UMECO plc
Concorde House, 24 Warwick New Road, Leamington Spa, Warwickshire CV32 5JG
Telephone: 01926 331800 Facsimile: 01926 312680
www.umeco.com
annual report 2003
UMECO plc annual report 2003 Financial Highlights 2
Chairman’s Statement 3
Chief Executive’s Review 4
Finance Director’s Review 6
Board of Directors 8 
Directors’ Report 9
Corporate Governance 11
Directors’ Remuneration Report 13
Consolidated Profit and Loss Account 18
Balance Sheet 19
Consolidated Cash Flow Statement 20
Statement of Total Recognised Gains and Losses 21
Reconciliation of Movements in Shareholders’ Funds 21
Accounting Policies 22
Notes to the Financial Statements 24
Statement of Directors’ Responsibilities 39
Report of the Auditors 40
List of Principal Businesses 41
Notice of Annual General Meeting 43 UMECO provides value-added
distribution and supply chain
outsourcing services primarily to the
aerospace and defence industries.
Products supplied include aerospace
components, composite materials and
specialist chemicals.
www.umeco.com Financial Highlights
2 Results and dividend
I am delighted to report that despite the on-going difficulties in the global civil aviation
market the Group has continued its recovery since suffering the significant downturn in its
operations as a result of the terrorist attacks on 11 September 2001. 
Annual turnover was only moderately down, and pre-tax profits were marginally ahead
of the prior year. Furthermore, second half turnover was 6% higher than in the first,
and slightly higher than in the second half of the prior year, the period immediately
following the September 11 terrorist actions.  Profit before tax, goodwill amortisation and
exceptional items in the second half of the year was 15% ahead of that achieved in the first
half year, and 22% ahead of the second half of the prior year.
These improvements reflect the benefits of new contracts being implemented and existing
relationships being extended, including our long-term agreement with Rolls-Royce plc,
together with on-going actions to improve gross margins and control costs.
In the year ended 31 March 2003, turnover fell to £181.1 million (2002: £191.0 million).
Profit before tax, goodwill amortisation and exceptional items was £10.2 million (2002:
£10.1 million). The Group continues to be cash generative and net borrowings reduced by
£10.1 million during the year to £20.7 million.
Earnings per share, excluding goodwill amortisation and exceptional items, were 27.7p
(2002: 28.8p). The Directors are proposing a final dividend of 8.5p, making the total
dividend for the year of 12.5p per ordinary share (2002: 12.0p). The final dividend is payable
on 8 August 2003 to shareholders on the register on 11 July 2003.
Management and employees
On behalf of the Board I wish to express our sincere thanks to all of our employees for their
exceptional efforts in what remains a very difficult and rapidly changing market place. Our
success in winning new business is a testament to the very high level of service we continue
to deliver to our growing customer base.
Prospects
The civil aerospace market is facing an unprecedented level of challenges. Demand
for new aircraft has fallen significantly in the aftermath of the September 2001 terrorist
actions, the impact of which has been particularly severe on US carriers with several
major operators going into Chapter 11. Towards the end of the financial year passenger
numbers decreased again because of the war in Iraq and the SARS outbreak in the Far
East. It is clear the combined effect of these factors will delay any meaningful recovery in
the civil OEM market for some time to come.
It is therefore encouraging to report that demand for the Group’s products and outsourcing
services remains at a high level as customers seek to improve their operating performance.
With increasingly large scale contracts being implemented, our growing international
presence and sophisticated infrastructure are proving strategically important.
UMECO remains profitable and cash generative. This strong financial base will enable
the Group to continue to expand through winning new business and by making strategic
acquisitions.
I am therefore confident that the actions we continue to take will enhance our medium
and long-term prospects and financial performance.
Brian McGowan, Chairman
3 June 2003
Chairman’s Statement
3 Operations
Turnover for the year of £181.1 million (2002: £191.0 million)
includes a full year contribution from Abscoa compared
with ten months in the prior year, and the inclusion of
Titanox Aerospace from January 2003 as a result of the
Group taking control of the company from that date.
These two transactions account for additional turnover of
£5.2 million. Against this, adverse foreign exchange rate
movements, principally the weakening of the US dollar
against sterling, had the effect of reducing reported
turnover by £2.6 million.
On a like for like basis turnover reduced in the year by
6%; this compares favourably with the overall fall in the
aerospace market of some 25%. During the second half year
the Group began to benefit from the new contracts won in
prior periods and from the extension of our contract with
Rolls-Royce plc. Turnover in the second half year was 
£93.0 million, an increase of 6% over the first half year.
Operating profits, before goodwill amortisation and
exceptional items, at £11.3 million (2002: £12.4 million) have
followed the same pattern as sales with second half profit
of £5.9 million increasing by 11% over the first half year. As
a result of the action taken to sustain profitability during
this very difficult trading period it is encouraging to report
that gross profit margins at 22.6% are some 1.3 percentage
points ahead of last year. 
Divisional operating profits referred to in this Review
are before goodwill amortisation and exceptional items
which provides a more consistent measure of operating
performance.
Components division
Sales of £107.6 million (2002: £110.7 million); Operating
profits of £4.7 million (2002: £5.5 million).
The division is a leading international provider of value-
added distribution and supply chain outsourcing services to
OEM customers in the aerospace and defence industries.
The division specialises in the supply of small components
and through its increasingly sophisticated systems can
facilitate significant cost and working capital savings for its
growing customer base.
Sales in the second half year were 12% ahead of those in
the first half year, reflecting the extension of our long-
term contract with Rolls-Royce plc and the benefits of
new contracts secured during the year. Operating profits
increased by 15% during the second half year as a result of
efficiency and other operating improvements. 
The on-going difficulties facing the division’s customer base
in the civil OEM market are driving demand for our supply
chain outsourcing services. Existing relationships are being
expanded (Goodrich Aerospace, ITP , Lockheed Martin) and
new customers have been secured including Eaton
Aerospace. The significant increase in the US defence
budget is also providing additional opportunities for growth
and will, over the medium-term, provide a more balanced
sales mix between the civil and defence segments.
Prior year investments in IT systems have helped the
division to reduce its working capital requirements and
improve its already high level of customer service. During
the year the division acquired a 50% stake in Wesupply
Aerospace, a web based fulfilment software company, and
is now actively marketing this product to its customer base
as well as integrating the software into its own IT platforms.
Pattonair continues its European development plans both
through Titanox Aerospace in France and by expanding its
customer base in the key German and Spanish markets.
Ulogistics has successfully extended its activities with Rolls-
Royce plc with further projects being actively considered
by both parties. The senior management team has been
strengthened during the year to ensure that customer
service remains at a very high level whilst other major OEM
contracts are reviewed and negotiated.
Abscoa, the division’s North American operation, continues
to trade successfully despite the damaging strike at
Bombardier in the early part of the year and the general
weakness in the US market. New business has been
secured and further opportunities for growth have been
identified.
Chemicals division
Sales of £59.2 million (2002: £66.7 million);  Operating
profits of £5.0 million (2002: £5.2 million).
The division distributes a broad range of specialist chemical
products principally to the international aerospace market;
other markets served include manufacturers of wind turbine
blades and the plastic structures industry. A full range of
outsourcing services is provided to major customers.
Sales levels across the division have now stabilised after
the significant fall during the second half of last year, and
operating profits continue to improve as a result of the
actions taken to enhance gross margins and reduce costs.
Aeropia successfully negotiated a five year extension to
its major contract with British Airways in October 2002
and has won a number of exciting contracts, including
Eurofighter initial provisioning and two outsourcing projects
for aerospace OEM customers.
Aerovac Systems continues to secure new customers
and a significant investment is being made at its French
subsidiary to enable it to fully service its rapidly growing
moulding tool activity. Many of these moulds are for
customers involved in the development of the Airbus A380
aircraft. In March 2003 a sales and service subsidiary was
established in Italy.
Richmond Aircraft Products won an important contract
with The Boeing Company during the year and has also
expanded its facilities as customers are increasingly looking
to purchase “ready to use” products rather than just the
basic materials.
Chief Executive’s Review
4 Repair and overhaul division
Sales of £14.3 million (2002: £13.6 million);  Operating profits of £1.6 million 
(2002: £1.7 million).
The division currently comprises a single company, AEM, which is one of Europe’s largest
independent overhaul companies providing maintenance services for over 2,000 components
over a broadening range of aircraft types.
The company continues to deliver encouraging sales growth, primarily as a result of the
investments made to extend its capabilities and the steps taken to broaden its geographic
customer base. Operating profits were modestly behind those of the prior year due to sales
mix.
During the year £0.2 million was spent to extend the company’s capability to overhaul
integrated drive generators to enable it to service both regional jets and the Boeing 737 NG
aircraft. 
AEM is continuing to increase its customer base and growing range of capabilities, and
suitable acquisitions are being sought in both Europe and the Far East.
Summary
We remain committed to the action programme we implemented following September 2001 of:
• Increasing our market share through winning new contracts and extending relationships 
with existing customers;
• Improving gross margins by eliminating activities that have become marginal due to 
market changes;
• Initiating cost reductions; and
• Maximising cash flow through tight control of working capital.
Despite increasingly challenging market conditions the Group delivered sales and profit
growth in the second half of the year and continued to be highly cash generative.
We have demonstrated our ability to implement large-scale contracts successfully and we
remain very active in seeking additional contracts in our key European and North American
markets.  We are also reviewing a number of acquisition possibilities that fit our strategic
plans. With our strong management team and robust financial position we are confident of
furthering our long-term growth plans in the current financial year.
Clive Snowdon, Chief Executive
Chief Executive’s Review
5  Operating results
Sales for the year at £181.1 million were 5% below last year’s figure of £191.0 million.  As
reported in the Chairman’s Statement second half sales were higher than in the equivalent
period in the prior year.  Before goodwill amortisation and exceptional items, operating profit
was 9% lower than last year primarily reflecting reduced sales.
As part of its normal activities, the Group increasingly incurs expenditure in making bids
for potential new business and long-term contracts. The bidding process often takes a
considerable period of time to conclude and all related costs are fully written off to the profit
and loss account as they are incurred.
Interest
Lower interest rates and strong cash flow have resulted in a considerably reduced interest
charge of £1.1 million compared with £2.3 million in 2002.  Average interest rates in the year
were 4.3% and average debt was £26.7 million compared with 5.7% and £40.5 million last year.
Interest was covered 10.0 times by profits before goodwill amortisation and exceptional items
(2002: 5.4 times).
Goodwill amortisation
Goodwill amortisation of £2.2 million (2002: £2.2 million) included a full year charge relating
to the acquisition of Abscoa, and a modest effect from the additional investment in Titanox
Aerospace. The charge for the year was reduced as a result of the weakening in the US dollar.
Exceptional items
An exceptional credit of £0.2 million arose in the year as a result of the disposal of surplus
property at GRP , net of redundancy and other restructuring costs of £0.2 million. In the prior
year the Group incurred an exceptional cost of £1.1 million relating to restructuring costs of
£0.2 million and stock provisions of £0.9 million.
Profit before tax
After the much lower interest charge, profit before tax, goodwill amortisation and exceptional
items of £10.2 million was marginally ahead of last year’s profit of £10.1 million.
Tax
The tax charge on profit before goodwill amortisation and exceptional items was 32.7% (2002:
32.6%).  The tax rate reflects the mix of profits earned in the US and France, both of which
have higher rates than the UK.
Earnings per share
Before goodwill amortisation and exceptional items basic earnings per share were 27.7p, 4%
lower than last year, due to the higher average number of shares in issue following the rights
issue in June 2001.  Including goodwill amortisation and exceptional items, basic earnings per
share of 20.9p were 22% higher than last year.
Dividends
As reported in our Interim results the Directors have reduced the disparity between the interim
and final dividends. An interim dividend of 4.0p (2002: 3.25p) was paid in December 2002 and
a final dividend of 8.5p (2002: 8.75p) is proposed making a total payment of 12.5p (2002: 12.0p).
The increase in the total dividend reflects the improvement in profitability during the second
half year and the Group’s strong financial position. The total dividend for the year is covered
2.2 times (2002: 2.4 times) by basic earnings per share before goodwill amortisation and
exceptional items.
Finance Director’s Review
6 Operating cash flow
Operating cash flow of £17.1 million was £8.3 million
higher than operating profit.  The difference comprises
depreciation and amortisation totalling £4.1 million and a
working capital net inflow of £4.2 million.  Stocks increased
by £1.5 million due mainly to the increasing scope of our
contract with Rolls-Royce plc.  Debtors and creditors both
increased as a result of a re-alignment of payment terms
and stock funding arrangements on the Rolls-Royce plc
contract.
Capital expenditure
Gross capital expenditure at £1.9 million (2002: £1.9 million)
was again equal to depreciation. Additions mainly comprise
routine replacements and IT enhancements and include
£0.2 million to further develop AEM’s repair and overhaul
capability.
Free cash flow
Free cash flow comprising operating cash flow less interest,
tax and capital expenditure was £12.7 million 
(2002: £4.5 million).  Tax payments in the year of 
£2.5 million were reduced by a £0.7 million tax rebate at
Abscoa following the realisation of fair value provisions on
the disposal of obsolete stock in the previous year.
Acquisitions
During the year the balance due, £0.4 million, on the
acquisition of Abscoa in June 2001 was paid. In addition
the Group acquired the remaining 60% of Titanox
Aerospace in January 2003 for £0.8 million, of which 
£0.2 million was paid after the year end. The balance of the
acquisition expenditure in the year relates to the
establishment of the Wesupply Aerospace joint venture of
which the Group owns 50%.
Net indebtedness and gearing
Net debt at the year end was £20.7 million 
(2002: £30.8 million) which represents gearing of 32%
(2002: 48%) of shareholders’ funds. Since the year end, the
Group’s banking facilities have been increased to 
£35.0 million including term loans of £21.0 million
repayable in equal half yearly instalments over seven years.
Finance Director’s Review
Shareholders’ funds
Shareholders’ funds remained at £64.1 million, with
retained earnings of £2.1 million being offset by translation
differences of £2.1 million on the Group’s net investment in
its overseas subsidiaries.
Pensions
The majority of employee pensions are provided under
defined contribution pension schemes but the Group also
operates a defined benefit scheme that has been closed
to new members since 2000.  The FRS 17 valuation of the
defined benefit scheme at 31 March 2003 showed assets of
£3.6 million and liabilities of £6.8 million.  The shortfall
represents 5% of the Group’s net asset value and employer
and employee contributions were increased in November
2002 with the objective of funding the shortfall over the
remaining working lives of the scheme members.  The
additional cash cost to the Group is less than £0.1million
per year.
Currency exchange risk
A large element of aerospace transactions are conducted
in US dollars.  The Group is able, particularly on major
contracts, to match purchases and sales in dollars and
seeks to match transactions in euros wherever possible
thereby providing a significant hedge against currency risks.
Approximately £0.6 million of transactions were unmatched
at the year end.  Where the value of these transactions is
certain, the Group may hedge the exposure by taking out
forward exchange contracts.
The Group seeks to finance the net investment in overseas
subsidiaries by debt denominated in the relevant local
currency to reduce the translation risk on its investments. 
John Beaumont, Group Finance Director
7 Board of Directors
CHAIRMAN
B D McGowan FCA
Brian McGowan joined the Group in April 1997 as
non-executive Chairman and is a member of the
remuneration committee. He was a co-founder of
Williams plc, and a Chairman of House of Fraser plc.
He is currently non-executive Deputy Chairman of
Rentokil Initial PLC and non-executive Chairman of
Catalyst Corporate Finance Limited. He was Chairman
of Burnfield PLC until its acquisition by Fairey Group Plc
in January 1997. Aged 58.
EXECUTIVE DIRECTORS
C J Snowdon BA FCA
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. Aged 49.
R J K Beaumont FCA
Group 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. Aged 56.
COMPANY SECRETARY
S J Bowers ACA
Registered Office:
Concorde House
24 Warwick New Road
Leamington Spa
Warwickshire
CV32 5JG
Telephone: 01926 331800
Facsimile: 01926 312680
Website: www.umeco.com
Registered number: 148635
Board of Directors
NON-EXECUTIVE DIRECTORS
O Abdullah
(Member – remuneration committee)
Osman Abdullah joined the Board as a non-executive
Director in April 1993. Previously a Director of Starmin
PLC and Evered Holdings PLC he currently has interests
in several family and private businesses. Aged 57.
J M Harper
(Member – audit committee)
Michael Harper joined the Board in June 2002 as a non-
executive Director. He is currently Chief Executive of
Kidde plc, for whom he has worked in a variety of roles
since 1984. Aged 58.
J S Harper FCA
(Chairman – remuneration committee, member – audit
committee)
John Harper joined the Board as a non-executive
Director in 1995. 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. Aged 58.
D R Porter
(Chairman – audit committee)
David Porter joined the Board as a non-executive
Director in January 2001, and was appointed chairman
of the audit committee in August 2002. He was a senior
corporate stockbroker at BZW until his retirement
in January 1997, since when he has pursued private
interests. Aged 58.
8 The Directors submit their annual report and financial statements for the year ended 31 March 2003.
PRINCIPAL ACTIVITIES
The Group provides value-added distribution services through three product areas. The Components businesses distribute specialist low cost
parts for aerospace, defence, avionics and other industrial uses. The Chemicals businesses distribute chemicals and other materials for use in
aerospace, defence, petroleum and other industrial activities. The Repair and overhaul business provides aircraft component repair and
overhaul services.
BUSINESS REVIEW
The results for the year and future prospects are reviewed in the Chairman’s Statement on page 3 and in the reports of the Chief Executive and
Finance Director on pages 4 to 7.
Details of the results for the year are shown in the consolidated profit and loss account on page 18. Analyses of turnover and profit before
interest by activity are shown in note 1 to the financial statements.
DIVIDENDS AND TRANSFERS TO RESERVES
The Directors propose a final dividend of 8.5p per share, payable on 8 August 2003 to shareholders registered on 11 July 2003, making a total
for the year of 12.5p per share (2002: 12.0p).
The profit for the year retained in the Group is £2,049,000.
ACQUISITION
The remaining 60% of the share capital of Titanox Aerospace SA not already owned by the Group was acquired on 1 January 2003 for a
consideration of 11.2 million. Titanox Aerospace SA is a French-based distributor of components to the aerospace and defence industry.
SHARE CAPITAL
Details of share capital are given in note 19 to the 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 1 August 2002. These powers will
expire at the conclusion of the 2003 Annual General Meeting. Resolutions to renew the Directors’ powers are therefore included within the
notice of the 2003 Annual General Meeting.
DIRECTORS
Directors retire by rotation at intervals of no more than three years, in accordance with the Combined Code.
John Beaumont and John Harper retire by rotation and, being eligible, offer themselves for re-election at the forthcoming Annual General
Meeting. John Harper has a letter of appointment with the Company; details of this and of John Beaumont’s service contract are set out in the
Directors’ Remuneration Report.
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 Directors’ Remuneration Report on pages 13 to 17.
SUBSTANTIAL SHAREHOLDERS
Other than their interests shown on page 15, the Directors have been notified of the following interests of 3% or more in the issued share
capital of the Company as at 2 June 2003:
% of
Number issued
of share
shares capital
Framlington Investment Management Limited 2,999,182 12.3%
Standard Life Investments Limited 1,767,442 7.2%
Legal & General Investment Management Limited 753,288 3.1%
Directors’ Report
9
Directors’ Report
2. Front continued [c87586]  10/6/03  4:17 pm  Page 9 EMPLOYEES
The Group is committed to a policy of employee involvement by keeping staff at all levels informed of the performance and prospects of the
business. The Group aims to provide disabled persons with suitable opportunities for employment, training and advancement and makes every
effort to provide appropriate continued employment for any person who becomes disabled during the course of employment with the Group.
SAYE SCHEME
A fourth invitation to apply for options under the Group’s savings related share option (SAYE) scheme was made to employees in November
2002. As a result, options over 451,534 ordinary shares were granted to 266 employees on 9 December 2002 at a price of 202p, being a 20%
discount to the average share price of the Company on the three days prior to the date on which the invitations to join the scheme were made.
The SAYE scheme is open to Directors spending at least 25 hours per week on Group business and to all other employees paying PAYE on
earnings from their employment within the Group.
DONATIONS
The Group made charitable donations amounting to £4,000 (2002: £11,000) during the year. The Group made no political donations during the
year.
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 2003, the Company had 5 days purchases outstanding included in creditors (2002:
11 days).
AUDITORS
In accordance with Section 385 of the Companies Act 1985, a resolution for the re-appointment of KPMG Audit Plc as auditors of the Company
will be proposed at the forthcoming Annual General Meeting.
By order of the Board
SJ BOWERS ACA
Company Secretary
Concorde House
24 Warwick New Road
Leamington Spa 
Warwickshire 
CV32 5JG
3 June 2003
Directors’ Report UMECO plc Annual Report 2003
10
Directors’ Report
2. Front continued [c87586]  10/6/03  4:17 pm  Page 10 STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE PROVISIONS OF THE COMBINED CODE
The policy of the Board is to manage the affairs of the Company in accordance with the principles of Good Governance and Code of Best
Practice as set out in Section 1 of the Combined Code annexed to the Listing Rules of the UK Listing Authority. The Company considers that it
has been in full compliance with the provisions set out in Section 1 of the Code throughout the year, subject to the matters described in the
Directors’ Remuneration Report, and the following comments relating to particular provisions of the Code: 
A 2.1 The Board has considered the proposal that a senior independent director be identified in the Annual Report and concluded that this
would be inappropriate given that the Chairman of the Company, and the Chairmen of the audit and remuneration committees are
already identified in the Report.
A 5.1 The Board’s view is that no nomination committee need be established, given the size of the Board at present. Appointments to the
Board are considered by all of the Directors.
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:
l The Board receives regular reports from management which highlight any material control weaknesses, and discusses actions taken on
weaknesses identified by management;
l 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;
l The Chairman of the audit committee reports the outcome of the audit committee meetings to the Board;
l 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;
l The Board reviews the role of insurance in managing risks across the Group.
The Group’s management operates a risk management process which identifies the key risks facing each of the Group’s businesses and
reports to the Board on how those risks are being addressed. This is based on each business producing a report on risk assessment and
business development policy, which identifies the key risks facing the business, the probability of those risks occurring and the actions being
taken to mitigate those risks to the desired level. These reports are combined to provide the Board with a report of the significant risks faced by
the Group as a whole, together with details of the controls in place over those risks.
The Group does not have an internal audit function. However the Board periodically reviews the need for such a function and has done so
during the year. The current conclusion of the Board is that an internal audit function is not necessary given the scale and complexity of the
Group’s operations. 
THE BOARD AND ITS COMMITTEES
The Board
The Board has reserved certain matters for its approval. All Directors have access to the Company Secretary, and the appointment and removal
of the Company Secretary is a matter for the Board as a whole. To enable the Board to discharge its duties, all Directors have full and timely
access to all relevant information and there is a procedure for all Directors, in furtherance of their duties, to take independent professional
advice, if necessary, at the expense of the Company.
Corporate Governance
11
Corporate Governance
2. Front continued [c87586]  10/6/03  4:17 pm  Page 11 The following committees, the composition of which is shown on page 8, deal with specific aspects of the Group’s affairs:
Audit committee
The committee meets at least twice annually and provides a forum for reporting by the Group’s external auditors. Meetings are also attended,
by invitation, by executive Directors, however the committee meets at least annually with the auditors without executive Directors being
present. The committee advises the Board on the appointment of auditors and on their remuneration, and discusses the nature and scope of
the audit work undertaken by the auditors.
Remuneration committee
The remuneration committee is responsible for making recommendations to the Board, within agreed terms of reference, on the Company’s
framework of executive remuneration and its cost. The committee determines the remuneration and other benefits for each of the executive
Directors, including performance related bonus schemes and pension entitlements.
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 Company and the Group have adequate resources to continue in operational existence for
the foreseeable future. As in prior years the Directors therefore believe that it is appropriate that the financial statements are prepared on a
going concern basis.
Corporate Governance UMECO plc Annual Report 2003
12
Corporate Governance
2. Front continued [c87586]  10/6/03  4:17 pm  Page 12 Directors’ Remuneration Report
13
Directors’ Remuneration Report
COMPOSITION OF THE REMUNERATION COMMITTEE
The remuneration committee consists of John Harper as chairman, Brian McGowan and Osman Abdullah, 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 all 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 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 the policy to set individual 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 elements of the remuneration package are as follows:
Basic salaries and benefits in kind
Basic salaries are determined by the remuneration committee, taking into account the performance of each individual and salary levels
prevailing in the market for executives of comparable status and skills. The salaries are reviewed annually with effect from 1 April or when a
change of responsibilities occurs. Benefits in kind provided are primarily a company car and fuel and private medical insurance. Executives
may choose to forego the company car and fuel 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.
Performance related bonus
Clive Snowdon and John Beaumont participate in a cash bonus scheme under which entitlement to any bonus is dependent upon the increase
in the Group’s earnings per share. Bonuses paid are non-pensionable and are capped at 100% of basic salary.
In view of the performance of the Group in the face of adverse conditions in the global aerospace market, the remuneration committee decided
to award discretionary bonuses to Clive Snowdon and John Beaumont for the year ended 31 March 2003.
Share options
Executive options
Each executive Director is eligible to participate in the UMECO 2001 Share Option Plan under which, at the discretion of the remuneration
committee, options may be granted to employees and directors of UMECO and its subsidiaries. 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 and not
after ten years from the date of grant. 
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 shown below. This measure has been chosen because it reflects real
improvement in earnings and is considered an appropriate measure for executive share options.
Average real annual growth Percentage of
over the three year period option vesting
Below 5% 0%
Over 5% 25%
Over 7.5% 50%
Over 10% 75%
Over 12.5% 100%
No options may be exercised if the average real annual growth in earnings per share is below 5%. For performance between any two levels over
5%, 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.
In granting options under the Plan, the remuneration committee takes 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 16.
Save as you earn scheme
The Group’s savings related share option (SAYE) scheme is open to Directors spending at least 25 hours per week on Group business and to all
other employees paying PAYE on earnings from their employment within the Group. Options granted under the scheme are exercisable three
years from the date of grant.
2. Front continued [c87586]  10/6/03  4:17 pm  Page 13 Long-term incentive plan (LTIP)
LTIP awards were made to senior executives between 1998 and 2000. As a consequence of the establishment of the UMECO 2001 Share Option
Plan, no further awards will be made under the LTIP . 
The value of the shares awarded to participants in the LTIP was subject to an upper annual limit of 90% of an executive’s basic salary for the
year of operation. Ownership of shares under the awards vested with participants subject to achievement of the following performance criteria:
a. earnings per share growth exceeding inflation by a minimum of 2.5% per annum over the three year performance period, and
b. the amount of the award vesting at the end of the performance period was subject to performance ranked against companies forming the
FTSE mid-250 index (excluding investment trusts, financial and utility companies). Performance in the top quartile measured against the
comparator group would vest awards in full. Performance ranked between 55% and 75% of the group would vest awards on a sliding scale
from 25% to 100% of their value. For performance ranked below 55%, the shares would be forfeited.
Awards are non-pensionable and the plan is administered by Bacon & Woodrow Trust Company (CI) Limited as trustees under a trust deed
dated 11 February 1998. 
It has been confirmed by the remuneration committee that the conditions required for vesting of the awards made to Clive Snowdon and John
Beaumont in June 1999 have not been met, and these awards have therefore lapsed.
Directors’ pension entitlement
Clive Snowdon
Clive Snowdon is entitled to employer’s pension contributions equivalent to 39% 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 Scheme, which is Inland Revenue approved. Until normal
retirement date members currently contribute 6.5% of salary and the Group currently contributes 14.2%. 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.
There are no pension arrangements in place for other Directors.
Remuneration of non-executive Directors
The remuneration of the Chairman is determined by the Chairman’s remuneration committee, which comprises all members of the Board
apart from the Chairman. The remuneration of the other non-executive Directors is determined by the Board following recommendations made
by the Chairman.
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, and has agreed letters of appointment with the non-executive
Directors. The dates of these contracts are as follows:
BD McGowan 21 April 1997
CJ Snowdon 21 April 1997
RJK Beaumont 20 September 1993
O Abdullah 25 March 1994
JM Harper 5 June 2002
JS Harper 6 July 1995
DR Porter 21 December 2000
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 the Company giving two years’ notice, or by John Beaumont giving six months’ notice.
As part of the terms of this contract, he is entitled to terminate the contract within 12 months of his becoming aware that, as a result of a
Directors’ Remuneration Report UMECO plc Annual Report 2003
14
Directors’ Remuneration Report
2. Front continued [c87586]  10/6/03  4:17 pm  Page 14 Directors’ Remuneration Report
15
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% or more of the voting rights for the time being of the Company. In that event, John Beaumont would
receive compensation equal to the amount to which he would have been entitled under the relevant legislation if he had been wrongfully
dismissed.
None of the letters of appointment of the non-executive Directors provides either for a fixed notice period or for the payment of compensation
on termination.
TOTAL SHAREHOLDER RETURN
The graph below compares the Company’s total shareholder return over the five years ended 31 March 2003 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 1998.
The FTSE Small-cap share index was chosen as it is a relevant broad equity market index for smaller quoted companies.
DIRECTORS’ INTERESTS
The Directors who held office at the end of the financial year and their interests in the 25p ordinary shares of the Company at the start of the
year (or date of appointment where later) and end of the year were as follows:
At start 
of year 
At end % of issued (or date of % of issued
of year share capital appointment) share capital
BD McGowan 1,000,000 4.1 1,000,000 4.1
CJ Snowdon 162,880 0.7 162,880 0.7
RJK Beaumont 138,962 0.6 138,962 0.6
O Abdullah 925,369 3.8 925,369 3.8
JM Harper 7,500–––
JS Harper 10,365 – 10,365 –
DR Porter 2,000 – 2,000 –
The interest of Osman Abdullah at both the start and end of the year includes 340,039 shares held by a trust of which Mr Abdullah is a
beneficiary. All of the other Directors’ interests shown are beneficial.
There have been no changes in Directors’ interests between 31 March 2003 and the date on which these financial statements were signed.
March
1998
March
1999
March
2000
March
2001
March
2002
March
2003
UMECO FTSE Small-cap FTSE Aerospace & Defence
0
50
100
150
200
Source: Datastream 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:
2003 2002
Fees Salary Bonus Benefits T otal Total
£000 £000 £000 £000 £000 £000
Chairman
BD McGowan 50 – – 19 69 68
Executive Directors
CJ Snowdon – 211 30 6 247 208
RJK Beaumont – 131 20 13 164 139
Non-executive Directors
O Abdullah 17 – – – 17 16
JM Harper 14 – – – 14 –
JS Harper 20 – – – 20 18
DR Porter 19 – – – 19 16
MWJ Thorne (retired 1 August 2002) 7 – – – 7 18
127 342 50 38 557 483
Benefits comprise the value of benefits in kind including company cars, petrol and medical insurance.
Directors’ share options:
2003 2002
Earliest date Exercise Number Granted Number
UMECO 2001 Share Option Plan of exercise price outstanding in year outstanding
CJ Snowdon September 2004 227.5p 233,406 – 233,406
June 2005 277.8p 66,227 66,227 –
RJK Beaumont September 2004 227.5p 166,153 – 166,153
June 2005 277.8p 47,151 47,151 –
2003 2002
Earliest date Exercise Number Lapsed in Granted Number
SAYE scheme of exercise price outstanding year in year outstanding
CJ Snowdon September 2004 441.0p – (2,196) – 2,196
February 2006 202.0p 4,678 – 4,678 –
RJK Beaumont September 2004 441.0p – (2,196) – 2,196
February 2006 202.0p 4,678 – 4,678 –
No options were granted to or exercised by any Director in the period between 31 March 2003 and the signing date of these financial
statements. 
The mid market price of the Company’s shares as quoted in the Official List of the London Stock Exchange on 31 March 2003 was 217.5p and
ranged between 212.5p and 312.5p during the year.
Directors’ Remuneration Report UMECO plc Annual Report 2003
16
Directors’ Remuneration Report
2. Front continued [c87586]  10/6/03  4:17 pm  Page 16 LTIP awards:
Details of LTIP awards outstanding during the year are shown in the table below.
Number Number Share Value of
Date of shares at Lapsed of shares at price of award
awarded end of year in year start of year award £000
CJ Snowdon June 1999 – (21,727) 21,727 403.9p 88
RJK Beaumont June 1999 – (15,048) 15,048 403.9p 61
Directors’ pensions:
Clive Snowdon
During the year, £18,000 of Clive Snowdon’s pension entitlement was converted to salary (2002: £18,000). The Company made contributions
totalling 29% of basic salary to the UMECO plc Executive Retirement Benefits Scheme and FURBS, of which 16% of basic salary was paid to
the FURBS. Total contributions for the year were £54,000 (2002: £51,000). 
John Beaumont
Details of John Beaumont’s entitlements under the UMECO plc Pension and Life Assurance Scheme are as follows:
Increase in Change in
Accrued Increase in accrued pension transfer value
pension at accrued pension during the year Transfer value of accrued benefits less Director’s
31 March 2003 during the year (net of inflation) 2003 2002 Change contributions
£000 £000 £000 £000 £000 £000 £000
31 4 3 300 296 4 (2)
a) The accumulated accrued pension entitlement shown is that which would be paid annually based on service to the end of the year.
b) Director’s contributions are paid or payable in the year under the terms of the scheme.
c) Members of the scheme have the option to pay additional voluntary contributions; no such contributions nor any resulting benefits are
included in the above table.
d) Normal retirement age is 63. Members may only take early retirement with the consent of the Group.
e) Pensions increase at 3% per annum during retirement.
f) The scheme provides for a spouses pensions of 50% of the member’s pension to be paid following the member’s death during retirement.
J S Harper
Chairman, remuneration committee
3 June 2003
Directors’ Remuneration Report
17 Before Before
goodwill Goodwill goodwill Goodwill
amortisation amortisation amortisation amortisation
and and and and
exceptional exceptional 2003 exceptional exceptional 2002
items items T otal items items Total
Notes £000 £000 £000 £000 £000 £000
T urnover 1 181,084 – 181,084 191,022 – 191,022
Cost of sales (140,102) – (140,102) (150,323) (941) (151,264)
Gross profit 40,982 – 40,982 40,699 (941) 39,758
Distribution costs (3,807) – (3,807) (3,553) – (3,553)
Administrative expenses (25,870) (2,444) (28,314) (24,737) (2,393) (27,130)
Operating profit 3, 4 11,305 (2,444) 8,861 12,409 (3,334) 9,075
Exceptional profit on disposal of
fixed asset properties 4 – 404 404 –– –
Profit before interest 1 11,305 (2,040) 9,265 12,409 (3,334) 9,075
Net interest payable 5 (1,136) – (1,136) (2,294) – (2,294)
Profit on ordinary activities before taxation 10,169 (2,040) 8,129 10,115 (3,334) 6,781
Taxation on profit on ordinary activities 6 (3,324) 384 (2,940) (3,293) 617 (2,676)
Profit on ordinary activities after taxation 6,845 (1,656) 5,189 6,822 (2,717) 4,105
Minority interests (90) – (90) (95) – (95)
Profit for the financial year 6,755 (1,656) 5,099 6,727 (2,717) 4,010
Dividends paid and proposed 7 (3,050) – (3,050) (3,362) – (3,362)
Transferred to reserves 20 3,705 (1,656) 2,049 3,365 (2,717) 648
Earnings per share pence pence pence pence pence pence
Before goodwill amortisation
and exceptional items 27.7 – 27.7 28.8 – 28.8
Goodwill amortisation and exceptional items – (6.8) (6.8) – (11.6) (11.6)
On profit for the financial year 9 27.7 (6.8) 20.9 28.8 (11.6) 17.2
Diluted earnings per share 9 27.7 (6.8) 20.9 28.8 (11.6) 17.2
The accompanying accounting policies and notes form an integral part of these financial statements.
Consolidated Profit and Loss Account UMECO plc Annual Report 2003
18
Consolidated Profit and Loss Account
For the year ended 31 March 2003
3. Accounts [c87586]  10/6/03  4:17 pm  Page 18 Balance Sheet
19
Balance Sheet
as at 31 March 2003
Group Company
2003 2002 2003 2002
Notes £000 £000 £000 £000
Fixed assets
Intangible assets – goodwill 10 37,908 41,484 – –
Tangible assets 11 9,308 9,597 125 179 
Investments 12 6 828 62,017 63,339 
47,222 51,909 62,142 63,518
Current assets
Stocks 13 49,450 47,806 – –
Debtors 14 40,632 38,096 34,938 38,982
Cash at bank and in hand 1,251 1,331 1 1 
91,333 87,233 34,939 38,983
Creditors falling due within one year 15 (62,648) (54,352) (21,354) (17,624)
Net current assets (see note below) 28,685 32,881 13,585 21,359
T otal assets less current liabilities 75,907 84,790 75,727 84,877 
Creditors falling due after one year 16 (11,465) (19,943) (18,163) (26,680)
Provisions for liabilities and charges 17 (341) (732) (187) (314)
Net assets 1 64,101 64,115 57,377 57,883
Capital and reserves
Called up share capital 19 6,099 6,099 6,099 6,099 
Share premium account 20 49,634 49,634 49,634 49,634 
Other reserves 20 – – 111 111 
Profit and loss account 20 8,357 8,372 1,533 2,039 
Equity shareholders’ funds 64,090 64,105 57,377 57,883
Equity minority interest 11 10 – –
64,101 64,115 57,377 57,883
Debtors and net current assets of the Group include amounts due after more than one year of £2,836,000 (2002: £2,626,000). The equivalent
amounts for the Company are £21,167,000 (2002: £3,148,000).
The financial statements were approved by the Board of Directors on 3 June 2003 and signed on its behalf by:
B D McGowan
Director
3. Accounts [c87586]  10/6/03  4:17 pm  Page 19 2003 2002
Notes £000 £000
Net cash inflow from operating activities 23 17,145 11,394
Returns on investments and servicing of finance
Interest received 28 55
Interest paid – bank (1,214) (2,792)
Interest paid – HP and leasing (41) (30)
Dividends paid to minority interests (88) –
Net cash outflow from returns on investments and servicing of finance (1,315) (2,767)
T axation
Corporation tax (1,806) (2,733)
Capital expenditure
Purchase of tangible fixed assets (1,490) (1,533)
Proceeds of sale of tangible fixed assets 152 181
Net cash outflow from capital expenditure (1,338) (1,352)
Acquisitions 22 (1,236) (17,461)
Equity dividends paid (3,111) (2,927)
Net cash inflow/(outflow) before financing 8,339 (15,846)
Financing
Shares issued – 26,052
Receipt of bank loans – 15,000
Repayment of bank loans (7,500) (22,990)
Capital element of HP and lease finance repaid (289) (198)
Net cash (outflow)/inflow from financing (7,789) 17,864
Increase in cash 24 550 2,018
The Group did not hold any liquid resources at 31 March 2003 or at 31 March 2002. The Group defines liquid resources as cash to which
access cannot be obtained within 24 hours.
Consolidated Cash Flow Statment UMECO plc Annual Report 2003
20
Consolidated Cash Flow Statement
For the year ended 31 March 2003
3. Accounts [c87586]  10/6/03  4:17 pm  Page 20 Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Profit for the financial year 5,099 4,010 2,544 3,890
Foreign exchange translation (2,064) (76) – –
T otal recognised gains for the year 3,035 3,934 2,544 3,890
Reconciliation of Movements in
Shareholders’ Funds
For the year ended 31 March 2003
Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Profit for the financial year 5,099 4,010 2,544 3,890
Dividends (3,050) (3,362) (3,050) (3,362)
Foreign exchange translation (2,064) (76) – –
Share capital issued – 26,062 – 26,062
Adjustment for SAYE options exercised 
through the QUEST – (10) – –
Net change in shareholders’ funds (15) 26,624 (506) 26,590
Opening shareholders’ funds 64,105 37,481 57,883 31,293
Closing shareholders’ funds 64,090 64,105 57,377 57,883
Statement of Total Recognised Gains and Losses
21
Statement of T otal Recognised Gains and Losses
For the year ended 31 March 2003
3. Accounts [c87586]  10/6/03  4:17 pm  Page 21 The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
financial statements:
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards and under historical cost accounting rules.
Consolidation
The consolidated financial statements incorporate the financial statements of UMECO plc and all of its subsidiaries. Acquisitions are
accounted for using acquisition accounting rules. An associate is an undertaking in which the Group has a long-term interest, and is able to
exercise significant influence. The Group’s share of profits or losses of associates is included in the consolidated profit and loss account and
its interest in their net assets is included within investments in the consolidated balance sheet. 
Prior to becoming a subsidiary undertaking, Titanox Aerospace SA (‘Titanox’) was accounted for as an associated undertaking. In accordance
with FRS 2 ‘Accounting for Subsidiary Undertakings’, and in order to give a true and fair view, purchased goodwill has been calculated as the
sum of the goodwill arising on each purchase of shares in Titanox, being the difference at the date of each purchase between the fair value of
the consideration given and the fair value of the identifiable assets and liabilities attributable to the interest purchased. This represents a
departure from the statutory method, under which goodwill is calculated as the difference between cost and fair value on the date that Titanox
became a subsidiary undertaking. The statutory method would not give a true and fair view because it would result in the Group’s share of
Titanox’s retained reserves, during the period that it was an associated undertaking, being recharacterised as goodwill. The effect of this
departure is to decrease retained profits by £289,000 and to decrease the cost of purchased goodwill recognised on the acquisition by
£289,000. The effect of this departure from the statutory method on profits for the year is not material.
The Group treats investments in undertakings that are jointly controlled as joint ventures. Joint ventures are accounted for using the gross
equity method.
A profit and loss account is not presented for the Company as permitted by Section 230 of the Companies Act 1985.
Goodwill
From 1 April 1998, the difference between the fair values of consideration given and net assets acquired is capitalised in the consolidated
financial statements as goodwill. The Directors consider each acquisition separately for the purpose of determining the amortisation period of
any goodwill that arises. Currently, all such goodwill is amortised on a straight line basis over its estimated useful life of 20 years. Fair value
adjustments are considered to be provisional at the first balance sheet date after acquisition to allow time to elapse for any adjustments to be
accurately quantified.
Goodwill arising on acquisitions prior to 1 April 1998 had been written off against reserves on acquisition. In accordance with FRS 10, this
goodwill has now been eliminated against the profit and loss reserve. On any subsequent disposal or termination of a previously acquired
business, the profit or loss on disposal is to be calculated after charging the amount of any related goodwill previously taken to reserves.
T urnover
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to customers during the year.
Pension costs
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. Contributions to the schemes are charged to the profit and loss account so
as to spread the cost of pensions over employees’ working lives with the Group. The Group has made the transitional disclosures required by
FRS17 ‘Retirement Benefits’ in note 26 to these financial statements.
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 and long leasehold property 50 years
Short leasehold property period of lease
Plant, machinery, fixtures & IT equipment 3-10 years
Motor vehicles 3-4 years
No depreciation is charged on freehold land.
Stocks and work in progress
Stocks and work in progress are valued at the lower of cost and net realisable value.
Accounting Policies UMECO plc Annual Report 2003
22
Accounting Policies
3. Accounts [c87586]  10/6/03  4:17 pm  Page 22 T axation
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting purposes except as otherwise required by FRS 19.
Leases
Where the Company 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 as a tangible fixed asset 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 profit and loss account 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
profit and loss account on a straight line basis over the life of the lease.
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. Profit and loss accounts 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 reserves. Foreign exchange differences arising on borrowings considered to finance, or provide a
hedge against, foreign equity investments, are taken directly to reserves.
Accounting Policies
23
3. Accounts [c87586]  10/6/03  8:21 pm  Page 23 Notes to the Financial Statements UMECO plc Annual Report 2003
24
Notes to the Financial Statements
For the year ended 31 March 2003
1 Segmental information
2003 2002
T urnover by activity £000 £000
Components 107,571 110,732
Chemicals 59,231 66,663
Repair and overhaul 14,282 13,627
181,084 191,022
2003 2002
T urnover by destination £000 £000
United Kingdom 118,888 125,687
Rest of Europe 20,440 22,259
North America 33,811 36,188
Rest of world 7,945 6,888
181,084 191,022
2003 2002
T urnover by origin £000 £000
United Kingdom 136,542 146,197
Rest of Europe 7,863 6,264
North America 36,679 38,561
181,084 191,022
Before goodwill Goodwill Before goodwill Goodwill
amortisation and amortisation and amortisation and amortisation and
exceptional exceptional 2003 exceptional exceptional 2002
items items T otal items items T otal
Profit before interest by activity £000 £000 £000 £000 £000 £000
Components 4,733 (568) 4,165 5,512 (910) 4,602
Chemicals 5,021 (1,324) 3,697 5,236 (2,325) 2,911
Repair and overhaul 1,551 (148) 1,403 1,661 (99) 1,562
11,305 (2,040) 9,265 12,409 (3,334) 9,075
2003 2002
Profit before interest by origin £000 £000
United Kingdom 7,313 5,784
Rest of Europe 270 739
North America 1,682 2,552
9,265 9,075
4. Notes [c87586]  10/6/03  4:16 pm  Page 24 2003 2002
Net assets by activity £000 £000
Components 44,055 46,587
Chemicals 43,639 46,505
Repair and overhaul 8,018 7,541
Holding company (31,611) (36,518)
64,101 64,115
2003 2002
Net assets by origin £000 £000
United Kingdom 21,716 16,314
Rest of Europe 4,010 2,464
North America 38,375 45,337
64,101 64,115
2 Staff numbers and costs
2003 2002
Average numbers employed, including Directors T otal Total
Components 356 351
Chemicals 268 269
Repair and overhaul 156 159
Holding company 8 8
788 787
2003 2002
Aggregate payroll costs £000 £000
Wages and salaries 18,502 17,846
Social security costs 1,742 1,661
Other pension costs 910 831
21,154 20,338
Details of Directors’ remuneration and options are set out in the Directors’ Remuneration Report on pages 13 to 17.
3 Operating profit
2003 2002
Operating profit is stated after charging/(crediting) £000 £000
Depreciation charge on tangible fixed assets
assets owned 1,742 1,772 
assets held under hire purchase agreements 206 149 
Goodwill amortisation 2,212 2,234
Auditors’ remuneration as auditors 190 159 
Operating lease charges
plant, machinery and vehicles 185 169
land and buildings 1,442 1,429 
(Gain)/loss on foreign exchange translation (435) 45
Profit on sale of tangible fixed assets (45) (74)
In addition to audit fees shown above, non-audit fees of £79,000 (2002: £282,000) were paid to the auditors and their associates including
£Nil (2002: £256,000) relating to due diligence assistance and regulatory work on acquisitions. The Company’s audit fee amounted to
£24,000 (2002: £23,000).
Notes to the Financial Statements
25
4. Notes [c87586]  10/6/03  4:16 pm  Page 25 4 Goodwill amortisation and exceptional items
2003 2002
£000 £000
Goodwill amortisation 2,212 2,234
Operating exceptional items
Re-organisation costs 232 –
Stock provisions and re-organisation costs incurred as a consequence
of the business downturn after 11 September 2001 – 1,100
Non-operating exceptional item
Profits on disposal of land and buildings (404) –
2,040 3,334
5 Interest
2003 2002
Interest receivable £000 £000
Interest on short term bank deposits 27 24
Other interest 1 31
Total interest receivable 28 55
Interest payable
On bank loans and overdrafts repayable within five years (1,119) (2,310)
Finance charges payable in respect of HP agreements and finance leases (41) (30)
Other interest (4) (9)
Total interest payable (1,164) (2,349)
Net interest payable (1,136) (2,294)
6 T axation on profit on ordinary activities
2003 2002
£000 £000
UK taxation at 30% (2002: 30%) – current year 2,244 1,844
UK taxation at 30% (2002: 30%) – on non-operating exceptional item 140 –
UK taxation at 30% (2002: 30%) – prior years (208) (19)
Overseas taxation 1,472 (875)
Current taxation 3,648 950
Deferred taxation – current year (685) 1,726
Deferred taxation – prior years (23) –
2,940 2,676
The current taxation charge for the year is above the standard rate of UK corporation tax. The reasons for this are as follows: 
2003 2002
£000 £000
Profit on ordinary activities before taxation 8,129 6,781
Profit on ordinary activities before taxation multiplied by the standard rate of UK corporation tax 2,439 2,034
Effects of:
Income and expenditure timing differences 651 (1,406)
Expenses not deductible for taxation purposes (principally goodwill amortisation) 393 383
Writing down allowances in excess of depreciation and amortisation 34 (188)
Higher taxation rates on overseas earnings 173 146
Overseas losses not utilised for taxation purposes 166 –
Adjustments in respect of prior years (208) (19)
Current taxation charge 3,648 950
Notes to the Financial Statements UMECO plc Annual Report 2003
26
Notes to the Financial Statements
For the year ended 31 March 2003
4. Notes [c87586]  10/6/03  4:16 pm  Page 26 7 Dividends
2003 2002 
£000 £000
Interim paid 20 December 2002 - 4.00p per share (2002: 3.25p) 976 793
Proposed final - 8.5p per share (2002: 8.75p) 2,074 2,135
Final 2001 - 8.75p per share on shares issued in June 2001 – 434
Total - 12.5p per share (2002: 12.0p) 3,050 3,362
The proposed final dividend is payable on 8 August 2003 to shareholders registered on 11 July 2003.
8 Profit attributable to the Company
The profit for the financial year in the accounts of UMECO plc was £2,544,000 (2002: £3,890,000).
9 Earnings per share
Earnings per share is calculated on profits on ordinary activities after taxation for the year attributable to shareholders of £5,099,000 (2002:
£4,010,000). Earnings before goodwill amortisation and exceptional items, which provides a consistent measure of operating performance,
were £6,755,000 (2002: £6,727,000). The weighted average number of ordinary shares in issue was 24,397,700 (2002: 23,360,700).
The weighted average number of shares on a fully diluted basis was 24,431,200 (2002: 23,375,600), after an adjustment for dilutive share
options of 33,500 (2002: 14,900).
10 Intangible fixed assets
Goodwill was purchased on the acquisition of Titanox Aerospace SA on 1 January 2003, as shown in note 22. Further goodwill arose on
the Group’s investment in Aerovac Italia S.R.L.
Net book
Cost Amortisation value
Group £000 £000 £000
At start of year 45,722 (4,238) 41,484
Goodwill arising on acquisition of Titanox Aerospace SA 1,538 – 1,538
Goodwill arising on investment in Aerovac Italia S.R.L. 16 – 16
Foreign exchange translation (3,199) 254 (2,945)
Amortisation charge for the year – (2,185) (2,185)
At end of year 44,077 (6,169) 37,908
Notes to the Financial Statements
27
4. Notes [c87586]  10/6/03  4:16 pm  Page 27 11 T angible fixed assets
Plant
Land and buildings machinery
Freehold Leasehold property fixtures & IT Motor
property long short equipment vehicles Total
Group £000 £000 £000 £000 £000 £000
Cost
At start of year 4,269 909 978 10,809 2,354 19,319
Acquisitions – – 1 9 – 10
Foreign exchange translation 43 – (10) (52) (1) (20)
Additions 118 21 61 1,085 646 1,931
Disposals – (374) – (95) (606) (1,075)
At end of year 4,430 556 1,030 11,756 2,393 20,165
Depreciation
At start of year 574 307 332 7,328 1,181 9,722
Foreign exchange translation 11 – (6) (15) – (10)
Charge for the year 94 18 89 1,122 625 1,948
Disposals – (228) – (78) (497) (803)
At end of year 679 97 415 8,357 1,309 10,857
Net book value
At end of year 3,751 459 615 3,399 1,084 9,308
At start of year 3,695 602 646 3,481 1,173 9,597
Net book value of tangible fixed assets at 31 March 2003 includes £600,000 (2002: £407,000) in respect of assets acquired under HP
agreements and finance leases. The net book value of freehold land and buildings includes £551,000 (2002: £516,000) in respect of land.
Fixtures & Motor
equipment vehicles Total
Company £000 £000 £000
Cost
At start of year 93 232 325
Additions 15 35 50
Group transfers – 23 23
Disposals – (74) (74)
At end of year 108 216 324
Depreciation
At start of year 58 88 146
Group transfers – 6 6
Charge for the year 18 70 88
Disposals – (41) (41)
At end of year 76 123 199
Net book value 
At end of year 32 93 125
At start of year 35 144 179
Notes to the Financial Statements UMECO plc Annual Report 2003
28
Notes to the Financial Statements
For the year ended 31 March 2003
4. Notes [c87586]  10/6/03  4:16 pm  Page 28 12 Investments
Investment in associate
Group £000
Share of net assets of Titanox Aerospace SA at start of year 704
Share of retained loss for the nine month period prior to acquisition (226)
Foreign exchange translation 38
Transfer to subsidiary (516)
At end of year –
Goodwill on investment at start of year 124
Amortisation charge for the nine month period prior to acquisition (5)
Transfer to subsidiary (119)
At end of year –
Net book value 
At end of year –
At start of year 828
The remaining 60% of the share capital of Titanox Aerospace SA not owned by the Group at the start of the year was aquired on 1 January
2003. Details of the net assets acquired are set out in note 22. During the year ended 31 December 2002, Titanox Aerospace SA achieved
sales of £2,528,000 and a loss before and after taxation of £447,000. In the year ended 31 December 2001, Titanox Aerospace SA recorded
a loss after tax of £161,000.
The Group’s share of sales made by the associate in the period prior to acquisition was £734,000 (2002: £1,100,000), and the Group’s share
of the operating loss of the associate was £226,000 (2002: £37,000), which included a charge in respect of goodwill amortisation of £22,000
(2002: £22,000).
During the nine month period prior to the acquisition, the Group made sales to the associate of £10,000 (2002: £35,000). 
Investment in joint venture
Group £000
Investment in Wesupply Aerospace Limited 1
Share of retained loss for the period (9)
At end of year (8)
Goodwill arising on investment 15
Amortisation charge for the period (1)
At end of year 14
Net book value 
At end of year 6
At start of year –
Cost of investments in Group undertakings
Shares Loans Total
Company £000 £000 £000
Cost
At start of year 46,652 17,896 64,548 
Repayments – (382) (382)
Foreign exchange translation (940) – (940)
At end of year 45,712 17,514 63,226
Provision for diminution in value
At start and end of year (1,209) – (1,209)
Net book value
At end of year 44,503 17,514 62,017
At start of year 45,443 17,896 63,339
The principal Group undertakings are listed on pages 41 and 42. Their share capital consists entirely of ordinary shares other than
Pattonair Limited and G.R.P . Material Supplies Limited, whose share capital consists of ordinary and preference shares.
Notes to the Financial Statements
29
4. Notes [c87586]  10/6/03  4:16 pm  Page 29 13 Stocks
2003 2002
Group £000 £000
Raw materials 1,005 1,229
Work in progress 654 780
Finished goods and goods for resale 47,791 45,797
49,450 47,806
14 Debtors
Group Company
2003 2002 2003 2002 
£000 £000 £000 £000
Amounts falling due within one year
Trade debtors 34,144 31,000 – –
Amounts owed by Group undertakings – – 13,530 35,679
Amounts owed by associated undertaking – 13 – –
Other debtors 2,352 1,562 12 31
Prepayments and accrued income 1,193 1,254 150 124
Taxation recoverable 107 1,641 79 –
37,796 35,470 13,771 35,834
Amounts falling due after more than one year
Amounts owed by Group undertakings – – 21,103 3,078
Amounts owed by associated undertaking – 248 – –
Amounts owed by joint ventures 16 – – –
Other debtors – 35 – –
Deferred taxation 2,820 2,343 64 70
2,836 2,626 21,167 3,148 
40,632 38,096 34,938 38,982 
15 Creditors falling due within one year
Group Company
2003 2002 2003 2002 
£000 £000 £000 £000
Bank loans and overdrafts 10,208 12,036 18,188 13,549
Trade creditors 42,651 32,169 20 66
Amounts owed to Group undertakings – – 614 626
Amounts owed to associated undertaking – 7 – –
Other creditors including taxation and social security 4,440 4,445 71 489
Accruals and deferred income 3,275 3,560 387 759 
Proposed dividend 2,074 2,135 2,074 2,135
62,648 54,352 21,354 17,624 
Bank overdrafts are repayable on demand. Bank loans and overdrafts are unsecured.
Group Company
2003 2002 2003 2002
Other creditors including taxation and social security £000 £000 £000 £000
Corporation tax 1,967 1,560 – 389
Other taxes and social security 1,539 2,034 51 88
3,506 3,594 51 477
Obligations under HP agreements and finance leases 273 137 – –
Other creditors 661 714 20 12
4,440 4,445 71 489
Notes to the Financial Statements UMECO plc Annual Report 2003
30
Notes to the Financial Statements
For the year ended 31 March 2003
4. Notes [c87586]  10/6/03  4:16 pm  Page 30 16 Creditors falling due after one year
Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Bank loans falling due
– within 1 to 2 years 7,508 7,904 7,416 7,865
– between 2 and 5 years 3,732 11,838 3,708 11,798
Obligations under HP agreements and finance leases falling 
due within 1 to 2 years 225 201 – –
Amounts owed to Group undertakings – – 7,039 7,017 
11,465 19,943 18,163 26,680
17 Provisions for liabilities and charges
Deferred Long-term Restructuring Property
taxation incentive plan provision provision Total
Group £000 £000 £000 £000 £000
At start of year 294 107 259 72 732
Profit and loss account (11) (107) 73 – (45)
Utilised during year – – (332) (14) (346)
At end of year 283 – – 58 341
Long-term Restructuring Property
incentive plan provision provision Total
Company £000 £000 £000 £000
At start of year 107 135 72 314
Profit and loss account (107) – – (107)
Utilised during year – – (20) (20)
At end of year – 135 52 187
Details of the long-term incentive plan are set out in the Directors’ Remuneration Report on pages 13 to 17. The property provision relates
to further costs expected to be incurred in relation to the Group’s properties.
18 Deferred taxation
Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Opening net asset/(provision) 2,049 (52) 70 46
Deferred taxation on acquisition – 3,862 – –
Foreign exchange translation (220) (35) – –
Credit/(charge) for the year 708 (1,726) (6) 24
Closing net asset 2,537 2,049 64 70
The closing deferred taxation net asset has been disclosed as:
Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Deferred taxation asset - note 14 2,820 2,343 64 70
Deferred taxation liability - note 17 (283) (294) – –
2,537 2,049 64 70
Notes to the Financial Statements
31
4. Notes [c87586]  10/6/03  4:16 pm  Page 31 Notes to the Financial Statements UMECO plc Annual Report 2003
32
Notes to the Financial Statements
For the year ended 31 March 2003
The timing differences comprised:
Group Company
2003 2002 2003 2002
Deferred taxation assets/(liabilities) £000 £000 £000 £000
Fixed asset related differences (399) (338) 26 17
Capital gain rolled over (110) (110) – –
Other timing differences 3,046 2,497 38 53
2,537 2,049 64 70
19 Share capital
2003 2002
Ordinary shares of 25p Number £000 Number £000
Authorised 30,000,000 7,500 30,000,000 7,500
Allotted, called up and fully paid
At start of year 24,397,671 6,099 19,430,972 4,858
One for four rights issue –– 4,857,450 1,214
Share options exercised –– 51,144 12
Shares issued on vesting of LTIP awards –– 58,105 15
At end of year 24,397,671 6,099 24,397,671 6,099
Share options
Outstanding Granted Outstanding
Exercise at start during Lapsed at end
price (pence) of year year in year of year
Executive share option schemes 277.8 – 219,196 – 219,196
SAYE scheme – 2000 grant 478.3 66,785 – (66,461) 324
SAYE scheme – 2001 grant 441.0 102,738 – (65,389) 37,349
SAYE scheme – 2002 grant 202.0 – 451,534 (4,209) 447,325
Total of all schemes 169,523 670,730 (136,059) 704,194
Details of the SAYE scheme and other share option schemes are set out in the Directors’ Remuneration Report on pages 13 to 17, which
also includes full details of Directors’ share options.
No options have been granted or exercised in the period between 31 March 2003 and the date of these financial statements. 
20 Reserves
Share Profit
Premium and loss
account account
Group £000 £000
At start of year 49,634 8,372
Retained profit for the year – 2,049
Foreign exchange translation – (2,064)
At end of year 49,634 8,357
The cumulative amount of goodwill written off directly to the profit and loss account prior to the adoption of FRS 10 is £11,006,000 
(2002: £11,006,000).
Share Profit
Other premium and loss
reserves account account
Company £000 £000 £000
At start of year 111 49,634 2,039
Retained profit for the year – – (506)
At end of year 111 49,634 1,533 Notes to the Financial Statements
33
21 Commitments
2003 2002
Group capital commitments £000 £000
Contracted 65 113
No provision has been made in these financial statements for the above commitments.
Operating lease commitments 2003 2002
Land and Other Land and Other
buildings assets buildings assets
Group £000 £000 £000 £000
Leases expiring within one year 215 23 93 48
Leases expiring between two and five years 267 178 266 123
Leases expiring after five years 1,090 – 804 –
1,572 201 1,163 171
Company
Leases expiring within one year 15 –––
Leases expiring between two and five years – –39 –
15 –39 –
22 Acquisition of subsidiary undertakings
Acquisition of Titanox Aerospace SA
Alignment of
Book accounting Fair value Fair
value policies adjustments value
Net assets acquired £000 £000 £000 £000
Intangible fixed assets 1,035 (1,035) – –
Tangible fixed assets 10 – – 10
Stock 1,158 – (277) 881
Debtors 852 – (27) 825
Cash (150) – – (150)
Creditors (1,570) – (8) (1,578)
Bank loan (52) – – (52)
1,283 (1,035) (312) (64)
Goodwill 1,538
Cost of assets acquired 1,474
Satisfied by:
Transfer from investment in associate 635
Cash paid including expenses 674
Items accrued at end of year 165
1,474
The fair value adjustments relate to the valuation of net current assets, principally the basis of stock provisioning.
Cash flow effect of acquisitions
£000
Acquisition of Titanox Aerospace SA
Cash paid as above 674
Bank overdraft acquired 150
Acquisition of Abscoa, Inc.
Final payment of consideration and expenses 381
Goodwill acquired
Aerovac Systems Italia S.R.L. 16
Wesupply Aerospace Limited 15
Net cash outflow from acquisitions 1,236
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 33 The acquisition of Titanox Aerospace had the following effect on the Group’s cash flow:
£000
Net cash inflow from operating activities (4)
Cash outflow from capital expenditure (2)
Net cash inflow (6)
23 Reconciliation of operating profit to net cash inflow from operating activities
2003 2002
£000 £000
Operating profit 8,861 9,075
Depreciation charges 1,948 1,921
Amortisation of goodwill (excluding charge in associate) 2,185 2,212
Profit on sale of tangible fixed assets (45) (74)
Increase in stocks (1,506) (2,528)
(Increase)/decrease in debtors (2,622) 8,027
Increase/(decrease) in creditors 8,704 (6,679)
Decrease in provisions (380) (560)
Net cash inflow from operating activities 17,145 11,394
24 Reconciliation of net cash flow to movement in net debt
2003 2002
£000 £000
Increase in cash 550 2,018
Repayment of bank loans 7,500 22,990
Cash outflow from reduction in HP and lease financing 289 198
Decrease in net debt resulting from cash flows 8,339 25,206
Inception of bank loans – (15,000)
Inception of HP agreements and finance leases (449) (361)
Loans taken on with acquisition (52) –
Foreign exchange translation 2,252 (54)
Decrease in net debt 10,090 9,791
Net debt at start of year (30,785) (40,576)
Net debt at end of year (20,695) (30,785)
25 Analysis of changes in net debt
Foreign
exchange Other Cash
2002 translation changes Acquisition flows 2003
£000 £000 £000 £000 £000 £000
Cash 1,331––– (80) 1,251
Overdrafts (4,132) 747 – – 630 (2,755)
(2,801) 747 – – 550 (1,504)
Bank loans due within one year (7,904) 593 (7,642) – 7,500 (7,453)
Bank loans due after one year (19,742) 912 7,642 (52) – (11,240)
HP agreements and finance leases (338) – (449) – 289 (498)
(30,785) 2,252 (449) (52) 8,339 (20,695)
Other changes represent the value of inceptions of HP agreements and finance leases during the year and reclassifications of bank loans
based on their due dates.
Notes to the Financial Statements UMECO plc Annual Report 2003
34
Notes to the Financial Statements
For the year ended 31 March 2003 Notes to the Financial Statements
35
26 Pensions
As explained in the accounting policies set out on page 22 the Group operates several pension schemes, the assets of which are held
separately from those of the Group. The Group has continued to account for pensions in accordance with SSAP 24 and the disclosures
given in section (a) of this note are those required by that standard. In accordance with FRS 17 ‘Retirement Benefits’, the phased
transitional disclosures required in relation to defined benefit schemes operated by the Group are set out in section (b) of this note.
(a) UMECO Group pension schemes
The UMECO plc Group scheme has two sections. The defined benefit section, which is closed to new entrants, provides benefits based on
final pensionable pay with contributions being charged to the profit and loss account 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 2002. The assumptions which have
the most significant effects on the results of the valuation are those relating to the rate of return on investments (7% per annum) and the
rates of increase in salaries (4.5 – 5.75% per annum) and pensions (3.25 – 3.5% per annum). The 1 April 2002 valuation showed that the
actuarial value of the defined benefit section’s assets was £4,372,000 which represented 85% 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 currently
14.2% and 4.5% to 6.5% of earnings respectively. Contributions amounting to £234,000 (2002: £247,000) were payable to the defined benefit
section of the scheme in the year, of which £21,000 (2002: £23,000) was outstanding at the year end. 
The UMECO plc Group scheme also has a defined contribution section. Members of this section contribute between 2% and 6% of
pensionable earnings, with the Group making contributions of between 4% and 10%. Contributions amounting to £366,000 (2002:
£341,000) were payable to this section of the scheme in the year, of which £21,000 was outstanding at the year end (2002: £31,000).
The trustees of the UMECO plc Group scheme are chaired by one of the Company’s non–executive Directors and an independent expert in
pension matters is normally in attendance at meetings of the trustees. Responsibility for investment of the scheme’s funds has been
delegated by the trustees to professional investment managers. In accordance with best practice the Company’s pension scheme
investment managers are not permitted to invest funds in the Group’s own assets or shares.
As described in the Directors’ Remuneration Report set out on pages 13 to 17 the Company operates a defined contribution scheme in
respect of Clive Snowdon, and similar arrangements are operated for one other executive. Total contributions of £61,000 were payable to
these schemes for the year, of which none were outstanding at the year end (2002: £2,000).
G.R.P . Material Supplies, Med-Lab and RD Taylor operate defined contribution schemes for qualifying employees. Employer contributions
are a maximum of 10% and employees are encouraged to contribute at similar rates. Total contributions of £86,000 were payable in
respect of the year. Aeropia and Aerovac Systems contribute amounts to the personal pension schemes of certain employees. The total of
such contributions paid in the year was £14,000 and there were no outstanding payments of contributions at the year end.
The Group operates defined contribution schemes in respect of certain businesses in the United States and France. Contributions to these
schemes during the year totalled £149,000.
(b) FRS 17 disclosures
The information required for these disclosures has been obtained by an updating of the actuarial valuation referred to above, which was
carried out by an independent qualified actuary.
The assumptions used to calculate scheme liabilities for the purposes of these disclosures are as follows: 
2003 2002
% %
Rate of increase in pensionable salaries:
– executive members 4.75 5.00
– staff members 3.75 4.00
Rate of increase of pensions in payment 2.60 2.80
Discount rate 5.30 5.90
Inflation 2.60 2.80
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 35 Notes to the Financial Statements UMECO plc Annual Report 2003
36
Notes to the Financial Statements
For the year ended 31 March 2003
The expected rates of return and market values of the assets of the defined benefit section of the UMECO Group scheme were as follows:
2003 2002
% £000 % £000
Equities 8.5 2,793 8.0 4,124
Bonds 4.6 419 5.5 464
Cash 4.0 356 4.0 264
Market value of scheme assets 3,568 4,852
Present value of scheme liabilities (6,751) (5,674)
Deficit in the scheme (3,183) (822)
Deferred taxation 955 247
Net pension liability (2,228) (575)
Analysis of the amount that would have been charged to operating profit:
2003
£000
Current service cost 199
Past service cost –
Total operating charge 199
Analysis of the amount that would have been credited to other financing income:
2003
£000
Expected return on pension scheme assets 361
Interest on pension scheme liabilities (341)
Other financing income 20
Analysis of the actuarial loss that would have been recognised in the Statement of Total Recognised Gains and Losses:
2003
£000
Actual return less expected return on pension scheme assets (1,623)
Experience gains and losses arising on scheme liabilities (239)
Changes in assumptions underlying the present value of scheme liabilities (550)
Actuarial loss (2,412)
Analysis of movement in deficit during the year:
£000
Deficit in the scheme at 31 March 2002 (822)
Current service cost (199)
Employer contributions paid 230
Other finance income 20
Actuarial loss for the year (2,412)
Deficit in the scheme at 31 March 2003 (3,183)
History of experience of gains and losses over the year to 31 March 2003:
£000
Difference between the expected and actual return on scheme assets
Amount (1,623)
As a percentage of scheme assets (45)%
Experience gains and losses on scheme liabilities
Amount (239)
As a percentage of the present value of scheme liabilities (4)%
Total amount recognised in the Statement of Total Recognised Gains and Losses
Amount (2,412)
As a percentage of the present value of scheme liabilities (36)%
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 36 Had the Group adopted the full requirements of FRS 17 in the preparation of these financial statements, the amounts disclosed for net
assets and the profit and loss account reserve would have been as follows:
2003 2002
£000 £000
Net assets
Excluding net pension liability 64,101 64,115
Net pension liability (2,228) (575)
Restated to include net pension liability 61,873 63,540
Profit and loss reserve
Excluding net pension liability 8,357 8,372
Net pension liability (2,228) (575)
Restated to include net pension liability 6,129 7,797
The Company is a member of the defined benefit section of the Group pension scheme. Since the Company is unable to identify its share
of the scheme assets and liabilities on a consistent and reasonable basis, when FRS 17 is fully adopted, the scheme will be accounted for
by the Company as if it was a defined contribution scheme.
27 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 2003 amounted to £497,000 (2002: £563,000). Under a Group registration the Company is jointly and severally liable for value
added tax due by other Group companies. At 31 March 2003 this contingent liability amounted to £1,013,000 (2002: £978,000).
28 Financial instruments
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 and other hedging instruments where it is thought necessary to use such
instruments to manage the exposure to foreign exchange movements. There were no hedging instruments in place at the end of the
financial year.
The currency and interest rate exposure of net debt at 31 March 2003 was:
Floating Weighted Weighted
Net rate net Fixed rate average fixed average time
(debt)/funds funds/(debt) debt interest rate of fixed rate
£000 £000 £000 % years
Sterling 26 8,857 (8,831) 5.1 0.4
US Dollar (20,371) (10,165) (10,206) 2.8 0.4
Euro (350) (197) (153) 4.0 3.0
(20,695) (1,505) (19,190) 3.9 0.4
The equivalent figures at 31 March 2002 were:
Floating Weighted Weighted
Net rate net Fixed rate average fixed average time
(debt)/funds funds/(debt) debt interest rate of fixed rate
£000 £000 £000 % years
Sterling (2,393) 9,612 (12,005) 5.6 0.2
US Dollar (28,642) (12,781) (15,861) 3.4 0.2
Euro 250 368 (118) 4.0 4.0
(30,785) (2,801) (27,984) 4.4 0.2
Notes to the Financial Statements
37
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 37 Monetary assets and liabilities by currency at 31 March 2003, excluding the functional currency of each operation, were:
Sterling US dollar Euro Total
Functional currency £000 £000 £000 £000
Sterling – (20,240) 868 (19,372)
US dollar – – 21 21
Euro (35) 594 – 559
Total (35) (19,646) 889 (18,792)
The equivalent values at 31 March 2002 were:
US dollar Euro Total
Functional currency £000 £000 £000
Sterling (15,451) 379 (15,072)
Euro 860 – 860
Total (14,591) 379 (14,212)
The maturity of the Group’s financial liabilities is set out in notes 15 and 16.
At 31 March 2003, the fair value of the Group’s financial instruments was the same as the book value of the instruments. Interest rates are
managed using fixed and floating rate debt. Fixed rate debt primarily comprises bank loans, on which interest is based on LIBOR. Floating
rate debt comprises cash at bank and overdrafts, on which interest is related to bank base rates.
As at 31 March 2003, the principal borrowing facilities available to the Group were committed term loans of £18.7 million and a £10.0
million overdraft facility. As set out in the Finance Director’s Review, the Group has agreed total facilities of £35.0 million since the year
end, including term loans of £21.0 million repayable in equal half yearly instalments over seven years.
Notes to the Financial Statements UMECO plc Annual Report 2003
38
Notes to the Financial Statements
For the year ended 31 March 2003
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 38 Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of
affairs of the Company and the Group and of the profit or loss for that year. In preparing those financial statements, the Directors are
required to:
l select suitable accounting policies and then apply them consistently;
l make judgements and estimates that are reasonable and prudent;
l state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements;
l prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the Group will remain in
business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the 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.
Statement of Directors’ Responsibilities
39
Statement of Directors’ Responsibilities
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 39 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF UMECO plc
We have audited the financial statements on pages 18 to 38. 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, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
The Directors are responsible for preparing the Directors’ Report and the Directors’ Remuneration Report. As described on page 39, this
includes responsibility for preparing the financial statements in accordance with applicable United Kingdom law and accounting standards.
Our responsibilities, as independent auditors, are established in the United Kingdom by statute, the Auditing Practices Board, the Listing Rules
of the Financial Services Authority, and by our profession’s ethical guidance.
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. We also report
to you if, in our opinion, the Directors’ report is not consistent with the financial statements, if 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 transactions with the Group is not disclosed.
We review whether the statement on pages 11 and 12 reflects the Company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules, 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 accompanying the Annual Report, including the Corporate Governance statement and the unaudited part of the
Directors’ Remuneration 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.
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards 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 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.
Opinion
In our opinion:
l the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 March 2003 and of the profit
of the Group for the year then ended; and
l 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.
KPMG Audit Plc 3 June 2003
Chartered Accountants
Registered Auditor
Birmingham
Report of the Auditors UMECO plc Annual Report 2003
40
Report of the Auditors
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 40 UMECO Components Chief executive Jason Crabtree
Commercial director Ian Davies
PATTONAIR LIMITED
Provider of inventory management systems, and distributor of components to the aerospace and defence industry
www.pattonair.com
Managing director Alan Fisher
Finance director Mike Harding
Commercial director Hugh Morgan
Procurement director Glen Pogson
PATTONAIR GmbH Provider of inventory management systems to the aerospace and defence
industry
TITANOX AEROSPACE SA
Distributor of components to the aerospace industry
General manager Jean-Michel Tabart
ABSCOA, INC.
Provider of inventory management and fastener distribution programmes to the aerospace and defence industry
www.abscoa.com
President Bob Wilson
Vice president – finance Nathan Hawkins
Vice president – sales Larry Adams
ULOGISTICS LIMITED
Specialist provider of global inventory management solutions to the aerospace industry
www.ulogistics.com
Managing director Chris Turner
Director & general manager David Wilkins
Finance director Mike Giles
Materials director Paul Egan
Operations director Wayne Hollinshead
Quality & business 
improvement director Andy Yates
WESUPPLY AEROSPACE LIMITED Provider of software supply solutions to the aerospace industry
www.wesupply.aero
COMPSTOCK ELECTRONICS LIMITED
Distributor of capacitors and other passive components to the defence and avionics industry
www.compstock.co.uk
Managing director Bill McKnight
Finance director Maurice Lee
Sales director David Hart
Marketing director Paul Green
List of Principal Businesses
41
List of Principal Businesses
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 41 List of Principal Businesses UMECO plc Annual Report 2003
42
List of Principal Businesses
UMECO Chemicals Chief executive Andrew Moss
AEROPIA LIMITED
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
AEROPIA, INC. Distributor of lubricants, chemicals, composite materials, adhesives, sealants
and coatings to the aerospace industry
AEROVAC SYSTEMS LIMITED
Distributor and manufacturer of vacuum bagging materials and systems principally to the aerospace industry
www.aerovac.com
Managing director Kai Arter
Finance director Matt Goldstein
Sales director Linda Bell
AEROVAC SYSTEMES FRANCE SARL
Distributor and manufacturer of vacuum bagging materials and systems principally to the aerospace industry
www.aerovac.com
Director Fabien Baumann
RICHMOND AIRCRAFT PRODUCTS, INC.
Distributor of vacuum bagging materials and structural foam products principally to the aerospace industry
www.richmondaircraft.com
President Joerg Hubl
Vice president – finance Tom Naddy
Vice president – operations Rick Fulton
Vice president – sales Steve duBois
G.R.P . MATERIAL SUPPLIES LIMITED
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
Distributor of aircraft fuel testing equipment and materials used in the overhaul and maintenance of aircraft engines
www.med-lab.co.uk
Managing director Mark Knight
Sales director Steve King
RD TAYLOR & COMPANY LIMITED
Distributor of adhesives, sealants and lubricants principally to the aerospace and defence industry
www.rdtaylor.co.uk
Managing director Andy Drummond
Finance director Denise Callaghan
Repair and Overhaul
AEM LIMITED
Provider of aircraft component repair and overhaul services
www.aem.co.uk
Managing director John Smith
Operations director Roger Tyrie
Commercial director Graham Preston
All the trading subsidiaries of UMECO plc are 100% owned, incorporated in and operated in Great Britain and registered in England and Wales,
with the following exceptions: RD Taylor & Company Limited, which is registered in Scotland, Richmond Aircraft Products, Inc., Abscoa, Inc.
and Aeropia,Inc., which are incorporated and operated in the United States, Pattonair GmbH, which is incorporated and operated in Germany,
Aerovac Systemes France sarl, which is 80% owned and incorporated and operated in France, and Titanox Aerospace SA, which is
incorporated and operated in France. Notice of Annual General Meeting
43
Notice is hereby given that the Annual General Meeting of the Company will be held at The Falstaff Hotel, Warwick New Road, Leamington Spa,
Warwickshire, CV32 5JG on Wednesday 23 July 2003 at 1 pm for the purposes of considering and, if thought fit, passing the following
resolutions as Ordinary Resolutions in the case of resolutions 1 to 7 and as a Special Resolution in the case of resolution 8:
Ordinary Business
1. To receive and adopt the financial statements of the Company for the year ended 31 March 2003 together with the report of the
Directors thereon.
2. To approve and adopt the Directors’ Remuneration Report for the year ended 31 March 2003.
3. To declare a final dividend of 8.5p per 25p ordinary share in respect of the year ended 31 March 2003.
4. To re-elect Richard John Kirby Beaumont 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. 
5. To re-elect John Sidney Harper a Director of the Company.
John Harper joined the Board as a non-executive Director in 1995. 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.
6. To re-appoint KPMG Audit Plc as auditors of the Company and to authorise the Directors to fix their remuneration.
7. That the Board be and it is hereby generally and unconditionally authorised in substitution for the authority conferred on it on 1 August
2002 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 £1,202,503.50, which represents approximately 20% of the current issued share capital, which
authority shall expire at the conclusion of the Annual General Meeting of the Company in 2004 (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.
Special Business
8. 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
£304,970.75, which represents approximately 5% of the current issued share capital,
and shall expire at the conclusion of the Annual General Meeting of the Company in 2004, 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.
By Order of the Board
SJ BOWERS ACA, Company Secretary
UMECO plc
Concorde House
24 Warwick New Road
Leamington Spa
Warwickshire 
CV32 5JG
17 June 2003
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.
Forms of proxy, if used, must be lodged with the Company’s Registrars, Capita Registrars, Proxy Department, The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4TU, no later than 1 pm on Monday, 21 July 2003. 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 12.30 pm until the conclusion of the Meeting.
Notice of Annual General Meeting
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 43 Shareholder Notes UMECO plc Annual Report 2003
44
Shareholder Notes
5. Notes_End [c87586]  10/6/03  4:16 pm  Page 44 UMECO plc
Concorde House, 24 Warwick New Road, Leamington Spa, Warwickshire CV32 5JG
Telephone: 01926 331800 Facsimile: 01926 312680
www.umeco.com
annual report 2003
UMECO plc annual report 2003