annual report 2005
proﬁtable growth through technology
website
for further information on
tomkins please access our
website at
wwwtomkinscouk
corporate office 
registered office
tomkins plc
east putney house
84 upper richmond road
london sw15 2st
tel 020 8871 4544
fax 020 8877 9700
tomkins plc annual report 2005 review 2005
01 financial highlights
02 group overview
04 chairman’s statement
06 chief executive’s statement
08 business case studies
operating and financial review
14 overview of principal markets
16 overview of industrial 
 automotive
18 overview of building products 
20 corporate social responsibility 
28 financial review
governance
46 board of directors
48 directors’ report
50 remuneration committee report
56 audit committee report
58 corporate governance report
62 internal control
financial statements
64 consolidated financial statements 
prepared in accordance with ifrs
108 firsttime adoption of ifrs
122 additional financial information
124 reconciliation of ifrs to us gaap
128 consolidated financial statements
prepared in accordance with 
us gaap
167 financial statements of the 
company prepared in accordance
with uk gaap
investor information
181 group five year summary
182 subsidiaries and associates
183 general information
184 notice of meeting
185 share price information
185 financial calendar
contents
tomkins plc is a worldclass global engineering and
manufacturing group with market and technical
leadership across its two business groups industrial 
 automotive and building products
tomkins is executing a focused growth strategy 
targeting three key growth areas power transmission
aftermarket and building products and is driven by 
an entrepreneurial culture and incentivised employees
the businesses operate in a variety of endmarkets and this diversity provides the group with a natural
resilience to a weakness in any one particular market the group is also geographically diverse operating 
in 132 manufacturing facilities and nine research and development facilities in 21 different countries
across north america europe asia and the rest of the world
our businesses
manufacturing facilities
north america 95
europe 17
china 7
rest of asia 7
rest of the world 6
total 132
industrial  
automotive
building products tomkins plc annual report 2005
review 2005
1
2005 2004
revenue £31824m £29741m
proﬁt from operations before restructuring initiatives £3085m £3043m
restructuring initiatives net £118m £180m
proﬁt from operations £2967m £2863m
proﬁt before tax on a comparable basis
1
£2698m £2603m
proﬁt before tax £2577m £2603m
fully diluted earnings per share 2379p 2281p
total dividends per share 1323p 1260p
net debt
2
£3345m £2445m
1
presented on a proforma basis to remove the impact of ias 32 and ias 39 from 2005 see page 33 in the operating and
financial review section for a breakdown
2
net debt is shown excluding the convertible cumulative preference shares
financial highlights
• revenue increased by 70 per cent to £31824 million 2004 £29741 million 
• proﬁt from operations before restructuring initiatives increased by 14 per cent to
£3085 million 2004 £3043 million
• operating margin based on proﬁt from operations before restructuring initiatives was 
97 per cent 2004 102 per cent with doubledigit operating margins maintained in
industrial  automotive and air systems components
• proﬁt from operations at £2967 million 2004 £2863 million was up by 36 per cent
• fully diluted earnings per share were ahead by 43 per cent at 2379 pence 2004 2281 pence
• operating cash ﬂow increased to £2170 million 2004 £1817 million and cash conversion
increased to 753 per cent 2004 640 per cent
• final dividend of 816 pence resulting in a full year dividend of 1323 pence 
2004 1260 pence up by 50 per cent
• completed ﬁve acquisitions with annualised sales of more than 250 million c £140 million
since december 2004
• continued expansion in high growth markets such as china and india
highlights of the year
group revenue 70
0 700 1400 2100 2800 3500
05
2005 2004
04
05 31824
29741
£m
group profit from operations 36
0 70 140 210 280 350
05
2005 2004
04
05 2967
2863
£m
the group reports its results in sterling under international financial reporting standards “ifrs” and in us dollars under us gaap unless
otherwise stated the commentary in this annual report refers to the ifrs ﬁnancial information for the year
commentary on the results compares audited results for the 364day period from 2 january 2005 to 31 december 2005 “2005” with audited
results for the 364day period from 4 january 2004 to 1 january 2005 “2004”
approximately 69 per cent of the group’s revenues arise in the usa financial information has been translated at an average rate of £1182
in the year ended 31 december 2005 £1183 in 2004 the yearend rate at 31 december 2005 was £1172 yearend rate at 1 january
2005 was £1192
in this annual report the term “underlying” indicates that the amount has been adjusted for the effects of currency translation and
acquisitions and disposals and in the case of proﬁt from operations the amount is also stated net of restructuring initiatives some ﬁgures
and ratios mentioned are not readily available from the ﬁnancial information and details of how these ﬁgures and ratios have been arrived at
are set out in the operating and financial review review 2005
group overview
tomkins plc annual report 2005
2
tomkins is organised into two business groups
which operate in a variety of endmarkets
industrial  automotive
the industrial  automotive group manufactures
a wide range of systems and components for the
industrial and automotive markets through ﬁve
principal business areas
the industrial  automotive group represented
722 per cent of tomkins’ revenue in 2005 and
765 per cent of proﬁt from operations before
restructuring initiatives
building products
the building products group manufactures 
a wide range of air handling components
bathware doors and windows and other 
building components for the residential 
and commercial construction industries 
the building products group represented 
278 per cent of tomkins’ revenue in 2005 
and 235 per cent of proﬁt from operations 
before restructuring initiatives
our industrial  automotive brands include
our building products brands include
financial highlights
2005 2004
revenue £31824m £29741m
proﬁt from operations 
1
£3085m £3043m
operating margin 
1
97 102
ebitda margin 
2
134 141
average net operating assets £10505m £8974m
return on average net operating assets 
2
294 339
return on average invested capital 
3
103 116
capital expenditure £1433m £1577m
depreciation £1191m £1159m
capex to depreciation times 12 14
cash generation 
4
£2170m £1817m
cash conversion 
5
753 640
employees 37324 36720
industrial  automotive 72
building products 28
revenue by 
business group
revenue by 
geographic region
industrial  automotive 84
building products 16
average net 
operating assets by
business group
group overview
tomkins plc is a global engineering and manufacturing group listed on the
london stock exchange ticker tomk and the new york stock exchange 
ticker tks in the form of american depositary receipts with revenue of
£31824 million and proﬁt from operations before restructuring initiatives of
£3085 million
the company is the ultimate parent of a large number of subsidiaries that 
are organised into two separate business groups industrial  automotive and
building products both businesses enjoy strong market positions and technical
leadership and own some of the bestknown brands in their respective markets
the group is geographically diverse with 757 per cent of revenue to north
america 135 per cent to europe 69 per cent to asia and 39 per cent to 
the rest of the world there are over 37000 employees in all the regions
north america 76
europe 13
asia 7
rest of world  4
    tomkins plc annual report 2005
review 2005
3
o business groups
f endmarkets
financial highlights
2005 2004
revenue £22986m £21823m
proﬁt from operations 
1 
£2552m £2576m
operating margin 
1
111 118
ebitda margin 
2
152 160
average net operating assets £8918m £7295m
return on average net operating assets 
2 
286 353
return on average invested capital 
3 
102 119
capital expenditure £1195m £1407m
depreciation £951m £905m
capex to depreciation times 13 16
cash generation 
4
£1624m £1324m
cash conversion 
5
687 552
employees 25439 25270
financial highlights
2005 2004
revenue £8838m £7918m
proﬁt from operations 
1
£786m £703m
operating margin 
1
89 89
ebitda margin 
2
116 120
average net operating assets £1703m £1757m
return on average net operating assets 
2
462 400
return on average invested capital 
3
140 126
capital expenditure £238m £163m
depreciation £235m £248m
capex to depreciation times 10 07
cash generation 
4
£583m £812m
cash conversion 
5
757 1201
employees 11750 11307
power transmission 42
fluid power 16
wiper systems 10
fluid systems 10
other industrial 
 automotive 22
revenue by business segment
north america 68
europe 18
asia 9
rest of world  5
revenue by geographic region
automotive original
equipment  29
automotive aftermarket  29
industrial original
equipment  23
industrial aftermarket  15
other  4
revenue by endmarkets
air systems components  55
other building products  45
revenue by business segment
north america  98
europe  2
revenue by geographic region
residential construction  43
industrial  commercial
construction  46
other  11
revenue by endmarkets 
1 before restructuring initiatives
2 based on earnings before interest tax depreciation amortisation and restructuring initiatives
3 return on average invested capital is calculated for total operations before restructuring initiatives 
4 net cash inﬂow from operating activities less net cash outﬂow from capital expenditure before gains on disposal and exit of businesses
5 cash generation to proﬁt from operations before gains on disposal and exit of businesses review 2005
chairman’s statement
tomkins plc annual report 2005
4
in their performance our people are committed 
and enthusiastic although our operations are
geographically diverse and many functions are
decentralised we take great pride in teamwork and
sharing best practice across businesses and regions 
part of tomkins’ strength is its global reach and 
the product and market diversity of its businesses 
we manufacture a variety of products from
synchronous belts for engines to whirlpool baths 
and the key to our progress is that these diverse
businesses are bound together by a common factor 
– manufacturing excellence our geographic spread
across 21 countries together with the range of 
endmarkets we serve make us not dependent 
on speciﬁc industries or regions 
results
in 2005 revenue was up by 70 per cent at £31824
million 2004 £29741 million and proﬁt from
operations before restructuring initiatives rose by
14 per cent to £3085 million 2004 £3043 million
proﬁt from operations at £2967 million 2004 £2863
million rose by 36 per cent fully diluted earnings 
per share were 2379 pence 2004 2281 pence 
cash ﬂow for the year was positive after interest 
tax and dividends despite a signiﬁcant contribution 
to the gates pension fund
dividend
the board has recommended a ﬁnal dividend of 
816 pence per ordinary share which together with
the interim dividend of 507 pence per ordinary share
paid on 14 november 2005 brings the total dividend
for the year to 1323 pence per ordinary share 
an increase of 50 per cent the ﬁnal dividend 
if approved at the annual general meeting will 
be paid on 31 may 2006 to shareholders on the
register at the close of business on 21 april 2006 
we continue to extol the importance of cash ﬂow
generation to our business managers as this supports
our progressive dividend policy 
the board has decided to offer again the dividend
reinvestment plan in respect of this ﬁnal dividend
corporate governance
we aim for the highest standards of governance and
transparency throughout the businesses and in all 
our market operations although the operating 
and financial review reporting statement 1 is not
mandatory we used this as a guide since it will help 
our shareholders to better assess our strategy and goals
over the course of 2005 we made further progress
in preparing for compliance with section 404 of the
we continued to make good progress in what was 
a challenging year for tomkins 
we experienced weaker automotive production
volumes in north america and europe the delay in 
the implementation of the transportation recall
enhancement accountability and documentation
“tread” act the continuing softness of the 
nonresidential construction market for most of 
the year and the effect of two severe hurricanes in 
the southern united states despite these difﬁcult 
endmarkets the group achieved good growth and
operating proﬁt margins this reﬂects the ongoing
commitment of our executive management team
to ﬁnd pragmatic solutions to improve performance
our culture and our company
the introduction of our annual bonus incentive plan 
in 2003 has been a great motivator for our managers
and has contributed to a more entrepreneurial focus 
“during 2005 management dealt efﬁciently with
challenging conditions and produced good results”
david newlands
chairman tomkins plc annual report 2005
review 2005
5
sarbanesoxley act of 2002 which we will implement
fully in the current ﬁnancial year 
as shareholders will be aware tomkins reports 
to the markets on a quarterly basis our quarterly 
press releases are available on our website
wwwtomkinscouk and hard copies can be
requested from irtomkinscouk as we are
committed to keeping our corporate costs low 
we have decided in future in common with a 
number of large public companies to place an
advertisement in the national press and no longer
produce a printed interim report
the board
after ﬁve years with tomkins we are sad to be losing
ken minton and norman broadhurst who will be
retiring from the board at the conclusion of the
company’s annual general meeting on 22 may 2006
following the substantial reduction in the gates
family’s interests in the company marshall wallach
has decided to step down from the board with effect
from 1 may 2006 on behalf of the board and
everyone who had the pleasure of working with them
i would like to thank all three for their outstanding
contribution to the board and our company and 
wish them well for the future
i am pleased to welcome to the board richard
gillingwater head of the uk government’s
shareholder executive struan robertson formerly
chief executive at wates group and david richardson
formerly group finance director at whitbread plc 
who have joined the tomkins board as nonexecutive
directors they bring to tomkins broad and invaluable
experience that will assist the board in its work and we
are looking forward to working with them
employees customers and investors
on behalf of the board i should like to thank all of our
employees for their commitment during the past year
with the support not only of our employees but also
our customers suppliers and business partners we can
continue on our path of sustained proﬁtable growth 
i would also like to thank our investors for their
continuing support of tomkins 
value creation
our strategy remains focused on creating shareholder
value through organic growth geographic expansion
and strategic acquisitions we apply disciplined criteria 
to all potential acquisitions and capital investments 
to ensure that they are expected to enhance value 
a chart seen below shows the total shareholder 
return in the company’s shares for each of the 
past ﬁve years ended 31 december measured 
against the performance of the ftse engineering 
and machinery index
outlook
during 2005 management dealt efﬁciently with
challenging conditions and produced good results
overall the outlook for our markets in 2006 
remains positive by adhering to our strategy of
achieving organic growth geographic expansion 
into higher growth markets and the acquisition 
of value enhancing businesses our strong
management team should again deliver value 
for tomkins shareholders in 2006
david newlands
chairman
dividends per share
2005 2004
50
pence
0 4 8 12 16 20
05 1323
04
05
1260
total shareholder return
0
50
100
150
200
250
300
dec 05 dec 04 dec 03 dec 02 dec 01 dec 00
tomkins ftse engineering  machinery review 2005
chief executive’s statement
tomkins plc annual report 2005
6
a key component of this is new product development
in order to maintain our market leadership 
in 2005 fluid power opened a customer solutions
centre in denver colorado in part to support its
leadership position in the porttoport environment 
in industrial machinery and equipment its patented
quicklok™ product has already captured a leading
market position in leakfree applications
in addition to quicklok™ other innovations 
in 2005 included hurricaneresistant louvers and 
windows in our building products group and several
new power transmission innovations in our 
industrial  automotive group such as variable 
vane transmission pumps sixspeed carrier 
systems and advanced drive belt technology
global market expansion
the gross domestic product “gdp” of china and
india are expected to grow 90 per cent and 68 per
cent respectively in 2006 to further service the
domestic industrial and automotive markets of these
countries we opened two new facilities in china in
2005 increasing our total facilities there to seven and 
one new facility in india increasing our total facilities
there to four geographic expansion in high growth
markets such as india and china either through
greenﬁeld development or through valueenhancing
bolton acquisitions will remain a key focus for 
2006 and beyond
strategic acquisitions
since december 2004 we have added more than 
250 million c £140 million in annualised revenue
through acquisitions of industrial and building products
businesses each of these businesses is meeting or
exceeding the ﬁnancial performance criteria used in
the business plans to justify their acquisition we have
identiﬁed further acquisition opportunities and hope
that we can achieve our stated annual target of 300
500 million c £160£270 million of additional
revenues through acquisitions in 2006
key growth areas
power transmission remains a growth area as industrial
and automotive original equipment manufacturers
“oems” look for innovative new products and the
trend continues in automotive oem outsourcing
governments oems and endusers are increasingly
focused on products that provide fuel economy and
reduced emissions with operationally efﬁcient
products such as our stopstart system variable vane
pumps and sixspeed carrier systems we are ideally
placed to take advantage of this trend
our performance in 2005
in 2005 we increased revenue and proﬁts
notwithstanding difﬁcult endmarket conditions
through our managers’ focus on operational excellence
this included lean manufacturing and new product 
and process innovation as well as the successful
integration of businesses acquired during the year
lean manufacturing initiatives across our businesses
resulted in annual lean savings continuing to run in
excess of £250 million in addition to increasing 
both available ﬂoor space and machine capacity
our managers will continue to focus on operational
excellence with a view to achieving growth in sales
operating margins and returns in excess of our cost 
of capital in the years ahead
new products
strategically our primary objective is the creation 
of shareholder value through the development 
of our businesses 
“our businesses are focused on delivering dynamic growth
in value through new products global market expansion
and strategic acquisitions”
james nicol
chief executive tomkins plc annual report 2005
review 2005
7
industrial and automotive aftermarket revenue showed
good growth in 2005 and is expected to grow steadily
in the future we plan to expand our market share 
by growing our product lines and leveraging our 
strong brand names and distribution network
especially in china where aftermarket sales grew 
in 2005 by 96 per cent
the businesses within our building products 
group performed well in 2005 helped by new 
product introductions such as the lasco “contours
™
”
luxury whirlpool and shower range lasco is one of the
largest manufacturers of bathtubs in the united states
in 2005 we made signiﬁcant investments in our
bathware manufacturing facilities to increase efﬁciency
through robotics and to comply with increased
government emissions requirements through the
installation of concentrators we believe this will give
us a signiﬁcant competitive advantage going forward
in dealing with those national and regional competitors
that have not made these necessary investments
our air systems components group also introduced
a number of new products in 2005 such as the
hurricaneresistant louvers and energy recovery
ventilators and is expected to continue to grow
through product innovation and bolton acquisitions
beneﬁtting from an anticipated upturn in the
commercial construction sector in 2006
market drivers
the 2006 outlook for our endmarkets is mostly
positive in our industrial  automotive group
automotive production is expected to remain ﬂat in
north america and in europe with accelerated growth
in south america and china we expect to beneﬁt
from increased outsourcing of highly engineered
power transmission systems in automotive original
equipment and from a continuing growth in industrial
production – industrial sales becoming increasingly
important as our exposure to automotive original
equipment has decreased to less than 220 per cent of
sales the industrial and automotive aftermarkets are
expected to stay strong
in our building products group the residential
construction market is expected to fall slightly from the
record level of 2005 but to remain very healthy while
commercial construction is expected to grow steadily
over the next few years 
our people
we closely aligned the interests of management 
with those of our shareholders through our annual
bonus incentive plan introduced in 2003 under 
which managers participate in the value creation 
of the businesses they manage this has changed 
our corporate culture by creating an entrepreneurial
spirit within the tomkins group our managers
understand the importance of value creation and in
addition to operational excellence are now focused 
on key growth objectives such as new product
development geographic expansion and acquisitions
looking to the future
our solid performance this year reﬂects our commitment
to strengthen our businesses i am particularly pleased
with the success achieved on our strategic initiatives
including our new product introductions the integration
of our ﬁve recent acquisitions and our expansion 
in china and india the operational initiatives taken
during 2005 should result in our group continuing 
this success and achieving growth in 2006
james nicol
chief executive
diluted earnings per share
2005 2004
43
pence
0 6 12 18 24 30
05 2379
04
05
2281
value creation strategy 10
 revenue growth
geographic 
expansion
strategic
acquisitions
organic 
growth
acquisitions
5
organic growth
5 tomkins plc annual report 2005
8
the quicklok
™
growth story
the fluid power business
fluid power manufactures hydraulic hoses
assemblies connectors and porttoport solutions
that are the arteries and veins of the mobile 
hydraulic equipment used principally in the
construction mining and agricultural industries 
the global business operates in 19 plants in eight
countries fluid power is a leading player in a 
market estimated to be in excess of 25 billion 
with a market share of around 20 per cent
the fluid power market
each year there are over 400 million connections
made in hydraulic equipment and with existing
threaded technology the key issues are the time taken
to make a connection and the difﬁculty in controlling
the process to ensure a leakfree environment fluid
power has responded to the customers’ needs and
developed a new technology known as quicklok
™
that provides a quick and leakfree solution to
hydraulic hose assembly 
what is quicklok
™

quicklok
™
is a family of threadless hydraulic
couplings that have a simple snapin and veriﬁable
connection that eliminates torque and requires no
assembly tools since the process is virtually errorfree
there is a reliable leakfree connection once in place
the assembly cannot be inadvertently disconnected 
or released under pressure which is an important
safety feature
why is quicklok
™
a key growth story
quicklok
™
provides a solution to the problems 
of threaded couplings and will be the product of
choice in a wide range of applications by reducing
installation and maintenance costs quicklok
™
lowers the customer’s cost of ownership dramatically
when compared to threaded assembly 
in 2005 fluid power was awarded 35 million 
of sales of its new quicklok
™
technology and this
contributed to total sales growth in the business of 
106 per cent over 2004 and doubledigit operating
margins looking to 2006 and beyond a number 
of signiﬁcant new quicklok
™
contracts have 
been awarded 
customers who are using quicklok
™
include
major industry names such as gehl bobcat jcb 
and workhorse custom chassis
“we like quicklok
™
because it’s simple easier
to put together and saves on rework which
allows us to produce more machines”
tim wolles from the advanced product group at gehl
easy to service no
special tools needed
no special tools are needed 
to remove the quicklok
™
adaptor from the port – just 
a common wrench
for speedy changeover
live ﬁeld demonstrations showed
that it took one tenth of the time 
to assemble the quicklok
™
connectors compared to the
standard threaded connections
quicklok™ 
in action
quicklok
™
applications
the quicklok
™
family of
connectors is designed to replace
threaded connections in up to 70
per cent of hydraulic equipment
applications such as the mobile
industrial machine shown above
review 2005
business case study
    quicklok
™
– from fluid power
quicklok
™
connections are designed 
to increase productivity and safety
with quick easy leakfree connections review 2005
business case study
tomkins plc annual report 2005
10
the lasco bathware business
lasco bathware is one of the largest manufacturers 
of bathtubs in the united states producing nearly 
a quarter of all bathtubs sold lasco’s products include
luxury whirlpools bathtubs showers and shower
units the business operates from nine manufacturing
facilities across the united states with national
distribution to builders home centres and wholesalers
the bathtub and fixtures market
since 2000 the united states bathtub shower 
and whirlpool baths market has been growing at 
an annual rate of around 30 per cent in 2005 
the overall market was estimated at 19 billion and 
by 2013 is forecast to be around 24 billion with 
a particularly strong annual growth rate in showers
and whirlpool baths the drivers for this growth are
record new housing sales to historic levels and a trend
towards increased remodelling spend with more
people renovating ageing properties and installing
additional baths and showers in their homes
what is the contours
™
range by lasco bathware
by positioning itself at the highend of the product
offering with the contours
™
range lasco bathware 
is gaining market share through both the quality of its
products and design features the contours
™
range 
of baths and showers includes features such as an 
airandwater hydrotherapy system that creates a
stressreducing massage and an inline heater that
guarantees a constant temperature while bathing 
the showers feature steam and body spray systems
and a teak ﬂoor insert to create a spalike environment 
why is the contours
™
range a key growth story
the contours
™
range has created a higher proﬁle
brand recognition of lasco bathware in multiple
market segments the exposure the contours
™
product range received at the international builder
show and the kitchen  bath industry show has
resulted in increased sales in all product categories 
in 2005 lasco bathware achieved 157 per cent
sales growth and doubledigit operating margins 
in part due to the success of the new contours
™
range lasco bathware’s market share is expected 
to grow in 2006 as new products are added to 
the contours
™
line and exposure to the hotel 
and leisure market increases
customers who are featuring the contours
™
product range in their showrooms and new homes
include industry leaders such as ferguson hajoca 
and kb homes
“the contours
™
radius series of baths 
are incredible – we’re placing the new 
contours
™
radius whirlpool in our 
showroom as a featured product”
brenda johnson showroom manager at ferguson
the contours
™
bathware
range growth story
residential housing
lasco bathware manufactures
nearly a quarter of all bathtubs
sold in the united states
contours
™
radius
round bath
the radius round is roomy enough
for two with individual headrests
lumbar jets and therapeutic air
massage with prewarmed bubbles
contours™ range
in action
robotics
lasco bathware is driving
innovation in its business through
the use of robotics to produce its
products a robot is used to spray
gel coat onto the outside layer 
of a nonacrylic bath lumbar jets and sidewall air injectors help
you to relax by concentrating the water
movement and massage action the
electronic panel offers onetouch
functionality for control of the variable
speed blower pump and lighting effects review 2005
business case study
tomkins plc annual report 2005
12
why is innovision
™
beam blade a key growth story
the innovision
™
line continues to grow because trico
is able to offer the latest technology to ﬁt the vast
majority of vehicles on the road today consumers
appreciate the unique styling performance and easy
installation of the beam blade innovision
™
has
created a new premier category in the wiper market 
innovision
™
was launched in 2004 and during 2005
revenue capacity was tripled to meet the continually
rising demand with nearly 26 million units sold
management estimates that in 2006 the beam blade
aftermarket will be approximately 100 million with a
growth rate of 10 per cent in each of the next few years
innovision
™
is currently being supplied to major
names in the north american automotive aftermarket
including canadian tire napa carquest pep boys
fred meyer and o’reilly auto parts
the trico wipers business
trico is one of the world’s largest windscreen wiper
blade manufacturers and a leading producer of wiper
systems trico operates eight plants around the world
supplying customers in 67 countries including general
motors ford daimlerchrysler honda inﬁniti land
rover jaguar and nissan sales to the automotive
aftermarket now represent over 40 per cent of 
trico’s total sales
wiper blade technology
the main requirements of a wiper blade are that it
delivers a consistent wipe and is durable traditional
wiper blades have struggled to deliver the required
performance especially in bad weather conditions
such as snow and ice trico has developed a
revolutionary wiper blade design known as the
innovision
™
beam blade that provides a solution 
to these problems
what is the innovision
™
beam blade
the innovision
™
beam blade features a unique low
proﬁle that reduces wind lift at higher speeds the
blade has an inﬁnite number of pressure points that
provide continuous pressure across the length of the
blade the design of the blade with a jointless structure
also maximises durability and ensures a quieter more
efﬁcient operation innovision
™
blades outperformed
traditional blades in all snow and ice tests
the innovision
™
beam 
blade growth story
“trico has managed to creatively bring
newness and innovation to the wiper 
blade category i have been very pleased
with these new blades both as a retailer
and a consumer and sales have exceeded
my expectations”
monique shepard automotive buyer at fred meyer 
innovision
™
air flow
the unique low proﬁle reduces
windlift at higher speeds of up 
to 115 mph
innovision
™
window
as with all trico blades 
innovision
™
is easy to install 
it comes with a preassembled
connector for simple installation 
on the most popular arm style 
right out of the package
beam blade 
in action
innovision
™
awards
the innovision
™
beam blade won
six awards at the apex global
design awards including two 
best in show innovision
™
blades are designed with 
a jointless structure with only three
main components a laser cut spring
steel beam wiping element and
coupler to maximise durability and
enable a highly efﬁcient operation
the rubber element in the innovision
™
line has a unique proﬁle with two
hinges that dampen noise for a quieter
smoother wipe operating and financial review
overview of principal markets
tomkins plc annual report 2005
market overview
industrial  automotive
automotive original equipment
encompassing power transmission fluid power 
fluid systems wiper systems and other industrial 
 automotive
2005 211 per cent of group sales 
global automotive production in 2005 increased by
39 per cent compared to 2004 according to csm
auto database with a total of 622 million light
vehicles manufactured in north america 
158 million units were produced which was the
same output as in 2004 according to ward’s autos
production volumes at general motors and ford
were down by 84 per cent and 105 per cent
respectively whereas daimlerchrysler increased
volumes by 37 per cent in western europe
production declined by 22 per cent to 158 million
units but in japan and korea production grew by
51 per cent in 2005 there was continued strong
growth in south america and the emerging markets
including china which grew by 140 per cent and
138 per cent respectively 
looking ahead to 2006 csm is forecasting north
american production to remain at the 158 million unit
level western european production to decline by 
15 per cent and production in japan and korea to 
be ahead by 39 per cent the strong growth rate 
seen in 2005 in south america and the emerging
markets including china is forecast to continue into
2006 with an increase in production of 87 per cent
and 116 per cent respectively
automotive aftermarket 
encompassing power transmission fluid power 
fluid systems wiper systems and other industrial 
 automotive 
2005 213 per cent of group sales
the global automotive aftermarket showed steady
growth in 2005 factors such as the weather stock
rebalancing and customer consolidation are all
variables that can impact the market on a quarter
byquarter basis while the hurricanes in the united
states in the third quarter of the year had 
a negative impact with a number of distribution
stores closed a strengthening of both the us and
european markets in the fourth quarter of the year
had a positive impact on the full year in 2006 we
expect the market in north america and europe 
to grow in line with gdp
industrial original equipment 
encompassing power transmission fluid power 
fluid systems and other industrial  automotive
2005 163 per cent of group sales
in 2005 the market continued to show good 
yearonyear growth in all regions total industrial
production as measured by the us federal reserve
was 29 per cent higher and capacity utilisation was
13 per cent higher when compared to 2004 the
construction and mining sectors rebounded strongly
in the ﬁnal quarter of 2005 following the negative
impact of the two us hurricanes earlier in the year
the market is expected to show continuing modest
growth in 2006
14
global automotive production outlook
0
10
20
30
40
50
60
70
80
10 09 08 07 06 05
emerging markets
south america
china
source csm
japankorea
western europe
north america
units million
year
north american industrial production index
100
102
104
106
108
110
112
2005 ip index 2004 ip index
source us federal reserve
dec nov oct sep aug jul jun may apr mar feb jan tomkins plc annual report 2005
operating and financial review
15
industrial aftermarket
encompassing power transmission fluid power 
fluid systems and other industrial  automotive
2005 111 per cent of group sales
the industrial replacement market performed
strongly in 2005 distributors have experienced
strong endmarket demand due to the strength in
us industrial activity predictions are that this market
will remain strong in 2006
building products
residential construction 
encompassing air systems components lasco bathware
and philips
2005 120 per cent of group sales
the us residential construction market recorded
another year of strong growth in 2005 despite
concerns early in the year that the market would
decline the us census bureau recorded residential
building permits on a yeartodate basis of 
21 million an increase of 34 per cent when
compared to 2004 housing starts were up 56 per
cent and completions were up 48 per cent 
in 2006 the national association of house builders
nahb is forecasting the market to be down 
around 65 per cent at 193 million units this
remains a strong market by historic standards 
united states yearonyear change in residential 
and commercial construction spending

20
15
10
5
0
5
10
07e 06e 05e 04 03 02 01 00 99
commercial residential
source cazenove pca and ecowin
nonresidential construction 
encompassing air systems components lasco bathware
and lasco fittings
2005 127 per cent of group sales
the performance of the nonresidential construction
market measured in square footage terms ﬁnished
the year ﬂat compared to 2004 according to the
dodge construction report this indicated a far
stronger performance in the second half of 2005
given that square footage was lower by 95 per cent
in the ﬁrst half the us census bureau measures the
performance in dollar terms and reported that the
market was ahead by 57 per cent it appears that 
a slow recovery in the market has begun and dodge
has forecast a 40 per cent increase in 2006
the remaining 55 per cent of group sales relate 
to other varied markets including recreational
vehicles and manufactured housing
“overall the outlook for our markets 
in 2006 remains positive”
north american residential housing starts 
1200
1400
1600
1800
2000
2200
06e 05 04 03 02 01 00 99 98
source us ceusus bureau and national association 
 ofhome builders
year
units ‘000 operating and financial review
overview of industrial  automotive
tomkins plc annual report 2005
our business
industrial  automotive
16
our business
industrial  automotive
introduction
the industrial  automotive group “ia” manufactures
a wide range of systems and components for the
industrial and automotive markets through ﬁve business
units power transmission fluid power fluid systems
wiper systems and other industrial  automotive 
this group has 85 manufacturing facilities located 
in 21 countries and employs 25439 employees
business descriptions
power transmission
manufactures from various materials accessory drive
belts synchronous timing belts pulleys and tensioners
automatic transmission gear carriers high strength
gears and oil pumps used primarily in automotive
engines and transmissions and also industrial 
belt products
fluid power
manufactures hoses connectors and porttoport
systems used in hydraulics and other liquid transfer
systems used in mobile equipment typically in the
construction mining agriculture food processing 
and railroad markets
fluid systems
manufactures radiator oil and fuel caps engine
thermostats for use in automotive fuel systems and tyre
valves including remote tyre pressure monitoring systems
wiper systems
manufactures windscreen wiper systems and
components for use in the automotive original
equipment market and aftermarket
other industrial  automotive
this includes the manufacture of hose clamps power
steering hose assemblies and air and lubrication
products for use in automotive and industrial markets
axles for the industrial utility market and trailers and
frames used in the recreational vehicle and mobile
home markets and the manufacture and installation 
of material handling systems used in the automotive
postal and bulk handling markets
our endmarkets and customers
the industrial  automotive group sells globally into
the automotive original equipment market “aoe”
the automotive aftermarket “am” the industrial
original equipment market “ioe” and the industrial
aftermarket “iam” sales are diversiﬁed across these
four principal markets as highlighted by the chart
below the ‘other’ markets include the recreational
vehicle market and the manufactured housing market 
general motors the largest customer represents 60
per cent of group sales 2004 69 per cent ford and
daimlerchrysler represent 44 per cent 2004 55 per
cent and 33 per cent 2004 37 per cent respectively
of group sales a list of the top ﬁfteen customers is
shown on the next page these customers represented
394 per cent of industrial  automotive sales in 2005
key market drivers
automotive sales are linked to consumer spending 
in the various economies of the world which in turn
affects demand for new automotive vehicles and
impacts the spending on vehicle maintenance and
automotive replacement parts consumer spending 
is affected principally by interest rates and taxation
revenue by major product category
belts and tensioners 38
powertrain  5
hydraulic and hose  16
wipers  10
rtpms 2
other fluid systems  8
other  21
revenue by region and endmarkets
0 10 20 30 40 50 60 70 80
aoe
am
ioe
iam
other
north
america
europe
asia
rest of
world
 major customers in industrial  automotive
tomkins plc annual report 2005
rates in an economy the relative prices of the vehicle
and population growth are also key factors that will
impact demand for new automobiles
demand for our products will also be impacted 
by inventory or stock levels of vehicles or replacement
parts a number of factors drive the longterm demand
for aftermarket products such as the number of
vehicles on the road the age of the vehicles the
distance travelled and the average cost of repair
the demand for industrial products is driven by
industrial production levels in the economies of the
world with capital spending by the major
manufacturers of mobile equipment used in the
construction mining and agricultural sectors directly
impacting our business sales of products into the
industrial aftermarket are affected by stock levels 
in the distribution channel 
our competitive position and strategy
the businesses in the industrial  automotive group
have market leading positions and strong brand
names they are able to supply their customers 
globally and offer a range of technologydriven 
and differentiated products the principles of lean
manufacturing continue to be applied in their
businesses to improve efﬁciency product and process
innovation is also key for all tomkins’ businesses to
sustain and enhance our competitive position and the
next section features examples of several successful
product introductions in the industrial  automotive
group our geographic expansion continues
particularly in the high growth asian markets with
contract wins in the year including hyundai toyota
and saic the industrial  automotive group made
two strategic acquisitions during 2005 namely eifeler
maschinenbau gmbh “emb” and le technologies
together with the mectrol business at the end of 2004
all these businesses have been fully integrated into the
group and have added new technologies and in the
case of emb and mectrol brought access to the
growth market of china
new products
in 2005 new products developed in the previous three
years accounted for 85 per cent of industrial 
automotive sales examples include
• predator® powerband power transmission a series
of belts that provide a longer runtime for oil pump
equipment and reduced maintenance costs 
• variable vane transmission pump stackpole the
business has designed a variable vane transmission
pump consisting of a modular construction that
provides added fuel efﬁciency beneﬁts and is a cost
competitive solution compared to conventional
systems stackpole has won contracts for over 
one million units in 2006 and expects to win 
further contracts during the year
• quicklok™ fluid power this leading technology
provides a quick and leakfree solution to hydraulic
hose assembly 
• innovision™ beam blade wiper systems this 
is a revolutionary wiper blade that outperformed
traditional blades in all snow and ice tests
vv pump
the stackpole variable vane
transmission pump is used
in small to mediumsized front
wheel drive cars and suvs
predator
®
powerband
the predator
®
powerband belt that 
is used in the petroleum industry for 
its strength and durability
operating and financial review
17
market share by major products
markets where businesses are number 1
0 10 20 30 40 50 60 70 80
power transmission 
synchronous belts
stackpole oil pumps
fluid power industrial 
curved hose
wiper systems
aftermarket blades
fluid systems closure caps
fluid systems thermostats
fluid systems rtpms
25
50
52
41
50
53
77
general motors nissan
ford toyota
daimlerchrysler volkswagen
genuine parts 
companynapa psapeugeot
motion industries advance
carquest ozark automotive
redneck hyundai
renault operating and financial review
overview of building products
tomkins plc annual report 2005
our business
building products
introduction
this group of companies manufactures air handling
components bathtubs and whirlpool baths doors 
and windows and other building components through
two business segments air systems components
“asc” and other building products “obp” this
group has 47 manufacturing facilities located in the
united states the united kingdom and asia and
employs 11750 people
business descriptions
air systems components
manufactures air handling components supplying 
the heating ventilation and air conditioning markets
principally in north america residential products 
are sold under the brand names of hart  cooley
milcor and american metal products and the
industrial and commercial products are sold under
the brand names of titus ruskin krueger actionair
and rooftop systems 
other building products
this business comprises lasco bathware lasco fittings
and philips doors and windows lasco bathware
manufactures acrylic and ﬁbreglass baths and shower
cubicles and a range of luxury whirlpools that are all
sold through distributors and the retail market lasco
fittings manufactures a range of pvc pipe ﬁttings and
accessories for pressure applications including irrigation
and drain waste and vent applications philips doors
and windows manufactures upvc doors and windows
for the residential and manufactured housing markets
sold through national distributors
our endmarkets and customers
the principal markets for the building products 
group are the residential industrial and commercial
construction markets the ‘other’ markets include
the recreational vehicle and manufactured housing
market the products are sold through a variety 
of manufacturers’ representatives wholesalers
distributors and retailers a list of the top ten
customers in the building products group is shown 
on the next page these customers represent 
157 per cent of building products sales in 2005
key market drivers
sales to the residential construction market are driven
by the level of new homes constructed and the home
remodelling market both of these markets are linked
directly to consumer spending in the united states
which is affected by interest rates and taxation rates 
in the economy
the longterm trend of new home building is
related to the balance of demand and supply which 
is determined by demographics and affordability and 
is connected to disposable income and interest rates 
the remodelling market is affected by the age of the
housing stock and the disposable income of home
occupants in the united states
the nonresidential market is driven by rental 
rates and occupancy rates that are affected by
macroeconomic factors such as growth in gdp  the
level of employment and industrial production levels
our competitive position and strategy
in air systems components the products are sold
under strong brand names and the business has a
18
revenue by major product category
air handling
components 56
bathtubs showers 
and whirlpools 22
doors and windows  13
other  9
revenue to endmarkets
residential 
construction  43
industrial 
and commercial
construction 46
other  11 tomkins plc annual report 2005
leading market share the business has national
manufacturing and distribution capabilities and 
an established relationship with manufacturers’
representatives architects and engineers in other
building products the lasco bathware business
manufactures nearly a quarter of all baths sold in the
united states and has positioned itself at the highend
of the bathtub shower and whirlpool market with the
new ‘contours
™
’ range this market has grown with
record sales of new homes and a trend towards
increased spend on remodelling of homes lean
manufacturing continues to be extended across 
the businesses a number of new products were
successfully launched in the year and some examples
are included in the new products section below the
acquisition of milcor and nrg industries inc has given
the group access to new product lines and customers
and a manufacturing base in china milcor has been
successfully integrated and nrg is nearing full
integration both businesses are performing ahead 
of expectations with additional synergies expected 
to be realised in 2006
new products
in 2005 new products developed in the past three
years accounted for 65 per cent of building products’
sales examples include
• hurricaneresistant louvers ruskin in response to 
the widespread failure of the various buildings in 
the southern united states ruskin has developed
hurricaneresistant louvers the louvers can hold up
under pressure in severe weather by preventing wind
and rain damage this technology is helping ruskin
to win signiﬁcant new contracts including the miami
performing arts center in the state of florida 
• energy recovery ventilators nrg industries in
september 2005 tomkins acquired nrg industries
which manufactures commercial air conditioning
products including energy recovery ventilators ervs
the erv meets the growing need for energy
conservation among building owners
• the contours™ bathware range lasco bathware
during 2005 lasco bathware launched a new range
of luxury whirlpools baths and showers known as
the ‘contours™’ range that is receiving industry
acclaim and has helped the business to grow sales 
by 157 per cent in 2005
nrg industries
the energy recovery ventilator has 
a patented wheel design that rotates 
out of the airﬂow when not needed
this means the incoming outside air 
is not warmed only then having to 
be cooled back down again
ruskin hurricane
resistant louvers
the hurricaneresistant louvers 
are able to withstand wind loads 
of up to 160 psf and nearly 9 inches
of rainfall ruskin was the ﬁrst
manufacturer to gain approval 
for its louvers from the florida 
building compliance ofﬁce
operating and financial review
19
market share by product
markets where businesses are number 1
0 10 20 30 40 50 60 70
asc grilles registers  diffusers
asc terminal units
asc dampers
bathware gelcoat
fittings pressure products
philips doors  windows
28
33
30
61
56
45

major customers in building products
ferguson enterprises
home depot
watsco
fleetwood enterprises
tom barrow
thor industries
norman s wright
insight glass
trane co
york international operating and financial review
corporate social responsibility
tomkins plc annual report 2005
corporate social responsibility
2005 has seen continuing improvement in the
social environmental and ethical standards
prevalent throughout the group’s operations
tomkins believes in the importance of social
responsibility in its business practices this is consistent
with a growing regulatory environment that requires
greater emphasis on social responsibility in the conduct
of the affairs of a public company to this end the
company and its businesses seek to achieve the
highest standards consistent with its obligations to 
its shareholders employees and customers to provide
products and services that customers are prepared to
buy whilst continuing employment opportunities 
and providing an acceptable return to shareholders
tomkins continues to take a number of initiatives
that advance these principles including lean
manufacturing which has seen amongst other things
costsavings through a reduction in the use of raw
materials levels of waste and use of energy together
with a substantial improvement in health safety and
environmental performance in many of the group’s
facilities in the design engineering and production 
of the group’s products consideration is given to 
the environmental impact of the manufacture of such
products and use to which they are put emphasis is
placed on reducing waste and the use of energy in
production processes the board of tomkins
encourages such policies within its businesses
this report sets out initially the tomkins’ code of
conduct and ethics and human rights policy it then
provides a summary in three parts of the work the
group has undertaken during the year in the area of
corporate social responsibility csr consistent with 
the principle of continuous improvement and highlights
the main achievements the ﬁrst part of the csr report
deals with health safety and the environment the
second part covers socially responsible investment sri
and ﬁnally community involvement
code of conduct and ethics  human rights policy
tomkins’ code of conduct and ethics the “code”
and human rights policy form the basis on which
uniform standards are applied across the group in all
countries where the group operates the code sets
out a series of ethical policies and principles of conduct
to be followed by all tomkins’ companies and applies
to all directors ofﬁcers and employees who are
expected to conduct company business with integrity
and in compliance with the laws of the countries in
which they operate the code covers a number of
important areas including competing fairly and
complying with antitrust and competition laws
employee health and safety laws and environmental
laws it also reafﬁrms tomkins’ commitment to fair
treatment of all employees ethical and lawful
behaviour and sets out some general principles which
are important in dealing with suppliers and customers
and with governments and government agencies 
the code emphasises the importance of employees
protecting the company’s intellectual property any
waivers to the code require the approval of the board
and will be published on the company’s website
during the year no waivers have been either sought 
or granted 
tomkins’ human rights policy the “policy” has
established a number of principles that are applied
across the group to all companies no matter where
they operate these principles cover antidiscrimination
employee rights in the areas of health and safety
wages and working hours prohibition of child labour
and social responsibility covering environmental 
impact and community relations employees are
expected to maintain the highest standards in
conformity with the principles
a copy of the full text of the code and the policy 
in several languages can be found in the corporate
governance area on t omkins’ website or a printed copy
is available by application to the company secretary at
the company’s registered ofﬁce from timetotime the
board reviews the code and the policy to ensure that
they reﬂect best practice during the year a paragraph
was added to the code and to the policy which allowed
those tomkins businesses that have their own existing
code of conduct and ethics and human rights policy or
similar documents to retain them provided such
documents incorporate the principles of the t omkins’
code and the policy and they have received the prior
approval of the chief executive ofﬁcer of t omkins
senior management throughout the group are
required to conﬁrm annually that they and their
businesses have complied with the principles set out 
in both the code and the policy and to report any
breaches for 2005 no breaches were reported by any
of the operating businesses adherence to the code
and the policy forms part of the business risk assurance
monitoring process which has assisted in ensuring the
dissemination of the code and policy throughout the
20 tomkins plc annual report 2005
group the board does not believe that an independent
external process of veriﬁcation is required at this time
but will keep this under review
1 health safety and the
environment hse
the priority and importance placed by the board and
management of tomkins on hse matters is driven by a
belief and experience that tomkins’ commercial success
and high hse performance are mutually reinforcing
objectives it was because of the importance placed on
hse matters that the health safety and environment
committee was formed by the board in january 2003
in recognising its responsibilities to its employees
and the communities in which tomkins operates the
group’s approach to hse is one of continuous
improvement key to the maintenance of the standards
the group sets for itself is the work of the health
safety and environment committee of the board and 
a supporting team of specialist professionals the 
“hse team” operating throughout the group they
have been active in guiding operating businesses 
to achieve the highest internationally recognised
standards including occupational health and safety
assessment series ohsas 18001 and iso 14001 
or equivalent the ohsas standard has been created 
to allow companies to develop systematic controls
relating to their health and safety risks and 
to seek external accreditation of the hse 
management system
policy objectives and compliance
the intention of tomkins’ hse policy is to provide a
safe and healthy workplace for all employees and to
minimise the impact of the group’s operations on the
environment tomkins is committed to the highest
hse standards consistent with regulatory requirements
and best management practices the group’s
businesses are required to operate their facilities
consistent with this commitment all employees have
a part to play in that commitment and they are
encouraged and expected to do so amongst the hse
committee’s responsibilities is the determination on
behalf of the board of the framework or broad policy
and objectives in the areas of hse and to propose any
amendments to existing policies and objectives for
approval by the board
the group’s policies and objectives are translated 
by management into speciﬁc action plans for each
operational site all business groups are encouraged 
to set realistic hse targets and objectives within their
annual business plans in order to pursue a strategy
based on continuous performance improvement the
hse activities of individual businesses in the group are
monitored by the hse team which carries out regular
performance audits the audit reports produced are
given to local management who are responsible for
correcting any deﬁciencies that come to light a
summary is provided to the hse committee at every
quarterly business review with senior management 
an analysis of incidents of industrial accident and
environmental exposure is considered and discussed
the tomkins annual bonus incentive plan for
management is focused on a sharing of a proportion
of group aftertax proﬁts after deduction of a charge
for the cost of capital an intrinsic feature of the
group’s ability to generate sustained value is the 
need to maintain high standards of hse controls 
in all operating businesses worldwide there is much
evidence that actions to improve standards of hse are
ﬁnancially beneﬁcial to the group furthermore high
standards of hse are often paralleled by high standards
of product quality control and customer service for
these reasons the board does not believe it is
necessary to identify separately the performance on
hse matters as a speciﬁc criterion in determining
bonus payments
health safety and environment committee
the committee plays a key role in the group’s hse
activities and is comprised of two nonexecutive
directors and the chief executive and normally meets
at least three times a year in 2005 there were
meetings and inspections at the gates plant at legnica
poland the stackpole plants at ancaster canada and
the schrader plants at belfast and carrickfergus
northern ireland meetings always take place at one 
of the group’s facilities and normally form part of a
programme during which the committee will where
possible visit more than one site site visits enable the
committee to gain an understanding at ﬁrst hand of
hse activities of business units and the issues facing
them this process allows the committee to maintain a
strong and continuing overview of the way the group’s
hse policies and objectives are being implemented
site visits by top management also enable facility
personnel to recognise the importance the committee
and tomkins board places upon such matters
operating and financial review
21
tomkins plc and its subsidiaries are
committed to conducting their
businesses with care for the health 
and safety of all employees and with
respect for the environment the hse
policies are available in several
languages on the tomkins website 
the code of conduct and ethics
describes longstanding principles of
conduct that tomkins follows to
ensure its business is conducted with
integrity and in compliance with the
law in the countries in which it
operates the code of conduct is
available in several languages on the
tomkins website operating and financial review
corporate social responsibility continued
tomkins plc annual report 2005
the committee has formal terms of reference which
can be found in the corporate governance section 
of the company’s website the committee reports
regularly to the board on its activities which assists 
the board in making informed decisions about the
businesses of the group particularly relating to any
proposed new investment in manufacturing facilities
and the related hse implications the reports received
by the committee also highlight current areas of hse
focus and improvement and any event or potential
breach of regulatory requirements any potentially
serious breach is communicated immediately to the
chief executive of tomkins and the committee this
enables the committee to monitor fully the
compliance record of each business unit and ensure
corrective action is taken in a timely manner of the
environmental deﬁciencies found by regulators or
discovered during audits in 2005 the substantial
majority related to reporting deﬁciencies on health
and safety the majority of the occupational safety and
health administration “osha” citations and informal
inquiries were resolved promptly
hse assurance
the hse committee receives detailed quarterly reports
from the hse team on the current status of all matters
which require attention including a description of
what action has been taken to address those matters
and the timetable to completion the adoption of
international or comparable internal standards tailored
to the individual requirements of a growing number 
of operating businesses increases the committee’s
conﬁdence in the effectiveness and accuracy of the
reporting systems and procedures
business risk assurance audits are conducted by
tomkins’ own professionals together with the site
management teams to ensure that processes and
controls are in place to maintain compliance with
group policy and the applicable local and national 
hse legislation
tomkins places a great deal of importance on hse
matters in its acquisition processes the tomkins hse
team forms part of the due diligence team and where
appropriate external environmental advisers are
employed to review and assess any environmental risks
to which the group could become exposed if an
acquisition were to proceed in addition health 
and safety is also a key area for which a full review is
undertaken including the level of compliance with all
applicable laws and regulations environmental due
diligence was performed at all acquired facilities during
the year to ensure that no outstanding remedial
obligations were assumed unless properly deﬁned and
reserved and that any compliance issues were properly
identiﬁed prior to acquisition and addressed promptly
a review is made of a potential acquisition’s
environmental management system relationships 
with regulatory ofﬁcials and general level of respect
and care shown for the environment where necessary
an indemnity is sought from the vendor to cover any
potential liabilities but it is possible that a potential
acquisition would be rejected if the hse risks were
considered to be too high tomkins may require a
vendor to undertake hse improvements before a
transaction is concluded
during the year the tomkins’ excellence award 
was instituted which provides incentives for each
location to meet speciﬁed standards in 12 areas
including safety indices incident and severity rates
waste indices landﬁll  total wastes environmental
management systems regulatory compliance hse 
selfassessment loss prevention report review and
followup citizenship hse professional development
thirdparty hse audit response and corporate hse
audit response
hse communication and information
in support of the group’s hse activities a secure
internetaccessible hse database became fully
operational in 2005 a streamlined data collection
storage and reporting system to track hse
performance as well as the ongoing hse audit process
began operation data is currently provided for
approximately 185 of tomkins’ operating locations
veriﬁcation of the completeness and quality of collected
data will be accomplished through annual data reviews
completed by t omkins’ facilities and through periodic
internal and third party hse assessments conducted by
the t omkins hse team data is derived from information
maintained for each location including the number of
employees a description of the operations site
information including the size and geographic location 
of the site age and size of buildings onsite and
information on environmental safety and quality
management systems employed by the location an hse
risk assessment has been completed for each location as
well as hse information relating to permits consents
and approvals held by the operation above ground and
22 tomkins plc annual report 2005
underground tanks onsite and data indicating the
presence and management of any asbestos or pcb –
containing equipment or materials that may be onsite
the data collected on a separate intranetbased system
now allows accurate reporting of incident and severity
rates across the group see graph on page 25 following
the gathering of basic data it will be possible to report
on a number of other areas including waste rates
emissions and other hse data which will allow more
detailed reports in future data is collected relating to
emissions from the facility and reduction efforts are
monitored against companyestablished targets for
gates in the future other companies may choose to use
this tool for waste key performance indicators “kpis”
work has continued during the year to complete an
integrated approach to the group’s hse activities
which has been supported by the development of
tomkins’ hse intranet website which is available to 
the group’s hse community it offers a wide range 
of information and assistance in many important 
areas including training
hse highlights
two major hse conferences were held during the 
year for tomkins group hse professionals one in 
asia singapore and the other in north america
columbus ohio in february 2005 the ﬁrst asian
hse conference was held to educate and expand the
culture of compliance and best practice to facilities in
the region the conference agenda included a
presentation by each business represented of one 
or more of their best practices the beneﬁts for
participants included team building understanding
the hse organisational structure and practices
knowledge sharing improvement in hse
performance networking with colleagues and the
development of strong motivation in november
2005 the north american hse conference attracted
more than 150 attendees and an intensive three days
of hse training was provided with an emphasis on
integrating hse into lean practices and included the
introduction of the tomkins’ hse excellence model
tomkins’ commitment to hse was evidenced by the
presence of tomkins’ chief executive jim nicol who
provided the opening address explaining that
excellence in hse is a requirement and a priority for
all tomkins businesses
the emphasis on training continues to remain 
an hse priority with a whole range of programmes
provided to employees from basic plantbased
programmes to the more advanced training for 
hse professionals 
there were many notable health and safety
achievements throughout the group during the 
year and some representative examples are
summarised below
• four stant plants have achieved substantial periods
without a losttime accident connersville 381 days
tijuana 750 days pontypool over 1200 days and
karvina 300 days similar results have been
achieved by other companies including ideal gates
iola gates salt lake city gates siloam springs lasco
fittings lasco bathware lancaster and dearborn
midwest
• a substantial number of facilities have improved 
the level of lighting with a change to more efﬁcient
lighting installations with longer bulb life which leads
to the creation of a safer working environment a
reduction in the use of electricity and reduced costs
these lighting units are environmentallyfriendly and
can also be disposed of as general refuse unlike the
metal halide ﬁxtures which contain mercury and
require a licensed waste hauler for disposal
• five of lasco bathware’s facilities installed in 2005
control technology which reduces employee exposure 
to styrene by an estimated 85 per cent while controlling
air emissions by more than 90 per cent and
• behaviour based safety training has been introduced
throughout the group during the year and several
plants have begun implementation of the programme
a large number of awards were received by tomkins’
operating businesses from local regional and national
organisations reﬂecting the attainment and
maintenance of high standards in health and safety
throughout the group’s facilities
there were a number of notable environmental
achievements during the year where targets were
either met or exceeded and by way of example 
some are summarised below
• recycling and waste reduction efforts have been
made in a large number of tomkins’ facilities with
notable results achieved under their hse excellence
model by gates facilities in north america europe
and asia recycling activities are extensive and
include metal scrap vinyl glass cardboard water
plastic wrap and inkjet cartridges
operating and financial review
23
group photo of our local hse
professionals at tomkins’ ﬁrst asian
hse conference in february 2005
tomkins has a secure internet
accessible hse database that tracks
hse performance for each plant in
every country operating and financial review
corporate social responsibility continued
tomkins plc annual report 2005
• at gates aachen germany zero waste to landﬁll
has been achieved since 1998 although such
german regulatory requirements came into effect
much later in june 2005 the key elements to
achieving zero landﬁll waste include a thorough
knowledge and careful analysis of all waste streams
strict policies covering incoming material packaging
and resulting waste and whole life product and
process design
• lasco bathware is upgrading its transport ﬂeet to
reduce nitrous oxide emissions by requiring improved
pollution control for diesel engines
• a great deal of success has been achieved in
reducing the use of electricity throughout tomkins
not just in lighting but also production processes
and a range of other areas gates unitta asia
achieved a substantial reduction in the use of
electricity in the belt testing facility in their technical
department by developing the regenerative
dynamometer brake by reengineering the existing
dynamometer brake this generates electricity while
giving resistance torque to the belt the electricity
generated is fed back into the system accordingly
the test rig now consumes only half as much
electricity as the traditional test rig
• by siting two satellite factories close to their major
customers ruskin has reduced freight costs and
resultant vehicle emissions and packaging materials
• out of adversity sometimes comes opportunity and
stackpole discovered that hurricane katrina had
reduced substantially the supply of hydrogen
available since it was sourced in the areas badly
affected a thorough reassessment of its production
processes was undertaken which has led to a
reduction in its hydrogen usage of 30 per cent
• the philips facility at stayton oregon has reduced
waste by more than 40 per cent primarily due 
to glass recycling efforts
• the ideal plant in st augustine florida has
eliminated all industrial wastewater discharged 
and reduced its hazardous waste by 51 per cent 
in 2005 and
• aquatics and lasco bathware have engaged in
research and development effort to reduce air
emissions by as much as 22 per cent through 
the use of modiﬁed resins in their products
there are a number of continuous improvement
projects run by operating businesses that continue 
to yield yearonyear gains in environmental and
ﬁnancial performance reductions in hazardous waste
being a good example
there are numerous examples throughout the
group where changes to processes can yield
environmental hse safety and ﬁnancial beneﬁts 
in one operation
manufacture of environmentally 
advantageous products
many of tomkins’ businesses have adopted a “green
purchasing” routine by which sustainable materials 
are given preference in the purchasing process
additionally tomkins supplies a number of products
that have a positive impact on the environment by
way of illustration two examples are drawn from
dearborn midwest conveyor company dmw 
and ruskin
the us environmental protection agency’s clean air
interstate rule furthers the objectives of the us clean
air act which requires coal burning power plants to
reduce sulphur dioxide emissions by 70 per cent and
nitrogen oxides by 60 per cent by 2015 compared to
2003 levels across a region including 28 eastern
states dmw is furnishing bulk material handling
systems to some of the leading united states energy
companies in this unprecedented effort to improve air
quality fluegas desulphurisation requires lime or
limestone in the chemical process to remove sulphur
dioxide from ﬂue gases a byproduct of the process 
is gypsum or sludge all of these materials are
transported stored and retrieved by dmw equipment
in some cases the gypsum will be conveyed or loaded
out for shipment to nearby plants as the primary
ingredient for the manufacture of plasterboard dmw 
is assisting other plants who will achieve emission
reductions by converting to lower sulphur coal or
blending a fuel mix that results in lower emissions
different physical and combustion properties require
that the existing material handling systems be modiﬁed
or expanded
ruskin in common with its sister companies in the
air handling group has signed up to the objectives of
the us green building council whose mission is to
promote buildings that are environmentally responsible
proﬁtable and healthy places to live and work just one
of a number of products developed to support this
initiative is the electronic air measurement station 
24 tomkins plc annual report 2005
this innovative product enables the building operator 
to keep leakage of conditioned air to below three cubic
feet per minute per square foot while maintaining a
healthy supply of fresh outside air to the building
occupants ruskin’s success in this ﬁeld was recognised
when its president was a featured speaker at the 2005
engineering green buildings conference
hse performance
at the end of 2005 115 of the group’s 152 facilities
had adopted an environmental management system
“ems” of which 73 facilities were iso 14001
accredited 2004 65 a further 24 facilities are
currently iso compliant but not registered a further
18 facilities have alternative emss in place these
facilities have implemented fully functional emss that
were not based on the iso 14001 outline but achieve
similar results and are not intended for iso
certiﬁcation the remainder of the facilities except
those facilities opening in 2005 or scheduled to close
have been tasked to achieve iso compliance with fully
functional emss in 2006
all of the businesses have established a range of
hse kpis within their current business plans to monitor
and assess hse performance on an ongoing basis the
hse committee monitors the kpis on a regular basis to
ensure that hse focus and continuous improvement in
performance are being delivered by all business groups
examples of the kpis used include incidentaccident and
severity rates raw material wastage and energy
consumption per applicable production unit and
compliance with t omkins’ hse policy and local
environmental legislation
trends on accidents within tomkins’ manufacturing
plants and distribution facilities are measured using
osha standards since the majority of the group’s
operations are based in north america the tomkins
database provides groupwide performance data on
the incident rate and the resulting lost days and the
severity rate which are tracked in all individual
facilities a target incident rate of 20 meaning 2
reportable incidents per 100 workers over a period 
of one year has been set for certain of tomkins
operations and for the remainder reductions in the
incident rate and severity rate from year to year have
been set the graph opposite shows the trend over 
the past ﬁve years – a reduction of over 40 per cent 
in the incident rate the very slight increase in the
incident rate in 2005 is entirely due to newly acquired
businesses for which tomkins’ hse policies have not
yet been fully implemented without those businesses
the improvement yearonyear would have continued
the target severity rate average number of lost
workdays per incident has been set at zero and for 
the ﬁveyear period a reduction of over 50 per cent was
recorded the results were affected by the performance
of businesses acquired in recent years but work
continues to improve performance yearonyear 
waste generation has been measured in gates’
facilities as part of the hse excellence model although
a number of other companies have also tracked waste
expansion of the new intranet database now provides
an opportunity for central measurement of results and
data worldwide actual amounts of total waste and
waste to landﬁll may be tracked waste is deﬁned as
“any goods being shipped offsite for either disposal 
or for other beneﬁcial use besides the intended original
endproduct function” that is any nonsaleable good
or product in the gates facilities waste volume is then
compared to net production volume tonnes of good
product manufactured and shipped to warehouse or 
to customers or for distribution centres tonnes of
product shipped due to the signiﬁcant amount of
waste inherent in some production processes eg
grinding dust of belts or swarf in hose coupling
production for the purpose of evaluation waste
indices are calculated as a percentage of net
production this enables performance to be
benchmarked the “total waste index” is rated as
tonnes of total waste per tonne of net production 
the “landﬁll waste index” is rated as tonnes of waste
to landﬁll per tonne of net production indices
calculated from the aggregated data for 2003 and
operating and financial review
25
lean manufacturing has led to a safer
working environment increased
efﬁciency and reduced costs 
air systems components plant
in the united states before lean
manufacturing initiatives
0
2
4
6
8
2005 2004 2003 2002 2001
tomkins safety performance
0
10
20
30
40
incident rate
severity rate
643
incident rate
665 507 359 366
3845 3906 2758 1909 1874
severity rate operating and financial review
corporate social responsibility continued
tomkins plc annual report 2005
2004 for gates show a total waste reduction of 
1114 per cent with a reduction in landﬁll waste of
933 per cent since landﬁlling is considered by many
countries to be the worst method of waste disposal
the focus has been on reducing this while at the same
time not losing sight of total waste reduction the
target is to show continuous yearonyear reduction 
of waste once the group has “waste” as a kpi
measurement worldwide speciﬁc percentage
improvement targets may be set other companies
may choose to use a different measurement than
waste compared to net production volume the
intention is to incorporate this new performance
indicator into the continuing effort for manufacturing
excellence by having the facility select a customised 
kpi measurement most appropriate to its operations
energy consumption data has also been aggregated
for many tomkins afﬁliates however no detailed
analysis is yet available
2 socially responsible investment
the board regularly takes account of the signiﬁcance
of social environmental and ethical ‘see’ matters 
and how these impact the group’s businesses and
value the board ensures that appropriate and effective
systems are in place to manage signiﬁcant risks this
manifests itself in a number of ways at the quarterly
business reviews conducted by senior management
the signiﬁcant risks facing each business are considered
and strategies to mitigate these risks are discussed and
agreed periodically the board receives a summary of
the group risk proﬁle that sets out the most important
risks facing the group and its businesses which may
have an impact on the short medium and longterm
value of the group these risks cover a whole range of
issues including pricing pressures growth investment
timing of acquisitions and disposals currency exposures
products strategies for developing countries and any
failure adequately to identify and manage signiﬁcant
hse issues each of the risks is assessed for its impact
on proﬁt and cash ﬂow the likelihood of its occurrence
and the scope for mitigation or reduction of the risk the
risks are kept under review until they are either wholly
mitigated or no longer represent a signiﬁcant risk to the
company and its short medium and longterm value
other important areas where see issues are taken
into account include major capital expenditure proposals
considered by the board where operating businesses are
required to take account of and report on see matters
where there is any potential impact the business risk
assurance group has included in its overall business risk
assurance process speciﬁc requirements to examine and
assess see matters in its list of responsibilities the results
of the work of the business risk assurance group are
reported quarterly to the audit committee which 
in turn reports to the board
3 community involvement
charitable giving
the board’s policy on charitable giving was reviewed
during the year and whilst no changes were made to
the underlying policies donations of an exceptional
nature were included in the policy framework tomkins
has wellestablished guidelines that determine the
nature of organisations to which support is given
tomkins recognises its responsibilities to the wider
community in which its businesses operate to provide
balanced and targeted charitable assistance the
charities given assistance cover a wide range of
activities including health and welfare education civic
and community projects culture and the arts tomkins
prefers to spread its charitable giving over many
smaller local charities that usually do not have the
organisation structure or resources to compete with
the marketing skills of the larger highproﬁle charitable
bodies each year donations are made to hundreds of
charities tomkins makes further donations through
advertising sponsorship products for prizes and
volunteers or other inkind support
in the uk applications are normally made to
tomkins’ corporate ofﬁce in london requests for
donations are made from a variety of charities and
tomkins tries to respond positively to as many requests
as possible provided they come from small local
charities and are registered with the charity
commission the company and its employees
continued with their support during the year for 
the aplastic anaemia trust through donations and
participation in a london to paris triathlon the trust 
in turn supports a specialist unit at st george’s
hospital near to tomkins’ corporate headquarters 
in south west london aplastic anaemia is a rare but
devastating disease that causes the bone marrow 
to cease producing red blood cells 
in the us most requests for support are made locally
and donations can be made in a number of ways the
t omkins foundation makes matching gifts foundation
26 tomkins plc annual report 2005
gifts and contributions to united way an external
charitable organisation that distributes funds to charities
tomkins’ us subsidiary companies also make donations
to united way in addition to their charitable giving
activities the businesses also run a range of initiatives for
the beneﬁt of local communities these include allowing
employees time off to participate in community activities
and other charitable support examples of the many
organisations to which help was provided during the
year include the american heart association the
american cancer society and “march of dimes” 
an organisation that helps prevent birth defects and
infant mortality support was given to drug awareness
resistance education “dare” a programme which
aims to keep children off drugs and relay for life walk
for cancer some us businesses use their industrial and
commercial expertise to support charities and habitat
for humanity receives support from a number of
tomkins’ companies in response to hurricane katrina 
in august 2005 which had such a devastating effect 
on the southern united states and in particular new
orleans the company made a donation of over
us290000 including matched donations made by
employees of us40000 the group’s contribution 
was donated to the american red cross who were
closely associated with the relief efforts
no donations were made to any organisation in
which any of the independent nonexecutive directors
serves in an executive capacity during the year the
board approved a donation of £100000 to seeability
formerly known as the royal school for the blind 
a charity whose purpose is to enable individuals who
are blind or partially sighted with additional disabilities
to achieve their full potential to realise opportunities
make choices and enhance their quality of life
seeability launched its “eye 2 eye” campaign during
the year which aims to raise £2 million to fund ten
community development ofﬁcers nationally to provide
support to individuals with sight loss and a learning
disability david newlands is nonexecutive chairman
of the trustees of seeability and took no part in the
board’s decision to make the oneoff donation total
charitable donations during the year are shown in the
directors’ report
community assistance
in the us and many other countries in which tomkins
operates many employees serve their local community
through work on boards committees and other bodies
covering a wide range of activities giving their time
and expertise free to the local community – something
tomkins encourages and supports in the uk the
company’s employees have an annual vote to select 
a community project and in 2005 the choice was
property maintenance at a local school there is
widespread company and employee support in many
countries for giving blood and in the us this was done
in cooperation with local red cross organisations
many of the group’s facilities hold “open days” 
where members of an employee’s family and the local
community are invited to visit the facility and gain a
greater understanding of what the plant produces 
and how it is produced
employee health and welfare
many of tomkins’ businesses operate a range of
voluntary preventative healthcare programmes with 
the purpose of maintaining and supporting employee
health and welfare the programmes are wideranging
and include health screening weight loss free
inﬂuenza immunisation breast screening and other
forms of preventive healthcare one company which
has facilities some distance from primary medical care
and consequently long emergency response times has
purchased deﬁbrillators for those facilities
at schrader electronics northern ireland focus 
is put on the total lifestyle of employees through
comprehensive health and lifestyle assessments
covering the measurement of cholesterol hdl 
and ldl glucose height weight body fat blood
pressure carbon monoxide suppleness and strength
the assessments also cover exercise smoking diet
alcohol stress levels and other aspects of everyday
life lifestyle training was provided to shift workers
and was designed to address shift workers’ issues in
the areas of shift scheduling sleep hygiene circadian
physiology substance abuse nutrition stress
management family counselling and organisational
management it also provided practical solutions 
for easing daytoday difﬁculties associated with 
shift work lifestyles
political donations
it is tomkins’ practice not to use shareholders’ funds
for the purpose of making political donations either 
in the form of cash donations or other inkind beneﬁts
and consequently we have not sought shareholder
approval to make such donations
operating and financial review
27
gates korea contributed to a 
charity programme for the house 
of heelak orphanage 
ken minton nonexecutive director
and stephen mcclelland managing
director of schrader electronics ltd 
at an hse meeting at schrader
electronics ireland operating and financial review
financial review
tomkins plc annual report 2005
financial review
overview of performance and financial
position in the year
revenue and profit from operations
sales increased by 70 per cent to £31824 million
2004 £29741 million and proﬁt from operations
before restructuring initiatives increased by 14 per cent
to £3085 million 2004 £3043 million proﬁt from
operations was also higher at £2967 million 2004
£2863 million an increase of 36 per cent 
these results reﬂect good contributions from the
recent acquisitions organic growth from new
products increased operational efﬁciency price
increases made to offset the higher cost of raw
materials and expansion in high growth markets
collectively these positive factors allowed the group 
to overcome the challenges faced throughout the year
from weak north american automotive production
volumes particularly at general motors and ford 
the delay in the implementation timetable of the
tread act and softness in the nonresidential
construction market 
the group continues to undertake certain
restructuring initiatives aimed at improving the cost
base and in 2005 the net cost of the restructuring
initiatives was £118 million 2004 £180 million
this comprised restructuring costs of £203 million
2004 £205 million and a proﬁt on disposals and 
exit of businesses of £85 million 2004 £25 million
the net impact from raw material and energy cost
increases was broadly neutral for the year as a whole
margins
the group operating proﬁt margin before restructuring
initiatives was 97 per cent compared to 102 per cent
in 2004 we maintained doubledigit operating
margins in industrial  automotive of 111 per cent
2004 118 per cent and in air systems components
of 103 per cent 2004 113 per cent the operating
margin in other building products was 72 per cent
2004 62 per cent
industrial  automotive
sales in industrial  automotive increased by 53 per
cent to £22986 million 2004 £21823 million and
proﬁt from operations before restructuring initiatives
was £2552 million 2004 £2576 million the lower
automotive production volumes in the north american
automotive original equipment “oe” market
generally and particularly at general motors and 
ford had an impact on sales volumes and margins
the group also had to contend with the delay in 
the tread act that pushed back a signiﬁcant 
number of remote tyre pressure monitoring system
“rtpms” orders until the second half of 2006 and 
28
ken lever
finance director
“our results reﬂect good
contributions from the recent
acquisitions organic growth from
new products and increased
operational efﬁciency”
  tomkins plc annual report 2005
in the third quarter of the year the two hurricanes in
the gulf coast region of the united states temporarily
disrupted the supply chain and caused a spike in raw
material prices 
the industrial  automotive group completed two
acquisitions in 2005 le technologies and emb with
the mectrol business being acquired at the end 
of 2004 in total the annualised revenue added by 
the businesses is around 160 million c £88 million
the acquisitions have all been integrated effectively
into their respective businesses and are making
contributions ahead of our initial expectations 
in 2006 we expect to realise further cost 
synergies and to expand the product offering 
into new markets
in 2005 automotive oe represented 211 per cent
of our global sales 2004 251 per cent and north
american automotive oe represented 120 per cent 
of global sales 2004 144 per cent
power transmission
there was good underlying growth in industrial
markets and automotive aftermarket offsetting the
lower automotive oe volumes the mectrol industrial
belt business made a strong contribution during 2005
and is targeting a number of new applications for its
products in markets such as food processing and print
and paper processing
automotive original equipment sales were impacted
throughout 2005 by production cuts especially at
general motors and ford the business is taking action
to address this and in the year won new business in
asia of around 300 million £165 million with
hyundai toyota and saic and new business in 
europe of around 220 million £121 million with
renaultnissan psapeugeot vw and fiat the
business continued to expand in china with sales
ahead by 172 per cent and secured an award from
chery automotive for ‘excellent t echnical cooperation’
operating and financial review
29
group operating performance indicators
2005 2004
revenue £31824m 29741m
proﬁt from operations
1
£3085m £3043m
operating margin
1
97 102
ebitda margin
2
134 141
average net operating assets £10505m £8974m
return on average net operating assets
1
294 339
return on average invested capital
3
103 116
capital expenditure £1433m £1577m
depreciation £1191m £1159m
capex to depreciation times 12 14
cash generation
4
£2170m £1817m
cash conversion
5
753 640
employees 37324 36720
group financial performance indicators
2005 2004
interest and preference dividend cover times 77 92
effective tax rate
6 
215 196
fully diluted earnings per share 2379p 2281p
return on equity after tax 119 125
dividend cover – earnings times 19 19
dividend cover – cash ﬂow times 10 12
1 before restructuring initiatives
2 based on earnings before interest tax depreciation amortisation and restructuring initiatives
3 return on invested capital is calculated for total operations before restructuring initiatives
4 net cash inﬂow from operating activities less net cash outﬂow from capital expenditure before gains on disposal and exit of businesses
5 cash generation to proﬁt from operations before gains on disposal and exit of businesses
6 calculated on proﬁt before tax and before preference dividend
£m
521
1029 422
257
281
417 £m
currency
acquisitions
disposals ia
asc
obp
29741
£183
31824
£182
2004 2005 revenue ahead by 70
group revenue bridge operating and financial review
financial review continued
tomkins plc annual report 2005
automotive aftermarket sales were ahead by 
43 per cent with particular strength in europe where
sales were ahead by 132 per cent the business in
europe beneﬁtted from the launch of the new micro
v® xf belt and in north america power transmission
won a key contract to supply tensioners to carquest
the business continues to look at expansion
opportunities in highgrowth markets such as russia
and the middle east and during the year won a
“supplier of the year award” in russia from ad
international a large pan european organisation 
for the quality of its order fulﬁlment 
at stackpole the proﬁtability of the business
suffered from the lower automotive oe production
volumes we took action during the year to contain
costs and implement proﬁt protection plans and in
february 2006 announced the closure of the pump
components division “pcd” facility these actions 
are expected to improve the operational efﬁciency of
the business in 2006 an increase in volumes on new
platforms as the oems move to sixspeed transmission
should also drive an improvement in performance 
fluid power 
the fluid power business performed strongly in 2005
with sales ahead by 106 per cent in north america 
the business capitalised on the strength in industrial
production with the result that sales of both hydraulic
oe and industrial aftermarket products were signiﬁcantly
ahead sales of automotive aftermarket were also strong
in the fourth quarter of 2005 the balance of the sales
growth was provided by good contributions from
europe and india where a new facility was opened at
faridabad the emb business that was acquired in july
2005 has been successfully integrated and made a good
contribution in the second half of the year the
development of new products continued and the 
quicklok™ family of products was introduced at the
start of the year this product has been well received 
by customers with several new contracts awarded for
2006 and 2007 the new customer solutions centre 
in denver was opened in the second quarter of 2005
and emphasises our focus on developing new product
technology in industrial applications
wiper systems
2005 was a difﬁcult year for the wiper systems
business sales volumes were lower impacted by the
challenging oe environment the failure of mg rover
in europe and a strategic decision to exit some of the
less proﬁtable contracts with the oems proﬁtability
was impacted by the losses at the wipers facility in
pontypool wales and the decision was announced 
in november 2005 to cease production at this facility 
in contrast the aftermarket side of the business
performed well particularly in the second half 
30
industrial  automotive
2005 2004
revenue £22986m £21823m
proﬁt from operations
1 
£2552m £2576m
operating margin
1
111 118
ebitda margin
2
152 160
average net operating assets £8918m £7295m
return on average net operating assets
1
286 353
return on average invested capital
3
102 119
capital expenditure £1195m £1407m
depreciation £951m £905m
capex to depreciation times 13 16
cash generation
4
£1624m £1324m
cash conversion
5
687 552
employees 25439 25270
1 before restructuring initiatives
2 based on earnings before interest tax depreciation amortisation and restructuring initiatives
3 return on invested capital is calculated for total operations before restructuring initiatives
4 net cash inﬂow from operating activities less net cash outﬂow from capital expenditure before gains on disposal and exit of businesses
5 cash generation to proﬁt from operations before gains on disposal and exit of businesses
£m
62
173
66 237
17
72 15
£m
currency
acquisitions
 disposals
restructuring
ia
asc obp
central costs
2863
£183
2967
£182
2004 2005 profit from operations ahead by 36
group profit from operations bridge capital expenditure and depreciation
depreciation capital expenditure
30 60 90 120 150
group
bp
ia
0
1433
1191
1195
951
238
235
 £m
tomkins plc annual report 2005
of 2005 and now represents 420 per cent of the
business 2004 292 per cent aftermarket growth
was driven by strong demand for the innovision™
beam blade that was launched at the end of 2004
this product won a gold award at the apex global
design awards and production was more than
doubled during 2005 extra capacity is being added 
in 2006 to meet demand and there will also be further
new product introductions in the aftermarket in the
fourth quarter of 2005 production commenced at the
wipers facility in suzhou china this facility is a key 
part of trico’s asian strategy for both the aftermarket
and the oem business and has already won a number
of awards to supply this market including a 11 million
£06 million contract with daimlerchrysler
fluid systems
the performance of the fluid systems business was in
line with 2004 but was impacted by the delay in the
tread act and lower automotive oe volumes at the
start of the year schrader electronics had expected a
signiﬁcant rampup in volumes of rtpms due to the
requirements of the tread act the rampup will now
start in the second half of 2006the management at
schrader electronics took swift action during the year to
limit the impact on proﬁt from the reduced volumes and
was also successful in winning several new contracts for
its snapin sensor technology to supply general motors
daimlerchrysler psapeugeot subaru and nissan
the stant operation showed good yearonyear
performance as sales of new valve products rose and 
a spike in demand for locking fuel caps occurred in 
the ﬁnal quarter of 2005 the balance of the fluid
systems business was held back by lower automotive
oe volumes
fluid systems opened two new facilities in 2005
stant commenced production at a plant in karvina
czech republic and schraderbridgeport completed 
the build of a 36000 square feet valvemanufacturing
facility in suzhou china there were signiﬁcant start
up costs incurred during the year as production levels
picked up and extra capacity was added to the plants 
other industrial  automotive 
sales and proﬁt from operations in 2005 were
signiﬁcantly ahead dexter recovered from lower
volumes in the ﬁrst quarter of the year to deliver a
strong performance assisted by federal emergency
management agency “fema” sales in the ﬁnal
quarter of the year the acquisition of the le
technologies business in march 2005 added to the
product offering and this business is already making 
a signiﬁcant contribution ahead of our expectations 
the dearborn midwest business performed well
and has a strong order backlog for 2006
ideal and plews were both impacted by higher raw
material costs for brass and pvc that have been
difﬁcult to pass on to customers the ideal business
opened its suzhou plant in china in the third quarter
of 2005
building products
during 2005 sales in building products increased by
116 per cent to £8838 million 2004 £7918 million
and proﬁt from operations before restructuring
initiatives was ahead by 118 per cent at £786 million
2004 £703 million this was achieved through good
contributions from the acquisitions price increases
made to offset higher material costs successful new
product introductions and the continued strength 
in the residential housing market the operating
margin in the building products group remained 
at 89 per cent
air systems components
sales were up by 148 per cent on 2004 the hart 
 cooley business capitalised on the continued
strength in the united states residential housing
market and in january 2005 acquired milcor this
business has now been fully integrated and made 
a strong contribution to sales and proﬁt and has
presented opportunities for crossselling of products
with hart  cooley and of sourcing lowcost materials
from its china manufacturing operation 
despite the slow nonresidential market the order
intake level remained healthy and beneﬁtted from both
new product introductions and new customer wins 
in the third quarter ruskin successfully completed the
acquisition of nrg industries inc and is making good
progress in integrating this business and developing
growth opportunities
there were a number of plant rationalisations
during the year with the closure of the tabor city and
englewood facilities and the transfer of production 
to other facilities in the business ruskin commenced
production at its new facility in monterrey mexico
operating and financial review
31
capital expenditure and depreciation
depreciation capital expenditure
30 60 90 120 150
group
bp
ia
0
1433
1191
1195
951
238
235
 £m
operating margins
before restructuring initiatives
2005 2004
3 6 9 12 15
 
group
bp
ia
0
97
102
111
118
89
89 operating and financial review
financial review continued
tomkins plc annual report 2005
operating margins in 2005 were impacted by costs
associated with the plant rationalisations although 
the reduced cost base should see improved margin
performance in 2006 
other building products
a strong performance in the second half of 2005
resulted in fullyear sales ahead by 80 per cent
compared to 2004 lasco bathware achieved strong
sales growth and doubledigit operating margins
before restructuring initiatives driven by the record
level of housing starts in the united states residential
market and the successful launch of several new
products such as the ‘contours
™’ range of luxury
whirlpools and showers
lasco fittings achieved yearonyear improvements
in sales and proﬁt with higher volumes from new
product introductions and market share gains new
product sales accounted for over 30 per cent of the
growth in sales in 2005 the business experienced
signiﬁcant pricing pressure in 2005 from the increased
cost of pvc but was able to implement a series 
of price increases
the philips doors and windows business had a
good fourth quarter and fullyear sales were ahead
compared to 2004 the operating margin in the
business was impacted by a baddebt writeoff of 
19 million in the ﬁrst quarter of the year
events impacting our financial
performance and position
restructuring initiatives
net restructuring initiatives were at £118 million
2004 £180 million restructuring costs were
£203 million 2004 £205 million and primarily
related to the transfer of the manufacturing capability
from the wiper systems facility in pontypool to more
cost competitive locations and the rationalisation 
of production facilities at air systems components
the disposals and exit of businesses in 2005
resulted in a proﬁt of £85 million 2004 £25 million
of this £90 million related to a proﬁt on the disposal
of the gutter helmet business and the balance arose
from the disposal of businesses and properties as part
of the restructuring initiatives
profit before tax
tomkins adopted ias 32 “financial instruments
disclosure and presentation” and ias 39 “financial
instruments recognition and measurement”
32
£m
148
327
155 291
04
57
58
£m
ebitda
2
capex net
exit of 
business
in 2004
post
employment
beneﬁt
obligations
working
capital 
and 
provisions
interest and
preference
dividends
other
movements
1121
£183
1034
£182
2004 2005
307
tax
bridge of free cash flow to equity
1
1 free cash ﬂow to equity is deﬁned as cash ﬂow before acquisitions and disposals ordinary dividends and ordinary share movements
2 ebitda is deﬁned as proﬁt from continuing and discontinued operations including share of proﬁts of associates less gain on disposal of businesses
depreciation amortisation and impairment of property plant  equipment
building products
2005 2004
revenue £8838m £7918m
proﬁt from operations
1
£786m £703m
operating margin
1
89 89
ebitda margin
2
116 120
average net operating assets £1703m £1757m
return on average net operating assets
1
462 400
return on average invested capital
3
140 126
capital expenditure £238m £163m
depreciation £235m £248m
capex to depreciation times 10 07
cash generation
4
£583m £812m
cash conversion
5
757 1201
employees 11750 11307
1 before restructuring initiatives
2 based on earnings before interest tax depreciation amortisation and restructuring initiatives
3 return on invested capital is calculated for total operations before restructuring initiatives
4 net cash inﬂow from operating activities less net cash outﬂow from capital expenditure before gains on disposal and exit of businesses
5 cash generation to proﬁt from operations before gains on disposal and exit of businesses tomkins plc annual report 2005
prospectively from 2 january 2005 as a result proﬁt
before tax for the year ended 31 december 2005
shown on the face of the income statement is not
directly comparable to proﬁt before tax year ended 
1 january 2005 in 2005 the preference dividend 
is disclosed within interest payable while in 2004
it is shown below proﬁt for the period in addition 
fair value gains on derivative instruments are 
included as other finance income in 2005 while
this adjustment was not recognised in 2004
the table above sets out the effect of the
adjustments in 2005 and shows the movement 
on proﬁt before tax on a comparable basis
interest payable investment income and 
finance income
interest payable for 2005 was £835 million 2004
£648 million this includes the interest cost of 
£405 million 2004 £433 million related to our
liability for post employment beneﬁts and £163 million
2004 nil of dividends payable on the convertible
cumulative preference shares reﬂecting the
reclassiﬁcation of preference dividends to interest
payable bank and other interest payable was 
£267 million 2004 £215 million
investment income was £403 million 2004 
£388 million which included the expected return 
on post employment beneﬁts plan assets of £346
million 2004 £324 million bank and other interest
receivable was £57 million 2004 £64 million
fair valuation gains arising on derivative hedging
instruments of £42 million have been recognised
under other finance income following the adoption 
of ias 32 and ias 39 prospectively from 2 january 2005
earnings per share
basic earnings per share from total operations were
2492 pence 2004 2393 pence an increase of 
41 per cent fully diluted earnings per share from 
total operations were 2379 pence 2004 2281 pence
dividends 
the dividends to our preference shareholders are dollar
denominated and in 2005 the sterling equivalent was
£163 million 2004 £156 million 
the dividends to holders of ordinary shares for
2005 were 1323 pence 2004 1260 pence an
increase of 50 per cent the dividend earnings cover
was 19 times and cash cover was 10 times cash
cover is based on cash ﬂow after interest tax and
preference dividends free cash ﬂow to equity
compared to ordinary dividends paid 
the group continues to emphasise the importance of
cash ﬂow generation in our businesses which supports
its progressive dividend policy
capital expenditure
net capital expenditure in 2005 was £1195 million
2004 £1522 million gross capital was 
£1433 million 2004 £1577 million representing
12 times depreciation 2004 14 times proceeds 
from asset disposals amounted to £238 million 
2004 £55 million in 2006 net capital expenditure 
is expected to be around £150 million
working capital
working capital net of provisions was £5138 million
2004 £4298 million the average working capital 
as a percentage of moving annual total sales for the
year was 140 per cent compared to 129 per cent in
2004 the increase in working capital during the year
was due in part to the change in the us dollarsterling
exchange rate at the respective balance sheet dates
and the impact of the acquisitions and disposals 
of the balance of the movement this was primarily 
due to higher inventory levels in the fluid power
business in order to respond to service level
requirements of customers
cash flow 
in 2005 operating cash ﬂow was ahead of 2004 by
194 per cent the cash effect of increased proﬁt from
operations was offset by the effect of an increase 
of £205 million in pension contributions however
capital expenditure reduced by £327 million net
expenditure on acquisitions and disposals in the 
period was £740 million net debt also increased 
due to the impact of the strengthening of the us
dollar and the fair value adjustment to the group’s
outstanding bonds overall net debt excluding the
reclassiﬁcation of preference shares amounted to
£3345 million 
the table overleaf shows the net debt movement 
for the year
for a reconciliation of the net debt movement to
the consolidated cash ﬂow statement please see the
supplemental cash flow analysis on page 123
cash generation is calculated on net cash inﬂow
from operating activities less net cash outﬂow from
capital expenditure before gains on disposal and exit
of businesses cash conversion is cash generation to
proﬁt from operations before gains on disposals and
exit of businesses cash conversion increased to 753
per cent 2004 640 per cent
operating and financial review
33
profit before tax
£ million 2005 2004
proﬁt before tax 2577 2603
adjust for
preference dividend note 5 to ﬁnancial statements 163 –
fair value gains on derivative instruments note 7 to ﬁnancial statements 42 –
proﬁt before tax on a comparable basis 2698 2603
increase 36 – operating and financial review
financial review continued
tomkins plc annual report 2005
funding and distribution policy
funding for sustaining investment and investment for
organic growth is met initially from internally generated
cash ﬂow cash ﬂow after interest tax and preference
dividends the net cash ﬂow available for equity
holders after organic investment together with debt
ﬁnance available within the debt capacity of the group
will determine the funding available for acquisitions and
distributions the debt capacity of the group is
determined by our objective to maintain a stable 
capital structure and the group’s investment grade 
debt rating
we aim to grow the dividend steadily and
progressively in line with the overall longterm cash
generation of the group when the group generates
surplus cash and existing investment needs are met
then the economics of share repurchases or special
dividends to shareholders will be examined
economic performance
accounting metrics
we assess the accounting return on capital invested 
in our businesses in two ways
return on net operating assets is a pretax measure 
of the return on the book value of capital employed 
in the businesses and represents a measure of the
ﬁnancial productivity of the cash invested in the
operating assets of the business
return on invested capital is an aftertax measure 
of the return on the invested capital employed in the
business taking into account the goodwill associated
with the acquisition of the business and represents a
measure of the ﬁnancial return on the total ﬁnancial
investment in the business 
the charts below set out the return on average
invested capital and the return on average net
operating assets for each business and the group
cash flow metrics
we assess the cash ﬂow performance of each of our
businesses based on the percentage of proﬁt from
operations before gainslosses on disposal and exit 
of businesses converted to operating cash ﬂow cash
conversion the cash conversion for each of the business
groups and for the group as a whole is shown below
economic metrics
to track the economic performance of the group 
we look at cash added value and economic return
cash added value is an absolute measure of value
created based on aftertax ebitda less sustaining
34
net debt movements
2005 2004
£ million £ million
opening debt excluding preference shares 2445 2647
adjustment for the adoption of ias 32 and ias 39 38 – 
adjusted opening debt excluding preference shares 2407 2647
cash generated from operations 3365 3339 
capital expenditure net 1195 1522
operating cash ﬂow 2170 1817 
tax 705 398
interest and preference dividends 371 314
other movements 60 16 
free cash ﬂow to equity shareholders 1034 1121 
acquisitions and disposals 740 27
ordinary dividends 994 945
ordinary share movements 09 29
foreign currency translation 281 82 
net funds movement 972 202 
non cash movements 34 – 
closing debt excluding preference shares 3345 2445
see page 123 for the reconciliation to the supplemental cash flow analysis
cash conversion
0 20 40 60 80 100 120
group
bp
ia
640
552
1201
2005 2004

753
687
757
return on average invested capital
2005 2004

0 2 4 6 8 10 12 14
group
bp
ia
116
103
102
119
140
126 tomkins plc annual report 2005
investment and a charge for cost of capital the 
charge for cost of capital is based on the weighted
average cost of capital applied to the average book
value of investment in the business including goodwill
associated with acquisitions
the economic return is based on cash added value
expressed as a percentage of the average book value
of investment
the trends of cash added value and economic
return are used to assess the allocation of capital 
over the longterm
weighted average cost of capital
the weighted average cost of capital is the weighted
average by value of the aftertax costs of each of the
elements of the group’s capital structure
the cost of equity is calculated using the capital
asset pricing model with the riskfree rate based on 
a tenyear sterling government bond rate an equity
beta of one and an equity market risk premium of 
4 per cent the value of equity is the current market
value of the ordinary shares of tomkins
the cost of debt comprises both the cost of the
perpetual preference shares and the cost of the
group’s net debt after tax at a normalised tax 
rate of 30 per cent the value of net debt used is 
the actual current sterling value of the group’s net 
debt the value of the preference shares is the 
current sterling equivalent nominal value of the
preference shares 
a graph showing the weighted average cost of
capital during the year is shown below
research and development
applied research and development is important to the
group’s manufacturing businesses the group maintains
development centres in japan europe and the united
states businesses within the group are encouraged to
review their products regularly and to develop them in
accordance with perceived market trends the group’s
measured expenditure on research and development
was £471 million in 2005 2004 £513 million of
which £04 million was capitalised 2004 £nil 
liquidity and capital resources
our mediumterm aim is to maintain an appropriate
mix of equity and debt to ensure an efﬁcient capital
structure consistent with our desired investment grade
ﬁnancial proﬁle our debt capacity is assessed within
this aim our longterm debt ﬁnance requirements are
also deﬁned within these parameters and with an
understanding of our future ﬁnancial needs for
investment dividends and acquisitions
treasury management
treasury responsibilities and philosophy
the primary responsibilities of the central treasury
function are to procure the group’s capital resources
maintain an efﬁcient capital structure and
management of the group’s liquidity foreign
exchange interest rate insurance and pensions 
risks on a groupwide basis
the central treasury function operates within 
strict policies and guidelines approved by the board
compliance with these policies and guidelines 
is monitored through the regular reporting of 
treasury activities
a key element of our treasury philosophy is that
funding interest rate and currency risk decisions and
the location of cash and debt balances are determined
independently from each other for example the
group’s debt requirements are met by raising funds 
in the most favourable markets with the desired
currency proﬁle of net debt being achieved by entering
into foreign exchange contracts where necessary
similarly the desired interest rate maturity of net 
debt is achieved by taking account of all debt and 
cash balances together with any foreign exchange
transactions used to manage the currency proﬁle 
of net debt we operate systems to ensure that all
relevant assets and liabilities are taken into account 
on a groupwide basis when making these decisions
this portfolio approach to ﬁnancial risk management
enables our activities in these areas to be carried 
out effectively and efﬁciently and with a high degree 
of visibility 
details of corporate bonds and emtn programme
we have a euro medium term note “emtn”
programme under which tomkins may issue bonds up
to a total maximum principal amount of £750 million
our initial bond under the programme in december
2001 was for £150 million with a tenyear maturity
and was issued at a coupon of 8 per cent
in september 2003 we issued a further 
£250 million bond with a twelveyear maturity at a
operating and financial review
35
return on average net operating assets
0 10 20 30 40 50
group
bp
ia
2005 2004

339
294
286
353
462
400
2005 2004 
weighted average cost of capital
dec nov oct sep aug jul jun may apr mar feb jan
60
68
76
84
92
100
 £900 million other cash ﬂows during the year 
are detailed in note 14 to the financial statements 
as the majority of the group’s debt is denominated 
in us dollars reported net debt also increased by
£281 million as a result of the strengthening of 
the us dollar during the period
we operate in a wide range of markets and
geographic locations and as a result the seasonality 
of our borrowing requirements is low underlying
cyclicality before capital expenditure is driven 
principally by the timing of our ordinary and
convertible cumulative preference dividends 
and interest payments
funding requirements for investment commitments
and authorisations
at 31 december 2005 we had surplus cash balances 
in excess of the operational needs of our businesses
accordingly our present policy is to fund new
investments ﬁrstly from existing cash resources 
and then from borrowings sourced centrally by
tomkins finance plc it is our intention to maintain
surplus undrawn borrowing facilities sufﬁcient 
to enable our credit ratings to be maintained 
and to enable us to manage the group’s liquidity
through the operating and investment cycle
we maintain a regular dialogue with the rating
agencies and the potential impact on our credit 
rating is taken into consideration when making
capital allocation decisions
current versus prospective liquidity
at 31 december 2005 our committed 2010 
£400 million multicurrency revolving credit facility 
was drawn by £1199 million we had a further 
£2444 million of other mainly uncommitted
credit facilities and ﬁnance leases of which 
£372 million was drawn for cash and £759 million
was utilised through the issuance of bank guarantees
and standby letters of credit total headroom under 
the facilities was £5451 million in addition to cash
balances of £2362 million if all of our uncommitted
credit facilities were to have become unavailable 
our total committed borrowing headroom would 
have been £3110 million in addition to our cash
balances it is our policy to retain sufﬁcient liquidity
throughout the capital expenditure cycle to maintain
our ﬁnancial ﬂexibility and to preserve our investment
grade credit rating
coupon of 6125 per cent the proceeds of this bond
issue were used to ﬁnance the early redemption of the
convertible cumulative preference shares which 
took place in august 2003 
credit rating
in december 2001 we established longterm credit
ratings with moody’s and standard  poor our ratings
have remained unchanged since this date at baa2 
and bbb respectively they cover our emtn programme
and £250 million bond issued by tomkins finance plc
a directly owned subsidiary of tomkins plc that carries
out all of the group’s central treasury activities
together with our £150 million bond issued by 
tomkins plc we also have a shortterm rating of 
p2 with moody’s our aim is to manage the 
group’s capital structure to preserve these ratings 
maturity profile of borrowings and 
borrowing facilities
the chart below shows the maturity proﬁle of our
borrowing facilities
our committed bank borrowing facilities mainly
comprise a multicurrency revolving credit facility 
of £400 million the maturity of which was extended 
in august 2005 from february 2009 to august 2010
borrowing facilities are monitored against forecast
requirements and timely action is taken to put in 
place renew or replace credit lines our policy is 
to reduce ﬁnancing risk by diversifying our funding
sources and by staggering the maturity of 
our borrowings 
levels of borrowings and seasonality
during 2005 our gross and net borrowings 
excluding the impact of ifrs adjustments and
convertible cumulative preference shares increased
marginally with gross debt of £5929 million and net
debt of £3345 million on 31 december 2005 2004
£4348 million and £2445 million respectively the
higher level of gross debt relative to net debt at the
end of the year arose principally as a result of the
payment of dividends from various subsidiaries to
group companies located in the united states 
under the internal revenue code section 965 
the peak level of net debt during the year was 
£3855 million expenditure on acquisitions of 
£1013 million less disposal receipts of £293 million
contributed to an overall increase in net debt of 
operating and financial review
financial review continued
tomkins plc annual report 2005
36
maturity of borrowings  borrowing facilities
0
200
400
600
800
1000
1200
dec 05 dec 06 dec 07 dec 08 dec 09 dec 10 dec 11 dec 12 dec 13 dec 14 dec 15
leases bonds committed bank facilities uncommitted bank facilities
 £m tomkins plc annual report 2005
maximising returns on cash balances
our central treasury function is responsible for
maximising the return on surplus cash balances 
within liquidity and counterparty credit constraints
imposed by our boardapproved liquid funds policy
this is done where practical by controlling directly 
all surplus cash balances and pooling arrangements 
on an ongoing basis and by reviewing the efﬁciency 
of all other cash balances across the group on a
weekly basis at 31 december 2005 £1646 million 
of cash was under the direct control of group treasury
our weighted average cost of debt at 31 december
2005 was 65 per cent 2004 65 per cent 
the net interest charge for the year to 31 december
2005 of £390 million was £239 million higher than
the charge for the previous year reported under uk
gaap  this increase was principally due to ifrs
adjustments including the reclassiﬁcation of dividends
payable on convertible cumulative preference shares 
to interest expense £163 million post employment
beneﬁts expense net of the interest cost on beneﬁt
obligations and the expected return on plan assets
£59 million and fair value gains relating to derivative
ﬁnancial instruments £42 million the remaining
increase in the interest charge of £59 million
comprises mainly an increase in average interest rates
over the year £26 million and higher average net
debt balances £33 million
at 31 december 2005 our total cash and
investments were £2362 million of this amount
£1408 million was invested in shortterm deposits 
by our treasury department £75 million of cash 
was held in our captive insurance company tomkins
insurance limited £332 million of cash was held in
our asian unitta companies and £543 million of cash
was held in centrally controlled pooling arrangements
and with local operating companies £2138 million 
of our cash was interest earning our policy is to 
apply funds from one part of the group to meet 
the obligations of another part wherever possible 
to ensure maximum efﬁciency of the group’s funds 
no material restrictions apply that limit the application
of this policy it is anticipated that surplus cash in
excess of that required for operating purposes held in
operating companies will be repatriated or reinvested
in new investments during 2006 
cash flow and net debt
we do not anticipate any material longterm
deterioration in our overall liquidity position in 
the foreseeable future 
contractual obligations and financial
commitments
at 31 december 2005 we had £759 million of bank
and insurance company issued bonds guarantees and
standby letters of credit in issue these were issued
primarily in favour of insurance companies to cover
potential workers’ compensation claims in the united
states in the course of normal business in addition 
to other contractual counterparties for operational
purposes our annual operating lease rentals were
£207 million in 2005 2004 £215 million
foreign currency transaction exposures
the foreign currency transaction exposures in the
business are protected with forward currency
purchases and sales these are put in place when
foreign currency trading transactions are committed 
or when there is a high likelihood of such transactions
arising all foreign exchange contracts are carried out
by our central treasury function except in cases where
this is prohibited by local regulations in these cases
local transactions are reported to central treasury on 
a systematic basis 
our principal net currency transaction exposures
arising during the year ended 31 december 2005 
were us dollar to sterling £319 million us dollar 
to mexican peso £300 million and sterling to euro
£509 million the impact of the movement in
average exchange rates between 2004 and 2005 
on the group’ s transaction exposures was £04 million
negative under the group’s foreign exchange
transaction exposure policy certain exposures 
are hedged compared to the average actual rates 
for the year the effect of these hedging activities 
was a gain of £29 million
foreign currency translation exposures
the majority of the group’s activities are transacted in
us dollars but the reporting currency of the group is
sterling this gives rise to potential currency translation
exposures in the balance sheet income statement and
cash ﬂow the group’s net borrowings are generally
retained in proportion to the currencies in which the
group’s assets are denominated to hedge the foreign
currency translation exposure arising from the group’s
overseas investments the proportion of overseas
operating and financial review
37
levels of borrowings
committed uncommitted total
£ million £ million £ million
available borrowing facilities 8147 2341 10488
cash drawings 5314 372 5686
bonds standby letters of credit bank guarantees – 759 759
total headroom 5451
less uncommitted facilities 2341
committed headroom 3110
cash balances incl cash investments 2362 operating and financial review
financial review continued
tomkins plc annual report 2005
investments effectively funded by shareholders’ equity
is not hedged the table below shows the net debt
proﬁle by currency
we do not hedge foreign currency proﬁt and loss
translation exposures and the reported results may 
be affected by the translation effect of currency
ﬂuctuations we estimate a movement of 
10 per cent in the us dollarsterling exchange rate has
an impact on reported proﬁt from operations of
around 7 to 8 per cent the impact on reported
earnings per share is partly offset to the extent that
interest arises on foreign currency net borrowings
interest payments on foreign currency net
borrowings are funded with cash ﬂows generated 
by the corresponding foreign currency investments 
the main potential impact of movement in the 
us dollarsterling exchange rate movement is the 
effect on dividends much of the group’s cash ﬂow 
is generated in us dollars from the cash ﬂows
generated by overseas investments but dividends on
ordinary shares are paid in sterling by converting the
foreign currency cash ﬂows at the time of payment 
of the dividend
information on our use of derivatives and 
ﬁnancial instruments is given in note 28 to the
ﬁnancial statements
interest rate risk management
our central treasury function manages the interest rate
proﬁle within the policy established by the board 
this is achieved by considering the portfolio of all 
of our interest bearing assets and liabilities across 
the group our net desired interest rate proﬁle in 
each currency is then managed by entering into
interest rate swaps options and forward rate
agreements at 31 december 2005 the interest rate
maturity proﬁle of our canadian dollar euro and
sterling net debt was less than three months
the graph below shows our us dollar interest rate
maturity proﬁle as at 31 december 2005
borrowing covenants
we are subject to covenants representations and
warranties commonly associated with investment
grade borrowings on our committed 2010 
£400 million multicurrency revolving credit facility 
our £150 million 2011 bond and our £250 million
2015 bond 
we are subject to two ﬁnancial covenants under
our committed 2010 £400 million multicurrency
revolving credit facility the ratio of net debt to
consolidated ebitda must not exceed 25 times 
and the ratio of consolidated proﬁt from operations 
to consolidated net interest charge must not be less
than 30 times throughout 2005 we have been
comfortably within these limits these ﬁnancial
covenants are calculated by applying uk gaap frozen
as at 31 december 2002 and are therefore unaffected
by accounting changes associated with the transition
to international financial reporting standards
pensions 
risk management
management of the group’s deﬁned beneﬁt pension
risks is the responsibility of our group treasury function
we are seeking to improve the management of our
deﬁned beneﬁt pension risks and a number of
changes consistent with this objective have taken 
place during 2005
a primary objective is to identify and manage the
risk of both the assets and liabilities of the deﬁned
beneﬁt pensions plans each of our deﬁned beneﬁt
pensions plans is therefore under review with a view 
to identifying potential risk and cost reduction
measures as these reviews are completed they 
will be discussed with the respective trustee boards
and agreement sought to maintain appropriate risk
management and cost control measures
on 1 december 2005 the tomkins north american
retirement board redenominated existing ﬁxed income
assets in our us deﬁned beneﬁt pension plans
amounting to £884 million and entered into £1793
million of us dollar denominated interest rate swaps
with a combined average duration of 115 years 
this has resulted in a hedge of the interest rate risk
inherent in the accrued beneﬁt obligation “abo” of
38
us dollar interest rate maturity profile
 £m
0
60
120
180
240
300
360
dec 05 dec 06 dec 07 dec 08 dec 09 dec 10 dec 11 dec 12 dec 13 dec 14 dec 15
fixed interest maturity 
2005 2004
£ million £ million
sterling 77 140
us dollar 2356 1642
euro 425 259
canadian dollar 675 585
other 188 181
total 3345 2445 tomkins plc annual report 2005
the plans whereby future changes in the abo value
arising from changes in the interest rate will be
matched by equal and opposite movements in the
value of the assets thus protecting the deﬁcit from
future interest rate changes reporting procedures have
been established to measure the effectiveness of this
hedging arrangement we are currently evaluating the
merits of hedging the interest rate and other risks of
the uk and canadian deﬁned beneﬁt pension plans
as at 31 december 2005 the value of the group’s
deﬁned beneﬁt pension liabilities was £7088 million
2004 £6054 million the graph above shows the
attribution of the increase in the liabilities during the
year of £1034 million
funding policy
the group remains committed to funding pensions
responsibly in the uk this means satisfying the
funding agreements made with the trustees of the
schemes in order to eliminate deﬁcits over a reasonable
period of time in the united states funding objectives
generally seek to avoid pension beneﬁt guaranty
corporation “pbgc” variable rate premiums and
accelerated funding charges mandated by the
employee retirement income act of 1974 erisa 
and remain above the erisa required minimum
funding levels accordingly most of the united states
plans are funded on the basis of reaching or exceeding
a 90 per cent funded level on a current liability basis
tomkins recognises its responsibility to fund deﬁned
beneﬁt pension plans deﬁcits and views these deﬁcits
as being debtlike in nature accordingly where
beneﬁcial tomkins plc intends to issue guarantees in
respect of certain of the uk deﬁned beneﬁt pension
plan deﬁcits in order to improve the credit standing 
of these plans this will also have the effect of
minimising the cost of the pension protection fund’s
riskbased levy
cash contributions to the deﬁned beneﬁt pension
plans in 2005 were £445 million 2004 £240 million
and £39 million was charged to the income statement
2004 £83 million the market value of the related
assets was £5271 million 2004 £4417 million
resulting in net deﬁned beneﬁt pension liabilities
before the effect of the asset ceiling and before tax 
of £1817 million 2004 £1637 million the graph
below shows the attribution of the increase in the
market value of assets during the year of £854 million
actuarial assumptions
actuarial assumptions are reviewed on a regular basis
and updated where appropriate since 2004 mortality
assumptions have been reviewed and updated where
recommended by our actuaries tomkins believes that
all deﬁned beneﬁt pension plans reﬂect appropriate
mortality assumptions
of our total deﬁned beneﬁt pension plan liabilities
of £7088 million £3054 million relates to beneﬁts that
are deferred or currently being drawn £2351 million
relates to plans frozen to further service accrual and 
a further £346 million relates to plans with beneﬁts
based on length of service rather than changes in salary
scale therefore £5751 million of liabilities are not
sensitive to changes in salary scale all deﬁned beneﬁt
pension plans are closed to new entrants and therefore
the impact of changes in salary scale is limited 
£1337 million or 189 of the total deﬁned beneﬁt
pension plans liabilities are sensitive to salary scale 
the table on the following page shows the estimated
sensitivity of the deﬁned beneﬁt pension plans liabilities
operating and financial review
39
projected benefit obligation for defined benefit pension liabilities
500
550
600
650
700
750
2004 liability
interest cost
current service cost
beneﬁts paid
actuarial gains and losses
foreign currency translation
other
2005 liability
6054
340 61 407
610
447 17 7088
£m
market value of pension assets
250
300
350
400
450
500
550
£m
2004 fair value
expected returns 
on plan assets
return on assets in excess of expected return
contributions
beneﬁts paid
foreign currency  translation
other
2005 fair value
4417
346 151
445 407 320 01 5271 operating and financial review
financial review continued
tomkins plc annual report 2005
to changes in the mortality and salary scale 
the impact of changes in the discount rate and
expected return on assets is shown in note 31 to 
the ﬁnancial statements
investment policy
investment of assets within the deﬁned beneﬁt
pensions plans is the responsibility of independent
trustee boards over which tomkins has varying degrees
of inﬂuence based on national regulations in order 
to clarify its preferences regarding the investment of
assets by the trustee boards tomkins plc has set out 
a statement of its investment preferences this has
been communicated to the north american retirement
board which oversees our largest deﬁned beneﬁt
pension plans and will be communicated progressively
to each of the other trustee boards with responsibility
for deﬁned beneﬁt pensions plans as these plans are
reviewed during 2006 the statement of investment
preferences is based on an underlying philosophy that
assets should ﬁrst be used to hedge risks implicit in 
the associated pensions liabilities and to the extent 
that assets are not invested for this purpose it is the
preference of tomkins plc that the assets are invested
in investment grade bonds andor a broad based local
equity index 
the performance of assets and liabilities in deﬁned
beneﬁt pensions plans is measured and reported to
tomkins’ board and used as the basis for dialogue
between tomkins and trustee boards
taxation 
the overall objective of the group tax function is 
to plan and manage the tax affairs of the group
efﬁciently within the various local tax jurisdictions 
of the world so as to achieve the lowest tax cash cost
consistent with compliance with the local tax regulations
the total tax charge for the year relating to
continuing activities was £590 million 2004 
£511 million this represents an effective tax rate 
of 229 per cent 2004 196 per cent on proﬁt before
tax of £2577 million £2603 million in 2005 proﬁt
before tax is stated net of preference dividends of
£163 million following the prospective adoption 
of ias 39 whereas in 2004 preference dividends are
treated as a distribution in 2005 the proﬁt before tax
and before preference dividends was £2740 million 
2004 £2603 million the effective rate of tax in
2005 on proﬁts before tax and before preference
dividends was 215 per cent 2004 196 per cent
during 2005 there was a release of provisions for
uncertain tax positions of £587 million this followed
the successful resolution of outstanding tax issues in
the united states the expiry of time during which tax
audits could be performed in certain tax jurisdictions
and the change of views on the likely outcome of
challenges by various tax authorities in addition during
the year there were other tax charges amounting 
to £301 million included in arriving at the overall 
tax charge for the group prior to these adjustments
the total tax charge for 2005 would have been 
£876 million representing an effective rate of 
320 per cent applied to proﬁt before tax and before
preference dividends and 34 per cent applied to 
proﬁt before tax the tax rate for 2006 is expected 
to be around 30 per cent
generally the charge for taxation is affected by 
the varying tax rates in different jurisdictions applied 
to taxable proﬁts and the mix of those proﬁts by the
rules impacting deductibility of certain costs such 
as ﬁnance costs and by the rules relating to double
taxation relief
we have been successful in minimising the cash tax
cost of the group however as countries around the
world increase their focus on taxation as a means of
raising revenue for their local economies the tax cash
cost of multinational corporations is likely to increase
over time we will continue to plan the group’s tax
affairs efﬁciently to minimise the tax cash cost but 
a gradual increase is likely 
we manage the group’s tax affairs and provisions
for uncertain tax positions in accordance with the
group’s best estimate of the likely outcome of a
challenge by the authorities
risk factors
this document contains certain forwardlooking
statements which involve risk and uncertainty as they
relate to future events and circumstances our business
is affected by a number of factors not all of which are
in tomkins’ control this section highlights speciﬁc
areas where tomkins is particularly sensitive to business
risk our ﬁnancial condition or results of operations
could be materially adversely affected by any of these
risks additional risks not currently known to us or
risks that we currently regard as immaterial could 
also have a material adverse effect on our ﬁnancial
condition or the results of operations
as a part of the performance management
framework of the group each business considers
strategic operational commercial and ﬁnancial risks
and identiﬁes risk mitigation actions the group has
categorised the foregoing risks as those relating to
• the markets within which the group operates
• the competitive position of the group and its
businesses and
• the ﬁnancial position of the group
risk can be considered either as downside risk the
risk that something can go wrong and result in a
ﬁnancial loss or ﬁnancial exposure for the group or
volatility risk volatility risk is the risk associated with
40
assumption assumption impact on estimated
change impact
life increase by liabilities increase by
expectancy 1 year 27 
service increase by 
cost 25
interest increase by
cost 29
salary scale increase by liabilities increase by
05 06 tomkins plc annual report 2005
uncertainty which means there may be an opportunity
for ﬁnancial gain as well as potential for loss
risks relating to the markets within which the
group operates
there are a number of risks in the markets in which we
operate that could have a material adverse effect on our
business ﬁnancial condition or results of operations
cyclical nature of the markets – approximately 
70 per cent of our sales are to markets where the
demand is ultimately affected by consumer spending
and consumer preferences 
improvement in vehicle component life – the
greater quality performance and reliability of the
components we manufacture improves service life 
and could affect demand in the aftermarket 
business segment 
regulatory environment – in the industries in 
which we operate we are subject to a variety 
of environmental regulations particularly relating 
to waste water discharges air emissions solid waste
management and hazardous chemical disposal 
operations in foreign and emerging markets –
we operate principally in the automotive industrial
and constructionrelated markets in a number of
geographic regions of the world including emerging
markets operations in emerging markets may present
additional risks 
customer demand – our industrial  automotive
business segment is directly impacted by global
automotive production the automotive industry 
is characterised by overcapacity and ﬁerce competition 
in north america it is also affected by signiﬁcant
pension and healthcare liabilities north american
automotive oems have recently announced production
cuts for a number of platforms
risks relating to the competitive position of the
group and its businesses
there are a number of risks to our competitive position
that could have a material adverse effect on our
business ﬁnancial condition or results of operations
industry consolidation may result in more
powerful competitors and fewer customers –
some of our customers and some of our competitors
in a number of our markets especially in the
automotive aftermarket and to a lesser extent in the
markets of the air systems components business unit
are consolidating to achieve greater scale or market
share such changes could affect our customers and
their relationship with us as our customers become
larger and more concentrated they could exert pricing
pressure on all suppliers including ourselves
revenues are generated from ten major customers
in the industrial  automotive business –
244 per cent of our total revenues come 
from the top ten customers of our industrial 
 automotive business 
price reductions by automotive customers –
211 per cent of our sales are to automotive oems 
it is normal practice for such customers to seek
reductions in their costs from their suppliers over the
duration of any committed supply arrangement 
to meet any such requests for price reductions 
whilst maintaining our proﬁt margins 
we have to achieve corresponding cost savings in our
business by strategic sourcing of raw materials and by
improving production and manufacturing efﬁciencies
increased competition from low cost producers –
manufacturers in the developed economies of the
world are increasingly facing competition from low
cost sources in the developing economies of the world
increasing raw material and energy costs – steel
aluminium oilbased resins and energy are a signiﬁcant
part of our cost structure and increases in these costs
may impact competitiveness
reliance on certain raw materials and suppliers 
of key components – our productive processes do
require certain raw materials and components and
arrangements are in place to ensure continuity of
supply failure to obtain adequate and timely supplies
may impact our ability to service our customers
dependence on our strong relationships with
manufacturers’ representatives distributors and
wholesalers – deterioration in the relationships with
manufacturers’ representatives distributors and
wholesalers or a change in our products’ route to
market could affect sales
product liability claims due to the nature of our
products – we face an inherent business risk of
exposure to product liability claims in the event that a
failure of a product results in or is alleged to result in
bodily injury property damage or consequential loss 
technological changes – the markets for our
products and services are characterised by evolving
industry standards and changing technology that may
lead to commoditisation of our products continual
development of advanced technologies for new
products and product enhancements is an important
way in which we maintain acceptable pricing levels 
dependence on the continued operation of our
manufacturing facilities – our manufacturing
facilities are located principally in the united states 
and europe a major disruption of our critical
manufacturing facilities could result in signiﬁcant
interruption of our business and potential loss of
customers and sales
capacity reliability and security of our computer
operating and financial review
41
 for continuing operations excluding the release of provisions for
uncertain tax positions
tax charge and tax cost
tax charge cash tax cost
£m
0 20 40 60 80 100 120 140
2005
2004
1177
705
661
398 operating and financial review
financial review continued
tomkins plc annual report 2005
hardware software and telecommunications
infrastructure – we currently secure our networks 
by means of backup hardware virus protection and
other measures but any systems interruption could
lead to a reduction in performance or loss of services
a breach of network security could result in reduced
revenues and could have an adverse effect on our
businesses ﬁnancial condition or results from
operations our systems are vulnerable to damage 
or interruption caused by human error network 
failure natural disasters sabotage computer 
viruses and similar disruptive events 
intellectual property rights – our proprietary
technology is protected by patents and trade 
secrets which could be at risk if
• competitors are able to develop similar technology
independently
• our patent applications are not approved
• steps taken to prevent misappropriation or
infringement of our intellectual property are 
not successful or
• we do not adequately protect our intellectual
property
trade unions or other employment 
organisations – some of our employees are members
of trade unions and over many years we have been
able to maintain successful relationships with the
unions and employment organisations 
financial risks
there are certain ﬁnancial risks that could have 
a material adverse effect on our business ﬁnancial
condition or results of operations
cash ﬂow from subsidiaries – tomkins plc is a
holding company with no independent operations 
or signiﬁcant assets other than investments in and
advances to subsidiaries accordingly it depends upon
the receipt of sufﬁcient funds from its subsidiaries 
to meet its obligations including its ability to repay 
any amounts it borrows under its euro medium term
note programme or to pay its dividends the ability 
of tomkins plc to access that cash ﬂow may be limited
in some circumstances 
pension plans – we operate both deﬁned beneﬁt 
and deﬁned contribution pension plans the majority 
of which are in the united states and the united
kingdom the schemes were in deﬁcit by £1836
million as at 31 december 2005 deterioration in asset
prices or changes to longterm interest rates could lead
to an increase in the deﬁcit or give rise to an additional
funding requirement
healthcare and workers compensation – healthcare
and workers compensation are provided by certain
united states subsidiaries to current and former
employees healthcare costs in the united states 
are increasing at a faster rate than the general cost
inﬂation and these cost increases have to be absorbed
in the business
tax cash outﬂows – tomkins operates within multiple
tax jurisdictions and is subject to audit in those
jurisdictions these audits can involve complex issues
which may require an extended period of time for
resolution although provision has been made for 
such issues the ultimate resolution may result in tax
cash outﬂows 
funding growth – we may require capital to expand
our business implement our strategic initiatives and
remain competitive at present our established sources
of funding are through equity corporate bond markets
through the euro medium term note programme
bank debt and cash ﬂow from operations we believe
that the sources of funding currently available will 
be sufﬁcient to fund our operations if our plans 
or assumptions regarding our funding requirements
change however we may need to seek other sources
of ﬁnancing such as additional lines of credit with
commercial banks vendors public ﬁnancing or 
to renegotiate existing bank facilities 
bondholders’ rights – we have a euro medium 
term note programme under which tomkins may issue
bonds our bondholders have the right to require us to
redeem our outstanding bonds at par in the event of a
change of control of tomkins plc and also in the event
that our credit rating falls below investment grade as a
result of us making either acquisitions or disposals that
comprise more than 25 per cent of the group’s proﬁt
from operations in a twelve calendar month period 
fluctuations in currency exchange rates – we have
manufacturing facilities in and sell products to many
countries worldwide the principal currencies in which
we trade are us dollars canadian dollars euros and
sterling currency exchange movements can give rise
to the following risks
• transaction risk – this arises where sales or
purchases are denominated in foreign currencies 
and exchange rates can change between entering
into a purchase or sale commitment and completing
the transaction
• translation risk – this arises where the currency 
in which the results of an entity are reported differs
from the underlying currency in which business 
is transacted and
• economic risk – this arises where the manufacturing
cost base of a business is denominated in a currency
different from the currency of the market into which
the products are sold
critical accounting estimates
details of the group’s signiﬁcant accounting policies
are set out in the group’s consolidated ﬁnancial
statements prepared in accordance with ifrs that are
contained in the financial statements section when
applying the group’s accounting polices management
must make assumptions and estimates concerning the
future that affect the carrying amounts of assets and
liabilities at the balance sheet date the disclosure of
contingencies that existed at the balance sheet date
and the amounts of revenue and expenses recognised
during the accounting period management makes
these assumptions and estimates based on factors such
as historical experience the observance of trends in 
the industries in which the group operates and
42 tomkins plc annual report 2005
information available from the group’s customers and
other outside sources due to the inherent uncertainty
involved in making assumptions and estimates actual
outcomes could differ from those assumptions and
estimates an analysis of the key sources of estimation
uncertainty at the balance sheet date that have a
signiﬁcant risk of causing a material adjustment to the
carrying amounts of the group’s assets and liabilities
within the next ﬁnancial year is provided below
postemployment benefits
the group operates deﬁned beneﬁt pension plans in
several countries in particular in the united kingdom
and the united states the group also provides other
postemployment beneﬁts principally health and life
insurance cover to certain of its employees in north
america by way of unfunded deﬁned beneﬁt plans
the group accounts for these deﬁned beneﬁt
plans in accordance with ias 19 “employee
beneﬁts” whereby the cost of providing the beneﬁts
is determined based on actuarial valuations of the
plans that are carried out annually at the group’s
balance sheet date by independent qualiﬁed
actuaries as at 31 december 2005 the deﬁned
beneﬁt liability recognised on the group’s balance
sheet was £2963 million the deﬁned beneﬁt liability
comprises the net total for each plan of the present
value of the beneﬁt obligation minus any past service
costs not yet recognised minus the fair value of the
plan assets at the balance sheet date where a plan 
is in surplus the deﬁned beneﬁt asset recognised 
in respect of the plan may be subject to limitation 
by the socalled asset ceiling
as at 31 december 2005 the present value of the
beneﬁt obligation was £8215 million the beneﬁt
obligation is calculated using a number of
assumptions including future salary increases 
increases to pension beneﬁts mortality rates and 
in the case of postemployment medical beneﬁts 
the expected rate of increase in medical costs the
present value of the beneﬁt obligation is calculated by
discounting the beneﬁt obligation using market yields
on highquality corporate bonds where available or
government bonds at the balance sheet date as at 
31 december 2005 the fair value of the plan assets
was £5271 million the plan assets consist largely 
of listed securities and their fair values are subject to
ﬂuctuation in response to changes in market
conditions as at 31 december 2005 the group 
was unable to recognise a surplus of £19 million 
due to the effect of the asset ceiling
effects of changes in the actuarial assumptions
underlying the beneﬁt obligation effects of changes 
in the discount rate applicable to the beneﬁt
obligation and effects of differences between 
the expected and actual return on the plan assets 
are classiﬁed as actuarial gains and losses and are
recognised directly in equity during 2005 the group
recognised a net actuarial loss of £441 million
further actuarial gains and losses will be recognised
during the next ﬁnancial year for more information
please refer to the sensitivity analysis on page 40
impairment of noncurrent assets 
goodwill intangible assets and property plant and
equipment are tested for impairment whenever
events or circumstances indicate that their carrying
amounts might be impaired such events and
circumstances include the effects of restructurings
and new product development initiated by
management additionally goodwill and capitalised
development expenditure relating to a product that
is not yet in full production are subject to an annual
impairment test impairment testing of goodwill
requires the calculation of the value in use of the
cashgenerating units to which the goodwill 
is allocated due to the nature of the group’s
operations it is generally not possible to estimate
the recoverable amount for individual items of
property plant and equipment and impairment
testing of these assets is also usually based on the
value in use of the cashgenerating unit to which 
the asset belongs
value in use represents the net present value of 
the cash ﬂows expected to arise from the relevant
cashgenerating unit and its calculation requires
management to estimate those cash ﬂows and to
apply a suitable discount rate to them management
bases the estimated cash ﬂows on assumptions such
as the future growth in sales volumes future changes
in selling prices and expected changes in material
prices salaries and other costs discount rates used
are based on current market interest rates adjusted 
to reﬂect the risks speciﬁc to the relevant 
cashgenerating unit
as at 31 december 2005 the aggregate carrying
amount of goodwill intangible assets and property
plant and equipment was £11732 million during
2005 the group recognised an impairment loss 
of £53 million in respect of these assets further
impairment losses could arise within the next ﬁnancial
year if changes are necessary to the assumptions
underlying the estimated future cash ﬂows of 
cashgenerating units or if there are changes in 
market interest rates that affect the discount rates 
that are applied to those cash ﬂows 
inventory
inventories are stated at the lower of cost and net
realisable value with due allowance for excess
obsolete or slow moving items net realisable value 
is based on current assessments of future demand
market conditions and new product development
initiatives as at 31 december 2005 the carrying 
value of inventories was £4447 million during 2005
the group recognised an impairment loss on inventory
of £12 million further impairment losses may be
recognised within the next ﬁnancial year in response 
to changing circumstances
financial instruments
the group adopted ias 39 “financial instruments
recognition and measurement” prospectively from 
2 january 2005 accordingly the derivative ﬁnancial
instruments that the group holds for the purpose 
operating and financial review
43 operating and financial review
financial review continued
tomkins plc annual report 2005
of hedging its currency and interest rate exposures 
are recognised as assets and liabilities in the group’s
balance sheet measured at their fair value at the balance
date as at 31 december 2005 the group recognised 
a net asset of £160 million in respect of derivatives
the fair value of derivatives continually changes in
response to changes in prevailing market conditions
where permissible under ias 39 the group uses
hedge accounting to mitigate the impact of changes 
in the fair value of derivatives on the income statement
environmental liabilities
provision is made for the estimated cost of known
environmental remediation obligations in relation 
to the group’s current and former manufacturing
facilities cost estimates include the expenditure
expected to be incurred in the initial remediation effort
and where appropriate in the longterm monitoring
of the relevant sites for each remediation project
management monitors the costs incurred to date
against expected total costs to complete and operates
procedures to identify possible remediation obligations
that are presently unknown as at 31 december 2005
the provision for environmental remediation costs
amounted to £62 million further provision may 
be necessary within the next ﬁnancial year if actual
remediation costs exceed expected costs new
remediation obligations are identiﬁed or there are
changes in the circumstances determining the group’s
legal or constructive remediation obligations
product warranties
provision is made for the estimated cost of future
warranty claims on the group’s products management
bases the provision on historical experience of the
nature frequency and average cost of warranty 
claims and takes into account recent trends that 
might suggest that the historical claims experience 
may differ from future claims as at 31 december
2005 the group’s provision for warranty claims
amounted to £62 million further provision may be
necessary within the next ﬁnancial year if actual claims
experience differs from management’s estimates
taxation
the group is subject to tax in numerous jurisdictions
signiﬁcant judgement is required in determining the
worldwide provision for income taxes
the group recognises provisions in respect of
uncertain tax positions whereby additional current 
tax may become payable in future periods following
the audit by the tax authorities of previously ﬁled tax
returns provisions for uncertain tax positions are based
upon management’s assessment of the likely outcome
of issues associated with assumed permanent
differences interest that may be applied to temporary
differences the possible disallowance of tax credits 
and penalties and are classiﬁed as noncurrent
liabilities provisions for uncertain tax positions are
reviewed regularly and are adjusted to reﬂect events
such as the expiry of limitation periods for assessing
tax administrative guidance given by the tax
authorities and court decisions as at 31 december
2005 the group recognised a provision for uncertain
tax positions amounting to £949 million it is possible
that the ﬁnal outcome of these matters may differ
from management’s estimates
deferred tax is accounted for using the liability
method whereby deferred tax liabilities are generally
recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that
it is probable that taxable proﬁts will be available
against which deductible temporary differences can
be utilised as at 31 december 2005 the group
recognised deferred tax assets amounting to 
£1019 million it is possible that the deferred 
tax assets actually recoverable may differ from 
the amounts recognised if actual taxable proﬁts 
are lower than management’s estimates
as at 31 december 2005 the aggregate amount 
of undistributed earnings of foreign subsidiaries for
which deferred tax liabilities had not been recognised
was £19489 million deferred tax was not recognised
because the group is in a position to control the
timing of those earnings and it is probable that 
they will not be distributed in the foreseeable 
future income tax may be payable on these amounts 
if circumstances change and either their distribution
can no longer be controlled by the group or they are
actually distributed
us gaap
operating income from continuing operations under
us gaap in the year was 4850 million 2004
4771 million net income under us gaap 
was 3130 million 2004 3777 million 
shareholders’ equity under us gaap was 30344
million at 31 december 2005 compared to 29231
million at 1 january 2005
the differences between ifrs and us gaap arise
from the treatment of restructuring costs intangible
assets inventory product development costs post
employment beneﬁts and sharebased incentives 
net income under us gaap is subject to additional
adjustments relating to the treatment of costs
associated with exit or disposal activities capitalised
interest derivatives and hedge accounting deferred
tax and minority interest a reconciliation of ﬁnancial
information prepared under ifrs and us gaap is
shown on page 124
44 tomkins plc annual report 2005
operating and financial review
45
operating statistics performance analysis and financial data 
analysis of movement in revenue and profit from operations from 2004 to 2005
proﬁt from
operations
before
restructuring restructuring proﬁt from
revenue initiatives initiatives operations
£ million change £ million change £ million change £ million change
group
2004 29741 3043 180 2863
exchange rate effect 521 63 01 62 
disposals 422 44 66 110 
29840 3150 115
acquisitions 1029 129 – 129 
restructuring initiatives – – 03 26 03
underlying change 955 32 194 62 – – 194
104 36
2005 31824 3085 118 2967
industrial  automotive
2004 21823 2576 84 2492
exchange rate effect 477 60 01 59 
disposals 280 41 98 57
22020 2677 183
acquisitions 709 98 – 98 
restructuring initiatives – – 14 77 14
underlying change 257 12 223 83 – – 223
137 55
2005 22986 2552 197 2355
building products
2004 7918 703 96 607
exchange rate effect 44 05 – 05 
disposals 142 03 164 167
7820 711 68 
acquisitions 320 31 31
restructuring initiatives – – 11 162 11
underlying change 698 89 44 62 – – 44
258 425
2005 8838 786 79 865
central costs
2004 – 236 – 236
exchange rate effect – 02 – 02
238 –
underlying change – – 15 63 – 15
17 72
2005 – 253 – 253 governance
board of directors
tomkins plc annual report 2005
46
james nicol
chief executive ofﬁcer
aged 52
appointed to the board 
in february 2002 former
president and chief operating
ofﬁcer of magna international
inc the canadian automotive
parts company he joined
magna in 1987 as vice
president special projects
following a successful career as
a commercial lawyer he left 
in 1992 to set up triam
automotive inc and returned to
magna as vicechairman when
magna acquired triam in 1998
ken lever
finance director
aged 52
appointed to the board in
november 1999 he is a non
executive director of isoft
group plc he is a chartered
accountant and a member 
of the icaew financial
reporting committee and
chairman of the hundred group
financial reporting committee
he has held executive
directorships at albright and
wilson plc alfred mcalpine plc
and corton beach plc and was 
a partner in arthur andersen
jack keenan
independent nonexecutive
director
aged 69
appointed to the board
in november 2001 he is
presently a nonexecutive
director of marks and spencer
group plc and the body shop
international plc and is the
patron of the centre for
international business and
management at cambridge
university previously he was
chairman of kraft international
chief executive of guinness
united distillers  vintners ltd
and an executive director of
diageo plc until he retired 
in october 2001 
david newlands
nonexecutive chairman
aged 59
appointed to the board in
august 1999 and became
chairman in june 2000 he is
chairman of kesa electricals plc
and paypoint plc and a director
of a number of other companies
he was formerly finance director
of the general electric company
plc and chairman of britax
international plc 
richard gillingwater
independent nonexecutive
director
aged 49
appointed to the board in
december 2005 he is currently
head of shareholder executive
the body responsible for the
government’s shareholdings in
major publiclyowned businesses
he previously held a number of
senior investment banking
positions with csfb bzw and
kleinwort benson after
qualifying as a solicitor with
lovell white durrant
board of directors
struan robertson
independent nonexecutive
director
aged 56
appointed to the board in
december 2005 he is currently
a nonexecutive director of forth
ports plc henderson tr paciﬁc
investment trust plc and
international power plc he was
group chief executive of wates
group limited between 2000
and 2004 having previously
spent 25 years with bp in a
number of senior positions 
he was the senior independent
director at ws atkins plc from
2000 to 2005
  governance
47
david richardson
independent nonexecutive
director 
aged 54
appointed to the board in
march 2006 he is currently a
nonexecutive director of serco
group plc dairy crest group
plc forth ports plc and de vere
group plc he held a number of
senior ﬁnancial management
and strategic planning positions
in whitbread plc from 1983 
to 2005 becoming group
finance director in 2001 
prior to his time at whitbread
he had worked for icl plc 
and touche ross  co 
now deloitte  touche llp
sir brian pitman
senior independent 
nonexecutive director
aged 74
appointed to the board
in june 2000 he is a non
executive director of the
carphone warehouse group
plc singapore airlines limited
virgin atlantic airways limited
and itv plc and is a senior
advisor to morgan stanley he
retired in april 2001 from lloyds
tsb group plc where he was
chief executive for 13 years and
chairman for 4 years he was
also nonexecutive chairman of
next group plc from 1998 until
may 2002 
norman broadhurst
independent nonexecutive
director
aged 64
appointed to the board
in december 2000 he is
currently chairman of chloride
group plc and freightliner
limited he is also deputy
chairman of cattles plc and a
nonexecutive director of old
mutual plc and united utilities
plc he was group finance
director of railtrack plc from
1994 to 2000 
ken minton
independent nonexecutive
director
aged 69
appointed to the board
in december 2000 he is
executive chairman of 4imprint
group plc and a nonexecutive
director of solvay sa and
elementis plc he spent most of
his career at laporte plc where
he was managing director for
ﬁve years and then chief
executive for ten years
subsequently he was executive
chairman of arjo wiggins
appleton plc he was also 
nonexecutive chairman of john
mowlem  company plc and
sgb group plc
marshall wallach
nonexecutive director
aged 63
appointed to the board in
august 1999 he is president of
wallach capital advisors which
is based in denver colorado
and advises the gates family on
its interests in the group’s
perpetual preference shares 
and other investments 
tomkins plc annual report 2005 governance
directors’ report
tomkins plc annual report 2005
the directors present their report and the ﬁnancial statements for 
the year ended 31 december 2005
principal activities 
tomkins is a worldclass global engineering and manufacturing 
group with market and technical leadership across its two business
groups industrial  automotive and building products the principal
subsidiary and associated undertakings and their activities are listed 
in the investor information section on page 182
results
the audited ﬁnancial statements for the year ended 31 december
2005 are set out on pages 66 to 121 proﬁt attributable to
shareholders is £1922 million year ended 1 january 2005 – 
£1844 million
a review of the businesses activities and future developments 
of the company and its subsidiaries is given on pages 4 to 45 and
should be read as part of this report 
ordinary dividends
the directors recommend an ordinary ﬁnal dividend of 816p per
ordinary share to be paid on 31 may 2006 to ordinary shareholders 
on the register as at the close of business on 21 april 2006 together
with the ordinary interim dividend of 507p per share paid on 
14 november 2005 this makes a total dividend for the year of
1323p year ended 1 january 2005 – 1260p
acquisitions and disposals
see notes 40 and 41 to the ﬁnancial statements on pages 
104 to 106
resolutions at the annual general meeting
resolution 10 renews the directors’ authority to issue relevant
securities up to an amount not exceeding £12881003 representing
257620060 ordinary shares of 5p each being 33
1
3 per cent of the
issued ordinary share capital excluding treasury shares as at 
21 february 2006 until the next annual general meeting the
company held 1658803 shares in treasury as at 21 february 2006
being 021 per cent of the issued ordinary share capital excluding
treasury shares as at that date there are at present no plans to
exercise this authority except in relation to share options and other
similar categories of allotment
resolution 11 renews the directors’ authority to allot or in 
the case of treasury shares sell shares for cash without ﬁrst
offering them to existing shareholders on a pro rata basis until 
the next annual general meeting the authority sought is 
limited to the issue or in the case of treasury shares sale 
of up to 38725940 ordinary shares of 5p each £1936297
being approximately but not more than 5 per cent of the 
issued ordinary share capital as at 21 february 2006 your 
board conﬁrms its intention in line with the guidelines issued 
by representatives of institutional investors that not more than
75 per cent of the issued ordinary share capital will be allotted 
or in the case of treasury shares sold for cash on a non 
preemptive basis during any threeyear period
special business at the annual general meeting
resolution 12 seeks authority for the company to make market
purchases of its own ordinary shares up to a maximum of 10 per cent
of the issued ordinary share capital your board may make purchases
of the company’s shares if it considers such purchases will result in 
an increase in earnings per share and are in the best interests of
shareholders generally the company may also purchase its own
shares in order that they can at the relevant time be allocated to
employees as required under the company’s annual bonus incentive
plan if the company purchases any of its ordinary shares pursuant to
resolution 12 the company may cancel these shares or hold them in
treasury such decision will be made by your board at the time of
purchase on the basis outlined above
at last year’s annual general meeting the company was given
authority to make market purchases of up to 77408588 ordinary
shares of 5p each 676800 ordinary shares of 5p have been
purchased by the company in the market since last year’s agm 
options to subscribe for a total of 27951195 ordinary shares 
of 5p each in the company being 362 per cent of the issued
ordinary share capital excluding treasury shares were outstanding 
at 21 february 2006 if the company were to purchase the maximum
number of ordinary shares permitted under the existing authority 
and resolution 12 the options outstanding at 21 february 2006
would represent 452 per cent of the issued ordinary share capital
excluding treasury shares
resolution 13 seeks approval for the introduction of the tomkins
2006 performance share plan this is a sharebased longterm
incentive arrangement which more closely aligns the interests of
executives with shareholders details of the plan are set out in the
accompanying letter to shareholders
directors
the directors of the company at the year end are listed in the table
on page 49 they were all directors throughout the year with the
exception of messrs r d gillingwater and d d s robertson who 
were appointed as directors on 20 december 2005 messrs n n
broadhurst and k j minton will retire from the board at the conclusion
of the annual general meeting on 22 may 2006
in accordance with the articles of association messrs m f wallach
and k lever retire by rotation and being eligible offer themselves for
reappointment messrs r d gillingwater and d d s robertson
having been appointed after the last annual general meeting retire
in accordance with the articles of association and being eligible
offer themselves for reappointment
directors’ interests 
the interests of the directors in the share capital of the company 
are shown on the next page no director had any beneﬁcial interest in
the shares or loan stock of any other group undertaking the
executive directors as potential beneﬁciaries are technically deemed
to have an interest in all ordinary shares held by the tomkins
employee share trust the “trust” or in which the trustees of the
trust are interested the table includes however only those trust
shares which are speciﬁcally allocated to the individual director
no changes took place in directors’ interests during the period
from 1 january 2006 to 21 february 2006
for details of the directors’ options to purchase ordinary shares
please refer to the remuneration committee report on pages 
50 to 55
research and development
applied research and development work continues to be directed
towards the introduction of new and improved products and the
application of technology to reduce unit and operating costs and 
to improve services to customers
48 tomkins plc annual report 2005
employment policies
each company in the group is encouraged to implement
comprehensive employment policies designed to identify employees
with its achievements and to determine ways in which their
knowledge and skills can best contribute towards its success
schemes are operated to encourage loyalty and performance 
the tomkins 2005 sharesave scheme provides an opportunity 
to purchase shares in tomkins and is open to all eligible employees
employee involvement and communication programmes continue 
to be developed designed to provide equal opportunity to all
irrespective of sex race religion or colour each company in the
group endeavours to provide equality of opportunity in recruiting
training promoting and developing the careers of disabled persons
supplier payment policy
tomkins requires its operating companies to determine terms and
conditions of payment for the supply of capital and revenue items just as
keenly as they negotiate prices and other commercial matters suppliers
are made clearly aware of the agreed terms and how any disputes are 
to be settled and payment is made in accordance with those terms
the number of days’ credit taken by the company for trade
purchases at 31 december 2005 was 30 days year ended 1 january
2005 – 20 days the number of days’ credit taken by group
companies for trade purchases at 31 december 2005 ranged from 
10 days to 182 days year ended 1 january 2005 – 15 days to 151
days the average number of days taken was 48 days year ended 
1 january 2005 – 55 days
pensions
the group operates retirement plans covering most employees 
a proportion are deﬁned beneﬁt plans funded by contributions from
both employer and employee at rates determined by independent
actuaries in the light of regular valuations except where legislation
makes prefunding ﬁnancially inappropriate the remainder are money
purchase plans funded by contributions from employer and employee
the funds are held independently of the group’s ﬁnances and
administered by trustees in the united kingdom tomkins requests
that trustees prohibit fund managers from investing directly 
in the company
charitable and political donations
total charitable donations in the year were £836348 year ended
1 january 2005 – £447881 of which the united kingdom accounted
for £165483 year ended 1 january 2005 – £68424 in the united
states they totalled £571253 year ended 1 january 2005 –
£298581 of which £394477 year ended 1 january 2005 –
£151093 came from a tomkins funded charitable trust and in the
remaining overseas companies they totalled £99612 year ended 
1 january 2005 – £80876
no political donations were made during the year year ended 
1 january 2005 – £nil
substantial shareholdings
material interests notiﬁed to the company representing 3 per cent 
or more of the issued ordinary share capital at 21 february 2006 are
set out in the table below
no of shares 
sprucegrove investment 
management limited 40120250 519
barclays plc 24787105 321
legal  general group plc 24309383 315
aviva plc and its subsidiary 
morley fund management limited 23939118 310
morgan stanley securities limited 23285496 301
interests notiﬁed in the perpetual preference shares at 21 february
2006 were as below
perpetual preference shares no of shares 
l g atherton 
1
8669956 8288
c g cannon 
2
8526521 8151
j s gates 
1
8765146 8379
v gates 
2
7597989 7263
b g hopper 
1
8932650 8539
r e hopper 
3
8932650 8539
d g wallach 
1
8766071 8380
m f wallach 
4
8766071 8380
j a woodruff iii 
1
8621831 8242
h g woodruff 
2
8645658 8265
t s woodruff 
2
8645658 8265
 includes interests held as joint trustees and interests in income from shares held under trust
where there may be more than one beneﬁciary it is for this reason that the interests sum to
more than 100
1 joint trustees these persons are also income beneﬁciaries of some of the trusts in those
cases where the person is both a joint trustee and an income beneﬁciary in a particular trust
the holding is not counted twice
2 income beneﬁciaries only
3 includes interest by attribution from spouse b g hopper
4 includes interest by attribution from spouse d g wallach
independent auditors
a resolution will be proposed at the annual general meeting to 
reappoint deloitte  touche llp as independent auditors
approved by the board on 21 february 2006 and signed on its 
behalf by
n c porter
secretary
secretary’s note – events which occurred subsequent to the signing of this report
affect the business of the annual general meeting on 22 may 2006 as follows
1 on 1 march 2006 mr david richardson became a nonexecutive director and 
will stand for reappointment at the annual general meeting
2 following the substantial reduction in the interests of the gates family in the
company on 9 march 2006 mr marshall wallach will resign from the board 
with effect from 1 may 2006
governance
49
31 december 2005 1 january 2005
1
directors’ interests no of shares
2
no of shares
3
non non
5p ordinary shares beneﬁcial beneﬁcial beneﬁcial beneﬁcial
executive directors
k lever 429362 – 341476 –
j nicol 1596967 – 1384844 –
nonexecutive 
directors
n n broadhurst 14000 – 12000 –
r d gillingwater –– ––
j m j keenan 17185 – 15185 –
k j minton 110000 – 108000 –
d b newlands 308515 20000 296515 20000
sir brian pitman 15717 – 13717 –
d d s robertson 6500 – – –
m f wallach 119000 – 117000 –
perpetual preference shares 
m f wallach 8766071 112537 240244 112537
1 or later date of appointment
2 includes 125361 deferred shares for k lever and 342047 deferred shares for j nicol
3 includes 69566 deferred shares for k lever and 211976 deferred shares for j nicol governance
remuneration committee report
tomkins plc annual report 2005
1 introduction
this report to shareholders sets out the membership of the
remuneration committee and the names of the advisers who
provided services to the committee during the year to 31 december
2005 the policies that have been followed by the remuneration
committee during the year in determining the elements of executive
remuneration are also set out together with the policies and
principles to be followed by the committee over the next two years
this report has been prepared in accordance with the directors’
remuneration report regulations 2002 “drrr” which set out
statutory requirements for the disclosure of directors’ remuneration
the report also meets the relevant requirements of the listing rules of
the financial services authority and describes how the board has
applied the principles of good governance relating to directors’
remuneration drrr requires the independent auditors to report to
the company’s members on the auditable parts of the remuneration
committee report and to state whether in their opinion those parts
of the report have been properly prepared in accordance with the
companies act 1985
the board keeps under review the terms of reference for the
remuneration committee which are based on current best practice
contained in the model terms of reference set out in the guidance
note produced by the institute of chartered secretaries and
administrators the principal responsibility of the committee is to
determine the framework or broad policy for the company’s executive
remuneration and the remuneration of the chairman of 
the board for approval by the board the remuneration of non
executive directors is a matter for the board itself the terms of
reference of the remuneration committee can be found in the
corporate governance area on the company’s website
wwwtomkinscouk in addition the company takes full account 
of the guidelines published by the association of british insurers 
and the national association of pension funds
details of the emoluments bonuses beneﬁtsinkind incentive
arrangements including share options and other longterm
incentives pensions and service contracts applicable to each director
who served during the year to 31 december 2005 are given in this
report which will be put to the vote of shareholders at the
forthcoming annual general meeting
2 membership of the remuneration committee 
and advisers
the remuneration committee is made up exclusively of nonexecutive
directors whom the board determined to be independent as each
was found to be free from any material business or other relationship
with the company either directly or as a partner shareholder or
ofﬁcer of an organisation that has a relationship with the company
accordingly the board believes that there are no such relationships
that could materially interfere with the exercise of their independent
judgement messrs minton broadhurst and keenan served on the
committee throughout the year and richard gillingwater was
appointed to the committee on 20 december 2005 the members 
of the remuneration committee at 31 december 2005 were
k j minton chairman
n n broadhurst
r d gillingwater
j m j keenan
there were no other changes to the membership of the committee
during the year 
the committee consults with the chairman of the board and the
chief executive ofﬁcer concerning matters of executive remuneration
the committee also received advice from external advisers pa
consulting group concerning a company share plan pa consulting
group also provided consulting services during the year in respect of
business process in tomkins mercer human resource consulting
provided pension advice in respect of executive directors and senior
executives and provided professional services in the area of pension
scheme advice other than those consulting services mentioned
above pa consulting group and mercer human resources had 
no connections with the company
3 statement of the company’s policy on directors’
remuneration unaudited information
the policies operated by the company during the year and those 
to be applied over the next two years are set out below
a executive remuneration
the company’s policy on executive remuneration is that the
remuneration committee and the board should each satisfy itself 
that executives including executive directors are fairly rewarded 
for their individual contributions to the group’s performance 
the remuneration committee has sought to ensure that executive
directors receive a level of remuneration that is appropriate to their
scale of responsibility and performance and which will attract
motivate and retain individuals of the necessary calibre the only
pensionable element of executive directors’ remuneration is basic
salary this policy applies whether or not an executive director is a
member of the tomkins retirement beneﬁts plan or has a personal
pension arrangement
b annual remuneration for executives
the board recognises that one of its key objectives is to grow the
value of the business for the beneﬁt of shareholders and that such
growth is strongly related amongst other things to the degree of
entrepreneurial spirit in the group in order to create the necessary
entrepreneurial impetus within an organisation compensation
arrangements are required which are similar to those that an owner
of a business would seek this has led to the adoption of a
remuneration policy under which the levels of total remuneration 
are set in order to attract retain and motivate executives
remuneration is provided through a combination of base salaries 
at median level or below and annual bonuses that have a direct 
and proportionate link to total value created for shareholders 
this provides the incentive for executives to act like owners of the
business the remuneration committee and the board believe 
that this more closely aligns the interests of shareholders and
management whereby executives only receive substantial rewards
when they have created high value in the business
over time and subject to the achievement of valuecreating
performance targets this policy is likely to lead to a realignment 
of the component parts of total executive remuneration so that a
greater part of the total package received by executives is made 
up of incentive pay with the remainder coming from base salaries 
at the median level or below the performance targets for the
company’s executive share option scheme and the annual bonus
incentive plan ensure that a substantial proportion of total
remuneration is directly related to actual measurable performance
further details of the annual bonus incentive plan are set out in
section 4b on page 52
50 tomkins plc annual report 2005
c nonexecutive directors’ fees and chairman’s remuneration
the executive members of the board review the fees of nonexecutive
directors who play no part in determining their own remuneration
the chairman’s remuneration is determined by the remuneration
committee in the absence of the chairman and is approved by the
board the review of nonexecutive directors’ fees and the chairman’s
remuneration takes place every two years
d service contracts
the company’s policy on directors’ service contracts is that service
contracts and letters of appointment for executive directors 
normally provide for notice periods of no longer than twelve months
on appointment a longer notice period may apply but this will
reduce over time to the normal twelve months’ notice period
notwithstanding the provisions in an executive director’s service
contract or letter of appointment concerning termination payments
the company will seek to reduce any compensation that may be
payable to reﬂect the departing director’s obligation to mitigate loss
e external appointments
the company’s policy on external appointments is that with the
approval of the chairman of the board executive directors are
permitted to hold appointments outside the company any fees
payable in connection with such appointments are normally retained
by directors unless otherwise agreed further details are set out in
section 10 on page 55
f  longterm incentives and share options
the company has operated a number of sharebased longterm
incentive schemes in the past but following a review of executive
remuneration the remuneration committee and board expect the
number of plans and schemes to reduce over time as they lapse and
are not renewed or replaced as reported last year the remuneration
committee and the board had decided not to continue with an
executive share option scheme beyond 9 may 2005 the date on
which the company’s executive share option schemes lapsed
following further consideration the board has decided to seek
shareholder approval at the forthcoming annual general meeting 
of the introduction of a new share scheme the tomkins 2006
performance share plan a summary of which is set out below
the company’s new employee savings related share option
scheme the tomkins 2005 sharesave scheme which applies to all 
uk employees was approved by shareholders at the annual general
meeting in may 2005
g retirement benefits
the company’ s retirement beneﬁt plan was closed to new members in
april 2002 and since that time the company’ s policy has been that new
employees including executive directors and senior executives will receive
a payment from the company to enable them to make contributions to
retirement beneﬁt schemes of their choice on behalf of themselves and
their dependants no change to this policy is expected over the next two
years the normal retirement age of the executive directors is 60
governance
51
total emoluments
bonus longterm year ended year ended
basic bonus bonus deferred beneﬁts incentive pension 31 december 1 january
directors’ salaryfeescash
1
shares
1
shares
2
inkind
3
plans contribution
7
2005 2005
emoluments £000 £000 £000 £000 £000 £000 £000 £000 £000
chairman
d b newlands
4
180––––– 180 180
executive directors
j nicol 826 841 210 420 95 4193
5
310 6895 2924
klever 414396991989–149 1265 1062
nonexecutive directors
n n broadhurst
4
65––––– 65 65
r d gillingwater
6
– – – ––– – –
j m j keenan
4
58––––– 58 58
k j minton
4
80––––– 80 83
sir brian pitman
4
45––––– 45 45
d d s robertson 2––––– 2 –
m f wallach
4
55––––– 55 55
1725 1237 309 618 104 4193 459 8645 4472
1 details of bonus payments in accordance with the annual bonus incentive plan are given in b on page 52
2 deferred shares are held under the annual bonus incentive plan
3 beneﬁtsinkind include medical cover life assurance and other beneﬁts in accordance with their service contract or letter of appointment beneﬁtsinkind for james nicol for the year to 
31 december 2005 additionally included a buyout bonus payment a relocation allowance of £23333 per month for a period of three years which ended on 18 february 2005 and company 
car and related costs
4 on 18 july 2005 2000 shares were purchased for each of the nonexecutive directors at a market price of 27281 pence per share the cost of these shares formed part of their remuneration
5 3045684 shares were awarded under the deferred matching share purchase plan on 11 february 2002 being part of the incentive package to attract james nicol to the company 1469980
shares vested on 18 february 2005 and the remainder were forfeited under the terms of his contract mr nicol elected to receive a cash payment of £4193000 subject to statutory deductions
in lieu of shares see “deferred matching share purchase plan” below for more details
6 richard gillingwater in accordance with cabinet ofﬁce guidelines has waived his fees
7 see section 6 “retirement beneﬁts” below for more details
during the year no director exercised any options and accordingly no gains or losses were made on exercise year to 1 january 2005 – £nil
4 elements of remuneration audited information
executive remuneration is comprised of base salary a bonus in three parts cash bonus shares and deferred shares and beneﬁtsinkind 
nonexecutive directors are paid a basic fee and fees for their work on board committees the table below sets out the remuneration paid 
to each director
a base salary fees bonuses and benefitsinkind for the year ended 31 december 2005 governance
remuneration committee report continued
tomkins plc annual report 2005
chairman’s remuneration
having taken into consideration comparative remuneration data 
the contribution made by the chairman to the company’s affairs 
the time he devotes to the company’s business and the extra
responsibilities placed upon him arising from the changes in 
corporate governance requirements in the uk and the us the
remuneration committee recommended to the board that his
remuneration should be increased from £175000 to £185000 plus
2000 tomkins plc shares per annum with effect from 1 january
2006 these recommendations were approved by the board
nonexecutive directors’ fees
the executive members of the board reviewed the fees paid to non
executive directors and noted that the basic fee paid to nonexecutive
directors of £40000 plus 2000 tomkins plc shares per annum was
last reviewed in november 2003 having taken into consideration
comparative remuneration data the contribution made by individual
nonexecutive directors to the company’s affairs the time they
devote to the company’s business and the extra responsibilities
placed upon them arising from the changes in corporate governance
requirements in the uk and the us the executive directors concluded
that the basic annual fee should be increased to £42000 plus 
2000 tomkins plc shares per annum commencing 1 january 2006
no changes to the level of committee fees were made 
b current and proposed schemes 
annual bonus incentive plan
the executive directors and senior executives participate in the
company’s annual bonus incentive plan the “plan” each participant
in the plan receives a percentage of “bonusable proﬁt” of the
business for which he or she has responsibility bonusable proﬁt is
based on operating proﬁt less a charge for tax certain exceptional
items and a charge for invested capital and is based upon ifrs the
objective of the plan is to reward the senior executives for increasing
the overall value created in the business based on the margin of the
aftertax return on invested capital in excess of the weighted average
cost of capital accordingly bonusable proﬁt may increase at a faster
rate than operating proﬁt where the margin of the return over the
cost of capital increases this aligns the interests of management and
shareholders in arriving at bonusable proﬁt adjustments may be
made for operating exceptional items relating to strategic
manufacturing initiatives to match the costs of the strategic
manufacturing initiatives to the beneﬁts over a period of up to three
years with the approval of the remuneration committee
adjustments are also made for nonoperating exceptional items 
the charge for taxation reﬂects the ongoing charge for tax excluding
any beneﬁt from exceptional adjustments to tax provisions the
charge for invested capital is based on applying the estimated
weighted average cost of capital to the average invested capital in 
the group the estimated weighted average cost of capital takes 
into account the capital structure of the group and the costs
associated with each element of capital the method of calculation
has been agreed by the remuneration committee and is subject to
review each year the invested capital is based on the book value of
assets in the group excluding goodwill relating to acquisitions made
prior to 30 december 1999 the cost of capital used in the calculation
of bonusable proﬁt for the year under review was 77 per cent
the remuneration committee carries out a detailed review of 
the computations involved and ensures that the rules are applied
consistently furthermore the independent auditor is asked to
perform agreedupon procedures on behalf of the remuneration
committee on the calculations which underlie the computation of the
bonusable proﬁt the incentive bonus of the executive directors is
based on a percentage of the bonusable proﬁt of the group which
for the year ended 31 december 2005 was £1237 million 1 january
2005 – £1110 million james nicol received the sum of £1471000
1 january 2005 – £1321000 and ken lever received the sum of
£693000 1 january 2005 – £505000 ken lever’s percentage of
bonusable proﬁt increased during the year in accordance with the
levels approved by the remuneration committee at the time the 
plan was introduced although there is no limit to the bonusable
proﬁt on which bonuses are calculated inordinate growth in
bonusable proﬁt in any one year is unlikely to arise due to the 
nature of the group’s business
the bonus awards are payable to the senior participants including
executive directors as to foursevenths in cash oneseventh in bonus
shares and twosevenths in deferred shares the bonus awards
payable to the remaining participants are as to threequarters in cash
onetwelfth in bonus shares and one sixth in deferred shares the
bonus is paid at the end of june september and december based on
75 per cent of the bonus earned to the end of the previous quarter
with the balance of the full entitlement to the bonus for the calendar
year paid at the end of march following the calendar yearend 
bonus shares are restricted and vest only after a period of three
years after the initial bonus award dividends are paid on the bonus
shares deferred shares are awarded at the time of the initial bonus
award but the vesting of the shares is conditional on continued
employment with the group for three years after the award
dividends are not paid on the deferred shares until they have vested
as a condition of continued participation in the plan senior
participants including executive directors are required to hold shares
with a purchase cost equivalent to one year’s total aftertax
remuneration including bonus based on an average of the previous
three years remaining participants are required to hold shares with 
a purchase cost equivalent to one half of one year’s total aftertax
remuneration including bonus based on an average of the previous
three years increases in annual base salary of all participants
including executive directors are restricted to the equivalent rate 
of increase in the retail prices index in the uk or equivalent index 
in the country in which a participant works the restrictions on the
increases in salary together with the growth in bonus assuming
increases in bonusable proﬁt will result in the incentive pay element
of remuneration increasing over time the share awards will increase
the investment each of the participants including executive directors
has in tomkins plc shares
the tomkins 2006 share plan
subject to the approval of shareholders at the 2006 annual general
meeting it is proposed to introduce the tomkins 2006 performance
share plan the “2006 plan” a longterm incentive plan the purpose
of the 2006 plan is twofold first to provide a sharebased longterm
incentive arrangement for senior executives which more closely aligns
the interests of executives with shareholders secondly the 2006 plan
is in substitution of the company’s legal obligation to the chief
executive to provide annual grants of options which had previously
been satisﬁed by the tomkins executive share option scheme that
lapsed in may 2005 the remuneration committee considered the
alternatives and with the agreement of the chief executive and the
assistance of pa consulting group over the past year devised a plan
that achieves those aims the 2006 plan will only provide rewards if
shareholders have seen value created over the preceding three years
the remuneration committee and board believe that this creates a
52 tomkins plc annual report 2005
better alignment between executive reward and the creation of
shareholder value than a standard executive share option scheme
the 2006 plan has four key features i the performance baseline
is established which is equal to the cost of equity and if the total
shareholder return comprising dividends and increase in the share
price over three years does not exceed the cost of equity over the
same three year period no award of shares will be made ii the
award of shares will be proportional to the degree of performance
over the baseline iii there is a “cap” on the quantum of share
awards and iv subject to performance awards will be made at 
the end of each threeyear performance period
share options
the tomkins 2005 sharesave scheme
this is a standard hm revenue  customsapproved savings related
share option scheme which is open to employees who are resident
for tax purposes in the united kingdom
c closed schemes
the following schemes are now closed
the tomkins executive share option scheme no 3 “esos 3” and
the tomkins executive share option scheme no 4 “esos 4”
esos 3 and esos 4 lapsed for grant purposes on 9 may 2005 and
the remuneration committee and the board decided not to continue
with an executive share option scheme beyond that date
esos 3 was an hm revenue  customsapproved scheme 
esos 4 was not approved by hm revenue  customs the options
under both schemes mature after three years all outstanding 
esos 4 options were granted to participants within the limit of four
times their annual earnings the performance condition for all
outstanding options under esos 3 and esos 4 requires that the
growth in tomkins’ earnings per share must exceed the growth 
in the retail prices index by an average of 2 per cent per annum 
over a threeyear period before an option can be exercised which
was in accordance with contemporary practice when the schemes
were introduced in 1995 
the tomkins savings related share option scheme no 2 “saye 2”
this was a standard hm revenue  customsapproved savings related
share option scheme which lapsed for grant purposes on 
9 may 2005
the tomkins share matching scheme “sms”
awards which had been made under a now expired scheme known
as the tomkins restricted share plan and which had vested were
eligible for matching awards for the same number of shares under the
sms such awards could be for up to two conditional share matching
awards vesting a further two years and four years respectively after
the end of the original restricted period the ﬁnal commitment to
grant an sms award was made during the year and the sms is
therefore now closed for grant purposes with shareholder approval
this share scheme was introduced in 1996 with no performance
conditions attached and accordingly it does not comply with schedule
a of the combined code
tomkins premium priced option
this was an option speciﬁcally and solely granted to james nicol as
part of the incentive package on his joining tomkins no performance
conditions were attached to this option in order to attract him to the
company and retain his services and this therefore does not comply
with schedule a of the combined code it consists of a non
transferable option to acquire 5076142 shares granted on 
11 february 2002 the exercise price is 197 pence per share in 
respect of 2538072 shares a option shares 276 pence per share
in respect of 1522842 shares b option shares and 345 pence per
share in respect of 1015228 shares c option shares the options
have all vested and will lapse on 11 february 2012 or earlier in 
certain circumstances
ongoing option
this is an option speciﬁcally and solely granted to james nicol on
11 february 2002 as part of the incentive package to attract him to
the company it consists of a nontransferable option to acquire
1522842 shares at 197p per share which can be exercised on or
after 18 february 2005 provided the rate of increase of earnings per
share over any threeyear period is equal to or greater than the rate
governance
53
movements in directors’ share options during the year
at 31 december at 1 january 
2005 granted in the year 2005 period of exercise 
exercise 
no no price p no from to
j nicol 10382484 – – 10382484 1 jan 06 28 nov 14
k lever 1336014 – – 1336014 1 jan 06 28 nov 14
the table below details the weighted average price each executive would have had to pay to exercise their options and how much they were worth in monetary terms at the year end and prior
year end
weighted average exercise price p weighted average exercise price p
31 december 2005 1 january 2005 net value of unexercised options
exercise market exercise market
price price price price
exceeds exceeds exceeds exceeds 31 december 1 january
market exercise market exercise 2005 2005
price price price price £000 £000
j nicol 34500 22653 29195 20872 6859 3058
k lever – 22059 26575 21264 1058 473
the midmarket price of a tomkins share as at 31 december 2005 was 29975 pence with a range during the year 2 january 2005 to 31 december 2005 of 24200 pence to 30250 pence
options included in the above table relate to the tomkins executive share option schemes no 3 and no 4 j nicol 3775486 shares k lever 1328000 shares the tomkins savings related share
option scheme no 2 both 8014 shares and in the case of james nicol the premium priced option 5076142 shares and the ongoing option 1522842 shares governance
remuneration committee report continued
tomkins plc annual report 2005
of increase of the retail prices index plus 9 per cent this performance
condition has been met and the option is exercisable there are
provisions for waiving or amending the performance condition in
certain circumstances and if there is a change of control of the
company the option is exercisable immediately regardless of whether
the performance condition is satisﬁed the option will lapse on 
11 february 2012 or earlier in certain circumstances if there is 
a variation in the share capital of the company the remuneration
committee may adjust the number of shares in either the tomkins
premium priced option or the ongoing option as it reasonably deems
appropriate to take account of the variation
deferred matching share purchase plan
this was speciﬁcally and solely introduced for james nicol as part of
the incentive package to attract him to the company under this plan
3045684 shares “matching shares” were awarded on 11 february
2002 following the purchase by james nicol of 1015228 tomkins plc
shares on 18 february 2005 the award vested in respect of
1015228 matching shares and of the remaining 2030456 matching
shares 454752 vested and the balance lapsed the number of shares
which vested was calculated on the basis of the highest price of a
tomkins share sustained over a ﬁveday period during the sixmonth
period ended 18 february 2005 28525 pence to the extent that for
every 1 penny that the share price increased over 197 pence being the
market price on 18 february 2002 up to a maximum of 591 pence
james nicol was entitled to receive 5153 shares under the terms of
his contract mr nicol elected to receive a cash payment of £4193000
subject to statutory deductions in lieu of shares
directors’ interests in tomkins shares at 31 december 2005
the directors’ current interests in tomkins shares are set out in 
the directors’ report on pages 48 and 49 and in the case of the
executive directors where appropriate these include shares held
through their participation in the sms
the interests of the directors in tomkins ordinary shares held
within the sms that are yet to vest and yet to be included in
directors’ remuneration were as follows
31 december 1 january
scheme or 2005 awarded vested 2005 vesting
director plan number number number number period
k lever sms 1809 1809 1809 1809 2007
the value of entitlements held under the sms for current directors at
31 december 2005 was £5000 1 january 2005 – £5000 1809
shares were awarded to ken lever on 29 december 2005 in relation
to the vesting of the sms award made on 25 november 2003 in
connection with the vesting of the rsp award made on 15 august
2000 with a market value of £5000 when the market price per
share was 29000 pence per share no director received an award in
the year ended 1 january 2005 no other director received an award
under the sms during the year
during the year 1809 shares vested under the sms at 28902
pence per share market value £5000 in respect of ken lever 
no shares awarded to directors vested under the sms during the
year ended 1 january 2005 no other director had shares vest 
under the sms during the year
at 31 december 2005 3618 shares were required to be retained
by ken lever in order to allow the sms award in the above table to
vest in the relevant vesting period 1 january 2005 – 1809 shares
required to be retained by ken lever no other current director was
required to retain shares in this respect at 31 december 2005
5 performance graph unaudited information
the graph set out below plots total shareholder return on a holding
in the company’s shares for each of the past ﬁve years ended 
31 december measured against the performance of the ftse
engineering and machinery index this index was chosen because its
major constituents are like tomkins moderately diversiﬁed
engineering groups with a signiﬁcant manufacturing presence outside
the home uk market
the index classiﬁcations changed on 3 january 2006 and with effect
from that date tomkins is included in general industrials 
6 retirement benefits audited information
james nicol and ken lever are not entitled to any retirement beneﬁts
deﬁned in terms of ﬁnal or average salary but they receive a payment
at an annual rate of 375 per cent of their basic salary to enable them
to make contributions to retirement beneﬁt schemes of their choice
on behalf of themselves and their dependants for the year ended
31 december 2005 this amounted to £309709 year to 1 january
2005 – £300000 for james nicol and £148899 year to 1 january
2005 – £144000 for ken lever at the time he joined the company
ken lever was given the option to elect at any time to become a
member of the tomkins retirement beneﬁts plan the “rbp” or any
other replacement pension scheme nominated by the company but
did not do so during the year ended 31 december 2005 the normal
retirement age of the executive directors is 60
7 service contracts 
unaudited information
a summary of the service contract or letter of appointment of each 
of the directors is as follows
james nicol – chief executive ofﬁcer
the company and james nicol entered into a contract dated 
11 february 2002 which set out the terms and conditions under
which he joined the company as chief executive ofﬁcer on 
18 february 2002 the contract remains in force until terminated
by either party giving notice of not less than twelve months
ken lever – finance director
on 1 november 1999 ken lever and the company entered into a
memorandum which set out the terms and conditions of employment
under which ken lever joined the company as finance director on
that date the terms of the memorandum remain in force until
terminated by either party giving notice of 51 weeks
nonexecutive directors
none of the nonexecutive directors has a service contract with the
company their terms of engagement being set out in a letter of
appointment ordinarily nonexecutive directors serve for a period of
two years but subject to agreement with the board a nonexecutive
54
total shareholder return december 2000 to december 2005
0
60
120
180
240
300
dec 05 dec 04 dec 03 dec 02 dec 01 dec 00
tomkins ftse engineering  machinery tomkins plc annual report 2005
governance
55
director can be reappointed for a further term of three years 
the appointment of nonexecutive directors may be terminated
before the conclusion of their twoyear term by and at the discretion
of either party upon two weeks’ written notice in the case of david
newlands the appointment is for a term of three years and may be
terminated at any time by either party serving written notice upon the
other such notice to take effect from the date of receipt thereof
none of the nonexecutive directors is entitled to compensation for
loss of ofﬁce the dates from which the respective letters of
appointment are effective are as follows norman broadhurst – 
11 december 2004 richard gillingwater – 20 december 2005 
jack keenan – 1 november 2005 ken minton – 11 december 2004
david newlands – 18 february 2004 sir brian pitman – 30 june
2004 struan robertson – 20 december 2005 and marshall wallach
– 1 august 2005
8 payments made to and interests of former
directors audited information
no payments were made to former directors during the year 
year ended 1 january 2005 payments to former director tony
reading of £147000 bonus £80000 reimbursement in 
accordance with his termination agreement and £2160572
exchange of unfunded pension beneﬁts for a lump sum
9 sums paid to third parties in respect of a
director’s services audited information
no amounts are paid to third parties in respect of a director’s services
to the company or any company within the group
10 sums received by executive directors from
other external directorships audited
information
during the year ken lever served as a nonexecutive director on the
board of vega group plc from 1 january to 8 september 2005 when
he left the board for which he received nonexecutive directors’ fees
of £20322 on 21 june 2005 mr lever was appointed a nonexecutive
director of isoft plc for which he received fees to 31 december 2005
of £30909 in both cases mr lever retained the fees james nicol
holds no external directorships
compliance statement
the company complies with the requirements of schedule 7a of the
companies act 1985 and the listing rules of the financial services
authority unless otherwise indicated in preparing this report the
remuneration committee has given full consideration to the
provisions set out in schedule b to the combined code
this report has been approved by the remuneration committee 
and the board
ken minton
chairman of the remuneration committee
21 february 2006 governance
audit committee report
tomkins plc annual report 2005
this report to shareholders has been prepared in accordance with 
the requirements of paragraph c33 of the combined code and
paragraphs 51 and 52 of the guidance on audit committees
produced by sir robert smith the report describes the role of the
audit committee in meeting these requirements
terms of reference
the committee’s terms of reference a copy of which can be found 
in the corporate governance area on the company’s website are
reviewed from time to time and approved by the board of tomkins
they are based on the model terms of reference set out in the
guidance note produced by the institute of chartered secretaries 
and administrators and take account of the requirements of the
sarbanesoxley act of 2002 and the guidance notes set out in 
sir robert smith’s report published in january 2003
the terms of reference cover membership and appointment
meetings their frequency quorum attendees and minutes duties
and responsibilities covering external audit internal audit ﬁnancial
reporting internal controls and risk management systems
whistleblowing reporting responsibilities authority delegated by 
the board and a number of other matters
membership  appointment and experience
the audit committee comprises four independent nonexecutive
directors three of whom have served on the committee throughout
the year and the fourth who was appointed in december the
members of the committee are norman broadhurst who was
appointed to the committee as chairman in december 2000 ken
minton who was also appointed in december 2000 jack keenan
who was appointed in november 2001 and richard gillingwater who
was appointed on 20 december 2005 no limitation on the term of
ofﬁce is speciﬁed for members of any of tomkins’ board committees
the board has determined that all four members of the audit
committee are independent for the purposes of the combined code
and rule 10a3b1 under the us securities exchange act of 1934
and section 303a of the new york stock exchange’s listed company
manual the members have wideranging ﬁnancial commercial and
management experience that they bring to the work of the audit
committee and their biographical details are set out on pages 46 and 47
the chairman of the committee norman broadhurst is a
chartered accountant fca and a fellow of the institute of corporate
treasurers having previously been group ﬁnance director of railtrack
plc 1994 to 2000 and joint deputy chief executive and ﬁnance
director of vsel consortium plc 1990 to 1994 in accordance with
section 407 of the sarbanesoxley act of 2002 the board has
determined that norman broadhurst is an “audit committee ﬁnancial
expert” as that term is deﬁned under the rules of the us securities 
and exchange commission having signiﬁcant relevant and uptodate
uk and us ﬁnancial and accounting knowledge and experience 
ken minton has held a number of senior management positions having
been managing director and then chief executive of laporte plc and
jack keenan has held a number of senior management positions in
international companies having been chairman of kraft international
chief executive of guinness united distillers and vintners and an
executive director of diageo plc richard gillingwater is head of
shareholder executive a body responsible for the government’s
shareholdings in major publiclyowned businesses and has wide
ranging experience in investment banking of more than 20 years 
all three have extensive ﬁnancial experience
meetings
the audit committee meets at least four times a year and on other
occasions when circumstances require the quorum for a meeting 
of the committee is two members the finance director and
representatives from the independent auditor and the internal auditor
attend meetings under a standing invitation the chairman of the
board chief executive ofﬁcer and other directors are able to attend
meetings of the committee under the practice that any director may
attend any meeting of a board committee provided that they have no
conﬂict of interest in respect of business to be discussed it is usual
practice for the chief executive ofﬁcer to attend meetings of the
audit committee other ﬁnance and business risk executives attend
meetings and the company secretary is secretary to the committee
the committee chairman reports regularly to the board on its
activities five meetings were held during the year and attendance 
is set out in the table on page 59
work of the committee
the committee has established an “agenda framework” which
tomkins believes is vital for maintaining an appropriate focus on 
the objectives of the committee the agenda sets out all of the
operational duties and responsibilities outlined in the committee’s
terms of reference and is based on four regular meetings in february
may august and november which coincide with the announcement
of the quarterly results the areas covered by the “agenda
framework” are as follows
1 corporate governance including the regular review of the
committee’s terms of reference and annual evaluation 
regulatory issues review of delegated authorities and review 
of auditor independence
2 business risk assurance ie internal audit including the review 
of the internal audit charter update on internal audit reviews and
future plans and progress against its internal audit business plan
3 conﬁdential sessions with the audit committee in the absence 
of directors and company executives
4 financial reporting including current accounting and ﬁnancial
reporting matters and review of quarterly interim and annual
statements including earnings releases and
5 independent audit including audit plan and scope review of 
audit fees cost effectiveness reports on interim and annual
ﬁnancial statements status reports management letters and 
the nature and extent of nonaudit services 
the audit plan and scope sets out details of the areas to be covered
and how the audit is to be conducted the chairman of the audit
committee meets periodically with the independent auditor to discuss
progress on the audit and the major points to arise and has the
opportunity to assess the effectiveness of the process the committee
is also able to assess the effectiveness of the auditors and the process
through reports made to the committee by the independent auditor
in addition to the items considered by the committee under the
“agenda framework” during 2005 other important issues considered
included regular reviews of the internal control systems and the
statement to be made in the directors’ report and accounts in
respect of internal controls group risk proﬁle group tax reports
updates on compliance with the combined code review of tax
services provided by the independent auditor form 20f and update
of it systems conﬁdential meetings with representatives of the
56 tomkins plc annual report 2005
independent audit and internal audit functions took place during the
year in the absence of executives considerable time and emphasis
continues to be placed by the committee on compliance with section
404 of the sarbanesoxley act of 2002 and detailed progress reports
were received by the committee at each of its meetings including an
update of the sarbanesoxley project risk proﬁle this has been the
focus of attention of the business risk assurance and internal audit
function during the ﬁrst half of the year in the second half of the
year business risk assurance resources were transitioned towards
internal audit reviews with an appropriate amount of resources
applied to sarbanesoxley and internal audit responsibilities the audit
committee met earlier in the year to consider tomkins’ transition to
international gaap reporting adoption of international financial
reporting standards “ifrs” and following detailed consideration 
by the committee consultation with the independent auditor and
approval by the board the company announced on 22 april 2005
the intended basis of preparation of ﬁnancial statements under ifrs
the company has published comparative information for 2004
originally presented in accordance with uk gaap but restated in
accordance with ifrs the ﬁrst results to be prepared on an ifrs 
basis were the group’s results for the quarter ended 2 april 2005 
business risk assurance’s internal audit function is actively
engaged in the business risk assessment processes in the group’s
businesses and also provides guidance and assistance in the
development of risk mitigation plans each quarter the committee
receives a summary of reviews of the business’s risk management
processes any signiﬁcant related ﬁnancial exposures are also
highlighted the risk assessment process and risk mitigation plans 
are an important part of the development of the business strategies
business risks are considered at the quarterly reviews with the
businesses where all of the major strategic operational compliance
and ﬁnancial risks are discussed
in determining its policy on the extent of nonaudit services
provided by the independent auditor the committee has taken
account of the rules of the us securities and exchange commission
which regulate and in certain circumstances prohibit the provision 
of certain types of nonaudit services by the independent auditor
nonaudit services are ordinarily put out to tender and require the
approval of the chairman of the audit committee during the year
speciﬁc projects requiring tax services were the subject of a tender
process and in a number of cases the work was not awarded to the
ﬁrm of the independent auditor in those cases where the work was
awarded to the independent auditor it was concluded that the ﬁrm of
the independent auditor was best placed to supply in a cost effective
manner such tax services due to the experience and qualiﬁcations of
the individuals providing such services the independent auditor’s
knowledge of the company and its tax affairs and that the best
interests of the company were served by engaging the ﬁrm of the
independent auditor by way of example during 2005 the american
jobs creation act in the us enabled tomkins to take advantage of a
number of tax beneﬁts after a detailed review and in some cases 
a tender process it was decided that deloitte and touche were the
preferred ﬁrm to engage on a number of projects to ensure that
tomkins maximised the beneﬁts available this was largely due to 
the efﬁciencies arising from the knowledge deloitte and touche has
of the tomkins group the adoption of certain other rules by the
committee including those relating to audit partner rotation 
relevant ethical guidance issued by the professional bodies in the
consultative committee of accountancy bodies in particular that 
the external auditor should not audit its own ﬁrm’s work make
management decisions for the company create a mutuality of
interest nor be put in the position of advocate for the company
when taken together provide adequate protection of auditor
independence all fees proposed by the external auditor must be
reported to the audit committee and approved by the chairman of
the audit committee details of audit fees for the year can be found
on page 82 of the ﬁnancial statements
the company’s practice in accordance with the companies act
1985 and the combined code in relation to the appointment and
termination of the independent auditor involves a recommendation
from the audit committee to the board which will then make a
recommendation to shareholders in general meeting this differs 
from the procedure in the us where the independent auditor is
accountable to the audit committee which has the authority to
appoint or dismiss the independent auditor without reference 
to shareholders
with the approval of the board the committee has established
guidelines for the recruitment of employees or former employees of
the independent auditor tomkins will not engage on a parttime or
fulltime basis any person who is or was an employee of the
company’s independent auditor where that person has worked on the
group’s audit either as a principal or partner at any time during a
period of not less than three years prior to the proposed date of
joining the tomkins group in addition though tomkins may employ
an employee of the company’ s independent auditor where such
person has never worked on the group’ s audit either as a principal or
partner a period of not less than one year must elapse prior to the
proposed date of that person joining the company any former
employee of the independent auditor who joined the company before
the independent auditor was appointed will remain unaffected
a “whistleblowing” procedure has been established for the
conﬁdential and anonymous submission by employees of concerns
regarding accounting internal controls or auditing matters in
accordance with the requirements of section 301 of the sarbanes
oxley act of 2002 should a call be received on the dedicated
telephone line the vicepresident business risk assurance would
immediately report to the chairman of the audit committee all
concerns raised a course of action is agreed and a report is prepared
for review at the next meeting of the audit committee including
details of actions taken to deal with the matters raised the chairman
of the committee will report all cases of “whistleblowing” to the
committee and the board the company’s code of conduct and
ethics includes the “whistleblowing” procedure no reports were
received by the committee during the year
shareholders are given the opportunity at the annual general
meeting to ask the chairman of the committee questions on this
report and any other related matter
n n broadhurst
chairman of the audit committee
21 february 2006
governance
57 governance
corporate governance report
tomkins plc annual report 2005
the board promotes the highest standards of corporate governance
within the company through its support and application of the
principles of good governance set out in section 1 of the combined
code a summary of the company’s system of applying the principles
and the manner in which the provisions in section 1 have been
complied with are set out in this report to shareholders section 1 of
the combined code sets out the main and supporting principles of
good governance for companies which are split into the following
areas directors remuneration accountability and audit and relations
with shareholders
a directors
1 the board
the company is controlled through its board of directors the board’s
main roles are to create value for shareholders to provide leadership
of the company to approve the company’s strategic objectives to
ensure that the necessary ﬁnancial and other resources are made
available to the management to enable them to meet those 
objectives and to operate within a framework of effective controls
which enables the assessment and management of principal 
business risks the board which has reserved certain speciﬁc matters
to itself for decision is responsible for approving overall group
strategy and ﬁnancial policy acquisition and divestment policy and
major capital expenditure projects it also appoints and removes
members of the board and board committees and reviews
recommendations of the audit committee remuneration committee
and nomination committee and the appointment of the independent
auditor and the ﬁnancial performance and operation of each of the
company’s businesses 
the board has delegated to the chief executive ofﬁcer
responsibility for the daytoday management of the group subject 
to certain ﬁnancial limits above which board approval is required 
the delegated authority includes such matters as operations
acquisitions and divestitures investments capital expenditure
borrowing facilities and foreign currency transactions
the board of directors comprises a nonexecutive chairman eight
additional nonexecutive directors and two executive directors who
together with their different ages ﬁnancial commercial technical
and operational expertise and cultures bring with them 
a wide range of experience to the company 
the board has determined that david newlands norman
broadhurst richard gillingwater jack keenan ken minton sir brian
pitman david richardson and struan robertson are independent as
they are independent of the company’s executive management and
free from any material business or other relationship with the
company either directly or as a partner shareholder or ofﬁcer of an
organisation that has a relationship with the company in december
2000 at the request of the board the nonexecutive chairman david
newlands temporarily assumed certain executive responsibilities until
the recruitment of james nicol as chief executive in february 2002 
it is the board’s view that this shortterm arrangement did not affect
mr newlands’ independence accordingly the board believes that
there are no such relationships that could materially interfere with the
exercise of their independent judgement marshall wallach is the only
nonexecutive director deemed not to be independent as a result of
his advisory capacity to the gates family who are substantial
preference shareholders in the company
nonexecutive directors are normally appointed for a minimum
period of two years which is renewable by agreement with the
board the terms and conditions of appointment of nonexecutive
directors are available for inspection at the company’s registered ofﬁce
during normal business hours on weekdays and will also be available
for inspection at the place of the annual general meeting from 15
minutes before the meeting until it ends the combined code
recommends the appointment of a senior independent nonexecutive
director and sir brian pitman has served in this capacity during the year
under review the roles of nonexecutive directors are to scrutinise the
performance of management in meeting agreed objectives help
develop proposals on strategy and monitor the reporting of
performance including satisfying themselves as to the integrity of
ﬁnancial information and that ﬁnancial controls and systems of risk
management put in place by the company are robust and effective
they meet together from time to time in the absence of management
and the chairman normally presides over such meetings
directors receive a range of information about the company upon
appointment and where appropriate any training that is necessary 
for them to carry out their duties effectively an induction programme 
is available which aims to provide an understanding of the company 
as a whole including its strategy structure geographical spread of
operations ﬁnancial position markets products technologies and
people as well as their legal responsibilities as a director the directors
have access to the advice and services of the company secretary whose
removal may be effected only with the approval of the board there is
an approved procedure by which all directors can obtain independent
professional advice at the company’ s expense in furtherance of their
duties if required this procedure is reviewed periodically
the board ordinarily meets not less than ﬁve times a year and will
hold additional meetings when circumstances require during the year
to 31 december 2005 the board met on ﬁve occasions including a
meeting held solely to consider and approve group strategy between
meetings the chairman and chief executive ofﬁcer update the non
executive directors on current matters and there is frequent contact to
progress the affairs of the company with the encouragement of the
chief executive ofﬁcer the nonexecutive directors have regular
contact with senior management through their presentations at board
meetings at strategic reviews and on other occasions
attendance by each individual director at board and committee
meetings held during 2005 is set out in the table on the next page
the board sets the standards and values of the company and
much of this has been embodied in the company’s code of conduct
and ethics and human rights policy which can be found on the
company’s website wwwtomkinscouk the code of conduct 
and ethics applies to all directors ofﬁcers and employees including
the principal executive ﬁnancial and accounting ofﬁcers as required
by section 406 of the us sarbanesoxley act of 2002 the related
rules of the us securities and exchange commission and the rules 
of the new york stock exchange the code contains provisions 
in paragraph xvi under which employees can report violations of
company policy or any applicable law rule or regulation including
those of the us securities and exchange commission us employees
have the added protection of section 806 of the sarbanesoxley act
of 2002 which prohibits the discrimination by a company or others
against an employee where such violations are reported the current
procedure which is set out in tomkins’ code of conduct and ethics
provides for information to be given anonymously or by named
employees under conditions of conﬁdentiality those employees who
come forward and give their name are assured that they will receive
the full protection of section 806 and no retaliation will take place
this is of particular importance since 57 per cent of the company’s
employees are based in the us furthermore the company ensures
that the principles are applied in other jurisdictions subject to
compliance with local employment and other laws
58 tomkins plc annual report 2005
reappointment of directors
at the forthcoming annual general meeting of the company and in
accordance with the company’s articles of association ken minton
and ken lever as the longest serving directors will retire from the
board and ken lever will seek reappointment norman broadhurst
will retire from the board at the conclusion of the annual general
meeting and together with ken minton will not be seeking 
reappointment there are no circumstances relating to their
retirement from the board that they wish to draw to the attention of
shareholders marshall wallach will stand down from the board with
effect from 1 may 2006 richard gillingwater and struan robertson
who were appointed by the board on 20 december 2005 and david
richardson who was appointed by the board on 1 march 2006 are
required in accordance with the company’s articles of association 
to seek reappointment at the ﬁrst annual general meeting following
their appointment details of their terms of appointment can be
found in the remuneration committee report richard gillingwater
has many years’ broad business experience including investment
banking and struan robertson has held a number of senior
management positions in both the uk and overseas david richardson
has substantial ﬁnancial management and strategic planning
experience over many years the board strongly supports the 
reappointment of all directors standing for reappointment and
recommends that shareholders vote in favour of their reappointment 
2 chairman and chief executive officer
there is a clear division of responsibility between the chairman and
the chief executive ofﬁcer with neither having unfettered powers 
of decision with respect to substantial matters the chairman is
responsible for running the board and ensures that all directors
receive sufﬁcient relevant information on ﬁnancial business and
corporate matters to enable them to participate effectively in board
decisions in advance of each meeting the board is provided with
comprehensive brieﬁng papers on items under consideration
the chairman david newlands is also chairman of kesa electrical
plc and paypoint plc whilst these are important appointments the
board of tomkins believes that the chairman continues to be able 
to carry out his duties and responsibilities effectively for the company
the chief executive ofﬁcer’ s primary role is the running of the
company’s businesses and the development and implementation of
strategy the nonexecutive directors have the opportunity to meet with
the chairman and with the chief executive ofﬁcer periodically either
together or separately to consider and discuss a wide range of matters
affecting the company its business strategy and other matters
3 board committees
the board has established a number of committees and receives
reports of their proceedings each committee has its own delegated
authority as deﬁned in its terms of reference which are reviewed
periodically by the board the board is satisﬁed that its committees
have written terms of reference which conform to best corporate
governance practice the terms of reference for all board committees
can be found on the company’s website wwwtomkinscouk or 
a copy can be obtained by application to the company secretary 
at the company’s registered ofﬁce
the board appoints the chairmen and members of all 
board committees upon the recommendation of the
nomination committee the company secretary is secretary
to all board committees 
the principal committees their membership a brief description 
of their terms of reference and their duties are as follows
audit committee
n n broadhurst chairman r d gillingwater k j minton 
j m j keenan d h richardson appointed 1 march 2006
details of the audit committee and its work can be found 
on pages 56 and 57
governance
59
attendance by each individual director at board and committee meetings held during 2005 
health
safety and
audit remuneration nomination environment 
board committee committee committee committee
meetings held in 2005 5 5 2 3 3
meetings attended
david newlands 5 na na 3 na
norman broadhurst 5523 na
richard gillingwater na na na na na
jack keenan 5423 na
ken lever 5 na na na na
ken minton 54233
james nicol 5 na na na 3
sir brian pitman 5 na na 3 na
struan robertson na na na na na
marshall wallach 5 na na 3 3
notes
na  not applicable where a director is not a member of a committee
richard gillingwater and struan robertson were both appointed to the board and committees on 20 december 2005 and no board or committee meetings were held between that date and the
end of the year 
during the year other directors have attended meetings of the audit committee remuneration committee nomination committee and health safety and environment committee by invitation
these details are not included in the above table
on the rare occasion when a director cannot attend a meeting he will normally prior to the meeting make his views on the agenda items known to the chairman or in respect of committee
meetings to the chairman of the respective committee governance
corporate governance report continued
tomkins plc annual report 2005
remuneration committee
k j minton chairman n n broadhurst r d gillingwater j m j keenan
the remuneration committee which meets at least twice a year
and on other occasions when circumstances require comprises
independent nonexecutive directors and has responsibility for
determining company policy on executive remuneration for approval
by the board it also determines speciﬁc remuneration packages and
compensation packages on employment or early termination of ofﬁce
for each of the executive directors of the company the committee
takes independent advice from consultants as and when required all
decisions of the remuneration committee in respect of remuneration
packages of executive directors are referred to the board no
executive director takes part in any discussion or decision concerning
his own remuneration the remuneration committee also monitors
the compensation packages of other senior executives in the group
below board level
the report of the remuneration committee can be found on
pages 50 to 55
nomination committee
d b newlands chairman n n broadhurst r d gillingwater 
j m j keenan k j minton sir brian pitman d d s robertson 
m f wallach
the nomination committee makes recommendations to the board
on all proposed appointments of directors through a formal and
transparent procedure the committee meets as and when required 
in accordance with the company’s articles of association directors
are subject to reappointment at the annual general meeting
immediately following the date of their appointment and thereafter
they have to seek reappointment no more than three years from the
date they were last reappointed the committee recommends to the
board the names of the directors who are to seek reappointment at
the annual general meeting in accordance with the company’s
articles of association
during the year two new board appointments were made the
nomination committee was at the heart of the recruitment process
including the appointment of professional advisers and conducting
interviews with potential candidates and the committee and board
are aware of and support the principles set out in section a4 of the
combined code relating to appointments to the board
health safety and environment committee
k j minton chairman j nicol d d s robertson m f wallach
the health safety and environment committee meets at least
three times a year the committee is chaired by an independent non
executive director and its membership also includes the chief
executive ofﬁcer its principal role is to determine on behalf of the
board the framework or broad policy and objectives in the areas of
health safety and the environment “hse” and propose any
amendments to existing policies for approval by the board it also
reviews management’s performance in the achievement of hse
objectives and reviews hse reports produced by business units for
compliance with all local health safety and environmental codes of
practice legislation and relevant industry practice 
more details of the work of the health safety and environment
committee can be found in the corporate social responsibility report
to shareholders on pages 20 to 27
general purposes committee
j nicol chairman k lever e h lewzey j e middleton n c porter
k a sullivan m t swain n p wilkinson
the general purposes committee meets as and when required it
comprises executive directors and senior executives and the quorum
requires the presence of at least one executive director the
committee deals principally with daytoday matters of a routine
nature and matters delegated to it by the board
disclosure committee
d b newlands chairman j nicol k lever
during the year the board formed a disclosure committee for the
purpose of inter alia reviewing and approving for release all price
sensitive information relating to the company and compliance with
the disclosure rules of the financial services authority 
4 board committee and chairman evaluations
under the direction of the senior independent director sir brian
pitman evaluations of the effectiveness of the board its committees
and chairman were conducted during the year the evaluation
processes built on the experiences of the previous evaluations of the
board and its committees and concentrated on six key elements 
i the optimum mix of skills and knowledge amongst the directors 
ii clarity of goals and processes iii tailoring the evaluation to the
speciﬁc circumstances of tomkins iv the culture of candour that
encourages constructive evaluation v regular reviews of assessment
criteria and vi full disclosure of procedures and criteria to the board
board and committee evaluation
the third board performance evaluation took place during the year
building on the experiences of the ﬁrst two years the overall view of
directors was that the board functions well supported by high quality
papers presentations and reporting improvements in the
communication processes between board meetings were suggested
to maintain the ongoing and high quality of debate within the board
on board structure directors were conscious that care was needed
when replacing nonexecutive directors in order to maintain the
balance of skills and experience of the board and this has been taken
into account in the recruitment of nonexecutive directors during 
the year
the second board committee performance evaluation reinforced
the positive messages that were highlighted in the ﬁrst evaluation
the committees were led by strong and experienced members who
were well informed there were a small number of suggestions on
improving particular aspects of the work of a committee including
reporting by the committee overall there was satisfaction that the
committees function well
chairman
for the evaluation of the chairman this year a more formal approach
was adopted which included completion of a questionnaire that
sought views across a broad range of the chairman’s responsibilities
the directors were very positive about the role performed by the
chairman and his leadership of the board a small number of
suggestions were made and these were discussed with the chairman
by the senior independent director sir brian pitman
b remuneration
the remuneration committee report to shareholders can be found on
pages 50 to 55 and sets out the company’s remuneration policy
procedures and the remuneration of individual directors and related
information
60 tomkins plc annual report 2005
c accountability and audit
1 financial reporting
the board through the business operating and financial reviews
seeks to provide a detailed understanding of each business of the
group in conjunction with the chairman’s statement the chief
executive’s statement the operating and financial review and the 
directors’ report the board seeks to present a balanced and
understandable assessment of the company’s position and prospects
2 internal control
further information on the internal control environment within which
tomkins operates may be found in the directors’ statement on
internal control on pages 62 and 63
3 going concern
the directors are conﬁdent on the basis of current ﬁnancial
projections and facilities available that the company and the group
have adequate ﬁnancial resources to continue in operation for the
foreseeable future for this reason the directors continue to adopt
the going concern basis in preparing the ﬁnancial statements
4 “whistleblower” reporting procedures
under section 301 of the sarbanesoxley act of 2002 all public
companies including nonus public companies such as tomkins
acting through the audit committee of the board must provide a
procedure for the receipt retention and treatment of complaints
received by the company regarding accounting internal controls or
auditing matters the audit committee and the board have agreed a
procedure for the conﬁdential and anonymous submission by
employees of concerns regarding these matters
d relations with shareholders
the company places a high degree of importance on maintaining
good relationships and communications with both institutional and
private investors and ensures that shareholders are kept informed of
signiﬁcant company developments
in order to assist members of the board to gain an understanding
of the views of institutional shareholders at each of its meetings the
board receives an investor relations report which covers a wide
range of matters including a commentary on the perception of the
company and views expressed by the investment community
analysts’ reports are also made available to all directors the
announcement of quarterly halfyear and fullyear results provides
opportunities for the company to answer questions from institutional
shareholders covering a wide range of topics the chairman chief
executive ofﬁcer finance director and senior vicepresident – investor
relations hold a regular dialogue with institutional shareholders to
ensure the mutual understanding of objectives regular reports are
made to nonexecutive directors by the chairman chief executive
ofﬁcer and finance director of the key points to emerge from
meetings they have had with substantial shareholders the chief
executive ofﬁcer participates in industry conferences organised by
investment banks which are attended by existing and potential
shareholders and he holds regular meetings with analysts and
institutional shareholders the company exercises care to ensure that
all pricesensitive information is released to all shareholders at the
same time as required by the listing rules of the financial services
authority and regulation fd in the us
the company’s website provides shareholders and potential
investors with information about the company including annual and
interim reports recent announcements investor presentations share
price information group policies and the terms of reference of its
board committees shareholders are also able to put questions to the
company via its website
the company aims to deal expeditiously with all enquiries from
shareholders on a wide range of matters shareholders also have the
opportunity to attend the annual general meeting to put questions
to the chairman and to the chairmen of board committees the
chief executive ofﬁcer gives a presentation to shareholders covering a
wide range of matters affecting the company and its business and
shareholders have the opportunity to ask him questions the
company indicates the level of proxy votes lodged in respect of each
resolution proposed at its annual general meeting following each
vote on a show of hands in the event of a poll being called the
result will be published as soon as possible after the conclusion of the
annual general meeting directors also meet informally with
shareholders before and after the meeting the company keeps
under review ways in which it can communicate more effectively with
its shareholders throughout the year as well as at the annual general
meeting 
it has been the company’s practice to send the notice of the
annual general meeting and related papers to shareholders at least
20 working days before the meeting and to propose separate
resolutions on each substantially separate issue
institutional shareholders
the board notes that section 2 of the combined code seeks to
encourage more active participation by institutional shareholders
including entering into a dialogue with companies and making
considered use of their votes – principles which the company
supports
compliance statement
the listing rules of the financial services authority require the board
to report on compliance with the provisions contained in section 1 of
the combined code tomkins considers that throughout the year to
31 december 2005 the company has been in compliance with the
code provisions set out in section 1 of the july 2003 frc combined
code on corporate governance except for those matters indicated in
the remuneration committee report
the certiﬁcations of the chief executive ofﬁcer and finance
director required under section 302 of the us sarbanesoxley act of
2002 and the related rules of the us securities and exchange
commission will be ﬁled as exhibits to the company’s form 20f 
pursuant to section 303a the foreign private issuer annual written
afﬁrmation was sent to the new york stock exchange nyse in
august 2005 afﬁrming without qualiﬁcation that tomkins has
complied with the requirements laid down by the nyse in respect of
foreign private issuers 
the company has placed on its website a general summary of the
signiﬁcant ways in which the company’s corporate governance differs
from that followed by domestic us companies under the nyse’s
listing standards as required by section 303a11
governance
61 governance
internal control
tomkins plc annual report 2005
the directors have overall responsibility for the group’s system of
internal control and for reviewing its effectiveness to fulﬁl this
responsibility the directors have established a performance
management framework within which each of the group’s businesses
operates within this framework the management of each of the
businesses considers strategic operational commercial and ﬁnancial
risks and identiﬁes risk mitigation actions whilst acknowledging the
overall responsibility for the system of internal control the directors
are aware that the system is designed to manage rather than
eliminate the risk of failure to achieve business objectives and can
provide reasonable and not absolute assurance against material
misstatement or loss
during the period under review the directors were not aware
of any control breakdowns which resulted in a material loss to 
the group 
the performance management framework which includes an
ongoing process for identifying evaluating and managing the
signiﬁcant risks faced by the group has been in place throughout 
the ﬁnancial year and up to the approval date of the directors’ report
and accounts each business unit’s management identiﬁes and
assesses the key business risks affecting the achievement of its
objectives business unit management also identiﬁes the risk
management processes used to mitigate the key risks to an
acceptable level and where appropriate additional actions required to
further manage and mitigate them the risk summaries developed out
of this process are updated at least annually in addition corporate
centre management considers those risks to the group’s strategic
objectives that may not be identiﬁed and managed at the business
unit level
in connection with quarterly business reviews relevant 
executives discuss risk management activities with corporate centre
management the key risks and mitigation strategies are also
discussed at least annually with the audit committee as well as the
full board
the risk management processes described above are applied to
major decisionmaking processes such as acquisitions as well as
operational risks within the business including environmental health
and safety
the other key elements of the performance management
framework which constitutes the control environment are
business strategy reviews – each business is required to prepare 
a strategic position assessment taking into account the current and
likely future market environment and competitive position of the
business with speciﬁc consideration given to strategic risk the
corporate centre management reviews the strategy with each
business and the board is presented with a summary of the plans
business reviews – on a quarterly basis corporate centre
management performs extensive reviews with each business 
these reviews consider current and projected ﬁnancial and operating
results and address the progress of key strategic and operating
initiatives the risks affecting their achievement and the actions being
taken by business unit management to manage the risks and achieve
their objectives
financial plans – each business prepares ﬁnancial plans in
accordance with a deﬁned format which includes consideration 
of risks management at the corporate centre reviews the ﬁnancial
plans with the business units and a summary is presented to the
board for approval
balance sheet reviews – business unit and corporate centre
ﬁnancial management conduct periodic onsite reviews of underlying
rationale and support for the signiﬁcant line item components
comprising the balance sheets for each business in the group
investment project authorisation – all signiﬁcant investment
project expenditures are subject to a formal investment project
authorisation process which takes into account inter alia
operational ﬁnancial and technical risks for signiﬁcant investment
projects a postinvestment analysis is completed to facilitate
continuous improvement in the investment planning process
including risk identiﬁcation and mitigation
reporting analysis and forecasts – all businesses are required 
to report monthly to the corporate centre on ﬁnancial performance
comparisons are made with plan forecast and prior year and
signiﬁcant variances and changes in the business environment are
explained each business reassesses its forecast for the ﬁnancial year
on a monthly basis quarterly each business prepares a forecast 
for the following eighteen months and reviews projections for the
current and following year
financial strategy – the ﬁnancial strategy includes assessment 
of the major ﬁnancial risks related to interest rate exposure foreign
currency exposure debt maturity and liquidity there is a
comprehensive global insurance programme using the external
insurance market and some limited use of an internal captive
insurance company group treasury manages hedging activities
relating to ﬁnancial risks with external cover for net currency
transaction exposures the group tax function manages tax
compliance and tax risks associated with the group’s activities 
the audit committee through the finance committee oversees 
the ﬁnancial strategy as well as the tax strategy and considers the
associated risks and risk management techniques being used by 
the group
reporting certiﬁcations – in connection with the preparation of 
the annual and quarterly ﬁnancial statements senior business general
management and ﬁnancial management sign a certiﬁcate which
includes a declaration regarding the existence of internal controls 
the proper recording of transactions and the identiﬁcation and
evaluation of signiﬁcant business risks these certiﬁcations were
expanded to encompass section 302 of the sarbanesoxley act 
of 2002 the “act” in support of statements required to be made 
by tomkins’ chief executive ofﬁcer and finance director see further
discussion of sarbanesoxley below
sarbanesoxley – as a foreign private issuer fpi listed on the 
nyse in the us the group is subject to the provisions of the act 
in particular section 404 of the act requires certiﬁcations by
management regarding the effectiveness of internal controls over
ﬁnancial reporting and requires the independent auditors to express
an opinion on the board’s assertions regarding such internal controls
accordingly the group has undertaken a project to ensure tomkins 
is in compliance with the requirements of section 404 of the act by
31 december 2006 the effective date for the group as a fpi while
the certiﬁcation and external audit opinion on internal controls over
ﬁnancial reporting will be reported in tomkins’ us sec ﬁlings the
results of tomkins’ compliance with the act will serve to further
strengthen the internal control framework for the group 
the group has an established internal audit function the vice
president – business risk assurance directs the activities of the internal
auditors on a daytoday basis and reports directly to the audit
committee of the board at least four times a year due to the
importance and signiﬁcance of the effort required to achieve
sarbanesoxley compliance during the ﬁrst half of 2005 the board
directed substantially all internal audit resources towards supporting
62 tomkins plc annual report 2005
the sarbanesoxley project described above internal audit’s support
primarily assisted management in completing controls documentation
assessing design effectiveness and developing test plans internal
audit’s support is expected to continue in 2006 but will shift to testing
the operating effectiveness of controls in higher risk areas 
and providing the board with assurance over management’s testing
process in other risk areas however with the sarbanesoxley
compliance extension for fpis to 31 december 2006 the majority 
of internal audit resources were redeployed to perform internal 
audit reviews in areas other than ﬁnancial reporting controls for the
last half of 2005
the directors conﬁrm that the effectiveness of the system of
internal control for the year ended 31 december 2005 has been
reviewed in line with the criteria set out in the guidance for directors
in the combined code
governance
63 consolidated financial statements prepared in accordance with ifrs 
directors’ responsibilities in relation to the financial statements 
64 
the directors are required by law to prepare consolidated financial 
statements of tomkins plc and its subsidiaries together “the group” in 
accordance with the companies act 1985 international financial reporting 
standards and article 4 of the ias regulation 
the directors are required to ensure that the group’s financial statements 
present fairly for each financial year the group’s financial position financial 
performance and cash flows which requires the faithful representation of the 
effects of transactions other events and conditions in accordance with the 
definition and recognition criteria for assets liabilities income and expenses 
set out in the international accounting standards board’s “framework for 
the preparation and presentation of financial statements”  
in preparing the group’s financial statements the directors are required 
properly to select and apply accounting policies present information 
including accounting policies in a manner that provides relevant reliable 
comparable and understandable information and provide additional 
disclosures when compliance with the specific requirements of international 
financial reporting standards is insufficient to enable users to understand 
the impact of particular transactions other events and conditions on the 
group’s financial position and financial performance 
the directors are responsible for ensuring that the company keeps proper 
accounting records which disclose with reasonable accuracy at any time the 
financial position of the group and which enable them to ensure that the 
group’s financial statements comply with applicable law  
the directors are responsible for safeguarding the assets of the group and 
hence for taking such steps as are reasonably open to them to prevent and 
detect fraud and other irregularities and for the preparation of a directors’ 
report and directors’ remuneration report which comply with the 
requirements of the companies act 1985 
the directors are also responsible for the maintenance and integrity of the 
financial information contained on the corporate website wwwtomkinscouk 
the work carried out by the auditors does not involve consideration of these 
matters and accordingly the auditors accept no responsibility for any changes 
that may have occurred to the group’s financial statements since they were 
initially presented on the website legislation in the united kingdom governing 
the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
independent auditors’ report  
 
tomkins plc annual report 2005 
65
group – ifrs 
to the members of tomkins plc 
we have audited the consolidated financial statements of tomkins plc and its 
subsidiaries together “the group” for the year ended 31 december 2005 
“the group’s financial statements” which comprise the consolidated 
income statement consolidated cash flow statement consolidated balance 
sheet consolidated statement of recognised income and expense the 
reconciliation of changes in consolidated shareholders’ equity the related 
notes 1 to 45 and the information on pages 108 to 121 these financial 
statements have been prepared in accordance with the accounting policies 
set out therein we have also audited the information in the remuneration 
committee’s report that is described as having been audited 
we have reported separately on the individual financial statements of 
tomkins plc for the year ended 31 december 2005 
this report is made solely to the company’s members as a body in 
accordance with section 235 of the companies act 1985 our audit work 
has been undertaken so that we might state to the company’s members 
those matters we are required to state to them in an auditors’ report and  
for no other purpose 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 the 
remuneration committee report and the group financial statements  
in accordance with applicable law and international financial reporting 
standards ifrs as adopted in the european union are set out in the 
statement of directors’ responsibilities 
our responsibility is to audit the group’s financial statements and the part  
of the remuneration committee report described as having been audited in 
accordance with relevant united kingdom legal and regulatory requirements 
and international standards on auditing uk and ireland  
we report to you our opinion as to whether the group’s financial statements 
give a true and fair view in accordance with the relevant financial reporting 
framework and whether the group financial statements and the part of the 
remuneration committee report described as having been audited have 
been properly prepared in accordance with the companies act 1985 and 
article 4 of the ias regulation we report to you if in our opinion the 
directors’ report is not consistent with the group’s financial statements  
we also report to you 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 with the  
company and other members of the group is not disclosed 
we report to you if in our opinion the company has not complied with any 
of the four directors’ remuneration disclosure requirements specified for our 
review by the listing rules of the financial services authority these comprise 
the amount of each element of the remuneration package and information 
on share options details of longterm incentive schemes and money 
purchase and defined benefit pension schemes we give a statement  
to the extent possible of details of any noncompliance 
we review whether the corporate governance statement reflects the 
company’s compliance with the nine provisions of the 2003 frc 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 statement on internal control covers 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 directors’ report and the other information contained in  
the annual report for the above year as described in the contents section 
including the unaudited part of the remuneration committee report and  
we consider the implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the group’s  
financial statements  
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 group’s financial statements and the part of the 
remuneration committee report described as having been audited it also 
includes an assessment of the significant estimates and judgements made  
by the directors in the preparation of the group’s financial statements  
and of whether the accounting policies are appropriate to the 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 group’s financial 
statements and the part of the remuneration committee report described as 
having been 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 
group financial statements and the part of the remuneration committee 
report described as having been audited 
opinion 
in our opinion the group financial statements give a true and fair view  
in accordance with ifrs as adopted for use in the european union of the 
state of the group’s affairs as at 31 december 2005 and of its profit for the 
year then ended and the group financial statements and the part of the 
remuneration committee report described as having been audited have 
been properly prepared in accordance with the companies act 1985 and 
article 4 of the ias regulation  
 
 
deloitte  touche llp 
chartered accountants and registered auditors   
london 
21 february 2006 
 
 
 
  consolidated financial statements prepared in accordance with ifrs 
consolidated income statement  
66 
 
 
 
note 
year ended 
31 december 
2005 
£ million 
 year ended 
1 january 
2005
£ million 
   
continuing operations   
sales 2  31824  29741 
cost of sales  22889 21202
gross profit  8935  8539 
distribution costs  3264 3135
administrative expenses  2592 2369
share of profit of associates  06  08 
profit from operations before restructuring initiatives  3085  3043 
restructuring costs 3  203 205
gain on disposals and on the exit of businesses 3  85  25 
profit from operations  2967  2863 
interest payable 5  835 648
investment income 6  403  388 
other finance income 7  42  – 
net finance costs  390 260
profit before tax  2577  2603 
income tax expense  9  590 511
profit for the period from continuing operations  1987  2092 
   
discontinued operations   
profit for the period from discontinued operations 8  25  09 
profit for the period 10  2012  2101 
minority interests  90 101
dividends payable on convertible cumulative preference shares  –  156
profit for the period attributable to equity shareholders   1922  1844 
   
earnings per share   
basic   
continuing operations 11  2459p 2381p
discontinued operations 11  033p 012p
total operations 11  2492p 2393p
  
diluted  
continuing operations 11  2350p 2271p
discontinued operations 11  029p 010p
total operations 11  2379p 2281p
  
dividends per ordinary share  12  1323p 1260p
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
consolidated cash flow statement 
 
67
group – ifrs 
 note 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
 2005 
£ million 
operating activities   
cash generated from operations 14  3365 3339 
income taxes paid  795 560
income taxes received  90 162 
net cash inflow from operating activities  2660 2941 
  
investing activities  
purchase of property plant and equipment  1285 1545
purchase of intangible assets  148 32
capitalisation of development costs  04 – 
disposal of property plant and equipment  238 55 
purchase of subsidiaries net of cash acquired 40  1013 240
sale of subsidiaries net of cash disposed 41  293 213 
dividends received from associates  03 04 
net cash outflow from investing activities  1916 1545
  
financing activities  
issue of ordinary shares  04 12 
drawdown of bank and other loans   1854 18 
repayment of bank and other loans   491 61
capital element of finance lease rental payments  28 35
interest element of finance lease rental payments  07 09
increase in collateralised cash  05 11
purchase of own shares  24 41
sale of own shares  29 –  
interest received  58 40 
interest paid  261 186
equity dividend paid  994 945
preference dividend paid  161 159
investment by a minority shareholder in a subsidiary  – 39 
dividend paid to a minority shareholder in a subsidiary  59 27
net cash outflow from financing activities  85 1365
  
net increase in cash and cash equivalents  659 31 
cash and cash equivalents at the beginning of the period  1789 1606 
foreign currency translation  243 152 
cash and cash equivalents at the end of the period  2205 1789 
cash and cash equivalents for the purposes of the cash flow statement comprise 
  as at 
31 december 
2005 
£ million 
as at
1 january 
2005
 £ million 
cash and cash equivalents  2309 1854 
bank overdrafts  104 65
  2205 1789 
as at 31 december 2005 the group’s net debt was £6413 million including the convertible cumulative preference shares 1 january 2005 – £2445 million 
a reconciliation of the change in cash and cash equivalents to the movement in net debt is presented in note 14  
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
consolidated balance sheet 
tomkins plc annual report 2005 
68 
 note 
as at 
31 december 
2005 
£ million 
 as at 
1 january 
 2005
£ million 
noncurrent assets  
goodwill 15  3195 2263 
other intangible assets 16  220 46  
property plant and equipment 17  8317 7422  
investments in associates 18  44 37 
trade and other receivables 20  198 40 
deferred tax assets 33  1019 1194  
  12993 11002  
current assets  
inventories 19  4447 3696  
trade and other receivables  20  5837 5087  
income tax recoverable  41 143  
availableforsale investments  22  22 16  
cash and cash equivalents 23  2309 1854  
  12656  10796  
assets held for sale 24  134 328  
total assets  25783 22126  
current liabilities  
bank overdrafts 25  104 65
bank and other loans 25  311 99
obligations under finance leases  26  24 34
trade and other payables 27  4423 3824
income tax liabilities  176 116
provisions 34  413 402
  5451 4540
noncurrent liabilities  
bank and other loans  25  5310 3995
obligations under finance leases  26  99 87
trade and other payables 27  153 123
postemployment benefit obligations 31  2963 2765
deferred tax liabilities 33  500 427
income tax liabilities  949 1541
provisions 34  182 192
  10156 9130
convertible cumulative preference shares 39  3047 –  
  13203 9130
liabilities directly associated with assets held for sale 24  – 03
total liabilities  18654 13673
net assets  7129 8453  
  
capital and reserves  
ordinary share capital 35  387 387  
share premium account 35  958 940  
own shares 36  87 89
capital redemption reserve 37  4619 4619  
currency translation reserve 37  325  276
retained profitlosses 37  443  916
shareholders’ equity  6645 4665  
minority interests 38  484 416 
total equity  7129 5081  
convertible cumulative preference shares 39  – 3372  
  7129 8453  
approved by the board on 21 february 2006 and signed on its behalf by 
 
j nicol 
 directors  
k lever      consolidated financial statements prepared in accordance with ifrs 
consolidated statement of recognised income and expense  
69
group – ifrs 
 
 
as at 
31 december 
2005 
£ million 
as at 
1 january 
2005
£ million 
profit for the period 2012 2101 
net incomeexpense recognised directly in equity 
fair value gain on available for sale investments 07 – 
post employment benefits 
– actuarial lossesgains 441 116 
– effect of the asset ceiling 03 01 
currency translation differences on foreign operations 
– subsidiaries 1362 289
– associates 04 02
fair value loss on net investment hedges 726 – 
tax on items taken directly to equity 162 55
 365 229
transfers from equity to the income statement 
fair value gain realised on the sale of availableforsale investments  04 – 
cumulative currency translation differences on the disposal of foreign operations – 09 
 04 09 
total recognised income and expense for the period 2373 1881 
 
attributable to 
– equity shareholders 2246 1631 
– preference shareholders – 156 
– minority interests 127 94 
 2373 1881 
 
reconciliation of changes in consolidated shareholders’ equity 
 
 
 year ended 
31 december 
2005 
£ million 
year ended 
1 january 
2005
£ million 
shareholders’ equity at the beginning of the period  4665 3964 
adoption of ias 32 and ias 39 note 1c  631 – 
  5296 3964 
total recognised income and expense attributable to equity shareholders  2246 1631 
dividends on ordinary shares  994 945
new shares issued net of costs  18 12 
purchase of own shares  24 41
sale or transfer of own shares  29 – 
cost of equitysettled sharebased incentives  74 44 
net addition to shareholders’ equity during the period  1349 701 
shareholders’ equity at the end of the period  6645 4665 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements  
 
70 
1  principal accounting policies 
a basis of preparation 
the consolidated financial statements on pages 66 to 107 and the related 
information on pages 108 to 123 have been prepared in accordance with 
international financial reporting standards “ifrs” adopted for use in the 
european union and except as described under the heading “financial 
instruments” under the historical cost convention 
b firsttime adoption of ifrs 
the group adopted ifrs with a transition date of 4 january 2004 
accordingly the group’s consolidated balance sheet as at 1 january 2005 
and its consolidated income statement and consolidated cash flow statement 
for the year then ended that were previously reported in accordance with 
united kingdom generally accepted accounting principles “uk gaap” have 
been restated in accordance with ifrs on the basis of the accounting polices 
described below  
an explanation of the transition to ifrs and an analysis of the significant 
differences between uk gaap and ifrs that were relevant to the group  
and of their effect on the group’s reported financial position as at  
3 january 2004 and 1 january 2005 and its results and cash flows for the 
year ended 1 january 2005 is presented on pages 108 to 123  
c adoption of ias 32  ias 39 
the group adopted ias 32 ”financial instruments disclosure and 
presentation” and ias 39 “financial instruments recognition and 
measurement” prospectively from 2 january 2005 accordingly comparative 
information as at 1 january 2005 and for the year then ended has not been 
restated to reflect the adoption of these accounting standards 
on adoption of ias 32 and ias 39 the group recognised an increase in net 
debt of £2717 million and an increase in shareholders’ equity of  
£631 million that may be analysed as follows 
 £ million 
convertible cumulative preference shares 2736 
fair valuation of derivative financial instruments 60
hedging accounting adjustment to borrowings 57 
net interest accrual reclassified from payables  
and receivables 16
increase in net debt 2717 
 
convertible cumulative preference shares 636 
fair valuation of availableforsale investments  04 
fair valuation of derivative financial instruments  75 
hedge accounting adjustment to borrowings 57
tax on the above 26
 632 
minority interest in the above 01
increase in shareholders’ equity 631 
an explanation of the effect of adopting ias 32 and ias 39 is presented 
below under the heading “financial instruments”  
d basis of consolidation 
the consolidated financial statements include the results cash flows and 
assets and liabilities of tomkins plc “the company” and its subsidiaries 
together “the group” and the group’s share of the results and net assets 
of its associates  
a subsidiary is an entity controlled either directly or indirectly by the 
company where control is the power to govern the financial and operating 
policies of the entity so as to obtain benefit from its activities the results  
of a subsidiary acquired during the period are included in the group’s  
results from the effective date of acquisition the results of a subsidiary sold 
during the period are included in the group’s results up to the effective date 
of disposal  
where accumulated losses applicable to a minority interest in a subsidiary 
exceed the minority’s interest in the equity of the subsidiary the excess is 
allocated to the group’s interest in the subsidiary except to the extent that 
the minority has a binding obligation and is able to make an additional 
investment to cover its share of the accumulated losses 
intragroup transactions and balances and any unrealised gains and losses 
arising from intragroup transactions are eliminated on consolidation  
e associates 
an associate is an entity over which the company either directly or 
indirectly is in a position to exercise significant influence by participating in 
but not controlling or jointly controlling the financial and operating policies 
of the entity associates are accounted for using the equity method losses 
of an associate in excess of the group’s interest in the associate are not 
recognised except to the extent that the group has incurred obligations on 
behalf of the associate profits and losses recognised by the company or its 
subsidiaries on transactions with an associate are eliminated to the extent of 
the group’s interest in the associate concerned  
f foreign currency translation 
at entity level transactions denominated in foreign currencies are  
translated into the entity’s functional currency at the exchange rate ruling  
on the date of the transaction monetary assets and liabilities denominated  
in foreign currencies are retranslated at the exchange rate ruling on the 
balance sheet date currency translation differences are recognised in the 
income statement 
on consolidation the results of foreign operations are translated into sterling 
at the average exchange rate for the period and their assets and liabilities are 
translated into sterling at the exchange rate ruling on the balance sheet 
date currency translation differences are recognised directly in equity in the 
currency translation reserve  
in the event that a foreign operation is sold the gain or loss on disposal 
recognised in the income statement is determined after taking into account 
the cumulative currency translation differences that are attributable to the 
operation on adoption of ifrs the group elected to deem cumulative 
currency translation differences to be £nil as at 4 january 2004 accordingly 
the gain or loss recognised on disposal of a foreign operation does not 
include currency translation differences that arose before 4 january 2004  
in the cash flow statement the cash flows of foreign operations are 
translated into sterling at the average exchange rate for the period 
g revenue  
revenue from the sale of goods is measured at the invoiced amount net of 
returns early settlement discounts rebates and sales taxes and is recognised 
only where there is persuasive evidence of a sales agreement the delivery of 
goods has occurred the sale price is fixed or determinable and the 
collectability of revenue is reasonably assured  
revenue from longterm contracts is recognised by the percentageof
completion method determined by comparing contract costs incurred  
for work performed to date to estimated total contract costs losses on 
contracts if any are recognised in the period when such losses become 
probable and can be reasonably estimated 
interest income is accrued on a time basis using the effective interest method 
h goodwill 
business combinations are accounted for using the purchase method 
goodwill arises on the acquisition of subsidiaries and associates and 
represents any excess of the cost of the acquired entity over the group’s 
interest in the fair value of the entity’s identifiable assets liabilities and 
contingent liabilities determined at the date of acquisition goodwill in 
respect of an acquired subsidiary is recognised as an intangible asset 
goodwill in respect of an acquired associate is included within investments  
in associates goodwill is not amortised but is tested at least annually for 
impairment and carried at cost less any recognised impairment losses  
where the fair value of the interest acquired in an entity’s assets liabilities 
and contingent liabilities exceeds the consideration paid the excess is 
recognised immediately as a gain in the income statement  
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
71
group – ifrs 
1 principal accounting policies continued 
on adoption of ifrs the group elected not to apply ifrs 3 ”business 
combinations” to business combinations that were recognised before  
4 january 2004 as a result the carrying amount of goodwill recognised as 
an asset under uk gaap was brought forward unadjusted as the cost of 
goodwill recognised under ifrs as at 4 january 2004 and goodwill that was 
writtenoff directly to reserves under uk gaap is not taken into account in 
determining the gain or loss on disposal of acquired businesses on or after  
4 january 2004  
i other intangible assets  
other intangible assets are stated at cost less accumulated amortisation  
and any recognised impairment losses all intangible assets recognised  
by the group are considered to have finite useful lives 
i assets acquired in business combinations 
an intangible resource acquired in a business combination is recognised as 
an intangible asset if it is separable from the acquired business or arises from 
contractual or legal rights an acquired intangible asset is amortised on a 
straightline basis so as to charge its cost which represents its fair value at 
the date of acquisition to the income statement over its expected useful life 
ii product development costs  
all research expenditure is charged to the income statement in the period  
in which it is incurred  
development expenditure is charged to the income statement in the period 
in which it is incurred unless it relates to the development of a new or 
significantly improved product and it is incurred after the technical feasibility 
of the product has been proven and customer orders have been received that 
are expected to provide income sufficient to cover the further development 
expenditure that will be incurred prior to the product going into full 
production capitalised development expenditure is amortised on a straight
line basis such that it is charged to the income statement over the expected 
life of the resulting product 
development expenditure incurred before 4 january 2004 was not 
capitalised retrospectively because the conditions specified within ias 38 
“intangible assets” were not met 
iii computer software 
computer software that is not integral to an item of property plant and 
equipment is recognised separately as an intangible asset amortisation is 
provided on a straightline basis so as to charge the cost of the software to 
the income statement over its expected useful life which is in the range 
three to five years 
j property plant and equipment 
property plant and equipment is stated at cost less accumulated depreciation 
and any recognised impairment losses freehold land and assets under 
construction are not depreciated depreciation of property plant and 
equipment other than freehold land and assets under construction is 
generally provided on a straightline basis so as to charge the depreciable 
amount to the income statement over the expected useful life of the asset 
concerned which is in the following ranges 
freehold buildings and long leasehold land and buildings 10 to 50 years 
short leasehold land and buildings length of lease 
plant equipment and vehicles 2 to 20 years 
borrowing costs attributable to assets under construction are charged to the 
income statement in the period in which they are incurred 
k leases 
leases that confer rights and obligations similar to those that attach to 
owned assets are classified as finance leases all other leases are classified  
as operating leases  
assets held under finance leases are included within property plant and 
equipment initially measured at their fair value or if lower the present value 
of the minimum lease payments and a corresponding liability is recognised 
within obligations under finance leases subsequently the assets are 
depreciated on a basis consistent with similar owned assets or over the term of 
the lease if shorter at inception of the lease the lease rentals are apportioned 
between an interest element and a capital element so as to produce a constant 
periodic rate of interest on the outstanding liability thereafter the interest 
element is recognised as an expense in the income statement while the capital 
element is applied to reduce the outstanding liability  
operating lease rentals and any incentives receivable are recognised in the 
income statement on a straightline basis over the term of the lease 
l impairment of noncurrent assets  
noncurrent assets are tested for impairment whenever events or circumstances 
indicate that their carrying amounts might be impaired additionally goodwill 
and capitalised development expenditure relating to a product that is not yet in 
full production are subject to an annual impairment test 
an impairment loss is recognised to the extent that an asset’s carrying  
value exceeds its recoverable amount which represents the higher of the 
asset’s fair value less costs to sell and its value in use an asset’s value in use 
represents the present value of the future cash flows expected to be derived 
from the asset where it is not possible to estimate the recoverable amount 
of an individual asset the impairment test is conducted for the cash
generating unit to which it belongs similarly the recoverable amount of 
goodwill is determined by reference to the discounted future cash flows of 
the cashgenerating units to which it is allocated 
impairment losses are recognised in the income statement impairment  
losses recognised in previous periods for an asset other than goodwill are 
reversed if there has been a change in the estimates used to determine the 
asset’s recoverable amount but only to the extent that the carrying amount 
of the asset does not exceed its carrying amount had no impairment loss 
been recognised in previous periods impairment losses recognised in respect 
of goodwill are not reversed  
m inventories 
inventories are valued at the lower of cost and net realisable value  
with due allowance for any excess obsolete or slow moving items cost 
represents the expenditure incurred in bringing inventories to their existing 
location and condition which may include the cost of raw materials direct 
labour costs other direct costs and related production overheads cost is 
generally determined on a first in first out basis net realisable value is the 
estimated selling price less costs to complete and sell 
from time to time the group enters into forward purchase contracts to fix 
the price of commodities purchased for use in its manufacturing operations 
as used by the group such derivative contracts do not fall within the scope 
of ias39 and they are therefore not recognised as assets or liabilities on the 
balance sheet 
n grants 
grants received relating to property plant and equipment are treated as 
deferred income and recognised as income in equal instalments over the 
expected useful lives of the assets concerned other grants received are 
recognised as income on a systematic basis so as to match them with the 
costs they are intended to compensate or if those costs have already been 
recognised the grants are recognised as income in the period in which they 
are received 
o cash and cash equivalents 
cash and cash equivalents comprise cash in hand deposits available on 
demand and other shortterm highly liquid investments with a maturity on 
acquisition of three months or less and bank overdrafts bank overdrafts are 
presented as current liabilities to the extent that there is no right of offset 
with cash balances 
p financial instruments 
i investments 
prior to 2 january 2005 listed investments were stated at the lower of cost 
and net realisable value from 2 january 2005 onwards these investments 
are classified as availableforsale and are measured at fair value changes in 
their fair values are recognised in a separate component of equity except to 
the extent that they represent an other than temporary impairment in which 
case the impairment loss is recognised in the income statement realised 
gains and losses are transferred from equity to the income statement in the 
event of the disposal of the investments  
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
72 
1 principal accounting policies continued  
ii derivative financial instruments 
the group uses derivative financial instruments principally foreign currency 
swaps forward foreign currency contracts and interest rate swaps to reduce 
its exposure to exchange rate and interest rate movements the group does 
not hold or issue derivatives for speculative or trading purposes prior to 
2 january 2005 such derivative contracts were not generally recognised  
as assets and liabilities on the balance sheet and gains and losses arising  
on them were not recognised until the hedged item was itself recognised  
in the financial statements  
from 2 january 2005 onwards derivative financial instruments are 
recognised as assets and liabilities measured at their fair values at the balance 
sheet date changes in their fair values are recognised in the income 
statement and this is likely to cause volatility in situations where the carrying 
value of the hedged item is either not adjusted to reflect fair value changes 
arising from the hedged risk or is so adjusted but that adjustment is not 
recognised in the income statement provided the conditions specified by 
ias 39 are met hedge accounting may be used to mitigate this volatility  
the group does not generally apply hedge accounting to transactional 
foreign currency hedging relationships such as hedges of forecast or 
committed transactions it does however apply hedge accounting to 
translational foreign currency hedging relationships and to hedges of its 
interest rate exposures where it is permissible to do so under ias 39 when 
hedge accounting is used the relevant hedging relationships are classified  
as a fair value hedge a cash flow hedge or in the case of a hedge of the 
group’s net investment in a foreign operation a net investment hedge 
where the hedging relationship is classified as a fair value hedge the 
carrying amount of the hedged asset or liability is adjusted by the increase  
or decrease in its fair value attributable to the hedged risk and the resulting 
gain or loss is recognised in the income statement where to the extent  
that the hedge is effective it offsets the change in the fair value of the 
hedging instrument 
where the hedging relationship is classified as a cash flow hedge or as a net 
investment hedge to the extent the hedge is effective changes in the fair 
value of the hedging instrument are recognised directly in equity rather than 
in the income statement when the hedged item in a cash flow hedge is 
recognised in the financial statements the accumulated gains and losses 
recognised in equity are either recycled to the income statement or if the 
hedged item results in a nonfinancial asset are recognised as adjustments to 
its initial carrying amount accumulated gains and losses recognised in equity 
in relation to a net investment hedge are recycled to the income statement 
on disposal of the foreign operation  
derivative financial instruments are classified as current assets or liabilities 
unless they qualify for hedge accounting under ias39 and the hedged item  
is classified as a noncurrent asset or liability 
iii embedded derivatives 
prior to 2 january 2005 embedded derivatives were not recognised in the 
financial statements from 2 january 2005 onwards derivatives embedded in 
nonderivative host contracts are recognised separately as derivative financial 
instruments when their risks and characteristics are not closely related to 
those of the host contract and the host contract is not stated at its fair value 
with changes in its fair value recognised in the income statement 
iv preference shares 
in july 1996 the company issued us dollar denominated 556  
convertible cumulative preference shares “the preference shares” prior  
to 2 january 2005 the preference shares were classified as nonequity 
shareholders’ funds and were translated into sterling at the exchange rate 
ruling at their date of issue dividends payable on the preference shares were 
dealt with as an appropriation of profit  
from 2 january 2005 onwards the preference shares are classified as non
current liabilities and are retranslated into sterling at the exchange rate ruling 
at the balance sheet date dividends payable on the preference shares are 
included within interest payable 
v own shares 
own shares represent the company’s ordinary shares that are held by  
the company its subsidiaries and sponsored esop trusts in relation to the 
group’s employee share schemes own shares are deducted at cost in 
arriving at shareholders’ equity and gains and losses on their sale or transfer 
are recognised directly in equity 
q postemployment benefits 
postemployment benefits comprise pension benefits provided to employees 
throughout the world and other benefits mainly healthcare provided to 
certain employees in north america 
for defined contribution plans the cost of providing the benefits represents 
the group’s contributions to the plans and is recognised in the income 
statement in the period in which the contributions fall due 
for defined benefit plans the cost of providing the benefits is determined 
based on actuarial valuations of each of the plans that are carried out 
annually at the group’s balance sheet date by independent qualified 
actuaries plan assets if any are measured at their fair values at the  
balance sheet date benefit obligations are measured using the projected  
unit credit method 
the cost of defined benefit plans recognised in the income statement 
comprises the net total of the current service cost the past service cost  
the expected return on plan assets the interest cost and the effect of 
curtailments and settlements the current service cost represents the increase 
in the present value of the plan liabilities expected to arise from employee 
service in the current period past service costs resulting from enhanced 
benefits are recognised in the income statement on a straightline basis over 
the vesting period or immediately if the benefits have vested the expected 
return on plan assets is based on market expectations at the beginning of 
the period for returns over the life of the benefit obligation the interest cost 
represents the increase in the benefit obligation due to the passage of time 
the discount rate used is determined by reference to market yields on high 
quality corporate bonds where available or government bonds at the 
balance sheet date gains and losses on curtailments or settlements are 
recognised in the income statement in the period in which the curtailment  
or settlement occurs  
actuarial gains and losses which represent differences between the expected 
and actual returns on the plan assets and the effect of changes in actuarial 
assumptions are recognised in the statement of recognised income and 
expense in the period in which they occur  
the defined benefit liability or asset recognised in the balance sheet 
comprises the net total for each plan of the present value of the benefit 
obligation at the balance sheet date minus any past service costs not yet 
recognised minus the fair value of the plan assets if any at the balance 
sheet date where a plan is in surplus the asset recognised is limited to the 
amount of any unrecognised past service costs and the present value of any 
amounts that the group expects to recover by way of refunds or a reduction 
in future contributions 
r sharebased incentives 
sharebased incentives are provided to employees under the group’s share 
option bonus and other share award schemes the group recognises a 
compensation expense in respect of these schemes that is based on the fair 
value of the awards where appropriate measured using an optionpricing 
model for equitysettled awards the fair value is determined at the date of 
grant and is not subsequently remeasured unless the conditions on which 
the award was granted are modified for cashsettled awards the fair value 
is determined at the date of grant and is remeasured at each balance sheet 
date until the liability is settled generally the compensation expense is 
recognised on a straightline basis over the vesting period adjustments are 
made to reflect expected and actual forfeitures during the vesting period due 
to failure to satisfy service conditions or nonmarket performance conditions  
in accordance with ifrs 1“firsttime adoption of ifrs” the group has not 
applied this policy to equitysettled awards that were granted on or before  
7 november 2002 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
73
group – ifrs 
1 principal accounting policies continued  
s provisions 
a provision is a liability of uncertain timing or amount and is recognised 
when the group has a present obligation as a result of a past event it is 
probable that payment will be made to settle the obligation and the payment 
can be estimated reliably 
provisions for warranty claims are recognised when the relevant products are 
sold based on historical experience of the nature frequency and average 
cost of warranty claims  
provisions for restructuring costs are recognised when a detailed formal  
plan for the restructuring has been determined and the plan has been 
communicated to the affected parties gains from the expected disposal  
of assets are not taken into account in measuring these provisions and 
provision is not made for future operating losses 
provision is made for workers’ compensation that represents the best 
estimate of the liability outstanding on claims for compensation for injuries 
sustained by employees while at work it includes estimates of a the 
remaining payout due on claims already made and b the liability for 
incidents that have occurred but as yet have not yet been reported to the 
group the group’s liability for claims already made but not fully settled  
is calculated on an actuarial basis by a third party administrator historical 
data trends are used to estimate the liability for unreported claims 
t taxation 
current tax is the amount of tax payable or recoverable in respect of the 
taxable profit or loss for the period taxable profit differs from accounting 
profit because it excludes items of income or expense recognised for 
accounting purposes that are either not taxable or deductible for tax 
purposes or are taxable or deductible in other periods current tax is 
calculated using tax rates that have been enacted or substantively enacted  
at the balance sheet date 
the group recognises provisions in respect of uncertain tax positions 
whereby additional current tax may become payable in future periods 
following the audit by the tax authorities of previously filed tax returns 
provisions for uncertain tax positions are based upon management’s 
assessment of the likely outcome of issues associated with assumed 
permanent differences interest that may be applied to temporary 
differences the possible disallowance of tax credits and penalties and  
are classified as noncurrent liabilities provisions for uncertain tax positions 
are reviewed regularly and are adjusted to reflect events such as the expiry  
of limitation periods for assessing tax administrative guidance given by the 
tax authorities and court decisions  
deferred tax is tax expected to be payable or recoverable on differences 
between the carrying amount of an asset or a liability and its tax base used  
in the computation of taxable profit deferred tax is accounted for using the 
liability method whereby deferred tax liabilities are generally recognised for 
all taxable temporary differences and deferred tax assets are recognised to 
the extent that it is probable that taxable profits will be available against 
which deductible temporary differences can be utilised  
deferred tax assets and liabilities are not recognised if the temporary 
difference arises from the initial recognition of goodwill or from the  
initial recognition of other assets and liabilities in a transaction other  
than a business combination that affects neither accounting profit nor 
taxable profit  
deferred tax is provided on temporary differences arising on investments in 
foreign subsidiaries and associates except where the group is able to control 
the reversal of the temporary difference and it is probable that the temporary 
difference will not reverse in the foreseeable future  
deferred tax is calculated using the tax rates that are expected to apply  
in the period in which the liability is settled or the asset is realised  
deferred tax assets and liabilities are offset when there is a legally 
enforceable right to set off current tax assets against current tax liabilities 
and when they relate to income taxes levied by the same taxation authority 
and the group intends to settle its current tax assets and liabilities on a  
net basis 
current and deferred tax is recognised in the income statement unless it 
relates to an item recognised directly in equity in which case it is recognised 
directly in equity 
u assets held for sale and discontinued operations  
the group applied ifrs 5 “noncurrent assets held for sale and 
discontinued operations” to assets and related liabilities that met the criteria 
to be classified as held for sale and operations that met the criteria to be 
classified as discontinued on or after 4 january 2004 
assets are classified as held for sale if their carrying amount will be recovered 
by sale rather than by continuing use in the business for this to be the case 
the asset must be available for immediate sale in its present condition 
management must be committed to and have initiated a plan to sell the 
asset which when initiated was expected to result in a completed sale 
within twelve months an extension of the period required to complete  
the sale does not preclude the asset from being classified as held for sale 
provided the delay was for reasons beyond the group’s control and 
management remains committed to its plan to sell the asset assets that are 
classified as held for sale are measured at the lower of their carrying amount 
and fair value less costs to sell 
a discontinued operation is a component of an entity that has either been 
disposed of or satisfies the criteria to be classified as held for sale and 
represents a separate major line of business or geographical area of 
operations is part of a single coordinated plan to dispose of a separate 
major line of business or geographical area of operations or is a subsidiary 
acquired exclusively with a view to disposal 
v dividends on ordinary shares 
dividends payable on ordinary shares are recognised in the financial 
statements when they have been appropriately authorised and are no longer 
at the company’s discretion accordingly interim dividends are recognised 
when they are paid and final dividends are recognised when they are 
declared following approval by shareholders at the company’s annual 
general meeting dividends on ordinary shares are recognised as an 
appropriation of shareholders’ equity 
w critical accounting estimates 
when applying the group’s accounting polices management must make 
assumptions and estimates concerning the future that affect the carrying 
amounts of assets and liabilities at the balance sheet date the disclosure  
of contingencies that existed at the balance sheet date and the amounts  
of revenue and expenses recognised during the accounting period such 
assumptions and estimates are based on factors such as historical experience 
the observance of trends in the industries in which the group operates and 
information available from the group’s customers and other outside sources  
due to the inherent uncertainty involved in making assumptions and estimates 
actual outcomes could differ from those assumptions and estimates an 
analysis of the key sources of estimation uncertainty at the balance sheet  
date that have a significant risk of causing a material adjustment to the carrying 
amounts of the group’s assets and liabilities within the next financial year is 
provided in the operating and financial review 
x accounting pronouncements not yet adopted 
in august 2005 the international accounting standards board “iasb” 
issued ifrs 7 “financial instruments disclosures” that consolidates and 
augments the disclosure requirements concerning financial instruments that 
are at present contained in several international accounting standards at the 
same time the iasb issued “amendment to ias 1 – capital disclosures” that 
introduces a requirement for entities to provide disclosures concerning what 
they regard as their capital  
until recently neither pronouncement had been endorsed for use within  
the eu and neither is mandatory until accounting periods beginning on or 
after 1 january 2007 the group will consider the early adoption of these 
pronouncements during 2006 as they deal only with disclosures the 
adoption of these pronouncements will have no effect on the group’s results 
or financial position 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
74 
2  segment information  
a background 
the group determines its reportable segments based on the structure of the internal financial reports that are used by senior management for decisionmaking 
purposes and its primary segment reporting format is by business segment 
with effect from 2 january 2005 the group was reorganised for management reporting purposes into two business groups industrial  automotive and 
building products  
industrial  automotive manufactures a wide range of systems and components for car truck and industrial equipment manufacturing markets and industrial 
and automotive aftermarkets throughout the world through five business segments power transmission fluid power wiper systems fluid systems and other 
industrial  automotive  
building products comprises two business segments air systems components and other building products air systems components supplies the industrial 
and residential heating ventilation and air conditioning market mainly in north america other building products manufactures a variety of products for the 
building and construction industries mainly in north america 
segment information about the group’s continuing operations is presented below segment information about the group’s discontinued operations is 
presented in note 8  
segment information about the group’s associates is presented in note 18 
b segment revenue and results – continuing operations 
 segment revenue  segment result 
 
year ended 
31 december 
2005 
£ million 
year ended  
1 january  
2005 
£ million  
year ended 
31 december 
2005
£ million 
year ended 
1 january 
2005
£ million 
by business segment   
industrial  automotive   
–  power transmission 9699 9137   1279 1323 
–  fluid power 3580 3237   384 329 
–  wipers 2340 2536   53 72 
–  fluid systems 2303 2280   168 215 
–  other industrial  automotive 5064 4633   567 548 
 22986 21823   2345 2487 
building products   
–  air systems components 4854 4230   573 466 
–  other building products 3984 3688   292 138 
 8838 7918   865 604 
 31824 29741   3210 3091 
by geographical origin    
united states of america 21227 19242   2452 1979 
united kingdom 1633 1771   92 23 
rest of europe 3126 3206   281 419 
rest of the world 5838 5522   569 670 
 31824 29741   3210 3091 
by geographical market   
united states of america 21917 20083   
united kingdom 766  844   
rest of europe 3537 3627   
rest of the world 5604 5187   
 31824 29741   
intersegment sales were not significant 
the aggregate segment result of continuing operations includes a net loss of £118 million arising from restructuring initiatives 2004 – net loss  
of £180 million that is analysed by segment in note 3  
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
75
group – ifrs 
2 segment information continued 
the aggregate segment result of continuing operations may be reconciled to the profit for the period as follows 
 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
 2005
£ million 
segment result 3210 3091 
gain on sale of availableforsale investments 04 – 
share of profit or loss of associates 06 08 
unallocated corporate activities 253 236
profit from operations 2967 2863 
interest payable 835 648
investment income 403 388 
other finance income 42 – 
profit before tax 2577 2603 
tax 590 511
profit for the period from continuing operations 1987 2092 
profit for the period from discontinued operations 25 09 
profit for the period 2012 2101 
c segment assets and liabilities 
 segment assets  segment liabilities 
 
as at 
31 december 
2005
£ million 
as at  
1 january  
2005 
£ million  
as at 
31 december 
2005 
£ million 
as at 
1 january 
2005
£ million 
by business segment    
industrial  automotive    
– power transmission 8566 7667   2853 2616
– fluid power 2918 2099   1265 1209
– wipers 1677 1706   104 133
– fluid systems 1600 1412   426 445
– other industrial  automotive 2430 1873   1626 1287
 17191 14757   6274 5690
building products   
– air systems components 3428 2641   832 722
– other building products 1267 1036   547 423
 21886 18434   7653 6835
by geographical location of assets    
united states of america 12679 10307    
united kingdom 1361 1541    
rest of europe 2310 2026    
rest of the world 5723 4919    
 22073 18793    
aggregate segment assets may be reconciled to consolidated total assets as follows 
 
as at 
31 december 
2005 
£ million 
as at 
1 january 
2005
£ million 
segment assets allocated to business segments 21886 18434 
unallocated corporate assets 187 359 
segment assets allocated to geographical segments 22073 18793 
investments in associates 44 37 
availableforsale investments 22 16 
cash and cash equivalents 2309 1854 
collateralised cash 53  49 
derivative financial instruments hedging translational exposures 222 40 
income tax assets 1060 1337 
consolidated total assets 25783 22126 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
76 
2 segment information continued 
aggregate segment liabilities may be reconciled to consolidated total liabilities as follows 
 
as at 
31 december 
2005 
£ million 
as at 
1 january 
2005
£ million 
segment liabilities allocated to business segments 7653 6835
unallocated corporate liabilities 379 406
segment liabilities allocated to geographical segments 8032 7241
bank overdrafts 104 65
bank and other loans 5621 4094
obligations under finance leases 123 121
derivative financial instruments hedging translational exposures 81 68
income tax liabilities 1625 2084
convertible cumulative preference shares 3068 – 
consolidated total liabilities 18654 13673
d additional segment information 
an analysis is provided below of certain changes in the carrying value of property plant and equipment and intangible assets by reportable segment 
 year ended 31 december 2005  year ended 1 january 2005 
 
 
 
additions
£ million 
depreciation 
and 
amortisation
£ million 
impairment 
recognised in 
profit or loss
£ million  
additions 
£ million 
depreciation and 
amortisation 
£ million 
impairment 
recognised in 
profit or loss
£ million 
by business segment   
industrial  automotive   
– power transmission 679 479  –  854  416 – 
– fluid power 205 131 –  230  127 – 
– wipers 66 98 53  51  117 – 
– fluid systems 157 147 –  154  142 – 
– other industrial  automotive 88 96 –  118  103 – 
 1195 951 53  1407  905 – 
building products   
– air systems components 129 140 –  79  146 – 
– other building products 109 95 –  84  102 – 
 238 235 –  163  248 – 
unallocated corporate assets – 05 –  04  04 – 
discontinued operations – – –  03  02 – 
 1433 1191 53  1577  1159 – 
by geographical location of assets   
united states of america 628 629 –  639  666 – 
united kingdom 102 114 53  118  115 – 
rest of europe 151 117 –  96  114 – 
rest of the world 552 331 –  721  262 – 
 1433 1191 53  1574  1157 – 
discontinued operations – – –  03  02 – 
 1433 1191 53  1577  1159 – 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
77
group – ifrs 
 
3  restructuring initiatives  
 
 year ended 31 december 2005  year ended 1 january 2005 
 
 
 
restructuring 
costs
£ million 
disposals and 
exit of 
businesses
£ million 
total
£ million  
restructuring  
costs 
£ million 
disposals and 
 exit of 
businesses 
£ million 
total 
£ million 
by business segment   
industrial  automotive   
–  power transmission 11 – 11 46 – 46
–  fluid power 09 08 17  12 – 12
–  wipers 161 – 161 79 – 79
–  fluid systems – – –  24 – 24
–  other industrial  automotive 24 18 42 17 94 77 
 187 10 197 178 94 84
building products   
–  air systems components 17 90 73   10 – 10
–  other building products 01 05 06  17 69 86
 16 95 79  27 69 96
 203 85 118 205 25 180
by geographical origin   
united states of america 28 113 85  147 79 226
united kingdom 135 05 130 51 06 57
rest of europe 06 09 15 02 110 108 
rest of the world 34 24 58 05 – 05
 203 85 118 205 25 180
restructuring costs recognised during 2005 primarily related to the closure of stackpole’s pcd facility the transfer of the manufacturing of the wiper systems 
facility in pontypool to more cost competitive locations and the rationalisation of production facilities at air systems components restructuring costs 
recognised during 2004 primarily related to the rationalisation of manufacturing capacity within north america and the relocation of wiper blade production 
gains and losses on the disposal and exit of businesses are analysed in note 41 
 
4  staff costs 
the monthly average number of persons employed by the group excluding the company’s nonexecutive directors was as follows 
 
year ended 
31 december 
2005 
number 
year ended 
1 january 
 2005
number 
by function 
production 29166 28629 
selling and distribution 4448 4336 
administration 3710 3755 
  37324 36720 
staff costs recognised in respect of those employees were as follows  
  
 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
 2005
£ million 
recognised in the income statement 
– wages and salaries 6804 6804 
– social security costs 750 704 
– pensions note 31  306 346 
– other postemployment benefits note 31 06 21 
– sharebased incentives note 32 77 52 
– termination benefits 48 08 
 7991 7935 
recognised directly in equity 
– pensions note 31 441 116
– other postemployment benefits note 31 03 01
 444 117
  8435 7818 
in 2005 the pension cost recognised in the income statement is stated net of a credit of £79 million arising from curtailments and settlements of certain 
pension plans which is included in profit from operations before restructuring initiatives in 2004 there was a similar credit of £70 million of which  
£78 million was credited to profit from operations before restructuring initiatives £30 million was charged to restructuring costs and £22 million was 
credited to discontinued operations 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
78 
5   interest payable 
 
 
 
year ended 
31 december 
2005
 £ million 
year ended 
1 january 
2005
 £ million 
interest on bank overdrafts and loans 260 206 
interest element of finance lease rentals 07 09 
 267 215 
dividends payable on convertible cumulative preference shares  163 – 
 430 215 
postemployment benefits 
– interest cost on benefit obligation note 31 405 433 
 835 648 
the group adopted ias 32 prospectively with effect from 2 january 2005 accordingly the basis of accounting for dividends payable on the convertible 
cumulative preference shares in 2004 has not been restated and dividends for that period of £156 million are presented as an appropriation of profit 
interest payable was wholly attributable to continuing operations 
 
6  investment income  
 
 
 
year ended 
31 december 
2005 
 £ million 
year ended
1 january  
2005
 £ million 
interest on bank deposits 41 32 
other interest receivable 16 32 
 57 64 
postemployment benefits 
– expected return on plan assets note 31 346 324 
 403 388 
investment income was wholly attributable to continuing operations 
 
7  other finance income 
 
 
 
year ended 
31 december 
2005 
 £ million 
year ended
1 january 
 2005
 £ million 
net gains on hedging instruments not qualifying for hedge accounting 
– foreign currency hedges  09 –  
– interest rate hedges 33 –  
 42 –  
other finance income represents fair value gains and losses arising on instruments held by the group to hedge its translational exposures where either  
the economic hedging relationship does not qualify for hedge accounting or to the extent that there is deemed to be ineffectiveness in a qualifying  
hedging relationship 
the group adopted ias 39 prospectively with effect from 2 january 2005 accordingly the basis of accounting for translational hedging relationships in 2004 
has not been restated 
other finance income was wholly attributable to continuing operations 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
79
group – ifrs 
 
8  discontinued operations 
the profit for the period from discontinued operations may be analysed as follows 
 
 
year ended 
31 december 
2005 
 £ million 
year ended 
1 january 
2005
 £ million 
loss for the period of discontinued operations   
sales  – 62 
cost of sales – 58
gross profit – 04 
distribution costs – 04
administrative expenses – 17
loss before tax – 17
tax – 05
loss after tax – 22
 
profit on disposal of discontinued operations 
profit before tax 34 38 
tax  09 07
profit after tax 25 31 
 
profit for the period from discontinued operations 25 09 
in 2005 discontinued operations comprised additional losses arising on the disposal of part of the group’s former professional garden and leisure businesses 
in october 2000 and additional profits arising on the disposal of the group’s former valves taps  mixers businesses in 2004 discontinued operations 
comprised the group’s former valves taps and mixers businesses all of these operations were included in the other building products business segment  
the segment revenue and result of discontinued operations may be analysed as follows  
 segment revenue  segment result 
 
year ended 
31 december 
2005
£ million 
year ended  
1 january  
2005 
£ million  
year ended 
31 december 
2005
£ million 
year ended 
1 january 
2005
£ million 
by business segment   
building products   
– other building products – 62   34 21 
by geographical origin    
united kingdom – 62   45 21 
united states – –   11 – 
 – 62   34 21 
by geographical market   
united kingdom – 62   
discontinued operations held no assets or liabilities as at 31 december 2005 and 1 january 2005 
cash flows arising from discontinued operations during the period were as follows 
 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
2005
£ million 
cash inflow from operating activities – 132 
cash inflowoutflow from investing activities 45 02
net decrease in cash and cash equivalents from discontinued operations 45 130 
 
 
 
 
 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
80 
 
9  income tax expense 
 
 
 
year ended 
31 december 
2005 
 £ million 
year ended
1 january 
2005
 £ million 
current tax 
uk corporation tax on profits for the period 13 02 
release of provision for uncertain tax positions 60 150
adjustments in respect of prior periods 03 16
total uk tax 50 164
overseas tax on profits for the period 767 538 
release of provision for uncertain tax positions 527 – 
adjustments in respect of prior periods – 23
total overseas tax 240 515 
total current tax 190 351 
deferred tax 
origination or reversal of temporary differences  442 223 
utilisation of previously unrecognised tax losses 403 38
other changes in unrecognised deferred tax assets 293 05
adjustments in respect of prior periods 77 08
total deferred tax 409 172 
income tax expense for the period  599 523 
 
continuing operations 590 511 
discontinued operations note 8 09 12 
 599 523 
during 2005 there was a release of provisions for uncertain tax positions of £587 million following the successful resolution of an outstanding tax issue in  
the united states the expiry of time during which tax audits could be performed in certain tax jurisdictions and the change of views on the likely outcome  
of challenges by various tax authorities during 2004 there was a similar release of £150 million 
under the american jobs creation act of 2004 “ajca” in the united states the group had the opportunity to benefit from a onetime repatriation of  
cash to the united states at a reduced tax rate during 2005 the group repatriated £418 million to the united states under the ajca on which it incurred  
a tax charge of £21 million 
the income tax expense for the period recognised in the income statement differs from the product of the profit before tax for the period from continuing  
and discontinued operations and the rate of uk corporation tax as follows  
 
 
year ended 
31 december 
2005 
 £ million 
year ended
1 january 
2005
 £ million 
profit before tax 
– continuing operations 2577 2603 
– discontinued operations 34 21 
 2611 2624 
 
uk corporation tax at 30 2004 – 30 on profit before tax 783 787 
permanent differences 456 12
utilisation of previously unrecognised tax losses  403 38
adjustment in respect of prior periods 74 47
release of provisions for uncertain tax positions 587 150
effect of different tax rates on overseas profits  124 05 
change in unrecognised deferred tax assets  293 05
foreign tax credits 141 17
income tax expense for the period 599 523 
in addition to the income tax expense recognised in the income statement an income tax credit of £162 million 2004 – income tax charge of £55 million 
was recognised directly in equity  
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
81
group – ifrs 
 
10 profit for the period  
profit for the period of £2012 million 2004 – £2101 million is stated after chargingcrediting  
 
 
year ended 
31 december 
2005 
 £ million 
year ended
1 january 
2005
 £ million 
inventories 
– cost of inventories  22710 20997 
– writedown of inventories 12 08 
staff costs note 4 7991 7935 
property plant and equipment note 17  
– depreciation 1167 1109 
– impairment recognised in profit from operations 53 – 
intangible assets note 16 
– amortisation 24 50 
research and development costs 467 513 
government grants 
– revenue  13 11
– capital 03 01
net foreign exchange losses 16 27 
amounts disclosed above were wholly attributable to continuing operations 
 
   
11 earnings per share 
basic earnings per share is calculated by dividing the profit for the period attributable to equity shareholders by the weighted average number of the 
company’s ordinary shares in issue during the period the weighted average number of the company’s ordinary shares in issue during the period excludes 
2888908 shares 2004 – 2949225 shares being the weighted average number of own shares held during the period  
diluted earnings per share takes into account the dilutive effect of options and awards outstanding under the group’s employee share schemes and the 
dilutive effect of the potential conversion of the company’s convertible cumulative preference shares into the company’s ordinary shares the weighted 
average number of the company’s ordinary shares used in the calculation of diluted earnings per share excludes the effect of options and awards over 
2549390 shares 2004 – 2538070 shares that were antidilutive for the periods presented but could potentially dilute earnings per share in the future 
 year ended 31 december 2005  year ended 1 january 2005 
 
profit 
attributable 
to equity 
shareholders
£ million 
weighted 
average
number of
ordinary shares 
earnings 
per share
pence  
profit 
 attributable 
to equity 
shareholders 
£ million 
weighted 
average 
number of 
ordinary shares 
earnings
 per share
pence 
continuing operations   
basic 1897 771416964 2459 p  1835  770716582 2381 p 
dilutive effect of share options and awards – 2593300 008p  –  3449582 011p 
 1897 774010264 2451 p  1835  774166164 2370 p 
dilutive effect of conversion of preference shares  163 102375159 101p  156  102650664 099p 
diluted 2060 876385423 2350 p  1991  876816828 2271 p 
   
discontinued operations   
basic 25 771416964 033 p  09  770716582 012 p 
dilutive effect of share options and awards – 2593300 001p  –  3449582 – 
 25 774010264 032 p  09  774166164 012 p 
dilutive effect of conversion of preference shares  – 102375159 003p  –  102650664 002p 
diluted 25 876385423 029 p  09  876816828 010 p 
   
continuing and discontinued operations   
basic 1922 771416964 2492 p  1844  770716582 2393 p 
dilutive effect of share options and awards – 2593300 009p  –  3449582 011p 
 1922 774010264 2483 p  1844  774166164 2382 p 
dilutive effect of conversion of preference shares  163 102375159 104p  156  102650664 101p 
diluted 2085 876385423 2379 p  2000  876816828 2281 p 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
82 
 
12 dividends on ordinary shares 
 
 
year ended 
31 december 
2005
per share 
year ended  
1 january  
2005 
per share 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
2005
£ million 
paid or proposed in respect of the period  
interim dividend  507p 483p  393 373 
proposed final dividend 816p 777p  632 600 
 1323p 1260p  1025 973 
  
recognised in the period  
final 2004 – 777p per share paid 26 may 2005  600 – 
interim 2005 – 507p per share paid 14 november 2005  394 – 
final 2003 – 740p per share paid 1 june 2004  – 572 
interim 2004 – 483p per share paid 12 november 2004  – 373 
  994 945 
the directors propose a final dividend for 2005 of 816p per share that subject to approval by shareholders will be paid on 31 may 2006 to shareholders on 
the register on 21 april 2006 
 
13 auditors’ remuneration 
fees payable to the company’s auditors deloitte  touche llp in respect of services provided during the period were as follows 
 
year ended 
31 december 
2005 
£ million 
year ended
1 january 
 2005
£ million 
audit services 
– statutory audit 23 21 
– auditrelated regulatory services  06 01 
 29 22 
further assurance services  03 06 
 32 28 
tax services  
– compliance services 03 06 
– advisory services 18 08 
 21 14 
total fees 53 42 
during 2005 the american jobs creations act of 2004 in the united states enabled the group to take advantage of a number of tax benefits after a detailed 
review and in some cases a tender process it was decided that deloitte  touche llp “deloitte” was the preferred firm to engage on a number of projects 
to ensure that the group maximised the benefits available largely because of the efficiencies that were expected to arise from the detailed knowledge deloitte 
has of the group 
audit related regulatory services include the review of the interim financial statements and the audit of the us gaap financial statements included in the  
form 20f filing with the securities and exchange commission in the us further assurance services include advice on accounting matters and nonregulatory 
reporting and include £03 million 2004 – £01 million in relation to the transition to ifrs 
fees relating to further assurance services or to tax advisory services must be reported to the audit committee and approved by the chairman of the  
audit committee 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
83
group – ifrs 
 
14 cash flow 
a reconciliation of profit for the period to cash generated from operations 
 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
2005
 £ million 
profit for the period 2012 2101 
interest payable 835 648 
investment income 403 388
other finance income 42 – 
income tax expense 599 523 
profit from continuing and discontinued operations 3001 2884 
share of profit of associates 06 08
amortisation of intangible assets 24 50 
depreciation of property plant and equipment 1167 1109 
impairment of property plant and equipment 53 – 
cost of equitysettled employee share schemes 74 44 
gainloss on sale of property plant and equipment 01 11 
gain on disposal of businesses 
– continuing operations 85 180
– discontinued operations 34 38
decrease in postemployment benefit obligations 554 263
decrease in provisions 26 73
operating cash flows before movements in working capital 3613 3536 
increase in inventories 223 343
increase in receivables 223 209
increase in payables 198 355 
cash generated from operations 3365 3339 
b reconciliation of net increase in cash and cash equivalents to movements in net debt 
  
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
2005
£ million 
net debt at the beginning of the period  2445 2647
adoption of ias 32 and ias 39 note 1c  2717 – 
  5162 2647
increasedecrease in net debt resulting from cash flows  
– increase in cash and cash equivalents  659 31 
– increasedecrease in debt and lease financing  1335 78 
– increase in collateralised cash  05 11 
  671 120 
other noncash movements  46 – 
leases obtained on acquisition  20 – 
foreign currency translation   606 82 
increasedecrease in net debt during the period  1251 202 
net debt at the end of the period  6413 2445
c analysis of net debt 
 
 
as at 
31 december 
2005 
£ million 
as at 
1 january 
2005
 £ million 
cash and cash equivalents 2309 1854 
collateralised cash 53 49 
bank overdrafts 104 65
bank and other loans 5621 4094
obligations under finance leases 123 121
derivative financial instruments hedging translational exposures  141 68
 3345 2445
convertible cumulative preference shares 3068 – 
 6413 2445
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
84 
  
15 goodwill 
 
 
 
£ million 
cost  
as at 3 january 2004 2167 
acquisition of subsidiaries 185 
foreign currency translation 89
as at 1 january 2005 2263 
acquisition of subsidiaries 597 
foreign currency translation 335 
as at 31 december 2005 3195 
the carrying amount of goodwill was allocated to the following groups of cash generating units 
 
as at 
31 december 
2005 
£ million 
as at 
1 january 
2005
£ million 
industrial  automotive 
power transmission 
– stackpole 858 746 
– mectrol 216 185 
 1074 931 
fluid power 121 06 
wipers 186 167 
other industrial  automotive 
– le technologies  295 –  
 1676 1104 
  
building products 
air systems components  
– air systems components 376 336 
– hart  cooley 851 623 
– ruskin 190 104 
– ruskin air management 49 49 
 1466 1112 
other building products 
– bathware 53 47 
 1519 1159 
 3195 2263 
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired 
the recoverable amounts of the cash generating units to which goodwill has been allocated are determined from value in use calculations in which the 
principal assumptions are those regarding discount rates growth rates and expected changes to selling prices and direct costs management uses discount 
rates that reflect current market assessments of the time value of money and the risks specific to the relevant cash generating units growth rates are based on 
industry growth forecasts changes in selling prices and direct costs are based on past practices and expectations of future changes in the market in which the 
cash generating units operate  
the group prepares cash flow forecasts derived from the most recent financial plans approved by management for the next three years and extrapolates cash 
flows for the following seven years based on estimated growth rates that do not exceed the average longterm growth rate for the relevant markets 
the rate used to discount the forecast cash flows resulting from these projections was 85 2004 – 90 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
85
group – ifrs 
 
16 other intangible assets 
 
 
development 
costs
£ million 
assets acquired  
in business 
combinations 
 £ million 
computer 
software 
£ million 
total
£ million 
cost   
as at 3 january 2004 – –  317 317 
additions – 01  31 32 
disposals – –  11 11
foreign currency translation – –  18 18
as at 1 january 2005 – 01  319 320 
additions 04 –  148 152 
acquisition of subsidiaries  – 36  – 36 
disposals – –  01 01
foreign currency translation – 02  71 73 
as at 31 december 2005 04 39  537 580 
accumulated amortisation   
as at 3 january 2004 – –  252 252 
amortisation charge for the period – –  50 50 
disposals – –  10 10
foreign currency translation – –  18 18
as at 1 january 2005 – –  274 274 
amortisation charge for the period – 02 22 24 
disposals – –  01 01
foreign currency translation – –  63 63 
as at 31 december 2005 – 02 358 360 
  
carrying amount  
as at 1 january 2005 – 01 45 46 
as at 31 december 2005 04 37  179 220 
all intangible assets included above have finite useful lives 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
86 
  
17 property plant  equipment 
 
 
land and
buildings
£ million 
plant 
equipment 
and vehicles 
£ million 
assets under 
construction 
£ million 
total
£ million 
cost   
as at 3 january 2004 3822 12730  827 17379 
additions 139 570  836 1545 
acquisition of subsidiaries 01 19  – 20 
transfers  174 637  811 – 
disposals 21 872 – 893
disposal of subsidiaries 32 845 – 877
transfer tofrom assets held for sale 369 662  – 293 
foreign currency translation 158 484 20 662
as at 1 january 2005 3556 12417  832 16805 
additions 295 925  61 1281 
acquisition of subsidiaries 77 103  – 180 
transfer from assets under construction 37 130  167 – 
disposals 89 424 01 514
disposal of subsidiaries  15 66 – 81
transfer tofrom assets held for sale 05 13  02 10 
foreign currency translation 412 1185  79 1676 
as at 31 december 2005 4268 14283  806 19357 
accumulated depreciation and impairment losses  
as at 3 january 2004 1472 8428  – 9900 
depreciation charge for the period 123 986  – 1109 
transfers 57 57  – – 
disposals 27 813 – 840
disposal of subsidiaries 15 706 – 721
transfer tofrom assets held for sale 251 584  – 333 
foreign currency translation 59 339 – 398
as at 1 january 2005 1186 8197  – 9383 
depreciation charge for the period 122 1045  – 1167 
transfers 61 61 – – 
disposals 51 400 – 451
disposal of subsidiaries 03 31 – 34
transfer from assets held for sale 13 06  – 19 
impairment loss recognised in the period 19 34  – 53 
foreign currency translation 120 783  – 903 
as at 31 december 2005 1467 9573  – 11040 
carrying amount  
as at 1 january 2005 2370 4220  832 7422 
as at 31 december 2005 2801 4710  806 8317 
land and buildings include freehold land with a carrying value of £404 million 1 january 2005 – £393 million that is not depreciated 
as at 31 december 2005 the carrying amount of plant equipment and vehicles included £114 million 1 january 2005 – £127 million in respect of assets 
held under finance leases the group’s obligations under these finance leases which are analysed in note 26 are secured by a lessor’s charge over the  
leased assets  
property plant and equipment with a carrying value of £05 million 1 january 2005 – £18 million has been pledged as security for amounts outstanding 
under secured bank loans 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
87
group – ifrs 
 
18 investments in associates 
 
 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
 2005
£ million 
carrying amount 
at the beginning of the period 37 57 
group’s share of its associates’ results for the period 
– recognised in the income statement  06 08 
– recognised directly in equity 03 04
 40 61 
disposals – 23
foreign currency translation 04 01
at the end of the period 44 37 
details of the group’s principal associates are set out on page 182 
summarised financial information in respect of the group’s associates is set out below 
 
as at 
31 december 
2005 
£ million 
 as at 
1 january 
 2005
£ million 
total assets 151 125 
total liabilities 62 52
net assets 89 73 
 
group’s share of associates’ net assets 44 37 
the segment analysis of the group’s share of associates’ profit or loss for the period and of its investments in associates is as follows 
 investments in associates  share of profit or loss of associates 
 
as at 
 31 december 
2005
£ million 
as at  
 1 january  
2005 
£ million  
year ended 
31 december 
2005 
£ million 
year ended
1 january 
 2005
£ million 
by business segment   
industrial  automotive   
– power transmission 19 16   03 02 
– fluid systems 21 18   03 01 
– other industrial  automotive 04 03   – 02 
 44 37   06 05 
building products   
– other building products – –    – 03 
 44 37   06 08 
by geographical location    
rest of the world 44 37   
 
19 inventories 
 
 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005 
£ million 
raw materials and supplies 1475 1239 
work in progress 620 453 
finished goods and goods held for resale 2352 2004 
 4447 3696 
during the period an expense of £12 million 2004 – £08 million was recognised on the writedown of certain inventories to net realisable value  
certain suppliers reserve title over the goods that they supply until they receive payment  
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
independent auditors’ report  
 
65
group – ifrs 
to the members of tomkins plc 
we have audited the consolidated financial statements of tomkins plc and its 
subsidiaries together “the group” for the year ended 31 december 2005 
“the group’s financial statements” which comprise the consolidated 
income statement consolidated cash flow statement consolidated balance 
sheet consolidated statement of recognised income and expense the 
reconciliation of changes in consolidated shareholders’ equity the related 
notes 1 to 45 and the information on pages 108 to 121 these financial 
statements have been prepared in accordance with the accounting policies 
set out therein we have also audited the information in the remuneration 
committee’s report that is described as having been audited 
we have reported separately on the individual financial statements of 
tomkins plc for the year ended 31 december 2005 
this report is made solely to the company’s members as a body in 
accordance with section 235 of the companies act 1985 our audit work 
has been undertaken so that we might state to the company’s members 
those matters we are required to state to them in an auditors’ report and  
for no other purpose 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 the 
remuneration committee report and the group financial statements  
in accordance with applicable law and international financial reporting 
standards ifrs as adopted in the european union are set out in the 
statement of directors’ responsibilities 
our responsibility is to audit the group’s financial statements and the part  
of the remuneration committee report described as having been audited in 
accordance with relevant united kingdom legal and regulatory requirements 
and international standards on auditing uk and ireland  
we report to you our opinion as to whether the group’s financial statements 
give a true and fair view in accordance with the relevant financial reporting 
framework and whether the group financial statements and the part of the 
remuneration committee report described as having been audited have 
been properly prepared in accordance with the companies act 1985 and 
article 4 of the ias regulation we report to you if in our opinion the 
directors’ report is not consistent with the group’s financial statements  
we also report to you 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 with the  
company and other members of the group is not disclosed 
we report to you if in our opinion the company has not complied with any 
of the four directors’ remuneration disclosure requirements specified for our 
review by the listing rules of the financial services authority these comprise 
the amount of each element of the remuneration package and information 
on share options details of longterm incentive schemes and money 
purchase and defined benefit pension schemes we give a statement  
to the extent possible of details of any noncompliance 
we review whether the corporate governance statement reflects the 
company’s compliance with the nine provisions of the 2003 frc 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 statement on internal control covers 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 directors’ report and the other information contained in  
the annual report for the above year as described in the contents section 
including the unaudited part of the remuneration committee report and  
we consider the implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the group’s  
financial statements  
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 group’s financial statements and the part of the 
remuneration committee report described as having been audited it also 
includes an assessment of the significant estimates and judgements made  
by the directors in the preparation of the group’s financial statements  
and of whether the accounting policies are appropriate to the 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 group’s financial 
statements and the part of the remuneration committee report described as 
having been 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 
group financial statements and the part of the remuneration committee 
report described as having been audited 
opinion 
in our opinion the group financial statements give a true and fair view  
in accordance with ifrs as adopted for use in the european union of the 
state of the group’s affairs as at 31 december 2005 and of its profit for the 
year then ended and the group financial statements and the part of the 
remuneration committee report described as having been audited have 
been properly prepared in accordance with the companies act 1985 and 
article 4 of the ias regulation  
 
 
deloitte  touche llp 
chartered accountants and registered auditors   
london 
21 february 2006 
 
 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
88 
 
20 trade and other receivables 
 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005
£ million 
current assets 
trade receivables 5070 4267  
amounts due from customers on longterm contracts note 21 45 32  
prepayments 268 210  
derivative financial instruments note 28 52 01 
other receivables 349 528  
collateralised cash 53 49  
 5837 5087 
noncurrent assets 
derivative financial instruments note 28 198 40 
the group has a significant concentration of customers in the united states of america who accounted for 689  2004 – 675 of the group’s sales 
during the period and in the industrial and automotive industry which accounted for 722 2004 – 734 of the group’s sales during the period however 
no single customer accounted for more than 10 of the group’s sales and there were no significant amounts due from any one customer trade receivables 
are stated net of an allowance of £79 million 1 january 2005 – £61 million for doubtful accounts estimated based on factors surrounding the credit risk of 
specific customers historical trends the influence of the current economic environment and other information  
trade and other receivables are not generally interest bearing although interest may be charged to customers on overdue accounts 
the group is the beneficiary of a number of corporateowned life assurance policies against which it borrows from the relevant life assurance company  
as at 31 december 2005 the surrender value of the policies was £2189 million 1 january 2005 – £1757 million and the amount outstanding on the  
related loans was £2177 million 1 january 2005 – £1748 million for accounting purposes these amounts are offset and the net receivable of £12 million  
1 january 2005 – £09 million is included in other receivables 
trade receivables with a carrying value of £26 million 1 january 2005 – £10 million have been pledged as security for amounts outstanding under  
secured bank loans 
 
21 longterm contracts 
longterm contracts are entered into by a subsidiary that is engaged in the construction of automotive assembly lines and materials handling equipment  
revenue recognised on longterm contracts during the period was £1296 million 2004 – £819 million amounts recognised in respect of longterm  
contracts in progress at the balance sheet date were as follows 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005
£ million 
costs incurred to date 1265 849 
recognised profits less recognised losses to date 106 77 
 1371 926 
progress billings to date  1361 920
net amount due from customers  10 06 
 
gross amount due from customers included in trade and other receivables 45 32 
gross amount due to customers included in trade and other payables 35 26
net amount due from customers 10 06 
 
retentions held by customers 33 06 
as at 31 december 2005 unpaid progress billings including retentions held by customers included in trade receivables amounted to £216 million  
1 january 2005 – £145 million  
as at 31 december 2005 there were no advances received from customers 1 january 2005 – £nil  
 
 
 
 
 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
89
group – ifrs 
22 availableforsale investments 
 
 £ million 
carrying amount 
as at 3 january 2004 17 
foreign currency translation 01
as at 1 january 2005 16 
adoption of ias 32  ias 39 note 1c 04 
 20 
additions 01 
fair value gain recognised directly in equity 07 
disposals 05
foreign currency translation 01
as at 31 december 2005 22 
availableforsale investments comprise listed equities 
 
23 cash and cash equivalents 
 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
 2005
£ million 
cash on hand and demand deposits  1024 646 
term deposits 1285 1208 
 2309 1854 
the currency and interest rate profile of cash and cash equivalents was as follows  
 floating interest rate   
 
 
£ million 
weighted  
average  
interest rate 
 
noninterest 
bearing 
£ million 
total 
£ million 
as at 31 december 2005  
currency  
– sterling 22 18  28 50 
– us dollar 1369 38  77 1446 
– euro 171 25  16 187 
– canadian dollar 103 31  – 103 
– other 473 35  50 523 
 2138  171 2309 
   
as at 1 january 2005  
currency  
– sterling 164 47  25 189 
– us dollar 693 21  106 799 
– euro 163 27  04 167 
– canadian dollar 247 23  20 267 
– other 389 30  43 432 
 1656  198 1854 
the group ensures that cash and cash equivalents are managed such that there is no significant concentration of credit risk in any one bank or other  
financial institution  
 
 
 
 
 
 
 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
90 
24 assets held for sale 
assets classified as held for sale and directly associated liabilities were as follows 
 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005 
£ million 
assets held for sale 
– property plant and equipment 134 298 
– deferred tax assets – 01 
– inventories – 20 
– trade and other receivables – 09 
 134 328 
 
liabilities directly associated with assets held for sale 
– trade and other payables – 03
 134 325 
assets held for sale comprise vacant properties no longer required by the group for manufacturing operations 
 
25 borrowings 
 
 as at 31 december 2005  as at 1 january 2005 
 
current 
liabilities
£ million 
noncurrent 
liabilities
£ million 
total
£ million  
current  
liabilities 
£ million 
noncurrent 
liabilities
£ million 
total
£ million 
bank overdrafts 104 – 104  65  – 65 
bank and other loans   
– bank loans – secured 31 – 31  28  – 28 
– bank loans – unsecured 223 1194 1417  44  18 62 
– other loans – unsecured 54 4116 4170  24  3977 4001 
– unsecured loan notes 03 – 03  03  – 03 
 311 5310 5621  99  3995 4094 
 415 5310 5725  164  3995 4159 
borrowings are repayable as follows 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005 
£ million 
current liabilities 
– on demand or within one year 415 164 
noncurrent liabilities 
– in the second year 08 09 
– in the third year 05 09 
– in the fourth year 05 – 
– in the fifth year 1206 – 
– after more than five years 4086 3977 
 5310 3995 
 5725 4159 
bank loans 
bank loans are principally amounts drawn down under the group’s £400 million multicurrency revolving credit facility as at 31 december 2005  
£1199 million 1 january 2005 – £ nil had been drawn down including tranches denominated in us dollars totalling 1750 million borrowings  
under the facility attract interest at floating rates determined by reference to libor 
other loans 
the group has a euro medium term note programme under which it may borrow up to a total maximum principal amount of £750 million so far two bonds 
have been issued under this programme £150 million repayable at par on 20 december 2011 that bears interest at a fixed rate of 8 and £250 million 
repayable at par on 16 september 2015 that bears interest at a fixed rate of 6125  
 
 
 
 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
91
group – ifrs 
25 borrowings continued 
the carrying amount of other loans may be analysed as follows 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005
£ million 
principal amount  4000 4000 
accrued interest payable 49 26 
unamortised transaction costs 22 25
carrying amount before hedge accounting 4027 4001 
fair value hedge adjustment note 28 143 – 
carrying amount 4170 4001 
unsecured loan notes 
the unsecured loan notes must be repaid at par on 30 june 2012 until that time in certain circumstances the noteholders have the right to require full or 
part repayment at par half yearly on 30 june and 31 december and for this reason they are classified as current liabilities the unsecured loan notes bear 
interest at a fixed rate of 26  
currency and interest rate profile 
the currency and interest rate profile of outstanding borrowings after taking into account the effect of the group’s currency and interest rate hedging 
activities was as follows 
 floating interest rate  fixed interest rate  
 £ million 
weighted 
average 
interest rate
  £ million 
weighted  
average  
interest rate 
 
weighted average 
period for which 
rate is fixed
years 
total
£ million 
as at 31 december 2005   
currency  
– sterling 179 62 – –  – 179 
– us dollar 2664 46 1223 31  34 3887 
– euro 563 25 – –  – 563 
– canadian dollar 764 35 – –  – 764 
– other 314 56 18 41  18 332 
 4484 1241  5725 
   
as at 1 january 2005  
currency  
– sterling 364 65 – –  – 364 
– us dollar 1241 24 1093 31  34 2334 
– euro 395 21 – –  – 395 
– canadian dollar 819 26 – –  – 819 
– other 229 38 18 68  20 247 
 3048 1111  4159 
borrowing facilities 
as at 31 december 2005 the group had undrawn committed borrowing facilities of £2801 million 1 january 2005 – £400 million available under the multi
currency revolving credit facility that expires on 8 august 2010 
borrowing covenants 
the group is subject to covenants representations and warranties commonly associated with investment grade borrowings in respect of its committed 
borrowing facilities and borrowings under the euro medium term note programme  
the group is subject to two financial covenants in respect of its committed borrowing facilities the ratio of net debt to consolidated earnings before interest 
tax depreciation and amortisation must not exceed 25 times and the ratio of consolidated operating profit to the consolidated net interest charge must not 
be less than 30 times the financial covenants are calculated by applying “frozen” uk gaap as at 31 december 2002 and are therefore unaffected by 
accounting changes associated with the transition to ifrs  
 
 
 
 
 
 
 
 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
92 
26 obligations under finance leases 
 
 minimum lease payments  carrying amount 
 
as at
31 december 
2005
£ million 
as at 
1 january 
 2005 
£ million  
as at 
31 december 
2005 
£ million 
as at
1 january 
2005
£ million 
amounts payable under finance leases   
– within one year 27  41   24 34 
– in the second to fifth years inclusive  76  66    55 48 
– after more than five years  63 49    44 39  
 166 156   123 121 
less future finance charges 43 35  – – 
 123 121   123 121 
   
obligations included within current liabilities   24 34 
obligations included within noncurrent liabilities   99 87 
   123 121 
the group leases certain of its plant equipment and vehicles under finance leases all leases are on a fixed repayment basis and no arrangements have been 
entered into for contingent rental payments as at 31 december 2005 the average effective interest rate was 73 1 january 2005 – 72  
the group’s obligations under finance leases are secured by the lessors’ title to the leased assets 
 
27 trade and other payables 
 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005
£ million 
current liabilities 
trade payables 2689 2310 
amounts due to customers on longterm contracts note 21 35 26 
other taxes and social security 170 149 
accruals and deferred income 1277 1032 
accrued dividend on preference shares note 39 21 19 
derivative financial instruments note 28 09 – 
other payables 222 288 
 4423 3824 
noncurrent liabilities 
accruals and deferred income 18 32 
derivative financial instruments note 28 81 68 
other payables 54 23 
 153 123 
trade and other payables are not generally interest bearing but interest may be charged by suppliers on overdue accounts 
 
28 derivative financial instruments 
a risk management policies  
the group’s policy in relation to financial risk management is set out in detail in the operating and financial review 
the group’s central treasury function is responsible for the procurement of the group’s capital resources and for the maintenance of an efficient capital 
structure together with the management of the group’s liquidity foreign exchange and interest rate exposures all treasury operations are conducted within 
strict policies and guidelines that are approved by the board compliance with those polices and guidelines is monitored by the regular reporting of treasury 
activities to the board a key element of the group’s treasury philosophy is that funding interest rate and currency decisions and the location of cash and debt 
balances are determined independently of each other the group’s borrowing requirements are met by raising funds in the most favourable markets and the 
desired currency profile of net debt is achieved by entering into currency derivative contracts typically forward currency contracts and currency swaps the 
desired interest rate profile of net debt is achieved by entering into interest rate derivative contracts after taking into account any foreign currency derivatives 
that have been entered into to manage the currency profile of net debt from time to time the group also enters into currency derivative contracts to manage 
currency transaction exposures  
the group does not hold or issue derivatives for speculative or trading purposes  
the group ensures that its portfolio of derivative financial instruments is managed such that there is no significant concentration of credit risk in any one bank 
or other financial institution  
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
93
group – ifrs 
28 derivative financial instruments continued 
the carrying amount of derivative financial instruments held by the group was as follows 
 as at 31 december 2005  as at 1 january 2005 
 
assets
£ million 
liabilities
£ million 
net
£ million  
assets 
£ million 
liabilities 
£ million 
net
£ million 
translational hedges     
– currency forwards  01 81 80 –  68 68
– interest rate swaps 221 – 221  40  – 40 
 222 81 141  40  68 28
transactional hedges  
– currency forwards and swaps 28 09 19 01  – 01 
 250 90 160  41  68 27
classified as   
– current 52 09 43  01  – 01 
– noncurrent 198 81 117  40  68 28
 250 90 160  41  68 27
the group adopted ias 32 and ias 39 prospectively from 2 january 2005 accordingly comparative information as at 1 january 2005 has not been restated  
b currency derivatives 
as at 31 december 2005 the notional principal amount of outstanding foreign exchange contracts that are used to manage the currency profile of the 
group’s net assets was £4112 million 1 january 2005 – £3689 million during 2005 the group designated all such contracts as net investment hedges  
and a net fair value loss of £356 million in relation to these contracts was recognised directly in reserves 
also during 2005 the group designated the us dollar denominated convertible cumulative preference shares and us dollar denominated borrowings under 
the multicurrency revolving credit facility as net investment hedges and a net currency translation loss of £370 million arising on these instruments was 
recognised directly in reserves  
during 2005 a net gain of £09 million was recognised within other finance income in respect of currency translation hedges that did not qualify for hedge 
accounting under ias 39 also during 2005 a net fair value gain of £04 million was recognised within profit from operations in respect of currency derivatives 
that were held to provide an economic hedge of transactional currency exposures but were not designated as hedges for accounting purposes 
c interest rate swaps 
interest rate swaps are used to swap borrowings under the group’s euro medium term note programme from fixed interest rates to floating interest rates  
as at 31 december 2005 the nominal value of the contracts outstanding was £400 million 1 january 2005 – £400 million these contracts have been 
designated and are effective as fair value hedges in relation to the borrowings as at 31 december 2005 an adjustment of £143 million was made to the 
carrying amount of the hedged borrowings to reflect the extent to which the swaps provided an effective hedge against fair value interest rate risk 
interest rate swaps are also used to restrict the amount of floating rate us dollar debt as at 31 december 2005 the nominal value of these contracts held was 
us420 million 1 january 2005 – us 210 million including contracts with a nominal value of us210 million that commence on the maturity of equivalent 
contracts that are currently in force in june 2006 and june 2008  
during 2005 a net gain of £33 million was recognised within other finance income that represented changes in the fair value of interest rate swaps that did 
not qualify for hedge accounting under ias 39  
the profile of interest rate swaps held by the group was as follows 
   interest rate 
   payable  receivable  
 notional
principal amount 
million  variable fixed  variable fixed variable rate index 
as at 31 december 2005   
maturity date   
– december 2011 £1500 72 – –  80  6 month libor 
– september 2015 £2500 57 – –  61  3 month libor 
– june 2006 us1450 – 28 45  –  3 month libor 
– june 2008 us650 – 38 45  –  3 month libor 
– december 2007 commences june 2006 us1450 – 42 –  –  3 month libor 
– december 2009 commences june 2008 us650 – 46 –  –  3 month libor 
  
as at 1 january 2005   
maturity date   
– december 2011 £1500 75 – –  80  6 month libor 
– september 2015 £2500 60 – –  61  3 month libor 
– june 2006 us1450 – 28 25  –  3 month libor 
– june 2008 us650 – 38 25  –  3 month libor 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
94 
29 currency risk 
a transaction exposures 
gains and losses arising on the translation of monetary assets and liabilities denominated in currencies other than the functional currency of the entity 
concerned are recognised in the entity’s income statement and flow through to the consolidated income statement currency transaction exposures were  
as follows  
 net foreign currency monetary assetsliabilities  
 
sterling
£ million 
us dollar
£ million 
euro
£ million 
canadian dollar 
£ million 
other 
£ million 
total
£ million 
as at 31 december 2005  
functional currency of entity  
– sterling  – 05 57 –  07 55 
– us dollar – – 03 –  13 16
– euro 03 26 – 02 01 32
– canadian dollar 05 34 01 –  02 42
– other 19 57 02 07 – 85
 27 112 51 09 23 120
       
as at 1 january 2005       
functional currency of entity       
– sterling  – 07 63 –  06 76 
– us dollar – – – –  01 01 
– euro 01 02 – 01 02 06
– canadian dollar 08 08 22 –  64 70 
– other 11 05 08 01 – 25
 20 08 77 02 69 116 
currency exposures shown above take into account the effect of the group’s transaction hedging activities and exclude net longterm borrowings from other 
members of the group on which currency translation gains and losses are transferred to equity on consolidation 
b translation exposures 
gains and losses arising from the translation of the net assets of foreign operations into sterling on consolidation are recognised in equity currency translation 
exposures were as follows  
   
net assets 
liabilities  
excluding net 
debtfunds 
£ million 
net 
 debtfunds 
£ million 
net 
assets
£ million 
as at 31 december 2005  
currency  
– sterling 591  77 514 
– us dollar 7246   5424 1822 
– euro 1325   425 900 
– canadian dollar 2326   675 1651 
– other 2054  188 2242 
 13542  6413 7129 
  
as at 1 january 2005  
currency  
– sterling 359  140 219 
– us dollar 5661   1642 4019 
– euro 1184   259 925 
– canadian dollar 1900  585 1315 
– other  1794  181 1975 
 10898  2445 8453 
currency exposures shown above take into account the effect of the group’s translation hedging activities  
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
95
group – ifrs 
 
30 fair value of financial assets and liabilities 
fair value information is provided below in respect of financial assets and liabilities that comprise the group’s reported net debt and other financial assets and 
liabilities whose carrying amount is not considered to approximate to fair value  
as at 31 december 2005  as at 1 january 2005 
 
carrying 
amount
£ million 
fair value 
£ million  
carrying 
amount 
£ million 
fair value
£ million 
availableforsale investments 22 22   16 20 
cash and cash equivalents 2309 2309   1854 1854 
collateralised cash 53 53   49 49 
borrowings classified as current liabilities 415 415  164 164
borrowings classified as noncurrent liabilities 5310 5435  3995 4303
finance lease obligations 123 123  121 121
derivative financial instruments   
– interest rate derivatives 221 221   40 100 
– foreign currency derivatives 61 61  67 52
convertible cumulative preference shares 3068 3135  3372 2506
availableforsale investments held by the group are listed investments and their fair value represents their quoted market value 
cash and cash equivalents and collateralised cash largely attract floating interest rates accordingly their carrying amounts are considered to approximate to 
fair value  
borrowings classified as current liabilities mainly comprise overdrafts and loans that attract floating interest rates accordingly their carrying amount is 
considered to approximate to fair value 
borrowings classified as noncurrent liabilities principally comprise borrowings under the group’s multicurrency revolving credit facility that attract floating 
interest rates whose carrying amount is considered to approximate to fair value and the listed bonds issued under the group’s euro medium term note 
programme whose fair values represent their quoted market prices  
finance lease obligations attract fixed interest rates that are implicit in the lease rentals and their fair value has been assessed by reference to prevailing market 
interest rates 
interest rate derivatives are valued by discounting the applicable cash flows at prevailing market interest rates 
foreign currency derivatives are valued on a mark to market basis by reference to prevailing currency exchange rates 
the convertible cumulative preference shares are not traded in an organised market and their fair value has been assessed using a valuation model that takes 
into account prevailing market interest rates and the existence of the holders’ conversion option  
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
96 
 
31 postemployment benefit obligations 
a background 
the group operates pension plans throughout the world covering the majority of its employees the plans are structured to accord with local conditions and 
practices in each country and include defined contribution plans and defined benefit plans  
the group provides defined contribution pension benefits in most of the countries in which it operates in particular the majority of group’s employees  
in the united states of america are entitled to such benefits the expense recognised in the income statement in respect of these plans represents the 
contributions payable by the group for the period at rates that are specified in the rules of the plans as at 31 december 2005 the group had not paid over  
to the plans contributions due amounting to £74 million 1 january 2005 – £ 56 million all amounts due for the period were paid over subsequent to the 
balance sheet date  
the group operates defined benefit pension plans in several countries in particular in the united kingdom and the united states of america generally the 
pension benefits provided under these plans are based upon pensionable salary and the period of service of the individual employees the assets of the plans 
are held separately from those of the group in funds that are under the control of trustees the defined benefit pension plans operated by the group are 
closed to new entrants in addition to the funded defined benefit pension plans the group has unfunded defined benefit obligations to certain employees  
the group also provides other postemployment benefits principally health and life insurance cover to certain of its employees in north america these plans 
which are unfunded are defined benefit plans  
b summary of financial effect 
an analysis of the effect of postemployment benefits on the group’s results and financial position is set out below the group has adopted the amendments 
to ias 19 “employee benefits” published in december 2004  
 year ended 31 december 2005  year ended 1 january 2005 
 
profit from 
operations 
£ million 
finance 
charges 
£ million 
total 
£ million  
profit from 
operations 
£ million 
finance 
charges 
£ million 
profit from 
discontinued 
operations 
£ million 
total 
£ million 
   
defined contribution plans 267 – 267  263 –  – 263 
   
defined benefit plans   
recognised in the income statement   
– current service cost 65 – 65  65 –  – 65 
– past service cost 04 – 04 16 –  – 16
– settlement and curtailments 75 – 75 32 –  22 54
– interest cost – 405 405  – 433  – 433 
– expected return on plan assets – 346 346 – 324 – 324
 14 59 45  17 109  22 104 
recognised in equity   
– actuarial gains and losses 441   116
– effect of the asset ceiling 03   01
 489   13
as at 31 december 2005 the cumulative amount of actuarial losses recognised in equity since 3 january 2004 was £325 million 1 january 2005 – gain of 
£116 million 
the net liability recognised in the group’s balance sheet in respect of defined benefit plans was as follows 
 as at 31 december 2005  as at 1 january 2005 
 
pensions
£ million 
other benefits
£ million 
total
£ million  
pensions 
£ million 
other benefits 
£ million 
total
£ million 
present value of the benefit obligation    
– funded 6820 – 6820  5799  – 5799 
– unfunded 268 1127 1395  255  1112 1367 
 7088 1127 8215  6054  1112 7166 
fair value of plan assets 5271 – 5271 4417 – 4417
 1817 1127 2944  1637  1112 2749 
effect of the asset ceiling 19 – 19  16  – 16 
net liability  1836 1127 2963  1653  1112 2765 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
97
group – ifrs 
31 postemployment benefit obligations continued  
c pensions 
the principal assumptions used in the actuarial valuations of the defined benefit pension plans operated by the group were as follows 
 united kingdom united states of america other countries 
valuation as at 31 december 2005  
– salary increases 400 300 – 592  200 – 400 
– increase to pensions in payment 250 – 280 na  na 
– increase to deferred pensions 250 – 280 na  na 
– longterm rate of return on plan assets 450 – 675 800  490 – 750 
– discount rate 475 550  200 – 625 
– inflation rate 250 – 280 000  000 – 200 
valuation as at 1 january 2005  
– salary increases 400 300 – 592  200 – 400 
– increase to pensions in payment 250 – 280 na  na 
– increase to deferred pensions 250 – 280 na  na 
– longterm rate of return on plan assets 530 – 725 800  027 – 750 
– discount rate 525 5875  200 – 650 
– inflation rate 250 – 280 000  000 – 450 
the current life expectancies underlying the value of the accrued liabilities for the main plans operated by the group were as follows 
 united kingdom united states of america other countries 
as at 31 december 2005  
– current pensioners at age 65 – male 191 years 168 years  184 years 
– current pensioners at age 65 – female 220 years 213 years  214 years 
– future pensioners at age 65 – male 204 years 168 years  168 years 
– future pensioners at age 65 – female 233 years 213 years  214 years 
as at 1 january 2005    
– current pensioners at age 65 – male 170 years 167 years  184 years 
– current pensioners at age 65 – female 206 years 213 years  214 years 
– future pensioners at age 65 – male 179 years 167 years  184 years 
– future pensioners at age 65 – female 214 years 213 years  214 years 
the net liability recognised in the group’s balance sheet in respect of defined benefit pension plans was as follows 
 as at 31 december 2005  as at 1 january 2005 
 
united 
kingdom 
£ million 
united 
states of
america
£ million 
other
 countries
£ million 
total
£ million  
united 
kingdom
£ million 
united 
 states of 
america 
£ million 
other
countries
£ million 
total
£ million 
present value of benefit obligation          
– funded 2400 3666 754 6820  2046  3155  598 5799 
– unfunded 34 220 14 268  27  217  11 255 
 2434 3886 768 7088  2073  3372  609 6054 
fair value of plan assets 2127 2665 479 5271 1871 2175 371 4417
 307 1221 289 1817  202  1197  238 1637 
effect of the asset ceiling 19 – – 19  14  02  – 16 
net liability  326 1221 289 1836  216  1199  238 1653 
changes in the present value of the defined benefit obligation were as follows 
 year ended 31 december 2005  year ended 1 january 2005 
 
united 
kingdom 
£ million 
united 
states of
america
£ million 
other
 countries
£ million 
total
£ million  
united 
kingdom
£ million 
united  
states of 
america 
£ million 
other
 countries
£ million 
total
£ million 
at the beginning of the period 2073 3372 609 6054  2029  3526  679 6234 
current service cost 12 25 24 61  14  25  21 60 
past service cost – 02 01 03  –  49  09 40 
curtailments  – 01 – 01 22 –  – 22
settlements 05 18 – 23 33 –  48 81
interest cost 106 201 33 340  106  207  34 347 
actuarial gains and losses 341 194 75 610  89  72  08 169 
 2527 3775 742 7044  2183  3879  685 6747 
disposal of subsidiaries – – – –  –  –  14 14
employees’ contributions 01 – 03 04  01  –  04 05 
benefits paid 94 283 30 407 111 269 59 439
foreign currency translation – 394 53 447  –  238 07 245
at the end of the period 2434 3886 768 7088  2073  3372  609 6054 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
98 
31 postemployment benefit obligations continued  
changes in the fair value of plan assets were as follows 
 year ended 31 december 2005  year ended 1 january 2005 
 
 
 
united 
kingdom 
£ million 
united 
states of
america
£ million 
other
 countries
£ million 
total
£ million 
 
united 
kingdom 
£ million 
united  
states of 
america 
£ million 
other
 countries
£ million 
total
£ million 
at the beginning of the period 1871 2175 371 4417  1860  2230  367 4457 
expected return on plan assets 130 190 26 346  132  170  22 324 
settlements 05 – – 05 63 –  – 63
actuarial gains and losses 176 37 12 151  14 72  11 47 
 2172 2328 409 4909  1915  2472  378 4765 
employer’s contributions 48 347 50 445  66  124  50 240 
employees’ contributions 01 – 03 04  01  –  04 05 
benefits paid  94 283 30 407 111 269 59 439
foreign currency translation – 273 47 320  –  152 02 154
at the end of the period 2127 2665 479 5271  1871  2175  371 4417 
the fair value of plan assets by asset category was as follows 
 as at 31 december 2005  as at 1 january 2005 
 
united 
kingdom 
£ million 
united 
states of
america
£ million 
other
countries
£ million 
total
£ million  
united 
kingdom
£ million 
united states 
of america 
£ million 
other
 countries
£ million 
total
£ million 
equity instruments 1217 1615 225 3057  1039  1449  198 2686 
debt instruments 910 880 181 1971  820  595  113 1528 
other assets – 170 73 243  12  131  60 203 
 2127 2665 479 5271  1871  2175  371 4417 
plan assets do not include any of the group’s own financial instruments nor any property occupied by or other assets used by the group  
the return and risk expectations for each asset class incorporate assumptions about historical return relationships current financial market conditions and the 
degree of global capital market integration the assumptions used have been derived from rigorous historical performance analysis combined with forward 
looking views of the financial markets as revealed through a the yield on longterm bonds and b the price earnings ratios of the major stock market indices 
the actuaries review analyses of historical risk and the correlation of the return on asset classes and apply subjective judgment based on their knowledge of the 
groups plans the result of this analysis is incorporated into a risk matrix from which expected longterm risk premiums for each asset class are developed the 
nominal return expectations are determined by combining the asset class risk premiums with expected inflation and real riskfree rate assumptions as a final 
consideration the nominal return assumptions are blended with current market conditions to develop longterm equilibrium expectations 
the actual return on plan assets was as follows 
year ended 
31 december 
2005 
year ended 
1 january 
 2005  
united kingdom 1658 804 
united states of america 666 1161 
other countries 1060 1224 
the group expects to contribute approximately £40 million to defined benefit pension plans in 2006 
the effect of providing pension benefits on the group’s results was as follows 
 year ended 31 december 2005  year ended 1 january 2005 
 
profit from 
operations 
£ million 
finance 
charges 
£ million 
total 
£ million  
profit from 
operations 
£ million 
finance 
charges 
£ million 
profit from 
discontinued 
operations 
£ million 
total 
£ million 
   
defined contribution plans 267 – 267  263 –  – 263 
   
defined benefit plans   
recognised in the income statement   
– current service cost 61 – 61  60 –  – 60 
– past service cost 03 – 03  40 –  – 40 
– settlement and curtailments 19 – 19 18 –  22 40
– interest cost – 340 340  – 347  – 347 
– expected return on plan assets – 346 346 – 324 – 324
 45 06 39  82 23  22 83 
recognised in equity   
– actuarial gains and losses 459   122 
– effect of the asset ceiling 03   01
 501   204 
as at 31 december 2005 the cumulative amount of actuarial losses recognised in equity since 3 january 2004 was £581 million 1 january 2005 –  
£122 million 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
99
group – ifrs 
31 postemployment benefit obligations continued  
d other postemployment benefits 
the principal assumptions used in the actuarial valuations of the other postemployment benefit plans operated by the group were as follows 
valuation as at 31 december 2005 
– discount rate 544 
– medical cost inflation rate  868 
 
valuation as at 1 january 2005 
– discount rate 600 
– medical cost inflation rate  974 
the group’s other postretirement benefit plans are unfunded accordingly the liability recognised in the group’s balance sheet in respect of these plans 
represents the present value of the benefit obligation 
changes in the present value of the benefit obligation were as follows 
 
year ended 
31 december 
2005 
£ million 
year ended
1 january 
2005
£ million 
at the beginning of the period 1112 1526 
current service cost 04 05 
past service cost 07 56
curtailments – 14
settlements 56 – 
interest cost 65 86 
actuarial gains and losses 18 238
 1100 1309 
benefits paid 103 105
foreign currency translation 130 92
at the end of the period 1127 1112 
the effect of providing other postemployment benefits on the group’s results was as follows 
 year ended 31 december 2005  year ended 1 january 2005 
 
profit from 
operations
£ million 
finance
charges
£ million 
total
£ million  
profit from 
operations 
£ million 
finance 
charges 
£ million 
total
£ million 
recognised in the income statement        
– current service cost 04 – 04  05  – 05 
– past service cost 07 – 07 56 – 56
– settlement and curtailments 56 – 56 14 – 14
– interest cost – 65 65  –  86 86 
 59 65 06  65 86 21 
recognised in equity    
– actuarial gains and losses 18  238
 12  217
as at 31 december 2005 the cumulative amount of actuarial gains recognised in equity since 3 january 2004 was £256 million 1 january 2005 –  
£238 million 
sensitivity to change in the assumed medical cost inflation rate used in the actuarial valuations as at 31 december 2005 is as follows 
 
 
increase of one 
percentage point 
£ million 
decrease of one 
percentage point
£ million 
effect on the aggregate of the current service cost and the interest cost 06 06
effect on the accumulated benefit obligation  94 91
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
100 
 
32 sharebased incentives 
a background 
the company operates a number of sharebased compensation arrangements to provide incentives to the group’s senior management and other eligible 
employees details of the schemes in respect of which options and awards are outstanding are set out in the remuneration committee report on  
pages 50 to 55 
b share options 
following a review by the board in 2004 it was decided that the company’s executive share option schemes would not be renewed when they lapsed for  
the purposes of new grants in may 2005 accordingly no new options were granted under these schemes during 2005 options will continue to be granted 
from time to time under the company’s savingsrelated share option scheme which is restricted to employees who are resident for tax purposes in the  
united kingdom  
options granted under the company’s share option schemes are classified as equitysettled awards the compensation expense recognised during the period  
in respect of share options was £39 million 2004 – £19 million  
changes in the total number of share options outstanding during the period were as follows 
 year ended 31 december 2005  year ended 1 january 2005 
 
options
number 
weighted 
average  
exercise price 
pence  
options 
number 
weighted 
average
 exercise price
pence 
outstanding at the beginning of the period 30333766 23649   25273442 23430 
granted during the period 419297 21840   6853762 23886 
forfeited during the period 1197190 21480   1143977 21960 
exercised during the period 175884 23996   627524 19133 
expired during the period 950857 32880   21937 19224 
outstanding at the end of the period 28429132 23403   30333766 23649 
     
exercisable at the end of the period 5079142 25035    4374594 26515 
on the dates on which options were exercised during 2005 the weighted average market price of the company’s ordinary shares was 27604p per share 
2004 – 26869p per share  
the compensation expense recognised in respect of share options is based on their fair value at the grant date calculated using the blackscholes option  
pricing model  
assumptions made in calculating the fair values of options granted during the period were as follows 
 
 
year ended 
31 december 
2005 
year ended
1 january
2005 
options granted  419297  6853762  
weighted average fair value 8724p 7018p 
 
weighted average assumptions 
– share price  27300p 25033p 
– exercise price 21840p 23905p 
– expected volatility 3046 3150 
– expected life 525 years 583 years 
– risk free interest rate 384 451 
– expected dividends 1260p 1200p 
expected volatility was determined based on the historical volatility of the market price of the company’s ordinary shares over the period since may 2001 
when following a period of significant demerger activity the group was refocused on its remaining core businesses adjustments have been made to the 
expected life used in the model to reflect the effects of nontransferability exercise restrictions and behavioural considerations 
the weighted average contractual life of share options outstanding at the end of the period was as follows 
 as at 31 december 2005  as at 1 january 2005 
 
outstanding
number 
weighted 
average 
remaining 
contractual life 
years  
outstanding 
number 
weighted 
 average 
 remaining
contractual life
years 
range of exercise prices      
– 150p to 200p  6165914 578   6264914 674 
– 201p to 250p 15073768 706   15547875 795 
– 251p to 300p  6171222 749   6171222 849  
– 301p and higher 1018228 610   1970728 373 
 28429132   29954739  
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
101
group – ifrs 
32 sharebased incentives continued 
c other equitysettled awards 
the group’s principal sharebased compensation arrangement is the annual bonus incentive plan “abip” which is restricted to the group’s senior 
management and provides an award of bonus shares and deferred shares based on the profit of the business for which the participants have responsibility  
during the period awards were made over 1415047 ordinary shares 2004 – 1310424 ordinary shares under the abip also during the period matching 
awards were made over 11320 ordinary shares 2004 – 11369 ordinary shares under the share matching scheme “sms” which is a legacy scheme that  
is closed to new entrants  
the fair value of awards made under these schemes is measured based on the market price of the company’s ordinary shares on the date of the award  
where the awards do not attract dividends during the vesting period the market price is reduced by the present value of the dividends expected to be paid 
during the expected life of the awards the weighted average fair value of awards made during the period was 25708p 2004 – 25214p  
awards made under these schemes are classified as equitysettled awards the compensation expense recognised during the period was £35 million  
2004 – £25 million  
d cashsettled awards 
the deferred matching share purchase plan was introduced for james nicol as part of the incentive package to attract him to the company under this plan 
3045684 ordinary shares “matching shares” were awarded on 11 february 2002 following the purchase by mr nicol of 1015228 ordinary shares after 
three years from 18 february 2002 or earlier in certain circumstances the award was to vest in respect of 1015228 matching shares and the remaining 
2030456 matching shares were to vest to the extent that for every 1 penny the highest market price of the company’s ordinary shares sustained over a  
fiveday period during the sixmonth period ended 18 february 2005 exceeded 197 pence being the market price on 18 february 2002 mr nicol was entitled 
to receive 5153 shares in the event the market price achieved under the terms of the plan was 28525 pence and of the 2030456 matching shares 
454752 vested and the balance lapsed 
under the terms of his contract mr nicol was entitled to elect to receive a cash payment in lieu of shares and for this reason this plan was classified as a cash
settled transaction in the event mr nicol elected to receive cash and was paid £4193000 subject to statutory deductions in settlement on 28 february 2005  
as at 1 january 2005 the group recognised a liability of £36 million during the period the group recognised a compensation expense of £06 million  
2004 – £13 million  
 
 
33 deferred tax 
movements in the net deferred tax assets and liabilities recognised by the group were as follows 
 
postemployment 
benefit 
obligations 
£ million 
tax losses
£ million 
accrued 
expenses
£ million 
longlived assets
£ million 
inventories 
£ million 
other items
£ million 
total
£ million 
as at 3 january 2004 1174  110 217 551 100 227 1077 
chargecredit to the income statement 163 31 44 53 148 117 172
credit directly to equity  53 – – – –  02 55
disposal of subsidiaries 08 – 03 01 03 03 16
currency translation differences 85 01 14 37 11  15 67
as at 1 january 2005 865  140 244 566 240 324 767 
adoption of ias 32  ias 39 note 1c –  – – – –  26 26
 865  140 244 566 240 298 741 
acquisition of subsidiaries –  – – 13 –  – 13
chargecredit to the income statement 126 16 04 37 10 248 409
credit directly to equity 145  – – – –  03 148 
currency translation differences 96  07 28 77 32 30 52 
as at 31 december 2005 980  163 268 693 282 83 519 
deferred tax assets and liabilities presented in the group’s balance sheet are as follows  
 
as at
31 december 
2005
£ million 
as at
1 january 
 2005
£ million 
deferred tax assets 1019 1194 
deferred tax liabilities 500 427
 519 767 
as at 31 december 2005 the group had operating tax losses amounting to £12021 million of which £11581 million can be carried forward indefinitely and 
£440 million have expiry dates between 2006 and 2019 as at 31 december 2005 the group recognised a deferred tax asset of £153 million in respect of 
these losses 
as at 31 december 2005 the group had capital tax losses amounting to £2863 million of which £2857 million can be carried forward indefinitely and  
£06 million expire in 2009 as at 31 december 2005 the group recognised a deferred tax asset of £10 million in respect of these losses 
as at 31 december 2005 the undistributed earnings of foreign subsidiaries amounted to £19489 million 1 january 2005 – £14838 million no income 
taxes have been provided on the companys share of these undistributed earnings due to managements ability and intent to reinvest such amounts 
indefinitely a determination of the amount of the unrecognised deferred tax liability has not been made because it is not practical to do so  
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
102 
34 provisions  
 
 
restructuring costs
£ million 
disposal 
and exit 
of businesses
£ million 
 
 
environmental 
remediation 
£ million 
workers 
compensation 
£ million 
other 
£ million 
 total 
£ million 
as at 1 january 2005 108 39 56 184  207 594 
charge for the period 51 –  11 76  60 198 
reversal of provision for disposal of business – 40 –  –  – 40
acquisition of subsidiaries – – –  –  03 03 
utilised during the period 59 – 10 63 77 209
foreign currency translation 07 01 05 22  14 49 
as at 31 december 2005  107 – 62 219   207 595 
 
provisions are presented in the group’s balance sheet as follows 
as at 
31 december 
2005 
£ million 
as at
1 january 
2005
£ million 
current liabilities 413 402 
noncurrent liabilities 182 192 
 595 594 
other provisions comprise warranty provisions of £62 million 1 january 2005 – £56 million product liability provisions of £72 million 1 january 2005 –  
£73 million and insurance provisions of £73 million 1 january 2005 – £78 million 
 
35 ordinary shares  
 
 year ended 31 december 2005  year ended 1 january 2005 
 
number 
of shares £ million  
number 
 of shares £ million 
ordinary shares of 5p each      
authorised      
at the beginning and end of the period 1585164220 792   1585164220 792 
 
 
number 
of shares 
share 
capital 
£ million 
share 
premium 
account 
£ million 
total 
£ million 
allotted and fully paid  
as at 3 january 2004 773262360 387  928 1315 
shares issued  627524 –  12 12 
as at 1 january 2005  773889884 387  940 1327 
shares issued 605240 –  18 18 
as at 31 december 2005 774495124 387  958 1345 
during the period 175884 ordinary shares 2004 – 627524 ordinary shares were allotted pursuant to options exercised under employee share option 
schemes for total consideration of £04 million 2004 – £12 million in addition 429356 ordinary shares were issued on conversion of 43947 convertible 
cumulative preference shares at a total value of £14 million no convertible cumulative preference shares were converted during 2004 
 
36 own shares 
 
 year ended 31 december 2005  year ended 1 january 2005 
 
number 
of shares £ million  
number 
 of shares £ million 
at the beginning of the period 3500040 89   2628859 64 
own shares purchased 860338 24   1583482 41 
sale or transfer of own shares 1129976 26  712301 16
at the end of the period 3230402 87   3500040 89 
own shares represent the cost of the company’s ordinary shares acquired to meet the group’s expected obligations under the employee share schemes 
described in the remuneration committee report on pages 50 to 55 dividends relating to own shares held have been waived with the exception of those that 
are payable to participants in the relevant schemes 
as at 31 december 2005 1571599 ordinary shares 1 january 2005 – 2264407 ordinary shares were held in trust and 1658803 ordinary shares 
1 january 2005 – 1235638 ordinary shares were held as treasury shares 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
103
group – ifrs 
37 other reserves 
 
 
capital 
redemption 
reserve
£ million 
currency 
translation 
reserve
£ million 
available 
forsale  
reserve 
£ million 
retained 
profit
losses
£ million 
total 
£ million 
as at 3 january 2004  4619 – –  1906 2713 
profit for the period attributable to equity shareholders – – –  1844 1844 
net incomeexpense recognised directly in equity  
– postemployment benefits  
 actuarial gains – – –  118 118 
 effect of the asset ceiling – – –  01 01 
– currency translation differences on foreign operations – 285 –  – 285
– tax on items recognised directly in equity – – –  56 56
transfers from equity to the income statement  
– cumulative currency translation differences on the disposal of foreign operations – 09 –  – 09 
total recognised income and expense attributable to equity shareholders – 276 –  1907 1631 
loss on sale or transfer of own shares – – –  16 16
cost of equitysettled sharebased incentives – – –  44 44 
dividends paid on ordinary shares – – –  945 945
as at 1 january 2005  4619 276 –  916 3427 
adoption of ias 32  ias 39 note 1c – – 01 630 631 
 4619 276 01 286 4058 
profit for the period attributable to equity shareholders – – –  1922 1922 
net incomeexpense recognised directly in equity  
– fair value gain on availableforsale investments – – 04 – 04 
– postemployment benefits –  
 actuarial losses – – –  441 441
 effect of the asset ceiling – – –  03 03
– currency translation differences on foreign operations – 1327  –  –  1327 
– fair value loss on net investment hedges – 726 –  – 726
– tax on items recognised directly in equity – – 03 168 165 
transfers from equity to the income statement  
– fair value gains realised on the sale of availableforsale investments  – – 02 – 02
total recognised income and expense attributable to equity shareholders – 601 01 1646 2246 
profit on sale or transfer of own shares – – –  03  03 
cost of equitysettled sharebased incentives – – –  74 74 
dividends paid on ordinary shares – – –  994 994
as at 31 december 2005  4619 325 –   443 5387 
 
 
38 minority interests 
 
 
year ended 
31 december 
2005 
£ million 
year ended
1 january 
2005
£ million 
at the beginning of the period 416 310 
total recognised income and expense attributable to minority interests 127 94 
shares issued by a subsidiary to minority shareholders  – 39 
dividends paid to minority equity shareholders  59 27
at the end of the period 484 416 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
104 
 
39 convertible cumulative preference shares 
 
 year ended 31 december 2005  year ended 1 january 2005 
 
number of 
shares 
nominal value 
us million  
number of 
shares 
nominal value 
us million 
convertible cumulative preference shares of us50 each   
authorised   
at the beginning and end of the period 13920000 6960   13920000 6960 
 
  carrying amount 
 
number 
of shares 
nominal 
 value 
£ million 
accrued 
dividend 
 payable 
£ million 
total 
£ million 
allotted and fully paid  
as at 3 january 2004 10506721 3372 – 3372 
  
as at 1 january 2005 10506721 3372 – 3372 
adoption of ias 32  ias 39 note 1c – 636 19 617
 10506721 2736  19 2755 
shares converted 43947 14 – 14
foreign currency translation  – 325  02 327 
as at 31 december 2005 10462774 3047  21 3068 
the convertible cumulative preference shares “the preference shares” were issued on terms that they could be converted at any time at the shareholder’s 
option into fully paid ordinary shares of 5p each in the company on the basis of 977 ordinary shares for every one preference share so converted at the date 
of issue the conversion terms of the preference shares were equivalent to a price of 334p per ordinary share  
the company has the option at any time when the total amount of the preference shares issued and outstanding is less than 10 of the amount originally 
issued and in any event on or after 29 july 2006 to redeem in the first case all but not some only and in the second case all or any of the preference shares 
which remain issued and outstanding at that time  
until such time as the preference shares are converted or redeemed the holders of the preference shares have a right to receive dividends at an annual rate of 
5560 per cent in preference to the holders of the company’s ordinary shares as at 31 december 2005 the carrying value of the preference shares included 
an accrued dividend payable of £21 million 1 january 2005 – £nil 
the holders of the preference shares are entitled to vote at a general meeting of the company where on a show of hands each holder will have one vote and 
on a poll each holder will have one vote in respect of every seven fully paid ordinary shares to which the holder would be entitled on the full exercise of his 
conversion rights except if two or more consecutive quarterly dividends are in arrears whereupon on a poll each holder shall have one vote in respect of every 
fully paid ordinary share to which the holder would be entitled on the full exercise of his conversion rights and such voting rights would continue until such 
time as any arrears of dividends have been paid in full 
on a return of assets on liquidation or otherwise other than on redemption or repurchase of the preference shares the assets of the company available to 
shareholders will be applied first in repaying the capital paid up or credited as paid up in respect of the preference shares together with all arrears and accruals 
of dividends to the holders of the preference shares and any other classes of shares ranking pari passu as to capital with the preference shares 
 
 
40 acquisitions 
industrial  automotive 
on 18 march 2005 the group acquired le technologies a recreational vehicle frame manufacturer for cash consideration including costs of 800 million 
£418 million goodwill of £264 million arising on the acquisition was capitalised which reflects that the acquisition provides the group with an extended 
product range enables dexter axle company inc to preintegrate its axles to vehicle frames and gives the opportunity for a number of synergies  
in addition to goodwill an intangible asset of £24 million has been recognised for customer relationships 
on 1 july 2005 the group acquired eifeler maschinenbau gmbh “emb” a manufacturer of highperformance hydraulic tube fittings adapters and 
accessories for cash consideration including costs of €365 million £246 million provisional goodwill of £111 million arising on the acquisition was 
capitalised which is attributable to the value of emb’s assembled workforce and its well established distribution network within europe and asia in addition 
there is opportunity for significant synergies from the sale of the group’s existing products through emb’s distribution network and from the ability to offer  
a broader range of product to the group’s existing customer base  
during 2005 additional goodwill of £08 million was recognised on the acquisition of certain businesses of mectrol corporation in december 2004 
building products 
on 27 january 2005 the group acquired milcor inc a multibrand manufacturer of building products for cash consideration including costs of 429 million 
£228 million goodwill of £141 million arising on the acquisition was capitalised which reflects the value of the enhancement of the group’s position in the 
residential grilles registers and diffusers market as a result of the acquisition the strengthening of the group’s ability to secure sales representation in several 
key markets and the provision of growth opportunities in the commercial products portion of the market in addition the acquisition provides immediate 
access to a chinese manufacturing source and an opportunity for significant synergies 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
105
group – ifrs 
40 acquisitions continued 
on 23 september 2005 the group acquired nrg industries inc a multi brand manufacturer of commercial building accessories for cash consideration 
including costs of 251 million £141 million provisional goodwill of £71 million arising on the acquisition was capitalised which reflects that the acquisition 
gave the group access to fully developed products that could be marketed more broadly through ruskin company and air systems components channels  
in addition the acquisition increased our presence in significant markets as well as providing opportunity for a number of manufacturing synergies 
the businesses acquired during the period contributed £900 million to the group’s revenue and £104 million to the group’s profit for the period during  
the period between their respective dates of acquisition and the balance sheet date  
in the event that these companies had been acquired on 2 january 2005 it is estimated that they would have contributed £1293 million to the group’s 
revenue for the period but it is not practicable to estimate what their contribution to the group’s profit for the period would have been on this assumption 
because balance sheets of these companies as at 2 january 2005 prepared in accordance with ifrs are not available 
the net assets acquired in acquisitions recognised during the period and the goodwill arising were as follows 
 as at the date of acquisition 
 
acquiree’s 
 carrying amount  
in accordance  
with ifrs 
£ million 
fair value 
adjustments 
£ million 
 fair value 
£ million 
net assets acquired    
– intangible assets 42  06 36 
– property plant and equipment 193  13 180 
– deferred tax assets 08 05 13
– inventories 173  02 171 
– trade and other receivables 159  16 143 
– cash and cash equivalents 15  02 17 
– trade and other payables  164  63  101
 410  23 433 
    
goodwill  597 
consideration including transaction costs  1030 
the net cash outflow on acquisitions during the period was as follows 
 £ million 
consideration paid on current period acquisitions 1033 
adjustment to cash consideration paid on prior period acquisition 03
cash and cash equivalents acquired 17
 1013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
106 
41 disposals 
industrial  automotive 
on 2 january 2005 unified industries inc was sold for 10 million £05 million resulting in a loss of £11 million which was fully provided for in 2004 
on 9 february 2005 the business and assets of the airsprings division were sold for a net consideration of 79 million £42 million of which 50 million 
£26 million is deferred this resulted in a loss of £39 million of which £29 million was provided for in 2004 
on 4 july 2005 the business and assets of the north american curved hose business was sold for a net cash consideration of 106 million £61 million 
resulting in a gain on disposal of £08 million 
building products 
on 16 september 2005 the business and assets of gutter helmet part of the hart  cooley residential construction business was sold for 204 million 
£113 million resulting in a gain of £90 million 
also during 2005 the group recognised a net gain of £31 million on the receipt of additional consideration in relation to businesses sold in previous years  
the net assets of businesses sold during the period and the gain arising were as follows 
  £ million 
consideration 
– cash 293 
– deferred consideration 24 
 317 
net assets disposed of 
– property plant and equipment 112
– inventories 40
– trade and other receivables 92
– trade and other payables 06  
 238
utilisation of provision 40  
gain on disposal 119  
 
attributable to 
– continuing operations 85 
– discontinued operations 34 
gain on disposal 119 
the net cash inflow on disposals during the period was as follows 
 £ million 
consideration received on current period disposals 189 
adjustment to cash consideration received on prior period disposal 03
deferred consideration received on prior period disposal 107 
 293 
 
 
42 contingencies 
the group is from time to time party to legal proceedings and claims which arise in the ordinary course of business the directors do not anticipate  
that the outcome of any current proceedings or known claims either individually or in aggregate will have a material adverse effect upon the group’s  
financial position 
 
   
43 operating leases 
the group rents certain office premises and plant equipment and vehicles under operating lease arrangements all leases are on a fixed repayment basis  
and no arrangements have been entered into for contingent rental payments during the period the group recognised as an expense operating lease rentals 
amounting to £207 million 2004 – £215 million  
as at 31 december 2005 the group had outstanding commitments under noncancellable operating leases amounting to £1245 million  
1 january 2005 – £985 million falling due as follows 
 
as at 
31 december 
2005 
£ million 
as at
1 january 
 2005
£ million 
payments to be made 
– within one year 208 163 
– in the second to fifth years inclusive 564 433 
– after more than five years 473 389 
 1245 985 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with ifrs 
notes to the financial statements continued 
107
group – ifrs 
44 capital commitments 
as at 31 december 2005 the group had entered into contractual commitments for the purchase of property plant and equipment amounting to £371 million 
1 january 2005 – £ 369 million 
 
     
45 related party transactions 
transactions between the company and its subsidiaries which are related parties of the company have been eliminated on consolidation and therefore are 
not required to be disclosed in these financial statements details of transactions between the group and other related parties are disclosed below 
postemployment benefit plans 
during the period the group paid employer’s contributions amounting to £699 million 2004 – £501 million in total to defined benefit and defined 
contribution pension plans established for the benefit of its employees as at 31 december 2005 an amount of £74 million 1 january 2005 – £56 million  
in respect of employer’s contributions due was included in trade payables in addition during the period the group paid benefits of £103 million 2004 – 
£105 million to other post employment benefit plans 
compensation of key management personnel 
for the purposes of these disclosures the group regards its key management personnel as the directors of the company together with those persons who  
in accordance with the listing rules of the london stock exchange are regarded as discharging management responsibility compensation paid or payable  
to key management personnel in respect of their services to the group was as follows 
 
 
year ended 
31 december 
2005 
£’000 
year ended 
1 january 
2005 
£’000 
shortterm employee benefits   
– salaries and fees 3549 3374 
– bonus cash 2686 2549 
– benefitsinkind 161 634 
– social security contributions 1030 495 
 7426 7052 
sharebased incentives 
– bonus shares 665 593 
– deferred shares 1330 1186 
– longterm incentive plans 4193 – 
– notional gains on the exercise of share options 17 3 
 6205 1782 
pension contributions 978 942 
 14609 9776 
details of directors’ remuneration are presented in the remuneration committee report on pages 50 to 55 
other related party transactions 
during the period the group purchased aviation services under an agreement with igc llc and gforce aviation llc igc llc was wholly owned by  
mr c c gates until his death on 28 august 2005 when ownership passed to the gates family as disclosed in the directors’ report mr gates had and gates 
family members have an interest in the company’s convertible cumulative preference shares the agreement was entered into on an arm’s length basis and 
the services provided are used strictly for corporate travel to the group’s diverse locations within north america and only if there is no lower cost alternative 
available to the group’s employees the agreement permits the group to purchase an unlimited number of aircraft flying hours at the rate of us1950 per 
flying hour plus us1300 per day crew plus us1800 per month to cover insurance costs during the period the group recognised an expense of 
us147870 2004 – us145705 in respect of these services as at 31 december 2005 an amount of us 2100 1 january 2005 – us1700 due to igc 
llc was included in trade payables 
there are no further transactions or proposed transactions with related parties that are material to the group or to a related party 
tomkins plc annual report 2005  firsttime adoption of ifrs 
explanation of transition to ifrs  
 
tomkins plc annual report 2005 
108 
a adoption of ifrs 
the group adopted international financial reporting standards “ifrs”  
with a transition date of 4 january 2004  
accordingly the group’s consolidated balance sheets as at 3 january 2004 
and 1 january 2005 and its consolidated income statement and consolidated 
cash flow statement for the year ended 1 january 2005 that were previously 
reported in accordance with united kingdom generally accepted accounting 
principles “uk gaap” have been restated in accordance with ifrs on the 
basis of group’s accounting policies determined in accordance with ifrs that 
are described on pages 70 to 73  
as a general rule the group applied those accounting policies fully 
retrospectively to determine its restated financial position as at  
3 january 2004 and 1 january 2005 and its results and cash flows for the 
year ended 1 january 2005 however as described below the group used 
certain exemptions from the principle of full retrospective application 
permitted by ifrs 1 “firsttime adoption of ifrs” 
b exemptions from retrospective application of ifrs 
i  goodwill 
the group elected not to apply ifrs 3 “business combinations” to business 
combinations that were recognised on or before 3 january 2004 as a result 
the carrying amount of goodwill recognised as an asset under uk gaap was 
brought forward unadjusted as the cost of goodwill recognised under ifrs  
as at 3 january 2004 and goodwill that was writtenoff directly to reserves 
under uk gaap is not taken into account in determining the gain or loss  
on the disposal of acquired businesses on or after 4 january 2004 
ii sharebased incentives 
the group applied ifrs 2 “sharebased payment” retrospectively to all 
awards that were outstanding but had not vested as at 1 january 2005 
except those equitysettled awards that were granted on or before  
7 november 2002  
iii cumulative translation differences 
the group elected to deem the cumulative currency translation differences 
on its net investment in foreign operations to be £nil as at 3 january 2004 
accordingly the gain or loss recognised on the disposal of a foreign 
operation does not include currency translation differences that arose before 
4 january 2004 
iv financial instruments 
the group elected to apply ias 32 “financial instruments disclosure and 
presentation” and ias 39 “financial instruments recognition and 
measurement” prospectively from 2 january 2005 accordingly previously 
reported amounts as at 3 january 2004 and 1 january 2005 and for the year 
ended 1 january 2005 have not been restated to reflect the adoption of 
these accounting standards 
c summary of adjustments between uk gaap and ifrs 
a detailed analysis of the adjustments that were made to the comparative 
financial information is presented on pages 110 to 121 which shows the 
effect of differences between the group’s accounting policies determined 
under uk gaap and those determined under ifrs separately from the effect 
of presentational differences between uk gaap and ifrs  
in summary the effect of adopting ifrs on the group’s reported results and 
financial position was as follows 
 note d 
year ended  
1 january  
2005 
£ million 
profit after tax under uk gaap 1809 
adjustments 
– goodwill i  256 
– sharebased incentives iii 08
– postemployment benefits iv 163 
– future operating losses v 10
– cumulative translation differences vi 09
– deferred tax viii 15
deferred tax on ifrs adjustments 85
profit for the period under ifrs 2101 
 
 
 
 
 
note d 
as at
1 january  
2005 
£ million 
as at
3 january  
2004 
£ million 
equity shareholders’ funds under 
uk gaap 
 
4484 4068 
adjustments  
– goodwill i 122 – 
– sharebased incentives iii 15 12
– postemployment benefits iv 1015 1370
– future operating losses v – 11 
– proposed dividend vii 600 572 
– deferred tax viii 115 136 
deferred tax on ifrs adjustments  369 536 
minority interest in ifrs 
adjustments 
 
05 23 
shareholders’ equity under ifrs  4665 3964 
reported cash flows were unaffected by the adoption of ifrs but the cash 
flow statement for the year ended 1 january 2005 contained in the group’s 
consolidated financial statements prepared in accordance with ifrs has been 
represented in the format specified by ias 7 “cash flow statements” 
d significant differences between accounting principles 
i goodwill 
under uk gaap capitalised goodwill was amortised over its useful economic 
life under ifrs this goodwill is no longer amortised but is tested at least 
annually for impairment the impairment tests carried out by the group in 
accordance with ifrs as at 3 january 2004 and as at 1 january 2005 
identified no impairment loss 
goodwill amortisation charged under uk gaap during 2004 was 
£125 million and this amount is credited back to the income statement 
under ifrs 
under uk gaap the group recognised goodwill of £186 million on  
the acquisition of certain businesses of the mectrol corporation in 2004 
under ifrs the group recognised goodwill of £185 million and allocated  
£01 million to identifiable intangible assets  
in summary the adjustments to the carrying amount of goodwill as at  
1 january 2005 were as follows 
 £ million 
carrying amount under uk gaap  2142 
adjustments 
– reversal of amortisation 125 
– allocation to acquired intangible assets 01
– currency translation differences 03
carrying amount under ifrs  2263 
under uk gaap goodwill writtenoff directly to reserves was recycled to  
the income statement on the disposal or impairment of a previously acquired 
business under ifrs this goodwill is not recycled accordingly goodwill  
of £131 million recycled to the income statement under uk gaap on the 
disposal of mayfran corporation during 2004 has been reversed under ifrs  
ii computer software 
under uk gaap all capitalised computer software was included within 
tangible fixed assets under ifrs capitalised computer software must be 
presented as an intangible asset if it is not integral to an item of property 
plant and equipment as at 1 january 2005 nonintegral computer software 
with a carrying amount of £45 million 3 january 2004 – £65 million was 
transferred from property plant and equipment to intangible assets 
iii sharebased incentives 
under uk gaap the cost of awards made under the group’s employee 
share schemes was based on the intrinsic value of the awards with the 
exception of saye schemes for which no cost was recognised under  
ifrs the cost of all employee share schemes is based on the fair value  
of the awards  
as a result the cost of employee share schemes recognised during 2004 
increased by £08 million under ifrs as at 1 january 2005 an additional  firsttime adoption of ifrs 
explanation of transition to ifrs continued 
109 
group – ifrs 
liability of £15 million 3 january 2004 – £12 million was recognised  
in respect of cashsettled awards  
iv postemployment benefits 
under uk gaap the cost of providing defined benefit pensions and  
postretirement healthcare benefits was recognised on a systematic basis  
and surpluses and deficits arising were spread over the expected average 
remaining service lives of participating employees  
under ifrs the cost of benefits accruing under defined benefit plans  
is recognised over the expected average remaining service lives of the 
participating employees but the total cost recognised in each period is 
dependent on the change during the period in the recognised defined 
benefit liability or asset  
under uk gaap the cost of defined benefit plans was charged in arriving  
at operating profit under ifrs the service cost the past service cost and the 
effect of settlements and curtailments are included in profit from operations 
the expected return on plan assets and the interest cost on the defined 
benefit obligation are included within net finance costs and actuarial gains 
and losses and the effect of the asset ceiling are recognised in the statement 
of recognised income and expense  
as shown below the total cost of defined benefit plans recognised under 
ifrs during 2004 was £280 million lower than that recognised under  
uk gaap  
 year ended 1 january 2005 
 
uk gaap 
presented in 
ifrs format 
£ million 
adjustment 
£million 
restated  
under ifrs 
£ million 
recognised in the income statement  
–  continuing operations  
 charge to profit from operations  282  250 32 
 charge to net finance costs –  109 109 
 282  141141 
– discontinued operations –  22 22
 282  163119 
recognised directly in equity  
– actuarial gains and losses –  116 116
– effect of the asset ceiling –  01 01
total cost of defined benefit plans 282  280 02 
during 2004 the charge to profit from operations under ifrs included a net 
credit of £48 million arising from settlements and curtailments and 
adjustments to past service costs  
shareholders’ equity as at 1 january 2005 was reduced by £1015 million  
3 january 2004 – £1370 million due to the recognition of the net defined 
benefit liability under ifrs  
accounting for defined contribution plans is unchanged under ifrs 
v future operating losses 
under uk gaap the group provided for the expected future operating 
losses of operations that are to be sold or terminated under ifrs it is not 
permissible to provide for future operating losses accordingly the provision 
for operating losses recognised under uk gaap as at 3 january 2004 was 
reversed under ifrs and operating losses of £10 million incurred during 
2004 that were set against the provision established under uk gaap were 
charged to the income statement under ifrs 
vi cumulative translation differences 
under uk gaap currency translation differences arising on the group’s net 
investment in foreign operations were recognised in reserves and were not 
recycled to the income statement in the event of the disposal of a foreign 
operation under ifrs cumulative currency translation differences arising on 
or after 4 january 2004 are recognised as a separate component of equity 
and are taken into account in calculating the gain or loss on the disposal  
of a foreign operation during 2004 cumulative currency translation losses 
of £09 million were taken into account in calculating the net gain on 
disposal of businesses recognised under ifrs 
vii proposed dividends 
under uk gaap proposed dividends on ordinary shares were recognised as 
a liability in the period to which they related under ifrs interim dividends 
are not recognised until they are paid and final dividends are not recognised 
until they are declared following approval by shareholders at the company’s 
annual general meeting shareholders’ equity as at 1 january 2005 was 
increased by £600 million 3 january 2004 – £572 million due to the 
reversal under ifrs of the liability for the proposed final dividend for the 
relevant period that was recognised under uk gaap 
viii deferred tax 
under uk gaap deferred tax was provided on timing differences  
between the accounting and taxable profit an income statement approach 
under ifrs deferred tax is provided on temporary differences between  
the book carrying value and tax base of assets and liabilities a balance  
sheet approach  
while the difference in the approach to determining taxable differences  
did not give rise to a significant adjustment an adjustment was necessary in 
relation to the differing bases for recognising deferred tax assets under uk 
gaap a deferred tax asset was recognised where it was more likely than not 
that there were suitable taxable profits from which the future reversal of the 
underlying timing difference could be deducted and for this purpose the 
group considered only the future periods for which forecasts are prepared 
under ifrs the look forward period is not limited to the period for which 
forecasts are prepared as a result additional deferred tax assets amounting 
to £115 million were recognised as at 1 january 2005 3 january 2004 – 
£136 million 
as at 1 january 2005 additional deferred tax assets of £633 million  
3 january 2004 – £540 million and deferred tax liabilities of £264 million  
3 january 2004 – £04 million were recognised on the adjustments between 
uk gaap and ifrs 
e presentational changes 
the restated financial information on pages 110 to 121 is presented in 
accordance with ias 1 “presentation of financial statements” and ifrs 5 
“noncurrent assets held for sale and discontinued operations”  
a number of presentational changes have been made compared with  
uk gaap including the following that affect the group’s reported profit 
from operations 
• the results of discontinued operations are shown as a single line item 
below profit after tax 
• items that were treated as nonoperating exceptional items under uk 
gaap and relate to continuing operations are included in arriving at profit 
from operations and 
• the results after interest and tax of associates are shown as a single line 
item in arriving at profit from operations 
the group applied ifrs 5 to assets and related liabilities that met the criteria 
to be classified as held for sale and operations that met the criteria to be 
classified as discontinued on or after 4 january 2004 
discontinued operations identified under ifrs as at 1 january 2005 
corresponded with those identified under uk gaap and comprised the 
group’s former valves taps  mixers businesses 
f use of estimates 
on transition to ifrs estimates that had been made under uk gaap  
as at 3 january 2004 and 1 january 2005 and were also required under  
ifrs were not revised where estimates were required under ifrs that  
were not required under uk gaap they were based on information  
known at the relevant balance sheet date and did not take into account 
subsequent events 
tomkins plc annual report 2005  firsttime adoption of ifrs 
consolidated income statement for the year ended 1 january 2005 
reconciliation of uk gaap to ifrs 
110 
 
uk gaap
presented in
ifrs format
£ million 
goodwill 
£ million 
sharebased
incentives
£ million 
continuing operations  
sales  29741 –  – 
cost of sales 21202 –  – 
gross profit 8539 –  – 
distribution costs 3335 –  – 
administrative expenses 2559 125  08
share of results of associates 08 –  – 
 2653 125  08
restructuring costs 175 –  – 
loss on disposal of business 166 131  – 
provision for loss on disposal of businesses 41 –  – 
costs on exit of business 183 –  – 
reversal of provision for loss on exit of business 296 –  – 
profit from operations 2384 256  08
interest payable 215 –  – 
investment income 64  –  – 
profit before tax 2233 256  08
tax on profit on ordinary activities 418 28 02 
profit for the year from continuing operations 1815 228  06
  
discontinued operations  
lossprofit for the year from discontinued operations 06 –  – 
profit for the year 1809 228  06
minority interests 83 –  – 
dividends payable on convertible cumulative preference shares 156 –  – 
profit for the year attributable to equity shareholders 1570 228  06
  
earnings per share  
basic  
continuing operations 2045 p 
discontinued operations 008p 
total operations 2037 p 
diluted  
continuing operations 1974 p 
discontinued operations 007p 
total operations 1967 p 
 
 
tomkins plc annual report 2005   111
group – ifrs 
 
postemployment 
benefits 
£ million 
future
operating
losses
£ million 
cumulative
translation
differences
£ million 
deferred
tax
£ million 
restated 
under ifrs
£ million 
  
–  –  – – 29741 
–  –  – – 21202
–  –  – – 8539 
–  –  – – 3335
280  07 – – 2169
–  –  – – 08 
280  07 – – 3043 
30 –  – – 205
–  –  09 – 44
–  –  – – 41
–  –  – – 183
–  03 – – 293 
250  10 09 – 2863 
433 –  – – 648
324  –  – – 388 
141  10 09 – 2603 
55 03  – 15 511
86  07 09 15 2092 
  
  
15  –  – – 09 
101  07 09 15 2101 
18 –  – – 101
–  –  – – 156
83  07 09 15 1844 
  
  
  
  2381p
  012p
  2393p
  
  2271p
  010p
  2281p
tomkins plc annual report 2005  firsttime adoption of ifrs 
consolidated income statement for the year ended 1 january 2005  
presentation of uk gaap amounts in ifrs format 
112 
uk gaap amounts in uk gaap format 
previously
reported under
uk gaap
£ million 
discontinued 
operations 
£ million 
operating
exceptional items
£ million 
  
turnover 29803 62 – 
cost of sales 21249 47  – 
gross profit 8554 15 – 
distribution costs 3339 04  – 
administrative expenses 2744 10  175 
share of profits of associates 10 –  – 
operating profit including associates 2481 01 175 
 –  175
loss on disposal of businesses 897 731  – 
reversal of provision for loss on disposal of business 729 729 – 
provision for loss on disposal 41 –  – 
costs on exit of business 183 –  – 
reversal of provision for loss on exit of business 296 –  – 
profit before interest 2385 01  – 
net interest payable 151 –  – 
 –  – 
profit on ordinary activities before tax 2234 01  – 
tax on profit on ordinary activities 425 05  – 
profit on ordinary activities after tax 1809 06  – 
  
  
 06 – 
 1809 –  – 
minority interests 83 –  – 
profit attributable to shareholders 1726 –  – 
dividends on equity and nonequity shares 1129 –  – 
retained profit 597 –  – 
 
tomkins plc annual report 2005   
113
group – ifrs 
 
associates 
£ million 
gross up interest 
£ million 
transfer ordinary  
dividend to equity 
£ million 
uk gaap
presented in
ifrs format
£ million 
 
uk gaap amounts in ifrs format 
   continuing operations 
–  – –  29741  sales  
–  – –  21202 cost of sales 
–  – –  8539  gross profit 
–  – –  3335 distribution costs 
–  – –  2559 administrative expenses 
02 – –  08  share of results of associates 
02 – –  2653   
–  – –  175 restructuring costs 
–  – –  166 loss on disposal of business 
–  – –    
–  – –  41 provision for loss on disposal 
–  – –  183 costs on exit of business 
–  – –  296  reversal of provision for loss on exit of business 
02 – –  2384  profit from operations 
–  64 –  215 interest payable 
–  64 –  64  investment income 
02 – –  2233  profit before tax 
02  – –  418 tax on profit on ordinary activities 
–  – –  1815  profit for the year from continuing operations 
    
   discontinued operations 
–  – –  06 loss for the year from discontinued operations 
–  – –  1809  profit for the year 
–  – –  83 minority interests 
–  – –  1726   
–  – 973  156 dividends on convertible cumulative preference shares 
–  – 973  1570  profit for the year attributable to equity shareholders 
tomkins plc annual report 2005  firsttime adoption of ifrs 
consolidated balance sheet as at 1 january 2005  
reconciliation of uk gaap to ifrs 
114 
 
uk gaap 
 presented in  
ifrs format
£ million 
goodwill
£ million 
computer  
software 
£ million 
sharebased  
incentives
£ million 
noncurrent assets  
goodwill 2142 121 –  – 
other intangible assets – 01 45  – 
property plant and equipment 7467 – 45 – 
investments in associates 37 – –  – 
trade and other receivables 40 – –  – 
deferred tax assets 447 – –  06 
 10133 122 –  06 
current assets  
inventories 3696 – –  – 
trade and other receivables 5087 – –  – 
income tax recoverable 143 – –  – 
availableforsale investments  16 – –  – 
cash and cash equivalents 1854 – –  – 
 10796 – –  – 
assets held for sale 328 – –  – 
total assets 21257 122 –  06 
current liabilities  
bank overdrafts  65 – –  – 
bank and other loans  99 – –  – 
obligations under finance leases  34 – –  – 
trade and other payables 4409 – –  15
income tax liabilities 116 – –  – 
provisions 402– –  – 
 5125 – –  15
noncurrent liabilities  
bank and other loans 3995 – –  – 
obligations under finance leases  87 – –  – 
trade and other payables 123 – –  – 
postemployment benefit obligations 1750 – –  – 
deferred tax liabilities 164 26 –  02
income tax liabilities 1541 – –  – 
provisions 192– –  – 
 7852 26 –  02
liabilities directly associated with assets held for sale 03 – –  – 
total liabilities 12980 26 –  17
net assets 8277 96 –  11
equity   
capital and reserves  
ordinary share capital 387 – –  – 
share premium account 940 – –  – 
own shares 89 – –  – 
capital redemption reserve 4619 – –  – 
currency translation reserve – 01 –  – 
retained losses 1373 97 –  11
shareholders’ equity 4484 96 –  11
minority interests 421 – –  – 
total equity 4905 96 –  11
convertible cumulative preference shares 3372 – –  – 
 8277 96 –  11
 
 
tomkins plc annual report 2005   
115
group – ifrs 
 
postemployment  
benefits 
£ million 
proposed 
 dividend
£ million 
cumulative 
translation  
differences
£ million 
deferred tax
£ million 
restated  
under ifrs
£ million 
  
–  –  – – 2263 
–  –  – – 46 
–  –  – – 7422 
–  –  – – 37 
–  –  – – 40 
627  –  – 114 1194 
627  –  – 114 11002 
  
–  –  – – 3696 
–  –  – – 5087 
–  –  – – 143 
–  –  – – 16 
–  –  – – 1854 
–  –  – – 10796 
–  –  – – 328 
627  –  – 114 22126 
  
–  –  – – 65
–  –  – – 99
–  –  – – 34
–  600  – – 3824
–  –  – – 116
–  –  – – 402
–  600  – – 4540
  
–  –  – – 3995
–  –  – – 87
–  –  – – 123
1015 –  – – 2765
236 –  – 01 427
–  –  – – 1541
–  –  – – 192
1251 –  – 01 9130
–  –  – – 03
1251 600  – 01 13673
624 600  – 115 8453 
  
  
–  –  – – 387 
–  –  – – 940 
–  –  – – 89
–  –  – – 4619 
43  –  312 06 276
662 600  312 121 916
619 600  – 115 4665 
05 –  – – 416 
624 600  – 115 5081 
–  –  – – 3372 
624 600  – 115 8453 
tomkins plc annual report 2005  firsttime adoption of ifrs 
consolidated balance sheet as at 1 january 2005  
presentation of uk gaap amounts in ifrs format 
tomkins plc annual report 2005 
116 
uk gaap amounts in uk gaap format 
previously 
 reported under 
 uk gaap
£ million 
debtors 
£ million 
creditors 
£ million 
fixed assets  
intangible assets 2142 –  – 
property plant and equipment 7765 –  – 
investments  53 –  – 
 40  – 
  448  – 
 9960 488  – 
current assets  
stock 3716 –  – 
debtors 6009 913 
 143  – 
 –  – 
cash 1854 –  – 
 11579 770 – 
 – –  – 
 21539 282 – 
current liabilities  
creditors – amounts falling due within one year 5073 –  5008 
 –  99
 –  34
 –  4412
 –  116
 –  402
 5073 –  55 
non current liabilities  
creditors – amounts falling due after more than one year 4794 –  799 
 –  87
 –  123
 282  536
  
 –  – 
provisions 3395 –  02 
 8189 282  55 
 –  – 
 13262 282  – 
net assets 8277 –  – 
   
tomkins plc annual report 2005 
117
group – ifrs 
 
provisions 
£ million 
 
investments
£ million 
assets held  
for sale
£ million 
uk gaap  
presented in  
ifrs format
£ million 
 
uk gaap amounts in ifrs format 
  noncurrent assets 
–  – – 2142  goodwill 
–  – 298 7467  property plant and equipment 
–  16 – 37  investments in associates 
–  – – 40  trade and other receivables 
–  – 01 447  deferred tax assets 
–  16 299 10133   
  current assets 
–  – 20 3696  inventories 
 – 09 5087  trade and other receivables 
–  – – 143  income tax recoverable 
–  16 – 16  availableforsale investments 
–  – – 1854  cash and cash equivalents 
–  16 29 10796   
–  – 328 328  assets held for sale 
–  – – 21257  total assets 
  current liabilities 
–  – – 65 bank overdrafts 
–  – – 99 bank and other loans 
–  – – 34 obligations under finance leases  
–  – 03 4409 trade and other payables 
–  – – 116 income tax liabilities 
–  – – 402 provisions 
–  – 03 5125  
  non current liabilities 
–  – – 3995 bank and other loans 
–  – – 87 obligations under finance leases  
–  – – 123 trade and other payables 
1496 – – 1750 postemployment benefit obligations 
164 – – 164 deferred tax liabilities 
1541 – – 1541 income tax liabilities 
3201  – – 192 provisions 
–  – – 7852  
–  – 03 03 liabilities directly associated with assets held for sale 
–  – – 12980 total liabilities 
–  – – 8277  net assets  firsttime adoption of ifrs 
consolidated balance sheet as at 3 january 2004  
reconciliation of uk gaap to ifrs 
tomkins plc annual report 2005 
118 
 
uk gaap  
presented in  
ifrs format
£ million 
goodwill 
£ million 
computer  
software
£ million 
noncurrent assets  
goodwill 2167 –  – 
other intangible assets – –  65 
property plant and equipment 7544 –  65
investments in associates 35 –  – 
deferred tax assets 549 –  – 
 10295 –  – 
current assets   
inventories 3526 –  – 
trade and other receivables 4807 –  – 
income tax recoverable 239 –  – 
investments  17 –  – 
cash and cash equivalents 1756 –  – 
 10345 –  – 
assets held for sale 995 –  – 
total assets 21635 –  – 
current liabilities   
bank overdrafts  136 –  – 
bank and other loans  131 –  – 
obligations under finance leases  35 –  – 
trade and other payables 3878 –  – 
income tax liabilities 157 –  – 
provisions 574 –  – 
 4911 –  – 
noncurrent liabilities    
bank and other loans  4010 –  – 
obligations under finance leases  129 –  – 
trade and other payables 48 –  – 
postemployment benefit obligations 1954 –  – 
deferred tax liabilities 168 –  – 
income tax liabilities 1700 –  – 
provisions 358 –  – 
 8367 –  – 
liabilities directly associated with assets held for sale 584 –  – 
total liabilities 13862 –  – 
net assets 7773 –  – 
equity   
capital and reserves    
ordinary share capital 387 –  – 
share premium account 928 –  – 
own shares 64 –  – 
capital redemption reserve 4619 –  – 
currency translation reserve – –  – 
retained losses 1802 –  – 
shareholders’ equity 4068 –  – 
minority interests 333 –  – 
total equity 4401 –  – 
convertible cumulative preference shares 3372 –  – 
 7773 –  – 
   
tomkins plc annual report 2005 
119
group – ifrs 
 
sharebased  
incentives 
£ million 
postemployment  
benefits 
£ million 
proposed  
dividend
£ million 
future  
operating  
losses
£ million 
deferred tax 
£ million 
restated  
under ifrs
£ million 
    
–  –  – – –  2167 
–  –  – – –  65 
–  –  – – –  7479 
–  –  – – –  35 
03  537  – – 136  1225 
03  537  – – 136  10971 
    
–  –  – – –  3526 
–  –  – – –  4807 
–  –  – – –  239 
–  –  – – –  17 
–  –  – – –  1756 
–  –  – – –  10345 
–  –  – – –  995  
03  537  – – 136  22311 
   
–  –  – – –  136
–  –  – – –  131
–  –  – – –  35
12 –  572 – –  3318
–  –  – – –  157
–  –  – 11 –  563
12 –  572 11 –  4340
     
–  –  – – –  4010
–  –  – – –  129
–  –  – – –  48
–  1370 – – –  3324
–  –  – 04 –  172
–  –  – – –  1700
–  –  – – –  358
–  1370 – 04 –  9741
–  – – – –  584
12 1370 572 07 –  14665
09 833 572 07 136  7646 
   
   
–  –  – – –  387 
–  –  – – –  928 
–  –  – – –  64
–  –  – – –  4619 
–  –  – – –  – 
09 810 572 07 136  1906
09 810 572 07 136  3964 
–  23 – – –  310 
09 833 572 07 136  4274 
–  –  – – –  3372 
09 833 572 07 136  7646 
  firsttime adoption of ifrs 
consolidated balance sheet as at 3 january 2004  
presentation of uk gaap amounts in ifrs format 
tomkins plc annual report 2005 
120 
uk gaap amounts in uk gaap format 
previously  
reported under 
 uk gaap 
£ million 
debtors 
£ million 
creditors  
£ million 
fixed assets  
intangible assets 2167 –  – 
property plant and equipment 7937 –  – 
investments  74 –  – 
 557  – 
 10178 557  – 
current assets  
stock 3739 –  – 
debtors 6242 1076 – 
 239  – 
 –  – 
cash 1756 –  – 
 11737 837 – 
 – –  – 
 21915 280 – 
current liabilities  
creditors – amounts falling due within one year 5023 –  4887 
 –  131
 –  35
 –  4140
 –  163
 –  592
 5023 –  174
non current liabilities  
creditors – amounts falling due after more than one year 4884 –  874 
 –  129
 –  51
 280  567
 –  – 
 –  – 
provisions 4235 –  47 
 9119 280  174 
 – –  – 
 14142 280  – 
net assets 7773 –  – 
   
tomkins plc annual report 2005 
121
group – ifrs 
 
provisions 
£ million 
 
investments
£ million 
assets held 
 for sale
£ million 
uk gaap  
presented in  
ifrs format
£ million 
 
uk gaap amounts in ifrs format 
  noncurrent assets 
–  – – 2167  goodwill 
–  – 393 7544  property plant and equipment 
–  17 22 35  investments in associates 
–  – 08 549  deferred tax assets 
–  17 423 10295   
  current assets 
–  – 213 3526  inventories 
–  – 359 4807  trade and other receivables 
–  – – 239  income tax recoverable 
–  17 – 17  investments  
–  – – 1756  cash and cash equivalents 
–  17 572 10345   
–  – 995 995  assets held for sale 
–  – – 21635  total assets 
  current liabilities 
–  – – 136 bank overdrafts  
–  – – 131 bank and other loans  
–  – – 35 obligations under finance leases  
–  – 262 3878 trade and other payables 
–  – 06 157 income tax liabilities 
–  – 18 574 provisions 
–  – 286 4911  
  non current liabilities 
–  – – 4010 bank and other loans 
–  – – 129 obligations under finance leases  
–  – 03 48 trade and other payables 
1691 – 24 1954 postemployment benefit obligations 
168 – – 168 deferred tax liabilities 
1700 – – 1700 income tax liabilities 
3559  – 271 358 provisions 
–  – 298 8367  
–  – 584 584 liabilities directly associated with assets held for sale 
–  – – 13862 total liabilities 
–  – – 7773  net assets  additional financial information 
profit from operations and operating margins  
before restructuring initiatives 
tomkins plc annual report 2005 
122 
 
 
industrial  
automotive
£ million 
building  
products 
£ million 
unallocated 
corporate 
activities 
£ million 
total
£ million 
year ended 31 december 2005  
revenue 22986 8838  – 31824 
segment result  2345 865  – 3210 
adjust for   
– restructuring costs 187 16  – 203 
– disposals and exit of businesses 10 95 – 85
– share of results of associates 06 –  – 06 
– gain on sale of availableforsale investments 04 –  – 04 
– unallocated corporate activities – –  253 253
profit from operations before restructuring initiatives 2552 786  253 3085 
operating margin before restructuring initiatives 111 89  – 97 
 
year ended 1 january 2005     
revenue 21823 7918  – 29741 
segment result  2487 604  – 3091 
adjust for  
– restructuring costs 178 27  – 205 
– disposals and exit of businesses 94 69  – 25
– share of results of associates 05 03  – 08 
– unallocated corporate activities – –  236 236
profit from operations before restructuring initiatives 2576 703  236 3043 
operating margin before restructuring initiatives 118 89  – 102 
       additional financial information 
supplemental cash flow analysis 
 
tomkins plc annual report 2005 
123
group – ifrs 
reconciliation of the cash flow chart included in the operating and financial review on page 34 to the consolidated cash flow statement prepared in 
accordance with ifrs on page 67 
 
year ended 
31 december 2005 
year ended 
1 january 2005 
 £ million £ million £ million £ million 
cash generated from operations 3365   3339 
capital expenditure net  
– purchase of property plant  equipment 1285 1545
– purchase of intangible assets 148 32
– disposal of property plant  equipment 238  55 
 1195 1522
operating cash flow 2170   1817 
tax  
– income tax paid 795 560
– income taxes received 90  162 
 705 398
interest and preference dividends  
– interest element of finance lease rental payments 07 09
– interest received 58  40 
– interest paid 261 186
– preference dividends paid 161 159
 371 314
other movements  
– capitalisation of development costs 04 – 
– dividends received from associates 03  04 
– investment by minority shareholder in a subsidiary –  39 
– dividend paid to a minority shareholder in a subsidiary 59 27
 60  16 
free cash flow to equity 1034   1121 
acquisitions and disposals  
– purchase of subsidiaries net of cash acquired 1013 240
– sales of subsidiaries net of cash disposed  293  213 
– lease obtained on acquisition 20 – 
 740 27
  
ordinary dividends paid 994 945
ordinary share movements  
– issue of ordinary shares 04  12 
– purchase of own shares 24 41
– sale of own shares 29  – 
 09  29
foreign currency translation   
– cash  cash equivalents 243 152 
– other debt 38 70
 281 82 
net fund movements 972 202 
   
  reconciliation of ifrs to us gaap 
significant differences between ifrs and us gaap  
 
tomkins plc annual report 2005 
124 
a background 
for the benefit of its us shareholders in addition to its consolidated financial statements prepared in accordance with international financial reporting 
standards “ifrs” the group also presents its consolidated financial statements prepared in accordance with united states generally accepted accounting 
principles “us gaap”  
ifrs differs from us gaap in certain respects an explanation of the significant differences that affect the group’s reported results cash flows and financial 
position is presented below together with reconciliation statements that quantify the effect of those differences on the group’s consolidated net income  
for the years ended 31 december 2005 “2005” and 1 january 2005 “2004” and its consolidated shareholders’ equity as at 31 december 2005 and  
1 january 2005  
an explanation of the group’s transition to ifrs is presented on pages 108 and 109 under ifrs 1 “firsttime adoption of ifrs” the group was  
not required to restate its consolidated income statement for the year ended 3 january 2004 “2003” previously reported in accordance with united kingdom 
generally accepted accounting principles “uk gaap” in accordance with ifrs consequently the reconciliation statements presented below do not include  
a reconciliation of the group’s net income for 2003 
b significant differences between accounting principles 
i goodwill 
under both ifrs and us gaap goodwill is not amortised but is tested at least annually for impairment however a significant difference exists between  
the carrying amounts of goodwill due largely to historical differences in the initial measurement and subsequent accounting for goodwill arising on  
past acquisitions  
under ifrs the group elected not to apply ifrs 3 “business combinations” to business combinations that were recognised on or before 3 january 2004  
as a result the group recognised goodwill amounting to £2167 million as at 3 january 2004 which represented the carrying amount of goodwill that was 
recognised as an asset under uk gaap on acquisitions completed on or after 3 may 1998 goodwill arising on acquisitions completed before 3 may 1998 
amounting to £10548 million was written off to reserves under uk gaap and was not reinstated on adoption of ifrs  
under us gaap the carrying amount of goodwill as at 3 january 2004 was £9534 million  
as at 31 december 2005 and 1 january 2005 the difference between the carrying value of goodwill under ifrs and that under us gaap represents the 
difference between the carrying values as at 3 january 2004 adjusted for the effect of subsequent currency exchange rate movements 
ii acquired intangible assets 
under both ifrs and us gaap an intangible resource acquired in a business combination is recognised as an intangible asset if it is separable from the 
acquired business or arises from contractual or legal rights however a significant difference exists between the carrying amounts of acquired intangible assets 
due largely to the differing treatment of intangible resources acquired in past acquisitions  
as a consequence of the decision not to apply ifrs 3 “business combinations” to business combinations that were recognised on or before 3 january 2004 
intangible resources acquired in those business combinations are not recognised as intangible assets under ifrs  
under us gaap the carrying amount of acquired intangible assets as at 3 january 2004 was £228 million  
as at 31 december 2005 and 1 january 2005 the difference between the carrying value of acquired intangible assets under ifrs and that under  
us gaap represents the difference between the carrying values as at 3 january 2004 adjusted for the effect of subsequent amortisation and currency 
exchange rate movements 
iii product development costs 
under ifrs certain product development costs are capitalised when the conditions specified by ias 38 “intangible assets” are met capitalised development 
costs are amortised to the income statement over the expected life of the resulting product 
under us gaap all product development costs are charged to the income statement in the period in which they are incurred 
iv restructuring costs 
under ifrs a restructuring plan is viewed as a whole and the related expenses are recognised when there exists an obligation to carry out the restructuring 
which is generally when a detailed formal restructuring plan is announced 
under us gaap each component of a restructuring plan must be examined separately to determine when the related expenses may be recognised 
involuntary employee termination costs may be recognised when management has committed to a detailed termination plan and has communicated the plan 
to employees other restructuring expenses are generally recognised when they are incurred  
v disposal of operations 
differences between the gain or loss recognised on the disposal of an operation recognised under ifrs and that recognised under us gaap arise principally 
because of differences in the carrying values of the assets and liabilities of the operation in addition differences in the gain or loss may arise if the operation 
was previously acquired due to differences in the carrying amount of goodwill recognised in respect of that operation see “goodwill” above andor if the 
operation is a foreign operation due to differences in the cumulative currency translation differences that are recycled to the income statement on disposal of 
the operation see “cumulative currency translation differences” below  
vi capitalisation of interest 
under ifrs the group does not capitalise any element of its interest expense under us gaap interest expense attributable to the construction of major items 
of property plant and equipment is capitalised and amortised over the estimated useful life of the asset concerned  
vii inventory 
under ifrs inventories are stated at the lower of cost and net realisable value cost is generally determined on a first in first out “fifo” basis use of the last 
in first out “lifo” basis is prohibited under ifrs 
under us gaap inventories are stated at the lower of cost and market value cost is generally determined on a fifo basis but a last in first out “lifo” basis 
is used to determine the cost of inventory held by certain us subsidiaries  reconciliation of ifrs to us gaap 
significant differences between ifrs and us gaap continued 
125
group – ifrs 
viii postemployment benefits 
under both ifrs and us gaap the cost of defined benefit plans is calculated using the projected unit credit method and is recognised over the average 
expected remaining service lives of participating employees but differences exist principally concerning the recognition of actuarial gains and losses surpluses 
and the minimum pension liability 
under ifrs the plan assets if any and the plan liabilities must be measured at the group’s balance sheet date under us gaap measurement may take place 
up to three months prior to the group’s balance sheet date and is carried out as at 1 october each year 
under ifrs actuarial gains and losses are recognised in the statement of recognised income and expense in the period in which they occur under us gaap 
the group uses the socalled “corridor approach” whereby actuarial gains and losses are amortised to the income statement over the remaining service lives of 
participating employees to the extent that measured at the beginning of each year they exceed 10 per cent of the greater of the market related value of the 
plan assets or the projected benefit obligation 
under ifrs where a plan is in surplus the asset recognised is limited to the amount of any unrecognised past service costs and the present value of any amount 
which the group expects to recover by way of refunds or a reduction in future contributions under us gaap there is no restriction on the asset recognised in 
respect of a plan in surplus 
under us gaap a minimum pension liability must be recognised that represents the amount by which the accumulated benefit obligation ignoring projected 
future salary increases exceeds the fair value of the plan assets a corresponding amount is recognised as an intangible asset to the extent of any 
unrecognised prior service cost and unrecognised transition obligation and the balance is recognised in comprehensive income under ifrs there is no 
equivalent requirement to recognise a minimum pension liability because the net liability is fully recognised on the balance sheet  
ix sharebased incentives 
under ifrs the group recognises a compensation expense in respect of sharebased incentives that is based on the fair value of the awards in accordance with 
ifrs 2 “sharebased payment” the group applied ifrs 2 retrospectively to all awards that were outstanding but had not vested as at 1 january 2005 except 
those equitysettled awards that were granted on or before 7 november 2002  
under us gaap prior to 2 january 2005 the compensation expense was based on the intrinsic value of the awards in accordance with apb 25 “accounting 
for stock issued to employees” effective 2 january 2005 the group adopted sfas 123r “sharebased payment” which requires that the compensation 
expense is based on the fair value of the awards the group applied sfas 123r prospectively to the unvested portion of all awards that were outstanding  
as at 1 january 2005 
while differences between the compensation expense recognised under ifrs and us gaap will exist for the foreseeable future it is expected that they will be 
eliminated in future years when the outstanding unvested equitysettled awards granted on or before 7 november 2002 either vest or are forfeited due to 
failure to meet the service or nonmarket performance conditions that apply to them  
x derivatives and hedge accounting 
under ifrs prior to 2 january 2005 derivative financial instruments were not generally recognised as assets and liabilities on the balance sheet and gains or 
losses arising on them were not recognised until the hedged item was itself recognised in the financial statements from 2 january 2005 onwards derivative 
financial instruments are recognised as assets and liabilities measured at their fair values at the balance sheet date and in the absence of hedge accounting 
changes in their fair values are reflected immediately in the group’s profit for the period the group does not generally apply hedge accounting to 
transactional foreign currency hedging relationships it does however apply hedge accounting to translational foreign currency hedging relationships and to 
hedges of its interest rate exposures where it is permissible to do so under ias 39 “financial instruments recognition and measurement”  
under us gaap derivative financial instruments are recognised as assets and liabilities measured at their fair values at the balance sheet date and in the 
absence of hedge accounting changes in their fair values are reflected immediately in the group’s net income prior to 2005 the group chose not to apply 
hedge accounting but thereafter it has applied hedge accounting to translational hedging relationships where it is permissible to do so under sfas 133 
“accounting for derivative instruments and hedging activities” while the group achieves hedge accounting under us gaap for those hedges of its interest 
rate exposures that qualify for hedge accounting under ifrs it is not possible for it to achieve hedge accounting under us gaap for certain translational 
foreign currency hedging relationships that qualify for hedge accounting as net investment hedges under ifrs  
xi preference shares 
under ifrs prior to 2 january 2005 the us dollar denominated 556 convertible cumulative preference shares “the preference shares” were classified as 
nonequity shareholders’ funds and were translated into sterling at the exchange rate ruling at their date of issue dividends payable on the preference shares 
were treated as an appropriation of profit 
from 2 january 2005 onwards the preference shares are classified as noncurrent liabilities and are retranslated into sterling at the exchange rate ruling at the 
balance sheet date the preference shares have been designated as a net investment hedge and to the extent the hedge is effective currency translation 
differences are recognised directly in equity dividends payable on the preference shares are included within interest payable 
under us gaap the preference shares are classified as shareholders’ equity and are translated into sterling at the exchange rate ruling at the date of issue 
dividends payable on the preference shares are treated as an appropriation of shareholders’ equity 
xii cumulative currency translation differences 
under both ifrs and us gaap currency translation differences arising on the translation into sterling of the results assets and liabilities of foreign operations 
are recognised as a separate component of equity on transition to ifrs the group elected to deem cumulative currency translation differences on its net 
investment in foreign operations to be £nil as at 3 january 2004 accordingly the gain or loss on disposal of a foreign operation recognised under ifrs does 
not include currency translation differences that arose before 4 january 2004  
tomkins plc annual report 2005  reconciliation of ifrs to us gaap 
significant differences between ifrs and us gaap continued 
tomkins plc annual report 2005 
126 
c presentational differences 
i discontinued operations  
under ifrs an operation is classified as discontinued if it has been sold or is classified as held for sale at the balance sheet date and itself represents or its sale 
is part of a single plan to dispose of a separate major line of business or geographical area of operations under us gaap discontinued operations include all 
components of the group’s businesses that have identifiable operations and cash flows and have been sold or are classified as held for sale at the balance 
sheet date  
ii statement of cash flows 
under ifrs cash flow represents increases or decreases in cash and cash equivalents which comprise cash in hand deposits available on demand  
and other shortterm highly liquid investments with a maturity on acquisition of three months or less and bank overdrafts under us gaap cash flow  
is as defined under ifrs except it excludes increases or decreases in bank overdrafts 
under ifrs dividends received from associates have been classified as cash flows from investing activities whereas under us gaap they are classified  
as cash flows from operating activities 
under ifrs interest paid and interest received has been classified as cash flows from financing activities whereas under us gaap they are classified within  
cash flows from operating activities 
 
 
 
 
 
 
 
 
  reconciliation of ifrs to us gaap 
reconciliation statements 
127
group – ifrs 
net income 
 
 
 
 
 
note b 
year ended 
31 december 
2005 
£ million 
year ended
 1 january 
 2005
 £ million 
profit for the period under ifrs  2012 2101 
minority interests  90 101
net income under ifrs  1922 2000 
us gaap adjustments  
– acquired intangibles amortisation ii  28 29
– product development costs iii  04 – 
– restructuring costs iv  05 109
– gain on disposal of operations v  – 09 
– capitalised interest vi  53 45 
– inventory  vii  47 09
– postemployment benefits viii  129 57
– sharebased incentives ix  14 22 
– derivatives and hedge accounting x   401 201 
– preference dividends xi  163 – 
deferred income tax on us gaap adjustments  214 28
minority interest in us gaap adjustments  – 18 
net income under us gaap expressed in sterling  1724 2063 
 
    million  million 
net income under us gaap expressed in us dollars at the average exchange rate for 
the period of £  18156 2004 – £  18257   3130 3766 
currency translation differences   – 11 
net income under us gaap expressed in us dollars    3130 3777 
 
shareholders’ equity 
 
 
 
 
note b 
 as at 
31 december 
2005 
£ million 
as at 
 1 january  
2005
£ million 
shareholders’ equity under ifrs  6645 4665 
us gaap adjustments  
– goodwill net i  7668 6863 
– acquired intangibles net ii  253 256 
– product development costs  iii  04 – 
– restructuring costs iv  04 08 
– capitalised interest net vi  244 171 
– inventory vii  83 30
– postemployment benefits  viii  16 02 
– sharebased incentives ix  – 28 
– derivatives and hedge accounting x  56 76 
– preference shares xi  3047 3372 
deferred income tax on us gaap adjustments  139 181
minority interest in us gaap adjustments  – 05
shareholders’ equity under us gaap expressed in sterling  17675 15225 
 
    million  million 
shareholders’ equity under us gaap expressed in us dollars at the closing exchange 
rate of £  17168 1 january 2005 – £  19199   30344 29231 
 
tomkins plc annual report 2005  consolidated financial statements prepared in accordance with us gaap 
report of independent registered public accounting firm  
tomkins plc annual report 2005 
128 
to the board of directors and shareholders of tomkins plc 
we have audited the accompanying consolidated balance sheets of  
tomkins plc and subsidiaries “the company” as of december 31 2005 
and january 1 2005 and the related consolidated statements of income 
cash flows and changes in shareholders’ equity for the fiscal years ended 
december 31 2005 january 1 2005 and january 3 2004 these financial 
statements are the responsibility of the company’s management our 
responsibility is to express an opinion on the financial statements based  
on our audits 
we conducted our audits in accordance with standards of the public 
company accounting oversight board united states those standards 
require that we plan and perform the audit to obtain reasonable assurance 
about whether the financial statements are free of material misstatement 
the company is not required to have nor were we engaged to perform  
an audit of its internal control over financial reporting an audit includes 
consideration of internal control over financial reporting as a basis for 
designing audit procedures that are appropriate in the circumstances  
but not for the purpose of expressing an opinion on the effectiveness  
of the company’s internal control over financial reporting accordingly  
we express no such opinion an audit includes examining on a test basis 
evidence supporting the amounts and disclosures in the financial statements 
an audit also includes assessing the accounting principles used and 
significant estimates made by management as well as evaluating the  
overall financial statement presentation we believe that our audits provide  
a reasonable basis for our opinion 
in our opinion such consolidated financial statements present fairly in all 
material respects the financial position of tomkins plc as of december 31 
2005 and january 1 2005 and the results of its operations and its cash flows 
for the fiscal years ended december 31 2005 january 1 2005 and january 
3 2004 in conformity with accounting principles generally accepted in the 
united states of america  
as discussed in note 4 to the financial statements in fiscal 2005 the 
company 1 changed the presentation of its consolidated statements of 
cash flows to include the cash flows from operating investing and financing 
activities of discontinued operations within the respective categories  
of operating investing and financing activities of the company and  
2 separately restated the presentation within its statement of changes in 
shareholders’ equity fiscal 2004 and fiscal 2003 have been retroactively 
restated to reflect these changes 
as discussed in note 18 to the financial statements the company early 
adopted the provisions of statement of financial accounting standards 
no123 revised 2004 “sharebased payment” as of january 2 2005  
 
deloitte  touche llp 
london united kingdom 
march 10 2006  consolidated financial statements prepared in accordance with us gaap 
consolidated statements of cash flows 
all numbers below are in millions usd 
tomkins plc annual report 2005 
130 
 
 
year ended 
december 31 
2005 
 million 
restated
year ended 
january 1 
2005 
 million 
restated
year ended
january 3 
2004
 million 
cash flow from operating activities  
net income 3130  3777 4267 
adjustments to reconcile net income to net cash provided by operating activities  
– equity in net income of associates 12 16 11
– depreciation and amortization 2255  2204 2141 
– impairment of goodwill –  – 539 
– impairment of property plant and equipment 95  – – 
– gain on disposal of discontinued operations 16 110 496
– gain on sale of property plant and equipment 193 37 106
– sharebased compensation  154  66 106 
– deferred income taxes 572  336 72
– minority interest 164  152 132 
– dividends received from associates 05  07 08 
– changes in assets and liabilities net of effects of businesses acquired or sold  
decrease in taxes payable 1165 31 1273
increase in accounts receivable 567 610 352
decrease in prepaid expenses and other assets 102  208 72 
increase in inventories 321 577 28
increase in accounts payable 210  1004 172 
increasedecrease in other current liabilities net 680 1022 200  
net cash provided by operating activities  3733  5351 5299 
cash flows from investing activities  
purchases of property plant and equipment 2603 2879 2301
proceeds from the sale of property plant and equipment 432  159 442 
proceeds from the sale of discontinued operations 528  300 646 
purchase of investments 01 – – 
sale of investments 02  – – 
new business acquisitions net of cash acquired 1880 460 2400
changes in restricted cash 09 20 38
net cash used in investing activities 3531 2900 3651
cash flows from financing activities  
bank loans repayment 891 157 838
bank loans drawn down  3366  33 4980 
repayment of overdrafts 22 09 – 
capital lease repayment 51 – – 
issuance of common shares 08  22 11 
redemption of redeemable convertible cumulative preference shares –  – 6045
proceeds on sale of treasury shares 53  – – 
payments to acquire treasury shares 44 75 40
dividend payments 2063 2031 2045
dividend paid to a minority shareholder in a subsidiary 106 49 63
investment byrepayment of capital to a minority shareholder in a subsidiary –  71 13
net cash provided byused in financing activities 250  2195 4053
effect of exchange rate changes on cash and cash equivalents  48 161 50 
net increasedecrease in cash and cash equivalents 404  417 2355
cash and cash equivalents at beginning of period 3560  3143 5498 
cash and cash equivalents at the end of the period 3964  3560 3143 
  
supplemental schedule of investing and financing activities   
cash paid during the period for interest 487 356 323
cash paid during the period for income taxes 1442 1024 978
non cash investing and financing activities  
capital lease additions 36 – 70
 see note 4 
the accompanying notes form an integral part of these consolidated financial statements consolidated financial statements prepared in accordance with us gaap 
consolidated statements of income 
all numbers below are in millions usd except per share data 
tomkins plc annual report 2005 
129
group – us gaap 
year ended 
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million 
year ended
january 3
2004
 million 
net sales  57760  53561 48474 
cost of sales 41676 38064 34526
gross profit 16084  15497 13948 
selling general and administrative expenses 10844 10385 9587
goodwill impairment –  – 125
restructuring expenses 390 341 380
operating income from continuing operations 4850  4771 3856 
interest income 104  115 158 
interest expense 348 349 302
other expenseincome net 652 440 548 
income from continuing operations before taxes minority interest and equity  
in net income of associates  3954  4977 4260 
income tax expensebenefit 688 1032 722 
minority interest in net income net of tax charge of 60 million 2004 – 70 million 2003 – 59 million 164 152 124
equity in net income of associates net of tax charge of 04 million 2004 – 02 million  
2003 – 03 million 12  09 08 
income from continuing operations  3114  3802 4866 
loss from discontinued operations net of tax charge of 01 million 2004 – tax charge of 42 million 
2003 – tax credit of 145 million –  135 1095
gain on disposal of discontinued operations net of tax charge of 09 million  
2004 – tax credit of 68 million 2003 – tax charge of 119 million 
 
16  110 496 
net income 3130  3777 4267 
gain on redemption of redeemable convertible cumulative preference shares –  – 174 
dividends on preferred shares 291 285 471
net income attributable to common shareholders 2839  3492 3970 
  
net income per common share  
basic  
income from continuing operations  037  046 059 
loss from discontinued operations –  002 014
gain on disposal of discontinued operations –  001 006 
net income 037  045 051 
diluted  
income from continuing operations  036  043 051 
loss from discontinued operations –  001 012
gain on disposal of discontinued operations –  001 006 
net income 036  043 045 
the accompanying notes form an integral part of these consolidated financial statements  consolidated financial statements prepared in accordance with us gaap 
consolidated balance sheets 
all numbers below are in millions usd except share and per share data 
tomkins plc annual report 2005 
131
group – us gaap 
assets 
as at 
december 31 
2005 
 million  
restated
as at
january 1
2005
 million 
current assets  
cash and cash equivalents 3964  3560 
restricted cash 92  94 
accounts receivable net of allowances of 135 million january 1 2005 117 million 8783  8259 
inventories 7493  7038 
deferred income taxes 485  801 
prepaid expenses and other assets 1183  1281 
assets held for sale 230  618 
total current assets 22230  21651 
longterm assets  
property plant and equipment 14667  14530 
goodwill 18649  17523 
intangible assets 807  577 
deferred income taxes 1049  2376 
other longterm assets 431  703 
total assets 57833  57360 
liabilities and shareholders’ equity  
current liabilities  
bank overdrafts bank and other loans current portion 697  315 
capital leases current portion 41  65 
accounts payable 4676  4508 
other current liabilities 3707  3749 
taxes payable 1861  2907 
deferred income taxes 132  418 
liabilities related to assets held for sale –  06 
total current liabilities 11114  11968 
longterm liabilities  
bank and other loans less current portion 9035  7671 
capital leases less current portion 171  167 
pension obligations 2499  2619 
post retirement obligations other than pensions 2658  2861 
deferred income taxes 748  1636 
other longterm liabilities 431  399 
total liabilities 26656  27321 
minority interest 833  808 
shareholders’ equity  
common shares par value 5p authorized shares – 1585164220 issued and outstanding shares – 774495124  
january 1 2005 773889884 557  556 
convertible cumulative preference shares of 50 authorized shares – 13920000 issued and outstanding shares – 
10462774 january 1 2005 10506721 5231  5254 
treasury shares 109 114
additional paidin capital 1791  1605 
restricted reserves 7176  7176 
retained earnings 18012  16978 
accumulated other comprehensive loss 2314 2224
total shareholders’ equity 30344  29231 
total liabilities and shareholders’ equity 57833  57360 
see note 4 
the accompanying notes form an integral part of these consolidated financial statements  consolidated financial statements prepared in accordance with us gaap 
consolidated statements of changes in shareholders’ equity 
all numbers below are in millions usd except share and per share data 
tomkins plc annual report 2005 
132 
 
 common shares 
 convertible cumulative  
preferred shares 
 
treasury shares 
 
number 
of shares
thousands 
restated
 million 
 
number 
of shares 
thousands 
restated 
 million 
 
number 
of shares
thousands 
restated
 million 
as at december 31 2002 772973 555 10507 5254   1827 31
comprehensive income   
net income – – – –   – – 
gain on redemption of redeemable convertible cumulative  
preference shares – – – –  
 
– – 
minimum pension liability adjustments – – – –   – – 
foreign currency translation – – – –   – – 
total comprehensive incomeloss      
other changes in shareholders’ equity    
common shares issued 289 – – –   – – 
treasury shares acquired – – – –   899 40
cost of sharebased compensation – – – –   – – 
transfer of treasury shares – – – –   97 03 
transfer to restricted reserves on redemption of redeemable 
convertible cumulative preference shares – – – –  
 
– – 
dividends on preferred shares       
– redeemable convertible cumulative preference shares  
 – 4344 per cent – – – –  
 
– – 
– convertible cumulative preference shares – 556 per cent – – – –   – – 
dividends on common shares – 126p per share – – – –   – – 
as at january 3 2004 773262 555 10507 5254   2629 68
comprehensive income   
net income – – – –   – – 
minimum pension liability adjustments – – – –   – – 
foreign currency translation – – – –   – – 
total comprehensive incomeloss   
other changes in shareholders’ equity   
common shares issued 628 01 – –   – – 
treasury shares acquired – – – –   712 29 
cost of sharebased compensation  – – – –   – –  
transfer of treasury shares – – – –   1583 75
dividends on preferred shares – convertible cumulative preference 
shares – 556 per cent – – – –  
 
– – 
dividends on common stock – 122p per share – – – –   – – 
as at january 1 2005 773890 556 10507 5254   3500 114
comprehensive income   
net income – – – –   – – 
unrealized gain on availableforsale investments – – – –   – – 
realized gain on availableforsale investments – – – –   – – 
minimum pension liability adjustments – – – –   – – 
foreign currency translation – – – –   – – 
total comprehensive incomeloss   
other changes in shareholders’ equity   
common shares issued 176 – – –   – – 
conversions of convertible cumulative preference shares 429 01 44 23  – – 
treasury shares acquired – – – –   860 44
cost of sharebased compensation – – – –   – – 
transfer or sale of treasury shares – – – –   1130 49 
dividends on preferred shares – convertible cumulative preference 
shares – 556 per cent – – – –  
 
– – 
dividends on common shares – 1323p per share – – – –   – – 
as at december 31 2005 774495 557 10463 5231   3230 109
see note 4 
   
 
tomkins plc annual report 2005 
133
group – us gaap 
 
  comprehensive income  
   accumulated other comprehensive income  
shareholders’
equity 
restated 
additional  
paidin capital 
 million 
restated 
restricted  
reserves 
 million 
retained 
earnings 
 million 
restated 
exchange 
translation 
reserve 
 million 
available 
forsale 
reserve
 million 
minimum 
pension liability
 million 
tax effect
 million 
restated 
total 
 million 
restated
total
 million 
total
 million 
1432  957  19048  1407 – 2614 931 3090  24125 
      
–  –  4267 –  – – – –  4267 4267 
 
–  –  174 –  – – – –  174 174 
–  –  –  –  – 389 77 312  312 312 
–  –  –  74  – – – 74  74 74 
  4441 74  – 389 77 386  4827 
     
11  –  –  –  – – – –  11 
–  –  –  –  – – – –  40
106  –  –  –  – – – –   106 
03 –  –  –  – – – –   – 
 
–  6219  6219 –  – – – –  – 
              
 
–  –  177 –  – – – –  177
–  –  294 –  – – – –  294
–  –  1588 –  – – – –  1588
1546  7176  15211  1333 – 2225 854 2704 26970 
     
–  –  3777  –  – – – –  3777 3777 
–  –  –  –  – 137 80 57  57 57 
–  –  –  423  – – – 423  423 423 
  3777  423  – 137 80 480  4257 
     
22  –  –  –  – – – –  23 
29 –  –  –  – – – –   – 
66  –  –  –  – – – –   66 
–  –  –  –  – – – –  75
 
–  –  285 –  – – – –  285
–  –  1725 –  – – – –  1725
1605  7176  16978  910 – 2088 774 2224  29231 
     
–  –  3130  –  – – – –  3130 3130 
–  –  –  –  13 – 06 07  07 07 
–  –  –  –  10 – – 10 10 10
–  –  –  –  – 570 177 393 393 393
–  –  –  504  – – 198 306  306 306 
  3130  504  03 570 27 90 3040 
     
07  –  –  –  – – – –  07 
22  –  –  –  – – – –  – 
–  –  –  –  – – – –  44
154  –  –  –  – – – –   154 
03  –  –  –  – – – –   52 
 
–  –  291 –  – – – –  291
–  –  1805 –  – – – –  1805
1791  7176  18012  406 03 2658 747 2314 30344 
the accompanying notes form an integral part of these consolidated financial statements consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements 
 
tomkins plc annual report 2005 
134 
1 nature of operations 
tomkins plc and its subsidiaries together the “company” comprise a global 
engineering and manufacturing business with effect from january 2 2005 
the company was reorganized for management reporting purposes into two 
business groups industrial  automotive and building products  
industrial  automotive manufactures a wide range of systems and 
components for car truck and industrial equipment manufacturing markets 
and industrial and automotive aftermarkets throughout the world through 
five operating segments power transmission fluid power wiper systems 
fluid systems and other industrial  automotive  
building products is comprised of two operating segments air systems 
components and other building products air systems components  
supplies the industrial and residential heating ventilation and air 
conditioning market mainly in north america other building products 
manufactures a variety of products for the building and construction 
industries mainly in north america 
  
2 summary of significant accounting 
policies 
a basis of consolidation 
the consolidated financial statements include the accounts of tomkins plc 
and its subsidiaries  
a subsidiary is an entity controlled either directly or indirectly by the 
company where control is the power to govern the financial and operating 
policies of the entity so as to obtain benefit from its activities the income 
and expenses of a subsidiary acquired during the period are included in the 
company’s income and expenses from the date of acquisition the income 
and expenses of a subsidiary sold during the period are included in the 
company’s income and expenses up to the date of disposal  
transactions between tomkins plc and its subsidiaries or between fellow 
subsidiaries and any balances and unrealized gains and losses arising from 
such transactions are eliminated on consolidation  
as at december 31 2005 the carrying amount of minority interests in 
subsidiaries that were not wholly owned by the company was 833 million 
january 1 2005 808 million which comprised the following outside 
ownership interests 
as at december 31 2005 and january 1 2005  
gates korea company limited 49
gates unitta india private company limited 49
gates unitta korea company limited 49
gates unitta power transmission suzhou limited 49
gates unitta power transmission shanghai limited 49
gates unitta asia company limited 49
gates unitta asia trading company pte limited 49
gates unitta thailand company limited 49
schrader – lu hai rubber metal kunshan company limited 40
where accumulated losses applicable to a minority interest in a subsidiary 
exceed the minority’s interest in the equity of the subsidiary the excess is 
allocated to the company’s interest in the subsidiary except to the extent 
that the minority has a binding obligation and is able to make an additional 
investment to cover its share of the accumulated losses 
during fiscal 2005 fiscal 2004 and fiscal 2003 there were no  
variable interest entities in which the company was deemed to be the 
primary beneficiary 
b associates 
an associate is an entity over which tomkins plc either directly or indirectly 
is in a position to exercise significant influence by participating in but not 
controlling or jointly controlling the financial and operating policies of the 
entity associates are accounted for using the equity method whereby the 
company’s share of the earnings or losses of associates are included in 
consolidated net income and the company’s share of the net assets of  
its associates is included within other longterm assets 
gains and losses recognized by tomkins plc or its subsidiaries on transactions 
with an associate are eliminated to the extent of the company’s interest in 
the associate concerned  
as at december 31 2005 the carrying amount of the company’s interests in 
associates was 76 million january 1 2005 71 million which comprised 
the following ownership interests 
as at december 31 2005 and january 1 2005  
dongfengfujithomson thermostat co limited 32
ideal international sa 40
pyung hwa cmb co limited 21
schrader duncan ltd 50
losses of an associate in excess of the company’s interest in the associate 
are not recognized except to the extent that the company has incurred 
obligations on behalf of the associate 
c foreign currency translation 
at entity level transactions denominated in currencies other than the entity’s 
functional currency are translated into the entity’s functional currency at the 
exchange rate ruling on the date of the transaction monetary assets and 
liabilities denominated in foreign currencies are retranslated at the exchange 
rate ruling on the balance sheet date currency translation differences are 
recognized in the statement of income for the period 
on consolidation the results of operations of entities whose functional 
currency is other than the us dollar are translated into us dollars at the 
average exchange rate for the period and their assets and liabilities are 
translated into us dollars at the exchange rate ruling on the balance  
sheet date currency translation differences are recognized within other 
comprehensive income as a separate component of shareholders’ equity in 
the event that such an operation is sold the cumulative currency translation 
differences that are attributable to the operation are reclassified to income 
in the statement of cash flows the cash flows of operations whose functional 
currency is other than the us dollar are translated into us dollars at the 
average exchange rate for the period 
d revenue recognition 
revenue from the sale of goods is recognized only when there is persuasive 
evidence of a sales agreement the delivery of goods has occurred the sales 
price is fixed or determinable and the collectibility of revenue is reasonably 
assured revenue is measured at the invoiced amount net of returns early 
settlement discounts rebates and sales taxes the company accrues for 
rebates pursuant to specific arrangements with certain of its customers 
primarily in the aftermarket rebates generally provide for price reductions 
based upon the achievement of specified purchase volumes and are recorded 
as a reduction in revenue when recognized 
revenue on longterm contracts is recognized by the percentageof
completion method determined by comparing contract costs incurred  
for work performed to date to estimated total contract costs losses on 
contracts if any are recognized in the period when such losses become 
probable and can be reasonably estimated  
revenue recognized on longterm contracts in fiscal 2005 was  
2353 million fiscal 2004 1495 million fiscal 2003 1648 million  
of which 315 million in fiscal 2004 and 688 million in fiscal 2003 related 
to discontinued operations as at december 31 2005 amounts billed but 
not yet received in respect of longterm contracts amounted to 371 million 
january 1 2005 278 million including customer retentions of  
57 million january 1 2005 12 million  
interest income is accrued on a time basis using the effective interest method 
e product development costs 
research and development expenditure is charged to income in the period in 
which it is incurred research and development expenses were 848 million 
in fiscal 2005 937 million in fiscal 2004 and 956 million in fiscal 2003 
f cash and cash equivalents 
cash and cash equivalents comprise cash in hand deposits available on 
demand and other shortterm highly liquid investments with maturities  
on acquisition of 90 days or less  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
135
group – us gaap 
2 summary of significant accounting policies continued 
g restricted cash 
restricted cash comprises cash balances pledged or advanced as collateral  
in the ordinary course of business  
h inventory 
inventories are stated at the lower of cost or market with due allowance for 
any excess obsolete or slow moving items based on management’s review  
of onhand inventories compared to historical and estimated future sales and 
usage profiles  
cost represents the expenditure incurred in bringing inventories to their 
existing location and condition which may include the cost of raw materials 
direct labor costs other direct costs and related production overheads cost 
is generally determined on a first in first out “fifo” basis but the cost of 
certain inventories is determined on a last in first out “lifo” basis as at 
december 31 2005 inventories whose cost was determined on a lifo basis 
represented 35 per cent january 1 2005 37 percent of the total carrying 
amount of inventories as at december 31 2005 the replacement cost of 
inventories whose cost was determined on a lifo basis exceeded their 
carrying values by 85 million january 1 2005 16 million  
i property plant and equipment 
property plant and equipment is stated at cost less accumulated  
depreciation and any recognized impairment losses major improvements  
are capitalized expenditures for repairs and maintenance are charged to 
expense as incurred 
freehold land and assets under construction are not depreciated 
depreciation of property plant and equipment other than freehold land and 
assets under construction is generally provided on a straightline basis so as 
to charge the depreciable amount to expense over the estimated useful life 
of the asset concerned the estimated useful lives of items of property plant 
and equipment are in the following ranges 
freehold buildings and long  
leasehold land and buildings 10 to 50 years 
short leasehold land and buildings length of lease 
plant equipment and vehicles 2 to 20 years 
interest costs attributable to funding the construction of major items of 
property plant and equipment are capitalized and amortized over the 
estimated useful life of the asset concerned interest capitalized is 
determined by reference to the average interest rate on outstanding 
borrowings in fiscal 2005 interest costs of 138 million were capitalized 
fiscal 2004 117million fiscal 2003 72 million 
j goodwill 
business combinations are accounted for in accordance with sfas 141 
“business combinations” 
goodwill arises on the acquisition of subsidiaries and associates and 
represents any excess of the cost of the acquired entity over the company’s 
interest in the fair value of the entity’s identifiable assets liabilities and 
contingent liabilities determined at the date of acquisition goodwill is not 
amortized but is tested at least annually for impairment and carried at cost 
less any recognized impairment losses  
k other intangible assets  
intangible assets are stated at cost less accumulated amortization and any 
recognized impairment losses all intangible assets recognized by the 
company are considered to have finite useful lives 
i assets acquired in business combinations 
an intangible resource acquired in a business combination is recognized as 
an intangible asset if it is separable from the acquired business or arises from 
contractual or other legal rights an acquired intangible asset is amortized on 
a straightline basis so as to charge its cost which represents its fair value at 
the date of acquisition to expense over its expected useful life acquired 
intangible assets mainly comprise patents and technology customer 
relationships and intellectual property the expected useful lives of these 
assets are in the range 8 to 15 years and the weighted average expected 
useful life is 11 years 
ii computer software 
computer software that is not integral to an item of property plant and 
equipment is recognized separately as an intangible asset nonintegral 
computer software is amortized on a straightline basis so as to charge its 
cost to expense over its expected useful life the expected useful lives of  
nonintegral computer software are in the range 3 to 5 years 
l impairment of longlived assets  
i longlived assets other than goodwill 
longlived assets to be held and used including intangible assets are 
reviewed for impairment when events or circumstances indicate that  
the carrying amount of the asset or asset group may not be recoverable  
the carrying value of a longlived asset or asset group is considered to be 
impaired when the undiscounted expected future cash flows from the asset 
or asset group are less than its carrying amount in that event an impairment 
loss is recognized to the extent that the carrying amount of the asset or asset 
group exceeds its fair value fair value is determined based on quoted market 
prices where available or is estimated as the present value of the expected 
future cash flows from the asset or asset group discounted at a rate 
commensurate with the risk involved  
ii goodwill 
at the time of the business combination to which it relates goodwill is 
allocated to one or more reporting units goodwill is tested at least annually 
for impairment firstly to identify potential impairment of the goodwill the 
fair value of the reporting unit to which the goodwill is allocated is compared 
with its carrying amount fair value is determined based on quoted market 
prices where available or is estimated as the present value of the expected 
future cash flows from the reporting unit discounted at a rate commensurate 
with the risk involved secondly if the carrying amount of the reporting unit 
including the goodwill exceeds its fair value the goodwill is tested for 
impairment based on its implied fair value the implied fair value of goodwill 
represents the excess of the fair value of the reporting unit over the fair value 
of its identifiable assets liabilities and contingent liabilities at the date of the 
impairment test an impairment loss is recognized if and to the extent that 
the carrying amount of the goodwill exceeds its implied fair value  
m investments 
listed investments are classified as availableforsale and are measured at  
fair value changes in their fair values are recognized in other comprehensive 
income except to the extent that they represent another than temporary 
impairment in which case the impairment loss is recognized in income  
accumulated gains and losses recognized in other comprehensive income are 
reclassified to income in the event that they are realized on the disposal of 
the investments availableforsale investments are included within other 
noncurrent assets as at december 31 2005 their carrying amount was 
38 million january 1 2005 31 million during fiscal 2005 a gain  
of 13 million was reclassified to income on the disposal of availablefor 
sale investments 
n derivative financial instruments 
the company uses derivative financial instruments principally foreign 
currency swaps forward foreign currency contracts and interest rate swaps 
to reduce its exposure to exchange rate and interest rate movements  
the company does not hold or issue derivatives for speculative or  
trading purposes  
derivative financial instruments are recognized as assets and liabilities 
measured at their fair values at the balance sheet date changes in their  
fair values are recognized in income and this is likely to cause volatility in 
situations where the carrying amount of the hedged item is either not 
adjusted to reflect fair value changes arising from the hedged risk or is  
so adjusted but that adjustment is not recognized in income provided the 
conditions specified by sfas133 ”accounting for derivative instruments  
and hedging activities” are met hedge accounting may be used to mitigate 
this volatility  
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
136 
2 summary of significant accounting policies continued 
prior to fiscal 2005 the company chose not to adopt the hedge accounting 
provisions of sfas 133 during fiscal 2005 management reviewed its policy 
towards hedge accounting and decided to use hedge accounting in certain 
circumstances with effect from fiscal 2005 the company does not generally 
apply hedge accounting to transactional foreign currency hedging 
relationships such as hedges of forecast or committed transactions it does 
however apply hedge accounting to translational foreign currency hedging 
relationships and to hedges of its interest rate exposures where it is 
permissible to do so under sfas133 when hedge accounting is used the 
relevant hedging relationships are classified as a fair value hedge a cash flow 
hedge or in the case of a hedge of the company’s net investment in a 
foreign operation a net investment hedge 
where the hedging relationship is classified as a fair value hedge the 
carrying amount of the hedged asset or liability is adjusted by the increase  
or decrease in its fair value attributable to the hedged risk and the resulting 
gain or loss is recognised in income where to the extent that the hedge is 
effective it offsets the change in the fair value of the hedging instrument 
where the hedging relationship is classified as a cash flow hedge or as a net 
investment hedge to the extent the hedge is effective changes in the fair 
value of the hedging instrument are recognized in other comprehensive 
income rather than in income accumulated gains and losses recognized in 
other comprehensive income in relation to a cash flow hedge are reclassified 
to income in the same period or periods during which the hedged 
transaction affects income accumulated gains and losses recognized in 
other comprehensive income in relation to a net investment hedge are 
reclassified to income in the event of the disposal of the foreign operation  
derivative financial instruments are classified as current assets or liabilities 
unless they qualify for hedge accounting under sfas133 and the hedged 
item is classified as a noncurrent asset or liability 
derivatives embedded in nonderivative host contracts are recognized 
separately as derivative financial instruments when their risks and 
characteristics are not closely related to those of the host contract and the 
host contract is not stated at its fair value with changes in its fair value 
recognized in the income statement 
o leases 
leases that confer rights and obligations similar to those that attach to 
owned assets and meet the conditions specified by sfas 13 “accounting  
for leases” are classified as capital leases all other leases are classified as 
operating leases 
assets held under capital leases are included within property plant and 
equipment initially measured at their fair value or if lower the present value 
of the minimum lease payments and a corresponding liability is recognized 
within capital lease obligations subsequently the assets are depreciated on 
a basis consistent with similar owned assets or over the term of the lease if 
shorter on commencement of the lease the lease rentals are apportioned 
between an interest element and a capital element so as to produce a 
constant periodic rate of interest on the outstanding liability thereafter  
the interest element is recognized in expense while the capital element is 
applied to reduce the outstanding liability as at december 31 2005 the 
cost of assets held under capital leases was 575 million january 1 2005 
649 million and accumulated depreciation recognized in respect of those 
assets was 378 million january 1 2005 405 million  
operating lease rentals and any incentives receivable are recognized in 
expense on a straightline basis over the term of the lease 
p postretirement benefits 
postretirement benefits comprise pension benefits provided to employees 
throughout the world and other benefits mainly healthcare provided to 
certain employees in north america the plans are structured to accord  
with local conditions and practices in each country and include defined 
contribution and defined benefit plans 
the company accounts for its postretirement benefit plans in accordance 
with sfas 87 “employers accounting for pensions” and sfas 106 
“employers’ accounting for postretirement benefits other than pensions” 
the principle underlying these accounting standards is that the cost of 
providing these benefits is recognized in income on a smoothed basis over 
the service lives of the participating employees 
for defined contribution plans the cost of providing the benefits represents 
the company’s contributions to the plans and is recognized in income in the 
period in which the contributions fall due 
for defined benefit plans the cost of providing the benefits is determined 
based on actuarial valuations of each of the plans that are carried out 
annually by independent qualified actuaries at a date not more than three 
months before company’s fiscal year end plan assets if any are measured 
at a marketrelated value that smoothes the effect of shortterm market 
fluctuations in asset values benefit obligations are measured using the 
projected unit credit method 
the net periodic cost comprises the service cost the interest cost the 
expected return on plan assets if any and the amortization of the prior 
service cost the actuarial gain or loss and any unrecognized obligation  
or asset that existed on initial application by the company of sfas 87  
and sfas 106 the service cost represents the present value of benefits 
attributed to services rendered by employees during the period the interest 
cost represents the increase in the projected benefit obligation which is  
the present value of accrued benefits including assumed future salary 
increases due to the passage of time the discount rate used reflects the 
rates available on highquality fixedincome debt instruments at the date  
of the plan valuation prior service costs resulting from plan amendments  
are recognized on a straightline basis over the remaining service lives of 
participating employees  
actuarial gains and losses represent differences between the expected  
and actual returns on the plan assets gains and losses on the plan liabilities 
and the effect of changes in actuarial assumptions the company uses  
the socalled “corridor approach” whereby to the extent that they exceed  
10 per cent of the greater of the market related value of the plan assets  
and the projected benefit obligation at the beginning of the fiscal year  
they are amortized to income over the average remaining service lives of 
participating employees 
gains and losses on settlements and curtailments are generally recognized  
in income in the period in which the curtailment or settlement occurs in 
accordance with sfas 88 “accounting for settlements and curtailments  
of defined benefit pension plans and for termination benefits” 
an additional liability is recognized to the extent that the accumulated 
benefit obligation the present value of accrued benefits without allowance 
for future salary increases exceeds the fair value of the plan assets  
where an additional minimum liability is recognized an intangible asset  
is recognized up to the amount of any unrecognized prior service cost and 
any unrecognized transition obligation any amount not recognized as an 
intangible asset is reported in other comprehensive income 
q sharebased payments 
sharebased compensation is provided to employees under the company’s 
share option bonus and other share award schemes  
the company adopted sfas 123r ”sharebased payment” using the 
modified prospective method with an effective date of january 2 2005 
whereby the standard was applied prospectively to the unvested portion of 
awards that were outstanding as at january 1 2005 and all awards granted 
modified or settled on or after january 2 2005 
accordingly the compensation expense recognized in fiscal 2005 was  
based on the fair value of the unvested awards where appropriate measured 
using an optionpricing model for equitysettled awards the fair value is 
determined at the date of grant and is not subsequently remeasured unless 
the conditions on which the award was granted are modified for cash
settled awards the fair value is determined at the date of grant and is re
measured at each balance sheet date until the liability is settled generally 
the compensation expense is recognized on a straightline basis over the 
vesting period adjustments are made to reflect expected and actual 
forfeitures during the vesting period due to failure to satisfy service 
conditions or nonmarket performance conditions  
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
137
group – us gaap 
2 summary of significant accounting policies continued 
prior to adopting sfas 123r the company accounted for stock based 
compensation in accordance with apb 25 “accounting for stock issued to 
employees” whereby the compensation expense was based on the intrinsic 
value of the unvested awards determined at the measurement date the 
measurement date was the first date on which both the number of shares 
that were subject to the award and the option or purchase price if any was 
known adjustments for forfeitures were made to the compensation expense 
in the period in which they occurred 
the company’s financial statements for fiscal 2004 and fiscal 2003 have  
not been restated to reflect the adoption of sfas123r if the company had 
accounted for the plans using the fair value method prescribed in sfas 123 
“accounting for stockbased compensation” the company’s net income 
and net income per common share in fiscal 2004 and fiscal 2003 would have 
been as follows 
 
year ended 
january 1 
2005 
 million 
year ended
january 3 
 2004
 million  
reported net income 3777  4267 
deduct compensation expense determined 
under sfas 123 net of tax  
 
68 49
add back compensation expense determined 
under apb 25 net of tax 42  72 
pro forma net income 3751  4290 
  
pro forma net income per common share  
basic 045  052 
diluted 043  045 
r product warranties 
provision is made for warranty claims on various products depending on 
specific market expectations and the type of product these estimates are 
established using historical information on the nature frequency and average 
cost of warranty claims management believes that the warranty reserve is 
appropriate however actual claims incurred could differ from the original 
estimates requiring adjustments to the reserve 
fin 45 “guarantor’s accounting and disclosure requirements for 
guarantees including indirect guarantees of indebtedness of others” 
requires that upon issuance of a guarantee the guarantor must disclose  
and recognize a liability for the fair value of the obligation it assumes under 
that guarantee  
the requirements of fin 45 are applicable to the company’s product 
warranty liability and certain guarantees the company’s guarantees issued 
subject to the recognition and disclosure requirements of fin 45 as at 
december 31 2005 and january 1 2005 were not material as at december 
31 2005 the company’s product warranty liability recorded in other accrued 
liabilities was 107 million january 1 2005 108 million the following 
table summarizes the activity related to the product warranty liability during 
fiscal 2005 and 2004 
 
year ended 
december 31 
 2005 
 million 
year ended
january 1 
2005
 million  
balance at the beginning of the period 108  128 
provision for warranties issued 22  20 
payments 21 44
foreign currency translation 02 04 
balance at the end of the period 107  108 
provision is made for the cost of product recalls if management consider it 
probable that it will be necessary to recall a specific product and the amount 
can be reasonably estimated 
s income taxes 
current tax is the amount of tax payable or recoverable in respect of the 
taxable profit or loss for the period taxable profit differs from accounting 
profit because it excludes items of income or expense recognized for 
accounting purposes that are either not taxable or deductible for tax 
purposes or are taxable or deductible in other periods current tax is 
calculated using tax rates that have been enacted at the balance sheet date 
the company recognizes provisions in respect of uncertain tax positions 
whereby additional current tax may become payable in future periods 
following the audit by the tax authorities of previously filed tax returns 
provisions for uncertain tax positions are based upon management’s 
assessment of the likely outcome of issues associated with assumed 
permanent differences interest that may be applied to temporary 
differences the possible disallowance of tax credits and penalties and  
are classified as current liabilities provisions for uncertain tax positions  
are reviewed regularly and are adjusted to reflect events such as the expiry  
of limitation periods for assessing tax administrative guidance given by the 
tax authorities and court decisions  
deferred tax is tax expected to be payable or recoverable on differences 
between the carrying amount of an asset or a liability and its tax base used 
in the computation of taxable profit deferred tax is accounted for using  
the liability method whereby deferred tax assets and liabilities are generally 
recognised for all temporary differences based on enacted tax rates deferred 
tax assets are reduced through the establishment of a valuation allowance at 
such time as based on available evidence it is more likely than not that the 
deferred tax asset will not be realized 
deferred tax is provided on temporary differences arising on investments  
in foreign subsidiaries except where the company intends and is able  
to reinvest such amounts indefinitely  
deferred tax assets and liabilities are offset when there is a legally 
enforceable right to set off current tax assets against current tax liabilities 
and when they relate to income taxes levied by the same taxation authority 
and the company intends to settle its current tax assets and liabilities on  
a net basis 
t assets held for sale and discontinued operations  
assets are classified as held for sale if their carrying amount will be recovered 
by sale rather than by continuing use in the business for this to be the case 
the asset must be available for immediate sale in its present condition 
management must be committed to and have initiated a plan to sell the 
asset which when initiated was expected to result in a completed sale 
within twelve months an extension of the period required to complete  
the sale does not preclude the asset from being classified as held for sale 
provided the delay was for reasons beyond the company’s control and 
management remains committed to its plan to sell the asset 
 assets that are classified as held for sale are measured at the lower of their 
carrying amount and fair value less costs to sell fair value is determined 
using quoted market prices where available or estimated based on the 
expected future cash flows from the asset or asset group concerned 
discounted at a rate commensurate with the risk involved longlived  
assets classified as held for sale are no longer subject to depreciation 
assets that are to be disposed of other than by sale are classified as held and 
used until the disposal occurs  
discontinued operations comprise those operations and cash flows that can 
be clearly distinguished operationally and for financial reporting purposes 
from the rest of the company’s activities and have either been disposed  
of or satisfy the criteria to be classified as held for sale  
u reclassification of amounts reported in prior years 
certain amounts reported in prior years have been reclassified to conform  
to the presentation used in fiscal 2005  
computer software that is not integral to an item of property plant and 
equipment has been reclassified from property plant and equipment to 
other intangible assets as at january 1 2005 the carrying amount of  
such software was 86 million  
derivative financial instruments held to hedge the company’s translational 
foreign currency exposures that were previously included in the carrying 
amount of bank overdrafts were reclassified to accounts payable as at 
january 1 2005 the carrying amount of such derivative financial instruments 
was 130 million  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
138 
2 summary of significant accounting policies continued 
v use of estimates 
when applying the company’s accounting policies management must make 
assumptions and estimates concerning the future that affect the carrying 
amounts of assets and liabilities at the balance sheet date the disclosure  
of contingencies that existed at the balance sheet date and the amounts  
of revenue and expenses recognized during the accounting period estimates 
and assumptions are particularly important in accounting for postretirement 
benefits impairment of longlived assets product warranties and income 
taxes estimates and assumptions used are based on factors such as historical 
experience the observance of trends in the industries in which the company 
operates and information available from the company’s customers and other 
outside sources due to the inherent uncertainty involved in making 
assumptions and estimates actual outcomes could differ from those 
assumptions and estimates 
w nonstatutory accounts 
the accompanying financial statements do not comprise statutory accounts 
within the meaning of section 240 of the companies act 1985 the 
company’s statutory accounts for fiscal 2005 that have been prepared in 
accordance international financial reporting standards “ifrs” adopted for 
use in the european union and on which the company’s auditors deloitte  
touche llp have given an unqualified report that did not contain a 
statement under section 2372 or 3 of the companies act 1985 will be 
filed with the registrar of companies for england and wales following the 
company’s annual general meeting on may 22 2006 
 
3 recently issued accounting 
pronouncements 
a accounting pronouncements adopted during the year 
sfas 123r “sharebased payment” 
share based compensation is provided to employees under the company’s 
share option bonus and other share award plans whereby the participating 
employees receive rights over shares in tomkins plc in previous periods the 
company accounted for these plans in accordance with apb 25 “accounting 
for stock issued to employees” which required that the compensation  
cost was measured on the basis of the intrinsic value of the awards at the 
grant date  
in december 2004 the fasb issued sfas 123r “sharebased payment” 
which requires companies to measure the cost of share based compensation 
plans on the basis of the fair value of the awards sfas 123r supersedes  
apb 25 
under sfas 123r the fair value of equitysettled awards is determined at the 
date of grant and is not subsequently remeasured unless the conditions on 
which the award was granted are modified for cashsettled awards the fair 
value is determined at the date of grant and is remeasured at each balance 
sheet date until the liability is settled generally the compensation cost is 
recognised on a straightline basis over the vesting period adjustments are 
made to reflect actual and expected forfeitures during the vesting period due 
to failure to satisfy service conditions or nonmarket performance conditions  
the company adopted sfas 123r using the modified prospective method 
with an effective date of january 2 2005 whereby sfas 123r has been 
applied prospectively to the unvested portion of awards that were 
outstanding as of january 1 2005 and all awards granted modified or 
settled on or after january 2 2005 the financial impact of adopting  
sfas 123r is discussed in note 18 
b new accounting pronouncements not yet adopted 
sfas 154 “accounting changes and error corrections” 
in may 2005 the fasb issued sfas 154 “accounting changes and error 
corrections” which requires retrospective application to the financial 
statements of prior periods to reflect changes in accounting principle  
and redefines the term “restatement” as the revising of previously issued 
financial statements to reflect the correction of an error under retrospective 
application the new accounting principle is applied as at the beginning of 
the first period presented as if that principle had always been used the 
cumulative effect of the change is reflected in the carrying value of assets 
and liabilities as at the beginning of the first period presented and the 
offsetting adjustments are recorded to opening retained earnings sfas 154 
is effective for accounting changes and corrections of errors made in fiscal 
years beginning after december 15 2005 the company does not expect the 
adoption of sfas 154 to have a material effect on its consolidated financial 
position results of operations or cash flows  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
139
group – us gaap 
4 restatement of information presented in prior years  
a statements of cash flows 
subsequent to the issuance of the company’s consolidated financial statements for fiscal 2004 the united states securities  exchange commission issued 
guidance to the effect that the cash flows associated with discontinued operations should not be presented as a single line item within the consolidated 
statements of cash flows accordingly during fiscal 2005 the company changed the presentation of its statements of cash flows to include the cash flows 
from discontinued operations within the categories of operating investing and financing activities a summary of the effects of the change in presentation  
on the consolidated statements of cash flows for fiscal 2004 and fiscal 2003 is as follows 
 
year ended 
january 1 
2005 
 million 
year ended 
january 3 
2004
 million  
net cash provided by operating activities 
previously reported 5264 5509 
net cash flows from discontinued operations 87 210
restated 5351 5299 
 
net cash used in investing activities 
previously reported 2850 3554
net cash flows from discontinued operations 50 97
restated 2900 3651
 
reported net cash used in financing activities in fiscal 2004 and fiscal 2003 was unaffected by the restatement 
b statements of changes in shareholders’ equity 
subsequent to the issuance of the company’s consolidated financial statements for fiscal 2004 management determined that certain shareholders’ equity 
accounts were translated from the company’s functional currency to the reporting currency using current exchange rates rather than historical exchange rates 
as a result the consolidated statements of changes in shareholders’ equity for fiscal 2004 and fiscal 2003 and the consolidated balance sheets as at january 1 
2005 and january 3 2004 have been restated from the amounts previously reported the restatement did not have any impact on the company’s previously 
reported net income total shareholders’ equity or cash flows and may be analyzed as follows 
 as at january 1 2005  as at january 3 2004  as at december 31 2002 
 
previously 
reported
 million  
restated
 million  
previously 
reported
 million  
restated 
 million  
previously 
reported 
 million  
restated
 million 
   
common stock 743 556 693 555   623 555 
convertible cumulative preferred shares 6474 5254 6036 5254   5429 5254 
treasury shares 171 114 115 68  66 31
additional paidin capital 2080 1605 1903 1546   1615 1432 
restricted reserves 8868 7176 8268 7176   1072 957 
retained earnings 16978 16978 15211 15211   19048 19048 
   
accumulated other comprehensive loss   
– exchange translation reserve 4427 910 3655 1333  1913 1407
– other  1314 1314 1371 1371  1683 1683
 5741 2224 5026 2704  3596 3090
   
total shareholders’ equity 29231 29231 26970 26970   24125 24125 
 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
140 
 
5 acquisitions  
fiscal 2005 
industrial  automotive 
power transmission 
additional goodwill of 18 million was recognized on the acquisition of the businesses of mectrol corporation in december 2004 following completion  
of the initial accounting for the acquisition 
fluid power 
on july 1 2005 the company acquired eifeler maschinenbau gmbh “emb” a manufacturer of highperformance hydraulic tube fittings adapters and 
accessories for cash consideration including costs of €365 million 436 million provisional goodwill of 197 million arising on the acquisition was 
capitalized which is attributable to the value of emb’s assembled workforce and its well established distribution network within europe and asia in addition 
there is opportunity for significant synergies from the sale of the group’s existing products through emb’s distribution network and from the ability to offer  
a broader range of product to the company’s existing customer base 
other industrial  automotive 
on march 18 2005 the company acquired le technologies a recreational vehicle frame manufacturer for cash consideration including costs  
of 800 million goodwill of 506 million arising on the acquisition was capitalized which reflects that the acquisition provides the company with an  
extended product range enables dexter axle company inc to pre integrate its axles to vehicle frames and gives the opportunity for a number of synergies  
building products 
air systems components 
on january 27 2005 the company acquired milcor inc a multibrand manufacturer of building products for cash consideration including costs of  
429 million goodwill of 266 million arising on the acquisition was capitalized which reflects the value of the enhancement of the company’s position  
in the residential grilles registers and diffusers market as a result of the acquisition the strengthening of the company’s ability to secure sales representation  
in several key markets and the provision of growth opportunities in the commercial products portion of the market in addition the acquisition provides 
immediate access to a chinese manufacturing source and an opportunity for significant synergies 
on september 23 2005 the company acquired nrg industries inc a multi brand manufacturer of commercial building accessories for cash consideration 
including costs of 251 million provisional goodwill of 127 million arising on the acquisition was capitalized which reflects that the acquisition gave  
the company access to fully developed products that could be marketed more broadly through ruskin company and air systems components channels  
in addition the acquisition increased our presence in significant markets as well as providing opportunity for a number of manufacturing synergies 
fiscal 2004 
industrial  automotive 
power transmission 
on december 1 2004 the company acquired the polyurethane power transmission and motion control belt business assets and liabilities of mectrol corporation 
for a provisional cash consideration including costs of 460 million pending finalization of the initial accounting for the acquisition goodwill of 355 million  
was capitalized in fiscal 2004 reflecting the new technology that the acquisition brought to the company’s power transmission business and its extension of the 
company’s product and customer base additional goodwill of 18 million was recognized in fiscal 2005 
fiscal 2003 
industrial  automotive 
power transmission 
the company acquired the business assets and liabilities of stackpole limited on june 18 2003 for a cash consideration of 2579 million cdn3491 million 
goodwill of 1101 million arising on the acquisition was capitalized the acquisition brought the company expertise in powder metal and engineered 
components for its powertrain business  
building products 
air systems components 
goodwill recognized on the acquisition of johnson controls inc in fiscal 2002 was reduced by 08 million following completion of the initial accounting for 
the acquisition 
a summary of the purchase price allocation in respect of acquisitions in fiscal 2005 fiscal 2004 and fiscal 2003 is set out below 
 
 
year ended 
december 31 
2005 
 million 
year ended 
january 1 
2005
 million  
cash and cash equivalents 30 – 
other current assets 576 70 
property plant and equipment 334 40 
intangible assets 67 – 
current liabilities 211 15
longterm liabilities – – 
net assets 796 95 
goodwill capitalized 1114 355 
consideration 1910 450 
 
cash consideration 1859 453 
costs 51 07 
adjustment to consideration agreed but not received – 10
 1910 450 
none of the acquisitions effected during fiscal 2005 fiscal 2004 and fiscal 2003 were material within the meaning of sfas 141 “business combinations”  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
141
group – us gaap 
6 disposals  
fiscal 2005 
continuing operations 
industrial  automotive 
fluid power 
on july 4 2005 the business and assets of the north american curved hose business were sold for a net cash consideration of 106 million resulting  
in a gain on disposal of 14 million 
building products 
air systems components 
on september 16 2005 the business and assets of gutter helmet part of the hart  cooley residential construction business was sold for 204 million 
resulting in a gain of 162 million 
discontinued operations 
industrial  automotive 
other industrial  automotive 
on january 2 2005 unified industries inc was sold for 10 million resulting in a loss of 21 million which was fully provided for in fiscal 2004 
on february 9 2005 the business and assets of the airsprings division were sold for a net consideration of 79 million of which 50 million is deferred  
this resulted in a loss of 73 million of which 55 million was provided for in fiscal 2004 
a loss of 11 million was recognized in relation to businesses sold in previous years 
building products 
other building products 
a gain of 54 million was recognized on the receipt of additional consideration in relation to businesses sold in previous years  
fiscal 2004 
industrial  automotive 
other industrial  automotive 
on november 17 2004 the sale of the european curved hose business in nevers france was completed and the related closure of the european curved  
hose business in st just spain was also completed during fiscal 2004 net sales proceeds after costs totaled 42 million resulting in a profit on disposal  
of 19 million 
during fiscal 2004 a provision of 55 million was recognized for the expected loss on the disposal of the airsprings division and a provision of 21 million 
was recognized for the expected loss on disposal of unified industries inc both of which took place after the balance sheet date  
costs of 07 million relating to disposals recognized in prior years were incurred during fiscal 2004 
building products 
other building products 
on january 30 2004 and january 31 2004 respectively the business and assets of hattersley newman hender and pegler limited were sold for a combined 
consideration before costs of 237 million of which 105 million was deferred further net proceeds of 09 million were received after related closure costs 
and disposal of the vacant site there was a loss on sale of 170 million before the release of a provision for impairment of 391 million which was provided 
in fiscal 2003 
on june 1 2004 mayfran international inc was sold for a total consideration of 127 million of which 42 million is deferred there was a loss on sale  
of 110 million  
costs of 05 million relating to disposals recognized in prior years were incurred during fiscal 2004 
fiscal 2003 
industrial  automotive 
other industrial  automotive 
on august 22 2003 the company sold gates formedfibre products inc for a cash consideration of 470 million there was a net gain on disposal  
of 81 million after charging 117 million of goodwill and costs of 22 million 
building products 
other building products 
on january 27 2003 the company sold the business and assets of milliken valve company inc for cash consideration of 73 million resulting in a gain  
on disposal of 40 million after costs of 03 million  
on june 30 2003 tomkins sold its 624 investment in the business and assets of cobra investments pty limited for cash consideration of 125 million  
of which 28 million was deferred all of the deferred consideration has now been received a loss of 53 million was recognized on the disposal  
costs of 07 million relating to the ongoing sale of companies were incurred during fiscal 2003 
food manufacturing former operating segment 
during fiscal 2003 the company reversed a provision of 554 million in respect of representations and warranties given to the purchaser of the company’s 
uk food manufacturing business in fiscal 200201 the reversal of this provision was reflected in the 496 million gain on disposal of discontinued operations 
recognized in fiscal 2003  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
142 
6 disposals continued 
discontinued operations 
the loss from discontinued operations may be analyzed as follows 
 
year ended 
december 31 
2005 
 million 
year ended 
january 1 
2005
 million 
net sales 19 851 
operating income 01 106
income before taxes minority interest and equity in net income of associates 01 98
income taxes 01 42
minority interest – – 
equity in net income of associates – 05 
loss from discontinued operations – 135
assets held for sale 
assets held for sale and directly associated liabilities were as follows 
 
as at 
december 31 
2005 
 million 
as at 
january 1 
2005
 million  
assets 
– accounts receivable – 12 
– inventories – 38 
– prepaid expenses and other assets – 02 
– property plant and equipment 230 566 
total assets held for sale 230 618 
liabilities 
– accounts payable – 04
– other current liabilities – 02
total liabilities related to assets held for sale – 06
net assets of discontinued operations 230 612 
assets held for sale as at december 31 2005 comprise vacant properties no longer required by the company for its manufacturing operations during fiscal 
2005 the company recognized an impairment loss of 96 million on properties classified as held for sale following the decision to close the wiper systems 
plant in pontypool wales assets held for sale as at january 1 2005 comprise vacant properties and the assets of the airsprings division and unified industries 
inc that were sold in fiscal 2005 assets held for sale were held by the following operating segments  
 
as at 
december 31 
2005 
 million 
as at 
january 1 
2005
 million  
industrial  automotive 
– power transmission 27 115 
– fluid power – – 
– wipers 78 – 
– fluid systems 01 – 
– other industrial  automotive – 204 
 106 319 
building products 
– air systems components 51 60  
– other building products 13 13 
 64 73 
central costs 60 28 
discontinued operations – 192 
 230 612 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
143
group – us gaap 
6 disposals continued 
during fiscal 2003 management decided to sell dearborn midwest conveyor company “dearborn” and it was classified as a discontinued operation as at 
january 3 2004 however management was unable to secure a sale at an acceptable price and dearborn was withdrawn from active sale and reclassified as  
a continuing operation during fiscal 2004 dearborn’s net income for fiscal 2004 and fiscal 2003 was as follows  
 
year ended 
january 1 
2005 
 million 
year ended 
january 3 
2004
 million  
net sales 1180 960 
operating income 59 33 
income before taxes 59 33 
income taxes 09 10
net income 50 23 
 
7 segment information 
a background 
prior to fiscal 2005 the company prepared its home country consolidated financial statements in accordance with united kingdom generally accepted 
accounting principles “uk gaap” during fiscal 2005 the company adopted international financial reporting standards “ifrs” adopted for use in the 
european union with a transition date of january 4 2004 accordingly the company’s home country consolidated financial statements for fiscal 2004 that 
were previously reported in accordance with uk gaap were restated in accordance with ifrs  
sfas131 “disclosures about segments of an enterprise and related information” requires segment information provided in financial statements to reflect the 
information that was provided to the chief operating decision maker for purposes of making decisions about allocating resources within the company and 
assessing the performance of each segment the chief operating decision maker bases such decisions on operating income before restructuring initiatives and 
operating net assets during fiscal 2005 the information provided to the chief operating decision maker was prepared in accordance with ifrs and during 
fiscal 2004 and fiscal 2003 it was prepared in accordance with uk gaap accordingly the segment information presented below for fiscal 2005 is prepared in 
accordance with ifrs and that for fiscal 2004 and fiscal 2003 is prepared in accordance with uk gaap to assist comparison of segment information for fiscal 
2005 with that for fiscal 2004 management has additionally presented segment information for fiscal 2004 prepared in accordance with ifrs  
the company’s reportable segments are based upon the nature of their products and services effective january 2 2005 the company changed the structure 
of its internal organization reflect the changing focus of its operations segment information for fiscal 2004 and fiscal 2003 has been represented to reflect the 
resulting change in the company’s reportable segments 
the information provided to the chief operating decision maker is presented in sterling in the tables that follow sterling amounts have been translated into  
us dollars amounts for fiscal 2005 have been translated at the average exchange rate for the period of £ 18156 fiscal 2004 £18257 amounts as  
at december 31 2005 have been translated at the closing exchange rate on that date of £17168 january 1 2005 £19199 
b segment analysis by business segment – continuing operations 
 ifrs  uk gaap 
 
year ended 
december 31 
2005
 million 
year ended  
january 1  
2005 
 million   
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million 
net sales   
industrial  automotive   
– power transmission 17610 16681   16681 14519 
– fluid power 6500 5910   5910 5011 
– wipers 4249 4631   4631 4633 
– fluid systems 4181 4163   4163 3617 
– other industrial  automotive 9194 8458   8458 8349 
 41734 39843   39843 36129 
building products   
– air systems components 8813 7723   7723 7303 
– other building products 7233 6733   6733 6681 
 16046 14456   14456 13984 
discontinued operations – –   113 1257 
 57780 54299   54412 51370 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
144 
7 segment information continued 
there were no material sales or transfers between segments in any period 
 ifrs  uk gaap 
 
year ended 
december 31 
2005
 million 
year ended 
january 1  
2005 
 million   
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million 
operating income before restructuring initiatives   
industrial  automotive   
– power transmission 2348 2503   2541 2250 
– fluid power 666 623   544 293 
– wipers 196 276   208 338 
– fluid systems 310 438   444 382 
– other industrial  automotive 1106 864   524 471 
 4626 4704   4261 3734 
building products   
– air systems components 908 869   862 690 
– other building products 519 414   385 394 
 1427 1283   1247 1084 
central costs 452 431  433 391
discontinued operations – –   02 05 
 5601 5556   5077 4432 
restructuring initiatives comprise restructuring expenses and gains and losses recognized on the disposal or exit of businesses  
operating income before restructuring initiatives under uk gaap in fiscal 2004 is stated before goodwill amortization of 228 million fiscal 2003 –  
194 million goodwill amortization is not recognized under ifrs 
operating income before restructuring initiatives includes income from associates as follows 
 ifrs  uk gaap 
 
year ended 
december 31 
2005
 million 
year ended  
january 1  
2005 
 million   
year ended 
january 1 
 2005 
 million 
year ended
january 3 
2004
 million 
associates   
industrial  automotive   
– power transmission 05 04   04 04 
– fluid systems 05 02   03 02 
– other industrial  automotive – 03   05 05 
 10 09   12 11 
building products   
– other building products – 05   07 04 
 10 14   19 15  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
145
group – us gaap 
7 segment information continued 
 ifrs  uk gaap 
 
as at 
december 31 
2005
 million 
as at  
january 1  
2005 
 million   
as at 
january 1 
 2005 
 million 
as at
january 3 
2004
 million 
operating net assets including goodwill   
industrial  automotive   
– power transmission 9808 9698   10241 8632 
– fluid power 2838 1709   2140 1935 
– wipers 2700 3020   2601 2569 
– fluid systems 2016 1857   1900 1756 
– other industrial  automotive 1379 1126   2017 1271 
 18741 17410   18899 16163 
building products   
– air systems components 4457 3684   3780 3924 
– other building products 1236 1252   1211 1442 
 5693 4936   4991 5366 
central costs 330 90  218 29 
discontinued operations – 75  75 236 
 24104 22181   24033 21794 
 
 ifrs  uk gaap 
 
year ended 
december 31 
2005
 million 
year ended  
january 1  
2005 
 million   
year ended 
january 1 
 2005 
 million 
year ended
january 3 
2004
 million 
depreciation and amortization   
industrial  automotive   
– power transmission 870 759   759 702 
– fluid power 238 232   232 246 
– wipers 178 214   214 223 
– fluid systems 267 259   259 212 
– other industrial  automotive 174 188   188 236 
 1727 1652   1652 1619 
building products   
– air systems components 254 267   267 268 
– other building products 172 190   190 205 
 426 457   457 473 
central costs 09 07   07 05 
 2162 2116   2116 2097 
 
 ifrs  uk gaap 
 
year ended 
december 31 
2005
 million 
year ended  
january 1  
2005 
 million   
year ended 
january 1 
 2005 
 million 
year ended
january 3 
2004
 million 
expenditures for additions to longlived assets   
industrial  automotive   
– power transmission 1234 1560   1560 765 
– fluid power 372 420   420 346 
– wipers 120 93   93 116 
– fluid systems 285 281   281 328 
– other industrial  automotive 160 215   215 300 
 2171 2569   2569 1855 
building products   
– air systems components 234 144   144 142 
– other building products 198 159   159 293 
 432 303   303 435 
central costs – 07   07 11 
 2603 2879   2879 2301  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
146 
7 segment information continued 
c  reconciliation of segment information to us gaap 
reconciliations of the company’s sales operating income and operating net assets determined in accordance with ifrs and uk gaap analyzed by segment  
to the equivalent amounts determined in accordance with us gaap are presented below  
  ifrs  uk gaap 
 note 
year ended 
december 31 
2005
 million 
year ended  
january 1  
2005 
 million   
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million 
net sales  57780 54299   54412 51370 
reclassification   
– discontinued operations ia 20 738  851 2896
net sales us gaap 57760 53561   53561 48474 
   
operating income before restructuring initiatives  5601 5556   5077 4432 
restructuring expenses 369 374  319 585
 5232 5182   4758 3847 
reclassifications   
– discontinued operations ia – 68   66 219 
– gain on disposal of continuing operations ib 191 57   57 07 
– associates ic 12 15  19 15
accounting differences   
– goodwill impairment  ii – –   – 125
– acquired intangibles amortization iii 51 53  53 26
– product development costs iv 07 –   – – 
– restructuring expenses v 09 09  22 34 
– capitalized interest vi 42 35  35 31
– inventory vii 85 16  16 44
– postretirement benefits viii 342 448   09 55 
– sharebased compensation ix 25 40   26 65
operating income from continuing operations us gaap 4850 4771   4771  3856 
interest income 104 115   115 158 
interest expense 348 349  349 302
other income net 652 440   440 548 
income from continuing operations before taxes minority interest 
and equity in net income of associates 3954 4977   4977 4260 
   
depreciation and amortization 2162 2116   2116 2097 
accounting differences   
– acquired intangible assets iii 51 53   53 26 
– restructuring costs  v – –   – 13
– capitalized interest  vi 42 35   35 31 
depreciation and amortization us gaap 2255 2204   2204 2141 
restructuring initiatives comprise restructuring expenses and gains and losses recognized on the disposal or exit of businesses 
 
 
 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
147
group – us gaap 
7 segment information continued 
  ifrs  uk gaap 
 note 
as at 
december 31 
2005
 million 
as at  
january 1 
 2005 
 million   
as at 
january 1 
2005
 million 
as at
january 3 
2004
 million 
operating net assets including goodwill ifrsuk gaap 24104 22181   24033 21794 
reclassifications   
– associates ic 76 71   71 102 
– investments id 38 31   31 30 
– dividend on preferred shares ie 36 –   36 39
accounting differences   
– goodwill net ii 13230 13177   13411 13188 
– acquired intangibles net iii 376 491   491 439 
– product development costs iv 07 –   – – 
– restructuring expenses v 07 15   15 233 
– capitalized interest net vi 412 328   328 242 
– inventory vii 142 58  58 41
– postretirement benefits  viii 28 04   1942 2278
– sharebased compensation ix – 55   27 13 
– derivative financial instruments  x – 31   45 72
operating net assets including goodwill us gaap 38030 36326   36326 33611 
   
operating net assets including goodwill under us gaap comprise   
– current assets excluding cash and taxes 17689 17196   17196 16285 
– longterm assets excluding taxes 34554 33333   33333 31923 
– current liabilities excluding debt and taxes 8383 8263  8263 8130
– longterm liabilities excluding debt and taxes 5588 5879  5879 6379
 38272 36387   36387 33699 
less fair value of derivatives hedging translational exposures  242 61  61 88
operating net assets including goodwill us gaap 38030 36326   36326 33611 
an explanation of the significant differences between us gaap ifrs and uk gaap that affect the company’s reported sales operating income and operating 
net assets is presented below 
i classification differences 
a discontinued operations 
under us gaap and ifrs net income from discontinued operations is shown as a separate line item below net income from continuing operations although 
there is commonality of presentation differences in the amounts included within sales and operating income from continuing operations arise from the 
definition of a discontinued operation  
under us gaap a discontinued operation is any component of an entity that has identifiable operations and cash flows and has been sold or is classified as 
held for sale at the balance sheet date under ifrs a discontinued operation is an operation that has been sold or is classified as held for sale at the balance 
sheet date and itself represents or its sale is part of a single plan to dispose of a separate major line of business or geographical area of operations 
accordingly more operations are likely to be classified as discontinued under us gaap than under ifrs 
under uk gaap the income and expenses of discontinued operations were included in the line item to which they related but their contribution to certain line 
items was disclosed either on the face of the income statement or in the notes to the financial statements sales and operating income information provided to 
the chief decision maker included the contribution of discontinued operations  
b gain on disposal of continuing operations 
under uk gaap gains on disposal of continuing operations were described as nonoperating exceptional items and were shown separately within the income 
statement after operating income  
under us gaap and ifrs there is no concept of a nonoperating exceptional item and items that would have been classified as such under uk gaap are 
included in operating income  
c associates 
under us gaap operating income does not include any amounts in respect of the company’s associates 
under ifrs operating income includes the company’s share of the net income of its associates  
under uk gaap operating income included the company’s share of the income before taxes and nonoperating exceptional items of its associates 
under us gaap the company’s investments in associates accounted for using the equity method are included in operating assets but they are were not 
included under ifrs and uk gaap  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
148 
7 segment information continued 
i classification differences continued 
d investments 
under us gaap availableforsale investments are included in operating assets but they are were not included under ifrs and uk gaap 
e dividends on preferred shares 
under us gaap accrued dividends on preferred shares are included in operating net assets 
under ifrs from january 2 2005 onwards accrued dividends on preferred shares are included in net debt and are therefore excluded from operating  
net assets 
under uk gaap accrued dividends on preferred shares were not included in operating net assets 
ii goodwill 
under both us gaap and ifrs goodwill is not amortized but is tested at least annually for impairment however a significant difference exists in the carrying 
value of goodwill due largely to historical differences in the initial measurement and subsequent accounting for goodwill arising on past acquisitions  
under ifrs the company elected not to apply ifrs 3 “business combinations” to business combinations that occurred before january 4 2004 as a result  
the company recognized goodwill amounting to 3879 million as at january 3 2004 which represented the carrying value of goodwill recognized under uk 
gaap on acquisitions completed on or after may 3 1998 goodwill arising on acquisitions completed before may 3 1998 amounting to 18882 million was 
written off to reserves under uk gaap and was not reinstated on adoption of ifrs under us gaap the carrying value of goodwill as at january 3 2004 was 
17067 million 
under uk gaap capitalized goodwill was amortized over its estimated useful economic life not exceeding 20 years and was tested for impairment whenever 
circumstances indicated that it may have suffered an impairment loss  
iii acquired intangible assets 
under both ifrs and us gaap intangible resources acquired in business combinations that occurred on or after january 4 2004 are recognized as intangible 
assets if they are separable from the acquired business or arise from contractual or legal rights however a significant difference exists in the carrying value of 
acquired intangible assets due largely to the differing treatment of intangible resources acquired in past acquisitions  
as a consequence of the decision not to apply ifrs 3 “business combinations” to business combinations that occurred before january 4 2004 intangible 
resources acquired in those business combinations are not recognized as intangible assets under ifrs under us gaap the carrying value of acquired 
intangible assets as at january 3 2004 was 409 million  
acquired intangible assets are amortized under both us gaap and ifrs but the amortization charge under ifrs is likely to be lower than under us gaap  
due to the lower carrying amount of these assets under ifrs 
under uk gaap intangible resources acquired in business combinations were recognized separately from goodwill only if they were separable from  
the acquired business and arose from contractual or legal rights the company had not recognized any acquired intangible assets under uk gaap 
iv product development costs  
under us gaap product development costs are charged to income in the period in which they are incurred 
under ifrs certain product development costs are capitalized when the conditions specified by ias 38 “intangible assets” are met capitalized development 
costs are amortized to the income statement over the expected life of the resulting product 
under uk gaap product development costs were charged to income in the period in which they are incurred 
v restructuring expenses 
under us gaap each component of a restructuring plan must be examined separately to determine when the related expenses may be recognized 
involuntary employee termination costs may be recognized when management has committed to a detailed termination plan and has communicated the plan  
to employees other restructuring expenses are generally recognized when they are incurred  
under ifrs and uk gaap a restructuring plan is or was viewed as a whole and the related expenses are or were recognized when there exists an obligation 
to carry out the restructuring which is generally when a detailed formal restructuring plan is announced 
vi capitalized interest  
under us gaap interest costs attributable to funding the construction of major items of property plant and equipment are capitalized and amortized over the 
estimated useful life of the asset concerned 
under ifrs and uk gaap the company does or did not capitalize any element of its interest costs  
vii inventory 
under us gaap inventories are stated at the lower of cost and market value cost is generally determined on a fifo basis but a last in first out “lifo”  
basis is used to determine the cost of inventory held by certain us subsidiaries 
under ifrs and uk gaap use of the lifo basis is or was prohibited 
viii postretirement benefits 
under us gaap ifrs and uk gaap the cost of defined benefit plans is or was calculated using the projected unit credit method and is or was recognized 
over the average expected remaining service lives of participating employees but there are or were significant differences with regard to the methods and 
assumptions that must be used for valuing plan assets and benefit obligations and for recognizing gains and losses  
under us gaap the net periodic pension cost is charged wholly to operating income  
under ifrs the service cost past service cost and gains and losses on settlements and curtailments are included within operating income but the interest cost 
is included in interest expense the expected return on plan assets is included in interest income and actuarial gains and losses are recognized directly in equity 
under both us gaap and ifrs the net benefit obligation is recognized as a liability but the amounts recognized differ due largely to different methods of 
recognizing surpluses and deficits   consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
149
group – us gaap 
7 segment information continued 
under us gaap actuarial gains and losses are amortized over the remaining service lives of participating employees to the extent that measured at  
the beginning of each fiscal year they exceed 10 per cent of the greater of the market related value of the plan assets or the projected benefit obligation 
under ifrs actuarial gains and losses are recognized in equity in the period in which they occur 
under ifrs where a plan is in surplus the asset recognized is limited to the amount of any unrecognized past service costs and the present value of any 
amount which the company expects to recover by way of refunds or a reduction in future contributions under us gaap there is no restriction on the asset 
recognized in respect of a plan in surplus 
under us gaap a minimum pension liability must be recognized that represents the amount by which the accumulated benefit obligation ignoring projected  
future salary increases exceeds the fair value of the plan assets a corresponding amount is recognized as an intangible asset to the extent of any 
unrecognized prior service cost and any recognized transition obligation and the balance is recognized in comprehensive income under ifrs there is no 
equivalent requirement to recognize a minimum pension liability because the net liability is fully recognized on the balance sheet 
under uk gaap the net periodic pension cost was charged wholly to operating income and consisted of the regular cost and variations from the regular cost 
arising from actuarial gains and losses and retroactive changes in benefits that were aggregated and amortized over the expected remaining service lives of the 
active participants in the plan gains and losses on settlements and curtailments were generally recognized in the period in which they occurred and if they 
related to the disposal or exit of businesses were included in nonoperating exceptional items 
under uk gaap the net benefit obligation was not recognized as a liability 
ix sharebased compensation 
under us gaap the company accounts for sharebased compensation plans using the fair value method prescribed by sfas 123r “sharebased payment” 
sfas 123r was applied prospectively to the unvested portion of awards that were outstanding as at january 1 2005 and all awards granted modified or 
settled on or after january 2 2005 prior to january 2 2005 the company accounted for its stock based compensation plans using the intrinsic value method 
prescribed by apb 25 “accounting for stock issued to employees” 
under ifrs the company accounts for sharebased compensation plans using the fair value method prescribed by ifrs 2 “ sharebased payment” ifrs 2 was 
applied retrospectively to all awards that were outstanding but had not vested as at january 1 2005 except those equitysettled awards that were granted on 
or before november 7 2002 
while differences between the compensation expense recognized under ifrs and us gaap will exist in the mediumterm it is expected that they will be 
eliminated in future years when the outstanding unvested equitysettled awards granted on or before november 7 2002 either vest or are forfeited due to 
failure to meet the service or nonmarket performance conditions that apply to them  
under uk gaap the company accounted for sharebased compensation using the intrinsic value method specified by uitf 17”employee share schemes” 
which differed in certain respects from that specified by apb25 in particular awards made under the company’s savingsrelated share option plan were 
regarded as noncompensatory under uitf17 whereas they were regarded as compensatory under apb25 and the compensation expense relating to deferred 
shares awarded under the company’s annual bonus plan was recognized at the grant date under uitf17 whereas it was recognized over the applicable vesting 
period under apb25  
x derivative financial instruments 
under us gaap derivative financial instruments are recognized as assets and liabilities measured at their fair values at the balance sheet date and in the 
absence of hedge accounting changes in their fair values are reflected immediately in income 
under ifrs prior to january 2 2005 and under uk gaap derivative financial instruments were not generally recognized as assets and liabilities on the balance 
sheet and gains or losses arising on them were not recognized until the hedged item was itself recognised in the financial statements  
under ifrs from january 2 2005 onwards derivative financial instruments are recognised as assets and liabilities measured at their fair values at the balance 
sheet date and in the absence of hedge accounting changes in their fair values are reflected immediately in income  
under us gaap and ifrs the company applies hedge accounting in certain circumstances where it is permissible to do so under the applicable accounting 
standards fair value gains and losses on derivative financial instruments held to hedge translational exposures that are reflected in income because they do  
not qualify for hedge accounting are included in other income and do not affect operating income 
d selected geographic information 
 us gaap 
 
year ended  
december 31 
2005 
 million 
year ended 
january 1 
 2005 
 million 
year ended
january 3 
 2004
 million 
net sales by geographic origin  
united states of america 38538  34897 32876 
united kingdom 2965  3233 2586 
rest of europe 5668  5395 4681 
rest of the world 10589  10036 8331 
 57760  53561 48474 
longlived assets by geographic location  
united states of america 7290  7185 7600 
united kingdom 985  1305 1253 
rest of europe 1604  1653 1557
rest of the world 4788  4387 3408
 14667  14530 13818 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
150 
7 segment information continued 
e information about major customers 
the company has a significant concentration of customers in the united states of america who accounted for 689 2004 675 2003 672 of the 
company’s sales during the period and in the industrial and automotive industry which accounted for 722 2004 734 2003 703 of the company’s 
sales during the period no single customer accounted for more than 10 per cent of the companys sales and there were no significant accounts receivables 
from a single customer the company reviews a customers credit history before extending credit the company establishes an allowance for doubtful 
accounts based upon factors surrounding the credit risk of specific customers historical trends and other information 
 
8 income taxes 
a analysis of income tax expensebenefit 
income tax expensebenefit by location of taxing jurisdiction is as follows 
 
year ended 
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million  
year ended 
january 3 
2004
 million 
current tax  
united kingdom 345 309 1488
united states – federal taxes 334 435 299 
united states – state taxes 169  52 52 
other foreign taxes 626  518 487 
total current tax 116  696 650
deferred tax  
united kingdom 207  02 147
united states – federal taxes 461  317 164 
united states – state taxes 39  47 33 
other foreign taxes 135 30 122
total deferred tax 572  336 72
  
total income tax expensebenefit 688  1032 722
fiscal 2005 
under the american jobs creation act of 2004 “ajca” in the united states the company had the opportunity to benefit from a onetime repatriation of 
cash to the united states at a reduced tax rate during fiscal 2005 the company repatriated 759 million to the united states under the ajca on which it 
incurred a tax charge of 38 million 
in fiscal 2005 there was a release of provisions for uncertain tax positions of 1066 million following the successful resolution of a tax issue in the united 
states the expiry of time during which tax audits could be performed in certain tax jurisdictions and the change of views on the likely outcome of challenges 
by various tax authorities  
fiscal 2004 
in fiscal 2004 the company reached agreement with the us internal revenue service with respect to the examination of the tax returns of one of its 
subsidiaries for fiscal years 1999 2000 and 2001 as a result tax provisions of 274 million were no longer considered necessary and were released to  
the income statement in fiscal 2004 
fiscal 2003 
during fiscal 2003 following an extensive tax risk management study the company implemented a new methodology to estimate its provision for uncertain 
tax positions the principal change from the methodology used in prior periods was that the provision recognized was not assessed against a “portfolio” of tax 
exposures but instead provisions for uncertain tax positions were made on an itembyitem basis as a result there was a reduction of 1479 million in the 
company’s provision for uncertain tax positions which was released to the income statement in fiscal 2003  
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
151
group – us gaap 
8 income taxes continued 
b reconciliation of income tax expensebenefit to income tax charged at statutory tax rate 
the income tax expensebenefit for the period differs from the product of income from continuing operations before taxes minority interest and equity in net 
income of associates and the rate of united kingdom corporation tax as follows 
 
year ended  
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million  
year ended 
january 3 
 2004
 million  
income from continuing operations before taxes minority interest and equity in net income of associates 3954  4977 4260 
  
united kingdom corporation tax at 30 2004 30 200330 1187  1493 1278 
tax effect of  
permanent differences 774  185 246
effect of different tax rates on overseas profits 203  08 114
release of provisions for uncertain tax positions 1066 274 1479
utilization of losses not previously recognized 730 69 – 
change in deferred tax valuation allowance 576  59 86
foreign tax credits 256 – 75
income tax expensebenefit 688  1032 722
c analysis of deferred tax assetsliabilities 
deferred tax assetsliabilities recognized by the company were as follows 
 
as at 
december 31 
2005 
 million 
as at 
january 1 
2005
 million 
deferred tax assets 
net operating losses 6157  5521 
pension and other post retirement obligations 1596 1650 
capital loss carry forwards 1471 1598 
accrued expenses and other 456 487 
compensation 388 321 
tax credits 295 133 
accounts receivable 70 57 
other 104 101 
 10537 9868 
valuation allowance 7914 6849
total deferred tax assets 2623 3019 
deferred tax liabilities 
property plant and equipment 1099 1056
inventories 397 388
intangible assets 353 287
other 120 165
total deferred tax liabilities 1969 1896
 
net deferred tax assets 654 1123 
as at december 31 2005 the company had operating tax losses amounting to 20638 million of which 19882 million can be carried forward indefinitely 
and 756 million have expiry dates between 2006 and 2019 as at december 31 2005 the company recognized a deferred tax asset of 263 million in 
respect of these losses net of a valuation allowance of 5894 million 
as at december 31 2005 the company had capital tax losses amounting to 4916 million of which 4905 million can be carried forward indefinitely  
and 11 million expire in 2009 as at december 31 2005 the company recognized a deferred tax asset of 16 million in respect of these losses net  
of a valuation allowance of 1455 million 
as at december 31 2005 the undistributed earnings of foreign subsidiaries amounted to 33458 million january 1 2005 – 28488 million no  
income taxes have been provided on the companys share of these undistributed earnings due to managements ability and intent to reinvest such  
amounts indefinitely a determination of the amount of the unrecognized deferred tax liability has not been made because it is not practical to do so  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
152 
  
9 income per common share 
basic income per common share represents net income divided by the weighted average number of common shares outstanding during the fiscal year  
diluted income per common share considers the effect of potential common shares unless the inclusion of the potential common shares would have  
an antidilutive effect 
 
year ended  
december 31 
2005 
number 
000 
year ended 
january 1 
2005 
number 
000 
year ended 
january 3 
2004 
number 
000 
weighted average shares used to calculate basic earnings per share 771427  770717 771037 
assumed conversion of convertible preferred shares 102375  102651 180917 
assumed exercise of share options 2339  3931 2034 
adjusted weighted average shares used to calculate diluted earnings per share 876141  877299 953988 
share options numbering 1883396 fiscal 2004 8226950 fiscal 2003 12941950 with an exercise price higher than the average market price during  
the fiscal year were excluded in computing diluted earnings per share since the impact would be antidilutive for the purposes of diluted earnings per share  
the income is increased for the dividend on the preferred shares of 291 million fiscal 2004 285 million fiscal 2003 471 million 
 
10 inventories 
 
 
as at 
december 31 
2005 
 million 
as at 
january 1 
2005
 million  
raw materials and supplies 2533 2379 
work in progress 1064  870 
finished goods and goods held for resale 4038 3846 
total inventories – current cost 7635 7095 
less excess of fifo over lifo cost 142 57
 7493 7038 
 
11  property plant and equipment 
 
 
as at 
december 31 
2005 
 million 
as at 
january 1 
2005
 million 
cost 
– freehold land  6100 5831 
– long leasehold land and buildings 39 04 
– short leasehold land and buildings 182 186 
– plant equipment and vehicles 22044 20480 
– assets under construction 1671 2002 
 30036 28503 
less accumulated depreciation 15369 13973
total 14667 14530 
freehold land amounting to 694 million january 1 2005 – 754 million is not depreciated depreciation expense was 2161 million for fiscal 2005 
2060 million for fiscal 2004 and 2076 million for fiscal 2003  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
153
group – us gaap 
 
12 goodwill 
 
 
as at 
january 1
2005
 million 
acquisition of 
subsidiaries 
 million  
foreign 
 currency 
translation 
 million 
as at 
 december 31 
2005
 million  
year ended december 31 2005  
industrial  automotive  
– power transmission 6810 18  29 6857 
– fluid power 874 197  05 1066 
– wipers 1670 –  – 1670 
– fluid systems 2573 –  – 2573 
– other industrial  automotive 1302 506  – 1808 
 13229 721  24 13974 
building products  
– air systems components 3338 393  12 3719 
– other building products 956 –  – 956 
 4294 393  12 4675 
 17523 1114  12 18649 
 
 
as at 
january 3 
2004
 million 
acquisition of 
subsidiaries 
 million  
foreign 
 currency 
translation 
 million 
as at 
january 1 
 2005
 million  
year ended january 1 2005  
industrial  automotive  
– power transmission 6362 355  93 6810 
– fluid power 872 –  02 874 
– wipers 1670 –  – 1670 
– fluid systems 2574 –  01 2573 
– other industrial  automotive 1303 –  01 1302 
 12781 355  93 13229 
building products  
– air systems components 3330 –  08 3338 
– other building products 956 –  – 956 
 4286 –  08 4294 
 17067 355  101 17523 
in fiscal 2003 an impairment loss of 539 million was recognized of which 125 million related to lasco fittings inc and was included in income from 
continuing operations and 414 million related to the company’s valves taps and mixers businesses and was included in loss from discontinued operations 
 
13  intangible assets 
 
 as at december 31 2005  as at january 1 2005 
 
cost
 million 
accumulated 
amortization
 million 
net
 million  
cost 
 million 
accumulated 
amortization 
 million 
net
 million 
patents and technology 91 91 – 91  91 – 
customer relationships 353 105 248 300  63 237 
intellectual property 203 38 165 203  22 181 
noncompetition agreement 21 – 21 –  – – 
capitalized software 922 615 307 615  529 86 
 1590 849 741 1209  705 504 
pension intangible asset not subject to 
amortization 66 – 66 73  – 73 
total intangible assets 1656 849 807 1282  705 577 
 
 
 
 
 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
154 
13 intangible assets continued 
during fiscal 2005 the amortization expense in respect of intangible assets was 94 million fiscal 2004144 million fiscal 2003 65 million estimated 
amortization expense for the following five years is as follows 
  million 
fiscal year 
– 2006 131 
– 2007 131 
– 2008 131 
– 2009 127 
– 2010 127 
 
 
14  bank overdrafts bank and other loans 
 
 as at december 31 2005  as at january 1 2005 
 
current 
liabilities
 million 
noncurrent 
liabilities
 million 
total
 million  
current  
liabilities 
 million 
noncurrent 
liabilities
 million 
total
 million 
bank overdrafts 179 – 179  125  – 125 
bank and other loans   
– bank loans – secured 53 – 53  54  – 54 
– bank loans – unsecured 383 2050 2433  84  35 119 
– other loans – unsecured 77 6985 7062  46  7636 7682 
– unsecured loan notes 05 – 05  06  – 06 
 518 9035 9553  190  7671 7861 
 697 9035 9732  315  7671 7986 
borrowings are repayable as follows 
 
as at 
december 31 
2005 
 million 
as at
january 1 
2005 
 million 
current liabilities 
– on demand or within one year 697 315 
noncurrent liabilities 
– in the second year – 17 
– in the third year – 18 
– in the fourth year – – 
– in the fifth year 2055 – 
– after more than five years 6980 7636 
 9035 7671 
 9732 7986 
bank loans 
bank loans are principally amounts drawn down under the company’s £400 million multicurrency revolving credit facility as at december 31 2005  
2058 million january 1 2005   nil had been drawn down including tranches denominated in us dollars totaling 1750 million borrowings under the 
facility attract interest at floating rates determined by reference to libor and the weighted average rate payable was 48 as at december 31 2005 
other loans 
the company has a euro medium term note program under which it may borrow up to a total maximum principal amount of £750 million so far two bonds 
have been issued under this program £150 million repayable at par on december 20 2011 that bears interest at a fixed rate of 8 and £250 million repayable 
at par on september 16 2015 that bears interest at a fixed rate of 6125  
the carrying amount of other loans may be analyzed as follows 
 
as at 
december 31 
2005 
 million 
as at
january 1 
2005
 million 
principal amount  6867 7680 
accrued interest payable 84 50 
unamortized transaction costs 37 48
carrying amount before hedge accounting 6914 7682 
fair value hedge adjustment note 15 148 – 
carrying amount 7062 7682 
unsecured loan notes 
the unsecured loan notes must be repaid at par on june 30 2012 until that time in certain circumstances the note holders have the right to require full  
or part repayment at par half yearly on june 30 and december 31 and for this reason they are classified as current liabilities the unsecured loan notes bear 
interest at a fixed rate of 26   consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
155
group – us gaap 
14 bank overdrafts bank and other loans continued 
borrowing facilities 
as at december 31 2005 the company had undrawn committed borrowing facilities of 4809 million january 1 2005 – 7680 million available under the 
multicurrency revolving credit facility that expires on august 8 2010 
borrowing covenants 
the company is subject to covenants representations and warranties commonly associated with investment grade borrowings in respect of its committed 
borrowing facilities and borrowings under the euro medium term note program  
the company is subject to two financial covenants in respect of its committed borrowing facilities the ratio of net debt to consolidated earnings before 
interest tax depreciation and amortization must not exceed 25 times and the ratio of consolidated operating profit to the consolidated net interest charge 
must not be less that 30 times the financial covenants are calculated by applying “frozen” uk gaap as at december 31 2002  
 
15  derivative financial instruments 
a summary  
the carrying amount of derivative financial instruments held by the company was as follows 
 as at december 31 2005  as at january 12005 
 
assets
 million 
liabilities
 million 
net
 million  
assets 
 million 
liabilities
 million 
net
 million 
translational hedges     
– currency forwards  02 139 137 –  130 130
– interest rate swaps 379 – 379 191  – 191 
 381 139 242 191  130 61 
transactional hedges  
– currency forwards and swaps 48 15 33 02  – 02 
 429 154 275 193  130 63 
classified as  
– current 89 154 65 07  130 123
– noncurrent 340 – 340 186  – 186 
 429 154 275 193  130 63 
the company does not hold or issue derivatives for speculative or trading purposes  
the company ensures that its portfolio of derivative financial instruments is managed such that there is no significant concentration of credit risk in any one 
bank or other financial institution  
b currency derivatives 
as at december 31 2005 the notional principal amount of outstanding foreign exchange contracts that are used to manage the currency profile of the 
company’s net assets was 7059 million january 1 2005 7083 million these contracts do not qualify for hedge accounting under sfas133 “accounting 
for derivative instruments and hedging activities“ and in fiscal 2005 the net fair value loss on these contracts of 627 million was recognized in other 
expenseincome fiscal 2004 net fair value gain of 222 million fiscal 2003 net fair value gain of 570 million 
during fiscal 2005 the company drewdown usdollar denominated borrowings under its multicurrency revolving credit facility which had the effect of 
providing an economic hedge of the translational currency exposures arising on its net investment in certain of its subsidiaries whose functional currency is the 
us dollar as at december 31 2005 the amount of usdollar denominated borrowings outstanding under the facility was 1750 million these borrowings 
do not qualify for hedge accounting under sfas133 and in fiscal 2005 the attributable foreign currency translation loss of 95 million was recognized in 
other expense also in fiscal 2005 a net gain of 10 million was recognized within other income in respect of other currency translation hedges that did  
not qualify for hedge accounting under sfas133 fiscal 2004 nil fiscal 2003 nil 
in fiscal 2005 a net fair value gain of 06 million was recognized within operating income in respect of currency derivatives that were held to provide  
an economic hedge of transactional currency exposures but were not designated as hedges for accounting purposes fiscal 2004 net fair value gain of  
26 million fiscal 2003 net fair value gain of 26 million 
c interest rate swaps 
interest rate swaps are used to swap borrowings under the company’s euro medium term note program from fixed interest rates to floating interest rates as 
at december 31 2005 the nominal value of the contracts outstanding was 6867 million january 1 2005 7680 million the company had not previously 
elected to designate these contracts as fair value hedges in accordance with sfas133 but during fiscal 2005 they were so designated and were subsequently 
considered to be effective hedges for accounting purposes as at december 31 2005 an adjustment of 148 million was made to the carrying amount of the 
hedged borrowings to reflect the extent to which the swaps provided an effective hedge against fair value interest rate risk  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
156 
15 derivative financial instruments continued 
interest rate swaps are also used to restrict the amount of floating rate us dollar debt as at december 31 2005 the nominal value of these contracts held 
was 420 million january 1 2005  210 million including contracts with a nominal value of 210 million that commence on the maturity of equivalent 
contracts that are currently in force in june 2006 and june 2008  
during fiscal 2005 a net gain of 60 million was recognized within other income that represented the net change in the fair value of interest rate swaps  
that did not qualify for hedge accounting under fas133 fiscal 2004 net fair value gain of 120 million fiscal 2003 net fair value loss of 116 million 
the profile of interest rate swaps held by the company was as follows 
  interest rate 
  payable  receivable   
 notional principal 
amount 
million variable fixed  variable fixed  
variable 
rate 
index 
as at december 31 2005    
maturity date    
– december 2011 £1500 72 – –  80  6 month libor
– september 2015 £2500 57 – –  61  3 month libor
– june 2006 us1450 – 28 45 –   3 month libor
– june 2008 us650 – 38 45 –   3 month libor
– december 2007 commences june 2006 us1450 – 42 –  –   3 month libor
– december 2009 commences june 2008 us650 – 46 –  –   3 month libor
    
as at january 1 2005    
maturity date    
– december 2011 £1500 75 – –  80  6 month libor
– september 2015 £2500 60 – –  61  3 month libor
– june 2006 us1450 – 28 25 –   3 month libor
– june 2008 us650 – 38 25 –   3 month libor
 
 
16  fair value of financial assets and liabilities 
fair value information is provided below in respect of financial assets and liabilities that comprise the company’s net debt and other financial assets and 
liabilities whose carrying value is not considered to approximate to fair value  
as at december 31 2005  as at january 1 2005 
 
carrying 
amount
 million 
fair value 
 million  
carrying 
amount 
 million 
fair value
 million 
cash and cash equivalents 3964 3964   3560 3560 
restricted cash 92 92   94 94 
borrowings classified as current liabilities 697 697  315 315
borrowings classified as noncurrent liabilities 9035 9331  7671 8261
capital lease obligations 212 212  232 232
derivative financial instruments   
– interest rate derivatives 379 379   191 191 
– foreign currency derivatives 104 104  128 128
convertible cumulative preference shares 5267 5382  6474 4811
cash and cash equivalents and restricted cash largely attract floating interest rates accordingly their carrying amounts are considered to approximate to  
fair value  
borrowings classified as current liabilities mainly comprise overdrafts and loans that attract floating interest rates accordingly their carrying amount is 
considered to approximate to fair value 
borrowings classified as noncurrent liabilities principally comprise borrowings under the group’s multicurrency revolving credit facility that attract floating 
interest rates whose carrying amount is considered to approximate to fair value and the listed bonds issued under the group’s euro medium term note 
program whose fair values represent their quoted market prices  
capital lease obligations attract fixed interest rates that are implicit in the lease rentals and their fair value has been assessed by reference to prevailing market 
interest rates 
interest rate derivatives are valued by discounting the applicable cash flows at prevailing market interest rates 
foreign currency derivatives are valued on a mark to market basis by reference to prevailing currency exchange rates 
the convertible cumulative preference shares are not traded in an organized market and their fair value has been assessed using a valuation model that takes 
into account prevailing market interest rates and the existence of the holders’ conversion option  
  
 
     consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
157
group – us gaap 
17 postretirement benefits 
the company has defined benefit and defined contribution plans covering substantially all employees of the company and its domestic and international 
subsidiaries benefits under defined benefit plans on a worldwide basis are generally based on years of service and employees’ compensation during the last 
years of employment in north america the company also provides various postretirement health and life insurance benefits for certain of its employees 
the company contributes to multiemployer plans for certain collective bargaining united states employees in addition various other defined contribution 
plans are sponsored worldwide 
 
year ended  
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million 
multiemployer plan expense 63  73  73 
defined contribution plan expense 422  407 397 
  
accrued liability for multiemployer and defined contribution plans included in other liabilities at the end 
of the period 128  108 95 
the components of net periodic benefit cost for defined benefit plans are as follows 
 uk pension plans 
 
year ended  
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million 
service cost 18  31  67 
interest cost 195  199 188 
expected return on plan assets 236 238 198
amortization of prior service cost 04  04 – 
amortization of transition obligation 13 14 16
amortization of actuarial loss 21  17  24 
lossgain on curtailments and settlements 17  06 10 
net periodic benefit expenseincome 06  07 75 
  
weighted average assumptions used to determine net periodic benefit costs  
– discount rate 575 575 599
– rate of compensation increase 400 400 401
– expected return on plan assets 728 723 773
 
 non uk pension plans 
 
year ended  
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million 
service cost 100  97 106 
interest cost 428  438 456 
expected return on plan assets 358 382 454
amortization of prior service cost 05  05  12 
amortization of transition asset 05  05  04 
amortization of actuarial loss 175  121 46 
lossgain on curtailments and settlements  02  28 19 
special termination benefits 25 – – 
net periodic pension expense 332  256 189 
  
weighted average assumptions used to determine net periodic benefit costs  
– discount rate 587 595 675
– rate of compensation increase 540 539 575
– expected return on plan assets 778 816 913 consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
158 
17 postretirement benefits continued 
the components of net periodic benefit cost for other postretirement benefits are as follows 
 other postretirement benefits 
 
year ended  
january 1  
2005 
 million 
year ended 
january 1 
 2005 
 million 
year ended
january 3 
2004
 million 
service cost 08  08 11 
interest cost 121  137 190 
amortization of prior service cost 25 15 12
amortization of actuarial gain 45 – – 
gainloss on curtailments and settlements  80 21 20 
net periodic benefit incomeexpense 21 109 209 
  
weighted average assumptions used to determine net periodic benefit costs  
– discount rate 600 615 675
– ultimate medical trend rate 418 450 503
the company generally uses a measurement date three months before the fiscal year end for the majority of its plans changes in the pension and other post 
retirement benefit obligations fair value of plan assets and the amounts recognized in the consolidated balance sheets are shown below 
 pension benefits  other benefits 
 uk plans  nonuk plans  all plans 
 
year ended 
december 31 
2005
 million 
year ended 
january 1 
2005
 million  
year ended 
december 31 
2005
 million 
year ended 
january 1 
 2005 
 million   
year ended 
december 31 
2005 
 million 
year ended 
january 1 
2005
 million  
benefit obligation   
benefit obligation at end of prior year 3664 3509 7537 7535   2138 2767 
service cost 18 31 100 97   08 08 
interest cost 195 199 428 438   121 137 
plan amendments – – 06 75   13 103
actuarial gainloss 751 40 522 164   10 450
divestitures 17 – – 28  – 26
curtailments – 59 02 –   – – 
settlements 09 116 05 146  102 – 
special termination benefits – – 36 –   – – 
disbursements and benefits paid 157 191 530 674  192 210
contributions by participants 02 02 02 02   – – 
foreign currency translation 431 249 28 74   06 15 
benefit obligation at end of year 4016 3664 7994 7537   1956 2138 
plan assets   
fair value of plan assets at end of prior year 3466 3161 4661 4414   – – 
actual return on plan assets 529 246 507 573   – – 
divestitures 17 – – –   – – 
settlements 09 116 09 59  – – 
disbursements and benefits paid 157 191 530 673  192 210
company contributions 84 131 731 360   192 210 
contributions by participants 02 02 02 02   – – 
foreign currency translation 390 233 03 44   – – 
fair value of plan assets at end of year 3508 3466 5365 4661   – – 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
159
group – us gaap 
17 postretirement benefits continued 
 pension benefits  other benefits 
 uk plans  nonuk plans  all plans 
 
as at 
december 31 
2005
 million 
as at 
january 1 
2005
 million  
as at 
december 31 
2005
 million 
as at 
january 1  
2005 
 million  
as at 
december 31 
2005 
 million 
as at 
january 1 
2005
 million 
funded statusassets less thanin excess of 
benefit obligation 508 197 2629 2876  1956 2138
contributions after measurement date 14 12 42 45   44 50 
unrecognized net actuarial lossgain 709 348 2483 2299   551 566
unrecognized net assetliability at transition 04 18 47 57   – – 
unrecognized prior service cost 05 10 30 26   195 207
net amount recognized 216 155 27 449  2658 2861
   
amounts recognized in the consolidated  
balance sheet   
– prepaid benefit cost – 135 16 29   – – 
– accrued benefit liability 486 256 2013 2363  2658 2861
– intangible asset 06 09 60 64   – – 
– accumulated other comprehensive income 696 267 1910 1821   – – 
net amount recognized 216 155 27 449  2658 2861
the accumulated benefit obligation for all defined benefit pension plans was 11339 million at december 31 2005 and 10586 million at january 1 2005 
the accumulated benefit obligation has been calculated in accordance with approach 1 described in eitf 881 “determination of vested benefit obligation  
for a defined benefit pension plan” 
during fiscal 2004 certain assets and liabilities of one of the group’s japanese pension arrangements were transferred to the japanese government  
the value of liabilities transferred exceeded the amount of assets transferred by 87 million the impact of this government subsidy is reflected in the  
above figures 
 pension benefits  other benefits 
 uk plans  nonuk plans  all plans 
 
year ended 
december 31 
2005
 million 
year ended 
january 1 
2005
 million  
year ended 
december 31 
2005
 million 
year ended 
january 1 
 2005 
 million  
year ended 
december 31 
2005 
 million 
year ended 
january 1 
2005
 million 
increase in minimum liability included in other 
comprehensive income 429 06 89 131  na na 
information regarding pension plans in which projected benefit obligations inclusive of anticipated future compensation increases and accumulated benefit 
obligations exceed plan assets 
 uk plans  nonuk plans 
 
as at 
december 31 
2005
 million 
as at 
january 1  
2005 
 million  
as at 
december 31 
2005 
 million 
as at 
january 1 
 2005
 million 
projected benefit obligation 3709 1401  7977 7374
accumulated benefit obligation 3638 1346  7382 6870
fair value of plan assets 3169 1129   5348 4523 
the major assumptions used in valuing year end pension and postretirement plan obligations were as follows 
 pension benefits  other benefits 
 uk plans  nonuk plans  all plans 
 
as at 
december 31 
2005 
as at 
january 1 
 2005  
as at 
december 31 
2005 
as at 
january 1  
2005  
as at 
december 31 
2005 
as at 
january 1 
2005 
weighted average assumptions used to 
determine benefit obligations at year end   
– discount rate  500 575 534 587   544 600 
– rate of compensation increase 400 400 539 539   na na 
– ultimate medical trend rate na na na na   418 450 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
160 
17 postretirement benefits continued 
pension plan assets 
pension plan assets are invested in equity securities bonds and other fixed income securities money market instruments and insurance contracts  
the company’s weightedaverage worldwide actual asset allocations at december 31 2005 and january 1 2005 by asset category are as follows 
 plan assets  
 
as at 
december 31 
2005 
as at 
january 1 
2005 
target 
allocation 
asset category  
– equity securities 60  61 6575 
– fixed income securities 35  35 2733 
– other assets 5   4 010 
total 100  100 100 
the company’s investment strategy for pension plan assets includes diversification to minimize interest and market risks on december 1 2005 the tomkins 
north american retirement board redenominated existing fixed income assets in the us defined benefit pension plans amounting to 1520 million and 
entered into 3080 million of us dollar denominated interest rate swaps with a combined average duration of 115 years this has resulted in a hedge of the 
interest rate risk inherent in the accrued benefit obligation of the plans whereby future changes in the accrued benefit obligation arising from changes in the 
interest rate will be matched by equal and opposite movements in the value of the assets protecting the deficit from future interest rate changes in general 
the investment strategy for nonus plans does not involve the use of derivative financial instruments plan assets are rebalanced periodically to maintain target 
asset allocations maturities of investments are not necessarily related to the timing of expected future benefit payments but adequate liquidity to make 
immediate and medium term benefit payments is ensured 
contributions 
the company’s funding policy for its defined benefit plans is to contribute amounts determined annually on an actuarial basis to provide for current and future 
benefits in accordance with federal law and other regulations post retirement health and life insurance benefits are funded as incurred the company expects 
to contribute approximately 69 million to its pension plans during fiscal 2006 
benefit payments 
the following benefit payments which reflect expected future service as appropriate are expected to be paid 
 pension benefits  other benefits 
 
uk plans 
 million 
nonuk plans 
 million  
all plans 
 million 
fiscal years   
– 2006 164  547  201 
– 2007 172  540  203 
– 2008 185  546  205 
– 2009 184  552  204 
– 2010 194  549  202 
– 20112015 1062  2773  930 
health care cost trends and the impact of the medicare prescription act of 2003 
the weighted average annual rate of increase in the percapita cost of covered benefits ie health care cost trend rate is assumed to be 868 for fiscal 
2006 reducing gradually to 418 by fiscal 2011 and remaining at that level thereafter a one percentage point change in the assumed health care cost trend 
rate would have the following effects as of december 31 2005 
 
1  point increase 
 million 
1  point decrease
 million 
effect on the total of service and interest cost 11  11 
effect on the post retirement benefit obligation 161  156 
in december 2003 the medicare prescription drug improvement and modernization act of 2003 the “act” was signed into law the act introduced a plan 
sponsor subsidy based on a percentage of a beneficiary’s annual prescription drug benefits within defined limits and the opportunity for a retiree to obtain 
prescription drug benefits under medicare 
in january 2004 the fasb issued staff position fas 1061 “accounting and disclosure requirements related to the medicare prescription drug improvement 
and modernization act of 2003” the “act” or “fsp fas 1061” fsp fas 1061 allows for current recognition or a onetime deferral of the effects of the 
act the deferral suspends the application of the measurement requirements of sfas106 “employer’s accounting for post retirement benefits other than 
pensions” and it revised the disclosure requirements of sfas 132 “employers’ disclosures about pensions and other postretirement benefits” for pensions  
and other post retirement plans for the effects of the act in may 2004 the fasb issued staff position fas 1062 “accounting and disclosure requirements 
related to the medicare prescription drug improvement and modernization act of 2003” the act or “fsp fas 1062” which supercedes fsp fas 1061 and 
provides guidance on the accounting for the effects of the act and requires employers that sponsor post retirement healthcare plans that provide prescription 
drug benefits to provide certain disclosures regarding the effect of the federal subsidy included in the act fsp fas 1062 was effective for the first interim or 
annual period beginning after june 15 2004 and did not have a material impact on the company’s results of operations cash flows or financial position  
 
 
 
 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
161
group – us gaap 
18 share based compensation 
a background 
the company operates a number of sharebased compensation plans to provide incentives to its senior management and other eligible employees details of 
the plans in respect of which options and awards were outstanding as at december 31 2005 are set out below 
the company adopted sfas123r “sharebased payment” using the modified prospective method with an effective date of january 2 2005 prior to adopting 
sfas123r the company accounted for sharebased compensation using the intrinsic value method prescribed in apb25 “accounting for stock issued to 
employees” the company’s financial statements for fiscal 2004 and fiscal 2003 have not been restated to reflect the adoption of sfas123r proforma 
information on the effect on the company’s net income and net income per common share for fiscal 2004 and fiscal 2003 had the company previously 
accounted for sharebased compensation using the fair value method prescribed in sfas123”accounting for stockbased compensation” is presented in  
note 2  
under sfas 123 the company recognized the effect of forfeitures due to failure to satisfy service conditions or nonmarket performance conditions when  
they occurred under sfas 123r the company adjusts the compensation expense recognized in each period to reflect actual and expected forfeitures  
the cumulative effect of this change of accounting policy as at january 1 2005 was not material 
the compensation expense recognized in income and the related income tax benefit in respect of sharebased compensation plans was as follows 
 
 
year ended 
december 31 
2005 
 million 
year ended
january 1
2005 
million 
year ended
january 3 
2004 
 million 
equitysettled awards  
– share options 98  06 72 
– other equitysettled awards 56  37 11 
 154  43 83 
cashsettled awards 11  23 23 
total compensation expense 165  66 106 
income tax benefit –  24 34
effect on net income 165  42 72 
b  share options 
following a review by management in fiscal 2004 it was decided that the company’s executive share option plans would not be renewed when they lapsed 
for the purposes of new grants in may 2005 accordingly no new options were granted under these plans during fiscal 2005 options will continue to be 
granted from time to time under the tomkins 2005 sharesave scheme a savings related share option plan which is open to employees who are resident for 
tax purposes in the united kingdom options granted under the tomkins 2005 sharesave scheme generally vest on the fifth anniversary of the grant date and 
expire if they are not exercised within six months of the vesting date 
details of the share option plans that are closed for the purposes of new grants but under which options were outstanding as at december 31 2005 are  
as follows  
tomkins executive share option scheme no3 “esos 3” and the tomkins executive share option scheme no 4 “esos 4” 
options granted under esos3 and esos4 cannot generally be exercised until the third anniversary of the date of grant and until the performance condition  
has been satisfied the performance condition will be achieved if the rate of increase of the company’s earnings per share exceeds the growth in the united 
kingdom retail prices index by an average of 2 per cent per annum over any threeyear period after the option is granted based on a simple arithmetic 
calculation that is made annually when the company’s results are known in any event options granted under these plans generally expire if they are not 
exercised by the tenth anniversary of the grant date 
tomkins premium priced option 
the tomkins premium priced option was an option specifically and solely granted to james nicol as part of the incentive package to attract him to the 
company it consists of a nontransferable option to acquire 5076142 shares granted on february 11 2002 the price per share payable on the exercise of 
the option will be 338 cents in respect of 2538072 shares “a option shares” 474 cents in respect of 1522842 shares “b option shares” and 592 cents  
in respect of 1015228 shares “c option shares” no performance conditions are attached to these options the options vested as to onethird of a b and c 
option shares on february 18 2003 onethird of a b and c option shares on february 18 2004 and as to onethird of a b and c option shares on february 
18 2005 the option will expire on february 11 2012 or earlier in certain circumstances 
ongoing option 
the ongoing option was also an option specifically and solely granted to james nicol on february 11 2002 as part of the incentive package to attract him to the 
company it consisted of a nontransferable option to acquire 1522842 shares at 338 cents which could not be exercised before february 18 2005 and unless 
and until the performance condition has been satisfied or waived the performance condition will be achieved if on or after the third anniversary of the date of 
grant the rate of increase of the company’s earnings per share over any threeyear period is equal to or greater than the rate of increase of the united kingdom 
retail prices index plus 9 per cent the performance condition may be waived or amended by the remuneration committee if there is a change of control of the 
company then the option is exercisable immediately regardless of whether the performance condition is satisfied the option will expire on february 11 2012 or 
earlier in certain circumstances as at december 31 2005 the option had not vested because the performance condition had not been met 
tomkins savings related share option scheme no 2 
the tomkins savings related share option scheme no2 was open to employees who are resident for tax purposes in the united kingdom options granted 
under this plan generally vest on the fifth anniversary of the grant date and expire if they are not exercised within six months of the vesting date during fiscal 
2005 this plan expired for the purposes of new grants and was replaced with the tomkins 2005 sharesave scheme  
 
 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
162 
18 sharebased compensation continued 
changes in the total number of options outstanding during the period were as follows 
 
options 
number 
weighted 
average 
exercise price
cents 
outstanding as at january 1 2005 30333766 42937 
granted during the period 419297 39653 
forfeited during the period 1197190 38999 
exercised during the period 175884 43567 
expired during the period 950857 59697 
outstanding as at december 31 2005 28429132 42490 
 
exercisable as at december 31 2005 5079142 45453 
options that were exercisable as at december 31 2005 had a total intrinsic value of 43 million and a weighted average remaining contractual term  
of 61 years  
the company expects to recognize an aggregate compensation expense of 82 million in respect of options that were not exercisable as at december 31 
2005 over their weighted average remaining period to vesting of 11 years 
during fiscal 2005 the company received 07million fiscal 2004 22 million fiscal 2003 11 million in cash from the exercise of share options whose 
total intrinsic value was 01 million fiscal 2004 09 million fiscal 2003 01 million the tax benefit realized by the company on the exercise of these 
options was nil fiscal 2004 03 million fiscal 2003 nil 
the compensation expense recognized in respect of share options is based on their fair value at the grant date calculated using the blackscholes option
pricing model  
assumptions made in calculating the fair values of options granted were as follows 
 
 
year ended 
december 31 
2005 
year ended
january 1
2005 
year ended
january 3 
2004 
options granted  419297   6853762  9721456 
weighted average fair value 15839c  12813c 9299c 
  
weighted average assumptions  
– share price  49566c  45703c 38904c 
– exercise price 39653c  43643c 38904c 
– expected volatility 3046  3150 3150
– expected term 525 years  583 years 60 years 
– risk free interest rate 384  451 443 
– expected dividends 2288c  2191c 1957c 
expected volatility was determined based on the historical volatility of the market price of the company’s ordinary shares over the period since may 2001 
when following a period of significant demerger activity the company was refocused on its remaining core businesses adjustments have been made to  
the expected term used in the model to reflect the effects of nontransferability exercise restrictions and behavioral considerations where available based  
on historical experience of similar awards 
c other equitysettled awards 
details of the other equitysettled plans operated by the company under which awards were outstanding as at december 31 2005 are as follows  
annual bonus incentive plan 
the company’s executive directors and other senior executives participate in the annual bonus incentive plan “abip” each participant in the plan receives a 
percentage of “bonusable profit” of the business for which he or she has responsibility bonusable profit is based on operating profit less a charge for tax and 
a charge for invested capital bonusable profit may also be adjusted for restructuring costs and with the approval of the remuneration committee certain 
other items such as gains or losses on the disposal and exit of businesses  
senior participants receive their bonus as to foursevenths in cash oneseventh in bonus shares and twosevenths in deferred shares other participants receive 
their bonus as to threequarters in cash onetwelfth in bonus shares and one sixth in deferred shares bonuses are paid at the end of june september and 
december based on 75 per cent of the bonus earned to the end of the previous quarter with the balance of the full entitlement to the bonus for the fiscal 
year paid at the end of march following the fiscal yearend  
bonus shares are restricted and vest only after a period of three years after the initial bonus award dividends are paid on the bonus shares deferred shares are 
awarded at the time of the initial bonus award but the vesting of the shares is conditional on continued employment with the company for three years after 
the award dividends are not paid on the deferred shares until they have vested 
as a condition of continued participation in the plan senior participants are required to hold shares with a purchase cost equivalent to one year’s total aftertax 
remuneration including bonus based on an average of the previous three years other participants are required to hold shares with a purchase cost equivalent 
to one half of one year’s total aftertax remuneration including bonus based on an average of the previous three years  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
163
group – us gaap 
18 sharebased compensation continued 
share matching scheme 
the tomkins share matching scheme “sms” was related to the tomkins restricted share plan “rsp” which closed for the purposes of new grants in fiscal 
200001 the rsp required participants either to take an element of their annual bonus in the form of restricted shares or to acquire further shares in the 
company using cash bonuses already paid to them awards made under the rsp were subject to forfeiture if the participant left the company before the third 
anniversary of the grant date in the event that restricted shares vested under the rsp the sms provided for up to two conditional matching awards each 
matching award was for the number of shares that had vested under the rsp with proportionate reductions in the event that the participant disposed of any 
shares that had vested under the rsp the first matching award under the sms was subject to forfeiture if the participant left the company before the second 
anniversary of the grant date the second matching award was made when the first matching award vested and was subject to forfeiture if the participant left 
the company before the second anniversary of the grant date the final grant under the sms was made during fiscal 2005 and the plan is now closed for the 
purposes of new grants  
changes in the total number of awards outstanding under these plans during fiscal 2005 were as follows 
 
awards 
number 
weighted 
average 
grant date 
 fair value
cents 
outstanding as at january 1 2005 1889075 46983 
granted during the period 1426367 29672 
forfeited during the period 18701 48725 
vested during the period 73744 46316 
outstanding as at december 31 2005 3222997 46810 
during fiscal 2005 awards were made over 1415047 ordinary shares under abip and matching awards were made over 11320 ordinary shares under  
the sms  
the company expects to recognize an aggregate compensation expense of 46 million in respect of awards that had not vested as at december 31 2005 
over their weighted average remaining period to vesting of 16 years 
the total intrinsic value of awards that vested under these plans during fiscal 2005 was nil fiscal 2004 29 million fiscal 2003 09 million  
the tax benefit realized by the company on the vesting of these awards was nil fiscal 2004 10 million fiscal 2003 03 million 
the fair value of awards made under these plans is measured based on the market price of the company’s ordinary shares on the date of the award where 
the awards do not attract dividends during the vesting period the market price is reduced by the present value of the dividends expected to be paid during  
the expected life of the awards  
d cashsettled awards 
deferred matching share purchase plan 
the deferred matching share purchase plan was introduced for james nicol as part of the incentive package to attract him to the company under this plan 
3045684 ordinary shares “matching shares” were awarded on february 11 2002 following the purchase by mr nicol of 1015228 ordinary shares after 
three years from february 18 2002 or earlier in certain circumstances the award was to vest in respect of 1015228 matching shares and the remaining 
2030456 matching shares were to vest to the extent that for every 1 penny the highest market price of the company’s ordinary shares sustained over a five
day period during the sixmonth period ended february 18 2005 exceeded 197 pence being the market price on february 18 2002 mr nicol was entitled to 
receive 5153 shares in the event the market price achieved under the terms of the plan was 28525 pence and of the 2030456 matching shares 454752 
vested and the balance lapsed 
under the terms of his contract mr nicol was entitled to elect to receive a cash payment in lieu of shares and for this reason this plan was classified as a cash
settled transaction as at january 1 2005 the company recognized a liability of 69 million in respect of the plan during fiscal 2005 the company 
recognized a compensation expense of 11 million in respect of the plan fiscal 2004 23 million fiscal 2003 23 million  
in the event mr nicol elected to receive cash and was paid 80 million subject to statutory deductions in settlement on february 28 2005  
the tax benefit realized by the company on the vesting of this award was 09 million 
 
19 capital leases 
future minimum lease payments under capital leases that had initial or remaining noncancellable lease terms in excess of one year as at december 31 2005 
were as follows 
   million 
fiscal year 
– 2006 46 
– 2007 41 
– 2008 36 
– 2009 27 
– 2010 26 
– thereafter 110 
total minimum payments 286 
less future interest 74
total principal payable  212 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
164 
 
20 commitments under operating leases 
future minimum lease payments under operating leases that had initial or remaining noncancellable lease terms in excess of one year as at 
december 31 2005 were as follows 
   million 
fiscal year 
– 2006 357 
– 2007 283 
– 2008 266 
– 2009 220 
– 2010 199 
– thereafter 812 
total minimum payments 2137 
the rental expense recognized in respect of assets held under operating leases was as follows 
 
 
year ended 
december 31 
2005 
 million 
year ended 
january 1 
2005 
million 
year ended
january 3 
2004 
million 
land and buildings 267  265 204 
plant and machinery 109  128 152 
total operating lease rental expense 376  393 356 
 
 
21 contingencies 
the company is from time to time party to legal proceedings and claims which arise in the ordinary course of business the directors do not anticipate  
that the outcome of any of the above proceedings and claims either individually or in aggregate will have a material adverse effect upon the group’s  
financial position 
 
22 restructuring 
the company defines restructuring expenses to include charges incurred with respect to exit or disposal activities accounted for in accordance with sfas 146 
“accounting for costs associated with exit or disposal activities” employee severance costs incurred as a result of an exit or disposal activity accounted for  
in accordance with sfas 88 “employers’ accounting for settlements and curtailments of defined benefit pension plans and for termination benefits” and  
sfas 112 “employers’ accounting for postemployment benefits” and pension and other post employment benefit costs incurred as a result of an exit or 
disposal activity accounted for in accordance with sfas 87 “employers’ accounting for pensions” and sfas 106 “employers’ accounting for postretirement 
benefits other than pensions”  
the company has undertaken various restructuring activities to streamline its operations consolidate and take advantage of available capacity and resources 
and ultimately achieve net cost reductions restructuring activities include efforts to integrate and rationalize the company’s businesses and to relocate 
manufacturing operations to lower cost markets  
during fiscal 2005 there were 408 million of restructuring costs charged to the consolidated income statement compared with 341 million in fiscal 2004 
provisions for restructuring costs were as follows 
 
employee related 
 million 
fixed asset 
 writedowns 
 million 
 other costs 
 million 
total 
 million  
balance as at december 31 2002 202 –  109 311 
cash expenditure 230 –  162 392
noncash expenditure – 68 39 107
charged to income 141 68  171 380 
foreign currency translation 02 –  – 02 
balance as at january 3 2004 115 –  79 194 
cash expenditure 76 –  235 311
non cash expenditure – 90 14 104
charged to income  62 90  189 341 
foreign currency translation 01 –  – 01 
balance as at january 1 2005 102 –  19 121 
cash expenditure 75 –  119 194
non cash expenditure – 80 79 159
charged to income  101 80  209 390 
foreign currency translation 07 –  02 09
balance as at december 31 2005 121 –  28 149 
 
 
  consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
165
group – us gaap 
 
22 restructuring continued 
industrial  automotive 
the loss of a local major customer and uncompetitive labor costs resulted in the decision to announce the closure of the company’s curved hose production 
plant in nowra australia the plant will close in july 2006 allowing time to honor current customer commitments due to continued losses wipers announced 
its intention to transfer the remaining manufacturing capability from the wiper systems plant in pontypool wales to more cost competitive locations  
the transfer will complete in the first half of fiscal 2006 taken together these projects will result in the termination of 362 employees in fiscal 2006 
air systems components 
in air systems components a number of plant rationalizations occurred with the closure of the tabor city and englewood facilities and the transfer to 
production to lower cost facilities 
segmental analysis of income statement expense 
 
year ended  
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million  
industrial  automotive  
– power transmission 19  86 131 
– fluid power 16 18 03 
– wipers 299  89 143 
– fluid systems 07  47 – 
– other industrial  automotive 30  52 26 
 339  292 303 
building products  
– air systems components 52  18 66 
– other building products 01 31 11 
 51  49 77 
 390  341 380 
segmental analysis of restructuring provisions 
 
as at  
december 31 
2005 
 million 
as at 
january 1 
2005 
 million 
as at
january 3 
2004
 million  
industrial  automotive  
– power transmission 20  04 33 
– fluid power –   24 43 
– wipers 67  23 49 
– fluid systems –   09 – 
– other industrial  automotive 20  11 16 
 107  71 141 
building products  
– air systems components 42  45 52 
– other building products –   05 01 
 42  50 53 
 149  121 194 
as at december 31 2005 the company expected to recognize further expenses in relation to ongoing restructurings amounting to 113 million all of which 
will be incurred in fiscal 2006 
 
 
 
23  capital structure 
the company’s issued share capital comprises ordinary shares of 5p each “common shares” and convertible cumulative preference shares of 50 each 
“preferred shares” 
preferred shares 
the preferred shares were issued on terms that they could be converted at any time at the shareholder’s option into fully paid common shares of the 
company on the basis of 977 common shares for every preferred share so converted at the date of issue the conversion terms of the preferred shares  
were equivalent to a price of 334p per common share  
the company has the option at any time when the total amount of the preferred shares issued and outstanding is less than 10 of the amount originally 
issued and in any event on or after july 29 2006 to redeem in the first case all but not some only and in the second case all or any of the preferred shares 
which remain issued and outstanding at that time as at december 31 2005 the company was unable to redeem the preferred shares 
until such time as the preferred shares are converted or redeemed the holders of the preferred shares have a right to receive dividends at an annual rate of 
5560 per cent in preference to the holders of the company’s common shares   consolidated financial statements prepared in accordance with us gaap 
notes to the financial statements continued 
tomkins plc annual report 2005 
166 
23 capital structure continued 
the holders of the preferred shares are entitled to vote at a general meeting of the company where on a show of hands each holder will have one vote and 
on a poll each holder will have one vote in respect of every seven fully paid common shares to which the holder would be entitled on the full exercise of his 
conversion rights except if two or more consecutive quarterly dividends are in arrears whereupon on a poll each holder shall have one vote in respect of every 
fully paid common share to which the holder would be entitled on the full exercise of his conversion rights and such voting rights would continue until such 
time as any arrears of dividends have been paid in full 
on a return of assets on liquidation or otherwise other than on redemption or repurchase of the preferred shares the assets of the company available to 
shareholders will be applied first in repaying the capital paid up or credited as paid up in respect of the preferred shares together with all arrears and accruals 
of dividends to the holders of the preferred shares and any other classes of shares ranking pari passu as to capital with the preferred shares 
restricted reserves 
under united kingdom law there is a concept of a capital redemption reserve in the event that the company purchases its own shares in certain 
circumstances it is required to transfer an amount equivalent to the nominal value of the shares purchased to the capital redemption reserve in order to 
maintain the capital of the company the capital redemption reserve is a restricted reserve as it cannot be distributed to shareholders on august 26 2003 
the company redeemed all of its outstanding redeemable convertible cumulative preference shares of 50 each and transferred 6219 million to the capital 
redemption reserve in fiscal 2003 the company recognized a gain of 174 million on redemption of the redeemable convertible cumulative preference 
shares in comprehensive income 
 
24  related party transactions 
during the period the group purchased aviation services under an agreement with igc llc and gforce aviation llc igc llc was whollyowned by  
mr c c gates until his death on august 28 2005 when ownership passed to the gates family mr gates had and gates family members have an interest in 
the company’s preferred shares the agreement was entered into on an arm’s length basis and the services provided are used strictly for corporate travel to 
the company’s diverse locations within north america and only if there is no lower cost alternative available to the company’s employees the agreement 
permits the company to purchase an unlimited number of aircraft flying hours at the rate of 1950 per flying hour plus 1300 per day crew plus 1800  
per month to cover insurance costs during fiscal 2005 the company recognized an expense of  147870 fiscal 2004 145705 in respect of these services 
as at december 31 2005 an amount of 2100 january 1 2005 1700 due to igc llc was included in trade payables 
there are no further transactions or proposed transactions with related parties that are material to the company or to a related party 
 
 
25  allowance for doubtful accounts 
the movements in the allowance for doubtful account are as follows 
 
year ended  
december 31 
2005 
 million 
year ended 
january 1 
2005 
 million 
year ended
january 3 
2004
 million 
  
balance at the beginning of the period 117  158 167 
charged to income 54  13 07 
additions charged to other accounts  13 13 10
utilized 16 49 23
foreign currency translation 07 08 17 
balance at the end of the period 135  117 158 
 includes the currency retranslation of opening balances and movements arising from the acquisition and disposal of subsidiaries 
 
 
26 subsequent events 
on march 1 2006 the company completed the acquisition of 100 of the issued stock of selkirk americas lp “selkirk” for a provisional consideration of 
1244 million selkirk is a manufacturer of chimney venting and air distribution products for commercial and residential applications and it will be integrated 
into the company’s air systems components business segment selkirk is headquartered in the united states of america and has manufacturing facilities in 
the united states of america canada and mexico  
on march 2 2006 the company announced that it had received conversion notices in respect of an aggregate of 7800000 convertible cumulative 
preference shares of us50 each “preferred shares” held by bc management llc as nominee for bear creek inc a corporate trustee administering certain 
gates family trusts and the gates family foundation who together controlled approximately 9915 of the preferred shares in issue the preferred shares 
were converted into 76205998 fully paid ordinary shares of 5p each “common shares” on march 9 2006 based on the company’s issued share capital  
as at march 2 2006 the number of issued common shares increased from 777431246 to 853637244 following the conversion and 2656912 preferred 
shares remained in issue 
  financial statements of the company prepared in accordance with uk gaap 
directors’ responsibilities in relation to the financial statements 
tomkins plc annual report 2005 
167
company – uk gaap 
the directors are required by law to prepare separate financial statements of 
tomkins plc “the company” in accordance with the companies act 1985 
the directors have prepared the financial statements of the company under 
united kingdom generally accepted accounting principles “uk gaap” 
rather than international financial reporting standards 
the directors are required to ensure that the company’s financial statements 
give a true and fair view of the state of affairs of the company at the end of 
the financial year and of its profit or loss for the financial year however the 
directors are permitted by section 230 of the companies act 1985 not to 
include the company’s profit and loss account in the financial statements  
in preparing the company’s financial statements the directors are  
required to select suitable accounting policies and apply them consistently 
make judgments and estimates that are reasonable and prudent and state 
whether applicable accounting standards have been followed subject  
to any material departures that must be disclosed and explained in the 
financial statements  
the directors are responsible for ensuring that the company keeps proper 
accounting records which disclose with reasonable accuracy at any time the 
financial position of the company and which enable them to ensure that the 
company’s financial statements comply with applicable law  
the directors are responsible for safeguarding the assets of the company 
and hence for taking such steps as are reasonably open to them to prevent 
and detect fraud and other irregularities 
the directors are also responsible for the maintenance and integrity  
of the financial information contained on the corporate website 
wwwtomkinscouk the work carried out by the auditors does not  
involve consideration of these matters and accordingly the auditors  
accept no responsibility for any changes that may have occurred to  
the company’s financial statements since they were initially presented  
on the website legislation in the united kingdom governing the  
preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions 
  financial statements of the company prepared in accordance with uk gaap 
independent auditors’ report  
tomkins plc annual report 2005 
168 
to the members of tomkins plc 
we have audited the individual financial statements of tomkins plc “the 
company” for the year ended 31 december 2005 “the company’s financial 
statements” which comprise the company’s balance sheet and the related 
notes 1 to 18 these financial statements have been prepared under the 
accounting policies set out therein  
the corporate governance statement and the remuneration committee 
report are included in the annual report of tomkins plc for the year ended 
31 december 2005 
we have reported separately on the consolidated financial statements of 
tomkins plc and its subsidiaries for the year ended 31 december 2005 and 
on the information in the remuneration committee’s report that is described 
as having been audited 
this report is made solely to the company’s members as a body in 
accordance with section 235 of the companies act 1985 our audit work 
has been undertaken so that we might state to the company’s members 
those matters we are required to state to them in an auditors’ report and  
for no other purpose 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 
as described in the statement of directors’ responsibilities on page 167  
the directors are responsible for preparing the company’s financial 
statements in accordance with applicable united kingdom law and united 
kingdom accounting standards united kingdom generally accepted 
accounting principles  
our responsibility is to audit the company’s financial statements in 
accordance with relevant united kingdom legal and regulatory requirements 
and international standards on auditing uk and ireland  
we report to you our opinion as to whether the company’s financial 
statements give a true and fair view in accordance with the relevant financial 
reporting framework and whether the company financial statements have 
been properly prepared in accordance with the companies act 1985 we 
report to you if in our opinion the directors’ report is not consistent with 
the company’s financial statements we also report to you if the company 
has not kept proper accounting records if we have not received all the 
information and explanations we require for our audit or if information 
specified by law regarding directors’ remuneration and other transactions 
with the company is not disclosed 
we read the directors’ report and the other information contained  
in the annual report for the above year and described in the contents 
section and consider the implications for our report if we become aware of 
any apparent misstatements or material inconsistencies with the company’s 
financial statements  
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 company’s financial statements it also includes  
an assessment of the significant estimates and judgements made by the 
directors in the preparation of the company’s financial statements and  
of whether the accounting policies are appropriate to the 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 company’s financial 
statements 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 company’s 
financial statements 
opinion 
in our opinion the company’s financial statements give a true and fair  
view in accordance with united kingdom generally accepted accounting 
principles of the state of the companys affairs as at 31 december 2005 
and have been properly prepared in accordance with the companies  
act 1985 
 
 
 
 
deloitte  touche llp 
chartered accountants and registered auditors 
london 
21 february 2006 financial statements of the company prepared in accordance with uk gaap 
company balance sheet 
tomkins plc annual report 2005 
169
company – uk gaap 
 note 
as at 
31 december 
2005 
£ million 
restated
as at
1 january  
2005
£ million 
fixed assets  
tangible assets 5  48 52  
investments in subsidiaries 6  15515 15557  
  15563 15609  
  
current assets  
debtors amounts falling due within one year 7  50 245  
debtors amounts falling due after more than one year 7  767 3966  
cash at bank and in hand  –  30  
   817 4241  
creditors amounts falling due within one year 8  207 264
net current assets  610 3977  
  
total assets less current liabilities  16173 19586  
  
creditors amounts falling due after more than one year  
convertible cumulative preference shares 17  3047 –  
other creditors 9  2942 6551
  5989 6551
  
net assets before net pension liability  10184 13035 
net pension liability 11  114 88
net assets  10070 12947  
   
capital and reserves  
ordinary share capital 14  387 387  
share premium account 14  958 940  
own shares 15  85 86 
capital redemption reserve 16  4619 4619  
merger reserve 16  1154 1154  
capital reserve 16  565 565  
profit and loss account reserve 16  2472 1996 
convertible cumulative preference shares 17  –  3372  
shareholders’ funds  10070 12947  
  
analysis of shareholders’ funds  
equity  10070 9575 
nonequity  –  3372  
  10070 12947 
as explained in note 1 certain amounts as at 1 january 2005 have been restated to reflect changes in the company’s accounting policies 
approved by the board on 21 february 2006 and signed on its behalf by 
  
j nicol 
 directors  
k lever   financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements 
 
 
tomkins plc annual report 2005 
170 
1 principal accounting policies 
a basis of preparation 
the financial statements of the company have been prepared in accordance 
with the companies act 1985 and applicable uk accounting standards and 
except as described under the heading “financial instruments” under the 
historical cost convention  
the company’s principal accounting policies are unchanged compared with 
the year ended 1 january 2005 except as described below 
b changes of accounting policy 
i changes applied retrospectively 
during the period the company adopted the following accounting 
standards 
–  frs 17 “retirement benefits” 
– frs 20 ifrs 2 “sharebased payment” 
– frs 21 ias 10 “events after the balance sheet date” 
– frs 28 “corresponding amounts” 
restated to reflect the retrospective application of these accounting 
standards the company’s loss for the year ended 1 january 2005 of  
£504 million is £54 million higher than previously reported and its 
shareholders’ funds as at 1 january 2005 of £12947 million are £553 
million higher than previously reported an analysis of the adjustments that 
have been made to comparative information as at 1 january 2005 and for 
the year then ended is presented in note 16  
the directors estimate that the company’s profit for the year ended  
31 december 2005 was reduced by £12 million because of its adoption of 
frs 20 it is not practicable to estimate the effect of adopting frs 17 on the 
company’s results for the year ended 31 december 2005 because the 
directors no longer obtain actuarial advice in accordance with the previously 
applicable accounting standard ssap 24 “accounting for pension costs” 
the adoption of frs 21 and frs 28 had no effect on the company’s profit 
for the year ended 31 december 2005 
ii adoption of frs25  frs26 
the company adopted frs 25 ias 32 ”financial instruments disclosure 
and presentation” and frs 26 ias 39 “financial instruments 
measurement” prospectively from 2 january 2005 accordingly comparative 
information as at 1 january 2005 and for the year then ended has not been 
restated to reflect the adoption of these accounting standards 
on adoption of frs 25 and frs 26 the company recognised an increase in 
shareholders’ funds of £636 million that may be analysed as follows 
 £ million 
convertible cumulative preference shares 636  
fair valuation of derivative financial instruments  41  
hedge accounting adjustment to borrowings 41
increase in shareholders’ funds 636  
an explanation of the effect of adopting frs 25 and frs 26 is presented 
below under the heading “financial instruments”  
iii adoption of frs 23 
the company adopted frs 23 ias 21 “the effects of changes in foreign 
exchange rates” prospectively from 2 january 2005 on adoption of frs 23 
there was no change in the company’s shareholders’ funds 
c investments in subsidiaries 
a subsidiary is an entity controlled either directly or indirectly by the 
company where control is the power to govern the financial and operating 
policies of the entity so as to obtain benefit from its activities investments  
in subsidiaries represent interests in the company’s subsidiaries that are 
directly owned by the company and are stated at cost less any provision  
for impairment 
d foreign currency translation 
transactions denominated in foreign currencies are translated into sterling at 
the exchange rate ruling on the date of the transaction monetary assets and 
liabilities denominated in foreign currencies are retranslated at the exchange 
rate ruling on the balance sheet date currency translation differences are 
recognised in the profit and loss account 
e tangible fixed assets 
tangible fixed assets are stated at cost less accumulated depreciation  
and any provision for impairment freehold land and assets under 
construction are not depreciated depreciation of tangible fixed assets  
other than freehold land and assets under construction is provided on a 
straightline basis so as to charge the depreciable amount to the profit and 
loss account over the expected useful life of the asset concerned which  
is in the following ranges  
freehold buildings  50 years 
plant equipment and vehicles 2 to 20 years 
f financial instruments 
i derivative financial instruments 
the company uses derivative financial instruments to manage its exposure to 
exchange rate and interest rate movements the company does not hold or 
issue derivatives for speculative or trading purposes prior to 2 january 2005 
such derivative contracts were not recognised as assets and liabilities on the 
balance sheet and gains or losses arising on them were not recognised until 
the hedged item was itself recognised in the financial statements  
from 2 january 2005 onwards derivative financial instruments are 
recognised as assets and liabilities measured at their fair values at the balance 
sheet date changes in their fair values are recognised in the profit and loss 
account and this is likely to cause volatility in situations where the carrying 
value of the hedged item is either not adjusted to reflect fair value changes 
arising from the hedged risk or is so adjusted but that adjustment is not 
recognised in the profit and loss account provided the conditions specified 
by frs 26 are met hedge accounting may be used to mitigate such volatility  
the company does not generally apply hedge accounting to transactional 
foreign currency hedging relationships such as hedges of forecast or 
committed transactions it does however apply hedge accounting to hedges 
of its interest rate exposures where it is permissible to do so under frs26 
when hedge accounting is used the hedging relationship is classified either 
as a fair value hedge or as a cash flow hedge 
where the hedging relationship is classified as a fair value hedge the 
carrying amount of the hedged asset or liability is adjusted by the increase or 
decrease in its fair value attributable to the hedged risk and the resulting 
gain or loss is recognised in the profit and loss account where to the extent 
that the hedge is effective it offsets the change in the fair value of the 
hedging instrument 
where the hedging relationship is classified as a cash flow hedge to the 
extent that the hedge is effective changes in the fair value of the hedging 
instrument are recognised in the statement of total recognised gains and 
losses rather than in the profit and loss account when the hedged item is 
recognised in the financial statements the accumulated gains and losses on 
the hedging instrument are either recycled to the profit and loss account or 
if the hedged item results in a nonfinancial asset are recognised as 
adjustments to its initial carrying amount 
derivative financial instruments are classified as current assets or liabilities 
unless they qualify for hedge accounting under frs 26 and the hedged item 
is classified as a noncurrent asset or liability 
ii embedded derivatives 
prior to 2 january 2005 embedded derivatives were not recognised in the 
financial statements from 2 january 2005 onwards derivatives embedded in 
nonderivative host contracts are recognised separately as derivative financial 
instruments when their risks and characteristics are not closely related to 
those of the host contract and the host contract is not stated at its fair value 
with changes in its fair value recognised in the profit and loss account  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued  
 
tomkins plc annual report 2005 
171
company – uk gaap 
1 principal accounting policies continued 
f financial instruments continued 
iii  preference shares 
in july 1996 the company issued us dollar denominated 556 convertible 
cumulative preference shares “the preference shares” prior to 2 january 
2005 the preference shares were classed as nonequity shareholders’ funds 
and were translated into sterling at the exchange rate ruling at their date of 
issue dividends payable on the shares were dealt with as an appropriation  
of profit  
from 2 january 2005 onwards the preference shares are classified as non
current liabilities and are retranslated into sterling at the exchange rate ruling 
at the balance sheet date currency translation differences are recognised in 
the profit and loss account dividends payable on the preference shares are 
included within interest payable 
iv own shares  
own shares represent the company’s ordinary shares that are held by the 
company and sponsored esop trusts in relation to the group’s employee 
share schemes own shares are deducted at cost in arriving at shareholders’ 
funds and gains and losses on their sale or transfer are recognised directly  
in reserves 
g retirement benefits  
retirement benefits comprise pension benefits provided to employees in the 
united kingdom 
for defined contribution plans the pension cost represents the company’s 
contributions to the plans and is recognised in the profit and loss account in 
the period in which the contributions fall due 
for defined benefit plans the pension cost is determined using the projected 
unit credit method based on actuarial valuations of each of the plans that are 
carried out annually at the company’s balance sheet date by independent 
qualified actuaries the current service cost represents the increase in the 
present value of the plan liabilities expected to arise from employee service  
in the current period past service costs resulting from enhanced benefits are 
recognised in the profit and loss account on a straightline basis over the 
vesting period or immediately if the benefits have vested gains or losses on 
curtailments or settlements are recognised in the profit and loss account in 
the period in which the curtailment or settlement occurs actuarial gains and 
losses which represent differences between the expected and actual returns 
on the plan assets and the effect of changes in actuarial assumptions are 
recognised in the statement of total recognised gains and losses in the period 
in which they occur the net pension liability or asset recognised in the 
balance sheet comprises the net total for each plan of the present value of 
the benefit obligation at the balance sheet date minus any past service costs 
not yet recognised minus the fair value of the plan assets if any at the 
balance sheet date and is stated net of deferred tax where a plan is in 
surplus the asset recognised is limited to the present value of any amounts 
that the company expects to recover by way of refunds or a reduction in 
future contributions 
h sharebased incentives 
sharebased incentives are provided to employees under the company’s 
share option bonus and other share award schemes the company 
recognises a compensation expense in respect of these schemes that is  
based on the fair value of the awards where appropriate measured using an 
optionpricing model for equitysettled schemes the fair value is determined 
at the date of grant and is not subsequently remeasured unless the 
conditions on which the award was granted are modified for cashsettled 
schemes the fair value is determined at the date of grant and is remeasured 
at each balance sheet date until the liability is settled generally the 
compensation expense is recognised on a straightline basis over the vesting 
period adjustments are made to reflect expected and actual forfeitures 
during the vesting period due to failure to satisfy service conditions or non
market performance conditions  
in accordance with the transitional provisions of frs 20 ifrs 2 “sharebased 
payment” the company has not applied this policy to equitysettled awards 
that were granted on or before 7 november 2002 
i taxation 
deferred tax is recognised on a full provision basis on timing differences 
between the recognition of gains and losses in the financial statements and 
their recognition for tax purposes deferred tax assets are recognised only to 
the extent that it is considered more likely than not that that future taxable 
profits will be available against which the asset can be utilised deferred tax 
is determined using the tax rates that have been enacted or substantially 
enacted at the balance sheet date and are expected to apply in the periods in 
which the timing differences are expected to reverse deferred tax assets and 
liabilities are not discounted  
j dividends on ordinary shares 
dividends payable on ordinary shares are recognised in the financial 
statements when they have been appropriately authorised and are no longer 
at the company’s discretion accordingly interim dividends are recognised 
when they are paid and final dividends are recognised when they are 
declared following approval by shareholders at the company’s annual 
general meeting dividends on ordinary shares are recognised as an 
appropriation of shareholders’ funds  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
172 
 
2 profit for the period 
 
as permitted by section 230 of the companies act 1985 the directors have elected not to present the profit and loss account of the company  
the company’s profit for the period was £902 million restated 2004 – £504 million loss 
 
3 dividends on ordinary shares 
 
 
year ended 
31 december 
2005
 per share 
year ended 
1 january 
 2005 
 per share 
year ended 
31 december 
2005 
£ million 
year ended 
1 january 
 2005
£ million 
paid or proposed in respect of the period  
interim dividend  507p 483p  394  373  
proposed final dividend 816p 777p  632  600  
 1323p 1260p  1026  973  
 
   
year ended 
31 december 
2005 
£ million 
restated
year ended
1 january  
2005
£ million 
recognised in the period  
final 2004 – 777p per share paid 26 may 2005  600  –  
interim 2005 – 507p per share paid 14 november 2005  394  –  
final 2003 – 740p per share paid 1 june 2004  –  572  
interim 2004 – 483p per share paid 12 november 2004  –  373  
  994  945  
the directors propose a final dividend for 2005 of 816p per share that subject to approval by shareholders will be paid on 31 may 2006 to shareholders on 
the register on 21 april 2006 
 
4 auditors’ remuneration 
fees payable to the company’s auditors deloitte  touche llp in respect of services provided to the company during the period were as follows 
 
year ended 
31 december 
2005 
£ million 
year ended 
1 january  
2005
£ million 
audit services 
– statutory audit 04 03 
– auditrelated regulatory services  06 03 
 10 06 
further assurance services  03 04 
 13 10 
tax services 
– compliance services – 01 
– advisory services 02 01 
 02 02 
total fees 15 12 
auditrelated regulatory services include the review of the interim financial statements and the audit of the us gaap financial statements included in the  
form 20f filing with the securities and exchange commission in the us further assurance services include advice on accounting matters and nonregulatory 
reporting and include £03 million 2004 – £01 million in relation to the transition to ifrs 
fees relating to further assurance services or to tax advisory services must be reported to the audit committee and approved by the chairman of the  
audit committee  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued  
 
tomkins plc annual report 2005 
173
company – uk gaap 
  
5 tangible fixed assets 
 
 
freehold 
 land and
buildings
£ million 
 
long 
 leasehold 
property 
£ million 
plant
equipment
and vehicles
£ million 
total
£ million 
cost  
as at 1 january 2005 54 01   27  82  
additions – –   02  02  
disposals –  –   07 07
as at 31 december 2005 54  01   22  77  
accumulated depreciation and impairment losses  
as at 1 january 2005 12 –   18  30  
depreciation charge for the period 01 –   04  05  
disposals –  –   06 06
as at 31 december 2005 13  –   16  29  
net book value  
as at 1 january 2005 42  01   09  52  
as at 31 december 2005 41  01  06  48  
 
6 investments in subsidiaries 
 
 £ million 
cost 
as at 1 january 2005 15557  
impairment loss recognised in the period 42
as at 31 december 2005 15515  
details of the company’s principal subsidiaries as at 31 december 2005 are set out on page 182 a complete list of the company’s subsidiaries will be filed 
with the companys next annual return  
 
7 debtors 
 
 
as at 
31 december 
2005 
£ million 
restated 
as at 
1 january 
 2005
£ million 
amounts falling due within one year 
trade debtors –  01  
amounts owed by subsidiaries 10 181  
other taxes and social security 01 02  
deferred tax note 13 –  07  
other debtors 02 10  
prepayments and accrued income 37 44  
 50 245  
amounts falling due after more than one year 
amounts owed by subsidiaries 704 3907  
derivative financial instruments note 10 63 –  
deferred tax note 13 –  02  
other debtors –  57  
 767 3966  
 817 4211  
amounts owed by subsidiaries classified as falling due after more than one year have no specified terms of repayment but it is considered unlikely that they will 
be settled within twelve months generally these amounts bear interest at floating rates based on prevailing market interest rates applicable to the currencies 
in which they are denominated 
 
 
 
 
 
  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
174 
8 creditors amounts falling due within one year 
 
 
as at 
31 december 
 2005 
£ million 
restated
as at
1 january
2005
£ million 
trade creditors 02 05  
bank overdrafts – unsecured 37 119  
loan notes – unsecured 03 03  
amounts owed to subsidiaries 13 28  
other taxes and social security 04 03  
other creditors 57 51  
accrued dividend on preference shares note 17 21 19  
accruals and deferred income 70 36  
 207 264  
the loan notes must be repaid at par by the company on 30 june 2012 until that time the noteholders have the right to require full or part repayment at 
par half yearly on 30 june and 31 december and for this reason they are classified as current liabilities the loan notes bear interest at a fixed rate of 26 per 
annum 
 
 
9 creditors amounts falling due after more than one year 
 
 
as at 
31 december 
2005 
£ million 
as at
1 january
2005
£ million 
other creditors 
– other loans – unsecured 1561  1500  
– amounts owed to subsidiaries 1381  5051  
 2942  6551 
other loans comprise a £150 million bond drawn down by the company under the group’s euro medium term note program the bond is repayable at par on 
20 december 2011 and bears interest at a fixed rate of 8 per annum  
the carrying amount of other loans may be analysed as follows 
 
as at 
31 december 
2005 
£ million 
as at 
1 january  
2005 
£ million 
principal amount  1500  1500  
accrued interest payable 04  04  
unamortised transaction costs 03 04
carrying amount before hedge accounting 1501  1500  
fair value hedge adjustment note 10 60  –  
carrying amount 1561  1500  
amounts owed to subsidiaries classified as falling due after more than one year have no specified terms of repayment but it is considered unlikely that they will 
be settled within twelve months generally these amounts bear interest at floating rates based on prevailing market interest rates applicable to the currencies 
in which they are denominated 
 
 
 
 
 
 
 
 
 
 
 
  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued  
 
tomkins plc annual report 2005 
175
company – uk gaap 
10 derivative financial instruments 
the company holds derivative financial instruments in accordance with the group’s policy in relation to financial risk management details of that policy are set 
out in the operating and financial review  
the carrying value of derivative financial instruments held by the company was as follows 
as at 31 december 2005  as at 1 january 2005 
 
assets
£ million 
liabilities 
£ million  
assets 
£ million 
liabilities
£ million 
carrying value   
interest rate swaps  63 –   – – 
the company adopted frs 25 and frs 26 prospectively from 2 january 2005 accordingly comparative information as at 1 january 2005 has not been restated 
interest rate swaps are used to swap borrowings by the company under the group’s euro medium term note program from fixed interest rates to floating 
interest rates as at 31 december 2005 the nominal value the contracts outstanding was £150 million 1 january 2005 – £150 million these contracts have 
been designated and are effective as fair value hedges in relation to the borrowings as at 31 december 2005 an adjustment of £60 million was made to the 
carrying value of the hedged borrowings to reflect the extent to which the swaps provided an effective hedge against fair value interest rate risk 
during 2005 a net gain of £03 million was recognised in the profit and loss account that represented changes in the fair value of interest rate swaps that did 
not qualify for hedge accounting under frs 26 
the profile of interest rate swaps held by the company was as follows 
  interest rate 
  payable  receivable  
 
notional  
principal  
amount 
million variable  fixed 
variable  
rate  
index 
as at 31 december 2005    
maturity date    
– december 2011 £1500 72   80  6 month libor  
    
as at 1 january 2005    
maturity date    
– december 2011  £1500 75   80  6 month libor  
 
 
11 pensions 
the company operates a number of funded defined benefit pension plans in the united kingdom that provide benefits based upon final pensionable salary 
and the period of service of the individual employees the plan assets are held separately from the company’s assets in funds that are under the control of 
trustees day to day management of the plan assets is carried out by independent investment managers who at the request of the company are prohibited by 
the trustees from investing directly in the company  
certain employees and former employees whose pension benefits exceed the maximum that may be provided from the company’s defined benefit pension 
plans are entitled to an additional unfunded pension payable directly by the company after their retirement  
the defined benefit pension plans operated by the company are closed to new entrants 
full actuarial valuations of the plans are carried out at least every three years the last full actuarial valuation was carried out as at 5 april 2004 the principal 
assumptions used in the actuarial valuations carried out at the balance sheet date were as follows  
 
as at
31 december
2005 
as at 
1 january  
2005 
as at 
3 january 
 2004 
salary increases 40 40  40 
increase to pensions in payment 28 28  25 – 27 
increase to deferred pensions 28 28  25 – 27 
discount rate 475 55  55 
inflation rate 28 28  25 – 27 
the fair value of the plan assets and the expected rates of return were as follows  
 as at 31 december 2005  as at 1 january 2005  as at 3 january 2004 
 
 
longterm
rate of return 
expected 
 pa 
fair value
£ million 
 
  
longterm
rate of return 
expected 
 pa 
fair value 
£ million  
longterm 
rate of return 
expected 
 pa 
 
fair value
£ million 
equities 780 – 820 818  814  696    814  199  
bonds 450 701  527 – 640  634    527 – 64  244  
other assets –  –  373  05    –  –  
 1519  1335    443   financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
176 
11 pensions continued 
the net pension liability may be analysed as follows 
 
 
as at 
31 december 
2005 
£ million 
as at
1 january
2005
£ million 
fair value of plan assets 1519  1335  
present value of plan liabilities 
– funded 1612 1408
– unfunded 01 01
deficit in the plans 94 74
adjustment for unrecoverable surplus 20 14
net pension liability 114 88
the company has not recognised a deferred tax asset in respect of its pension obligations because it is considered unlikely that future taxable profits will be 
available against which the asset could be utilised 
the change in the deficit in the plans during the period may be analysed as follows 
 
year ended 
31 december 
2005 
£ million 
year ended
1 january
2005
£ million 
deficit in the plans at the beginning of the period 88 78
net pension credit recognised in the profit and loss account  15  20  
actuarial losses 70 76
transfer of pension plan from a subsidiary  –  01  
employer’s contributions 29  45  
deficit in the plans at the end of the period 114 88
the history of actuarial gains and losses recognised during the last four periods is as follows 
 
year ended 
31 december 
2005 
year ended 
1 january 
2005 
year ended  
3 january  
2004 
eight months 
ended 
31 december  
2002 
difference between the expected and actual return on plan assets     
– amount £ million 125  13  10  36 
– percentage of plan assets  82 10  23 170 
experience gainloss on plan liabilities  
– amount £ million 15  07  16  21 
– percentage of the present value of plan liabilities  09 05 32 76 
effect of changes in assumptions on present value of plan liabilities  
– amount £ million 204 82 22 13 
adjustment for unrecoverable surplus     
– amount £ million 06  –  –  –  
total actuarial gainloss     
– amount £ million 70  76 04  70 
– percentage of the present value of plan liabilities 43 54  08 252 
percentages presented in the above table are calculated based on the fair value of plan assets or on the present value of plan liabilities at the end of the 
relevant period 
 
12 sharebased incentives 
a background 
the company operates a number of sharebased compensation arrangements to provide incentives to the company’s senior management and other eligible 
employees details of the schemes in respect of which options and awards are outstanding are set out in the remuneration committee report on  
pages 50 to 55  
the information provided below relates only to such options and awards that were granted to persons who are employees of the company  
b share options 
following a review by the board in 2004 it was decided that the company’s executive share option schemes would not be renewed when they lapsed for  
the purposes of new grants in may 2005 accordingly no new options were granted under these schemes during 2005 options will continue to be granted 
from time to time under the company’s savingsrelated share option scheme which is restricted to employees who are resident for tax purposes in the  
united kingdom  
options granted under the company’s share option schemes are classified as equitysettled awards the compensation expense recognised during the period  
in respect of share options was £14 million 2004 – £07 million  
 
  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued  
 
tomkins plc annual report 2005 
177
company – uk gaap 
 
12 sharebased incentives continued 
changes in the total number of share options outstanding to employees of the company during the period were as follows 
 year ended 31 december 2005  year ended 1 january 2005 
 
options
number 
weighted 
average 
 exercise price 
pence  
options 
number 
weighted
average
exercise price
pence 
outstanding at the beginning of the period 13800056  23587    12056572 23324  
granted during the period 32983  21840    1907994  24540  
forfeited during the period 82897 15458    108085 17535  
exercised during the period 155777 24200    56425 20802  
expired during the period 130723 32783    –  –  
outstanding at the end of the period 13463642  23536    13800056 23587 
   
exercisable at the end of the period 5076142  25030    3670595  25271  
on the dates on which options were exercised during 2005 the weighted average market price of the company’s ordinary shares was 27585p per share 
2004 – 26222p per share  
the compensation expense recognised in respect of share options is based on their fair value at the grant date calculated using the blackscholes option
pricing model  
assumptions made in calculating the fair values of options granted to the company’s employees during the period were as follows 
 
year ended 
31 december 
2005 
year ended 
1 january  
2005 
options granted  32983  1907994  
weighted average fair value 8724 p 6477 p 
 
weighted average assumptions 
share price  27300 p 25033 p 
exercise price 21840 p 23905 p 
expected volatility 3046 3150 
expected life 525 years 583 years 
risk free interest rate 384 451 
expected dividends 1260 p 1200 p 
expected volatility was determined based on the historical volatility of the market price of the company’s ordinary shares over the period since may 2001 
when following a period of significant demerger activity the group was refocused on its remaining core businesses adjustments have been made to the 
expected life used in the model to reflect the effects of nontransferability exercise restrictions and behavioural considerations 
the weighted average contractual life of share options outstanding to the company’s employees at the end of the period was as follows 
 as at 31 december 2005  as at 1 january 2005 
 
outstanding
number 
weighted 
average 
remaining 
contractual life 
years  
outstanding 
number 
weighted  
average  
remaining
contractual life
years 
range of exercise prices   
– 150p to 200p 4569914 600   4646580 699 
– 201p to 250p  4730778 726   4863026 801 
– 251p to 300p  3147722 706   3147722 806 
– 301p and higher 1015228 612   1142728 633 
 13463642   13800056 
c other equitysettled awards 
the company’s principal sharebased compensation arrangement is the annual bonus incentive plan “abip” which is restricted to senior management  
and provides an award of bonus shares and deferred shares based on the profit of the business for which the participants have responsibility  
during the period awards were made over 349598 ordinary shares 2004 – 350814 ordinary shares under the abip also during the period matching 
awards were made over 9068 ordinary shares 2004 – 9380 ordinary shares under the share matching scheme “sms” which is a legacy scheme that  
is closed to new entrants  
the fair value of awards made under these schemes is measured based on the market price of the company’s ordinary shares on the date of the award where 
the awards do not attract dividends during the vesting period the market price is reduced by the present value of the dividends expected to be paid during the 
expected life of the awards the weighted average fair value of awards made during the period was 25786p 2004 – 25314p  
awards made under these schemes are classified as equitysettled awards the compensation expense recognised during the period was £08 million  
2004 – £ 05 million  
  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
178 
 
12 sharebased incentives continued 
d  cashsettled awards 
the deferred matching share purchase plan was introduced for james nicol as part of the incentive package to attract him to the company under this plan 
3045684 ordinary shares “matching shares” were awarded on 11 february 2002 following the purchase by mr nicol of 1015228 ordinary shares after 
three years from 18 february 2002 or earlier in certain circumstances the award was to vest in respect of 1015228 matching shares and the remaining 
2030456 matching shares were to vest to the extent that for every 1 penny the highest market price of the company’s ordinary shares sustained over a five
day period during the sixmonth period ended 18 february 2005 exceeded 197 pence being the market price on 18 february 2002 mr nicol was entitled to 
receive 5153 shares in the event the market price achieved under the terms of the plan was 28525 pence and of the 2030456 matching shares 454752 
vested and the balance lapsed 
under the terms of his contract mr nicol was entitled to elect to receive a cash payment in lieu of shares and for this reason this plan was classified as  
a cashsettled transaction in the event mr nicol elected to receive cash and was paid £4193000 subject to statutory deductions in settlement on  
28 february 2005  
as at 1 january 2005 the company recognised a liability of £36 million during the period the company recognised a compensation expense of £06 million 
2004 – £13 million  
 
13 deferred tax 
movements in the net deferred tax assets recognised by the company were as follows 
   
accelerated 
depreciation 
£ million 
other timing 
differences 
£ million 
total
£ million 
as at 1 january 2005  01  08 09 
charge to the profit and loss account 01 08 09
as at 31 december 2005 –  – – 
deferred tax assets are presented in the company’s balance sheet as follows  
 
as at 
31 december 
2005 
£ million 
as at
1 january
2005
£ million 
 debtors amounts falling due within one year –  07 
 debtors amounts falling due after more than one year –  02 
 –  09 
  
14 ordinary shares 
 
    
number 
 of shares 
nominal value 
£ million 
ordinary shares of 5p each      
authorised      
as at 1 january 2005 and 31 december 2005  1585164220  792  
 
   
number  
of shares  
share 
capital 
£ million 
share 
premium 
account 
£ million 
total 
£ million 
allotted and fully paid   
as at 1 january 2005  773889884  387   940 1327 
shares issued 605240  –   18 18 
as at 31 december 2005 774495124  387   958 1345 
during the period 175884 ordinary shares were allotted pursuant to options exercised under employee share option schemes for total consideration of  
£04 million in addition 429356 ordinary shares were issued on conversion of 43947 convertible cumulative preference shares at a total value of £14 million   financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued  
 
tomkins plc annual report 2005 
179
company – uk gaap 
 
15 own shares 
 
 year ended 31 december 2005  year ended 1 january 2005 
 
number  
of shares £ million  
number 
 of shares £ million 
at the beginning of the period 3449205 86   2077583 50 
own shares purchased 860338 24    1583482 41 
sale or transfer of own shares 1083382 25  211860 05
at the end of the period 3226161 85   3449205 86 
own shares comprise the company’s ordinary shares acquired to meet the expected obligations under the employee share schemes described in the 
remuneration committee report on pages 50 to 55 dividends relating to own shares held have been waived with the exception of those that are payable to 
participants in the relevant schemes 
as at 31 december 2005 1567358 ordinary shares 1 january 2005 – 2213567 ordinary shares were held in trust and 1658803 ordinary shares 1 january 
2005 – 1235638 ordinary shares were held by the company as treasury shares 
as at 31 december 2005 the market value of own shares held was £97 million 1 january 2005 – £89 million  
 
 
16 other reserves 
 
   
capital 
redemption 
reserve
£ million 
merger 
reserve 
£ million 
capital 
reserve 
£ million 
profit 
and loss 
account 
reserve
£ million 
total 
£ million 
as at 1 january 2005 – previously reported 4619 1154   565  1443 7781 
prior year adjustment see below –  –   –   553 553 
as at 1 january 2005 – restated 4619 1154  565  1996 8334 
adoption of frs 25  frs 26 note 1b –  –   –   636 636 
 4619 1154  565  2632 8970 
profit for the period attributable to equity shareholders –  –   –   902 902 
other recognised gains and losses             
– retirement benefits   
 actuarial losses –  –   –   64 64
 adjustment for unrecoverable surplus –  –   –   06 06
total recognised gains and losses – –  –  832 832 
loss on sale or transfer of own shares –  –   –   20 20 
cost of equitysettled sharebased incentives –  –   –   22  22  
dividends paid on ordinary shares –  –   –   994 994
as at 31 december 2005 4619 1154  565  2472 8810 
the profit and loss account reserve is stated after including the net pension liability of £114 million as at 31 december 2005 1 january 2005 – £88 million 
the company’s distributable reserves as at 31 december 2005 amounted to £2984 million comprising the capital reserve of £565 million and £2419 million 
of the profit and loss account reserve 
as explained in note 1b the company’s shareholders’ funds as at 1 january 2005 and loss for the year then ended were restated to reflect the retrospective 
application of certain new accounting standards the individual effect of which was as follows  
 
previously 
reported 
£ million 
frs 17 
retirement 
benefits 
£ million 
frs 20 
sharebased 
payment 
 £ million 
frs 21 
events after 
the balance 
sheet date  
£ million 
total 
effect of 
restatement 
£ million 
 
restated
£ million 
year ended 1 january 2005   
loss for the period 450 48 06 –   54 504
   
as at 1 january 2005   
debtors amounts falling due within one year 268  23 –   –   23 245 
creditors amounts falling due within one year 884 19  01  600  620 264
creditors amounts falling due after more than one year 6595 44  –   –   44 6551
net pension liability – 88 –   –   88 88
 48 01  600  553 
profit and loss account reserve  1443 48 01  600  553 1996  financial statements of the company prepared in accordance with uk gaap 
notes to the financial statements continued 
 
tomkins plc annual report 2005 
180 
 
17 convertible cumulative preference shares 
 
    
number  
of shares 
nominal value 
us million 
convertible cumulative preference shares of us50 each   
authorised   
as at 1 january 2005 and 31 december 2005   13920000  6960  
 
  carrying value 
 
number 
of shares 
nominal 
 value 
£million 
accrued  
dividend 
 payable 
£million 
total 
£ million 
allotted and fully paid  
as at 1 january 2005  10506721 3372  –  3372  
adoption of frs 25  frs 26 note 1b –  636 19 617 
 10506721 2736  19 2755  
shares converted 43947 14 –  14
foreign currency translation  –  325  02 327  
as at 31 december 2005 10462774 3047  21 3068  
the convertible cumulative preference shares “the preference shares” were issued on terms that they could be converted at any time at the shareholder’s 
option into fully paid ordinary shares of 5p each in the company on the basis of 977 ordinary shares for every one preference share so converted at the date 
of issue the conversion terms of the preference shares were equivalent to a price of 334p per ordinary share  
the company has the option at any time when the total amount of the preference shares issued and outstanding is less than 10 of the amount originally 
issued and in any event on or after 29 july 2006 to redeem in the first case all but not some only and in the second case all or any of the preference shares 
which remain issued and outstanding at that time  
until such time as the preference shares are converted or redeemed the holders have a right to receive dividends at an annual rate of 5560 per cent in 
preference to the holders of the company’s ordinary shares as at 31 december 2005 the carrying value of the preference shares included an accrued 
dividend payable of £21 million 1 january 2005 – £nil 
the holders of the preference shares are entitled to vote at a general meeting of the company where on a show of hands each holder will have one vote and 
on a poll each holder will have one vote in respect of every seven fully paid ordinary shares to which the holder would be entitled on the full exercise of his 
conversion rights except if two or more consecutive quarterly dividends are in arrears whereupon on a poll each holder shall have one vote in respect of every 
fully paid ordinary share to which the holder would be entitled on the full exercise of his conversion rights and such voting rights would continue until such 
time as any arrears of dividends have been paid in full 
on a return of assets on liquidation or otherwise other than on redemption or repurchase of the preference shares the assets of the company available to 
shareholders will be applied first in repaying the capital paid up or credited as paid up in respect of the preference shares together with all arrears and accruals 
of dividends to the holders of the preference shares and any other classes of shares ranking pari passu as to capital with the preference shares 
 
18 contingencies 
the company has guaranteed the borrowing facilities of certain subsidiaries the maximum borrowings permitted under these facilities as at 31 december 
2005 was £8172 million 1 january 2005 – £8295 million drawings against these facilities as at 31 december 2005 amounted to £4416 million 2004 
£3099 million the company has also guaranteed certain property leases and performance bonds entered into in the ordinary course of business by certain  
of its subsidiaries 
 
 
  investor information 
group five year summary  
 
tomkins plc annual report 2005 
181
investor information 
 ifrs  uk gaap in ifrs format 
£ million except where stated otherwise 
year ended 
31 december 
2005 
year ended 
 1 january 
 2005  
year ended  
 1 january 
2005 
year ended  
3 january  
2004 
restated
1
eight months 
ended  
31 december 
2002 
restated
1
year ended 
30 april  
2002 
  
continuing operations  
sales 31824 29741 29741 30733  20333 32763 
  
profit from operations before restructuring initiatives 3085 3043 2653 2593  1701 2763 
restructuring costs 203 205 175 255 320 261
gainloss on disposal and exit of businesses 85 25 94 216 106 67 
profit from operations 2967 2863 2384 2122  1487 2569 
   
profit before tax 2577 2603 2233 2038  1474 2635 
  
profit for the period from continuing operations 1987 2092 1815 2483  1193 1946 
  
discontinued operations  
profitloss for the period from discontinued 
operations 25 09 06 684  46 17
  
profit for the period 2012 2101 1809 1799  1239 1929 
minority interests 90 101 83 81 61 54
dividends on preference shares – 156 156 289 245 393
profit for the period attributable to equity 
shareholders 1922 1844 1570 1429  933 1482 
  
earnings per ordinary share  
basic  2492p 2393p 2037p 1853p 1210p 1916p
diluted 2379p 2281p 1967p 1801p 1182p 1878p
  
dividends per ordinary share 1323p 1260p 1260p 1200p 800p 1200p
  
shareholders’ equity 6645 4665 4484 4068  3160 3429 
minority interests 484 416 421 333  380 342 
total equity 7129 5081 4905 4401  3540 3771 
  
enterprise value 
2
 29628 25493 25493 26820  20345 26505 
  
ordinary share price at the end of the period 29975p 25425p 25425p 26900p 19000p 26400p
  
average number of employees 37324 36720 36720 39328  39596 40670 
1
 restated to reflect the adoption during the year ended 3 january 2004 of uitf38 “ accounting for esop trusts”  
2
 enterprise value represents market capitalisation and net debt including preference shares 
the group adopted ifrs with a transition date of 4 january 2004 in accordance with ifrs1 “firsttime adoption of ifrs” the group has not restated its 
results for periods ending prior to that date in accordance with ifrs  
an analysis of the adjustments that were made to restate the group’s financial position as at 1 january 2005 and its results for the year then ended in 
accordance with ifrs is presented in the section of this document entitled “transition to ifrs” on pages 108 to 121 if the financial information presented 
above for earlier periods was to be restated in accordance with ifrs the adjustments that would be necessary would be similar in nature to although may 
differ in magnitude from those outlined in that section in order to assist comparison the financial information for those periods and for the year ended  
1 january 2005 prepared in accordance with uk gaap is represented above in the format required under ifrs 
 
 
 
 
 
  investor information 
subsidiaries and associates 
tomkins plc annual report 2005 
182 
details of the company’s principal trading subsidiaries and associates as at 31 december 2005 are set out below unless otherwise stated each entity is wholly 
owned by the group and is registered in england and wales a complete list of the company’s subsidiaries and associates will be filed with the companys 
annual return 
 
industrial  automotive 
 
dearborn midwest conveyor 
company 
heavy duty conveyor systems  
for oem plants 
us 
dexter axle company inc 
manufactured housing mobile  
home and trailer products 
us 
dongfengfujithomson 
thermostat co ltd 
ordinary shares – 32 owned 
automotive thermostats 
china 
eifeler maschinenbau gmbh 
hydraulic tube fittings  
germany 
formflo limited 
powertrain components systems  
and assemblies 
gates gmbh 
belts 
germany 
gates sa 
belts hose and couplings 
france 
gates argentina sa 
belt and hose distributor 
argentina 
gates australia pty ltd 
belt and hose distributor 
australia 
gates do brasil industria e 
comercio ltda 
belts and hose 
brazil 
gates canada inc 
belts and hose 
canada 
gates europe nv 
belts and hose 
belgium 
gates india private ltd 
hose 
india 
gates korea company ltd 
ordinary shares – 51 owned 
belts 
korea 
gates mectrol inc 
belts 
us 
gates polska spzoo 
belts 
poland 
gates pt spain sa 
formerly gates vulca sa 
belts and hose 
spain 
the gates rubber company 
belts and hose 
us 
gates rubber company nsw  
pty ltd 
hose 
australia 
gates rubber company 
singapore pte ltd 
hose distributor 
singapore 
gates rubber de mexico sa  
de cv 
belts and hose 
mexico 
gates rubber shanghai co ltd 
hose distributor 
china 
gates uk ltd 
belts and couplings 
scotland 
gates unitta asia company ltd 
ordinary shares – 51 owned 
belts 
japan 
gates unitta asia trading  
company pte ltd 
ordinary shares – 51 owned 
belts 
singapore 
gates unitta india private  
company ltd 
ordinary shares – 51 owned 
belts 
india 
gates unitta korea  
company ltd 
ordinary shares – 51 owned 
belts 
korea 
gates unitta power transmission 
shanghai ltd 
ordinary shares – 51 owned 
belts 
china 
gates unitta power transmission 
suzhou ltd 
ordinary shares – 51 owned 
belts 
china 
gates unitta thailand company 
ltd 
ordinary shares – 51 owned 
belts 
thailand 
ideal 
hose clamps 
us 
ideal international sa 
ordinary shares – 40 owned 
hose clamps 
mexico 
le technologies llc 
recreational vehicle frames 
us 
plewsedelmann 
lubrication tools 
us 
pyung hwa cmb co ltd 
ordinary shares – 21 owned 
belts 
korea 
schrader sa 
valves and fittings 
france 
schrader bridgeport brasil ltda 
valves and fittings 
brazil 
schraderbridgeport international 
inc 
valves and fittings 
us 
schrader duncan ltd 
ordinary shares – 50 owned 
valves and fittings 
india 
schrader electronics ltd 
automotive electronics 
northern ireland 
schraderlu hai rubber metal 
kunshan co ltd 
ordinary shares – 60 owned 
valves and fittings 
china 
stackpole limited 
powertrain components systems  
and assemblies 
canada 
standardthomson corporation 
automotive thermostats 
us 
stant manufacturing inc 
automotive closure caps 
us 
trico ltd 
wiper blades and systems 
trico latinoamericana sa 
wiper blades and systems 
argentina 
trico products corporation 
wiper blades and systems 
us 
trico pty ltd 
wiper blades and systems 
australia 
 
building products 
 
air system components lp 
heating ventilating and air 
conditioning components 
us 
aquatic industries inc 
whirlpools  
us 
hart  cooley inc 
heating ventilating and air 
conditioning components 
us 
lasco bathware inc 
fibreglass and acrylic baths and 
whirlpools 
us 
lasco fittings inc 
pvc pipe fittings 
us 
nrg industries inc 
commercial air conditioning 
components 
us 
philips products inc 
aluminium wood and vinyl windows 
vinyl clad steel doors and ventilating 
devices 
us 
ruskin company 
air fire and smoke dampers  
louvres and fibreglass products 
us 
 
ruskin air management ltd 
air handling products and louvred 
windows 
ruskin thailand co ltd 
commercial and industrial air 
firesmoke and control dampers 
thailand 
 associate  investor information 
general information 
 
tomkins plc annual report 2005 
183
investor information 
annual general meeting 
shareholders are invited to attend the annual general meeting to be held  
at 1100 am on monday 22 may 2006 the venue is the queen elizabeth ii 
conference centre broad sanctuary westminster london sw1p 3ee  
the nearest underground stations are st james’s park and westminster 
dividends 
the final dividend of 816 pence per ordinary share will be paid on 31 may 
2006 to shareholders on the register at the close of business on 21 april 
2006 for holders of american depositary receipts adrs the dividend 
declared in pence is converted to us dollars on the dividend payment date 
using the exchange rate prevailing on that day 
payment of dividend 
shareholders who have mandated their dividends to be credited to a 
nominated bank or building society account should note that dividends  
are paid automatically to their account through the bankers’ automated 
clearing services bacs with the associated tax voucher being sent direct  
to shareholders at their registered address unless requested otherwise if the 
nominated account is with a bank or building society which is not a member 
of bacs both the payment and tax voucher are sent to the account holding 
branch shareholders who do not currently mandate their dividends and who 
wish to have their dividend paid direct to a bank or building society account 
should complete a dividend mandate instruction form obtainable from lloyds 
tsb registrars the causeway worthing west sussex bn99 6da or by 
telephoning 0870 600 3953 
dividend reinvestment plan 
the company offers a dividend reinvestment plan this allows shareholders 
to invest their cash dividend in purchasing shares of the company in the 
market the company’s registrar arranges on behalf of participants through 
the agency of a suitably authorised stockbroking business the purchase of 
the maximum whole number of ordinary shares possible on or as soon as 
reasonably practicable after the dividend payment date favourable dealing 
costs have been arranged for further details or an application form please 
write to lloyds tsb registrars share dividend team the causeway 
worthing west sussex bn99 6da or telephone their helpline on  
0870 241 3018 
individual savings accounts isas 
a tomkins isa enables uk residents to invest in the company in a tax 
efficient manner you can obtain more information on isas from our 
corporate isa provider lloyds tsb registrars the causeway worthing  
west sussex bn99 6uy or by telephoning 0870 242 4244 
share dealing 
a telephone and internet dealing service has been arranged through lloyds 
tsb registrars which provides a simple way of selling tomkins ordinary 
shares commission is 05 with a minimum charge of £20 for telephone 
dealing and £1750 for internet dealing for telephone sales call  
0870 850 0852 between 830 am and 430 pm monday to friday and  
for internet sales log on to wwwshareviewcoukdealing you will need  
your shareholder reference number shown on your share certificate or tax 
voucher a weekly postal dealing service is also available and a form together 
with terms and conditions can be obtained by calling 0870 242 4244 
commission is 1 with a minimum charge of £10 
global invest direct 
a simple dealing service is available to us residents only for buying and 
selling tomkins adrs details can be obtained from jpmorgan chase bank 
na po box 3408 south hackensack nj 076063408 or by telephoning  
1 800 428 4237 or emailing adrjpmorgancom 
world wide web 
the company’s website address is shown on the back cover of this report 
all tomkins’ recent results announcements and press releases are accessible 
together with the latest full annual report and summary annual report in 
addition callers may obtain direct access to the websites of many tomkins 
operating companies 
share price information 
the price of tomkins’ ordinary shares is available on the company’s website 
the financial times cityline service also provides share price information 
this telephone service is available on 0906 843 4244 and calls within the uk 
are charged at 60 pence per minute at all times in addition the share price 
is listed in most national daily newspapers and on teletext 
registrar 
administrative enquiries concerning shareholdings in tomkins plc  
such as loss of a share certificate dividend payment instructions or  
a change of address should be notified direct to the registrar lloyds tsb 
registrars the causeway worthing west sussex bn99 6da telephone 
0870 600 3953 your correspondence should refer to tomkins plc  
quoting the reference 0398 and state the registered name and address  
of the shareholder 
every effort is made to prevent multiple mailing of documents to 
shareholders if you have received more than one copy of this report and 
would like to amalgamate your holdings please complete the enclosed 
shareholder register multiple accounts form and return it to the registrar  
at the address on the form 
electronic communication 
the registrar operates a share register internet enquiry service to provide 
shareholders with details of their shareholdings to register for the service 
please go to wwwshareviewcouk you will need your shareholder 
reference which can be found on your share certificate or tax voucher and 
you will be asked to select your own pin a user id will then be posted to 
you once registered shareholders may elect to receive future shareholder 
information and company documents in electronic format the main 
benefits of this system are speed and ease of use while saving money for 
your company and reducing the demand on natural resources a visit to 
wwwshareviewcouk will also provide you with more details of the service 
and practical help and information on other share registration matters 
further details can be found on the electronic communications letter 
enclosed with this report 
electronic proxy voting 
shareholders may register their voting instructions for the forthcoming 
annual general meeting via the internet if you have registered for the 
registrar’s shareview service described above you may submit your voting 
instructions by logging on to your shareview portfolio and accessing the 
company meetings – tomkins site if you have not registered with 
shareview you may still register your vote electronically by going to 
wwwsharevotecouk you will be required to key in the three security 
numbers printed on your form of proxy to access the voting site 
us listing 
tomkins’ ordinary shares are listed on the new york stock exchange in the 
form of adrs each adr represents four tomkins ordinary shares tomkins is 
subject to the regulations of the securities and exchange commission sec 
in the usa as they apply to foreign companies and files with the sec its 
annual report on form 20f and other information as required adr holders 
are not members of the company but may instruct jpmorgan chase bank 
na which administers the tomkins adr programme as to the exercise of 
voting rights pertaining to the number of ordinary shares represented by 
their adrs 
trading symbols 
tomkins’ london stock exchange sedol number is 0896265 and its trading 
symbol is tomk the company’s trading symbol for its american depositary 
receipts is tks 
directors’ report and accounts – companies house 
in accordance with the requirements of the registrar of companies in 
england and wales the “registrar” and following the passing of the 
resolution to be proposed at the 2006 annual general meeting to receive 
the financial statements a copy of the annual report omitting photographic 
representations and with such further modifications as may be necessary  
to comply with such requirements will be lodged with the registrar in 
accordance with the companies act 1985 as amended after being  
so lodged further copies of the full annual report or the summary annual 
report in the form sent to shareholders will be available from the company 
secretary upon request  investor information 
notice of meeting 
 
tomkins plc annual report 2005 
184 
notice is hereby given that the eightieth annual general meeting of  
the company will be held at the queen elizabeth ii conference centre 
broad sanctuary westminster london sw1p 3ee on monday 22 may 2006 
at 1100 am to transact the following business 
1 to receive the directors’ report and financial statements for the  
year ended 31 december 2005 together with the independent  
auditors’ report 
2 to approve the remuneration committee report for the year ended  
31 december 2005 
3 to declare a final dividend of 816p per ordinary share for the year 
ended 31 december 2005 
4 to reappoint as a director mr r d gillingwater 
5 to reappoint as a director mr d d s robertson 
6 to reappoint as a director mr d h richardson 
7 to reappoint as a director mr k lever 
8 to reappoint deloitte  touche llp as independent auditors 
9 to authorise the directors to determine the independent  
auditors’ remuneration 
to consider and if thought fit pass the following resolution which will be 
proposed as an ordinary resolution 
10 that the directors be and they are hereby authorised in accordance 
with and subject to the terms of article 5 of the company’s articles  
of association to allot relevant securities up to an aggregate nominal 
amount of £12881003 
to consider and if thought fit pass the following resolutions which will  
be proposed as special resolutions 
11 that the directors be and they are hereby authorised in accordance 
with and subject to the terms of article 6 of the company’s articles  
of association to allot shares for cash for the purposes of paragraph ii 
of article 6 up to an aggregate nominal amount of £1936297 
12 that the company be and is hereby generally and unconditionally 
authorised in substitution for any authority to purchase ordinary shares 
of 5p each in the capital of the company previously conferred save  
to the extent the same has been exercised to make market purchases 
within the meaning of section 1633 of the companies act 1985 of 
ordinary shares of 5p each in the capital of the company “shares” 
provided that 
a the maximum number of shares hereby authorised to be acquired is 
77451900 shares or if lower such number of shares as is equal to 
10 per cent of the issued ordinary share capital of the company at 
the close of business on friday 19 may 2006 
b the maximum price which may be paid for any share is an amount 
equal to 105 per cent of the average of the middle market 
quotations for a share as derived from the london stock exchange 
daily official list for the five business days immediately preceding 
the day on which the share is contracted to be purchased and the 
minimum price which may be paid for any such share shall be the 
nominal value of that share and 
c this authority shall expire on 30 june 2007 or if earlier at the 
conclusion of the annual general meeting of the company to be 
held in 2007 but a contract of purchase may be made before such 
expiry which will or may be executed wholly or partly thereafter 
and a purchase of shares may be made in pursuance of any  
such contract 
to consider and if thought fit pass the following resolution which will be 
proposed as an ordinary resolution 
13  a  the establishment of the tomkins 2006 performance share plan  
a summary of the principal provisions of which is set out in the 
appendix to the letter from the chairman of the company to 
shareholders dated 20 april 2006 be and it is approved and the 
directors be and they are authorised to do all acts and things 
necessary to establish and carry it into effect and 
b the directors be and they are authorised to vote and be  
counted in the quorum on any matter connected with the plan 
except that no director may vote or be counted in the quorum  
in respect of his own participation and any prohibition on voting 
contained in the articles of association of the company be and  
is relaxed accordingly 
by order of the board 
n c porter 
secretary 
registered office 
east putney house 
84 upper richmond road 
london sw15 2st 
20 april 2006 
 
notes 
1  any shareholder entitled to attend and vote at this meeting may appoint a proxy to 
attend and vote on hisher behalf a proxy need not be a member of the company  
a white form of proxy for use by ordinary shareholders andor a green form of proxy 
for use by convertible cumulative preference shareholders isare enclosed to be valid 
proxy forms must reach the company’s registrar by 1100 am on 20 may 2006 
2 only those shareholders registered in the register of members of the company  
as at 1100 am on 20 may 2006 shall be entitled to attend andor vote at this 
meeting in respect of the number of shares registered in their name at that time 
changes to entries on the relevant register of securities after 1100 am on 20 may 
2006 shall be disregarded in determining the rights of any person to attend andor 
vote at this meeting 
3 crest members who wish to appoint a proxy or proxies through the crest electronic 
proxy appointment service may do so for this meeting and any adjournments thereof 
by using the procedures described in the crest manual crest personal members  
or other crest sponsored members and those crest members who have appointed 
a voting service providers should refer to their crest sponsor or voting service 
providers who will be able to take the appropriate action on their behalf 
in order for a proxy appointment or instruction made using the crest service to be 
valid the appropriate crest message a “crest proxy instruction” must be properly 
authenticated in accordance with crestco’s specifications and must contain the 
information required for such instructions as described in the crest manual  
the message regardless of whether it constitutes the appointment of a proxy or an 
amendment to the instruction given to a previously appointed proxy must in order  
to be valid be transmitted so as to be received by the issuer’s agent id 7ra01 by 
1100 am on 20 may 2006 for this purpose the time of receipt will be taken to be 
the time as determined by the timestamp applied to the message by the crest 
applications host from which the issuer’s agent is able to retrieve the message by 
enquiry to crest in the manner prescribed by crest after this time any change  
of instructions to proxies appointed through crest should be communicated to  
the appointee through other means 
crest members and where applicable their crest sponsors or voting service 
providers should note that crestco does not make available special procedures  
in crest for any particular messages normal system timings and limitations will 
therefore apply in relation to the input of crest proxy instructions it is the 
responsibility of the crest member concerned to take or if the crest member  
is a crest personal member or sponsored member or has appointed a voting service 
providers to procure that his crest sponsor or voting service providers takes 
such action as shall be necessary to ensure that a message is transmitted by means  
of the crest system by any particular time in this connection crest members and 
where applicable their crest sponsors or voting service providers are referred in 
particular to those sections of the crest manual concerning practical limitations  
of the crest system and timings 
the company may treat as invalid a crest proxy instruction in the circumstances  
set out in regulation 355a of the uncertificated securities regulations 2001  
4 copies of the service contracts of executive directors the letters of appointment  
of nonexecutive directors and the register of directors’ interests and the interests  
of their connected persons in the share capital of the company will be available for 
inspection during usual business hours on any weekday public holidays excepted at 
east putney house 84 upper richmond road london sw15 2st from the date of 
this notice until the time of the meeting and at the queen elizabeth ii conference 
centre from 15 minutes before the meeting until it ends  
  investor information 
share price information 
 
185
investor information 
the price range of a tomkins ordinary share and adr during the year ended 31 december 2005 was 
 
analysis of ordinary shareholdings at 13 february 2006 
 number of shareholders 
number of  
shares 000 
 of share 
capital 
by type    
individuals 19371  59799  772  
banks insurance companies pension funds and other corporates 4399  714720  9228  
 23770  774519  10000  
by size    
1500 5514  1328  017  
5012500 11533  15129  195  
25015000 3507  12538  162  
500120000 2268  20696  267  
2000150000 360  11512  149  
50001100000 136  9842  127  
100001500000 237  55305  714  
above 500000 215  648169  8369  
 23770  774519  10000  
 
 
financial calendar 
 
 ordinary shares of 5p each 
pence 
 american depositary receipts 
us dollars 
 high low  high low 
1st quarter 29000  25875   2248  1924  
2nd quarter 27625  24200   2132  1831  
3rd quarter 28925  26375   2157  1856  
4th quarter 30250  26050   2129  1860  
2006  
1st quarter results announcement – quarter to 1 april 2006 3 may 2006 
annual general meeting – 2006 22 may 2006 
final dividend payment – year ended 31 december 2005 31 may 2006 
2nd quarter and interim results announcement – quarter to 1 july 2006  august 2006 
3rd quarter results announcement – quarter to 30 september 2006 october 2006 
interim dividend payment – six months ending 1 july 2006 november 2006 
year end 30 december 2006 
  
2007  
preliminary announcement – year ending 30 december 2006 february 2007 
1st quarter results announcement  may 2007 
annual general meeting – 2007 may 2007 
final dividend payment – year ending 30 december 2006 may 2007 
designed and produced by black sun plc 
printed by impressions 
this document is printed on look this paper is 
produced from totally chlorine free tcf pulps and 
the wood for these is sourced from fully sustainable 
forests the manufacturing mill is certified to  
iso 9002 quality assurance standard the iso 14001 
environmental management standard and registered 
with emas the eu environmental management  
and audit system tomkins plc annual report 2005  annual report 2005
proﬁtable growth through technology
website
for further information on
tomkins please access our
website at
wwwtomkinscouk
corporate office 
registered office
tomkins plc
east putney house
84 upper richmond road
london sw15 2st
tel 020 8871 4544
fax 020 8877 9700
tomkins plc annual report 2005


Summary:
 tomkins plc annual report 2005
review 2005
1
2005 2004
revenue £31824m £29741m
proﬁt from operations before restructuring initiatives £3085m £3043m
restructuring initiatives net £118m £180m
proﬁt from operations £2967m £2863m
proﬁt before tax on a comparable basis
1
£2698m £2603m
proﬁt before tax £2577m £2603m
fully diluted earnings per share 2379p 2281p
total dividends per share 1323p 1260p
net debt
2
£3345m £2445m
1
presented on a proforma basis to remove the impact of ias 32 and ias 39 from 2005 see page 33 in the operating and
financial review section for a breakdown
2
net debt is shown excluding the convertible cumulative preference shares
financial highlights
• revenue increased by 70 per cent to £31824 million 2004 £29741 million 
• proﬁt from operations before restructuring initiatives increased by 14 per cent to
£3085 million 2004 £3043 million
• operating margin based on proﬁt from operations before restructuring initiatives was 
97 per cent 2004 102 per cent with doubledigit operating margins maintained in
industrial  automotive and air systems components
• proﬁt from operations at £2967 million 2004 £2863 million was up by 36 per cent
• fully diluted earnings per share were ahead by 43 per cent at 2379 pence 2004 2281 pence
• operating cash ﬂow increased to £2170 million 2004 £1817 million and cash conversion
increased to 753 per cent 2004 640 per cent
• final dividend of 816 pence resulting in a full year dividend of 1323 pence 
2004 1260 pence up by 50 per cent
• completed ﬁve acquisitions with annualised sales of more than 250 million c £140 million
since december 2004
• continued expansion in high growth markets such as china and india
highlights of the year
group revenue 70
0 700 1400 2100 2800 3500
05
2005 2004
04
05 31824
29741
£m
group profit from operations 36
0 70 140 210 280 350
05
2005 2004
04
05 2967
2863
£m
the group reports its results in sterling under international financial reporting standards “ifrs” and in us dollars under us gaap unless
otherwise stated the commentary in this annual report refers to the ifrs ﬁnancial information for the year
commentary on the results compares audited results for the 364day period from 2 january 2005 to 31 december 2005 “2005” with audited
results for the 364day period from 4 january 2004 to 1 january 2005 “2004”
approximately 69 per cent of the group’s revenues arise in the usa financial information has been translated at an average rate of £1182
in the year ended 31 december 2005 £1183 in 2004 the yearend rate at 31 december 2005 was £1172 yearend rate at 1 january
2005 was £1192
in this annual report the term “underlying” indicates that the amount has been adjusted for the effects of currency translation and
acquisitions and disposals and in the case of proﬁt from operations the amount is also stated net of restructuring initiatives some ﬁgures
and ratios mentioned are not readily available from the ﬁnancial information and details of how these ﬁgures and ratios have been arrived at
are set out in the operating and financial review