SHARE OWNERSHIP
It is the Company's policy that executive directors should over time acquire a shareholding with a value equal to at least one and a half years' gross salary.

INTERESTS IN SHARES
As at 21 September 2004 the Company had been notified, pursuant to the Companies Act 1985, of the following material or notifiable interests in its issued share capital:

	No. of shares	Percentage of issued share capital†
The Capital Group Companies, Inc.*	55.2m	9.8%
Franklin Resources, Inc.	61.7m	11.0%
Janus Capital Management, LLC	22.9m	4.1%
Legal & General Group plc	23.5m	4.2%

*includes the interests of Capital Guardian Trust Company in 7.9% of the issued share capital

†percentage of share capital in issue on 21 September 2004

CORPORATE GOVERNANCE
The Company has during the year complied with the Combined Code appended to the April 2002 edition of the Listing Rules of the UK Listing Authority, except that no senior independent non-executive director had been recognised. A detailed statement on how the Company complies with the Combined Code and the new July 2003 Code is set out in the Directors' Report and Financial Statements 2004. PricewaterhouseCoopers LLP have reviewed the Company's statements as to compliance with the Combined Code to the extent required by the Listing Rules. The results of their review are included in the Directors' Report and Financial Statements 2004.

GOING CONCERN
The Board's review of the accounts, budgets and forward plans, together with the internal control system, lead the directors to believe that the Company has ample resources to continue in operation for the foreseeable future. The audited accounts are therefore prepared on a going concern basis.

PAYMENT OF CREDITORS
The Company's policy is to pay promptly in accordance with agreed terms. The average time to pay an invoice was 35 days for the parent company and 49 days for the Group as a whole.

CORPORATE RESPONSIBILITY
The Corporate responsibility review includes information on the Company's employment and environmental policies.

ANNUAL GENERAL MEETING
The 2004 AGM will be held at the offices of JP Morgan Chase & Co., 60 Victoria Embankment, London EC4Y 0JP on Tuesday 16 November 2004 at 2.30 pm.

SHAREHOLDERS' RESOLUTIONS
Shareholders will be asked to pass resolutions as special business at the AGM:

•	to authorise the directors to allot new shares and to renew the power granted to the directors under section 95 of the Companies Act 1985;
•	to authorise the Company to make market purchases of the Company's shares;
•	to authorise EU political donations and expenditure*; and
•	to approve a Performance Share Plan and a Co-Investment Plan*.

*The reasons for proposing the resolutions marked with asterisks above are explained in the Chairman's letter and Notice of AGM, sent to all registered shareholders, which may also be found on the Company's website, www.smiths-group.com.

An ordinary resolution will be proposed at the AGM to approve the Directors' Remuneration Report.

AUDITORS' REPORT
The report of the auditors on the accounts for the year ended 31 July 2004 was unqualified and did not contain a statement under either of sections 237(2) and 237(3) of the Companies Act 1985.

REPORTS AND ACCOUNTS 2004
The statutory Reports and Accounts for 2004 comprises this Annual Review 2004 (a summary financial statement) and the Directors' Report and Financial Statements 2004. Both documents are available in electronic form on our website, www.smiths-group.com. Printed copies of these documents may be obtained, free of charge, by writing to the Deputy Group Secretary, Smiths Group plc, 765 Finchley Road, London NW11 8DS (e-mail: secretary@smiths-group.com). Shareholders who wish to receive the statutory Reports and Accounts (free of charge) instead of Annual Reviews or vice versa in future years should write to Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA, quoting Reference 0282.

ELECTRONIC PROXY VOTING
Shareholders may submit electronic proxy votes (or consciously not vote) on all resolutions to be proposed at this year's AGM by visiting www.shareview.co.uk. CREST members, CREST personal members and CREST sponsored members should consult the CREST Manual or their sponsor or voting service provider for instructions on electronic proxy appointment and voting. Paper proxy cards have been distributed to all shareholders with the Notice of AGM as usual.

By Order of the Board

DAVID P LILLYCROP
DIRECTOR AND SECRETARY

765 Finchley Road
London NW11 8DS

22 September 2004