ANNUAL REPORT

Foreword
Dear Shareholders,
Ladies and Gentlemen,
The world of commodities and precious
metals continued in a very
positive direction during 2006 for all
participants in the value chains.
Miners, refiners, fabricators and investors
all had positive, and some
record results for the year. Supply
constraints, strong fundamental demand
driven by Asia, and positive
investor sentiment contributed the
most to the buoyant markets. The
volatility of metal prices were a significant
challenge to both the treasury
and operating divisions of Metalor.
We are happy to report that our business
models were flexible enough to
cope with the fluctuations. The higher
prices even contributed to increases
in margins. We are also pleased with
the response of our banking partners
in providing enhanced lines of credit
during the year allowing us to sus-
tain the organic growth in net sales
over 2005. All four business units
exceeded the previous years results.
This result came from the metal
prices, gross margin improvement
due to more efficient manufacturing,
and control of operating costs. In the
Technology Products unit significant
shifts in the market place for platinum
based pharmaceuticals have occurred
and we are considering a change in
strategy.
The shareholding of the company
did not change significantly during
the year. An employee shareholding
plan was instituted and 3.5% of the
company shares were bought from
the treasury shares available. It is foreseen
that this program will continue
in 2007.
The events and situations described
above resulted in a consolidated operating
margin of 14% as compared to
9% in 2005. The sale of metals held
in own stocks during the period contributed
CHF 7 million compared to
the 2005 sale of financial investments
which generated CHF 27 million. Net
profit for 2006 is CHF 36 million as
compared to CHF 41 million in 2005.
The company has achieved a significant
step in performance as compared
to previous years as now the bulk of
net profit is generated by operating
activities.
3