annual report and accounts 2012
rotork annual report and accounts 2012
redefining
flow control rotork is recognised as the world’ s leading designer and manufacturer 
of industrial valve actuation and ﬂow control equipment its products 
are used in every industry where there is a need to control the ﬂow of 
liquids gasses or powders from power stations in the uk to water 
treatment plants in china oil pipelines in russia to solar power stations 
in spain
divisions
the group comprises four divisions
	 rotork controls
	 rotork fluid systems
	 rotork gears
	 rotork instruments
overview
01 highlights
02 our results
04 rotork at a glance
06 our markets
08 business model
10 strategy
business review
12 chairman’s statement
14 chief executive’s review
16 controls
18 fluid systems
20 gears
22 instruments
24 financial review
28 key performance indicators
30 statement of principal risks and 
uncertainties
32 corporate social responsibility
directors
40 board of directors
42 the rotork management board
governance 
44 corporate governance
53 remuneration report
62 report of the directors
financial statements
65 independent auditor’s report
66 consolidated income statement
66 consolidated statement of 
comprehensive income
67 consolidated balance sheet
68 consolidated statement of changes  
in equity
69 consolidated statement of cash ﬂows
70 notes to the group ﬁnancial 
statements
108 rotork company balance sheet
109 notes to the company ﬁnancial 
statements
company information
115 ten year trading history
116 share register information
117 corporate directory
everyday  everyday 
everywhere everywhere
245 pm
bathuk
controls rotork plc annual report 2012
1
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
fluid systems
345 pm
parabiagoital y
745 am
calgarycanada
1045 pm
shanghai
china
247
everyday
rotork is the only uk listed company dedicated to 
developing selling and supporting the best ﬂow 
control products around the world to improve 
efﬁciency assure safety and protect the environment 
	 22 manufacturing centres
	 146 ofﬁces
	 over 2800 employees worldwide
gears
instruments
controls rotork plc  annual report 2012
2
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
our results
the production of virtually everything that contributes 
to our modern comfortable lifestyle and improved 
environment rely on rotork actuators and flow control 
products somewhere in the process
since the earliest days of the business rotork has focused 
on serving the industry and truly understands the 
challenges faced by companies wanting to control the 
flow of liquids gasses and powders 
rotork puts quality innovation and customer service at 
the heart of everything it does
operational highlights
 à record order intake revenue 
and profit
 à product launches
 à investment in infrastructure
 à acquisition integration
 à soldo and schischek acquisition
revenue
£5117m 143
operating profit

£1319m 138
profit before tax

£1316m 130
earnings per share

1093p 136
 before the amortisation of acquired intangible assets rotork plc annual report 2012
3
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
controls
rotork controls manufactures electric valve 
actuators for heavyduty valve applications 
highly accurate process control actuators and 
network control systems it has manufacturing 
facilities in the uk usa china india and 
malaysia 
fluid systems
rotork fluid systems specialises in the 
production of pneumatic and hydraulic 
actuators and control systems predominately 
based from the uk usa italy germany and 
sweden there are also ‘centres of excellence’ 
strategically located around the world 
site services
in each of our divisions site services staff are 
dedicated to providing customer service and 
support carrying out new installations and 
delivering retroﬁt projects these teams are 
based out of service centres around the world 
and are complemented by factorytrained 
agents
operating proﬁt 2012

£948m
operating proﬁt 2012

£246m
gears
facilities in the uk netherlands italy china 
usa and india manufacture complete gearbox 
assemblies as well as a wide range of switch 
boxes valve position monitors and adaption 
accessories for use with actuators and as direct 
valve operators
instruments 
rotork instruments are experts in ﬂow control 
pressure control ﬂow measurement and 
pressure measurement the production facilities 
in the usa and italy are complemented by 
a large network of distribution and support 
centres
operating proﬁt 2012

£121m
operating proﬁt 2012

£51m rotork plc  annual report 2012
4
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
instruments gears fluid systems controls
0
50
100
150
200
250
300
instruments gears fluid systems controls
■ 2011
■ 2012
0
50
100
150
200
250
300
other industrial
 mining
power water oil  gas
0
50
100
150
200
250
300
uk middle
east
africa
latin
 america
europe eeurope asia
paciﬁc
far east
namerica
exc
mexico
£m
£m
£m
0
50
100
150
200
250
300
instruments gears fluid systems controls
■ 2011
■ 2012
0
50
100
150
200
250
300
other industrial
 mining
power water oil  gas
0
50
100
150
200
250
300
uk middle
east
africa
latin
 america
europe eeurope asia
paciﬁc
far east
namerica
exc
mexico
£m
£m
£m
0
50
100
150
200
250
300
instruments gears fluid systems controls
■ 2011
■ 2012
0
50
100
150
200
250
300
other industrial
 mining
power water oil  gas
0
50
100
150
200
250
300
uk middle
east
africa
latin
 america
europe eeurope asia
paciﬁc
far east
namerica
exc
mexico
£m
£m
£m
group revenue by division group revenue by enduser market group revenue by enduser destination
at a glance
 	 committed to innovation
innovation is at the core of the 
business and in 2012 there were a 
number of product launches including 
the introduction of the third 
generation of our ﬂagship iq range 
of intelligent actuators
innovation is embedded in rotork’s 
culture and all employees are 
encouraged to bring new ideas both 
in terms of product and service 
offering to the customer 
the group has a custombuilt facility 
rotork innovation and design 
engineering centre ridec that is 
a dedicated centre for research and 
development work serving all of 
rotork’s products and global activity
 	 serving the world
rotork has always been committed  
to a global customer base supporting 
operations in some of the most 
remote and challenging 
environments 
we align our network of ofﬁces and 
manufacturing plants to support new 
and existing customers’ activities 
around the world and will continue 
to do this 
rotork has 22 established 
manufacturing facilities a global 
network of national and local ofﬁces 
and agents who can truly provide a 
worldwide service customers can 
locally source rotork’s products 
supported by lifeofplant maintenance 
repair and upgrade services
rotork operates 247 in 
94 countries with direct 
presence in 33
everyday
everywhere
•  a truly global company offering 
a local service
•  rotork has over 320 service 
engineers globally 
•  nearly 100000 actuators under 
preventative maintenance 
contracts  rotork plc annual report 2012
5
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
there are currently 11 
manufacturing facilities 
with one opening in 
2013 this region has 18 
ofﬁces with a further 
four due to be opened or 
expanded during 2013
europe africa  
middle east
245 pm southamptonuk
this region opened a 
new manufacturing 
facility in 2012 taking 
the number of sites 
to four there are 29 
ofﬁces with three new 
and two expansions due 
in 2013
asia paciﬁc
145 am new south walesaustralia
americas
we have seven 
manufacturing facilities 
and 14 ofﬁces in this 
region in 2012 we 
opened an ofﬁce in brazil 
and plan to move to a 
new ofﬁce in mexico 
during 2013
645 am californiausa rotork plc  annual report 2012
6
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
our markets
gears controls
fluid systems
19
instruments
12
23
18
controls market 
£17bn
rotork
share
gears controls
fluid systems
19
instruments
12
23
18
fluid systems market 
£850m
gears controls
fluid systems
19
instruments
12
23
18
gears market 
£180m
gears controls
fluid systems
19
instruments
12
23
18
instruments market 
£180m
rotork
share
rotork
share
rotork
share
market drivers
oil  gas
 à growth in global energy demand
 à deep water exploration  production
 à unconventional oil  gas
 à global lng trade
 à strategic storage and reserves
 à geographic reallocation of refining 
capacity
power
 à urbanisation  population growth
 à industrialisation in developing countries
 à need for emissions reductions and 
increased efficiency
 à long term energy security – investment 
in renewables
water  sewage
à population growth
à water scarcity and urbanisation
 à industrialisation water reuse and 
desalination
 à ageing assets in developed economies
industrial mining  other
à  demand for metals minerals and 
processed goods from developing 
countries
 à increased demand for vehicles from 
both commercial and consumer sectors
 à improved standards of living demand 
for heating ventilation and air 
conditioning hvac processed  
food  drink
industrial
water
oil  gas rotork plc annual report 2012
7
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
flow control
market  £40bn
water  birmingham  uk
on severn trent water’s 
minworth sewage treatment 
works rotork has supplied over 
250 profibus networkenabled 
iq pro electric actuators
in all areas actuators operate 
penstocks to control the flow 
through the works and on the 
activated sludge plant actuators 
are also installed on the air flow 
control
opportunities for growth
controls
 expansion of footprint
  integration of schischek
  new product introductions
fluid systems
  new centres of excellence
  product releases
  current and new markets
gears
  relocation of leeds factory
  new product ranges
  rotork valvekits
instruments
  international expansion
  acquisitions
245 pm
birminghamuk
oil  gas
power
addressable market
 £29bn
product group  market rotork
  size share
■ instruments £018bn 12
■ gears £018bn 23
■ fluid systems £085bn 19
■ controls £170bn 18
source rotork internal data bfpa nfpa rotork plc annual report 2012
8
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
quality  
control
product  
assembly
innovation
sales project 
management
sourcing 
partnerships
site services
industry
knowhow
business model
t o maintain a marketleading position we aim to provide high 
quality technically advanced innovative products coupled with a 
superior level of service that supports our customers’ activities around 
the world
business model
our global network of ofﬁces and manufacturing sites expands each year to ensure that 
support is local to the customer the same rotork culture is found at all of our sites and it 
is something we strive to bring to new ofﬁces and acquired businesses so that customers 
get consistently highquality service throughout the world we operate an assetlight 
business model with most of our manufacturing sites purchasing components in a 
ﬁnished form and then assembling to order  rotork plc annual report 2012
9
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
competitive strengths
  technological leadership – understanding our customers 
and the markets we serve allows us to continue to develop 
new products and lead the evolution of actuator and ﬂow 
control products
  global footprint – our ofﬁces around the world allow us 
to manage the complex global projects which account for 
the majority of sales and to support our customers in the 
ﬁeld rotork site services work with our customers by 
installing and commissioning our actuators and by meeting 
their service requirements
  diverse end market exposure – wherever liquids gases 
or powders are being moved and the process needs 
to be automated or contain failsafe controls actuators and 
ﬂow control products are required we highlight the oil  
gas power and water markets because they use actuators 
most intensively but we sell to many other markets some  
of these markets span many applications and our broad 
product portfolio enables us to address them
  assetlight business model – over 90 of our products 
are built using an outsourced manufacturing model with our 
workforce assembling components and conﬁguring products 
to match customer orders we have developed and call upon a 
global network of suppliers who manufacture the components 
for our products to our designs and who use our tooling
  quality – our products are used in demanding environments 
where consistency of performance is often critical to a 
process customers expect rotork products to be reliable  
and our quality control procedures which extend to cover  
our supply chain are central to delivering this
market drivers
many of the markets we serve are recognised as structural 
growth markets the growth may be driven by investment in 
new infrastructure to support urbanisation or industrialisation 
automation or refurbishment of existing plants population 
growth the exploitation of new technologies and the desire to 
extract natural resources from ever more challenging locations 
are also drivers in some of our markets 
assetlight
815 pm
chennaiindia
infrastructure
urbanisation
automation
population
growth
new
technologies rotork plc  annual report 2012
10
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
strategy
strategic priorities achievements 2012 objectives 2013
sales growth – grow our markets by 
increasing our international coverage 
broadening our endmarket exposure and 
continuing to integrate our new 
acquisitions
opened new sales offices in brazil russia 
korea and japan restructured the uk sales 
operation and expanded service 
capabilities in other offices
open two new regional offices in australia 
and larger premises in mexico and spain in 
response to particularly active markets in 
these areas continue to build knowledge 
of a number of less well developed 
endmarkets and consider these 
opportunities
product development – introduce and 
develop new products in each of the 
divisions 
there were a number of product launches 
during the year in all divisions with iq3 in 
the controls division being the most 
significant 
a number of product launches are 
scheduled this year in line with the product 
roadmap established for each division 
development continues in other areas 
including nuclear and within the recently 
acquired businesses
acquisitions – these are a core part of 
our growth strategy our criteria for 
acquisitions are that they bring rotork a 
new product a new geographical market 
or a new market sector often the target 
will satisfy two or even three of these 
criteria we retain a rigorous and 
disciplined approach to acquisition pricing
acquired soldo in november acquired schischek in january we will 
continue to seek further suitable 
opportunities in 2013
rotork’s vision is to be the leader in our targeted segments of the global flow 
control market the targeted segments comprise of the traditional electric fluid 
power and manual actuators used to control the flow of liquids gases or 
powders these markets are addressed by our controls fluid systems and gears 
divisions in addition the broader instrumentation diagnostics and feedback 
devices used in pressure control and measurement or flow control and 
measurement form the targeted segments for rotork’s new instruments division 
we seek to deliver a high return on capital strong and sustainable margins and consistent 
year on year growth in revenues and profit which combined with the assetlight model 
deliver strong cash generation this cash is used to fund the growth of the business both 
organic and through targeted acquisitions and to fund sustainable and consistent growth 
in our core dividend
to provide short term focus we agree an annual set of key objectives at the start of 2012 
our objectives included two other items the establishment of the instruments division and 
expanding our nuclear product offering which are no longer listed specifically below the 
instruments division is now established and its strategy understood and the acquisition of 
soldo during the year was another step in its growth we have continued to invest in 
development of the nuclear product range and certification of these products in future 
rather than consider this a separate objective it has been included within the broader 
product development objective the other achievements for 2012 and headline objectives 
for 2013 are shown below rotork plc annual report 2012
11
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
strategic priorities achievements 2012 objectives 2013
manufacturing and facilities – rotork 
has invested in a number of factories and 
sales offices to develop worldclass 
facilities from which to work
completed the new chennai factory which 
opened in june and opened five new sales 
and service offices
complete the fitout and move into the 
new facilities in bath and leeds
procurement – rotork’s outsourced 
manufacturing model means that material 
costs are the most significant component 
of direct costs we have always sought to 
control these costs and wherever possible 
leverage our global presence to source 
materials
we continued to expand our sourcing 
team and as a result managed to mitigate 
inflationary price pressures through 
negotiation and finding new suppliers 
commodity costs were broadly neutral 
over the year
continue to look for opportunities to take 
costs out of all our products through 
sourcing or product development 
including a focus on recentlyacquired 
businesses our proven sourcing 
capabilities will be supported with 
increased resources
rotork site services rss – we continue 
to invest in more service engineers and 
facilities to ensure we provide the level of 
local support our customers have come to 
expect from us
increased the number of service engineers 
by 8 new rss director recruited and we 
invested in the service workshops in four 
locations
continue to expand the service team and 
establish new workshops where there is 
customer demand
it – rollout our global system for the sales  
and service offices
the new system is now operational at two  
sites development of the rollout template  
and additional functionality continued during 
the year
continue the rollout through the sales and 
service offices and start to consider 
development for smaller manufacturing sites 
staff development – highly trained and 
motivated people are key to delivering our 
strategy we will invest in our people and 
encourage internal development to support 
our future growth plans this will include 
recruiting increasing numbers of apprentices 
and graduates around the world and 
identifying training needs for all employees 
through their annual appraisal as well as 
developing talented individuals
increasing the global hr team to improve 
consistency of approach across locations  
the appointment of a group training  
manager during the year a new role will 
facilitate a more coordinated global 
approach to training and the most effective 
use of existing resources
the creation of training plans for each 
location and online training programmes 
covering a variety of areas are the first areas 
being developed
corporate social responsibility csr –  
our objectives for csr are monitored by 
four separate committees covering health  
safety environment ethics and social issues 
which report to the csr committee chaired 
by the chief executive our approach in 
these areas is to communicate best practice 
throughout the group training those 
responsible and where appropriate 
verifying adoption in each subsidiary
health and safety audit scores improved 
slightly in the year and the associated kpi 
accident frequency rate was slightly 
higher than the previous year our 
environmental kpi waste recycling 
showed a modest improvement in the year 
the ethics committee continued to 
communicate the provisions of the uk 
bribery act to directors and managers 
worldwide and provide further training 
where required our employees gave their 
time and energy to support a wide variety 
of good causes around the world
continue to communicate best practice to 
all locations and provide the necessary 
training to support local teams focus on 
carbon emissions and our targeted 1 
reduction in co
2 per £ of revenue in 2013 
encourage our employees to continue in 
their efforts for our global charities 
wateraid and send a cow as well as other 
local charities in 18 countries benefiting 
over 150 charities rotork plc  annual report 2012
12
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
i am pleased to report 
another year of record order 
intake revenue and profit 
our strategy remains to grow 
both organically and through 
acquisitions and again this 
year we have extended our 
geographic reach
roger lockwood
chairman
chairman’s statement
the six acquisitions we completed in 2011 
were successfully integrated and have all 
made positive contributions during the year 
rotork instruments the division we created 
in 2011 to address the wider flow control 
market performed well and will benefit from 
the addition of soldo which we acquired in 
november 2012 following the year end in 
january 2013 we acquired the schischek 
group of companies which will form part of 
the controls division and provides us a 
presence in a new market heating 
ventilation and air conditioning hvac
rotork has a reputation for innovation and 
during the year we maintained our focus on 
bringing new products to market which 
incorporate additional features and provide 
new benefits to our customers 2012 saw the 
launch of iq3 the latest generation of our 
flagship electric actuator range as well as 
new products in each of the other divisions
financial highlights
revenue grew 14 to £512m despite a 3 
currency headwind the currency impact 
was more than offset by the benefit of a full 
year contribution from the six businesses 
acquired in 2011 meaning growth on an 
organic constant currency basis was 12 
adjusted operating profit increased by 
14 to £132m resulting in a broadly similar 
operating margin of 258 compared with 
259 the prior year the rapid growth of 
fluid systems had a dilutive effect on group 
margins even though this division generated 
adjusted operating margins in excess of its 
15 target at 153 for the full year 
earnings per share increased 11 to 1031 
pence or based on adjusted profit 
14 to 1093 pence net cash balances 
grew £11m in the year to end at £60m
board composition
in may 2012 we welcomed sally james as  
a nonexecutive director broadening the 
range of skills and experience within the 
board sally currently holds a number of 
other nonexecutive positions and 
previously held senior legal roles in 
investment banks in london and chicago 
following sally’s appointment the company 
is now compliant with the corporate 
governance code in that half the board 
excluding myself as chairman are 
independent nonexecutives we have  
also met our stated aim that 25 of  
our independent nonexecutives will be 
women by the end of 2012
board performance
once again this year we used external 
consultants to conduct an independent 
appraisal of board effectiveness the results 
of the review were positive and directors 
were unanimously of the view that the 
board operates effectively as a unit it is 
clear that the breadth of experience and 
skills represented on the board is a key 
factor in this during the review it was 
noted that a number of improvements had 
been made following last year’s review 
including the appointment of a new 
nonexecutive director and a strengthening 
of the approach to risk management and to 
acquisitions within the broader flow control 
strategy the review recognised that many 
of the challenges facing the board relate to 
managing the continued growth of the 
group whilst preserving the strengths of   rotork plc annual report 2012
13
overview 111
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directors 4043
governance 4464
financial statements 65114
company information 115117
this project involved the 
installation of 330 iq  
and iqt atex certified 
explosionproof 
intelligent electric  
valve actuators at an 
underground natural  
gas storage plant in the 
baltic country of latvia
   
dividend history p
core dividend
additional dividend 
rotork plc 
ftse industrial engineering sector
rebased to 100 at 1 january 2007
280
240
200
160
120
80
40
0
dec 08 dec 09 dec 10 dec 11 dec 12
119
101
156
248
271
0000
0000 0000
total shareholder return
12 11 10 09 08 07 06 05 04 03 02
0000
139
148
151 59
158
182 116
217 93
260 115
284
325 115
3725 230
430
the business overall i remain satisﬁed that 
the composition of the board enables it to 
fulﬁl its expected role
corporate governance
as a board we are responsible to the 
company’s shareholders for increasing 
shareholder value over the long term 
through effective management and good 
governance the board considers all the 
aspects of the business necessary to provide 
good governance including strategy 
acquisitions current performance risk 
management and the internal control 
framework discussions include the rotork 
management board on occasions and at 
least once a year the board meeting takes 
place at one of the subsidiary sites i am 
pleased to be able to conﬁrm that rotork 
now complies with all aspects of the uk 
corporate governance code
dividend
the board recommends a ﬁnal dividend of 
266p per share which taken together with 
the 2012 interim dividend gives a payment 
of 430p per share 2011 core dividend 
3725p representing a 15 increase in core 
dividends this dividend will be payable on 
21 may 2013 to shareholders on the register 
on 12 april 2013
outlook
the strong results across the group reﬂect 
the progress we have made in executing our 
strategy with each division achieving record 
results in terms of order intake revenue and 
proﬁt
our expanded product portfolio and 
extensive international reach position us for 
further growth we will continue to invest in 
infrastructure product development and 
sales channels both organically and by 
acquisition to strengthen our presence in 
the wider ﬂow control market
the markets that we serve remain active 
and whilst we recognise that we are likely  
to see weakness within some regions due  
to economic conditions the board remains 
conﬁdent of achieving further progress in 
the coming year
roger lockwood
chairman
4 march 2013
  references to adjusted proﬁt throughout this 
document are deﬁned as the ifrs proﬁt whether proﬁt 
before tax or operating proﬁt with the amortisation of 
acquired intangibles added back rotork plc  annual report 2012
14
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
2012 was a year of good 
progress we delivered 
strong organic growth and 
successfully integrated the 
acquisitions made during 
2011 the investments in our 
international sales channels 
and the expansion of our 
product portfolio helped each 
of the divisions achieve record 
results
peter france
chief executive
chief executive’s review
we continue to expand our international 
presence and currently have 22 
manufacturing sites 61 offices and a further 
63 regional locations in 33 countries 
meaning we now have sales channels in 94 
countries in total our customers continue 
to demand operational and product 
excellence we provide this through focused 
attention on customer satisfaction and 
investment in our people and facilities
i am pleased to report that our strategy for 
growth has delivered record results order 
intake for the year was £5393m up 168 
on the previous year on an organic 
constant currency basis order intake was 
144 ahead of 2011
revenue was again weighted to the fourth 
quarter and we enjoyed a particularly strong 
end to the year revenue for the full year 
was £5117m 143 up on the prior year 
adjusted operating profit margin was 
258 slightly lower than the 259 
achieved last year but excluding the impact 
of acquisitions and currency the adjusted 
margin was 260
the company benefits from a diverse 
product portfolio and an extensive 
geographical reach the industries that we 
serve often have high barriers to entry for 
example actuators usually require 
certification and approvals before they can 
be used they are also mission critical to the 
operations of our customers and as such 
investment in the quality and reliability of 
equipment and service is an area of acute 
focus for them
in 2012 we have seen an increase in orders 
in the oil  gas market which has been 
driven in part by activity related to shale  
gas discoveries and the subsequent 
investment in liquefied natural gas lng 
projects the power market has been 
impacted by a slowdown in china and a 
lack of spend in india although the long 
term need for power generation in these 
countries remains the water market 
showed signs of growth such that even  
in countries such as china which saw a 
decline in the power market in 2012 rotork 
was still able to record yearonyear growth
through the establishment of rotork 
instruments we have increasingly been 
addressing industry sectors outside of oil  
gas power and water the acquisitions of 
fairchild in 2011 and soldo a switch box 
manufacturer based in italy in november 
2012 provide the division with a solid 
platform to build on and we look forward 
to growing the division over time
we have continued to invest in the 
infrastructure of the business during 2012 
we opened our new chennai factory in 
india and in russia we expanded our facility 
in moscow and opened a new office in  
st petersburg we also opened new facilities 
in são paulo brazil jebel ali uae and 
edmonton canada amongst others we 
have acquired another site in bath to 
accommodate the growth of the controls 
division and we will be moving to a new 
facility in leeds which will house rotork 
gears and rotork uk both sites will be  
fully operational by the end of 2013 rotork plc annual report 2012
15
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
research and development
all divisions launched new products during 
2012 we introduced the third generation  
of our ﬂagship iq range to build on rotork’s 
position as the premium brand in our 
market by providing our customers with the 
very latest technology in controls we also 
launched the complementary compact 
modulating actuator cma which has 
strengthened the rotork process control 
portfolio of electric actuators
in rotork fluid systems the investments we 
have made in recent years have resulted in 
the introduction of a number of new 
products including the latest gasoveroil 
actuator range
our spend on rd increased once again 
this year up 27 to £74m we continue  
to increase our engineering resources and to 
work on other initiatives which will support 
product launches in 2013 and beyond
rotork site services rss
rotork site services operates mainly within 
the rotork controls and rotork fluid 
systems divisions and focuses mostly on 
preventative maintenance contracts onsite 
and workshop service and retroﬁt solutions 
this business continues to grow and 
provides us with the ability to work closely 
with our existing customer base and 
develop relationships which enhance the 
sales opportunities for the full range of 
rotork products
we measure rss’s performance against a 
number of key metrics and the number of 
service engineers is one of these in the year 
we have increased the number of service 
engineers by 8 and we now have over 
320 service personnel globally our products 
are often used in environmentally 
challenging locations and the need for 
certainty of operation means that the 
customer is looking for local service and 
increasingly preventative maintenance 
contracts rotork now has close to 100000 
actuators under some form of maintenance 
contract an increase of 6 over last year
our people
one of our aims is for the company to be 
a great place to work at the end of 
november we conducted our annual 
employee satisfaction survey and saw the 
response rate increase from 73 to 77 
the overall satisfaction score also improved 
to 36 from 35 all individual questions 
showed an improvement over the prior year 
reﬂecting the continued effort being made 
throughout the organisation
2012 was another year of strong growth 
and we welcomed 228 people into the 
rotork family 29 joining with the soldo 
acquisition with the acquisition of 
schischek in january we have added a 
further 100 employees and this means that 
we now have approximately 2800 staff in 
33 countries
in january 2013 alan paine was appointed 
as the ﬁrst divisional managing director of 
rotork instruments and we also welcomed 
him to the rotork management board
rotork’s success is due to the dedication 
and hard work of our staff i would like to 
take this opportunity to thank them for 
making rotork the worldclass business  
that it is
corporate social responsibility
the rotork corporate social responsibility 
csr framework is embedded in many 
aspects of the way we do business  
the way we interact with our people and 
the communities in which we are based  
and it is an integral part of our culture  
the four subcommittees of the csr 
committee provide the necessary focus on 
the key areas of environment health and 
safety ethics and social issues and recognise 
the different disciplines best placed to  
drive these different aspects of csr the 
subcommittees communicate to teams 
throughout the group and monitor progress 
against their respective objectives more 
information regarding the csr committee 
and its work is set out on pages 32 to 39
 references to adjusted proﬁt throughout this 
document are deﬁned as the ifrs proﬁt whether 
proﬁt before tax or operating proﬁt with the 
amortisation of acquired intangibles added back
during the past decade 
several thousand rotork 
iq intelligent electric 
valve actuators have 
been installed on the 
westeast gas pipeline 
project a pipeline 
network running 
through 66 counties 
in china rotork plc  annual report 2012
16
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
grant wood md rotork controls
botlek tank terminal btt at 
rotterdam relies on rotork’s 
latest electric valve actuation 
technologies for automated 
flow control and vital safety 
related duties associated with 
the import export and 
storage of a varied range of 
liquid bulk products
controls
the launch of the third generation of our 
ﬂagship iq actuator was the key event of 
2012 for the controls division the advances 
in diagnostics and asset management and 
improved local access to that information in 
this latest generation of products keeps the 
iq range at the forefront of the industry 
we also launched the compact modulating 
actuator cma a new process control 
actuator range and a larger size cva both 
of which expand our already market leading 
product portfolio
revenue grew by 55 in the year to 
£2933m and with order intake growth  
of 87 the year end order book grew by 
128 removing the contribution from 
acquisitions and restating 2012 at 2011 
exchange rates revenue growth was 68 
and order intake growth was 93  
a 7 weaker euro is the main factor behind 
the currency adjustment with the us dollar 
rate against sterling being similar for both 
years adjusted operating proﬁt of £948m 
was 29 higher than 2011 and the 
resulting margin of 323 compares with 
the 331 in the prior year on an organic 
constant currency basis the increase in 
adjusted operating proﬁt would have been 
50 and the margin 326 whilst 
material costs reduced slightly as a 
proportion of revenue due to our focus on 
sourcing labour and overhead cost 
increases were ahead of the rate of revenue 
increase some of the increased costs were 
directly related to product launches but 
others were due to investment in facilities 
and people to support growth
2012 saw contrasting activity levels in our 
endmarkets whilst oil  gas generally has 
been active and we have seen growth the 
power market was slower this slowdown  
in power has been most noticeable in india 
and china where it is our biggest sector 
and has been inﬂuenced by raw material 
supply and governmental factors we 
anticipate this to be a relatively short term 
effect as the longer term demand in both 
these countries continues to outstrip current 
supply levels despite the softer power 
market both india and china delivered 
growth as our sales forces focused on other 
endmarket opportunities in oil  gas 
growth came through a range of countries 
and in different applications for example 
the offshore sector in norway transmission 
and storage in russia and unconventional 
gas ﬁelds in australia the australian 
projects represent a milestone for our 
cva range the product’s low power 
requirements failtoposition capability  
and accuracy have ensured that they are 
speciﬁed on these remote installations  
the increase in order book through the year 
was also partially driven by these australian 
projects as the deliveries are phased over 
many months in the americas our growth 
has been broadbased and we beneﬁted 
from a number of projects in latin america 
an active valvemaker base in the us gulf 
coast region which is predominantly serving 
export markets and some activity in us 
water and oil  gas projects rotork plc annual report 2012
17
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
revenue £m
 55 
2012 2011 2010 2009 2008
2045 2273 2434 2780 2933
adjusted operating proﬁt £m
 29 
2012 2011 2010 2009 2008
575 720 788 921 948
revenue £m
 55 
2012 2011 2010 2009 2008
2045 2273 2434 2780 2933
adjusted operating proﬁt £m
 29 
2012 2011 2010 2009 2008
575 720 788 921 948
345 pm
rotterdam
netherlands
controls opportunities
  expansion of footprint
  integration of schischek
  new product introductions
proximity to our customers is important to rotork’s business model 
and we continue to look for locations where we can increase our 
presence this proximity ensures that we are able to work more 
closely with customers as they develop their investment plans and 
provide them with better aftersales service and support during  
the year we opened ﬁve new sales ofﬁces and expanded our ofﬁces 
and workshop facilities in seven others we also opened our new 
factory in chennai india having completely rebuilt the facility to 
provide a modern factory capable of supporting our growth in this 
important market for many years to come many of our production 
facilities serve more than one division with sales forces often 
crossselling products from all divisions we plan to open a number 
of new ofﬁces in 2013 including a presence in north east australia 
where the market is very active
the launch of any new product range requires signiﬁcant work not 
only in designing it but also then sourcing the new components 
typically there are costs associated with introducing new products 
and at the point of product launch the components are also at their 
most expensive we continually review our supply base and as 
volumes grow and the product matures we have historically been 
able to deliver savings through improvements in sourcing
the iq3 has been positively received by our customers initially we 
are manufacturing the product in bath and we will systematically 
rollout production to our other electric actuator manufacturing sites 
during 2013 rotork plc  annual report 2012
18
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
alex busby md rotork fluid systems
ﬂuid systems
rotork fluid systems rfs was our fastest 
growing division in 2012 the division 
exceeded our medium term target of 
achieving an adjusted operating margin 
of 15 and our objective is now to sustain 
that performance in future years rfs 
manufactures a wide range of pneumatic 
and hydraulic emergency shutdown 
actuators mainly for the oil  gas market 
oil  gas covers a wide variety of 
applications and rfs beneﬁted from strong 
demand from lng gas and liquids pipelines 
gas storage and offshore projects during the 
year the integration and development of 
recent acquisitions also played a part in this 
growth – notably in mexico where we 
began to deliver actuators on the large 
pipeline project won at the end of 2011  
and where we also won some signiﬁcant 
service contracts during the year
revenue grew 214 to a record £1609m 
with the second half contribution of £895m 
being 125 higher than the second half  
of 2011 which had been a record revenue 
was less second half weighted this year 
representing 56 of the annual total 
compared with 60 in 2011 removing the 
incremental beneﬁt of acquisitions and 
restating revenue at 2011 exchange rates 
revenue growth would have been 226 
higher with two key factories based in the 
eurozone and euro weakness being the 
most signiﬁcant driver behind the currency 
headwind in 2012 rfs is the division most 
affected by the currency restatement this 
year in percentage terms order intake 
increased by 224 229 on an organic 
constant currency basis and the order book 
rose 165 to £665m 
adjusted operating proﬁt was a record at 
£246m 442 higher than the prior year 
and would have been £258m at 2011 
exchange rates and without the 
contribution from acquisitions adjusted 
operating margins were 153 and would 
have been 159 on an organic constant 
currency basis
our target margin was achieved through 
growth in revenue which has been driven 
by our recent investment in infrastructure 
this investment has enabled us to ensure 
that as volumes increased we maintained 
our quality and met our customers’ delivery 
expectations our factories in leeds uk 
and rochester usa recorded a strong 
performance supported by growth of our 
electrohydraulic products our factories in 
melle germany – which mainly supplies the 
german and russian markets – lucca italy 
and flowquip based in tulsa usa all 
achieved record results flowquip serves the 
liquids pipeline market as well as operating 
as a centre of excellence coe for that 
region in the usa our coes buy actuators 
from our factories and add control systems 
in their local workshops and these also 
performed well our subsidiaries in australia 
and russia made the greatest progress in 
the year with the middle east norway and 
mexico also growing strongly albeit from a 
lower base during the year we opened 
coes in brazil and the middle east and 
expanded our site in edmonton canada  rotork plc annual report 2012
19
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
rotork has supplied 
skilmatic pro actuators 
to the mount thorley 
warkworth mtw coal 
mine the pipework delivers 
water to the north and 
south coal processing 
washing plants from a 
new dam source
revenue £m
 214 
2012 2011 2010 2009 2008
856 997 1068 1326 1609
adjusted operating proﬁt £m
 442 
2012 2011 2010 2009 2008
131 153 149 171 246
revenue £m
 214 
2012 2011 2010 2009 2008
856 997 1068 1326 1609
adjusted operating proﬁt £m
 442 
2012 2011 2010 2009 2008
131 153 149 171 246
fluid systems opportunities
 new centres of excellence
 product releases
 current and new markets
these investments will support our growth in the coming years 
in 2013 we plan to extend four facilities and open three new ones 
including a new ofﬁce in north east australia from where we will 
be able to serve the active local market and our growing installed 
base of electrohydraulic actuators
we introduced a number of new products during 2012 the most 
signiﬁcant of which was the launch of an updated gasoveroil 
product range that offers a more compact design than its 
predecessor the rd team was restructured during the year to 
ensure that dedicated resource is allocated to new product 
development and kept separate from daytoday applications 
engineering both parts of the team are supported by ridec rotork 
innovation design and engineering centre in chennai india which 
works closely with the rd teams in our factories around the world
managing the cost of components both through engineering 
change and sourcing initiatives is a continual drive and we were 
successful in generating savings through this process during the 
year using our factories in lower cost areas as a base for sourcing 
local expertise has proved beneﬁcial and we will extend this 
initiative to additional product ranges in 2013
145 am
new south wales
australia rotork plc  annual report 2012
20
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
david littlejohns md rotork gears
gears
rotork gears manufactures and sells manual 
and motorised gearboxes and accessories 
the gearboxes can be used in conjunction 
with actuators and we sell to both the 
controls and fluid systems divisions as well 
as selling directly to third parties we have 
been working to increase the level of our 
thirdparty sales and in 2012 we have made 
further progress in this regard with around 
three quarters of revenue now generated 
from sales to thirdparty valve manufacturers 
whilst the sales to rotork offices are often 
driven by project activity the sales to 
valvemakers are very different in nature  
the gearbox is effectively a component of 
the valve and with the majority of valves 
still being manually operated most require 
a gearbox to provide the necessary 
mechanical advantage to operate the valve 
all valvemakers therefore need a supply of 
gearboxes and although some make their 
own our sales proposition is very attractive 
we provide high quality reliable gearboxes 
and by virtue of our scale and buying 
power through our global supply chain we 
can provide the valve industry with an 
outsourced solution
revenue grew 135 in the year to £529m 
whilst order intake increased 189 
resulting in a 252 increase in order book 
to £99m each of these is a record for 
gears the prokits acquisition in december 
2011 made a full contribution in the year 
nearly offsetting the currency headwind for 
the division with revenue growth on an 
organic constant currency basis of 136 
adjusted operating profit for the year was 
£121m 170 higher than the prior year 
delivering an operating margin of 229 
compared with 222 last year restating 
adjusted operating profit at last year’s 
exchange rates and removing the effect of 
the acquisition increases the operating 
profit to £125m and the margin to 237 
the margin increase derives mainly from 
higher volumes successful sourcing 
initiatives and a beneficial product mix
we saw fastest growth in the chinese and 
us markets the two territories in which we 
have focused our investment in recent years 
in china we continued to grow our business 
with existing customers and win new 
accounts so that our shanghai factory is 
now the largest within the division the 
increase in chinese output has helped to 
improve the efficiency of our facility and has 
also increased our buying power with our 
supply base in china in houston usa our 
customisation centre started to gain traction 
and towards the end of the year we leased 
additional space in the facility the workshop 
area shared with controls and fluid 
systems has been doubled to provide a 
platform for further growth we also 
increased our sales of subsea gearboxes 
with our plant in italy the driving force 
behind this particular market rotork plc annual report 2012
21
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
euroloop is one of the 
world’s largest flow 
metering calibration facility 
for the oil  gas industry 
iq actuators are fitted  
with rotork gears iw 
worm gearboxes for 
theoperation of the larger 
ball valves
revenue £m
 135 
2012 2011 2010 2009 2008
368 368 392 466 529
adjusted operating proﬁt £m
 170 
2012 2011 2010 2009 2008
87 81 92 103 121
345 pm
rotterdam
netherlands
gears opportunities
 relocation of leeds factory
 new product ranges
 rotork valvekits
amongst our other locations development of the local supply chain 
in india has proved slower than hoped which meant that whilst 
revenue grew strongly albeit from a low base it was not at the 
margins anticipated work on indigenisation of the supply base is an 
important step for the indian factory and will also provide a source 
of components to export to other gears factories in russia and 
japan we have begun to consolidate our relationships with local 
valvemakers and we are now adopting a similar approach in spain 
where we continue to make progress in the uk our main gears 
factory will relocate to a larger facility in leeds during 2013 which 
will be far better suited to its requirements
the pace of product development has accelerated and is one of the 
reasons behind our creation of a dedicated new product introduction 
team we launched two completely new manual gearbox ranges and 
expect further new ranges to be introduced during 2013 the prokits 
acquisition has provided fresh impetus to our uk valve adaption 
business and delivered good growth in the year rotork plc  annual report 2012
22
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
alan paine md rotork instruments
instruments
rotork instruments was formed in november 
2011 with the purchase of fairchild industrial 
products and will ultimately contain a number 
of businesses targeted at the wider ﬂow 
control market the division will be built at 
least initially via acquisitions as we look for 
businesses which have products that measure 
and control ﬂow and pressure these devices 
may work in conjunction with actuators be 
sold into the same endmarkets as actuators 
or utilise some of the same technology as 
actuators but they will also take us into new 
endmarkets as with our approach in 
actuators we intend to focus on the high 
quality high speciﬁcation part of the 
instruments market where certiﬁcation is often 
required and margins are generally higher
fairchild is headquartered in winstonsalem 
usa has sales ofﬁces in china india brazil 
and mexico and sells precision pneumatic 
and electropneumatic control products 
a network of distributors is supported from 
each of these ofﬁces although there are a 
number of different routes to market and 
a broad range of endmarkets in 2012 the 
gulf coast area of the usa performed 
particularly well supported by an active oil 
 gas sector which is the division’s largest 
endmarket despite an unfavourable 
economic backdrop india and europe 
were also strong
in november 2012 we acquired soldo 
an italian based switchbox manufacturer 
adding a second high quality business to the 
instruments division soldo’s switchboxes 
are used to indicate valve positions 
sometimes in conjunction with a pneumatic 
or hydraulic actuator often in hazardous 
environments they are highly engineered 
products which require certiﬁcation for 
many of the applications and endmarkets 
in which they are used
this was fairchild’s ﬁrst full year as part of 
rotork and as such we focused heavily on 
integration at all levels during the year we 
combined the rotork and fairchild ofﬁces in 
chengdu china and although now sharing 
a common location they will continue to be 
run as separate businesses we also plan to 
relocate soldo’s usa operation into the 
winstonsalem facilities during 2013 rotork plc annual report 2012
23
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
instruments opportunities
 international expansion
 acquisitions
the melle factory in 
germany mounted soldo 
switchboxes to rotork’s gp 
pneumatic range of scotch 
yoke actuators the atex 
certified sif series 
switchboxes provide a 
visual and remote electrical 
indication of quarterturn 
valveactuator position
345 pm
mellegermany
revenue £m
2012 2011 2012 2011
14
164 51
04
adjusted operating proﬁt £m
2012 2011
adjusted operating margin 
311 274
revenue £m
2012 2011 2012 2011
14
164 51
04
adjusted operating proﬁt £m
2012 2011
adjusted operating margin 
311 274
revenue in the year was £164m including a small contribution 
from soldo compared with £14m in the prior year which 
represented only six weeks of fairchild’s results the adjusted 
operating margins were 311 for the year in total with both 
businesses generating similar returns these businesses operate 
on much shorter lead times than the other rotork divisions and 
an order book representing less than one month’s sales is typical rotork plc  annual report 2012
24
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
financial review
2012 set new records in 
order intake revenue and 
profit with revenue growth 
of 143 which was broadly 
in line with the 144 
compound annual growth 
rate of the last ten years 
jonathan davis
finance director
the revenue of £5117m was reduced by  
a £134m currency headwind and on a 
constant currency basis revenue would  
have been £5251m this includes a £07m 
contribution from soldo purchased in 
november this year and a full year from  
the six acquisitions we made in 2011 
revenue on an organic constant currency 
basis would have been £5030m a 123 
increase compared with 2011
adjusted operating profit stated before the 
amortisation of acquired intangibles grew 
138 to £1319m an adjusted operating 
margin of 258 compared with the 259  
in 2011 removing the impact of currency and 
acquisitions only has a small net impact giving 
adjusted operating profit of £1310m and a 
margin of 260 the same as the prior year
financial items have reversed from a net 
income of £06m last year to a net expense 
of £03m this year the most significant 
element of this change is the £07m 
reduction in the expected return on the 
assets of the defined benefit pension 
schemes adjusted return on sales which  
is based on profit before tax has therefore 
reduced from 260 to 257 but on an 
organic constant currency basis would be 
the same as last year
one of the key influences on the group 
margins was the growth of rotork fluid 
systems rfs notwithstanding its 
improvement in margins this year rfs still 
reports the lowest margins and as the fastest 
growing division this resulted in a change in 
the divisional mix which had a negative 
impact on group margins had the group’s 
revenue been in the same divisional 
proportions as 2011 group operating margins 
would have been 50 basis points higher
acquisitions
our screening criteria for an acquisition are 
that it must bring to rotork a product we do 
not have improve our access to a geographic 
or enduser market or ideally a combination 
of these soldo now part of our instruments 
division was purchased in the year for total 
consideration of £231m of which £97m has 
been attributed to intangible assets and 
£140m is goodwill subsequent to the year 
end we announced the acquisition of the 
schischek group of companies for £343m 
headquartered in germany schischek 
manufactures explosionproof actuators for 
the heating ventilation and airconditioning 
market where rotork has historically had 
few direct sales
as a result of the higher number and value 
of acquisitions this year and last the 
amortisation charge related to acquired 
intangible assets rose from £39m last year 
to £74m this year with the acquisitions 
taking place throughout last year and soldo 
acquired in november 2012 in order to 
adjust the income statement to show a 
likeforlike period for each acquisition  
2012 revenue has to be reduced by £221m 
and operating profit by £51m acquisitions 
have been only slightly dilutive in the year 
with an aggregate adjusted operating 
margin of 231 rotork plc annual report 2012
25
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
£m
2012 as 
reported
constant 
currency 
adjustment
2012 at 2011  
exchange rates
remove  
acquisitions
organic business
at 2011
exchange rates
2011 as
reported
revenue 5117 134 5251 221 5030 4478
cost of sales 2722 77 2799 115 2684 2363
gross profit 468 2395 57 467 2452 106 466 2346 472 2115
overheads 210 1076 15 208 1091 55 206 1036 213 956 
adjusted operating profit 258 1319 42 259 1361 51 260 1310 259 1159
financial incomeexpenses 03 – 03 – 03 06
adjusted profit before tax 257 1316 42 259 1358 51 260 1307 260 1165
 adjusted is before the amortisation of acquired intangible assets
currency
currency was a stronger headwind in 2012 
and reduced revenue by £134m with the 
weaker euro being the most significant 
element whilst the average euro rate was 
7 weaker than the comparative period 
the us dollar average rate was almost 
identical to 2011 the other currencies 
which affect the group were also marginally 
weaker the currency impact is a mix of 
translation and transaction and the £42m 
reduction in operating profit is net of any 
benefits gained from the sourcing of 
components from within the eurozone 
whilst we manufacture and sell from offices 
based in 33 countries with 19 different 
currencies and source components from a 
wide geographic footprint the group is still 
a net seller of euros and us dollars it is the 
net sale of these currencies which we 
principally address through our hedging 
policy covering up to 75 of trading 
transactions in the next 12 months and  
up to 50 between 12 and 24 months  
in order to estimate the impact of currency 
at the current exchange rates we consider 
the effect of a 1 cent movement versus 
sterling for both euro and us dollar a 1 
cent movement now results in a £350000 
adjustment to profit
return on capital employed roce
whilst roce remains high due to our 
assetlight business model and high profit 
margins it has reduced from 741 in 2011 
to 620 in 2012 the calculation is based 
on the average balance sheet position 
taking the opening and closing balance 
sheet so the impact of the acquisition of 
fairchild and the five other companies in 
2011 is only now fully reflected in the 
capital employed the intangible assets 
capitalised in accounting for these 
acquisitions together with the soldo 
acquisition in 2012 has led to an increase  
in average capital employed from £1565m 
in 2011 to £2128m this year end
taxation
the group’s effective tax rate fell from 
286 to 281 this is a blended rate from 
the 25 countries in which we currently pay 
tax and is affected by the mix of where our 
taxable profits are generated as well as 
changes to the tax rates within those 
jurisdictions 2011 was the last year to 
benefit from a favourable tax agreement for 
our factory in china but the increase in tax 
there was more than offset by reductions 
elsewhere the general rate of corporation 
tax in a number of jurisdictions where we 
operate including the uk has continued to 
decline our philosophy with tax continues to 
be to operate on the basis of full disclosure 
and cooperation with all tax authorities and 
where possible mitigate the burden of tax 
within the local legislation
organic business growth rotork plc  annual report 2012
26
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
financial review continued
cash generation
at the end of the year net cash was £599m 
an increase of £113m during the year the 
largest cash outflow this year was the 
£376m of tax whilst the effective tax rate  
in the income statement may be lower the 
higher profits in 2011 and then again in 
2012 combined with a change in the phasing 
of payments led to the higher rate of 
increase in tax paid no additional dividends 
were paid this year so total dividends paid  
in the year are lower than 2011 at £339m 
compared with £495m which included 
£199m of additional dividends acquisition 
spend of £209m was predominantly the 
soldo purchase in november but also 
includes deferred consideration on some  
of the 2011 acquisitions
our cash generation kpi improved from 
896 last year to 954 management of 
working capital has the greatest influence 
on this kpi and in 2012 it improved 
working capital as a function of revenue 
was 255 compared with 270 in 2011 
inventory and trade receivables both 
increased at a slower rate than revenue and 
debtor days reduced by one to 56 days’ 
sales outstanding
credit management
the group’s credit risk is primarily 
attributable to trade receivables with the 
risk spread over a large number of countries 
and customers and no significant 
concentration of risk credit worthiness 
checks are undertaken before entering into 
contracts or commencing trade with new 
customers the majority of our trade 
receivables are insured so the authorisation 
process operates in conjunction with the 
insurer taking advantage of their market 
intelligence where appropriate we will use 
trade finance instruments such as letters of 
credit to mitigate any identified risk
treasury
the group operates a centralised treasury 
function managed by a treasury committee 
comprising the chief executive finance 
director group legal director group 
financial controller and group treasurer 
the committee meets regularly to consider 
foreign currency exposure control over 
deposits and cash management the group 
treasurer monitors compliance with the 
treasury policies and is responsible for 
overseeing all the group’s banking 
relationships a subsidiary treasury policy 
restricts the actions subsidiaries can take 
and the group treasury policy and terms of 
reference define the responsibilities of the 
group treasurer and treasury committee 
the group uses financial instruments where 
appropriate to hedge significant currency 
transactions principally forward exchange 
contracts and swaps these financial 
instruments are used to reduce volatility which 
might affect the group’s cash or income 
statement in assessing the level of cash flows 
to hedge with forward exchange contracts 
the maximum cover taken is 75 of forecast 
flows the board receives monthly treasury 
reports which summarise the group’s foreign 
currency hedging position distribution of cash 
balances and significant changes to any 
banking relationships
in january 2013 we established a £15m 
one year committed facility in order to 
partfinance the acquisition of schischek 
whilst the group as a whole will remain  
in a net cash position this facility provides 
flexibility regarding the location of cash 
deposits and timing of receipts and is in 
addition to uncommitted overdraft facilities 
the group has in a number of countries
dividends
the directors are proposing a 169 increase 
in the final dividend to 266p per share 
when taken together with the 164p interim 
dividend paid in september this represents  
a 154 increase in core dividends over the 
prior year this gives core dividend cover of 
24 times 2011 25 times our dividend 
policy is to grow the core dividends generally 
inline with earnings and supplement core 
dividends with additional dividends when  
the board consider it appropriate to do so rotork plc annual report 2012
27
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
retirement benefits
the group accounts for postretirement 
benefits in accordance with ias19 
employee benefits the balance sheet 
reflects the net deficit on these schemes  
at 31 december based on the market value 
of the assets at that date and the valuation 
of liabilities using year end aa corporate 
bond yields we have closed both the main 
defined benefit pension schemes to new 
entrants the uk scheme in 2003 and the 
us one in 2009 in order to reduce the risk 
of volatility of the group’s liabilities
following agreement of the march 2010 
actuarial valuation for the uk scheme a 
deficit funding plan was agreed which 
would eliminate the shortfall by march 
2015 this plan included the payment of 
£33m of past deficit contributions during 
2011 £73m in 2012 and £17m in 2013 
the next triennial actuarial valuation is due 
in march 2013 despite these higher uk 
contributions the funding level of the 
schemes remained at 81 at the year end 
the same as it had been at december 2011 
which now equates to a £287m shortfall 
whilst the return on assets exceeded 
expectations discount rates have reduced 
once again driving up the current value of 
future liabilities the mortality assumptions 
were updated in 2010 to reflect the latest 
data from occupational pension schemes 
and these tables are again applied this year
the amendment to ias19 employee benefits 
will impact the group’s 2013 financial 
statements the principal change relates to 
the requirement to use the schemes’ 
discount rate to calculate the return on 
assets rather than using a rate of return 
appropriate to the various asset classes  
this change is expected to reduce the 
income generated by the schemes’ assets  
by around £08m in 2013
dividends
 à up 154 to 430p rotork plc  annual report 2012
28
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
sales revenue growth 
143
2012 2011 2010 2009 2008
359 104 76 177 143
return on sales 
257
2012 2011 2010 2009 2008
240 260 262 260 257
return on capital employed 
620
2012 2011 2010 2009 2008
857 887 903 741 620
earnings per share growth 
136
2012 2011 2010 2009 2008
378 187 96 175 136
cash generation 
954
2012 2011 2010 2009 2008
983 1171 957 896 954
sales revenue growth 
143
2012 2011 2010 2009 2008
359 104 76 177 143
return on sales 
257
2012 2011 2010 2009 2008
240 260 262 260 257
return on capital employed 
620
2012 2011 2010 2009 2008
857 887 903 741 620
earnings per share growth 
136
2012 2011 2010 2009 2008
378 187 96 175 136
cash generation 
954
2012 2011 2010 2009 2008
983 1171 957 896 954
sales revenue growth 
143
2012 2011 2010 2009 2008
359 104 76 177 143
return on sales 
257
2012 2011 2010 2009 2008
240 260 262 260 257
return on capital employed 
620
2012 2011 2010 2009 2008
857 887 903 741 620
earnings per share growth 
136
2012 2011 2010 2009 2008
378 187 96 175 136
cash generation 
954
2012 2011 2010 2009 2008
983 1171 957 896 954
sales revenue growth 
143
2012 2011 2010 2009 2008
359 104 76 177 143
return on sales 
257
2012 2011 2010 2009 2008
240 260 262 260 257
return on capital employed 
620
2012 2011 2010 2009 2008
857 887 903 741 620
earnings per share growth 
136
2012 2011 2010 2009 2008
378 187 96 175 136
cash generation 
954
2012 2011 2010 2009 2008
983 1171 957 896 954
financial kpis
growth of the business quality of earnings and efﬁcient use of resources are crucial 
target areas for rotork and we have a number of measures of performance used 
throughout rotork aimed at monitoring this the kpis used to monitor the ﬁnancial 
performance of the business are set out below
key performance indicators
reasons for choice
this is reported in detail for 
operating segments and is a key 
driver in the business  
this measure enables us to track 
our overall success in speciﬁc 
project activity and our progress 
in increasing our market share 
by products and region
reasons for choice
this measure brings together 
the combined effects of 
procurement costs and pricing 
as well as the leverage of our 
operating assets it is also a 
check on the quality of revenue 
growth but is heavily inﬂuenced 
by divisional mix
reasons for choice
this is used as a measure of 
performance where a target of 
85 is regarded as a base level 
of achievement  
cash generation is also one of 
the constituent parts of the 
senior management reward 
system
reasons for choice
rotork has an assetlight 
business model by design and 
reporting this ratio internally 
helps management at group 
level monitor our adherence to 
this philosophy
reasons for choice
the measurement of earnings 
per share eps reﬂects all 
aspects of the income 
statement including 
management of the group’s 
tax rate
reasons for choice
the accident frequency rate 
afr is used as one measure of 
the effectiveness of our health 
and safety procedures
reasons for choice
this kpi measures the 
proportion of total waste 
produced which is recycled
reasons for choice
the survey as a whole enabled 
the group to get feedback from 
across the businesses on how 
we relate to our staff and what 
we can do better
how we calculate
increase in sales revenue year on 
year divided by the earlier year 
sales revenue
how we calculate
adjusted proﬁt before tax 
after ﬁnancing and interest 
shown as a percentage of sales 
revenue
how we calculate
cash ﬂow from operating 
activities before tax outﬂows 
and the pension charge to cash 
adjustment as a percentage of 
adjusted operating proﬁt
how we calculate
adjusted operating proﬁt as a 
percentage of average capital 
employed capital employed is 
deﬁned as shareholders’ funds 
less net cash held with the 
pension fund deﬁcit net of 
related deferred tax asset added 
back the calculation is shown 
on page 105
how we calculate
increase in adjusted basic eps 
based on adjusted proﬁt after 
tax year on year divided by the 
earlier year adjusted basic eps
how we calculate
the formula we have used for 
calculating our afr is the 
number of reportable injuries 
divided by the number of hours 
worked multiplied by 100000
how we calculate
this information is collected 
through regular submissions 
into our main uk site in bath
how we calculate
employees scored their 
responses directly into a 
prepared survey with 1 being 
very dissatisﬁed and 5 being 
very satisﬁed
comments on results
we grew revenue by 143 
despite some markets and some 
important geographies growing 
at a slower rate the positive 
impact of acquisitions was 
partially offset by a currency 
headwind organic constant 
currency growth being 123
comments on results
the reduction is a result of 
lower returns on pension 
scheme assets and the faster 
growth in the divisions with 
lower return on sales being 
offset by the improvements 
made in the fluid system and 
gears divisions return on sales
comments on results
cash generation remains above 
target and working capital as a 
function of sales has reduced 
during the year from 270 to 
255
comments on results
average capital employed has 
risen by 36 because the 2011 
acquisitions are now reﬂected in 
both the opening and closing 
balance sheets this kpi remains 
at sector leading levels
comments on results
adjusted basic eps has 
increased ahead of proﬁt before 
tax due to a reduced effective 
tax rate arising from a lower tax 
rate in the uk and the 
international mix of where our 
proﬁts were generated
comments on results
the investment in training to 
create a number of specialists 
and the improvements arising 
through the audit process have 
helped raise awareness of safe 
working practices training will 
continue as we aim to reduce 
this kpi further
comments on results
further improvements are 
becoming harder to achieve but 
the results this year are just 
ahead of the previous year 
focus remains on those 
locations where recycling is yet 
to be as fully adopted
comments on results
we had a record number of 
respondents this year and the 
response rate rose to 77 the 
scores relating to satisfaction 
with the bonus scheme 
effective supervision and 
feedback and that rotork values 
its employees showed the 
greatest improvement
adjusted ﬁgures are before the amortisation of acquired intangible assets rotork plc annual report 2012
29
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
sales revenue growth 
143
2012 2011 2010 2009 2008
359 104 76 177 143
return on sales 
257
2012 2011 2010 2009 2008
240 260 262 260 257
return on capital employed 
620
2012 2011 2010 2009 2008
857 887 903 741 620
earnings per share growth 
136
2012 2011 2010 2009 2008
378 187 96 175 136
cash generation 
954
2012 2011 2010 2009 2008
983 1171 957 896 954
accident frequency rate
046
2012 2011 2010 2009 2008
074 057 038 046 046
waste recycling 
770
2012 2011 2010 2009 2008
640 620 620 760 770
employee satisfaction
36
2012 2011 2010 2009 2008
3535 35 35 36
accident frequency rate
046
2012 2011 2010 2009 2008
074 057 038 046 046
waste recycling 
770
2012 2011 2010 2009 2008
640 620 620 760 770
employee satisfaction
36
2012 2011 2010 2009 2008
3535 35 35 36
accident frequency rate
046
2012 2011 2010 2009 2008
074 057 038 046 046
waste recycling 
770
2012 2011 2010 2009 2008
640 620 620 760 770
employee satisfaction
36
2012 2011 2010 2009 2008
3535 35 35 36
nonﬁnancial kpis
we monitor nonﬁnancial areas in our businesses particularly in the environmental 
health and safety and quality control areas and put strong emphasis within our 
organisation on improving our performance here
key performance indicators
reasons for choice
this is reported in detail for 
operating segments and is a key 
driver in the business  
this measure enables us to track 
our overall success in speciﬁc 
project activity and our progress 
in increasing our market share 
by products and region
reasons for choice
this measure brings together 
the combined effects of 
procurement costs and pricing 
as well as the leverage of our 
operating assets it is also a 
check on the quality of revenue 
growth but is heavily inﬂuenced 
by divisional mix
reasons for choice
this is used as a measure of 
performance where a target of 
85 is regarded as a base level 
of achievement  
cash generation is also one of 
the constituent parts of the 
senior management reward 
system
reasons for choice
rotork has an assetlight 
business model by design and 
reporting this ratio internally 
helps management at group 
level monitor our adherence to 
this philosophy
reasons for choice
the measurement of earnings 
per share eps reﬂects all 
aspects of the income 
statement including 
management of the group’s 
tax rate
reasons for choice
the accident frequency rate 
afr is used as one measure of 
the effectiveness of our health 
and safety procedures
reasons for choice
this kpi measures the 
proportion of total waste 
produced which is recycled
reasons for choice
the survey as a whole enabled 
the group to get feedback from 
across the businesses on how 
we relate to our staff and what 
we can do better
how we calculate
increase in sales revenue year on 
year divided by the earlier year 
sales revenue
how we calculate
adjusted proﬁt before tax 
after ﬁnancing and interest 
shown as a percentage of sales 
revenue
how we calculate
cash ﬂow from operating 
activities before tax outﬂows 
and the pension charge to cash 
adjustment as a percentage of 
adjusted operating proﬁt
how we calculate
adjusted operating proﬁt as a 
percentage of average capital 
employed capital employed is 
deﬁned as shareholders’ funds 
less net cash held with the 
pension fund deﬁcit net of 
related deferred tax asset added 
back the calculation is shown 
on page 105
how we calculate
increase in adjusted basic eps 
based on adjusted proﬁt after 
tax year on year divided by the 
earlier year adjusted basic eps
how we calculate
the formula we have used for 
calculating our afr is the 
number of reportable injuries 
divided by the number of hours 
worked multiplied by 100000
how we calculate
this information is collected 
through regular submissions 
into our main uk site in bath
how we calculate
employees scored their 
responses directly into a 
prepared survey with 1 being 
very dissatisﬁed and 5 being 
very satisﬁed
comments on results
we grew revenue by 143 
despite some markets and some 
important geographies growing 
at a slower rate the positive 
impact of acquisitions was 
partially offset by a currency 
headwind organic constant 
currency growth being 123
comments on results
the reduction is a result of 
lower returns on pension 
scheme assets and the faster 
growth in the divisions with 
lower return on sales being 
offset by the improvements 
made in the fluid system and 
gears divisions return on sales
comments on results
cash generation remains above 
target and working capital as a 
function of sales has reduced 
during the year from 270 to 
255
comments on results
average capital employed has 
risen by 36 because the 2011 
acquisitions are now reﬂected in 
both the opening and closing 
balance sheets this kpi remains 
at sector leading levels
comments on results
adjusted basic eps has 
increased ahead of proﬁt before 
tax due to a reduced effective 
tax rate arising from a lower tax 
rate in the uk and the 
international mix of where our 
proﬁts were generated
comments on results
the investment in training to 
create a number of specialists 
and the improvements arising 
through the audit process have 
helped raise awareness of safe 
working practices training will 
continue as we aim to reduce 
this kpi further
comments on results
further improvements are 
becoming harder to achieve but 
the results this year are just 
ahead of the previous year 
focus remains on those 
locations where recycling is yet 
to be as fully adopted
comments on results
we had a record number of 
respondents this year and the 
response rate rose to 77 the 
scores relating to satisfaction 
with the bonus scheme 
effective supervision and 
feedback and that rotork values 
its employees showed the 
greatest improvement rotork plc  annual report 2012
30
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
statement of principal risks 
and uncertainties
the assessment and management of risk is the responsibility of the 
board and the development and execution of a comprehensive and 
robust system of risk management is a high priority in rotork this 
is based on an established process for the identification and 
management of risk first at divisional board level and then for the 
group as a whole rotork works within the governance framework 
set out in our corporate governance statement see page 46
the board’s role in risk management involves promoting a culture 
that emphasises integrity at all levels of business operations this 
includes ensuring that risk management is embedded within the core 
processes of the group determining the principle risks and ensuring 
that these are communicated effectively across the businesses and 
setting the overall policies for risk management and control
the group finance director is responsible for risk management within 
the group and leads the development of the risk management 
process and the tools used the board approves appetite for risk at 
both group and divisional level and the consequential actions in 
terms of mitigation where possible and appropriate
the processes of risk management within the businesses involve
•	 identification and regular assessment of individual risks at both 
subsidiary and divisional level
•	 reviewing previously identified risks and the effectiveness of 
mitigation where appropriate
•	 design of controls to mitigate identified risks 
•	 testing the controls through management review and internal 
audit and
•	 forming a conclusion on the effectiveness of the control 
environment in place
the major risks affecting the group are first identified and considered 
by the divisional boards during their regular meetings once a risk has 
been identified it is allocated to one of the directors to ensure the 
risk is appropriately considered and the risk is managed risks are 
categorised by likelihood and potential impact on the business and 
once the assessment matrix is completed by each division the risks 
are then aggregated and reevaluated in relation to the group as a 
whole identified risks are discussed and the progress reviewed at 
both rotork management board and divisional board meetings 
during the year senior management in association with the full 
board of directors meets twice a year to consider the group risk 
matrix and progress with mitigating actions the external auditor is 
invited to attend one of the meetings each year
this is an ongoing process involving regular assessment of the risks 
with clear and consistent procedures for monitoring updating and 
implementing appropriate controls to manage the identified risks 
we are therefore confident that we have a methodology for 
ensuring that the group’s approach to dealing with individual risks 
is robust and timely 
we identify three main risk areas 
strategic – risks that potentially could affect the strategic aims of 
the business or those issues that could affect the strategic 
objectives that the group is addressing
operational – risks arising out of the operational activities of the 
group relating to areas such as logistics procurement product 
development and interaction with commercial partners and
financial – issues that could affect the finances of the business 
both externally from matters initially outside of our control and 
from the perspective of internal controls and processes
the risks considered during the process cover all aspects of the 
group’s activities and include environmental and ethical risks as 
well as product competitor reputational or financial risks but not 
all of these areas are represented in the top 10 risks which are listed 
opposite these are categorised by the three main risk areas 
identified above mitigation where possible is shown for each risk 
area identified rotork plc annual report 2012
31
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
strategic risks
description potential impact mitigation
competition on price as a 
result of an existing competitor 
moving to manufacture in a 
lower cost area of the world
where a competitor decides to use cost savings to reduce 
their selling prices this could lead to a reduction in the 
general market price rotork might need to respond to a 
change in market price levels whilst still maintaining the 
price premium currently enjoyed for some products
rotork already has a direct presence in terms of 
production sales and service support in the major low 
cost locations there is a constant drive to maintain 
differentiation from the competition both in terms of the 
quality of our products and of the service we provide
not having the appropriate 
products either in terms of 
features or costs
in order to be able to compete on a project our products 
must meet both the necessary specification and pricing 
level a failure on either count could harm our competitive 
position
development of products to meet required specifications 
is an ongoing activity as is the drive to take cost out of our 
products to meet target pricing levels
lower investment in rotork’s 
traditional market sectors
a reduction in capital or maintenance expenditure in one 
of rotork’s key market sectors would result in a smaller 
addressable market which in turn could lead to a 
reduction in revenue from that sector
identification of new markets takes place in each location 
and is coordinated at divisional level this is supported by 
product development and innovation to address new 
markets and new applications in existing markets at a 
group level our geographic and endmarket diversification 
provides resilience to a reduction in any one area or market
operational risks
description potential impact mitigation
major in field product failure 
arising from a component 
defect or warranty issue which 
might require a product recall
replacement of defective components or complete units 
would give rise to a direct financial cost but there would 
also be a reputational risk 
a comprehensive set of quality control procedures 
operates over suppliers these include supplier visits 
audits and a scorecard system to measure their 
performance in some markets legislation determines that 
this risk is entirely passed to the enduser
failure of a key supplier or a 
tooling failure at a supplier 
causing disruption to planned 
manufacturing
where customer delivery expectations are not met this 
could lead to financial penalties and damage customer 
relationships
dual sourcing for key components wherever possible with 
regular monitoring and replacement of tooling at all 
suppliers maintaining inventory levels sufficient to protect 
against short term disruption
failure of an acquisition to 
deliver the growth or synergies 
anticipated due to incorrect 
assumptions or changing 
market conditions or failure to 
integrate an acquisition to 
ensure compliance with 
rotork’s policies and 
procedures
whilst growth opportunities cost savings and synergies 
are identified prior to completion these may not always 
be delivered at the levels anticipated or to the timetable 
expected
during the due diligence process and preparation of the 
100 day plan consideration is given to the composition 
and skills of the management team training and support 
is provided by a variety of rotork personnel to ensure 
effective integration and communication of rotork’s 
policies and procedures whilst monitoring delivery of the 
financial plan
failure of the centralised it 
environment or other loss or 
theft of data
commercially sensitive data is stored and transmitted 
electronically the group is therefore exposed to the risk 
of data loss either maliciously or unintentionally
the group has one centrally hosted enterprise resource 
planning erp system covering the manufacturing sites and 
is in the process of rolling out a new erp system which will 
ultimately be used worldwide
a wide range of security back up and contingency 
measures are in place to protect against these risks with 
the increased centralisation of it a more robust disaster 
recovery environment is under development and will be in 
place before a material number of companies utilise the 
new erp system
financial risks
description potential impact mitigation
volatility of exchange rates significant fluctuations in exchange rates could have an 
adverse impact on rotork’s reported results
a clear treasury hedging policy addresses short term risk 
and this works together with the natural hedging 
provided by the geographical spread of operations 
sourcing and customers
political instability in a key
endmarket
disruption of normal business activity would impact our 
sales in that country and might ultimately leads to loss of 
any assets located in that country as well
the wide geographic spread of rotork’s operations and 
customers diminishes the impact of any one market 
defined benefit pension 
scheme deficit
the amount of the deficit may be adversely affected by a 
number of factors including investment returns long term 
interest rates price inflation and members’ longevity this 
in turn might lead to a requirement for the company to 
increase cash contributions to the schemes
both defined benefit schemes are closed to new 
members with the uk scheme closed in january 2003 
the group and trustees monitor the performance of the 
scheme regularly taking actuarial and investment advice 
as appropriate the results of these reviews are discussed 
by the board rotork plc  annual report 2012
32
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
the group believes that responsible business is the best 
business it can benefit our operational effectiveness 
develop our industry leading products grow our business 
and build on the trust of our stakeholders
why does corporate social 
responsibility matter to rotork
sustainability lies at the heart of the group’s 
commitment to corporate social responsibility 
csr and it represents a valuable opportunity 
to ensure that the group continues to be 
successful in the long term for these reasons 
the group endeavours to entrench csr across 
all its processes and ways of working
the group’s approach to csr is focused 
around four main themes
the environment
the environmental programme described in 
more detail on pages 32 to 35 benefits the 
group in a number of ways including 
ensuring compliance with legal requirements 
in all territories in which the group operates 
achieving cost savings by reducing waste and 
resource consumption and reducing 
emissions which contributes to sustaining the 
environments in which the group operates
ethics and values
the group looks to conduct business in an 
honest and ethical manner at all times high 
standards of ethics and values are important 
to the group because they help to foster an 
open and honest culture which contributes to 
the effectiveness of our people allowing us to 
attract motivate and retain talent build on 
the trust of our stakeholders and to enhance 
and protect our reputation furthermore 
behaving ethically and honestly for example 
by taking a zero tolerance approach to bribery 
and corruption contributes to improving 
standards in markets around the world which 
will help nurture and grow these markets 
more details of the group’s ethics and values 
can be found on pages 35 to 37
health and safety
the group’s employees are essential to the 
success of its business providing a safe 
working environment is paramount and by 
ensuring our people are safe we enhance 
the effectiveness of our workforce by 
mitigating the risk of injury and reducing 
costs associated with employee illness or 
injury the group’s approach to health and 
safety can be found on pages 37 to 38
community involvement
the group’s assetlight assembly only 
manufacturing model means that we do not 
significantly disrupt local communities where 
we are based nevertheless we recognise 
that we operate in a wide number of 
territories around the world and that our 
operations have some impact on the 
communities within these territories 
furthermore the group’s employees 
customers and suppliers are often members 
of these communities and often these 
businesses are run by local people an 
outcome of this engagement is to ensure 
that the group continues to be welcomed  
in the communities it works in and this 
contributes to the sustainability of its 
operations local causes are supported 
through each location having its own charity 
committee focused on its local community 
more details on community involvement can 
be found on pages 38 to 39
the group recognises that shareholders are 
becoming increasingly focused on csr 
issues and take into account the guidelines 
on social responsibility issued by the 
association of british insurers the group 
has been a member of the un global 
compact since 2003 and continues to be 
included in the ftse4good index where we 
maintain an above average score in the 
global rankings uk rankings and industry 
sector rankings
the group believes that the approach it 
takes to csr as set out in this report  
helps to meet the expectations of our 
stakeholders and contributes to the success 
of our corporate strategy by promoting an 
effective and sustainable business
the chief executive reports to the board on 
csr progress the chief executive chairs the 
csr committee a management committee 
which has four subcommittees with each 
representing one of the aspects of csr 
described above presentations are given by 
the chairmen of the four subcommittees 
to the board on activity and progress in 
their areas of csr during the year
the diagram opposite sets out our csr 
committee structure
progress performance  
and targets
the environment
overview
policies procedures and systems are in place 
to eliminate reduce and control our 
operational impact on the environment and to 
ensure compliance with all relevant legislation 
audits measurement and monitoring are 
carried out to ensure our policies and 
procedures are followed and systems are 
effective in managing the impact training is 
provided to enable employees to carry out 
their duties without risk to themselves others 
or the environment
corporate social responsibility rotork plc annual report 2012
33
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
social 
issues 
committee
ethics  
committee
corporate social  
responsibility 
committee
environmental  
committee
health  
safety  
committee
the group considers climate change and 
other environmental risks but given the 
group’s business model it considers the 
overall risk to the environment from the 
group’s activities to be relatively low the 
group notes the following operational risks
•	 eu registration evaluation and 
authorisation of chemicals reach 
legislation as a downstream user the 
group relies on the manufacturers of 
chemicals and preparations for the 
continuing availability of its products 
we continuously monitor the chemicals 
and preparations used and
•	 eu restriction of hazardous substances 
in electrical and electronic equipment 
directive rohs 2 the group’s 
electronic products will need to comply 
with rohs 2 by 2017 we are evaluating 
our products systems and procedures in 
light of rohs 2 and taking action as 
necessary to ensure compliance
the group’s environmental legal compliance 
activities include
•	 waste packaging producers obligation 
regulations 2007 – rotork is a member 
of the clarity compliance scheme
•	 waste electrical and electronic 
equipment regulations 2006 weee – 
rotork is a member of the clarityweee 
compliance scheme
•	 waste battery and accumulator 
regulations 2009 – rotork is registered 
as a small battery producer and
•	 where regulated use of licensed waste 
carriers for the removal of all types of 
waste from rotork facilities – our waste 
goes to licensed treatment facilities
group environmental policy  
and procedures
the group’s environmental policy applies 
to the company and all its subsidiaries 
worldwide the policy includes 
commitments to the prevention of 
pollution compliance with all relevant legal 
and regulatory requirements and to the 
continuous improvement of environmental 
performance the policy was revised in 
september 2012 the group’s 
environmental policy can be found at  
wwwrotorkcom in the investors section 
under corporate social responsibility  
environment
separate policies define the company’s 
expectations on a number of environmental 
issues such as recycling and water use 
some rotork businesses which operate in 
regions that have fewer environmental 
facilities available for example recycling 
facilities can present challenges but it is 
rotork’s expectation that our environmental 
policies are implemented consistently across 
the group
operational control procedures are in place 
to manage a range of environmental 
activities such as the generation and 
disposal of hazardous waste storage and 
use of oil and volatile organic compounds 
voc and the maintenance of air 
conditioning equipment where 
appropriate emergency plans are produced 
and communicated effectively to manage 
and control potential incidents which may 
pollute such as oil spills
systems are in place to monitor environmental 
performance across the group this report 
sets out performance summaries of
•	 energy consumption
•	 waste generation and recycling 
including hazardous waste and
•	 water consumption
data on voc and refrigerants hfc is also 
recorded and reported in the environmental 
report available from the investors section 
of the rotork website under corporate 
social responsibility  environment a full 
brief of group environmental performance 
is given at quarterly csr committee 
meetings where actions are documented 
and progress reviewed at the next meeting
this year’s report encompasses more data 
than before as more locations including 
recent acquisitions report their 
environmental performance
a more detailed report of environmental 
performance for the year ending 31 
december 2012 will be given in the 
environmental report to be published on 
the rotork website in april 2013 a copy 
of our environmental report containing 
2011 performance data can be found at 
wwwrotorkcom in the investors section 
under corporate social responsibility  
environment
progress
energy consumption
rotork operates an assembly only philosophy 
in all but four of our business units and we 
rely on specialist suppliers for most of our 
manufactured components and assemblies 
in all facilities energy is used for it systems 
lighting heating and cooling exceptions 
are the group’s operations in losser 
netherlands falun sweden mansfield 
uk and winstonsalem usa where some 
machine processes are in operation in other 
locations test equipment is used to ensure 
the product meets customer operational 
requirements which can consume large 
amounts of energy for short periods of time 
when in use rotork plc  annual report 2012
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financial statements 65114
company information 115117
corporate social responsibility 
continued
consumption of electricity gas and steam is 
calculated using utility invoices liquified 
petroleum gas lpg and oil is calculated 
using sales invoices
2012 energy consumption performance 
summary and 2013 targets
•	 on a like for like basis energy 
consumption increased 10 compared 
with 2011 slightly below the rate of 
organic revenue increase with the 
inclusion of new reporting companies 
this year the overall increase was 24
•	 the expansion of the group’s facility in 
shanghai china and the new plant in 
chennai india contributed significantly to 
the increase in business activity with small 
fluctuations in climate conditions at some 
facilities also contributing to the increase
waste generation and recycling
waste generation includes packaging waste 
card wood and plastic metal waste 
ferrous and nonferrous hazardous 
materials paint waste oils and adhesives 
batteries and waste electrical electronic 
equipment
the group’s policy is to recycle wherever 
possible we have installed recycling 
equipment such as balers and wood 
crushers at a number of our high volume 
locations to ensure suppliers also play their 
part we have introduced our own minimum 
packaging standards for suppliers
as the number of reporting locations 
increases the amount of waste recycled 
continues to rise
2012 waste generation and recycling 
performance summary 
•	 waste generation increased by 12 to 
2572 tonnes
•	 recycling increased by 13 to 1981 tonnes
•	 waste recycling kpi the percentage of 
recycled waste against total waste was 
77 exceeding the 2012 target of 76
the 2012 recycling  waste generation 
performance figures include data from 
locations which operate in regions where 
recycling facilities are in their infancy or not 
available
waste recycling has been one of the 
group’s published kpis since they were 
introduced in 2008 we have made 
considerable progress over this time and 
whilst the drive to maintain these high levels 
of recycling will continue and will be 
reported in the environmental report this 
kpi will be replaced by a carbon emissions 
kpi in the group kpis for 2013
water consumption
water consumption is measured across the 
group for the majority of rotork locations 
water consumption derives from normal 
operation and sanitary use the exception 
to this is winstonsalem usa where 
processes involving higher volumes of water 
are in operation
2012 water consumption performance 
summary
•	 water consumption in 2012 increased by 
55 against 2011 results
•	 the winstonsalem site in the usa a 
recent acquisition accounts for 61 of 
the increase 
•	 chennai india where the group has 
opened a new manufacturing and research 
facility accounts for 20 of the increase
•	 bath uk where there has been an 
increase in product testing accounts for 
8 of the increase 
•	 lucca italy where there has been an 
increase in product testing accounts for 
6 of the increase
the balance of the increase is a result of 
fluctuations in normal usage and the 
inclusion of performance data from new 
acquisitions water consumption in 
winstonsalem is under review and the 
results of that review will be published in 
the 2012 environmental report
annually a team from ktork in dallas usa helps children in 
choluteca honduras by giving them food and toys
a team from houston usa took part in the bp multiple 
sclerosis 150 houston to austin bike ride and raised 1950 rotork plc annual report 2012
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governance 4464
financial statements 65114
company information 115117
business travel
systems and procedures are in place to 
measure business travel by road coach rail 
and air and the transport of products by 
company owned vehicles covering operations 
of many of the group’s sites the group uses 
video conferencing at all of its manufacturing 
facilities to reduce business travel
business travel data for 2011 was incomplete 
as systems were being established to capture 
the data in some locations therefore the 
2012 data will be used as the baseline year 
for business travel data more detailed 
information on business travel will be 
published in the group’s 2012 environmental 
report which will be available to download 
from the rotork website
carbon emissions
the group measures and calculates scope 
1 2 and 3 greenhouse gas emissions ghg 
and publishes the results through the 
carbon disclosure project and in the 
environmental report
•	 the group’s scope 1 ghg emissions 
derive from the consumption of gas 
liquified petroleum gas oil and through 
business travel and the transport of 
goods via rotork owned vehicles 
•	 the group’s scope 2 ghg emissions 
derive from the consumption of 
electricity and steam
•	 the group’s scope 3 ghg emissions 
derive from the materials used in the 
product supply chain emissions travel 
between the supply chain and rotork  
and other business travel not included in  
scope 1 emissions the project to calculate 
‘cradle to gate’ emissions that is emissions 
from the extraction of minerals in the 
ground cradle to when the products leave 
the group’s manufacturing facilities gate 
for all current products is 80 complete 
however further work on electronic 
components across all products is needed 
before the publication of any results
three teams from rotork climbed the penyfan 
horseshoe in the brecon beacons for wateraid
tom whittingham from rotork bath uk took 
part in the cardiff half marathon and raised over 
£1300 for me research with a further £250 
from rotork’s charity committee
the group calculates ghg emissions in 
accordance with the greenhouse gas 
protocol ghg protocol developed jointly 
by the world business council for 
sustainable development and the world 
resource institute
scope 1 and scope 2 ghg emissions are 
calculated in accordance with the ghg 
protocol using conversion factors published 
by the us environmental protection agency 
epa the department for environment 
food and rural affairs defra and the 
international energy agency iea
all scope 2 ghg emissions have been 
calculated using the relevant conversion factor 
for the territory where energy was used or 
consumed based on the mix of coal oil gas 
hydroelectric or nuclear generation
all scope 3 ghg emissions relating to travel 
are calculated using conversion factors 
published by defra in august 2011
2012 carbon emissions performance 
summary and 2013 targets
the following summary excludes supply 
chain emissions
•	 operational emissions for 2012 increased 
by 16 on a like for like basis or 29 in 
total when acquisitions are included
•	 scope 1 emissions increased by 14 
•	 scope 2 emissions increased by 37
new acquisitions accounted for 46 of the 
increase in emissions with the balance of 
the increase resulting from increased 
business activity
energy efficiency is an area in which the 
group intends to focus greater attention 
for 2013 the group will introduce a new 
carbon emissions kpi as one of the group’s 
reported nonfinancial kpis our target is to 
reduce our carbon emissions as a function 
of revenue by 10 between now and 2017 
work will start this year and include 
completing studies at our larger sites and 
whilst the measured progress may be 
modest in 2013 momentum will build over 
the five year time period
ethics and values
overview
ethics and values are central to the way we 
do business the group’s ethics and values 
statement can be viewed on our website in a 
number of languages ethics and values can 
be split into four strands
•	 human rights and ethical business
the group is fully committed to respecting 
internationally proclaimed human rights as 
defined in the international declaration of 
human rights and the international 
labour organisation’s standards the 
group does not accept any form of child 
or forced labour and embracing the un 
global compact principles throughout the 
business is a demonstration of this 
commitment
the group recognises that an open and 
honest culture is key to understanding 
concerns within the business and to 
uncover and investigate any potential 
wrongdoing in 2012 the group 
substantively approved a refreshed and 
updated whistleblowing policy and an 
independent external whistleblowing 
hotline both of which will be introduced 
in 2013
•	 employees
we have a firm commitment to all our 
employees regarding safety and 
development rotork has an objective and 
fair recruitment process which promotes 
equal opportunities across the group 
inline with the global ‘respect at work 
and equality of opportunity’ policy the 
group’s offices in bath uk and 
parabiago italy have employee forums 
where employees can raise issues to be 
dealt with by management rotork plc  annual report 2012
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the group supports apprenticeship 
schemes for young men and women 
which help to increase access into all 
aspects of the group’s business
wwwrotorkcomeninvestorsindex
ethicsvalues
•	 bribery and corruption
the group has a zero tolerance policy on 
bribery and corruption worldwide 
irrespective of country or business 
culture the group’s ethics and values 
statement states that our employees will 
never offer pay or solicit bribes in any 
form and is published on the group’s 
website in a number of languages 
the group does not make political 
contributions in cash or kind anywhere 
in the world 
the group’s whistleblowing policy gives 
whistleblowers a platform to alert senior 
management to any suspected bribery or 
corruption which is available to 
download from the rotork website
the group also makes use of detailed 
background checks provided by specialist 
bribery and corruption due diligence 
consultants before it deals with 
unknown third parties including agents 
prospective acquisitions and suppliers 
which are operating in higher risk 
jurisdictions or market sectors the 
group makes use of objective guidance 
on country risk such as the corruption 
perception index by transparency 
international to help assess potential 
risks in this area when working with the 
unknown third party and after the initial 
detailed background checks the group 
also continually screens these third 
parties against a large number of 
international sources which could detect 
unethical behaviour including watchlists 
sanctions lists and the media using its 
due diligence consultants’ proprietary 
database this database is also used in 
situations where enhanced due diligence 
would be disproportionate such as 
where the third party is known to the 
group and located in a low risk 
jurisdiction and market sector these 
third parties are also subject to continual 
screening
during 2012 an exercise was undertaken 
to send new agency agreements to all of 
the group’s agents these agreements 
incorporate the group’s ethics and 
values statement and oblige the agent 
to read understand and comply with the 
same ethical standards as the group’s 
employees including an absolute 
prohibition on bribery and corruption 
the new agency agreements all contain 
a consistent contractual limit on the 
maximum commission payable and how 
it can be earned inline with the group 
policy on commission
•	 suppliers
the group has continued to invest in its 
outsourcing model selecting suppliers 
with sound reputations in the 
marketplace many of the suppliers have 
a long term working relationship with 
the company ensuring ingrained 
product knowledge within the supply 
chain suppliers are also subject to 
continuous automated online monitoring 
as described above and the company is 
alerted where any derogatory 
information is uncovered
in the past year the supplier assessment 
programme has been extended to 
include more detailed csr themed 
questions questions associated with 
equal rights and equal pay antibribery 
and corruption policies charitable giving 
environmental impact and anti 
compulsory labour or child labour 
practices have been included in these 
surveys current and established 
suppliers have been considered under 
corporate social responsibility 
continued
markus scheider from rotork melle germany took part in 
the 25th ipa niedersachsen tour 2012 and rotork kindly 
donated €600 in aid of a german children’s cancer charity
staff and their families contributed 1612 to run ballarat a 
charity race that takes place in australia rotork plc annual report 2012
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this reevaluation these assessments are 
discussed directly with the suppliers any 
corrective action plan is agreed between 
rotork and the supplier a programme is 
in place to continue these assessments 
throughout 2013 looking at both 
existing and potentially new suppliers
the group’s uk trading companies 
rotork controls limited and rotork uk 
limited are both signatories to the 
prompt payment code which ensures 
that suppliers are paid according to the 
terms agreed and encourages good 
practice be passed down supply chains 
progress
•	 an updated and refreshed group 
whistleblowing policy was substantively 
approved which incorporates the use of 
an independent external whistleblowing 
hotline as an alternative method to 
raising whistleblowing concerns 
internally
•	 following on from a revision of the supplier 
audit questionnaire in 2011 to include 
questions centred around csr 25 of the 
top 50 suppliers and all new suppliers to 
rotork’s bath uk manufacturing plant 
were retrospectively audited and no 
remedial action was required
•	 a ftse4good score of 38 was 
maintained this is in excess of uk 
global and industry averages
•	 an employee satisfaction survey score of 
36 was achieved a small increase on the 
previous year with record numbers of 
employees participating
•	 regular communications sent from the 
group legal department to general 
managers and international sales 
managers regarding relevant bribery and 
corruption related events in the business 
environment and the whistleblowing 
policy was communicated to all 
employees in every edition of the 
company newsletter
•	 ongoing automatic bribery and 
corruption screening introduced
2013 targets
•	 use improved ethical supplier auditing to 
retrospectively audit a further 20 major 
suppliers
•	 deliver bribery and corruption training to 
relevant nonmanagerial employees
•	 continue to reference antibribery and 
corruption in each company newsletter
•	 rollout the updated whistleblowing 
policy and independent external 
whistleblowing hotline to the group
health and safety
overview
the safety of group employees customers 
and visitors is of paramount importance to 
the group it is our policy to provide a safe 
working environment for all employees and 
visitors to any of the group’s sites and 
ensure employees work safely for these 
reasons policies and procedures are in 
place and help to eliminate reduce or 
control our operational risks and ensure 
compliance with health and safety 
legislation
the group undertakes health and safety 
audits at all of its locations a schedule of 
audits is established and approved by the 
csr committee each rotork location is 
audited against a checklist which has been 
developed to ensure each location meets 
the group’s standards for health and safety 
each item on the checklist is assessed 
against predetermined criteria and scored 
a calculation of the overall score gives the 
location a rating and any location not 
achieving the baseline rating is given limited 
time to improve
all audits are reviewed by the group’s health 
and safety officer and all actions resulting 
from audits are recorded and monitored for 
correct and timely rectification
a full report of our group health and safety 
performance is given at quarterly csr 
committee meetings and all actions are 
recorded and progress reviewed at the next 
meeting the results of audits the rating of 
locations and the status of audit actions are 
reviewed by the health and safety committee 
and any actions identified are acted upon
training is provided to enable employees to 
carry out their duties without risk to 
themselves or to others 
the group health and safety policy is 
endorsed by the chief executive and sets out 
the group’s requirement to ‘meet or exceed 
legislative and other requirements in the 
countries in which rotork operates’ the 
policy can be viewed on the group’s website 
under corporate social responsibility – 
health and safety in the investors’ section 
effective management of the group’s health 
and safety programme enables us to
•	 minimise the risk of injury to our 
employees customers and suppliers and 
damage to property
•	 reduce costs associated with employee 
illness injury and loss of physical assets
•	 continually improve the group’s health 
and safety practices
the group operates a behaviourbased safety 
programme this requires managers and 
supervisors to encourage safe working 
practices by
•	 promoting regular safety observations by 
all staff
•	 regularly asking employees for their 
suggestions for improving safety at their 
facility
•	 holding employees accountable for 
observing these practices
•	 providing managing safety courses for 
line management and
•	 regular health and safety training to 
employees on subjects such as manual 
handling and confined spaces
the group’s health and safety policy and 
arrangement document sets out the 
company’s policies for all of its activities 
rotork employees are engaged in activities 
which include manual handling of heavy 
objects mechanical lifting operating 
machinery and driving to suppliers and 
customers’ locations in addition to working 
in the group’s facilities employees also work 
on customer sites which are often more 
hazardous to reduce the risks associated 
with these activities additional safe working 
practices are in place and include
•	 site surveys to establish requirements 
measurements and an assessment of the 
potential work area
•	 design assessments to identify risks hazards 
and necessary controls to eliminate reduce 
or control the risk to a reasonable level
•	 method statements detailing the work 
that is to be done the control and 
equipment that are to be used rotork plc  annual report 2012
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•	 point of work risk assessments before 
work starts which must also be reviewed 
after any period away from the work area
•	 the use of permitstowork when 
working in hazardous environments such 
as confined space work and 
•	 unannounced internal audits of employees 
when working on a customer site
five performance indicators are monitored 
across the group and performance against 
these indicates is reported to the audit 
committee 
•	 accident frequency rate which is a 
reported group kpi 
•	 lost time rate 
•	 incident frequency rate 
•	 health and safety audit rating and
•	 on time completion of health and safety 
audit actions
by monitoring the results of these performance 
indicators we are able to identify areas of 
strong performance which can be shared 
across the group and areas of weakness which 
may require additional resources and training 
progress
one of the group’s nonfinancial kpis is 
accident frequency rate afr it is 
calculated as an average of the past three 
years’ afr performance in 2012 the group 
achieved an afr of 046 surpassing the 
2012 target of 047
details of the group’s afr over the past five 
years and how it is calculated is shown on 
page 29
2013 targets
•	 achieve an afr of 043
community involvement
overview
the group considers it important to 
contribute to and engage positively with 
stakeholders in the communities in which it 
operates and to be a good community 
neighbour around the world we regard this 
as part of our ongoing responsibilities as a 
corporate entity the group seeks to be 
regarded as a good corporate citizen this 
links into our corporate values which include 
producing a positive and beneficial impact in 
the areas in which we operate one of the 
ways the group does this is by having local 
charity committees at each of our sites which 
donate to local charitable causes this 
empowers local employees to decide how to 
distribute the funds in their local 
communities the group aims to contribute 
01 of profits to local charitable causes
local community involvement highlights 
from the year include
•	 a rotork germany employee based in 
melle speaking at a local high school 
about job applications
•	 various locations running 
apprenticeships work placement and 
internship programmes
•	 rotork fairchild employees donating to a 
local food bank
•	 rotork shanghai employees supporting a 
local primary school and
•	 rotork india employees donating clothes 
to local causes
the group has forged links with local 
universities colleges and schools in a 
number of the locations where we operate 
and sponsors students to go into higher 
education in india in addition to sponsoring 
a school there the group is the industry 
member of the bath educational trust 
which aims to advance education in bath 
schools and promote community cohesion 
a group representative is a member of the 
industrial advisory board for the mechanical 
engineering department of bath university 
the group is also a member of an initiative 
of the engineering development trust and 
sponsors a science project currently being 
undertaken by pupils in the sixth form of a 
local bath school
corporate social responsibility 
continued
rotork’s charity committee in sweden donated 15700 sek 
to the swedish cancer society rotork plc annual report 2012
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financial statements 65114
company information 115117
the group has supported two international charities in 2012 
wateraid and send a cow speciﬁc projects of these charities 
are supported and the group receives updates throughout the 
year on the progress of the projects
wateraid uses the group’s support to help fund the jeldu woreda 
project in ethiopia which aims to deliver safe and adequate water 
sanitation and hygiene facilities to 16000 villagers across three 
villages in ethiopia by using alternative energy sources to provide a 
sustainable water pumping system wateraid also use rotork’s 
support to promote good sanitation and hygiene practices in the 
village by providing adequate facilities such as hand washing basins 
the project beneﬁts include a reduction in the prevalence of water 
borne diseases a reduction in the distance travelled to reach fresh 
water improved access to sanitation facilities and improved 
environmental cleanliness the group has supported this project 
since 2011 when it was in its ﬁrst phase and will continue to 
support it until this project is completed in 2013 
send a cow uses the group’s contributions to support its building 
futures project building futures provides families in eastern 
uganda with training resources and knowledge to equip them with 
vital farming skills to improve agricultural productivity and allow 
families to work their way out of poverty by being able to generate 
a regular income the group funds several communities and send a 
cow provides livestock practical training in sustainable agricultural 
practices and training on building strong and harmonious 
communities so that the families can work together and become 
selfreliant training is also provided on other issues such as home 
hygiene practices and hivaids prevention and care
progress
•	 £50000 contributed by the group to wateraid plus a further 
£6378 contributed to wateraid through employee fundraising 
activities
•	 £41000 contributed to send a cow and
•	 £110000 contributed to local charitable causes
2013 targets
•	 to increase donations to charitable causes the group will 
endeavour to
 – donate 01 of group proﬁts to rotork’s nominated 
international charities and
 – donate 01 of group proﬁts to charitable causes local to 
rotork’s operating sites
contacts and feedback
the group welcomes and values feedback if you have any 
comments regarding this csr report or any aspect of the group’s 
csr programme please contact stephen jones company secretary 
by writing to him at the rotork plc registered ofﬁce full details of 
which can be found in the corporate directory on page 117
charitable donations over the last ﬁve years £
2012 2011 2010 2009 2008
69000 95000 144000 163000 201000
photographer credit 
wateraidjames mccauley
wateraid jeldu woreda 
project that rotork funds rotork plc  annual report 2012
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financial statements 65114
company information 115117
board of directors
peter france
chief executive
jonathan davis
finance director
graham ogden
research  development
director
bob arnold
president of rotork 
controls inc
roger lockwood
chairman
ian king
senior independent 
nonexecutive director
john nicholas
nonexecutive director
gary bullard
nonexecutive director
sally james
nonexecutive director
biography peter was appointed as 
chief executive of rotork 
plc in 2008 he joined 
rotork in 1989 as an inside 
sales engineer in 1998  
he was appointed director 
and general manager at 
rotork singapore before 
becoming managing 
director of the fluid 
systems division and then 
chief operating officer
jonathan joined rotork in 
2002 after holding a 
number of finance 
positions in listed 
companies he gained 
experience of the rotork 
business initially as group 
financial controller and 
then as finance director  
of the rotork controls 
division and in 2010 was 
appointed group finance 
director
graham has been with 
rotork since 1985 and has 
been closely involved in 
product development 
including our award 
winning iq series he was 
appointed to the rotork 
controls divisional board  
in 1997 as research  
development director
bob was appointed 
president of rotork 
controls inc in 1988 and 
has responsibility for all 
rotork’s interests in the 
americas he joined rotork 
controls inc in 1978 as 
engineering manager 
subsequently becoming 
vice president 
engineering prior to 
joining rotork bob worked 
in the usa as a design 
engineer in the nuclear 
valve group 
roger has been a 
nonexecutive director of 
rotork since joining the 
board and became 
nonexecutive chairman  
in november 1998 he 
previously held ceo roles 
in automotive and 
engineering businesses 
ian has been a member of 
the executive committee 
and plc board of bae 
systems since 2007 
following his appointment 
as coo uk  rest of 
world previously ian has 
held a number of executive 
general management roles 
across bae and marconi 
john was previously group 
finance director of tate  
lyle plc and kidde plc 
gary previously held senior 
management positions 
including sales and 
marketing roles at ibm 
and bt group plc and was 
a nonexecutive director of 
chloride group plc gary 
most recently held the 
position of president logica 
uk until october 2012 and 
was a member of the 
executive committee of 
logica plc
sally previously held senior 
legal roles in investment 
banking in london and 
chicago including 
managing director and 
regional general counsel 
for ubs investment bank 
she has also held the 
position of bursar of 
corpus christi college 
cambridge 
appointed to the board 2006 2010 2005 2001 1988 2005 2008 2010 2012
external
appointments
director of the bath 
education trust 
chairman of hydro 
international plc 
chief executive of bae 
systems plc
nonexecutive director of 
mondi plc
nonexecutive director of 
hunting plc
member of the financial 
reporting review panel of 
the financial reporting 
council frc
founder and ceo of 
catquin ltd
nonexecutive director of 
the smart cube
nonexecutive director of 
ubs limited
nonexecutive director of 
towry limited
nonexecutive director of 
barts health nhs trust
trustee of legal education 
foundation
independent member of 
council of the university of 
sussex
committee
membership
nomination nomination chairman audit nomination and 
remuneration
audit chairman 
nomination and 
remuneration
remuneration chairman 
audit and nomination
audit remuneration and 
nomination rotork plc annual report 2012
41
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
peter france
chief executive
jonathan davis
finance director
graham ogden
research  development
director
bob arnold
president of rotork 
controls inc
roger lockwood
chairman
ian king
senior independent 
nonexecutive director
john nicholas
nonexecutive director
gary bullard
nonexecutive director
sally james
nonexecutive director
biography peter was appointed as 
chief executive of rotork 
plc in 2008 he joined 
rotork in 1989 as an inside 
sales engineer in 1998  
he was appointed director 
and general manager at 
rotork singapore before 
becoming managing 
director of the fluid 
systems division and then 
chief operating ofﬁcer
jonathan joined rotork in 
2002 after holding a 
number of ﬁnance 
positions in listed 
companies he gained 
experience of the rotork 
business initially as group 
financial controller and 
then as finance director  
of the rotork controls 
division and in 2010 was 
appointed group finance 
director
graham has been with 
rotork since 1985 and has 
been closely involved in 
product development 
including our award 
winning iq series he was 
appointed to the rotork 
controls divisional board  
in 1997 as research  
development director
bob was appointed 
president of rotork 
controls inc in 1988 and 
has responsibility for all 
rotork’s interests in the 
americas he joined rotork 
controls inc in 1978 as 
engineering manager 
subsequently becoming 
vice president 
engineering prior to 
joining rotork bob worked 
in the usa as a design 
engineer in the nuclear 
valve group 
roger has been a 
nonexecutive director of 
rotork since joining the 
board and became 
nonexecutive chairman  
in november 1998 he 
previously held ceo roles 
in automotive and 
engineering businesses 
ian has been a member of 
the executive committee 
and plc board of bae 
systems since 2007 
following his appointment 
as coo uk  rest of 
world previously ian has 
held a number of executive 
general management roles 
across bae and marconi 
john was previously group 
finance director of tate  
lyle plc and kidde plc 
gary previously held senior 
management positions 
including sales and 
marketing roles at ibm 
and bt group plc and was 
a nonexecutive director of 
chloride group plc gary 
most recently held the 
position of president logica 
uk until october 2012 and 
was a member of the 
executive committee of 
logica plc
sally previously held senior 
legal roles in investment 
banking in london and 
chicago including 
managing director and 
regional general counsel 
for ubs investment bank 
she has also held the 
position of bursar of 
corpus christi college 
cambridge 
appointed to the board 2006 2010 2005 2001 1988 2005 2008 2010 2012
external
appointments
director of the bath 
education trust 
chairman of hydro 
international plc 
chief executive of bae 
systems plc
nonexecutive director of 
mondi plc
nonexecutive director of 
hunting plc
member of the financial 
reporting review panel of 
the financial reporting 
council frc
founder and ceo of 
catquin ltd
nonexecutive director of 
the smart cube
nonexecutive director of 
ubs limited
nonexecutive director of 
towry limited
nonexecutive director of 
barts health nhs trust
trustee of legal education 
foundation
independent member of 
council of the university of 
sussex
committee
membership
nomination nomination chairman audit nomination and 
remuneration
audit chairman 
nomination and 
remuneration
remuneration chairman 
audit and nomination
audit remuneration and 
nomination rotork plc  annual report 2012
42
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
the rotork management board
peter france
chief executive
jonathan davis
finance director
graham ogden
research  development
director
bob arnold
president of rotork 
controls inc
grant wood
md rotork controls
alex busby
md rotork fluid  
systems
david littlejohns
md rotork gears
alan paine
md rotork  
instruments
carlos elvira
group sales   
marketing director
alastair spurr
group operations 
director
stephen jones
group legal director
mark williams
group hr director
pamela bingham
group business 
development director
biography grant joined rotork in 
2006 as director of rotork 
site services rss before 
being appointed as 
managing director of 
rotork’s controls division 
and joining the rotork 
management board in 
march 2011 before joining 
rotork grant gained 
considerable experience in 
the utility financial and 
energy sectors
alex joined rotork in 1985 
and in 1989 he went to a 
company in the same 
industry holding various 
management roles in asia 
and europe he rejoined 
rotork in 2003 as business 
development manager 
and then was business 
development director 
before becoming 
managing director of 
rotork fluid systems and 
joining the rmb in 2008
david joined the 
engineering design 
department in 1985 and  
he moved to rochester 
usa in 1996 as an 
engineer he moved into 
sales before becoming 
general manager in 
california in 2006 he  
was appointed managing 
director of the gears 
division and joined  
the rmb
alan joined rotork in 
november 2011 as 
managing director for 
rotork fairchild he was 
appointed as managing 
director of the instruments 
division and joined the 
rmb in january 2013 
before joining rotork 
alan managed several 
international companies in 
the automotive and linear 
bearings industries
carlos joined in 1981 as 
the first graduate trainee 
in international sales he 
became international sales 
manager in 1989 in 1999 
he became controls sales 
 marketing director and 
joined the rmb in january 
2011 he was appointed 
group sales  marketing 
director
alastair joined rotork in 
2005 as operations 
director of the controls 
division he is a member of 
the rotork management 
board and in january 2011 
he was appointed group 
operations director before 
joining rotork alastair 
held positions within the 
engineering construction 
and retail industries
stephen joined rotork in 
1999 he is group legal 
director and company 
secretary and joined the 
rmb in 2007 he is a 
solicitor and has held 
positions in the 
engineering and 
construction industries as 
well as in private practice
mark joined rotork in 2007 
as bath hr manager before 
being promoted to global 
hr director in 2009 
he joined the rmb as 
group hr director at the 
beginning of 2012 prior to 
joining rotork mark has 
held various hr positions 
in the automotive 
manufacturing sector and 
transport industries
pamela joined rotork 
as group business 
development director and 
the rmb in march 2012 
she has gained a wealth 
of experience in legal 
commercial and business 
development roles 
pamela has worked in 
the engineering mining 
renewable energy and 
oil  gas sectors
appointed to the board 2011 2008 2006 2013 1999 2005 2007 2012 2012 rotork plc annual report 2012
43
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
grant wood
md rotork controls
alex busby
md rotork fluid  
systems
david littlejohns
md rotork gears
alan paine
md rotork  
instruments
carlos elvira
group sales   
marketing director
alastair spurr
group operations 
director
stephen jones
group legal director
mark williams
group hr director
pamela bingham
group business 
development director
biography grant joined rotork in 
2006 as director of rotork 
site services rss before 
being appointed as 
managing director of 
rotork’s controls division 
and joining the rotork 
management board in 
march 2011 before joining 
rotork grant gained 
considerable experience in 
the utility ﬁnancial and 
energy sectors
alex joined rotork in 1985 
and in 1989 he went to a 
company in the same 
industry holding various 
management roles in asia 
and europe he rejoined 
rotork in 2003 as business 
development manager 
and then was business 
development director 
before becoming 
managing director of 
rotork fluid systems and 
joining the rmb in 2008
david joined the 
engineering design 
department in 1985 and  
he moved to rochester 
usa in 1996 as an 
engineer he moved into 
sales before becoming 
general manager in 
california in 2006 he  
was appointed managing 
director of the gears 
division and joined  
the rmb
alan joined rotork in 
november 2011 as 
managing director for 
rotork fairchild he was 
appointed as managing 
director of the instruments 
division and joined the 
rmb in january 2013 
before joining rotork 
alan managed several 
international companies in 
the automotive and linear 
bearings industries
carlos joined in 1981 as 
the ﬁrst graduate trainee 
in international sales he 
became international sales 
manager in 1989 in 1999 
he became controls sales 
 marketing director and 
joined the rmb in january 
2011 he was appointed 
group sales  marketing 
director
alastair joined rotork in 
2005 as operations 
director of the controls 
division he is a member of 
the rotork management 
board and in january 2011 
he was appointed group 
operations director before 
joining rotork alastair 
held positions within the 
engineering construction 
and retail industries
stephen joined rotork in 
1999 he is group legal 
director and company 
secretary and joined the 
rmb in 2007 he is a 
solicitor and has held 
positions in the 
engineering and 
construction industries as 
well as in private practice
mark joined rotork in 2007 
as bath hr manager before 
being promoted to global 
hr director in 2009 
he joined the rmb as 
group hr director at the 
beginning of 2012 prior to 
joining rotork mark has 
held various hr positions 
in the automotive 
manufacturing sector and 
transport industries
pamela joined rotork 
as group business 
development director and 
the rmb in march 2012 
she has gained a wealth 
of experience in legal 
commercial and business 
development roles 
pamela has worked in 
the engineering mining 
renewable energy and 
oil  gas sectors
appointed to the board 2011 2008 2006 2013 1999 2005 2007 2012 2012 rotork plc  annual report 2012
44
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
corporate governance
roger lockwood
chairman
the continuing success of the rotork group 
its reputation in its markets and its 
relationships with its stakeholders is 
dependent on and protected by the 
leadership provided by an effective board 
good corporate governance supports the 
effectiveness of your board and contributes 
towards the long term success of our 
company
our corporate governance report is set out 
on pages 44 to 61 and describes the roles 
accountabilities and expectations for our 
directors and board structures in the table 
opposite there is a summary of the business 
the board considered in 2012 we are 
subject to the uk corporate governance 
code code and whilst ensuring we provide 
detailed reporting we have sought to place 
emphasis on explaining how the principles 
of the code are applied across our group 
i am pleased to report that for the year 
under review following the appointment 
of an additional independent nonexecutive 
director we now fully comply with the 
code and have ensured an equal balance 
between executive directors and 
independent nonexecutive directors 
corporate governance highlights for  
the year under review include acting  
on our commitment as contained in  
our announcement in response to the  
davies report to achieve 25 female 
representation in our independent non
executive directorate we achieved this 
commitment with the appointment of  
sally james in may 2012 sally has joined  
the audit remuneration and nomination 
committees and we look forward to her 
contribution in the future we revised and 
updated the terms of reference of our 
audit committee in response to changes 
made to the code and associated guidance 
for audit committees which will apply from 
the next financial year we also updated our 
policy on nonaudit fees paid to the auditor 
and revised and updated our whistleblowing 
policy our revised whistleblowing policy and 
independent hotline to raise whistleblowing 
concerns are to be launched in early 2013
i believe that good corporate governance 
when properly applied supports and 
protects our business and its long term 
success by creating a link based on trust 
and engagement between rotork and its 
stakeholders it is important for governance 
to focus on the entire organisation and at 
rotork we seek to apply it across our 
activities worldwide in a consistent and 
unified way to create and maintain the right 
culture throughout our group i believe this 
allows us to produce a better business 
rotork’s products and services are offered 
in many markets and territories and we 
recognise that our business activities affect 
a diverse range of stakeholders with that in 
mind we must ensure that we consistently 
do things the right way through a unified 
approach our corporate governance 
arrangements underpin this by ensuring that 
our people know not just what to do but 
how to do it 
roger lockwood
chairman rotork plc annual report 2012
45
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
summary of 2012 board business
 – performance and business review including a review of prospective acquisitions
 – investor relations report from chief executive
 – consideration of the audit committee recommendation to approve the 2011 financial 
statements for presentation to the shareholders for their approval at the annual general 
meeting agm
 – consideration of the 2011 financial statements and potential final dividend amount
 – receipt of a presentation from the chief executive and finance director of the preliminary 
announcement of the 2011 final financial results
 – review of 2011 corporate objectives
 – receipt of a presentation from rotork fluid systems division’s senior management
 – performance and business review including a review of prospective acquisitions
 – investor relations report from the chief executive
 – consideration of the agm proxy returns and reports and consideration of the agm 
arrangements
 – receipt of a presentation from rotork controls division’s senior management
 – consideration of the audit committee recommendation to approve the interim management 
statement
 – performance and business review including a review of prospective acquisitions
 – investor relations report from the chief executive
 – discussion of the half year interim dividend
 – group risk review
 – group strategy presentation by the chief executive
 – receipt of a presentation from rotork india’s management
 – performance and business review including a review of prospective acquisitions
 – investor relations report from the chief executive
 – receipt of a presentation from the chief executive and finance director of the half year results
 – strategy discussion
 – consideration of the draft 2013 board timetable
 – receipt of presentations from rotork gears division’s senior management and rotork’s usa 
senior management
 – performance and business review including a review of prospective acquisitions
 – investor relations report from the chief executive
 – discussion of board evaluation findings
 – consideration of the kay review of uk equity markets and longterm decision making
 – approval of appointment of joint financial advisors and corporate brokers
 – performance and business review including a review of prospective acquisitions
 – investor relations report from the chief executive
 – approval of the 2013 budget
 – consideration of proposed legislative changes relating to narrative reporting in annual 
reports and the revised uk corporate governance code 2012 applying to rotork from the 
next financial year
 – receipt of presentations from the group sales and marketing director and rotork site 
services director
 – consideration of the audit committee recommendation to approve the interim management 
statement
 – performance and business review including review of prospective acquisitions
 – investor relations report from the chief executive
 – discussion of potential 2012 final dividend amount
 – review of effectiveness of risk management and internal control systems
 – consideration of the 2012 abi report on board effectiveness and the government’s response 
to the kay review
 – approval of revised terms of reference for the nomination committee and audit committee
 – approval of directors’ situational conflicts of interests disclosures
 – discussion of 2012 corporate objectives
 – receipt of presentation from the group research  development director and group it director
february
april
june  
meeting held  
at rotork’s 
indian plant
july
september
november 
december rotork plc  annual report 2012
46
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
corporate governance continued
uk co rporat e gove rna nce co de com plia nce 
sta tement
the following section on pages 44 to 61 is a summary of the system 
of corporate governance adopted by rotork following the 
appointment of an additional independent nonexecutive director 
in may 2012 rotork plc complied fully with the uk corporate 
governance code code the code is available to download at 
wwwfrcorguk
t he boa rd of d irecto rs
the board has a duty to promote the long term success of rotork 
for its shareholders its role therefore includes approval of strategy 
risk reviews major contract approvals finance matters and internal 
control and risk management
the terms and conditions of appointment of directors are available 
for inspection during business hours at the registered office of 
rotork plc and at the annual general meeting agm
board composition
rotork is led by an effective board which consists of nine members 
the chairman four independent nonexecutive directors and four 
executive directors apart from the chairman all nonexecutive 
directors are considered to be independent from rotork and are 
appointed for an initial term of three years upon the completion 
of this term the appointment is reviewed and if appropriate 
extended for up to a further two three year terms following which 
the director normally retires
the biographies of the directors and details of board committee 
membership is set out on pages 40 to 41
during 2012 the board’s membership was expanded with the 
appointment of sa james as an additional independent non
executive director this followed a recommendation from the 
nomination committee in 2011 to appoint an additional 
independent nonexecutive director and ensures the board has the 
same number of executive directors and independent nonexecutive 
directors in line with the code
balance of independent nonexecutive directors and 
executive directors as at 31 december 2012
nonexecutive chairman
independent nonexecutive
directors
executive directors
length of tenure of independent nonexecutive directors 
as at 31 december 2012
03
36
69
years
all directors are subject to annual reelection at the annual general 
meeting in line with the code
directors’ attendance at board and committee meetings during 2012
board
meeting
audit
committee
remuneration
committee
nomination
committee
no of meetings 10 5 3 3
rh arnold 10 2
1
na na
jm davis 10 5
1
na na
pi france 10 5
1
3
1
3
gm ogden 10 2
1
na na
gb bullard 10 5 3 3
sa james 6
2
3
2
2
2
2
2
ig king 9
3
5 2 2
rc lockwood 10 5
1
3
1
3
je nicholas 10 5 3 3
1 by invitation
2 sa james attended all meetings following her appointment in may 2012
3 ig king attended part of the april board meeting which is included in his 
attendance figures above
roles and responsibilities
there is a documented clear division of responsibilities between the 
chairman and the chief executive to ensure that there is a balance 
of power and authority between leadership of the board and 
executive leadership
all directors are entitled to seek independent professional advice at 
the company’s expense in order to discharge their responsibilities as 
directors rotork maintains appropriate directors’ and officers’ 
insurance cover
how t he boa rd o perat es eff ecti vely
board activities
as part of rotork’s board effectiveness day to day responsibility for 
the running of the company is delegated to executive management 
however there are a number of matters where it is not considered 
appropriate to do this the board therefore has a formal and documented 
schedule of matters reserved for its decision which includes
•	 approval of group strategy
•	 major capital projects and major contracts approval rotork plc annual report 2012
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overview 111
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directors 4043
governance 4464
financial statements 65114
company information 115117
•	 acquisition and disposal of any company business or fixed asset in excess of agreed levels
•	 changes to group corporate capital management or control structures or listing status
•	 approval of preliminary announcements and results annual report dividends significant changes in accounting policies and procedures 
and treasury policy
•	 approval of bank borrowings exceeding a certain percentage of the relevant company’s turnover
•	 undertaking an annual assessment of the group risk control process
•	 making appointments and removals following nomination committee recommendations and changing the size and composition of the board
•	 succession planning
•	 determining membership and chairmanship of board committees
•	 appointment reappointment or removal of the external auditor following audit committee recommendation
•	 approval of all resolutions and corresponding documentation to be put to shareholders at a general meeting
•	 approval of the auditor brokers and principal corporate finance adviser
•	 prosecution defence or settlement of any material litigation and
•	 approval of overall levels of insurance for the group
in 2012 the board met seven times at scheduled meetings and three times at additional meetings to consider other business including 
approval of interim management statements key matters reserved for the board decided at these meetings included the appointment of 
sa james and approving the acquisitions of soldo srl and the operating companies of the schischek group
the chairman through the company secretary ensures that the board agenda and all relevant information is circulated to the board 
directors sufficiently in advance of meetings the chairman and the company secretary discuss the agenda in detail ahead of every 
meeting and the chairman and chief executive always have a review meeting ahead of each board meeting
at least once annually the board meets at one of rotork’s locations other than its head office in bath this allows the board and in particular 
the nonexecutive directors the opportunity to gain a deeper understanding of overseas businesses and their markets and to interact with 
local management and staff as well as to view new capital investments and acquisitions in 2012 the board visited rotork’s new manufacturing 
facility in chennai india which incorporates the rotork innovation and design engineering centre ridec the board met and received 
presentations from local management
■ 2012 – chennai india
■ 2011 – houston usa
■ 2010 – lucca italy
■ 2009 – bilbao spain
■ 2008 – leeds uk
location of board meetings
all board directors constructively challenge executive management at board meetings and are entitled to unfettered access to information 
and management across the organisation should they require it rotork’s executive directors understand the distinction between their roles 
as executive managers and as board directors the chairman facilitates discussion by ensuring that all board members have the opportunity 
to fully contribute to all agenda items at board meetings and he always seeks to obtain unanimous decisions while allowing sufficient time 
for discussion and then drawing discussions to a close in an orderly manner this means that a range of views are offered by both executive 
and nonexecutive directors when the board discusses any particular issue or topic rotork board members come from a variety of 
professional backgrounds including engineering legal accountancy and international sales and collectively possess significant managerial 
experience as well as experience of being company directors of other public limited companies
at each board meeting the board receives presentations from senior management and has the opportunity to ask questions following  
the presentations the chief executive and finance director present to the board the content of preliminary and half year results 
announcements and the board is invited to comment on and approve those announcements  rotork plc  annual report 2012
48
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
corporate governance continued
the performance of the board is enhanced by the good working 
relationship between the chief executive and the chairman who 
continue to work together to ensure that the best use of the time 
and talents of the board are applied at board meetings 
induction and development
new board members receive a suitable and tailored induction this 
is facilitated by the company secretary under the direction of the 
chairman
in 2012 sa james was appointed as a new independent non
executive director her ongoing induction programme has included
•	 meetings with members of the rotork management board and 
other senior divisional management
•	 a tour of rotork’s bath head office and manufacturing plant and 
of rotork’s india plant
•	 a rotork controls product training course including 
demonstrations of various rotork products and apparatus and
•	 receipt of statutory and corporate documentation board 
policies and board committee minutes and resolutions from the 
last two years
during 2013 sa james’ continuing induction will include
•	 visits to the rotork fluid systems plant in lucca italy and the 
rotork gears plant in leeds uk and
•	 attendance at a general rotork product training course with the 
majority of the other nonexecutive directors covering all rotork 
products
directors are also encouraged to continually update their 
professional skills and knowledge during 2012 the nonexecutive 
directors had the opportunity to attend workshops provided by 
pwc the chairman of the remuneration committee attended an 
association of british insurers investment conference which 
included presentations and discussions on executive remuneration 
the chairman is responsible for reviewing the level and nature of 
training given to the board of directors at least annually
performance evaluations
during 2012 the board undertook a detailed review of its 
performance based on a written questionnaire which was designed 
by vivienne cassley an external consultant who also provides an 
analysis on the responses
 
the review included revisiting matters raised in 2011 and also 
focused on the approach to risk and the way in which the board 
currently believes it is operating as a unit and is unified with each 
member listening to and respecting the opinions of the others 
responses indicated that the board is proactive in looking for ways 
to improve its performance and that there has been continued 
progress in all areas considered during the year under review for 
example in a year which saw the addition of a new operating 
division to the business the board also recruited a female non
executive director to the board which was identified in previous 
reviews as an objective some minor changes were also made to 
the scheduling of board meetings which have increased the time 
available for discussion
ig king is the current senior independent director as part of his 
role he annually arranges a meeting of the nonexecutive directors 
to appraise the chairman’s performance this feedback is used to 
discuss with the chairman his performance
diversity on the board
the board carefully considered and responded to lord davies’ 2011 
report women on boards rotork recognises the benefits that 
gender diversity can bring to the boardroom and has appointed a 
female nonexecutive director sa james in 2012 consequently 
rotork has met its first published target of achieving 25 female 
representation in its independent nonexecutive directorate more 
detail of the work of the nomination committee is provided on 
page 52
internal control and risk management
the board is cognisant of its responsibility to present a fair balanced 
and understandable assessment of the company’s position the 
board is responsible for rotork’s system of internal control and risk 
management and meets at least annually to review the effectiveness 
of it internal control can only provide reasonable not absolute 
assurance against material misstatement or loss as it is designed to 
manage the risks rather than remove them altogether
the system covers controls which enable rotork to respond 
appropriately to financial operational compliance and any other 
risks the system accords with the turnbull guidance internal 
control – guidance for directors on the combined code and key 
elements include
•	 robust assurance processes and controls over financial reporting 
procedures
•	 a formal schedule of reserved matters for the board including 
responsibility for reviewing group strategy
•	 clearly defined levels of authority and a division of 
responsibilities throughout the group
•	 formal documentation procedures
•	 a formal whistleblowing policy with an external whistleblowing 
hotline to be introduced in early 2013 and
•	 an internal audit function made up of accountants from head 
office and across subsidiaries supported by regular training in 
internal audit best practice and control procedures to monitor 
and identify weaknesses in internal controls
the audit committee reviews the effectiveness of the system of 
internal control annually and reports its findings to the board the 
board then carries out its review of the system of internal control 
there is a continuous process for identifying evaluating and 
managing the significant risks faced by rotork details of which can 
be found on pages 30 to 31 in the year under review the annual 
review of the system of internal control identified no significant 
internal control failings or weaknesses
the group’s key risks changes during the year under review and 
details of processes to manage these risks can be found on pages 
30 to 31 rotork plc annual report 2012
49
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
relations with sha reho lders
communication with shareholders is a priority for the board and it 
maintains a regular dialogue with its major shareholders rotork 
recognises the value of the uk stewardship code 2010 in 2012 the 
board and in particular the chief executive and finance director met 
with shareholders in a number of ways including
•	 hosting conference calls
•	 hosting webcasts
•	 attending shareholder events
•	 hosting investor site visits
•	 attending conferences and symposiums
•	 hosting and participating in roadshows and
•	 arranging ad hoc meetings with shareholders
through the chief executive the chairman ensures that all directors 
are made aware of major shareholder issues and concerns and 
accordingly the chief executive reports to the board at each board 
meeting on meetings with analysts fund managers and shareholders
rotork makes constructive use of the agm as an opportunity to 
communicate with and answer questions from those shareholders 
who attend in person the entire board is available during the 
meeting and for lunch following the meeting to allow direct 
interaction between its directors and the shareholders
rotork also maintains a comprehensive investor relations section 
on its website which provides a variety of resources for investors 
including current webcasts presentations and press releases 
the investors section of the website can be accessed at  
wwwrotorkcomeninvestorsindex
electronic communications are also used by rotork to communicate 
with its shareholders all shareholders have been asked whether 
they would like to receive the annual report and accounts in 
electronic form rather than in hard copy form any shareholders 
wishing to receive corporate documents electronically can do this by 
registering for the service at wwwshareviewcouk and clicking on 
‘register’ under the ‘portfolio’ section at the agm rotork will also 
introduce electronic proxy appointment
boa rd committees
roto rk plc boa rd
a udit 
co mmittee
nomination
co mmittee
remunerat ion
co mmittee
the board has audit nomination and remuneration committees 
each committee has formal written terms of reference which are 
available to download from the rotork website at wwwrotorkcom
eninvestorsindexcommittees following the appointment of sa 
james all board committees include four independent non
executive directors in their composition the company secretary 
advises and acts as secretary to the committees
all committees have authority to take external independent 
professional advice at rotork’s expense for matters relating to the 
discharge of their duties
au dit committee
john nicholas
chairman of the audit committee
members gb bullard sa james ig king
je nicholas is the chairman of the audit committee and has recent 
and relevant financial experience having served as the finance 
director of tate and lyle plc and previously kidde plc he is also a 
member of the financial reporting review panel of the financial 
reporting council the finance director chief executive chairman 
and the external auditor also regularly attend meetings by invitation
the audit committee is responsible for and reviews reports and 
makes recommendations to the board on
•	 the integrity of financial reporting
•	 internal control and risk management systems including 
monitoring the effectiveness of internal audit 
•	 the appointment independence and effectiveness of the 
external auditor including the policy relating to nonaudit work 
and policy relating to employment of former staff of the external 
auditor
•	 the external auditor’s remuneration and
•	 the whistleblowing policy rotork plc  annual report 2012
50
company overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
corporate governance continued
a ctivities of the a udit committee during the year
the audit committee met five times during the year a summary of principal activities is set out below
month principal activities
february 2012 – financial reporting review including material judgements and estimates the draft annual report 2011 
governance reports and draft annual results announcement
 – internal control and risk management review including consideration of processes and procedures for risk 
management effectiveness of internal controls and fraud risk
 – review of the internal audit programme its resourcing and effectiveness and the need for a separate 
internal audit function
 – consideration of the external auditor’s activities and effectiveness including the annual audit its views on 
the control environment and fraud risk management and reappointment of the external auditor
 – review of the representation letter and the external auditor’s objectivity and independence
 – meeting with the external auditor by members of the committee only and
 – consideration of accounting and corporate governance developments
april 2012 – interim management statement review
july 2012 – financial reporting review including consideration of material judgements and estimates the going 
concern assumption and draft interim results announcements
 – internal control and risk management review including reviewing policies and procedures for preventing 
bribery and corruption and consideration of matters arising from internal audit reports
 – review of external auditor’s review of the half year report and the proposed external audit scope key 
risks and year end issues
 – meeting with the external auditor by members of the committee only and
 – consideration of accounting and corporate governance developments
november 2012 – interim management statement review
 – financial reporting review including reviewing accounting policies
 – internal control and risk management review including key risks and mitigating controls processes and 
procedures for risk management and consideration of matters arising from internal audit reports
 – review of the policy on employment of former audit staff and policy on and extent of nonaudit services 
provided by the external auditor
 – consideration of the external auditor’s fees engagement letter and risk of them leaving the market
 – substantive approval of a revised whistleblowing policy and external hotline use
 – annual review of the audit committee’s effectiveness and terms of reference and
 – consideration of accounting and corporate governance developments rotork plc annual report 2012
51
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
audit committee work in 2012 covered the following matters
financial reporting
•	 review of the appropriateness of rotork’s financial statements 
including considering significant financial reporting judgements 
and estimates made by management taking into account reports 
received from the finance director and the external auditor to 
ensure compliance with international financial reporting 
standards and uk company law
•	 review of the annual financial statements including statements 
on corporate governance internal control and risk management 
the half year and interim management statements followed by a 
recommendation to the board to approve these and
•	 review of the going concern statement followed by a 
recommendation to the board to approve this
external auditor
•	 review of the independence and objectivity of the external 
auditor and the external audit process the committee oversaw 
the company’s relationship with the external auditor including 
reviewing the engagement letter audit fee and reappointment of 
the external auditor and made recommendations to the board to 
submit these matters for shareholder approval at the agm
•	 meeting with representatives from the external auditor to receive 
reports on independence and objectivity of the external auditor 
and to ensure adequate mechanisms are in place to ensure this is 
maintained
•	 determining whether the external auditor had been effective in 
meeting the agreed audit plan during the year including any 
work undertaken to address any changes in perceived risks the 
robustness and perceptiveness of the auditor’s handling of key 
accounting judgements responses to questions from the audit 
committee and feedback about the conduct of the external 
auditor from key finance personnel within rotork
•	 the committee considered whether to put the external audit 
contract out to tender as the incumbent partner was retiring by 
rotation the committee’s assessment was that auditor 
independence and objectivity would be maintained by the 
appointment of a new partner who would also bring a fresh 
perspective the committee did however note the pending 
revisions to the code in this regard which will apply to rotork 
from next year
•	 review of the representation letter
•	 review and revision of the nonaudit work policy setting out 
approval procedures and levels review of nonaudit work 
undertaken the split between audit and nonaudit fees can be 
found in note 8 on page 83
•	 review of the policy regarding the employment of former 
employees of the external auditor
•	 consideration of the risk of kpmg audit plc as external auditor 
leaving the market
•	 review of external audit findings
•	 discussion with the external auditor on
 – the appropriateness of accounting policies estimates and 
judgements
 – the control environment including fraud risk management
•	 meeting twice with the external auditor without executive 
management present to permit an additional opportunity for an 
open exchange of views and feedback
internal control and risk management
•	 review of the effectiveness of rotork’s system of internal control 
and risk management including fraud risk management
•	 monitoring and reviewing the effectiveness of internal audit 
activities including
 – internal audits carried out and their results
 – management’s responses to those results
 – the internal audit programme and resourcing for 2012 and 2013
•	 reviewing the method of internal audit and considering the 
need for a separate internal audit function the committee 
concluded that the current makeup of the internal audit function 
being individuals from the group’s finance departments who all 
have distinct posts supplemented by external resource where 
particular skills are needed is appropriate
•	 review of rotork’s procedures for preventing bribery and 
corruption and
•	 monitoring health and safety performance data and receiving 
reports from the rotork management board member 
responsible for health and safety practice and procedures
other issues
•	 noting the changes in the code and associated guidance for 
audit committees which will apply to rotork from next financial 
year and updating its terms of reference for board approval and 
making consequent revisions to its annual schedule of work and
•	 review update and the approval of a new whistleblowing policy 
including approval of the use of an independent external 
whistleblowing hotline
policy on nonaudit fees
rotork recognises that certain areas or levels of work may 
cause conflicts with the objectivity and independence of the 
external auditor rotork therefore applies a policy on nonaudit 
services provided by the external auditor which includes a 
general rule of approval from the finance director for 
engagements outside the scope of the external audit to incur 
fees less than £10000 or from the audit committee chairman 
for engagements outside the scope of the external audit to 
incur fees exceeding £10000 or where the aggregate 
approvals by the finance director exceed £40000 in any 
financial year engagements relating to tax planning to incur 
fees exceeding £50000 must be approved by the audit 
committee and engagements relating to mergers and 
acquisitions to incur fees exceeding £10000 must be approved 
by the audit committee
the policy also specifies certain activities which the external auditor 
may not undertake such as work relating to financial statements 
which may be subject to external audits or the management or 
significant involvement with internal audit services rotork plc  annual report 2012
52
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
corporate governance continued
nomination committee
roger lockwood
chairman of the nomination committee
members gb bullard pi france sa james ig king je nicholas
the nomination committee is responsible for leading the process 
for board appointments and making recommendations to the 
board ensuring succession planning is in place reviewing the 
balance of skills and experience on the board regularly reviewing 
the structure size and composition of the board including its 
balance of skills knowledge and experience and making 
recommendations as appropriate
a ctivities of the nomination committee during the year
the nomination committee met three times during the year
month principal activities
april 2012 – recommending to the board that sa james 
be appointed as a nonexecutive director
september 2012 – review of the board evaluation report 
concerning matters relevant to the 
nomination committee
 – recommending to the board approval of 
revised terms of reference for the 
nomination committee and
 – ongoing succession planning discussions
december 2012 – approval of a revised procedure for 
nomination committee recommendations 
to the board for the appointment of new 
nonexecutive directors and
 – ongoing succession planning discussions
during the year under review the board appointed sa james as an 
additional independent nonexecutive director following a 
recommendation from the nomination committee the 
appointment process began with the board determining that it 
would be in the best interests of the company to appoint an 
independent female nonexecutive director taking into account the 
benefits of having a balance of skills experience and diversity 
including gender the nomination committee instructed an 
executive search consultancy egon zehnder to search for suitable 
candidates in conjunction with a subcommittee of the nomination 
committee composed of the chairman and chief executive a 
shortlist of candidates was drawn up and the nomination 
committee arranged for the shortlisted candidates to be 
interviewed following the interviews the nomination committee 
recommended to the board that sa james be appointed and the 
board approved this recommendation
the appointment of sa james has the effect of balancing the 
board’s composition so that at least half of the board are 
independent nonexecutive directors
in 2011 rotork announced a short term objective of ensuring at 
least 25 female representation in its independent nonexecutive 
directorate by the end of 2012 and this was achieved in the year 
under review
during the year the nomination committee also recommended 
that the board should approve a revised process for the 
recommendation of appointments of new nonexecutive directors 
following constructive feedback given by the nonexecutive 
directors on the process rotork plc annual report 2012
53
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
remuneration report
remunerat ion committee ro le and responsibi lit ies
gary bullard
chairman of the remuneration committee
members sa james ig king je nicholas
the principal role of the remuneration committee is to determine 
the framework and policy for remuneration of the executive 
directors and the chairman ensuring that remuneration levels are 
sufficient but not excessive in order to attract retain and motivate 
directors of the quality required to run the company
the full terms of reference of the committee can be found on the 
company’s website at wwwrotorkcomeninvestorsindex
committees key responsibilities include
•	 within the agreed policy determining individual remuneration 
packages for the chairman and executive directors including the 
terms of any discretionary share schemes in which executive 
directors may be invited to participate taking account of the 
level of remuneration for other rotork management board 
members and being aware of remuneration conditions 
throughout the group 
•	 agreeing the terms and conditions to be included in service 
agreements for executive directors including termination 
payments and
•	 selecting appointing and setting terms of reference with any 
remuneration consultants who may advise the committee
during the year under review the committee sought the advice of 
pricewaterhousecoopers pwc and towers watson pwc’s other 
connections with the company are limited to the provision of 
actuarial advice for the sharesave and long term incentive plan 
ltip calculations associated ltip accounting advice and other 
corporate advice including uk tax computation and tax advice due 
diligence work on certain acquisitions and in the year under review 
an audit of the group treasury function
the committee also invited the group hr director to inform the 
committee of pay awards throughout the group when setting 
executive director remuneration the chairman and chief executive 
are also invited to attend meetings except when their own 
remuneration is considered both attended all committee meetings 
in the year under review
during 2012 the remuneration committee closely monitored 
developments relating to remuneration and in particular the 
consultation by the department of business innovation and skills 
on directors’ pay and the revised remuneration and reporting 
regulations the committee also considered updates on best 
practice from providers of guidance to institutional investors 
including the association of british insurers and the national 
association of pension funds the committee supports the 
continued emphasis on improvement of best practice and for 
greater focus on transparency moderation simplicity and a closer 
alignment of the interests of the directors with those of the 
shareholders
this remuneration report is presented to shareholders by the board 
at the agm for their approval the auditor is required to report on 
the information concerning directors’ emoluments ltip and other 
share awards and pension disclosures
a ctivities of the remuneration committee during the year
the remuneration committee met three times during the year
month principal activities
february 2012 – approval of ltip award levels for 2012 for 
executive directors and other members of 
senior management
 – revision of the comparator group used for 
ltip awards and
 – approval of the remuneration report 2011
june 2012 – consideration of revisions to environmental 
nonfinancial executive bonus targets and
 – consideration of an executive director 
remuneration benchmarking report 
prepared for the committee by towers 
watson
december 2012 – approval of the committee’s schedule of 
work for 2013
 – consideration of current investor guidance 
from the association of british insurers and 
issrrev on remuneration
 – setting of basic salary for executive 
directors and
 – consideration of the department for 
business innovation and skills consultation 
paper on new remuneration reporting 
guidelines rotork plc  annual report 2012
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company overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
remuneration report continued
remunerat ion po licy
for the year under review the board continued to consider that it was critical that the company had remuneration policies that enabled  
it to motivate retain and when required recruit high quality management levels of remuneration are set to be sufficient to meet these 
objectives but should not be excessive there should be strong alignment with attainment of performance objectives and the delivery of 
shareholder value 
the committee considers it important that a significant proportion of executive directors’ potential total remuneration is dependent  
on attainment of demanding performance related short and longer term targets this is demonstrated by the percentage of basic salary 
potentially payable as cash or share awards under the annual cash bonus scheme and ltips respectively
executi ve rem unerat ion
key elements of executive remuneration
element how this supports the strategy performance period o pportunity 2012 performance measure
fixed remuneration
base salary reflects the role and the 
sustained value of the 
individual in terms of skills 
experience and personal 
contribution
not applicable not applicable benchmarked against companies of a 
similar size and complexity and other 
companies in the same industry sector
reviewed annually in december and 
effective from 1 january
benefits reflects the role and the 
sustained value of the 
individual in terms of skills 
experience and personal 
contribution
not applicable benefits in kind car and fuel 
or car and fuel allowance 
and private medical 
insurance cover for the 
individual only
membership of the employee 
rotork share incentive plan 
sip or overseas profit linked 
share scheme oplss
offer of participation in a 
rotork group pension scheme
benchmarked against companies of a 
similar size and complexity and other 
companies in the same industry sector
aligned to employee remuneration 
conditions
variable remuneration
annual cash 
bonus
drives and rewards 
performance against annual 
financial and operational goals 
which are consistent with the 
medium to long term strategic 
needs of the business
one year 125 of base salary of the 
chief executive and 100 
for other executive directors
for 2012 annual targets were based 
on annual and three year increases in 
profit earnings per share eps 
growth cash generation and certain 
nonfinancial targets
long term 
incentive plan 
ltip
incentivise long term value 
creation and alignment with 
shareholder interests drive and 
reward delivery of sustained 
long term eps and total 
shareholder return tsr 
performance
three years 100 of base salary for the 
chief executive and other 
executive directors
onehalf on eps growth over the 
period compared with retail price 
index rpi growth
onehalf on relative tsr compared 
with a comparator group or index 
from 2012
in recommending the level of remuneration for executive directors the committee took account of the size and nature of the company 
including its international scope using peer group comparators identified using total revenue and market capitalisation data supplied by its 
independent remuneration consultants rotork plc annual report 2012
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overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
expected value of executive remuneration
base salary
fixed elements of remuneration including base salary are designed to be competitive but not excessive this avoids building unnecessary 
current and future costs into the business
executive bonus
the executive annual cash bonus is focused on delivery of strategically important performance measures these include demanding 
financial and nonfinancial business related objectives
the bonus rewards increases in profit in two parts one half is based on the average profit over the three immediately preceding years and 
the other half is based on performance against an annual profit target
the plan additionally rewards high levels of free cash generation and growth in eps the final element of bonus payable is based on 
nonfinancial targets where objectives will be set annually
during the year under review the bonus payment for directors other than the chief executive was limited to 100 of basic salary the 
chief executive’s bonus was limited to 125 of basic salary
2012 bonus payout as proportion of maximum
accident frequency
target
waste recycling
target
cash generation
target
eps growth target
three year proﬁt 
target
annual proﬁt
target
 
0 20 4060 80100
100
69
84
100
100
100
100
rotork long term incentive plan p
rotork’s long term incentive plan ltip rewards the creation of shareholder value which is a strategic priority performance is measured 
over a three year period using a combination of earnings per share growth and relative total shareholder return tsr compared to a 
comparator group the performance criteria are summarised in the table on page 56
in the year under review awards of 100 of basic salary were made to directors under the rotork long term share incentive plan 2010 the 
2010 plan the maximum award under the 2010 plan is 150 of basic salary per annum this maximum was introduced taking account of 
current market practice and the 10 year life of the plan to include flexibility although the committee has no current plans to utilise this 
increased headroom
p denotes audited information
the bonus is calculated according to targets totalling 80 
and allocated to directors according to their limits as shown 
in the table on page 54 the 80 is split as follows
•	 accident frequency rate 5
•	 waste recycling 5
•	 cash generation 10
•	 eps growth 10
•	 three year profit growth 25 and
•	 annual profit target 25 rotork plc  annual report 2012
56
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
remuneration report continued
rotork long term share incentive plan 2010 p
in 2010 shareholders approved the rotork long term share incentive plan awards under the 2010 plan were subject to a three year 
performance period prior to any vesting the remuneration committee needs to be satisfied that the recorded tsr performance is a 
genuine reflection of the company’s overall underlying financial performance
the ltip award conditions are summarised in the table below
vesting requirements
performance measure percentage of award 0 25
1
100
1
tsr ranking in peer group 50 below 50th percentile 50th percentile above 75th percentile
eps growth 50 below rpi  10 rpi  10 rpi  25
1
 
proportionate vesting between these points
it is the intention of the committee when considering whether to make awards under the ltip each year to review both the size of awards 
and the performance conditions to ensure that at the time of an award they are appropriate and challenging taking into account any 
guidelines issued by organisations representing the interests of institutional shareholders or any other relevant guidelines issued from time 
to time the maximum award permitted is 150 of the basic annual salary however there is currently no intention to exceed 100 of 
basic annual salary for any participant
the ltip grant comparator group of companies applying to the 2010 and 2011 ltip awards are as set out below from the 2012 ltip award 
the committee decided to replace the tsr comparator group with a larger group made up of the ftse 250 excluding all financial services 
insurance companies and investment trusts the original comparator group for the awards granted in 2012 consisted of 172 companies 
including rotork plc as at 31 december 2012 172 companies including rotork plc remain in the comparator group vesting 
requirements remain unchanged and are described in the table above the committee made this change as the number of companies 
within the original tsr group was diminishing and suitable replacement within a narrow grouping of industrial stocks was becoming 
increasingly challenging
comparator group of companies for 2010 and 2011 ltip awards
bodycote plc meggitt plc spiraxsarco engineering plc
brammer plc morgan crucible company plc tt electronics plc 
halma plc renishaw plc vesuvius plc
1
imi plc senior plc volex plc
invensys plc smiths group plc weir group plc
laird plc spectris plc
1 vesuvius plc replaced cookson group plc following the demerger of alent plc and the renaming of cookson group plc to vesuvius plc in december 2012
p denotes audited information rotork plc annual report 2012
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overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
ltip awards still outstanding at the time of publication of this report made to executive directors under the plan are set out below
rotork long term incentive plan p
director
outstanding share 
awards made to 
1 january 2012
share awards 
made during
2012¹
share awards
 vesting in 
2012² 
lapsed in
 2012
outstanding share 
awards at 
31 december 2012 
rh arnold 60604 11114 9459 22071 40188
jm davis 33005 12654 1353 3158 41148
pi france 93845 19314 13833 32280 67046
gm ogden 46815 9412 6917 16140 33170
1 all awards were granted on 1 march 2012 the market price of shares in the company used to calculate the award was £2065
2 of the 2009 ltip awards 300 vested
directors’ emoluments £000 for directors in office at 31 december 2012 p
salary and fees bonus benefits
pension
supplement
2012
total
2011
total
executive directors 
rh arnold¹ 228 205 17 – 450 435
jm davis
2
262 235 17 23 537 490
pi france
2
400 449 17 60 926 850
gm ogden
3
195 175 17 64 451 368
nonexecutive directors
gb bullard 46 – – – 46 42
sa james
4
26 – – – 26 –
ig king 47 – – – 47 44
rc lockwood 115 – – – 115 113
je nicholas 47 – – – 47 42
1366 1064 68 147 2645 2384
1 rh arnold is paid in us dollars
2 pi france and jm davis are subject to the rotork plc pension and life assurance scheme specific salary cap in consideration of this limitation on their benefits under the 
scheme they receive a monthly cash sum equal to 225 and 180 respectively of that part of their basic salary above the scheme’s specific cap on an annualised basis
3 gm ogden became a preserved member of the rotork pension and life assurance scheme on 5 april 2012 the pension supplement stated is the amount payable from 6 april 2012
4 sa james was appointed on 11 may 2012
  these columns include the cash value on allocation of share incentive plan sip and overseas profit linked share scheme oplss share awards as appropriate
p denotes audited information rotork plc  annual report 2012
58
company overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
emoluments for executive directors in office at 31 december 2012
rh arnold
gm ogden
jm davis
pi france
0
20 40 60 80 100
■ salary
■ bonus
■ beneﬁts
■ pension supplement
free sip and oplss share awards to executive directors p
awards in total awards held
director 2012 2011 2012 2011
rh arnold 145 169 324 394
jm davis 145 169 2348 2203
pi france 145 169 4114 3969
gm ogden 145 169 4294 4149
employee share awards to executive directors p
in common with all eligible employees uk based executive directors receive an entitlement to ordinary shares under the sip which is 
approved by her majesty’s revenue and customs hmrc under the sip and the oplss an aggregate total of up to 5 of profits are 
distributed to employees each year in the form of ordinary shares the distribution is calculated by reference to years of service and basic 
salary details of total free share awards under the sip and oplss and awards made to executive directors in 2012 and the prior year are set 
out above free shares awarded to all three uk executive directors under the sip are subject to the hmrc upper limit of £3000 by value 
this limit also applies to the oplss for the year under review
rh arnold in common with other eligible overseas employees participates in the oplss the scheme trustee is based in jersey channel 
islands the figure shown for rh arnold relates solely to oplss
uk based executive directors in common with other eligible uk employees have the opportunity to invest in the hmrc approved rotork 
sharesave scheme jm davis pi france and gm ogden participate in the scheme once the options mature the exercise period is six 
months after which the options lapse the grants made in the year under review are summarised in the table below
sharesave option grants to executive directors
director date of grant option price duration
no of shares 
under option
jm davis 6 october 2008 £772 5 years 1301
pi france 5 october 2010 £1310 5 years 1179
gm ogden 28 september 2007 £811 5 years 2071
the only other changes in the directors’ interest post year end relate to shares purchased by the uk based directors monthly under the 
rotork sip partnership plan to a maximum £125 per month
save as disclosed no director or his family had any interest in the shares of the company at 31 december 2012
p denotes audited information
remuneration report continued rotork plc annual report 2012
59
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
executive directors’ contracts of employment
rh arnold jm davis pi france and gm ogden all have rolling service contracts with a one year notice period
the most recent executive director service contracts contain provisions which limit payments on termination to basic salary with employer 
rights to require phased payments for future executive director appointments the board’s intention will be to continue to limit service 
contracts to one year on a rolling basis
none of the executive directors have any external directorships with the exception of pi france who is a director of bath education trust for 
which he receives no fee
director date of service contract 
notice period 
from company
notice period 
from director contractual retirement date
rh arnold 28 may 2002 1 year 1 year 18 august 2016
jm davis 1 april 2010 1 year 1 year 8 march 2031
pi france 2 may 2008 1 year 1 year 6 april 2033
gm ogden 1 january 2005 1 year 1 year 9 january 2017
nonexecutive directors letters of appointment
nonexecutive directors are offered engagement agreements of usually three years duration subject to earlier termination by either party 
on three months’ notice with no provision for any compensation payment on termination
director date of letter of appointment
notice period 
from company
notice 
period from 
nonexecutive 
director
gb bullard 16 june 2010 3 months 3 months
sa james 11 may 2012 3 months 3 months
ig king 31 january 2011 3 months 3 months
rc lockwood 1 january 2011 3 months 3 months
je nicholas 21 february 2011 3 months 3 months
the fees of the nonexecutive directors other than the chairman are determined by a board committee of the chief executive and the 
chairman the fees of the chairman are determined by the remuneration committee rotork plc  annual report 2012
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company overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
total shareholder return
total shareholder return – rotork plc vs ftse industrial engineering sector rebased at 100 at 1 january 2008
rotork plc 
ftse industrial 
engineering sector
jan 08 dec 08 dec 09 dec 10 dec 11 dec 12
0
50
100
150
200
250
300
350
the graph above shows the value on 31 december 2012 of £100 invested in rotork plc on 1 january 2008 compared with the value of £100 
invested in the ftse industrial engineering sector index the other points plotted show values at intervening financial year ends the graph 
measures the company’s performance against other companies in the ftse industrial engineering sector by showing the tsr on a holding of 
ordinary shares in the company compared with the average total shareholder return of other companies in its sector being the sector within 
which the company is quoted on the london stock exchange and which is therefore considered the most appropriate index over the five year 
period to 31 december 2012
interests in shares
the interests of the directors in the ordinary share capital of the company at 31 december 2012 were as follows
2012 2011
executive directors
rh arnold 25357 19074
jm davis 13911 13047
pi france 56223 52688
gm ogden 36559 36414
nonexecutive directors
gb bullard 2797 2790
sa james
1
– –
ig king 7013 5000
rc lockwood 500 2000
je nicholas 500 500
1 sa james was appointed on 11 may 2012
all interests were beneficial and include directors’ directly held and family share interests in total it represents less than 1 2011 less than 
1 of voting shares of the company
share retention policy
the committee recommended and the board approved an executive share retention policy which supports the accumulation of significant 
shareholdings in the company by executive directors and other senior executives the policy requires executive directors to achieve a 
minimum holding of ordinary shares in the company equivalent to 150 of basic salary for executive directors executive directors are 
required to make use of vesting ltip shares to meet this minimum target
remuneration report continued rotork plc annual report 2012
61
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
pension disclosures required under the listing rules of the uk listing a uthority p
the following table shows the executive directors’ entitlements earned during the year net of retail price index rpi inflation and the 
accumulated entitlement at the year end
director
age at 
31 december 2012
increase in 
accrued pension 
over the year
1
 
£
accumulated 
accrued pension at 
31 december 2012
2
£
rh arnold 61 2071 116692
jm davis 46 3696 19390
pi france 44 2379 52138
gm ogden 55 908 93353
1 the figures shown for the increase in accrued pension over the year exclude any increase for rpi inflation
2 the accumulated accrued pension is that which would be paid annually on retirement from normal pension age based on service to 31 december 2012 except for gm odgen 
who became a preserved member of the rotork pension and life assurance scheme on 5 april 2012
3 a lump sum death benefit of four times basic annual salary is payable on death in service
4 a dependant’s pension of onehalf of prospective pension is payable on death in service and of onehalf of precommutation pension on death in retirement
5 postretirement increases are applied at rpi up to a maximum of 5 per annum except that for pension benefits in respect of pensionable service up to 15 may 2000 the 
minimum inflationary increase is 45 per annum
6 the pensionable salary used to calculate benefits in the defined benefit scheme for jm davis and pi france is restricted to a scheme specific earnings cap which is currently 
£129600
7 the figures shown for rh arnold are in respect of his membership of the rotork controls inc pension scheme and a supplemental executive retirement plan so that in 
aggregate the pension arrangements for rh arnold will provide a pension of at least 60 of uncapped basic salary at age 65
pension disclosures required under the directors’ remuneration report regulations 2002 p
the following table shows the executive directors’ entitlements earned during the year and their value at the start and end of the year
director
increase in 
accrued pension 
during the year
1
 
£
transfer value 
of accrued 
pension 
31 december 2011
£000
transfer value 
of accrued 
pension  
31 december 2012
£000
increase in 
transfer value 
over the year
£000
rh arnold 1387 1610 1631 21
jm davis 4153 214 265 51
pi france 3828 934 969 35
gm ogden
2
3601 2471 2570 99
1 the figures shown for the increase in accrued pension over the year incorporate the increase for rpi inflation
2 gm ogden became a preserved member of the rotork pension and life assurance scheme on 5 april 2012 and therefore these figures are based on service up to this date
3 the transfer values have been calculated in accordance with the relevant technical actuarial standards tass published by the board for actuarial standards
4 the increase in accrued pension and the increase in transfer value over the year for rh arnold are affected by movements in the us dollar relative to sterling in us dollars the 
accrued pension for rh arnold increased from 179195 pa at 31 december 2011 to 189555 pa at 31 december 2012 and the transfer value increased from 2503000 at 31 
december 2011 to 2649000 at 31 december 2012 the transfer value of accrued pension for rh arnold reflects the benefits provided by the us scheme together with a us 
valuation of these benefits and is therefore not directly comparable with the transfer values for directors in the uk scheme
p denotes audited information rotork plc  annual report 2012
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overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
the directors submit their report which incorporates the management 
report required under the disclosure and transparency rules for listed 
companies and the audited accounts for the year ended 31 december 
2012 as set out on pages 66 to 114 in compiling this report the 
directors have consulted with the management of the group
principal a ctivities
rotork plc is a holding company the principal activities of the 
group are the design manufacture and support of products within 
the global flow control markets in particular the group provides a 
range of products systems and services within the global flow 
control markets including those for the motorisation and manual 
operation of industrial valves and dampers for isolation duty and 
process control applications and other products associated with 
flow and pressure control and diagnostics and gathering of 
information this is managed under four divisions controls gears 
fluid systems and instruments actuated valves are major control 
elements in refineries pipelines power stations water distribution 
systems and effluent treatment plants and in all industries in which 
liquids gases or powders are transported through pipes
a summary of the principal subsidiaries of the group are set out on 
page 112
the business review of the group is set out on pages 12 to 39 
it provides a balanced and comprehensive analysis of the 
development and performance of the business during the year 
under review and the position at the end of the year it includes 
future development of the business and information about 
environmental matters the group’s employees and social and 
community issues the review contains analysis using financial and 
nonfinancial key performance indicators
the principal risks and uncertainties facing the group and the 
group’s approach to mitigating those risks are set out on pages  
30 to 31
a cquisitions
in november 2012 the group acquired 100 of the share capital 
of soldo srl a switch box manufacturer now within our instruments 
division for £231m
post year end in january 2013 the group acquired the entire share 
capital of the operating companies of the schischek group of 
companies schischek for £343m schischek is a leader in the 
design manufacture and sale of explosionproof electric actuators 
principally for the heating ventilation and air conditioning hvac 
market place
dividends
the directors recommend a final dividend of 266p per ordinary 
share 2011 2275p for the year payable on 21 may 2013 to 
shareholders on the register on 12 april 2013 an interim dividend 
for 2012 of 164p per ordinary share 2011 145p was paid on 28 
september 2012
report of the directors
share capital
details of the company’s share capital including rights and 
obligations attached to each class of share and the ordinary shares 
issued during 2012 are set out in note 17 of the financial 
statements 5p ordinary shares represent over 999 of the 
company’s total share capital and £1 preference shares represent 
less than 01 of the company’s total share capital
the company’s articles of association contain customary 
restrictions on the transfer of shares as applicable only in certain 
limited circumstances eg in relation to transfers to a minor save 
for those provisions there are no restrictions on the transfer of 
ordinary shares in the capital of the company other than certain 
restrictions which may be required from time to time by law for 
example insider trading law in accordance with the model code 
which forms part of the listing rules of the financial services 
authority as adopted by the company certain directors and 
employees are required to seek the prior approval of the company 
to deal in its shares
the company is not aware of any agreements between 
shareholders that may result in restrictions on the transfer of 
securities andor voting rights the company’s articles of 
association contain limited restrictions on the exercise of voting 
rights eg in relation to disenfranchised shares following the issue 
of a notice to shareholders under section 793 companies act 
2006
the company’s articles of association may only be amended by 
special resolution at a general meeting of the shareholders
the company is not aware of any significant agreements to which it 
is party that take effect alter or terminate upon a change of control 
of the company following a takeover
employee share schemes
shares in the company’s share schemes all contain provisions 
providing voting rights to the scheme trustee
notification of major interest’s in shares 
since the 2011 directors’ report the company has been notified of 
major interests and voting rights held directly andor indirectly by 
the following
name  of voting rights
kames capital 3
research  development
total group expenditure on research  development in the year 
was £7404000 2011 £5823000 further details of which are 
contained in the business review on page 15
donations
during the year the company made charitable donations of 
£91420 2011 £94000 which is part of the total group 
contribution of £201000 2011 £163000 there were no political 
donations made in the year or the prior year rotork plc annual report 2012
63
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
directors
the names of the directors in office during the year and their 
biographies and other details including the other significant 
commitments of the chairman are as shown on pages 40 to 41
the interests of the directors in office at the end of the financial 
year in the shares of the company are as shown in the 
remuneration report on pages 53 to 61
rh arnold jm davis pi france and gm ogden have service 
agreements and details of these are contained in the remuneration 
report on page 59
the company’s procedure with regard to the appointment and 
replacement of directors and those matters reserved for the board 
are described in the corporate governance report on pages  
44 to 52
at the agm sa james will offer herself for election it being the 
first opportunity since her appointment as a director on 11 may 
2012 all other directors will offer themselves for reelection
financial instruments
an explanation of the group policies on the use of financial 
instruments and financial risk management objectives are contained 
in note 26 to the accounts
statement of directors’ responsibility for preparing the 
a nnual report and the financial statements
the following statement which should be read in conjunction with 
the auditors’ statement of auditors’ responsibilities included in the 
audit report is made with a view to distinguishing for shareholders 
the respective responsibilities of the directors and of the auditors in 
relation to the financial statements
the directors are responsible for preparing the annual report  
accounts and the group and company financial statements in 
accordance with applicable law and regulations
company law requires the directors to prepare group and company 
financial statements for each financial year under that law they are 
required to prepare the group financial statements in accordance 
with international financial reporting standards ifrss as adopted by 
the eu and applicable law and have elected to prepare the company 
financial statements in accordance with uk accounting standards 
and applicable law uk generally accepted accounting practice
under company law the directors must not approve the financial 
statements unless they are satisfied that they give a true and fair view 
of the assets liabilities financial position and profit or loss of the 
group and company for that period in preparing each of the group 
and company financial statements the directors are required to
•	 select suitable accounting policies and then apply them 
consistently
•	 make judgments and estimates that are reasonable and prudent
•	 for the group financial statements state whether they have 
been prepared in accordance with ifrss as adopted by the eu
•	 for the company financial statements state whether applicable 
uk accounting standards have been followed subject to any 
material departures disclosed and explained in the company 
financial statements and
•	 prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the group and the 
company will continue in business
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time the 
financial position of the company and enable them to ensure that 
its financial statements comply with the companies act 2006 they 
have general responsibility for taking such steps as are reasonably 
open to them to safeguard the assets of the group and to prevent 
and detect fraud and other irregularities
under applicable law and regulations the directors are also 
responsible for preparing a directors’ report directors’ 
remuneration report and corporate governance statement that 
complies with that law and those regulations
directors statement pursuant to the disclosure and 
transparency rules 
each of the directors whose names and functions are listed on 
pages 40 and 41 confirm that to the best of each person’s 
knowledge and belief
•	 the financial statements prepared in accordance with the 
applicable set of the accounting standards give a true and fair 
view of the assets liabilities financial position and profit of the 
group and company and
•	 the directors’ report includes a fair review of the development 
and performance of the business and the position of the group 
and company together with a description of the principal risks 
and uncertainties that they face
the directors are responsible for the maintenance and integrity of 
the corporate and financial information included on the company’s 
website legislation in the uk governing the preparation and 
dissemination of financial statements may differ from legislation in 
other jurisdictions
going concern
after making enquiries the directors have a reasonable expectation 
that the group has adequate resources to continue in operational 
existence for the foreseeable future for this reason they continue to 
adopt the going concern basis in preparing the financial statements 
in forming this view the directors have considered trading and cash 
flow forecasts financial commitments the significant order book 
with customers spread across different geographic areas and 
industries and the significant net cash position
for further information regarding the company’s objectives 
policies and processes for managing its capital its financial risk 
management objectives details of its financial instruments and 
hedging activities and its exposures to credit risk and liquidity risk 
see note 26 rotork plc  annual report 2012
64
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
creditor payment policy
whilst there is no formal code or standard it is company and 
group policy to agree payment terms with its creditors when 
negotiating general contract terms for each transaction and to 
abide by those payment terms provided that the supplier is also 
complying with its obligations under those terms there are no 
creditors subject to special arrangements outside suppliers’ terms 
and conditions the company does not have any trade suppliers so 
that a creditor day payment period is not appropriate
directors’ and o fficers’ indemnity insurance
subject to the provisions of the companies acts the company’s 
articles of association provide for the directors and officers of the 
company to be appropriately indemnified the company purchases 
and maintains insurance for the directors and officers of the 
company in undertaking their duties as permitted by section 233 
companies act 2006
disclosure of information to a uditors 
the directors who held office at the date of approval of this 
directors’ report confirm that so far as they are each aware there 
is no relevant audit information of which the company’s auditors 
are unaware and each director has taken all the steps that he ought 
to have taken as a director to make himself aware of any relevant 
audit information and to establish that the company’s auditors are 
aware of that information
a uditors
resolutions to reappoint kpmg audit plc as auditors and to 
authorise the directors to determine their remuneration are to be 
proposed at the forthcoming agm
a nnual general meeting
the agm of the company will be held at the company’s office at 
rotork house brassmill lane bath ba1 3jq on friday 26 april 2013 
at 12 noon a separate circular containing the notice of the meeting 
is sent to shareholders with this annual report  accounts
on behalf of the board
stephen rhys jones
company secretary
4 march 2013
report of the directors continued rotork plc annual report 2012
65
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
we have audited the financial statements of rotork plc for the year 
ended 31 december 2012 set out on pages 66 to 114 the financial 
reporting framework that has been applied in the preparation of 
the group financial statements is applicable law and international 
financial reporting standards ifrss as adopted by the eu the 
financial reporting framework that has been applied in the 
preparation of the parent company financial statements is 
applicable law and uk accounting standards uk generally 
accepted accounting practice
this report is made solely to the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies act 2006 
our audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to 
them in an auditor’s report and for no other purpose to the fullest 
extent permitted by law we do not accept or assume responsibility 
to anyone other than the company and the company’s members 
as a body for our audit work for this report or for the opinions we 
have formed
respec tive responsibilitie s o f direct o rs a nd audito r
as explained more fully in the directors’ responsibilities statement 
set out on page 63 the directors are responsible for the preparation 
of the financial statements and for being satisfied that they give a 
true and fair view our responsibility is to audit and express an 
opinion on the financial statements in accordance with applicable 
law and international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices board’s 
ethical standards for auditors
scope o f t he audit o f t he financial sta tement s
a description of the scope of an audit of financial statements is 
provided on the financial reporting council’s website at  
wwwfrcorgukauditscopeukprivate
o pinion on financial sta tement s
in our opinion
•	 the financial statements give a true and fair view of the state of 
the group’s and of the parent company’s affairs as at 
31 december 2012 and of the group’s profit for the year 
then ended
•	 the group financial statements have been properly prepared in 
accordance with ifrss as adopted by the eu
•	 the parent company financial statements have been properly 
prepared in accordance with uk generally accepted 
accounting practice
•	 the financial statements have been prepared in accordance with 
the requirements of the companies act 2006 and as regards 
the group financial statements article 4 of the ias regulation
o pinion on othe r ma tte rs presc ribed by the 
c om panie s a ct 2 006
in our opinion
•	 the part of the directors’ remuneration report to be audited 
has been properly prepared in accordance with the companies 
act 2006
•	 the information given in the directors’ report for the financial 
year for which the financial statements are prepared is consistent 
with the financial statements and
•	 the information given in the corporate governance statement 
set out on pages 44 to 52 with respect to internal control and 
risk management systems in relation to financial reporting 
processes and about share capital structures is consistent with 
the financial statements 
mat te rs o n which we a re requ ired t o repo rt 
by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you if 
in our opinion
•	 adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been 
received from branches not visited by us or
•	 the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or
•	 certain disclosures of directors’ remuneration specified by law 
are not made or
•	 we have not received all the information and explanations we 
require for our audit
•	 a corporate governance statement has not been prepared by 
the company 
under the listing rules we are required to review
•	 the directors’ statement set out on page 63 in relation to 
going concern
•	 the part of the corporate governance statement on page 46 
relating to the company’s compliance with the nine provisions 
of the uk corporate governance code specified for our 
review and
•	 certain elements of the report to shareholders by the board on 
directors’ remuneration 
philip c otton
senior statutory auditor
for and on behalf of kpmg a udit plc statutory a uditor
chartered accountants
100 temple street 
bristol bs1 6ag
4 march 2013
independent auditor’s report to the members of rotork plc rotork plc  annual report 2012
66
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes
2012
£000
2011
£000
revenue 2 511747 447833
cost of sales 272199 236359
gross profit 239548 211474
other income 4 908 194
distribution costs 4214 4020
administrative expenses 111743 95589
other expenses 5 32 59
adjusted operating profit 131866 115921
amortisation of acquired intangible assets 7399 3921
o perating profit 2 124467 112000
financial income 7 6656 7590
financial expenses 7 6929 7040
profit before tax 8 124194 112550
income tax expense 9 34879 32149
profit for the year 89315 80401
basic earnings per share 18 1031p 930p
adjusted basic earnings per share 18 1093p 962p
diluted earnings per share 18 1026p 926p
consolidated income statement
for the year ended 31 december 2012
consolidated statement of comprehensive income
for the year ended 31 december 2012
2012
£000
2011
£000
profit for the year 89315 80401
o ther comprehensive income
foreign exchange translation differences 3967 2484
actuarial loss in pension scheme 8598 8499
effective portion of changes in fair value of cash flow hedges 399 207
income and expenses recognised directly in equity 12166 10776
total comprehensive income for the year 77149 69625 rotork plc annual report 2012
67
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes
2012
£000
2011
£000
noncurrent assets
property plant and equipment 10 38445 31954
goodwill 11 80729 68459
intangible assets 12 40743 38325
deferred tax assets 13 12984 13244
derivative financial instruments 23 – 315
other receivables 15 1674 1556
total noncurrent assets 174575 153853
c urrent assets
inventories 14 71100 62928
trade receivables 15 95822 96734
current tax 15 1946 988
derivative financial instruments 23 2254 677
other receivables 15 9662 8461
cash and cash equivalents 16 59868 48557
total current assets 240652 218345
total assets 415227 372198
equity
issued equity capital 17 4340 4338
share premium 8258 7835
reserves 10356 13924
retained earnings 246369 198072
total equity 269323 224169
noncurrent liabilities
interest bearing loans and borrowings 19 116 229
employee benefits 20 32060 28142
deferred tax liabilities 13 13488 12782
provisions 21 2701 2218
total noncurrent liabilities 48365 43371
c urrent liabilities
bank overdraft 19 – 38
interest bearing loans and borrowings 19 56 85
trade payables 22 36355 38742
employee benefits 20 10742 9624
current tax 22 11143 13225
derivative financial instruments 23 96 614
other payables 22 35212 38360
provisions 21 3935 3970
total current liabilities 97539 104658
total liabilities 145904 148029
total equity and liabilities 415227 372198
these financial statements were approved by the board of directors on 4 march 2013 and were signed on its behalf by  
pi france and jm davis directors
consolidated balance sheet
at 31 december 2012 rotork plc  annual report 2012
68
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
issued
equity
capital
share
premium
translation
reserve
c apital
redemption
reserve
hedging
reserve
retained
earnings total
balance at 31 december 2010 4334 7389 14100 1644 457 175927 203851
profit for the year – – – – – 80401 80401
other comprehensive income
foreign exchange translation differences – – 2484 – – – 2484
effective portion of changes in fair value of cash  
flow hedges – – – – 207 – 207
actuarial loss on defined benefit pension plans net  
of tax – – – – – 8499 8499
total other comprehensive income – – 2484 – 207 8499 10776
total comprehensive income – – 2484 – 207 71902 69625
transactions with owners recorded directly in equity
equity settled sharebased payment transactions net of tax – – – – – 196 196
share options exercised by employees 4 446 – – – – 450
own ordinary shares acquired – – – – – 3185 3185
own ordinary shares awarded under share schemes – – – – – 3158 3158
dividends – – – – – 49534 49534
balance at 31 december 2011 4338 7835 11616 1644 664 198072 224169
profit for the year – – – – – 89315 89315
other comprehensive income              
foreign exchange translation differences – – 3967 – – – 3967
effective portion of changes in fair value of cash  
flow hedges – – – – 399 – 399
actuarial loss on defined benefit pension plans  
net of tax – – – – – 8598 8598
total other comprehensive income – – 3967 – 399 8598 12166
total comprehensive income – – 3967 – 399 80717 77149
transactions with owners recorded directly in equity
equity settled sharebased payment transactions net of tax – – – – – 1219 1219
share options exercised by employees 2 423 – – – – 425
own ordinary shares acquired – – – – – 2850 2850
own ordinary shares awarded under share schemes – – – – – 3135 3135
dividends – – – – – 33924 33924
balance at 31 december 2012 4340 8258 7649 1644 1063 246369 269323
detailed explanations for equity capital the translation reserve capital redemption reserve and hedging reserve can be seen in note 17
consolidated statement of changes in equity rotork plc annual report 2012
69
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes
2012
£000
2012
£000
2011
£000
2011
£000
c ash flows from operating activities
profit for the year 89315 80401
adjustments for
amortisation of intangibles 7399 3921
amortisation of development costs 924 732
depreciation 5452 4479
equity settled sharebased payment expense 2030 1251
profit on sale of property plant and equipment 859 129
financial income 6656 7590
financial expenses 6929 7040
income tax expense 34879 32149
139413 122254
increase in inventories 9474 11402
increase in trade and other receivables 2220 26791
decreaseincrease in trade and other payables 3341 18537
difference between pension charge and cash contribution 7211 2929
decrease in provisions 264 436
increase in other employee benefits 1711 1692
118614 100925
income taxes paid 37641 27754
c ash flows from operating activities 80973 73171
investing activities
purchase of property plant and equipment 12564 10143
development costs capitalised 2075 1328
sale of property plant and equipment 1007 274
acquisition of businesses net of cash acquired 3 20674 59876
contingent consideration paid 200 41
interest received 623 694
c ash flows from investing activities 33883 70420
financing activities
issue of ordinary share capital 425 450
purchase of ordinary share capital 2850 3185
interest paid 163 117
repayment of amounts borrowed 64 421
repayment of finance lease liabilities 68 54
dividends paid on ordinary shares 33924 49534
c ash flows from financing activities 36644 52861
increasedecrease in cash and cash equivalents 10446 50110
cash and cash equivalents at 1 january 48519 97881
effect of exchange rate fluctuations on cash held 903 748
c ash and cash equivalents at 31 december 16 59868 48519
consolidated statement of cash flows
for the year ended 31 december 2012 rotork plc  annual report 2012
70
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements
for the year ended 31 december 2012
except where indicated values in these notes are in £000
rotork plc is a company domiciled in england the consolidated financial statements of the company for the year ended 31 december 2012 
comprise the company and its subsidiaries together referred to as the group the accounting policies contained below in note 1 and the 
disclosures in notes 2 to 31 all relate to the group financial statements the company balance sheet can be found following note 31 as 
the company has elected to continue reporting under uk gaap the applicable accounting policies are contained in note a and notes b 
to k relate to the company’s financial statements
1 a cc ountin g policie s
the accounting policies applied in the preparation of these consolidated financial statements are set out below these policies have been 
consistently applied to the years presented unless otherwise stated
basis of preparation
the consolidated financial statements of rotork plc have been prepared and approved by the directors in accordance with international 
financial reporting standards as adopted by the european union ifrss as adopted by the eu ifric interpretations and the companies 
act 2006 applicable to companies reporting under ifrs
the consolidated financial statements have been prepared under the historical cost convention subject to the items referred to in the 
derivative financial instruments accounting policy below
new accounting standards and interpretations
the amendments to ifrs 7 financial instruments disclosures are applicable for the financial year ending 31 december 2012 application of 
this standard has not had any material impact on the disclosures net assets or results of the group
recent accounting developments
the amendments to ias19 employee benefits will be applied from 1 january 2013 the principal change relates to the requirement to use 
the schemes’ discount rate to calculate the return on assets rather than using a rate of return appropriate to the various asset classes
the application of the standard in 2012 would have reduced the pretax profit by £702000 increasing the net pension interest cost to 
£1092000 the impact on basic earnings per share would be a reduction of 06p to 1025p in 2013 the net pension interest cost is 
estimated to be £1150000 under the amended standard the impact on shareholders’ equity will be negligible
the following standards and interpretations were issued but are not yet effective and have not been adopted as application was not 
mandatory for the year and in some cases not yet endorsed for use in the eu
•	 ifrs 9 financial instruments
•	 ifrs 10 consolidated financial statements
•	 ifrs 11 joint arrangements
•	 ifrs 12 disclosure of interests in other entities
•	 ifrs 13 fair value measurement
•	 ias 1 financial statement presentation amendments
the directors anticipate that the adoption of these standards and amendments will not have a material impact on the net assets or results 
of the group
going concern
after making enquiries the directors have a reasonable expectation that the group has adequate resources to continue in operational 
existence for the foreseeable future for this reason they continue to adopt the going concern basis in preparing the financial statements 
in forming this view the directors have considered trading and cash flow forecasts financial commitments the significant order book with 
customers spread across different geographic areas and industries and the significant net cash position
c onsolidation
the consolidated financial statements incorporate the financial statements of the company and its subsidiaries for the year to 31 december 
2012 the financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences 
until the date control ceases intragroup balances and any unrealised gains or losses or income and expenses arising from intragroup 
transactions are eliminated in preparing the consolidated financial statements rotork plc annual report 2012
71
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
1 a ccountin g policie s continued
foreign currencies
transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction monetary assets and 
liabilities denominated in foreign currencies at the balance sheet date are translated to sterling at the foreign exchange rate ruling at that 
date foreign exchange differences arising on translation are recognised in the income statement nonmonetary assets and liabilities that 
are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction 
nonmonetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to sterling at foreign 
exchange rates at the dates the values were determined
assets and liabilities of foreign subsidiaries including goodwill and fair value adjustments arising on consolidation are translated into 
sterling at rates of exchange ruling at the balance sheet date the revenues and expenses of foreign subsidiaries are translated to sterling at 
rates approximating those ruling at the date of the transactions differences on exchange arising from the retranslation of the opening net 
investment in subsidiaries and from the translation of the results of those subsidiaries at average rate are reported as an item of other 
comprehensive income and accumulated in the translation reserve
any differences that have arisen since 1 january 2004 the date of transition to ifrs are presented as a separate component of 
equity translation differences that arose before the date of transition to ifrs in respect of all foreign entities are not presented as a 
separate component
revenue
revenue comprises the fair value of the consideration received or receivable for the sale of goods or services revenue is shown net of 
valueadded tax returns rebates and discounts and after eliminating sales within the group the group recognises revenue when the 
amount of revenue can be reliably measured it is probable that future economic benefits will flow to the entity and when specific criteria 
have been met for each of the group’s activities
revenue from the sale of valve actuators gearboxes and flow control products is recognised in the income statement when the significant 
risks and rewards of ownership have been transferred to the buyer in accordance with the contracted shipping terms 
revenue from service work is recognised in the income statement in proportion to the stage of completion of the transaction at the 
balance sheet date the stage of completion is assessed by reference to surveys of work performed no revenue is recognised if there are 
significant uncertainties regarding recovery of the consideration due associated completion costs the possible return of goods or 
continuing management involvement with the goods
business combinations
business combinations are accounted for using the acquisition method as at the acquisition date which is the date on which control is 
transferred to the group
for acquisitions on or after 1 january 2010 the group measures goodwill at the acquisition date as
•	 the fair value of the consideration transferred plus 
•	 the recognised amount of any noncontrolling interests in the acquiree plus
•	 the fair value of the existing equity interest in the acquiree less
•	 the net recognised amount generally fair value of the identifiable assets acquired and liabilities assumed 
when the excess is negative a bargain purchase gain is recognised immediately in the income statement
costs related to the acquisition other than those associated with the issue of debt or equity securities are expensed as incurred
any contingent consideration payable is recognised at fair value at the acquisition date if the contingent consideration is classified as 
equity it is not remeasured and settlement is accounted for within equity otherwise subsequent changes to the fair value of the 
contingent consideration are recognised in profit or loss
for acquisitions between 1 january 2004 and 31 december 2009 goodwill represents the difference between the cost of the acquisition 
including acquisition costs and the fair value of the net identifiable assets acquired rotork plc  annual report 2012
72
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
1 a ccountin g policie s continued
in respect of acquisitions prior to 1 january 2004 goodwill is included on the basis of its deemed cost which represents the amount 
recorded under uk gaap on transition to ifrs
goodwill is stated at cost or deemed cost less any impairment losses the carrying value of goodwill is reviewed at each balance sheet date 
and is allocated to cashgenerating units cgu an impairment loss is recognised whenever the carrying value of an asset or its cgu 
exceeds its recoverable amount impairment losses are recognised in the income statement
intangible assets
i research  development
expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is 
recognised in the income statement as an expense as incurred development costs incurred after the point at which the commercial and 
technical feasibility of the product have been proven and the decision to complete the development has been taken and resources made 
available are capitalised the expenditure capitalised includes the cost of materials direct labour and an appropriate proportion of 
overheads capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses development 
expenditure has an estimated useful life of five years and is written off on a straightline basis
ii other intangible assets
other intangible assets that are acquired by the group as part of a business combination are stated at cost less accumulated amortisation 
and impairment losses the useful life of each of these assets is assessed based on discussions with the management of the acquired 
business and takes account of the differing natures of each of the intangibles acquired the assessed useful lives of intangibles acquired are 
as follows 
brands and trademarks  4 to 10 years
customer relationships  2 to 5 years
product design patents   5 to 8 years
order backlog   6 months to 1 year
amortisation is charged on a straightline basis over the estimated useful life of the assets 
property plant and equipment
freehold land is not depreciated long leasehold buildings are amortised over 50 years or the expected useful life of the building where less 
than 50 years other assets are depreciated in equal annual instalments by reference to their estimated useful lives and residual values at 
the following annual rates
freehold buildings   2 to 4
short leasehold buildings  period of lease
plant and equipment  10 to 33
items of property plant and equipment are stated at cost or deemed cost less accumulated depreciation certain items of property that 
had been revalued to fair value on or prior to 1 january 2004 the date of transition to ifrs are measured on the basis of deemed cost 
being the revalued amount at the date of that revaluation
l eases
where fixed assets are financed by leasing agreements which give rights approximating to ownership the assets are treated as if they had 
been purchased and the capital element of the leasing commitments are shown as obligations under finance leases assets acquired under 
finance leases are initially recognised at the present value of the minimum lease payments the rentals payable are apportioned between 
interest which is charged to the income statement and liability which reduces the outstanding obligation so as to give a constant rate of 
charge on the outstanding lease obligations costs in respect of operating leases are charged on a straightline basis over the term of the 
lease in arriving at the operating profit rotork plc annual report 2012
73
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
1 a ccountin g policie s continued
taxation
income tax on the profit for the year comprises current and deferred tax income tax is recognised in the income statement except to the 
extent that it relates to items recognised directly in equity in which case it is recognised in equity current tax is the expected tax payable 
on the taxable income for the year using tax rates enacted or substantively enacted at the balance sheet date and any adjustment to tax 
payable in respect of previous years
deferred tax is provided using the balance sheet liability method providing for temporary differences between the carrying amounts of 
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes the following temporary differences are 
not provided for goodwill not deductible for tax purposes and the initial recognition of assets or liabilities that affect neither accounting 
nor taxable profits the amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying 
amount of assets and liabilities using tax rates enacted or substantively enacted at the balance sheet date
a deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset 
can be utilised deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised
inventory and work in progress
inventory and work in progress is valued at the lower of cost on a ‘first in first out’ basis and net realisable value in respect of work in 
progress and finished goods cost includes all production overheads and the attributable proportion of indirect overhead expenses which 
are required to bring inventories to their present location and condition the net realisable value in respect of old and slow moving 
inventory is assessed by reference to historic usage patterns and forecast future usage
c ash and cash equivalents
cash and cash equivalents comprise cash balances and short term with an original maturity less than three months deposits bank 
overdrafts that are repayable on demand form part of cash and cash equivalents for the purpose of the consolidated statement of 
cash flows
equity
equity comprises issued equity capital share premium reserves and retained earnings
when issued equity capital is repurchased the amount paid including directly attributable costs is recognised as a change in equity 
repurchased shares are debited direct to equity and shown as a deduction from retained earnings
provisions
i warranties
a provision for warranties is recognised when the underlying products or services are sold the provision is based on historical warranty 
cost data known issues and management expectations of future costs
ii contingent consideration
the terms of an acquisition may provide that the value of the purchase consideration which may be payable in cash at a future date 
depends on uncertain future events where it is not possible to estimate the amounts payable with any degree of certainty the amounts 
recognised in the financial statements represent a fair value estimate at the balance sheet date of the amounts expected to be paid 
employee benefits
i pension plans
the group operates a number of defined benefit pension schemes and contributes to these schemes in accordance with qualified actuaries’ 
recommendations in respect of all actuarial gains and losses that arise in calculating the group’s obligation in respect of the plans these 
are recognised in equity interest on pension scheme liabilities has been recognised within financing expenses and the expected return on 
scheme assets within financing income in the income statement 
the group also operates a number of defined contribution pension schemes the costs for these schemes are recognised in the income 
statement as incurred rotork plc  annual report 2012
74
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
1 a ccountin g policie s continued
ii sharebased payment transactions
the rotork sharesave plan introduced in 2004 offers certain employees the opportunity to purchase shares in rotork plc at a discounted 
price compared with the market price at the time of grant details of the scheme are given in note 25 the fair value of the right  option is 
recognised as an employee expense with a corresponding increase in equity the fair value is measured at grant date and spread over the 
period between grant and maturity the right  option reaches maturity when the employee becomes unconditionally entitled the fair 
value of the grant is measured using a blackscholes model taking into account the terms and conditions upon which the rights were 
granted the amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is 
due only to share prices not achieving the threshold for vesting
the rotork long term incentive plan grants awards of shares to executive directors and senior managers these awards may vest after a period 
of three years dependent upon both market and nonmarket performance conditions being met details of the grants are given in note 25 
the fair value of the award is measured at grant date using a monte carlo simulation model which takes into account the market based 
performance criteria and spread over the vesting period the fair value of the award is recognised as an employee expense with a 
corresponding increase in equity for the share settled award the amount recognised as an expense is adjusted to exclude options that do not 
vest as a result of nonmarket performance conditions not being met
iii long term service leave
the group’s net obligation in respect of long term service leave is the amount of future benefit that employees have earned in return for 
their service in the current and prior periods
iv other employee benefits
in addition to the above schemes the group offers a number of discretionary bonus schemes to employees around the world the costs of 
these schemes are recognised in the income statement as incurred this includes the share incentive plan and overseas profit linked share 
scheme both of which are a known liability at the year end
derivative financial instruments
the group uses forward exchange contracts and swaps to hedge its exposure to foreign exchange risk arising from operational and 
financing activities these are the only derivative financial instruments used by the group in accordance with its treasury policy the group 
does not hold or issue contracts for trading purposes forward exchange contracts that do not qualify for hedge accounting are accounted 
for as trading instruments
forward exchange contracts are recognised initially at fair value where a forward exchange contract is designated as a hedge of the 
variability in cash flows of a recognised liability a firm commitment or a highly probable forecasted transaction the effective part of any 
gain or loss on the forward contract is recognised directly in equity any effective cumulative gain or loss is removed from equity and 
recognised in the income statement at the same time as the hedged transaction the ineffective part of any gain or loss is recognised in the 
income statement immediately
when a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to occur the cumulative gain 
or loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs if the hedged 
transaction is no longer expected to take place the cumulative unrealised gain or loss held in equity is recognised in the income 
statement immediately 
dividends
interim dividends are recorded in the financial statements when they are paid final dividends are recorded in the financial statements in 
the period which they are approved by the company’s shareholders rotork plc annual report 2012
75
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
1 a ccountin g policie s continued
c ritical accounting estimates and judgements
estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of 
future events that are believed to be reasonable under the circumstances
the group makes estimates and assumptions concerning the future the resulting estimates will by definition seldom equal the related 
actual results the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets 
and liabilities in the next financial year are listed below
i impairment of goodwill
determining whether goodwill is impaired requires an estimation of the value in use of cgus to which goodwill has been allocated the 
value in use calculation involves an estimation of the future cash flows of cgus and also the selection of appropriate discount rates which 
involves judgement to calculate present values explanations of the estimates judgements and sensitivities in respect of the current year 
impairment review are detailed in note 11
ii valuation of acquired intangible assets
acquisitions may result in customer relationships brands and trademarks product design patents and order backlogs being recognised 
these are valued using discounted cash flows and relief from royalty methods in applying these methodologies certain key judgements 
and estimates are required to be made in respect of future cash flows details of the accounting policies are shown earlier in this note and 
the carrying value of the acquired intangible assets are shown in note 12
iii defined benefit pension scheme liabilities
determining the value of the future defined benefit obligation requires judgement in respect of the assumptions used to calculate present 
values these include future mortality discount rate inflation and salary increases management makes these judgements in consultation 
with an independent actuary details of the estimates and judgements in respect of the current year are in note 24 rotork plc  annual report 2012
76
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
2 o peratin g segment s
the group has chosen to organise the management and financial structure by the grouping of related products the four identifiable 
operating segments where the financial and operating performance is reviewed monthly by the chief operating decision maker are 
as follows 
controls – the design manufacture and sale of electric valve actuators
fluid systems – the design manufacture and sale of pneumatic and hydraulic valve actuators
gears – the design manufacture and sale of gearboxes adaption and ancillaries for the valve industry
instruments – the manufacture of high precision pneumatic controls and power transmission products for a wide range of industries
unallocated expenses comprise corporate expenses
geographic analysis
rotork has a worldwide presence in all four operating segments through its subsidiary selling offices and through an agency network a 
full list of locations can be found at wwwrotorkcom
a nalysis by operating segment
c ontrols
2012
fluid
systems
2012
gears
2012
instruments
2012
elimination
2012
unallocated
2012
group
2012
revenue from external customers 293342 160946 41039 16420 – – 511747
inter segment revenue – – 11844 – 11844 – –
total revenue 293342 160946 52883 16420 11844 – 511747
adjusted operating profit 94773 24628 12088 5103 – 4726 131866
amortisation of acquired intangibles 733 2249 218 4199 – – 7399
operating profit 94040 22379 11870 904 – 4726 124467
net financing expense 273
income tax expense 34879
profit for the year 89315
controls
2011
fluid
systems
2011
gears
2011
instruments
2011
elimination
2011
unallocated
2011
group
2011
revenue from external customers 277957 132624 35816 1436 – – 447833
inter segment revenue – – 10777 – 10777 – –
total revenue 277957 132624 46593 1436 10777 – 447833
adjusted operating profit 92085 17077 10336 394 – 3971 115921
amortisation of acquired intangibles 890 2277 18 736 – – 3921
operating profit 91195 14800 10318 342 – 3971 112000
net financing income 550
income tax expense 32149
profit for the year 80401 rotork plc annual report 2012
77
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
2 o peratin g segment s continued
c ontrols
2012
fluid
systems
2012
gears
2012
instruments
2012
unallocated
2012
group
2012
depreciation 3708 1258 251 235 – 5452
amortisation
– other intangibles 733 2249 218 4199 – 7399
– development costs 924 – – – – 924
noncash items  equity settled sharebased payments 698 396 271 – 665 2030
net financing income – – – – 273 273
acquired as part of business combinations
– goodwill – – – 13952 – 13952
– intangible assets – – – 9668 – 9668
capital expenditure 8656 2113 1295 372 – 12436
controls
2011
fluid
systems
2011
gears
2011
instruments
2011
unallocated
2011
group
2011
depreciation 3026 1205 229 19 – 4479
amortisation
– other intangibles 890 2277 18 736 – 3921
– development costs 732 – – – – 732
noncash items  equity settled sharebased payments 543 205 129 – 374 1251
net financing expense – – – – 550 550
acquired as part of business combinations
– goodwill 1920 2106 233 28289 – 32548
– intangible assets 2595 4514 435 25812 – 33356
capital expenditure 7947 1512 455 88 – 10002
balance sheets are reviewed by operating subsidiary and operating segment balance sheets are not prepared as such no further analysis of 
operating segments assets and liabilities are presented
geographical analysis
uk
2012
rest of
europe
2012
usa
2012
o ther
a mericas
2012
rest of
world
2012
group
2012
revenue from external customers by location of customer 28448 156525 106027 53323 167424 511747
noncurrent assets
– goodwill 5009 31925 39603 776 3416 80729
– intangible assets 4496 11107 24288 506 346 40743
– property plant and equipment 13944 10529 6005 622 7345 38445
uk
2011
rest of
europe
2011
usa
2011
other
americas
2011
rest of
world
2011
group
2011
revenue from external customers by location of customer 25703 148513 87144 38256 148217 447833
noncurrent assets
– goodwill 5009 17814 41447 770 3419 68459
– intangible assets 3695 2501 30513 986 630 38325
– property plant and equipment 9027 10323 6271 310 6023 31954 rotork plc  annual report 2012
78
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
3 a cqui sit ion s
2012
on 9 november 2012 the group acquired 100 of the share capital of soldo srl soldo for £23112000 soldo designs and manufactures 
control accessories for valve automation and is headquartered near verona in northern italy the acquired business will be reported 
within the instruments division in the period since acquisition soldo contributed £802000 to group revenue and £248000 to 
consolidated operating profit before amortisation the amortisation charge in the period since acquisition from the acquired intangible 
assets was £313000
if the acquisition had occurred on 1 january 2012 the business would have contributed £6284000 to group revenue and £1909000 to 
group operating profit it is not practicable to disclose profit before tax or profit attributable to equity shareholders as the group manages 
its treasury function on a group basis
the acquisition had the following effect on the group’s assets and liabilities
book value
provisional
adjustments
provisional
fair values
c urrent assets
inventory 1044 320 724
trade and other receivables 1474 17 1457
cash 1640 – 1640
c urrent liabilities
trade and other payables 983 52 1035
warranty provision – 54 54
corporation tax 486 – 486
noncurrent assetsliabilities
property plant and equipment 361 – 361
intangible assets – 9668 9668
deferred tax 3 3118 3115
total net assets 3053 6107 9160
goodwill 13952
purchase consideration 23112
paid in cash 22314
contingent consideration 798
purchase consideration 23112
purchase consideration paid in cash 22314
cash held in subsidiary 1640
c ash outflow on acquisition 20674 rotork plc annual report 2012
79
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
3 a cqui sit ion s continued
2012 continued
the adjustments shown in the table represent the alignment of accounting policies to rotork group policies and the fair value adjustments 
of the assets and liabilities at the acquisition date 
the contingent consideration is based on a 2013 profit target and will be payable in early 2014
goodwill has arisen on the acquisition as a result of the value attributed to staff expertise and the assembled workforce which did not 
meet the recognition criteria for a separate intangible asset 
the intangible assets identified are customer relationships the soldo brand and the acquired order book
2011
i fairchild
on 15 november 2011 the group acquired 100 of the share capital of fairchild inc fairchild for £49532000 fairchild is a manufacturer 
of high precision pneumatic controls and power transmission products for a wide range of industries based in winstonsalem north 
carolina usa the acquired business will be reported as a new division called rotork instruments in the six weeks to 31 december 2011 
fairchild contributed £1436000 to group revenue and £394000 to consolidated operating profit before amortisation the amortisation 
charge in the six week period from the acquired intangible assets was £736000 
if the acquisition had occurred on 1 january 2011 the business would have contributed £15132000 to group revenue and £4777000 to 
group operating profit it is not practicable to disclose profit before tax or profit attributable to equity shareholders as the group manages 
its treasury function on a group basis
ii other acquisitions
on 25 july 2011 the group acquired 100 of the share capital of ktork international inc ktork for £6518000 ktork is a manufacturer 
of pneumatic valve actuators based in dallas texas usa the acquired business will be reported within the rotork fluid system division 
on 15 july 2011 the group acquired 100 of the share capital of centork valve control sl centork for £3147000 centork is a 
manufacturer of electric actuators based near san sebastian in spain the acquired business will be reported within the rotork 
controls division 
the group also acquired 100 of the share capital of rotork servo controles de mexico sa de cv in mexico rscm valco valves  
automation as in norway vva and prokits limited prokits based in mansfield uk for a combined consideration of £4991000 rscm 
and vva were rotork agents and the results of the acquired businesses will be reported in each of the divisions prokits designs and 
manufactures valve adaptor kits and accessories for the valve industry and will reported as part of the gears division
in the period from acquisition to 31 december 2011 the businesses contributed £8170000 to group revenue and £563000 
to consolidated operating profit before amortisation the amortisation charge in respect of these acquisitions during the year 
was £1464000 
if these other acquisitions had occurred on 1 january 2011 the businesses would have contributed £16488000 to group revenue and 
£1309000 to group operating profit it is not practicable to disclose profit before tax or profit attributable to equity shareholders as the 
group manages its treasury function on a group basis rotork plc  annual report 2012
80
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
3 a cqui sit ion s continued
2011 continued
iii acquisitions fair value table
the six acquisitions had the following effect on the group’s assets and liabilities
fairchild o ther acquisitions total 
book value a djustments fair value book value a djustments fair value fair value
noncurrent assets
property plant and equipment 638 – 638 668 140 528 1166
intangible assets – 25811 25811 – 7545 7545 33356
deferred tax assets 97 106 203 – 360 360 563
c urrent assets 
inventory 1821 77 1744 2745 637 2108 3852
trade and other receivables 1832 26 1806 1883 148 1735 3541
cash 1415 – 1415 2347 – 2347 3762
c urrent liabilities
trade and other payables 1106 63 1169 1701 730 2431 3600
warranty provision 35 136 171 – 198 198 369
loans and other borrowings – – – 205 – 205 205
noncurrent liabilities
deferred tax liability – 9034 9034 131 850 981 10015
loans and other borrowings – – – 411 – 411 411
total net assets 4662 16581 21243 5195 5202 10397 31640
goodwill 28289 4259 32548
purchase consideration 49532 14656 64188
paid in cash 49532 14106 63638
contingent consideration – 550 550
purchase consideration 49532 14656 64188
purchase consideration paid in cash 49532 14106 63638
cash held in subsidiary 1415 2347 3762
c ash outflow on acquisition 48117 11759 59876
the adjustments shown in the table above represent the alignment of accounting policies of the acquired businesses to rotork group 
policies and the fair value adjustments of the assets and liabilities at the acquisition date of each of the businesses 
goodwill has arisen on these acquisitions as a result of the value attributed to staff expertise and the assembled workforce which did not 
meet the recognition criteria for an intangible asset 
the intangible assets identified comprise customer relationships brands product design patents and acquired order books
notes to the group financial statements continued
for the year ended 31 december 2012 rotork plc annual report 2012
81
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
4 o the r income
2012 2011
gain on disposal of property plant and equipment 877 175
other 31 19
908 194
5 o the r expenses
2012 2011
loss on disposal of property plant and equipment 18 46
other 14 13
32 59
6 person nel expen ses
2012 2011
wages and salaries including bonus and incentive plans 95942 81649
social security costs 11343 9190
pension costs note 24 4995 5003
sharebased payments note 25 2030 1251
increase in liability for long term service leave 19 40
114329 97133
a total of £2030000 2011 £1251000 of the above sharebased payments are equity settled comprising £248000 2011 £194000 for 
the sharesave plan and £1782000 2011 £1057000 for the long term incentive plan ltip 
2012
number
2011
number
during the year the average weekly number of employees analysed by business segment was
controls 1576 1383
fluid systems 627 560
gears 272 241
instruments 106 8
2581 2192
uk 567 522
overseas 2014 1670
2581 2192 rotork plc  annual report 2012
82
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
7 net financin g income
recognised in the income statement 2012 2011
interest income 616 746
expected return on assets in the pension schemes 6010 6739
foreign exchange gains 30 105
6656 7590
interest expense 162 116
interest charge on pension scheme liabilities 6400 6468
foreign exchange losses 367 456
6929 7040
recognised in equity 2012 2011
effective portion of changes in fair value of cash flow hedges 1063 664
fair value of cash flow hedges transferred to income statement 664 457 
foreign currency translation differences for foreign operations 3967 2484
3568 2277
recognised in
hedging reserve 399 207
translation reserve 3967 2484
3568 2277 rotork plc annual report 2012
83
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
8 pro fit be fo re ta x
profit before tax is stated after charging the following
notes 2012 2011
depreciation of property plant and equipment
– owned assets i 5416 4408
– assets held under finance lease contracts i 36 71
amortisation 
– other intangibles i 7399 3921
– development costs i 924 732
inventory write downs recognised in the year i 1095 1230
hire of plant and machinery i 932 957
other operating lease rentals i 1918 1460
research  development expenditure ii 5328 4495
exchange differences realised iii 336 351
audit fees and expenses paid to kpmg audit plc
– audit of these financial statements
– audit of financial statements of subsidiaries of the company 
302
86
280
98
388 378
other auditors of group reporting subsidiaries 138 128
total audit fees and expenses 526 506
amounts paid to kpmg audit plc and its associates in respect of
– taxation compliance services 73 83
– other assurance services 23 60
96 143
these costs can be found under the following headings in the income statement
i both within cost of sales and administrative expenses
ii within administrative expenses
iii within financing income and expenses rotork plc  annual report 2012
84
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
9 income tax expen se
2012 2012 2011 2011
c urrent tax
uk corporation tax on profits for the year 9017 9737
adjustment in respect of prior years 295 120
8722 9617
overseas tax on profits for the year 27892 23086
adjustment in respect of prior years 480 210
28372 22876
total current tax 37094 32493
deferred tax
origination and reversal of other temporary differences 2531 57
adjustment in respect of prior years 316 401
total deferred tax 2215 344
total tax charge for year 34879 32149
effective tax rate based on profit before tax 281 286
profit before tax 124194 112550
profit before tax multiplied by standard rate of corporation tax in the uk of 245 2011 265 30428 29826
effects of
permanent differences 14 863
utilisation of overseas tax holidays 6 1171
different tax rates on overseas earnings 3942 3362
adjustments to tax charge in respect of prior years 501 731
total tax charge for year 34879 32149
a tax charge of £102000 2011 charge £168000 in respect of sharebased payments has been recognised directly in equity in the year 
the group continues to expect its effective rate of corporation tax to be higher than the standard uk rate due to higher rates of tax in the 
usa canada france germany italy japan and india
there is an unrecognised deferred tax liability for temporary differences associated with investments in subsidiaries rotork plc controls the 
dividend policies of its subsidiaries and subsequently the timing of the reversal of the temporary differences it is not practical to quantify 
the unprovided temporary differences as acknowledged within paragraph 40 of ias 12  rotork plc annual report 2012
85
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
10 property  plant and equipment 
l and and
buildings
plant and
equipment total
c ost
1 january 2011 20990 38532 59522
additions 3255 6747 10002
disposals 39 584 623
acquisition through business combinations – 1166 1166
exchange adjustments 288 263 551
31 december 2011 23918 45598 69516
additions 4403 8033 12436
disposals 67 1258 1325
acquisition through business combinations – 361 361
exchange adjustments 487 929 1416
31 december 2012 27767 51805 79572
depreciation
1 january 2011 6716 27026 33742
charge for the year 589 3890 4479
disposals 13 440 453
exchange adjustments 74 132 206
31 december 2011 7218 30344 37562
charge for the year 646 4806 5452
disposals 26 1154 1180
exchange adjustments 88 619 707
31 december 2012 7750 33377 41127
net book value    
31 december 2011 16700 15254 31954
31 december 2012 20017 18428 38445
the net book value of the group’s plant and equipment includes £28000 2011 £64000 in respect of assets held under finance leases
net book value of land and buildings can be analysed between
2012 2011
land 2262 2121
buildings 17755 14579
net book value at 31 december 20017 16700
it is the group’s policy to test assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may 
not be recoverable rotork plc  annual report 2012
86
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
11 goodwill
2012 2011
c ost
at 1 january 68459 35907
acquisition through business combinations 13952 32548
exchange adjustments 1682 4
at 31 december 80729 68459
provision for impairment
at 1 january and 31 december – –
c arrying amounts 80729 68459
c ash generating units
goodwill acquired through business combinations have been allocated to the lowest level of cash generating unit cgu and to the division 
in which it is reported where the acquired entities’ growth into new markets is through the group’s existing sales network the lowest level 
of cgu is considered to be at the divisional level 
the carrying value of goodwill is allocated as follows
2012 2011
fluid systems
 rotork fluid systems 7422 7624
 rotork sweden 6837 6786
 other cash generating units 8611 8610
22870 23020
instruments
 fairchild 27247 28679
 soldo 14196 –
41443 28679
c ontrols
 other cash generating units 8707 8967
8707 8967
gears
 other cash generating units 7709 7793
7709 7793
total group 80729 68459
impairment testing
goodwill is not amortised but is tested annually for impairment the goodwill arising on the acquisition of soldo has not been impairment 
tested due it being acquired in late 2012 and there being no indication of impairment
value in use calculations are used to determine the recoverable amount of goodwill allocated to each of the cgus these calculations use 
cash flow projections on actual operating results and management forecasts  rotork plc annual report 2012
87
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
11 goodwill continued
the key assumptions in the annual impairment review are set out below
i management forecasts
the three year plan is a bottom up process which takes place as part of the annual budget process the three year plan is prepared by each 
reporting entities’ management reflecting their view of the local market known projects and experience of past performance the annual 
budget and the three year plan are approved by the board each year
ii long term growth rates
in the period after the three year plan growth rates are forecast at 2 per annum for each cgu 2011 2 a rate of 2 is considered to 
be prudent considering the significant organic growth of the business over the last 10 years
iii discount rates
rotork divisions operate in all the same industry sectors and markets around the world therefore discount rates for each of the cgus are 
considered to be 104 2011 98 which represents a reasonable rate for a market participant in this sector
sensitivity analysis
base case forecasts have significant headroom above the carrying value of each cgu with the exception of fairchild sensitivity analysis has 
been undertaken for each cgu to assess the impact of any reasonable change in assumptions with the exception of fairchild there is no 
reasonable change that would cause the carrying values to exceed the recoverable amount
with regard to fairchild which has only been part of the group for 14 months downside sensitivities have been assessed an increase in 
the discount rate to 128 would result in the goodwill being impaired if the long term growth rate was 3 the discount rate would 
need to increase to 136 for the goodwill to become impaired it is anticipated as fairchild becomes more established within the group 
and leverages the sales network opportunities the long term growth rate should comfortably exceed the 20 growth rate assumed in the 
base case forecast rotork plc  annual report 2012
88
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
12 intan gible a sset s
business combinations acquired 
intangible assets
research 
development
costs brands
c ustomer
relationships o ther total
c ost
1 january 2011 5666 4298 4018 2189 16171
acquisition through business combinations – 13152 18618 1586 33356
internally developed 1328 – – – 1328
exchange adjustments – 228 43 14 199
31 december 2011 6994 17678 22593 3789 51054
acquisition through business combinations – 4808 4706 154 9668
internally developed 2075 – – – 2075
exchange adjustments – 532 577 101 1210
31 december 2012 9069 21954 26722 3842 61587
a mortisation
1 january 2011 3194 1042 2249 1603 8088
charge for the year 732 875 1973 1073 4653
exchange adjustments – 5 19 12 12
31 december 2011 3926 1912 4203 2688 12729
charge for the year 924 2256 4669 474 8323
exchange adjustments – 58 80 70 208
31 december 2012 4850 4110 8792 3092 20844
net book value        
31 december 2011 3068 15766 18390 1101 38325
31 december 2012 4219 17844 17930 750 40743
other acquired intangible assets represent order books and intellectual property
the amortisation charge is recognised within administrative expenses in the income statement
notes to the group financial statements continued
for the year ended 31 december 2012 rotork plc annual report 2012
89
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
13 reco gnised d eferred t ax a sset s a nd liabilitie s
a ssets
2012
l iabilities
2012
net
2012
assets
2011
liabilities
2011
net
2011
property plant and equipment 384 1238 854 189 1053 864
intangible assets – 11455 11455 – 11450 11450
employee benefits 8004 – 8004 8590 – 8590
provisions 4701 – 4701 4620 – 4620
other items 1267 2167 900 1435 1869 434
net tax assetsliabilities 14356 14860 504 14834 14372 462
set off of tax 1372 1372 – 1590 1590 –
12984 13488 504 13244 12782 462
movements in the net deferred tax balance during the year are as follows
2012 2011
balance at 1 january 462 8315
credited to the income statement 2215 344
charged directly to equity in respect of sharebased payments 116 539
acquired as part of business combinations 3115 9452
credited directly to equity in respect of pension schemes 286 1934
charged directly to hedging reserves in respect of cash flow hedges 140 65
exchange differences 96 75
balance at 31 december 504 462
a deferred tax asset of £12984000 2011 £13244000 has been recognised at 31 december 2012 the directors are of the opinion 
based on recent and forecast trading that the level of profits in the current and future years make it more likely than not that these assets 
will be recovered 
a deferred tax asset of £1807000 2011 £1958000 has not been recognised in relation to capital losses and certain tax credits tax 
losses and other temporary differences these assets may be recovered if sufficient taxable or capital profits are made in future in the 
companies concerned
14 inve nto ries
2012 2011
raw materials and consumables 48279 40609
work in progress 11474 13209
finished goods 11347 9110
71100 62928
included in cost of sales was £199710000 2011 £175352000 in respect of inventories consumed in the year  rotork plc  annual report 2012
90
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
15 tr ade and othe r rece ivable s
2012 2011
noncurrent assets
insurance policy 1368 1298
other 306 258
other receivables 1674 1556
c urrent assets
trade receivables 97635 98779
less provision for impairment of receivables 1813 2045
trade receivables – net 95822 96734
corporation tax 1946 988
current tax 1946 988
other nontrade receivables 5196 4357
prepayments and accrued income 4466 4104
other receivables 9662 8461
16 c a sh an d ca sh equ ivalent s
2012 2011
bank balances 42746 33790
cash in hand 101 82
short term deposits 17021 14685
cash and cash equivalents 59868 48557
bank overdraft – 38
cash and cash equivalents in the consolidated statement of cash flows 59868 48519
17 c apital and reserves
share capital and share premium
5p o rdinary
shares
issued
and fully
paid up
2012
£1 non
redeemable
preference
shares
2012
5p ordinary
shares
issued
and fully
paid up
2011
£1 non
redeemable
preference
shares
2011
at 1 january 4338 40 4334 40
preference shares redeemed – – – –
issued under employee share schemes 2 – 4 –
at 31 december 4340 40 4338 40
number of shares 000 86808 86750
the ordinary shareholders are entitled to receive dividends as declared and are entitled to vote at meetings of the company  rotork plc annual report 2012
91
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
17 c apital and reserves continued
the group received proceeds of £425000 2011 £450000 in respect of the 57481 2011 68264 ordinary shares issued during the year 
£2000 2011 £4000 was credited to share capital and £423000 2011 £446000 to share premium further details of the share awards 
are shown in note 25
the preference shareholders take priority over the ordinary shareholders when there is a distribution upon winding up the company or on 
a reduction of equity involving a return of capital the holders of preference shares are entitled to vote at a general meeting of the 
company if a preference dividend is in arrears for six months or the business of the meeting includes the consideration of a resolution for 
winding up the company or the alteration of the preference shareholders’ rights
within the retained earnings reserve are own shares held the investment in own shares represents 169511 2011 227575 ordinary shares 
of the company held in trust for the benefit of directors and employees for future payments under the share incentive plan and long term 
incentive plan the dividends on these shares have been waived
translation reserve
the translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations
c apital redemption reserve
the capital redemption reserve arises when the company redeems shares wholly out of distributable profits
hedging reserve
the hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments that 
are determined to be an effective hedge
dividends
the following dividends were paid in the year per qualifying ordinary share
2012
payment date 2012 2011
2275p final dividend 2011 1975p 21 may 19718 17097
164p interim dividend 2011 145p 28 september 14206 12543
2011 additional interim dividend of 115p paid – 9948
2011 additional interim dividend of 115p paid – 9946
33924 49534
after the balance sheet date the following dividends per qualifying ordinary share were proposed by the directors the dividends have not 
been provided for and there are no corporation tax consequences
2012 2011
final proposed dividend per qualifying ordinary share
266p 23091
2275p 19736 rotork plc  annual report 2012
92
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business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
18 ea rnings per sha re
basic earnings per share
earnings per share is calculated for both the current and previous years using the profit attributable to the ordinary shareholders for the 
year the earnings per share calculation is based on 866m shares 2011 865m shares being the weighted average number of ordinary 
shares in issue net of own ordinary shares held for the year
2012 2011
net profit attributable to ordinary shareholders 89315 80401
weighted average number of ordinary shares
issued ordinary shares at 1 january 86523 86419
effect of own shares held 55 55
effect of shares issued under share option schemes  sharesave plans 14 12
weighted average number of ordinary shares during the year 86592 86486
basic earnings per share 1031p 930p
a djusted basic earnings per share
adjusted basic earnings per share is calculated for both the current and previous years using the profit attributable to the ordinary 
shareholders for the year after adding back the after tax amortisation charge
2012 2011
net profit attributable to ordinary shareholders 89315 80401
amortisation 7399 3921
tax effect on amortisation at effective rate 2078 1120
adjusted net profit attributable to ordinary shareholders 94636 83202
weighted average number of ordinary shares during the year 86592 86486
adjusted basic earnings per share 1093p 962p
diluted earnings per share
diluted earnings per share is based on the profit for the year attributable to the ordinary shareholders and 870m shares 2011 868m 
shares the number of shares is equal to the weighted average number of ordinary shares in issue net of own ordinary shares held 
adjusted to assume conversion of all potentially dilutive ordinary shares the company has three categories of potentially dilutive ordinary 
shares those share options granted to employees under the share option scheme and sharesave plan where the exercise price is less than 
the average market price of the company’s ordinary shares during the year and contingently issuable shares awarded under the long term 
incentive plan ltip
2012 2011
net profit attributable to ordinary shareholders 89315 80401
weighted average number of ordinary shares diluted
weighted average number of ordinary shares for the year 86592 86486
effect of share options in issue – 5
effect of sharesave options in issue 106 101
effect of ltip shares in issue 343 254
weighted average number of ordinary shares diluted during the year 87041 86846
diluted earnings per share 1026p 926p rotork plc annual report 2012
93
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
19 inte rest be a ring l oan s a nd bo rrow ings
this note provides information about the contractual terms of the group’s interest bearing loans and borrowings for more information 
about the group’s exposure to interest rate and currency risk see note 26
2012 2011
noncurrent liabilities
preference shares classified as debt 40 40
bank loans 62 129
finance lease liabilities 14 60
116 229
c urrent liabilities
bank overdraft – 38
bank loans 30 31
finance lease liabilities 26 54
56 123
terms and debt repayment schedule
the terms and conditions of outstanding loans were as follows
currency interest rates
year of 
maturity
face value
2012
c arrying 
amount
2012
face value
 2011
carrying
amount
2011
nonredeemable preference shares sterling 95  40 40 40 40
bank loans and overdrafts euro 0 201315 92 92 198 198
finance lease liabilities euro  yen 15  67 201315 42 40 122 114
174 172 360 352
repayment profile
finance leases and bank loans and overdrafts are payable as follows
minimum 
payments
2012
interest
2012
principal
2012
minimum 
payments
2011
interest
2011
principal
2011
bank loans less than one year 30 – 30 69 – 69
bank loans more than one and less than five years 62 – 62 129 – 129
finance leases less than one year 27 1 26 58 4 54
finance leases more than one and less than five years 15 1 14 64 4 60
134 2 132 320 8 312 rotork plc  annual report 2012
94
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
20 employee bene fit s
2012 2011
recognised liability for defined benefit obligations
 present value of funded obligations 151501 132804
 fair value of plan assets 122802 107429
28699 25375
defined contribution scheme liabilities 1291 1204
employee bonus and incentive plan 10468 9513
long term incentive plan 620 305
employee indemnity provision 1329 993
liability for long term service leave 395 376
42802 37766
noncurrent 32060 28142
current 10742 9624
42802 37766
defined benefit pension scheme disclosures are detailed in note 24
21 prov isio ns
c ontingent
consideration
warranty
provision total
balance at 1 january 2012 509 5679 6188
exchange differences 15 130 115
increase as a result of business combinations 798 54 852
provisions used during the year 200 1319 1519
charged in the year – 1230 1230
balance at 31 december 2012 1122 5514 6636
maturity at 31 december 2012
noncurrent 863 1838 2701
current 259 3676 3935
1122 5514 6636
maturity at 31 december 2011
noncurrent 300 1918 2218
current 209 3761 3970
509 5679 6188
the warranty provision is based on estimates made from historical warranty data associated with similar products and services the 
provision relates mainly to products sold during the last 12 months the typical warranty period is now 18 months
contingent consideration relates to amounts outstanding in respect of the acquisitions of rotork servo controles de mexico sa de cv 
prokits limited and soldo srl it is anticipated that £863000 of the noncurrent balance will be settled in 2014 rotork plc annual report 2012
95
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
22 tr ade and othe r payable s
2012 2011
trade payables 36355 38502
bills of exchange – 240
trade payables 36355 38742
corporation tax 11143 13225
current tax 11143 13225
other taxes and social security 5795 5524
payments on account 9108 12847
nontrade payables and accrued expenses 20309 19989
other payables 35212 38360
23 deriva tive financial in st rum ent s
2012
a ssets
2012
l iabilities
2011
assets
2011
liabilities
forward foreign exchange contracts – cash flow hedges 1507 70 992 95
foreign exchange swaps – cash flow hedges 747 26 – 519
total 2254 96 992 614
less noncurrent portion
forward foreign exchange contracts – cash flow hedges – – 315 –
current portion 2254 96 677 614
the full fair value of a hedging derivative is classified as a noncurrent asset or liability if the remaining maturity of the hedged item is more 
than 12 months and as a current asset or liability if the maturity of the hedged item is less than 12 months
there was no ineffectiveness to be recorded from the use of foreign exchange contracts
the hedged forecast transactions denominated in foreign currency are expected to occur at various dates gains and losses in respect of 
these derivatives recognised in the hedging reserve in equity note 17 at 31 december 2012 are recognised in the income statement in the 
period or periods during which the hedged forecast transaction affects the income statement rotork plc  annual report 2012
96
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
24 pension sche mes
i defined benefit pension schemes
the group makes a contribution to three defined benefit plans to provide benefits for employees in the uk usa and the netherlands 
upon retirement
movements in the present value of defined benefit obligations
2012 2011
liabilities at 1 january 132804 117737
current service costs 2622 2438
member contributions 487 467
interest cost 6400 6468
benefits paid 3639 3637
actuarial loss 13524 9407
currency gain 697 76
liabilities at 31 december 151501 132804
movements in fair value of plan assets
2012 2011
assets at 1 january 107429 100466
expected return on scheme assets 6010 6739
employer contributions 9263 5287
member contributions 487 467
benefits paid 3639 3637
actuarial gain  loss 3612 1858
currency loss 360 35
assets at 31 december 122802 107429
expense recognised in the income statement
2012 2011
current service costs 2622 2438
interest on obligation 6400 6468
expected return on plan assets 6010 6739
3012 2167
the expense is recognised in the following line items in the income statement
2012 2011
cost of sales 435 595
administrative expenses 2187 1843
net financing expense  income 390 271
3012 2167 rotork plc annual report 2012
97
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
24 pension sch emes continued
a mounts recognised in the c onsolidated statement of c omprehensive income
2012 2011
actuarial gain  loss on plan assets 3612 1858
actuarial loss from liabilities 13524 9407
9912 11265
currency gain 337 41
net loss 9575 11224
cumulative losses recognised in the consolidated statement of comprehensive income 41128 31553
experience adjustments
2012 2011 2010 2009 2008
defined benefit obligation 151501 132804 117737 108514 81994
scheme assets 122802 107429 100466 88906 76277
deficit 28699 25375 17271 19608 5717
experience adjustments on liabilities 20 121 177 2760 2006
experience adjustments on assets 3612 1858 4487 7020 17843
experience adjustments on currency 337 41 206 397 607
l iability for defined benefit obligations
the principal actuarial assumptions at 31 december 2012 expressed as weighted averages
uk scheme 
 per annum
us scheme 
 per annum
average 
 per annum
2012 2011 2012 2011 2012 2011
discount rate 43 48 41 46 43 48
rate of increase in salaries 34 35 45 45 35 36
rate of increase in pensions post may 2000 28 29 00 00 25 26
rate of increase in pensions pre may 2000 45 45 00 00 40 40
rate of inflation 29 30 35 35 30 30
the retail price index is used as the rate of inflation as it is a requirement of the pension scheme rules
the split of the schemes’ assets and expected rates of return were

2012
fair value 
2011
fair value
equities 64 58809 65 48787
bonds 35 47480 38 43288
property 75 6883 75 6845
cash 34 1663 34 2109
us deposit administration contract 60 7967 60 6400
total 122802 107429
actual return on the schemes’ assets 9262 4846 rotork plc  annual report 2012
98
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
24 pension sch emes continued
the individual return assumptions for each asset class are based on market conditions at 31 december 2012 and represent a best estimate 
of future returns for that class allowing for risk premiums where appropriate no scheme assets are invested in the group’s own equity
the group estimates that cash contributions to the group’s defined benefit pension schemes during 2013 will be £3476000 for regular 
payments and additional payments of £1700000 in relation to past service 2012 £7300000
the mortality assumptions used are the s1nxa year of birth tables with future improvements in mortality based on the cmi2009 
projections with a long term rate of improvement of 15 per annum 2011 15
by way of example the respective mortality tables indicate the following life expectancy
2012 2011
l ife expectancy at age 65 life expectancy at age 65
c urrent a ge male female male female
65 225 248 224 247
45 248 272 247 271
ii o ther pension plans
the group makes a contribution to a number of defined contribution plans around the world to provide benefits for employees upon 
retirement total expense relating to these plans in the year was £2558000 2011 2565000 
25 sha reba sed payment s
the group awards shares under the long term incentive plan ltip and under the save as you earn scheme the sharebased payment 
expense included in the income statement for each of the plans can be analysed as follows
2012 2011
ltip  equity settled 1782 1057
sharesave plan 248 194
total expense recognised as employee costs note 6 2030 1251
volatility assumptions for equitybased payments
the expected volatility of all equity compensation benefits is based on the historic volatility calculated based on the weighted average 
remaining life of each benefit adjusted for any expected changes to future volatility due to publicly available information
a share option scheme
at 1 january 1995 the group established a share option programme for employees the allocation of options was linked to the completion of 
service in accordance with the programme once vested the options grant the right to purchase shares at the market price at the date of 
grant options vested after three years and expire 10 years after being granted no new grants have been made under the scheme since 2004 
options over 6480 shares were outstanding at the beginning of the year during 2012 all remaining options 2011 5332 were exercised 
and the group received proceeds of £25000 2011 £17000 at a weighted average exercise price of £387 2011 £314  rotork plc annual report 2012
99
overview 111
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directors 4043
governance 4464
financial statements 65114
company information 115117
25 sha reba sed payment s continued
b sharesave plan
uk employees are invited to join the sharesave plan when an offer is made each year all the offers to date were made at a 20 discount 
to market price at the time there are no performance criteria for the sharesave plan employees are given the option of joining either the 
3 year or the 5 year scheme
3 year scheme 5 year scheme
2012 2011 2012 2011
grant date 1 december 1 december 1 december 1 december
share price at grant date £2480 £1808 £2480 £1808
exercise price £1762 £1332 £1762 £1332
shares granted under scheme 27772 29655 25939 28868
vesting period 3 years 3 years 5 years 5 years
expected volatility 263 310 334 340
risk free rate 04 07 08 13
expected dividends expressed as a dividend yield 16 19 16 19
probability of ceasing employment before vesting 20 20 20 20
fair value £762 £559 £925 £653
movements in the number of share options outstanding and their weighted average exercise prices are as follows
2012 2011
average 
exercise price 
in £ per share o ptions
average 
exercise price 
in £ per share options
at 1 january 1017 247588 862 258411
granted 1762 53711 1332 58523
exercised 745 51174 682 62932
lapsed 1218 7295 1033 6414
a t 31 december 1224 242830 1017 247588
of the 242830 outstanding options 2011 247588 5760 are exercisable 2011 7045 
the group received proceeds of £400000 in respect of the 51174 options exercised during the year £2000 was credited to share capital 
and £398000 to share premium the weighted average share price at date of exercise was £2440 2011 £1807
the weighted average remaining life of 79106 2011 91455 awards outstanding under the 3 year plan is two years the weighted 
average remaining life of 163724 2011 156133 awards outstanding under the 5 year plan is two years
c l ong term incentive plan
the long term incentive plan ltip is a performance share plan under which shares are conditionally allocated to selected members of 
senior management at the discretion of the remuneration committee on an annual basis following shareholder approval of the ltip at the 
company’s agm on 18 may 2000 awards over shares are made to executive directors and senior managers each year  rotork plc  annual report 2012
100
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
25 sha reba sed payment s continued
2009 ltip award
no shares or cash units will normally be released to participants unless they are still in the group’s service following completion of three 
year performance periods and the company’s relative total shareholder return tsr against a comparator group of companies places it in 
at least the 50th percentile position in the comparator group at the end of the relevant performance period 
tsr measures the change in value of a share and reinvested dividends over the period of measurement the actual number of shares or 
cash units transferred will be determined by the number of shares or cash units initially allocated multiplied by a vesting percentage the 
actual number of shares or cash units transferred will be 30 at the 50th percentile rising to 100 at the 75th percentile with each 
percentile position above the 50th adding 28 to the vesting percentage the company’s earnings per share eps is also monitored 
during the relevant performance period to ensure it meets a minimum average annual growth equal to the rise in the retail price index rpi 
plus 2 per annum failure to meet the rpi requirement will result in nil vesting
the performance period for the 2009 awards ended on 31 december 2011 messrs pricewaterhousecoopers llp as independent actuaries 
certified to the remuneration committee that there was a 300 vesting of this award as the company was in the 50th percentile relative 
to the comparator group and the group’s eps growth has exceeded the minimum average annual growth in the rpi plus 2 per annum 
the awards vested during 2012
2010 ltip plan
following shareholder approval of the 2010 ltip plan at the company’s agm on 23 april 2010 awards of shares have been made 
annually to executive and senior managers half of these awards vest under a tsr performance condition and half under an eps 
performance condition
tsr measures the change in value of a share and reinvested dividends over the period of measurement the actual number of shares 
transferred will be determined by the number of shares initially allocated multiplied by a vesting percentage the actual number of shares 
transferred will be 25 at the 50th percentile rising to 100 at the 75th percentile
the eps performance condition is satisfied with 15 of the awards vesting if the eps growth is rpi  10 over the vesting period up to a 
maximum of 100 vesting if eps growth exceeds rpi 25
the performance period for the 2010 awards ended on 31 december 2012 messrs pricewaterhousecoopers llp as independent actuaries 
certified to the remuneration committee that there was a 755 vesting of these awards based on the performance criteria of the 
scheme the awards will vest during 2013
2012 2011
grant date 1 march 2012 4 march 2011
share price at grant date £2070 £1700
shares granted under scheme 124275 127970
vesting period 3 years 3 years
expected volatility 28 36
risk free rate 05 18
expected dividends expressed as a dividend yield 24 19
probability of ceasing employment before vesting 5 pa 5 pa
fair value of awards under tsr performance conditions £1249 £988
fair value of awards under eps performance conditions £1936 £1611 rotork plc annual report 2012
101
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
25 sha reba sed payment s continued
outstanding 
at start 
of year
granted 
during year
vested during 
year lapsed
o utstanding 
at end 
of year
2009 award 186832 – 55539 131293 –
2010 award 135494 – – 2248 133246
2011 award 126826 – – 1920 124906
2012 award – 124275 – 1580 122695
449152 124275 55539 137041 380847
at the date of vesting the 2009 awards were valued at £2065 the weighted average remaining life of awards outstanding at the year end 
is one year
26 financial in st rumen t s
financial risk and treasury policies
the treasury department maintains liquidity identifies and manages foreign exchange risk manages relations with the group’s bankers 
and provides a treasury service to the group’s businesses treasury dealings such as investments borrowings and foreign exchange are 
conducted only to support underlying business transactions
the group has clearly defined policies for the management of credit foreign exchange and interest rate risk the group treasury 
department is not a profit centre and therefore does not undertake speculative foreign exchange dealings for which there is no 
underlying exposure exposures resulting from sales and purchases in foreign currency are matched where possible and the net  
exposure may be hedged
a c redit risk
credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual 
obligations and arises principally from the group’s receivables from customers and cash on deposit with financial institutions 
management has a credit policy in place and exposure to credit risk is both monitored on an ongoing basis and reduced through the use of 
credit insurance covering 80 to 90 of trade receivables at any time credit evaluations are carried out on all customers requiring credit 
above a certain threshold with varying approval levels set around this depending on the value of the sale at the balance sheet date there 
were no significant concentrations of credit risk
goods are sold subject to retention of title clauses so that in the event of non–payment the group may have a secured claim
the group maintains an allowance for impairment in respect of non–insured receivables where recoverability is considered doubtful
the group treasury committee meets regularly and reviews the credit risk associated with institutions that hold a material cash balance as 
well as credit ratings counterparties and instruments are assessed for credit default swap pricing and liquidity of funds rotork plc  annual report 2012
102
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
26 financial in st rum ent s continued
exposure to credit risk
the carrying amount of financial assets represents the maximum credit exposure the maximum exposure to credit risk at the reporting 
date was
c arrying amount
2012 2011
trade receivables 95822 96734
other receivables 11336 10017
cash and cash equivalents 59868 48557
foreign exchange contracts 2254 992
169280 156300
the maximum exposure to credit risk for trade receivables at the reporting date by currency was
c arrying amount
2012 2011
sterling 9273 7710
us dollar 29486 24259
euro 37102 43249
indian rupee 3744 4420
other 16217 17096
95822 96734
provisions against trade receivables
the aging of trade receivables and the associated provision for impairment at the reporting date was
gross
2012
provision
2012
gross
2011
provision
2011
not past due 63581 102 70003 108
past due 0–30 days 17716 16 15125 33
past due 31–60 days 7030 50 6178 15
past due 61–90 days 3244 123 2891 296
past due more than 91 days 6064 1522 4582 1593
97635 1813 98779 2045 rotork plc annual report 2012
103
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
26 financial in st rum ent s continued
b l iquidity risk
liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due the group’s approach to managing 
liquidity is to ensure as far as possible that it will always have sufficient liquidity to meet its liabilities when due under both normal and 
stressed conditions without incurring unacceptable losses or risking damage to the group’s reputation
the group is highly cash generative and uses monthly cash flow forecasts to monitor cash requirements and to optimise its return on 
investments typically the group ensures that it has sufficient cash on hand to meet foreseeable operational expenses it also maintains a 
£7m overdraft facility 2011 £7m on which interest would be payable at base rate plus 15 in january 2013 the group arranged a £15m 
committed loan facility with a tenor of one year interest is payable on this committed facility at libor plus 1
the following are the contractual maturities of financial liabilities including interest payments and excluding the impact of netting 
agreements
a nalysis of contractual cash flow maturities
31 december 2012
c arrying 
amount
c ontractual 
cash flows
l ess than 
12 months 1–2 years 2–5 years
more than 
5 years
bank loans and overdrafts 92 92 30 30 32 –
finance lease liabilities 40 42 28 11 3 –
trade and other payables 71567 71567 71567 – – –
foreign exchange contracts 96 96 96 – – –
nonredeemable preference shares 40 40 – – – 40
71835 71837 71721 41 35 40
analysis of contractual cash flow maturities
31 december 2011
carrying 
amount
contractual 
cash flows
less than
 12 months 1–2 years 2–5 years
more than 
5 years
bank loans and overdrafts 198 198 69 35 94 –
finance lease liabilities 114 122 62 36 24 –
trade and other payables 77102 77102 77102 – – –
forward exchange contracts 614 614 596 18 – –
nonredeemable preference shares 40 40 – – – 40
78068 78076 77829 89 118 40
where a counterparty experiences credit stress then the foreign exchange contracts may be settled on a net basis but standard practice is 
to settle on a gross basis and the undiscounted gross outflow in respect of these contracts is £134353000 2011 £116580000 and the 
gross inflow is £136625000 2011 £117216000 rotork plc  annual report 2012
104
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
26 financial in st rum ent s continued
c market risk
market risk arises from changes in market prices such as currency rates and interest rates and may affect the group’s results the objective 
of market risk management is to manage and control market risk within suitable parameters
i currency risk
the group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the business unit’s 
functional currency the currencies primarily giving rise to this risk are the us dollar and related currencies and the euro the group hedges 
up to 75 of forecast us dollar or euro foreign currency exposures using forward exchange contracts in respect of other non–sterling 
monetary assets and liabilities the exposures may also be hedged up to 75 where this is deemed appropriate
as part of the group’s cash management some of the overseas subsidiaries have loan and deposit balances where their intra–group 
counterparty is in the uk the balances are typically in local currency for the subsidiary so the uk holds a foreign currency current asset or 
liability which is usually hedged through the use of foreign exchange swaps at the balance sheet date only the ‘forward’ part of the swap 
remains and this is designated as a cash flow hedge to match the currency exposure of the intercompany loan asset
the group classifies its forward exchange contracts that hedge both the forecast sale and purchase transactions and the intercompany 
loan and deposit balances as cash flow hedges and states them at fair value the net fair value of foreign exchange contracts used as 
hedges at 31 december 2012 was a £2158000 asset 2011 £378000 asset comprising an asset of £2254000 2011 £992000 and a 
liability of £96000 2011 £614000 forward exchange contracts in place at 31 december 2012 mature in 2013 and 2014
changes in the fair value of foreign exchange contracts that economically hedge monetary assets and liabilities in foreign currencies and 
for which no hedge accounting is applied are recognised in the income statement 
sensitivity analysis
it is estimated that with all other variables held equal in particular other exchange rates a general change of one cent in the value of 
either the us dollar or euro against sterling would have had an impact on the group’s operating profit for the year ended 31 december 
2012 of £350000 2011 £350000 the method of estimation which has been applied consistently involves assessing the transaction 
impact of us dollar and euro cash flows and the translation impact of us dollar and euro profits
the following significant exchange rates applied during the year
a verage rate c losing rate
2012 2011 2012 2011
us dollar 159 159 162 155
euro 123 115 123 120
ii interest rate risk
the group does not undertake any hedging activity in this area all cash deposits are made at prevailing interest rates and the majority is 
available with same day notice though deposits are sometimes made with a maturity of no more than three months the main element of 
interest rate risk concerns sterling us dollar euro and renminbi deposits all of which are on a floating rate basis
the interest rate profile of the group’s financial liabilities at 31 december was as follows
2012 2011
fixed rate financial liabilities 150 269
floating rate financial liabilities 22 83
172 352
the fixed and floating rate financial liabilities comprise finance leases preference shares and bank loans the floating rate lease obligations 
bear interest at rates determined by reference to the relevant libor or equivalent rate
the weighted average interest rate of the fixed rate financial liabilities is 11 or 63 excluding the zero rate debt 2011 16 or 53 
the weighted average period for which non zero interest rates on the fixed rate financial liabilities are fixed is 17 years rotork plc annual report 2012
105
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
26 financial in st rum ent s continued
the maturity profile of the group’s financial liabilities at 31 december was as follows
2012 2011
in one year or less 56 123
in more than one year but not more than two years 41 72
in more than two years but not more than five years 35 117
in more than five years 40 40
total 172 352
d c apital risk management
the primary objective of the group’s capital management is to ensure it maintains sufficient capital in order to support its business and 
maximise shareholder value the group has an assetlight business model and uses cash generated from operations to either invest organically 
or by acquisition the group manages its capital structure and makes adjustments to it in light of changes in economic and market conditions 
to maintain or adjust the capital structure the group may adjust the dividend payment to shareholders or issue new shares 
the group defines capital as net funds and equity attributable to shareholders see note 17 there are no externally imposed restrictions 
on the group’s capital structure
the group monitors capital using the following indicators
i group net funds 
2012 2011
total borrowings 172 352
cash and cash equivalents note 16 59868 48557
group net funds 59696 48205
ii return on capital employed
2012 2011
a djusted operating profit
operating profit 124467 112000
amortisation of acquired intangible assets 7399 3921
131866 115921
c apital employed
shareholders funds 269323 224169
cash and cash equivalents note 16 59868 48519
pension deficit net of deferred tax 21811 18778
231266 194428 
average capital employed 212847 156503
return on capital employed 620 741 rotork plc  annual report 2012
106
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes to the group financial statements continued
for the year ended 31 december 2012
26 financial in st rum ent s continued
e fair values
the fair values of financial assets and liabilities together with the carrying amounts shown in the balance sheet were as follows
c arrying 
a mount
2012
fair value 
2012
carrying 
amount
2011
fair value
2011
loans and receivables
trade receivables 95822 95822 96734 96734
other receivables 11336 11336 10017 10017
financial assets
cash and cash equivalents 59868 59868 48557 48557
designated cash flow hedges
foreign exchange contracts
 financial assets 2254 2254 992 992
 financial liabilities 96 96 614 614
financial liabilities at amortised cost
bank overdraft and borrowings 92 92 198 198
trade and other payables 71567 71567 77102 77102
contingent consideration 1122 1122 509 509
preference shares 40 40 40 40
finance lease liabilities 40 40 114 114
96323 96323 77723 77723
basis for determining fair values
the following summarises the significant methods and assumptions used in estimating the fair values of financial instruments reflected in 
the table above
i designated cash flow hedges
forward exchange contracts are valued at year end spot rates adjusted for the forward points to the appropriate value dates and gains and 
losses are taken to equity 
ii trade and other receivablespayables
as the majority of receivablespayables have a remaining life of less than one year the notional amount is deemed to reflect the fair value
iii contingent consideration
as all the contingent consideration is contractually due for payment within 15 months the notional amount is deemed to reflect the fair value
27 o perat ing lea ses
noncancellable operating lease rentals are payable as follows
2012 2011
less than one year 4296 3255
between one and five years 8916 6649
more than five years 1051 1347
 14263 11251
of the £14263000 2011 £11251000 £10576000 2011 £8657000 relates to property and the balance to plant and equipment rotork plc annual report 2012
107
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
28 c apital commitment s
capital commitments at 31 december for which no provision has been made in these accounts were
2012 2011
contracted 2175 1192
29 c on tin genc ies
2012 2011
performance guarantees and indemnities 5246 6117
the performance guarantees and indemnities have been entered into in the normal course of business a liability would only arise in the 
event of the group failing to fulfil its contractual obligations
30 related pa rti es
the group has a related party relationship with its subsidiaries and with its directors and key management a list of subsidiaries is shown 
on page 112 of these financial statements transactions between two subsidiaries for the sale and purchase of products or the subsidiary 
and parent company for management charges are priced on an arms length basis
sales to subsidiaries and associates of bae systems plc a related party by virtue of nonexecutive director ig king’s directorship of that 
company totalled £34000 during the year 2011 £29000 and £15000 was outstanding at 31 december 2012 2011 £nil
ubs investment bank are a related party by virtue of nonexecutive director sa james’ directorship of ubs limited ubs investment bank 
provides the group financial advice and stockbroking services  the current arrangement with ubs investment limited is that out of pocket 
expenses will be reimbursed and no fees will be charged for their regular advisory or broking services expenses of £4000 have been 
reimbursed in the year and no balance was outstanding at 31 december 2012
key management emoluments
the emoluments of those members of the management team including directors who are responsible for planning directing and 
controlling the activities of the group were
2012 2011
emoluments including social security costs 4510 3782
post employment benefits 457 392
sharebased payments 1418 844
6385 5018
31 po st ba lance sheet event s
on 17 january 2013 the group acquired the entire share capital of the operating companies of the schischek group for £343m the 
consideration was paid in cash and the group will be assuming schischek’s net debt of £11m the operating profit of the acquired group in 
2012 is expected to be £45m rotork plc  annual report 2012
108
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
notes
2012
£000
2011
£000
fixed assets
tangible assets c 1152 1090
investments d 43205 43205
44357 44295
c urrent assets
debtors f 63754 34787
cash at bank and in hand e 1074 312
64828 35099
c reditors
amounts falling due within one year g 5070 4447
net current assets 59758 30652
total assets less current liabilities 104115 74947
c reditors
amounts falling due after more than one year h 40 40
net assets 104075 74907
c apital and reserves
called up share capital j 4340 4338
share premium account j 8258 7835
capital redemption reserve j 1644 1644
profit and loss account j 89833 61090
equity shareholders’ funds 104075 74907
these company financial statements were approved by the board of directors on 4 march 2013 and were signed on its behalf by  
pi france and jm davis directors
rotork plc company balance sheet
at 31 december 2012 rotork plc annual report 2012
109
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
a a ccountin g policie s
the following accounting policies have been applied consistently in dealing with items which are considered material in relation to the 
financial statements notes a to k relate to the company rather than the group
basis of preparation
the financial statements have been prepared under the historical cost convention and in accordance with applicable uk gaap 
under section 408 of the companies act 2006 the company is exempt from the requirement to present its own profit and loss account 
under frs 1 the company is exempt from the requirement to prepare a cash flow statement on the grounds that the group includes the 
company in its own published consolidated financial statements
the company has taken advantage of the exemption available under frs 8 and has not disclosed transactions with entities which are 
subsidiaries of the group
the group financial statements contain financial instruments disclosures which comply with frs 29 ‘financial instruments disclosures’ 
consequently the company has taken advantage of the exemption in frs 29 not to present separate financial instrument disclosures for 
the company
where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the group the 
company considers these to be insurance arrangements and accounts for them as such in this respect the company treats the guarantee 
contract as a contingent liability until such time as it becomes probable that the company will be required to make a payment under the 
guarantee the company continues to account for intra–group cross guarantees under frs 12
foreign currencies
transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction monetary assets and 
liabilities denominated in foreign currencies are translated using the rate of exchange at the balance sheet date and the gains or losses on 
translation are included in the profit and loss account
investments
investments are measured at cost less any provision for impairment and comprise investments in subsidiary companies
depreciation and amortisation
freehold land is not depreciated long leasehold buildings are amortised over 50 years or the expected useful life of the building where less 
than 50 years other assets are depreciated by equal annual instalments by reference to their estimated useful lives and residual values at 
the following annual rates
freehold buildings   2 to 4
short leasehold buildings  period of lease
plant and equipment  10 to 33
postretirement benefits
the company participates in a uk group pension scheme providing benefits based on final pensionable salary the assets of the scheme 
are held separately from those of the company the company is unable to identify its share of the underlying assets and liabilities of the 
scheme on a consistent and reasonable basis and therefore as required by frs 17 retirement benefits accounts for the scheme as if it 
were a defined contribution scheme as a result the amount charged to the profit and loss account represents the contributions payable to 
the scheme in respect of the accounting period
c lassification of preference shares
following the adoption of the presentation elements of frs 25 financial instruments the cumulative redeemable preference shares issued 
by the company are classified as long term debt the preference dividends are charged within interest payable
notes to the company financial statements
for the year ended 31 december 2012 rotork plc  annual report 2012
110
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
a a ccountin g policie s continued
sharebased payments
the company has adopted frs 20 and the accounting policies followed are in all material respects the same as the group’s policy under 
ifrs 2 this policy is shown in note 1 to the group financial statements costs in relation to sharebased awards made to other group 
company employees are recharged to each subsidiary company
deferred taxation
deferred tax is provided in full without discounting on timing differences that result in an obligation at the balance sheet date to pay more 
tax or a right to pay less tax at a future date at rates expected to apply when they crystallise based on current tax rates and law except for 
the items explained below timing differences arise from the inclusion of items of income and expenditure in taxation computations in 
periods different from those in which they are included in the financial statements deferred tax is not provided on timing differences 
arising from the revaluation of fixed assets where there is no commitment to sell the assets or on unremitted earnings of subsidiaries where 
there is no commitment to remit those earnings deferred tax assets are recognised to the extent that it is regarded as more likely than not 
that they will be recovered
dividends
interim dividends are recorded in the financial statements when they are paid final dividends are recorded in the financial statements in 
the period which they are approved by the company’s shareholders
b person nel expen ses in the c om pany pro fit a nd l o ss a cc ount
2012 2011
wages and salaries including bonus and incentive plans 2731 2256
social security costs 345 237
pension costs 337 295
sharebased payments 603 376
4016 3164
during the year there were 11 2011 eight employees of rotork plc plus the four 2011 four executive directors the personnel costs 
accounted for within the company include the full costs of the employees the group finance director the group chief executive from 
1 april 2011 but not the full costs of the other two executive directors who are reported within the subsidiary where they are based
sharebased payments
the sharebased payment charge relates to employees of the company participating in the long term incentive plan ltip the disclosures 
required under frs 20 can be found in note 25 to the group financial statements the table below sets out the movement of share options 
under the ltip for employees of the company
outstanding 
at start 
of year
granted 
during 
year
vested 
during 
year
lapsed 
during 
year
o utstanding 
at end 
of year
2009 award 35736 – 10720 25016 –
2010 award 36318 – – – 36318
2011 award 44386 – – – 44386
2012 award – 43503 – – 43503
116440 43503 10720 25016 124207
at the date of vesting the 2009 awards were valued at £2065 the weighted average remaining life of awards outstanding at the year end 
is one year
notes to the company financial statements continued
for the year ended 31 december 2012 rotork plc annual report 2012
111
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
c tan gible a sset s in the c om pany bal ance sheet
l and and
buildings
plant and
equipment total
c ost
at 1 january 2012 1468 13 1481
additions – 90 90
a t 31 december 2012 1468 103 1571
depreciation
at 1 january 2012 378 13 391
charge for year 28 – 28
a t 31 december 2012 406 13 419
net book value 
at 31 december 2012 1062 90 1152
at 31 december 2011 1090 – 1090
2012 2011
net book value of land and buildings can be analysed between
freehold land 60 60
freehold buildings 1002 1030
net book value at 31 december 1062 1090
d inv estm ent s in the c om pany bal ance sheet
shares in group companies
2012 2011
at 1 january 43205 43205
increased investment in subsidiary undertakings – –
at 31 december 43205 43205 rotork plc  annual report 2012
112
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
d inve stment s in the c om pany bal ance sheet continued
a listing of the principal subsidiaries of the group all of which are wholly owned is set out below
c ompany and country of incorporation nature of business
rotork overseas ltd england and wales intermediate holding company for the following
rotork inc usa intermediate holding company
 
1
rotork controls inc usa manufacture and sale of valve actuators
 
1
remote control inc usa ““
 
1
flow–quip inc usa assemble and distribute fluid power solutions
 
1
ralph a hiller company usa
 
1
rotork thailand ltd thailand
 
1
ranger acquisition corp usa
 
2
fairchild industrial products company usa
 
2
k–tork international inc usa
 
3
controls international inc usa
manufacture and sale of valve actuators
““
intermediate holding company
manufacture of high precision pneumatic controls
intermediate holding company
manufacture and sale of vane actuators
rotork controls iberia sl spain
 
4
centork valve control sl spain
sale of valve actuators
manufacture and sale of valve actuators
rotork actuation sdn bhd malaysia ““
rotork controls deutschland gmbh germany ““
rotork fluid systems srl italy ““
rotork sweden ab sweden ““
rotork controls canada ltd canada sale of valve actuators
rotork motorisation sas france ““
rotork bv netherlands ““
rotork controls singapore pte ltd singapore ““
rotork australia pty ltd australia ““
rotork controls de venezuela sa venezuela ““
rotork ltd hong kong ““
rotork malaysia sdn bhd malaysia ““
rotork controls korea co ltd south korea ““
rotork africa pty limited south africa ““
rotork japan co ltd japan ““
rotork rus ltd russia ““
rotork controls comercio de atuadores ltda brazil ““
rotork norge as norway ““
rotork middle east fze jebel ali dubai ““
rotork servo controles de mexico sa de cv mexico ““
rotork controls italia srl italy
 
5
rotork gears srl italy
““
manufacture and sale of gearboxes for valve actuators
rotork gears bv netherlands ““
rotork italy holdings srl italy intermediate holding company
 
6
soldo srl italy design  manufactures control accessories for valve automation
 
7
soldo controls usa inc usa ““
 
7
soldo asia pacific pte limited singapore ““
 
1
owned by rotork inc usa
 
2
owned by ranger acquisition corp usa
 
3
owned by k–tork international inc usa
 
4
owned by rotork controls iberia sl spain
 
5
owned by rotork controls italia srl italy
 
6
owned by rotork italy holdings srl italy
 
7
owned by soldo srl italy
rotork controls ltd england and wales manufacture and sale of valve actuators and intermediate holding company for 
the following
rotork uk ltd england manufacture and sale of gearboxes and valve actuators
rotork actuation shanghai co ltd china manufacture and sale of gearboxes and valve actuators
rotork trading shanghai co ltd china sale of gearboxes and valve actuators
rotork controls india ltd india manufacture and sale of valve actuators
a full list of undertakings is attached to the annual return of the company
notes to the company financial statements continued
for the year ended 31 december 2012 rotork plc annual report 2012
113
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
e c a sh at ban k a nd in hand in the c om pany bal ance sheet
2012 2011
bank balances 1074 312
cash at bank and in hand 1074 312
f debto rs due within one yea r in the c om pany bal ance sheet
2012 2011
amounts owed by group undertakings 62660 34102
other debtors 58 91
prepayments and accrued income 127 81
corporation tax 660 389
deferred taxation 249 124
63754 34787
a deferred tax asset of £249000 2011 £124000 has been recognised this asset principally relates to other timing differences in respect 
of sharebased payments the directors are of the opinion based on recent and forecast trading that the level of future and current profits 
make it more likely than not that the asset will be recovered 
g c redito rs am ount s fal lin g due within one yea r in the c om pany bal ance sheet
2012 2011
trade creditors 124 227
amounts owed to group undertakings 1052 1153
other taxes and social security 24 58
other creditors 3183 2507
accruals and deferred income 687 502
5070 4447
the company has a £20m gross overdraft facility and is part of a uk banking arrangement see note i
h c redito rs am ount s falli ng du e a fte r mo re tha n one yea r in the c om pany bala nce sheet
2012 2011
preference shares classified as debt 40 40
this debt is not redeemable at any fixed future date rotork plc  annual report 2012
114
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
i c ontin gencie s in the c om pany
the uk banking arrangements are subject to crossguarantees between the company and its uk subsidiaries these accounts are subject to 
a right of set–off the performance guarantees and indemnities have been entered into in the normal course of business a liability would 
only arise in the event of the group failing to fulfil its contractual obligations
in january 2013 the company arranged a £15m committed loan facility with a tenor of one year interest is payable on this facility at libor 
plus 1
j c apital and reserves in the c om pany bal ance sheet
share 
capital
share 
premium
capital
redemption
reserve
retained
earnings
equity
shareholders’
funds
balance at 1 january 2012 4338 7835 1644 61090 74907
profit for the year – – – 61265 61265
equity settled sharebased payment transactions net of tax – – – 1117 1117
share options exercised by employees 2 423 – – 425
own ordinary shares acquired – – – 2850 2850
own ordinary shares awarded under share schemes – – – 3135 3135
dividends – – – 33924 33924
balance at 31 december 2012 4340 8258 1644 89833 104075
details of the number of ordinary shares in issue and dividends paid in the year are given in note 17 to the group financial statements 
profit for the financial year in the accounts of the company is £61265000 2011 £28774000
k c apital risk mana gement in the c om pany
the company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to 
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure
in order to maintain or adjust the capital structure the company may adjust the amount of dividends paid to shareholders return capital to 
shareholders or issue new shares
the company’s net funds at the balance sheet date were
2012 2011
preference shares 40 40
cash at bank and in hand 1074 312
company net funds 1034 272
notes to the company financial statements continued
for the year ended 31 december 2012 rotork plc annual report 2012
115
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
c ompany information 115117
2012
£000
ifrs
2011
£000
ifrs
2010
£000
ifrs
2009
£000
ifrs
2008
£000
ifrs
2007
£000
ifrs
2006
£000
ifrs
2005
£000
ifrs
2004
£000
ifrs
2003
£000
uk gaap
revenue 511747 447833 380560 353521 320207 235688 206709 174839 146883 135964
cost of sales 272199 236359 199742 187600 176046 127748 115603 95358 79097 72046
gross profit 239548 211474 180818 165921 144161 107940 91106 79481 67786 63918
overheads 115081 99474 83094 74384 69272 52553 46017 42951 37354 36808
operating profit 124467 112000 97724 91537 74889 55387 45089 36530 30432 27110
adjusted operating profit 131866 115921 99442 92103 76014 55461 45187 36709 30502 28415
amortisation of acquired 
intangible assets 7399 3921 1718 1153 1125 74 98 179 70 –
disposal of property – – – 587 – – – – – –
amortisation of goodwill – – – – – – – – – 1305
operating profit 124467 112000 97724 91537 74889 55387 45089 36530 30432 27110
exceptional items – – – – – – – – – 597
net interest 273 550 131 621 862 1866 972 127 1074 461
profit before taxation 124194 112550 97855 90916 75751 57253 46061 36657 31506 28168
tax expense 34879 32149 28334 26884 22331 17957 14728 12043 10508 9469
profit for the year 89315 80401 69521 64032 53420 39296 31333 24614 20998 18699
dividends 33924 49534 35912 24102 29970 24732 24140 13437 17751 12592
basic eps 1031p 930p 805p 742p 620p 456p 364p 286p 245p 218p
adjusted eps 1093p 962p 819p 747p 629p 457p 365p 287p 245p –
diluted eps 1026p 926p 802p 739p 616p 452p 361p 284p 243p 217p
 adjusted is before the amortisation of acquired intangible assets and the disposal of property
the above ten year history has not been restated to apply ifrs to all periods had this exercise been undertaken the major changes would 
have been the removal of amortisation of goodwill and the introduction of amortisation of separable intangibles capitalisation and 
amortisation of development costs and charges for sharebased payments dividends shown in the ifrs columns are on a paid basis but in 
the uk gaap columns are on an accrued basis
ten year trading history rotork plc  annual report 2012
116
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
c ompany information 115117
sha re regist er info rmation
the tables below show the split of shareholder and size of shareholding in rotork plc
o rdinary shareholder by type number of holdings  number of shares 
individuals 1840 669 2620938 30
bank or nominees 834 303 82656722 952
other company 38 14 163574 02
other corporate body 37 14 1367701 16
2749 1000 86808935 1000
range number of holdings  number of shares 
1 – 1000 1578 574 581692 07
1001 – 2000 363 132 543757 06
2001 – 5000 332 120 1013757 12
5001 – 10000 147 54 1049272 12
10001 – 50000 175 64 4284624 49
50001 – 100000 45 16 3196420 37
100001  109 40 76139413 877
 2749 1000 86808935 1000
source equiniti
dividend in fo rmat ion
the table below details the amounts of interim final and additional dividends declared in respect of each of the last five years 
interim 
dividend
p
final 
dividend
p
a dditional 
interim 
dividends
p
total 
dividend
p
2012 1640 2660 – 4300
2011 1450 2275 2300 6025
2010 1275 1975 1150 4400
2009 1115 1725 – 2840
2008 925 1675 1150 3750
financial calenda r
5 march 2013 preliminary announcement of annual results for 2012
10 april 2013 exdividend date for final proposed 2012 dividend
12 april 2013 record date for final proposed 2012 dividend
26 april 2013 annual general meeting held at rotork house brassmill lane bath ba1 3jq
21 may 2013 payment date for final proposed 2012 dividend
6 august 2013 announcement of interim financial results for 2013
share register information controls
company secretary
stephen rhys jones
registered ofﬁce
rotork plc
rotork house
brassmill lane
bath ba1 3jq
company number
00578327
registrars
equiniti
aspect house
spencer road
lancing
west sussex bn99 6da
stockbrokers
ubs investment bank
1 finsbury avenue
london ec2m 2pp
citigroup global markets ltd
citigroup centre
33 canada square
london e14 5lb
financial advisers
ubs investment bank
1 finsbury avenue
london ec2m 2pp
citigroup global markets ltd
citigroup centre
33 canada square
london e14 5lb
auditors
kpmg audit plc
100 temple street
bristol bs1 6ag
financial public relations
fti consulting
holborn gate
26 southampton buildings
london ec2a 1pb
solicitors
messrs osborne clarke
no2 temple back east
temple quay
bristol bs1 6eg
corporate directory
rotork plc annual report 2012
117
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117 rotork annual report and accounts 2012
rotork plc
brassmill lane
bath
ba1 3jq
uk
t 44 1225 733200
e mailrotorkcom 
wwwrotorkcom 


Summary:
 rotork plc  annual report 2012
12
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
i am pleased to report 
another year of record order 
intake revenue and profit 
our strategy remains to grow 
both organically and through 
acquisitions and again this 
year we have extended our 
geographic reach
roger lockwood
chairman
chairman’s statement
the six acquisitions we completed in 2011 
were successfully integrated and have all 
made positive contributions during the year 
rotork instruments the division we created 
in 2011 to address the wider flow control 
market performed well and will benefit from 
the addition of soldo which we acquired in 
november 2012 following the year end in 
january 2013 we acquired the schischek 
group of companies which will form part of 
the controls division and provides us a 
presence in a new market heating 
ventilation and air conditioning hvac
rotork has a reputation for innovation and 
during the year we maintained our focus on 
bringing new products to market which 
incorporate additional features and provide 
new benefits to our customers 2012 saw the 
launch of iq3 the latest generation of our 
flagship electric actuator range as well as 
new products in each of the other divisions
financial highlights
revenue grew 14 to £512m despite a 3 
currency headwind the currency impact 
was more than offset by the benefit of a full 
year contribution from the six businesses 
acquired in 2011 meaning growth on an 
organic constant currency basis was 12 
adjusted operating profit increased by 
14 to £132m resulting in a broadly similar 
operating margin of 258 compared with 
259 the prior year the rapid growth of 
fluid systems had a dilutive effect on group 
margins even though this division generated 
adjusted operating margins in excess of its 
15 target at 153 for the full year 
earnings per share increased 11 to 1031 
pence or based on adjusted profit 
14 to 1093 pence net cash balances 
grew £11m in the year to end at £60m
board composition
in may 2012 we welcomed sally james as  
a nonexecutive director broadening the 
range of skills and experience within the 
board sally currently holds a number of 
other nonexecutive positions and 
previously held senior legal roles in 
investment banks in london and chicago 
following sally’s appointment the company 
is now compliant with the corporate 
governance code in that half the board 
excluding myself as chairman are 
independent nonexecutives we have  
also met our stated aim that 25 of  
our independent nonexecutives will be 
women by the end of 2012
board performance
once again this year we used external 
consultants to conduct an independent 
appraisal of board effectiveness the results 
of the review were positive and directors 
were unanimously of the view that the 
board operates effectively as a unit it is 
clear that the breadth of experience and 
skills represented on the board is a key 
factor in this during the review it was 
noted that a number of improvements had 
been made following last year’s review 
including the appointment of a new 
nonexecutive director and a strengthening 
of the approach to risk management and to 
acquisitions within the broader flow control 
strategy the review recognised that many 
of the challenges facing the board relate to 
managing the continued growth of the 
group whilst preserving the strengths of   rotork plc annual report 2012
13
overview 111
business review 1239
directors 4043
governance 4464
financial statements 65114
company information 115117
this project involved the 
installation of 330 iq  
and iqt atex certified 
explosionproof 
intelligent electric  
valve actuators at an 
underground natural  
gas storage plant in the 
baltic country of latvia
   
dividend history p
core dividend
additional dividend 
rotork plc 
ftse industrial engineering sector
rebased to 100 at 1 january 2007
280
240
200
160
120
80
40
0
dec 08 dec 09 dec 10 dec 11 dec 12
119
101
156
248
271
0000
0000 0000
total shareholder return
12 11 10 09 08 07 06 05 04 03 02
0000
139
148
151 59
158
182 116
217 93
260 115
284
325 115
3725 230
430
the business overall i remain satisﬁed that 
the composition of the board enables it to 
fulﬁl its expected role
corporate governance
as a board we are responsible to the 
company’s shareholders for increasing 
shareholder value over the long term 
through effective management and good 
governance the board considers all the 
aspects of the business necessary to provide 
good governance including strategy 
acquisitions current performance risk 
management and the internal control 
framework discussions include the rotork 
management board on occasions and at 
least once a year the board meeting takes 
place at one of the subsidiary sites i am 
pleased to be able to conﬁrm that rotork 
now complies with all aspects of the uk 
corporate governance code
dividend
the board recommends a ﬁnal dividend of 
266p per share which taken together with 
the 2012 interim dividend gives a payment 
of 430p per share 2011 core dividend 
3725p representing a 15 increase in core 
dividends this dividend will be payable on 
21 may 2013 to shareholders on the register 
on 12 april 2013
outlook
the strong results across the group reﬂect 
the progress we have made in executing our 
strategy with each division achieving record 
results in terms of order intake revenue and 
proﬁt
our expanded product portfolio and 
extensive international reach position us for 
further growth we will continue to invest in 
infrastructure product development and 
sales channels both organically and by 
acquisition to strengthen our presence in 
the wider ﬂow control market
the markets that we serve remain active 
and whilst we recognise that we are likely  
to see weakness within some regions due  
to economic conditions the board remains 
conﬁdent of achieving further progress in 
the coming year
roger lockwood
chairman
4 march 2013
  references to adjusted proﬁt throughout this 
document are deﬁned as the ifrs proﬁt whether proﬁt 
before tax or operating proﬁt with the amortisation of 
acquired intangibles added back