Wagon plc 
Annual Report & 
Accounts 2005 OUR PRIORITIES I N 2004/05
Contents
01 Highlights
02 Chairman’s Statement
04 Chief Executive’s Review
08 Safety First
10 Wagon Excellence System
12 Engineered Structures
14 Metal Components
16 Innovative Solutions
18 Financial Review
24 Board of Directors
26 Directors’ Report
30 Remuneration Report
38 Corporate Governance
42 Statement of Directors’
Responsibilities
43 Report of the Auditors
44 Group Profit and Loss
45 Balance Sheets
46 Group Cash Flow Statement
47 Supplementary Statements
48 Notes to the financial statements
70 Financial Summary in Euro
71 Five Y ear Summary
72 Notice of Annual General Meeting
74 Letter to Preference Shareholders
75 Notice of Extraordinary
General Meeting
76 Shareholder Information
77 Operating Locations
—BU I LD ON TH E OR GAN ISA TIONAL CHANGES
I NTR ODU CED I N THE PREVIOUS YEAR
—FOCUS ON OPERA TIONAL PERFORMAN CE
AN D IMPROVED SERVICE AN D QU ALITY 
TO CUSTOMERS
—SIM PLIFY OU R OPERA TI N G MODEL
—BUILD A STR O N G I NTERNA TIONAL TEAM
—EST AB LISH A STRA TEGY INCREASIN G L Y
BASED ON TECH NOLOGY AN D 
I N NOV A TION TO OFFER MORE V ALUE 
ADDED PRODUCTS AN D ASSE M B LI ES W AGON SALES 
OTHER
UN ITE D 
KI N G DOM
MAINLAND 
EUR O PE
WA G O N
SALES
£360.4m
£450 .6m
£80.5m
£9. 7 m
OUR CUSTOMERS AN INTERNA TIONAL BUSINESS
18 Manufacturing
Locations
— Belgium
— Czech Republic
— France
— Germany
— Italy
— Spain
—UK
— USA
2004 2005
May
Appointment 
of new CEO, 
Pierre Vareille.
September/October
Results to 
30 September 
2004 show strong
financial operational
performance. Key
initiatives launched.
November/
December
Internal
restructuring
group’s business 
on product lines,
not nationalities.
February
New Executive
Committee trained
on fundamentals of
Safety First.
March
Steel price
negotiations
completed to
minimise impact 
of rising costs.
April
Richard Cotton
appointed as Group
Finance Director. HIGH LIGHTS
—UNDERL YING OPERATING MARGIN IMPROVEMENT 4. 1 % TO 5. 1 %
—GOOD CASH GENERATION – NET DEBT REDUCTION OF 39%
—RETURN ON INVESTED CAPITAL FROM 1 1 % TO 13%
—UNDERL YING EARNINGS PER SHARE
*
UP 1 7.9% AT 23.7 PENCE
—RECORD ORDER INTAKE £83 MILLION. EQUIVALENT TO 
1.2 TIMES CURRENT ANNUAL TURNOVER
2005 2004
£m £m
Sales 450.6 486.9
Operating profit
*
22.8 20.1
Operating profit less interest
*
19.4 16.5
Net debt (29.3) (48.2)
EPS (underlying) 23.7p 20.1p
Wagon plc 
Annual Report &
Accounts 2005
01
*before goodwill amortisation, impairment and exceptional items CHAIRMAN’S ST A TEMENT
The year ended 31 March 2005 has seen
an encouraging improvement in financial
performance, with a further improvement
in underlying operating profit in spite of
slightly declining product sales, a
continued strong operating cash flow,
and a significant reduction in net debt.
This year has seen the transformation of
the Group’s organisation and operating
focus under the leadership of Pierre
Vareille, who has just completed his 
first year as the Group’s CEO. Our order
intake is the largest ever, and positions
Wagon well for the coming years. The
first results of the Group’s renewed
emphasis on operational performance
are evident: our safety, quality and
productivity indicators are moving
markedly in the right direction. The
Group has also successfully managed
the margin challenges presented by 
the steel price rises, whilst delivering
improved profitability.
The recent demise of MG Rover
provides some short term challenge 
as previously communicated, though
progress with other OEM’s in recent
months has presented new opportunities
for Wagon to sell its expertise to our
strategic customers. The Group has also
achieved an excellent performance in
the management of its cash, and its
debt profile is the strongest for several
years, enabling us confidently to finance
the introduction of the new programmes
we have secured. 
Results and dividends
Sales from continuing operations were
down by 7.5% to £450.6 million (2004:
£486.9 million), reflecting lower revenue
from tooling and prototypes following
the lower level of programme start ups
two years ago. Underlying operating
profit from continuing operations
increased by 13.4% to £22.8 million
(2004: £20. 1 million), with profitability
increasing from 4. 1% to 5. 1%.
Group profit before taxation, exceptional
items and goodwill amortisation and
impairment was £19.4 million (2004:
£16.5 million), a 17.6% increase,
underlining the strengthening of the
Group’s operational focus. 
Exceptional items totalling £13.8 million
comprise £11.0 million in respect of the
restructuring programme announced in
September 2004 together with the
previously reported loss on disposal 
of £0.8 million relating to the sale of 
the Redditch operations. Following 
the demise of MG Rover, exceptional
costs of £2.0 million have been incurred 
out of the £2.4 million anticipated and
previously communicated. 
Goodwill amortisation was £2.4 million
(2004: £2.4 million), plus the write 
off of an additional £2.1 million 
relating to the planned disposal of the
Engineering Consultancy business in
the US. An impairment review of the
Accra Teknik investment results in a
£2.6 million charge.
Group loss after taxation was 
£6.5 million (2004 profit: £1.8 million)
and loss per share was 15.5 pence
(2004: earnings per share 0.5 pence).
Underlying earnings per share, which
exclude all exceptional items, goodwill
amortisation and impairment, were 
23.7 pence (2004: 20.1 pence), a 
17.9% increase. 
Net interest charges were £3.4 million
(2004: £3.6 million), covered 6.7 times
by underlying operating profits (2004:
5.6 times), and reflect lower levels of
average net debt. With positive
operating cash flow of £52.5 million
(2004: £45.0 million), including the
effect of lower capital expenditure, 
net debt stood at £29.3 million at the
year end (2004: £48.2 million). 
“THIS YEAR 
HAS SEEN AN 
ENCOURAGING
IMPROVE MENT 
IN FINANCIAL
PERFORMANCE”
David Kendall, Chairman Finally, I should like to thank all of our
employees in the eight countries in
which we operate for their hard work
and support. I am sure the years ahead
will provide exciting opportunities for 
all our people. The Board is grateful 
to our employees for their dedication
and professionalism.
Current trading and outlook
Our expectation for the current year is
for flat automotive volumes in Europe.
Our sales will be lower, on account of
MG Rover and the loss of the Renault
Espace seat rail programme later 
this year as a result of a customer
reconfiguration of the vehicle.
However we have been able to mitigate
some of the impact of MG Rover’s
demise, through operational
improvements already realised and the
acceleration of the closure of our Oxford
plant. During the year, we will see the
benefits of our restructuring programme,
as well as margin benefits from our key
initiatives of the Wagon Excellence
System, and the Supplier Development
procurement programme. 
After a quieter year in programme
introductions, the tooling and capital
expenditure to support the £83 million 
of new business won will increase from
the low levels last year, to deliver
revenue growth and margin expansion
in the year to March 2007 and thereafter. 
The Board is recommending an
unchanged final dividend of 5.0 pence
per share, making the total dividend for
the year 9.0 pence (2004: 9.0 pence).
The dividend is covered 2.7 times by
underlying earnings per share. The final
dividend will be declared payable on 
6 September 2005 to members on 
the register at close of business on 
5 August 2005.
A description of the main factors behind
the financial results is contained within
the Chief Executive’s, Business 
Group, and Financial Reviews on the
following pages.
People
I am pleased to welcome Richard Cotton
to the Group, who joined as Finance
Director on 18 April 2005. Richard 
brings to Wagon over twenty years’
experience in finance and operations 
in manufacturing, including senior roles
in international companies. Richard’s
experience and skills will provide strong
financial leadership as he works with
Pierre Vareille to develop and improve
the performance of the business. 
I would also like to thank David Sleath
who has stepped down as Finance
Director in March after more than five
years of significant contribution to the
Group. We wish him well as he moves
on to the next chapter of his career. 
Overall, we believe that our strategic
initiatives can maintain the current
momentum on order intake while
delivering further operational
improvements in the future.
My term of office comes to an end 
at this year’s Annual General Meeting
and having reached the age of 70, I shall
not be seeking re-election. The Board
expects to announce the name of my
successor before that meeting and I
wish him every success in the next
phase of Wagon’s development.
It remains for me to thank the
shareholders, my Board colleagues 
and the staff for their support during 
my years as Chairman. Wagon has 
gone through enormous progressive
change during that period and is now, 
I believe, in a position to reap the reward
that everyone deserves. I leave with a
feeling of great confidence. 
David Kendall
Chairman
7 June 2005
Wagon plc 
Annual Report &
Accounts 2005
02/03 CHIEF EXECUTIVE’S REVIEW
I am writing this review at the beginning
of my second year as Chief Executive of
Wagon plc, having started on 1 May
2004. It has been a year of internal
change, both in terms of the business
structure, and the people leading the
change process. It has also been an
excellent year commercially with a
marked improvement of our relationship
with our customers.
Soon after my arrival, five key priorities 
were identified, being:
1 Build on the organisational changes
introduced prior to my arrival.
2 Focus on operational performance 
and improved service and quality 
to customers.
3 Simplify our operating model 
to streamline our processes, 
decrease our costs and accelerate
decision-making.
4 Build a strong international team 
to accelerate cross-fertilisation and
leverage our presence in the main
European countries.
5 Establish a strategy increasingly 
based on technology and innovation 
to offer more value added products
and assemblies.
1 Build on Organisational Change
Last year we announced that we had
restructured our German operations,
closed the UK consultancy services
business, and closed or sold three UK
manufacturing operations in Smethwick
and Redditch.
In the current year, we have again
focused on streamlining our
manufacturing footprint, with a 
further plant closure in the UK (Oxford).
We have also taken the decision to
divest the US engineering and design
consulting business, which concludes
the exit from the former Hawtal Whiting
business (closed in the UK in the
previous year). We expect that the
divestment will close shortly.
We have implemented the reorganisation
and restructuring programme on
schedule and cost. In addition to the 
cost savings that the new organisation
model has brought through alignment
and de-layering of the management of
the business, we have made further
changes to reduce excess capacity
and realise additional efficiencies in 
our operations and support services. 
This restructuring programme will deliver
the anticipated benefits of c. £6 million
per annum, of which c. £4 million per
annum will flow through in the 2005/06
financial year.
2 Operational Performance 
and Customer Focus
As the year progressed, it became 
clear to us that there were two pressing
priorities which needed to become the
centre of attention: our safety systems 
in the workplace, and to enhance our
manufacturing efficiencies. 
We conducted a comprehensive audit 
of the safety performance across all of
our plants, which led to the launch in
October of our first Wagon initiative,
‘Safety First’. We believe that, as a
fundamental tenet for a successful
Group, we must have the safety of all 
of our employees and site visitors at 
the top of our agenda. Our target is to
achieve zero tolerance of accidents,
through the implementation of a
continuous risk management cycle
involving the regular reporting of 
accidents, immediate follow-up and
training, and the sharing of best practice
and learning experiences across 
the Group.
The whole Group is aware of the
importance of safety, and it is now 
the first subject considered at every
Board and Executive Committee and
management meeting. I am pleased 
to say that the results of the Safety First
initiative have been encouraging, with
the number of accidents having fallen by
50% in only a short period of time, albeit
from a higher base than we would have
wished. We still have much to do to
achieve our targeted benchmarks, 
and the initiative will continue to be 
the centre of attention for everyone
during 2005/06.
The second initiative is the ‘Wagon
Excellence System’ (WES). This lean
manufacturing and engineering system
was created to ensure that all of our
plants run as efficiently as possible, 
and it is a fundamental requirement 
of running a plant within Wagon that 
the WES principles are fully embraced.
However the concept is more than
simply monitoring and measuring plant
activity; it is a “management culture”
that must prevail throughout the plant,
and again it features high on the Board
and management agenda.
The review began with an initial audit of
performance and benchmarking these
results against key indicators, followed
by the setting of targets at each plant.
Although this initiative began a few
months ago, we can already see
significant results in quality, productivity
and inventory. We expect this initiative
will improve our product profability in 
the future.
Pierre Vareille, 
Chief Executive Officer
“IT HAS BEEN A YEAR 
OF SIGNIFICANT 
INTERNAL CHAN GE,
BOTH IN TERMS OF 
BUSINESS STRUCTURE
AND THE PEOPLE 
LEADING THE CHANGE” Innovative Solutions. This is strongly
contributing to the focus on accountable
operating performance, and has created
a more responsive, decisive and dynamic
business. It has also helped us to clarify
our commercial strategy in order to
become more aggressive on the market.
In addition to this we have aligned the
shared service functions into four
efficient and lean centrally managed
teams, in Industrial Development,
Purchasing, Human Resources and
Finance / Legal / IT . The resultant
Executive Committee provides a tightly
focused management team to deliver
increasing value to Wagon shareholders.
4 International team
Each Business Group and shared service
function has a new leader, compared
with 12 months ago. The recruitment
criteria for new executive management
included three key elements: they had 
to have experience of large international
organisations, including automotive
experience, and speak at least two
languages. The team consists of five
Frenchmen (including myself), a Belgian,
and two British. 
5 T echnology and Innovation 
based Strategy
In January 2005, the Executive
Committee presented to the Board its
medium and long term strategy, with 
a view to achieving my stated aim of
positioning Wagon as a leading European
automotive manufacturing company, 
and partner of choice for structural
assemblies in niche and high-end
vehicles, and “comfort systems” 
for the whole automotive industry.
Consequently, our focus remains 
on achieving growth by running only
efficient plants, by managing and
reducing operating costs and overheads,
and by making the customer the centre
of attention to drive top-line growth.
By reorganising the business into
product and technology focused
business groups, we have focused 
the capabilities of each group more in
line with customer requirements. Each
business group’s engineering teams are
now better able to respond to customer
requests and promote their innovations.
We are developing advanced engineering
teams to take this service right inside 
our main customers to directly service
their requirements.
Having defined our business groups’
technology and products we have
developed a manufacturing footprint
strategy consistent with this, and
independent of nationality. This
recognises the external strategic
developments in the market such 
as localisation in low cost countries.
In parallel, we will look for complementary
acquisitions, building on the expertise
that we have across the Group, and
ensure that we have the right capital
equipment to enable us to be providing
the support that our customers are
increasingly seeking.
It would seem inevitable that companies
in the automotive sector will need to
consolidate to ensure that they have the
economies of scale that will allow them
to survive. It is our intention that Wagon
will be among the thriving companies of
the future.
More recently, we have launched two
new initiatives; the ‘Wagon Supplier
Development’ (WSD) programme, and
the ‘Wagon Customer Focus’ (WCF)
initiative. The WSD programme seeks 
to ensure that all of our purchasing
initiatives across the Group are co-
ordinated and focused on maximising
efficiencies. We are in the process of
introducing relevant purchasing indices,
consolidating our supplier base, and
improving the monitoring of quality
issues in product received from
suppliers. Later this year, we will be
introducing cost saving programmes,
such as internet auctions for certain out-
sourced items. We have also organised
ourselves to be able to profit from
purchasing from suppliers located in 
low cost countries.
The WCF initiative was borne of 
the recognition that in order to grow
organically we must have strong
commercial relations with our customers.
Most importantly, we must be close 
to our customers. After safety, our
customers must be the number one
priority for us all. That is why this initiative
aims at creating a unique system of key
account management which will help us
to get closer to our customers and to
establish our commercial strategy jointly
with them.
3 Streamlining the process
A major aspect of this was the
reorganisation of the business structure.
During the year we have refocused the
operations of the Group into three main
business groups relating to their product,
technologies and expertise: Engineered
Structures, Metal Components and 
—Safety First: to target best 
in class in safety performance.
—Wagon Excellence System: to
streamline our processes, and
improve on efficiency.
04/05 Wagon plc 
Annual Report &
Accounts 2005
SAFETY
FIRST
WAGON 
EXCELLENCE
SYSTEM EXECUTIVE
TEAM REVIEW
OF SAFETY
PROCEDURES
CHIEF EXECUTIVE’S REVIEW CONTIN UED
Results for the year
This subject is covered in much greater
detail in the Financial Review. However, 
I am pleased to be able to report that:
— Sales from manufacturing were
slightly lower at £405.1 million (2004:
£408.3 million); Engineering Services
were £7.6 million lower (51%),
following reorganisation of the UK
business, and T ooling revenues were
£25.5 million lower (40%), following
the tail-off from the high level of
production introductions in 2004. 
—Underlying operating profits from
continuing operations increased 
by 13.4% to £22.8 million (2004: 
£20.1 million), reflecting the
improvements in manufacturing
efficiency.
—Our cash collection received
significant focus, and our year-end
debt levels were reduced from last
year’s £48.2 million, to £29.3 million.
—Our order-intake, the barometer for
future sales, enjoyed a record year.
New orders in the year were 
£83 million, and represents order
intake to sales ratio of more than 1 .2: 1 .
Operational Review
Although the European automotive
market has been difficult, the Group has
been able to mitigate these unfavourable
conditions by a stronger operational
focus and to improve the operating
margin strongly in spite of slightly lower
sales from manufacturing. Moreover, 
our team has reached successful
conclusions to negotiations with our
customers regarding the impact of
increased steel price.
As an automotive manufacturing
company, our plants are the key to
success, hence the focus around those
operations. We have been able to
produce some excellent results in most
of the plants, but we also have a number
of plants where there is still a lot of room
for improvement .
In particular, we are pleased to report
that all serious operational issues 
have been resolved during the year. 
At Fontaine, we have seen further
improvements in the plant’s efficiency
and increased sales levels following the
ramp up of production have contributed
to improved margin. At Fleurus, all
quality and customer issues have been
resolved and profitability has benefited
strongly from this turnaround. Following
significant restructuring and cost
reduction, our Waldaschaff plant 
has improved margins dramatically.
However, year on year operating profit
was impacted by lower volumes in
Bessines and Bressuire. All other 
plants delivered positive year on year
improvements in operating profit.
A special mention goes to our facility 
in the Czech Republic, which has
continued to show signs of it being 
a significant launchpad into low cost
countries, following the lead set by the
customers. It has won a considerable
amount of business in the year, and has
improved its operating margin. We have
demonstrated that we can run this
facility efficiently and profitably, and 
win new business thanks to the lower
cost structure of this plant. Lastly, we
eliminated the prior losses in our
engineering consulting activities, 
based in North America.
The demise of MG Rover was anticipated
for some time, and we have acted swiftly
since in adjusting our business. We have
accelerated the closure of the Oxford
site, and made headcount reductions
across all the UK plants affected. We
have been able to mitigate some of the
impact of the lost contribution and short
term disruption to the 2005/06 year
through other business improvements
already realised. Of the £2.0 million 
of one-time exceptional costs incurred 
to date, the majority of this relates to
provisions for debts and stock, as 
well as the impairment of relevant 
assets and tooling. Redundancy 
costs of £0.4 million will flow into 
the current year.
We are in the process of building new
facilities on the back of business won
from some of our key customers. Our
Orense, Spain plant will become a part 
of the Innovative Solutions Business
Group, and will make sunblinds and
sunroofs for the new Citroën Picasso,
due for launch in early 2006. This is
particularly significant, as it is the first
Wagon plant to be opened in Spain, a
location that is becoming increasingly
important as a centre for car assembly.
At Pescara, Italy, we will manufacture 
for the joint venture between Fiat and
Peugeot in making assemblies for the
“Ducato” light commercial vehicle.  Commercial Review
As a result of our business process
simplification our commercial teams 
are now operating with clearer lines 
of communication, and with greater
focus on operational strategy. We have
appointed a Key Account Co-Ordinator
(KAC) for each of our major customers.
The KAC’s responsibility is to be the 
focal point of all activity, ensuring that 
our customers receive premium support
from the whole of Wagon through one
point of contact.
1
This has delivered
handsomely with record order intake 
of £83 million, equivalent to 1 .2 years 
of turnover against the normal vehicle
programme cycle. It equates to 
£486 million of sales over the
programmes’ lives. This positions Wagon
extremely well on a two to three year
time frame – the industry cycle for
conversion of orders into revenue – and
for the duration of these programmes
thereafter.
An important development this year 
has been Wagon’s success in winning
commercial vehicle orders with longer
programme lives than passenger cars,
such as the Ducato project for the
Pescara plant. This type of contract
enables Wagon to build a significant
presence in this niche market in the
years to come. It also illustrates 
Wagon’s competence in the innovative
roll forming technology.
Amongst the more significant other
contracts secured in the year were 
the following:
—Significant volumes of stampings 
for the future Peugeot 207 coupé
cabriolet, to be assembled in Spain.
(1) Further details of the progress and results from our
Business Groups can be found on pages 12 to 17.
—Significant volumes of outsourced
assemblies for successful models
such as the Peugeot 407 for 
French plants.
—A new complete ‘front end’ for 
Nissan in the UK.
—Front and rear bumpers for the Land
Rover and door frames for Honda, 
also in the UK.
—A return to success in Germany with
door frames for Daimler Chrysler.
The increase in order intake reverses 
the declining trend of recent years in
securing new business. In addition, 
our customer quality has improved
dramatically, and with it customer
satisfaction with Wagon as a key partner.
Our commercial teams are now
operating on clearer lines of
communication, and with greater 
focus on operational strategy. 
Oleo
The Oleo business continues to remain 
a key contributor to the Wagon group. 
It is a global leader in the design and
manufacture of gas and hydraulic
cylinders for energy absorption in safety
critical applications in rail, elevator and
other specialised industrial markets.
2005/06 Priorities
After having successfully delivered
improved operational performance 
and significant structural change in
2004/05, in 2005/06 we will focus 
on the following priorities:
—Maintaining our current momentum
on order intake.
—Carefully monitoring the cash
necessary to fund our growth.
—Driving the strategic initiatives 
to realise the corresponding 
cost savings, particularly in lean
manufacturing (WES) and supplier
development (WSD).
—Cautiously looking for acquisition
targets in the domain of value 
added products and assembly
manufacturing.
—Accelerating our shift towards 
Eastern Europe.
Although the year 2005/06 will remain
challenging with a flat market and lower
sales, we are very optimistic for the
years ahead. 
We would like to thank all of our
employees for their commitment 
and their contribution. They can be 
justifiably very proud of all operational
improvement they have driven
throughout the year.
Finally, on behalf of the Board, I would
like to thank David Kendall for his
commitment to Wagon for over 8 
1
/2
years as Chairman, during which time 
he has provided wisdom and guidance
gained through many years’ experience
as a senior executive in international
businesses and Chairman of several
public companies. On a personal note, 
I am most grateful to David for the
support he has given to me during my
first year as Chief Executive. He leaves
the Company in a strong position for the
future, and we wish him a long, healthy,
and active retirement.
Pierre Vareille
Chief Executive
7 June 2005
06/07 Wagon plc 
Annual Report &
Accounts 2005
Cumul/Month (£K)
04/04
05/04
06/04
07/04
08/04
09/04
10/04
11/04
12/04
01/05
02/05
03/05
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
Order intake per month SAFETY 
FIRST Zero Accidents is the only acceptable
level that Wagon will accept for its
employees. In all circumstances, 
Wagon will demonstrate “Safety First” .
The Board of Wagon is committed 
to this. It was the first priority which 
the new executive management
addressed. It was formally launched 
to all plant managers at the “Safety 
First” conference on 13 October 2004 
in Brussels.
Our target is to achieve the avoidance 
of all accidents. By reducing the risks, 
by making the right decisions, by being
on our guard the whole time, and by
obeying the rules, we must and we 
can move forward with determination
towards a target of Zero Accidents.
08/09
SAFETY
FIRST
TF1 Incidents
0
10
20
30
40
50
60
05/04
06/04
07/04
08/04
09/04
10/04
11/04
12/04
01/05
02/05
03/05
04/05
05/05
04/04 Launched in November 2004, the
Wagon Excellence System (WES) 
is a Group initiative to implement 
Lean Manufacturing at Wagon.
WES is not only about costs of
production. It is also about:
—Engineering efficiency and costs
—Inventory reduction
—People involvement
Even more importantly, it is all about
having a vision; a vision about our
engineering departments, our plants,
and a vision about the people we 
work with.
The first results coming from most 
of the plants on stock reduction, 
quality and productivity improvement
are very satisfactory (see graph).
WES Stock on Sales WES VA person Quality customer PPM
WAGON
EXCELLE
SYSTEM
90
92
94
96
98
100
102
104
106
108
110
05/04
06/04
07/04
08/04
09/04
10/04
11/04
12/04
01/05
02/05
03/05
04/05
05/05
04/04
100
101
102
103
104
105
106
107
108
109
110
05/04
06/04
07/04
08/04
09/04
10/04
11/04
12/04
01/05
02/05
03/05
04/05
05/05
04/04
0
10
20
30
40
50
60
70
80
90
100
05/04
06/04
07/04
08/04
09/04
10/04
11/04
12/04
01/05
02/05
03/05
04/05
05/05
04/04 OPERA TING AND FINANCIAL REVIEW Wagon Automotive 
Annual Report 2005
NCE
10/11
WAGON 
EXCELLENCE
SYSTEM ENGINEERED STR UCTU RES
“WE ARE DEVELOPI NG 
A MORE PRECISE
MARKET POSITIONING
AND OFFERING TO 
OUR CUSTOMERS TO
GENERA TE LONG TERM
PROFIT ABLE GROWTH”
OLIVIER CHAPELLE
BUSINESS GROUP DIRECTOR
Organisation
In January 2005, and following the
introduction of matrix management
structures across Wagon, a new ESBG
organisation was announced, based 
on the four main operational areas:
—Engineering: to increase focus on
product and process innovation 
and expertise, and to create a closer
interaction with OEM customers 
in the development phase.
—Programmes: to put in place a robust
Programme Management System, 
in order to enhance Quality Cost 
and Delivery (QCD) performance 
in programme delivery.
—Commercial: to put in place a Key
Account Management structure
aiming at increasing order intake and
developing strategic development
plans for each account.
—Manufacturing: to focus on Safety
First and Wagon Excellence System.
Operating Overview
2004/05 has been a challenging year 
for the Engineered Structures Business
Group. Reduced volumes on Jaguar XJ
and VW D1, coupled with a slower than
expected ramp up on Ford Focus put 
the Business Group’s operational
performance under pressure. In addition,
the dramatic change in the steel market
exposed the business to a potential risk
that was the focus of significant
attention from the commercial teams,
with a highly satisfactory outcome. 
The Engineered Structures Business
Group (“ESBG”) offers automotive
products characterised by a significant
engineering process and material
content. The product line includes
complex structures and body in white
assemblies, closures and doors, impact
management systems, sliding-door rails
and mechanisms, and instrument-panel
cross-beams. The Business Group
supplies most of the major OEM’s in
Europe, including PSA, Renault-Nissan,
Audi, Ford, Fiat, GM, Daimler Chrysler
and Honda.
The Business Group employs some
2,440 people located in four engineering
centres and nine plants located at:
—Fleurus in Belgium
—Fontaine, Gérardmer and 
Sainte-Gauburge in France
—Waldaschaff in Germany
—Fiano and Pescara in Italy
—Brownhills in the United Kingdom
—Wixom, Michigan in the USA
Commercial
The commercial teams have generated
important gains in strategic areas in
2004/05.
Starting with the Business Group’s
Japanese customers, Honda has
awarded orders for the new Civic, and
Nissan for the future Micra cabriolet 
and a new sports utility vehicle. With
those orders the business will multiply
its sales turnover with Honda and Nissan
by 2x and 4x respectively in 2007, and
significantly improve the long term
positioning of its Brownhills plant in 
the United Kingdom.
In the light truck segment, a significant
contract has been gained with Fiat/
Peugeot for the future Ducato light
commercial vehicle that will be
manufactured in the new joint venture
SevelSud plant, in Pescara. This order 
is the result of a three years joint
development work between Wagon 
and Fiat to improve the performance 
to cost ratio of the vehicle’s structure.
The Business Group’s product and
process expertise in roll forming has
enabled a breakthrough in the structural
design through the extensive use of
profiles instead of stamped parts. 
Given the size of the contract, Wagon 
is in the process of constructing a new
plant close to the customer to maximise
logistical efficiencies. 
In the coupe/cabriolet segment, Wagon
has been nominated for an important
number of structural parts by Peugeot 
on the successor to the 206CC. OUTLOOK AND PERSPECTIVES FOR 2005/06
Our two main business aims are
customer satisfaction and growth. 
These will remain the focus throughout
what is expected to be a challenging 
year 2005/06, by remaining true to four 
key objectives:
—To focus on the deployment of Safety
First and Wagon Excellence System.
—To further clarify the ESBG 
product strategy, and market 
segment positioning.
—To enhance R&D efforts, and 
increase upfront product and process
engineering presence in customers’
engineering departments.
—To accelerate the acquisition of 
new contracts.
With a strong focus on execution and
cost control, the Engineered Structures
Business Group will generate improved
results in all its measured operational
indicators in 2005/06.
Manufacturing
The year under review has also
witnessed important evolutions
regarding production capabilities 
and plants.
Over the second half of the year, all
plants have started to deploy the Safety
First and Wagon Excellence System
initiatives, with positive measurable
results already becoming very apparent.
Wagon ESBG also commenced its 
first fabrications on the US continent, 
in Wixom, Michigan. The products 
to be made consist of roof and door
components on two Ford projects,
including the new Ford Mustang
Convertible.
The ESBG manufacturing footprint 
has continued to evolve thanks to the
addition of the two new plants in Pescara
in Italy and Wixom in the USA as noted
above, as well as the decision to close 
a small plant located in Vernouillet, close
to Paris.
In Fontaine, where the body in white
assemblies of the Peugeot 307CC are
produced, and in Fleurus where high
specification door components for the
Ford Focus, Fiesta and C-Max are
produced, the new management teams
have dramatically improved the plant
performances over the second half of
the year, especially in the area of safety,
quality and labour efficiency.
Door frame production at Fleurus, Belgium.
12/13 BUSINESS GROUP REVIEW Wagon plc 
Annual Report &
Accounts 2005 MET AL COMPONENTS
“THE BUSINESS GROUP
HAD ONE OF ITS BEST
YEARS IN TERMS OF
NEW ORDER INT AKE”
DA VID CARDWELL
BUSINESS GROUP DIRECTOR
Wagon’s Metal Components Business
Group (“MCBG”) focuses on the
stamping and assembly of structural
parts. The Business Group has six plants
and supplies most of the major European
OEMs - including Peugeot, Renault, 
VW, Skoda, BMW, T oyota and Ford 
– as well as several Tier 1 systems
suppliers including Visteon, Faurecia 
and Johnson Controls.
The MCBG focuses on the market for
mid-size structural components; typical
vehicle parts are up to one metre in size
and are built into the body of the car, 
or are in areas such as the engine
compartment or seating. The Business
Group has six plants located at:
—Beaucourt in France
—Bessines in France 
—La Souterraine in France
—Tyseley in the UK
—Wantage in the UK
—Béla in the Czech Republic
The Business Group supplies
components into all major automotive
production centres across Europe. 
Operating Overview
As with other Wagon Business Groups,
market conditions brought uncertainty
over key models leading to reduced
sales and profits over the previous year. 
The Business Group progressed its
restructuring activities within the
framework of Wagon’s new matrix
business model. This allowed overheads
to be reduced and enabled a closer
relationship between top management
and the operational units as well as
shorter lines of communication with key
customers. The new structure was fully
effective by the end of the financial year. 
Commercial
The Business Group had one of its best
years in terms of new order intake with
new business wins from Peugeot,
Renault and Skoda in the year. These will
enter production from 2006 and provide
a platform for future growth.
Manufacturing
Operationally the Business Group 
has proceeded with improvements 
to its manufacturing capabilities. 
The implementation of the Wagon
Excellence System at all plants began 
in the second half of the year. Early
results have been encouraging and the
system will enable Wagon to improve
its competitiveness in future years. 
In the UK year on year volumes were 
flat but operational improvements
enabled a moderate rise in profitability.
However the collapse of MG Rover at
the end of the year will naturally impact
performance in the year 2005/06. T o
mitigate this impact, we have closed
Wagon’s Oxford facility and consolidated
its turnover into other Wagon plants. 
This allows Wagon to continue the 
trend of creating larger turnover plants
capable of supporting more demanding
requirements from customers. 
In France the Bessines plant suffered
from reduced volumes year on year on
the Citroën Plurial programme and had 
to take remedial action during the year.
The other French facilities performed
largely in line with expectations. 
In the Czech Republic Wagon expanded
its manufacturing capacity during the
year to match growing market demand
for components from low cost countries.
An investment was approved for new
and larger press equipment which will be
activated in 2005, and come on-stream 
in the next financial year (2006/07). This
expansion will allow the Czech factory 
to move further up the value chain into
larger and more complex components
and to pursue additional value added in
product assembly. The plant in the Czech
Republic is on the way to becoming one
of Wagon’s best equipped and has a
strong engineering and cost advantage.
In certain areas such as high strength
steels and laser welding the plant is
reaching a technical level as good as
many of its competitors in Western
Europe with a quality record to match. Automated transfer press line at Bessines. La Souterraine painting area.
14/15 BUSINESS GROUP REVIEW Wagon plc 
Annual Report &
Accounts 2005
The Business Group expects its
customers to move more component
sourcing to low cost countries. Wagon 
is well positioned to exploit this trend
having been in Eastern Europe for many
years and thus established a good
knowledge of customers, suppliers and
local market conditions. The Business
Group has embarked on an expansion
plan to capitalise on new opportunities 
in Eastern Europe and is looking for
additional opportunities to expand into
other low cost countries. 
The year ahead poses the Business
Group the challenge of adapting to the
reduction in MG Rover in the UK while
continuing to expand in Eastern Europe.
The business is focused on achieving
growth in coming years while matching
the challenges of the market in the short
term. Commercial activity remains high
with new enquiries exceeding the level
of 2004/05 and the prospect of expanding
into additional OEM/Tier 1 customers.
Equally the Business Group is committed
to integrating the Wagon Excellence
System into its daily operations as the key
to prospering in the automotive industry.
2005/06 will therefore show no let up in
the push to improve performance.
OUTLOOK AND PERSPECTIVES FOR 2005/06 INNOV A TIVE SOLUTIONS
“AS A RESUL T OF 
DESIGN AND PROCESS
INNOV A TIONS, THE
BUSINESS GROUP 
IS ABLE TO ACHIEVE
INCREASING LEVELS
OF PROFIT ABILITY”
RENE CHAUVIN
BUSINESS GROUP DIRECTOR
Wagon Innovative Solution Business
Group (“ISBG”) is a provider of research,
development, and manufacturing
expertise for leading-edge automotive
glazing and shading systems. It supplies
the major European OEMs, notably
those domiciled in France like Peugeot
and Renault, or in other European
countries like GM, and Mercedes. 
It also supplies various Tier 1 system
suppliers such as Visteon, Faurecia,
Johnson Control, and T rèves.
Wagon ISBG focuses on niche vehicles,
such as 4x4 and sports utility, station
wagons, and light commercial vehicles. 
The Business Group currently operates
from one site located at Bressuire in
Western France. A second ISBG site 
will go into production shortly at Orense,
Spain. Bressuire also has an engineering
centre representing more than 13% of
the 400 employees. This is considered 
to be one of the key success factors of
this Business Group; the co-location of
research and development, process and
product engineering, manufacturing
operations and business development. 
Operating Overview
During the financial year 2004/05,
Wagon ISBG markets were generally
stable. However, during the period the
Business Group was notified that it
would lose the seat rails business for 
the Renault Espace. Whilst this loss of
business did not affect the year under
review, the new business development
team has had to work hard to minimise
the impact in 2005/06 and beyond.
The Business Group has embraced the
Wagon Excellence System initiative at its
site in Bressuire, and the Orense site will
seek to employ all of the best practices
of this system, using the lessons learnt
from around the Group.
As a result of the design and process
development innovations, ISBG filed
over 40 patents during 2004/05. The
Business Group is able to achieve
satisfactory levels of profitability and
meet the return on capital employed
expectations.
As an example of ISBG’s innovation, at
the end of 2004/05 it introduced a new
range of products combining glazing and
shading, known as the fixed glass roof
system. This newly developed product
will introduce Wagon to the OEMs as a
full system supplier and the new orders
obtained during the year show a real
promise of organic growth.
Looking to the future, ISBG is currently
constructing a new facility in Orense in
Western Spain, which will service
Peugeot’s requirements for sunblinds
and sunroofs on the new Citroën Picasso.
This is due to start production in early
2006. ISBG will also be looking for
specifically targeted niche acquisitions 
of companies in similar product areas.
In combination with the development 
of new products, and the targeting 
of complementary acquisitions, the
strategy is to increase the size of 
this Business Group either organically 
or through carefully selected small
acquisitions and enable it to access
production facilities in low cost countries.
The Business Group team have this as 
a key priority during 2005/06.
OUTLOOK AND
PERSPECTIVES 
FOR 2005/06 Sunblinds and sunroofs from the Innovative
Solutions Business Group.
16/17 BUSINESS GROUP REVIEW Wagon plc 
Annual Report &
Accounts 2005 FINANCIAL REVIEW
Summary of results 
“ OUR RENEWED FOCUS 
ON OPERA TIONAL
PERFORMANCE HAS
CONTRIBUTED STRONGL Y 
TO THE IMPROVEMENT OF
OPERA TING MARGINS”
Richard Cotton, 
Group Finance Director
2005 2004
£m £m
Turnover 450.6 486.9
Operating profit
*
22.8 20.1
Interest (3.4) (3.6)
Return on sales 5. 1% 4.1%
Operating profit less interest
*
19.4 16.5
Exceptional costs (13.8) (7.6)
Amounts written off investments
Accra write down (2.6) –
Goodwill amortisation and impairment (4.5) (2.4)
(Loss)/profit before tax and dividends (1.5) 6.5
2005 2004
Earnings per share – underlying
*
23.7p 20.1p
Dividend per share 9.0p 9.0p
Dividend cover ratio
*
2.7 2.2
2005 2004
£m £m
Decrease in net debt 18.9 3.4
Debt 29.3 48.2
Interest cover ratio
*
6.7 5.6
* Before all exceptional items and amortisation and impairment of goodwill. Sales and operating profit
Continuing operations
Sales from manufacturing were 
broadly flat at £405.1 million (2004:
£408.3 million); Engineering Services 
were £7.6 million lower (51%), following
the reorganisation of the UK business;
and T ooling revenues were £25.5 million
lower (40%), following the tail-off from
the high level of production introductions
in 2004. Overall, sales from continuing
operations were down by 7.5% to
£450.6 million (2004: £486.9 million).
Encouragingly, order intake booked 
in 2005 was the strongest ever at 
£83 million (2004: £69 million).
Underlying operating profit from
continuing operations increased 
by 13.4% to £22.8 million (2004: 
£20.1 million). This improvement in
profitability arose from prior year
restructuring actions and the elimination
of losses in the Engineering Services
business. In addition, the resolution of
the major operational issues in Fleurus
and Fontaine, and the renewed focus on
operational performance contributed
strongly to the overall improvement of
operating margins to 5.1% from 4.1% 
in the prior year.
Restructuring and closure costs
During the year, exceptional and closure
costs of £13.8 million were incurred, in
line with previous communications.
The actions in the restructuring
programme announced in September
2004 have been implemented in line
with the originally planned cost of 
£11 million, together with the loss on
disposal of £0.8 million relating to the
sale of the Redditch operations reported 
at the half year. The anticipated annual
cost savings of £6 million will mostly
flow through in the current year in line
with previous announcements.
Following the demise of MG Rover
exceptional costs of £2.0 million have
been incurred in 2005. The majority of
this relates to provisions for debts and
stock, as well as the impairment of
relevant assets and tooling. A further
£0.4 million of redundancy costs will 
be charged in the current year, bringing
to £2.4 million the currently anticipated
restructuring impact, as previously
announced.
These costs have been disclosed
separately in the profit and loss account,
in accordance with the requirements of
FRS 3 ‘Reporting financial performance’.
Amounts written off investments
Following a review of the immediate
trading prospects of Accra T eknik AB, 
an impairment charge was made against
the Group’s investment in this business,
in line with accounting rules. This reflects
the expectation of management of a
longer period to OEM adoption of this
innovative and strategic technology.
Goodwill amortisation and impairment
Goodwill arising on the consolidation 
of businesses acquired, to the extent it
does not become impaired, is written off
on a straight line basis over a period of
twenty years. The amortisation charge 
to profit in the year ended 31 March 2005
was £2.4 million (2004: £2.4 million). 
In addition to this, the £2.1 million of
unamortised goodwill associated with
the Engineering consultancy business in
the USA has been written off, following
the decision to sell this business.
18/19 Wagon plc 
Annual Report &
Accounts 2005
2003/4 2004/5
2
3
4
5
6
7
1
(6.3)
30.3 (25.5)
(9.4)
(11.2)
(7.6)
(6.6)
486.9 450.6
Sales Bridge £m
1 Exchange
2 New models
3 Tooling
4 Closed plants
5 Old models
6 Engineering services
7 Other volume changes
2003/4 2004/5
2
3
4
5
6
1
7.6
1.0
(1.0)
(3.8)
(3.2)
2.3
16.5 19.4
Indicative Profit Bridge* £m
1 New models
2 Engineering services
3 Waldaschaff
4 Closed plants
5 Old models
6 Other volume changes
*Operating profit after interest from continuing
operations before restructuring costs and 
goodwill amortisation.  FINANCIAL REVIEW CONTIN UED
Interest
The net interest charge for the year
decreased by £0.2 million to £3.4 million
(2004: £3.6 million). This reflects a
continuing focus on all aspects of cash
management within the Group and, in
particular, the reduction in net debt at the
year end to £29.3 million (2004: £48.2
million). Net interest costs were covered
6.7 times (2004: 5.6 times) by operating
profit before exceptional items, goodwill
amortisation and impairment.
Taxation
The total taxation charge for the year
was £5.0 million (2004: £4.7 million). 
The underlying tax charge as a
percentage of the underlying profit
before taxation, exceptional items,
goodwill amortisation and impairment,
was 29.4%. This effective rate is lower
than the UK standard rate, primarily due
to certain income not being taxable at
the UK standard rate together with
adjustment due to the resolution of open
issues in the UK related to earlier years.
We expect the effective rate of tax over 
the next two years to be consistent 
with this year.
Earnings per share
Basic loss per share was 15.5 pence
(2004: earnings per share 0.5 pence),
calculated after all exceptional items,
amortisation of goodwill and impairment.
In order to give an alternative view of the
underlying performance of the Group,
we have also presented underlying
earnings per share, which excludes the
impact of all exceptional items, goodwill
amortisation and impairment. Underlying
earnings per share increased by 17.9% 
to 23.7 pence (2004: 20. 1 pence).
Dividends
The Directors have proposed a final
ordinary dividend of 5.0 pence per 
share (2004: 5.0 pence), payable on 
6 September 2005 to shareholders 
on the register at 5 August 2005. This
makes a total ordinary dividend for the
year of 9.0 pence (2004: 9.0 pence) and
is covered 2.7 times (2004: 2.2 times) 
by earnings attributable to ordinary
shareholders before all exceptional
items, amortisation and impairment 
of goodwill.
Cash flow, net debt and gearing
Working capital
At the year end the Group’s net 
trading working capital was £25 million 
(2004: £34.7 million), equating to 5.5%
of sales from continuing operations
(2004: 7.1%). This reflects the Group’s
renewed operational focus, and
contributed strongly to the reduction 
in debt to £29.3 million.
Capital expenditure and return 
on investment
Capital expenditure in respect of tangible
fixed assets amounted to £1 1.6 million
(2004: £25.5 million) and represented 
0.5 times the annual depreciation charge
(2004: 1 . 1 times). This reflects lower
order intake in prior years. We also
incurred deferred engineering costs 
in respect of major development
programmes amounting to £4.6 million
(2004: £1.5 million). The Group’s
accounting policy of capitalising such
costs, with subsequent amortisation
against future revenues, is therefore 
the most appropriate way of matching
costs associated with the revenues 
they generate.
In addition to the capital expenditure,
approximately £12.6 million (2004: 
£13.5 million) of equipment has been
made available to the Group by way 
of operating leases in France, Belgium
and Germany, and the USA. 
The Board is focused on the need to
generate an adequate return on its
invested capital and thereby create
shareholder value. All operating units 
are tasked with meeting challenging
financial targets to ensure cash returns
are optimised and investments made in
the most value enhancing areas. Capital
expenditure projects are subjected to a
rigorous evaluation process to help
ensure that the cash flow returns on
such investments will exceed the
Group’s cost of capital and that all risks
associated with each project are properly
understood and managed.
One of the key measures used is the
annualised return on invested capital,
defined as profit before interest,
exceptional items, goodwill amortisation
and impairment and tax as a percentage
of average investment, including
capitalised goodwill. The return on
invested capital for continuing operations
for the year was 13%, compared to 10%
in the prior year. Our pre-tax weighted
average cost of capital for the year was
approximately 10% (2004: 10%). Cash Flow
20/21 Wagon plc 
Annual Report &
Accounts 2005
2005 2004
£m £m
Operating profit before exceptional items and goodwill 22.8 20.1
Depreciation and amortisation 23.7 26.0
Movement in working capital and provisions 10.3 0.8
Operating exceptional items (4.3) (1.9)
Operating cash flow 52.5 45.0
Net capital expenditure (17.4) (27.8)
Issue of own shares 0.2 0.1
Operating free cash flow 35.3 17.3
Net interest paid (3.4) (3.2)
Tax paid (6.4) (5.1)
Free cash flow 25.5 9.0
Sale or termination of businesses 0.9 (1.3)
Dividends paid (6.1) (6.1)
Movement in net debt arising from cash flows 20.3 1.6
Exchange adjustments on net debt (1.4) 1.8
Movement in net debt 18.9 3.4
Net debt at beginning of year (48.2) (51.6)
Net debt at end of year (29.3) (48.2)
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005
Net Debt £m Net debt and gearing
Net debt at the year end was 
£29.3 million (2004: £48.2 million).
Comparing net debt to shareholders’
funds of £120.7 million (2004: 
£129.4 million), results in a gearing 
level of 24% (2004: 40%). Further 
details of the Group’s funding
arrangements are set out below.
T reasury and management of
financial risk
The Group has a central treasury function
that operates within clear policies and
guidelines, approved by the Board,
designed to reduce the major treasury
related risks. The main risks are related
to funding (liquidity), interest rate and
foreign exchange exposures. Control
and reporting systems exist to ensure
compliance with the policies and
speculative transactions are not
permitted. There have been no changes
in the year to the major financial risks
faced by the Group, nor in the way in
which they are managed. 
Funding
The Group’s policy is to maintain
adequate committed facilities to meet 
its expected funding needs, whilst
aiming to manage cash resources
efficiently. As at 31 March 2005, the
Group had borrowed US$65 million of
Guaranteed Senior Unsecured Notes,
due for repayment on 10 September
2009. These borrowings have been
converted into a euro denominated
liability of K66.5 million by the use 
of cross currency swaps. Also at 
31 March 2005, the Group had a
committedK62.5 million multi-currency
revolving bank facility, due to mature in
May 2006: this facility has been renewed
until June 2009 at the same level. In
addition, further uncommitted facilities
have been made available to Group
operating companies. The Group’s 
net borrowings at 31 March 2005, 
of £29.3 million, comprised gross
borrowings of £70.0 million, offset 
by cash balances of £40.7 million.
Significant headroom remains available
within our committed facilities.
Interest rate risk
The Group’s policy is to manage its
exposure to short term interest rate
movements through the use of
derivative contracts where appropriate.
At the year end, 65% of the Group’s
borrowings were protected by
instruments providing fixed or 
capped interest rates.
Foreign currency risk
The vast majority of the Group’s
transactions are conducted within the
‘euro zone’ and, therefore, relatively 
few cross currency transactions occur.
Where they do arise, our policy is to
hedge the exposure primarily by using
forward exchange contracts executed 
at the stage of commitment, or where
there is a high confidence of future
commitment.
Group policy is to hedge a proportion of
the overseas net assets and operating
profits translation exposure by foreign
currency borrowings. At 31 March 2005
approximately 37% of the net assets
were hedged by this means.
Further information regarding the
financial assets and liabilities is detailed
in the financial statements.
FINANCIAL REVIEW CONTIN UED Pensions
The Group operates a defined benefit
pension plan in the UK and, in common
with many other UK pension schemes,
the assets of the plan are appropriately
balanced between equities and gilts/
bonds. Following the adverse
performance of global equity markets 
in recent years, the Plan showed a deficit
of £33.1 million before deferred tax at 
31 March 2004, calculated on the basis
of FRS17. This deficit had reduced to
£30.7 million before deferred tax as of 
31 March 2005.
The Board has reviewed the position of
the Plan in consultation with the trustees
and actuary of the scheme and remains
committed to the continued support of
the Plan for the benefit of existing
members. The scheme was closed to
new entrants with effect from February
2002. In view of the financial position 
of the Plan, the Group agreed to increase
its contributions to approximately 
£4.5 million per annum (2004: £4.0 million)
in the short term, pending the outcome
of the next formal actuarial valuation (as
at 1 April 2005), and on-going discussions
with the trustees. These amounts
represent a significant contribution over
and above the estimated normal service
cost of approximately £0.9 million per
annum (2004: £1.1 million).
The pension cost charged to the profit
and loss account under SSAP 24 was
£2.3 million in the year to 31 March 2005
and will be a similar amount in the year 
to 31 March 2006. The charge, including
related finance charges, calculated 
under FRS 17 would be approximately
£1.8 million.
Accounting policies
The Group has adopted UITF38 in the
year. This has resulted in the employee
trust shares previously shown as an
investment now being shown as a
deduction from equity. This reduces 
net assets by £2.2 million. It also 
reduces the plc distributable reserves.
This is recorded as a prior year
adjustment. Apart from this, there 
have been no other changes in policy
during the year.
Implementation of International
Financial Reporting Standards (IFRS)
In accordance with a Regulation adopted
by the European Parliament in June 2002,
EU listed companies are required to
issue consolidated financial statements,
prepared in accordance with IFRS, and
effective for accounting periods
beginning on or after 1 January 2005.
The adoption of IFRS is not expected 
to have a material impact on the income
statement and the Balance Sheet 
impact will be largely Pensions related.
The Group has identified the additional
disclosure requirements in reporting 
and is implementing the necessary
measures consistent with the publication
of its first results under IFRS for the six
months to 30 September 2005. A full
update of the impacts of IFRS reporting,
together with restated comparatives is
planned for September.
Richard Cotton
Group Finance Director
7th June 2005
22/23 Wagon plc 
Annual Report &
Accounts 2005
1 US OEM’s 2%
2 French OEM’s 50%
3 German OEM’s 9%
4 Czech OEM’s 12%
5 UK OEM’s 3%
6 Italian OEM’s 24%
1 2
3
4
5
6
Order intake per customer BO ARD OF DIRECTORS
David Kendall (70)
Chairman*
Non-Executive Director of the British
Standards Institution and Gowrings plc.
Previously, he was Chief Executive of
BP Oil until 1988, Executive Deputy
Chairman of British Coal and Chairman
of Blagden Industries Plc, Bunzl plc,
Celtic Energy Ltd, Danka Business
Systems plc, Meyer International plc,
Ruberoid Plc, and Whitecroft plc.
Appointed to the Board in January 1997 .
Pierre Vareille (47)
Group chief executive
A French national who speaks fluent
English and German, he graduated
from the Ecole Centrale de Paris, an
engineering school, and he also holds
various degrees in economics and
finance (Sorbonne University). He has
worked for the Vallourec Group, GFI
Aerospace and Faurecia. In 2002 he
joined Pechiney as president of its
Aluminium Conversion Sector and
following Pechiney’s takeover by
Alcan, he was appointed a senior vice
president, Alcan Inc. Appointed to the
Board in May 2004.
Richard Cotton (44)
Group Finance Director
A Fellow of the Chartered Institute
of Management Accountants, having
graduated from Kingston University
and Montpellier Business School. 
He was Group Finance Director of
McLeod Russel Holdings plc until it
was taken over by SPX, after which 
he was VP General Manager of the
merged business. Previously he held 
a number of senior finance roles in
international companies, including
Finance Director of British Aluminium,
and Planning Director of Alcoa Europe.
He was appointed to the Board on
18 April 2005. Sue Lyons (52)
Director*
Fellow of the Royal Academy of
Engineering, Fellow of the Institution
of Electrical Engineers, Fellow of the
City and Guilds Institute and Visiting
Fellow at the University of Warwick.
Honourary Doctorate of Science
(Engineering), Imperial College,
London and awarded the European
Women of Achievement Award in
1999. She worked for Rolls-Royce plc
for over twenty years and was
managing director of Rolls-Royce
Defence (Europe). She is a Non-
Executive Director at AWG plc 
and National Express Group plc.
Appointed to the Board in July 2002.
John Rennocks (59)
Director*
Fellow of the Institute of Chartered
Accountants. He is Chairman of
Diploma plc, Nestor Healthcare Group
plc, and England Rugby Ltd. He is a
Non-Executive Director of Babcock
Group International plc, JP Morgan
Fleming Overseas Investment Trust
plc, Foreign & Colonial Investment
Trust plc and Xenova Group plc. He has
worked in senior executive posts for
Corus Group plc, British Steel plc,
PowerGen plc and Smith & Nephew
plc. Appointed to the Board in
September 2002.
Richard Wright (59)
Director*
Fellow of the Chartered Institute of
Marketing, Fellow of the Institute 
of the Motor Industry and a graduate 
of the Universities of Leeds and
Manchester. He has nearly thirty years
experience in the automotive industry
including fourteen years as a senior
executive of the Ford Motor Company
in Europe. He was until January 2005
Non-Executive Chairman of National
Savings and Investments, and is
currently Non-Executive Director of
Mentmore plc and API plc. Appointed
to the Board in July 2003.
*Non-Executive Director and 
member of audit, remuneration 
and nominations committees.
24/25 DIRECTORS’ REPORT
The Directors present their report,
together with the financial statements
of the Company for the year ended 31
March 2005.
Activities and business review
The principal activities of Wagon plc and
its subsidiaries, together with a review
of the businesses, are set out on pages
2 to 23.
Financial results and dividends
The Group financial review for the year
ended 31 March 2005 is set out on
pages 18 to 23 and the Group profit and
loss account for the year ended 31
March 2005 is set out on page 44.
Dividends of £1.5 million were paid in
respect of the 7.25p (net) convertible
participating preference shares. An
interim dividend of 4.0p was paid to
ordinary shareholders on 15 February
2005. It has come to the Directors’
attention that when this dividend was
paid, interim accounts for the Company
demonstrating the availability of
sufficient reserves, had not been
prepared and filed with the Registrar of
Companies. This resulted in a technical
breach of the Companies Act 1985.
Interim accounts for the period to
30 September 2004 are now being
prepared and will be filed as soon as
possible. The Directors believe that
neither shareholders nor creditors have
been prejudiced given that at the time 
of payment, the Company had more
than sufficient distributable reserves.
Shareholders will be asked to remedy
this at the forthcoming Annual General
Meeting by giving approval for the
appropriation of profits to the payment
of the interim dividend, to waive any
rights that the Company may have
against the shareholders who have
received the interim dividend, and to
release any rights that the Company
may have against the Directors in
respect of the payment of the interim
dividend. This explanation together with
the resolutions to be put to shareholders
are set out in the Notice of Annual
General Meeting set out on pages 72
to 73 of this document. 
The Directors recommend, subject
to shareholder approval, that a final
dividend of 5p per ordinary share be
declared payable on 6 September 2005,
to members on the register at close of
business on 5 August 2005, making a
total dividend for the year of 9p per
share (2004: 9p per share).
Directors
The members of the Board at the date 
of this report are shown on pages 24
and 25.
Mr Pierre Vareille was appointed to 
the Board as Group Chief Executive on 
1 May 2004. Mr David Sleath resigned
as Group Finance Director on 31 March
2005 and Mr Richard Cotton was
appointed as Group Finance Director
on 18 April 2005.
The Directors as at 31 March 2005 and
their interests in the share capital and
options of the Company are detailed in
the Directors’ Report on Remuneration
on pages 30 to 37.
In accordance with the articles of
association, the Directors retiring at
the Annual General Meeting will be
Mr Richard Cotton, having been
appointed since the last Annual General
Meeting and Mr John Rennocks and
Ms Sue Lyons, both retiring by rotation.
Being eligible, Mr Rennocks, Mr Cotton
and Ms Lyons offer themselves for 
re-election.
Having reached the age of 70, 
Mr Kendall has decided not to accept 
the Board's invitation to offer himself 
for re-election by shareholders at the
Annual General Meeting on 28 July
2005. The Company expects to
announce details of Mr Kendall’s
successor in advance of that meeting.
Employees
The Group is conscious that its
employees are key contributors to
its success. The Group therefore
encourages good communications
and employee relations across all of
its operations by utilising practices
developed in each operating unit which
are compatible with local circumstances
and individual national legislation.
The Group’s senior management
is kept abreast of developments in
financial, commercial, strategic and
human resource matters and are
thereby able to inform and consult with
employees as appropriate. This is done
by a series of regular telephone calls,
written briefings, and a conference
which is to be held twice per year.
The Group is currently reviewing all of its
management communications following
the executive changes that have taken
place during the last 12 months.
The Group continues to consult with
its European Works Council (called the
Wagon European Forum). This body and
its Select (or management) Committee
have provided a useful additional
mechanism for sharing information
and consulting with our employees.
The Group also recognises its
responsibilities to ensure the fair
treatment of all of its employees in
accordance with national legislation
applicable to the territories within which
it operates. Equal opportunities for
appropriate training, career development
and promotion are available to all
employees regardless of any physical
disability or their gender, religion, race or
nationality. In particular, having regard to
their aptitudes and abilities, the Group
gives full and fair consideration to
applications for employment received
from disabled persons.
Pension arrangements in each of the
countries in which the Group operates
are maintained in accordance with
legislative requirements, custom and
practice and Group policy as appropriate. 26/27 Wagon plc 
Annual Report &
Accounts 2005
Payment of creditors
In the UK, the Group agrees payment
terms with its suppliers when it enters
into binding purchase contracts. At 31
March 2005 the number of creditor days
outstanding for the Company was 26.
Social responsibility
The Group recognises the importance of
social, environmental and ethical (SEE)
matters and the Group continues to
work towards compliance with the ABI
disclosure guidelines on social
responsibility.
The Directors are satisfied that they
have received adequate information in
order to make an assessment of the
risks to the Group’s short and long term
value arising from SEE matters and that
the key business risks pertaining to the
Group, and of which SEE matters form
part, have been identified. These risks
are reviewed on a regular basis and
account is taken of the potential impact
to the business and its stakeholders
resulting from any such risks. A key part
of this process is the achievement of
recognised certification such as ISO
14001 or OHSAS 18001, preparation 
of reports to the Group’s Executive
Committee every six months and the
implementation of a costed annual plan
for proposed areas for improvement in
each financial year.
The Group has put in place formal
processes for the management of
significant risks which have been
identified and, as a result of the formal
reports provided by the Business
Groups, the Directors are aware of
the cost and resources involved in
managing these risks. 
Since the appointment of Mr Vareille
as Chief Executive, the Group has
increased its focus on health and safety
in all of its plants and offices. The
“Safety First” initiative was the first
initiative to be launched in the Group
following his appointment. Every facility
is subject to regular monitoring and
reporting of its safety performance as
against key indicators. The Group’s
formal health, safety and environmental
policy manual requires each Business
Group to take responsibility at a local
level for establishing and maintaining
appropriate standards of health, safety
and environmental management, but
with increased attention and visibility of
performance for the Group’s executive
management. The policies and
procedures, which are currently being
updated, address a wide range of issues,
including the importance of formal risk
assessments and the development of
local policies which reflect the
requirements of the laws and
regulations in each territory.
Each operating unit is required to
prepare an annual health, safety and
environmental plan with formal
objectives intended to continuously
improve upon practices and standards.
The areas for improvement must be
costed and adequate provision made
within the unit’s budget to accommodate
required expenditure. In addition, every
month, the progress of each plant is
reviewed to confirm the progress made
on addressing the plan and advise how
the objectives are being satisfied.
All operating units are encouraged
to achieve formal accreditation as to
the adequacy of the systems and
procedures in place to manage
workplace risks. This includes the
environmental standards ISO 14001
or the eco-management audit scheme
‘EMAS’ accreditation. In the year to 31
March 2005 9 units, out of a total of 16,
have accreditation under ISO 14001.
A further 7 expect to be approved in the
coming financial year and it remains the
Group’s objective that all units should
achieve this standard. In addition, the
Group’s principal operation in Italy and
Germany are certified to the health and
safety standard Occupational Health
and Safety Assessment Series
(OHSAS) 18001.
Through the reporting procedure
established in 2003, the Group’s senior
and executive management appraise
the performance of local management
in complying with Group policy and
meeting predetermined targets
for improvement.
Each operating unit is required to
undertake regular audits of health,
safety and environmental practices.
The unit can conduct such audits using
either internal resources or external
consultants. The findings from these
audits and responses are reported to
the Group Executive Committee and 
are also monitored by the Board. In
addition, each month, the Group
Executive Committee receives a report
summarising accidents and incidents
which have occurred during the
preceding month. DIRECTORS’ REPORT CONTINUED
The procedure for verification of SEE
matters lies within the Group’s risk
management framework and verification
is conducted by both internal resources
and external auditors as described in the
corporate governance report.
Charitable donations
The total charitable donations of the
Group during the year amounted to
£4,000. The Group does not make 
any political donations.
Special business at the Annual
General Meeting
Allotment of shares
The Directors are proposing that
authority be granted to them pursuant
to section 80 of the Companies Act
1985 to allot shares. They are seeking
authority by ordinary resolution to allot
unissued shares up to a maximum
aggregate nominal amount of
£1 ,805,798 representing approximately
14% of the ordinary shares now
in issue.
The Directors have no present intention
of exercising this authority other than to
the extent necessary to satisfy options
granted under the Company’s share
incentive and share option schemes or
to satisfy conversion rights in respect of
the Company’s convertible
preference shares.
Disapplication of pre-emption
The Directors are proposing a special
resolution under section 95 of the
Companies Act 1985 to renew the
disapplication of statutory pre-emption
rights in respect of ordinary shares
having an aggregate nominal value of
£659,710 representing approximately
5% of the ordinary shares now in issue.
Purchase of own shares for cash
As at the AGM in 2004, the Directors
are proposing a special resolution under
section 166 of the Companies Act 1995
to seek authority for the Company to
purchase a maximum of 2,638,841
ordinary shares of the Company
representing 5% of the ordinary shares
now in issue. The prices paid for such
shares will not be less than the nominal
value of 25 pence per share nor more
than 5% above the average of the
middle market quotations of the
Company’s ordinary shares as derived
from the London Stock Exchange Daily
Official List for the five business days
preceding the day on which the ordinary
shares are purchased.
The Directors believe it is advantageous
for the Company to have the flexibility to
make market purchases of its own
shares. In the event that shares are
purchased, they would either be
cancelled (and the number of shares in
issue would be reduced accordingly) or,
subject to the legislation referred to
below, retained as treasury shares.
The Directors will only make purchases
after consideration of the possible effect
on earnings per share and the long term
benefits to shareholders.
The Companies (Acquisition of Own
Shares) (Treasury Shares) Regulations
2003 (the “Regulations”) permit any
shares purchased by the Company to
be held and dealt with by it (including
selling them or transferring them for the
purposes of employee share schemes)
as treasury shares. In the event that the
resolution is approved by the Company’s
shareholders, the Company expects to
apply the Regulations in dealing with
shares which it may acquire. However,
there is no present intention to acquire
shares and deal with them in this way.
The authority contained in the special
resolution will expire 15 months after it
is given or, if earlier, at the conclusion of
the Annual General Meeting to be held
in 2006 but it is the current intention of
the Directors to renew this authority
annually.
Under the Company’s articles of
association, the proposed resolution
must also be approved by the holders of
the Company’s convertible participating
preference shares. Accordingly, their
consent will be sought at a separate
Extraordinary General Meeting of the
preference shareholders to be held on
28 July 2005.
The total number of outstanding options
to subscribe for new ordinary shares at 
7 June 2005 (being the latest practicable
date prior to the publication of this report)
was 1,747,558. This represents 3.31%
of the Company’s issued ordinary share
capital at that date. If the Company
purchases the maximum number of
ordinary shares permitted under the
authority given by the resolution, then
the total number of outstanding options
over ordinary shares at 7 June 2005
would represent 3.49% of the Company’ s
issued ordinary share capital. Wagon plc 
Annual Report &
Accounts 2005
28/29
As noted on page 26, the interim 
dividend of 4.0p was paid to ordinary
shareholders on 15 February 2005.
When this dividend was paid, 
interim accounts for the Company
demonstrating the availability of
sufficient reserves, had not been
prepared and filed with the Registrar of
Companies. This resulted in a technical
breach of the Companies Act 1985.
Interim accounts for the period to 30
September 2004 are now being prepared
and will be filed as soon as possible.
The Directors believe that neither
shareholders nor creditors have been
prejudiced given that at the time of
payment, the Company had more than
sufficient distributable reserves.
Shareholders will be asked to remedy
this at the forthcoming Annual General
Meeting by giving approval for the
appropriation of profits to the payment
of the interim dividend, to waive any
rights that the Company may have
against the shareholders who have
received the interim dividend, and to
release any rights that the Company
may have against the relevant Directors
in respect of the payment of the
interim dividend.
The Inland Revenue has confirmed that
the interim dividend will continue to be
treated as a distribution for UK tax
purposes and that the proposed waiver
and release will have no tax
consequences for ordinary shareholders.
The Inland Revenue will treat the tax
position of UK tax resident ordinary
shareholders and the Company as being
unaffected. Any non-UK tax resident
ordinary shareholder who is in any doubt
about their non-UK tax position should
consult their own professional adviser.
The Directors recommend all
shareholders to vote in favour of
resolutions 1 to 10, as the Directors
intend to do so in respect of their own
shares and consider that they are in the
best interests of the Company and the
shareholders as a whole. In view of the
interests of Mr Kendall, Ms Lyons, Mr
Rennocks, Mr Vareille and Mr Wright
(who were all Directors at the relevant
time) in the subject matter, those
Directors who are also shareholders
holding, beneficially, 0.29% of the
ordinary shares of the Company, will
not be voting on resolution 11.
Going concern
After making due enquiries, the
Directors have a reasonable expectation
that the Group has adequate financial
resources to continue to operate for the
foreseeable future and, consequently,
continue to use the going concern basis
for preparing the financial statements
which follow.
Auditors
Following a recommendation to the
Board from the Audit Committee, a
resolution for the reappointment of
KPMG Audit plc as auditors of the
Company will be proposed at the
forthcoming Annual General Meeting.
Wagon plc – Ordinary Shareholders as at 31.05.05
Funds analysis – 3% shareholders
holding % Issue
Identified Holdings 31/05/2005 52,776,810
Liontrust Investment Services 5,348,957 10.14%
M & G Investment Management (uhc. Prudential PLC) 4,930,177 9.34%
Hermes Pension Management 3,953,695 7.49%
Legal & General Investment Management 3,012,308 5.71%
Schroder Investment Management 2,994,664 5.67%
Wesleyan Assurance Society 2,512,786 4.76%
JP Morgan Fleming Asset Management 1,729,365 3.28%
Wagon plc – Preference Shareholders as at 31.05.05
Funds analysis – 3% shareholders
holding % Issue
Identified Holdings 31/05/2005 20,284,237
New Star Asset Management 2,932,000 14.45%
Framlington Investment Mgt Ltd 2,295,000 11.31%
Wesleyan Assurance Society 2,217,000 10.93%
INVESCO Perpetual 995,000 4.91%
By order of the Board
Jonathan Jowett
Company Secretary
7 June 2005 REM U N ERA TION REPORT
The Directors present their
Remuneration Report for the year 
ended 31 March 2005 produced in
accordance with Schedule 7A to the
Companies Act 1985.
The Company has complied throughout
the financial year with the Combined
Code on Corporate Governance issued
in July 2003 (the “Code”) with regard 
to the remuneration policy as described
below. In framing the remuneration policy,
the Remuneration Committee and the
Board have given full consideration to
Section B of the Code.
Remuneration policy
The Board as a whole establishes
remuneration policy. The Remuneration
Committee determines and recommends
to the Board the framework or Board
policy for the remuneration of the
Executive Directors. It also ratifies 
the Chief Executive’s remuneration
proposals for the members of the
Executive Committee and those
members of the Company whose 
basic salary is £100,000 or more. 
The Committee also takes note of 
the remuneration policy and details 
(as set by the Chief Executive) for 
those individuals whose salary is 
over £50,000, but below £100,000 
per annum.
The remuneration of the Chairman 
of the Board is determined after
consultation with the Chief Executive.
The remuneration of the remaining Non-
Executive Directors is a matter for the
Chairman of the Board in consultation
with the Chief Executive.
In determining the policy for the
Executive Directors, the Committee’s
objective is to ensure that those
individuals are provided with appropriate
incentives to encourage enhanced
performance and are, in a fair and
responsible manner, rewarded for their
individual contributions to the success 
of the Company.
The Remuneration Committee during
the year comprised the independent
Non-Executive Directors and the
Company Chairman:
Ms S M Lyons (Committee Chairman)
Mr D W Kendall 
Mr J L Rennocks
Mr R C Wright
The objective of the remuneration policy
is to provide remuneration in a form and
amount to attract, retain and motivate
high quality management. The importance
of aligning the interests of Directors and
senior managers with shareholders is
carefully considered, particularly in the
design of the performance-related
elements of their remuneration packages.
The Committee has used the services of
the following advisers during the year:
Hewitt Bacon Funded unapproved 
& Woodrow retirement benefit
scheme
Mercer Human Long term
Resource incentive plan
Consulting
Pinsent Masons Share Option
Schemes & Service
Agreements
Deloitte UK tax advice
Granrut Paris French employment
law advice
Spencer Stuart Recruitment of CEO
Taj French tax advice
The use of advisers in the year related 
to detailed legal and tax issues
associated with the Chief Executive’s
salary and benefits, and the settling of
his service agreement. Otherwise, ad
hoc advice has been taken in relation to
the various shares-based incentive, and
pension schemes.
Remuneration is reviewed in March
each year and is established with
reference to the remuneration offered 
to senior executives with similar roles,
taking proper account of the particular
responsibilities, skills, performance and
experience required for the executive
role within the Company. Market
comparisons are made with the
assistance of remuneration surveys,
including specific surveys commissioned
with external consultants where
appropriate. No such surveys were
commissioned in the year. The Chief
Executive’s salary was determined based
on advice received from Spencer Stuart,
the firm of selection consultants that had
been appointed to undertake the search.
The remuneration of Executive 
Directors consists of a number of
separate elements: base salary, a short
term incentive plan (annual cash bonus), 
car and fuel allowance, benefits in 
kind (medical expenses insurance, 
life assurance, accident insurance and
permanent health insurance), long term
equity incentives and pension provision
or allowance. A significant proportion 
of the remuneration is performance-
related through the short and long 
term equity incentives.
For the year to 31 March 2005, the
recommendations of the Remuneration
Committee in respect of the remuneration
of Executive Directors and the Chairman
were accepted by the Board.
Directors’ remuneration
Basic salary
and fees Bonus Benefits Other 2005 Total 2004 Total
££££ £ £
Executive:
D J R Sleath 220,000 121,000 22,479 67,699 431,178 371,869
P Vareille
1
297,917 163,854 30,065 89,375 581,211 –
N P Brayshaw
2
–––– – 687,426
Non-executive:
D W Kendall 80,000 – – – 80,000 160,000
S M Lyons 27,500 – – – 27,500 26,667
J L Rennocks 27,500 – – – 27,500 27,500
R C Wright 25,000 – – – 25,000 14,583
D G Titcombe – – – – – 9,167
Total 1,172,389 1,297,212
(1) Appointed 1 May 2004
(2) Remuneration in 2004 included £476,834 relating to compensation for loss of office 
The above table has been audited Wagon plc 
Annual Report &
Accounts 2005
30/31
On 18 April 2005, the Board appointed
Mr Richard Cotton as Group Finance
Director, at a salary of £175,000 per
annum. In addition to this, Mr Cotton is
entitled to either a fully expensed motor
vehicle, or a taxable cash allowance of
£15,000 pa. A pension allowance of
25% of salary will be paid into an
appropriate tax-efficient vehicle on Mr
Cotton’s behalf, on the basis he makes a
contribution of 5% of salary. Mr Cotton
is entitled to participate in company-
funded private health (for himself and
his family), long-term absence, and life
assurance arrangements. Discretionary
short term bonus arrangements will be
put in place for the financial year 2005/6,
and it is expected that Mr Cotton will
receive an award under the Long Term
Incentive Plan detailed below. Executive
Directors are not normally awarded both
L-TIP shares and share options, as a
matter of Committee policy.
Benefits
Mr Vareille received a car and fuel
allowance of £3,176 and benefits in 
kind of £26,889. Mr Sleath received 
a car and fuel allowance of £18,864
(2004: £18,864) and benefits in kind 
of £3,615 (2004: £1,841). 
Under the terms of his service
agreement Mr Vareille’s salary and
benefits are paid 75% in France (at a
contractual conversion rate of £1:K1.50)
and 25% in the UK. Benefits in kind in
the UK are limited to Life Assurance, the
cost of which is included in “Benefits”
in the table on page 30. Mr Vareille
remains within the French Social
Security System for the purposes of
pension entitlement (ARRCO/AGIRC)
and for life assurance, death in service
(the “Prévoyance” Scheme) and the
standard statutory benefits provided 
by French Social Security in respect 
of medical care and mutual insurance.
As required by French law, the Company
paid £25,353 for the 11 months of
employment, which is included under
“Benefits” on page 30.
Mr Vareille received a supplementary
salary of £89,375 equivalent to 30% 
of his basic salary (pro rata), specifically
in lieu of any Company pension
contribution as he does not participate 
in a Company pension scheme. This
payment is shown under “Other” in 
the table on page 30. Mr Sleath received
a gross discretionary payment of £67,699
(2004: £54,000) in lieu of a payment
being made into a Funded Unapproved
Retirement Benefit plan, given Mr
Sleath’s depature from the Company.
This payment was made in April 2005
and has been included under “Other”
in the table on page 30.
Bonuses
Under the terms of the bonus scheme
introduced in April 2004, Mr Vareille is
entitled to a maximum bonus of 75%
of basic salary, pro-rated by virtue of his
joining part-way through the year. 50%
of salary is guaranteed for the year
ended 31 March 2005. The
Remuneration Committee has no
intention of awarding any further
guaranteed bonuses. 
For the year ended 31 March 2005 the
performance targets were based upon
Group profit before taxation and
exceptional items. Performance must
reach a minimum target for a bonus of
25% of basic salary to be payable and
this bonus payment may rise to a
maximum of 75% of basic salary. 
The Remuneration Committee retains
discretion to vary the awards payable
under the foregoing formulae. For the
year to 31 March 2005 the minimum
performance targets were met, and
consequently Mr Vareille will be paid
a bonus of £163,854 in June 2005. 
The Remuneration Committee has also
approved a bonus of £121,000 to be paid
in June 2005 to Mr Sleath.
For the year 2005/6,the Remuneration
Committee has determined that for
Executive Directors, the same
maximum bonus arrangements will
apply, with Mr Vareille being entitled to
up to 75% of basic salary, and Mr Cotton
up to 60%.
Targets have been set which will require
the Group to comply with budgeted
cashflow in the year before any
payment is made. Payment will be
made subject to the achievement of
targets relating to Profit Before Tax.
Any payment is entirely at the discretion
of the Remuneration Committee.
Executive shares-based
incentive plans
The Remuneration Committee is
firmly of the view that offering senior
executives the opportunity to be
awarded shares in the Company is
an important part of motivating and
rewarding key employees, so that they
may participate in the future growth in
value of the Company. It is also of the
view that senior executives should be
encouraged to invest directly in the
Company through the purchase
of shares. 
The Company’s Long Term Incentive
Plan (“the L-TIP”), the Executive Co-
Investment Plan (“the EC-IP”) and the
Approved and Unapproved Executive
Share Option schemes (“the ESOS
schemes”) are intended to support
these objectives as well as to facilitate
the retention of key senior executives
over the longer term. 
The award of options under the
executive share incentive plans is
determined by the Remuneration
Committee taking into account, inter
alia, the seniority of the individual, length
of service and other such criteria as they
may determine from time to time.
The Remuneration Committee’s current
policy is that participation in the L-TIP is
restricted to Executive Directors.
Furthermore, the Remuneration
Committee continues to apply its policy
that an individual will not be entitled to
participate in both the L-TIP and the
ESOS Schemes.
The Wagon 2000 Long T erm Incentive
Plan (“L-TIP”)
Under the L-TIP , selected senior
executives (including Executive
Directors) within the Group may each
year be awarded conditional
entitlements to shares in the Company.
The awards under the L-TIP are made
by the trustee of The Wagon Employees
Share Trust (“the Trustee”) on the
recommendation of the
Remuneration Committee.
Each award has a three year cycle.
The initial market value of the shares
over which any such award is made may
not exceed 120% of the amount of the
participant’s basic annual salary. The
number or proportion of such award
shares which vest and are released to
the participant will be determined by
reference to the extent to which preset
targets, relating to the performance of
the Company over a fixed three year
period beginning with that in which the
award is made, are met or exceeded. Directors’ long term incentive benefits
31 March Lapsed during Granted during Excercised 31 March
2004 the year the year during the year 2005
L-TIP ££££ £
D J R Sleath 506,996 (128,795) 136,787 – 514,988
Total 506,996 (128,795) 136,787 – 514,988
Award date Awards held Earliest
31 March 2005 vesting date
D J R Sleath 01.12.02 197,860 01.12.05
08.07.03 180,341 08.07.06
28.06.04 136,787 28.06.07
Total 514,988
Note: All awards lapse as a result of either failure to achieve performance criteria, or Mr Sleath’s leaving the Company. 
The above table has been audited
REM U N ERA TION REPORT CONTINUED
Performance targets are set by the
Trustee on the advice of the
Remuneration Committee at the time
the award is made. The targets are
considered to be exacting and provide
transparency for both the executives
and shareholders.
For awards made since the Scheme
was introduced in 2000, vesting 
would only occur in the event that the
Company is at or above the median level
in a table of comparator companies
ranked according to total shareholder
return over the three year cycle. If the
Company is ranked:
— at or above the 50th centile but 
below the 60th centile, 25% of 
the award shares will vest;
— at or above the 60th centile but below
the 75th centile, the percentage of
award shares which will vest will be
calculated on a linear basis between
the percentage thresholds 27.5%
and 62.5% respectively;
— at or above the 75th centile, 100% 
of the award shares will vest;
In addition, award shares will not
normally vest unless the average 
annual growth in the Company’s
adjusted earnings per share in the 
three consecutive years beginning 
in the year in which the L-TIP award 
is made exceeds the percentage 
growth in the retail price index by 
at least 3%. 
The adjusted earnings per share
criterion is the undiluted underlying
earnings per share of the Company. 
This is consistent with the definition
used for the Company’s executive 
share option schemes. 
In the event of a change in control of the
Company the Trustee of the L-TIP may
determine the extent to which, and the
period within which Awards may be
exercised, provided that the amount to
be exercised shall not normally exceed
such proportion as corresponds to the
proportion of the relevant performance
period for an award which has elapsed
at the point of the change in control.
In previous years, the comparator
companies comprise the UK listed
companies (excluding overseas
companies listed in the UK) in the
Engineering & Machinery and
Automobile sectors contained in the
London Share Service Listing published
by the Financial Times. The peer group
selected is composed of UK companies
with a broad range of manufacturing,
engineering and automotive activities,
and which the Remuneration Committee
had considered represented the most
appropriate comparator group.
The L-TIP awards granted in 2001 did
not vest in June 2004 following the
failure to achieve the required growth in
earnings per share. Furthermore, the
awards granted in 2002 will not vest
because the Company has not achieved
the total shareholder return criteria. 
Taking into consideration the
Remuneration Committee’s strategy 
in running shares-based long-term
incentives, and in order to retain and
motivate the new management team,
the Remuneration Committee has
decided to review the list of comparator
companies that will apply to the award
to be made to Executive Directors in
June 2005. Since the appointment of 
Mr Vareille as Chief Executive, the
Company has sought to benchmark
itself as a European automotive
Company. As such a number of 
the companies within the previous
comparator list are no longer considered
appropriate. The Remuneration
Committee has therefore selected a
new list, made up of companies within
the FTSE Automobiles and Parts (Europe)
sector. A list of the comparator
companies is available on request 
from the Company Secretary.
This list of companies will be 
monitored on behalf of the Company 
by an independant third party, and
reported in future Remuneration
Committee reports. 
This list will be applied to any awards
made to Mr Vareille and Mr Cotton in
financial year 2005/6, and the criteria 
will be kept under review by the
Remuneration Committee. Wagon plc 
Annual Report &
Accounts 2005
32/33
The Wagon 2000 Executive 
Co-Investment Plan (“EC-IP”)
Under the EC-IP selected senior
executives may elect to commute a
proportion of up to 50% of their annual
performance related cash bonus, net 
of payroll taxes, in the acquisition of
shares in the Company known as
“bonus award” shares.
If the executive remains with the Group
for a further period of three years and
retains the bonus award shares during
this period, the executive will be
awarded a number of additional shares
known as “matching shares”. The
number of matching shares which will
be awarded is the gross equivalent of
the bonus initially applied to acquire
bonus award shares, divided by the
market value prevailing when the 
bonus award shares were acquired. 
The number of matching shares which
will be awarded will be reduced in direct
proportion to the proportion of bonus
award shares sold or otherwise disposed
of by the participant before the end of
the three year period. In the event of a
change in control of the Company the
Trustee of the Co-Investment Plan 
may transfer to the participants such
proportion of the matching shares as 
the Trustee determines.
An executive may only participate in the
EC-IP if for the year in question, he has
satisfied the performance conditions
required for the award of a cash bonus
as set by the Remuneration Committee.
Following his departure from the
Company in September 2003, Mr N
Brayshaw was granted 42,707 maturity
shares on 16 June 2004. In June 2004
Mr Sleath received his own bonus
award shares (17,739) and the Company
matching shares ( 29,566 ) relating to his
award made in June 2001. 
The EC-IP did not operate for Executive
Directors in 2004.
As a result of feedback received from
shareholders in 2004, following the
introduction of new executive approved
and unapproved share option schemes,
the Remuneration Committee has
conducted a review of the award of
matching shares under the EC-IP .
In previous years, the matching shares
awarded by the Company have not been
subject to performance criteria. The
Remuneration Committee is mindful of
the fact that one of the purposes of the
scheme is to encourage executives to
invest in the shares of the Company by
agreeing to use cash bonus awarded in
the year to purchase shares. The cash
bonus awards have already been
subject to performance criteria.
The Remuneration Committee is also
mindful of the fact that, since the arrival
of the new Chief Executive in May 2004,
his executive team has been completely
changed, and should be encouraged to
build up a shareholding in the Company.
Nevertheless, the Remuneration
Committee has decided that it is in the
interests of shareholders for there to 
be a re-balancing of the award of shares
that are not subject to performance
criteria. Therefore for awards made 
in 2005 and 2006, the Remuneration
Committee has decided that in matching
the shares purchased by individuals, half
of those matching shares will be granted
without performance criteria applying. 
The remaining 50% matching shares
will vest only if the average annual
percentage growth in EPS exceeds 
the average annual percentage growth
in RPI by at least 3% over the three 
year vesting period .
The Remuneration Committee proposes
to apply this policy for financial years
2005/6 and 2006/7, although it will be
reviewed in 12 months’ time.
Wagon and the Engineering & Machinery and Automobile sector graphs
T otal return indices - Wagon and Autos & Engineers
25
50
75
100
125
150
2001 2000 2002 2003 2004 2005  
Wagon return index           Autos and engineers return index
25
50
75
100
125
150
2001 2000 2002 2003 2004 2005  
Wagon return index          FTSE all share return index
T otal return indices - Wagon and FTSE All Share REM U N ERA TION REPORT CONTINUED
Executive Share Option 
Schemes (ESOS) 
Options issued under these schemes
may be exercised between three and
ten years after the date granted, but 
only if a predetermined performance
criterion is satisfied. The criterion
requires that growth in the Company’s
adjusted earnings per share over the
three financial years commencing with
the start of the year in which the grant
occurs exceeds the percentage growth
in RPIx over that same period. The 
actual growth results in the following
percentage of the original share options
granted becoming exercisable:
If the growth equals or exceeds 12%
all the options will vest.
If the growth exceeds 9% but is less
than 12%, the percentage of shares
which will vest will be determined on
a straight line basis between 51%
and 99%.
If the growth equals 9%, half the options
will vest.
If the growth is less than 9% no options
will vest.
For the purposes of the schemes,
adjusted earnings per share means
in relation to any year, the underlying
earnings per share as published in the
Company’s annual report and financial
statements. RPIx means the general
index of retail prices (for all items
excluding mortgage interest) published
by the Central Statistical Office of the
Chancellor of the Exchequer.
The rules of the executive share option
schemes do not allow for options to be
granted at a discount to the market price
at the date of grant. In the event of a
change in control of the Company, both
scheme rules allow for the exercise of a
proportion of the options, corresponding
to the proportion of the performance
period as has elapsed at the time when
control passes (or such other proportion
as the Remuneration Committee
determines), within six months of
such change of control.
Under the terms of his joining the
Company as Chief Executive Mr Vareille
was awarded the following share
incentive awards on 22 September
2004, jointly broadly equivalent to one
year’s basic salary:
(i) An award of the beneficial interest in
120,000 Ordinary shares in the Company
upon and subject to the terms set out in
his service agreement which provides
that the shares be held in trust for three
years prior to their release to Mr Vareille.
The Committee approved the sale of
38,189 of those shares awarded in
order to fund UK tax obligations. The
Committee has recently approved the
sale of a further small number of shares
(as yet undetermined) to fund French
equivalent social contributions incurred
by Mr Vareille on receipt of the award.
(ii) Grant of an option to acquire 195,078
Ordinary shares in the Company at a
market exercise price of 181p per share
normally only exercisable after four
years from the date of grant on 22
September 2004.
The Company operates an Inland
Revenue approved Save As Y ou Earn
share scheme for UK-based employees
who have, at the time an invitation to
participate is made, completed one or
more years’ service. Mr Cotton will be
eligible to participate in this scheme.
Under this scheme, options may, at the
Company’s discretion, be granted to
acquire ordinary shares in the Company
at a discount of up to 20% of the market
price of the Company’s shares at the
date of invitation to participants who
have contracted to save up to a
maximum of £250 per month over
a period of three or five years.
Directors’ share options
31 March Lapsed during Granted during Exercised 31 March
2004 the year the year during the year 2005
P Vareille – – 195,078 195,078
DJR Sleath 262,946 – – – 262,946
3
Total 262,946 – 195,078 – 458,024
Potential
Earliest gain as at
Exercise Date 31 March 
Total (pence) exercisable 2005
1
DJR Sleath 135,084* 266.50 02.12.02 0
116,196* 173.50 29.06.03 £18,591
11,666** 81.00 01.04.06 £12,658
262,946
P Vareille 195,078
2
181.0 22.09.08 £16,582
*Options granted by The Wagon Employees’ Share Trust under The Wagon 1994 Executive Share Option Scheme
**Options granted under The Wagon 1994 Share Savings Scheme
(1) Difference between the exercise price and the market value of Wagon plc ordinary share at 31 March 2005 (189.5p) times number of shares under option
(2) Options granted under The Wagon 2004 Unapproved Executive Share Option Scheme
(3) All of Mr Sleath’s options lapsed on 5 April 2005 following the cessation of his employment. [Wagon to confirm where [3] goes on table]
The above tables have been audited Headroom
Set out below is the available headroom
for the granting of options for ordinary
shares under the Company share
schemes as at 31 March 2005
calculated in accordance with the ABI
principles and guidelines issued in
December 2004:
Issued share capital as at 
31 March 2005: 52,776,810 shares 
Executive schemes:
5% of issued share capital 2,638,841
Number of executive options 
over 10 years 735,954 
Remaining headroom 1,902,887
All schemes:
10% of issued share capital 5,277,681
Number of total options 
over 10 years 2,037,396
Remaining headroom 3,240,285
Share price
The market price of the Company’s
ordinary shares at 31 March 2005 was
189.5p (31 March 2004: 185.5p). The
highest mid-market price during the year
was 199.5p and the lowest mid-market
price was 159.5p.
Executive Directors’ Service
Contracts
The policy for executive service
contracts is that notice periods will
normally not exceed 12 months. On his
appointment Mr Vareille negotiated a
service contract with an initial notice
period of 24 months reducing by one
month for each of the first 12 months 
of employment to 12 months with
effect from his appointment on 1 May
2004. Consequently, with effect from 
1 May 2005, Mr Vareille has a one-year
rolling contract with a notice period from
either party of twelve months.
Mr Cotton has a rolling one-year contract
with a notice period of twelve months
from either party.
The Committee’s policy in relation to
termination of service agreements is to
apply an appropriate level of mitigation,
having regard to all of the circumstances
of the individual and the termination of
employment, and to any legal
advice received.
So far as Mr Vareille’s service
agreement is concerned, the Company
has a right to make a payment in lieu of
notice. If a termination of the agreement
occurs during the first two years of
employment, any payment in lieu will
be calculated on the basis of an amount
equivalent to basic salary and
supplementary salary (ie pension
allowance) for such notice period.
Any bonus payment will be entirely
in the Committee’s discretion.
If employment is terminated after the
second anniversary any payment in lieu
of notice may be made in the Company’s
discretion in monthly instalments, and
will be reduced to take into account any
sums earned by Mr Vareille during the
payment period by way of employment
elsewhere.
Non-Executive Directors
The appointment of Non-Executive
Directors is for a fixed term of three
years and is reviewed at the end of two
years. The Non-Executive Directors do
not have service contracts and do not
participate in any Company pension,
share or incentive scheme. The
Board plans to review its standard
appointment letter for Non-Executive
Directors in line with Code
recommendations, such that these are
in place for re-elected Directors and any
future appointments. The current letters
of appointment for all Non-Executive
Directors will be available for inspection
at each Annual General Meeting and
during normal business hours at the
Company’s Registered Office. 
Fees for Non-Executive Directors are
approved by the Board and are based
on a standard fee with additional fees
payable for the chairing of the Audit 
and Remuneration Committees.
Both Mr Rennocks and Mrs Lyons
have accepted the invitation of the
Nominations Committee to extend 
their respective appointments for a
further three years.
Pension scheme
Mr Sleath is a member of the Wagon
Retirement and Benefits Plan (“the
Plan”) which entitles him to a pension
at the date of retirement based on final
salary. Mr Sleath accrued pension at 
the rate of 1/30th of final salary
(restricted to the Inland Revenue
maximum where appropriate) for each
year of membership of the Plan and
contributed 7% of pensionable salary
to the Plan. His normal retirement age
is 60. Mr Sleath is now a deferred
member of the Plan, following his
leaving the Company on 5 April 2005
(having stepped down from the Board
on 31 March 2005).
Mr Sleath is affected by the Inland
Revenue earnings cap on approved
pension benefits. The Company has
historically made additional payments
to an unapproved retirement benefits
scheme (FURBS) to provide benefits in
respect of salary over the earnings cap.
However, for 2004/5 the Company
agreed to make the payment direct to
Mr Sleath rather than to the FURBS.
Wagon plc 
Annual Report &
Accounts 2005
34/35
Non Executive Directors
Appointment commenced Appointment expires
D W Kendall
1
January 1997 July 2005
S M Lyons
2
July 2002 July 2005
J L Rennocks
2
September 2002 July 2005
R Wright September 2003 July 2006
(1) Mr Kendall retires as a Director at the end of the Annual General Meeting on 28 July 2005, and will not offer himself for re-election.
(2) Retires by rotation and being eligible, will offer themselves for re-election at the AGM. Biographical details can be found on pages 24 and 25. Subject to re-
election, both Mr Rennocks and Ms Lyons will be appointed for a three year period. REM U N ERA TION REPORT CONTINUED
The gross payment (excluded in the
transfer value figures below) to Mr
Sleath was £67,699 (2004: £81,000
paid to the FURBS). This cost has been
provided for in the financial statements.
The Plan also provides a lump sum
death in service benefit and pensions for
dependants of members on their death
in service or following retirement.
In the table on page 37, the increase
in accrued pension during the year
excludes any increase due to inflation of
the accumulated accrued pension at the
start of the year. In comparison the
change in accrued pension includes the
effect of the inflation. The change in
transfer value of accrued pension is
detailed below and allows for the
deduction of member contributions.
As mentioned earlier, Mr Vareille
receives a supplementary salary of 30%
of his basic salary in lieu of any Company
pension contributions as he remains
within the French social security
system. The Company accordingly
makes no pension provision for him.
Outside appointments
Executive Directors are permitted to
accept one appropriate non-executive
Directorship offered by listed
companies and other organisations,
which provide industry experience or
public service. Such outside
appointment is subject to prior Board
approval, taking into account existing
duties and potential conflicts of interest.
Neither of the Executive Directors have
any such outside appointment at
present.
Directors’ interests
The Directors in office at 31 March 2005
had the interests detailed on page 37 (as
shown in the register maintained under
section 325 of the Companies Act 1985)
in Group companies, being solely shares
in Wagon plc. No changes have taken
place in the Directors’ shareholdings
and options between 31 March 2005
and 7 June 2005. Wagon plc 
Annual Report &
Accounts 2005
36/37
Transfer value 
Transfer value of Increase in of accrued 
accrued pension transfer value pension 31
31 March 2004 over the year March 2005
££ £
D J R Sleath 110,599 42,688 160,427
31 March 2005 ordinary shares 31 March 2004 ordinary shares*
D W Kendall 60,000 30,000
S M Lyons 6,500 6,500
J L Rennocks 2,500 2,500
D J R Sleath 27,739 27,739
R C Wright 3,508 –
P Vareille 81,811** –
* Or date of appointment if later
** Held in trust until September 2007
The above tables have been audited
By order of the Board
Sue Lyons
Chairman of the Remuneration Committee
7 June 2005
Accumulated Change in Accumulated 
accrued accrued accrued
Increase in Transfer pension in pension in pension in
accrued pension value of the plan at the plan over the plan at
during the year increase 31 March 2004 the year 31 March 2005
£££ ££
D J R Sleath 3,394 21,152 15,950 3,883 19,833 CORPORA TE GO VERNANCE
Compliance with the Combined Code 
The Board is accountable to the
Company’s shareholders for good
governance and the information and
statements below describe how the
Company applies the main and
supporting principles, and complies 
with the detailed provisions identified 
in the Combined Code on Corporate
Governance issued in July 2003
(the “Code”). 
The Company applies the principles
of the Code, by adopting relevant
recommendations and best practice
from recognised governance reports
and organisations, by developing and
documenting formal Board governance
policies and procedures, and by
monitoring developments and
best practice.
Throughout the year under review, 
the Board considers that the Company
has complied with the provisions
recommended in Section 1 of the
Combined Code, save that:
— The roles of Chairman and Chief
Executive were combined during
April 2004, pending the appointment
of Mr Vareille on 1 May 2004.
— The division of responsibilities of the
Chairman and Chief Executive are not
formally set out in writing and
approved by the Board. However, the
Board is firmly of the view that the
respective roles and responsibilities
are clearly understood by both
individuals, and by the Board as
a whole.
— The Chairman is a member of
both the Renumeration and
Audit Committees. 
— The Board did not undertake a formal
performance evaluation in the year.
This decision was taken in the light of
the arrival of a new Chief Executive in
May 2004, and the decision of the
Finance Director to leave the
Company as announced in December
2004. The Board intends to conduct
an appraisal of its performance and
that of its Committees and individual
Directors during the forthcoming
year, now that the new management
team has been established.
— A formal policy for the engagement of
the auditors for non-audit services
has not been adopted. However, the
Audit Committee does have such a
policy which will be formalised during
the current financial year.
— As part of the review of its Standards
of Business Conduct Policy, the
Group will introduce a method by
which employees can raise any
concerns regarding financial reporting
with the Audit Committee.
— The Chairman has served as such for
more than six years, although he will
now retire at the end of the Annual
General Meeting on 28 July 2005 
and not offer himself for re-election.
Directors
The Board
The Board is collectively responsible
for the success of the Company and
responsible to shareholders for the
effective and proper management and
control of the Company. It is the Board’s
role to provide leadership within a
framework of effective controls 
that enables risk to be appropriately
assessed and managed. The Board
determines and reviews strategy and
policy, sets the Company’s values 
and standards and ensures the right
financial and human resources are 
in place to meet the Company’s
objectives. The Board also continually
reviews management performance.
All Directors act in the best interests of
the Company, aware of their obligations
to shareholders and recognising the
interests of other stakeholders.
There is a formal schedule of matters
reserved for the Board’s decision only
and which includes group strategy,
acquisitions and disposals, annual and
interim results, dividend policy, the
annual budget, requests for major
capital expenditure and other significant
financial matters including material
treasury and investment decisions and
risk management policy. This process is
undertaken following discussions in
conjunction with the Chief Executive
who, through the Executive Committee
(which assists the Chief Executive in
exercising the powers delegated to him
by the Board) is responsible for the
implementation of agreed strategy,
the day to day conduct of the Group’s
operations and for reporting to the Board
on the progress being made in meeting
the Company’s objectives. 
The Board met eight times in the year.
All Directors attended all Board meetings
(during their term of office), save that
Mr Rennocks gave his apologies for one
Board meeting. All Directors were in
attendance at Committee Meetings; 
Audit 3
Nominations 2
Remuneration 7 
save that Mr Kendall and Mr Rennocks
were unable to attend one Remuneration
Committee meeting held at short notice
on the telephone. They were both
consulted about the business being
discussed, and approved the outcome
of the meeting.
A comprehensive file of briefing papers
and a meeting agenda is provided for
each Director, normally seven days prior
to each meeting, and Directors are able
to seek further clarification on any
matter from management whenever
deemed necessary. Decisions are taken
by the Board in conjunction with the
recommendations of its Committees
and advice from external consultants
and executive management, where this
is appropriate. The main Committees to
which the Board delegates its
responsibilities and provides sufficient
resources with which to carry out their
duties, are the Audit, Nominations and
Remuneration Committees, all of whose
terms of reference are determined by
the Board, documented and available on
the Company’s web site or on request
from the Company Secretary. Only
members of the Committees have a
right to attend meetings although others
are invited to attend as appropriate
to the business being conducted. Full
details of the Committees’ activities
appear later in this report. 
The Company purchases appropriate
liability insurance in respect of any legal
action which may be brought against the
Company or its Directors.
At least annually the Chairman meets
with the Non-Executive Directors
without the Executive Directors present.
The Non-Executive Directors led by
the Senior Independent Director have
met to discuss the performance of the
Chairman and on one occasion the
Executive Directors were invited to
join the meeting.  Wagon plc 
Annual Report &
Accounts 2005
Chairman and Chief Executive
The Board’s policy is that the roles
of Chairman of the Board and Chief
Executive of the Company should be
split, and that the role of the Chairman
should be non-executive.
During the period September 2003 to 30
April 2004 the role of Chief Executive
was undertaken jointly by the Chairman
and the Group Finance Director following
the departure from the Company of the
former incumbent, and pending the
appointment of a new Chief Executive. 
Board balance and independence
The Board comprises two Executive
Directors:
Mr Pierre Vareille, Chief Executive
Mr Richard Cotton, Group Finance
Director (appointed 18 April 2005)
and four Non-Executive Directors:
Mr David Kendall, Chairman of the Board
and of the Nominations Committee.
Ms Sue Lyons, independent Non-
Executive Director and Chairman of the
Remuneration Committee.
Mr John Rennocks, Senior Independent
Non-Executive Director and Chairman of
the Audit Committee.
Mr Richard Wright, independent Non-
Executive Director.
Biographies of the Directors are shown
on pages 24 to 25.
Throughout the year ended 31 March
2005, and at the date of this report, at
least half the Board, not counting the
Chairman, was made up of independent
Directors as defined by the Code.
The Non-Executive Directors bring to
the Board external experience in a range
of areas important to the Group and
assist the Board in its decision-making,
constructively challenging strategy and
specific proposals.
The Board is satisfied that its
composition ensures that no individual
or group of individuals dominate the
decision-making process. Given the
small membership of the Board, the
Chairman and all Non-Executive
Directors are members of the
Remuneration and Audit Committees.
The Board believes that shareholders’
interests are served and corporate
governance is in fact strengthened
through the resultant good flow of 
information to all Board members which
helps ensure that no undue influence
can be exerted by any one Director.
Appointments to the Board
There is a formal, rigorous and
transparent procedure for the
appointment of new Directors to the
Board based on merit, using objective
criteria and conducted by the
Nominations Committee which, when
appropriate, makes recommendations
to the Board. Details of this process
and the workings of the Nominations
Committee can be found later in
this report. 
Information and professional
development
The Chairman ensures Directors receive
accurate, timely and clear information
with all papers for meetings of the Board
and its Committees issued in advance
by the Company Secretary who is
responsible for good information flows
within the Board and its Committees,
and between Non-Executive Directors
and management.
All newly appointed Directors and senior
management are given a comprehensive
introduction to the Group’s businesses
including visits to the Group’s
manufacturing facilities and meetings
with other senior management. In
addition, Directors are given a detailed
briefing pack containing group
information based on best practice
guidelines. Although not within the
year being reported, the Board held
one of its meetings at a French plant
at the beginning of April 2005. This
included a tour of the facility, and
presentations by management in situ.
It is intended that this practice will be
repeated in future years.
On request any newly appointed Non-
Executive Director will meet with major
shareholders.
All Directors are advised that they have
access to the advice and services of the
Company Secretary who advises on all
governance matters and ensures
Board procedures are complied with.
In addition, Directors are entitled to seek
independent professional advice in the
furtherance of their duties, if necessary,
at the Company’s expense. The
appointment and removal of the
Company Secretary is a matter for
the Board as a whole.
The Board believes that the Directors
possess a wealth of diverse business
skills and experience, and are
consequently best placed to identify
their own training requirements.
However, they are encouraged to
attend relevant courses upon joining
the board and, where appropriate,
at regular intervals thereafter and
the Company makes the necessary
resources available for any such
development needs.
Performance evaluation
The Board is aware of the need to
conduct regular appraisals of its
performance and that of its Committees
and individual Directors. During the year,
in light of the appointment of a new
Chief Executive, and the announcement
in December 2004 of the departure of
the then Finance Director, the Board
determined that a formal performance
appraisal would be of little value at that
time. Accordingly, the Board intends to
conduct a formal assessment before
31March 2006. 
Election and Re-election
The Company’s Articles of Association
require that all Directors are subject to
election by shareholders at the first
Annual General Meeting after their
appointment and thereafter at intervals
not exceeding three years. Richard
Cotton was appointed as Group 
Finance Director on 18 April 2005 and
accordingly retires and offers himself for
election by shareholders at the AGM.
At the AGM to be held on 28 July 2005,
John Rennocks and Sue Lyons will retire
by rotation and they offer themselves
for re-election. Following a review of 
the respective performances of the
individuals, the Chairman confirms 
that both continue to be effective and
demonstrate their commitment to the
role of Non-Executive Director, Senior
Independent Director and Chairman 
of the Audit Committee (in the case of
John Rennocks) and Chairman of the
Remuneration Committee (in the case
of Sue Lyons). Biographical details of 
all Directors who offer themselves for
electon or re-election can be found on
pages 24 to 25.
Committees of the Board
The Board has three Committees,
Remuneration, Audit and Nominations,
whose members comprise the
Chairman and the Non-Executive
Directors. The duties of the Committees
are set out in formal terms of reference
and are available on request from the
Company Secretary and are also on the
Company’s website.
38/39 CORPORA TE GO VERNANCE CONTINUED
Remuneration Committee
The Committee is made up of the
Chairman of the Board and the Non-
Executive Directors. It is chaired by 
Ms Sue Lyons. The principal function 
of the Committee is to determine and
agree with the Board a framework or
broad policy for the remuneration of 
the Executive Directors and the
Chairman, and within that agreed
framework, to set the remuneration 
of all Executive Directors and the
Chairman and to approve and
recommend the remuneration of 
the other direct reports to the Chief
Executive and certain other senior
executives. The Committee also notes
the salary and benefits of individual
managers whose salary is in excess 
of £50,000 per annum. It also ratifies 
the Chief Executive’s remuneration
proposals for the members of the
Executive Committee and those
members of the Company whose 
basic salary is £100,000 or more. The
Committee met seven times during the
year. The Board’s report to shareholders
explaining how the Company applies the
Code’s principles and complies with its
provisions in relation to remuneration
and on how Directors are remunerated,
together with details of individual
Directors’ remuneration in accordance
with Schedule 7A to the Companies 
Act 1985 are shown on page 30.
Nominations Committee
The Nominations Committee comprises
all of the Non-Executive Directors and
the Chairman of the Board, Mr David
Kendall. The Chairman of the Board
chairs the Committee save in the
circumstances of the selection of his
own successor, when the Committee
would be chaired by the Senior
Independent Director. The Committee
met twice during the year.
The Committee is responsible 
for maintaining the balance and
effectiveness of the Board. Its remit 
is to review the Board structure,
particularly in relation to the diversity 
of skills, experience, age and term of
office and it seeks to ensure that both
Executive and Non-Executive Directors
have the necessary skills and attributes
for the future success of the Group. 
The Chairman of the Company, rather
than the Nominations Committee, 
takes responsibility for considering 
the performance of any Director 
retiring by rotation before making 
a recommendation to the Board on
whether that person should put their
name forward for re-election by
shareholders.
Any proposed appointment commences
with an evaluation by the Nominations
Committee of the balance of skills,
knowledge and experience on the Board
and, in conjunction with experienced
external search consultants, a description
of the role and responsibilities for the
proposed appointment is then prepared.
The appointed external consultant will
then prepare a shortlist of potential
candidates in consultation with the
Chairman and Chief Executive (or acting
Chief Executive). Following meetings
with candidates and the Chairman and
other Directors, the Nominations
Committee then formally meets in order
to ensure that the views of the Executive
Directors are taken into account before
finalising any recommendation regarding
an appointment to the Board. Any
appointees are required to confirm that
they have sufficient time to devote to
the position.
The Committee followed this process
for the appointment of both the Chief
Executive on 1 May 2004, and the Group
Finance Director on 18 April 2005.
Internal Control
Philosophy and policy
The objective of the Directors and 
senior management is to safeguard 
and increase the value of shareholders’
investment and the business and assets
of the Group. Part of this objective
requires the development of relevant
policies and appropriate internal controls
to ensure proper management of the
Group’s resources and the identification
of risks which might serve to
undermine them.
The Board is ultimately responsible for
the Group’s system of internal control
and for reviewing its effectiveness.
However, it is recognised that a system
of internal control is designed to manage,
rather than eliminate the risk of failure to
achieve business objectives and can
provide only reasonable, not absolute
assurance, particularly against
misstatement or loss. The Chief
Executive, in conjunction with the
Executive Committee and certain other
senior executives and external advisers
therefore periodically reviews the
suitability of current system of internal
control and reports their findings to the
Audit Committee.
The Audit Committee reviews the
Group’s findings to ensure the
effectiveness and efficiency of the
processes implemented by executive
and senior management. Such reviews
are conducted through discussions held
with executives and consideration of
reports that have been submitted.
These findings are in turn discussed by
the full Board. The Board is satisfied that
this process accords with the internal
control guidance for Directors set out in
the ICAEW Turnbull guidance and that
through its interface with management,
the Board is aware of all the major risks
facing the Group and the steps taken by
the Group where possible to mitigate
such risks.
Structures
Plant managers and financial controllers
are responsible for managing the
business risks within their facility.
Each year they are asked to complete
a letter of assurance, confirming
compliance with the Group’s policies
and procedures and risk
management processes.
Risk profiling
There is an ongoing process to identify
and evaluate risks faced by the Group,
through the conduct of risk workshops
throughout the Group. This is led by
external advisers and involves the
Executive Committee and certain other
senior executives. Findings from the
workshops are reported to the Audit
Committee together with recommended
action and a timetable for implementation.
A list of prioritised risks is refreshed to
reflect changes to the business including
those arising from new acquisitions. 
The list, along with other management
information, is used to develop an
overall assurance plan for the Group. It is
reviewed on a regular basis by both the
Board, and the Executive Committee.
At Business Group level, the Business
Group Directors conduct their own
divisional risk assessments.
Controlling risk
The Group has a number of policy
and procedure manuals which provide
guidance and instruction to management
in respect of key business, commercial,
financial and operational risks. These are
issued to all of the Business Groups
within the Group. They are currently in
the process of being reviewed
and updated. 
Monitoring and managing the 
status of residual risk
The Group carries out a programme 
of internal audits and management 
self-assessments over the status of
residual risks. Wagon plc 
Annual Report &
Accounts 2005
The actions arising from internal and
external audits are consolidated and 
the results of the audits are reported 
to the Audit Committee. The Audit
Committee assesses the findings 
and proposed actions for addressing
residual risks. In addition, action 
points are reviewed during the 
regular business review meetings.
Internal financial controls
The Group has a comprehensive system
for the regular monitoring and reporting
of the financial performance of each
Business Group and plant and for
assessing the adequacy of the Group’s
systems of internal controls. Detailed
budgets are prepared at plant, Business
Group, and shared service function level
and, following review by the Group’s
Executive Committee, are formally
reviewed and adopted by the Board.
Budgets and targets are regularly
updated via a rolling monthly and
quarterly forecasting process and
variances from the targets and budgets
are discussed with operational and
commercial management.
The internal controls of each plant are
also evaluated through the review of
completed questionnaires. Each plant
manager and financial controller is asked
to confirm in writing that they have
complied with the Group’s policy on
internal financial control.
These internal controls are supported by
focused auditing of specific operations
or functions, as determined by the Audit
Committee at the beginning of each
financial year. The audits are conducted
with the advice and assistance of
Deloitte who facilitate the development
of the annual programme, assist with 
its implementation and report to the
Committee at least twice each year on
the findings and their recommendations.
Following a review of the operation of
internal audit, the Board has decided
that for the future, it will create an
internal audit department. Pending the
recruitment of appropriate individuals,
Deloitte will continue to assist. 
The Board confirms that it has reviewed
the effectiveness of the system of
internal controls for the year ended
31 March 2005 and that this review
covered all material controls including
financial, operational and compliance
controls and risk management systems.
Audit Committee and Auditors
Audit Committee
The Audit Committee comprises the
Chairman of the Board and the three
independent Non-Executive Directors.
Mr John Rennocks FCA, is the Chairman
of the Committee and the Board is
satisfied that he has recent and relevant
financial experience. The Chief
Executive, Group Finance Director and
other senior executives regularly attend
the Committee meetings by invitation.
The Committee also meets regularly
with the auditors without management
being present.
The Committee met three times during
the year and again very shortly after the
year end to discharge its responsibilities,
(as set out in the terms of reference).
In so discharging its responsibilities,
the Committee:
— Monitors the integrity of the
financial statements and any formal
announcements relating to the
Company’s financial performance,
reviewing significant financial
judgements;
— Reviews the Company’s internal
financial controls and internal control
and risk management systems;
— Monitors and reviews the
Company’s requirements for an
internal audit function;
— Makes recommendations to the
Board in regard to the appointment,
re-appointment or removal of the
external auditors, the terms of
engagement and remuneration
and maintaining an appropriate
relationship with them;
— Reviews and monitors the external
auditors’ independence and
objectivity, and the effectiveness
of the audit process;
— Develops and implements the
Company’s policy on the engagement
of the external auditor in the supply of
non-audit services.
The Committee is planning to review
the existing arrangements by which all
employees may, in confidence, raise
concerns about possible improprieties
in matters of financial reporting or
other matters.
During Audit Committee meetings at
which the auditors are present, the
activities of both internal audit (as
carried out by Deloitte pending the
recruitment of two individuals to form 
an  internal function), and the external
auditors are reviewed. This includes the
approval of internal audit plans, and the
scope of work to be undertaken by the
external auditors. Written reports
containing summaries of significant
findings are reviewed and action plans
agreed where necessary.
The Committee has yet to adopt a formal
policy for the engagement of external
advisers for non-audit services which
includes certain services which the
auditors are prohibited from providing.
However, the Committee does have a
general policy of not engaging the
Groups’ auditors, KPMG Audit plc for
work other than audit work, without its
knowledge and consent. The Committee
also reviews annually any non-audit
services provided by the auditors and
their cost which is disclosed in note 7 
to the accounts on page 52 and obtains
written confirmation from the auditors
that they remain independent.
Relations with shareholders
Dialogue with Institutional Shareholders
Principally via the Executive Directors
and the Chairman, the Company seeks
to build on a mutual understanding of
objectives with its institutional
shareholders through regular meetings
and presentations following the
preliminary and interim announcements.
Institutional shareholders will be given
the opportunity to meet with a new 
Non-Executive Director on request. The
views of key analysts and shareholders
are communicated back to the Board
directly by individual Directors and via
reports from the Company’s broker
ensuring all members of the Board
develop a good understanding of the
views of major shareholders. The Senior
Independent Director is available to
shareholders if they have concerns
which contact through the normal
channels of Chairman, Chief Executive
or Finance Director have failed to
resolve or for which such contact is
inappropriate. Corporate information
including the Annual Report and 
other financial presentations and
announcements are available on the
Company’ s website www. wagonplc. com .
Constructive use of the AGM
The Board welcomes the attendance
of shareholders at the Annual General
Meeting and confirms that the Company
complies with all Code provisions
relating to constructive use of the AGM.
In addition to meeting its obligations to
shareholders, the Board recognises that
it has a responsibility to the Group’s
customers, employees and suppliers
and the communities in which it
operates and invests.
By order of the Board
Jonathan Jowett
Company Secretary
7 June 2005
40/41 ST A TEMENT OF DIRECTORS’ 
RESPONSIBILITIES
Company law requires the Directors to
prepare financial statements for each
financial year which give a true and fair
view of the state of affairs of the
Company and Group and of the profit or
loss for the period. In preparing those
financial statements, the Directors are
required to:
— select suitable accounting policies
and then apply them consistently
— make judgements and estimates that
are reasonable and prudent
— state whether applicable accounting
standards have been followed,
subject to any material departures
disclosed and explained in
the accounts
— prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group will continue in business.
The Directors are responsible for
keeping proper accounting records
which disclose with reasonable
accuracy at any time the financial
position of the Company and enable
them to ensure that the financial
statements comply with the Companies
Act 1985. They have general
responsibility for taking such steps
as are reasonably open to them to
safeguard the assets of the Group
and to prevent and detect fraud and
other irregularities. REPORT OF THE AUDITORS   
Wagon plc 
Annual Report &
Accounts 2005
We have audited the financial
statements on pages 44 to 69. We have
also audited the information in the
Directors’ Remuneration Report that is
described as having been audited.
This report is made solely to the
Company’s members, as a body, in
accordance with section 235 of the
Companies Act 1985. Our audit work
has been undertaken so that we might
state to the Company’s members those
matters we are required to state to 
them in an auditor’s report and for no
other purpose. To the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other
than the Company, and the Company’s
members as a body, for our audit work,
for this report, or for the opinions we
have formed.
Respective responsibilities of directors
and auditors
The Directors are responsible for
preparing the Annual Report and the
Directors’ Remuneration Report.
As described on page 42, this includes
responsibility for preparing the financial
statements in accordance with applicable
United Kingdom law and accounting
standards. Our responsibilities, as
independent auditors, are established 
in the United Kingdom by statute, the
Auditing Practices Board, the Listing
Rules of the Financial Services Authority,
and by our profession’s ethical guidance.
We report to you our opinion as to
whether the financial statements give
a true and fair view and whether the
financial statements and the part of the
Directors’ remuneration report to be
audited have been properly prepared in
accordance with the Companies Act
1985. We also report to you if, in our
opinion, the Directors’ Report is not
consistent with the financial statements,
if the Company has not kept proper
accounting records, if we have not
received all the information and
explanations we require for our audit, or
if information specified by law regarding
Directors’ remuneration and transactions
with the Group is not disclosed.
We review whether the Corporate
Governance statement on pages 38 to
41 reflects the Company’s compliance
with the nine provisions of the 2003 
FRC Code specified for our review by
the Listing Rules, and we report if it
does not. We are not required to
consider whether the Board’s
statements on internal control cover 
all risks and controls, or form an opinion
on the effectiveness of the Group’s
corporate governance procedures or 
its risk and control procedures. 
We read the other information contained
in the Annual Report, including the
corporate governance statement and
the unaudited part of the Directors’
Remuneration Report, and consider
whether it is consistent with the audited
financial statements. We consider the
implications for our report if we become
aware of any apparent misstatements or
material inconsistencies with the
financial statements.
Basis of audit opinion
We conducted our audit in accordance
with Auditing Standards issued by the
Auditing Practices Board. An audit
includes examination, on a test basis,
of evidence relevant to the amounts and
disclosures in the financial statements
and the part of the Directors’
Remuneration Report to be audited.
It also includes an assessment of the
significant estimates and judgments
made by the Directors in the preparation
of the financial statements, and of
whether the accounting policies
are appropriate to the Group’s
circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit
so as to obtain all the information and
explanations which we considered
necessary in order to provide us with
sufficient evidence to give reasonable
assurance that the financial statements
and the part of the Directors’
Remuneration Report to be audited
are free from material misstatement,
whether caused by fraud or other
irregularity or error. In forming our
opinion we also evaluated the overall
adequacy of the presentation of
information in the financial statements
and the part of the Directors’
Remuneration Report to be audited.
Opinion
In our opinion:
— the financial statements give a true
and fair view of the state of affairs of
the Company and the Group as at
31 March 2005 and of the loss of the
Group for the year then ended; and
— the financial statements and the part
of the Directors’ Remuneration
Report to be audited have been
properly prepared in accordance
with the Companies Act 1985.
KPMG Audit plc
Chartered Accountants
Registered Auditor
Birmingham
7 June 2005
42/43 GROUP PROFIT & LOSS ACCOU NT
for the year ended 31 March 2005 
Notes
2005 2004
Before Goodwill Before Goodwill
goodwill and amortisation goodwill and amortisation
exceptional Exceptional and exceptional Exceptional and
items items impairment Total items items impairment Total
£m £m £m £m £m £m £m £m
Turnover 2
Continuing operations 450.6 – – 450.6 486.9 – – 486.9
Operating profit 2,3
Continuing operations 22.8 (12.5) (4.5) 5.8 20.1 (5.0) (2.4) 12.7
Loss on disposal
of operations 4 – (1.3) – (1.3) – (2.6) – (2.6)
Amounts written 13 – (2.6) – (2.6) –– – –
off investments
Net interest payable 6 (3.4) – – (3.4) (3.6) – – (3.6)
(Loss)/profit on ordinary 7 19.4 (16.4) (4.5) (1.5) 16.5 (7.6) (2.4) 6.5
activities before taxation
Taxation 8 (5.7) 0.7 – (5.0) (4.7) – – (4.7)
(Loss)/profit for the 13.7 (15.7) (4.5) (6.5) 11.8 (7.6) (2.4) 1.8
financial year
Dividends on non-equity 
shares 9 (1.5) – – (1.5) (1.5) – – (1.5)
(Loss)/profitattributable 12.2(15.7)(4.5)(8.0) 10.3 (7.6) (2.4) 0.3
to ordinary shareholders
Dividends on 
equity shares 9 (4.6) – – (4.6) (4.6) – – (4.6)
Loss for the financial year 23 7.6 (15.7) (4.5) (12.6) 5.7 (7.6) (2.4) (4.3)
Earnings per share 10
– basic (15.5p) 0.5p
– diluted (15.5p) 0.4p
– underlying 23.7p 20.1p
Movements on reserves are set out in note 23 BALANCE S HEETS 
at 31 March 2005
Wagon plc 
Annual Report &
Accounts 2005
44/45
Group Company
2005 2004 2005 2004
Restated Restated
(see note 23) (see note 23)
Notes £m £m £m £m
Fixed assets
Intangible assets 11 42.1 43.0 – –
Tangible assets 12 115.9 123.6 0.9 1.1
Investments 13 – 1.4 238.3 205.0
158.0 168.0 239.2 206.1
Current assets
Stocks 14 36.3 53.5 – –
Debtors 15 122.5 132.4 11.0 7.0
Cash and short term deposits 16 40.7 25.2 4.8 1.6
199.5 211.1 15.8 8.6
Creditors: amounts falling due within one year 17
Borrowings (3.5) (5.3) (23.9) (16.9)
Other creditors (154.9) (165.2) (5.9) (5.5)
(158.4) (170.5) (29.8) (22.4)
Net current assets/(liabilities) 41.1 40.6 (14.0) (13.8)
Total assets less current liabilities 199.1 208.6 225.2 192.3
Creditors: amounts falling due after more than one year 18
Borrowings (66.5) (68.1) (65.4) (66.4)
Other creditors (0.5) (0.4) (108.1) (95.1)
(67.0) (68.5) (173.5) (161.5)
Provisions for liabilities and charges 21 (11.4) (10.7) – –
Net assets 120.7 129.4 51.7 30.8
Capital and reserves
Called up share capital 22 15.2 15.2 15.2 15.2
Share premium account 23 17.6 17.4 17.6 17.4
Revaluation reserve 23 0.9 0.9 – –
Other reserves 23 4.0 4.0 0.3 0.3
Profit and loss account 23 83.0 91.9 18.6 (2.1)
Shareholders’ funds 120.7 129.4 51.7 30.8
Equity interests 100.4 109.1 31.4 10.5
Non-equity interests 20.3 20.3 20.3 20.3
120.7 129.4 51.7 30.8
Approved and signed on behalf of the Board on 7 June 2005
David Kendall
Richard Cotton GROUP CASH FLOW ST A TEMENT
for the year ended 31 March 2005 
2005 2005 2004 2004
Notes £m £m £m £m
Cash inflow from operating activities 26(a) 52.5 45.0
Returns on investments and servicing 
of finance
Interest received and similar income 1.8 1.0
Interest paid (5.2) (4.2)
Non-equity dividends paid (1.5) (1.5)
(4.9) (4.7)
Taxation (6.4) (5.1)
Capital expenditure and financial investment
Development costs capitalised (4.6) (1.5)
Purchase of unlisted investments (1.2) (1.4)
Purchase of tangible fixed assets (11.6) (25.5)
Sale of tangible fixed assets – 0.6
(17.4) (27.8)
Acquisitions and disposals 26(b)
Disposal of businesses and 
subsidiary undertakings 0.9 (1.3)
Equity dividends paid (4.6) (4.6)
Cash inflow before use of liquid resources 20.1 1.5
and financing
Management of liquid resources 
and financing
Decrease in short term deposits 26(c) 1.8 2.2
Net decrease in loans and finance leases 26(c) (3.7) (2.2)
Issue of ordinary share capital 0.2 0.1
Increase in cash in the year 18.4 1.6
Reconciliation of net cash flow to movement in net debt 
For the year ended 31 March 2005 2005 2004
Notes £m £m
Increase in cash in the year 18.4 1.6
Decrease in short term deposits 26(c) (1.8) (2.2)
Net decrease in loans and finance leases 26(c) 3.7 2.2
Decrease in net debt resulting from cash flows 20.3 1.6
Exchange adjustments (1.4) 1.8
Decrease in net debt in the year 18.9 3.4
Net debt at beginning of year (48.2) (51.6)
Net debt at end of year 26(c) (29.3) (48.2) SUPPLEMENT ARY 
ST ATEMENTS 
for the year ended 31 March 2005
Wagon plc 
Annual Report &
Accounts 2005
46/47
Group statement of total recognised gains and losses 
For the year ended 31 March 2005 2005 2004
£m £m
(Loss)/profit for the financial year (6.5) 1.8
Exchange adjustments on the interest in overseas net assets less related borrowings 3.8 (2.8)
Total recognised gains and losses relating to the year (2.7) (1.0)
Reconciliation of movement in group shareholders’ funds 
For the year ended 31 March 2005 2004
2005 Restated
£m £m
(Loss)/profit for the financial year (6.5) 1.8
Dividends (6.1) (6.1)
Loss for the financial year (12.6) (4.3)
Shares issued 0.2 0.1
Charge in respect of share scheme award (0.1) –
Exchange adjustments on the interest in overseas net assets less related borrowings 3.8 (2.8)
Net decrease in shareholders’ funds for the year (8.7) (7.0)
Shareholders’ funds at beginning of year as previously reported 131.6 138.6
Prior year adjustment (see note 23) (2.2) (2.2)
Shareholders’ funds at beginning of year as restated 129.4 136.4
Shareholders’ funds at end of year 120.7 129.4 NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 
1. Accounting policies
The financial statements set out on
pages 44 to 69 comply with applicable
UK accounting standards and are
prepared under the historical cost
convention, modified to include the
revaluation of the Group’s freehold
and long leasehold properties. 
Change in accounting policy
During the year the Group and Company
adopted the accounting requirements of
pronouncement UITF 38 “Accounting
for ESOP Trusts”. The abstract requires
interests in own shares to be shown as
a deduction from shareholders’ funds as
opposed to an investment. As a result
the prior year balance sheets of the
Group and Company have been restated
resulting in a £2.2 million reduction in
both investments and shareholders’ 
funds. Adoption of the accounting
requirements of the abstract have
caused the current year investments
and shareholders’ funds to reduce by
the same amount. There was no prior
year effect on the profit and loss
account as a result of this.
Basis of consolidation
The consolidated financial statements
incorporate the financial statements of
the parent company and its subsidiary
undertakings. New subsidiary
undertakings are included from their
respective dates of acquisition during
the year. The results of subsidiary
undertakings disposed of during the
year are included to the date of disposal.
The term Group refers to Wagon plc
and all its subsidiary undertakings on a
consolidated basis whereas the term
Company refers only to the parent
Company, Wagon plc.
Foreign exchange
The profit and loss accounts of overseas
subsidiary undertakings are translated
into sterling using average exchange
rates. Assets and liabilities in foreign
currencies are translated at the mid-
market rates of exchange ruling at the
balance sheet date. Where the
translation of the net assets of overseas
subsidiary undertakings and related
foreign currency borrowings gives rise
to a net exchange difference, this is
taken directly to reserves. Other
exchange differences are dealt with
through the profit and loss account.
Foreign currency debtors and creditors
covered by forward currency contracts
are translated at the contract rates
of exchange.
Interest rate transactions
Interest rate swap and option
agreements are used to manage the
exposure to adverse movements in
interest rates. Receipts and payments
under these agreements are accrued 
so as to match the net income or cost
with the related finance expense. 
No amounts are recognised in respect
of future periods.
Goodwill
Goodwill, representing the excess of
the fair value of the consideration over
the fair value of the identifiable net
assets of the businesses and subsidiary
undertakings acquired, is capitalised 
as an intangible asset in accordance
with FRS 10 for acquisitions made 
after 1 April 1998, and written off 
on a straight line basis over its useful
economic life, which is 20 years. The
valuation of goodwill subsequent to 
an acquisition is considered via annual
impairment reviews or is reduced via
annual amortisation charge, the method
being determined by the individual
circumstances of each business or
subsidiary acquired. Any impairment
loss would be recognised by an
immediate write off through the 
profit and loss account.
Goodwill arising on acquisitions prior 
to 31 March 1998 was written off
directly against reserves on acquisition
and has not been capitalised on the
balance sheet. On the subsequent
disposal or termination of a previously
acquired business or subsidiary
undertaking, the profit or loss on
disposal or termination is calculated
after charging the remaining balance 
of goodwill after amortisation or, in
respect of businesses or subsidiary
undertakings acquired before 31 March
1998, the gross amount of any related
goodwill previously written off directly
against reserves.
Turnover
Revenue from manufactured parts and
engineering services is accounted for on
delivery of the respective goods and
services. Tooling revenue is recognised
on acceptance of the completed tool by
the customer, except where the tools
are to be invoiced over the production
life of the vehicle, in which case the
revenue is recognised over such
production life.
Leases
Assets held under finance leases, which
are leases where substantially all the
risks and rewards of ownership of the
asset have passed to the Group, and
hire purchase contracts are included
within owned tangible fixed assets and
the obligations relating thereto,
excluding finance charges, are included
in creditors. Rentals payable are
apportioned between the finance
element, which is charged to the profit
and loss account, and the capital
element which reduces the outstanding
obligation of future instalments. 
Costs in respect of operating leases 
are charged in arriving at the operating
profit on a straight line basis over the
lease term.
Depreciation
Depreciation is provided on a straight
line basis at rates calculated to write 
off the cost or valuation less estimated
residual value of each asset over its
expected useful life as follows:
Freehold buildings – over expected
economic life not
exceeding 50 years
Leasehold land – over the period 
and buildings of the lease
Plant and other – 3 to 20 years
equipment
No depreciation is charged on 
freehold land or on assets in the 
course of construction. Wagon plc 
Annual Report &
Accounts 2005
Investments
Investments are shown at cost less
provisions for impairment in value.
Stocks
Stocks and work in progress are 
valued at the lower of cost, including 
an appropriate proportion of overheads,
and net realisable value. 
Pension costs
The expected cost of pensions in
respect of the Group’s defined benefit
pension schemes is charged to the
profit and loss account so as to spread
the cost of providing pensions over the
period during which the Group benefits
from employees’ services. The effects
of variations from regular costs are
spread over the expected average
remaining service lives of members of
the scheme. Contributions in respect 
of defined contribution schemes are
charged to the profit and loss account 
in the period to which they relate.
Research and development
Research and development expenditure
is written off in the year in which it is
incurred except that development
expenditure incurred on a specific
vehicle programme is carried forward
when its future recoverability can
reasonably be regarded as assured.
Any expenditure carried forward is
amortised on a systematic basis over
the expected life of the related vehicle
production.
Cash and liquid resources
Cash, for the purpose of the cash flow
statement, comprises cash in hand and
deposits repayable on demand, less
overdrafts payable on demand.
Liquid resources are current asset
investments which are disposable
without curtailing or disrupting the
business and are either readily
convertible into known amounts of 
cash at or close to their carrying values
or traded in an active market. Liquid
resources comprise term deposits 
of less than one year (other than cash)
and investments in money market
managed funds.
Deferred taxation
The charge for taxation is based on 
the profit for the year and takes into
account taxation deferred because 
of timing differences between the
treatment of certain items for taxation
and accounting purposes. Deferred 
tax is recognised, without discounting,
in respect of all timing differences
between the treatment of certain items
for taxation and accounting purposes
which have arisen but not reversed 
by the balance sheet date, except 
as otherwise required by FRS 19.
Employee share schemes
The cost of awards to employees that
take the form of shares or right to shares
is recognised over the period to which
the award relates. Provision is made 
for employer’s national insurance
contributions which would become
due on excercise of these options.
48/49 NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued)
2. Segmental analysis
Turnover Profit before interest Net operating assets
2004
2005 2004 2005 2004 2005 Restated
£m £m £m £m £m £m
By location of operation
Continuing operations:
United Kingdom 80.5 98.5 0.7 4.6 15.4 28.5
Mainland Europe 360.4 377.3 22.1 17.3 111.0 124.0
Other 9.7 11.1 – (1.8) 1.1 1.9
450.6 486.9 22.8 20.1 127.5 154.4
Exceptional items (12.5) (5.0)
Goodwill amortisation and impairment (4.5) (2.4)
Loss on disposal of operations (1.3) (2.6)
Amounts written off investments (2.6) –
1.9 10.1
By geographical destination
Continuing operations:
United Kingdom 63.0 76.6
Mainland Europe 371.7 393.1
Other 15.9 17.2
450.6 486.9
Reconciliation of net assets
Net operating assets as above 127.5 154.4
Goodwill and intangibles 42.1 43.0
Investments – 1.4
Taxation and dividends (11.8) (12.7)
Net debt (29.3) (48.2)
Provisions (7.8) (8.5)
Net assets 120.7 129.4
Exceptional items and goodwill amortisation and impairment
Of the operating exceptional items (restructuring and reorganisation costs) and goodwill amortisation and impairment of 
£17.0 million (2004: £7.4 million), £4.7 million (2004: nil) was charged in the United Kingdom, £9.6 million (2004: £7.3 million)
in Mainland Europe and £2.7 million (2004: £0.1 million) in Other. Wagon plc 
Annual Report &
Accounts 2005
50/51
3. Operating profit
2005 2004
£m £m
Turnover 450.6 486.9
Cost of sales (348.8) (390.1)
Gross profit 101.8 96.8
Distribution costs (7.6) (9.5)
Administrative expenses (88.4) (74.6)
Operating profit 5.8 12.7
Within the analysis above, exceptional items and goodwill amortisation and impairment have been charged as follows:
2005 2004
£m £m
Cost of sales 0.8 1.5
Distribution costs – –
Administrative expenses 16.2 5.9
17.0 7.4
The exceptional charges, goodwill amortisation and impairment above of £17.0 million include £2.0 million relating to the 
demise of MG Rover. The majority of this relates to provisions for debts and stock, as well as the impairment of relevant assets
and tooling.
4. Loss on disposal
2005 2004
£m £m
Loss on disposal of operations (1.3) (2.6)
The loss on disposal of operations of £1.3 million in the current year relates to the sale and termination of two UK
manufacturing plants at a loss of £1.0 million and the termination of a machine and tool building facility in mainland Europe 
at a loss of £0.3 million.
The loss on disposal of operations of £2.6 million in the prior year, related to the sale and termination of the Hawtal Whiting UK
business at a loss of £2.2 million and the sale of a UK manufacturing plant at a loss of £0.4 million.
5. Employees
The average number of persons, including directors, employed by the Group during the year was:
2005 2004
Number Number
Average number of employees 4,859 5,322
The aggregate payroll costs were: £m £m
Wages and salaries 103.4 114.0
Social security costs 24.0 24.6
Other pension costs (see note 25(a)) 1.8 3.1
129.2 141.7
The disclosures required by the Companies Act 1985 and the Financial Services Authority Listing Rules in respect of directors’
remuneration and their share interests are contained in the remuneration report of the directors on pages 30 to 37. 6. Net interest
2005 2004
£m £m
Interest receivable 1.8 0.8
Interest payable:
Bank loans and overdrafts (4.7) (3.8)
Other loans (0.5) (0.6)
(5.2) (4.4)
Net interest payable (3.4) (3.6)
7. (Loss)/profit on ordinary activities before taxation
The (loss)/profit on ordinary activities before taxation is stated after charging the following: 
2005 2004
£m £m
Amounts written off fixed assets:
– depreciation of tangible fixed assets
owned 21.6 23.4
leased 0.4 0.4
22.0 23.8
– amortisation and impairment of goodwill 4.5 2.4
– amortisation of development expenditure 1.3 1.0
– amortisation of investments – 0.2
27.8 27.4
Loss on disposal of tangible fixed assets 0.4 1.0
Operating lease payments:
– plant and machinery 3.4 3.7
– other 4.9 4.6
Research and development expenditure 6.2 9.6
Auditors’ remuneration – statutory audit 0.4 0.3
In addition, fees paid to KPMG Audit plc and its associates for non-audit services amounted to £17,000 (2004: £32,000).
This represents fees of £2,000 (2004: £18,000) for further assurance services, and other services of £15,000 (2004:
£14,000). The auditors’ remuneration in respect of the Company amounted to £10,000 (2004: £10,000).
NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued) 8. T axation
2005 2004
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
£m £m £m £m £m £m
UK corporation tax
Current tax on income for – – – –––
the period
Adjustments in respect of
prior periods (2.1) – (2.1) (1.1) – (1.1)
(2.1) – (2.1) (1.1) – (1.1)
Foreign tax
Current tax on income for 
the period 6.4 (0.6) 5.8 6.2 – 6.2
Adjustments in respect of 
prior periods 0.1 – 0.1 (1.8) – (1.8)
6.5 (0.6) 5.9 4.4 – 4.4
Total current tax 4.4 (0.6) 3.8 3.3 – 3.3
Deferred tax (see note 21) 
Origination and reversal of 
timing differences 0.4 (0.1) 0.3 1.6 – 1.6
Prior year adjustments 0.9 – 0.9 (0.2) – (0.2)
T ax on (loss)/profit on 5.7 (0.7) 5.0 4.7 – 4.7
ordinary activities
The tax on exceptional items in the current year relate to the restructuring program in France.
There was no tax in the prior year relating to exceptional items.
The standard rate of tax for the year, based on the UK standard rate of corporation tax is 30%. The actual charge for the current
year is higher (previous year was higher) than the standard rate for the reasons set out in the following reconciliation:
2005 2004
£m £m
(Loss)/profit on ordinary activities before tax (1.5) 6.5
Tax on (loss)/profit on ordinary activities at standard rate (30%) (0.5) 2.0
Factors affecting charge for the period
Expenses not deductible for tax purposes 0.6 1.0
Non - taxable goodwill items 1.4 0.8
Losses not recognised 4.4 3.9
Foreign tax charged at different rates than UK standard rate 0.2 (0.1)
Adjustments to tax charge in respect of prior periods (2.0) (2.9)
Short term timing differences (0.3) (1.4)
Total current tax charge 3.8 3.3
No provision has been made for deferred tax on revaluing property to its market value. The tax on the gain arising from the
revaluation would only become payable if the property were sold without rollover relief being available. No deferred tax has been
provided in respect of the gains on disposal of fixed assets where the replacement asset is eligible for rollover relief and such tax
would only become payable if the replacement asset is sold without rollover relief being obtained. No deferred tax is recognised
on the unremitted earnings of overseas subsidiaries, as the earnings are continually reinvested by the Group. 
Factors that may affect future tax charges include an unrecognised deferred tax asset of £15.3 million (2004: £12.1 million)
arising from losses that are not expected to be utilised in the immediate future.
Wagon plc 
Annual Report &
Accounts 2005
52/53 NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued)
9. Dividends
2005 2004
£m £m
Non-equity
7.25p (net) convertible participating preference 1.5 1.5
Equity Pence per share
2005 2004
Interim paid 4.0p 4.0p 2.0 2.0
Final proposed 5.0p 5.0p 2.6 2.6
9.0p 9.0p 4.6 4.6
6.1 6.1
10. Earnings per share
Earnings per share have been calculated as follows:
2005 2004
£m £m
(Loss)/profit on ordinary activities before taxation (1.5) 6.5
Exceptional operating items 12.5 5.0
Loss on disposal of operations 1.3 2.6
Amounts written off investments 2.6 –
Goodwill amortisation and impairment 4.5 2.4
Underlying profit before taxation, exceptional items,
loss on disposal of operations, goodwill 
amortisation and impairment 19.4 16.5
Taxation (before tax on exceptional items, and loss 
on disposal of operations) (5.7) (4.7)
Underlying profit after taxation 13.7 11.8
Dividends on non-equity shares (1.5) (1.5)
Underlying earnings 12.2 10.3
Weighted average number of ordinary shares in issue 51,526,273 51,149,105
Earnings per share – basic (15.5p) 0.5p
Exceptional operating items less related tax relief 22.9p 9.8p
Disposal of operations 2.5p 5.0p
Amounts written off investments 5.0p –
Goodwill amortisation and impairment 8.8p 4.8p
Earnings per share – underlying 23.7p 20.1p
Basic earnings per share is based on loss attributable to ordinary shareholders of £8.0 million (2004: £0.3 million profit).
Underlying earnings per share is considered by the directors to represent a more consistent measure of year on year
operating performance.
The weighted average number of ordinary shares in issue during the year excludes those held by The Wagon Employees’ Share
Trust which are deemed to be cancelled on the basis that the right to dividends has been waived (see note 23).
After adjusting for the effect of dilutive potential ordinary shares exercisable under the Company’s share option schemes and
the dilutive potential convertible preference shares, diluted loss per share amounts to 15.5p (2004: earnings per share 0.4p)
based on an adjusted weighted average number of ordinary shares in issue of 52,395,740 (2004: 52,306,013).
2005 2004
Weighted average number of ordinary shares in issue Number Number
Basic 51,526,273 51,149,105
Employee share options 869,467 1,156,908
Adjusted 52,395,740 52,306,013 11. Intangible fixed assets
Development
Goodwill expenditure Total
£m £m £m
Cost
At 1 April 2004 49.1 7.0 56.1
Exchange adjustment – 0.3 0.3
Additions – 4.6 4.6
At 31 March 2005 49.1 11.9 61.0
Amortisation
At 1 April 2004 12.1 1.0 13.1
Charge for the year 2.4 1.3 3.7
Provisions for impairment 2.1 – 2.1
At 31 March 2005 16.6 2.3 18.9
Net book value
At 31 March 2005 32.5 9.6 42.1
At 31 March 2004 37.0 6.0 43.0
12. T angible fixed assets
(a) Group 
Land and buildings
Plant
Long Short and other
Freehold leasehold leasehold equipment Total
£m £m £m £m £m
Cost or valuation
At 1 April 2004 34.3 2.6 7.9 199.8 244.6
Exchange adjustment 1.6 – 0.2 5.0 6.8
Additions 2.1 0.1 – 9.3 11.5
Disposals (0.2) (0.3) (0.1) (3.5) (4.1)
Businesses disposed of – – – (9.3) (9.3)
At 31 March 2005 37.8 2.4 8.0 201.3 249.5
At valuation 4.2 0.9 – – 5.1
At cost 33.6 1.5 8.0 201.3 244.4
37.8 2.4 8.0 201.3 249.5
Depreciation
At 1 April 2004 6.2 0.9 4.3 109.6 121.0
Exchange adjustment 0.2 – 0.1 2.5 2.8
Charge for year 1.2 0.1 0.5 20.2 22.0
Disposals – (0.1) (0.2) (4.1) (4.4)
Businesses disposed of – – – (7.8) (7.8)
At 31 March 2005 7.6 0.9 4.7 120.4 133.6
Net book value
At 31 March 2005 30.2 1.5 3.3 80.9 115.9
At 31 March 2004 28.1 1.7 3.6 90.2 123.6
The value of land included in the above figures which is not depreciated is £8.0 million (2004: £7.4 million).
The net book value of plant and other equipment includes £3.7 million (2004: £3.9 million) in respect of assets held under finance
leases and hire purchase agreements. The related depreciation charge was £0.4 million (2004: £0.4 million).
Wagon plc 
Annual Report &
Accounts 2005
54/55 NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued)
12. T angible fixed assets (continued)
(b) Company
Land and buildings
Plant
Long Short and other
Freehold leasehold leasehold equipment Total
£m £m £m £m £m
Cost or valuation
At 1 April 2004 0.4 0.6 0.2 0.7 1.9
Additions – – – 0.1 0.1
Disposals – (0.2) – – (0.2)
At 31 March 2005 0.4 0.4 0.2 0.8 1.8
At valuation 0.4 – – – 0.4
At cost – 0.4 0.2 0.8 1.4
0.4 0.4 0.2 0.8 1.8
Depreciation
At 1 April 2004 – 0.1 0.1 0.6 0.8
Charge for the year – 0.1 – 0.1 0.2
Disposals – – – (0.1) (0.1)
At 31 March 2005 – 0.2 0.1 0.6 0.9
Net book value
At 31 March 2005 0.4 0.2 0.1 0.2 0.9
At 31 March 2004 0.4 0.5 0.1 0.1 1.1
The value of land included in the above figures which is not depreciated is £0.2 million (2004: £0.2 million).
(c) Freehold and long leasehold land and buildings - historical cost
Freehold and long leasehold land and buildings determined according to the historical cost accounting rules would be:
Group Company
Long
Freehold leasehold Total Freehold
£m £m £m £m
At 31 March 2005
Cost 33.6 1.5 35.1 0.6
Depreciation (3.9) (0.4) (4.3) (0.2)
Net book value 29.7 1.1 30.8 0.4
At 31 March 2004
Cost 30.1 1.7 31.8 0.6
Depreciation (2.6) (0.3) (2.9) (0.2)
Net book value 27.5 1.4 28.9 0.4
(d) Capital commitments
Group capital expenditure contracted for and for which no provision has been made in these accounts amounted to £8.6 million
(2004: £3.1 million). The Company had capital commitments of £0.1 million (2004: £nil). 13. Investments
(a) Group
£m
Cost
At 1 April 2004 (restated) 1.4
Additions 1.2
At 31 March 2005 2.6
Provisions
At 1 April 2004 (restated) –
Provisions 2.6
At 31 March 2005 2.6
Net book value
At 31 March 2005 –
At 31 March 2004 (restated) 1.4
Investments represents a 1 8.2% (2004: 1 0%) shareholding in ACCRA Teknik AB. Following a review of the outlook of this
business the Group has written down its investment to nil reflecting the longer period anticipated to generate returns from 
this innovative technology.
Interests in own shares which were previously classed as investments have been restated and shown as a reduction to the
profit and loss account reserve (see note 23).
(b) Company
Shares in Loans to
Group Group
Investments undertakings undertakings Total
£m £m £m £m
Cost
At 1 April 2004 (restated) 1.4 164.0 68.8 234.2
Additions 1.2 – 36.2 37.4
At 31 March 2005 2.6 164.0 105.0 271.6
Provisions
At 1 April 2004 (restated) – 20.7 8.5 29.2
Provisions 2.6–1.5 4.1
At 31 March 2005 2.6 20.7 10.0 33.3
Net book value
At 31 March 2005 – 143.3 95.0 238.3
At 31 March 2004 (restated) 1.4 143.3 60.3 205.0
Interests in own shares which were previously classed as investments have been restated and shown as a reduction to the
profit and loss account reserve (see note 23).
Principal trading subsidiary undertakings
Wagon Industrial Limited is the principal UK trading Company. It is wholly owned by the Company, is incorporated in England 
and Wales and operates in the United Kingdom.
The overseas companies, which are all wholly owned by an intermediate holding Company, are incorporated and principally
operate in the countries shown on page 77.
A list of the UK operating units and overseas operations including their businesses is included in the details set out on page 77.
There are some intermediate holding companies and certain other subsidiary undertakings of minor importance which are
excluded by virtue of Section 231(5) of the Companies Act 1985.
Wagon plc 
Annual Report &
Accounts 2005
56/57 14. Stocks
Group
2005 2004
£m £m
Raw materials and consumables 11.6 10.1
Work in progress 18.5 38.0
Finished goods and goods for resale 6.2 7.3
36.3 55.4
Less payments on account – (1.9)
36.3 53.5
15. Debtors
Group Company
2005 2004 2005 2004
£m £m £m £m
Trade debtors 100.5 117.2 0.1 –
Amounts owed by group undertakings – – 1.8 1.7
Other debtors 16.8 2.0 8.5 4.8
Prepayments and accrued income 5.2 13.2 0.6 0.5
122.5 132.4 11.0 7.0
Other debtors include corporation tax recoverable of £5.2 million (2004: £0.2 million).
16. Cash and short term deposits
Group Company
2005 2004 2005 2004
£m £m £m £m
Cash at bank and in hand 35.9 18.8 – –
Short term deposits 4.8 6.4 4.8 1.6
40.7 25.2 4.8 1.6
NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued) 17. Creditors: amounts falling due within one year
Group Company
2005 2004 2005 2004
£m £m £m £m
Borrowings:
Bank overdrafts 0.7 2.5 21.7 14.7
Current instalments of medium and long term other loans 2.2 2.2 2.2 2.2
Finance lease obligations 0.6 0.6 – –
3.5 5.3 23.9 16.9
Other creditors:
Trade creditors 80.8 102.3 0.2 0.2
Amounts owed to group undertakings – – 0.2 –
Corporation tax 10.1 7.4 – –
Other taxes and social security 8.6 8.3 – –
Other creditors 32.6 26.1 0.9 0.3
Accruals and deferred income 19.5 17.8 1.3 1.7
Dividends 3.3 3.3 3.3 3.3
154.9 165.2 5.9 5.5
Details of secured borrowings are shown in note 20.
18. Creditors: amounts falling due after more than one year
Group Company
2005 2004 2005 2004
£m £m £m £m
Borrowings:
Medium and long term bank and other loans 65.4 66.4 65.4 66.4
Finance lease obligations 1.1 1.7 – –
66.5 68.1 65.4 66.4
Other creditors:
Amounts owed to group undertakings – – 108.1 95.1
Other creditors 0.5 0.4 – –
0.5 0.4 108.1 95.1
Details of secured borrowings are shown in note 20.
19. Obligations under operating leases
Operating lease payments falling due next year to which the Group was committed at 31 March were:
Group Company
Land and Land and 
buildings Other buildings Other
£m £m £m £m
Lease expires:
Within one year 0.5 0.3 – –
Between one and five years 1.0 2.6 – –
After more than five years 2.7 1.2 1.0 –
At 31 March 2005 4.2 4.1 1.0 –
Lease expires
Within one year 0.3 0.2 – –
Between one and five years 0.6 2.8 – –
After more than five years 3.5 1.3 1.0 –
At 31 March 2004 4.4 4.3 1.0 –
The Company has guaranteed the lease payments of certain of its subsidiaries, the total minimum lease payments of which
amount to £3.7 million (2004: £3.7 million). 
Wagon plc 
Annual Report &
Accounts 2005
58/59 20. T otal borrowings
Group Company
2005 2004 2005 2004
£m £m £m £m
Total borrowings comprise:
Unsecured bank loans and overdrafts 66.1 68.9 87.1 81.1
Secured under finance leases on related assets 1.7 2.3 – –
Unsecured other loans 2.2 2.2 2.2 2.2
70.0 73.4 89.3 83.3
Repayment of borrowings:
In one year or less, or on demand 3.5 5.3 23.9 16.9
In more than one year but not more than two years 20.7 0.6 19.7 –
In more than two years but not more than five years 45.8 23.0 45.7 22.0
In more than five years – 44.5 – 44.4
70.0 73.4 89.3 83.3
Financial assets
Cash at bank and in hand, and short term deposits, all of which are on floating rate terms, are analysed in note 16 to the financial
statements. With the exception of short term debtors, the Group has no other financial assets.
The profile of the Group’s financial assets analysed by currency was:
Group
2005 2004
£m £m
Sterling 1.9 1.7
Euro 37.9 23.2
US dollar 0.8 0.2
Other 0.1 0.1
40.7 25.2
Financial liabilities
After taking into account the various interest rate and currency swaps entered into by the Group, the interest rate profile of the
Group’s financial liabilities analysed by currency was:
Floating rate Fixed rate
financial financial
Total liabilities liabilities
£m £m £m
Sterling 4.0 4.0 –
Euro 64.8 19.1 45.7
US dollar 1.2 1.2 –
Other –––
At 31 March 2005 70.0 24.3 45.7
Sterling 1.6 1.6 –
Euro 68.1 23.7 44.4
US dollar 2.7 2.7 –
Other 1.0 1.0 –
At 31 March 2004 73.4 29.0 44.4
NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued) 20. T otal borrowings (continued)
The fixed rate financial liabilities carry a weighted average interest rate of 6.1% (2004: 5.9%). The weighted average period
for which the rate is fixed is 4 years (2004: 4 years). The floating rate financial liabilities are set by reference to a margin charged
over the relevant LIBOR rate for the currency of borrowing.
In addition to the above, the Group also has 7.25p (net) convertible participating preference shares with a book value of
£2.0 million. Details of their terms and conditions are included in note 22.
As explained on page 22 of the financial review, the Group’s policy is to hedge a proportion of its overseas net assets translation
exposure. Gains and losses arising from this currency exposure are included in the statement of total recognised gains and losses.
The Group’s transactional currency exposures give rise to the net currency gains and losses recognised in the profit and loss
account. Such exposures include the monetary assets and monetary liabilities of the Group that are not denominated in the
functional currency of the operating unit involved. As at 31 March 2005, these exposures were as follows:
Net foreign currency monetary assets
Euro US dollar Other Total
Functional currency of group operation £m £m £m £m
Sterling 1.2 0.3 – 1.5
Euro –0.3 –0.3
At 31 March 2005 1.2 0.6 – 1.8
Sterling 0.1 – – 0.1
Euro – 0.1 0.1 0.2
Other 0.1 – – 0.1
At 31 March 2004 0.2 0.1 0.1 0.4
The maturity profile of the Group’s financial liabilities other than short term creditors such as trade creditors and accruals was
as follows:
Bank Bank and Finance lease
overdrafts other loans obligations Total
Borrowings analysed by maturity date £m £m £m £m
At 31 March 2005
Borrowings due within one year 0.7 2.2 0.6 3.5
Borrowings due after more than one year:
Between one and two years – 19.7 1.0 20.7
Between two and five years – 45.7 0.1 45.8
After more than five years ––––
– 65.4 1.1 66.5
At 31 March 2004
Borrowings due within one year 2.5 2.2 0.6 5.3
Borrowings due after more than one year:
Between one and two years – – 0.6 0.6
Between two and five years – 22.0 1.0 23.0
After more than five years – 44.4 0.1 44.5
– 66.4 1.7 68.1
Wagon plc 
Annual Report &
Accounts 2005
60/61 20. T otal borrowings (continued)
The Group has undrawn committed borrowing facilities. The facilities available at 31 March in respect of which all conditions
precedent had been met were as follows:
Group
2005 2004
£m £m
Expiring in:
one year or less – –
more than one year but not more than two years 23.3 –
more than two years – 19.9
23.3 19.9
2005 2004
Book value Fair value Book value Fair value
Financial instruments by category £m £m £m £m
Asset/(liability)
Short term deposits 4.8 4.8 6.4 6.4
Cash at bank and in hand 35.9 35.9 18.8 18.8
7.25p (net) convertible participating preference shares (2.0) (20.6) (2.0) (20.3)
Borrowings falling due within one year (3.5) (3.5) (5.3) (5.3)
Borrowings falling due after more than one year (66.5) (66.5) (68.1) (68.1)
Interest rate swaps and similar instruments – (3.2) – (3.4)
Forward foreign currency contracts –2.1 –4.4
Commodity swaps –0.2 –0.1
Where available market rates have been used to determine fair values. When market prices are not available, fair values have
been calculated by discounting cash flows at prevailing interest rates.
The Group enters into forward foreign currency contracts to eliminate the currency exposures that arise on sales and purchases
denominated in foreign currencies. It also uses interest rate swaps to manage its interest rate exposure, and commodity swaps
to manage its exposure to fluctuations in the price of certain of its raw materials. Changes in the fair value of instruments used
as hedges for foreign currency, interest rate and commodity exposures are not recognised in the financial statements until the
hedged position matures. An analysis of these unrecognised gains and losses is as follows:
Forward
foreign
Interests currency Commodity
rate swaps contracts swaps
£m £m £m
Unrecognised (losses)/gains on hedges at 1 April 2004 (3.4) 4.4 0.1
Arising in previous years and recognised in the year 0.9 (2.3) (0.1)
Arising in previous years and not recognised in the year (2.5) 2.1 –
Arising in the year and not recognised in the year (0.7) – 0.2
Unrecognised (losses)/gains on hedges at 31 March 2005 (3.2) 2.1 0.2
Of which:
Expected to be recognised in the year ended 31 March 2006 (0.4) 0.7 0.2
Expected to be recognised in the year ended 31 March 2007 or later (2.8) 1.4 –
NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued) 21. Provisions for liabilities and charges
Deferred Overseas
taxation pensions Total
£m £m £m
At 1 April 2004 2.2 8.5 10.7
Exchange adjustment 0.2 0.2 0.4
Charge for the year 1.2 0.4 1.6
Released – (1.3) (1.3)
At 31 March 2005 3.6 7.8 11.4
The deferred taxation liabilities/(assets) provided are:
2005 2004
£m £m
Accelerated capital allowances
– UK – (0.7)
– overseas 0.6 –
Other timing differences 3.0 2.9
3.6 2.2
Deferred tax asset not recognised is as follows:
Other timing differences (15.3) (12.1)
The above unrecognised balance relates to tax losses in countries where there is insufficient evidence that they will be utilised in
the foreseeable future.
22. Share capital
Allotted, called up
Authorised and fully paid
Number £m Number £m
Equity interests
Ordinary shares of 25p each
At 1 April 2004 60,000,000 15.0 52,640,565 13.2
Issued during year – – 136,245 –
At 31 March 2005 60,000,000 15.0 52,776,810 13.2
Non-equity interests
7.25p (net) convertible participating 
preference shares of 10p each
At 1 April 2004 30,000,000 3.0 20,288,237 2.0
Converted during the year – – (4,000) –
At 31 March 2005 30,000,000 3.0 20,284,237 2.0
18.0 15.2
The convertible participating preference shareholders are entitled to a fixed cumulative preferential dividend at the rate of 7.25p
(net) per share per annum payable half yearly in arrears on 15 June and 15 December and a further non-cumulative dividend
equal, in aggregate, to 0.01 per cent of the excess over £60,000,000 of the profits for the financial year of the Company available
for distribution.
The convertible participating preference shares do not entitle their holders to attend and vote (other than in certain
circumstances) on any resolution unless the fixed preferential dividend is six months in arrears. The shares allow conversion
at the option of the shareholder into fully paid ordinary shares of 25p each during the period to 20 August 2008 on the basis of
28.5714 ordinary shares for every 100 convertible participating preference shares.
In the event of a return of capital on liquidation or otherwise, the assets of the Company available for distribution among the
members shall be applied first in repaying to the holders of the convertible participating preference shares any arrears or
accruals of the fixed preferential and participating dividend, and second in repayment of the capital paid up or credited as paid
up, together with a further payment of a premium of 90p per share. There are no further rights to participate in the assets of
the Company.
During the year 135,103 ordinary shares were issued for consideration of £172,369 in respect of share options exercised under
an Inland Revenue approved Save As Y ou Earn share save scheme. On 26 August 2004, 4,000 preference shares were
exchanged for 1,142 ordinary shares.
Wagon plc 
Annual Report &
Accounts 2005
62/63 22. Share capital (continued)
The following share options were outstanding at 31 March 2005:
Subscription Number of ordinary 
price per share Shares of 25p each
Date of grant 2005 2004
Executive scheme 1994
22 December 1994 453.00p – 7,000
29 December 1995 436.00p 10,000 10,000
21 July 1997 221.50p 15,000 15,000
4 December 1997 275.00p – 15,000
3 August 1998 307.50p 37,601 72,160
2 December 1999 266.50p 195,678 243,519
29 June 2000 173.50p 248,933 418,689
17 July 2001 218.50p 146,986 252,651
16 July 2002 182.50p 296,406 460,763
8 July 2003 139.50p 241,629 425,221
Executive scheme 2004
22 September 2004 181.00p 195,078 –
5 January 2005 174.00p 542,953 –
The Wagon 2000 Long Term Incentive Plan
21 July 2000 Nil Nil – 231,147
12 June 2001 Nil Nil – 257,164
1 December 2002 Nil Nil 254,161 398,652
8 July 2003 Nil Nil 180,341 180,341
28 June 2004 Nil Nil 136,787 –
The Wagon 2000 Co-Investment Plan
12 June 2001 Nil Nil – 105,211
Share savings scheme 2004
4 February 2005 138.00p 123,965 –
Share savings scheme 1994
16 January 1997 237.00p – 10,201
15 January 1998 236.00p 3,139 4,791
30 December 1998 180.00p 4,899 55,183
4 February 2000 230.00p 28,831 38,180
5 February 2001 137.00p 78,744 211,848
8 February 2002 206.00p 61,831 90,275
31 January 2003 81.00p 616,390 782,727
4 February 2004 155.00p 132,773 156,066
3,552,125 4,441,789
The Wagon 1994 Executive Share Option Scheme and The Wagon 1994 Share Savings Scheme were approved by shareholders
on 7 September 1994. The Wagon 2004 Executive Share Option Scheme and The Wagon 2004 Share Savings Scheme were
approved by shareholders on 27 July 2004.
At 31 March 2005 a total of 1,177,334 (2004: 1,381,906) ordinary shares with a nominal value of 25p per share, representing
1.6% (2004: 1.9%) of the Company’s issued share capital were held by Mourant & Co Trustees Limited as Trustee to The Wagon
Employees’ Share Trust to satisfy obligations in respect of the options granted above.
The options under the share savings schemes are exercisable by the grantees (provided they remain in the Group’s
employment) within six months of the maturity date of the three to seven year bonus due under the relevant sharesave contract.
The options under the other schemes, which include the 1994 and 2004 Executive Schemes, are exercisable by the grantees
(provided they remain in the Group’s employment) at any time after the expiration of three years but within ten years from the
date of grant.
NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued) 22. Share capital (continued)
Under the rules of the Long Term Incentive Plan (L-TIP), Mourant & Co. Trustees Limited may, on the recommendation of the
remuneration committee, grant conditional awards to acquire ordinary shares in the Company. The number of shares awarded 
to a participant is based on defined maximum limits. The number of awards shares which may vest to a participant at the end of
a three year retention period will be determined by reference to the extent to which preset targets relating to the performance
of the Company over the fixed three year period are satisfied. The first conditional award was made on 21 July 2000.
No shares have been issued under the L-TIP . The L-TIP awards granted in July 2000 and June 2001 did not vest following the
failure to achieve the required performance target. There is no specified subscription price per share but the rules require a
participant to pay £1 for each allocation.
Under the Executive Co-Investment Plan, selected senior executives may elect to commute a proportion of up to 50% of their
annual bonus, net of payroll taxes, in the acquisition of “bonus award shares” in the Company. If the executive remains with the
Group for a further period of three years and retains the bonus award shares during this period, the executive may be awarded 
a number of additional “matching shares”. Such matching shares were awarded in June 2004.
23. Reserves
(a) Group
Shares held Profit and Share
in employee Profit and loss account premium Revaluation Other
trusts loss account total account reserve reserves
£m £m £m £m £m £m
At 1 April 2004 – 94.1 94.1 17.4 0.9 4.0
Prior year adjustment (3.3) 1.1 (2.2) – – –
At 1 April 2004 (restated) (3.3) 95.2 91.9 17.4 0.9 4.0
Exchange adjustment – 3.8 3.8 – – –
Shares issued 0.7 (0.7) – 0.2 – –
Charge in respect of share – (0.1) (0.1) – – –
scheme award
Loss for the financial year – (12.6) (12.6) – – –
At 31 March 2005 (2.6) 85.6 83.0 17.6 0.9 4.0
Shares held in employee trusts represents a holding of 1,177,334 (2004: 1,381,906) of the Company’s ordinary shares with a
nominal value of £294,334 (2004: £348,254). These shares were acquired by a trust in the open market using funds provided
by the Company to meet obligations under the Group’s share option schemes (see note 22). The costs of funding and
administering the schemes are charged to the profit and loss account of the Company in the period to which they relate.
Dividend income from, and voting rights of the shares held by the trust have been waived and the shares have therefore
been excluded from the earnings per share calculation (see note 10). The market value of the shares at 31 March 2005 was
£2.2 million (2004: £2.6 million).
Exchange adjustments comprise a gain of £4.6 million (2004: £4.2 million loss) arising on the retranslation of overseas net
assets, less a loss of £0.8 million (2004: £1.4 million gain) mainly due to the retranslation of foreign currency borrowings used
to finance overseas investments. 
Other reserves include the capital redemption reserve of £0.3 million (2004: £0.3 million).
The cumulative amount of goodwill on acquisitions written off directly to reserves since 1 April 1985 is £61.8 million 
(2004: £61.8 million). 
The prior year profit and loss account reserve figure has been restated to take account for the adoption of UITF 38 “Accounting
for ESOP Trusts”. As a result the shares held in employee trusts are shown as a reduction to the profit and loss account reserve
as opposed to an investment (see note 13).
Wagon plc 
Annual Report &
Accounts 2005
64/65 23. Reserves (continued)
(b) Company 
Shares held Profit Profit and Share Capital
in employee and loss loss account premium redemption
trusts account total account reserve
£m £m £m £m £m
At 1 April 2004 – 0.1 0.1 17.4 0.3
Prior year adjustment (3.3) 1.1 (2.2) – –
At 1 April 2004 (restated) (3.3) 1.2 (2.1) 17.4 0.3
Exchange adjustment – (0.1) (0.1) – –
Shares issued 0.7 (0.7) – 0.2 –
Charge in respect of share – (0.1) (0.1) – –
scheme award
Profit for the financial year – 20.9 20.9 – –
At 31 March 2005 (2.6) 21.2 18.6 17.6 0.3
Wagon plc has not presented its own profit and loss account as permitted by Section 230 of the Companies Act 1985.
The retained profit for the financial year dealt with in the financial statements of the Company amounted to £20.9 million 
(2004: £12.4 million profit). 
24. Guarantees and contingent liabilities
(a) Guarantees
The Company has guaranteed the bank overdrafts of certain subsidiary undertakings. At 31 March 2005 the liability in respect of
this was £nil (2004: £nil). 
(b) Contingent liabilities
At 31 March 2005 there were no contingent liabilities (2004: £nil).
25. Provision for pensions and similar obligations
(a) SSAP 24 disclosure
The Group operates a defined benefit pension scheme in the UK. The assets are held in separate trustee administered funds and
pension costs are assessed in accordance with the advice of independent qualified actuaries using the projected unit method.
The Group also operates a defined contribution pension scheme. The pension cost charge for the period includes contributions
payable by the Group to the scheme and amounted to £0.1 million (2004: £0.1 million).
The latest full actuarial valuation of the defined benefit scheme was at 5 April 2002. The scheme’s assets were taken at their
market value.
The main actuarial assumptions used to determine the pension costs are those related to the rate of return on the investments
and the rates of increase in earnings and pensions. These assumptions have been derived from market yields applying at the
valuation date. In particular, the investment return used relating to pre-retirement liabilities was 2.8% per annum in excess of the
assumed rate of increase in earnings, and the investment return used relating to post-retirement liabilities was 2.4% per annum
in excess of the assumed rate of pension increases. At 5 April 2002 the market value of the invested assets was £70.2 million
representing over 100% of the liability for benefits that had accrued to members, and 82.3% after allowing for expected future
increases in earnings.
The Group’s overseas subsidiaries operate pension arrangements appropriate to the circumstances prevailing within individual
countries. The annual actuarial liability is funded by insurance premiums or provisions made by the subsidiaries concerned.
The pension cost for the year is as follows: 
2005 2004
£m £m
UK 2.4 2.5
overseas (0.6) 0.6
1.8 3.1
NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued) 25. Provision for pensions and similar obligations (continued)
The regular pension cost is assessed at each actuarial valuation and applied until the next variation. The variation from regular
pension cost, which recognises the excess of assets over liabilities of the pension scheme, is spread over the average
remaining working life of remaining employees, which is 12 years.
A prepayment of £5.5 million (2004: £3.3 million) is included in debtors, this being the excess of the amount funded over the
accumulated pension cost.
At 31 March 2005 the amount due to the pension schemes amounted to £0.4 million (2004: £0.4 million).
(b) FRS 17 disclosure
Whilst the group continues to account for pension costs in accordance with Statement of Standard Accounting Practice 24
“Accounting for Pension costs” under FRS 17 “Retirement benefits” transitional disclosures are required as set out below.
A full actuarial valuation of the Wagon Retirement and Benefits Plan (“the Plan”) was carried out as at 5 April 2002.
An independent qualified actuary has updated this to 31 March 2005. The major assumptions used by the actuary are
shown below.
The major assumptions used by the actuary in this valuation were:
2005 2004 2003
Rate of increase in salaries 3.9% 3.9% 3.6%
Rate of increase in pensions in payment and deferred pensions 2.8% 2.8% 2.5%
Discount rate applied to scheme liabilities 5.4% 5.5% 5.5%
Inflation assumption 2.9% 2.9% 2.6%
The assumptions used by the actuary are the best estimates from a range of possible actuarial assumptions which, due to the
timescale covered, may not necessarily be borne out in practice.
The fair value of the scheme’s assets, which are not intended to be realised in the short term and may be subject to significant
change before they are realised, and the present value of the scheme’s liabilities, which are derived from cash flow projections
over long periods and thus inherently uncertain, were:
Long term rate Long term rate Long term rate
of return Value at of return Value at of return Value at
2005 2005 2004 2004 2003 2003
£m £m £m
Equities 7.7% 54.8 7.7% 49.1 7.6% 36.8
Bonds 4.6% 30.2 4.6% 26.3 4.6% 23.5
Other – property 5.0% 0.3 4.5% 0.4 4.0% 0.5
Total market value of the assets 85.3 75.8 60.8
Present value of scheme liabilities (116.0) (108.9) (97.7)
Deficit in the scheme (30.7) (33.1) (36.9)
Related deferred tax asset – 9.9 11.1
Net pension liability at 31 March (30.7) (23.2) (25.8)
The amount of this net pension liability would have a consequential effect on reserves.
Movement in deficit during the year:
2005 2004
£m £m
Deficit in pension scheme 1 April (33.1) (36.9)
Current service cost (0.9) (1.1)
Contributions 4.4 3.7
Other finance expense (0.9) (1.4)
Actuarial (loss)/gain (0.2) 2.6
Deficit on pension scheme at 31 March (30.7) (33.1)
Wagon plc 
Annual Report &
Accounts 2005
66/67 25. Provision for pensions and similar obligations (continued)
If FRS 17 had been fully adopted in these financial statements, the pension costs for defined benefit schemes would have been:
2005 2004
£m £m
Current service cost 0.9 1.1
Gain on curtailment – –
Total operating charge 0.9 1.1
Analysis of amount (charged)/credited to other finance income:
2005 2004
£m £m
Expected return on pension scheme assets 5.1 4.0
Interest on pension scheme liabilities (6.0) (5.4)
Net return (0.9) (1.4)
Analysis of amount recognised in statement of total recognised gains and losses:
2005 2004
£m £m
Actual return less expected return on pension scheme assets 1.9 8.4
Experience gains and losses arising on the scheme liabilities 4.1 (0.6)
Changes in assumptions underlying the present value of the pension scheme liabilities (6.2) (5.2)
Actuarial (loss)/gain recognised in STRGL (0.2) 2.6
History of experience gains and losses:
2005 2004
£m £m
Difference between expected and actual return on pension scheme assets:
– Amount 1.9 8.4
– Percentage of pension scheme assets 2.2% 11.1%
Experience gains/(losses) on pension scheme liabilities:
– Amount 4.1 (0.6)
– Percentage of the present value of the pension scheme liabilities 3.5% 0.6%
Total amount recognised in STRGL:
– Amount (0.2) 2.6
– Percentage of the present value of the pension scheme liabilities 0.2% 2.4%
If the above pension liabilities were recognised in the financial statements, the Group’s net assets and profit and loss reserve
would be as follows: 
2005 2004
Restated
£m £m
Net assets excluding pension deficit 120.7 129.4
Pension deficit (30.7) (23.2)
Net assets including pension deficit 90.0 106.2
2005 2004
Restated
£m £m
Profit and loss reserves excluding pension deficit 83.0 91.9
Pension deficit (30.7) (23.2)
Profit and loss reserve including pension deficit 52.3 68.7
NOTES TO THE FI NANCIAL ST A TEMENTS 
for the year ended 31 March 2005 (continued) 26. Notes to the cash flow statement
(a) Inflow from operating activities
2005 2004
£m £m £m £m
Operating profit 5.8 12.7
Depreciation of tangible fixed assets 22.0 23.8
Amortisation of development costs 1.3 1.0
Loss on disposal of tangible fixed assets 0.4 1.0
Goodwill amortisation and impairment 4.5 2.4
Amortisation of investment – 0.2
34.0 41.1
Decrease/(increase) in working capital:
Stocks 18.8 14.3
Debtors 18.4 (24.0)
Creditors (17.6) 13.0
19.6 3.3
(Decrease)/increase in provisions (1.1) 0.6
Cash inflow from operating activities 52.5 45.0
The cash flow from operating activites shown above includes a cash outflow in respect of exceptional items of £4.3 million
(2004: £1.9 million).
(b) Acquisitions and disposals
The effect of the disposal of businesses and subsidiary undertakings during the year resulted in a cash inflow of £0.9 million
(2004: £1.3 million outflow).
(c) Analysis of net debt
At 1 April Exchange At 31 March
2004 Cashflow movement 2005
£m £m £m £m
Cash at bank and in hand 18.8 16.2 0.9 35.9
Overdrafts (2.5) 2.2 (0.4) (0.7)
16.3 18.4 0.5 35.2
Short term deposits 6.4 (1.8) 0.2 4.8
Borrowings (excluding overdrafts) (70.9) 3.7 (2.1) (69.3)
(48.2) 20.3 (1.4) (29.3)
Wagon plc 
Annual Report &
Accounts 2005
68/69 2005 2004 2003 2002 2001
As restated As restated
Financial years ended 31 March Km Km Km Km Km
Turnover
– continuing operations 662.4 701.1 636.2 626.6 800.2
– discontinued operations – – 53.5 206.2 –
662.4 701.1 689.7 832.8 800.2
Operating profit before goodwill amortisation 
and exceptional operating items
– continuing operations 33.5 29.0 27.2 31.7 50.2
– discontinued operations – – 1.7 14.8 –
33.5 29.0 28.9 46.5 50.2
Goodwill amortisation and impairment (6.6) (3.5) (3.9) (4.1) (3.9)
Exceptional operating items (18.4) (7.2) (6.4) (3.1) (4.9)
(Loss)/ profit on disposal of operations (1.9) (3.8) 22.9 – –
Amounts written off investments (3.8) – –––
Net interest (5.0) (5.2) (7.0) (10.3) (9.5)
(Loss)/profit before taxation (2.2) 9.3 34.5 29.0 31.9
Taxation (7.4) (6.8) (6.2) (8.8) (9.5)
(Loss)/profit after taxation (9.6) 2.5 28.3 20.2 22.4
Dividends (8.9) (8.8) (9.5) (13.8) (14.0)
(Loss)/profit retained (18.5) (6.3) 18.8 6.4 8.4
Net assets employed
Fixed assets 168.1 185.4 184.6 223.6 210.3
Working capital 16.8 46.2 53.4 62.7 55.2
Operating net assets 184.9 231.6 238.0 286.3 265.5
Goodwill, intangibles and investments 61.0 66.6 68.7 69.7 71.4
Taxation and dividends (17.1) (19.0) (19.2) (20.2) (13.5)
Net debt (42.5) (72.3) (74.7) (149.5) (147.6)
Provisions (11.3) (12.8) (11.9) (11.6) (11.1)
Net assets 175.0 194.1 200.9 174.7 164.7
Exchange rates applied to £1 K K KKK
(Loss)/profit retained 1.47 1.44 1.56 1.63 1.63
Net assets 1.45 1.50 1.45 1.63 1.61
FINANCIAL SUMMARY IN EURO
for the year ended 31 March 2005  As restated As restated
2005 2004 2003 2002 2001
Financial years ended 31 March £m £m £m £m £m
Turnover
– continuing operations 450.6 486.9 408.9 384.4 368.0
– discontinued operations – – 34.4 126.5 123.2
450.6 486.9 443.3 510.9 491.2
Operating profit before goodwill amortisation 
and exceptional operating items
– continuing operations 22.8 20.1 17.5 19.4 21.4
– discontinued operations – – 1.1 9.1 9.4
22.8 20.1 18.6 28.5 30.8
Goodwill amortisation and impairment (4.5) (2.4) (2.5) (2.5) (2.4)
Exceptional operating items (12.5) (5.0) (4.1) (1.9) (3.0)
(Loss)/profit on disposal of operations (1.3) (2.6) 14.7 – –
Amounts written off investments (2.6) – –––
Net interest (3.4) (3.6) (4.5) (6.3) (5.8)
(Loss)/profit before taxation (1.5) 6.5 22.2 17.8 19.6
Taxation (5.0) (4.7) (4.0) (5.4) (5.8)
(Loss)/profit after taxation (6.5) 1.8 18.2 12.4 13.8
Dividends (6.1) (6.1) (6.1) (8.5) (8.6)
(Loss)/profit retained (12.6) (4.3) 12.1 3.9 5.2
Net assets employed
Fixed assets 115.9 123.6 127.4 137.0 130.8
Working capital 11.6 30.8 36.9 38.4 34.3
Operating net assets 127.5 154.4 164.3 175.4 165.1
Goodwill, intangibles and investments 42.1 44.4 47.4 42.7 44.4
Taxation and dividends (11.8) (12.7) (13.3) (12.4) (8.5)
Net debt (29.3) (48.2) (51.6) (91.6) (91.8)
Provisions (7.8) (8.5) (8.2) (7.1) (6.9)
Net assets 120.7 129.4 138.6 107.0 102.3
Ordinary shares 13.2 13.2 13.1 13.1 13.1
Preference shares 2.0 2.0 2.0 2.0 2.0
Reserves 105.5 114.2 123.5 91.9 87.2
120.7 129.4 138.6 107.0 102.3
Underlying profit before taxation 19.4 16.5 13.0 13.1 15.6
Ordinary dividend per share 9.0p 9.0p 9.0p 13.5p 13.5p
Earnings per share
– basic (15.5p) 0.5p 32.9p 21.3p 23.7p
– diluted (15.5p) 0.4p 32.1p 21.3p 23.5p
– underlying 23.7p 20.1p 15.7p 16.1p 19.3p
FIVE YEAR SU MMARY
Wagon plc 
Annual Report &
Accounts 2005
70/71 NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the
eighty-seventh Annual General Meeting
of Wagon plc will be held at Mallory
Court Hotel, Harbury Lane, 
Bishops Tachbrook, Leamington Spa,
Warwickshire CV33 9QB on 28 July
2005 at 11.00 am for the
following purposes:
Ordinary business
Resolution 1
To receive the financial statements for
the year ended 31 March 2005, together
with the reports of the Directors and
auditors thereon.
Resolution 2
To approve the remuneration report set
out on pages 30 to 37 of the Company’s
annual report for the year ended 31
March 2005.
Resolution 3
To declare a final dividend of 5 pence per
ordinary share payable on 6 September
2005 to shareholders on the register on
5 August 2005.
Resolution 4
To elect as a Director Mr Richard Cotton
who has been appointed since the date
of the last Annual General Meeting.
Resolution 5
To re-elect as a Director Mr John
Rennocks who retires by rotation.
Resolution 6
To re-elect as a Director Ms Sue Lyons
who retires by rotation.
Resolution 7
To reappoint KPMG Audit plc as auditors
to hold office until the conclusion of the
next general meeting at which audited
accounts are laid before the Company
and to authorise the Directors to
determine their remuneration.
Special business
To consider and, if thought fit,
pass the following resolution as
an ordinary resolution:
Resolution 8
That, for the purposes of section 80 of
the Companies Act 1985, the Directors
be and are hereby unconditionally and
generally authorised to exercise all
powers of the Company to allot relevant
securities of the Company up to an
aggregate nominal amount of
£1,805,798 provided that:
(a) this authority shall expire at the
conclusion of the Annual General
Meeting of the Company to be held in
2006 or fifteen months from the date
of the passing of this resolution,
whichever shall first occur, save that
the Company may before such expiry
make any offers or agreements
which would or might require
relevant securities to be allotted after
such expiry and the Directors may
allot relevant securities in pursuance
of any such offers or agreements as if
this authority had not expired; and
(b) this authority shall replace the
authority conferred in general meeting
on 27 July 2004 which authority is
hereby revoked (save to the extent
that it has been exercised or agreed
to be exercised prior to the taking
effect of this resolution). 
To consider and, if thought fit, pass
the following resolutions as
special resolutions:
Resolution 9
That, subject to and conditional upon
resolution 8 above being duly passed,
the Directors be and are hereby
empowered, pursuant to section 95(1)
of the Companies Act 1985 (and in
substitution for any existing authority
conferred on the Directors under the
said section 95(1) which authority is,
save to the extent that it has already
been exercised or agreed to be
exercised prior to the taking effect of
this resolution, hereby revoked), to allot
equity securities (as defined in section
94 of that Act) for cash pursuant to the
authority given by resolution 9 above, as
if section 89(1) of that Act did not apply
to such allotment, provided that this
power shall be limited to:
(i) the allotment of equity securities in
connection with a rights issue in
favour of the holders of ordinary
shares and convertible preference
shares where the equity securities
attributable to the interests of all such
holders are proportionate (as nearly
as may be) to the respective numbers
of ordinary shares held by them or, in
the case of convertible preference
shares, which would be held by them
if the conversion rights had been
exercisable and exercised in full on
the record date for such rights issue
(but including, in connection with any
such issue, the making of such
arrangements as the Directors may
deem necessary or expedient to deal
with problems under the laws of any
territory or in connection with
fractional entitlements or shares
represented by depository receipts
or otherwise howsoever); and 
(ii) the allotment (otherwise than
pursuant to subparagraph (i) above)
of equity securities up to an
aggregate nominal amount of
£659,710 representing 5% of the
issued ordinary share capital of the
Company and shall expire at the
conclusion of the Annual General
Meeting of the Company to be held in
2006 or fifteen months from the date
of this resolution, whichever shall first
occur, save that the Company may
before such expiry make any offers
or agreements which would or might
require equity securities to be allotted
after such expiry and the Directors
may allot equity securities in
pursuance of such offers or
agreements as if the power
conferred hereby had not expired. Wagon plc 
Annual Report &
Accounts 2005
Resolution 10
That, the Directors be and are hereby
generally and unconditionally authorised
for the purposes of section 166 of the
Companies Act 1985 (the “Act”) to
purchase the Company’s own fully paid
ordinary shares of 25p each by way of
one or more market purchases (within
the meaning of section 163(3) of the
Act) provided that:
(a) the maximum number of ordinary
shares which may be purchased is
2,638,841;
(b) the minimum price (exclusive of
expenses) which may be paid for any
ordinary share is 25p;
(c) the maximum price (exclusive of
expenses) which may be paid for any
ordinary share is no more than five
per cent above the average of the
middle market quotations of an
ordinary share of the Company as
published in the London Stock
Exchange Daily Official List for the
five business days immediately
before the day on which the Directors
agree to purchase such ordinary
share; and
(d) this authority will expire at the
conclusion of the next Annual
General Meeting of the Company to
be held in 2006 or, if earlier, fifteen
months from the date of the passing
of this resolution, unless previously
renewed, varied or revoked by the
Company in general meeting, save
that the Company may, before such
authority expires agree or make an
offer to purchase ordinary shares
where the purchase will or may be
completed, either fully or partly, after
this authority expires and may make
a purchase of ordinary shares
pursuant to any such agreement as
if the power conferred hereby had
not expired.
Resolution 11
That:
(a) The Directors be and they hereby
are authorised to appropriate
distributable profits of the Company
(as shown in the audited accounts of
the Company made up to 31 March
2004) to the payment of the interim
dividend on the Company’s ordinary
shares of 4.0 pence per share (the
“Interim Dividend”) paid on 15
February 2005 to shareholders on the
register at the 14 January 2005 (“the
Record Date”);
(b) Any and all claims which the
Company may have in respect of the
payment of the said Interim Dividend
against its ordinary shareholders who
appeared on the register on the
Record Date be released and a deed
of release in favour of such
shareholders be entered into by the
Company in the form of the deed
produced to this Meeting and signed
by the Chairman for the purpose
of identification;
(c) Any distribution involved in the giving
of such release in relation to the
Interim Dividend be made out of the
profits appropriated to the Interim
Dividend as aforesaid by reference to
a record date identical to the Record
Date; and
(d) Any and all claims which the
Company may have against its
Directors arising out of the payment
of the Interim Dividend be released
and that a deed of release in favour of
the Directors be entered into by the
Company in the form of the deed
produced to this Meeting and signed
by the Chairman for the purpose
of identification.
By order of the Board
Jonathan Jowett
Company Secretary
15 June 2005
Registered office:
1 Kingmaker Court
Warwick Technology Park
Warwick
CV34 6WG
Notes:
1 A member entitled to attend and vote
is entitled to appoint one or more
proxies to attend and, on a poll, vote
instead of him. The deposit of a form
of proxy shall not preclude a member
from attending and voting in person at
the meeting or at any adjournment
thereof.
2 A proxy need not be a member of
the Company.
3 A white form of proxy is enclosed for
use in respect of the meeting.
4 Forms of proxy should be lodged at
the address shown thereon not less
than 48 hours before the meeting.
Proxy forms not so lodged will not
be effective.
5 Copies of Directors’ service
agreements will be available for
inspection at the registered office of
the Company during normal business
hours on any weekday (except
Saturdays, Sundays and public
holidays) until the conclusion of the
Annual General Meeting and at the
place at which the Annual General
Meeting is held for at least 15
minutes prior to and during
the meeting.
6 This notice is being sent to all
shareholders but only holders of
ordinary shares are entitled to attend
and vote at the meeting.
72/73 LETTER TO PREFEREN CE
SHAREHOLDERS
To the holders of 7.25p (net) Convertible
Participating Preference shares of 10p
each (“preference shares”) of Wagon
plc, (“the Company”).
Extraordinary general meeting
Dear Sir or Madam
I am pleased to send you details of a
separate class meeting of the holders of
the Company’s preference shares which
will be held on 28 July 2005 at Mallory
Court Hotel, Harbury Lane, Bishops
Tachbrook, Leamington Spa,
Warwickshire CV33 9QB. The meeting
will start at 11.15 am or as soon thereafter
as the Annual General Meeting of the
Company convened for the same day at
the same place at 11.00 am has been
concluded or adjourned. The formal
notice of the separate class meeting
of preference shareholders is set out
on page 75.
The business to be considered at
the meeting
The Company’s articles of association
require resolution 10 set out in the notice
convening the Annual General Meeting
of the Company dated 15 June 2005 to
be approved by the preference
shareholders at a separate class
meeting. Resolution 10 is a resolution
seeking authority for the Company to
purchase its own shares for cash and is
explained in more detail on page 28 of
the Company’s annual report under
“Purchase of own shares for cash”. This
is the only item to be considered at the
class meeting and will be proposed as an
extraordinary resolution. This means
that, in order to be passed, at least 75%
of the votes cast must be in favour.
Attending and voting
If you hold preference shares in the
Company, you are entitled to come to the
class meeting and vote on the resolution.
If you cannot come to the meeting you
can use the blue proxy form enclosed with
this letter to nominate someone else to
come to the meeting and vote for you, or
you can nominate me to vote for you. Y our
proxy does not have to be a member of
the Company. If you want to appoint a
proxy for the class meeting, you need to
send back the blue proxy form 48 hours
before the date of the meeting. If you
complete and return the blue proxy form,
you can still come to the class meeting
and vote instead of your proxy.
Recommendation
Y our Directors believe that the proposed
resolution to be considered at the class
meeting is in the best interests of
Wagon and its shareholders as a whole.
Y our Directors unanimously recommend
that you vote in favour of the
proposed resolution.
Y ours faithfully,
David Kendall
Chairman
15 June 2005 NOTICE OF EXTRA ORDI NARY
GENERAL MEETING
Wagon plc 
Annual Report &
Accounts 2005
NOTICE IS HEREBY GIVEN that a
separate class meeting of the holders of
the 7.25p (net) Convertible Participating
Preference shares of 10p each
(“preference shares”) in the capital of
Wagon plc (“the Company”) will be held
at Mallory Court Hotel, Harbury Lane,
Bishops Tachbrook, Leamington Spa,
Warwickshire CV33 9QB on 28 July
2005 at 1 1.15 am or as soon thereafter
as the Annual General Meeting of the
Company, convened for the same day at
the same place at 1 1.00, shall have been
concluded or adjourned, to consider
and, if thought fit, pass the following
resolution as an extraordinary resolution:
Extraordinary resolution
That the holders of the 7 .25p (net)
convertible participating preference
shares of 10p each in the capital of the
Company hereby sanction the passing
and implementation of resolution 10 set
out in the notice convening the Annual
General Meeting of the Company dated
15 June 2005 and each and every
contract to purchase shares entered
into within the terms of the authority
thereby conferred.
By order of the Board
Jonathan Jowett
Company Secretary
15 June 2005
Registered office:
1 Kingmaker Court
Warwick Technology Park
Warwick
CV34 6WG 
Notes:
1 A member entitled to attend and vote
is entitled to appoint one or more
proxies to attend and, on a poll, vote
instead of him. The deposit of a form
of proxy will not preclude a member
from attending and voting in person
at the meeting or at any
adjournment thereof. 
2 A proxy need not be a member of
the Company.
3 A blue form of proxy is enclosed 
for use in respect of the meeting.
4 Forms of proxy should be lodged at
the address shown thereon not less
than 48 hours before the meeting.
Proxy forms not so lodged will not
be effective. 
5 This notice is being sent to all
shareholders but only holders of
7.25p (net) convertible participating
preference shares of 10p each in the
capital of Wagon plc are entitled to
attend and vote at the meeting.
Preference Shareholders:
Extraordinary General Meeting
The Company’s articles of association
require that resolution 10 set out in the
notice convening the Annual General
Meeting of the Company dated 15 June
2005 be approved by the preference
shareholders at a separate class
meeting. Resolution 10 is a resolution
seeking authority for the Company to
purchase its own shares for cash and 
is explained in more detail on page 28 
of the Company’s annual report under
“Purchase of own shares for cash”. This
is the only item to be considered at the
class meeting and will be proposed as 
an extraordinary resolution. This means
that, in order to be passed, at least 75%
of the votes cast must be in favour.
Attending and voting
If you hold preference shares in the
Company, you are entitled to come 
to the class meeting and vote on the
resolution. If you cannot come to the
meeting you can use the blue proxy form
enclosed with this letter to nominate
someone else to come to the meeting
and vote for you, or you can nominate
me to vote for you. Y our proxy does not
have to be a member of the Company. 
If you want to appoint a proxy for the
class meeting, you need to send back
the blue proxy form by 11.15 am on
Tuesday 26 July 2005. If you complete
and return the blue proxy form, you can
still come to the class meeting and vote
instead of your proxy.
Recommendation
Y our Directors believe that the proposed
resolution to be considered at the class
meeting is in the best interests of Wagon
and its shareholders as a whole. Y our
Directors unanimously recommend
that you vote in favour of the
proposed resolution.
74/75 SHAREHOLDER INFORMA TION
Registered office
1 Kingmaker Court
Warwick Technology Park,
Warwick, CV34 6WG
Registered in England No. 150042
Telephone +44(0)1926 475000
Facsimile +44(0)1926 475050
http://www.wagonplc.com
Secretary
Jonathan Jowett
Auditor
KPMG Audit plc
Chartered Accountants
2 Cornwall Street, 
Birmingham, B3 2DL
Registrar
Lloyds TSB Registrars
The Causeway, Worthing
West Sussex, BN99 6DA
Stockbroker
Hoare Govett Limited
250 Bishopsgate, London, EC2M 4AA
Financial calendar
Announcement of full year results 7 June 2005
Annual general meeting 28 July 2005
Ordinary shares quoted
‘ex final dividend’ 3 August 2005
Ordinary shares final dividend paid 6 September 2005
Announcement of interim results 1 December 2005
Ordinary shares interim
dividend paid 17 February 2006
Preference dividend half yearly 15 June, 15 December
Capital gains
The market value of the Company’s 
ordinary shares on 31 March 1982 as 
calculated for capital gains tax purposes 
after adjustment for the rights issue in 
1992 was 65p per share. OPERA TI N G LOCA TIONS  
Belgium
Fleurus Plant
Avenue de Spirou 32, 6220 Fleurus
Telephone 00.32.71.82.28.11
Czech Republic
Bêlá Plant
Mladoboleslavská 692, 
294 21 Belá pod Bezdeze
Telephone +420 326 709 111
France
Beaucourt Plant
98 rue Pierre Beucler, 90500 Beaucourt
Telephone +33 (0) 3 84 58 28 00
Bessines Plant 
La Croix du Breuil
87250 Bessines sur Gartempe
Telephone +33 (0) 5 55 60 90 70
Bressuire Plant
Parc d’Activités du Moulin Jacquet 
Zone no 2, 5-7 Rue du Moulin Jacquet,
BP 59, 79302 Bressuire Cedex
Telephone +33 (0) 5 49 74 06 22
Fontaine Plant
ZA de l’Aéroparc, 90150 Fontaine
Telephone +33 (0) 3 84 58 53 40
Gérardmer Plant
48 Boulevard de la Jamagne,
88402 Gérardmer
Telephone +33 (0) 3 29 60 33 00
La Souterraine Plant
ZI Route de Versillat, 23300
La Souterraine
Telephone +33 (0) 5 55 89 49 49
Poissy
Technoparc
1 rue Charles Edouard Jeanneret,
78306 Poissy
Telephone +33 (0) 1 39 22 33 00
Sainte-Gauburge Plant
Route de Gacé
61370 Sainte-Gauburge
Telephone +33 (0) 2 33 84 22 80
Germany
Waldaschaff Plant
Postfach 5, Fabrikstraße 6,
63857 Waldaschaff
Telephone +49 6095-94 00
Italy
Fiano plant
Srl Socio Unico, Via Agnelli n° 3,
10070 Fiano, Torino
Telephone +39 011 92 48 111
United Kingdom
Brownhills Plant
Pelsall Road, Brownhills, 
Walsall WS8 7HP
Telephone +44 (0) 1543 375100
Tyseley Plant
Saville House, Redfern Park Way,
Tyseley, Birmingham B11 2BF
Telephone +44 (0) 121 706 0330
Wagon plc 
1 Kingmaker Court,
Warwick Technology Park
Warwick CV34 6WG
Telephone +44 (0) 1926 475000
Wantage Plant
East Challow, Wantage,
Oxfordshire OX12 9SY
Telephone +44 (0) 1235 770770
United States of America 
North American Operations Plant
25900 West Eleven Mile Road,
Southfield MI. 48034
Telephone +1 (248) 262 2020
Wixom Plant
28025 Oakland Oaks Ct. 
Wixom MI. 48393
Telephone +1 (248) 262 2020
76/77 W agon plc 
Annual Report &
Accounts 2005 Wagon plc 
1 Kingmaker Court
Warwick T echnology Park
Warwick, CV34 6WG
United Kingdom
T elephone +44 (0)1926 475000
www.wagonplc.com