14636 11042008 proof 10 14636 11042008 proof 10
registered office
ardath road kings norton
birmingham b38 9pn
tel 0121 433 3444
fax 0121 433 3325
website wwwmetalraxgroupcouk
email infometalraxgroupcouk
registered in england 793639
metalrax group plc
annual report 2007
metalrax group plc          annual report 2007
14636metalraxcov spinelayout 1  12408  1003  page 4 14636 11042008 proof 10 14636 11042008 proof 10
during 2007 the group operated through three distinct divisions
housewares
engineering support services
automotive
metalrax group plc make and supply specialist
steel products worldwide operating in niche
markets with significant barriers to entry
welcome to metalrax
annual report 2007 stock code mrx metalrax group plc
contents
ii headlines 1 ii group at a glance 2 ii chairman’s statement 4 ii chief executive’s review of strategy 6
ii chief executive’s review of operations 8 ii operating environments risks and uncertainties 15
ii corporate and social responsibility 16 ii financial review 18 ii board of directors 20 ii executive board 21
ii directors and advisers 22 ii report of the directors 24 ii corporate governance 26
ii directors’ remuneration report 30 ii report of the independent auditors 35 ii consolidated income statement 38
ii statement of recognised income and expense 39 ii consolidated balance sheet 40 ii company balance sheet 41
ii cash flow statements 42 ii accounting policies 43 ii notes to the account 49 ii shareholder information 70
ii five year record 71 ii notice of meeting 72 ii group operations 77
metalrax niche
annual report 2007 77 metalrax group plc
group operations
housewares 
gw international
formerly george wilkinson burnley and microwise
cookware
progress works elm street 
burnley lancashire bb10 1pb
tel 01282 415511   fax 01282 433112
‘progress’ consumer bakeware kitchen tools and
gadgets
‘microwise’ microwave cookware
samuel groves
norton street hockley birmingham b18 5rq
tel 0121 554 2001  fax 0121 523 2924
‘mermaid‘ bakeware and cookware
‘longlife‘ catering equipment
rta 
station road great ryburgh 
fakenham norfolk nr21 0dx
tel 01328 829292   fax 01328 829667
wood and metal wine racks
innovative kitchen products
bathroom furniture
mrx china limited
room 1307–8 dominion centre
43–59 queens road east wanchai hong kong
enquiries to gw international
engineering support 
services  
advanced handling
northfields industrial estate
market deeping peterborough pe6 8ld
tel 01778 345365   fax 01778 341654
providing integrated handling solutions
commercial bearings
bordesley green road birmingham b9 4tp
tel 0121 766 1370   fax 0121 773 8238
industrial bearings
cooper coated coil
great bridge street west bromwich
west midlands b70 0dj
tel 0121 521 1500   fax 0121 521 1526
surface coated metals
down and francis
ardath road kings norton birmingham b38 9pn
tel 0121 433 3300   fax 0121 459 9222
structural engineering and steel fabrications
fabricote
unit 38 planetary industrial estate
planetary road wednesfield 
wolverhampton wv13 3xb
tel 01902 864422   fax 01902 305442
surface coated metals
makespace mezzanine floors
unit 1 millfield road industrial estate
donington spalding lincolnshire pe11 4ur
tel 01775 822060   fax 01775 822061
lightweight mezzanine floors 
metalrax
bordesley green road birmingham b9 4tp
tel 0121 772 8151   fax 0121 772 6135
storage systems shelving 
and roller conveyor systems
premier architectural metalwork
unit 300 catesby park eckersall road 
kings norton birmingham b38 8se
tel 0121 451 1212   fax 0121 451 1220
architectural metalwork
sections and tubes
hall street west bromwich 
west midlands b70 7dw
tel 0121 553 2721   fax 0121 500 5002
cold rolled metal sections
stackright building systems
charleywood road knowsley industrial park north
kirkby merseyside l33 7sg
tel 0151 548 3666   fax 0151 548 3777
and units 1 and 2 bloxwich road 
walsall ws2 7bd
tel 01922 474455 fax 01922 474477
building systems
welland engineering supplies
northfields industrial estate
market deeping peterborough pe6 8ld
tel 01778 380371   fax 01778 346916
distributor of fasteners hand tools 
and maintenance products 
automotive 
bacol fine blanking
business sold 14 february 2008
sherwood road aston fields industrial estate
bromsgrove worcestershire b60 3dr
tel 01527 874205   fax 01527 833761
fine blanking to 630 tonnes capacity
mrx automotive
formerly bacol industries 
kenham tools and pressings and prescott powell
middlemore industrial estate middlemore road
smethwick west midlands b66 2eq
tel 0121 558 3911   fax 0121 558 8798
presswork to 700 tonnes capacity
deep drawing and ironing
tube manipulation and assemblies
bsc diecasting
fryers close bloxwich walsall 
west midlands ws3 2xq
tel 01922 710070   fax 01922 408008
zinc and aluminium pressure diecasting
toolspec
sedgwick road luton bedfordshire lu4 9dt
tel 01582 572626   fax 01582 596891
tube manipulation and assemblies
weston body hardware
crossgate road park farm industrial estate
redditch worcestershire b98 7sn
tel 01527 516060   fax 01527 526060
locks handles latches and ancillary products
mrx romania
hidrosib sa
sibiu romania
enquiries to mrx automotive 
engineering and manufacturing facilties 
this document is printed on take 2 offset
made from 100 recycled fibres sourced
from post consumer waste only
14636metalraxcov spinelayout 1  12408  1002  page 2 annual report 2007 01 metalrax group plc
headlines
a challenging year in a rapidly changing global
economy with renewed focus and a new strategic
approach towards generating growth and
improving return for shareholders
results in brief
2007 2006
£000 £000
revenue 118647 120233
operating profit before taxation and exceptional items 3381 7007
group lossprofit before taxation 9956 6094
cash generated from operating activities 4684 2702
net debt 12531 10686
gearing 248 197
lossearnings per 5p ordinary share 583p 383p
dividends paid per 5p ordinary share 540p 540p
 exceptional items note 3 are items of income and expenditure that in the judgment of management should be disclosed separately on the basis that they are material either by their nature
or their size to the understanding of the financial statements and where not to do so would distort the comparability of financial performance between periods in 2007 the £122 million charge
comprised reorganisation costs losses on longterm contracts stock writedowns and property profits in 2006 the £04 million charge consisted of reorganisation costs property profits and a
discount on acquisition
operational
housewares restructuring completed during the year
helped the division’s operating margin grow from
48 to 71 and its return on net operating assets
increase to 107 from 66
restructuring of the board undertaken with a new
chief executive appointed during the year post year
end the team was further strengthened with the
appointment of a new group finance director and a
new nonexecutive director
changes to the board have led to a change of
strategic focus already being implemented
financial
despite the difficult year there was improved cash
generation from operating activities of £47 million
up from £27 million
net debt is well under control at £125 million
representing gearing of 248 only slightly up on last
year this leaves substantial headroom within our
existing borrowing facilities
turnover broadly unchanged at £1186 million 02
group at a glance
annual report 2007 stock code mrx metalrax group plc
metalrax specialist
housewares
housewares operations produce 
and market the majority of
bakeware sold in great britain
together with associated ranges of
kitchen tools to both retail and
commercial markets microwave
cookware and wine racks
complement these products
alongside wooden and plastic
housewares creatively designed
and sourced products for almost
every room in the house feature
strongly in ranges distributed
internationally
engineering 
support services
engineering support services provide
surface coated metals architectural
primary and secondary steelwork
mezzanine flooring and storage
equipment to an increasing number
of clients and also distribute tools
fasteners and janitorial products
automotive
automotive concentrates on
precision manufacturing activities
providing supplies to automotive
telecommunications offroad
vehicles enclosure hardware and
brewery bar display markets
operating in niche areas with
continuous process innovation
2007 and historical
during 2007 our operations were centred on 
the housewares engineering support services 
and automotive sectors
annual report 2007 stock code mrx metalrax group plc annual report 2007 03 metalrax group plc
consumer durables specialist engineering
2008 onwards
from 2008 our operations fall into one of two new
divisions designed to offer a more appropriate
representation of our evolving activities 04
chairman’s statement
annual report 2007 stock code mrx metalrax group plc
introduction
it has been a year of considerable change culminating in the
appointment of our new chief executive andrew richardson
in october the board has empowered andrew who has
successfully managed turnarounds and growth during his 20
years in manufacturing industry to lead metalrax through a
time of necessary strategic and structural change 
following the year end the conclusions of his initial strategic
review were announced and we have started to implement the
resultant actions further details are set out in his review of
strategy which follows this statement
results
for the year ended 31 december 2007 metalrax group plc
achieved revenue of £1186 million 2006 £1202 million
adjusted profit before exceptional items and tax was 
£23 million 2006 £65 million after exceptional items the
group incurred a loss before tax of £99 million adjusted
earnings per share before exceptional items were 126p 
2006 372p and basic lossearnings per share were 583p
2006 383p note 7
net debt at 31 december 2007 stood at £ 125 million 
31 december 2006 £107 million representing gearing 
of 248 2006 197
dividend
as indicated in our trading update of 16 january 2008 the
board has resolved to implement a new progressive and
sustainable policy whereby dividends payable by the 
company will be covered between 20 and 25 times by its
earnings accordingly following the interim dividend of 165
pence per share which was paid in october 2007 there will be
no final dividend payable in respect of the year ended 
31 december 2007
acquisitions and disposals
following the year end we acquired post glover lifelink inc
pgl from halma plc for a cash consideration of £30
million pgl which is based in erlanger kentucky usa is a
world leading manufacturer of isolated electrical power
systems and electrical raceways for the medical laboratory and
educational sectors the acquisition is in line with metalrax’s
new stated strategy to supplement organic growth through
selective acquisitions of complementary technologies and
companies it is immediately earnings enhancing and has been
funded from metalrax’s existing cash and debt facilities
in addition we subsequently disposed of the net assets of the
fine blanking business excluding its property debtors and
creditors for a cash consideration of approximately £05
million to rical limited this sale represented an important
step in the reorganisation of our existing operations and the
elimination of loss makers
we expect to make further acquisitions and disposals in the
future in terms of the latter we are reviewing our remaining
high volume low margin automotive businesses and our 
lossmaking romanian business 
alternative investment market aim
in light of our plans to make acquisitions and disposals and of
the company’s market capitalisation the board is proposing to
move the company’s shares from the main market to aim
the background to this proposal is set out in my letter
accompanying this annual report
the board and management
we have made further changes to the board structure during
2007 consistent with our board succession planning referred
to at the time of the interim results 
richard arbuthnot resigned as group chief executive on 
12 october 2007 having announced his retirement plans in
may 2007 he was succeeded by andrew richardson 
“it has been a year of considerable change
culminating in the appointment of our new 
chief executive andrew richardson in october”
john crabtree annual report 2007 05 metalrax group plc
following the year end william kelly resigned as group
finance director and company secretary by mutual consent
the board implemented robust interim arrangements to
manage the company’s financial reporting and controls 
while seeking a replacement and are pleased that with effect
from 2 april 2008 michael stock joins as the new group
finance director 
reg fort a nonexecutive director retired after the 2007
annual general meeting in may the board is delighted that ian
paling joins as a new nonexecutive director from 4 april 2008 
in addition to these changes since the appointment of
andrew richardson as chief executive fourteen senior
managers have left and nine new senior managers have been
appointed to the group
people
2007 has seen continued significant change throughout the
group and this has been well supported by our people on
behalf of the board i would like to express our gratitude for
their continued endeavours
executive benefits
the board believes that it is appropriate to bring the various
executive incentive plans up to date and in line with current
best practice mercer limited was appointed during 2007 to
review the exisiting provisions and changes arising from that
review are explained in the accompanying letter
pensions
the deficit in the metalrax defined benefit pension scheme has
increased from £32 million last year to £34 million this
scheme has been closed to new members since 1999 the
board remains comfortable with the current funding
arrangements for the scheme
advisers
following the year end we appointed arden partners plc as the
company’s stockbroker and in conjunction with nm
rothschild and sons limited who were appointed in 2007
financial adviser a fresh team brings new energy and expertise
that is enormously helpful in a turnaround situation and both
firms are specialists in advising companies of metalrax’s size
and nature 
outlook
the board believes that the group is in a very sound financial
position and has significant scope for improving its financial
performance the group’s balance sheet remains strong with
significant property assets and headroom within its current
banking facilities to underpin recovery and growth cash being
generated from operations will support the financial position
allowing appropriate investments in organic and where
appropriate acquisitive growth
within the group’s existing varied portfolio there are a number
of good quality businesses from which to build management
changes together with a strategy focused on products that
can offer improved returns and profitable growth will allow
metalrax to take advantage of the potential that exists within
the group
i am pleased to report that we have had a satisfactory start to
the current financial year and view our prospects in 2008 with
confidence a further update on current trading will be
provided at the time of the company’s agm in may 
jra crabtree
chairman
14 april 2008 06
review of business operations
chief executive’s review of strategy
annual report 2007 stock code mrx metalrax group plc
“metalrax will pursue organic growth 
through focusing on innovation in products 
services and distribution”
andrew richardson
introduction 
in this my first review as chief executive i will present the
company’s results for the year ended 31 december 2007
however i think it important that i first set out the strategic
changes i am implementing at metalrax group plc
strategy objectives and actions
my strategic review was initiated in october 2007 and the
conclusions were announced in january 2008 strategy is
meaningless without action therefore arising from this
review the board and i resolved to
ii reorganise metalrax from three into two divisions
consumer durables and specialist engineering
consumer durables will comprise the former
housewares division as well as the company’s new
offices in hong kong and china it is likely to account for
approximately 22 of group revenue and will supply a
wide range of bakeware and kitchenware to the retail
and commercial catering markets and
specialist engineering will consist of the former
engineering support services division together with the
specialist businesses from the former automotive division
it is likely to account for approximately 78 of group
revenue and will supply niche products and services to
the construction retail and specialist automotive
markets mainly in the uk and france its products and
services will be geared to solving customers’ problems
using high calibre engineering design development and
manufacturing locally and internationally
ii focus on businesses that operate in niche markets have
significant growth potential and barriers to entry and that
can each be expected to contribute meaningful profits
ii exit businesses that currently do not meet these criteria
ii pursue organic growth through focussing on innovation in
products services and distribution
ii establish operations overseas where appropriate and
ii supplement organic growth through selective acquisitions of
complementary technologies and companies which are
consistent with the company’s new strategy 
in light of the strategic review the board examined metalrax’s
balance sheet and financial position this identified
ii the potential for significant upward revaluation of the
company’s property portfolio
ii the likelihood of writedowns of various fixed and current
assets
ii that the various intended business exits are likely to generate
cash and will also serve to enhance operating cash flow
through removing lossmaking businesses and
ii that metalrax will generate further cash from ongoing
property disposals and through a management initiative to
reduce working capital
actions implementing these conclusions are well underway annual report 2007 07 metalrax group plc
market sectors that can deliver profitable growth and good
margins tend to be niche areas where the customer requires
specialist products services or after sales support they have
high barriers to entry often based on intellectual property
technology or regulation sectors capable of delivering growth
will themselves have strong independent growth drivers the
best businesses within these sectors will have highcalibre
people and demonstrate flexibility close attention to the
market and the ability to solve customers’ problems 
niche areas in which metalrax companies will operate are likely
to be small and specialised falling beneath the radar of bigger
engineering companies the group will dispose of companies
that do not operate in or cannot migrate to such areas in
suitable market sectors it will focus on a limited number of
sectors displaying the characteristics described above this
focus will be achieved by a combination of investment in
existing businesses and selective acquisition of new businesses 
the first example of such focus is in healthcare demonstrated
by the acquisition since the year end of post glover lifelink
inc pgl which was announced on 28 january 2008 pgl
which is based in erlanger kentucky usa is a worldleading
manufacturer of isolated electrical power systems and electrical
raceways for the medical laboratory and educational sectors
it is the number two supplier in each of its primary product
markets pgl will be part of the specialist engineering division
and will complement other businesses within that division that
provide products to the healthcare market pgl also provides a
foothold in the north american healthcare market and
increases our technological capability in this sector 
the group’s role is to add value to its subsidiary businesses
value can be added by simplifying administration across the
group leveraging scale providing lowercost capital through
investment or facilitating synergies between businesses
higher standards of financial reporting and analysis will drive
improved margins senior management and head office staff
are already engaged in a programme to ensure that all of their
activities provide added value to subsidiary businesses 
developing people at all levels will support the growth of our
businesses and our ability to differentiate in our chosen
sectors
finally the board and i have concluded that given the current
market capitalisation and the strategic objectives outlined
above the main market no longer provides the most
appropriate market for the trading of shares in metalrax and
that the group’s future would be better served by moving to
aim further details of this proposed move are given in the
accompanying letter from the chairman
aj richardson
chief executive
14 april 2008 08
review of business operations
chief executive’s review of operations
annual report 2007 stock code mrx metalrax group plc
the 2007 results are reported in line with the divisional
structure that was in place during 2007 this comprised three
divisions — housewares engineering support services and
automotive following the year end this structure has been
simplified into two divisions — consumer durables and
specialist engineering hence future reporting will follow this
new structure
housewares
background
our housewares operations produce and market the majority
of bakeware sold in the uk together with associated ranges of
kitchen tools to both retail and commercial markets we are
the market leader in microwave cookware and our wine racks
are sold extensively in the uk and overseas markets businesses
in this division have the benefit of a good reputation and own
some very strong and well established brands for example
the mermaid brand is extremely popular with professional
chefs and caterers its popularity is also growing in the retail
market helped by the endorsement of celebrity chefs
including delia smith on her website other brands widely
recognised by our trade customers and consumers include
longlife progress rta microwise and popware for which we
won a prestigious industry award we will continue to promote
these brands vigorously alongside our private label
developments for premium brands including aga our retail
customers include such premier names as john lewis
partnership lakeland argos ikea bq morrisons
wilkinsons hardware stores sainsbury’s waitrose and house
of fraser plus many other high street and specialist retailers in
the uk and overseas
management had the foresight in 2007 to open a sourcing
office in mainland china to strengthen its existing far east
operations and a sales  marketing centre in hong kong
these have contributed strongly to the division’s ability to
develop and secure reliable high quality lower cost sources for
ranges of products for distribution via its wide customer base
further investment is planned for these facilities including
exclusive new product introductions
market
the division’s products are sold into diverse niche markets for
use either in the home or in the professional kitchen the
markets for this division’s products during 2007 were steady
consumer spending is tightening but our products are more
‘need to have’ rather than ‘nice to have’ and are therefore
likely to be more resilient to downturns than some other
product sectors 
performance
overall the division performed well during 2007 on reduced
revenues of £257 million 2006 £276 million operating
profit before exceptional items improved from £13 million to
£18 million although the operating loss after exceptional
items of £07 million was worse than the previous year’s
operating profit after exceptional items of £22 million this
improvement was driven primarily by the increased focus on
more profitable contracts with lower marginhigher volume
work being exited where necessary a more competitive base
for future growth has been established as a result of the
achievement of appropriate and planned cost reductions
projects
the largest business in this division implemented its plan to
focus on more profitable products and customers and also
completed the restructuring of its manufacturing and product
ranges to improve its efficiency it now occupies an enviable
niche providing highquality bakeware products with high
levels of availability and service to discerning retailers and
distributors in the uk this is achieved at competitive prices
using a combination of uk based manufacturing complemented
by high quality sourcing from lowercost economies
outlook
this division has made a satisfactory start to 2008 in line with
our expectations pressures on raw material prices represent a
potential risk for 2008 in terms of our ability to pass these
increases on to customers on a timely basis uncertainty
surrounding the performance of the uk economy could also
affect our customers’ retail sales during the year however
new management has been appointed before and after the
yearend and i am confident that they will pursue opportunities
to achieve growth from operational and marketing initiatives 
annual report 2007 stock code mrx metalrax group plc annual report 2007 09 metalrax group plc
pictured
gw international non stick cake tin
housewares
“the largest business in this division now occupies an
enviable niche providing high quality bakeware
products with outstanding levels of customer service 
to discerning retailers and distributors in the uk” 10
review of business operations
chief executive’s review of operations continued
annual report 2007 stock code mrx metalrax group plc
engineering support services
background
the engineering support services division comprises 11 small
businesses each focused on different products andor routes
to market products ranged from structural steel and
architectural steel through metal shelving and mezzanine
floors consumable tools to vandal proof containers and
painted steel coil a number of high profile projects were
completed in 2007 including mobile shelving and picture
racking installations for the national museum and gallery of
wales and the herbert museum in coventry storage and
handling equipment was also installed in numerous blue chip
high street stockrooms a variety of bespoke trailers were
designed and manufactured for servicing eurostar at st
pancras staircases and support steelwork were provided on
the sir robert mcalpine site at highbury comprising 150
prestigious apartments various other balconies and staircases
were commissioned at premier retail developments including
westfield in derby
market
the end market for most of the products in this division is
driven by construction of new buildings the refurbishment and
refitting of existing buildings and the retail sector products
from this division are sold almost exclusively in the uk a
market which performed reasonably well during 2007
however metalrax companies in this segment have not
performed as well as their underlying markets
performance
divisional revenue including intragroup was flat at 
£543 million 2006 £542 million operating profit before
exceptional items reduced significantly to £13 million 
2006 £35 million the operating loss after exceptional items
was £20 million 2006 £34 million operating profit after
exceptional items the decline in profit despite the 
unchanged revenue was due to margins being squeezed by
product pricing and cost a large part of this profit decline is
attributed to the consumable tools metal shelving and
structural steel businesses while the materials handling and
commercial bearings businesses showed improved
performance during the year
projects
the previously reported installation of a new paint line at
fabricote progressed more slowly than anticipated however
consolidation of fabricote with cooper coated coil will still
take place during the first half of 2008
the initiative to rebrand the division as mrx support services
has been cancelled as a result of the revised divisional structure
described above
outlook
following the yearend there have been a number of changes
to the management structure governing the businesses in this
division these have been designed to focus on opportunities
for growth across the markets in which these companies
operate in the medium term many of the businesses are
expected to demonstrate improvements in performance
however in the short term these businesses are being
managed very closely and further changes are being made to
deliver their potential anticipated increases in steel price
combined with additional competitive pressures and a
potential slowdown in retail could add further challenges
meanwhile the start to the current financial year is broadly in
line with the performance in 2007
annual report 2007 stock code mrx metalrax group plc annual report 2007 11 metalrax group plc
engineering support services
“following the yearend there have been a number of
changes to the management structure governing the
companies in this division these have been designed to
focus on opportunities for growth across the markets in
which these companies operate”
pictured
a special adaptation of a stackright
antivandal cabin 12
review of business operations
chief executive’s review of operations continued
annual report 2007 stock code mrx metalrax group plc
automotive
background
the automotive division focuses on press work metal
manipulation fabrication and assemblies for a broad spread 
of customers these range from highvolume car
manufacturers through commercial agricultural and
construction vehicles to lowvolume specialist car
manufacturers customers in 2007 included jaguar land
rover general motors jcb trw and arvin
market
during the last few years vehicle manufacturers and many
firsttier component suppliers have moved production out of
the uk this trend undoubtedly affected the group’s
automotive companies in terms of both volume and margin
performance the focus during 2007 therefore remained on
consolidation of operations rather than investment for growth
in addition overstocking by some vehicle manufacturers had a
disproportionate impact on the automotive division as
schedules were reduced during the year
performance
divisional revenue over the year as a whole was steady at
£424 million 2006 £425 million operating profit before
exceptional items was down at £03 million 2006 £22
million while after exceptional items the division suffered an
operating loss of £62 million 2006 £11 million operating
profit after exceptional items
in addition to the impact of difficult market conditions
described above the acquisition of belsize and its integration
into the fine blanking operations had a significant adverse
impact on the management and performance of the
automotive division overall furthermore integration of
kenham tools  pressings and prescott powell into mrx
automotive in smethwick was delayed significantly as another
consequence of the fine blanking problems
the division’s specialist businesses that supply lower volume
customers improved during the year 
outlook
following the year end and as part of my review the group
announced its intention to exit the highvolume low margin
automotive businesses that are unlikely to make a meaningful
contribution to future group profits the fine blanking business
was subsequently sold for £05 million as announced on 14
february 2008 with the group retaining ownership of the
associated property and certain working capital components 
the elimination of the losses incurred by this business will have
a significant positive impact on the division and group’s future
performance our remaining highvolume low margin
automotive businesses in the uk together with our lossmaking
romanian business remain under close scrutiny in order to
maximise performance as quickly as possible 
i expect the more focused lowvolume niche automotive
businesses to be capable of growth as they reduce costs whilst
introducing innovation in customer service and new products
they have had a satisfactory start to the current financial year
in line with our expectations  annual report 2007 13 metalrax group plc
automotive
“i expect the more focused lowvolume niche
automotive businesses to be capable of growth”
pictured
automotive parts made by the process of
deep drawing and wall ironing 14
review of business operations
chief executive’s review of operations continued
annual report 2007 stock code mrx metalrax group plc
property revaluation
as part of the strategic review following my appointment as
chief executive we reviewed the valuation of the group’s
property portfolio based on an independent survey by atisreal
limited the board has increased the book value of the group’s
freehold and leasehold properties by approximately £117
million further details of the revaluation are set out in note 10
to the accounts
exceptional items
during the year the group incurred exceptional charges and
profits amounting to a net charge of £122 million before tax
these items related primarily to 
ii the integration of belsize into fine blanking and the
associated production inefficiencies together with the
subsequent disposal of the business
ii reorganisation and restructuring costs at gw international
mrx automotive cooper coated coil and fabricote and
mrx romania
ii write downs of various fixed assets and slow moving
inventories 
ii the costs of settling disputes on two major construction
contracts involving down and francis in light of independent
professional advice which i sought and
ii profits arising on the sale of former operating sites
further details of these exceptional items are set out in note 3
to the accounts
working capital
we are making progress in reducing the group’s working 
capital having reduced gross inventory levels since 31 december
2006 by £28 million to £167 million and trade and other
receivables before provisions by £32 million bank loans and
overdrafts at the year end amounted to £120 million which
provides the group with significant headroom on its existing
banking facilities
people
people at all levels of the group have become accustomed to
change they have greeted my arrival and the consequent
turbulent environment with grace and support i would like to
record my appreciation for this 
an essential part of the group’s future success will be the
fundamental change in culture and focus away from defence
toward growth management changes throughout the group
have been made and will continue as necessary i am confident
that people will support necessary changes to facilitate
progressive and profitable growth
we have decided that the existing incentive plans for directors
and senior executives should be amended for 2008 onward so
that they are aligned with our strategy and also better reflect
current best practice further details of the proposed chages
are included with the accompanying letter from the chairman
current trading and prospects 
against the backdrop of an uncertain economy our
strengthened management team is implementing our new
strategy and driving performance improvements primarily
through controlling costs and improving efficiencies we have
already disposed of the loss making fine blanking business and
are making progress in reducing the losses in other loss
making operations we are also achieving organic profit
growth in our other businesses which should cushion the
impact on the group of the expected increase in steel prices
the current year has started satisfactorily and i am confident
that the strategic and the operational changes we are making
will result in an improved performance overall during 2008 
and thereafter 
aj richardson
chief executive
14 april 2008 annual report 2007 15 metalrax group plc
review of business operations
operating environments risks and uncertainties
the group has identified a number of risks and uncertainties
which could have a material impact on its long term
performance these risks together with the management
policies and procedures put in place to mitigate them are set out
below and are also discussed in the corporate governance
statement
macroeconomic and competition
the group operated in a number of sectors defined broadly by
the three historic divisions housewares specialist engineering
and automotive it operates predominantly in the uk and
europe  thus the economic drivers for growth are reasonably
well spread over a number of sectors with no overreliance on
any one the group has identified that the highvolume
automotive sector is unlikely to meet future growth objectives
and it has already been announced that the group will exit this
sector  future acquisition strategy see below takes account of
the need to maintain a balanced approach to the economic
drivers underlying the business performance
the markets in which the group’s businesses operate are highly
competitive and there is a need to respond effectively to the
demands of customers and the activities of competitors while
maintaining a competitive cost base in order to achieve a
speedy response the task of analysing threats and identifying
appropriate mitigating actions is devolved to the divisional and
operating business level competition from product sourced in
china and other southeast asian countries is seen as
particularly significant for the housewares division and during
2007 work has been undertaken to strengthen that division’s
ability to access equivalent product and so maintain a
competitive pricingquality position
raw material prices
the group’s principal raw material across all three divisions is
steel movements in steel prices are driven by global market
conditions outside the control of the group and substantial
movements in these prices could have an adverse impact on the
group’s results where possible contracts are negotiated to
include raw material escalation clauses to enable this risk to be
transferred at least in part to the customer
acquisitions
while organic growth is key to the future of the business the
acquisition of new businesses is also important to drive growth
to improve overall return on assets and to replace activities in
areas where there are seen to be limited future prospects with
those where the opportunities are greater and more in line with
the group’s strategic thinking
all acquisition brings with it risks ranging from buying
inappropriate companies the diversion of management resource
during the acquisition process and post acquisition integration
problems the group has put in place formal acquisition criteria
and has improved the resource available to manage this process
financial and treasury risk
the group does not use complex derivative financial instruments
there are limited exposures to transactions in foreign currencies
predominantly us dollar and euro and where significant these
are hedged by way of forward contracts there is limited
exposure to other treasury risks — this is discussed more fully in
note 26
pensions deficit
the group has a defined benefit scheme which is closed to new
members but which in common with the vast majority of similar
schemes in the uk is operating with an ias 19 deficit at
31 december 2007 this deficit amounted to £34 million 2006
£32 million
at the beginning of 2007 the group increased its contributions
substantially to help reduce the deficit more quickly and there is
continuing discussion between the board and the trustees to
ensure that all parties understand the risks the group’s cashflow
allows the situation to be adequately managed 
the small increase in deficit during the year despite the accelerated
company contributions has arisen because of under performance
of return on scheme assets together with changes to the
underlying actuarial assumptions which drive the value of the
scheme’ s liabilities these changes including in particular a
strengthening of the mortality assumption and changes to the
discount rate are in line with current actuarial recommendations
resources
the main resources available to the group are
employees who have an extensive knowledge of the markets in
which their individual businesses operate and so can identify and
react to opportunities and risk in a timely manner there are
policies in place to ensure that appropriate skills are attracted
trained and retained to maintain this skills base
a strong portfolio of brands each of which has a strong positive
presence in its associated market
“while organic growth is key to the future of
the business the acquisition of new businesses
is also important” 16
review of business operations
corporate and social responsibility
annual report 2007 stock code mrx metalrax group plc
the board believes that the longterm future of the group is
best served by acknowledging the interests of all stakeholders
our customers members of staff shareholders and the wider
community the group is committed to its corporate social
responsibility activities and will continue to report on them
the group continues to implement a range of policies which
are posted on the group’s website
ii ethics
the group insists that its business activities are conducted in
accordance with high standards the ethics policy statement
provides a framework for achievement of those standards
ii employees
the group recognises that skilled and motivated teams of
people are essential to deliver success it has in place policies
and procedures dealing with recruitment induction conduct
and personal development in employment the overriding
aims are to ensure fairness consistency and opportunity in
relationships between people at all levels further it has
published employee handbooks which are regularly reviewed
and updated where appropriate
the group believes in equal opportunities and non
discrimination throughout the employment process in
particular
ii there is compliance with the obligations of the 
disability discrimination act appropriately qualified 
disabled applicants are given the same consideration as 
any other applicant for suitable vacancies and if an 
existing member of staff becomes disabled every effort 
is made to continue their employment support for this
includes training adaption of the working environment
and where necessary redeployment all property
modification and development plans give consideration
to their suitability for disabled personnel
ii job applications are welcomed from all sections of the 
community irrespective of age sex race colour ethnic 
background or genderorientation the overriding 
issue in all recruitment is to find the best applicant 
bringing the best set of skills and abilities to carry out 
the required role and help grow the business
ii when vacancies arise existing employees are
considered for promotion to the new position before
any external recruitment
skills are vital to the success of the business and training
plays a crucial role in their development and reinforcement
in ensuring compliance with good standards and policies
and in helping to develop the employee as an individual in
particular
ii there is a process of induction training throughout the 
group’s businesses to ensure awareness of job 
requirements key employment and policy issues and 
health and safety processes
ii training policies and procedures are usually incorporated
within businesses’ quality management systems
ii several operating units have formed strong links with
local colleges and training providers
ii communication
divisional and group meetings are held regularly to share
information and to seek out mutual opportunities the
group issues a newsletter at regular intervals to keep all
employees informed of developments and sales
opportunities 
ii customers
customer satisfaction is the key to business success quality
of product delivery and service is paramount the group
recognises the importance of formal quality management
systems and has a rolling programme for all companies to
achieve iso 9001 or enhanced standards such as
isots16949 for the automotive sector 
ii suppliers
all group companies observe strict guidelines when sourcing
raw material or products suppliers of imported materials are
subject to additional controls regarding environmental and
employment aspects of the business where required the
group employs independent third party bodies to monitor
their activities
“the group recognises that skilled and
motivated teams of people are essential 
to deliver success” annual report 2007 17 metalrax group plc
ii environment
the group has a philosophy of respect for the environment
and is committed to a policy of complying with
environmental legislation associated regulations
authorisations or approved codes of practice the group
recognises the importance of sustainable development
applying the following guiding principles
ii take account of the views of all stakeholders
ii embrace continual improvement methodology
ii prevent unauthorised discharges to the environment 
and minimise the polluting effects of commercial 
activities
ii comply with conditions established by enforcing
agencies
ii develop an environmental management system that 
is acceptable to the stakeholders this may require
customer or third party approvals to a recognised 
scheme such as emas or iso14001
ii source raw materials from verifiable responsible 
sources
ii provide resources to achieve environmental goals
ii minimise the use of raw materials and conserve 
energy
ii reduce waste wherever possible
ii cooperate with customers and suppliers to promote 
environmental awareness at all levels within the
supply chain
ii review performance and communicate findings to 
stakeholders
during the year the group has achieved the following
ii two more operating businesses have achieved iso 
14001 status
ii sustainable timber is used in its housewares division 
wherever possible under the scheme verified by the 
forestry stewardship council
ii the inprogress consolidation of the cooper coated 
coil and fabricote businesses onto one site noted in 
the chief executive’s review will lead to significant 
overall improvements in the abatement technology 
used to reduce emissions to atmosphere it will also 
lead to a substantial improvement in overall energy 
efficiency
the board recognises that this is an area which requires
further attention and a formal groupwide system of
reporting and managing environmental impacts is being
developed for implementation during 2008
ii health and safety
the health and safety of our employees and the wider public
is paramount to help in delivering an acceptable position
the group has in place a formal health and safety policy
manual which sets minimum standards that operating
businesses must achieve there is also a vehicle users
handbook setting out the requirements on personnel using
company vehicles
this is an area where there is no room for complacency and
where there must be a constant effort to improve
performance two initiatives to help deliver this are
ii regular risk review meetings involving operating unit 
management external consultants and the quality 
director who coordinates group health and safety 
matters their aim is to identify issues across a range of 
risk areas including health and safety and to 
implement risk minimisation and control processes
ii a formal quarterly reporting process covering health 
and safety dealing with historic accident statistics risk 
assessments and reduction plans and 
trainingcommunication initiatives this allows better 
monitoring of performance and management for 
improvement 18 annual report 2007 stock code mrx metalrax group plc
review of business operations
financial review
results summary
the results have been prepared under international financial
reporting standards “ifrs”
revenues for the year ended 31 december 2007 at £1186
million were 13 lower than in the previous year the losses
for the year before taxation were £99 million against a profit
for 2006 of £61 million profits before exceptional items at
£23 million 2006 £65 million were in line with market
expectations further details of divisional performances are set
out in the chief executive’s review of operations
exceptional items
during the year the group incurred four main types of
exceptional item
the sales of surplus properties produced a profit on sale of
£15 million
reorganisation costs totalling £96 million have been incurred in
the restructuring of various elements of the group the largest
element relates to the volume automotive businesses including
the cost of completing the move of belsize to bacol fine
blanking the subsequent exiting of fine blanking manufacturing
in the group and restructuring costs in the romanian
operations some reorganisation costs were also incurred in
other group businesses including central management
the group has incurred losses totalling £19 million on
negotiation of a settlement on old long term contracts
including associated legal and professional fees
as part of its business review the group has introduced a more
systematic approach to identifying excess stock this together
with some amounts arising from commercial and strategic
changes has resulted in an increase in stock provisions
totalling £22 million across all group operations
taxation
the effective tax rate of 298 is very close to the standard
rate of 30 expenses not deductible for tax purposes mainly
romanian losses and deferred tax not recognised were offset
by capital profits relieved by indexation and by a small prior
period adjustment
lossearnings per share
basic and diluted lossearnings per share were 583p
compared to 383p in the previous year there are no dilutive
effects associated with share option granted under the 2007
sharesave scheme during the year since these options are out
ofthemoney
dividend and dividend policy
as highlighted in the chairman’s statement the group is to
implement a progressive and sustainable policy whereby
dividends should represent between 40 and 50 of net
profit before oneoff items including goodwill impairment
in line with this policy the board does not propose to pay a
final dividend leaving the total dividend per share in respect of
2007 at 165p 2006 540p
the dividend per share paid in 2007 comprising the 2006 final
dividend and 2007 interim dividend was 540p 2006 540p
cash flow and capital investment
bank overdrafts and loans at 31 december 2007 stood at
£120 million compared to £99 million for the previous year
the debt increased in the year because while there was £47
million cash generated by operations it did not cover the
dividend payments of £65 million the group has total
unsecured banking facilities of £310 million
property revaluation
in 2006 the group reported that the market value of the
group’s freehold properties was approximately £110 million in
excess of their book value a formal valuation exercise was
carried out as at 31 december 2007 on all uk property which
led to an increase in the carrying value of £117 million full
details of this valuation are contained in note 10
financial position
the financial position at 31 december 2007 can be
summarised as follows
assets liabilities net assets
£000 £000 £000
property plant and equipment 36356 — 36356 
goodwill and intangible assets 11381 — 11381 
current assets and liabilities 41345 23017 18328 
postretirement obligations — 3412 3412
deferred tax 1609 1143 466
total before net debt 90691 27572 63119
net debt — 12531 12531
total as at 31 december 2007 90691 40103 50588
total as at 31 december 2006 93742 39443 54299
“the group is to implement a new progressive 
and sustainable dividend policy” annual report 2007 19 metalrax group plc
net assets fell from £543 million to £506 million the net
exceptional charge of £122 million before tax note 3 was
broadly balanced by the revaluation of land and buildings of
£117 million before tax note 10 the prime reason for the
£37 million fall in net assets was that dividend payments in
the year of £65 million were not matched by profit
key performance indicators kpis
historically the group monitored its overall performance based
on group cashflow and a limited number of financial kpis
focusing on preexceptional profitability and return on assets
as set out below
2007 2006
operating margin
housewares 71 48
engineering support services 23 64
automotive 07 52
return on net operating assets
housewares 107 66
engineering support services 45 135
automotive 13 87
individual operating units were managed using additional
operationspecific data relating to security of activity and
working capital management such as cash generation stock
turn and debtor days summarised by division as follows
stockturn days 31 dec 31 dec
2007 2006
housewares 77 129
engineering support services 49 54
automotive 54 61
debtor days 31 dec 31 dec
2007 2006
housewares 53 59
engineering support services 76 84
automotive 52 60
the chief executive’s strategic review has identified a number
of key performance areas where targets either have or are
being set and where future reporting will be used to monitor
performance both at group and at divisional level these
future kpi’s will include
nonfinancial kpis
health and safety incident reduction statistics
measures of environmental impacts
financial kpis
revenue growth
gross margin
operating profit growth
return on sales
return on net operating assets
return on total invested capital rotic group only
cash generated to operating profit
acquisitions and disposals
during the year to 31 december 2007 the group neither
acquired nor disposed of any businesses
on 25 january 2008 the group acquired post glover lifelink
inc pgl for a cash consideration of us dollar 60 million
£30m pgl a cincinnati based manufacturer of power
supply equipment for the healthcare market represents the
first step in the group’s strategy of expanding into small
specialist niche areas
on 14 february 2008 the group disposed of the business and
certain assets of bacol fine blanking for a cash consideration of
£05 million again this is in line with the strategy of exiting
nonniche business areas
going concern
after making enquiries the directors have a reasonable
expectation that the company and the group have adequate
resources to continue in operational existence for the
foreseeable future for this reason they continue to adopt the
going concern basis in preparing the financial statements
cautionary note
this review of business operations has been prepared solely to
provide additional information to shareholders to allow them
to assess the company’s strategies and the potential for those
strategies to succeed it should not be relied on by any other
party or for any other purpose
it contains certain forwardlooking statements made by the
directors in good faith based on the information available to
them up to the time of their approval of this report such
statements should be treated with caution due to the inherent
uncertainties including both economic and business risk
factors underlying any such forwardlooking information
mj stock
group finance director
14 april 2008 20
board of directors
john ra crabtree 
aged 58
john is the nonexecutive chairman 
and the chairman of the nomination
committee he was formerly senior partner
of wragge  co the birminghambased
corporate law firm he is nonexecutive
chairman of slr holdings ltd claimar care
group plc and birmingham hippodrome
theatre trust he is also a director of
staffline recruitment plc advantage west
midlands warwick racecourse company ltd
and president of the birmingham chamber
of commerce he was appointed to the
board in september 2003
andrew j richardson
aged 43
joined metalrax in october 2007 as the new
group chief executive previously the
divisional chief executive of water
management at halma plc andrew
started his career with rover group and has
worked with companies including webasto
roof systems automotive products and
mars confectionary
michael j stock
aged 43
joined the group in april 2008 as new
group finance director previously finance
director for premier farnell plc europe 
asia pacific michael has worked with
companies including ingersoll rand security
technologies and the engineering division of
interserve plc
john k adcock 
aged 60
john is the senior nonexecutive director
and chairman of the remuneration
committee he held a number of senior
positions with hsbc holdings plc until he
joined the group board in 2002 as a non
executive director
andrew p pearson 
aged 49
joined the group in january 2006 as non
executive director and from the 2006 agm
became the chairman of the audit
committee he is a chartered accountant
from 1990 to 2005 he was a partner with
kpmg specialising in advising on business
transactions since retiring in 2005 he has
been an active investor in several earlystage
private growth companies
ian h paling
aged 56
ian paling was ceo of corin group plc until
the end of 2007 having been with the
company through private ownership and
then leading a highly successful ipo on the
main market of the lse in may 2002 whilst
at corin ian was instrumental in securing
high profile distribution agreements setting
up profitable overseas subsidiaries and
directing acquisition strategy throughout his
career he has been involved in manufacturing
environments and will bring a wealth of
relevant business experience to metalrax
pictured
01 john crabtree — chairman
02 andrew richardson — chief executive
03 michael stock — group finance director
04 john adcock
05 andrew pearson
06 ian paling
01
02
03
04
05
06
annual report 2007 stock code mrx metalrax group plc
 also a member of the executive board 01
02
03
04
annual report 2007 21 metalrax group plc
executive board
garry h gresham 
aged 50
joined george wilkinson burnley limited in
1990 was promoted to marketing director
in 1992 and appointed chief executive in
2001 he is now chief executive of the
consumer durables division
mike smith 
aged 43
joined the group in september 2007 an
engineering graduate of the university of
newcastle upon tyne he has held
operational and commercial roles in the
aerospace and automotive industries he is a
divisional chief executive within the
specialist engineering division focusing both
on developing existing operations and
acquiring businesses in line with the group’s
strategic objectives
ian shergold
aged 44
ian joined metalrax in april 2008 as
divisional chief executive within the
specialist engineering division previously
general manager for huber  suhner inc
ian has extensive exerience in electronics and
in managing overseas businesses in the us
and mainland europe previous to huber 
suhner ian worked for raychem plc
peter mason
aged 56
joined the group in november 2007 a
qualified cost and management accountant
after 17 years with gec he has spent the last
20 years as finance director of a number of
sme businesses requiring turn round he is
group financial analyst
pictured
01 garrry greshan
02 mike smith
03 ian shergold
04 peter mason directors and advisers
22 annual report 2007 stock code mrx metalrax group plc
directors
john ra crabtree chairman
andrew j richardson chief executive 
from 15 october 2007
michael j stock group finance director
from 2 april 2008
richard e arbuthnot chief executive
to 12 october 2007
william d kelly group finance director 
to 15 january 2008
john k adcock
andrew p pearson
ian h paling
from 4 april 2008
reginald fort
to 23 may 2007
 nonexecutive
company secretary
william d kelly group finance director 
to 15 january 2008
darren j farrimond
from 15 january 2008
registered office
ardath road
kings norton
birmingham 
b38 9pn
telephone 0121 433 3444
facsimile 0121 433 3325
email infometalraxgroupcouk
wwwmetalraxgroupcouk
registered in england 793639 annual report 2007 23 metalrax group plc
auditors
deloitte  touche llp
four brindleyplace
birmingham 
b1 2hz
financial advisers
n m rothschild  sons
67 temple row
birmingham 
b2 5ls
and
arden partners
nicholas house
3 laurence pountney hill
london
ec4r 0eu
from 11 january 2008
solicitors
hbj gateley wareing llp
one eleven 
edmund street
birmingham 
b3 2hj
principal bankers
national westminster bank plc
21 digbeth
birmingham 
b5 6bl
hsbc bank plc
130 new street
birmingham
b2 4ju
registrars
computershare investor services plc
p o box 82
the pavilions
bridgwater road
bristol 
bs99 7nh
dedicated shareholder enquiries
0870 707 1179
financial pr
smithfield consultants ltd
10 aldergate street
london 
ec1a 4hj
brokers
arbuthnot securities
20 ropemaker street
london 
ec2y 9ar
to 11 january 2008
arden partners
nicholas house
3 laurence pountney hill
london
ec4r 0eu
from 11 january 2008
remuneration consultants
mercers limited
tower place
london
ec3r 5bu 24
report of the directors
annual report 2007 stock code mrx metalrax group plc
the directors present the audited accounts of the group for
the year ended 31 december 2007
principal activities
the principal activities of the group have been split into three
business segments as follows
ii housewares — produces and markets bakeware together
with associated ranges of kitchen tools to both retail and
commercial markets in the uk and internationally
ii engineering support services — provides surface coated
metals architectural primary and secondary steelwork
mezzanine flooring and storage equipment and also
distribution of tools fasteners and janitorial products
ii automotive — precision manufacturing activities providing
supplies worldwide to automotive telecommunications off
road vehicles enclosure hardware and brewery bar display
markets
from 1 january 2008 the group has been restructured into
two new segments
ii consumer durables — contains the former housewares
operations
ii specialist engineering — comprises the former engineering
support services and automotive businesses
business review
the company is required to set out in this report an enhanced
business review of the group for the year ended 31 december
2007 which includes future developments this can be found
in the review of business operations on pages 6 to 19
dividends
the directors recommend that no final dividend be paid in
respect of the year ended 31 december 2007 the interim
dividend of 165p per ordinary share paid on 26 october 2007
therefore comprises the total dividend in respect of the year
2006 54p
the dividend per share paid in 2007 comprising the 2006 final
dividend and the 2007 interim dividend was 540p 2006
540p
directors
the names of the present directors are shown on pages 20
and 22 they all held office throughout the year except for aj
richardson who was appointed chief executive on 15 october
2007 mj stock appointed 2 april 2008 and ih paling
appointed 4 april 2008 
on 15 january 2008 wd kelly resigned as a director and as
company secretary
details of directors’ shareholdings and service agreements are
disclosed in the directors’ remuneration report
at the annual general meeting the director retiring by
rotation will be ap pearson who has no service agreement in
addition aj richardson who was appointed during the year
together with mj stock and i paling who were appointed after
the year end will seek election
substantial shareholdings
the company has been notified or is aware of the following
substantial holdings of ordinary shares at 25 march 2007 being
not more than one month prior to the date of the notice of
the annual general meeting
number of  of issued
ordinary shares capital
schroders 5625956 469
axa 5943800 496
henderson 6136563 512
ck coombs 6126962 511
arlington capital investors 8405300 701
gartmore 6879282 574
lowland investment 3788679 316
fixed assets
the directors are of the opinion that following the revaluation
of freehold and leasehold properties as at 31 december 2007
see note 10 there is no significant difference between their
market value and their carrying value annual report 2007 25 metalrax group plc
payment of creditors
while not following any recognised code or standard the
group policy on payment of all creditors is to abide by the
terms of payment agreed with relevant suppliers at
31 december 2007 the trade creditors represented 67 days
2006 65 days in relation to the average amounts invoiced by
suppliers
capital structure
to the extent the directors consider applicable or material the
disclosures required by the takeovers directive have been
included in notes 21 and 22
charitable donations
donations to charitable organisations consisted of £5618
2006 £4050 for local charities and £1000 2006 £2100
for people with disabilities
directors’ statement as to disclosure of information 
to auditors
the directors who were members of the board at the time of
approving the report of the directors are listed on page 22
having made enquiries of fellow directors and of the
company’s auditors each of these directors confirms that
ii to the best of each director’s knowledge and belief there is
no information relevant to the preparation of their report of
which the company’s auditors are unaware and
ii each director has taken all the steps a director might
reasonably be expected to have taken to be aware of the
relevant audit information and to establish that the
company’s auditors are aware of that information
the above is in accordance with the provisions of s234 za of
the companies act 1985
auditors
deloitte  touche llp are willing to continue in office as
auditors and a resolution to reappoint them will be proposed
at the annual general meeting
annual general meeting
shareholders will be asked to approve as special business
resolutions 9 and 10 amendments to the executive share
option plan and the long term incentive plan for directors and
senior management further details are set out in the
chairman’s letter which accompanies this annual report
the authority to allot unissued ordinary shares was approved
at the annual general meeting held in 2005 and will expire on
22 may 2010 the directors will be seeking approval as
resolution 11 for the annual renewal of the directors’
authority to allot shares for cash
shareholders will also be asked to approve as special business
at the annual general meeting a resolution authorising the
directors to make market purchases of the company’s shares
resolution 12 this has become routine business at the
annual general meeting of many public companies
whilst the directors have no current intention to purchase any
ordinary shares of the company they consider it desirable to
obtain authorisation from the shareholders which would
enable them to act swiftly to make purchases if earnings per
share would thereby be increased and if they considered such
action to be in the best interests of the shareholders generally
the maximum price which may be paid for each share is an
amount equal to 105 of the average of the middle market
quotations for an ordinary share of the company derived from
the stock exchange daily official list for each of the five
business days immediately preceding the day on which the
ordinary share is purchased the minimum price will be 5p
the power will be limited to purchasing 12000000 shares
being approximately 10 of the total ordinary shares in issue
at the date hereof and will expire at the next annual general
meeting of the company or if earlier fifteen months after the
resolution is passed
resolutions 9 and 10 are ordinary resolutions while resolutions
11 and 12 are special resolutions
on behalf of the board
dj farrimond
company secretary
14 april 2008 corporate governance
26 annual report 2007 stock code mrx metalrax group plc
the company is committed to the principles of corporate
governance contained in the combined code on corporate
governance that was issued in 2006 by the financial reporting
council ‘the code’ for which the board is accountable to
shareholders
statement of compliance with the combined code
throughout the year ended 31 december 2007 the company
has been in compliance with the code provisions set out in
section 1 of the code
application of the principles
the company has applied the main and supporting principles
set out in section 1 of the code in a manner the board
considers appropriate the group organisation its business
activities and its financial structure are not complicated
direction of the group relies not only on formal board
meetings but also on daytoday contact amongst and
between executive directors and the management of
operating divisions and businesses
the nonexecutive directors are appointed to provide a
balance at board meetings and to bring their knowledge and
experience to help in setting objectives and resolving problems
the board considers that the nonexecutive directors are
independent and free from business and other relationships
that could interfere with their exercise of independent
judgement the board further believes that any shareholdings
of the nonexecutive directors serve to align their interests
with those of the shareholders each nonexecutive director is
subject to reelection at least every three years
composition of the board
the board currently includes four independent nonexecutive
directors being jra crabtree who is also the chairman of the
nomination committee jk adcock who is the chairman of
the remuneration committee ap pearson chairman of the
audit committee and ih paling who was appointed on 4 april
2008 r fort retired 23 may 2007 and jk adcock assumed the
role of senior independent nonexecutive director at 
31 december 2007 there were two executive directors
aj richardson appointed chief executive on 15 october 2007
and wd kelly group finance director and company secretary
wd kelly resigned on 15 january 2008 and has been replaced
by mj stock with effect from 2 april 2008
the chairman jra crabtree has primary responsibility for
running the board and devotes such time to his role as is
necessary to properly discharge his duties the chief executive
aj richardson has executive responsibility for delivering the
group’s strategy and achieving operational and financial goals
board effectiveness
as required by the code the board conducts annual evaluations
of its own performance the results of the process were
analysed and evaluated by the chairman the conclusion drawn
from the process was that the board had performed effectively
the board employed a similar process to review the performance
of each individual committee the board reached the conclusion
that each board committee had performed effectively during
the year the chairman met with the nonexecutive directors
without the executive directors being present
operation of the board
the board meets at least five times per annum and convenes
additional meetings to consider matters that are time critical
additional meetings are held annually to consider and review
strategy and opportunities arising each meeting is supported
by a full agenda and supporting papers distributed prior to 
the meeting
the board operates to oversee the group’s activities and as a
whole decides upon dividend policy acquisition and disposal
strategy and authorises major capital expenditure and other
matters that affect the overall group
the executive directors review the daytoday activities of the
subsidiaries manage group finances perform negotiations
regarding acquisitions and disposals recruit directors of
subsidiaries and allocate resources to manage the risk
environment
the nonexecutive directors are responsible for but not
restricted by the duties as described in the terms of reference
of the three committees namely the audit committee the
remuneration committee and the nomination committee
details of the terms of reference for the committees can be
found on the group website
the executive board oversees the daytoday activities of the
businesses and internal risk management as delegated to the
management teams management decisions include the
purchase of authorised capital expenditure negotiating
contracts for sales and purchases recruiting and controlling
employees as necessary to operate their respective businesses annual report 2007 27 metalrax group plc
the executive board meets at least four times a year
board and committee attendance
during the year the attendance by directors at board and
committee meetings was as follows
audit remuneration nomination
board committee committee committee
total scheduled meetings 7 2 2 2
attendance
aj richardson 
from 15 october 2007 1 — — — 
wd kelly 7 2 — —
re arbuthnot 
to 12 october 2007 6 2 — —
jra crabtree 7 — 22
jk adcock 6 2 2 2
ap pearson 7 2 2 2
r fort 
to 23 may 2007 3 1 1 — 
 attended by invitation of the committee
in addition aj richardson attended a further board meeting prior
to his appointment as a director
audit committee
the audit committee is appointed by the board from the non
executive directors of the group it is made up of aj pearson
who chairs the committee and jk adcock r fort retired on
23 may 2007 the audit committee’s terms of reference
include all matters indicated by the combined code the terms
of reference are considered annually by the audit committee
and are then referred to the board for approval
the audit committee is responsible for
ii monitoring the integrity of the financial statements of the
group and any formal announcements relating to the
group’s financial performance and reviewing significant
financial reporting judgements contained therein
ii reviewing the group’s internal financial controls and unless
expressly addressed by the board itself the group’s internal
control and risk management systems
ii making recommendations to the board for a resolution to
be put to the shareholders for their approval in general
meeting in relation to the appointment of the external
auditors and the approval of the remuneration and terms of
engagement of the external auditors
ii reviewing and monitoring the external auditors’
independence and objectivity and the effectiveness of the
audit process taking into consideration relevant uk
professional and regulatory requirements and
ii developing and implementing a policy on the engagement
of the external auditors to supply nonaudit services taking
into account relevant guidance regarding the provision of
nonaudit services by the external audit firm
the audit committee is required to report its findings to the
board identifying any matters in respect of which it considers
that action or improvement is needed and make
recommendations as to the steps to be taken
meetings are held at least two times a year other directors
may be invited to attend and the group finance director
attended both meetings held in 2007 the auditors also
attended both meetings during 2007 and are also authorised
to speak directly to any board member whenever they wish
remuneration committee
the remuneration committee is made up of jk adcock who
chairs the committee ap pearson and jra crabtree r fort
retired on 23 may 2007 the committee meets whenever
necessary and met twice in 2007 the prime function of the
committee is to establish and review the remuneration
incentives and terms and conditions for the executive
directors the directors’ remuneration report on pages 30
and 34 shows how the principles regarding directors’
remuneration have been applied 
nomination committee
the principal task of the committee is to ensure that the skills
experience and age of the board is appropriate to the group’s
activities to ensure its future success
jra crabtree chairs the committee which was made up of
jk adcock and ap pearson throughout the year and
aj richardson subsequent to his appointment
the nomination committee met in 2007 in respect of the
appointment of aj richardson and the consideration of board
succession  28
corporate governance continued
annual report 2007 stock code mrx metalrax group plc
internal control
the directors have overall responsibility for the group’s system
of internal controls and at least annually review the
effectiveness of all controls including financial operational and
compliance controls and risk management systems the board
confirms that the procedures which accord with the guidance
for directors in the combined code have been in place for
2007 and up to the date of approval by the board of the
directors’ report and accounts they recognise that any system
can provide only reasonable and not absolute assurance
against material misstatement or loss 
the group consists of a substantial number of autonomous
business units operating in a clearlydefined divisional structure
with clear lines of reporting each unit has the responsibility for
identifying its own significant business risks and for putting in
place an appropriate control environment and mitigation
processes to reduce exposure as such there is real limitation of
the concentration of risk from a group perspective
the individual businesses operate under group headoffice
oversight in particular
ii there are groupwide policies for key areas of exposure such 
as health and safety
ii some key business activities such as providing insurance
cover and employee benefits are managed centrally so
allowing a level of expertise to be used which would be
difficult to sustain at each operating unit these areas are
reviewed at least annually by the board
ii treasury functions are managed centrally and on a 
conservative basis to minimise risk
ii all major capital expenditure is subject to board approval
ii a formal process of certification by the management of each 
business was introduced for 2007 covering control 
environment and compliance issues
ii there is a formal budgetary process together with regular 
monthly reporting of financial and other performance against 
budget this information is reviewed at each meeting of 
the executive board as well as at each board meeting
the group’s external auditors deloitte  touche llp  have
audited the financial statements and have reviewed the
internal financial control system to the extent they consider
necessary to support their audit report their findings are
reported to the individual units and also to the audit
committee at least annually
all processes can be improved and following the
organisational changes outlined in the chief executive’s review
of strategy internal reporting and control procedures are being
strengthened to improve both quality and scope this together
with a greater emphasis on the formalisation of strategic
planning and risk review should lead to a more robust position
going forward
the group does not have a separate internal audit function
nor do the board consider that the current scale of the
operation requires one the existing level of oversight together
with planned improvements is regarded as sufficient to provide
the board with reliable information the board is mindful to
keep this situation under regular review 
“whistleblowing”
internal procedures are established to report grievances or
suspected inappropriate behaviour that may cause detriment
to other individuals or organisations if it is not possible to deal
with the matter locally because of the nature of the behaviour
any employee may email in confidence to the group chief
executive at whistleblowmetalraxgroupcouk stating the
nature and location of the incident and this will be followed up
appropriately the company will treat dishonest or spurious
actions and accusations seriously this may result in disciplinary
action in accordance with company rules and disciplinary
procedures any employee raising any issue that proves to be
genuine need have no fear of any reprisals and the company
will use its reasonable endeavours to ensure this
this statement appears on the group’s website 
shareholder relations
both chairman and chief executive meet regularly with
institutional shareholders mainly in the periods following the
announcement of interim and final results but also at other
times and the results of those meetings are communicated to
the directors
communication with private and other shareholders is made
both formally and informally at the annual general meeting
which is usually attended by the full board
directors’ responsibilities for financial statements
the directors are responsible for preparing the annual report
directors’ remuneration report and the financial statements in
accordance with applicable law and regulations annual report 2007 29 metalrax group plc
company law requires the directors to prepare financial
statements for each financial year the directors are required
by the ias regulation to prepare the group financial
statements under international financial reporting standards
ifrss as adopted by the european union and have also
elected to prepare the parent company financial statements in
accordance with ifrss as adopted by the european union the
financial statements are also required by law to be properly
prepared in accordance with the companies act 1985 and
article 4 of the ias regulation 
international accounting standard 1 requires that financial
statements present fairly for each financial year the group’s
financial position financial performance and cash flows this
requires the faithful representation of the effects of
transactions other events and conditions in accordance with
the definitions and recognition criteria for assets liabilities
income and expenses set out in the international accounting
standards board’s ‘framework for the preparation and
presentation of financial statements’ in virtually all
circumstances a fair presentation will be achieved by
compliance with all applicable ifrss however directors are
also required to
ii properly select and apply accounting policies
ii present information including accounting policies in a
manner that provides relevant reliable comparable and
understandable information and 
ii provide additional disclosures when compliance with the
specific requirements in ifrss are insufficient to enable users
to understand the impact of particular transactions other
events and conditions on the entity’s financial position and
financial performance
the directors are responsible for keeping proper accounting
records that disclose with reasonable accuracy at any time the
financial position of the group and company and enable them
to ensure that the financial statements comply with the
companies act 1985 they are also responsible for
safeguarding the assets of the group and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities
the directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company’s website legislation in the united kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions
auditors’ independence
the audit committee has responsibility for setting policy on
and reviewing external auditor independence a process which
it performs at least annually daytoday monitoring is
delegated to the group finance director
the policy restricts the nonaudit services which the external
auditor may perform to tax compliance work and other areas
where the service will not conflict with their independence
either in terms of the scope or scale
on behalf of the board
dj farrimond
company secretary
14 april 2008 30
directors’ remuneration report
annual report 2007 stock code mrx metalrax group plc
the directors’ remuneration report covers all the directors
both executive and nonexecutive a resolution to approve the
report will be proposed at the company’s annual general
meeting to be held on 23 may 2008
information not subject to audit
remuneration committee
the purpose of the remuneration committee the committee
is to determine policy for the remuneration and terms of
engagement of the executive and nonexecutive directors and
senior executives of the company
the committee comprises the nonexecutive directors of 
the company the members of the committee during the 
year were
jk adcock chairman
jra crabtree
r fort to 23 may 2007
ap pearson
the committee members have no personal financial interest
other than as shareholders in the company they have no
conflicts of interest arising from other responsibilities outside
the company and are not involved in the daytoday running
of the company they do not participate in any bonus share
option or pension arrangements
the committee operates under terms of reference available for
inspection at the registered office or on the company’s
website the terms of reference and constitution of the
committee comply with the principles set out in the combined
code on corporate governance
the committee met twice during the period under review and
there was full attendance on both occasions
remuneration policy
the group operates in a highly competitive global
environment it is essential to recruit retain motivate and
reward executives with the capability of devising and delivering
group strategy that will deliver a satisfactory financial
performance for all our stakeholders and shareholders over
time
the committee’s objective therefore is to provide levels of
remuneration that are consistent with this objective in doing
so it sets salary levels which are appropriate for individual
responsibilities having regard for the marketplace and sector
generally and seeks to provide incentives to achieve strategic
and operational goals and growth in shareholder value it is
the committee’s policy that the majority of an executive’s
remuneration package should be performance related
in 2007 the committee appointed mercer limited to provide
independent advice on all aspects of executive remuneration
mercer does not provide any other material advice to the
company
remuneration of executive directors
the remuneration of executive directors consists of the
following elements
i salary
salary is determined at the beginning of each year and
when a director has a change of responsibility the
committee takes account of each director’s performance in
the light of its knowledge of rates of salary for similar
responsibilities in other companies and of pay levels
elsewhere in the group
ii benefits in kind
these principally comprise benefits relating to the use of a
vehicle or cash equivalent life assurance membership of
the group’s healthcare insurance scheme and accident
insurance these benefits are not pensionable
iii annual bonus
executive directors will participate in an annual bonus
scheme up to 100 of salary dependent upon the degree
to which certain corporate and personal performance
measures are achieved for the 2008 financial year payable
in 2009 no bonuses were paid in respect of the 2007
financial year performance aj richardson’s bonus in 2007
represents an amount paid in march 2008 as
compensation for bonus and loss of benefits foregone at
his previous employer as a consequence of his appointment
to metalrax group plc
bonus schemes are also in operation for senior executives
dependent upon preagreed corporate divisional or
business unit and personal objectives being achieved
iv sharebased payments
the directors believe that share options are an excellent
method of aligning the interests of senior management annual report 2007 31 metalrax group plc
including executive directors who have completed six
months’ continuous service under this plan the company
can if it thinks fit grant options at a price 20 below the
market price exercise of options under the sharesave plan
is not subject to any performance condition details of
directors options under this plan are given in this report
long term incentive plan ltip
the 2006 ltip was approved at the annual general
meeting held on 23 may 2006 no options have been
granted under the ltip  subject to shareholder approval at
the meeting the committee proposes that for each 1
increase in the group’s pretax profits participants will
receive an option over shares worth 2 of their annual
salary furthermore it is proposed that future awards will
only be made if group profit before tax exceeds that for 31
december 2007 and subsequently the best group profit
before tax in excess of 2007 it is the committee’s intention
that only aj richardson will participate in the ltip  with first
awards made under this plan in 2009 the performance
target attached to the vesting of awards made will be the
same as under the modified esos above
oneoff long term incentive plan for chief executive
a oneoff longterm incentive plan has been put in place
for aj richardson to facilitate his recruitment and retention
over the long term under this plan he received a oneoff
award of 3963964 phantom units on 10 april 2008 a
phantom unit is equivalent to one ordinary share in the
company
the award will vest after five years from the date of
awards subject to the achievement of a relative total
shareholder return “tsr” condition performance will be
measured over five financial years from 1 january 2008 to
31 december 2012 therefore 50 of the award will vest
if the company’s tsr is at the median of a comparator
group consisting of companies in the ftse all share index
and 100 will vest if the company’s tsr is at the upper
quartile or higher there will be no vesting below median
and the award will vest on a straightline basis between
median and upper quartile the vesting of the award will
be satisfied in either cash or shares at the discretion of the
committee
with those of shareholders executive directors participate
in the following plans
2007 executive share option plan esop
the annual general meeting held on 23 may 2007
approved the 2007 executive share option plan this
enables the committee to also grant options if it thinks fit
to any employee throughout the group including
executive directors to purchase shares in the company at
market value on the award date subject to the
achievement of performance targets 
the performance targets require the increase in earnings
per share of the group to exceed the increase in the retail
price index during a period of three consecutive financial
years immediately following and including the date the
option is granted
subject to shareholder approval at the annual general
meeting on 23 may 2008 the committee is proposing to
modify the overall maximum individual award limit so that
it applies only to awards made under the esop  therefore
the overall maximum individual award limit under the esop
would be 100 of salary in a financial year the committee
is also proposing to increase the maximum individual
award limit in exceptional circumstances for example to
support the recruitment of key personnel to 200 of
salary in a financial year 
the performance targets attached to the awards made
from 2008 will be as follows 50 of the awards will vest
if the increase in earnings per share “eps” equals the
increase in retail price index “rpi” plus 3 per annum
and 100 will vest if the increase in eps equals the
increase in rpi plus 5 or more per annum between these
two points awards will vest on a straight line basis and
there will be no vesting if the increase in eps is less than
the increase in rpi plus 3 per annum the performance
period will be three financial years starting from the
financial year prior to that in which the awards are made
there will be no retesting opportunity of the performance
target 
no options have been granted under this plan 
2007 sharesave plan
the annual general meeting on 23 may 2007 approved
the 2007 sharesave plan this plan is open to all employees directors’ remuneration report continued
32 annual report 2007 stock code mrx metalrax group plc
remuneration of nonexecutive directors
the remuneration of the chairman is decided by the board
following recommendations made by other members of the
remuneration committee in consultation with the chief
executive the remuneration of the other nonexecutive
directors is determined by the board following
recommendations by the chairman and after consultation with
the chief executive
directors’ service agreements
no director has a contract requiring more than 12 months
notice aj richardson’s contract dated 15 october 2007
contains a notice period of 12 months the nonexecutive
directors whose remuneration is determined by the board do
not have service agreements but are appointed for a fixed term
expiring when they become due for reelection at an annual
general meeting they are not allowed to participate in share
option schemes and are not eligible to join any of the group’s
pension schemes
compensation for loss of office
compensation for loss of office typically includes payments of
salary benefits pension contributions and lump sum payments
the committee believes that eps and tsr are both
appropriate measures of performance eps measures the
profit generated for our ordinary shareholders whilst tsr is
a measure of shareholder value created
v pension benefits
the executive section of the metalrax group plc pension
and life assurance plan which in 2007 only applied to re
arbuthnot as chief executive provides a pension at age 62
of twothirds of final pensionable salary subject to
completion of sufficient years of service in accordance
with group policy pensionable salary does not include any
bonuses if a member of the scheme dies while still in
service the scheme provides life assurance cover of four
times pensionable salary and a widow’s pension 
aj richardson and wd kelly are members of a money
purchase scheme they also receive death in service cover
of four times basic salary
250
200
150
100
50
0
2002 2003 2004 2005 2006 2007 
value of £100 invested in december 2002
metalrax                     ftse all share 
directors’ other interests
no director had an interest in any contract subsisting during
the year which was significant in relation to the group’s
business
performance graph
the directors consider the ftse all share index to be 
appropriate for comparative purposes as it represents a broad
equity index annual report 2007 33 metalrax group plc
information subject to audit
directors’ remuneration excluding pension
compensation
salary benefits for loss of total total
fee bonus in kind office 2007 2006
£000 £000 £000 £000 £000 £000
executive
aj richardson from 15 october 2007 41 150 2— 193 —
wd kelly 129 — 13 98 240 119
re arbuthnot to 12 october 2007 126 — 13 314 453 185
jgl edwards to 14 march 2006 ——— — — 23
gh gresham to 14 march 2006 ——— — — 24
dj farrimond to 14 march 2006 ——— — — 21
rh brookcarter to 14 march 2006 ——— — — 20
nonexecutive
jra crabtree chairman 52 ——— 52 50
jk adcock 31 ——— 31 30
ap pearson 31 ——— 31 30
r fort to 23 may 2007 10 ——— 10 22
2007 total 420 150 28 412 1010 524
2006 total 463 29 32 — 524
re arbuthnot was employed until 31 december 2007 his compensation for loss of office represents continuation of his salary
and benefits until retirement date the compensation for loss of office for wd kelly represents lump sum amounts in respect of
pay in lieu of notice and premium benefit accounted for in 2007
pension benefits earned by directors
transfer value of accrued accumulated transfer value of 
pension benefits at increase in accrued  transfer value total accrued pension accrued pension benefits 
beginning of the year pension during the year of increase at year end at end of the year
£000 £000 per annum £000 £000 per annum £000
re arbuthnot
to 12 october 2007 1246 3 56 83 1302
the pension entitlements shown are those earned during the year and which would be paid annually on retirement based on
service to 31 december 2007 or date of leaving if earlier the increase in accrued pension during the year excludes any increase
for inflation the transfer value has been calculated on the basis of actuarial advice in accordance with actuarial guidance note
gn11 no additional voluntary contributions have been included in the above table
contributions paid by the company in respect of directors participating in money purchase schemes were as follows
2007 2006
£000 £000
aj richardson 11 —
wd kelly 32 25
43 25 34
directors’ remuneration report continued
annual report 2007 stock code mrx metalrax group plc
directors’ interests in shares
the beneficial interests of the directors who held office at the end of the year in the ordinary shares of the company as notified
to the company are
31 december
2007 2006
jra crabtree 50000 30000
aj richardson appointed 15 october 2007 20000 —
wd kelly 20000 15000
jk adcock 34809 34809
ap pearson 20000 10000
directors’ share options
the movement in share options during the financial year were as follows
as at granted exercised as at exercise date first
scheme 01 jan 07 in year in year 31 dec 07 price exercisable
wd kelly 2007 sharesave — 20869 — 20869 46p 1 dec 2010
all options lapse no later than six months after the date they are first exercisable
on behalf of the board
jk adcock
14 april 2008
chairman of the remuneration committee  annual report 2007 35 metalrax group plc
report of the independent auditors 
to the members of metalrax group plc
we have audited the group and parent company financial
statements the ‘’financial statements’’ of metalrax group plc
for the year ended 31 december 2007 which comprise the
consolidated income statement consolidated statement of
recognised income and expenses consolidated balance sheet
parent company balance sheet cash flow statements and the
related notes 1 to 34 these financial statements have been
prepared under the accounting policies set out therein we
have also audited the information in the directors’
remuneration report that is described as having been audited
this report is made solely to the company’s members as a body
in accordance with section 235 of the companies act 1985 our
audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to
them in an auditors’ report and for no other purpose to the
fullest extent permitted by law we do not accept or assume
responsibility to anyone other than the company and the
company’s members as a body for our audit work for this
report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report
the directors’ remuneration report and the financial statements
in accordance with applicable law and international financial
reporting standards ifrss as adopted by the european union
are set out in the statement of directors’ responsibilities
our responsibility is to audit the financial statements and the
part of the directors’ remuneration report to be audited in
accordance with relevant legal and regulatory requirements
and international standards on auditing uk and ireland
we report to you our opinion as to whether the financial
statements give a true and fair view and whether the financial
statements and the part of the directors’ remuneration report
to be audited have been properly prepared in accordance with
the companies act 1985 and as regards the group financial
statements article 4 of the ias regulation we also report to
you whether in our opinion the information given in the
report of the directors is consistent with the financial
statements the information given in the report of the
directors includes that specific information presented in the
chairman’s statement chief executive’s review financial
review and corporate and social responsibility statement that
is cross referred from the business review section of the report
of the directors
in addition we report to you if in our opinion the company
has not kept proper accounting records if we have not
received all the information and explanations we require for
our audit or if information specified by law regarding
directors’ remuneration and other transactions is not disclosed
we review whether the corporate governance statement
reflects the company’s compliance with the nine provisions of
the 2006 combined code specified for our review by the
listing rules of the financial services authority and we report
if it does not we are not required to consider whether the
board’s statements on internal control cover all risks and
controls or form an opinion on the effectiveness of the
group’s corporate governance procedures or its risk and
control procedures
we read the other information contained in the annual report
as described in the contents section and consider whether it is
consistent with the audited financial statements we consider
the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the
financial statements our responsibilities do not extend to any
further information outside the annual report
basis of audit opinion
we conducted our audit in accordance with international
standards on auditing uk and ireland issued by the auditing
practices board an audit includes examination on a test basis
of evidence relevant to the amounts and disclosures in the
financial statements and the part of the directors’
remuneration report to be audited it also includes an
assessment of the significant estimates and judgments made
by the directors in the preparation of the financial statements
and of whether the accounting policies are appropriate to the
group’s and company’s circumstances consistently applied
and adequately disclosed
we planned and performed our audit so as to obtain all the
information and explanations which we considered necessary
in order to provide us with sufficient evidence to give
reasonable assurance that the financial statements and the
part of the directors’ remuneration report to be audited are
free from material misstatement whether caused by fraud or
other irregularity or error in forming our opinion we also
evaluated the overall adequacy of the presentation of
information in the financial statements and the part of the
directors’ remuneration report to be audited  36 annual report 2007 stock code mrx metalrax group plc
opinion
in our opinion
ii the group financial statements give a true and fair view in 
accordance with ifrss as adopted by the european union of 
the state of the group’s affairs as at 31 december 2007 and 
of its loss for the year then ended
ii the parent company financial statements give a true and 
fair view in accordance with ifrss as adopted by the 
european union as applied in accordance with the provisions 
of the companies act 1985 of the state of the parent 
company’s affairs as at 31 december 2007
ii the financial statements and the part of the directors’ 
remuneration report to be audited have been properly 
prepared in accordance with the companies act 1985 and 
as regards the group financial statements article 4 of the 
ias regulation and
ii the information given in the report of the directors is 
consistent with the financial statements
separate opinion in relation to ifrss
as explained in the accounting policies statement to the group
financial statements the group in addition to complying with
its legal obligations to comply with ifrss as adopted by the
european union has also complied with the ifrss as issued by
the international accounting standards board
in our opinion the group financial statements give a true and
fair view in accordance with ifrss of the state of the group’s
affairs as at 31 december 2007 and of its loss for the year then
ended
deloitte  touche llp
chartered accountants and registered auditors 
four brindleyplace
birmingham
b1 2hz
14 april 2008
report of the independent auditors 
to the members of metalrax group plc continued financial statements
annual report 2007 37 metalrax group plc 38
consolidated income statement
annual report 2007 stock code mrx metalrax group plc
year ended 31 december 2007
2007 2006
before before
exceptional exceptional exceptional exceptional
items items total items items total
notes £000 £000 £000 £000 £000 £000
continuing operations
revenue 1 118647 — 118647 120233 — 120233
cost of sales 95804 — 95804 95028 — 95028
gross profit 22843 — 22843 25205 — 25205
distribution expense 7092 — 7092 7713 — 7713
administrative expense 12370 13689 26059 10485 2286 12771
other operating income — 1472 1472 — 1878 1878
operating profitloss 5 3381 12217 8836 7007 408 6599
finance income 4 ——— 6— 6
finance expense 4 1120 — 1120 511 — 511
profitloss before taxation 2261 12217 9956 6502 408 6094
taxation 6 2970 1497
lossprofit for the year 6986 4597
lossprofit for the year attributable
to equity holders of the parent 6986 4597
lossearnings per ordinary share
basic and diluted lossearnings per share 7 583p 383p
dividends in respect of the year
paid £000 8 6474 6474
paid per share 8 540p 540p
 exceptional items note 3 are items of income and expenditure that in the judgement of management should be disclosed separately on the basis that they are material either by
their nature or their size to the understanding of the financial statements and where not to do so would distort the comparability of financial performance between periods in 2007 the
£122 million charge comprised reorganisation costs losses on longterm contracts stock writedowns and property profits in 2006 the £04 million charge consisted of reorganisation
costs property profits and a discount on acquisition annual report 2007 39 metalrax group plc
statement of recognised income and expense
year ended 31 december 2007
consolidated
2007 2006
note £000 £000
revaluation of properties 11667 —
actuarial lossgain on defined benefit pension scheme 572 2441
tax on items taken directly to equity 1320 733
exchange losses 41 —
net income recognised directly in equity 9734 1708
lossprofit for the year 6986 4597
total recognised income for the year 24 2748 6305
attributable to
equity holders of the parent 24 2748 6305
company
2007 2006
£000 £000
revaluation of properties 1113 —
actuarial lossgain on defined benefit pension scheme 572 2409
tax on items taken directly to equity 95 723
net income recognised directly in equity 446 1686
loss for the year 1847 1089
total recognised expenseincome for the year 1401 597
attributable to
equity holders of the parent 1401 597 40
consolidated balance sheet
as at 31 december 2007
2007 2006
notes £000 £000
assets
goodwill 9 11381 11356
other intangible assets 9 — 50
property plant and equipment 10 36356 33158
deferred tax asset 20 1609 948
total noncurrent assets 49346 45512
inventories 13 13176 18068
trade and other receivables 14 24338 29099
current tax asset 274 —
assets held for sale 15 3557 1063
total current assets 41345 48230
total assets 90691 93742
liabilities
loan notes 17 250 250
trade and other payables 22344 22930
provisions 18 384 —
current tax payable — 540
bank overdrafts and loans 17 12031 9936
total current liabilities 16 35009 33656
loan notes 17 250 500
provisions 18 289 —
employee benefits 19 3412 3159
deferred tax liabilities 20 1143 2128
total noncurrent liabilities 5094 5787
total liabilities 40103 39443
net assets 50588 54299
equity
share capital 21 5995 5995
share premium account 23 2732 2732
capital redemption reserve 23 274 274
revaluation reserve 23 10262 —
other reserve 23 15 —
retained earnings 23 31310 45298
total equity 24 50588 54299
signed on behalf of the board by
aj richardson
group chief executive
14 april 2008
annual report 2007 stock code mrx metalrax group plc annual report 2007 41 metalrax group plc
company balance sheet
as at 31 december 2007
2007 2006
notes £000 £000
assets
property plant and equipment 11 2851 1688
investments 12 30041 30066
deferred tax asset 20 955 906
total noncurrent assets 33847 32660
other receivables 14 71 688
amounts owed by group undertakings 31645 20677
current tax assets 193 1365
total current assets 31909 22730
total assets 65756 55390
liabilities
loan notes 17 250 250
trade and other payables 2252 1699
bank overdrafts and loans 17 23225 5847
total current liabilities 16 25727 7796
loan notes 17 250 500
employee benefits 19 3412 3021
deferred tax liabilities 20 182 13
total noncurrent liabilities 3844 3534
total liabilities 29571 11330
net assets 36185 44060
equity
share capital 21 5995 5995
share premium account 23 2732 2732
capital redemption reserve 23 274 274
revaluation reserve 23 933 —
retained earnings 23 26251 35059
total equity 36185 44060
signed on behalf of the board by
aj richardson
group chief executive
14 april 2008 42
cash flow statements
year ended 31 december 2007
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
operating activities
cash generated fromused in operations 25a 6490 5089 9179 1782 
interest received — 6 — 6 
interest paid 996 511 996 480
taxation paid 810 1882 759 1305
net cash generated fromused in operating activities 4684 2702 10934 3561 
investing activities
purchase of property plant and equipment 6019 3241 98 51
proceeds from sale of property plant and equipment 6263 1746 677 15
acquisition of businesses 25d 549 6692 549 5084
net cash used infrom investing activities 305 8187 30 5120
financing activities
equity dividends paid 8 6474 6474 6474 6474
repayment of borrowings — 690 — —
new bank loans raised 17 5000 5000 5000 5000
decreaseincrease in bank overdraft 2905 4936 12378 847
net cash used infrom financing activities 4379 2772 10904 627
net decrease in cash and cash equivalents 25b — 2713 — 9308 
cash and cash equivalents at beginning of year — 2713 — 9308 
cash and cash equivalents at end of year 25c — — — — 
annual report 2007 stock code mrx metalrax group plc annual report 2007 43 metalrax group plc
accounting policies year ended 31 december 2007
metalrax group plc is a company incorporated in the united kingdom under the companies act 1985 the consolidated
financial statements of the company for the year ended 31 december 2007 comprise the company and its subsidiaries together
referred to as the “group” the consolidated and parent company financial statements were authorised for issuance on
14 april 2008
the address of the registered office is given on page 22 the nature of the group’s operations and its principal activities are set
out in the chief executive’s review of operations on page 8 report of the directors on page 24 and note 2 on page 50
these financial statements are presented in pounds sterling because that is the currency of the primary economic environment in
which the group operates foreign operations are included in accordance with the policies set out in the accounting policies below
statement of compliance
both the group and parent company financial statements have been prepared and approved by the directors in accordance with
international financial reporting standards and interpretations adopted for use by the eu “ifrs” on publishing the parent
company financial statements here together with the group financial statements the company is taking advantage of the
exemption in s230 of the companies act 1985 not to present its individual income statement and related notes that form part of
the approved financial statements
basis of preparation
the financial statements are prepared on the historical cost basis except that freehold and long leasehold properties derivative
financial instruments and assets classified as held for sale are held at fair value the preparation of financial statements in
conformity with ifrss requires management to make judgements estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities income and expenses the estimates and associated assumptions are
based on historical experience and various other factors that are believed to be reasonable under the circumstances the results of
which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from
other sources actual results may differ from these estimates
the estimates and underlying assumptions are reviewed on an ongoing basis revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods
the accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements
basis of consolidation 
subsidiaries are entities controlled by the company control exists when the company has the power directly or indirectly to
govern the financial and operating policies of an entity so as to obtain benefits from its activities the financial statements of
subsidiaries are included in the consolidated financial statements from the date that control commences until the date that
control ceases
intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions are
eliminated in preparing the consolidated financial statements 
business combinations
the acquisition of subsidiaries is accounted for using the purchase method the cost of the acquisition is measured at the
aggregate of the fair values at the date of exchange of assets given liabilities incurred or assumed and equity instruments
issued by the group in exchange for control of the acquiree plus any costs directly attributable to the business combination 
the acquiree’s identifiable assets liabilities and contingent liabilities that meet the conditions for recognition under ifrs 3 are
recognised at their fair value at the acquisition date except for noncurrent or disposal groups that are classified as held for
resale in accordance with ifrs 5 non current assets held for sale and discontinued operations which are recognised and
measured at fair value less costs to sell
goodwill arising on acquisition is recognised as an asset and initially measured at cost being the excess of the cost of the
business combination over the group’s interest in the net fair value of the identifiable assets liabilities and contingent liabilities
recognised if after reassessment the group’s interest in the net fair value of the acquiree’s identifiable assets liabilities and
contingent liabilities exceeds the cost of the business combination the excess is recognised immediately in profit or loss
revenue
revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods
and services provided in the normal course of business net of discounts vat and other sales related taxes sales of goods are
recognised when goods are delivered and title has passed 44
accounting policies continued
construction contracts
the group undertakes long term contracts for construction projects as a subcontractor where the outcome of a construction
contract can be estimated reliably revenue and costs are recognised by reference to the stage of completion of the contract
activity at the balance sheet date this is normally measured by the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs except where this would not be representative of the stage of completion
variations in contract work claims and incentive payments are included to the extent that they have been agreed with the
customer
where the outcome of a construction contract cannot be estimated reliably contract revenue is recognised to the extent of
contract costs incurred that it is probable will be recoverable contract costs are recognised as expenses in the period in which
they are incurred when it is probable that total contract costs will exceed total contract revenue the expected loss is recognised
as an expense immediately
depreciation
depreciation of property plant and equipment is charged to the income statement so as to write off the cost or valuation of the
assets over the estimated useful lives after taking account of estimated residual values land is not depreciated
the principal rates and methods of depreciation used are as follows
ii freehold buildings long leasehold property improvements and ground rents 2 per annum on cost
ii short leasehold property improvement over the period of the lease
ii plant fixtures and fittings and office equipment 10–20 per annum on cost
ii motor vehicles 25 per annum on cost
leases
leases in which the group assumes substantially all of the risks and rewards of ownership are classified as finance leases these
assets are included in the balance sheet and are depreciated accordingly the capital element of the corresponding financing
commitments is included in the balance sheet
lease payments in respect of finance leases are apportioned between the finance charge and the reduction of the outstanding
liability the finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest
on the remaining balance of the liability
payments made under operating leases are recognised in the income statement on a straightline basis over the term of 
the lease
financing income and costs
financing costs comprise interest payable on borrowings and gains and losses on financial instruments that are recognised in the
income statement
interest income is recognised in the income statement as it accrues
interest payable on borrowings includes a charge in respect of attributable transaction costs which are recognised in the income
statement over the period of the borrowings on an effective interest basis the interest expense component of finance lease
payments is recognised in the income statement using the implicit interest rate method
taxation
the tax on the profit or loss comprises current and deferred tax current tax is the expected tax payable on the taxable income
for the year using tax rates enacted at the balance sheet date and any adjustment to tax payable in respect of previous years
deferred tax is provided using the balance sheet liability method providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes the following
temporary differences are not provided for goodwill not deductible for tax purposes the initial recognition of assets or liabilities
that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries to the extent that they will
probably not reverse in the foreseeable future the amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively enacted on the
balance sheet date
a deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilised
annual report 2007 stock code mrx metalrax group plc annual report 2007 45 metalrax group plc
segment reporting
a segment is a distinguishable component of the group that is engaged in providing products or services business segment or
in providing products or services within a particular economic environment geographical segment which is subject to risks and
rewards that are different from those of other segments
the group primarily analyses its activities based on class of business its operational activities are undertaken almost entirely
within the uk and accordingly the group’s operating activities are derived from only one geographical segment
impairments
the carrying amounts of all the group’s assets are reviewed at each balance sheet date to determine whether there is any
indication of impairment if any such indication exists the asset’s recoverable amount is estimated an impairment loss is
recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount impairment
losses are recognised in the income statement unless the asset is recorded at a revalued amount in which case it is treated as a
revaluation decrease
property plant and equipment
items of property plant and equipment are stated at cost or valuation less accumulated depreciation and accumulated
impairment losses revaluations are performed with sufficient regularity that the carrying amount does not differ materially from
that which would be determined using fair values at the balance sheet date
any revaluation increase arising on the revaluation of land and buildings is credited to the revaluation reserve except to the
extent that it reverses a revaluation decrease for the same asset previously recognised as an expense in which case the increase is
credited to the income statement to the extent of the decrease previously charged a decrease in carrying amount arising on the
revaluation of such land and buildings is charged as an expense to the extent that it exceeds the balance if any held in the
revaluation reserve relating to a previous revaluation of that asset
depreciation on revalued buildings is charged to income on the subsequent sale or retirement of a revalued property the
attributable revaluation surplus remaining in the revaluation reserve is transferred directly to retained earnings
the cost of selfconstructed assets includes the cost of materials direct labour and an appropriate proportion of directly
attributable overheads
when parts of an item of property plant and equipment have different useful lives those components are accounted for as
separate items of property plant and equipment
intangible assets
goodwill
all business combinations are accounted for by applying the purchase method in respect of acquisitions since april 2004
goodwill represents the difference between the cost of acquisition and the fair value of the group’s share of the net identifiable
assets acquired in respect of acquisitions prior to this date goodwill is included on the basis of its deemed cost which represents
the amount recorded under previous gaap 
at each balance sheet date the group reviews the carrying amounts of its goodwill to determine whether there is any indication
that those assets have suffered an impairment loss if any such indication exists the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss if any where the asset does not generate any cash flows that are
independent from other assets the group estimates the recoverable amount of the cashgenerating unit cgu to which the
asset belongs any goodwill with an indefinite useful life is tested for impairment annually and whenever there is an indication
that the asset may be impaired
recoverable amount is the higher of fair value less costs to sell and value in use the key assumptions for the value in use
calculations are those regarding the discount rates growth rates and expected changes to selling prices and direct costs during
the period management estimates discount rates using pretax rates that reflect current market assessments of the time value of
money and the risks specific to the cgus the growth rates are based on industry growth forecasts changes in selling prices and
direct costs are based on past practices and expectations of future changes in the market
the group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next
three years and extrapolates cash flows to perpetuity excluding any growth
if the recoverable amount of goodwill is estimated to be less than its carrying amount the carrying amount is reduced to its
recoverable amount an impairment loss is recognised as an expense immediately 
gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold
other intangible assets
intangible assets other than goodwill that are acquired by the group are stated at cost less accumulated amortisation and
impairment losses see note 9 46
accounting policies continued
amortisation
amortisation is charged to the income statement on a straightline basis over the estimated useful lives other intangible assets
are amortised from the date that they are available for use the group has identified intangible assets in respect of its customer
base the values of these contracts are recognised as part of the net identifiable assets acquired and are amortised over the
unexpired period of the contract which is up to five years
inventories
inventories are stated at the lower of cost and net realisable value cost comprises direct materials and where appropriate
overheads that have been incurred in bringing the inventory to its present location and condition net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses
financial instruments
a financial assets
the group’s financial assets fall into the categories discussed below with the allocation depending to an extent on the purpose
for which the asset was acquired although the group occasionally uses derivative financial instruments in economic hedges of
currency rate risk it does not hedge account for these transactions the group has not classified any of its financial assets as held
to maturity
unless otherwise indicated the carrying amounts of the group’s financial assets are a reasonable approximation of their fair
values
a i loans and receivables
these assets are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market
they arise principally through the provision of goods and services to customers eg trade receivables and deposits held at
banks but may also incorporate other types of contractual monetary asset they are initially recognised at fair value plus
transaction costs that are directly attributable to the acquisition or issue and subsequently carried at amortised cost using the
effective interest rate method less provision for impairment
the effect of discounting on these financial instruments is not considered to be material
impairment provisions are recognised when there is objective evidence such as significant financial difficulties on the part of the
counterparty or default or significant delay in payment that the group will be unable to collect all of the amounts due under the
terms receivable the amount of such a provision being the difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired receivable for trade receivables such provisions are recorded in a
separate allowance account with the loss being recognised within distribution expenses in the income statement on
confirmation that the trade receivable will not be collectable the gross carrying value of the asset is written off against the
associated provision
a ii fair value through profit or loss
this category comprises only ‘in the money’ foreign exchange derivatives to the extent that they exist see bii for ‘out of the
money’ derivatives they are carried in the balance sheet at fair value with changes in fair value recognised in finance income or
expense other than these derivative financial instruments the group does not have any assets held for trading nor has it
designated any financial assets as being at fair value through profit or loss
the fair value of the group’s foreign exchange derivatives is measured using quoted forward exchange rates and yield curves
derived from quoted interest rates matching maturity of the contracts
b financial liabilities
the group classifies its financial liabilities into one of two categories depending on the purpose for which the liability was
incurred although the group uses derivative financial instruments in economic hedges of currency risk it does not hedge
account for these transactions
unless otherwise indicated the carrying amounts of the group’s financial liabilities are a reasonable approximation of their fair
values
b i financial liabilities measured at amortised cost
these liabilities include the following items
ii trade payables and other shortterm monetary liabilities which are initially recognised at fair value and subsequently carried 
at amortised cost using the effective interest method
ii bank borrowings and loan notes are initially recognised at fair value net of any transaction costs directly attributable to the 
issue of the instrument such interest bearing liabilities are subsequently measured at amortised cost using the effective 
interest rate method interest is recognised as a finance expense in the income statement
the fair value of the group’s financial liabilities is determined in accordance with generally accepted pricing models based on
discounted cash flow analysis using market rates of interest
annual report 2007 stock code mrx metalrax group plc annual report 2007 47 metalrax group plc
b ii fair value through profit or loss
this category comprises only ‘out of the money’ derivatives to the extent that they exist see a ii for ‘in the money’ derivatives
they are carried in the balance sheet at fair value with changes in fair value recognised in finance income or expense other than
these derivative financial instruments the group does not have any liabilities held for trading nor has it designated any financial
liabilities as being at fair value through profit or loss
the methods used for calculating the fair value of the group’s interest rate and foreign exchange derivatives have been described
in a ii above
c share capital
the group’s ordinary shares are classified as equity instruments the group is not subject to any externally imposed capital
requirements share capital includes the nominal value of the shares and any share premium attaching to the shares
assets held for sale
assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction
rather than through continuing use 
assets held for sale are stated at the lower of carrying amount and fair value less costs to sell
cash and cash equivalents
for the purposes of the consolidated cash flow statement cash and cash equivalents comprise cash balances with less than three
months maturity from the date of acquisition
employee benefits
pension schemes
payments to defined contribution retirement benefit schemes are charged as an expense as they fall due payments made to
statemanaged retirement benefit schemes are dealt with as payments to defined contribution schemes where the group’s
obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme
for defined benefit schemes the cost of providing benefits is determined using the projected unit credit method with actuarial
valuations being carried out at each balance sheet date actuarial gains and losses are recognised in full in the period in which
they occur they are recognised outside profit or loss and presented in the statement of recognised income and expense
past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a
straightline basis over the average period until the benefits become vested
the retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation
as adjusted for unrecognised past service cost and as reduced by the fair value of scheme assets any asset resulting from this
calculation is limited to past service cost plus the present value of available refunds and reductions in future contributions to the
scheme
sharebased payments
the group provides sharebased incentives under three schemes all previous schemes having lapsed
executive bonus and longterm incentive plan ltip
this was introduced during 2006 for certain executives to date no awards have been made under this plan
2007 executive share option plan esop
this plan introduced during 2007 allows the granting of options to any employee in the group including executive directors
subject to the achievement of certain performance targets to date no awards have been made under this plan
2007 sharesave scheme
this hm revenue  customs approved scheme was introduced during 2007 and allows employees to commit to saving a fixed
amount of salary each month which can be used after three years to purchase share options awarded to individual employees
based on the level of savings they have agreed to as such it is regarded as an equitysettled share option plan with a vesting
period of three years and with nonmarket based performance criteria
the first awards under this scheme were made on 24 october 2007 and will vest on 1 december 2010 the fair value of this
award was measured at the date of grant using the blackscholes model and will not be subsequently remeasured this fair
value is charged to the consolidated income statement on a straightline basis over the vesting period based on the actual level of
forfeiture and the expected level of options that will ultimately vest the corresponding credit is to shareholders’ funds 48
accounting policies continued
provisions
a provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past
event and it is probable that an outflow of economic benefits will be required to settle the obligation if the effect is material
provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market
assessments of the time value of money and where appropriate the risks specific to the liability
foreign currencies
the individual financial statements of each group company are presented in the currency of the primary economic environment
in which it operates its functional currency for the purpose of the consolidated financial statements the results and financial
position of each group company are expressed in pounds sterling which is the functional currency of the company and the
presentation currency for the consolidated financial statements
in preparing the financial statement of the individual companies transactions in currencies other than the functional currency
foreign currencies are recorded at the rates of exchange prevailing on the dates of the transactions at each balance sheet date
monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance
sheet date
for the purpose of presenting consolidated financial statements the assets and liabilities of the group’s foreign operations are
translated at exchange rates prevailing on the balance sheet date income and expense items are translated at the average
exchange rates for the period
significant judgments and estimates
the preparation of financial statements in conformity with ifrs requires management to make judgments estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities income and expenses the
estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances the results of which form the basis of making the judgments about carrying values of assets
and liabilities that are not readily apparent from other sources actual results may differ from these estimates
in the process of applying the group’s accounting policies management have concluded that the three areas of significant
judgment and estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are
impairment of goodwill
determining whether goodwill is impaired requires an estimation of the value in use of the cashgenerating units to which
goodwill has been allocated the value in use calculation requires the company to estimate the future cash flows expected to
arise from the cashgenerating unit and a suitable discount rate to calculate present value the carrying amount of goodwill at
the balance sheet date was £11381000 no impairment loss was recognised during 2007
long term contracts
the carrying value of both work in progress and amounts recoverable in contracts is carefully considered through an exercise of
estimating the final position on completion of those contracts this includes making a judgment as to the success of any claims
including those which may be subject to a legal process for recovery
stock provisioning policy
in 2007 the basis on which provisions for obsolete and slowmoving stock were set up was revised to a systematic approach
based on anticipated usage this requires management at each business unit to make judgments relating both to the extent to
which historic usage is likely to continue into the future and also on the likely net realisable value of stock
annual report 2007 stock code mrx metalrax group plc annual report 2007 49 metalrax group plc
notes to the accounts year ended 31 december 2007
adoption of new and revised standards
in the current year the group has adopted ifrs 7 ‘financial instruments disclosures’ which is effective for annual reporting periods beginning
on or after 1 january 2007 and the related amendment to ias 1 ‘presentation of financial statements’ the impact of this has been to expand
the disclosures provided in these financial statements regarding the group’ s financial instruments and management of capital see note 26
four interpretations issued by the international financial reporting interpretations committee are effective for the current period these are
ii ifric 7 ‘applying the restatement approach under ias 29 financial reporting in hyperinflationary economies’
ii ifric 8 ‘scope of ifrs 2’
ii ifric 9 ‘reassessment of embedded derivatives’
ii ifric 10 ‘interim financial reporting and impairment’
the adoption of these interpretations has not led to any changes in the group’s accounting policies
at the date of authorisation of these financial statements the following standards and interpretations which have not been applied in
these financial statements were in issue but not yet effective
ii ifrs 8 ‘operating segments’
ii ias 23 revised ‘borrowing costs’
ii ifric 11 ‘ifrs 2 — group and treasury share transactions’
ii ifric 12 ‘service concession arrangement’
ii ifric 13 ‘customer loyalty programmes’
ii ifric 14 ‘ias 19 the limit on a defined benefit asset minimum funding requirements and their interaction’
the directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the
financial statements of the group except for additional segment disclosures when ifrs 8 comes into effect for periods commencing on
or after 1 january 2009
1 revenue analysis by geographical destination and activity
an analysis of the group’s revenue is as follows
2007 2006
£000 £000
sales of goods 109185 108437
revenue from construction contracts 9307 11648
property rental income 155 148
118647 120233
finance income — 6
revenue from external customers only 118647 120239
2007 2006
£000 £000
united kingdom 88622 92201
rest of europe 22617 21153
north america 2712 2252
rest of world 4696 4627
118647 120233
housewares 25661 27640
engineering support services 54348 54175
automotive 42453 42471
intragroup 3815 4053
118647 120233
intragroup sales are charged at prevailing market prices and mostly originate from the engineering support services segment 50
notes to the accounts continued year ended 31 december 2007
2 segmental analysis by activity
as noted in the chief executive’s review of strategy from january 2008 the group has been reorganised into two divisions —
consumer durables and specialist engineering — and future management and reporting will be on this basis for 2007 the group
was organised into three operating divisions — housewares engineering support services and automotive — and the segmental
reporting has been analysed on this basis the principal activities of the three divisions are as follows
housewares — produces and markets bakeware together with associated ranges of kitchen tools to both retail and commercial
markets in the uk and internationally
engineering support services — provides surface coated metals architectural primary and secondary steelwork mezzanine flooring
and storage equipment and also distribution of tools fasteners and janitorial products
automotive — precision manufacturing activities providing supplies worldwide to automotive telecommunications offroad vehicles
enclosure hardware and brewery bar display markets
2007 2006
before exceptional before exceptional
exceptional items exceptional items
items note 3 total items note 3 total
operating profit £000 £000 £000 £000 £000 £000
housewares 1825 2490 665 1316 866 2182
engineering support services 1263 3217 1954 3465 90 3375
automotive 293 6510 6217 2226 1184 1042
3381 12217 8836 7007 408 6599
finance income — 6
finance costs 1120 511
lossprofit before taxation 9956 6094
taxation 2970 1497
lossprofit for the year 6986 4597
2007 2006
engineering engineering
support support
housewares services automotive total housewares services automotive total
other information £000 £000 £000 £000 £000 £000 £000 £000
capital 
expenditure 1370 1056 3471 5897 368 1202 1618 3188
depreciation 631 1192 2024 3847 840 989 1495 3324
impairment 
losses —— 2990 2990 ——— —
amortisation — 50 — 50 — 80 — 80
balance sheet
segment assets 20025 37973 30036 88034 23247 36330 33002 92579
unallocated
assets 2657 1163
90691 93742
segment
liabilities 2997 10124 7914 21035 3207 10617 7365 21189
unallocated
liabilities 19068 18254
40103 39443
ˆ ˆ ˆ ˆ
annual report 2007 stock code mrx metalrax group plc annual report 2007 51 metalrax group plc
2 segmental analysis by activity continued
the unallocated assets and liabilities represent corporate assets and liabilities cash tax including deferred tax and pension scheme
obligations capital expenditure and depreciation above excludes amounts in respect of the parent company and other group
companies not included in the segmental analysis
an analysis of the unallocated assets and liabilities is provided below
2007 2006
unallocated assets £000 £000
deferred tax asset 1609 948
current tax asset 274 —
corporate assets 774 215
2657 1163
2007 2006
unallocated liabilities £000 £000
loan notes 500 750
current tax payable — 540
bank overdrafts and loans 12031 9936
pension 3412 3159
deferred tax 1143 2128
corporate liabilities 1982 1741
19068 18254
3 exceptional items
exceptional items are items of income and expenditure that in the judgement of management should be disclosed separately on the
basis that they are material either by their nature or their size to the understanding of the financial statements and where not to do
so would distort the comparability of financial performance between periods items which have been considered appropriate to
disclose as exceptional include profits and losses on the disposal of noncurrent assets restructuring and reorganisation costs including
profits or losses on the disposal of businesses and significant impairments of other current assets
2007 2006
£000 £000
profit on sale of property
1
1472 1026
discount on acquisition
2
— 852
reorganisation and restructuring costs
3
9571 2286
losses on longterm contracts
4
1941 —
provision for stock writedowns
5
2177 —
total exceptional items before taxation 12217 408
1
profit on the sale of property arises from the disposal of uk operating sites in 2007 this related to the sites formerly occupied by
kenham tools and pressings and prescott powell together with part of the gw international site at burnley
2
the discount on acquisition in 2006 reflected the discount against net asset value on the acquisition of advanced quality solutions
limited arising primarily from a revaluation of the romanian property at the date of acquisition
3
during 2007 £9571 million of reorganisation and restructuring costs were incurred these related to
ii £1999 million of costs incurred as a result of the integration of belsize into bacol fine blanking and exiting the belsize site at 
milton keynes together with production inefficiencies arising from the move
ii other reorganisation and restructuring costs at gw international mrx automotive cooper coated coilfabricote mrx
romania totalling £2299 million
ii writedown of bacol fine blanking fixed assets stock and debtors plus professional fees incurred in the disposal of the bacol 
fine blanking business amounting to £2589 million
ii a £1838 million writedown of assets restructuring and contractual costs relating to the exit of high volume low margin
automotive business in romania following the ceo’s strategic review
ii £0846 million of costs for restructuring the plc board together with professional fees in connection with the ceo’s 
strategic review
included in the total is £2990 million arising from impairment losses on plant and equipment 52
notes to the accounts continued year ended 31 december 2007
annual report 2007 stock code mrx metalrax group plc
3 exceptional items continued
4
down  francis were involved in two major construction contracts where overruns and specification changes occurred these
resulted in contract disputes and loss of profits on other contracts claims lodged against these disputes had been in negotiation
over the course of two years since publication of last year’s accounts considerable expense on professional fees had been incurred
in pursuit of these claims in addition disproportionate management time was being consumed which was affecting ongoing
trading following a full and thorough review of these contracts including newly commissioned professional advice the company
has negotiated a settlement on these disputes the settlement and additional costs incurred since the last audited accounts gives
rise to a charge totalling £1941 million in respect of the disputed and other affected contracts
5
an extensive review of old obsolete and slowmoving stock has been carried out which gives rise to an additional stock provision
requirement of £2177 million in part due to changes in commercial and strategic focus a new systematic approach to
identification and provisioning for slowmoving stock has been implemented
4 finance income and expense
2007 2006
£000 £000
interest income on loans and bank balances — 6
total finance income — 6
net finance cost of defined benefit pension scheme 95 —
interest on bank loans and overdrafts 1025 511
total finance expenses 1120 511
net finance expense 1120 505
5 operating lossprofit for the year
2007 2006
£000 £000
this is stated after chargingcrediting the following
auditors’ remuneration
audit including parent company £27000 2006 £20000 113 103
other services 46 27
depreciation 3976 3473
amortisation of intangibles 50 80
plant hire 340 352
property rentals 367 448
cost of inventories recognised as an expense 62136 64306
discount on acquisition — 852
net foreign exchange gain 320 47
staff costs 30572 31935
2007 2006
£000 £000
auditors’ remuneration
fees payable to the company’s auditors for the audit of the company’s annual accounts 27 20
the audit of the company’s subsidiaries pursuant to legislation 86 83
total audit fees 113 103
other services pursuant to legislation 16 8
tax services 30 19
total nonaudit fees 46 27 annual report 2007 53 metalrax group plc
6 taxation
2007 2006
£000 £000
current tax
uk corporation tax at 30 — 1332
previous overprovision 4 —
4 1332
deferred tax note 20
current year 2813 110
effect of change in rate 47 —
prior year 200 55
2970 1497
factors affecting the tax charge for the year
lossprofit on continuing activities before tax 9956 6094
tax on continuing activities at 30 2987 1828
effects of
expenses not deductible for tax purposes 210 22
capital profits not taxable 412 428
deferred tax not recognised 376 20
change in rate 47 —
adjustment to tax charge in respect of previous periods 204 55
2970 1497
taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions
7 lossearnings per share
the basic and diluted lossearnings per share are calculated using the lossprofit attributable to equity holders of the parent the
adjusted earnings per share uses this figure adjusted by the posttax exceptional charges
diluted earnings per share needs to be disclosed when a company could be called upon to issue shares that would decrease net
profit or increase net loss per share it would be inappropriate to assume that option holders would act irrationally in exercising out
ofthemoney options when the company has made a loss and therefore the existing options have no dilutive effect in the current
year since there are no other diluting future share issues diluted lossearning per share equals basic lossearning per share for the
current year in the previous year there were no potential diluting future shares
the weighted average number of shares used in the calculation of the basic lossearnings per share the adjusted earnings per
share and the diluted lossearnings per share is therefore 119897298 2006 119897298
8 dividends equity
2007 2006
£000 £000
final dividend for 2006 paid on 25 may 2007 of 375p 2005 final 375p 4496 4496
interim dividend for 2007 paid on 26 october 2007 of 165p 2006 interim 165p 1978 1978
total equity dividends paid 6474 6474
proposed dividends
the directors recommend that no final dividend be paid and a resolution to this effect will be proposed at the annual general
meeting to be held on 23 may 2008 therefore the final dividend amounts to £nil 2006 £4496000 54
notes to the accounts continued year ended 31 december 2007
9 goodwill and other intangible assets
other
goodwill intangibles
£000 £000
cost
at 1 january 2006 11058 250
arising on acquisitions 298 —
at 1 january 2007 11356 250
adjustment to purchase consideration 25 —
disposals — 250
at 31 december 2007 11381 —
amortisation
at 1 january 2006 — 120
charge for the year — 80
at 1 january 2007 — 200
charge for the year — 50
disposals — 250
at 31 december 2007 ——
net book value
at 31 december 2007 11381 —
at 31 december 2006 11356 50
goodwill impairment
goodwill acquired in a business combination is allocated at acquisition to the cash generating units cgus that are expected to
benefit from that business combination the carrying amount of goodwill had been allocated as follows
2007 2006
£000 £000
housewares 4862 4837
engineering support services 6378 6378
automotive 141 141
11381 11356
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired
the recoverable amounts of the cgus are determined from value in use calculations the key assumptions for the value in use
calculations are those regarding the discount rates growth rates and expected changes to selling prices and direct costs during the
period management estimates discount rates using pretax rates that reflect current market assessments of the time value of money
and the risks specific to the cgus the growth rates are based on industry growth forecasts changes in selling prices and direct
costs are based on past practices and expectations of future changes in the market
the group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next three
years and extrapolates cash flows to perpetuity excluding any growth
other intangible assets
other intangible assets comprise beneficial contracts identified on acquisition of a subsidiary 
annual report 2007 stock code mrx metalrax group plc annual report 2007 55 metalrax group plc
10 property plant and equipment of the group
freehold and short
long leasehold leasehold plant and
properties properties vehicles total
£000 £000 £000 £000
cost or valuation
at 1 january 2006 15894 557 47328 63779
additions 293 — 2948 3241
acquisition of businesses 6816 — 1587 8403
disposals 865 — 543 1408
transfer to current assets 975 —— 975
at 1 january 2007 21163 557 51320 73040
additions 3082 — 2937 6019
disposals 3354 — 4671 8025
exchange adjustment 14 — 15 29
revaluation increase 8514 23 — 8537
transfer to current assets 2877 580 7916 11373
at 31 december 2007 26542 — 41685 68227
comprising
at cost —— 41685 41685
at valuation on 31 december 2007 26542 —— 26542
at 31 december 2007 26542 — 41685 68227
aggregate depreciation and impairment
at 1 january 2006 3122 230 33804 37156
charge for year 322 11 3140 3473
disposals 45 — 469 514
transfer to current assets 233 —— 233
at 1 january 2007 3166 241 36475 39882
charge for year 332 11 3633 3976
impairment losses —— 2990 2990
disposals 623 — 3417 4040
exchange adjustment 3— 6 9
eliminated on revaluation 2878 252 — 3130
transfer to current assets —— 7816 7816
at 31 december 2007 —— 31871 31871
carrying value
at 31 december 2007 26542 — 9814 36356
at 31 december 2006 17997 316 14845 33158
the cost or valuation of depreciable assets included above is £58827000 2006 £68384000
the cost or valuation of long leasehold properties included above is £3590000 2006 £2897000
the impairment loss on plant arose in connection with the restructuring in the automotive division
freehold and long leasehold properties were revalued at 31 december 2007 by atisreal limited independent valuers not connected
with the group on the basis of market value the valuation conforms to international valuation standards and was based on recent
market transactions on arm’s length terms for similar properties details of the revaluation surplus are disclosed in note 23
at 31 december 2007 had the freehold and long leasehold properties been carried at historic cost less accumulated depreciation
and accumulated impairment losses their carrying value would have been approximately £166 million 2006 £179 million 56
notes to the accounts continued year ended 31 december 2007
11 property plant and equipment of the company
freehold plant and
properties vehicles total
£000 £000 £000
cost or valuation
at 1 january 2006 2123 145 2268
additions — 51 51
disposals — 20 20
at 1 january 2007 2123 176 2299
additions — 118 118
disposals — 56 56
revaluation increase 593 — 593
at 31 december 2007 2716 238 2954
comprising
at cost — 238 238
at valuation on 31 december 2007 2716 — 2716
at 31 december 2007 2716 238 2954
aggregate depreciation
at 1 january 2006 448 106 554
charge for year 36 24 60
disposals — 3 3
at 1 january 2007 484 127 611
charge for year 36 29 65
disposals — 53 53
eliminated on revaluation 520 — 520
at 31 december 2007 — 103 103
carrying value
at 31 december 2007 2716 135 2851
at 31 december 2006 1639 49 1688
the cost or valuation of depreciable assets included above is £1851000 2006 £1982000 the revaluation of the properties is
outlined in note 10
at 31 december 2007 had the freehold properties been carried at historic cost less accumulated depreciation their carrying value
would have been approximately £1603000 2006 £1639000
annual report 2007 stock code mrx metalrax group plc annual report 2007 57 metalrax group plc
12 investments of the company
shares in
subsidiaries
£000
cost
at 1 january 2006 29774
additions 5041
at 1 january 2007 34815
adjustment to purchase consideration 25
disposal 250
at 31 december 2007 34590
provisions
at 1 january 2006 4669
movement for the year 80
at 1 january 2007 4749
movement for the year 50
disposal 250
at 31 december 2007 4549
net book value
at 31 december 2007 30041
at 31 december 2006 30066
the company has the following principal subsidiaries
country of incorporation
or operation activity holding
mrx housewares limited great britain manufacturing 100
mrx engineering support services limited great britain manufacturing 100
mrx automotive limited great britain manufacturing 100
metalrax group properties limited great britain property holding 100
hidrosib sa romania manufacturing 99
investments in subsidiaries are stated at cost less where appropriate provisions for impairment 58
notes to the accounts continued year ended 31 december 2007
13 inventories
2007 2006
£000 £000
raw materials 5070 7113
work in progress 3728 4369
finished goods 4378 6586
13176 18068
14 trade and other receivables
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
trade receivables 23675 27639 — —
other receivables — 705 — 671
prepayments 663 755 71 17
24338 29099 71 688
the average credit period taken on sales of goods is 72 days no interest is charged on past due receivables in 2006 the other
receivables related to proceeds from the disposal of properties received during january 2007
the above amounts are net of an allowance net of vat of £324000 2006 £336000 made for estimated irrecoverable amounts
from the sale of goods the movements on this allowance account during the year are summarised below
2007 2006
£000 £000
opening balance at 1 january 2007 336 563
increases in provisions 269 198
written off against provisions 356 438
recovered amounts 75 13
closing balance at 31 december 2007 324 336
an analysis of the age of trade receivables that are past due as at the reporting date but are not impaired can be seen in the table
below
2007 2006
£000 £000
1–30 days overdue 2290 3289
31–60 days overdue 679 950
 60 days overdue 917 1581
total 3886 5820
an analysis of the age of impaired trade receivables is as follows
2007 2006
£000 £000
1–30 days overdue — —
31–60 days overdue — —
 60 days overdue 363 394
total 363 394
the main factors used in assessing the impairment of trade receivables are the age of the balance and the circumstances of the
individual customer the fair value of trade receivables that are past due or impaired is their carrying amount
2007 2006
construction contracts £000 £000
contracts in progress at the balance sheet date
amounts due from contract customers included in
trade and other receivables 223 1712
contracts costs incurred plus recognised profit less recognised losses to date 622 3392
less progress billings 399 1680
223 1712
at 31 december 2007 retentions held by customers for contract work amounted to £398000 2006 £407000 there were no
advances received from customers for contract work
at 31 december 2007 amounts of £112000 2006 £70000 included in trade and other receivables and arising from construction
contracts are due for settlement after more than 12 months
annual report 2007 stock code mrx metalrax group plc annual report 2007 59 metalrax group plc
15 assets held for sale
assets held for sale comprise
long leasehold property together with plant and equipment following the sale of the bacol fine blanking business
plant and equipment in romania as a result of the decision to exit highvolume low margin automotive businesses and
freehold properties at premier stairways and cooper coated coil as a result of relocations
these assets are available for sale and are being actively marketed
16 creditors
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
loan notes 250 250 250 250
trade payables 15473 18181 324 23
accruals 3689 1238 1281 309
social security and other taxes 2520 2606 546 900
provisions 384 — — —
current tax payable — 540 — —
bank overdrafts and loans 12031 9936 23225 5847
other payables 662 905 101 467
35009 33656 25727 7796
trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs the average credit
period taken for trade purchases is 67 days the directors consider that the carrying amount of trade payables approximates to their
fair value
the increase in accruals in the year is primarily due to items associated with the exceptional charges detailed in note 3
included in other payables is deferred consideration on acquisition of businesses of £227000 2006 £502000
17 loans and borrowings
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
current loans and borrowings
bank overdraft 2031 4936 13225 847
bank loans 10000 5000 10000 5000
loan notes 250 250 250 250
total current loans and borrowing 12281 10186 23475 6097
noncurrent loans and borrowings
bank loans — — — —
loan notes 250 500 250 500
total noncurrent loans and borrowings 250 500 250 500
total loans and borrowings 12531 10686 23725 6597
the fair value of the group’s bank loans and overdrafts at the balance sheet date was £120 million 2006 £99 million for the
group’s other loans and borrowings the carrying amounts are a reasonable approximation of the financial instruments’ fair value
the group has a bank overdraft facility of £140 million which is due for renewal on 31 july 2008 bank overdrafts accrue interest at
1 over the bank’s base rate are repayable on demand and are covered by crossguarantees within the group interest accrues on a
daily basis and increases the balance outstanding on the overdraft
the group’s bank loan facility allows the group to draw down a maximum of £15 million the facility is renewable on 24 may 2011
during this period the group is able to draw down variable amounts for fixed periods usually 6 months the interest rate is fixed at
06 above libor at the date of the drawdown and is payable at the end of the agreed drawdown period
the group also has £2 million drawdown foreign currency facility which it uses to fund the group activities in us dollars and euros
interest is payable at 1 above the bank’s base rate and accrues on a daily basis no amounts have been drawn down at this facility
at the year end 2006 £nil
the loan notes formed part of the consideration for the purchase of stackright building systems limited and only become payable if
stackright building systems limited achieves its profit targets for the years ending 31 december 2007 and 2008 the loan notes
mature in equal proportions on each of 3 consecutive anniversaries of their issuance they are interestfree 60
notes to the accounts continued year ended 31 december 2007
18 provisions
onerous contract
provision total
£000 £000
at 1 january 2007 ——
additional provision in the year 673 673
at 31 december 2007 673 673
included in current liabilities 384
included in noncurrent liabilities 289
673
the onerous contract provision represents management’s best estimate of the cost of maintaining the group’s operations in romania
until september 2009 in accordance with the contractual obligation to the romanian government entered into by advanced 
handling limited
19 pensions
defined contribution plans
the group contributes to a number of defined contribution pension plans and the total cost charged to income for the year was
£375000 2006 £257000 representing the contributions due to the plans for the year
defined benefit plans
the group operates a defined benefit plan in the uk for qualifying employees although this is closed to new entrants which provides
benefits based on final pensionable pay the assets of the scheme are held separately from those of the group being invested with
insurance providers the contributions are determined by an independent qualified actuary employed by the insurance providers on the
basis of triennial valuations using the attained age funding method the major assumptions used by the actuary were
2007 2006 2005 2004 2003
 pa  pa  pa  pa  pa
inflation 34 31 28 28 28
rate of increase in salaries 39 36 38 38 38
pension increases subject to lpi 34 31 28 28 28
discount rate 57 51 47 52 53
return on plan assets
equities 84 80 77 87 88
property 84 81 78 78 78
bonds 49 47 43 48 50
other 45 45 43 48 38
total 59 56 52 56 51
amounts recognised in the income statement in respect of defined benefit schemes are as follows
2007 2006
£000 £000
current service cost 326 564
interest cost on scheme liabilities 987 952
expected return on scheme assets 892 761
421 755
actual return on scheme assets 51 1357
the current service cost excludes the cost of insuring death in service benefits
of the charge for the year £326000 2006 £755000 has been included in administrative expenses and £95000 2006 £nil 
has been included in finance expense see note 4 actuarial gains and losses have been reported in the statement of recognised income
and expense
the amounts included in the balance sheet arising from the group’s obligations in respect of defined benefit schemes are as follows
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
total market value of assets 16448 16464 16448 13842
present value of scheme liabilities 19860 19623 19860 16863
gross pension liability 3412 3159 3412 3021
annual report 2007 stock code mrx metalrax group plc annual report 2007 61 metalrax group plc
19 pensions continued
movements in the present value of defined benefit obligations were as follows
2007 2006
£000 £000
at 1 january 2007 19623 20239
service cost 326 564
interest cost 987 952
contributions from scheme members 230 228
actuarial gains and losses 270 1845
benefits paid 1036 515
at 31 december 2007 19860 19623
movements in the fair value of scheme assets were as follows
2007 2006
£000 £000
at 1 january 2007 16464 14425
expected return on scheme assets 892 761
actuarial gains and losses 842 596
contributions from company 740 968
contributions from scheme members 230 228
benefits paid 1036 514
at 31 december 2007 16448 16464
the analysis of the scheme assets and the expected rate of return at the balance sheet date was as follows
expected return fair value of assets
2007 2006 2007 2006
  £000 £000
cash and other assets 45 45 115 53
group pension contracts 59 56 16563 16517
16448 16464
the five year history of experience adjustments is as follows
2007 2006 2005 2004 2003
£000 £000 £000 £000 £000
present value of defined benefit obligations 19860 19623 20239 16079 15586
fair value of scheme assets 16448 16464 14425 12147 11931
deficit in the scheme 3412 3159 5814 3932 3655
experience adjustments on scheme liabilities 270 1845 2500 368 890
percentage of scheme liabilities  14 94 124 23 57
experience adjustments on scheme assets 842 596 1045 366 38
percentage of scheme assets  51 36 72 30 03
the estimated amount of contributions expected to be paid to the scheme during 2008 is £674000 62
notes to the accounts continued year ended 31 december 2007
20 deferred taxation
group company
£000 £000
balance at 1 january 2006 219 1661
transfer from income statement 165 45
acquired with subsidiary 63 —
transfer from statement of recognised income and expenses 733 723
balance at 1 january 2007 1180 893
transfer from income statement 2966 25
transfer from statement of recognised income and expenses 1320 95
balance at 31 december 2007 466 773
at 31 december 2007
accelerated allowances 1143 182
losses recognised 654 —
pension scheme deficit 955 955
asset 466 773
at 31 december 2006
accelerated allowances 2128 13
pension scheme deficit 948 906
liabilityasset 1180 893
deferred tax on temporary differences has been calculated at the rate of 28 2006 30 the effect of the reduction in the uk
corporation tax rate from 30 to 28 from 1 april 2008 has resulted in a reduction in the deferred tax liability at the end of 2007
of £33000 of which £14000 has been credited directly to the statement of recognised income and expenses
21 equity share capital
2007 2006
number of number of
ordinary shares of 5p each shares £000 shares £000
authorised 140000000 7000 140000000 7000
allotted called up and fully paid 119897298 5995 119897298 5995
the company has one class of ordinary shares which carry no right to fixed income
capital risk management
as described in the share capital accounting policy the group considers its capital to comprise its ordinary share capital share
premium and accumulated retained earnings in managing its capital the group’s primary objective is to ensure its continued ability
to provide a consistent return for its equity shareholders through a combination of capital growth and distributions
in order to achieve this objective the group monitors its gearing to balance risks and returns at an acceptable level and also to
maintain a sufficient funding base to enable the group to meet its working capital and strategic investment needs in making
decisions to adjust its capital structure to achieve these aims either through altering its dividend policy new share issues or the
reduction of debt the group considers not only its shortterm position but also its longterm operational and strategic objectives
22 sharebased payments
equitysettled share option scheme
under the 2007 sharesave plan employees are granted options to purchase shares in the company based on a fixed amount each
contributes monthly into a save as you earn account the options are exercisable at a price which represents a 20 discount to the
closing midmarket price averaged over the three days immediately prior to the date of grant the options vest three years after the
date of grant although there is scope for early vesting under the plan rules in circumstances such as retirement redundancy or
change of control options lapse if they have not been exercised within six months of vesting there are no other performance
criteria applicable to the exercise of the option
at 31 december 2007 options were outstanding as set out below exercisable for the periods and at the prices stated
2007 2006
number of weighted number of weighted
share average share average
summary of movement in share options options option price options option price
outstanding at the beginning of the year —— ——
exercised during the year —— ——
granted during the year 1381629 46p ——
lapsed during the year —— ——
outstanding at the end of the year 1381629 46p ——
exercisable at the end of the year —— ——
annual report 2007 stock code mrx metalrax group plc annual report 2007 63 metalrax group plc
22 sharebased payments continued
exercisable
number of option six months
analysis of outstanding options at 31 december 2007 shares price from
options granted 24 october 2007 1381629 46p 1 dec 2010
the weighted average remaining contractual life of the options outstanding was 292 years
under ifrs2 the fair value of the options granted has been recognised based on a blackscholes model using the following
assumptions
year of grant 2007 2006 2005
riskfree interest rate 49 ——
dividend yield 50 ——
expected volatility 444 ——
expected life years 308 ——
option price 46p ——
fair value of an option 1884p ——
the expected volatility has been calculated based on the historic volatility of the company’s share price over the past 3 years
adjusted for any expected changes to future volatility arising from publicly available information
the total cost recognised in the consolidated income statement in respect of equitysettled sharebased payment schemes amounted
to £15000 2006 £nil
23 reserves
capital
share redemption revaluation other retained
premium reserve reserve reserve earnings
£000 £000 £000 £000 £000
group
at 1 january 2006 2732 274 —— 45467
profit for the year ———— 4597
equity dividends paid ———— 6474
actuarial gain on retirement benefits net of tax ———— 1708
at 1 january 2007 2732 274 —— 45298
loss for the year ———— 6986
equity dividends paid ———— 6474
actuarial gain on retirement benefits net of tax ———— 487
sharebased payments ——— 15 —
revaluation of land and buildings —— 11667 ——
deferred tax liability on revaluation of land and buildings —— 1405 ——
exchange losses ———— 41
at 31 december 2007 2732 274 10262 15 31310
the capital redemption reserve arose in previous years when the company repurchased its own shares
the other reserve represents the provision established in respect of the value of equitysettled share options see note 22
capital
share redemption revaluation retained
premium reserve reserve earnings
£000 £000 £000 £000
company
at 1 january 2006 2732 274 — 40866
loss for the year ——— 1019
equity dividends paid ——— 6474
actuarial gain on retirement benefits net of tax ——— 1686
at 1 january 2007 2732 274 — 35059
loss for the year ——— 1847
equity dividends paid ——— 6474
actuarial gain on retirement benefits net of tax ——— 487
revaluation of land and buildings —— 1113 —
deferred tax liability on revaluation of land and buildings —— 180 —
at 31 december 2007 2732 274 933 26251
the company loss for the financial year amounted to £1847000 2006 £1019000 64
notes to the accounts continued year ended 31 december 2007
24 movement in equity
capital
share share redemption revaluation other retained total
capital premium reserve reserve reserve earnings equity
£000 £000 £000 £000 £000 £000 £000
at 1 january 2006 5995 2732 274 —— 45467 54468
total recognised income for the year—— —— — 6305 6305
equity dividends paid —— —— — 6474 6474
at 1 january 2007 5995 2732 274 —— 45298 54299
total recognised income for the year—— — 10262 — 7514 2748
equity dividends paid —— —— — 6474 6474
sharebased payments —— —— 15 — 15
at 31 december 2007 5995 2732 274 10262 15 31310 50588
25 notes to the cash flow statement
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
a reconciliation of operating profit to 
net cash flow from operating activities
continuing operations
operating lossprofit 8836 6599 566 1055 
depreciation net of disposals 4872 3428 53 62 
profit on sale of property 1472 1026 — —
impairment losses 2990 — — —
sharebased payment expense 15 — — —
exchange losses 41 — — —
discount on acquisition — 852 — —
amortisation of intangibles 50 80 50 80 
decrease in inventories 4891 53 — —
decreaseincrease in trade and other receivables 4099 3054 9101 1446
decreaseincrease in payables 432 78 704 762
increase in provisions 673 — — —
decrease in noncurrent liabilities 319 217 319 185 
cash generated fromused in continuing operations 6490 5089 9179 1782
b reconciliation of net cash flow 
to movement in net debtfunds
decrease in cash in the year — 2713 — 9308
new bank loan 5000 5000 5000 5000
decreaseincrease in bank overdrafts 2905 4936 12378 847
loan notes redeemed 250 300 250 300
movement in net debt 1845 12349 17128 14855
net debtfunds at 1 january 2007 10686 1663 6597 8258
net debt at 31 december 2007 12531 10686 23725 6597
annual report 2007 stock code mrx metalrax group plc annual report 2007 65 metalrax group plc
25 notes to the cash flow statement continued
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
c net debt reconciled to the balance sheet
cash and cash equivalents — — — —
current liabilities loan notes bank overdrafts and loans 12281 10186 23475 6097
noncurrent liabilities loan notes 250 500 250 500
12531 10686 23725 6597
d acquisitions
cash consideration — 4539 — 4539
cash acquired — 105 — —
loans acquired — 1713 — —
payment of deferred consideration 549 545 549 545
549 6692 549 5084
26 financial instruments
risk exposure and management
in common with all other businesses the group is exposed to risks that arise from its use of financial instruments this note describes
the group’s objectives policies and processes for managing those risks and the methods used to measure them further quantitative
information in respect of these risks is presented throughout these financial statements
there have been no substantive changes in the group’s exposure to financial instrument risks its objectives policies and processes
for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note
principal financial instruments
the principal financial instruments used by the group and the company from which financial instrument risk arises are as follows
group company
ii trade and other receivables ii other receivables
ii bank overdrafts ii intercompany receivables
ii trade and other payables ii bank overdrafts
ii bank loans ii trade and other payables
ii loan notes ii bank loans
ii loan notes
the group occasionally uses forward exchange contracts to mitigate the effect of fluctuations in the us dollarsterling exchange rate
and eurosterling exchange rate at the balance sheet date the group had no outstanding contracts for purchase or sale of currency
nor had there been any significant contracts entered into during the year
intercompany receivables are due on demand and so pose no liquidity risk to the company
the company is also party to crosscompany guarantees with its subsidiaries relating to bank overdrafts as detailed in note 27
categories of financial assets and financial liabilities
the group and company hold no financial assets or liabilities categorised as held for trading all of the group’s liabilities are
unsecured 66
notes to the accounts continued year ended 31 december 2007
26 financial instruments continued
general objectives policies and processes
the board has overall responsibility for the determination of the group’s risk management objectives and policies and whilst
retaining ultimate responsibility for them it has delegated the authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the group’s finance function the board receives monthly reports through
which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets
the overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly affecting the group’s
competitiveness and flexibility further details regarding these policies are set out below
credit risk
credit risk arises principally from the group’s trade receivables it is the risk that the counterparty fails to discharge its obligation in
respect of the instrument
credit risk is managed locally by the management of each business unit prior to accepting new customers credit checks are
obtained from a reputable external source for example atradius creditcheck creditsafecom
based on this information credit limits and payment terms are established although for some large customers and contracts credit
risk is not considered to be high and credit limits can sometimes be exceeded these exceeded accounts are closely monitored and if
there is a concern over recoverability accounts are put on stop and no further goods will be sold before receiving payments pro
forma invoicing is sometimes used for new customers or customers with a poor payment history until creditworthiness can be
proven or reestablished
management teams at each division receive monthly ageing reports and these are used to chase relevant customers for outstanding
balances the board receives monthly reports summarising the turnover trade receivable balance and ageing profile of each of the
key customers individually
a number of the group’s businesses insure their credit risk during the year approximately 23 of the group’s revenue was insured
no major renegotiation of terms has taken place during the year there are no customers with restricted accounts
concentration of credit risk
while individual businesses may each have a limited number of significant customers these are usually bluechip companies where
the credit risk is assessed as low given the diverse range of markets and customers with which the group trades the credit risk is
spread over a large population and no individual customer is significant to the group
the carrying value of trade receivables recorded in the financial statements which is net of impairment losses represents the group’s
maximum exposure to credit risk full details are shown in note 14
liquidity risk
liquidity risk arises from the group’s management of working capital and the finance charges and principal repayments on its debt
instruments it is the risk that the group will encounter difficulty in meeting its financial obligations as they fall due the group’s
policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due
to achieve this aim the cash position is continuously monitored to ensure that cash balances or agreed facilities meet expected
requirements for a period of at least 90 days 
the board monitors annual cash budgets and updated forecasts against actual cash position on a monthly basis at the balance sheet
date these projections indicated that the group expected to have sufficient liquid resources to meet its obligations under all reasonably
expected circumstances the following table illustrates the contractual maturity analysis of the group’s financial liabilities that must be
settled gross based where relevant on balance sheet interest rates and exchange rates prevailing at the balance sheet date
group gross undiscounted cash flows due
in under between 6 and between 1 and in more than
total on demand 6 months 12 months 3 years 3 years
2007 £000 £000 £000 £000 £000 £000
bank overdraft 2031 2031 ————
bank loans 10000 — 10000 ———
loan notes note 17 500 — 250 — 250 —
at 31 december 2007 12531 2031 10250 — 250 —
2006
bank overdraft 4936 4936 ————
bank loans 5000 — 5000 ———
loan notes note 17 750 — 250 — 500 —
at 31 december 2006 10686 4936 5250 — 500 —
annual report 2007 stock code mrx metalrax group plc annual report 2007 67 metalrax group plc
26 financial instruments continued
company gross undiscounted cash flows due
in under between 6 and between 1 and in more than
total on demand 6 months 12 months 3 years 3 years
2007 £000 £000 £000 £000 £000 £000
bank overdraft 13225 13225 ——— —
bank loans 10000 — 10000 ———
loan notes note 17 500 — 250 — 250 —
at 31 december 2007 23725 13225 10250 — 250 —
2006
bank overdraft 847 847 ——— —
bank loans 5000 — 5000 ———
loan notes note 17 750 — 250 — 500 —
at 31 december 2006 6597 847 5250 — 500 —
market risk
market risk arises from the group’s use of interest bearing and foreign currency financial instruments it is the risk that the fair value
of future cash flows of a financial instrument will fluctuate because of changes in interest rates interest rate risk or foreign exchange
rates currency risk
interest rate risk 
it is the group’s policy to reduce interest rate risk by fixing the interest rate for the period of the drawdown on the £15 million loan
facility the interest rate is fixed for the period of the drawdown at amount of 06 above libor on the date of the drawdown the
bank overdraft and the foreign currency drawdown facility accrue a variable rate of interest at a rate of 1 above the banks’ base
rate interest rates are monitored on a regular basis
interest rate sensitivity
the annualised effect of a 50 basis point decrease in the interest rate at the balance sheet date on the variable rate debt carried at
that date would all other variables held constant have resulted in an decrease in posttax loss for the year of £7000 2006 increase
in posttax profit £17000 a 50 basis point increase in the interest rate would on the same basis have increased potential loss by
the same amount
currency risk
currency risk arises both on the translation of currency assets and liabilities in the balance sheet as well as from operational
transactions historically the group has not hedged translational credit risk primarily on its romanian operations group entities
settle liabilities denominated in their functional currency with the cash generated from their own operations in that currency where
group entities have liabilities denominated in a currency other than their functional currency they utilise cash reserves in that currency
or transfer currency within the group where the exposure is substantial they set up appropriate forward contracts to fix the liability
in order to monitor the continuing effectiveness of this policy the board receives a monthly forecast analysed by the major currencies
held by the group of liabilities due for settlement and expected cash reserves the group is exposed to currency risk on purchases
made from a major supplier based in the usa and the risk is occasionally hedged using forward exchange contracts whilst this is an
economic hedge of the cash flow risk the group does not apply hedge accounting at the balance sheet date the group had trade
payables of £158000 2006 £371000 denominated in us dollars
currency risk sensitivity
the effect of a 10 strengthening of the us dollar against sterling at the balance sheet date on the dollardenominated trade
payables carried at that date would all other variables held constant have resulted in an increase in posttax loss for the year of
£12000 2006 decrease in posttax profit of £26000 a 10 weakening in the exchange rate would on the same basis have
decreased posttax loss by £10000 2006 £24000 68
notes to the accounts continued year ended 31 december 2007
27 contingent liabilities
the company had given various crossguarantees in connection with group banking arrangements at 31 december 2007 the
liabilities under these arrangements were £12031000 2006 £9936000 
28 future capital expenditure
at 31 december 2007 capital expenditure contracted for but not provided in these accounts amounted to approximately £1337000
2006 £122000
29 commitments under operating leases
2007 2006
£000 £000
minimum lease payments under operating leases recognised in income for the year 619 606
at the balance sheet date the group had outstanding commitments for future minimum lease payments under noncancellable
operating leases which fall due as follows
2007 2006 2007 2006
properties properties other other
£000 £000 £000 £000
within one year 358 395 288 155
between two and five years 1471 548 235 288
after five years 3295 1557 — —
5124 2500 523 443
30 employees
2007 2006 2007 2006
group group company company
number number number number
average number during the year
monthly paid 491 426 18 10
weekly paid 1025 1201 — —
1516 1627 18 10
31 employee costs including directors
2007 2006 2007 2006
group group company company
£000 £000 £000 £000
wages and salaries 27752 28199 1386 801
social security 2119 2915 178 86
pension costs
defined benefit schemes 326 564 85 87
defined contribution schemes 375 257 57 25
30572 31935 1706 999
detailed information concerning directors’ emoluments and share options is shown in the directors’ remuneration report on 
pages 30 to 34
32 events after the balance sheet date
on 25 january 2008 the group acquired the entire share capital of post glover lifelink inc details of the transaction are given in 
note 33
on 14 february 2008 the business and certain asset of bacol fine blanking were disposed of for consideration of £05 million
annual report 2007 stock code mrx metalrax group plc annual report 2007 69 metalrax group plc
33 acquistion of subsidiary undertaking
on 25 january 2008 metalrax holdings inc a fully owned subsidiary of the group acquired the entire share capital of post glover
lifelink inc pgl for a cash consideration of £30 million the company is based in erlanger ky usa and is involved in the
manufacture of isolated electrical power systems and electrical raceways for the medical laboratory and educational sectors the
transaction was accounted for by the purchase method of accounting
since the acquisition took place after the end of the year the final assessment of goodwill and other intangible assets has not yet been
completed and so the numbers reported below are provisional for the same reason the group believes it is not appropriate to report
information regarding revenue and profitability the final numbers will be reported in the 2008 annual report
the provisional net assets acquired are
book value fair value
£000 £000
property plant and equipment 597 597
inventories 304 304
trade and other receivables 550 550
cash and cash equivalents 80 80
trade and other payables 522 522
1009 1009
goodwill 2034
total consideration 3043
satisfied by cash 3043
net cash outflow arising on acquisition
cash consideration 3043
cash and cash equivalents acquired 80
2963
34 related party transactions
transaction between the company and its subsidiaries which are related parties have been eliminated on consolidation and so are not
disclosed as part of the consolidated accounts
with regard to the company accounts during the year the company incurred costs on behalf of mrx housewares limited mrx
engineering support services limited and mrx automotive limited all of whom are subsidiaries of metalrax group plc these
amounts were subsequently recharged
2007 2006
amounts amounts
amounts due from amounts due from
recharged related party recharged related party
£000 £000 £000 £000
mrx housewares limited 1072 11713 587 12678
mrx engineering support services limited 1673 17768 665 10798
mrx automotive limited 2005 15955 986 15840
4750 45436 2238 39316
the recharges relate primarily to the reallocation of insurance employee benefits audit and other professional fees and vehicle
leasing charges provided at a group level together with management services provided by the company on behalf of its subsidiaries
in addition the company is party to a crossguarantee arrangement with its subsidiary companies with regard to their bank overdraft
facility as detailed in note 27
remuneration of key management personnel
the remuneration of key management personnel of the group is set out below in aggregate for each of the categories specified in 
ias 24 related party disclosures further information about the remuneration of individual directors is provided in the directors’
remuneration report on pages 30 to 34
2007 2006
£000 £000
shortterm employee benefits 1218 930
postemployment benefits 145 123
1363 1053
directors’ transactions
none of the key management personnel were party to any transactions falling within schedule 6 to the companies act 1985 or 
within ias 24
ˆ 70
shareholder information
analysis of shareholdings
shareholders at 31 december 2007 analysed by number of shares held
number 
range of shares held holdings  of shares 
1–1000 555 1811 279960 023
1001–5000 1233 4023 3556254 297
5001–10000 547 1785 4127026 344
10001–100000 599 1954 16893424 1409
100001 131 427 95040634 7927
total 3065 10000 119897298 10000
shareholders at 31 december 2007 analysed by type of holding
number 
range of shares held holdings  of shares 
individuals 2299 7502 31431457 2622
banks or nominees 687 2241 83824806 6991
investment trust 5 016 18824 002
insurance company 4 013 58500 005
other company 66 215 4277400 356
other corporate body 4 013 286311 024
total 3065 10000 119897298 10000
financial calendar 
23 may 2008 annual general meeting
august 2008 interim results
october 2008 interim dividend
march 2009 annual results 
capital gains tax
the official market value of the company’s ordinary shares at 31 march 1982 was 465 pence each since that date the company
has declared sixteen scrip issues of 10 each which had the cumulative effect by 31 december 2006 of reducing that figure to the
equivalent of 101 pence
annual report 2007 stock code mrx metalrax group plc annual report 2007 71 metalrax group plc
five year record
2007 2006 2005 2004 2003
£000 £000 £000 £000 £000
revenue 118647 120233 104009 95167 104350
operating lossprofit after exceptional items 8836 6599 6022 11172 11850
lossprofit before taxation after exceptional items 9956 6094 6067 11406 12047
lossprofit for the financial year 6986 4597 4414 9190 8135
net assets
noncurrent assets 49346 45512 39555 34829 31227
current assets 41345 48230 43871 48999 25100
total assets 90691 93742 83426 83828 56327
current liabilities 35009 33656 20431 20045 344
noncurrent liabilities 5094 5787 8527 6236 2020
50588 54299 54468 57547 53963
key statistics
lossearnings per share 583p 383p 368p 761p 678p
dividends per share paid 540p 540p 540p 540p 540p
dividend cover times na 07 07 14 13
return on shareholders’ funds 138 85 81 159 152
return on assets† 175 122 111 194 220
share price — high 870p 820p 885p 100p 86p
— low 155p 615p 6825p 74p 58p
 profit for the yeartotal equity
† operating profitnet assets
note 
i 2007–2004 are reported under ifrs 2003 as previously reported under uk gaap  notice is hereby given that the fortyfourth annual general meeting will be held at the burlington hotel 126 new street birmingham 
b2 4dh on friday 23 may 2008 at 1215 pm
the business of the meeting will be to pass
a ordinary resolutions
1 to receive the report of the directors and the audited accounts for the year ended 31 december 2007
2 to confirm the directors’ recommendation that no final dividend be paid
3 to receive the directors’ remuneration report and the report of the auditors thereon
4 to reelect ap pearson as a director
5 to elect aj richardson as a director
6 to elect mj stock as a director
7 to elect ih paling as a director
8 to appoint deloitte  touche llp as auditors and to authorise the directors to determine their remuneration
b ordinary resolutions as special business
9 that
a the amended rules of the metalrax group plc long term incentive plan 2006 a summary of the principal terms of which
is set out in the appendix to the chairman’s letter to shareholders dated 14 april 2008 and the rules of which are
submitted to the meeting and signed by the chairman by way of identification be and is hereby approved and 
b the directors be and they are hereby authorised to do all acts and things which they may consider necessary or expedient
for the purpose of establishing and carrying the said plan into effect
10 that
a the amended rules of the metalrax group plc executive share option plan a summary of the principal terms of which is
set out in the appendix to the chairman’s letter to shareholders dated 14 april 2008 and the rules of which are
submitted to the meeting and signed by the chairman by way of identification be and are hereby approved and 
b the directors be and they are hereby authorised to do all acts and things which they may consider necessary or expedient
for the purpose of carrying the amendments to the said plan into effect including making any further amendments
thereto required to obtain the approval of hm revenue  customs to the amendment to part a under the provisions of
schedule 4 to the income tax earnings and pensions act 2003
c special resolutions
11 that the directors of the company be and are 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 given by ordinary resolution number 7 at
the 2005 agm as if section 891 of the said act did not apply to any such allotment provided that this power shall be limited
a to the allotment of equity securities in connection with a rights issue in favour of or general offer or open offer to ordinary
shareholders where the equity securities respectively attributable to the interest of all ordinary shareholders are proportionate as nearly
as may be to the respective number of ordinary shares held by them but subject to such exclusions or other arrangements as the
directors may deem necessary or expedient to deal with problems under the law of any territory or the requirement of any regulatory
body or any stock exchange in any territory or in connection with fractional entitlements or otherwise and
b to the allotment otherwise than pursuant to subparagraph a above of equity securities up to an aggregate nominal value of
£299000 being 5 of the current issued share capital
and shall expire at the conclusion of the next annual general meeting of the company or fifteen months from the date of the passing
of this resolution whichever shall occur first 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 directors of the company may allot equity securities
in pursuance of such offer or agreement as if the power conferred hereby had not expired
72
notice of meeting
annual report 2007 stock code mrx metalrax group plc annual report 2007 73 metalrax group plc
12 that the company be and is hereby generally and unconditionally authorised to make market purchases within the meaning of
section 1633 of the companies act 1985 of ordinary shares of 5p each in the capital of the company “ordinary shares” 
provided that
a the maximum number of ordinary shares hereby authorised to be purchased is 12000000 which represents approximately 10 of
the current issued share capital of the company
b the minimum price which may be paid for an ordinary share is 5p exclusive of expenses and
c the maximum price at which an ordinary share may be purchased is an amount exclusive of expenses equal to 105 of the
middle market quotations for such shares as derived from the london stock exchange daily official list for each of the five
dealing days immediately preceding the date on which an ordinary share is purchased
and shall unless it is prior to its expiry duly revoked or renewed expire at the conclusion of the next annual general meeting of the
company or 15 months from the date of the passing of this resolution whichever shall occur first save that the company may make
a contract to purchase ordinary shares under this authority before such expiry which will or may be executed wholly or partly after
such expiry and may make a purchase of ordinary shares pursuant to any such contract as if the authority hereby conferred had not
expired
on behalf of the board ardath road
dj farrimond kings norton
birmingham
14 april 2008 b38 9pn
notes
1 copies of this report are sent to all shareholders of the company
2 the company pursuant to regulation 41 of the uncertificated securities regulations 2001 specifies that only those holders of ordinary shares on the register of members
of the company as at 6 pm on 21 may 2008 shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time
changes to entries on the relevant register of securities after 6 pm on 21 may 2008 shall be disregarded in determining the rights of any person to attend or vote at the
meeting
3 members entitled to attend and vote may appoint one or more proxies who need not be members to attend and on a poll vote a form of proxy is enclosed to be
effective a form of proxy must be completed in accordance with the instructions printed on it and must be deposited at the company’s registrars so as to be received not
less than 48 hours before the time fixed for the meeting completion of a form of proxy will not affect the right of a member to attend and vote in person at the meeting
4 copies of all directors’ service contracts and the register of directors’ interests in the company’s shares will be available for inspection at the registered office of the
company during normal business hours on each business day from the date of this notice until the conclusion of the annual general meeting and at the place of the annual
general meeting for at least fifteen minutes prior to and during the annual general meeting
5 copies of the existing articles of association will be available for inspection at the registered office of the company during normal business hours on each business day from
the date of this notice until the conclusion of the annual general meeting and at the place of the annual general meeting for at least fifteen minutes prior to and during
the annual general meeting
6 the purpose of resolution 9 is to amend the rules of the metalrax group plc long term incentive plan 2006 a copy of the rules as proposed to be amended by
resolution 9 and a copy of the current rules will be available for inspection at the registered office of the company and at the offices of mercers limited 
tower place london ec3r 5bu during usual business hours from the date of this notice until the date of the meeting and at the place and on the date of the
meeting from at least 15 minutes before the meeting begins until the conclusion of the meeting 
7 the purpose of resolution 10 is to amend the rules of the metalrax group plc executive share option plan a copy of the rules as proposed to be amended by
resolution 10 and a copy of the current rules will be available for inspection at the registered office of the company and at the offices of mercers limited 
tower place london ec3r 5bu during usual business hours from the date of this notice until the date of the meeting and at the place and on the date of the
meeting from at least 15 minutes before the meeting begins until the conclusion of the meeting 74 annual report 2007 stock code mrx metalrax group plc
shareholder notes annual report 2007 75 metalrax group plc 76 annual report 2007 stock code mrx metalrax group plc
shareholder notes 14636 11042008 proof 10 14636 11042008 proof 10
during 2007 the group operated through three distinct divisions
housewares
engineering support services
automotive
metalrax group plc make and supply specialist
steel products worldwide operating in niche
markets with significant barriers to entry
welcome to metalrax
annual report 2007 stock code mrx metalrax group plc
contents
ii headlines 1 ii group at a glance 2 ii chairman’s statement 4 ii chief executive’s review of strategy 6
ii chief executive’s review of operations 8 ii operating environments risks and uncertainties 15
ii corporate and social responsibility 16 ii financial review 18 ii board of directors 20 ii executive board 21
ii directors and advisers 22 ii report of the directors 24 ii corporate governance 26
ii directors’ remuneration report 30 ii report of the independent auditors 35 ii consolidated income statement 38
ii statement of recognised income and expense 39 ii consolidated balance sheet 40 ii company balance sheet 41
ii cash flow statements 42 ii accounting policies 43 ii notes to the account 49 ii shareholder information 70
ii five year record 71 ii notice of meeting 72 ii group operations 77
metalrax niche
annual report 2007 77 metalrax group plc
group operations
housewares 
gw international
formerly george wilkinson burnley and microwise
cookware
progress works elm street 
burnley lancashire bb10 1pb
tel 01282 415511   fax 01282 433112
‘progress’ consumer bakeware kitchen tools and
gadgets
‘microwise’ microwave cookware
samuel groves
norton street hockley birmingham b18 5rq
tel 0121 554 2001  fax 0121 523 2924
‘mermaid‘ bakeware and cookware
‘longlife‘ catering equipment
rta 
station road great ryburgh 
fakenham norfolk nr21 0dx
tel 01328 829292   fax 01328 829667
wood and metal wine racks
innovative kitchen products
bathroom furniture
mrx china limited
room 1307–8 dominion centre
43–59 queens road east wanchai hong kong
enquiries to gw international
engineering support 
services  
advanced handling
northfields industrial estate
market deeping peterborough pe6 8ld
tel 01778 345365   fax 01778 341654
providing integrated handling solutions
commercial bearings
bordesley green road birmingham b9 4tp
tel 0121 766 1370   fax 0121 773 8238
industrial bearings
cooper coated coil
great bridge street west bromwich
west midlands b70 0dj
tel 0121 521 1500   fax 0121 521 1526
surface coated metals
down and francis
ardath road kings norton birmingham b38 9pn
tel 0121 433 3300   fax 0121 459 9222
structural engineering and steel fabrications
fabricote
unit 38 planetary industrial estate
planetary road wednesfield 
wolverhampton wv13 3xb
tel 01902 864422   fax 01902 305442
surface coated metals
makespace mezzanine floors
unit 1 millfield road industrial estate
donington spalding lincolnshire pe11 4ur
tel 01775 822060   fax 01775 822061
lightweight mezzanine floors 
metalrax
bordesley green road birmingham b9 4tp
tel 0121 772 8151   fax 0121 772 6135
storage systems shelving 
and roller conveyor systems
premier architectural metalwork
unit 300 catesby park eckersall road 
kings norton birmingham b38 8se
tel 0121 451 1212   fax 0121 451 1220
architectural metalwork
sections and tubes
hall street west bromwich 
west midlands b70 7dw
tel 0121 553 2721   fax 0121 500 5002
cold rolled metal sections
stackright building systems
charleywood road knowsley industrial park north
kirkby merseyside l33 7sg
tel 0151 548 3666   fax 0151 548 3777
and units 1 and 2 bloxwich road 
walsall ws2 7bd
tel 01922 474455 fax 01922 474477
building systems
welland engineering supplies
northfields industrial estate
market deeping peterborough pe6 8ld
tel 01778 380371   fax 01778 346916
distributor of fasteners hand tools 
and maintenance products 
automotive 
bacol fine blanking
business sold 14 february 2008
sherwood road aston fields industrial estate
bromsgrove worcestershire b60 3dr
tel 01527 874205   fax 01527 833761
fine blanking to 630 tonnes capacity
mrx automotive
formerly bacol industries 
kenham tools and pressings and prescott powell
middlemore industrial estate middlemore road
smethwick west midlands b66 2eq
tel 0121 558 3911   fax 0121 558 8798
presswork to 700 tonnes capacity
deep drawing and ironing
tube manipulation and assemblies
bsc diecasting
fryers close bloxwich walsall 
west midlands ws3 2xq
tel 01922 710070   fax 01922 408008
zinc and aluminium pressure diecasting
toolspec
sedgwick road luton bedfordshire lu4 9dt
tel 01582 572626   fax 01582 596891
tube manipulation and assemblies
weston body hardware
crossgate road park farm industrial estate
redditch worcestershire b98 7sn
tel 01527 516060   fax 01527 526060
locks handles latches and ancillary products
mrx romania
hidrosib sa
sibiu romania
enquiries to mrx automotive 
engineering and manufacturing facilties 
this document is printed on take 2 offset
made from 100 recycled fibres sourced
from post consumer waste only
14636metalraxcov spinelayout 1  12408  1002  page 2 14636 11042008 proof 10 14636 11042008 proof 10
registered office
ardath road kings norton
birmingham b38 9pn
tel 0121 433 3444
fax 0121 433 3325
website wwwmetalraxgroupcouk
email infometalraxgroupcouk
registered in england 793639
metalrax group plc
annual report 2007
metalrax group plc          annual report 2007
14636metalraxcov spinelayout 1  12408  1003  page 4


Summary:
 04
chairman’s statement
annual report 2007 stock code mrx metalrax group plc
introduction
it has been a year of considerable change culminating in the
appointment of our new chief executive andrew richardson
in october the board has empowered andrew who has
successfully managed turnarounds and growth during his 20
years in manufacturing industry to lead metalrax through a
time of necessary strategic and structural change 
following the year end the conclusions of his initial strategic
review were announced and we have started to implement the
resultant actions further details are set out in his review of
strategy which follows this statement
results
for the year ended 31 december 2007 metalrax group plc
achieved revenue of £1186 million 2006 £1202 million
adjusted profit before exceptional items and tax was 
£23 million 2006 £65 million after exceptional items the
group incurred a loss before tax of £99 million adjusted
earnings per share before exceptional items were 126p 
2006 372p and basic lossearnings per share were 583p
2006 383p note 7
net debt at 31 december 2007 stood at £ 125 million 
31 december 2006 £107 million representing gearing 
of 248 2006 197
dividend
as indicated in our trading update of 16 january 2008 the
board has resolved to implement a new progressive and
sustainable policy whereby dividends payable by the 
company will be covered between 20 and 25 times by its
earnings accordingly following the interim dividend of 165
pence per share which was paid in october 2007 there will be
no final dividend payable in respect of the year ended 
31 december 2007
acquisitions and disposals
following the year end we acquired post glover lifelink inc
pgl from halma plc for a cash consideration of £30
million pgl which is based in erlanger kentucky usa is a
world leading manufacturer of isolated electrical power
systems and electrical raceways for the medical laboratory and
educational sectors the acquisition is in line with metalrax’s
new stated strategy to supplement organic growth through
selective acquisitions of complementary technologies and
companies it is immediately earnings enhancing and has been
funded from metalrax’s existing cash and debt facilities
in addition we subsequently disposed of the net assets of the
fine blanking business excluding its property debtors and
creditors for a cash consideration of approximately £05
million to rical limited this sale represented an important
step in the reorganisation of our existing operations and the
elimination of loss makers
we expect to make further acquisitions and disposals in the
future in terms of the latter we are reviewing our remaining
high volume low margin automotive businesses and our 
lossmaking romanian business 
alternative investment market aim
in light of our plans to make acquisitions and disposals and of
the company’s market capitalisation the board is proposing to
move the company’s shares from the main market to aim
the background to this proposal is set out in my letter
accompanying this annual report
the board and management
we have made further changes to the board structure during
2007 consistent with our board succession planning referred
to at the time of the interim results 
richard arbuthnot resigned as group chief executive on 
12 october 2007 having announced his retirement plans in
may 2007 he was succeeded by andrew richardson 
“it has been a year of considerable change
culminating in the appointment of our new 
chief executive andrew richardson in october”
john crabtree annual report 2007 05 metalrax group plc
following the year end william kelly resigned as group
finance director and company secretary by mutual consent
the board implemented robust interim arrangements to
manage the company’s financial reporting and controls 
while seeking a replacement and are pleased that with effect
from 2 april 2008 michael stock joins as the new group
finance director 
reg fort a nonexecutive director retired after the 2007
annual general meeting in may the board is delighted that ian
paling joins as a new nonexecutive director from 4 april 2008 
in addition to these changes since the appointment of
andrew richardson as chief executive fourteen senior
managers have left and nine new senior managers have been
appointed to the group
people
2007 has seen continued significant change throughout the
group and this has been well supported by our people on
behalf of the board i would like to express our gratitude for
their continued endeavours
executive benefits
the board believes that it is appropriate to bring the various
executive incentive plans up to date and in line with current
best practice mercer limited was appointed during 2007 to
review the exisiting provisions and changes arising from that
review are explained in the accompanying letter
pensions
the deficit in the metalrax defined benefit pension scheme has
increased from £32 million last year to £34 million this
scheme has been closed to new members since 1999 the
board remains comfortable with the current funding
arrangements for the scheme
advisers
following the year end we appointed arden partners plc as the
company’s stockbroker and in conjunction with nm
rothschild and sons limited who were appointed in 2007
financial adviser a fresh team brings new energy and expertise
that is enormously helpful in a turnaround situation and both
firms are specialists in advising companies of metalrax’s size
and nature 
outlook
the board believes that the group is in a very sound financial
position and has significant scope for improving its financial
performance the group’s balance sheet remains strong with
significant property assets and headroom within its current
banking facilities to underpin recovery and growth cash being
generated from operations will support the financial position
allowing appropriate investments in organic and where
appropriate acquisitive growth
within the group’s existing varied portfolio there are a number
of good quality businesses from which to build management
changes together with a strategy focused on products that
can offer improved returns and profitable growth will allow
metalrax to take advantage of the potential that exists within
the group
i am pleased to report that we have had a satisfactory start to
the current financial year and view our prospects in 2008 with
confidence a further update on current trading will be
provided at the time of the company’s agm in may 
jra crabtree
chairman
14 april 2008