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The Weir Group PLC ExcellentAnnual Report & Accounts 2004 Engineering

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Directors’ Report

24 The Weir Group PLC Report and Accounts 2004

The directors submit their 111th annual report, together with the audited statement of accounts, for the 53 weeks ended 31December 2004.

Results£’000 £’000

The profit for the 53 weeks ended 31 December 2004, after charging taxation, was 36,881Dividends on ordinary shares:

Interim paid on 12 November 2004 7,124Proposed final 19,362 26,486

Transfer to reserves 10,395

Subject to the approval of members at the forthcoming annualgeneral meeting, the proposed final dividend of 9.35p per ordinary share will be paid on 1 June 2005 to shareholders whose names are on the company’s register at close of businesson 29 April 2005.

Principal activities, business review and future developments A review of the year’s operations and future developments iscontained in the Chairman’s Statement on pages 2 and 3, ChiefExecutive’s Review on pages 8 and 9, Operational Review onpages 10 to 19, Financial Review on pages 20 and 21. Theprincipal companies of the Group and their activities as at 31 December 2004 are set out on page 69.

Other reportsThe annual report includes a separate Corporate GovernanceStatement, which is on pages 25 to 27, Audit Committee Reporton page 28, Nomination Committee Report on page 29,Remuneration Committee Report on pages 30 to 35 andCorporate Social Responsibility Report on pages 36 to 38.

DirectorsThe names of the current directors of the company are set out onpages 22 and 23. Stephen King was appointed to the Board on 3February 2005. The directors who retire this year by rotation areJames Cox, Professor Ian Percy and Mark Selway. In accordancewith article 97 of the Articles of Association of the company,Stephen King also retires at the forthcoming general annualmeeting, and, being eligible, offers himself for election. ProfessorIan Percy and Mark Selway offer themselves for re-election.Stephen King and Professor Ian Percy do not have service contractswith the company or any of its subsidiaries. James Cox, who hasserved on the board since 2000, has decided not to seek re-electionat the annual general meeting in May 2005.

Share capitalDuring the year, options were exercised by participants in thecompany’s share option schemes as a consequence of which2,361,603 ordinary shares of 12.5p each were allotted and issued.Details of the options outstanding under each of the company’sshare option schemes at the end of the year are set out in note 19 to the accounts.

Substantial shareholdersThe company has been notified of the following interestsrepresenting 3% or more of the issued ordinary share capital of the company as at 21 March 2005:

Number Percentageof shares Holding

Fidelity International Ltd and FMR Corp 24,832,829 12.0%Newton Investment Management Limited 14,807,285 7.15%Standard Life Investments Limited 11,708,817 5.66%Legal & General Investment Management Limited 7,530,550 3.64%

Annual general meeting The annual general meeting will be held on 11 May 2005. Aseparate letter has been sent to all shareholders containing theNotice of Meeting and the resolutions to be proposed.

Auditors A resolution to re-appoint Ernst & Young LLP as the company’sauditors will be put to the forthcoming annual general meeting.

By order of the BoardGlasgow Alan W F Mitchelson21 March 2005 Secretary

The Weir Group PLC Report and Accounts 2004 25

Corporate Governance Statement

The Combined CodeThe company remains committed to the highest standards ofcorporate governance and manages its affairs in accordance withthe Combined Code on Corporate Governance (the ‘CombinedCode’) issued by the Financial Services Authority in July 2003.During the 53 weeks ended 31 December 2004, the companycomplied with the Combined Code provisions. This statementdescribes how the company has applied the main and supportingprinciples of the Combined Code.

The Board The Board comprises the chairman, Group chief executive, finance director, corporate services director and currently six non-executive directors, all of whom are independent. The Boardmeets regularly throughout the year with ad hoc meetings asnecessary. In the year to 31 December 2004 the Board met ninetimes. Meetings are held at the head office in Glasgow, London at the time of the company’s annual and interim announcementsand at operating locations. The following table identifies thenumber of Board and Committee meetings held during the past year and the attendance record of individual directors.

Committee MeetingsBoard

Meetings Audit Remuneration Nomination

No. of meetings in year 9 3 5 4

Sir Robert Smith 9 4Mark Selway 9 4Christopher Clarke 9 3 5James Cox2 8 1 5Michael Dearden 9 3 5 4Alan Mitchelson 9Professor Ian Percy3 9 3 1 4Chris Rickard 9Lord Robertson4 7 3Note 1. Ian Boyd attended 7 board meetings during the year until his retirement on 31

August 2004.

Note 2. James Cox served on the Audit Committee until 3 February 2004.

Note 3. Ian Percy served on the Remuneration Committee until 3 February 2004.

Note 4. Lord Robertson joined the Board on 1 February 2004.

Directors appointed to the Board other than at an annual generalmeeting of the company are required to retire at the followingannual general meeting when they may offer themselves forelection. One third of the remaining members of the Board (or,where that number is not a whole number, the nearest lowerwhole number) are required to retire by rotation, subject to alldirectors submitting themselves for re-election at least once every three years.

On joining the Board, directors are provided with documentationon the company and its activities. New directors are providedwith an appropriate induction programme and site visits arearranged to major business units. Ongoing training is provided as necessary. The formal process for evaluating the performance of the Board, introduced in 2003, is undertaken annually. This process is conducted internally based on a detailedquestionnaire completed by each director and individual andcollective discussions. The senior non-executive director, as part ofthis appraisal process, also meets with the other non-executive

directors as a group to discuss their thoughts on boardeffectiveness. Additionally, a one-to-one appraisal of all boardmembers is undertaken annually, including the chairman, whoseappraisal is carried out by the senior non-executive director. The evaluation examines the balance of skills of the directors, the operation of the Board in practice including its corporategovernance and the operation and content of board meetings.The findings are used to assist the Board in its consideration of the opportunities for improvement in the performance of theBoard and directors generally.

During 2004, the Board also conducted an internal review of the effectiveness of the Audit, Nomination and RemunerationCommittees incorporating a questionnaire covering such matters asthe role and organisation of each Committee, meeting arrangements,information provision and effectiveness. Following completion of these questionnaires by the members of each committee, thechairman met with the respective chairmen of the Audit andRemuneration Committees to discuss the feedback. The results of this evaluation were reported to the Board and, where areas for improvement had been identified, actions were agreed.

There is an agreed procedure for directors, where appropriate, to take independent professional advice on any matter at thecompany’s expense. The company secretary is responsible forensuring that board procedures are followed and all directors have direct access to the advice and services of the companysecretary. The company secretary is also responsible for facilitatingthe induction and professional development of the board membersand information flows within the Board, its committees andbetween the non-executive directors and senior management.

There is an agreed list of matters which requires to be authorised by the Board, such as the approval of the Group strategic plan,Group budget and risk management strategy. Major acquisitions and disposals, as well as major capital spend, are authorised by theBoard and are subsequently monitored by the Board after execution.The Board also approves the issue of full year and interim accounts.

All directors bring their own independent judgement to all majormatters affecting the Group. The views of executive directors arenot limited to those operational or functional areas for whichdirectors have prime responsibility. Board and committee papersare sent to directors in sufficient time before meetings and anyfurther back-up papers and information are readily available to alldirectors on request to the company secretary. The chairmanensures that non-executive directors are properly briefed on anyissue arising at board meetings and non-executive directors haveaccess to the chairman at any time.

The roles of chairman and chief executive are separated. The chairman’s primary role is to ensure that the Board is effective in its task of setting and implementing the company’sdirection. The chief executive is responsible for management of the business and developing the appropriate organisationalstructure for a global organisation. The chief executive chairs the Group Operations Executive Committee.


During the year the chairman was appointed chairman of Scottishand Southern Energy plc with effect from January 2005 and non-executive director of 3i Group plc. He ceased being a BBC Governorat the end of 2004. The Board has reviewed the chairman’songoing commitments and is satisfied that he has sufficient timeavailable to meet all his obligations. The chairman has constantlydemonstrated full commitment to his responsibilities at the WeirGroup and has always made himself available when circumstancesrequire additional time commitment.

The non-executive directors are independent of management.None of the non-executive directors has any material business orother relationship with the company. Each member of the Boardhas considerable experience at senior level in other companies,which allows for well informed and broadly based debate. TheBoard structure ensures that no individual or group dominates the decision-making process. Professor Ian Percy has beendesignated the senior non-executive director to whom any concerns can be conveyed.

The executive directors have contracts of service with one year’snotice whilst non-executive directors are appointed on arotational basis for periods of up to three years.

Board committeesWhere appropriate, matters are delegated to board committees, all of which have written constitutions. The current terms ofreference are available on the company’s website. The companysecretary acts as secretary to all these committees.

The principal board committees are the Audit Committee, theNomination Committee and the Remuneration Committee (details of which are contained on pages 28 to 35).

Other committees:General Administration CommitteeThe principal duties of the General Administration Committee areto allot shares under the various share option schemes and othermatters of a routine nature. The Committee comprises executivemembers of the Board and meets as required.

Executive direction and controlThe Group Operations Executive Committee is responsible forensuring that each of the Group’s businesses is managed effectivelyand that the operational objectives of the Group, as approved bythe Board, are achieved. Its role includes the preparation of theGroup budget for approval by the Board, management of businessperformance to achieve the Group budget, establishing andmaintaining reporting systems providing clear and consistentinformation on all aspects of business performance, managing and minimising corporate risk and ensuring that the necessarymechanisms are in place to achieve effective inter-divisionalcoordination in areas such as purchasing, branding and careerdevelopment planning. It also approves major items of capitalexpenditure within limits authorised by the Board. The GroupOperations Executive Committee meets each month. Itsmembership comprises the chief executive, finance director,corporate services director and the five divisional managingdirectors. In the year to 31 December 2004, the Group Operations Executive Committee met 12 times.

Principles of business conductAs an international company, the Group’s approach to maintaininghigh ethical standards is critical to its business success. The Group’sOperating Policies which provide guidance in this area have beencommunicated throughout the Group through its intranet. A copyis available from the Group secretariat.

ShareholdersThe company maintains regular dialogue with its shareholders.The investor relations programme includes formal presentations of full year and interim results. Feedback from these presentationsis reported to the Board, which gives investors an opportunity tocomment on the quality of the communications they receive intheir contact with the chief executive and finance director.Attendees at the results presentation include the chairman, the executive directors and the senior non-executive director. The company also encourages communication with privateshareholders throughout the year and welcomes theirparticipation at shareholder meetings. In addition to thechairman’s statement at the annual general meeting, a tradingupdate to shareholders is given and details of the company’strading activities are on display at the annual general meeting.The board members attend the annual general meeting and, in particular, the chairmen of the Audit, Remuneration andNomination Committees are available to answer questions.

Notice of the annual general meeting is sent to shareholders atleast 20 working days before the meeting. Details of the proxyvotes for and against each resolution are announced after theresult of the votes of the members present and are published on the website after the annual general meeting.

CommunicationsThe Board considers that the annual report and accounts and interimstatements present a balanced and understandable assessment of theGroup’s performance and prospects. In addition to information whichany company is under a legal or regulatory requirement to publish,the Group frequently publicises other business developments throughthe national or specialised press or in its own newspapers andbulletins which have wide circulation.

The company’s website at www.weir.co.uk provides additionalcompany information, is regularly updated and includes thepresentations to shareholders given at the announcements of the full year and interim results. The website also contains anonline version of the notice of the annual general meeting, the annual report and accounts and the interim report.

Internal controlIn accordance with the Turnbull Guidance on internal control, the Board ensures that there is an ongoing process for identifying,evaluating and managing the significant risks faced by Groupcompanies. This process has been in place throughout 2004 and up until the date of this report.

As part of these procedures, senior executives at each of the Groupoperating companies and businesses prepared Risk and ControlFrameworks for their respective businesses. These frameworks were considered and approved by the chief executive, the financedirector and the Group Operations Executive Committee. Inaddition, a Group Risk and Control Framework was prepared,taking account of the significant risks identified by the individual

Corporate Governance Statement (Continued)


business units together with other Groupwide risks. The GroupRisk and Control Framework has been considered and adopted bythe Board which is responsible for the risk management strategy. The system of internal control is designed to manage, rather thaneliminate, the risk of failure to achieve business objectives and canonly provide reasonable, but not absolute, assurance againstmaterial misstatement or loss.

In addition, the senior executives of each operating company,who are responsible for the operation of key internal controls,assess the effectiveness of the internal control environment andprocedures in their business and a peer review process monitorsand evaluates the system of internal control. This process coversthe areas of most significant risk to the Group and the annualreview programme is developed from feedback from both theexternal audit risk assessment planning process and the internalrisk assessment priorities. The results of these reviews are reportedto the Audit Committee. The Audit Committee considers anddetermines relevant action in respect of any control issues raisedby the external auditors.

The Group Risk and Control Framework is part of the Core ProcessReporting with updates to business risks reported twice per year.

At the commencement of each year, targets for improvement areset at both company and divisional level and progress monitoredby the Group Operations Executive Committee.

Twice per year, the operating companies prepare a reportidentifying the relative probability and severity of the risksidentified, the process for managing and mitigating these risksand the means by which management might be assured that the processes are effective.

The reports are reviewed by the Group Operations ExecutiveCommittee and the chief executive reports to the Board on thecontrol issues arising from these processes and such amendmentsas are thought appropriate are made.

The Board has monitored the effectiveness of the Group’s systemof internal control during the year.

In addition to the Group Risk and Control Framework, otherprocedures which are fundamental to the Group’s system ofinternal control are as follows:

– Control environment There is a clearly defined organisational structure within which individual responsibilities are identified and monitored.Businesses follow well understood procedures and are requiredto comply with them.

– Main control proceduresThe Group has identified a number of key areas which aresubject to regular reporting to the Board. These controlsinclude procedures for seeking and obtaining approval formajor investments and transactions.

– Group-wide standardsThere are, for application throughout the Group, OperatingPolicies and a standards manual which set out policies andprocedures with which all Group companies are required tocomply. The manual is communicated to all Group operatingcompanies through the Group intranet.

The managing directors are responsible for ensuring thateach company observes and implements the policies and procedures set out in the manual which was reviewedin 2004.

– Information systemsThere is a comprehensive budgeting system in place with anannual budget approved by the Board. Management informationsystems provide directors with relevant and timely reports thatidentify significant deviations from approved plans and includeregular re-forecasts for the year.

The Group’s internal control procedures described in this sectionhave not been extended to cover its interests in Joint Ventures and Associates. The Group has board representation on each of its Joint Venture and Associate companies where separate systemsof internal control have been adopted.

Going concernWith regard to the basis on which the accounts of the Group have been prepared, the directors state that, after making all dueenquiries, they have a reasonable expectation that the Group hasadequate resources to continue in operational existence for theforeseeable future. Therefore, in preparing the accounts theycontinue to adopt the going concern basis.


Audit Committee Report

The Audit Committee is charged with responsibility to the Boardfor satisfying itself, on behalf of the Board as a whole, that thefinancial affairs of the Group are conducted with openness, integrityand accountability and in accordance with such existing statutoryand regulatory provisions and codes as are applicable to theGroup and to report on these matters to the Board.

Its duties are to:

• consider the appointment, resignation or dismissal of theauditors and the level of audit fee;

• discuss with the auditors the nature and scope of the audit;

• review the draft interim and annual financial statements beforesubmission to the Board for approval;

• discuss any problems and reservations arising from the annualaudit and any matters the auditors may wish to raise;

• discuss with the auditors the Group’s system of internal financialcontrols and any auditors’ recommendations for improvement;

• consider the findings of internal investigations andmanagement’s response;

• oversee the implementation of systems for financial control andrisk management;

• pre-approve non-audit services provided by the auditor;

• review the internal audit programme and its implementation;

• review treasury policy.

The chairman of the Committee is Professor Ian Percy. The othermembers of the Committee are Christopher Clarke and MichaelDearden. The secretary to the Committee is Alan Mitchelson. TheBoard remains satisfied that Professor Ian Percy, formerly chairmanof The Accounts Commission and Audit Scotland and president ofthe Institute of Chartered Accountants of Scotland and presently chairman of Companies House, has recent andrelevant financial experience.

The Committee has the ability to call on the Group’s staff to assist intheir work and also has access to independent advice. The chairmanof the Committee receives additional remuneration for his duties,details of which are set out on page 33. The Committee meets each February, March and August and at other times as appropriate.During the March meeting the Committee undertakes a full review of the audit with the Group’s auditors.

There were three meetings in 2004. In the course of 2004, the Committee discussed the following matters:

• the Internal Control and Monitoring Programme (including the Group Risk and Control Framework);

• internal audit;

• accounting policies affecting associates;

• transition to International Accounting Standards;

• the fees for Ernst & Young for 2004.

In compliance with the Turnbull Report a review of the function of internal audit is carried out annually. While the current methodof peer group review is considered adequate and effective, theCommittee is presently considering outsourcing work for 2005 to a professional audit firm.

The Committee has introduced a policy on the appointment androle of the auditors. This includes guidelines on their appointmentwhich is subject to review at least every five years and on theirongoing work to ensure that the independence of the Group’sauditors is not threatened, particularly by the provision of non-audit services. Prior approval of the Audit Committee is requiredwhere the expected cost of non-audit services is in excess of £75,000.

The day-to-day maintenance of the Committee’s policy isdelegated to the Group finance director who in turn monitors the business units to ensure that all engagements fall within theCommittee’s guidelines. During 2004, fees payable to Ernst &Young in respect of taxation advice of £1.2m and audit andassurance services of £1m were approved by the Committee. In February 2005, the Board decided to alter its arrangements for tax services and appointed Deloitte & Touche LLP in thatcapacity, ensuring the independence of the external audit in accordance with current practice.

The Group maintains a “whistle blowing” policy in line with thePublic Interest Disclosure Act 1998 to enable employees, on aconfidential basis, to raise concerns internally in cases where theybelieve they have discovered malpractice or impropriety. This isreviewed on an ongoing basis. Complaints can be made either toline managers or directly to the company secretary who will appointan investigating officer. Action will be taken in cases where thecomplaint is shown to be justified and at all times the complainantis informed of progress and outcomes. In addition, the auditorsErnst & Young can be brought in to review procedures if appropriate.The “whistle blowing” policy is published on the Group intranet.

The Committee’s terms of reference are available from thecompany secretary on request and can also be found on thecompany’s website.

Professor Ian PercyChairman of the Audit CommitteeSigned and approved for and on behalf of the Board.21 March 2005

During 2004, the members of the Nomination Committee were Sir Robert Smith (chairman), Professor Ian Percy and Mark Selwaytogether with Michael Dearden and Lord Robertson who wereappointed to the Committee on 3 February 2004. Alan Mitchelsonacts as secretary to the Committee. The Committee meets at leasttwice a year and at other times when necessary. The Committeeuses external search consultants to assist it in its work.

The Committee primarily monitors the composition and balanceof the Board and its committees and identifies and recommendsto the Board the appointment of new directors. The Committee’sterms of reference establish a framework through which it canoperate to ensure the selection process of board candidates isconducted in a formal, disciplined and objective manner. Whenconsidering candidates, the Committee evaluates the balance ofskills, knowledge and experience of the Board and prepares adescription of the role and capabilities required for the particularappointment. The Committee also reviews the successionplanning and leadership needs of the organisation and ensuresthat, on appointment, all directors receive a formal contract orletter of appointment as appropriate.

Appointments to the Board are approved by the Board as a whole.However, it is the role of the Committee to make recommendationsto the Board in respect of the appointment of executive ornon-executive directors. The process by which the Committeebrings candidates to the Board has been agreed by the Board. Inthe case of executive directors, the Committee has recommendationspresented to it by the chief executive and thereafter nominatescandidates for consideration by the Board. The procedure for non-executive directors is that the Committee identifies andnominates candidates for consideration by the Board to fillvacancies as and when they arise.

In seeking to recruit a new non-executive director, the Boardinstructed external recruitment advisers who prepared a shortlistof candidates. Following an interview process, Stephen King, who met the independence criteria of the Combined Code, was offered and accepted the position as non-executive director.In filling any future vacancies, the Board expects to follow asimilar selection process.

During the year, the Committee reviewed the evaluation process andtraining of board members, the chairman’s appointments and othercommitments (at which the chairman was not present) andsuccession planning within the Board.

The Committee’s terms of reference are available from the companysecretary and can also be found on the company’s website.

Sir Robert SmithChairman of the Nomination CommitteeSigned and approved for and on behalf of the Board.21 March 2005

Nomination Committee Report


Remuneration Committee Report


Committee membership The chairman of the Remuneration Committee is James Cox. The other members of the Committee are Christopher Clarke andMichael Dearden. Professor Ian Percy served on the Committeeuntil 3 February 2004. The secretary to the Committee is AlanMitchelson. The Committee consists exclusively of non-executivedirectors who are independent of management and free from anybusiness or other relationship which could materially interfere withthe exercise of their independent judgement. No member of theCommittee has any personal financial interest, other than as ashareholder, in the matters decided by the Committee. NewBridge Street Consultants LLP (“NBSC”) continue to provideexternal advice in formulating remuneration policy and itsimplementation. NBSC’s appointment was renewed by theCommittee in 2005. NBSC do not undertake any other work for the Group other than remuneration work. In carrying out its business, the Committee consults with the Group chairmanand the chief executive as appropriate.

Committee responsibilities The responsibilities of the Committee are as follows:

• to determine the policy on the remuneration and performanceof executive directors of the company;

• to determine the conditions of employment, including levels of salary, pension arrangements, bonuses, incentives and shareawards of executive directors of the company;

• to determine targets for any performance-related pay schemes;

• to recommend to the Board the remuneration of the chairmanof the Board.

The Committee met five times in 2004 with full attendance at each meeting. The Committee is constituted, and operatedthroughout the year, in accordance with the relevant provisions of the Combined Code. This report complies with the Directors’Remuneration Report Regulations 2002. The Committee’s terms of reference are available from the company secretary on requestand can also be found on the company’s website. NBSC’s terms ofappointment are available on request from the company secretary.

Executive directors’ remuneration policy The objective of the company’s remuneration policy is to attract,motivate and retain executive directors with the necessary abilitiesto manage and develop the Group’s activities successfully to thebenefit of shareholders.

Accordingly, the Committee sets remuneration packages for theexecutive directors to reflect both the size and complexity of thebusiness and individual responsibilities. It also takes into considerationthe remuneration practices adopted by other companies of similarsize and international spread of operations. For all senior executives,the Group policy is to provide a significant part of their totalpotential reward through performance based incentive plans(annual bonus and long-term incentives) as described below.

In addition, to ensure the interests of management remain alignedwith those of shareholders, executive directors and the membersof the Group Operations Executive Committee are encouraged tobuild up a shareholding in the company by both the purchase ofshares and/or the retention of a proportion of their share awards.

Executive directors’ remuneration comprises the following:

a) a basic salary, which is set by the Committee for each executivedirector by reference to individual and company performancethrough a formal appraisal system. When setting base salaries,the Committee’s policy is that they should be competitive havingregard to companies of a similar size and industry practice;

b) an annual performance-related bonus. Bonus payments areintended to reflect the achievement of agreed business objectivesand positive contribution to stretching the performance of theGroup. The targets used are based primarily on normalised pre-tax profits and are set at the beginning of the financial year.In 2004, the maximum potential bonus receivable by the chiefexecutive was 85% of salary and for the other executive directors75% of salary. In 2005, the maximum bonus potential remainsunchanged. The chief executive is required to invest compulsorily25% of any bonus earned into shares for three years as part ofthe Long-Term Incentive Plan (“L-TIP”) approved by shareholderslast year. Other executive directors are required to invest 20% ofany bonus earned into shares. Compulsorily invested shares aresubject to forfeiture if the director leaves the Group within threeyears. The Committee reviews the bonuses on an annual basis.The bonuses are non-contractual and non-pensionable;

c) participation in the L-TIP, details of which are set out on thefollowing pages;

d) participation in the company’s pension plan (Chris Rickard andMark Selway are not members), details of which are set outbelow; and

e) other benefits-in-kind, which are the provision of a car and fuelor car allowance, participation in a Group health care scheme,travel allowance, death in service insurance and permanenthealth insurance. The Committee believes that the level andprovision of benefits-in-kind is consistent with that provided by other comparable companies.

PensionsAlan Mitchelson is a member of the company’s 1972 pension andlife assurance plan. The plan is a defined benefit contributory planwith the members contributing 8% of basic salary, the balance ofthe funding of the plan being met by the company having takenaccount of the funding recommendations of the plan’s independentactuary. After 20 years’ service with the Group, there is a maximumpension entitlement equal to two thirds of final basic salarypayable on normal retirement date, which is 60 years ofage. This is subject to a capping limit of pensionable salary,currently £102,000.

The plan provides life assurance cover of five times pensionablesalary for death in service. It also provides for a surviving spouse’spension of one half of the member’s pension and, in certaincircumstances, for a dependent child’s pension until the childattains the age of 18 years (or 25 years if in full time furthereducation). Pensions in payment and deferred pensions increaseby an amount equal to retail price inflation up to 5% per annum.Where life assurance benefits under the plan are restricted inrespect of any executive director by reason of the statutorycapping limit of pensionable salary, currently the company pays


for such additional life cover as is necessary to make good theshortfall. Life assurance cover is provided separately for MarkSelway and Chris Rickard who are responsible for their ownpension arrangements.

Long-Term Incentive Plan (L-TIP)During 2004, the Group’s existing long-term incentive plan, theExecutive Share Option Scheme (the “Executive Scheme”) wasreplaced by a new plan, the L-TIP. Three types of awards may bemade under the L-TIP to senior executives: Performance Shares,Matching Shares and Investment Shares:

i) Performance Shares – Performance Shares are conditional awardsto acquire free shares subject to company performance (seebelow). In 2004, conditional awards of performance shares were made worth 70% of salary to the chief executive and 45% of salary to other executive directors. It is the Committee’sintention in 2005 to make awards of the same value;

ii) Matching and Investment Shares - Matching Shares areconditional awards to acquire free shares, subject to companyperformance (see below). Executive directors are required tocompulsorily convert an element of any bonus earned for thepreceding financial year structured as an award of InvestmentShares under the L-TIP. They are also allowed to voluntarily investthe balance of the bonus (subject to any cap imposed by the Committee) in shares. Investment of bonus was entirelyvoluntary in 2004. In return, the executive directors receive a conditional award of matching shares worth a maximum of 2.5 times the pre-tax value of the bonus invested.

The value of shares for this purpose will be the average publishedclosing price of a share for the three dealing days immediatelypreceding the date of grant of the award of performance shares.

The conditional awards of performance and matching shares areonly receivable if a highly demanding performance condition isachieved. For awards granted in 2004 and for those to be awardedin 2005, the performance condition will be based on the growth in the company’s Total Shareholder Return (“TSR”) over a singlethree-year performance period (three consecutive financial years,beginning with the year in which the grant is made) relative to the growth in the TSR of a comparator group, to comprise thefollowing 20 companies: AGA Foodservice Group, BodycoteInternational, Cookson Group, Domnick Hunter Group, Enodis, FKI, Halma, IMI, Kidde, Meggitt, Mitie Group, Morgan CrucibleCompany, Rolls-Royce, Rotork, Senior, Smiths Group, Spirax-SarcoEngineering, Tomkins, Wood Group and WS Atkins. Only if thecompany’s TSR ranks in the upper quintile of this group will the full awards be receivable. This reduces on a sliding scale so that formedian performance, 25% of the awards will be receivable. Forbelow median performance, none of the awards will be receivable.

TSR has been selected as the appropriate performance criteria by theCommittee as it is felt that such a measure clearly aligns the interestsof the senior executives with those of shareholders. The TSRcalculation will be performed independently for the Committee.

In addition to TSR performance, for any of the performance andmatching shares to vest, the growth in the company’s earnings pershare over the performance period must be equal to or greater thanthe growth in the UK Retail Prices Index over the same period.

Share option schemes The company operated a discretionary executive share optionscheme (“the Executive Scheme”) under which options could begranted to those senior executives of the Group whose skills andexperience the Committee believed to be important to the successof the Group. The Executive Scheme, which was approved in1994, expired in May 2004. Under the rules of the ExecutiveScheme, share options could be granted up to a maximum valueof four times a participant’s earnings. Options were granted at themid market price of a share at the date of grant. The right toexercise an Executive Scheme option is subject to performanceconditions as determined by the Committee at the date of grant.

The performance criteria applicable in 2004 were for the growthin the company’s normalised earnings per share over a three yearperiod, to either exceed by nine per cent the growth in the retailprice index of the UK over that three year period, or exceed theweighted average growth during that three year period of thenormalised earnings per share of those companies in the FTSE All Share Engineering and Machinery sector. Under the terms ofthe Scheme, this is re-tested every year from the third anniversaryof the grant of the option to the date the option lapses.

In addition, the company operated a Savings-related ShareOption Scheme in the UK, which the executive directors wereeligible to participate in on the same terms as all other employeesand which was not subject to performance criteria. This schemewas closed in 2004.

Performance graphThe graph below compares the company’s total shareholderreturn performance over a five year period against the FTSE AllShare Engineering and Machinery Sector Index. The Committeeconsiders this index to be appropriate because its majorconstituents are, like Weir, moderately diversified engineeringgroups with a significant presence outside the UK.

Total Shareholder ReturnSource: Datastream

This chart shows the value, at the end of 2004 financial year, of £100 invested in The Weir Group PLC over the last five financial years compared with the value of £100 invested in the FTSE All Share Engineering and Machinery Sector Index. The other points plotted are values at intervening financial year-ends.

The Weir Group PLC

Engineering & Machinery Sector

020406080

100120140160180200

1999 2000 2001 2002 2003 2004

Directors’ contracts/terms of appointmentThe details of the service contracts in relation to the executivedirectors and letters of appointment in relation to the non-executivedirectors who served during the year are:

Director Date of current Unexpired Notice Period Contract/Letter Term/Next re-election by company

Sir Robert Smith 18 August 2003 May 2007 6 monthsChristopher Clarke 5 August 2003 May 2006 6 monthsJames Cox 5 August 2003 11 May 2005 6 monthsMichael Dearden 6 February 2003 May 2006 6 monthsProf Ian Percy 5 August 2003 11 May 2005 6 monthsLord Robertson 1 February 2004 May 2007 6 monthsMark Selway 6 January 2003 12 months 12 monthsIan Boyd 6 January 2003 Retired 31 August 2004Alan Mitchelson 6 January 2003 12 months 12 monthsChris Rickard 24 September 2003 12 months 12 months

Executive directors’ service contracts To recruit the best executives, the Committee has in the past andmay in the future, agree contractual notice periods which initiallyexceed 12 months particularly as it is often necessary for executivesto relocate their families. The current executive directors, MarkSelway, Alan Mitchelson and Chris Rickard, all have service contractswith the company that provide for a minimum period of notice of 6 months by the individual and 12 months by the company. In theevent that the company terminated an executive director’s servicecontract other than in accordance with its terms, the Committee,when determining what compensation, if any, should properly be paid by the company to the departing director, will give fullconsideration to the obligation of that director to mitigate any losswhich he may suffer as a result of the termination of his contract.

In the event of a change of status of the company, each of Mark Selway, Alan Mitchelson and Chris Rickard has the option, for a period of six months, of giving the company three months’notice of termination of his service contract and, in that event, theexecutive director will become entitled to a severance payment of 12 months basic salary. If the director’s 60th birthday (being hisnormal retirement date) falls within the 12 month period followingtermination, the severance entitlement will be reduced to reflect the number of months to the director’s normal retirement date.

Executive directors’ external appointmentsThe executive directors are permitted, with board agreement, totake up one non-executive appointment provided that there is noconflict of interest and that the time spent would not impinge ontheir work for the Group. Up until his retirement, Ian Boyd was adirector of Glasgow Income Trust plc. The remuneration received byIan Boyd in respect of this role was retained by him and is as follows:

Directorship Received Retained

Ian Boyd Glasgow Income Trust plc £10,000 £10,000

None of the executive directors has a non-executive appointment.Remuneration from any external appointments in the future will bepassed to the company.

Non-executive directors letters of appointmentThe chairman and each of the non-executive directors have letters of appointment. The letters of appointment do not containany contractual entitlement to a termination payment and thedirectors can be removed in accordance with the company’sArticles of Association. All non-executive directors are subject tore-election by shareholders at least every three years.

Remuneration of non-executive directorsThe fees for non-executive directors are determined by the Boardwithin the limits stipulated in the Articles of Association. The feescomprise a basic fee together with a further fee for chairmanship ofa committee. Fees are reviewed by the Board, with a view to settingthem in line with general market practice, as identified in availablemarket surveys. The non-executive directors do not participate inany of the company’s incentive plans and receive no pension orother benefits. The non-executive directors are not involved in any discussions or decisions about their own remuneration.

The remuneration of the non-executive directors is determined bythe Board, the non-executive directors taking no part in thatdetermination. The remuneration of the chairman of the Board isdetermined by the Board on the recommendation of theCommittee, the chairman taking no part in that determination.

Non-executive directors’ fees were reviewed in 2004 and the basic fee is now £32,000 per annum. In addition each of thechairmen of the Audit Committee (Professor Ian Percy) and theRemuneration Committee (James Cox) are paid an additional fee of £5,000. Professor Percy also receives a further £5,000 in his role as senior non-executive director.

Remuneration Committee Report (Continued)



Directors’ remuneration #Salary Benefits Total Total& Fees Bonus (see note v) 2004 2003

Notes £ £ £ £ £

Chairman and non-executive directors:

Sir Robert Smith 134,167 - 342 134,509 130,342Christopher Clarke 31,167 - - 31,167 27,000James Cox i 36,167 - - 36,167 32,000Michael Dearden 31,167 - - 31,167 23,430Professor Ian Percy ii 40,333 - - 40,333 32,000Lord Robertson 29,333 - - 29,333 -2003 retirees - - - - 22,500

302,334 - 342 302,676 267,272

Executive directors:

Ian Boyd iii 169,210 - 8,618 177,828 318,056Alan Mitchelson 262,954 - 10,981 273,935 248,026Chris Rickard iv 304,207 - 314 304,521 -Mark Selway 477,080 - 6,726 483,806 612,627

1,515,785 - 26,981 1,542,766 1,445,981

Previous year comparatives 1,135,031 271,912 39,038

(i) The fees for James Cox include £5,000 for services as chairman of the Remuneration Committee (2003: £5,000).

(ii) The fees for Professor Ian Percy include £5,000 for services as chairman of the Audit Committee (2003: £5,000) and £4,167 for his role as senior non-executive director (2003:nil).

(iii) Ian Boyd retired on 31 August 2004.

(iv) Chris Rickard was appointed on 19 January 2004.

(v) Benefits include, as appropriate, a car and fuel or car allowance, participation in a Group health care scheme, travel allowance and death in service insurance.

Directors’ pension benefits #

The under noted directors were members of a defined benefit scheme provided by the Group during the year. Chris Rickard and Mark Selwayare responsible for their own pension provision. Pension entitlements and corresponding transfer values were as follows during the year:

Disclosures under Directors’ Remuneration Report Regulations 2002 Listing Rules

Accrued pension Transfer value of accrued pension

Change during Increase the year net in accrued Transfer value

Increase of directors’ Directors’ pension during of increase Name of General Specific At year during At year At year ordinary ordinary At year the year (net (net of Director Notes Notes start the year end start contributions contributions end of inflation) inflation)

Contributing members: (note 1) (note 2) (note 3)

Ian Boyd 4,7 6 149,633 5,678 155,311 2,685,886 293,085 12,502 2,991,473 1,938 24,983

Alan Mitchelson 4,7 5 11,963 3,195 15,158 167,562 62,865 8,100 238,527 2,897 37,483

# Audited

Directors’ interests The interests of the directors in the ordinary shares of the company as at 31 December 2004 and at the end of the preceding financialyear were as follows:–

Remuneration Committee Report (Continued)


As at 31 December 2004 As at 26 December 2003 iii

shares shares under option L-TIP awards shares shares under option

Sir Robert Smith 50,000 - - 50,000 -Christopher Clarke 10,000 - - 10,000 -James Cox 50,000 - - 50,000 -Michael Dearden 10,000 - - 10,000 -Alan Mitchelson 42,392 91,344 47,166 34,000 135,094Prof Ian Percy - - - - -Chris Rickard - 180,000 40,132 - -Lord Robertson - - - - -Mark Selway 30,049 603,497 142,801 21,798 603,497

(i) At the date of this report the interests of the directors in the shares of the company remain as stated above.

(ii) No director had, during or at the end of the year, any material interest in any contract of any significance in relation to thecompany’s business, in any debenture stocks of the company, or in the share capital or debenture or loan stocks of any subsidiary.

(iii) In the case of Lord Robertson and Chris Rickard, the comparative figures are as at the dates of their appointment to the Board.

1.The pension entitlement shown is that which would be paidannually on normal retirement, prior to any cash commutation,based on pensionable service to the end of the year, or earlierdate of retirement.

2.The transfer value of the increase in accrued pension has beencalculated on the basis of actuarial advice in accordance withActuarial Guidance Note GN11 and includes an allowance forthe risk cost of death in service benefits less the director’sordinary contributions over the year.

3. The change in the amount of the transfer value over the year is made up of the following elements:

a. transfer value of the increase in accrued pension (net of inflation);

b. transfer value of the increase in accrued pension (due to inflation);

c. increase in the transfer value of accrued pension at year startdue to ageing;

d. impact of any change in the economic or mortalityassumptions underlying the transfer value basis;

e. less the director’s ordinary contributions.

The change in the amount of the transfer value over the yearincludes the effect of fluctuations in the transfer value due to factors beyond the control of the Group and directors, such as stockmarket movements which will be reflected within d. above.

4.Directors have the option to pay voluntary contributions.Neither the contributions nor the resulting benefits are included in the above table.

5.The figures for Alan Mitchelson allow for the impact of theearnings cap. Alan Mitchelson does not have an entitlement to an unapproved pension from the Group.

6. Ian Boyd retired at his normal retirement date (age 60) inAugust 2004. The figures are determined from his actualpension at normal retirement date, prior to cash commutation.

7. Payments of actual transfer values (from the defined benefitscheme of which Ian Boyd and Alan Mitchelson are members)are currently reduced below 100% of their value. The figuresabove do not reflect this reduction.


Directors’ share incentives#

Shares Shares subject tosubject to options granted Shares subject to Earliest date Date optionoptions at (exercised) options at Exercise normally normally

Director 26/12/03 during year 31/12/04 price exercisable lapses

Executive Share OptionsIan Boyd 100,000 (100,000) - 261p - -

40,000 (40,000) - 234p - -25,000 - 25,000 239p 25/3/00 25/3/0755,350 - 55,350 246.5p 29/3/02 29/3/0925,000 - 25,000 197.5p 5/4/03 5/4/1085,400 - 85,400 251.5p 26/3/04 26/3/1130,000 - 30,000 262.5p 27/8/05 27/8/12

Alan Mitchelson 43,750 (43,750) - 197.5p 27/3/03 27/3/1032,800 - 32,800 251.5p 26/3/04 26/3/1150,000 - 50,000 262.5p 27/8/05 27/8/12

Chris Rickard - 164,835 164,835 273p 1/4/07 1/4/14- 15,165 15,165 295.75p 22/4/07 22/4/14

Mark Selway 150,000 - 150,000 282.5p 3/9/04 3/9/11450,000 - 450,000 262.5p 27/8/05 27/8/12

Savings-related Share OptionsIan Boyd 4,286 (4,286) - 226p - -Alan Mitchelson 8,544 - 8,544 197.5p 1/7/05 1/1/06Mark Selway 3,497 - 3,497 201p 1/7/06 1/1/07

L-TIP awardsAlan Mitchelson - 47,166 47,166 iv 11/6/07 11/9/07Chris Rickard - 40,132 40,132 iv 11/6/07 11/9/07Mark Selway - 142,801 142,801 iv 11/6/07 11/9/07

(i) On 2 June 2004, Alan Mitchelson exercised options over 43,750 shares at a price of 197.5p under the Executive Share Option Scheme.The market price on the date of exercise was 295p. After payment of tax, the total balance was used to acquire 8,392 shares.On 25 March 2004, Ian Boyd exercised options over 100,000 shares at a price of 261p under the Executive Share Option Scheme.The market price on the date of exercise was 280p. On 1 July 2004, Ian Boyd exercised options over 4,286 shares at a price of 226punder the Savings-related Share Option Scheme. The market price on the date of exercise was 285.5p. On 4 October 2004, IanBoyd exercised options over 40,000 shares at a price of 234p under the Executive Share Options Scheme. The market price on the date of exercise was 281.5p. The aggregate gains made on all option exercises by serving directors during the year total £64,200.

(ii) The closing market price of the shares at 31 December 2004 was 321.5p and the range for the year was 244.75p to 322p. The prices on the days that options were granted to Chris Rickard were 273p and 295.75p. The range from the earliest of those dates to the year end was 270.25p to 322p.

(iii) Since 2000, the exercise of options granted under the Executive Share Option Scheme is subject to the growth of the company’snormalised earnings per share over a three year period, either exceeding by nine per cent the growth in the retail price index of theUK over that three year period, or exceeding the weighted average growth during that three year period of the normalised earningsper share of those companies in the FTSE All Share Engineering and Machinery sector. Between 1994 and 1999, the growth in theretail price index was required to be exceeded by six per cent.

(iv) The number of awards shown under the L-TIP is subject to achieving the performance conditions referred to on page 31 under boththe Performance and Matching Plan. The figures shown are maximum entitlements and the actual number of shares (if any) willdepend on the performance conditions being achieved. Awards take the form of nil cost options and have no performance retestingfacility. The market price on 11 June 2004 was 307p. No shares have vested as at 31 December 2004.

(v) Ian Boyd’s options under the Executive Share Option Scheme will lapse on 25 February 2006 or six months after the lastperformance criteria has been satisfied whichever comes later.

# Audited

James CoxChairman of the Remuneration CommitteeSigned and approved for and on behalf of the Board21 March 2005

Corporate Social Responsibility Report


Our approachThe Weir Group is a global organisation, working in sectors andindustries that have a significant impact on human and naturalresources. As an organisation, our core values include integrity,self-determination and valuing people. These values ensure weremain focused on meeting our responsibilities to our customers,suppliers, employees and shareholders, as well as to thecommunities where we work.

By ensuring that corporate social responsibility is an inherent part of leadership that crosses all boundaries in our organisation,we seek to combine business success with support for people,communities and the environment. We recognise that corporatesocial responsibility requires us first and foremost to listen to our external and internal customers in everything we do and to respond to their needs through the enduring excellence of our policies and processes.

In line with this philosophy, we pursue excellence through ourglobal Environmental, Health and Safety Forums whose goal is to eliminate work-related injuries, prevent pollution, conserveresources, comply with regulatory requirements and improveperformance. These annually review our performance in theseareas, collect data, share best practice and plan for the comingyear. In turn, these plans are disseminated and included withinindividual business plans throughout our operations. This ensuresconsistency in performance measurement and improvementactivities. Forum members also perform cross company safetyaudits to identify practices that are working well and areas forimprovement. Concern reports are used to track completion of corrective actions.

Throughout 2004, the Group Operations Executive Committeereviewed the safety, quality and environmental performance againstobjectives set for 2004. The primary objectives are to reduceaccidents in the workplace and maintain high standards ofenvironmental management in all of our activities.

WorkplaceSafety has the highest priority within Weir. The Group’s policy onhealth and safety requires that all our companies take a responsibleattitude to the protection of their employees’ health and safety.

All companies carefully evaluate risks to personnel wherever theyare working and take appropriate steps to minimise such risks.These include ensuring that project design engineers considerdesign factors that minimise or eliminate the risk of accidents topersonnel during site installation and commissioning. All Groupcompanies are required to comply with the legislation governinghealth and safety at work and to conduct regular formal health andsafety reviews at plant and site level. These reviews are undertakenby nominated managers and employees to ensure that risks areproperly evaluated, events leading to accidents are examined andappropriate remedial or avoidance action initiated and subsequentlymonitored. Formal reporting procedures have been implemented sothat the safety performance of individual companies is monitoredand peer-to-peer audits are conducted in order to provide a criticalassessment of each company’s performance.

We involve and inform our employees as much as possible. Given the diverse nature and geographical spread of ouroperations, it would be inappropriate and impractical to apply uniform procedures Group-wide and each company istherefore responsible for achieving and maintaining appropriateconsultation and communication with their employees. Throughthe production and distribution on a regular basis of printed andelectronic newspapers and bulletins for employees to promoteawareness of current progress and developments within theGroup we communicate generally with employees.

The Group gives full and fair consideration to employmentapplications from disabled persons. Where an employee becomesdisabled, arrangements are made wherever practicable to continueemployment by identifying an available job suited to that person’scapabilities and providing any necessary retraining. The Group’scareer development programme encourages disabled employeesto reach their full potential.

Weir Hazleton in the United States has just completed avoluntary safety programme. It took two years and over 4,800hours of meetings and training to achieve the required standard.

Through changes in workplace practices and attitudes, WeirCanada has experienced a 46% decrease in minor injuries.

New policies have been introduced this year at Weir Materialsand Foundries in the UK including a Policy on Work RelatedStress, a revised policy on Hand Arm Vibration syndrome and a Policy on Substance Abuse.

The Group has experienced a 75% reduction in the number ofLost Time Accidents (LTAs) over the last four years. In the last yearLTAs have reduced by 48%. The increased focus on this importantarea included full investigations of all accidents being carried outand reported at the Group Operations Executive Committeemeetings. Year on year the companies who have the highestnumbers of accidents are audited by our insurers to ensure that the proper systems and processes are in place. The reduction canalso be attributed to improvements in education and training andadoption of Lean manufacturing principles. In 2005, we are focusingnot only on accidents, but on near misses to further improve thesafety culture that is being engendered across the Group.

Lost Time Accidents 2001 - 2004

0

50

100

150

200

250

300

350

2001

Total 314 80155212

2002 2003 2004


Environment• Weir Group is committed to the protection of the environment

in which all its companies operate.

• Each Weir company will comply with the relevant regulatoryrequirements applicable to its business.

• Each Weir company will ensure that it is seen to be a goodcitizen in the community in which it operates and adoptpractices aimed at minimising the environmental impact of its operations.

The Group’s environmental policy is the responsibility of theBoard, while its implementation is the responsibility of divisionalmanaging directors. Each Weir division is required to report onenvironmental performance and maintain environmentalmanagement practices.

As stated in last year’s Report, we have been committed toachieving ISO 14001 accreditation for all companies and this has now been achieved.

At Weir, we recognise the wider benefits that accreditation canbring. The three processes of ISO 14001 - to set objectives,implement the programme and monitor progress - are cyclicaland continuous and ensure best environmental practice. ISO14001 creates a culture where environmental considerations areactively managed rather than merely observed or avoided.

An effective environmental management system certified to ISO14001 helps the Group operate in a safer, more cost-efficient andenvironmentally responsible manner while also complying withrelevant environmental legislation.

The key benefits associated with implementing a certifiedenvironmental management system are:

• demonstrating conformance;• management confidence;• approved management of environmental risk;• independent assessment;• compliance with legislative and other requirements;• continual performance improvement;• cost reductions;• supply chain benefits.

Initiatives undertaken by Weir Group companies during 2004 include:

• Weir Valves & Controls UK now uses the heat generated by thecompressors to heat goods inwards and has fitted light sensitivecells in the main workshop to minimise the lighting usage.

• At Weir Warman Australia the solid waste generated by itsoperation includes metal, paper, cardboard, rubber and timberwaste. At the beginning of 2004, they set a target to achieve5% reduction of solid waste but achieved 17% throughelimination of activities that generate waste and subsequentrecycling projects. Liquid waste has been reduced by 50% in 2004 by improving the efficiency of waste water recyclingthrough maintenance and installation of a more efficient oilwater separation unit.

• Within Weir Valves & Controls USA they recycle wood,cardboard and office paper and in 2004 recycled approximately48 tons of wood.

• At Weir Specialty Pumps in the United States a reduction inVolatile Organic Compound emissions of 15% was achieved. At Rubber Engineering the reduction was 33%. Over the lastthree years the annual water usage has decreased from an average of 50 million gallons per year, to less than 30 million gallons per year.

• At Weir Canada improvements to drains and water treatmentto eliminate contamination to waste waters has resulted in a50% reduction in water consumption.

• As part of a group of 28 manufacturers, Weir Floway in Fresno,California, is involved in the Water Cluster, which aims to raiseawareness of water technology as one of the ways of resolvingthe world’s water problems. Weir Floway is involved in thedesign and layout of a testing and certification laboratory.

• During 2004, Weir Netherlands was involved in the productionof a High Concentration Slurry Disposal system commissionedby electricity producers to move fly ash from silos at a powerplant in Calcutta to a landfill area more than 2km away on the banks of the River Ganges. Also with English Partnerships,the agency responsible in the UK for the Land StabilisationProgramme, Weir Netherlands is supplying pumps for theproject to stabilise four abandoned salt mines filled withconcentrated brine.

Community During the year, Group companies were involved in numerouscommunity, social and cultural initiatives. Causes, events andcharities are often nominated and supported by our employees,reflecting their own interests and social engagement. Weparticipate in a range of educational and training initiatives,including a programme involving Weir Pumps to raise industrial awareness in schools through Scottish Business in the Community, engineering support for the Young Enterprisescheme, work experience placements for school children and an accessible and well-respected apprenticeship scheme.

Weir Materials and Foundries in the UK has been involved in avariety of community projects including providing facilities for thetraining of police dogs, and the specialist training of the GreaterManchester Search and Rescue training group.

Weir-EnviroTech in South Africa through its Social ResponsibilityCommittee donated money to be used to educate 193 children ofWeir-EnviroTech employees. For the past 10 years the companyhas been funding a number of community related projects.

In the United States, Weir Slurry North America runs an annualcampaign to assist United Way, an organisation involved inproviding respite and crisis child care for parents and promotingindependence for people with physical disabilities. They alsosupport Second Harvest Foodbank of Southern Wisconsin, one of200 affiliate food banks of America, the largest domestic hunger-relief organisation.

Corporate Social Responsibility Report (Continued)


Weir Canada has established a programme of communityinvolvement, health, safety and environmental awareness andworkforce diversification. This includes involvement with localcolleges for trades training and job placements and also withinlocal schools the company provides a work experience and jobshadowing programme.

Weir Strachan & Henshaw in the UK supports school industrydays and is involved in mentoring within schools giving pupils realtime practical experience. It operates a graduate training schemein order to ensure a supply of well qualified chartered engineers into the business and supports the graduate training schemes of other organisations.

Charitable contributions

During the year Group companies made the followingcontributions:

The Weir Group Educational Trust £15,000

Other charitable (being specifically health, heritage,educational and community) purposes £96,249

The Group made no political contributions during the year.

MarketplaceIn 2004, Management Today, a UK management journal, inconjunction with Nottingham Business School published the results of a survey of the UK’s most admired companies. The surveyevaluated companies under such criteria as quality of management,products and services and financial soundness. Weir Group came 14thoverall and second within the Engineering and Machinery sector.

We recognise that our corporate social responsibility also reflectsin the way we behave towards our suppliers. The Group does notoperate a standard policy in respect of payments to suppliers.Each operating company is responsible for agreeing the terms and conditions under which business transactions are conducted,including the terms of payment. It is Group policy that payments

to suppliers are made in accordance with the agreed terms. At 31December 2004, the Group had an average of 62 days’ purchasesoutstanding in trade creditors.

Many Weir companies are collaborating closely with suppliers to address environmental impacts throughout the supply chain,particularly in areas such as raw materials, packaging andrecycling, to our mutual benefit.

Weir Strachan & Henshaw in the UK has developed a core of'Local Suppliers and Service Providers' who support its production and site maintenance needs. These include machinists, painters,cleaners, non-destructive testing, heat treatment, plating andmany others. The use of the local supply chain reduces greatlyenergy expenditure through fuel use. They also use 'Charity'registered organisations such as the Royal School for the Blindwho hold Third Party ISO registration in support of their activities.In addition, they regularly facilitate 'Supplier Forums' for their supply chain at which their aims, objectives and targets are shared.

Research and developmentResearch and development has a vital role to play in meeting ourcorporate social responsibilities. The development of new productsthat are more environmentally benign in both manufacture andoperation and the substitution of harmful materials, offerscompetitive advantage to ourselves and to our customers.

We recognise that many of our products are themselves contributorsto environmental protection in critical areas such as powergeneration, nuclear handling and subsea oil and gas exploration. We are therefore investing in research and development tocontinuously improve their performance.

2005 will see continued investment in design, research anddevelopment in which our corporate social responsibility and business objectives are closely aligned.

Directors’ Responsibilities

Directors’ responsibilities Company law requires the directors to prepare accounts for eachfinancial period which give a true and fair view of the state ofaffairs of the company and of the Group and of the profit or lossof the Group for the period. In preparing these accounts, thedirectors are required to select suitable accounting policies andthen apply them consistently, make judgements and estimatesthat are reasonable and prudent and state whether or notapplicable accounting standards have been followed.

The directors are responsible for keeping proper accountingrecords which disclose with reasonable accuracy at any time thefinancial position of the Group and which enable them to ensurethat the accounts comply with the Companies Act 1985. They arealso responsible for safeguarding the assets of the company andhence for taking any reasonable steps for the prevention anddetection of fraud and other irregularities.


Independent Auditors’ Report

Independent auditors’ report to the members of The Weir Group PLCWe have audited the Group’s accounts for the 53 weeks ended 31 December 2004 which comprise the Accounting Policies,Consolidated Profit & Loss Account, Balance Sheets, Cash FlowStatement, Reconciliation of Net Cash Flow to Movement in Net Funds, Statement of Total Recognised Gains & Losses,Reconciliation of Movements in Shareholders’ Funds, the relatednotes 1 to 27 and Principal Companies of the Group. Theseaccounts have been prepared on the basis of the accountingpolicies set out therein. We have also audited the information in the Remuneration Committee Report that is described as havingbeen audited.

This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Ouraudit work has been undertaken so that we might state to thecompany’s members those matters we are required to state tothem in an auditors’ report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibilityto anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditorsThe directors’ responsibilities for preparing the Annual Report, theRemuneration Committee Report and the accounts in accordancewith applicable United Kingdom law and accounting standards areset out in the Directors’ Responsibilities statement. Our responsibilityis to audit the accounts and the part of the Remuneration CommitteeReport to be audited in accordance with relevant legal andregulatory requirements, United Kingdom Auditing Standards and the Listing Rules of the Financial Services Authority.

We report to you our opinion as to whether the accounts give a true and fair view and whether the accounts and the part of the Remuneration Committee Report to be audited have beenproperly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors’ Report is notconsistent with the accounts, if the company has not kept properaccounting records, if we have not received all the information andexplanations we require for our audit, or if information specified bylaw or the Listing Rules regarding directors’ remuneration andtransactions with the Group is not disclosed.

We review whether the Corporate Governance Statement reflectsthe company’s compliance with the nine provisions of the 2003 FRCCode specified for our review by the Listing Rules of the FinancialServices and we report if it does not. We are not required toconsider whether the Board’s statements on internal control coverall risks and controls, or form an opinion on the effectiveness of the Group’s corporate governance procedures or its risk and controlprocedures. We read other information contained in the AnnualReport and consider whether it is consistent with the auditedaccounts. This other information comprises the Financial Highlights2004, 2004 Highlights, Chairman’s Statement, Our products, Ourgeographic markets, Chief Executive’s Review, Operational Review,Financial Review, Board of Directors, Directors’ Report, CorporateGovernance Statement, Audit Committee Report, Nomination

Committee Report, unaudited part of the Remuneration CommitteeReport, the Corporate Social Responsibility Report and the GroupFive Year Summary. We consider the implications for our report if we become aware of any apparent misstatements or materialinconsistencies with the accounts. Our responsibilities do not extend to any other information.

Basis of audit opinionWe conducted our audit in accordance with United KingdomAuditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounts and the part of the Remuneration Committee Report to be audited. It also includesan assessment of the significant estimates and judgements madeby the directors in the preparation of the accounts and of whetherthe accounting policies are appropriate to the Group’s circumstances,consistently applied and adequately disclosed. We planned andperformed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that theaccounts and the part of the Remuneration Committee Report tobe audited are free from material misstatement, whether caused byfraud or other irregularity or error. In forming our opinion we alsoevaluated the overall adequacy of the presentation of informationin the accounts and the part of the Remuneration CommitteeReport to be audited.

OpinionIn our opinion:

– the accounts give a true and fair view of the state of affairs ofthe company and of the Group as at 31 December 2004 and of the profit of the Group for the 53 weeks then ended; and

– the accounts and the part of the Remuneration CommitteeReport to be audited have been properly prepared inaccordance with the Companies Act 1985.

Ernst & Young LLPRegistered AuditorGlasgow21 March 2005

Accounting Policies


a) Group accounts The Group accounts consolidate the accounts of the companyand subsidiary undertakings made up to a date co-terminous with the financial year of the company. References to ‘subsidiaries’are to be taken as references to subsidiary undertakings unlessotherwise stated. The results of subsidiaries acquired during theyear are consolidated from the date of acquisition and the resultsof subsidiaries disposed of are consolidated up to the date of sale.

Entities in which the Group holds an interest on a long term basisand are jointly controlled by the Group and one or more otherventurers under a contractual arrangement are treated as jointventures. In the Group accounts, joint ventures are accounted for using the gross equity method as defined in FRS9.

Entities, other than subsidiaries or joint ventures, in which theGroup has a participating interest and over whose operating and financial policies the Group exercises a significant influence,are treated as associates. In the Group accounts, associates areaccounted for using the equity method. References to ‘associates’are to be taken as references to associated undertakings unlessotherwise stated. The results are derived from either the latestaudited accounts or the latest draft statutory accounts.

The accounts are prepared in accordance with applicableaccounting standards.

b) GoodwillGoodwill on acquisition of subsidiaries, associates or businessesprior to 27 December 1997 was deducted directly from reservesand has not been reinstated on implementation of FRS10. Positivegoodwill arising on acquisitions since then is capitalised, classifiedas an asset on the balance sheet and amortised on a straight linebasis over its useful economic life up to a presumed maximum of20 years. It is reviewed for impairment at the end of the first fullfinancial year following the acquisition and in other periods, ifevents or changes in circumstances indicate that the carryingvalue may not be recoverable.

If a subsidiary, associate or business is subsequently sold or closed,any goodwill arising on acquisition that was deducted directlyfrom reserves or that has not been amortised through the profitand loss account is taken into account in determining the profit or loss on sale or closure.

c) Tangible assetsFreehold land and buildings are stated at valuation in 1978 and1981 with subsequent additions at cost. Other tangible assets arestated at cost. Except for land, the cost or valuation of tangibleassets is depreciated over the estimated useful life by equal annualinstallments at rates of 2.5% for buildings and 5% to 33.33% for plant and equipment. The surplus arising on revaluation ofbuildings included in the revaluation reserve is amortised over the estimated useful lives of these buildings by transfer to theprofit and loss account reserve in equal annual installments.

d) Government grantsGrants related to expenditure on tangible assets are credited toprofit at the same rate as the depreciation on the assets to whichthe grants relate. The amounts shown in the balance sheet in respectof grants consist of the total grants receivable to date, less theamounts so far credited to profit. Grants of a revenue nature are credited to income in the period to which they relate.

e) StocksStocks are stated at the lower of cost and net realisable value.Cost comprises direct materials on a first-in, first-out basis and directlabour plus attributable production overheads based on a normallevel of activity. Net realisable value is based on estimated sellingprice less anticipated costs to disposal. Provision is made for allforeseeable losses and due allowance is made for obsolete andslow moving items. Claims for progress payments are deductedfrom the value of work in progress, or to the extent that theyexceed this value, are disclosed as payments receivable on account.

f) Long-term contractsA long-term contract is defined as the supply of a single substantialproject where the supply normally extends into different accountingperiods. Profit on long-term contracts is taken as the work iscarried out if the final outcome can be assessed with reasonablecertainty. The profit included is calculated on a prudent basis toreflect the proportion of the work carried out at the year end, byrecording turnover and related costs as contract activity progresses.Depending on the nature of each contract, turnover is eithercalculated to be cost together with a proportion of profitappropriate to the stage of completion of each contract, or isascertained by reference to the valuation of individual elements of work completed with separately ascertainable sales values.Provision is made for all foreseeable losses. Claims for progresspayments are deducted from amounts recoverable on long termcontracts, or to the extent that they exceed this value, aredisclosed as payments receivable on account.


g) Research & development expenditureResearch and development expenditure is written off in the yearin which it is incurred.

h) Deferred taxDeferred tax is recognised in respect of all timing differences thathave originated but not reversed at the balance sheet date wheretransactions or events have occurred at that date that will result inan obligation to pay more tax, or a right to pay less or to receivemore tax, with the following exceptions:

• provision is made for tax on gains arising from the revaluation(and similar fair value adjustments) of fixed assets and gains ondisposal of fixed assets that have been rolled over into replacementassets, only to the extent that, at the balance sheet date, thereis a binding agreement to dispose of the assets concerned.However, no provision is made where, on the basis of all availableevidence at the balance sheet date, it is more likely than not thatthe taxable gain will be rolled over into replacement assets andcharged to tax only where the replacement assets are sold;

• provision is made for deferred tax that would arise onremittance of the retained earnings of overseas subsidiaries, jointventures and associates only to the extent that, at the balancesheet date, dividends have been accrued as receivable;

• deferred tax assets are recognised only to the extent that thedirectors consider that it is more likely than not that there willbe suitable taxable profits from which the future reversal of theunderlying timing differences can be deducted.

Deferred tax is measured on an undiscounted basis at the taxrates that are expected to apply in the periods in which timingdifferences reverse, based on tax rates and laws enacted orsubstantively enacted at the balance sheet date.

i) Foreign currencies Transactions in foreign currencies are converted at the rate rulingat the date of the transaction or at the contract rate if thetransaction is covered by a forward foreign currency contract.Monetary assets and liabilities in foreign currencies are translated atthe closing rate or, if appropriate, at the forward contract rate. Theaccounts of overseas subsidiaries, joint ventures and associates aretranslated using the average rate for the year for the profit and lossaccount and cash flow statements and the closing rate for thebalance sheet. The Group’s interest in the equity of overseas jointventures and associates is translated at the closing rate. Exchangedifferences on consolidation, after adjusting for differences onforeign currency net borrowings, are treated as adjustments toreserves and other exchange differences are dealt with through theprofit and loss account as they arise other than those on contractswhich are incorporated into the contract assessment.

j) Retirement benefits The company and its major subsidiaries operate defined benefitpension plans which are set up under separate trusts or throughinsurance companies. Contribution payments are made to theplans on the advice of an independent qualified actuary. Pensionplan assets are measured using market values. Pension planliabilities are measured using the projected unit method anddiscounted at the current rate of return on a high qualitycorporate bond of equivalent term and currency to the liability.Any increase in the present value of the liabilities of the Group’sdefined benefit pension plans expected to arise from employeeservice in the period is charged against operating profit. Theexpected return on the plans’ assets and the increase during theperiod in the present value of the plans’ liabilities arising from thepassage of time are included in other finance income. Actuarialgains and losses are recognised in the statement of totalrecognised gains and losses.

Unfunded unapproved pension promises and obligations toprovide certain additional post retirement benefits to a number ofoverseas employees are accorded the same accounting treatmentas applies to defined benefit pension plan liabilities.

Contributions to defined contribution pension plans are chargedto the profit and loss account when they become payable.

k) Leasing Assets obtained under finance leases are capitalised in the balancesheet and are depreciated over their useful lives. The interestelement of the rental obligations is charged to the profit and lossaccount over the period of the lease and represents a constantproportion of the balance of capital repayments outstanding.Rentals paid under operating leases are charged to income on a straight line basis over the term of the lease.

l) Employee share schemes In the case of the Long-Term Incentive Plan, the differencebetween the market value of the shares at the date of the awardand any consideration paid for the shares is charged to the profitand loss account over the performance period of the plan. Theamount initially recognised is based on a reasonable expectationof the extent that performance criteria will be met. That amountis charged in the profit and loss account on a straight-line basisover the period to which the performance criteria relates, subjectto subsequent adjustments as necessary to deal with changes inthe probability of performance criteria being met or conditionalawards lapsing. The company has taken advantage of theexemption contained in UITF17 in respect of the accounting for the discount arising on the grant of options in the company’s Inland Revenue approved Savings Related Share Option Schemes 1991 and 2001.


Consolidated Profit & Loss Accountfor the 53 weeks ended 31 December 2004

Group

Before Before amortisation of Amortisation amortisation of Amortisation

goodwill & of goodwill & goodwill & of goodwill &exceptional exceptional exceptional exceptional

items items Total items items Total2004 2004 2004 2003 2003 2003

Notes £’000 £’000 £’000 £’000 £’000 £’000

Turnover 1Group – continuing operations 739,350 – 739,350 690,718 – 690,718

Share of – joint ventures 8,435 – 8,435 9,211 – 9,211– associates 99,790 – 99,790 93,488 – 93,488

847,575 – 847,575 793,417 – 793,417

Operating profit 2aGroup – continuing operations 51,269 – 51,269 53,234 – 53,234

– goodwill amortisation – (7,163) (7,163) – (6,927) (6,927)

51,269 (7,163) 44,106 53,234 (6,927) 46,307 Share of – joint ventures 536 – 536 1,662 – 1,662

– associates 9,446 (289) 9,157 8,628 (183) 8,445

61,251 (7,452) 53,799 63,524 (7,110) 56,414

Exceptional item 3Profit on disposal of land – – – – 1,663 1,663

Interest & other income 2bNet interest & other income (3,895) – (3,895) (3,855) – (3,855)Other finance income / (costs) 955 – 955 (2,969) – (2,969)

Profit on ordinary activities before tax 2c 58,311 (7,452) 50,859 56,700 (5,447) 51,253 Tax on profit on ordinary activities 4a 14,014 (77) 13,937 13,051 (4,696) 8,355

Profit on ordinary activities after tax 44,297 (7,375) 36,922 43,649 (751) 42,898 Minority interest 41 – 41 14 – 14

Profit attributable to The Weir Group PLC 21 44,256 (7,375) 36,881 43,635 (751) 42,884 Dividends 5 26,486 – 26,486 25,378 – 25,378

Transfer to reserves 20 17,770 (7,375) 10,395 18,257 (751) 17,506

Earnings per share 6 21.5p (3.6p) 17.9p 21.4p (0.4p) 21.0p

Diluted earnings per share 6 21.4p (3.6p) 17.8p 21.3p (0.3p) 21.0p


Balance Sheets at 31 December 2004

Group Company

2004 2003 2004 2003Notes £’000 £’000 £’000 £’000

Fixed assets Intangible assets – goodwill 8 103,916 113,933 – – Tangible assets 9 109,767 102,557 224 99 Investments 10Joint ventures – share of gross assets 2,795 9,029 – –

– share of gross liabilities 1,430 2,724 – – 1,365 6,305 – –

Associates 19,655 16,337 19,636 16,264 Other 548 445 385,818 410,139

21,568 23,087 405,454 426,403

Total fixed assets 235,251 239,577 405,678 426,502

Current assetsStocks 11 98,330 99,671 – – Debtors 12 218,058 179,888 20,458 16,323 Cash at bank & in hand 97,287 117,898 10,192 17,880

413,675 397,457 30,650 34,203

Creditors falling due within one yearBorrowings 13 2,553 115,238 16,969 45,279 Other creditors 14 217,223 178,198 25,833 20,985

219,776 293,436 42,802 66,264

Net current assets / (liabilities) 193,899 104,021 (12,152) (32,061)

Total assets less current liabilities 429,150 343,598 393,526 394,441

Less

Creditors falling due after more than one yearLoans 15 81,063 428 143,566 157,710 Obligations under finance leases 16 931 1,211 – –

Provisions for liabilities & charges 17 36,007 34,490 3,770 1,887

Deferred incomeGrants not yet credited to profit 17 26 – –

Minority interest 573 567 – –

Net assets excluding retirement benefits 310,559 306,876 246,190 234,844

Retirement benefits – liability 18 65,075 72,691 706 659

Net assets including retirement benefits 245,484 234,185 245,484 234,185

Capital & reservesCalled up share capital 19 25,882 25,587 25,882 25,587 Share premium account 20 26,451 21,258 26,451 21,258 Capital redemption reserve 20 531 531 531 531 Revaluation reserve 20 – – (42,656) (54,944)Special reserve 20 – – 1,840 1,840 Profit & loss account 20 192,620 186,809 233,436 239,913

245,484 234,185 245,484 234,185

Approved by the Board of Directors on 21 March 2005 Mark Selway Director Chris Rickard Director


Cash Flow Statementfor the 53 weeks ended 31 December 2004

Reconciliation of Net Cash Flow to Movement in Net Funds for the 53 weeks ended 31 December 2004

Group

2004 2004 2003 2003Notes £’000 £’000 £’000 £’000

Cash inflow from operating activities 22a– funds generated by operations 67,638 67,365– exceptional pension contributions (12,096) (10,000)– cash spent on exceptional items (628) (1,480)

54,914 55,885 Dividends received from joint ventures & associates

– joint ventures 2,312 1,248– associates 2,986 2,626

5,298 3,874Returns on investments & servicing of finance 22b (2,119) (4,172)Taxation (8,815) (7,584)Capital expenditure & financial investment

– purchases 22b (25,588) (18,565)– sales 22b 1,704 5,856

(23,884) (12,709)

Cash inflow before corporate items 25,394 35,294 Acquisitions & disposals

– acquisitions 23b (282) (4,563) – acquisitions of joint ventures (615) –– disposals of businesses 23c 57 61– disposal of joint venture 4,545 –

3,705 (4,502)Equity dividends paid (25,688) (24,718)

Cash inflow before liquid resources & financing 3,411 6,074 Management of liquid resources 22b 40,827 62,694Financing – issue of shares 22b 5,488 1,104

– new loans 22b 80,842 – – debt repaid 22b (113,140) (51,169)– foreign exchange hedging 22b 2,478 2,113

(24,332) (47,952)

Increase in cash 19,906 20,816

Group

2004 2003£’000 £’000

Increase in cash 19,906 20,816 Cash flow from debt repaid 113,140 51,169 Cash flow from new loans (80,842) –Cash flow from management of liquid resources (40,827) (62,694)

Change in net funds resulting from cash flows 11,377 9,291 Leases - inceptions (216) (91)Exchange 600 (10,620)

Movement in net funds during the year 11,761 (1,420) Net funds at 27 December 2003 504 1,924

Net funds at 31 December 2004 12,265 504

The analysis of net funds is included in note 22 (c).

Group

2004 2003Notes £’000 £’000

Profit excluding share of profit for joint ventures & associates 30,038 35,815 Share of joint ventures’ profit 541 1,591 Share of associates’ profit 6,302 5,478

Profit attributable to The Weir Group PLC 36,881 42,884 Actuarial (loss) / gain 18 (3,258) 39,045Tax thereon 4b 918 (11,569) Exchange differences on foreign currency net investments (2,793) 8,370Tax thereon 4b (51) (364)

Total recognised gains 31,697 78,366


Additional Statementsfor the 53 weeks ended 31 December 2004

Statement of Total Recognised Gains & Losses

Group

2004 2003£’000 £’000

Total recognised gains 31,697 78,366Dividends (26,486) (25,378)Other movements – new share capital subscribed 5,488 1,104 – employee share scheme 600 –

Net addition to shareholders’ funds 11,299 54,092Opening shareholders’ funds 234,185 180,093

Closing shareholders’ funds 245,484 234,185

Shareholders’ funds are entirely attributable to equity interests.

Reconciliation of Movements in Shareholders’ Funds

Notes to the Accounts


1. Turnover & profit on ordinary activities before tax

Turnover represents the amount invoiced to third parties in respect of goods sold and services provided excluding value added tax. In the case of long-termcontracts, it represents the value of work done during the year. Turnover and profit on ordinary activities before tax were contributed as shown in the tablebelow. For comparative purposes, 2003 figures for this note have been restated at the 2004 average exchange rates with the aggregate adjustment beingmade on the “Foreign exchange translation – Group” line.

Turnover Turnover Profit Profit

2004 2003 2004 2003

£’000 £’000 £’000 £’000

Engineering ProductsGroup – continuing 438,977 416,334 30,941 33,486 Share of associate 2 8 – 2

438,979 416,342 30,941 33,488

TechnaGroup – continuing 101,651 73,059 3,431 767 Share of joint venture 240 361 5 5

101,891 73,420 3,436 772

Engineering ServicesGroup – continuing 198,722 184,412 20,481 20,019 Share of joint ventures 8,195 8,850 531 1,657Share of associate 99,788 93,480 9,446 8,626

306,705 286,742 30,458 30,302

Segmental totalsGroup 739,350 673,805 54,853 54,272 Joint ventures & associates 108,225 102,699 9,982 10,290

Goodwill amortisation– Engineering Products – – (6,773) (6,652)– Engineering Services – – (390) (214)– Associate – – (289) (183)Unallocated costs – – (3,584) (2,988)Foreign exchange translation – Group – 16,913 – 1,889

847,575 793,417 53,799 56,414 Exceptional item - Engineering Products – – – 1,663Interest & other income – – (2,940) (6,824)

847,575 793,417 50,859 51,253

The analysis of Group turnover before share of joint ventures and associates by geographical area of origin is as follows:2004 2003

£’000 £’000

United Kingdom 303,297 280,423 Rest of Europe 71,032 64,022 Americas 241,191 218,615 Middle East & Africa 42,829 37,518 Asia 3,158 2,204 Australia 77,843 71,023

739,350 673,805


1. Turnover & profit on ordinary activities before tax (continued)

The analysis of Group operating profit before unallocated costs, goodwill amortisation and share of joint ventures and associates by geographical area of origin is as follows:

2004 2003

£’000 £’000

United Kingdom 10,073 9,762 Rest of Europe 5,671 5,264 Americas 22,531 23,349 Middle East & Africa 5,142 3,935 Asia 282 223 Australia 11,154 11,739

54,853 54,272

The analysis of Group turnover by geographical area of destination is as follows:2004 2003

£’000 £’000

United Kingdom 162,743 126,627 Rest of Europe 80,214 85,396 Americas 239,094 223,933 Middle East & Africa 105,030 110,968 Asia 85,950 68,486 Australia 66,319 58,395

739,350 673,805

An analysis of net assets by class of business and geographical origin has not been disclosed. The directors are of the opinion that to disclose suchinformation would be seriously prejudicial to the interests of the Group.

2. Profit on ordinary activities before tax

(a) Movement between turnover & operating profit2004 2003

£’000 £’000

Turnover 739,350 690,718 Cost of sales (542,285) (488,525)

Gross profit 197,065 202,193Distribution costs (95,850) (99,397)Administrative expenses (51,965) (51,972)Goodwill amortisation (7,163) (6,927)Other operating income 2,019 2,410

Operating profit– Group 44,106 46,307– share of joint ventures 536 1,662 – share of associates 9,157 8,445

Total operating profit 53,799 56,414

Goodwill amortisation is classified as administrative expenses which total £59,128,000 (2003: £58,899,000).

Notes to the Accounts (Continued)


2. Profit on ordinary activities before tax (continued)2004 2003

£’000 £’000

(b) Interest & other income

Interest receivable on cash at bank 2,690 5,004 Income from associates 3 4 Interest payable on bank loans & overdrafts (5,810) (7,938)Finance charges related to committed loan facilities (472) (445)Finance charges payable under finance leases (113) (159)

Group interest & other income (3,702) (3,534)Share of – joint ventures 26 43

– associates (219) (364)

Net interest & other income (3,895) (3,855)

Expected return on pension plan assets 31,103 25,936 Interest on retirement benefits liabilities (30,148) (28,905)

Other finance income / (costs) 955 (2,969)

(c) Profit on ordinary activities before tax is after charging / (crediting):

Depreciation 15,216 15,374 Goodwill amortisation 7,163 6,927 Government grant credits (8) (127)

Auditors’ remunerationThe total fees payable by the Group to Ernst & Young LLP for work performed in respect of the audit and other services provided to the Group andits subsidiary companies during the period is disclosed below:

Audit servicesStatutory audit * – UK 395 368

– Overseas 393 352 Audit related regulatory reporting – UK 36 34

Total audit services 824 754

Other feesFurther assurance services 180 109 Tax services – compliance services 369 427

– advisory services 840 729

Total other fees 1,389 1,265

* £10,400 (2003: £10,400) of this relates to the company.

Total fees paid in respect of work carried out for the company and its UK subsidiaries other than for the statutory audit totalled £1,139,000 (2003: £675,000).Fees not included in the disclosure above of £42,000 (2003: £41,000) were paid to the auditors in respect of their audit of the Group’s pension schemes.

Operating lease rentalsLand & buildings 3,812 3,723 Plant & machinery 4,247 4,271

8,059 7,994

Gross research & development 6,197 5,452 Reimbursable from third parties (684) (495)

Net cost 5,513 4,957


3. Exceptional item2004 2003

£’000 £’000

Profit on disposal of land – 1,663

The comparative figure for the 52 weeks to 26 December 2003 relates to the disposal of surplus land at the Manchester site of Weir Pumps Limited whichwas completed on 4 December 2003.

4. Tax

(a) Profit & loss account – tax chargeBefore Exceptional –

exceptional previous year

Total items adjustments Total

2004 2003 2003 2003

£’000 £’000 £’000 £’000

Current taxUK corporation tax at 30% 2,288 916 – 916 UK tax adjustment to previous years 78 (1,446) (4,634) (6,080)

2,366 (530) (4,634) (5,164)Double tax relief (1,958) (1,768) – (1,768)

408 (2,298) (4,634) (6,932)Foreign tax 7,978 8,916 – 8,916Foreign tax adjustment to previous years 213 323 – 323

Group current tax 8,599 6,941 (4,634) 2,307Share of joint ventures’ current tax 21 175 – 175Share of associates’ current tax 1,858 1,894 – 1,894

Total current tax 10,478 9,010 (4,634) 4,376

Deferred taxOrigination & reversal of timing differences 2,695 3,331 – 3,331Adjustment to estimated recoverable deferred tax assets (14) – – –

Group deferred tax 2,681 3,331 – 3,331Share of joint ventures’ deferred tax – (61) – (61)Share of associates’ deferred tax 778 709 – 709

Total deferred tax 3,459 3,979 – 3,979

Tax on profit on ordinary activities 13,937 12,989 (4,634) 8,355

Foreign tax includes a £72,000 tax credit (2003: £62,000) and UK corporation tax includes a £5,000 tax credit (2003: £nil) which relate to amortisation ofgoodwill as disclosed on the face of the profit and loss account.

(b) Statement of total recognised gains & losses2004 2003

£’000 £’000

Tax charge on exchange differences on foreign currency net investmentsCurrent tax - overseas (51) (364)

(51) (364)

Tax credit / (charge) on actuarial loss / (gain) on retirement benefitsCurrent tax on contributions in excess of costs through the profit & loss account 1,885 597Deferred tax on contributions in excess of costs through the profit & loss account (508) (508) Deferred tax - origination & reversal of timing differences (459) (11,658)

918 (11,569)

867 (11,933)

4. Tax (continued)

(c) Factors affecting current tax charge

The tax assessed on the profit on ordinary activities for the year is less than the weighted average of standard rates of corporation tax across the Group of30.7% (2003: 31.2%). The differences are reconciled below.

2004 2003£’000 £’000

Profit on ordinary activities before tax 50,859 51,253

Profit on ordinary activities multiplied by the weighted average rate of corporation tax across the Group of 30.7% (2003: 31.2%) 15,636 15,980 Goodwill amortised / released not eligible for tax relief 2,158 1,999 Permanent differences (7,064) (6,030)Timing differences (543) (1,608)Adjustments to tax charge in respect of previous periods – exceptional – (4,634)

– other 291 (1,331)

Total current tax (see note 4a) 10,478 4,376

(d) Factors that may affect future tax charges

Overseas deferred tax asset balances amounting to £14,895,000 (2003: £12,812,000) have not been recognised on the grounds that there is insufficientevidence that these assets will be recoverable. These assets will be recovered when future tax charges are sufficient to absorb the reversal of these taxbenefits. Deferred tax asset balances for capital losses in the UK amounting to £13,593,000 (2003: £13,158,000) have not been recognised but would beavailable in the event of future capital gains being incurred by the Group.

No provision has been made for the liability to tax from capital gains amounting to £80,000 (2003: £78,000) which would arise if land and buildings wereto be sold at their book amounts.

No provision has been made for any taxation which might arise on the distribution to the UK of retained overseas earnings of £192,241,000 (2003: £194,702,000).

(e) Balance sheet – deferred taxGroup Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

Included in debtors (note 12) 2,775 2,183 654 1,026 Included in provisions for liabilities & charges (note 17) (17,418) (17,533) – –Included in retirement benefits (note 18) 29,038 32,747 302 282

14,395 17,397 956 1,308

Accelerated capital allowances (902) (1,522) (4) 2Other timing differences (13,741) (13,828) 658 1,024 Retirement benefits 29,038 32,747 302 282

14,395 17,397 956 1,308

At 27 December 2003 17,397 1,308Profit & loss account (2,681) (374)Statement of total recognised gains & losses (967) 22Exchange 646 –

At 31 December 2004 14,395 956




5. Dividends2004 2003

£’000 £’000

On ordinary sharesInterim 3.45p per share (2003: 3.35p) 7,124 6,853 Proposed final 9.35p per share (2003: 9.05p) 19,362 18,525

26,486 25,378

6. Earnings per share

The earnings per share calculation is based on earnings of £36,881,000 being profits attributable to The Weir Group PLC (2003: £42,884,000) and on theweighted average of 205,691,549 shares in issue (2003: 204,365,086).

The earnings per share excluding goodwill amortisation and exceptional items is based on earnings of £44,256,000 (2003: £43,635,000), being profitattributable to The Weir Group PLC of £36,881,000 (2003: £42,884,000) as adjusted to exclude goodwill amortisation net of associated tax of £7,375,000(2003: £7,048,000) and the exceptional profit after tax of £nil (2003: £6,297,000), and on the weighted average of 205,691,549 shares in issue (2003: 204,365,086). The effect of excluding the goodwill amortisation and the exceptional items on the earnings per share is an increase of 3.6p pershare (2003: 0.4p). The figure for earnings per share excluding goodwill amortisation and the exceptional items has been presented as the directorsconsider that this figure gives a more meaningful measurement of earnings.

The diluted earnings per share calculation is based on earnings of £36,881,000, being profits attributable to The Weir Group PLC (2003: £42,884,000), and on the weighted average of 206,821,975 shares in issue (2003: 204,657,884). The weighted average shares in issue is based on the basic weightedaverage of 205,691,549 shares in issue (2003: 204,365,086) together with the dilutive potential ordinary shares of 1,130,426 (2003: 292,798) in respect of employee share schemes.

The diluted earnings per share excluding goodwill amortisation and exceptional items is based on earnings of £44,256,000 (2003: £43,635,000), being profit attributable to The Weir Group PLC of £36,881,000 (2003: £42,884,000) as adjusted to exclude goodwill amortisation net of associated tax of £7,375,000 (2003: £7,048,000) and the exceptional profit after tax of £nil (2003: £6,297,000), and on the weighted average of 206,821,975 shares inissue (2003: 204,657,884). The effect of excluding the goodwill amortisation and the exceptional items on the diluted earnings per share is an increase of3.6p per share (2003: 0.3p).



7. Directors & employees2004 2003

Number Number

Average number of persons employed by the company and its subsidiariesEngineering Products 5,125 5,102 Techna 697 707 Engineering Services 1,955 1,833

7,777 7,642

2004 2003£’000 £’000

Staff costsWages & salaries 193,434 184,795 Social security costs 23,485 22,408 Other pension costs (see below) 11,781 10,482 Other post retirement healthcare costs (see below) 46 50

228,746 217,735

Pension costs are analysed as follows:Defined benefit pensions

Current service cost UK 5,190 5,180 North America 882 1,058

Past service cost North America 17 – Settlements / curtailments UK – (495)

6,089 5,743

Defined contribution pensionsUK 616 342 Overseas 5,076 4,397

5,692 4,739

Post retirement healthcare costs are analysed as follows:Current service cost North America 46 50

46 50

Details of directors’ remuneration, pension benefits, share options and L-TIP awards are included in the Remuneration Committee Report on pages 30 to 35.

8. Intangible assets – goodwillGroup

Total£’000

CostAt 27 December 2003 145,198 Acquisitions (282)Exchange (3,158) At 31 December 2004 141,758

AmortisationAt 27 December 2003 31,265 Provided during the year 7,163 Exchange (586)

At 31 December 2004 37,842

Net book value at 31 December 2004 103,916

Net book value at 27 December 2003 113,933

Goodwill is being amortised over the directors’ estimate of useful economic life which is 20 years.


9. Tangible assetsGroup Company

Freeholdland & Plant & Plant &

buildings machinery Total machinery£’000 £’000 £’000 £’000

At 27 December 2003Cost 53,166 156,043 209,209 289 Valuation 1978 8,947 – 8,947 – Valuation 1981 1,593 – 1,593 –

Additions 932 23,781 24,713 176 Disposals (294) (10,017) (10,311) – Exchange (974) (2,529) (3,503) –

At 31 December 2004 63,370 167,278 230,648 465

of whichCost 54,274 167,278 221,552 465 Valuation 1978 7,492 – 7,492 – Valuation 1981 1,604 – 1,604 –

63,370 167,278 230,648 465

Aggregate depreciationAt 27 December 2003 19,740 97,452 117,192 190 Charge for year 1,689 13,527 15,216 51 Disposals (188) (9,513) (9,701) – Exchange (303) (1,523) (1,826) –

At 31 December 2004 20,938 99,943 120,881 241

Net book value at 31 December 2004 42,432 67,335 109,767 224

Net book value at 27 December 2003 43,966 58,591 102,557 99

On a historical cost basis, freehold land and buildings would have been included at a cost of £59,065,000 (2003: £59,401,000) less a cumulative provisionfor depreciation of £19,474,000 (2003: £18,276,000).

At 31 December 2004, the net book value of tangible assets acquired under finance leases included in Group land and buildings amounted to £1,697,000(2003: £890,000) and in company land and buildings, £nil (2003: £nil). Depreciation charged for the year on these assets amounted to £81,000 (2003:£57,000) and £nil (2003: £nil) respectively.

At 31 December 2004, the net book value of tangible assets acquired under finance leases included in Group plant and machinery amounted to £728,000(2003: £670,000) and in company plant and machinery, £nil (2003: £nil). Depreciation charged for the year on these assets amounted to £232,000 (2003:£318,000) and £nil (2003: £nil) respectively.

The transition rules of FRS15 were adopted for freehold land and buildings which permitted the retention of the carrying values at the previously revaluedamounts. These assets valued in 1978 and 1981 will not be subject to further revaluation.



10. Fixed asset investments

Group

Joint Otherventures Associates investments Total

£’000 £’000 £’000 £’000

At 27 December 2003 – cost – – 445 445 – equity basis 6,305 16,337 – 22,642

Additions 615 – 1,338 1,953 Disposals (3,627) – (1,215) (4,842)(Decrease) / increase in net assets (1,828) 3,317 – 1,489 Exchange (100) 1 (20) (119)

At 31 December 2004 1,365 19,655 548 21,568

of whichCost – – 548 548 Equity basis 1,365 19,655 – 21,020

1,365 19,655 548 21,568

Group

2004 2003£’000 £’000

The aggregate of the Group’s share in the net assets of the associates is analysed as follows:Fixed assets 44,725 41,338 Current assets 19,250 17,236

Share of gross assets 63,975 58,574

Liabilities due within one year 35,052 30,677 Liabilities due after more than one year 9,268 11,560

Share of gross liabilities 44,320 42,237

Share of net assets 19,655 16,337

Company

Subsidiaries OtherShares Loans Associates investments Total£’000 £’000 £’000 £’000 £’000

At 27 December 2003 – cost – – – 17 17 – valuation 402,595 7,527 16,264 – 426,386

Additions 11,142 67,024 – – 78,166 Repayments – (9,660) – – (9,660)(Decrease) / increase in net assets (100,303) 1,885 3,372 – (95,046) Increase in net assets due to FRS17 5,187 – – – 5,187 Exchange – 404 – – 404

At 31 December 2004 318,621 67,180 19,636 17 405,454

of whichCost – – – 17 17 Valuation 318,621 67,180 19,636 – 405,437

318,621 67,180 19,636 17 405,454

Investments in subsidiaries and associates are held at valuation representing the amount of attributable underlying net assets at the balance sheet dateincluding related unamortised goodwill together with the unallocated pension liability relating to subsidiaries. As at 31 December 2004, a provision of£3,770,000 (2003: £1,887,000) has been made against the deficiency of underlying net assets in certain subsidiaries. On a historical cost basis theinvestment in subsidiaries would have been included at a cost of £579,702,000 (2003: £510,792,000) less a provision for diminution in value of£133,270,000 (2003: £31,123,000). On a historical cost basis the investment in associates would have been included at a cost of £1,661,000 (2003: £1,661,000). The principal subsidiaries, joint ventures and associates of the Group are listed on page 69.

11. Stocks

Group

2004 2003£’000 £’000

Raw materials 18,995 17,177 Work in progress 44,614 42,981 Finished goods 45,080 44,960

108,689 105,118 Less: progress payments received & receivable 10,359 5,447

98,330 99,671

12. Debtors

Group Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

Amounts recoverable within one yearAmounts recoverable on contracts 42,649 29,297 – – Trade debtors 155,844 131,928 – – Amounts owed by subsidiaries – – 14,343 10,275 Amounts owed by joint ventures & associates 1,348 1,095 637 868 Tax recoverable 1,589 2,658 2,623 2,831 Deferred tax recoverable 2,775 2,183 654 1,026 Other debtors 9,349 8,069 2,187 1,129 Prepayments & accrued income 4,504 4,658 14 194

218,058 179,888 20,458 16,323

13. Borrowings

Group Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

Bank overdrafts & short term debt 2,463 173 16,969 13,933 Bank loans – current portion 90 115,065 – 31,346

2,553 115,238 16,969 45,279

14. Other creditors

Group Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

Payments received on account 27,582 12,291 – – Obligations under finance leases (note 16) 475 517 – – Trade creditors 101,919 74,726 – – Amounts owed to subsidiaries – – 4,426 710 Amounts owed to associates 407 183 – – Corporate tax 5,123 8,177 – – Other taxes & social security costs 10,118 9,401 244 223 Other creditors 8,336 5,834 42 18 Accruals & deferred income 43,901 48,544 1,759 1,509 Proposed dividends 19,362 18,525 19,362 18,525

217,223 178,198 25,833 20,985




15. Loans

Group Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

Amounts due are repayable as follows:in more than two years butnot more than five years – bank loans 80,968 339 – –

– loans from subsidiaries – – 143,566 157,710 in more than one year butnot more than two years – bank loans 95 89 – –

81,063 428 143,566 157,710 Loans – current portion (includedin borrowings – see note 13) – bank loans 90 115,065 – 31,346

81,153 115,493 143,566 189,056

Bank loans amounting to £432,000 (2003: £513,000) are secured over local assets.

16. Leasing commitments

Group Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

(a) Finance leases

As at 31 December 2004 the net obligationsunder finance leases amounted to 1,406 1,728 – –

of which payable during 2005 475 517 – – 2006 340 480 – – 2007 to 2009 366 479 – – after 2009 225 252 – –

1,406 1,728 – –

(b) Operating leases

As at 31 December 2004 committed payments under operating leases for 2005 amounted to: Land & buildings 3,573 3,652 – – Other 3,130 3,288 8 35

6,703 6,940 8 35

of which payable in respect of operatingleases ending in 2005 1,409 984 4 16

2006 to 2009 3,939 5,014 4 19 after 2009 1,355 942 – –

6,703 6,940 8 35


17. Provisions for liabilities & charges

Group

Deferred Rational- Deferredtax Warranties isation consideration Other Total

£’000 £’000 £’000 £’000 £’000 £’000

At 27 December 2003 17,533 6,555 1,648 1,965 6,789 34,490 Net movement in year 874 – – – – 874 Arising during the year – 6,284 300 – 1,841 8,425 Released – utilised – (3,720) (434) (282) (1,459) (5,895)

– unutilised – (122) (18) (350) (43) (533)Exchange (989) (81) (2) (59) (223) (1,354)

At 31 December 2004 17,418 8,916 1,494 1,274 6,905 36,007

Warranty provisions include provisions for expected warranty and contract penalty claims on products sold and services provided. It is expected that allcosts related to such claims will have been incurred within five years of the balance sheet date. Rationalisation provisions relate primarily to remaining lease obligations in the UK. It is expected that these costs will be incurred in the period up to 2010. Deferred consideration relates to the previous yearacquisitions (see note 23). Other provisions relate principally to an environmental clean up programme in the United States and employment relatedprovisions in Australia, South America and France. It is expected that the environmental costs will be incurred in the period up to 2024.

Company

Subsidiaries£’000

At 27 December 2003 1,887 Net movement in year 1,883

At 31 December 2004 3,770

The provision for subsidiaries is made in respect of the deficiency of underlying net assets in certain subsidiaries (see note 10).

18. Retirement benefits

The Group operates defined benefit pension arrangements in the UK and North America of which The Weir Group Pension & Retirement Savings Scheme is predominant. The latest full actuarial assessment of this plan was at 31 December 2002, and, for the purposes of accounting for FRS17, this has beenadjusted to reflect the positions at the 2003 and 2004 year ends by a qualified independent actuary. For this closed scheme, the current service cost isexpected to increase under the projected unit method as the members of the scheme approach retirement.

Resulting from the latest full actuarial assessment, on the advice of the actuary, the employer contribution rate increased from 10.5% to 12.5% of totalcontribution salaries with effect from 1 April 2003 and further contributions of £10m and £8m were made in the first half of 2003 and the first half of 2004respectively. It is intended that the next full actuarial assessment of this plan for funding purposes will take place as at 31 December 2005.

The weighted averages of the major assumptions used by the actuaries for all defined benefit plans were (in nominal terms):

UK North America UK North America UK North America

2004 2004 2003 2003 2002 2002% % % % % %

Rate of increase in salaries 3.8 3.2 3.7 4.0 3.4 3.2 Rate of increase in pensions in payment 2.7 n/a 2.6 n/a 2.3 n/a Discount rate 5.3 5.9 5.4 6.0 5.6 6.8 Inflation assumption 2.7 2.4 2.6 2.5 2.3 2.5 Discount rate – post retirement healthcare n/a 5.5 n/a 5.8 n/a 6.3 Healthcare cost increases n/a * n/a ** n/a ***

*10.3% per annum decreasing to 5% per annum and remaining static at that level from 2008 onwards.**12.4% per annum decreasing to 5% per annum and remaining static at that level from 2008 onwards.***12.2% per annum decreasing to 5% per annum and remaining static at that level from 2008 onwards.



18. Retirement benefits (continued)

The assets and liabilities of the UK plans and the weighted average expected rates of return are as follows:

UK

2004 2004 2003 2003 2002 2002% £’000 % £’000 % £’000

Equities 7.5 308,925 7.8 306,793 7.5 248,119 Bonds 4.4 155,785 4.5 104,723 4.4 96,589 Property – – 7.3 9,183 7.0 13,910

Total market value of assets 464,710 420,699 358,618 Actuarial value of plan liabilities (548,178) (511,252) (499,168)

Deficit in the plans (83,468) (90,553) (140,550)Related deferred tax asset 25,040 27,166 42,177

Net UK pension liability (58,428) (63,387) (98,373)

The assets and liabilities of the North American plans and the weighted average expected rates of return are as follows:

North America

2004 2004 2003 2003 2002 2002% £’000 % £’000 % £’000

Equities 7.8 19,950 7.8 19,555 7.8 17,181 Bonds 4.6 17,866 4.7 12,312 4.7 9,364 Property 3.0 663 3.0 661 3.0 1,142

Total market value of assets 38,479 32,528 27,687 Actuarial value of plan liabilities (43,246) (40,376) (33,998)

Deficit in the plans (4,767) (7,848) (6,311)Post retirement healthcare liability (5,878) (7,037) (6,990)

(10,645) (14,885) (13,301)Related deferred tax asset 3,998 5,581 5,080

Net North American retirement benefits liability (6,647) (9,304) (8,221)

Total retirement benefits liability (65,075) (72,691) (106,594)

The movement in the deficit during the year is analysed as follows:

UK North America Post retirement UK North America Post retirementpensions pensions healthcare pensions pensions healthcare

2004 2004 2004 2003 2003 2003£’000 £’000 £’000 £’000 £’000 £’000

Deficit in plans at beginning of year (90,553) (7,848) (7,037) (140,550) (6,311) (6,990)

Movement in yearCurrent service costs (note 7) (5,190) (882) (46) (5,180) (1,058) (50)Past service costs (note 7) – (17) – – – – Settlements / curtailments (note 7) – – – 495 – – Other finance income / (costs) (note 2b) 1,627 (288) (384) (2,022) (510) (437)

Profit before tax impact (3,563) (1,187) (430) (6,707) (1,568) (487)

Contributions 15,311 3,300 353 15,738 1,233 319

Actual return less expected return on pension plan assets 14,808 2,252 – 37,422 2,353 – Experience (loss) / gain arising onretirement benefits plan liabilities (353) (465) 885 30,633 (462) (16) Changes in financial assumptionsunderlying retirement benefits plan liabilities (19,118) (1,140) (127) (27,089) (3,161) (635)

Variance between actuarialassumptions & actual experience (4,663) 647 758 40,966 (1,270) (651)

Exchange – 321 478 – 68 772

Deficit in the plans at end of year (83,468) (4,767) (5,878) (90,553) (7,848) (7,037)



The history of experience gains and losses is as follows:UK pensions

2004 2003 2002 2001

Difference between expected & actual return on plan assetsAmount £’000 14,808 37,422 (103,203) (77,081)Percentage of plan assets 3% 9% 29% 18%

Experience gains & losses on plan liabilitiesAmount £’000 (353) 30,633 344 (4,423)Percentage of present value of plan liabilities 0.1% 6% 0.1% 1%

Total gross amount recognised in statement of total recognised gains & lossesAmount £’000 (4,663) 40,966 (122,124) (81,504)Percentage of present value of plan liabilities 1% 8% 24% 18%

North America pensions

2004 2003 2002 2001

Difference between expected & actual return on plan assetsAmount £’000 2,252 2,353 (3,859) (3,876)Percentage of plan assets 6% 7% 14% 12%

Experience gains & losses on plan liabilitiesAmount £’000 (465) (462) (929) 1,541 Percentage of present value of plan liabilities 1% 1% 3% 5%

Total gross amount recognised in statement of total recognised gains & lossesAmount £’000 647 (1,270) (6,549) (3,830)Percentage of present value of plan liabilities 1% 3% 19% 11%

Post retirement healthcare

2004 2003 2002 2001

Experience gains & losses on plan liabilitiesAmount £’000 885 (16) 33 n/aPercentage of present value of plan liabilities 15% 0.2% 0.5% n/a

Total gross amount recognised in statement of total recognised gains & lossesAmount £’000 758 (651) (1,159) n/aPercentage of present value of plan liabilities 13% 9% 17% n/a




Company unapproved plan

The major assumptions used by the actuaries for the company unapproved plan were as follows:Company

2004 2003 2002% % %

Rate of increase in salaries n/a n/a 4.1 Rate of increase in pensions in payment 2.7 2.6 2.3 Discount rate 5.3 5.4 5.6 Inflation assumption 2.7 2.6 2.3

The liabilities of the company unapproved plan are as follows:Company

2004 2003 2002£’000 £’000 £’000

Actuarial value of plan liabilities (1,008) (941) (942)Related deferred tax asset 302 282 283

Net pension liability (706) (659) (659)

The movement in the deficit during the year is analysed as follows:Company

2004 2003£’000 £’000

Deficit in plan at beginning of year (941) (942)

Movement in yearInterest on pension liabilities (51) (51)

Profit before tax impact (51) (51)

Payments 57 181

Experience loss arising on pension plan liabilities (7) (79) Changes in financial assumptions underlying pension plan liabilities (66) (50)

Variance between pension fund actuarial assumptions & actual experience (73) (129)

Deficit in the plan at end of year (1,008) (941)

The history of experience gains and losses is as follows:Company

2004 2003 2002 2001

Experience gains & losses on plan liabilitiesAmount £’000 (7) (79) 256 78 Percentage of present value of plan liabilities 1% 8% 27% 7%

Total gross amount recognised in statement of total recognised gains & lossesAmount £’000 (73) (129) 229 78 Percentage of present value of plan liabilities 7% 14% 24% 7%


19. Share capital

2004 2003£’000 £’000

Authorised share capitalOrdinary shares of 12.5p each 36,000 36,000

Allotted, called up & fully paidOrdinary shares of 12.5p each 25,882 25,587

Aggregate Share Considerationnominal value premium received

Number £’000 £’000 £’000

Exercise of share options 2,361,603 295 5,193 5,488

At 31 December 2004 shares in the company subject to options under the company’s share option schemes were as follows:

First normal Price per Numberexercise date share of shares

Savings Related Share Option Scheme 19912004 210.00p 1,767 2004 226.00p 685 2005 197.50p 483,564 2006 226.00p 364,942

Executive Share Option Scheme 19941998 234.00p 31,487 1999 260.00p 22,692 1999 258.00p 73,462 2000 239.00p 69,341 2001 283.50p 139,779 2001 293.50p 10,221 2002 246.50p 466,200 2003 197.50p 199,736 2004 251.50p 602,138 2004 282.50p 150,000 2005 262.50p 1,475,0002007 273.00p 164,8352007 295.75p 15,165

Savings Related Share Option Scheme 20012005 260.00p 288,124 2006 201.00p 448,280 2007 260.00p 321,189 2008 201.00p 456,734

During the year, conditional awards over 850,970 shares were made to participants under the L-TIP. The market price at the date of award was 307p. Theawards vest over a three year period. An amount of £600,000 has been charged to the profit and loss account in respect of the number of awards whichare expected to be made at the end of the vesting period.

Shares allotted



20. Reserves

GroupShare Capital

premium redemption Revaluation Special Profit and lossaccount reserve reserve reserve account Total

£’000 £’000 £’000 £’000 £’000 £’000

At 27 December 2003 21,258 531 – – 186,809 208,598 Premium on share issues 5,193 – – – – 5,193 Employee share scheme – – – – 600 600Profit retained in year – – – – 10,395 10,395 Actuarial loss net of deferred tax thereon – – – – (2,340) (2,340) Exchange differences – – – – (2,793) (2,793) Tax on exchange differences – – – – (51) (51)

At 31 December 2004 26,451 531 – – 192,620 219,602

The profit and loss account above is stated after deducting an accumulated loss in respect of retirement benefits of £65,075,000 (2003: £72,691,000).

CompanyShare Capital

premium redemption Revaluation Special Profit and lossaccount reserve reserve reserve account Total

£’000 £’000 £’000 £’000 £’000 £’000

At 27 December 2003 21,258 531 (54,944) 1,840 239,913 208,598 Premium on share issues 5,193 – – – – 5,193 Employee share scheme – – – – 600 600Surplus on revaluation of investments – – 7,101 – – 7,101 Movement on revaluation of investments due to FRS17 – – 5,187 – – 5,187 Gain on foreign exchange contract – – – – 1,878 1,878 Exchange gain on group loan payable – – – – 101 101 Actuarial loss net of deferred tax thereon – – – – (51) (51)Deficit for year – – – – (9,005) (9,005)

At 31 December 2004 26,451 531 (42,656) 1,840 233,436 219,602

The profit and loss account above is stated after deducting an accumulated loss in respect of retirement benefits of £706,000 (2003: £659,000).

The exchange differences adjustment to Group profit and loss account reserves includes exchange gains free of tax of £2,313,000 on foreign exchangecontracts which partially hedge overseas net assets (2003: £2,539,000).

The cumulative amount of goodwill deducted directly from Group reserves net of goodwill relating to businesses disposed of as at 31 December 2004 is£138,785,000 (2003: £138,785,000).

21. Profit attributable to The Weir Group PLC

The profit dealt with in the accounts of The Weir Group PLC was £17,481,000 (2003: £18,175,000). In accordance with the concession granted undersection 230 of the Companies Act 1985, the profit and loss account of The Weir Group PLC has not been separately presented in these accounts.


22. Cash flow statement2004 2003

£’000 £’000

(a) Reconciliation of Group operating profit to net cash inflow from operating activities

Operating profit 44,106 46,307 Depreciation, goodwill amortisation & grant credits 22,371 22,174 (Gain) / loss on disposal of tangible assets & investments (173) 49Funding of pension & post retirement costs (733) (1,497)Increase / (decrease) in provisions 2,507 (237)Employee share scheme 600 – Increase in stocks (633) (2,104)(Increase) / decrease in debtors (40,808) 9,551 Increase / (decrease) in creditors 40,401 (6,878)

Funds generated by operations 67,638 67,365

Exceptional pension contributions (12,096) (10,000)

Cash spent on exceptional environmental provision (284) (421)Cash spent on exceptional closure costs (344) (864) Cash spent on exceptional Warman reorganisation costs – (195)

Cash spent on exceptional items (628) (1,480)

Net cash inflow from operating activities 54,914 55,885

(b) Analysis of cash flows for headings netted in the cash flow statement

Returns on investments & servicing of financeInterest received 2,675 5,373 Interest & finance charges paid (4,681) (9,386)Interest element of finance lease rentals (113) (159)

(2,119) (4,172)

Capital expenditure & financial investmentPurchase of tangible fixed assets (24,250) (18,260)Purchase of investments (1,338) (305)

(25,588) (18,565)

Sale of tangible fixed assets 489 5,338 Sale of investments 1,215 518

1,704 5,856

(23,884) (12,709)

Management of liquid resourcesCash moved from deposit 40,827 62,694

FinancingIssue of shares 5,488 1,104 New loans 80,389 – Loans repaid (112,591) (45,986)Short term bank loans 453 (4,677)Lease obligations repaid (549) (506)Foreign exchange hedging 2,478 2,113

(24,332) (47,952)



22. Cash flow statement (continued)

(c) Analysis of net fundsAt Cash Lease At

27.12.03 flow inception Exchange 31.12.04£’000 £’000 £’000 £’000 £’000

Cash on call at bank & in hand * 63,965 85,204 Overdrafts (173) (2,011)

63,792 19,906 – (505) 83,193 Cash on deposit at bank * 53,933 (40,827) – (1,023) 12,083 Short term debt – (453) – 1 (452) Loans (115,493) 32,202 – 2,138 (81,153)Finance leases (1,728) 549 (216) (11) (1,406)

504 11,377 (216) 600 12,265

* These amounts represent “cash at bank & in hand” per the balance sheet.

23. Acquisitions & disposals

(a) Previous year acquisition

On 27 November 2003, the Group purchased Offshore Containers International PTY Limited and provided for deferred consideration which was contingenton profitability in the two years following acquisition. The provision for deferred consideration has decreased by £350,000 which, along with a minorrevision to assets acquired, has been taken as an adjustment to goodwill on acquisition.

(b) Cash outflow on acquisitionsTotal Total2004 2003

£’000 £’000

Acquisition cost – 6,436 Deferred consideration – (1,873)Previous year’s acquisitions deferred consideration paid 282 –

282 4,563

(c) Cash inflow on disposalsTotal Total2004 2003

£’000 £’000

Prior year disposals deferred proceeds & costs 57 61


24. Derivatives & other financial instruments

An outline of the Group’s objectives, policies and strategies in respect of financial instruments is set out in the Financial Review on pages 20 and 21.

For the purposes of the disclosures which follow in this note, short term debtors and creditors which arise directly from the Group’s operations have beenexcluded as permitted under FRS13. The disclosures focus on those financial instruments which play a significant medium to long term role in the financialrisk profile of the Group. An analysis of the carrying value of all financial assets and liabilities is given in the fair value table in note 24(e).

(a) Interest rate management

The interest rate profile of the financial liabilities of the Group at 31 December 2004 is set out in the table below.

Fixed rate financial liabilities

WeightedWeighted average Floating

average period for Fixed rate rateinterest which rate financial financial

rate is fixed liabilities liabilities TotalCurrency % Years £’000 £’000 £’000

Sterling – – – 1,252 1,252 Australian $ – – – 81,481 81,481Euro 5.34 6.55 1,115 124 1,239Other 7.07 1.95 1,000 50 1,050

6.16 4.37 2,115 82,907 85,022

The interest rate profile of the financial liabilities of the Group at 26 December 2003 is set out in the table below.

Fixed rate financial liabilities

WeightedWeighted average Floating

average period for Fixed rate rateinterest which rate financial financial

rate is fixed liabilities liabilities TotalCurrency % Years £’000 £’000 £’000

Sterling – – – 2,071 2,071 United States $ 8.50 1.00 52 26,105 26,157 Australian $ – – – 83,660 83,660 Euro 5.34 7.52 1,299 3,492 4,791Other 6.98 2.20 627 88 715

5.94 5.66 1,978 115,416 117,394

The floating rate financial liabilities primarily comprise:– United States dollar bank loans that bear interest at rates based on United States prime rate and / or LIBOR.– Australian dollar bank loans that bear interest at rates based on the average bank bill swap bid rate (BBSY).



24. Derivatives & other financial instruments (continued)

The interest rate profile of the financial assets of the Group at 31 December 2004 is set out in the table below.Financial

Floating assetsFixed rate rate on which

financial financial no interestassets assets is paid Total

Currency £’000 £’000 £’000 £’000

Sterling 129 17,904 108 18,141 United States $ 335 19,396 1,053 20,784 Australian $ – 21,595 4 21,599Euro – 13,864 4,987 18,851Other 41 17,150 1,269 18,460

505 89,909 7,421 97,835

The interest rate profile of the financial assets of the Group at 26 December 2003 is set out in the table below.Financial

Floating assetsFixed rate rate on which

financial financial no interestassets assets is paid Total

Currency £’000 £’000 £’000 £’000

Sterling 165 40,925 102 41,192 United States $ 196 19,310 49 19,555 Australian $ – 32,821 17 32,838 Euro – 10,117 428 10,545 Other 5 14,182 26 14,213

366 117,355 622 118,343

The fixed rate financial assets principally comprise UK gilts and United States treasury bonds and based on carrying value the one year weighted averageyields are 6.41% and 1.22% respectively (2003: 5.00% and 0.98%).

The floating rate financial assets comprise cash and short term deposits at call and short notice rates.

Financial assets on which no interest is paid comprise cash in hand and cash held at bank on non interest bearing accounts together with sundry unlisted investments.



(b) Exchange risk management

The Group follows a policy of managing its exposure to foreign currencies by hedging all significant transaction exposures using the forward forex marketswhenever possible. In addition, foreign currency monetary assets are utilised to manage currency exposure on future monetary liabilities arising in respectof existing contracts. The currency gains/losses on these monetary assets are matched against the exposure on the future monetary liability in the overallcontract assessment. Accordingly, as at 31 December 2004 and at 26 December 2003, there are no material exposures on currency transactions that giverise to net currency gains and losses recognised in the profit and loss account.

(c) Maturity of financial liabilities

The maturity profiles of the Group’s financial liabilities as listed in the fair value table below, are disclosed in notes 15 and 16.

(d) Borrowing facilities

The Group has various borrowing facilities available to it. The undrawn committed facilities available as at 31 December 2004, in respect of which allconditions precedent have been met at the date, were as follows:

2004 2003£’000 £’000

Expiring within one year – 76,853 Expiring in more than two years 218,522 –

218,522 76,853

(e) Fair value

The estimated fair value of the Group’s financial instruments are summarised below.

Carrying Estimated Carrying Estimatedamount fair value amount fair value

2004 2004 2003 2003£’000 £’000 £’000 £’000

Primary financial instruments held or issued to finance the Group's operationsInvestments – UK gilts 129 131 165 166

– United States treasury bonds 335 335 196 196 – unlisted 84 52 84 84

Cash at bank & in hand 97,287 97,287 117,898 117,898 Bank overdrafts & short term debt (2,463) (2,463) (173) (173)Loans (81,153) (81,153) (115,493) (115,493)Finance leases (1,406) (1,406) (1,728) (1,728)

12,813 12,783 949 950 Derivative financial instruments held to hedge currency exposuresUnrecognised forward foreign currency contractsGains – 6,285 – 2,306 Losses – (2,003) – (693)

Asset 12,813 17,065 949 2,563

Market values have been used to determine the fair value of listed fixed asset investments. The fair value of forward foreign exchange contracts is theestimated amount the Group would expect to pay or receive on the termination of these contracts. The fair value of all other items has been calculated by discounting the expected future cash flows at prevailing interest rates.




(f) Hedges

Gains and losses on financial derivatives at 31 December 2004 which are being used for hedging purposes are as follows:

Gains Losses Total Gains Losses Total2004 2004 2004 2003 2003 2003

£’000 £’000 £’000 £’000 £’000 £’000

Gains & losses unrecognised 6,285 (2,003) 4,282 2,306 (693) 1,613 Gains & losses deferred 86 (238) (152) 78 (88) (10)

6,371 (2,241) 4,130 2,384 (781) 1,603

of whichGains & losses expected to berecognised in the profit & loss accountin the following year 3,880 (1,844) 2,036 2,345 (781) 1,564

Gains & losses included in the profit & loss account for the current yearthat arose in previous years 1,814 (423) 1,391 2,135 (1,163) 972

25. Capital commitments

Group Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

Outstanding capital commitments contracted but not provided 4,266 1,598 – –

26. Contingent liabilities & guarantees

Group Company

2004 2003 2004 2003£’000 £’000 £’000 £’000

Maximum guarantee obligations relating to bankand other borrowings of subsidiaries and a joint venture – – 14,297 4,054

Guarantees and indemnities have been given in respect of the performance of Devonport Royal Dockyard Limited. The company and certain subsidiarieshad other contingent liabilities in the normal course of business, including counter indemnities for performance and tendering bonds of certain subsidiaries.

The company and certain subsidiaries are, from time to time, parties to legal proceedings and claims which arise in the normal course of business. The directors do not anticipate that the outcome of these proceedings and claims, either individually or in aggregate, will have a material adverse effectupon the Group’s financial position.

27. Post balance sheet eventsOn 1 February 2005, the Group took the decision to relocate its UK Valve business and to radically restructure its product portfolio and operationalprocedures. On 17 March 2005, the Group also took the decision to refocus its Clear Liquid product portfolio and to exit certain product lines. Both ofthese decisions will involve a significant downsizing of the respective workforces at those facilities, the extent of which will depend on the outcome ofstatutory employee consultation periods. Until the outcome of these consultations is known, the exact shape and size of the restructurings cannot beaccurately determined and the directors are therefore unable to reliably assess the financial impact of them. However, based upon the financial informationcurrently available, it appears that these restructurings are likely to involve exceptional re-organisation costs in the order of £31,000,000.


Country of % equity ownedregistration & voting rights at

Activity or incorporation 31 December 2004

Engineering ProductsSubsidiaries

EnviroTech Pumpsystems Inc. Clear Liquid Pumps USA 100(trading as Weir Specialty Pumps, Weir Lewis and Weir Rubber Engineering)Weir EnviroTech Pumpsystems S.A.S. Minerals Pumps France 100(formerly EnviroTech Pumpsystems S.A.S.)

Vulco S.A. (trading as Weir Vulco) Minerals Pumps Chile 100 Warman International (India) Pvt Ltd. Minerals Pumps India 75(formerly Warman India Private Ltd.)

Weir do Brasil Ltda. Minerals Pumps Brazil 100 Weir EnviroTech (Pty) Ltd. Minerals Pumps South Africa 100 Weir Floway Inc. Clear Liquid Pumps USA 100 Weir Hazleton Inc. Minerals Pumps USA 100 Weir Netherlands b.v. Minerals Pumps Netherlands 100 Weir Pumps Ltd. Clear Liquid Pumps Scotland 100 (Pump Division including Weir Materials and Foundries) *

Weir Slurry Group Inc. (trading as Weir Slurry North America) Minerals Pumps USA 100 Weir Flowguard Ltd. Flow Control Equipment England 100(formerly Weir Valves & Controls Flowguard Ltd.)

Weir Valves & Controls France S.A.S. Valves & Controls France 100 Weir Valves & Controls UK Ltd. * Valves & Controls England 100 Weir Valves & Controls USA Inc. Valves & Controls USA 100 Weir Warman Ltd. Minerals Pumps Australia 100 Weir Warman Ltd. Minerals Pumps England 100

TechnaSubsidiaries

Entropie S.A.S. (trading as Weir Entropie) Desalination & Thermal Processes France 100 Liquid Gas Equipment Ltd. (trading as Weir LGE) * Liquid Gas Handling Scotland 100 Strachan & Henshaw Ltd. (trading as Weir Strachan & Henshaw) Mechanical Handling Equipment England 100 Weir Envig (Pty) Ltd. Water & Effluent Treatment South Africa 100 Weir Westgarth Ltd.* Desalination & Water Treatment Scotland 100

Joint VentureEuropean Nuclear Technologies Ltd Marketing Joint Venture England 50

Engineering ServicesSubsidiaries

Weir Canada Inc. (formerly Peacock Inc.) Engineering Services Canada 100 Weir Pumps Ltd. Engineering Services Scotland 100 – Engineering Services Division *Weir Services Australia Pty Ltd. Engineering Services Australia 100 Weir Services USA Inc. Engineering Services USA 100

Joint VenturesRenewable Technology Ventures Ltd. Renewable Energy Scotland 50 Wesco Abu Dhabi L.L.C. Engineering Services U.A.E. 49

AssociateDevonport Management Ltd.*‡ Refitting & Maintenance of Naval Vessels England 24.5 (holding company of Devonport Royal Dockyard Ltd.)

Joint ventures’ issued capital as follows: European Nuclear Technologies Ltd. £1,000; Renewable Technology Ventures Ltd. £1,000; Wesco Abu Dhabi L.L.C. £482,889.

Associate’s issued capital as follows: Devonport Management Ltd. £400.

* Companies whose shares are owned directly by The Weir Group PLC.‡ The results of DML have been included on the basis of the latest draft statutory accounts.

Principal Companies of the Group


Group Five Year Summary

2000 2001 2002 2003 2004£’000 £’000 £’000 £’000 £’000

Group turnover 745,936 740,444 701,210 690,718 739,350Operating profit before goodwill amortisation & exceptional items 72,875 62,742 62,235 63,524 61,251Net interest & other income (11,661) (7,202) (3,984) (3,855) (3,895)Other finance income / (costs) – 5,381 1,779 (2,969) 955Profit before goodwill amortisation & exceptional items 61,214 60,921 60,030 56,700 58,311Goodwill amortisation (6,705) (6,558) (6,853) (7,110) (7,452)Total exceptional items 2,317 (18,960) 6,250 1,663 – Profit on ordinary activities before tax 56,826 35,403 59,427 51,253 50,859Tax - charge pre exceptional items & goodwill (15,276) (14,942) (13,822) (13,051) (14,014)

- credit on exceptional items & goodwill – 6,775 4,796 4,696 77 Profit on ordinary activities after tax 41,550 27,236 50,401 42,898 36,922Earnings per share excluding goodwill amortisation & exceptional items 22.9p 22.8p 22.6p 21.4p 21.5pOrdinary dividends per share 11.0p 11.6p 12.0p 12.4p 12.8p

Total assets less current liabilitiesIntangible assets 124,988 115,150 105,509 113,933 103,916Tangible assets 127,250 116,029 97,676 102,557 109,767Investments 24,398 27,408 20,151 23,087 21,568Net current assets 220,813 200,888 235,951 104,021 193,899

497,449 459,475 459,287 343,598 429,150

Financed byShareholders’ capital 286,804 250,120 180,093 234,185 245,484Creditors falling due after more than one year 167,390 149,306 138,779 1,639 81,994Deferred tax 19,029 18,850 16,672 17,533 17,418Pension costs’ provision 2,081 – – – –Other provisions 21,204 16,851 16,442 16,957 18,589Deferred income 494 276 147 26 17Minority interest 447 422 560 567 573Retirement benefits – 23,650 106,594 72,691 65,075

497,449 459,475 459,287 343,598 429,150

The figures for 2000 have not been restated to reflect the impact of moving to average exchange rates or the changes introduced by FRS No 17 “Retirement Benefits” and FRS No 19 “Deferred Tax”.


Shareholder Information

Financial Calendar

Ex-dividend date for final dividend27 April 2005

Record date for final dividend*29 April 2005

Annual general meeting11 May 2005

Final dividend paid1 June 2005

*shareholders on the register at this date will receive the dividend

Registered office and company number149 Newlands Road, Glasgow G44 4EXRegistered in Scotland Company Number 2934

RegistrarsComputershare Investor Services PLC, PO Box 82, The Pavillions,Bridgwater Road, Bristol, BS99 7NH.

Shareholder enquiries relating to shareholding, dividendpayments, change of address, loss of share certificate etc. shouldbe addressed to Computershare Investor Services PLC at theabove address.

The registrars provide an on-line service that enables shareholdersto access details of their Weir Group shareholdings. A shareholderwishing to view the information, together with additionalinformation such as indicative share prices and details of recentdividends, should visit www.uk.computershare.com.

Dividends – payment direct to banksDividends can be paid direct to your bank or building societyaccount using the Bankers’ Automated Clearing Service (BACS).This means that your dividend will be in your account on thesame day the Company makes the payment. Your tax voucherwill be posted directly to your own address. Shareholders whohave not yet arranged to use this method of payment, cantelephone the registrars on 0870 702 0010. The Companyencourages you to have your dividends paid direct to a bank or building society.

Annual General MeetingThe Annual General Meeting will be held in the Lecture Room,The Burrell Collection, Pollok Park, Glasgow on 11 May 2005 at12 noon. Details of the resolutions to be proposed at the AnnualGeneral Meeting are contained in the shareholders’ circular.

TaxationFor the purpose of capital gains tax, the market value of The WeirGroup PLC ordinary shares as at 31 March 1982 was 29.75p.Rights issues of ordinary shares took place in April 1987 at 157pper share on the basis of one new ordinary share for every sevenordinary shares held, in July 1990 at 250p per share on the basisof one new ordinary share for every five ordinary shares held andin September 1994 at 252p per share on the basis of one newordinary share for every four ordinary shares held.

With effect from 28 June 1993, each ordinary share of 25p wassub-divided into two ordinary shares of 12.5p and the marketvalue of an ordinary share as at 31 March 1982 takes account of the sub-division.

Shareholder communicationsYou can now register to receive shareholder communications(Annual Reports, Interim Reports and other companycommunications) electronically (and also appoint a proxy andvote electronically) provided you have internet access and a valid e-mail address. To register, you will need your ShareholderReference Number, which is given on your Share Certificate or TaxDividend Voucher. This service is provided in conjunction with ourregistrars, Computershare Investor Services PLC. To obtain moreinformation and register for this service, please visitwww.uk.computershare.com.

WebsiteYou may wish to view the Company website containing details ofGroup activities and investor information including the Notice ofthe Annual General Meeting and the full Annual Report andAccounts. The address is: www.weir.co.uk.

Notes


The Weir Group PLC Report and Accounts 2004 73Designed by Design MotivePrinted by Royle Corporate Print

The Weir Group PLC149 Newlands Road Glasgow G44 4EXScotland

Telephone: +44 (0)141 637 7111Facsimile: +44 (0)141 637 2221

Email: [email protected]: www.weir.co.uk

the weir group plc excellent annual report & accounts 2004 ... · directors’ report 24 the...

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