Financial overview

in million Canadian dollars (CAD)	FY2007	FY2006	Rate of change (%)	Business Activities
Sales	2,313.6	2,262.1	2.3	-
Powertrain/Driveline Industrial	1,795.9	1,850.3	(2.9)	See below 1)

1) Sales for Powertrain/Driveline declined by $54.4 million, or 2.9%. Adjusting for the effect of the stronger Canadian dollar compared with the U.S. dollar and other currencies in 2007, sales would otherwise have decreased by $19.4 million, or 1.0%. The sales decline was expected and largely due to the substantial pre-buy activity in 2006 in the medium/heavy duty truck market related to an emissions regulation change that took effect January 1, 2007 significantly affecting the year over year comparison. The segment’s results were also affected by plant shutdowns and production reductions by North American OEMs, increased pricing pressure from these same customers, the maturation or re-sourcing of some contracts, partially offset by the ramp up of new programs, strong growth in Europe and continuing ramp up of its Asian operations.


Contracts
-Linamar Hungary has also secured new contracts for both automotive and non-automotive components and products. In addition, new work for customers such as Siemens has been won. Growth has also occurred with existing customers, such as Denso.
A substantial head and block program was launched in 2007 in the Company's German subsidiary as well as the winning of follow on business for its hydroformed camshafts.
Strong new and growing programs continue to improve sales results in Mexico. The programs are diverse and include 4-speed transmissions for light vehicles, liners for medium and heavy duty trucks and a high feature camshaft supporting a variety of platforms.

-In October 2007, the Company has won orders for two major parts of drive motors for hybrid vehicles from a Japanese supplier. Linamar's motor unit housing and mounter supporting the roter are expected to be used for hybrid vehicles on the market as early as 2009. The company has succeeded in monoblock forging, which was a difficult method in producing these parts, and therefore achieved necessary strength for the motor's high revolution. It aims to further increase business in the next-generation unit parts with its high technological capabilities as this case. In the beginning 10,000 sets of these two items will be annually produced at its flagship plant in Ontario to export to Japan. The hybrid system using these parts are expected to be mounted on vehicles of U.S. and Japanese automakers. (From an article in the Nikkan Jidosha Shimbun on Oct. 11, 2007)


Acquisitions
-In February 2007, the Company announced that it is making an offer to purchase all of the outstanding ordinary shares of Linamar Hungary NYRT ("Linamar Hungary"). Linamar currently holds 5,030,800 Linamar Hungary shares, representing approximately 58.6% of the outstanding Linamar Hungary shares. The aggregate consideration payable under the offer for the approximately 41.4% of the Linamar Hungary shares that are not held by Linemar would be approximately HUF 10,658,247 (approximately Cdn.$63,885,600). (From a press release on Feb. 26, 2007)

-The Company Corporation and Ford Motor Company signed on August 15, 2007 a Definitive Agreement for the Company's purchase of Automotive Components Holdings' (ACH) Power Transfer Unit (PTU) business and Converca I Plant in Nuevo Laredo, Mexico. ACH was a subsidiary affiliated business of Ford.
-In August 2007, the Company confirms the completion of the acquisition for Automotive Components Holdings.'' The purchase includes the 304,000 square-foot plant, 25 acres of land, as well as a skilled team of engineers. The PTU business currently operates with approximately 500 staff in addition to 20 engineers. Linamar announced a purchase proposal for the Converca I Plant in April 30, and later announced the agreement had been finalized on August 15. Linamar takes over ownership of the facility and management responsibility of the staff on September 1, 2007. Linamar will then re-name the Converca I Plant: ''Linamar Driveline Systems Mexico S de R.L. de C.V.'' (LDL). (From a press release on August 31, 2007)

-On October 18, 2007, the Company announced that it had signed a Memorandum of Understanding setting forth a preliminary understanding regarding the purchase by Linamar of Visteon Corporation's Swansea plant located in Wales, United Kingdom. Visteon's Swansea Plant currently produces power transfer units, transfer cases and axles, which would extend the Company's presence in the driveline business and complement the Company's recent acquisition of Ford's PTU business in Nuevo Laredo, Mexico, finalized in August. Ford is the key customer of the Swansea operations.

R&D Structure
-Linamar acquired McLaren Performance Technologies in 2003 to integrate the team with Linamar's Operating Group as an internal advanced product and process development resource. In 2005, McLaren Performance Technologies Division developed a new mission statement and organizational structure to focus on delivering innovative cost-effective products in support of the Linamar Group strategies and goals. In early January 2006, Linamar announced the establishment of the Linamar Automotive Customer Center that combined the Detroit-based sales team with McLaren Performance Technologies to support the Group. Throughout 2006, McLaren Performance Technologies Division will focus on delivering their mandate, which is to offer support in the design, testing and analysis of engine transmission and chassis systems.

Domestic investment
-In June 2007, the Company announced it has secured a site for its new technology and training centre in Guelph, Ontario. The centre will concentrate on process and product innovation as well as people development. The Company purchased the 10 acre site and existing 30,000+ square foot building for its new technology and training centre. The company plans to re-configure the interior and build an addition onto the facility over the next 12 months. It partnered with the Ontario government on a five-year research and development strategy announced May 2006. The technology and training centre is one of a variety of training and R&D focused investments resulting from Linamar's $1.1 billion commitment to invest in people development and innovation. Provincial support of $44.5 million was provided through the Ontario Automotive Investment Strategy. (From a press release on June 5, 2007)

-In March 2007, the Company is adding 100,000 square feet of manufacturing space to its existing Linamar Gear facility to accommodate new and future gear manufacturing programs resulting from the company's investment in gear product and process innovations. Linamar will perform advanced gear processing development work in the expanded space in conjunction with its new research and development and training centre, to be announced later 2007, and comes on the heels of the Federal Government's announcement of a repayable loan specifically for gear technology. (From a press release on Mar 5, 2007)


Overseas investment
-The permanent facility in Wuxi, China was occupied and celebrated its official opening in 2007.