MATERIALS THAT MAKE A DIFFERENCE

Royal Ten Cate Royal Ten Cate Colophon Royal Ten Cate Concept and realisation Photography C&F Report Amsterdam B.V., Paul Haverkort Amsterdam Bram Hendriks Frans Dekker Translation Roelof Pot business development & investor relations De Jong Luchtfotografie F.R. Spaan, corporate director Stephen Barnett Norbert Hekkink P.O. Box 58 TenCate would like to hear from you. Please let u s know your views by e-mailing VVH business translations, Printing Joost van Baars Courtesy Gulfstream 7600 GD Almelo, The Netherlands Maartensdijk Lulof Druktechniek B.V., Marjo Baas Courtesy Staff Sgt. Curt Cashour Telephone +31 (0)546 544 911 investorrelations@tencate.com, stating the Fax market group or officer you wish to contact. Almelo Ton Kuper Vista landschapsarchitectuur en stedenbouw +31 (0)546 814 145 Annual Report 2011 Text Royal Ten Cate Annual Report 2011 MATERIALS THAT MAKE A DIFFERENCE TenCate materials are at the cutting TenCate focuses on added-value solutions TenCate addresses market trends edge of textile, chemical and material to meet critical end-user requirements. based on the global themes of safety, pro- technologies. Our customers make a difference with our tection and sustainability. This generates materials and systems. long-term growth for the company. www.tencate.com The strategy is characterised by value chain management. This business model implemented by TenCate is built on the four cornerstones of end-user marketing, product differentiation, technological innovation and cost leadership. The challenge lies in striking an optimum balance between these four cornerstones. Thermoplastic composite The automotive industry is increasingly interested in using thermoplastic composites from the TenCate Cetex product portfolio of TenCate Advanced Composites in cars. TenCate Cetex is: Strong and impact-resistant: contributes to safety Lightweight: saves fuel Mouldable: readily processable Reusable and recyclable: sustainable Connected by the value proposition Operating companies, associated companies and other interests Commercial overview and profile

Royal Ten Cate Royal Ten Cate Colophon Royal Ten Cate Concept and realisation Photography C&F Report Amsterdam B.V., Paul Haverkort Amsterdam Bram Hendriks Frans Dekker Translation Roelof Pot business development & investor relations De Jong Luchtfotografie F.R. Spaan, corporate director Stephen Barnett Norbert Hekkink P.O. Box 58 TenCate would like to hear from you. Please let u s know your views by e-mailing VVH business translations, Printing Joost van Baars Courtesy Gulfstream 7600 GD Almelo, The Netherlands Maartensdijk Lulof Druktechniek B.V., Marjo Baas Courtesy Staff Sgt. Curt Cashour Telephone +31 (0)546 544 911 investorrelations@tencate.com, stating the Fax market group or officer you wish to contact. Almelo Ton Kuper Vista landschapsarchitectuur en stedenbouw +31 (0)546 814 145 Annual Report 2011 Text Royal Ten Cate Annual Report 2011 MATERIALS THAT MAKE A DIFFERENCE TenCate materials are at the cutting TenCate focuses on added-value solutions TenCate addresses market trends edge of textile, chemical and material to meet critical end-user requirements. based on the global themes of safety, pro- technologies. Our customers make a difference with our tection and sustainability. This generates materials and systems. long-term growth for the company. www.tencate.com The strategy is characterised by value chain management. This business model implemented by TenCate is built on the four cornerstones of end-user marketing, product differentiation, technological innovation and cost leadership. The challenge lies in striking an optimum balance between these four cornerstones. Thermoplastic composite The automotive industry is increasingly interested in using thermoplastic composites from the TenCate Cetex product portfolio of TenCate Advanced Composites in cars. TenCate Cetex is: Strong and impact-resistant: contributes to safety Lightweight: saves fuel Mouldable: readily processable Reusable and recyclable: sustainable Connected by the value proposition Operating companies, associated companies and other interests Commercial overview and profile

COMMERCIAL OVERVIEW As at 1 January 2012 The TenCate sectors are subdivided into market groups. Each market group is a cluster of subsidiaries which co-operate intensively in research & development, production, end-user marketing and sales. An overview of the legal entities which make up the company can be found on the inside back cover. ADVANCED TEXTILES & COMPOSITES SECTOR PROTECTIVE FABRICS Protective and safety fabrics and multi-risk solutions for industry, services, firefighting and defence OUTDOOR FABRICS Protective fabrics for outdoor applications SPACE & AEROSPACE COMPOSITES Advanced composites, compounds and systems for the aerospace industry INDUSTRIAL COMPOSITES Advanced composites, compounds and systems for industrial applications, including automotive, industrial components and energy extraction TenCate Protective Fabrics Americas TenCate Protective Fabrics EMEA TenCate Protective Fabrics Asia TenCate Outdoor Fabrics Europe TenCate Advanced Composites Americas TenCate Advanced Composites EMEA TenCate Advanced Composites Americas TenCate Advanced Composites EMEA GEOSYNTHETICS & GRASS SECTOR GEOSYNTHETICS Synthetic fabrics, non-wovens and grids for solutions and applications in infrastructure, civil engineering, water management, the environmental sector, agriculture and horticulture GRASS Synthetic turf components and integrated synthetic turf systems for top-flight sports, recreation and landscape projects TenCate Geosynthetics Americas TenCate Geosynthetics EMEA TenCate Geosynthetics Asia Upstream TenCate Grass Americas TenCate Grass EMEA TenCate Grass Asia Downstream Edel Grass (50%) GreenFields (90%) TigerTurf (80%) Hellas Construction (30%) OTHER ACTIVITIES SECTOR INKJET TECHNOLOGY Specialist inkjet technology for industrial production processes TECHNICAL COMPONENTS Technical rollers and components, particularly for printers, copiers, fax machines, postal sorting machines and ATMs HOLDING & SERVICES Holding company activities Xennia Technology TenCate Enbi North America TenCate Enbi EMEA TenCate Enbi Asia Koninklijke Ten Cate nv Royal Ten Cate Annual Report 2011

PROFILE ADVANCED ARMOUR Advanced composites, ceramics and integrated systems for the active and passive protection of police, army, air force, navy and civilian service personnel, vehicles and vessels TenCate Advanced Armour Americas TenCate Advanced Armour EMEA TenCate Advanced Armour Asia Royal Ten Cate (TenCate) is a multinational company which combines textile technology with chemical processes in the development and production of functional materials. On this technological basis, TenCate develops a range of applications (productmarket-technology combinations) aimed at growth markets. TenCate materials are mainly used for: personal safety and protection of the living and working environment; modernisation of equipment used by armed forces, fire brigades and police; aerospace (lower fuel costs due to lighter materials); water management, infrastructure and environmental care; industrial applications. TenCate presents itself as a developer and producer of materials, modules and systems with distinctive characteristics. The company operates a value-chain model aimed at occupying distinctive positions by means of technological innovation, cost leadership, product differentiation and end-user marketing. TenCate develops solutions for end-users by operating in network structures, such as open innovation centres, partnerships and co-creation, and by making acquisitions in complementary fields (product-markettechnology combinations). The solutionfocused system approach plays a key role. The policy of value-chain control has enabled TenCate to secure leading positions in worldwide niche markets. TenCate selects market areas mainly on the basis of global trends, specifically in the safety/protection and sustainability/ environmental fields. With regard to the characteristics of the materials (specifications), the markets are usually regulated by governments or agencies on the basis of legislation and regulations. TenCate s direct customers are mainly public-sector bodies, system integrators, original equipment manufac turers and their direct suppliers. TenCate employs around 4,350 people worldwide and strives to operate in an ethically and socially responsible way. TenCate encourages its employees to be enterprising, flexible and creative, thereby demonstrating its aim of achieving progress and sustainability for all stakeholders.

Annual report 2011 Royal Ten Cate Commercial overview Inside cover Profile Inside cover Financial highlights 2 TenCate in 2011 4 TenCate technology overview 6 Key developments in 2011 9 Evaluation of 2011 action plans 10 Vision, mission, strategy and objectives 12 Foreword by the Chairman of the Executive Board 14 The TenCate share 16 Share listing 16 Investor relations policy and communication 16 Dividend policy and proposed dividend 16 Disclosure of Major Holdings in Listed Companies Act 17 Option plan 17 Spread of shareholdings 17 Theme: Connected by the value proposition 18 Report of the Supervisory Board 20 The Boards 22 Report of the Executive Board 25 Financial performance 28 Activities by sector 33 Post balance sheet events 58 Outlook 59 Actions for 2012 60 Corporate information 61 Corporate governance 61 SWOT analysis 61 Risk management 62 Human resources management 66 Corporate information technology 69 Corporate intellectual property 69 Corporate social responsibility 70 Statement by the Executive Board 75 Financial statements 2011 76 Other information 133 Ten-year summary 135 Operating companies, associated companies and other interests Inside cover Colophon Outside cover

Financial highlights FINANCIAL HIGHLIGHTS PER-SHARE DATA Revenues 1,138.8 mln (+ 16%) 1,200 960 720 480 Net result * 2.31 3.0 2.4 1.8 1.2 240 0 2007 2008 2009 2010 2011 * Excluding income from sale of activities and exceptional items 0.6 0 2007 2008 2009 2010 2011 EBITA 102.5 mln (+ 21%) 125 100 75 50 0.95 1.0 0.8 0.6 0.4 25 0.2 0 2007 2008 2009 2010 2011 0 2007 2008 2009 2010 2011 Net result 58.7 mln (+ 28%) 75 60 45 30 15 0 2007 2008 2009 2010 2011 REVENUES BY SECTOR EBITA BY SECTOR Advanced Textiles & Composites 538.4 mln (+ 20%) 600 480 360 240 Advanced Textiles & Composites 70.3 mln (+ 61%) 75 60 45 30 120 15 0 2007 2008 2009 2010 2011 0 2007 2008 2009 2010 2011 Geosynthetics & Grass 525.9 mln (+ 12%) 600 480 360 240 Geosynthetics & Grass 26.3 mln ( 16%) 45 36 27 18 120 9 0 2007 2008 2009 2010 2011 0 2007 2008 2009 2010 2011 Other activities 74.5 mln (+ 12%) 100 80 60 40 Other activities 5.9 mln ( 40%) 15 10 5 0 20 5 0 2007 2008 2009 2010 2011 10 2007 2008 2009 2010 2011 2 Royal Ten Cate

PROFIT AND LOSS ACCOUNT 2011 2010 Revenues 1,138.8 984.5 Operating result before depreciation and amortisation (EBITDA) 137.5 119.5 Operating result before amortisation (EBITA) 102.5 85.0 Operating result before amortisation as % of revenues (EBITA margin) 9.0% 8.6% Operating result (EBIT) 89.6 74.6 Net result 58.7 46.0 CONSOLIDATED BALANCE SHEET AND RETURN Net capital employed (year-end) 808.8 715.4 Return (EBITA) on average net capital employed 13.1% 12.1% Net interest bearing debt (year-end) 288.7 240.7 CONSOLIDATED CASH FLOW Cash flow from operating activities 49.3 29.1 Investments less divestments of fixed assets 22.3 20.4 Free cash flow 27.0 8.7 Balance of acquisitions/disposals of operating companies and participating interests 34.8 24.7 OUTSTANDING SHARES (X 1,000) Number of outstanding shares at year-end 25,929 25,502 Weighted average number of shares (before dilution) 25,452 25,026 Weighted average number of shares (after dilution) 25,736 25,216 PER-SHARE DATA Net result 2.31 1.84 Diluted net result 2.28 1.82 Dividend per share 0.95 0.75 Equity * 17.96 17.19 EMPLOYEES Number of staff years at year-end 4,353 4,271 of which in the Netherlands 819 785 * Adjusted for comparison purposes in connection with change of accounting policy for pensions. Annual Report 2011 3

TenCate in 2011 In 2011, TenCate maintained the growth trend that began in 2010, with revenues and profitability rising strongly again to record levels. TenCate succeeded once again in strengthening its market positions by means of the buy & build strategy. The growth in 2011 resulted mainly from the focus on materials that enable the Company to anticipate market trends on the basis of the right value proposition. The global market trends of safety and sustainability once again generated a positive market climate overall in 2011. Revenues 2011 ( 1,138.8 million) in per cent 47% 46% 7% Advanced Textiles & Composites Geosynthetics & Grass Other activities TenCate is able to project a highly distinctive international profile, partly due to the Company s ground-breaking approach based on technological innovation and product differentiation. That makes TenCate an attractive partner for innovation and product and market development. As a connecting factor within TenCate, the technology position constantly gives rise to new possibilities in the market. This annual report seeks particularly to highlight the activities that have been and are being developed in order to gear the technological lead and product differentiation to the marketplace as far as possible by adopting an outside-in approach. Revenues 2010 ( 984.5 million) in per cent 46% 47% 7% Advanced Textiles & Composites Geosynthetics & Grass Other activities TenCate has its own production sites and sales offices in the following countries: Geographic breakdown of sales in in 2011 in per cent 50 45 40 35 30 25 20 Americas NORTH AMERICA United States Canada SOUTH AMERICA Brazil Production and sales Sales EMEA EUROPE Belgium Denmark Germany United Kingdom France Hungary Ireland Italy Netherlands Austria Poland Romania Spain Czech Republic Switzerland AFRICA Benin South Africa MIDDLE EAST Dubai AsiaPacific ASIA China India Malaysia Singapore Thailand South Korea OCEANIA Australia New Zealand 15 10 5 0 AUSTRIA FRANCE UK GERMANY BELGIUM NETHERLANDS By destination By origin ITALY SPAIN OTHER EU OTHER EUROPE MIDDLE EAST USA + CANADA CENTRAL AND SOUTH AMERICA ASIA REST OF THE WORLD 4 Royal Ten Cate

ADVANCED TEXTILES & COMPOSITES SECTOR GEOSYNTHETICS & GRASS SECTOR The Advanced Textiles & Composites sector is concentrated around impregnation and coating technologies for the application or incorporation of functional characteristics in and on textiles. The products in this sector mainly comprise protective fabrics and composite materials (made particularly of carbon fibres, glass fibres and aramids). TenCate is the global market leader in protective fabrics and one of the leading companies in the field of composite materials. The Geosynthetics & Grass sector is concentrated around extrusion and non-woven technologies. Geosynthetics products play an important role in the separation of soil layers and in the stabilisation of groundworks and dyke bodies. Geosynthetics are increasingly being used for the filtration and dewatering of polluted sludge. Synthetic turf is seeing growing use worldwide, driven principally by climate conditions, water scarcity and lower maintenance costs. Not least, an important factor is that synthetic turf sports pitches remain playable 24 hours a day and in less favourable weather conditions. Geosynthetics and synthetic turf are global markets. TenCate occupies the number-one position in these markets. Uses: Defence Industry Firefighting, police Aerospace industry Automotive and energy sector Uses: Infrastructure projects and water management Environmental market Agriculture sector Sports pitches market Landscaping, leisure market Revenues 538.4 mln EBITA 70.3 mln Revenues 525.9 mln EBITA 26.3 mln Revenues + 20% EBITA + 61% Revenues + 12% EBITA 16% Indicative revenue breakdown 2011 Indicative revenue breakdown 2010 Indicative revenue breakdown 2011 Indicative revenue breakdown 2010 Protective fabrics Armour composites Space/aerospace composites Geosynthetics Grass Upstream Grass Downstream Annual Report 2011 5

TenCate technology overview END-USER GLOBAL TRENDS Safety and protection, sustainability and environment END-USER MARKETING MARKETS market management DIFFERENTIATION PRODUCTS (materials, modules, systems) protective fabrics outdoor fabrics space composites aerospace composites VALUE CHAIN MANAGEMENT portfolio management COST LEADER MATERIAL TECHNOLOGY Fiber technology Textile technology process management Basic technologies P Physics BT Biomedical technology C Chemistry / Chemical engineering ME Mechanical engineering INNOVATION PC Nanotechnology / Polymer chemistry E Electronics 6 Royal Ten Cate

TenCate business model TenCate END-USER MARKETING business development INNOVATION market management EXTERNAL market VALUE CHAIN MANAGEMENT technology INTERNAL process management product process DIFFERENTIATION portfolio management COST LEADER industrial composites advanced armour geosynthetics grass business development Finish technology M IT B Mechatronics ICT Biosciences TenCate Annual Report 2011 7

ADVANCED ARMOUR active blast countermeasure system Troops in theatre need the best and most advanced protection. Insurgency tactics have not only caused a great many casualties, but also had an impact on military operations and logistics. There is an evident need for enhanced protection, in combination with increased mobility of military vehicles. The TenCate ABDS active blast countermeasure system is an innovative defence solution, against a number of improvised explosive devices. This active protection system effectively mitigates the devastating effects of IEDs, fulfilling STANAG 4569 at classified levels. While defeating the acceleration of the vehicle and preserving the vehicle hull, the TenCate ABDS active blast countermeasure system delivers a structural and biomechanical response mode for a range of combat and tactical military vehicles. Connected through the value proposition

Key developments in 2011 16% Revenue growth Positive developments in new markets / strengthening Revenues in 2011 amounted to 1,138.8 million (2010: of local presence 984.5 million). The organic rise in revenues amounted to 12%. Revenues in Asia and South America continue to grow strongly, The Protective Fabrics market group made a major contribution particularly in protective fabrics and geosynthetics. The acquisition to the revenue growth. In particular, there was strong growth in of Emas Kiara in Malaysia (geosynthetics) was completed. In India, TenCate Defender M and TenCate Tecasafe products. the market activities of TenCate Protective Fabrics and TenCate TenCate successfully created new standards in the world market Advanced Armour were merged to form TenCate Protection for protective fabrics with these brands. Systems in order to increase their efficiency as a combined operation. In China, the local management was strengthened 28% Net profit growth to facilitate a differentiated approach to the Chinese market. Net profit in 2011 amounted to 58.7 million (2010: 46.0 million). A co-operation agreement was signed with Chinamex to supply The profit growth was achieved particularly as a result of higher the market for protective fabrics (military uniforms, police, profits in the United States and the Netherlands. firefighting). Strong growth in the Advanced Textiles & Composites sector Start-up of new activities in aerospace armour TenCate Protective Fabrics recorded strong growth in revenues TenCate is initiating activities in vehicle and helicopter armour, from the TenCate Defender M and TenCate Tecasafe products. for which the production site opened in France in the second These two product groups contributed a substantial portion of half of 2011. The first major long-term contract was for armour this se ctor s total revenues in 2011. There was also considerable for Eurocopter (EADS) helicopters. growth in revenues from aerospace composites. The growth took place both in Europe and America. The production of composite Start of the market launch phase for the TenCate ABDS active materials for the Airbus A380 contributed a substantial share. blast countermeasure system Following the completion of the test phase, TenCate is initiating Mixed picture for Geosynthetics & Grass sector the market phase for the TenCate ABDS active blast The Geosynthetics & Grass sector showed a mixed picture. countermeasure system jointly with military vehicle manufacturers. TenCate Geosynthetics put in an excellent performance worldwide. A 51% majority holding in ABDS ApS was acquired at the end of In the Grass group revenues declined compared to 2010 due to the 2011 in order to accelerate this process. The acquisition of all the ending of the supply contract with a major customer following shares in ABDS ApS was completed at the beginning of 2012. a strategic reorientation. TenCate was unable to compensate fully for this loss of revenues during the year. It put pressure on profits because it was not possible to take full advantage of the economies of scale within TenCate Grass. Alliances were entered into with new market participants during the year. Annual Report 2011 9

Evaluation of 2011 action plans Strengthening of the Company profile Longer-term profit growth TenCate has strengthened its profile, including through advertising Various business development projects have been assigned and specialist publications in the US media, partly because a large strategic priority. This has resulted in a particular focus. TenCate proportion of revenues are generated in America. The main thrust has a number of attractive possibilities, which can contribute involved raising awareness of the protection characteristics of a major share of future growth or give rise to the technological TenCate products, TenCate s relationship with fellow companies in renewal that will strengthen TenCate s market position. the US textile industry involved as part of the value chain in the The following are examples: production process for TenCate Defender M. At the beginning Digital finishing by means of inkjet technology; of 2011, the waiver under the US Berry Amendment (import Woven synthetic turf systems / integrated synthetic turf systems; exemption for non-us goods) was extended until 2015. The U.S. TenCate ABDS active blast countermeasure system; Congress granted a permanent waiver at the end of 2011. Expansion of the TenCate Cetex product portfolio (thermoplastic composites). Reinforcement of sustainability concept and introduction of measurable performance indicators Implementation of emerging markets strategy In line with previous initiatives, good progress was made in 2011 in TenCate is strengthening its market position and presence reinforcing the sustainability policy by means of corporate social in emerging markets. This is a gradual process, preceded by responsibility. TenCate is focusing increasingly on making the CSR a thorough analysis of the market structure and the potential policy more measurable and visible. At the same time, customers partners operating in it. In view of the risks and turnaround times, are increasingly demanding more sustainable products. a greenfield operation is usually a good option. The acquisition The following are examples of individual projects that have been of Emas Kiara (geosynthetics, Malaysia) was completed at the started or completed: beginning of 2011, considerably increasing TenCate s market share The new process ecotool is being used in market groups in in the region. The protective fabrics activities for the Asian market the Netherlands; were strengthened from the Bangkok site (TenCate Union The new product ecotool has determined the detailed CO 2 footprint Protective Fabrics, Thailand). A co-operation agreement was of TenCate Geotube ; signed with Chinamex (China) for the Chinese market. Various sustainability and quality certification processes were The management of TenCate Pacific in Hong Kong was completed or extended in the Netherlands and abroad; strengthened at the end of 2011. A substantial number of innovation projects have sustainability as a main or sub-theme; TenCate s sponsorship projects in the Netherlands and abroad are demonstrating the company s social involvement. 10 Royal Ten Cate

Continuation of the buy & build strategy New uses for TenCate materials TenCate has announced an ambitious growth objective for the The automotive industry is one of the most important new areas years ahead, with a revenue target of approximately 2 billion. for the use of TenCate materials. The industry is increasingly Value creation is being boosted by acquisitions, the strengthening realising that in the near future markets will need light, high- of existing activities and their profitability and market performance materials which can be incorporated in large volumes development. in industrial manufacturing processes. TenCate is one of the few Product, market and technology developments were structured companies in the composites sector to have many years of more efficiently in 2011. There is good internal co-operation and experience in the aircraft industry in both the production and a stronger involvement and commitment on the part of the market processing of thermoplastic composites for secondary and primary groups in selecting the strategic growth possibilities. Projects are structural components as well as interior applications (TenCate being initiated on the basis of a clear market vision and growth Cetex ). At the end of 2011, TenCate began to form the Industrial objective. Composites group, the third pillar in the composites group alongside the existing space and aerospace composites and Leading role in the consolidation of the synthetic turf market armour materials groups. In TenCate s synthetic turf activities, attention is increasingly shifting from the product (the components of a synthetic turf Profit improvement at Xennia Technology system) to the required results for the user (system solutions). The positive revenue growth at Xennia Technology has not yet led This approach is increasingly centred on quality, durability, to a rising profit trend, because development and patent costs are performance and safety for players. Strategic co-operation with still relatively high. Research & development activities for third market participants (knowledge integration) is essential in this parties (contract research) have been considerably reduced as a regard. The creation of an international marketing and sales result of the policy focused on profit growth. Xennia Technology is network linked to the production of synthetic turf fibres and carpet now serving a growing number of international markets jointly with backing is expected to be completed in 2012. and through third parties. Annual Report 2011 11

Vision, mission, strategy and objectives VISION TenCate develops and produces functional materials which are distinctive in terms of their characteristics. TenCate focuses on worldwide trends in the field of safety / protection and sustainability / environment, as well as derivative themes, which promote the growth of the company. Markets demand specific critical functionalities to meet specific needs, which are usually determined by standardisation or legislation and regulations. Safety / protection and sustainability / environment are trends that are tightly regulated worldwide. TenCate USA welcomes members of US Congress and Dutch ambassador Members of the United States Congress paid working visits to TenCate Geosynthetics in Pendergrass (Georgia) and TenCate Advanced Armour in Hebron (Ohio) in August 2011. In Pendergrass they discussed the characteristics and applications of geosynthetics in areas such as infrastructure projects. In Hebron they learned about armour applications and projects in the field of vehicle and personal protection. TenCate Protective Fabrics in Union City (Georgia) also welcomed Renée Jones-Bos, the Netherlands ambassador to the United States, in November. This working visit also served to strengthen the economic and cultural ties between TenCate operates in the field of material science. Technological development is an important means of complying with standards and meeting requirements or adjusting standards in such a way that progress can be made in terms of functionalities. TenCate products are used in systems. TenCate increasingly provides the overall solution, either independently or in co-operation with partners. MISSION Progress is one of the principal motives of TenCate. The company aims to be a leader in providing sustainable solutions for complex requirements relating to personal protection and protection of the personal environment. TenCate has secured a leading position in its markets worldwide, partly as a result of its broad technological competence. STRATEGY TenCate s strategy is based on the concept of global value chain management. On this basis TenCate works with numerous links in the chain in sustainable growth markets. The four cornerstones of this policy are: 1. End-user marketing and an industrial intellectual property policy; 2. Product differentiation, targeted at specific applications and customer requirements; 3. Technological innovation; 4. Cost leadership. the Netherlands and Georgia. 12 Royal Ten Cate

OBJECTIVES QUALITATIVE STRATEGIC OBJECTIVES Creation of shareholder value through profitable growth based on our knowledge, skill and internal synergy. In this way we can fulfil our social responsibilities, from economic, environmental and social perspectives. Achievement of critical mass in product-market-technology combinations by securing leading positions in worldwide market niches. Achievement of a healthy financial position with sufficient strength for acquisitions. Management of a balanced portfolio of activities, in which product-market-technology combinations differ in terms of growth opportunities and risk profile. Stimulation of an open, creative and enterprising culture for change, renewal and progress. Management of a global commercial organisation which thinks in terms of (system) solutions within the overall value chain. FINANCIAL STRATEGIC OBJECTIVES The net capital employed must generate a sufficient return. The operating result before amortisation as a percentage of average net capital employed must be at least 15%. The financial position must be sufficiently solid. The ratio of net interest-bearing debt to the operating result before depreciation and amortisation (EBITDA) must be structurally lower than 2.5. The target of 10% annual profit growth is based on EBITA (operating result before amortisation). To this end, the buy & build strategy will be pursued. Higher added value and efficiency are also necessary, since the organic growth of the core activities is expected to be below 10% on average. An appropriate profit margin must be achieved. The consolidated EBITA margin must rise to at least 10%. Achievement of targets: Target Actual Return on average net capital employed > 15% 13.1% Debt ratio (debt / EBITDA) < 2.5 2.12 EBITA growth at least 10% > 10% 20.6% EBITA margin > 10% 9.0% Annual Report 2011 13

Foreword by the Chairman of the Executive Board SUBSTANTIAL REVENUE AND PROFIT GROWTH In 2011, TenCate successfully maintained the recovery which had begun in 2010, with a further strong rise in revenues and profit. Revenues and net profit amounted to 1,138.8 million (+ 16%) and 58.7 million (+ 28%) respectively. The growth was achieved despite continued challenging economic conditions, mainly thanks to TenCate s leading product, market and technology positions in the niche markets in which the company operates worldwide. Although growth was achieved across a wide base, there was a substantial contribution from the Protective Fabrics market group. This was one of the fastest-growing product groups in 2011 as a result of the successful product differentiation policy (including TenCate Tecasafe Plus and TenCate Defender M). Further internationalisation (Asia and South America) also contributed to the continuing growth. INTERNATIONAL PROFILE Looking back, it can be seen that TenCate has succeeded in constantly strengthening its market position by means of the buy & build strategy. This was the case again in 2011, mainly as a result of the market focus on materials that enable the Company to anticipate market trends on the basis of the right value proposition. TenCate is able to project a highly distinctive international profile, partly due to the company s ground-breaking approach based on technological innovation and product differentiation. That makes TenCate an attractive partner for innovation and product and market development. Examples of this are the technological developments in Xennia Technology in the field of digital textile finishing and the developments with regard to the TenCate ABDS active blast countermeasure system. TenCate is also viewed as an attractive partner in the field of thermoplastic composites (TenCate Cetex ). TenCate also fulfilled a pioneering role in crucial knowledge areas in the past, including in developments in the field of synthetic turf and thermoplastic composites. This has resulted in pre-eminent market leadership. As a connecting factor within TenCate, the technology position constantly gives rise to new possibilities in the market. The worldwide market trends of safety and sustainability once again generated a positive market climate overall in 2011. TenCate operates in the international market in general as a transnational company *. Characteristic features of this role include a strong internal network structure and mutual exchanges of information, with the company positioning its products strongly in local markets. Gearing product specifications to local requirements or specific market groups is crucial and also leads to fragmentation of markets or market niches. In this regard, TenCate exhibits strong features of a global enterprise in the fields of finance, marketing/ branding and end-user marketing. TenCate also has purchasing and production advantages based on worldwide access to commodities markets and economies of scale. This international profile, which combines the best of both worlds, is important in order to achieve continuing growth, particularly at the present time. VALUE PROPOSITION FOR THE MARKET Value creation is a central theme of this annual report, because it plays a major role in numerous market propositions. TenCate s development processes are characterised by a pragmatic approach, reliability and thorough knowledge and experience. With its broad knowledge base in the field of textile technology combined with chemicals (material science), TenCate is a unique technology company. This annual report seeks particularly to highlight the activities that have been and are being developed in order to gear the technological lead and product differentiation to the marketplace as far as possible by adopting an outside-in approach. Materials that make a difference is a promise to the market. TenCate s market increasingly puts the end-user at the centre. Although the company operates in a business-to-business environment, end-user marketing is a characteristic success factor. The aim is to create value for the end-user. In markets dominated by specifications, standards and product criteria, which are usually determined by government bodies, this aspect is of great importance. Particularly when government budgets are being cut, systems which save costs in the short or long term offer positive results. Against this backdrop increasing importance is being attributed to sustainability and social and ethical criteria in end-markets. TenCate therefore also incorporates these aspects into the overall proposition. Further information on this can be found in this report. * Research by the University of Amsterdam (under the supervision of A.H.L. Slangen), December 2010. 14 Royal Ten Cate

MARKET THEMES TenCate s main market themes are focused on the safety of people and their surroundings and sustainability/environment. During the past year a great deal of attention was devoted to the fact that a substantial part of TenCate s revenues are linked to government budgets. Although such budgets have been under pressure for a long time, considerable growth was nevertheless achieved in 2011. First, safety and protection worldwide remain a strong focus of attention. Tighter budgets mean that solutions will be analysed more critically in the future. The market is becoming increasingly aware of innovative solutions which save costs and/or are more sustainable than traditional methods. TenCate s focus on technology-driven solutions offers added value. In developing economies in particular, there is a notable trend towards giving preference to new technologies and/or materials. An acceleration is taking place in the launch of new products and systems (fast pull). The management in Asia in particular has been strengthened in order to respond more effectively to developments in the Chinese market. Operational reinforcements have also been carried out in various areas, particularly commerce, in order to accelerate international growth. I would like to express my thanks to all employees for their commitment and the growth achieved during the past financial year. L. de Vries, President and CEO TenCate is an innovative company. Around one-quarter of TenCate s revenues are generated from products introduced within the previous three years. In the future too, TenCate has great potential in terms of new or recently developed products and promising opportunities which can ultimately offset the possible effects of tighter government budgets. Innovation and the continuous process of renewal are constantly throwing up new challenges in attractive markets. That makes TenCate a unique company. PEOPLE People make a difference is the internal version of the TenCate creed applied in the company s human resources policy. The management development and succession policy was closely scrutinised in 2011. The associated policy implementation will be tightened up during the coming year, with a greater degree of rotation among organisational units in order to make optimum use of TenCate s strength. Good knowledge of the management of the whole company and of its internal capabilities will make it possible to react rapidly to market opportunities and mobilise internal knowledge. Annual Report 2011 15

The TenCate share SHARE LISTING The TenCate share is listed on NYSE Euronext Amsterdam and forms part of the AMX index. The share is actively followed by the leading banks and securities houses operating in Dutch / European smalland midcap stocks. TenCate stock options were reintroduced in 2011 after a number of years absence. As at 31 December 2011, 25,928,914 ordinary TenCate shares were in issue, each of a par value of 2.50. The closing price of the share was 21.26. The average daily trading volume on NYSE Euronext rose from 58,406 to 74,132 shares. The trading volume on the alternative trading platforms also increased. INVESTOR RELATIONS POLICY AND COMMUNICATION Although TenCate s performance led to a clear improvement compared to 2010, the share price fell particularly in the second half of the year. Apart from the general stock market climate, the TenCate share was affected by the assumed effect of the expected cuts in US government budgets in particular. TenCate gave a series of presentations in order to communicate transparently on this subject and place it in a broader perspective. with numerous interest organisations, including the Dutch Investors Association (VEB) and the Dutch Association of Investors for Sustainable Development (VBDO). The communication with the various stakeholders through TenCate s updated txtures magazine is greatly appreciated. The magazine covers topical subjects, provides background information on TenCate s activities around the world and provides links to the various TenCate websites. The increase in communication aimed at business markets also attracted a growing number of visitors to the TenCate websites. DIVIDEND POLICY AND PROPOSED DIVIDEND TenCate aims to achieve further growth in its core markets and for many years has been pursuing its buy & build strategy whereby growth is achieved through complementary acquisitions. A constant line of conduct is maintained with the distribution percentage based on approximately 40% of net profit. TenCate applies the principle of optional dividend. In respect of the 2011 financial year it is proposed to set the dividend at 0.95 per 2.50 par value share, payable at shareholders discretion in shares as a charge to the share premium reserve or in cash. Various roadshows were held in the Netherlands and abroad during the reporting year (including in the United States of America, the United Kingdom, France and Germany), strengthening the dialogue with shareholders, analysts and other parties interested in TenCate. The annual meeting provided an excellent platform for a lively dialogue Source NYSE Euronext ISIN code NL 0000375731 Reuters code NTCN.AS Bloomberg code KTC.NA KTC AEX AMX AsCX 34 32 30 28 26 24 22 20 18 16 14 JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC 16 Royal Ten Cate

Number of shares in issue Number of shares in issue on 31 December 2010 25,501,907 Increase in share capital as a result of stock dividend 427,007 Number of shares in issue on 31 December 2011 25,928,914 Changes in the number of shares in issue 2011 2010 Par value 2.50 2.50 Lowest price 18.75 17.30 Highest price 32.02 28.83 Closing price 21.26 28.00 Earnings per share 2.31 1.84 Dividend per share 0.95 0.75 DISCLOSURE OF MAJOR HOLDINGS IN LISTED COMPANIES ACT The register maintained by the Netherlands Authority for the Financial Markets (AFM) in connection with the disclosure of major holdings in listed companies contains details of the following investors with interests of over 5% (source: AFM). It is almost unchanged in comparison with the previous year. Name Date of disclosure Percentage Delta Lloyd N.V. 6 May 2011 5.67% Kempen Oranje Participaties N.V. 1 January 2010 6.34% Ameriprise Financial Inc 1 May 2010 7.69% Schroders plc 27 October 2009 8.25% Delta Lloyd Deelnemingen Fonds N.V. 22 June 2010 10.16% OPTION PLAN, SHAREHOLDINGS OF PERSONNEL AND EXECUTIVE BOARD Details of the option plan and shareholdings of managers and members of the Executive Board can be found on page 128 of this annual report. The shares repurchased by the company relate to the hedging of granted options. Important dates in 2012 Publication of 2011 full-year figures 29 February Annual General Meeting of Shareholders 19 April Ex-dividend date 23 April Record date: determination of dividend entitlements 25 April Option period for cash or stock dividend 26 April to 14 May Publication of trading update for first quarter of 2012 27 April Payment of dividend / delivery of shares (stock) 16 May Publication of half-year figures 2012 27 July Publication of trading update for third-quarter of 2012 26 October Geographic spread of shareholdings in 2011 in per cent 4% 2% Belgium 5% France 23% Germany / Switzerland Netherlands 9% Scandinavia 50% 7% United Kingdom United States Approximately two-thirds of the shares in issue are held by institutional investors who hold substantial shareholdings for relatively long periods (value/growth investors). In the geographical distribution a shift can be seen to predominantly Dutch investors. This is not a deliberate policy, but the result of an overall reduction in interest among Anglo-Saxon investors in European stocks, partly as a result of currency developments. Annual Report 2011 17

Connected by the value proposition VALUE CHAIN MANAGEMENT AND VALUE PROPOSITION TenCate applies the value chain management business model. This determines how TenCate based on its position in the value chain creates value, establishes value in products and systems and adds value to customer-focused system solutions. The end-user is central in this process. When a product is developed into a system solution, end-user marketing becomes increasingly important. It is necessary to offer end-users recognisable added value in order to occupy a sustained, strong competitive position in the production and marketing chain. This value proposition is a set of promises which the company must fulfil in order to solve a problem faced by a customer or group of customers. The added value of a product or system is usually based on end-users existing or evolving requirements resulting from legislation and/or regulations. The end-user translates the value proposition into tangible advantages, such as price-performance ratios, delivery reliability and the ability to meet individual requirements. TenCate s main target groups are government bodies, other authorities and representatives of customer groups which determine specifications for protective materials. It is important to have an input into the setting or amendment of standards and regulations. It is also possible to anticipate requirements such as recycling, CO 2 reduction and cost limitation in processes within the rest of the production and marketing chain. SOLUTION PROVIDER Major value drivers at present are price/cost reduction, environmental factors, individualisation, reliability of the solution and the potential for cost savings. Integrated solutions are increasingly being offered, involving forms of co-operation or co-creation in the value chain. The TenCate Defender M product concept is a clear example of co-creation, attractive price-performance ratios and the provision of a reliable solution. > Whereas other suppliers have ideas for product development, TenCate Protective Fabrics can actually turn them into reality. < TenCate Protective Fabrics, Marketing department MARKET TRENDS AND MARKET SELECTION TenCate develops and produces functional materials which have to meet specified rules, standards and customer specifications. TenCate focuses particularly on markets governed by standards on safety and protection of people and their environment. Sustainability and environmental standards are becoming increasingly important and numerous. TenCate is responding expressly to this trend by intensifying its CSR policy. MASS CUSTOMISATION An important new market trend is mass customisation, i.e. providing customised products and services to meet the wishes and requirements of individual users. In the European market in particular there are non-uniform regulations and standards. Products have to be adapted to local requirements. There are also significant differences between, for example, product requirements in the United States and those of the rest of the world. As a global player, TenCate is ideally placed to meet this need. There will even be a growing requirement for individualised products. The developments in the field of inkjet technology are a response to this trend, while economies of scale are being maintained. This new technological development is an important part of TenCate s future value proposition. The technology component is the connecting factor across the company that underpins the selection of markets in which TenCate can occupy distinctive positions. PRODUCT CHAMPIONS The structural focus on added value, both within the production and marketing chain and in customer-focused solutions, will lead to a gradual rise in margins. The aim of this is to create product champions. These systems/solutions have the lowest costs in a particular market segment and offer the highest-quality solution. If the market attributes a great deal of value to a value proposition and the product also has a relatively low-cost structure or generates cost advantages for users, the precondition for a product champion is fulfilled. 18 Royal Ten Cate

FROM PRODUCT TO SOLUTION The provision of solutions fits in with the concept of the value proposition. Using targeted channels in business-to-business and specialist media, TenCate communicates mainly on solutions created with TenCate materials. There is increasing co-operation with other technologies to create multifunctional systems. The solution-focused approach also leads to a gradual change in the sales organisation, with co-operation taking place with market participants and specialists offering various full or partial solutions and operators offering specific access to international markets. It is in the synthetic turf market that the most extensive form of co-operation takes place. This market is witnessing increasing integration within the production and marketing chain to accelerate developments and raise the quality of the overall end-product (the synthetic turf system). Co-operation also takes place in the TenCate Geosynthetics market group with engineering firms, installers and specialist companies, particularly in the fields of monitoring and detection, environment and water management. A key development is the increasing demand for weight-saving and environmental awareness in the automotive industry. TenCate materials (composites) and the technology position contribute to the required solution. The use of new materials will also lead to changes in the production processes. By working with parties in the value chain, TenCate can support and facilitate the required development and sustainability as a material producer. INNOVATION AND CO-CREATION The continuing focus on innovation is part of the value proposition. Here too, there is a joint approach with customer groups, knowledge institutions or value chain partners. Co-creation is becoming increasingly important in order to introduce joint value propositions. TenCate takes part in various co-operation initiatives, such as TAPAS and TPRC (composite solutions), OICAM (Open Innovation Centre for Advanced Materials) and AMMON (Innovation Centre for Advanced Materials Manufacturing in the East of the Netherlands). TenCate Geosynthetics involved in decontamination of Volgermeer Polder The Volgermeer Polder, which was once a landfill site for polluted domestic and industrial waste, has been cleaned up and turned into a nature reserve. The waste has been safely covered with foil, drainage fabric, soil and water. The drainage fabric absorbs the gas that builds up in the landfill waste. With the aid of TenCate Geotube, clean sludge was converted into a natural cap (a layer of clean soil) on top of the seal. TenCate GeoDetect, a geotextile VALUE PROPOSITION For TenCate, the added value with regard to the distinctive position in the value chain lies mainly in: Worldwide access to raw materials, such as fibres; The extensive technological base; Breadth of the product portfolio and branding; The advantages of the various system solutions; Short supply lines to the market (rapid response time) through an international network of production and sales locations; Economies of scale; Knowledge positions and intellectual property; Reliability as a partner (track record, financial soundness, quality image, solution provider); Dedication to innovation and development (often jointly with market participants). system equipped with sensors, is used to monitor the seal on the waste in one of the basins that were created on top of the natural cap. This is the largest soil remediation operation in Dutch history. Annual Report 2011 19

Report of the Supervisory Board ANNUAL REPORT We hereby present the 2011 annual report as prepared by the Executive Board, incorporating the financial statements. The financial statements have been audited by KPMG Accountants NV and were discussed with the Executive Board on 28 February 2012, in the presence of the auditor. The unqualified auditor s report is included in this report in Other information. We are of the opinion that the annual report fulfils the transparency requirements and forms a good basis on which the Supervisory Board can account for its supervision. We propose that you adopt the financial statements, approve the dividend proposal and grant discharge to the Executive Board in respect of its policy and to the Supervisory Board in respect of its supervision. COMPOSITION No changes took place in the composition of the Supervisory Board in 2011. SUPERVISION The Supervisory Board held plenary meetings with the Executive Board on seven occasions in 2011, on the basis of a fixed schedule. It also met independently on several occasions. The meetings discussed the performance of both the Executive Board and the individual directors. The Supervisory Board also assessed its own performance, as well as that of the committees and the individual supervisory directors. All members attended the meetings. During the joint meetings, the Supervisory Board dealt with subjects such as the strategy of the sectors within TenCate, the SWOT analyses, risk management, the various acquisition proposals, the valuation of TenCate s balance sheet and the developments in the recent acquisitions. Particular attention was devoted to developments in the various parts of the Grass group and the improved profitability of the TenCate businesses in the Netherlands. TenCate s financial results were discussed each quarter. The first-half figures for 2011 were discussed in the presence of the independent auditor, KPMG. Particular attention was devoted each quarter to TenCate s debt, investments and working capital. Other subjects included the budgets for 2012 and developments in government and defence budgets in the United States. The Board deliberated independently of the Executive Board on the composition and performance of the Supervisory Board and the performance of the Executive Board, as well as on the remuneration of the Executive Board. Board representatives also attended all consultative meetings of the central works council. They participated in the discussions and took note of the activities and events within the company. CORPORATE GOVERNANCE The Supervisory Board and the Executive Board endorse the main principles of the Corporate Governance Code. The company applies this code in full. The only variations from the code within Royal Ten Cate concern primarily the size and nature of the company. These variations and the associated interpretations better reflect TenCate s operating methods. The variations applied by TenCate can be viewed on the company s website (www.tencate.com). INDEPENDENCE All members of the Supervisory Board are independent within the meaning of the best-practice provisions of the Corporate Governance Code. No TenCate shares or options are held by the members of the Supervisory Board. COMPOSITION OF THE EXECUTIVE BOARD At the shareholders meeting of 21 April 2011, Mr B. Cornelese was appointed as CFO and as a member of the Executive Board, succeeding Mr J. Lock. We are most grateful to Mr Lock for his wide-ranging services and contribution to TenCate over the past years. COMMITTEES The Supervisory Board has two committees: the financial committee chaired by Mr E. ten Cate and the combined Remuneration, Selection and Appointments Committee chaired by Mr F. van Vught. Their task is to analyse subjects within their specific focal areas and to prepare decisions to be taken in the plenary meetings of the Supervisory Board. There were no changes in the composition of the committees in 2011. 20 Royal Ten Cate

FINANCIAL COMMITTEE The Financial Committee met in plenary sessions on four occasions in 2011 to prepare for the discussion of the 2010 annual figures, the 2011 quarterly and half-yearly figures and a number of specific subjects. Consideration was given to matters such as TenCate s results in 2011, the budget for 2012 and the preparations for implementation of the functional income statement as of 1 January 2012. The Committee also discussed the impairment test calculations, debt and working capital, the tax position particularly in the Netherlands, the policy with regard to the audit service, the management letter from the external auditor and the follow-up to his recommendations. COMBINED REMUNERATION, SELECTION AND APPOINTMENTS COMMITTEE The Remuneration Committee met on five occasions in 2011, considering matters such as the assessment of the current remuneration policy. A detailed analysis was carried out using external specialists with the aim of bringing the current remuneration policy for the Executive Board more into line with the remuneration market for companies of a similar type and size. In the view of the Supervisory Board, this would take proper account of the quality of the performance rendered. On the basis of this analysis a new remuneration policy will be drawn up, which will be introduced in 2013 after approval by the General Meeting of Shareholders. REMUNERATION REPORT The 2011 remuneration report, referring to the plan to draw up a new remuneration policy, has been posted on the company s website. The remuneration must not include any incentives which give rise to behaviour directed towards personal interests that conflicts with the company s interests; A scenario analysis is drawn up each year with regard to the possible outcomes of the remuneration policy. The posts of CEO and CFO of Royal Ten Cate were based on Hay levels in 2011. In the case of the CEO, Hay level 30 is applied. The variable remuneration component is a maximum of 50% of the fixed annual salary. In 2011, Mr de Vries was awarded a 10% increment in his periodic remuneration and a variable salary component in respect of 2010 amounting to 50% of his fixed annual salary. He was also granted 60,000 options at an exercise price of 27.38 and 10,000 shares with a value of 26.00 per share. For the CFO, the fixed annual salary is set at Hay level 26. The variable salary component is a maximum of 40% of the fixed salary. In 2011, Mr Lock was awarded a 20,000 increment in his periodic remuneration for the period from January to April 2011 inclusive and a variable salary component of 39% as variable remuneration in respect of 2010. He was also granted 40,000 options at an exercise price of 27.38. The full report can be found on the website under Corporate Governance/documents. The remuneration of the Executive Board is stated in note 55.2 on page 123 of this report. PRINCIPLES OF THE REMUNERATION POLICY The Supervisory Board of Royal Ten Cate applies a remuneration policy in respect of the company s management, based on the following principles: Remuneration of the management is aimed at attracting and retaining senior managers; The remuneration policy must conform to the company s corporate governance policy; The remuneration must reflect the strategic and financial objectives and be to a large extent performance-oriented, with a good balance between short and long-term results and objectives; The Supervisory Board wishes to express its sincere gratitude to the management and employees of TenCate for their commitment and performance during 2011. Almelo, 28 February 2012 Supervisory Board J.C.M. Hovers, Chairman P.P.A.I. Deiters, Vice-Chairman F.A. van Vught E. ten Cate R. van Gelder Annual Report 2011 21

The Boards (as at 1 January 2012) EXECUTIVE BOARD L. de Vries (1951), President and Chief Executive Officer B.J.H. Cornelese (1964), Chief Financial Officer 22 Royal Ten Cate

SUPERVISORY BOARD J.C.M. Hovers (m, 1943) Chairman 1) 2) Commenced in office: 2008 End of current term: 2012 Chairman of the Supervisory Board of C1000 B.V. Chairman of the Supervisory Board of Plieger NV Chairman of the Supervisory Board of Smeva B.V. Chairman of the Supervisory Board of Teleconnect Inc Member of the Supervisory Board of Randstad Groep Nederland bv Former Chief Executive Officer of Stork NV and OCE NV P.P.A.I. Deiters (m, 1943) Deputy Chairman 2) Commenced in office: 1998 End of current term: 2014 Chairman of the Supervisory Board of Fashion Linq B.V., Amersfoort Member of the Supervisory Board of Tootal B.V. Consultant to the European Bank for Reconstruction and Development (EBRD) Former director of Berghaus International Fashion F.A. van Vught (m, 1950) 2*) Commenced in office: 2000 End of current term: 2012 High Level Policy Advisor, European Commission Chairman of European Center for Strategic Management of Universities, Brussels Chairman of the Board of Netherlands House for Education and Research, Brussels Chairman of the Supervisory Board of Medisch Spectrum Twente Chairman of the National Review Committee on Higher Education and Research in the Netherlands Member of the Supervisory Board of Rova NV Former Chairman of the Governing Board and Rector of the University of Twente From left to right: E. ten Cate, F.A. van Vught, J.C.M. Hovers, R. van Gelder and P.P.A.I. Deiters E. ten Cate (m, 1945) 1*) Commenced in office: 2004 End of current term: 2012 Director of Bank ten Cate & Cie N.V. Chairman of the Supervisory Board of Hydratec Industries N.V. Chairman of the Supervisory Board of Rijksmuseum Twenthe Member of the Supervisory Board of Medisch Spectrum Twente R. van Gelder BA (m, 1945) 1) Commenced in office: 2010 End of current term: 2014 Chairman of the Supervisory Board of Atlas Services Group NV Vice-Chairman of the Supervisory Board of SBM Offshore N.V. Member of the Supervisory Board of Heijmans N.V. Member of the Supervisory Board of Holcim Western Europe Ltd Chairman of the Association of Securities-Issuing Companies Former Chief Executive Officer of Heijmans N.V. All members of the Supervisory Board are of Dutch nationality. 1) Member of the Financial Committee. 2) Member of the combined Remuneration, Selection and Appointments Committee. *) Chairman. Annual Report 2011 23

PROTECTIVE FABRICS The year 2011 saw a redoubling of strategic efforts to market worldwide the TenCate Tecasafe Plus product portfolio of inherently flame-resistant (FR) fabrics and knit fabrics for industrial protective clothing. Global demand for FR products has increased as end-users seek the most economical protection in combination with the excellent performance, comfort and quality of the FR fabrics from the TenCate Tecasafe Plus brand. The TenCate Tecasafe Plus product portfolio has been successful in reaching various markets and is continually breaking new ground with new applications, particularly in new geographic markets. Emerging markets are in general open to technological and other innovations, and for this reason TenCate Tecasafe Plus has been well received in new markets in South America, Asia and Australia. Connected through the value proposition

Report of the Executive Board MARKET TRENDS The markets in which TenCate operates have shown steady growth over the successive economic cycles. Even in the current period, which is characterised by an economic downturn and a tightening of government budgets, the markets for TenCate s materials have overwhelmingly shown positive growth. Revenues grew once again in 2011, reaching 1.1 billion (organic + 12%). SAFETY AND PROTECTION The increased attention devoted to safety and protection is contributing to a favourable business climate. Innovation is one of the key driving forces behind TenCate. The company is able to respond effectively to the trend towards budget tightening by developing materials which have the ancillary effect of lowering costs for endusers. Multi-risk safety fabrics are an example of this. TenCate sets itself the objective of developing product champions that can set new standards in terms of cost and performance. TenCate Defender M and TenCate Tecasafe Plus are two key examples. They generated a substantial share of the growth recorded in the 2011 reporting year. WATER MANAGEMENT AND THE ENVIRONMENT Water management and the environment are other important global themes which had a positive effect on developments in the geotextiles market in 2011. The need to carry out measurements of erosion, soil deformation, subsidence in infrastructure works and monitoring of dykes is focusing more consistent attention on the TenCate GeoDetect concept. Major projects were once again carried out in 2011 using the TenCate Geotube concept. Both are examples of a solution-focused system approach in the environmental and infrastructure market. Another important environmental theme which should be mentioned in this context is the reduction of fuel consumption and new environmental standards (reduction in CO 2 emissions) in the aviation and automotive sectors. Demand for composites rose strongly again in 2011. A revolutionary development also took place in the automotive sector, where the need for technological innovation was felt strongly as a result of future government standards on CO 2 emissions. TenCate Cetex, the thermoplastic composites portfolio, consequently attracted growing interest from new markets. A market assessment was initiated in 2011 and preparations were made to position TenCate in these new markets. Recyclable synthetic turf was introduced to the sport and landscaping markets during the reporting period. GreenSource and Sports for Water opened up the possibility of purifying water including for human consumption by means of synthetic turf systems. Both the Cruyff Foundation and FIFA reacted enthusiastically. VALUE CHAIN INTEGRATION IN THE INTERNATIONAL SYNTHETIC TURF MARKET In addition to the growth trends outlined above, the synthetic turf market experienced lagging growth and a consolidation among market participants. TenCate s policy of value chain integration, with the principal aim of drawing attention to the quality and playing characteristics of synthetic turf pitches, was continued in 2011. The market is moving into a more mature phase, in which integrated providers supply a differentiated product portfolio of systems to the market. TenCate is the global market leader, working with a number of selected system providers (TenCate subsidiaries and partnerships) operating in the market on the basis of TenCate components under their own brand name. Since there is a strong relationship with the TenCate brand, TenCate Grass is closely involved in guaranteeing the quality and performance of the supplied systems, so that end-users can be assured of the required quality level. TECHNOLOGICAL DEVELOPMENT INNOVATION On a European scale, TenCate is actively involved in determining the policy on the innovation agenda as chair of the European Textiles Technology Platform. TenCate has also played an active part in the creation of the top-level high-tech systems and materials sector. TenCate has also played an active role within a differentiated segment of this top-level sector in the Dutch aerospace industry. TenCate is considered to be one of the leading innovative producers of high-grade materials in the Netherlands. This position is the result of a consistent focus on innovation as part of the longer-term strategy. At regional level, TenCate has contributed to regional innovation policy in close cooperation with the province of Overijssel, local authorities Annual Report 2011 25

> REPORT OF THE EXECUTIVE BOARD and businesses. Examples of this are the formation of AMMON (Innovation Centre for Advanced Materials Manufacturing in the East of the Netherlands) and the opening of OICAM (Open Innovation Centre for Advanced Materials), which focuses particularly on process innovations. TenCate devotes approximately 3% of revenues annually to innovationrelated projects. This percentage also includes development costs for future revenues, such as in the aircraft industry, which is characterised by long development times. Certain acquisitions (such as that of Xennia Technology) can also be seen as innovation-driven. Subsidies worth approximately 2.4 million were received during the reporting year. TenCate s patent portfolio was again expanded in 2011. 3D WEAVING TECHNOLOGY An important development in 2011 was the market launch of woven systems. The weaving technology enables various system functions to be combined in the top layer, thereby increasing quality without necessarily raising costs for the end-user. Progress is being made with the reuse or recycling of the pitch at the end of its economic life, which also has the effect of reducing costs. The aim is to lower the cost of ownership over the economic life while improving the playing characteristics and increasing the durability of the system. INKJET TECHNOLOGY The European Digitex project was completed at the end of 2011, bringing the introduction of very durable digital finishing by means of inkjet a step closer. New, durable characteristics of technical textiles are coming within reach. At the same time it will also be possible to achieve a fundamental reduction in the water footprint of the Advanced Textiles sector in the next three to five years. TenCate will also be able to achieve a sharp reduction in water treatment costs. TenCate believes that the technology positions and market themes of safety and sustainability will continue to support the company s growth in the longer term. > TenCate aims to break new ground as a result of both technological innovation and product differentiation. < L. de Vries in Textiles on the Move (publication to mark 150 years of De Maere, 90 years of EHTSV / Textores Magistrique and 45 years of VOET) BUY & BUILD STRATEGY The buy & build strategy involves investing in and thereby strengthening the existing product-market-technology combinations, in combination with the complementary acquisitions. Good progress was made in improving the profitability of the Dutch operations in 2011. The main factors are a strengthening of the TenCate Protective Fabrics product portfolio and the implementation of process improvements and cost control. These have resulted in higher added value in revenues and in an increase in the production result. The strongly improved performance in aerospace composites is due to the attraction of demand in combination with improved process control. The geotextiles production site at Almelo (Netherlands) was transferred to TenCate s industrial complex at Nijverdal (Netherlands) in 2011, thereby concentrating all of TenCate s activities in the Netherlands at a single site. Process improvements were also completed. ACQUISITIONS The acquisitions which took place in 2011 were predominantly focused on strengthening the geographic and market positions. The acquisition of Emas Kiara s geosynthetics activities has strengthened the market position in Malaysia and the surrounding countries. GreenFields (90%) and Hellas Construction (30%), with which TenCate already had close commercial relationships, were added to the downstream activities of the Grass group in line with the strategy. The acquisition of the assets of Difco gave the TenCate Protective Fabrics market group access to the Canadian market for safety fabrics, including potential customers in the defence sector. 26 Royal Ten Cate

Some assets of Osiris Inkjet Systems were acquired due to the company s bankruptcy. Osiris has an inkjet technology and patents that are complementary to those of Xennia Technology. Another important factor was that Osiris employees have a combination of knowledge and experience of both inkjet and textile technology that is of interest to TenCate. As part of TenCate Protective Fabrics factory of the future, an analysis will be made of the useful contribution that Osiris technology can deliver. This process innovation fits in with the aim of developing a high-tech production facility which is focused on sustainability and opens up possibilities for the production of smart textiles. The acquisition of 51% of the shares of ABDS ApS at the end of 2011 was important in order to achieve a rapid market launch of the TenCate ABDS active blast countermeasure system (active protection of army vehicles against roadside bombs) in co-operation with army vehicle manufacturers. Although the system in itself does not fit in with TenCate s core business as a provider of high-grade materials, the technology complements the passive protection afforded by TenCate armour materials. The acquisition fits in with the system approach and the solution-based philosophy. A characteristic of this strategic approach is that through its solution-focused approach to the market TenCate comes into contact with other/complementary technologies and companies. The respective business unit consequently takes on a new identity in the market as a solutions provider. Acquisitions as part of the growth strategy also remain important in the longer term. TenCate can then continue to prioritise the composites market, particularly having regard to recent attention devoted to carbon fibre-reinforced plastics) in the automotive industry. Cooperation in protective fabrics TenCate and Beijing Chinamex International Investment Co. Ltd (Chinamex) in Beijing (China) have signed a memorandum of cooperation to develop the Chinese market for protective fabrics. The partners will market flame-retardant fabrics for military use, police and emergency services. China too is witnessing growing demand for personal safety and protection in the workplace and in hazardous conditions. It is important to work with local authorities when defining specifications for various risks. TenCate has developed a protective flame-retardant fabric specifically for the Chinese market under the name of TenCate Fire Dragon. Annual Report 2011 27

REPORT OF THE EXECUTIVE BOARD > Financial performance FINANCIAL PERFORMANCE Analysis of 2011 results by sectors 2011 2010 Difference Organic Of which currency Acquisition/ divestment in millions of euros Net revenues Advanced Textiles & Composites 538.4 448.4 + 20% + 21% 4% + 3% Geosynthetics & Grass 525.9 469.3 + 12% + 2% 3% + 13% Other activities 74.5 66.8 + 12% + 13% 1% 1,138.8 984.5 + 16% + 12% 3% + 7% Operating result before amortisation (EBITA) Advanced Textiles & Composites 70.3 43.8 + 61% + 65% 7% + 3% Geosynthetics & Grass 26.3 31.4 16% 7% 7% 2% Other activities 5.9 9.8 40% 38% 2% 102.5 85.0 + 21% + 27% 6% 0% Amortisation 12.9 10.4 Operating result (EBIT) 89.6 74.6 + 20% Net financial expenses 11.3 10.0 Pre-tax result 78.3 64.6 + 21% Profit tax 18.7 17.9 Result from ordinary operations after tax 59.6 46.7 + 28% Net result from associated companies 1.3 1.3 Minority interest 0.4 0.6 Net result 58.7 46.0 + 28% EBITA margins 2011 2010 Advanced Textiles & Composites 13.1% 9.8% Geosynthetics & Grass 5.0% 6.7% Consolidated 9.0% 8.6% NET RESULT The net result rose to 58.7 million in 2011 (2010: 46.0 million). That marks a record for TenCate, which was due in particular to the strong growth in the Advanced Textiles & Composites sector and in TenCate Geosynthetics. The results of the Grass group were under pressure due to an initial loss of revenues following a reorganisation in the customer portfolio. COMPOSITION OF THE COMPANY The following companies were acquired in 2011: The interest in GreenFields was increased from 32% to 90% in February 2011. GreenFields is a worldwide marketing organisation in the synthetic turf segment. Emas Kiara Industries Berhad was acquired in March 2011 by means of an asset deal. The company is a full-line producer of a wide range of geosynthetic products and solutions focusing primarily on the Asian market. In May 2011, a 30% minority interest was acquired in Hellas Construction, a US synthetic turf production and marketing organisation. 28 Royal Ten Cate

In June 2011, the activities of Difco, a Canadian technical textile organisation, were acquired and integrated into the US TenCate Protective Fabrics organisation. In November 2011, a 51% majority interest was acquired in ABDS ApS. The remaining 49% was acquired in January 2012. REVENUES Net revenues increased in 2011 by 16%, including an organic rise of 12%. The strengthening of the euro against the US dollar produced a 3% negative currency effect. The aforementioned acquisitions in 2011 and those completed in 2010 led to an acquisition effect of 7% on revenues. OPERATING RESULT BEFORE AMORTISATION The operating result before amortisation (EBITA) increased by 21% to 102.5 million. In the Advanced Textiles & Composites sector, EBITA grew by 61%, including a 65% organic rise and a 7% decrease due to currency effects. There was also a small acquisition effect (+ 3%). TenCate Protective Fabrics USA strengthened its position with the US Army and expanded its market share in various industrial markets; Revenue growth in the Advanced Textiles & Composites sector amounted to 20%, including an organic rise of 21%. The currency effect and the effect of acquisitions / divestments amounted to 4% and + 3% respectively. The following activities contributed to this rise: In the United States, TenCate Protective Fabrics generated record revenues from TenCate DefenderTM M and developed a new product champion in TenCate Tecasafe Plus; In Europe and Asia, TenCate Protective Fabrics recorded growth in protective and safety fabrics; Organic growth in Aerospace & Armour amounted to 14%, driven by a rise in aerospace revenues in Europe and the United States and by growth in the armour business in Europe. The revenues of the Geosynthetics & Grass sector grew organically by 2% to 525.9 million. The currency effect and the effect of acquisitions/divestments amounted to 3% and + 13% respectively. TenCate Geosynthetics grew by 13% and 14% respectively in the United States and Europe, driven by infrastructure projects and growth of market share; The acquisition of Emas Kiara caused revenues to leap by 31% in Asia; The revenue growth of the Geosynthetics & Grass sector was due entirely to the TenCate Geosynthetics market group and the acquisition of GreenFields. TenCate organises international conference on protection of military personnel TenCate Advanced Armour and TenCate Protective Fabrics organised an international conference in London in May 2011 on the protection of military personnel in current and future conflicts. TenCate Protective Fabrics and TenCate Advanced Armour develop and produce materials for the safety and protection of personnel and materiel. Defence ministries are the buyers and end-users of protective equipment. Cooperation with defence ministries, the defence industry and knowledge institutions is vital for the development of protection solutions. Former NATO Secretary General Jaap de Hoop Scheffer, a member of TenCate s International Advisory Board, was one of the speakers at the conference. In the Other Activities sector (growth 12%, including 13% organic), TenCate Enbi showed a slight decrease in revenues as a result of lower sales in the US, while Xennia Technology recorded substantial revenue growth. Annual Report 2011 29

> REPORT OF THE EXECUTIVE BOARD > Financial performance TenCate Protective Fabrics Europe achieved a positive result due to strong cost reduction combined with revenue growth; At Aerospace & Armour in Europe, the growth in revenues combined with cost control resulted in a growing contribution to earnings; Aerospace & Armour in the United States once again made a significant contribution to earnings, driven by the aerospace composite activities. EBITA in the Geosynthetics & Grass sector declined by 16%, including a 7% organic decrease and a 7% decrease due to currency effects. The 2% acquisition effect was due to the consolidation of TigerTurf and GreenFields. Substantial growth in the Geosynthetics division was offset by a decrease in earnings from TenCate Grass. TenCate Geosynthetics in the United States took advantage of government investments in infrastructure and increasing exports to Central and South America; At TenCate Geosynthetics in Europe, revenue growth and cost control led to a doubling of the result; TenCate Geosynthetics in Asia achieved higher earnings due to the larger market share following the acquisition of Emas Kiara; The EBITA of the Grass group fell sharply as a result of repositioning within the customer base. The Other Activities sector recorded a positive EBITA of 5.9 million. This represents a decrease compared to 2010. TenCate Enbi showed a slight decrease in its operating result. Xennia Technology also recorded a lower operating result, on substantially higher revenues, partly due to development and patent costs. RAW MATERIAL COSTS Raw material costs as a percentage of revenues including inventory movements remained constant at 50% of revenues. Higher purchasing costs for the main raw materials were passed onto the market after a time lag. PERSONNEL COSTS Personnel costs as a percentage of revenues decreased from 19% to 18%. The increase in production and revenues (+ 16%) was absorbed partly by a moderate increase in in-house personnel (costs + 8%) and partly by a larger number of temporary personnel (costs + 39%). The average in-house staff count increased by 8% (+ 310 FTEs). The increase was caused by higher production volumes at Advanced Textiles & Composites and the acquisition in Geosynthetics (Emas Kiara). The average costs per member of personnel remained unchanged at 43,000. Revenues per member of personnel increased from 225,400 to 237,400 (+ 5%). TAXES The tax rate decreased from 27.7% to 23.9%. The fiscal position improved due to the generation of profit in the Netherlands, more evenly spread profit across the countries and non-recurring tax benefits, particularly investment benefits in Asia. PE price development in / kg 1.8 1.6 1.4 1.2 1.0 0.8 0.6 PP price development in $ / lb 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC 0.4 JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC 2010 2011 30 Royal Ten Cate

> In developing solutions, managers start with a desired outcome for a customer an outcome that could encompass a range of needs. < Nathaniel W. Foote, Jay Galbraith, Quentin Hope, Danny Miller in McKinsey Quarterly # 3, 2001. WORKING CAPITAL The working capital increased in 2011 compared to 2010 as a result of further growth in the Advanced Textiles & Composites sector and the Geosynthetics market group. in millions of euros 2011 days 2010 days Balance at end of previous year 223.9 82 157.0 67 Acquisitions/divestments 2.6 9.3 Organic increase/ decrease 42.1 47.9 Exchange rate differences 8.5 9.7 Balance at end of year 277.1 88 223.9 82 INVESTMENTS Investments were again restrained in 2011. The corresponding depreciation amounted to 35.0 million (2010: 34.5 million) and amortisation amounted to 12.9 million (2010: 10.4 million). The main investment projects in 2011 were: Ten Cate Thiolon bv NL grass texturing machine Ten Cate Thiolon inc USA grass texturing machine TenCate Geosynthetics upgrade of non-woven line Xennia Technology various development projects CASH FLOWS AND FINANCING Due to the improvement in the result, the cash flow initially increased strongly. The detrimental effect of the positive cash flow from operating activities was used for investments in assets and acquisitions / divestments. in millions of euros 2011 2010 Result after tax 58.3 45.4 Depreciation 35.0 34.5 Amortisation 12.9 10.4 Other items, mainly tax accrual 22.2 24.3 Cash flow before increase/reduction in working capital 128.4 114.6 Increase/reduction in working capital 46.4 59.5 Interest/taxes paid 32.7 26.0 Cash flow from operating activities 49.3 29.1 in millions of euros 2011 2010 Tangible fixed assets 21.3 16.2 Development costs and other intangible assets 4.4 5.1 25.7 21.3 Investments 25.7 21.3 Divestments 3.4 0.9 Acquisitions/participating interests 34.8 24.7 Other items 0.7 2.0 Cash flow from operating and investing activities 8.5 18.0 The ratio of net interest-bearing debt to EBITDA (bank definition) was 2.12 at the end of 2011 (covenant = maximum 3.0). Group equity amounted to 469.5 million with a solvency ratio of 46.8%. Annual Report 2011 31

> VALUE CHAINS SECTOR ADVANCED TEXTILES & COMPOSITES END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS PROTECTIVE FABRICS e (VALUE ADDED) RESELLERS PROTECTIVE FABRICS PROTECTIVE FABRICS ISO 14001 (NL) ISO 9001 PROTECTIVE FABRICS We PROTECTIVE FABRICS PROTECTIVE FABRICS OUTDOOR FABRICS e OUTDOOR FABRICS OUTDOOR FABRICS ISO 14001 (NL) ISO 9001 OUTDOOR FABRICS We OUTDOOR FABRICS OUTDOOR FABRICS END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS AEROSPACE COMPOSITES Av AEROSPACE COMPOSITES 2 3 ISO 9001 AS / EN 9100 AEROSPACE COMPOSITES Weaving g n n g AEROSPACE COMPOSITES AEROSPACE COMPOSITES INDUSTRIAL COMPOSITES INDUSTRIAL COMPOSITES ISO 9001 INDUSTRIAL COMPOSITES Weaving g n n g INDUSTRIAL COMPOSITES INDUSTRIAL COMPOSITES ADVANCED ARMOUR n 32 Royal Ten Cate ADVANCED ARMOUR Ve e ISO 14001 (DK) ISO 9001 AS / EN / JISQ 9100 (FR) ADVANCED ARMOUR n ADVANCED ARMOUR ADVANCED ARMOUR

ADVANCED TEXTILES & COMPOSITES KEY FIGURES Advanced Textiles & Composites 2011 2010 2009 2008 2007 in millions of euros unless stated otherwise Revenues 538.4 448.4 397.3 481.0 350.3 Operating result before amortisation (EBITA) 70.3 43.8 31.7 61.5 40.2 EBITA margin (%) 13.1 9.8 8.0 12.8 11.5 Operating result (EBIT) 64.7 38.6 27.0 52.9 38.7 Investments 8.3 4.5 4.2 11.7 17.0 Depreciation and amortisation 15.3 15.2 14.2 17.6 10.8 Net capital employed 314.3 281.7 234.0 286.4 197.6 Staff years at year-end 1,582 1,519 1,340 1,651 1,238 EBITA as percentage of average net capital employed 23.6 16.7 12.0 22.9 22.6 ACTIVITIES The Advanced Textiles & Composites sector consists of the following market groups TenCate Protective Fabrics and TenCate Outdoor Fabrics Safety fabrics for a range of professional groups, as well as protective fabrics for outdoor applications. TenCate Space & Aerospace Composites TenCate Industrial Composites TenCate Advanced Armour Composites including lightweight materials for aerospace and industrial applications; antiballistic materials for personal protection and vehicle armour. BUSINESS MODEL OF THE PROTECTIVE FABRICS MARKET GROUP REVENUES AND RESULTS The Advanced Textiles & Composites sector recorded a 20% increase in revenues to 538.4 million in 2011 (2010: 448.4 million). The increase in revenues resulted mainly from the strong developments in the TenCate Protective Fabrics market group and the TenCate Space & Aerospace Composites market group. BUSINESS MODEL OF THE SPACE & AEROSPACE COMPOSITES AND ADVANCED ARMOUR MARKET GROUPS END-USER MARKETING INNOVATION END-USER MARKETING INNOVATION End-user marketing based on value proposition (cost of ownership) Brand management Risk awareness / safe society Partnerships in emerging markets Inkjet technology / sustainable factory of the future Smart textiles Effective use of internal knowledge (social innovation) Patents Access to market participants and partnerships with OEM relationships in market phase of the TenCate ABDS active blast countermeasure system Independence of fibre suppliers, solutionfocused approach Reputation and qualifications of renowned Market participants TenCate ABDS active blast countermeasure system (Open) innovation through partnerships (TAPAS, TPRC, AMRC) Qualifications for future programmes Process innovations for processing of composites PRODUCT DIFFERENTIATION COST LEADERSHIP PRODUCT DIFFERENTIATION COST LEADERSHIP Worldwide market position, with local product adaptations to local specifications Fabrics based on fibre blends and coated / finished fabrics (product champions: distinctive in cost and quality-performance ratio) Co-makership, products tailored to specific needs Internal production combined with outsourcing delivers flexibility Economies of scale Process innovation Cost control Development of new application areas, particularly for thermoplastic composites Developments in unidirectional (UD) tape technology Development of the value chain particularly in automotive applications for thermoplastic composites Increased efficiency in production Economies of scale Outsourcing and partnerships Development of low-cost solutions (industrial markets) Annual Report 2011 33

> REPORT OF THE EXECUTIVE BOARD > Advanced Textiles & Composites The TenCate Protective Fabrics market group had an excellent year with strong growth in both flame-resistant fabrics for US Army uniforms (TenCate Defender M) and safety fabrics (TenCate TecaSafe Plus) in the industrial market. The TenCate Space & Aerospace Composites market group saw increased demand for aerospace composites (Airbus, Boeing). There were also positive developments in relations with other aircraft manufacturers. The armour composites market in the United States was sluggish. The Advanced Armour market group achieved slight revenue growth. The order position in Europe showed a positive trend, leading to an increase in revenues in the whole vehicle armour business in Europe. TenCate s activities are increasingly moving towards systems that are integrated into vehicles ( survivability systems ). The project-linked nature of revenues is an inherent feature of this market. Demand for composite materials in sectors other than aerospace and armour markets increased; the automotive sector in particular is an important potential growth area. The operating result before amortisation of intangible fixed assets rose by 61% to 70.3 million (2010: 43.8 million). The currency effect amounted to 7%. The EBITA margin rose to 13.1% (2010: 9.8%). The growth of the aerospace market had a positive impact on the utilisation rate of Dutch production capacity, contributing to the strong profit improvement in the sector. TenCate Tecasafe Plus advances strongly in the United States Since its launch in the United States in 2008, TenCate Tecasafe Plus has become the most cost-effective and innovative inherently flame-retardant solution in the industrial safety market. TenCate Tecasafe Plus offers a longer service life at lower cost, greater comfort and better flame protection than industrial flame-retardant fabrics from other suppliers. The protection cannot wash out or wear off. That makes it an excellent value proposition for readyto-wear clothing manufacturers, industrial laundries and end-users. TenCate Protective Fabrics USA has expanded its production capacity to meet the growing global demand for TenCate Tecasafe Plus. TENCATE PROTECTIVE FABRICS AND TENCATE OUTDOOR FABRICS MARKET POSITION AND STRATEGY TenCate Protective Fabrics is the market leader in America and Europe in the field of protective fabrics. The constantly widening product portfolio is now being marketed worldwide. TenCate focuses on four markets: defence and police industrial safety, firefighting and emergency response services, such as healthcare industry. The products offer protection against a range of risks in the workplace, for example from chemicals, fire and static electricity. TenCate has acquired leading positions in various segments of this market, for which specific concepts have been or are being developed. TenCate Defender M materials are the most significant of these. The market for professional wear and work clothing is highly regulated, with governments enacting labour legislation specifying safety standards in certain risk areas. TenCate customers are ready-to-wear clothing producers and industrial clothing laundries offering a full range of services for end-users. TenCate focuses on industrial markets, firefighting, emergency services and the healthcare sector. New products, such as TenCate Tecasafe Plus for the American and Asian markets in particular, are playing an important role in the continuing market development, both domestically and internationally. The concepts developed by TenCate for these markets are very 34 Royal Ten Cate

promising, as the products are ideally positioned, with TenCate combining four essential characteristics: affordability, comfort, protection and long service life. Defence applications are a highly successful development. TenCate Defender M is considered to be the US standard for uniforms with flame-resistant protection. As a result, this product is one of the major pillars underpinning TenCate s strong growth in defence markets at home and abroad. As part of TenCate Protective Fabrics, the TenCate Defense & Tactical business unit on the one hand responds to the principle of end-user marketing with the TenCate Defender M platform (the development of specifications in close co-operation with various end-users) and on the other hand serves as a vehicle for the development of a worldwide sales strategy. This strategy is focused on expansion both in geographic terms and with regard to other defence applications (product differentiation). TenCate s positioning is supported by an industrial branding policy based mainly on the quality and functionality of high-grade protection. TenCate supplies unique solution-focused concepts (systems). These have proved successful in use with the US Army. TenCate has a broad technological base and access to the worldwide commodities market as a result of its long-term focus as a global player on this niche market. In addition to activities and strong market positions in the US and Europe, TenCate has established a joint venture in Thailand for the production of safety fabrics for the Asian market and for further development in this region. In 2011, the strategic efforts were scaled up to market the TenCate Tecasafe Plus product portfolio worldwide. Global demand for TenCate Tecasafe Plus is growing. Various steps have been taken to respond to this growth, including an increase number of variants in the collection. End-users want the most economical protection combined with the excellent performance, comfort and quality of the fabrics. TenCate Tecasafe Plus has become the preferred fabric on many continents. TenCate Tecasafe Plus has also been well received in various new markets, such as South America, Asia and Australia. The increased service level is a key point. In order to meet the demand for superior flame-retardant fabrics in South-East Asia, TenCate has built up inventories to ensure that the product is immediately available. TenCate has also stationed additional personnel in Asia to guarantee a high level of customer attention. SUSTAINABILITY TenCate Protective Fabrics endeavours on the one hand to make target groups aware of protection concepts and multi-risk solutions and on the other hand to influence standards and specifications in order to offer end-users the utmost security and protection. The market group regularly works closely with international customers in the chain (including in the laundry sector) and with industry organisations, with the aim of reducing the impact on the chain. This can be achieved by means of technological innovations and R&D projects, thereby increasing TenCate s involvement in the setting of specifications in tenders. That is being done successfully with customers in sectors such as the petrochemical industry and the firefighting market. In defence organisations, a focus is on personal protection of military personnel to prevent burns and serious fire injuries and high social costs for rehabilitation and other measures (social interest). GENERAL PERFORMANCE The main contribution to the strong revenue growth in 2011 came from the TenCate Defender M and TenCate Tecasafe Plus products. The markets developed favourably for both product groups, including outside the United States and Europe. The foundation for this was expanded during the reporting year. A positive factor was that the exemption from import restrictions for the United States (Berry Amendment) for foreign fibres was extended to 2015 at the beginning of 2011. This exemption became permanent at the end of 2011. In the United States and Canada, the market position and production activities were expanded with the acquisition of the assets of Difco Performance Fabrics in Montreal (Quebec, Canada) in the second quarter of the financial year. TenCate generally witnessed strong interest in new concepts relating to fire-resistant fabrics in 2011. TenCate Tecasafe Plus and TenCate Defender M are based on fibre blends to meet the precise specifications of customer groups. The value proposition lies primarily in the combination of unrivalled performance, optimum wearing comfort and economic prices compared to products based on 100% aramid fibres traditionally used in many markets. Together with TenCate Defender M, the TenCate Tecasafe and TenCate Tecashield ranges make up a complete portfolio of multi-risk safety fabrics for emergency response and defence applications. Annual Report 2011 35

AEROSPACE COMPOSITES In addition to composite for the tailpiece and elevator, TenCate Advanced Composites also supplies composite for the floor components in the Gulfstream G650. Fokker Aerostructures incorporates the TenCate Cetex laminate into two floor types: nonpressure floors that must be able to bear an average shear load of freight, passengers and crew in parts of the cargo hold, the cabin and the cockpit. And pressure floors that are subject to high pressure and low temperatures during the flight, as part of the primary structure of the aircraft. The floor components provide structural performance and, thanks to the toughness of the laminate, great resistance to damage. Yet this composite material from TenCate is also attractively priced due to cost-efficient processing, such as thermofolding edges and welding inserts. The nonpressure floor components demand both lightweight material and great impact strength against damage. Preservation of the tensile strength of the thermoplastic floor panels is much greater than that of traditional metals and even of thermoset composites. Connected through the value proposition

> REPORT OF THE EXECUTIVE BOARD > Advanced Textiles & Composites TenCate Tecasafe Plus has built up such brand awareness that it now occupies a leading position in the global market for industrial safety fabrics. In the case of TenCate Defender M, at least ten wearing trials have been conducted among large army units outside the United States. Decision-making processes in defence markets on the acquisition of new material also involve the setting of ultimate specifications and are related to government budgets. Nevertheless, the United States will remain by far the most important defence market in the near future, despite expected budget cuts by the US defence ministry. The use of TenCate Defender M in products for police and firefighters, as well as industrial applications, will also lead to an increase in revenues. Although the number of US military personnel deployed in Iraq and Afghanistan is decreasing, there is gradual growth in other armies and a wider geographic spread of revenues. This is illustrated among other things by the developments below in 2011. One of the orders, in this case in the defence sector, was from the Italian producer Aero Sekur for the supply of inherently flame-resistant TenCate Defender M fabrics for the Italian Soldier of the Future programme. The aim of this programme is to modernise the equipment of Italian infantry soldiers. This order is an important benchmark. All NATO countries have a Soldier of the Future programme. Flameresistant clothing is expected to play a significant role in future tenders. Since May 2011, TenCate has been involved in extensive wearing trials conducted by the Australian Defence Force in Afghanistan. TenCate Protective Fabrics USA has supplied the TenCate Defender M fabric for this purpose. The uniforms are printed with the Multi Cam camouflage pattern. An new order was also received for TenCate Defender M in November for 10,000 additional uniforms as part of an ongoing wearing trial of army uniforms by the Australian armed forces. In September, TenCate signed a memorandum of cooperation with Beijing Chinamex International Investment (Chinamex) to develop the Chinese market for protective fabrics. The partners aim to market flame-retardant (FR) products for uniforms for the police and emergency services. TenCate has also signed a co-operation agreement with Samil Spinning in Seoul, South Korea. The partners aim to expand the TenCate Defender M product portfolio in the South Korean army and police market. At the beginning of the fourth quarter, TenCate Defense & Tactical received a major order from the US Army for new TenCate Defender M fabrics. These have been specifically designed to meet new enduser requirements for improved performance in military pants. The new fabrics, including TenCate Defender M stretch, are intended to improve comfort and durability. Two new contracts were also awarded for the purchase of the Army Combat Pant (ACP). In North America, TenCate is also supplying flame-resistant fabrics for two successful tenders in the Canadian military market. The first is being used by the Canadian Air Force. The second concerns TenCate Campshield FR interior fabric for use in tents for all Canadian army units. The firefighting market in the US, the second important market, remained sluggish in 2011 due to budget cuts among local authorities. TenCate is nevertheless ideally positioned to respond to changing market demand, due to the increasing need for cheaper and better solutions, such as the use of TenCate Defender M in firefighters protective clothing. This product has patented, inherently flameresistant characteristics which will not wash out or wear off and it is ideal for use as a thermal lining for firefighters protective clothing. There is also an increasing focus on the firefighting market outside the US. TenCate Outdoor Fabrics experienced a stable revenue trend in 2011 and thus retained its leading position in a mature market for inherently flame-resistant fabrics. TenCate Protective Fabrics and Xennia Technology made joint progress with digital textile finishing in 2011. Initial production is due to start at Nijverdal during the current year. This is an innovative way to print and/or finish technical textiles efficiently and to a very high standard, allowing improvements to existing products and the development of new products with new functionalities. Annual Report 2011 37

> REPORT OF THE EXECUTIVE BOARD > Advanced Textiles & Composites OUTLOOK FOR TENCATE PROTECTIVE FABRICS 2012 will not be comparable to 2011, because total annual sales to the US Army are expected to decrease. There will also be a different breakdown of sales over the quarters in view of the project-based nature of the markets. Nevertheless, the focus in the US on possible foreign conflict zones and terrorism remains strong, with a great deal of attention paid to personal protection. The same applies to other army units. TenCate will devote full attention to new markets and geographic areas in which the company has yet to build up any substantial positions, such as Asia, South America, China and India. TenCate has an excellent basis for this. Continuing market and product development is expected to deliver long-term growth in protective fabrics worldwide. Protection solutions in 3D video clip TenCate Protective Fabrics has developed a 3D video clip to illustrate one of the protection solutions it provides for firefighters. TenCate Protective Fabrics has developed TenCate Tecasystem Millenia 450 for the protective clothing worn by firefighters. This is a multilayered system that provides protection and enables a firefighter s suit to be produced with a weight of just 2.5 kilos. The system is extremely comfortable to wear, with an optimum composition of the different layers. The clip can be viewed on the TenCate Protective Fabrics website and on YouTube. TENCATE SPACE & AEROSPACE AND INDUSTRIAL COMPOSITES AND TENCATE ADVANCED ARMOUR MARKET POSITION AND STRATEGY TenCate is one of the leading companies in the field of armour materials for vehicle armour (armour composites) and space and aerospace composites. TenCate also focuses increasingly on special industrial and other applications for composites, for example in the automotive industry and the energy sector. These are composite materials and compounds which replace steel, titanium and aluminium, make a major contribution to weight saving and have better functional characteristics. TenCate s strategy is aimed mainly at securing a leading technological position, developing material science, knowledge of production processes in the industrial chain and direct access to end-markets and OEMs (original equipment manufacturers), partly on the basis of integrated concepts and systems. Qualifications are crucially important in order to operate in future systems programmes in these markets. At present, the largest proportion of sales of composites is related to ballistic protection (armour composites), although space and aerospace applications are increasing in terms of relative importance. TenCate Advanced Armour provides an integrated solution for protection against the consequences of roadside bombs and the associated pressure wave, fragments and flames. TenCate Advanced Armour is the global market leader in (complex) concepts for vehicle armour. These increasingly have to be supplied on an integrated basis. That requires the maintenance of in-house design and production facilities, including in the local market. TenCate therefore operates from sites in the United States, the United Kingdom, France, the Netherlands, Denmark and India. A wide geographic presence is required, together with an extensive, innovative and constantly developing portfolio (Active Armour Systems). The American market is the largest. In Europe, the United Kingdom and France are important markets. Customers include particularly large industrial conglomerates in the defence industry, producers of trucks, aircraft, helicopters etc. and the related suppliers. They are responding to increasing threat levels. Governments (defence ministries) determine the specifications. TenCate operates as a single group worldwide and with a pan- 38 Royal Ten Cate

European armour organisation, to the extent permitted by the defence authorities, for the exchange of knowledge and solutions. TenCate occupies an important position as a (fibre-)independent producer of composites and processes a range of fibres including aramid, glass, carbon and HPPE supplied by third parties. TenCate offers a wide range of products, systems and solutions in this market. An important aspect of these defence and other markets is their project-based character. The global presence, the breadth of the product portfolio and the conceptual approach are important strengths of the organisation. These are increasingly being exploited both within the group and with other TenCate market groups. This will give further substance to the system approach and achieve market synergy. In India there is now a joint marketing and sales organisation for TenCate Protective Fabrics and TenCate Advanced Armour. There are also increasingly joint presentations at trade fairs and conferences as well as joint marketing, strengthening the TenCate proposition in the defence market. This concerns the general protection of personnel and materiel based on fabrics and armour composites. A conceptual approach to the theme of protection is more effective than a more product-focused, individual approach. In this regard the security system to protect against the impact of roadside bombs (TenCate ABDS active blast countermeasure system) can be a complementary system component that strengthens the overall value proposition. In the aviation market, composite material is used in interior and structural components. The scope for the use of aerospace composites is still fairly limited overall, but is growing considerably. New generations of aircraft are providing a strong impetus for growth. TenCate Space Composites has a leading role in composite materials for satellite programmes in the United States. In the aviation industry, TenCate Aerospace Composites operates in the field of civil aviation and business jets, as well as in military aviation. The main civil aviation customers are Airbus and Boeing and their direct suppliers. The market is being further developed on this basis. The TenCate Cetex material now occupies a strong position. Among other products, the leading edge of the wing (J nose) and the engine intakes of the A380 are manufactured from this lightweight and strong (noise-reducing) material. TenCate Cetex material is also being used in the Boeing 787. In many cases, for reasons of confidentiality, it is not possible to provide specific information on the components manufactured with TenCate materials. SUSTAINABILITY TenCate Advanced Composites and TenCate Advanced Armour actively pursue a policy of persuading customers such as the aircraft and automotive industry and military and civilian authorities of the sustainability (recyclable, fuel-saving and noise-reducing) and safety (fire-retardant, bullet- and fragment-resistance) characteristics of a wide range of thermoplastic composites. The aircraft industry in particular is currently experiencing a major development by moving from secondary to primary structural components made of composites in aircraft. TenCate Outdoor Fabrics presents the tent of the future In the Outdoor Living in the Future pavilion at the annual Camping and Caravanning Show in October 2011, TenCate Outdoor Fabrics joined forces with the European camping and caravanning industry and Jaarbeurs Utrecht to demonstrate the potential functionalities of tents in the future. The demonstration included projections on five tents made of white TenCate All Season Residential tent fabric. The new functionalities are self-cleaning, insulation, mosquito repellence, high visibility and glow-in-the-dark capability using sunlight absorbed during the day. New manufacturing techniques will make these functionalities possible in the next five years. Annual Report 2011 39

PROTECTIVE FABRICS The naval protection of sea-lanes, troops, ports and shore installations, and the defensive purpose of the navy to frustrate seaborne projection-of-force by enemies demand that naval forces wear the most flexible yet protective uniforms. Knowledge and technological innovations from TenCate ensure optimally protective crew garments, for naval personnel on the launching pad to the seamen on the lower decks. During 2011 TenCate Defender M in the colour black has been supplied to the Norwegian Defence Logistic Organisation. This colour is the result of ongoing product development based on specific customer needs. Thanks to patented technology and the success of TenCate Defender M developed by TenCate Protective Fabrics in the US the Research & Development team in the Netherlands, created a new composition in 2010. As a result, this protective fabric is available in the colours dark blue and black. Thanks to this innovation, this protective fabric can also be used for other markets, such as marine corps and police forces, who principally wear the colours black or blue for their operations. Connected through the value proposition

> REPORT OF THE EXECUTIVE BOARD > Advanced Textiles & Composites In the longer term, the trend towards lightweight composites materials remains positive, in view of the superior characteristics. The development co-operation in the Dutch aviation cluster with both Airbus (TAPAS consortium) and Boeing (TPRC) anticipates this trend. These joint ventures underline the importance of the joint aim of achieving strong growth in the share of composites used in aviation, partly by improving processing technologies and widening applications. TenCate is focusing in particular on special industrial and other applications for composites, for example in the automotive industry, the oil and gas sector, wind energy, high-grade sport applications, the medical sector, mechanical engineering and construction. TenCate Industrial Composites is a new part of the market group alongside Space & Aerospace Composites and Advanced Armour. GENERAL PERFORMANCE OF TENCATE SPACE & AEROSPACE COMPOSITES The TenCate Aerospace Composites market group achieved solid revenue growth in 2011 as a result of the increased production volume for the Airbus A380, the A350 and the Boeing 787. The growth of volumes in aerospace composites had a positive effect on the capacity utilisation rate, particularly in the Dutch production facilities. TenCate Advanced Composites in the United States has transferred its activities in Morgan Hill (California) to an adjoining site. Consequently three sites are now concentrated at a single location, allowing more efficient operation and providing 40% more production space. This investment was prompted in part by growing demand for durable, lightweight composite materials in both the traditional composites markets (aerospace and space) and other industrial sectors. The new site houses the production of thermoplastic composites, R&D laboratories and offices. The Morgan Hill location mainly produces composites for the aerospace industry. The carbon-free production of radar domes, for example, has been expanded at this site. The Morgan Hill site was also one of the recipients of a JEC Composite Innovation Award 2011 for the use of thermoplastic composites in aircraft seats from Cutting Dynamics. Positive developments arose from the longterm supply contract with Boeing for components for the Boeing 787 Dreamliner. TenCate is also supplying composite materials including TenCate Cetex for other features of this aircraft. TenCate Advanced Composites in the United States supplies customerspecific prepreg products. As a leading developer and producer of thermohardened and thermoplastic prepregs, TenCate supplies hightech materials to various markets. These include aerospace, shipping, infrastructure and oil and gas extraction. Towards the end of the year, the production sites for prepregs in Morgan Hill and Fairfield were certified in accordance with the AS9100: 2009 Rev C quality standard. The certification also relates to CCS Composites. This American subsidiary of TenCate supplies compression moulding components to the aviation industry. As well as volume growth in aerospace composites, TenCate Advanced Composites in Europe also experienced the positive effect of a contract to supply TenCate Cetex carbon laminates for use in the new Airbus A350 XWB and other EADS applications. Under this contract, deliveries of TenCate Cetex began to various Tier 1 and Tier 2 partners of Airbus producing fuselage shells and components for the A350 XWB. The TenCate Cetex. material will be used in the reinforcing structure for the fuselage of the A350 XWB. The thermoplastic material is already being used in the Airbus A380. One of the advantages of using thermoplastic composites is the possibility of large-volume series production, enabling the sector to obtain the necessary cost benefits. TenCate Advanced Composites and Toray Industries (Tokyo) have signed an agreement to supply carbon fibres to TenCate for the production of thermoplastic TenCate Cetex RTL composite materials up to 2015. These fibres are used for the growing number of composite laminates which TenCate produces for the aviation industry. In the future, it will also be possible to use strong, lightweight composite materials derived from TenCate Cetex technology in applications in the automotive industry. With this development TenCate will enter a market with substantial future volume potential. Slight growth was recorded in the military aviation industry. The commercial aerospace sector (including communication and navigation satellites) in the United States and Europe continued to show steady growth in composite materials. Unmanned aerial vehicles (UAVs) for army use and the satellite industry remain an important growth market for TenCate. These market positions were further strengthened in 2011. Annual Report 2011 41

> REPORT OF THE EXECUTIVE BOARD > Advanced Textiles & Composites GENERAL PERFORMANCE OF TENCATE ADVANCED ARMOUR The armour composites market in the United States was sluggish in 2011, although the sales volume continued to rise. There was some price pressure, however, particularly in the field of personal protection, which is more of a volume market. By contrast, developments in Europe, where TenCate has been operating for a number of years as a system integrator for vehicle armour, were positive. The vehicle armour market is moving increasingly in the direction of new system programmes. These systems are fully integrated into vehicles (survivability systems) and the programmes usually have a turnaround time of several years, as in the case of the major Eurocopter project (NH90). The contract for this programme contributed positively to the revenue trend. Expectations for the market as a whole remain structurally positive. Developments in these markets should be viewed over a longer period. At the end of 2011, TenCate reached agreement to acquire the Danish company ABDS ApS. This acquisition follows the successful testing and simulations with the TenCate ABDS active blast countermeasure system. These tests were carried out by TenCate Advanced Armour and ABDS in collaboration with the Danish Defence Acquisition and Logistics Organisation using improvised explosives on the vulnerable underside of a 15-tonne armoured personnel transport vehicle with the fully integrated TenCate ABDS active blast countermeasure system. These targeted vehicle tests are an essential part of the actual implementation of the system. Innovation award for composite tipper In March 2011 the Fiby composite tipper won the Innovation Award in the transport category at the JEC Composites Show in Paris. The international Innovation Award is considered to be one of the most prestigious in the world of composites. The loading body will be used to transport loose materials such as gravel, sludge, sand, agricultural crops, animal feed, industrial waste and asphalt. The benefits of synthetic material are its considerably lower weight and its insulating properties. When the loading body is empty, the user will save a lot of fuel, and a lighter body means the vehicle can carry a heavier load. This acquisition has now been completed. The company is being integrated as TenCate Active Protection ApS. TenCate s full ownership provides effective support for the market introduction through manufacturers of army vehicles. The acquisition was completed after the transaction was approved by the Danish authorities at the beginning of 2012. The market implementation of the system will take place in the course of 2012-2013. On the basis of the good results obtained so far from the testing and simulations, it is clear that the market has a definite interest in various vehicle programmes. Innovative integration concepts have also been designed for a series of combat and tactical military vehicles. Ballistic protection systems were supplied for the second of three Danish frigates in the Iver Huitfeldt class at the end of 2011. Thanks to TenCate s modular approach to armour production for armour solutions, this was completed well within the specified time and budget. Here too there was close collaboration with the Danish DALO. TenCate adopts a modular approach to armour production and aims for flexible design solutions. This is possible thanks to the TenCate Ceratego and TenCate Liba ceramic armour systems. Both afford excellent protection against a wide range of threats in a lightweight, modular package. Due to the large number of projects for the protection of both vehicles and naval vessels, the positive collaboration between the Danish army and TenCate has been strengthened. 42 Royal Ten Cate

TenCate Advanced Armour EMEA in Primarette (France) took occupancy of a new production site in the second half of 2011. The building has been specifically designed for the production of armour composites for the aerospace industry, including in consultation with Eurocopter. The Primarette site develops and manufactures both highgrade aerospace applications and industrial applications (vehicle and personal protection). Armour solutions for aerospace increasingly have to be supplied on an integrated basis as ready-to-install kits comprising various panels. This means design, storage, production and service and support facilities have to be at a single site. This has also led to the alignment of quality management systems within the group in order to meet the high demands of aircraft manufacturers. OUTLOOK FOR TENCATE SPACE & AEROSPACE COMPOSITES AND TENCATE ADVANCED ARMOUR TenCate is the market leader in the American and European markets for vehicle armour based on lightweight composites. The longer-term market outlook remains consistently positive. Annual sales of armour products depend greatly on individual projects, for which governments make budgets available. The armour systems activities for aerospace are making a growing contribution to revenues. TenCate Advanced Armour and TenCate Protective Fabrics took the initiative of organising an international conference in London on 23 and 24 May on the protection of military personnel in current and future conflicts. The aim was to show how TenCate translates its commitment to the protection of soldiers into protection solutions. TenCate Advanced Armour presented its lightweight protection solutions in September at Defence & Security Equipment International, the international trade fair for defence and safety equipment, in London. An advanced technology for the production of three-dimensional armour based on TenCate Liba was also exhibited, involving composite-based armour solutions. These enable steel hinge components in armoured vehicles to be replaced by lighter, stronger composite materials. TenCate also demonstrated protection solutions for various threats, such as anti-tank weapons and rocket-propelled grenades (RPGs) and roadside bombs, lightweight solutions for personal protection, flexible ballistic protection systems for vehicles, modular and durable armour solutions for naval vessels and lightweight ballistic protection solutions for aircraft. Concentration of activities at TenCate Advanced Composites USA At the end of 2011, operations at three TenCate Advanced Composites USA sites were brought together in a new production annex office building in Fairfield (California). This concentration has optimised operational management, allows further improvements in product quality and cost efficiency and can support the expected growth in the composites and aerospace market. TenCate Advanced Composites USA manufactures composites and components for the military and commercial aviation industry and satellites. One of the improvements is the possibility of carbon-free production of radomes (domes to protect radar antennas in ships and aircraft, for example). The group also has carbon fibre-free production areas at the Morgan Hill site. Annual Report 2011 43

ADVANCED COMPOSITES In early 2011, a group of companies from the province of Overijssel, the Netherlands, recorded a world first with the development of a lightweight composite tipping body for the transport sector. The new Kipper is lighter, stronger, more energy efficient and quieter than the current metal tipping bodies. The trailer will be constructed of different layers of insulating composites from TenCate. Composites are fibrereinforced plastics that are four to six times stronger than traditional materials, such as metal. These composite materials allow a significant weight reduction to be achieved, which has a positive impact on the fuel consumption, range and payload of the truck. In addition, the composite laminate can also be used as an insulating layer, for example to maintain the temperature of hot tar in a trailer. This also saves energy. Connected through the value proposition

> REPORT OF THE EXECUTIVE BOARD > Advanced Textiles & Composites The armour projects usually form part of programmes to upgrade and modernise army vehicles, in order to counter new threats and achieve a greater degree of mobility. These programmes will continue to take place in the future, partly in view of the trend towards offering a higher degree of protection for troops in crisis areas and achieving savings by means of modern, lightweight composites which reduce fuel and other costs. > The longer-term market outlook for vehicle armour based on lightweight composites remains consistently positive. < TenCate Protective Fabrics and TenCate Advanced Armour are increasingly collaborating to raise the effectiveness of their international marketing and sales. Collaboration in personal protection has already proved effective in a number of cases. There is also a positive trend in the structural demand for TenCate composites in the civil aviation industry. This is partly a consequence of the qualifications which the company has obtained. During the current year, TenCate should continue to benefit from long-term contracts with large international aircraft manufacturers. The outlook for the military aviation market, and for satellite programmes, remains positive. Annual Report 2011 45

> VALUE CHAINS SECTOR GEOSYNTHETICS & GRASS END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS GEOSYNTHETICS Wa s (VALUE ADDED) RESELLERS GEOSYNTHETICS GEOSYNTHETICS FM HPR (USA) ISO 9001 GEOSYNTHETICS Weaving g s s GEOSYNTHETICS GEOSYNTHETICS s END-USER MARKETS CUSTOMERS SUPPLIERS RAW MATERIALS GRASS (VALUE ADDED) RESELLERS GRASS GRASS We FM HPR (USA) ISO 14001 (NL) ISO 9001 GRASS We GRASS GRASS Safety assurance relates to: SAFETY SUSTAINABILITY QUALITY Sustainability assurance relates to: Quality assurance relates to:

GEOSYNTHETICS & GRASS FIGURES Geosynthetics & Grass 2011 2010 2009 2008 2007 in millions of euros unless stated otherwise Revenues 525.9 469.3 392.1 497.8 468.3 Operating result before amortisation (EBITA) 26.3 31.4 16.8 37.8 30.4 EBITA margin (%) 5.0 6.7 4.3 7.6 6.5 Operating result (EBIT) 20.8 27.7 13.8 34.8 28.3 Investments 12.2 9.9 9.0 29.0 44.9 Depreciation and amortisation 28.9 26.2 25.3 23.0 20.0 Net capital employed 429.5 380.8 332.7 427.4 354.8 Staff years at year-end 2,160 2,128 1,795 2,129 2,053 EBITA as percentage of average net capital employed 6.2 8.2 4.1 8.8 8.9 ACTIVITIES The Geosynthetics & Grass sector consists of the following market groups: TenCate Geosynthetics Fabrics, grids and non-wovens for solutions and applications for infrastructure projects and the environmental market, as well as industrial fabrics for various applications, such as agribusiness, sport and recreation. TenCate Grass Synthetic turf components and systems for applications such as football, hockey and other sports pitches, as well as landscaping. In addition to the companies engaged in the production of fibres and carpet backing (upstream activities), the Grass group comprises a growing proportion of system development and marketing businesses (downstream activities). REVENUES AND RESULTS The Geosynthetics & Grass sector showed a 12% rise in revenues to 525.9 million (2010: 469.3 million). The operating result before amortisation of intangible fixed assets fell by 16% to 26.3 million (2010: 31.4 million). EBITA fell partly as a result of rising raw material costs in TenCate Geosynthetics in the first half of the year (Middle East crisis) and the excessively low rate of capacity utilisation in the upstream activities of the Grass group. The geosynthetics activities as a whole put in an excellent BUSINESS MODEL OF THE GEOSYNTHETICS MARKET GROUP BUSINESS MODEL OF THE GRASS MARKET GROUP END-USER MARKETING INNOVATION END-USER MARKETING INNOVATION Alliances with market participants Local collaboration with partners in emerging markets Geographic spread of distribution Positioning of sustainability (water management, environmental solutions, low carbon footprint). Development of relationships in the Chinese market TenCate GeoDetect solutions Dewatering and filtration technology Biopolymers Alliances with market participants (downstream activities) Geographic spread of distribution Positioning and advantages of the sustainability aspect (water management, recycling) Increased quality awareness of end-markets Market positioning (GreenFields, Edel Grass, TigerTurf) Relationships with sports federations Fourth-generation developments Weaving technology Biomechanical characteristics (research project with third parties) Product and system warranties PRODUCT DIFFERENTIATION COST LEADERSHIP PRODUCT DIFFERENTIATION COST LEADERSHIP Continuing development of new products (innovation awards) Focus on water management, environment and infrastructure Economies of scale (volume products) Cost leadership System components Powered by TenCate Optimum support from downstream activities for development of new system concepts Reduction of total cost of ownership of sports pitches Economies of scale Cost leadership Annual Report 2011 47

> REPORT OF THE EXECUTIVE BOARD > Geosynthetics & Grass performance in 2011. The EBITA margin of the Geosynthetics & Grass sector fell to 5.0% (2010: 6.7%). This margin is well below the required level (minimum 10%). This also gives rise to logistical and pricing advantages. The market group has three business units: infrastructure, water & environment and industrial fabrics. TENCATE GEOSYNTHETICS MARKET POSITION AND STRATEGY TenCate is the world s largest producer of high-strength geosynthetics (grids, liners, fabrics and non-wovens) for infrastructure, the construction industry and the environment. The portfolio also comprises materials (industrial fabrics) for applications in the agriculture, horticulture and leisure sectors. On the basis of the business model, TenCate operates close to the market with production sites in Europe, the United States and Asia. TenCate Polyslope system provides avalanche protection An avalanche barrier has been built north of Innsbruck (Austria) made up of five parallel concrete discs flanked on both sides by reinforced slopes made of TenCate geosynthetics. This structure breaks the force of avalanches and regulates the large volume of meltwater in the spring. The avalanche barrier is 23 metres high and has a 22-metre-wide base. Traditional solutions are not costeffective; the costs of such a structure and the transportation of building materials in this difficult terrain would be too high. Moreover, a natural look is preferable. TenCate Polyslope is an environmentally friendly and attractively priced system that allows rapid growth of vegetation. TenCate aims for a system approach focused on solutions. Geosynthetics form part of the overall structure and deliver functional added value. The marketing of more complicated system solutions can often be accelerated with strategic partners. For example, TenCate has been co-operating technically and commercially since the beginning of 2010 with Roctest, the world s largest manufacturer of fibre optic sensors for civil engineering. This enables customers to benefit from innovative solutions in real-time monitoring with geotextiles. It provides detailed information on possible deformations: displacements, soil erosion, settlement and other changes in features such as inclines, slopes, walls, roadways and railway and dyke bodies. SUSTAINABILITY The market is devoting increasing attention to the positive environmental aspects of geosynthetics. The use of environmental arguments and the reduction of negative environmental effects are therefore receiving greater emphasis in the promotion, design and specifications. TenCate Geosynthetics endeavours to convince civil engineering and water management customers of the positive impact of geotextiles on sustainability thanks to their limited CO 2 footprint. Alternatives to TenCate geosynthetics are usually traditional materials such as concrete, stone and steel, which often have to be transported over long distances. In the case of geosynthetics, by contrast, locally available materials (sand, sludge) are used. In the case of land reclamation (hydraulic filling with sand) there is usually considerably less need for dredging. That has positive environmental effects. The R&D department is working on future bio-based products. The first CO 2 footprints for TenCate and competing products became available in 2011 following the introduction of a product ecotool. Customers are responding enthusiastically to this development. GENERAL PERFORMANCE TenCate Geosynthetics achieved strong organic revenue growth worldwide in 2011. This was partly due to the introduction of new products in markets for soil stabilisation and strengthening and growing demand for sustainable environmental concepts, water management and maritime solutions. The market share increased 48 Royal Ten Cate

worldwide. Revenues trended positively across all continents, with increases in the relative share in South America and Asia. The detrimental impact of rising raw material costs in the first half of the year was absorbed by price rises. The Geosynthetics group focuses actively on product development and a solution driven approach to the market. The TenCate Geotube and TenCate GeoDetect systems in particular are gaining traction as end-users are now devoting increasing attention to CO 2 -friendly, sustainable environmental solutions and detection systems (leak, erosion and deformation control). This is a worldwide trend. Another important part of the strategy is the exchange of products and system solutions between the various geographic regions. economic developments during the reporting year. Activities are increasing in the major infrastructure project market (civil engineering) and the environmental market. In China the production facilities in Zhuhai became fully operational in 2011, allowing the start-up of exports to the United States and providing a basis for the further development of the Chinese market. New initiatives were taken to further develop the market in South America. It was a positive year in many respects for the activities in the United States. Demand was higher than expected. Earnings therefore rose relatively strongly, as a result of cost measures in previous years. On the basis of the strategy, the needs of new and existing markets were met proactively through an efficient organisation and with new products, solutions and systems. The market share grew further as a result. TenCate Geosynthetics (Georgia, US) has been working on new materials for a number of years under the TenCate Mirafi RS580i label. The geosynthetic material has a new weaving pattern, is even stronger and has an improved drainage function. The patented material is multifunctional. The European market experienced positive growth. The TenCate Geosynthetics production site at Nijverdal entered service at the beginning of April, after which TenCate scaled down production at Almelo. These were important steps forward in terms of production efficiency and logistics. TenCate Polyfelt provides a solid base for railways TenCate Polyfelt, a geotextile separation material, was used in the renewal of the rail track near Bodegraven in October 2011. The rail network operator used the longest railway machine in Europe for this project. Over a length of one kilometre, the 1,200-metrelong train lifted the rails and immediately excavated the existing subsoil in three layers. The removed soil was immediately cleaned, sifted and deposited on the automatically laid TenCate Polyfelt. This separation material has been certified by ProRail for use under the ballast bed. The result is a structural solution with minimal impact on the environment. As an integral part of the Asia strategy, TenCate s position in the Asian markets was considerably strengthened when the acquisition of Emas Kiara Industries in Malaysia was completed in March 2011. Emas Kiara Industries is a major producer and supplier of a wide range of geosynthetic products and solutions. Its primary focus is on the Asian markets. Although the acquisition involved initial integration and other costs, the company was able to benefit immediately from the positive Annual Report 2011 49

GEOSYNTHETICS TenCate Geosynthetics has had a mathematical model developed which enables carbon footprints to be compared. The footprint of TenCate Geotube systems for sludge dewatering or land reclamation is compared to competitive solutions. A carbon footprint reflects the emission of greenhouse gases by a product or system solution at each stage of its life. This includes the extraction and transportation of raw materials. The production and distribution as well as the use and eventual removal or recycling are also included in the calculations. This product eco-tool uses the data from suppliers, production locations of TenCate Geosynthetics worldwide and installers of the products. The tool offers project owners, architects and developers a specific indication of the use of TenCate solution compared to others. Together with the end-users and installers in the area concerned an assessment can be made of how to reduce the carbon footprint of a project already at the design stage by using alternatives. Through the smart combination of two local projects in Zutphen, the Netherlands, a high level of CO 2 emissions from transport has been prevented. Connected through the value proposition SUSTAINABILITY Product eco-tool reveals carbon footprint Project solutions can easily be compared Complete life cycle analysis helps to reduce carbon footprint TenCate Geotube is a highly sustainable solution with a low carbon footprint

> REPORT OF THE EXECUTIVE BOARD > Geosynthetics & Grass The proactive exchange of products and system solutions between the various geographic regions leads to TenCate Geosynthetics being involved in highly attractive projects worldwide. The following are examples: Three types of geosynthetics, from TenCate s production sites at Linz (Austria), Bezons (France) and Almelo (Netherlands) have been used in the extension of the runway at Ain Arnat airport in Sétif (Algeria). The work involved the delivery of a durable, costeffective solution with technical support. The Volgermeer Polder in the Netherlands, which was once a landfill site for heavily polluted waste, has been cleaned up and turned into a nature reserve. This is the largest soil remediation operation in Dutch history. With the aid of TenCate Geotube, clean sludge was converted into a natural cap (a layer of clean soil) on top of the seal. TenCate GeoDetect is used to monitor the seal on the waste in one of the basins that were created on top of the natural cap. A large-scale project is being carried out at the former Kai Tak International Airport in Hong Kong. After two successful trials of TenCate Geotube, work began in mid-december to remove and clear 140,000 m³ of polluted sludge with the aid of this technology. TenCate is supplying a large volume of TenCate Geotube containers for use in this project, which is due to be completed at the end of June 2012. TenCate Geosynthetics North America received two IFAI Awards from the Industrial Fabrics Association International (IFAI) at IFAI Expo Americas in Baltimore (Maryland, USA) in October. TenCate Mirafi H 2 Ri received the Innovation Award in 2011. A project in China with a supporting wall based on TenCate Mirafi PET fabric received the Award of Excellence. TenCate Geosynthetics has received the Innovation Award six times in the past seven years. OUTLOOK FOR TENCATE GEOSYNTHETICS TenCate Geosynthetics expects further growth in activities in 2012. At the beginning of January 2012, TenCate Geotube technology was selected for the largest dredging project ever carried out in the United States. Growth is expected on all continents, however, in infrastructure projects and as a result of new products and applications for water management and the environmental market. In particular, there are high expectations for the South American and Asian markets. Further co-operation is being sought with international and large (regional) engineering firms and mining companies. TENCATE GRASS MARKET POSITION AND STRATEGY The Grass group has a leading market position worldwide (fibres and backing) in synthetic turf systems. TenCate is almost at the beginning of the value chain. The strategy is being continuously reinforced in all cornerstones of the strategic framework (value chain management). The industry is in a phase in which the demand and supply side of the market are developing strongly. Downstream consolidation is taking place in the sector as a result of higher quality requirements among various end-users, the greater importance of research and development, high certification costs, environmental and sustainability requirements and tight availability of bank financing. TenCate conducts an active strategic policy in order to maintain a leading position in terms of market share and technology. With production sites in the Netherlands, Dubai and the United States, TenCate has deployed its production facilities cost-effectively, with the emphasis on volume production in the Middle East, and the logistical lines to the market are short. Within this strategic policy, TenCate also leads the way in entering into partnerships with key providers of synthetic turf systems. This allows optimum fulfilment of the end-user marketing cornerstones of TenCate s business model. Interests in downstream activities (marketing and installation companies) are increasingly being integrated and costs shared (chain integration). TenCate thereby combines expertise in the development and production of synthetic turf fibres and carpet backing, as well as research and development in the field of sport characteristics, with the knowledge of system developers and installation companies. The aim is to improve the quality, playing characteristics and durability of synthetic turf pitches. The alliances with market participants are giving rise to joint technological and other developments and reductions in the time to market. The acquisitions in 2011 of shareholdings in GreenFields and Hellas Construction fit in with this policy. In order to strengthen the quality image, co-branding takes place with the overarching TenCate corporate brand. Annual Report 2011 51

> REPORT OF THE EXECUTIVE BOARD > Geosynthetics & Grass By maintaining partnerships, TenCate Grass aims to achieve optimum geographic coverage with a broad product portfolio based on a differentiated brand policy for all sports and landscaping markets, thus ensuring that a direct relationship is maintained with end-users (consumers, sports associations, local authorities, etc.). SUSTAINABILITY Quality guarantees throughout the chain are of great importance, because there is growing quality awareness in the market. Close co-operation also contributes to environmentally friendly and sustainable concepts, as well as the recycling of sports pitches. TenCate XQ technology for recreational and top-flight sport Synthetic turf sports pitches based on TenCate Grass components are ideal for both recreational and top-flight sport. In 2011 the Christian Unified School District of San Diego (California, USA) and the Ralph Wilson Stadium in Orchard Park, Buffalo (New York, USA) installed synthetic turf pitches based on TenCate XQ. This patented technology gives the synthetic turf fibre optimum strength and wear resistance. The combination of this technology and the synthetic turf fibres used TenCate Monoslide Ultra and TenCate XP Blade offers the best of both worlds. The result is a surface with optimum, durable playing characteristics that looks like a natural grass pitch in top condition.. The technology component has also been strongly developed within the Grass group. TenCate has a large number of valuable formulations and patents in the field of fibre and process technology. Formulations are developed in-house which give fibres high wear resistance and make them flexible and resilient. As a result, fibres in sports pitches remain upright longer, leading to an improvement in both playing characteristics and appearance. In 2011 TenCate Grass introduced the 3D weaving technology developed by TenCate. This opens the way to recyclable and fully integrated synthetic turf systems, whereby greater functionality can be introduced into the top layer. Such concepts also have a positive effect on the costs of installation and reinstallation. That also contributes to sustainability, since the whole product is produced from the same type of raw materials, allowing easier recycling. That means the environmental impact in particular can be greatly reduced. Constant attention is devoted to the safety of sportsmen and women. TenCate is one of the 11 partners in Skin Comfort, a project bringing together organisations such as Radboud University Nijmegen Medical Centre, API, Philips Consumer Lifestyle and the University of Twente. This consortium investigates the interaction between materials and the skin across a wide range of applications. TenCate is looking specifically at the interaction between players and synthetic turf (injury prevention). The results provide a good basis for further product development. The use of synthetic turf offers new possibilities in the field of water management. At the opening of the Open Innovation Center for Advanced Materials (OICAM) in Nijverdal, TenCate and Pentair X-Flow introduced GreenSource, the first demonstrator created as a result of open innovation. This project involves a combination of a TenCate synthetic turf system and Pentair X-Flow filtration technology. This makes it possible to generate drinking water worldwide both in sports complexes and from landscaping with synthetic turf, particularly in areas dominated by water shortages or having only polluted water available. 52 Royal Ten Cate

The sports market is currently the main market in synthetic turf. The landscaping market is nevertheless growing strongly and ultimately has equivalent if not greater potential. Reduced maintenance and environmental factors (savings in the consumption of water, artificial fertiliser and pesticides) are important reasons for the acceptance of synthetic turf in gardens and public green spaces. During the reporting year, the sponsorship agreement between TenCate Grass and the Cruyff Foundation was extended for three years. One of the foundation s initiatives is the international rollout of Cruyff Courts, synthetic turf plots in urban areas. There are now over 100 such courts in The Netherlands and several dozen in other countries. GENERAL PERFORMANCE The revenues of the Grass group recorded an organic decrease of 16% during the reporting year compared to 2010. This was partly due to the general decline in the market volume in synthetic turf, particularly in the United States and Southern Europe, and the termination of a large supply contract. Although new market participants joined the downstream activities in 2011, it was not immediately possible to absorb the loss of revenues. The downstream activities of TenCate Grass in the synthetic turf market showed revenue growth partly due to acquisitions. The decrease in the volume of revenues led to a sharp fall in earnings. The provision of product or system warranties is part of the value proposition. In the United States, TenCate substantially increased the production capacity at Dayton by adding an additional production line for its most durable synthetic turf product, TenCate XP Blade. TenCate can now meet the worldwide structural growth in demand for these wearresistant synthetic turf fibres. TenCate XP Blade is manufactured according to a unique process developed by TenCate. TenCate is the only supplier in the world to offer an optional five-year warranty on the wear-resistance of TenCate XP Blade, regardless of the number of hours of use. This is a logical consequence of the comprehensive chain integration with system partners and other participants. This enables the entire process of supplying a synthetic turf system to be carried out under optimum quality control. In this connection, the first TenCate Performance Warranty certificate was issued to a Dutch football association through Edel Grass in April. This certificate was the result of an agreement which TenCate Grass entered into in 2010 with the certifying body INTRON to issue a performance warranty (backed by Allianz) for synthetic turf systems at FIFA 2 Star level. INTRON certifies manufacturers of synthetic turf systems in respect of their quality control. FIFA 2 Star is the performance level which the football federation has defined for topflight competitive football. Oranjewoud Realisatie is also participating in this warranty system. The synthetic turf activities witnessed a continuing market consolidation and strategic repositioning in 2011. The focus within TenCate Grass is shifting from fibre production to the supply of synthetic turf systems for the sports market and landscaping. A development process began at the start of 2011, in order to increase the effectiveness of the integrated distribution activities in the synthetic turf market. The implementation of the strategy should lead to an improvement in results. The situation in the financial markets and the tightening of local authority budgets in the market as a whole led to restraint in the awarding of contracts for synthetic turf projects during the reporting year, particularly in the United States and Southern Europe. The longterm trend is nevertheless positive. The acceptance of synthetic turf, partly driven by lower maintenance costs and water scarcity, is an irreversible process. Multifunctionality also provides added value, because it increases the possible uses. Clubs and schools, etc. therefore have to invest less money in sports facilities. At the end of 2011, GreenFields successfully installed its first FIFA- and IRB-certified dual-use synthetic turf pitch in China at the prestigious Western Academy of Beijing. A GreenFields dual-use pitch (for football and hockey) at the Father Agnel School in Mumbai has been selected by the All India Football Federation (AIFF) and FIFA as the basis for one of the first national football academies in India. The US Army has installed a GreenFields synthetic turf pitch at the former Olympic Stadium in Kabul. The renovated stadium in the Afghan capital is a symbol of progress now that NATO troops are increasingly withdrawing from the country, and in particular it serves to encourage Annual Report 2011 53

GRASS Since August 2011 the American football team the Buffalo Bills of the NFL has been playing its home games on one of the most technically advanced synthetic turf pitches in the United States of America. The pitch was installed in the Ralph Wilson Stadium in Orchard Park by A-Turf Inc from Buffalo (New York), who opted for TenCate XP Blade and TenCate Monoslide Ultra synthetic turf fibres with TenCate XQ technology. The combination of the two fibres offers unsurpassed durability and playability, while providing a natural appearance that is second to none. This blend is a great leap forward in synthetic turf technology, as it combines the best of both worlds by ensuring a groundbreaking synthetic turf system that not only looks great, but also performs at the highest level in American football. Connected through the value proposition

> REPORT OF THE EXECUTIVE BOARD > Geosynthetics & Grass women s football. If the pitch is approved by FIFA in the near future, it will be possible to use it for international competitions from as early as this year. Clubs in the English Football League are now also increasingly calling for the installation of synthetic turf to be permitted. Now that the GreenFields pitch at the Scottish club Stenhousemuir has received the FIFA 2 Star certificate for the sixth year running, English clubs are becoming aware of the major advantages of a synthetic turf pitch, such as predictable playability and playing characteristics, low water consumption and maintenance. In the United States, leading installers such as Hellas Construction and A-Turf chose TenCate to develop attractive projects such as the first NFL pitch. The combination of technology and fibres is a leap forward in synthetic turf technology and offers not only high durability and playability but also an unrivalled natural appearance. OUTLOOK FOR TENCATE GRASS As a result of tighter government budgets, volumes of synthetic turf in the global market are not set to show any significant rise in the short term, although there will be regional differences. TenCate s presence in the entire world market is an advantage. The main challenge TenCate Grass faces in the short term is controlling costs and implementing the differentiated market strategy based on brands and geographic areas. The Grass group will take further organisational measures to improve results in the short term. Further acceptance of synthetic turf as a real alternative to natural grass in sport, with football as the main growth market, will ensure steady growth in the market. Annual Report 2011 55

Xennia Osiris Since mid-2011 Xennia Technology has had at its disposal a specific application of inkjet technology for the textile sector. The Xennia Osiris machine is an addition to the developments within Xennia and is complementary to the digital finishing solutions already available. Inkjet technology for continuous production processes delivers a fast response time, end-user-specific products and a reduction in inventory and production costs. The Xennia Osiris machine has been operational at Vishal Fashion in India since early 2011. Large volumes of more than ten kilometres in length are printed on it as fashion fabrics in small, medium and large runs. The company has a business model based on rapidly changing collections that are inspired by the fashions seen in current television films and in movies. Parent company TenCate is working as launch customer on the development of inkjet coatings on technical textiles. Connected through the value proposition

OTHER ACTIVITIES KEY FIGURES Other activities 2011 2010 2009 2008 2007 in millions of euros unless stated otherwise Revenues 74.5 66.8 52.7 53.8 67.4 Operating result before amortisation (EBITA) 5.9 9.8 7.0 3.9 2.4 Operating result (EBIT) 4.1 8.3 8.1 3.9 2.4 Investments 5.2 6.9 4.1 7.3 1.0 Depreciation and amortisation 3.7 3.5 3.2 1.7 1.9 Staff years at year-end 611 624 670 657 729 * * Including exceptional items. ACTIVITIES In addition to Holding & Services, the Other Activities sector comprises Xennia Technology Specialist inkjet technology for industrial applications, such as the printing, coating and finishing of materials. TenCate Enbi Technical rollers and components particularly for printers, copiers, fax machines, postal sorting machines and automated teller machines. REVENUES AND RESULTS The revenues of the Other Activities sector (inkjet technology, technical components and Holding & Services) amounted to 74.5 million (2010: 66.8 million). EBITA amounted to 5.9 million (2010: 9.8 million). The decrease in EBITA was caused by a slight decrease in the results from both TenCate Enbi and Xennia Technology, as well as by lower EBITA at holding company level. XENNIA TECHNOLOGY MARKET POSITION AND STRATEGY Xennia Technology ltd of the UK (79%) specialises in the development of industrial production processes based on inkjet technology. Xennia combines technology (hardware solutions) with operating systems (software) and its own ink formulations to create industrial production systems. The company focuses mainly on textile printing and finishing, decoration and coating of materials, the packaging industry, printed electronics and medical applications. This represents a revolution for TenCate in the field of coatings and textile finishing, because functional characteristics can be applied to materials on a nano scale. This is an entirely new process in the treatment of technical textiles. This technology is therefore gradually being introduced into TenCate s production process, initially in the TenCate Protective Fabrics market group. The technology offers major progress in reducing the consumption of energy and raw materials, as well as in the accuracy of the process (controllability and quality). Other advantages are the individualisation of volume products (mass customisation) and product innovation. With the forthcoming introduction of digital finishing by means of inkjet technology, a growing number of sustainability features can be added to technical and other textiles in the next three to five years, particularly outdoor and protective fabrics, such as active self-cleaning and energy-generating capabilities. GENERAL PERFORMANCE Considerable progress was made in the development of the ceramics market in 2011. The main sales area is China, where ceramic tiles are printed for interior use. The ceramics industry is using this technology both to improve products and to achieve major cost savings by digitising the process. Although revenues grew, earnings lagged far behind, partly due to continued relatively high development costs. Ink sales continued to lag behind because the necessary installed base of technology applications has not yet reached the required size. This is a gradual process. Work has been carried out jointly with TenCate technologists on new textile printing and finishing processes. Annual Report 2011 57

> REPORT OF THE EXECUTIVE BOARD > Other activities > Inkjet technology offers major progress in reducing the consumption of energy and raw materials and in the accuracy of the process. < OUTLOOK In the years ahead, Xennia Technology will be an important technology partner that generates solutions with industrial partners in the field of inkjet technology. Xennia has formulated a growth strategy focusing on a number of niche markets, including textiles, in which TenCate is one of the main launch customers. The first tangible results of this are expected in the current reporting year. TENCATE ENBI MARKET POSITION AND STRATEGY TenCate Enbi develops and produces technical rollers and components based on rubber and foam technology for paper transport and image transfer in printers, copiers and fax machines, as well as for postal sorting machines and automated teller machines. The products have to meet strict qualification requirements with regard to technical characteristics. TenCate Enbi occupies an important position as a leading supplier to major European, American and Asian printer and copier manufacturers. In addition to the office market, TenCate Enbi serves niche markets, such as postal sorting machines, ATMs, photo printers and insulation (foam-based products). A strong development capacity is an important precondition for success in this market, which increasingly has shorter production cycles. OUTLOOK FOR TENCATE ENBI TenCate Enbi has already provided information on the growth opportunities in the Asian market. Relationships with producers are developed on the basis of product qualifications. These qualification processes may be lengthy. The initial results of this are now becoming evident, and attractive opportunities are emerging in the Asian market. By contrast, developments relating to end-of-life products will cause the respective revenues to decrease or come to an end. TenCate Enbi is factoring in a further reduction in revenues from major US relationships. The main growth is expected to be achieved at the Chinese site. POST BALANCE SHEET EVENTS There are no event subsequent to the reporting date requiring commentary. GENERAL PERFORMANCE The market in which TenCate Enbi operates remained fairly stable overall. TenCate Enbi recorded a decrease of approximately 4 million in revenues, mainly due to the reduction in the volumes sold to larger customers. The site in China (Zhuhai) is obtaining a growing number of qualifications for components for Asian printer and copier manufacturers. Following the earthquake in Japan, which forced Japanese manufactures to locate their production elsewhere, TenCate Enbi in Zhuhai also received orders from Japanese producers. Preparations have been made to concentrate all Asian activities in Zhuhai. 58 Royal Ten Cate

OUTLOOK TenCate operates predominantly in growth markets. Although government spending will remain squeezed in 2012, it is expected that the positive market trends for TenCate will remain intact and will continue. The first half of 2011 was very strong, mainly due to catch-up demand from the US Army for TenCate Defender M products. Sales of TenCate Defender M in 2012 will be lower due to the gradual reduction in the number of US troops in Afghanistan. This reduction is expected to be offset by new projects for the US Army and revenues in markets outside the United States are expected to show continued growth. A large number of new wearing trials for armies outside the US were started in 2011. The positive developments in complementary markets (security services, industry) for both TenCate Defender M and TenCate Tecasafe Plus will also contribute to the further growth. The growth in sales of composites for the aerospace industry will continue. This market is largely based on long-term contracts. The geosynthetics activities are similarly expected to show continued growth, and further market development is being pursued in emerging markets (BRIC countries). The Grass group will take further organisational measures to improve results in the short term. The greater commercial focus at Xennia Technology is intended to accelerate the growth in earnings. With a more even distribution of sales of TenCate Defender M products, a different picture is expected in 2012 compared to 2011. The performance in the first half of 2012 will therefore not be comparable to that of 2011. Partly in view of a number of multi-year contracts and larger projects which were initiated or already in the portfolio, TenCate expects its result for full-year 2012 to be at least in line with that of 2011, barring unforeseen circumstances. High-speed inkjet technology TenCate has gained access to a specific inkjet technology application for the textile sector. The Osiris machine supplements the developments at Xennia Technology and complements the solutions Xennia can provide. Inkjet technology for continuous production processes means fast response times, end-user-specific products and lower inventory and production costs. The Osiris machine has been in operation at Vishal Fashion in India since early 2011. It is used to print large volumes of fashion fabrics (over 10 kilometres) on a daily basis. TenCate is currently working on the development of inkjet coatings on technical textiles as a launch customer. No significant contribution is yet expected during the current year from the TenCate ABDS active blast countermeasure system. A period of technical and logistical preparation will have to take place before such a system is used in vehicle programmes. There is nevertheless great interest in this system in the defence market. Annual Report 2011 59

Actions for 2012 Using indicators to highlight sustainability aspects End-user marketing As a follow-up to earlier initiatives in 2011 and previous years, Further expansion and intensification of TenCate brand awareness 2012 is expected to see a large number of CSR initiatives centred and brand perception by making greater use of social media and on making performances measurable at both process and product individualised and interactive provision of information. Clear level. A collective approach is being supported by the holding communication on sustainable value propositions, making use company. Using selected GRI standards, quality data are being of the various media. obtained from market groups worldwide based on key performance indicators that are mutually comparable. This will provide a more TenCate s positioning as a solutions provider in the automotive comprehensive overview at group level. market As part of the policy of prioritising growth in the composites Organisational embedding of new profit sources and development businesses, close attention will be devoted to the current of system concepts developments in the automotive industry. TenCate occupies a The development of new sources of future profit and the leading position in thermoplastic composites. The automotive conceptual development of systems and solutions for end-users industry is on the verge of a technological revolution involving the require organisational expansion or adjustment in some areas. use of new composite materials. This need has arisen primarily This may initially involve costs. The system approach can be focused on providing a functional solution against the background from government regulations aimed at annual reductions in CO 2 emissions from vehicles. The industry therefore has to develop of a sustainable concept. An example of this is the GreenSource innovative, lightweight concepts, which require adjustments concept which TenCate has developed with partners and which to the design and manufacturing process. links sport played on synthetic turf to sustainable water A discernible trend is under way in the aerospace and automotive management. Another example that can be mentioned in this industries towards project-based co-operation with the aim of regard is the TenCate ABDS active blast countermeasure system, reducing the costs of composites and making materials more which is entering the commercial phase in 2012. This is not suitable for industrial processes. By participating in various expected to make a significant contribution in the current financial industrial networks, TenCate aims to become part of the required year. solutions with its aerospace background. Continuation and completion of network integration Embedding of inkjet technology in the TenCate Protective Fabrics in the synthetic turf market production process This process, which has taken a number of years, is expected The first production runs for specific print applications will take to be completed in 2012, providing a basis for a profit recovery. place in 2012 at the production site in Nijverdal (Netherlands). The market participants associated with TenCate will work Work will also start on the establishment of the finishing closely together to provide optimum service for the market with department (coatings) for production based on inkjet technology. a segmented offering of systems for a wide range of sports pplications and landscaping. Based on the quality image of the TenCate brand, the parties will operate under their own brand in specific geographic markets. 60 Royal Ten Cate

Corporate information CORPORATE GOVERNANCE The Supervisory Board and the Executive Board endorse the main corporate governance principles, in the form currently applicable to Dutch listed companies operating internationally. SWOT analysis is part of a gradual process of refinement and control. Since full details of the formulated SWOT analysis can be found in the 2010 annual report, only a point-by-point summary of the main components is provided here. The corporate governance structure is based on the voluntary application of the two-tier board structure. The main elements of this are: The financial statements are adopted by the general meeting of shareholders; Supervisory directors are appointed by the general meeting of shareholders on the basis of nominations by the Supervisory Board. The profile of the members of the Supervisory Board is first discussed at the general meeting of shareholders at the time of adoption and on each subsequent modification; The general meeting of shareholders and the works council can recommend persons to the Supervisory Board for nomination as supervisory directors; With an outright majority of votes, the general meeting of shareholders representing at least one-third of the issued share capital may reject the nomination by the Supervisory Board; The members of the Executive Board are appointed by the general meeting of shareholders on the basis of a binding nomination by the Supervisory Board. No changes or adjustments were made to corporate governance within TenCate in 2011. Consequently, for the full corporate governance documentation we refer to the TenCate website, the report of the Supervisory Board appearing on page 20 and the 2011 remuneration report, which can also be found on the TenCate website. SWOT ANALYSIS TenCate has for a number of years provided an outline of the SWOT analysis in its annual report. This analysis is a permanent feature of the internal strategic framework, in which each market group draws up a SWOT matrix for each continent. The points included in this apply to TenCate as a collective group. On the basis of the SWOT matrix, a confrontation matrix is drawn up for each market group, as shown on pages 33 and 47. In addition to the fact that indicated improvement points are tackled on an ongoing basis and actions are undertaken to address threats, the The strength of TenCate The strength of the TenCate corporate brand with the following core values: innovative, solution-focused, high-quality and reliable. The TenCate corporate brand is a connecting factor linking the various market activities. The recent media focus on TenCate Defender M and the TenCate ABDS active blast countermeasure system has made a strong positive contribution to the TenCate brand. Competitive position based on economies of scale, technology development and innovations (IP), the broad technological basis and global presence in markets and diversified access to the commodities market. Market leadership in niche markets. Improvement points TenCate is an organically growing company which has gained an increasingly international character over the years. The process of transformation from a production-dominated company to a marketdriven solution provider makes additional demands on employees. An advanced management development programme is required in order to keep the organisation in step with developments and anticipate the future. The growth process has been accelerated by applying a greater focus and strengthening the local presence in growth markets. The achievement of the associated revenue growth is a gradual process. Value chain integration in the synthetic turf activities is also a point of attention in 2012. The aim is to increase the return substantially, partly by further implementation and optimisation of the downstream activities coupled with an optimisation of component production (fibres and backing) and the associated capacity utilisation. The generation of profitable revenues from previous (capitalised) developments at Xennia Technology, with the aim of strengthening the marketing and sales activities. Annual Report 2011 61

> CORPORATE INFORMATION Opportunities The continuing attention devoted to technological developments and product differentiation focused on new and existing market requirements leads to a constant stream of opportunities. Product developments such as TenCate Defender M and TenCate Tecasafe Plus are good examples of this. Business development has been embedded more strongly in the organisation since 2010. The new aerospace armour production plant opened at the end of 2011. After the initial long-term project with Eurocopter, other producers have also signed up for armour projects. TenCate combines its capacities as an aerospace company with those in vehicle armour, generating substantial added value. Developments in new geographic markets provide opportunities for TenCate and can offset possible cyclical declines in certain traditional markets. Threats As a result of growing uncertainties in the financial markets, the supply of credit may come under renewed pressure. TenCate will maintain an ample safety margin with regard to its maximum debt ratio, which may put some pressure on the financeability of larger potential acquisitions. Priority will be given to the reduction of working capital in order to maintain maximum headroom for growth. New synthetic turf fibre producers offering components at extremely low prices are a potential threat. This threat is addressed by continuing to focus attention on systems and the needs of end-users (solutions) and maintaining direct access to the market (point of sale). The substantial proportion of revenues from TenCate Defender M dependent on the US Army remains a point of attention. The reduction in the number of military personnel stationed in Iraq and Afghanistan should not be viewed as overwhelmingly negative. TenCate has succeeded in further expanding the overall portfolio of the TenCate Defender M range and has developed other concepts based on similar technology (such as TenCate Tecasafe Plus). TenCate is also enjoying increasing success in this field outside America. Challenges TenCate faces major challenges over the next five years in its aim of growing to an indicative revenue level of approximately 2 billion. This will entail inevitable organisational challenges. As a producer of materials, there is a close relationship with production processes in later links in the value chain and with the ultimate design of the end-product. The challenge for TenCate is to choose such a positioning in the value chain that this results in a sustainable profit model in the longer term. The transformation to a solution-focused organisation means that operations increasingly have to take place in network structures, requiring new skills on the part of the organisation. An organisation which adopts a market stance based on a new dimension may substantially change the company s image. RISK MANAGEMENT Enterprise entails risks. Because TenCate operates in different markets, the company also faces varied risks in each market. TenCate aims to identify and control these risks as early as possible. Risk control models have therefore been developed, which are updated and discussed with the group management at least four times a year. The risk control and supervision measures are aimed at early identification of these risks. The main risks and the applicable risk control models are described briefly below. A full description of the risk management can be found on the TenCate website. STRATEGIC RISKS In order to assess the strategic risks, TenCate uses a business model based on four cornerstones: end-user marketing, product differentiation, technological innovation and cost leadership. An analysis of this model enables TenCate to carry out a clear and rapid assessment of the company s strategic position and to adjust it accordingly. A second model used is the SWOT analysis. This analysis is also used as a basis for agreements with the management on measures to reduce risks. 62 Royal Ten Cate

MARKET RISKS Government expenditure in the main countries is an important factor in demand for TenCate products. Strong commercial networks and the associated supply of information enable the company to swiftly anticipate government plans. By maintaining flexibility in cost structures, it is possible to compensate for the consequences of a decrease in demand. In situations of scarcity or heavy dependence on a single supplier, there are risks of non-availability or disproportionate price rises. Active steps are taken to reduce this dependence. OPERATIONAL RISKS TenCate s organisation strategy is based on a decentralised model. The managements of market groups and operating companies are controlled on the basis of a formalised planning and control cycle. TenCate performs preventive inspections of its products and almost all businesses are ISO-certified. TenCate s environmental policy is based on limiting any impact on the environment as far as possible. Periodic inspections are carried out both by the holding company and by the operating company managements and measures are taken to avoid environmental risks. Each operating company has its own systems for control and transaction processing in the main operating processes. Information security and back-up procedures are followed to minimise the risk of disruption to these systems. LEGAL AND TAX RISKS TenCate becomes involved in various legal proceedings resulting from normal business operations. The progress of these proceedings is monitored continuously. A summary is discussed in the finance committee of the Supervisory Board twice a year. > TenCate has developed risk control models, which are updated and discussed with the group management at least four times a year. < FINANCIAL RISKS The financing of the company is for the most part centralised through corporate treasury. The main financing source is the 450 million syndicated loan arranged in December 2010. The main covenant concerns the debt / EBITDA-ratio. In view of the specific seasonal pattern in TenCate s financing requirement, quarterly debt / EBITDA ratios have been agreed. That substantially reduces the risk of a breach of covenant. The risk of an interest rate rise in the subsequent years is hedged in principle to various percentages, taking account of expected interest rate trends. The effect of changes in the value of financial instruments on the company s result is mitigated as far as possible by the use of hedge accounting. With regard to currencies, Ten Cate draws a distinction between competition, transaction and translation risk. The competition risk is hedged over the subsequent six months by means of options. The foreign currency transaction risk is hedged by means of futures or options. The translation risk on the results of subsidiaries outside the eurozone is offset where possible internally by euro-denominated revenues of subsidiaries outside the eurozone. No impairment has been recognised in respect of the intangible fixed assets. The sensitivity with regard to the main assumptions on this subject has increased at the TenCate Grass unit. Further details can be found in note 37.2. TenCate has placed the pension provision for Dutch employees with Stichting Pensioenfonds Koninklijke Ten Cate nv. The pension fund has taken measures to reduce the risk profile as part of its investment policy. In 2011, Royal TenCate switched from the corridor method to the OCI method for the valuation of pension liabilities. This change of system provides greater insight into changes in pension liabilities. Annual Report 2011 63

Business development GreenSource sports for water In July 2011 TenCate and Pentair X-Flow presented the demonstrator developed in open innovation for drinking water management. This GreenSource project combines TenCate synthetic turf systems for sports or landscaping with Pentair X-Flow technology for the treatment of rainwater and sewage. Wavin supplies the drainage systems. The GreenSource system enables water management to be used worldwide on sports complexes and stadiums as well as on landscaping based on synthetic turf. The treated water can be used for spraying synthetic turf pitches and for irrigation of the natural landscape. Water of this quality can also be made suitable for drinking water. Worldwide there is a growing demand for sustainable products, in particular for those that save water. The GreenSource system meets this need. Connected through the value proposition

> CORPORATE INFORMATION RISK MANAGEMENT AND CONTROL SYSTEMS A whistleblowers scheme and a complaint scheme enable employees to inform the company management of any undesirable situations. It is important to maintain direct contact between the Executive Board, group managements and directors of operating companies. Extensive monthly reports are filed and the performance, results, outlook and certain risk management aspects are discussed each quarter. The risk management also forms part of the consultations with the financial committee of the Supervisory Board. The management of parts of the company can permanently or temporarily negate agreements made with the Executive Board. This statement should not be interpreted as being a statement in accordance with the requirements of section 404 of the Sarbanes Oxley Act in the United States, which does not apply to Royal Ten Cate. All managers and controllers sign a letter of representation twice a year declaring their compliance with financial reporting / internal control requirements. EVALUATION OF RISK MANAGEMENT AND CONTROL SYSTEMS The Executive Board is of the opinion that: The risk management and control systems provide reasonable assurance that the financial reporting is free of material misstatements; The risk management and control systems have operated correctly in the reporting year; There are no indications that the risk management and control systems will not operate correctly during the current year. However well designed our internal risk management and control systems are, they can never provide absolute certainty that objectives in the field of strategy, operation, reporting and compliance with laws and rules will always be achieved. In taking decisions we are aware that: Human errors of judgement may arise; Cost-benefit assessments must constantly be made when assuming risks and taking control measures; Human failings and even simple errors or mistakes can have major consequences; Conspiracies by officials can lead to circumvention of internal control measures Annual Report 2011 65

> CORPORATE INFORMATION HUMAN RESOURCES MANAGEMENT Employees Year-end 2011 Year-end 2010 Year-end 2009 Year-end 2008 Year-end 2007 in number of staff years Netherlands 819 785 862 931 975 Rest of Europe 672 724 569 612 582 United States 1,604 1,542 1,314 1,573 1,527 Asia/Australia 1,030 878 777 936 641 Middle East 228 342 283 385 295 Total 4,353 4,271 3,805 4,437 4,020 HUMAN RESOURCES POLICY The HR policy is based on the following principles Identifying and developing talent; Developing leadership and entrepreneurial qualities; Retaining talent and guaranteeing knowledge. In 2011 the HRM efforts were focused on guaranteeing the continuity of the company, partly by developing skills and improving employees performance and tightening the structures of the organisation. TenCate takes account of effects on the local or regional labour market in its accommodation policy. During the reporting year this policy was applied when the Almelo-based production activities of TenCate Geosynthetics were transferred to Nijverdal (Netherlands) and when the activities of TenCate Advanced Composites were concentrated in Fairfield (California, US). Retention of knowledge and skills and flexibilisation of manpower were the principal objectives. TenCate Protective Fabrics in the United States once again succeeded in making a major contribution to the retention of jobs in the State of Georgia during the reporting year. Fellow operators in the region s textile industry were licensed to produce protective fabrics for the US Army, helping to maintain around 10,000 jobs. During the current year such an approach will also be adopted by TenCate Protective Fabrics in South Korea. TenCate aims to strengthen its leading positions in its core markets as a result of these acquisitions. Emas Kiara, one of Asia s main geotextile producers, has been part of TenCate since 2011. ORGANISATIONAL DEVELOPMENT Due to the quickening pace of change in the world markets, the shift in industrial power relationships and the growth in emerging markets, TenCate s continued success depends crucially on being able to influence end-users, deliver innovations, develop new marketing strategies and implement these strategies appropriately. TenCate s strategy is focused on further growth in its existing world markets and the securing of substantial positions in a limited number of adjacent markets. The flat organisational structure means the emphasis is more on the continuing development of the senior management. With regard to vital functions, greater priority is given to internal career development for employees and managers than to attracting new personnel from outside TenCate. The company s continuing growth means greater demand for more central control mechanisms. TenCate s core values, corporate culture, framework conditions, guidelines and procedures are being further tightened. Entrepreneurship remains central at all levels in the groups. It is essential to translate and implement the strategy appropriately. At the end of 2011, TenCate had approximately 4,350 employees worldwide. Overall there was a limited increase in the size of the workforce. On the one hand the existing organisation was sharpened and on the other hand a number of acquisitions were completed. 66 Royal Ten Cate

TALENT AND MANAGEMENT DEVELOPMENT Talent and management development will focus even more on senior management. A large number of senior management personnel underwent an assessment in 2011 which provides a starting point for further development. The continued development of talent at all levels in TenCate will also remain a major focus of attention. Greater attention was devoted to securing and developing specialist knowledge and leadership skills in 2011. The existing development programmes are increasingly being co-ordinated. Attention will be directed towards management development. Internal branding campaigns, focused among other things on CSR and social innovation, will be supported. More attention will also be devoted to training courses on end-user marketing and the strengthening of sales skills in 2012. Various IT tools are currently being developed to provide efficient and effective support, for these processes, such as the introduction of an MD portal. other benefits, this has resulted in a relatively low level of sickness absence worldwide. EMPLOYMENT CONDITIONS TenCate offers its employees a comprehensive and competitive package of employment conditions. To this end, regular surveys are conducted, in co-operation with Hay Group and local employer organisations. TenCate operates a uniform remuneration policy for the management of all businesses. The bonus systems for the senior management are also determined centrally. That takes place on the basis of the result of the operating company and in some cases also partly on the basis of the results of the TenCate market group as a whole. SAFETY Our employees on all continents are professional people with a sense of enterprise focused on results and solutions, who are genuinely prepared to take on challenges. A safe and high-quality working environment is of immense importance in this regard and has high priority (see also the sustainability policy for the internal CSR campaign). TenCate s policy is aimed at implementing or establishing all activities and processes in such a way that any personal injury or damage to health can be avoided. This aim is the starting point for the health and safety policy implemented in all our businesses. Among New site for TenCate Geosynthetics in Nijverdal Ten Cate Geosynthetics new production site in Nijverdal opened officially on 14 April. TenCate Geosynthetics develops and produces geosynthetic materials at Nijverdal for construction, civil engineering and infrastructure projects. Major advances have been made in terms of production efficiency and logistics. The office functions have been located in TenCate s premises on Hoge Dijkje in Nijverdal. Corporate values TenCate 10Cate At TenCate we are 1 Effective doing the right things 2 Efficient doing things right 3 Creative thinking more flexibly 4 Flexible acting more flexibly 5 Enterprising recognizing and maximizing opportunities 6 Innovative breaking new ground at the cutting edge of technology 7 Reliable saying what you do and doing what you say 8 Committed dedicated, dependable and proud 9 A team we collaborate as individuals and also as teams 10 The difference to our clients materials that make a difference Annual Report 2011 67

Business development Recyclable Thanks to ingenious product design, using the innovative, patented weaving technology from TenCate Grass, the first fully recyclable synthetic turf pitches were developed in 2011: first for landscaping, then for sports fields. This is a first in this industry. At the end of the lifespan of the pitch the processed materials can immediately be reused in the TenCate Grass production process. This relates to the synthetic turf fibres, the woven backing and the adhesive layer. These are all from the same product family, so that there is no impure mixing during recycling. The infill is recycled separately after it has been cleaned. Synthetic turf has a number of sustainability aspects. A synthetic turf pitch requires less maintenance (mowing, fertilizing) than natural grass and can be played on longer and more intensively. Depending on the type of pitch, synthetic turf provides a considerable saving of water. As natural grass pitches cannot be played on continuously, the pressure on space of synthetic turf pitches is considerably less. The fact that it is now possible to recycle certain types of synthetic turf represents fundamental preservation of this product. Connected through the value proposition SUSTAINABILITY Fully recyclable, including the backing and adhesive layer Savings on materials, water and energy High use (on average 1,500 hours a year) Less pressure on space than natural grass Less maintenance than natural grass Patented innovative weaving technology

> CORPORATE INFORMATION TenCate operates businesses in 25 countries around the world, each of which has its own employment regulations, laws and culture. The operating companies therefore conduct their own personnel policies geared to the local situation, although these are governed by conditions and general principles specified by the group. In co-operation with the general employers association AWVN, a major job evaluation project was completed in the Netherlands in 2011. All jobs covered by the collective labour agreement for the fashion, interior, carpet and textile industry have been redefined (consolidation), described and rated in accordance with the ORBA-PM method. CORPORATE INFORMATION TECHNOLOGY DEVELOPMENTS IN 2011 Further steps were taken in the merger of the decentralised IT organisations into three regional shared service centres in 2011. The shared service centre in the USA entered service in January 2011. The IT shared service centre in Asia will be operational in the first quarter of 2012. The regional shared service centres will be connected to each other in 2012, completing the transformation of the IT organisation from a decentralised structure to one based on a shared service centre. Projects The Global TenCate Network was rolled out worldwide in 2011. This network connects almost all companies, which can then communicate and share information securely. The companies in Asia and Australia/ New Zealand in particular will be connected in 2012. Cognos Controller, the central financial reporting and consolidation system, entered service fully at all TenCate operating companies in 2011. The TenCate website has also been adapted for mobile devices. inetwork, the TenCate intranet, has been updated and is being rolled out worldwide. Investments In addition to a number of technological investments in IT systems (SAN, backup, telephony), various ERP implementations have been completed. For example, the TenCate Advanced Armour companies in Europe (Denmark and France) and TenCate Protective Fabrics Thailand > TenCate Protective Fabrics offers the best protection value for our customers and profitable growth and shareholder value for our business. We are achieving this objective and demonstrating leadership in the protective textiles market through our extensive knowledge of advanced materials, processes and strong position in the value chain. < TenCate Protective Fabrics mission statement have switched to Microsoft Dynamics AX and TenCate Geosynthetics Europe has now standardised on SAP. These replacements have allowed further standardisation within TenCate s ERP landscape. PLANS FOR 2012 2012 will see the completion of the IT organisation in regional shared service centres and the connection of the TenCate companies to the worldwide TenCate network. TenCate Advanced Armour will begin implementing MS Dynamics AX in America and the UK. The TenCate website will be given a makeover and the underlying content management system will be replaced. Research has now started with a view to expanding the mobile telephone contract to include all European sites from 2013. CORPORATE INTELLECTUAL PROPERTY TenCate conducts an active branding policy in order to strengthen and further expand its image in the market. TenCate s market strategy is based on its strong corporate brand. This brand forms the basis of both corporate and market communication. The strategy is linked to the end-user marketing strategy, which is conducted through the different market groups. The brand is communicated clearly in the various market groups, thereby emphasising the coherence of the different market groups. Annual Report 2011 69

> CORPORATE INFORMATION In addition to the active branding policy, TenCate conducts an active patent policy. That applies both to the registration of new inventions and to the protection of existing intellectual property rights. The existing portfolio is regularly assessed to ensure that the available intellectual property is being used appropriately. TenCate innovates and develops constantly. The resulting intellectual property is appropriately registered and protected. TenCate also conducts an active protection policy. Action is taken if any infringements are detected. DEVELOPMENTS IN 2011 Further work took place in 2011 on the positioning of the corporate brand worldwide. The market groups have consistently implemented the brand strategy. The fact that the strategy benefits the value of the brand is also evident from the increased market value of the brand compared to 2010. According to the top 100 Dutch companies with the most valuable brands, the TenCate brand represents a value of 135 million, almost 30 million more than in 2010. (Source: Brand Competence, The Dutch Top 100 corporate brands ranking 2010 and 2011.) Various new patents were again added to the existing portfolio in 2011, either by registering new intellectual property developed by TenCate or by means of acquisitions. The brand portfolio can be viewed on the website. The patent portfolio is not disclosed, however, due to competition considerations. As a multinational company, TenCate is aware the effect its actions have on the social environment. By maintaining the company on the basis of sustainable profitability, TenCate aims to play a part in making sure that the social, natural and economic environment remains available for future generations. TenCate is increasingly integrating sustainability into its operating processes, products and joint ventures by means of corporate social responsibility (CSR). This creates shared awareness among both internal and external stakeholders, which in turn opens the way to constructive initiatives with buyers, customers, partners and institutions aimed at the responsible deployment of people and the responsible use of commodities and materials. On the basis of the worldwide trends towards safety and sustainability on which TenCate focuses, numerous underlying themes arise in relation to the protection that TenCate provides for people and their environment. The sustainability themes include weight reduction, limitation of energy consumption, noise reduction, insulation, water management, reuse, recycling, waste water and sludge processing, bullet- and fragment- proofing and heat and flame resistance. The management of the value chain involves numerous sustainability aspects to greater or lesser degrees. This applies to all the cornerstones of the business model. The technological innovation cornerstone is the most obvious. Only through continued groundbreaking innovations in technical and technological areas will it be possible to secure the continuity of TenCate as a technology group and guarantee sustainable development. CORPORATE SOCIAL RESPONSIBILITY SUSTAINABILITY POLICY TenCate s sustainability policy forms an integral part of the pursuit of continuity in the company, which has existed for over 300 years. It is based on the forward-looking vision, mission and strategy of the Executive Board. At the same time it reflects the long-term approach and actions of the group managements and employees of TenCate and its subsidiaries and associated companies worldwide. CORPORATE SOCIAL RESPONSIBILITY CSR is the means by which TenCate integrates sustainability into its business operations. TenCate uses numerous management systems particularly to make corporate social responsibility visible and controllable. These range from environmental management systems (ISO certifications for quality and the environment and renewal of certification) through to financial accountability concerning the receipt of innovation funds and the provision of sponsorship and donations. In the various value chains, TenCate plays an active part as a customer, producer, supplier and co-operation partner in delivering sustainability innovations in numerous fields. 70 Royal Ten Cate

TenCate s corporate departments support the managements worldwide with corporate social responsibility initiatives and projects. The corporate risk management, corporate human resources management and corporate communications departments co-operate with these. The managers of these departments are responsible for the corporate approach to CSR. The CSR team specifies its objectives and programme each year. The objectives, results and compliance with legislation and regulations are assessed with the management and group managements as far as possible on a quarterly basis. If necessary, the group managements make adjustments to the strategy and its implementation. chemically or mechanically recyclable products using cleaner and more efficient production techniques. TenCate s technology road maps and product road maps in particular chart the direction of future sustainable innovations. The corporate risk manager reports directly to the CFO on the progress of the risk management. In addition to safety aspects, this includes environmental and social aspects of operational management. The corporate HR director reports directly to the CEO on social and economic aspects and on assessment and remuneration systems. No TenCate officers have an explicit CSR weighting in their remuneration, as TenCate believes that sustainability is an integral part of the company s pursuit of continuity. One of the TenCate core values is reliability. The integrity code applies to everyone employed by TenCate. The code is part of each individual contract of employment. A corporate compliance officer and a confidential adviser have been appointed to support the code. The future availability of essential natural resources (biodiversity) remains an ever-growing concern for TenCate. The company aims to keep control of developments by focusing on individual areas such as an integrated environmental policy, the prevailing energy policy, the progressive policy on emission allowances, efficient and eco-efficient production, recycling and developing bio-based initiatives. TenCate Defender M in South Korea and Australia TenCate Protective Fabrics has signed an agreement with Samil Spinning in Seoul (South Korea) for a TenCate Defender M partnership. The aim is to expand the TenCate Defender M product portfolio in the South Korean army and police market. TenCate Defender M fabric has also been supplied for 10,000 additional uniforms for an extensive MultiCam wearing trial in war zones by the Australian Defence Force. TenCate Defender M offers an optimum balance between flame retardance, service life, comfort and cost. It has significantly reduced the number of burn injuries, thereby saving many lives since 2007. This approach is in line with the industry s sector objectives. According to the roadmap to 2030, by that time the technical textile industry must be able to fulfil the needs of customers and users in a flexible and sustainable way. TenCate has a leading position in the pursuit of this objective. By already working further on groundbreaking technologies and techniques for the processing of natural, synthetic, bio-based, biologically degradable, recyclable or secondary raw materials, TenCate will be increasingly able to manufacture biologically, Annual Report 2011 71

GRASS In April 2011 TenCate Grass, together with Edel Grass and Oranjewoud Realisation, presented Flevo Boys football club in Emmeloord, the Netherlands, with the TenCate Performance Warranty certificate. This makes TenCate Grass the first company in the international synthetic turf industry to offer insurance on the performance and durability of synthetic turf pitches made of TenCate components. The insurance policy that Allianz issued for Flevo Boys synthetic turf pitch guarantees a FIFA 2 Star performance for five years. FIFA 2 Star is the benchmark for the highest level of league football on synthetic turf. TenCate Monoslide synthetic turf fibres based on TenCate XQ technology make it possible to construct pitches that fulfil FIFA 2 Star requirements over a long period of time. Connected through the value proposition

> CORPORATE INFORMATION DEVELOPMENTS IN 2011 CSR essentially involves striking the right balance between People, Planet and Profit. During the reporting year, TenCate recorded an impressive economic performance and profitability (Profit) while respecting internal and external social values (People) and operating within an ecological framework (Planet). TenCate s product portfolio is ideally suited to this since many materials, modules and systems inherently contribute to sustainability. The personnel policy is also appropriate in this regard. All employees within TenCate have access to 10Cate, which represents the identity of the company. These ten core values are universal within the worldwide company. 10Cate is centred on the customer and together with the TenCate business model provides the guiding principles for each employee. The environmental risks were limited as far as possible during the 2011 reporting year. Only chemicals and dyes listed in the national textile environmental database are used in the Netherlands. TenCate s market groups devote a great deal of attention to the control of production processes, rejects and (separate) waste flows. Waste water released during textile finishing is treated or pretreated and where possible reused (particularly in Georgia, US). To conserve energy, the Dutch plants use heat/cold exchangers between factory sites. Waste is processed in collaboration with recognised partners. TenCate purchases most chemicals and (raw materials for) synthetic fibres worldwide from multinationals which operate policies based on sustainability. The flame-retardant fabrics which TenCate purchases from Lenzing AG in Austria are an interesting example of this. These viscose fibres are produced from wood pulp sourced from sustainably managed forests in the mountains of Austria. Sustainable water management is part of the CSR approach adopted by this supplier to TenCate. These natural fibres are used among other things as the basis for heat- and fire-resistant fabrics developed and produced by TenCate Protective Fabrics. There was a further increase in the attention devoted by TenCate to CSR last year. There were various reasons for this, such as growing CSR awareness in the organisation and increasing customer demand for sustainable products. The following factors also play a role: cost savings (such as energy reduction), possible raw material scarcity, image and reputational benefits. On the basis of the cost leadership cornerstone, business units become aware that CSR saves costs or is at least cost-neutral. At the same time, it offers the opportunity to make more sustainability aspects visible to customers and end-users in the end-user marketing cornerstone. A growing number of market groups in TenCate see CSR as a way of increasing revenues. The subject of sustainable purchasing in particular is of growing importance to specific market groups. As market leader, TenCate aims to be among the front runners in the industry, including in terms of sustainability. During the 2011 reporting year, TenCate was active worldwide in numerous projects related to or aimed at corporate social responsibility. A full list can be found on TenCate s corporate website (under CSR projects). > In 2011, TenCate recorded an impressive economic performance and profitability while respecting social values and operating within an ecological framework. Many TenCate naterials, modules and systems inherently contribute to sustainability. < In Europe, North America, Africa and Asia, TenCate provided sponsorship during the reporting year for around ten sports events, for around ten student teams by providing composite and protective materials and for dozens of organisations, including veterans and firefighters support associations, and partly through volunteer work for a large number of events in local communities. TenCate has been the main sponsor of the Heracles Almelo professional football club for a number of years. This first-division club fulfils an important social and community role in the Almelo region. In Europe, TenCate played an active part in around 20 innovation projects centred on sustainability and safety during the reporting year. A full summary can be found on the TenCate website. Annual Report 2011 73

> CORPORATE INFORMATION TenCate was involved in numerous national and international committees during the year, including the European Technology Platform, ETP, Euratex, Modint and IAFI. In Europe, TenCate has been working with a number of universities in the Netherlands and abroad over the past decades, including Delft University of Technology, the University of Twente and Saxion University of Applied Sciences in Enschede. TenCate a Partner of the Cruyff Foundation On Wednesday 14 September 2011, Carole Thate (Director of the Cruyff Foundation) and Loek de Vries (President and CEO of TenCate) signed an extension to the partnership agreement between TenCate and the Cruyff Foundation, under the watchful eye of Johan Cruijff himself, the legendary number 14 of Dutch football. On that day the Cruyff Foundation had been in existence for 14 years. One of the foundation s initiatives is the creation of Cruyff Courts. TenCate has been involved as a partner of the Cruyff Foundation since the outset. The TenCate XP Blade fibre was specially developed for such intensively used playing areas. This fibre distinguishes itself from other synthetic turf fibres in terms of its durability, wear resistance and appearance. INITIATIVES FOR 2012 CSR Performance Ladder. Market groups in the Netherlands will be the first to implement the CSR Performance Ladder in 2012. Market groups in other countries are being encouraged to take part in the near future; CSR indicators. On the basis of the guidelines of the Global Reporting Initiative, CSR-related key performance indicators are being determined at corporate level. These KPIs will show even more clearly where TenCate stands worldwide on individual aspects of CSR. These are environmental aspects of the production process, safety and welfare, human resources, value chain management and social involvement; CSR measurements. By applying the principles and indicators from the GRI framework, it is possible to provide clearer and more extensive measurements and reports on TenCate s economic, sustainability and social performances; CSR reporting. Depending on the results of CSR measurements, it will be decided at the beginning of 2013 what quantitative CSR data can be included in the forthcoming annual report. At the same time efforts will be made to increase the existing qualitative CSR reporting. The new TenCate website will become an important information resource for stakeholders. Process ecotool. With the aid of the process ecotool, the fullest and clearest picture possible will be obtained in 2012 of the CO 2 footprint caused by the processes within the TenCate market groups ( inside the gate ) in the Netherlands (and as far as possible worldwide). The first interim report will be produced in mid-2012. An assessment of this worldwide trial measurement will be made at the beginning of 2013; Product ecotool. With the aid of specific product ecotools, the CO 2 footprint of a growing number of TenCate products ( outside the gate) will be determined in 2012. 74 Royal Ten Cate

> TenCate played an active part in around 20 innovation projects in Europe centred on the themes of sustainability and safety. < STATEMENT BY THE EXECUTIVE BOARD As the Executive Board of Royal Ten Cate, we have prepared the annual report and the financial statements for 2011. We declare that to the best of our knowledge: The financial statements give a true and fair view of the assets, liabilities and the financial position of the company and its consolidated businesses; The annual report gives a true and fair view of the position on the balance sheet date and the state of affairs of the company and its associated companies during the year and that the principal risks have been stated in the annual report. Almelo, 28 February 2012 Executive Board L. de Vries, President and CEO B.J.H. Cornelese, CFO Annual Report 2011 75

Financial statements 2011 Royal Ten Cate Consolidated profit and loss account 78 Consolidated statement of comprehensive income 79 Consolidated balance sheet 80 Consolidated cash flow statement 82 24 Share capital 93 25 Pension liabilities 93 26 Share-based payments 94 27 Provisions 94 28 Long-term debts 94 29 Trade creditors 95 30 Determination of fair value 95 Consolidated statement of changes in group equity 84 Notes to the consolidated financial statements 1 General Information on Royal Ten Cate 85 2 General principles for fi nancial reporting 85 3 Principles for the preparation of the fi nancial statements 85 4 Consolidation principles 86 5 Foreign currencies 87 6 Derivatives 87 7 Hedge accounting 87 8 Segment reporting 88 9 Revenues 88 10 Government subsidies 88 11 Raw materials and manufacturing supplies 88 12 Lease payments 88 13 Financial income and expenses 88 14 Profi t tax 89 15 Earnings per share 89 16 New standards and interpretations not yet applied 89 17 Principles for the preparation of the cash fl ow statement 90 18 Intangible assets 90 19 Tangible fi xed assets 91 20 Inventories 91 21 Trade debtors and other receivables 92 22 Cash and cash equivalents 92 23 Impairment 92 Notes to the statement of comprehensive income 31 Operating segments 96 32 Acquisitions and sale of participating interests 98 33 Personnel costs 99 34 Other operating costs 99 35 Net fi nancial expenses 100 36 Profi t tax 101 76 Royal Ten Cate Annual Report 2011

Notes to the consolidated balance sheet 37 Intangible assets 102 38 Tangible fi xed assets 104 39 Investments in associated companies and fi nancial fi xed assets 105 40 Deferred profi t tax assets and liabilities 107 41 Inventories 108 42 Trade debtors 109 43 Other receivables 109 44 Cash and cash equivalents 109 45 Total shareholders equity 109 46 Earnings per share 111 47 Long-term debts 112 48 Pension liabilities 113 49 Provisions 115 Other information 50 Financial instruments 116 51 Liabilities not shown in the balance sheet 122 52 Investment liabilities 122 53 Contingent liabilities 122 54 Post balance sheet events 122 55 Related parties 123 56 Estimates and judgments made by the management 124 Company financial statements 57 Company profi t and loss account 125 58 Company balance sheet (before appropriation of the result) 125 Notes to the company financial statements 59 Financial fi xed assets 126 60 Equity 126 61 Called and paid-up capital 126 62 Ordinary shares 127 63 Share premium reserve 127 64 Legal reserves 127 65 Other reserves 127 66 Option plan 128 67 Provisions 131 68 Long-term liabilities 131 69 Short-term liabilities 131 70 Auditor s fees 132 71 Liabilities not shown in the balance sheet 132 Other information 133 Ten-year summary 135 Royal Ten Cate Annual Report 2011 77

Consolidated profit and loss account For the financial year ending on 31 December, in millions of euros note 2011 2010 Revenues 31 1,138.8 984.5 Changes in inventories of finished products and work in progress 17.1 17.8 Raw materials and manufacturing supplies 586.3 501.1 Work contracted out and other external expenses 99.5 73.9 Personnel costs 33 205.2 188.0 Depreciation 38 35.0 34.5 Amortisation 37 12.9 10.4 Other operating costs 34 127.4 119.8 Total operating expenses 1,049.2 909.9 OPERATING RESULT 89.6 74.6 Financial income 35 0.2 0.6 Financial expenses 35 11.5 10.6 NET FINANCIAL EXPENSES 11.3 10.0 RESULT BEFORE PROFIT TAX 78.3 64.6 Profit tax 36 18.7 17.9 NET RESULT 59.6 46.7 Net result from associated companies 1.3 1.3 RESULT AFTER PROFIT TAX 58.3 45.4 Result attributable to: Shareholders of the company 58.7 46.0 Non-controlling interest 0.4 0.6 Result after profit tax 58.3 45.4 Weighted average number of shares (x 1,000) 46 25,452 25,026 Weighted average number of shares after dilution (x 1,000) 46 25,736 25,216 Earnings per share (in euros) 46 2.31 1.84 Diluted earnings per share (in euros) 46 2.28 1.82 The notes in sections 1 to 71 form an integral part of these financial statements. 78 Royal Ten Cate Annual Report 2011

Consolidated statement of comprehensive income For the financial year ending on 31 December, in millions of euros Note 2011 2010 RESULT AFTER PROFIT TAX 58.3 45.4 Other comprehensive income (after profit tax) Foreign currency translation differences for foreign activities 45 3.8 19.0 Effective part of changes in the hedging of reserves (hedge accounting) 45 0.9 3.4 Actuarial gains and losses on pensions * 14.1 3.8 OTHER COMPREHENSIVE INCOME AFTER PROFIT TAX 11.2 11.8 TOTAL COMPREHENSIVE INCOME AFTER PROFIT TAX 47.1 57.2 Attributable to: Shareholders of the company 47.4 57.4 Non-controlling interest 0.3 0.2 TOTAL RESULT PROFIT TAX 47.1 57.2 * Adjusted for change of accounting policy for pensions; see note 2. The notes in sections 1 to 71 form an integral part of these financial statements. Royal Ten Cate Annual Report 2011 79

Consolidated balance sheet in millions of euros note 31 December 2011 31 December 2010 NON-CURRENT ASSETS Goodwill 37 212.0 192.6 Other intangible assets 37 61.0 50.2 Tangible fixed assets 38 221.9 214.2 Investments in associated companies 39 4.6 5.2 Financial fixed assets 39 11.1 10.1 Deferred profit tax assets * 40 21.1 18.9 Total non-current assets 531.7 491.2 CURRENT ASSETS Inventories 41 267.9 216.9 Receivables Trade debtors 42 152.4 151.0 Profit tax receivables 6.5 0.7 Other receivables 43 22.2 18.1 Cash and cash equivalents 44 22.7 11.6 Total current assets 471.7 398.3 TOTAL ASSETS 1,003.4 889.5 * Adjusted for change of accounting policy for pensions; see note 2. 80 Royal Ten Cate Annual Report 2011

in millions of euros note 31 December 2011 31 December 2010 GROUP EQUITY 45 Share capital 64.8 63.8 Share premium reserve 44.8 45.8 Translation reserve 7.0 3.3 Hedging reserve 4.5 3.6 Reserve for own shares 15.6 10.4 Other reserves and undistributed result * 369.3 339.6 Total shareholders equity 465.8 438.5 Non-controlling interest 3.7 3.8 Group equity 469.5 442.3 NON-CURRENT LIABILITIES Long-term debts 47 275.1 195.2 Pension liabilities * 48 22.6 10.5 Provisions 49 15.0 10.2 Deferred profit tax liabilities 40 8.0 4.2 Total non-current liabilities 320.7 220.1 CURRENT LIABILITIES Cash loans, overdraft 44 35.4 55.7 Repayment of long-term debt 47 0.9 1.4 Trade creditors and other payables 169.1 159.3 Provisions 49 5.0 7.1 Profit tax liabilities 2.8 3.6 Total current liabilities 213.2 227.1 Total liabilities 533.9 447.2 TOTAL GROUP EQUITY AND LIABILITIES 1,003.4 889.5 * Adjusted for change of accounting policy for pensions; see note 2. The notes in sections 1 to 71 form an integral part of these financial statements. Royal Ten Cate Annual Report 2011 81

Consolidated cash flow statement For the financial year ending on 31 December, in millions of euros note 2011 2010 CASH FLOW FROM OPERATING ACTIVITIES Result after profit tax 58.3 45.4 Adjustments for: Depreciation 38 35.0 34.5 Amortisation 37 12.9 10.4 Net financing expenses before exchange rate differences 35 11.1 10.4 Profit tax 36 18.7 17.9 Net result from associated companies 1.3 1.3 Result from sale of tangible fixed assets 34 0.9 0.1 Costs of option scheme 1.9 1.4 Other 2.1 Change in provisions and pension liabilities 7.8 6.6 CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGE IN WORKING CAPITAL 128.4 114.6 CHANGES IN WORKING CAPITAL: Inventories 37.9 43.3 Receivables 9.9 36.0 Short-term liabilities 18.4 19.8 46.4 59.5 CASH FLOW FROM OPERATING ACTIVITIES 82.0 55.1 Interest paid 11.2 8.3 Profit tax paid 21.5 17.7 NET CASH FLOW FROM OPERATING ACTIVITIES 49.3 29.1 82 Royal Ten Cate Annual Report 2011

in millions of euros note 2011 2010 CASH FLOW FROM INVESTING ACTIVITIES Proceeds from sale of tangible fixed assets 34 3.4 0.9 Interest received 0.1 Acquisition of subsidiaries less cash acquired 32 29.3 24.0 Investments in intangible assets 37 4.4 5.1 Investments in tangible fixed assets 38 21.3 16.2 Investments in associated companies 39 5.5 0.2 Investments in other participating interests 39 0.5 Increase in long-term receivables 0.7 2.1 NET CASH FLOW FROM INVESTING ACTIVITIES 57.8 47.1 NET CASH FLOW FROM OPERATING AND INVESTING ACTIVITIES 8.5 18.0 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from exercise of share options 2.4 1.3 Paid for repurchase of own shares 7.6 Repayment of long-term debts 15.0 221.6 Drawing of long-term debts 69.5 203.8 Dividend payment to shareholders 6.3 5.9 NET CASH FLOW FROM FINANCING ACTIVITIES 43.0 22.4 CHANGE IN CASH AND CASH EQUIVALENTS 34.5 40.4 Cash and cash equivalents on 1 January 44 44.1 1.9 Exchange rate and translation differences in cash and cash equivalents 3.1 1.8 CASH AND CASH EQUIVALENTS ON 31 DECEMBER 44 12.7 44.1 The notes in sections 1 to 71 form an integral part of these financial statements. Royal Ten Cate Annual Report 2011 83

Consolidated statement of changes in group equity In millions of euros Share capital Share premium Translation reserve Hedging reserve Reserve for own shares Other reserves and undistributed result Total Noncontrolling interests Group equity BALANCE AS AT 1 JANUARY 2010 62.7 46.9 15.3 0.2 11.7 298.4 380.8 4.1 384.9 Effect of change of system 10.4 10.4 10.4 Adjusted balance as at 1 January 2010 62.7 46.9 15.3 0.2 11.7 308.8 391.2 4.1 395.3 TOTAL COMPREHENSIVE INCOME Result after profit tax 46.0 46.0 0.6 45.4 Actuarial gains and losses on defined benefit pension schemes 3.8 3.8 3.8 Currency translation differences 18.6 18.6 0.4 19.0 Hedging result after profit tax 3.4 3.4 3.4 Total 18.6 3.4 42.2 57.4 0.2 57.2 TRANSACTIONS WITH SHAREHOLDERS Dividend to shareholders 1.1 1.1 5.9 5.9 5.9 Share-based payment transactions 1.4 1.4 1.4 Issue of repurchased shares 1.3 1.3 1.3 Acquisition of non-controlling interest not leading to a change in control 6.9 6.9 0.1 7.0 Total 1.1 1.1 1.3 11.4 10.1 0.1 10.2 BALANCE AS AT 31 DECEMBER 2010 / 1 JANUARY 2011 63.8 45.8 3.3 3.6 10.4 339.6 438.5 3.8 442.3 TOTAL COMPREHENSIVE INCOME Result after profit tax 58.7 58.7 0.4 58.3 Actuarial gains and losses on defined benefit pension schemes 14.1 14.1 14.1 Currency translation differences 3.7 3.7 0.1 3.8 Hedging result after profit tax 0.9 0.9 0.9 Total 3.7 0.9 44.6 47.4 0.3 47.1 TRANSACTIONS WITH SHAREHOLDERS Dividend to shareholders 1.0 1.0 6.3 6.3 6.3 Share-based payment transactions 1.9 1.9 1.9 Repurchase of own shares 7.6 7.6 7.6 Issue of repurchased shares 2.4 2.4 2.4 Acquisition of non-controlling interest 1.0 1.0 Acquisition of non-controlling interest not leading to a change in control 10.5 10.5 1.2 9.3 Total 1.0 1.0 5.2 14.9 20.1 0.2 19.9 BALANCE AS AT 31 DECEMBER 2011 64.8 44.8 7.0 4.5 15.6 369.3 465.8 3.7 469.5 The notes in sections 1 to 71 form an integral part of these financial statements. 84 Royal Ten Cate Annual Report 2011

Notes to the consolidated financial statements ACCOUNTING STANDARDS 1 GENERAL INFORMATION ON ROYAL TEN CATE Koninklijke Ten Cate nv (Royal Ten Cate) (the Company) is established in Almelo, the Netherlands. The consolidated financial statements of the Company comprise the financial statements of the Company and its subsidiaries (referred to collectively as the Group ) and the Group s interests in other (nonconsolidated) participating interests, associated companies and proportionally consolidated joint ventures. The financial statements have been prepared by the Executive Board. The 2011 annual report and accounts were discussed at the meeting of the Supervisory Board on 28 February 2012. They were released for publication on 29 February 2012. They will be presented to the general meeting of shareholders for adoption on 19 April 2012. The parent company financial statements form part of Royal Ten Cate s 2011 financial statements. Royal Ten Cate has made use of the exemption pursuant to article 2:402 of Book 2 of the Netherlands Civil Code with regard to the parent company financial statements. The original financial statements were prepared in the Dutch language. This document is a version translated into English. In the event of any differences between the English and the Dutch text, the latter shall prevail. 2 GENERAL PRINCIPLES FOR FINANCIAL REPORTING The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, as adopted within the EU (hereinafter EU-IFRS) and with Part 9 of Book 2 of the Netherlands Civil Code. Change of accounting policy for pensions With effect from 2011, actuarial gains and losses arising in the calculation of the Group s pension commitment are credited or charged directly to Group equity (OCI method). Previously, these gains and losses were not recognised if they amounted to less than 10% of the higher of the present value of the gross commitment in respect of defined benefit pension rights and the fair value of the fund investments (Corridor method). This change has been made to better reflect changes in the pension provisions in the financial statements and anticipates the change in future IFRS standards. The change has been adopted retrospectively from 1 January 2010. The accounting policy change of system has no material effect on the result in 2010 and 2011 and no effect on earnings per share. The effect of the change of system on the balance sheet at the end of 2010 and 2011 is shown in the table at the foot of the page. 3 PRINCIPLES FOR THE PREPARATION OF THE FINANCIAL STATEMENTS The financial statements are presented in millions of euros (the euro being the Company s functional currency) unless stated otherwise. The financial statements have been prepared on the basis of historical cost, except for the following material balance sheet items, which are carried at fair value: derivatives and financial instruments held for trading purposes. In preparing the financial statements, the Executive Board has used estimates and assumptions which affect the application of accounting standards and reported amounts stated in the consolidated financial statements (see note 56). The actual results may differ from such estimates. The estimates and underlying assumptions are continuously assessed. Revised estimates are stated in the period in which the estimates are revised and in future periods in which the revision has consequences. The accounting principles set out below have been applied consistently by the Group s subsidiaries and joint ventures for the periods presented in these consolidated financial statements. Certain comparative information has been adjusted for the sake of comparability. 1 January 2010 31 December 2010 31 December 2011 Before change of system After change of system Before change of system Before change of system After change of system Before change of system Group equity 384.9 395.3 435.7 442.3 477.0 469.5 Pension liabilities 21.0 8.4 18.5 10.5 13.4 22.6 Deferred profit tax receivables 19.8 17.6 20.3 18.9 19.4 21.1 Royal Ten Cate Annual Report 2011 85

> NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4 CONSOLIDATION PRINCIPLES 4.1 Business combinations Business combinations are accounted for by the acquisition method as at the acquisition date, i.e. the date on which control passes to the Group. Control means the Group is able to determine an entity s financial and operational policy in order to obtain benefits from the entity s activities. In assessing control, the Group takes account of potential voting rights which can be exercised at that time. The Group determines the goodwill on the basis of the fair value of the consideration paid, the carrying amount of any non-controlling interest in the acquired undertaking and, if applicable, the fair value of the prior interest in the acquiree. The net amount of the identified assets acquired and the accepted liabilities is then deducted. If the difference is negative, a book profit from an advantageous purchase is stated directly in the profit and loss account. Any non-controlling interests are carried at their proportionate share of the carrying amount of identifiable assets of the acquired undertaking on the acquisition date. The paid consideration includes no amount for the settlement of existing relationships. Any such amount is stated in the profit and loss account. Transaction costs other than those related to the issue of loans or equity instruments allocated to the Group as a result of acquisitions are charged to the result when they arise. 4.2 Acquisition of non-controlling interests Acquired non-controlling interests are stated as transactions with shareholders (directly as a charge to equity) and no goodwill is therefore included. 4.3 Subsidiaries Subsidiaries are undertakings in which the Company directly and/or indirectly has a controlling interest. The financial statements of subsidiaries are included in the consolidated financial statements from the first date on which control is exercised to the date on which such control ends. Non-controlling interests in the Group s result and equity are stated separately. Losses in connection with non-controlling interests are allocated to the non-controlling interests, even if a deficit arises for the non-controlling interests in question. 4.4 Associated companies, joint ventures and other participating interests Associated companies are entities in which the Group has significant influence on the financial and operational policy, but in which it has no controlling interest. Significant influence is assumed to exist if the Group holds between 20% and 50% of the voting rights in another entity. Associated companies are accounted for using the equity method and are stated at cost including transaction costs on first-time inclusion. If the Group s share in losses exceeds the carrying value of the associated company, the carrying value is stated at zero and further losses are no longer stated, unless the Group has entered into a liability or has made payments on behalf of the associated company. Joint ventures are companies over which the Group has joint control and in which such control has been set forth in an agreement and in which strategic decisions on the financial and operational policy are taken on the basis of unanimity. Joint ventures are proportionally consolidated. Other participating interests over which no significant influence is exercised are carried at fair value and the dividend is stated in the profit and loss account when it is made payable. If no fair value is available and other methods do not result in a reasonable estimate, the investment is carried at cost less impairment. 4.5 Elimination of transactions on consolidation Intragroup balances and transactions between the subsidiaries in the Group and unrealised gains and losses on such transactions are eliminated in the preparation of the consolidated financial statements. Unrealised gains on Group transactions with proportionally consolidated joint ventures and investments stated in accordance with the equity method are eliminated in proportion to the Group s interest in the investment. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no indication of impairment. 86 Royal Ten Cate Annual Report 2011

5 FOREIGN CURRENCIES 5.1 Transactions in foreign currencies Receivables and liabilities denominated in foreign currencies are converted into euros at the rate prevailing on the reporting date. Transactions in foreign currencies are converted into euros at the exchange rate applying on the transaction date. Currency translation differences are stated in the profit and loss account. Non-monetary assets and liabilities which are denominated in foreign currencies and valued on the basis of historical cost are converted at the exchange rate on the transaction date. 5.2 Subsidiaries and joint ventures outside the eurozone The revenues and expenses of subsidiaries outside the eurozone are converted into euros at the exchange rate on the transaction date. Assets and liabilities including goodwill and fair value adjustments in respect of acquisitions are converted at the rate on the reporting date. The resulting translation differences are carried in other comprehensive income in equity. The proportionate share of the currency translation difference is allocated to any non-controlling interests. If an activity outside the eurozone is fully or partly divested, the accumulated exchange rate difference is transferred from equity to the profit and loss account as part of the result of the sale. The rates of the main currencies against the euro are as follows: Closing rate Average rate 2011 2010 2011 2010 US dollar 1.30 1.34 1.39 1.33 British pound 0.84 0.86 0.87 0.86 Danish krone 7.43 7.45 7.45 7.45 UAE dirham 4.77 4.93 5.11 4.88 Malaysian ringgit 4.11 4.10 4.25 4.29 Singapore dollar 1.68 1.71 1.75 1.81 Chinese yuan 8.16 8.82 8.99 9.00 Australian dollar 1.27 1.31 1.35 1.45 6 DERIVATIVES The Group uses derivatives in order to hedge exchange rate and interest rate risks resulting from operating, financing and investing activities. Examples are currency options and forward contracts as well as interest rate caps and swaps. In accordance with its treasury policy, the Group does not use derivatives for trading purposes. Nor does it issue such derivatives. Derivatives are treated as trading instruments. Derivatives are valued at fair value on first-time inclusion. The resulting income or expense is stated directly in the profit and loss account unless hedge accounting is applied (see section 7). The fair value of derivatives is the estimated amount which the Group would receive or would have to pay in order to terminate the derivative on the reporting date, taking into account the current exchange rates and the current interest rate. 7 HEDGE ACCOUNTING Where specific conditions are met, hedge accounting can be applied. Under these specific conditions, there must be a demonstrable relationship between the variability of the future cash flows or balance sheet positions (of the hedged item) and the hedging instrument, the relationship must be documented and the hedge must be sufficiently effective. The Group applies cash flow hedge accounting to interest rate derivatives. In this situation, the effective portion of the changes in the fair value of the derivative financial instrument is stated directly in other comprehensive income of the hedging reserve in equity. The ineffective portion of the changes in the fair value of the derivative financial instrument is stated directly in the profit and loss account. If the hedged future transactions are stated in the profit and loss account, the transfer takes place from equity to the profit and loss account or is stated in the cost price on the first-time inclusion of the non-financial asset or liability. If no hedge accounting is applied, profits or losses on the derivative financial instrument are stated directly in the profit and loss account. Royal Ten Cate Annual Report 2011 87

> NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 8 SEGMENT REPORTING An operating segment is a part of the Group conducting business activities which can result in revenues and expenses, including revenues and expenses associated with transactions with other parts of the Group. The Group determines and presents operating segments on the basis of the information reported internally to the Chief Operating Decision Maker (CODM) committees, which take the important operating decisions in the segment. The operating results of an operating segment are assessed periodically by the CODM committees in order to decide on the allocation of resources to the segment and for performance assessment. The investment expenses of a segment concern the total expenses incurred during the reporting period for the acquisition of tangible fixed assets and intangible assets with the exception of goodwill. The assets and liabilities of the segment concern items which are or may reasonably be allocated directly. Unallocated assets comprise profit tax receivables and cash and cash equivalents. The unallocated liabilities comprise interest-bearing loans and profit tax liabilities. 9 REVENUES Revenues comprise the revenues from goods and services supplied to third parties. These are stated at the fair value of the consideration received or to be received, less taxes and any volume, trade or payment discounts due. Revenues from sales of goods are recognised in the profit and loss account when the main risks and benefits of ownership have been transferred to the purchaser. Revenues from services supplied are recognised in the profit and loss account in proportion to the extent of performance of the work applying on the reporting date. No revenues are recognised if the extent of the revenues cannot be reliably determined and if significant uncertainties remain with regard to the collection of the remuneration due, the associated costs or the possible return of goods, and also if there is a protracted management involvement with such goods. The Group also carries out projects to manufacture assets under contracts with third parties. The costs relating to a project are recognised when they are incurred. As soon as the result of a project in progress can be reliably estimated, revenues from that project are recognised in proportion to its degree of completion. Expected losses on projects are stated immediately in the profit and loss account. 10 GOVERNMENT SUBSIDIES Subsidies granted as compensation for expenses incurred by the Group are systematically stated as income in the profit and loss account in the same period as that in which the subsidisable expenses are incurred and as soon as there is a reasonable certainty that they will be received and that the Group will fulfil the attached conditions. Subsidies granted to compensate the Group for the cost of an asset are systematically stated as cost of sales in the profit and loss account during the useful life of the asset. 11 RAW MATERIALS AND MANUFACTURING SUPPLIES The consumption of raw materials and manufacturing supplies is calculated on the basis of historical cost. 12 LEASE PAYMENTS Lease payments in respect of operational leasing are stated in the profit and loss account on a straight-line basis over the lease term. Remuneration received as an incentive to effect leases is stated as an integral part of the total lease costs in the profit and loss account over the lease term. Financial lease payments are stated partly as financial expenses and partly as a repayment of the outstanding liability. The financing costs are allocated to each period of the total lease term in such a way that this results in a constant periodic interest rate on the residual balance of the liability. 13 FINANCIAL INCOME AND EXPENSES Financial income and expenses include the interest income and expenses on invested and borrowed monies, interest charges on financial lease payments, foreign exchange rate differences, results from other participating interests and results of derivatives for which no hedge accounting is used and the realised and ineffective portion of the change in the fair value of derivatives for which hedge accounting is used. Interest income and expenses are stated in the profit and loss account as they accrue on the basis of the effective interest method. 88 Royal Ten Cate Annual Report 2011

Material financial expenses in the construction period which are directly attributable to the acquisition, construction or production of an eligible asset (which will require a considerable period before it is ready for use or sale) are capitalised as part of the costs of that asset. Dividend income from other participating interests is stated in the profit and loss account at the time at which the entity s right to payment is established. A deferred profit tax asset is only recognised in respect of unused tax losses, tax income and deductible temporary differences to the extent that it is likely that future taxable profits will be available which can be applied for the realisation of the timing difference. Deferred profit tax assets are reviewed on each reporting date and reduced if it is no longer likely that the associated tax benefit will be realised. 14 PROFIT TAX The tax on profit for the financial year includes the profit tax that is payable, available for set-off and deferred in respect of the reporting period. The profit tax is stated in the profit and loss account, except where it relates to items which are included directly in equity or in other comprehensive income. Profit tax that is payable and available for set-off in respect of the reporting period is the profit tax which is expected to be payable on the taxable result, calculated on the basis of tax rates which have been set on the reporting date, or on which a firm decision has been taken by the reporting date, and any corrections to profit tax payable in respect of previous years. Additional taxes on profit from dividend payments are stated at the same time as the liability to pay the respective dividend. A receivable / provision is recognised for deferred tax differences using the balance sheet liability method for temporary differences between the carrying value of assets and liabilities for the financial reporting and the fiscal carrying value of the items concerned. No provision is formed in respect of two temporary differences: non-tax-deductible goodwill and the difference between the economic and fiscal value of subsidiaries, associated companies, joint ventures and other participating interests. The amount of the provision for deferred profit tax liabilities is based on the method by which the carrying value of the assets and liabilities is expected to be realised or settled, using tax rates which, on the reporting date, have been specified by law or in material terms. Deferred profit tax assets and liabilities are offset if there is a legally enforceable right to offset the profit tax assets and liabilities and such assets and liabilities relate to profit tax imposed by the same tax authority on the same taxable entity, or on different taxable entities which intend to offset the profit tax assets and liabilities or whose profit tax assets and liabilities are realised simultaneously. 15 EARNINGS PER SHARE The Group presents ordinary and diluted earnings per share for the ordinary share capital. The earnings per ordinary share are calculated on the basis of the net result attributable to shareholders of the Group divided by the weighted average number of ordinary shares in issue during the reporting period (corrected to take account of own shares). In the calculation of the diluted earnings, the weighted average number of ordinary shares in issue during the reporting period is corrected to take account of the potential dilutive effect on the ordinary shares arising from the share options granted to employees. 16 NEW STANDARDS AND INTERPRETATIONS NOT YET APPLIED A number of new standards, amendments to standards and interpretations were not yet in force in 2011 and have therefore not been applied to these consolidated financial statements: IAS 19 revised Employee Benefits, which becomes compulsory in 2013. With effect from 2011 actuarial gains and losses have already been credited or charged directly to group equity. Annual pension expenses are also expected to increase as a result of this standard. This standard is expected to be applied from 2013. IFRS 11 Joint arrangements, which becomes compulsory in 2013 and may give rise to changes in the treatment of joint ventures and similar agreements. The effect of this standard on the Group is currently being examined. The impact is expected to be limited. The other new or amended standards are not expected to have any material effect on the Group s consolidated financial statements. Royal Ten Cate Annual Report 2011 89

> NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17 PRINCIPLES FOR THE PREPARATION OF THE CASH FLOW STATEMENT Cash flows from operating activities are presented on the basis of the indirect method. Cash flows in foreign currencies are converted at the exchange rate on the date of the cash flow or on a cash basis. Changes which have not resulted in cash flows, such as exchange rate differences, acquisitions, financial lease liabilities, changes in fair value, recognised share-related transactions and similar transactions are eliminated in this statement. Dividends paid to shareholders are included in the cash flow from financing activities. Dividends received are stated in the cash flow from investing activities, and interest paid is stated in the cash flow from operating activities. Overdrafts which are immediately repayable and form part of the Group s cash management are included in the balance of cash and bank current accounts as part of the consolidated cash flow statement. 18 INTANGIBLE ASSETS 18.1 Goodwill Details of the valuation of goodwill on first-time inclusion can be found in note 4.1. Goodwill is valued at cost less accumulated impairments. The carrying value of the goodwill on investments in associated companies is included in the carrying value of the respective investment. An impairment loss on an associated company is allocated to the carrying value of the associated company investment. Goodwill is allocated to cash generating units and is tested each year on the reporting date to assess whether there is any indication of impairment. 18.2 Other intangible assets The other intangible assets consist of: Research and development Expenses for research activities carried out with a view to acquiring new scientific or technical knowledge and insights are stated as an expense in the profit and loss account when they are incurred. Expenses for development activities, in which research results are used for a plan or design for the production of new or substantially improved products and processes, are capitalised if the development costs can be reliably determined, the product or process is technically and commercially feasible and the Group has sufficient resources to complete the development and use or sell the asset. The capitalised expenses include material costs, direct labour costs, financing costs and an appropriate portion of directly attributable overheads. Other development costs are stated as an expense in the profit and loss account when they are incurred. The capitalised development costs are valued at cost less accumulated amortisation and accumulated impairments (see note 23). Other intangible assets Other intangible assets acquired by the Group relate to customer relationships, trademark rights, patents, software and similar rights. These intangible assets are valued at cost less accumulated amortisation and accumulated impairments (see note 23). Costs of internally generated goodwill and trademarks are stated as an expense in the profit and loss account when they are incurred. 18.3 Expenses after first-time inclusion Expenses after the first-time inclusion of capitalised intangible assets are capitalised only if they lead to an increase in the future economic benefits embodied in the particular asset to which they relate. All other expenses are charged to the profit and loss account when they are incurred. 90 Royal Ten Cate Annual Report 2011

18.4 Amortisation Amortisation is calculated on the cost of the asset, less the residual value. Amortisation costs are charged on a straight-line basis to the profit and loss account in accordance with the estimated useful life of intangible assets. Goodwill is tested each year on the reporting date to assess whether any impairment has arisen. The amortisation of other intangible assets begins as soon as the assets are available for use. The estimated economic life is as follows: Development costs 5 years Other intangible assets 3 14 years The amortisation method, economic life and residual value are assessed periodically and adjusted if necessary. 19 TANGIBLE FIXED ASSETS 19.1 Owned assets Tangible fixed assets are valued at cost less accumulated depreciation (see 19.4) and accumulated impairments (see note 23). The cost of self-manufactured assets comprises material costs, direct labour costs and any other costs attributable directly to the preparation of the asset for use, any costs of dismantling and removing the asset, the costs of restoring the location in which the asset is held and capitalised financing costs. Where tangible fixed assets consist of components with differing useful lives, these are stated as separate items under tangible fixed assets. The profit or loss on the sale of a tangible fixed asset is determined by comparing the sales proceeds with the carrying value of the tangible fixed asset. The net difference is stated under other operating income/ expenses in the profit and loss account. 19.2 Leased assets Leases in which the Group actually assumes all the risks and benefits of ownership are classified as financial leases. Tangible fixed assets which are acquired by means of financial leases are valued on first-time inclusion at the lower of fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation (see note 19.4) and impairments (see note 23). Lease payments are stated as described in note 12. 19.3 Expenses after first-time inclusion Expenses incurred for the replacement of a component of a tangible fixed asset are capitalised provided the future economic benefits resulting from the asset accrue to the Group and the cost of such replacement expenses can be reliably determined. All other expenses are charged to the profit and loss account when they are incurred. 19.4 Depreciation Depreciation is calculated on the cost of an asset less the residual value. Depreciation is charged to the profit and loss account on the basis of the straight-line method over the estimated economic life of each component of a tangible fixed asset. Land is not depreciated. The estimated economic life is as follows: buildings 33 years fixtures and installations in buildings 10 years plant and equipment 7 10 years inventory 5 years computers and office equipment 3 5 years The depreciation method, economic life and residual value are assessed periodically and adjusted if necessary. 20 INVENTORIES Inventories are stated at the lower of cost or net realisable value. The cost of inventories is based on the FIFO (first in, first out) principle and includes the costs incurred for the acquisition of the inventories, their production or conversion and bringing them to the existing location and condition. In the case of inventories of finished products and work in progress, the cost includes in addition to the direct costs an appropriate portion of the indirect costs based on the normal production capacity. The net realisable value is the estimated sale price in ordinary operations, less the estimated costs of completion and the sale costs. Royal Ten Cate Annual Report 2011 91

> NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 21 TRADE DEBTORS AND OTHER RECEIVABLES Trade debtors and other receivables with a term of less than one year are stated at amortised cost less impairments. Projects in progress commissioned by third parties concern the gross amount yet to be charged that is expected to be collected from customers for the contract work carried out up to the reporting date. This item is carried at cost plus the profit recognised up to that time less invoiced instalments in proportion to the progress of the project and recognised losses. The cost includes all expenditure directly related to specific projects and an allocation of the fixed and variable indirect costs incurred. Projects in progress commissioned by third parties under contracts in which the amount of costs incurred plus the recognised profit is higher than the invoiced instalments are stated in the balance sheet under other receivables. If the amount of invoiced instalments is higher than the costs incurred plus recognised profit, the difference is stated in the balance sheet under trade creditors and other payables. 22 CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash balances and immediately claimable credit balances with an original term of three months or less. Overdrafts at banks which are immediately claimable and form an integral part of the Group s cash management are included as part of the cash and cash equivalents for the purposes of the cash flow statement. For the testing of impairments, assets which cannot be tested individually are combined into the smallest distinguishable group of assets which, as a result of continuous use, generates cash flow that is broadly independent of the incoming cash flows from other assets or groups of assets (the cash generating unit). Taking into account the maximum size of an operating segment before aggregation (the operating segment ceiling test ), cash generating units to which goodwill has been allocated for the testing of goodwill with regard to impairment are combined in such a way that the level at which such impairment is tested reflects the lowest level at which goodwill is monitored in internal reporting. Goodwill acquired in a business combination is allocated to groups of cash generating units which are expected to benefit from the synergy advantages of the combination. 23.1 Calculation of the realisable value The realisable value is the higher of the recoverable amount, less costs to sell, and the value in use. In determining the value in use, the present value of the estimated future cash flows is calculated using a discount rate before tax which reflects both the current market valuations of the time value of money and the specific risks relating to the asset or cash generating unit. In the case of an asset which generates no cash receipts that are largely independent of other assets, the realisable value is determined for the cash generating unit to which the asset belongs. 23 IMPAIRMENT The carrying value of the Group s assets, except that of inventories (see note 20) and deferred profit tax assets (see note 14) is examined at each reporting date in order to determine whether there are indications of impairment. If there are such indications, an estimate is made of the realisable value of the asset. In the case of goodwill and intangible assets which are not yet available for use, the realisable value is estimated at each reporting date. This also applies if there is an indication of impairment. An impairment is recognised when the carrying value of an asset or the cash generating unit thereof is higher than the estimated realisable value. It is first charged to any allocated goodwill and then deducted proportionately from the carrying value of the other assets. 92 Royal Ten Cate Annual Report 2011

23.2 Reversal of impairments An impairment relating to goodwill cannot be reversed. In the case of other assets, an assessment is made on the reporting date as to whether an impairment must be reversed if there is a change in the estimates on which the realisable value was based. An impairment is only reversed to the extent that the carrying value of the asset is not higher than the carrying value which would have been determined after the deduction of depreciation, if no impairment had been recognised. Goodwill which is part of the carrying value of an investment in an associated company is not recognised separately and therefore not tested separately for impairment. Instead, the total amount of the investment in an associated company is tested for impairment as a single asset if there are objective indications that the investment in an associated company may be subject to impairment. 24 SHARE CAPITAL 24.1 Share capital The share capital is classified as equity. 24.2 Repurchase of own shares On the repurchase of share capital which is stated in the balance sheet as equity, the amount of the paid consideration, including directly attributable costs, is stated as a change in equity. Repurchased shares are classified in the reserve for own shares and presented as a deduction from total equity. 24.3 Dividend Dividend is stated as a liability in the period in which it is declared. 25 PENSION LIABILITIES 25.1 Defined contribution schemes Liabilities relating to contributions to defined contribution pension schemes are charged to the profit and loss account in the period to which they relate. 25.2 Defined benefit schemes The Group s net liability in respect of defined benefit pension schemes is calculated separately for each scheme by estimating the amount of the future entitlement which employees have earned in the present and previous reporting periods in exchange for their services. This entitlement is discounted in order to determine the present value, with the fair value of the fund investments being deducted. The discount rate is the yield on the reporting date of bonds which have an AA credit rating and a period to maturity which approximates the term of the Group s liabilities and are denominated in the currency in which the entitlements arise. The calculation is performed by an authorised actuary on the basis of the projected unit credit method. If the entitlements under a pension scheme are increased, the proportion of the higher entitlement which relates to employees past service is stated as an expense in the profit and loss account on a straight-line basis over the average period up to the vesting of the rights. If the rights are vested immediately, the expense is stated immediately in the profit and loss account. Actuarial gains and losses in respect of a pension scheme are credited or charged directly to group equity. If the calculation results in a receivable for the Group, the recognised asset item is limited to an amount not exceeding any unrecognised back-service costs and the present value of economic benefits in the form of any future repayments by the fund or, if lower, future pension contributions. Royal Ten Cate Annual Report 2011 93

> NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 26 SHARE-BASED PAYMENTS The option scheme enables the Group s management to acquire shares in Royal Ten Cate. The fair value of the granted options is stated under personnel costs, with a corresponding entry in equity. The fair value is determined on the grant date and is allocated over the period up to the time at which the management acquires an unconditional right to the options. The amount stated as costs is adjusted annually to the number of options which will be exercised. The fair value of the granted options is determined on the basis of the binomial model, taking account of the conditions under which the options have been granted. Valuation factors include the share price on the valuation date, the exercise price of the instrument, the expected volatility, the weighted average expected term of the instruments (based on past experience and the conduct of the instrument holders), the expected dividends and the risk-free interest rate (based on government bonds). 27 PROVISIONS A provision is recognised in the balance sheet if there is a legally enforceable or actual obligation as a result of a past event and it is likely that an outflow of resources will be required to settle such liability and such outflow can be reliably estimated. If the effect of this is material, the provisions are determined by discounting the expected future cash flows using a discount rate before profit tax which reflects the current market valuations of the time value of money and, if necessary, the specific risks of the liability. Interest accrual is stated as a financial expense. 27.1 Claims and guarantees The provision for claims relates to damages claims and any litigation costs. The provision for guarantees relates to goods and services supplied and is based on historical guarantee data. 27.2 Reorganisation Reorganisation provisions are included if the Group has formalised a detailed plan for the reorganisation and has begun or publicly announced the reorganisation. The reorganisation provision does not include costs incurred in relation to future activities. 27.3 Other personnel liabilities Long-service leave and other allowances such as anniversaries form part of the provisions under other personnel liabilities. These provisions are accumulated over the respective period as in the case of defined benefit pension schemes, except that actuarial gains or losses are recognised in the profit and loss account in the period in which they arise. 27.4 Environment In accordance with the Group s published environmental policy and the applicable legal obligations, a provision for the clearance of environmental pollution is recognised when the pollution occurs. 27.5 Onerous contracts A provision is recognised in the balance sheet for onerous contracts if the benefits which the Group expects to obtain from a contract are lower than the unavoidable costs of fulfilling the liabilities under the contract. The provision is valued at the lower of the present value of the expected costs of terminating the contract and the present value of the expected net costs of continuing the contract. 28 LONG-TERM DEBTS When included for the first time, interest-bearing loans received are stated at fair value less directly attributable transaction costs. After first-time inclusion, interest-bearing loans are carried at amortised cost, with the difference between the cost and the redemption price being stated in the profit and loss account on the basis of the effective interest method over the term of the loans. 94 Royal Ten Cate Annual Report 2011

29 TRADE CREDITORS Trade creditors and other payables are carried at amortised cost. 30 DETERMINATION OF FAIR VALUE A number of principles and the Group s information provision require the determination of the fair value of both financial and non-financial assets and liabilities. For the purposes of valuation and information provision, the fair value is determined on the basis of the following methods. If applicable, further information on the principles for determining the fair value is provided in the section of these notes applying specifically to the respective asset or the respective liability. Tangible fixed assets The fair value of tangible fixed assets included as a result of a business combination is the estimated amount for which a property could be traded on the valuation date between a willing buyer and a willing seller in an arm s length transaction after proper marketing in which the parties have each acted prudently and knowledgeably. The market value of other tangible fixed assets and inventories is based on the listed market prices of comparable assets and items where available, and on replacement costs where applicable. Inventories The fair value of inventories acquired as part of a business combination is determined on the basis of the estimated sale price in normal business operation, less the estimated costs of completion and the sale costs, plus a reasonable profit margin reflecting the completion and sale effort. Trade debtors and other receivables The fair value of trade debtors and other receivables, excluding projects in progress commissioned by third parties, is estimated at the present value of the future cash flows, on the basis of the market interest rate applying on the reporting date. This fair value is determined for information purposes or if the trade debtors and other receivables are acquired by means of a business combination. Intangible assets The fair value of patents and trademarks acquired as part of a business combination is determined on the basis of the discounted estimated royalties which have been avoided as a result of ownership of the patent or trademark. The fair value of customer relationships acquired in a business combination is determined using the excess earnings method over several periods, with the respective assets being valued after deduction of a real return on all other assets which jointly constitute the associated cash flows. The fair value of other intangible assets is based on the expected present value of the cash flow from the use and ultimate sale of the asset. Royal Ten Cate Annual Report 2011 95

Notes to the profit and loss account 31 OPERATING SEGMENTS The Group consists of three segments, as described below. The segments offer a range of products and services, are managed separately and use various technologies. The summary below describes the activities of the various segments of the Group: Advanced Textiles & Composites Manufacture and sale of protective and safety fabrics for professional wear, outdoor fabrics, composites for personal and vehicle protection and composites for industrial applications and technological applications in aerospace. Geosynthetics & Grass Manufacture and sale of fabrics, non-wovens and grids for civil engineering, environmental projects, recreational and industrial applications and manufacture and sale of synthetic turf fibres and backing for a range of applications. Other activities Manufacture and sale of rubber and foam rollers for the office equipment industry and related products, development, production and sale of inkjet technology and related components for industrial applications, as well as country holding companies and service companies. Limited transactions take place between the segments. The prices for these transactions are determined on an objective business basis. There is no segment in which the Group depends on sales to a single customer for all its revenues. Analysis by geographic location The segments operate on four continents, namely Europe, North America, Australia and Asia. In the presentation of information based on geographic segments, the revenues of the segment are based on the geographic location of origin. The assets of the segments are based on the geographic location of the assets. The following page contains an overview of each of the reporting segments. The performance is determined on the basis of the operating result of the sector, as stated in the internal management report to the CODM committees. 96 Royal Ten Cate Annual Report 2011

31.1 Analysis by operating segment Advanced Textiles & Composites Geosynthetics & Grass Other activities Elimination between the segments Consolidated In millions of euros 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 EXTERNAL REVENUES 538.4 448.4 525.9 469.3 74.5 66.8 1,138.8 984.5 Revenue from transactions between segments 1.2 0.8 0.7 0.4 5.6 14.2 7.5 15.4 Depreciation and amortisation 15.3 15.2 28.9 26.2 3.7 3.5 47.9 44.9 OPERATING RESULT 64.7 38.6 20.8 27.7 4.1 8.3 89.6 74.6 Financial income 1 0.2 0.2 Financial expenses 1 11.3 10.6 Profit tax 18.7 17.9 Net result from associated companies 1.3 1.3 1.3 1.3 ASSETS AND LIABILITIES Assets of segments 387.2 352.5 484.7 432.1 76.8 68.0 948.7 852.6 Investments in associated companies 4.6 5.2 4.6 5.2 Investments in other participating interests 0.5 0.5 Unallocated assets * 50.1 31.2 Total assets 387.2 353.0 489.3 437.3 76.8 68.0 1,003.4 889.5 Liabilities of segment *,2 82.1 77.7 80.1 72.8 49.6 36.6 211.8 187.1 Unallocated liabilities 322.1 260.1 Total liabilities 82.1 77.7 80.1 72.8 49.6 36.6 533.9 447.2 Investment expenditure 8.3 4.5 12.2 9.9 5.2 6.9 25.7 21.3 * Adjusted for change of accounting policy of pensions; see note 2. 1 Excluding 0.2 million consolidated translation differences (2010: 0.4 million). 2 Excluding intercompany loans. Royal Ten Cate Annual Report 2011 97

> NOTES TO THE PROFIT AND LOSS ACCOUNT 31.2 Analysis by geographic location Revenues by origin Non-current assets by origin 2011 2010 2011 2010 Netherlands 232.9 178.0 65.9 57.6 Rest of Europe 197.9 170.8 103.5 100.8 North America 544.7 484.8 154.2 141.4 Asia / Australia / Middle East 163.3 150.9 175.9 162.4 TOTAL 1,138.8 984.5 499.5 462.2 * Non-current assets exclude derivative financial instruments and deferred profit tax receivables. 32 ACQUISITIONS AND SALE OF PARTICIPATING INTERESTS 32.1 Acquisitions On 25 February 2011, the Group acquired control of the GreenFields group ( GreenFields ). The Group now holds 90% of the shares in GreenFields, representing an increase of 58% compared to 31 December 2010. The other shareholder in GreenFields has the right to acquire an additional 5% interest if certain return requirements are met. GreenFields develops and markets synthetic turf systems mainly for sports applications, both directly and through partners. Due to its welldeveloped international network and high-quality support, GreenFields has secured a relevant share of the FIFA related market as a FIFA Preferred Producer. For reporting purposes, this acquisition has been included in the Geosynthetics & Grass sector. On 18 March 2011, the Group completed the acquisition of the assets of Emas Kiara Industries Berhad (Rawang, Malaysia). Emas Kiara Industries is a full-line producer and supplier of a wide range of geosynthetic products and solutions, focusing primarily on the Asian markets. The addition of Emas Kiara s production facilities, employees and product brands will strengthen the position of TenCate Geosynthetics in this fastgrowing region of the world. These activities are concentrated on the fast-growing environmental, infrastructure and water management applications in the region. For reporting purposes, this acquisition has been included in the Geosynthetics & Grass sector. * On 10 May 2011, TenCate acquired the assets of Difco Performance Fabrics Inc in Montreal (Quebec, Canada). The assets acquired by TenCate include all brand names of Difco and other intellectual property rights relating to Difco s portfolio of protective fabrics products. Inventories and trade receivables have also been acquired. This transaction will expand TenCate s commercial presence and production activities in the protective fabrics markets in the United States and Canada. For reporting purposes, this acquisition has been included in the Advanced Textiles & Composites sector. On 7 June 2011, the Group reached an agreement with the receiver to acquire the tangible and intangible assets of the insolvent company Osiris Inkjet Systems B.V. of Hengelo. On 16 November 2011, TenCate acquired a controlling interest in ABDS ApS. As at 31 December 2011, TenCate held 51% of the shares of ABDS (end of 2010: 10%). In December 2011, agreement was reached with the other shareholders on the acquisition of all the shares; this transaction was completed at the beginning of 2012. ABDS ApS was fully consolidated at the end of 2011. ABDS ApS is engaged in the development and market preparation of the TenCate ABDS active blast countermeasure system intended to protect army vehicles against roadside bombs. The system is scheduled to be deployed in the course of 2012-2013. This acquisition has been included in the Advanced Textiles & Composites sector. These acquisitions are being accounted for in accordance with the acquisition method (IFRS 3). The acquisition amounts have been allocated to the identified acquired assets and liabilities, based on the fair value. The purchase price allocations for the aforementioned acquisitions have not yet been completed. 98 Royal Ten Cate Annual Report 2011

32.2 Effects of the acquisition of subsidiaries The effect of the above acquisitions on the assets and liabilities was as follows: Identifiable acquired assets and liabilities Tangible fixed assets 18.9 Intangible fixed assets 18.2 Financial fixed assets 0.1 Inventories 4.0 Trade debtors and other receivables 11.4 Cash and cash equivalents 3.0 Other reserves 9.2 Non-controlling interest 1.0 Deferred profit tax liabilities 2.6 Other provisions 5.0 Interest-bearing loans 14.3 Banks, current accounts 1.5 Trade creditors and other payables 12.9 Net identifiable assets and liabilities 29.5 Goodwill on acquisition 14.0 Purchase price 43.5 Value of existing interest 2.6 Outstanding amount payable 10.1 Acquired cash less short-term bank debts 1.5 Cash outflow 29.3 The acquisitions have been combined in the above table because none of the acquired undertakings is material in its own right. The expected synergy effects for the Group result in a total of 9.1 million of goodwill paid for the acquisitions. The goodwill has also risen by 4.9 million in connection with the finalisation of a purchase price allocation. The goodwill is not deductible for tax purposes. The effect of the acquisitions on 2011 revenues and results after tax amounts to 51.5 million and 1.3 million respectively. The revenues and net results would not differ materially if the acquisition had taken place on 1 January 2011. The Group incurred acquisition-related costs of 1.4 million in respect of external legal advice, due diligence and stamp duty. 33 PERSONNEL COSTS 2011 2010 Wages and salaries 149.7 139.2 Social charges 29.8 26.8 Costs of option scheme 1.9 1.4 Pension costs 4.3 5.2 Temporary personnel 14.7 10.6 Other personnel costs 4.8 4.8 205.2 188.0 The pension costs comprise 0.7 million (2010: 1.7 million) in respect of defined benefit pension schemes (see note 48.3) and 3.6 million (2010: 3.5 million) in respect of defined contribution schemes. The average number of employees (permanent and temporary) in the Group in 2011 was 4,797 (2010: 4,376). 34 OTHER OPERATING COSTS In 2011, an amount of 9.2 million was charged to other reserves in connection with transactions with non-controlling shareholders to acquire the remaining interest in ABDS ApS and the completion of a purchase price allocation. In 2010, an amount of 6.9 million was charged to other reserves in connection with transactions with noncontrolling shareholders to acquire the remaining interests in AML and TigerTurf. 34.1 Government subsidies The Group s profit and loss account includes 2.4 million of government subsidies in 2011 (2010: 2.8 million). The subsidies relate particularly to subsidised research and development projects. Royal Ten Cate Annual Report 2011 99

> NOTES TO THE PROFIT AND LOSS ACCOUNT 34.2 Research and development The costs associated with research and development amounted to 12.2 million in 2011 (2010: 9.2 million), of which 7.6 million (2010: 6.7 million) has been stated in personnel costs and 4.6 million (2010: 2.5 million) in Other operating costs. 34.4 Result of acquisition of controlling interests The Other operating costs include a result of 2.1 million for the acquisition of controlling interests in GreenFields and ABDS ApS. This result is connected to the fair value adjustments to the interests and the settlement of existing relationships. 34.3 Book profit on sale of tangible fixed assets The Group sold land and buildings in 2011 on which a total book profit of 0,9 million was recorded (2010: 0.1 million). 34.5 Operating lease expenses The Group included 8.5 million of expenses relating to operating leases in other operating costs in 2011 (2010: 8.4 million). 2011 2010 Land and buildings 0.7 Other 0.2 0.1 Result from sale 0.9 0.1 Book value of sold assets 2.5 0.8 Proceeds from sale 3.4 0.9 35 NET FINANCIAL EXPENSES 2011 2010 Interest income 0.2 0.2 Foreign currency translation differences 0.4 Financial income 0.2 0.6 Interest expenses 8.0 6.4 Realised change in the fair value of derivatives for which hedge accounting is used 2.8 2.8 Ineffective portion of the change in the fair value of derivatives for which hedge accounting is used 0.2 0.1 Result of derivatives for which no hedge accounting is used 0.3 1.3 Foreign currency translation differences 0.2 Financial expenses and impairment 11.5 10.6 Net financial expenses 11.3 10.0 100 Royal Ten Cate Annual Report 2011

36 PROFIT TAX 2011 2010 Profit tax payable Current financial year 16.9 21.3 Recognition of previously unrecognised tax losses 0.2 0.7 Overprovision in previous years 0.7 0.1 16.0 20.5 Deferred tax profit Origination and reversal of temporary differences 4.2 2.5 Recognition of previously unrecognised tax losses 0.1 1.5 Change in unrecognised temporary differences 1.1 1.2 Change in tax rates 0.3 0.2 2.7 2.6 Total profit tax charge in profit and loss account 18.7 17.9 Reconciliation with applicable profit tax rate 2011 2010 Result before profit tax 78.3 64.6 Tax on profit at average weighted local profit tax rate 29.8% 23.3 27.6% 17.8 Non-tax-deductible costs 1.4% 1.1 0.9% 0.6 Tax-exempt income 6.9% 5.4 4.5% 2.9 Prior year adjustments 0.9% 0.7 Change in tax rates 0.4% 0.3 0.3% 0.2 Losses in reporting year for which no tax losses have been recognised 2.4% 1.9 5.1% 3.3 Change in prior year tax losses for which no deferred tax is recognised 0.4% 0.3 3.4% 2.2 Change in unrecognised deferred tax assets in respect of valuation differences 1.4% 1.1 1.9% 1.2 Other items 0.3% 0.2 0.2% 0.1 Tax charge in the profit and loss account 23.9% 18.7 27.7% 17.9 The rise in the weighted average tax rate from 27.6% to 29.8% results particularly from changes in the various countries shares in the result before profit tax. In comparison with 2010, a larger share of the result was generated in countries with a relatively higher tax rate in 2011. Royal Ten Cate Annual Report 2011 101

Notes to the consolidated balance sheet in million of euros 37 INTANGIBLE ASSETS Goodwill Development Other intangible assets Total Cost Balance as at 1 January 2010 163.9 5.1 62.4 231.4 Acquisitions 21.9 11.3 33.2 Investments 4.9 0.2 5.1 Exchange rate differences 9.2 3.5 12.7 Balance as at 31 December 2010 195.0 10.0 77.4 282.4 Acquisitions 14.0 18.2 32.2 Investments 3.0 1.4 4.4 Exchange rate differences 5.5 0.3 2.5 8.3 Balance as at 31 December 2011 214.5 13.3 99.5 327.3 Amortisation Balance as at 1 January 2010 2.0 0.7 24.9 27.6 Amortisation 0.9 9.5 10.4 Exchange rate differences 0.4 1.2 1.6 Balance as at 31 December 2010 2.4 1.6 35.6 39.6 Amortisation 1.3 11.6 12.9 Exchange rate differences 0.1 0.1 1.6 1.8 Balance as at 31 December 2011 2.5 3.0 48.8 54.3 Book value Balance as at 1 January 2010 161.9 4.4 37.5 203.8 Balance as at 31 December 2010 192.6 8.4 41.8 242.8 Balance as at 31 December 2011 212.0 10.3 50.7 273.0 102 Royal Ten Cate Annual Report 2011

37.1 Amortisation/impairment The Group recognised no impairment losses on intangible assets in 2011 (2010: 0). 37.2. Impairment testing for cash generating units which include goodwill The following units include goodwill items: 2011 2010 TenCate Grass 120.0 104.9 TenCate Advanced Armour EU 36.0 35.8 TenCate Advanced Composites USA 20.2 19.5 TenCate Advanced Armour USA 22.6 21.8 Others 13.2 10.6 Total 212.0 192.6 The Group tested the existing goodwill for impairment in 2011. The realisable value has been determined on the basis of the value in use. The value in use is based on the future cash flows over the forthcoming four years, based on historical empirical data, market expectations and strategic plans. No growth rate is applied for the period beyond four years. The value in use in 2011 has been determined in the same way as in 2010. On the basis of this test, no goodwill impairment has been recognised. The changes in 2011 related to acquisitions, the finalisation of the purchase price allocation for TigerTurf and exchange rate differences. Revenue growth The expected revenue growth is expressed as the compound annual growth in the first four years of the schedules used to test impairment and is based on past experience, market expectations and strategic plans. Gross margin The gross margin is the margin based on cost prices (in accordance with the inventory valuation principles) as a percentage of expected revenues. 2015 is the final year of the cash flow forecast. The 2015 cash flow forecast is also used to calculate the perpetual cash flow. Sensitivity to changes in assumptions We have examined the sensitivity of the principal assumptions (discount rate, revenue growth and gross margin) and concluded that an increase of the discount date or a decrease of the gross margin as a percentage of revenues by more than a 90-basis-point the book value exceeds the recoverable amount in the Grass unit. With regard to the other cashgenerating units, it was concluded that on a reasonable basis an adjustment to one of these assumptions would not cause the carrying value to exceed the realisable value. 37.3 Amortisation The amortisation of 12.9 million (2010: 10.4 million) has been stated in Amortisation in the profit and loss account. Principal assumptions made in estimating the present value of cash flows The principal assumptions made in calculating the realisable value concern discount rates, revenue growth and gross margins. Discount rate The discount rate is a pre-tax measure based on the risk-free interest rate in the government bond market, adjusted for the risk premium for both the higher risk of securities investments and TenCate s systemic risk. The pre-tax discount rates used range from 8.6% to 11.2% (2010: 7.7% to 9.9%). The discount rates used have risen compared to 2010, particularly due to an increase in the risk-free interest rate. Royal Ten Cate Annual Report 2011 103

> NOTES TO THE CONSOLIDATED BALANCE SHEET 38 TANGIBLE FIXED ASSETS Land and operating buildings Plant and equipment Other operating assets Operating assets under construction Total Acquisition value Balance as at 1 January 2010 126.6 389.2 42.6 8.0 566.4 Acquisitions 0.8 4.1 1.5 0.3 6.7 Investments 6.2 10.7 2.0 2.7 16.2 Divestments 1.1 2.1 0.2 3.4 Exchange rate differences 5.3 13.8 1.4 1.1 21.6 Balance as at 31 December 2010 137.8 415.7 47.3 6.7 607.5 Acquisitions 6.9 10.7 1.3 18.9 Investments 1.3 22.1 2.8 4.9 21.3 Divestments 5.4 2.1 0.8 8.3 Exchange rate differences 2.6 7.2 0.6 0.3 10.7 Balance as at 31 December 2011 143.2 453.6 51.2 2.1 650.1 Depreciation Balance as at 1 January 2010 56.9 260.8 34.0 351.7 Depreciation 5.7 25.7 3.1 34.5 Divestments 0.5 2.0 0.1 2.6 Exchange rate differences 1.8 7.2 0.7 9.7 Balance as at 31 December 2010 63.9 291.7 37.7 393.3 Depreciation 5.7 25.8 3.5 35.0 Divestments 3.2 1.9 0.7 5.8 Exchange rate differences 0.8 4.5 0.4 5.7 Balance as at 31 December 2011 67.2 320.1 40.9 428.2 Book value Balance as at 1 January 2010 69.7 128.4 8.6 8.0 214.7 Balance as at 1 January 2011 73.9 124.0 9.6 6.7 214.2 Balance as at 31 December 2011 76.0 133.5 10.3 2.1 221.9 104 Royal Ten Cate Annual Report 2011

38.1 Impairment and reversal of impairment The Group recognised no impairment of tangible fixed assets in 2011 (2010: 0). No impairment losses were reversed during the year. 38.2 Leased buildings, plant and equipment The Group leases buildings, plant and equipment under a number of financial leases. The net carrying value of these assets as at 31 December 2011 was 4.8 million (31 December 2010: 5.4 million). The leased buildings, plant and equipment serve as collateral for the financial lease liabilities (see note 47). 38.3 Collateral As at 31 December 2011, plant and equipment belonging to Ten Cate Union Protective Fabrics Asia Ltd worth 7.0 million (2010: 7.1 million) was pledged as collateral for a credit facility of 9.8 million (2010: 10.1 million). 6.8 million of this credit facility was drawn as at the end of 2011 (2010: 6.3 million). 38.4 Depreciation charge The depreciation charge of 35.0 million (2010: 34.5 million) has been stated in depreciation in the profit and loss account. 39 INVESTMENTS IN ASSOCIATED COMPANIES AND FINAN- CIAL FIXED ASSETS 39.1 Associated companies On 25 May 2011, TenCate acquired a 30% interest in the associated company Hellas Construction Inc in Austin (Texas, United States of America). Hellas focuses on the construction of synthetic turf pitches and athletics tracks in North America. From December 2011, TenCate also has the option to raise its interest by 7% per year over the next three years at an acquisition price dependent on the EBITDA generated by Hellas. The investment in associated companies in 2010 relates to an increase in the interest in Landscape Solutions B.V. from 20% to 25% due to a restructuring of Landscape Solutions B.V. The associated companies item relates to the 30% interest in the shares of Hellas and the 25% interest in the shares of Landscape Solutions B.V. at the end of 2011. The share in the net income of associated companies amounted to 1.3 million (2010: 1.3 million). As a result of the increase in the additional interest in TigerTurf, net income of 0.1 million has been stated in the result from associated companies in 2010, relating to the realisation of currency translation differences and fair value adjustments to the interest and the operating income to 28 April 2010 inclusive. The Group received no dividend payments from associated companies in 2011 (2010: 0). The associated companies have a carrying value of 4.6 million as at 31 December 2011 (31 December 2010: 5.2 million). Royal Ten Cate Annual Report 2011 105

> NOTES TO THE CONSOLIDATED BALANCE SHEET Associated companies and joint ventures The summary financial data have not been adjusted in respect of the percentage owned by the Group and can be analysed as follows as at 31 December: 2011 2010 Non-current assets 26.8 10.9 Current assets 26.8 24.4 Total assets 53.6 35.3 Current liabilities 18.7 21.3 Non-current liabilities 7.7 12.9 Total liabilities 26.4 34.2 Revenues 64.8 78.6 Costs 69.0 88.5 Profit/(loss) 4.2 9.9 The changes in the associated companies item were as follows: Other participating interests The other participating interest concerns Performance Fabrics and Fibers LLC (PFF), Andrews (South Carolina) 16%. On 24 September 2010 the Group acquired a 10% interest in ABDS ApS. In 2011 a controlling interest was acquired in ABDS (see note 32.1). 2011 2010 Balance as at 1 January 0.5 Investments 0.5 Divestments due to acquisition of control 0.5 Balance as at 31 December 0.5 Other long-term receivables and investments The main long-term receivables and investments concern invested pension assets at a number of American subsidiaries of 8.2 million (2010: 7.2 million) and an advance payment in connection with longterm lease rights in China and Malaysia amounting to 2.2 million (2010: 2.1 million). 2011 2010 Balance as at 1 January 5.2 18.9 Investments 5.5 0.2 Divestment as a result of acquiring control 5.2 12.6 Result 1.3 1.3 Currency translation differences 0.4 Balance as at 31 December 4.6 5.2 39.2 Financial fixed assets The financial fixed assets can be analysed as follows: 2011 2010 Other participating interests 0.5 Other long-term receivables and investments 11.1 9.6 Balance as at 31 December 11.1 10.1 106 Royal Ten Cate Annual Report 2011

40 DEFERRED PROFIT TAX ASSETS AND LIABILITIES The deferred profit tax assets and liabilities recognised in the balance sheet are attributable to the following items: Receivables Liabilities Net 2011 2010 2011 2010 2011 2010 Intangible assets 9.1 10.1 9.1 10.1 Tangible fixed assets 13.1 5.1 13.1 5.1 Financial fixed assets 0.1 0.1 Inventories 5.6 5.3 5.6 5.3 Derivatives 1.9 1.3 1.9 1.3 Other receivables 0.7 1.0 0.7 1.0 Pension provisions 2.2 4.2 2.2 4.2 Other provisions 9.6 4.1 9.6 4.1 Tax value of loss carry-forwards 12.9 13.7 12.9 13.7 Other items 2.3 0.3 2.3 0.3 Deferred profit tax asset/liability 35.3 29.9 22.2 15.2 13.1 14.7 Set-off assets and liabilities 14.2 11.0 14.2 11.0 Net deferred profit tax asset/liability 21.1 18.9 8.0 4.2 13.1 14.7 The changes in the temporary differences during the financial year can be analysed as follows: As at 1 January 2010 Adjusted Change balance as at of system 1 January 2010 Recognised in profit and loss account Recognised in other comprehensive income Acquired through business combinations As at 31 December 2010 Intangible assets 5.1 5.1 1.5 3.5 10.1 Tangible fixed assets 2.6 2.6 2.2 0.3 5.1 Financial fixed assets 0.3 0.3 0.3 Inventories 3.8 3.8 1.3 0.2 5.3 Derivatives 0.2 1.1 1.3 Other receivables 0.3 0.3 0.7 1.0 Pension provisions 6.4 2.2 4.2 0.8 0.8 4.2 Other provisions 2.8 2.8 0.5 0.8 4.1 Tax value of loss carry-forwards 10.3 10.3 3.4 13.7 Other items 0.7 0.7 1.0 0.3 Deferred profit tax asset/liability 15.5 2.2 13.3 2.3 1.9 2.8 14.7 Koninklijke Ten Cate nv Jaarverslag 2011 107

> NOTES TO THE CONSOLIDATED BALANCE SHEET As at 1 January 2011 Recognised in profit and loss accounts Recognised in other comprehensive income Acquired through business combinations As at 31 December 2011 Intangible assets 10.1 3.6 2.6 9.1 Tangible fixed assets 5.1 8.0 13.1 Financial fixed assets 0.1 0.1 Inventories 5.3 0.3 5.6 Derivatives 1.3 0.3 0.3 1.9 Other receivables 1.0 0.3 0.7 Pension provisions 4.2 4.0 2.0 2.2 Other provisions 4.1 5.5 9.6 Tax value of loss carry-forwards 13.7 2.2 1.4 12.9 Other items 0.3 2.0 2.3 Deferred profit tax asset/liability 14.7 2.7 3.7 2.6 13.1 0.3 million of the amount stated in the profit and loss account was included in the Result from associated companies in 2010. The expiry periods of the unused losses available for set-off are shown in the table below: The tax effect of the other comprehensive income in Group equity is 3.7 million (2010: 1.9 million) and relates to the actuarial results in respect of pensions and the hedging reserve. The realisation of the deferred profit tax assets depends on the future taxable profit being higher than the profit from the reversal of taxable temporary differences. On the basis of a projection of the estimated taxable profit and the existing fiscal planning possibilities, it is considered likely that sufficient taxable profit will be generated in future to realise these deferred profit tax assets. Deferred profit tax assets not recognised in the balance sheet As at 31 December 2011 there were 66.2 million (2010: 50.6 million) of unused losses available for set-off. No deferred profit tax asset has been recognised in respect of this amount because it is currently unlikely that future taxable profit will be available to the Group for the losses to be set off. The amount of profit tax concerned as at 31 December 2011 was 16.1 million (2010: 11.6 million). 2011 2010 Within 2 to 5 years 11.4 12.3 After 5 years 24.0 18.8 Unspecified period 30.8 19.5 Unused losses available for set-off 66.2 50.6 41 INVENTORIES 2011 2010 Raw materials and manufacturing supplies 90.3 67.5 Semi-manufactures 59.8 51.6 Finished products 117.8 97.8 Inventories 267.9 216.9 In 2011 the raw materials and manufacturing supplies and changes in finished products and work in progress included as costs of sales amounted to 569.2 million (2010: 483.3 million). In 2011 the reduction in the inventory value included as an expense amounted to a net recoverable amount of 4.2 million (2010: 3.3 million). The reversal of the reduction in the inventory value in 2011 amounted to 3.2 million (2010: 2.7 million). The inventory value included as an expense and the reversal have been stated under raw materials and manufacturing supplies. 108 Royal Ten Cate Annual Report 2011

42 TRADE DEBTORS 2011 2010 44 CASH AND CASH EQUIVALENTS 2011 2010 Due from third parties 150.0 146.9 Due from associated companies 1.3 3.9 Due from joint ventures 1.1 0.2 Trade debtors 152.4 151.0 Trade and other receivables with a term of less than one year are stated at amortised cost less impairments. Transfers to provisions for doubtful debts are included in the profit and loss account under work contracted out and other external expenses. As at 31 December 2011 trade debtors with a value of 6.5 million (2010: 14.5 million) were encumbered as security for credit facilities amounting to 6.5 million (2010: 20.2 million). 6.5 million of this credit facility was drawn as at the end of 2011 (2010: 16.4 million). 43 OTHER RECEIVABLES 2011 2010 Receivable in respect of other taxes 3.3 2.8 Derivatives at fair value 1.0 1.0 Projects in progress 3.5 Other receivables and prepayments 14.4 14.3 Other receivables 22.2 18.1 Amounts receivable in respect of other taxes relate mainly to reclaimable VAT. As at 31 December 2011 the prepayments amounted to 7.7 million (2010: 8.6 million). As at 31 December 2011 the total costs and recognised profit associated with projects in progress, less recognised losses, amounted to 12.4 million. Trade debtors included 0.2 million of amounts deducted in respect of projects in progress commissioned by third parties. Bank balances 22.6 11.0 Cash balances 0.1 0.6 Cash and cash equivalents 22.7 11.6 Cash loans, overdrafts 35.4 55.7 Cash in the cash flow statement 12.7 44.1 All amounts were freely available at the end of 2011 and 2010. 45 TOTAL SHAREHOLDERS EQUITY A statement of changes in equity can be found on page 84. 45.1 Ordinary shares 2011 2010 x 1,000 In issue and fully paid up as at 1 January 25,502 25,068 Issued stock dividend 427 434 In issue and fully paid up as at 31 December 25,929 25,502 The authorised share capital amounts to 200 million, divided into 80 million ordinary shares of a par value of 2.50. The issued capital as at 31 December 2011 amounts to 25,928,914 ordinary shares with a par value of 2.50 (as at 31 December 2010: 25,501,907 ordinary shares of a par value of 2.50). The holders of ordinary shares are entitled to dividend as approved periodically by the General Meeting of Shareholders. They are also entitled to cast one vote per share at meetings of the Company. Issue of shares and limitation of pre-emptive right The general meeting of shareholders has granted the Executive Board the power to issue shares and to exclude or restrict the pre-emptive right for the period ending on 20 October 2012. The power to issue shares concerns 10% of the issued share capital plus a further issue up to a maximum of 10% of the issued share capital in the event that the issue takes place in the context of a merger or acquisition. The same applies to the power of the Executive Board, with the approval of the Supervisory Board, to restrict or exclude the pre-emptive right. Royal Ten Cate Annual Report 2011 109

> NOTES TO THE CONSOLIDATED BALANCE SHEET 45.2 Repurchased ordinary shares 2011 2010 x 1,000 In issue and fully paid up as at 1 January 433 521 Repurchase of own shares 309 Exercise of options 110 84 Directors remuneration 10 Issued in connection with share savings plan 2 4 In issue and fully paid up as at 31 December 620 433 Ordinary shares are repurchased to prevent earnings per share being diluted by the granting of options and the issue of shares as part of the share savings plan. 308,820 own shares were repurchased in 2011 (2010: 0). Repurchase of own shares The general meeting of shareholders has granted the Executive Board the power to acquire fully paid-up shares in the Company (or certificates thereof) for the period ending on 20 October 2012. The maximum number of shares which may thus be acquired is 10% of the issued capital at the time of acquisition of the shares (or certificates thereof). 45.3 Share premium The share premium reserve is to be considered as paid-up capital. 45.4 Translation reserve The translation reserve comprises all exchange rate differences which arise due to the translation of the financial statements of activities outside the eurozone. These exchange rate differences are carried in equity. The accumulation of the respective amount began on 1 January 2004 and is not available for distribution to shareholders. 1.3 million of the currency translation differences was credited to the result in 2010 in respect of the step acquisition of TigerTurf and the closure of TenCate Permess Xishan. 45.5 Hedging reserve The hedging reserve consists of the unrealised effective portion of the accumulated change in the fair value of the derivatives used to hedge the interest rate risk. The reserve is not available for distribution to shareholders. A negative reserve reduces the amount freely available for distribution from the reserves. The balance of the hedging reserve after tax on 31 December 2011 was 4.5 million (2010: 3.6 million). 45.6 Other reserves and undistributed result Subsequent to the reporting date the following dividend has been proposed, which has not yet been included in the balance sheet. It is proposed to set the dividend in respect of 2011 at 0.95 per 2.50 par value share (2010: 0.75), payable optionally in cash or as stock dividend. 2011 2010 0.95 per ordinary share (2010: 0.75) 24.0 18.8 45.7 Objective with regard to equity and financing The objective with regard to equity and financing, as in 2010, is to guarantee the continuity of the Company by means of attractive returns for shareholders and by guaranteeing benefits for other stakeholders. The capital structure is adjusted if necessary in line with economic developments and risks relating to assets. With regard to financing, the longer-term objective is a ratio of net debt to EBITDA of a maximum of 2.5. 110 Royal Ten Cate Annual Report 2011

The calculation as at 31 December is as follows: 31 December 2011 31 December 2010 Long-term interest-bearing liabilities 275.1 195.2 Short-term portion of long-term liabilities 0.9 1.4 Cash loans and overdrafts 35.4 55.7 Total debt 311.4 252.3 Less: cash and cash equivalents 22.7 11.6 Net debt 288.7 240.7 EBITDA * 136.0 115.2 * Net debt/ebitda 2.12 2.09 EBITDA adjusted to take account of the effect of acquired and divested businesses, nonrecurring items and non-cash fair value adjustments: 1.5 million (2010: 4.3 million). 46 EARNINGS PER SHARE 46.1 Ordinary earnings per share The calculation of the ordinary earnings per share as at 31 December 2011 is based on the net income of 58.7 million (2010: 46.0 million) attributable to holders of ordinary shares and a weighted average number of outstanding ordinary shares during the 2011 financial year of 25,452,488 (2010: 25,025,965), calculated as follows: Weighted average number of ordinary shares 2011 2010 x 1,000 Ordinary shares in issue on 1 January 25,502 25,068 Effect of ordinary shares held (including repurchased shares) 433 521 Effect of shares held in connection with stock dividend 427 434 Effect of repurchase of own shares 133 Effect of shares issued as a result of exercised option rights 79 42 Effect of remuneration of director 9 Effect of shares issued as a result of share savings plan 1 3 Weighted average number of ordinary shares as at 31 December 25,452 25,026 46.2 Diluted earnings per share The calculation of the diluted earnings per share as at 31 December 2011 is based on the net income of 58.7 million (2010: 46.0 million) attributable to holders of ordinary shares and the weighted average number of outstanding ordinary shares during the 2011 financial year of 25,735,802 (2010: 25,216,255), calculated as follows: 2011 2010 2011 2010 Net profit for the financial year attributable to holders of ordinary shares 58.7 46.0 Net profit for the financial year attributable to holders of ordinary shares 58.7 46.0 Weighted average number of ordinary shares 2011 2010 x 1,000 Weighted number of ordinary shares as at 31 December 25,452 25,026 Effect of outstanding option rights 284 190 Weighted average number of ordinary shares (after dilution) as at 31 December 25,736 25,216 Royal Ten Cate Annual Report 2011 111

> NOTES TO THE CONSOLIDATED BALANCE SHEET 47 LONG-TERM DEBTS 2011 2010 Syndicated loan 267.4 188.8 Financial lease liabilities 3.2 4.3 Other loans 5.4 3.5 Total 276.0 196.6 Less: repayment of loans in forthcoming years 0.9 1.4 Long-term debts 275.1 195.2 2011 Total 2012 < 1 year 2013 1 2 years 2014/2016 2 5 years 2017 and after > 5 years 2010 Total Syndicated loan EUR variable interest 47.8 47.8 47.2 USD variable interest 219.6 219.6 141.6 Financial lease liabilities EUR fixed interest 8.0% 0.3 0.2 0.1 0.5 EUR variable interest 2.5 2.5 3.0 THB fixed interest 3.45% 3.65% 0.1 0.1 0.1 GBP variable interest 0.1 0.1 0.2 NZD fixed interest 11% 14% 0.1 AUD variable interest 0.2 0.2 0.4 Other loans USD variable interest 3.1 3.1 3.0 EUR interest-free 1.3 0.3 0.3 0.7 EUR fixed interest 2.00% 2.50% 0.1 EUR fixed interest 1.50% 0.4 EUR variable interest + 3.75% 0.9 0.3 0.3 0.3 EUR variable interest 0.1 0.1 Long-term debts 276.0 0.9 3.5 268.5 3.1 196.6 The syndicated loan of 450.0 million (2010: 450.0 million), which is available for drawing in various currencies, was concluded with a syndicate of 11 banks. 267.4 million of this facility was drawn as at 31 December 2011 (2010: 188.8 million). The loan is due to mature on 8 December 2015. Repayment is due in full on the maturity date. The loan is valued at amortised cost in accordance with the effective interest method. The interest rate payable is linked to the net debt/ebitda ratio, which is calculated quarterly in respect of the preceding 12 months. The EBITDA for acquired and divested businesses is annualised. In accordance with the agreements entered into with the banks, the EBITDA is also adjusted to take account of non-recurring items and non-cash fair value adjustments in the interest. The interest margin above Euribor or Libor will be between 0.70% and 1.50%. A utilisation fee of 0.20% is payable if more than 50% of the facility is drawn. At the end of 2011 the interest margin was 0.95% (2010: 1.20%). 112 Royal Ten Cate Annual Report 2011

The aforementioned syndicated loan is subject to a number of covenants, the principal of which are: total net debt/ebitda less than 3.25 at the end of the first quarter of each year, less than 3.50 at the end of the second quarter of each year and less than 3.00 at the end of the third and fourth quarters of each year, with the once-only possibility of an increase of 0.25 for two successive quarters following an acquisition, but no higher than 3.50; EBITDA/net interest greater than 4; joint guarantee of subsidiaries with total assets of at least 60% of the Group total. The Group was meeting these covenants as at the reporting date. In the event of a change of control of the Company, the syndicated loan is immediately repayable if a two-thirds majority of the lenders so require. The 2.5 million (2010: 3.0 million) financial lease liability relates to a building in Hungary. The USD loan with variable interest concerns a $ 4.0 million loan (2010: $4.0 million) from the Development Authority of Pike County Industrial Revenue Bonds. Repayment is due in full in 2018. 48.1 Changes in the valuation of the liability as at the reporting date 2011 2010 Balance as at 1 January 295.8 295.7 Service costs 2.8 3.2 Members contributions 2.7 2.9 Interest costs 15.5 15.8 Benefits paid 16.7 16.2 Actuarial differences 32.4 5.6 Balance as at 31 December 332.5 295.8 48.2 Investments 2011 2010 Balance as at 1 January 316.7 298.5 Expected return 17.6 17.1 Employer s contribution 6.7 6.3 Members contribution 2.7 2.9 Actuarial differences 6.0 8.1 Benefits paid 16.7 16.2 Balance as at 31 December 321.0 316.7 Analysis of plan assets as at 31 December 2011 2010 Of the total of long-term loans, 99% had variable interest in 2011 (2010: 99%). The risk associated with this variability has been hedged by means of interest rate swaps. Details of the hedging of the interest rate risk borne by the Group can be found in note 50.3. 48 PENSION LIABILITIES 2011 2010 Defined benefit schemes Present value of obligations 332.5 295.8 Fair value of plan assets 321.0 316.7 Present value of net liabilities 11.5 20.9 Effect of asset ceiling 20.9 Total defined benefit schemes 11.5 Other liabilities in respect of pensions 11.1 10.5 Pension liabilities 22.6 10.5 Bonds 173.3 150.1 Shares 101.3 119.0 Hedge funds 13.9 25.0 Real estate 25.2 15.6 Cash 1.9 3.1 Other items 5.4 3.9 Pension fund investments 321.0 316.7 48.3 Charge stated in the profit and loss account 2011 2010 Service costs 2.8 3.2 Asset ceiling test in accordance with IAS 19.58 0.2 Interest on liabilities 15.5 15.8 Expected return on fund investments 17.6 17.1 Pension expenses/income 0.7 1.7 Royal Ten Cate Annual Report 2011 113

> NOTES TO THE CONSOLIDATED BALANCE SHEET The pension charges have been stated in the 2011 profit and loss account in an amount of 0.7 million (2010: 1.7 million) under personnel costs. The actual return on fund investments amounts to 11.6 million (2010: 25.2 million). 48.4 Principles for defined benefit schemes The main actuarial assumptions as at the reporting date (in weighted averages) are as follows: 2011 2010 Netherlands The defined benefit pension scheme concerns in particular the pension rights of the Dutch employees which have been placed with Stichting Pensioenfonds Koninklijke Ten Cate. The main features of the scheme are: pension accrual based on average salary; accrual rate of 2.1%; conditional indexation, the target level being equivalent to 90% of wage growth for active members (employees) and 90% of price growth for inactive members (pensioners and members with paid-up entitlements); the employer contribution is increased by 50% if the cover ratio falls below 110%. Agreements have been entered into with the pension fund in respect of the contribution payable. The contribution percentage varies within an agreed range, depending on the pension fund s cover ratio. The current agreements cover the period up to 31 December 2014. Discount rate as at 31 December 4.3% 5.3% Expected return on plan assets as at 31 December 4.9% 5.7% Future wage increases 2.5% 2.5% Future pension increases 0.8% 1.0% Assumptions with regard to future mortality figures are based on published statistical data and mortality probabilities. The mortality table used is the 2010 2060 forecast table of the Netherlands Actuarial Association with a correction factor dependent on age and gender. For the valuation of partner s pensions the age difference between men and women has been set at three years. The total expected long-term return on the investments is 4.9% (2010: 5.7%). This percentage is based on the sum of the returns in separate investment categories. A 0.1% change in the discount rate will result in no change in the annual charges (2010: 0). A 0.1% change in the discount rate will cause the liability to rise or fall by 5.0 million (2010: 4.0 million). Other liabilities The other liabilities in respect of pensions relate to defined contribution schemes and a number of specific old-age provisions. The principal defined contribution scheme is a 401K (savings) scheme in the United States. 114 Royal Ten Cate Annual Report 2011

Historical information 2011 2010 2009 2008 2007 Present value of defined benefit obligations 332.5 295.8 295.7 275.1 298.6 Fair value of plan assets 321.0 316.7 298.5 272.4 304.7 Present value of net liabilities 11.5 20.9 2.8 2.7 6.1 Experience adjustments arising on obligations of the scheme 5.3 9.4 4.4 0.8 2.7 Experience adjustments arising on plan assets 6.0 8.1 11.8 42.3 10.3 The Group expects to contribute 6.5 million of employer s contributions to defined benefit pension schemes in 2012 (2011: 6.5 million). The pension expense in respect of 2012 is estimated at 3.1 million (2011: 0.7 million). 49 PROVISIONS Guarantee/ Claims Reorganisation provision Other personnel liabilities Environment Other Total 2011 Balance as at 1 January 2011 8.0 0.8 5.9 2.0 0.6 17.3 Change due to acquisition 3.9 0.3 0.8 5.0 Provisions made during the year 3.1 0.8 0.7 0.1 4.7 Released to result 0.5 0.1 0.1 0.1 0.8 Expenditure in current year 3.8 1.4 0.7 0.5 6.4 Exchange rate differences 0.2 0.2 Balance as at 31 December 2011 10.9 0.4 5.8 2.0 0.9 20.0 Of which short-term As at 31 December 2010 5.5 0.8 0.5 0.3 7.1 As at 31 December 2011 4.0 0.4 0.3 0.3 5.0 The amount released to the result has been included in the profit and loss account as follows: 2011 2010 Personnel costs 0.1 Other operating costs 0.7 1.4 Total 0.8 1.4 The guarantee provision relates to goods and services supplied and the provision for claims relates to claims for damages and possible legal costs. The provision for reorganisations relates to a number of smaller reorganisations which were nearly all completed during the financial year. The provision for other personnel liabilities has been formed in respect of long-term leave and other benefits, such as anniversaries. The environmental provision has been formed for expected costs of decontamination of industrial sites, on the basis of functional decontamination (maintenance of business use). Royal Ten Cate Annual Report 2011 115

Other information 50 FINANCIAL INSTRUMENTS As part of its normal business operations, the Group incurs liquidity, credit, interest and currency risks. The risk of fluctuations, mainly in exchange rates and interest rates, is hedged using derivatives. 50.1 Liquidity risk The liquidity risk is the risk of the Group being unable to meet its liabilities when they fall due. The Group s policy on control of the liquidity risk is to guarantee to the best of its ability that sufficient liquidities are available to meet its liabilities on time, in both normal and exceptional situations. 180.4 million of the syndicated loan of 450.0 million (2010: 450.0 million) was undrawn as at 31 December 2011 (2010: 258.4 million). The term of the financial liabilities as at 31 December 2011 was as follows: Book value Expected cash flow (including interest) 2012 < 1 year 2013 1-2 years 2014/16 2-5 years 2017 and after > 5 years Financial liabilities (excluding derivatives) Long-term debts 276.0 299.6 5.7 8.1 282.7 3.1 Cash loans, overdrafts 35.4 35.4 35.4 Trade and other creditors 161.8 161.8 161.8 Derivatives Interest rate swaps 6.9 7.1 3.4 2.3 1.3 0.1 Forward, FX swap contracts 0.4 0.4 0.4 Total 480.5 504.3 206.7 10.4 284.0 3.2 116 Royal Ten Cate Annual Report 2011

The term of the financial liabilities as at 31 December 2010 was as follows: Book value Expected cash flow (including interest) 2012 < 1 year 2013 1-2 years 2014/16 2-5 years 2017 and after > 5 years Financial liabilities (excluding derivatives) Long-term debts 196.6 231.4 5.7 7.1 215.6 3.0 Cash loans, overdrafts 55.7 55.7 55.7 Trade and other creditors 152.4 152.4 152.4 Derivatives Interest rate swaps 5.5 6.1 2.5 2.9 0.4 0.3 Forward, FX swap contracts 1.4 1.4 1.4 Total 411.6 447.0 217.7 10.0 216.0 3.3 50.2 Credit risk Credit risk is the risk of a financial loss for the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risks result in particular from trade debtors and, to a more limited extent, investments in securities. The Group s exposure to credit risk is mainly determined by the specific characteristics of the individual customers. Credit risk is limited by internal research into the creditworthiness of new and existing customers based on sources such as external reports, annual reports and payment history or by insuring the credit risk. The internal credit limits specified on the basis of internal research are reviewed at least once a year. Customers for which no credit limit has been issued (internally or by the insurer) can only do business with the Group on the basis of guaranteed payment. Goods are subject to reservation of ownership. In the event of nonpayment, the Group in most cases has a preferential claim to the extent that the goods are still present. The Group does not demand collateral for trade and other receivables. Impairments are stated as direct sale costs in the profit and loss account as work contracted out and other external costs. The Group has no particular concentration risks in respect of trade debtors. The carrying value of the financial assets reflects the maximum exposure to credit risk. The maximum exposure can be defined as follows: 2011 2010 Trade debtors 152.4 151.0 Other (long-term) receivables 28.8 26.7 Cash and cash equivalents 22.7 11.6 Forward foreign exchange contracts and options 0.8 0.8 Interest rate swaps 0.2 0.2 Total 204.9 190.3 Royal Ten Cate Annual Report 2011 117

> OTHER INFORMATION The age of the trade debtors and the related impairments can be analysed as follows: 2011 2010 Gross Provision Gross Provision Not due - 60 days overdue 148.6 1.5 147.0 2.1 60-120 days overdue 3.8 0.7 3.8 0.5 120-360 days overdue 3.3 1.2 2.9 0.7 Over 360 days overdue 3.7 3.6 2.9 2.3 Balance as at 31 December 159.4 7.0 156.6 5.6 The movements in the provision for trade debtors are as follows: 2011 2010 Balance as at 1 January 5.6 3.5 Acquisitions 1.2 1.3 Formed as charge against result 1.2 2.3 Released to result 0.6 0.6 Written off during the year 0.4 1.1 Exchange rate differences 0.2 Balance as at 31 December 7.0 5.6 The Group believes that, with the exception of the foregoing, no provision for impairment is required in respect of trade receivables which are not yet due or which are up to 60 days overdue. 50.3 Interest rate risk 99% of the interest-bearing debts have a variable interest rate (2010: 99%). The risk of a rise in interest rates is in principle hedged 90% for the subsequent year and 75%, 50% and 25% respectively for the years thereafter. Both interest rate swaps and caps can be used for this purpose. The impact of changes in the value of these financial instruments on the Group s result is limited as far as possible by the use of hedge accounting. The conditions applying to the interest-bearing debt are set out in note 47. At the end of 2011 the net balances of outstanding interest rate instruments were as follows: interest rate swap to 31-12-2013: 50 million, received variable, payment 2.48% fixed interest rate swap to 31-12-2012: $ 70 million, received variable, payment 2.215% fixed interest rate swap to 31-12-2013: $ 70 million, received variable, payment 1.687% fixed interest rate swap to 31-12-2013: $ 50 million, received variable, payment 2.03% fixed interest rate swap to 02-01-2018: $ 4 million, received variable, payment 4.47% fixed interest rate swap to 31-12-2014: 30 million, received variable, payment 2.805% fixed (commencing 31-12-2013) interest rate swap to 31-12-2014: $ 45 million, received variable, payment 2.598% fixed (commencing 31-12-2012) interest rate swap to 31-12-2015: $ 60 million, received variable, payment 1.195% The Group values the interest rate swaps and interest rate caps at fair value (see section 50.7). Of the fair value of the interest rate swaps as at 31 December 2011, 0.2 million (2010: 0.2 million) has been included in other receivables and 6.9 million (2010: 5.5 million) under trade creditors and other payables. 118 Royal Ten Cate Annual Report 2011

The table below shows the periods in which the cash flows that are the subject of cash flow hedge accounting are expected to take place and in which they will affect the profit or loss. 2011 Book value Expected cash flow < 1 year 1-2 years 2-5 years Interest rate swaps Assets Liabilities 5.9 5.9 2.9 2.1 0.9 Competition risk The Group hedges the estimated currency risk of the expected purchases and sales in the subsequent six months as far as possible. Currency options are used for this purpose. Translation risk The translation risk on the result of subsidiaries outside the eurozone is offset internally as far as possible against euro-denominated revenues of subsidiaries outside the eurozone. 2010 Book value Expected cash flow < 1 year 1-2 years 2-5 years Interest rate swaps Assets Liabilities 4.5 4.6 2.2 2.4 Interest rate caps Assets Liabilities 50.4 Currency risk The Group incurs currency risks on sales and purchases denominated in currencies other than the functional currency of the respective subsidiary. The currencies in which risk is incurred are mainly the euro, the US dollar and the British pound. Transaction risk The Group hedges orders, trade receivables and payables denominated in foreign currencies, to the extent that these may have a material effect on the result. It uses foreign exchange forward contracts and currency options for this purpose. The forward contracts have a term of less than one year after the reporting date. If necessary they are extended. The forward contracts are carried at fair value. The principal amounts of the loans drawn in foreign currencies are used to hedge intercompany loans in foreign currencies to subsidiaries which report in the respective currency. Royal Ten Cate Annual Report 2011 119

> OTHER INFORMATION Exposure The exposure to currency risks in respect of trading transactions of Group entities on the reporting date is as follows: 2011 2010 USD GBP EUR USD GBP EUR Transaction risk 4.0 1.4 7.9 6.2 2.1 3.3 Competition risk 0.6 1.3 15.0 3.3 1.3 17.2 Risk before hedging 3.4 2.7 22.9 2.9 3.4 20.5 Forward contracts 4.2 1.5 7.7 5.2 1.6 5.0 Option contracts 1.5 1.1 0.5 1.6 0.9 Risk after hedging 2.3 0.1 14.7 3.9 0.9 15.5 The foreign currencies have been converted into euros at the closing rate. The USD risk relates mainly to the expected revenues in USD of Asian subsidiaries and expected purchases in USD by European subsidiaries. The GBP risk relates mainly to trade receivables and expected revenues of European subsidiaries. The EUR risk relates mainly to trade receivables and expected revenues in euros of Ten Cate Thiolon Middle East. The expected revenues form a natural hedge for the translation risk on the result of subsidiaries which report in dollars or dollar-linked currencies. 50.5 Assets and liabilities stated in the balance sheet Changes in the fair value of foreign exchange forward contracts and options which are used to hedge, in an economic sense, monetary assets and liabilities denominated in foreign currencies are stated in the profit and loss account. Both changes in the fair value of forward contracts and options and the exchange rate differences relating to monetary balance sheet items are included as exchange rate differences in net financial expenses. The Group carries options and foreign exchange forward contracts at fair value. The fair value of options is determined on the basis of statements supplied by banks. The fair value of foreign exchange forward contracts with an underlying value below 5.0 million is determined on the basis of statements supplied by the bank; in the case of higher amounts the Group s own calculation model is used. The fair value of the options to hedge future transactions as at 31 December 2011 amounted to 0.1 million (2010: 0.1 million). This amount has been included in other receivables. The net fair value of the forward foreign exchange contracts was 0.3 million (2010: 0.7 million). 0.7 million of this amount has been included in other receivables and 0.4 million in other debts (2010: 0.7 million). 120 Royal Ten Cate Annual Report 2011

Fair value versus carrying value The fair value and carrying value of financial assets and liabilities stated in the balance sheet are as follows: 2011 2010 Book value Fair value Book value Fair value Assets valued at fair value Interest rate derivatives to which hedge accounting is applied Long-term receivables and investments * 8.2 8.2 7.2 7.2 Other interest rate derivatives 0.2 0.2 0.2 0.2 Currency derivatives 0.8 0.8 0.8 0.8 9.2 9.2 8.2 8.2 Assets valued at amortised cost Trade debtors and other receivables * 173.0 173.0 170.5 170.5 Cash and cash equivalents 22.7 22.7 11.6 11.6 195.7 195.7 182.1 182.1 Liabilities valued at fair value Interest rate swaps to which hedge accounting is applied 5.9 5.9 4.5 4.5 Other interest rate derivatives 1.0 1.0 1.0 1.0 Currency derivatives 0.4 0.4 0.4 0.4 7.3 7.3 6.9 6.9 Liabilities valued at amortised cost Syndicated loan 267.4 267.4 188.8 188.8 Financial lease liabilities 3.2 3.2 4.3 4.3 Other loans 5.4 5.4 3.5 3.5 Trade creditors and other payables 161.8 161.8 152.4 152.4 Cash loans and overdrafts 35.4 35.4 55.7 55.7 473.2 473.2 404.7 404.7 * Adjusted for comparison purposes. The fair value of the syndicated loan is the same as the carrying value, because it was refinanced in December 2010 and therefore has a margin consistent with market conditions. 50.6 Sensitivity analyses In managing interest rate and currency risks, the Group s aim is to limit the effect of short-term fluctuations on the Group result. In the longer term, however, sustained changes in exchange rates and interest rates will have an effect on the consolidated result. The effect of a general interest rate rise of one per cent on the pre-tax result in 2011 is estimated at 1.1 million (2010: 0.9 million). The effect of a general interest rate rise of one per cent on equity is estimated at 5.0 million before tax (2010: 4.1 million) due to the use of hedge accounting. Royal Ten Cate Annual Report 2011 121

> OTHER INFORMATION A general rise of one percentage point in the value of the euro against other currencies would have reduced the result after tax by an expected 0.3 million (2010: 0.4 million). A general rise of one per cent in the value of the euro against other currencies would have reduced the equity by approximately 2.4 million (2010: 2.8 million. 51 LIABILITIES NOT SHOWN IN THE BALANCE SHEET Operating lease as lessee Payments due under non-cancellable operating leases are as follows: 2011 2010 50.7 Estimate of fair value Details are given below of the main methods and assumptions used in estimating the fair value of financial instruments. The fair value of foreign exchange forward contracts is calculated by discounting the difference between the contractual and the current forward price, multiplied by the principal amount of the contract, for the residual term at the market interest rate. The fair value of interest rate swaps is calculated by discounting the difference between the contractual and the current interest, multiplied by the principal amount of the interest rate swap, for the residual term at the market interest rate. The result is periodically checked against bank statements. Bank statements are used to determine the fair value of interest rate caps. These statements are inspected to ensure that they are reasonable by means of techniques based on discounted cash flows based on the conditions and terms of the contract and using market interest rates for a comparable instrument as at the reporting date. The fair value of long-term debts is calculated on the basis of the discounted value of expected future cash flows from repayments and interest payments. The fair value of financial lease liabilities is estimated on the basis of the present value of future cash flows, discounted at the interest rate for similar lease agreements. In the case of trade debtors, other receivables, trade creditors and other short-term debts due within one year, the nominal value is deemed to reflect the fair value. The financial instruments valued on the basis of fair value fall into category 2 as in 2010: no quoted market price in an active market, with the fair value being determined indirectly. Less than 1 year 7.8 7.2 Between 1 and 5 years 20.2 15.0 More than 5 years 18.9 14.0 46.9 36.2 The Group leases buildings, plant, vehicles and office equipment under operating leases. The leased buildings have a term of ten to fifteen years. Lease payments are indexed annually. None of the leases include conditional lease payments. In principle the Group does not act as a lessor. The term of the other leases is a maximum of five years. 52 INVESTMENT LIABILITIES In 2011 the Group entered into contractual liabilities for the purchase of tangible fixed assets. The amount of the liabilities as at 31 December 2011, after deduction of advance payments already made during the financial year, is 3.1 million (2010: 4.9 million). 53 CONTINGENT LIABILITIES The Group has received claims for damages arising from the conduct of business. With the exception of those stated below, the claims are not deemed to be substantial and provisions have been recognised to the extent necessary. A claim for damages has been made against Royal Ten Cate by United Fabrics NV, a company registered in the Netherlands Antilles (majority shareholder in Textielgroep Twenthe NV). The claim is based on an outsourcing and management agreement from 1998 and originally amounted to 56 million. The claim in respect of the outsourcing agreement has lapsed permanently as a result of a judgement by the Supreme Court in 2006. The plaintiff was ordered to demonstrate the damage suffered in respect of the management agreement. TenCate is confident with regard to the remainder of the proceedings. 122 Royal Ten Cate Annual Report 2011

In the spring of 2011, FieldTurf Tarkett ( FieldTurf ) instituted legal proceedings against TenCate. These concerned alleged deficiencies in products mostly supplied to FieldTurf by Mattex Leisure Industries in Dubai, several years before TenCate acquired part of the assets and businesses of Mattex at the beginning of 2007. TenCate denies the existence of any legal basis for this claim and therefore rejects it. TenCate is confident with regard to the outcome of the legal proceedings and expects no material financial damage. In August 2011, TenCate filed a counterclaim against FieldTurf relating among other things to damage to the good name of TenCate and TenCate products, and to breach of contract in the period prior to TenCate s termination of the supply contract. 54 POST BALANCE SHEET EVENTS There are no events subsequent to the reporting date requiring commentary. 55 RELATED PARTIES 55.1 Identity of related parties Related parties concern relationships between the Group and its subsidiaries, associated companies and other participating interests, joint ventures, the TenCate pension fund and the members of the Executive and Supervisory Boards. 55.2 Directors remuneration The remuneration of the members of the Executive Board was as follows: The fixed periodic remuneration paid to Mr De Vries was increased by 10% with effect from 1 April 2011. Mr De Vries has a final-salary pension plan. The pension costs for Mr De Vries included the sum of 482,000 in respect of a back-service liability in 2011 (2010: 0, 2009: 801,000). Mr De Vries results-related pay amounts to a maximum of 50% of the fixed annual salary. In 2011, Mr De Vries received a variable salary component in respect of 2010 amounting to 50% of the fixed annual salary. Mr Lock was awarded a 20,000 increment in his periodic remuneration for the period from January to April 2011 inclusive. Mr Lock s variable salary component is a maximum of 40% of the fixed salary. In 2011, Mr Lock received 39% as variable remuneration in respect of 2010. Mr Cornelese s variable salary component is a maximum of 40% of the fixed salary. As at 31 December 2011 Mr De Vries held 203,160 shares in the Company (31 December 2010: 176,901 shares) and 360,000 options (31 December 2010: 350,000 options). In 2011 Mr De Vries was granted 60,000 options at an exercise price of 27.38 and 10,000 shares with a value of 26.00 per share. Mr Cornelese held 718 shares of the Company and no options as at 31 December 2011. In 2011 Mr Lock was granted 40,000 options at an exercise price of 27.38. Mr Lock held 4,453 shares in the Company and 94,000 options at the end of 2010. Mr De Vries is participating in the Group s share option plan. The costs of L. de Vries B. Cornelese 1 J. Lock 2 in thousands of euros 2011 2010 2009 2011 2011 2010 2009 Periodic remuneration 659 613 576 270 120 300 225 Results-related pay for the previous year 307 230 279 117 68 Pension costs 698 189 986 63 44 85 32 Early Retirement (Pre-pension and Life Course Savings) Act 140 58 110 Jubilee payment 51 Shares 260 Option costs 375 338 369 77 169 85 2,439 1,479 2,320 333 358 622 342 1) From 1 April 2011. 2) 2009: From 1 April 2009. 2011: To 21 April 2011. Royal Ten Cate Annual Report 2011 123

> OTHER INFORMATION the options are charged to the result in three years. Further information can be found in note 66. The remuneration of the members of the Supervisory Board was as follows: 2011 2010 in euros J.C.M. Hovers Chairman 1, 2 50,000 39,972 P.P.A.I. Deiters Vice-Chairman 2 35,000 30,492 F.A. van Vught 2 * 35,000 25,008 E. ten Cate 1 * 35,000 25,008 R. van Gelder 1,3 32,500 22,869 187,500 143,349 1 Member of the Financial Committee. 2 Member of the combined Remuneration, Selection and Appointments Committee. 3 As of 8 April 2010. * Chairman. Mr Deiters received additional remuneration amounting to US$ 15,000 in 2010 and 2011 in respect of his supervisory directorship in Ten Cate Thiolon Middle East in Dubai. The members of the Supervisory Board held no shares or option rights of Royal Ten Cate at the end of 2011. 56 ESTIMATES AND JUDGMENTS MADE BY THE MANAGEMENT The Executive Board has conducted discussions with the Financial Committee on the critical principles for the financial reporting and estimates, as well as the application of such principles and estimates. Information on assumptions and uncertainties regarding estimates which entail a substantial risk of a material adjustment in the subsequent financial year is included in the following notes: With regard to the pensions, the main actuarial assumptions are stated in note 48. With regard to guarantees and claims, provisions have been formed whenever there is an actual liability or it is likely that an outflow of funds will be necessary. The result of this is stated in note 49. With regard to impairments in the case of loss-making companies, an examination has been carried out to determine whether the realisable value of any cash generating unit was lower than the carrying value. This was not the case in 2011 and 2010. Future detrimental changes in the estimate as a result of changed assumptions may lead to the realisable value falling below the carrying value. See note 37.2. Estimates with regard to the use of tax losses are included in note 40. 55.3 Transactions with associated companies, other participating interests and joint ventures During the 2011 financial year, associated companies, other (nonconsolidated) participating interests and joint ventures purchased goods from the Group amounting to 14.8 million (2010: 19.2 million). As at 31 December 2011 the outstanding trade receivables due to the Group from associated companies amounted to 1.5 million (2010: 3.9 million) and from joint ventures 2.2 million (2010: 0.2 million). The Group has 0.1 million of outstanding trade accounts payable to associated companies and joint ventures (2010: 0.1 million). Transactions with associated companies, other participating interests and joint ventures take place on an objective, business basis. 55.4 Subsidiaries A list of (significant) subsidiaries and participating interests can be found inside the back cover of this report. 124 Royal Ten Cate Annual Report 2011

Company financial statements 57 COMPANY PROFIT AND LOSS ACCOUNT In millions of euros note 2011 2010 Result from participating interests after profit tax 59 57.4 46.6 Other results after profit tax 1.3 0.6 NET INCOME 58.7 46.0 58 COMPANY BALANCE SHEET (BEFORE APPROPRIATION OF THE RESULT) In millions of euros 31 december 2011 31 december 2010 FINANCIAL FIXED ASSETS 59 Participating interests in subsidiaries 680.0 672.6 Loans to subsidiaries 104.6 83.4 Deferred profit tax assets 14.4 13.5 Total fixed assets 799.0 769.5 CURRENT ASSETS Due from subsidiaries 1.1 1.5 Other receivables 1.9 0.4 Cash and cash equivalents 1.2 3.1 Total current assets 4.2 5.0 TOTAL ASSETS 803.2 774.5 EQUITY Share capital 61 64.8 63.8 Share premium reserve 63 44.8 45.8 Legal reserve 64 5.8 2.5 Other reserves 65 291.7 273.8 Undistributed result 58.7 46.0 465.8 431.9 PROVISIONS 67 1.1 1.6 LONG-TERM LIABILITIES 68 273.1 192.4 SHORT-TERM LIABILITIES 69 63.2 148.6 TOTAL EQUITY AND LIABILITIES 803.2 774.5 Royal Ten Cate Annual Report 2011 125

Notes to the company financial statements General Accounting policies The parent company financial statements of Royal Ten Cate form an inseparable whole with the 2011 financial statements of Royal Ten Cate and have been prepared in accordance with the statutory requirements of Part 9 of Book 2 of the Netherlands Civil Code. In determining the accounting policies for its parent company financial statements, Royal Ten Cate uses the option available under article 2.362 paragraph 8 of the Netherlands Civil Code. This means that the accounting principles for the parent company financial statements of Royal Ten Cate are the same as those applying to the consolidated financial statements. Participating interests over which significant influence is exercised are valued in accordance with the equity method. The consolidated financial statements have been prepared in accordance with the standards set by the International Accounting Standards Board and adopted by the European Union. A description of these standards can be found in the accounting policies applicable to the consolidated financial statements. Royal Ten Cate is at the head of the Group and has capital interests in the subsidiaries stated on the cover. 60 EQUITY The equity in the parent company financial statements corresponds to the equity in the consolidated financial statements. A statement of changes in equity can be found on page 84. 61 CALLED AND PAID-UP CAPITAL 2011 2010 Authorised share capital 200.0 200.0 Of which not issued 135.2 136.2 64.8 63.8 The share in the results of associated companies includes the share of Royal Ten Cate in the results of these companies. Results from transactions involving a transfer of assets and liabilities between Royal Ten Cate and its participating interests and between individual participating interests are not included to the extent that they can be considered to be unrealised. 59 FINANCIAL FIXED ASSETS Interest in subsidiaries Loans to subsidiaries Deferred profit tax receivables Total Balance as at 1 January 672.6 83.4 13.5 769.5 Effect of change of accounting policy 6.6 6.6 Adjusted balance as at 1 January 679.2 83.4 13.5 776.1 Investments/capital contributions 12.7 12.7 Actuarial results of pensions 15.1 15.1 Translation differences 3.7 1.2 4.9 Loans granted 88.2 88.2 Repayment of loans 68.2 68.2 Results of participating interests 57.4 57.4 Dividend of participating interests 32.5 32.5 Change in deferred tax 0.9 0.9 Balance as at 31 December 680.0 104.6 14.4 799.0 126 Royal Ten Cate Annual Report 2011

62 ORDINARY SHARES 2011 2010 64.3 Other legal reserves 2011 2010 The authorised share capital consists of: 80,000,000 ordinary shares of 2.50 200.0 200.0 Issued share capital Balance as at 1 January 2011 2010 Ordinary shares 25,501,907 and 25,067,580 63.8 62.7 Issued stock dividend 427,007 and 434,327 1.0 1.1 Balance as at 31 December 64.8 63.8 Balance as at 1 January 2.8 4.4 Transfer from Other reserves 0.5 1.6 Balance as at 31 December 3.3 2.8 The Other legal reserves concern capitalised development costs, undistributable reserves of subsidiaries and the hedging reserve. Balance of legal reserve as at 31 December 5.8 2.5 63 SHARE PREMIUM RESERVE 2011 2010 65 OTHER RESERVES 2011 2010 Balance as at 1 January 45.8 46.9 Issued stock dividend 1.0 1.1 Balance as at 31 December 44.8 45.8 The share premium reserve is available for distribution to shareholders. 64 LEGAL RESERVES 64.1 Translation differences 2011 2010 Balance as at 1 January 3.3 15.3 Change 3.7 18.6 Balance as at 31 December 7.0 3.3 Balance as at 1 January 258.4 Effect of change of accounting policy 10.4 Adjusted balance as at 1 January 280.4 268.8 Actuarial gains and losses on pensions 14.1 3.8 Transfer to Other legal reserves 0.5 1.6 Added from 2010 / 2009 result 39.7 18.0 Share and option plans 1.9 1.4 Repurchase of own shares 7.6 Issue of repurchased shares for share savings plan/option plan 2.4 1.3 Acquisition of non-controlling interest 10.5 6.9 Balance as at 31 December 291.7 280.4 64.2 Hedging reserve 2011 2010 Balance as at 1 January 3.6 0.2 Change 0.9 3.4 Balance as at 31 December 4.5 3.6 Royal Ten Cate Annual Report 2011 127

> NOTES TO THE COMPANY FINANCIAL STATEMENTS 66 OPTION PLAN Royal Ten Cate operates a stock option plan for the management, established by the Supervisory Board. The maximum possible account has been taken of the recommendations of VNO-NCW and the Dutch Investors Association (VEB). Those eligible for options are members of the Executive Board, the corporate and group directors and a number of managers. The implementation of the share option plan is supervised by the compliance officer. The options are granted on a conditional basis. During the vesting period, a performance condition must be fulfilled. This condition is that the earnings per share, adjusted to take account of non-recurring items, over the past three, four or five years must have increased on average by at least a percentage equal to inflation plus 3% per year. If this performance condition has been fulfilled, the options become unconditional and may be exercised, unless restrictions have been imposed by the Netherlands Authority for the Financial Markets. The total term of the options is six to ten years. The exercise period is three to five years. The vesting period is three to a maximum of five years. The option exercise price is equivalent to the average price of the Royal Ten Cate share on Euronext Amsterdam nv on the five stock exchange trading days following publication of the annual figures. Each granted option right lapses on early termination of employment. In principle options amounting to approximately 1.5% of the total number of shares outstanding will be granted in any one year. The exercise of options is subject to the restrictions laid down in the Securities Transactions Supervision Act. 66.1 Granting of options in 2012 On 28 February 2012 it was intended to grant 309,500 conditional options at the average market price during the five stock exchange trading days following publication of the annual results on 29 February 2012. The distribution is as follows: 28-02-2012 * 01-03-2011 ** Members of the Executive Board 100,000 100,000 Management and management support staff 209,500 206,000 309,500 306,000 * Provisional. ** Final. 128 Royal Ten Cate Annual Report 2011

66.2 Statement of movements in options of the Executive Board in 2011 L. de Vries Issued on Term until Number of options Exercise price Exercised/ lapsed to 2010 Exercised in 2011 Lapsed in 2011 Outstanding 31-12-2011 Exercisable 31-12-2011 25-02-2003 25-02-2011 40,000 6.18 40,000 25-02-2004 25-02-2012 40,000 10.29 40,000 22-02-2005 22-02-2013 50,000 15.17 50,000 01-03-2006 01-03-2014 60,000 23.63 60,000 60,000 28-02-2007 28-02-2015 60,000 25.77 60,000 60,000 05-03-2008 05-03-2016 60,000 22.50 60,000 60,000 03-03-2009 03-03-2019 60,000 11.70 60,000 03-03-2010 03-03-2020 60,000 18.96 60,000 01-03-2011 01-03-2021 60,000 27.38 60,000 490,000 80,000 50,000 360,000 180,000 28-02-2012 28-02-2022 60,000 B. Cornelese Issued on 28-02-2012 28-02-2022 30,000 J. Lock Issued on Term until Number of options Exercise price Exercised/ lapsed to 2010 Exercised in 2011 Lapsed in 2011 Outstanding 31-12-2011 Exercisable 31-12-2011 25-02-2003 25-02-2011 6.18 25-02-2004 25-02-2012 4,000 10.29 4,000 22-02-2005 22-02-2013 12,000 15.17 12,000 12,000 01-03-2006 01-03-2014 16,000 23.63 16,000 16,000 28-02-2007 28-02-2015 16,000 25.77 16,000 16,000 05-03-2008 05-03-2016 20,000 22.50 20,000 20,000 03-03-2009 03-03-2019 11.70 03-03-2010 03-03-2020 30,000 18.96 30,000 01-03-2011 01-03-2021 40,000 27.38 40,000 138,000 4,000 134,000 64,000 28-02-2012 28-02-2022 10,000 50,000 options were exercised in 2011 (2010: 44,000). The share price on the exercise date was 28.60 (2010: 17.58). In February 2012 it was intended to grant 60,000 options to Mr De Vries, 30,000 options to Mr Cornelese and 10,000 options to Mr Lock. 40,000 options in the 2009 series are reserved for outstanding performance, a decision on which will be taken in due course. These options are not included in the above statements. Royal Ten Cate Annual Report 2011 129

> NOTES TO THE COMPANY FINANCIAL STATEMENTS 66.3 Statement of movements in options of management and management support staff in 2011 Issued on Term until Number of options Exercise price Exercised/ lapsed to 2010 Exercised in 2011 Lapsed in 2011 Outstanding 31-12-2011 Exercisable 31-12-2011 25-02-2003 25-02-2011 48,200 6.18 47,000 1,200 25-02-2004 25-02-2012 51,600 10.29 43,998 3,600 4,002 4,002 22-02-2005 22-02-2013 90,400 15.17 51,400 7,600 31,400 31,400 01-03-2006 01-03-2014 125,200 23.63 37,800 12,600 74,800 74,800 28-02-2007 28-02-2015 129,000 25.77 28,000 23,500 77,500 77,500 05-03-2008 05-03-2016 187,000 22.50 63,000 11,000 2,500 110,500 110,500 03-03-2009 03-03-2019 176,250 11.70 12,000 2,750 161,500 03-03-2010 03-03-2020 196,500 18.96 11,500 185,000 01-03-2011 01-03-2021 206,000 27.38 10,000 196,000 1,210,150 283,198 59,500 26,750 840,702 298,202 28-02-2012 28-02-2022 209,500 66.4 Complete statement of movements in options in 2011 Issued on Term until Number of options Exercise price Exercised/ lapsed to 2010 Exercised in 2011 Lapsed in 2011 Outstanding 31-12-2011 Exercisable 31-12-2011 25-02-2003 25-02-2011 88,200 6.18 87,000 1,200 25-02-2004 25-02-2012 95,600 10.29 87,998 3,600 4,002 4,002 22-02-2005 22-02-2013 152,400 15.17 51,400 57,600 43,400 43,400 01-03-2006 01-03-2014 201,200 23.63 37,800 12,600 150,800 150,800 28-02-2007 28-02-2015 205,000 25.77 28,000 23,500 153,500 153,500 05-03-2008 05-03-2016 267,000 22.50 63,000 11,000 2,500 190,500 190,500 03-03-2009 03-03-2019 276,250 11.70 12,000 2,750 261,500 03-03-2010 03-03-2020 286,500 18.96 11,500 275,000 01-03-2011 01-03-2021 306,000 27.38 10,000 296,000 1,878,150 367,198 109,500 26,750 1,374,702 542,202 28-02-2012 28-02-2022 309,500 130 Royal Ten Cate Annual Report 2011

109,500 options were exercised in 2011 (2010: 84,200). The weighted average share price on the exercise date for share options exercised in 2011 was 28.99 ( 21.69). 66.6 Repurchased shares In principle the Company will repurchase shares in order to prevent any dilution of earnings per share caused by the granting of options. The fair value of the share-based payment plans on the grant date has been determined on the basis of the following input: (number of shares) 2011 2010 2011 2010 Fair value on grant date Price on grant date (15-day average) 27.12 18.27 Exercise price 27.38 18.96 Expected volatility 39.3% 36.9% Option term 8 jaar 8 jaar Expected dividend yield 3.00% 2.65% Risk-free interest rate 2.93% 3.13% Balance as at 1 January 433,256 521,392 Repurchase of own shares 308,820 Issued in respect of options 109,500 84,200 Issued in respect of share savings plan 1,855 3,936 Director s remuneration 10,000 Exchange of physical securities 400 Balance as at 31 December 620,321 433,256 67 PROVISIONS 2011 2010 66.5 Share savings plan All employees in the Netherlands have been given the possibility of participating in the share savings plan. The maximum amount per participant in 2011 was 1,226 (2010: 1,226). The following savings were accumulated through this plan: Guarantees and claims 1.0 1.6 Other items 0.1 Balance of provisions as at 31 December 1.1 1.6 The term of the provisions exceeds one year. In 2011: 1,855 (2010: 3,936) shares Up to 2011: 63,701 (2010: 61,846) shares 68 LONG-TERM LIABILITIES 2011 2010 Syndicated loan 267.4 188.8 Loans from subsidiaries 5.7 3.6 Balance as at 31 December 273.1 192.4 The conditions of the syndicated loan can be found in note 47 in the notes to the consolidated balance sheet. 69 SHORT-TERM LIABILITIES 2011 2010 Cash loans, overdrafts 53.6 139.1 Owed to consolidated subsidiaries 2.4 1.1 Trade creditors and other payables 7.2 8.4 Balance as at 31 December 63.2 148.6 The short-term liabilities are due in less than one year. Royal Ten Cate Annual Report 2011 131

> NOTES TO THE COMPANY FINANCIAL STATEMENTS 70 AUDITOR S FEES The following fees of KPMG Accountants N.V. and the other entities affiliated to the KPMG network have been charged to the Group, in accordance with article 382a Part 9 of Book 2 of the Netherlands Civil Code. Fees 2011 2010 in thousands of euros Examination of the financial statements 830 790 Other audit assignments 270 320 Other non-audit services 200 340 Total 1,300 1,450 71 LIABILITIES NOT SHOWN IN THE BALANCE SHEET The Company has issued a declaration of liability in accordance with article 403 of Book 2 of the Netherlands Civil Code on behalf of its Dutch subsidiaries. The Company forms a tax group together with the majority of the Dutch subsidiaries for corporation and sales tax. Each of these subsidiaries is severally liable for the tax payable by all the companies included in the tax group. We also refer to the notes in the section 53 concerning contingent liabilities. Guarantees have also been issued for a number of foreign subsidiaries. Almelo, 28 February 2012 Executive Board L. de Vries, Chairman B.J.H. Cornelese Supervisory Board J.C.M. Hovers, Chairman P.P.A.I. Deiters, Vice-Chairman F.A. van Vught E. ten Cate R. van Gelder 132 Royal Ten Cate Annual Report 2011

Other information INDEPENDENT AUDITOR S REPORT To the General Meeting of Shareholders of Royal Ten Cate Report on the financial statements We have audited the accompanying financial statements 2011 of Royal TenCate, Almelo as set out on pages 76 to 132 of this report. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December 2011, the consolidated profit and loss account, the consolidated statement of comprehensive income, the consolidated cash flow statement and the consolidated statement of changes in group equity for the year then ended, and notes, comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise the company balance sheet as at 31 December 2011, the company profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information. Management s responsibility Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the management board report in accordance with Part 9 of Book 2 of the Netherlands Civil Code. Furthermore, management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of Royal TenCate as at 31 December 2011 and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code. Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of Royal TenCate as at 31 December 2011 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code. Report on other legal and regulatory requirements Pursuant to the legal requirements under Section 2:393 sub 5 at e and f of the Netherlands Civil Code, we have no deficiencies to report as a result of our examination whether the management board report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and if the information as required under Section 2:392 sub 1 at b h has been annexed. Further, we report that the management board report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Netherlands Civil Code. Amstelveen, 28 February 2012 KPMG ACCOUNTANTS N.V. T. van der Heijden RA Royal Ten Cate Annual Report 2011 133

> OTHER INFORMATION POST BALANCE SHEET EVENTS There are no events subsequent to the reporting date requiring commentary. 2. With the approval of the Supervisory Board, the Executive Board is authorised to determine the part of the profit that will be reserved. PROVISIONS OF THE ARTICLES OF ASSOCIATION RELATING TO APPROPRIATION OF PROFIT (Article 27) 3. The sum remaining from the profit after the reservation in accordance with paragraph 2 is at the disposal of the general meeting of shareholders. General The authorised capital is divided into ordinary shares. 4. Shares held by the Company in its own capital are not taken into account in calculating the appropriation of profit. Summary of the provisions of the articles of association 1. Profit distributions may only take place to the extent that the equity of the Company exceeds the paid and called-up part of the issued capital plus the reserves which must be held by law. 5. The dividend payable shall be made payable no later than 30 days after adoption of the financial statements by the general meeting of shareholders. It shall be made payable only to the authorised persons in whose name the shares are held. Such payments shall discharge the Company. 6. A shareholder s claim for payment shall be time-barred after a period of five years has elapsed. PROPOSED APPROPRIATION OF PROFIT in millions of euros 2011 2010 Net income 58.7 46.0 Added to other reserves in accordance with article 27, paragraph 2 of the articles of association 34.5 28.5 24.2 17.5 Net change in the legal reserves 0.5 1.6 23.7 19.1 Undistributed dividend balance from previous year 0.3 0.0 24.0 19.1 Payment of 0.95 and 0.75 dividend to holders of ordinary shares in accordance with article 27 paragraph 3 of the articles of association 24.0 18.8 Undistributed dividend balance at year-end, which is transferred to the relevant account 0.3 134 Royal Ten Cate Annual Report 2011

Ten-year summary In millions of euros, unless stated otherwise i Figures based on IFRS Figures based on Dutch GAAP 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 CONSOLIDATED PROFIT AND LOSS ACCOUNT Revenues 1,138.8 984.5 842.1 1,032.6 886.0 770.5 686.5 641.0 569.6 602.1 Changes in inventories of finished products and work in progress 17.1 17.8 29.8 18.0 11.7 4.8 0.5 12.6 2.6 2.4 Raw materials and manufacturing supplies 586.3 501.1 391.6 562.0 463.6 402.2 353.8 332.1 280.7 289.9 Work contracted out and other external expenses 99.5 73.9 63.1 60.7 54.9 34.7 29.3 29.5 28.8 36.4 Personnel costs 205.2 188.0 173.0 190.3 178.3 171.2 161.6 159.7 142.9 151.3 Other operating costs 127.4 119.8 109.2 111.5 98.8 94.0 83.5 78.5 71.5 79.0 Depreciation and impairment 35.0 34.5 33.9 30.7 29.1 22.1 18.6 18.9 18.5 22.9 EBITA 102.5 85.0 41.5 95.4 73.0 51.1 39.2 34.9 29.8 25.0 Amortisation 12.9 10.4 8.8 11.6 3.6 1.0 0.7 0.3 1.1 1.1 OPERATING RESULT (EBIT) 89.6 74.6 32.7 83.8 69.4 50.1 38.5 34.6 28.7 23.9 Net financial expenses 11.3 10.0 12.7 13.7 11.3 8.0 4.6 6. 8 7. 0 12.0 PRE-TAX INCOME 78.3 64.6 20.0 70.1 58.1 42.1 33.9 27.8 21.7 11.9 Profit tax 18.7 17.9 5.6 19.1 11.9 11.4 11.5 9. 2 5.3 1.7 RESULT AFTER TAX BUT BEFORE RESULT FROM PARTICIPATING INTERESTS 59.6 46.7 14.4 51.0 46.2 30.7 22.4 18.6 16.4 13.6 Share in net income of associated companies 1.3 1.3 8.7 0.3 45.4 8.1 5. 1 3. 9 5.4 RESULT AFTER TAX 58.3 45.4 23.1 51.0 46.5 76.1 30.5 23.7 20.3 19.0 Extraordinary items after tax 12.3 RESULT AFTER TAX 58.3 45.4 23.1 51.0 46.5 76.1 30.5 23.7 20.3 31.3 Non-controlling interests 0.4 0.6 0.8 0.1 0.1 0.1 0.1 0.2 NET INCOME 58.7 46.0 23.9 51.1 46.4 76.0 30.5 23.6 20.3 31.1 Dividend 24.0 18.8 15.0 20.4 18.8 16.2 12.5 10.2 8.5 7.7 EBITA in % of revenues 9.0% 8.6% 4.9% 9.2% 8.2% 6.6% 5.7% 5.4% 5.2% 4.2% Return on average net capital employed * 13.1% 12.1% 5.7% 13.4% 13.1% 14.4% 15.3% 13.5% 11.7% 9.7% * Prior to 2007, based on net capital employed at year-end. Royal Ten Cate Annual Report 2011 135

> TEN-YEAR SUMMARY In millions of euros, unless stated otherwise Figures based on IFRS Figures based on Dutch GAAP 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 CONSOLIDATED BALANCE SHEET Intangible assets 273.0 242.8 203.8 212.1 136.8 12.4 13.8 12.1 10.6 12.8 Tangible fixed assets 221.9 214.2 214.7 247.4 218.1 165.8 161.4 118.8 118.1 130.5 Financial fixed assets 36.8 34.2 45.3 25.1 19.8 18.3 35.2 19.9 11.4 9.2 Total fixed assets 531.7 491.2 463.8 484.6 374.7 196.5 210.4 150.8 140.1 152.5 Inventories 267.9 216.9 155.0 211.5 176.2 157.7 157.5 138.6 110.0 117.4 Receivables 181.1 169.8 116.9 187.7 166.2 128.2 125.0 98.8 91.7 89.8 Securities and cash 22.7 11.6 12.8 5.4 4.8 6.7 4.6 2. 7 5. 8 2. 9 Total current assets 471.7 389.3 284.7 404.6 347.2 292.6 287.1 240.1 207.5 210.1 TOTAL ASSETS 1,003.4 889.5 748.5 889.2 721.9 489.1 497.5 390.9 347.6 362.6 Equity * 465.8 438.5 380.8 366.9 310.1 238.7 181.8 146.5 162.0 152.9 Non-controlling interests 3.7 3.8 4.1 5.1 0.3 0.2 0. 1 0. 1 0. 2 Group equity 469.5 442.3 384.9 372.0 310.4 238.9 181.8 146.6 162.1 153.1 Provisions 50.6 32.0 40.5 43.5 40.8 43.8 56.1 52.1 15.6 15.1 Long-term debts 275.1 195.2 192.0 316.2 222.3 63.5 130.2 74.1 82.9 107.0 Banks and short term loans 36.3 57.1 16.3 20.3 12.9 30.4 27.1 24.6 13.9 8.9 Other short-term debts 171.9 162.9 114.8 137.2 135.5 112.5 102.3 93.5 73.1 78.5 TOTAL LIABILITIES 1,003.4 889.5 748.5 889.2 721.9 489.1 497.5 390.9 347.6 362.6 * With effect from 2003 equity before appropriation of profit. Group capital/total capital 47% 50% 51% 42% 43% 49% 37% 38% 47% 42% Acquisitions /(de)consolidations 34.8 24.7 3.3 88.1 175.1 63.0 40.8 29.2 0.3 1.4 Investments in tangible and intangible fixed assets 25.7 21.3 17.3 48.0 62.9 43.0 26.2 12.0 16.9 17.0 Depreciation and amortisation 47.9 44.9 42.7 42.3 32.7 23.1 19.3 19.2 19.6 24.0 Number of staff years at year-end 4,353 4,271 3,805 4,437 4,020 3,532 3,578 3,634 3,245 3,278 Number of shares outstanding at year-end (x 1,000) 25,929 25,502 25,068 23,967 23,556 21,063 20,784 20,472 20,096 19,192 Net earnings per 2.50 share 2.31 1.84 0.97 2.18 2.04 3.66 1.48 1.17 1.03 1.63 Dividend per share in euro 0.95 0.75 0.60 0.85 0.80 0.70 0.60 0.50 0.43 0.40 Closing price in euro 21.26 28.00 18.43 16.05 21.27 23.21 21.50 13.55 9.02 6.25 136 Royal Ten Cate Annual Report 2011

SUBSIDIARIES, ASSOCIATED COMPANIES AND OTHER INTERESTS as at 31 December 2011 ADVANCED TEXTILES & COMPOSITES SECTOR GEOSYNTHETICS & GRASS SECTOR Ten Cate Advanced Textiles bv Nijverdal, Netherlands Group activities of the TenCate Advanced Textiles group in the Netherlands Ten Cate Protect bv Nijverdal, Netherlands Ten Cate Protective Fabrics USA inc Union City (Georgia), USA Ten Cate Protective Fabrics Canada inc Montreal (Quebec), Canada Fabrics for professional wear and safety clothing as well as outdoor applications Ten Cate Union Protective Fabrics Asia ltd (50.65%) Fabrics for protective clothing Bangkok, Thailand Ten Cate Advanced Composites bv Nijverdal, Netherlands Advanced composites for the aircraft industry and antiballistic applications Ten Cate Advanced Composites USA inc Morgan Hill (California), USA Phoenixx TPC inc Taunton (Massachusetts), USA YLA inc Benicia (California), USA CCS Composites inc Benicia (California), USA Advanced composites for aerospace and industrial applications TenCate Advanced Armour UK (AML) Design and production of vehicle armour materials Swindon, UK Ten Cate Geosynthetics North America inc Ten Cate Geosynthetics Austria GmbH Ten Cate Geosynthetics France sas Ten Cate Geosynthetics Netherlands bv Ten Cate Geosynthetics Asia sdn bhd TenCate Industrial Zhuhai co ltd Geosynthetics and industrial fabrics Ten Cate Geosynthetics sdn bhd (Malaysia) Ten Cate Geosynthetics (Thailand) ltd Ten Cate Geosynthetics pte ltd Ten Cate Geosynthetics Italia srl Ten Cate Geosynthetics (UK) ltd Ten Cate Geosynthetics sl Ten Cate Geosynthetics Schweiz AG Ten Cate Deutschland GmbH Ten Cate Geosynthetics Polska Spzoo Ten Cate Geosynthetics CZ sro Ten Cate Geosynthetics Rumania Sales offices Atlanta (Georgia), USA Linz, Austria Bezons, France Nijverdal, Netherlands Kuala Lumpur, Malaysia Zhuhai, China Kuala Lumpur, Malaysia Bangkok, Thailand Singapore Lazzata, Italy Telford, UK Madrid, Spain Zurich, Switzerland Dietzenbach, Germany Kraków, Poland Prague, Czech Republic Bucharest, Romania Ten Cate Advanced Armour sas Primarette, France Ten Cate Advanced Armour Danmark a/s Vissenbjerg, Denmark Advanced ceramics and composites for antiballistic applications Ten Cate Advanced Armor USA inc Newark (Ohio), USA Advanced composites for vehicle armour Ten Cate Active Protection ApS (ABDS) (51%) Vissenbjerg, Denmark Active protection systems for army vehicles AML India Private ltd (90%) Noida, India Design and production of vehicle armour materials Ten Cate Thiolon bv Ten Cate Thiolon USA inc Ten Cate Thiolon Middle East (49%) 1) Synthetic turf components and systems Ten Cate Thiobac bv Backing for synthetic turf systems GreenFields Holding BV (90%) GreenFields BV (100%) (subsidiary of GreenFields Holding BV) Xtra Grass BV 2) ProCourt Int BV 2) GreenFields Eastern Europe BV (60%) 2) GreenFields Noo (Bresco) AS (60%) 2) GreenFields Swiss AG (60%) 2) Nijverdal, Netherlands Dayton (Tennessee), USA Dubai, UAE Nijverdal, Netherlands Genemuiden, Netherlands Genemuiden, Netherlands Kampen, Netherlands Zederik, Netherlands Genemuiden, Netherlands Molde, Norway Schaffhausen, Switzerland 1 Due to legislation in Dubai, 51% is held by a local partner. Royal Ten Cate has 100% economic ownership. 2) Subsidiary of GreenFields BV 3) Subsidiary of Southern Greens BV

GreenFields Sports Turf Systems (ME) Ltd (80%) 2) Nicosia, Cyprus GreenFields West Africa SARL (65%) 2) Cotonou, Benin GreenFields UK Sports Surfaces Ltd 2) Bolton, UK GreenFields India FZC (51%) 2) Sharjah, United Arab Emirates GreenFields Pacific Pty Ltd 2) Brisbane, Australia Southern Greens BV (82%) 2) Kampen, Netherlands GreenFields Sports & Leisure Pty (55%) 3) Pietermaritzburg, South Africa Marketing and installation of synthetic turf systems TigerTurf NZ, ltd (80%) Auckland, New Zealand TigerTurf Australia pty ltd (80%) Campbellfield, Australia TigerTurf (UK) ltd (80%) Hartlebury, UK Tiger Sports Americas inc (80%) Austin (Texas), USA (all as at 28 April 2010; as at 31 March 2009: 49%) Marketing and production organisations for synthetic turf systems Edel Grass bv (50%) Genemuiden, Netherlands Marketing and installation of synthetic turf systems Ten Cate Assurantiën bv Insurance Ten Cate Nederland bv Royal Ten Cate USA inc Ten Cate USA inc Ten Cate UK ltd Ten Cate France sas Ten Cate Deutschland GmbH Ten Cate Danmark a/s Royal Ten Cate Pacific ltd Royal Ten Cate China Holding ltd Country holding companies Ten Cate Finance AG Financing company Almelo, Netherlands Almelo, Netherlands Atlanta (Georgia), USA Washington D.C., USA London, UK Paris, France Opladen, Germany Copenhagen, Denmark Hong Kong, China Hong Kong, China Schaffhausen, Switzerland OTHER ACTIVITIES SECTOR NON-CONSOLIDATED COMPANIES Xennia Technology ltd (78.95%) Specialist inkjet technology for industrial applications Letchworth, UK Landscape Solutions bv (25%) Goirle, Netherlands Marketing and production organisation for synthetic turf for landscaping use Ten Cate Systems bv Development activities Nijverdal, Netherlands Hellas Construction Inc (30%) Production and construction of sports pitches Austin (Texas), USA Ten Cate Enbi International bv TenCate Enbi group holding company Brunssum, Netherlands GreenFields (All Sports) UK Ltd (49%) Marketing and installation of synthetic turf systems Stepps, UK Ten Cate Enbi GmbH Opladen, Germany Ten Cate Enbi kft Rétság, Hungary Ten Cate Enbi inc Shelbyville (Indiana), USA Ten Cate Enbi inc Rochester (New York), USA Ten Cate Enbi pte ltd Singapore Ten Cate Enbi Zhuhai co ltd Zhuhai, China Technical rollers and components for printers, copiers, fax machines, postal sorting machines, ATMs, insulation and heating systems The operating companies listed here are consolidated in the financial statements, with the exception of the companies shown as non-consolidated. Some interests of minor relevance to the overall picture have been omitted from the list, in accordance with article 379, paragraph 3, Book 2 of the Netherlands Civil Code. The companies are wholly owned unless stated otherwise. Royal Ten Cate Annual Report 2011

Royal Ten Cate Royal Ten Cate Colophon Royal Ten Cate Concept and realisation Photography C&F Report Amsterdam B.V., Paul Haverkort Amsterdam Bram Hendriks Frans Dekker Translation Roelof Pot business development & investor relations De Jong Luchtfotografie F.R. Spaan, corporate director Stephen Barnett Norbert Hekkink P.O. Box 58 TenCate would like to hear from you. Please let u s know your views by e-mailing VVH business translations, Printing Joost van Baars Courtesy Gulfstream 7600 GD Almelo, The Netherlands Maartensdijk Lulof Druktechniek B.V., Marjo Baas Courtesy Staff Sgt. Curt Cashour Telephone +31 (0)546 544 911 investorrelations@tencate.com, stating the Fax market group or officer you wish to contact. Almelo Ton Kuper Vista landschapsarchitectuur en stedenbouw +31 (0)546 814 145 Annual Report 2011 Text Royal Ten Cate Annual Report 2011 MATERIALS THAT MAKE A DIFFERENCE TenCate materials are at the cutting TenCate focuses on added-value solutions TenCate addresses market trends edge of textile, chemical and material to meet critical end-user requirements. based on the global themes of safety, pro- technologies. Our customers make a difference with our tection and sustainability. This generates materials and systems. long-term growth for the company. www.tencate.com The strategy is characterised by value chain management. This business model implemented by TenCate is built on the four cornerstones of end-user marketing, product differentiation, technological innovation and cost leadership. The challenge lies in striking an optimum balance between these four cornerstones. Thermoplastic composite The automotive industry is increasingly interested in using thermoplastic composites from the TenCate Cetex product portfolio of TenCate Advanced Composites in cars. TenCate Cetex is: Strong and impact-resistant: contributes to safety Lightweight: saves fuel Mouldable: readily processable Reusable and recyclable: sustainable Connected by the value proposition Operating companies, associated companies and other interests Commercial overview and profile

Royal Ten Cate Royal Ten Cate Colophon Royal Ten Cate Concept and realisation Photography C&F Report Amsterdam B.V., Paul Haverkort Amsterdam Bram Hendriks Frans Dekker Translation Roelof Pot business development & investor relations De Jong Luchtfotografie F.R. Spaan, corporate director Stephen Barnett Norbert Hekkink P.O. Box 58 TenCate would like to hear from you. Please let u s know your views by e-mailing VVH business translations, Printing Joost van Baars Courtesy Gulfstream 7600 GD Almelo, The Netherlands Maartensdijk Lulof Druktechniek B.V., Marjo Baas Courtesy Staff Sgt. Curt Cashour Telephone +31 (0)546 544 911 investorrelations@tencate.com, stating the Fax market group or officer you wish to contact. Almelo Ton Kuper Vista landschapsarchitectuur en stedenbouw +31 (0)546 814 145 Annual Report 2011 Text Royal Ten Cate Annual Report 2011 MATERIALS THAT MAKE A DIFFERENCE TenCate materials are at the cutting TenCate focuses on added-value solutions TenCate addresses market trends edge of textile, chemical and material to meet critical end-user requirements. based on the global themes of safety, pro- technologies. Our customers make a difference with our tection and sustainability. This generates materials and systems. long-term growth for the company. www.tencate.com The strategy is characterised by value chain management. This business model implemented by TenCate is built on the four cornerstones of end-user marketing, product differentiation, technological innovation and cost leadership. The challenge lies in striking an optimum balance between these four cornerstones. Thermoplastic composite The automotive industry is increasingly interested in using thermoplastic composites from the TenCate Cetex product portfolio of TenCate Advanced Composites in cars. TenCate Cetex is: Strong and impact-resistant: contributes to safety Lightweight: saves fuel Mouldable: readily processable Reusable and recyclable: sustainable Connected by the value proposition Operating companies, associated companies and other interests Commercial overview and profile