as described above constitutes a warranty and undertaking by the applicant to provide promptly to the Registrar any information the Registrar may specify as being required for the purposes of the veriﬁcation of the identity requirements in the Money Laundering Regulations or FSMA. Pending the provision of such information and other evidence as the Registrar may require to satisfy the veriﬁcation of identity requirements, the Registrar, having consulted with the Group, may take, or omit to take, such action as it may determine to prevent or delay settlement of the MTM instruction. If such information and other evidence of identity has not been provided within a reasonable time, then the Registrar will not permit the MTM instruction concerned to proceed to settlement but without prejudice to the right of the Company, and the Joint Bookrunners to take proceedings to recover any loss suffered by it as a result of failure by the applicant to provide such information and other evidence.

2.2.4 Dealings in Nil Paid Rights in CREST Assuming the Rights Issue becomes unconditional, dealings in the Nil Paid Rights on the London Stock Exchange are expected to commence at 8.00 a.m. on 31 December 2010. A transfer (in whole or in part) of Nil Paid Rights can be made by means of CREST in the

61 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS same manner as any other security that is admitted to CREST. The Nil Paid Rights are expected to be disabled in CREST after the close of CREST business on 17 January 2011.

2.2.5 Dealings in Fully Paid Rights in CREST After acceptance of the provisional allotment and payment in full in accordance with the provisions set out in this document, the Fully Paid Rights may be transferred (in whole or in part) by means of CREST in the same manner as any other security that is admitted to CREST. The last time for settlement of any transfer of Fully Paid Rights in CREST is expected to be 11.00 a.m. on 17 January 2011. The Fully Paid Rights are expected to be disabled in CREST after the close of CREST business on 17 January 2011. After 17 January 2011, the New Ordinary Shares will be registered in the name(s) of the person(s) entitled to them in the Company’s register of members and will be transferable in the usual way (see paragraph 2.2.7 below).

2.2.6 Withdrawal of Nil Paid Rights or Fully Paid Rights from CREST Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certiﬁcated form, that is, withdrawn from CREST. Normal CREST procedures (including timings) apply in relation to any such conversion. The recommended latest time for receipt by Euroclear of a properly authenticated dematerialised instruction requesting withdrawal of Nil Paid Rights or, if appropriate, Fully Paid Rights from CREST is 4.30 p.m. on 11 January 2011, so as to enable the person acquiring or (as appropriate) holding the Nil Paid Rights or, if appropriate, the Fully Paid Rights following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 17 January 2011. You are recommended to refer to the CREST Manual for details of such procedures.

2.2.7 Issue of New Ordinary Shares in CREST Fully Paid Rights in CREST are expected to be disabled in CREST after the close of CREST business on 17 January 2011 (the latest date for settlement of transfers of Fully Paid Rights in CREST). New Ordinary Shares (in deﬁnitive form) will be issued in uncertiﬁcated form to those persons registered as holding Fully Paid Rights in CREST at the close of business on the date on which the Fully Paid Rights are disabled. Computershare will instruct Euroclear to credit the appropriate stock accounts of those persons (under the same participant ID and member account ID that applied to the Fully Paid Rights held by those persons) with their entitlements to New Ordinary Shares with effect from the next Business Day (18 January 2011).

2.2.8 Right to allot/issue in certiﬁcated form Despite any other provision of this document, the Group reserves the right to allot and/or issue any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in certiﬁcated form. In normal circumstances, this right is only likely to be exercised in the event of an interruption, failure or breakdown of CREST (or any part of CREST) or on the part of the facilities and/or systems operated by Computershare in connection with CREST.

2.3 Procedure in respect of rights not taken up and withdrawal rights 2.3.1 Procedure in respect of New Ordinary Shares not taken up If an entitlement to New Ordinary Shares is not validly taken up by 11.00 a.m. on 17 January 2011, in accordance with the procedure laid down for acceptance and payment, then that provisional allotment will be deemed to have been declined and will lapse. The Joint Bookrunners will severally use reasonable endeavours to procure, by not later than 4.30 p.m. on the second Business Day after 17 January 2011, subscribers for all of those New Ordinary Shares not taken up at a price per New Ordinary Share which is at least equal to the aggregate of the Issue Price and the expenses of procuring such subscribers (including any applicable brokerage and commissions and amounts in respect of value added tax). Notwithstanding the above, the Joint Bookrunners may decline or cease to endeavour to procure any such subscribers if, in their opinion, it is unlikely that any such subscribers can be procured at such a price and by such a time or procuring such subscribers would

62 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS give rise to a breach of law. If and to the extent that subscribers for New Ordinary Shares cannot be procured on the basis outlined above, such New Ordinary Shares will be subscribed for by the Underwriters (or their sub-underwriters) at the Issue Price pursuant to the terms of the Underwriting Agreement. Any premium over the aggregate of the Issue Price and the expenses of procuring subscribers (including any applicable brokerage and commissions and amounts in respect of value added tax) shall be paid (subject as provided in this paragraph 2.3): (a) where the Nil Paid Rights were, at the time they lapsed, represented by a Provisional Allotment Letter, to the person whose name and address appeared on the Provisional Allotment Letter; (b) where the Nil Paid Rights were, at the time they lapsed, in uncertificated form, to the person registered as the holder of those Nil Paid Rights at the time of their disablement in CREST; and (c) where an entitlement to New Ordinary Shares was not taken up by an Overseas Shareholder, to that Overseas Shareholder. New Ordinary Shares for which subscribers are procured on this basis will be reallotted to the subscribers and the aggregate of any premiums (being the amount paid by the subscribers after deducting the Issue Price and the expenses of procuring the subscribers, including any applicable brokerage and commissions and amounts in respect of value added tax), if any, will be paid (without interest) to those persons entitled (as referred to above) pro rata to the relevant lapsed provisional allotments, save that amounts of less than £5.00 per holding will not be so paid but will be aggregated and retained for the benefit of the Company. Cheques for the amounts due will be sent by post, at the risk of the person(s) entitled, to their registered addresses (the registered address of the first- named in the case of joint holders), provided that, where any entitlement concerned was held in CREST, the amount due will, unless the Company (in its absolute discretion) otherwise determines, be satisfied by the Company procuring the creation of an assured payment obligation in favour of the relevant CREST member’s (or CREST sponsored member’s) RTGS settlement bank in respect of the cash amount concerned in accordance with the RTGS payment mechanism. Any transactions undertaken pursuant to this paragraph 2.3 or paragraph 2.6.1 below shall be deemed to have been undertaken at the request of the persons entitled to the lapsed provisional allotments or other entitlements and none of the Company, the Joint Bookrunners nor any other person procuring subscribers shall be responsible for any loss or damage (whether actual or alleged) arising from the terms or timing of any such subscription, any decision not to endeavour to procure subscribers or the failure to procure subscribers on the basis so described. Each of the Joint Bookrunners will be entitled to retain any brokerage fees, commissions or other benefits received in connection with these arrangements.

2.3.2 Withdrawal rights Persons who have the right to withdraw their acceptances under Section 87Q(4) of FSMA after a supplementary prospectus (if any) has been published and who wish to exercise such right of withdrawal must do so by sending a written notice of withdrawal, which must include the full name and address of the person wishing to exercise such statutory withdrawal rights and, if such person is a CREST member, the participant ID and the member account ID of such CREST member, to Computershare by facsimile to +44 870 703 6112 and/or by email to [email protected] so as to be received no later than two Business Days after the date on which the supplementary prospectus is published, withdrawal being effective upon receipt of such notice. Alternatively notice of withdrawal may be lodged by hand with (but not posted to) Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE by no later than two Business Days after the date on which the supplementary prospectus was published, withdrawal being effective upon receipt of such notice. Notice of withdrawal given by any other means or which is deposited with or received by Computershare after the expiry of such period will not constitute a valid withdrawal. Furthermore, the Company will not permit the exercise of withdrawal rights after

63 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS payment by the relevant Shareholder of its subscription in full and the allotment of the New Ordinary Shares to such Shareholder becoming unconditional. In such circumstances, Shareholders are advised to consult their professional advisers. Provisional allotments of entitlements to New Ordinary Shares which are the subject of a valid withdrawal notice will be deemed to be declined. Such entitlements to New Ordinary Shares will be subject to the provisions of paragraph 2.3.1 above as if the entitlement had not been validly taken up.

2.4 Yule Catto Share Schemes No further shares will be issued pursuant to the Yule Catto Share Schemes prior to Admission or the completion of the Rights Issue.

2.5 Taxation The information contained in paragraph 15 of Part XI of this document is intended only as a general guide to the current tax position in the UK and Qualifying Shareholders should consult their own tax advisers regarding the tax treatment of the Rights Issue in light of their own circumstances.

2.6 Overseas Shareholders 2.6.1 General Whilst Overseas Shareholders are entitled to participate in the Rights Issue, the making or acceptance of the Rights Issue to or by persons resident in, or who are citizens of, countries other than the UK may be affected by the laws of the relevant jurisdiction. Such persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their Rights. It is the responsibility of all persons (including, without limitation, nominees, custodians, agents and trustees) located or resident outside the UK receiving this document and/or a Provisional Allotment Letter and/or a credit of Nil Paid Rights to a stock account in CREST and wishing to accept the offer of New Ordinary Shares or who have a contractual or legal obligation to forward this document to a jurisdiction outside the UK or who hold Ordinary Shares for the benefit of any such person to satisfy themselves as to full observance of the applicable laws of the territory in which they are located, domiciled or resident for securities laws purposes, including obtaining all necessary governmental or other consents which may be required, observing all other requisite formalities needing to be observed and paying any issue, transfer or other taxes due in such territory. The comments set out in this paragraph 2.6 of this Part IV are intended only as a general guide and any Qualifying Shareholders who are in doubt as to their position should consult their professional adviser without delay. Receipt of this document and/or a Provisional Allotment Letter or the crediting of Nil Paid Rights to a stock account in CREST will not constitute an offer in those jurisdictions in which it would be illegal to make an offer, including to Qualifying Shareholders who are, subject to certain exceptions, in the United States or any other Excluded Territory or with a registered address, or who hold on behalf of or for the account or benefit of persons located in the United States or who hold on behalf of or for the account or benefit of any person on a non-discretionary basis who is in the United States or any state of the United States, and in those circumstances this document and/or the Provisional Allotment Letter should be treated as sent for information only in relation to the General Meeting and should not be copied or redistributed. New Ordinary Shares will be provisionally allotted (nil paid) to all Qualifying Shareholders, including Qualifying Shareholders with registered addresses in the Excluded Territories or who are otherwise located in the United States. However, Provisional Allotment Letters will not be sent to, and Nil Paid Rights will not be credited to CREST accounts of, Qualifying Shareholders with registered addresses in the US or an Excluded Territory, except where the Company and the Joint Bookrunners are satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction.

64 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS No person in any territory other than the UK receiving this document and/or a Provisional Allotment Letter and/or a credit of Nil Paid Rights to a stock account in CREST may treat the same as constituting an offer or invitation to him, nor should he in any event use a Provisional Allotment Letter or deal in Nil Paid Rights or Fully Paid Rights in CREST, unless such an invitation or offer can lawfully be made to him in the relevant territory and the Provisional Allotment Letter, Nil Paid Rights or Fully Paid Rights in CREST can lawfully be used or dealt with without contravention of any unfulﬁlled registration or other legal or regulatory requirements. In such circumstances, this document and the Provisional Allotment Letter are to be treated as sent for information only and should not be copied or redistributed.

Persons (including, without limitation, nominees, custodians agents and trustees) receiving a copy of this document and/or a Provisional Allotment Letter or whose stock account in CREST is credited with Nil Paid Rights or Fully Paid Rights should not, in connection with the Rights Issue, distribute or send the document or transfer Nil Paid Rights or Fully Paid Rights in or into any jurisdiction or to any citizen of any such jurisdiction where to do so would or might contravene local securities laws or regulations. If a Provisional Allotment Letter or credit of Nil Paid Rights or Fully Paid Rights in CREST is received by any person in any such territory (or by the agent or nominee of such a person), he must not seek to take up, renounce or transfer the Nil Paid Rights or Fully Paid Rights referred to in the Provisional Allotment Letter or this document unless the Company determines (in consultation with the Joint Bookrunners) that such actions would not violate applicable legal or regulatory requirements. Any person (including, without limitation, any nominee, custodian trustee or agent) who does forward this document or a Provisional Allotment Letter into or credit Nil Paid Rights or Fully Paid Rights into CREST to be received by a person in any such territory (whether pursuant to a contractual or legal obligation or otherwise) should draw the recipient’s attention to the contents of this paragraph 2.6 of this Part IV. The Company, in consultation with the Joint Bookrunners, reserves the right to treat as invalid any acceptance or purported acceptance of the offer of New Ordinary Shares, or renunciation or purported renunciation of the offer of New Ordinary Shares, and will not be bound to allot, issue or transfer New Ordinary Shares if it (a) appears to the Company or its agents that the form of acceptance or renunciation has been executed or effected in or despatched from the United States or any other Excluded Territory, by or for the account of a person located in the United States, or otherwise in a manner which may involve a breach of the laws of any jurisdiction or if it believes the same may violate any applicable legal or regulatory requirement; (b) in the case of a Provisional Allotment Letter, provides an address in the United States or an Excluded Territory or any other jurisdiction outside the UK in which the Company believes it would be unlawful to deliver deﬁnitive share certiﬁcates for the New Ordinary Shares; (c) in the case of a credit of Nil Paid Rights held in CREST, to a CREST member or CREST sponsored member whose registered address is in the United States or any of the other Excluded Territory; or (d) purports to exclude any of the warranties contained in this Part IV.

The attention of Overseas Shareholders with registered addresses in the United States or any of the Excluded Territories, or persons resident in those countries, is drawn to paragraphs 2.6.2 to 2.6.13 (inclusive) of this Part IV.

The provisions of paragraph 2.5 above will apply to Overseas Shareholders who do not take up New Ordinary Shares provisionally allotted to them or are unable to take up New Ordinary Shares provisionally allotted to them because such action would result in a contravention of applicable law or regulatory requirements. Accordingly, such Shareholders will be treated as Shareholders that have not taken up their entitlement for the purposes of paragraph 2.5 above and the Underwriters will use reasonable endeavours to procure subscribers for the relevant New Ordinary Shares. The net proceeds of such sales (after deduction of expenses) will be paid to the relevant Shareholders pro-rated to their holdings of Existing Ordinary Shares at the Record Date as soon as practicable after receipt, except that individual amounts of less than £5.00 per holding will not be distributed but will be aggregated and retained for the beneﬁt of the Company. None of

65 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS the Company, the Underwriters or any other person shall be responsible or have any liability whatsoever for any loss or damage (actual or alleged) arising from the terms or the timing of the acquisition or the procuring of it or any failure to procure subscribers. Despite any other provisions of this document or the Provisional Allotment Letter, the Company and the Joint Bookrunners reserve the right to permit any Qualifying Shareholder to take up his Rights if the Company in its sole and absolute discretion is satisﬁed that the transaction in question is exempt from or not subject to the legislation or regulation giving rise to the restrictions in question. Those Overseas Shareholders who wish, and are permitted, to take up their entitlement should note that payments must be made as described in paragraph 2.1 (Qualifying non-CREST Shareholders) and paragraph 2.2 (Qualifying CREST Shareholders) both of this Part IV above. If you are in any doubt as to your eligibility to accept the offer of New Ordinary Shares or to deal with Nil Paid Rights or Fully Paid Rights, you should contact your professional advisers immediately.

2.6.2 US The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been and will not be registered under the Securities Act or under the laws of any state or other jurisdiction of the United States. None of the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares or the Provisional Allotment Letters may be, directly or indirectly, offered for subscription or purchase, taken up, sold, delivered, renounced or transferred in or into the US except pursuant to an appropriate exemption from the registration requirements of the Securities Act and in compliance with any applicable securities laws of any federal, state or other jurisdiction of the US. The offer by way of rights will be made to all Qualifying Shareholders through a notice in the London Gazette details of which are provided in paragraph 2.6.10 of this Part IV. However, neither this document nor Provisional Allotment Letters will be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST of, any Shareholder with a registered address in the US. The offer is being made outside the United States in offshore transactions, as deﬁned in, and in reliance on, Regulation S. Any person in the United States who obtains a copy of this document or a Provisional Allotment Letter is required to disregard them. Shareholders in the United States and investors who are not eligible to rely on Regulation S will not be able to participate in the Rights Issue unless they meet the legal requirements needed to establish their eligibility to participate in the Rights Issue to the satisfaction of the Company and the Joint Bookrunners. The Company and the Joint Bookrunners have the discretion to refuse to accept any Provisional Allotment Letter that is incomplete, unexecuted or not accompanied by any other required additional documentation. Potential purchasers of the New Ordinary Shares in the US are advised to consult legal counsel prior to making any offer for, resale, pledge or other transfer of such New Ordinary Shares. Until 40 days after the later of the commencement of the Rights Issue or completion of the distribution of New Ordinary Shares pursuant to the Rights Issue, an offer, sale or transfer of the New Ordinary Shares, Nil Paid Rights, Fully Paid Rights or Provisional Allotment Letters within the United States by a dealer (whether or not participating in the Rights Issue) may violate the registration requirements of the Securities Act. No representation has been, or will be, made by the Company or the Joint Bookrunners as to the availability of Rule 144 under the Securities Act or any other exemption under the Securities Act or any state securities laws for the reoffer, pledge or transfer of the New Ordinary Shares.

2.6.3 Australia No prospectus in relation to the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares has been or will be lodged with, or registered by, the Australian Securities Investments Commission. Neither the New Ordinary Shares nor the Provisional

66 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Allotment Letters nor any Nil Paid Rights or Fully Paid Rights held in CREST may be offered for subscription or purchase, taken up, sold, renounced, transferred or delivered, directly or indirectly, nor may any invitation to subscribe for or buy or sell New Ordinary Shares or any Nil Paid Rights or Fully Paid Rights held in CREST be issued or any draft or deﬁnitive document in relation to any such offer, sale or invitation be distributed, in or into Australia or to or for the account or beneﬁt of an Australian Person. Accordingly, no offer of New Ordinary Shares is being made under this document or the Provisional Allotment Letters to Shareholders with registered addresses in, or to residents of, Australia. No Provisional Allotment Letters will be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST of, Qualifying Shareholders who have registered addresses in Australia.

2.6.4 Canada The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been and will not be registered under the securities legislation of any province or territory of Canada. Subject to certain exceptions, none of the Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares will be directly or indirectly offered for subscription or purchase, taken up, sold, delivered, renounced or transferred in or into Canada. Therefore, subject to certain exceptions, the Rights Issue will not be made within Canada and Provisional Allotment Letters not be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in Canada.

2.6.5 South Africa The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been and will not be registered under the securities legislation of any province or territory of South Africa. Subject to certain exceptions, none of the Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares will be directly or indirectly offered for subscription or purchase, taken up, sold, delivered, renounced or transferred in or into South Africa. Therefore, subject to certain exceptions, the Rights Issue will not be made within South Africa and Provisional Allotment Letters not be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in South Africa.

2.6.6 EEA In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a ‘‘Relevant Member State’’) (except for the United Kingdom) an offer to the public of the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares may not be made in that Relevant Member State other than the offers contemplated in this document in the United Kingdom once this document has been approved by the FSA, except that an offer to the public in that Relevant Member State of any Nil Paid Rights, any Fully Paid Rights and the New Ordinary Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than c43,000,000 and (3) an annual net turnover of more than c50,000,000, as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Joint Sponsors for any such offer; or (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

67 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS provided that no such offer of the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an ‘‘offer to the public’’ in relation to any Nil Paid Rights, Fully Paid Rights and New Ordinary Shares in any Relevant Member State means the communication in any form and by any means of sufﬁcient information on the terms of the offer and any Nil Paid Rights, Fully Paid Rights and New Ordinary Shares to be offered so as to enable an investor to decide to purchase any Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

2.6.7 Japan The relevant clearances have not been and will not be obtained under the Financial Instruments and Exchange Law as amended (‘‘FIEL’’) and no prospectus has been or will be lodged with, or registered by, the FIEL. Therefore, subject to certain exceptions, neither the Provisional Allotment Letters nor any Nil Paid Rights or Fully Paid Rights held in CREST nor the New Ordinary Shares may, directly or indirectly, be offered or sold, taken up, or renounced in or into Japan or its territories or possessions. No Provisional Allotment Letter will be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST of, Qualifying Shareholders whose registered address is in Japan.

2.6.8 Switzerland This document does not constitute a prospectus within the meaning of Articles 652a and 1156 of the Swiss Code of Obligations or a listing prospectus according to Article 32 of the Listing Rules of the SWX Swiss Exchange. The Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares will not be listed on the SWX Swiss Exchange and, therefore, this document does not comply with the disclosure standards of the listing rules of the SWX Swiss Exchange. Accordingly, the Nil Paid Rights, Fully Paid Rights and New Ordinary Shares may not be offered to the public in or from Switzerland, but may be offered only to a selected and limited group of investors, who do not subscribe for the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares with a view to distribution to the public. Investors may be individually approached by the Underwriters from time to time. This document is personal to each offeree and does not constitute an offer to any other person. This document may only be used by those persons to whom it has been handed out in connection with the offer described herein and may neither directly nor indirectly be distributed or made available to other persons without the express consent of the Company. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in or from Switzerland.

2.6.9 Malaysia This document is not intended to be and will not be circulated in Malaysia in any manner whatsoever and accordingly no offer nor acceptance pursuant to the terms of this document shall or is intended to be made in Malaysia. The proposed Rights Issue and this document have not been approved or registered with any regulatory authority in Malaysia (including the Malaysian Securities Commission). In accepting this document and/or the proposed Rights Issue, each Shareholder acknowledges and agrees that no such offer is made in Malaysia and that the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have not been and will not be registered under the securities legislation of Malaysia or with the Malaysian Securities Commission. Therefore, subject to certain exceptions, the Rights Issue will not be made within Malaysia and Provisional Allotment Letters not be sent to, nor will any Nil Paid Rights be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in Malaysian.

68 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 2.6.10 Notice in the London Gazette In accordance with section 562(3) of the Companies Act, the offer by way of rights to Qualifying Shareholders who have no registered address in the EEA and who have not given to the Company an address in the EEA for the serving of notices, will be made by the Company causing a notice to be published in the London Gazette on 31 December 2010 stating where copies of this document and the Provisional Allotment Letters may be obtained or inspected on personal application by or on behalf of such Qualifying Shareholders. However, in order to facilitate acceptance of the offer made to such Qualifying Shareholders by virtue of such publication, Provisional Allotment Letters will also be posted to Qualifying Shareholders who are Overseas Shareholders (other than to those, subject to certain exceptions, with registered addresses in, or who are resident in, the United States or any other Excluded Territory). Such Shareholders, if it is lawful to do so, may accept the offer by way of rights either by returning the Provisional Allotment Letter posted to them in accordance with the instructions set out therein or, subject to surrendering the original Provisional Allotment Letter posted to them, by obtaining a copy thereof from the place stated in the notice and returning it in accordance with the instructions set out therein. Similarly, Nil Paid Rights are expected to be credited to stock accounts in CREST of Qualifying CREST Shareholders who are Overseas Shareholders (other than those, subject to certain exceptions, with registered addresses, or who are resident in, the United States or any other Excluded Territory).

2.6.11 Other overseas territories Qualifying Shareholders who have registered or who are resident in, or who are citizens of, other overseas territories should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their Nil Paid Rights and/or Fully Paid Rights and/or New Ordinary Shares under the Rights Issue. Each person to whom the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares or the Provisional Allotment Letters are distributed, offered or sold outside the US (other than US Persons) will be deemed by its subscription for, or purchase of, the Nil Paid Rights, the Fully Paid Rights or New Ordinary Shares to have represented and agreed, on its behalf and on behalf of any investor accounts for which it is subscribing for or purchasing the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares, as the case may be, that: (a) it is not a US Person and it is acquiring the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares from the Company in an ‘‘offshore transaction’’ as deﬁned in Regulation S; and (b) the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have not been offered to it by the Company by means of any ‘‘directed selling efforts’’ as deﬁned in Regulation S.

2.6.12 Representations and warranties relating to Overseas Shareholders (a) Qualifying Non-CREST Shareholders Any person accepting and/or renouncing a Provisional Allotment Letter or requesting registration of the New Ordinary Shares comprised therein represents and warrants to the Company and the Joint Bookrunners that, except where proof has been provided to the Company’s satisfaction that such person’s use of the Provisional Allotment Letter will not result in the contravention of any applicable legal or regulatory requirement in any jurisdiction; (i) such person is not resident in or located in and is not accepting and/or renouncing the Provisional Allotment Letter, or requesting registration of the relevant New Ordinary Shares, from within the US or any of the Excluded Territories; (ii) such person is not resident in or located in any territory in which it is unlawful to acquire, take up or exercise Nil Paid Rights or Fully Paid Rights or to make or accept an offer to subscribe for Fully Paid Rights or New Ordinary Shares or to use the Provisional Allotment Letter in any manner in which such person has used or will use it; (iii) such person is not accepting and/or renouncing a Provisional Allotment Letter, applying to

69 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS acquire, take up or exercise Nil Paid Rights or Fully Paid Rights or acquire New Ordinary Shares for the account of a person who is resident or located in the United States unless (a) the instruction to accept, apply to acquire, take up or exercise or acquire, as the case may be, was received from a person outside the United States and (b) the person giving such instruction has confirmed that (x) it has the authority to give such instruction and (y) either (A) has investment discretion over such account or (B) is an investment manager or investment company and that in the case of each of (A) and (B), is accepting and/or renouncing a Provisional Allotment Letter, applying to acquire, take up or exercise Nil Paid Rights or Fully Paid Rights or acquire New Ordinary Shares, as the case may be, in an ‘‘offshore transaction’’ within the meaning of Regulation S under the US Securities Act and (iv) such person is not acquiring Fully Paid Rights or New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Fully Paid Rights or New Ordinary Shares into US or any Excluded Territory or any territory referred to in paragraph 2.6.12(a)(ii). The Company may treat as invalid any acceptance or purported acceptance of the allotment of New Ordinary Shares comprised in, or renunciation or purported renunciation of, a Provisional Allotment Letter if it (i) appears to the Company to have been executed in or despatched from the US or any Excluded Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction, or if it believes the same may violate any applicable legal or regulatory requirement; (ii) provides an address in the US or any Excluded Territory for delivery of definitive share certificates for New Ordinary Shares (or any jurisdiction outside the UK in which it would be unlawful to deliver such certificates); or (iii) purports to exclude the warranty required by this paragraph 2.6.12. Each subscriber or purchaser acknowledges that the Company and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing representations and agreements, and agrees that if any of the representations and agreements deemed to have been made by such subscriber or purchaser by his subscription for, or purchase of, the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares, as the case may be, are no longer accurate, he shall promptly notify the Company and the Joint Bookrunners. If such subscriber or purchaser is subscribing for or purchasing the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares as a fiduciary or agent for one or more investor accounts, each subscriber or purchaser represents that he has sole investment discretion with respect to each such account and full power to make the foregoing representations and agreements on behalf of each such account.

(b) Qualifying CREST Shareholders A CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in this Part IV represents and warrants to the Company and the Joint Bookrunners that, except where proof has been provided to the Company’s satisfaction that such person’s acceptance will not result in the contravention of any applicable legal or regulatory requirement in any jurisdiction, (i) he is not resident in or located in the US or any of the Excluded Territories, (ii) he is not in any territory in which it is unlawful to acquire, take up or exercise Nil Paid Rights or Fully Paid Rights or to make or accept an offer to subscribe for Fully Paid Rights or New Ordinary Shares; (iii) he is not applying to acquire, take up or exercise Nil Paid Rights or Fully Paid Rights or acquire New Ordinary Shares for the account of a person who is resident or located in the United States unless (a) the instruction to accept, apply to acquire, take up or exercise or acquire, as the case may be, was received from a person outside the United States and (b) the person giving such instruction has conﬁrmed that (x) it has the authority to give such instruction and (y) either (A) has investment discretion over such account or (B) is an investment manager or investment company, and that in the case of each of (A) and (B), is applying to acquire, take up or exercise Nil Paid Rights or Fully Paid Rights or acquire New Ordinary Shares, as the case may be, in an an ‘‘offshore transaction’’ within the meaning of Regulation S under the US Securities Act and (iv) he is not acquiring Fully Paid Rights or New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any

70 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS such Fully Paid Rights or New Ordinary Shares into the US or any Excluded Territory or any territory referred to in paragraph 2.6.5(b)(b). Each subscriber or purchaser acknowledges that the Company and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing representations and agreements, and agrees that if any of the representations and agreements deemed to have been made by such subscriber or purchaser by his subscription for, or purchase of, the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares, as the case may be, are no longer accurate, he shall promptly notify the Company and the Joint Bookrunners. If such subscriber or purchaser is subscribing for or purchasing the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares as a ﬁduciary or agent for one or more investor accounts, each subscriber or purchaser represents that he has sole investment discretion with respect to each such account and full power to make the foregoing representations and agreements on behalf of each such account.

2.6.13 Waiver The provisions of this paragraph 2.6 and of any other terms of the Rights Issue relating to Overseas Shareholders may be waived, varied or modiﬁed as regards speciﬁc Shareholders or on a general basis by the Company in its absolute discretion. Subject to this, the provisions of this paragraph 2.6 supersede any terms of the Rights Issue inconsistent herewith. References in this paragraph 2.6 to Shareholders shall include references to the person or persons executing a Provisional Allotment Letter and, in the event of more than one person executing a Provisional Allotment Letter, the provisions of this paragraph 2.6 shall apply to them jointly and to each of them. The comments set out in this paragraph 2.6 of this Part IV are intended as a guide only and persons located or resident in, or who are citizens of, countries other than the UK should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their rights.

2.7 Times and dates The Company shall, in its discretion and after consultation with its ﬁnancial and legal advisers, be entitled to amend the dates that Provisional Allotment Letters are despatched or dealings in Nil Paid Rights commence or amend or extend the latest date for acceptance under the Rights Issue and all related dates set out in this document and in such circumstances shall notify the UK Listing Authority (and make an announcement on a Regulatory Information Service approved by the UK Listing Authority) and, if appropriate, Shareholders but Qualifying Shareholders may not receive any further written communication. If a supplementary prospectus is issued by the Company two or fewer business days prior to the latest time and date for acceptance and payment in full under the Rights Issue speciﬁed in this document (or such later date as may be agreed between the parties to the Underwriting Agreement), the latest date for acceptance under the Rights Issue shall be extended to the date that is three Business Days after the date of issue of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

2.8 Governing law The terms and conditions of the Rights Issue as set out in this document and the Provisional Allotment Letter and any non-contractual obligation related thereto shall be governed by, and construed in accordance with, English law. The New Ordinary Shares will be created under the Companies Act.

2.9 Jurisdiction The courts of England and Wales are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Rights Issue, this document or the Provisional Allotment Letter (whether, in each case, arising out of or in connection with contractual or non- contractual obligations). By accepting rights under the Rights Issue in accordance with the instruction set out in this document and, in the case of Qualifying non-CREST Shareholders only, the Provisional Allotment Letter, Qualifying Shareholders irrevocably submit to the

71 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS jurisdiction of the courts of England and Wales and waive any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

72 c103902pu040 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART V INFORMATION ON YULE CATTO

1. Introduction Yule Catto is a FTSE 250 chemical manufacturer with assets in Europe, Asia, the Middle East, South Africa and Mexico. Yule Catto supplies manufacturers around the world who use its products in a wide range of end use applications. The Yule Catto Group has three operating divisions. Polymer Chemicals, Yule Catto’s core business, develops and manufactures products used in a wide range of industries and applications such as coatings, adhesives and construction, where they deliver a number of benefits ranging from enhanced waterproofing to binding properties. Polymer Chemicals also supplies to the medical industry natural rubber and synthetic nitrile latex polymers which are used in the manufacture of condoms, catheters and medical and examination gloves. It manufactures from thirteen sites within four geographical regions – Europe, South East Asia, Middle East and South Africa. The core products of Polymer Chemicals are water-based emulsion polymers, based on vinyl acetate and acrylic dispersions, styrene and nitrile butadiene rubber, polyvinyl alcohol/acetate and a number of specialist products. Pharma Chemicals produces a range of over seventy five Active Pharmaceutical Ingredients (‘‘APIs’’) for the generic and ethical pharmaceutical industries from its two manufacturing plants in Spain and one in Mexico. These products are sold to formulators who produce and distribute the drug in its final physical form. The APIs produced by Pharma Chemicals range from anti-bacterial, anti-ulcer and anti-parasitic to heart drugs. Impact Chemicals originally comprised five businesses, four of which were sold during 2008 and 2009. The remaining business, William Blythe Limited, is a supplier of inorganic speciality chemicals based on copper, iodine and tin sourced from its UK manufacturing facility. These products are used in a range of applications such as semiconductor manufacture, pharmaceutical actives, non-toxic flame retardants, safety glass coatings and catalysts. An overview of the Yule Catto Group’s percentage sales in its core market segments and geographic regions for the financial year ended 31 December 2009 is set out below.

% sales for the year ended 31 December Market 2009 Carpet 14.3 Functional Polymers 17.7 Construction & Paints 30.1 Protective Gloves 12.2 Other 25.7

% sales for the year ended 31 December Region 2009 Europe (inc. UK) 50.7 Asia 28.0 Rest of World (inc. USA) 21.3

73 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 2. History and development of the Yule Catto Group The modern Yule Catto was created in 1971 when rubber plantation holder Malaya General Company Limited acquired shipping agent Yule Catto & Co Limited, changing its own name to Yule Catto & Co Limited. Yule Catto has developed into the Yule Catto Group that it is today through a series of acquisitions and disposals with the key recent developments summarised below. In 1998, Yule Catto acquired Holliday Chemical Holdings plc for £256 million, adding pharmaceutical and organic ﬁne chemicals operations, including Uquifa in Spain and Mexico, to its business. The following year, Yule Catto gained full control of Synthomer Limited and Synthomer GmbH, producers of speciality latex, by acquiring the outstanding 50 per cent. equity interest for a cash consideration of US$95 million (approximately £57 million). Subsequently, Yule Catto disposed of its non core building products division, selling its roof lights business for £36.4 million as well as William Cox Plastics Stockholding Limited, Kimmenade Nederland BV and Screenbase Limited, which were sold for a combined consideration of approximately £16.5 million. In 2001, Yule Catto acquired the remaining 50 per cent. equity interest in Harlow Chemical Company Limited for a total consideration of £54.6 million. This investment, in combination with the existing synthetic latex operations of the Yule Catto Group, helped create the Yule Catto Group’s global water-based polymers business. In 2003, Yule Catto acquired Ditar Ridderkerk BV and Ditar Hasselt BV in Holland for c8.2 million. These acquisitions added capacity to the Polymer Chemicals division’s compounding operations in Europe. Between 2003 and 2009 the Yule Catto Group disposed of a number of non-core businesses. This disposal programme included the sale of Holliday Pigments, which produced ultramarine blue pigments, for aggregate consideration of c46 million (approximately £33 million), as well as the disposal of three other businesses previously in Impact Chemicals, and a number of other small disposals.

3. Key strengths of the Yule Catto Group The key strengths of the Yule Catto Group are summarised below.

Exposure to high growth markets In 2009 the Yule Catto Group generated approximately 45 per cent. of its sales in emerging markets, principally in Asia. It is a major European producer of nitrile latex in Malaysia and continues to expand its manufacturing footprint in Asia. Since the majority of polymer chemicals products are aqueous polymers (containing approximately 50 per cent. water), shipping ﬁnished products long distances is generally uneconomical, increasing the importance of a global manufacturing footprint. The Group’s manufacturing presence in Asia, particularly in Malaysia, for NBR provides a signiﬁcant cost and logistical competitive advantage for accessing the South East Asian market. The other end- markets that the Yule Catto Group serves, including paints, adhesives and binders, also have good growth potential.

Market leading supply position in nitrile gloves market The Yule Catto Group is one of the leaders in the global market supplying latex for the manufacturing of nitrile gloves which are primarily used in the health care and hygiene ﬁeld.

Diverse product offering The Yule Catto Group develops and manufactures a diverse range of products and applications that are used in a number of end-markets. Polymer Chemicals, the Group’s core business, develops and manufactures products for use in the coatings, adhesives and construction industries that offer a number of performance benefits from enhanced waterproofing to binding properties. The Group is also a major supplier to the medical industry, where its natural rubber and/or synthetic nitrile latex polymers are used in the manufacture of condoms, catheters and medical and examination gloves. Pharma Chemicals produces a range of over 75 APIs for the generic and ethical pharmaceutical industries from its manufacturing plants in Spain and Mexico. These products are sold to formulators who produce and distribute the drug in its final physical form. APIs produced range from anti- bacterial, anti-ulcer and anti-parasitic to heart drugs and offer exposure to the less economically sensitive medical end-market.

74 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Strong brand and technical expertise The Group has built a strong brand name across its key markets in Europe and Asia. The Group’s business model of focusing on product performance and technical service has earned it a reputation as a leading supplier of high quality polymers among customers in all its targeted industries. The Group works with its customers to develop customised grades of latex and dispersions as and when required.

4. Group strategy The Group’s strategy is focussed on enhancing its product portfolio through innovation and expanding its capacity in growth markets.

Enhance product portfolio through innovation The Group intends to continue to develop and enhance its product portfolio through close cooperation with its customers and strong research and development expertise. For example, in its Polymers Chemicals division, its focus on new product development has resulted in sales of NBR products commercialised within the last two years generating approximately half of all NBR sales in the current year. For Pharma Chemicals, the development and selection of new APIs is a critical component of the Division’s strategy.

Expand capacity in growth markets In Asia, the Group aims to expand its nitrile latex capacity by 40 per cent. and its dispersions capacity by 70 per cent. by the end of 2012. To achieve this expansion, the Group intends to expand its nitrile latex facility in Kluang, Malaysia to meet the increasing demand for synthetic gloves from the medical and hygiene sectors. In addition, the Group is also ﬁnalising a new compound facility in Egypt which should be fully operational in early 2011. The Group is continuing to explore ways to expand its polymer footprint in China. The Acquisition will provide the Group with faster expansion of its nitrile latex production capacity in Asia. Within Pharma Chemicals, the Group recently entered into a sales and marketing joint venture with Synthetics International, a Swiss-based supplier of ethical APIs with manufacturing capacity in China.

5. Structure of the Group’s Operations Yule Catto operates in three operating divisions: Polymer Chemicals, Pharma Chemicals and Impact Chemicals.

Polymer Chemicals Synthetic latex Yule Catto’s synthetic latex offering consists of two distinct product families: xSBR and NBR. In addition, Yule Catto produces small amounts of natural rubber latex in Malaysia. Latex is produced by emulsion polymerisation in a batch, semi batch or continuous process. Hydrocarbon monomers (styrene and butadiene in the case of SBR and acrylonitrile and butadiene in the case of NBR) together with activators, modifiers and other ingredients, are fed into a reactor in combination with water. The reactor temperature is carefully controlled and operates usually between 20˚Cand95˚C. Various additives are included in the reaction mixture to facilitate processing or improve certain properties in the final latex product. The properties of the final latex product depend not only on the mixture of raw materials used, but also on the configuration of the various process parameters (including temperature, pressure, cooling period and mix of additives) under which the polymerisation takes place. xSBR is sold to the speciality segments of the construction, textile and floor coverings markets and is manufactured in two dedicated production plants in Stallingborough in the UK and Langelsheim in Germany. Production capacity at these two plants currently totals 200 kilotons per annum on a wet basis. In construction applications, xSBR is used as an additive in cement and asphalt to improve tensile strength and ductility and enhance resistance to water and other solvents, thereby prolonging the useful life of the asphalt or cement. In textile applications, xSBR is used as a binder for non-woven fabrics such as those used in filters, wipes and home furnishings. xSBR provides the fabric with added softness, stiffness and strength. In addition, xSBR is used in upholstery back-coatings to improve shape and strength.

75 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS In the floor coverings market, xSBR is widely used in the back-coating of carpets where the latex acts as an adhesive for a secondary backing, holding the fibers in place and giving stability and strength to the carpet. Products for the carpet industry are sold both directly to carpet manufacturers (a large number of which are located within the Benelux region) and to intermediaries who provide ready-to- use blends to smaller customers. Nitrile latex products are used in the manufacture of dipped products for medical applications, the largest being protective gloves for medical, industrial and household applications. NBR is manufactured at plants in Kluang, Malaysia, and Stallingborough, United Kingdom. The Yule Catto Group offers a range of NBR products for use in the manufacture of thin walled gloves for medical and laboratory use and heavy duty gloves for household and industrial applications. NBR products are sold globally to gloves manufacturers, including both large diversified medical and consumer goods companies and smaller niche manufacturers. NBR competes with natural rubber in this market. However, a shortage of natural rubber and its potential to cause allergies among some glove wearers is leading to increased substitution by NBR. Yule Catto has recently developed innovative new self-cross linking nitrile latex that eliminates the need for accelerators which can also trigger allergies in glove wearers.

Dispersions The Yule Catto Group produces a range of water-based acrylic and styrene-acrylic dispersions and vinyl acetate dispersions (both PVA and vinyl acetate copolymer products). These dispersions are used in the production of coatings and adhesives with low levels of volatile organic compounds (‘‘VOCs’’). These polymers act as the binder for the coating or adhesive system. In the case of paints, they bind pigments together, thus forming the backbone of the applied coating. The production process for dispersion products involves emulsion polymerisation of hydrocarbon monomers. For acrylic dispersions, the main monomers used are acrylic acid and esters (derived from propylene) along with specialty monomers to impart certain properties in the final coating. Styrene- acrylic dispersions use styrene (a derivative of benzene) and acrylic esters as monomers while vinyl acetate dispersions are produced via emulsion polymerisation of vinyl acetate monomer (a derivative of methanol and ethylene) and co-polymers (usually butyl acrylate or ethylene). As in the case of latex, the polymerisation conditions such as temperature, pressure, cooling period and mix of additives can be used to vary the properties of the final product. Dispersion products are sold predominantly to paint and coatings manufacturers and formulators of adhesives and construction products (such as sealants, fillers and caulks). There is a general trend in the industry towards eliminating all VOCs from coatings and adhesives formulations. Not only do these materials contribute to air pollution, but they also have unfavourable toxicological and odour characteristics. Acrylic, styrene-acrylic and vinyl dispersions contain significantly lower levels of VOCs than solvent borne coatings formulations. The Yule Catto Group’s range of acrylic dispersions includes products for use in emulsion surface coatings, primers, interior and exterior wood varnishes, floor paints and roof coatings. In addition, Yule Catto supplies dispersions for use in adhesives for flooring, wood, packaging and wallpaper applications. Acrylic dispersion products are manufactured at plants in Mouscron in Belgium and Stallingborough in the UK. The Yule Catto Group’s range of styrene-acrylic dispersions is focused on products for use in interior and exterior emulsion paints and roof coatings and also have applications in packaging adhesives. Styrene acrylic dispersions are produced at the Yule Catto Group’s plant at Batley in the UK. Yule Catto’s range of vinyl acetate dispersions includes products for applications in interior and exterior emulsion coatings and adhesives for packaging, tiles and wood, and sealants for construction applications. Vinyl acetate products are manufactured in the Yule Catto Group’s plants in Mouscron in Belgium and Stallingborough in the UK.

Specialties This product family includes: * Polyvinyl alcohol – the Yule Catto Group is a supplier of speciality polyvinyl alcohol which is used as a stabilizer; and

76 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS * Liquid polybutadiene – used in high performance rubber applications such as automotive sealants and electrical encapsulation.

* Alkyds & polyester resins – used in decorative and automotive coatings and adhesives; Liquid polybutadiene is produced at Yule Catto’s plant in Stallingborough in the UK. It is manufactured via the emulsion polymerization of butadiene in the presence of a catalyst. The product has applications as a modiﬁer for other rubber products such as EPDM (used in automotive applications). The Yule Catto Group’s polyvinyl alcohol based products are manufactured in Harlow in the UK, and are used as stabilisers and suspension agents in the production of polyvinyl chloride, a commodity thermoplastic used predominantly in the construction industry (for example in window and door panels and frames). These products help to dissolve the monomer in the reaction solution, thereby aiding the polymerisation process. Alkyds and polyester resins are used extensively in architectural coatings, product ﬁnishes and special- purpose coatings. They are produced via condensation polymerisation of a hydrocarbon derived anhydride or acid (phthalic anhydride is by far the most important) and a complex alcohol (such as pentaerythritol or glycerine).

Customers The ability to work with the technologically leading customers in each segment is key to the long term success of the Polymer Chemicals division. In several major segments there has been a continued consolidation of the customer base, particularly in coatings and construction. The Yule Catto Group is well positioned to take advantage of this consolidation through its long and extensive business relationships in all market segments with leading global players such as Akzo Nobel, PPG, Kimberly Clark, Saint Gobain & Henkel. The Yule Catto Group’s customers generally do not enter into long term contracts but place orders as required with pricing changes occurring on notice.

Suppliers The key raw materials of the Polymer Chemicals division are based on petrochemical feedstocks, predominantly styrene, butadiene, acrylic ester, acrylonirile and vinyl acetate. Several suppliers operate globally but many operate a more regional approach. Polymer Chemicals has long and well- established trading relationships with key suppliers such as Dow, BASF, Arkema, Lyondell Bassell, Ineos, Sabic, Sasol, Lucite, Mitsui and Mitsubishi to ensure continuity of supply and, where deemed important, the ability to establish contracts. Supply contracts are normally entered into by the Yule Catto Group on a yearly basis with price adjustments on a monthly basis.

Pharma Chemicals Uquifa produces a range of over 75 APIs for the generic and ethical pharmaceutical industries from its three manufacturing plants (two in Spain and one in Mexico) which are sold to formulators (usually generic and ethical drug manufacturers) who produce and distribute the drug in its ﬁnal physical form. Generic drugs are those that are produced and distributed without patent protection, usually as a result of the patent on the active ingredient expiring. Uquifa’s product offering for the generic pharmaceutical industry include the following:

* active ingredients for bulk pharmaceuticals including molecules for antiviral, anti-gout, anti- ulcer, anti-fungal, anti-depressant and anti-malarial applications;

* clindamycin for antibiotic applications; and

* active ingredients for antibiotic, anti-parasitic and anthelmintic for bulk veterinary drugs. Uquifa offers custom manufacturing services to the ethical pharmaceutical industry. This involves development of new synthetic routes to targeted APIs and scale-up of laboratory production to a commercial plant. Uquifa also offers services to optimise production processes to reduce isolation steps, improve yield, reduce batch production time and eliminate the use of toxic and/or dangerous reagents. Uquifa recently closed its Italian manufacturing facility, transferring production to lower cost plants in Mexico and Spain.

77 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Uquifa benefits from specialist expertise in a number of difficult chemical processes and reactions, including ozonolysis, sulphur chemistry, hydrogenation, chlorination and nitration. The Company is able to utilise these processes in developing customised synthetic routes to targeted pharmaceutical intermediates. Uquifa is involved in the development of a number of new drugs for cancer treatment and cardiac therapy. Many of the APIs manufactured by Uquifa involve multi-stage production processes and many intermediate products. Uquifa continues to strategically source production of certain intermediates from lower cost Asian producers where this represents a cost advantage over producing intermediates internally. Uquifa sources a large proportion of its raw materials from India and China. Uquifa’s policy is to dual source raw materials and buy some intermediates under long term agreements. The API’s sector is a heavily regulated industry and Uquifa’s plants all operate under the ‘‘good manufacturing practice’’ guidelines for pharmaceutical industry issued by the US Food and Drug Administration. All Uquifa production sites have been inspected and approved by the FDA. Uquifa has an international customer base and many of the major generic and ethical pharmaceutical companies are its customers. No single customer represented more than 10 per cent. of Uquifa’s sales in the financial year ended 31 December 2009 and in all Uquifa has more than 100 customers. Uquifa does have a number of long term customer contracts with pricing set on an annual basis.

Impact Chemicals During 2008 and 2009, Yule Catto disposed of four of the five businesses that previously comprised Impact Chemicals. Brief details of these disposals are set out in paragraph 2 of this Part V. The last remaining Impact Chemicals’ business is William Blythe Limited which produces inorganic salts including specialty iodine derivatives and metal salts based on copper, tin, and zinc. The products have applications in semiconductors, pharma intermediates, crop protection, catalysts, dyes and flame retardants. William Blythe Limited’s copper products include copper iodide, copper chloride, the copper nitrate and copper pyrophosphate. These products have applications in the manufacture of APIs, nutritional supplements as a source of dietary iodine, chemical process catalysts and copper plating. William Blythe Limited’s tin products include tin chloride, stannous oxide, tin tetrachloride, potassium stannate and sodium stannate. These products have applications in textile dyes, chemical process catalysts, flame retardant additives for plastics, inorganic pigments, plating of electronic components and API manufacture. Other important products include potassium iodide (used as a stabilising agent in engineering plastics) and sodium bisulphite (used to prevent the build up of lime scale in boiler water systems) William Blythe Limited’s products are applied and used in a range of industries and many of the business’ customers operate in international markets. The business has focused on strengthening these relationships through technical advice and support. William Blythe sales are managed in accordance with management’s focus on key customers and through a network of agents and distributors. William Blythe Limited also has its own personnel in China for both selling and sourcing raw materials. The Company is one of a limited number of producers of metal salts in Europe.

6. Market and competition Polymer Chemicals’ strategy is to be one of the leading suppliers in each of its chosen market segments. Polymer Chemicals supplies a range of product solutions to the coating and construction, adhesives and sealants and ﬂoor covering industries as well as the more specialist markets of PVC manufacture, synthetic latex glove production and high value automotive applications. Polymer Chemicals has sales in all major geographies with particular emphasis on Europe and Asia, which represented over 78 per cent. of sales in the ﬁnancial year ended 31 December 2009, as well as South Africa, the US and the Middle East, it is strategically well positioned to support these markets with a network of emulsion polymerisation manufacturing operations or partnerships in each region.

7. Research and Development The Group is committed to achieving technological improvement of its business processes and products so that it will be competitive in each of the markets and segments in which it operates.

78 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS All of the Group’s businesses have research or product development capabilities and employ qualified staff focussed on developing the Group’s products to meet customer needs. This includes providing technical support in each business segment and developing new products, which can range from minor modifications of existing products to meet a customer’s specific technical requirements to the introduction of entirely new products to meet a particular industry requirement. Polymer Chemicals employs over 100 scientists and technicians mainly in its three technical centres in Frankfurt in Germany, Harlow in the UK and Kluang in Malaysia. These centres have laboratory and, in some cases, pilot plant facilities with the latter providing a link between the research and development teams and the Group’s large-scale manufacturing facilities. Pharma Chemicals, has a research and development team based at its Spanish Sant Celoni plant which is supported by a team at its facility in Mexico. The Spanish facility has more than 30 research and development staff including 20 PhD chemists and has both laboratory and pilot plant facilities. Finally, Impact Chemicals is supported by technical staff including two PhD chemists whose focus is on product development and providing customers with technical support. The expenditure of the Group for research and development over the three financial years to 31 December 2009 is as follows: Research and development expenditure Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 £9.6 million £10.2 million £7.3 million

8. Intellectual Property The Group relies to a significant degree on its organically generated intellectual property and other proprietary information which helps it maintain its competitive advantage. In particular, non- patentable business secrets and confidential know-how, especially in areas with technically sophisticated products, are important contributors to the success of the Group. This includes the Group’s continually evolving manufacturing process know-how which is often developed in partnership with key customers to ensure the Group can meet the specific technical requirements for relevant customers. Where appropriate and possible, the Group does seek to protect its valuable intellectual property through intellectual property registrations within the various regions in which it operates but its registered intellectual property, with the exception of brand-related intellectual property such as trademarks and trade names, is not material to the Group as a whole. The Group protects its unregistered intellectual property and know-how, mainly through confidentiality arrangements and through its terms of employment with key personnel involved in the research and development activities of the Group.

79 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 9. Manufacturing facilities The Company, across all its divisions, has seventeen manufacturing sites, with five being over 100,000 tonnes/litres in capacity. One of the Company’s largest countries of operation by volume is Malaysia. A list of the Company’s key manufacturing premises is set out below: Location Division Site capacity (volume in kt/kl) South Marsh Road, Stallingborough, Grimsby, North East Polymer 133 Lincs DN41 8DA, United Kingdom Chemicals Innerstetal 2, D-38685 Langelsheim, Germany Polymer 130 Chemicals 11/2 miles Jalan Batu Pahat, 86009 Kluang, Johor, Malaysia Polymer 165 Chemicals Lliça` de Vall plant, polı´gono industrial el Pla, Avda Puigcerda, Pharma 9 C-17, Km 17.4, 08185 Lliça` de Vall (Barcelona), Spain Chemicals 260 Sant Celoni plant, Polı´gon Industrial Molı´ de les Planes, C/ Pharma } Font de Bocs S/N, C-35, KM 57, 08470 Sant Celoni Chemicals (Barcelona), Spain Cuernavaca Plant, Uquifa Me´xico S.A. de C.V., Calle 37 Este Pharma 150 No. 126 – C.P., 62500 Civac, Jiutepec, Morelos – Mexico Chemicals

10. Environmental Given that the Group operates within the heavily regulated chemicals sector, its manufacturing sites and operations are subject to the environmental licensing and permitting regimes in each of the countries in which the Group has operations. In addition to the general regulatory regime governing the environmental impact of the Group’s operations, the Group follows the guidelines for reporting environmental key performance indicators which were published in 2006 by the Department for Environment, Food and Rural Affairs and which encourage reporting on certain key measures including energy use, emissions to air, waste disposal and water consumptions, on an absolute and per tonne basis. Details of the Group’s performance in respect of each of these measures for the three years ending on 31 December 2009 are set out on page 19 of the Annual Report and Accounts for the Group for the year ended 31 December 2009 which are incorporated by reference into this document. Given the nature of the Group’s operations and the sectors in which it operates, the Group reports on its performance on safety, health and environmental matters more generally and the latest report is set out on pages 14 to 20 of the Annual Report and Accounts for the Group for the year ended 31 December 2009 which are incorporated by reference into this document.

11. Insurance The Group maintains insurance coverage which is mostly negotiated on a Group-wide basis and coverage includes, but is not limited to, employer’s liability, property damage and business interruption, public and product liability and motor vehicle liabilities in all of the countries in which the Group operates. Taking into account the nature of the Group’s business, and the risks inherent therein, the Directors are of the opinion that an appropriate level of insurance is maintained to address these risks and that such insurance is comparable with the level of insurance maintained by other businesses operating in the same industry sectors as the Group.

80 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART VI INFORMATION ON POLYMERLATEX

1. Introduction PolymerLatex, together with its subsidiaries, is a leading global player in the development production and distribution of latex products operating in Europe and Asia. Founded in 1996 as a joint-venture between Bayer AG and Degussa AG, the PolymerLatex Group is headquartered in Marl, Germany. In 2003, PolymerLatex was acquired by funds advised by TowerBrook Capital Partners (UK) LLP (‘‘TowerBrook’’). The PolymerLatex Group currently employs approximately 620 employees and generated annual underlying total sales of c386.7 million with an underlying EBITDA of c54.6 million in 2009. The PolymerLatex Group operates through six industry teams which are aligned with the respective market segments it serves, these being paper, carpet, foam, construction & paints, protective gloves and functional polymers (textiles and adhesives). PolymerLatex is one of the leading producers in each of the respective core market segments it serves. The PolymerLatex Group’s operations are supported by a network of modern production facilities, which was recently strengthened by the completion of a new plant in Malaysia, facilitating efﬁciency in manufacturing processes, as well as the further development of ‘‘in-house’’ product and technology know-how. An overview of the PolymerLatex Group’s percentage sales in its core market segments and geographic regions for the ﬁnancial year ended 31 December 2009 is set out below.

% sales for the year ended 31 December Market 2009 Paper 28.8 Carpet 17.4 Functional Polymers 15.4 Foam 13.4 Construction & Paints 13.4 Protective Gloves 11.6

% sales for the year ended 31 December Region 2009 Europe (inc. UK) 76.8 Asia 12.9 Rest of World (inc. USA) 10.3

81 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS A summary of the PolymerLatex Group’s key income statement and cash flow figures for the three financial years ended 31 December 2009 is set out below.

Year ended Year ended Year ended 31 Dec 31 Dec 31 Dec 2009 2008 2007 d000 d000 d000 Underlying Total Sales* 386,670 516,075 493,305 EBITDA 54,573 49,611 62,849 Operating proﬁt 37,161 25,167 42,252

EBITDA margin 14.1% 9.6% 12.7% Cash generated from operations 47,855 47,483 49,178 Free cash ﬂow before dividend 390 11,543 (975)

IFRS Total sales* 386,670 516,075 493,305 EBITDA 40,165 43,906 60,054 Operating proﬁt 12,484 5,408 25,415

EBITDA margin 10.4% 8.5% 12.2% Cash generated from operations 47,855 47,483 49,178 Free cash ﬂow before dividends 390 11,543 (975) *Total Sales includes the PolymerLatex Group’s share of the Finnish joint venture’s revenues An explanation of the differences between the PolymerLatex Group’s results as stated on an IFRS basis and as stated on an underlying basis is set out in paragraph 3.2 of Part VIII.

2. Overview of the PolymerLatex Group’s operations Industry teams Paper Latex is used in coated paper applications, in which the addition of a latex coating contributes to the quality of the end product by providing gloss, smoothness, fibre coverage, stiffness and brightness for various types of paper and board. Furthermore, latex assists the processability and/or runability of the coating colour. xSBR is the dominant binder in the paper industry. The production of synthetic latex for the paper market was the PolymerLatex Group’s largest industry segment in 2009. The paper segment sells predominantly xSBR-based products and limited volumes of SA based products in Europe. Given the PolymerLatex Group’s experience of emulsion polymerization, its application-specific expertise of paper finishing, and recognised flexibility in research and development, application technology, and logistics, the PolymerLatex Group is a preferred partner for joint projects with leading paper manufacturers.

Carpet Synthetic latex is broadly used in carpet production to provide adhesion of secondary backing and carpet precoat impregnation. Typical end-products using latex are tufted carpet, needlefelt, woven carpet and thermo mouldable automotive carpets (all xSBR), as well as foam backing (HS-SBR). Depending on the exact dispersion used, properties such as elasticity, sound absorbency, dimension stability and subsequently comfort and life time of the ﬁnished carpet can be enhanced. This was the PolymerLatex Group’s second largest industry segment in 2009. The team offers HS- SBR-based and xSBR-based products for carpet binding, adhesion of secondary backing and carpet impregnation.

Foam Latex foam is mainly used in mattresses, pillow and manifold cushioning materials, with the entire spectrum of this varied product largely addressed through the use of different HS-SBR grades, in order to apply different degrees of ﬁrmness and elasticity to these products to suit consumer’s needs. Other applications include uses in footwear, such as for inner soles.

82 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS This was the PolymerLatex Group’s fourth largest industry segment in 2009. Europe is the key market in this segment for the PolymerLatex Group. The PolymerLatex Group’s foam products are used in mattresses, pillows, shoes and the moulded foam industry. The products supplied to these industries are mainly HS-SBR grades for the moulded foam industry and xSBR and CR grades for the shoe industry.

Functional polymers (for example, adhesives, textile binders) The functional polymers segment consists of latex and dispersions products for adhesives and textile applications. Adhesives applications include tapes, labels, and envelopes and the main products are PA emulsion and xSBR. Textile comprises of textile ﬁnishing and non-woven products, such as wiping cloth, interlinings and ﬁlter materials. This was the PolymerLatex Group’s third largest industry segment in 2009. A major part of the sales in this segment are generated in Europe and the Middle East. The PolymerLatex Group offers solutions for the packaging, furniture, automobile and textiles industries.

Construction and paints The main products in the construction and paints market are styrene acrylics, pure acrylics and, to a lesser extent, xSBRs. Applications within the construction and paints market include construction chemicals (e.g. modification of cementitious products such as repair mortars or industrial floor screeds), construction adhesives (e.g plaster, tile and flooring adhesives) and especially architectural paints and lacquers. In the latter application, polymer dispersions are mainly used as a binder for other paint ingredients like pigments and fillers and influence factors such as paint workability, adhesion to substrate, tightness and weatherability, thereby providing long term durability in terms of function and optical effects. This was the PolymerLatex Group’s fifth largest industry segment in 2009. PolymerLatex supplies acrylics based products, xSBR, CR and limited volumes of HS-SBR to the market. The majority of volume is supplied to the European market, with Germany representing the largest share. The PolymerLatex Group holds several positions in the market, for example in indoor and outdoor paints and building chemicals. The PolymerLatex Group focusses on the paint, lacquer and building industries.

Protective gloves The end-user applications within protective gloves segment include all types of protective gloves, including medical and examinational, industrial, and household gloves. Furthermore, related products such as balloons or medical devices can be manufactured with CR polymer types. This was the PolymerLatex Group’s sixth largest industry segment in 2009. Latex demand for protective gloves is focused on NBR. Asia and the Indian subcontinent are key target regions for the PolymerLatex Group’s protective gloves industry team. The balance of sales is in an ‘‘other’’ category, which consists of tolling and sidelines.

3. Properties, plant and equipment The PolymerLatex Group operates five production plants with two plants in Marl (Germany), one in Worms (Germany), one in Filago (Italy) and one in Johor Bahru (Malaysia) and one jointly owned production plant with Akzo Nobel Chemicals International B.V in Oulu (Finland). In addition, tolling agreements exist with two further third party owned plants (Dormagen (Germany) and Dubai (UAE)). For Dubai this was in order to produce products where PolymerLatex does not have its own manufacturing assets. In 2009 the production plant in Bromsgrove was mothballed. Between 1996 and 2010, the PolymerLatex Group completed an extensive production network investment programme for the facilities in Marl, Worms, Bromsgrove, Filago, Oulu and Johor Bahru aimed at increasing production process automation, reducing production process cycle time, capturing new markets and upgrading to more modern technology. The PolymerLatex Group is recognised as having state of the art development and production facilities. PolymerLatex benefits from a high degree of standardisation in its production processes in all plants and can flexibly re-deploy production resources depending on market demand.

83 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Production Sites Details of the PolymerLatex Group’s key production sites are set out below.

(JV)

Capacities in Chemistry/Main Sites kt (2010 est.) xSBR HS-SBR Acrylics NBR PSBR Marl (2 plants) 370 HH H Worms 92 H Filago 110 HHH Oulu 140 H Dubai 18 H Johor Bahru 100 H

Marl (Germany) 2 plants (following the full merger of Bunatex and NLP plants) Historically, the PolymerLatex Group operated three plants in Marl: the Bunatex plant, the NLP plant and the Lipolan plant. All the plants are located in the Chemiepark Marl premises. Due to their physical proximity, the Bunatex and the NLP plants were merged entirely to become the BLP plant (Bunatex Latex plant). The organizational and the technical merger resulted in only one control room being responsible for both plants. In addition to the plant merger, the Bunatex plant was also fully automated. The teams in the BLP and Lipolan plants produced xSBR-, HS-SBR-and PSBR-latices for the paper and ﬂoor covering industry and also for the manufacture of moulded foam and tyre cord adhesive.

Worms (Germany) The PolymerLatex Group’s production plant in Worms is located on the premises of Ro¨hm AG and has undergone extensive modernisation, completed in 2002, which resulted in signiﬁcant capacity and efﬁciency increases. The Worms plant focuses exclusively on acrylics.

Filago (Italy) The production plant in Filago, near Bergamo, is logistically well located to serve the Italian market and manufactures xSBR, NBR and other special-purpose lattices for use in the adhesives, constructions, ﬂoor coverings, paper and shoe, as well as dipping industries abroad.

Oulu (Finland) In Oulu, the PolymerLatex Group produces xSBR grades for the Northern European paper industry. The site is operated as a 50/50 joint venture together with Eka Chemicals (a subsidiary of Akzo Nobel Chemicals International B.V) and has a pipeline that feeds directly into the production of one of Europe’s largest paper manufacturer’s plant, on whose premises the site is located.

Dubai (UAE) In Dubai, the PolymerLatex Group is producing acrylate dispersions in cooperation with the company HITECH, for use in adhesives, construction and paints industry.

Malaysia (Johor Bahru) In October 2009 the production site in Pasir Gudang became operational. An output capacity of up to 100 kilotons Nitrile Latex per year is expected to be achieved by the end of 2010 (monthly run- rate). This plant meets local, as well as regional, demand of the growing protective gloves industry.

84 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 4. History and development After its formation as a joint venture in 1996, the PolymerLatex Group’s initial focus was on restructuring its production network to increase productivity and competitiveness. This restructuring included the cessation of production at the PolymerLatex Group’s Leverkusen and Port Jerome plants. In 1998, PolymerLatex secured a long-term contract for the supply of its styrene requirements, the primary material in its polymer dispersions, which underpinned its ability to service the needs of its customer base. During 1998 and 1999, the PolymerLatex Group continued its restructuring exercise by selling both a relatively small production facility in Fitchburg (USA) to Omnova Solutions Inc. and its production site in Durban (South Africa) to Rohm and Haas. These disposals formed part of the PolymerLatex Group’s strategy to focus on Europe. In 2003 PolymerLatex was sold by Bayer AG and Degussa AG to funds managed by Soros Private Equity Partners, now TowerBrook, and there was a restructuring of the PolymerLatex Group’s manufacturing facility in Bromsgrove. During the course of the following three years, the PolymerLatex Group continued to restructure its operations. Additionally, the PolymerLatex Group introduced teams drawn along industry sectors and it opened distribution ofﬁces in France, Spain, USA, United Arab Emirates, China and Malaysia. During this period, the PolymerLatex Group also merged its two latex production facilities in Marl to form one large production facility. This gave the beneﬁts of lower costs, improved interdisciplinary exchanges and the concentration of research and development activities in one location. Additionally, its acrylic tolling arrangement in Dubai commenced, adding further capacity. In 2007 PolymerLatex’s Malaysian subsidiary, PolymerLatex Sdn Bhd, was formed with a view to establishing the PolymerLatex Group’s business in the Asian market. Additionally, Christian Holtmann, Stefan Brandt and Dieter Hesterwerth, who are all currently part of the PolymerLatex Group’s management board, were appointed as new managing directors of the business. In 2008 the PolymerLatex Group commenced construction of its NBR manufacturing plant in Johor Bahru with production commencing in 2009. At the same time as the new facility came on stream in Malaysia, the PolymerLatex Group decided to close its manufacturing facility in Bromsgrove.

5. Market and competition Synthetic latex is used in a wide range of end markets. Geographically, demand is concentrated in developed economies with two-thirds of global latex demand in the North American and European markets. There has been recent merger and acquisition activity in the global latex supplier market. The largest players globally in all regions are BASF, Styron and Dow. The PolymerLatex Group’s key competitors are Styron, BASF, EOC, Yule Catto, Polimeri Europe, Kumho, Goodyear, DOW, Nantex, Nippon Zeon, LG and Celanese.

6. Research and development The PolymerLatex Group is committed to achieving technological improvement of its products so that it will continue to be competitive in each of the markets in which it operates. It recognises the importance of this and has invested appropriately to ensure continual research and development is carried out. The PolymerLatex Group’s integrated research and development function represents a key competitive advantage and its products are recognised for their quality. The PolymerLatex Group’s research and development teams are dedicated to different polymer types. The teams are currently located in Marl and consist of 35 specialised chemists focussed on technology innovation.

7. Intellectual property and process technology The PolymerLatex Group has over 60 years of latex know-how and has developed a cost competitive production network following a period of investment. One of the main technology-related competitive advantages of the PolymerLatex Group is its cost advantage due to its large scale production reactors and in-house developed cooling and mixing technology.

85 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The PolymerLatex Group’s technology supports the innovation process allowing shorter development cycles driven by special process technology scale-up knowledge and the ability of the PolymerLatex Group to transfer new products directly from lab-scale reactors to production reactors. The PolymerLatex Group has transformed this advantage into a strong innovation pipeline, especially with respect to tailor-made high performance products. In addition to its technology and process know-how, the PolymerLatex Group owns 23 patent families. The majority of these patents relate to acrylics, with the remainder relating to HS-SBR, NBR, xSBR and other polymer types. No patents that are considered as crucial for the existing business by the PolymerLatex Group are expiring in the foreseeable future.

8. Marketing The PolymerLatex Group operates a marketing, sales and application service team with the equivalent of 91 full time employees using all varieties of sales channels. All sales employees in management positions as well as the regional staff are incentivised, via their variable salary component, to think entrepreneurially and in terms of proﬁtability.

9. Customers Customer concentration is low on a group level with the top 10 customers generating 32.7 per cent. of total sales volumes in 2009. The PolymerLatex Group experiences stable business development with high customer retention and strong customer loyalty; 61 per cent. of customers have a relationship with the PolymerLatex Group of longer than five years. In addition to maintaining and strengthening its well-diversified customer base, the PolymerLatex Group has been successful in establishing a good reputation among customers for high quality products and highly reliable as well as flexible services across its different products and applications.

10. Distribution The organisation of the logistics and distribution function globally is a key function for the PolymerLatex Group. Given the high water content of these products (approx. 50 per cent.), transportation is commonly performed by tanker-style vehicles, while smaller volumes (less than 5 per cent. of total volumes sold) are shipped in barrels, with overseas transportation of higher margin products by ship. Generally, these products are classified as non-hazardous material whilst being transported. In line with industry standards, the PolymerLatex Group does not own or operate its own vehicle fleet but distributes via a number of third party carriers. Wherever possible, the PolymerLatex Group bundles its freight volumes with high volume purchasers in order to participate in the associated cost advantages. Hence, the flexibility of the production network is a key factor in being able to offer competitive prices and earn attractive margins throughout Europe. In this respect, the PolymerLatex Group’s strategically well-spread production network across Europe (covering Northern Europe, Western Europe, and Southern Europe), in proximity to key customers concentrations, is a major factor for low transportation costs.

11. Employees The PolymerLatex Group’s workforce, including temporary employees, amounted to 613 employees as of 31 December 2009, compared to 555 at the end of the previous year. In 2009 the number of employees within the PolymerLatex Group changed significantly due to the closure of the UK plant in Bromsgrove and the start-up of the Malaysian plant. A summary of the PolymerLatex Group’s management team, who are all based in Marl, is set out below. Dr Christian Holtman is chief executive officer and has been with the PolymerLatex Group since 2003. Detlev Schauwecker is chief financial officer and joined the PolymerLatex Group in 2010. Stefan Brandt is head of marketing, sales and application technology and joined the PolymerLatex Group in 2005. Dr Dieter Hesterwerth is head of production, engineering, research and development and human resources and has held this role within the PolymerLatex Group since 2003.

86 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The PolymerLatex Group has implemented ﬁve performance driven incentive salary systems for blue collar as well as managerial employees. All incentive salary systems are linked to the development of the PolymerLatex Group’s EBITDA. Additionally, performance related incentive systems below top management level take into account individually agreed performance criteria. These include, for instance, cash margin targets for sales people or materialised product innovations for employees in research and development according to respective business cases.

12. Pension Schemes The PolymerLatex Group also operates defined benefit pension schemes (in Germany and Italy) and defined contribution pension schemes (in Germany, Italy, UK and Finland). The defined benefit pension schemes in Germany, to which the majority of pension provisions relate, have been closed to new members, who are now entitled to participate in a defined contribution scheme only. The funding obligations of the defined benefit pension scheme in Italy are not material in the context of the PolymerLatex Group’s business as a whole. The defined contribution pension schemes in all countries are established in compliance with local legislation.

13. Current Trading The PolymerLatex Group saw strong trading throughout the ﬁrst six months of 2010, with underlying total sales of c279.6 million and underlying EBITDA of c33.8 million. Unit cash margin improved which was mainly driven by greater volume and a higher cash margin. Management believe that, since 30 June 2010, the PolymerLatex Group’s trading performance has continued in line with these trends.

14. Insurance Certain risks are covered by specific insurance contracts. The main risk areas covered by such insurance contracts are transportation, product liability, general liability, property, loss of profit, environmental pollution, fire, credit losses, directors and officers and other smaller insurance packages as stipulated by local law and regulations.

87 c103902pu050 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART VII

OPERATING AND FINANCIAL REVIEW

This review should be read in conjunction with: (i) Yule Catto’s audited financial statements and the notes explaining the financial statements contained in Yule Catto’s annual report and accounts for the three years ended 31 December 2009; and (ii) Yule Catto’s unaudited interim consolidated financial statements for the six month period ended 30 June 2010 and the notes explaining the financial statements contained therein, which are incorporated into this document by reference, as explained in Part XII of this document. Unless otherwise indicated, the selected financial information included in this Part VII has been extracted without material adjustment from Yule Catto’s audited financial statements for the three years ended 31 December 2009 and from Yule Catto’s unaudited financial statements for the six month period ended 30 June 2010. The financial information set out in this Part VII does not constitute statutory accounts for any company within the meaning of section 435 of the Companies Act 2006. Prospective Investors should read the whole of this document and the documents incorporated herein by reference and should not rely solely on the summary operating and financial information set out in this Part VII. Some of the information contained in this review and elsewhere includes forward looking statements that involve risks and uncertainties. Actual results could differ materially from the results described in the forward-looking statements contained in this document as a result of certain factors including, but not limited to, those discussed in ‘‘Risk Factors’’ on pages 12 to 23 and ‘‘Forward-looking statements’’ on pages 28 to 29.

1. Introduction Yule Catto is a FTSE 250 chemical manufacturer, with assets in Europe, Asia, the Middle East, South Africa and Mexico. Yule Catto supplies manufacturers around the world who use its products to produce a wide range of products, including coatings, building products, gloves, carpets, paper, PVC, adhesives, plastics and pharmaceuticals. Yule Catto has three operating divisions: Polymer Chemicals, Pharma Chemicals and Impact Chemicals. The Polymer Chemicals division, Yule Catto’s core business, develops and manufactures products used in a wide range of industries and applications including coatings, adhesives and construction, where they deliver a number of benefits from enhanced waterproofing to scratch resistance. It also supplies to the medical industry where its natural rubber and synthetic nitrile latex polymers are used in the manufacture of condoms, catheters and medical and examination gloves. It manufactures from 13 sites within four geographical regions – Europe, South East Asia, Middle East and South Africa. The core products of the Polymer division are water-based emulsion polymers, based on vinyl acetate and acrylic dispersions, styrene and nitrile butadiene rubber, as well as polyvinyl alcohol/acetate, and a number of smaller specialist products. The Pharma Chemicals division (Uquifa) produces a range of over 75 Active Pharmaceutical Ingredients (APIs) for the generic and ethical pharmaceutical industries from its manufacturing plants in Spain and Mexico. These products are sold to formulators who produce and distribute the drug in its final physical form. APIs produced range from anti-bacterial, anti-ulcer and anti-parasitic to heart drugs. The Impact Chemicals division originally comprised five businesses, four of which were sold during 2008 and early 2009. The remaining business, William Blythe, is a worldwide supplier of inorganic speciality chemicals based on copper, iodine and tin from its UK manufacturing facility. Products are used in a range of applications such as semiconductor manufacture, pharmaceutical actives, non-toxic flame retardants, safety glass coatings and catalysts.

2. Significant factors affecting the Yule Catto Group’s results of operations The Yule Catto Group’s results are principally affected by sales volumes and achieved cash margins: * Sales volumes are influenced by changes in GDP in the Group’s end markets, particularly in the end markets of the Polymer Chemicals division, which accounted for 85.3 per cent. of the Group’s underlying total sales in the first half of 2010. With approximately 50 per cent. of Polymer Chemicals’ sales in emerging and high growth markets, the blended GDP exposure of

88 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS the Group has historically been higher than similar businesses focused entirely on western markets. Additionally, sales volumes are affected by changes in demand in the end use markets for the Group’s products. For example the Nitrile Latex business for synthetic rubber gloves, has experienced growth rates of 10 to 15 per cent. per annum over the past four years. This growth, which has been driven by developments in medical and hygiene practice in key markets, has increased the average growth rate of the markets in which the Group participates. The Group’s sales volumes and results of operations are inﬂuenced by the ability of the Group – and in particular the Polymer Chemicals division – to take advantage of market growth, which it seeks to do through a combination of its product offering, customer relationships, technical support to its customers and new product development.

* Cash margins are affected by the ability of the Yule Catto Group – and in particular the Polymer Chemicals division – to pass on increases in raw material prices to customers by way of higher product prices. Unit cash margins are managed through a combination of pricing strategy (including seeking to recover increased input prices), procurement costs management through a centralised buying function and new product development. Whilst the contractual framework in which the Yule Catto Group operates is such that it is often possible to recover increased raw material costs, its ability to do so may be affected by the supply and demand dynamics of the relevant markets. The Yule Catto Group is exposed to fluctuations in currency exchange rates, particularly in the sterling/Euro and sterling/Malaysian ringgit exchange rates, where weakness in sterling typically has a positive effect on reported operating profit and strength in sterling typically has a negative effect on reported operating profit. The Yule Catto Group also has debt denominated in US dollars and is therefore exposed to movements in the sterling/US dollar exchange rate, although this exposure is hedged. Production costs and overheads (sales, marketing, R&D and administration) are a significant expense of the Group and affect operating profit. Historically these have been actively managed through continuous programmes of work on the Yule Catto Group’s manufacturing plant to improve efficiency and product yields and, during 2008 and 2009, restructurings to manage headcount and maintain costs at an appropriate level.

3. Key performance indicators The most significant KPI’s which the Yule Catto Group monitors are: Volumes – Volume is a measure of the quantity of product sold and is quoted in metric tonnes. Given the significant impact that volumes have on the Yule Catto Group’s results of operations, volumes are measured for each product and the period on period movement is a KPI for the business. Cash margins – Cash margins are a measure of the price achieved on a product in excess of raw material costs. Given the significant impact that cash margins have on Yule Catto Group’s results of operations average unit cash margins are carefully monitored and managed and success in passing raw material price increases through to customers is measured through unit margin trends. New product development – New product development is a key component of maintaining and improving volumes and cost margins. The Yule Catto Group actively monitors new product development by monitoring the proportion of product sales attributable to recent product developments.

4. Description of certain income statement line items and non-GAAP ﬁnancial measures Group revenue Revenue consists of the amounts received and receivable from customers from the provision of goods and services by the Group’s operations. Revenue is recognised when goods or services are received by the customer and the risks and rewards of ownership have passed to them. Revenue is measured at the fair value of consideration received or receivable for goods and services provided in the normal course of business, net of discounts and value added tax and excludes any intra-Group revenue.

Total sales Total sales comprises the sum of Group revenue and the Group’s share of revenue from its joint ventures which are excluded from Group revenue under IFRS.

89 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Cost of sales Cost of sales consists of material purchases, net of supplier rebates, manufacturing costs, together with those overheads that have been incurred in bringing the inventories to their present location and condition. Such costs include the cost of internal transfers between distribution centres and branches.

Overheads Overhead expenses comprise the cost of the various non production functions of the Group, including sales, marketing, R&D and general administration. Administration expenses consist primarily of: wages and salary costs; depreciation charges; bad debt charges; IT costs; heat, light and power costs; security and refuse removal costs; telephone, print, post and stationery costs; consulting; marketing and promotional expenditure.

Financing income and costs Financing income consists of: interest on bank deposits; gains on forward contracts; and gains on derivatives. Financing costs consist of: interest on private placement notes and bank borrowings (bank loans and overdrafts); amortised bank arrangement fees; losses on forward contracts; losses on derivatives; interest on ﬁnance leases; and interest on unsecured loan notes.

Special items The following are disclosed separately as special items to the Group’s financial statements in order to provide a clearer indication of the Group’s underlying performance: * non-recurring items (see below); * mark to market adjustments in respect of cross currency and interest rate derivatives used for hedging purposes where IAS 39 hedge accounting is not applied; and * revaluation of US dollar loan notes from the rate of the related cross currency swaps to the year end rate. Non-recurring items are defined as: * profit or loss impact arising from the sale or closure of an operation; * impairment of non-current assets; and * other non-operating or one-off items.

Net borrowings Net borrowings represents cash and cash equivalents together with short and long term borrowings, as adjusted for the effect of related derivative instruments irrespective of whether they qualify for hedge accounting.

90 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 5. Consolidated income statement on an IFRS and underlying basis The following tables summarise the income statements of the Group for the six month periods ended 30 June 2010 and 30 June 2009, and the full ﬁnancial years ended 31 December 2009, 2008 and 2007

Proﬁt & loss

6 months 6 months ended ended Year ended Year ended Year ended 30 Jun 30 Jun 31 Dec 31 Dec 31 Dec 2010 2009 2009 2008 2007 £000 £000 £000 £000 £000 IFRS Total sales 332,336 269,656 543,398 602,153 512,925 Total costs (290,898) (243,986) (521,992) (561,367) (471,893)

Operating proﬁt 41,438 25,670 21,406 40,786 41,032 Finance costs (524) (9,554) (14,270) (1,887) (7,050)

Proﬁt before tax 40,914 16,116 7,136 38,899 33,982 Taxation (5,034) (3,939) 1,084 (4,904) (6,289)

Proﬁt for the year from continuing operations 35,880 12,177 8,220 33,995 27,693 Discontinued operations — 3,233 3,668 22,568 (12,229)

Proﬁt for the year 35,880 15,410 11,888 56,563 15,464

Proﬁt attributable to minority interest 5,102 916 2,202 1,718 1,679

Proﬁt attributable to equity holders of the parent 30,778 14,494 9,686 54,845 13,785

EPS (basic from continuing and discontinued operations) 21.1p 9.9p 6.6p 37.7p 9.5p

Underlying Total sales 326,647 264,299 532,162 591,081 503,533 Total costs (297,948) (240,122) (482,746) (549,387) (462,368)

Operating proﬁt 28,699 24,177 49,416 41,694 41,165 Finance costs (4,650) (5,168) (9,869) (10,502) (11,497)

Proﬁt before tax 24,049 19,009 39,547 31,192 29,668 Taxation (4,809) (3,715) (7,981) (4,514) (5,874)

Proﬁt for the year from continuing operations 19,240 15,294 31,566 26,678 23,794 Discontinued operations — — — — —

Proﬁt for the year 19,240 15,294 31,566 26,678 23,794 Proﬁt attributable to minority interest 866 668 1,572 1,318 1,272

Proﬁt attributable to equity holders of the parent 18,374 14,626 29,994 25,360 22,522

EPS (basic from continuing and discontinued operations) 12.6p 10.0p 20.6p 17.4p 15.5p

91 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Segmental Analysis of Underlying Operating Proﬁt

6 months 6 months ended ended Year ended Year ended Year ended 30 Jun 30 Jun 31 Dec 31 Dec 31 Dec 2010 2009 2009 2008 2007 £000 £000 £000 £000 £000 Polymer Chemicals 27,743 24,299 50,520 39,331 38,497 Share of Polymer joint ventures 1,415 201 1,242 1,615 1,129

29,158 24,500 51,762 40,946 39,626 Pharma Chemicals 2,969 3,677 5,571 5,265 7,351 Impact Chemicals 1,574 895 1,967 1,634 (221)

Divisional operating proﬁt 33,701 29,072 59,300 47,845 46,756 Unallocated corporate expenses (5,002) (4,895) (9,884) (6,151) (5,591)

Operating proﬁt 28,699 24,177 49,416 41,694 41,165

Items reported as special items over the period under review in the above IFRS numbers, but excluded from the underlying numbers, comprise:

* the results of the four Impact Chemicals business sold in 2008 and 2009 and the results of Revertex Finewaters sold in May 2010;

* the accounting proﬁt and loss on disposal of these business;

* in respect of the restructuring plan announced in 2007 for the Groups Impact Chemicals business and the closure of the Italian Pharma plant, the costs of that restructuring, and, in the case of the Italian Pharma plant, as it was subsequently run for a period of two years to facilitate the transfer of products for customers to other plants, the results of that business;

* the Group’s derivatives that hedge long term debt raised in dollars back into sterling. These derivatives combine both interest rate and currency hedging, and as such do not qualify for hedge accounting. Economically though these derivatives when combined with the US dollar debt do create the effect of sterling debt. As such, the Group reports the sterling interest cost from this combination in underlying, and the mark to market effect on the derivatives as a special item. Over the life of the derivative, the mark to market effect reported in special items will sum to zero;

* in 2007 the Group changed the terms of its UK defined benefit scheme, resulting in a decrease in liabilities which under IFRS produced a gain which had to be reported in the profit and loss statement. This is excluded from underlying results;

* in 2009 the Group settled a number of outstanding taxation issues resulting in the release of a large number of provisions which would have had the effect of producing a positive tax income item. To ensure this was not misleading to investors, the Group classiﬁed the release of provisions as a ‘‘special item’’ with the underlying tax charge in line with its prevailing cash tax rate. Unless otherwise stated, comments in this operating and ﬁnancial review refer to underlying results. Full details of Special Items are included in paragraph 13 of this Part VII.

6. Comparison of the six month periods ended 30 June 2010 and 30 June 2009

Overview Underlying total sales increased by 23.6 per cent. from £264.3 million to £326.6 million as a result of higher volumes and average selling prices in the Polymer Chemicals business. Underlying proﬁt before tax increased by 26.3 per cent. from £19.0 million to £24.0 million and underlying EPS also increased by 26.0 per cent. from 10.0p to 12.6p. The improvement was driven by the Polymer Chemicals business, where underlying operating proﬁt increased by 18.7 per cent. as a result of improvements in volumes.

92 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The underlying operating profits from the Group’s Pharma Chemicals division decreased by 18.9 per cent. from £3.7 million to £3.0 million as a result of a weak start to the period caused by weak demand, but trading improved over the course of the first half as demand improved. The Group’s remaining Impact Chemicals business, William Blythe Limited continued to improve performance, increasing underlying operating profits by 77.8 per cent. from £0.9 million to £1.6 million. Net debt decreased by £11.5 million from £88.0 million at 31 December 2009 to £76.5 million, primarily as a result of the completion of the sale of the Group’s downstream adhesives business, Revertex Finewaters. The Group declared an interim dividend at 2.0 pence per share, in line with its commitment that the full year dividend will be no less than 5 pence.

Polymer Chemicals The Polymer Chemicals division delivered substantial growth in the first half, increasing underlying total sales by 28.4 per cent. from £217.1 million to £278.8 million and underlying operating profit by 19.2 per cent. from £24.5 million to £29.2 million, driven by improvements in volumes. Volumes increased by over 9 per cent. on average across the division over what was a very weak first half in 2009, and there were increases across all business areas other than the lower margin European compound business for the carpet sector, which remained depressed. The Group started construction of additional capacity for nitrile latex in its Malaysian plant at the end of the half year, which is due on line in early 2011. Work was also started to increase dispersion capacity in Asia in order to meet growing regional demand. Raw material input costs rose over the first half of the year and the division worked hard to recover these in the market.

Pharma Chemicals Underlying operating proﬁt in the ﬁrst half declined by 18.9 per cent. from £3.7 million to £3.0 million, as the business experienced weak volumes at the start of the year. However, demand subsequently recovered. The Group formed a marketing joint venture with Synthetics International (‘‘Synthetics’’), a Swiss headquartered manufacturer focused predominantly on the production of ethical intermediates and API’s with manufacturing in China. The Group believes this marketing joint venture will provide the Pharma Chemicals division with access to high quality low cost manufacturing and development whilst simultaneously allowing Synthetics customers to utilise Uquifa’s extensive manufacturing and development capabilities in Spain and Mexico.

Impact Chemicals William Blythe’s operating performance improved significantly in the first half of 2010 with operating profit increasing by 77.8 per cent. from £0.9 million to £1.6 million.

Taxation The 2010 estimated underlying tax rate is 20 per cent., similar to 2009.

Dividend An interim dividend of 2 pence per ordinary share (2009 nil pence) was paid on 11 November 2010 to members on the register at close of business on 15 October 2010.

7. Comparison of ﬁnancial years ending 31 December 2009 and 2008

7.1 Overview Against the background of the global recession and ﬁnancial crisis, underlying total sales decreased by 10.0 per cent. from £591.1 million to £532.2 million, driven largely by a 8.6 per cent. decline in volumes in the Polymer Chemicals business. Translation into sterling increased turnover by 8.0per cent., offset by lower pricing and mix. Turnover remained at approximately 50 per cent. within Europe with sales outside Europe predominately in Asia and other developing economies, accounting for approximately 44 per cent. of turnover.

93 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Underlying operating profit increased by 18.5 per cent. from £41.7 million to £49.4 million and underlying profit before tax increased by 26.6 per cent. from £31.2 million to £39.5 million, largely as a result of increased underlying operating profits in the Polymer Chemicals division and the weakness of sterling against the Euro and the Malaysian ringgit, which delivered some £4.0 million improvement to underlying operating profit from translation. In the Polymer Chemicals division underlying operating profit increased by 26.7 per cent. from £40.9 million to £51.8 million despite volumes declining by 8.6 per cent. In the face of declining volumes, underlying operating profits were supported by a significant improvement in cash margins resulting from management’s focus on cost control, efficiency and product development. Volumes recovered over the course of the year after a slow start, and whilst full year volumes were generally down, fourth quarter volumes were ahead of prior year. Volumes in nitrile latex in particular recovered strongly after the weak start to the year. In the Pharma Chemicals division underlying operating profits increased by 5.7 per cent. from £5.3 million to £5.6 million. The increase in underlying operating profits was largely attributable to management’s focus on cost control and operating efficiency. The Group ceased production at its Italian plant and completed the associated product transfers to other sites around the middle of 2009. A further six Drug Master Files (DMF’s) were filed in the year as the Group continued to develop its generic pipeline. The API manufacturing industry remained challenging with competition from cheaper manufacturing economies in Asia continuing to develop. In light of these strategic shifts, and recent experience, the Board wrote down the carrying value of the goodwill in the Pharma Chemicals business in the Group’s balance sheet by £30.0 million. During 2009 the remaining Impact Chemicals business, William Blythe, further improved operating performance, increasing underlying operating profits by 25 per cent. from £1.6 million to approximately £2.0 million. The underlying tax rate of 20 per cent. reflects the benefits of pioneer status on the Group’s investment in Malaysia and the settlement of some prior year tax positions. The comparable rate for 2008 of 15 per cent. was low, reflecting adjustments relating to prior year tax provisions. Underlying profit attributable to minority interests increased by £0.3 million from £1.3 million to £1.6 million. The resultant underlying EPS increased by 18.4 per cent. from 17.4 pence to 20.6 pence. The Group announced in December 2008 that, given the prevailing financial crisis, and to strengthen the Group’s balance sheet, the Group would suspend its dividend until it had reduced net debt below £100 million. Net debt decreased by £47.5 million over the course of the year from £135.5 million to £88.0 million as a result of cash generation from higher profitability, working capital reduction from the impact of lower volumes and pricing, and divestment proceeds.

IFRS On an unadjusted IFRS basis, Group total sales decreased by £58.8 million to £543.4 million. Profit before taxation at £7.1 million was £31.8 million lower than the previous period, reflecting, in addition to the underlying profit before tax, the change between the years in the mark to market of the Group’s currency swaps, the profit on disposal of businesses and goodwill impairment. 7.2 Polymer Chemicals In the Polymer Chemicals division underlying operating profit increased by 26.7 per cent. from £40.9 million to £51.8 million. Volume declines in the first quarter were in the region of 15.0 per cent. compared to prior year, however, this recovered to 8.6 per cent. down for the full year. Cost elimination and containment was a key focus resulting in the implementation of a number of restructuring projects across the Polymer Chemicals division. The Group reduced full time positions in all its operations around the world as well as utilising government schemes in continental Europe that allow for temporary layoffs. In addition, many recruitment decisions were deferred and as a consequence overall headcount declined by 6 per cent. in comparison to 2008.

94 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The Polymer Chemicals division’s expansion strategy slowed in 2009 as the business focused on its cost reduction plans, however, the search for geographic and technological growth opportunities continued throughout the year. As part of the continued development of the Group’s position in ﬂoor coverings, a joint venture, Synthomer Egypt, was established between Synthomer BV and the Arab Company for Artiﬁcial Polymers and Varnishes (ACAPV) to produce latex compounds for the carpet and rug industries in Egypt and the Middle East. Synthomer Egypt’s new plant is anticipated to be operational in early 2011.

Synthetic Latex The Polymer Chemical’s Division’s synthetic latex dispersions business consists of two product families, xSBR manufactured in Germany and the UK and NBR manufactured in the UK and Malaysia. xSBR latex is sold to the speciality segments of the construction, textile and floor coverings markets. In construction, sales volumes held up as major customer projects which were started continued to completion, however, sales volumes in floor coverings continued to be under significant pressure as the UK and the continental European carpet market was affected by the recession. Sales into the former segments experienced single digit percentage volume declines, while floor covering volumes dropped by a little over 10 per cent. In the early part of the year, the NBR latex market continued to experience customer supply chain destocking which began in the final quarter of 2008. The first quarter therefore saw a substantial volume decline against the first quarter of 2008, which was recovered over the course of the year. The resurgence of the H1N1 virus and concerns over a global pandemic, coupled to very low stock levels in the customer supply chain, raised demand in the second half. In addition, rising monomer prices required several price increases during the latter part of the year in order to protect margins. During the year the new pilot plant was commissioned at the Kluang site, and this gave momentum to new product development programmes. Sales of new NBR products launched in the previous two years accounted for approximately half of all NBR sales in 2009.

Dispersions The global coatings and adhesives markets, the major segments served by the Group’s dispersions business, experienced reduced demand during the year. The Group’s European, South African and Middle East regions recorded volume declines. However, the Group’s Asian operations fared better with volumes in South East Asia ﬂat, resulting from sales progress in the coating sector. Against the background of falling volumes, the Group’s management of raw material price declines helped margins recover in most markets and compensated for the volume declines, except in the Middle East where competition placed margins under pressure. In research and development the drive to improve the Group’s low VOC offering to the coatings market continued with the launch of a number of new products.

Specialities Polyvinyl alcohol The PVC market was a challenging environment globally with many customers forced to reduce or idle their capacity during the first half of the year. The downturn created poor trading conditions for the Alcotex business, which resulted in a decision to carry out a restructuring at the UK Harlow site. In the market, Synthomer continued to maintain its position in the supply of low hydrolysis polyvinyl alcohol to the PVC industry and volumes improved in the second half of the year. In addition investments made in plant maintenance and process control in 2008 started to deliver benefits. Overall, volumes were modestly down on 2008, however, control of margins, as well as the benefits of cost control assisted the business to deliver an improvement in full year underlying operating profits. Liquid Polybutadiene During 2009 the Group continued its focus on developing new market applications for its Lithene business products. However, the collapse of sales to the automotive industry led to a decision to idle the plant for much of the first half. Subsequently, a more positive trading environment in the second half saw underlying sales improve and, while full year volumes were lower, the continuation of cost control and margin management work started in late 2008 resulted in full year underlying operating profit being ahead of the prior year.

95 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Alkyd and Polyester Resins The Malaysian-based Resin businesses experienced two very different results in 2009. The Alkyd business had a difficult time throughout the year resulting from weaker demand in South East Asia and customer destocking in the run up to year-end. In contrast, Polyester enjoyed an improved year, with sales mainly driven by the launch of government infrastructure projects in many South East Asian countries. 7.3 Pharma Chemicals The Pharma Chemicals division continued to be challenged by the market conditions and the regulatory environment for pharmaceuticals, and a number of its customers did not gain ministry of health final approvals for new products resulting in generally weaker volumes. A programme of cost reduction compensated for the reduced volumes, resulting in a 5.7 per cent. increase in underlying operating profits from £5.3 million to £5.6 million. The volume reductions were felt the most acutely in the Spanish plants, but a cost improvement plan helped offset the lower volumes. A number of customers did not get approvals for their registrations and the newly implemented German insurers’ generic tender process changed significantly the order patterns of some major customers. The Group’s ability to continue to source raw materials from Asia helped its margins. Generics remained the major part of the business sourced from Spain, within which the anti- ulcer franchises were important both in the US and Europe. In the middle of the year, destocking and the uncertainty around tenders for anti-ulcer drugs in Europe reduced the Group’s order book, but this reversed later in the year with its US franchises continuing to perform well. The launch of a new Omeprazole formulation in the US did not gain approval in 2009 as expected, resulting in it being deferred until the second quarter of 2010. The rest of the generic portfolio manufactured in Spain showed a mixed year and although the Group’s Pantoprazole and Quetiapine franchises built in volume, late approvals in Europe and price erosion occurred during the later part of the year. The dossier business helped the Group, especially in the European market, and work was commenced to increase the formulation registration dossiers the Group has. After a disappointing 2008, underlying sales from the Group’s Mexican plant bounced back strongly with ethical customer orders increasing throughout the year. The new Albendazole plant became operational in the first half of the year and boosted the Group’s manufacturing capacity, which was used to satisfy a range of ethical and generic customers. Investments were made in drying capacity to become operational in the first quarter of 2010. Volumes remained strong during the year with both generic and ethical products improving the performance. Custom synthesis remained flat in the year as a consequence of reduced funding especially in the biotech sector where the Group saw research and development programmes reduced. Improvement in the Group’s processes and its cost base helped support the Group’s results for the year, with progress made in leveraging its Asian suppliers throughout the period. The transfer of products from Italy to Spain and Mexico was completed. The Group filed six Drug Master Files in the year in a number of countries, including Esomeprazole (Nexium1, API) which establishes the Group for when patent expiries begin in Europe and the US. 7.4 Impact Chemicals During the period, William Blythe improved operating performance, increasing underlying operating profits 25 per cent. from £1.6 million to approximately £2 million.

8. Comparison of ﬁnancial years ended 31 December 2008 and 2007 8.1 Overview Against the background of the global ﬁnancial crisis and severe economic downturn underlying total sales increased by 17.4 per cent. from £503.5 million to £591.1 million. Translation accounted for approximately 8.9 per cent. of this, with the balance of the change mainly from the impact of higher pricing needed to recover the higher monomer costs experienced during the year. Turnover remained predominately within Europe with approximately 50 per cent. of underlying total sales (2007: 55 per cent.). However the Group continued to make progress in

96 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS other parts of the world, in particular Asia, assisted by ongoing investment in the Malaysian facility. Asian sales in 2008 accounted for approximately 30 per cent. of underlying total sales (2007: 27 per cent.). Underlying operating profit increased by 1.2 per cent. from £41.2 million to £41.7 million and underlying profit before tax increased by 5.0 per cent. from £29.7 million to £31.2 million. In the Polymer Chemicals division underlying operating profit increased by 3.5 per cent. from £39.6 million to £41.0 million, despite a decline in global demand through the second half of the year resulting in volumes declining by 3 per cent. The increase in underlying operating profit was achieved through an improvement in margins, achieved in an environment of volatile raw material prices through active management of the division’s cost base. The Group commissioned and completed a third nitrile capacity expansion in Malaysia to support its customers in the global synthetic glove market, where the Group remained one of the leading suppliers to this market. The Group also completed the acquisition of a new dispersion business in Vietnam to support its global customers in the country. In the Pharma Chemicals division underlying operating profit declined by 28.4 per cent. from £7.4 million to £5.3 million. Average margins decreased, impacted by rising raw material prices and a weak US dollar in the first half of the year and customer destocking during the second half. The Group continued to reconfigure its production capacity with the phased closure of the Italian site and the transfer of a proportion of its production to the Group’s other sites in Spain and Mexico. Four of the five businesses that comprised the Impact Chemicals division were sold during the year. The Group received approximately £63 million of gross proceeds for these businesses, of which approximately £10 million was received after the year end. The remaining business, William Blythe Limited, was restructured in the first quarter and subsequently recorded an underlying operating profit of £1.6 million for the year, having been loss-making in 2007. In 2008, currency movements adversely affected the margins in the Group’s Pharma Chemicals business from dollar-denominated sales and its UK Polymer Chemicals business where the majority of its raw materials are purchased in Euros. The weakness of sterling against the Euro and the Malaysian ringgit, however, delivered an improvement to operating profit from translation. The underlying tax rate of 15 per cent. reflected the benefits of pioneer status on the Group’s investment in Malaysia and the settlement of some large prior year tax positions. This was an improvement on the prior year rate of 20 per cent. Underlying profit attributable to minority interests, at £1.3 million, was similar to 2007. The resultant underlying EPS increased by 12.3 per cent. from 15.5 pence to 17.4 pence. The Board declared an interim dividend of 4.0 pence per share at a cash cost to the Group of £5.8 million. The Group announced in December 2008 that given the prevailing financial crisis, and to strengthen the Group’s balance sheet, it would not be recommending the payment of dividends until such time as underlying net debt fell below £100 million. Consequently no final dividend was proposed for 2008. Net debt decreased by £35.3 million over the course of the year from £170.8 million to £135.5 million, largely as a result of the receipt of proceeds from four divestments

IFRS On an unadjusted IFRS basis, Group revenue increased by £89.3 million to £602.2 million. Profit before taxation at £38.9 million was £4.9 million higher than the previous period, of which £1.5 million relates to a better trading performance with the remainder being an increase in the special items. 8.2 Polymer Chemicals 2008 was a year where all business units faced challenges. The Polymer Chemicals division started the year positively and made progress through the first half. However, the global financial crisis started to have its effect in a number of market segments in the third quarter and in all by the final quarter. Fluctuations in currency, availability and pricing of monomers, rising energy costs and slower customer demand all contributed to the creation of a difficult environment.

97 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The monomer supply position was, until the final quarter, difficult. Rising oil prices and increased demand placed a strain on supply in a number of areas but, in particular, butadiene, where strong demand and lack of availability meant additional costs were incurred to ensure continuity of supply to the Group’s customers. This situation began to improve in the final quarter as demand dropped and oil prices followed. However monomer prices also fell, leading customers to destock their supply chains in the hope of securing lower input prices and resulted in further lowering of demand for the Group’s products. The Polymer chemicals division’s underlying total sales increased by 19.3 per cent. From £415.8 million to £496.0 million, driven by higher selling prices and currency movements. Overall volumes for the business were 3 per cent. down on prior year, but this masked some good performances in a number of core markets. Operating profit ended 3.3 per cent. ahead, whilst 2008 operating margins were 8 per cent. The Polymer chemicals division’s expansion strategy in Asia continued in 2008 with further investments in both latex and dispersions. Within the nitrile latex business, the commissioning of the Phase 3 expansion at the Kluang plant in Malaysia in August meant that capacity more than doubled over the previous 18 months. The Group’s ability to increase capacity to meet demand enabled the business to maintain its position in this market. The year also saw additional investment in Kluang with the installation of a new Nitrile pilot plant and development laboratory, both aimed at giving the business facilities that would allow faster product and process development. Within dispersions the Group’s geographic expansion strategy saw the acquisition of a controlling interest in Chemtech, in Vietnam. The business is located near Ho Chi Minh City and is a supplier of dispersions to the coating and adhesives industries in one of Asia’s developing economies. During the latter part of the year, a number of restructuring activities were announced in the UK. These changes were required to combat the lower levels of activity the business experienced in this market. This was an unfortunate situation but it was critical that the Polymer Chemicals division continued to balance its manufacturing assets to meet anticipated market demand.

Synthetic Latex The latex market globally saw a number of changes during the year with the exit of a leading competitor, DRLC, from the nitrile dipping market and the announcement of mothballing of three competitive latex plants in the UK. In xSBR, although the market conditions weakened during the year as the economy slowed, the Group’s speciality volumes ended slightly up on 2007, with the only reduction being seen in compound sales to the carpet market. In nitrile latex the exit of DRLC created a number of opportunities which increased volumes by 12.8 per cent. in Malaysia. At the same time, the business had to contend with rising butadiene prices and, of more concern, a lack of the monomer’s availability, particularly in Asia. However, the ﬁnal quarter of the year saw an equally rapid decline in prices hitting short-term demand as many of the Group’s customers emptied their supply chains to try and take advantage of lower monomer input costs.

Dispersions The dispersion market produced a variable set of results in 2008 although overall volume was marginally up on 2007. Progress was made in a number of European technical grades where volumes more than doubled in 2008, and in the Middle East business where sales volumes grew by 7.9 per cent. However, the Group also experienced a decline in the UK where sales volumes were 12.6 per cent. down as a result of much slower customer demand predominantly due to the sluggish housing market.

Specialities Polyvinyl Alcohol The Group continued to maintain its position in the supply of low hydrolysis polyvinyl alcohol to the PVC industry. A strong start to the year was followed by a slower ﬁnal quarter as PVC manufacturers started to idle capacity. Overall, volumes were marginally ahead of 2007, and margins were maintained in a difﬁcult economic environment. The business continued to experience rises in operating costs as a result of higher energy tariffs and maintenance costs,

98 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS however, these were offset by a better mix of products and some benefits from currency. During the year a number of investments were made to improve manufacturing performance in 2009 and beyond. Liquid Polybutadiene In 2008 the Group increased its focus on the development of the lithene business by establishing a cross-functional team to develop and expand its presence in this market. After a positive first half the business slowed progressively through the third and fourth quarters as the recession started to impact on the automotive industry, the main market for lithene products. Overall volumes for the year were down by 26.7 per cent., all coming in the second half; however, operating profit held up better than expected as a result of stronger margins and cost- saving actions. Alkyd and Polyester Resins The Group’s business operates from the Kluang, Malaysia site with sales predominantly in South East Asia. Like other business units, sales were robust through the first half of the year with the first signs of slowdown arriving in September and remaining until the year end. The polyester resin business had a challenging year with the final quarter being the most difficult. The slowdown created a competitive environment with prices and volumes under severe pressure; however, operating profit was only slightly down on the prior year. The alkyd resin business also had a difficult final quarter, and volumes ended the year down on 2007; however, margin and cost management ensured that 2008 delivered a record operating profit for this business. 8.3 Pharma Chemicals 2008 was a mixed year for the Pharma Chemicals division. Volumes were reasonably robust, with a number of new products contributing to volumes and margins. The Group also made progress in its programme of work to fully exit the Italian manufacturing site, and filed an additional six Drug Master Files. The business was adversely affected throughout the majority of the year by the impact of the strength of the Euro on US dollar sales and increasing raw material input prices. Overall, underlying operating profit declined by 28.4 per cent. from £7.4 million to £5.3 million. In the Spanish part of the business, despite a programme implemented in late 2007 to increase prices, 2008 saw increased competitive pressure. In the generic regulated markets governments imposed reference prices, applying pressure to customer pricing, with the weakness of the dollar further impacting US sales on translation. Meanwhile the currency benefit on the raw material input side was outweighed by the rising price for oil-based raw materials affecting all producers, including Asian competition. This negatively affected gross margin and outweighed the benefit of continued robust volumes. In generics the Group’s Omeprazole franchise continues to be important. Despite some volume pressure the Group remained competitive through process improvements and the benefit of the Group’s outsourcing strategy. Ranitidine volumes were strong in the first half to the USA as the Group’s over the counter franchise continued to do well. Most of the Group’s other generic volumes held up well and the Group began to build its franchises in Pantoprazole and Quetiapine as the patents expiry continued in other European countries. The Group also saw Ketorolac, a niche analgesic, gain approvals in the USA and Europe. The dossier business, where the Group accelerates regulatory clearance for its formulation partners’ products based on the Group’s APIs, continued to develop as the Group rolled out its Terbinafine and Zolpidem franchises in Europe. In the latter part of the year a strengthening of the US dollar helped the US selling position while volumes were affected by customers’ desire to conserve cash and minimise stocks in the current economic circumstances. Subcontract development work to big pharmaceutical customers was relatively quiet during the year, some of which was caused by phasing. The transfer of products from Italy and Germany was a key objective in 2008 and all the Group’s customers were able to progress the registration process for these products. Volume demand from customers was strong for transferring products. At the same time a business improvement process was commenced in Spain focused on further improving efficiency on top of the increased utilisation anticipated from the Italian and German product transfers.

99 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS In research and development the Group’s API pipeline grew with the ﬁling of six new DMFs throughout the world.

Mexican underlying total sales dropped back from the record year in 2007 (from £12.4 million to £10.5 million). The key products the site produces for ethical customers are typically on a contract basis and were impacted by phasing issues in 2008. There was also similar competitive pressure on generics pricing to that experienced in Spain. The site passed Federal Drug Agency (FDA) audit and expanded capacity in Albendazole for an ethical customer allowing a volume increase to support them in a World Health Organisation (WHO) aid programme.

8.4 Impact Chemicals Following the restructuring implemented in 2007 William Blythe, the remaining Impact chemicals business returned to proﬁt in 2008, achieving underlying operating proﬁt of £1.6 million (2007: £(0.2) million).

9. Debt, liquidity and pensions The following table shows cash flow, net debt and pensions deficit position for the 6 months ended 30 June 2010 and 30 June 2009, and the financial years ended 31 December 2009, 2008 and 2007.

Consolidated Cash Flow 6 months 6 months ended ended Year ended Year ended Year ended 30 Jun 30 Jun 31 Dec 31 Dec 31 Dec 2010 2009 2009 2008 2007 £000 £000 £000 £000 £000 Underlying operating profit 28,699 24,177 49,416 41,694 41,165 Deduct: operating profit of joint ventures (1,415) (201) (1,242) (1,615) (1,129) Add: operating profit of divested businesses 889 916 2,012 5,611 4,849

28,173 24,892 50,186 45,690 44,885 Movement in working capital (13,216) (5,145) 13,887 (1,462) 3,960 Depreciation 7,362 7,100 14,771 16,890 16,013 Capital expenditure (net) (4,568) (4,796) (8,763) (17,332) (16,340) Interest (4,548) (5,470) (10,520) (11,354) (11,062) Tax paid (5,639) (2,444) (6,812) (10,214) (10,457) Pension funding in excess of IAS 19 charge (5,676) (3,140) (10,678) (6,301) (5,550) Other (includes MI dividend) (5,512) (322) (1,778) 240 (237)

Sub total (3,624) 10,675 40,293 16,157 21,212 Cash impact of closure of business (1,057) (657) (3,591) (10,283) (8,985) Disposal proceeds/acquisitions (net) 16,236 10,862 11,013 52,115 1,759 Dividends paid — — — (14,129) (13,689) Exchange (62) 662 (272) (8,509) (4,857)

Movement in borrowings 11,493 21,543 47,444 35,349 (4,560) Opening debt 88,038 135,482 135,482 170,831 166,271

Closing debt 76,545 113,939 88,038 135,482 170,831

UK Pension deﬁcit 83,460 78,171 69,960 67,428 33,641 Overseas Pension deﬁcit 7,502 7,945 8,729 8,131 7,595

Total Pension deﬁcit 90,962 86,116 78,689 75,559 41,236

100 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 9.1 Six months ended 30 June 2010 Net debt decreased from £88.0 million at the year end to £76.5 million at June 2010. The Group sold its downstream adhesives business, Revertex Finewaters in the first half. After passing the minority interest share of the consideration by dividend, the Group’s effective share, net of minority interests, equated to £10.9 million, which has contributed to the reduction in net debt. The net deficit on post retirement benefit obligations in the Group’s UK scheme increased by £13.5 million to £83.5 million, reflecting an increased liability from a lower discount rate. Asset values in the scheme were broadly unchanged from the year end.

9.2 Financial year ended 31 December 2009 Underlying net debt reduced significantly during the year from £135.5 million to £88.0 million. In 2008, the Group reported a year of increased capital expenditure, having invested in further expansion of the Malaysian nitrile facility over 2007 and 2008 and in the relocation of some manufacturing from the Group’s Italian Pharma site. Capital expenditure slowed substantially in 2009 with the global recession with capex of only £8.7 million (2008 £17.7 million). Investment in the cash costs of running the Italian Pharma site came to some £3.6 million, whilst net proceeds from divestments totalled £8.8 million, predominantly attributable to the sale of Oxford Chemicals. Working capital inflow for the year was £13.9 million. Control of working capital is a core focus of the business management, though the inflow was mainly attributable to lower sales volumes, and lower pricing in the supply chain. As at the end of 2009, the Group had a £33 million US private placement term debt to repay in September 2010, after which, the next large repayment of term debt is £24 million of US private placement debt due in 2012. At the year end, the Group had £30 million of cash available to it under an undrawn three year revolving loan maturing December 2011 and £42 million of cash on the balance sheet. Net Debt to EBITDA, the Group’s key leverage metric, fell to under 1.3 at the end of the year from 2.2 at the end of 2008. In the UK defined benefit pension scheme the majority of investments are in equities. Equity markets declined substantially in 2008 and recovered somewhat over the course of 2009, and overall the fund delivered a return of 24 per cent. The yield on high-quality corporate bonds decreased significantly during the year, which increased liabilities. Over and above the Group’s agreed £5.8 million per annum deficit remediation funding of the UK scheme, the Company contributed, on a voluntary basis, a further £4 million in November 2009. The overall effect of these changes was that there was little movement in the overall net deficit of the scheme, which stood at £70 million at the end of 2009. The UK scheme was closed to future accrual during 2009. At the end of the year fewer than twenty active members remained, falling to no active members at the end of September 2010.

9.3 Financial year ended 31 December 2008 Underlying net debt reduced significantly during the year to £135.5 million (2007 £170.8 million), mainly as a result of the divestment of the Impact chemicals businesses. In 2007, the Group reported a year of increased capital expenditure, following a number of years of lower capital investment. This continued in 2008 as the Group invested in further expansion of the Malaysia nitrile facility and in the relocation of some manufacturing from its Italian Pharma site. Investment in restructuring the Impact chemicals portfolio and the cash costs of running the Italian Pharma site came to some £2.4 million, whilst net proceeds from divestments totalled £50.7 million. Working capital outflow for the year was £1.5 million. Control of working capital is a core focus of the business management, and the outflow reflected control of working capital, offset by the impact of substantially higher raw material costs and selling prices in the Polymer business.

101 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Through the year the Group carried up to c80 million of its net debt in Euros as an economic hedge against its Euro-based businesses. The strengthening of the Euro against sterling accounted for £9.8 million of the increase in the sterling net debt. During the year the Group repaid £33 million due under its US private placements. The Group also replaced its maturing £60 million revolving credit facility with a new £30 million three-year loan which was completed at the year end, and post the year end in January 2009 secured an additional £19 million of borrowings in Malaysia under a six-year amortising loan facility. Net debt at the end of the year at £135 million was £6 million below the outstanding balance on the private placement notes of £141 million which were themselves the Group’s only long- term drawn borrowing arrangements at the end of the year. In the UK defined benefit pension scheme, the majority of investments are in equities. Equity markets declined substantially in 2008 and overall the fund delivered an actual negative return of 26 per cent., and consequently asset values substantially reduced. The yield on high-quality corporate bonds increased significantly during the year, which reduced liabilities. The overall effect of these changes was a substantial increase in the net balance sheet liability to £67.4 million for this scheme

10. Capitalisation and Indebtedness 10.1 Capitalisation The following table sets out the capitalisation of Yule Catto, extracted without material adjustment from Yule Catto’s unaudited interim results for the six month period ended 30 September 2010.

Capital and reserves £,000 Called up share capital 14,566 Share premium 33,034 Other reserves and retained earnings 34

Total capitalisation as at 30 September 2010 47,634

There has been no material change in the capitalisation of Yule Catto since 30 September 2010 10.2 Indebtedness The following table sets out the gross indebtedness of Yule Catto extracted without material adjustment from Yule Catto’s unaudited management accounts as at 30 September 2010.

£’000 Total current debt Unsecured bank loans and overdrafts (41,804) Guaranteed bank loan (3,644)

(45,448)

Total non-current debt Unsecured bank loan (1,601) Guaranteed bank loan (14,794) $135million guaranteed unsecured private placement notes (84,801)

(101,196)

Total indebtedness as at 30 September 2010 (146,644)

102 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The following table sets out the net ﬁnancial indebtedness of the Group, extracted without material adjustment from Yule Catto’s unaudited management accounts as at 30 September 2010.

£’000 Cash 55,353

Total liquidity 55,353

Current bank debt (45,448) Other current ﬁnancial debt —

Current ﬁnancial indebtedness (45,448)

Net current ﬁnancial indebtedness 9,905 Non-current bank loans (16,395) Private placement loan notes (84,801)

Non-current ﬁnancial indebtedness (101,196)

Net ﬁnancial indebtedness as at 30 September 2010 (91,291)

Notes: 1. There are no material indirect or contingent liabilities as at 30 September 2010. 2. As required by IFRS, the USD135 million unsecured loan notes are translated at the USD/GBP rate on 30 September 2010. Cross currency swaps were taken out at the inception of these loan notes to hedge the full principal amount. These are not accounted for as a hedges as deﬁned by IAS39. The market value of the currency element of these swaps at 30 September 2010 was £10.8 million, which reduces the total indebtedness to £80.5million.

11. Capital resources and liquidity management The Yule Catto Group’s liquidity requirements arise primarily from the need to fund its working capital and capital expenditure, as well as make interest and principal payments on its outstanding indebtedness. Yule Catto’s principal source of liquidity is its cash ﬂow from operating activities, equity ﬁnancing, and borrowings from banks and private placement note holders.

Borrowings are arranged with the aim of providing an appropriate maturity profile and to maintain short term liquidity. Bank facilities include term loan or revolving credit facilities from a range of UK and Malaysian banks that Yule Catto maintains strong working relationships with. The Company has also issued private placement notes as a longer term form of debt financing, with the most recent issue on 2 September 2004, with a maturity profile of 8, 10 and 12 years.

As at the end of September 2010, the Group had ‘‘headroom’’ in its liquidity of some £46.2 million, being the difference between its committed facilities of £137.5 million and its net indebtedness of £91.3 million. Approximately £3.0 million of this headroom will amortise down on the Malaysian loan in 2011 and the £30 million revolving credit facility will terminate on 24 December 2011. Thereafter the next reduction in term debt facilities will be September 2012, when the ﬁrst repayment of the 2004 series private placement notes of £28.5 million is due. The main volatility in monthly cash ﬂow of the Group comes from working capital, which would typically decrease by some £10 million at the year end, and rise again sharply over January. A lesser reduction would occur in August with the summer vacations in Europe, with September being one of the high points for working capital requirements.

12. Treasury The Group’s treasury function operates procedures designed to reduce or eliminate ﬁnancial risk and ensure that funds are available for current and future needs. Treasury policies are approved by the Board and the use of ﬁnancial instruments is strictly controlled.

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns. The capital structure of the Group consists of debt and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.

103 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 12.1 Financial instruments The Group’s principal financial instruments comprise borrowings, some cash and liquid resources and various items, such as trade debtors and trade creditors that arise directly from its operations. The Group also uses interest rate swaps, currency swaps and forward foreign currency contracts to manage the interest rate and currency risks arising from the Group’s operations and its sources of finance. The use of these financial instruments is the subject of specific Board consideration and approval together with the criteria for investing and borrowing cash. It is the Group’s policy that no speculative trading in financial instruments shall be undertaken. The Group’s main exposure to market risk is in the form of interest rate risk and foreign currency risk. The policies adopted to address these risks are as follows: Interest rate risk The Group finances its operations through a mixture of retained profits, loan notes and bank borrowings. The Group borrows at both fixed and floating rates of interest and uses interest rate swaps to generate the desired interest profile in order to manage the Group’s exposure to interest rate fluctuations. Foreign currency risk The Group uses currency borrowings, forward contracts and currency swaps to hedge overseas net assets, which are predominantly denominated in euros. Profit translation exposures are not hedged. The Group hedges currency transaction exposures at the point of confirmed order, using forward foreign exchange contracts. The Group’s policy is, where practicable, to hedge all exposures on monetary assets and liabilities. 12.2 Bank loans As at 30 September 2010, the Group had £30 million of UK committed credit facilities (all of which were undrawn) and RM100 million (£18 million) Malaysian committed credit facilities (all of which were drawn), along with £55.4 million of cash and cash equivalents. As at 30 September 2010 (being the latest practicable date prior to the publication of this document), the Group had £30 million of UK committed credit facilities (all of which were undrawn) and RM100 million Malaysian committed credit facilities (all of which were drawn). Yule Catto’s UK borrowings are subject to a cross guarantee arrangement whereby the debt providers have recourse to Yule Catto, and a number of its UK subsidiaries. The Malaysian borrowings are the subject of a guarantee granted by Yule Catto in favour of the Malaysian debt providers. In connection with the Acquisition, Yule Catto has entered into the New Credit Facilities, comprising a euro-denominated £150 million 3 year term loan facility and a £60 million 3 year multicurrency revolving credit facility. Further details of the facilities are set out in paragraph 11.5 of Part XI. 12.3 US private placement notes As at 30 September 2010, the Company had three sets of private placement notes outstanding, details of which are set out in the table below. 12.4 Summary of the Group’s committed debt facilities At 30 September 2010, the following facilities were available to the Group: Amount* Bank facilities £m £30 million bank revolving credit facility due December 2011 30 RM 100 million (£18 million) six year amortising term loan facility (18) Private placement notes $43 million 5.55% Series 2004 notes due 2 September 2012 (28.5) $70 million 5.78% Series 2004 notes due 2 September 2014 (48.1) $22 million 5.98% Series 2004 notes due 2 September 2016 (14.9) Total committed debt facilities as at 30 September 2010 (139.5) * Translated at the following exchange rates: £1 : RM 4.9012 £1 : $1.5071

104 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS At 30 September 2010, £30 million was undrawn against the Group’s committed bank facilities. Details of the Group’s material committed debt facilities are summarised in paragraph 11.6 of Part XI of this document. As at 30 September 2010 (being the latest practicable date prior to the publication of this document) £30 million was undrawn against these facilities. 12.5 Financial covenants The Company’s debt facilities contain a number of covenants attached to Yule Catto’s committed debt facilities. The key covenants are leverage and interest cover and are tested at 30 June and 31 December each ﬁnancial year. The ratios for the three-year period to 31 December 2009 and for the twelve months ended on 30 June 2010 for each of the ﬁnancial covenants is set out below. Twelve months to Year ended Year ended Year ended 30 June 31 December 31 December 31 December 2010 2009 2008 2007 Leverage Ratio (net debt/underlying EBITDA) 1.1 1.3 2.2 2.9 Interest Ratio 7.6 6.7 6.4 5.1

All of the Company’s debt covenants are calculated under IFRS. As at the date of this Prospectus, the Company is in compliance with its ﬁnancial covenants in all respects and has not requested or been granted any waivers thereof. 12.6 Equity The Company has one class of ordinary shares. During the three years to 31 December 2009, the Company did not issue any shares. As part of the Rights Issue, the Company plans to issue up to 194,217,582 New Ordinary Shares at the Issue Price. Shareholders will be asked to vote on these proposals at the General Meeting.

105 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 13. Special Items

Special Items The following tables summarise all the items excluded from underlying performances as reported in this Part VII.

6 months 6 months ended ended Year ended Year ended Year ended 30 Jun 30 Jun 31 Dec 31 Dec 31 Dec 2010 2009 2009 2008 2007 £000 £000 £000 £000 £000 Continuing operations Total sales 5,689 5,357 11,236 11,072 9,392

Operating profit/(loss) Operating profit of operations sold or closed during the period 468 1,493 1,990 1,498 1,531 Profit arising from the sale or closure of operations 12,271 — — (2,406) (12,461) Impairment of goodwill — — (30,000) — UK Pension Fund – Past service credit — — — — 10,797 Finance costs Fair value adjustment 4,126 (4,386) (4,401) 8,615 4,447

Proﬁt/(loss) before taxation from continuing operations 16,865 (2,893) (32,411) 7,707 4,314 Taxation (225) (224) 9,065 (390) (415)

Proﬁt/(loss) for the year from continuing operations 16,640 (3,117) (23,346) 7,317 3,899 Discontinued operations Total Sales — 772 772 52,900 66,167

Operating profit of discontinued operations Operating profit of operations sold or closed during the period — 22 22 4,113 3,318 Profit/(loss) arising from the sale or closure of operations — 4,315 3,652 20,067 (15,776)

— 4,337 3,674 24,180 (12,458) Taxation — (1,104) (6) (1,612) 229

Proﬁt/(loss) for the year from discontinued operations — 3,233 3,668 22,568 (12,229)

13.1 Six months ended 30 June 2010 In the ﬁrst half of 2010 the adjustment for mark-to-market on the derivatives hedging the Group’s US dollar debt into sterling resulted in a gain of £4.1 million (2009 loss £4.4 million).

The Special Items’ operating profit of £12.7 million reflects the trading profit and gain on disposal of Revertex Finewaters Sdn Bhd, the Group’s downstream adhesive business together with some minor costs of decommissioning the Italian pharma plant, which was closed as part of the Group’s 2007 restructuring programme. The Group’s economic interest in Finewaters was 63 per cent., and the gain on this disposal attributable to minority interests is also shown in the special items.

The Group signed a conditional agreement to sell the Italian pharma site for redevelopment for c4.6 million in August 2010, the proceeds of which are expected to be received early in 2011.

106 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 13.2 Financial year ended 31 December 2009 The Special Items’ operating profit reflects the profit on the sale of Oxford Chemicals Limited of £3.9 million. The sale was announced in 2008, but completed in January 2009. In 2009 the adjustment for mark-to-market on the derivatives hedging the Group’s US dollar debt into sterling resulted in a reported loss of £4.4 million. Special Items includes impairment of goodwill in Pharma Chemicals of £30 million. The impairment of goodwill in Pharma Chemicals was a result of lower projected earnings growth for the business. Special items also includes the release of tax provisions in the amount of £9.3 million relating to prior year issues that were closed during the course of 2009. 13.3 Financial year ended 31 December 2008 During 2007 the Group announced the closure of Holliday Pigments’ Hull site and the James Robinson manufacturing plant in Dieburg, Germany. Residual site closure and run-down costs for these activities are disclosed in special items. The Group also committed to further restructuring of £650,000 for its remaining Impact Chemicals business, William Blythe Limited, in the first quarter of 2008, which is also included under special items. The operating results of the four divested Impact Chemicals businesses and the operating results of the Italian pharma business, the closure of which was announced in 2007, are included in Special Items.

14. Critical accounting policies The Group’s principal accounting policies are set out in note 2 to the financial statements in the Group’s Annual Report and Accounts year to 31 December 2009 and conform to IFRS. In the process of applying the Group’s accounting policies, management makes the following judgements and estimates that have the most significant effect on the amounts to be recognised in the financial statements.

Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash- generating units to which goodwill has been allocated. The value-in-use calculation requires the entity to estimate the future cash ﬂows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.

Post retirement benefit obligations Included in the actuaries’ calculation of the post retirement benefit obligations are a number of assumptions that are set out in detail in note 24 to the Group’s 2009 financial statements.

Current tax liability When calculating the current tax liability an appropriate estimate has been made regarding the outstanding items in respect of previous years with various tax authorities for which the outcome of discussions is uncertain.

Closure of manufacturing sites Included in costs to close the manufacturing sites are estimates for redundancy, decontamination and dismantling costs. These estimates are based on experience gained in previous closures.

107 c103902pu060 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART VIII FINANCIAL INFORMATION ON YULE CATTO

1. Historical Financial Information The consolidated financial statements of Yule Catto and its subsidiaries included in the Annual Report and Accounts of Yule Catto for each of the financial years ended 31 December 2009, 2008 and 2007 together with the audit reports thereon are incorporated by reference into this document. Deloitte LLP, City House, 126-130 Hills Road, Cambridge CB2 1RY, a member of the Institute of Chartered Accountants in England and Wales, has issued unqualified audit opinions on the consolidated financial statements of Yule Catto and its subsidiaries included in the Annual Report and Accounts of Yule Catto for each of the financial years ended 31 December 2009, 2008 and 2007. The Independent Auditor’s Report for the financial year end 31 December 2009 is set out on page 33 of the Annual Report and Accounts 2009. The Independent Auditor’s Report for the year ended 31 December 2008 is set out on page 36 of the Annual Report and Accounts 2008. The Independent Auditor’s Report for the year ended 31 December 2007 is set out on page 36 of the Annual Report and Accounts 2007. The unaudited interim condensed consolidated financial statements of Yule Catto and its subsidiaries for the six month period ended 30 June 2010 together with comparative information in respect of the six month period ended 30 June 2009 are incorporated by reference into this document. See Part XII of this document for further details about information that has been incorporated by reference into this document.

2. Selected Financial Information on the Group The selected consolidated historical financial information presented below has been prepared in accordance with IFRS and has been extracted without material adjustment from, and should be read together with: * Yule Catto’s audited consolidated financial statements included in its Annual Report and Accounts for each of the years ended 31 December 2009, 2008 and 2007 (incorporated by reference into this document); and * Yule Catto’s unaudited condensed consolidated financial statements included in its Interim Results for the six month period ended on 30 June 2010 and 2009 (incorporated by reference into this document).

6 months 6 months Year Year Year ended ended ended ended ended 30 Jun 30 Jun 31 Dec 31 Dec 31 Dec 2010 2009 2009 2008 2007 £000 £000 £000 £000 £000 Underlying Total sales 326,647 264,299 532,162 591,081 503,533 EBITDA 36,061 31,277 63,930 56,961 54,585 Operating proﬁt 28,699 24,177 49,416 41,694 41,165 Earnings per share 12.6p 10.0p 20.6p 17.4p 15.5p Dividends per share 2.0p 0.0p 0.0p 4.0p 9.6p Cash generated from operations 15,596 23,173 64,499 44,299 49,447 Free cash ﬂow before dividends (4,815) 12,121 39,001 7,781 14,012

IFRS Total sales 332,336 269,656 543,398 602,153 512,925 EBITDA 36,061 31,277 63,930 56,961 54,585 Operating proﬁt 41,438 25,670 21,406 40,786 41,032 Earnings per share 21.1p 9.9p 6.6p 37.7p 9.5p Dividends per share 2.0p 0.0p 0.0p 4.0p 9.6p Cash generated from operations 15,596 23,173 64,499 44,299 49,447 Free cash ﬂow before dividends (4,815) 12,121 39,001 7,781 14,012 * Total sales include the Group’s share of joint ventures’ revenue, which is excluded from Group revenue. An explanation of the differences between the Yule Catto Group’s results as stated on an IFRS basis and as stated on an underlying basis is set out in paragraphs 5 and 13 of Part VII.

108 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART IX FINANCIAL INFORMATION ON POLYMERLATEX

1. Introduction Financial information relating to the PolymerLatex Group for the years ended 31 December 2007, 31 December 2008 and 31 December 2009 is set out on pages 109 to 151 in this Part IX.

2. Selected Financial Information on the PolymerLatex Group

Year ended Year ended Year ended 31 Dec 2009 31 Dec 2008 31 Dec 2007 d000 d000 d000 Underlying Total sales* 386,670 516,075 493,305 EBITDA 54,573 49,611 62,849 Operating proﬁt 37,161 25,167 42,252 EBITDA margin 14.1% 9.6% 12.7% Cash generated from operations 47,855 47,483 49,178 Free cash ﬂow before dividend 390 11,543 (975)

IFRS Total sales* 386,670 516,075 493,305 EBITDA 40,165 43,906 60,054 Operating proﬁt 12,484 5,408 25,415 EBITDA margin 10.4% 8.5% 12.2% Cash generated from operations 47,855 47,483 49,178 Free cash ﬂow before dividends 390 11,543 (975) * Total sales includes the PolymerLatex Group’s share of the Finnish joint venture’s revenues

109 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 3. Accountant’s Report

Deloitte LLP City House 126 - 130 Hills Road Cambridge CB2 1RY

Tel: +44 (0) 1223 460222 Fax: +44 (0) 1223 350839 www.deloitte.co.uk The Board of Directors on behalf of Yule Catto & Co plc Temple Fields Harlow Essex CM20 2BH

HSBC Bank plc 8 Canada Square London E14 5HQ

13 December 2010 Our Ref: SJH / JPCH

Dear Sirs PolymerLatex Deutschland Beteiligungsgesellschaft mbH (‘‘Target’’ and, with its subsidiaries, the ‘‘Target Group’’) We report on the financial information set out in Part IX of the combined prospectus and class 1 circular relating to the acquisition of the Target Group dated 13 December 2010 by Yule Catto & Co plc (the ‘‘Company’’ and, together with its subsidiaries, the ‘‘Group’’) (the ‘‘Investment Circular’’). This financial information has been prepared for inclusion in the Investment Circular on the basis of the accounting policies set out in note 3.2 to the financial information. This report is required by Annex I item 20.1 of Commission Regulation (EC) No 809/2004 (‘‘the Prospectus Directive Regulation’’) and Listing Rule 13.5.21R and is given for the purpose of complying with that requirement and for no other purpose.

Responsibilities The Directors of the Company are responsible for preparing the financial information on the basis of preparation set out in Note 3 to the financial information and in accordance with International Financial Reporting Standards. It is our responsibility to form an opinion as to whether the financial information gives a true and fair view, for the purposes of the Investment Circular and whether the financial information table has been prepared in a form that is consistent with the accounting policies adopted in the Company’s latest annual accounts, and to report our opinion to you. Save for any responsibility arising under Prospectus Rule 5.5.3R(2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered ofﬁce at 2 New Street Square, London EC4A 3BZ, United Kingdom.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (‘‘DTTL’’), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

Member of Deloitte Touche Tohmatsu Limited

110 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in accordance with this report or our statement, required by and given solely for the purposes of complying with Annex I item 23.1 of the Prospectus Directive Regulation, consenting to its inclusion in the prospectus.

Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity’s circumstances, consistently applied and adequately disclosed. We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside the United Kingdom, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion In our opinion, the financial information gives, for the purposes of the Investment Circular, a true and fair view of the state of affairs of the Target Group as at the dates stated and of its profits, cash flows and changes in equity for the periods then ended in accordance with the basis of preparation set out in Note 3 and in accordance with International Financial Reporting Standards and has been prepared in a form that is consistent with the accounting policies adopted in the Company’s latest annual accounts.

Declaration For the purposes of Prospectus Rule 5.5.3R(2)(f), we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with Annex I item 1.2 and Annex III item 1.2 of the Prospectus Directive Regulation.

Yours faithfully Deloitte LLP Chartered Accountants

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (‘‘DTTL’’), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

Member of Deloitte Touche Tohmatsu Limited

111 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PolymerLatex Group Consolidated income statement for the years ended 31 December 2009, 2008 and 2007

Note Year ended 31 December 2009 Year ended 31 December 2008 Year ended 31 December 2007 Underlying Special Underlying Special Underlying Special performance items IFRS performance items IFRS performance items IFRS d’000 d’000 d’000 d’000 d’000 d’000 d’000 d’000 d’000 Revenue 5 386,670 — 386,670 516,075 — 516,075 493,305 — 493,305

Operating proﬁt 6 37,161 (24,677) 12,484 25,167 (19,759) 5,408 42,252 (16,837) 25,415

Interest payable (17,687) — (17,687) (24,202) — (24,202) (24,914) — (24,914) Interest receivable 5 102 — 102 774 — 774 479 — 479

(17,585) — (17,585) (23,428) — (23,428) (24,435) — (24,435) Fair value adjustments 818 (6,853) (6,035) (4,760) 437 (4,323) (71) 474 403

Finance costs 8 (16,767) (6,853) (23,620) (28,188) 437 (27,751) (24,506) 474 (24,032)

(Loss)/proﬁt before taxation 20,394 (31,530) (11,136) (3,021) (19,322) (22,343) 17,746 (16,363) 1,383

Taxation 19 (1,366) (6,254) 330

(Loss)/proﬁt for the year (12,502) (28,597) 1,713

Special items: The special items are shown in more detail in note 27. All operations are from continuing activities.

112 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PolymerLatex Group Consolidated statement of comprehensive income for the years ended 31 December 2009, 2008 and 2007 Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 (Loss)/proﬁt for the year (12,502) (28,597) 1,713

Exchange differences on translation of foreign operations 702 (1,298) (1,076)

Other comprehensive income/(expense) for the period 702 (1,298) (1,076)

Total comprehensive (loss)/income for the period (11,800) (29,895) 637

113 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PolymerLatex Group Consolidated statement of changes in equity for the years ended 31 December 2009, 2008 and 2007

Hedging and Share Share translation Retained capital premium reserve earnings Total d’000 d’000 d’000 d’000 d’000 At 1 January 2007 25 4,720 167 (3,939) 973

Proﬁt for the period — — — 1,713 1,713 Other comprehensive income for the period — — (1,076) — (1,076)

Total comprehensive income for the period — — (1,076) 1,713 637

At 31 December 2007 25 4,720 (909) (2,226) 1,610

Hedging and Share Share translation Retained capital premium reserve earnings Total d’000 d’000 d’000 d’000 d’000 At 1 January 2008 25 4,720 (909) (2,226) 1,610

Loss for the period — — — (28,597) (28,597) Other comprehensive income for the period — — (1,298) — (1,298)

Total comprehensive income for the period — — (1,298) (28,597) (29,895)

At 31 December 2008 25 4,720 (2,207) (30,823) (28,285)

Hedging and Share Share translation Retained capital premium reserve earnings Total d’000 d’000 d’000 d’000 d’000 At 1 January 2009 25 4,720 (2,207) (30,823) (28,285)

Loss for the period — — — (12,502) (12,502) Other comprehensive income for the period — — 702 — 702

Total comprehensive income for the period — — 702 (12,502) (11,800)

At 31 December 2009 25 4,720 (1,505) (43,325) (40,085)

114 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PolymerLatex Group Consolidated balance sheet at 31 December 2009, 2008 and 2007

31 December 31 December 31 December 2009 2008 2007 Note d’000 d’000 d’000 Non-current assets Goodwill 9 119,880 119,880 119,880 Other intangible assets 10 55,581 66,365 80,074 Property, plant and equipment 11 110,056 99,828 99,295 Deferred tax assets 19 10,835 14,246 12,793 Financial assets 15 2,089 1,739 1,663

Total non-current assets 298,441 302,058 313,705

Current assets Inventories 12 19,342 21,367 23,332 Trade and other receivables 13 51,413 34,807 42,318 Cash and cash equivalents 14 23,354 22,964 11,421 Derivatives at fair value 15 1,286 2,535 1,112

Total current assets 95,395 81,673 78,183

Current liabilities Borrowings 16 (49,391) (28,282) (6,051) Trade and other payables 18 (72,437) (54,925) (60,430) Current tax liability 19 (1,589) (3,155) (1,355) Derivatives at fair value 17 (9,561) (9,121) (992)

Total current liabilities (132,978) (95,483) (68,828)

Non-current liabilities Borrowings 16 (235,114) (244,180) (248,524) Provisions 20 (1,267) (1,307) (7) Deferred tax liability 19 (26,389) (33,483) (31,760) Post retirement beneﬁt obligations 21 (38,173) (37,563) (41,159)

Total non-current liabilities (300,943) (316,533) (321,450)

Net (liabilities)/assets (40,085) (28,285) 1,610

Equity Called up share capital 22 25 25 25 Share premium 4,720 4,720 4,720 Hedging and translation reserve (1,505) (2,207) (909) Retained earnings (43,325) (30,823) (2,226)

Total (deﬁcit)/equity (40,085) (28,285) 1,610

115 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PolymerLatex Group Consolidated statement of cash ﬂows for the years ended 31 December 2009, 2008 and 2007

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Cash ﬂows from operating activities (Loss)/proﬁt for the year (12,502) (28,597) 1,713 Adjustments for: Investment revenues (102) (774) (479) Other gains and losses 6,035 4,323 (403) Finance costs 17,687 24,202 24,914 Income tax expense/(credit) 1,366 6,254 (330) Depreciation property, plant and equipment 17,402 24,444 20,597 Loss on disposal of property, plant and equipment 5 48 290 Amortisation of intangible assets 10,813 14,054 14,042

Operating cash ﬂows before movements in working capital 40,704 43,954 60,344 Decrease/(increase) in inventories 2,025 1,965 (1,852) (Increase)/decrease in receivables (17,821) 7,864 (6,088) Increase/(decrease) in payables 22,947 (6,300) (3,226)

Cash generated by operations 47,855 47,483 49,178 Income tax paid (5,398) (4,538) (6,352) Interest paid (11,573) (21,942) (22,757)

Net cash from operating activities 30,884 21,003 20,069

Investing activities Interest received 102 774 479 Proceeds from the disposal of property, plant and equipment 16 6 40 Purchases of property, plant and equipment (28,070) (25,768) (8,463) Purchase of intangible assets (18) (309) (192)

Net cash used in investing activities (27,970) (25,297) (8,136)

Financing activities Repayment of borrowings (5,430) (2,578) (10,925) New bank loans raised 2,250 19,889 — Movements in other short term ﬁnancial liabilities (553) (656) (1,857)

Net cash (used in)/from ﬁnancing activities (3,733) 16,655 (12,782)

Effects of foreign exchange on cash balances 1,209 (818) (126)

Net change in cash and cash equivalents 390 11,543 (975) Cash and cash equivalents at the beginning of the year 22,964 11,421 12,396

Cash and cash equivalents at end of the year 23,354 22,964 11,421

116 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PolymerLatex Group Notes to the consolidated financial information for the years ended 3 December 2009, 2008 and 2007 1. GENERAL INFORMATION PolymerLatex Deutschland Beteiligungsgesellschaft mbH (‘‘the Company’’) is a limited liability company incorporated in Germany. The address of the registered office is Werrastrasse 10, 45678 Marl, Germany. These financial statements are presented in Euros because that is the currency of the primary economic environment in which the Group operates. Foreign operations are included in accordance with the policies set out in note 2.

2. FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) AND STANDARDS ISSUED BUT NOT YET EFFECTIVE 2.1 Principles for the first time adoption of IFRS The consolidated financial information of the Group have been prepared in accordance with IFRS (International Financial Reporting Standards) for the first time in financial year 2009. All of the standards of the IASB (International Accounting Standards Board) that were the effective at each reporting date and all of the valid interpretations of the IFRIC (International Financial Reporting Interpretation Committee) have been taken into account, except that the Group did not elect to early adopt certain standards and interpretations issued but not yet effective at each reporting date (as described in 2.2 below). Previously, the Group’s financial information was prepared in accordance with German Commercial Law (HGB). The financial information of the Group for the financial years 2007, 2008 and 2009 have been restated and the necessary adjustments were made in order to comply with IFRS. The effects of the restatement on the Group’s equity at the date of transition (1 January 2007), at the end of the first year of transition (31 December 2007) and the effects on the net result of the transition year (2007) are, as required by IFRS 1, presented in 2.4 below. 2.2 Changes in accounting policies and IFRS The Group has applied the same accounting policies throughout the period 2007 to 2009. Those accounting policies comply with the IFRS in effect at 31 December 2009. Changes of IFRSs and IFRICSs during that period did not have a significant impact on the financial information of the Group. The following table shows the major new or amended IFRSs and IFRICs that were issued during 2007, 2008 and 2009 and their effect on the Group’s financial information: IFRS 8 Operating Segments (effective 1 January 2009) Changes in presentation of financial information retrospectively applied IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Not applicable for the Group Jointly Controlled Entity or Associate (effective 1 July 2009) IFRS 2 Vesting Conditions and Cancellations Not applicable for the Group (effective 1 January 2009) IFRS 7 Enhancing Disclosures about Fair Value and Liquidity Enhanced disclosures Risk (effective 1 January 2009) retrospectively applied IAS 1 (rev.) Presentation of Financial Statements (effective Changes in presentation of 1 January 2009) financial information retrospectively applied IAS 23 (rev.) Borrowing Cost (effective 1 January 2009) Not applicable for the Group IAS 32 & IAS 1 Puttable Financial Instruments and Not applicable for the Group Obligations arising on Liquidation (effective 1 January 2009) IAS 39 Clarification regarding Assessment of Embedded Not applicable for the Group Derivatives (effective for annual periods ending on or after 30 June 2009)

117 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS IFRIC 11, IFRS 2 – Group and Treasury Share Transactions Not applicable for the Group (effective 1 March 2007) IFRIC 12, Service Concession Arrangements Not applicable for the Group (effective 1 January 2008) IFRIC 13 Customer Loyalty Programmes Not applicable for the Group (effective 1 July 2008) IFRIC 14, IAS 19 – The Limit on a Deﬁned Beneﬁt Asset, Not applicable for the Group Minimum Funding Requirements and Their Interaction (effective 1 January 2008) IFRIC 15, Agreements for the Construction of Real Estate Not applicable for the Group (effective 1 January 2009) IFRIC 16, Hedges of a Net Investment in a Foreign Operation Not applicable for the Group (effective 1 October 2008) IFRIC 18, Transfers of Assets from Customers (effective for Not applicable for the Group Transfers received on or after 1 July 2009)

2.3 Standards and interpretations issued but not yet effective at 31 December 2009 At the date of authorisation of this ﬁnancial information, the following Standards and Interpretations which have not been applied in these ﬁnancial statements were in issue but not yet effective:

New Standards Effective for annual periods New standard: * IFRS 9 Financial Instruments: Classification and Measurement (effective date 1 January 2013) Amendments to standards: * IFRS 1 First-time Adoption of IFRSs: Exemption from Comparative IFRS 7 Disclosures * IFRS 2 Group Cash-settled Share-based Payments (1 January 2010) * IFRS 3 & IAS 27 (rev.) Business Combinations (effective for financial years beginning 1 July 2009) * IAS 24 (rev.) Related Party Disclosures (1 January 2011) * IAS 32 Classification of Rights Issues (1 February 2010) * IAS 39 Eligible Hedged Items (effective for financial years beginning 1 July 2009) * Various Improvements to IFRSs Interpretations New Interpretations: * IFRIC 17 Distributions of Non-cash Assets to Owners (effective for financial years beginning 1 July 2009) * IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (1 July 2010) Amendments to Interpretations: * IFRIC 14 Prepayments of a Minimum Funding Requirement (1 January 2011) Management anticipates that the adoption of these Standards and Interpretations will not have a material impact on the consolidated financial information of the Group in future periods.

118 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 2.4 Reconciliation of equity and net result between ‘‘HGB’’ (German GAAP) and IFRS in the year of transition to IFRS

31 December 2009 Effects of adoption of IFRS on equity Notes d’000 Equity according to HGB (68,420)

Effects of adoption of IFRS on: Goodwill amortisation a) 8,894 Reversal of general provisions on inventories b) (46) Reversal of general provisions on account receivables c) (61) Foreign currency exchange result d) 58 Positive fair market values of derivatives e) (6,853) Provisions for pensions f) (2) Deferred taxes g) 686 Bromsgrove closure h) 4,713 Restructuring i) 1,568 Covenant reset j) 4,550

Effects of adoption of IFRS 13,507

Carry forward of adoption effects from previous year 14,828 Equity according to IFRS (40,085)

Year ended 31 December 2009 Effects of adoption of IFRS on result Notes d’000 Result according to HGB (26,107)

Effects of adoption of IFRS on: Goodwill amortisation a) 8,894 Reversal of general provisions on inventories b) (23) Reversal of general provisions on account receivables c) (37) Foreign currency exchange result d) 196 Positive fair market values of derivatives e) (6,953) Provisions for pensions f) (2) Deferred taxes g) 686 Covenant re-set fee j) 4,550 Restructuring l) 6,294

Effects of adoption of IFRS 13,605

Result according to IFRS (12,502)

119 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 31 December 2008 Effects of adoption of IFRS on equity Notes d’000 Equity according to HGB (43,113)

Effects of adoption of IFRS on: Goodwill amortisation a) 9,389 Reversal of general provisions on inventories b) 43 Reversal of general provisions on account receivables c) 107 Foreign currency exchange result d) 476 Positive fair market values of derivatives e) (943) Provisions for pensions f) 21 Deferred taxes g) (5,485) Bromsgrove closure h) (105) Restructuring i) (1,307)

Effects of adoption of IFRS 1,560

Carry forward of adoption effects from previous year 12,632 Equity according to IFRS (28,285)

Year ended 31 December 2008 Effects of adoption of IFRS on result d’000 Result according to HGB (26,891)

Effects of adoption of IFRS on: Goodwill amortisation a) 9,389 Reversal of general provisions on inventories b) 43 Reversal of general provisions on account receivables c) 82 Foreign currency exchange result d) 137 Positive fair market values of derivatives e) 437 Provisions for pensions f) (21) Deferred taxes g) (5,485) Restructuring i) (6,288)

Effects of adoption of IFRS (1,706)

Result according to IFRS (28,597)

120 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 31 December 2007 Effects of adoption of IFRS on equity Notes d’000 Equity according to HGB (14,662)

Effects of adoption of IFRS on: Goodwill amortisation a) 8,940 Reversal of general provisions on inventories b) 175 Reversal of general provisions on accounts receivables c) 170 Foreign currency exchange result d) 66 Positive fair market values of derivatives e) 2,530 Provisions for pensions f) (4) Deferred taxes g) 4,395

Effects of adoption of IFRS 16,272

Equity according to IFRS 1,610

Year ended 31 December 2007 Effects of adoption of IFRS on result Notes d’000 Result according to HGB (10,919)

Effects of adoption of IFRS on: Goodwill amortisation a) 8,940 Reversal of general provisions on inventories b) 34 Reversal of general provisions on accounts receivables c) 64 Foreign currency exchange result d) 79 Positive fair market values of derivatives e) 474 Provisions for pensions f) (105) Deferred taxes g) 3,146

Effects of adoption of IFRS 12,632

Result according to IFRS 1,713

There were no IFRS journals affecting cash ﬂows for the years ended 31 December 2007, 2008 or 2009.

121 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Effects of adoption of IFRS on equity Notes 1 January 2006 d’000 Equity according to HGB (2,669) Effects of adoption of IFRS on: Reversal of general provisions on inventories b) 141 Reversal of general provisions on account receivables c) 107 Foreign currency exchange result d) (8) Positive fair market values of derivatives e) 1,395 Provisions for pensions f) 69 Deferred taxes g) 1,938

Effects of adoption of IFRS 3,642

Equity according to IFRS 973

a) Goodwill Under IFRS, goodwill is not amortised but is measured at cost less impairment losses. Under previous GAAP (HGB), goodwill was amortized on a straight-line basis through proﬁt or loss based on an assessment of the economic life of the asset, subject to a maximum of 15 years. The effect of the change is an increase in equity as at 31 December 2007 of d8,940,000 (dnil as at 1 January 2007) and an increase in proﬁt for 2007 of d8,940,000. The change does not affect the equity at 1 January 2007. The change has no tax effect as deferred taxes are not recognised for temporary differences arising from Goodwill for which amortisation is not deductible for tax purposes.

b) Inventories Inventories are measured at the lower of cost and net realizable value. Under previous GAAP a general allowance had been recorded. The effect of the change is an increase in equity as at 31 December 2007 of d175,000 (d141,000 as at 1 January 2007) and a reduction in the loss before tax for 2007 of d34,000.

c) Reversal of general provisions on accounts receivables Under previous GAAP a general provision had been recorded against account receivables. The effect of the reverse of this provision is an increase in equity as at 31 December 2007 of d170,000 (d106,000 as at 1 January 2007) and a decrease in the loss before tax of d64,000.

d) Foreign currency exchange results Under previous GAAP account receivables, other assets and payables were measured at their nominal value less impairments (if any). Unrealised gains and losses caused by changes in foreign currencies were not recorded. According to IAS 39 accounts receivables and payables are measured at amortised cost using the effective interest method after initial recognition. Unrealised gains resulting from movements in the foreign currencies are recognised in proﬁt and loss. The effect of the changes is an increase in equity as at 31 December 2007 in the amount of d14,000 (d12,000 as at 1 January 2007) and a decrease in the loss before tax for 2007 of d25,000.

e) Derivatives Derivative ﬁnancial instruments are initially recognised at fair value and subsequently measured at fair value according to IAS 39. Changes in the fair value are recognised in proﬁt or loss. Under previous GAAP unrealised gains and losses were not recorded. The effect of the change is an increase in equity as at 31 December 2007 of d2,530,000 (d2,056,000 as at 1 January 2007) and an increase in the result before taxes for 2007 of d474,000.

f) Pensions In one subsidiary the pension provision under previous GAAP was not in line with IAS 19. The effect of the change is a decrease in equity as at 31 December 2007 of d4,000 (increase of d101,000 as at 1 January 2007) and an increase in the loss before tax for 2007 of d105,000.

122 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS g) Deferred taxes Under previous GAAP the accounting option not to capitalise deferred tax assets on losses carried forward in certain countries was used. According to IAS 12 deferred tax assets shall be recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable proﬁts will be available against which the unused tax losses can be utilised. The effect of the change is an increase in equity as at 31 December 2007 of d4,395,000 (d1,249,000 as at 1 January 2007) and a decrease in the loss before tax for 2007 of d3,146,000.

h) Bromsgrove closure Under previous GAAP to closure of the Bromsgrove site in the United Kingdom was recorded in the year ended 31 December 2009 instead of 2008 when the site closed. The effect of the change is decline in equity at 31 December 2008 of d105,000.

i) Restructuring Under previous GAAP non-current provisions relating to onerous leases were not discounted. Under IFRS these provisions should be discounted. The effect of the change is a decline in equity at 31 December 2008 of d1,307,000 and a reduction in the loss before tax for 2008 of d6,288,000.

j) Covenant reset Under previous GAAP fees in relation to a convenant reset were expensed to the income statement. Under IFRS a substantial modification of the terms of an existing financial liability or a part of it shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The effect of the change is an increase in equity at 31 December 2009 of d4,550,000 and an increase in the result before tax of d4,550,000.

3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Basis of accounting The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have been prepared on the historical cost basis, except for the revaluation of financial instruments. In addition, the financial statements have been prepared on a going concern basis. The principal accounting policies adopted are set out below.

3.2 Underlying performance and special items Underlying performance comprises the performance of the Group excluding certain special items (as deﬁned in note 27) which, in the opinion of the directors, are non-recurring or are of a nature that detracts from the user’s ability to understand the performance of the Group. Management monitors the performance of the Group using underlying performance. A full list of special items is disclosed in note 27.

3.3 Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) (together ‘‘the Group’’) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

3.4 Business combinations and goodwill Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. There were no business combinations during the period 2007 to 2009.

123 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The carrying amount of goodwill is the result of transactions under common control prior to 1 January 2007. Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. 3.5 Interests in joint ventures A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control (i.e. when the strategic financial and operating policy decisions relating to the activities of the joint venture require the unanimous consent of the parties sharing control). When a Group entity undertakes its activities under joint venture arrangements directly, the Group’s share of jointly controlled assets and any liabilities incurred jointly with other venturers are recognised in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group’s share of the output of jointly controlled assets, and its share of joint venture expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to/from the Group and their amount can be measured reliably. Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities. The Group reports its interests in jointly controlled entities using proportionate consolidation. The Group’s share of the assets, liabilities, income and expenses of jointly controlled entities is combined with the equivalent items in the consolidated financial statements on a line-by-line basis. Any goodwill arising on the acquisition of the Group’s interest in a jointly controlled entity is accounted for in accordance with the Group’s accounting policy for goodwill arising in a business combination. When a Group entity transacts with a jointly controlled entity of the Group, unrealised profits and losses are eliminated to the extent of the Group’s interest in the joint venture. 3.6 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Revenue from the sale of goods is recognised when all the following conditions are satisfied: * the Group has transferred to the buyer the significant risks and rewards of ownership of the goods; * the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; * the amount of revenue can be measured reliably; * it is probable that the economic benefits associated with the transaction will flow to the entity; and * the costs incurred or to be incurred in respect of the transaction can be measured reliably. Interest revenue is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition. 3.7 Operating leases Operating lease payments are expensed on a straight-line basis to the income statement over the term of the relevant lease. Any benefits received as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

124 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 3.8 Foreign currencies In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. On consolidation, the assets and liabilities of the Group’s overseas operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of. 3.9 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. 3.10 Retirement benefit costs Contributions to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the end of each reporting period. Actuarial gains and losses that exceed 10 per cent of the greater of the present value of the Group’s defined benefit obligation and the fair value of plan assets as at the end of the prior year are amortised over the expected average remaining working lives of the participating employees. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the statement of financial position represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and as reduced by the fair value of plan assets, if any. 3.11 Taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

125 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 3.12 Property, plant and equipment Property, plant and equipment is stated at cost, net of depreciation and any provision for impairment. The cost or valuation of property, plant and equipment is depreciated on a straight-line basis over its expected useful life as follows:

Buildings and infrastructure between 6 to 50 years Machinery and technical equipment between 3 to 20 years Furniture and other equipment between 3 and 12 years 3.13 Intangible assets Intangible assets acquired separately Intangible assets acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives of 3 to 17 years. The estimated useful life and amortisation method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets acquired in a business combination Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. 3.14 Impairment of tangible and intangible assets excluding goodwill At the balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The Group does not hold intangible assets with indefinite useful lives. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. 3.15 Inventories Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Provision is made for obsolete, slow-moving or defective items where appropriate. 3.16 Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

126 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Onerous contracts Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Restructurings A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity. Warranties Provisions for the expected cost of warranty obligations under local sale of goods legislation are recognised at the date of sale of the relevant products, at the directors’ best estimate of the expenditure required to settle the Group’s obligation. 3.17 Financial assets and liabilities All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value. Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (‘‘FVTPL’’), ‘and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Effective interest method The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Financial assets at FVTPL Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL. Financial assets classified as held for trading consist of derivatives that are not designated and effective as a hedging instrument. A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

* such designation eliminates or signiﬁcantly reduces a measurement or recognition inconsistency that would otherwise arise; or

127 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS * the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

* it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL. Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Loans and receivables Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. Loans and receivables are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. Trade receivables, are assessed to be impaired individually. Objective evidence of impairment for receivables could include the Group’s past experience of collecting payments. The carrying amount of trade receivables is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. Based on this criteria, management has determined that the accounts receivables sold under a factoring agreement (as further described below) qualify for derecognition. Financial liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. 3.18 Derivative financial instruments The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including foreign exchange forward contracts and interest rate swaps. Further details of derivative financial instruments are disclosed in notes 15 and 17. Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately.

128 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS A derivative with a positive fair value is recognised as a ﬁnancial asset; a derivative with a negative fair value is recognised as a ﬁnancial liability. A derivative is presented as a non- current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

4. CRITICAL ACCOUNTING JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY In the process of applying the Group’s accounting policies, which are described above, management has made the following judgements and estimates that have the most significant effect on the amounts to be recognised in the financial statements. Useful lives of non-current assets The Group reviews the estimated useful lives of non-current assets at the end of each annual reporting period. No changes to the useful lives were deemed necessary during the 3 year period. Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash- generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Post retirement benefit obligations Included in the actuaries’ calculation of the post retirement benefit obligations are a number of assumptions. These are shown in detail in note 21. Provisions Other provisions are measured in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets using the best estimate of the extent of the obligation. Long-term portions of provisions are discounted to their present value. Changes in the estimate of projected obligation are recognized in the cost of goods sold, selling expenses, research and development expenses or general administration expenses as appropriate. Other employee benefits mainly include jubilee and early retirement benefits. Such benefits are calculated by an independent actuary based on similar principles as for pension obligations (as described above). The Group recognises provisions for litigations where reasonable estimates are possible. These provisions include all estimated legal fees and costs of potential settlements. The amounts are based upon information and cost estimates provided by the Group’s attorneys. The provisions are reviewed with the Group’s attorneys and updated at regular intervals not exceeding three months. Receivables Receivables and other assets are carried at amortised cost. Any necessary write downs are made on the basis of the probability of default. Receivables are partially sold without recourse (with insignificant risks remaining for the Group) to a factoring company. Based on expert advice received, management concluded that based on the terms of the factoring agreement the sales under this agreement qualify for derecognition of the receivables sold under the provisions of IAS 39. Deferred taxes Deferred taxes are calculated in accordance with IAS 12 Income Taxes. Deferred taxes arise from temporary differences between the carrying amounts of assets or liabilities and their values for taxation and from realisable tax loss carry forwards. Deferred taxes are calculated at the rates which – on the basis of the statutory regulations in force, or already enacted in relation to future periods, as of the closing date – are expected to apply in the individual countries at the time of realisation. Deferred tax assets are recognised only to the extent that it is probable that sufficient taxable profits will be available in order to utilise the temporary difference or tax loss. Further estimates and assumptions that may affect reporting in the various item categories of the financial statements are described in the accounting policies above.

129 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 5. REVENUE The following is an analysis of the Group’s revenue:

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Carpets 67,277 97,978 87,723 Moulded foam 51,692 65,953 55,897 Paper 111,502 151,815 149,793 Construction and paints 51,970 59,762 56,142 Functional polymers 57,791 74,185 72,278 Dipped/gloves 44,759 62,222 54,947 Sideline operations 1,679 4,160 16,525

Revenue from the sale of goods 386,670 516,075 493,305 Investment income 102 774 479 Other operating income 905 602 322

Total revenues 387,677 517,451 494,106

The following is an analysis of the Group’s revenue from the sale of goods from external customers by geographical location of the customer:

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Germany 100,540 126,567 125,177 Rest of Europe 196,540 272,307 261,251 North America 9,162 11,241 10,615 Asia/Paciﬁc 49,932 66,616 61,112 Rest of World 30,496 39,344 35,150

386,670 516,075 493,305

130 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 6. OPERATING PROFIT Operating proﬁt is stated after charging/(crediting) the following:

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Depreciation of property, plant and equipment 17,402 24,444 20,597 Amortisation of intangible assets 10,813 14,054 14,042 Net foreign exchange loss/(gains) 2,226 1,561 (4,155) Research and development expenditure 4,675 5,293 6,229 Cost of inventories recognised as expense 221,778 350,534 324,256 Staff costs (see note 7) 43,128 40,357 40,939 Loss on disposal of property, plant and equipment 5 48 290 Impairment loss on trade receivables 1,559 1,973 1,139 Reversal of impairment losses recognised (48) (77) (161)

Revenue 386,670 516,075 493,305 Cost of sales (281,563) (414,809) (385,454)

Gross proﬁt 105,107 101,266 107,851 Distribution costs (52,429) (57,121) (54,818)

Administrative expenses (40,194) (38,737) (27,618)

Operating proﬁt 12,484 5,408 25,415

7. EMPLOYEE COSTS

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Employee beneﬁts expense Wages and salaries 35,370 32,206 32,644 Social security 5,035 5,485 5,575 Pension expenses(1) 2,629 2,517 2,690 Expenses for welfare 94 149 30

Total employee beneﬁts expense 43,128 40,357 40,939

(1) Pension expense include the cost of defined contribution and defined benefit plans. The cost of the defined benefit pension plans are presented in note 21.

The average monthly number of employees (including executive directors) was:

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 Number Number Number General administration 81 74 63 Research and development 51 53 45 Production and engineering 393 373 391 Marketing 104 106 122

629 606 621

131 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 8. FINANCE COSTS

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Interest on loans and bank overdrafts (15,147) (20,278) (21,171) Interest on factoring facility (858) (2,288) (2,017) Interest expenses on pensions and similar long-term obligations (1,682) (1,636) (1,726)

(17,687) (24,202) (24,914)

Interest income 102 774 479

Fair value adjustments: Gains and losses from derivative instruments (5,869) (3,783) 498 Impairments on ﬁnancial assets (166) (540) (95)

(6,035) (4,323) 403

(23,620) (27,751) (24,032)

9. GOODWILL

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Cost 119,880 119,880 119,880 Accumulated impairment losses — — —

119,880 119,880 119,880

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. Goodwill is tested for impairment on an annual basis or more frequently if there are any indications that goodwill might be impaired. Its recoverable amount determined based upon a value-in-use calculation, is higher than its carrying amount at 31 December 2009. The basis for the calculation of the recoverable amounts is the detailed mid-term plan 2010 to 2015 (‘phase I’) and the long term plan 2016 to 2020 (‘phase II’). A discount rate of 9% has been used, being consistent with that used by Yule Catto & Co plc. Growth in phase I is mainly driven by volume (ranging from 9.2% in 2010 to 3.1% in 2015) whereas the price per unit is assumed to remain stable. Sales prices were determined based on a long term trend. In phase II, projections were limited to EBITDA, EBIT and operating, investing and financing cash flows, resulting in a cumulative growth of operating cash flows of 16% (in 5 years). No further growth was taken into account for the terminal year. Management’s assumptions are based on experience and industry trends. In phase I management expects the growth to exceed the growth of the industry as a whole. The impairment test is calculated based on the Group as a whole. This is because the goodwill is not allocated to the individual cash generating units of the Group and management only monitors goodwill at a consolidated level.

132 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 10. OTHER INTANGIBLE ASSETS 10.1 Movements in intangible assets 2009

Licences and Long-term intellectual customer property relationship Total d’000 d’000 d’000 Cost Balance at 1 January 2009 29,723 96,472 126,195 Additions 18 — 18 Retirements (332) — (332) Effect of foreign currency exchange differences 5 — 5 Transfers 11 — 11

Balance at 31 December 2009 29,425 96,472 125,897

Accumulated amortisation and impairment Balance at 1 January 2009 (25,261) (34,569) (59,830) Amortisation expense (1,166) (9,647) (10,813) Retirements 332 — 332 Effect of foreign currency exchange differences (5) — (5)

Balance at 31 December 2009 (26,100) (44,216) (70,316)

Net carrying amounts 31 December 2009 3,325 52,256 55,581

10.2 Movements in intangible assets 2008

Licences and Long-term intellectual customer property relationship Total d’000 d’000 d’000 Cost Balance at 1 January 2008 36,583 96,472 133,055 Additions 309 — 309 Retirements (7,140) — (7,140) Effect of foreign currency exchange differences (99) — (99) Transfers 70 — 70

Balance at 31 December 2008 29,723 96,472 126,195

Accumulated amortisation and impairment Balance at 1 January 2008 (28,059) (24,922) (52,981) Amortisation expense (4,407) (9,647) (14,054) Retirements 7,140 — 7,140 Effect of foreign currency exchange differences 65 — 65

Balance at 31 December 2008 (25,261) (34,569) (59,830)

Net carrying amounts 31 December 2008 4,462 61,903 66,365

133 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 10.3 Movements in intangible assets 2007

Licences and Long-term intellectual customer property relationship Total d’000 d’000 d’000 Cost Balance at 1 January 2007 36,620 96,472 133,092 Additions 192 — 192 Retirements (220) — (220) Effect of foreign currency exchange differences (105) — (105) Transfers 96 — 96

Balance at 31 December 2007 36,583 96,472 133,055

Accumulated amortisation and impairment Balance at 1 January 2007 (23,938) (15,275) (39,213) Amortisation expense (4,395) (9,647) (14,042) Retirements 220 — 220 Effect of foreign currency exchange differences 54 — 54

Balance at 31 December 2007 (28,059) (24,922) (52,981)

Net carrying amounts 31 December 2007 8,524 71,550 80,074

Including within the amortisation expenses in 2009 and 2008 is expense of d182,000 and d2,880,000 respectively relating to the impairment of patents of the Group. In 2007 the amortisation expense includes d1,618,000 relating to the impairment of a long term supply contract.

134 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 11. Property, plant and equipment 11.1 Movements of property, plant and equipment – 2009 Machinery and furniture, ﬁxtures, technical and Land and Construction other buildings in progress equipment Total d’000 d’000 d’000 d’000 Cost Balance at 1 January 2009 27,326 23,295 224,252 274,873 Additions 4,089 1,241 22,740 28,070 Disposals — — (529) (529) Effect of foreign currency exchange differences 195 (447) 1,350 1,098 Transfers 3,323 (23,114) 19,791 —

Balance at 31 December 2009 34,933 975 267,604 303,512

Accumulated depreciation and impairment Balance at 1 January 2009 (14,306) (235) (160,504) (175,045) Eliminated on disposals of assets — — 509 509 Depreciation expense (1,265) — (16,137) (17,402) Effect of foreign currency exchange differences (71) (18) (1,429) (1,518) Transfers — 253 (253) —

Balance at 31 December 2009 (15,642) — (177,814) (193,456)

Net book value at 31 December 2009 19,291 975 89,790 110,056

11.2 Movements of property, plant and equipment – 2008 Machinery and furniture, ﬁxtures, technical and Land and Construction other buildings in progress equipment Total d’000 d’000 d’000 d’000 Cost Balance at 1 January 2008 28,088 4,469 225,664 258,221 Additions 54 22,013 3,701 25,768 Disposals — — (2,911) (2,911) Effect of foreign currency exchange differences (822) 214 (5,597) (6,205) Transfers 6 (3,401) 3,395 —

Balance at 31 December 2008 27,326 23,295 224,252 274,873

Accumulated depreciation and impairment Balance at 1 January 2008 (12,323) — (146,603) (158,926) Eliminated on disposals of assets — — 2,856 2,856 Depreciation expense (2,194) (283) (21,967) (24,444) Effect of foreign currency exchange differences 211 48 5,210 5,469

Balance at 31 December 2008 (14,306) (235) (160,504) (175,045)

Net book value at 31 December 2008 13,020 23,060 63,748 99,828

135 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 11.3 Movements of property, plant and equipment – 2007

Machinery and furniture, ﬁxtures, technical and Land and Construction other buildings in progress equipment Total d’000 d’000 d’000 d’000 Cost Balance at 1 January 2007 27,475 9,239 218,162 254,876 Additions 75 6,685 1,704 8,464 Disposals (5) — (2,434) (2,439) Effect of foreign currency exchange differences (327) (142) (2,211) (2,680) Transfers 870 (11,313) 10,443 —

Balance at 31 December 2007 28,088 4,469 225,664 258,221

Accumulated depreciation and impairment Balance at 1 January 2007 (10,860) — (131,316) (142,176) Eliminated on disposals of assets 5 — 2,104 2,109 Depreciation expense (1,502) — (19,095) (20,597) Effect of foreign currency exchange differences 34 — 1,704 1,738

Balance at 31 December 2007 (12,323) — (146,603) (158,926)

Net book value at 31 December 2007 15,765 4,469 79,061 99,295

12. INVENTORIES Inventories consist of the following:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Raw materials, ancillary materials and supplies 6,554 4,433 4,551 Finished goods 11,592 15,553 17,223 Goods purchased for resale 1,196 1,381 1,558

19,342 21,367 23,332

136 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 13. TRADE AND OTHER RECEIVABLES 13.1 Trade and other receivables are composed of:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Trade receivables 48,391 28,688 21,785 Allowance for doubtful debts (3,248) (2,698) (1,676)

45,143 25,990 20,109

Income tax receivables 39 1,254 901 Claims for VAT and other taxes 4,459 1,714 7,824 Short-term cash-pool receivables — — 74 Payroll receivables 94 177 81 Receivables from licences 177 162 199 Receivables from factoring — 4,546 12,169 Remaining other assets 1,501 964 962

6,270 8,817 22,209

51,413 34,807 42,318

13.2 Movement in the allowance for doubtful debts

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Balance at beginning of the year 2,698 1,676 727 Impairment losses recognised 1,559 1,973 1,139 Impairment losses reversed (949) (457) (114) Amounts recovered during the year (60) (494) (76) Foreign exchange translation losses 4 — —

Balance at end of the year 3,248 2,698 1,676

14. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash at hand, current bank accounts and short-term investments with credit institutions as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Cash and cash equivalents Cash in hand 2 5 3 Current bank accounts 10,852 16,459 7,918 Short term investments with banks 12,500 6,500 3,500

23,354 22,964 11,421

137 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 15. FINANCIAL ASSETS

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Funded investments 1,203 922 920 Other assets 886 817 743

2,089 1,739 1,663

Funded investments comprise a deposit account in connection with liabilities arising from the Old Age Pensioners’ Part-Time Work Act. Other assets represent a loan to a leasing company who built a new administrative building for the Group.

Financial assets designated as at FVTPL Financial assets designated as at FVTPL comprise only investments in securities held in escrow to fund payment of partial retirement, which employees accrue during the active phase of early retirements, against the risk of insolvency.

Derivatives These derivatives comprise foreign currency forward contracts and interest rate swaps, both at fair- market values.

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Derivatives at fair value 1,286 2,535 1,112

16. BORROWINGS

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 UBS Tranche A 15,837 24,498 26,000 UBS Tranche B 83,763 85,000 85,000 UBS Tranche C 83,763 85,000 85,000 UBS Tranche D 55,000 55,000 55,000 Other bank loan 2,822 3,122 3,075 Other short term loans — — 500 Liabilities to related parties 5,493 — — Liabilities from factoring 20,269 — — Utilisation of revolving credit facility 22,108 19,842 —

289,055 272,462 254,575 Consideration of covenant reset fees (4,550) — —

284,505 272,462 254,075

As disclosed in the balance sheet: Current liabilities 49,391 28,282 6,051 Non-current liabilities 235,114 244,180 248,524

284,505 272,462 254,075

Liabilities from factoring Liabilities from factoring represent charges due to the factoring company, in addition to cash payments made from customers to the Group which were payable to the factoring company.

138 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Liabilities to related parties The liabilities to related parties consist of syndicate loans of different facilities with an amount of d5,493,000 which were acquired by TowerBrook Capital Partners LLP., Wilmington, USA, from members of the ﬁnance syndicate.

16.1 Summary of borrowing arrangements 2009 The revolving credit facility allows for a maximum drawdown of d30 million and is available until June 2013. The variable rates of interest contained in the ﬁnancing agreement are hedged by corresponding interest swaps until 31 December 2011. However, no hedge accounting in accordance with IAS 39 is applied. The assets of the PolymerLatex Group companies were provided as collateral for the lending syndicate in the form of pledges, security transfers or global assignment agreements.

17. RISK FINANCIAL AND CAPITAL RISK MANAGEMENT 17.1 Financial risk management The Group is exposed to credit risks, market risks and liquidity risks that could materially affect its net assets, ﬁnancial position and results of operations in the normal course of business

Credit risk Credit risks could mainly arise from the possibility of impairment losses on trade receivables because counterparties may be unable to meet their payment obligations. As part of its Credit Risk Management policy the Group principally strives to cover all of its receivables positions by a credit insurance. Under an agreement with a factoring company, the Group is selling a net value of up to d35,000,000 receivables. Only insured receivables are being sold to the factoring company. Besides the external insurance limits the Group’s Credit Risk Management is working with internal limits that are deﬁned for each customer. These internal limits are based on the ﬁnancial strength and the payment history of each individual customer. Furthermore the Group’s Credit Risk Management is based on a close tracking of payment terms and monitoring of overdue amounts. Credit Risk Management meetings are conducted with the different industry teams on a monthly basis.

Market risk a) Currency risk Since the Group conducts a portion of its operations outside the Euro currency zone, fluctuations in currency exchange rates can materially affect earnings. Currency risks exist with respect to receivables, payables, cash and cash equivalents that are not denominated in a company’s functional currency. These risks are particularly significant for the US dollar. Currency risks are identified, analysed and managed centrally and systematically. From a group perspective, a 10% increase or decrease in the Euro against all relevant foreign currencies (mainly USD), would have resulted in an increase of profit in 2009 of d272,000, in 2008 of d336,000 and a decrease in 2007 of d1,189,000, derived from F/X- denominated asset and liability revaluations. The 10% sensitivity corresponds to the value reported to management as part of internal risk management procedures and represents management’s assessment of the potential effect of a change in the exchange rate. The sensitivity analysis only covers outstanding foreign currency monetary items at the reporting date and shows the effect of a 10% change in the exchange rate at that date. The sensitivity analysis covers financial assets and liabilities. The Group‘s strategy is to hedge the anticipated foreign currency exposure from forecasted transactions in the next twelve months on a basis agreed between the Group Management and the central finance. A significant proportion of contractual and foreseeable currency risks is hedged, mainly through forward exchange contracts. The required amount of hedging is evaluated regularly.

139 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS b) Interest rate risk The Group’s interest rate market risks arise primarily from financial liabilities with the senior facility, tranches A to D. The variable interest component of the tranches A to D of the liabilities related to the recapitalization was entirely protected by interest swaps. With contract dated 20 January 2009, the companies PolymerLatex Deutschland Beteiligungsgesellschaft mbH and PolymerLatex GmbH renewed the interest rate hedge contracts with amended terms. The hedge contracts protect the interest-bearing liabilities on the respective days of payment. As of the closing date the total nominal volume amounts to d248.8 million and it hedges the nominal amount of the existing credit liability almost completely. Although the Group uses hedge instruments to limit currency and interest rate risks as described above, hedge accounting under IAS 39 is not applied. All hedge instruments are measured at fair value through profit and loss (FVTPL). The effect of an increase/decrease of one percentage point would have had the following effects on the net profit or loss:

2007: A 1% rise/fall in interest rates would decrease/increase net profit/loss by d31,000 2008: A 1% rise/fall in interest rates would decrease/increase net profit/loss by d230,000 2009: A 1% rise/fall in interest rates would decrease/increase net profit/loss by d249,000

c) Liquidity risks The liquidity risks are the risks arising from the possibility of not being able to meet current or future payment obligations because of insufficient cash availability. This risk is managed at Group level. The minimum liquidity of d10,000,000 at the end of a month, as defined in the Group’s financial covenants, is considered to be sufficient to fulfil the regular payment obligations during the following month. Key instruments to forecast the available liquidity are the monthly rolling forecast and the 13 week short term cash flow forecast. The permanent rolling forecast considers all foreseeable factors influencing the business and consolidates those in an integrated corporate calculation model on a monthly basis. In November 2009 the Group implemented an additional weekly rolling forecast containing a forecast period of 13 weeks. Based on the above described liquidity management elements and the improved operative business development, the Group is expecting sufficient liquidity to ensure the fulfilment of covenant requirements as well as amortization and interest obligations in accordance with loan agreements. 17.2 Capital risk management The key objective of the financial management is to achieve a sustained increase in the value of the Group for the benefit of all shareholders, while ensuring liquidity and compliance with financial covenants according to the Senior facility agreement with the Group’s lending banks. Equity value is driven by the level of EBITDA (pre nonrecurring items) and by the level of net debt. The Group is managing both of these performance indicators on a monthly basis. In connection with the refinancing in 2006 the Group is obliged by a ‘‘Senior Facilities Agreement’’ (SFA) to comply with certain financial covenants. These financial covenants define the corner stones of the Group’s financial management: Interest cover ratio: Ratio of Consolidated EBITDA to Consolidated Net Finance Charges Debt cover ratio: Ratio of Consolidated Total Net Debt to Consolidated EBITDA Cash flow cover ratio: Ratio of Cash flow to Net Debt Service Capital Expenditure: The aggregate Capital Expenditure of the Group in a financial year shall not exceed a certain defined amount for that relevant year Minimum liquidity: The available liquidity of the Group shall on the last day of each month be equal to or greater than d7,000,000 for 2010 and d10,000,000 thereafter.

140 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The Group constantly measures and forecasts compliance with the set of financial covenants. The 13 week short term cash flow forecast is measured on a weekly basis and reported bi- weekly to the lenders consortium. 17.3 Quantitative disclosures 17.3.1 Categories of financial instruments

Note Carrying amount 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Financial assets Fair value through profit and loss (FVTPL) – Held for trading derivatives 1,286 2,535 1,112 – Funded investments 15 1,203 922 920 Loans and receivables: – Loans to others 15 886 817 743 – Trade and other receivables to related parties 13.1 177 162 199 – Trade and other receivables 13.1 45,143 25,990 20,109 – Cash and cash equivalents 14 23,354 22,964 11,421 Financial liabilities Fair value through profit and loss (FVTPL) – Held for trading derivatives 9,561 9,121 992 Financial liabilities held at amortised cost: – Bank loans at fixed interest rate 16 263,293 272,462 254,075 – Loans from others 16 20,269 — 500 – Loans from related parties 16 5,493 — — – Trade payables 18 43,906 41,162 46,423 17.3.2 Fair value of financial instruments As presented above, the Group’s financial instruments consist mainly of instruments measured at amortised cost. Instruments measured at fair value are further described below. The carrying value of financial instruments measured at amortised cost approximate their fair value, with the exception of the non-current borrowings. The Group does not manage borrowings on a fair value basis as the fair value of its borrowings is not relevant. Accordingly, the Group does not have the instruments to calculate a fair value of borrowings, and the process to do so would be onerous. Classification of instruments measured at fair value IFRS 7 requires the classification of the fair value instruments into the following fair value hierarchy: Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Company does not hold Level 3 fair value instruments. Below is a summary of the Company’s fair value instruments:

141 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 31 December 2009 31 December 2008 31 December 2007 Level 1 Level 2 Total Level 1 Level 2 Total Level 1 Level 2 Total d’000 d’000 d’000 d’000 d’000 d’000 d’000 d’000 d’000 Financial assets at FVTPL Derivative ﬁnancial assets — 1,286 1,286 — 2,535 2,535 — 1,112 1,112 Non-derivative ﬁnancial assets held for trading 1,203 — 1,203 922 — 922 920 — 920 Total 1,203 1,286 2,489 922 2,535 3,457 920 1,112 2,032

Financial liabilities at FVTPL Non-derivative ﬁnancial liabilities held for trading — (9,561) (9,561) — (9,121) (9,121) — (992) (992) Total — (9,561) (9,561) — (9,121) (9,121) — (992) (992)

17.3.3 Maturity table The following tables detail the Group’s remaining contractual maturity for its non- derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. Between Between Within one 1 and 2 2 and 5 Over year years years 5 years Total d’000 d’000 d’000 d’000 d’000 31 December 2009 Borrowings 49,391 5,800 132,432 96,882 284,505 Trade and other payables 72,437 — — — 72,437 Derivative liabilities 9,561 — — — 9,561 Liabilities to related parties 5,493 — — — 5,493 136,882 5,800 132,432 96,882 371,996 31 December 2008 Borrowings 28,282 5,480 56,200 182,500 272,462 Trade and other payables 54,925 — — — 54,925 Derivative liabilities 9,121 — — — 9,121 92,328 5,480 56,200 182,500 336,508 31 December 2007 Borrowings 6,051 5,107 15,786 227,631 254,575 Trade and other payables 60,430 — — — 60,430 Derivative liabilities 992 — — — 992 67,473 5,107 15,786 227,631 315,997

142 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 18. TRADE AND OTHER PAYABLES

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Trade payables 43,906 41,162 46,423 Liabilities for social expenses 333 312 356 Liabilities for VAT and other taxes 1,811 599 316 Payroll liabilities 406 537 334 Interest accrued 4,362 47 198 Other liabilities 1,211 1,258 835 Accruals for short-term personnel commitments 4,702 1,453 2,958 Accruals for customer rebates and reclamations 2,239 1,696 2,125 Outstanding incoming invoices 10,103 3,680 6,086 Further miscellaneous accruals 3,364 4,181 799

72,437 54,925 60,430

19. TAXES 19.1 Tax expense and reconciliation to expected tax expense The Group’s tax expense is composed of the following:

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Current tax expense 5,049 5,984 10,993 Deferred tax (income)/expense (3,683) 270 (11,323)

Tax expense/(income) 1,366 6,254 (330)

Reconciliation of actual tax expenses with expected tax expenses based on applicable tax rates: Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 (Loss)/proﬁt before tax (11,136) (22,343) 1,383 Income tax rate for the group 32.2% 32.2% 31.0% Tax at the income tax rate for the Group (3,586) (7,194) 429 Tax effect of different tax rates of subsidiaries 844 941 (588) Tax effect of tax rate changes 13 — 2,562 Tax income and expenses relating to other periods 204 2,292 (454) Tax effect of expenses that are not deductible 1,301 11,540 577 Tax effect of income that is not assessable (1,128) (4,373) (2,988) Tax effect of current year losses not capitalised 3,718 3,048 132

Effective tax charge/(credit) 1,366 6,254 (330)

143 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 19.2 Tax balances in the statement of ﬁnancial position Current taxes Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Current tax assets Tax refund receivable 39 1,254 901

39 1,254 901

Current tax liabilities (1,589) (3,155) (1,355)

Income tax payable (1,589) (3,155) (1,355)

Current tax receivables are included in other receivables (note 13). 19.2 Deferred tax

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Deferred tax liabilities (26,389) (33,483) (31,760) Deferred tax assets 10,835 14,246 12,793

(15,554) (19,237) (18,967)

19.3 Tax loss carry forward The movements in tax loss carry forwards were as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Balance tax losses carried forward 19,674 30,915 23,971 Utilised in the year (1,499) (10,536) (4,025) Current year losses 3,423 2,174 11,950 Translation differences 782 (2,879) (981)

Remaining tax loss carried forward 22,380 19,674 30,915

of which capitalised as deferred tax assets 8,143 9,642 20,178 of which not capitalised (no maturity) 14,237 10,032 10,737

144 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 20. PROVISIONS AND POST RETIREMENT BENEFIT AND SIMILAR OBLIGATIONS 20.1 Provisions Total employee Pensions Partial Anniver- Miscellan- benefits Onerous (note 21) retirement saries eous (note 21) contracts Total d’000 d’000 d’000 d’000 d’000 d’000 d’000 Balance at 1 January 2009 34,612 2,206 84 661 37,563 1,307 38,870 Additional provisions recognised 2,214 573 277 5 3,069 — 3,069 Reductions arising from payments/other sacrifices of future economic benefits (1,088) (1,167) — — (2,255) — (2,255) Reductions resulting from re-measurement or settlement without cost (196) — — (8) (204) — (204) Unwinding of discount and effect of changes in the discount rate — — — — — (40) (40)

Balance at 31 December 2009 35,542 1,612 361 658 38,173 1,267 39,440

Balance at 1 January 2008 35,002 3,537 1,941 679 41,159 7 41,166 Additional provisions recognised 2,157 506 — 94 2,757 1,300 4,057 Reductions arising from payments/other sacriﬁces of future economic beneﬁts (1,041) (1,621) — (11) (2,673) — (2,673) Reductions resulting from re-measurement or settlement without cost (1,506) (216) (1,857) (101) (3,680) — (3,680)

Balance at 31 December 2008 34,612 2,206 84 661 37,563 1,307 38,870

Balance at 1 January 2007 34,163 4,325 1,870 748 41,106 — 41,106 Additional provisions recognised 2,247 966 164 140 3,517 7 3,524 Reductions arising from payments/other sacriﬁces of future economic beneﬁts (904) (1,754) (93) (209) (2,960) — (2,960) Reductions resulting from re-measurement or settlement without cost (504) — — — (504) — (504)

Balance at 31 December 2007 35,002 3,537 1,941 679 41,159 7 41,166

On retiring, the majority of the non-pay-scale employees, especially at PolymerLatex GmbH, will receive a pension. Payments from the Group companies vary depending on the legal, ﬁscal and economic circumstances in the respective country and are based as a rule on the number of years’ service in the Group and the employee’s remuneration.

145 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Pension provisions are determined in principle according to the ‘‘Projected Unit Credit Method’’ taking into account future increase in salary, whereby future obligations are assessed using actuarial procedures to cautiously estimate any relevant inﬂuencing variables. The expected retirement beneﬁts in connection with the insured event are distributed over the number of years the employee is employed by the company under dynamic points of view. Should the pension system be performance based, actuarial calculations and estimates are essential whereby, in addition to the assumed life expectancy, the following calculation parameters are likewise taken into consideration. Other provisions comprise impending losses by onerous contracts due to the close-down and mothballing of the site of PolymerLatex Limited. They are expected to reverse within three years.

21. Post retirement benefit and similar obligations 21.1 Post retirement benefit obligation Group companies provide retirement benefits for most of their employees. The way these benefits are provided varies according to the legal, fiscal and economic conditions of each country, and they may be contribution defined or benefit defined. Two defined benefit plans are in place within the Group. Provisions for defined benefit plans and similar obligations are measured using the projected unit credit method prescribed by IAS 19. Under this method, the effect of future increases in pensions and salaries is taken into account. The provisions are determined using actuarial methods and are calculated by an independent actuary at each year end. Actuarial gains and losses result from the differences between pension obligations previously calculated for the financial statements and actual amounts. Actuarial gains and losses are only recognised when the accumulated amount of previously unrecognised actuarial gains and losses at the end of the previous reporting period exceeds 10% of the present value of the defined benefit obligation. Any amount exceeding this corridor is required to be recognised – from the beginning of the next financial year - as income or expense over the expected average remaining working lives of the employees participating in the plans.

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Retirement beneﬁt plan in Germany 34,969 34,053 34,392 Retirement beneﬁt plan in Italy 562 560 610 Other long term personnel provisions 2,642 2,950 6,157

Total retirement beneﬁt obligations 38,173 37,563 41,159

21.2 Retirement beneﬁt plan Germany On retiring, the majority of the non-pay-scale employees will receive a pension. Payments from the Group companies vary depending on the legal, ﬁscal and economic circumstances in the respetive country and are based as a rule on the number of years service in the company and the employee’s remuneration. The principal assumptions used for the purposes of the actuarial valuations were as follows:

Valuation at 31 December 31 December 31 December 2009 2008 2007 % % % Discount rates 5.50 6.00 5.50 Expected rates of salary increase 2.50 2.50 2.50 Expected rate of pension increase 1.75 2.00 1.75 The biometric assumptions are based on the 2009 mortality tables issued by Prof. Klaus Heubeck.

146 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Amounts recognised in profit or loss in respect of these defined benefit plans are as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Current service cost 329 511 580 Interest cost 1,667 1,472 1,421 Actuarial gains recognised in the year (196) (261) — Gains arising from curtailments or settlements — (1,234) (505)

Expense recognised in the income statement 1,800 488 1,496

Movements in the present value of the deﬁned beneﬁt obligation in the current period were as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Defined benefit obligation – beginning of year 28,397 27,649 32,256 Current service cost 329 511 580 Interest cost 1,667 1,472 1,421 Actuarial losses/(gains) 743 826 (5,539) Gains on curtailments — — (505) Liabilities extinguished on settlements — (1,234) — Benefits paid (884) (827) (564)

Deﬁned beneﬁt obligation – end of year 30,252 28,397 27,649

Experience adjustments on plan liabilities (872) (2,487) (905)

Cumulative actuarial gains and losses were as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Actuarial gains not recognised – beginning of year 5,656 6,743 1,204 Actuarial (losses)/gains (743) (826) 5,539 Amortisation of actuarial gains and losses (196) (261) —

Actuarial gains (losses) not recognised – end of year 4,717 5,656 6,743 Add: Deﬁned beneﬁt obligation 30,252 28,397 27,649

Total deﬁned beneﬁt obligation as recognised 34,969 34,053 34,392

21.3 Retirement beneﬁt plan Italy The principal assumptions used for the purposes of the actuarial valuations were as follows:

Valuation at 31 December 31 December 31 December 2009 2008 2007 % % % Discount rates 4.45 4.50 5.45 Expected rates of salary increase 3.00 3.00 3.00 Expected rate of inﬂation 2.00 2.00 2.00

147 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Amounts recognised in profit or loss in respect of these defined benefit plans are as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Current service cost — — 11 Interest on obligation 26 33 30 Actuarial losses recognised in the year — — 2 Gains arising from curtailments or settlements — — (46)

Expense recognised in the income statement 26 33 (3)

Movements in the present value of the deﬁned beneﬁt obligation were as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Defined benefit obligation – beginning of year 574 597 692 Current service cost — — 11 Interest cost 26 33 30 Gains on curtailments (46) Actuarial (gains)/losses (8) 27 (13) Benefits paid (24) (83) (77)

Deﬁned beneﬁt obligation – end of year 568 574 597

Experience adjustments on plan liabilities (872) (2,487) (905)

Cumulative actuarial gains and losses were as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Actuarial (losses)/gains not recognised – beginning of year (14) 13 (92) Actuarial gains/(losses) current year 8 (27) 13 Amortisation of actuarial gains and losses — — 2 Actuarial gains/(losses) on curtailments — — 90

Actuarial (losses)/gains not recognised – end of year (6) (14) 13 Add: Deﬁned beneﬁt obligation 568 574 597

Total deﬁned beneﬁt obligation as recognised 562 560 610

22. ISSUED CAPITAL

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Share capital 25 25 25

Issued capital comprises: Ordinary shares 25 25 25

The subscribed ordinary share capital of the Group’s company PolymerLatex Deutschland Beteiligungs-gesellschaft mbH remained unchanged since its formation.

148 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 23. RELATED PARTIES The immediate parent and ultimate controlling party respectively of the Group are PolymerLatex (Holdings) B.V., Amsterdam, Netherlands. Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. 23.1 Related party transactions and balances There were no signiﬁcant transactions and balances with related parties during the period which were not dealt at arm’s length principles. 23.2 Compensation of key management personnel The remuneration of directors and other members of key management personnel during each year was as follows:

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Short-term beneﬁts 840 840 862 Post-employment beneﬁts 120 120 178

960 960 1,040

24. SUBSIDIARIES AND JOINT VENTURES Details of the Company’s subsidiaries and joint ventures at 31 December 2009, 2008 and 2007 were as follows: Proportion of ownership interest and voting power held Name of subsidiary Place of incorporation 31 December 31 December 31 December and operation 2009 2008 2007 d’000 d’000 d’000 Fully consolidated subsidiaries PolymerLatex GmbH Marl, Germany 100% 100% 100% PolymerLatex International Marl, Germany 100% 100% 100% GmbH PolymerLatex S.r.l. Filago Italy 100% 100% 100% PolymerLatex Ltd. Bromsgrove, Great 100% 100% 100% Britain PolymerLatex Sdn. Bhd. Johor Bahru, Malaysia 100% 100% 100% Pro rata consolidated companies Eka PolymerLatex Oy Oulu, Finland 50% 50% 50%

149 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 24.1 Joint ventures The following amounts are included in the Group ﬁnancial statements as a result of the proportionate consolidation of Eka PolymerLatex Oy, Oulu, Finnland.

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Current assets 5,848 5,949 8,131 Non-current assets 24,248 26,584 27,471 Current liabilities 3,876 2,069 6,082 Non-current liabilities 1,275 1,548 —

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Income 31,021 37,708 35,293 Expenses until EBIT 29,893 37,395 33,456 EBIT (100%) 2,257 626 3,673

25. COMMITMENT AND CONTINGENCIES (INCL. LEASES) 25.1 Leasing arrangements and lease commitments Operating leases relate to leases of land with lease terms of between 5 and 60 years. All operating lease contracts over 5 years contain clauses for 5-yearly market rental reviews. The Group does not have an option to purchase the leased land at the expiry of the lease periods.

Non-cancellable operating lease commitments

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Not later than 1 year 1,385 1,228 1,614 Later than 1 year and not later than 5 years 5,020 5,054 4,449 Later than 5 years 10,734 12,163 13,622

17,139 18,445 19,685

25.2 Other commitments

31 December 31 December 31 December 2009 2008 2007 d’000 d’000 d’000 Commitments for the acquisition of property, plant and equipment 5,609 18,817 6,324 Commitments under take-or-pay toll manufacturing contract 9,940 16,410 21,880

15,549 35,227 28,204

26. ASSETS PLEDGED AS SECURITY Under the current reﬁnancing agreement, all assets of the Group were completely provided as collateral for the lending syndicate in form of pledges, security transfers or global assignment agreements.

150 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 27. SPECIAL ITEMS The following are disclosed separately as special items in order to provide a clearer indication of the Group’s underlying performance: a) Pre-commissioning site costs for production assets under construction. b) Amortisation of acquired intangible assets; c) Management fees paid to the Group’s shareholder; d) Fees paid to the Group’s banks in respect of covenant re-sets; and e) Re-structuring and site closure costs f) Fair value adjustment – mark to market adjustments in respect of cross currency and interest rate derivatives used for hedging purposes where IAS 39 hedge accounting is not applied; Underlying performance represents the statutory performance of the Group under IFRS, excluding special items. The special items are made up as follows:

Year ended Year ended Year ended 31 December 31 December 31 December 2009 2008 2007 Notes d’000 d’000 d’000 Operating loss: Costs of running sites before commissioning a) (8,354) (5,455) (1,345) Amortisation of acquired intangible assets b) (10,813) (14,054) (14,042) Management fees paid to Group’s shareholder c) (250) (250) (250) Consultancy fees relating to Group reﬁnancing and covenant reset d) (2,300) — — Re-structuring and site closure costs e) (2,960) — (1,200)

(24,677) (19,759) (16,837)

Finance costs: Fair value adjustment f) (6,853) 437 474

Loss before taxation (31,530) (19,322) (16,363)

28. RECONCILIATION OF EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (‘‘EBITDA’’)

Year ended 31 December 2009 Year ended 31 December 2008 Year ended 31 December 2007 Underlying Underlying Underlying performance Special items IFRS performance Special items IFRS performance Special items IFRS d’000 d’000 d’000 d’000 d’000 d’000 d’000 d’000 d’000 Operating proﬁt 37,161 (24,677) 12,484 25,167 (19,759) 5,408 42,252 (16,837) 25,415 Add: depreciation 16,868 — 16,868 24,444 — 24,444 20,597 — 20,597 Add: amortisation — 10,813 10,813 — 14,054 14,054 — 14,042 14,042

EBITDA 54,573 (13,864) 40,165 49,611 (5,705) 43,906 62,849 (2,795) 60,054

29. EVENTS AFTER THE REPORTING PERIOD In September 2010 Management has taken the decision to ﬁnally close down the mothballed Bromsgrove plant and to enter into a formal sales process. The sales process has been started and four non-binding offers have been received.

151 c103902pu070 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART X

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma statement of net assets of the Group in this Part X has been based on the ﬁnancial information of Yule Catto as at 30 June 2010 and prepared in accordance with Annex II of the Prospectus Rules and on the basis of the notes set out below. The unaudited pro forma statement of net assets has been prepared to illustrate the effect on the consolidated net assets of the Group of the Acquisition and the Rights Issue as if they had been completed on 30 June 2010. As indicated above, the unaudited pro forma statement of net assets has been prepared for illustrative purposes only and because of its nature the pro forma statement addresses a hypothetical situation and does not, therefore, represent the Group’s actual ﬁnancial position and results. This unaudited pro forma statement does not take into account trading of the Yule Catto Group subsequent to 30 June 2010 or of the PolymerLatex Group subsequent to 31 December 2009.

1. Unaudited Proforma statements of net assets of the Enlarged Group

Adjustments for proposed transaction

PolymerLatex Yule Catto As at As at 31 December Proforma 30 June 2009 enlarged 2010 (a) (b) (c) (d) group £’000 £’000 £’000 £’000 £’000 £’000 Non-current assets Goodwill 124,027 107,874 — 161,100 393,001 Other intangible assets 482 50,014 — — — 50,496 Property, plant and equipment 99,623 99,034 — — — 198,657 Other non-current assets 5,467 11,630 — — — 17,097

229,599 268,551 — — 161,100 659,250

Current assets Inventories 57,576 17,405 — — — 74,981 Trade and other receivables 124,448 46,264 — — — 170,712 Cash and cash equivalents 52,162 21,015 214,362 161,200 (362,728) 86,011 Derivatives at fair value 23,026 1,157 — — — 24,183

257,212 85,841 214,362 161,200 (362,728) 355,887

Current liabilities Borrowings (39,141) (44,444) — — 26,132 (57,453) Trade and other payables (140,776) (73,786) — — — (214,562) Current tax liability (32,942) (1,430) — — — (34,372)

(212,859) (119,660) — — 26,132 (306,387)

Non-current liabilities Borrowings (106,125) (211,567) — (164,400) 211,567 (270,525) Trade and other payables (319) (1,140) — — — (1,459) Deferred tax liability (8,414) (23,746) — — — (32,160) Post retirement beneﬁt obligations (90,962) (34,350) — — — (125,312)

(205,820) (270,803) — (164,400) 211,567 (429,456)

Net assets 68,132 (36,070) 214,362 (3,200) 36,070 279,294

152 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Notes to the proforma 1. Basis of preparation The financial information has been prepared under the historical cost convention in a manner consistent with the accounting policies adopted by Yule Catto & Co plc in its financial statements for the year ended 31 December 2009 and the six months ended 30 June 2010. 2. Yule Catto financial information The net asset financial information in respect of the Yule Catto Group has been extracted from the unaudited consolidated balance sheet of the Yule Catto Group as at 30 June 2010, as referred to in Part VII of this document. 3. PolymerLatex financial information The net asset financial information in respect of the PolymerLatex Group has been extracted from the audited consolidated balance sheet of the PolymerLatex Group as at 31 December 2009 as set out in Part IX of this document, translated into Sterling using a fixed rate of c1.1113 : £1. The 31 December 2009 consolidated balance sheet has been used as it is the most recent published information on which a report by the auditors has been issued. 4. Adjustments to the proforma statement of net assets Adjustments have been made to the pro forma statement of net assets to reflect: (a) The balance sheet of PolymerLatex as at 31 December 2009. (b) The rights issue for New Ordinary Shares, raising proceeds of £214.4 million after Transaction Costs of £10.6 million, based on the issue of a total of 194,217,582 new shares in Yule Catto & Co plc at a price of 116 pence per share. (c) New Credit Facilities comprising a euro-denominated £150 million 3 year term loan facility and a £60 million 3 year multicurrency revolving credit facility (of which £14.4 million will be drawn down for the purposes of funding the Acquisition), less debt fees of £3.2 million. (d) Consideration that would have been paid had the Transaction been completed at 31 December 2009, adjustments for net debt acquired and goodwill as follows:

d million £ million Enterprise value 443.3 398.9 Cash acquired 23.4 21.1 Debt transferred under factoring agreement (30.3) (27.3) Break costs for derivative contracts (12.0) (10.8) Working capital adjustment (21.3) (19.2)

Adjusted cash payment 403.1 362.7 Net debt re-paid (264.3) (237.8)

Consideration for shares 138.9 124.9 Add net liabilities acquired 40.1 36.1

Goodwill arising 179.0 161.1

Of the £237.8 million net debt repaid, £211.6 million relates to repayment of non-current liabilities and £26.1 million relates to the repayment of part of current liabilities. 5. The statement does not include any adjustments necessary to reﬂect the fair values of the assets and liabilities of the PolymerLatex Group. Any subsequent fair value exercise should be expected to identify differences between the fair values of the assets and liabilities of the PolymerLatex Group and their book values presented in the pro forma consolidated net asset statement set out above. 6. No account has been taken of trading results of the Yule Catto Group or the PolymerLatex Group since the date of each balance sheet.

153 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 2. Report from Deloitte LLP in relation to the unaudited pro forma statement of net asset of the Enlarged Group

Deloitte LLP City House 126 - 130 Hills Road Cambridge CB2 1RY

Tel: +44 (0) 1223 460222 Fax: +44 (0) 1223 350839 www.deloitte.co.uk The Board of Directors on behalf of Yule Catto & Co plc Temple Fields Harlow Essex CM20 2BH

HSBC Bank plc 8 Canada Square London E14 5HQ

13 December 2010 Our Ref: SJH / JPCH

Dear Sirs

Yule Catto & Co plc (the ‘‘Company’’) We report on the pro forma financial information (the ‘‘Pro forma financial information’’) set out in Part X of the prospectus and investment circular and dated 13 December 2010 (the ‘‘Investment Circular’’), which has been prepared on the basis described in note 1, for illustrative purposes only, to provide information about how the proposed acquisition (the ‘‘Acquisition’’) of PolymerLatex Deutschland Beteiligungsgesellschaft mbH by Yule Catto & Co plc and the proposed offer of shares in the Company by way of a rights issue and admission of those shares to listing on the Official List of the Financial Services Authority and admission to trading on the London Stock Exchange for the purposes of funding the Acquisition (‘‘the Transaction’’) might have affected the financial information presented on the basis of the accounting policies adopted by the Company in preparing the financial statements for the periods ended 31 December 2009 and 30 June 2010. This report is required by Annex I item 20.2 of Commission Regulation (EC) No 809/2004 (the ‘‘Prospectus Directive Regulation’’) and is given for the purpose of complying with that requirement and for no other purpose.

1.1.1 Responsibilities It is the responsibility of the directors of the Company (the ‘‘Directors’’) to prepare the Pro forma ﬁnancial information in accordance with Annex I item 20.2 and Annex II items 1 to 6 of the Prospectus Directive Regulation. It is our responsibility to form an opinion, in accordance with Annex I item 20.2 of the Prospectus Directive Regulation, as to the proper compilation of the Pro forma ﬁnancial information and to

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered ofﬁce at 2 New Street Square, London EC4A 3BZ, United Kingdom.

Member of Deloitte Touche Tohmatsu Limited

154 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS report that opinion to you in accordance with Annex II item 7 of the Prospectus Directive Regulation. Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in accordance with this report or our statement, required by and given solely for the purposes of complying with Annex I item 23.1 of the Prospectus Directive Regulation, consenting to its inclusion in the prospectus. In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any ﬁnancial information used in the compilation of the Pro forma ﬁnancial information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

1.1.2 Basis of Opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the Directors. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside the United Kingdom, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards or practices.

1.1.3 Opinion In our opinion: (a) the Pro forma ﬁnancial information has been properly compiled on the basis stated; and (b) such basis is consistent with the accounting policies of the Company.

Declaration For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with Annex I item 1.2 and Annex III item 1.2 of the Prospectus Directive Regulation.

Yours faithfully Deloitte LLP Chartered Accountants

Member of Deloitte Touche Tohmatsu Limited

155 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART XI

ADDITIONAL INFORMATION

1. Responsibility The Directors, whose names appear in paragraph 3.1 below, and the Company, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Directors and the Company (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Company Information The Company was incorporated in England and Wales with registered number 98381 under the Companies Acts 1862 to 1900 on 16 June 1908 as a private company limited by shares under the name Malaya General Company Limited. On 13 October 1971 the Company changed its name to Yule Catto & Co Limited, after acquiring Yule Catto (Secretaries and Agents) Limited in September 1971. On 25 November 1981 the Company was re-registered under the Companies Acts 1948 to 1980 as a public limited company and changed its name to Yule Catto & Co Public Limited Company. On 15 October 1971, the Company’s shares were admitted to the London Stock Exchange within the speciality chemicals sector. The principal legislation under which Yule Catto operates is the Companies Act and the regulations made thereunder. The Group’s registered ofﬁce and principal headquarters are at Temple Fields, Harlow, Essex CM20 2BH (tel: +44(0)1279 442791).

3. Directors and Senior Manager 3.1 The Directors and their respective roles are:

Peter Scott Wood Chairman Adrian Michael Whitfield Chief Executive David Charles Blackwood Finance Director Jeremy Kim Maiden Senior Independent Non-Executive Director The Hon. Alexander Gordon Catto Non-Executive Director Dr Alexander Archibald Dobbie Independent Non-Executive Director Dato’ Lee Hau Hian Non-Executive Director Derick Whyte, who is the chief executive of Polymer Chemicals, is the sole senior manager within the Group whose expertise and experience are necessary to enable the Group to demonstrate its ability to manage the Group’s business. Brief biographical details of each of the Directors and the Senior Manager are set out below: Peter Scott Wood, Chairman. Peter Wood has been Chairman of the Board since February 2009, having been appointed a director in 2001. He qualified as a chartered accountant in 1968 and held various financial positions at GKN before joining Ellis & Everard plc in 1978 as finance director, subsequently becoming managing director and then chief executive. Following the sale of Ellis & Everard to Royal Vopak he joined The BSS Group PLC as chief executive in 2001 until retirement in 2005. He has held a number of non-executive directorships and is currently a non-executive director of RPC Group plc. Age 63. Adrian Michael Whitfield, Chief Executive. Adrian Whitfield joined the Board in March 2006 and was appointed Chief Executive in August 2006. He holds a Bachelor of Science (Mechanical Engineering) degree from Imperial College and is a member of the Institute of Mechanical Engineers. His early career was with ICI Chemicals & Polymers Limited followed by a period as a consultant to manufacturing companies throughout Europe. Latterly he was Vice President, European Operations of Crown Simplimatic and was Chief Executive of the plastics division of D S Smith plc immediately prior to joining the Company. Age 49. David Charles Blackwood, Finance Director. David Blackwood joined the Board on 1 October 2007 and is Group Finance Director. He holds a Bachelor of Science (Mathematics) degree from the University of Durham and is a member of the Institute of Chartered Accountants in

156 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS England and Wales and a Fellow of the Association of Corporation Treasurers. During a long career at ICI plc he held a number of senior finance roles including Group Financial Controller and Group Treasurer. He is a member of the Board for Actuarial Standards. Age 51. Jeremy Kim Maiden, Senior Independent Non-Executive Director. Jeremy Maiden joined the Board on 20 August 2007 and is considered to be an independent non-executive director. He holds a Bachelor of Arts (Economics) degree from the University of Durham and is a Fellow of the Chartered Institute of Management Accountants. He has extensive financial experience in the chemical industry, having previously been group finance director at both British Vita plc and Hickson International plc. He is Group Finance Director of National Express Group PLC. Age 49. The Hon. Alexander Gordon Catto, Non-Executive Director. The Hon. Alexander Catto joined the Board as a non-executive director in 1981. He was educated at Westminster School and Trinity College, Cambridge. For over twenty years he worked in investment banking, first with J P Morgan then with Morgan Grenfell & Co Limited where he was the director in charge of new issues. Then for six years he was a managing director of Lazard Brothers heading up their capital markets business. In 1995 he left to concentrate on initiating and managing investments, setting up CairnSea Investments, of which he is managing director, with a particular focus on the provision of seed and development capital to private companies. His current other directorships include Neptune Investment Management Limited. The Hon. A G Catto is a grandson of the first Lord Catto, the founder of the company that became Yule Catto & Co plc. Age 58. Dr Alexander Archibald Dobbie, Independent Non-Executive Director. Dr Alexander Dobbie joined the Board on 20 August 2007 and is considered to be an independent non-executive director. He holds a doctorate in chemistry from the University of Glasgow and has some 30 years’ international industrial experience in speciality chemicals having held senior positions at Kelco division of Merck & Co Inc, Brent International plc and Octel Corporation. He is a founding director of Cogency, which provides specialist advice on investment in the chemical sector, a director of NiTech Solutions Limited and Marine Biopolymers Limited and is chairman of Chemical Sciences Scotland. Age 59. Dato’ Lee Hau Hian, Non-Executive Director. Dato’ Lee Hau Hian is Malaysian and joined the Board as a non-executive director in 1993. He stood down in 2000 to become an Alternate Director and re-joined the board in 2002. He is the Managing Director of Batu Kawan Berhad, a listed Malaysian investments holding company, with interests in plantations and chemicals manufacturing. He graduated with a Bachelor of Science (Economics) degree from the London School of Economics and has a MBA degree from Stanford University, California. He is a director of Kuala Lumpur Kepong Berhad and is the President of the Perak Chinese Maternity Association. He also serves as a director of Yayasan De La Salle. Age 56. Derick Blair Whyte. Derick Whyte is Chief Executive of the Group’s Polymer Chemicals division. Derick graduated with a Bachelor of Science (Chemistry) from the University of St. Andrews and an MBA from the Open University Business School. He has more than 25 years international experience in the chemicals industry and prior to joining Yule Catto in 2007, as chief executive of the Impact Chemicals division, Derick held various senior positions with ICI plc and Unilever plc. Derick is also a member of the Royal Society of Chemistry and a Chartered Chemist. Age 52. The current business address of each of the Directors and the Senior Manager is Yule Catto & Co plc, Temple Fields, Harlow, Essex CM20 2BH. 3.2 As at the date of this document, no Director or the Senior Manager: 3.2.1 except as disclosed in sub-paragraph 3.1 and 3.3 of this Part XI, has been at any time in the five years prior to the date of this document a director (or otherwise a member of any administrative, management or supervisory body) or partner of any companies or partnerships other than directorships or partnerships of any member of the Yule Catto Group from time to time; or 3.2.2 has any convictions in relation to fraudulent offences for at least the last five years; or 3.2.3 has been adjudged bankrupt or been a party to a deed of arrangement or any form of voluntary arrangement; or

157 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 3.2.4 has in the five years prior to the date of this document been a director of any company which, while he was such a director was put into receivership or compulsory liquidation or creditors’ voluntary liquidation or company voluntary arrangement or has had an administrator or an administrative or other receiver appointed or entered into any composition or arrangement with its creditors generally or any class of its creditors; or 3.2.5 in the five years prior to the date of this document has been a partner in any partnership which, while he was a partner, was put into compulsory liquidation, administration or partnership voluntary arrangement; or 3.2.6 has had an administrative or other receiver appointed in respect of any asset belonging to him or her or to a partnership of which he or she was a partner; or 3.2.7 has received any official public incrimination and/or sanctions by any statutory or regulatory authorities, including designated professional bodies, or been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company in the previous five years. 3.3 Other directorships held by the Directors in the five years preceding the date of this document in respect of companies other than the Company and other members of the Group are as follows:

Director Company Status Peter Scott Wood RPC Group Plc Current A.M. Supplies (Pumps and Controls) Limited Previous Actionbridge Limited Previous Angelery Limited Previous Austin Stroud & Co. Limited Previous British Steam Specialties (International) Limited (The) Previous British Steam Specialties Limited (The) Previous BSS Group Public Limited Company (The) Previous BSS (UK) Limited Previous Coppas Controls (UK) Limited Previous Fry & Pollard Limited Previous Grafton Group plc Previous Havelock Controls Limited Previous Heatek Labone Cadel Limited Previous Ivco Process Valves Limited Previous J & B. Labone limited Previous Manor Building & Plumbing Supplies Limited Previous Manor Copper Supplies Limited Previous Neptronik Controls Ltd Previous P.T.S Plumbing Trade Supplies Limited Previous P.T.S Group Limited Previous Spurle Supplies Limited Previous The BSS Group plc Previous TPS Trade Plumbing Supplies Limited Previous Tricom Group Limited Previous Tricom Supplies Limited Previous WYG Plc Previous Zenith Plumbpoint Limited Previous Adrian Michael Whitﬁeld Chemical Industries Association Limited Current Super Sky Limited Current Techsol Limited Current Thomas Bell Limited Current Yardsave Limited Current D.W. Plastics (UK) Limited Previous DS Smith Plastics Limited Previous Vivimed Labs Europe Ltd Previous David Charles Blackwood Ergon Investments International Limited Previous Ergon Investments UK Limited Previous

158 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Director Company Status Hatchpoint Limited Previous Horseferry Investments Limited Previous ICI Finance (Leasing) Limited Previous I C I Finance Limited Previous ICI Funding Limited Previous ICI Investment Management Limited Previous ICI Ireland Limited Previous ICI Omicron B.V Previous ICI Paints Mercosur B.V Previous ICI Theta B.V Previous Mortar Investments International Limited Previous Mortar Investments UK Limited Previous TIL Limited Previous Jeremy Kim Maiden National Express Group Plc Current National Express Intermediate Holdings Limited Current National Express UK Limited Current Speedlink Airport Services Limited Current L.Dennis & Co., Limited Previous Northern Foods Plc Previous The Hon. Alexander Cairnsea Investments Limited Current Gordon Catto Ilex Asset Management (UK) LLP Current Marketingﬁle Group Plc Current Marketingﬁle Ltd Current Neptune Investment Management Limited Current Digital Stores Limited Previous Ebernoe LLP Previous Mount Street Advisory Services Limited Previous Mount Street Investment Management Limited Previous Mount Street Investors Limited Previous SOE Development Limited (in liquidation) Previous Vineworld Limited Previous Alexander Archibald Ardlochan Consultants Limited Current Dobbie Cogency Chemical Consultants Limited Current Marine Biopolymers LImited Current Nitech Solutions Limited Current Warwick International Holdings Limited Previous Gyre Limited Previous Dato’ Hau Hian Lee Kuala Lumpur Kepong Bhd. Current KL-Kepong Investments Limited Current KLKI Holdings Limited Current Quillspur Limited Current

3.4 No Director or the Senior Manager has, or has had, any interest in any transaction effected by Yule Catto or any of its subsidiaries which is or was unusual in its nature or conditions or significant to the business of the Yule Catto Group and (in any such case) was effected during the current or immediately preceding financial year of Yule Catto or during an earlier financial year and remains in any respect outstanding or unperformed.

3.5 Save for the loan made by the Company to Derick Whyte in January 2010 in the sum of £41,751 (which is repayable by 31 March 2011), there are no outstanding loans or guarantees granted or provided by any member of the Group to or for the beneﬁt of any Director or the Senior Manager.

3.6 Save for Dato’ Hau Hian Lee, who is also a director of the Company’s largest shareholder, KLK, no Director or the Senior Manager has any potential conﬂict of interest between his duties to the Company and his private interests or other duties.

159 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 4. Share Capital 4.1 The following table sets out issued and fully paid share capital of the Company as at 10 December 2010 (being the latest practicable date before the publication of this document) and as it will be following the allotment and issue of New Ordinary Shares under the Rights Issue.

Issued and fully paid Nominal Value Number Prior to completion of the Rights Issue £14,566,318.70 145,663,187 Upon completion of the Rights Issue £33,988,076.90* 339,880,769* * This assumes that no fractional entitlements arise as a result of the Rights Issue.

The Ordinary Shares are admitted to trading on the London Stock Exchange’s main market for listed securities and are listed on the Official List. Applications have been made to the UKLA for the New Ordinary Shares to be admitted to the Official List and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities. As at 10 December 2010 (being the latest practicable date before the publication of this document), Yule Catto did not hold any treasury shares. No Ordinary Shares have been issued otherwise than as fully paid. The Ordinary Shares have a nominal value of 10 pence each. 4.2 During the three financial years ended 31 December 2007, 2008 and 2009 and for the period 1 January 2010 to 10 December 2010 (being the latest practicable date prior to the publication of this document), there were no allotments of Ordinary Shares made by the Company. 4.3 Subject to the Resolutions being passed, following the Rights Issue, 33,988,080 Ordinary Shares will remain authorised for allotment but unissued, representing approximately 10 per cent. of the enlarged issued share capital of the Company following the Rights Issue. The Rights Issue will result in an overall immediate dilution of approximately 57.1 per cent. of the Existing Ordinary Shares in the capital of the Company and therefore any individual Shareholder who does not take up any of his rights pursuant to the Rights Issue will be diluted by the same proportion. However, the New Ordinary Shares represented by the Nil Paid Rights of such Shareholders are intended to be sold or taken up pursuant to the Underwriting Agreement and any proceeds from such sale remitted to such Shareholders provided, in each case, they exceed £5.00 (after deduction of associated costs and expenses). 4.4 By an ordinary resolution of the Company passed on 6 May 2010, the Directors were granted a general and unconditional authority for the purposes of section 551 of the Companies Act to allot Ordinary Shares in the Company or grant rights to subscribe for, or convert any security into, Ordinary Shares in the Company, up to an aggregate nominal amount of £4,855,439 (such authority to expire on 30 June 2011 or, if earlier, at the conclusion of the annual general meeting of the Company to be held in 2011, unless previously reviewed, varied or revoked by the Company’s Shareholders in general meeting). 4.5 By a special resolution of the Company passed on 6 May 2010, the Directors were empowered, pursuant to section 570 of the Companies Act, to allot equity securities (within the meaning of section 560 of the Companies Act) for cash pursuant to the authority described in paragraph 4.4 above up to an aggregate nominal amount of £728,315 as if section 561(1) of the Companies Act did not apply to such allotment. Such authority shall be in substitution for all previous powers pursuant to Section 561 of the Companies Act. 4.6 By a special resolution passed on 6 May 2010, the Company was generally and unconditionally authorised for the purposes of section 701 of the Companies Act 2006 to make market purchases (within the meaning of section 693 of the Companies Act 2006) of Ordinary Shares provided that: 4.6.1 the maximum number of Ordinary Shares which may be purchased is 14,566,318 (representing 10 per cent. of the Company’s issued Ordinary Share capital as at 9 March 2010); 4.6.2 the minimum price (exclusive of expenses) which may be paid for each Ordinary share is 10p;

160 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 4.6.3 the maximum price (exclusive of expenses) which may be paid for each Ordinary Share is an amount equal to 105 per cent. of the average of the middle market quotations of an Ordinary Share taken from the Ofﬁcial List for the ﬁve business days immediately preceding the day on which the share is contracted to be purchased; 4.6.4 this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or on 6 August 2011 whichever is the earlier (unless previously renewed, varied or revoked by the Company in general meeting); and 4.6.5 the Company may, before such expiry, enter into one or more contracts to purchase Ordinary Shares under which such purchases may be completed or executed wholly or partly after the expiry of this authority and may make a purchase of Ordinary Shares in pursuance of any such contract or contracts. 4.7 The provisions of Section 561(1) of the Companies Act (which, to the extent not disapplied pursuant to Section 570 of the Companies Act, confer on Shareholders rights of pre-emption in respect of allotments of equity securities which are, or which are to be, paid up in cash other than allotments to employees under employee share schemes) apply to the share capital of the Company. 4.8 The allotment of the New Ordinary Shares will be made by a resolution of the Board or a duly constituted committee of the Board pursuant to the authority to be conferred by resolution 2 set out in the General Meeting Notice. 4.9 As at 10 December 2010 (being the latest practicable date before the publication of this document), there were outstanding options and awards over a total of 4,196,879 Ordinary Shares representing approximately 2.9 per cent. of the issued share capital of Yule Catto on the same date. Options and awards are currently outstanding only under the Yule Catto Performance Share Plan details of which are set out in paragraph 5 of this Part XI. 4.10 As at 10 December 2010 (being the latest practicable date before the publication of this document), the Company had no outstanding convertible debt securities, exchangeable debt securities or debt securities with warrants. 4.11 Other than pursuant to the Rights Issue and the exercise of options under the Yule Catto Share Schemes, the Board has no present intention to issue any of the unissued share capital of the Company.

5. Yule Catto Share Schemes The Company has established the employee share schemes summarised in paragraphs 5.1 and 5.2 below. Options and awards are currently outstanding only under the Yule Catto Performance Share Plan. 5.1 The Yule Catto Performance Share Plan (the ‘‘PSP’’) 5.1.1 Introduction The PSP is a share incentive plan under which the Company makes awards to executive directors, divisional chief executives and senior managers and head ofﬁce employees. It provides for the issue of awards using either newly-issued or existing shares. Awards made under the PSP may take the form of either a conditional right to acquire shares or a share option (though all outstanding awards under the PSP are in the form of a share option). Awards vest to the extent that performance conditions in relation to that award are met or exceeded. Awards granted are personal to the participant and, except on death of a participant, may not be transferred. Awards made under the PSP are not pensionable. 5.1.2 Eligibility Any director or employee of the Yule Catto Group who is required to devote the whole or substantially the whole of his or her working time to the service of the Group may be invited to participate. 5.1.3 Timing of awards Awards may be granted during the six weeks following the day on which the Company announces its results for any period. Subject to the Model Code, awards may also be granted at times when the Board considers there to be sufﬁciently exceptional circumstances to justify the grant of an award. No award may be granted after 22 May 2012.

161 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 5.1.4 Limits on participation The maximum annual market value of shares or share options that may be awarded to a participant under the PSP may not exceed 100 per cent. of his or her annual salary (excluding benefits-in-kind). 5.1.5 Vesting and Exercise of awards All outstanding share options are exercisable (to the extent that performance conditions have been satisfied) in full on the third anniversary of the date of grant. Death and cessation of employment within the Group by reason of ill health, injury, disability, redundancy, retirement (with the consent of the employer), the participant’s employer being sold out of the Group or the business in which the participant is employed being sold outside the Group will normally mean that the participant (or his personal representatives) may exercise the share option within the 12 month period beginning with the date on which the employee ceases to be employed. These options may be exercised only to the extent that the performance conditions (applied at the discretion of the Remuneration Committee) have been satisfied in respect of a time-apportioned number of shares. On a change of control of the Company, a company reconstruction or following the passing of a resolution for the Company’s winding up, the Participant may exercise their share option within one month of the Board giving notice of such an event. These options may be exercised only to the extent that the performance conditions (applied at the discretion of the Remuneration Committee) have been satisfied in respect of a time- apportioned number of shares (though the Remuneration Committee may in its discretion (acting fairly and reasonably) increase the number of vested shares if it deems it appropriate to do so). 5.1.6 Performance conditions The grant of awards is subject in each case to the achievement of specific performance conditions. Performance conditions are measured over a fixed period of three years. An increase in the earnings per share (‘‘EPS’’) of the Company was the primary performance condition for awards made in each of the 2002, 2003, 2004 and 2005 financial years. 50 per cent. of each award made since 2008 was subject to an absolute growth in total shareholder return (‘‘TSR’’) performance condition and the remaining 50 per cent. was subject to a TSR performance condition calculated on a comparative basis. 5.1.7 Rights issue In accordance with the rules of the PSP, the Remuneration Committee proposes to make appropriate adjustments to subsisting awards under the PSP to reflect the effect of the Rights Issue. Such adjustments will not be made until after the Rights Issue and following notification of the proposed adjustments to the trustee of the Employee Benefits Trust. 5.2 The Yule Catto Deferred Bonus Plan 2006 The Group has in place a deferred bonus plan pursuant to which part of an participant’s annual bonus (up to 30 per cent. of the participant’s annual salary in each award) may be deferred into shares or share options. However, no awards have ever been made under the plan.

6. Interests in Ordinary Shares 6.1 Interests of Directors and Senior Manager Save as disclosed in paragraph 3.6 of this Part XI, as at 10 December 2010 (being the latest practicable date prior to the publication of this document), none of the Directors has any potential conﬂict of interest between his duties to the Company and his private interests or other duties.

162 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS As at 10 December 2010 (being the latest practicable date before the publication of this document), the interests of the Directors, Senior Manager and persons connected with them (the existence of which is known to or could with reasonable diligence be ascertained by that Director) in the issued share capital of Yule Catto (all of which, unless otherwise stated, are beneﬁcial) are (and will be on completion of the Rights Issue) as follows:

Proposed percentage of Proposed issued share Percentage of Number of capital held Number of issued share Ordinary upon Ordinary capital held Shares upon completion of Shares held prior to the completion of the Rights prior to the Rights Issue the Rights Issue (per Director Rights Issue (per cent.) Issue cent.) P S Wood 22,249 0.02 51,914 0.02 A M Whitfield 6000 0.01 14,000 0.01 D C Blackwood 17,500 0.01 40,833 0.01 J K Maiden nil 0 nil 0 The Hon. A G Catto 1,315,604 0.90 1,924,758 0.56 5,197,093* 3.57 12,126,500*** 3.57 Dr A A Dobbie 49,223 0.03 114,853 0.03 Dato’ Lee Hau Hian 10,613 0.01 24,763 0.01 27,414,414** 18.82 63,966,966 18.82 Senior Manager Derick Whyte — — — — * Non Beneficial Interest ** Includes shares held by the KLK Group *** This assumes that these shareholders take up their full entitlement to New Ordinary Shares Pursuant to the Rights Issue Each of the Directors holding Ordinary Shares, except the Hon. Alexander Catto, have entered into lock up arrangements in connection with the Rights Issue pursuant to which they have undertaken, subject to certain exceptions, not to sell or dispose of their holding of Ordinary Shares prior to 11 March 2011. As at 10 December 2010 (being the latest practicable date prior to the posting of this document), RBC Trustees (Guernsey) Limited, the trustee of the Company’s Employee Benefits Trust held 3,418 Ordinary Shares (0.002 per cent. of the Group’s issued ordinary share capital). As potential beneficiaries of the Employee Benefits Trust, all the executive Directors of the Group are treated as interested in transactions by the Employee Benefits Trust.

163 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 6.2 Share options held by Directors and Senior Manager The following options over Ordinary Shares have been granted to Directors and the Senior Manager:

Options Maximum held at 31 Exercise Date from December price which Expiry Director 2009* (pence) exercisable date A M Whitﬁeld 223,270 — 2011 2018 896,969 — 2012 2019 218,390 — 2013 2020

1,338,629 —

D C Blackwood 144,654 — 2011 2018 580,606 — 2012 2019 141,091 — 2013 2020

866,351 —

D B Whyte 83,648 — 2011 2018 354,666 — 2012 2019 88,505 — 2013 2020

526,819

* All of these options have been granted pursuant to the Yule Catto Performance Share Plan details of which are set out in paragraph 5.1 of this Part XI. 6.3 Substantial Shareholders Save as disclosed below, the Group is not aware of any person who, directly or indirectly, was, as at 10 December 2010 (being the latest practicable date before the publication of this document) interested in three per cent. or more of the current issued ordinary share capital of Yule Catto:

Percentage of issued Percentage share Number of of issued capital of Ordinary share Number of Yule Catto Shares capital held Ordinary held prior upon upon Shares to the completion completion prior to the Rights of the of the Rights Issue (per Rights Rights Issue cent.) Issue Issue(1) Kuala Lumpur Kepong Berhad 27,414,414 18.82 63,966,966 18.82 UBS Global Asset Management (UK) Ltd. 11,032,948 7.57 25,743,545 7.57 Artemis Investment Management Ltd. 9,539,241 6.55 22,258,229 6.55 NatWest Private Banking 9,367,686 6.43 21,857,934 6.43 BlackRock Advisors (Institutional Group) 6,347,650 4.36 14,811,183 4.36 JPMorgan Asset Management U.K. Limited 6,223,260 4.27 14,520,940 4.27 M & G Investment Management Ltd. 4,788,034 3.29 11,172,079 3.29 Schroder Investment Management Ltd. (SIM) 4,674,314 3.21 10,906,732 3.21 (1) These percentages assume that each Shareholder takes up their full entitlement to New Ordinary Shares pursuant to the Rights Issue.

164 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The Shareholders detailed in the above table do not have different voting rights from those of the other Shareholders. The Directors are not aware (i) of any persons who, directly or indirectly, jointly or severally, exercise or could exercise control or ownership over the Company, nor (ii) of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company.

7. Memorandum and Articles of Association of the Company 7.1 Memorandum of Association The Company has no statement of objects in its memorandum of association or Articles of Association and accordingly its objects are unrestricted in accordance with the provisions of the Companies Act.

7.2 Articles of Association The following is a summary of the rights and provisions in the Articles of Association of the Company relating to the shares generally:

7.2.1 Voting rights Subject to any special rights or restrictions attached to any shares, on a show of hands each holder of shares present in person and entitled to vote shall have one vote and upon a poll each such holder who is present in person or by proxy and entitled to vote shall have one vote in respect of every share held by him. In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holders. For this purpose seniority shall be determined by the order in which the names appear in the register of members. No member shall, unless the board otherwise determines, be entitled to vote at any general meeting, whether in person or by proxy, if any call or other sum payable by him in respect of shares remains unpaid. If any member, or any other person appearing to be interested in shares (within the meaning of Part 22 of the Companies Act) held by such member, has been duly served with a notice under Section 793 of the Companies Act and is in default for a period of 14 days in supplying to the Company the information required by that notice, then (unless the Directors otherwise determine) in respect of any shares held by the member, the member shall not (for so long as the default continues) nor shall any transferee to whom any of such shares are transferred (other than pursuant to an approved transfer or pursuant to the Articles of Association) be entitled to attend or vote either personally or by proxy at a General Meeting or to exercise any other right conferred by membership in relation to General Meetings.

7.2.2 Variation of class rights and alteration of capital The rights of Shareholders may be varied only pursuant to a special resolution, passed by the Company’s Shareholders to amend the Articles of Association. If at any time the share capital of the Company is divided into different classes of shares, any of the rights attached to any share or class of shares in the Company (and notwithstanding that the Company may be or be about to be in liquidation) may be varied or abrogated in such manner (if any) as may be provided by such rights, or in the absence of such provision, with the consent in writing of the holders of three-quarters in nominal value of the issued shares of that class (excluding any shares held as treasury shares) or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class but not otherwise. The provisions of the Articles of Association relating to general meetings shall apply, to every such separate general meeting of a class of shareholders except that the necessary quorum at any such meeting (other than an adjourned meeting) shall be two persons holding or representing by proxy at least one-third of the nominal amount paid up on the issued shares of the relevant class, and at an adjourned meeting one person holding shares of the class or his proxy.

165 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The special rights attached to any class of shares having preferential rights, shall not be deemed to be varied or abrogated by the creation or issue of any new shares ranking pari passu as regards participation in the proﬁts or assets of the Company, in some or all respects equally with them but in no respect in priority to them; or the purchase or redemption by the Company of its own shares. The Company may by ordinary resolution issue any share in the Company with such rights or restrictions as the Company may from time to time determine. Subject to the provisions of the Companies Act: (a) the Company may purchase its own shares; (b) the Company may by special resolution reduce its share capital or any capital redemption reserve or any share premium account in any way; (c) all unissued shares in the capital of the Company shall be at the disposal of the Board who may allot (with or without conferring any rights of renunciation), grant options over or otherwise deal with or dispose of the same as the board may decide, provided that no shares shall be issued at a discount; and (d) subject to any special rights for the time being attached to any existing shares, any shares may be issued on terms that they are, or are liable to be redeemed.

7.2.3 General meetings An Annual General Meeting shall be held with six months of the Company’s accounting reference date at such place, date and time as may be decided by the Directors. At least 21 clear days’ written notice must be given for every Annual General Meeting. Such notice must be given to the members (other than any who are not entitled to receive such notice), to the Directors and to the Company’s auditors.

7.2.4 Transfer of shares The instrument of transfer of a certificated share shall be signed by or on behalf of the transferor (and, in the case of a share which is not fully paid, by or on behalf of the transferee) and the transferor shall be deemed to remain the holder of the share, until the name of the transferee is entered in the register of members in respect thereof. All transfers of certificated shares shall be effected by instrument in writing in any usual form or any other form which the Yule Catto board may approve. All transfers of shares which are in uncertificated form shall be effected by means of a relevant system unless the CREST Regulations provide otherwise. The Board may decline to recognise any instrument of transfer unless it is duly stamped, is in favour of a single transferee (or not more than four joint transferees), it is in respect of a share which is fully paid up, accompanied by the relevant certificate (except where no certificate has been issued for them) and such other evidence as the board may reasonably require to show the right of the transferor to make the transfer, and unless the instrument is in respect of only one class of share.

7.2.5 Secretary A Secretary may be appointed by the Directors.

7.2.6 President The Directors may from time to time elect a president of the Company and may determine the period for which he shall hold ofﬁce. Such president may be either honorary or paid such remuneration as the Directors in their discretion shall think ﬁt, and need not be a Director. If the president is not a Director he shall be entitled to receive notice of and attend and speak, but not vote, at all meetings of the Board.

7.2.7 Directors (a) Number of Directors The number of directors of the Company (other than alternate directors) shall not be less than three but shall not be subject to any maximum.

166 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS (b) Appointment of Directors Directors of the Company may be appointed by the Company by ordinary resolution or by the Board. Directors of the Company appointed by the Board shall retire at the annual general meeting of the Company following such appointment and shall not be taken in account in determining the number of directors who are to retire by rotation. The Board may from time to time appoint one or more of its body to hold any executive office with the Company on such terms for and such period as they may determine (subject to the provisions of the Companies Act) and subject to any other conditions as the Board thinks fit and to the terms of any contract entered into in any particular case, may also revoke or vary the terms of any such appointment. (c) Retirement of directors Each director shall retire at the annual general meeting of the Company held in the third calendar year following the year in which he was elected or last re-elected by the Company. A retiring director may, if willing to act, be re-appointed. (d) Removal of directors by ordinary resolution The Company may by ordinary resolution remove any director of the Company before the expiration of his period of office. (e) Vacation of office by director The office of a director shall be vacated if: – he resigns by notice in writing delivered to the Company; – he ceases to be a director by virtue of any provision of the Companies Act, pursuant to the Articles of Association or prohibited by law from being a director; – he becomes bankrupt, applies to the court for an interim receiving order under section 253 of the Insolvency Act 1986 to be made against him or makes any arrangement or compounds with his creditors generally; – a court order is made on the grounds of mental disorder for his detention or for the appointment of a guardian or other person to exercise powers with respect to his affairs; – he is absent without the permission of the board, from board meetings for six consecutive months and the board resolve that his office be vacated; – he is removed from office by notice of termination in writing signed by all his co-directors for the time being; or – in the case of any director (other than the Chairman) who holds any executive office with the Company, his appointment as such is terminated or expires and the directors resolve that his office be vacated. (f) Alternate directors Any director of the Company may at any time appoint (by notice in writing signed by the Director concerned) any person (including another Director) to be his alternate and may, at his discretion, remove such alternate director at any such time. An alternate director shall also cease to be an alternate director if his appointor ceases to be a director or if any events happen in relation to him which, if he were a director otherwise appointed, would cause him to vacate office. If the alternate director is not already a director or his appointment has not previously been approved, such appointment shall not be effective until it has been approved. (g) Proceedings of the directors and committees The Board may meet for the dispatch of business, adjourn and otherwise regulate its proceedings as it thinks fit. At any time any Director may, and the Secretary at the request of a Director shall, call a meeting of the Directors by giving notice to the other Directors. The quorum necessary for the transaction of business may be fixed from time to time by the Directors and unless so fixed shall be two directors. A duly

167 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS convened meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions for the time being vested in or exercisable by the Directors. The Board may elect a director of the Company to be the chairman or deputy chairman and may remove him or them from office at any time. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman of that meeting shall have a second or casting vote. All or any of the members of the Board may participate in a meeting of the Board or a committee of the Board through the medium of conference telephone or any communication equipment which allows all persons participation in the meeting to speak to and hear each other. A person so participating shall be deemed to be present at the meeting and shall be entitled to vote and to be counted in the quorum. If and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with the Articles of Association the continuing Directors or Director may act for the purpose of appointing such number of additional Directors as is required to meet the minimum fixed by the Articles of Association or for the purpose of summoning general meetings of the Company, but not for any other purpose. If no Directors or Director is able or willing to act, then any two members may summon a general meeting of the Company for the purpose of appointing Directors. All acts done by any meeting of Directors shall as regards all persons dealing in good faith with the Company be valid, notwithstanding that there was some defect in the appointment of any Director or any such persons, or that any such persons were disqualified or had vacated office, or were not entitled to vote. (h) Remuneration of directors The maximum aggregate annual fees payable to the Directors for services in the office of director shall be the sum of £500,000 or such larger sum as the Company in general meeting by ordinary resolution shall from time to time determine. Each director shall be entitled to be repaid all reasonable expenses incurred relating to the performance of his duties as a director, including attendance at Company meetings. The salary or remuneration of any director appointed to hold executive office in accordance with the provisions of the Articles of Association or who otherwise performs services outside the scope of his ordinary duties may be paid such extra remuneration by way of salary, commission or otherwise as the Directors may determine. (i) Pensions and other benefits The Board may exercise all the powers of the Company to pay a Director’s remuneration. This may include the payment of gratuities, allowances, pensions or other retirement or superannuation benefits and to provide death or disability benefits to, or to any person in respect of that Director. (j) Directors’ interests A director who is directly or indirectly interested in a transaction or arrangement with the Company, must declare, in accordance with the Companies Act, the nature and extent of his interest to the other directors. The Board may, subject to the provisions of the Articles of Association, authorise any matter which would otherwise involve a director of the Company breaching his duty under the Companies Act to avoid conflicts of interest. Where the board of directors of the Company gives authority in relation to a conflict of interest in accordance with the Articles of Association then (subject to such terms and conditions, if any, as the directors of the Company may think fit to impose from time to time) the relevant director of the Company shall not by reason of his office as a director of the Company be accountable to the Company for any benefit which he (or a person connected with him) derives from any matter which is the subject of the conflict of interest.

168 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS A director shall not be required to disclose any confidential information obtained in relation to the relevant (other than through his position as a director of the Company) to the Company if to do so would result in a breach of a duty or obligation of confidence owed by him in relation to that matter. The Board may revoke or vary such authority at any time. Subject to the provisions of the Companies Act, and provided he has declared the nature and extent of his interest to the board as required by the Companies Act, a director of the Company: – may be party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested; – may be a director or other officer of, or employed by, or party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Company or in which the Company is otherwise interested; – shall not, by reason of his office, be accountable to the Company for any benefit which he derives from any such office, employment, transaction, arrangement or interest of any such body corporate and no such transaction or arrangement shall be liable to be avoided; – may act by himself or his firm in a professional capacity for the Company (otherwise than as auditor) and he or his firm shall be entitled to remuneration for professional services as if he were not a director; – may have an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest; – may have an interest where a Director has an interest or a transaction or arrangement giving rise to an interest of which the Director is not aware; and – may have any other interest authorised by ordinary resolution. (k) Restrictions on voting No director of the Company may vote on or be counted in the quorum in relation to any resolution of the Board concerning his own appointment, or the fixing or variation of the terms of his own appointment. No member shall, unless the Board otherwise determines, be entitled to vote at a meeting or at any separate meeting of the holders of any class of shares, in respect of a share held by him, unless and until all calls or other sums of that share have been paid. Subject to certain limited exceptions set out in the Articles of Association, no Director of the Company may vote on, or be counted in a quorum in relation to any resolution of the Board or of a committee of the Board in which he (or a person connected with him) has a direct or indirect interest (which is a material interest) and, if he does so, his vote shall not be counted. If a question arises at any time as to whether any interest of a Director prevents him from voting such question shall be referred to the chairman of the meeting. Subject to the Companies Act, the Company may by ordinary resolution ratify any transaction contract or arrangement not duly authorised by reason of a contravention of such provisions. (l) Indemnity of directors To the extent permitted by the Companies Act, the Company may indemnify any current or previous director of the Company or any associated company against any liability and may purchase and maintain for any director of the Company or any associated company insurance against any liability and provide the Director with funds to meet expenditure incurred or to be incurred by him in defending any criminal or civil proceedings in connection with any negligence, default, breach of duty or breach of trust by him in relation to the Company or an Associated Company of the Company; or in connection with any application for relief under the provisions mentioned in Section 205(5) of the Companies Act; and do anything to enable any such Director to avoid incurring such expenditure.

169 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS (m) Director shareholdings Directors of the Company shall not be required to hold any shares in the Company.

7.2.8 Borrowing powers Subject to the Companies Act, the Directors may exercise all powers of the Company to borrow money and to mortgage or charge all or any part of its undertaking, property and assets (present and future) and uncalled capital and to create and issue debentures and loan stock and other securities whether outright or as collateral security for any debt liability or obligation of the Company or of any third party. The Directors shall restrict the borrowings of the Company and exercise all voting and other rights or powers of control exercisable by the Company in respect of its subsidiary undertakings (if any) so as to procure (as regards subsidiary undertakings in so far as it can procure by such exercise) that the aggregate principal amount (including any premium on ﬁnal repayment) at any one time outstanding in respect of all monies borrowed by the Company and any subsidiary undertakings for the time being (exclusive of monies borrowed by one group company from another and other amounts as detailed in the articles), shall not at any time, without the previous sanction of an ordinary resolution of the Company, exceed £400,000,000.

7.2.9 Dividends and distributions to Shareholders The Company may, by ordinary resolution, declare final dividends to be paid to members according to their respective rights and interests in the profits of the Company. No dividend shall exceed the amount recommended by the Directors. Except insofar as the rights attaching to, any share otherwise provide, all dividends shall be declared and paid according to the amounts paid up on the shares (otherwise than in advance of calls) and shall be apportioned and paid proportionately to the amounts paid up on the shares during any portion of the period in respect of which the dividend is paid. The Directors may pay such fixed and interim dividends as appear to the Directors to be justified by the profits of the Company available for distribution. The Directors may retain all or part of any dividend or other sum payable on or in respect of a share on which the Company has a lien in respect of which the Directors are entitled to issue an enforcement notice and shall apply the amounts retained in or towards satisfaction of the moneys payable to the Company in respect of that share. All unclaimed dividends may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. All dividends unclaimed for a period of twelve years from the date of declaration thereof shall, if the Directors so resolve, be forfeited and the Company may keep that sum. A shareholder or other person entitled to a dividend may waive it in whole or in part. The Directors may offer shareholders the right to elect to receive an allotment of new ordinary shares (‘‘Scrip Shares’’) credited as fully paid in lieu of the whole or part of a dividend. The Directors shall not allot Scrip Shares unless so authorised by ordinary resolution. Such a resolution may give authority in relation to particular dividends or may extend to all dividends declared or paid in the period specified in the resolution. Such period may not be longer than five years from the date of the resolution. The Directors may, without the need for any further ordinary resolution, offer rights of election in respect of any dividend declared or proposed after the date of the adoption of the Articles of Association and at or prior to the next annual general meeting of the Company. The Scrip Shares allotted shall rank equally in all respects with the fully paid ordinary shares then in issue save only as regards participation in the relevant dividend.

7.2.10 Winding up The Directors have the power in the name and on behalf of the Company to present a petition for the Company to be wound up.

170 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 7.2.11 Disclosure of interests in shares The Disclosure and Transparency Rules require Shareholders to notify the Company if the voting rights held by such Shareholder (including by way of a certain financial instrument) reaches, exceeds or falls below 3 per cent., 4 per cent., 5 per cent., 6 per cent., 7 per cent., 8 per cent., 9 per cent., 10 per cent. and each 1 per cent. threshold thereafter up to 100 per cent. Pursuant to the Companies Act, the Company may also send a notice to any person whom the Company knows or believes to be interested in the Company’s requiring that person to confirm whether he has such an interest and if so, details of that interest. Under the Articles of Association and the Companies Act, if a person fails to provide the Company with the information required by the notice within the time specified, or information provided happens to be false (whether deliberate or reckless) in respect of any shares (the ‘‘default shares’’) the Directors may serve a restriction notice on such person. Such a restriction notice will state that the default shares held by that person shall not confer any right to attend or vote at any general meeting of the Company, or separate meeting of the holders of any class of shares, and certain other sanctions may also apply. 7.2.12 Electronic Communication The Company may, subject to and in accordance with the Companies Act, send or supply all types of notices, documents or information to members by electronic means and/or by making such notices, documents or information available on a website.

8. Service agreements and remuneration of the Directors 8.1 Executive Directors The Company has entered into the following contracts with its executive Directors:

Adrian Whitfield – Chief Executive Officer An agreement dated 22 November 2005 between the Company and Adrian Whitfield pursuant to which Mr Whitfield agreed to serve as Chief Executive of the Company or in such capacity of a like status as the Board shall reasonably require. Under the agreement, Mr Whitfield is entitled to a basic annual salary (currently at the rate of £380,000 per annum) and certain other benefits. Mr Whitfield is also entitled to participate in an annual incentive plan (the growth securities ownership plan), payments under which in 2010 are linked to growth in profit before tax. Under this incentive plan Mr Whitfield may be entitled to payments of up to 80 per cent. of his basic annual salary in each financial year and these may be subject to such conditions as the Remuneration Committee may from time to time decide. In the financial year ended 31 December 2009 Mr Whitfield received a payment of £296,000 pursuant to this incentive plan. The agreement also provides that the Company will make a supplementary payment to Mr Whitfield equivalent to 25 per cent. of his basic annual salary towards his personal pension provision. The agreement is terminable by the Company or Mr Whitfield on 12 months’ notice. The Company can terminate Mr Whitfield’s employment forthwith on payment to Mr Whitfield in lieu of all or any part of the notice period a sum equal to the aggregate of his basic salary, the Company’s payments towards provision of Mr Whitfield’s pension and such additional payments (if any) as shall have accrued to Mr Whitfield under the terms of any incentive or bonus scheme. In certain circumstances (for example in the event of material breach, gross misconduct, disqualification, criminal conviction, bankruptcy, drug addiction or mental illness) the employment of Mr Whitfield may be terminated by the Company without notice.

David Blackwood – Finance Director An agreement dated 12 September 2007 between the Company and David Blackwood pursuant to which Mr Blackwood agreed to serve as Finance Director of the Company or in such capacity of a like status as the Board shall reasonably require. Under the agreement, Mr Blackwood is entitled to a basic annual salary (currently at the rate of £245,500 per annum) and certain other benefits. Mr Blackwood is also entitled to participate in an annual incentive plan (the growth securities ownership plan), payments under which in 2010 are linked to growth in profit before tax. Under this incentive plan Mr Blackwood may be entitled to payments of up to 60 per cent. of his basic annual salary in each financial year and these may be subject to such conditions as the Remuneration Committee may from time to time decide. In the financial year ended 31 December 2009 Mr Blackwood received a payment of £143,700 pursuant to this

171 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS incentive plan. The agreement also provides that the Company will make a supplementary payment to Mr Blackwood of equivalent to 20 per cent. of his basic annual salary towards his personal pension provision. The agreement is terminable by the Company or Mr Blackwood on 12 months’ notice. The Company can terminate Mr Blackwood’s employment forthwith on payment to Mr Blackwood in lieu of all or any part of the notice period a sum equal to the aggregate of his basic salary, the Company’s payments towards provision of Mr Blackwood’s pension and such additional payments, (if any) as shall have accrued to Mr Blackwood under the terms of any incentive or bonus scheme. In certain circumstances (for example in the event of material breach, gross misconduct, disqualiﬁcation, criminal conviction, bankruptcy, drug addiction or mental illness) the employment of Mr Blackwood may be terminated by the Company without notice. 8.2 Non-Executive Directors The Company has entered into letters of appointment in respect of the provision to the Company of the services of the following non-executive Directors:

Peter Wood – Chairman A letter of appointment with Peter Wood dated 19 February 2009 pursuant to which Mr Wood agreed to serve as Chairman of the Company until the Company’s annual general meeting in 2012. Mr Wood is currently entitled to an annual fee of £110,000 per annum.

Jeremy Maiden A letter of appointment with Jeremy Maiden dated 15 July 2010. This appointment, terminable by three months’ notice on either side, is for a ﬁxed term of three years unless it is renewed or extended. Mr Maiden is currently entitled to an annual fee of £36,000.

The Hon. Alexander Catto A letter of appointment with The Hon. Alexander Catto dated 14 May 2008. This appointment is for a ﬁxed term of three years unless it is renewed or extended. The Hon. Mr Catto is currently entitled to an annual fee of £30,000.

Dr. Alexander Dobbie A letter of appointment with Dr Alexander Dobbie dated 15 July 2010. This appointment is for a ﬁxed term of three years unless it is renewed or extended. Dr Dobbie is currently entitled to an annual fee of £36,000.

Dato’ Lee Hau Hian A letter of appointment with Dato’ Lee Hau Hian dated 21 August 2008. This appointment is for a fixed term of three years unless it is renewed or extended. Dato’ Lee Hau Hian is currently entitled to an annual fee of £30,000. 8.3 Remuneration of Directors and the Senior Manager The amount of remuneration paid to the Directors and the Senior Manager (including any contingent or deferred compensation) and benefits in kind granted to the Directors and the Senior Manager by the Company or any member of the Company during the financial year ended 31 December 2009 was, on an individual basis, as follows: Benefits in Total for Basic Bonus kind/ year ended salary/fees accrued allowance 31.12.09 £ £ £ £ Executive Directors A M Whitfield 370,000 296,000 27,071 693,071 D C Blackwood 239,500 143,700 16,660 399,860 Non Executive Directors Current P S Wood 103,833 — — 103,833 The Hon. A G Catto 30,000 — — 30,000 Dr A A Dobbie 35,500 — — 35,000 J K Maiden 36,000 — — 36,000 Dato’ Lee Hau Hian 30,000 — — 30,000

172 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Beneﬁts in Total for Basic Bonus kind/ year ended salary/fees accrued allowance 31.12.09 £ £ £ £ Former A E Richmond-Watson (until 1 February 2009) 9,167 — — 9,167 R H Hunting (until 14 May 2009) 13,938 — — 13,938 Dato’ Seri Lee Oi Hian (until 14 May 2009) 11,615 — — 11,615 G R Menzies 30,000 30,000 Senior Manager Derick Whyte 209,000 125,400 19,687 354,087 The above ﬁgures do not include amounts in respect of (i) the value of shares options granted to or held by the Directors, further details of which are contained at paragraph 6.2 of this Part XI; or (ii) Directors’ and senior manager’s pension entitlements, further details of which are contained in paragraph 8.4 of this Part XI.

8.4 Directors’ and Senior Manager’s Pension Entitlements Payments may by the Company directly to the Directors and the Senior Manager for the year ended 31 December 2009 in lieu of their agreement not to participate in any of the Group’s pension schemes were as follows:

Total for year ended 31.12.09 (£) A M Whitﬁeld 92,500 D C Blackwood 47,900 Mr D B Whyte is a member of the Company’s group personal pension plan into which the Company pays an annual contribution of 15 per cent. of basic salary (2009 = £31,350).

8.5 General Save as set out in this paragraph 8, there are no existing contracts between any of the Yule Catto Directors and any member of the Yule Catto Group. The total emoluments receivable by the Directors will not be varied as consequence of the Rights Issue.

9. Board Practices 9.1 Audit Committee The following is a summary of the terms of reference under which the Company’s Audit Committee operates. Information as to the current composition of the Audit Committee is contained in paragraph 9.4 below. The Audit Committee shall be made up of at least three members, all of whom are independent non-executive directors. The Chairman of the Board cannot be a member of the Audit Committee. The Audit Committee shall meet at least twice a year and the quorum for such meeting shall be two. Meetings of the Audit Committee shall be summoned by the Secretary of the Audit Committee at the request of any of its members or at the request of external auditors if they consider it necessary. The primary duty of the Audit Committee shall be to monitor the integrity of the ﬁnancial statements of the Company (and any other formal announcements relating to its ﬁnancial performance) and to ensure the independence, objectivity and cost-effectiveness of the auditors and the internal audit process of the Company and the Group. The Audit Committee oversees the relationship with the Company’s external auditor and approves its terms of engagement and fees. The Audit Committee also makes recommendations to the Board, which are then put to shareholders for approval at the annual general meeting of the Company, in relation to the appointment, re-appointment and removal of the auditors.

173 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The Audit Committee shall satisfy itself that there are no relationships (such as family, employment, investment, financial or business) between the external auditor and the Company (other than in the ordinary course of business). The other duties of the Audit Committee include (amongst others): 9.1.1 to meet regularly with the external auditor, including once at the planning stage before the audit and once after the audit at the reporting stage. The Audit Committee shall meet the external auditor at least once a year, without management being present, to discuss their remit and any issues arising from the audit; 9.1.2 to review and approve the annual audit plan and ensure that it is consistent with the scope of the audit engagement; 9.1.3 to review the findings of the audit with the external auditor; 9.1.4 to review any representation letter(s) requested by the external auditor before they are signed by management; 9.1.5 to review the management letter and management’s response to the auditor’s findings and recommendations; and 9.1.6 to develop and implement a policy on the supply of non audit services by the external auditor, taking into account any relevant ethical guidance on the matter; The chairman of the Audit Committee shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. As recommended by the Combined Code, all the members of the Audit Committee as at 10 December 2010 (being the latest practical date before publication of this document) are independent non-executive directors. 9.2 Remuneration Committee The following is a summary of the terms of reference under which the Company’s Remuneration Committee operates. Information as to the current composition of the Remuneration Committee is contained in paragraph 9.4 below. The Remuneration Committee shall be made up of at least three independent non-executive directors. Appointments to the Remuneration Committee shall be for a period of up to three years and can be extended for a further two terms. The Remuneration Committee shall meet at least twice a year in March and December and at such other times as the Chairman of the Remuneration Committee shall require. The quorum for a meeting of the Remuneration Committee shall be two. The secretary of the Company or their nominee shall act as the secretary of the Remuneration Committee and meetings of the Remuneration Committee shall be summoned by the secretary of the Remuneration Committee at the request of any of its members. The primary duty of the Remuneration Committee is to determine and agree with the Board the framework or broad policy for the remuneration of the Company’s chief executive, chairman, the executive directors, the company secretary and such other members of the executive management as it is designated to consider. The remuneration of non-executive directors (except the Chairman) shall be a matter for the Board (within the parameters of the Articles. No director or manager shall be involved in any decisions as to their own remuneration. The objective of such policy shall be to ensure that members of the executive management of the Company are provided with appropriate incentives to encourage high levels of performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company. It is the responsibility of the Remuneration Committee to review the design of all share incentive plans for approval by the Board and shareholders and to determine how such awards and performance targets are to be used. The Remuneration Committee produces an annual report of the Company’s remuneration policy and practices which forms part of the Company’s Annual Report and Accounts and which is laid before shareholders for approval at each annual general meeting of the Company. As recommended by the Combined Code, all the members of the Remuneration Committee are at 10 December 2010 (being the latest practical date before publication of this document) independent non-executive directors.

174 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 9.3 Nominations Committee The following is a summary of the terms of reference under which the Company’s Nominations Committee operates. Information as to the current composition of the Nominations Committee is contained in paragraph 9.4 below. Members of the Nominations Committee shall be appointed by the Board and shall be made up of least three members, the majority of whom should be independent non-executive directors. Appointments to the Nominations Committee shall be for a period of up to three years, which may be extended for a two further terms. The quorum necessary for the transaction of business of the Nominations Committee shall be two, both of whom must be independent non-executive directors. The Nominations Committee shall meet at least once a year in December and at such other times as the Chairman of the Nominations Committee shall require. The secretary of the Company or their nominee shall act as the secretary of the Nominations Committee and meetings of the Nominations Committee shall be summoned by the secretary of the Nominations Committee at the request of the chairman of the Committee. The Nominations Committee shall regularly review the structure, size and composition (including the skills, knowledge and experience) required of the Board compared to its current position and make recommendations to the Board with regard to any changes and give full consideration to succession planning for directors, non-executive directors and other senior executives in the course of its work, taking into account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the future. The Nomination Committee makes a statement in each annual report of the Company about its activities, the process used to make appointments and explain if external advice or open advertising has not been used. As recommended by the Combined Code the members of the Nominations Committee comprise of a majority of independent non-executive directors. 9.4 The Group’s audit, remuneration and nominations committees are currently constituted as follows:

Committee Members Audit Jeremy Maiden (Chairman) Dr Alexander Dobbie Remuneration Dr Alexander Dobbie (Chairman) Jeremy Maiden Nominations Peter Wood (Chairman) Jeremy Maiden Dr Alexander Dobbie Adrian Whitﬁeld

Due to the resignation of Graham Menzies, the Company’s then senior independent non- executive director, on 28 June 2010, both the Audit Committee and the Remuneration Committee currently only have two members. The Company is currently in the process of appointing a further independent non-executive director who will, on appointment, become a member of both the Audit and Remuneration Committees.

9.5 Combined Code 9.5.1 The Group is committed to the principles of corporate governance contained in the Combined Code. Save as set out in paragraph 9.5.2 below, the Group currently complies, and throughout the year ending 31 December 2009 the Group Complied, with the provisions set out in Section 1 of the Combined Code and all the relevant corporate governance regimes in England and Wales. 9.5.2 For the purposes of the Combined Code, the Company is, for its current ﬁnancial year, classiﬁed as a smaller company and is therefore technically compliant with the Combined Code requirements on the minimum number of independent non-executive directors given

175 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS that it currently has two independent non-executive directors on the Board. The Company has however during the current ﬁnancial year become a constituent member of the FTSE 350 and will therefore be required to ensure that, for the ﬁnancial year commencing 1 January 2011, at least 50 per cent. of the Board, excluding the Chairman, is comprised of independent non-executive directors or explain otherwise. In addition, due to the resignation of Graham Menzies, the Company’s then senior independent non-executive director, on 28 June 2010, both the Audit Committee and the Remuneration Committee currently only have two members which is contrary to the recommendations of the Combined Code. The Company is currently in the process of appointing a further independent non-executive director who will, on appointment, become a member of both the Audit and Remuneration Committees.

176 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 10. Subsidiary undertakings of the Group The Company is the parent company of the Group. The principal subsidiary undertakings of the Company (being those which are considered by the Company to be most likely to have a significant effect on the assessment of the assets and liabilities, financial position or profits and losses of the Group) are set out below.

Company Principal activity Country of Effective Incorporation Group and operation interest in Equity % Arkem (Pty) Ltd Distributor of South Africa 50a speciality chemicals and allied products Synthomer Middle East Company Synthetic resin Saudi Arabia 49 emulsions Revertex Chemicals (Pty) Ltd Synthetic resin and South Africa 100 emulsions and allied products Revertex (Malaysia) Sdn Bhd Synthetic resin and Malaysia 70 emulsions, natural rubber latices, plasticers and allied products Synthomer BV Compounds of Netherlands 100 synthetic rubber latices Synthomer GmbH Synthetic rubber Germany 100 latices and related compounds Synthomer Limited Synthetic rubber England 100* latices and emulsions Synthomer SA Compounds, Belgium 100 dispersions and adhesives Synthomer Sdn Bhd Synthetic rubber Malaysia 100 latices and related compounds Synthomer Vietnam Co. Ltd Synthetic adhesives Vietnam 60 Union Quimico Farmaceutica SA Pharmaceutical Spain 100 actives and intermediates Uquifa Mexico S.A.C.V. Pharmaceutical Mexico 100 actives and intermediates William Blythe Limited Inorganic chemicals England 100 Holliday Chemical Holdings Holding company England 100 Yule Catto International SA Holding company France 100 Yule Catto BV Holding company Netherlands 100 Yule Catto Financing Ltd Holding company Ireland 100 Yule Catto Holdings GmbH Holding company Germany 100 Yule Catto International Limited Holding company England 100* Yule Catto Spain SL Holding company Spain 100 Yule Catto Nederland BV Holding company Netherlands 100 a Joint ventures * Shares held by Yule Catto. All other companies listed are indirect subsidiary undertakings of Yule Catto.

177 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Where the Company directly holds shares in the subsidiaries the Company holds voting rights in each subsidiary undertaking in the same proportion to its holdings in the ordinary share capital of the respective subsidiaries.

11. Yule Catto material contracts 11.1 Introduction Save for the contracts described or referred to in this paragraph 11, no member of the Group has (i) entered into any material contract (not being a contract entered into in the ordinary course of business) within the two years immediately preceding the date of this document or (ii) entered into any other contract (not being a contract entered into in the ordinary course of business) which contains any provision under which any member of the Group has any obligation or entitlement which is or may be material to the Group as at the date of this document. 11.2 Acquisition Agreement A summary of the principal terms of the Acquisition Agreement is set out in Part II of this document. 11.3 Underwriting Agreement The Company and the Underwriters entered into the Underwriting Agreement, dated 13 December 2010, pursuant to which the Joint Bookrunners have agreed severally, subject to certain conditions, to use reasonable endeavours to procure subscribers for, or failing which, the Underwriters have severally agreed to subscribe in the agreed proportions for, the Underwritten Shares to the extent not taken up by Qualifying Shareholders under the Rights Issue, in each case at the Issue Price. In consideration of the services to be provided by the Underwriters under the Underwriting Agreement, the Company will pay to the Underwriters a commission of 3.0 per cent. of the value of the Underwritten Shares at the Rights Issue Price (such amount being shared in the agreed proportions). Such commission shall be payable whether or not the Underwriters are required to subscribe (or the Joint Bookrunners procure subscribers) for the Underwritten Shares, but shall be paid only in the event that the Underwriting Agreement is not terminated and does not terminate prior to Admission. In addition to the commissions set out above (and whether or not the obligations of the Underwriters become unconditional in all respects or the Underwriting Agreement terminates or is terminated), the Company shall pay all costs and expenses of, and in connection with, the Underwriting Agreement, the Rights Issue, the General Meeting, the allotment, issue, registration and delivery of the Nil Paid Rights or the New Ordinary Shares, the crediting of Nil Paid Rights to any stock account in CREST or the registration of New Ordinary Shares (including without limitation such part of any such costs or expenses as relates to the VAT chargeable on any supply or supplies for which such costs or expenses are all or any part of the consideration). The obligations of the Underwriters under the Underwriting Agreement are subject to certain conditions including, amongst others: * the passing of the Resolutions at the General Meeting; * Admission becoming effective on 31 December 2010 or such later time and/or date as the Company and the Joint Global Co-ordinators may agree; and * the fulﬁlment by the Company of certain of its obligations under the Underwriting Agreement, including the delivery of certain documents to the Joint Global Co-ordinators (on behalf of the Underwriters), by the times and dates speciﬁed in the Underwriting Agreement. No Underwriter is entitled to terminate the Underwriting Agreement after Admission. However, prior to Admission the Joint Global Co-ordinators may terminate the Underwriting Agreement in certain circumstances including if: (a) there shall have been a breach by Yule Catto of any of the representations, warranties or undertakings contained in or any other provision of the Underwriting Agreement or if any of the representations, warranties or undertakings given by Yule Catto is not or has ceased to be, true, accurate and not misleading in any respect which the Joint Global Co-ordinators acting in good faith in their absolute discretion consider to be

178 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS material; (b) any condition in the Underwriting Agreement has not been satisfied by the time it is required to have been satisfied or waived by the Joint Global Coordinators, or if any matter or circumstance arises as a result of which any of the Underwriters expects that any of the conditions will not be satisfied or waived at the required time(s) and continue to be satisfied at Admission or has become incapable of satisfaction; (c) any statement contained in this document and certain other documents prepared by Yule Catto in connection with the Acquisition is or has become untrue or inaccurate or misleading in any material respect, or any matter has arisen which would, if any of such documents were to be issued at that time, constitute a material omission therefrom; (d) a matter has arisen which in the opinion of the Joint Global Coordinators might reasonably be expected to give rise to a claim under the indemnity in the Underwriting Agreement; (e) in the opinion of the Joint Global Coordinators, there shall have been a material adverse change (whether or not foreseeable at the date of the Underwriting Agreement); (f) in the opinion of the Joint Global Coordinators, any matter referred to in section 87G of FSMA has arisen between the publication of this document and Admission or a supplementary prospectus is published by or on behalf of Yule Catto; (g) an application for Admission is withdrawn or refused; (h) the Acquisition Agreement terminates or any condition to which the Acquisition is subject becomes incapable of satisfaction; (i) in the opinion of the Joint Global Coordinators, there is information contained in this document (or in other documents issued by Yule Catto on or after the date of the Underwriting Agreement but prior to or at the same time as the publication of this document) that is not contained in an agreed form draft of the prospectus or the agreed form draft prospectus is inaccurate or misleading which in any such case the Joint Global Coordinators consider to be material and adverse or such as to make it impractical or inadvisable to proceed with the Rights Issue, the underwriting of the Underwritten Shares or Admission; or (j) there occurs certain force majeure events, including any material changes in national or international political, financial, economic, monetary or market conditions or currency exchange rates or controls or any outbreak or escalation of hostilities, war or terrorism, which in each case the Joint Global Coordinators consider in their opinion to be material, or there occurs certain other material events impacting certain national or international stock markets, settlement or clearance systems or commercial banking or material changes in law or regulation (including tax law). The parties to the Underwriting Agreement have agreed that if a supplementary prospectus is issued by the Company two or fewer Business Days prior to the date specified in this document as being the last date for acceptance and payment in full under the Rights Issue (or such later date as may be agreed between the parties), such date shall be extended to the date which is three Business Days after the date of issue of the supplementary prospectus. The Company has given certain customary warranties and indemnities to the Underwriters. The liabilities of the Company are unlimited as to time and amount.

11.4 Irrevocable Undertakings 11.4.1 In connection with the Rights Issue, companies KLK has given an irrevocable undertaking to take up (and procure the take up of) the full entitlement of the KLK Group under the Rights Issue and to vote (and procure votes) in favour of the Resolutions at the General Meeting. This will result in the KLK Group acquiring 36,552,552 New Ordinary Shares, representing approximately 18.82 per cent. of the New Ordinary Shares to be issued under the Rights Issue. KLK has paid an amount into escrow for the purpose of securing such take up. The KLK Group is being paid a commission of 1.75 per cent. of the aggregate value, at the Issue Price, of the New Ordinary Shares KLK has irrevocably undertaken to take up (and procure the take up of) under the Rights Issue. 11.4.2 In connection with the Rights Issue, each of the Shareholder Directors, other than the Hon. Alexander Catto, has given an irrevocable undertaking to take up rights in full in respect of, in aggregate 140,778 New Ordinary Shares, representing approximately 0.08 per cent. of the New Ordinary Shares to be issued under the Rights Issue and to vote in favour of the Resolutions at the General Meeting. The Hon. Alexander Catto will, in respect of his beneﬁcial interest in Ordinary Shares, be selling a sufﬁcient number of his Nil Paid Rights to enable him to purchase the balance of his allocation of New Ordinary Shares and has given an undertaking to vote (or procure votes) in favour of the Resolutions at the General Meeting.

179 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 11.5 New Credit Agreement The New Credit Agreement was entered into on 13 December 2010 and made between (1) the Company (as Original Borrower), (2) the Company and others (as Original Guarantors), (3) Barclays Capital, Commerzbank Aktiengesellschaft (‘‘Commerzbank’’), and HSBC (as Arrangers), (4) Barclays, Commerzbank (London Branch) and HSBC (as Original Lenders) and (5) HSBC (as Agent) pursuant to which the Lenders (as defined in the New Credit Agreement) have agreed to make available to the Company and, subject to the terms of the New Credit Agreement, various nominated subsidiaries, multicurrency term and revolving credit facilities in an aggregate amount of up to £210 million. The New Credit Facilities will be available for 3 years from signing. The New Credit Facilities are comprised of two tranches; facility A (being a term loan facility which is to be drawn in euros (or certain other currencies) in an amount in euros equal to £150 million) and facility B (being a revolving credit facility which is to be drawn in sterling (or certain other currencies) in an amount equal to £60 million). Facility A is to be used to part finance the Acquisition (including any fees and costs incurred in relation to the Acquisition) and to refinance certain indebtedness of the PolymerLatex Group. An amount of up to £15 million of facility B may be used to part finance the Acquisition (including any fees and costs incurred in relation to the Acquisition) and to refinance certain indebtedness of the PolymerLatex Group and the balance (and any undrawn part of the £15 million sub-limit not used for the purposes specified above) is to be used for general corporate purposes. The New Credit Facilities are unsecured but will be supported by guarantees from certain members of the Group and, following Completion, the PolymerLatex Group. Interest on the New Credit Facilities will be payable at the applicable London interbank offered rate for the relevant currency (European interbank offered rate in relation to euro) for the relevant interest period plus a margin plus any mandatory costs. The New Credit Agreement contains a margin ratchet based on the level of the leverage ratio. The New Credit Agreement contains financial covenants, including leverage tests (not to exceed 3.0:1) and interest cover tests (not to be less than 4.0:1), which are tested semi-annually. The New Credit Agreement includes, among other market standard provisions, representations and warranties, undertakings and events of default in each case relating to the Company and certain other members of the Group all of which are customary for credit arrangements of this type. There are also mandatory prepayment provisions on change of control and in relation to the net proceeds of any private placement of bonds or issue of other debt instruments to the extent that the proceeds raised exceed £75 million or its equivalent. The New Credit Facilities are committed, however, there are a series of conditions precedent to utilisation which will need to be satisfied in accordance with the terms of the New Credit Agreement in the usual way to enable the New Credit Facilities to be drawdown. These include that the shareholders of the Company have approved the Acquisition and that the Company has provided certificates confirming that (1) the Acquisition will not be referred to any merger control authority (save to the extent specified in the Acquisition Agreement) and (2) the Company has successfully raised (and received) net proceeds (as described in the New Credit Agreement) of not less than £215 million in equity prior to the first drawdown of the New Credit Facilities.

11.6 Existing Debt Facilities 11.6.1 Note Purchase agreement A note purchase agreement dated 2 September 2004 and entered into by the Company pursuant to which it issued three series of notes. The Series A notes were issued in an aggregate principal amount of $43 million. Interest on the Series A notes is payable at a rate of 5.55 per cent. and the Series A notes are due to be repaid on 2 September 2012. The Series B notes were issued in an aggregate principal amount of $70 million. Interest on the Series B notes is payable at a rate of 5.78 per cent. and the Series B notes are due to be repaid on 2 September 2014. The Series C notes were issued in an aggregate principal amount of $22 million. Interest on the Series C notes is payable at a rate of 5.98 per cent. and the Series C notes are due to be repaid on 2 September 2016.

180 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS All three series of loan notes are supported by guarantees of certain members of the Group. The financial covenants in the note purchase agreement stipulate that the leverage ratio is 3.5:1 or less and the interest cover ratio is not less than 3.0:1. This facility will continue to be available after completion of the Acquisition. 11.6.2 HSBC facilities agreement A facility agreement (the ‘‘HSBC Facility Agreement’’) dated 24 December 2008 and made between the Company and a syndicate of banks, with HSBC Bank plc as facility agent and security agent, pursuant to which the syndicate agreed to make available to the Company a multicurrency revolving credit facility in an aggregate amount of up to £30 million. The facility is available to the Company until 24 December 2011. Interest on the facility is payable at the applicable London interbank offered rate for the relevant currency (European interbank offered rate in relation to euro) for the relevant interest period plus a margin plus any mandatory costs. The HSBC Facility Agreement contains financial covenants, including leverage tests (not to exceed 3.0:1) and interest cover tests (not to be less than 4.0:1). The HSBC Facility Agreement also contains representations and warranties, undertakings given by the Company, events of default and mandatory prepayment provisions on change of control which is customary for credit arrangements of this type, all as more particularly set out in the HSBC Facility Agreement. The continued availability of the facility is conditional upon the repetition of various representations and warranties. Synthomer Limited is a signatory to the HSBC Facility Agreement as a guarantor, guaranteeing the obligations of the Company to the syndicate of banks. As part of the facility made available under the HSBC Facility Agreement, the Company has the benefit of ancillary facilities which can be made available to it by the syndicate. The HSBC Facility Agreement will be terminated on drawdown of the New Credit Facilities. 11.6.3 Malaysian facility Agreement A facility agreement (the ‘‘Malayan Facility Agreement’’) dated 20 January 2009 and made between Synthomer Sdn Bhd (‘‘Synthomer’’) and Malayan Banking Berhad (‘‘Malayan’’) pursuant to which Malayan agreed to make available to Synthomer a term loan facility in the principal amount of up to Ringgit Malaysia 70 million. The facility is available to Synthomer for 6 years following the initial drawdown. Interest on the facility is payable at the applicable Kuala Lumper interbank offered rate for the relevant interest period plus a margin plus any mandatory costs. The Malayan Facility Agreement contains financial covenants including a leverage test (not to exceed 3.0:1) and an undertaking that the Company shall remain listed on the London Stock Exchange. The Malayan Facility Agreement also contains representations and warranties, undertakings given by Synthomer, events of default and mandatory prepayment provisions on change of control and increased cost and capital adequacy which is customary for credit arrangements of this type, all as more particularly set out in the Malayan Facility Agreement. The continued availability of the facility is conditional upon the repetition of various representations and warranties. The Company has executed a corporate guarantee guaranteeing the obligations of Synthomer to Malayan. Synthomer has also executed a negative pledge in favour of Malayan. This facility will continue to be available after completion of the Acquisition. 11.6.4 Charge of Shares (the ‘‘Charge’’) In connection with the HSBC Facility Agreement, Yule Catto Nederland B.V. (‘‘Yule Catto BV’’) granted security to HSBC Bank Malaysia Berhad (in its capacity as security agent) over the shares held in Synthomer (the ‘‘Shares’’). This security was granted on 20 March 2009 and at that time Yule Catto BV held 20,000,000 ordinary shares of RM

181 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 1.00 each in the ordinary share capital of Synthomer which represented 100 per cent. of the ordinary entire issued and paid up share capital of Synthomer. The security over the shares is enforceable upon the occurrence of an Event of Default (as defined in the HSBC Facility Agreement) and upon the security agent providing notice to Yule Catto BV that the Charge is enforceable. The Charge also contains representations, warranties and undertakings given by Yule Catto BV which are customary to such security and governed by the laws of Malaysia. The Charge contains a negative pledge which means no further security may be granted over the Shares and the Shares cannot be sold or transferred other in accordance with the conditions in the Charge. 11.6.5 Charge over Uquifa Manufacturing sites In connection with a disputed tax assessment in the amount of c11.02 million by the Spanish tax authorities, Uquifa has given a charge dated 5 November 2010 over its two manufacturing sites. The charge guarantees a total sum of c13.23 million. 11.7 Disposal of the entire issued share capital of Revertex Finewaters Sdn. Bhd. On 12 March 2010, an agreement was entered into between (1) H.B Fuller Singapore Private Limited (‘‘H.B Fuller Singapore’’) (2) H.B Fuller Company (3) Revertex (Malaysia) Sdn. Bhd (‘‘Revertex’’) and (4) the Company for the purchase by H.B Fuller Singapore of 3,933,000 ordinary shares of Malaysian Ringgit 1.00 each in Revertex Finewaters Sdn. Bhd (‘‘Revertex Finewaters’’). The cash consideration was Malaysian Ringgit 55,600,000 (approximately £11,000,000 at the prevailing exchange rate), subject to any adjustments to reflect the actual financial position of Revertex Finewaters on completion of the transaction. The Company acted as a guarantor of Revertex’s obligations under the agreement. Under the agreement, H.B Fuller Singapore received covenants from Revertex restricting Revertex and the Company (for a period of four years following completion of the agreement) from carrying on, or being engaged or interested in any business which competes with the business of Revertex Finewaters and for this period not to solicit suppliers, customers and employees of the business and not at any time in the future to use the name and logos of the business or anything which is capable of confusion with such. The agreement also contained warranties and indemnities customary for a transaction of this nature. The warranty limitation periods in respect of any claim for breach of warranty, other than a claim for breach of the tax warranties, the environmental warranties or the environmental indemnity, will expire on 2 June 2012. In respect of a claim for a breach of the environmental warranties, the environmental damage indemnity and the tax warranties the limitation periods will expire on 2 June 2012, 2 June 2014 and 2 June 2017 respectively. 11.8 Disposal of certain business and assets of Oxford Chemicals Limited (‘‘Oxford Chemicals’’) On 5 January 2009, an agreement was entered into between (1) Oxford Chemicals (2) Frutarom (UK) Limited (3) the Company and (4) Frutarom Industries Limited for the purchase by Frutarom (UK) Limited of certain business and assets of Oxford Chemicals. The cash consideration was £8,250,000, subject to any adjustments to reflect the actual financial position of the business on completion of the transaction. The Company acted as a guarantor of Oxford Chemical’s obligations under the agreement. Under the agreement Frutarom (UK) Limited received covenants from Oxford Chemicals restricting Oxford Chemicals and each member of the Yule Catto Group (for a period of five years following completion of the agreement) from carrying on, assisting or being concerned or interested in the manufacture and/or development and/or sale of high impact aroma chemicals and other speciality aroma chemicals manufactured developed and/or sold by Oxford Chemicals anywhere in the world and for this period not to solicit customers and employees of the business and not at any time in the future to use the name and logos of the business, or any words likely to be confused with them, or in anyway hold out themselves out as being connected to the business. The agreement also contained warranties and indemnities customary for an agreement of this nature. The warranty limitation periods in respect of any claim for breach of warranty, other than a claim for breach of the tax warranties, will expire on 5 January 2011. In respect of a claim for a breach of the tax warranties the limitation periods will expire on 5 January 2016.

182 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 11.9 Disposal of the entire issued share capital of PFW Aroma Chemicals BV (‘‘PFW Aroma’’) On 3 December 2008 an agreement was entered into between (1) Yule Catto B.V. (2) Yule Catto & Co. Plc and (3) Keva UK Limited for the purchase by Keva UK Limited of the entire issued share capital of PFW Aroma. The cash consideration was c6,750,000 subject to any adjustments to reflect the actual financial position of PFW Aroma on completion of the transaction. Yule Catto acted as a guarantor of the seller’s obligations under the agreement. Under the agreement Keva UK Limited received covenants on Yule Catto B.V. restricting Yule Catto B.V. and each member of the Yule Catto Group (for a period of three years following completion of the agreement) from carrying on (directly or indirectly) or assisting in carrying on any business anywhere in the world that competes with PFW Aroma’s business (as defined in the agreement). Additionally, during this period, Yule Catto B.V. and each member of the Yule Catto Group, must not solicit customers and employees, not at any time in the future use the name and logos of (or any words likely to be confused with them), or in any way hold themselves out as being connected to PFW Aroma. The agreement also contained warranties and indemnities customary for a transaction of this nature. The warranty limitation periods in respect of any claim of breach of warranty, other than a claim for breach of the tax warranties or environmental warranties, will expire on 3 December 2010. In respect of a non-tax claim for a breach of the environmental warranties, the limitation period will expire on 3 December 2018. In respect of a tax claim, the limitation period will expire on 3 December 2013.

11.10 Disposal of the entire issued share capital of James Robinson Limited and assets of James Robinson GmbH On 9 February 2008, an agreement was entered into between (1) Holliday Chemical Holdings (‘‘Holliday Chemicals’’) (2) Vivimed Labs Ltd (‘‘Vivimed’’) and (3) the Company for the purchase by Vivimed of the entire issued share capital of James Robinson Limited and a separate agreement was entered into between (1) James Robinson GmbH (2) Vivimed and (3) the Company for the sale of the assets of James Robinson GmbH. The Company acted as a guarantor of Holliday Chemicals’ and James Robinson GmbH’s obligations under the agreements. The aggregate cash consideration was $25,000,000 subject to any adjustments to reflect the actual financial position of James Robinson Limited and the business of James Robinson GmbH on completion of the transaction. Under the both agreements Vivimed received covenants from Holliday Chemicals and James Robinson GmbH restricting each member of the Yule Catto Group (for a period of five years following completion of the agreement) from carrying on, assisting or being concerned directly or indirectly or be engaged concerned or interested and whether as principal, shareholder (holding over 5 per cent. of any class of shares of debentures), partner, agent, employee, consultant or otherwise in any business competing with the business of James Robinson Limited and James Robinson GmbH (for this paragraph 11.10 the ‘‘Business’’) or part of it as carried on at completion any where in the UK, India and Germany and for this period not to solicit contracts, suppliers, customers and employees of the Business and not at any time in the future to use the name and logos of the Business, or any words likely to be confused with them, or in anyway hold out themselves out as being connected to the Business. The agreements also contained warranties and indemnities customary for a transaction of this nature. The warranty limitation periods in respect of any claim for breach of warranty, other than a claim for breach of the tax warranties have passed. In respect of a claim for a breach of the tax warranties or the tax deed (entered into in connection with the sale of the shares of James Robinson Limited) the limitation periods will expire on 9 February 2015.

11.11 Disposal of the entire issued share capital of each of Holliday Pigments S.A., Holliday Pigments International S.A., Holliday France S.A and Holliday Chemical Espana S.A (in this instance the ‘‘Target Companies’’) On 18 July 2008, an agreement was entered into between (1) Holliday Holdings Limited (2) Holliday International S.A (3) Yule Catto Spain S.L (in this instance together the ‘‘Sellers’’) (4) Knight Chimiques De Specialite S.A.S (5) Knight Lux 2. S.A.R.L (in this instance together the ‘‘Buyers’’) (6) the Company and (7) Rockwood Specialties Group INC for the purchase by the Buyers of the entire issued share capital of each of the Target Companies. The aggregate cash

183 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS consideration was c46,000,000 subject to any adjustments to reflect the actual financial position of the Target Companies on completion of the transaction. The Company acted as a guarantor of the Sellers’ obligations under the agreement. Under the agreement the Buyers received covenants from the Sellers restricting the Sellers and each member of the Yule Catto Group (for a period of three years following completion of the agreement) from carrying on, directly or indirectly or assisting in carrying on any business anywhere in the world that competes with the Ultramarine Pigment Business (as defined in the agreement) and for this period not to solicit customers and employees of the business and not at any time in the future to use the name and logos of the business, or any words likely to be confused with them, or in anyway hold out themselves out as being connected to the business. The agreement also contained warranties and indemnities customary for a transaction of this nature. The warranty limitation periods in respect of any claim for breach of warranty, other than a claim for breach of the tax warranties or environmental warranties have passed. In respect of a claim for a breach of the environmental warranties under agreement the limitation period will expire on 18 July 2013. In respect of a claim for a breach of the tax warranties under agreement or the tax covenant the limitation periods will expire on the date falling three months after the applicable statutory limitation period with applies for the unpaid tax which is subject to the relevant claim. 11.12 Guarantee by Yule Catto for the Trustees of the Yule Catto Retirement Benefits Scheme On 30 March 2009 the Company (as ‘‘Guarantor’’) and Richard Atkinson, Suzanne Frances Morgan, Robert John Williams, John Bell, Teresa Christina Pepper and Alan Richard Luxton (together the ‘‘Beneficiaries’’) all in their capacities as trustees of the Yule Catto Group Retirement Benefits Scheme (the ‘‘Scheme’’) entered into a deed of guarantee under which the Company provides certain guarantees in relation to obligations of certain Yule Catto Group companies in relation to the Scheme including assurances that the Company will: * guarantee all the present and future obligations and liabilities of Yule Catto, Synthomer Limited, William Blythe Limited and Holliday Pigments Limited to make payments to the Scheme up to the maximum amount payable under the deed of guarantee; * undertake with the Beneficiaries that should an amount, as above, not be paid in respect of a guaranteed obligation, then the Company must immediately pay that amount on demand by the Beneficiaries; and * indemnify the Beneficiaries, on demand, against any loss or liability suffered by the Beneficiaries if any payment obligation guaranteed by it becomes unenforceable, invalid or illegal. 11.13 Shareholders’ Agreement relating to Revertex Malaysia Sdn Bhd On 27 January 1982, Revertex Limited (‘‘Revertex’’) (a wholly owned subsidiary of Yule Catto) and Perbadanan Kemajuan Ekonomi Negeri, Johor (‘‘JSEDC’’) entered into a shareholders’ agreement governing their respective investments in the shares of Revertex (Malaysia) Sdn Bhd (‘‘Revertex Malaysia’’) and the conduct of its business. Revertex Malaysia was created under the laws of Malaysia to carry on the business of the manufacture and sale of natural and synthetic rubber lattices and emulsions and polyester alkyds and resins. The shareholders’ agreement contains customary provisions governing the operation and conduct of the business of Revertex Malaysia, the ownership and transfer of each party’s shares and the operation, conduct and authority of its board of directors. Revertex Malaysia had an authorised capital of Malaysian Ringgit 10,000,000 divided into 10,000,000 shares of Malaysian Ringgit 1.00 each. Malaysian Ringgit 7,150,000 was issued fully paid, with Revertex contributing Malaysian Ringgit 5,000,000 and JSEDC contributing Malaysian Ringgit 2,150,000. 11.14 Shareholders’ Agreement relating to Chemtech Industry Company, Limited (now known as Synthomer Vietnam Co Limited) On 31 July 2007 Cheer Harvest Company, Limited (‘‘Cheer Harvest’’) and Temple Fields 522 Limited (‘‘Temple Fields’’) (a wholly owned subsidiary of Yule Catto) entered into a shareholders’ agreement governing their respective investments in the shares of Chemtech Industry Company, Limited (‘‘Chemtech’’) and the conduct of its business. Chemtech was established under the laws of Vietnam to manufacture, supply and produce products under an ‘‘investment licence’’. The ‘‘investment licence’’ was issued on 6 December 1997 (and amended on 28 October 2003 and 22 March 2006). Under this ‘‘investment licence’’, Chemtech is able to

184 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS produce various kinds of synthetic adhesives including glue to stick lumbers, paper adhesives, additive adhesives for paints, adhesives to stick plastic wrapping and adhesives to stick cloth materials. The shareholders’ agreement contains customary provisions governing the operation and conduct of the business of Chemtech, the ownership and transfer of each party’s shares and the operation, conduct and authority of its board of directors. The total initial invested capital under the shareholders agreement is US$2,000,000; with Cheer Harvest contributing US$800,000 (40 per cent.) and Temple Fields contributed US$1,200,000 (60 per cent.) of Chemtech’s invested capital. 11.15 Joint Venture Agreement relating to DCI Harco Limited (now known as Synthomer Middle East Company) On 18 December 1995, Rashed A. Al Rashed & Sons, United Gulf Industries Corporation BSC, Abdulqadir Al Muhaidib & Sons, Abdulrahman Al Saleh Al Suhaimi & Company, Al Mojel Trading & Contracting Company, Mohammed Abdullah Al Khafra & Brothers, Mr. Abdulkarim Hamed Al Mojil (together the ‘‘DCI Shareholders’’) and Harlow Chemical Company Limited (‘‘Harco’’) (a joint venture between Yule Catto and Hoechst U.K. Limited) entered into a joint venture agreement governing their respective investments in the shares of DCI Harco Limited (‘‘DCIH’’) and the conduct of its business. Under the joint venture agreement DCIH design, manage and operate a plant for the manufacture of emulsion polymers in Saudi Arabia. They sell throughout the GCC countries (Saudi Arabia, Oman, Bahrain, Kuwait, Qatar, United Arab Emirates), Lebanon and Yemen. DCIH operate in the same manner as Harco emulsion polymer production facilities in England. Harco therefore licensed, communicated and disclosed to DCIH technical information (all relevant information and data relating to emulsion polymers), trademarks and other business specific information. Harco also provided the assistance necessary for DCIH to manufacture emulsion polymers and sell them in accordance with best production, administrative, sales and marketing standards as found in the Harco emulsion polymer production facilities in England. The joint venture agreement contains customary provisions governing the operation and conduct of the business of DCIH, the ownership and transfer of each party’s shares and the operation, conduct and authority of its board of directors. Under the joint venture agreement, the DCI Shareholders sold to Harco 7,350 shares in Dhahran Chemical Industries Limited (‘‘DCI’’) (representing 49 per cent. of the existing shares of DCI). The DCI Shareholders then transferred their remaining 7,650 shares (representing 51 per cent. of the existing shares of DCI) to Dhahran Chemical Industries and Marketing Company. DCI then changed its name to DCIH. 11.16 Memorandum of Agreement relating to Arkem (Proprietary) Limited On 29 July 1982 Revertex (South Africa) (Proprietary) Limited (‘‘Revertex (SA)’’) and Alco Chemical Corporation (‘‘Alco’’) entered into a memorandum of agreement governing their respective investments in the shares of Arkem (Proprietary) Limited (‘‘Arkem’’) and the conduct of its business. Under the memorandum of agreement Arkem shall manufacturer, develop, market and distribute the following products: * emulsion and solution polymerisation products based substantially on unsaturated carboxylic acids generally used either in neutralised or unneutralised form as thickeners, dispersants, water treatments, flow and viscosity modifiers and in other applications; * products or blends of products being reaction products of carbon disulfide with various amines and other chemicals generally used as biocides, in the manufacturer of processing of synthetic rubber and in other applications; * surfactants of the succinate or succinamate types; * future developments, modifications or improvements or the items above; and * other products as may from time to time be agreed between Revertex (SA) and Arkem. (together the ‘‘Products’’) Some of the Products are toll manufactured. The Products are offered for sale by Arkem in Africa, the Indian Ocean islands and other countries agreed by the parties. The memorandum of agreement contains customary provisions governing the operation and conduct of the business of Arkem, the ownership and transfer of each party’s shares and the operation, conduct and authority of its board of directors.

185 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS The original authorised capital of Arkem was R150,000.00 divided into 150,000 ordinary shares, with a nominal value of R1.00 each. Under the memorandum of agreement 100,000 shares of R1.00 were issued. Revertex (SA) and Alco held 50 per cent. of the issued shares of Arkem respectively.

12. PolymerLatex material contracts 12.1 Introduction Save for the contracts described or referred to in this paragraph 12, no member of the PolymerLatex Group has (i) entered into any material contract (not being a contract entered into in the ordinary course of business) within the two years immediately preceding the date of this document or (ii) entered into any other contract (not being a contract entered into in the ordinary course of business) which contains any provision under which any member of the PolymerLatex Group has any obligation or entitlement which is or may be material to the PolymerLatex Group as at the date of this document. 12.2 Joint Venture Agreement relating to Eka Polymer Latex Oy (‘‘Eka’’) On 15 November 1997, PolymerLatex and Akzo Nobel Chemicals International b.v. (‘‘Akzo Nobel’’) entered into an agreement governing the operation and conduct of the business of the joint venture company Eka. This also governs the ownership and transfer of each party’s shares and the operation, conduct and authority of its board of directors. PolymerLatex and Akzo have agreed not to directly or indirectly manufacture, market or sell any latices for the paper and board industry in Finland, Norway, Sweden and the Western part of Russia (the ‘‘Territory’’). Following Completion this restriction in the Territory will apply to the Yule Catto Group. There is a right to terminate the agreement on a change of control of a joint venture party and on such change of control the non-compete and the licence agreement (further details of which are set out in paragraph 12.2 of this Part XI) will also terminate. As at the date of this document, and following discussions with Akzo Nobel, the Directors do not believe that Akzo Nobel will exercise its right of termination. 12.3 Licence agreement in relation to the joint venture agreement with Akzo Nobel On 1 January 2010, a licence agreement between PolymerLatex and Akzo Nobel was entered into, amending certain terms in connection with the licence granted by PolymerLatex to Eka for the production, use and sale of all dispersions for the paper and board producing industry developed by PolymerLatex. The amendments, inter alia, record changes to the commission payable to PolymerLatex, an extension of the term of the licence agreement and provide that where the joint venture agreement is terminated for any reason the licence also terminates.

13. Yule Catto Litigation There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have, or have had during the twelve months preceding the date of this document, a significant effect on the Group’s financial position or profitability.

14. PolymerLatex Litigation There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have, or have had during the twelve months preceding the date of this document, a significant effect on the PolymerLatex Group’s financial position or profitability.

15. Taxation The comments set out below are based on the current United Kingdom tax law and what is understood to be current HMRC practice which are subject to change at any time. They are intended as a general guide only and apply only to Qualifying Shareholders who are resident and, in the case of individuals, ordinarily resident and domiciled, in the United Kingdom for tax purposes (except to the extent that speciﬁc reference is made to shareholders resident outside the United Kingdom), who hold the shares as investments and who are the absolute beneﬁcial owners thereof. They do not deal with the position of certain classes of Qualifying Shareholders, such as dealers in securities, broker dealers, insurance companies, collective investment schemes, Qualifying Shareholders who are exempt

186 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS from taxation or Qualifying Shareholders who have or are deemed to have acquired their Existing Ordinary Shares by virtue of an ofﬁce or employment or who are or have been an ofﬁcer or employee of the Company. Qualifying Shareholders who are in doubt as to their position or who is subject to tax in any jurisdiction other than the United Kingdom should consult their own professional advisers immediately.

15.1 Capital gains tax It is expected that for the purposes of UK taxation on chargeable gains, the issue of the New Ordinary Shares should be regarded as a reorganisation of the share capital of the Company.

Accordingly, you should not be treated as making a disposal of all or part of your holding of Existing Ordinary Shares by reason of taking up all or part of your rights to New Ordinary Shares. No immediate liability to UK taxation on chargeable gains in respect of the New Ordinary Shares should arise if you take up your entitlement to New Ordinary Shares in full.

Instead your Existing and New Ordinary Shares should be treated as the same asset having been acquired at the same time as you acquired your Existing Ordinary Shares. For the purposes of computing a chargeable gain or allowable loss on any subsequent disposal, the subscription monies for your New Ordinary Shares will be added to the base cost of your existing holding(s).

If you dispose of all or some of the New Ordinary Shares allotted to you, or your rights to subscribe for them, or if you allow or are deemed to have allowed your rights to lapse and receive a cash payment in respect of them, you may, depending on your circumstances, incur a liability to tax on any chargeable gain realised. However, if the proceeds resulting from the disposal of your rights to subscribe for New Ordinary Shares or lapse of rights are ‘‘small’’ as compared to the value of the Existing Ordinary Shares in respect of which the rights arose, you should not generally be treated as making a disposal for the purpose of UK taxation of chargeable gains. No chargeable gain should then arise as a result of the disposal or lapse of the rights, but the proceeds will be deducted from the base cost of your holding of Existing Ordinary Shares for the purposes of computing a chargeable gain or allowable loss on any subsequent disposal of the New Ordinary Shares. HMRC interprets ‘‘small’’ as 5 per cent. or less of the market value of the Existing Ordinary Shares held (measured immediately before the disposal or lapse) or, if higher, £3,000 or less, regardless of whether or not it would pass the 5 per cent. test. This treatment will not apply where the base cost of the relevant Qualifying Shareholder’s Existing Ordinary Shares is less than the proceeds.

In the case of a Qualifying Shareholder within the charge to UK corporation tax, indexation allowance will apply to the amount paid for the New Ordinary Shares only from, generally, the date the monies for the New Ordinary Shares are paid (or liable to be paid), not from the time the original holding was acquired.

A disposal of New Ordinary Shares by a Qualifying Shareholder who is an individual, trustee or personal representative may give rise to a liability to UK Capital Gains Tax (‘‘CGT’’), depending on the circumstances and subject to any available exemption or relief. CGT is currently charged at a ﬂat rate of 18 per cent. for individuals, to the extent that their total income and gains for the tax year in question do not exceed the income tax higher rate threshold, and 28 per cent. for gains to the extent that they (when added to income) fall above that threshold. Trustees and personal representatives pay CGT at 28 per cent.

A disposal of New Ordinary Shares by a Qualifying Shareholder within the charge to corporation tax may give rise to a chargeable gain (or allowable loss) for the purposes of UK corporation tax, depending on the circumstances and subject to any available exemption or relief. Corporation tax is charged on chargeable gains at the rate applicable to that Qualifying Shareholder.

Subject to the paragraph below (dealing with individuals who are temporarily resident outside the UK), a Qualifying Shareholder who is not resident in and in the case of an individual, ordinarily resident in the UK for tax purposes should not be subject to UK taxation on chargeable gains on a disposal of New Ordinary Shares unless such Qualifying Shareholder carries on:

187 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS (i) (in the case of a Qualifying Shareholder who is an individual) a trade, profession or vocation in the UK through a branch or agency and the New Ordinary Shares either have been used in or for the purposes of the trade, profession or vocation, or have been used or held for the purposes of the branch or agency, or acquired for use by or for the purposes of the branch or agency; or (ii) (in the case of a Qualifying Shareholder which is a company) a trade in the UK through a permanent establishment and their New Ordinary Shares either have been used in or for the purposes of the trade carried on through the permanent establishment, or, have been used or held for the purposes of the permanent establishment or acquired for use by or for the purposes of the permanent establishment. An individual Qualifying Shareholder who has ceased to be resident or ordinarily resident for tax purposes in the UK for a period of less than ﬁve years of assessment and who disposes of all or part of his New Ordinary Shares during that period of temporary non-residence may be liable on his return to the UK to capital gains tax arising during the period of absence, subject to any available exemption or relief.

15.2 Taxation of dividends The Company will not be required to withhold tax at source on any dividends it pays to Qualifying Shareholders. Individuals resident in the United Kingdom for taxation purposes are generally liable to income tax on the aggregate amount of any dividend received and a tax credit equal to one-ninth of the dividend received (the ‘‘gross dividend’’). However, in calculating the Qualifying Shareholder’s liability to income tax in respect of the gross dividend, the tax credit (which equates to 10 per cent. of the gross dividend) is set off against the tax chargeable. For example, on a dividend received of £90, the tax credit would be £10, and an individual would be liable to income tax on £100. No further income tax is payable in respect of the dividend by UK resident individuals who are not liable to income tax at the higher rate (currently 40 per cent.) or additional rate (currently 50 per cent.). UK resident individuals who are subject to tax at the higher rate or additional rate are subject to tax on dividends at the higher rate or additional rate applicable to dividends (currently 32.5 per cent. and 42.5 per cent. respectively) but are entitled to offset the 10 per cent. tax credit against such liability. For example, on a dividend received of £90 a higher rate taxpayer would have to pay additional tax of £22.50 (representing 32.5 per cent. of the gross dividend less the 10 per cent. credit). For this purpose, dividends are treated as the top slice of an individual’s income. United Kingdom resident Qualifying Shareholders who are not liable to United Kingdom tax on dividends, including pension funds and charities, are not entitled to claim repayment of the tax credit attaching to dividends paid by the Company. Qualifying Shareholders within the charge to UK corporation tax which are ‘‘small companies’’ (for the purposes of UK taxation of dividends) will not generally be subject to tax on dividends from the Company. Other Qualifying Shareholders who are within the charge to UK corporation tax will not generally be subject to corporation tax on dividends from the Company in respect of Ordinary Shares, provided that the dividends fall within one or more of the classes of dividends which qualify for exemption. Subject to anti-avoidance rules, dividends paid in respect of shares that are ‘‘ordinary shares’’ for UK tax purposes and are not redeemable should generally fall within an exempt class. The right of a non-United Kingdom resident shareholder to a tax credit in respect of a dividend received from the Company and to claim payment of any part of that tax credit will depend on existence and terms of any double taxation convention between the United Kingdom and the country in which the shareholder is resident. Non-United Kingdom resident shareholders may also be subject to tax on dividend income under any law to which they are subject outside the UK. Such shareholders should consult their own tax advisers concerning their tax liabilities.

15.3 Stamp Duty and Stamp Duty Reserve Tax The statements below summarise the current position and are intended as a general guide only to stamp duty and stamp duty reserve tax (‘‘SDRT’’). Certain categories of person, including market makers, brokers, dealers and other speciﬁed market intermediaries, are not liable to stamp duty or SDRT in respect of purchases of securities in certain circumstances.

188 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS No United Kingdom stamp duty or SDRT should be payable by holders of Existing Ordinary Shares on the issue of Provisional Allotment Letters or split Provisional Allotment Letters (provided they are renounceable within six months of issue) or on the registration of the original holders of Provisional Allotment Letters or their renouncees. Where rights to New Ordinary Shares represented by a Provisional Allotment Letter are sold on or before the last date for registration of renunciation, the purchaser will generally be liable for SDRT at the rate of 0.5 per cent. of the consideration paid. Where such a purchase is effected through a stockbroker or other financial intermediary, that person will normally account for the liability to SDRT and will indicate this on the contract note issued to the purchaser. In other cases the purchaser of the rights to the New Ordinary Shares represented by Provisional Allotment Letters is liable to pay the SDRT and must account for it to HMRC. On the issue or transfer of Provisional Allotment Letters, split Provisional Allotment Letters or New Ordinary Shares: (i) to, or to a nominee or (in the case of stamp duty) agent for, a person whose business is or includes the provision of clearance services; or (ii) to, or to a nominee or agent for, a person whose business is or includes issuing depository receipts, stamp duty or SDRT will be payable at the higher rate of 1.5 per cent. of the consideration payable, or in certain circumstances, the value of the New Ordinary Shares (rounded up to the nearest multiple of £5 in the case of stamp duty). Following the decision of The European Court of Justice in HSBC Holdings Plc and Vidacos Nominees Limited v The Commissioners of Her Majesty’s Revenue & Customs C-569/07, HMRC has indicated that it will not seek to apply the 1.5 per cent. charge on shares issued to a clearance service or depositary system within the EU. Clearance services may opt, provided certain conditions are satisfied, for normal stamp duty or SDRT treatment to apply to issues or transfers of shares into, and to transactions within, such services instead of the higher rate applying to an issue or a transfer of shares into the clearance service. Accordingly, specific professional advice should be obtained before paying the 1.5 per cent. stamp duty or SDRT charge in any circumstances. Save as mentioned in the paragraph above, the transfer on sale of Existing Ordinary Shares or New Ordinary Shares will generally be liable to ad valorem stamp duty at the rate of 0.5 per cent. (rounded up to the nearest multiple of £5) of the amount or value of the consideration paid. An exemption from stamp duty will be available on an instrument transferring Existing Ordinary Shares or New Ordinary Shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000. The purchaser normally pays the stamp duty. An unconditional agreement to transfer such shares will be generally liable to SDRT, at the rate of 0.5 per cent. of the consideration paid, but such liability will be cancelled or a right to a repayment in respect of the SDRT liability will arise if the agreement is completed by a duly stamped transfer within six years of the agreement having become unconditional. SDRT is normally the liability of the purchaser. Paperless transfers of shares within the CREST system are generally liable to SDRT (at a rate of 0.5 per cent. of the amount or value of the consideration payable) rather than stamp duty, and SDRT on relevant transactions settled within the system or reported through it for regulatory purposes will be collected by CREST. Deposits of New Ordinary Shares into CREST will not generally be subject to SDRT unless the transfer into CREST is itself for consideration.

16. Working capital The Company is of the opinion that, taking into account the existing facilities, the New Credit Facilities and the net proceeds of the Rights Issue, the Group has sufﬁcient working capital for its present requirements, that is for at least the 12 months from the date of this document.

17. Mandatory bids, squeeze-out and sell-out rules relating to the Ordinary Shares The Company is subject to the City Code. There is not in existence any current mandatory takeover bid in relation to the Company. Were there to be a takeover offer for the Company (as deﬁned in section 974 of the Companies Act 2006), compulsory purchase provisions in the Act would be triggered, subject to, amongst other things, the offeror achieving certain thresholds in terms of

189 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS acquired shares and subject to serving certain notices within prescribed time limits, which would give the offeror the right to buy out minority shareholders (in accordance with section 979 of the Companies Act 2006). The Companies Act 2006 also contains provisions allowing, in certain circumstances, for a right for a minority shareholder to be bought out by an offeror. Other than as provided by the Companies Act 2006 and the City Code, there are no rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules in relation to the Ordinary Shares.

18. Public takeover bids in the last and current ﬁnancial years There have been no public takeover bids by third parties in respect of the share capital of the Group in the last or current ﬁnancial year.

19. Employees As at 31 October 2010 (being the latest practicable date prior to the publication of the document) the Group had 1870 employees. The tables below set out the average number of people employed by the Group in each of the last three ﬁnancial years together with a breakdown by region:

Division Financial year ended 31 December 31 December 31 December 2009 2008 2007 Polymer Chemicals 1368 1603 1533 Pharma Chemicals 392 446 459 Impact Chemicals 78 83 230 Group Holding Companies 35 35 45

1873 2167 2267

Region Financial Year ended 31 December 31 December 31 December 2009 2008 2007 Other Europe 536 611 669 UK 531 575 687 Asia 518 641 555 Africa and Middle East 158 224 240 Rest of World 130 116 116

20. Properties, plant and equipment The Yule Catto Group’s key operating locations are as follows:

Location Division Presence Central Road, Templeﬁelds, Harlow, Essex, CM20 2BH, Polymers Manufacturing, Sales United Kingdom South Marsh Road, Stallingborough, Grimsby, North East Lincs Polymers Manufacturing DN41 8DA, United Kingdom 2 George Street, Batley, West Yorkshire WF17 5AU Polymers Manufacturing United Kingdom Roundwood Industrial Estate, Wakeﬁeld Road, Ossett, Polymers Manufacturing West Yorkshire, WF5 9BQ. United Kingdom Innerstetal 2, D-38685 Langelsheim, Germany Polymers Manufacturing Ijsselstraat 41, 5347 KG Oss, The Netherlands Polymers Manufacturing Randweg 16, 8061 RW Hasselt (ov), The Netherlands Polymers Manufacturing Boulevard du Textile 1, B-7700 Mouscron, Belgium Polymers Manufacturing PO Box 7544, 2nd Industrial City, Dammam 31472, Saudi Arabia Polymers Manufacturing 1 Batu 1 /2 Jalan Batu Pahat, 86009 Kluang, Johor, Malaysia Polymers Manufacturing, R&D No. 8, Road 6, Song Than 1 Industrial Zone, Di An, Binh Duong Polymers Manufacturing Province, Vietnam

190 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Location Division Presence P O Box 12040, Jacobs 4026, KwaZulu Natal, Republic of South Polymers Sales Africa Llic¸a` de Vall plant, polı´gono industrial el Pla, Avda Puigcerda, Pharma Manufacturing 9 C-17, Km 17.4, 08185 Llic¸a` de Vall (Barcelona), Spain Sant Celoni plant, Polı´gon Industrial Molı´ de les Planes, C/ Font Pharma Manufacturing de Bocs S/N, C-35, KM 57, 08470 Sant Celoni (Barcelona), Spain Cuernavaca Plant, Uquifa Me´xico S.A. de C.V., Calle 37 Este Pharma Manufacturing, No. 126 – C.P., 62500 Civac, Jiutepec, Morelos, Mexico R&D Church, Accrington, Lancashire, BB5 4PD, England Impact Manufacturing, Sales

21. Related Party Transactions Save as disclosed in the financial information incorporated by reference into this document (as explained in Part XII of this document) for the financial years ended 31 December 2007, 2008 and 2009 there are no related party transactions including between the Company and members of the Group that were entered into during the financial years ended 31 December 2007, 2008 or 2009 or, during the period between 1 January 2010 and the date of this document.

22. Consents 22.1 Deloitte LLP (a member of the Institute of Chartered Accountants in England and Wales) has given and not withdrawn its written consent to the inclusion in this document of its Accountant’s Report set out in Part IX and its Report on Unaudited Pro Forma Financial Information set out in Part X, in the form and context in which they are included and has authorised the contents of those parts of this document. 22.2 HSBC has given and has not withdrawn its written consent to the inclusion in this document of the references to its name in the form and context in which they appear. 22.3 Barclays Capital, Collins Stewart, Commerzbank and RBS have each given and have not withdrawn their written consent to the inclusion in this document of the references to their names in the form and context in which they appear.

23. Significant Change 23.1 There has been no significant change in the financial or trading position of the Yule Catto Group since 30 June 2010, being the date to which the last financial information on the Yule Catto Group has been published. 23.2 There has been no significant change in the financial or trading position of the PolymerLatex Group since 31 December 2009, being the date to which the last financial information on the PolymerLatex Group has been published.

24. Miscellaneous 24.1 The total expenses of or incidental to the Rights Issue and Acquisition (including irrecoverable VAT) which are payable by the Company are estimated to amount to approximately £14 million (including underwriting commissions of approximately £5.49 million payable to the Underwriters, a commission of approximately £0.74 million payable pursuant to the KLK Irrevocable Undertaking and other transaction costs). 24.2 The Group’s auditors are Deloitte LLP, City House, 126-130 Hills Road, Cambridge CB2 1RY. Deloitte have audited the Group’s accounts for the financial years ended 31 December 2007, 2008 and 2009. Deloitte are Chartered Accountants and Registered Auditors and have carried out the audits of the accounts for the financial years ending 31 December 2006, 2007, 2008 and 2009 in accordance with the Auditing Standards issued by the Auditing Practices Board. Such accounts have been reported on without qualification. Save for the information contained in Part VIII relating to Yule Catto’s financial years ended on 31 December 2007, 2008 and 2009, none of the information contained in this document has been audited. 24.3 The Group’s Registrars and receiving agents are Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZZ.

191 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS 24.4 The New Ordinary Shares have not been marketed, nor are they available, in whole or in part, to the public in connection with the application for listing save under the terms of the Rights Issue. 24.5 The Existing Ordinary Shares are in registered form, are capable of being held in uncertificated form and are admitted to the Official List of the UKLA and are traded only on the market for listed securities of the London Stock Exchange. Application for trading of the New Ordinary Shares is not being and will not be sought on any other stock exchange other than the market for listed securities of the London Stock Exchange. The New Ordinary Shares will be admitted with the ISIN GB0009887422. 24.6 The New Ordinary Shares will be issued at 116 pence per Ordinary Share. The closing mid- market price of a Yule Catto Ordinary Share on 10 December 2010, (being the last practicable date before the publication of this document), was 260 pence. The Issue Price represents a premium of 106 pence per share to the nominal value of 10 pence of each Yule Catto Ordinary Share. 24.7 Save as disclosed in paragraph 3.6 of this Part XI, there is no potential conflict of interest between any of the Directors’ duties to the Company and their private interests or other duties and there is no arrangement or understanding between the Company and any major Shareholders, customers, suppliers or others, pursuant to which any Director was selected as a Director.

25. Documents available for inspection Copies of the documents listed below may be inspected free of charge at the offices of the Company at Temple Fields, Harlow, Essex CM20 2BH and at the offices of Pinsent Masons LLP, CityPoint, One Ropemaker Street, London EC2Y 9AH during normal business hours (i.e. 9.30 a.m. to 5.30 p.m.) on any Business Day up to and including Admission and will also be available for inspection at the General Meeting for at least fifteen minutes prior to and during the General Meeting: 25.1 the Acquisition Agreement; 25.2 the Memorandum and Articles of Association of the Company; 25.3 the annual report and accounts of Yule Catto for the three financial years ended 31 December 2007, 31 December 2008 and 31 December 2009; 25.4 the unaudited interim condensed consolidated accounts of the Company for the six months to 30 June 2010 and the six months to 30 June 2009; 25.5 the written consents referred to in paragraph 22 above; and 25.6 this document.

Dated: 13 December 2010

192 c103902pu080 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART XII

DOCUMENTS INCORPORATED BY REFERENCE

The annual report and accounts of Yule Catto for each of the financial years ended 31 December 2007, 2008 and 2009 are available for inspection in accordance with paragraph 25 of Part XI of this document and contain information which is relevant to the Rights Issue. These documents are also available on Yule Catto’s website at www.yulecatto.com. The unaudited interim condensed consolidated financial statements for Yule Catto for the six month periods ended 30 June 2010 and 2009, are available for inspection in accordance with paragraph 25 of Part XI of this document and contain information which is relevant to the Rights Issue. These documents are also available on Yule Catto’s website at www.yulecatto.com. The table below sets out the various sections of such documents which are incorporated by reference into this document so as to provide the information required under the Prospectus Rules and to ensure that Shareholders and others are aware of all information which, according to the particular nature of Yule Catto and of the New Ordinary Shares, is necessary to enable Shareholders and others to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of Yule Catto. Information that is itself incorporated by reference in the above documents is not incorporated by reference into this document.

Page Number(s) in the reference Information incorporated by reference Document reference document

‘‘Consolidated financial statements of the Yule Annual Report and Accounts year to 34 – 37 Catto Group for year to 31 December 2009’’ 31 December 2009 ‘‘Consolidated financial statements of the Yule Annual Report and Accounts year to 38 – 41 Catto Group for year to 31 December 2008’’ 31 December 2008 ‘‘Consolidated financial statements of the Yule Annual Report and Accounts year to 37 – 40 Catto Group for year to 31 December 2007’’ 31 December 2007 ‘‘Notes to the consolidated financial statements Annual Report and Accounts year to 38 – 67 for year to 31 December 2009’’ 31 December 2009 ‘‘Notes to the consolidated financial statements Annual Report and Accounts year to 42 – 71 for year to 31 December 2008’’ 31 December 2008 ‘‘Notes to the consolidated financial statements Annual Report and Accounts year to 41 – 69 for year to 31 December 2007’’ 31 December 2007 ‘‘Independent Auditors’ Report for year to Annual Report and Accounts year to 33 31 December 2009’’ 31 December 2009 ‘‘Independent Auditors’ Report for year to Annual Report and Accounts year to 36 31 December 2008’’ 31 December 2008 ‘‘Independent Auditors’ Report for year to Annual Report and Accounts year to 36 31 December 2007’’ 31 December 2007 ‘‘Yule Catto Financial Statements for year to Annual Report and Accounts to 69 31 December 2009’’ 31 December 2009 ‘‘Yule Catto Financial Statements for year to Annual Report and Accounts to 73 31 December 2008’’ 31 December 2008 ‘‘Yule Catto Financial Statements for year to Annual Report and Accounts to 71 31 December 2007’’ 31 December 2007

193 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Page Number(s) in the reference Information incorporated by reference Document reference document

‘‘Notes to the Yule Catto Financial Statements Annual Report and Accounts to 70 – 76 for year to 31 December 2009’’ 31 December 2009 ‘‘Notes to the Yule Catto Financial Statements Annual Report and Accounts to 74 – 80 for year to 31 December 2008’’ 31 December 2008 ‘‘Notes to the Yule Catto Financial Statements Annual Report and Accounts to 72 – 79 for year to 31 December 2007’’ 31 December 2007 ‘‘Independent Auditors’ Report year to Annual Report and Accounts to 68 31 December 2009’’ 31 December 2009 ‘‘Independent Auditors’ Report year to Annual Report and Accounts to 72 31 December 2008’’ 31 December 2008 ‘‘Independent Auditors’ Report year to Annual Report and Accounts to 70 31 December 2007’’ 31 December 2007 ‘‘Corporate Social Responsibility Report’’ Annual Report and Accounts to 14 – 20 31 December 2009 ‘‘Yule Catto unaudited condensed consolidated Interim Results to 30 June 2010 1 – 20 ﬁnancial statements for six months to 30 June 2010’’ ‘‘Yule Catto unaudited condensed consolidated Interim Results to 30 June 2009 1 – 18 ﬁnancial statements for six months to 30 June 2009’’

194 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART XIII

DEFINITIONS

‘‘Acquisition’’ the acquisition of the entire issued share capital of PolymerLatex as described in Part II of this document ‘‘Acquisition Agreement’’ the conditional share acquisition agreement dated 13 December 2010 between the Company, the Buyer and the Seller relating to the Acquisition and described in Part II of this document ‘‘Admission’’ admission of the New Ordinary Shares to (i) the Official List and (ii) trading, nil paid, on the London Stock Exchange’s main market for listed securities becoming effective in accordance with, respectively, LR3.2.7G of the Listing Rules and paragraph 2.1 of the Admission and Disclosure Standards ‘‘Admission and Disclosure the requirements contained in the publication ‘‘Admission and Standards’’ Disclosure Standards’’ containing, amongst other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange’s main market for listed securities ‘‘Announcement’’ the announcement of the Acquisition and the Rights Issue made by the Company on 13 December 2010 ‘‘Articles of Association’’ the articles of association of the Company in force from time to time, details of which are set out in paragraph 7.2 of Part XI of this document ‘‘Audit Committee’’ the audit committee of the Company established by the Board ‘‘BaFin’’ the Federal Financial Supervisory Authority (Bundesanstalt fu¨r Finanzdienstlerstungsaufsicht) ‘‘Barclays’’ Barclays Bank PLC ‘‘Barclays Capital’’ the investment banking division of Barclays ‘‘Business Day’’ any day on which banks are generally open for the transaction of business other than a Saturday or Sunday or public holiday ‘‘Buyer’’ Yule Catto Holdings GmbH ‘‘CAGR’’ compound annual growth rate ‘‘CCSS’’ Crest Courier and Sorting Service, established by Euroclear UK to facilitate, amongst other things, the deposit and withdrawal of securities ‘‘certificated’’ or ‘‘in certificated a share or other security which is not in uncertificated form (that is, form’’ not in CREST) ‘‘City Code’’ the UK City Code on Takeovers and Mergers ‘‘Closing Price’’ the closing, middle market quotation of an Ordinary Share on 10 December (being the latest practicable date prior to the Announcement), as published in the Daily Official List ‘‘Collins Stewart’’ Collins Stewart Europe Limited ‘‘Combined Code’’ the UK Combined Code on Corporate Governance issued by the Financial Reporting Council ‘‘Commerzbank’’ Commerzbank AG ‘‘Companies Act’’ the Companies Act of England and Wales 2006 (as amended) ‘‘Completion’’ the completion of the Acquisition ‘‘Computershare’’ the Registrar ‘‘CREST’’ the relevant system (as defined in the Regulations), and the holding of shares in uncertificated form, in respect of which Euroclear is the operator (as defined in the Regulations)

195 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS ‘‘CREST Manual’’ the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedure and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since) ‘‘CREST member’’ a person who has been admitted by Euroclear as a system member (as defined in the Regulations) ‘‘CREST participant’’ a person who is, in relation to CREST, a system-participant (as defined in the Regulations) ‘‘CREST sponsor’’ a CREST participant admitted to CREST as a CREST sponsor ‘‘CREST sponsored member’’ a CREST member admitted to CREST as a sponsored member (which includes all CREST personal members) ‘‘Daily Official List’’ the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange ‘‘Directors’’ or ‘‘Board’’ the current directors of the Group, whose names are set out in paragraph 3.1 of Part XI of this document ‘‘Disclosure and Transparency the disclosure and transparency rules of the UK Listing Authority Rules’’ made in accordance with section 73(A) of FSMA, as amended from time to time ‘‘EBIT’’ earnings before interest and tax ‘‘EBITDA’’ earnings before interest, taxes, depreciation, and amortization ‘‘Enlarged Group’’ the Company together with its subsidiaries and subsidiary undertakings, as enlarged by the Acquisition ‘‘Enlarged Share Capital’’ the issued ordinary share capital of the Company as it will be immediately following the Rights Issue ‘‘EU’’ the European Union ‘‘Euroclear’’ Euroclear UK & Ireland Limited, the operator of CREST ‘‘Exchange Act’’ the United States Securities Exchange Act of 1934 as amended ‘‘Excluded Territories’’ Australia, Canada, Japan, South Africa and any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction completed thereby) would breach any applicable law and any one of them being an ‘‘Excluded Territory’’ ‘‘Existing Ordinary Shares’’ the 145,663,187 Ordinary Shares in issue at the date of this document ‘‘Form of Proxy’’ the form of proxy accompanying this document for use by Shareholders at the General Meeting ‘‘FSA’’ the Financial Services Authority of the United Kingdom ‘‘FSMA’’ the Financial Services and Markets Act 2000 (as amended) ‘‘Fully Paid Rights’’ rights to acquire New Ordinary Shares, fully paid ‘‘FY’’ financial year ‘‘GDP’’ gross domestic product ‘‘General Meeting’’ the general meeting of the Company to be held at 11.00 a.m. on 30 December 2010, notice of which is set out at the end of this document and including any adjournment thereof ‘‘General Meeting Notice’’ the notice of General Meeting set out at the end of this document

196 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS ‘‘Group’’ or the ‘‘Yule Catto the Company together with its subsidiaries and subsidiary Group’’ undertakings from time to time ‘‘HMRC’’ Her Majesty’s Revenue and Customs and, where relevant, any predecessor body which carried out part of its functions and references to any approval by HMRC shall, where appropriate, include approval by an officer of Her Majesty’s Revenue and Customs ‘‘HSBC’’ HSBC Bank plc ‘‘IAS’’ International Accounting Standards ‘‘IASB’’ International Accounting Standards Board ‘‘IFRS’’ International Financial Reporting Standards ‘‘ISIN’’ International Security Identification Number ‘‘ISO’’ International Organization for Standardization ‘‘Issue Price’’ 116 pence per New Ordinary Share ‘‘Joint Bookrunners’’ HSBC, Barclays Capital, RBS Hoare Govett and Collins Stewart ‘‘Joint Global Co-ordinators’’ HSBC and Barclays Capital ‘‘KLK’’ Kuala Lumpur Kepong Bhd ‘‘KLK Group’’ KLK together with its subsidiaries and subsidiary undertakings ‘‘KLK Irrevocable Undertaking’’ the irrevocable undertaking entered into by KLK dated 13 December 2010 pursuant to which the KLK Group has irrevocably undertaken to take up and procure the take up of the full entitlement to New Ordinary Shares of the KLK Group under the Rights Issue and to vote (and procure votes) in favour of the Resolutions ‘‘KPI’’ key performance indicator ‘‘Listing Rules’’ the listing rules and regulations made by the FSA under Part VI of FSMA, as amended from time to time ‘‘London Stock Exchange’’ London Stock Exchange plc or its successors ‘‘Managers’’ Dr Christian Holtmann, Stefan Brandt, Dr Dieter Hesterwerth and Detlev Schauwecker ‘‘Model Code’’ the model code on share dealing (as amended) set out in Annex 1 of Listing Rule 9 ‘‘member account ID’’ the identification code or number attached to any member account in CREST ‘‘Money Laundering Regulations’’ the Money Laundering Regulations 2007 (SI2007/2157), as amended from time to time ‘‘New Credit Agreement’’ the agreement relating to the New Credit Facilities ‘‘New Credit Facilities’’ the £210 million credit facilities to be made available pursuant to the New Credit Agreement, as described in paragraph 11.5 of Part XI of this document ‘‘New Ordinary Shares’’ the new Ordinary Shares to be issued by the Group pursuant to the Rights Issue ‘‘Nil Paid Rights’’ rights to acquire the New Ordinary Shares, nil paid ‘‘Nominations Committee’’ the nominations committee of the Company established by the Board ‘‘Official List’’ the Official List of the FSA pursuant to Part VI of FSMA ‘‘Ordinary Shares’’ ordinary shares of 10 pence each in the capital of the Company (including, if the context requires, the Existing Ordinary Shares and New Ordinary Shares)

197 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS ‘‘Overseas Shareholders’’ Qualifying Shareholders with registered addresses outside the United Kingdom or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the United Kingdom ‘‘participant ID’’ the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant ‘‘PolymerLatex’’ PolymerLatex Deutschland Beteiligungsgesellshaft mbH ‘‘PolymerLatex Group’’ PolymerLatex together with its subsidiary undertakings from time to time ‘‘Prospectus Rules’’ the prospectus rules of the UK Listing Authority made in accordance with section 73A of FSMA, as amended from time to time ‘‘Provisional Allotment Letter’’ the renounceable provisional allotment letter to be sent to Qualifying non-CREST Shareholders in respect of the New Ordinary Shares to be provisionally allotted to them pursuant to the Rights Issue ‘‘Qualifying CREST Shareholders’’ Qualifying Shareholders holding Ordinary Shares in uncertificated form ‘‘Qualifying non-CREST Qualifying Shareholders holding Ordinary Shares in certificated Shareholders’’ form ‘‘Qualifying Shareholders’’ Shareholders on the register of members of the Company at the Record Date ‘‘RBS’’ RBS Hoare Govett Limited ‘‘Record Date’’ 5.00 p.m. on 22 December 2010 ‘‘Registrar’’ Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE ‘‘Regulation S’’ Regulation S under the Securities Act ‘‘Regulations’’ the Uncertificated Securities Regulations 2001 (SI 2001/3755#) ‘‘Regulatory Information Service’’ one of the regulatory information services authorised by the UKLA to receive, process and disseminate regulatory information in respect of listed companies ‘‘Remuneration Committee’’ the remuneration committee of the Company established by the Board ‘‘Resolutions’’ the resolutions to be proposed at the General Meeting and set out in the General Meeting Notice ‘‘Rights Issue’’ the offer by way of rights to Qualifying Shareholders to subscribe for New Ordinary Shares, on the terms and conditions set out in this document and, in the case of Qualifying non-CREST Shareholders only, the Provisional Allotment Letter ‘‘RTGS’’ real time gross settlement ‘‘R&D’’ research and development ‘‘SDRT’’ stamp duty reserve tax ‘‘Senior Manager’’ Derick Blair Whyte ‘‘Seller’’ PolymerLatex Holdings B.V. ‘‘Shareholders’’ the holder(s) of Ordinary Shares ‘‘stock account’’ an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited ‘‘TowerBrook’’ TowerBrook Capital Partners (UK) LLP ‘‘UK Listing Authority’’ or the Financial Services Authority acting in its capacity as the ‘‘UKLA’’ competent authority for the purposes of FSMA

198 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS ‘‘uncertificated’’ or ‘‘in recorded on the register of members as being held in uncertificated uncertificated form’’ form in CREST and title to which, by virtue of the Regulations, may be transferred by means of CREST ‘‘Underlying’’ Underlying performance excludes special items as defined in Yule Catto’s consolidated financial statements ‘‘Underwriters’’ HSBC, Barclays Capital, RBS, Collins Stewart and Commerzbank ‘‘Underwriting Agreement’’ the conditional underwriting agreement dated 13 December 2010 entered into by the Company and the Underwriters in connection with the Rights Issue, a summary of which is contained in paragraph 11.3 of Part XI of this document. ‘‘Underwritten Shares’’ the 157,665,030 New Ordinary Shares to be issued in the Rights Issue and underwritten by the Underwriters, which excludes the New Ordinary Shares to be taken up pursuant to the KLK Irrevocable Undertaking. ‘‘Uquifa’’ Union Quimico Farmaceutica SA ‘‘United Kingdom’’ or ‘‘UK’’ the United Kingdom of Great Britain and Northern Ireland ‘‘United States’’ or ‘‘US’’ the United States, its territories and possessions, any State of the United States and the District of Columbia, and all other areas subject to its jurisdiction ‘‘US Securities Act’’ the United States Securities Act of 1933, as amended ‘‘Yule Catto’’ or the ‘‘Company’’ Yule Catto & Co plc ‘‘Yule Catto Options’’ options and awards over shares held pursuant to the Yule Catto Share Schemes ‘‘Yule Catto Share Schemes’’ the schemes described in paragraph 5 of Part XI of this document For the purposes of this document, ‘‘subsidiary’’, ‘‘subsidiary undertaking’’, ‘‘undertaking’’ and ‘‘associated undertaking’’ have the meanings given by the Companies Act 2006. All references to ‘‘pounds’’, ‘‘pounds sterling’’, ‘‘sterling’’, ‘‘£’’, ‘‘pence’’ and ‘‘p’’ are to the lawful currency of the UK. All references to ‘‘euro’’ and ‘‘c’’ are to the lawful currency of the members states of the European Union that adopt a single currency in accordance with the treaty establishing the European Community as amended by the treaty on European Union. All references to ‘‘$’’ or ‘‘US$’’ are to the lawful currency of the US. All references to ‘‘Ringgit’’, ‘‘Malaysian Ringgit’’ or ‘‘RM’’ are to the lawful currency of Malaysia. All references in this document to times are, unless the context otherwise appears, references to the time in London, UK.

199 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS PART XIV

GLOSSARY

‘‘ACN’’ Acrylonitrile ‘‘ACR’’ Acrylics ‘‘API’’ active pharmaceutical ingredients ‘‘BTD’’ Butadiene ‘‘CR’’ Chloroprene ‘‘DMF’’ drug master ﬁle ‘‘HS-SBR’’ high solids SBR ‘‘Kl’’ kilolitres ‘‘kt’’ kilo tons ‘‘NBR’’ nitrile butadiene rubber ‘‘NR’’ Natural Rubber ‘‘PSBR’’ Vinyl pyridine SBR ‘‘PVA’’ polyvinyl acetate ‘‘PVC’’ polyvinyl chloride ‘‘S’’ Styrene ‘‘SA’’ Styrene acrylic ‘‘SBR’’ Styrene butadiene rubber ‘‘VOC’’ Volatile organic compound ‘‘xSBR’’ Carboxylated SBR

200 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS NOTICE OF GENERAL MEETING OF YULE CATTO & CO PLC

Yule Catto & Co plc (incorporated in England and Wales with registered number 98381)

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a General Meeting of the Company will be held at the offices of the Company at Temple Fields, Central Road, Harlow, Essex CM20 2BH on 30 December 2010 at 11.00 a.m. for the purpose of considering and, if thought fit, passing the resolutions set out below, which will be proposed as separate ordinary resolutions. Words and expressions defined in the document of which this Notice forms part (a copy of which has been produced to the meeting and initialled by the chairman of the meeting for the purpose of identification only) shall, unless otherwise defined herein, have the same meaning in this Notice. THAT: 1. the Acquisition by the Company of the entire issued share capital of PolymerLatex pursuant to the Acquisition Agreement and all agreements and arrangements made or entered into, or which may in the future be made or entered into, by the Company or any of its subsidiaries in connection with, or which are ancillary to, the Acquisition, including the Acquisition Agreement, be and are hereby approved and that the Directors (or any duly constituted committee thereof) of the Company be and are hereby authorised to make any non-material amendment, variation, waiver or extension to the terms or conditions of the Acquisition, the Acquisition Agreement and/or any ancillary agreement which the directors (or any duly constituted committee thereof) consider necessary, desirable or expedient and to do all such other things as they may consider necessary, desirable or expedient in connection with the Acquisition; and 2. subject to the approval of resolution 1 above and conditional upon the Underwriting Agreement having become unconditional in all respects save for any condition relating to Admission having occurred, the authority conferred on the Directors by Article 5.2 of the Articles of Association be renewed for the period ending at the end of the Annual General Meeting of the Company in 2011 or on 30 June 2011, whichever is the earlier, and for such period the Section 551 Amount (as defined in the Articles of Association) shall be £22,820,566.20 comprising up to: (i) an aggregate nominal amount of £19,421,758.20 in connection with the Rights Issue, and (ii) otherwise an additional aggregate nominal amount of £3,398,808. Such authority shall be in substitution for all previous authorities pursuant to Section 551 of the Companies Act.

By Order of the Board Richard Atkinson Secretary 13 December 2010 Registered ofﬁce Temple Fields Harlow Essex CM20 2BH

201 c103902pu090 Proof 5: 13.12.10 B/L Revision: 0 Operator HarS Notes: 1. Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A shareholder may appoint more than one proxy in relation to the General Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A proxy need not be a shareholder of the Company. A proxy form which may be used to make such appointment and give proxy instructions accompanies this notice. 2. To be valid any proxy form or other instrument appointing a proxy must be received by post or (during normal business hours only) by hand at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY or at the electronic address provided in the proxy form, in each case no later than 48 hours before the time appointed for holding the meeting or any adjourned meeting. In calculating the appropriate time for receipt of a proxy, the Company has disregarded any day that is a Saturday, Sunday, Christmas Day, Good Friday or a bank holiday. 3. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described in paragraph 9 below) will not prevent a shareholder attending the General Meeting and voting in person if he/she wishes to do so. 4. Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act to enjoy information rights (a ‘Nominated Person’) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights. 5. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 2 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company. 6. To be entitled to attend and vote at the General Meeting (and for the purpose of the determination by the Company of the votes they may cast), Shareholders must be registered in the Register of Members of the Company at close of business on 24 December 2010 (or, in the event of any adjournment, on the date which is two days before the time of the adjourned meeting). Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting. 7. The Company’s share capital consists of 145,663,187 ordinary shares with voting rights. 8. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 9. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications, and must contain the information required for such instruction, as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID 3RA50) by the latest time(s) for the receipt of proxy appointments specified in Note 2. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 10. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. 11. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 12. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares. 13. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the company or the good order of the meeting that the question be answered. 14. A copy of this notice, and other information required by Section 311A of the Companies Act, can be found at www.yulecatto.com.

imprima — C103902