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 2006
25607 COVER  16/6/06  12:29 am  Page 2 Financial Highlights 1
Values 2
Group at a Glance 3
Chairman's Statement 4
Chief Executive’s Review 8
Finance Director’s Review 14
Directors 18
Executive Management 20
Directors’ Report 22
Financial Statements 25
Corporate Governance 70
Statement of Directors’ Responsibilities 74
Remuneration Report 78
Report of the Auditors 84
Principal Businesses 86
Advisors 90
Five Year Summary 91
Shareholder Information and Financial Calendar 92
Notice of Annual General Meeting 93
Umeco has emerged as a leading innovator in distribution,
supply chain management and repair & overhaul services to the
aerospace & defence industries, building a group of companies
that harness new methods for enhancing their customers’
Umeco has also significantly expanded its manufacturing
interests in advanced composite materials for a growing range
of applications in its core aerospace and defence markets and in
other high performance technology industries such as motor
sport & automotive and wind energy.
Welcome to
Front cover image of "MP4-21 courtesy of ACG as Official Supplier to Team McLaren Mercedes"
25607 COVER  16/6/06  12:29 am  Page 4
performance and profitability. annual report 2006 1
Operating profit* (£m)
21.5
 UP 34 per cent
Profit before tax* (£m)
18.1
 UP 34 per cent
Earnings per share* (p)
30.9
 UP 23 per cent
Dividend per share (p)
14.50
 UP 9 per cent
Financial Highlights
Umeco Components is a leading international provider of value-added distribution 
and supply chain outsourcing services primarily to OEM customers in the aerospace 
& defence markets. With its specialisation in the supply of small components and
sophisticated IT systems, significant operational, cost and working capital benefits can
be enjoyed by its growing global customer base
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
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 Aeromedic Innovations which
supplies and maintains on-board medical kits and therapeutic oxygen equipment
principally to airlines
Umeco Components
48 per cent of revenue
Umeco Composites
45 per cent of revenue
Umeco Repair & Overhaul
7 per cent of revenue
Abscoa Pattonair Ulogistics
Advanced Composites Group   Aeropia  Aerovac Systems     GRPMS     Med-Lab     RD Taylor     Richmond Aircraft Products
AEM Avionics Mobile Services Aeromedic Innovations
Revenue (£m)
293.2
 UP 21 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.
25607 FRONT SECTION  15/6/06  10:43 pm  Page 1 2 annual report 2006 
Values
BUILD WITH INTEGRITY, FAIRNESS AND TRUST 
CHALLENGE AND INNOVATE 
ALWAYS PUT DELIVERY FIRST
MAKE AMBITION WORK
These are positive business building principles for us, fundamental to
our success. We believe that our integrity, our fairness in decisions
and our ability to earn trust, and give trust unequivocally to those
who deserve it, are dynamic values.
They give us an open culture. They enable us to move fast to exploit
opportunities, to say yes if it’s viable, to keep things simple, to avoid
shocks and surprises, to face issues decisively, to make strategic
choices knowing exactly where we stand, and letting others know
exactly what to expect from us.
Our winning edge is our ability to see things differently, to question,
to challenge the status quo. We bring fresh energy to an established
market.
Our success depends on our ability to identify where new value can
be created, to encourage the search for new products and services, to
endorse bold strategies within our Group, to win new alliances, acquire
successful businesses and attract farsighted people to our side.
In this way we innovate constantly.
We believe that reliability is the keystone of profitable relationships,
the quality that endures market cycles over the long term. We run a
tight ship to ensure we deliver everything we promise, or allow to be
expected of us, among customers, suppliers, employees and
shareholders. 
We want reliability in delivery to be one of the first things
people say about our businesses.
We believe peoples’ ambition is the best engine for profitable
growth. We are determined to remain a Group where talented,
ambitious people flourish, where the entrepreneurial instinct is
strong. We welcome measured risk. 
We believe we must motivate people continuously to find new
opportunities, decide quickly, reward success and prize
determination and passion for business in our people.
Build with integrity, fairness and trust Always put delivery first
Challenge and innovate Make ambition work
25607 FRONT SECTION  15/6/06  10:43 pm  Page 2 annual report 2006 3
Umeco Components
2006 2005
Revenue £141.4 m £122.7 m
Operating profit* £7.2 m £5.2 m
Operating margin* 5.1 per cent 4.2 per cent
Employees 532 443
Group at a Glance
Umeco Composites
2006 2005
Revenue £131.4 m £101.9 m
Operating profit* £11.9 m £9.0 m
Operating margin* 9.1 per cent 8.8 per cent
Employees 673 598
Umeco Repair & Overhaul
2006 2005
Revenue £20.4 m £17.8 m
Operating profit* £2.4 m £1.8 m
Operating margin* 11.8 per cent 10.1 per cent
Employees 204 183
* 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.
25607 FRONT SECTION  15/6/06  10:43 pm  Page 3 4 annual report 2006 
Results and dividend
2006 has been a busy, exciting and
successful year for Umeco. Our trading
performance continues to be robust; 
we have made a number of strategically
important acquisitions and have secured 
a major contract extension with Goodrich
Actuation Systems. In December 2005,
£48.4 million was raised by way of a rights
issue with the strong support of our
shareholders. This, together with an
extended banking facility, provides us 
with a very strong platform for further
organic growth and significant bolt-on
acquisitions in the current financial year.
Revenue in the year to 31 March 2006
was £293.2 million (2005: £242.4 million)
an increase of £50.8 million of which
£12.1 million relates to acquisitions and 
the balance of £38.7 million relates to
existing activities. The underlying increase
in revenue was 14 per cent.
Operating profits in the period rose 
by 34 per cent to £21.5 million 
(2005: £16.0 million) with margins
improving to 7.3 per cent
(2005: 6.6 per cent).
Net financial expense, excluding
revaluations of financial instruments, 
was £3.4 million (2005: £2.5 million) 
which primarily reflects the higher debt
the Group carried during the year prior 
to the rights issue.
Profit before tax was £18.1 million
(2005: £13.5 million) an increase of
34 per cent. Earnings per share were 
30.9 pence compared to 25.2 pence, an
increase of 23 per cent after adjusting for
the rights issue.
The Directors are proposing an 
increased final dividend of 9.50 pence 
(2005: 8.75 pence), making a total for the
year of 14.50 pence per ordinary share
(2005: 13.25 pence) an increase of 
9 per cent. The final dividend is payable 
on 11 August 2006 to shareholders on 
the register on 14 July 2006.
Strategic developments
During the course of the year the Group
made a number of strategic developments
across all three of our business activities.
Components
 On 31 October 2005, we acquired
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). Additional consideration of
€6.5 million (£4.5 million) is payable 
if certain profit targets are met and
full provision for the additional
consideration has been made in 
the Group’s balance sheet at
31 March 2006. The integration plan
Chairman’s Statement
Brian McGowan Chairman
25607 FRONT SECTION  15/6/06  10:43 pm  Page 4 annual report 2006 5
DEMAND IS RISING ACROSS ALL THE GROUP’S SEGMENTS
is proceeding well and trading is in line
with the Board’s expectations.
 In January 2006, we signed a
memorandum of understanding with
Xi’an Yanlaing Aircraft Manufacturing
Base in China, whereby a wholly
owned Foreign Invested Commercial
Enterprise will be established at the
base during 2006. The new company
will support the growing product
demands of Umeco’s European and
North American customers in China
and will also seek to provide similar
products and services to the buoyant
Chinese domestic market. The new
company will become fully operational
in July 2006 and initial recruitment
is underway.
 On 20 February 2006, Ulogistics 
Europe signed a major, long term
contract with Goodrich Actuation
Umeco
Revenue
£m
H2 
H1
2005
Umeco
Operating profit
£m   
H2 
H1
H2 
H1
2005
H2 
H1
2006
2006
132.7
160.5
133.7
13.1
9.9
8.4
6.1
108.7
“OUR DYNAMIC VALUES ENABLE US TO MOVE FAST AND EXPLOIT OPPORTUNITIES”
25607 FRONT SECTION  15/6/06  10:43 pm  Page 5 6 annual report 2006 
Systems to provide a complete
outsourcing solution for all its
European “C-class” requirements. 
The new contract has an initial term of
ten years and commenced in April 2006.
Composites
 In May 2005, a major capital
expenditure project was approved 
to expand the existing facility of
Advanced Composites Group in
Derbyshire, UK at a cost of 
£7.0 million. The project, which 
comes on stream this summer, is 
on time and on budget.
 On 4 July 2005, we acquired property
and other assets related to the
Scandinavian distribution activities 
of Ashland Composite Polymers for
€0.6 million (£0.5 million including
expenses). The integration into GRPMS
has gone well, trading is in line with
the Board’s expectations and new
products are being introduced into 
the region.
 In July 2005, Aerovac UK acquired the
remaining 8 per cent minority holding
in Aerovac France for £0.2 million.
Repair & Overhaul
 On 25 August 2005, we acquired
Aviation Windings for £1.6 million in
cash and also assumed its indebtedness
of £2.0 million. Additional consideration
of up to £0.5 million is payable based on
the performance of Aviation Windings
in the 12 months following completion.
The integration into AEM has been
successfully concluded and, with post
acquisition trading in line with our
initial expectations, full provision has
been made for the additional
consideration.
 On 11 November 2005, we acquired
Aeromedic Innovations for £2.1 million
in cash with additional consideration
of up to £0.7 million payable based
on performance in the year to 
31 March 2006. Post acquisition
trading is ahead of our expectations
and therefore full provision has been
made for the additional consideration.
Directors
At the Annual General Meeting held on 
28 July 2005, Osman Abdullah retired as a
non-executive Director, having been on the
Board since 1993. On 27 September 2005,
Graham Zacharias was appointed as a
non-executive Director.
John Harper, who has served Umeco
as a non-executive Director since 1995,
intends to retire from the Board at this
year’s Annual General Meeting. He has
made a significant contribution to the
development of the Group over this period
and we wish him a long and happy
retirement. He has however agreed to
Chairman’s Statement
25607 FRONT SECTION  15/6/06  10:43 pm  Page 6 annual report 2006 7
continue in his role as Chairman of the
Umeco Pension and Life Assurance Plan.
The board has instigated a search process
to identify suitably qualified candidates 
to replace John Harper.
Management and employees
Of special note was the retirement of 
Joerg Hubl, President of Richmond Aircraft
Products, in April 2006; Joerg has made an
outstanding contribution to Richmond
since 1960 and we wish him well. On
behalf of the Board I want to express 
our on-going appreciation to all of our
employees, who now number in excess 
of 1,400, for their significant efforts 
during the year.
Prospects
Umeco’s principal market, civil aerospace,
is recovering strongly with Airbus and
Boeing achieving record levels of orders for
new aircraft during 2005. This has lead 
to a rise in build rates, a trend that is
expected to continue for several years.
We have been successful in winning a
number of new outsourcing contracts
from both existing and new customers
and demand for our services remains 
at a high level.
Our major and on-going investment
in the advanced composites market is
delivering excellent returns, despite a
shortage of some key raw materials,
and demand for our broadening range
of products and services is growing
significantly across a number of
market segments.
In the last two financial years Umeco has
delivered high rates of growth from our
market leading positions and we continue
to strive to develop the Group in a
disciplined manner. We are extending our
international presence into China and the
Far East and are investing heavily in
capacity to meet the growing demand 
for our products and services. With our
enlarged financial capacity we continue 
to seek bolt-on acquisitions, but will only
acquire businesses if we believe they 
will improve the overall performance 
of the Group.
The combination of these factors gives 
me considerable confidence in Umeco’s
prospects for the current financial year
and for the longer term.
Brian McGowan
Chairman
6 June 2006
“OUR WINNING EDGE IS OUR ABILITY TO SEE THINGS DIFFERENTLY”
25607 FRONT SECTION  15/6/06  10:43 pm  Page 7 8 annual report 2006 
Operations
Revenue for the year was £293.2 million
(2005: £242.4 million) an increase of 
21 per cent; excluding the impact of 
recent acquisitions the underlying rate 
of growth was 14 per cent. Acquisitions
completed during the year accounted for
additional revenue of £12.1 million.
Against this, foreign exchange rate
movements, principally the US dollar and
the Euro against sterling, had the effect of
increasing reported revenue; at constant
exchange rates revenue would have been
£2.6 million lower.
Growth has been achieved across all
our business segments, reflecting the
recovery in the civil aerospace market,
significant growth in the demand for
our composite materials, particularly
from the wind energy market, and
additional volumes on existing and
new contracts.
Operating profit at £21.5 million
(2005: £16.0 million) increased by 
34 per cent, and by 23 per cent on an
underlying basis. Our operating margin
rose to 7.3 per cent (2005: 6.6 per cent)
reflecting the good margins of the
businesses recently acquired and
operational gearing. Whilst there have
been significant increases in certain 
raw material prices, we have largely 
been successful in passing these on
to customers.
Umeco Components
2006 2005
£ million £ million
Revenue 141.4 122.7
Operating profit 7.2 5.2
Umeco Components is a leading
international provider of value-added
distribution and supply chain outsourcing
services primarily to OEM customers in
the aerospace & defence markets. With 
its specialisation in the supply of small
components and its sophisticated IT
systems, significant operational, cost and
working capital benefits can be enjoyed 
by its growing global customer base.
Revenue increased in the year by
15 per cent, or by 10 per cent on an
underlying basis. The rise in revenue was
partially held back by the re-organisation 
of the electronic components activity in
January 2006 after a period of falling
demand. As a result, the industrial products
business unit was sold to management
whilst the aerospace products unit was
integrated into Pattonair and is now
expected to grow in the current year
following the securing of new franchises.
Operating profit increased in the period 
by 38 per cent, and by 27 per cent on an
underlying basis. This significant increase
in profitability arises from the recovery in
the civil aerospace market, an initial five
Chief Executive’s Review
Clive Snowdon Chief Executive
“Growth has been
achieved in all our 
market segments”
25607 FRONT SECTION  15/6/06  10:44 pm  Page 8 annual report 2006 9
months’ contribution from Provest and
also reflects action taken to improve
margins through focused procurement
and cost control. The underlying result
was adversely affected by the very poor
results from Compstock prior to the 
re-organisation already referred to.
Pattonair in both the UK and France has
performed strongly since the management
changes made in September 2004 and 
Nick Robins, who heads these operations,
has also become responsible for integrating
Provest into a broader European distribution
business unit. The integration programme is
on schedule and considerable efforts have
been made to enhance Provest’s operations,
business development and financial
reporting systems. On 1 April 2006, Provest
changed its trading name to Pattonair.
Ulogistics Europe continues to expand its
relationship with Rolls-Royce plc, which had
a very successful 2005 finishing the year
with a record order book. A number of new
projects are planned for the current financial
year which will further broaden the scope
and scale of this very important contract.
As a consequence of Umeco Components
securing the contract with Goodrich
Actuation Systems in February 2006,
Pattonair’s trading activities with Goodrich
have been transferred to Ulogistics as 
from April. The renewed and expanded
agreement means that Ulogistics 
Europe has become responsible for the
management of the enlarged contract
with Goodrich Actuation Systems and a
dedicated team has been established to
ensure the successful implementation and
development of this project. The contract
is currently operating from an additional
leased property adjacent to the main
Ulogistics operation in Derby, and plans are
in place to acquire a new, larger freehold
property in the area during 2006, to house
both of these growing businesses.
“WE BELIEVE PEOPLES’ AMBITION IS THE BEST ENGINE FOR PROFITABLE GROWTH”
Umeco
Components
Revenue
£m
H2 
H1
2005
Umeco
Components
Operating profit
£m   
H2 
H1
H2 
H1
2005
H2 
H1
2006
2006
63.5
77.9
67.6
5.0
3.4
2.2
1.8
55.1
25607 FRONT SECTION  15/6/06  10:44 pm  Page 9 10 annual report 2006 
It is encouraging to report that Pattonair
has already secured a number of new
contracts to replace the Goodrich revenues
transferred to Ulogistics.
Ulogistics North America, which manages
an important contract with Bombardier
Aerospace in Montreal, had a successful 
year aided by the provision of a number of
additional services, and is now actively
engaged with the customer on the planning
for a further roll-out of this contract.
Abscoa and TLC have now been integrated
and a number of senior management
changes were made during the second 
half year to further develop the key North
American market.
Umeco Components has recruited a
Singapore based managing director for
Asia who will be responsible for the
establishment of the new Chinese
distribution facility. A sales office in Madrid
is planned in the current financial year to
support customer relationships in the
Spanish aerospace market.
Umeco Composites
2006 2005
£ million £ million
Revenue 131.4 101.9
Operating profit 11.9 9.0
Umeco Composites provides a broad range
of advanced composite materials and
specialist chemical products principally to
the aerospace, motorsport & automotive
and wind energy markets. A full range of
value-added outsourcing services is
provided to major customers.
Revenue increased in the period by 
29 per cent, or 21 per cent on an
underlying basis, with all businesses
delivering good growth.
Operating profits rose by 32 per cent, or 
26 per cent on an underlying basis.
This significant growth in revenue and
profits reflects the increasing use of
advanced composite materials in a
number of markets including aerospace,
automotive and wind energy, and the
recovery in the civil aerospace market.
ACG had a very successful year in both the
UK and US, with an increase in revenues of
over 22 per cent on an annualised basis. 
Its closing order book at the end of March
was £15.1 million, a year-on-year increase 
of £7.3 million. Profits were strongly ahead
as a result of operational gearing. The
business was able to pass on most of the
higher raw material prices that arose during
the year as a result of the growing shortage
of certain grades of carbon fibre. ACG was
able to maintain deliveries to existing
customers whilst new business opportunities
were selectively secured in order to ensure
the highest level of customer service.
Chief Executive’s Review
“Growth in revenue
and profits reflects 
the increasing use of
advanced composite
materials”
25607 FRONT SECTION  15/6/06  10:44 pm  Page 10 annual report 2006 11
The major capital expenditure programme
to expand the capacity of ACG’s UK facility
is drawing to a successful close and comes
on stream this summer. The new facility
will comprise an enlarged composites
manufacturing and technology centre,
incorporating an extensive technical
support resource together with new resin
mixing and prepreg manufacturing
capabilities. This will enable further
revenue growth as the business was
becoming capacity constrained.
In the US, ACG has been successful in
securing a number of long term aerospace
material supply contracts with customers
including Columbia Aircraft and Scaled
Composites. Additional production capacity
is planned for the current year.
Umeco Composites’ vacuum bagging
businesses, Aerovac and Richmond,
continued to deliver high levels of revenue
and profit growth during the year. Demand
was particularly strong in the wind energy
market and a number of new contracts
were secured for materials that were
developed in house for this rapidly growing
market. Richmond enjoyed a higher level of
business with Boeing and its main partners
and is working closely with them on a
number of elements of the very important
787 programme. Aerovac France delivered
an excellent result following the
management changes made in 2004.
Umeco Composites’ aerospace chemical
distribution businesses had a solid year
reflecting the recovery in the civil aerospace
market and a number of new contract wins.
GRPMS gained UK market share in the 
year and has successfully integrated the
Scandinavian business acquired from
Ashland Composite Polymers in July 2005. 
A number of new products were
introduced during the year in both
territories.
“WE ENCOURAGE THE SEARCH FOR NEW PRODUCTS AND SERVICES”
Umeco
Composites
Revenue
£m
H2 
H1
2005
Umeco
Composites
Operating profit
£m   
H2 
H1
H2 
H1
2005
H2 
H1
2006
2006
60.3
71.1
56.2
6.6
5.5
5.3
3.5
45.7
“MP4-21 courtesy of ACG as Official Supplier to Team McLaren Mercedes”
“Courtesy of Vestas Wind Systems A/S”
25607 FRONT SECTION  15/6/06  10:44 pm  Page 11 12 annual report 2006 
Umeco Repair & Overhaul
2006 2005
£ million £ million
Revenue 20.4 17.8
Operating profit 2.4 1.8
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
Aeromedic Innovations which supplies 
and maintains on-board medical kits and
therapeutic oxygen equipment principally
to airlines. Aviation Windings, acquired in
late August 2005, has been integrated
with AEM, as will Aeromedic Innovations
during 2006.
Revenue increased in the period by 
15 per cent, or 1 per cent on an underlying
basis. Operating profits rose by 33 per cent
but fell 10 per cent on an underlying basis.
AEM had a slow start to the year and 
took steps to reduce its cost base and win
new business; these actions both proved
positive. Aviation Windings traded in line
with post acquisition expectations and
was successfully integrated into AEM. The
business will benefit from the new A380
contract secured with Thales in late 2005
and plans are in place to relocate Aviation
Windings to new premises which will
provide the capacity to meet our expected
growth from both existing and new
customers. Aeromedic Innovations has
traded ahead of initial expectations 
and was successful in winning a major
contract extension with British Airways 
in June 2006.
AMS had a strong close to the year due 
to the timing of major orders and the
availability of customers’ aircraft. During the
year AMS acquired the freehold property
from which it operates in St. Albans.
Summary
2006 was a very encouraging year for
Umeco. In the last two financial years, 
we delivered high growth in underlying
revenues and profits, and our goal is to do
so again in the current financial year. This
underlying growth will be enhanced by the
full year effect of the businesses we have
recently acquired, the new contracts we
have secured and the additional capacity
investments we have made.
During the year our order intake continued
to rise and exceeded revenue by 11 per
cent. At the end of March 2006 Umeco’s
order book stood at £143.8 million 
(2005: £120.7 million); this is based 
on customer requirements over the 
ensuing year.
Orders for new civil aircraft won by Airbus
and Boeing reached a record net level in
2005 at 2,057 (2004: 642). The result is a
substantial increase in their build rates
and we expect this favourable situation 
to continue for the medium term.
Chief Executive’s Review 
“ Acquisitions
performed ahead 
of our initial
expectations”
25607 FRONT SECTION  15/6/06  10:44 pm  Page 12 annual report 2006 13
US defence spending remains at a high
level and the development stage of the
Joint Strike Fighter continues to add to 
our revenue stream.
Demand for our broad range of composite
materials is expected to be high as the
advantages of these materials become
more widely accepted across a number 
of market segments, and as additional
aerospace qualifications are secured. The
major and on-going investment in the
advanced composites market is delivering
excellent returns, and will enable us to
continue to develop new business and
maintain high levels of customer service,
despite a shortage of some key raw
materials.
The recently announced acquisition of
South African based Aerodyne Advanced
Composites, which has a contract in
relation to the sole supply of specified
component parts to the Mercedes-Benz 
SLR McLaren super sports car, further
strengthens the Group’s relationship with
McLaren Automotive.
We continue to develop our capability to
service current and prospective customers
in China and the Far East and are looking
forward to our new facility in Xi’an coming
on stream during the summer.
Our focus for the current year is to continue
to develop the Group in a disciplined manner,
driving further growth from our existing
activities and seeking suitable bolt-on
acquisitions. The Group’s financial position
is strong, and a number of interesting
opportunities are under consideration.
However businesses will only be acquired if
we are convinced that they will improve the
overall performance of the Group.
Branding and values
Recognising that Umeco has become a
leading player in the markets in which 
we operate, we are implementing a
“WE RUN A TIGHT SHIP TO ENSURE WE DELIVER EVERYTHING WE PROMISE”
Umeco
Repair & Overhaul
Revenue
£m
H2 
H1
2005
Umeco
Repair & Overhaul
Operating profit
£m   
H2 
H1
H2 
H1
2005
H2 
H1
2006
2006
8.9
11.5
9.9
1.5
1.0
0.9
0.8
7.9
comprehensive rebranding exercise over
the next six months. The exercise will
allow us to enhance our visibility and
reputation across our growing, global
customer base whilst retaining the
essential goodwill in the Umeco brand
that we have developed over the past
years. Examples of our new brand identity
are contained in this report and will be
extensively used at our presence at the
Farnborough Air Show in July.
In parallel with this rebranding exercise
the senior management team has taken
the opportunity to define our core values.
These are the principles on which our
success has been based in recent years 
and they are set out on page 2 of this
annual report.
Clive Snowdon
Chief Executive
6 June 2006
25607 FRONT SECTION  15/6/06  10:44 pm  Page 13 14 annual report 2006 
International Financial Reporting
Standards (‘IFRS’)
The financial statements this year are
presented for the first time under IFRS.
Comparative figures for the year to
31 March 2005 have been restated in
line with the announcement released on
29 September 2005. 
Operating results
2006 2005
Revenue £ million £ million
– total 293.2 242.4
– acquisitions 12.1 –
Operating profit £ million £ million
– total 21.5 16.0
– acquisitions 1.4 –
Operating margin per cent per cent
– total 7.3 6.6
– acquisitions 11.6 –
Revenue for the year was 21 per cent higher
than last year, with acquisitions accounting
for one quarter of the increase. Operating
profits were £21.5 million, £5.5 million 
higher than the previous year, of which
acquisitions contributed £1.4 million; the
increase in the existing businesses is due 
to the strong recovery 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 7.3 per cent from 6.6 per cent helped 
by the impact of recent acquisitions and 
by the operational gearing effect of 
higher revenues.
Exchange rates
Average rates 2006 2005
US dollar 1.785 1.846
Euro 1.466 1.467
Approximately 30 per cent 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 revenue 
for the year would have been 20 per cent, 
£2.6 million lower than the reported
figure.
Net financial expense
Net financial expense, excluding
revaluations of financial instruments, rose
from £2.5 million in 2005 to £3.4 million.
Average interest rates payable in the year
were 5.8 per cent and average net debt
was £58.6 million compared with 4.6 per
cent and £50.7 million last year. Interest
was covered 6.3 times by operating profit
(2005: 6.4 times).
Finance Director’s Review
John Beaumont Finance Director
“Operating profits
were £21.5 million, 
£5.5 million higher
than the previous year”
25607 FRONT SECTION  15/6/06  10:44 pm  Page 14 annual report 2006 15
Goodwill amortisation
Following the adoption of IFRS, goodwill 
is no longer amortised but is subject to
impairment testing. The charge in the
income statement of £0.8 million 
(2005: £0.3 million) relates to the
amortisation of intangible assets arising
on acquisitions, principally the benefit of
order books and contracts on hand at the
dates of acquisition.
Significant items
Significant costs of £1.5 million were
incurred during the year including a 
£0.9 million loss on the disposal of the
general industrial business of Compstock 
as part of its re-organisation during the
year. In addition, following the extension of
the Goodrich contract, restructuring within
Umeco Components led to expenditure on
redundancies and other expenses as the
business was consolidated onto a new site
in Derby.
Profit before tax
The strong performance in the year 
lifted profit before tax to £18.1 million 
(2005: £13.5 million), an increase of
34 per cent over the previous year.
Tax
The effective tax charge on adjusted profit
was 32.8 per cent (2005: 33.3 per cent).
The lower rate is attributed to the
elimination of losses at Pattonair SAS and
to the increased proportion of UK profits
which are taxed at lower rates than those
from overseas subsidiaries.
Earnings per share
Adjusted basic earnings per share were
30.9 pence, 23 per cent higher than last
year (after adjusting for the effects of the
rights issue). Basic earnings per share 
were 27.3 pence (2005: 22.9 pence).
Dividends
An interim dividend of 5.00 pence was 
paid in December 2005 and a final 
dividend of 9.50 pence is proposed, 
making a total of 14.50 pence, a 
9 per cent increase over the previous year’s
13.25 pence. The value of the interim
dividend was £1.6 million, and the 
value of the proposed final dividend 
is £4.5 million.
“INTEGRITY, FAIRNESS AND TRUST ARE FUNDAMENTAL TO OUR SUCCESS”
Umeco
Earnings per share
pence
H2 
H1
2005
Umeco
Dividend per share
pence
   
H2 
H1
H2 
H1
2005
H2 
H1
2006
2006
18.8
15.4
9.50
5.00
9.8
8.75
12.1
4.50
25607 FRONT SECTION  15/6/06  10:44 pm  Page 15 16 annual report 2006 
Operating cash flow
2006 2005
£ million £ million
Operating profit 21.5 16.0
Significant items (1.5) (0.6)
Depreciation 3.1 2.7
Share based payments 0.3 0.2
Working capital
& retirement benefit
obligations movement (9.9) (4.5)
Operating cash flow 13.5 13.8
per cent per cent
Operating cash flow
conversion 62.8 86.3
Working capital ratio 19.8 20.7
Operating profit conversion to cash of
62.8 per cent fell from 86.3 per cent last
year following a £9.9 million increase in
working capital and retirement benefit
obligations. The working capital
movement comprised increases of
£12.3 million in inventories, £10.3 million 
in debtors and £13.7 million in creditors,
together with a reduction in retirement
benefit obligations of £1.0 million. The
additional investment in inventories
included higher buffer stocks to support
Rolls-Royce’s aftermarket business and
investment by ACG in carbon fibre which 
is in short supply. The average ratio of
working capital to revenue reduced from
20.7 per cent to 19.8 per cent, largely as a
result of higher levels of customer and
supplier funding of inventories.
Capital expenditure
Gross capital expenditure of £9.0 million
(2005: £7.5 million) was £5.9 million higher
than depreciation. Major investments in 
the year included £5.0 million at ACG for 
the new facilities in Heanor and additional
capacity in Tulsa, £0.7 million for the
acquisition of AMS’s premises in St. Albans
and £0.8 million for the refurbishment
of the Group’s headquarters in 
Leamington Spa.
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 £2.0 million 
(2005: generated £1.2 million). Tax paid 
was £1.3 million lower than the charge 
in the financial statements. This difference 
is due to tax relief on overseas goodwill
amortisation, deferred tax movements 
and the significant proportion of profits
earned in the final quarter of the year 
for which tax is paid after the year end.
Acquisitions
Expenditure on acquisitions made in 
the year, as set out in the Chairman’s
Statement, was £14.0 million 
(2005: £47.1 million) net of cash balances
acquired.
Finance Director’s Review 
“Major investments 
in the year included
new facilities and
additional capacity 
for ACG”
25607 FRONT SECTION  15/6/06  10:44 pm  Page 16 annual report 2006 17
Net indebtedness and gearing
2006 2005
£ million £ million
Net debt 26.7 51.3
per cent per cent
Gearing 18.8 59.6
Net debt decreased by £24.6 million
during the year due mainly to the proceeds
of the rights issue.
Group banking facilities were increased to
£96.5 million during the year and comprise
a US$150 million revolving credit facility
and a £10.0 million overdraft. Gearing fell
from 59.6 per cent last year to 18.8 per
cent, and debt and interest cover levels
remain well within banking covenant
limits.
Equity and shares issued
Equity attributable to equity holders of
Umeco increased from £85.7 million 
to £141.9 million. The increase includes
the profit for the year of £10.7 million, 
less dividends paid of £4.5 million, and 
the proceeds of the 4 for 9 rights issue in
December 2005 which raised £48.4 million
net of expenses and which was 
96.8 per cent taken up by shareholders. 
In addition 369,000 shares were issued 
to employees under the SAYE share option
scheme, raising £0.6 million.
Pensions
The Group operates a number of defined
contribution pension schemes together
with two defined benefit schemes, both 
of which are closed to new members. The
latest actuarial valuations of the schemes 
show a deficit of £5.5 million compared
with a deficit of £1.5 million in the
previous valuations, which were conducted
in 2002. The increase was due to changes
in inflation and mortality assumptions and
to a lower rate of return used in the
calculation of scheme liabilities. The Board
has agreed with the pension schemes’
trustees that the deficit will be funded
over 5 years and accordingly, special
payments totalling £1.0 million were 
made to the schemes during the year.
Under IFRS, the deficits under the schemes
are now recognised in the balance sheet.
The IAS19 valuation of the schemes at
31 March 2006 showed a reduction in 
the shortfall in assets to liabilities to 
£2.7 million, after associated tax relief,
from £3.4 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 net investment in overseas businesses
is largely US dollar denominated and the
Group’s net debt is also largely US dollar
based. The strengthening of the US dollar
in the year resulted in an increase in the
sterling value of net debt of £3.4 million
and this was set against the increase in
the translated value of overseas net assets
with the net surplus of £0.3 million being
credited to the translation reserve.
Interest rate risk
With most of the Group’s interest charge
being US dollar based, the strengthening
of that currency had the effect of
increasing interest costs by £0.2 million
compared with the previous year. Whilst
the Group does not hedge the currency
value of interest charges it has protected
the interest rate risk by the use of interest
rate swaps. These instruments have fixed
the base rate on the Group’s year end debt
at below 4.0 per cent and will provide
cover on the majority of the Group’s
anticipated debt during the current
financial year at an average base rate of
4.5 per cent.
John Beaumont
Finance Director
6 June 2006
“WE BRING FRESH ENERGY TO AN ESTABLISHED MARKET”
25607 FRONT SECTION  15/6/06  10:44 pm  Page 17 18 annual report 2006 
Brian McGowan (Age 61)
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 until its acquisition
by Fairey Group Plc in 1997.
Clive Snowdon (Age 52)
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.
John Beaumont (Age 59)
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. 
Michael Harper (Age 61)
Non-executive Director
Michael Harper joined the Board
in June 2002 as a non-executive
Director. He was appointed Chief
Executive of BBA Group plc in
February 2006, having served as
a non-executive Director since
February 2005. He is a non-
executive director of The Vitec
Group plc, and has served as a
non-executive chairman since
2004. He is also a non-executive
director of Ricardo plc and 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.
Directors 
25607 FRONT SECTION  15/6/06  10:44 pm  Page 18 annual report 2006 19
John Harper (Age 61)
Non-executive Director
John Harper joined the Board as
a non-executive Director in
1995. He is currently a member
of the Board of Bournemouth
University and a director of BU
Innovations Limited. He was
Finance Director of Eldridge
Pope & Co plc until February
2002, since when he has
pursued private interests, and
was also previously Finance
Director of Avon Rubber plc.
John is chairman of the
remuneration committee and a
member of the audit committee.
David Porter (Age 61)
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 55)
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 February 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.
Steve Bowers (Age 33)
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.
1
2
4
3
5
6
7
8
From left to right: 1. Brian McGowan, 2. Michael Harper, 3. Steve Bowers, 4. John Harper, 5. John Beaumont, 6. Clive Snowdon, 7. David Porter, 8. Graham Zacharias
25607 FRONT SECTION  15/6/06  10:44 pm  Page 19 20 annual report 2006 
Clive Snowdon (Age 52)
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.
John Beaumont (Age 59)
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 36)
Chief Executive – Umeco
Components
Jason Crabtree has been with
Umeco for 16 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 Components in 2000.
Andrew Moss (Age 49)
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.
Executive Management
25607 FRONT SECTION  15/6/06  10:44 pm  Page 20 annual report 2006 21
John Smith (Age 50)
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 33)
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.
1
2
3
5
6
4
From left to right: 1. Steve Bowers, 2. John Beaumont, 3. Jason Crabtree, 4. John Smith, 5. Andrew Moss, 6. Clive Snowdon
25607 FRONT SECTION  15/6/06  10:44 pm  Page 21 The Directors submit their annual report and financial statements for the year to 31 March 2006.
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 and defence markets and in other high performance technology industries such as motor sport & automotive and wind energy.
Business review
The results for the year and future prospects 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 risks affecting the Group.
Details of the results for the year are shown in the consolidated income statement on page 26. Analyses of revenue and operating profit
by segment are shown in note 1 to the consolidated financial statements.
In common with all businesses, the Group is exposed to risks associated with the markets in which it operates and attributable to the
wider social and economic environment. The Group’s principal marketplace, civil aerospace, is currently experiencing a period of growth,
however the Group’s performance could be adversely affected if conditions in this marketplace deteriorate. Such deterioration could be
caused by factors such as terrorist action or increasing oil prices. The Group also faces risks specific to its trading activities, such as the
potential loss of major customers or suppliers. The Group continues to strive to maximise service levels and conduct business with
integrity in order to minimise such risks. The nature of the Group’s transactions and funding gives rise to certain exchange rate and
interest rate risks, and these are discussed in the Finance Director’s Review.
Profits and dividends
The consolidated income statement is shown on page 26. Profit before tax was £16.1 million (2005: £12.6 million).
The Directors propose a final dividend of 9.50 pence per share, payable on 11 August 2006 to shareholders registered on 14 July 2006,
making a total for the year of 14.50 pence per share (2005: 13.25 pence).
Acquisitions
On 4 July 2005, property and other fixed assets related to distribution businesses in Sweden, Denmark and Norway were acquired from
the affiliates of Ashland Composite Polymers, a business group of Ashland Speciality Chemicals, a division of Ashland, Inc. for €0.6 million.
Aviation Windings Limited (‘ AWL ’) was acquired on 25 August 2005 for an initial cash consideration of £1.6 million, and the Group also
assumed the indebtedness of AWL of £2.0 million. Under the terms of the purchase agreement additional consideration of up to 
£0.5 million is payable based on the performance of AWL in the twelve months following completion. AWL provides highly specialised
expertise in the manufacture and repair of wound components used primarily in electric motors and generators for in-flight operations.
Aeromedic Innovations Limited (‘ AIL ’) was acquired on 11 November 2005 for an initial cash consideration of £2.1 million, an additional
consideration of up to £0.7 million is payable based on the performance of AIL in the year to 31 March 2006. AIL supplies, maintains and
overhauls on-board medical kits and therapeutic oxygen equipment principally to airlines.
Provest S.r.l. was acquired on 31 October 2005 for a maximum consideration of €20 million, of which €13.5 million was paid on
completion. A further €1.5 million will become payable in June 2006 if the earnings before interest and tax of Provest in the six months
to 31 March 2006 is equal to or greater than €1.3 million. The final payment of €5.0 million will become payable in June 2008 if 
the average annual earnings before interest and tax of Provest in the 30 month period to 31 March 2008 is equal to or greater than 
€2.7 million.  
In addition, during the year the Group purchased the remaining 8 per cent minority shareholding in Aerovac Systemes France Sarl which
it did not already own. Consideration of £0.2 million was paid.
Directors’Report
22 annual report 2006 
25607 FRONT SECTION  15/6/06  10:44 pm  Page 22 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 28 July 2005.  
These powers will expire at the conclusion of the 2006 Annual General Meeting and resolutions to renew the Directors’ powers are
therefore included within the notice of the 2006 Annual General Meeting.
SAYE share option scheme
A sixth invitation to apply for options under the Group’s Savings-related (SAYE) share option scheme was made to employees in
December 2005.  As a result, options over 288,645 shares were granted to 328 employees on 22 December 2005 at a price of 
370.4 pence, being a 20 per cent discount to the average share price of the Company on the three days prior to the date on which
invitations to join the scheme were made. 
Directors
The names of Directors at the date of this report, together with biographical details, are shown on pages 18 and 19. Graham Zacharias
was appointed a Director on 27 September 2005, and Osman Abdullah retired as a Director on 28 July 2005. Directors retire by rotation
at intervals of no more than three years, in accordance with the Combined Code.
John Beaumont and David Porter retire by rotation and, being eligible, offer themselves for re-election at the forthcoming Annual
General Meeting.  In addition, Graham Zacharias, 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.  David Porter and Graham Zacharias have letters
of appointment with the Company, and John Beaumont has a service contract with the Company.  Details of all these documents are set
out in the Remuneration Report.  John Harper is retiring at the forthcoming Annual General Meeting and will not be seeking re-election.
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.
Substantial shareholders
The Directors have been notified of the following interests of 3 per cent or more in the issued share capital of the Company as at
6 June 2006:
Number
of shares Per cent
Framlington Investment Management Limited 5,690,957 12.0
Aberforth Partners 3,920,608 8.3
Standard Life Investment Management Limited 3,349,308 7.1
Aegon UK plc 2,785,039 5.9
Merrill Lynch Global Markets & Investment Banking Group 2,783,489 5.9
Rathbone Unit Trust Management Limited 1,911,628 4.0
Morley Fund Management & Aviva plc 1,685,981 3.6
Legal and General Investment Management Limited 1,668,397 3.5
Credit Suisse Asset Management Funds (UK) Limited 1,589,825 3.4
J P Morgan Asset Management 1,547,752 3.3
annual report 2006 23
25607 FRONT SECTION  15/6/06  10:44 pm  Page 23 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 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 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 £4,000 (2005: £4,000) during the year.  The Group made no political donations
during the year.
Corporate social responsibility and environmental matters
Details of corporate social responsibility 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 2006, the Company had 10 days purchases outstanding included in
creditors (2005: 7 days).
Annual General Meeting
The Annual General Meeting will be held at 1.00 pm on Tuesday 25 July 2006 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 93 to 95.
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.
In accordance with Section 385 of the Companies Act 1985, 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
6 June 2006
Registered office:
Concorde House
24 Warwick New Road
Leamington Spa 
Warwickshire 
United Kingdom
CV32 5JG
Registration number: 148635
Website: www.umeco.com
Directors’Report
24 annual report 2006 
25607 FRONT SECTION  15/6/06  10:44 pm  Page 24 Highlights
Year to Year to
31 March 2006 31 March 2005 Change
£m £m per cent
Revenue 293.2 242.4 +21
Adjusted operating profit* 21.5 16.0 +34
Operating profit 19.2 15.1 +27
Adjusted profit before tax* 18.1 13.5 +34
Profit before tax 16.1 12.6 +28
Change
Pence Pence per cent
Adjusted earnings per share* 30.9 25.2 +23
Basic earnings per share 27.3 22.9 +19
Dividend per share 14.50 13.25 +9
* Umeco uses adjusted figures as key performance indicators. Adjusted figures are stated before amortisation of 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 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.
The results for the year to 31 March 2006 represent the Group’s first full year financial statements prepared in accordance with IFRS. 
As a consequence the 2005 results have been restated. Details of the effects of the transition to IFRS are set out in note 28 to the
consolidated financial statements.
Financial Statements 
annual report 2006 25
Contents
Consolidated Income Statement 26
Consolidated Balance Sheet 27
Consolidated Statement of Cash Flows 28
Consolidated Statement of Recognised Income and Expense 29
Accounting Policies 30
Notes to the Consolidated Financial Statements 34 
Company Balance Sheet 63 
Notes to the Company Financial Statements 64 
25607 FRONT SECTION  15/6/06  10:44 pm  Page 25 2006 2005
Notes £m £m
Revenue 1 293.2 242.4
Cost of sales (215.6) (179.5)
Gross profit 77.6 62.9
Distribution costs (5.3) (4.3)
Administrative expense (53.1) (43.5)
Operating profit 1, 3 19.2 15.1
Financial income 4 1.0 0.5
Financial expense 4 (4.1) (3.0)
Profit before tax 16.1 12.6
Income tax – UK 5 (3.5) (2.9)
Income tax – overseas 5 (1.9) (1.5)
Profit for the year 10.7 8.2
Attributable to:
Equity holders of the parent 10.7 8.1
Minority interest – 0.1
10.7 8.2
pence pence
Basic earnings per share 7 27.3 22.9
Diluted earnings per share 7 27.0 22.6
Consolidated Income Statement
For the year to 31 March 2006
26 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 26 2006 2005
Notes £m £m
Assets
Non-current assets
Property, plant & equipment 9 25.1 18.8
Intangible assets 10 96.4 77.8
Deferred tax assets 11 3.4 3.2
124.9 99.8
Current assets
Inventories 12 73.0 56.6
Trade & other receivables 13 71.0 54.7
Financial assets 0.2 –
Income tax receivable 1.2 0.5
Cash 14 9.5 6.9
154.9 118.7
Total assets 279.8 218.5
Liabilities
Current liabilities
Trade & other payables 15 (85.8) (61.2)
Income tax payable (5.2) (2.7)
Loans & borrowings 16 (35.2) (30.8)
(126.2) (94.7)
Non-current liabilities
Other payables (3.7) (3.4)
Deferred tax liabilities 11 (2.9) (2.1)
Retirement benefit obligation 22 (3.8) (4.8)
Loans & borrowings 16 (1.0) (27.4)
(11.4) (37.7)
Total liabilities (137.6) (132.4)
Net assets 142.2 86.1
Equity
Share capital 17 11.8 8.1
Share premium 18 113.6 68.3
Translation reserve 18 0.5 0.2
Retained earnings 18 16.0 9.1
Equity attributable to equity holders of the parent 141.9 85.7
Minority interest 0.3 0.4
Total equity 142.2 86.1
The financial statements were approved by the Board of Directors on 6 June 2006 and signed on its behalf by:
BD McGowan
Director
Consolidated Balance Sheet
As at 31 March 2006
annual report 2006 27
25607 ACCOUNTS  15/6/06  11:00 pm  Page 27 2006 2005
£m £m
Cash flows from operating activities
Profit for the year 10.7 8.2
Depreciation 3.1 2.7
Amortisation of intangible assets 0.8 0.3
Financial income (1.0) (0.5)
Financial expense 4.1 3.0
Share based payments expense 0.3 0.2
Income tax expense 5.4 4.4
Operating profit before changes in working capital & retirement benefit obligation 23.4 18.3
Increase in inventories (12.3) (5.7)
Increase in trade & other receivables (10.3) (6.9)
Increase in trade & other payables 13.7 7.6
(Decrease)/increase in retirement benefit obligation (1.0) 0.5
Cash generated from operations 13.5 13.8
Financial expense (3.3) (2.1)
Tax paid (4.1) (3.7)
Net cash flow from operating activities 6.1 8.0
Cash flows from investing activities
Acquisition of property, plant & equipment (8.5) (7.0)
Proceeds from sale of property, plant & equipment 0.4 0.2
Acquisition of subsidiaries, net of cash balances acquired (14.0) (47.1)
Net cash flow from investing activities (22.1) (53.9)
Cash flows from financing activities
Proceeds from the issue of share capital 49.0 20.7
Drawdown of bank loans 24.1 59.8
Repayment of bank loans (50.9) (25.8)
Repayment of lease finance liabilities (0.5) (0.5)
Dividends paid to equity holders of the parent (4.5) (4.3)
Net cash flow from financing activities 17.2 49.9
Net increase in cash 1.2 4.0
Cash at start of year 6.9 3.4
Effect of exchange rate fluctuations 1.4 (0.5)
Cash at end of year 9.5 6.9
Consolidated Statement of Cash Flows
For the year to 31 March 2006
28 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 28 2006 2005
£m £m
Foreign exchange translation differences 0.3 0.2
Actuarial gain/(loss) in pension schemes 0.3 (0.3)
Actuarial loss in ACG pension scheme at acquisition – (0.8)
Income and expense recognised directly in equity 0.6 (0.9)
Profit for the year 10.7 8.2
Total recognised income and expense for the year 11.3 7.3
Value of financial instruments at 1 April 2005 on implementation of IAS39 (0.1) –
11.2 7.3
Attributable to:
Equity holders of the parent 11.3 7.2
Minority interest – 0.1
Total recognised income and expense for the year 11.3 7.3
Consolidated Statement of Recognised Income and Expense
For the year to 31 March 2006
annual report 2006 29
25607 ACCOUNTS  15/6/06  11:00 pm  Page 29 Umeco plc (the ‘Company’) is a company domiciled in the UK. The consolidated financial statements of the Company for the year to 
31 March 2006 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 6 June 2006.
Statement of compliance
The Group’s financial statements as approved by the Directors have been prepared in accordance with IFRS adopted for use in the EU
(‘Adopted IFRS’). The Company has elected to prepare its parent company financial statements in accordance with UK GAAP. These are
shown on pages 63 to 69.
An explanation of how the transition to IFRS has affected the reported financial position, financial performance and cash flows of the
Group was published on 29 September 2005 and is available on the Group’s website at www.umeco.com. These consolidated financial
statements include reconciliations of total equity and profit for the comparative period reported under UK GAAP to those reported 
under IFRS (see note 28).
Basis of preparation
The accounting policies set out on pages 30 to 33 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 exemptions allowed by IFRS1 have been taken by the Group in the preparation of its consolidated financial statements 
for the year to 31 March 2006:
 IAS32 & IAS39 – exemption from retrospective restatement of comparatives. As permitted by IFRS1, the Group has adopted 
IAS32 & IAS39 prospectively from 1 April 2005. Consequently, comparative information for the year to 31 March 2005 has been
prepared in accordance with UK GAAP. A reconciliation of total equity at 1 April 2005 following the adoption of IAS32 & IAS39 
is given in note 18;
 fair value or revaluation as deemed cost – at the date of transition, earlier revaluations have been used as the basis for deemed 
cost for properties, plant & equipment previously revalued;
 business combinations – business combinations that were announced prior to 1 April 2004 have not been restated;
 cumulative translation differences – cumulative translation differences for all foreign operations are deemed to be nil 
at 1 April 2004; and
 share based payments – IFRS2 has only been applied to awards made after 7 November 2002 and which had not fully vested at 
1 April 2005.
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.
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 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 arising on acquisitions would be recognised directly in the income statement.
Accounting Policies
For the year to 31 March 2006
30 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 30 In respect of acquisitions prior to this date, goodwill is included on the basis of its deemed cost, which represents the amount recorded
under UK GAAP on transition. The classification and accounting treatment of business combinations prior to 1 April 2004 has not been
reconsidered in preparing the Group’s opening IFRS balance sheet as at 1 April 2004. 
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. The recoverable amount is the higher of fair value less costs to sell and the value in use. An impairment loss is
recognised whenever the carrying value of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are
recognised in the income statement.
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 and contracts is 1-3 years. 
Impairment
The carrying values of the Group’s assets, 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. Impairment losses are recognised 
in the income statement.  
Revenue
Revenue represents the amounts (excluding value added tax) derived 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 are charged
to the income statement as they fall due.
For defined benefit pension schemes, the 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.
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. Pension scheme surpluses and deficits have been recognised in full in the 1 April
2004 transitional balance sheet. Following the amendment to IAS19 issued by the IASB in December 2004, all movements in the actuarial
gains and losses since transition have been recognised immediately in equity in the statement of recognised income and expense.
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 2006 31
25607 ACCOUNTS  15/6/06  11:00 pm  Page 31 Property, plant & equipment
Items of property, plant & equipment are stated at cost or deemed cost less accumulated depreciation. Certain items of property that had
been revalued to fair value on or prior to 1 April 2004, the date of transition to IFRS, are measured on the basis of deemed cost, being
the revalued amount at the date of that revaluation. 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.
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 2006
32 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 32 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.
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. Foreign
exchange differences arising from the translation into sterling of equity interests in overseas subsidiary undertakings are treated as
movements in the translation reserve.
Any differences that may have arisen since 1 April 2004, the date of transition to IFRS, are presented as a separate component of equity.
Translation differences that arose before the date of transition to IFRS in respect of all foreign entities are presented within opening
retained earnings at 1 April 2004 as permitted by IFRS1.
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 nominal 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.  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 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 2006 33
25607 ACCOUNTS  15/6/06  11:00 pm  Page 33 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. This format reflects the Group’s management and internal
reporting structure. Details of business segments can be found on pages 86 to 88.
Business segments
Revenue Adjusted operating profit Total operating profit
2006 2005 2006 2005 2006 2005
Continuing before acquisitions* £m £m £m £m £m £m
Components 135.5 122.7 6.6 5.2 5.2 4.7
Composites 127.1 101.9 11.9 9.0 11.9 8.9
Repair & Overhaul 18.5 17.8 1.6 1.8 1.5 1.5
281.1 242.4 20.1 16.0 18.6 15.1
Acquisitions* £m £m £m £m £m £m
Components 5.9 – 0.6 – – –
Composites 4.3 – – – – –
Repair & Overhaul 1.9 – 0.8 – 0.6 –
12.1 – 1.4 – 0.6 –
Total £m £m £m £m £m £m
Components 141.4 122.7 7.2 5.2 5.2 4.7
Composites 131.4 101.9 11.9 9.0 11.9 8.9
Repair & Overhaul 20.4 17.8 2.4 1.8 2.1 1.5
293.2 242.4 21.5 16.0 19.2 15.1
* Acquisitions are defined as those that occurred during the year to 31 March 2006.
2006 2005
£m £m
Total operating profit (as above) 19.2 15.1
Financial income 1.0 0.5
Financial expense (4.1) (3.0)
Profit before tax 16.1 12.6
Income tax – UK (3.5) (2.9)
Income tax – overseas (1.9) (1.5)
Profit for the year 10.7 8.2
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
34 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 34 1 Segmental reporting (continued)
2006 2005
£m £m
Segment assets
Components 136.7 89.2
Composites 141.1 103.9
Repair & Overhaul 24.5 9.0
302.3 202.1
Unallocated assets 97.3 122.1
Intersegment eliminations (119.8) (105.7)
Total assets 279.8 218.5
Segment liabilities
Components (105.7) (82.0)
Composites (56.8) (49.1)
Repair & Overhaul (17.0) (7.2)
(179.5) (138.3)
Unallocated liabilities (77.9) (99.8)
Intersegment eliminations 119.8 105.7
Total liabilities (137.6) (132.4)
Net assets 142.2 86.1
Capital expenditure
Components 1.2 3.7
Composites 5.8 2.0
Repair & Overhaul 1.0 0.2
Unallocated 1.0 1.6
9.0 7.5
Depreciation
Components 1.1 0.9
Composites 1.6 1.4
Repair & Overhaul 0.3 0.3
Unallocated 0.1 0.1
3.1 2.7
Amortisation of intangible assets
Components 0.6 –
Composites – –
Repair & Overhaul 0.2 0.3
0.8 0.3
annual report 2006 35
25607 ACCOUNTS  15/6/06  11:00 pm  Page 35 1 Segmental reporting (continued)
Geographic segments
2006 2005
Revenue by origin £m £m
UK 200.2 175.2
Rest of Europe 29.5 15.9
North America 63.5 51.3
293.2 242.4
2006 2005
Segment assets by origin £m £m
UK 165.4 144.4
Rest of Europe 33.6 11.6
North America 80.8 62.5
279.8 218.5
2006 2005
Capital expenditure by origin £m £m
UK 7.9 3.4
Rest of Europe 0.2 0.5
North America 0.9 3.6
9.0 7.5
2006 2005
Revenue by destination £m £m
UK 152.1 134.6
Rest of Europe 65.0 45.0
North America 58.1 47.9
Rest of world 18.0 14.9
293.2 242.4
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
36 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 36 2 Staff numbers and costs
2006 2005
Average numbers employed, including Directors Number Number
Components 532 443
Composites 673 598
Repair & Overhaul 204 183
Holding company 12 10
1,421 1,234
2006 2005
Aggregate payroll costs £m £m
Wages and salaries 36.9 30.8
Social security costs 3.8 3.3
Other pension costs 2.1 1.8
Equity settled transactions 0.3 0.2
43.1 36.1
Details of Directors’ remuneration and share options are set out in the Remuneration Report.
3 Operating profit
2006 2005
Operating profit is stated after charging/(crediting) £m £m
Depreciation charge on property, plant & equipment
– assets owned 2.6 2.3
– assets held under lease finance agreements 0.5 0.4
Amortisation of intangible assets 0.8 0.3
Auditors’ remuneration as auditors 0.4 0.3
Operating lease charges
– plant, machinery & vehicles 0.6 0.5
– land & buildings 1.9 1.7
(Gain)/loss on foreign exchange translation (0.1) 0.1
Significant items 1.5 0.6
In addition to audit fees shown above, non-audit fees of £0.4 million (2005: £0.4 million) were paid to the auditors and their associates
including £0.3 million (2005: £0.3 million) relating to due diligence assistance and regulatory work on acquisitions.
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. Significant items in the year to 31 March 2005 comprised re-organisation costs of £0.5
million and aborted acquisition costs of £0.1 million.
annual report 2006 37
25607 ACCOUNTS  19/6/06  12:51 pm  Page 37 4 Financial income and expense
2006 2005
Financial income £m £m
Revaluation of financial instruments 0.3 –
Interest income 0.1 –
Expected return on pension scheme assets 0.6 0.5
1.0 0.5
Financial expense £m £m
Interest on bank loans and overdrafts 3.3 2.3
Interest payable in respect of lease finance 0.1 0.1
Interest cost on pension scheme liabilities 0.7 0.6
4.1 3.0
5 Income tax expense
2006 2005
Recognised in the income statement £m £m
Current tax expense
UK tax – current year 3.6 3.2
– prior years – 0.1
Overseas tax 1.7 0.4
Current tax 5.3 3.7
Deferred tax expense
Origination and reversal of temporary differences – UK (0.1) (0.4)
Origination and reversal of temporary differences – overseas 0.2 1.1
Deferred tax 0.1 0.7
Income tax expense in the income statement 5.4 4.4
Certain tax effects of equity settled transactions have been recognised directly in equity. These effects comprise a current tax credit of 
£0.2 million and a deferred tax credit of £0.3 million. There were no equivalent effects in the year to 31 March 2005.
2006 2005
Reconciliation of effective tax rate £m £m
Profit before tax 16.1 12.6
Profit at standard rate of UK corporation tax of 30 per cent (2005: 30 per cent) 4.8 3.8
Effects of:
Expenses not deductible for tax purposes 0.2 0.2
Higher rate taxes on overseas earnings 0.4 0.2
Overseas losses not utilised for tax purposes – 0.1
Adjustments in respect of prior years – 0.1
Income tax expense 5.4 4.4
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
38 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 38 6 Dividends
The following dividends were paid by the Company during the year:
2006 2005
Pence Pence
per share £m per share £m
Previous year final 8.75 2.9 8.50 2.8
Current year interim 5.00 1.6 4.50 1.5
13.75 4.5 13.00 4.3
The following dividends were declared by the Company in respect of each year:
2006 2005
Pence Pence
per share £m per share £m
Interim 5.00 1.6 4.50 1.4
Final 9.50 4.5 8.75 2.9
14.50 6.1 13.25 4.3
The final dividend for 2006 of 9.50 pence per share was approved by the Board on 6 June 2006 and has not been included as a liability as
at 31 March 2006. The amount expected to be paid in respect of this dividend is £4.5 million. The dividend is payable on 11 August 2006
to shareholders registered on 14 July 2006.
7 Earnings per share
Earnings per share is calculated on profit attributable to equity holders of the parent of £10.7 million (2005: £8.1 million). Adjusted profit
attributable to equity holders of the parent, which provides a consistent measure of operating performance, was £12.2 million 
(2005: £8.9 million). The weighted average number of ordinary shares in issue was 39.2 million (2005: 35.3 million). The weighted 
average number of shares on a fully diluted basis was 39.6 million (2005: 35.8 million), after an adjustment for dilutive share options 
of 0.4 million (2005: 0.5 million).
The weighted average number of shares in issue has been adjusted to reflect the bonus element of the rights issue that took place during
the year. This has 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 has been made to the adjustment for dilutive share options.
annual report 2006 39
25607 ACCOUNTS  15/6/06  11:00 pm  Page 39 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 of 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 reconciled below.
2006 2005
£m £m
Operating profit
Total operating profit 19.2 15.1
Exclude:
– significant items 1.5 0.6
– amortisation of intangible assets 0.8 0.3
Adjusted operating profit 21.5 16.0
Profit before tax
Total profit before tax 16.1 12.6
Exclude:
– significant items 1.5 0.6
– amortisation of intangible assets 0.8 0.3
– revaluation of financial instruments (0.3) –
Adjusted profit before tax 18.1 13.5
Profit attributable to equity holders of the parent
Total profit attributable to equity holders of the parent 10.7 8.1
Exclude:
– significant items 1.5 0.6
– amortisation of intangible assets 0.8 0.3
– revaluation of financial instruments (0.3) –
– associated tax effects (0.5) (0.1)
Adjusted profit attributable to equity holders of the parent 12.2 8.9
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
40 annual report 2006 
25607 ACCOUNTS  19/6/06  12:47 pm  Page 40 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 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
Foreign exchange translation – – – 0.4 – 0.4
Disposals – – – (1.0) (0.4) (1.4)
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
Net book value of tangible fixed assets at 31 March 2006 included £1.3 million (2005: £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 £1.4 million (2005: £0.8 million) in respect of 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 2004 5.3 0.6 1.0 12.0 2.3 21.2
Acquisitions 1.6 0.1 – 2.5 0.2 4.4
Additions 3.4 – – 3.4 0.7 7.5
Disposals – – – (0.1) (0.8) (0.9)
At 31 March 2005 10.3 0.7 1.0 17.8 2.4 32.2
Depreciation
At 1 April 2004 0.8 0.1 0.4 8.8 1.3 11.4
Charge for the year 0.2 – 0.1 1.8 0.6 2.7
Disposals – – – (0.1) (0.6) (0.7)
At 31 March 2005 1.0 0.1 0.5 10.5 1.3 13.4
Net book value
At 31 March 2005 9.3 0.6 0.5 7.3 1.1 18.8
At 1 April 2004 4.5 0.5 0.6 3.2 1.0 9.8
annual report 2006 41
25607 ACCOUNTS  19/6/06  12:48 pm  Page 41 10 Intangible assets
Customer
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
Customer
contracts
Goodwill & orders Total
£m £m £m
Cost
At 1 April 2004 36.2 – 36.2
Acquisitions 42.5 0.3 42.8
Foreign exchange translation (0.9) – (0.9)
At 31 March 2005 77.8 0.3 78.1
Amortisation & impairment losses
At 1 April 2004 –– –
Charge for the year – 0.3 0.3
At 31 March 2005 – 0.3 0.3
Net book value
At 31 March 2005 77.8 – 77.8
At 1 April 2004 36.2 – 36.2
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
42 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 42 10 Intangible assets (continued)
Goodwill and intangible assets associated with customer contracts & 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
– Aviations Windings Limited 3.7 – 3.7
– GRPMS Scandinavia 0.1 – 0.1
– Purchase of remaining 8 per cent minority interest in Aerovac Systems 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 contracts and
relationships do not meet the criteria for separate recognition or could not be reliably measured.
Impairment tests for cash generating units containing goodwill 2006 2005
£m £m
Components 20.9 11.5
Composites 63.2 61.0
Repair & Overhaul 10.8 5.3
94.9 77.8
Included within goodwill is an amount relating to ACG of £38.3 million (2005: £37.7 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 per cent, and are based on forecasts prepared by management based on their views of the future and past
experience. On this basis no impairment write downs are required.
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
2006 2005 2006 2005 2006 2005
£m £m £m £m £m £m
Intangible assets & goodwill – – (1.9) (0.9) (1.9) (0.9)
Property, plant & equipment 0.4 0.2 (1.5) (1.5) (1.1) (1.3)
Employee benefits 1.5 1.5 – – 1.5 1.5
Working capital 2.1 1.9 (0.1) (0.1) 2.0 1.8
Deferred tax assets/(liabilities) 4.0 3.6 (3.5) (2.5) 0.5 1.1
Set off of deferred tax (0.6) (0.4) 0.6 0.4 – –
Net deferred tax assets/(liabilities) 3.4 3.2 (2.9) (2.1) 0.5 1.1
The reduction in the net deferred tax asset of £0.6 million comprises deferred tax liabilities recognised on acquisitions of £0.8 million and the
deferred tax charge in the income statement of £0.1 million, less a deferred tax credit of £0.3 million recognised directly in retained earnings.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised on tax losses of £0.2 million (2005: £0.6 million) due to the lack of certainty concerning the
quantum and timing of future years taxable profits of the companies concerned.
annual report 2006 43
25607 ACCOUNTS  15/6/06  11:00 pm  Page 43 12 Inventories
2006 2005
£m £m
Raw materials 6.4 4.7
Work in progress 1.2 0.8
Finished goods 65.4 51.1
73.0 56.6
13 Trade & other receivables
2006 2005
£m £m
Amounts falling due within one year
Trade receivables 67.4 51.3
Other receivables 1.3 1.7
Prepayments and accrued income 2.1 1.6
70.8 54.6
Amounts falling due after more than one year
Other receivables 0.2 0.1
71.0 54.7
14 Cash
2006 2005
£m £m
Bank balances and cash in hand 9.5 6.9
Bank overdrafts – –
Cash disclosed in the statement of cash flows 9.5 6.9
15 Trade & other payables
2006 2005
£m £m
Trade payables 65.0 51.5
Other tax and social security 2.9 1.9
Other payables 7.4 0.6
Accruals and deferred income 10.5 7.2
85.8 61.2
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
44 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 44 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.
2006 2005
£m £m
Current liabilities
Bank loans 34.9 30.5
Lease finance obligations 0.3 0.3
35.2 30.8
Non-current liabilities
Bank loans 0.1 26.5
Lease finance obligations 0.9 0.9
1.0 27.4
Total borrowings 36.2 58.2
All bank loans and overdrafts are unsecured and bear interest at floating rates based on LIBOR. 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
2006 2006 2006 2005 2005 2005
£m £m £m £m £m £m
Less than one year 0.3 – 0.3 0.3 – 0.3
Between two and five years 0.7 (0.1) 0.6 0.7 (0.1) 0.6
More than five years 0.3 – 0.3 0.3 – 0.3
1.3 (0.1) 1.2 1.3 (0.1) 1.2
17 Share capital
2006 2005
Ordinary shares of 25 pence Number £m Number £m
Authorised 80,000,000 20.0 46,000,000 11.5
Allotted, called up and fully paid
At start of year 32,537,723 8.1 24,397,671 6.1
Rights issue 14,462,373 3.6 8,132,254 2.0
SAYE share option scheme 368,617 0.1 7,798 –
At end of year 47,368,713 11.8 32,537,723 8.1
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 2006 and the date of these financial statements, options in respect of 14,220 shares have been
exercised in relation to the SAYE share option scheme.
annual report 2006 45
25607 ACCOUNTS  19/6/06  12:58 pm  Page 45 18 Reserves
Share Translation Retained
premium reserve earnings Total
£m £m £m £m
At 1 April 2005 (as previously reported) 68.3 0.2 9.1 77.6
Adoption of IAS32 & IAS39 – – (0.1) (0.1)
At 1 April 2005 (as restated) 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
At 1 April 2004 49.6 – 6.2 55.8
Total recognised income and expense – 0.2 7.0 7.2
Share capital issued – rights issue 18.7 – – 18.7
Cost of share based payments – – 0.2 0.2
Dividends paid – – (4.3) (4.3)
At 31 March 2005 68.3 0.2 9.1 77.6
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 2006, the reserve
for own shares within retained earnings was £0.3 million (2005: £nil) as a result of the deferred share awards made in June 2005.
19 Commitments
2006 2005
Capital commitments £m £m
Contracted 2.8 1.2
No provision has been made in the financial statements for these commitments.
Total liabilities under non-cancellable operating leases are payable as follows:
2006 2005
Land and Other Land and Other
buildings assets buildings assets
£m £m £m £m
– Within one year 1.8 0.5 1.7 0.4
– Between two and five years 5.1 0.8 5.1 0.6
– After more than five years 5.9 – 6.8 –
12.8 1.3 13.6 1.0
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
46 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 46 20 Acquisitions and disposal
On 31 October 2005, the Group acquired the entire issued share capital of Provest S.r.l., 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). Additional consideration of €6.5 million (£4.5 million) is payable if certain profit targets are met 
and full provision for the additional consideration has been 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 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 is 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 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 below 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 & orders, comprising £1.7 million in respect of Provest and £0.6 million in respect of Aeromedic Innovations.
Aeromedic Aviation
Provest Innovations Windings GRPMS
S.r.l. Limited Limited 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 at the year end is disclosed on the balance sheet within other payables. During the year, the Group also acquired
the remaining 8 per cent minority interest in Aerovac Systems France Sarl for £0.2 million. The consideration paid was represented entirely
by goodwill.
annual report 2006 47
25607 ACCOUNTS  15/6/06  11:00 pm  Page 47 20 Acquisitions and disposal (continued)
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. 
Prior to its disposal, the results of the business unit were reported within the Components business segment.
Details of the significant acquisitions made in the year to 31 March 2005, including the fair values of assets acquired, were as follows:
ACG AMS Total
Fair value of net assets acquired £m £m £m
Intangible assets – 0.3 0.3
Property, plant & equipment 4.3 0.1 4.4
Inventories 3.2 0.4 3.6
Debtors 8.3 0.2 8.5
Cash 1.0 0.3 1.3
Overdraft (0.2) – (0.2)
Bank loan (1.3) – (1.3)
Creditors due within one year (5.9) (0.2) (6.1)
Creditors due after more than one year (0.7) – (0.7)
Deferred tax liabilities (0.4) (0.1) (0.5)
8.3 1.0 9.3
Goodwill 38.2 3.7 41.9
Cost of assets acquired 46.5 4.7 51.2
Satisfied by:
Cash consideration paid 44.3 1.2 45.5
Expenses paid 2.2 0.1 2.3
Consideration accrued at end of year – 3.4 3.4
46.5 4.7 51.2
No adjustments were made to the book values of the net assets of ACG to arrive at their fair values. An additional inventory 
reserve of £0.2 million was recognised in respect of AMS, reducing the value of inventories from their book value of £0.6 million 
to the fair value of £0.4 million. In addition, intangible assets of £0.3 million were recognised in respect of AMS’ orders in hand 
at the date of acquisition.
In addition, goodwill of £0.6 million arose in respect of Aerovac Systemes France Sarl and Tailored Logistics Corporation, Inc.
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
48 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 48 21 Analysis of changes in net debt
Net debt comprises cash balances, bank loans and lease finance obligations.
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 (30.5) (2.2) (29.0) 26.8 (34.9)
Bank loans due after one year (26.5) (2.6) 29.0 – (0.1)
Lease finance obligations (1.2) – (0.5) 0.5 (1.2)
(51.3) (3.4) (0.5) 28.5 (26.7)
Foreign
exchange Other Cash
2004 translation changes flows 2005
£m £m £m £m £m
Cash 3.6 (0.1) – 3.4 6.9
Overdrafts (0.2) – – 0.2 –
3.4 (0.1) – 3.6 6.9
Bank loans due within one year (3.6) 1.0 (54.1) 26.2 (30.5)
Bank loans due after one year (20.3) 0.8 (7.0) – (26.5)
Lease finance obligations (1.2) – (0.5) 0.5 (1.2)
(21.7) 1.7 (61.6) 30.3 (51.3)
Other changes represent the draw down of bank loans and lease finance arrangements entered into during the year, bank loans taken on
with companies acquired and reclassifications of bank loans based on their due dates.
22 Retirement benefit obligation
As explained in the accounting policies set out on page 31, the Group operates several pension schemes as disclosed below:
The Umeco Pension and Life Assurance Plan (‘the Plan’) has two sections. The defined benefit section, 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
showed that the actuarial value of the defined benefit section’s assets was £8.3 million which represented 68.0 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 14.2 per cent and 4.5 per cent to 6.5 per cent of earnings respectively. With effect from 1 April
2006, the Group’s contribution rate has risen to 17.7 per cent. Contributions amounting to £0.9 million (2005: £0.2 million) were payable
to the defined benefit section of the Plan in the year, of which £15,000 (2005: £17,000) was outstanding at the year end.
The Plan 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 £0.6 million (2005: £0.5 million) were payable to this section of the Plan in the year of which £46,000 (2005: £17,000) was
outstanding at the year end.
annual report 2006 49
25607 ACCOUNTS  15/6/06  11:00 pm  Page 49 22 Retirement benefit obligation (continued)
The trustees of the Plan are chaired by John Harper, 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 Plan’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, which provides benefits
on a defined benefit basis. This scheme was closed to new entrants in 2001. The assets of the scheme are held separately from those of
the Group and responsibility for investment of the Plan’s funds has been delegated by the trustees to professional investment managers.
The trustees of the plan are chaired by Jon Mabbitt, UK Operations Director of Advanced Composites Group.
Contributions to the 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 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 
11.45 per cent and 8.65 per cent of earnings respectively. Contributions amounting to £0.5 million (2005: £0.2 million) were payable
to the scheme, of which £21,000 (2005: £12,000) 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 £0.3 million (2005: £0.2 million) were payable in respect of the year.
The Group participates in defined contribution arrangements in respect of certain businesses in North America and Europe. Contributions
to these schemes during the year totalled £0.4 million (2005: £0.3 million).
As described in the Remuneration Report, the Company operates defined contribution schemes in respect of Clive Snowdon. Total
contributions of £101,000 (2005: £66,000) were payable to these schemes for the year of which £65,000 were outstanding at the year
end (2005: £Nil).
IAS19
The information required for accounting in accordance with the requirements of IAS19 has been obtained by an updating of the actuarial
valuations referred to above, which were carried out by independent qualified actuaries. Combined values are shown for the Umeco
Pension and Life Assurance Plan and the Advanced Composites Group Pension Scheme.
The assumptions used to calculate scheme liabilities are as follows:
2006 2005
per cent per cent
Rate of increase in pensionable salaries:
– executive members 4.8 4.8
– staff members 3.9 3.8
Rate of increase of pensions in payment 2.8 2.9
Discount rate 5.0 5.3
Inflation 3.0 2.9
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 2006
50 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 50 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, which are recognised in the balance sheet, are as follows:
2006 2005
per cent £m per cent £m
Equities 8.0 8.9 8.2 6.8
Bonds 4.5 1.2 4.8 1.1
Cash 4.3 1.6 4.4 0.2
Market value of scheme assets 11.7 8.1
Present value of scheme liabilities (15.5) (12.9)
Deficit in the scheme (3.8) (4.8)
Deferred tax 1.1 1.4
Net pension liability (2.7) (3.4)
Expense recognised in administrative expenses within the income statement
2006 2005
£m £m
Charge to operating profit
Current service cost 0.6 0.6
Past service cost – –
Total operating charge 0.6 0.6
2006 2005
£m £m
(Credit)/charge to financial income and expense
Expected return on pension scheme assets (0.6) (0.5)
Interest cost on retirement benefit obligation 0.7 0.6
Net financial expense 0.1 0.1
2006 2005
£m £m
Total actuarial gains and losses recognised in the
statement of total recognised income and expense
Actual return less expected return on pension scheme assets 1.7 0.4
Experience gains and losses arising on scheme liabilities (0.2) (0.6)
Changes in assumptions underlying the present value of scheme liabilities (1.2) (0.2)
Actuarial gain/(loss) 0.3 (0.4)
annual report 2006 51
25607 ACCOUNTS  15/6/06  11:00 pm  Page 51 22 Retirement benefit obligation (continued)
Analysis of movement in retirement benefit obligation
2006 2005
£m £m
Retirement benefit obligation at start of year (12.9) (7.2)
Obligation in Advanced Composites Group scheme at acquisition – (3.8)
Current service cost (0.6) (0.6)
Interest cost on retirement benefit obligation (0.7) (0.6)
Contributions from scheme members (0.3) (0.3)
Benefits paid 0.5 0.4
Actuarial losses (1.5) (0.8)
Retirement benefit obligation at end of year (15.5) (12.9)
Change in the fair value of scheme assets during the year
2006 2005
£m £m
Fair value at start of year 8.1 4.3
Fair value of assets in Advanced Composites Group Scheme at acquisition – 2.6
Expected return on scheme assets 0.6 0.5
Contribution from employer 1.4 0.4
Contribution from scheme members 0.3 0.3
Benefits paid (0.5) (0.4)
Actuarial gains 1.8 0.4
Fair value at end of year 11.7 8.1
The amount included in the balance sheet in respect of defined benefit schemes is as follows:
2006 2005
£m £m
Present value of defined benefit obligation (15.5) (12.9)
Fair value of scheme assets 11.7 8.1
Net deficit (reported within non-current liabilities) (3.8) (4.8)
History of experience gains and losses
2006 2005
£m £m
Experience gains and losses on scheme liabilities (0.2) (0.6)
Percentage of defined benefit obligation (1.3) per cent (4.6) per cent
Difference between expected and actual return on scheme assets 1.7 0.4
Percentage of scheme assets 14.5 per cent 4.9 per cent
The Group expects to contribute approximately £1.8 million to its defined benefit schemes in the year to 31 March 2007.
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
52 annual report 2006 
25607 ACCOUNTS  15/6/06  11:00 pm  Page 52 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 2006 amounted to £0.4 million (2005: £0.4 million).
24 Share based payments
Executive share options
The Group has established the Umeco 2001 Share Option Plan, which entitles 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:
2006 2005
Weighted Weighted
average average
exercise exercise
Options price Options price
Number Pence Number Pence
At start of year 701,354 274.5 476,695 258.6
Granted during the year –– 196,517 352.4
Rights issue effect 48,930 254.1 28,142 244.2
Lapsed during the year (232,136) 262.3 ––
At end of year 518,148 254.1 701,354 274.5
Exercisable at end of year –– ––
No executive share options were exercised during the year. The executive share options outstanding at 31 March 2006 had an exercise
price range from 207.2 pence to 319.1 pence, and had a weighted average remaining contractual life of 7.6 years.
The average market price of the Company’s shares during the year was 467.2 pence (2005: 367.1 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:
2006 2005
Weighted Weighted
average average
exercise exercise
Options price Options price
Number Pence Number Pence
At start of year 709,969 237.4 439,030 218.9
Granted during the year 288,645 370.4 351,455 290.0
Rights issue effect 69,608 214.4 22,697 194.1
Exercised during the year (368,617) 172.9 (7,798) 263.3
Lapsed during the year (48,000) 262.4 (95,415) 276.9
At end of year 651,605 305.8 709,969 237.4
Exercisable at end of year 30,069 172.7 ––
annual report 2006 53
25607 ACCOUNTS  15/6/06  11:00 pm  Page 53 54 annual report 2006 
24 Share based payments (continued)
The SAYE share options outstanding at 31 March 2006 had an exercise price range from 172.7 pence to 370.4 pence, and had a weighted
average remaining contractual life of 2.3 years.
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:
2006 2005
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 62.8 142.2 86.3 134.1
Share price at grant date 301.6 418.5 352.4 331.7
Exercise price 288.4 321.2 352.4 243.4
per cent per cent per cent per cent
Expected volatility (based on historic volatility) 16.5 22.1 29.9 35.1
Risk-free interest rate 3.3 3.5 3.3 3.2
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 2006 the Group had 17 forward currency contracts outstanding 
(2005: no contracts outstanding).
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 2006, the Group
had four such contracts outstanding (2005: one contract outstanding). At 31 March 2006, the effective interest rate on the Group’s bank
loans was 4.70 per cent, and the effective interest rate on lease finance obligations was 5.00 per cent.
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 54 annual report 2006 55
25 Financial instruments (continued)
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 credit 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.
At 31 March 2006 and 31 March 2005, the fair value of the Group’s financial instruments were not materially different to the book value
of those instruments.
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 –
Interest rate swaps – expiry within two to five years 35.1 0.1 –
Interest rate swaps – expiry after more than five years 35.1 – (0.2)
Total derivative assets/(liabilities) 116.3 0.4 (0.2)
25607 ACCOUNTS  15/6/06  11:00 pm  Page 55 56 annual report 2006 
25 Financial instruments (continued)
The currency and interest rate exposure of net debt at 31 March 2006 was:
Floating
Net rate net Fixed rate
funds/(debt) funds/(debt) debt
£m £m £m
Sterling 15.0 15.4 (0.4)
(35.2) (35.2) –
Euro (6.5) (5.7) (0.8)
(26.7) (25.5) (1.2)
The equivalent figures at 31 March 2005, in accordance with UK GAAP , were:
Floating Weighted Weighted
Net rate net Fixed rate average fixed average time
debt funds/(debt) debt interest rate of fixed rate
£m £m £m Per cent Years
Sterling – 0.5 (0.5) 10.9 2.1
(42.7) 14.0 (56.7) 4.3 0.1
Euro (8.6) (7.6) (1.0) 5.2 5.1
(51.3) 6.9 (58.2) 4.4 0.2
Net monetary assets and liabilities by currency at 31 March 2006, excluding the functional currency of each operation, 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 equivalent values at 31 March 2005, in accordance with UK GAAP , were:
US dollar Euro Total
£m £m £m
Functional currency
Sterling (45.4) (8.0) (53.4)
Canadian dollar 0.3 – 0.3
Total (45.1) (8.0) (53.1)
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 56
US dollar
US dollar annual report 2006 57
25 Financial instruments (continued)
The maturity profile of the carrying amount of the Group’s borrowings is as follows:
Lease finance
Bank loans obligations Total
£m £m £m
At 31 March 2006
Within one year 34.9 0.3 35.2
Between one and two years – 0.2 0.2
Between two and five years 0.1 0.3 0.4
More than five years – 0.4 0.4
35.0 1.2 36.2
Lease finance
Bank loans obligations Total
£m £m £m
At 31 March 2005
Within one year 30.5 0.3 30.8
Between one and two years 4.8 0.2 5.0
Between two and five years 21.7 0.4 22.1
More than five years – 0.3 0.3
57.0 1.2 58.2
At 31 March 2006, 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.
Comparative period
As permitted under the transitional rules of IFRS1, the Group has adopted IAS32 & IAS39 prospectively from 1 April 2005. Comparative
information for the year to 31 March 2005 is therefore prepared in accordance with the UK GAAP requirements of FRS13.
25607 ACCOUNTS  15/6/06  11:00 pm  Page 57 58 annual report 2006 
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 86 to 88, 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 management team, including
Directors, who are responsible for planning, directing and controlling the activities of the Group are:
2006 2005
£m £m
Emoluments including social security costs 1.6 1.4
Employer pension contributions 0.2 0.1
Equity settled transactions 0.1 –
1.9 1.5
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 58 annual report 2006 59
28 Transition to IFRS
In accordance with European Union Regulations, the Group reports its consolidated results for the year to 31 March 2006 under Adopted
IFRS.  On transition to IFRS, entities are generally required to apply IFRS retrospectively, except where an exemption is available under
IFRS1.  The principal exemptions the Group has utilised in preparing its financial statements under IFRS are as follows:
● the Group has chosen to apply IFRS3 prospectively.  Accordingly acquisitions announced prior to 1 April 2004 have not been restated
for the effects of IFRS3;
● the Group has elected to take advantage of the option to apply IAS21 only to exchange differences arising after 1 April 2004.
Cumulative translation differences on foreign operations are deemed to be nil at 1 April 2004;
● the Group has chosen to apply IAS39 & IAS32 from 1 April 2005 as permitted by the transitional rules set out in IFRS1.  Accordingly,
these standards have no impact on the restatement of the financial information at the transition date, with financial instruments
continuing to be treated in accordance with UK GAAP.  The adoption of IAS39 & IAS32 on 1 April 2005 leads to the Group
recognising the cumulative effect of the difference between UK GAAP and IFRS as an opening balance sheet adjustment.  
Principal effects of adoption of IFRS
This section explains the major adjustments arising from the transition to IFRS.
a) IAS19 – retirement benefit obligations
IAS19 prescribes a similar valuation approach to FRS17, and all post-retirement benefits where the actuarial and investment risk falls on
the Group must be provided for in the Group balance sheet.  Following the amendment to IAS19 issued by the IASB in December 2004,
actuarial gains and losses since transition have been recognised immediately in equity by adjustments in the statement of recognised
income and expense.
b) IAS10 – recognition of dividends
Dividends declared after the balance sheet date are no longer recognised as a liability.
c) IFRS2 – share based payments
An expense for share based payments is recognised based on the fair value of the share award at the date the award is granted. IFRS2
applies to all share based payments granted after 7 November 2002 and which have not fully vested as at 1 January 2005.
d) IFRS3 – goodwill and intangible assets
Goodwill is no longer amortised, but is subject to annual impairment testing.  Identifiable intangible assets are recognised and amortised
over their useful lives.
e) IAS12 – income taxes
IAS12 requires all temporary differences to be provided in deferred tax.
f) IAS32 & IAS39 – financial instruments
Financial instruments are recognised at fair value, and derivative financial instruments are marked to market at each balance sheet date.
The disclosures in the remainder of this note summarise the effects of the adoption of IFRS on the Group’s balance sheets as at 31 March
2004 and 31 March 2005, and on the income statement for the year to 31 March 2005.
25607 ACCOUNTS  19/6/06  1:11 pm  Page 59 60 annual report 2006 
28 Transition to IFRS (continued)
Consolidated balance sheet as at 31 March 2004:
Restated
UK GAAP IFRS 2 IAS 19 IAS 12 IAS 10 under IFRS
£m £m £m £m £m £m
Non-current assets
Property, plant & equipment 9.8–––– 9.8
Intangible assets 36.2–––– 36.2
Deferred tax assets 2.4 – 0.8 – – 3.2
48.4 – 0.8 – – 49.2
Current assets
Inventories 48.0–––– 48.0
Trade & other receivables 39.3–––– 39.3
Income tax receivable 0.2–––– 0.2
Cash 3.6–––– 3.6
91.1–––– 91.1
Total assets 139.5 – 0.8 – – 140.3
Current liabilities
Trade & other payables (48.6) – – – 2.1 (46.5)
Income tax payable (2.0) –––– (2.0)
Loans & borrowings (4.2) –––– (4.2)
(54.8) – – – 2.1 (52.7)
Non-current liabilities
Deferred tax liabilities (0.4) – – (1.0) – (1.4)
Retirement benefit obligation – – (2.9) – – (2.9)
Loans & borrowings (21.1) –––– (21.1)
(21.5) – (2.9) (1.0) – (25.4)
Total liabilities (76.3) – (2.9) (1.0) 2.1 (78.1)
Net assets 63.2 – (2.1) (1.0) 2.1 62.2
Equity
Share capital 6.1–––– 6.1
Share premium 49.6–––– 49.6
Translation reserve ––––––
Retained earnings 7.2 – (2.1) (1.0) 2.1 6.2
Equity attributable to equity holders of the parent 62.9 – (2.1) (1.0) 2.1 61.9
Minority interest 0.3–––– 0.3
Total equity 63.2 – (2.1) (1.0) 2.1 62.2
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 60 annual report 2006 61
Consolidated balance sheet as at 31 March 2005:
Restated
under
UK GAAP IFRS2 IAS19 IFRS3 IAS12 IAS10 Reclassified IFRS
£m £m £m £m £m £m £m £m
Non-current assets
Property, plant & equipment 18.8––– – – – 18.8
Intangible assets 73.9 – – 3.9 – – – 77.8
Deferred tax assets 1.7 0.1 1.4 – – – – 3.2
94.4 0.1 1.4 3.9 – – – 99.8
Current assets
Inventories 56.6––– – – – 56.6
Trade & other receivables 54.7––– – – – 54.7
Income tax receivable 0.5––– – – – 0.5
Cash & cash equivalents 6.9––– – – – 6.9
118.7––– – – – 118.7
Total assets 213.1 0.1 1.4 3.9 – – – 218.5
Current liabilities
Trade & other payables (64.0) – – – – 2.8 – (61.2)
Income tax payable (2.7) – – – – – – (2.7)
Loans and borrowings (30.8) – – – – – – (30.8)
(97.5) – – – – 2.8 – (94.7)
Non–current liabilities
Deferred tax liabilities (0.7) – – – (1.4) – – (2.1)
Retirement benefit obligation – – (4.8) – – – – (4.8)
Loans and borrowings (27.4) – – – – – – (27.4)
Other creditors (3.4) – – – – – – (3.4)
Provisions –––– – – – –
(31.5) – (4.8) – (1.4) – – (37.7)
Total liabilities (129.0) – (4.8) – (1.4) 2.8 – (132.4)
Net assets 84.1 0.1 (3.4) 3.9 (1.4) 2.8 – 86.1
Equity
Share capital 8.1––– – – – 8.1
Share premium 68.3––– – – – 68.3
Translation reserve –––– – – 0.2 0.2
Retained earnings 7.3 0.1 (3.4) 3.9 (1.4) 2.8 (0.2) 9.1
Equity attributable to equity holders of the parent 83.7 0.1 (3.4) 3.9 (1.4) 2.8 – 85.7
Minority interest 0.4––– – – – 0.4
Total equity 84.1 0.1 (3.4) 3.9 (1.4) 2.8 – 86.1
The adoption of IAS32 & IAS39 on 1 April 2005 had the effect of reducing the Group’s net assets by £0.1 million to £86.0 million, 
as a result of financial liabilities of £0.1 million being recognised.
25607 ACCOUNTS  15/6/06  11:00 pm  Page 61 62 annual report 2006 
28 Transition to IFRS (continued)
Consolidated income statement for the year to 31 March 2005:
Restated
UK GAAP IFRS 2 IAS 19 IFRS 3 IAS 12 under IFRS
£m £m £m £m £m £m
Revenue 242.4–––– 242.4
Operating profit 11.7 (0.2) (0.2) 3.8 – 15.1
Financial income ––––––
Financial expense (2.4) – (0.1) – – (2.5)
Profit before tax 9.3 (0.2) (0.3) 3.8 – 12.6
Income tax (4.3) 0.1 0.1 0.1 (0.4) (4.4)
Profit for the year 5.0 (0.1) (0.2) 3.9 (0.4) 8.2
Notes to the Consolidated Financial Statements
For the year to 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 62 annual report 2006 63
As restated
2006 2005
Notes £m £m
Fixed assets
Tangible assets 3 2.4 1.5
Investments 2 104.5 106.8
106.9 108.3
Current assets
Debtors 4 71.1 39.6
Cash at bank and in hand 10.3 15.2
81.4 54.8
Creditors falling due within one year 5 (38.6) (41.1)
Net current assets 42.8 13.7
– due within one year (25.9) (25.0)
– debtors due after more than one year 68.7 38.7
Total assets less current liabilities 149.7 122.0
Creditors falling due after one year 6 (12.8) (40.7)
Provisions for liabilities and charges 7 (0.1) (0.1)
Net assets 136.8 81.2
Capital and reserves
Called up share capital 9 11.8 8.1
Share premium account 10 113.6 68.3
Other reserves 10 0.1 0.1
Profit and loss account 10 11.3 4.7
Equity shareholders’ funds 136.8 81.2
The financial statements were approved by the Board of Directors on 6 June 2006 and signed on its behalf by:
BD McGowan
Director
Company Balance Sheet
As at 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 63 64 annual report 2006 
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to 
the financial statements, except in respect of the following matters:
During the year, the Company adopted FRS17, FRS20, FRS21, FRS25, FRS26 and FRS28. The adoption of these standards represents 
a change in accounting policy and comparative figures have been restated accordingly. The effect of the change in accounting policy 
on adoption of FRS21 was to recognise the final proposed dividend for the year to 31 March 2005 of £2.8 million in the year to 
31 March 2006. The effect of the adoption of FRS26 was to include on the balance sheet the fair value of derivative financial instruments
that were previously not required to be recognised. As permitted by FRS26, the Company has adopted its requirements prospectively from
1 April 2005. The effect of the adoption of FRS26 was a reduction in net assets at 1 April 2005 of £0.1 million and an increase in 
net assets at 31 March 2006 of £0.2 million. The effect of the adoption of FRS20 was an increase in net assets at 1 April 2005 of 
£2.8 million and an increase in net assets at 31 March 2006 of £4.5 million.The adoption of the remaining standards set out above 
did not have any effect on the Company’s net assets as at 31 March 2005 or 31 March 2006.
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
In accordance with its transitional provisions, FRS20 has been applied to share options granted after 7 November 2002 that had not fully
vested at 1 April 2005. 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 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 64 annual report 2006 65
2 Investments
Investments in Group undertakings £m
Cost
At start of year 108.0
Transfers (17.5)
Additions 14.1
Foreign exchange translation 1.1
At end of year 105.7
Provision for impairment
At start and end of year (1.2)
Net book value
At end of year 104.5
At start of year 106.8
The principal Group undertakings are listed on pages 86 to 89. 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.
3 Tangible fixed assets
Freehold Fixtures & Motor
land & buildings equipment vehicles Total
£m £m £m £m
Cost
At start of year 1.4 0.1 0.2 1.7
Additions 0.8 0.1 0.1 1.0
At end of year 2.2 0.2 0.3 2.7
Depreciation
At start of year – 0.1 0.1 0.2
Charge for the year – – 0.1 0.1
At end of year – 0.1 0.2 0.3
Net book value
At end of year 2.2 0.1 0.1 2.4
At start of year 1.4 – 0.1 1.5
The net book value of freehold land & buildings included £0.4 million (2005: £0.4 million) in respect of land.
25607 ACCOUNTS  15/6/06  11:00 pm  Page 65 66 annual report 2006 
4 Debtors
2006 2005
£m £m
Amounts falling due within one year
Amounts owed by Group undertakings 1.5 0.7
Other debtors 0.1 –
Prepayments and accrued income 0.5 0.1
Tax recoverable 0.1 0.1
2.2 0.9
Amounts falling due after more than one year
Amounts owed by Group undertakings 68.7 38.6
Deferred tax 0.2 0.1
68.9 38.7
71.1 39.6
5 Creditors falling due within one year
As restated
2006 2005
£m £m
Bank loans 34.9 39.2
Trade creditors 0.1 0.1
Amounts owed to Group undertakings 0.1 0.1
Other creditors including tax and social security 1.2 0.1
Accruals and deferred income 2.3 1.6
38.6 41.1
Bank overdrafts are repayable on demand. Bank loans and overdrafts are unsecured.
2006 2005
Other creditors including tax and social security £m £m
Other tax and social security 0.1 –
Other creditors 1.1 0.1
1.2 0.1
6 Creditors falling due after one year
2006 2005
£m £m
Bank loans falling due
– within one to two years – 4.8
– between two and five years – 21.6
Amounts owed to Group undertakings 9.3 14.3
Other creditors 3.5 –
12.8 40.7
Notes to the Company Financial Statements
For the year to 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 66 annual report 2006 67
7 Provisions for liabilities and charges
Restructuring
provision
£m
At start and end of year 0.1
8 Deferred tax
2006 2005
£m £m
Opening net deferred tax asset 0.1 0.1
Credit for the year 0.1 –
Closing net deferred tax asset 0.2 0.1
The closing net deferred tax asset of £0.2 million (2005: £0.1 million) has been disclosed as in note 4. The timing differences comprised:
2006 2005
Deferred tax asset £m £m
Other timing differences 0.2 0.1
9 Share capital
2006 2005
Ordinary shares of 25 pence Number £m Number £m
Authorised 80,000,000 20.0 46,000,000 11.5
Allotted, called up and fully paid
At start of year 32,537,723 8.1 24,397,671 6.1
Rights issue 14,462,373 3.6 8,132,254 2.0
SAYE share option scheme 368,617 0.1 7,798 –
At end of year 47,368,713 11.8 32,537,723 8.1
Details of share options are set out in note 24 to the consolidated financial statements.
25607 ACCOUNTS  15/6/06  11:00 pm  Page 67 68 annual report 2006 
10 Reserves
Share Profit
Other premium and loss
reserves account account
£m £m £m
At 31 March 2005 (as restated) 0.1 68.3 4.7
Adoption of FRS26 – – (0.1)
At 1 April 2005 – following adoption of FRS26 0.1 68.3 4.6
Premium on shares issued – rights issue – 44.8 –
Premium on shares issued – SAYE share option scheme – 0.5 –
Retained profit for the year – – 11.5
Shares awarded under share schemes – – (0.3)
Dividends paid – – (4.5)
At end of year 0.1 113.6 11.3
11 Reconciliation of movements in shareholders’ funds
2006 2005
£m £m
Opening shareholders’ funds (as previously reported) 78.4 56.7
Effect of adoption of FRS21 2.8 2.1
Effect of adoption of FRS26 (0.1) –
Shareholders’ funds at 1 April 2005 81.1 58.8
Profit for the year 11.5 6.0
Share capital issued – rights issue 48.4 20.7
Share capital issued – SAYE share option scheme 0.6 –
Shares awarded under share schemes (0.3) –
Dividends paid (4.5) (4.3)
136.8 81.2
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 2006, this contingent liability was £0.7 million (2005: £0.6 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.
Notes to the Company Financial Statements
For the year to 31 March 2006
25607 ACCOUNTS  15/6/06  11:00 pm  Page 68 annual report 2006 69
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 2006 and 31 March
2005 were not materially different from their book values. 
All of the foreign exchange and interest rate derivatives disclosed in note 25 to the consolidated financial statements were held by 
the Company.
The Company’s borrowings denominated in foreign currency at 31 March 2006 were US dollar bank loans of £30.4 million 
(2005: £57.2 million). All of the principal borrowing facilities disclosed in note 24 to the consolidated financial statements were 
in the name of the Company.
25607 ACCOUNTS  15/6/06  11:00 pm  Page 69 Statement of compliance
The Board is firmly committed to high standards of corporate governance. During the year to 31 March 2006, the Company complied
with the provisions set out in Section 1 of the Combined Code on Corporate Governance, issued in July 2003, 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 reduces this to one year
with effect from November 2006. Details are shown in the Remuneration Report
on page 80. No other notice periods exceed one year.
As demonstrated by the amendment agreed with John Beaumont in 2004, the Board recognises current market practice for notice
periods not to exceed one year. Full compliance with the provisions of section 1 of the Code will be achieved in November 2006, at which
time the one year notice period for John Beaumont will take 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 pages 18 and 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. It
is noted that John Harper has served on the Board for more than ten years, however his Board colleagues have consistently recognised
him as being independent in his approach to the role. Brian McGowan has a shareholding of 2.4 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 was reviewed and updated during the year. 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 operating 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 on page 6, John Harper is retiring from the Board at the 2006 Annual
General Meeting and will not seek re-election. The Board has instigated an external search process to identify suitably qualified
candidates to replace Mr Harper, and expects to make an appointment not later than March 2007.
During the year the Board met eight times and each Board meeting was fully attended with the exception of the meeting in February
2006 which John Harper and Michael Harper were unable to attend.  The audit committee met on three occasions and the remuneration
Corporate Governance
70 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 70 committee met five times. The newly created nomination committee met once during the year, and will do so later in the year to
consider the results of the search process to identify a non-executive Director to replace John Harper.
The Chairman and non-executive Directors regularly discuss matters informally outside of Board meetings. In addition, meetings of the
non-executive Directors were held in March 2006, both with and without the Chairman being present. Such meetings are held on an
annual basis and are chaired by the Senior independent non-executive Director.
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 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 operating divisions, Ian Davies as commercial & finance Director of Umeco Components 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 2006.
Board Audit Nomination Remuneration
Held* Attended Held* Attended Held* Attended Held* Attended
BD McGowan 88––115 5
CJ Snowdon 88––11– –
RJK Beaumont 88––11– –
O Abdullah 33––––2 2
JM Harper 8733113 2
JS Harper 8733115 5
DR Porter 883311– –
JG Zacharias 4411––– –
* 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 John Harper and Michael Harper, together with
Graham Zacharias, who joined the committee in September 2005. 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.
annual report 2006 71
25607 BACK SECTION  15/6/06  11:05 pm  Page 71 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.
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.
Three audit committee meetings have been held during the year. These considered the results of the interim and full year audit
processes, and reviewed the Group’s transition to IFRS. At the meeting held in October 2005, the committee also considered the planning
and scope for the auditors work in respect of these financial statements.
Remuneration committee
The remuneration committee is chaired by John Harper and its other members are Brian McGowan and Michael Harper, who joined the
committee in September 2005. Osman Abdullah served on the committee until 28 July 2005. In order to avoid any compromise in the
activities of the remuneration committee, John Harper 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 comprises the non-executive Directors other than the Chairman. This committee met once during the year,
with the meeting being fully attended.
Nomination committee
The nomination committee was formed in February 2005 and 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.
Corporate Governance
72 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 72 The committee met for the first time in September 2005 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 Osman Abdullah at the 2005 Annual
General Meeting. This process led to the appointment of Graham Zacharias as non-executive Director in September 2005.
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 2005 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.
Each substantially separate issue was put to the 2005 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 2005. A separate resolution for the
approval of the Directors’ Remuneration Report was also put to the meeting. Notice of the 2005 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, and non-executive Directors are encouraged to make additional visits to the
Group’s operations in order to ensure their knowledge remains current.
In March 2006, the first formal evaluation of the performance of the Board and its committees was conducted. This evaluation was made
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 has reviewed 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. Similar evaluation processes will now be carried out on an
annual basis.
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 2006 Annual General Meeting should be supported by shareholders
since each of these Directors continues to be effective and demonstrate commitment to their roles. 
annual report 2006 73
25607 BACK SECTION  15/6/06  11:05 pm  Page 73 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. 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.
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,
the Directors are required to prepare the Group financial statements in accordance with Adopted IFRS and have elected to prepare the
parent Company financial statements in accordance with UK accounting standards.
The Group financial statements are required by law and Adopted IFRS 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 IFRS;
 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.
Corporate Governance
74 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 74 The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial
position of the parent Company and to enable them to ensure that the parent Company’s financial statements comply with the
Companies Act 1985. They have a 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.
Under applicable laws and regulations, the Directors are also responsible for preparing a directors’ report, remuneration report and
corporate governance statement that comply with that law and those regulations.
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.
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. 
annual report 2006 75
25607 BACK SECTION  15/6/06  11:05 pm  Page 75 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 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 the year. 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. The
Group is engaged in a continuing effort to improve the environmental performance of all of its businesses.
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 values
statements set out on page 2 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
Corporate Governance
76 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 76 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 have been enshrined in the Group’s new
values statements, which are set out on page 2.
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 2005.
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.
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.
annual report 2006 77
25607 BACK SECTION  15/6/06  11:05 pm  Page 77 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 John Harper as chairman, Brian McGowan and Michael Harper, 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 involvement in 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 salary survey and benchmarking information, together with input on current market practice for companies similar in size and
complexity to the Group. 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 short 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 shares awarded will have been earned as a result of performance in a particular year, full entitlement to them 
will be deferred for three years after the award has been made. An executive leaving during the 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
78 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 78 Performance related bonus
Annual 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
earnings per share and the ratio of debt to earnings before interest, tax, depreciation and amortisation (EBITDA), which is one of the
Group’s principal financial covenants with its bankers. Targets are normally set in line with the Group’s budget.
For the year to 31 March 2006, 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 in order to receive the value of these shares.
For the year to 31 March 2006, performance resulted in a bonus award for the executive Directors of 118.8 per cent of salary. Accordingly,
47.5 per cent of salary is delivered in cash and 71.3 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 under the
Plan 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.
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 82.
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.
annual report 2006 79
25607 BACK SECTION  15/6/06  11:05 pm  Page 79 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 Inland Revenue approved. Until normal retirement
date members currently contribute 6.5 per cent of salary and during the year to 31 March 2006 the Group contributed 14.2 per cent (this
rose to 17.7 per cent from 1 April 2006). 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 should John Beaumont 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 set out below.
BD McGowan 25 February 2005
CJ Snowdon 21 April 1997
RJK Beaumont 20 September 1993, amended 17 December 2004
JM Harper 25 February 2005
JS Harper 25 February 2005
DR Porter 25 February 2005
JG Zacharias 23 September 2005
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 is now required to give two years’ notice
if such notice is given before 25 November 2006, or one years’ notice if such notice is served thereafter. 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.
Remuneration Report
80 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 80 Total shareholder return
The graph below compares the Company’s total shareholder return over the five years to 31 March 2006 with that for the FTSE 
Small-cap share index and the FTSE Aerospace and Defence sector index. The base for the three data series has been taken as 100 on 
31 March 2001. The FTSE Small-cap share index was 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 Graham Zacharias) 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 1,150,000 2.4 1,075,000 3.3
CJ Snowdon 206,828 0.4 179,649 0.6
– deferred shares 34,711 0.1 – –
RJK Beaumont 117,462 0.2 100,041 0.3
– deferred shares 24,217 0.1 – –
JM Harper 28,888 0.1 20,000 0.1
JS Harper 12,255 – 11,135 –
DR Porter 3,850 – 2,666 –
JG Zacharias ––– –
The deferred shares held by Clive Snowdon and John Beaumont at the end of the year relate to awards made on 21 June 2005 under 
the terms of the Umeco Bonus Plan. In the period between 31 March 2006 and the signing date of these financial statements, 
Clive Snowdon and John Beaumont have each exercised options over 5,470 ordinary shares held under the SAYE share option scheme.
Their interests in the ordinary shares of the Company at the signing date of these financial statements, including deferred shares, are
therefore 247,009 and 147,149 respectively.
annual report 2006 81
20
40
60
80
100
120
140
160
180
200
Umeco FTSE Small-cap FTSE Aerospace and defence  
Apr-01
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
25607 BACK SECTION  15/6/06  11:05 pm  Page 81 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 2006 2005
Fees Salary Bonus Benefits Total Total
£000 £000 £000 £000 £000 £000
Chairman
BD McGowan 50 – – 31 81 80
Executive Directors
CJ Snowdon – 257 121 17 395 422
RJK Beaumont – 180 85 16 281 286
Non-executive Directors
JM Harper 20 – – – 20 18
JS Harper 25 – – – 25 20
DR Porter 30 – – – 30 20
JG Zacharias (appointed 27 September 2005) 10 – – – 10 –
O Abdullah (retired 28 July 2005) 7 – – – 7 18
142 437 206 64 849 864
The salary shown for Clive Snowdon includes £2,000 (2005: £18,000) converted from his pension contribution entitlement. 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 (2006:
£29,000, 2005: £27,000), Clive Snowdon (2006: £16,000, 2005: £15,000) and John Beaumont (2006: £14,000, 2005: £13,000).
Clive Snowdon and John Beaumont each received cash bonuses of 47.5 per cent of basic salary (2005: 80.0 per cent). Values shown in the
table above do not include the deferred share element of the annual bonus. The first awards of deferred shares were made in June 2005,
and accrued as a result of performance in the year to 31 March 2005. The values of these awards at the award date were £172,000 for
Clive Snowdon and £120,000 for John Beaumont. As a result of performance in the year to 31 March 2006, further awards of deferred
shares will be made in June 2006. These will have a value at the award date of £182,000 for Clive Snowdon and £128,000 for John
Beaumont. These amounts have accrued as a result of the growth in earnings per share achieved over the prior year, the level of debt to
EBITDA and the success of various operational improvements. The deferred share element of the annual bonus will be recognised as
remuneration upon the lifting of the restrictions attached to the deferred share award.
Directors’ share options Exercise 2006 Rights 2005
Earliest date Expiry price Number Lapsed issue Number
of exercise date Pence outstanding in year effect outstanding
Umeco 2001 Share Option Plan
CJ Snowdon June 2005 June 2012 262.3* – (70,137) – 70,137
June 2006 June 2013 207.2* 90,728 8,568 82,160
June 2007 June 2014 319.1* 67,375 – 6,362 61,013
RJK Beaumont June 2005 June 2012 262.3* – (49,935) – 49,935
June 2006 June 2013 207.2* 64,668 – 6,107 58,561
June 2007 June 2014 319.1* 47,006 – 4,439 42,567
SAYE share option scheme
CJ Snowdon February 2006 August 2006 172.7* 5,470 – 516 4,954
RJK Beaumont February 2006 August 2006 172.7* 5,470 – 516 4,954
* exercise prices adjusted for rights issue.
Remuneration Report
82 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 82 No options were granted to any Director in the period between 31 March 2006 and the signing date of these financial statements. In the
period between 31 March 2006 and the signing date of these financial statements, Clive Snowdon and John Beaumont each exercised
options over 5,470 ordinary shares held under the SAYE share option scheme.
Certain options were granted under the 2001 Share Option Plan for which the earliest date of exercise is June 2006, and for which the
three year period over which performance against the target is to be assessed ended on 31 March 2006. The remuneration committee
have formally considered performance against the target, and have concluded that the average real annual growth in earnings per share
was 8.1 per cent and that 56.4 per cent of these options will be capable of exercise. The remaining 43.6 per cent of these options will
therefore lapse on 6 June 2006.
The mid market price of the Company’s shares as quoted in the Official List of the London Stock Exchange on 31 March 2006 was 
485 pence and ranged between 383 pence and 535 pence during the year.
Directors’ pensions
Clive Snowdon
During the year, £2,000 of Clive Snowdon’s pension contribution entitlement was converted to salary (2005: £18,000). Total contributions
payable for the year were £98,000 (2005: £66,000), of which £3,000 (2005: £34,000) was paid into the FURBS.
John Beaumont
Details of John Beaumont’s entitlements under the Umeco plc Pension and Life Assurance Plan (‘the Plan’) 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 2006 during the year (net of inflation) 2006 2005 Change contributions
£000 £000 £000 £000 £000 £000 £000
44 5 4 647 557 90 83
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 (2005: £7,000) were paid or payable in the year under the terms of the Plan;
 members of the Plan 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 per cent per annum during retirement; and
 the Plan 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.
JS Harper
Chairman, remuneration committee
6 June 2006
annual report 2006 83
25607 BACK SECTION  15/6/06  11:05 pm  Page 83 Independent auditors’ report 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 to 
31 March 2006 which comprise the consolidated income statement, the consolidated and parent company balance sheets, the
consolidated statement of cash flows, the consolidated statement of recognised income and expense 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 Annual 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 pages 74 and 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 and in the reviews of the Chief Executive and Finance Director
that is cross referenced from the Business Review section of the Directors’ Report. We also 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 
FRC 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 responsibilities 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
84 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 84 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 2006 and of its profit for the year then ended;
 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 2006; 
 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; and
 the information given in the Directors’ Report is consistent with the financial statements.
KPMG Audit Plc 6 June 2006
Chartered Accountants
Registered Auditor
Birmingham
annual report 2006 85
25607 BACK SECTION  15/6/06  11:05 pm  Page 85 Umeco Components is a leading international provider of value-added distribution and supply chain outsourcing services
to customers in the aerospace & defence market
www.umeco-components.co.uk
Chief Executive Jason Crabtree
Commercial & financial Director Ian Davies
President – North America Chris Turner
Strategic procurement Director Glen Pogson
Managing Director – Asia Francis Tan
ABSCOA
Abscoa, Inc., Tailored Logistics Corporation, Inc.
Provider of inventory management and fastener distribution programmes to the aerospace & defence industry
www.abscoa.com
Executive vice president Dominic Harborne
Executive vice president – sales
& business development Frank Cowle
Vice president – finance Nathan Hawkins
Manager of project solutions –
TLC Division Jen Perkins
PATTONAIR 
Pattonair Limited, Pattonair SAS, Pattonair S.r.l.
Provider of inventory management systems, and distributor of components to the aerospace & defence industry
www.pattonair.com
Managing Director – distribution
for Europe, Middle East & Asia Nick Robins
General manager UK and France Kevin Sargent
Finance Director Jonathan Moritz
Director – distribution direct Glen Puddifoot
Director of operations & systems Ian Burley
Director of quality assurance Peter Houghton
Managing Director – 
Pattonair Electronics Jamie Whyte
Business development Director –
France Jean-Michel Tabart
General manager – Italy Lorenzo Ghiglino
Operations manager – Italy Donatella Lago
Finance director – Italy Sabrina Bosia
ULOGISTICS
Ulogistics Limited, Ulogistics GmbH, Ulogistics Canada, Inc.
Specialist provider of global inventory management solutions to the aerospace industry
www.ulogistics.co.uk
Managing Director – Europe Wayne Hollinshead
Financial Director Mark Baldwin
Director of operations & projects Jon Ravenhall
Director of material supply Ian Tumanow
Customer logistics Director Ian Dick
Director of logistics Alex Smith
Director and general manager –
North America Liliana Deisel
Vice president – operations –
North America Simon Dunn
Principal Businesses
86 annual report 2006 
25607 BACK SECTION  19/6/06  12:28 pm  Page 86 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
ADVANCED COMPOSITES GROUP
Advanced Composites Group Limited, Advanced Composites Group, Inc.
Supply and development of advanced composites materials principally to the motor sport & automotive and aerospace & defence industries
www.acg.co.uk
Group managing Director Alan Moore
Group finance Director Mark Malitskie
UK operations Director Jon Mabbitt
Group technical Director Ebby Shahidi
President – ACG Group Inc Adrian Potts
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 Italia S.r.l.
Distributor of vacuum bagging materials principally to the aerospace and wind turbine industries
www.aerovac.com
Managing Director Tim Cooper
Finance Director Matt Goldstein
Sales Director – UK Linda Arter
General manager – France Didier Gal
Sales Director – France Fabienne Carrere
Director – Italy Ferruccio Bareggi
Commercial Director – Italy Bindi Fenn
annual report 2006 87
25607 BACK SECTION  19/6/06  12:27 pm  Page 87 RICHMOND AIRCRAFT PRODUCTS, INC.
Distributor of vacuum bagging materials and structural foam products principally to the aerospace and wind turbine 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
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
Umeco Repair & Overhaul has one of the largest independent repair & overhaul facilities in Europe, and also has
operations in the avionics & aircraft medical equipment sectors
Chief Executive John Smith
AEM LIMITED
Repair, overhaul, modification and testing of aircraft components, and provider of highly specialised Aviation Windings expertise in the
manufacture & repair of wound components
www.aem.co.uk
Managing Director Graham Preston
Finance Director Keith Nicholas
Commercial Director Sue Holden
Operations Director Alan Harding
Project Director Roger Tyrie
AEROMEDIC INNOVATIONS LIMITED
Manufacturer, maintainer and overhauler of on-board medical kits and therapeutic oxygen equipment
www.aeromedicgroup.com
Managing Director Lawrence Harding
AVIONICS MOBILE SERVICES LIMITED
Installer and maintainer of aircraft electrical equipment
www.avionics-mobile.co.uk
Managing Director Colin Tiernan
Principal Businesses
88 annual report 2006 
25607 BACK SECTION  19/6/06  12:32 pm  Page 88 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% 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% owned and is incorporated and operated in Germany;
– Aerovac Systemes France Sarl 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.
annual report 2006 89
25607 BACK SECTION  15/6/06  11:05 pm  Page 89 Auditor
KPMG Audit Plc  
2 Cornwall Street
Birmingham 
B3 2DL
Bankers
Lloyds TSB Corporate  
Lloyds TSB Bank Plc 
3rd Floor  
Gresham Street
London  
EC2V 7HN
Corporate brokers
Arbuthnot Securities Limited 
Arbuthnot House 
20 Ropemaker Street
London  
EC2Y 9AR
Rowan Dartington & Co. Limited 
Colston Tower 
Colston Street
Bristol 
BS1 4RD
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 
The Registry 
34 Beckenham Road 
Beckenham  
Kent
BR3 4TU
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
90 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 90 UK UK UK
IFRS IFRS GAAP GAAP GAAP
2006 2005 2004 2003 2002
£m £m £m £m £m
Revenue 293.2 242.4 184.5 181.1 191.0
Gross profit* 77.6 62.9 43.8 41.0 40.7
Operating profit* 21.5 16.0 10.5 11.3 12.4
Net financial expense (3.4) (2.5) (0.9) (1.1) (2.3)
Profit before tax* 18.1 13.5 9.6 10.2 10.1
Income tax (5.9) (4.5) (3.3) (3.4) (3.3)
Profit for the year* 12.2 9.0 6.3 6.8 6.8
Minority interest – (0.1) (0.1) (0.1) (0.1)
Profit attributable to shareholders 12.2 8.9 6.2 6.7 6.7
pence pence pence pence pence
Earnings per share* 30.9 25.2 21.7 23.7 24.6
UK UK
IFRS IFRS IFRS GAAP GAAP
2006 2005 2004 2003 2002
£m £m £m £m £m
Non-current assets
Property, plant & equipment 25.1 18.8 9.8 9.3 9.6
Intangible assets 96.4 77.8 36.2 37.9 42.3
Deferred tax assets 3.4 3.2 3.2 – –
124.9 99.8 49.2 47.2 51.9
Current assets 154.9 118.7 91.1 91.3 87.2
Total assets 279.8 218.5 140.3 138.5 139.1
Current liabilities (126.2) (94.7) (52.7) (62.6) (54.3)
Non-current liabilities (11.4) (37.7) (25.4) (11.8) (20.7)
Total liabilities (137.6) (132.4) (78.1) (74.4) (75.0)
Net assets 142.2 86.1 62.2 64.1 64.1
Net debt (26.7) (51.3) (21.7) (20.7) (30.8)
per cent per cent per cent per cent per cent
Gearing 18.8 59.6 34.9 32.3 48.0
* 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 2006 91
25607 BACK SECTION  15/6/06  11:05 pm  Page 91 Analysis of shareholdings as at 31 March 2006
Number of Per cent Number Per cent
Shares held holders of holders of shares of shares
Up to 1,000 343 34.85 150,253 0.32
1,001 to 5,000 349 35.47 831,694 1.76
5,001 to 10,000 88 8.94 648,797 1.37
10,001 to 50,000 102 10.37 2,172,741 4.59
50,001 to 100,000 29 2.95 1,966,547 4.15
100,001 and over 73 7.42 41,598,681 87.81
984 100.00 47,368,713 100.00
Institutions and companies 425 43.19 44,487,668 93.92
Individuals, including Directors 559 56.81 2,881,045 6.08
984 100.00 47,368,713 100.00
Financial calendar
Ex-dividend date for 2006 final dividend 12 July 2006
Record date for 2006 final dividend 14 July 2006
Annual General Meeting 25 July 2006
Payment date for 2006 final dividend 11 August 2006
Announcement of 2006 interim results November 2006
Record date for 2006 interim dividend November 2006
Payment date for 2006 interim dividend December 2006
Financial year end 31 March 2007
Announcement of 2007 results June 2007
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
92 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 92 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 Tuesday 25 July 2006 at 1.00pm for the purposes of considering and, if thought fit, 
passing the following resolutions as Ordinary Resolutions in the case of resolutions 1 to 9 and as Special Resolutions in the case 
of resolutions 10 and 11:
Ordinary Business
1. To receive and adopt the financial statements of the Company for the year to 31 March 2006 together with the report of the
Directors thereon.
2. To approve and adopt the Directors’ Remuneration Report for the year to 31 March 2006.
3. To declare a final dividend of 9.50 pence per 25 pence ordinary share in respect of the year to 31 March 2006.
4. To re-elect Richard John Kirby Beaumont as a Director of the Company. 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. Age 59.
5. To re-elect David Robert Porter as a Director of the Company. 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 his retirement in 1997, since when he has pursued private interests. Age 61.
6. To elect James Graham Zacharias as a Director of the Company. 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 within BTR plc. Age 55.
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 
28 July 2005 and 18 November 2005 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 £3,948,577.75, 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 2007 (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 2006 93
25607 BACK SECTION  15/6/06  11:05 pm  Page 93 Special Business
10. That, subject to the passing of the previous resolution, 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 
£592,286.50, 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 2007, 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.
11. 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 4,738,293 (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 2007 or on 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.
Notice of Annual General Meeting
94 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 94 By Order of the Board
SJ BOWERS
Company Secretary
Umeco plc
Concorde House
24 Warwick New Road
Leamington Spa
Warwickshire
United Kingdom
CV32 5JG
23 June 2006
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 Company’s Registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, 
Kent, BR3 4TU, no later than 1.00pm on Sunday 23 July 2006. 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 1.00pm on Sunday 23 July 2006 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 1.00pm on Sunday 23 July
2006 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 10 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 10 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.
annual report 2006 95
25607 BACK SECTION  15/6/06  11:05 pm  Page 95 Shareholder Notes
96 annual report 2006 
25607 BACK SECTION  15/6/06  11:05 pm  Page 96 Financial Highlights 1
Values 2
Group at a Glance 3
Chairman's Statement 4
Chief Executive’s Review 8
Finance Director’s Review 14
Directors 18
Executive Management 20
Directors’ Report 22
Financial Statements 25
Corporate Governance 70
Statement of Directors’ Responsibilities 74
Remuneration Report 78
Report of the Auditors 84
Principal Businesses 86
Advisors 90
Five Year Summary 91
Shareholder Information and Financial Calendar 92
Notice of Annual General Meeting 93
Umeco has emerged as a leading innovator in distribution,
supply chain management and repair & overhaul services to the
aerospace & defence industries, building a group of companies
that harness new methods for enhancing their customers’
Umeco has also significantly expanded its manufacturing
interests in advanced composite materials for a growing range
of applications in its core aerospace and defence markets and in
other high performance technology industries such as motor
sport & automotive and wind energy.
Welcome to
Front cover image of "MP4-21 courtesy of ACG as Official Supplier to Team McLaren Mercedes"
25607 COVER  16/6/06  12:29 am  Page 4
performance and profitability. 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 2006
25607 COVER  16/6/06  12:29 am  Page 2