annual report 
 accounts 2007
rotork plc 
rotork house brassmill lane
bath ba1 3jq 
wwwrotorkcom
rotork p lc annual report  accounts 2007
rotork ar coverlayout 1  28308  1238  page 1 rest of the world
rotork africa pty ltd 
south africa
100 owned by rotork overseas ltd
karl rautenbach
general manager
tel 27 11 4539741
fax 27 11 4539894
email karlrautenbachrotorkcoza
rotork thailand ltd thailand
100 owned by rotork inc
chaitawat chotikawanish
manager
tel 66 2 530 2420
fax 66 2 530 2106
email chaitawcrotorkcoth
rotork actuation sdn bhd
malaysia
100 owned by rotork overseas ltd
aaron ow
general manager
tel 60 3 5191 3936
fax 60 3 5191 3937
email pkowrotorkcommy
rotork ltd hong kong
100 owned by rotork overseas ltd
eric li
general manager
tel 852 2 5202390
fax 852 2 5289746
email ericlirotorkcomcn
rotork trading shanghai 
co ltd china
100 owned by rotork controls ltd
eric li
general manager
tel 86 21 544 52910
fax 86 21 544 52912
email ericlirotorkcomcn
rotork japan co ltd japan
100 owned by rotork overseas ltd
masaru sakurai
general manager
tel 81 3 5632 2941
fax 81 3 5632 2942
email msakurairotorkcojp
rotork fluid system pty ltd
australia
100 owned by rotork overseas ltd
lyndon dean
general manager
tel 61 3 9729 8882
fax 61 3 9729 8884
email lyndonrfsaustraliacom
rotork controls india ltd india
100 owned by rotork controls ltd
ashok jayaram
president
tel 91 44 2625 4219
fax 91 44 2625 7108
email ashokjayaramrotorkcoin
rotork malaysia sdn bhd
malaysia
100 owned by rotork overseas ltd
aaron ow
general manager
tel 60 3 5192 8812
fax 60 3 5192 8821
email pkowrotorkcommy
rotork controls singapore pte ltd
singapore
100 owned by rotork overseas ltd
philip seah
general manager
tel 65 64571233
fax 65 64576011
email philipseahrotorkcomsg
rotork actuation 
shanghai co ltd china
100 owned by rotork controls ltd
bruce wang
general manager
tel 86 21 6434 8388
fax 86 21 6434 8266
email brucewang
rotorkshanghaicomcn
rotork controls 
korea co ltd south korea
100 owned by rotork overseas ltd
s w chun
general manager
tel 82 31 768 8151
fax 82 31 768 8156
email swchunrotorkcokr
rotork australia pty ltd australia
100 owned by rotork overseas ltd
lee howard
general manager
tel 61 353 381566
fax 61 353 381570
email leehowardrotorkcomau
shenzhen sinopecrotork
actuation co ltd china
35 owned by rotork controls ltd
81
annual report 
 accounts 2007 
designed and produced by merchant in collaboration with ammunition 
typeset origination by bettina brux
contents
01  financial  operational highlights
02  group at a glance
04  chairman’s statement
06  chief executive’s business review
14  rotork site services
16  research  development
18  statement of principal risks  uncertainties
20  quality and environmental
22  growth opportunities
24  board of directors
26  report of the directors
28  corporate governance
31  corporate social responsibility
34  remuneration report
41  independent auditors’ report
42  consolidated income statement
42  consolidated statement of 
recognised income and expense
43  consolidated balance sheet
44  consolidated statement of cash flows
45  notes to the group financial statements
73  rotork p lc company balance sheet
74  notes to the company financial statements
78  ten year trading history
79  shareholder information
80  directory
rotork ar coverlayout 1  28308  1238  page 2 annual report 
 accounts 2007 01
financial  operational highlights
our products reflect the
100 commitment dedication
and pride which has
enabled rotork group
to enjoy another
successful year
operational highlights 
≥ record performances in revenue
and profits in all three divisions
≥ rotork controls operating 
profit up 18
≥ rotork fluid systems achieved
15 return on sales and 33
growth in operating profit
≥ strong growth achieved by 
rotork gears operating profit
up 57
≥ margin improvement across 
all three divisions
≥ chinese market still buoyant
financial highlights
order book £98m 

29
revenue £236m 

14
profit before tax £57m 

24
earnings per share 456p 

25
recommended final
dividend of 140p 

20
additional interim dividend
during 2008 £10m 115p per share group at a glance rotork is the only uk listed
company 100 committed to developing selling and
supporting the best valve actuators to rapidly 
growing markets across 22 countries
rotork controls supplies the latest stateoftheart
electric valve actuators
financial
performance
order input 

57
revenue 

111
operating profit 

176 
no of employees 
983
rotork fluid systems supplies heavy duty pneumatic 
and hydraulic actuators for emergency shutdown in 
safety critical applications
financial
performance
order input 

346
revenue 

183 
operating profit 

333
no of employees 
267
customer service centre
assembly plant
north america and canada
we have two assembly plants in
the us and eight distribution and
marketing locations in this large
complex and sophisticated market
our business here supports the
group’s three main sectors of
water oil  gas and power
south america
each of the three divisional
businesses is active in this region
supported by direct presences 
in both venezuela and brazil and
our production facilities in the us
in addition our strong network 
of agents across south america
gives us total coverage of this 
area of major potential for
infrastructure growth
revenue £563m
employees 299
fluid
systems 
20
gears 
13
controls
67
 of group revenue
revenue 
£236m 

14 
profit 
before tax
£573m 

24 
our three opera ting divisions
achieved increased levels of
order int ake sales revenue
and opera ting profits
rotork gears a complete source of gearboxes adaption
and ancillaries for the valve industry worldwide
financial
performance
order input 

158
revenue 

313 
operating profit 

565 
no of employees 
165 
operating profit £m
50
40
30
20
10
0
222
231
257
309
370
435
2002 2003 2004 2005 2006 2007
operating profit £m
8
6
4
2
0
18
21
30
37
54
72
2002 2003 2004 2005 2006 2007
operating profit £m
8
6
4
2
0
26
29
32
38
46
73
2002 2003 2004 2005 2006 2007
02
annual report 
 accounts 2007  europe
rotork has a well established
presence in europe with eight
assembly locations across the
region supported by six direct
customer support centres europe
continues to have a strong
valvemaker base with a powerful
engineering and production
heritage that is integral to the
major infrastructure development
projects that are active across 
the world
africa
this is a diverse market with some
signiﬁcant project development
programmes investment in the
power industry as well as in 
oil  gas is supported through 
our direct presence local agents
and distributors as well as
regionally from our european
production units
asia
rotork has traditionally been strong
throughout asia and now counts
mainland china as the biggest
market for rotork electric valve
actuators we are making progress
in bringing these and the rotork
gears products into the wider and 
more price competitive areas of
infrastructure development in this
important market india has long
been core to rotork’ s strategy with
two production plants and 
a further three sales ofﬁces
australasia
this large geographic area is
supported by three customer
support centres one dedicated to
the fluid systems products and
one to rotork controls products
australia has a well developed
hydrocarbons market a strong
power industry and complex water
and irrigation systems across its
landmass
revenue £687m
employees 307
revenue £1107m
employees 809
03
annual report 
 accounts 2007  chairman’s statement the past year has seen rotork
celebrate its 50th anniversary in a period when strong
trading has enabled us to achieve record results and 
a sound position from which to enter 2008
financial highlights
the past year has seen rotork
celebrate its 50th anniversary in 
a period when strong trading in
each of our underlying markets
has enabled us to achieve record
results and a sound position from
which to enter 2008 we have
passed a number of milestones
including record performances in
terms of revenue and proﬁts from
each of the three operating
divisions and ﬁnished the year with
our highest ever reported order
book up 29 at £98m total sales
revenue was £236m up 14 on
2006 and proﬁt before tax
increased by 24 to £573m 
the trading ﬁgures are after the
negative impact of currency in a
year where the weakening us
dollar reduced the value of part of
our earnings however in spite of
this currency headwind we were
still able to improve operating
proﬁt margin from 218 to
235 due to operational gearing
and the robustness of rotork’s
business model at constant
currency sales revenue and proﬁt
before tax increased by 18 and
31 respectively
divisional highlights
rotork controls
the oil  gas power and water
markets which the controls
division serves continued to be
active in the year particularly in
asia and europe the new
production facility in shanghai
had a successful ﬁrst full year in
operation and met all of its goals
this facility will be of increasing
signiﬁcance in supporting the
important chinese market in 
the future
the division increased revenue to
£164m up 11 on the prior year
with operating proﬁt at £44m up
18 we now believe that the mix
of facilities that we have in the
controls division across the world
gives us the capacity to support
our customer base in each of our
markets for the foreseeable future
new marketing initiatives took
place in the year and we opened
our ﬁrst direct presence in brazil 
rotork fluid systems
rotork fluid systems continued 
its pattern of strong growth
established over the last few years
and expanded its share of the
available market as well as
capitalising on the signiﬁcant
investment currently being seen
worldwide in the markets for its
products sales revenue grew 18
to £48m and operating margin
achieved our 15 target we are
increasingly being seen as
providing the actuator of choice 
by leading industry participants
this has been helped by our
exacting approach to product
quality constant investment in
facilities and products and our
drive to bring technology originally 
developed for our electric actuator
products into our fluid systems 
product offering
rotork gears
rotork gears produced strong
results in the year with sales
revenue up 31 at £32m and
operating proﬁt up 57 to £7m
we are now the largest
manufacturer of products of our
type and have production facilities
in ﬁve countries in europe the us
and asia we can effectively offer
a local service to customers
wherever they are based from our
global facilities we are continually
improving products and services
and developing new products for
use on standard and specialist
applications the net margins in
this business have increased as we
continue to improve efﬁciency and
reduce costs
1976
04
04
77
04
78
07
79
07
80
08
81
12
82
13
83
15
84
18
85
22
86
24
87
24
88
27
89
30
90
33
91
37
92
43
93
48
94
54
95
80
96
93
97
109
98
122
99
122
00
130
01
139
02
148
03
158
05
207
93
07
182
116
06
151
59
04
core dividend additional dividend
dividend p
04
annual report 
 accounts 2007  cash
cash generation in the year has
been strong due to the buoyant
trading position and good control
of working capital in addition
except for a £2m additional
contribution to the uk ﬁnal salary
pension scheme there have been
no unusual cash outﬂows in the
year with the result that cash
balances increased at the year end
to over £38m subsequent to the
year end we announced two
acquisitions the acquisition of
remote controls sweden was
completed on 30 january 2008 
for a consideration of £13m 
much smaller but strategically
important was the acquisition of
the intellectual property and
business of the drallim svm
product on 13 february 2008 
for £630000 both of these
transactions were settled for cash 
dividend
the board is recommending an
increase in the ﬁnal dividend for
2007 and the payment of an
additional interim dividend for
2008 the ﬁnal dividend for 2007
of 140p per share an increase of
20 year on year will be paid on
9 may 2008 to shareholders on
the register on 18 april 2008 
a one off additional dividend 
of £10m 115p per share will 
be paid on 18 july 2008 to
shareholders on the register on 
27 june 2008 
performance and risk
in his business review the 
chief executive discusses the
application of the group’s
approach to performance
measurement through kpis 
our approach to the assessment
and mitigation of risk and how 
we ensure that we have correct
health  safety procedures and
environmental policies we take
great care to deal with these
matters responsibly ensuring 
that controls and processes are
embedded in working practices
where possible and that reporting
is prompt and transparent 
our increased disclosure this 
year underscores the importance 
which we attach to these matters
board changes
john matthews has been the
senior independent director 
since joining the board in 1998
and for much of this time has
chaired both audit and
remuneration committees
having now completed nine years
on the board john will retire 
at the forthcoming agm 
he leaves with our best wishes
and appreciation for his much
valued advice and support
i am pleased to welcome john
nicholas to the board as a non
executive director john is currently
group finance director of tate 
lyle plc prior to which he held the
same position at kidde plc he will
chair the audit committee and be
a member of both the nomination
and remuneration committees 
bill whiteley
bill whiteley who will retire at this
year’s annual general meeting
has been a director of rotork plc
for twentyfour years the last
twelve of which he has served as
chief executive during his tenure
as chief executive bill has led the
group to outstanding success and
consequently its world leadership
position in its specialised sector
and its position as a highly rated
constituent of the ftse 250 he
leaves a strong and experienced
executive team who under the
leadership of his successor peter
france are well placed to deliver
further growth on behalf of the
board i extend to bill our
appreciation and gratitude for his
enormous contribution and wish
him well for the future
outlook
projects across nearly all of our
geographic and end user markets
remain active order intake at the
start of the year has been
particularly buoyant including 
a strong start from our north
american and chinese operations
in contrast with recent years it
would appear that our trading
results are likely to be enhanced 
by a more favourable currency
environment in 2008
05
annual report 
 accounts 2007 
roger lockwood
chairman
29 february 2008 chief executive’s business review for over 10 years
rotork has been the world leader in actuation solutions
for the oil  gas power and water  waste water
treatment sectors of the capital goods market 
business overview
for over 10 years rotork has been
the world leader in actuation
solutions for the oil  gas power
and water  waste water
treatment sectors of the capital
goods market our products are
also used in a wide range of
applications in a variety of
industries including shipboard
control systems ventilation and 
air handling control rotork is a
genuinely global business with
both marketing and production
operations across the world 
we are known for our ability to
support customers in the ﬁeld at
very short notice from our own
resources rotork has a reputation
for innovative solutions to
complex problems and our
product development history 
has shown a pattern of improving
the efﬁciency quality and cost
effectiveness of the product
through the application of
technology this and a constant
drive to improve customer
support has lead to us being 
the number one heavy duty
actuator group in the world 
we are structured around 
three divisions
rotork controls the original
and largest division supplying
high quality state of the art
electric actuator products for
controlling industrial valves
rotork fluid systems 
which supplies heavy duty
pneumatic and hydraulic valve
actuators for operation in plant
control emergency shut 
down and other critical
applications primarily for 
the oil  gas sector
rotork gears a world leader 
in the supply of gearboxes
adaptors and ancillaries for 
the valve industry
rotork supports customers across
the world mainly through directly
owned operations we have 14
production plants internationally
and multiple direct sales and
support operations in 22 countries
this together with an extensive
network of indirect sales ofﬁces
gives total coverage of our
customers and markets globally
we have around 12000 
active customers 
the key drivers for the group’s
businesses relate to investment in
oil  gas power generation and
water  waste water installations
around the world with demand
being generated by new and
expanded capacity upgrades to
existing facilities and replacements
this is often linked to projects
which are aimed at improving 
the efﬁciency safety and
environmental performance of
plants valve actuators are critical
components and their longterm
reliability and performance is
extremely important to users 
they also act as a key interface
between plant control systems and
related hardware rotork’s
reputation for quality worldwide
support and technical innovation 
is crucial to its leadership position
in the ﬁeld the broad geographic
spread of our operations and
applications means that we have a
large number of repeat customers
around the world and no one
customer accounts for more than
5 of our revenue in any year
business strategy
the objective of rotork plc is to
increase shareholder value by
developing its leadership position
in worldwide valve actuator
activities the group’s businesses
are focused on the specialist area
of valve automation the origins 
of the company go back to the
1950s and over its 50 years in this
business rotork has continued to
build on its reputation as an
innovator of new concepts in this
ﬁeld and has provided users with
increasing levels of functionality
performance and assurance our
strategy of providing modern
innovative products that leverage
technology while remaining
focussed on the technical
applications that our customers
need has enabled us to provide
quality solutions to the industries
that we serve we have been able
to do this partly as a result of our
methodology of selling directly to
our end user customers and their
technical advisers this ensures
that where possible plant
speciﬁcations have the correct
products for the application and
support the customer’s need for
plant efﬁciency and control
rotork’s focus on 
technical applications 
that our customers need 
has enabled us to provide 
quality solutions to the 
industries we serve 
location headquarters 
bath uk
240
220
200
180
160
140
120
100
80
60
40
20
0
1469
1748
2067
2357
2004 2005 2006 2007
group revenue £m
06
annual report 
 accounts 2007  bill whiteley
chief executive
29 february 2008 chief executive’s business review continued
the group’s recent strategy has
focused on opportunities to
leverage our leadership position 
in heavy duty electric actuation
into other closely associated areas
of valve automation key
programmes relate to the
development of products and
control systems marketing
initiatives creating service revenue
opportunities and driving cost
reductions relating to these
businesses the most important
current product initiative relates 
to the development of our range
of actuators aimed at the process
control market which is referred
to further in the research 
development section
year under review
in 2007 rotork celebrated its 
50th anniversary in style with 
end user and geographic markets
very active throughout the year
the rate of investment in
infrastructure in energy and water
projects continued to increase
which beneﬁted all three of our
operating divisions overall order
intake was up 126 and revenue
up 140 the order book
increased to £976m which is
285 up on the start of 2007
proﬁt before tax was up 243
return on sales as deﬁned on
page 11 a key performance
indicator of the business increased
to 243 from 223 last year
rotork controls
revenue from our electric actuator
division rotork controls increased
by 111 to £1642m while
operating proﬁt rose by 176 to
£435m at constant currencies
these increases would have been
154 and 237 respectively 
as a percentage of unit actuator
order input the principal markets
for electric actuators were oil 
gas 39 2006 40 water 22
19 power 31 32 and
miscellaneous 8 9 as can 
be seen the end user markets 
were similar to the prior year but
with an above average increase in
the number of actuators going
into the water market this 
was driven by growth in the
markets worldwide and improved
penetration in some key markets
uk operations
we continued to see good levels
of business emanate from the 
uk with the water market
beneﬁting from amp4 investment
requirements laid down by 
the regulator and the power
market from the large combustion
plant directive
there was a strong sales and proﬁt
performance from the main electric
actuator assembly plant in bath
which was assisted by continuing
sourcing initiatives limiting the cost
of component increases we are
looking for additional initiatives 
in 2008 to continue to mitigate
cost pressures
europe
the european sales and support
companies all increased proﬁts
from the prior year with
particularly strong performances 
in italy and germany europe
accounted for 16 of the total
input units against 13 in 2006
work on existing oil  gas
installations was active throughout
the region in particular we
beneﬁted from increased
investment in oil and product
storage facilities our business in
the water market in continental
europe also continued to grow
with our french subsidiary making
encouraging progress elsewhere
our relatively new russian sales
company continued to develop its
business while the dutch company
doubled the size of its facility to
enable it to expand its factory ﬁt
and site service capabilities 
the european businesses also
beneﬁted from increased business
from valvemakers in their
territories the italian valvemakers
in particular had extensive order
books built on the high level of
worldwide energy projects
particularly those being built in 
the middle east
200
180
160
140
120
100
80
60
40
20
0
1093
1285
1478
1642
2004 2005 2006 2007
controls revenue £m
08
annual report 
 accounts 2007  the americas
rotork controls inc had a number
of challenges entering 2007 which
included a high hurdle set by its
prior year proﬁt performance a
softening us and an economy
which was displaying weaknesses
in some areas against this
background the company
performed well and continued 
to beneﬁt from investment in
water  waste water treatment
facilities it also beneﬁted from the
us valve industry’ s competitiveness
on international projects us
process controls saw a good
recovery of its business mainly
based on improved sales to the
power companies 
the canadian company had a
disappointing year due to slower
than expected project activity
especially in the west the
venezuelan subsidiary continued
to face difﬁcult challenges in what
is potentially a promising market
for our products
for the americas order input in
units increased in total but reduced
to 16 from 17 of the group
asia paciﬁc and the rest 
of the world
asia continued to be a major
engine for growth for the business
asia paciﬁc accounted for 50 of
the input of electric actuators up
from 49 last year china
continued to be the most
important contributor with
increased levels of business 
the indian market maintained the
high levels of business seen in
2006 driven by investment in
power generation and large
reﬁnery projects our electric
actuator manufacturing plants in
kuala lumpur shanghai chennai
and bangalore all performed well
and achieved increases in proﬁts
elsewhere the singaporean
malaysian and thai sales
companies all saw increased levels
of business as did those in japan
and korea the latter did well to
overcome some local difﬁculties
and ended the year with a
stronger operation 
the australian operation
continued to perform well while
the turnaround in the fortunes of
our south african company which
made a loss in the prior year was
also most encouraging
rotork fluid systems
rotork fluid systems which
designs assembles and markets
pneumatic and hydraulic valve
actuators continued to achieve
exceptional growth the main
markets served by our products 
are oil  gas related and unlike
electric actuators the majority are
used on upstream applications
transmission and lng plants 
terminals these markets continue
to beneﬁt from high levels of
investment a notable success was
winning substantial orders on the
very large shell gtl ‘gas to
liquids’ pearl project in qatar 
the principal assembly plant is
based in lucca italy with products
also assembled in rochester ny
and melle in germany the division
had two longterm key
performance goals firstly to
achieve 20 of group revenue
and secondly a 15 return on
sales it just achieved both of these
objectives this year having
narrowly missed the revenue target
in 2006 19 and increased
return on sales from 133 to
150 in 2007 this is despite its
main cost base being in euros and
the eurodollar rate having
averaged 138 against a prior
year of 126
order input was 346 up on 
the prior year while revenue
increased by 183 to £479m
and operating proﬁt was up
333 to £72m
50
45
40
35
30
25
20
15
10
5
0
238
323
405
479
2004 2005 2006 2007
fluid systems revenue £m
09
annual report 
 accounts 2007  chief executive’s business review continued
the italian operation performed
very well and we increased our
investment in the facility improving
the ofﬁce area and installing an
upgraded erp system both there
and in the plant in melle 
the product range was extended
and improved while further
progress was made in gaining
additional customer and market
approvals the division had
increasing success on projects
requiring engineered solutions
particularly in the electrohydraulic
‘eh’ gas over oil linear and
subsea product areas a notable
success was the large eh order for
the aramco khurais project in
saudi arabia the us operation
also beneﬁted from the upsurge in
engineered solutions business 
the division’ s global capabilities
continued to be enhanced mainly
through the development of the
group’ s worldwide sales companies
and ofﬁces among these the uk
based operation in leeds and the
spanish ofﬁce had excellent results
the acquisition of remote 
controls sweden was completed
on 30 january 2008 for a
consideration of £13m this
company which is based in falun
sweden was established in 1961
and has a worldwide reputation
for supplying high quality lower
torque actuators to a wide array 
of markets these products
complement the mainly heavy 
duty products of the existing rfs
ranges and will be sold through
rotork’s worldwide network of
sales ofﬁces
the acquisition of the drallim svm
partial stroke and valve monitoring
patented product for £630k on 
13 february 2008 provides the
division with a platform to further
develop products for safety critical
applications rotork has sold the
svm product for some years and
sees the demand for this type of
diagnostic system increasing due
to its ability to improve plant safety
and productivity while also
reducing plant capital costs
rotork gears
rotork gears manufactures
gearboxes adaptors and other
ancillary devices for industrial
valvemakers worldwide through
these valvemakers it serves a wide
variety of end user industries
rotork gears achieved growth 
well above our plans and beneﬁted
from an active worldwide valve
market especially in europe and
america and investment in its
worldwide operations and supply
chain revenue was up 313 to
£319m and operating proﬁt was
up 565 to £73m the star
performers were the two main
plants in leeds and losser in 
the netherlands both achieved
signiﬁcant growth in revenue 
and proﬁts
much work and investment was
centred on the new chinese
facility which met an ambitious
production target and achieved a
number of important milestones
including the assembly of the
updated 232 aluminium range 
of units and further progress 
was made in opening up the 
asian market
the engineering team was re
organised to create a dedicated
rd resource and progress was
made with a number of important
product initiatives new or
improved product ranges will be
launched in 2008
one of the key objectives for the
coming year will be to develop the
existing operations those already
mentioned plus the operation in
italy ﬁrstly to ensure that the
business continues to increase
capacity to improve service levels
to our customers secondly to
make sure that opportunities to
rationalise production and reduce
costs are delivered
key performance indicators
‘kpis’
rotork has a culture of customer
service and support and this ethos
is reﬂected in the way that the
business is controlled on a day to
day basis we manage the
operations through targets
primarily related to trading
activities and have well established
systems and procedures to support
this kpis have long been used to
aid management in monitoring
progress in achieving its objectives
most targets are ﬁnancial kpis but
more recently we have developed
a similar approach to non ﬁnancial
issues connected with areas such
as environmental matters and
health  safety 
rotork’s philosophy of product
assembly only using sub
contractors to manufacture
components gives signiﬁcant
ﬂexibility in the production model
and kpis assist in monitoring 
the efﬁciency of this model
management’s focus is on what
we regard as the high added value
activities of design marketing and
management control this means
that our approach to measuring
performance is oriented towards
success in penetrating the markets
in which we operate the
development and proﬁtability of
our products a desire for a high
return on capital and strong cash
generation we have produced
consistent improvement in
performance in these measures
through the year under review
35
30
25
20
15
10
5
0
178
191
243
319
2004 2005 2006 2007
gears revenue £m
10
annual report 
 accounts 2007  the group uses a range of
indicators to assess performance at
individual company divisional and
group level the following are the
main key performance indicators
at group level showing four years
performance and explanation
where appropriate of issues
underlying some of the measures
financial kpis
growth of the business market
penetration and quality of earnings
are crucial target areas for rotork
and we have a number of
measures of performance used
throughout the rotork
organisation revenue growth is 
a simple but effective measure of
our performance against our
objectives in this area and
supported by the relationship of
our net proﬁt to sales and the
growth in earnings per share
provides a small but powerful
range of ratios that enable
management to quickly view the
performance of the business and
drill down to divisional level and
below to view returns with an
asset light business model we
have a target of growth in return
on capital which provides an
effective view of balance sheet
performance and each of the
divisional businesses review this
conversion of proﬁt into cash has
a high priority within the group
and is embedded within reward
schemes at divisional management
as well as group level
sales revenue growth
this is reported in detail for all
operating businesses and is a key
driver in the business these
measures enable us to track our
success in speciﬁc project activity
and our progress in increasing 
our market share by products 
and region this also is an
important driver in our product
development programme 
return on sales
this is calculated as proﬁt before
tax after ﬁnancing and interest
shown as a percentage of sales
revenue this measure brings
together the combined effects 
of procurement costs and pricing
as well as the leverage of our
operating assets our overall aim 
is for continuous improvement
over time notwithstanding the
impact of currency
cash generation
the conversion of proﬁt into cash is
an important measure for rotork
this is calculated as the ratio of
operating cash ﬂow to operating
proﬁt operating cash ﬂow is
deﬁned as the movement in cash
and cash equivalents adjusted to
add back cash ﬂows from
ﬁnancing activities the acquisition
of subsidiaries income taxes paid
exceptional cash outﬂows and less
interest received it is used
internally as a measure of
performance where a target of
85 is regarded as a base level of
achievement this also forms one
of the constituent parts of the
reward system where management
is incentivised to achieve a
performance beyond this level 
return on capital employed
rotork has an asset light business
model by design and reporting
this ratio internally helps
management at group level to
monitor our adherence to this
philosophy the calculation shows
proﬁt before tax as a percentage
of capital employed capital
employed is deﬁned as
shareholders’ funds less net cash
held and the pension deﬁcit net of
related deferred tax is added back
240
220
200
180
160
140
120
100
80
60
40
20
0
80
190
182
140
2357
2007
2067
2006
1748
2005
1469
2004
sales revenue £m growth 
26
24
22
20
18
16
14
12
10
8
6
4
2
0
243
223
210
214
2007 2006 2005 2004
return on sales 
110
100
90
80
70
60
50
40
30
20
10
0
99
102
101
86
2007 2006 2005 2004
cash generation 
11
annual report 
 accounts 2007 
90
80
70
60
50
40
30
20
10
0
79
69
54
53
2007 2006 2005 2004
return on capital 
employed  chief executive’s business review continued
eps growth
the measurement of earnings 
per share reﬂects all aspects of the
income statement including
management of the group’s 
tax rate we aim to increase eps
each year
nonﬁnancial kpis
we monitor nonﬁnancial areas 
in our businesses particularly in 
the environmental health  safety 
and quality control areas and 
put strong emphasis within our
organisation on improving our
performance here
waste recycling
this kpi measures the proportion
of total waste produced which 
is recycled we have an active
programme aimed at reducing 
our environmental footprint
throughout the organisation 
we collect this information
through regular submissions
through our extranet site 
dividends
rotork is a cash generative
business and has a policy of
returning funds to shareholders
where they are not required for
reinvestment in the business in the
foreseeable future the board’s
policy is one of increasing
dividends generally in line with
earnings in recent years where
there has been excess cash in the
business this has been distributed
back to shareholders in the form
of additional dividends in the year
under review cash generation has
been good and the board is
recommending to shareholders
that the ﬁnal dividend for 2007 
be 140p per share which is an
increase of 20 over the prior
year in addition the board is
intending to pay an additional
interim dividend for 2008 of 
115p per share representing the
distribution of £10m of excess
cash this will be paid to
shareholders on 18 july 2008 to
shareholders on the register on 
27 june 2008
treasury
the group’s treasury function in
bath manages ﬁnancial risk
relating to foreign currency
exposure debtor risk and cash
movements within the group 
rotork is affected by movements
in world currencies and aims to
mitigate the effect of this through
the diversity of location of
production units as well as taking
action through derivative
instruments the main currency
exposure results from trading
transactions between our
production plants and trading
companies and customers around
the world this exposure is covered
by simple forward cover derivative
instruments aimed at protecting
known income streams no
speculative or non trading hedging
takes place within the group 
the impact of currency on the
results of the group can best be
seen by converting the 2007 results
to the effective exchange rates for
2006 so comparing results at
constant currency see table below
overall we believe that proﬁt for
the year would have been
approximately £28m higher if the
2006 exchange rates had prevailed
the increase in operating proﬁt
reported as 228 would have
shown an increase of 290 at
constant currency weighted
average rates for translation of 
our two main trading currencies 
for the last few years are shown 
in the table below
receivables management is done
at each operating business unit 
but controlled centrally in bath
there is commonality in our
customer base across many of the
geographic units and debts outside
the uk are insured centrally on 
a limit per customer basis and this
operates across the operating
divisions overall we believe a level
of 65 days sales outstanding for
receivables is appropriate for 
our mix of business at the year
end this ﬁgure was 60 days an
improvement of 2 days compared
with 2006
30
25
20
15
10
5
0
253
273
167
52
2007 2006 2005 2004
eps growth 
60
50
40
30
20
10
0
57
46
38
2007 2006 2005
waste recycling 
operating profit at constant currency
2007 2006
£m £m
operating profit as reported 554 451
translation impact 05 –
transaction impact 23 –
operating profit at 2006 rates 582 451
weighted average rates
us dollar euro
2002 152 158
2003 166 144
2004 183 146
2005 180 146
2006 184 147
2007 201 145
12
annual report 
 accounts 2007  pension schemes
over the last few years there has
been a lot of focus on pension
schemes particularly company
liabilities relating to under funded
legacy deﬁned beneﬁt schemes
rotork’s uk ﬁnal salary scheme
was closed to new entrants in
2002 when a deﬁned contribution
scheme was opened for employees
joining from the beginning of
2003 the group has made
additional contributions into the
uk ﬁnal salary scheme between
2004 and 2007 and the scheme
had its latest actuarial valuation
review during 2007 the results of
this showed it was 98 funded
on an actuarial basis which is
precisely the position that the
additional contributions were
aiming to achieve and it is now
felt that the scheme is back in
equilibrium the main issue for
schemes of this type in recent
years has been the effect of longer
life expectancy the fact that
pensions in payment will have to
be paid for longer as people
expect to live longer this issue
could continue to affect schemes
as mortality assumptions evolve
further over the next few years
however management and the
pension scheme trustees with the
advice of the scheme actuary
consider that the potential for
adverse mortality assumptions to
impact the scheme further is
controllable within the current
range of contributions
the impact of improved mortality
is not presently anticipated to have
an impact on cash contributions
beyond normally expected funding
levels in terms of the charge to
the income statement under ifrs
these assumptions will have an
impact as a result of the last
actuarial valuation by increasing
the charge against proﬁt the
charge against proﬁt before tax
will increase to around £16m in
2008 compared with the charge
of £07m in 2007
rotork community
rotork celebrated its 50th year of
incorporation with a number of
marvellous events which were
attended by both past and present
employees as well as others who
have had much to do with the
group’s success we also
celebrated this milestone with a
publication which drew very
positive comments from a wide
group of stakeholders 
the events demonstrated the
commitment and affection 
that everyone has for the
organisation which makes it such 
a formidable presence in its ﬁeld 
i have enormously enjoyed every
aspect of my involvement with
rotork over the past thirtyfour
years and feel very privileged to
have led it over the past twelve
rotork has always had a unique
spirit which i feel conﬁdent under
the talented leadership of peter
france will propel it to even
greater success i would like to
thank all of our employees around
the world for their dedication skill
good humour and friendship and it
is them that i will miss most when i
retire on 2 may
13
annual report 
 accounts 2007  rotork has been a leading actuator
manufacturer for over 50 years
and its valve actuators and
gearboxes are designed to provide
a signiﬁcant service life often 
in arduous conditions longterm
cost of ownership is an important
factor to our customers along 
with reliability and these issues
drive the choice of rotork over 
any alternative with rotork
providing the after sales support
customers know that the
equipment will be maintained to
its original speciﬁcation and
operational efﬁciency which is
particularly beneﬁcial where the
product is certiﬁed 
rotork site services ‘rss’ the
new projects service and retroﬁt
arm of the group which supports
all three divisions is active in 47
service centres in over 20 countries
around the world with agents
providing support services in
another 55 countries this brings
the total number of expert
technicians supporting rotork
customers to well over 1000
rss provides support at plant level
on all applications where our
products are used embedded
within the site structure and often
within the customer’s operating
team our engineers can provide
total support to ensure that the
plant operator gets maximum
advantage from its investment in
addition we are able to aid the
customer when investment
programmes are being considered
by providing technical input to the
expansion and upgrading of
equipment and to ensure that the
correct equipment is considered
and commissioned appropriately
within rss our aim is to make the
application and utilisation of our
products and services easy
whether it is by
delivering small turnkey
projects to actuate existing
manual valves for customers
refurbishing aging actuators
typically 25 years old to give
them another lifetime of utility
project managing the
upgrading of site’s entire
actuation assets and associated
equipment
connecting actuators to 
valves for new build projects 
for valve makers and end
customers to facilitate easier
installation on site
delivering preventative
maintenance programmes
availability of our engineers on
a call out basis to support the
customer’s own maintenance
programme
through delivering added value
services across the world we
continue to differentiate our
business strengthen relationships
with our customers and contribute
to the growth in the group’ s
revenue and proﬁts
one signiﬁcant area of growth in
2007 has been the uptake of multi
year preventative maintenance
contracts particularly by the
petrochemical sector where uptime
is of critical importance we now
have over 100 maintenance
contracts covering over 50000
actuators worldwide through
combining technology built into
our actuators expert service
engineers and data evaluation
processes we are able to identify
deterioration within a valve early
this enables unnecessary outages
to be minimised whilst focusing
maintenance expenditure where 
it is needed
2008 will see rss grow further in
terms of the service centres we
operate from the scope of the
services we provide and the value
we bring our customers
iq pro multi turn actuator
for low temperature 
operation on natural 
gas pipelines
standard 1p68 temperature 
range and explosion proof 
enclosure
14
annual report 
 accounts 2007 
chief executive’s business review continued
rotork site services provides support at plant level
on all applications where our products are used once installed 
our product is
practically
ignored by our
customer
just as we intended with a signiﬁcant proportion of
our income derived from products
introduced within the last ﬁve
years investment in our product
portfolio is an important part of
rotork’s success in addition to
continuous improvement of our
main electric and ﬂuid power
actuator ranges we have
continued to invest in our
proprietary pakscan networking
system with further development
of the master station to extend its
functionality and enable it to be
installed outside the protected
environment of the control room
development of a mesh based
wireless system has now reached 
a stage where the initial technical
hurdles have been overcome and
ﬁeld trials are anticipated during
2008 this is an important
development which will enable
our customers to extend their
plant visibility and control systems
at very reasonable cost and with
minimal disruption the continued
development of and improvement
to plant control and monitoring
systems is an important part of the
drive towards more energy
efﬁcient intelligent plant processes
and rotork has established a
market leadership role in valve
actuator control systems
the release of an optional module
that enables the iq series of
products to be used within safety
instrumented systems signalled the
successful conclusion of this
development initial market
response indicates that the addition
has been well received and will
assist users in complying with
regulatory requirements other iq
related research has focused on the
use of alternate materials as a
means of reducing costs
work continues on the
development of a variant of the
iqt product for naval applications
with ﬁrst shipments expected
during the last quarter of 2008
following the extensive feasibility
exercise reported last year work
commenced at the beginning of
2007 on the detailed design of a
family of actuators for the process
control market this is an important
area of development for rotork it
is expected that initial sizes of this
product will commence production
in the second half of 2008 
a marketing structure has been
deﬁned and is being built up 
t est products have been giving
excellent performances at a
number of beta sites and the
launch of this new product line for
rotork is eagerly awaited
the fluid systems division has
continued to work closely with its
key customers resulting in the
approval of fast acting spring
return actuators suitable for use
within high integrity pressure
protection systems ‘hipps’ 
such actuators are an essential
component of the safety
instrumented systems required to
mitigate over pressure events 
the hipps approach can provide
environmental beneﬁts in the form
of reduced venting to atmosphere
and in some cases may eliminate
the need for ﬂaring other
developments have included
increasing the torque capability of
the pipeline solutions to enable
their use in severe service mining
applications where the latest
autoclave valves require in excess
of 5 million nm
development work has also been
undertaken in a combined effort
between the fluid systems and
gears divisions to provide a sea
bed solution for the hydraulic
automation of subsea valves with
independent manual override
within the gears division a project
commenced to develop a new
range of manual quarterturn
gearboxes for valve operation 
the aim is to increase ﬂexibility as
well as performance making the
product suitable for stocking and
modiﬁcation at customisation
centres around the world this
project is expected to continue
throughout 2008 with design and
testing of a number of prototype
units already well underway
16
annual report 
 accounts 2007 
pipeline application
operational ambient to 50ºc
special lubrication required
chief executive’s business review continued
research  development continual investment 
in our product portfolio is an important part of
rotork’s success reliability counts
whatever the
conditions our
actuators are
designed to 
work effectively
for a lifetime the group has an established risk
management process which works
within the corporate governance
framework set out in our corporate
governance statement the major
risks affecting the group are
identiﬁed by senior management in
association with the board and
with the support of the external
auditor this involves regular risk
assessment and a process for
ensuring that the group’ s approach
to dealing with individual risks is
robust and timely these risks are
categorised by likely impact on the
business and the likelihood of the
event occurring they can be seen
to fall into three main risk areas
risks affecting the strategic
aims of the business or those
issues that affect the strategic
objectives faced by the group
financial risks – issues that
could affect the ﬁnances of 
the business both externally
and from a perspective of
internal controls
operational risks – matters
arising out of the operational
activities of the group relating
to areas such as procurement
product development and
interaction with commercial
partners
principal strategic risks
as an international business
rotork operates in all markets
across the world mainly through 
a direct presence but in the smaller
territories through agents implicit
in this is the benevolent trading
environment that comes with
stable regimes across the globe
and disruptions to this stability
regionally could affect our ability 
to trade effectively it is not
possible to fully mitigate this as a
risk but our truly global spread of
business and visibility of potential
risk areas enables us to contain 
our exposure
product and control systems
development which threatens our
market leadership position is a
signiﬁcant risk this is an important
factor driving us to maintain
technological leadership with our
actuators and systems we aim to
give customers increasingly greater
control over their applications and
value for money as we enhance
diagnostics functionality and
control we also recognise the
need for global manufacturing 
by sourcing components across the
world and have created production
facilities in lower cost areas which
are often closer to end user
markets our successful expansion
into asia has been as a result of
recognising this our business
model is less vertically integrated
than our competitors and we are
able to take strategic sourcing and
build decisions quickly
principal financial risks
foreign currency management is
an important area for rotork and
the potential for signiﬁcant
movements in world markets for
the currencies in which we operate
present signiﬁcant risks for us
there are a number of ways in
which we can approach these
risks shortterm movements are
addressed using forward exchange
contracts to ensure that when we
have contractual liabilities we can
effectively mitigate and ﬁx the
exposure this does not of itself
avoid the impact of longterm
trends which are ultimately best
handled through a spread of
vendor programmes across the
geographical areas over which 
we operate this plus the
development of local production
facilities provides natural hedging
where it is needed
internal control within the
businesses is supported by a strong
ethos of ﬁnancial internal audit
which rotork has developed over 
a number of years utilising the
skills of accountants from across
the businesses this methodology
ensures that we have auditors 
who are aware of the business
issues and risks involved in them
independence is maintained by
ensuring that any auditor with
divisional responsibility only 
audits companies outside their
own division 
further ﬁnancial risk areas have
been identiﬁed in cash control and
credit management both functions
are centrally controlled within the
group and are monitored through
the audit process for compliance
and are reported on to the 
audit committee 
while these are the principal risks
the risk assessment process goes
far beyond this to identify medium
grade and relatively minor risks and
provide a process for their regular
review aiming to give action plans
to create wherever possible an
embedded approach to the
containment and management 
of risks in the businesses
18
annual report 
 accounts 2007 
chief executive’s business review continued
statement of principal risks  uncertainties the
group has an established risk management process which
works within the corporate governance framework principal operational risks 
having the right people in the
right place at the right time is 
key for a business like rotork 
we devote a lot of effort to
developing our employees and
giving opportunities for those who
want to develop their skills and
experience across our operational
landscape this approach to
succession planning has enabled
us to identify candidates for
promotion within the businesses
ensure that the necessary training
and career development
programmes are open to them 
and to secure a good ﬂow of
potential future management 
as the group develops
in our risk assessment and review
programme the issue of quality is a
constant theme quality in design
quality in component supply and
quality in production are all under
continual review the need to
maintain our deserved reputation
for the highest quality standards
and customer facing approach 
to our markets is fundamental to
rotork quality is a core part of 
the rotork culture and quality
management programmes are
embedded within all of our
operating procedures we have an
active quality management
function which includes regular
supplier visits and audits this
process is connected to our
product development programme
for existing and proposed products
ensuring that all areas of
operational experience are fed
back into the design process 
as the manufacture of our
components is outsourced the
relationship and support from
vendors is crucial to our business
design of components is done
recognising the manufacturing
issues involved and our vendor
involvement in the design and
quality processes is an important
part of how the product comes
into production and maintains its
integrity there are a number of
inherent risks in not managing
these processes properly and
signiﬁcant effort is expended in 
the group in ensuring that this is
done well the current dual
sourcing programme for key
components is an example of how
we have responded to these
matters and we have introduced
this seamlessly and with the
support of our suppliers
19
annual report 
 accounts 2007  chief executive’s business review continued
quality and environmental rotork’s active quality
management programme is centred on process control
quality
rotork’ s active quality management
programme is centred on process
control throughout each product’ s
life cycle from initial concept to
volume production every business
and production process is subject
to robust scrutiny the three key
processes are product
development component
procurement and ﬁnal assembly
as customer sites become 
more sophisticated their plant
automation requirements change
rotork’s research  development
teams seek innovative means of
offering customers the
enhancements they demand
representatives from all
departments examine new designs
at every stage and from every
perspective compliance with
customer requirements ease of
assembly and cost optimisation
control of the component
procurement process is crucial
rotork purchases complex
components to exacting quality
standards through global supply
chains the purchasing and
supplier quality assurance ‘sqa’ 
functions are increasingly
international in makeup sourcing
products in the country most
appropriate for each particular
commodity a mutually supportive
worldwide supply network is being
established with local purchasing
and sqa teams representing the
whole group for component
supply sqa teams work closely
with suppliers from product
inception onwards to ensure
suppliers’ processes are properly
controlled resulting in consistent
and compliant parts
the assembly process is the
culmination of all the development
and supplier controls operator
training programmes ‘mistake
proof’ assembly methods clear
instructions and world class
performance monitoring tools
combine to control the build
process these controls are well
established at the main
manufacturing sites and are now
being rolled out to newer divisions
and more recent acquisitions
environmental
the principal manufacturing site in
bath maintains an environment
management system ‘ems’
which is independently veriﬁed as
compliant with the requirements
of iso 14001 2004 the ems 
was developed to identify manage
and reduce the signiﬁcant
environmental aspects and ensure
compliance with environmental
legislation the bath site is now
assisting subsidiaries in raising
awareness of environmental issues
and implementation of essential
controls during 2007 rotork
gears in leeds implemented an
ems in accordance with the
requirements of iso 14001 
due to the nature of the rotork
business one of the most
signiﬁcant aspects is packaging
waste to address the impact and
to minimise waste to landﬁll
rotork made recycling a reportable
kpi in 2006 the last year has
shown continual improvement
group recycling totals increased 
to 57 in 2007 from 46 in
2006 and 38 in 2005 
rotork sites that generate high
levels of waste are being targeted
for improvement in the second
half of 2007 rotork gears
installed recycling systems for
cardboard wood and plastic and
expect to recycle 75 of total
waste generated in 2008 work is
also in progress to reduce the
waste generated at the factory in
rochester ny in conjunction with
initiatives to increase reuse and
recycling these two sites each
generate over 200 tonnes of
packaging waste per annum
rotork remains committed to
meeting the requirements for
continued inclusion in the
ftse4good index rotork is very
conscious of the need for improved
environmental awareness and the
need to minimise the group’ s
environmental impacts in 2006
rotork reported environmental kpi
data for 29 subsidiaries the 2007
environmental report will include
kpi data from 33 subsidiaries 
environmental reports can be
found on the rotork web site
wwwrotorkcom
eh actuator
oil production plant
isolation duty on risers
low power consumption 
required
20
annual report 
 accounts 2007  our products 
are built to work 
in the most hostile
and challenging
environments in 
the world
fortunately our people are too growth opportunities rotork has longterm
relationships with its customer base and this is a key
feature of our business model
rotork is a collection of strong
businesses organised within a
divisional structure to provide the
best line of support to our
customers we have proactive
management teams following
common goals allowing
independent but coordinated
product development programmes
to give the best solutions to our
customers’ problems we help
guide customers through the
technological advancements that
we offer to improve their
processes enhance efﬁciency and
reduce the environmental impact
of their operations our products
have differing technical issues to
overcome in achieving the required
functionality however through 
coordinating our collective
offering to the industries that we
serve we are able to provide an
homogenous integrated set of
solutions that make rotork the
provider of choice for the world
leaders in the oil  gas power and
water  waste water markets
we have begun the process of
reﬁning the divisional structure and
are now refocusing our efforts to
maximise penetration of our
markets and to develop offerings
for newer markets and those
where we are not traditionally
strong this involves reexamining
parts of our product portfolio and
how it integrates where and how
we produce our products and
importantly how we offer ongoing
support to customers after the
initial sale is completed rotork has
longterm relationships with its
customer base and this is a key
feature of our business model 
it is the trust built up within these
relationships that is fundamental
to the successful development of
new and existing products 
we have for some time
strengthened our offering to
customers by enhancing the range
with niche products through
business acquisitions these have
then been brought into
mainstream use through our
product development and
marketing programmes this has
been a successful strategy for
rotork and there are clear beneﬁts
in pursuing this where we are able
to ﬁnd quality businesses that ﬁt
rotork’s product philosophy and
where we can bring added value 
our underlying markets oil  gas
the power industry and water 
 waste water are all looking
positive at the moment and we
have conﬁdence in our prospects
for growth in all of these areas
during the coming year and
beyond investment in
infrastructure development across
the world in pipelines new
reﬁneries liqueﬁed natural gas 
and the constant need for
improvements in energy supply
water availability and the need
generally to move product through
valves will continue to demand
high quality valve actuators 
our drive for improvements in
technology in our approach to
processes and systems makes us
well placed to take advantage of
these developments
peter france
chief operating officer
29 february 2008
22
annual report 
 accounts 2007 
pakscan digital control
240 addresses on 
20 kilometer loop
fault tolerant loop 
required with web access our people and
products stand 
at the forefront 
of actuation
technology  ian 51 joined the board
in february 2005 as a 
nonexecutive director 
he is an executive director
of bae systems plc and its
chief operating ofﬁcer 
uk and rest of world 
ian has previously held
senior ﬁnancial and general
management positions 
at marconi he is a
member of the audit
remuneration and
nomination committees
bob 56 who became 
a member of the rotork
plc board in 2001 
is a graduate engineer
previously with
westinghouse in the usa
he joined rotork controls
inc as engineering
manager subsequently
becoming vice president
engineering and since
1988 president of rotork
controls inc bob has
responsibility for all rotork’s
interests in the americas
roger 62 has been a
nonexecutive director of
rotork since joining the
board in 1988 and became
nonexecutive chairman 
in november 1998 
he is chairman of the
nomination committee
he is chairman of the
colston manufacturing
engineering company ltd
and hydro international plc
and has previously held
ceo roles in automotive
and engineering businesses
bob 56 joined rotork in
1989 as finance director of
the actuation division and
was appointed to the board
of rotork plc as group
finance director in 1998
he has previously held
ﬁnance positions in mining
building controls and the
engineering industry
alex 61 joined the board
as a nonexecutive director
in january 2001 he was
previously chief executive
of yule catto  co plc until
2006 he is also a non
executive director of spirent
communications plc and
wagon plc he is chairman
of the remuneration
committee and a member
of the audit and
nomination committees
board of directors
ian king
nonexecutive
director
bob arnold
president of rotork
controls inc
roger lockwood 
chairman
bob slater
finance director
alex walker
nonexecutive
director
24
annual report 
 accounts 2007  john 51 was appointed
to the board on 
28 february 2008 as a 
nonexecutive director 
he is group finance
director of tate  lyle plc
having previously held 
the same position at kidde
plc he is a member of the
audit remuneration and
nomination committees
and will chair the 
audit committee from 
1 march 2008
graham 51 holds a phd 
and 1st class honours
degree in electronic
engineering from bristol
university and has been
with rotork since 1985
since joining graham has
been closely involved in
product development
including our award
winning iq series he was
appointed to the actuation
division operating board 
in 1997 as research 
development director and
joined the board of rotork
plc in january 2005
bill 59 joined rotork in
1974 and was president of
rotork’s north american
operations from 1979 until
he became managing
director of rotork
actuation in 1988 he has
been a member of the
rotork plc board since
1984 and was appointed
group chief executive 
in 1996 he is a member 
of the nomination
committee bill is a non
executive director of
dialight plc and spirax
sarco engineering plc
peter 39 joined rotork 
in 1989 in 2007 he was
appointed chief operating
ofﬁcer of rotork plc 
prior to that appointment
peter has had roles within
rotork as managing
director of rotork fluid
systems and as director 
of rotork’ s singapore
company with responsibility
for south east asia and 
in international sales
john 63 has been a non
executive director of rotork 
since joining the board in
november 1998 he is
chairman of regus plc 
he has previously held
senior positions in banking
and industrial companies
he is chairman of the
audit committee until 
29 february 2008 and is
the senior independent
nonexecutive director
graham ogden
research 
development
director
bill whiteley
chief executive
peter france
chief operating
officer
john nicholas
nonexecutive
director
john matthews
nonexecutive
director
25
annual report 
 accounts 2007  report of the directors 
the directors submit their report
and the audited accounts for the
year ended 31 december 2007 as
set out on pages 42 to 77
principal activities
rotork plc is a holding company
the principal activities of the
rotork group are the design
manufacture and support of
actuators systems and related
products worldwide
the rotork group provides a range
of products systems and services
for the motorisation and manual
operation of and adaption to
industrial valves and dampers for
isolation duty and process control
applications it does this through its
controls gears and fluid systems
divisions actuated valves are major
control elements in reﬁneries
pipelines power stations water
distribution systems and efﬂuent
treatment plants and in all
industries in which liquids or gases
are transported through pipes 
the business review of the group
is set out on pages 6 to 21 it
provides a balanced and
comprehensive analysis of the
development and performance of
the business during the year under
review and the position at the end
of the year including future
development of the business and
research  development activities
to enable a full understanding of
the analysis of the group’s
business ﬁnancial and other 
key performance indicators are
included in the business review
in january 2008 the group
acquired remote control sweden
ab details of the transaction are
provided in note 27 
the principal risks and
uncertainties facing the group and
the group’s approach to mitigating
those risks are set out on pages 18
to 19 
dividends
the directors recommend a ﬁnal
dividend of £12116000 for the
year payable on 9 may 2008 to
shareholders on the register on 
18 april 2008 this represents
140p per ordinary share
20061165p which with the
interim dividend of 77p 2006
65p paid on 28 september 2007
and the additional interim dividend 
of 93p 2006 116p paid on 
21 june 2007 will produce a total
dividend per ordinary share of
310p 2006 2975p
share capital
details of the ordinary shares issued
during 2007 are given in note 16
details of the company’ s share
capital including rights and
obligations attaching to each class
of share are set out in note 16 of
the ﬁnancial statements 5p
ordinary shares represent over
999 of the company’ s total
share capital £1 preference shares
represent less than 01 of the
company’ s total share capital
employee share schemes
shares in the company’s share
schemes all contain provisions
providing voting rights to the
scheme trustee 
notification of major
interest in shares
since the 2006 directors’ report
the company has been notiﬁed of
major interests and voting rights
held directly andor indirectly by
the following
 of voting rights
axa 87
legal  general 52
prudential 33
research  development
total group expenditure on
research  development in the
year was £3375000 2006
£2759000 further details of
which are contained in the
business review on pages 
16 to 17
charitable donations
during the year the group made
charitable donations of £48000
2006 £44000
there were no political donations
made in the year or the prior year
directors
the names of the directors in
ofﬁce at the year end and their
biographical and other details
including the other signiﬁcant
commitments of the chairman are
as shown on pages 24 to 25 the
interests of the directors in ofﬁce
at the end of the ﬁnancial year in
the shares of the company are as
shown in the remuneration report
on pages 34 to 40
on 28 february 2008 je nicholas
was appointed as a nonexecutive
director
wh whiteley re slater rh arnold
gm ogden and pi france have
service agreements and details 
of these are contained in the
remuneration report on pages 
34 to 40
the company’s procedure with
regard to the appointment and
replacement of directors and those
powers reserved for the board is
described in the corporate
governance report on pages 
28 to 30
at the annual general meeting
‘agm’ in accordance with the
articles of association ig king 
re slater and gm ogden will retire
by rotation and being eligible will
offer themselves for reelection 
je nicholas will also offer himself
for reelection at the agm it
being his ﬁrst opportunity to do 
so since appointment
financial instruments
an explanation of the group
policies on the use of ﬁnancial
instruments and ﬁnancial risk
management objectives are
contained in note 22 of these
ﬁnancial statements
statement of directors’
responsibility for preparing
the financial statements
the following statement which
should be read in conjunction 
with the auditors’ statement of
auditors’ responsibilities included
in the audit report is made with 
a view to distinguishing for
shareholders the respective
responsibilities of the directors and
of the auditors in relation to the
ﬁnancial statements
statement of directors’
responsibilities in respect of
the annual report  accounts
the directors are responsible for
preparing the annual report and
the group and company ﬁnancial
statements in accordance with
applicable law and regulations
26
annual report 
 accounts 2007  company law requires the directors
to prepare group and company
ﬁnancial statements for each
ﬁnancial year under that law they
are required to prepare the group
ﬁnancial statements in accordance
with ifrs as adopted by the eu and
applicable law and have elected to
prepare the company ﬁnancial
statements in accordance with uk
accounting standards and
applicable law uk generally
accepted accounting practice
the group ﬁnancial statements 
are required by law and ifrs as
adopted by the eu to present 
fairly the ﬁnancial position and
performance of the group the
companies act 1985 provides in
relation to such ﬁnancial
statements that references in the
relevant part of that act to
ﬁnancial statements giving a true
and fair view are references to
their achieving a fair presentation
the company ﬁnancial statements
are required by law to give a true
and fair view of the state of affairs
of the company
in preparing each of the group
and company 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
for the group ﬁnancial
statements state whether they
have been prepared in
accordance with ifrs as
adopted by the eu
for the company ﬁnancial
statements state whether
applicable uk accounting
standards have been followed
subject to any material
departures disclosed and
explained in the company
ﬁnancial statements 
prepare the ﬁnancial statements
on the going concern basis
unless it is inappropriate to
presume that the group and
the company will continue in
business 
the directors are responsible for
keeping proper accounting records
that disclose with reasonable
accuracy at any time the ﬁnancial
position of the company and
enable them to ensure that its
ﬁnancial statements comply with
the companies act 1985 they
have general responsibility for
taking such steps as are reasonably
open to them to safeguard the
assets of the group and to prevent
and detect fraud and other
irregularities
under applicable law and
regulations the directors are also
responsible for preparing 
a directors’ report remuneration
report and corporate governance
statement that comply with that
law and those regulations
the directors are responsible 
for the maintenance and integrity
of the corporate and ﬁnancial
information included in the
company’s website legislation in
the uk governing the preparation
and dissemination of ﬁnancial
statements may differ from
legislation in other jurisdictions
creditor payment policy
while there is no formal code or
standard it is company and group
policy to settle terms of payment
with creditors when agreeing the
terms of each transaction and to
abide by creditors’ terms of
payment provided that the supplier
is also complying with all relevant
terms and conditions there are no
creditors subject to special
arrangements outside suppliers’
terms and conditions the
company does not have any trade
suppliers so that a creditor day
payment period is not appropriate
directors’ and officers’
indemnity insurance
subject to the provisions of 
the companies acts the
company’s articles of association
provide for the directors and
ofﬁcers of the company to be
appropriately indemniﬁed the
company purchases and maintains
insurance for the directors and
ofﬁcers of the company in
undertaking their duties in
accordance with section 309a of
the companies act 1985
disclosure of information 
to auditors
the directors who held ofﬁce at the
date of approval of this directors’
report conﬁrm that so far as they
are each aware there is no relevant
audit information of which the
company’ s auditors are unaware
and each director has taken all the
steps that he ought to have taken
as a director to make himself aware
of any relevant audit information
and to establish that the
company’ s auditors are aware of
that information
auditors
resolutions to reappoint kpmg
audit plc as auditors and to
authorise the directors to determine
their remuneration are to be
proposed at the forthcoming agm
annual general meeting
the agm of the company 
will be held at the company’s
ofﬁces at rotork house brassmill
lane bath ba1 3jq on friday 
2 may 2008 at 12 noon 
a separate circular containing the
notice of the meeting is 
sent to shareholders with this
annual report  accounts
on behalf of the board
stephen rhys jones
company secretary
29 february 2008
27
annual report 
 accounts 2007  corporate governance 
set out within this section is a
commentary on how the company
applies the main and supporting
principles of the combined code
on corporate governance 
‘the code’ speciﬁc disclosures
required within the provisions of
the code are also made within 
this section
code compliance statement
all current serving executive
directors now have a one year
notice period or less in their service
contracts by november 2007 
jw matthews a nonexecutive
director had served 9 years on the
board by the end of february
2008 he will resign as a member
of audit remuneration and
nomination committees and as
chairman of audit and
remuneration committees
following the appointment of je
nicholas as a director in february
2008 currently there are three
independent nonexecutives as
accepted by the code on the
board and the board committees
as rotork plc is considered a
large company by the code it is
recognised that for full
compliance code provision a32
currently would require further
independent nonexecutives to be
appointed so that half the board
excluding the chairman comprise
independent nonexecutive
directors the recent appointment
of je nicholas is considered by the
board to be a further signiﬁcant
step towards full compliance in
respect of the relevant code
provisions concerning board
composition in addition to
facilitating full compliance for
committee membership and
composition particularly given that
following the retirement of wh
whiteley in may 2008 there will
then be four executive directors
remaining on the board subject to
the matter of the number of
independent nonexecutives
referred to in this paragraph the
company considers that it
complies with the provisions of 
the code 
internal control
during the year the group has
operated procedures necessary to
comply with the guidance issued in
the ‘turnbull report’ and reported
in accordance with that guidance
the board has ultimate
responsibility for the group’s
system of internal control and is
required to set appropriate policies
and to review its effectiveness the
role of management is to
implement board policies
the system of internal control is
designed to reduce but cannot
eliminate the risks of failure to meet
business objectives internal control
therefore can only provide
reasonable but not absolute
assurance in meeting such business
objectives or against material
misstatement or loss
a continuous process for
identifying evaluating and
managing the signiﬁcant risks
faced by the group continued to
be applied and developed during
the year under review and
operated up to the date of
approval of the annual report 
accounts senior managers with
responsibility across all functions
participate in the risk management
process that identiﬁes and
evaluates the key risks including
consideration of social and
environmental risks facing the
group’s businesses their
deliberations are reported to the
audit committee and board 
this process is based on senior
managers’ detailed knowledge
and understanding of key risks
within and external to the business
based on formal management
information and reports and their
interaction and daily dealings with
those reporting directly to them
their colleagues and external
parties the principal risks and
uncertainties facing the group are
commented on in the business
review section of this annual
report  accounts
internal ﬁnancial audits are
undertaken on a regular basis 
by a selected group of accountants
drawn from head ofﬁce and across
the divisional businesses and
geographic centres all these
accountants have received relevant
and speciﬁc training in internal
audit best practice and control
procedures including health 
safety work will continue to
further embed internal control and
risk management in the operations
of the business and to further
enhance and add to the relevant
processes including consideration
of social and environmental risks
the processes that are used by the
board to review the effectiveness
of this system of internal control
include the following
during the year the audit
committee
monitored and reviewed 
the effectiveness of internal
audit activities
reviewed and monitored
external auditor independence
and objectivity and the
effectiveness of the audit
process
considered reports from
management internal and
external audit on the system of
internal ﬁnancial control and
any material control
weaknesses
received reports on health 
 safety and environmental
issues
discussed with management
the range of actions taken on
problem areas for the business
identiﬁed by board members or
in the internal and external
audit reports
additionally
the board received copies of
the minutes of all audit
committee meetings
the board reviewed the role of
insurances in managing risk
across the group
the board regularly receives
written and oral reports from
management on all aspects 
of production operations
ﬁnancial and risk management
matters
prior to the year end the full board
following discussion at the audit
committee formally reviews the
effectiveness of the group’s system
of internal control
the board
the board currently has ten
members comprising the
chairman the three independent
nonexecutive directors as accepted
by the code jw matthews a non
executive director and ﬁve
executive directors the company’ s
articles of association provide that
one third of the directors shall retire
from ofﬁce by rotation at each
annual general meeting ‘agm’
additionally new directors are
subject to election by shareholders
at the ﬁrst opportunity after their
appointment in line with the code
guidance nonexecutive directors
are normally appointed for an
initial term of three years which is
then reviewed and extended for up
to a further two three year periods
on appointment directors receive 
a suitable and tailored induction
there is a clear division of
responsibility approved by the
board in writing between the
28
annual report 
 accounts 2007  chairman rc lockwood and the
current chief executive wh
whiteley that ensures that there is
a balance of power and authority
between the running of the board
and the executive responsibility for
the running of the company’s
business jw matthews will
continue to act in the role of the
senior independent nonexecutive
director until his retirement from
the board on 2 may 2008 when 
a replacement independent 
nonexecutive director will be
appointed to that position
attendance at board and
committee meetings is shown
above
during the year board meetings
are scheduled at manufacturing
sites other than the company’s
headquarters in bath this allows
in particular nonexecutive
directors to meet management at
these sites and receive
presentations from them during
the year under review the board
visited and held a board meeting
at its manufacturing site in
milwaukee wisconsin usa
the chairman ensures through the
company secretary that the board
agenda and all relevant
information is provided to the
board sufﬁciently in advance of
meetings the chairman and
company secretary discuss the
agenda ahead of every meeting
at meetings the chairman ensures
that all directors are able to make
an effective contribution
throughout meetings and every
director is encouraged to
participate and provide opinions
for each agenda item the
chairman always seeks to achieve
unanimous decisions of the board
following due discussion of
agenda items the schedule of
reserved matters details those
matters speciﬁcally reserved for
board decision the types of
decision which are reserved for
board decision relate to matters
which cannot or the board
considers should not be delegated
to the chief executive and
executive management they
include approval of group
commercial strategy and
succession planning approval of
group annual operating and
capital expenditure budgets and
recommendations for payment of
the ﬁnal proposed dividend and
decisions for interim dividends and
dividend policy approval of the
annual report  accounts and
announcements of ﬁnal and
interim results ensuring sound
internal control and risk
management executive director
remuneration corporate
governance matters including
board and committee
performance appraisals and board
and committee membership 
the directors also have powers to
issue and buy back the company’ s
shares conferred annually by the
shareholders at the agm the
board regularly considers and
discusses future strategy following
submissions by management 
at board meetings and on
occasion separate strategy
meetings the nonexecutive
directors constructively challenge
and help develop proposals on
strategy at those meetings the
decisions which are left to
management are all those related
to the successful operation and
management of the company’ s
business and in implementing the
commercial strategy within the
limits set by the board annually for
overall operational budgets and
capital expenditure
the chairman ensures that
meetings of nonexecutives
without the executives present are
held the company maintains
appropriate directors’ and ofﬁcers’
insurance cover 
performance evaluation
a formal process for performance
evaluation of the board its
committees and individual
directors takes place annually for
2007 the evaluation took the form
of a questionnaire prepared in
conjunction with external
consultants covering 
a wide range of board related
matters jw matthews the senior
independent nonexecutive
director led the performance
evaluation of the chairman
nomination committee
the nomination committee’s ﬁve
members during the year under
review were rc lockwood who
chairs the committee jw
matthews a walker ig king and
wh whiteley 
following the appointment of the
third independent nonexecutive
director je nicholas the
nomination committee now
comprises the three independent
directors the chief executive and
the chairman a majority of the
members of the nomination
committee are therefore
independent nonexecutive
directors as accepted by the code
the terms of reference of the
nomination committee can be
accessed on the company’s
website in the investors’ section
a major part of the work of 
the committee during the year
was to identify and recommend 
to the board a successor to 
wh whiteley as chief executive
this task was duly completed
following a comprehensive
internal selection process
conducted by and on behalf of the
nomination committee and pi
france was duly recommended by
the committee to the board as
the next chief executive
audit committee
the audit committee was during
the year under review comprised
of the three independent non
executive directors jw matthews
chairman a walker and ig king
jw matthews will step down 
as chairman and as a member 
of the committee on 29 february
2008 je nicholas has now joined
the committee as the third
independent nonexecutive
director and will be its’ chairman
from 1 march 2008 the
committee usually meets three
attendance at board and committee meetings
board audit remunerationnomination
meeting committee committee committee
rh arnold 9 – – –
pi france 9 – – –
gm ogden 9 – – –
re slater 9 3

––
wh whiteley 9 3

4

5
ig king 9 3 4 5
rc lockwood 9 3

4

5
jw matthews 9 3 4 5
a walker 9 3 4 5
 by invitation
29
annual report 
 accounts 2007  corporate governance continued
times a year to review published
ﬁnancial information the
effectiveness of both external and
internal audit and internal ﬁnancial
and other controls the finance
director chief executive
chairman and the external
auditors normally attend meetings
and there is a meeting at least
once a year between the
committee and the external
auditors at which management 
is not present 
the matter of auditor
independence is considered by the
committee the auditor does
provide nonaudit services the
audit committee has approved 
a written policy for nonaudit 
work conducted by the auditor
whenever a nonaudit work
instruction excluding tax advice
exceeds £10000 in fee value the
finance director must clear the
instruction in advance with the
audit committee chairman if
nonaudit instructions in aggregate
exceed £40000 in any year then
the excess must be approved on an
item by item basis by the audit
committee chairman for
signiﬁcant general consulting
projects more than one service
delivery provider is normally
considered categories of non
audit work provided by the auditor
are set out in note 8 t ax advice
provided by the auditor
substantially relates to compliance
matters within the audit
committee’ s t erms of reference is
a requirement for the committee
to assess the independence of the
external auditor ensuring key
partners are rotated at appropriate
intervals and to ensure that the
provision of nonaudit services does
not impair the external auditor’ s
independence or objectivity this
assessment was undertaken by the
committee during the year the
t erms of reference of the audit
committee are available to view 
on the company’ s website
wwwrotorkcom in the 
investors’ section
the internal audit function is
undertaken by members of the
group’s ﬁnance departments who
all have other distinct posts the
finance director is also head of
internal audit the work
undertaken by the committee in
discharging its internal control
responsibilities is described under
the internal control section above
during the year the committee
actively reviews the actions and
judgements of management in
relation to the group’s ﬁnancial
statements business review
interim reports and preliminary
announcements before their
submission to the board with the
committee’s recommendations 
for approval or otherwise the
committee considers the
appointment of the auditor 
and recommends the audit fees 
to the board 
the committee discusses with the
external auditor before the audit
commences the nature and scope
of the audit and reviews steps
taken by the auditor to respond to
regulatory requirements
remuneration committee
the work of the remuneration
committee is described in the
remuneration report on pages 34
to 40 the chairman and chief
executive were invited to and did
attend all meetings but the chief
executive was not in attendance
when his own remuneration and
beneﬁts were considered
relations with shareholders
communication with shareholders
is given high priority all members
of the board receive copies of all
analysts’ reports of which the
company is made aware the
board receives nonattributable
analyst comments from analyst
meetings and shareholder
meetings after both interim 
and ﬁnal results the chief
executive reports at each board
meeting upon his meetings with
analysts fund managers and
shareholders the company
secretary has written on behalf of
the board to the company’s major
shareholders offering meetings
with the nonexecutive directors
and requesting shareholders to
conﬁrm they are content with
current board level contact with
the company and communication
to nonexecutives the chairman
attends the preliminary and interim
announcements in london with
the chief executive and finance
director and is available to meet
fund managers and analysts on
those days
individual shareholders have an
opportunity to put questions to
the chairman at the agm and
individual shareholder enquiries are
dealt with throughout the year by
the company secretary’s
department for the agm all proxy
votes are counted and except in
the event of a poll being called at
the agm the balance for and
against the resolution and the
number of abstentions is displayed
for shareholders after it has been
dealt with on a show of hands
prior to the agm the company
secretary reports to the board on
the results of the proxy returns and
on the comments and analysis
undertaken by voting agencies
30
annual report 
 accounts 2007  annual report 
 accounts 2007 31
corporate social responsibility 
the company has considered the
guidelines on social responsibility
published by the association of
british insurers and takes full
account of the signiﬁcance of
environmental and ethical matters
in the conduct of its business and
in its risk assessment processes
rotork remains fully committed to
the principles laid down for its
inclusion in the ftse4good index
and the 10 principles of the un
global compact of which it is 
a signatory
environmental
the group environmental policy
includes commitments to the
prevention of pollution compliance
with all relevant legal and other
regulatory requirements and to the
continuous improvement of
environmental performance the
environmental policy applies to all
manufacturing sites in the group
worldwide the complete policy
can be found at wwwrotorkcom
under ‘environment’
the group’ s 2007 environmental
report ‘the report’ can be
accessed in full at wwwrotorkcom
under ‘environment’ envolve
partnership ‘envolve’ were
engaged to provide an
independent assessment of the
report and this assessment is
included within it environmental
performance data is included
within the report from all rotork’ s
major sales and service facilities
around the world in addition to
manufacturing sites the report
also includes qualitative
information about environmental
improvement programmes
achievements and initiatives 
the group has identiﬁed its key
negative environmental impacts to
include the use of energy water
and packaging and the disposal of
waste the group is continually
developing policies and procedures
on these issues to minimise its
impact on the environment for
example the leeds manufacturing
site recently introduced new waste
recycling systems
rotork considers its positive
environmental impacts include its
contribution to sustainable
development and environmental
improvement through the
products and services it sells 
the group’s products are used
around the world to operate
industrial valves in all
environments including those
which are hazardous and in many
types of industries including water
puriﬁcation sewage food
processing marine irrigation
power generation and oil  gas 
rotork products help reduce
human error and thus potential
environmental disasters whilst
saving energy and resource 
rotork is continuing to develop
and produce energy efﬁcient
products with improved
performance
wherever possible new products
and components are marked with
the appropriate eu recycling
symbols or labels information has
also been included in product
handbooks about the materials the
products contain and any speciﬁc
advice about disposal
environmental management
system
a major milestone was reached 
in the development of the
environment management system
when the main bath site achieved
independent veriﬁcation of
compliance with iso 140012004
independent assessor envolve now
annually audits the system as 
a result of complying with this
standard waste sent to landﬁll
from bath is reduced substantially
this reduction is achieved by
minimising waste generation and
by increased recycling especially of
wood and cardboard the number
of subsidiaries reporting their
environmental data had increased
from 29 to 33 when it was
independently audited by envolve
for sustainability rotork will
through its environmental
management system
allocate formal environmental
responsibilities to ensure
compliance with legislation
support a culture of
consultation with employees
key stakeholders and other
interested parties
provide environmental
information guidance and
where necessary provide
training that meets best
practice
monitor measure audit and
seek continuous improvement
in its environmental
performance
work with external agencies
and bodies to ensure continued
adoption of best practice
solutions in environmental
management
communicate best practice and
publish internal and external
information detailing its aims
and achievements
foster open communication
with employees customers
suppliers and other
stakeholders via both electronic
publishing and facetoface
discussion
within the 2007 environmental
report at wwwrotorkcom
information and data can be
accessed about how rotork
managed its key environmental
impacts the data includes
information on gas and electricity
consumption co2 emissions
water consumption and waste
including recycling of waste
ethics and values
rotork is a signatory to the united
nations global compact and its 10
universal principles around human
rights labour environment bribery
and corruption these principles
are derived from the universal
declaration of human rights
which the group supports and the
international labour organisation’s
declaration of fundamental
principles and rights at work
rotork supports all united nations’
efforts to ensure the effective
abolition of child forced
compulsory labour and will never
use any such labour in any of its
operations worldwide at rotork
the rights of every employee are
respected the company acts in
ways that ensure all employees are
treated with openness mutual
trust dignity and respect everyone
working at rotork will be treated
fairly and without discrimination
on the basis of race gender
language or religion corporate social responsibility continued
rotork’s ethics and values
statement can be accessed at
rotork’s website wwwrotorkcom
under the investors’ section 
subsection ‘responsibilities and
ethics’ additionally at that part 
of the website the rotork ‘doing
the right thing’ document which
describes some of the beneﬁts
rotork provides for employees 
and the wider community can 
be accessed
suppliers
business integrity and fair dealing
is key to the group’s relationships
with suppliers and contractors
many of the group’s suppliers
have longterm relationships with
the group most key suppliers are
registered to iso 9000 supplier
development is ongoing and
involves elements developed in
the motor industry of the 
qs 9000 system
employees
employees in the uk and many
overseas subsidiary companies
enjoy participation in long
standing rotork proﬁt sharing and
share schemes
at the bath plant an employee
committee sits regularly to 
discuss staff issues and suggests
improvements in working
conditions and practices all issues
are reviewed by directors and
acted on as appropriate 
an equal opportunities policy is
applied throughout the group and
in almost all cases it is nationals
from those countries in which the
company operates who manage
those companies locally
financial support for training and
learning programmes directly
related to employees working roles
are provided there are two full
time training ofﬁcers at the bath
site who coordinate product
training initiatives for employees
and customers four year
apprenticeship programmes
underline the commitment to staff
development for the longterm
health  safety
the group actively promotes the
health safety and welfare of
employees site visitors and related
parties and utilises a number of
policies and procedures to ensure
best practice
during 2007 we continued to roll
out our health  safety audit
programme throughout the 
group and completed a total of
forty audits equating to 83 of
our key sites our increased focus
has enabled more sites to be
audited and audited to a more
detailed level we have seen some
signiﬁcant improvements being
achieved particularly within the
manufacturing facilities our 
focus on health  safety will
continue and we expect further
improvements across all facilities
during 2008
community involvement
rotork considers it important to
contribute and engage positively in
the communities in which it
operates and particularly where it
has substantial sites with relatively
large numbers of employees for
example its bath site rotork’s
objectives include being a good
community neighbour as well as 
a responsible corporate entity
for many years rotork has pursued
a policy of community involvement
through ﬁnancial support and
fostering partnership with local
charitable and voluntary
organisations trusts and local
support groups a charity
committee made up of employees
at all levels considers local
community charitable and similar
requests at the bath site projects
are then followed through with
visits and reports by employees
and feedback to the charity
committee sponsorship is also
given to local youth and sporting
clubs and to cultural and social
events there is also direct
engagement in community issues
for example providing transport
for charitable events in the area in
bath a representative of the
company sits on a local group
supporting local initiatives for
cultural social and economic
development during the year the
company became a participating
member of an initiative of the
engineering development trust
and will be sponsoring a relevant
project being undertaken by pupils
in the sixth form of a local bath
school studying science subjects
individual employees or groups of
employees also engage in
community activities and the
charity committee normally
matches monies raised by
employees who undertake
appropriate charitable events
personally during the year the
charity committee paid the entry
fee for employees participating 
in the bath half marathon and
matched sponsorship sums raised
by employees for their selected
charities
the charity committee has agreed
to a grant of £35000 to the
research institute for the care of
the elderly to provide a rotork
room in a new research facility
now built at the royal united
hospital in bath half of the award
was paid in 2006 as the project
progressed and the balance in
2007 the rotork room will be 
one of four examination rooms
that will be used on a daily basis
for the institute’s research projects
and memory clinics the memory
clinics provide a much valued
service to people in the bath area
like rotork the institute is
committed to research as a means
of progress in ﬁnding solutions to
practical problems with the aging
of the population research to
improve the care of older people 
is of growing importance and
rotork is pleased to be involved
with this initiative 
32
annual report 
 accounts 2007  other charitable organisations to benefit from rotork’s charity committee during the year included
dorothy house st john ambulance
chernobyl children’s lifeline me research
three ways school diabetes uk
the eve appeal meningitis uk
the harbour independent living centre
royal united hospital bath ct scanner campaign children’s hospice south west
stepping stones the grand appeal
cancer research uk royal united hospital charitable fund
ms society st peter’s hospice
makeawish foundation bliss
noah’s ark preschool wateraid 6 peaks challenge
special care baby unit bristol maternity hospital hop skip  jump
friends of peasedown st john primary school little sisters of the poor
bath junior gateway club macmillan cancer support
home farm trust trinity church of england primary ptfa
weston hospice the mayor’ s christmas party for children with special needs in bath
smile 4rich appeal royal united hospital annual patients’ handbook
genesis trust dolphin society
weston day club for the elderly the space trust
teenage cancer trust christian lewis trust
heartline bath cats  dogs home
percy community centre bath area play project
bath institute of mechanical engineering kampala school for the physically handicapped 
33
annual report 
 accounts 2007  remuneration report 
this report is presented to
shareholders by the board and sets
out the board’s remuneration
policy and details of the
remuneration of each director
the remuneration committee
‘the committee’ of the board is
currently comprised of three
independent nonexecutive
directors a walker ig king and 
je nicholas during the year under
review jw matthews chaired the
committee until december 2007
when a walker became chairman
the chairman and chief executive
are invited to attend the meetings
of the committee the company
secretary participates in the
committee discussions and advises
the committee the committee
makes recommendations as
required to the board on the
company’s framework of
executive remuneration and its
costs and determines on the
board’s behalf the individual
salaries and other terms and
conditions of employment for 
the executive directors and the
chairman the committee
determines the terms of any
discretionary share schemes 
in which executive directors 
may be invited to participate 
the committee’s terms of
reference are available on the
company’s website
during the year the committee
received salary and remuneration
advice from their appointed adviser
t owers perrin for executive
directors and senior management
the chief executive also provides
comment and recommendations
on the remuneration of the 
other executive directors and 
senior managers 
for the year under review the
board continued to consider that it
was critical that the company had
remuneration policies that enabled
it to retain motivate and when
required recruit high quality
management in recommending
the level of remuneration for
executive directors the committee
took account of the size and
nature of the company including
in particular its market
capitalisation as well as its
international scope and revenue
using data from a number of
sources including towers perrin’s
own survey and proprietary data
the committee considers it
important that a signiﬁcant
proportion of executive directors’
potential total remuneration is
performance related this is
demonstrated by the maximum
percentage of basic salary
potentially payable as cash or share
awards under the annual cash
bonus scheme and longterm
incentive plan the committee
conﬁrms that towers perrin do not
have any other connection with
the company for 2008 and
subsequent years the directors’
current intention is to continue
with the remuneration policy
referred to above 
the company accepted wh
whiteley’s request to retire on 
2 may 2008 being some 6 months
ahead of his contractual retirement
age of 60 years no special
compensation payment becomes
payable on this retirement 
re slater rh arnold gm ogden
and pi france’s service contracts
are all rolling service contracts with
a one year notice period for
future executive director
appointments the board’s
intention will be to continue to
limit service contracts to one year
on a rolling basis 
the fees of the nonexecutive
directors other than the
chairman are determined by a
board committee which includes
the chief executive and chairman
nonexecutive directors are offered
engagement agreements of three
years duration subject to earlier
termination by either party on
three months notice with no
provision for any compensation
payment on termination 
date of notice period notice period contractual
name of executive director service contract from company from director retirement date 
rh arnold 2852002 1 year 1 year 1882016
pi france 2662006 1 year 1 year 642028
gm ogden 112005 1 year 1 year 912017
re slater 161998 1 year 1 year 1042011
wh whiteley 121996 1 year 6 months 25102008
notice period
date of from
letter of notice period nonexecutive 
name of nonexecutive director appointment from company director
ig king 1422005 3 months 3 months
rc lockwood 112006 3 months 3 months
jw matthews 14102004 3 months 3 months
je nicholas 2822008 3 months 3 months
a walker 612006 3 months 3 months
34
annual report 
 accounts 2007  none of the executive directors has
any external directorships with the
exception of wh whiteley who is
a nonexecutive director of dialight
plc fees for this directorship
which are £25000 per annum are
payable to rotork plc spirax
sarco engineering plc fees for this
directorship which are £46000
per annum are payable to mr
whiteley and is also a director of
the british valve and actuator
manufacturers association limited
for which no fee is paid
the remuneration packages of
each individual director currently
include basic salary an annual
bonus beneﬁts in kind car and
fuel or car and fuel allowance
and private medical insurance for
employee only membership of
the all employee rotork share
incentive plan ‘sip’ or overseas
proﬁtlinked share scheme
‘oplss’ discretionary rotork
longterm incentive plan ‘ltip’
and participation in a rotork
group pension scheme further
details of all elements of each
individual director’s remuneration
package are set out elsewhere in
this report salary and beneﬁts
including pension and car and fuel
or car and fuel allowance
constitute ﬁxed pay
from 2004 ltip awards to
executive directors have been
100 of basic salary being the
maximum level of award under the
plan rules as approved by
shareholders in may 2000
following a review by the
committee for ltip awards from
2006 onwards shareholders
agreed a reduction in the median
vesting percentage of the ltip to
30 of the award value for
previous awards the scheme pays
40 at median performance 
a 100 vesting of the award
remains for performance at or
above the 75th percentile with a
prorata vesting scale down to the
median additionally and to bring
the ltip incentive performance
period in line with market norms
shareholder approval was obtained
to introduce a three year
performance period for awards
granted from 2006
the committee has recommended
and the board approved an
executive share retention policy
the policy supports the
accumulation of signiﬁcant
shareholdings in the company 
by executive directors and other
senior executives the policy
requires executive directors to
achieve a minimum holding of
ordinary shares in the company
equivalent to 50 of their basic
salary executives are required to
make use of vesting ltip shares to
meet this minimum target
the committee considered that the
comparator group of companies
continued to be the appropriate
primary measurement of
performance as supported by the
association of british insurers in its
latest ‘principles and guidelines on
remuneration’ document
in 2007 the committee reviewed
the constituents of the comparator
group and brought in additional
companies to bring the number
back up to twenty for future grants
as the number had reduced to
seventeen certain companies were
also replaced with more suitable
companies where the nature of
those companies’ businesses had
changed over time so as to no
longer make them suitable
comparators the comparator
groups used up to the 2006 grant
and following the review described
above for the 2007 grant and
onwards are set out on page 38
the committee has given
consideration to the implications
of the legislative changes to
pensions in the uk which came
fully into effect from april 2006
the committee has agreed to pay
reasonable professional fees for
the uk executive directors who will
be affected by these changes to
obtain individual advice the
committee has decided that
potential alternative offers to
current pension provision for
executive directors affected by the
legislative changes referred to
above and who may request such
alternative provision would only
be considered on the basis that
they do not increase the beneﬁt
cost to the employer
the committee approved a revised
annual cash bonus plan from 2005
which rewards increases in proﬁt
when compared with the average
proﬁt over the three immediately
preceding years the plan
additionally rewards high levels 
of free cash generation and
growth in earnings per share
together with the achievement 
of budgeted targets for 2007 the
total annual bonus payment was
capped at 60 of basic salary for
executive directors
35
annual report 
 accounts 2007  remuneration report continued
for 2007 for the proﬁt element of
bonus a sum equal to 1 of basic
salary will be paid as bonus for
each 1 by which adjusted proﬁt
exceeds the average adjusted proﬁt
of the three prior years save that in
any year where growth in proﬁt
equals or exceeds 30 of that
average proﬁt the proﬁt ﬁgure to
be used in respect of that year as
part of any future year’ s average
proﬁt calculation shall be 130 of
the average proﬁt used to
determine that year’ s bonus ie
the ﬁgure equivalent 
to achieving the proﬁt element
bonus maximum for that year
adjustments to proﬁt comprise
exceptional items nonrecurring
proﬁtslosses and excluding interest
receivablepayable this element 
of bonus pays up to a maximum of
30 of salary 
the earnings per share ‘eps’
element of bonus pays 1 of
basic salary for each 1 growth in
basic eps to a maximum payment
of 20 of basic salary where eps
growth equals or exceeds 20 in
a year the eps ﬁgure equal to
20 growth shall be termed ‘the
eps maximum’ and the base point
for comparison of the next year’s
eps bonus shall be the prior year’s
eps maximum 
a further maximum 10 of basic
salary is payable as bonus based on
free cash generation as a
percentage of earnings before
interest and tax ‘ebit’ free cash
generation being net increase in
cash and cash equivalents
excluding adjustments for interest
or tax receipts or payments
acquisitions or disposals of
businesses cash ﬂows from
ﬁnancing activities or exceptional
cash payments these cash
adjustments where relevant are
disclosed in the consolidated
statement of cash flows at page
44 the maximum 10 bonus is
achieved where free cash
generation equals 110 of ebit 
up to a maximum 10 of 
basic salary will be payable on
achievement of group budget
ebit this reduces by 1 for each
1 less than budget ebit is
achieved down to 90 of budget
ebit from when there is a nil
payment 
the graph measures the
company’ s performance against
other companies in the ftse
industrial engineering sector by
showing the total shareholder
return ‘tsr’ on a holding of
ordinary shares in the company
compared with the average total
shareholder return of other
companies in its sector being the
sector within which the company
is quoted on the london stock
exchange and which is therefore
considered the most appropriate
index over the ﬁve year period to 
31 december 2007
interests in shares 
the interests of the directors in the
ordinary share capital of the
company according to the register
required to be kept by section 325
of the companies act 1985 at 
31 december were as follows see
table below
all interests were beneﬁcial and
include directors’ directly held and
family share interests and in total
represent less than 1 2006 less
than 1 of voting shares of the
company
jan 03 dec 03 dec 04 dec 05 dec 06 dec 07
100
150
200
250
300
350
400
value £
rotork plc
ftse industrial 
engineering sector
total shareholder return
this graph shows the value by 
31 december 2007 of £100
invested in rotork plc on 
1 january 2003 compared with 
the value of £100 invested in the
ftse industrial engineering sector
index the other points plotted are
the values at intervening ﬁnancial
yearends
interests in shares
2007 2006
number number
rh arnold 17460 16361
pi france 13134 6736
gm ogden 16613 16261
re slater 42575 36720
wh whiteley 119356 119004
ig king – –
rc lockwood – –
jw matthews 10600 10600
a walker 5000 5000
36
annual report 
 accounts 2007  the auditor is required to report on the information contained in the following sections of this report
rotork longterm incentive
plans ‘ltip’
following shareholder approval 
of the ltip at the company’s agm
on 18 may 2000 awards over
shares were made to executive
directors and senior managers
every year from 2000 those ltip
awards still outstanding at the
time of publication of this report
made to executive directors are set
out on the left
the ltip is a performance 
share or cash unit plan under
which shares or cash units are
conditionally allocated to selected
members of senior management
at the discretion of the committee
on an annual basis no shares or
cash units will normally be released
to participants unless they are still
in the group’s service following
completion of the relevant full
performance period and the
company’s relative tsr against 
a comparator group of companies
places it in at least the 50th
percentile position in the
comparator group at the end of
the relevant performance period
tsr measures the change in value
of a share and reinvested dividends
over the period of measurement
the actual number of shares or
cash units transferred will be
determined by the number of
shares or cash units initially
allocated multiplied by a vesting
percentage which for awards
granted up to and including the
year 2005 will be 40 at the 
50th percentile rising to 100 at
the 75th percentile with each
percentile position above the 
50th adding 24 to the vesting
directors’ emoluments £ooo
salary 2007 2006
and fees bonus benefits total total
executive directors
rh arnold
1
149 89 16 254 245
pi france
2
150 90 16 256 96
gm ogden 150 90 16 256 229
re slater 190 114 16 320 288
wh whiteley 310 186 16 512 453
nonexecutive directors
ig king 27 – – 27 27
rc lockwood 75 – – 75 60
jw matthews 33 – – 33 33
a walker 27 – – 27 27
1111 569 80 1760 1458
1
rh arnold is paid in us dollars
2
pi france was promoted to chief operating officer rotork plc during the year and part of his salary relates to this position and the remainder to his
previous position as managing director of rotork fluid systems division
 these columns include the cash value on allocation of sip and oplss share awards as appropriate for further details see pages 38 and 39
rotork longterm incentive plans ‘ltip’
outstanding
share or cash outstanding
unit awards share or  cash share or cash share or cash 
made to unit awards unit awards unit awards at
1 january made during vesting in lapsed in 31 december
2007 2007
1
2007
2
2007 2007
rh arnold
3
109189 19756 26477 – 102468
pi france 49019 17925 10263 – 56681
gm ogden 72338 19206 10657 – 80887
re slater 124240 24327 26315 – 122252
wh whiteley 195739 39692 40601 – 194830
1
the market price of shares in the company at the date of award was £805
2
the 2003 ltip award vested 100 the market price at the vesting date was £805
3
rh arnold a united states citizen and resident is awarded cash units of a monetary value equivalent to share awards under the ltip  
37
annual report 
 accounts 2007  remuneration report continued
percentage from 2006 grants the
relevant vesting percentages are
30 at the 50th percentile rising
to 100 at the 75th percentile
with each percentile position
above the 50th adding 28 to
the vesting percentage
the company’ s eps is also
monitored during the relevant
performance period to ensure it
meets a minimum average annual
growth equal to the rise in the
retail price index ‘rpi’ plus 2
per annum failure to meet this rpi
plus 2 per annum requirement
will result in nil vesting the relative
tsr against a comparator group
performance measure was chosen
as it enabled the committee to
select a comparator group
considered to be sufﬁciently
challenging given the historic
performance of the company
the comparator companies used
for the ltip up to and including
grants in 2006 were
aga food service group plc
babcock international plc
brammer plc
bss plc
delta plc
fki plc
imi plc
invensys plc
meggitt plc
renishaw plc
senior plc
smith group plc
spectris plc
spiraxsarco engineering plc
tt electronics plc
volex plc
weir group plc
for the 2007 ltip grant the
comparator companies used were
bodycote plc
brammer plc
bss plc
charter plc
cookson plc
fki plc
halma plc
imi plc
invensys plc
laird plc
meggitt plc
morgan crucible plc
renishaw plc
senior plc
smith group plc
spectris plc
spiraxsarco engineering plc
tt electronics plc
volex plc
weir group plc
share awards to executive
directors
in common with all eligible
employees uk based executive
directors receive an entitlement to
ordinary shares under the rotork
share incentive plan ‘sip’ which is
approved by her majesty’s
revenue and customs ‘hmrc’
under the sip and rotork overseas
proﬁtlinked share scheme
‘oplss’ an aggregate total of up
to 5 of proﬁts are distributed to
employees each year in the form
of ordinary shares the distribution
is calculated by reference to years
of service and salary subject for
the sip  to hmrc limits
the beneﬁcial interests at 
31 december included ordinary
shares held under the sip and 
the oplss in trust as shown in 
the table above
details of total free share awards
under the sip and oplss and
awards made to executive
directors in 2007 and the prior
year are set out above
free shares awarded to all four uk
executive directors under the sip
are subject to the hmrc upper
limit of £3000 by value
additionally mr slater and 
mr whiteley have purchased
‘partnership’ shares under the sip 
their current sip partnership 
total holdings are 1424 ordinary
shares and 784 ordinary shares
respectively
mr arnold in common with other
eligible overseas employees
participates in the oplss the
scheme trustee is based in
guernsey channel islands 
the ﬁgure shown for mr arnold
relate solely to oplss
uk based executive directors in
common with other eligible uk
employees have the opportunity 
to invest in the rotork sharesave
scheme re slater gm ogden and
pi france participate in the scheme
mr slater was granted 5170 share
options on 8 october 2004 at an
option price of £3196 under the
scheme mr ogden was granted
2964 share options on that date at
the same option price mr france
was granted 3484 share options on
5 october 2005 at an option price
of £462 these options are
exercisable ﬁve years from grant for
mr slater and mr france and three
share awards to executive directors
awards in total awards held
2007 2006 2007 2006
rh arnold 939 894 1924 1909
pi france 352 426 2955 2603
gm ogden 352 426 3135 2783
re slater 352 426 3297 4207
wh whiteley 352 426 3297 3729
38
annual report 
 accounts 2007  years from grant for mr ogden the
exercise period is 6 months duration
after which the options lapse post
year end gm ogden exercised his
rights to the above mentioned share
options on 1 december 2007 
gm ogden was granted 2071
share options under the rotork
sharesave scheme at an option
price of £811 these options are
exercisable 5 years from grant
mr whiteley sold 41360 5p
ordinary shares of rotork plc
which were removed from the
register on 2 january 2008 the
only other changes in the directors
interests post year end relate to
shares purchased by the uk based
directors monthly under the rotork
sip partnership plan to a maximum
£125 per month
save as disclosed no director or 
his family had any interest in the
shares of the company at 
31 december 2007
pension disclosures
required under the listing
rules of the uk listing
authority
the following table shows the
executive directors’ entitlements
earned during the year net of
inﬂation and the accumulated
entitlement at the year end
accumulated
increase in accrued 
accrued pension at
pension over 31 december
age at the year 2007
31 december note 1 note 2
2007 £ £
rh arnold 56 3789 63298
pi france 39 542 31848
gm ogden 50 9551 55887
re slater 56 8564 101719
wh whiteley 59 3912 193973
notes 
1 the figures shown for the increase in accrued pension over the year
exclude any increase for inflation
2 the accumulated accrued pension is that which would be paid annually
on retirement from normal pension age based on service to 
31 december 2007
3 a lump sum death benefit of 4 times basic annual salary is payable on
death in service
4 a dependant’s pension of 50 of prospective pension is payable on
death in service and of 50 of precommutation pension on death in
retirement
5 postretirement increases are applied at the rate of increase of the index
of retail prices up to a maximum of 5 per annum except that for
pension benefits in respect of pensionable service up to 15 may 2000 the
minimum inflationary increase is 45 per annum
6 wh whiteley was entitled to an immediate pension from age 55 of two
thirds of his final pensionable salary he has now passed age 55 and on
his eventual retirement his pension will be uplifted to reflect its later
commencement date
7 pi france became a category 3 member in the scheme on 23 february
2007 as a result his normal retirement age for all benefits was changed
from 65 to 60 pi france’ s benefits include a fixed pension in respect of a
transfer in this pension has been reduced from £8539 to £5123 to
reflect earlier payment from age 60
8 pi france’s pensionable salary used to calculated benefits in the defined
benefit scheme is restricted to a scheme specific earnings cap which is
currently £112800 in addition pi france will receive a cash payment of
225 of salary above the earnings cap
9 the figures shown for rh arnold are in respect of his membership of the
rotork controls inc pension scheme and a supplemental executive
retirement plan so that in aggregate the pension arrangements for 
rh arnold will provide a pension of at least 60 of uncapped basic 
salary at age 65
39
annual report 
 accounts 2007  remuneration report continued
pension disclosures
required under the
directors’ remuneration
report regulations 2002
the following table shows the
executive directors’ entitlements
earned during the year and their
value at the start and end of 
the year
increase
in accrued transfer value
pension of accrued accrued increase
during pension at pension at in transfer
the year 31 december 31 december value over
note 1 2006 2007 the year
£ £000 £000 £000
rh arnold 6242 754 825 71
pi france 792 444 630 186
gm ogden 11461 1049 1366 317
re slater 12404 2243 2617 374
wh whiteley 11747 5206 5381 175
notes
1 the figures shown for the increase in accrued pension over the year
incorporate the increase for inflation
2 the transfer values have been calculated in accordance with the actuarial
guidance note gn 11 published by the institute of actuaries and the
faculty of actuaries the increases in transfer values over the year are net
of directors’ contributions if any
3 the transfer value of accrued pension for rh arnold reflects the benefits
provided by the us schemes together with a us valuation of these
benefits and is therefore not directly comparable with the transfer values
for directors in the uk scheme
alex walker
chairman
remuneration committee
29 february 2008
40
annual report 
 accounts 2007  independent auditors’ report to the members of
rotork plc
we have audited the group 
and parent company ﬁnancial
statements the ‘ﬁnancial
statements’ of rotork plc for the
year ended 31 december 2007
which comprise the consolidated
income statement the
consolidated and parent company
balance sheets the consolidated
statement of cash flows the
consolidated statement of
recognised income and expense
and the related notes these
ﬁnancial statements have been
prepared under 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 auditor’s report and for
no other purpose to the fullest
extent permitted by law we do
not accept or assume responsibility
to anyone other than the
company and the company’s
members as a body for our audit
work for this report or for the
opinions we have formed
respective responsibilities
of directors and auditors
the directors’ responsibilities for
preparing the annual report and
the group ﬁnancial statements in
accordance with applicable law
and international financial
reporting standards ‘ifrss’ as
adopted by the european union
and for preparing the parent
company ﬁnancial statements and
the remuneration report in
accordance with applicable law
and uk accounting standards
united kingdom generally
accepted accounting practice are
set out in the statement of
directors’ responsibilities
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
and international standards on
auditing uk and ireland
we report to you our opinion as to
whether the ﬁnancial statements
give a true and fair view and
whether the ﬁnancial statements
and the part of the remuneration
report to be audited have been
properly prepared in accordance
with the companies act 1985
and as regards the group ﬁnancial
statements article 4 of the ias
regulation we also report to you
whether in our opinion the
information given in the directors’
report is consistent with the
ﬁnancial statements the
information given in the directors’
report includes that speciﬁc
information presented in the
business review that is cross
referred from the principal activities
section of the directors’ report
in addition we report to you if 
in our opinion the company 
has not kept proper accounting
records if we have not received all
the information and explanations
we require for our audit or if
information speciﬁed by law
regarding directors’ remuneration
and other transactions is not
disclosed
we review whether the corporate
governance statement reﬂects the
company’s compliance with the
nine provisions of the 2006
combined code speciﬁed for our
review by the listing rules of the
financial services authority and
we report if it does not we are
not required to consider whether
the board’s statements on internal
control cover all risks and controls
or form an opinion on the
effectiveness of the group’s
corporate governance procedures
or its risk and control procedures
we read the other information
contained in the annual report
and consider whether it is
consistent with the audited
ﬁnancial statements we consider
the implications for our report 
if we become aware of any
apparent misstatements or
material inconsistencies with 
the ﬁnancial statements our
responsibilities do not extend to
any other information
basis of audit opinion
we conducted our audit in
accordance with international
standards on auditing uk and
ireland issued by the auditing
practices board an audit includes
examination on a test basis of
evidence relevant to the amounts
and disclosures in the ﬁnancial
statements and the part of the
remuneration report to be
audited it also includes an
assessment of the signiﬁcant
estimates and judgments made 
by the directors in the preparation
of the ﬁnancial statements and 
of whether the accounting policies
are appropriate to the group’s 
and company’s circumstances
consistently applied and
adequately disclosed
we planned and performed our
audit so as to obtain all the
information and explanations
which we considered necessary in
order to provide us with sufﬁcient
evidence to give reasonable
assurance that the ﬁnancial
statements and the part of the
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 group ﬁnancial statements
give a true and fair view in
accordance with ifrss as
adopted by the european
union of the state of the
group’s affairs as at 
31 december 2007 and of its
proﬁt for the year then ended
the group ﬁnancial statements
have been properly prepared in
accordance with the
companies act 1985 and
article 4 of the ias regulation
the parent company ﬁnancial
statements give a true and fair
view in accordance with united
kingdom generally accepted
accounting practice of the
state of the parent company’ s
affairs as at 31 december 2007
the parent company ﬁnancial
statements and the part of the
remuneration report to be
audited have been properly
prepared in accordance with
the companies act 1985 and
the information given in the
directors’ report is consistent
with the ﬁnancial statements
kpmg audit plc
chartered accountants
registered auditor
bristol
29 february 2008
41
annual report 
 accounts 2007  consolidated income statement
for the year ended 31 december 2007
2007 2006
notes £000 £000
revenue 2 235688 206709
cost of sales 127748 115603
gross profit 107940 91106
other income 4 227 98
distribution costs 2954 2287
administrative expenses 49811 43735
other expenses 5 15 93
operating profit 2 55387 45089
financial income 7 6607 5568
financial expenses 7 4741 4596
profit before tax 8 57253 46061
income tax expense 9 17957 14728
profit for the year 39296 31333
pence pence
basic earnings per share 17 456 364
diluted earnings per share 17 452 361
42
annual report 
 accounts 2007 
consolidated statement of recognised 
income and expense for the year ended 31 december 2007
2007 2006
£000 £000
foreign exchange translation differences 3855 3748
actuarial loss  gain in pension scheme 4883 6743
movement on deferred tax relating to actuarial loss  gain 1241 2023
effective portion of changes in fair value of cash flow hedges 254 80
income and expenses recognised directly in equity 41 892
profit for the year 39296 31333
total recognised income for the year 39255 32225 consolidated balance sheet
at 31 december 2007
2007 2006
notes £000 £000
assets
property plant and equipment 10 17549 16616
intangible assets 11 23141 22225
deferred tax assets 12 6614 5739
other receivables 14 850 735
total noncurrent assets 48154 45315
inventories 13 35993 29027
trade receivables 14 44262 37385
current tax 14 1330 1219
other receivables 14 4745 4104
cash and cash equivalents 15 38253 28460
total current assets 124583 100195
total assets 172737 145510
equity
issued equity capital 4323 4314
share premium 6519 5857
reserves 2180 1421
retained earnings 89430 80386
total equity 16 102452 89136
liabilities
interest bearing loans and borrowings 18 209 180
employee benefits 19 11047 8186
deferred tax liabilities 12 906 1225
provisions 20 1157 941
total noncurrent liabilities 13319 10532
bank overdraft 15 – 62
interest bearing loans and borrowings 18 118 526
trade payables 21 21567 16835
employee benefits 19 4890 3941
current tax 21 8791 6236
other payables 21 19138 15923
provisions 20 2462 2319
total current liabilities 56966 45842
total liabilities 70285 56374
total equity and liabilities 172737 145510
these financial statements were approved by the board of directors on 29 february 2008 and were signed on its behalf by
wh whiteley
director
re slater
director
43
annual report 
 accounts 2007  consolidated statement of cash flows
for the year ended 31 december 2007
2007 2007 2006 2006
notes £000 £000 £000 £000
cash flows from operating activities
profit for the year 39296 31333
adjustments for
amortisation of intangibles 74 98
amortisation of development costs 309 259
depreciation 2630 2554
equity settled share based payment expense 680 496
profit on sale of property plant and equipment 159 33
financial income 6607 5568
financial expenses 4741 4596
income tax expense 17957 14728
58921 48463
increase in inventories 5580 3610
increase in trade and other receivables 4873 3786
increase in trade and other payables 7001 6691
difference between pension charge and cash contribution 2938 6801
increase in provisions 713 731
increase in other employee benefits 2875 776
56119 42464
income taxes paid 15071 11247
cash flows from operating activities 41048 31217
investing activities
purchase of property plant and equipment 2762 2425
development costs capitalised 687 372
sale of property plant and equipment 228 116
acquisition of subsidiary net of cash acquired 8 1589
interest received 932 876
cash flows from investing activities 2297 3394
financing activities
issue of ordinary share capital 671 252
purchase of ordinary share capital 4249 2047
purchase of preference shares treated as debt – 4
interest paid 112 147
repayment of amounts borrowed 456 467
repayment of finance lease liabilities 95 212
dividends paid on ordinary shares 24732 24140
cash flows from financing activities 28973 26765
net increase in cash and cash equivalents 9778 1058
cash and cash equivalents at 1 january 28398 27180
effect of exchange rate fluctuations on cash held 77 160
cash and cash equivalents at 31 december 15 38253 28398
44
annual report 
 accounts 2007  annual report 
 accounts 2007 45
notes to the group financial statements
for the year ended 31 december 2007
except where indicated values in these notes are in £000
rotork plc is a company domiciled in england the consolidated financial statements of the company for the year ended 31 december 2007 comprise the
company and its subsidiaries together referred to as the ‘group’ the accounting policies contained below in note 1 and the disclosure in notes 2 to 27 all
relate to the group statements the company balance sheet can be found following note 27 as the company has elected to continue reporting under uk
gaap  the applicable accounting policies are contained in note a and notes b to k relate to the company’s financial statements
1 accounting policies
basis of preparation
the consolidated financial statements have been prepared and approved by the directors in accordance with international financial reporting standards as
adopted by the eu ‘adopted ifrss’ 
ifrs 8 – operating segments ifric 9 – reassessment of embedded derivatives ifric 10 – interim reporting and impairment ifric 11 – ifrs 2 group and
treasury share transactions ifric 12 – service concession arrangements ifric 13 – customer loyalty programmes and ifric 14 – recognition of a defined
benefit pension scheme surplus together with the amendments to ias 23 ias 27 ifrs 2 and ifrs 3 which are adopted by the european union but not
effective as at 31 december 2007 will be applied in 2008 2009 or 2010 as applicable they are not expected to have a material effect on the reported results
or financial position of the group 
basis of accounting
the consolidated financial statements have been prepared under the historical cost convention subject to the items referred to in the derivative financial
instruments accounting policy below the accounting policies set out below have been consistently applied by the group in preparing the 2006 and 2007
financial information within its consolidated financial statements except for the first time application of ifrs 7 – financial instruments disclosures the
complementary amendment to ias 1 – presentation and financial statements and ifric 8 – scope of ifrs 2 they have not had a material effect on the
reported results or financial position of the group for 2007 or 2006 the accounting policies have been applied consistently in respect of group entities
consolidation
the consolidated financial statements incorporate the financial statements of the company and its subsidiaries for the year to 31 december 2007 the
financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date control ceases
intragroup balances and any unrealised gains or losses or income and expenses arising from intragroup transactions are eliminated in preparing the
consolidated financial statements
foreign currencies
transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction monetary assets and liabilities denominated
in foreign currencies at the balance sheet date are translated to sterling at the foreign exchange rate ruling at that date foreign exchange differences arising
on translation are recognised in the income statement nonmonetary assets and liabilities that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the transaction nonmonetary assets and liabilities denominated in foreign currencies that are stated at
fair value are translated to sterling at foreign exchange rates ruling at the dates the values were determined
assets and liabilities of foreign subsidiaries including goodwill and fair value adjustments arising on consolidation are translated into sterling at rates of
exchange ruling at the balance sheet date the revenues and expenses of foreign subsidiaries are translated to sterling at rates approximating those ruling at
the date of the transactions differences on exchange arising from the retranslation of the opening net investment in subsidiaries and from the translation of
the results of those subsidiaries at average rate are recognised directly in equity 
any differences that have arisen since 1 january 2004 the date of transition to ifrs are presented as a separate component of equity translation differences
that arose before the date of transition to ifrs in respect of all foreign entities are not presented as a separate component
revenue
revenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the
buyer in accordance with the contracted shipping terms revenue from services rendered is recognised in the income statement in proportion to the stage of
completion of the transaction at the balance sheet date the stage of completion is assessed by reference to surveys of work performed no revenue is
recognised if there are significant uncertainties regarding recovery of the consideration due associated completion costs the possible return of goods or
continuing management involvement with the goods annual report 
 accounts 2007 46
notes to the group financial statements
for the year ended 31 december 2007 continued
1 accounting policies continued
intangible assets
i goodwill
goodwill represents amounts arising on acquisition of subsidiaries in respect of acquisitions that have occurred since 1 january 2004 goodwill represents 
the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired negative goodwill arising on acquisitions would
be recognised directly in the income statement
in respect of acquisitions prior to this date goodwill is included on the basis of its deemed cost which represents the amount recorded under uk gaap on
transition the classification and accounting treatment of business combinations that occurred prior to 1 january 2004 has not been reconsidered in
preparing the group’s opening ifrs balance sheet at 1 january 2004 
goodwill is stated at cost or deemed cost less any impairment losses the carrying value of goodwill is reviewed at each balance sheet date and is allocated 
to cashgenerating units an impairment loss is recognised whenever the carrying value of an asset or its cashgenerating unit exceeds its recoverable
amount impairment losses are recognised in the income statement
ii research  development
expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is recognised in the
income statement as an expense as incurred development costs incurred after the point at which the commercial and technical feasibility of the product
have been proven and the decision to complete the development has been taken and resources made available are capitalised the expenditure capitalised
includes the cost of materials direct labour and an appropriate proportion of overheads capitalised development expenditure is stated at cost less
accumulated amortisation and impairment losses development expenditure has an estimated useful life of 5 years and is written off on a straightline basis
iii other intangible assets
other intangible assets that are acquired by the group are stated at cost less accumulated amortisation and impairment losses the useful life of each of
these assets is assessed based on discussions with the management of the acquired business and takes account of the differing natures of each of the
intangibles acquired the assessed useful lives of intangibles acquired so far range from 1 year for order back log at acquisition to 15 years for long standing
customer relationships amortisation is charged on a straightline basis over the estimated useful life of the assets 
property plant and equipment
freehold land is not depreciated long leasehold buildings are amortised over fifty years or the expected useful life of the building where less than fifty years
other assets are depreciated by equal annual instalments by reference to their estimated useful lives and residual values at the following annual rates
freehold buildings 2 to 4
short leasehold buildings period of lease
plant and equipment 10 to 33
items of property plant and equipment are stated at cost or deemed cost less accumulated depreciation certain items of property that had been revalued to
fair value on or prior to 1 january 2004 the date of transition to ifrs are measured on the basis of deemed cost being the revalued amount at the date of
that revaluation
leases
where fixed assets are financed by leasing agreements which give rights approximating to ownership the assets are treated as if they had been purchased
and the capital element of the leasing commitments is shown as obligations under finance leases assets acquired under finance leases are initially recognised
at the present value of the minimum lease payments the rentals payable are apportioned between interest which is charged to the income statement and
liability which reduces the outstanding obligation so as to give a constant rate of charge on the outstanding lease obligations costs in respect of operating
leases are charged on a straightline basis over the term of the lease in arriving at the operating profit
taxation
income tax on the profit for the year comprises current and deferred tax income tax is recognised in the income statement except to the extent that it relates
to items recognised directly in equity in which case it is recognised in equity current tax is the expected tax payable on the taxable income for the year using
tax rates enacted or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous years
deferred tax is provided using the balance sheet liability method providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes the following temporary differences are not provided for goodwill not
deductible for tax purposes and the initial recognition of assets or liabilities that affect neither accounting nor taxable profits the amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively
enacted at the balance sheet date
a deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised
deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised annual report 
 accounts 2007 47
1 accounting policies continued
inventory and work in progress
inventory and work in progress is valued at the lower of cost on a ‘first in first out’ basis and net realisable value in respect of work in progress and 
finished goods cost includes all production overheads and the attributable proportion of indirect overhead expenses which are required to bring inventories
to their present location and condition the net realisable value in respect of old and slow moving inventory is assessed by reference to historic usage patterns
and forecast future usage
cash and cash equivalents
cash and cash equivalents comprise cash balances and shortterm with an original maturity less than three months deposits bank overdrafts that are
repayable on demand form part of cash and cash equivalents for the purpose of the consolidated statement of cash flows
equity
equity comprises issued equity capital share premium reserves and retained earnings
when issued equity capital is repurchased the amount paid including directly attributable costs is recognised as a change in equity repurchased shares 
are debited direct to equity and shown as a deduction from retained earnings
provisions
a provision for warranties is recognised when the underlying products or services are sold the provision is based on historical warranty cost data known
issues and management expectations of future costs
employee benefits
i pension plans
the group operates a number of defined benefit pension schemes and contributes to these schemes in accordance with qualified actuaries’
recommendations all actuarial gains and losses as at 1 january 2004 the date of transition to ifrs were recognised in respect of all actuarial gains and
losses that arise after that date in calculating the group’s obligation in respect of the plan these are recognised in equity interest on pension scheme liabilities
has been recognised within financing expenses and the expected return on scheme assets within financing income in the consolidated income statement 
the group also operates a number of defined contribution pension schemes the costs for these schemes are recognised in the income statement as incurred
ii sharebased payment transactions
the rotork share option scheme allows certain employees to acquire shares in rotork plc this scheme is now closed and the last grant of new options 
took place in 2004 details of the scheme are given in note 19 the fair value of options granted is recognised as an employee expense with a corresponding
increase in equity the fair value is measured at grant date and spread over the period during which employees become unconditionally entitled to the
options the fair value of the options granted is measured using a binomial model taking into account the terms and conditions upon which the options
were granted the amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is due only 
to share prices not achieving the threshold for vesting
the rotork sharesave plan introduced in 2004 offers certain employees the opportunity to purchase shares in rotork plc at a discounted price compared
with the market price at the time of grant details of the scheme are given in note 19 the fair value of the rightoption is recognised as an employee expense
with a corresponding increase in equity the fair value is measured at grant date and spread over the period between grant and maturity the rightoption
reaches maturity when the employee becomes unconditionally entitled the fair value of the grant is measured using a blackscholes model taking into
account the terms and conditions upon which the rights were granted the amount recognised as an expense is adjusted to reflect the actual number of
share options that vest except where forfeiture is due only to share prices not achieving the threshold for vesting
the rotork longterm incentive plan grants awards of shares to executive directors and senior managers these awards may vest after a period of three or
four years dependent upon both market and nonmarket performance conditions being met details of the grants are given in note 19 this plan gives share
awards or cash awards of equivalent value to the share awards dependent upon the employee’s country of residence at date of grant the fair value of the
award is measured at grant date using a monte carlo simulation model which takes into account the market based performance criteria and spread over
the vesting period the fair value of the award is recognised as an employee expense with a corresponding increase in equity for the share settled award and
a provision within employee benefits for the cash settled award the amount recognised as an expense is adjusted to exclude options that do not vest as a
result of nonmarket performance conditions not being met in the case of the cash awards the liability is remeasured at each balance sheet date and at
settlement date and any changes in fair value recognised in the income statement spread equally over the vesting period
all grants under these schemes made after 7 november 2002 have been accounted for under ifrs 2 those made before this date are accounted for under
uk gaap and any accruals in respect of these schemes are held in employee benefits annual report 
 accounts 2007 48
notes to the group financial statements
for the year ended 31 december 2007 continued
1 accounting policies continued
employee benefits continued
iii longterm service leave
the group’s net obligation in respect of longterm service leave is the amount of future benefit that employees have earned in return for their service in the
current and prior periods
iv other employee incentive schemes
in addition to the above schemes the group offers a number of other bonus and incentive schemes to employees around the world the costs of these
schemes are recognised in the income statement as incurred this includes the share incentive plan and overseas profit linked share scheme both of which
are a known liability at the year end
derivative financial instruments
the group uses forward exchange contracts to hedge its exposure to foreign exchange risk arising from operational and financing activities these are the
only form of derivative financial instruments used by the group in accordance with its treasury policy the group does not hold or issue forward exchange
contracts for trading purposes however forward contracts that do not qualify for hedge accounting are accounted for as trading instruments
forward exchange contracts are recognised initially at cost and then subsequently remeasured at fair value where a forward exchange contract is
designated as a hedge of the variability in cash flows of a recognised liability a firm commitment or a highly probable forecasted transaction the effective
part of any gain or loss on the forward contract is recognised directly in equity any effective cumulative gain or loss is removed from equity and recognised in
the income statement at the same time as the hedged transaction the ineffective part of any gain or loss is recognised in the income statement immediately 
when a hedging instrument or hedge relationship is terminated but the hedged transaction still is expected to occur the cumulative gain or loss at that point
remains in equity and is recognised in accordance with the above policy when the transaction occurs if the hedged transaction is no longer expected to take
place the cumulative unrealised gain or loss held in equity is recognised in the income statement immediately 
dividends
interim dividends are recorded in the financial statements when they are paid final dividends are recorded in the financial statements in the period which
they are approved by the company’s shareholders
critical accounting judgements
in the process of applying the group’s accounting policies the board has made the following judgements that have the most significant effect on the
amounts recognised in the financial statements
i impairment of goodwill
determining whether goodwill is impaired requires an estimation of the value in use of cgus to which goodwill has been allocated the value in use
calculation involves an estimation of the future cash flows of cgus and also the selection of appropriate discount rates which involves judgement to
calculate present values details of the estimates and judgements in respect of the current year are in note 11
ii deﬁned beneﬁt pension scheme liabilities
determining the value of the future defined benefit obligation requires judgement in respect of the assumptions used to calculate present values these
include future mortality discount rate inflation and salary increases management makes these judgements in consultation with an independent actuary
details of the estimates and judgements in respect of the current year are in note 19 annual report 
 accounts 2007 49
2 analysis of revenue profit and net assets
the primary format used for segmental reporting is by business segment as this reflects the internal management structure and reporting of the group
segment results assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis unallocated
expenses comprise corporate expenses and unallocated assets and liabilities comprise cash borrowings tax assets and liabilities respectively intra group
trading is determined on an arm’s length basis
business segments
the group comprises the following business segments
controls – the design manufacture and sale of electric valve actuators
fluid systems – the design manufacture and sale of heavy duty pneumatic and hydraulic valve actuators
gears – the design manufacture and sale of gearboxes adaption and ancillaries for the valve industry
geographic segments
rotork has a worldwide presence in all three business segments through its subsidiary selling offices and through an agency network a full list of locations
can be found at wwwrotorkcom
analysis by operation
controls fluid systems gears eliminations consolidated
2007 2007 2007 2007 2007
revenue from external customers 164226 47919 23543 – 235688
inter segment revenue – – 8347 8347 –
total revenue 164226 47919 31890 8347 235688
segment result 43536 7164 7259 – 57959
unallocated expenses 2572
operating profit 55387
net financing income 1866
income tax expense 17957
profit for the year 39296
controls fluid systems gears eliminations consolidated
2006 2006 2006 2006 2006
revenue from external customers 147795 40504 18410 – 206709
inter segment revenue – – 5872 5872 –
total revenue 147795 40504 24282 5872 206709
segment result 37024 5374 4638 – 47036
unallocated expenses 1947
operating profit 45089
net financing income 972
income tax expense 14728
profit for the year 31333 annual report 
 accounts 2007 50
notes to the group financial statements
for the year ended 31 december 2007 continued
2 analysis of revenue profit and net assets continued
controls fluid systems gears unallocated consolidated
2007 2007 2007 2007 2007
segment assets 72937 37420 16183 46197 172737
segment liabilities 40728 14002 5322 10233 70285
depreciation 1839 553 238 – 2630
amortisation 309 27 47 – 383
noncash items equity settled share based payments 378 45 25 232 680
capital expenditure 2052 689 253 – 2994
controls fluid systems gears unallocated consolidated
2006 2006 2006 2006 2006
segment assets 67969 29796 12325 35420 145510
segment liabilities 34557 9442 4146 8229 56374
depreciation 1776 536 242 – 2554
amortisation 259 27 71 – 357
noncash items equity settled share based payments 366 58 16 56 496
capital expenditure 1949 496 161 – 2606
analysis by geographical segment
rest of 
europe americas the world unallocated consolidated
2007 2007 2007 2007 2007
revenue from external customers by location of customer 110679 56298 68711 – 235688
segment assets by location of assets 86538 22307 17695 46197 172737
capital expenditure by location of assets 2197 275 522 – 2994
rest of 
europe americas the world unallocated consolidated
2006 2006 2006 2006 2006
revenue from external customers by location of customer 89992 58398 58319 – 206709
segment assets by location of assets 72810 21849 15431 35420 145510
capital expenditure by location of assets 1500 268 838 – 2606
all of the activities of the group in the year arise from continuing operations  annual report 
 accounts 2007 51
3 acquisition of subsidiaries
on 13 january 2006 rotork italia srl acquired all of the business and assets of omag snc when it acquired a newly set up company for up to £1061000
£924000 was paid on completion and a further £137000 was paid during 2006 the company manufactures and sells heavy duty quarterturn and multi
turn gearboxes the acquisition was accounted for using the purchase method of consolidation in the 11 months to 31 december 2006 the subsidiary
contributed £2439000 to group revenue and £320000 to the consolidated net profit for the year before the £71000 amortisation of intangible charge
goodwill has arisen on this acquisition as a result of the value attributed to staff expertise and the assembled workforce which did not meet the recognition
criteria for an intangible asset and post acquisition synergies within the gears division due to a lack of reliable information for the part month prior to
acquiring the assets full year proforma financial results are not given in these financial statements although they would not be expected to differ significantly
from the results post acquisition
the acquisition had the following effect on the group’s assets and liabilities
pre acquisition
carrying fair value carrying
amounts adjustments amounts
property plant and equipment 101 – 101
intangible assets – 258 258
inventories 284 – 284
trade and other receivables 1045 – 1045
trade and other payables 668 – 668
provisions 102 – 102
borrowings 464 – 464
196 258 454
goodwill on acquisition 671
consideration paid satisfied in cash including £64000 expenses 1125
4 other income
2007 2006
gain on disposal of property plant and equipment 171 41
nonexecutive fees receivable 25 25
other 31 32
227 98
5 other expenses
2007 2006
loss on disposal of property plant and equipment 12 8
other 3 85
15 93 annual report 
 accounts 2007 52
notes to the group financial statements
for the year ended 31 december 2007 continued
6 personnel expenses
2007 2006
wages and salaries including bonus and incentive plans 43473 37174
social security costs 4426 4022
pension costs – for defined benefit plans 1728 2117
pension costs – for defined contribution plans 1030 1135
share based payments note 19 2054 1535
increase in liability for long service leave 30 12
52741 45995
a total of £680000 2006 £439000 of the above share based payments are equity settled comprising £22000 2006 £51000 for the share option
scheme £80000 2006 £56000 for the sharesave plan and £578000 2006 £332000 for the longterm incentive plan the cash settled portion
£1374000 2006 £1096000 all related to the longterm incentive plan
2007 2006
number number
during the year the average weekly number of employees analysed by business segment was
controls 983 920
fluid systems 267 243
gears 165 140
1415 1303
uk 447 417
overseas 968 886
1415 1303
7 net financing income
2007 2006
recognised in the income statement
interest income 958 982
expected return on assets in the pension schemes 5574 4518
foreign exchange gains 75 68
6607 5568
interest expense 112 121
interest charge on pension scheme liabilities 4541 4309
foreign exchange losses 88 166
4741 4596
recognised in equity
effective portion of changes in fair value of cash flow hedges 544 290
fair value of cash flow hedges transferred to profit or loss 290 210 
foreign currency translation differences for foreign operations 3855 3748
3601 3828
recognised in
hedging reserve 254 80
translation reserve 3855 3748
3601 3828 annual report 
 accounts 2007 53
8 profit before tax
notes 2007 2006
profit before tax is stated after charging the following
depreciation of property plant and equipment
owned assets i 2534 2445
assets held under finance lease contracts i 96 109
amortisation of intangibles i 383 357
inventory write downs recognised in the year i 875 1115
hire of plant and machinery i 677 584
other operating lease rentals i 664 669
research  development expenditure ii 2997 2646
exchange differences realised iii 13 98
auditors – audit fees and expenses paid to ii
kpmg in respect of company reporting 69 53
kpmg in respect of group reporting of subsidiaries 170 149
kpmg in respect of local statutory reporting of subsidiaries 40 43
other auditors 73 64
total audit fees and expenses 352 309
other fees paid to kpmg audit plc and its associates analysed between
taxation 134 105
litigation supportadvice – –
pension scheme fees – –
other 5 2
139 107
in addition to the above the rotork pension  life assurance scheme paid kpmg llp £32000 2006 £20000 in respect of investment advice 
these costs can be found under the following headings in the consolidated income statement
i both within cost of sales and administrative expenses
ii within administrative expenses
iii within financing income and expenses annual report 
 accounts 2007 54
notes to the group financial statements
for the year ended 31 december 2007 continued
9 income tax expense
2007 2007 2006 2006
current tax
uk corporation tax on profits for the year 12670 10486
double tax relief 5122 6023
adjustment in respect of prior years 187 182
7361 4281
overseas tax on profits for the year 10487 8787
adjustment in respect of prior years 24 41
10463 8828
total current tax 17824 13109
deferred tax
origination and reversal of other temporary differences 115 1585
adjustment in respect of prior years 18 34
total deferred tax 133 1619
total tax charge for year 17957 14728
effective tax rate based on profit before tax 314 320
profit before tax 57253 46061
profit before tax multiplied by standard rate of corporation tax in the uk of 30 17176 13818
effects of
non deductible expenses 349 267
unrelieved losses – 45
higher tax rates on overseas earnings 625 795
adjustments to tax charge in respect of prior years 193 107
total tax charge for year 17957 14728
a tax credit of £577000 2006 £551000 in respect of share based payments has been recognised directly in equity in the year
the group continues to expect its effective rate of corporation tax to be slightly higher than the standard uk rate due to higher rates of tax in the us
canada france germany italy japan and india
there is an unrecognised deferred tax liability for temporary differences associated with investments in subsidiaries rotork plc controls the dividend policies
of its subsidiaries and subsequently the timing of the reversal of the temporary differences it is not practical to quantify the unprovided temporary differences
as acknowledged within paragraph 40 of ias 12 annual report 
 accounts 2007 55
10 property plant and equipment 
land and plant and land and plant and
buildings equipment total buildings equipment total
2007 2007 2007 2006 2006 2006
cost
at 1 january 15003 21424 36427 15495 20367 35862
exchange differences 599 676 1275 507 745 1252
additions 37 2957 2994 15 2501 2516
disposals – 979 979 – 800 800
acquisition through business combinations – – – – 101 101 
at 31 december 15639 24078 39717 15003 21424 36427
depreciation
at 1 january 4152 15659 19811 3803 14845 18648
exchange differences 118 519 637 95 577 672
charge for year 432 2198 2630 444 2110 2554
disposals – 910 910 – 719 719
at 31 december 4702 17466 22168 4152 15659 19811
net book value at 31 december 10937 6612 17549 10851 5765 16616
net book value at 31 december 2005 11692 5522 17214
the net book value of the group’s plant and equipment includes £255000 2006 £198000 in respect of assets held under finance leases
net book value of land and buildings can be analysed between
2007 2006
land 1509 1441
buildings 9428 9410
net book value at 31 december 10937 10851
it is the group’ s policy to test assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable annual report 
 accounts 2007 56
notes to the group financial statements
for the year ended 31 december 2007 continued
11 intangible assets
development acquired development acquired 
goodwill costs intangibles total goodwill costs intangibles total
2007 2007 2007 2007 2006 2006 2006 2006
cost
balance at 1 january 20947 2375 737 24059 21016 2003 506 23525
exchange differences 901 – 68 969 740 – 27 767
internally developed 
during the year – 687 – 687 – 372 – 372
reduction in deferred 
consideration 321 – – 321 ––––
acquisition through 
business combinations –––– 671 – 258 929
balance at 31 december 21527 3062 805 25394 20947 2375 737 24059
amortisation
balance at 1 january – 1492 342 1834 – 1233 254 1487
exchange differences – – 36 36 – – 10 10
amortisation for the year – 309 74 383 – 259 98 357
balance at 31 december – 1801 452 2253 – 1492 342 1834
net book value at 31 december 21527 1261 353 23141 20947 883 395 22225
net book value at 31 december 2005 21016 770 252 22038
the amortisation charge in both years is recognised within administrative expenses in the income statement acquired intangibles include customer
relationships order books agency agreements and trading names of acquired companies
impairment tests for goodwill
goodwill is allocated to the group’s cash generating units ‘cgus’ identified according to business segment a segment level summary of goodwill allocation
is presented below
2007 2006
controls 5839 5717
fluid systems 8513 8102
gears 7175 7128
21527 20947
the recoverable amounts of all cgus are based on value in use calculations these calculations use cash flow projections and are based on actual operating
results and the latest group three year plan the three year plan is based on management’ s view of the future and experience of past performance cash flows
for the remainder of the next twenty years are extrapolated using a 2 growth rate which reflects the longterm nature of many of the markets the group
serves this rate has been consistently bettered in the past so is believed to represent a prudent estimate a pretax discount rate of 9 being the group’ s
weighted average cost of capital has been used in discounting the projected cash flows on this basis no impairment write downs are required annual report 
 accounts 2007 57
12 recognised deferred tax assets and liabilities
assets liabilities net assets liabilities net
2007 2007 2007 2006 2006 2006
property plant and equipment 170 300 130 206 472 266
intangible assets ––– – 265 265
employee benefits 4794 – 4794 4200 – 4200
provisions 1226 – 1226 1103 – 1103
other items 916 1098 182 492 750 258
net tax assetsliabilities 7106 1398 5708 6001 1487 4514
set off of tax 492 492 – 262 262 –
6614 906 5708 5739 1225 4514
movements in the net deferred tax asset during the year are as follows
2007 2006
balance at 1 january 4514 7951
charged to the income statement 133 1619
creditedcharged to equity in the statement of recognised income and expense 1241 2023
credited directly to equity in respect of share based payments 111 285
exchange differences 25 80
balance at 31 december 5708 4514
a deferred tax asset of £6614000 2006 £5739000 has been recognised at 31 december 2007 this asset principally relates to other temporary
differences in the defined benefit pension schemes the directors are of the opinion based on recent and forecast trading that the level of profits in the
current and future years make it more likely than not that the asset will be recovered 
deferred tax assets have not been recognised in respect of the following items
2007 2006
tax losses 2254 2915
tax credits 494 326
2748 3241
a deferred tax asset of £2748000 2006 £3241000 has not been recognised in relation to capital losses and certain tax credits tax losses and other
temporary differences these assets may be recovered if sufficient taxable or capital profits are made in future in the companies concerned
13 inventories
2007 2006
raw materials and consumables 20419 16815
work in progress 10521 8366
finished goods 5053 3846
35993 29027
included in cost of sales was £97055000 2006 £84713000 in respect of inventories consumed in the year  annual report 
 accounts 2007 58
notes to the group financial statements
for the year ended 31 december 2007 continued
14 trade and other receivables
2007 2006
noncurrent assets
insurance policy 754 632
other 96 103
other receivables 850 735
current assets
trade receivables 44870 37933
less provision for impairment of receivables 608 548
trade receivables – net 44262 37385
corporation tax 1330 1219
current tax 1330 1219
other nontrade receivables 3306 2738
prepayments and accrued income 1439 1366
other receivables 4745 4104
15 cash and cash equivalents
2007 2006
bank balances 14125 7986
cash in hand 70 39
shortterm deposits 24058 20435
cash and cash equivalents 38253 28460
bank overdrafts – 62
cash and cash equivalents in the consolidated statement of cash flows 38253 28398
16 capital and reserves
issued capital
equity share translationredemption hedging retained
capital premium reserve reserve reserve earnings total
balance at 31 december 2005 4310 5609 978 1637 210 68241 80565
profit for the year – –––– 31333 31333
other items in the statement of 
recognised income and expense – – 3748 – 80 4720 892
equity settled transactions net of tax – –––– 915 915
share options exercised by employees 4 248 – – – – 252
own ordinary shares acquired ––––– 2047 2047
own ordinary shares awarded 
under share schemes – –––– 1368 1368
purchase of preference shares – – – 2 – 4 2
dividends – –––– 24140 24140
balance at 31 december 2006 4314 5857 2770 1639 290 80386 89136
profit for the year ––––– 39296 39296
other items in the statement of 
recognised income and expense – – 3855 – 254 3642 41
equity settled transactions net of tax ––––– 364 364
share options exercised by employees 9 662 – – – – 671
own ordinary shares acquired ––––– 4249 4249
own ordinary shares awarded 
under share schemes ––––– 2007 2007
dividends ––––– 24732 24732
balance at 31 december 2007 4323 6519 1085 1639 544 89430 102452 annual report 
 accounts 2007 59
16 capital and reserves continued
share capital and share premium
5p £1 5p £1
5p ordinary non 5p ordinary non
ordinary sharesredeemable ordinary shares redeemable
shares issued and preference shares issued and preference
authorised full y paid up shares authorised fully paid up shares
2007 2007 2007 2006 2006 2006
at 1 january 5449 4314 45 5449 4310 47
purchased for cash and cancelled ––– – – 2
issued under employee share schemes –9 – –4 –
at 31 december 5449 4323 45 5449 4314 45
number of shares 000 108990 86469 108990 86282
the ordinary shareholders are entitled to receive dividends as declared and are entitled to vote at meetings of the company the preference shareholders take
priority over the ordinary shareholders when there is a distribution upon winding up the company or on a reduction of equity involving a return of capital
the holders of preference shares are entitled to vote at a general meeting of the company if a preference dividend is in arrears for six months or the business
of the meeting includes the consideration of a resolution for winding up the company or the alteration of the preference shareholders’ rights
ordinary shares issued during the year were 142173 2006 88261 under the share option scheme at prices between 285p and 387p 
2006 278p and 298p and 44905 2006 1465 under the sharesave plan at 320p 2006 320p no new shares were issued under the share incentive plan
or under the overseas profit linked share scheme during 2007 or 2006 
no new options were issued under the share option scheme during 2007 or 2006 on 1 december 2007 2006 6 october 2006 options over 42405 
2006 58025 shares were granted under the sharesave plan at 811p 2006 592p of these options 28499 2006 21402 were exercisable after 3 years
and 13906 2006 36623 after 5 years
there were 46557 2006 200973 outstanding options under the share option scheme at 31 december exercisable at various prices between 278p and
387p per ordinary share between 2008 and 2014 there were 241487 2006 250452 outstanding options under the sharesave plan at 31 december
exercisable at various prices between 320p and 811p per ordinary share between 2008 and 2012
within the retained earnings reserve are own shares held the investment in own shares represents 445396 2006 283045 ordinary shares of the company
held in trust for the benefit of directors and employees for future payments under the share incentive plan and longterm incentive plan the dividends on
these shares have been waived
translation reserve
the translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations
capital redemption reserve
the capital redemption reserve arises when the company redeems shares wholly out of distributable profits
hedging reserve
the hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments that are determined to
be an effective hedge
dividends
the following dividends were paid in the year per qualifying ordinary share
2007 2006
1165p final dividend 2006 99p 10051 8537
77p interim dividend 2006 65p 6645 5601
2007 additional interim dividend 93p 8036 –
2006 first additional interim dividend 58p – 5004
2006 second additional interim dividend 58p – 4998
24732 24140 annual report 
 accounts 2007 60
notes to the group financial statements
for the year ended 31 december 2007 continued
16 capital and reserves continued
after the balance sheet date the following dividends per qualifying ordinary share were proposed by the directors the dividends have not been provided for
and there are no corporation tax consequences
2007 2006
final proposed dividend per qualifying ordinary share
1400p 12116
1165p 10019
additional interim dividends per qualifying ordinary share proposed for 2008
115p 10000
93p 8000
17 earnings per share
basic earnings per share
earnings per share is calculated for both the current and previous years using the profit attributable to the ordinary shareholders for the year the earnings per
share calculation is based on 861m shares 2006 861m shares being the weighted average number of ordinary shares in issue net of own ordinary shares
held for the year
2007 2006
net profit attributable to ordinary shareholders 39296 31333
weighted average number of ordinary shares
issued ordinary shares at 1 january 85999 85952
effect of own shares held 54 91
effect of shares issued under share option schemessharesave plans 93 58
weighted average number of ordinary shares for the year ended 31 december 86146 86101
diluted earnings per share
diluted earnings per share is based on the profit for the year attributable to the ordinary shareholders and 869m shares 2006 869m shares the number of
shares is equal to the weighted average number of ordinary shares in issue net of own ordinary shares held adjusted to assume conversion of all potentially
dilutive ordinary shares the company has three categories of potentially dilutive ordinary shares those share options granted to employees under the share
option scheme and sharesave plan where the exercise price is less than the average market price of the company’s ordinary shares during the year and
contingently issuable shares awarded under the longterm incentive plan
2007 2006
net profit attributable to ordinary shareholders 39296 31333
weighted average number of ordinary shares diluted
weighted average number of ordinary shares for the year ended 31 december 86146 86101
effect of share options in issue 30 102
effect of sharesave options in issue 113 111
effect of ltip shares in issue 604 552
weighted average number of ordinary shares diluted for the year ended 31 december 86893 86866 annual report 
 accounts 2007 61
18 interest bearing loans and borrowings
this note provides information about the contractual terms of the group’s interest bearing loans and borrowings for more information about the group’s
exposure to interest rate and currency risk see note 22
2007 2006
noncurrent liabilities
preference shares classified as debt 45 45
bank loans 27 54
finance lease liabilities 137 81
209 180
2007 2006
current liabilities
bank overdraft – 62
bank loans 27 447
finance lease liabilities 91 79
118 526
bank loans are secured by accepted letters of credit and corporate guarantees
terms and debt repayment schedule
the terms and conditions of outstanding loans were as follows
face carrying face carrying
interest year of value amount value amount
currency rates maturity 2007 2007 2006 2006
overdraft euro 26 – 31 2007 –– 62 62
secured loan euro 31 2007 –– 295 288
secured loan yen 19 – 25 2007 –– 142 133
secured loan other 95 – 110 2009 63 54 99 80
nonredeemable preference shares sterling 95 – 45 45 45 45
finance lease liabilities euro 26 – 100 200710 246 228 173 160
354 327 816 768
finance lease liabilities
minimum lease minimum lease
payments interest principal payments interest principal
2007 2007 2007 2006 2006 2006
less than one year 100 9 91 87 8 79
between one and five years 146 9 137 86 5 81
246 18 228 173 13 160 annual report 
 accounts 2007 62
notes to the group financial statements
for the year ended 31 december 2007 continued
19 employee benefits
2007 2006
recognised liability for defined benefit obligations
present value of funded obligations 93799 87394
fair value of plan assets 86215 80745
7584 6649
defined contribution scheme liabilities 544 507
employee bonus and incentive plan 3731 2744
longterm incentive plan 3039 1868
employee indemnity provision 846 196
liability for long service leave 193 163
15937 12127
noncurrent 11047 8186
current 4890 3941
15937 12127
i defined benefit pension liabilities
the group makes a contribution to three defined benefit plans to provide benefits for employees in the uk usa and holland upon retirement
movements in the present value of defined benefit obligations
2007 2006
liabilities at 1 january 87394 89501
current service costs 1708 1817
member contributions 481 484
interest cost 4541 4309
benefits paid 2214 1691
past service costs 20 300
actuarial lossesgains 1953 6729
currency gains 84 597
liabilities at 31 december 93799 87394
movements in fair value of plan assets
2007 2006
assets at 1 january 80745 69125
expected return on scheme assets 5574 4518
employer contributions 4643 8892
member contributions 481 484
benefits paid 2214 1691
actuarial losses 2954 199
currency losses 60 384
assets at 31 december 86215 80745
expense recognised in the income statement
2007 2006
current service costs 1708 1817
past service costs 20 300
interest on obligation 4541 4309
expected return on plan assets 5574 4518
695 1908
the expense is recognised in the following line items in the income statement
2007 2006
cost of sales 556 663
administrative expenses 1172 1454
net financing income 1033 209
695 1908 annual report 
 accounts 2007 63
19 employee benefits continued
amounts recognised in the consolidated statement of recognised income and expense
2007 2006
actuarial losses on plan assets 2954 199
actuarial lossesgains from liabilities 1953 6729
currency gains 24 213
net actuarial lossesgains recognised in consolidated statement of recognised income and expense 4883 6743
cumulative actuarial losses recognised in consolidated statement of recognised income and expense 7384 2501
2007 2006 2005 2004 2003
defined benefit obligation 93799 87394 89501 74486 64203
scheme assets 86215 80745 69125 54650 44700
deficit 7584 6649 20376 19836 19503
experience adjustments on liabilities 1953 6729 9930 6783 6750
experience adjustments on assets 2954 199 6693 884 3700
experience adjustments on currency 24 213 215 107 50
liability for defined benefit obligations
the principal actuarial assumptions at the balance sheet date expressed as weighted averages
uk scheme us scheme average
 per annum  per annum  per annum
2007 2006 2007 2006 2007 2006
discount rate 58 51 59 57 58 51
rate of increase in salaries 48 40 45 45 48 40
rate of increase in pensions post may 2000 33 30 00 00 32 29
rate of increase in pensions pre may 2000 45 45 00 00 43 43
rate of price inflation 33 30 35 35 33 30
the split of the schemes’ assets and expected rates of return were
2007 2007 2006 2006
 
equities 78 47016 78 42973
bonds 51 29092 48 23639
property 75 6977 75 7767
cash 34 73 34 3588
us deposit administration contract 60 3057 60 2778
total 86215 80745
actual return on the schemes’ assets 2560 3935
the individual return assumptions for each asset class are based on market conditions at 31 december 2007 and represent a best estimate of future returns
for that class allowing for risk premiums where appropriate the group estimates that contributions to the group’s defined benefit pension schemes payable
during 2008 will be approximately £2300000
the mortality assumptions used are the pnxa00 year of birth tables with future improvements in mortality based on the cmi medium cohort projections
subject to a minimum improvement of 15 per annum 2006 pa92 c2004 with an adjustment to the discount rate of 01 per annum to allow for future
improvements in mortality
by way of example the respective mortality tables indicate the following life expectancy
2007 2006
life expectancy at age 65 life expectancy at age 65
current age male female male female
65 227 253 186 216
45 257 282 190 220 annual report 
 accounts 2007 64
notes to the group financial statements
for the year ended 31 december 2007 continued
19 employee benefits continued
defined contribution pension liabilities
the group makes a contribution to a number of defined contribution plans around the world to provide benefits for employees upon retirement total
expense relating to these plans in the year was £1030000 2006 £1135000 
ii share based payments
volatility assumptions for equity based payments
the expected volatility of all equity compensation benefits is based on the historic volatility calculated based on the weighted average remaining life of each
benefit adjusted for any expected changes to future volatility due to publicly available information
a share option scheme
at 1 january 1995 the group established a share option programme for employees the allocation of options was linked to the completion of 5 years service
in accordance with the programme once vested the options grant the right to purchase shares at the market price they were at the date of grant exercise
prices range from 278p to 387p options vest after three years and expire ten years after being granted
only the 2003 and 2004 grants occurred after 7 november 2002 the start date for recognition under ifrs 2 therefore only charges in respect of these
grants have been made to the accounts in accordance with ifrs 2 and the relevant disclosures made below additionally four share option arrangements
granted before 7 november 2002 exist the recognition and measurement principles in ifrs 2 have not been applied to these grants in accordance with the
transitional provisions in ifrs 1 and ifrs 2
outstanding exercised lapsed outstanding
at start  during during at end
optioin exercise price of year year year of year
1999 grant £362

1653 1653 – –
2000 grant £285

40450 20799 – 19651
2001 grant £298

3799 – – 3799
2002 grant £372

3947 1794 2153 –
2003 grant £278

5733 – 3200 2533
2004 grant £387

145391 117927 6890 20574
200973 142173 12243 46557
weighted average exercise price £361 £372 £356 £331
weighted average contractual life remaining 4 years
 exercisable at end of year
the 2004 grant vested during the year the intrinsic value of shares vested as at 31 december 2007 is £296000 2006 £163000
the group received proceeds of £528000 in respect of the 142173 options exercised during the year £7000 was credited to share capital and £521000 to
share premium see note 16 the options were exercised throughout the year at prices between 285p and 387p annual report 
 accounts 2007 65
19 employee benefits continued
b sharesave plan
following shareholder approval of the sharesave plan at the company’s annual general meeting ‘agm’ on 18 may 2000 the first offer was made to
employees in 2004 
uk employees are invited to join the sharesave plan when an offer is made each year all the offers to date were made at a 20 discount to market price at
the time there are no performance criteria for the sharesave plan employees are given the option of joining either the 3 year plan or the 5 year plan
3 year scheme 5 year scheme
2007 2006 2007 2006
grant date 1 december 6 october 1 december 6 october
2007 2006 2007 2006
share price at grant date £983 £772 £983 £772
exercise price £811 £592 £811 £592
sharesshare equivalents under scheme 28499 21402 13906 36623
vesting period 3 years 3 years 5 years 5 years
expected volatility 25 19 24 17
risk free rate 45 48 46 47
expected dividends expressed as a dividend yield 18 21 18 21
probability of ceasing employment before vesting 20 20 20 20
fair value £279 £227 £320 £244
3 year scheme
outstanding granted vested lapsed outstanding
at start during during during at end
of year year year year of year
2004 award 55097 – 44905 888 9304
2005 award 17496 – – 1699 15797
2006 award 21402 – – 1659 19743
2007 award – 28499 – – 28499
93995 28499 44905 4246 73343
the 2004 awards vested in the year at a cost of £320 each and on that day the market value of each award was £996 the weighted average remaining life
of awards outstanding at the year end is 2 years the group received proceeds of £143000 in respect of the 44905 options exercised during the year
£2000 was credited to share capital and £141000 to share premium see note 16
5 year scheme
outstanding granted vested lapsed outstanding
at start during during during at end
of year year year year of year
2004 award 93438 – – 826 92612
2005 award 26396 – – 1393 25003
2006 award 36623 – – – 36623
2007 award – 13906 – – 13906
156457 13906 – 2219 168144
no awards vested in the year the weighted average remaining life of awards outstanding at the year end is 3 years annual report 
 accounts 2007 66
notes to the group financial statements
for the year ended 31 december 2007 continued
19 employee benefits continued
c longterm incentive plan
the longterm incentive plan ‘ltip’ is a performance share or cash unit plan under which shares or cash units are conditionally allocated to selected
members of senior management at the discretion of the remuneration committee on an annual basis no shares or cash units will normally be released to
participants unless they are still in the group’s service following completion of four year performance periods for awards made up to and including 2005 and
the company’s relative total shareholder return ‘tsr’ against a comparator group of companies places it in at least the 50th percentile position in the
comparator group at the end of the relevant performance period the performance period for 2006 and future awards under the plan has been reduced to
three years tsr measures the change in value of a share and reinvested dividends over the period of measurement the actual number of shares or cash units
transferred will be determined by the number of shares or cash units initially allocated multiplied by a vesting percentage for the awards made up to and
including 2005 this will be 40 at the 50th percentile rising to 100 at the 75th percentile with each percentile position above the 50th adding 24 to
the vesting percentage from the 2006 award onwards the actual number of shares or cash units transferred will be 30 at the 50th percentile rising to
100 at the 75th percentile with each percentile position above the 50th adding 28 to the vesting percentage the company’s earnings per share is also
monitored during the relevant performance period to ensure it meets a minimum average annual growth equal to the rise in the retail price index ‘rpi’ plus
2 per annum failure to meet the rpi requirement will result in nil vesting
following shareholder approval of the ltip at the company’s agm on 18 may 2000 awards over shares were made to executive directors and senior
managers in each year from 2000 to 2007 
the performance period for the 2003 award ended at 31 december 2006 messrs hewitt bacon and woodrow as independent actuaries have certified to
the remuneration committee that there was a 100 vesting of this award as the company’s position relative to the comparator group at the end of the
relevant performance period was on the 88th percentile position and the group’s earnings per share growth has exceeded the minimum average annual
growth in the rpi plus 2 per annum the awards vested during 2007
the performance period for the 2004 award ended at 31 december 2007 messrs pricewaterhousecoopers llp as independent actuaries have certified to
the remuneration committee that there was a 100 vesting of this award as the company’s position relative to the comparator group at the end of the
relevant performance period was above the 75th percentile and the group’s earnings per share growth has exceeded the minimum average annual growth in
the rpi plus 2 per annum the awards will vest during 2008
share scheme
2007 2006
grant date 2 march 4 may
2007 2006
share price at grant date £805 £740
sharesshare equivalents under scheme 145754 122998
vesting period 3 years 3 years
expected volatility 21 23
risk free rate 51 47
expected dividends expressed as a dividend yield 23 37
probability of ceasing employment before vesting 3 pa 3 pa
fair value £434 £407
cash scheme
2007 2006
grant date 2 march 4 may 
2007 2006
share price at grant date £805 £740
sharesshare equivalents under scheme 84961 83139
vesting period 3 years 3 years
expected volatility 28 23
risk free rate 43 51
expected dividends expressed as a dividend yield 20 34
probability of ceasing employment before vesting 3 pa 3 pa
fair value £659 £511 annual report 
 accounts 2007 67
19 employee benefits continued
share based scheme
outstanding granted vested forfeited outstanding
at start during during during at end
of year year year year of year
2003 award 108690 – 108690 – –
2004 award 166075 – – – 166075
2005 award 169547 – – – 169547
2006 award 122998 – – – 122998
2007 award – 145754 – – 145754
567310 145754 108690 – 604374
cash based scheme
outstanding granted vested forfeited outstanding
at start during during during at end
of year year year year of year
2003 award 91244 – 90531 713 –
2004 award 123091 – 1984 1984 119123
2005 award 128846 – 1031 3092 124723
2006 award 83139 – – – 83139
2007 award – 84961 – – 84961
426320 84961 93546 5789 411946
at the date of vesting the 2003 awards were valued at £805 the weighted average remaining life of awards outstanding at the year end is one year
d employee expenses
the employee expense included in the income statement can be analysed as follows
2007 2006
share options granted 2003 – 10
share options granted 2004 22 41
longterm incentive plan – cash settled 1374 1096
longterm incentive plan – equity settled 578 332
sharesave plan – three years 40 28
sharesave plan – five years 40 28
total expense recognised as employee costs note 6 2054 1535
20 provisions
deferred
warranty consideration total
2007 2007 2007
balance at 1 january 2007 2822 438 3260
exchange differences 103 38 141
provisions used during the year 1159 8 1167
chargedcredited in the year 1706 321 1385
balance at 31 december 2007 3472 147 3619
maturity at 31 december 2007
noncurrent 1157 – 1157
current 2315 147 2462
3472 147 3619
maturity at 31 december 2006
noncurrent 941 – 941
current 1881 438 2319
2822 438 3260
the warranty provision is based on estimates made from historical warranty data associated with similar products and services the provision relates mainly to
products sold during the last twelve months the typical warranty period is now eighteen months
the deferred consideration arose on the acquisition of pc intertechnik during 2005 the penultimate tranche was settled in 2007 resulting in a payment to
the vendor of £8000 and a release of the provision of £321000 see goodwill – note 11 payment or release of the final tranche of this provision is still
subject to negotiation and is expected to be settled in 2008 annual report 
 accounts 2007 68
notes to the group financial statements
for the year ended 31 december 2007 continued
21 trade and other payables
2007 2006
trade payables 21448 16467
bills of exchange 119 368
trade payables 21567 16835
corporation tax 8791 6236
current tax 8791 6236
other taxes and social security 2767 2410
nontrade payables and accrued expenses 16371 13513
other payables 19138 15923
22 financial instruments
financial risk and treasury policies
the treasury department maintains liquidity manages relations with the group’s bankers identifies and manages foreign exchange risk and provides a
treasury service to the group’s businesses treasury dealings such as investments borrowings and foreign exchange are conducted only to support underlying
business transactions
the group has clearly defined policies for the management of foreign exchange and interest rate risk the group treasury department is not 
a profit centre and therefore does not undertake speculative foreign exchange dealings for which there is no underlying exposure exposures resulting from
sales and purchases in foreign currency are matched where possible and the net exposure may be hedged by the use of forward exchange contracts
i credit risk
credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises
principally from the group’s receivables from customers and monies on deposit with financial institutions 
management has a credit policy in place and exposure to credit risk is both monitored on an ongoing basis and reduced through the use of credit insurance
covering 6075 of trade receivables at any time credit evaluations are carried out on all customers requiring credit above a certain threshold with varying
approval levels set above this depending on the value of the sale at the balance sheet date there were no significant concentrations of credit risk
goods are sold subject to retention of title clauses so that in the event of nonpayment the group may have a secured claim
the group establishes an allowance for impairment in respect of noninsured receivables where recoverability is considered doubtful
exposure to credit risk
the carrying amount of financial assets represents the maximum credit exposure the maximum exposure to credit risk at the reporting date was 
carrying amount
2007 2006
trade receivables 44262 37385
other receivables 5595 4839
cash and cash equivalents 38253 28460
currency swap deposit 2975 3638
forward exchange contracts used for hedging
assets 95 291
liability 639 1
total 90541 74612
the maximum exposure to credit risk for trade receivables at the reporting date by currency was
carrying amount
2007 2006
sterling 4658 4505
us dollar 7408 7721
euro 24444 18213
other 7752 6946
total 44262 37385 annual report 
 accounts 2007 69
22 financial instruments continued
provisions against trade receivables
the aging of trade receivables and associated provision for impairment at the reporting date was
gross provision gross provision
2007 2007 2006 2006
not past due 31366 13 28050 47
past due 030 days 9296 48 5915 21
past due 3160 days 2520 47 2381 92
past due 6190 days 889 25 806 126
past due more than 91 days 799 475 781 262
44870 608 37933 548
ii liquidity risk
liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due the group’s approach to managing liquidity is to
ensure as far as possible that it will always have sufficient liquidity to meet its liabilities when due under both normal and stressed conditions without
incurring unacceptable losses or risking damage to the group’s reputation
the group is highly cash generative and uses monthly cash flow forecasts to monitor cash requirements and to optimise its return on investments typically
the group ensures that it has sufficient cash on hand to meet foreseeable operational expenses but it maintains a £2m overdraft facility on which interest
would be payable at libor plus 100 basis points 
the following are the contractual maturities of financial liabilities including interest payments and excluding the impact of netting agreements
anal ysis of contractual cash flow maturities
carrying contractual less than more than 
31 december 2007 amount cash flows 12 months 12 years 25 years 5 years
secured bank loans 54 63 33 30 – –
finance lease liabilities 228 246 100 74 72 –
trade and other payables 40705 40705 40705 – – –
nonredeemable preference shares 45 45 – – – 45
forward exchange contracts used for hedging
outflow 639 19796 19796 – – –
inflow 95 8542 8542 – – –
41576 69397 69176 104 72 45
analysis of contractual cash flow maturities
carrying contractual less than more than 
31 december 2006 amount cash flows 12 months 12 years 25 years 5 years
secured bank loans 501 536 472 32 32 –
overdraft 62 62 62 – – –
finance lease liabilities 160 173 87 45 41 –
trade and other payables 32758 32758 32758 – – –
nonredeemable preference shares 45 45 – – – 45
forward exchange contracts used for hedging
outflow 1 202 202 – – –
inflow 29169956995–––
33236 40771 40576 77 73 45 annual report 
 accounts 2007 70
notes to the group financial statements
for the year ended 31 december 2007 continued
22 financial instruments continued
iii market risks
market risk is the risk that changes in market prices such as currency rates and interest rates will affect the group’s results the objective of market risk
management is to manage and control market risk within suitable parameters
a currency risk
the group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than sterling the currencies giving rise to this
risk primarily are us dollar and related currencies and the euro the group hedges up to 80 of forecast us dollar or euro foreign currency exposures using
forward exchange contracts in respect of other monetary assets and liabilities held in currencies other than sterling the group ensures that the net exposure
is kept to an acceptable level by buying or selling foreign currencies at spot rates where necessary to address shortterm imbalances
the group classifies its forward exchange contracts hedging forecasted transactions as cash flow hedges and states them at fair value the net fair value 
of forward exchange contracts used as hedges at 31 december 2007 was a £544000 liability 2006 £290000 asset comprising an asset of £95000 
2006 £291000 and a liability of £639000 2006 £1000 
changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge
accounting is applied are recognised in the income statement
all forward exchange contracts in place at 31 december 2007 mature within one year
the group entered into a currency swap in february 2005 when 190m was borrowed to finance the acquisition of pc intertechnik linked to a deposit 
of £62m at an exchange rate of 11444£1000 the 19m was paid to rotork controls deutschland gmbh in a form of redeemable equity as this 
company purchased the assets of pc intertechnik this swap was entered into to protect the group from currency movements on the repayment of equity
from germany
sensitivity analysis
it is estimated that with all other variables held equal in particular other exchange rates a general change of one cent in the value of the us dollar against
sterling would have had a £200000 impact on the group’s profit before tax and a one euro cent movement against sterling would have had a £200000
impact on the group’s profit before tax for the year ended 31 december 2007 the method of estimation which has been applied consistently involves
assessing the transaction impact of us dollar and euro cash flows and the translation impact of us dollar and euro profits
the following significant exchange rates applied during the year
average rate closing rate
2007 2006 2007 2006
us dollar 201 184 199 196
euro 145 147 136 148
b interest rate risk
the group does not undertake any hedging activity in this area all foreign currency cash deposits are made at prevailing interest rates and where rates are
fixed the period of the fix is generally no more than 1 month the main element of interest rate risk concerns sterling deposits which are made on a floating
libor based rate and shortterm overdrafts in foreign currencies which are also on a floating rate
the floating rate financial liabilities comprise bank loansoverdrafts bearing interest rates fixed by reference to the relevant libor or equivalent rate
the weighted average interest rate of the fixed rate financial liabilities is 39 per annum
the weighted average period for which interest rates on the fixed rate financial liabilities are fixed is one year
the maturity profile of the group’s financial liabilities at 31 december was as follows
2007 2006
in one year or less 118 589
in more than one year but not more than two years 98 68
in more than two years but not more than five years 66 66
in more than five years 45 45
total 327 768 annual report 
 accounts 2007 71
22 financial instruments continued
at the reporting date the interest rate profile of the group’s interest bearing financial instruments was as follows
fixed rate instruments
carrying amount
2007 2006
financial assets 24058 20435
financial liabilities 228 295
23830 20140
all foreign currency cash deposits are held on fixed rates of interest in the uk all other cash amounts are on floating rates or overnight rates based on the
relevant libor or equivalent rate
iv capital risk management
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders
and benefits for other stakeholders and to maintain an optimal capital structure
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders return capital to shareholders or issue
new shares
the group’s net funds at the balance sheet date were
2007 2006
total borrowings 327 706
cash and cash equivalents note 15 38253 28398
group net funds 37926 27692
v fair values
the fair values of financial assets and liabilities together with the carrying amounts shown in the balance sheet are as follows
carrying carrying
amount fair value amount fair value
2007 2007 2006 2006
trade receivables 44262 44262 37385 37385
other receivables 5595 5595 4839 4839
cash and cash equivalents 38253 38253 28460 28460
currency swap deposit 2975 2975 3638 3638
forward exchange contracts
assets 95 95 291 291
liabilities 639 639 1 1 
currency swap loan 2975 2975 3638 3638
secured loans 54 54 501 501
preference shares 45 45 45 45
finance lease liabilities 228 228 160 160
trade and other payables 40705 40705 32758 32758
bank overdrafts –– 62 62
46534 46534 37448 37448
 as the elements of the currency swap can legally be offset although the values of the loan and deposit are shown above they have been offset in the consolidated balance sheet
the forward exchange contracts are designated hedges the assets are held at fair value through profit and loss and the liabilities at amortised cost
basis for determining fair values
the following summarises the significant methods and assumptions used in estimating the fair values of financial instruments reflected in the table above
derivatives
forward exchange contracts are valued at year end spot rates adjusted for the forward points to the contract’s value date and gains and losses taken to
equity no contract’s value date is greater than one year from the year end
secured loans
as the loans have a flexible repayment schedule and may be paid down in less than one year the notional amount is deemed to reflect 
the fair value
trade and other receivablespayables
as the majority of receivablespayables have a remaining life of less than one year the notional amount is deemed to reflect the fair value annual report 
 accounts 2007 72
23 operating leases
noncancellable operating lease rentals are payable as follows
2007 2006
less than one year 326 316
between one and five years 2110 2075
more than five years 147 136
2583 2527
of the £26m 2006 £25m £15m 2006 £17m relates to property and the balance to plant and equipment the largest single lease commitment is for
less than £05m 2006 £05m 
24 capital commitments
capital commitments at 31 december for which no provision has been made in these accounts were
2007 2006
contracted 323 542
25 contingencies
2007 2006
performance guarantees and indemnities 4680 3580
the performance guarantees and indemnities have been entered into in the normal course of business a liability would only arise in the event of the group
failing to fulfil its contractual obligations
26 related parties
the group has a related party relationship with its subsidiaries and with its directors and key management a list of subsidiaries is shown on pages 80 to 81
of these financial statements transactions between two subsidiaries for the sale and purchase of products or the subsidiary and parent for management
charges are priced on an arms length basis
sales to subsidiaries and associates of bae systems plc a related party by virtue of nonexecutive director ig king’s directorship of that company totalled
£20000 during the year 2006 £15000 and there are no amounts outstanding at 31 december 2007 2006 £nil
key management emoluments
the emoluments of those members of the management team including directors who are responsible for planning directing and controlling the activities 
of the group are
2007 2006
emoluments including social security costs 2331 2068
post employment benefits 316 214
share based payments 898 610
3545 2892
27 post balance sheet events
on 30 january 2008 the group completed the acquisition of remote controls sweden ab ‘rcs’ a designer and manufacturer of valve actuators based in
falun sweden the total consideration for the acquisition of the entire issued share capital of rcs was sek 165m £13m payable in cash sek 25m of the
consideration is deferred and payable later in 2008 and in 2009 rcs’s audited accounts for the year ended 30 april 2007 show gross assets of sek 87m
turnover of sek 182m and profit before tax of sek 105m
notes to the group financial statements
for the year ended 31 december 2007 continued annual report 
 accounts 2007 73
2007 2006
notes £000 £000
fixed assets
tangible assets c 1202 1231
investments d 2311 1835
3513 3066
current assets
debtors e 37730 37695
cash at bank and in hand f 20753 16548
58483 54243
creditors
amounts falling due within one year g 7853 5056
net current assets 50630 49187
total assets less current liabilities 54143 52253
creditors
amounts falling due after more than one year h 45 45
net assets 54098 52208
capital and reserves
called up share capital i 4323 4314
share premium account i 6519 5857
translation reserve i 2 2
capital redemption reserve i 1639 1639
profit and loss account i 41619 40400
equity shareholders’ funds 54098 52208
these company financial statements were approved by the board of directors on 29 february 2008 and were signed on its behalf by
rotork plc company balance sheet
at 31 december 2007
wh whiteley
director
re slater
director annual report 
 accounts 2007 74
notes to the company financial statements
for the year ended 31 december 2007
a accounting policies
the following accounting policies have been applied consistently except for the adoption of frs 29 – financial instruments – disclosure in dealing with items
which are considered material in relation to the financial statements notes a to k relate to the company rather than the group
basis of accounting
the financial statements have been prepared under the historical cost convention and have been prepared in accordance with applicable accounting
standards under section 2304 of the companies act 1985 the company is exempt from the requirement to present its own profit and loss account under
frs 1 the company is exempt from the requirement to prepare a cash flow statement on the grounds that the group includes the company in its own
published consolidated financial statements
the company has taken advantage of the exemption available under frs 8 and has not disclosed transactions with entities which are subsidiaries of the group
where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the group the company considers
these to be insurance arrangements and accounts for them as such in this respect the company treats the guarantee contract as a contingent liability until
such time as it becomes probable that the company will be required to make a payment under the guarantee the company continues to account for intra
group cross guarantees under frs 12
foreign currencies
transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction monetary assets and liabilities denominated in
foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit
and loss account
investments
investments are measured at cost less any provision for impairment and adjusted where equity settled share based payments are made to the subsidiary
company’s employees they comprise investments in subsidiary companies
depreciation and amortisation
freehold land is not depreciated long leasehold buildings are amortised over fifty years or the expected useful life of the building where less than fifty years
other assets are depreciated by equal annual instalments by reference to their estimated useful lives and residual values at the following annual rates
freehold buildings 2 to 4
short leasehold buildings period of lease
plant and equipment 10 to 33
post retirement beneﬁts
the company participates in a group wide pension scheme providing benefits based on final pensionable pay the assets of the scheme are held separately
from those of the company the company is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable
basis and therefore as required by frs 17 retirement benefits accounts for the scheme as if it were a defined contribution scheme as a result the amount
charged to the profit and loss account represents the contributions payable to the scheme in respect of the accounting period
classiﬁcation of preference shares
following the adoption of the presentation elements of frs 25 financial instruments the cumulative redeemable preference shares issued by the company
are classified as longterm debt the preference dividends are charged within interest payable
share based payments
the company has adopted frs 20 and the accounting policies followed are in all material respects the same as the group’s policy under ifrs 2 this policy is
shown in note 1 to the group financial statements
deferred taxation
deferred tax is provided in full without discounting on timing differences that result in an obligation at the balance sheet date to pay more tax or a right to
pay less tax at a future date at rates expected to apply when they crystallise based on current tax rates and law except for the items explained below timing
differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in
the financial statements deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell
the assets or on unremitted earnings of subsidiaries where there is no commitment to remit those earnings deferred tax assets are recognised to the extent
that it is regarded as more likely than not that they will be recovered
dividends
interim dividends are recorded in the financial statements when they are paid final dividends are recorded in the financial statements in the period which
they are approved by the company’s shareholders annual report 
 accounts 2007 75
b personnel expenses in the company profit and loss account
2007 2006
wages and salaries including bonus and incentive plans 1662 719
social security costs 194 60
pension costs 138 434
share based payments 209 127
2203 1340
there are 4 2006 4 employees of rotork plc plus the 5 2006 5 executive directors the personnel costs accounted for within the company include the
full costs of the employees but not the full costs of the executive directors half of the salary costs bonus and benefits of the group chief executive group
chief operating officer and group finance director are reported within the company but the balance of their costs and those of the other two executive
directors are reported within the subsidiary where they are based as this approximates the basis on which their time is split
c tangible assets in the company balance sheet
land and plant and
buildings equipment total
cost
at 1 january 2007 and 31 december 2007 1468 13 1481
depreciation
at 1 january 2007 237 13 250
charge for year 29 – 29
at 31 december 2007 266 13 279
net book value 
at 31 december 2007 1202 – 1202
at 31 december 2006 1231 – 1231
net book value of land and buildings can be analysed between
2007 2006
freehold land 60 60
freehold buildings 1142 1171
net book value at 31 december 1202 1231 annual report 
 accounts 2007 76
notes to the company financial statements
for the year ended 31 december 2007 continued
d investments in the company balance sheet
shares in group companies
2007 2006
at 1 january 1835 1484
additions arising from share schemes 476 351
at 31 december 2311 1835
a listing of the principal subsidiaries is included in the directory on pages 80 to 81
e debtors due within one year in the company balance sheet
2007 2006
amounts owed by group undertakings 37213 36882
other debtors 98 367
prepayments and accrued income 44 29
corporation tax 298 381
deferred taxation 77 36
37730 37695
a deferred tax asset of £77000 2006 £36000 has been recognised this asset principally relates to other timing differences the directors are of the
opinion based on recent and forecast trading that the level of future and current profits make it more likely than not that the asset will be recovered 
f cash at bank and in hand in the company balance sheet
2007 2006
bank balances 41 36
shortterm deposits 20712 16512
cash at bank and in hand 20753 16548
g creditors amounts falling due within one year in the company balance sheet
2007 2006
bank loans and overdrafts 5412 2849
trade creditors 39 79
amounts owed to group undertakings 1053 1053
other taxes and social security 11 11
other creditors 1050 868
accruals and deferred income 288 196
7853 5056
h creditors amounts falling due after more than one year in the company balance sheet
2007 2006
preference shares classified as debt 45 45
this debt is not redeemable at any fixed future date annual report 
 accounts 2007 77
i capital and reserves in the company balance sheet
capital equity
share share translation redemption retained shareholders’
capital premium reserve reserve earnings funds
balance at 1 january 2007 4314 5857 2 1639 40400 52208
profit for the year – – – – 27514 27514
equity settled transactions net of tax – – – – 679 679
share options exercised by employees 9 662 – – – 671
own ordinary shares acquired – – – – 4249 4249
own ordinary shares awarded under share schemes – – – – 2007 2007
dividends – – – – 24732 24732
balance at 31 december 2007 4323 6519 2 1639 41619 54098
details of the number of ordinary shares authorised and in issue and dividends paid in the year are given in note 16 the disclosures required under frs 20
relating to share based payments can be found in note 19
profit for the financial year in the accounts of the company is £27514000 2006 £21032000
j contingencies in the company
2007 2006
guarantees for bank overdrafts of uk subsidiary undertakings – –
the uk banking arrangements are subject to crossguarantees between the company and its uk subsidiaries these accounts are subject to a right of setoff
the performance guarantees and indemnities have been entered into in the normal course of business a liability would only arise in the event of the group
failing to fulfil its contractual obligations
k capital risk management in the company
the company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure
in order to maintain or adjust the capital structure the company may adjust the amount of dividends paid to shareholders return capital to shareholders or
issue new shares
the company’s net funds at the balance sheet date were
2007 2006
total borrowings 5457 2894
cash and cash equivalents 20753 16548
company net funds 15296 13654 annual report 
 accounts 2007 78
ten year trading history
2007 2006 2005 2004 2004 2003 2002 2001 2000 1999 1998
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
ifrs ifrs ifrs ifrs uk gaap uk gaap uk gaap uk gaap uk gaap uk gaap uk gaap
continuing 
operations 235688 206709 174839 146883 146883 135964 129677 119322 103945 112937 98103
discontinued 
operations – ––––– 3783 4367 3935 4598 3337
revenue 235688 206709 174839 146883 146883 135964 133460 123689 107880 117535 101440
cost of sales 127748 115603 95358 79097 79030 72046 71875 65877 59021 63626 54311
gross profit 107940 91106 79481 67786 67853 63918 61585 57812 48859 53909 47129
overheads 52553 46017 42951 37354 37996 36808 35863 33532 29108 27949 23567
operating profit 55387 45089 36530 30432 29857 27110 25722 24280 19751 25960 23562
continuing 
operations 55387 45089 36530 30432 31150 28415 26553 24733 20478 26358 23822
discontinued 
operations – ––––– 474 574 309 497 59
operating profit 
before amortisation 
of goodwill 55387 45089 36530 30432 31150 28415 27027 25307 20787 26855 23881
amortisation 
of goodwill – – – – 1293 1305 1305 1027 1036 895 319
operating profit 55387 45089 36530 30432 29857 27110 25722 24280 19751 25960 23562
exceptional items – –––– 597 –––––
net interest receivable 1866 972 127 1074 634 461 440 563 831 987 1845
profit before taxation 57253 46061 36657 31506 30491 28168 26162 24843 20582 26947 25407
tax expense 17957 14728 12043 10508 10591 9469 8868 8539 7110 9477 9063
profit for the year 39296 31333 24614 20998 19900 18699 17294 16304 13472 17470 16344
dividends 24732 24140 13437 17751 17955 12592 11959 11147 10504 10546 9456
basic earnings 
per share 456p 364p 286p 245p 232p 218p 201p 189p 156p 203p 189p
basic earnings 
per share before 
goodwill 
amortisation – – – – 247p 233p 216p 201p 168p 213p 193p
diluted earnings 
per share 452p 361p 284p 243p 230p 217p 200p 189p 156p 203p 189p
the above ten year history has not been restated to apply ifrs to all periods had this exercise been undertaken the major changes would have been the
removal of amortisation of goodwill and the introduction of amortisation of separable intangibles capitalisation and amortisation of development costs and
charges for share based payments dividends shown in the ifrs columns are on a paid basis but in the uk gaap columns are on an accrued basis annual report 
 accounts 2007 79
shareholder information
dividend information
the table below details the amounts of interim final and additional dividends
declared in respect of each of the last five years 
share register information
the tables below show the split of shareholder and size of shareholding in rotork plc
number of number
range shareholders  of shares 
11000 1154 478 480870 05
10012000 400 166 597004 07
20015000 379 157 1200461 14
500110000 142 59 1011923 12
1000150000 175 72 3700937 43
50001100000 59 24 4144412 48
100001  107 44 75335667 871
number of number
holder holdings  of shares 
individuals 1685 697 3290750 38
bank or nominees 660 273 81787163 946
pension fund 1 01 3256 01
other company 51 21 1109698 12
other corporate body 19 08 280407 03
source equiniti
additional
interim final interim total
dividend dividend dividend dividend
p p p p
2007 770 1400 930 3100
2006 650 1165 1160 2975
2005 590 990  1580
2004 535 970 585 2090
2003 525 950  1475
corporate directory
company secretary
stephen rhys jones
registered ofﬁce
rotork plc
brassmill lane
bath ba1 3jq
company number
578327
registrars
equiniti
the causeway
worthing
west sussex bn99 6da
stockbrokers
ubs investment bank
1 finsbury avenue
london ec2m 2pp
financial advisers
ubs investment bank
1 finsbury avenue
london ec2m 2pp
auditors
kpmg audit plc
100 temple street
bristol bs1 6ag
financial public relations
financial dynamics limited
holborn gate
26 southampton buildings
london ec2a 1pb
solicitors
messrs osborne clarke
no2 temple back east
temple quay
bristol bs1 6eg
financial calendar  
3 march 2008
preliminary announcement of annual results for 2007
16 april 2008 
exdividend date for final proposed 2007 dividend
18 april 2008
record date for final proposed 2007 dividend
2 may 2008
annual general meeting held at rotork house 
brassmill lane bath ba1 3jq
9 may 2008 
payment date for final proposed 2007 dividend
25 june 2008
exdividend date for 2008 additional interim dividend
27 june 2008 
record date for 2008 additional interim dividend
18 july 2008 
payment date for 2008 additional interim dividend
5 august 2008 
announcement of interim financial results for 2008 directory
united kingdom
rotork plc england
holding company
roger lockwood
chairman nonexecutive
bill whiteley
chief executive
tel 44 1225 733200
fax 44 1225 733381
email billwhiteleyrotorkcouk
rotork controls ltd england
100 owned by rotork plc
peter france
managing director
tel 44 1225 733200
fax 44 1225 733381
email peterfrancerotorkcouk
valvekits england
a division of exeeco ltd
david littlejohns
managing director
tel 44 1623 440211
fax 44 1623 440214
email dlittlejohnsrotorkgearscouk
rotork overseas ltd england
100 owned by rotork plc
robert slater
director
tel 44 1225 733200
fax 44 1225 733381
email robertslaterrotorkcouk
exeeco ltd england
100 owned by 
rotork controls ltd
david littlejohns
managing director
tel 44 113 256 7922
fax 44 113 256 3556
email dlittlejohnsrotorkgearscouk
americas
rotork inc usa
100 owned by rotork overseas ltd
robert arnold
director
tel 1 585 247 2304
fax 1 585 247 2308
email bobarnoldrotorkcom
rotork process control usa
a division of rotork controls inc
derek olson
general manager
tel 1 414 461 9200
fax 1 414 461 1024
email dolsonjordancontrolscom
rotork controls de venezuela sa
venezuela
100 owned by rotork overseas ltd
edgar vina
general manager
tel 58 212 952 4276
fax 58 212 953 6886
email edgarvinarotorkcomve
rotork controls inc usa
100 owned by rotork inc
robert arnold
president
tel 1 585 247 2304
fax 1 585 247 2308
email bobarnoldrotorkcom
rotork controls canada ltd
canada
100 owned by rotork overseas ltd
chris bone
president
tel 1 403 569 9455
fax 1 403 569 9414
email chrisbonerotorkca
rotork do brazil brazil
100 owned by rotork overseas ltd
emilio osterling
director
tel 55 21 2221 7400
email emilioosterlingrotorkcom
europe
rotork motorisation sas france
100 owned by rotork overseas ltd
bruno deverly
general manager
tel 33 143 11 15 50
fax 33 148 35 42 54
email brunodeverlyrotorkfr
rfs melle germany
a division of rotork controls
deutschland gmbh
burkhard wollborn
general manager
tel 49 5422 94140
fax 49 5422 941410
email burkhardwollbornrfspcide
rotork gears bv  netherlands
100 owned by rotork gears
holdings bv
johan mostert
general manager
tel 31 53 538 8677
fax 31 53 538 3939
email johanmostertrotorkgearsnl
rotork controls italia srl italy
100 owned by rotork overseas ltd
renato vezzoli
general manager
tel 39 0245 703300
fax 39 0245 703301
email renatovezzolirotorkit
rotork fluid system srl italy
100 owned by rotork overseas ltd
stefan davis
director
tel 39 0583 93061
fax 39 0583 934612
email stefandavisfluidsystemit
rotork rus russia
100 owned by rotork overseas ltd
ilya lavrov
general sales manager
tel 7 495 234 9125
fax 7 495 645 2147
email rotorkrussiamtunetru
rotork controls deutschland
gmbh germany
100 owned by rotork overseas ltd
jürgen vogel
general manager
tel 49 2103 95876
fax 49 2103 54090
email jurgenvogelrotorkde
rotork bv  netherlands
100 owned by rotork overseas ltd
frank koopmans
general manager
tel 31 10 4146911
fax 31 10 4144750
email frankkoopmansrotorknl
rotork gears holdings bv 
netherlands
100 owned by rotork overseas ltd
johan mostert
general manager
tel 31 53 538 8677
fax 31 53 538 3939
email johanmostertrotorkgearsnl
rotork gears italia srl italy
100 owned by rotork controls 
italia srl
roberto boldorini
general manager
tel 39 033 155 2128
fax 39 033 155 3147
email robertoboldorinirotorkgearsit
rotork controls iberia sl spain
100 owned by rotork overseas ltd
joaquin pastorvelasquez
general manager
tel 34 94 676 6011
fax 34 94 676 6018
email joaquinpastorrotorkes
remote control sweden ab
sweden
100 owned by 
rotork overseas ltd
åke bäckman
general manager
tel 46 23 587 00
fax 46 23 587 45
email akebackmanremotecontrolse
80
annual report 
 accounts 2007  rest of the world
rotork africa pty ltd 
south africa
100 owned by rotork overseas ltd
karl rautenbach
general manager
tel 27 11 4539741
fax 27 11 4539894
email karlrautenbachrotorkcoza
rotork thailand ltd thailand
100 owned by rotork inc
chaitawat chotikawanish
manager
tel 66 2 530 2420
fax 66 2 530 2106
email chaitawcrotorkcoth
rotork actuation sdn bhd
malaysia
100 owned by rotork overseas ltd
aaron ow
general manager
tel 60 3 5191 3936
fax 60 3 5191 3937
email pkowrotorkcommy
rotork ltd hong kong
100 owned by rotork overseas ltd
eric li
general manager
tel 852 2 5202390
fax 852 2 5289746
email ericlirotorkcomcn
rotork trading shanghai 
co ltd china
100 owned by rotork controls ltd
eric li
general manager
tel 86 21 544 52910
fax 86 21 544 52912
email ericlirotorkcomcn
rotork japan co ltd japan
100 owned by rotork overseas ltd
masaru sakurai
general manager
tel 81 3 5632 2941
fax 81 3 5632 2942
email msakurairotorkcojp
rotork fluid system pty ltd
australia
100 owned by rotork overseas ltd
lyndon dean
general manager
tel 61 3 9729 8882
fax 61 3 9729 8884
email lyndonrfsaustraliacom
rotork controls india ltd india
100 owned by rotork controls ltd
ashok jayaram
president
tel 91 44 2625 4219
fax 91 44 2625 7108
email ashokjayaramrotorkcoin
rotork malaysia sdn bhd
malaysia
100 owned by rotork overseas ltd
aaron ow
general manager
tel 60 3 5192 8812
fax 60 3 5192 8821
email pkowrotorkcommy
rotork controls singapore pte ltd
singapore
100 owned by rotork overseas ltd
philip seah
general manager
tel 65 64571233
fax 65 64576011
email philipseahrotorkcomsg
rotork actuation 
shanghai co ltd china
100 owned by rotork controls ltd
bruce wang
general manager
tel 86 21 6434 8388
fax 86 21 6434 8266
email brucewang
rotorkshanghaicomcn
rotork controls 
korea co ltd south korea
100 owned by rotork overseas ltd
s w chun
general manager
tel 82 31 768 8151
fax 82 31 768 8156
email swchunrotorkcokr
rotork australia pty ltd australia
100 owned by rotork overseas ltd
lee howard
general manager
tel 61 353 381566
fax 61 353 381570
email leehowardrotorkcomau
shenzhen sinopecrotork
actuation co ltd china
35 owned by rotork controls ltd
81
annual report 
 accounts 2007 
designed and produced by merchant in collaboration with ammunition 
typeset origination by bettina brux
contents
01  financial  operational highlights
02  group at a glance
04  chairman’s statement
06  chief executive’s business review
14  rotork site services
16  research  development
18  statement of principal risks  uncertainties
20  quality and environmental
22  growth opportunities
24  board of directors
26  report of the directors
28  corporate governance
31  corporate social responsibility
34  remuneration report
41  independent auditors’ report
42  consolidated income statement
42  consolidated statement of 
recognised income and expense
43  consolidated balance sheet
44  consolidated statement of cash flows
45  notes to the group financial statements
73  rotork p lc company balance sheet
74  notes to the company financial statements
78  ten year trading history
79  shareholder information
80  directory
rotork ar coverlayout 1  28308  1238  page 2 annual report 
 accounts 2007
rotork plc 
rotork house brassmill lane
bath ba1 3jq 
wwwrotorkcom
rotork p lc annual report  accounts 2007
rotork ar coverlayout 1  28308  1238  page 1


Summary:
 chief executive’s business review for over 10 years
rotork has been the world leader in actuation solutions
for the oil  gas power and water  waste water
treatment sectors of the capital goods market 
business overview
for over 10 years rotork has been
the world leader in actuation
solutions for the oil  gas power
and water  waste water
treatment sectors of the capital
goods market our products are
also used in a wide range of
applications in a variety of
industries including shipboard
control systems ventilation and 
air handling control rotork is a
genuinely global business with
both marketing and production
operations across the world 
we are known for our ability to
support customers in the ﬁeld at
very short notice from our own
resources rotork has a reputation
for innovative solutions to
complex problems and our
product development history 
has shown a pattern of improving
the efﬁciency quality and cost
effectiveness of the product
through the application of
technology this and a constant
drive to improve customer
support has lead to us being 
the number one heavy duty
actuator group in the world 
we are structured around 
three divisions
rotork controls the original
and largest division supplying
high quality state of the art
electric actuator products for
controlling industrial valves
rotork fluid systems 
which supplies heavy duty
pneumatic and hydraulic valve
actuators for operation in plant
control emergency shut 
down and other critical
applications primarily for 
the oil  gas sector
rotork gears a world leader 
in the supply of gearboxes
adaptors and ancillaries for 
the valve industry
rotork supports customers across
the world mainly through directly
owned operations we have 14
production plants internationally
and multiple direct sales and
support operations in 22 countries
this together with an extensive
network of indirect sales ofﬁces
gives total coverage of our
customers and markets globally
we have around 12000 
active customers 
the key drivers for the group’s
businesses relate to investment in
oil  gas power generation and
water  waste water installations
around the world with demand
being generated by new and
expanded capacity upgrades to
existing facilities and replacements
this is often linked to projects
which are aimed at improving 
the efﬁciency safety and
environmental performance of
plants valve actuators are critical
components and their longterm
reliability and performance is
extremely important to users 
they also act as a key interface
between plant control systems and
related hardware rotork’s
reputation for quality worldwide
support and technical innovation 
is crucial to its leadership position
in the ﬁeld the broad geographic
spread of our operations and
applications means that we have a
large number of repeat customers
around the world and no one
customer accounts for more than
5 of our revenue in any year
business strategy
the objective of rotork plc is to
increase shareholder value by
developing its leadership position
in worldwide valve actuator
activities the group’s businesses
are focused on the specialist area
of valve automation the origins 
of the company go back to the
1950s and over its 50 years in this
business rotork has continued to
build on its reputation as an
innovator of new concepts in this
ﬁeld and has provided users with
increasing levels of functionality
performance and assurance our
strategy of providing modern
innovative products that leverage
technology while remaining
focussed on the technical
applications that our customers
need has enabled us to provide
quality solutions to the industries
that we serve we have been able
to do this partly as a result of our
methodology of selling directly to
our end user customers and their
technical advisers this ensures
that where possible plant
speciﬁcations have the correct
products for the application and
support the customer’s need for
plant efﬁciency and control
rotork’s focus on 
technical applications 
that our customers need 
has enabled us to provide 
quality solutions to the 
industries we serve 
location headquarters 
bath uk
240
220
200
180
160
140
120
100
80
60
40
20
0
1469
1748
2067
2357
2004 2005 2006 2007
group revenue £m
06
annual report 
 accounts 2007  bill whiteley
chief executive
29 february 2008 chief executive’s business review continued
the group’s recent strategy has
focused on opportunities to
leverage our leadership position 
in heavy duty electric actuation
into other closely associated areas
of valve automation key
programmes relate to the
development of products and
control systems marketing
initiatives creating service revenue
opportunities and driving cost
reductions relating to these
businesses the most important
current product initiative relates 
to the development of our range
of actuators aimed at the process
control market which is referred
to further in the research 
development section
year under review
in 2007 rotork celebrated its 
50th anniversary in style with 
end user and geographic markets
very active throughout the year
the rate of investment in
infrastructure in energy and water
projects continued to increase
which beneﬁted all three of our
operating divisions overall order
intake was up 126 and revenue
up 140 the order book
increased to £976m which is
285 up on the start of 2007
proﬁt before tax was up 243
return on sales as deﬁned on
page 11 a key performance
indicator of the business increased
to 243 from 223 last year
rotork controls
revenue from our electric actuator
division rotork controls increased
by 111 to £1642m while
operating proﬁt rose by 176 to
£435m at constant currencies
these increases would have been
154 and 237 respectively 
as a percentage of unit actuator
order input the principal markets
for electric actuators were oil 
gas 39 2006 40 water 22
19 power 31 32 and
miscellaneous 8 9 as can 
be seen the end user markets 
were similar to the prior year but
with an above average increase in
the number of actuators going
into the water market this 
was driven by growth in the
markets worldwide and improved
penetration in some key markets
uk operations
we continued to see good levels
of business emanate from the 
uk with the water market
beneﬁting from amp4 investment
requirements laid down by 
the regulator and the power
market from the large combustion
plant directive
there was a strong sales and proﬁt
performance from the main electric
actuator assembly plant in bath
which was assisted by continuing
sourcing initiatives limiting the cost
of component increases we are
looking for additional initiatives 
in 2008 to continue to mitigate
cost pressures
europe
the european sales and support
companies all increased proﬁts
from the prior year with
particularly strong performances 
in italy and germany europe
accounted for 16 of the total
input units against 13 in 2006
work on existing oil  gas
installations was active throughout
the region in particular we
beneﬁted from increased
investment in oil and product
storage facilities our business in
the water market in continental
europe also continued to grow
with our french subsidiary making
encouraging progress elsewhere
our relatively new russian sales
company continued to develop its
business while the dutch company
doubled the size of its facility to
enable it to expand its factory ﬁt
and site service capabilities 
the european businesses also
beneﬁted from increased business
from valvemakers in their
territories the italian valvemakers
in particular had extensive order
books built on the high level of
worldwide energy projects
particularly those being built in 
the middle east
200
180
160
140
120
100
80
60
40
20
0
1093
1285
1478
1642
2004 2005 2006 2007
controls revenue £m
08
annual report 
 accounts 2007  the americas
rotork controls inc had a number
of challenges entering 2007 which
included a high hurdle set by its
prior year proﬁt performance a
softening us and an economy
which was displaying weaknesses
in some areas against this
background the company
performed well and continued 
to beneﬁt from investment in
water  waste water treatment
facilities it also beneﬁted from the
us valve industry’ s competitiveness
on international projects us
process controls saw a good
recovery of its business mainly
based on improved sales to the
power companies 
the canadian company had a
disappointing year due to slower
than expected project activity
especially in the west the
venezuelan subsidiary continued
to face difﬁcult challenges in what
is potentially a promising market
for our products
for the americas order input in
units increased in total but reduced
to 16 from 17 of the group
asia paciﬁc and the rest 
of the world
asia continued to be a major
engine for growth for the business
asia paciﬁc accounted for 50 of
the input of electric actuators up
from 49 last year china
continued to be the most
important contributor with
increased levels of business 
the indian market maintained the
high levels of business seen in
2006 driven by investment in
power generation and large
reﬁnery projects our electric
actuator manufacturing plants in
kuala lumpur shanghai chennai
and bangalore all performed well
and achieved increases in proﬁts
elsewhere the singaporean
malaysian and thai sales
companies all saw increased levels
of business as did those in japan
and korea the latter did well to
overcome some local difﬁculties
and ended the year with a
stronger operation 
the australian operation
continued to perform well while
the turnaround in the fortunes of
our south african company which
made a loss in the prior year was
also most encouraging
rotork fluid systems
rotork fluid systems which
designs assembles and markets
pneumatic and hydraulic valve
actuators continued to achieve
exceptional growth the main
markets served by our products 
are oil  gas related and unlike
electric actuators the majority are
used on upstream applications
transmission and lng plants 
terminals these markets continue
to beneﬁt from high levels of
investment a notable success was
winning substantial orders on the
very large shell gtl ‘gas to
liquids’ pearl project in qatar 
the principal assembly plant is
based in lucca italy with products
also assembled in rochester ny
and melle in germany the division
had two longterm key
performance goals firstly to
achieve 20 of group revenue
and secondly a 15 return on
sales it just achieved both of these
objectives this year having
narrowly missed the revenue target
in 2006 19 and increased
return on sales from 133 to
150 in 2007 this is despite its
main cost base being in euros and
the eurodollar rate having
averaged 138 against a prior
year of 126
order input was 346 up on 
the prior year while revenue
increased by 183 to £479m
and operating proﬁt was up
333 to £72m
50
45
40
35
30
25
20
15
10
5
0
238
323
405
479
2004 2005 2006 2007
fluid systems revenue £m
09
annual report 
 accounts 2007  chief executive’s business review continued
the italian operation performed
very well and we increased our
investment in the facility improving
the ofﬁce area and installing an
upgraded erp system both there
and in the plant in melle 
the product range was extended
and improved while further
progress was made in gaining
additional customer and market
approvals the division had
increasing success on projects
requiring engineered solutions
particularly in the electrohydraulic
‘eh’ gas over oil linear and
subsea product areas a notable
success was the large eh order for
the aramco khurais project in
saudi arabia the us operation
also beneﬁted from the upsurge in
engineered solutions business 
the division’ s global capabilities
continued to be enhanced mainly
through the development of the
group’ s worldwide sales companies
and ofﬁces among these the uk
based operation in leeds and the
spanish ofﬁce had excellent results
the acquisition of remote 
controls sweden was completed
on 30 january 2008 for a
consideration of £13m this
company which is based in falun
sweden was established in 1961
and has a worldwide reputation
for supplying high quality lower
torque actuators to a wide array 
of markets these products
complement the mainly heavy 
duty products of the existing rfs
ranges and will be sold through
rotork’s worldwide network of
sales ofﬁces
the acquisition of the drallim svm
partial stroke and valve monitoring
patented product for £630k on 
13 february 2008 provides the
division with a platform to further
develop products for safety critical
applications rotork has sold the
svm product for some years and
sees the demand for this type of
diagnostic system increasing due
to its ability to improve plant safety
and productivity while also
reducing plant capital costs
rotork gears
rotork gears manufactures
gearboxes adaptors and other
ancillary devices for industrial
valvemakers worldwide through
these valvemakers it serves a wide
variety of end user industries
rotork gears achieved growth 
well above our plans and beneﬁted
from an active worldwide valve
market especially in europe and
america and investment in its
worldwide operations and supply
chain revenue was up 313 to
£319m and operating proﬁt was
up 565 to £73m the star
performers were the two main
plants in leeds and losser in 
the netherlands both achieved
signiﬁcant growth in revenue 
and proﬁts
much work and investment was
centred on the new chinese
facility which met an ambitious
production target and achieved a
number of important milestones
including the assembly of the
updated 232 aluminium range 
of units and further progress 
was made in opening up the 
asian market
the engineering team was re
organised to create a dedicated
rd resource and progress was
made with a number of important
product initiatives new or
improved product ranges will be
launched in 2008
one of the key objectives for the
coming year will be to develop the
existing operations those already
mentioned plus the operation in
italy ﬁrstly to ensure that the
business continues to increase
capacity to improve service levels
to our customers secondly to
make sure that opportunities to
rationalise production and reduce
costs are delivered
key performance indicators
‘kpis’
rotork has a culture of customer
service and support and this ethos
is reﬂected in the way that the
business is controlled on a day to
day basis we manage the
operations through targets
primarily related to trading
activities and have well established
systems and procedures to support
this kpis have long been used to
aid management in monitoring
progress in achieving its objectives
most targets are ﬁnancial kpis but
more recently we have developed
a similar approach to non ﬁnancial
issues connected with areas such
as environmental matters and
health  safety 
rotork’s philosophy of product
assembly only using sub
contractors to manufacture
components gives signiﬁcant
ﬂexibility in the production model
and kpis assist in monitoring 
the efﬁciency of this model
management’s focus is on what
we regard as the high added value
activities of design marketing and
management control this means
that our approach to measuring
performance is oriented towards
success in penetrating the markets
in which we operate the
development and proﬁtability of
our products a desire for a high
return on capital and strong cash
generation we have produced
consistent improvement in
performance in these measures
through the year under review
35
30
25
20
15
10
5
0
178
191
243
319
2004 2005 2006 2007
gears revenue £m
10
annual report 
 accounts 2007  the group uses a range of
indicators to assess performance at
individual company divisional and
group level the following are the
main key performance indicators
at group level showing four years
performance and explanation
where appropriate of issues
underlying some of the measures
financial kpis
growth of the business market
penetration and quality of earnings
are crucial target areas for rotork
and we have a number of
measures of performance used
throughout the rotork
organisation revenue growth is 
a simple but effective measure of
our performance against our
objectives in this area and
supported by the relationship of
our net proﬁt to sales and the
growth in earnings per share
provides a small but powerful
range of ratios that enable
management to quickly view the
performance of the business and
drill down to divisional level and
below to view returns with an
asset light business model we
have a target of growth in return
on capital which provides an
effective view of balance sheet
performance and each of the
divisional businesses review this
conversion of proﬁt into cash has
a high priority within the group
and is embedded within reward
schemes at divisional management
as well as group level
sales revenue growth
this is reported in detail for all
operating businesses and is a key
driver in the business these
measures enable us to track our
success in speciﬁc project activity
and our progress in increasing 
our market share by products 
and region this also is an
important driver in our product
development programme 
return on sales
this is calculated as proﬁt before
tax after ﬁnancing and interest
shown as a percentage of sales
revenue this measure brings
together the combined effects 
of procurement costs and pricing
as well as the leverage of our
operating assets our overall aim 
is for continuous improvement
over time notwithstanding the
impact of currency
cash generation
the conversion of proﬁt into cash is
an important measure for rotork
this is calculated as the ratio of
operating cash ﬂow to operating
proﬁt operating cash ﬂow is
deﬁned as the movement in cash
and cash equivalents adjusted to
add back cash ﬂows from
ﬁnancing activities the acquisition
of subsidiaries income taxes paid
exceptional cash outﬂows and less
interest received it is used
internally as a measure of
performance where a target of
85 is regarded as a base level of
achievement this also forms one
of the constituent parts of the
reward system where management
is incentivised to achieve a
performance beyond this level 
return on capital employed
rotork has an asset light business
model by design and reporting
this ratio internally helps
management at group level to
monitor our adherence to this
philosophy the calculation shows
proﬁt before tax as a percentage
of capital employed capital
employed is deﬁned as
shareholders’ funds less net cash
held and the pension deﬁcit net of
related deferred tax is added back
240
220
200
180
160
140
120
100
80
60
40
20
0
80
190
182
140
2357
2007
2067
2006
1748
2005
1469
2004
sales revenue £m growth 
26
24
22
20
18
16
14
12
10
8
6
4
2
0
243
223
210
214
2007 2006 2005 2004
return on sales 
110
100
90
80
70
60
50
40
30
20
10
0
99
102
101
86
2007 2006 2005 2004
cash generation 
11
annual report 
 accounts 2007 
90
80
70
60
50
40
30
20
10
0
79
69
54
53
2007 2006 2005 2004
return on capital 
employed  chief executive’s business review continued
eps growth
the measurement of earnings 
per share reﬂects all aspects of the
income statement including
management of the group’s 
tax rate we aim to increase eps
each year
nonﬁnancial kpis
we monitor nonﬁnancial areas 
in our businesses particularly in 
the environmental health  safety 
and quality control areas and 
put strong emphasis within our
organisation on improving our
performance here
waste recycling
this kpi measures the proportion
of total waste produced which 
is recycled we have an active
programme aimed at reducing 
our environmental footprint
throughout the organisation 
we collect this information
through regular submissions
through our extranet site 
dividends
rotork is a cash generative
business and has a policy of
returning funds to shareholders
where they are not required for
reinvestment in the business in the
foreseeable future the board’s
policy is one of increasing
dividends generally in line with
earnings in recent years where
there has been excess cash in the
business this has been distributed
back to shareholders in the form
of additional dividends in the year
under review cash generation has
been good and the board is
recommending to shareholders
that the ﬁnal dividend for 2007 
be 140p per share which is an
increase of 20 over the prior
year in addition the board is
intending to pay an additional
interim dividend for 2008 of 
115p per share representing the
distribution of £10m of excess
cash this will be paid to
shareholders on 18 july 2008 to
shareholders on the register on 
27 june 2008
treasury
the group’s treasury function in
bath manages ﬁnancial risk
relating to foreign currency
exposure debtor risk and cash
movements within the group 
rotork is affected by movements
in world currencies and aims to
mitigate the effect of this through
the diversity of location of
production units as well as taking
action through derivative
instruments the main currency
exposure results from trading
transactions between our
production plants and trading
companies and customers around
the world this exposure is covered
by simple forward cover derivative
instruments aimed at protecting
known income streams no
speculative or non trading hedging
takes place within the group 
the impact of currency on the
results of the group can best be
seen by converting the 2007 results
to the effective exchange rates for
2006 so comparing results at
constant currency see table below
overall we believe that proﬁt for
the year would have been
approximately £28m higher if the
2006 exchange rates had prevailed
the increase in operating proﬁt
reported as 228 would have
shown an increase of 290 at
constant currency weighted
average rates for translation of 
our two main trading currencies 
for the last few years are shown 
in the table below
receivables management is done
at each operating business unit 
but controlled centrally in bath
there is commonality in our
customer base across many of the
geographic units and debts outside
the uk are insured centrally on 
a limit per customer basis and this
operates across the operating
divisions overall we believe a level
of 65 days sales outstanding for
receivables is appropriate for 
our mix of business at the year
end this ﬁgure was 60 days an
improvement of 2 days compared
with 2006
30
25
20
15
10
5
0
253
273
167
52
2007 2006 2005 2004
eps growth 
60
50
40
30
20
10
0
57
46
38
2007 2006 2005
waste recycling 
operating profit at constant currency
2007 2006
£m £m
operating profit as reported 554 451
translation impact 05 –
transaction impact 23 –
operating profit at 2006 rates 582 451
weighted average rates
us dollar euro
2002 152 158
2003 166 144
2004 183 146
2005 180 146
2006 184 147
2007 201 145
12
annual report 
 accounts 2007  pension schemes
over the last few years there has
been a lot of focus on pension
schemes particularly company
liabilities relating to under funded
legacy deﬁned beneﬁt schemes
rotork’s uk ﬁnal salary scheme
was closed to new entrants in
2002 when a deﬁned contribution
scheme was opened for employees
joining from the beginning of
2003 the group has made
additional contributions into the
uk ﬁnal salary scheme between
2004 and 2007 and the scheme
had its latest actuarial valuation
review during 2007 the results of
this showed it was 98 funded
on an actuarial basis which is
precisely the position that the
additional contributions were
aiming to achieve and it is now
felt that the scheme is back in
equilibrium the main issue for
schemes of this type in recent
years has been the effect of longer
life expectancy the fact that
pensions in payment will have to
be paid for longer as people
expect to live longer this issue
could continue to affect schemes
as mortality assumptions evolve
further over the next few years
however management and the
pension scheme trustees with the
advice of the scheme actuary
consider that the potential for
adverse mortality assumptions to
impact the scheme further is
controllable within the current
range of contributions
the impact of improved mortality
is not presently anticipated to have
an impact on cash contributions
beyond normally expected funding
levels in terms of the charge to
the income statement under ifrs
these assumptions will have an
impact as a result of the last
actuarial valuation by increasing
the charge against proﬁt the
charge against proﬁt before tax
will increase to around £16m in
2008 compared with the charge
of £07m in 2007
rotork community
rotork celebrated its 50th year of
incorporation with a number of
marvellous events which were
attended by both past and present
employees as well as others who
have had much to do with the
group’s success we also
celebrated this milestone with a
publication which drew very
positive comments from a wide
group of stakeholders 
the events demonstrated the
commitment and affection 
that everyone has for the
organisation which makes it such 
a formidable presence in its ﬁeld 
i have enormously enjoyed every
aspect of my involvement with
rotork over the past thirtyfour
years and feel very privileged to
have led it over the past twelve
rotork has always had a unique
spirit which i feel conﬁdent under
the talented leadership of peter
france will propel it to even
greater success i would like to
thank all of our employees around
the world for their dedication skill
good humour and friendship and it
is them that i will miss most when i
retire on 2 may
13
annual report 
 accounts 2007