Umeco plc, Concorde House, 24 Warwick New Road,
Leamington Spa, Warwickshire, United Kingdom CV32 5JG
T +44(0) 1926 331800   F +44(0) 1926 312680  
www.umeco.com
Registered number: 148635
annual report 2007
Umeco plc  annual report 2007
vision into value
71197 COVER  18/6/07  23:27  Page 2 Vision...
Build with integrity, fairness and trust
Challenge and innovate 
Always put delivery first
Make ambition work
Umeco’s core values have enabled the Group to emerge as a
leading international provider of advanced composite materials
and supply chain and repair & overhaul services, principally to
the aerospace & defence and automotive industries.
We continue to build the Group with an open culture, enabling
us to bring fresh energy to our marketplaces.
© Ivo Rovira/Alinghi
ACG Official Supplier of Alinghi
71197 COVER  18/6/07  23:27  Page 4 annual report 2007 1
into value
Operating profit* (£m)
25.7
▲ UP 19.5 per cent
Profit before tax* (£m)
22.5
▲ UP 24.3 per cent
Earnings per share* (p)
32.2
▲ UP 4.2 per cent
Dividend per share (p)
15.5
▲ UP 6.9 per cent
Revenue (£m)
333.9
▲ UP 13.9 per cent
* Umeco uses adjusted figures as key performance indicators. The differences between adjusted
and unadjusted measures of profit are set out in note 8 to the consolidated financial statements.
Corporate Governance 71
Statement of Directors’ Responsibilities 75
Remuneration Report 79
Report of the Auditors 86
Principal Businesses 88
Advisors 92
Five Year Summary 93
Shareholder Information and Financial Calendar 94
Notice of Annual General Meeting 95
Financial Highlights 1
Group at a Glance 2
Chairman's Statement 4
Chief Executive’s Review 8
Finance Director’s Review 14
Directors 18
Executive Management 20
Directors’ Report 22
Financial Statements 27
71197 PRE  18/6/07  23:42  Page 1 2 annual report 2007
Group at a Glance
Umeco has three business streams: Composites, Supply Chain and Repair & Overhaul, with facilities
throughout the world.
Composites
Advanced Composites Group
Aerovac Systems
Richmond Aircraft Products
GRPMS
Aeropia
Med-Lab
RD Taylor & Company
Supply Chain
Pattonair
Repair & Overhaul
AEM
Avionics Mobile Services
Antavia
71197 PRE  18/6/07  23:42  Page 2 annual report 2007 3
2007 2006
Revenue £157.6m £141.4m
Operating profit* £8.4m £7.2m
Operating margin* 5.3% 5.1%
Employees 585 532 
2007 2006
Revenue £152.2m £131.4m
Operating profit* £14.6m £11.9m
Operating margin* 9.6% 9.1%
Employees 780 673
2007 2006
Revenue £24.1m £20.4m
Operating profit* £2.7m £2.4m
Operating margin* 11.2% 11.8%
Employees 269 204
supply chain
Umeco Supply Chain is a leading
international provider of distribution 
and supply chain outsourcing services
primarily to OEM customers in the
aerospace & defence markets. With 
its specialisation in the supply of small
and medium sized components and its
sophisticated IT systems, significant
operational, cost and working capital
benefits can be enjoyed by its growing
global customer base
Umeco Composites has significant
manufacturing interests in advanced
composite materials and provides a
broad range of these materials and
specialist chemical products principally
to the aerospace, motor sport &
automotive and wind energy markets.
A full range of value added outsourcing
services is provided to major customers
Umeco Repair & Overhaul comprises
three businesses; AEM, one of the
largest independent component repair
& overhaul facilities in Europe, Avionics
Mobile Services, which installs and
overhauls avionic equipment, and
Antavia, acquired in October 2006,
which is a provider of repair &
overhaul services to the aerospace
industry
47% of revenue 46% of revenue 7% of revenue
Revenue growth
Composites
Supply Chain
Repair & Overhaul
Operating profit
0 
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 
50 
100 
150 
200 
250 
300 
350 
£m 
2007 £25.7m
* See note on page 1
71197 PRE  18/6/07  23:42  Page 3
➦ 4 annual report 2007
Results and dividend
2007 has been another successful year for
Umeco, with significant progress across both
the Composites and Supply Chain business
streams. Indeed, were it not for certain
external factors, including the delay in the
launch of the A380 and adverse exchange
rate movements, our overall performance
would have been stronger still. 
Revenue in the year to 31 March 2007 
was £333.9 million (2006: £293.2 million),
an increase of £40.7 million of which £5.7
million relates to acquisitions. The underlying
increase in revenue was 7.7 per cent or
8.9 per cent at constant exchange rates.
Operating profits in the period rose by 
19.5 per cent to £25.7 million (2006: 
£21.5 million) with margins improving 
to 7.7 per cent (2006: 7.3 per cent).
Net financial expense, excluding
revaluations of financial instruments, 
was £3.2 million (2006: £3.4 million). 
Profit before tax was £22.5 million
(2006: £18.1 million) an increase of 24.3 per
cent. Earnings per share were 32.2 pence
(2006: 30.9 pence) and reflect the higher
number of shares in issue following the
rights issue in December 2005.
The Directors are proposing an increased 
final dividend of 10.0 pence (2006: 9.5 pence),
making a total for the year of 15.5 pence per
ordinary share (2006: 14.5 pence) an increase
of 6.9 per cent. The final dividend is payable
on 3 August 2007 to shareholders on the
register on 6 July 2007.
Chairman’s Statement
“OUR FINANCIAL POSITION IS STRONG
AND THE MARKETS IN WHICH WE
OPERATE ARE BUOYANT”
Brian McGowan Chairman
2007 has been another successful year for Umeco, with
significant progress across both the Composites and Supply
Chain business streams
71197 PRE  18/6/07  23:42  Page 4 annual report 2007 5
● focus on product and service
innovation so that, within our
selected market segments, we 
retain a clear competitive edge. 
Over the last decade we have achieved
compound annual growth in revenue
of 23.8 per cent, 21.3 per cent in
operating profits and 11.9 per cent
in earnings per share. We strongly
believe that, by continuing with
this strategy, Umeco is capable of
delivering further sustained value
for shareholders.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
400
350
300
250
200
150
100
50
Revenue £m
Attain UK market leadership
in supply chain
Build-out
to US
Consolidate
post 9/11
Strategic organic and acquisitive growth
across all three business streams
Aerodyne
Aeropia
Abscoa
Rolls
Royce
Contract
Rolls-Royce
Extension
Bombardier
Contract
Provest
Goodrich
Contract
Turbomeca
Contract
Thales
Contract
US
Airmotive
ACG
GRP
Scandinavia
R D Taylor
AEM
AMS
Aeromedic
Aviation
Windings
Antavia
Richmond
Aerovac
Supply Chain
Composites
Repair &
Overhaul
Group strategy
Over the past ten years, since Clive Snowdon
and I were appointed Chief Executive and
Chairman respectively, the Board has
developed and implemented a focussed
strategy . This has established Umeco as a
leading international provider of supply
chain and repair & overhaul services and
advanced composite materials primarily
to the aerospace & defence, automotive 
and wind energy markets. Evidence of the
successful execution of this strategy can 
be seen in the:
● winning of major long term supply
chain contracts, principally with
leading aerospace OEMs and airlines,
and the subsequent extension of these
relationships through the addition of a
broader range of products and services;
● carefully targeted acquisitions which
have extended both our geographic
coverage and our product and service
offerings;
● investment in our businesses to
ensure they have the capacity and
operating efficiency to provide the
highest levels of customer service; and
AMR DBR9 courtesy of ACG as Technical Partner to Aston Martin Racing
71197 PRE  18/6/07  23:42  Page 5 6 annual report 2007
Chairman’s Statement
Strategic developments in the year
Contracts
Umeco Components, now renamed Umeco
Supply Chain, was successful in winning two
major new contracts in the second half of the
year, with Thales Aerospace and Turbomeca.
Management are now fully engaged in the
implementation of both programmes
following the recent opening of a new facility 
close to Paris Charles de Gaulle airport.
Acquisitions
During the year we made three bolt-on
acquisitions. In June 2006, Advanced
Composites Group (‘ ACG’) acquired
Aerodyne Advanced Composites, based in
Cape Town, South Africa. Aerodyne, which
now trades under the ACG brand, has a
long term contract to manufacture chassis
parts for the Mercedes McLaren SLR super
car, utilising composite materials
exclusively supplied by Umeco.
In October 2006, Antavia, a Toulouse-based
repair & overhaul company, was acquired
and has been successfully integrated 
into the Group’s Repair & Overhaul
business stream.
In November 2006, Aeropia, a Umeco
Composites company, acquired the assets
and business of US Airmotive, a Miami-
based distributor of aerospace chemicals,
and has subsequently merged 
it with its US subsidiary.
Capital investments
In September 2006, ACG opened its new 
UK technology centre, manufacturing and
“ A FOCUS ON PRODUCT AND SERVICE
INNOVATION ENSURES THAT, WITHIN OUR
SELECTED MARKET SEGMENTS, WE RETAIN
A CLEAR COMPETITIVE EDGE”
With ever-rising energy prices and industry’s increasing
appetite for more environmentally sustainable solutions,
demand for the Group’s advanced composite materials,
from a growing number of industries, is expected to
continue to increase at a high rate in the coming years
Courtesy of Vestas Wind Systems A/S
71197 PRE  18/6/07  23:42  Page 6 annual report 2007 7
warehousing facility to much acclaim by
customers, suppliers and employees. At a
capital cost of £7.0 million this investment
places ACG at the forefront of its industry
and adds much needed capacity for the
medium term.
Later in the year, Umeco Supply Chain
signed contracts to acquire a freehold site
and build a new, much larger facility in
Derby to further support our long term
contracts and in particular our growing
relationships with Rolls-Royce plc and
Goodrich Actuation Systems. This new
facility is scheduled to come on stream 
in the autumn of 2007.
Directors
At the Annual General Meeting in July 2006
John Harper retired as a non-executive
Director after over eleven years’ valuable
service to Umeco. To replace John, Stephen
Bird, a divisional director of the Weir Group,
was appointed in October 2006.
Michael Harper is standing down as a
non-executive Director at the 2007 Annual
General Meeting due to his other business
commitments.  We thank Michael for his
contribution since joining the Board in 2002.
I am very pleased that Chris Hole, who was
Director of Procurement at Rolls-Royce plc
and retired in December 2006, will be
joining the Board as a non-executive
Director on 25 July 2007.
Management and employees
Alan Moore, Managing Director of ACG,
has retired after many successful years
with the company and has been replaced
by Jon Mabbitt who was previously ACG’s
UK Operations Director. 
As Umeco continues to grow and develop
we are able to engage an increasing
number of talented individuals who are
attracted by our entrepreneurial culture
and decentralised management structure.
Our on-going success is a testament to
the dedication and hard work of our
growing workforce, which now numbers
over 1,600, based in all the regions of
the world.
Prospects
In the year under review we enjoyed a
high level of underlying growth in revenue
and profits, despite the impact of a
number of external factors including the
production delay of the A380 and a
weakening US dollar.
Looking forward, the principal market in
which Umeco operates, civil aerospace,
looks robust with Airbus and Boeing
entering 2007 with record order books.
Airbus has indicated that A380 production
will restart during our second half year
and Boeing’s development of the B787
appears to be on schedule, with a first
flight expected this Autumn and initial
deliveries due in mid-2008. Both of these
significant programmes are anticipated
to generate a high level of incremental
revenue for the Group.
In addition, the use of advanced composite
materials in our principal growth markets
of aerospace, automotive, motor sport
and wind energy continues to grow at
a high rate; this should lead to an
increasing utilisation of our recently
extended capacity.
These factors, coupled with recent
acquisitions and contract wins, place
Umeco on track for another year of strong
performance. We have the management
team and financial resources in place to
support our ambitious plans and the
resolve to work through the external
factors that arise from time to time.
In summary, we go into in the new
financial year with a record order book,
rising demand from the markets in 
which we operate and a much enhanced
infrastructure, following the major
investments we have made over the last
three years. We are therefore looking
forward to another successful year for
the Group.
Brian McGowan
Chairman
5 June 2007
71197 PRE  18/6/07  23:42  Page 7
➦ 8 annual report 2007
Chief Executive’s Review
Clive Snowdon Chief Executive
“GROWTH HAS AGAIN BEEN ACHIEVED
ACROSS ALL OF OUR BUSINESS STREAMS”
Operations
Revenue for the year was £333.9 million
(2006: £293.2 million) an increase of
13.9 per cent. Excluding the impact of
acquisitions completed in the year, the
underlying rate of growth was 7.7 per cent
(2006: 14.2 per cent). These acquisitions
accounted for additional revenue of
£5.7 million. At constant exchange rates,
underlying growth was 8.9 per cent.
Growth has again been achieved across all
of our business streams. This reflects the
strong civil aerospace market, additional
volumes on existing and new supply chain
contracts, and the on-going high level of
demand for our composite materials.
Operating profit of £25.7 million
increased by 19.5 per cent (2006:
£21.5 million) and by 5.6 per cent on an
underlying basis (2006: 22.6 per cent). 
Our operating margin rose to 7.7 per cent
(2006: 7.3 per cent). This reflects the good
margins of the businesses recently acquired
and the operational gearing effect of
increased volumes. As was the case last
year, there have been some significant
increases in certain raw material prices 
but these have largely been passed on
to customers.
Civil aerospace & defence
Marine
Other
Motor sport & automotive
Wind energy
Umeco
Composites
Revenue mix
2007
£152.2m
2006
£131.4m
71197 PRE  18/6/07  23:42  Page 8 annual report 2007 9
Umeco Composites
2007 2006
£m £m
Revenue 152.2 131.4
Operating profit 14.6 11.9
per cent per cent
Operating margin 9.6 9.1
Umeco Composites provides a broad range
of advanced composite materials and
specialist chemical products principally to
the aerospace, motor sport & automotive
and wind energy markets. A full range of
value added outsourcing services is
provided to major customers.
Revenues increased in the year by
15.8 per cent, or by 13.0 per cent on an
underlying basis. 
Operating profits rose by 17.4 per cent on an
underlying basis, resulting in an improvement
in margin from 9.1 per cent to 9.6 per cent.
This further significant rise in revenue and
profits reflects the growing use of advanced
composite materials in a number of
markets and the acquisition of Aerodyne in
June 2006. In particular, revenue from the
wind energy industry rose by 95 per cent
compared with the prior year.
ACG continues to trade successfully and
quickly integrated the newly acquired
business in South Africa into its operating
structure. This new business is the
exclusive supplier of composite chassis
parts for the Mercedes McLaren SLR super
car and made a good contribution to
profits in the year. ACG in the UK opened
its new state-of-the-art technology centre
and enlarged composite materials
manufacturing facility in September 2006
and should greatly benefit from this
significant investment in the coming years.
Aerovac and Richmond had a tremendous
year delivering significant growth in
revenue and profits despite the impact
of the delay in the A380 programme.
Richmond is working closely with Boeing
and its partners on the B787 programme
and leased a further two bays in its Los
Angeles facility to extend its vacuum bag
kitting production capability. The global
wind energy market, which is growing at a
massive rate, is now a key market segment
for the business and capital investments
are planned in the current year to provide
additional capacity and new products.
GRP gained market share in Europe
following its successful acquisition of
Ashland’s Scandinavian distribution
businesses in the prior year. This additional
revenue and more favourable market
conditions produced a further 
lift to profits in the year.
Aeropia, Umeco Composites’ largest
aerospace chemical distribution business,
acquired the assets of US Airmotive in
November 2006 and has already
integrated the operation into its existing
subsidiary in Miami. The business moved
into larger, more suitable premises by the
end of the year. RD Taylor and Med-Lab
both continued to trade well.
© Th. Martinez/Alinghi
ACG Official Supplier of Alinghi
71197 PRE  18/6/07  23:42  Page 9 10 annual report 2007
Chief Executive’s Review 
Umeco Supply Chain
2007 2006
£m £m
Revenue 157.6 141.4
Operating profit 8.4 7.2
per cent per cent
Operating margin 5.3 5.1
Umeco Components was renamed
Umeco Supply Chain at the start of the
new financial year to reflect the broader
range of services now provided to our
customer base. As part of this process all
Umeco Supply Chain companies will trade
globally under the well recognised
Pattonair brand.
Umeco Supply Chain is a leading
international provider of distribution and
supply chain outsourcing services primarily
to OEM customers in the aerospace &
defence markets. With its specialisation in
the supply of small and medium sized
components and its sophisticated IT
systems, it creates and delivers
opportunities for significant operational,
cost and working capital benefits to its
growing global customer base.
“INVESTMENT IN OUR BUSINESSES ENSURE
THEY HAVE THE CAPACITY AND OPERATING
EFFICIENCY TO PROVIDE THE HIGHEST
LEVELS OF CUSTOMER SERVICE”
Civil OEM
Non aerospace
Civil aftermarket
Defence
Group
Revenue
mix
2007
£333.9m
2006
£293.2m
71197 PRE  18/6/07  23:42  Page 10 annual report 2007 11
Revenue increased in the year by 11.5 per
cent, or by 5.3 per cent on an underlying
basis. The rise in revenue was held back by a
slower than expected build-up on the new
contract with Goodrich Actuation Systems
and by the impact of delays in US defence
spending on our distribution businesses in
North America.
Operating profits increased in the period 
by 16.7 per cent, or 1.9 per cent on an
underlying basis. Overall profitability was
enhanced by a full year contribution from
Pattonair Italy, formerly Provest, and robust
performances in the majority of our
businesses.  The rate of profit growth,
however, was held back by losses within the
UK electronic components activity, which
was closed in December 2006, and by a
disappointing performance at Pattonair USA. 
In Europe, the business units in the UK,
France and Italy delivered a high level of
growth in revenue and profitability
reflecting positive market conditions and
new contract wins. The impact of the
unexpected and high level of raw
material price increases in the early part
of the year was largely mitigated by the
year end. Pattonair France was successful in
securing major new contracts with Thales
Aerospace and Turbomeca and these,
together with a strong order book, bode
well for the current financial year.
Ulogistics, now Pattonair Derby, had
another very successful year despite the
delayed implementation of the contract
with Goodrich Actuation Systems.
Pattonair Derby’s long term contract with
Rolls-Royce plc goes from strength to
strength with additional products and
services being supplied to a broader
internal and external customer base. In
November 2006, contracts were signed to
acquire a five acre freehold plot in Derby
for a major new facility to house Pattonair
Derby’s rapidly growing operations. The
total cost of this project is expected to be
£7.5 million, the majority of which falls in
the current financial year; this will be
partially offset by the subsequent sale of
Pattonair Derby’s existing premises.
Pattonair in Canada has recently signed a
new contract with Rolls-Royce Canada, and
continues actively to pursue new customer
opportunities. Bombardier Aerospace has
recently served notice of its intention to
terminate its relationship with Pattonair.
The timing and basis of termination has yet
to be finalised but, based on historic levels
of profit generated by the contract and on
the likely costs associated with the exit, the
impact is not expected to be material.
Trading levels at Pattonair USA were
impacted by delays in American defence
spending on certain projects. Order intake
improved considerably during the second
half, but this came too late to have a major
impact on the results for the year. Paul
Fanelli joined the business as President in
January 2007 and has already strengthened
the senior management team.
Umeco Supply Chain opened a new
facility in Xi’an, China, during the year
and has started to generate incremental
business for both Pattonair and Aeropia.
Additional sales staff are to be recruited 
in the current financial year.
Umeco Repair & Overhaul
2007 2006
£m £m
Revenue 24.1 20.4
Operating profit 2.7 2.4
per cent per cent
Operating margin 11.2 11.8
Umeco Repair & Overhaul now comprises
three businesses; AEM, one of the largest
independent component repair & overhaul
facilities in Europe, Avionics Mobile
Services (‘ AMS’), which installs and
overhauls avionic equipment, and Antavia
which was acquired in October 2006.
Antavia, based in Toulouse, is a provider
71197 PRE  18/6/07  23:42  Page 11 12 annual report 2007
Chief Executive’s Review 
of similar services to those of AEM, but has 
a complementary capability and customer
base. Aviation Windings and Aeromedic
Innovations, businesses acquired in the
previous financial year, were fully
integrated into AEM during the year and
were both moved to a new freehold facility
at Luton airport.
Revenue increased in the year by
18.1 per cent, but fell by 7.7 per cent on an
underlying basis. Operating profits rose by
12.5 per cent but fell by 31.1 per cent on an
underlying basis.
The fall in underlying revenue and profits
reflects a decision made by AEM during 
the year to reduce business levels with 
one significant overseas customer for
commercial reasons. In addition AMS had a
disappointing first half year but, following
a senior management change, enjoyed a
better second half.
AEM was successful in broadening its
customer base and won a number of
new contracts during the year including
the supply of first aid kits to British
Airways. The business goes into
the new financial year with a record
order book.
“CAREFULLY TARGETED ACQUISITIONS
HAVE EXTENDED BOTH OUR GEOGRAPHIC
COVERAGE AND OUR PRODUCT AND
SERVICE OFFERINGS”
We have the management team and financial resources
in place to support the Group’s ambitious plans
71197 PRE  18/6/07  23:42  Page 12 annual report 2007 13
AMS also secured some larger contracts
late in the financial year positioning it well
for a better start to the 2008 financial year.
With a reduced cost base, a much higher
level of profitability is now expected.
Antavia achieved the profit contribution
expected at the time of the acquisition
and is now working closely with other
businesses in the division to achieve some
identified revenue synergies. 
Branding and values
The Group-wide branding project
announced in June 2006 was successfully
completed by the end of the year. It has led
to a significant enhancement in the
external awareness of the Group and our
activities in the key markets in which we
operate. In order to develop further our
branding and marketing efforts the Group
has produced a short corporate video
which can be viewed on our website,
www.umeco.com. 
Summary
2007 was another very positive year for the
Group. We have delivered high growth in
underlying revenues and profits despite
some adverse factors outside of our
control. We continue to win significant
new contracts, extend existing customer
relationships and invest in our operations
to ensure that we have sufficient capacity
to meet our longer term growth prospects.
During the year our order intake
continued to grow. At the end of March
2007, Umeco’s order book stood at
£168.1 million (2006: £143.8 million).  This
is based on customer requirements over
the ensuing year, and excludes the
expected first year business from the new
contracts with Thales and Turbomeca.
Civil aerospace build rates continue 
to rise and with the A380 going into
production later this calendar year and the
B787 next year we expect the civil market
to be strong for the foreseeable future.
With ever-rising energy prices and
industry’s increasing appetite for more
environmentally sustainable solutions,
demand for our advanced composite
materials from a growing number of
industries is expected to continue to
increase at a high rate in the coming years.
We continue to work closely with major
customers to ensure that the on-going
development of our products and services
meets their requirements and obtain the
necessary product approvals.
In the current year, we have plans to
expand further our geographic footprint
and have now established Umeco Asia 
as a trading company in Singapore,
replacing our representative office in that
important region. 
In summary, we are looking forward to
another successful year.  Our financial
position is strong and the markets in
which we operate are buoyant. Our
management teams will continue to
drive for high rates of organic growth
and seek additional acquisition
opportunities which match our strict
investment criteria.
Clive Snowdon
Chief Executive
5 June 2007
MP4-22 courtesy of ACG as Official Supplier to Vodafone McLaren Mercedes
71197 PRE  18/6/07  23:42  Page 13
➦ 14 annual report 2007
Finance Director’s Review
Operating results
2007 2006
£m £m
Revenue
– total   333.9 293.2
– acquisitions 5.7 –
Operating profit
– total 25.7 21.5
– acquisitions 1.2 –
per cent per cent
Operating margin
– total 7.7 7.3
– acquisitions 21.1 –
Revenue for the year was 13.9 per cent
higher than last year, with acquisitions
accounting for 1.9 per cent of the
increase. Operating profits were
£25.7 million, £4.2 million higher than
the previous year, of which acquisitions
contributed £1.2 million. The increase 
in the existing businesses is primarily 
due to the strong growth in the civil
aerospace industry coupled with an
increase in demand for advanced
composite materials from the aerospace
and other industries, most notably from
the growing wind energy market.
Operating margins rose to 7.7 per cent
from 7.3 per cent helped by the impact of
recent acquisitions and by the operational
gearing effect of increased volumes.
“OPERATING PROFITS WERE
£25.7 MILLION, £4.2 MILLION HIGHER
THAN THE PREVIOUS YEAR”
John Beaumont Finance Director
71197 PRE  19/6/07  17:33  Page 14 annual report 2007 15
Exchange rates
Average rates 2007 2006
US dollar 1.893 1.785
Euro 1.476 1.466
Over one third of Group revenues are
generated by overseas subsidiaries and an
increasing amount of UK business is
transacted in foreign currencies, principally
the US dollar and, to a lesser extent, the
Euro.  At constant exchange rates, the
increase in revenues for the year would
have been 15.1 per cent, £3.6 million
higher than the reported figure.
Net financial expense
Net financial expense, excluding
revaluations of financial instruments, fell
from £3.4 million in 2006 to £3.2 million.
Average interest rates payable in the year
were 6.1 per cent and average net debt
was £53.6 million compared with 5.8 per
cent and £58.6 million last year. Interest
was covered 8.0 times by adjusted
operating profit (2006: 6.3 times).  
Intangible amortisation & 
goodwill impairment
The amortisation charge in the income
statement of £2.4 million (2006:
£0.8 million) relates to the amortisation of
intangible assets arising on acquisitions,
principally the benefit of order books and
customer relationships on hand at the
dates of acquisition. An impairment
charge of £0.8 million has been made to
fully write down goodwill relating to the
electronic component distribution activity
that was closed during the year.
Significant items
Restructuring costs of £0.7 million were
incurred during the year, principally in
relation to the closure of the electronic
component distribution activity.
Profit before tax
The strong performance in the year lifted
adjusted profit before tax to £22.5 million
(2006: £18.1 million), an increase of 
24.3 per cent over the previous year.
T otal profit before tax was £19.1 million
(2006: £16.1 million).
Tax
The effective tax rate on adjusted profit was
31.9 per cent (2006: 32.8 per cent). The rate
is attributed to the increased proportion of
UK profits which are taxed at lower rates
than those from overseas subsidiaries. 
Earnings per share
Adjusted earnings per share were
32.2 pence, 4.2 per cent higher than last
year reflecting the increased number of
shares in issue as a result of the rights
issue in December 2005. Earnings per
share were 27.0 pence (2006: 27.3 pence).
Dividends
An interim dividend of 5.5 pence was paid
in December 2006 and a final dividend of
10.0 pence is proposed, making a total of
15.5 pence, a 6.9 per cent increase over the
previous year’s 14.5 pence.  The value of
the interim dividend was £2.6 million and
the value of the proposed final dividend is
£4.7 million.
Operating cash flow
2007 2006
£m £m
Operating profit 25.7 21.5
Significant items (0.7) (1.5)
Depreciation 3.5 3.1
Share based payments 0.2 0.3
Working capital &
retirement benefit
obligation movement (18.8) (9.9)
Operating cash flow 9.9 13.5
per cent per cent
Operating cash flow
conversion 38.5 62.8
Working capital ratio 22.7 19.8
Operating profit conversion to cash of
38.5 per cent fell from 62.8 per cent last
71197 PRE  18/6/07  23:42  Page 15 16 annual report 2007
year following an increase of £18.8 million 
in working capital and retirement benefit
obligations.  This principally comprised
increases of £16.3 million in inventories 
and £10.3 million in debtors, partially offset
by a rise of £9.1 million in creditors.  The
additional investment in inventories is largely
driven by increasing demand and included
higher stocks to support our contracts with
Rolls-Royce plc and Goodrich Actuation
Systems, and investment by ACG in carbon
fibre which continued to be in short supply
until easing toward the end of the year.  The
ratio of working capital to revenue increased
from 19.8 per cent to 22.7 per cent.
Capital expenditure
Gross capital expenditure of £11.0 million
(2006: £9.0 million) was £7.5 million higher
than depreciation.  Major investments in
the year included £3.3 million at ACG for
the balance of the costs of new facilities in
Heanor and additional capacity in Tulsa,
initial payments of £2.3 million in respect
of the new Pattonair Derby facility and
£1.4 million for the acquisition of new
premises in Luton to house AEM’s Aviation
Windings and Aeromedic Innovations
businesses.
Free cash flow
Following the major increase in working
capital and the capital expenditure
programme in the year, operating cash flow
less interest, tax and capital expenditure
consumed £9.7 million (2006: £2.0 million).
Finance Director’s Review 
“WE HAVE CONTINUED TO INVEST IN
OUR CORE INFRASTRUCTURE, OPENING
THE NEW TECHNOLOGY CENTRE AND
MANUFACTURING FACILITY AT ACG,
SECURING THE SITE FOR THE NEW UMECO
SUPPLY CHAIN FACILITY IN DERBY AND
EXPANDING IN CHINA”
71197 PRE  18/6/07  23:42  Page 16 annual report 2007 17
T ax paid was £0.5 million above the charge
in the financial statements, due to timing
differences.
Acquisitions
Expenditure on acquisitions in the year,
as set out in the Chairman’s Statement,
was £11.7 million (2006: £14.0 million)
net of cash balances acquired. This
expenditure included £2.4 million in
respect of deferred consideration,
principally relating to the acquisition
of Pattonair Italy.
Net indebtedness and gearing
2007 2006
£m £m
Net debt 51.8 26.7
per cent per cent
Gearing 35.2 18.8
Net debt increased by £25.1 million during
the year due mainly to additional working
capital investment and the acquisition 
of Antavia.
Group banking facilities comprise a
US$150.0 million revolving credit facility
and a £10.0 million overdraft.  Gearing
increased from 18.8 per cent last year to
35.2 per cent; and debt and interest cover
levels remain well within banking
covenant limits. Changes in exchange
rates, principally the weakening of the 
US dollar, resulted in a reduction in the
sterling value of net debt of £3.7 million.
Equity and shares issued
Equity attributable to equity holders of 
Umeco increased from £141.9 million to
£146.9 million.  The increase includes the
profit for the year of £12.8 million, less
dividends paid of £7.1 million.  In addition,
194,000 shares were issued to employees
under the Group’s share option schemes,
raising £0.4 million.
Pensions
The Group operates a number of defined
contribution pension schemes together with
two defined benefit plans, both of which are
closed to new members. The latest actuarial
valuations of these two plans, conducted in
2005, show a deficit of £5.5 million
compared with a deficit of £1.5 million in
the previous valuations in 2002. The
increase was due to changes in inflation and
mortality assumptions and to a lower rate
of return used in the valuation of scheme
assets.  The Board has agreed with the
pension plans’ trustees that the deficit will
be funded over five years and accordingly,
special payments totalling £1.4 million were
made to the plans during the year. 
Under IFRS, the deficits under the plans are
now recognised in the balance sheet. The
IAS19 valuation of the plans at 31 March
2007 showed a reduction in the shortfall in
assets to liabilities to £1.4 million, after
associated tax relief, from £2.7 million in the
previous year. The reduction is principally
the result of the special contributions made
during the year.
Currency exchange risk
The Group seeks to hedge currency exchange
risks by matching purchases and revenues
that are denominated in foreign currencies.
Where this is not possible, forward currency
contracts may be taken out to protect
exposures.  Group policy prohibits
speculation in currency management. 
The retranslation of the Group’s net
investment in overseas businesses led to
the net deficit of £1.5 million being
debited to the translation reserve.
Interest rate risk
Following the Euro funded acquisition of
Antavia, a smaller proportion of the Group’s
interest charge is now US dollar based.
The weakening of the US dollar had the
effect of reducing interest costs by
£0.1 million compared with the previous
year.  Whilst the Group does not hedge the
currency value of interest charges, it has
partly protected the interest rate risk by the
use of interest rate swaps. These instruments
have fixed the base rate on 51.9 per cent of
the Group’s year end debt at below 5 per
cent and will provide cover on approximately 
40 per cent of the Group’s anticipated debt
during the current financial year.
John Beaumont
Finance Director
5 June 2007
71197 PRE  18/6/07  23:42  Page 17
➦ 18 annual report 2007
Directors
From left to right: 1. David Porter, 2. Graham Zacharias, 3. John Beaumont, 4. Stephen Bird,
5. Brian McGowan, 6. Michael Harper, 7. Steve Bowers, 8. Clive Snowdon
71197 PRE  18/6/07  23:42  Page 18 annual report 2007 19
Brian McGowan (Age 62)
Chairman
Brian McGowan joined the Group in April
1997 as non-executive Chairman and is a
member of the remuneration committee. He
was appointed Chairman of Rentokil Initial
PLC in May 2004 and is also non-executive
Chairman of Catalyst Corporate Finance
Limited. He was a co-founder of Williams plc,
and has also been Chairman of House of
Fraser plc and Chairman of Burnfield PLC.
Clive Snowdon (Age 53)
Chief Executive
Clive Snowdon joined the Group in April 1997
and has a broad industrial background with
significant experience in both distribution
and manufacturing. Previously he was
Managing Director of Burnfield PLC and has
held senior positions with Vickers PLC and
Hawker Siddeley Group PLC. In September
2006, he was elected to the Board of Directors
of the Midlands Aerospace Alliance, and, in
May 2007, he was appointed a non-executive
Director of Hill & Smith Holdings PLC.
John Beaumont (Age 60)
Finance Director
John Beaumont joined Umeco in 1993 as
Finance Director having previously had wide
industrial experience both in financial and
operational roles as Chief Executive of
Hunslet Holdings PLC and as a Director of
Telfos Holdings plc. 
Michael Harper (Age 62)
Non-executive Director
Michael Harper joined the Board in June 
2002 as a non-executive Director. He was
appointed executive Chairman of BBA
Aviation plc in January 2007 and will 
become non-executive Chairman in June
2007. He is non-executive Chairman of 
The Vitec Group plc, a non-executive Director 
of Ricardo plc and Senior independent
non-executive Director of Catlin Group Limited.
In 2005, Michael retired as Chief Executive 
of Kidde plc, for whom he had worked in 
a number of roles since 1984. Michael is 
a member of the audit and remuneration
committees.
David Porter (Age 62)
Non-executive Director
David Porter joined the Board as a 
non-executive Director in January 2001, 
and was appointed Senior independent
non-executive Director in February 2005. 
He is a retired stockbroker and was a senior
corporate broker at BZW until January 1997,
since when he has pursued private interests.
David is chairman of the audit committee.
Graham Zacharias (Age 56)
Non-executive Director
Graham Zacharias joined the Board as a
non-executive Director in September 2005. 
He was appointed Group Finance Director
of Rightmove Plc in January 2006, having
previously been Group Finance Director of
Spectris plc from 1995 until 2004, and has
also served as Finance Director of the
Aerospace Group of BTR plc. Graham is
a member of the audit committee and is
chairman of the remuneration committee.
Stephen Bird (Age 46)
Non-executive Director
Stephen Bird joined the Board in October
2006 as a non-executive Director. He is
currently Divisional Managing Director of 
the Weir Group plc’s Clear Liquid Division.
Stephen has extensive experience in high
technology industries having held a number
of senior management positions with Black
and Decker Europe, Unipart Group and
Technicolor Group. Stephen is a member 
of the remuneration committee.
Steve Bowers (Age 34)
Company Secretary
Steve Bowers joined the Group in 1998
having qualified as a chartered accountant
with KPMG. He has been Company
Secretary since 1999 and was also
appointed Group Financial Controller 
in 2004.
71197 PRE  18/6/07  23:42  Page 19
➦ 20 annual report 2007
Executive Management
From left to right: 1. Jason Crabtree, 2. Steve Bowers, 3. John Smith, 4. Clive Snowdon,
5. John Beaumont, 6. Andrew Moss
71197 PRE  18/6/07  23:43  Page 20 annual report 2007 21
Clive Snowdon (Age 53)
Chief Executive
Clive Snowdon joined the Group in 
April 1997 and has a broad industrial
background with significant experience 
in both distribution and manufacturing.
Previously he was Managing Director of
Burnfield PLC and has held senior positions
with Vickers PLC and Hawker Siddeley
Group PLC. In September 2006, he was
elected to the Board of Directors of the
Midlands Aerospace Alliance and, in May
2007, he was appointed a non-executive
Director of Hill & Smith Holdings PLC.
John Beaumont (Age 60)
Finance Director
John Beaumont joined the Group in 1993
as Finance Director having previously 
had wide industrial experience both in
financial and operational roles as Chief
Executive of Hunslet Holdings PLC and 
as a Director of Telfos Holdings plc.
Jason Crabtree (Age 37)
Chief Executive – Umeco Supply Chain
Jason Crabtree has been with Umeco for 
17 years, during which time he has held
several senior management positions
including Managing Director of Pattonair. 
A career-long aerospace professional, he
was appointed Chief Executive of Umeco
Supply Chain in 2000.
Andrew Moss (Age 50)
Chief Executive – Umeco Composites
Andrew Moss joined the Group in 1999 in
his current role. He has a broad industrial
and aerospace background, and was
previously with Invensys plc, where he 
was Chief Executive of the Automotive 
and Building Products Group.
John Smith (Age 51)
Chief Executive – Umeco Repair & Overhaul
John Smith was appointed Chief Executive
of Umeco Repair & Overhaul in March
2005. He was Managing Director of AEM
from 1989 until 2005, and has significant
experience of the aerospace sector, having
previously held appointments with RTZ 
and SKF .
Steve Bowers (Age 34)
Company Secretary
Steve Bowers joined the Group in 1998
having qualified as a chartered accountant
with KPMG. He has been Company
Secretary since 1999 and was also
appointed Group Financial Controller 
in 2004.
71197 PRE  18/6/07  23:43  Page 21
➦ The Directors submit their annual report and financial statements for the year to 31 March 2007.
Principal activities
Umeco is a leading innovator in distribution, supply chain management and repair & overhaul services to the aerospace & defence
industries, harnessing new methods for enhancing its customers’ performance and profitability.
Umeco also has significant manufacturing interests in advanced composite materials for a growing range of applications in its core
aerospace & defence markets and in other high performance technology industries such as motor sport & automotive and wind energy.
Review of Group’s business
The results for the year, analysis of the development and performance and future prospects of the Group are reviewed in the Chairman’s
Statement on pages 4 to 7 and in the reviews of the Chief Executive and Finance Director on pages 8 to 17. These reviews contain details
of the key performance measures used to manage and control the Group’s operations, and set out information on the future prospects 
of the Group.
Details of the results for the year are shown in the consolidated income statement on page 28. Analyses of revenue and operating profit
by segment are shown in note 1 to the consolidated financial statements. Details of post balance sheet events are set out in note 28 to
the consolidated financial statements.
Principal risks and uncertainties facing the Group
The Group’s business, financial condition or results could be materially and adversely affected by a number of risks and uncertainties,
both those relating to the marketplaces in which it operates and those attributable to the wider social and economic environment. These
risks may result in the cancellation of orders placed with the Group by its customers, bad debts or inventory losses. The Board’s policies
on internal control, summarised on page 76, have been designed to manage rather than eliminate the risk of failure to achieve the
Group’s objectives and can only provide reasonable and not absolute assurance against material losses arising. The principal risks and
uncertainties are summarised below:
● the demand for aerospace products and services may decline, reducing the Group’s revenues;
● a terrorist attack on an airline-related target or the outbreak of war or disease would cause passenger numbers to decline,
reducing demand for airline travel. This could cause a recession in the aerospace sector, with the cancellation by airlines of orders
for new aircraft;
● a significant rise in wholesale crude oil prices could lead to a reduction in air passenger numbers, as airlines pass costs onto
customers. This would in turn reduce prospects for the global aerospace industry;
● the introduction of new rules relating to air travel, for example environmental levies, could lead to a reduction in passenger
numbers, as airlines pass increased costs onto customers;
● if the Group is not successful in developing competitive new products and services, its revenues may decline;
Directors’ Report
22 annual report 2007
71197 PRE  18/6/07  23:43  Page 22 ● the Group supplies many products and services to the civil aerospace industry. The failure of any such products and services
could result in liabilities which exceed the Group’s product liability insurance cover, thereby resulting in financial losses for
the Group;
● the loss by the Group of a major customer may adversely affect its financial condition and prospects. The loss of a major supplier
may have similar effects, and may force the Group into the breach of contracts with it customers, as products which are required
become unavailable;
● the Formula 1 industry, an important market for Umeco Composites, is a highly regulated motor sport, with manufacturing based
primarily in the UK. Changes to the rules relating to the design of the cars, including the materials permitted to be used, could lead
to a reduction in demand for the Group’s advanced composite products. The relocation of Formula 1 teams’ manufacturing
functions out of the UK could also adversely affect demand levels;
● a failure to manage the Group’s inventory effectively may result in unplanned shortages or significant surpluses of inventory.
Unplanned shortages could lead to breaches of contractual obligations and inventory surpluses may result in write offs;
● a failure or suspension of the Group’s IT systems could disrupt the Group’s activities and cause it to fail to meet customer
expectations. This could adversely affect the Group’s business or the results of its operations;
● damage to the Group’s premises, plant or equipment could adversely affect the Group’s business and prospects;
● the failure by the Group’s customers to pay due sums could adversely affect the results of its operations; and
● material fluctuations in exchange and interest rates could adversely affect the Group’s profitability.
Information on the Group’s use of financial instruments, financial risk management objectives, policies and exposure is shown in 
note 25 to the consolidated financial statements.
Profits and dividends
The consolidated income statement is shown on page 28. Profit before tax was £19.1 million (2006: £16.1 million).
The Directors propose a final dividend of 10.0 pence per share, payable on 3 August 2007 to shareholders registered on 6 July 2007,
making a total for the year of 15.5 pence per share (2006: 14.5 pence).
Acquisitions
In June 2006, Advanced Composites Group Limited acquired the entire issued share capital of Aerodyne Advanced Composites (Pty) Limited
(‘ Aerodyne’) from Aerodyne Industries (Pty) Limited. Following the acquisition, the name of the acquired company was changed to
Advanced Composites Group SA (Pty) Limited. The cost of the Group’s investment in the share capital of Advanced Composites Group SA
(Pty) Limited is £0.1 million. Advanced Composites Group SA (Pty) Limited, based in Cape Town, South Africa, manufactures advanced
composite component parts principally for the automotive sector.
annual report 2007 23
71197 PRE  18/6/07  23:43  Page 23 In October 2006, the entire issued share capital of Antavia SAS (‘ Antavia’) was acquired for a maximum cash consideration of €12.8 million.
Based in Toulouse, Antavia is a provider of repair & overhaul services to the aerospace industry. The business offers maintenance, repair &
overhaul services in respect of a wide range of aircraft equipment including wheels, brakes and landing gear.
In November 2006, Aeropia, Inc. acquired the trade and assets of US Airmotive International, Inc. (‘US Airmotive’). The trade of US Airmotive
was the distribution of a wide range of aerospace chemicals to the OEM and maintenance, repair & overhaul markets. Consideration paid
was US$1.1 million.
Share capital
Details of share capital are given in note 17 to the consolidated financial statements.
Share allotment
A general allotment power and a limited power to allot in specific circumstances for cash otherwise than pro-rata to existing
shareholders were given to the Directors by resolutions approved at the Annual General Meeting of the Company held on 25 July 2006.  
These powers will expire at the conclusion of the 2007 Annual General Meeting and resolutions to renew the Directors’ powers are
therefore included within the notice of the 2007 Annual General Meeting.
Directors
The names of Directors at the date of this report, together with biographical details, are shown on page 19. Stephen Bird was appointed
a Director on 2 October 2006 and John Harper retired as a Director on 25 July 2006. John Harper had joined the Board as a non-executive
Director in 1995 and was Finance Director of Eldridge Pope & Co plc until February 2002, since when he has pursued private interests.
Directors retire by rotation at intervals of no more than three years, in accordance with the Combined Code.
Brian McGowan and Clive Snowdon retire by rotation and, being eligible, offer themselves for re-election at the forthcoming Annual
General Meeting.  In addition, Stephen Bird, having joined the Board since the date of the last Annual General Meeting, retires in
accordance with the Company’s Articles of Association and offers himself for election.  Brian McGowan and Stephen Bird have letters 
of appointment with the Company, and Clive Snowdon has a service contract with the Company.  Details of all these documents are 
set out in the Remuneration Report. Michael Harper is retiring at the forthcoming Annual General Meeting and will not be seeking 
re-election. Chris Hole is being appointed to the Board with effect from 25 July 2007.
Apart from service contracts, no Director had an interest during the year or at the year end in any contracts with the Company or its
subsidiaries and no Director had any beneficial interest in the shares of any of the Company’s subsidiaries.
Details of Directors’ remuneration, share options and interests are set out in the Remuneration Report.
Employees, employment policy and employee involvement
Information relating to employee numbers and remuneration is given in note 2 to the consolidated financial statements. Details of
employment policy and employee involvement are set out in the Corporate Governance statement.
Directors’ Report
24 annual report 2007
71197 PRE  18/6/07  23:43  Page 24 Substantial shareholders
The Directors have been notified of the following interests of 3.0 per cent or more in the issued share capital of the Company as at
5 June 2007:
Number
of shares Per cent
AXA S.A. (including Framlington Investment Management Limited) 8,219,453 17.3
Aberforth Partners 4,319,692 9.1
Standard Life Investment Management Limited 3,664,481 7.7
Aviva plc 3,551,717 7.5
Rathbone Unit Trust Management Limited 2,986,766 6.3
Legal & General Investment Management Limited 1,638,223 3.4
Authority to make market purchases of own shares
It is intended to propose a Special Resolution to give the Company authority to make market purchases on the London Stock Exchange 
of up to 10.0 per cent of the ordinary shares in issue at the date of the Annual General Meeting.  Any purchase therefore will be subject
to the terms of the Listing Rules, which provide that the maximum price (exclusive of expenses) which may be paid for an ordinary share
is an amount equal to 105.0 per cent of the average of the middle market quotations for an ordinary share, taken from the daily official 
list of the London Stock Exchange for the 5 business days immediately preceding the day on which the ordinary share is purchased.  
The minimum price (exclusive of expenses) which may be paid for an ordinary share is 25 pence, its nominal value.  Such market
purchases of ordinary shares would be made from the Company’s distributable reserves. Ordinary shares purchased pursuant to the
authority will either be cancelled or held as treasury shares.  Shares held by the Company as treasury shares may be sold, transferred for
the purpose of employee share schemes, or cancelled.
Donations
The Group made charitable donations amounting to £17,000 (2006: £4,000) during the year.  The Group made no political donations
during the year.
Corporate social responsibility, employment and environmental matters
Details of corporate social responsibility, employment and environmental matters are set out in the Corporate Governance statement.
Payment policy
It is the Group’s normal procedure to agree terms of transactions, including payment patterns, with suppliers in advance and to 
adhere to those patterns when making payments.  At 31 March 2007, the Company had 16 days purchases outstanding included in
creditors (2006: 10 days).
annual report 2007 25
71197 PRE  18/6/07  23:43  Page 25 Annual General Meeting
The Annual General Meeting will be held at 12 noon on Wednesday 25 July 2007 at The Falstaff Hotel, 16-20 Warwick New Road, 
Leamington Spa, Warwickshire, CV32 5JQ. The notice of the Annual General Meeting is set out on pages 95 to 100.
The Board’s authority to grant share options under the rules of the Umeco plc savings-related share option scheme expires later this 
year and this has prompted the Board to carry out a review of the Company’s all-employee share incentive arrangements. Accordingly,
resolutions 10 and 11 seek approval for the establishment of the following new schemes:
● the Umeco Sharesave Scheme (providing for the grant of options which qualify for favourable UK tax treatment along similar lines
to the Company’s current savings-related share option scheme); and
● the Umeco US Employee Stock Purchase Plan (providing for the grant of options to acquire shares to employees based in the US
in a manner intended to qualify for favourable US tax treatment whilst operating in a similar manner to a savings-related share
option scheme).
The principal terms of these schemes are summarised in the Appendix to notice of the Annual General Meeting on pages 99 and 100.
Resolutions 10 and 11 also seek authority for the Directors to establish further share incentive plans for the benefit of executives and
employees resident in jurisdictions other than the UK and the US. Any such new scheme will be based on a scheme previously approved
by shareholders modified to take account of local tax, exchange control or securities laws in overseas territories. Any shares over which
options are granted under any such overseas scheme would count towards the overall and individual limits applicable to the scheme 
on which it is based.
Auditors
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there is no
relevant audit information of which the Company’s auditors are unaware; and each Director has taken all the steps that he ought to
have taken as a Director to make himself aware of any relevant audit information and to establish that the Company’s auditors are
aware of that information.
Resolutions for the re-appointment of KPMG Audit Plc as auditors of the Company and for authorising the Directors to determine 
their remuneration will be proposed at the forthcoming Annual General Meeting.
By order of the Board
S J Bowers 
Company Secretary
5 June 2007
Registered office:
Concorde House
24 Warwick New Road
Leamington Spa 
Warwickshire 
United Kingdom
CV32 5JG
Registration number: 148635
Website: www.umeco.com
Directors’ Report
26 annual report 2007
71197 PRE  18/6/07  23:43  Page 26
➦ Highlights
Year to Year to
31 March 2007 31 March 2006 Change
£m £m per cent
Revenue 333.9 293.2 +13.9 
Adjusted operating profit* 25.7 21.5 +19.5 
Operating profit 22.0 19.2 +14.6 
Adjusted profit before tax* 22.5 18.1 +24.3 
Profit before tax 19.1 16.1 +18.6 
Change
Pence Pence per cent
Adjusted earnings per share* 32.2 30.9 +4.2 
Basic earnings per share 27.0 27.3 -1.1 
Dividend per share 15.5 14.5 +6.9 
* Umeco uses adjusted figures as key performance indicators. Adjusted figures are stated before amortisation and impairment charges
relating to intangible assets, significant items, the revaluation of financial instruments based on their market values, associated tax
effects and the tax effects of goodwill amortisation in overseas jurisdictions. The differences between the adjusted and unadjusted
measures of operating profit, profit before tax and profit attributable to shareholders are reconciled in note 8 to the consolidated
financial statements. The narrative on pages 4 to 17 is based on the adjusted measures of operating profit, profit before tax and
earnings per share. These provide a more consistent measure of operating performance.
Financial Statements 
annual report 2007 27
Contents
Consolidated Income Statement 28
Consolidated Balance Sheet 29
Consolidated Statement of Cash Flows 30
Consolidated Statement of Recognised Income and Expense 31
Accounting Policies 32
Notes to the Consolidated Financial Statements 36 
Company Balance Sheet 64 
Notes to the Company Financial Statements 65
71197 PRE  18/6/07  23:43  Page 27
➦ 2007 2006
Notes £m £m
Revenue 1 333.9 293.2
Cost of sales (241.8) (215.6)
Gross profit 92.1 77.6
Administrative expenses (70.1) (58.4)
Operating profit 1,3 22.0 19.2
Financial income 4 1.5 1.0
Financial expense 4 (4.4) (4.1)
Profit before tax 19.1 16.1
Income tax – UK 5 (4.4) (3.5)
Income tax – overseas 5 (1.8) (1.9)
Profit for the year 12.9 10.7
Attributable to:
Equity holders of the parent 12.8 10.7
Minority interest 0.1 –
12.9 10.7
pence pence
Basic earnings per share 7 27.0 27.3
Diluted earnings per share 7 26.8 27.0
Consolidated Income Statement
For the year to 31 March 2007
28 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 28
➦ 2007 2006
Notes £m £m
Assets
Non-current assets
Property, plant & equipment 9 32.5 25.1
Intangible assets 10 100.0 96.4
Deferred tax assets 11 2.8 3.4
135.3 124.9
Current assets
Inventories 12 88.8 73.0
Trade & other receivables 13 81.7 71.0
Financial assets 25 0.5 0.2
Income tax receivable 1.2 1.2
Cash 14 7.9 9.5
180.1 154.9
Total assets 315.4 279.8
Liabilities
Current liabilities
Trade & other payables 15 (94.7) (85.8)
Income tax payable (4.2) (5.2)
Loans & borrowings 16 (1.0) (0.3)
(99.9) (91.3)
Non-current liabilities
Other payables (3.7) (3.7)
Deferred tax liabilities 11 (3.9) (2.9)
Retirement benefit obligation 22 (2.0) (3.8)
Loans & borrowings 16 (58.7) (35.9)
(68.3) (46.3)
Total liabilities (168.2) (137.6)
Net assets 147.2 142.2
Equity
Share capital 17 11.9 11.8
Share premium 18 113.9 113.6
Translation reserve 18 (1.0) 0.5
Retained earnings 18 22.1 16.0
Equity attributable to equity holders of the parent 146.9 141.9
Minority interest 0.3 0.3
Total equity 147.2 142.2
The financial statements were approved by the Board of Directors on 5 June 2007 and signed on its behalf by:
BD McGowan
Director
Consolidated Balance Sheet
As at 31 March 2007
annual report 2007 29
71197 ACCOUNTS part 1  16/6/07  09:29  Page 29
➦ 2007 2006
Notes £m £m
Cash flows from operating activities
Profit for the year 12.9 10.7
Depreciation 3.5 3.1
Amortisation & impairment charges 3.0 0.8
Financial income (1.5) (1.0)
Financial expense 4.4 4.1
Share based payments expense 0.2 0.3
Income tax expense 6.2 5.4
28.7 23.4
Increase in inventories (16.3) (12.3)
Increase in trade & other receivables (10.3) (10.3)
Increase in trade & other payables 9.1 13.7
Decrease in retirement benefit obligation (1.3) (1.0)
Cash generated from operations 9.9 13.5
Net financial expense paid (2.6) (3.3)
Tax paid (6.7) (4.1)
Net cash flow from operating activities 0.6 6.1
Cash flows from investing activities
Acquisition of property, plant & equipment (10.5) (8.5)
Proceeds from sale of property, plant & equipment 0.2 0.4
Acquisition of subsidiaries, net of cash balances acquired 20 (11.7) (14.0)
Net cash flow from investing activities (22.0) (22.1)
Cash flows from financing activities
Proceeds from issue of share capital 0.4 49.0
Drawdown of bank loans 31.4 24.1
Repayment of bank loans (5.0) (50.9)
Repayment of lease finance liabilities (0.5) (0.5)
Dividends paid to equity holders of the parent 6 (7.1) (4.5)
Dividends paid to minority interest (0.1) –
Net cash flow from financing activities 19.1 17.2
Net (decrease)/increase in cash (2.3) 1.2
Cash at start of year 9.5 6.9
Effect of exchange rate fluctuations 0.2 1.4
Net cash at end of year 14 7.4 9.5
Consolidated Statement of Cash Flows
For the year to 31 March 2007
30 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 30
➦ 2007 2006
£m £m
Foreign exchange translation differences (1.5) 0.3
Actuarial gain in pension schemes 0.5 0.3
Tax in respect of the above (0.1) –
Income and expense recognised directly in equity (1.1) 0.6
Profit for the year 12.9 10.7
Total recognised income and expense for the year 11.8 11.3
Attributable to:
Equity holders of the parent 11.7 11.3
Minority interest 0.1 –
Total recognised income and expense for the year 11.8 11.3
Consolidated Statement of Recognised Income and Expense
For the year to 31 March 2007
annual report 2007 31
71197 ACCOUNTS part 1  16/6/07  09:29  Page 31
➦ Umeco plc (the ‘Company’) is a company domiciled in the UK. The consolidated financial statements of the Company for the year to 
31 March 2007 comprise the Company and its subsidiaries (together referred to as the ‘Group’). The consolidated financial statements
were approved for release by the Board of Directors on 5 June 2007.
Statement of compliance
The Group’s financial statements as approved by the Directors have been prepared in accordance with IFRS as adopted by the EU
(‘ Adopted IFRSs’). The Company has elected to prepare its parent company financial statements in accordance with UK GAAP . These are
shown on pages 64 to 70.
Basis of preparation
The accounting policies set out on pages 32 to 35 have been applied consistently in dealing with items which are considered material in
relation to the Group’s financial statements.
The financial statements are presented in pounds sterling. They are prepared on the historic cost basis except that the following assets
and liabilities are stated at their fair values – monetary items (IAS21), derivative financial instruments (IAS39), retirement benefit
obligations (IAS19) and share based payments (IFRS2).
The following standards and interpretations have been endorsed by the EU by the year end but are not yet effective for the year to
31 March 2007:
● IFRS7 ‘Financial instruments: Disclosures’;
● IFRS8 ‘Operating Segments’;
● IFRIC8 ‘Scope of IFRS2’;
● IFRIC9 ‘Reassessment of embedded derivatives’;
● IFRIC10 ‘Interim Financial Reporting & impairment’;
● IFRIC11 ‘IFRS2 – Group and Treasury Share Transactions’; and
● IFRIC12 ‘Service Concession Arrangements’.
The Group has considered the impact of these new standards and interpretations in future periods on the financial statements and no
significant impact is expected. The Group has chosen not to early adopt any of the above standards and interpretations.
Consolidation
The consolidated financial statements incorporate the financial statements of the Company and all of its subsidiaries. Acquisitions are
accounted for using the purchase method, when control over the operating and financial policies of a company has been acquired.
Control exists when the Company has direct or indirect power to govern the financial and operating policies of an entity so as to obtain
economic benefit from its activities. Consolidation of subsidiaries continues until that control ceases.
Goodwill & intangible assets
Goodwill represents amounts arising on acquisition of subsidiaries. In respect of acquisitions that have been announced since 1 April
2004, goodwill represents the difference between the fair value of the cost of the acquisition (including the attributable costs of the
acquisition) and the fair value of the net identifiable assets acquired, and is allocated to cash generating units. Positive goodwill 
is recognised as an asset on the balance sheet. Negative goodwill, representing the excess of the fair value of assets acquired above the
fair value of consideration paid, arising on acquisitions is recognised immediately in the income statement.
Accounting Policies
For the year to 31 March 2007
32 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 32 In respect of acquisitions announced prior to 1 April 2004, goodwill is included on the basis of its deemed cost, which represents
the amount recorded under UK GAAP on transition.
Goodwill is stated at cost or deemed cost less any impairment losses. The carrying value of goodwill is reviewed for impairment at each
balance sheet date.
Fair value adjustments are considered to be provisional for up to 12 months after the date of acquisition to allow time to elapse for any
adjustments to be accurately quantified.
Goodwill is not amortised, but is reviewed for impairment at least annually; any impairment is recognised immediately in the income
statement and is not subsequently reversed. On disposal of a subsidiary undertaking, the attributable amount of goodwill is included 
in the determination of the profit or loss on disposal.
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation. Amortisation is charged to 
the income statement over the estimated useful life of the asset. The useful lives of order books, customer relationships and contracts
are between one and five years. 
Impairment
The carrying values of assets that have an indefinite useful life, including goodwill, are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment
loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The recoverable
amount is the higher of fair value less costs to sell and the value in use. Impairment losses are recognised in the income statement.  
Revenue
Revenue represents the fair value of consideration receivable (excluding value added tax) from the provision of goods and services to
customers during the year.
Grants that compensate the Group for expenses incurred are recognised as revenue in the income statement on a systematic basis 
in the same periods in which the expenses are incurred.
Employee benefits
The Group operates pension schemes providing benefits based on final pensionable salaries and on contributions made by members. 
The assets of the schemes are held separately from those of the Group. For defined contribution pension schemes, amounts payable are
charged to the income statement as they fall due.
For defined benefit pension schemes, the IAS19 cost of providing benefits is calculated triennially by independent actuaries using the 
projected unit credit method, updated annually. The charge to the income statement reflects the current service cost of such obligations,
and where applicable, past service cost. The expected return on plan assets and the interest cost on scheme liabilities are included
within financial income and expense in the income statement.
The retirement benefit obligation recognised in the balance sheet represents the present value of the liabilities of the defined benefit
schemes as reduced by the fair value of the assets of those schemes. Differences between the actual and expected returns on assets and
experience gains and losses arising on scheme liabilities, together with differences arising from changes in assumptions, are recognised in 
the statement of recognised income and expense.
The Group’s contributions to the schemes are paid in accordance with the schemes’ rules and the recommendations of the scheme
actuaries.
The fair value of options granted under share based payment schemes is recognised as an expense with a corresponding increase in
equity. Fair values of options are estimated using the Black-Scholes model, taking into account the terms and conditions under which 
the options were granted. The fair value determined at grant date is expensed on a straight line basis over the vesting period, with the
amount recognised as an expense being adjusted to reflect the actual number of options that vest except where forfeiture is solely due 
to share prices not achieving the threshold for vesting.
annual report 2007 33
71197 ACCOUNTS part 1  16/6/07  09:29  Page 33 Property, plant & equipment
Items of property, plant & equipment are stated at cost or deemed cost less accumulated depreciation. Assets held under lease finance
arrangements are depreciated over the shorter of the lease term and the expected useful life of the asset.
Depreciation is provided so as to write off the cost or valuation of property, plant & equipment over their estimated useful economic
lives on a straight line basis as follows:
Freehold buildings and long leasehold property improvements 50 years
Short leasehold property improvements period of lease
Plant, machinery, fixtures & IT equipment 3-10 years
Motor vehicles 3-4 years
No depreciation is charged on freehold land.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Included within inventories are certain grant funded projects. To the extent that the costs on these projects are recoverable from the
grant providers, the costs are included within inventories. Where progress payments exceed the cost of the related work included in
inventories, the balance is recorded in creditors as payments on account.
Research & development
Expenditure on research is written off against profits as incurred, except to the extent that it is recoverable from grant funding. Where
development expenditure meets the criteria of IAS38, such expenditure will be capitalised and amortised over its useful life. Where the
research & development is grant funded, the grant and the related expenditure is accounted for as described above.
Interest
Interest receivable or payable is credited or charged to the income statement using the effective interest method.
Income tax
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at the balance
sheet date, and any adjustments to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the assets and liabilities, using tax rates enacted or substantively enacted 
at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset
can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Leases
Where the Group enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is
treated as a finance lease. The asset is recorded in the balance sheet in property, plant & equipment at the lower of the fair value at the
date of acquisition or the present value of the minimum lease payments, and is depreciated over the shorter of its estimated useful life
and the lease term. Future instalments under such leases, net of finance charges, are included within creditors. Rentals payable are
apportioned between the finance element, which is charged to the income statement as interest, and the capital element, which
reduces the outstanding obligation for further instalments. All other leases are operating leases and the rental charges are taken to 
the income statement on a straight line basis over the life of the lease.
Accounting Policies
For the year to 31 March 2007
34 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 34 Provisions
A provision is recognised on the balance sheet when the Group has a present legal or constructive obligation as a result of a past event,
and where it is probable that an outflow will be required to settle the obligation.
Share capital
The share capital of the Company is recorded at the proceeds received, net of directly attributable issue costs. Consideration paid for
shares in the Company in respect of share based payments are deducted from retained earnings. Where such shares subsequently
vest in the employees under the terms of the Group’s share option schemes or are sold, any consideration received is included in
retained earnings.
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are translated using the rate of exchange ruling at the balance
sheet date and the gains or losses on translation are included in the income statement.
Income statements and cash flows of overseas subsidiaries are consolidated at the average rate of exchange for the year. On
consolidation, the balance sheet of overseas entities are translated into sterling at the rates of exchange ruling at the balance sheet date.
Foreign exchange differences arising from the translation into sterling of equity interests in overseas subsidiary undertakings are treated
as movements in the translation reserve.
Net investment hedging of overseas operations is achieved through borrowings denominated in the relevant foreign currencies. Gains
and losses arising from the effective portion of the hedges are recognised in equity and ineffective portions are recognised immediately
in the income statement.
Financial instruments
Financial instruments are recognised when the Group becomes a party to the contractual provisions of the instrument. The principal
financial assets and liabilities of the Group are as follows:
(a) Trade receivables
Trade receivables are initially recognised at fair value and are then stated at amortised cost.
(b) Cash
Cash is carried in the balance sheet at fair value. For the purposes of the statement of cash flows, cash comprises cash at bank and in
hand together with bank overdrafts, as these items are an integral part of the Group’s cash management. The Group does not have any
short term deposit instruments.
(c) Trade payables
Trade payables are initially recognised at fair value and are then stated at amortised cost.
(d) Bank loans & other borrowings
Interest bearing bank loans, overdrafts and other loans are initially recognised at fair value less attributable transaction costs. All
borrowings are subsequently stated at amortised cost with the difference between the initial proceeds and the repayment value being
recognised in the income statement over the period to repayment.
(e) Derivative financial instruments
The Group uses derivative financial instruments to manage financial risks associated with the Group’s business activities and the 
financing of those activities.  Derivatives are initially recognised at fair value on the date that the contract is entered into and
subsequently re-measured in future periods at their fair value, with any change in value being recognised in the income statement. 
The Group does not apply hedge accounting in respect of these financial statements.
The Group enters into forward foreign exchange contracts to provide a hedge against foreign currency exposures.  Interest rate swap
contracts are used to hedge the Group’s exposure to changes in interest rates. 
Fair values are based on quoted market prices at the balance sheet date.
annual report 2007 35
71197 ACCOUNTS part 1  16/6/07  09:29  Page 35
➦ 1 Segmental reporting
Segmental information is presented in respect of the Group’s business and geographical segments. Details of revenue by destination is
also shown. The primary basis of segmental reporting is by business segment, and this format reflects the Group’s management and
internal reporting structure. Details of business segments can be found on pages 88 to 91 and details of the calculation of adjusted
operating profit are shown in note 8.
Business segments
Revenue Adjusted operating profit Total operating profit
2007 2006 2007 2006 2007 2006
Continuing before acquisitions* £m £m £m £m £m £m
Composites 150.2 131.4 14.0 11.9 13.9 11.9
Supply Chain 157.6 141.4 8.4 7.2 6.0 5.2
Repair & Overhaul 20.4 20.4 2.1 2.4 1.9 2.1
328.2 293.2 24.5 21.5 21.8 19.2
Acquisitions*
Composites 2.0 – 0.6 – 0.8 –
Supply Chain – – – – – –
Repair & Overhaul 3.7 – 0.6 – (0.6) –
5.7 – 1.2 – 0.2 –
Total
Composites 152.2 131.4 14.6 11.9 14.7 11.9
Supply Chain 157.6 141.4 8.4 7.2 6.0 5.2
Repair & Overhaul 24.1 20.4 2.7 2.4 1.3 2.1
333.9 293.2 25.7 21.5 22.0 19.2
* Acquisitions are defined as those that occurred during the year to 31 March 2007.
2007 2006
£m £m
Total operating profit (as above) 22.0 19.2
Financial income 1.5 1.0
Financial expense (4.4) (4.1)
Profit before tax 19.1 16.1
Income tax – UK (4.4) (3.5)
Income tax – overseas (1.8) (1.9)
Profit for the year 12.9 10.7
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
36 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 36 1 Segmental reporting (continued)
2007 2006
£m £m
Segment assets
Composites 135.5 123.1
Supply Chain 141.6 126.5
Repair & Overhaul 33.1 23.4
Unallocated assets 5.2 6.8
Total assets 315.4 279.8
Segment liabilities
Composites (37.1) (35.8)
Supply Chain (66.9) (57.2)
Repair & Overhaul (11.1) (9.1)
Unallocated liabilities (53.1) (35.5)
Total liabilities (168.2) (137.6)
Net assets 147.2 142.2
2007 2006
Capital expenditure £m £m
Composites 5.0 5.8
Supply Chain 3.8 1.2
Repair & Overhaul 2.0 1.0
Holding company 0.2 1.0
11.0 9.0
Depreciation
Composites 1.8 1.6
Supply Chain 1.1 1.1
Repair & Overhaul 0.4 0.3
Holding company 0.2 0.1
3.5 3.1
Amortisation of intangible assets & goodwill impairment
Composites – –
Supply Chain 1.8 0.6
Repair & Overhaul 1.4 0.2
3.2 0.8
The value shown for Supply Chain includes £0.8 million (2006: £nil) in respect of goodwill impairment.
In the year to 31 March 2007, £0.2 million of negative goodwill, representing the excess of fair value of assets acquired above the
consideration paid on an acquisition, was credited to the income statement in respect of the acquisition of Aerodyne (2006: £nil).
annual report 2007 37
71197 ACCOUNTS part 1  16/6/07  09:29  Page 37 1 Segmental reporting (continued)
Geographic segments
2007 2006
Revenue by origin £m £m
UK 215.8 200.2
Rest of Europe 50.9 29.5
North America 65.2 63.5
Rest of world 2.0 –
333.9 293.2
2007 2006
Segment assets by origin £m £m
UK 183.7 165.4
Rest of Europe 45.1 33.6
North America 84.2 80.8
Rest of world 2.4 –
315.4 279.8
2007 2006
Capital expenditure by origin £m £m
UK 9.3 7.9
Rest of Europe 0.2 0.2
North America 1.5 0.9
11.0 9.0
2007 2006
Revenue by destination £m £m
UK 168.7 152.1
Rest of Europe 86.6 65.0
North America 57.8 58.1
Rest of world 20.8 18.0
333.9 293.2
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
38 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 38 2 Staff numbers and costs
2007 2006
Average numbers employed, including Directors Number Number
Composites 780 673
Supply Chain 585 532
Repair & Overhaul 269 204
Holding company 12 12
1,646 1,421
2007 2006
Aggregate payroll costs £m £m
Wages and salaries 43.1 36.9
Social security costs 4.8 3.8
Other pension costs 2.1 2.1
Equity settled transactions 0.2 0.3
50.2 43.1
Details of Directors’ remuneration and share options are set out in the Remuneration Report.
3 Operating profit
2007 2006
Operating profit is stated after charging/(crediting) £m £m
Depreciation charge on property, plant & equipment
– assets owned 3.0 2.6
– assets held under lease finance agreements 0.5 0.5
Amortisation of intangible assets 2.4 0.8
Negative goodwill – excess of fair value of assets acquired above the consideration paid on an acquisition (0.2) –
Impairment of goodwill 0.8 –
Auditors’ remuneration
– fees payable to the Company’s auditor for the audit of the annual accounts 0.1 0.1
– fees payable to the Company’s auditor and its associates for other services:
– audit of the Company’s subsidiaries pursuant to legislation 0.3 0.3
– taxation services 0.1 0.1
– services relating to corporate finance – 0.3
Operating lease charges
– plant, machinery & vehicles 0.6 0.6
– land & buildings 2.2 1.9
Gain on foreign exchange translation (0.2) (0.1)
Significant items 0.7 1.5
Fees payable to KPMG Audit Plc for non-audit services are not disclosed in the accounts of the Company because such fees are disclosed
above on a consolidated basis for the Group.
Significant items in the year to 31 March 2007 comprised re-organisation costs of £0.7 million, principally in relation to the closure 
of Umeco Supply Chain’s electronic component distribution activity and the goodwill impairment charge also relates to this closure.
Significant items in the year to 31 March 2006 comprised re-organisation costs of £0.6 million and a loss on disposal of the industrial
element of the Compstock business of £0.9 million.
annual report 2007 39
71197 ACCOUNTS part 1  16/6/07  09:29  Page 39 4 Financial income and expense
2007 2006
Financial income £m £m
Revaluation of financial instruments 0.3 0.3
Interest income 0.3 0.1
Expected return on pension scheme assets 0.9 0.6
1.5 1.0
Financial expense £m £m
Interest on bank loans and overdrafts 3.5 3.3
Interest payable in respect of lease finance 0.1 0.1
Interest cost on pension scheme liabilities 0.8 0.7
4.4 4.1
5 Income tax expense
2007 2006
Recognised in the income statement £m £m
Current tax expense
UK tax – current year 4.1 3.6
– prior years 0.1 –
Overseas tax 2.1 1.7
Current tax expense 6.3 5.3
Deferred tax expense/(credit)
Origination and reversal of temporary differences – UK 0.2 (0.1)
Origination and reversal of temporary differences – overseas (0.3) 0.2
Deferred tax (credit)/expense (0.1) 0.1
Income tax expense in the income statement 6.2 5.4
In the prior year, certain tax effects of equity settled transactions were recognised directly in equity. These effects comprised a current tax
credit of £0.2 million and a deferred tax credit of £0.3 million. There were no eqivalent effects in the year to 31 March 2007.
2007 2006
Reconciliation of effective tax rate £m £m
Profit before tax 19.1 16.1
Tax at standard rate of UK corporation tax of 30 per cent (2006: 30 per cent) 5.7 4.8
Effects of:
Expenses not deductible for tax purposes 0.1 0.2
Higher rate taxes on overseas earnings 0.3 0.4
Adjustments in respect of prior years 0.1 –
Income tax expense in the income statement 6.2 5.4
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
40 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 40 6 Dividends
The following dividends were paid by the Company during the year:
2007 2006
Pence Pence
per share £m per share £m
Previous year final 9.50 4.5 8.75 2.9
Current year interim 5.50 2.6 5.00 1.6
15.00 7.1 13.75 4.5
The following dividends were declared by the Company in respect of each year:
2007 2006
Pence Pence
per share £m per share £m
Interim 5.50 2.6 5.00 1.6
Final 10.00 4.7 9.50 4.5
15.50 7.3 14.50 6.1
The final dividend for 2007 of 10.0 pence per share was proposed by the Board on 5 June 2007 and has not been included as a liability 
as at 31 March 2007 as it is subject to approval by shareholders. The amount expected to be paid in respect of this dividend is £4.7 million.
The dividend is payable on 3 August 2007 to shareholders registered on 6 July 2007.
The terms of the Umeco Bonus Plan, details of which are set out in the Remuneration Report, require that dividends are waived by
participants in respect of deferred shares. Consequently, the final dividend declared in respect of the year to 31 March 2006 and the
interim dividend declared in respect of the year to 31 March 2007 were waived in relation to 203,749 shares.
7 Earnings per share
Earnings per share is calculated on profit attributable to equity holders of the parent of £12.8 million (2006: £10.7 million). Adjusted 
profit attributable to equity holders of the parent, which provides a consistent measure of operating performance, was £15.2 million 
(2006: £12.2 million). The weighted average number of ordinary shares in issue was 47.5 million (2006: 39.2 million). The weighted
average number of shares on a fully diluted basis was 47.8 million (2006: 39.6 million), after an adjustment for dilutive share options 
of 0.3 million (2006: 0.4 million).
In the comparative period, the weighted average number of shares in issue was adjusted to reflect the bonus element of the rights issue
that took place in December 2005. This resulted in the weighted average number of shares in issue for periods prior to the rights issue
being increased by 10.4 per cent. A similar increase was made to the adjustment for dilutive share options.
annual report 2007 41
71197 ACCOUNTS part 1  16/6/07  09:29  Page 41 8 Reconciliation of adjusted profit measures
Umeco uses adjusted figures as key performance indicators, as these are considered to provide a more consistent measure of operating
performance. Adjusted figures are stated before amortisation and impairment charges relating to intangible assets, significant items, the
revaluation of financial instruments based on their market values, associated tax effects and the tax effects of goodwill amortisation in
overseas jurisdictions. The differences between the total and adjusted profit measures are as follows:
2007 2006
£m £m
Operating profit
Total operating profit 22.0 19.2
Exclude:
– significant items 0.7 1.5
– impairment of goodwill 0.8 –
– negative goodwill – excess of fair value of assets acquired above the consideration paid on an acquisition (0.2) –
– amortisation of intangible assets 2.4 0.8
Adjusted operating profit 25.7 21.5
Profit before tax
Total profit before tax 19.1 16.1
Exclude:
– significant items 0.7 1.5
– impairment of goodwill 0.8 –
– negative goodwill – excess of fair value of assets acquired above the consideration paid on an acquisition (0.2) –
– amortisation of intangible assets 2.4 0.8
– revaluation of financial instruments (0.3) (0.3)
Adjusted profit before tax 22.5 18.1
Profit attributable to equity holders of the parent
Total profit attributable to equity holders of the parent 12.8 10.7
Exclude:
– significant items 0.7 1.5
– impairment of goodwill 0.8 –
– negative goodwill – excess of fair value of assets acquired above the consideration paid on an acquisition (0.2) –
– amortisation of intangible assets 2.4 0.8
– revaluation of financial instruments (0.3) (0.3)
– associated tax effects (1.0) (0.5)
Adjusted profit attributable to equity holders of the parent 15.2 12.2
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
42 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 42 9 Property, plant & equipment
Land & buildings Plant
Leasehold property machinery
Freehold improvements fixtures & IT Motor
property long short equipment vehicles Total
£m £m £m £m £m £m
Cost
At 1 April 2006 15.0 0.7 1.0 21.2 2.7 40.6 
Acquisitions – – – 0.9 – 0.9 
Additions 5.2 – – 4.9 0.9 11.0 
Disposals – – – (0.9) (0.9) (1.8) 
Foreign exchange translation (0.3) – – (0.7) – (1.0)
At 31 March 2007 19.9 0.7 1.0 25.4 2.7 49.7
Depreciation
At 1 April 2006 1.3 0.1 0.6 11.9 1.6 15.5 
Charge for the year 0.4 0.1 – 2.3 0.7 3.5
Disposals – – – (0.8) (0.8) (1.6)
Foreign exchange translation – – – (0.2) – (0.2)
At 31 March 2007 1.7 0.2 0.6 13.2 1.5 17.2
Net book value
At 31 March 2007 18.2 0.5 0.4 12.2 1.2 32.5 
At 1 April 2006 13.7 0.6 0.4 9.3 1.1 25.1 
Net book value of tangible fixed assets at 31 March 2007 included £1.3 million (2006: £1.3 million) in respect of assets acquired under
lease finance arrangements. The leased assets secure lease finance obligations as disclosed in note 16. The net book value of freehold
land and buildings included £3.9 million (2006: £1.4 million) in respect of assets not depreciated, principally land.
Land & buildings Plant
Leasehold property machinery
Freehold improvements fixtures & IT Motor
property long short equipment vehicles Total
£m £m £m £m £m £m
Cost
At 1 April 2005 10.3 0.7 1.0 17.8 2.4 32.2
Acquisitions 0.1 – – 0.2 – 0.3
Additions 4.3 – – 3.9 0.8 9.0
Disposals – – – (1.0) (0.5) (1.5)
Foreign exchange translation 0.3 – – 0.3 – 0.6
At 31 March 2006 15.0 0.7 1.0 21.2 2.7 40.6
Depreciation
At 1 April 2005 1.0 0.1 0.5 10.5 1.3 13.4
Charge for the year 0.3 – 0.1 2.0 0.7 3.1
Disposals – – – (1.0) (0.4) (1.4)
Foreign exchange translation – – – 0.4 – 0.4
At 31 March 2006 1.3 0.1 0.6 11.9 1.6 15.5
Net book value
At 31 March 2006 13.7 0.6 0.4 9.3 1.1 25.1
At 1 April 2005 9.3 0.6 0.5 7.3 1.1 18.8
annual report 2007 43
71197 ACCOUNTS part 1  16/6/07  09:29  Page 43 10 Intangible assets
Customer
relationships,
contracts
Goodwill & orders Total
£m £m £m
Cost
At 1 April 2006 94.9 2.6 97.5
Acquisitions 5.3 3.9 9.2
Foreign exchange translation (2.4) – (2.4)
At 31 March 2007 97.8 6.5 104.3
Amortisation & impairment
At 1 April 2006 – 1.1 1.1
Charge for the year – 2.4 2.4
Impairment loss 0.8 – 0.8
At 31 March 2007 0.8 3.5 4.3
Net book value
At 31 March 2007 97.0 3.0 100.0
At 1 April 2006 94.9 1.5 96.4
Customer
relationships,
contracts
Goodwill & orders Total
£m £m £m
Cost
At 1 April 2005 77.8 0.3 78.1
Acquisitions 15.1 2.3 17.4
Adjustment to AMS deferred consideration (0.3) – (0.3)
Foreign exchange translation 2.3 – 2.3
At 31 March 2006 94.9 2.6 97.5
Amortisation & impairment losses
At 1 April 2005 – 0.3 0.3
Charge for the year – 0.8 0.8
At 31 March 2006 – 1.1 1.1
Net book value
At 31 March 2006 94.9 1.5 96.4
At 1 April 2005 77.8 – 77.8
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
44 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 44 10 Intangible assets (continued)
Goodwill and intangible assets associated with customer relationships, contracts & orders on hand arose on the following acquisitions:
Customer
relationships,
contracts
Goodwill & orders Total
£m £m £m
Antavia 5.0 3.9 8.9
US Airmotive 0.3 – 0.3
5.3 3.9 9.2
Goodwill of £5.3 million arose on the acquisitions made in the year to 31 March 2007 because a large number of customer contracts and
relationships do not meet the criteria for separate recognition or could not be reliably measured.
In the year to 31 March 2006, goodwill and intangible assets associated with customer contracts and orders on hand arose on the
following acquisitions:
Customer
contracts
Goodwill & orders Total
£m £m £m
Provest S.r.l. 8.9 1.7 10.6
Aeromedic Innovations Limited 2.2 0.6 2.8
Aviation Windings Limited 3.7 – 3.7
GRPMS Scandinavia 0.1 – 0.1
Purchase of remaining 8 per cent minority interest in Aerovac Systemes France Sarl 0.2 – 0.2
15.1 2.3 17.4
Goodwill of £15.1 million arose on the acquisitions made in the year to 31 March 2006 because a large number of customer relationships
and contracts did not meet the criteria for separate recognition or could not be reliably measured.
Impairment tests for cash generating units containing goodwill 2007 2006
£m £m
Composites 61.8 63.2
Supply Chain 19.6 20.9
Repair & Overhaul 15.7 10.8
97.1 94.9
Within the carrying value of goodwill, the most significant amounts are relating to ACG of £38.3 million (2006: £38.3 million). The
recoverable amount of the goodwill attaching to all cash generating units are based on value in use calculations. Those calculations use
cash flow projections discounted at a pre-tax discount rate of 5.3 per cent, and are based on forecasts prepared by management based 
on their views of the future and past experience. Following the closure of the electronics distribution activity within Pattonair UK, an
impairment loss of £0.8 million was recognised to eliminate the carrying value of goodwill associated with that activity. Other than this
impairment loss, the value in use calculations indicate that no impairment write downs are required.
annual report 2007 45
71197 ACCOUNTS part 1  16/6/07  09:29  Page 45 11 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to temporary differences relating to the following:
Assets Liabilities Net
2007 2006 2007 2006 2007 2006
£m £m £m £m £m £m
Intangible assets & goodwill – – (2.5) (1.9) (2.5) (1.9)
Property, plant & equipment 0.2 0.4 (1.9) (1.5) (1.7) (1.1)
Employee benefits 1.1 1.5 – – 1.1 1.5
Working capital 2.0 2.1 – (0.1) 2.0 2.0
Deferred tax assets/(liabilities) 3.3 4.0 (4.4) (3.5) (1.1) 0.5
Set off of deferred tax (0.5) (0.6) 0.5 0.6 – –
Net deferred tax assets/(liabilities) 2.8 3.4 (3.9) (2.9) (1.1) 0.5
Foreign Recognised At 31
At 1 April exchange in income Recognised March
2006 translation Acquisitions statement in equity 2007
£m £m £m £m £m £m
Intangible assets & goodwill (1.9) 0.1 (1.3) 0.6 – (2.5) 
Property, plant & equipment (1.1) (0.2) – (0.4) – (1.7)
Employee benefits 1.5 (0.1) – (0.2) (0.1) 1.1 
Working capital 2.0 (0.1) – 0.1 – 2.0 
0.5 (0.3) (1.3) 0.1 (0.1) (1.1)
Foreign Recognised At 31
At 1 April exchange in income Recognised March
2005 translation Acquisitions statement in equity 2006
£m £m £m £m £m £m
Intangible assets & goodwill (0.9) (0.3) (0.8) 0.1 – (1.9)
Property, plant & equipment (1.3) – – 0.2 – (1.1)
Employee benefits 1.5 – – (0.3) 0.3 1.5 
Working capital 1.8 0.3 – (0.1) – 2.0 
1.1 – (0.8) (0.1) 0.3 0.5
Unrecognised deferred tax assets
Deferred tax assets have not been recognised on tax losses of £0.2 million (2006: £0.2 million) due to the lack of certainty concerning the
quantum and timing of future years taxable profits of the companies concerned.
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
46 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 46 12 Inventories
2007 2006
£m £m
Raw materials 7.9 6.4
Work in progress 1.5 1.2
Finished goods 79.4 65.4
88.8 73.0
The cost of sales charge in the income statement includes £220.8 million (2006: £195.5 million) in respect of inventory costs. Inventory
provisions of £1.8 million were made during the year (2006: £1.5 million).
13 Trade & other receivables
2007 2006
£m £m
Amounts falling due within one year
Trade receivables 76.2 67.4
Other receivables 2.5 1.3
Prepayments and accrued income 2.9 2.1
81.6 70.8
Amounts falling due after more than one year
Other receivables 0.1 0.2
81.7 71.0
Provisions against trade receivables of £0.3 million were made during the year (2006: £0.2 million).
14 Cash
2007 2006
£m £m
Bank balances and cash in hand 7.9 9.5
Bank overdrafts (0.5) –
Cash disclosed in the statement of cash flows 7.4 9.5
15 Trade & other payables
2007 2006
£m £m
Trade payables 75.0 65.0
Other tax and social security 3.4 2.9
Other payables 4.2 7.4
Accruals and deferred income 12.1 10.5
94.7 85.8
annual report 2007 47
71197 ACCOUNTS part 1  16/6/07  09:29  Page 47 16 Loans & borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For more information
about the Group’s exposure to interest rate and foreign currency risk, see note 25.
2007 2006
£m £m
Current liabilities
Bank overdrafts 0.5 –
Lease finance obligations 0.5 0.3
1.0 0.3
Non-current liabilities
Bank loans 58.0 35.0
Lease finance obligations 0.7 0.9
58.7 35.9
Total borrowings 59.7 36.2
All bank loans and overdrafts are unsecured and bear interest at floating rates based on LIBOR. Following a review of the terms of the
Group's revolving credit facility, borrowings made under that facility are now treated as being repayable on the facility expiry date. Values
reported as at 31 March 2006 have been re-presented to reflect this change. Lease finance obligations are secured on the assets to which
they relate. Lease finance obligations are payable as follows:
Minimum Minimum
lease lease
payments Interest Principal payments Interest Principal
2007 2007 2007 2006 2006 2006
£m £m £m £m £m £m
Less than one year 0.5 – 0.5 0.3 – 0.3
Between one and two years 0.5 (0.1) 0.4 0.7 (0.1) 0.6
Between two and five years 0.3 – 0.3 0.3 – 0.3
1.3 (0.1) 1.2 1.3 (0.1) 1.2
Under the terms of the lease agreements, no contingent rentals are payable.
17 Share capital
2007 2006
Ordinary shares of 25 pence Number £m Number £m
Authorised 80,000,000 20.0 80,000,000 20.0
Allotted, called up and fully paid
At start of year 47,368,713 11.8 32,537,723 8.1
Rights issue –– 14,462,373 3.6
Issued pursuant to – Umeco 2001 Share Option Plan 169,748 0.1 – – 
– SAYE Share Option Scheme 24,155 – 368,617 0.1
At end of year 47,562,616 11.9 47,368,713 11.8
Details of the share option schemes are set out in note 24 and in the Remuneration Report, which also includes full details of Directors’
share options. Between 31 March 2007 and the date of these financial statements, no options have been exercised.
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
48 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 48 18 Reserves
Share Translation Retained
premium reserve earnings Total
£m £m £m £m
At 1 April 2006 113.6 0.5 16.0 130.1
Total recognised income and expense – (1.5) 13.2 11.7
Share capital issued 0.3 – – 0.3
Cost of share based payments – – 0.2 0.2
Shares awarded under share schemes – – (0.2) (0.2)
Dividends paid – – (7.1) (7.1)
At 31 March 2007 113.9 (1.0) 22.1 135.0
At 1 April 2005 68.3 0.2 9.0 77.5
Total recognised income and expense – 0.3 11.0 11.3
Share capital issued – rights issue 44.8 – – 44.8
Share capital issued – SAYE share option scheme 0.5 – – 0.5
Cost of share based payments – – 0.3 0.3
Shares awarded under share schemes – – (0.3) (0.3)
Tax effects of share based payments – – 0.5 0.5
Dividends paid – – (4.5) (4.5)
At 31 March 2006 113.6 0.5 16.0 130.1
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign
operations. Retained earnings include the cost of the Company’s shares which have been acquired under the terms of deferred share
awards made under the Umeco Bonus Plan, and which are registered in the names of the award holders. At 31 March 2007, the reserve 
for own shares within retained earnings was £0.5 million (2006: £0.3 million) as a result of the deferred share awards made in June 2005
and June 2006.
19 Commitments
2007 2006
Capital commitments £m £m
Contracted 4.1 2.8
No provision has been made in the financial statements for these commitments.
Total liabilities under non-cancellable operating leases are payable as follows:
2007 2006
Land & Other Land & Other
buildings assets buildings assets
£m £m £m £m
– Within one year 0.1 0.1 0.2 0.5
– Between two and five years 2.8 0.7 1.3 0.8
– After more than five years 11.5 – 11.3 –
14.4 0.8 12.8 1.3
annual report 2007 49
71197 ACCOUNTS part 1  16/6/07  09:29  Page 49 20 Acquisitions and disposal
In October 2006, the Group acquired the entire issued share capital of Antavia, a Toulouse-based provider  of repair & overhaul services
to the aerospace industry, for a cash consideration of €12.3 million. In the period from acquisition to 31 March 2007, Antavia contributed
£0.6 million to the Group’s adjusted profit before tax. After a charge for amortisation of intangible assets of £1.2 million, Antavia’s
contribution to total profit before tax was a loss of £0.6 million. Had the acquisition completed on 1 April 2006, it is estimated that
Antavia would have made a further equal contribution to adjusted profit before tax and total profit before tax.
In June 2006, the Group acquired the entire issued share capital of Aerodyne for £0.1 million in cash. Aerodyne is based in Cape Town,
South Africa, and manufactures advanced composites component parts for the upper end automotive market.
In November 2006, the Group acquired the entire issued share capital of US Airmotive for £0.5 million. This business distributes a wide
range of aerospace chemicals.
The table below sets out the fair values of assets acquired as a result of these acquisitions. The only adjustments made to book values in
order to arrive at the fair value recognised in the Group’s financial statements relate to the recognition of intangible assets. An asset of
£3.9 million has been recognised in relation to Antavia’s customer relationships and orders.
Details of the significant acquisitions made in the year to 31 March 2007, including the fair values of assets acquired, were as follows:
Antavia Aerodyne Airmotive Total
Fair value of net assets acquired £m £m £m £m
Intangible assets 3.9 – – 3.9
Property, plant & equipment 0.2 0.7 – 0.9
Inventories 0.8 0.3 – 1.1
Debtors 1.9 0.2 0.3 2.4
Bank loans (0.1) – – (0.1)
Creditors due within one year (1.8) (0.9) – (2.7)
Deferred tax liabilities (1.3) – – (1.3)
3.6 0.3 0.3 4.2
Goodwill 5.0 (0.2) 0.3 5.1
Cost of assets acquired 8.6 0.1 0.6 9.3
Satisfied by:
Cash consideration paid 8.3 0.1 0.5 8.9
Expenses paid 0.3 – 0.1 0.4
8.6 0.1 0.6 9.3
In addition, £2.4 million of deferred consideration was paid in respect of acquisitions made in prior years.
Negative goodwill, representing the excess of fair value of assets acquired above the consideration paid, of £0.2 million arising on the
acquisition of Aerodyne has been credited directly to the income statement.
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
50 annual report 2007
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On 31 October 2005, the Group acquired the entire issued share capital of Provest S.r.l. (‘Provest’), a Milan-based distributor of
aerospace fasteners and related products, for a maximum cash consideration of €20.0 million. This included an initial consideration of
€13.5 million (£9.6 million including expenses), with additional consideration of €6.5 million (£4.5 million) payable if certain profit
targets are met. Full provision for the additional consideration was made in the Group’s balance sheet at 31 March 2006. In the period
from acquisition to 31 March 2006, Provest contributed profit before tax of £0.6 million to the Group’s result before a charge for
amortisation of intangible assets of £0.6 million. Due to adjustments made by Provest to inventory valuations in 2004, it has not been
possible to accurately quantify the Group’s profit before tax had the acquisition completed on 1 April 2005.
On 4 July 2005, the Group acquired property and other assets related to the Scandinavian distribution activities of Ashland Composite
Polymers for €0.6 million (£0.4 million).
On 25 August 2005, the Group acquired the entire issued share capital of Aviation Windings Limited (‘ Aviation Windings’) for 
£1.6 million in cash and also assumed its indebtedness of £2.0 million. Aviation Windings specialises in the manufacture and 
repair of wound components. Additional consideration of up to £0.5 million was payable based on the performance of Aviation 
Windings in the 12 months following completion.
On 11 November 2005, the Group acquired the entire issued share capital of Aeromedic Innovations Limited (‘ Aeromedic Innovations’) 
for £2.1 million in cash, subject to adjustment for working capital balances at completion, with additional consideration of up to 
£0.7 million payable based on performance in the year to 31 March 2006. Aeromedic Innovations supplies, maintains and overhauls 
on-board medical kits and therapeutic oxygen equipment.
The table on page 52 sets out the fair values of assets acquired as a result of these acquisitions. With the exception of Provest and
Aeromedic Innovations, no adjustments were made to book values in order to arrive at the fair value recognised in the Group’s financial
statements.
An additional inventory reserve of €3.2 million (£2.2 million) was made in respect of Provest, in order to bring the inventory valuation
policies of Provest into line with those of the Group. Intangible assets of £2.3 million have been recognised in relation to customer
contracts and orders, comprising £1.7 million in respect of Provest and £0.6 million in respect of Aeromedic Innovations.
annual report 2007 51
71197 ACCOUNTS part 1  16/6/07  09:29  Page 51 20 Acquisitions and disposal (continued)
Details of the significant acquisitions made in the year to 31 March 2006, including the fair values of assets acquired, were as follows:
Aeromedic Aviation GRP
Provest Innovations Windings Scandinavia Total
Fair value of net assets acquired £m £m £m £m £m
Intangible assets 1.7 0.6 – – 2.3
Property, plant & equipment 0.2 0.1 – 0.1 0.4
Inventories 2.5 0.1 0.1 0.3 3.0
Debtors 4.6 0.4 0.4 – 5.4
Cash – 0.5 – – 0.5
Creditors due within one year (3.1) (0.4) (2.1) – (5.6)
Creditors due after more than one year (0.1) – – – (0.1)
Deferred tax liabilities (0.6) (0.2) – – (0.8)
5.2 1.1 (1.6) 0.4 5.1
Goodwill 8.9 2.2 3.7 0.1 14.9
Cost of assets acquired 14.1 3.3 2.1 0.5 20.0
Satisfied by:
Cash consideration paid 9.3 2.5 1.6 0.4 13.8
Expenses paid 0.3 0.1 – 0.1 0.5
Consideration accrued at end of year 4.5 0.7 0.5 – 5.7
14.1 3.3 2.1 0.5 20.0
Consideration accrued is disclosed on the balance sheet within other payables. During the year to 31 March 2006, the Group also
acquired the remaining 8 per cent minority interest in Aerovac Systemes France Sarl for £0.2 million. The consideration paid was
represented entirely by goodwill.
On 6 January 2006, the Group disposed of the industrial products business unit of Compstock. This business unit was sold to
management, and the resulting loss on disposal of £0.9 million is reported on the income statement within administrative expense.
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
52 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 52 21 Analysis of changes in net debt
Net debt comprises cash balances, bank loans and lease finance obligations.
Foreign
exchange Other Cash
2006 translation changes flows 2007
£m £m £m £m £m
Cash 9.5 0.2 – (1.8) 7.9
Bank overdrafts – – – (0.5) (0.5)
9.5 0.2 – (2.3) 7.4
Bank loans due after one year (35.0) 3.5 (0.1) (26.4) (58.0)
Lease finance obligations (1.2) – (0.5) 0.5 (1.2)
(26.7) 3.7 (0.6) (28.2) (51.8)
Foreign
exchange Other Cash
2005 translation changes flows 2006
£m £m £m £m £m
Cash 6.9 1.4 – 1.2 9.5
Bank loans due within one year (0.1) – – 0.1 –
Bank loans due after one year (56.9) (4.8) – 26.7 (35.0)
Lease finance obligations (1.2) – (0.5) 0.5 (1.2)
(51.3) (3.4) (0.5) 28.5 (26.7)
Other changes represent the draw down of lease finance arrangements entered into during the year and bank loans held on acquisitions.
The maturity analysis of bank loans has been re-presented as a result of the review referred to in note 16.
22 Retirement benefit obligation
As explained in the accounting policies set out on page 33, the Group operates several pension schemes as disclosed below:
The Umeco Pension and Life Assurance Plan (‘the Umeco Scheme’) has two sections. The defined benefit section of the Umeco Scheme,
which was closed to new entrants in 2000, provides benefits based on final pensionable pay with contributions being charged to the
income statement so as to spread the cost of pensions over employees’ working lives with the Group. The contributions are determined
by a qualified independent actuary on the basis of valuations, conducted at least every three years, using the projected unit method. 
The most recent valuation was at 1 April 2005. The assumptions which have the most significant effects on the results of the valuation
are those relating to the rate of return on investments before retirement (7.0 per cent per annum), the rate of return on investment after
retirement (4.5 per cent per annum) and the rates of increase in salaries (4.0 per cent per annum) and the rate of pensions increases 
(0-3.0 per cent per annum). The valuation adopted the ‘PA92’ tables as the basis for determining members’ mortality assumptions. The
valuation showed that the actuarial value of the defined benefit section’s assets was £8.3 million which represented 68 per cent of the
actuarial value of benefits that had accrued to members after allowing for expected future increases in earnings. The contributions of
the Group and employees during the year were 17.7 per cent and 4.5 per cent to 6.5 per cent of earnings respectively. Contributions
amounting to £1.3 million (2006: £0.9 million) were payable to the defined benefit section of the Umeco Scheme in the year, of which
£4,000 (2006: £15,000) was outstanding at the year end.
The Umeco Scheme also has a defined contribution section. Members of this section contribute between 2.0 per cent and 6.0 per cent
of pensionable earnings with the Group making contributions of between 4.0 per cent and 10.0 per cent. Contributions amounting to 
£0.7 million (2006: £0.6 million) were payable to this section of the Umeco Scheme in the year, of which £33,000 (2006: £46,000) was
outstanding at the year end.
annual report 2007 53
71197 ACCOUNTS part 1  16/6/07  09:29  Page 53 22 Retirement benefit obligation (continued)
The trustees of the Umeco Scheme are chaired by John Harper, formerly one of the Company’s non-executive Directors, and an
independent expert in pension matters attends meetings of the trustees. Responsibility for investment of the Umeco Scheme’s funds
has been delegated by the trustees to professional investment managers.
The Advanced Composites Group of companies participate in the Advanced Composites Group Pension Scheme (‘the ACG Scheme’),
which provides benefits on a defined benefit basis. The ACG Scheme was closed to new entrants in 2001. The assets of the ACG Scheme
are held separately from those of the Group and responsibility for investment of the ACG Scheme’s funds has been delegated by the
trustees to professional investment managers. The trustees of the ACG Scheme are chaired by Jon Mabbitt, Group Managing Director of
Advanced Composites Group.
Contributions to the ACG Scheme are determined by a qualified independent actuary on the basis of valuations, conducted at least every 
three years, using the projected unit method. The most recent valuation was at 1 June 2005. The valuation assumed a rate of return 
on investments before retirement of 7.0 per cent per annum and a rate of return after retirement of 4.5 per cent, a rate of increase in
salaries of 4.0 per cent per annum and increase in pensions of 2.5 per cent per annum. The valuation adopted the ‘PA92’ tables as the
basis for determining members’ mortality assumptions. The valuation showed that the actuarial value of the defined benefit scheme’s
assets was £3.4 million which represented 67.8 per cent of the actuarial value of benefits that had accrued to members after allowing
for expected future increases in earnings. The contributions of the Group and employees are 13.15 per cent and 8.65 per cent of earnings
respectively. Contributions amounting to £0.6 million (2006: £0.5 million) were payable to the ACG Scheme, of which £12,000
(2006: £21,000) was outstanding at the year end.
Certain of the Group’s UK businesses operate separate defined contribution arrangements for qualifying employees. Employer
contributions are a maximum of 10.0 per cent and employees are encouraged to contribute at similar rates. Total contributions 
of £0.2 million (2006: £0.3 million) were payable in respect of the year.
The Group participates in defined contribution arrangements in respect of certain of its businesses outside the UK. Contributions to
these schemes during the year totalled £0.5 million (2006: £0.4 million).
As described in the Remuneration Report, the Company operates defined contribution schemes in respect of Clive Snowdon. Total
contributions of £117,000 (2006: £101,000) were payable to these schemes for the year of which none were outstanding at the year end 
(2006: £65,000).
IAS19
The information required for accounting in accordance with the requirements of IAS19 has been obtained by updating the actuarial
valuations referred to above, which were carried out by independent qualified actuaries. Combined values are shown for the Umeco
Scheme and the ACG Scheme.
The assumptions used to calculate scheme liabilities are as follows:
2007 2006
per cent per cent
Rate of increase in pensionable salaries:
– executive members 4.1 4.8
– staff members 4.1 3.9
Rate of increase of pensions in payment 2.9 2.8
Discount rate 5.3 5.0
Inflation 3.1 3.0
The mortality basis used for these disclosures is in line with the basis used by the respective trustees at the most recent valuations.
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
54 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 54 22 Retirement benefit obligation (continued)
The market values of the schemes’ assets, which are not intended to be realised in the short term, may be subject to significant change
before they are realised. The present values of the schemes’ liabilities are calculated by reference to the investment return on corporate
bonds. The assumptions used do not necessarily represent the investment return that may be achieved.
The IAS19 valuations of the schemes and expected rates of return on the schemes’ assets are as follows:
2007 2006
per cent £m per cent £m
Equities 7.4 12.4 8.0 8.9
Bonds 4.5 1.7 4.5 1.2
Cash 5.3 0.3 4.3 1.6
Weighted average return and market value of scheme assets 7.0 14.4 7.1 11.7
Present value of scheme liabilities (16.4) (15.5)
Deficit in the scheme (2.0) (3.8)
Deferred tax 0.6 1.1
Net pension liability (1.4) (2.7)
Expense recognised in administrative expenses within the income statement
2007 2006
£m £m
Charge to operating profit
Current service cost 0.7 0.6
Past service cost – –
Total operating charge 0.7 0.6
2007 2006
£m £m
(Credit)/charge to financial income and expense
Expected return on pension scheme assets (0.9) (0.6)
Interest cost on retirement benefit obligation 0.8 0.7
Net financial (income)/expense (0.1) 0.1
2007 2006
£m £m
Total actuarial gains and losses recognised in the
statement of recognised income and expense
Actual return less expected return on pension scheme assets (0.1) 1.7
Experience gains and losses arising on scheme liabilities (0.3) (0.2)
Changes in assumptions underlying the present value of scheme liabilities 0.9 (1.2)
Actuarial gains 0.5 0.3
The cumulative actuarial gain recognised in the statement of recognised income and expense from 1 April 2004 is £0.4 million
(2006: £0.1 million cumulative loss).
annual report 2007 55
71197 ACCOUNTS part 1  16/6/07  09:29  Page 55 56 annual report 2007
22 Retirement benefit obligation (continued)
Analysis of movement in retirement benefit obligation
2007 2006
£m £m
Retirement benefit obligation at start of year (15.5) (12.9)
Current service cost (0.7) (0.6)
Interest cost on retirement benefit obligation (0.8) (0.7)
Contributions from scheme members (0.4) (0.4)
Benefits paid 0.4 0.5
Actuarial gains/(losses) 0.6 (1.4)
Retirement benefit obligation at end of year (16.4) (15.5)
Change in the fair value of scheme assets during the year
2007 2006
£m £m
Fair value at start of year 11.7 8.1
Expected return on scheme assets 0.9 0.6
Contribution from employer 1.9 1.4
Contribution from scheme members 0.4 0.4
Benefits paid (0.4) (0.5)
Actuarial (losses)/gains (0.1) 1.7
Fair value at end of year 14.4 11.7
The amount included in the balance sheet in respect of defined benefit schemes is as follows:
2007 2006 2005
£m £m £m
Present value of defined benefit obligation (16.4) (15.5) (12.9)
Fair value of scheme assets 14.4 11.7 8.1
Net deficit (reported within non-current liabilities) (2.0) (3.8) (4.8)
History of experience gains and losses
2007 2006 2005
£m £m £m
Experience gains and losses on scheme liabilities (0.3) (0.2) (0.6)
Percentage of retirement benefit obligation (2.1) per cent (1.3) per cent (4.6) per cent
Difference between expected and actual return on scheme assets (0.1) 1.7 0.4
Percentage of scheme assets (0.3) per cent 14.5 per cent 4.9 per cent
The Group expects to contribute approximately £1.9 million to its defined benefit schemes in the year to 31 March 2008.
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 56 annual report 2007 57
23 Contingent liabilities
The contingent liability of the Group for bank guarantees and liabilities for bills of exchange discounted in the normal course of business
at 31 March 2007 amounted to £0.4 million (2006: £0.4 million).
24 Share based payments
Umeco 2001 Share Option Plan
The Group has established the Umeco 2001 Share Option Plan, which entitles certain key management and senior employees to purchase 
shares in the Company.  Details of the Plan are set out in the Remuneration Report. The number of options outstanding under the 
Plan was as follows:
2007 2006
Weighted Weighted
average average
exercise exercise
Options price Options price
Number Pence Number Pence
At start of year 518,148 254.1 701,354 274.5
Granted during the year –– ––
Rights issue effect –– 48,930 254.1
Exercised during the year (169,748) 207.2 ––
Lapsed during the year (131,391) 207.2 (232,136) 262.3
At end of year 217,009 319.1 518,148 254.1
Exercisable at end of year –– ––
The executive share options outstanding at 31 March 2007 had an exercise price of 319.1 pence and had a weighted average remaining
contractual life of 7.2 years. The weighted average price of the Company’s shares on the date that options were exercised under the
Umeco 2001 Share Option Plan was 472.5 pence.
The average market price of the Company’s shares during the year was 463.5 pence (2006: 467.2 pence).
SAYE share option scheme
The Group has established the SAYE share option scheme, details of which are set out in the Remuneration Report. Options have been
granted to employees of the Group as follows:
2007 2006
Weighted Weighted
average average
exercise exercise
Options price Options price
Number Pence Number Pence
At start of year 651,605 305.8 709,969 237.4
Granted during the year –– 288,645 370.4
Rights issue effect –– 69,608 214.4
Exercised during the year (24,155) 183.2 (368,617) 172.9
Lapsed during the year (71,110) 299.5 (48,000) 262.4
At end of year 556,340 311.9 651,605 305.8
Exercisable at end of year –– 30,069 172.7
71197 ACCOUNTS part 1  16/6/07  09:29  Page 57 58 annual report 2007
24 Share based payments (continued)
The options outstanding under the SAYE share option scheme at 31 March 2007 had an exercise price range from 262.6 pence to 
370.4 pence, and had a weighted average remaining contractual life of 1.4 years. The weighted average price of the Company’s shares 
on the date that options were exercised under the SAYE share option scheme was 470.8 pence.
Fair value of share based payments
The fair values of services received in return for share options granted are measured by reference to the fair value of options granted. The
estimate of the fair value received is calculated using the Black-Scholes model, adopting the following weighted average assumptions:
2007 2006
2001 Share SAYE share 2001 Share SAYE share
Option Plan option scheme Option Plan option scheme
Pence Pence Pence Pence
Fair value at measurement date 83.5 142.5 62.8 142.2
Share price at grant date 369.8 367.0 301.6 418.5
Exercise price 344.8 273.1 288.4 321.2
per cent per cent per cent per cent
Expected volatility (based on historic volatility) 28.3 29.3 16.5 22.1
Risk-free interest rate 3.3 3.3 3.3 3.5
years years years years
Option life 33 33
25 Financial instruments
Foreign currency risk
The Directors review and agree the broad policies for all significant areas of financial management. As the Group’s operations are 
centred on the aerospace industry, which is primarily US dollar based, a natural hedge is in place for most foreign currency transactions.
The Group puts in place forward foreign exchange contracts where it is thought necessary to use such instruments to manage 
the exposure to foreign exchange movements. At 31 March 2007, the Group had 15 forward currency contracts outstanding 
(2006: 17 forward currency contracts).
Interest rate risk
Interest rates are managed using floating rate debt, which comprises bank loans, on which interest is based on LIBOR, and cash at bank
and overdrafts, on which interest is related to bank base rates.
The Group uses interest rate swap contracts to hedge the Group’s exposure to movements in interest rates. At 31 March 2007, the Group
had one such contract outstanding (2006: four contracts). At 31 March 2007, the effective interest rate on the Group’s bank loans was
6.1 per cent (2006: 4.7 per cent). and the effective interest rate on lease finance obligations was 5.0 per cent (2006: 5.0 per cent).
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 58 annual report 2007 59
25 Financial instruments (continued)
In respect of income earning financial assets and interest bearing financial liabilities, their effective interest rates at 31 March 2007 and
the periods in which they mature or, if earlier, are repriced for interest rate purposes, are as follows:
Period in which interest rate reprices
Effective 12 months one to two two to five
interest rate or less years years Total
per cent £m £m £m £m
Cash 3.8 7.9 – – 7.9
Bank overdrafts 4.1 (0.5) – – (0.5)
Bank loans 6.1 (57.8) (0.2) – (58.0)
Lease finance obligations 5.0 (0.5) (0.4) (0.3) (1.2)
(50.9) (0.6) (0.3) (51.8)
Equivalent values at 31 March 2006 are as follows:
Period in which interest rate reprices
Effective 12 months one to two two to five
interest rate or less years years Total
per cent £m £m £m £m
Cash 3.1 9.5 – – 9.5
Bank loans 4.6 (34.9) (0.1) – (35.0)
Lease finance obligations 5.0 (0.3) (0.6) (0.3) (1.2)
(25.7) (0.7) (0.3) (26.7)
Liquidity risk
The Group’s policy on liquidity risk is to ensure that sufficient cash and undrawn committed facilities are available to fund ongoing
operations and to meet its medium term capital and funding obligations, and to meet any unforeseen obligations and opportunities.
Credit risk
Credit risk arises on financial instruments such as trade receivables and derivative financial instruments. Policies and procedures 
exist to ensure that customers have an appropriate level of credit according to their trading history. Derivative financial instruments 
are executed only with highly credit-rated authorised counter parties based on ratings issued by the major rating agencies.
Overall the Group considers that it is not exposed to a significant amount of credit risk.
71197 ACCOUNTS part 1  16/6/07  09:29  Page 59 60 annual report 2007
25 Financial instruments (continued)
At 31 March 2007 and 31 March 2006, the fair value of the Group’s financial instruments were not materially different to the book 
value of those instruments. At 31 March 2007, the Group held the following derivative financial instruments, none of which have been
hedge accounted:
Contract
or underlying Fair value of Fair value of
principal amount assets liabilities
£m £m £m
Foreign exchange derivatives
Forward currency contracts – expiry within one year 3.7 0.3 –
Interest rate derivatives
Interest rate swaps – expiry within two to five years 31.0 0.2 –
Total derivative assets 34.7 0.5 –
At 31 March 2006, the Group held the following derivative financial instruments, none of which have been hedge accounted:
Contract
or underlying Fair value of Fair value of
principal amount assets liabilities
£m £m £m
Foreign exchange derivatives
Forward currency contracts
– expiry within one year 5.3 0.1 –
Interest rate derivatives
Interest rate swaps
– expiry within one year 40.8 0.2 –
– expiry within two to five years 35.1 0.1 –
– expiry after more than five years 35.1 – (0.2)
Total derivative assets/(liabilities) 116.3 0.4 (0.2)
The currency and interest rate exposure of net debt at 31 March 2007 was:
Fixed rate debt Floating rate funds/(debt) Net funds/(debt)
2007 2006 2007 2006 2007 2006
£m £m £m £m £m £m
Sterling (0.6) (0.4) (0.1) 15.4 (0.7) 15.0
US dollar – – (33.6) (35.2) (33.6) (35.2)
Euro (0.6) (0.8) (17.5) (5.7) (18.1) (6.5)
Other – – 0.6 – 0.6 –
(1.2) (1.2) (50.6) (25.5) (51.8) (26.7)
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 60 annual report 2007 61
25 Financial instruments (continued)
Net monetary assets and liabilities by currency at 31 March 2007, excluding the functional currency of each operation, were:
Canadian
Sterling US dollar dollar Euro Total
£m £m £m £m £m
Functional currency
Sterling – (35.2) (0.1) (14.0) (49.3)
Euro 0.5 1.2 – – 1.7
Canadian dollar – 0.7 – – 0.7
Other 1.1 – – – 1.1
Total 1.6 (33.3) (0.1) (14.0) (45.8)
The equivalent values at 31 March 2006 were:
Canadian
US dollar dollar Euro Total
£m £m £m £m
Functional currency
Sterling (37.0) 0.1 (6.7) (43.6)
Canadian dollar 0.3 – – 0.3
Total (36.7) 0.1 (6.7) (43.3)
The maturity profile of the carrying amount of the Group’s borrowings is as follows:
Bank loans Lease finance
and overdrafts obligations Total
£m £m £m
At 31 March 2007
Within one year 0.5 0.5 1.0
Between one and two years – 0.4 0.4
Between two and five years 58.0 0.3 58.3
58.5 1.2 59.7
Lease finance
Bank loans obligations Total
£m £m £m
At 31 March 2006
Within one year – 0.3 0.3
Between one and two years – 0.6 0.6
Between two and five years 35.0 0.3 35.3
35.0 1.2 36.2
At 31 March 2007, the principal borrowing facilities available to the Group were committed revolving credit facilities of US$150.0 million
and an overdraft facility of £10.0 million. The revolving credit facilities mature in 2010. The overdraft facility is renewable annually.
71197 ACCOUNTS part 1  16/6/07  09:29  Page 61 62 annual report 2007
26 Accounting estimates and judgements
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
as follows:
Defined benefit pension scheme valuations
In determining the valuation of defined benefit pension scheme assets and liabilities, a number of assumptions have been made, notably 
in relation to the expected return on plan assets, inflation & discount rates, mortality and salary & pension increases.  These assumptions
are largely dependent upon factors outside the Group’s control.
Impairment of goodwill
The determination of whether goodwill is impaired requires an estimation of the future cash flows expected to arise from the cash
generating unit to which the goodwill is attached.  These cash flows are dependent upon future trading performance, which are partly
dependent upon prevailing market and economic conditions, which are outside the Group’s control.
Valuation of inventories
The Group has a formal policy for making appropriate reserves to ensure inventories are stated at the lower of cost and net realisable 
value.  This policy requires assumptions to be made regarding future demand levels, and these are partly dependent upon prevailing 
market and economic conditions, which are outside the Group’s control.
27 Related parties
The Group has a related party relationship with its subsidiaries, details of which are set out on pages 88 to 91, and with its Directors &
officers.  Transactions the Company enters into with its subsidiaries, and transactions between subsidiaries, for the sale and purchase of
products or services, are priced on an arms length basis.
The interests of the Directors in the ordinary share capital of the Company, together with details of their remuneration and share related
benefits, are detailed in the Remuneration Report. The emoluments of those members of the Group’s executive management team,
including Directors, who are responsible for planning, directing and controlling the activities of the Group are:
2007 2006
£m £m
Emoluments including social security costs 1.3 1.3
Employer pension contributions 0.2 0.1
Equity settled transactions 0.1 0.1
1.6 1.5
Notes to the Consolidated Financial Statements
For the year to 31 March 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 62 annual report 2007 63
28 Post balance sheet events
In the period between 31 March 2007 and the signing date of these financial statements, Bombardier Aerospace has served notice of its
intention to terminate its relationship with Pattonair Montreal. The timing and basis of termination has yet to be finalised but, based on
historic levels of profit generated by the contract and the likely costs associated with the exit, the impact on the Group is not expected to
be material.
It has been announced that the corporation tax rate applicable to UK companies is expected to change from 30 per cent to 28 per cent
from 1 April 2008. The deferred tax asset/liability for these companies has been calculated at 30 per cent in accordance with IAS12. Any
timing or temporary differences which reverse before 1 April 2008 will be charged or relieved at 30 per cent, and any timing or temporary
differences which exist at 1 April 2008 will reverse at 28 per cent. The Group expects that the net effect of this change will be a credit to
the income statement of approximately £0.1 million.
71197 ACCOUNTS part 1  16/6/07  09:29  Page 63
➦ 64 annual report 2007
2007 2006
Notes £m £m
Fixed assets
Tangible assets 3 2.4 2.4
Investments 2 113.3 104.5
115.7 106.9
Current assets
Debtors 4 90.8 71.1
Cash at bank and in hand 0.9 10.3
91.7 81.4
Creditors falling due within one year 5 (3.7) (3.7)
Net current assets 88.0 77.7
– due within one year 0.2 8.8
– debtors due after more than one year 87.8 68.9
Total assets less current liabilities 203.7 184.6
Creditors falling due after one year 6 (68.7) (47.7)
Provisions for liabilities and charges 7 (0.1) (0.1)
Net assets 134.9 136.8
Capital and reserves
Called up share capital 9 11.9 11.8
Share premium account 10 113.9 113.6
Other reserves 10 0.1 0.1
Profit and loss account 10 9.0 11.3
Equity shareholders’ funds 134.9 136.8
The financial statements were approved by the Board of Directors on 5 June 2007 and signed on its behalf by:
BD McGowan
Director
Company Balance Sheet
As at 31 March 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 64
➦ annual report 2007 65
Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to 
the financial statements.
Basis of preparation
The financial statements have been prepared in accordance with applicable UK accounting standards and law and under historical cost
accounting rules. A profit and loss account is not presented for the Company as permitted by Section 230 of the Companies Act 1985. 
A cash flow statement has not been presented as permitted by FRS1.
Investments
Fixed asset investments in subsidiary undertakings are stated at cost, less provision for any impairment.
Depreciation
Depreciation is provided so as to write off the cost or valuation of tangible fixed assets over their estimated useful economic lives 
on a straight line basis as follows:
Freehold buildings and long leasehold property 50 years
Plant, machinery, fixtures & IT equipment 3-10 years
Motor vehicles 3-4 years
No depreciation is charged on freehold land.
Tax
The charge for tax is based on the profit for the year and takes into account tax deferred because of timing differences between the
treatment of certain items for tax and accounting purposes except as otherwise required by FRS19. Liabilities are calculated on a
non-discounted full provision basis. Assets are recognised on the same basis, but only to the extent that it is probable they will
be recovered.
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains 
or losses on translation are included in the profit and loss account.
Retirement benefit obligation
Pension costs are recognised in the financial statements in accordance with the requirement of FRS17. The Company is a member of 
the defined benefit section of the Umeco Pension and Life Assurance Plan. Since the Company is unable to identify its share of the 
scheme assets and liabilities on a consistent and reasonable basis, the scheme is accounted for by the Company as if it was a 
defined contribution scheme. Details of the Group’s pension schemes are disclosed in note 22 of the consolidated financial statements.
Share based payments
FRS20 has been applied to share options granted after 7 November 2002 that had not fully vested at 1 April 2006. For all schemes, 
the fair value determined at the grant date is expressed on a straight line basis over the vesting period, based on an estimate of the
number of shares that will eventually vest. Details of the Company’s share option schemes are set out in note 24 to the consolidated
financial statements.
Notes to the Company Financial Statements
For the year to 31 March 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 65 66 annual report 2007
1 Staff costs
2007 2006
Aggregate payroll costs £m £m
Wages and salaries 2.4 2.0
Social security costs 0.3 0.2
Other pension costs 0.4 0.3
Equity settled transactions 0.1 0.1
3.2 2.6
Details of Directors emoluments are set out in the Remuneration Report.
2 Investments
Investments in Group undertakings £m
Cost
At 1 April 2006 105.7
Additions 8.9
Foreign exchange translation (0.1)
At 31 March 2007 114.5
Provision for impairment
At start and end of year (1.2)
Net book value
At 31 March 2007 113.3
At 1 April 2006 104.5
The principal Group undertakings are listed on pages 88 to 91. Their share capital consists entirely of ordinary shares other than Advanced
Composites Group Limited, Pattonair Limited and GRPMS Limited, whose share capital consists of ordinary and preference shares.
Notes to the Company Financial Statements
For the year to 31 March 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 66 3 Tangible fixed assets
Freehold Fixtures & Motor
land & buildings equipment vehicles Total
£m £m £m £m
Cost
At 1 April 2006 2.2 0.2 0.3 2.7
Additions – 0.1 0.1 0.2
Disposals – – (0.1) (0.1)
At 31 March 2007 2.2 0.3 0.3 2.8
Depreciation
At 1 April 2006 – 0.1 0.2 0.3
Charge for the year 0.1 – 0.1 0.2
Disposals – – (0.1) (0.1)
At 31 March 2007 0.1 0.1 0.2 0.4
Net book value
At 31 March 2007 2.1 0.2 0.1 2.4
At 1 April 2006 2.2 0.1 0.1 2.4
The net book value of freehold land & buildings includes £0.4 million (2006: £0.4 million) in respect of land.
4 Debtors
2007 2006
£m £m
Amounts falling due within one year
Amounts owed by Group undertakings 2.3 1.5
Other debtors 0.4 0.1
Prepayments and accrued income 0.3 0.5
Tax recoverable – 0.1
3.0 2.2
Amounts falling due after more than one year
Amounts owed by Group undertakings 87.5 68.7
Deferred tax 0.3 0.2
87.8 68.9
90.8 71.1
annual report 2007 67
71197 ACCOUNTS part 1  16/6/07  09:29  Page 67 5 Creditors falling due within one year
2007 2006
£m £m
Trade creditors 0.2 0.1
Amounts owed to Group undertakings – 0.1
Other creditors including tax and social security 0.7 1.2
Accruals and deferred income 2.8 2.3
3.7 3.7
Bank overdrafts are repayable on demand. Bank loans and overdrafts are unsecured.
2007 2006
Other creditors including tax and social security £m £m
Other tax and social security 0.5 0.1
Other creditors 0.2 1.1
0.7 1.2
6 Creditors falling due after one year
2007 2006
£m £m
Bank loans falling due between two and five years 57.7 34.9
Amounts owed to Group undertakings 7.6 9.3
Other creditors 3.4 3.5
68.7 47.7
7 Provisions for liabilities and charges
Restructuring
provision
£m
At start and end of year 0.1 
8 Deferred tax
2007 2006
£m £m
Opening net deferred tax asset 0.2 0.1
Credit for the year 0.1 0.1
Closing net deferred tax asset 0.3 0.2
The closing net deferred tax asset of £0.3 million (2006: £0.2 million) has been disclosed in note 4. The timing differences comprised:
2007 2006
Net deferred tax asset £m £m
Other timing differences 0.3 0.2
For the year to 31 March 2007
68 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 68
Notes to the Company Financial Statements 9 Share capital
2007 2006
Ordinary shares of 25 pence Number £m Number £m
Authorised 80,000,000 20.0 80,000,000 20.0
Allotted, called up and fully paid
At start of year 47,368,713 11.8 32,537,723 8.1
Rights issue –– 14,462,373 3.6
Issued pursuant to – Umeco 2001 Share Option Plan 169,748 0.1 ––
– SAYE share option scheme 24,155 – 368,617 0.1
At end of year 47,562,616 11.9 47,368,713 11.8
Details of share options are set out in note 24 to the consolidated financial statements.
10 Dividends and reserves
Share Profit
Other premium and loss
reserves account account
£m £m £m
At 1 April 2006 0.1 113.6 11.3
Premium on shares issued – 0.3 –
Retained profit for the year – – 5.0
Shares awarded under share schemes – – (0.2)
Dividends paid – – (7.1)
At 31 March 2007 0.1 113.9 9.0
Details of dividends declared and paid are set out in note 6 to the consolidated financial statements.
11 Reconciliation of movements in shareholders’ funds
2007 2006
£m £m
Shareholders’ funds at start of year 136.8 81.1
Profit for the year 5.0 11.5
Share capital issued – rights issue – 48.4
Share capital issued – share option schemes 0.4 0.6
Shares awarded under share schemes (0.2) (0.3)
Dividends paid (7.1) (4.5)
Shareholders’ funds at end of year 134.9 136.8
annual report 2007 69
71197 ACCOUNTS part 1  16/6/07  09:29  Page 69 12 Contingent liabilities
Under a Group registration, the Company is jointly and severally liable for value added tax due by certain other Group companies.  
At 31 March 2007, this contingent liability was £0.4 million (2006: £0.7 million).
13 Share based payments
The Company has established share option schemes which entitle employees, including Directors, to purchase shares in the Company.
Details of these schemes are set out in note 24 to the consolidated financial statements and in the Remuneration Report.
14 Financial instruments
The Company’s principal financial assets and liabilities are cash at bank and bank loans. Cash at bank is carried at nominal value, and 
bank loans are recognised initially at fair value and subsequently at amortised cost. In addition, the Company enters into forward foreign
exchange contracts to provide a hedge against transactional foreign currency exposures, and enters into interest rate swaps to hedge
against movements in short term interest rates. The fair values of the Company’s financial instruments at 31 March 2007 and 31 March
2006 were not materially different from their book values. 
At 31 March 2007, the Company held the following derivative financial instruments, none of which have been hedge accounted:
Contract
or underlying Fair value of
principal amount assets
£m £m
Foreign exchange derivatives
Forward currency contracts
– expirty within one year 0.6 –
Interest rate derivatives
Interest rate swaps
– expiry within two to five years 31.0 0.2
Total derivative assets 31.6 0.2
At 31 March 2006, the Company held all of the derivative financial instruments held by the Group. Details of these are disclosed in note 25
to the consolidated financial statements.
The Company’s borrowings denominated in foreign currency at 31 March 2007 were US dollar bank loans of £26.9 million 
(2006: £30.4 million). All of the principal borrowing facilities disclosed in note 25 to the consolidated financial statements were 
in the name of the Company.
For the year to 31 March 2007
70 annual report 2007
71197 ACCOUNTS part 1  16/6/07  09:29  Page 70
Notes to the Company Financial Statements
➦ Statement of compliance
The Board is firmly committed to high standards of corporate governance. During the year to 31 March 2007, the Company complied
with the provisions set out in section 1 of the Combined Code on Corporate Governance, issued in June 2006, with the one exception set
out below. Details of the mechanisms used by the Company to achieve compliance with the Code are set out in this report and in the
Remuneration Report.
The only provision of section 1 of the Code with which the Company was not compliant during the year was as follows:
B1.6 Notice Periods John Beaumont’s service contract contains a two year notice period, however an amendment to his contract
was agreed in 2004, which reduced this notice period to one year with effect from November 2006. Details are
shown in the Remuneration Report on page 81. No other notice periods exceed one year. As demonstrated by 
the amendment agreed with John Beaumont in 2004, the Board recognised current market practice for notice
periods not to exceed one year. Full compliance with the provisions of section 1 of the Code was achieved in
November 2006, at which time the one year notice period for John Beaumont took effect.
The Board
The Board consists of seven Directors: five non-executive and two executive. The names, roles and biographical details of the Directors
are set out on page 19. Each of the non-executive Directors, including the Chairman, are free from any business or other relationship
which could materially interfere with the exercise of their judgment, and are considered by the Board to be independent. Brian
McGowan has a shareholding of 2.1 per cent of the Company’s issued share capital, however the Board considers that this holding 
does not impede the independence of Mr McGowan.
The Board maintains a Practices and Procedures document which sets out the Board’s key administrative processes that are used to
ensure information is provided to the Board and the Board’s committees to enable them to fulfil their roles properly. The document also
contains the list of matters reserved for the Board, which is periodically reviewed and updated. The list has been compiled to ensure that
the Board is made aware of all matters that are appropriate for it to consider, and has also been communicated to the management of
the Group’s companies to enable them to manage their operations within a clearly defined framework of control. Matters reserved for
the Board include major investment decisions and changes in the composition of the Group. The Board approves the Group’s strategy
and annual budget, and considers detailed financial and operational reports on the progress of the Group. The divisional Chief Executives
are invited to attend certain Board meetings to make presentations and join in discussions.
Non-executive Directors are encouraged to become familiar with the Group’s businesses and there is regular communication between
executive management and non-executive Directors. The Chairman is responsible for ensuring that Board meetings operate to an
appropriate agenda and that adequate information is provided sufficiently in advance of meetings to allow proper consideration. 
He is supported by the Company Secretary, to whom all Directors have access. The Company Secretary acts as secretary to the Board 
and audit committee. The Board has an agreed procedure for any Director to obtain independent professional advice at the Company’s
expense. Directors and officers liability insurance is held by the Company and details have been circulated to the Directors.
In view of the nature of the Group, details of which are set out below, the Board believes that the current number and balance
of Directors is appropriate. As explained in the Chairman’s Statement, Michael Harper is retiring from the Board at the 2007 Annual
General Meeting and will not seek re-election. As set out in the Chairman’s Statement, Chris Hole will be appointed to the Board
on 25 July 2007.
During the year the Board met seven times and each Board meeting was fully attended with the exception of the meeting in April 2006
which Michael Harper and Graham Zacharias were unable to attend. The audit committee met on two occasions and the remuneration
committee met three times. The nomination committee met once during the year, and also met in May 2007 to approve the
appointment of Chris Hole as a non-executive Director to replace Michael Harper.
The Chairman and non-executive Directors regularly discuss matters informally outside of Board meetings. In addition, meetings of the
non-executive Directors are held annually, both with and without the Chairman being present. Such meetings are chaired by the Senior
independent non-executive Director.
Corporate Governance
annual report 2007 71
71197 ACCOUNTS part 2  16/6/07  11:08  Page 71 The Senior independent non-executive Director is responsible for appraising the performance of the Chairman and is available to meet
shareholders to discuss concerns that they may have.
There is a clear division of responsibility between the Chairman and Chief Executive, which is reflected in the Board’s Practices 
and Procedures document. In summary, the Chairman is responsible for the leadership and running of the Board but does not have 
any executive powers or responsibilities. There have been no changes in the Chairman’s external commitments which have affected 
his ability to perform his role with the Group. The Chief Executive leads the executive management team in running the Group’s
businesses and in implementing operating and strategic plans under authority delegated by the Board. The Group’s executive committee
comprises Clive Snowdon and John Beaumont as executive Directors, Jason Crabtree, Andrew Moss and John Smith as Chief Executives 
of the Group’s three business streams, Mike Giles as Finance Director of Umeco Composites and Steve Bowers as Company Secretary.
Standing committees of the Board
The principal standing committees of the Board are the audit committee, the remuneration committee and the nomination committee.
Each of these committees operate under written terms of reference which clearly set out their respective delegated responsibilities and
authorities, copies of which are available from the Company Secretary.
The following table shows the level of attendance by each of the Directors at full scheduled meetings of the Board and its principal
committees in the year to 31 March 2007.
Board Audit Remuneration Nomination
Held* Attended Held* Attended Held* Attended Held* Attended
BD McGowan 77––331 1
CJ Snowdon 77––––1 1
RJK Beaumont 77––––1 1
SC Bird 33––––– –
JM Harper 7622331 1
JS Harper 331111– –
DR Porter 7722––1 1
JG Zacharias 762222– –
* The number of meetings held during the period a Director was in office or a member of a committee.
Audit committee
The audit committee is chaired by David Porter. The other committee members are Michael Harper and Graham Zacharias, together 
with John Harper until his retirement from the Board in July 2006. David Porter has significant experience of corporate financial matters
and Graham Zacharias is a chartered accountant with recent and relevant financial experience. The members of the audit committee
ensure that their knowledge of relevant legislation and best practice developments is maintained. The committee received reports from
the external auditor who attended the committee’s meetings. The committee also calls upon the Finance Director and Company
Secretary to attend portions of its meetings.
The committee’s work included reviewing the financial statements, accounting policies and significant areas of judgment. The committee
also assessed the proposed external audit approach and the independence and objectivity of the external auditor. In assessing auditor
independence the committee obtained confirmation from the external auditor that its ethics and independence policies complied with
the requirements of the Institute of Chartered Accountants in England and Wales. The use of the auditor for non-audit work is monitored
by the committee and the Board’s approval is required prior to the Company’s external auditors undertaking due diligence or similar
advisory work.
Corporate Governance
72 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 72 The responsibilities and objectives of the audit committee are set out in the committee’s terms of reference, which are summarised
as follows:
● to review the financial statements of the Group and report on matters of significance to the Board, particularly any changes in
accounting policies and practices, major judgmental areas and significant adjustments arising from the external audit;
● to be responsible for the appointment, re-appointment and removal of the Company’s external auditors, subject to consultation
with the Board and shareholder approval, and to oversee the relationship with the external auditors;
● to review the audit planning process and scope of work performed by the external auditors; and
● to review the Company’s internal financial control system and risk management systems and to monitor the need for an internal
audit function, unless these have been expressly addressed by the Board itself.
Two audit committee meetings have been held during the year. These considered the results of the interim and full year audit processes,
and also considered the planning and scope for the auditors’ work in respect of these financial statements.
Remuneration committee
The remuneration committee is chaired by Graham Zacharias, who was appointed chairman in September 2006. Its other members are
Brian McGowan, Michael Harper and Stephen Bird, who joined the committee in October 2006. In order to avoid any compromise in the
activities of the remuneration committee, the chairman of the committee takes responsibility for minuting meetings. The committee’s
main responsibilities are to determine the specific remuneration packages of the executive Directors including salaries, annual bonus
and longer term incentive schemes, pensions and other benefits. The committee also reviews the remuneration packages of those at the 
next most senior level of management. In 2004, the committee undertook a review of remuneration with particular reference to the 
long term incentive arrangements. Further information on the structure of remuneration implemented by the committee is contained 
in the Remuneration Report, which also contains further details of the work of the committee.
There is a separate non-executive Directors’ remuneration committee and Chairman’s remuneration committee which have
responsibility for reviewing the remuneration of the non-executive Directors and Chairman respectively. The members of the non-
executive Directors’ remuneration committee are the Chairman and the executive Directors. This committee did not meet during the
year. The Chairman’s remuneration committee now comprises the Chief Executive, Senior independent non-executive Director and
chairman of the remuneration committee. This committee met once during the year, with the meeting being fully attended.
Nomination committee
The nomination committee is responsible for identifying and selecting candidates to fill Board vacancies for both executive and 
non-executive positions. The committee also reviews the structure, size and composition of the Board. The committee comprises all
members of the Board, other than the Director whose replacement is being selected. The Chairman of the Company is normally
chairman of the committee, other than when the Chairman’s replacement is being selected, in which case the Senior independent
non-executive Director shall chair the committee. In conjunction with the Company Secretary, the committee will ensure that on
appointment to the Board, non-executive Directors receive a formal letter of appointment setting out clearly what is expected of them 
in terms of time commitment, including committee service and involvement outside Board meetings, together with a comprehensive
induction pack providing information on the Group.
The nomination committee met on one occasion during the year, to consider the results of the search process carried out for the
Company by external consultants, which identified candidates for the vacancy created by the retirement of John Harper at the 2006
Annual General Meeting. This process led to the appointment of Stephen Bird as non-executive Director in October 2006.
The committee met in May 2007 to consider the appointment of a new non-executive Director to replace Michael Harper, and as a result
of this meeting Chris Hole will be appointed to the Board on 25 July 2007.
Investor relations
The Annual General Meeting is recognised by the Board as an important opportunity to meet and communicate with shareholders,
particularly private investors. The 2006 Annual General Meeting was chaired by the Chairman and attended by all of the Directors. 
The Chairman encouraged debate and questions at the formal meeting and informally during refreshments afterwards.
annual report 2007 73
71197 ACCOUNTS part 2  16/6/07  11:08  Page 73 Each substantially separate issue was put to the 2006 Annual General Meeting as an individual motion and the meeting was invited to
adopt and approve the financial statements and the Directors’ report for the year to 31 March 2006. A separate resolution for the approval
of the Directors’ Remuneration Report was also put to the meeting. Notice of the 2006 Annual General Meeting was sent to shareholders
more than twenty working days in advance of the meeting and the level of proxy votes lodged for and against each resolution, together
with details of abstentions, were disclosed at the meeting. Full details are available upon request from the Company Secretary.
In addition to the annual report, the Company publishes an interim report which is sent to shareholders. The Company’s website,
www.umeco.com, includes copies of certain key presentations made by senior management, recent annual and interim reports, 
press releases and links to the websites of the Group’s businesses.
The Board as a whole seeks to maintain a thorough understanding of the issues and concerns of major shareholders. Dialogue is
maintained with shareholders, and the executive Directors regularly meet with institutional investors. The Chief Executive and Finance
Director have primary responsibility for investor relations and updates are provided to all Board meetings. In addition, copies of research
notes and regular feedback reports from the Company’s broking advisors are provided to the Board. The Chairman, Senior independent
non-executive Director and other non-executive Directors will consider requests for meetings with shareholders.
Board induction, development, evaluation and re-election
All new Directors receive a comprehensive induction pack setting out information on the Group. During Directors’ service with the Group,
regular input at meetings from a number of members of the executive committee assists in keeping the Board up-to-date with matters
of significance to the Group, in addition to the reporting contained in papers provided to the Board each month. Board meetings are held
at the Group’s principal operating units on a rolling basis, most recently at Pattonair Italy, and non-executive Directors are encouraged to
make additional visits to the Group’s operations in order to ensure their knowledge remains current.
Formal evaluations of the performance of the Board and its committees are conducted annually. The most recent evaluation was made 
in March 2007 by the Chairman in conjunction with the Company Secretary. The evaluation took into account the views of each of the
Directors on a wide range of matters, including the performance of the Board, its committees and the Directors, and matters relating to
the leadership and culture of the Group. The Board reviews the results of the evaluation process and, where required, acted in order to
enhance further the effectiveness of the Board’s procedures and working practices.
Each new appointee to the Board is required to stand for election at the next Annual General Meeting following their appointment. 
In addition, one third of the Board retire by rotation each year and each Director stands for re-election at least once every three years. 
Any non-executive Director who has served on the Board for more than nine years stands for re-election annually. The Board considers
that each of the Directors seeking election and re-election at the 2007 Annual General Meeting should be supported by shareholders
since each of these Directors continues to be effective and demonstrate commitment to their roles. 
Financial Reporting
Nature of the Group
The Group has a clear organisational structure and well established reporting and control disciplines. Directors of the Group’s operating
companies assume responsibility for, and exercise a high degree of autonomy in, running day-to-day trading activities. These activities
are conducted within a framework of clear rules, authority limits and policies regarding business conduct, which are documented in the
Group’s Policy and Procedures Manual. The Manual sets out minimum standards for accounting systems and controls, and has recently
been made available on the Group’s intranet to ensure all appropriate staff have ready access to its content. Certified quarterly reports are
required from operating company managing Directors and finance Directors, which confirm compliance with the Group’s key internal
controls.
In view of the devolved nature of the Group, and the disciplines referred to above, Umeco does not require an extensive head office
function nor is it appropriate for it to operate with a large number of executive Directors. The Board considers these to be commercial
strengths for the Group and they have been important factors in the Board’s assessment of its corporate governance arrangements.
Corporate Governance
74 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 74 Each operating company has a local board that reports into the appropriate divisional Chief Executive and the two executive Directors.
Through monthly board meetings held by each operating company, the executive Directors maintain close and frequent contact with
operating company management. In addition to financial performance, the reporting made by operating companies covers areas of 
non-financial risk, in particular health & safety and the environment.
All operating companies prepare annual budgets which include projections for a period of two years. These are reviewed in detail by
executive Directors and are consolidated for review and approval by the Board. Performance against budget is continually monitored 
by the executive Directors, reviewed at monthly meetings of the executive committee and reported to all meetings of the Board.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the annual report, and the Group and Company financial statements, in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under that
law, they have elected to prepare the Group financial statements in accordance with Adopted IFRSs, and applicable law and have elected
to prepare the parent Company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally
Accepted Accounted Practice).
The Group financial statements are required by law and Adopted IFRSs to present fairly the financial position and performance of the
Group; the Companies Act 1985 provides in relation to such financial statements that references in the relevant part of that Act to
financial statements giving a true and fair view are references to their achieving a fair presentation. 
The parent Company financial statements are required by law to give a true and fair view of the state of affairs of the parent Company. 
In preparing each of the Group and parent Company financial statements, the Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgements and estimates that are reasonable and prudent;
● for the Group financial statements, state whether they have been prepared in accordance with Adopted IFRSs;
● for the parent Company financial statements, state whether applicable UK accounting standards have been followed, subject to any
material departures disclosed and explained in the parent Company financial statements; and
● prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the Group and the parent
Company will continue in business.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial
position of the parent Company and to enable them to ensure that its financial statements comply with the Companies Act 1985. 
They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Going Concern
After making appropriate enquiries, based on the strength of the Group’s balance sheet and on the facilities currently available to the
Group, the Directors have a reasonable expectation that the parent Company and the Group have adequate resources to continue 
in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the
financial statements.
annual report 2007 75
71197 ACCOUNTS part 2  16/6/07  11:08  Page 75 Systems of internal control
As required by the UK Listing Authority, the Company has complied with the Combined Code provisions on internal control having
established the procedures necessary to implement the guidance contained in the ICAEW publication ‘Internal control: Guidance for
directors on the Combined Code’ and by reporting in accordance with that guidance.
The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness, whilst the role of
management is to implement Board policies on risk and control. The system of internal control is designed to manage rather than
eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against
material misstatement or loss.
There is a continuous process for identifying, evaluating and managing the significant risks faced by the Group, which has been in place
for the year under review and up to the date of approval of this annual report.
The Board has reviewed the effectiveness of the Group’s system of internal controls during the year, including strategic, operational, 
legal and compliance, risk management and financial controls. The processes used by the Board for their review included the following:
● the Board receives regular reports from management which highlight any material control weaknesses and discusses actions taken 
on weaknesses identified by management;
● the audit committee, based on reports provided by the external auditors, reviews the effectiveness of the internal financial control
system, and any significant matters are referred to the Board for consideration. The chairman of the audit committee reports the
outcome of the audit committee meetings to the Board; and
● the Board considers all significant financing and investment opportunities relating to the Group, including the granting of
guarantees, and monitors policy in respect of managing treasury and exchange risks.
Consistent with the Turnbull committee guidance, the Group’s management operated a risk management process during the year 
which identifies the key risks facing each of the Group’s businesses and reports to the Board on how those risks are being addressed. 
This is based on each business producing a report on risk assessment and business development policy, which identifies the key risks
facing the business, the probability of those risks occurring and the actions being taken to mitigate those risks to the desired level. 
These reports are combined to provide the Board with a report of the significant risks faced by the Group as a whole, together with
details of the controls in place over those risks.
Whilst the Group does not have a formal whistleblowing policy in place, the Directors believe that the culture of the Group allows
individuals to raise possible irregularities with management or members of the Board without apprehension.
Internal audit
The Group does not have a separate internal audit function, however the central finance department conducts detailed reviews of 
the financial records and controls of the Group’s operating companies. The results of these reviews are provided to the Board and the
external auditors. The Board periodically reviews the need for a separate internal audit function and has done so during 2007. In light
of the reviews carried out by the central finance department, the current conclusion of the Board is that a separate internal audit
function is not necessary.
Through the procedures outlined above, the Board has considered all significant aspects of internal control for the year and up to the
date of this annual report. The Board believes that the Group’s system of internal control, which is designed to manage rather than
eliminate risk, provides reasonable but not absolute assurance against material misstatement or loss.
Corporate social responsibility
The Board takes account of social, environmental and ethical considerations when managing the Group and when considering new
investment opportunities. This is monitored as part of the Group’s annual risk assessment process. The direct environmental impact
of the Group’s activities is limited, however the Group considers the environmental impact of all significant investment opportunities
and is engaged in a continuing effort to improve the environmental performance of all of its businesses. The Group is a member of the
FTSE 4 Good Index.
Corporate Governance
76 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 76 Health & safety remains a key component of the Group’s corporate social responsibility strategy. Reporting of health & safety matters
has been enhanced during the year, and the Group’s health & safety policy statement is regularly updated and circulated to the Group’s
operating companies. Specialised staff at each of these companies ensure compliance with this statement. Root cause analysis and
similar investigative work is carried out following all health & safety incidents, and steps are taken to prevent recurrence of issues 
that arise.
The Group’s current system of risk management and control, which includes social responsibility matters, is led by each of the Group’s
operations. Senior staff at these companies are responsible for complying with the relevant environmental regulations in all the
geographical areas in which they operate. They report to the Board on such issues through the Finance Director, who has ultimate
responsibility for such matters, as part of the Group’s system of internal control and risk management reporting. Overall the Group
continues to believe that it has limited environmental impact. However the Group recognises that it has a responsibility to understand
the impact that its activities have at local, national and global level. These have been monitored and assessed, and solutions have been
implemented as appropriate according to best practice, local legal and other requirements.
The Group continues to focus attention on areas where its impact on stakeholders is most beneficial, by delivering an improved and
more secure environment for our employees, customers and suppliers, and by operating ethically as an international Group. The Group’s
values statements adopted in 2006 demonstrate the Group’s commitment to maintaining integrity, fairness and trust.
Employment
Employment policies throughout the Group have been established to comply with relevant legislation and codes of practice relating 
to employment, health & safety and equal opportunities. The Group provides high quality working environments and facilities for
employees, and training and development appropriate to each of their roles. The Group does not discriminate against employees in 
any way and provides a competitive range of employee benefits. The Group keeps employees informed on matters relating to their
employment and on financial and economic factors affecting the Group. This is achieved through management briefings, the Group’s
website and by distribution of press releases and internal announcements. This enables employees to gain a better understanding 
of the Group’s business objectives and their roles in achieving them. Building and developing the skills, competencies, motivation and
teamwork of employees is recognised by the Board as being key to achieving the Group’s business objectives.
The Group’s commitment to rewarding employees and valuing qualities such as determination are enshrined in the Group’s 
values statements.
Encouragement is given to all UK employees to participate in the Group’s SAYE share option scheme under which options over the
Company’s shares are granted to employees who enter into contracts to save agreed amounts each month. The most recent invitation
under the scheme was made during 2006, and further invitations are planned under the all employee share schemes for which approval
is being sought at the 2007 Annual General Meeting.
Ability and aptitude are the determining factors in the selection, training, career development and promotion of all employees. The
Group recognises its responsibility under the UK’s Disability Discrimination Act 1995 and does not discriminate against disabled people.
If an employee is, or becomes, disabled during their period of employment, the Group will, if necessary and to the extent possible, adapt
the working environment to enable the employee to continue in their current position or retrain the employee for duties suited to their
abilities following disablement. It continues to be the Group’s policy to consider applications for employment from disabled people on
the same basis as other potential employees.
Health & safety training is part of the induction process for new employees. Specific training is given where relevant, for example
regarding forklift truck operation and chemical handling, as well as fire safety and first aid matters.
Risk assessments are used in all parts of the Group, with these being updated on a regular basis and also when new equipment
or machinery is acquired or new processes are introduced.
annual report 2007 77
71197 ACCOUNTS part 2  16/6/07  11:08  Page 77 Environment
The Group aims to promote and improve throughout the Group the benefits of efficient usage of energy and water. Certain of the
Group’s companies have reached ISO14001 standard, which requires them to make continuous improvements to their usage of natural
resources. Recycling processes have been in use in the Group for many years, and recycled materials are used wherever possible.
Improvements to reduce the environmental impact of the Group’s operations are regularly implemented.
Community impact and involvement
The Group contributes to local worthwhile causes and charities, and ensures that the Group’s operations cause minimal negative impact
within the community. In common with all companies, the Group has limited resources and the amount of money available for
charitable purposes varies over time.
Relationships with suppliers, customers and other stakeholders
The Group recognises the obligations it has towards the parties with whom it has business dealings including customers, shareholders,
employees, suppliers and advisors. Dealings with these groups depend upon the honesty and integrity of the Group’s staff and every
effort is made to ensure that a high standard of expertise and business principles is maintained in such dealings. Where appropriate,
training is given to maintain and to raise standards.
The Group’s policy towards suppliers is that each operating company is responsible for negotiating the terms and conditions under
which they trade with suppliers. Once terms are agreed, payments to suppliers are made in accordance with those terms and conditions,
subject always to the supplier having complied with them.
78 annual report 2007
Corporate Governance
71197 ACCOUNTS part 2  16/6/07  11:08  Page 78
➦ The Remuneration Report is presented to shareholders by the Board and sets out the remuneration policy and details of the
remuneration of each Director. The Report will be put to the Annual General Meeting for approval by shareholders, this vote is 
advisory only.
Remuneration committee
The remuneration committee consists of Graham Zacharias as chairman, Brian McGowan, Michael Harper and Stephen Bird, and also 
has access to external advice. The committee is responsible for all aspects of the remuneration packages of executive Directors and for
the operation of the Company’s executive share option and long term incentive plans. The members of the committee are non-executive
Directors who have no personal financial interest in the Company, other than as shareholders. They have no day-to-day involvementin
the management of the Group nor do they have any potential conflicts of interest arising from cross-directorships.
Remuneration policy
The remuneration policy is set by the Board as a whole with the remuneration committee then working within this policy to set
individuals levels of remuneration. The aim of the policy is for the Group to attract, motivate and retain high calibre executives by
rewarding them with competitive salary, benefit and incentive packages which are linked to performance and which are designed 
to enhance the business and the creation of shareholder value. The remuneration committee uses the services of Deloitte & Touche LLP
to provide remuneration advice. Deloitte & Touche LLP did not provide any other services to the Group during the year.
In 2004, the remuneration committee conducted a thorough review of the remuneration packages of the Group’s senior executives,
including the executive Directors. This review highlighted the difficulties in setting long term remuneration incentives within cyclical
industries such as the aerospace sector. Accordingly, the committee decided to place greater emphasis on shorter term targets through
the Company’s annual bonus scheme by increasing the potential reward under that scheme but requiring part of the bonus entitlement
to be taken in the form of deferred shares. Although the deferred shares awarded will have been earned as a result of performance in a
particular year, full entitlement to them will be deferred until the third anniversary of the award date. An executive leaving during this
three year period, other than for reasons acceptable to the committee, will forfeit their right to the deferred shares. No new shares will
be issued in respect of these arrangements.
As a consequence of this restructuring of the annual bonus arrangements, the remuneration committee has decided that the executive
Directors will not, for the time being, receive any further options under the 2001 Share Option Plan. The committee considers that the
greater flexibility of the annual bonus scheme makes it less susceptible to the cyclical nature of the aerospace industry. In addition, 
the payments of part of the bonus entitlement through shares, which are deferred and conditional on continued service, will assistin
aligning the interests of executive Directors with those of shareholders.
The elements of the remuneration package are as follows:
Basic salaries
The basic salaries of executive Directors are reviewed annually with effect from 1 April, or when a change in the scope of a role occurs. 
The committee takes into account the performance of the Group, the calibre of the individual and their contribution to the success of the
Group.  The committee also considers market data for executives of comparable status and skills in companies of similar size and complexity.
Benefits in kind
Benefits in kind provided are primarily a fully expensed company car and private medical insurance. Directors may choose to forego the
company car benefit in return for an additional payment of salary, such payment being calculated so as to leave the Company no worse off
from the change.
Remuneration Report
annual report 2007 79
71197 ACCOUNTS part 2  16/6/07  11:08  Page 79 Annual performance related bonus
Clive Snowdon and John Beaumont participate in the annual bonus scheme (the ‘Umeco Bonus Plan’) under which the value delivered to
individuals is dependent upon a range of financial and operational measures. These include the increase in the Group’s adjusted profit
before tax and specific operational objectives. Targets are normally set in line with the Group’s budget.
For the year to 31 March 2007, executive Directors were eligible for a maximum award of 125 per cent of basic salary. Ordinarily, two
fifths of the value of any award is paid in cash (i.e. up to 50 per cent of basic salary) and the remaining three fifths is delivered in the
form of a deferred award in the Company’s shares (i.e. up to 75 per cent of basic salary). An individual must normally remain in
employment with the Company for three years following the award date in order to receive the value of these deferred shares.
For the year to 31 March 2007, performance resulted in a bonus award for the executive Directors of 76.8 per cent of salary. Accordingly,
30.7 per cent of salary is delivered in cash and 46.1 per cent of salary is delivered in the form of deferred shares. Payments under the
Umeco Bonus Plan are non-pensionable.
Share options
Executive options
Executive Directors have been eligible to participate in the Umeco 2001 Share Option Plan under which options are granted at
the prevailing market price at the time of grant, and are not normally exercisable before the expiry of three years from the date 
of grant. Options are not exercisable more than ten years after the date of grant. Following the recent restructuring of annual bonus
arrangements, no further grants of options are currently planned to be made under the Umeco 2001 Share Option Plan. Options
outstanding as at 1 April 2006 were equivalent to 100 per cent of basic salary at their respective grant dates.
All options granted under the Umeco 2001 Share Option Plan are subject to performance targets, the achievement of which is a
condition precedent to the exercise of the options. The performance target attaching to the options granted to executive Directors is
based on the Company’s growth in earnings per share over a three year period as follows:
Average real annual growth Proportion of
over the three year period option vesting
Below 5 per cent 0 per cent
Over 5 per cent 25 per cent
Over 7.5 per cent 50 per cent
Over 10 per cent 75 per cent
Over 12.5 per cent 100 per cent
No options may be exercised if the average real annual growth in earnings per share is below 5 per cent. For performance between 
any two levels over 5 per cent, the options will be exercisable on a straight line basis. Real growth in earnings per share is defined as 
the amount by which the Company’s growth in earnings per share exceeds the rate of inflation over the same period.
When granting options under the Plan, the remuneration committee took into account the salary level of the individuals concerned.
Details of the options under the Umeco 2001 Share Option Plan granted to executive Directors of Umeco are set out on page 84.
SAYE share option scheme
The Group’s SAYE share option scheme is open to Directors spending at least 25 hours per week on Group business. Options under the
scheme are exercisable three years from the date of grant.
Remuneration Report
80 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 80 Directors’ pension entitlement
Clive Snowdon
Clive Snowdon is entitled to employer’s pension contributions equivalent to 39 per cent of basic salary. At the executive’s discretion, 
a proportion of the pension contribution may be converted into salary. The Company has established the Umeco plc Executive 
Retirement Benefits Scheme, an individual defined contribution scheme in respect of Clive Snowdon. In addition, the Company is the
principal employer under a funded unapproved retirement benefits scheme (FURBS) in respect of Clive Snowdon. Both schemes are 
non-contributory by the employee.
John Beaumont
John Beaumont is a member of the Umeco plc Pension and Life Assurance Plan, which is approved by HM Revenue & Customs. Until
normal retirement date members currently contribute 6.5 per cent of salary and during the year to 31 March 2007 the Group contributed
17.7 per cent. The scheme provides members with a pension of up to two thirds of pensionable salary on retirement. It also provides a
lump sum death in service benefit and pensions for dependents of members on their death in service or following retirement. Normal
retirement age is 63, however John Beaumont’s contract provides that should he retire at any time after reaching age 60, his pension will
not be subject to any actuarial deduction as a result of early retirement.
There are no pension arrangements in place for other Directors.
Remuneration of non-executive Directors
The policy of non-executive remuneration is to pay an appropriate level based on each Director’s time and work on the Board and 
its committees. The remuneration of the Chairman is determined by the Chairman’s remuneration committee, and the remuneration of
the other non-executive Directors is determined by the non-executive Directors’ remuneration committee. No non-executive Director is
involved in setting his own remuneration.
Service contracts
The Company has agreed service contracts with the executive Directors which are considered consistent with normal practice in smaller
quoted companies wishing to attract and retain suitably qualified executives. The dates of these service contracts and the letters of
appointment of the non-executive Directors, copies of which are available from the Company Secretary, are as follows:
BD McGowan 25 February 2005
CJ Snowdon 21 April 1997
RJK Beaumont 20 September 1993, amended 17 December 2004
JM Harper 25 February 2005
DR Porter 25 February 2005
JG Zacharias 23 September 2005
SC Bird 26 September 2006
Clive Snowdon has a contract which is terminable by the Company giving one year’s notice, or by Clive Snowdon giving six months’
notice. There is no obligation on the Company to make any payments in lieu of notice other than basic salary and pension contributions.
John Beaumont has a contract which is terminable by him giving six months’ notice, and the Company was previously required to give two
years’ notice. This contract has been revised by the amendment noted above so that the Company was required to give two years’ notice if
such notice had been given before 25 November 2006, and is required to give one year’s notice if notice is served after that date. As part of
the terms of this contract, John Beaumont is entitled to terminate the contract within 12 months of his becoming aware that, as a result of
a hostile take-over, any person has acquired shares in the Company which, taken together with shares held or acquired by persons acting in
concert with that person, carry 50 per cent or more of the voting rights for the time being of the Company. In that event, he would receive
compensation equal to the amount to which he would have been entitled under the relevant legislation if he had been wrongfully dismissed.
The letters of appointment of the non-executive Directors require six months’ notice to be given by the Director or the Company to
terminate the appointment. None of the letters provide for the payment of compensation.
annual report 2007 81
71197 ACCOUNTS part 2  16/6/07  11:08  Page 81 Total shareholder return
The graph below compares the Company’s total shareholder return over the five years to 31 March 2007 with that for the FTSE Small-cap
share index and the FTSE Aerospace & Defence sector index. The base for the three data series has been taken as 100 on 31 March 2002.
The FTSE Small-cap share index has been chosen as it is a relevant broad equity market index for smaller quoted companies.
Directors’ interests
The beneficial interests of the Directors who held office at the end of the financial year in the ordinary shares of the Company are shown
below. Details are given at the start of the year, or date of appointment in the case of Stephen Bird, and at the end of the year:
At end of year At start of year
Per cent Per cent
of issued of issued
Number shares Number shares
BD McGowan 1,000,000 2.1 1,150,000 2.4
CJ Snowdon 228,103 0.5 206,828 0.4
– deferred shares 73,163 0.2 34,711 0.1
RJK Beaumont 135,006 0.3 117,462 0.2
– deferred shares 51,359 0.1 24,217 0.1
SC Bird – – – –
JM Harper 40,000 0.1 28,888 0.1
DR Porter 3,850 – 3,850 –
JG Zacharias – – – –
The deferred shares held by Clive Snowdon and John Beaumont at the end of the year relate to awards made in June 2005 and June 2006
under the terms of the Umeco Bonus Plan. There have been no changes in Directors’ interests in the period between 31 March 2007 and
the signing date of these financial statements.
Directors are not required to maintain a minimum shareholding in the Company.
Remuneration Report
82 annual report 2007
Umeco FTSE Small-cap FTSE Aerospace & Defence  
0
50
100
150
200
250
300
350
March 2002 March 2003 March 2004 March 2005 March 2006 March 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 82 The individual aspects of remuneration for each Director
The auditors are required to report on the information contained in this section of the report.
Directors’ remuneration 2007 2006
Fees Salary Bonus Benefits Total Total
£000 £000 £000 £000 £000 £000
Chairman
BD McGowan 50 – – 32 82 81
Executive Directors
CJ Snowdon – 300 92 18 410 395
RJK Beaumont – 200 61 17 278 281
Non-executive Directors
SC Bird – – – – – –
JM Harper 20 – – – 20 20
JS Harper 7 – – – 7 25
DR Porter 30 – – – 30 30
JG Zacharias 23 – – – 23 10
130 500 153 67 850 842
In 2007, Clive Snowdon elected to sacrifice £34,000 of the salary shown in the table for additional pension contributions. In 2006, Clive
Snowdon converted £2,000 from his pension contribution entitlement into additional salary. Benefits comprise the value of benefits in
kind including company cars, petrol and medical insurance. Included within benefits are additional payments made to Directors in lieu 
of their entitlements to company cars.  Such payments were made to Brian McGowan (2007: £31,000, 2006: £29,000), Clive Snowdon
(2007: £16,000, 2006: £16,000) and John Beaumont (2007: £14,000, 2006: £14,000).
Clive Snowdon and John Beaumont each received cash bonuses of 30.7 per cent of basic salary (2006: 47.5 per cent). Values shown in the
table above do not include the deferred share awards made under the terms of the Umeco Bonus Plan. Awards of deferred shares have
been made as follows:
2007 2006 2005
£000 £000 £000
Clive Snowdon 138 182 172
John Beaumont 92 128 120
Each of the deferred share awards accrued as a result of performance in the years to 31 March shown in the table. These deferred share
elements of annual bonuses will be recognised as remuneration upon the lifting of the restrictions attached to the awards.
Stephen Bird was entitled to a fee of £10,000 for the period from his date of appointment until 31 March 2007. He has waived
entitlement to this fee and a charitable donation of an equivalent amount has been made.
annual report 2007 83
71197 ACCOUNTS part 2  16/6/07  11:08  Page 83 Directors’ share options Exercise 2007 2006
Earliest date Expiry price Number Lapsed Exercised Number
of exercise date Pence outstanding in year in year outstanding
Umeco 2001 Share Option Plan
CJ Snowdon June 2006 June 2013 207.2 – (39,586) (51,142) 90,728
June 2007 June 2014 319.1 67,375 – – 67,375
RJK Beaumont June 2006 June 2013 207.2 – (28,215) (36,453) 64,668
June 2007 June 2014 319.1 47,006 – – 47,006
SAYE share option scheme
CJ Snowdon February 2006 August 2006 172.7 – – (5,470) 5,470
February 2009 August 2009 370.4 2,524 – – 2,524
RJK Beaumont February 2006 August 2006 172.7 – – (5,470) 5,470
February 2009 August 2009 370.4 2,524 – – 2,524
The market price of the Company’s shares on the date Clive Snowdon and John Beaumont exercised options under the Umeco 2001
Share Option Plan was 472.5 pence. The market price of the Company’s shares on the date Clive Snowdon and John Beaumont exercised
options under the SAYE share option scheme was 478.0 pence.
Gains made by executive Directors on the exercise of share options during the year were as follows:
Umeco 2001 SAYE share
Share Option Plan option scheme Total
£000 £000 £000
Clive Snowdon 136 17 153
John Beaumont 97 17 114
No options were granted to, or exercised by, any Director in the period between 31 March 2007 and the signing date of these financial
statements.
Certain options were granted under the 2001 Share Option Plan for which the earliest date of exercise is 7 June 2007, and for which the
three year period over which performance against the target is to be assessed ended on 31 March 2007. The remuneration committee
has formally considered performance against the target, and has concluded that the average real annual growth in earnings per share
was 13.1 per cent. All of these options will therefore be capable of exercise from 7 June 2007. 
The mid market price of the Company’s shares as quoted in the Official List of the London Stock Exchange on 31 March 2007 was 
469.75 pence and ranged between 420.5 pence and 514.5 pence during the year.
Directors’ pensions
Clive Snowdon
Total contributions payable for the year were £117,000 (2006: £98,000), of which £nil (2006: £3,000) was paid into the FURBS. During the
year £34,000 of Clive Snowdon’s salary was converted to additional pension contributions. In 2006, £2,000 of Clive Snowdon’s pension
contribution entitlement was converted to salary.
Remuneration Report
84 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 84 John Beaumont
Details of John Beaumont’s entitlements under the Umeco Scheme are as follows:
Increase in Change in
Accrued Increase in accrued pension transfer value
pension at accrued pension during the year Transfer value of accrued benefits less Director’s
31 March 2007 during the year (net of inflation) 2007 2006 Change contributions
£000 £000 £000 £000 £000 £000 £000
49 5 4 771 647 124 117 
Notes:
● the accumulated accrued pension entitlement shown is that which would be paid annually based on service to the end of the year;
● Director’s contributions of £7,000 (2006: £7,000) were paid or payable in the year under the terms of the Umeco Scheme;
● members of the Umeco Scheme have the option to pay additional voluntary contributions. No such contributions nor any resulting
benefits are included in the above table;
● normal retirement age is 63 but John Beaumont may retire at any time after reaching age 60 without his pension being reduced 
by virtue of his early retirement. Should he retire before normal retirement age, his pensionable service will cease at the date of 
his early retirement;
● pensions increase at 3.0 per cent per annum during retirement; and
● the Umeco Scheme provides for a spouse’s pension of 50 per cent of the member’s pension to be paid following the member’s death
during retirement.
The Remuneration Report was approved by the Board of Directors on 5 June 2007 and signed on its behalf by:
JG Zacharias
Chairman, remuneration committee
annual report 2007 85
71197 ACCOUNTS part 2  16/6/07  11:08  Page 85
➦ Report of the independent auditors to the members of Umeco plc
We have audited the Group and Parent Company financial statements (the ‘financial statements’) of Umeco plc for the year ended 
31 March 2007 which comprise the consolidated income statement, the consolidated and Company balance sheets, the consolidated
statement of cash flows, the consolidated statement of recognised income and expense, Company reconciliation of movements in
Shareholders’ funds and the related notes. These financial statements have been prepared under the accounting policies set out therein.
We have also audited the information in the Directors’ Remuneration Report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing the Directors’ Report and the Group financial statements in accordance with applicable 
law and International Financial Reporting Standards (‘IFRS’) as adopted by the EU, and for preparing the parent Company financial
statements and the Directors’ Remuneration Report in accordance with applicable law and UK Accounting Standards (UK Generally
Accepted Accounting Practice) are set out in the statement of Directors’ Responsibilities on page 75.
Our responsibility, is to audit the financial statements and the part of the Directors’ Remuneration Report to be audited in accordance
with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and
the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985
and, as regards the Group financial statements, Article 4 of the IAS Regulation. We also report to you whether, in our opinion, the
information given in the Directors’ Report is consistent with the financial statements. The information given in the Directors’ Report
includes that specific information presented in the Chairman’s Statement,  the Chief Executive’s Review and the Finance Director’s
Review that is cross-referred from the Review of the Group’s business section of the Directors’ Report.
In addition we report to you if in our opinion, the Company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and other
transactions is not disclosed.
We review whether the Corporate Governance Statement reflects the Company’s compliance with the nine provisions of the 2003
Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are 
not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the
effectiveness of the Group’s corporate governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial
statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies
with the financial statements. Our reponsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the
part of the Directors’ Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgements
made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the
Group’s and Company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors’
Remuneration Report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. 
In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the
part of the Directors’ Remuneration Report to be audited.
Report of the Auditors
86 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 86 Opinion
In our opinion:
● the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the Group’s
affairs as at 31 March 2007 and of its profit for the year then ended;
● the Group financial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS
Regulation;
● the parent Company financial statements give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, 
of the state of the parent Company’s affairs as at 31 March 2007; 
● the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985; and
● the information given in the Directors’ Report is consistent with the financial statements.
KPMG Audit Plc 5 June 2007
Chartered Accountants
Registered Auditor
Birmingham
annual report 2007 87
71197 ACCOUNTS part 2  16/6/07  11:08  Page 87
➦ Umeco Composites is a provider of a complete range of advanced composite materials and specialist chemical products
principally to the aerospace, motor sport, automotive and wind energy markets
Chief Executive Andrew Moss
Finance Director Mike Giles
Director, Business Development Mike Cooke
ADVANCED COMPOSITES GROUP
Advanced Composites Group Limited, Advanced Composites Group, Inc., Advanced Composites Group SA (Pty) Limited
Supply and development of advanced composites materials principally to the motor sport & automotive and aerospace & defence industries
www.acg.co.uk
Group Managing Director Jonathan Mabbitt
Group Finance Director Mark Malitskie
Group Technical Director Ebby Shahidi
President – ACG Group Inc Adrian Potts
Group Commercial Director Nigel Blatherwick
AEROPIA 
Aeropia Limited, Aeropia, Inc., Aeropia Logistik GmbH
Distributor of lubricants, chemicals, composite materials, adhesives, sealants and coatings principally to the aerospace industry
www.aeropia.com
Managing Director Steve Rice
Finance Director Peter Necchi
Operations Director John Keating
Sales Director Phil Lutterloch
Managing Director Andreas von Loessl
– Aeropia Logistik
AEROVAC SYSTEMS 
Aerovac Systems Limited, Aerovac Systemes France Sarl, Aerovac Systems Italia S.r.l.
Distributor of vacuum bagging materials principally to the aerospace and wind energy industries
www.aerovac.com
European Managing Director Tim Cooper
European Finance Director Matt Goldstein
Sales Director – UK Pam McEwen
Operations Director – UK Tony Brown
General Manager – France Didier Gal
Sales Director – France Fabienne Quintane
Director – Italy Ferruccio Bareggi
Commercial Director – Italy Bindi Fenn
Principal Businesses
88 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 88 GRPMS
GRPMS Limited, GRPMS Sweden AB
Distributor of polyester resins, glass fibre and ancillary materials to the reinforced plastic products market
www.grpms.co.uk
Managing Director Tony Bibby
Finance Director Brian Harpur
Sales Director Steve Cameron
MED-LAB LIMITED
Distributors of materials used in the overhaul and maintenance of aircraft engines and the testing of aviation fuel
www.med-lab.co.uk
Managing Director Mark Knight
Sales Director Steve King
RD TAYLOR & COMPANY LIMITED
Distributors of adhesives, sealants and lubricants principally to the aerospace & defence industry
www.rdtaylor.co.uk
Managing Director Andy Drummond
Finance Director Denise Callaghan
RICHMOND AIRCRAFT PRODUCTS, INC.
Distributor of vacuum bagging materials and structural foam products principally to the aerospace and wind energy industries
www.richmondaircraft.com
President Hisham Alameddine
Director, Business Development Joerg Hubl
Chief Financial Officer Stewart Rixson
Vice President – Operations Rick Fulton
Vice President – Sales Steve duBois
annual report 2007 89
71197 ACCOUNTS part 2  16/6/07  11:08  Page 89 Umeco Supply Chain is a leading international provider of value added distribution and supply chain outsourcing services
to customers in the aerospace & defence market. 
Chief Executive Jason Crabtree
One global company, operating under one global brand:
Pattonair Limited, Pattonair SAS, Pattonair S.r.l., Pattonair (Derby) Limited, Pattonair (Wolverhampton) Limited, 
Ulogistics GmbH, Ulogistics Canada, Inc., Abscoa, Inc., Tailored Logistics Corporation, Inc., Ulogistics (Xi’an) Trading Limited
www.pattonair.com
Facilities:
Woking, Milan, Xi’an Managing Director Nick Robins
General Manager UK Kevin Sargent
Finance Director Jonathan Moritz
General Manager – Italy Donatella Lago
Logistics Director – China Alex Smith
Derby, Paris Managing Director Wayne Hollinshead
Finance Director Mark Baldwin
Procurement Director Ian Tumanow
Customer Logistics
Account Director
– Rolls Royce John Farrow
Customer Logistics 
Account Director
– Goodrich Actuation Systems John Ravenhall
Fort Worth, Fort Wayne President Paul Fanelli
Executive Vice President
Sales & Business Development Frank Cowle
Vice President Finance Nathan Hawkins
Montreal President Chris Turner
General Manager Janique Morrissette
Vice President Finance Mario Arella
Singapore Managing Director Francis Tan
Principal Businesses
90 annual report 2007
supply chain
Pattonair
umeco supply chain
71197 ACCOUNTS part 2  16/6/07  11:08  Page 90 Umeco Repair & Overhaul is one of the largest independent component repair & overhaul providers in Europe. It is also
involved in the avionic installation & aircraft medical equipment sectors
Chief Executive John Smith
AEM LIMITED
Repair, overhaul, modification and testing of aircraft components, and provison of on-board medical equipment
www.aem.co.uk
Managing Director Graham Preston
Finance Director Keith Nicholas
Commercial Director Sue Holden
Operations Director Alan Harding
AVIONICS MOBILE SERVICES LIMITED
Installer and maintainer of aircraft electrical equipment
www.avionics-mobile.co.uk
Managing Director Colin Tiernan
ANTAVIA SAS
Repair, overhaul, modification and testing of aircraft components
www.antavia.fr
Managing Director Laurent Bouissou
All the trading subsidiaries of Umeco plc are wholly owned and are incorporated and operated in Great Britain and registered in England
and Wales, with the following exceptions:
– RD Taylor & Company Limited, which is incorporated in Scotland;
– Abscoa, Inc., Advanced Composites Group, Inc., Aeropia, Inc., and Richmond Aircraft Products, Inc., which are incorporated and operated
in the United States;
– Tailored Logistics Corporation, Inc., which is 80.0 per cent owned and incorporated and operated in the United States;
– Ulogistics Canada, Inc., which is incorporated and operated in Canada;
– Ulogistics GmbH, which is incorporated and operated in Germany;
– Aeropia Logistik GmbH, which is 74.8 per cent owned and is incorporated and operated in Germany;
– Aerovac Systemes France Sarl, Antavia SAS and Pattonair SAS, which are incorporated and operated in France;
– Aerovac Italia S.r.l. and Pattonair S.r.l., which are incorporated and operated in Italy;
– GRPMS Sweden AB, which is incorporated and operated in Sweden;
– Advanced Composites Group SA (Pty) Limited, which is incorporated and operated in South Africa; and
– Ulogistics (Xi’ an) Trading Limited, which is incorporated and operated in China.
annual report 2007 91
71197 ACCOUNTS part 2  16/6/07  11:08  Page 91
➦ Auditor
KPMG Audit Plc  
2 Cornwall Street
Birmingham 
B3 2DL
Bankers
Lloyds TSB Corporate  
Lloyds TSB Bank Plc 
25 Gresham Street
London  
EC2V 7HN
Corporate brokers
UBS Limited
1 Finsbury Avenue
London
EC2M 2PP
Investment bankers
N.M. Rothschild & Sons Limited 
67 T emple Row 
Birmingham 
B2 5LS
Corporate public relations
Hogarth Partnership Limited  
No 1 London Bridge 
London 
SE1 9BG
Registrars
Capita Registrars 
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0LA
Shareholder helpline 0870 162 3100
Lawyers
Slaughter and May  
One Bunhill Row  
London 
EC1Y 8YY
Pinsent Masons 
3 Colmore Circus 
Birmingham 
B4 6BH
Baker & Hostetler
3200 National City Center
1900 East 9th Street
Cleveland
Ohio 44114 – 3485
USA
Advisors
92 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 92
➦ UK UK
IFRS IFRS IFRS GAAP GAAP
2007 2006 2005 2004 2003
£m £m £m £m £m
Revenue 333.9 293.2 242.4 184.5 181.1
Gross profit* 92.1 77.6 62.9 43.8 41.0
Operating profit* 25.7 21.5 16.0 10.5 11.3
Net financial expense* (3.2) (3.4) (2.5) (0.9) (1.1)
Profit before tax* 22.5 18.1 13.5 9.6 10.2
Income tax* (7.2) (5.9) (4.5) (3.3) (3.4)
Profit for the year* 15.3 12.2 9.0 6.3 6.8
Minority interest (0.1) – (0.1) (0.1) (0.1)
Profit attributable to shareholders* 15.2 12.2 8.9 6.2 6.7
pence pence pence pence pence
Earnings per share* 32.2 30.9 25.2 21.7 23.7
UK
IFRS IFRS IFRS IFRS GAAP
2007 2006 2005 2004 2003
£m £m £m £m £m
Non-current assets
Property, plant & equipment 32.5 25.1 18.8 9.8 9.3
Intangible assets 100.0 96.4 77.8 36.2 37.9
Deferred tax assets 2.8 3.4 3.2 3.2 –
135.3 124.9 99.8 49.2 47.2
Current assets 180.1 154.9 118.7 91.1 91.3
Total assets 315.4 279.8 218.5 140.3 138.5
Current liabilities (99.9) (91.3) (64.3) (52.7) (62.6)
Non-current liabilities (68.3) (46.3) (68.1) (25.4) (11.8)
Total liabilities (168.2) (137.6) (132.4) (78.1) (74.4)
Net assets 147.2 142.2 86.1 62.2 64.1
Net debt (51.8) (26.7) (51.3) (21.7) (20.7)
per cent per cent per cent per cent per cent
Gearing 35.2 18.8 59.6 34.9 32.3
* Umeco uses adjusted figures as key performance indicators. The differences between adjusted and unadjusted measures of profit under
IFRS are set out in note 8 to the consolidated financial statements. Under UK GAAP, the differences between adjusted and unadjusted
measures comprised goodwill amortisation and exceptional items.
The five year summary has not been restated to apply IFRS to all periods. Had this exercise been undertaken, the principal changes to
results reported under UK GAAP would have been the reversal of goodwill amortisation and the introduction of the policy of amortising
separately identified intangible assets, and charges for share based payments.
Five Year Summary
annual report 2007 93
71197 ACCOUNTS part 2  16/6/07  11:08  Page 93
➦ Analysis of shareholdings as at 31 March 2007
Number of Per cent Number Per cent
Shares held holders of holders of shares of shares
Up to 1,000 350 34.28 147,614 0.32
1,001 to 5,000 360 35.26 871,522 1.83
5,001 to 10,000 92 9.01 663,183 1.39
10,001 to 50,000 112 10.97 2,596,398 5.46
50,001 to 100,000 27 2.64 1,959,481 4.12
100,001 and over 80 7.84 41,324,478 86.88
1,021 100.00 47,562,616 100.00
Institutions and companies 478 46.82 44,085,601 92.69
Individuals, including Directors 543 53.18 3,477,015 7.31
1,021 100.00 47,562,616 100.00
Financial calendar
Ex-dividend date for 2007 final dividend 4 July 2007
Record date for 2007 final dividend 6 July 2007
Annual General Meeting 25 July 2007
Payment date for 2007 final dividend 3 August 2007
Announcement of 2007 interim results 7 November 2007
Record date for 2007 interim dividend November 2007
Payment date for 2007 interim dividend December 2007
Financial year end 31 March 2008
Announcement of 2008 results June 2008
Information on shareholdings, including details of how to arrange for dividends to be paid by direct credit transfer, can be found on the
Group’s website at www.umeco.com
Shareholder Information and Financial Calendar
94 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 94
➦ Notice is hereby given that the Annual General Meeting of the Company will be held at The Falstaff Hotel, 16 – 20 Warwick New Road,
Leamington Spa, Warwickshire, CV32 5JQ on Wednesday 25 July 2007 at 12 noon for the purposes of considering and, if thought fit,
passing the following resolutions as Ordinary Resolutions in the case of resolutions 1 to 11 and as Special Resolutions in the case of
resolutions 12 and 13:
Ordinary Business
1. To receive and adopt the financial statements of the Company for the year to 31 March 2007 together with the report of the
Directors thereon.
2. To approve and adopt the Directors’ Remuneration Report for the year to 31 March 2007.
3. To declare a final dividend of 10.0 pence per 25 pence ordinary share in respect of the year to 31 March 2007.
4. To re-elect Brian Dennis McGowan as a Director of the Company. Brian McGowan joined the Group in April 1997 as non-executive
Chairman and is a member of the remuneration committee. He was appointed Chairman of Rentokil Initial PLC in May 2004 and 
is also non-executive Chairman of Catalyst Corporate Finance Limited. He was a co-founder of Williams plc, and has also been
Chairman of House of Fraser plc and Chairman of Burnfield PLC.
5. To re-elect Clive John Snowdon as a Director of the Company. Clive Snowdon joined the Group in April 1997 and has a broad
industrial background with significant experience in both distribution and manufacturing. Previously he was Managing Director of
Burnfield PLC and has held senior positions with Vickers PLC and Hawker Group PLC. In September 2006, he was elected as a Director
of the Midlands Aerospace Alliance and, in May 2007, he was appointed a non-executive Director of Hill & Smith Holdings PLC.
6. To elect Stephen Clive Bird as a Director of the Company. Stephen Bird joined the Board in October 2006 as a non-executive Director.
He has extensive experience in high technology industries having held a number of senior management positions with Black and
Decker Europe, Unipart Group and Technicolor Group. He is currently Divisional Managing Director of the Weir Group PLC’s Clear
Liquid Division.
7. To re-appoint KPMG Audit Plc as auditors of the Company.
8. To authorise the Board of Directors to determine the remuneration of the auditors of the Company.
9. That the Board be and it is hereby generally and unconditionally authorised in substitution for the authority conferred on it on 
25 July 2006 to exercise all powers of the Company to allot relevant securities (within the meaning of Section 80 of the Companies
Act 1985) up to an aggregate nominal amount of £3,963,551.25, which represents approximately 33 per cent of the current issued
share capital, which authority shall expire at the conclusion of the Annual General Meeting of the Company in 2008 (unless
previously revoked or varied by the Company in general meeting) save that the Company may before such expiry make an offer or
agreement which would or might require relevant securities to be allotted after such expiry and the Board may allot relevant
securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired.
Notice of Annual General Meeting
annual report 2007 95
71197 ACCOUNTS part 2  16/6/07  11:08  Page 95 Special Business
10. That:–
(A) Subject to the approval of HM Revenue and Customs (‘HMRC’), the Umeco Sharesave Scheme (the ‘SAYE Scheme’), a copy of the
rules of which has been produced in draft to this Meeting and for the purposes of identification only, initialled by the Chairman
and a summary of the principal terms of which is set out in the notes to this resolution, be and is hereby approved and
established; and
(B) the Directors be and they are hereby authorised:-
(i) to do all such acts and things as may be necessary or expedient to give effect to the SAYE Scheme, including making any
further or consequential amendments as may be required by HMRC to ensure that the SAYE Scheme is approved by them;
and
(ii) to exercise the powers of the Company to establish other schemes based on the SAYE Scheme but modified to take
account of local tax, exchange control and securities laws provided that any shares issued or which might be issued under
such other schemes are treated as counting against the overall limitations on the issue of new shares as set out in the
SAYE Scheme.
11. That:–
(A) The Umeco US Employee Stock Purchase Plan (the ‘ESPP’), a copy of the rules of which has been produced in draft to this
Meeting and for the purposes of identification only, initialled by the Chairman and a summary of the principal terms of which 
is set out in the notes to this resolution, be and is hereby approved and established; and
(B) the Directors be and they are hereby authorised:-
(i) to do all such things and acts as may be necessary or expedient to give effect to the ESPP including amending the ESPP in
such manner as the Directors may consider necessary or appropriate or as may be required to ensure tha the ESPP meets 
all relevant US statutory and regulatory requirements and is accepted by the US Internal Revenue Service as meeting the
conditions in Section 423 of the US Internal Revenue Code 1986 provided that no such amendment may be made if, in the
opinion of the Directors, it would cause the ESPP to conflict in any material respect with the summary of the ESPP set out
in the notes to this resolution or would materially prejudice the interests of shareholders; and
(ii) to exercise the powers of the Company to establish other schemes based on the ESPP but modified to take account of local
tax, exchange control and securities laws provided that any shares issued or which might be issued under such other
schemes are treated as counting against the overall limitations on the issue of new shares set out in the ESPP .
Notice of Annual General Meeting
96 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 96 12. That, subject to the passing of resolution 9, the Board be and it is hereby empowered, pursuant to Section 95 of the Companies Act
1985, to allot equity securities (within the meaning of Section 94 of the said Act) for cash, pursuant to the authority conferred by the
previous resolution, as if sub-Section (1) of Section 89 of the said Act did not apply to any such allotment, provided that this power
shall be limited to:
(A) the allotment of equity securities in connection with a rights issue, open offer or any other pre-emptive offer in favour of ordinary
shareholders where the equity securities respectively attributable to the interests of ordinary shareholders on a fixed record date
are proportionate (as nearly as may be) to the respective numbers of ordinary shares held by them (subject to such exclusions or
other arrangements as the Board may deem necessary or expedient to deal with fractional entitlements or legal or practical
problems arising in any overseas territory, the requirements of any regulatory body or stock exchange or any other matter
whatsoever); and
(B) the allotment (otherwise than pursuant to sub-paragraph (A) above) of equity securities up to an aggregate nominal value of 
£594,532.50, which represents approximately 5 per cent of the current issued share capital;
and shall expire on at the conclusion of the Annual General Meeting of the Company in 2008, save that the Company may before
such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Board
may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
13. That the Company be and is hereby generally and unconditionally authorised for the purpose of Section 166 of the Companies Act
1985 to make one or more market purchases (within the meaning of Section 163 of said Act) of ordinary shares of 25 pence each in
the capital of the Company (‘Ordinary Shares’) provided that:
(A) the maximum aggregate number of Ordinary Shares hereby authorised to be purchased is 4,756,261 (representing approximately
10 per cent of the Company’s issued Ordinary Share capital);
(B) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is an amount equal to 105 per cent of 
the average middle market quotations for an Ordinary Share taken from the daily official list of the London Stock Exchange 
for the five business days immediately preceding the day on which the Ordinary Share is purchased;
(C) the minimum price (exclusive of expenses) which may be paid for an Ordinary Share is 25 pence per share;
(D) unless previously renewed, varied or revoked, the authority hereby conferred shall expire at the conclusion of the Annual General
Meeting of the Company to be held in 2008 or 12 months from the date of passing of this resolution whichever shall be the
earlier; and
(E) the Company may make a contract or contracts to purchase Ordinary Shares under the authority hereby conferred prior to the 
expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a
purchase of Ordinary Shares in pursuance of any such contact or contracts.
annual report 2007 97
71197 ACCOUNTS part 2  16/6/07  11:08  Page 97 By Order of the Board
SJ BOWERS
Company Secretary
Umeco plc
Concorde House
24 Warwick New Road
Leamington Spa
Warwickshire
United Kingdom
CV32 5JG
25 June 2007
1. A member entitled to attend and vote at the above Meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote on 
his behalf. Such proxy need not be a member of the Company.
2. Forms of proxy, if used, must be lodged with the Proxy Processing Centre, Telford Road, Bicester, OX26 4LD or by hand at Capita Registrars, 
The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, no later than 12 noon on Monday 23 July 2007. Copies of all service contracts
of Directors will be available for inspection at the registered office of the Company during normal business hours from the date of this
notice until the date of the Meeting and at the place of Meeting from 11.30am until the conclusion of the Meeting.
3. The Company, pursuant to Regulation 41 of the Uncertified Securities Regulations 2001, specifies that only those shareholders registered on
the register of members as at 6.00pm on Monday 23 July 2007 shall be entitled to attend or vote at the Annual General Meeting in respect
of the number of shares registered in their name at that time. Changes to entries on the register of members after 6.00pm on Monday
23 July 2007 shall be disregarded in determining the rights of any person to attend the meeting.
4. Any person who has sold or transferred his shares in the Company should pass this document and its enclosures to the person through
whom the sale or the transfer was effected for transmission to the purchaser or the transferee.
5. Resolutions 9 and 12 seek to renew the Directors’ authority given at the last Annual General Meeting relating to the issue and allotment of
ordinary shares. Resolution 9 authorises the Directors to allot ordinary shares up to an amount not exceeding 33 per cent of the Company’s
issued ordinary share capital without having to obtain prior approval from shareholders on each occasion. Resolution 12 authorises the
Directors to allot ordinary shares for cash up to an amount which represents approximately 5 per cent of the issued ordinary share capital
without first being required to offer such shares to existing shareholders.
6. Resolutions 10 and 11 seek approval for the establishment of the following new employee share schemes:
● the Umeco Sharesave Scheme (providing for the grant of options which qualify for favourable UK tax treatment along similar lines to
the Company’s current savings related share option scheme); and
● the Umeco US Employee Stock Purchase Plan (providing for the grant of options to acquire shares to employees based in the US in a
manner intended to qualify for favourable US tax treatment whilst operating in a similar manner to a savings related share option
scheme).
The principal terms of these schemes are summarised in the Appendix to these notes.
Resolutions 10 and 11 also seek your authority for the Directors to establish further share incentive plans for the benefits of executives and
employees resident in jurisdictions other than the UK and the US. Any such new scheme will be based on a scheme previously approved by
shareholders, but modified to take account of local tax, exchange control or securities laws in overseas territories. Any shares over which options
are granted under any such overseas scheme would count towards the overall limits on the issue of new shares applicable to the scheme on
which it is based.
Copies of the draft rules of the new schemes will be available for inspection at the registered office of the Company and at the offices of Pinsent
Masons at CityPoint, One Ropemaker Street, London, EC2Y 9AH during normal business office hours (Saturdays and Sundays excepted) until the
date of the Meeting and at the place of the Meeting from 11.30am until the conclusion of the Meeting.
Notice of Annual General Meeting
98 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 98 APPENDIX TO THE NOTES TO RESOLUTIONS TO BE PASSED AT THE ANNUAL GENERAL MEETING
Summary of the principal terms of the Umeco Sharesave Scheme (the ‘SAYE Scheme’) and the Umeco US Employee Stock Purchase Plan
(the ‘ESPP’) (together the ‘New Schemes’).
THESAYESCHEME
General – The SAYE Scheme is intended to qualify as an HM Revenue & Customs (‘HMRC’) approved SAYE share option scheme which
satisfies the provisions of Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003. It provides for the grant of tax-favoured
options linked to an HMRC approved fixed term savings contract for 3, 5 or 7 years (a ‘Savings Contract’). On the completion of a Savings
Contract each participant shall have the choice whether to use the proceeds of the Savings Contract to exercise his or her option and
acquire shares in the Company (‘Shares’) or withdraw the monies for his or her own use. Option benefits are not pensionable.
Eligibility – All employees or full-time directors of any member of the Group, who are resident or ordinarily resident in the UK, and have
been in employment for a minimum period determined by the Directors (not exceeding five years), and any other employees nominated
by the Directors.
Limit on the Issue of New Shares – The number of Shares in respect of which rights to subscribe may on any day be granted under 
or for the purposes of the SAYE Scheme, when added to the number of Shares issued or which remain issueable pursuant to rights to
subscribe Shares granted under or for the purposes of the New Schemes or any other employees’ share scheme established by the
Company in the period of 10 years ending on that day, shall not exceed 10 per cent of the issued ordinary share capital of the Company.
Rights to acquire Shares issued or to be issued out of treasury will count towards these limits.
Invitations – Invitations to participate in a Savings Contract and to making monthly savings between £5 and £250 may be issued within 
a 42 day period after HMRC has given formal approval to the SAYE Scheme. Subsequent invitations can normally be issued within a 
42 day period following the fourth day after any announcement of results for any period. In exceptional circumstances, invitations can be
issued at other times. No invitations may be issued following the tenth anniversary of the SAYE Scheme receiving shareholder approval.
Exercise Price – The exercise price shall be determined by the Directors, but shall not be less than 80 per cent of the average of the 
middle market quotations of a Share as derived from the Daily Official List, for the three consecutive Dealing Days last preceding 
the Invitation Date.
Exercise of Options – Options may normally only be exercised within six months of the maturity of the relevant Savings Contract. Earlier
exercise is permitted within six months of leaving employment by reason of injury, disability, redundancy or reaching the age of 60 
with or without retiring, or if the optionholder’s employer ceases to be a member of the Umeco group of companies (the ‘Group’) or 
an associated company. In the event an optionholder dies, his personal representatives may exercise an option within twelve months
thereafter. Options may be exercised early in the event of a take-over, amalgamation, reconstruction, or voluntary winding-up of the
Company. In the event of early exercise, options may only be exercised to the extent of funds already held under the employee’s 
Savings Contract.
THE ESPP
General – The ESPP is intended to qualify as a tax-favoured US employee stock purchase plan under Section 423 of the US Internal
Revenue Code 1986 (the ‘Code’). Each participant will be invited to authorise his or her employer to make deductions from his or her
after-tax salary over successive periods of up to 27 months which are then held on behalf of the employee. At the end of that period, 
the monies may be used to acquire Shares unless the participant decides otherwise.
Limit on the Issue of New Shares – The number of Shares in respect of which rights to subscribe may on any day be granted under or for
the purposes of the ESPP when added to the number of Shares issued or which remain issueable pursuant to rights to subscribe Shares
granted under or for the purposes of the New Schemes or any other employees’ share scheme established by the Company in the period
of 10 years ending on that day, shall not exceed 10 per cent of the issued ordinary share capital of the Company.
annual report 2007 99
71197 ACCOUNTS part 2  16/6/07  11:08  Page 99 Eligible Employees – Any employee of the Company or a participating company who has been employed for a minimum of two years,
works at least five months in a year for the Group, and is not disqualified by the Code, may participate.
Price Payable for Shares – The price payable is determined by the Directors before the start of the saving period however it may not be
less than the lower of:
● 85 per cent of the closing price of a Share as quoted on the London Stock Exchange on the day of grant; and
● 85 per cent of the closing price of a Share as quoted on the London Stock Exchange on the day of exercise.
Limitation on Participation – There is a statutory limit on the maximum value of Shares that a participant may purchase in any 
calendar year under the ESPP . This is currently US$25,000 (applied to the value of the Shares on the first day of each savings period). 
For the purposes of compliance with US Revenue requirements there is also an overall limit of 15 million Shares which may be 
purchased by all participants under the ESPP .
Provisions Common to both New Schemes
Expiry of Schemes – No invitations may be issued or options granted under either of the New Schemes after 25 July 2017.
Variation of Share Capital – In the event of a variation in the ordinary share capital of the Company, the Directors may adjust the number,
amount or description of Shares subject to any option and/or the exercise price. In the case of any variation other than a subdivision
consolidation or capitalisation issue the Company’s auditors or other independent advisors must confirm in writing that any adjustment
proposed is fair and reasonable.
Amendment of the New Schemes – The Remuneration Committee may amend the rules of the New Schemes. However, no amendments
to the benefit of participants may be made to (1) the definition of ‘employee’, (2) the individual overall limits on the grant of options,
(3) the provisions referred to as to the basis on which Shares may be acquired and the adjustment of rights upon a change in capital
structure (except for minor amendments to benefit the administration of the SAYE Scheme or ESPP to take account in a change of
legislation or to obtain or maintain favourable tax or regulatory treatment for participants or any member of the Group).
The above summaries of the principal terms of the New Schemes do not form part of the rules of either of the New Schemes so should
not be taken as affecting the interpretation of their detailed terms and conditions. The Directors reserve the right, up to the forthcoming
AGM, to make such amendments and additions to the rules of New Schemes as they consider necessary or appropriate, provided that
any such amendment or addition does not conflict in any material respect with the above summaries.
Notice of Annual General Meeting
100 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 100
➦ Shareholder Notes
annual report 2007 101
71197 ACCOUNTS part 2  16/6/07  11:08  Page 101 Shareholder Notes
102 annual report 2007
71197 ACCOUNTS part 2  16/6/07  11:08  Page 102 Vision...
Build with integrity, fairness and trust
Challenge and innovate 
Always put delivery first
Make ambition work
Umeco’s core values have enabled the Group to emerge as a
leading international provider of advanced composite materials
and supply chain and repair & overhaul services, principally to
the aerospace & defence and automotive industries.
We continue to build the Group with an open culture, enabling
us to bring fresh energy to our marketplaces.
© Ivo Rovira/Alinghi
ACG Official Supplier of Alinghi
71197 COVER  18/6/07  23:27  Page 4 Umeco plc, Concorde House, 24 Warwick New Road,
Leamington Spa, Warwickshire, United Kingdom CV32 5JG
T +44(0) 1926 331800   F +44(0) 1926 312680  
www.umeco.com
Registered number: 148635
annual report 2007
Umeco plc  annual report 2007
vision into value
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