FKI plc
Falcon Works 
PO Box 771 3
Meadow Lane 
Loughborough 
Leicestershire
LE11 1ZF 
T +44 (0)1 509 61 2837
F +44 (0)1 509 612339
fki.co.uk
FKI plc Annual Report 2005
FKI plc
Annual report 2005
Leading brands,
World-class technology Financial highlights
£1 ,290m 
Turnover
(2004: £1,345m)
£95.8m 
Underlying operating profit*
(2004 restated: £96.5m)
£65.7m 
Operating profit
(2004 restated: £32.5m)
£72.0m 
Net operating cash flow
(2004: £105.0m)
*Before exceptional items and goodwill amortisation
£35 1 m 
Net debt
(2004: £349m)
9.0p 
Adjusted earnings
per share* (2004 restated: 8.6p)
4.5p 
Dividend per share
(2004: 4.5p)
ifc Financial highlights
01 Group objective
02 Group at a glance
04 Chairman’s statement
06 Chief Executive’s review
08 FKI Logistex
10 Lifting Products and Services
12 Hardware
14 Energy T echnology
16 Corporate social responsibility review
22 Finance Director’s review
28 Board of Directors
29 Corporate governance
31 Directors’ report
33 Remuneration report
42 Independent auditors’ report
43 Consolidated profit and loss account
44 Consolidated balance sheet
45 Company balance sheet
46 Consolidated cash flow statement
47 Consolidated statement of total 
recognised gains and losses
47 Consolidated reconciliation of movements 
in equity shareholders’ funds
48 Notes to the financial statements
77 Five year record
77 Key dates
78 Principal subsidiary undertakings
79 Corporate information
80 Shareholders’ information Designed and produced by Radley Y eldar (London) The Group
FKI plc is a major international 
diversified engineering group quoted
on the London Stock Exchange. 
The Group is driven by value-based
metrics, principally return on invested
capital, and will actively manage 
the strategy and performance 
of its businesses.
The Group’s objective is to maximise
the value of the portfolio as a whole
and to deliver growth in shareholder
value through increased focus on 
businesses that have superior and 
sustainable market positions in 
sizeable, attractive markets, leading
brands and world-class technology. FKI Logistex
A major worldwide provider 
of automated material 
handling systems.
Lifting Products and Services
One of the top three in the world
for wire and wire rope. A world
leader in chains, fittings and
lifting products. World number
one in large shears.
Markets
Airport baggage handling
Freight and parcel
Warehouse/retail/distribution
Manufacturing
Products and services
Markets
Construction
Bridges
Stadiums
Harbours
Distribution
Oil and gas
Mining
Products and services
High-speed sorters
Tilt-tray, cross-belt and 
sliding-shoe sorters
Palletisers
High- and medium-speed 
palletisers, Robotic low-speed 
palletisers
Conveyors
Full range of conveyors for 
carton-handling, pallet handling 
and airport baggage handling 
applications
Automated storage 
and retrieval systems
Automated cranes and 
mini-load systems
Picking technologies
Vertical and horizontal carousels
Pick-to-light systems, Put-to-light
systems, Voice picking
Software
Full range of software services 
from top-level warehouse 
control systems and Sort 
Allocation Computer systems 
for airports application of RFID
technology, through to advanced
machine controls
Application knowledge
Solution design, simulation, 
layouts
After-sales and services
24x7 online support, full on-site
maintenance, spare parts, 
upgrades
Lifting products 
Wire and wire rope; fittings for 
wire rope and chains; chains; 
slings; hoists; forged fittings 
and distribution 
Compaction 
Balers and shears for ferrous 
and non-ferrous scrap
£348.3m 
2005 Turnover
Proportion of group continuing turnover 28.8% 
£367 .9m 
2005 Turnover
Proportion of group continuing turnover 30.5% 
Major Businesses Major Businesses Other Businesses
Acco
Parsons
Harris
Welland Hardware
US number one in window
hardware and storm and 
screen door hardware. 
US number one in mechanisms 
for ergonomic solutions.
Energy T echnology
World number one independent
supplier of turbogenerators 
and leading supplier of 
other electricity generating
machinery and power
infrastructure equipment.
Markets
Window and door manufacturers
DIY stores
Office furniture
Products and services
Markets
Power generators
Oil and gas industry
Rail industry
Products and services
Window and door fittings 
Handles, hinges, fittings and 
locking mechanisms for windows;
screen, storm and other doors
Castors 
Rigid and swivel mounted castors
for a complete range of loads 
and tasks
Ergonomic equipment 
Bracket and counter balance 
systems for manoeuvring office 
and computer equipment
Furniture and retail hardware 
Vast range of furniture 
trim hardware
Turbogenerators
Other rotating machines
Medium and low voltage 
generators; high, medium and low
voltage electric motors; industrial
drives, control equipment, frequency
changers, engine and vehicle
dynamometers
Switchgear 
Indoor switchgear, outdoor 
circuit breakers, ring main units, 
pole mounted reclosers and DC
traction switchgear
Transformers 
Power, system and distribution
transformers and on-load tap
changers
Traction 
Rail locomotive manufacture 
and refurbishment
Measurement and control 
Measurement and control devices
and data acquisition systems
£1 99.7m 
2005 Turnover
Proportion of group continuing turnover 16.5% 
£292. 1 m 
2005 Turnover
Proportion of group continuing turnover 24.2% 
Major Businesses Other Businesses
Bristol Babcock
FKI Switchgear
Brush Traction
Froude
Marelli
FKI Transformers
Major Businesses Other Businesses
Faultless
Rhombus
Weber-Knapp
Belwith
Keeler 04 FKI plc 
Chairman’s statement
Gordon Page
Chairman 05 FKI plc Chairman’s statement
This is my first report to shareholders since my appointment as
Chairman. As you may know, I replaced Keith Orrell-Jones who
retired from the Board in September 2004 after five years as
Chairman. I know you will join me in thanking Keith for his
contribution and wishing him a long and happy retirement.
The general economic environment during the period was more stable than
in the previous few years although significant changes in steel costs, the
weakness of the US dollar and rising US dollar interest rates all impacted
the financial results.
Overall turnover and operating profit remained relatively flat year on year. 
At constant currency, however, underlying operating profit saw growth of 
5.0% over the period. Net debt at the end of the period was £351 million
(2004: £349 million), which is a reduction of £26 million from 30 September
2004. Encouragingly this movement reflected continued strong cash flow
from ongoing operations, offset by the impact of rising steel costs on
inventories and the cash cost of discontinued operations. More detail 
is given in the operating and financial reviews.
Significant progress was made on the strategy outlined last year with all
businesses identified for closure either closed or sold with a cash saving of 
£3 million against the originally identified costs. During the year it was
announced that the Company would be withdrawing from the wind 
turbine business at an exceptional cost of £90 million and a cash cost 
of £20 million. 
A number of other business disposals were also completed, some just after
the year end, which included the Group’s exit from the Lifting Products
distribution activity. Also subsequent to the year end two small acquisitions
were completed to further strengthen product and geographical coverage
in Lifting Products and Services. Further realignment of the business
portfolio is expected during the current year.
Reflecting the Group’s underlying performance, the Board has proposed 
to pay a final dividend of 3.0p per share, bringing the total for the year 
to 4.5p per share, the same level as last year.
Further changes to Corporate Governance procedures were implemented
during the year to comply with best practice as set out in the revised
Combined Code with which the Group is compliant. 
As noted in last year’s Remuneration Report, a comprehensive review of 
the policies and mechanisms of executive remuneration has been
undertaken and a number of changes are being proposed. These
proposals, which have been discussed extensively with major shareholders
and governance bodies, are outlined in the Remuneration Report and the
AGM circular. The Board believes the changes will allow the Company to
attract, retain and incentivise executives more effectively to deliver
performance in accordance with the Group’s strategic business objectives.
Y our Board looks forward to continuing the good progress already achieved
in developing the portfolio of businesses in the Group. Demand in a number
of markets which the Group serves is predicted to remain firm during
2005/06 and further improvement in the performance of our ongoing
operations is planned. On behalf of the Board, I would like to thank all 
our employees for their efforts and commitment during a period of
considerable change across the Group.
Gordon Page
Chairman
“The weakness of the US dollar had a significant
impact on the financial results for the year. 
At constant currency, however, operating profits
grew and cash flow from ongoing business
remained strong. The Board expects further
progress in the coming year. ” Financial results
Three factors, predominantly outside the Group’s control, had a significant
impact on the financial results for the year.
The translation impact of a further weakening of the US dollar reduced
turnover and underlying operating profits compared to the previous year by 
£54.6 million and £5.5 million respectively. Exceptionally large steel 
price increases had a material effect particularly on Lifting Products and
Services. Although these increases were largely passed on to customers
and hence did not significantly affect profits, both turnover and working
capital levels were inflated. The latter resulted in a negative cash flow of 
c. £15 million. Lastly, increased US dollar interest rates increased 
borrowing costs by £0.7 million during the period.
In November 2004 the Group announced its proposal to withdraw 
from the DeWind turbine business it acquired in 2002. At the time of the
strategic review in January 2004 the business was described as a high risk
but potentially high reward venture. Unfortunately market developments
further weakened DeWind’s position and delayed or impaired its growth
opportunities. The material cash commitment required in product
development and inventories could not be justified by the risk profile 
and potential returns and a decision was taken to exit the business.
The exceptional costs of withdrawal are estimated at £90 million of which
£44.0 million represents the write-off of goodwill. The cash cost of exit is
currently estimated at £20 million and will be spread over several years.
Turnover from total operations declined by 4.1% whilst turnover 
from continuing operations was relatively flat at £1,208 million. 
Underlying operating profit was £95.8 million, down from £96.5 million 
the previous year. At constant currency, however, underlying operating
profit grew by 5.0%.
The Lifting Products and Services group produced good profit growth from
strong demand in oil and gas and mining industries. The group was able 
to pass on significant steel price increases to customers but it did impact
the value of working capital. Energy T echnology also improved profitability,
with greater demand for generator product more than offsetting a slow
period for low voltage switchgear. The Hardware group continued to benefit
from strong US housing activity but was impacted by the translation of US
dollar and the move to a sourcing and distribution business model for
general hardware. As anticipated, this reduced operating margins, but
reduced capital employed such that return on net assets remained strong.
Logistex saw improvements in order intake throughout the year, which
should benefit turnover in 2005/06. Despite a further drop in turnover in the
year, operating profits were up slightly.
After goodwill amortisation of £26.7 million, net exceptional charges of
£105.3 million and net interest payable of £23.6 million, the loss before tax
was £61.6 million and after tax adjusted earnings per share were 9.0p.
The Group maintained its emphasis on cash flow during the period and
although no reduction was achieved in net debt, cash generation from
ongoing businesses remained strong. This position was offset, however, 
by non recurring items such as the cost of finalising business closure plans,
the withdrawal from the wind turbine business and the working capital
impact of steel cost increases.
06 FKI plc 
Chief Executive’s review
Paul Heiden
Chief Executive 07 FKI plc Chief Executive’s review
Previously announced exceptional costs and the negative cash flow from
discontinued operations more than offset the inflow from operations,
business and property disposals. The cash consumption of DeWind was, 
as expected, exacerbated by the closure announcement and accounted 
for an outflow of £25 million during the period. 
The return on invested capital* of the Group for the year was 7 .7%
compared with 6.7% in the previous period.
All banking covenants were met during the year. The Group did, however,
lose its investment grade rating from one of its two rating agencies in
March. This change will not impact the cost of current debt financing 
nor will it alter the Group’s strategy, its management of operations or 
its continued commitment to reduce net debt and finance costs.
Full details of the results are given in the operating and financial reviews.
Group management
The changes made to the management structure at the beginning of last
year have achieved the objectives of shortening lines of communication,
improving the cost-effectiveness of corporate functions and broadening 
the skill base of the senior executive team.
A Group Executive of nine, including managers responsible for the five
major businesses, meets four times a year to discuss material cross-
business issues such as employee development, health and safety, risk
management, corporate strategy and business environment and
performance. The Group Executive also provides a forum for the facilitation
of operational best practice across the Group.
In the coming year the Group will further strengthen its process driven
operational improvement activity by extending the activities of the existing
engineering, procurement and risk process councils and introducing lean,
programme management and customer care process councils. 
Businesses are always encouraged to improve their management style 
and structure to best fit customer needs and requirements. T o this end 
both Bridon and FKI Logistex have substantially reorganised the way they 
face their markets to provide improved focus and support to their various
customer segments.
Strategy
The Group continues to follow the strategy set out in January 2004. 
Various actions have been achieved during the year:
(i) closure of loss making businesses – eight businesses were earmarked
for closure. During the year five were closed and two were sold. 
The process was completed just after the year-end with the sale 
of Laurence Scott. 
(ii) sale of six businesses during the year to March 2005 with a further two
business sales completed in April 2005. Principal disposals were Kosan
Crisplant LPG and the withdrawal from lifting product distribution by the
sale of the majority of the Certex businesses.
(iii) commencement of the progressive withdrawal from the wind turbine
business.
(iv) purchase, subsequent to the year end, of two small companies, 
IP Clamps and Tianjin Golik No 1 Steel Wire Rope Company Limited. 
The former improves the product range of Crosby while the latter gives
Bridon access to the growing Chinese elevator and crane rope markets.
(v) opening of an FKI representative office with an in-country executive in
Shanghai, China. This will support the development of many individual
business activities in the Chinese market for both selling and sourcing.
The current year should see further developments in the reshaping of the
business portfolio as the Group continues to concentrate its focus on the
major businesses.
Outlook
There are a number of macroeconomic factors which could impact 
the performance of the Group in 2005/06, notably foreign exchange rates,
interest rates, commodity and oil & gas prices. Notwithstanding these 
potential uncertainties, opportunities for a number of Group activities 
look encouraging.
The activity levels in the Oil & Gas sector are strong and are forecast by
most commentators to remain so for the coming year. This should provide 
a good base for Lifting Products and Services to have another growth year
in 2005/06. Order intake for Energy T echnology, specifically generators,
supports the expectation of improved deliveries and profitability for the
coming year. Independent forecasts predict a reduction in new housing
starts in North America in 2005, however the first quarter of 2005 remained
stable and order levels for Truth window hardware were strong. Current
forecasts for general hardware demand remain relatively flat. Logistex has
seen a recovery in order intake during the last year, which should result in
increased sales in 2005/06. This together with the benefits of cost reduction
activity and more effective project management should result in improved
performance in the year.
Paul Heiden
Chief Executive
*The return on invested capital is calculated on the profit after tax before exceptional items, goodwill
amortisation, interest and other net financial charges, divided by the average of opening and closing
shareholder equity, plus net debt, and plus the net pension liability.
“Notwithstanding these potential
uncertainties, opportunities for a
number of Group activities look
encouraging. ”  FKI Logistex
£348.3m
2005 Turnover
1
AIPC Robotic Palletiser
Arizona 
A robotic palletising system installed at
American Italian Pasta Co in T olleson, 
Arizona. This facility was awarded the 2003
New Plant of the Y ear Award by Food
Engineering magazine.
2
Sorting system for Swedish Post
Stockholm
Unloaded parcels on their way to the 
sorting system at Swedish Post in Stockholm.
The system is designed to handle 32,000
parcels per hour, using two S-3000M tilt-tray
sorters together with 20 infeed lines and 
106 destinations.
3
Data capture for Danish Post
Denmark
OCR (Optical Character Recognition) and
VCS (Video Coding Systems) technology is
used for automation of data capture and
optimisation of capacity at Danish Post.
1 2
3 09 FKI plc FKI Logistex
The turnover of FKI Logistex in the year was £348.3 million
(2004: £372.7 million). The reduction in turnover was due to a
£5.3 million reduction in trading and a £19.1 million adverse
currency translation effect. Order intake during the year
amounted to £370.1 million and was 13% up on the previous
year, resulting in a closing order book of £216.4 million 
(2004: £194.6 million). This is the first year since FKI Logistex
was formed where order intake has increased year-on-year.
Underlying operating profit of £9.4 million (2004 restated : £9.0 million) 
was reduced by £0.6 million as a result of currency translation but reflected
a margin of 2.7% compared with 2.4% last year. 
This year has seen a period of considerable change to the branding and
structure of the group.
To improve customer focus, product development and project execution 
a number of market facing divisions have been formed from the numerous
FKI Logistex trading units, each with responsibility for one particular market
segment, e.g. US Airports, Post and Parcel. Furthermore, all divisions 
now trade under a common brand of FKI Logistex. Procurement and
manufacturing operations are also being consolidated to concentrate skills
and expertise and improve efficiencies. As a consequence, a number of
smaller operational and sales facilities have been downsized or closed in 
the US, UK and Europe.
Activity levels in US airports remains buoyant as the FAA releases funds for
the completion of the hold-baggage-screening projects required under new
security regulations. Order intake increased from the previous year and
major orders were received for Atlanta, Chicago and Las Vegas airports. 
Activity levels in the post and parcel sector increased substantially, with
significant orders from DHL for sortation equipment for their major North
American investment programme. Encouragingly, an order from Fedex
Ground was also secured, the first order from this important customer for
several years. Considerable progress has also been made with USPS, with 
a major order being secured for their facility at JFK Airport in New Y ork 
and further orders won on their new Integrated Despatch and Receipt
development programme.
The North American Warehouse and Distribution market continued to 
show no improvement and order intake for this division declined by 15%
with only significant orders being received from T arget and Barnes & Noble.
The Manufacturing Systems division continued to be affected by the
generally low levels of factory utilisation, although high speed palletiser
order volumes with major bottling facilities for Anheuser Busch and Pepsi
bottling were maintained.
The UK had a record order intake, with major contracts being secured from
B&Q, Coca Cola, Helga and Kimberley Clark. Elsewhere in Europe activity
remained depressed.
The year saw the completion of two landmark contracts, at Munich 
airport, which now has the world’s most advanced baggage handling
system, and at the European distribution centre for a major fashion retailer.
This distribution centre is one of the most technologically advanced in
Europe. The installation has the capability of sorting over 30,000 items 
an hour and incorporates a system for hanging garments warehousing 
and distribution.
The reshaping of the Group has been well received, both by customers and
employees. The emphasis on process improvements, the continuing
investment in product development and the 13% increase in order intake
trend over the year leaves the division still with much to do but, with a more
positive outlook for the new year.
“The reshaping of the Group has
been well received, both by
customers and employees. ”  Lifting Products 
and Services
£367 .9m
2005 Turnover
1 2
3
1
Deepwater Construction Vessel Balder
Heerema Marine Contractors’ Deepwater
Construction Vessel Balder was used in the
deployment of the Bridon supplied sheathed
spiral strand mooring cables for BP’s Holstein
Spar and Thunderhorse facilities. Bridon also
supplied the six strand crane ropes for the
deepwater lifting equipment onboard this
vessel and its sister vessel the DCV Thialf.
2
Wembley
London
Bridon manufactured 6000m of galvanised
spiral strand and supplied 170 sockets for 
the new Wembley Stadium.
The main arch at 133 metre high supports all
the weight of the north roof and 60% of the
southern side. Measuring 315 metres long it
will become the longest single roof structure
in the world.
3
Harris Shredder
Atlanta GA
Harris shredder model HS98115 purchased
by Blaze Recycling in Atlanta GA.
The installation processes an average of 
100 to 110 tons of scrap per hour and has
exceeded over 120 tons per hour. 11 FKI plc Lifting Products and Services
Turnover in Lifting Products and Services was £367 .9 million
(2004: £332.2 million) and underlying operating profit amounted
to £37 .6 million (2004 restated : £33.3 million). The turnover
increase was due to a 15.1% (£50.3 million) improvement in
underlying trading offset by a £14.6 million adverse currency
translation impact. In constant currency terms, underlying
operating profit increased by £6.5 million (19.5%).
The healthy growth in underlying turnover and profitability was underpinned
by a number of positive macroeconomic factors, principally: 
• The sharp rise in global oil prices, which has led to increased oil and gas
production, particularly in North America but also globally, which in turn
has benefited the Crosby operations worldwide. In total some 25% of the
group’s turnover is in the oil, gas and mining sectors.
• The rapid rise in global steel prices, caused by steel shortages following
increased demand from China. This has benefited the group’s Harris
operations that supply scrap processing equipment, where turnover has
increased by £6.9 million and which are now operating at full capacity. 
• The significant rise in raw material costs, which has been passed through
to customers in increased sales prices. This factor has contributed
approximately £25 million to the increase in group turnover.
The increased steel prices also raised the carrying value of inventory. In
addition, as a result of reduced supplier consignment stocks and increased
lead time from suppliers, an increase in the level of buffer stocks was
necessary to smooth supply fluctuation. In total, the impact has been to
raise group inventory values by c. £10 million.
Following the strategic review, the group has been active in reshaping itself
to focus on the key businesses of Bridon and Crosby.
This led to a number of disposals, including the Kosan Crisplant LPG
operations in Denmark and the Certex distribution operations in the USA,
UK, France, Holland and the Caribbean. Subsequent to the year end, the
Group also announced the disposal of its Certex European operations in
Scandinavia, Russia, Germany and the Baltic States. This leaves only the
Italian Certex operation, which is targeted for sale in the coming year. 
The acquisition of a 52.85% stake in Tianjin No 1 Steel Wire Rope Company
Limited for £0.9 million was announced on 25 January 2005 and regulatory
approval obtained on 9 May 2005. This acquisition, although small,
represents an important step in the development of the Bridon business 
for the following reasons:
• it allows access to the rapidly expanding Chinese market for 
elevator ropes
• it will provide a future platform for other more sophisticated special
purpose ropes, for example crane ropes, for manufacture and
consumption within China
• it establishes a future source of low cost manufacture for commodity
general purpose ropes.
Following the year-end, on 3 May 2005 the group announced the
acquisition of IP Clamps, the European market leader in lifting clamps, which
will become part of the Crosby business. IP Clamps fits Crosby’s strategy of
growth through the acquisition of businesses with high quality products
which can be distributed through Crosby’s international sales network.
The outlook for the group remains positive as many of its major markets,
especially the energy, mining and scrap processing segments, remain
buoyant. It is also expected that the group will continue to reshape itself to
ensure that development resources are concentrated on the major
businesses of Bridon and Crosby.
“The outlook for the group
remains positive as many of 
its major markets, especially 
the energy, mining and 
scrap processing segments,
remain buoyant. ”  Hardware
£1 99.7m
2005 Turnover
1 2
3
1
Maxim Casement Lock
The high performance window locking system
from Truth Hardware compliments the
company’s popular Maxim operator and
hinges allowing customers to build the large
windows that homemakers desire.
2
Wright Impressions
Leading big box retailers and home
improvement chains look to Wright Products
for innovative new offering such as the
Impressions door lock and handle sets.
3
Hinge Lifts Lid on Trike Trunk
A new hinge design by Weber Knapp
Company has allowed Lechman Trikes to
convert high end touring motorcycles with 
a rear trunk mechanism which allows the rider
easy access from a comfortable position.  13 FKI plc Hardware
Turnover in Hardware during the year amounted to 
£199.7 million (2004: £221.8 million), with underlying operating
profit of £26.4 million (2004 restated: £36.1 million). The fall in
turnover was due to a 2.9% (£6.5 million) downturn in trading
as well as the impact of an adverse £15.6 million currency
translation. Underlying operating profit declined by £7 .4 million
(20.5%) in constant currency terms.
Housing starts and refurbishment activity in North America remained 
strong. Consequently Truth Hardware, which contributes 58% of the
group’s turnover, enjoyed another excellent year with robust demand 
being supported by an active new product introduction programme. 
During the year, Truth implemented a new Customer Care Commitment
initiative aimed at better understanding the needs of customers and
providing solutions rather than just products. It is believed that this 
improved customer focus and service will enhance the reputation of an
already strong brand and provide growth opportunities. The period did,
however, reflect some market share erosion with the loss of a significant
customer to lower cost, lower quality imports. As part of the continuous
process of maximising manufacturing efficiencies, a facility in Pacoima,
California was closed and production transferred to existing facilities in
Minnesota and Canada. This rationalisation will help ensure that the
business remains flexible and competitive on a lower capital employed 
base. Overall margins in the business reduced slightly as it was not 
possible to fully recover material cost increases in selling prices. 
Belwith decorative hardware and the Faultless caster businesses had
another difficult year. Demand continued to be weak, with continued 
market erosion, as customers transferred manufacturing and sourcing
offshore. Both businesses have now totally withdrawn from US
manufacturing and the outsourcing projects have now been substantially
completed, with 95% of all decorative hardware and 75% of US casters
sourced from the Far East. However, the initial establishment of an efficient
supply chain did lead to some increased costs, which exacerbated the profit
impact of the weaker trading environment. As mentioned in last year’s
Annual Report, Belwith secured a major contract in the second half of
2003/04 to supply decorative hardware to one of the largest privately
owned retailers in the US. The initial stocking of this customer had a
significant impact on last year and the absence of any similar new contract
in the current year and the lower than expected replenishment orders
impacted second half and full year performance. As predicted, the move to
a sourcing and distribution business model reduced operating margins but
this was compensated by reduced capital employed, such that the return on
net operating assets, although reduced, remained strong.
Encouragingly, demand for Weber Knapp’s ergonomic and office furniture
products has stabilised and order intake showed a modest 3% improvement
over the prior year.
Despite the difficulties encountered during the year, the continuing attention
to strengthening the group’s competitive position through, customer focus,
cost reduction and an active strategic outsourcing program has ensured the
group is well positioned to deal with future challenges.
“Customer focus, cost reduction 
and an active strategic
outsourcing program has ensured
the group is well positioned to
deal with future challenges. ” Energy T echnology
£292. 1 m
2005 Turnover
1
Bristol Babcock controllers
Field technicians and system engineers 
prefer Bristol Babcock controllers for 
their automation systems. They deliver
superior reliability, flexibility, communications,
and overall value in data acquisition and
control applications.
2
Docklands Light Railway
London
FKI Switchgear supplied their latest DC
Switchgear product – Lightning – to
Docklands Light Railway as well as their
existing Eclipse AC Switchgear, for the new
London City Airport Extension.
3
Brush 2-pole generators
Chicago, Illinois USA
Four gas turbine based 23 MW mobile
generating units, incorporating Brush 2-pole
generators, providing emergency power to
Chicago, Illinois, USA.
1 2
3 15 FKI plc Energy Technology
Turnover in Energy T echnology was £292.1 million 
(2004: £268.1 million) and underlying operating profit was 
£27 .8 million (2004 restated: £25.7 million). The turnover
increase was due to a 10.3% (£27 .6 million) improvement in
underlying trading offset by a £3.6 million adverse currency
translation impact. Underlying operating profit increased by 
£2.6 million (10.1%) in constant currency terms.
The improvement in Brush Turbogenerators’ fortunes continued. 
The industrial power market continues to grow in line with global demand
for energy and this fed through into increased turnover and profitability. 
The sustained high level of global oil prices has reactivated capital
investment in oil and gas projects worldwide and this has significantly
benefited demand for the specialist 4 pole generators produced at the
Brush HMA unit in Holland. The rapidly expanding power market in China
continues to form an important part of the long term growth strategy and
the delivery of 2 x 500MW hydrogenerator units for the Shen T ou
development has significantly increased Brush’s total installed power
generation equipment in China. The importance of the Group ‘s product
development capability was underlined by its success in delivering 3 x
50MW MAX synchronous motors for the Ormen Lange gas pipeline project
in Norway. This is an exciting new market sector for large synchronous
machines and Brush is well placed to capitalise on future gas transmission
projects of this kind.
FKI Switchgear had a difficult period following the success of the previous
year. Order intake and turnover were down by more than 9% as a result 
of deferrals to a number of light rail projects and the reduction in spend 
by the UK electricity utilities as the industry awaited the conclusion of 
the regulating electricity distribution price control review published in
December 2004. Bristol Babcock continues to invest heavily in new 
product development and this, allied with the increase in activity in the oil
and gas sector in North America, resulted in an encouraging 23% increase
in product sales which more than offset a decline in system contracts.
There was a mixed performance from smaller companies within the group.
Demand increased, particularly in the Far East, for small motors and
generators produced at the Marelli facility in Italy. The incremental profit
arising from the increased sales was, however, largely offset by the inability
to immediately pass on raw material price increases to customers because
of existing contractual arrangements. The profitability of the transformer
operations has improved significantly following the consolidation of
operations onto one site. Froude, the specialist vehicle testing business, 
had a difficult year and the decline in order volume necessitated a
rationalisation of operations and a consolidation of manufacturing and
assembly onto a single site.
The continued emphasis on innovative customer driven product
development, market leading technology, quality and efficient production
continue to be the key to the growth of Energy T echnology. Allied to that
investment the vigorous exploitation of export opportunities and the long
term growth in global electricity consumption should ensure a positive
outlook for the division.
“The continued emphasis on innovative
customer driven product development,
market leading technology, quality and
efficient production continue to be the
key to the growth of Energy T echnology. ” FKI is a responsible citizen in the corporate world. The Group strives 
for continuous improvement in all areas relating to corporate and social
responsibility. This report contains a summary of the CSR activities of the
Group during 2004/05 and is divided into the following three areas;
• Social and Ethical
• Health and Safety
• Environmental
FKI’s performance, practices and strategies in these three areas are set out
together with insights into business unit level CSR activities. 
In addition to this annual review, a more comprehensive CSR report is
available either from the Company Secretary or on the company website
www.fkiplc.com/investorrelations.
Risk review
FKI businesses include CSR issues as part of the routine risk management
of the Group. This process operates as a part of FKI’s established,
structured approach to risk management as set out in the Finance
Director’s report.
Annual Group reporting
The annual CSR reporting process at FKI is built upon a feedback system
involving every global business unit. This is achieved through carefully
structured questionnaires and surveys containing quantitative and qualitative
data covering all of the identified areas of interest. This data forms the basis
of the CSR report and is available to the Board and senior management to
use in business decision making.
The Group is included in both the FTSE4Good independent CSR index and
the Dow Jones Sustainability Index. The Group also corresponds openly
with a number of organisations associated with CSR practice including the
Ethical Investment Research Service (EIRIS) and the Corporate Register
(www.corporateregister.com).
FKI believes that good CSR practice makes good business sense and
wishes its stakeholders to recognise it as a Group that:
• Has clear strategy and performance targets.
• Continually seeks out better ways of doing things.
• Strives to improve its service to customers by developing innovative
products, systems and solutions.
• Displays the highest standards of trust and integrity.
• Strives towards sustainability.
Stakeholders are regarded as including investors, customers, employees,
suppliers, government agencies and all of the businesses and communities
that have interaction with the FKI Group.
CSR objectives are met by the collective efforts of all company members
worldwide and the Group believes that positive actions with regard to 
CSR are not only desirable in their own right but are of economic and
commercial benefit to all stakeholders. 
FKI recognises CSR at the highest level. Responsibility for the Group’s 
CSR policies and their implementation and monitoring rests with the 
Chief Executive and is co-ordinated by the Director of Group Human
Resources. This responsibility is delegated to the President or Managing
Director of each division and in turn to the senior management team of
each operating business. 
Corporate social 
responsibility review
FKI is committed to being a
good corporate citizen and
strives to achieve an effective
standard of corporate and 
social responsibility (CSR) in 
all of its companies worldwide.
FKI believes that high ethical
standards of CSR are essential
to the long term success of 
the businesses, societies and
local communities in which 
it operates.
Paul Heiden Chief Executive
16 FKI plc  17 FKI plc Corporate and social responsibility review
Social and ethical policy and practice
FKI recognises that the practice of sound social and ethical responsibility
will deliver competitive advantage and contribute to the Group’s long-term
success. The greatest contribution that the Group makes in this area comes
from the wealth created by maintaining employment, both within the Group
and through its supply network.
Social and ethical policy
The FKI social and ethical policy is applied in all businesses worldwide and
acts as a reference point to guide employees and other stakeholders on the
aspects that drive the conduct of FKI’s business relationships. The policy
contains detailed provisions covering the following aspects.
• Standard of conduct to be followed in dealing with employees and
everyone with whom the Group has relationships.
• Compliance with the law and applicable regulations.
• Sound employment policies, which take account of labour rights and
conventions, prohibit discrimination and include recruitment, employment
and promotion on fair and legal grounds.
• Commitments to customers, partners and suppliers.
• Safeguarding of shareholders’ interests including applying good corporate
governance and prohibiting insider dealing.
• Utmost integrity in business dealings and absolute probity in business
transactions.
• Avoidance of conflicts of interest by employees.
• Community involvement and charitable assistance.
• Engagement with government and other organisations to promote and
defend FKI’s business interests.
• Continuous improvements in managing its environmental impact.
• Full compliance with health and safety regulations.
• Safeguarding and maximising the use of Group property.
• Protection of confidential information.
• Communication of policies to appropriate stakeholders.
These Group policies are in operation throughout FKI and, in addition, 
63% of businesses have their own complementary policies. Policies are
updated by management on a regular basis and are shaped to cover 
the needs of individual businesses. Many companies address social and
ethical issues at employee induction supported by employee handbooks
and nearly 75% of businesses have a member of staff responsible for 
social and ethical matters.
Community support
FKI businesses are encouraged to support the local communities in 
which they operate. This was highlighted by the update of FKI’s corporate
donations policy in 2004 to include the potential for funds raised by
employees towards charitable causes to be matched by donations from 
the Group.
Compliance
During the year, there have been three allegations of malpractice against
businesses within the Group (T en allegations were made in 2003/04). 
Two of these were concluded by withdrawal of the allegation after
investigations, and an amicable non-financial settlement was achieved 
with respect to the third allegation. There were three disciplinary actions
during the year resulting in two employees being dismissed for breach 
of social and ethical policy, and one written warning. In order to minimise
malpractice, companies continually investigate and monitor social and
ethical issues enabling them to improve current policies and to implement
initiatives to reduce future risk. 
Auditing for compliance
FKI implemented a policy of peer auditing in 2004 to facilitate accelerated
continuous improvement in social and ethical policy and practice. In order 
to establish compliance with the FKI policy, businesses are audited by their
peers to assess the effectiveness of the Group policy at operating business
level. Following positive results from a pilot scheme in 2004, peer auditing
will now be introduced worldwide.
The FKI HR network
A Group-wide network of FKI people involved in human resource
operations was established during 2004/05. This network is used as a
vehicle for more effective and consistent implementation of Group policies
and underpins FKI’s commitment to CSR.
“Members of our management team are involved on the Board of
Directors for NEPIRC, the North Eastern Pennsylvania Industrial
Resource Center. In addition to this we have management involvement
on the Board of Directors for the County Rail Board, which promotes
use, expansion, and improvement of local railroads. ”
Bridon America
“We had a Health improvement campaign for a week in May 2004,
where all employees were offered a Health Screening. In December
2004 all smokers were offered a course to help them stop, and at the
same time all employees with problems or pain in their necks, shoulders
and backs were offered help from a physiotherapist including a training
programme in our new fitness centre. ”
FKI Logistex AP+P Europe
“Our company participated in a ‘Day of Caring’ where employees
volunteered to provide their time and skills in assistance to community
development schemes. Employees widely participate in United Way
activities which benefit hundreds of local charities and community
service agencies. Some employees are active fire department and
emergency medical volunteers. Some employees participate on Boards
of the American Red Cross, Big Brothers and Sisters, March of Dimes,
Hospice, and other civic organisations. Memorial donations are made in
employee names to community service agencies. ”
FKI Logistex W+D North America
“We offer placements to young people as part of the UK school work
experience programme and provide sponsorship in line with FKI’s
donations policy which involves them matching any monies raised. ”
Froude Consine UK
75%
of Operating units have a designated person 
responsible for social and ethical matters Health and safety
FKI has implemented a global initiative which commits to Group progression
towards an accident free health and safety culture. This ambitious effort is
based upon the belief that almost all accidents are preventable. This belief
drives the Group to create a culture in which the commitment of every
employee becomes vital in the prevention of accidents. FKI’s health and
safety commitments start at the highest level of management and structures
have been put into place during the year to drive improvement throughout
the Group’s worldwide operations. The table opposite summarises the
cascade of health and safety responsibilities through the Group.
FKI is committed to full compliance with health and safety regulations in 
the workplace for all of its employees worldwide. Businesses record all
unsafe acts, near misses and injuries during operations and these are
analysed to enable continuous improvement through new initiatives and
improved working practices designed to move the Group towards an
accident free culture.
Health and safety policy 
In order to ensure that its workplaces are safe and to provide a sustainable
healthy working environment, FKI is committed to the following policies:
• Consider health and safety in all transactions.
• Meet or exceed current health and safety legislation.
• Introduce and maintain good working practices.
• Develop effective health and safety procedures including responsibilities.
• Make employees aware of potential risks, hazards, safe systems 
of working, operating procedures and their responsibilities and 
statutory obligations.
• Provide appropriate training.
• Continually improve systems for recording, reporting and analysing
accidents and incidents.
• Set and publish objectives and targets. Monitor progress and 
assess performance.
The FKI health and safety policy is in operation in all FKI companies globally.
In addition to this the number of companies within the Group operating
under their own complementary policy has been increasing in recent years.
This year 84% of businesses now have their own complementary policy
which is communicated locally through various methods including being
given to individual employees, displayed on notice boards or posted on 
the intranet. 
FKI seeks to identify and adopt best practice across its businesses. 
By providing structured training and education, employees are encouraged
to take responsibility for health and safety in their working environments.
Competent people responsible for overseeing the handling and reporting of
accidents and safety committees in many operations constantly review ways
of making the environment safer, thereby minimising the risk of accidents.
18 FKI plc Corporate and social responsibility review
Corporate social 
responsibility review
continued
FKI Health and Safety Vision
Accident Free Culture
The Guardians – FKI Board of Directors
Strategic control. Policy approval. Monitoring improvement. 
Managing the external interface and providing resources.
The Champions – 
Group Health and Safety and Environmental Committee
Operational control. Policy development. Monitoring performance.
Prioritising areas for improvement. Integrating best practice and
reviewing for compliance.
The Experts – Health and safety 
and Environmental Network
Analysing data integrity and its interpretation. Disseminating policy
into practice. Identifying and sharing best practice. Influencing
regulatory compliance and dissemination of new regulations.
The Enforcers – Operational Line Managers
Communicating and educating. Ensuring compliance with local 
policy and practice. Investigating incidents/accidents/breaches.
Eradicating root causes. Enforcing agreed standards. Performing 
risk assessments.
The Agents of Change – Each Employee
Complying with and endorsing all local Health and safety rules and
regulations. Reporting incidents and accidents. Challenging current
practice through identifying to colleagues any ways in which hazards
and risks can be reduced or removed.
84%
of Operating units have their own complementary 
health and safety policy in addition to the FKI policy 19 FKI plc Corporate and social responsibility review
Health and safety analysis
FKI follows the UK classification of incidents for Group reporting. Health 
and safety reporting guidelines are communicated to every company to
assist them in reporting their performances each year. All businesses are
also aware of local legislation and reporting mechanisms, and often report
under both sets of procedures.
There were five fines relating to health and safety performance within 
the Group during the year and no convictions. The fines were for various
breaches of health and safety law, none of which resulted in any injuries.
Each incident resulting in a fine was appropriately investigated by the
business at which it occurred and in all cases both policy and practice 
have been adjusted to prevent recurrence.
Nearly 95% of operating units have a designated person responsible 
for health and safety matters and 75% of units have a health and 
safety committee. 
Over 78% of operating units give formal health and safety training as a
standard procedure during all new recruitments, and nearly 55% of units
provide product specific health and safety training to customers.
The graph above shows the total number of reportable incidents occurring
in the Group during the year. Major incidents have reduced by 21%
between 2002 and 2005. The other categories are considered as reportable
incidents and are used to create the ‘accident frequency’ number which is
produced by most FTSE companies. FKI’s accident frequency is shown as
the line on the third axis in the graph above. This represents the number of
reportable incidents in total in the year divided by the total man hours
worked in the Group. This gives an indication of how many reportable
incidents occur per unit of manufacturing time. FKI’s accident frequency
rate was 1.59 in 2003, 1.40 in 2004 and 1.26 in 2005.
Regrettably, there was a fatality during normal operations at Bridon
International in December 2004. Bridon have co-operated fully with the
HSE during their investigations which are ongoing. A revised health and
safety management system is in the process of being deployed across 
the Bridon group.
Relative performance standards 
To incorporate improved benchmarking, businesses have been required 
to identify an external target within a comparative business sector against
which they may audit themselves quantitatively. Data from 2004/05 shows
that 36% of business units in operation in May 2005 have identified a target
and begun the external auditing process. Of those who have begun this
process, 40% have a better accident incident rate than their comparator.
Expansion of the external comparative target project will continue in the
coming year. It is intended that this new initiative will provide FKI Group
companies with a relevant external perspective and will help facilitate
accelerated continuous improvement.
Major Dangerous Work related Other reportable Accident
incidents occurrence illness incident frequency rate
2002 38 26 77 324 -
2003 39 24 68 313 1.59
2004 37 15 52 250 1.40
2005 30 7 48 225 1.26
400 1.59
1.40
1.26 300
Number of incidences  
(No.)
0
200
200
2005 2003 2004 2002
Major incident Dangerous occurrence Work related incident Other reportable incident Frequency rate
(reportable incidents/100,000 man hours) 
95%
of Operating units have a designated person 
responsible for health and safety matters 20 FKI plc Corporate and social responsibility review
Corporate social 
responsibility review
continued
The environment
FKI remains committed to controlling the impact of its businesses on the
environment in all Group operations. Local business management are
responsible for enforcing standards in line with legal responsibilities and
obligations and managing risks associated with environmental matters. 
The Group’s main areas of impact on the environment are in the use of
energy and water and the production of solid and liquid waste. Where
appropriate, companies have been encouraged to implement environmental
management systems compatible with ISO14001. Continuous improvement
in environmental performance is facilitated through implementation of the
Group environmental policy, monitoring of environmental performance and
internal and external auditing. 
Environmental policy 
FKI is committed to the protection and conservation of the environment 
in all of its operations. The Group’s environmental policy involves the
implementation of an operational management system within each business
unit enforcing standards in line with legal responsibilities and obligations.
The Group has a detailed policy, which aims to:
• Develop, install and maintain environmental management systems.
• Meet or exceed current environmental legal requirements.
• Focus on product stewardship, identifying ways of improving 
efficiency throughout the supply chain and manufacturing processes 
to reduce consumption.
• Use environmentally responsible suppliers and subcontractors.
• Give preference to alternatives for scarce and non-renewable resources.
• Develop and market products and services meeting environmental
standards and target each product to be produced more efficiently 
than its predecessors.
• Maintain control on discharges and emissions.
• Raise awareness of environmental issues.
• Identify and communicate best practice throughout the Group.
• Set and revise environmental targets and policies.
• Pursue sustainability in all operations.
All FKI businesses have adopted the corporate environmental policy.
Complementary local environmental policies are in effect in more than 
50% of businesses. 
Environmental performance
Assessment of environmental risks occurs during day to day business
operations as part of FKI’s risk management process. In addition to this
practice, 21% of businesses reported local completion of a dedicated
environmental risk analysis in 2004/05. The number of businesses involved
in this initiative is expected to increase in the future. One company is
involved in completing cyclical environmental accident scenario assessments
as a process of environmental risk management.
There were six complaints relating to environmental matters during the year,
none of which resulted in prosecution. One complaint arose due to the
noise levels in the vicinity of one European factory. The noise level was not
in breach of any local law. Nevertheless the business involved took action
and installed mufflers onto the equipment responsible.
Energy consumption
FKI’s energy consumption is converted from figures such as electricity
usage and petrol usage to a figure representing kg of CO2 in order to 
allow comparison across businesses. The term CO2 emissions therefore
represents FKI’s best estimate of an overall energy consumption figure.
Emissions have reduced year on year from 2002 (272,269,161 kg CO2) 
– 2005 (242,102,831 kg CO2). Initiatives within the Group which promote
the conservation of energy and the drive for sustainability include timers 
on heating apparatus to avoid losses and increasing machinery efficiencies
including modification and upgrading to modern efficient designs. One FKI
business uses renewable energy for 20% of its total energy requirements.
The Group’s energy consumption between 2002 and 2005 has reduced
year on year. The Group has met it’s quantitative targets for CO2 reductions
which have been set at 1% reductions each year from 2002 - 2005. 
The target for the next financial year is a further 1% reduction. 
Water consumption
Group water consumption reduced by 11% between 2002 and 2003,
reduced by 1% between 2003 and 2004, and reduced by 6% in 2005.
Businesses manage their water consumption through various waste cutting
measures including re-circulating cooling water in heat treatment and
welding operations. The Group’s fresh water consumption is considered 
by FKI to have a great impact on the environment. Waste control measures
and reviews are therefore in constant effect in the day to day operation of
businesses globally.
Waste disposal
FKI produces waste liquid mainly from water used for cooling purposes,
surface treatments, washing down products during the production 
process and sanitary purposes. Some FKI businesses which produce
relatively large quantities of wastewater and liquid as a result of
manufacturing processes have water treatment plants that are monitored
regularly by local water authorities. Where water meets strict standards,
discharge into rivers is permitted. Permitted discharge into sewers is also
regulated and occurs only with approval. Liquid waste may also be removed
by registered disposal companies. Where petroleum, bulk hazardous
chemicals or acid wastes are required to be stored on site, appropriate
permits are held by the relevant businesses. Where companies cannot treat
liquid waste they have permits in place for the removal and treatment of 
the waste off site. Consistent and suitable monitoring and reporting of liquid
waste processing procedure is in place in all FKI businesses. No permits
were revoked in 2004/05.
Analysis of the Group’s energy consumption
Measured C02 Target C02 Target
Emissions Emissions met?
%%
2002 -6.2 -1 Y es
2003 -5.4 -1 Y es
2004 -3.3 -1 Y es
2005 -3.2 -1 Y es
3.2%
reduction in Group energy consumption 21 FKI plc Corporate and social responsibility review
Liquid waste disposal
Each unit which produces solid or liquid waste is responsible for disposing
of that waste through cost effective and environmentally acceptable
methods. Liquid waste disposal costs reduced by 9% from 2002 – 2003,
reduced by 17% from 2003 – 2004, and then increased by 20% last year.
Solid waste disposal
The Group’s expenditure on processing solid waste reduced by 13% from
2002 – 2003, reduced by 39% from 2003 – 2004, and then increased by
14% last year. The increases from 2004 – 2005 in both solid and liquid
waste are largely attributable to one Lifting Products and Services company
experiencing high waste processing costs in 2005. This was due to an
improvement in their reporting mechanism through the establishment of 
an environmental database for their UK operations. The same company
recorded an income of £0.5m from the sale of solid waste material during
the year. There is often a market for the waste produced by businesses.
One company’s income from re-cycling their solid waste was 15 times
greater than their expenditure on processing of solid waste, and another
company reduced their solid waste disposal costs to zero, instead re-cycling
all solid waste and producing an income of £11,000.
Hazardous waste
Half of the Group’s businesses produce hazardous solid waste and 30%
produce hazardous air emissions. In all cases the appropriate permits and
licenses are in place. Management and reduction of the output is ongoing.
The reduction of volatile organic compounds, trichloroethylene and
particulates discharged into the atmosphere has been targeted as an area
for improvement by the Group. Businesses adopt many different initiatives 
to bring about reductions including the replacement of solvent based 
paint with water or powder based paints.
Summary
FKI is committed to continuous improvement in all areas relating to 
the Groups CSR performance. In a diversified group such as FKI there 
is a balance to be maintained between application of policy by the
corporate centre and delegation of responsibility to the local businesses.
The continuing growth of Group wide communications will have a 
positive influence on CSR performance in the future as businesses 
share best practice examples and communicate their local strategies 
and performances. 800
600
Solid waste disposal cost (£000)
0
400
200
1800
0
1200
600
2005 2003 2004 2002
Turnover £m
300,000,000
Carbon dioxide emissions (kg)
200,000,000
250,000,000
1800
0
1200
600
2005 2003 2004 2002
Turnover £m
1,000
800
Liquid waste disposal cost (£000)
0
600
400
200
1800
0
1200
600
2005 2003 2004 2002
Turnover £m
3,000,000
Water consumption (cubic metres)
0
2,000,000
1800
0
1200
600
2005 2003 2004 2002
Turnover £m
6.0%
reduction in Group water consumption 22 FKI plc 
Financial Director’s review
Neil Bamford
Finance Director 23 FKI plc Financial Director’s review
Total turnover was £1,290.5 million (2004: £1,345.1 million) which included
£82.5 million (2004 restated: £150.3 million) in discontinued operations. 
The overall reduction in total turnover included a £67 .8 million trading
improvement offset by £67 .8 million reduction due to business disposals and
£54.6 million reduction as a result of adverse currency translation, mainly
due to the weaker US dollar.
The operating profit before exceptional items and goodwill amortisation
(“underlying operating profit”) amounted to £95.8 million (2004 restated:
£96.5 million). In constant currency terms, underlying profit improved by
£4.8 million or 5.0%. The underlying operating margin of 7 .4% reflects a
small improvement on last year.
The underlying operating profit includes £5.4 million (2004 restated: 
£7 .6 million) of losses in discontinued businesses, relating to trading 
in terminated operations and businesses sold during the year.
Geographical analysis by origin
T urnover on continuing operations has increased by 1.1% despite the impact
of currency translation which has largely been offset by the 14.8% increase 
in turnover from the UK. North America still remains the major contributor to
Group results accounting for 51.2% of turnover in continuing operations 
and 63.1% of underlying operating profit in continuous operations.
Y ear ended Y ear ended
31 March 31 March
2005 2004
Turnover T urnover
£m % £m %
United Kingdom 305.5 23.7 266.2 19.8
Rest of Europe 239.6 18.5 253.7 18.8
North America 619.1 48.0 632.4 47 .0
Rest of World 43.8 3.4 42.5 3.2
Continuing operations 1,208.0 93.6 1,194.8 88.8
Discontinued operations 82.5 6.4 150.3 11.2
Total 1,290.5 100.0 1,345.1 100.0
Y ear ended Y ear ended
31 March 31 March
2005 2004
Underlying Underlying 
Operating Operating 
profit profit
£m % £m %
United Kingdom 23.2 24.2 17 .9 18.6
Rest of Europe 10.3 10.7 (1.5) (1.5)
North America 63.9 66.7 84.1 87 .1
Rest of World 3.8 4.0 3.6 3.7
Continuing operations 101.2 105.6 104.1 107 .9
Discontinued operations (5.4) (5.6) (7 .6) (7 .9)
Total 95.8 100.0 96.5 100.0
“North America still remains 
the major contributor to Group
results accounting for 51.2% 
of turnover. ”  24 FKI plc Financial Director’s review
Impact of exchange rates
With 74.7% of FKI’s continuing turnover and 77 .1% of its continuing
underlying operating profit originating from outside the UK, the Group’s
results are sensitive to changes in exchange rates. Trading results and cash
flow of overseas operations have been converted into sterling at average
rates of exchange, whilst balance sheets are converted at year end rates.
The most significant rates for the Group were as follows.
2005 2004
At Average At Average
31 March rates of 31 March rates of
2005 exchange 2004 exchange
to £1 to £1 to £1 to £1
US dollar 1.89 1.85 1.84 1.71
Canadian dollar 2.29 2.36 2.42 2.30
Euro 1.45 1.46 1.50 1.44
Danish krone 10.83 10.90 11.13 10.75
The average exchange rate of the US dollar to sterling weakened by 8.2%
compared with last year which affected all divisions, in particular Hardware
whose operations are in the US, and Lifting Products and Services whose
US operations are particularly successful.
Underlying
Operating
T urnover profit
increase/ increase/
(reduction) (reduction)
Currency effect on results £m £m
FKI Logistex (19.1) (0.6)
Lifting Products and Services (14.6) (2.2)
Hardware (15.6) (2.3)
Energy T echnology (3.6) (0.5)
Discontinued (1.7) 0.1 
(54.6) (5.5)
Exceptional items
Exceptional items in the year amounted to £105.3 million of which 
£3.4 million has been charged in arriving at the operating profit of 
£65.7 million. The balance of £101.9 million represents the net loss on
disposal of Kosan Crisplant and Certex operations in the United States 
and Europe (£11.9 million) and the charge of £90.0 million relating to 
the withdrawal from FKI’s wind turbine business announced on 
8 November 2004. This figure is after charging £13.6 million of goodwill
previously written off against reserves and £44.0 million of goodwill
previously included on the balance sheet.
Interest
The Group’s net interest expense increased slightly to £23.6 million 
(2004: £23.3 million) as a result of higher interest rates on the floating 
rate portion of the Group’s debt, offset by reduced average net debt and 
a beneficial currency translation impact. Net interest expense was 4.1 times
covered (2004: 4.1 times) by profit before interest, exceptional items and
goodwill amortisation, and represented a rate of 5.3% (2004: 4.5%) on 
the average weekly net debt of £448 million (2004: £513 million) during 
the year.
Other net finance charges of £1.8 million (2004: £6.4 million) arose on the
FRS 17 interest charge on the total liabilities of the pension schemes offset
by the expected return on the pension schemes’ assets.
Profit before tax
The underlying profit before tax amounted to £70.4 million (2004 restated:
£66.8 million). After charging exceptional items and goodwill amortisation,
there was a loss before taxation of £61.6 million (2004 restated loss: 
£17 .7 million).
T axation
The Group’s effective tax charge on profits before goodwill amortisation and
exceptional items was 25.7% (2004 restated: 25.3%). A reconciliation of the
actual current tax charge to the standard rate of corporation tax in the UK
of 30% is set out in note 10 to the financial statements.
Financial Director’s review
continued 25 FKI plc Financial Director’s review
Return on invested capital
The return on invested capital, calculated as profit after tax before
exceptional items, goodwill amortisation, interest and other net finance
charges, divided by the average of opening and closing shareholders’
equity, plus goodwill written off, plus net debt and plus the net pension
liability was 7 .7% (2004: 6.7%).
Earnings per share and dividends
The loss after tax amounted to £79.9 million (2004: restated loss of 
£20.9 million), and basic loss per share was 13.7p (2004 restated: 
basic loss per share 3.6p). Adjusted earnings per share, calculated 
by excluding exceptional items and goodwill amortisation were 9.0p 
(2004: restated 8.6p).
Reflecting the Group’s underlying performance, the Board has proposed 
to pay a final dividend for the year of 3.0p per share which, with the interim
dividend of 1.5p per share paid on 25 February 2005, brings the total
dividends for the year to 4.5p per share, the same level as last year. 
The total paid out to shareholders in respect of these dividends will 
amount to £26.2 million.
Cash flow
Net debt at 31 March 2005 decreased by £26.4 million from 
30 September 2004 but increased marginally (£1.6 million) to 
£350.7 million from 31 March 2004. 
Cash flow was negatively impacted by the effect of higher steel prices of
approximately £15.0 million, the cash outflow of the wind turbine business
of £25.0 million and £12.2 million spent on closure costs previously
identified in the 2004 Strategic Review. 
Capital expenditure increased to £32.1 million, after adjusting for assets
acquired under finance leases, representing 87 .7% of depreciation. 
Proceeds from the sale of fixed assets, largely surplus properties, 
amounted to £11.0 million. 
Disposals
During the year the Group disposed of six businesses the proceeds of
which amounted to £20.9 million net of cash disposed of with the
businesses, of which £4.0 million is due in future years. The principal
transactions in the year were the sale of Certex US on 12 July for a
consideration of £6.1 million and the sale of Kosan Crisplant on 5 November
for a total consideration of £15.0 million, of which £4.0 million represents an
interest bearing loan note due for repayment in 2009. Following the year
end the sale of a number of Certex operations in Europe for £16.3 million
was announced, subject to certain regulatory approvals. The anticipated
loss on this transaction of £2.8 million has been recorded in the accounts
for 2005.
Financing
The Group is financed by a mix of equity, retained earnings, a eurobond,
private placement loan notes and a syndicated credit facility. Funding for
operating subsidiaries, apart from small local overdraft facilities, is raised
centrally and lent internally on commercial terms.
Gross debt at the year end amounted to £506.7 million and 84% of 
the Group’s committed borrowing facilities of £603 million were drawn. 
These committed borrowing facilities are available for 4.2 years on average.
The gross debt drawn at the year end consists principally of 1600 million
(£354.8 million) under a ten year eurobond maturing in February 2010,
US$183.5 million (£98.2 million) under a series of US private placements
issued in 1994, 1996 and 1997 with maturities ranging between 2005 and
2016 and £47 .7 million under a £150 million syndicated credit facility
maturing in July 2007 .
“During the year the Group
disposed of six businesses the
proceeds of which amounted 
to £20.9 million. ”  26 FKI plc Financial Director’s review
The fixed rate eurobond and US private placements are substantially
swapped into floating rate obligations and other currencies. These swaps
maintain approximately three-quarters of gross borrowings at floating rates
and one-quarter at fixed rates. The cross-currency swaps provide a partial
hedge of the foreign exchange exposures as described below under foreign
exchange management. The weighted average interest rate at 31 March
2005 for fixed interest rate borrowings, which are principally the eurobond
and US private placements, was 7 .3% after the impact of swaps and the
weighted average time period for which the rate is fixed was 5.1 years.
Floating rate borrowings are principally linked to LIBOR for periods of
between one and six months. Further details of interest rates, currency
profile and maturity of borrowings are contained in notes 21 and 23 of the
financial statements.
Y ear end cash, marketable securities and deposits totalled £156.0 million
(2004: £155.0 million), resulting in net debt of £350.7 million (2004: 
£349.1 million). The Group adopts a conservative investment policy for 
its surplus funds, most of which are pooled and managed centrally, 
with deposits limited by amount and maturity across highly rated banks.
£38.9 million (2004: £38.0 million) of cash, marketable securities and
deposits are held and managed by the Group’s captive insurance company
in Guernsey. Counterparty risk limits are established for all banks used by
the Group, taking account of the credit standing of each bank.
Foreign exchange management
The treasury function provides the Group with cash and risk management
services by investing surplus funds and managing and reducing financial
risks purely in relation to underlying trading transactions. It does not operate
as a profit centre and no speculative transactions are permitted. The Group
does not hold or issue derivative financial instruments for trading purposes.
A large proportion of the Group’s trading is carried out within the domestic
territory of each business unit. Consequently, foreign exchange transaction
exposures, which arise when sales and purchases are made by a 
business unit in a currency other than its own functional currency, are
generally not significant. The Group’s policy is to hedge forward foreign
exchange contracts as soon as commitment has been given to the
underlying transaction.
The results of foreign subsidiaries are translated into sterling at the average
rates of exchange for the period concerned. As this conversion has no
impact on the cash flow of the Group, the Group chooses not to hedge its
foreign subsidiaries’ earnings, other than any dividends which are dealt with
as transaction exposures.
The balance sheets of foreign subsidiaries are translated into sterling at 
the closing exchange rates. Any gains or losses on the translation of these
balance sheets into sterling are recorded in reserves against the gains and
losses arising on foreign currency borrowings held for the purposes of
hedging the net assets of subsidiaries. The Group aims to hedge over half
of its non-sterling assets in this way.
The Group’s net assets and net debt by currency at 31 March 2005 are
shown in the table below:
Net assets Net Net
before deposits/ assets/
financing (debt) (liabilities)
£m £m £m
Currency
Sterling (138.7) 29.3 (109.4)
US dollar 365.9 (274.2) 91.7
Euro 87 .6 (37 .6) 50.0
Danish krone 119.8 (90.5) 29.3
Other currencies 60.4 22.3 82.7
Total 495.0 (350.7) 144.3
Financial Director’s review
continued 27 FKI plc Financial Director’s review
Risk management
The Board has an established structured approach to risk management that
has been further embedded in the business to support the delivery of the
strategic and business objectives. The Risk Committee is accountable for
the risk management system, the reporting of key risks and the associated
mitigating actions. Following an assessment of each business, risks are
formally identified, prioritised and recorded in a corporate risk register which
is reviewed and updated twice each year with risk mitigation plans identified
for all significant risks.
Pensions
The net pension deficit has reduced from £131.9 million to £121.8 million 
in line with the commitment expressed last year to make contributions of
£11.5 million per annum for a minimum of three years in respect of the 
past service deficit of the main UK defined benefit scheme. The other net
finance charges arising on the difference between the interest cost on
liabilities less the expected return on scheme assets was £1.8 million in 
line with previous forecasts.
In addition to the switch of the main UK scheme assets to 50% bonds/50%
equities completed in April 2004, the Group has now also rebalanced the
strategic asset allocation for the defined benefit schemes in the USA to
50% bonds/50% equities allocation.
International financial reporting standards (“IFRS”)
For accounting periods starting on or after 1 January 2005 all European
listed companies are required to use IFRS to prepare their consolidated
financial statements. For FKI this means that the 2005 Interim Report, the
2006 Annual Report and all subsequent reports including all comparative
information will be prepared using IFRS. The Group has continued its
preparatory work to ensure full compliance with these requirements. Prior to
the announcement of the Group’s Interim results in November 2005, it is
the Group’s intention to restate the 2005 results on an IFRS basis to allow
the impact to be interpreted and adequately understood.
Neil Bamford
Finance Director
“The Board has an established
structured approach to risk
management that has 
been further embedded in 
the business to support the
delivery of the strategic and
business objectives. ” Board of Directors
1
4
7
1. Gordon F. Page C.B.E., M.A., FRAeS
Non-Executive Chairman (born 1943)
Appointed to the Board in August 2004 as a non-executive director and
became Chairman in September 2004. He is also Chairman of Cobham plc
and was previously Chief Executive there from 1992 until 2001. He is also
non-executive chairman of Hamworthy plc and AirT anker Holdings Limited.
2. Paul Heiden B.Sc., A.R.C.S., A.C.A.
Chief Executive (born 1957)
Appointed to the Board in January 2003 when he joined FKI as Chief
Executive. Previously he was at Rolls-Royce where he was appointed
Director of Industrial Businesses in 1997 and Finance Director in 1999, a
position he held until 2002. He is a non-executive director of Bunzl plc.
3. Neil Bamford B.A., F.C.C.A.
Finance Director (born 1958)
Appointed to the Board on 1 April 2004. He joined the Group in 1988 and
has held a number of posts including Managing Director, Lifting Products 
& Services, Group Chief Accountant and European Managing Director of 
the Materials Handling Group.
4. Reg Gott B.Sc, M.Sc.
Engineering Director (born 1957)
Appointed to the Board in April 2002. He joined FKI in 1994 as Managing
Director of Froude Consine T est Equipment. He has since managed several
operations and in 1998 became Managing Director of the Rotating
Machines Division. He was appointed Group Engineering Director and
Managing Director of Logistex in April 2004.
5. Russell Edey F.C.A.
Non-executive (born 1942)
Appointed to the Board as a non-executive director in 1996. He is non-
executive Deputy Chairman of N M Rothschild Corporate Finance Limited,
Chairman of Anglogold Ashanti Ltd of South Africa and a member of the
Conseil de Surveillance of Paris Orleans SA.
6. Chris Clark MIM
Non-executive (born 1942)
Appointed to the Board as a non-executive director in January 2000. He is
Chairman of Associated British Ports Holdings plc, Deputy Chairman of
Rexam PLC and a former Chief Executive of Johnson Matthey PLC.
7. Sir Michael Hodgkinson B.A., A.C.M.A.
Non-executive (born 1944)
Appointed to the Board as a non-executive director in April 2000. Appointed
Chairman of Post Office Ltd in May 2003 and retired as Chief Executive of
BAA plc in June 2003. He is Chairman of First Choice Holidays PLC and is
also a director of the Bank of Ireland and Dublin Airport Authority.
8. Charles Matthews B.Sc. (Hons), M.B.A.
Non-executive (born 1953)
Appointed to the Board as a non-executive director on 11 September 2003.
He is the founder and Managing Director of his own strategy consulting
business focusing on the automotive and mobile telecomms sector. He is
also a non-executive director and founder of Sigma QC. He was Chief
Executive of Cosworth and Managing Director of the Car Division of 
Rolls-Royce and is currently a director of Porvair plc.
2 3
5 6
8
28 FKI plc  The directors are committed to achieving and maintaining the highest
possible standards of corporate governance and during the year followed
the principles set out in Section 1 of the 2003 FRC Combined Code 
(“the Combined Code”). 
The directors consider that, throughout the year ended 31 March 2005,
the Company complied fully with the provisions set out in Section 1 of the
Combined Code. 
This statement on corporate governance, together with the Remuneration
report, provides a commentary on how the Company complied with the
principles included in Section 1 of the Combined Code.
The Board
The directors supervise the management of the business and the affairs of
the Company and see their prime responsibility as being to determine the
broad strategy of the Group and to ensure its implementation with a view 
to enhancing the prosperity of the Group and its shareholders over time.
The Board currently comprises three executive and five non-executive
directors, and their names are listed on page 28. The Board has reviewed
the position of its non-executive directors and has determined that they 
are all independent in character and judgement in accordance with the
guidance as set out in the Combined Code. Mr R P Edey has been the
senior independent director throughout the year.
Gordon Page, the Chairman, was appointed to the Board as a non-executive
director on 1 August 2004. Mr Page fulfilled the criteria for independence as
set out in the Combined Code at the time of his appointment and the Board
is satisfied that Mr Page remains free from any relationship with the
executive management of the Company which could materially interfere with
the exercise of his independent judgement. The same comment also applies
to the three non-executive directors.
The Board meets at least six times each year with additional meetings as
required. All directors receive regular information on the Group’s operational
and financial performance and the Board has reserved certain items for its
review and approval, including the annual and interim results, the strategy 
of the Company, the annual profit plan, corporate governance and internal
control. It makes decisions regarding acquisitions and divestments, and sets
policies on, amongst other things, remuneration, health and safety, and the
environment, leaving implementation of these decisions to management.
The Company Secretary is appointed by and responsible to the Board and
all directors have access to his advice and services. Directors may obtain
independent professional advice if necessary, at the Company’s expense.
Formal agendae, papers and reports are supplied to directors in a timely
manner, prior to Board meetings. Briefings are also provided at other times,
for example, through operational visits and business presentations.
The Company has a Chairman and a Chief Executive each having their own
separate responsibilities. Essentially, the Chairman is responsible for the
effective working of the Board and the Chief Executive is responsible for all
operational matters.
The directors may at any time appoint an additional director. A formal
selection process is carried out, making use of external agencies in the
selection of suitable candidates where it appears necessary or appropriate.
Upon the appointment of a new director, relevant training and induction to
the Company is provided as required.
Any directors so appointed shall hold office until the next annual 
general meeting and shall be eligible for reappointment at that meeting.
Following such appointment, the Articles of Association require each
director to retire by rotation and seek re-election at least every three years.
There was an appraisal of the performance of the Board in the period
November 2003 – March 2004. Further appraisal of the performance of the
Board and of the performance of the Chairman will be undertaken during
the next 12 months.
Board Committees
The Board has appointed the following principal Committees:
Audit Committee – The Audit Committee is chaired by Mr R P Edey and
its membership comprises all the non-executive directors. Mr Page attends
by invitation. It meets at least three times a year and its primary tasks are to
receive regular reports from the Group’s external auditors and the internal
audit function, and to review the preliminary results, interim information 
and annual financial statements before they are presented to the Board. It
concentrates particularly on accounting policies and compliance, areas of
management judgement and estimates, and the monitoring of the controls
which are in place to ensure the integrity of the financial information to be
reported to shareholders. The Committee also discusses internal control
issues, and conducts a review of the remit of the internal audit function,
including its authority, resources and scope of work. Recommendations are
given to the Board concerning the appointment and remuneration of
external auditors. Immediately following the conclusion of the year end
audit, the Committee will undertake a review of Auditor effectiveness in line
with the requirements of the Combined Code. The Committee sets the
policy on their engagement and remuneration for non-audit work which is
work that they are best suited to perform, will not involve the audit of their
own firm’s work and will not involve them making management decisions
for or acting as advocate for the Company. The Committee monitors the
cost of non-audit work throughout the year and so is in a position to 
take action at any time if it believes that there is a risk of the auditors’
independence being undermined through the award of non-audit work.
Remuneration Committee – This Committee meets at least twice a year,
and consists of all the non-executive directors with Mr C R N Clark as
Chairman. Mr Page attends the Committee by invitation. Its key role is to
make recommendations to the Board on the Company’s framework of
executive remuneration and its cost, and to determine specific remuneration
packages for each of the executive directors, including pension rights and
compensation payments. The objective of the Remuneration Committee is 
to ensure that the executive directors are both highly motivated and fairly
rewarded for their contributions to the Group’s overall performance. 
Further details of the Committee’s work and of the directors’ emoluments
and interests are set out in the report of the Remuneration Committee on
pages 33 to 41.
Corporate governance
29 FKI plc  Nominations Committee – The Nominations Committee consists of the
Chairman of the Board and all the remaining non-executive directors, and it
meets when necessary to make recommendations to the Board on all new
Board appointments and also to advise generally on issues relating to Board
composition and balance.
The number of full scheduled Board meetings and Committee meetings
attended by each Director during the year was as follows:
Number of Board Audit Remuneration Nominations
meetings 9351
Attendance
K Orrell-Jones*4121
G Page
+
52** 3** –
R P Edey 8341
N Bamford 9 n/a n/a n/a
J A Biles* 3 n/a n/a n/a
C R N Clark 7351
R L Gott 9 n/a n/a n/a
P Heiden 9 n/a n/a n/a
Sir Michael 
Hodgkinson 7241
C Matthews 9351
*Up to date of cessation of directorship.
+From date of appointment. 
**By invitation.
Communications with shareholders
In addition to ensuring that sufficient information is disseminated in order 
to maintain an orderly market in the ordinary shares of the Company, the
Company, primarily through the Chief Executive and Finance Director,
maintains a regular dialogue with major institutional shareholders and
analysts, particularly following trading updates and results announcements,
which are posted on the Company’s website, which provides additional
Company information and is regularly updated. Any points of interest are
reported to the Board for their consideration.
The Board members attend the annual general meeting and, in particular,
the Chairmen of the Audit, Remuneration and Nominations Committees 
are available to answer questions.
At annual general meetings, separate resolutions are proposed on each
substantially separate issue and the number of proxy votes received for and
against each resolution is announced. Notices of annual general meetings
are sent to shareholders at least 20 working days before the meeting.
Financial reporting
The directors, who have sole responsibility for the preparation and
presentation of this report and accounts and other price sensitive public
reports, seek to prepare those reports in a way that represents a balanced
and understandable assessment of the Group’s position and prospects.
Internal control and risk management system
The Board acknowledges its overall responsibility to safeguard the
Company’s assets and shareholders’ investment. In accordance with
“Internal Control: Guidance for Directors on the Combined Code” (“the
Turnbull Guidance”), the Board of FKI has established a risk management
policy and system which are an integral part of the management’s approach
to delivery of the strategic and business objectives. The risk management
system is a systematic process designed to identify, assess, treat, 
manage and communicate business risks. It also provides a process for 
the escalation and delegation of risks to the appropriate level in the
operations and ensures that actions are properly defined, resourced 
and effected to give confidence in achievement of business objectives. 
The system operates throughout FKI and is applied equally to the 
operating units and corporate function and reports on significant areas 
of risk and the appropriate controls.
Risks arise from a wide variety of internal and external sources and can be
associated with customer requirements, competitor actions, regulations and
political actions. They may also arise from the products and services sold 
by the Group and the processes used by operations as part of their normal
activities. Management regularly carries out risk assessments covering risks
in strategy, risks to achieving commitments contained in contracts with
customers, risks in organisational change, risks associated with major
projects and risks involving potential acquisitions. 
The Company has a “whistle blowing” policy which is currently under
review. T o date, no actual instances have been recorded under the policy.
The output from each assessment is a list of prioritised risks, with the
probability of them happening and their impact, including any reputation
aspects, together with the associated action plans to mitigate them.
Operating unit and corporate function managers are responsible for these
action plans and their progress is reported at least twice a year to the FKI
Risk Committee as part of their performance review. The Risk Committee is
accountable for the risk management system and for reporting key risks and
associated mitigating actions to the Board through the Audit Committee
and meets at least twice a year. It is chaired by the Chief Executive and the
other members are the senior executive management. The Finance Director
is responsible for the implementation of the risk management process
throughout the Group and the compilation of the Group risk register which
records all risks which management consider to be significant, together with
all appropriate mitigating actions. The risk registers are reviewed with the
three year business plans in August/September and with the annual budget
in February/March. These reviews cover actions completed and the status
of ongoing actions.
Recommendations to improve the system from the independent review 
held in 2003 have now been implemented and embedded into the normal
business processes, including approval of tenders, capital expenditure and
business projects. Lessons learnt from the implementation and operation of
the risk process are being fed back and will be further reviewed in future to
ensure continuous improvement.
The Board has overall responsibility for the Group’s systems of internal
control and for reviewing their effectiveness. The Board has reviewed the
key risks inherent in the Group, together with the operating, financial and
compliance controls that have been implemented to mitigate those key
risks. However, any system of internal control can only provide reasonable
and not absolute assurance against material misstatement or loss.
The Company has an organisation structure with clearly defined lines of
responsibility, accountability and delegated authority and with clear local
operating autonomy within a framework of central management, stated
corporate aims and objectives. The operating performance of each 
business is regularly reviewed by the executive directors, and progress 
is monitored against business plans, utilising established procedures 
for business planning, budgeting, capital expenditure approval and 
treasury management.
Corporate governance 
continued
30 FKI plc Corporate governance The directors submit their report and the audited financial statements of 
FKI plc for the year ended 31 March 2005.
Principal activities
The principal activities and the development of the Group are given in the
Chairman’s statement, the Chief Executive’s review and the Operating
review on pages 5 to 15. The financial statements for the year ended 
31 March 2005, including other information about the Group’s financial
position, are set out on pages 43 to 76.
Dividends
The directors recommend a final dividend on ordinary shares in respect of
the year ended 31 March 2005 of 3.0p per share, payable on 7 October
2005 to shareholders on the register on 9 September 2005, which with the
interim dividend paid on 25 February 2005 absorbs a total of £26.2 million
of distributable reserves.
Directors
The names of the directors as at the date of this report are listed on 
page 28, together with brief biographical notes. Mr G Page was appointed
to the Board on 1 August 2004, and as Chairman in September 2004. 
Mr K Orrell-Jones retired from the Board on 1 September 2004, 
Mr N Bamford was appointed to the Board on 1 April 2004, Mr J Biles
retired from the Board on 30 June 2004 and Mr S D Jones left the Board
on 1 April 2004.
At the forthcoming annual general meeting and in accordance with the
company’s Articles of Association, Mr G Page having been appointed 
since the last annual general meeting, and being eligible, offers himself 
for re-election. Mr P Heiden and Mr C Clark retire by rotation and, being
eligible, offer themselves for re-election.
No contract or arrangement has been entered into at any time during the
year in which any director had a material interest which was significant in
relation to the Group’s business except for those disclosed in the
Remuneration report.
Directors’ interests
The interests of the directors (including their family interests) all of which 
are beneficial, in the share capital, share options and the Long-T erm
Incentive Plan of the Company appear in the Remuneration report on pages
39 and 41.
Political and charitable donations
During the year ended 31 March 2005 the Group contributed £0.1 million
(2004: £0.1 million) in the UK for charitable purposes. There were no
political donations during the year (2004: £nil).
Research and development
Product development and innovation is a continuing process. The Group’s
businesses commit resources to research and development to assist them
in securing their competitive positions in their chosen markets.
Employment policies
Companies within the Group have developed a wide range of voluntary
practices and procedures for employee involvement appropriate to their
own circumstances and needs. The Group encourages this approach to
providing information and consultation and believes that this promotes 
a better understanding of the issues facing the individual business in which
the employee works. It is the policy of the Group to give full and fair
consideration to applications made by disabled persons for job vacancies,
where particular job requirements are within their ability and, where
possible, arrangements are made for the continuing employment of
employees who have become disabled.
Further details of employment and health and safety policies are included in
the Corporate social responsibility report on pages 16 to 21. 
Environmental policy
The Group is committed to adopting a responsible approach to
environmental matters. The Group’s overall policy forms the basis of
detailed guidelines that are appropriate to the individual businesses.
Management seeks to minimise any adverse impact on the environment of
all aspects of the Group’s operations by means of environmentally sound
disciplines, which take practical steps to control effectively or eliminate any
known pollution risks. Specifically, capital expenditure is directed towards
the replacement of hazardous materials with environmentally friendly
alternatives and methods of minimising the costs of disposal of toxic waste,
the recycling of wood, the reuse of cardboard and paper products, and the
reduction of energy consumption. 
Further details of the Group’s environmental policies are included in the
Corporate social responsibility report on pages 16 to 21.
Payments to suppliers
Operating businesses are responsible for agreeing the terms and conditions
of their transactions with suppliers. 
Payment is made on those terms subject to the terms and conditions 
being met by the supplier. FKI plc, as a holding company, did not have any
amounts owing to trade creditors at 31 March 2005.
Share capital
The movement in the share capital during the year is detailed in note 27 
to the financial statements.
Directors’ report
31 FKI plc  Significant shareholdings
As at 8 June 2005, the following major interests of 3% or more in the
ordinary shares in issue had been notified to the Company by:
Number of Holding 
ordinary shares %
Janus Capital Management LLC 34,490,861 5.94
FMR Corp/Fidelity International Limited 34,333,992 5.92
Scottish Widows Investment 
Partnership Ltd 29,780,353 5.11
Nordea S.A., Luxembourg 29,437 ,044 5.05
Legal & General Investment 
Management Limited 21,348,055 3.67
Corporate governance
A review of the Company’s application of the principles and provisions of
The Combined Code appears on pages 29.
Auditors
Ernst & Y oung LLP are the current auditors. A resolution to reappoint 
Ernst & Y oung LLP as the Group’s auditors will be proposed at the annual
general meeting.
Annual general meeting
The annual general meeting of the Company will be held at 12 noon on 
20 July 2005 in the Council Room at One Great George Street, Westminster,
London SW1P 3AA. A notice of meeting appears in the enclosed circular
and for those members wishing to attend a location map has been included
within the circular.
The Special Business to be considered at the meeting relates to the
following matters:
Description Resolution number
General authority to allot equity securities 9
Limited authority to allot equity securities 
for cash excluding pre-emption rights 10
Authority to purchase shares 11
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 the Group and of the profit or loss of the Group for that
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 financial
statements; and
•prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The directors are also responsible for maintaining proper accounting
records which disclose with reasonable accuracy at any time the financial
position of the Company and Group, and enable them to ensure that the
financial statements comply with the Companies Act 1985. They are also
responsible for safeguarding the assets of the Company and Group and for
taking reasonable steps to prevent and detect fraud and other irregularities.
Going concern
After making appropriate enquiries, the directors are confident that the
Company has adequate resources to continue in operational existence 
for the foreseeable future. For this reason, the directors adopt the going
concern basis in the preparation of the Group’s financial statements.
By order of the Board
Antonio Ventrella, Secretary
9 June 2005
Directors’ report 
continued
32 FKI plc Directors’ report Remuneration report
33 FKI plc 
Composition and role of the Remuneration Committee
The Remuneration Committee is responsible for formulating executive remuneration policy and for determining the remuneration of the executive directors
and certain senior executives.
Its members are the non-executive directors as shown in T able 1 together with their attendance at meetings of the Remuneration Committee 
during 2004/05:
T able 1. Remuneration Committee membership and attendance in 2004/05
Committee member 27 April 2004 2 June 2004 24 Nov ember 2004 20 January 2005 30 March 2005
Mr C R N Clark (Chairman) Attended Attended Attended Attended Attended
Mr K Orrell-Jones
(1)
Attended Attended–––
Mr G F Page C.B.E.
(2)
–– Attended Attended* Attended*
Mr R P Edey Absent Attended Attended Attended Attended
Sir Michael Hodgkinson Attended Attended Attended Attended Absent
Mr C Matthews Attended Attended Attended Attended Attended
*By invitation.
(1) Mr Orrell-Jones retired on the 1 September 2004.
(2) Mr Page joined FKI plc as a non-executive director on 1 August 2004. He was appointed as non-executive Chairman from 1 September 2004.
At the November meeting of the Remuneration Committee it was decided that the Company Chairman would cease to be a member of the Committee.
After this date he attended by invitation at meetings as shown in T able 1.
All of the above served on the Remuneration Committee throughout the year, or as indicated, in T able 1. All of the non-executive directors including the
Company Chairman are considered by the Company to be independent. 
Mr Heiden is normally invited to attend meetings as an adviser to the Committee but is not present when his own remuneration is being determined. 
The Committee received information from Mercer Human Resources (TSR monitoring), Hewitt Associates (remuneration policy) and Deloitte
(remuneration policy). None of these organisations provide any other services to the Company. Mr Heiden appointed Deloitte and Hewitt Associates as
advisers. Mercer Human Resources was appointed by the Remuneration Committee.
In accordance with the requirements of the revised Companies Act, an ordinary resolution seeking shareholders’ approval for the Remuneration report will
be proposed at the annual general meeting.
Executive remuneration policy
The Remuneration Committee’s objectives are to ensure that the Company is able to:
• attract, retain and motivate high calibre people; and
• align the interests of the executive directors and senior executives with those of shareholders by rewarding executive directors and certain senior
executives according to the overall performance of the individual businesses and Group.
As indicated in last year’s Remuneration report a comprehensive review of the policies and mechanisms of executive remuneration was undertaken. 
This review was concluded with the benefit of feedback from major shareholders and governance bodies (ABI, PIRC and RREV) on initial proposals. 
The refined proposals have been set out in a shareholder circular to be voted upon at the annual general meeting in July 2005.
The proposed changes to executive remuneration reflect both current best practice and a response to comments by governance bodies last year 
about policy, practice and disclosures. More detail of each proposed change appears in the following pages under the relevant section of this report. 
For ease of identification a summary of each proposed change is shown in shaded text areas. The proposed changes are:
•A policy of setting base salaries at the appropriate market median
•50% of total remuneration to be variable, for on-target performance
•A more appropriate balance between short and long-term variable remuneration
• One third of annual incentive paid as restricted shares that can be matched if ROIC
(1)
targets are exceeded
•Long-term incentives are to be a combination of option grants and performance shares
If shareholders approve proposals, no further awards will be made under the former option or L TIP schemes.
The proposed performance measures for the long-term incentive plan are a mix of absolute EPS and ROIC, and relative TSR. The Remuneration Committee
believe that these metrics provide a good balance between internal and external measures of executive performance.
The total potential additional cost of proposed changes for executive directors, assuming “on target” performance, is approximately £370,000 over a
three year period of the scheme. Implementation of these proposals would have no significant adverse impact on share dilution because of the relatively
small number of shares involved and the proposed use of share-settled stock appreciation rights. 
(1) ROIC is defined as operating profit adjusted for exceptional items divided by total capital invested in the business. Remuneration report 
continued
34 FKI plc Remuneration report
Within current policy, variable pay under the annual bonus and long-term incentive schemes can form a higher proportion of total pay than is typical in 
the UK market. Incentive opportunities are designed to deliver above median total rewards in the event of superior performance. Any payments made to
executive directors other than basic salary are not pensionable.
Under new proposals, on-target performance is capable of delivering around 50% of total remuneration in the form of variable remuneration. This is
achieved through redesign of the annual performance related bonus scheme and long-term incentives.
Basic salary and benefits
Basic salary is reviewed annually having regard to market practices for similar executive positions in a comparable group of companies in the engineering
sector and supported by advice from external independent consultants.
Under new proposals, salaries will be set around the median of the distribution for an appropriate peer group of comparators. For most roles this peer
group will be the Engineering & Machinery Sector. However, for the roles of Chief Executive and Group Finance Director a broader range of comparators,
including some outside of the Engineering & Machinery Sector, will be used to help determine competitive base salaries. Sources of comparative data will
normally be Hewitt Associates and The Monk Partnership.
Executive directors also receive additional taxable benefits, namely the provision of a fully expensed company car (or an allowance in lieu thereof), medical
insurance and disability insurance.
Performance appraisal 
During the year the Company introduced a structured performance appraisal process for its executive directors and executive management. The outcome
from appraisal influences decisions on salary progression and helps to identify individual and collective training and development needs.
Annual performance related bonus scheme 
The Company operates an annual performance related bonus scheme for executive directors and other schemes for certain senior executives based 
on the budgeted pre-tax profits of the Group. An annual performance related bonus scheme for the remaining executives and certain senior executives
with operating Group responsibilities also exists, based partly on the performance of the respective operating group for which they are responsible or
individual business performance and partly on the budgeted pre-tax profits of the Group as a whole.
Bonus schemes have had the potential to lift total remuneration above the median for the comparator group of companies in the event of superior
performance.
At Board level a performance related bonus of 25% of salary is payable for achieving a trigger point of T arget profit less 10% budgeted operating profit,
after interest and exceptional items but before amortisation and tax. The bonus increases on a straight line pro rata basis from 25% to 50% for achieving
between the trigger point and 100% of T arget profit. The bonus may increase further on a straight line pro rata basis from 50% to 100% for achieving
100% of T arget profit plus 10% of budgeted operating profit.
Under new proposals, the Trigger (90%), T arget (100%) and Maximum points and respective bonus percentages do not change.
However, one third of any post-tax cash bonus will be exchanged for deferred shares. If the Company’s level of ROIC reaches an average of 10% over the
following three years the deferred shares will be matched one-for-one.
This will align executive director’s interests more closely with the long-term interests of shareholders.
Long T erm Incentives
The Company has operated two forms of share based incentive schemes for executive directors and senior executives. Participants in the Long T erm
Incentives are encouraged to retain part of their vested awards, such that they are expected to accumulate a minimum shareholding in the Company of
one times basic salary over five years. 
Under new proposals, executive directors will be encouraged to accumulate a shareholding of one times basic salary over four years.
Long-term incentives will be provided through a combination of executive share options and performance shares. Each element of the incentive may 
vest independently of the other. The proposed changes to level of awards, vesting scales and performance criteria are shown below under the 
relevant heading.
1. Executive Share Option Scheme The Company has operated an Executive Share Option Scheme, approved by shareholders in 2001, designed to
encourage long-term retention of key staff. Executive directors are eligible to receive options on an annual basis. In normal circumstances, the maximum
level of grant each year to executive directors is limited to options over shares with a value of one times basic salary. 
The normal practice is to grant options within a period of six weeks following the announcement of the Company’s preliminary and interim results. 
Options are granted at the mid-market price of FKI plc ordinary shares on the third dealing day before the grant date and normally are required to 
be held for a minimum of three years before they are capable of exercise. They expire after ten years.  35 FKI plc Remuneration report
All executive options granted from July 1996 onwards may only be exercised subject to a performance condition that the Group’s growth in earnings 
per share, as defined below, must exceed the UK retail price index by 9% or more over a three year period, subject to re-testing
(1)
in subsequent years
from a rolling base. Earnings per share growth is considered to be the most appropriate measure of the Company’s underlying performance, as it requires
that there should be a demanding improvement in the Company’s performance before scheme participants can benefit from an increase in the share price.
The assessment as to whether performance conditions have been met is calculated by the Secretary to the Remuneration Committee and independently
verified by the Remuneration Committee and where appropriate advice is obtained from an external independent firm of Chartered Accountants.
Earnings per share are defined as the Company’s headline earnings per share, as calculated in accordance with the principles set out in the Statement of
Investment Practice No. 1 “The Definition of IIMR Headline Earnings” issued by the Institute of Investment Management and Research. IIMR Headline
earnings are calculated by excluding from the reported FRS 3 results any profit or loss items of a non-trading or capital nature.
A table giving full details of the directors’ options granted and exercised during the year under review is shown on pages 39-40.
(1) Re-testing was removed from the executive option scheme for options granted after April 2004.
Under new proposals, in the first year, option grants of up to two times annual salary would normally be provided to executive directors. After the first year,
Remuneration Committee would decide if any award was to be made and, if so the level of that award within the scheme rules. Options would vest
depending on achievement of EPS growth relative to the growth in the RPI. No options would vest for growth below RPI plus 3%. RPI+EPS growth 
of 3%, 4%, 5% or 6% p.a. results in vesting levels of 25%, 50%, 75% and 100% respectively. The Company has the right to direct that a share or cash
settled exercise takes place. This helps reduce the impact of dilution to shareholders.
2. Long T erm Incentive Plan (LTIP) The Company currently operates a L TIP which was approved by shareholders in 2001 and under which
participants receive annual conditional awards of shares in the Company of a value equal to up to 70% of basic salary per annum, which may vest 
only after the achievement of certain long-term performance conditions. Participants may receive up to the maximum number of shares, three years 
after the award, provided the performance conditions are met. Until then, the shares are held in a trust which is administered by a trustee company.
The level of vesting of awards under the L TIP is determined by the performance of the Company’s total shareholder return (TSR) against a comparator
group of all companies which on the date of grant are constituent companies of the Engineering and Machinery sector as determined by the FTSE
Actuaries Industry Classification Committee. The graph below shows the Company’s TSR performance compared with that of the comparator group.
No awards vest for below median performance and 50% of an award will vest for median performance. Full vesting occurs only at upper quartile
performance, and 75% of an award will vest for performance above the median but below upper quartile. Accrued dividends on vested awards are paid 
to the executives pending transfer of the shares into the name of the respective participant. The performance condition is based upon total shareholder
return (see Graph 1 below) as this is considered to be the best means of aligning the interests of directors with shareholders by requiring superior total
shareholder return.
Under new proposals, there would be a performance share element in the long-term incentive plan. Performance shares upto the equivalent of one times
salary will be granted in the first year. Vesting of these shares will be dependent on two performance criteria. Firstly, vesting of 50% of the shares will be
against the Company’s TSR performance compared with that of a peer group of companies in the FTSE Engineering & Machinery Sector. No shares vest
for below-median TSR performance, 30% vest for median performance and 100% vest for achieving or exceeding the 80th percentile.
The remaining 50% of performance shares vest against adjusted ROIC. No shares vest for ROIC below 8%. For ROIC levels between 8-9%, 9-10%, 
10-11%, more than 11%; then 40%, 60%, 80% and 100% of these performance shares vest respectively. 
(a) The graph illustrates the Company’s total shareholder return performance since 31 March 2000 relative to the FTSE Engineering & Machinery Sector.
(b) The Company is a member of the FTSE All-Share Engineering & Machinery Sector and, as such, the sector is considered to be the most appropriate comparator group upon which a broad
equity market index is calculated.
Source: Thomson Financial
Total shareholder return
140
120
100
80
60
40
20
0
31 March 00 31 March 01 31 March 02 31 March 03 31 March 04 31 March 05
This graph shows the value, by 31 March 2005, of £100 invested in FKI plc on 31 March 2000 compared with £100 invested in the FTSE  All-Share Engineering & Machinery Sector Index. 
The other points are the values at intervening financial year ends. 
FKI plc FTSE All-Share Engineering & Machinery Sector Index T able 2 below shows a list of competitor companies included during the period 2001/05.
T able 2. TSR monitoring awards peer group 2001/05
AGA FOODSERVICE FKI RENOLD
(5)
BABCOCK INTERNATIONAL
(1)
HALMA ROTORK
BODYCOTE INTERNATIONAL HENL YS GROUP
(6)
SENIOR
CASTINGS
(3)
HILL AND SMITH
(4)
SEVERFIELD-ROWEN
(3)
CHARTER IMI SPIRAX-SARCO ENGINEERING
COOKSON GROUP KIDDE
(7)
TOMKINS
DOMNICK HUNTER
(2)
METALRAX GROUP VITEC GROUP
ENODIS MOLINS
(3)
WEIR GROUP
FENNER MORGAN CRUCIBLE
Notes:
(1) Babcock International were reclassified out of FTSE All Share Engineering & Machinery Index into Support Services in 2002.
(2) Domnick Hunter fell outside the Index in December 2002 but re-entered in December 2003.
(3) Castings, Molins and Severfield-Rowen entered the peer group in 2003. Molins then fell outside the Index in December 2004.
(4) Hill & Smith entered the peer group in 2004.
(5) Renold has fallen outside of the Index.
(6) Henlys Group delisted in July 2004.
(7) Kidde were acquired by UTC in May 2005.
The assessment as to whether the performance conditions have been met is independently calculated by Mercer Human Resources Consulting in
conjunction with Datastream and is ratified by the Remuneration Committee.
A table giving full details of the directors’ L TIP awards that were granted, vested and exercised during the year under review is shown on pages 40-41.
Inland Revenue Approved Save-As-Y ou-Earn share option scheme 
This scheme was approved by shareholders in 1997 and is open to all UK employees who have completed six months’ service and who enter into 
an approved savings contract for a term of three or five years. The maximum amount which can be saved is £250 per month, and the total savings
(including interest) at the end of the term are available to purchase shares at 80% of their market value shortly before the start of the savings contract.
Executive directors may participate in this scheme on the same terms as all other employees.
In 2005 the Company will evaluate the feasibility of extending the offer of participation in savings-related share ownership schemes to its employees in
mainland Europe and North America.
Recruitment of new directors
Executive directors The Nominations Committee review and approve a recruitment specification. The director of Group HR advises the Committee 
on availability of internal candidates. If no internal candidate exists a recruitment consultant or head-hunter is engaged depending on the nature of the
assignment. The Chief Executive selects a shortlist of candidates from those presented by the recruitment consultant. A member of the Nominations
Committee joins with the Chief Executive to select from the shortlist of candidates. The Remuneration Committee approves a proposed remuneration
package. The recruitment process is concluded by the Chief Executive. 
Non-executive directors The Nominations Committee agree a recruitment specification. The Company Chairman leads the recruitment process
that normally involves an external search firm. The Company Chairman selects a shortlist of candidates for interview with the Chief Executive and
Nominations Committee. The Nomination committee then make a recommendation for appointment to the Board.
Non-executive Chairman The Nominations Committee agree a recruitment specification. They appoint one of their members to lead the recruitment
process. A search firm is normally engaged to assist with the recruitment process. A shortlist of candidates is presented to the Chief Executive who
interviews potential candidiates, and refines the shortlist. The Nominations Committee make the final selection and recommendation to the Board.
In the recent recruitment of Mr Page as non-executive Company Chairman, Sir Michael Hodgkinson led the recruitment process on behalf of the
Nominations Committee.
Service contracts
It is the Company’s policy that all executive directors have one year rolling service contracts with a one year notice period. However, in order to attract high
calibre recruits, the Remuneration Committee may exercise its discretion to offer newly recruited executive directors an initial two year notice period which
reduces to one year. Save as listed below, there are no express provisions for compensation payable upon early termination of the executive directors’
contracts and at the date of termination, other than payments due during the notice period. 
In the case of Mr Heiden, in the event of termination of his service contract by an acquiring company after a change of control of FKI, there is a provision
in his service contract for a payment of liquidated damages equivalent to one year’s pay and contractual benefits without deduction for mitigation and/or
accelerated receipt. 
Remuneration report 
continued
36 FKI plc Remuneration report The contract dates and notice periods for the executive directors during the year were as follows:
Name of director Date of contract Notice period
P Heiden 16 December 2002 One year
J A Biles 14 January 1998 One year
Resigned from the Board 
30 June 2004
R L Gott 7 April 2005 One year
N Bamford 2 June 2004 One year
The non-executive directors do not have service contracts. The dates of the current non-executive directors’ appointments are as follows;
Date of Date of 
Non-executive director Appointment date last re-election next re-election
Mr C R N Clark 1 January 2000 23 July 2003 20 July 2005
Mr R P Edey 6 November 1996 23 July 2003 21 July 2006
Sir Michael Hodgkinson 1 April 2000 23 July 2003 21 July 2006
Mr C Matthews 11 September 2003 21 July 2004 21 July 2007
Mr G F Page C.B.E. 1 August 2004 – 20 July 2005
Succession planning
During the year, the Company introduced a succession planning process for its executive directors and senior executive management as part of its risk
management process. The Board considered the first executive succession plan at its meeting in November 2004 subsequent to which the Executive
Committee has continued to manage the development of potential successors.
Pensions
With the exception of Mr Heiden, executive directors are members of the FKI Group Pension Scheme, a defined benefit scheme with a normal retirement
age for directors of 60 years.
Its main features, in respect of executive directors, are:
(a) A cash benefit on death in service of four times annual rate of the highest average basic salary (restricted to the earnings cap where it applies) during
any three consecutive years within the ten years before the member’s date of death.
(b) Pensions payable in the event of ill health.
(c) Pensions for dependants on a member’s death generally equal to half the member’s prospective retirement pension at 60 on death in service, or half
the member’s pension entitlement on death in retirement.
(d) Member contributions are 7% of basic salary (restricted to the earnings cap where it applies). 
There are funded and unfunded unapproved pension arrangements to increase the pension benefits where because of Inland Revenue limitations
(including those resulting from the earnings cap) these cannot be paid in total from the Scheme. Such arrangements apply to Mr Gott. 
In lieu of participation in the FKI Group Pension Scheme, Mr Heiden receives contributions into a funded unapproved retirement benefit scheme equivalent
to 50% of his basic salary.
Details of the directors’ pension benefits during the year under review are shown on page 39.
Non-executive directorships
The Company believes that there are significant benefits to the individual and the Company from executive directors accepting non-executive directorships
in other organisations.
Each executive director may accept one non-executive directorship provided that it does not conflict with the Company’s interests and is approved by the
Board. Fees from an external directorship may be retained by the director concerned.
Mr Heiden fulfilled a role as non-executive director. Details of fees received in 2004/05 in respect of this external role are show below:
Mr P Heiden Non executive director Bunzl plc £40,100
37 FKI plc Remuneration report Directors’ emoluments 
Pension Pension
T axable contributions contributions
Basicbenefits Other T otal T otal 2005 2004
salary/fees (a) Bonus (b) 2005 2004 (c) (c)
Name of director £000 £000 £000 £000 £000 £000 £000 £000
Executive directors
Mr P Heiden 483 47 169 242 941 1,008 – –
Mr N Bamford
(1)
200 19 70 – 289 – – –
Mr J A Biles
(2)
212 16 86 – 314 396 41 52
Mr R L Gott 250 20 – – 270 308 93 –
Mr S D Jones 78 9 12 – 99 320 – –
Non-executive 
directors
Mr G F Page
(3)
90––– 90 – – –
Mr K Orrell-Jones
(3)
52––– 52 125 – –
Mr C R N Clark 37 – – – 37 35 – –
Mr R P Edey 37 – – – 37 35 – –
Sir Michael Hodgkinson 34 – – – 34 32 – –
Mr C Matthews 34 – – – 34 18 – –
Aggregate 
emoluments 1,507 111 337 242 2,197 2,277 134 52
(a) T axable benefits consist of health insurance, company car allowances, life assurance. 
(b) ”Other” represents payments to a director in lieu of payments into a pension fund.
(c) Contributions paid in respect of funded unapproved retirement benefit schemes.
(1) Mr Bamford joined the Board of Directors on 1 April 2004. No disclosures were made regarding Mr Bamford prior to him joining the Board.
(2) Mr Biles resigned as a director on 30 June 2004 and left the Company on 31 December 2004.
(3) Mr Page joined FKI plc as non-executive director on 1 August 2004. Mr Orrell-Jones retired from his position as non-executive Chairman on 1 September 2004. The table above shows fees
for only the relevant part of the year with respect to both the non-executive Chairmen.
Non-executive directors’ fees
The fees paid to non-executive directors and the Chairman are determined by the Board after reviewing fee payments for comparable positions within
similar organisations, and are normally reviewed every three years. The last review was in 2004.
Board changes
Mr Bamford joined the Board on 1 April 2004.
Mr Biles resigned from the Board on 30 June 2004 and left FKI on 31 December 2004. For the period April to December 2004 Mr Biles received 
his normal remuneration and benefits. During the period July to December 2004 Mr Biles was available to the Company at the discretion of the 
Chief Executive. 
On leaving in December he received a payment of £204,975 (less accelerated benefit discount) which equated to six months normal remuneration and
benefits, and a bonus (£64,125) determined on a discretionary basis. He will continue to have use of his company car until 30 June 2005. He may then
purchase the car for a fair value at July 2005. A sum of £26,464 was withheld from the payment made to him in December in respect of the company car.
Any adjustment necessary will be made to the withholding based upon the agreed value.
The Company paid to the FKI Group Pension Fund a sum of £32,400 as the cost of Mr Biles’ early pension not being subject to a actuarial reduction for
benefits accrued up to his leaving date. After leaving Mr Biles may receive benefits from the share options and L TIPS shown in the tables below, subject 
to the rules of both schemes.
Mr S D Jones resigned from the Board on 31 March 2004 and left FKI on 30 July 2004. He received his normal remuneration and benefits from April 
to July. During this period he continued in full time employment with FKI. He then received a payment of £214,468 (less accelerated benefit discount)
which equated to eight months contractual remuneration and benefits, and a discretionary bonus of £11,700 in respect of the period April to July 2004.
After leaving Mr Jones received benefits from L TIPS, within the rules of the scheme, and may receive further benefits from remaining share options. 
Remuneration report
continued
38 FKI plc Remuneration report 39 FKI plc Remuneration report
Directors’ pension benefits 
The undernoted directors were members of a defined benefit scheme provided by the Group during the year. Mr P Heiden is responsible for his own
pension provision. Pension entitlements and corresponding transfer values were as follows during the year:
Transfer value
of increase Increase in
Increase in in accrued Transfer Transfer transfer
accrued benefit less Accrued Accrued value of value of value less
pension contributions pension at pension at pension at pension at contributions
(excluding made by 31 March 31 March 31 March 31 March made by
inflation) directors 2005 2004 2005 2004 directors
Name of director £000 £000 £000 £000 £000 £000 £000
Mr J A Biles 1.3 25.1 11.8 10.2 232.6 161.6 71.0
Mr R L Gott 1.7 0.6 23.8 21.5 209.7 168.1 26.2
Mr N Bamford 8.1 63.1 44.8 35.6 358.0 179.6 167 .2
Note: 
1. Mr Biles retired on 31 December 2004. His benefits were augmented so that no early retirement factor was applied to his accrued pension. This is reflected in the transfer values shown.
2. In addition to the accrued pension shown in the table, Mr Gott will receive a fixed pension of £24,400 from age 65. This arises from funds transferred-in to the FKI Group Scheme from a
previous employer’s scheme. The value of this pension is excluded from the transfer values shown.
3. Mr Bamford’s pension promise was retrospectively augmented on becoming a director. The normal retirement age was reduced from 65 to 60 and the accrual rate improved from 60ths to a
target of 50% of salary at age 60. 
The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the year or date of leaving the pension scheme or ceasing to accrue further
benefit if earlier.
The increase in accrued pension during the year excludes any increase for inflation.
The transfer values have been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11, although no adjustment has been made for any under funding of
the Scheme. The calculation of each transfer value includes an allowance for the cost of death before retirement benefits.
The change in the amount of the transfer value over the year is impacted by the following elements:
a) the transfer value of the increase in accrued pension (net of inflation)
b) the transfer value of the increase in accrued pension (due to inflation)
c) the increase in the transfer value of accrued pension at the beginning of the year due to ageing
d) the impact of any change in the economic or mortality assumptions underlying the transfer value basis
e) the effect of a. to d. less the director’s own contributions over the year.
The change in the amount of the transfer value over the year includes the effect of fluctuations in the transfer value due to factors beyond the control of the Company and directors, such as
stock market movements which are reflected in [d.] above.
Directors have the option to pay additional voluntary contributions. However, neither the contributions nor the resulting benefits are included in the table.
Mr Biles’ and Mr Gott’s UK pension scheme benefits are subject to the Inland Revenue’s earnings cap. This includes the period of service prior to Mr Gott becoming a director.
During the year the Company paid contributions amounting to £40,591 to a Funded Unapproved Retirement Scheme for Mr Biles. 
For service from 1 April 2004, Mr Gott is being provided with an additional 37% per annum of salary to provide further pension benefits on a defined contribution basis. Prior to 1 April 2004
the Company has agreed to provide benefits in excess of the earnings cap through an Unfunded Unapproved Retirement Benefits Scheme.
During the review of executive remuneration mentioned on page 33, executive benefits were included in the process and found to be competitive or in
some cases in need of further examination at a later date following clarification of pending new regulations, e.g. retirement benefits. It is anticipated that
any change in retirement benefit arrangements will be at nil cost to the Company.
Directors’ share options
At Granted Exercised Lapsed At Exercise
1 April during during during 31 March price Date
Date of 2004 the year the year the year 2005 per share exercisable Expiry
grant Number Number Number Number Number Pence from date
P Heiden 
Executive share option 06/01/03 1,022,727––– 1,022,727 88.00 06/01/06 06/01/13
Executive share option 02/02/04 772,532––– 772,532 116.50 02/02/07 02/02/14
N Bamford
Executive share option 19/12/94 50,000 – – 50,000 – 144.50 – –
Executive share option 08/12/95 50,000––– 50,000 162.00 08/12/98 08/12/05
Executive share option 04/12/01 36,140––– 36,140 186.75 04/12/04 03/12/11
Executive share option 08/07/02 48,214––– 48,214 140.00 08/07/05 07/07/12
Executive share option 06/06/03 141,234––– 141,234 77 .00 06/06/06 05/06/13
Executive share option 11/06/04 – 250,000 – – 250,000 115.75 11/06/07 11/06/14
Savings related option 23/07/03 26,541––– 26,541 60.00 n/a n/a Directors’ share options continued
At Granted Exercised Lapsed At Exercise
1 April during during during 31 March price Date
Date of 2004 the year the year the year 2005 per share exercisable Expiry
grant Number Number Number Number Number Pence from date
J A Biles
Executive share option 04/12/01 120,480––– 120,480 186.75 04/12/04 04/12/11
Executive share option 08/07/02 170,000––– 170,000 140.00 08/07/05 08/07/12
Executive share option 06/06/03 480,195 – – – 480,195 77 .00 06/06/06 06/06/13
Savings related option 23/07/03 26,541––– 26,541 60.00 n/a n/a
R L Gott
Executive share option 22/07/94 15,000 – – 15,000 – 172.00 22/07/97 22/07/04
Executive share option 08/12/95 40,000––– 40,000 162.00 08/12/98 08/12/05
Executive share option 22/07/97 50,000––– 50,000 166.00 22/07/00 22/07/07
Executive share option 09/12/97 50,000––– 50,000 182.50 09/12/00 09/12/07
Executive share option 09/08/99 30,000––– 30,000 218.00 09/08/02 09/08/09
Executive share option 04/12/01 35,340––– 35,340 186.75 04/12/04 04/12/11
Executive share option 08/07/02 125,000––– 125,000 140.00 08/07/05 08/07/12
Executive share option 06/06/03 409,091––– 409,091 77 .00 06/06/06 06/06/13
Executive share option 11/06/04 – 300,000 – – 300,000 115.75 11/06/07 11/06/14
Savings related option 23/07/03 15,416––– 15,416 60.00 n/a n/a
Notes:
1. All executive share options were granted at nil cost to the director concerned.
2. The market price of an ordinary share on 31 March 2005 was 106.25p (2004: 111p) and the range during the year was 105p to 137 .5p. All but the Executive Share Options granted in 2003
are “underwater” .
3. Executive share options granted prior to 1996 are not subject to a performance condition. All executive share options granted in 1999 and subsequent years are exercisable from the dates
stated above, subject to them satisfying the performance condition stated in the policy section.
4. Executive Share Options granted from April 2004 were no longer subject to re-testing.
5. Mr S D Jones, as a former executive director of the Company may receive further benefits from pending share options under the rules of the scheme.
Directors’ LTIPs 
Shares Value Shares
allocated Shares of award allocated Cash
at Shares Shares lapsed Shares at date at Market awarded
1 April allocated vested during year transferred of grant 31 March Performance Earliest value in lieu of 
Date of 2004 during year during year (Note 1) during year (Note 2) 2005 period date for (Note 3) dividends
Awards award Number Number Number Number Number £ Number end date transfer £ £
P Heiden
06/01/03 357 ,955––––316,790 357 ,955 06/01/06 06/01/06 380,370 –
09/06/03 409,091 – – – 342,614 409,091 09/06/06 09/06/06 434,659 –
11/06/04 292,095––– 338,100 292,095 11/06/07 11/06/07 310,350 –
N Bamford
28/07/98 32,609–––– 55,272 32,609 28/07/02 28/07/02 34,647 489
12/08/99 8,616–––– 55,000 8,616 12/08/03 12/08/03 9,155 129
04/12/01 25,300 – – 25,300 – 37,115 – n/a n/a n/a –
08/07/02 33,750–––– 48,262 33,750 08/07/05 08/07/05 35,859 – 
09/06/03 65,909–––– 55,198 65,909 09/06/06 09/06/06 70,028 –
11/06/04 – 120,950–––140,000 120,950 02/06/07 02/06/07 128,509 –
J A Biles
(4)
12/08/99 30,658––––58,710 30,658 n/a n/a 32,574 511
04/12/01 84,330 – – 84,330 – 157 ,486 – n/a n/a n/a –
08/07/02 119,000––––170,170 119,000 08/07/05 08/07/05 126,438 –
09/06/03 224,091 – 84,034 140,057 – 187 ,676 84,034 – 04/03/05 89,286 1,401
Remuneration report
continued
40 FKI plc Remuneration report Directors’ LTIPs continued
Shares Value Shares
allocated Shares of award allocated Cash
at Shares Shares lapsed Shares at date at Market awarded
1 April allocated vested during year transferred of grant 31 March Performance Earliest value in lieu of 
Date of 2004 during year during year (Note 1) during year (Note 2) 2005 period date for (Note 3) dividends
Awards award Number Number Number Number Number £ Number end date transfer £ £
R L Gott
04/12/01 24,730 – – 24,730 – 46,183 – n/a n/a n/a –
08/07/02 87 ,500_–––125,125 87 ,500 08/07/05 08/07/05 92,969 –
09/06/03 190,909––– 159,886 190,909 09/06/06 09/06/06 202,841 –
11/06/04 –151,188–––175,000 151,188 02/06/07 02/06/07 160,637 –
Notes:
1. The Company’s total shareholder return performance for the three year performance period that ended in March 2005 ranked below median against its comparator group and under the terms
of the rules applicable to the 2001 awards, 100% of the awards lapsed.
2. The price of an ordinary share on 11 June 2004, being the date that awards were made during the year was 115.75p. The awards are subject to the performance conditions for L TIP awards,
as outlined in the policy section.
3. The market value of shares as yet unvested is stated at 106.25p per share, being the closing mid–market price on 31 March 2005. As at 31 March 2005, the Company was ranked below
median in its comparator group for the awards granted in 2001. Therefore the awards granted in 2001 lapsed. If the ranking position for the award made in 2002 were to be maintained until the
end of the respective performance period, none of the awards granted in 2002 would vest.
4. During the year, in accordance with the rules of the L TIP, the Remuneration Committee permitted the early vesting of a pro rata number of shares 84,034 to Mr Biles following termination of his
employment by reason of redundancy.
5. Mr S D Jones, as a former executive director, received benefits from restricted L TIPs, within the rules of the scheme, following his departure from the Company.
Directors’ beneficial interests in ordinary shares of FKI plc
As at As at
31 March 1 April  
2005 2004 or
subsequent date
of appointment
Ordinary shares Ordinary shares
Name of director Number Number
G F Page 15,000 –
N Bamford 34,263 34,263
(1)
C R N Clark 6,174 6,174
R P Edey 6,250 6,250
R L Gott 23,098 23,098
P Heiden 160,000 130,000
Sir Michael Hodgkinson 5,370 5,370
C Matthews – –
(1) This share holding was accumulated prior to Mr Bamford joining the Board of FKI plc. 
Any ordinary shares required to fulfil entitlements under the current L TIP are provided by the FKI Employee Benefit Trusts. As beneficiaries under the
Employee Benefit Trusts, the directors are deemed to be interested in the shares held by the Employee Benefit Trusts which, at 31 March 2005, amounted
to 1,836,302 FKI plc ordinary shares.
No changes took place in the interest of directors between 31 March 2005 and 9 June 2005. FKI’s register of directors’ interests is open to inspection and
contains full details of directors’ shareholdings and options.
Auditable information
The information in the Remuneration report subject to audit is that included in the tables and related notes in the section on directors’ emoluments,
directors’ L TIPs, directors’ share options and directors’ pension benefits.
By order of the Board
C R N Clark Chairman of the Remuneration Committee
9 June 2005
41 FKI plc Remuneration report We have audited the Group’s financial statements for the year ended 
31 March 2005 which comprise the Consolidated profit and loss account,
Consolidated balance sheet, Company balance sheet, Consolidated cash
flow statement, Consolidated statement of total recognised gains and losses,
Consolidated reconciliation of movements in equity shareholders’ funds, the
related notes 1 to 34 and the Principal Subsidiary Undertakings on page 78.
These financial statements have been prepared on the basis of the
accounting policies set out therein. We have also audited the information 
in the Remuneration Report that is described as having been audited.
This report is made solely to the Company's members, as a body, in
accordance with Section 235 of the Companies Act 1985. Our audit work
has been undertaken so that we might state to the Company's members
those matters we are required to state to them in an auditors’ report and 
for no other purpose. T o 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, including the
financial statements which are required to be prepared in accordance with
applicable United Kingdom law and accounting standards as set out in the
Statement of Directors’ Responsibilities in relation to the financial statements.
The directors are also responsible for preparing the Remuneration Report.
Our responsibility is to audit the financial statements and the part of the
Remuneration Report to be audited in accordance with relevant legal and
regulatory requirements, United Kingdom Auditing Standards and the
Listing Rules of the Financial Services Authority.
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 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 or the Listing Rules regarding directors’
remuneration and transactions with the Group is not disclosed.
We review whether the Corporate governance statement reflects the
Company’s compliance with the nine provisions of the 2003 Financial
Reporting Council Combined Code specified for our review by the Listing
Rules of the Financial Services Authority, and we report if it does not. We are
not required to consider whether the Board’s statements on internal control
cover all risks and controls, or form an opinion on the effectiveness of the
Group’s corporate governance procedures or its risk and control procedures.
We read other information contained in the Annual report and consider
whether it is consistent with the audited financial statements. This other
information comprises the Directors’ Report, unaudited part of the
Remuneration Report, Chairman’s Statement, Chief Executive’s Review,
Operating and Financial Reviews and Corporate Governance Statement. 
We consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements. Our responsibilities do not extend to any other information.
Basis of audit opinion 
We conducted our audit in accordance with United Kingdom 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 Remuneration
Report to be audited. It also includes an assessment of the significant
estimates and judgements made by the directors in the preparation 
of the financial statements, and of whether the accounting policies are
appropriate to the Group’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the financial
statements and the part of the 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
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 of 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 Remuneration Report to be
audited have been properly prepared in accordance with the Companies
Act 1985.
Ernst & Y oung LLP 
Registered Auditor
London
9 June 2005
Independent auditors’ report 
to the members of FKI plc
42 FKI plc  Y ear ended 31 March 2005 Y ear ended 31 March 2004
Before
Before exceptional
exceptional Exceptional items and Exceptional
items and items and goodwill items and
goodwill goodwill amortisation goodwill T otal
amortisation amortisation T otal As restated amortisation As restated
Note £m £m £m £m £m £m
Turnover
Continuing operations 1,208.0 – 1,208.0 1,194.8 – 1,194.8 
Discontinued operations 82.5 – 82.5 150.3 – 150.3 
Total turnover 2 1,290.5 – 1,290.5 1,345.1 – 1,345.1 
Cost of sales 3 (980.2) (3.4) (983.6) (1,009.0) (34.2) (1,043.2)
Gross profit 310.3 (3.4) 306.9 336.1 (34.2) 301.9
Net operating expenses 3 (214.5) (26.7) (241.2) (239.6) (29.8) (269.4)
Operating profit before exceptional items
and goodwill amortisation 95.8 – 95.8 96.5 – 96.5 
Reorganisations, closures and impairments 7 – (3.4) (3.4) –(34.2) (34.2)
Goodwill amortisation – (26.7) (26.7) – (29.8) (29.8)
Continuing operations 101.2 (33.7) 67 .5 104.1 (52.7) 51.4
Discontinued operations (5.4) 3.6 (1.8) (7.6) (11.3) (18.9)
Operating profit 2,4 95.8 (30.1) 65.7 96.5 (64.0) 32.5 
Loss on sale and closure of businesses 7 –(102.7) (102.7) –(34.4) (34.4)
Profit on sale of tangible fixed assets 7 – 0.8 0.8 –13.9 13.9 
(Loss)/profit on ordinary activities 
before interest 95.8 (132.0) (36.2) 96.5 (84.5) 12.0 
Net interest payable 8 (23.6) – (23.6) (23.3) – (23.3)
Other net finance charges 9 (1.8) – (1.8) (6.4) – (6.4)
(Loss) on ordinary activities 
before taxation 70.4 (132.0) (61.6) 66.8 (84.5) (17 .7)
T ax on (loss) on ordinary activities 10 (18.1) (0.2) (18.3) (16.9) 13.7 (3.2)
(Loss) on ordinary activities 
after taxation 52.3 (132.2) (79.9) 49.9 (70.8) (20.9)
Equity dividends 12 (26.2) – (26.2) (26.1) – (26.1)
Retained loss for the financial year 28 26.1 (132.2) (106.1) 23.8 (70.8) (47 .0)
(Loss) per share 13 (13.7)p (3.6)p
Adjusted earnings per share 13 9.0p 8.6p
Diluted (loss) per share 13 (13.6)p (3.6)p
Amounts for 2004 have been restated on adoption of UITF 38 “Accounting for ESOP Trusts” .
Consolidated profit and loss account
43 FKI plc  31 March 31 March 31 March 31 March
2005 2005 2004 2004
As restated As restated
Note £m £m £m £m
Fixed assets
Goodwill 14 363.3 438.1 
T angible assets 15 265.6 283.6 
Investments 16 0.6 0.6 
629.5 722.3 
Current assets
Stocks 17 202.0 209.8 
Debtors: falling due within one year 18 336.3 333.9 
falling due after more than one year 18 5.5 7 .0 
Marketable securities and deposits 32 77 .3 70.4 
Cash 78.7 84.6 
699.8 705.7 
Creditors: amounts falling due within one year
Bank and other borrowings 19 (6.6) (49.6)
Other creditors 19 (438.0) (439.9)
(444.6) (489.5)
Net current assets 255.2 216.2
T otal assets less current liabilities 884.7 938.5
Creditors: amounts falling due after more than one year
Bank and other borrowings 20 (500.1) (454.5)
Other creditors 20 (32.5) (41.6)
Provisions for liabilities and charges 24 (86.0) (71.4)
(618.6) (567 .5)
Net assets before pension asset/(liability) 266.1 371.0
Pension asset 26 4.1 6.8 
Pension liability 26 (125.9) (138.7)
Net assets 144.3 239.1 
Capital and reserves
Called up share capital 27 58.2 58.2 
Share premium account 28 156.0 155.6 
Capital redemption reserve 28 2.0 2.0 
Own shares 28 (2.9) (2.9)
Profit and loss account 28 (69.2) 26.0
Equity shareholders’ funds 144.1 238.9 
Equity minority shareholders’ interests 0.2 0.2 
T otal capital employed 144.3 239.1 
These financial statements were approved by the Board of Directors on 9 June 2005 and signed on its behalf by:
P Heiden, Director
N Bamford, Director
Amounts for 2004 have been restated on adoption of UITF 38 “Accounting for ESOP Trusts” .
Consolidated balance sheet
44 FKI plc  31 March 31 March 31 March 31 March
2005 2005 2004 2004
As restated As restated
Note £m £m £m £m
Fixed assets
T angible assets 15 0.6 10.8 
Investments 16 2,562.9 2,831.9
2,563.5 2,842.7
Current assets
Debtors: falling due within one year 18 1,012.3 1,263.8 
falling due after more than one year 18 – 80.2 
Marketable securities and deposits 6.0 18.7 
Cash 1.8 16.4 
1,020.1 1,379.1 
Creditors: amounts falling due within one year
Bank and other borrowings 19 (31.4) (36.6)
Other creditors 19 (2,594.4) (3,389.1)
(2,625.8) (3,425.7)
Net current liabilities (1,605.7) (2,046.6)
T otal assets less current liabilities 957 .8 796.1
Creditors: amounts falling due after more than one year
Bank and other borrowings 20 (403.4) (353.2)
Other creditors 20 (27 .3) (110.7)
(430.7) (463.9)
Net assets before pension liability 527 .1 332.2
Pension liability 26 (91.2) (100.3)
Net assets 435.9 231.9
Capital and reserves
Called up share capital 27 58.2 58.2 
Share premium account 28 156.0 155.6 
Capital redemption reserve 28 2.0 2.0 
Own shares 28 (2.9) (2.9)
Profit and loss account 28 222.6 19.0
Equity shareholders’ funds 435.9 231.9
These financial statements were approved by the Board of Directors on 9 June 2005 and signed on its behalf by:
P Heiden, Director
N Bamford, Director
Amounts for 2004 have been restated on adoption of UITF 38 “Accounting for ESOP Trusts”.
Company balance sheet
45 FKI plc  Y ear ended Y ear ended
31 March 31 March
2005 2004
Note £m £m
Net cash inflow from operating activities 31 72.0 105.0
Returns on investments and servicing of finance
Interest received 3.0 2.9 
Interest paid (33.9) (30.9)
Realised from sale of interest rate swaps – 45.3 
Net cash (outflow)/inflow from returns on investments and servicing of finance (30.9) 17.3 
T ax paid (15.1) (14.0)
Capital expenditure and financial investment
Purchase of tangible fixed assets (24.6) (24.6)
Sale of tangible fixed assets 11.0 21.0 
Net cash outflow from capital expenditure and financial investment (13.6) (3.6)
Acquisitions and disposals
Purchase of businesses – (0.6)
Net cash disposed with businesses (2.0) –
Payment of deferred purchase consideration (0.5) (1.0)
Sale and termination of businesses 34 18.9 –
Net cash inflow/(outflow) from acquisitions and disposals 16.4 (1.6)
Equity dividends paid (26.2) (10.5)
Cash inflow before management of liquid resources and financing 2.6 92.6
Management of liquid resources
Increase in marketable securities and short-term deposits (9.1) (24.8)
Financing
Issue of ordinary share capital 0.4 – 
Repayments of loans and finance leases (2.7) (46.3)
Net cash outflow from financing (2.3) (46.3)
(Decrease)/increase in cash in the year 32, 33 (8.8) 21.5 
Amounts for 2004 have been restated on adoption of UITF 38 “ Accounting for ESOP T rusts” .
Consolidated cash flow statement
46 FKI plc  Y ear ended Y ear ended
31 March 31 March
2005 2004
As restated
£m £m
Loss after taxation attributable to shareholders (79.9) (20.9)
Net currency translation differences on foreign currency net investments and loans (net of tax) (1.6) (22.3)
Actuarial (loss)/gain net of deferred tax on defined benefit pensions and other post-retirement benefits (1.4) 21.0 
Total recognised losses relating to the year (82.9) (22.2)
Consolidated reconciliation of movements 
in equity shareholders’ funds
Y ear ended Y ear ended
31 March 31 March
2005 2004
As restated
£m £m
T otal recognised losses relating to the year (82.9) (22.2)
Dividends (26.2) (26.1)
Movement on L TIP 0.3 –
Share capital issued 0.4 – 
Goodwill transferred to profit and loss account in respect of disposals 13.6 2.7 
Net reduction from shareholders’ funds (94.8) (45.6)
Opening equity shareholders’ funds as previously reported 239.1 284.3 
Prior year adjustment (0.2) 0.2
Opening equity shareholders’ funds as restated 238.9 284.5 
Net reduction from shareholders’ funds, as above (94.8) (45.6)
Closing equity shareholders’ funds 144.1 238.9
Amounts for 2004 have been restated on adoption of UITF 38 “Accounting for ESOP Trusts” .
Consolidated statement 
of total recognised gains and losses
47 FKI plc  Notes to the financial statements
48 FKI plc 
1) Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards using the historical cost convention.
Change in accounting policy
With effect from 1 April 2004, the Group implemented UITF 38 “Accounting for ESOP Trusts”. As required by UITF 38, own shares held by the FKI 
Employee Share Trust have been reclassified from fixed asset investments to a reduction in shareholders’ funds. The shares will be held at historic cost 
until they are disposed of. Any profits or losses on the disposal of own shares are treated as a movement in reserves rather than a profit or loss item.
UITF 17 “Employee Share Schemes” was also revised at the same time. The revised UITF 17 requires that the charge to profit and loss account in relation 
to share awards is to be based on the intrinsic value of the shares at date of grant rather than historic cost.
As a result of implementation of UITF 38, comparative figures have been restated. The impact on the profit and loss account for the Group and Company in
the year ended 31 March 2004, is a reduction in profit after taxation of £0.4 million.
Basis of consolidation
The Group financial statements are made up to 31 March and comprise the financial statements of the Company and all of its subsidiary undertakings,
together with the Group’s share of the results of associated undertakings.
The results of companies acquired or disposed of during the year are included from or up to the effective date of acquisition or disposal respectively.
Acquisitions
The net assets of companies or businesses acquired are incorporated into the Group financial statements at their fair value to the Group at the date of
acquisition. Where the fair value of the purchase consideration exceeds the fair value of the net assets acquired, the difference is treated as goodwill 
arising on acquisition.
Goodwill
Goodwill arising on acquisitions prior to 1 April 1998 was written off to reserves. From 1 April 1998, goodwill arising on acquisitions is capitalised in the
balance sheet and amortised over periods not exceeding 20 years, in line with the directors’ view of its useful economic life. On disposal of a previously
acquired business, any attributable goodwill that was previously written off to reserves or that has not been amortised through the profit and loss account
is included in determining the profit or loss on disposal.
Investments
Fixed asset investments are stated at cost, less provision for any impairment in value. 
Associated undertakings
Associated undertakings are those in which the Group has a participating interest and over which it exerts significant influence.
The Group’s share of the results of associated undertakings is included in the consolidated profit and loss account and its interest in their net assets is
included in investments in the consolidated balance sheet under the equity method of accounting.
Tangible fixed assets and depreciation
T angible fixed assets are stated at cost, less depreciation and provision for any impairment in value. Depreciation is provided on tangible fixed assets, 
other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset on a straight line basis over their expected
useful lives as follows:
Freehold buildings 50 years
Long leasehold property 50 years
Short leasehold property over the lease term
Plant and machinery – heavy production 15 years
– other 10 years
Office equipment 5 to 10 years
Motor vehicles 3 to 5 years 1) Accounting policies continued
Leasing and hire purchase commitments
Assets obtained under hire purchase contracts and leases which result in the transfer to the Group of substantially all the risks and rewards of ownership
(finance leases) are capitalised as tangible fixed assets at the estimated present value of underlying lease payments and are depreciated over their
expected useful lives. The capital elements of future lease obligations are recorded as liabilities whilst the finance elements of the rental payments 
are charged to the profit and loss account over the period of the lease or hire purchase contract so as to produce a constant rate of charge on the
outstanding balance of the net obligation in each period.
Rentals paid under other leases (operating leases) are charged to the profit and loss account on a straight-line basis over the lease term.
Stocks and work in progress
Stocks are stated at the lower of cost, on a first-in first-out basis, and net realisable value after making due allowance for any obsolete or slow moving
items. In the case of finished goods and work in progress, cost comprises direct materials, direct labour and an appropriate proportion of manufacturing
overheads, based on normal levels of activity.
Long-term contracts are stated at costs incurred, which comprise cost of direct materials and labour plus appropriate overhead expenses, net of amounts
transferred to cost of sales and after deducting foreseeable losses and payments on account not matched with turnover. T o the extent that payments on
account exceed the value at which long-term contracts are stated, they are included as “payments received on account” within creditors. 
Research and development
Development expenditure on clearly defined projects whose outcome can be assessed with reasonable certainty is capitalised and amortisation is
commenced in the year the expenditure is incurred by reference to the lesser of the life of the project or three years. 
All other research and development expenditure is written off in the year in which it is incurred.
T axation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid, or recovered, using the tax rates and laws that have
been enacted or substantially enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences, subject to the exceptions noted below, that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at 
the balance sheet date. Timing differences are differences between the Group’s taxable profits and its results as stated in the financial statements that 
arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is not recognised when fixed assets are sold and it is more likely than not that the taxable gain will be rolled over, being charged to tax only if
and when the replacement assets are sold.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based
on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction or at the contracted rate if the transaction is covered by a
forward foreign currency contract. Monetary assets and liabilities denominated in foreign currencies are re-translated at the rate of exchange ruling at the
balance sheet date.
Exchange gains and losses arising on foreign currency borrowings used to finance the Group’s foreign currency equity investments are taken to reserves
to the extent that they can be offset against the exchange differences arising on the equity investments.
On consolidation, the balance sheets of non-United Kingdom subsidiary and associated undertakings and assets and liabilities denominated in foreign
currencies held by United Kingdom companies are translated into sterling at the rates of exchange ruling at the balance sheet date. Profit and loss
accounts and cash flows of overseas subsidiary and associated undertakings are translated into sterling at average rates of exchange prevailing during the
year, with the year end adjustment to closing rates being taken to reserves. Differences on exchange arising from the re-translation at year end rates of the
net investment in overseas subsidiary and associated undertakings at the beginning of the year are taken to reserves. All other exchange differences are
dealt with in the determination of profit for the financial year.
49 FKI plc Notes to the financial statements 1) Accounting policies continued
Turnover
Turnover comprises the invoiced value of goods and services supplied by the Group exclusive of value added taxes, sales taxes and intra-group
transactions. 
In respect of long-term contracts, turnover is calculated on a percentage completion basis, reflecting the extent to which the right to consideration has
been earned. The amount by which recorded turnover on contracts is in excess of payments on account is recorded in debtors as “amounts recoverable
on contracts” . Attributable profit is recognised on long-term contracts only when the profitable outcome of the contract can be reasonably foreseen 
and is calculated so as to reflect the proportion of the work carried out at the year end. Full provision is made in respect of foreseeable losses on
uncompleted contracts.
Pensions and other post-retirement benefits
a) Defined contribution pension schemes
Pension costs for the Group’s defined contribution pension schemes are recognised within operating profit at an amount equal to the contributions payable
to the scheme for the period. Any prepaid or outstanding contributions at the balance sheet date are recognised respectively as assets or liabilities within
prepayments or accruals.
b) Defined benefit pension schemes and other post-retirement benefits
Pension liabilities are measured at their present value in accordance with actuarial assumptions that are updated at each balance sheet date. 
Pension assets are measured at fair value. The net pension liability or asset, after deferred tax, is recognised in the balance sheet.
Pension costs for the Group’s defined benefit pension schemes and other post-retirement benefits are recognised as follows:
1.Within operating profit
•The current service cost arising from employee service in the current period;
•The prior service cost related to employee service in prior periods arising in the current period as a result of improvements to benefits;
• Gains and losses arising on unanticipated settlements or curtailments where the item that gave rise to the settlement or curtailment is recognised within
operating profit.
2.Within other finance cost or income
•The interest cost on the liabilities, calculated by reference to the scheme liabilities and discount rate at the beginning of the period and allowing for
changes during the period;
•The expected return on assets, calculated by reference to the assets and their long-term expected rate of return at the beginning of the period and
allowing for changes during the period.
3.Within the statement of total recognised gains and losses
• On the scheme assets – the difference between the expected and actual return on assets;
• On the scheme liabilities – (a) the differences between the actuarial assumptions and actual experience, and (b) the effect of changes in 
actuarial assumptions.
Derivatives
Derivatives for hedging purposes are held off balance sheet with the exception of cross currency swaps, where the net exchange gain/loss as a result 
of exchange rate movements is recorded on the balance sheet or reflect the substance of the transaction. The movements in the balance sheet value 
are recorded in reserves since the borrowing is a hedge of the associated currency net assets.
The net interest cost/income arising on interest rate swaps is charged/credited to the interest line in the profit and loss account on an accruals basis.
Monetary discounts or premiums arising on the disposal or other early termination of interest rate swaps are amortised over the original unexpired life 
of the swap against interest charges in the profit and loss account.
Finance costs
Finance costs are recognised in the profit and loss account over the term of the instruments to which they relate at a constant rate on the carrying amount.
Debt
Debt is initially stated at the amount of the net proceeds after deduction of issue costs. The carrying amount is increased by the finance cost in respect of
the accounting period and reduced by the payments made in the period.
Notes to the financial statements 
continued
50 FKI plc Notes to the financial statements 2) Segmental information
An analysis of turnover, operating profit and net operating assets by operating group and by geographical location is given below:
Year ended Year ended Year ended Y ear ended Y ear ended Y ear ended
31 March 31 March 31 March 31 March 31 March 31 March
2005 2005 2005 2004 2004 2004
Operating Net operating Operating Net operating
Turnover profit assets T urnover profit assets
As restated
£m £m £m £m £m £m
Analysis by operating group
FKI Logistex 348.3 9.4 50.8 372.7 9.0 58.6
Lifting Products and Services 367 .9 3 7.6 11 7 .5 332.2 33.3 125.0
Hardware 199.7 26.4 62.2 221.8 36.1 72.9
Energy T echnology 292.1 27 .8 115.5 268.1 25.7 114.3
Continuing operations 1,208.0 101.2 346.0 1,194.8 104.1 370.8
Discontinued operations 82.5 (5.4) 20.1 150.3 (7.6) 25.3
T otal operations 1,290.5 95.8 366.1 1,345.1 96.5 396.1
Operating profit has been shown before exceptional items and goodwill amortisation to facilitate the comparison of the underlying performance.
Exceptional items were incurred in Lifting Products & Services amounting to £nil (2004: £17 .1 million), in Hardware amounting to £5.7 million 
(2004: £1.8 million), in Energy T echnology amounting to £2.5 million (2004: £6.9 million) and in discontinued operations a £4.8 million credit (2004:
£8.4 million cost). Goodwill amortisation was incurred in FKI Logistex amounting to £23.4 million (2004: £24.7 million), in Lifting Products & Services
amounting to £0.5 million (2004: £0.5 million), in Hardware amounting to £1.5 million (2004: £1.6 million), in Energy T echnology amounting to £0.1 million
(2004: £0.1 million) and in discontinued operations £1.2 million (2004: £2.9 million).
Year ended Year ended Year ended Y ear ended Y ear ended Y ear ended
31 March 31 March 31 March 31 March 31 March 31 March
2005 2005 2005 2004 2004 2004
Operating Net operating Operating Net operating
Turnover profit assets T urnover profit assets
As restated
£m £m £m £m £m £m
Analysis by geographical origin
United Kingdom 305.5 23.2 4.0 266.2 17 .9 25.8
Rest of Europe 239.6 10.3 152.1 253.7 (1.5) 142.2
North America 619.1 63.9 172.8 632.4 84.1 187 .9
Rest of the World 43.8 3.8 17 .1 42.5 3.6 14.9
Continuing operations 1,208.0 101.2 346.0 1,194.8 104.1 370.8
Discontinued operations 82.5 (5.4) 20.1 150.3 (7 .6) 25.3
T otal operations 1,290.5 95.8 366.1 1,345.1 96.5 396.1
51 FKI plc Notes to the financial statements 2) Segmental information continued
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Analysis of turnover by geographical destination
United Kingdom 163.7 157 .5 
Rest of Europe 285.3 245.6 
North America 650.1 658.2 
Rest of the World 108.9 133.5 
Continuing operations 1,208.0 1,194.8 
Discontinued operations 82.5 150.3 
T otal operations 1,290.5 1,345.1 
Inter-segmental turnover is not a material part of the turnover of the operating groups, whether analysed by operating group or by geographical location.
Year ended Y ear ended
31 March 31 March
2005 2004
As restated
£m £m
Reconciliation of net operating assets to total net assets
Net operating assets as above 366.1 396.1 
Goodwill 363.3 438.1 
Investments 0.6 0.6 
Non-operating deferred income (36.7) (39.4)
Corporation tax and overseas tax (35.8) (34.5)
Deferred tax (19.4) (16.8)
Net interest payable (3.8) (6.5)
Net debt (350.7) (349.1)
Pension and other post-retirement benefits (121.8) (131.9)
Dividends payable (17 .5) (17 .5)
T otal net assets 144.3 239.1 
3) Cost of sales and net operating expenses
Year ended Y ear ended
31 March 31 March
2005 2004
As restated
£m £m
Cost of sales 983.6 1,043.2
Net operating expenses
Distribution costs 113.5 123.1 
Administrative expenses 127 .7 146.3
241.2 269.4
Administrative expenses include £26.7 million in respect of goodwill amortisation (2004: £29.8 million). The following amounts in respect of discontinued
operations are included within the figures above: cost of sales £72.1 million (2004: £127 .9 million), distribution costs £8.3 million (2004: £15.5 million)
and administrative expenses £7 .5 million (2004: £14.5 million).
Notes to the financial statements 
continued
52 FKI plc Notes to the financial statements 4) Operating profit
Operating profit is stated after charging/(crediting) the following:
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Depreciation – owned tangible fixed assets 36.3 43.4
– leased tangible fixed assets 0.3 0.7
(Profit)/loss on sale of tangible fixed assets (0.3) 1.8
Goodwill amortisation 26.7 29.8
Auditors’ remuneration – Statutory audit 1.7 1.6
Operating lease rentals – in respect of land and buildings 8.9 11.1
– in respect of other operating leases 3.9 4.7
Research and development costs 8.3 11.2
Additional fees paid to Ernst & Y oung LLP for services other than for the statutory audit amounted to £263,000 (2004: £291,000) and principally related to
IFRS advisory work and other assurance work. Fees for non audit services paid to Ernst & Y oung LLP within the UK were £117 ,000 (2004: £145,000) and
outside the UK were £146,000 (2004: £146,000). The audit fee for the Company was £35,000 (2004: £35,000).
5) Employees
The average number of persons (including directors) employed by the Group in each of the following categories during the year was:
Year ended Y ear ended
31 March 31 March
2005 2004
Number Number
Production 10,032 10,617 
Distribution and sales 1,874 1,984 
Administration and management 1,405 1,521 
13,311 14,122 
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Wages and salaries 323.1 344.2 
Social security and other allied costs 39.7 44.7 
Pension costs – defined benefit 11.7 13.1
– defined contribution 7.4 9.4
Other post-retirement benefits – (0.6)
381.9 410.8
Further information relating to pensions and other post-retirement benefits are included in note 26.
53 FKI plc Notes to the financial statements 6) Directors’ emoluments
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Emoluments 2.2 2.3 
Payments to unapproved pension schemes 0.1 0.1 
2.3 2.4 
Further details of directors’ emoluments are disclosed in the Remuneration report on pages 38 to 41.
7) Exceptional items
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Operating exceptional items
site closure costs 2.8 15.9 
asset impairments 0.6 18.3 
3.4 34.2 
Non-operating exceptional items
Net loss on disposal and closure of businesses 102.7 34.4 
profit on sale of tangible fixed assets (0.8) (13.9)
101.9 20.5 
Total exceptional items before taxation 105.3 54.7
Site closure costs relate to the closure and rationalisation of manufacturing facilities in certain operations. Included within the operating exceptional site
closure costs is the release of £5.9 million of provisions originally recorded in relation to the closure of Laurence Scott. The provisions have been released
following the subsequent sale of the company on 25 April 2005. Losses on sale and closure of businesses for the year ended 31 March 2005 relate
principally to the sale of Kosan Crisplant and certain Certex operations in the United States and Europe and the closure of De Wind.
Thelosses on sale and closure of businesses in the year ended 31 March 2005 are stated after charging £13.6 million of goodwill previously written off
against reserves and £44.0 million of goodwill relating to De Wind previously included in the balance sheet.
The tax charge for the year includes a charge of £0.2 million (2004: £13.7 million credit) relating to exceptional items, of which £0.3 million credit relates
to non-operating exceptional items (2004: credit of £8.0 million).
8) Net interest payable
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Interest payable on:
bank loans and overdrafts 3.3 1.9 
other loans 21.9 23.9 
finance leases and other indebtedness 0.2 0.4 
25.4 26.2 
Interest receivable (1.8) (2.9)
23.6 23.3 
Notes to the financial statements 
continued
54 FKI plc Notes to the financial statements 9) Other net finance charges
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Expected return on pension scheme assets (note 26) 38.3 33.2
Interest on pension scheme and other post-retirement benefit liabilities (note 26) (40.1) (39.6)
(1.8) (6.4)
10) Taxation
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Current tax:
UK corporation tax at 30% 15.4 –
Double taxation relief (15.4) –
Foreign tax 16.2 19.5
Adjustments in respect of prior years
UK corporation tax – –
Foreign tax 0.1 (3.7)
T otal current tax 16.3 15.8
Deferred tax 2.0 (12.6)
Total tax on loss on ordinary activities 18.3 3.2
Translation differences on long-term foreign currency loans have been taken to reserves, together with a tax credit thereon of £nil (2004: charge of 
£0.8 million).
The current tax assessed for the year is higher than the standard rate of corporation tax in the UK as explained below.
Year ended Y ear ended
31 March 31 March
2005 2004
As restated
£m £m
Loss on ordinary activities before tax (61.6) (17 .7)
Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK of 30% (2004: 30%) (18.5) (5.3)
Effects of:
non-deductible expenses (primarily goodwill amortisation) 5.4 9.7
non-deductible exceptional items 31.9 4.2 
accelerated capital allowances 1.6 12.4 
short-term timing differences (6.7) (2.6)
utilisation of losses 4.3 5.1 
timing difference on goodwill eligible for tax relief (1.2) (1.4)
adjustment to tax charge in respect of prior years 0.1 (3.7)
lower rates of tax on overseas earnings (0.6) (2.6)
Current tax charge for the year 16.3 15.8 
The tax charge in future periods may be affected by the utilisation of trading and capital losses, which in the present period amount to an unrecognised
deferred asset of £40.6 million (2004: £21.9 million), as based on currently available evidence it is considered unlikely that suitable taxable profits or gains
will be generated.
55 FKI plc Notes to the financial statements 11) Company result for the year
The Company has taken advantage of the exemption granted by Section 230 of the Companies Act 1985 whereby no individual profit and loss account of
the Company is disclosed. The Company’s loss on ordinary activities after taxation for the financial year was £41.9 million (2004: £24.8 million loss).
12) Equity dividends
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
Ordinary shares
Interim dividend of 1.5p per share paid on 25 February 2005 (2004: 1.5p) 8.7 8.7
Final dividend proposed of 3.0p per share (2004: 3.0p) 17 .5 17 .4
T otal equity dividends 26.2 26.1
The proposed final dividend will be paid on 7 October 2005 to ordinary shareholders on the register at 9 September 2005.
13) Loss per share
Year ended Y ear ended
31 March 31 March
2005 2004
As restated
Loss £m (79.9) (20.9)
Weighted average share capital 000s 582,022 579,853 
Loss per share pence (13.7) (3.6)
Loss £m (79.9) (20.9)
Add back – goodwill amortisation £m 26.7 29.8 
– exceptional items £m 105.3 54.7 
– tax on exceptional items £m 0.2 (13.7)
Adjusted earnings £m 52.3 49.9 
Weighted average share capital 000s 582,022 579,853 
Adjusted earnings per share pence 9.0 8.6 
Loss £m (79.9) (20.9)
Diluted weighted average share capital 000s 586,651 583,800 
Diluted loss per share pence (13.6) (3.6)
Loss per share is calculated by dividing the loss for the year by the weighted average number of ordinary shares in issue during the year.
Adjusted earnings per share, which gives a useful indication of underlying performance, is calculated by dividing the profit for the year before goodwill
amortisation and exceptional items, by the weighted average number of ordinary shares in issue during the year.
Diluted loss per share, which takes account of the fair value of outstanding share options over the year, is calculated by dividing the loss for the year by the
diluted weighted average number of ordinary shares in issue during the year.
Until such time as they vest unconditionally in employees, both the weighted average share capital and the diluted weighted average share capital exclude
shares held in trust under the Long T erm Incentive Plan.
Notes to the financial statements 
continued
56 FKI plc Notes to the financial statements 14) Goodwill
£m
Cost:
1 April 2004 554.5
Exchange adjustments (5.8)
Disposals (49.5)
31 March 2005 499.2
Amortisation:
1 April 2004 116.4 
Exchange adjustments (1.7)
Provided during the year 26.7
Disposals (5.5)
31 March 2005 135.9
Net book value 31 March 2005 363.3
Net book value 31 March 2004 438.1 
57 FKI plc Notes to the financial statements 15) Tangible fixed assets
Long Short Plant
Freehold leasehold leasehold equipment
property property property and vehicles T otal
£m £m £m £m £m
Group
Cost:
1 April 2004 218.0 3.4 7 .0 572.1 800.5 
Exchange 0.5 – (0.1) (1.6) (1.2)
Disposal of subsidiaries (1.1) – (0.5) (12.3) (13.9)
Additions 11.6 0.1 0.1 19.9 31.7
Disposals (12.1) – (0.1) (36.0) (48.2)
Reclassifications (1.0) – 0.1 0.9 –
31 March 2005 215.9 3.5 6.5 543.0 768.9
Depreciation:
1 April 2004 (70.1) (1.3) (5.2) (440.3) (516.9)
Exchange 0.7 – – 2.4 3.1
Disposal of subsidiaries 0.2 – 0.4 10.6 11.2
Charge for the year (5.2) 0.4 (1.0) (30.8) (36.6)
Disposals 3.6 – 0.2 32.4 36.2
Impairment (0.1) – – (0.2) (0.3)
Reclassifications 0.6 – – (0.6) –
31 March 2005 (70.3) (0.9) (5.6) (426.5) (503.3)
Net book value 31 March 2005 145.6 2.6 0.9 116.5 265.6
Net book value 31 March 2004 147 .9 2.1 1.8 131.8 283.6 
The net book value of tangible fixed assets includes £8.3 million (2004: £0.7 million) in respect of assets held under finance leases and hire 
purchase contracts.
An analysis of the cost of freehold property between land and buildings is shown below.
Group Group Company Company
31 March 31 March 31 March 31 March
2005 2004 2005 2004
£m £m £m £m
Land 39.3 36.5 – – 
Buildings 176.6 181.5 – 11.6 
Cost 215.9 218.0 – 11.6 
Notes to the financial statements 
continued
58 FKI plc Notes to the financial statements 15) Tangible fixed assets continued
Plant,
Freehold equipment
property and vehicles T otal
£m £m £m
Company
Cost:
1 April 2004 11.6 1.2 12.8
Additions – 0.5 0.5
Disposals (11.6) (0.4) (12.0)
31 March 2005 – 1.3 1.3
Depreciation:
1 April 2004 1.0 1.0 2.0
Charge for the period – 0.1 0.1
Disposals (1.0) (0.4) (1.4)
31 March 2005 – 0.7 0.7
Net book value 31 March 2005 – 0.6 0.6
Net book value 31 March 2004 10.6 0.2 10.8
16) Investments
Associated 
undertakings 
£m 
Group
Cost:
1 April 2004 0.6
31 March 2005 0.6
Provisions:
1 April 2004 –
31 March 2005 –
Net book value 31 March 2005 0.6
Net book value 31 March 2004 0.6
59 FKI plc Notes to the financial statements 16) Investments continued
Subsidiary
undertakings
£m
Company
Cost:
1 April 2004 2,831.9 
Disposals (269.0)
31 March 2005 2,562.9
Provisions:
1 April 2004 –
31 March 2005 –
Net book value 31 March 2005 2,562.9
Net book value 31 March 2004 2,831.9 
A list of principal subsidiary undertakings is given on page 78.
17) Stocks – Group
31 March 31 March 31 March 31 March
2005 2005 2004 2004
£m £m £m £m
Long-term contract work in progress: net costs 0.3 5.5 
Less: applicable payments on account (0.2) (4.5)
0.1 1.0 
Other stocks and work in progress:
raw materials and consumables 66.8 75.1 
work in progress 64.5 62.8 
finished goods for sale 83.4 80.4 
214.7 218.3 
Less: applicable payments on account (12.8) (9.5)
201.9 208.8 
202.0 209.8 
Notes to the financial statements 
continued
60 FKI plc Notes to the financial statements 18) Debtors
Group Group Company Company
31 March 31 March 31 March 31 March
2005 2004 2005 2004
£m £m £m £m
Amounts falling due within one year
Trade debtors 235.4 238.0 – – 
Amounts recoverable on contracts 61.2 55.0 – – 
Amounts owed by subsidiary undertakings – – 1,008.2 1,256.0 
Other debtors 13.9 16.4 – 2.8 
Other prepayments and accrued income 12.7 14.7 0.8 0.8 
Corporate tax recoverable 3.3 4.9 3.3 4.2 
Deferred tax asset 9.8 4.9 – –
336.3 333.9 1,012.3 1,263.8 
Amounts falling due after more than one year
Trade debtors – 0.1 – – 
Amounts owed by subsidiary undertakings – – – 73.9 
Other debtors 5.5 0.6 – – 
Deferred tax asset – 6.3 – 6.3 
5.5 7 .0 – 80.2 
19) Creditors: amounts falling due within one year
Group Group Company Company
31 March 31 March 31 March 31 March
2005 2004 2005 2004
As restated As restated
£m £m £m £m
Bank loans and overdrafts (note 22) 0.2 0.2 31.4 36.6 
Other loans (note 22) 5.3 49.3 – – 
Obligations under finance leases (note 22) 1.1 0.1 – – 
6.6 49.6 31.4 36.6 
Payments received on account 45.1 38.4 – – 
Trade creditors 181.6 183.2 – – 
Amounts owed to subsidiary undertakings – – 2,534.2 3,329.4 
Other creditors 59.0 64.4 7.1 4.5 
Corporation tax and overseas tax 39.1 39.2 – – 
Other taxes and social security 11.8 8.9 0.3 – 
Accruals and deferred income 83.9 88.3 35.3 37 .7
Dividends payable 17 .5 17 .5 17 .5 17 .5 
438.0 439.9 2,594.4 3,389.1
T otal creditors falling due within one year 444.6 489.5 2,625.8 3,425.7
61 FKI plc Notes to the financial statements 20) Creditors: amounts falling due after more than one year
Group Group Company Company
31 March 31 March 31 March 31 March
2005 2004 2005 2004
£m £m £m £m
Bank loans (note 22) 47 .7 – 47 .7 – 
Other loans (note 22) 448.6 454.2 355.7 353.2 
Obligations under finance leases (note 22) 3.8 0.3 – – 
500.1 454.5 403.4 353.2 
Amounts owed to subsidiary undertakings – – – 76.4 
Other creditors 1.1 1.5 – – 
Corporation tax and overseas tax – 0.2 – – 
Accruals and deferred income 31.4 39.9 27 .3 34.3 
32.5 41.6 27 .3 110.7 
T otal creditors falling due after more than one year 532.6 496.1 430.7 463.9 
21) Loans and overdrafts
Group Group Company Company
31 March 31 March 31 March 31 March
2005 2004 2005 2004
£m £m £m £m
Bank loans and overdrafts – wholly repayable within five years
UK multicurrency revolving credit facility 47 .7 – 47 .7 –
Other loans 0.2 0.2 31.4 36.6
T otal bank loans and overdrafts 47 .9 0.2 79.1 36.6
Other loans
US dollar fixed rate guaranteed senior notes 21.0 69.9 1.0 0.5
Euro fixed rate guaranteed bond 354.7 – 354.7 –
Wholly repayable within five years by instalments 375.7 69.9 355.7 0.5
US dollar fixed rate guaranteed senior notes 77 .2 79.4 – – 
Euro fixed rate guaranteed bond – 352.7 – 352.7
Other 1.0 1.5 – – 
Wholly or partly repayable after five years by instalments 78.2 433.6 – 352.7
Instalments falling due within five years 34.9 36.2 – – 
Instalments falling due after five years 43.3 397 .4 – 352.7
Repayable by instalments wholly or partly after five years 78.2 433.6 – 352.7
T otal other loans 453.9 503.5 355.7 353.2
TheUK multicurrency revolving credit facility has been drawn under a five year agreement. The loan is repayable within 12 months of the balance sheet date, but has been classified as long term
because, under the agreement, immediate replacement funding is available through to 26 July 2007 . The rate of interest payable on the loan is 0.65% above LIBOR.
Bank loans, overdrafts and other loans amounting to £0.3 million (2004: £0.3 million) are secured by fixed and floating charges on subsidiary undertakings’
assets. Certain of the Company’s bank overdrafts are netted off against cash for Group purposes in accordance with the right of set-off contained in the
banking agreements.
Other loans wholly repayable within five years are redeemable at par and bear interest at rates between 5.6% and 8.5% pa. Loans not wholly repayable
within five years are redeemable at par at varying dates up to 1 April 2016 and bear interest at rates between 2.7% and 7 .8% pa.
The entire a600 million of euro fixed rate guaranteed bonds fall due for repayment on 22 February 2010. Costs incurred in issuing these bonds are
amortised over the ten year life of the bonds. The remaining unamortised issue costs are £2.3 million (2004: £2.7 million).
Notes to the financial statements 
continued
62 FKI plc Notes to the financial statements 22) Repayment detail – Group
The total borrowings of the Group are repayable as follows:
Bank loans and overdrafts Other loans Finance lease obligations
31 March 31 March 31 March 31 March 31 March 31 March
2005 2004 2005 2004 2005 2004
£m £m £m £m £m £m
Within one year or on demand 0.2 0.2 5.3 49.3 1.1 0.1 
Between one and two years – – 40.2 – 1.0 0.2 
Between two and five years 47 .7 – 365.1 56.8 2.8 0.1 
In five years or more – – 43.3 397 .4 – –
47 .9 0.2 453.9 503.5 4.9 0.4 
23) Derivatives and other financial instruments
Page 26 of the Finance Director’s review provides an explanation of the role that financial instruments have played during the year in managing the risks 
the Group faces in its financial activities. The explanation summarises the objectives and policies for holding or issuing financial instruments and similar
contracts, and the strategies for achieving those objectives that have been followed during the year.
The numerical disclosures in this note deal with financial assets and financial liabilities as defined in FRS 13 “Derivatives and other financial instruments:
Disclosures” . Certain financial assets such as investments in subsidiary and associated companies are excluded from the scope of these disclosures.
As permitted by FRS 13, short-term debtors and creditors have also been excluded from the disclosures, other than the currency disclosures.
Interest rate and currency profile disclosures – borrowings
The interest rate and currency profile of the Group’s borrowings was:
31 March 2005 31 March 2005 Fixed rate
Weighted
Weighted average
average time for which 
Total Floating rate Fixed rate interest rate rate is fixed
£m £m £m % pa Years
US dollar 324.4 231.6 92.8 7 .5 5.5
Euro 70.8 42.6 28.2 6.8 4.0
Danish krone 91.6 90.6 1.0 2.8 8.2
Other currencies 19.9 19.9 – – –
Gross borrowings 506.7 384.7 122.0 7 .3 5.1
31 March 2004 31 March 2004 Fixed rate
Weighted
Weighted average
average time for which 
T otal Floating rate Fixed rate interest rate rate is fixed
£m £m £m % pa Y ears
US dollar 298.8 203.8 95.0 7.5 6.5 
Euro 87.3 59.7 27.6 6.8 5.0 
Danish krone 117 .6 87 .4 30.2 7 .0 5.7 
Other currencies 0.4 0.2 0.2 6.0 1.8 
Gross borrowings 504.1 351.1 153.0 7.3 6.1 
The amounts shown in the tables above take into account the interest rate and cross currency swaps used to manage the interest rate and currency profile
of the Group’s borrowings.
63 FKI plc Notes to the financial statements 23) Derivatives and other financial instruments continued
Currency of net cash/(debt)
In 2005 and 2004 all cash and deposits were held at floating rates of interest. The net cash/(debt) of the Group analysed by currency was:
31 March 31 March 31 March 31 March 31 March 31 March
2005 2005 2005 2004 2004 2004
Cash and (Debt) Net Cash and (Debt) Net
marketable cash/(debt) marketable cash/(debt)
securities securities
and deposits and deposits 
£m £m £m £m £m £m 
US dollar 50.2 (324.4) (274.2) 61.1 (298.8) (237.7)
Sterling 29.3 – 29.3 34.3 (0.2) 34.1 
Euro 33.2 (70.8) (37 .6) 18.1 (87.3) (69.2)
Danish krone 1.1 (91.6) (90.5) 6.8 (117.6) (110.8)
Other currencies 42.2 (19.9) 22.3 34.7 (0.2) 34.5 
156.0 (506.7) (350.7) 155.0 (504.1) (349.1)
Borrowing facilities
The Group has undrawn committed borrowing facilities, in respect of which all conditions precedent had been met, as follows:
31 March 31 March
2005 2004
£m £m
Expiring in more than two years 102.3 150.0 
These undrawn committed borrowing facilities are wholly in respect of the Company’s £150 million UK multicurrency revolving credit facility maturing on 
26 July 2007 .
Fair values
The fair value of the euro guaranteed bonds is based on the market value. The fair value of the US dollar fixed rate notes is calculated by discounting cash
flows based on US Treasury Bond rates plus a margin reflecting current market conditions. The fair value of other loans and overdrafts is approximately
equal to book value. The fair value of forward exchange contracts represents the unrealised foreign exchange gain or loss on revaluation of the instrument
at year end exchange rates. The fair value of currency and interest rate swaps is determined by discounting cash flows at year end exchange rates and
interest rates.
31 March 31 March 31 March 31 March
2005 2005 2004 2004
Book value Fair value Book value Fair value
£m £m £m £m
Primary financial instruments held or issued to finance 
the Group’s operations
Short-term financial liabilities and current portion of long-term borrowings (6.6) (7 .0) (49.6) (55.0)
Long-term borrowings (554.6) (600.7) (499.8) (542.3)
Cash, marketable securities and desposits 156.0 156.0 155.0 155.0 
Net financial liabilities (405.2) (451.7) (394.4) (442.3)
Derivative financial instruments held to manage the interest rate 
and currency profile
Currency and interest rate swaps 54.5 58.4 45.3 41.9 
Forward foreign exchange contracts – 0.5 – 2.5 
Net debt (350.7) (392.8) (349.1) (397 .9)
Notes to the financial statements 
continued
64 FKI plc Notes to the financial statements 23) Derivatives and other financial instruments continued
Hedging contracts
The Group enters into forward foreign currency contracts to reduce the currency exposures that arise on sales and purchases denominated in foreign
currencies. It also enters into interest rate swaps to manage its interest rate profile. Changes in the fair value of instruments used as hedges are not
recognised in the financial statements until the hedged position matures, except for cross-currency swaps where the value of the swap is applied to the
related borrowing to reflect the substance of the transaction. An analysis of these unrecognised gains and losses is as follows:
Net 
Gains Losses gains/(losses)
£m £m £m
Unrecognised gains and losses on hedges at 1 April 2004 54.8 (12.4) 42.4
Gains and losses arising in previous years that were recognised in 2005 17 .4 (5.3) 12.1
Gains and losses arising before 1 April 2004 that were not recognised in 2005 37 .4 (7 .1) 30.3
Gains and losses arising in 2005 that were not recognised in 2005 9.0 (1.0) 8.0
Unrecognised gains and losses on hedges at 31 March 2005 46.4 (8.1) 38.3
Of which:
Gains and losses expected to be recognised in 2005 10.8 (1.9) 8.9
Gains and losses expected to be recognised in 2006 or later 35.6 (6.2) 29.4
Currency exposures
The Group’s objectives in managing the currency exposures arising from its net investment overseas (in other words, its structural currency exposures) are
to maintain a low cost of borrowing and to retain some potential for currency-related appreciation while partially hedging against currency depreciation.
Gains and losses arising from these structural currency exposures are recognised in the statement of total recognised gains and losses.
The table below shows the Group’s currency exposures; in other words, those transactions (or non-structural) exposures that give rise to the net currency
gains and losses recognised in the profit and loss account. Such exposures comprise the monetary assets and monetary liabilities of the Group that are not
denominated in the operating (or “functional”) currency of the operating unit involved, other than certain non-sterling borrowings treated as hedges of net
investments in overseas operations. These exposures were as follows:
Net foreign currency monetary assets/(liabilities) 31 March 2005
Sterling US dollar Euro Other Total
Functional currency of Group operations £m £m £m £m £m
Sterling –(7 .0) 4.8 5.8 3.6
US dollar –––––
Euro – 1.8 – (0.1) 1.7
Other (0.2) 1.7 (0.1) 0.3 1.7
T otal (0.2) (3.5) 4.7 6.0 7 .0
Net foreign currency monetary assets/(liabilities) 31 March 2004
Sterling US dollar Euro Other T otal
Functional currency of Group operations £m £m £m £m £m
Sterling – (1.2) (1.4) 0.2 (2.4)
US dollar –––––
Euro – 1.2 – 0.3 1.5
Other (0.2) 1.1 (0.4) – 0.5
T otal (0.2) 1.1 (1.8) 0.5 (0.4)
The amounts shown in the tables above take into account the effect of any currency swaps, forward contracts and other derivatives entered into to
manage these currency exposures.
65 FKI plc Notes to the financial statements 24) Provisions for liabilities and charges
Deferred Business Insurance and
taxation restructuring litigation Total
£m £m £m £m
Group
1 April 2004 28.0 15.7 27 .7 71.4
Exchange adjustments 0.6 – – 0.6
Charged/(credited) in the year 2.0 39.0 – 41.0
Other movement (1.4) – – (1.4)
Utilised in the year – (21.1) (4.5) (25.6)
31 March 2005 29.2 33.6 23.2 86.0
Due to the inherent uncertainty of the natures of the liabilities covered by the insurance and litigation provisions it is not possible to give an indication of the
timing of their settlement.
25) Deferred taxation
The major components of the provision for deferred taxation are as follows:
31 March 31 March
2005 2004 
As restated
£m £m 
Group
Accelerated capital allowances 1.8 3.1 
Short-term timing differences 13.9 7 .0 
Losses (9.8) (5.8)
Other 13.5 12.5 
Net deferred tax liability 19.4 16.8 
Analysis of deferred tax liability:
Included within debtors (note 18) (9.8) (11.2)
Included within provisions (note 24) 29.2 28.0 
Net deferred tax liability 19.4 16.8 
Deferred taxation is not provided in respect of liabilities that might arise on the distribution of available overseas reserves of subsidiary undertakings, except
to the extent that the decision to remit such profits has been taken. Deferred tax in respect of pensions and other post-retirement benefit liabilities is
disclosed in note 26.
Notes to the financial statements 
continued
66 FKI plc Notes to the financial statements 26) Pensions and other post-retirement benefits
a) Defined contribution pension schemes
The Group operates a number of defined contribution pension schemes, the assets of which are held externally to the Group in separate trustee
administered funds. Contributions to these defined contribution pension schemes in the year, which were the same as the amount charged to the 
profit and loss account, amounted to £7 .4 million (2004: £9.4 million).
b) Defined benefit pension schemes
The main pension schemes operated by the Group are in the United Kingdom and North America and are defined benefit in type. These are funded
schemes, where the future liabilities for benefits are provided for by the accumulation of assets held externally to the Group in separate trustee
administered funds.
The cost of these schemes is determined in accordance with FRS 17 with the advice of independent professionally qualified actuaries on the basis of
formal actuarial valuations using the projected unit method. In line with normal business practice, these valuations are undertaken triennially in the United
Kingdom and annually in the United States.
The dates of the most recent full actuarial valuations, on which the amounts in the financial statements are based, were as follows:
Name of scheme Location Date of valuation
FKI Group Pension Scheme UK 31 December 2002
FKI Industries Inc Group Pension Plans US 31 December 2002
These valuations were updated at 31 March 2005 by independent, professionally qualified actuaries using the assumptions shown in the table below
which are consistent with the requirements of FRS 17 .
Both the FKI Group Pension Scheme and the main FKI Industries Inc Group Pension Plan are closed to new members and therefore under the projected
unit method the current service cost would be expected to increase as the members of the scheme approach retirement.
UK and ROW schemes North American schemes
31 March 31 March 31 March 31 March 31 March 31 March
2005 2004 2003 2005 2004 2003
% pa % pa % pa % pa % pa % pa
Rate of increase in salaries 3.9 3.9 3.6 3.5 3.5 3.5 
Rate of increase in pensions in payment 2.6 2.6 2.5 Nil Nil Nil
Discount rate 5.4 5.5 5.6 5.8 5.8 6.3 
Rate of price inflation 2.9 2.9 2.6 2.5 2.5 2.5 
The expected rates of return on the schemes’ assets were as follows:
UK and ROW schemes North American schemes
Long-term expected rate of return at Long-term expected rate of return at
31 March 31 March 31 March 31 March 31 March 31 March
2005 2004 2003 2005 2004 2003
% pa % pa % pa % pa % pa % pa
Equities 8.8 8.8 8.1 9.7 9.0 9.0 
Bonds 4.8 4.8 4.8 6.1 5.4 5.4 
Other 6.3 5.3 3.8 3.8 3.7 3.5 
67 FKI plc Notes to the financial statements 26) Pensions and other post-retirement benefits continued
b) Defined benefit pension schemes continued
The fair value of the schemes’ assets, the present value of the schemes’ liabilities and the net pension (liability)/asset were as follows:
UK and ROW schemes North American schemes
31 March 31 March 31 March 31 March 31 March 31 March
2005 2004 2003 2005 2004 2003
£m £m £m £m £m £m
Equities 189.5 181.0 205.1 89.3 124.3 108.0 
Bonds 200.1 170.7 77.3 89.4 74.1 83.4 
Other 6.6 5.1 7.5 11.2 1.1 4.4 
T otal fair value of schemes’ assets 396.2 356.8 289.9 189.9 199.5 195.8 
Present value of schemes’ liabilities (538.8) (511.1) (470.8) (179.8) (184.0) (196.4)
(Deficit)/surplus in the schemes (142.6) (154.3) (180.9) 10.1 15.5 (0.6)
Limit on recognition of surplus – – – (3.4) (4.2) (1.8)
Recognised (deficit)/surplus in the schemes (142.6) (154.3) (180.9) 6.7 11.3 (2.4)
Related deferred tax asset/(liability) 40.9 44.1 51.6 (2.6) (4.5) 0.9 
Net pension (liability)/asset (101.7) (110.2) (129.3) 4.1 6.8 (1.5)
The components of the defined benefit cost were as follows:
Year ended 31 March 2005 Y ear ended 31 March 2004
UK and ROW North American UK and ROW North American
schemes schemes T otal schemes schemes T otal
£m £m £m £m £m £m
Charged within operating profit:
current service cost 7.6 4.1 11.7 8.6 4.5 13.1 
past service cost ––– – – – 
unrecognised surplus used to offset 
past service cost ––– –––
curtailment gain ––– (0.6) – (0.6)
7.6 4.1 11.7 8.0 4.5 12.5 
Credited within non-operating exceptional items:
curtailment gain ––– (1.0) – (1.0)
Charged/(credited) within other net finance charges:
interest cost 27 .5 10.2 37 .7 25.5 11.2 36.7 
expected return on assets (24.1) (14.1) (38.2) (20.4) (12.8) (33.2)
3.4 (3.9) (0.5) 5.1 (1.6) 3.5 
Recognised within the statement of total
recognised (gains) and losses:
difference between actual and expected
return on assets (12.3) 6.8 (5.5) (49.2) (33.5) (82.7)
experience losses/(gains) on the 
schemes’ liabilities 1.5 (1.0) 0.5 7.2 3.7 10.9 
effect of changes in assumptions on the 
schemes’ liabilities 8.3 – 8.3 21.2 10.4 31.6 
(2.5) 5.8 3.3 (20.8) (19.4) (40.2)
Notes to the financial statements 
continued
68 FKI plc Notes to the financial statements 26) Pensions and other post-retirement benefits continued
b) Defined benefit pension schemes continued
An analysis of the amounts recognised within the consolidated statement of total recognised gains and losses is as follows:
Year ended 31 March 2005
UK and ROW North American
schemes schemes T otal
Difference between actual and expected return 
on the schemes’ assets £(12.3)m £6.8m £(5.5)m
Expressed as a percentage of the schemes’ assets 3.1% 3.6% 1.0%
Experience losses/(gains) on the schemes’ liabilities £1.5m £(1.0)m £0.5m
Expressed as a percentage of the present value 
of the schemes’ liabilities 0.3% 0.6% 0.1%
Net (gain)/loss recognised within the statement 
of total recognised gains and losses £(2.5)m £5.8m £3.3m
Expressed as a percentage of the present value 
of the schemes’ liabilities 0.5% 3.2% 0.5%
Y ear ended 31 March 2004
UK and ROW North American
schemes schemes T otal
Difference between actual and expected return 
on the schemes’ assets £(49.2)m £(33.5)m £(82.7)m
Expressed as a percentage of the schemes’ assets 13.8% 16.8% 14.9%
Experience losses/(gains) on the schemes’ liabilities £7 .2m £3.7m £10.9m
Expressed as a percentage of the present value 
of the schemes’ liabilities 1.4% 2.0% 1.6%
Net (gain)/loss recognised within the statement 
of total recognised gains and losses £(20.8)m £(19.4)m £(40.2)m
Expressed as a percentage of the present value 
of the schemes’ liabilities 4.1% 10.5% 5.8%
Y ear ended 31 March 2003
UK and ROW North American
schemes schemes T otal
Difference between actual and expected return 
on the schemes’ assets £108.6m £45.6m £154.2m
Expressed as a percentage of the schemes’ assets 37 .5% 23.3% 31.7%
Experience losses/(gains) on the schemes’ liabilities £(5.7)m £(6.7)m £(12.4)m
Expressed as a percentage of the present value 
of the schemes’ liabilities 1.2% 3.4% 1.9%
Net (gain)/loss recognised within the statement 
of total recognised gains and losses £132.2m £54.9m £187 .1m
Expressed as a percentage of the present value 
of the schemes’ liabilities 28.1% 28.0% 28.0%
69 FKI plc Notes to the financial statements 26) Pensions and other post-retirement benefits continued
b) Defined benefit pension schemes continued
The movement in the recognised surplus/(deficit) in the schemes during the year was as follows:
Year ended 31 March 2005 Y ear ended 31 March 2004
UK and ROW North American UK and ROW North American
schemes schemes schemes schemes
£m £m £m £m
1 April (154.3) 15.5 (180.9) (0.6)
Exchange (0.2) (0.1) 1.8 (0.8)
Charged within operating profit (7 .6) (4.1) (8.0) (4.5)
Credited within non-operating exceptional items –– 1.0 – 
(Charged)/credited within other net finance charges (3.4) 3.9 (5.1) 1.6 
Recognised within the statement of total recognised gains and losses 2.5 (5.8) 20.8 19.4 
Contributions 20.4 0.7 16.1 0.4 
31 March (142.6) 10.1 (154.3) 15.5 
c) Other post-retirement benefits
The Group operates a number of unfunded post-retirement medical and welfare benefit schemes, principally in the United States. The cost of these
schemes is determined in accordance with FRS 17 with the advice of independent professionally qualified actuaries. The principal actuarial assumptions
used were as follows:
31 March 31 March 31 March
2005 2004 2003
% pa % pa % pa
Long-term increase in health costs 10.0
1
10.0
2
8.5
3
Discount rate 5.8 5.8 6.3 
1
Decreasing to 5% in 2010 and thereafter.
2
Decreasing to 5% in 2009 and thereafter.
3
Decreasing to 5% in 2007 and thereafter.
Notes to the financial statements 
continued
70 FKI plc Notes to the financial statements 26) Pensions and other post-retirement benefits continued
c) Other post-retirement benefits continued
The present value of the liabilities and the net balance sheet liability for other post-retirement benefits were as follows:
31 March 31 March 31 March
2005 2004 2003
£m £m £m
Present value of liabilities 39.9 47.9 52.8 
Restriction on amount recognised 0.5 (0.9) – 
Liabilities recognised 40.4 47.0 52.8 
Related deferred tax asset (16.2) (18.5) (20.3)
Net liability 24.2 28.5 32.5 
The components of the defined benefit cost were as follows:
31 March 31 March
2005 2004
£m £m
(Credited)/charged within operating profit:
current service cost – (0.6)
gain on settlements (1.5) (1.1)
(1.5) (1.7)
Charged within other net finance charges:
interest cost 2.5 2.9
Recognised within the statement of total recognised gains and losses:
experience losses/(gains) on the schemes’ liabilities (4.2) 2.2
effect of change in assumptions on schemes’ liabilities 0.5 3.4
(3.7) 5.6
An analysis of the amounts recognised within the consolidated statement of total recognised gains and losses is as follows:
31 March 31 March 31 March
2005 2004 2003
Experience (gains)/losses on the schemes’ liabilities £(4.2)m £2.2m £(2.1)m
Expressed as a percentage of the present value of the schemes’ liabilities 10.5% 4.6% 4.0%
Net (gain)/loss recognised within the statement of total recognised gains and losses £(3.7)m £5.6m £2.8m
Expressed as a percentage of the present value of the schemes’ liabilities 9.3% 11.7% 5.3%
71 FKI plc Notes to the financial statements 26) Pensions and other post-retirement benefits continued
c) Other post-retirement benefits continued
The movement in the present value of the liabilities of the schemes during the year was as follows:
31 March 31 March
2005 2004
£m £m
1 April 47 .9 52.8 
Exchange (1.1) (7 .7)
(Credited)/charged within operating profit (1.5) (1.7)
Charged within other net finance charges 2.5 2.9 
Recognised within the statement of total recognised gains and losses (3.7) 5.6 
Contributions (4.2) (4.0)
31 March 39.9 47 .9 
d) Reconciliation of net pension and other post-retirement benefit liabilities to balance sheet
31 March 31 March
2005 2004
£m £m
Pension asset:
North American defined benefit pension scheme 4.1 6.8 
Pension liability:
UK and ROW defined benefit pension scheme (101.7) (110.2)
North American defined benefit pension scheme – –
Other post-retirement benefit schemes (24.2) (28.5)
(125.9) (138.7)
e) Defined benefit pension scheme – Company
The Company is the sponsor of the FKI Group Pension Scheme, which is the main defined benefit scheme in the United Kingdom. The date of the most
recent actuarial valuation, the main financial assumptions and the expected rates of return on the scheme’s assets are the same as those for the UK and
ROW schemes shown in part b) of this note.
The fair value of the scheme’s assets, the present value of its liabilities and the net pension liability were as follows:
31 March 31 March 31 March
2005 2004 2003
£m £m £m
Equities 185.0 174.2 199.4 
Bonds 195.5 169.7 76.1 
Other 6.4 4.7 6.8 
T otal fair value of scheme assets 386.9 348.6 282.3 
Present value of scheme liabilities (517 .2) (491.4) (450.2)
Deficit in the scheme (130.3) (142.8) (167 .9)
Related deferred tax asset 39.1 42.5 50.1 
Net pension liability (91.2) (100.3) (117 .8)
Notes to the financial statements 
continued
72 FKI plc Notes to the financial statements 26) Pensions and other post-retirement benefits continued
e) Defined benefit pension scheme – Company continued
The movement in the surplus/(deficit) in the schemes during the year was as follows:
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
1 April (142.8) (167 .9)
Charged within operating profit (7 .0) (7 .4)
Credited within non-operating exceptional items – 1.0 
(Charged)/credited within other net finance charges (3.1) (4.9)
Recognised within the statement of total recognised gains and losses 3.3 21.6 
Contributions 19.1 14.8 
31 March (130.5) (142.8)
27) Called up share capital
Ordinary shares of 10p each
Number Amount
m £m
Authorised
1 April 2004 and 31 March 2005 745.0 74.5
Number Value
Allotted, called up and fully paid
1 April 2004 581.7 58.2
Issued under share option schemes 0.6 –
31 March 2005 582.3 58.2
Executive Share Option Scheme
At 31 March 2005, the total number of options outstanding was 19,314,302, exercisable between 2005 and 2015 at subscription prices between 
77p and 233p. 513,152 options were exercised during the year and options over 686,005 lapsed. Options over 1,495,000 shares were granted during the
year as shown below.
Granted during Exercise price 
the year per share Date
Date of grant Number Pence exercisable from Expiry date
11.06.2004 1,495,000 115.7 11.06.2007 11.06.2014
FKI Sharesave Scheme
At 31 March 2005, the total number of options was 12,243,093 exercisable between 2004 and 2010 at subscription prices between 60p and 223.5p.
Options over 1,471,721 shares were granted during the year at a subscription price of 98.25p exercisable between 2008 and 2009. 126,841 shares were
exercised during the year and options over 2,584,705 lapsed.
73 FKI plc Notes to the financial statements 28) Reserves
Share Capital 
premium redemption Profit and
account reserve loss account Own shares T otal
£m £m £m £m £m
Group
1 April 2004 as previously reported 155.6 2.0 23.3 – 180.9
Prior year adjustment – – 2.7 (2.9) (0.2)
1 April 2004 as restated 155.6 2.0 26.0 (2.9) 180.7
Exchange differences on retranslation of 
net assets of subsidiaries and loans – – (1.6) – (1.6)
Premium on shares issued 0.4––– 0.4
Goodwill transferred to profit and loss account 
in respect of disposals – – 13.6 – 13.6
Actuarial loss net of deferred tax on pensions 
and other post-retirement benefits – – (1.4) – (1.4)
Retained loss for the year – – (106.1) – (106.1)
LTIP movement in the year – – 0.3 – 0.3
31 March 2005 156.0 2.0 (69.2) (2.9) 85.9
The opening balance of reserves has been restated on adoption of UITF 38 “Accounting for ESOP Trusts”.
Share Capital 
premium redemption Profit and
account reserve loss account Own shares T otal
£m £m £m £m £m
Company
1 April 2004 as previously reported 155.6 2.0 16.3 – 173.9
Prior year adjustment – – 2.7 (2.9) (0.2)
1 April 2004 as restated 155.6 2.0 19.0 (2.9) 173.7
Premium on shares issued 0.4––– 0.4
Actuarial loss net of deferred tax on pensions 
and other post-retirement benefits – – (0.1) – (0.1)
Retained profit for the year – – 203.4 – 203.4
LTIP movement in the year – – 0.3 – 0.3
31 March 2005 156.0 2.0 222.6 (2.9) 377 .7
The opening balance of reserves at 1 April 2004 has been restated on adoption of UITF 38 “Accounting for ESOP Trusts”.
Notes to the financial statements 
continued
74 FKI plc Notes to the financial statements 29) Financial commitments
Authorised future capital expenditure was as follows:
Group Group Company Company
31 March 31 March 31 March 31 March
2005 2004 2005 2004
£m £m £m £m
Contracted but not provided for in the financial statements 2.9 3.9 – –
The annual commitments under non-cancellable operating leases for the Group were:
Land and buildings Other
31 March 31 March 31 March 31 March
2005 2004 2005 2004
£m £m £m £m
Leases expiring:
within one year 0.6 2.0 0.5 1.0 
in two to five years 4.7 8.1 2.4 1.9 
thereafter 2.5 2.3 0.1 0.1 
7.8 12.4 3.0 3.0 
30) Contingent liabilities
The Group has contingent liabilities amounting to £168.9 million (2004: £132.5 million), principally representing the guarantees given in the ordinary 
course of business on behalf of trading subsidiaries on which no losses are anticipated. In addition, there are contingent liabilities in the ordinary course 
of business in connection with the completion of contracts within specification, including responsibilities for maintenance.
The Company has contingent liabilities of £41.8 million (2004: £36.7 million) in respect of guarantees of subsidiary undertakings‘ banking obligations. 
In addition, the Company has guaranteed £98.1 million (2004: £149.3 million) of US dollar fixed rate guaranteed senior notes issued on behalf of 
FKI Industries Inc.
The Company and some of its subsidiaries are also the subject of various pending legal proceedings, incidental to present and former operations, which
have arisen in the normal course of business including claims on contracts, product liability, environmental claims and others. The claims giving rise to 
such proceedings are likely to be mitigated by legal defences, insurance, provisions and third party indemnities. The Company does not believe that the
outcome of these proceedings will have a material adverse effect upon the Company’s consolidated financial condition, results of operations or cash flow.
31) Reconciliation of operating profit to net cash inflow from operating activities
Year ended Y ear ended
31 March 31 March
2005 2004
As restated
£m £m
Operating profit before exceptional items and goodwill amortisation 95.8 96.5
Add back:
depreciation 36.6 44.1 
(profit)/loss on sale of tangible fixed assets (0.3) 1.8
loss on sale of investments – 0.3
T ermination and closure of business (17 .6) (14.8)
Pensions and other post-retirement benefits (13.3) (9.1)
(Increase)/decrease in stocks (12.9) 3.4 
(Increase)/decrease in debtors (13.9) 16.9
Decrease in creditors (2.4) (34.1)
Net cash inflow from operating activities 72.0 105.0
75 FKI plc Notes to the financial statements 32) Analysis of changes in net debt
1 April Other 31 March
2004 Cash flows Exchange non-cash items 2005
£m £m £m £m £m
Cash 84.6 (8.8) 2.9 – 78.7
Bank overdrafts (0.2) – – – (0.2)
84.4 (8.8) 2.9 – 78.5
Loans and finance leases (503.9) 2.7 2.9 (8.2) (506.5)
Short-term deposits 70.4 9.1 (2.2) – 77 .3
Total (349.1) 3.0 3.6 (8.2) (350.7)
33) Reconciliation of net cash flow to movement in net debt
Year ended Y ear ended
31 March 31 March
2005 2004
£m £m
(Decrease)/increase in cash in the year (8.8) 21.5 
Cash outflow from decrease in loans and finance leases 2.7 46.3
Cash outflow from increase in marketable securities and short-term deposits 9.1 24.8
Change in net debt resulting from cash flows 3.0 92.6
New finance leases (8.2) (0.1)
Effect of foreign exchange rate changes 3.6 56.8
(Increase)/decrease in net debt in the year (1.6) 149.3
Opening net debt (349.1) (498.4)
Closing net debt (350.7) (349.1)
The Group’s Guernsey-based captive insurance company is required to maintain a level of assets in support of the insurance business underwritten on
behalf of the Group. At the year end this amounted to £38.0 million (2004: £38.0 million) of marketable securities and deposits. Until such time as
alternative arrangements are in place, the £38.0 million remains assigned to the captive insurance company.
34) Sale of businesses
Y ear ended
31 March
2005
£m
Net assets disposed of:
T angible fixed assets 2.7
Stock 9.9
Debtors 16.1
Cash and short-term deposits 2.0
Creditors (9.2)
21.5
Goodwill written off against reserves 12.5
34.0
(Loss) on disposal (11.1)
Sales proceeds net of costs 22.9
Satisfied by:
Cash received net of costs 18.9
Cash receivable 4.0
22.9
Notes to the financial statements 
continued
76 FKI plc Notes to the financial statements 2005 2004 2003 2002 2001
Y ear ended 31 March £m £m £m £m £m
T urnover 1,290.5 1,345.1 1,452.6 1,610.0 1,741.8
Results (before exceptional items and goodwill amortisation)
Profit before interest*† 95.8 96.5 103.9 172.7 238.7
Interest and other finance charges* (25.4) (29.7) (26.5) (37 .7) (44.6)
Profit before taxation*† 70.4 66.8 77 .4 135.0 194.1
T axation (18.1) (16.9) (19.7) (36.5) (60.0)
Profit after taxation*† 52.3 49.9 57 .7 98.5 134.1
Exceptional items (net of tax) (105.5) (41.0) (17 .2) 1.6 (4.9)
Goodwill amortisation 26.7 29.8 29.7 29.3 28.4
Adjusted earnings per share*† 9.0p 8.6p 10.0p 17 .0p 23.4p
(Loss)/earnings per share*† (13.7)p (3.6)p 1.9p 12.2p 17 .6p
Dividends per share 4.5p 4.5p 4.5p 10.0p 10.0p
Net debt 350.7 349.1 498.4 532.5 484.8
T otal shareholders’ funds employed*† 144.1 238.9 284.5 476.2 471.1
Gearing* 243% 146% 175% 112% 103%
Capital expenditure 31.7 25.3 20.6 35.3 57 .9
Depreciation 36.6 44.1 49.5 52.4 50.3
Ordinary shares in issue (million)
Y ear end 582.3 581.7 581.7 581.0 575.8
Weighted average 582.0 580.0 579.0 576.9 572.2
Average number of employees 13,311 14,122 15,255 16,685 17 ,195
*Amounts for 2003 have been restated on adoption of FRS 17 “Retirement Benefits” .
†Amounts for 2004 have been restated on adoption of UITF 38 “ Accounting for ESOP T rusts” .
Five year record
77 FKI plc 
Financial calendar
Dividends on ordinary shares: Date paid/payable
Interim 1.5p 25 February 2005
Final 3.0p 7 October 2005
Annual general meeting 20 July 2005
Announcement of Group results:
Half year results November 2005
Annual results June 2006
Key dates FKI Logistex group
FKI Logistex North America Inc
FKI Logistex A/S (Denmark)
FKI Logistex Limited
Industry General Corporation (USA)
Lifting Products & Services group
Acco Chain & Lifting Products (USA)†
Bridon International Limited
Bridon New Zealand Limited (New Zealand)
Bridon American Corporation (USA)
BTS Drahtseile GmbH (Germany)
CERTEX Denmark A/S (Denmark)
CERTEX Finland Oy (Finland)
CERTEX Norge A/S (Norway)
CERTEX Svenska AB (Sweden)
Crosby Canada (Canada)†
N.V. Crosby Europe (Belgium)
Parsons Chain Company†
The Crosby Group Inc (USA)
The Harris Waste Management Group Inc (USA)
Welland Forge (Canada)†
Hardware group
Belwith International Limited (USA)
Faultless Caster (USA)†
Keeler Brass Company (USA)
Rhombus Casters Malaysia Bhd (Malaysia)
Rhombus Rollen Holding GmbH (Germany)
Truth Hardware Corporation (USA)
Weber-Knapp Company (USA)
Wright Products (USA)†
Energy Technology group
Bristol Babcock Inc (USA)
Brush Electrical Machines Limited*
Brush HMA B.V. (Netherlands)
Brush SEM s.r.o. (Czech Republic)
Brush Traction†
Brush Transformers Limited
Froude Consine†
Hawker Siddeley Switchgear Limited
Marelli Motori SpA (Italy)
Whipp & Bourne†
Other
FKI Engineering Limited*
FKI Industries Canada Limited (Canada)
FKI Industries Inc (USA)
West House Insurance Limited (Guernsey)*
All companies are wholly owned.
Shares of companies marked * are held directly by FKI plc.
†For statutory purposes these businesses operate as divisions of other FKI Group
companies.
All companies are incorporated and operate in Great Britain and are
registered in England and Wales unless otherwise stated. Companies
located overseas operate principally in the country of incorporation.
A full list of subsidiary companies incorporated in Great Britain and
registered in England and Wales will be lodged with the Registrar of
Companies.
As permitted by Section 231 (5) of the Companies Act 1985, only principal
operating subsidiary undertakings have been shown above.
Principal subsidiary undertakings
78 FKI plc  Directors
G Page CBE, Chairman
P Heiden, Chief Executive
N Bamford, Finance Director
R L Gott, executive director
R P Edey, non-executive
C R N Clark, non-executive
Sir Michael Hodgkinson, non-executive
C Matthews, non-executive 
Company Secretary
A Ventrella
Registered office
Falcon Works, PO Box 7713
Meadow Lane, Loughborough
Leicestershire LE11 1ZF
T elephone +44 (0)1509 612837
Fax +44 (0)1509 612339
Registered number
164945
Principal bankers
Barclays Bank PLC
Wachovia Bank, NA
Dresdner Bank AG
HSBC Bank plc
Nordea
Société Générale
ABN AMRO Bank NV
Australia and New Zealand Banking Group Limited
Bank of America
Deutsche Bank AG
Mellon Bank
Auditors
Ernst & Y oung LLP
1 More London Place, London SE1 2AF
Stockbrokers
Dresdner Kleinwort Wasserstein Securities Limited
20 Fenchurch Street, London EC3P 3DB
Registrars and transfer office
Capita Registrars
Northern House, Woodsome Park
Fenay Bridge, Huddersfield HD8 0LA
T elephone +44 (0)870 1623131
Fax 44 (0)1484 600911
www.capitaregistrars.com
Company website
www.fki.co.uk
Corporate information
79 FKI plc Designed and produced by Radley Y eldar (London) Analysis of shareholdings at 31 March 2005
Number of % of Number of % of
Size of holding shareholders total shares share capital
1-500 2,072 20.48 474,226 0.08
501-2,500 4,524 44.71 6,059,436 1.04
2,501-5,000 1,683 16.63 6,120,811 1.05
5,001-10,000 888 8.78 6,299,045 1.08
10,001-25,000 396 3.91 6,182,910 1.06
25,001-50,000 131 1.29 4,619,820 0.79
50,001-75,000 67 0.66 4,153,999 0.72
75,001-100,000 29 0.29 2,572,119 0.44
100,001-250,000 105 1.04 16,994,653 2.92
250,001-500,000 65 0.64 22,719,866 3.90 
500,000 or more 159 1.57 506,136,104 86.92
10,119 100.00 582,332,989 100.00
Shareholders’ information
80 FKI plc  Financial highlights
£1 ,290m 
Turnover
(2004: £1,345m)
£95.8m 
Underlying operating profit*
(2004 restated: £96.5m)
£65.7m 
Operating profit
(2004 restated: £32.5m)
£72.0m 
Net operating cash flow
(2004: £105.0m)
*Before exceptional items and goodwill amortisation
£35 1 m 
Net debt
(2004: £349m)
9.0p 
Adjusted earnings
per share* (2004 restated: 8.6p)
4.5p 
Dividend per share
(2004: 4.5p)
ifc Financial highlights
01 Group objective
02 Group at a glance
04 Chairman’s statement
06 Chief Executive’s review
08 FKI Logistex
10 Lifting Products and Services
12 Hardware
14 Energy T echnology
16 Corporate social responsibility review
22 Finance Director’s review
28 Board of Directors
29 Corporate governance
31 Directors’ report
33 Remuneration report
42 Independent auditors’ report
43 Consolidated profit and loss account
44 Consolidated balance sheet
45 Company balance sheet
46 Consolidated cash flow statement
47 Consolidated statement of total 
recognised gains and losses
47 Consolidated reconciliation of movements 
in equity shareholders’ funds
48 Notes to the financial statements
77 Five year record
77 Key dates
78 Principal subsidiary undertakings
79 Corporate information
80 Shareholders’ information Designed and produced by Radley Y eldar (London) FKI plc
Falcon Works 
PO Box 771 3
Meadow Lane 
Loughborough 
Leicestershire
LE11 1ZF 
T +44 (0)1 509 61 2837
F +44 (0)1 509 612339
fki.co.uk
FKI plc Annual Report 2005
FKI plc
Annual report 2005
Leading brands,
World-class technology