> making tomorrow a better place
Annual Report and Accounts 2002
www.carillionplc.com T oday Carillion is one of the UK’s leading
Business and Construction Services
companies.
Whether it’s project finance, buildings,
infrastructure, facilities management or
support services, we create teams and
partnerships to deliver high-quality
competitive services for our customers. 
T omorrow Our vision is to be a company
renowned for working in a spirit of
openness, collaboration and mutual
dependency to ensure that our customers’
success becomes our success.
01 Group financial highlights
02 Carillion at a glance
04 Chairman’s Statement
06 Chief Executive’s Review
08 Operational Review
12 Quality of life
Transport
Health
Defence
International
22 Sustainability Review
26 The Board of Directors
28 Financial Review
31 Corporate Governance Report
35 Remuneration Report
42 Report of the Directors
44 Statement of Directors’
Responsibilities
45 Independent Auditors’ Report 
to the members of Carillion plc
46 Consolidated Profit and 
Loss Account
47 Consolidated Balance Sheet
48 Company Balance Sheet
49 Consolidated Cash Flow Statement
50 Consolidated Statement 
of Total Recognised Gains 
and Losses 
50 Reconciliation of Movements 
in Consolidated Equity 
Shareholders’ Funds
51 Notes to the Financial Statements
77 Five Year Review
78 Principal subsidiaries and joint ventures
79 Principal joint arrangements
80 Shareholder Information
>
> Group financial highlights
Carillion made good progress in 2002 and the delivery of substantial
earnings growth is a significant achievement. Carillion has made 
a good start to 2003, winning new work to add to its strong 
order book. We therefore believe that the Group’s strategy remains 
sound and that despite the global uncertainty we will make further
progress in 2003.
www.carillionplc.com/investors
> Turnover +4%
£1 ,974.4million 
2001: £1,889.8 million
*Before exceptional items and goodwill amortisation
Carillion plc Annual Report & Accounts 2002
01
> Profit before tax +11% 
£50.2million
*
2001: £45.3 million
> Earnings per share +19% 
1 6.6 pence
*
2001: 14.0 pence
> Forward order book and framework contracts
£5.0 billion
2001: £5.2 billion
> Full year dividend per share +9% 
4.8 pence
2001: 4.4 pence Carillion at a glance
*Profit before exceptional items and goodwill amortisation; and excluding
Corporate Centre costs of £9.1m
02
Carillion plc Annual Report & Accounts 2002
> Turnover
£61 .6million 
2001: £43.9 million
> Operating profit
£7 .8million 
2001: £5.5 million
Investments
Equity returns on investments in 
Public Private Partnership projects.
page 8
Business overview
Turnover up 40%
Operating profit up 42%
Committed equity investment in our maturing
portfolio of 16 financially closed PPP projects
increased from £45m to £48m
Investments creating predictable long-term
earnings, which the Directors believe have 
a Present Value in the region of £115m
We report our results in three
segments – Investments, Business
Services and Construction Services.
Delivering sustainable, profitable growth through
Growing our Business Services and PPP Investment
activities organically and by acquisition
Maintaining a strong Construction Services
capability focused on higher added value 
contracts for long-term key customers
Combining our skills to provide integrated 
solutions
> 
> 
> 
> 
>
> 
> 
Operating profit*
1 Investments £7.8m
2 Business Services £39.0m
3 Construction Services £17.1m
Total £63.9m
1
2
3 Business overview
Turnover up 35%
Operating profit before exceptional items 
and goodwill amortisation up 29%
Carillion Rail launched following successful
acquisition of GT Railway Maintenance in
September 2001
Acquisition of Citex Management Services
> 
> 
> 
> 
Business overview
Turnover reduced by 16% as expected, in-line 
with strategy of focusing on higher added 
value contracts for long-term key customers
Operating profit also reduced as expected, 
but underlying margins before net bid costs
increased from 2.4% to 2.5%
As a result of our strategy, 80% of turnover 
in UK building and infrastructure projects was
generated by 20 key customers
Carillion plc
03
Annual Report & Accounts 2002
> Turnover
£821 .7million 
2001: £609.3 million
> Operating profit**
£39.0million 
2001: £30.2 million
**Before exceptional items and goodwill amortisation
> Turnover
£1 , 125.4million 
2001: £1,335.9 million
> Operating profit**
£17.1million 
2001: £22.1 million (Restated for the effect of UITF34)
**Before exceptional items and goodwill amortisation
> 
> 
> 
Business Services
Rail and road infrastructure services,
facilities management and support
services, including those relating to 
Public Private Partnership projects.
page 9
Construction Services
All contracting and related activities,
including mechanical and electrical
engineering, in building and
infrastructure, both on traditional and
Public Private Partnership projects.
page 10 Chairman’ s Statement
I am pleased to report that Carillion made
good progress in 2002, with an 11 per cent
increase in profit before tax, goodwill and
exceptional items. Earnings per share before
goodwill and exceptional items grew by 
19 per cent. 
Chairman, Sir Neville Simms
Carillion was appointed preferred bidder
for the John Radcliffe Hospital PPP
project in December 2002.
The delivery of substantial earnings
growth in 2002 is a significant
achievement, especially as the general
business climate became less certain
during the year. This success reflects 
not only the Group’s good overall
operating performance, but the progress
being made with implementation of 
the strategy we have developed and
pursued since Carillion was launched 
as an independent company in 1999,
namely to develop our Business 
Services and PPP Investment activities
alongside a well positioned Construction
Services business.
The Group has again delivered substantial
growth in its Business Services and PPP
Investment activities, both organically 
and through acquisitions, including Citex
Management Services in 2002 together
with the full year effect of the successful
acquisition of GT Railway Maintenance
and additional PPP project equity in the
second half of 2001. This growth has
more than offset a reduction in activity 
in Construction Services, resulting largely
from our strategy to focus on higher
added value contracts with long-term
customers. This has involved downsizing
in some markets and exiting others,
including the disposal of our social
housing business in the second half of
2001 and Maxxiom, our joint venture
plant hire business, in 2002.
04
Carillion plc Annual Report & Accounts 2002 2002 £1,974.4m
*Before exceptional items and goodwill amortisation 
*Before exceptional items and goodwill amortisation 
Total turnover
In the same way, the Board looks to
adopt a balanced and forward thinking
approach to all other aspects of corporate
governance. We have carried out an 
initial review of compliance with the key
recommendations of the Higgs and Smith
reports and we believe that we are largely
in compliance with their major procedural
recommendations. Before these reports
were published, we conducted our own
detailed examination of the effectiveness
of our Board and changed our working
practices where it was judged appropriate
to do so. We now propose to repeat this
review annually.
At the time of writing, it seems that
many of the recommendations of the
Higgs review will be adopted into the
Combined Code and will apply to
Carillion from the 2004 financial year.
However, we are confident of being in 
a position to report in our Report and
Accounts for the year ending 2003 as if
the revisions to the Code were in place.
Carillion works hard to maintain its
position as an industry leader in health
and safety and in managing and
improving the environmental and social
aspects of our business. We believe that
the model we have developed to link 
our improvement programmes in each 
of these areas to the Group’s business
strategy and financial performance 
has further differentiated us from our
competitors and underlined our industry
leadership in the development of a
successful and sustainable business. 
This work is summarised later in this
report and described in more detail in 
our separate Sustainability Report, which
can be found on our website.
Carillion has made a good start to 
2003 by winning a number of significant
new contracts, particularly in our growth
segments, adding to our substantial year
end order book. We therefore believe
that our strategy remains sound and that
despite the global uncertainty the Group
will make further progress in 2003.
Sir Neville Simms
Chairman
12 March 2003
The Group’s Business Improvement
Programme is also playing a key part in
the successful delivery of our strategy. 
By helping all our people to live up to 
our core values and deliver continuous
improvement in the efficiency and 
quality of the services we provide for our
customers, we are creating a culture for
success. We owe our success therefore
not only to the skills and commitment 
of our people, but also to their ability to
embrace change and continually strive to
exceed the expectations of our customers.
The Board is recommending the payment
of a final dividend of 3.3 pence per share,
making the total for the year 4.8 pence
per share, an increase of 9 per cent on
2001. The final dividend will be paid on 
27 June 2003 to shareholders on the
register at the close of business on 
2 May 2003.
The year saw significant developments 
in corporate governance with the
publication of the Higgs Review of 
the role of non-executive directors and 
the Smith Report on audit committee
governance.
The lead Carillion has taken within 
its sector on Sustainability shows the 
Board’s commitment to taking a broadly
based view of the effects of our business
activities on society and the environment.
Carillion plc
05
Annual Report & Accounts 2002
2001 £1,889.8m
2000 £1,909.0m
1999 £1,802.3m
2002 £50.2m
Pre-tax profit*
2001 £45.3m
2000 £38.5m
1999 £39.5m
2002 16.6p
Earnings per share*
2001 14.0p
2000 13.0p
1999 12.6p
2002 4.8p
Full year dividend per share
2001 4.4p
2000 4.1p
1999 4.0p Chief Executive’ s Review
Chief Executive, John McDonough
The provision of student accommodation
and other facilities at the University of
Hertfordshire is a Carillion PPP project.
Our well balanced market and 
geographical positions enable us to 
target growth areas, particularly transport,
health and defence in the UK and our
International Regional businesses where
there are increasing opportunities to export
our PPP and Business Services skills. These
four strategic growth areas are described 
in more detail later in this report.
Strategic overview
The key elements of our strategy remain
unchanged, namely to grow our Business
Services and PPP Investment activities,
organically and by acquisition, alongside 
a well positioned Construction Services
business focused selectively on higher added
value contracts for long-term customers.
We have again delivered profitable growth
in Business Services and PPP Investments,
which generated over two thirds of the
Group’s pre-tax profit. By targeting growth
markets in which we can use the strong
positions we hold to promote our full 
range of services, we secured a number of
significant new orders in 2002. We have
also benefited from our maturing PPP
portfolio and the acquisition of the
remaining 51 per cent of GT Railway
Maintenance in September 2001, which
enabled us to integrate all our rail activities
into one business, Carillion Rail, launched 
in March 2002. 
The acquisition of Citex Management
Services in August 2002 brought to the
Group a portfolio of contracts with blue
chip corporate customers and a successful
management team that complements our
existing facilities management business,
which has an extensive portfolio of public
sector contracts. 
In line with our more selective approach 
in Construction Services, we disposed of
three more non-core business – the hoists,
accommodation and general plant
businesses of our joint venture company
Maxxiom, London Paving, which carried
out minor civil engineering projects, and
Neslo, an office fit-out and partitioning
company. We continue to target higher
added value contracts for long-term
customers: over 80 per cent of our UK
turnover in building and infrastructure
projects comes from 20 key customers.
Financial Performance
The operational and strategic progress we
made in 2002 is reflected in our strong
financial performance. Profit before tax,
goodwill and exceptional items increased
by 11 per cent to £50.2 million, on
turnover some 4 per cent higher at £1.97
billion. Earnings per share before goodwill
In 2002, we built upon our success in 2001
by continuing to implement our strategy 
for growth, supported by our Business
Improvement Programme, which is
continuously improving the efficiency and
quality of service delivery to our customers.
06
Carillion plc Annual Report & Accounts 2002 and exceptional items increased by 19 per
cent to 16.6 pence. Our underlying tax rate
reduced to 29 per cent before exceptional
items (2001: 30 per cent) as we began to
access available tax losses. Earnings per
share after goodwill and exceptional items
increased by 26% to 13.2 pence. 
Net cash at the year-end was £5.3 million,
which reflects a net cash outflow in the
year of some £46 million. This was largely
due to the unwinding of positive cash flow
on several major construction contracts,
including a number of large PPP projects,
which reached or were nearing completion
during the year. Despite this cash outflow
and net investments of £72 million over 
the past eighteen months in acquisitions,
plant and equipment, Group net interest
remained positive for a second year, as a
result of our continuing focus on cash
management. 
The development of our PPP portfolio
continues to deliver long-term, high 
quality cash-backed earnings growth. 
Our total committed equity investment in
our 16 financially closed projects, increased
from £45 million to £48 million during
2002. In the light of recent transactions
involving the sale of project equity, the
Directors believe that Carillion’s equity
investments in PPP projects have a present
value in the region of £115 million. The 
net cost of bidding for PPP projects in 2002
was £15.8 million (2001: £13.9 million) 
and we have continued to work with
Government and other leaders in our
industry to reduce these costs. 
The good progress we have made with 
our Business Improvement Programme
delivered £2 million of savings in 2002, as
previously indicated. As a result of actions
already taken we will deliver the £5 million
of savings targeted for 2003. In addition,
we have identified a further £3 million of
cost savings in 2003.
Pensions
At December 2002, the various defined
benefit schemes operated by Carillion had
assets of £704 million (2001: £881 million),
with a net deficit of £51 million 
(2001: £59 million surplus), calculated 
on an FRS 17 basis. The Group
recommenced pension scheme
contributions in December 2002, the 
full year cash effect of which is expected 
to be around £15 million in 2003. A full
valuation of all the Group’s pension
schemes will be available in 2003. 
As part of a continuing review of the
various options for ensuring that the 
Group can continue to offer all our
employees good quality pension schemes,
we have decided to close two of our
defined benefit schemes to new 
employees from 1 April 2003 and to 
offer instead membership of competitive
defined contribution schemes that rank 
in the upper quartile of such schemes 
in the UK.
Health and safety
Achieving the highest standards of health
and safety is a key priority of the Board and
the whole of the Group’s management
team. Although our health and safety
record is amongst the best in the industry
sectors in which we work, we continually
strive to improve our own performance,
measured against key performance
indicators, and work with our partners,
suppliers and other stakeholders to help
improve the performance of our industry
as a whole. 
The Board sets our safety policies and
targets and the Group’s Safety 
Committee, through our Integrated
Management System, manages
implementation and delivery. In 2002, 
we also embarked upon a number of
innovative behavioural safety programmes
to complement our policies and
procedures. These programmes are 
aimed at embedding health and safety 
into our culture so that all our people fully
appreciate the importance and absolute
priority that must be given to this key area. 
Sustainability
We continue to take the lead in our sector
on sustainability, because we believe it
creates clear benefits for Carillion, our
customers, our partners, our suppliers 
and our stakeholder communities. In 
2002, we further developed our ability to
offer sustainable solutions that not only
incorporate best environmental and social
practice, but also reduce whole life costs
and improve value for money for our
customers. We have done this by using 
the model we published in our 2001
Sustainability Report that links our
sustainability targets to our strategic
business and financial objectives, supported
by analysis of the costs and benefits of
sustainable solutions. PPP projects provide 
a major opportunity to demonstrate the
business case for sustainability. For example,
at the Great Western Hospital, Swindon,
our latest PPP hospital, which received 
top marks from the Building Research
Establishment as one of the UK’s most
sustainable buildings, we identified 
tangible and quantifiable savings of 
£1.8 million as a result of adopting a
sustainable approach to its design,
construction, maintenance and operation. 
Carilllion was the leading company in 
its sector and was ranked in the top 
quintile of 122 UK companies surveyed 
in Business in the Community’s first
Corporate Responsibility Index, published 
in March 2003.
Outlook
We entered 2003 with a strong order 
book and long term framework contracts
together worth around £5.0 billion, of
which 75 percent is for 2004 and beyond
and 60 per cent is for 2005 and beyond.
We also have a large pipeline of potential
contracts, which we believe we are well
positioned to secure in 2003. In the first
two months of the year we have already
secured contracts and preferred bidder
positions for over £350 million of
commercial building work and £350 million
of road maintenance and construction. 
Despite the global uncertainty, the overall
outlook in all our main markets, both in the
UK and our International Regions, remains
positive with opportunities for further
growth. In the UK, three sectors – health,
transport and defence – in particular offer
good prospects for growth, with confirmed
Government investment in these sectors 
of some £75 billion over the next 10 years.
In order to take full advantage of the
opportunities arising from this investment,
we have created new Health and Defence
business units alongside our existing
Transport infrastructure businesses. 
Our fourth key growth opportunity lies in
exporting our PPP Investment and Business
Services skills to our International Regions,
where we have well-established businesses.
In Canada, for example, where we 
have developed a substantial highway
maintenance business and been shortlisted
for two large PPP hospitals in 2002, we
expect increasing opportunities. In the
Middle East and Caribbean we signed joint
venture agreements in 2002 to provide
extensive facilities management services 
to long-term key customers, worth up to
£500 million over 10 years. 
We therefore expect to make further
progress in our growth areas in 2003 as a
result of our well balanced geographical
and market positions and our focus on
working with long term key customers.
John McDonough
Chief Executive
12 March 2003
Carillion plc
07
Annual Report & Accounts 2002 GCHQ
The new GCHQ being built by Carillion
under the Government PPP programme 
is one of the largest PPP projects to date
and has won many awards for design,
construction and safety.
Operational Review
Investments
Turnover
£61.6 million
2001: £43.9 million
Operating profit
£7.8 million
2001: £5.5 million
Pre-tax profit
£2.5 million
2001: £1.7 million
Pre-tax profit from our PPP Investments
increased by 47 per cent, reflecting the
maturing nature of our portfolio of 16
financially closed projects. Twelve of these
projects are operating successfully with the
remaining four currently in construction.
Committed PPP equity increased from 
£45 million to £48 million during the year.
Details of our 16 financially closed PPP
projects are can be found in the Financial
Review on page 30.
In November 2002, our fifth PPP hospital,
the Great Western Hospital, Swindon, was
handed over successfully and on time. This
490 bed acute general hospital was built 
at a cost of some £100 million under a 
27-year concession, during which Carillion
will also provide non-clinical support
services. The Great Western not only set
new standards in hospital design, but also
in Sustainable Development. Working in
conjunction with The Natural Step, we
have designed and constructed one of the
UK’s most sustainable buildings, which
gained top marks for sustainability in a
recent Building Research Establishment
report. We were equally delighted to
underline our position as a PPP market
leader with five top PFI Awards in 2002,
including the premier award of PFI Project
of the Year, for our New Accommodation
Project for GCHQ, Cheltenham.
Although the flow of PPP projects reaching
preferred bidder and financial close in 
all sectors of the UK market slowed
considerably over the last 18 months, 
we believe that this was temporary. With
confirmed Government plans for over 
£75 billion of investment in our chosen 
PPP sectors of Health, Transport, Defence
and Secure Establishments over the next 
10 years, we expect the flow of projects to
increase significantly in 2003 and beyond.
In December 2002, we were selected as
the preferred bidder for the John Radcliffe
PPP hospital project, in Oxford, adding to
our successful appointment as preferred
bidder for the North East Derbyshire social
housing project in November 2002. The
John Radcliffe project, which is expected to
generate around £600 million of turnover
The Great Western Hospital
Carillion’s fifth PPP hospital completed on
time and to budget in just 37 months. 
This 490-bed hospital has been the focus 
of many leading edge construction and
sustainability innovations, including energy
saving and waste management solutions
that will ensure this hospital consumes 30%
less energy and emits 35% less carbon
dioxide compared to existing hospitals.
08
Carillion plc Annual Report & Accounts 2002
>> Channel Tunnel Rail Link
Carillion Rail is playing a major role in the
construction and maintenance of this high-
speed rail link. The construction contract 
for Phase II, worth £120 million, is being
undertaken by Carillion Rail and two joint
venture partners. Carillion Rail has also
been awarded the maintenance contract
for Phase I of CTRL.
for Carillion, including construction,
support services and our share of the
Special Purpose Company’s turnover,
represents a further significant step in the
development of our Healthcare Business.
Carillion is currently shortlisted for a 
further 14 projects with an estimated 
total construction and support services
value of around £2.4 billion, including 
two major hospitals in Canada, where
there is a growing PPP market from which
our long established Canadian business is
well placed to benefit.
Business Services
Turnover 
£821.7 million
2001: £609.3 million
Operating profit 
£39.0 million**
2001: £30.2 million*
Margin 
4.7%
2001: 5.0%
Turnover increased by 35 per cent primarily
as a result of growth in Carillion Rail 
and Carillion Services, our facilities
management business. Around half 
this growth was organic, maintaining the
average compound annual growth rate in
this segment at over 10 per cent during
the last five years. The remaining growth
resulted from the acquisition of GT Railway
Maintenance in September 2001 and Citex
Management Services in August 2002.
Operating profit increased by 29 per cent.
The slightly lower margin in 2002 reflects 
a revised method of extracting profit from
Monteray, the effect of which is to reduce
operating profit and the minority interest
charge by similar amounts.
Rail
Carillion Rail performed well in 2002. It
was voted the UK’s best rail maintenance
operator for the second year running 
in the 2002 National Rail Awards and
recently won the 2003 Network Rail
Security and Safety Award. Carillion Rail 
is now an established market leader with
maintenance contracts for over 20 per cent
of the UK’s heavy rail network. It is also 
a leading provider of rail renewal and
enhancement projects, together with 
a comprehensive range of design and
consultancy services spanning all aspects 
of rail construction and maintenance.
Carillion Rail’s success is based on 
its absolute commitment to safety,
compliance and performance through 
the delivery of high-quality value for
money services. Securing a £200 million
IMC 2000 maintenance contract for South
Wales and Marches and £130 million of
construction and maintenance contracts
for the Channel Tunnel Rail Link (CTRL),
were notable contract wins in 2002. The
CTRL contracts were particularly significant
as they substantially increased Carillion
Rail’s presence in South East England, one
of the areas due to benefit from increased
investment. A further important initiative
was the development of Eurailscout GB, 
a Carillion Rail joint venture that will 
offer vehicle-mounted high-speed track
inspection services throughout the UK.
Services are expected to start by mid 2003
and will further improve the safety and
quality of track inspection and maintenance. 
Carillion Rail therefore remains well
positioned to benefit from continuing 
high levels of expenditure on maintenance
and from planned investment to upgrade
the UK rail network, particularly the 
£7.0 billion programme for the West 
Coast Mainline, and in due course Public
Private Partnership projects.
Facilities Management
The acquisition of Citex Management
Services in August 2002 brought to 
the Group a portfolio of contracts with 
blue-chip corporate customers and an
entrepreneurial management team with 
FM Services for Healthcare
Carillion is developing innovative ways to
help deliver excellent healthcare services,
including the delivery of safe, clean, clinical
environments and the support services that
primary care professionals rely on to do
their jobs effectively.
Carillion plc
09
Annual Report & Accounts 2002
* Before exceptional operating charges of £0.4m 
and goodwill amortisation of £0.4m
** Before goodwill of £2.6m
> > Operational Review
Continued
London, Heathrow
The new £24 million hangar for Virgin
Atlantic’s Airbus A340-600, which is seven
metres longer than a Boeing 747, has 
been designed by Carillion engineers.
Marina Towers, Dubai
At the spectacular Marina Development
south of Dubai city, six luxurious towers,
between 16 and 37 storeys high, are
being built alongside the three-kilometre
marina, which will eventually be home
to a population of 80,000.
Manchester
The new magistrates’ court under
construction in Manchester, is a Carillion
PPP project and will comprise 18 court
rooms, a coroner’s court and support
facilities for 180 staff.
10
Carillion plc Annual Report & Accounts 2002
a successful track record. It therefore
complements our well-established 
facilities management business, which 
has an extensive portfolio of public sector
contracts, and strengthens our ability in
the UK and overseas to deliver further
growth in this sector. 
In 2002 there were also a number of
contract successes, including signing 
joint venture agreements to undertake
facilities management in the Middle East
and Caribbean, worth up to £500 million
over 10 years, and a seven-year contract 
to provide non-clinical services to the 
North Lincolnshire and Goole Hospitals
NHS Trust worth some £50 million.
Highways
Our highways maintenance business also
performed well in 2002. With Highways
Agency contracts for maintenance of over
20 per cent of the motorways and trunk
road network in England, it continues to
be a market leader in this sector. Our focus
on skills and innovation to provide high-
quality value for money services were key
factors in two further successes in the 
first few weeks of 2003 – being awarded
our second Managing Agent Contractor
contract by the Highways Agency, a five
year contract for Area 12, extendable to
seven years and worth up to £140 million,
and being appointed preferred bidder by
Surrey County Council for a long-term
highways maintenance contract worth 
up to £150 million. The latter is a major
success in the Local Authority market,
where we are targeting long-term
contracts for larger networks where we
can offer high quality, competitive services.
Construction Services
Turnover 
£1,125.4 million
2001: £1,335.9 million
Operating profit* 
£17.1 million
2001: £22.1 million**
Margin
1.5%
2001: 1.7%
Margin before net PPP bid costs
2.5%
2001: 2.4%
Turnover reduced by 16 per cent as a 
result of our strategy to focus on higher
added value work for long-term key
customers. Well over half of this reduction
is specifically due to the full-year effect of
disposing of our social housing business 
in July 2001, downsizing of Crown House
Engineering and completing our exit 
from small-scale civil engineering projects.
As a result of our strategy, over 80 per 
cent of turnover in UK building and
infrastructure projects was generated 
from some 20 key customers. Maintaining
a strong but selective construction
capability, broadly at its current level,
remains a key part of our strategy, as 
it enables us to provide integrated
solutions, spanning design, construction,
maintenance and operation, that maximise
value for money and minimise whole-life-
cost. We believe that this capability is
essential to the successful delivery of 
PPP projects. PPP construction accounted
for some 24 per cent of turnover in 
this segment.
Operating profit before exceptional items
and goodwill reduced to £17.1 million, but
margins before net PPP bid costs increased
from 2.4 per cent to 2.5 per cent. As the
detailed design of assets such as buildings
or infrastructure, account for the majority
of PPP bid costs, the greatest proportion 
of these costs, some £10.6 million in 
2002 (2001: £9.5 million), continue to 
be taken in this segment.
Building
Carillion Building continues to be the 
UK market leader in commercial building,
focused primarily on the office, retail and
* Before exceptional operating charges £nil 
(2001: £4.7m); and goodwill £0.1m (2001: £0.1m)
** Restated for the effects of UITF 34
>> > Canada
In Canada we have had a well-established
business for over 30 years. Its operations
include highway maintenance, building 
and civil engineering.
Copenhagen
A Carillion led consortium has built a new
metro in Copenhagen. The driverless, 
fully automated trains are carrying up to
300 passengers at such a frequency that
timetables are a thing of the past.
Carillion plc
11
Annual Report & Accounts 2002
city centre residential sectors. Our Building
Developments business is similarly selective,
specialising primarily in the regeneration of
brown field sites and developments where
risk is minimised by pre-letting or sale to
occupiers in sectors where there is
continuing demand.
In addition to maintaining successful
relationships with a number of leading
high street retailers and commercial and
residential developers, new long-term
contracts were secured with the Scottish
Prison Service and the Ministry of Defence.
The former is a framework agreement
worth up to £90 million and the latter the
largest PRIME contract let to date, worth
around £43 million, for the reconstruction
of Lucknow Barracks. Carillion Building has
also made a good start to 2003, winning
contracts and preferred supplier positions
for over £350 million of work in the first
eight weeks of the year. Therefore, with 
its good order book and well balanced
geographical and market positions, the
outlook for our building businesses
remains positive. 
Capital Projects
Capital Projects includes our UK civil
engineering and our international
businesses in Canada, the Middle East, 
the Caribbean, France and the Republic 
of Ireland.
In the UK, we remain highly selective,
targeting larger projects where our skills
and resources enable us to offer higher
added value services. We had two projects
of this kind under construction in 2002 –
the £485 million M6 Toll, which we are
building with three joint venture partners,
and the Nottingham Express Transit (NET),
a Carillion PPP project with a construction
value of some £80 million. Early in 2003,
we were awarded a £65 million contract
by the Highways Agency to upgrade the
A74 to motorway standard and complete
the “missing M6 link” between Carlisle
and Guardsmill. We expect an increasing
number of similar opportunities in 2003
and beyond as the Government brings
forward more transport schemes under 
its £185 billion 10-year Transport Plan.
Our International Regions have continued
to make progress with their strategy, 
which mirrors that of our UK business,
namely to grow their PPP Investments 
and Business Services activities alongside
their selective and well-established
traditional construction businesses. 
In Canada, the Government is following
the UK model for PPPs and increasingly
outsourcing other public services. Our joint
venture highways maintenance business
secured a further contract in Ontario,
making it the second largest maintenance
contractor in the Province, with contracts
for the maintenance of nearly 750 km of
highway, worth around £34 million per
annum. We are also currently shortlisted
for two major PPP hospitals in Canada. 
Other successes in 2002 include signing
joint venture agreements for facilities
management in the Middle East and
Caribbean worth up to £500 million 
over the next 10 years and securing a
prestigious three-year construction contract
for the first phase of the Dubai Festival City
development worth around £350 million.
Crown House 
The performance of Crown House (CH),
our specialist mechanical and electrical
services business has continued to 
improve during 2002, following the
strategic and operational changes begun 
in the second half of 2000 and fully
implemented in 2001. In 2002, CH had 
a number of notable successes, including 
a 10-year framework agreement with 
BAA worth up to £200 million, a six-year
framework with the Scottish Prison Service
worth up to £30 million and its selection
by BAA as a preferred supplier for the
construction of Terminal 5 at Heathrow.
Through the adoption of a highly 
selective approach to work winning 
CH is on course to return to overall
profitability in 2003.
> > Quality of life
In hospitals and secure establishments... 
On roads and railways... In offices and
universities... Wherever we operate, we strive
to improve quality of life for individuals and
communities. This commitment defines what
we do and how we do it. It means we work
with our customers, our suppliers and our
partners to provide competitive, high-quality
services. It’s what we do every day.
12
Carillion plc Annual Report & Accounts 2002 We will continue to implement our strategy
for growth, using our well balanced
geographical and market positions to target
four key areas: transport, health, defence
and our international businesses, especially
in Canada.
At the same time, we will develop our
facilities management business in the UK’s
private sector outsourcing market, while
maintaining a strong Construction 
Services business. 
Increasingly, we will become a sector-
focused business, using all our skills and
resources to provide competitive, high-
quality, sustainable solutions for 
our customers.
We have a stable and effective 
strategy, which is delivering sustainable,
profitable growth.
Whether it’s project finance, buildings or
infrastructure, facilities management or
support services, we create teams and
partnerships to deliver high-quality,
competitive services for our customers. 
Our well balanced geographical and market
positions enable us to target growth areas
while maintaining or developing our
positions in other important markets.
Carillion plc
13
Annual Report & Accounts 2002
> we believe in the quality of life > Carillion Our commitment to safety, quality and
innovation makes us a leading player in 
the UK’s rail and road sectors. Currently, we
maintain thousands of kilometres of railway,
motorway and trunk road nationwide. 
We strive to develop new opportunities to
enhance the UK’s transport infrastructure. 
14
Carillion plc Annual Report & Accounts 2002 We aim to use our strong market positions
to benefit from planned investment under
the Government’s £185-billion 10-Year
Transport Plan. We will seek to increase rail
volumes, particularly through adding to our
portfolio of rail enhancement projects. We
are also well positioned to take advantage
of PPP rail projects when the Strategic Rail
Authority brings them forward for tender.
In the roads market, we will be seeking 
to grow our maintenance business by
extending the scope of our motorway and
trunk road services and by securing new
contracts to maintain large Local Authority
road networks. We also expect more
opportunities to bid for road construction
projects as the Highways Agency begins 
to accelerate this element of the 10-Year
Transport Plan.
We have strong positions in UK rail 
and road infrastructure markets. Carillion
Rail maintains around 20 per cent of the
UK’s heavy rail network and it has an
extensive portfolio of enhancement
projects. For the second year running,
Carillion Rail was voted best maintenance
contractor in the 2002 National Rail
Awards; and it recently won the 2003
Network Rail Security and Safety Award,
reflecting its total commitment to safety,
compliance and performance. 
Carillion Highway Maintenance maintains
over 20 per cent of the motorway and
trunk road network in England and our
Capital Projects business is a leader in major
road construction, including PPP projects.
Our success in these markets is due to 
our commitment to safety, innovation 
and the use of new technology to deliver
high-quality, value-for-money services.
> we help people travel safely and more reliably > T ransport
Carillion plc
15
Annual Report & Accounts 2002 16
Carillion plc Annual Report & Accounts 2002
From project finance to design, construction
and facilities management, our Healthcare
Business is supporting the Government’s
efforts to improve healthcare in the UK. It’s
just another example of how we contribute
to improving the quality of life for individuals
and communities. > we help people lead healthier lives > Health
We are seeking to develop our Healthcare
business by targeting three growth markets:
• the creation of 150 Diagnostic and
Treatment Centres (DTC) – worth around
£3.5 billion annually – is an important 
new market. Having been awarded our 
first single DTC, we are now seeking to 
pre-qualify for a batch of 30 more 
• the £6 billion PPP hospital programme
will continue to provide growth
opportunities for us. We are already
shortlisted for three more PPP hospitals
worth around £1.8 billion of construction,
maintenance and facilities management
• the publicly funded ProCure 21
programme will continue to offer 
hospital construction and refurbishment
opportunities, with up to 12 framework
contracts worth some £1.4 billion per
annum due to be let in 2003. 
We are a leader in the provision of new
hospitals under the UK Government’s PPP
programme. Our involvement encompasses
project finance, construction and the
provision of facilities management services. 
In November 2002, we successfully 
handed over our fifth PPP hospital –
Swindon’s 490-bed Great Western 
Hospital – on time and to budget.
In addition to providing facilities
management services to PPP hospitals 
in which Carillion is an equity partner, we
are also a leading supplier of integrated
facilities management services to non-PPP
hospitals and other NHS Trust properties. 
We have established a new Healthcare
Business – led by an experienced and 
highly qualified team – to develop our
health sector activities.
Carillion plc
17
Annual Report & Accounts 2002 18
Carillion plc Annual Report & Accounts 2002
In the defence sector, our name is associated
with some of the Government’s most
complex and important infrastructure
projects. We are now preparing to play an
even more important role in supporting 
our customers in this sector.  We are seeking to develop our Defence
business by targeting three growth markets:
• the MoD has begun an extensive
programme of outsourcing worth over 
£6 billion following the Defence Training
Review. Carillion has recently pre-qualified
with two partners to tender for contracts 
to provide non-military training that will
arise as a result of this review 
• the PPP programme will continue to 
offer long-term concessions, worth 
around £20 billion, including
construction, maintenance and facilities
management. We are currently shortlisted
by the MoD for the Permanent Joint
Headquarters, Northwood
• the PRIME Contracting programme, worth
around £5 billion over seven years, involves
a series of major design, construction and
maintenance contracts, involving the use
of whole-life cost models.
Over the years, we have carried out a
number of complex, major infrastructure
projects for the Ministry of Defence.
Recently, we secured the prestigious 
PRIME Contract for the construction 
and refurbishment of Lucknow Barracks,
Tidworth, Wiltshire. This is our first contract
under the PRIME contracting initiative and
the largest PRIME contract let to date.
We are also an established supplier of
property management services to the
Ministry of Defence at numerous locations
in the UK.
We have created a Defence Business Unit
to develop our activities in this sector.
Carillion plc
19
Annual Report & Accounts 2002
> we are working to support a secure future > Defence > we are determined to build a better world > International
20
Carillion plc Annual Report & Accounts 2002
From Canada to the Caribbean, from 
Europe to the Middle East... We already 
have established businesses to provide
services that touch the lives of people and
communities in these international regions.
Now we are seeking to raise our profile and
grow these businesses by fostering long-term
relationships with key customers.  > Today > Tomorrow
We have well established businesses in
Canada, the Middle East, the Caribbean,
France and the Republic of Ireland. Our
strategy in our International Regions mirrors
our UK strategy: to develop Business
Services and PPP Investment activities
alongside a strong construction capability. 
For example, in 2002 we established joint
ventures in the Middle East and Caribbean
to provide facilities management services
potentially worth up to £500 million over
ten years. In Canada, we have developed a
substantial highway maintenance business,
now responsible for maintaining around
750 km of highway in Ontario; and we are
bidding for two major PPP hospitals. In the
Republic of Ireland we are bidding for a
privately financed toll road.
We will continue to seek opportunities 
to export our Business Services and PPP
Investment skills to all our International
Regions; and to develop our construction
businesses by continuing to build
relationships with long-term, key customers. 
Canada, in particular, offers significant
potential for growing Business Services 
and PPP Investments, as the Canadian
Government is pursuing similar policies 
on outsourcing to those of the UK
Government. We, therefore, expect further
opportunities in the PPP hospital market
and also in highway maintenance, where
tendering opportunities for contracts worth
over £1 billion are expected in 2003. 
Carillion plc
21
Annual Report & Accounts 2002 Introduction
We believe that our sector-leading
sustainability performance differentiates 
us from our competitors.
We therefore remain committed to
implementing the principles of Sustainable
Development in our business. Providing
more sustainable solutions for our
customers benefits all our stakeholders,
because improving the environmental and
social aspects of our performance plays 
an important part in helping us to deliver
our corporate business and financial
objectives. We have continued to develop
and refine the model first published in our
2001 Sustainability Report that links our
sustainability objectives to our strategic
business objectives. This is helping us to
establish the business case for Sustainable
Development. During 2002, we were
especially pleased to be invited by Business
in the Community to help some of its
other members develop similar models 
for their businesses.
This is the third year in which we have
reported our sustainability performance
against published targets, having
previously published five annual reports 
on our environmental performance. 
The summary reported here is supported
by two more detailed reports – our 
2002 Sustainability Review and our full
Sustainability Report, both of which can
be found on our website. 
Sustainability Review
The progress we have made in the past 
12 months towards developing a more
sustainable business is summarised here. 
You can find out more from our detailed
Sustainability Report 2002, which is 
published on our website:
www.carillionplc.com/sustainability 
Being ranked in the top quintile of the 
122 companies surveyed by Business in 
the Community in its first Corporate Social
Responsibility Index, puts Carillion amongst
those companies leading the way on socially
responsible behaviour.
100%
80%
60%
40%
20%
0%
Company Sector Overall index
CS
Key
CS: Company Strategy, Int: Integration, Man: Management, SP: Social Performance,
EP: Environmental Performance, A: Assurance
Corporate Responsibility Index
The graph below summarises Carillion’s overall performance across the corporate
responsibility agenda and compares us with other companies in the construction 
and building material sector and the overall index results.
Int Man SP EP A
Source: Business in the Community, March 2003 
Sustainability policy
Carillion provides sustainable solutions for
the way we live. We will achieve this by
Sharing our vision and policy with all
Turning our vision into reality by
embedding sustainability into
everything we do
Measuring and verifying our progress
Promoting our vision as an instrument 
of change
22
Carillion plc Annual Report & Accounts 2002 Our Sustainability Committee continues to
be chaired by Sir Neville Simms, Carillion’s
Chairman. Membership of this committee
includes Roger Robinson, the executive
board director whose responsibilities
include sustainability and other members
of Carillion’s senior management team.
Independent external perspectives are
provided by two special advisers, Jonathon
Porritt and David Cowans, both of whom
are recognised experts in sustainability.
Jonathon Porritt is Chairman of the UK
Government’s Sustainable Development
Commission and a Director of the
sustainability charity, Forum for the Future.
David Cowans, who we were pleased to
welcome to our Sustainability Committee
in 2002, is the Chief Executive of the
housing association Places for People.
Health and safety continues to be a 
key priority for the Carillion Board and 
is therefore an important aspect of our
sustainability programme. The Board 
is supported by the Group Safety
Committee, which is chaired by 
Roger Robinson, our executive board
director with responsibility for health and
safety, and its membership includes the
Managing Directors of Carillion’s individual
businesses and other senior staff.
We continue to use the Government’s 
four objectives for sustainability to 
help us identify our most important
sustainability impacts. These, together 
1. 8 targets (57%) 100% complete
2. 6 targets (43%) substantially complete,
scoring over 80%
2002 Performance: Achievement
against targets
Carillion plc
23
Annual Report & Accounts 2002
1
57%
2
43%
with our key impacts and sustainability
policy are summarised on pages 22 and 
23 respectively.
2002 Performance
For 2002, we set six corporate sustainability
objectives, supported by 14 sustainability
targets, all of which relate directly to the
Government’s objectives for sustainability.
We succeeded in meeting eight of our
targets in full and scored 80 per cent or
better in respect of the other six targets.
The average target achievement was 93 per
cent compared with 89 per cent in 2001.
The chart below shows our performance
against our targets, which have been
externally assessed and verified by 
Casella Stanger. 
In addition to our corporate objectives and
targets, each of our individual businesses
have specific targets, thus ensuring that
the principles of Sustainable Development
are pursued across the Group and at all
levels of activity and decision making. 
2002 Highlights
• 57% of sustainability targets were fully achieved,
with the remaining targets all scoring 80% or more
• By implementing our Green Transport Plan, our
average business miles per car reduced by 15% 
in 2002
• Our head office energy consumption was reduced 
by approximately 5%
• 2,327 formal training days were provided to staff 
at our training resource ‘Learning Works’
• 10 of our key suppliers attended a one-day
sustainability workshop
• Over 1% of our profits were donated (in cash or 
in kind) to community or environmental initiatives
• Over 1.1million accident free hours at The Great
Western Hospital, Swindon
• We received seven RoSPA awards, including the
President’s Award and our GCHQ site won the 
British Safety Council Sword of Honour
• We developed and delivered 16 new sustainability
‘toolbox talks’ bringing the total to 30
• Carillion Services helped Colchester General Hospital
to reduce their water bills from £2,500 to £120 per
month by correcting inefficiencies in water
distribution pipework
Supporting People and Communities 
Our objective is to attract, develop and
retain excellent people, to become an
employer of choice. In a knowledge-based
business our people are the differentiator
and the key to success. Our core values
support a culture that aims to build trust
with our customers and suppliers, works 
to develop strong relationships with the
communities in which we work and seeks
to improve quality of life for our people
and their families. Our ‘Values Award’
recognises the contributions made by our
people who have ‘gone the extra mile’ in
demonstrating their commitment to living
up to our core values. In 2002, 321 awards
were made.
During 2002 we provided 2,327 training days to staff
through our dedicated shared learning resource 
Learning Works. In addition, project staff received 
training via inductions, toolbox talks, monthly health,
safety and environment briefings and monthly Carillion
T eam Briefings.
Key impacts 24
Carillion plc Annual Report & Accounts 2002
Sustainability Review
Continued
targets geared to delivering continuous
performance improvement.
Our Business Groups are implementing
Integrated Management Systems 
based on ISO 9000 and ISO 14000
(Environment), which integrate health 
and safety into each and every aspect 
of our activities. Our management
systems are designed to be compliant
with OHSAS 18001, which Carillion
Building has achieved. 
We work closely with industry bodies, 
the health and safety Executive and
Government and share information and
good practice. We fully support, and are
working towards, meeting the challenges
set out in the Government’s ‘Revitalising
health and safety’ report (June 2000) in
conjunction with members of the Major
Contractors Group. 
Understanding how, through better
design, we can influence construction,
procurement and maintenance processes
throughout the life of our involvement in
projects, offers major opportunities to
eliminate potential health and safety
hazards. Early involvement and intervention
is a fundamental part of our strategy and
our “Safety By Design” campaign enables 
us to use our expertise to achieve cost
effective designs that deal with Health 
and Safety issues at the earliest stage to
eliminate or mitigate risks.
An increasing recognition of the importance
of work-related health across all business
sectors is redressing an historical imbalance
by increasing the emphasis placed on this
aspect of health and safety. A recognition 
of the importance of work related ill health
must be an integral part of any policy that
seeks to develop a successful and more
sustainable business. We have therefore
implemented programmes to increase
awareness and improve control to avoid
potential hazards and have started health
screening programmes.
The effectiveness of any Health and 
Safety policy also depends upon the
culture and behaviour of our employees,
which can affect their willingness to 
follow agreed procedures and use the
equipment supplied to best effect. 
We have therefore embarked upon a
number of behavioural initiatives with 
the aid of external consultants, aimed at
encouraging everyone we employ, control
or influence to be more aware of health
and safety. For example, our ‘think safe’
and ‘don’t walk by’ campaigns drive home
the message that everyone must consider
the health and safety implications of not
We have initiated a review of our
community links and policies and have
developed a Stakeholder Map, which has
enabled us, at both corporate and contract
level, to identify the people affected by our
activities or who may have an interest in
them. The maps generated will be
developed and implemented throughout
2003 to bring a more focused and positive
approach to our community actions. This
approach and the links created will also 
help our people to understand community
issues and encourage our community
stakeholders to express their views.
“Those organisations that can demonstrate 
clearly their contribution to and membership of 
broader society will prosper in the future.” 
David Cowans  who joined our Sustainability
Committee in 2002.
Business in the Community, an
organisation committed to improving the
positive impact of business on society, has
helped several of our projects focus their
community involvement where it is most
needed. Some examples are shown below.
Carillion project staff helped to improve the reading
skills of pupils from the St Thomas More Primary
School, Cheltenham as part of the Business in the
Community ‘time to read’ paired programme. 
In order to broaden the pupils’ experience as well as
improve their reading skills, the pupils were invited 
to visit a Carillion project. 25 pupils visited the GCHQ
site in Cheltenham for a lesson on site safety. “The
children really enjoy the reading sessions and being
allowed to come here is bound to broaden their
outlook on life.” Head Teacher Sarah Whittick.
As part of Carillion’s Graduate induction programme 
a team of 70 of Carillion’s graduates helped to
refurbish St. Chad’s Community Centre, in
Wolverhampton. The project was organised by 
Business in the Community. The graduates repainted
the sports hall, repaired fencing and piping, and 
cleared overgrown vegetation and litter. This exercise
also gave our graduates a basic introduction to risk
assessment and safety management.
To quote one of the graduates:
“It’s inspiring that people make this commitment 
and work hard for the well being of local people 
and their surroundings.”
Health and safety
Whilst our prime concern is the safety 
and well-being of all our employees 
and everyone affected by our activities,
Carillion also recognises that first class
health and safety standards are an
essential element of our strategy for
sustainable profitable growth.
Our health and safety policy is 
determined by the Board. The prime aim
of our policy is to embed a strong health
and safety culture into all our people 
at every level. Delivery of our policy is
underpinned by specific and measurable
only their own actions, but those 
of anyone they see who may be putting
themselves or others at risk. Seeking
feedback and listening to our employees 
is also an important part of all the
initiatives we take.
Our contribution to improving Health 
and Safety has been recognised by the
industries in which we operate. Our
successes in 2001 in the Working Well
Together Campaign (WWTC) and in
winning the Contract Journal Silver Helmet 
award has been followed in 2002 with
seven RoSPA Awards, including the
prestigious President’s Award. We also
received a Highly Commended Award at
WWTC and our New Accommodation
Project for GCHQ, Cheltenham, won the
British Safety Council Sword of Honour.
Carillion Rail also won a number of
awards, including RoSPA Gold and British
Safety Council Awards.
More detailed information on our 2002
health and safety performance can be
found in our Sustainability Report which 
is accessible on our website.
Our H&S Agenda for 2003 focuses on the
following four issues:
1) Raising the profile of Health and producing good
advice on preventing poor health due to work
activities.
2) Engaging designers in our Safety By Design
campaign and producing practical good practice
guidance. (This is the HSE’s top priority for the
construction industry).
3) Improving our accident investigation techniques to
get to the true root causes to enable preventative
measures to be put into place.
4) Continuing with campaigns to ensure that agreed
method statements and good practice becomes
embedded in the behaviour and culture of people
under our control.
Prince Albert School and 
Carillion plc Partnership
Carillion assisted pupils at Prince Albert School, in
Birmingham, to develop ideas for the redevelopment 
of derelict land near the school into a multi-purpose
community building.
Pupils were asked to develop a plan for the project
which included:
• a cost breakdown (budget £5,000,000)
• basic floor design
• a scale model
To learn about the practical aspects of construction, 
the pupils visited Birmingham Business Site where 
they helped the project team to build a wall. During
their visit the children learnt about health and safety,
building materials and completed a drawing exercise.
At the end of the project the teams presented their
plan and models to a panel of judges, comprising 
staff from the school and Carillion, who awarded 
a prize for the best performance.
Supporting the Environment 
Our activities have wide-ranging effects
on the environment and contribute to 
the quality of life we expect from our Carillion plc
25
Annual Report & Accounts 2002
Waste Management
• We have appointed a Supply Chain
Category Manager with responsibility 
for waste and established a task force 
to review how we gather waste
management information across 
the Group. This will improve our
understanding of the costs and benefits
of waste management and help further
minimise waste. 
• We have developed new waste
management guidance and set more
challenging targets for reducing waste
in our offices and on project and
contract sites. 
Sustainable Design
• The Great Western Hospital, Swindon,
has been designed to consume 
30% less energy and emit 35% less
carbon dioxide.
• We have reviewed case studies within
our businesses and our industry and
developed practical guidance for use on
all our projects to maximise the benefits
of sharing best practice. 
• Two of our staff became approved
BREEAM and EcoHomes Assessors
(assessment methods for the
environmental performance of buildings
or homes) enhancing our design
capability. For example, the Land Registry
office complex in Plymouth was able to
boost its BREEAM rating from pass to
excellent with our help.
Supporting Prosperity
Carillion, together with its partners,
subcontractors and suppliers, has a
considerable influence on the prosperity 
of the people we employ and the
communities in which we work and our
employees live. In 2002, we have focussed
our efforts on demonstrating the benefits
of becoming a more sustainable business,
not only to Carillion and its investors, 
but also to our customers and suppliers. 
We have completed a DTI funded 
project, in partnership with Forum for 
the Future, Casella Stanger and the
Construction Industry Research and
Information Association (CIRIA), in which
we researched and developed a process for
quantifying the environmental and social
costs and benefits of adopting sustainable
solutions for construction projects. This 
has helped us to demonstrate the business
case for sustainable construction. The full
project report is available on our website.
The future
Our constant challenge is to ensure that 
of the advances we have made, the
lessons we have learnt and the innovative
solutions we have developed are properly
assimilated into everything we do. 
built environment. Therefore, we have a
major opportunity to make buildings and
infrastructure more sustainable, which 
in turn contributes to the development 
of sustainable communities. 
Over the past eight years we have made
significant progress in terms of both
understanding and improving our
environmental performance against
specific targets and have reported the
results annually. A full report on our
environmental performance in 2002 
can be found in our Sustainability Report
accessible on our website. Below we 
have highlighted a few examples of 
our achievements in 2002.
Resource Consumption
• Our carbon dioxide (CO 2
) emissions from
company car mileage reduced by 20%.
• Our head office energy consumption
reduced by 5%.
• Our commitment to preventing 
pollution continued, with Carillion Rail
replacing traditional oils and greases
used to lubricate rail points with a
biodegradable alternative.
• We have developed a ‘Supplier Score
Card’ to assess and improve the
performance of our key suppliers, 
which helps us to manage the impacts
of the supply chains we use to procure
products and services. 
Biodiversity and Wildlife
• We continued our successful partnership
with The Wildlife Trusts, with our annual
donation of £25,000 being used to
support five new projects, building 
on the four projects started when the
Carillion Natural Habitats initiative was
launched in 2001.
• Carillion Highway Maintenance worked
with the Highways Agency to develop 
a Biodiversity Action Plan. 
Wom Brook Water Vole Project
Staffordshire Wildlife Trust won a £4,496 grant from
the Carillion Natural Habitats Fund to help protect
endangered water voles within the Wom Brook in
Wombourne, South Staffordshire.
Since 1996 the number of water voles in the area 
had decreased by 73%. The Water Vole project
included restoring two ponds by utilising willow
weaving to protect the eroding bank. In addition, 
a notice board was erected to increase public
knowledge and support of the project.
Carillion staff helped the team by digging ponds 
and clearing the site of silt.
“We hope this project helps the survival of this
endearing mammal and raises awareness among the
public about wildlife.” Kate Dewey, Project Co-ordinator.
“The situation is critical for rare and declining species such
as the water vole. Chalk grassland and limestone pavement
is also in need of urgent help. I am delighted that Carillion
have awarded grants to five of our Wildlife T rusts to help 
us protect these threatened species and habitats.” 
Dr Simon Lyster , Director General for The Wildlife T rusts.
We will therefore continue to develop
ways in which we can enhance
shareholder value by improving our 
social, environmental and economic
performance and to quantify the 
business benefits of this in terms of
sustainable, profitable growth.
At Group level, we have set 18
sustainability targets for 2003 which 
reflect the business plans and sustainability
targets set for our individual businesses.
Our 2003 targets also focus on deepening
our understanding of thoses activities that
will help us to demonstrate the business
case for sustainability and on their
implementation.
We will continue to work with our
customers, partners and suppliers to help
us understand how we can deliver more
sustainable solutions.
2002- 2003 Objectives
Supporting Communities
• Communicate and share our sustainability strategy,
vision and policy and continually improve the way 
in which we engage with our stakeholders
Supporting the Environment
• Minimise negative impacts of our services 
and activities on the environment
• Reduce waste production 
• Reduce energy consumption
Supporting Prosperity
• Demonstrate the business case for sustainability
• Engage our supply chain in our sustainability
programme to improve the sustainability 
performance of our suppliers to support our 
own sustainability targets Sir Neville Simms 
Chairman, age 58. Sir Neville was
appointed to the Board in May 1999 and is
Chairman of the Sustainability Committee,
the Nominations Committee and is a
member of the Audit and Remuneration
Committees. His career has been spent in
the construction industry having originally
joined Tarmac in 1970 becoming Chief
Executive in 1992 and Deputy Chairman 
in 1994. Sir Neville is also Chairman of
International Power plc and a Director of
the Foundation for the Built Environment
and was until May 2002, a Member of 
the Court of the Bank of England. He is 
a Chartered Engineer. 
John McDonough
Chief Executive, age 51. Appointed to 
the Board in January 2001, John was
formerly Vice President, Integrated Facilities
Management, Europe, the Middle East 
and Africa of Johnson Controls Inc. John is
also a member of the CBI’s Public Services
Strategy Board. 
Chris Girling
Finance Director, age 49. Appointed to 
the Board in November 1999, Chris was
previously Group Finance Director of Vosper
Thornycroft Holdings plc. Chris is also a
Non-Executive Director of Barlow Group
Limited. He is a Chartered Accountant and
has a MBA. 
Roger Robinson
Executive Director, Construction Services,
age 51. Appointed to the Board in May
1999. Roger has responsibility for health
and safety and Sustainability matters. He 
is a member of the Government Taskforce 
on Modern Apprenticeships and is a
Lieutenant Colonel in the Royal Engineers
Staff and Logistics Corp. Roger is a Fellow
of the Institution of Civil Engineers.
Roger Dickens 
Non-Executive Director, age 55. Appointed
to the Board in May 2000, Roger is
Chairman of the Audit Committee and 
a member of the Remuneration and
Nominations Committees. Roger is
Chairman of iSOFT Group PLC and West
Bromwich Building Society and a Director 
of NEC Group Limited. He is a Chartered
Accountant. 
Jean-Paul Parayre 
Senior Non-Executive Director, age 65.
Jean-Paul was appointed to the Board 
in May 1999 and is a member of the 
Audit, Remuneration and Nominations
Committees. Jean-Paul is also Chairman 
of Vallourec SA., a Director of Bollore
Investissement, Stena UK, Stena Line and a
Supervisory Board member of Peugeot S.A. 
Andrew Parrish 
Non-Executive Director, age 57. 
Andrew joined the Board in March 2000
and is Chairman of the Remuneration 
Committee and a member of the Audit
and Nominations Committees. He was
previously Group Chief Executive of 
Senior plc and is a member of the CBI’s
Manufacturing Council. Andrew is a
Chartered Engineer.
The Board of Directors
26
Carillion plc Annual Report & Accounts 2002 Carillion plc
27
Annual Report & Accounts 2002
12
34
56
7 1 Sir Neville Simms
2 John McDonough
3 Chris Girling
4 Roger Robinson
5 Roger Dickens CBE DL
6 Jean-Paul Parayre
7 Andrew Parrish Financial Review
Accounting policies
During the year, the Group has adopted
Financial Reporting Standard (FRS) 19
‘Deferred tax’. This requires full provision
to be made for deferred tax arising 
from timing differences between the
recognition of gains and losses in the
financial statements and their recognition
in the computation of tax. Under the
previous policy, timing differences were
recognised on a partial provision basis.
The impact of adopting FRS 19 is set out
in Note 31 to the financial statements 
on page 76. There is no effect on the
current year, but the cumulative impact
of the prior year adjustment is an
increase in the deferred tax provision of
£9.1 million, which has been charged 
to the profit and loss account reserve
brought forward.
The adoption of UITF 34 issued in 
May 2002, has resulted in a change 
in accounting policy in respect of 
pre-contract costs. These costs are
expensed as incurred until the Group is
appointed as preferred bidder. Where
these costs are recovered at financial
close, they are initially applied against 
the relevant asset included in stocks. 
Any surplus is then treated as deferred
income and released to the profit and
loss account over the period of the
contract to which they relate. Costs
incurred post our appointment as
preferred bidder are included in stocks,
provided the asset recognition criteria 
are met. The effect of adopting UITF 
34 was to reduce reported profit before
tax by £1.1 million in 2002 and by 
£0.3 million in 2001. It had no impact 
on the Group’s cash flows.
Full details of the Group’s accounting
policy for bid costs is given in Note 1 
to the financial statements on page 53
and the effect of the change is set out 
in Note 31 on page 76.
Details of the Group’s other key
accounting policies can also be found 
in Note 1 to the financial statements on
pages 51 to 53.
International Accounting Standards
In June 2002 the European Council of
Ministers finalised the legislation that
requires listed European Union companies
to adopt International Accounting
Standards (IAS) by 2005. UK accounting
standards are based on similar principles
to IAS but there are some differences,
which may ultimately require adjustments
to reported results, presentation and
disclosure. The Board and the Audit
28
Carillion plc Annual Report & Accounts 2002
Finance Director, Chris Girling Committee continue to be informed of
the latest developments in this area to
ensure that the Group is at the forefront
of best practice. Following a detailed
review in 2002, plans are being
implemented in 2003 to ensure the
Group makes the transition to IAS by 
the 2005 deadline in a considered and
co-ordinated manner.
Acquisitions and Disposals
In August 2002, the Group acquired 
a portfolio of facilities management
contracts from Citex Management
Services for £8.9 million generating
goodwill of the same amount, which
is being amortised over six years. This
amortisation period represents the
minimum period over which the Group
will derive economic benefit from the
acquisition.
The Group’s strategy of disposing of 
non-core businesses has continued in
2002. The Group’s joint venture
company, Maxxiom, sold its hoists,
accommodation and general plant
business to Hewden Stuart in September
2002 for £9.0 million. The sale, together
with the costs associated with exiting
from the remainder of the business 
gave rise to a £5.0 million exceptional
charge. In addition, the Group sold a
number of smaller non-core businesses
generating total proceeds of £0.7 million
and resulting in a loss on disposal of 
£0.3 million.
Taxation
The effective underlying rate of tax for
the Group in 2002 is 29%. This is slightly
below the UK standard rate of tax due
primarily to the utilisation of losses for
which deferred tax assets had not
previously been recognised. A full
reconciliation of the Group current 
year tax charge is given in Note 8 to 
the financial statements on page 58.
Dividends
The Board is proposing a final dividend
for 2002 of 3.3 pence, bringing the 
total dividend to 4.8 pence compared to
4.4 pence in 2001. The total dividend
represents a 9 per cent increase on 2001
and is covered 3 times by profit for the
financial year before exceptional items. 
Cash Flow
Net cash inflow from operating activities
before exceptional operating expenditure
amounted to £4.6 million. This shows a
reduction of £56 million compared to
2001, due to the unwinding of positive
cashflow on a number of large
construction contracts either completed
or nearing completion in 2002. Major
items of non-operating cash expenditure
included £8.9 million on the acquisition
of Citex Management Services and 
£21.0 million of capital expenditure
relating primarily to rail maintenance plant
and IT equipment. Corporate tax and
equity dividend payments amounted to
£9.0 million and £9.3 million respectively.
Overall, net cash, which excludes finance
leases, reduced by £46.3 million to 
£5.3 million at the year end. 
Treasury Policy and Risk Management
The Group has a centralised treasury
function which provides a service to 
the corporate centre and operating
businesses. Its principal functions are 
to manage the funding and liquidity of
the Group, to reduce the risks arising
from foreign exchange and interest rate
exposures and the provision of contract
bond and guarantee facilities. Treasury 
is not a profit centre and does not 
enter into speculative transactions but 
operates within a series of treasury
policies agreed by the Board. Full details
of the Group’s financial instruments and
risk management strategies are given in
Note 21 to the financial statements on
page 65 to 67.
In January 2002, new revolving credit
facilities totalling £145 million were put
in place which mature in 2005. These
new facilities give the Group access 
to committed credit facilities totalling 
£168.5 million, of which £107 million
remained undrawn at 31 December 2002.
Pensions
The Accounting Standards Board
announced in November 2002 that the
transitional arrangements of Financial
Reporting Standard (FRS) 17 ‘Retirement
benefits’ have been extended. As a
result, the requirements of FRS 17 will
not become mandatory until accounting
periods beginning on or after 1 January
2005. The second phase transitional
disclosures required by FRS 17 are given 
in Note 30 to the financial statements on
pages 74 to 76.
The disclosures required by FRS 17
indicate that the Group’s various schemes
had assets of £703.9 million at December
2002 compared to £881.4 million at
December 2001, and a net deficit of
£50.9 million compared to a net surplus
of £59.2 million. Had the Group adopted
the requirements of FRS 17, the pension
costs charged to the profit and loss
account would have been £11.9 million,
£3.7 million higher than the actual
charge under SSAP 24.
The reduction in investment returns over
the last 18 months caused by falls in
equity markets has affected the funding
position of the Group’s pension schemes.
The Group recommenced contributions
to its Staff and ‘B’ pension schemes in
December 2002 and intends to close
both schemes to new employees on 
31 March 2003. An actuarial valuation 
of these schemes at 31 December 2002
is being undertaken. The results will 
be known in April 2003 and will be
incorporated into the financial statements
for the 2003 year end.
Public Private Partnerships (PPP) 
and the Private Finance Initiative
In joint venture with its partners, Carillion
forms Special Purpose Companies (SPCs)
to deliver PPP projects under long-term
concession agreements. The length of
these concessions is typically between 
25 and 30 years. The Group takes equity
interests in these SPCs in the form of
shares and loans, with the loans being
subordinated to the SPCs external
borrowings. Normally the Group limits 
its equity interest to 50 per cent. The
loan advanced to an SPC is repaid 
during the course of the concession 
and, over that period, will yield a market
rate of interest. Net loan advances of
£2.5 million were made to SPCs during
the year, bringing the total loan advances
across our portfolio of investments to
£8.0 million at the year end.
Funding for PPP projects is obtained by
an SPC in the form of long term bank
loans or corporate bonds on a non-
recourse basis to the joint venture
partners and is secured on the assets 
of the SPC. Consequently, the Group’s
financial exposure to the external
borrowing in a particular SPC is limited 
to its equity interest in that particular
SPC. At 31 December 2002 the Group’s
share of non-recourse debt within PPP
SPCs amounted to £506.4 million as
disclosed in Note 14 to the financial
statements on page 62. Where Carillion
undertakes construction, maintenance 
or facilities management contracts for
SPCs, trading is on an arms length basis.
Details of the major transactions in the
year between the Group and its SPCs 
are given in Note 27 to the financial
statements on page 71.
The income stream generated by an SPC
from the customer during the operational
phase is determined by the terms of the
concession agreement with deductions
being made should the SPC fail to
achieve predetermined performance
targets. The base income stream is
Carillion plc
29
Annual Report & Accounts 2002 PPP Project Portfolio
31 December 2002
Carillion’s
share of FM & 
Carillion non-recourse Maintenance
Concession equity Carillion off balance Value to
Financial period interest equity sheet debt Carillion
PFI/PPP project Close Date Status Years £m % share £m Accounting* £m
Roads
M40 Motorway 1997 Operational 30 13.6 50.0 64.1 FA 175.0
A55 North Wales 1998 Operational 27 6.3 50.0 55.0 FA –
Other Transport
Nottingham Express Transit (NET) 2000 In construction 30 3.4 12.5 20.2 FA –
Hospitals/Healthcare
Derwent Hospital 1995 Operational 40 – 25.0 – N/A 2.0
Darent Valley Hospital 1997 Operational 25 4.8 30.0 28.7 FD 158.0
Glasgow Southern General 1999 Operational 27 0.8 50.0 5.9 FD 35.0
Great Western Hospital, Swindon 1999 Operational 27 4.6 33.3 40.1 FD 168.0
Harplands Hospital 1999 Operational 29 1.2 50.0 10.0 FD 44.0
Secure accommodation
HMP Altcourse 1995 Operational 25 1.2 50.0 42.2 FD 8.0
Medway Secure Training Centre 1997 Operational 15 1.4 50.0 4.9 FD 1.0
Rainsbrook Secure Training Centre 1998 Operational 15 0.8 50.0 3.0 FD –
HMP Rye Hill 1999 Operational 25 1.2 50.0 24.6 FD 5.0
Manchester Magistrates Court 2001 In construction 25 0.8 33.3 11.1 FD –
Other accommodation
University of Greenwich 1995 Operational 30 – 100.0 – N/A –
New Accommodation Project (GCHQ) 2000 In construction 30 11.8 40.0 165.9 FD 49.0
University of Hertfordshire 2002 In construction 32 3.2 50.0 30.7 FD 55.0
55.1 506.4 700.0
determined from a sound business
model, which is agreed with the
customer at the inception of the project.
The income stream generated enables
the debt within the SPC to be fully
serviced and repaid over the life of the
concession as well as delivering a return
to the joint venture partners.
The Group’s share of the operating 
profit in SPCs in 2002 amounted to 
£12.5 million compared to £10.4 million
in 2001. After taking the SPC’s net
interest charge into account, the Group’s
share of profit before tax for its 12
operational SPC entities amounted to
£8.5 million compared to £7.0 million 
in 2001. The table below summarises 
the details of our PPP projects.
Performance Measurement
As well as routine business planning,
budgeting and quarterly forecasts, 
the Group employs a number of
comparative measures for assessing
business unit performance. These 
include comparisons of long-term
contract profit and cash performance 
to original estimates, sector margin 
and net operating asset performance
targets, internal rates of return on UK
PPP and other investments versus the
Group’s weighted average cost of capital
and controls over PPP bid costs by
reference to expected future discounted
cash flows. The primary tools in working
capital management are outstanding
debtor and trade creditor days.
Going Concern
The Directors confirm that, after making
enquiries, they have a reasonable
expectation that the Company and 
the Group has adequate resources to
continue in operational existence for 
the foreseeable future. For this reason
they continue to adopt the going
concern basis in preparing the accounts.
Chris Girling
Finance Director
12 March 2003
30
Carillion plc Annual Report & Accounts 2002
*FA: Fixed Asset; FD: Finance Debtor General principles
The Board is firmly committed to high standards of corporate governance. The provisions of the Combined Code, as adopted by 
the UK Listing Authority, have been applied by the Company as detailed below and in the Remuneration Report.
During the year to 31 December 2002, the Company complied with the provisions set out in Section 1 of the Combined Code 
other than in respect of the duration of two of the Executive Directors’ service contracts. In accordance with the Combined Code, 
the Chief Executive’s service contract is terminable by one year’s notice. The service contracts of Chris Girling and Roger Robinson 
however are terminable in normal circumstances by two years’ notice in recognition of the long term nature of many of the 
Group’s project-related activities.
A detailed internal review of the Board’s procedures and effectiveness was conducted during the year by the Chairman in conjunction
with the Company Secretary. The review took into account the views and preferences of each of the Directors and identified a number
of areas where it was possible further to enhance the effectiveness of the Board’s procedures and working practices. Changes were
successfully introduced in those areas, and it is the Board’s intention to repeat the review annually.
Directors
The Board
The Company is headed by a Board comprising three Executive and four Non-Executive Directors. Throughout 2002, the Chairman
and the Non-Executive Directors comprised more than half of the Board and this continues to be the case. With the exception of 
the Chairman, who previously was Group Chief Executive, each of the Non-Executive Directors is considered to be independent 
of management. They each have wide areas of experience and have no business or other relationship that could materially interfere
with their independent judgement. Jean-Paul Parayre is the Senior Independent Non-Executive Director.
The Board has a programme of seven meetings during the year and also meets on an ad hoc basis as required. A formal schedule 
of matters reserved to the Board for consideration and decision is maintained and all Directors have access to the Company Secretary,
who is responsible to the Board for ensuring that agreed procedures and applicable rules and regulations are observed. The appointment
and removal of the Company Secretary are matters for the Board as a whole. Any Director may, in furtherance of his duties, take
independent professional advice where necessary, at the expense of the Company.
The Board is provided with regular and timely information on the financial performance of businesses within the Group, and of the
Group as a whole, together with reports on other trading matters, markets, sustainability and other relevant issues. In addition, the Board
reviews, determines and approves Company strategy, annual budgets and participation in major project undertakings as appropriate.
The Board has established a number of committees including the following:
The Remuneration Committee which comprises all the Non-Executive Directors is chaired by Andrew Parrish. It has a key role 
in reviewing and advising the Board on the appropriate remuneration for the Executive Directors of Carillion plc. Further details 
on remuneration issues are given on pages 35 to 41.
The Audit Committee which comprises all the Non-Executive Directors is chaired by Roger Dickens. Its terms of reference require
that it meets at least three times each year and include the review of the annual and interim financial statements, consideration of
the impact of changes to accounting regulations, the operating, financial and accounting policies of the Group and its statutory and
other external compliance requirements. The Committee has responsibility for risk management and for the role of the internal audit
function and reviews all aspects of internal audit activity. The Committee also reviews the scope and results of the external audit and
its cost-effectiveness, and ensures that the internal and external audit functions are complementary. The independence and objectivity
of the external auditors are monitored and their services, including non-audit services, are reviewed so as to ensure a proper balance
between objectivity and value for money.
The Nominations Committee which comprises all the Non-Executive Directors is chaired by Sir Neville Simms. It considers the size
and structure of, and any new appointments to, the Board.
Carillion plc
Corporate Governance Report
Carillion plc Annual Report and Accounts 2002 31 Carillion plc
Corporate Governance Report continued
Other Board Matters
Policy on external appointments
Recognising that external appointments can broaden the knowledge of the Executive Directors, and can therefore be of benefit to the
Company, Executive Directors at the discretion of the Board, are permitted to accept a limited number of such external appointments
and retain the fees received for them. Chris Girling has such an appointment as a Non-Executive Director of Barlow Group Limited.
Nomination and remuneration of Directors
The appointment of a Director is a matter for resolution by the Board as a whole, taking advice from the Nominations Committee.
In the case of Non-Executive Directors, initial appointments are normally for three years; re-appointment is subject to review and is
not automatic. As an exception to this, the Chairman has a service contract which commenced on 1 February 2001 for a period of
two years and which continues thereafter if both parties agree unless and until terminated by either party giving one year’s notice.
The fees of Non-Executive Directors are determined by the Board as a whole, taking into account the commitment required and
participation in the work of committees and other advisory services in relation to the business of the Group. In advising the Board 
on such fees, it is the policy of the Executive Directors to seek independent external advice concerning the appropriateness of 
the amounts by comparison with general practice. The level of fees currently payable to the Non-Executive Directors is based 
on independent external advice.
The remuneration of the Directors is dealt with in the Remuneration Report on pages 35 to 41.
Retirement of Directors by rotation
The Articles of Association of the Company provide that each Director shall retire from office and shall be eligible for re-election at
the third Annual General Meeting after the meeting at which he was elected or last re-elected.
All Directors appointed by the Board are subject to retirement and election by shareholders at the first Annual General Meeting
following such appointment. 
Details of the Director retiring and seeking re-election at the Annual General Meeting to be held on 14 May 2003 are given in the
Report of the Directors on pages 42 and 43 respectively.
Training of Directors
Training in matters relating to the directorship of a listed company is provided for all members of the Board where appropriate.
Relations with shareholders
In addition to communicating with shareholders generally from time to time, the Executive Directors regularly meet with representatives
of major shareholders in order to foster the mutual understanding of objectives. 
Private and institutional shareholders are encouraged to attend the Company’s Annual General Meeting.
The Company complies fully with the provisions of the Combined Code in respect of the notice, content of agenda and conduct of its
Annual General Meetings. The Chairmen of the Remuneration and Audit Committees will be present at the Annual General Meeting
on 14 May 2003 to respond to shareholders’ questions.
Annual Report and Accounts 2002 32
Carillion plc Accountability and Audit
Internal controls
The Board is ultimately responsible for the Group’s system of internal control. This responsibility includes clearly determining the
control environment, which is the foundation for an effective system of internal control, and reviewing annually the effectiveness of
the internal control system. However, such a system is designed to manage rather than eliminate the risk of failure to achieve business
objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.
Following publication of the Turnbull Guidance for Directors Internal Control: Guidance for Directors on the Combined Code, the
Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks (both financial and 
non-financial) faced by the Group. This process includes joint ventures (full risk assessments prior to financial close and during
contract delivery) and the overseas businesses (as part of strategic and international risk assessment procedures). The process has
been in place for the year under review and up to the date of approval of the Annual Report and Accounts. This process is regularly
reviewed by the Board and accords with the Turnbull Guidance. It is policy to bring organisations acquired within the Group’s system
of internal control as soon as practicable and in any event within twelve months of acquisition. For example, the operational and
financial controls at GT Railway Maintenance (the remaining 51 per cent of which was acquired in September 2001 and which 
now forms part of Carillion Rail) have been reviewed and are considered to meet Carillion standards.
The Board has reviewed the effectiveness of the system of internal control. In particular, during 2002 the process for identifying and
evaluating the significant risks affecting the business has been reviewed and updated, together with the policies and procedures by
which these risks are managed. 
Assurance over the design and operation of internal controls across the Group is provided through a mix of techniques:
• Internal Audit carries out audits to assess the adequacy and effectiveness of internal controls and reports its findings to management,
the Executive Directors and the Audit Committee. The scope of this work is planned primarily to cover the key risks faced by the
business, but is supplemented by cyclical reviews of core financial processes. The Audit Plan is presented to and approved by the
Audit Committee annually;
• recommendations to improve the system of control are made by Internal Audit. The implementation of these recommendations 
is followed up and progress regularly reported to the Executive Directors and the Audit Committee;
• Internal Audit independently reviews the risk identification procedures and control processes implemented by management; 
• a process of Control Risk Self-Assessment is used in the Group. This process has been reviewed and changed during 2002 to enhance
the quality of information received, facilitate validation of the information and enhance the development of best practice internal
control across the Group. Directors and senior managers are required to confirm annually, in writing, that risk management
processes and appropriate controls are in place and are operating effectively; and
• Internal Audit advises on aspects of the design and application of internal controls in key business projects and on policy and
procedure changes.
Internal Audit reports to the Audit Committee on a regular basis. The Audit Committee reviews the assurance procedures and ensures
that the level of confidence required by the Board is obtained. It also ensures that the financial reporting process is credible and reliable.
The Audit Committee presents its findings to the Board regularly and the Head of Internal Audit has direct access to the Audit Committee
members if and when required.
The Group Head of Risk (a role separated from the Head of Internal Audit in 2002) is responsible for advising on strategic risk issues
across the Group and within business groups and for oversight of risk training. The Group Head of Risk is also responsible for carrying
out an independent appraisal of all projects before submission to the Major Projects Committee of the Board (see below). This appraisal
ensures that the differentiating factors of the Group’s offer have been properly identified, so maximising the opportunities available; 
it also involves ensuring that all inherent and residual risks associated with the project have been properly identified and considered.
A committee of the Board, known as the Major Projects Committee, acts as the sanctioning body for major commitments and
transactions including capital expenditure, major contracts and company and business acquisitions and disposals. This committee 
has been delegated authority up to specified levels, beyond which Board approval is required.
Practical guidance for all staff is maintained in Group policy and procedure documents regarding the authorisation levels for
commitments, contract selectivity and bidding, the provision of guarantees and management accounting as well as reporting and
resolution of suspected fraudulent activities. Wherever possible, the Board operates a policy of prosecuting individuals found to have
defrauded the Company. Learning points for management are identified and action plans are implemented.
Management is responsible for the identification and evaluation of significant risks applicable to its areas of business together with
the design, operation and monitoring of suitable internal controls. These risks are continually assessed and may be associated with a
variety of internal or external sources, including control breakdowns, disruption in information systems, competition, natural catastrophe
and regulatory requirements. Management is also responsible for timely and accurate reporting of business performance and for
ensuring compliance with the policies set by the Board in its areas of business. Regular performance review meetings are held where
management report to the Executive Directors on business performance, risk and internal control matters. The results of these
meetings are presented to the Board.
Carillion plc
Carillion plc Annual Report and Accounts 2002 33 Annual Report and Accounts 2002 34
Carillion plc
Corporate Governance Report continued
Carillion plc
The Executive Directors report to the Board on material changes in the business and the external environment that affect significant 
risks. The Finance Director provides the Board with regular financial information, which includes key performance indicators (see Financial
Review on page 30) and a summary of risk. Where areas for improvement are identified, the Board considers the recommendations
made both by the Executive Directors and by the Audit Committee.
Audit independence
The Audit Committee and Board place great emphasis on the objectivity of the Group’s auditors, KPMG Audit Plc (‘KPMG’), in their
reporting to shareholders.
The Audit Committee meets three times a year and the KPMG Audit Director and manager are present at these meetings to ensure 
full communication of matters relating to the audit.
The overall performance of the auditors is reviewed annually by the Audit Committee, taking into account the views of management,
and feedback is provided to senior members of KPMG unrelated to the audit. This activity also forms part of KPMG’s own system 
of quality control. The Audit Committee also has discussions with the auditors, without management being present, on the adequacy 
of controls and on any judgemental areas.
The scope of the forthcoming year’s audit is discussed in advance by the Audit Committee. Audit fees are reviewed by the Audit
Committee after discussions between the businesses and the local KPMG offices and are then referred to the Board for approval.
Rotation of Audit Director’s responsibilities within KPMG is required by their profession’s ethical standards and is actively encouraged 
and has taken place.
Assignments with KPMG and its associates have been and are subject to controls by management that have been agreed by the 
Audit Committee so that audit independence is not compromised. In summary the procedures are:
• audit related services: as auditors this is the main area of work of KPMG and its associates. If any additional accounting support is
required then this is considered competitively;
• tax consulting: Carillion uses KPMG and its associates in cases where they are best suited, but the Group also uses other tax consultancies.
Significant pieces of tax work are evaluated competitively; and
• general and systems consulting: all significant consulting projects are put out to competitive tender. Of the consulting work that has
taken place in the Group in recent years, KPMG and its associates have had only a small part.
Apart from audit fees, the Group Finance Director must approve work carried out by KPMG and its associates anywhere in the 
Group in excess of a predetermined threshold and part of this review is to determine that other potential providers of the services 
have been adequately considered.
Taken together these procedures provide the Audit Committee with adequate confidence in the independence of KPMG in their
reporting on the audit of the Group.
Health and safety
A review of the Group’s progress on health and safety, environmental and social performance is contained in the Sustainability Review 
on pages 22 to 25.
RF Tapp
Secretary
12 March 2003 Carillion plc Annual Report and Accounts 2002 35
This report has been prepared in accordance with the Combined Code.
The Board is responsible for determining policy for remuneration of the Directors of Carillion plc and key members of the senior
management team. The Remuneration Committee, which comprises the four Non-Executive Directors and which is chaired by 
Andrew Parrish, is responsible for formulating policy and recommending to the Board the remuneration of the Executive Directors. 
The Board determines the fees of the Non-Executive Directors based on independent external advice.
The Remuneration Committee is assisted on remuneration decisions by Susan Morton, Group HR Director and by John McDonough,
Group Chief Executive.
Additionally, the Remuneration Committee appointed in 2001 The Monks Partnership (a business owned by PricewaterhouseCoopers LLP) 
to provide salary survey information and in 2002 New Bridge Street Consultants to advise on share incentive matters.
Remuneration policy
It is the policy of the Company to ensure that remuneration and other benefits attract, motivate and retain Executive Directors and
senior managers of the required calibre to achieve the Board’s objectives, including that of achieving growth in shareholder value.
Remuneration and other benefits are determined with regard to competitive market practice and, where considered appropriate, 
are supported by external independent surveys. The main elements of remuneration of the Executive Directors are basic salary and
pension benefits, together with annual long term bonuses linked to the Group’s financial and share price performance to ensure that 
the interests of the Executive Directors are aligned to those of the shareholders. The Company intends to continue this approach to the
structure of remuneration for the foreseeable future (subject to any changes in legislation with regard to pension provision) although
consideration is being given to the design and effectiveness of share incentive schemes for Executive Directors and senior managers.
The Group’s remuneration policy is also based upon Carillion’s strategic objectives, which specifically include financial performance
targets and achieving high standards in respect of sustainability, which encompasses Carillion’s health and safety, environmental and
social performance.
Service contracts
The Chief Executive’s service contract is terminable by one year’s notice from the Company. The other Executive Directors’ service
contracts are terminable in normal circumstances by two years’ notice from the Company. Whilst the Combined Code states there
is a case for reducing notice periods to one year or less, the Board’s policy in this respect reflects the long term nature of many of 
the Group’s project-related activities. Upon termination of their employment, Executive Directors of the Company have no additional
entitlement to compensation for loss of their office as Directors. The service contracts contain provision for early termination.
Notice
Name Commencement period Term
John McDonough 1 January 2001 12 months rolling
Roger Robinson 29 July 1999 24 months rolling
Chris Girling 13 September 1999 24 months rolling
Non-Executive Directors are not employed under contracts of service, but are generally appointed for fixed terms of three years
renewable for a further one to three years if both parties agree. As Chairman and in recognition of the associated responsibilities, 
Sir Neville Simms has a contract of service which commenced on 1 February 2001 for a period of two years and which now continues
unless and until terminated by either party giving one year’s notice.
Basic salary and other benefits
The basic salaries and other benefits of the Executive Directors are set by the Remuneration Committee and are determined taking into
account individual performance and information provided by independent sources on the rate of salary for similar posts in comparable
companies. The aim is to reward Directors fairly and competitively.
Other benefits typically include a company car, private healthcare and salary supplements (or contributions to a funded unapproved
retirement benefit scheme (FURBS)) in place of approved pension provision for salary over the annual earnings cap.
Annual performance bonus
Annual cash bonuses are reviewed each year by the Remuneration Committee, which sets performance targets geared to key financial
indicators and individual performance objectives. The Executive Directors have the potential to earn annual bonuses up to a maximum 
of 50% of their basic salary for outstanding performance. The bonus arrangement for 2002 set a financial performance target based 
on earnings per share and personal performance objectives that support the strategic objectives of the Company. The maximum bonus
opportunity of 50%, comprises an annual cash payment limited to 30% of salary with a deferred bonus of shares of the Company with 
a value of up to 20% of salary vesting after one year.
Pension benefits
The Group makes contributions to an Inland Revenue approved defined benefit scheme and, where applicable and where the individual
has elected, to FURBS on behalf of the Executive Directors. Alternatively, a payment equal to the contribution the Group would have
made to the funded unapproved arrangement is paid to the Executive Director as a salary supplement. Contributions to the funded
unapproved arrangements are reported as a benefit in kind on an annual basis. Salary supplements are taxed at source.
Carillion plc
Remuneration Report Carillion plc
Remuneration Report continued
Directors’ remuneration
The remuneration of the Directors of Carillion plc for the year ended 31 December 2002 is set out in the table below.
Annual
performance bonus
Value of
Basic Cash deferred bonus Other Total Total
£000 salary/fees payment of shares benefits 2002 2001
Executive Directors
John McDonough 365 110 31 110 616 543
Chris Girling 235 71 18 66 390 302
Roger Robinson 240 72 18 70 400 329
Total for Executive Directors 840 253 67 246 1,406 1,174
Non-Executive Directors
Sir Neville Simms 150 –– 28 178 195
Roger Dickens 30 ––– 30 25
John-Paul Parayre 30 ––– 30 25
Andrew Parrish 30 ––– 30 25
Total for Non-Executive Directors 240 –– 28 268 270
Total for all Directors 1,080 253 67 274 1,674 1,444
The auditors are required to report on the information contained in the above table.
Included in ‘Other benefits’ are salary supplements in place of FURBS contributions for John McDonough of £90,132 (2001: £73,473)
and Roger Robinson £12,147 (2001: £21,563).
Contributions were payable to FURBS in respect of Chris Girling of £46,906 (2001: £41,760) and Roger Robinson of £36,432 
(2001: £21,824). 
The total 2001 remuneration for Sir Neville Simms includes £38,000 salary and other benefits paid to him as Chief Executive in January 
of that year.
The total remuneration in 2001 of former Directors was £1,084,000 (including £747,000 compensation for loss of office).
Executive pensions
It is the Company’s policy to offer membership of the Carillion ‘B’ Pension Scheme to Executive Directors and other senior employees.
This scheme was operational from 1 October 1999. The scheme is a funded, Inland Revenue approved, defined benefit scheme to
which members contribute 5% of pensionable earnings. The main features are:
• pension payable at the normal retirement age of 60 (save in cases of ill health or early retirement)
• pension accrual rate for Executive Directors of 1/30th of final pensionable salary for each year of service targeting a pension (at normal
retirement age) of two thirds of final pensionable salary (subject to twenty years’ service after which employee contributions cease)
• increases to pensions in payment (in excess of the State Guaranteed Minimum Pension) in line with price indexation up to 5% per annum
• life assurance of four times pensionable salary
• pensions payable in the event of ill health, and
• on death (in service or after retirement) spouse’s and/or dependant’s pension at two-thirds of member’s pension.
Maximum pension benefits of two thirds of pensionable salary are offset by any pension benefits accruing from earlier pension arrangements.
The Carillion ‘B’ Pension Scheme will be closed to new entrants after 31 March 2003. Pension provision for senior managers and
executives in future will be through their existing Carillion scheme (current employees) or the Carillion Pension Plan (new employees and
existing employees who opt for membership). The Carillion Pension Plan is a defined contribution pension arrangement that provides
members with pensions at retirement based on the accumulated value of their notional pension account within the plan.
The current Executive Directors are subject to the Inland Revenue earnings cap and their pensionable salary is limited accordingly.
Executive Directors who are subject to the earnings cap are provided with additional benefits by way of individual FURBS or a salary
supplement equal to the contribution the Group would have made to a FURBS. In all cases, any contributions made to these arrangements 
in respect of the year are disclosed separately above. As these additional arrangements are limited to the balance of basic salary in excess 
of the earnings cap, bonus paid to Executive Directors does not count towards pension benefits. The Company does not contribute to
any pension arrangements of Non-Executive Directors.
Annual Report and Accounts 2002 36
Carillion plc Directors’ pensions
Pensions accruing during the year to Executive Directors in their capacity as Directors of Carillion plc are set out below.
Transfer value
of increase
Increase in Increase in in accrued Increase in
accrued pension accrued pension pension at transfer value
Accrued over year over year 31.12.02 over year
pension at excluding including less member Transfer value Transfer value after member
31.12.02 inflation inflation contributions at start of year at end of year contributions
£ per annum £ per annum £ per annum £ £ £ £
John McDonough 6,480 3,300 3,206 25,103 36,387 71,164 29,940
Chris Girling 10,260 3,370 3,167 19,348 73,584 102,606 24,185
Roger Robinson 40,067 3,655 2,584 15,168 436,245 461,087 20,005
The auditors are required to report on the information contained in the above table.
Share incentive schemes
The Company operates four share incentive schemes to motivate employees and to encourage them to invest in the future success 
of the Group. The Founders’ Equity Plan, the Executive Share Option Schemes and the Long Term Incentive Plan all have challenging
performance criteria that apply similarly to all participants. The Board believes that these schemes complement the strategy of 
achieving growth in shareholder value by directly aligning these incentives of the Executive Directors and senior employees to the
interests of the shareholders. A Sharesave Scheme also operates to give UK employees the opportunity to have a financial stake in 
the Company.
The Founders’ Equity Plan (FEP) is a one-off scheme established as an incentive for those employees capable of making a critical
contribution to increasing shareholder value. The Executive Directors and certain senior managers were invited to join the FEP and 
invest a percentage of their basic salary in purchasing ordinary shares in Carillion plc. These shares, referred to as the Investment Shares,
were purchased at an average market price of 137.74 pence per share. The Investment Shares are owned and controlled by the individual,
who is free to choose whether to stay in the FEP or sell the shares at any time during the performance period. Where members of the
FEP dispose of an element of their Investment Shares, the options they have been granted will be proportionately reduced.
For every Investment Share purchased, up to a maximum of four free shares can be awarded, subject to Carillion’s share price
performance. As the performance condition was not attained in the initial three year period, in accordance with the rules, the
performance period is now the four years commencing 31 August 1999 and the performance condition has increased proportionately.
The benchmark share price against which performance will be measured is 138 pence which was the mid-market price at close of
business on 31 August 1999. At 31 August 2003, Carillion’s average share price over the previous six weeks must have been at least
347.5 pence for the options to be exercisable in full. If the share price does not reach 201.5 pence, the options will not be exercisable.
If the share price increases in between these two prices, options will become exercisable on a pro-rata basis. A nominal fee of £1 is
payable on the exercise of options.
The performance condition which must be achieved before any free shares are allocated, is challenging but provides a real incentive 
to Directors and senior managers who can deliver increasing value for shareholders.
At 31 December 2002, Executive Directors and senior managers held a total of 1,439,961 Investment Shares and options over
5,759,845 shares. Those options not exercised by the tenth anniversary of their grant will lapse.
Carillion plc
Carillion plc Annual Report and Accounts 2002 37 Carillion plc
Remuneration Report continued
Executive Share Option Schemes
Share options have been granted to certain senior managers under two Executive Share Option Schemes. The options were granted
at an exercise price equal to the market value of the Company’s shares at the date of grant. Executive Share Options have not been
granted to participants in the Founders’ Equity Plan.
Options under the Inland Revenue Approved Executive Share Option Scheme 1999 (which carries certain tax advantages for UK
employees) and the Executive Share Option Scheme 1999 are exercisable normally between three and ten years after the date of
grant, subject to the achievement of the performance condition. The performance condition requires that the earnings per share
(before exceptional items) of Carillion over a rolling three year period must increase by a percentage that is not less than the 
increase in the UK Retail Prices Index over the same period, expressed as a percentage, plus four percentage points per annum. 
This performance condition was selected in order to provide an incentive that aligns the interests of executives with those of
shareholders in growing the Company’s earnings per share.
The aggregate value of options granted to an employee under the Executive Share Option Schemes cannot normally exceed their
remuneration in any year although this limit can be exceeded if the Directors so determine.
At 31 December 2002, options were outstanding over 2,068,486 shares under both schemes at exercise prices ranging from 
125.2 pence to 210.7 pence which may, subject to achievement of the performance condition, be exercisable for up to ten years
from the date of grant.
Long Term Incentive Plan
Conditional awards under the Long Term Incentive Plan are made to the Executive Directors and key members of senior management,
in recognition of the contribution that these individuals can make to the Group’s success. There is no subscription price for the shares,
the award of which is conditional on the Company’s performance during a three year period in delivering Total Shareholder Return
(TSR) against a comparator group of ten companies in the construction to services sector. The awards will vest in full only if Carillion
achieves first place. If the Company’s ranking is sixth, 30% of the awards will vest. If ranking is below sixth, none of the awards will
vest. This performance condition was chosen in order to align the interests of Directors and senior managers with those of shareholders
in growing Total Shareholder Return against comparator companies operating in similar sectors.
It is intended that conditional awards under the Plan will be made annually.
At 31 December 2002, conditional awards were outstanding over a total of 4,205,073 shares.
Conditional awards made to Executive Directors under these plans are set out in the table of share incentives on page 39. The 
awards represent the maximum number of shares that could be awarded to Directors under the performance periods commencing 
on 1 January 2000 and 1 January 2001. The monetary value of the conditional awards attributed to each Director were based on
their annual basic salary at the date of award and the number of shares were calculated using the share prices of 113.3 pence and
120.3 pence, the average share prices over the last six weeks of 1999 and 2000 respectively. 
Total Shareholder Return Performance Graph
The following graph shows the TSR of Carillion plc compared with the TSR of the FTSE 350 Index for the period from 30 July 1999
(the day dealings in Carillion shares commenced on the London Stock Exchange), to 31 December 2002. 
The FTSE 350 was chosen as the comparator group in order to illustrate the Company’s TSR performance against a 
broad equity market index of the UK’s leading companies.
Annual Report and Accounts 2002 38
Carillion plc
Total Shareholder Return 30 July 1999 to 31 December 2002
––– Carillion – Total Return Index
––– FTSE Actuaries 350 – Total Return Index The Sharesave Scheme
The Company has established a Sharesave Scheme which provides a savings and investment opportunity for employees in the UK. 
The options may normally be exercised on completion of a three or five year savings contract, at a price equivalent to not less than 
80% of the market value of the shares at the time of grant. Options were granted in November 1999 over 6,140,194 shares and in
October 2002 over 3,995,803 shares.
At 31 December 2002, options over 7,302,280 ordinary shares of 50p each were outstanding under this scheme, exercisable on 
various dates up to June 2006 at exercise prices of either 109.1p or 126.6p.
The three year options granted in November 1999 became exercisable on 1 January 2003 for a period of six months.
Proposals for Share Incentive Schemes
The Remuneration Committee has reviewed the performance conditions applying to the Executive Share Option Schemes and the 
Long Term Incentive Plan. As described in the Notice of the forthcoming Annual General Meeting, the Company is seeking shareholder
authority to apply different performance conditions for future grants and conditional awards, which both comply with best practice 
and are more demanding than the current performance requirements. 
Share incentives of Directors of Carillion plc
As at Conditional At Lapsed post At
1 January awards during 31 December 31 December 12 March
2002 the year Lapsed 2002 2002 2003
Sir Neville Simms
FEP (maximum) 987,364 –– 987,364 – 987,364
LTIP 2000 (maximum) 308,914 –– 308,914 308,914 Nil
John McDonough
LTI Agreement 2001 (maximum) 191,041 –– 191,041 191,041 Nil
LTIP 2001 (maximum) 270,157 –– 270,157 – 270,157
Chris Girling
FEP (maximum) 580,804 –– 580,804 – 580,804
LTIP 2000 (maximum) 183,142 – – 183,142 183,142 Nil
LTIP 2001 (maximum) 187,032 –– 187,032 – 187,032
Roger Robinson
FEP (maximum) 609,844 – – 609,844 – 609,844
LTIP 2000 (maximum) 191,968 – – 191,968 191,968 Nil
LTIP 2001 (maximum) 191,188 –– 191,188 – 191,188
The auditors are required to report on the information contained in the above table.
Carillion plc
Carillion plc Annual Report and Accounts 2002 39 Carillion plc
Remuneration Report continued
The companies comprising the comparator group for Long Term Incentive Plan conditional awards made in January 2000 and also the
Long Term Incentive Agreement with John McDonough are Amec plc, Amey plc, WS Atkins plc, Balfour Beatty plc, Jarvis plc, Kier Group plc,
John Laing plc, Alfred McAlpine plc, John Mowlem plc and Taylor Woodrow plc. The same comparator group is also used for the 
Long Term Incentive Plan conditional awards made in 2001 and 2002 except that Interserve plc replaces John Laing plc.
In January 2003, the performance condition pertaining to the Long Term Incentive Plan conditional awards made in January 2000 
was not met and these awards have now lapsed. The conditional award made to John McDonough under the Long Term Incentive
Agreement also lapsed at this time. This is shown in the table on page 39.
The number of options over Carillion plc shares held by Directors of the Company under the Executive Share Option and Sharesave
schemes are detailed below:
Earliest
As at Granted As at date from
1 January during 31 December Exercise which
2002 the year Exercised Lapsed 2002 price exercisable Expiry date
John McDonough
ESOS 2001 501,930 ––– 501,930 129.5p 09.01.04 09.01.11
ESOS 2002 – 254,532 –– 254,532* 210.7p 07.01.05 07.01.12
Roger Robinson
Sharesave 2,699 ––– 2,699 109.1p 01.01.03 30.06.03
The auditors are required to report on the information contained in the above table.
*The option over 254,532 shares at an option price of 210.7 pence granted to John McDonough in March 2002 under the Executive
Share Option Scheme 1999 was made later in the year than had been specified at the time of his appointment which resulted in an
increased option price of 67.3 pence. Therefore, in order to ensure that he will be in neither a worse nor better position as a result of the
delay in the grant, a maximum cash adjustment of 67.3 pence per share (less tax) will be made when and if the option is exercised.
Other than as shown in the tables above and the exercise by Roger Robinson of his Sharesave option over 2,699 shares in February 2003,
there have been no changes to the interests of Executive Directors in share incentives and options in the period 1 January to 12 March 2003.
Employee Benefit Trusts
An employee benefit trust has been established to acquire shares in Carillion plc and hold them for the benefit of participants in the
Founders’ Equity Plan and the Long Term Incentive Plan. At 31 December 2001 and 2002, the Trust had acquired 4,736,226 Carillion
shares (2.2% of the issued share capital and a nominal value of £2.4m) in the open market for a consideration of £6.0m. The market
value of the shares held at 31 December 2002 was £5.3m (2001: £6.6m).
Additionally, a Qualifying Employee Share Ownership Trust (QUEST) operates in conjunction with Carillion in providing shares to
employees under its Sharesave Scheme. At 31 December 2002, the QUEST held 1,753,411 Carillion shares (0.8% of the issued share
capital and a nominal value of £0.9m) at subscription prices of 117.5 pence and 115.5 pence per share, to enable it to satisfy, as and
when required, options granted under the Sharesave Scheme. The market value of the shares held by the QUEST at 31 December 2002
was £1.9m (2001: £2.2m).
For details of dividends paid to the above trusts see Notes 15 and 24 to the financial statements on pages 62 and 69 respectively.
Annual Report and Accounts 2002 40
Carillion plc Directors’ share interests
Ordinary shares
The beneficial interests of the Directors and their immediate families in the ordinary share capital of the Company are shown below:
As at As at
1 January 31 December 
Fully paid 50p ordinary shares owned: 2002 2002
Executive Directors
John McDonough 200,000 374,976
Chris Girling 145,201 145,201*
Roger Robinson 175,078 175,078*
Non-Executive Directors
Sir Neville Simms 427,041 427,041*
Roger Dickens 22,043 22,043
Jean-Paul Parayre 153,349 153,349
Andrew Parrish 10,101 26,029
*Including all Investment Shares acquired under the Founders’ Equity Plan.
On 21 February 2003, Roger Robinson acquired 2,699 shares pursuant to the exercise of his Sharesave option granted in 1999. 
With this exception, there has been no change in Directors’ interests in the period 1 January to 12 March 2003.
The closing mid-market price of Carillion shares at 31 December 2002 and the highest and lowest mid-market prices during the year
were as follows:
Share price
31 December 2002 111.5 pence
High 227 pence (29 April 2002)
Low 107 pence (12 December 2002)
Approved by order of the Board
Andrew Parrish
Chairman of the Remuneration Committee
12 March 2003
Carillion plc
Carillion plc Annual Report and Accounts 2002 41 Carillion plc
Report of the Directors
The Directors of Carillion plc present their annual report, together with the audited financial statements for the year ended 
31 December 2002. 
Principal Activities and Business Review
Carillion is one of the UK’s leading Business and Construction Services groups, operating throughout the UK and in a number of
overseas regional markets.
A review of the Group’s businesses, financial performance and future developments is contained in the Chairman’s Statement, 
Chief Executive’s Review and Financial Review.
Analyses of turnover, results and net assets by business segment and geographical location are given in Note 2 on pages 54 and 55.
Profits and Dividends
The consolidated profit and loss account is shown on page 46. The profit on ordinary activities before taxation amounted to £42.2m
(2001 as restated: £34.7m). An interim dividend of 1.5 pence per ordinary share (2001: 1.38 pence) was paid in November 2002 and it
is proposed to pay a final dividend of 3.3 pence per ordinary share (2001: 3.02 pence) on 27 June 2003 to shareholders on the register
at the close of business on 2 May 2003. The payment of these ordinary dividends amounts to £9.9m (2001: £8.9m).
A dividend reinvestment plan (DRIP) will also be offered.
Directors
The Directors of the Company who served during 2002 are shown on page 36 of the Remuneration Report. Biographical details for
each Director at 31 December 2002 are given on page 26.
In accordance with the Articles of Association, Roger Robinson retires by rotation and, being eligible, offers himself for re-election.
Roger has a contract of service that is subject to two year’s notice of termination by the Company. 
The interests of the Directors and their families in the share capital of the Company are shown in the Remuneration Report on 
page 41.
Employees
Information relating to employee numbers and remuneration is given in Note 6 on page 57.
Employees are key to achieving Carillion’s business strategy and the Group is committed to improving their skills through training 
and development and nurturing a culture in which employees feel valued for their contribution and are motivated to achieve their 
full potential. 
In addition, Carillion’s core values of openness, collaboration and mutual dependency have been developed to emphasise the changing
working practices required to succeed in an environment where partnership and integrated solutions are becoming the norm. 
It is the aim of Carillion to foster a working environment in which all employees are treated with courtesy, dignity and respect.
Carillion continually strives to eliminate all bias and unlawful discrimination in relation to job applicants, employees, business partners
and members of the public. Employees who become disabled are, wherever possible, retrained or provided with equipment so that
they can continue their employment.
Carillion places great importance on open and regular communication with employees through both formal and informal processes.
As part of this commitment, a Group newspaper, ‘Spectrum’, is produced on a regular basis for all employees. The views of employees
on matters affecting their interests were also sought through an initiative known as ‘The Great Debate’ under which a number of
forums were held throughout the Group to encourage employees to express their views on a range of activities relating to their jobs
and the Group. These views will be taken into account in the development of future work related initiatives as part of Carillion’s
strategy to become an employer of choice. Employees can also exchange best practice information on a Knowledge Management
Forum on the Group intranet.
Involvement in the Group is also encouraged through means such as the periodic grant of share options under the Sharesave Scheme
which gives all UK employees the opportunity to have a financial stake in the Company. 
Carillion seeks to involve all employees in its leading-edge programmes to integrate safety into everything it does and to improve its
environmental performance, including the understanding and application of the principles of sustainability. Further information on
Health and Safety, the Environment and Community is given in the Sustainability Review on pages 22 to 25.
Annual Report and Accounts 2002 42
Carillion plc Substantial Share Interests
At 12 March 2003, the Company had received formal notification of the following substantial interests in the ordinary share capital 
of the Company:
Number of
shares held Percentage
Schroder Investment Management Limited and its affiliated companies 40,649,662 19.09
Fidelity International Limited and its direct and indirect subsidiaries 31,415,447 14.75
Zurich Financial Services and its Group 8,264,857 3.88
Legal & General Group Plc 6,652,559 3.12
Policy for Payment of Suppliers
It is the policy of the Group that each business agrees terms and conditions for transactions with its suppliers and for payment to be
made on these terms providing the suppliers meet their obligations to the businesses’ satisfaction. The Group as a whole therefore 
does not apply a general recognised code with regard to the payment of all suppliers. The Company does not have any trade creditors.
The number of days credit outstanding for the Group’s principal trading subsidiaries averaged 64 days at 31 December 2002 (73 days 
at 31 December 2001).
Charitable and Political Contributions
Payments for charitable purposes made by the Group during the year ended 31 December 2002 amounted to £96,000 (2001: £123,000).
The Company and its subsidiaries made no political donations during the period under review.
Annual General Meeting
The notice of and related information on the Company’s Annual General Meeting to be held on 14 May 2003 is included in separate
documents posted to shareholders with this Annual Report and Accounts.
Amongst the business to be transacted is a proposal to renew the authority for the Company to purchase its own shares. As at 
31 December 2002, the Company had authority from shareholders for the purchase of 21,272,463 of its own shares.
Auditors
Resolutions to reappoint KPMG Audit Plc as auditors and to authorise the Directors to determine their remuneration will be proposed 
at the forthcoming Annual General Meeting.
Approved by order of the Board
RF Tapp
Secretary
12 March 2003
Carillion plc
Carillion plc Annual Report and Accounts 2002 43 Carillion plc
Statement of Directors’ Responsibilities
Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state
of affairs of the Company and Group and of the profit or loss for that period. In preparing those financial statements, the Directors
are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent; 
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained 
in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue 
in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Annual Report and Accounts 2002 44
Carillion plc We have audited the financial statements on pages 46 to 76. We have also audited the information in the Directors’ remuneration
report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our
audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and auditors
The Directors are responsible for preparing the Annual Report and the Directors’ remuneration report. As described on page 44, 
this includes responsibility for preparing the financial statements in accordance with applicable United Kingdom law and accounting
standards. Our responsibilities, as independent auditors, are established in the United Kingdom by statute, the Auditing Practices
Board, the Listing Rules of the Financial Services Authority, and by our profession’s ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements
and the part of the Directors’ remuneration report to be audited have been properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the Directors’ report is not consistent with the financial statements, if the Company
has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if
information specified by law regarding Directors’ remuneration and transactions with the Group is not disclosed.
We review whether the statement on page 31 reflects the Company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules, and we report if it does not. We are not required to consider whether the Board’s
statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate
governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report, including the corporate governance statement and the unaudited
part of the Directors’ remuneration report, and consider whether it is consistent with the audited financial statements. We consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. 
Basis of audit opinion
We conducted our audit in accordance with Auditing 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 financial statements and the part of the Directors’
remuneration report to be audited. It also includes an assessment of the significant estimates and judgements made by the Directors
in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order 
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors’
remuneration report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the
part of the Directors’ remuneration report to be audited.
Opinion
In our opinion:
• the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2002
and of the profit of the Group for the year then ended; and 
• the financial statements and the part of the Directors’ remuneration report to be audited have been properly prepared in accordance
with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
12 March 2003
Birmingham
Carillion plc
Independent Auditors’ Report to the members of Carillion plc
Carillion plc Annual Report and Accounts 2002 45 Carillion plc
Consolidated Profit and
Loss Account
for the year ended 31 December 2002
2002 2001
Before
Before Exceptional exceptional items Exceptional Total
exceptional items as restated items as restated
items (see Note 3) Total (see Note 31) (see Note 3) (see Note 31)
Note £m £m £m £m £m £m
Total turnover 2 1,974.4 – 1,974.4 1,889.8 – 1,889.8
Less: share of joint ventures’ turnover 2 (127.1) – (127.1) (191.0) – (191.0)
Group turnover 1,847.3 – 1,847.3 1,698.8 – 1,698.8
Cost of sales (1,660.1) – (1,660.1) (1,556.7) – (1,556.7)
Gross profit 187.2 – 187.2 142.1 – 142.1
Administrative expenses (149.4) – (149.4) (115.1) (8.9) (124.0)
Group operating profit 37.8 – 37.8 27.0 (8.9) 18.1
Share of operating profit 
in joint ventures 2 14.3 – 14.3 21.1 (1.2) 19.9
Total operating profit 2 52.1 – 52.1 48.1 (10.1) 38.0
Loss on sale of businesses 3
Group – (0.3) (0.3) –––
Joint ventures – (5.0) (5.0) –––
– (5.3) (5.3) –––
Profit on ordinary activities 
before interest 2 52.1 (5.3) 46.8 48.1 (10.1) 38.0
Net interest receivable/(payable)
Group 4 0.6 – 0.6 0.3 – 0.3
Joint ventures 4 (5.2) – (5.2) (3.6) – (3.6)
(4.6) – (4.6) (3.3) – (3.3)
Profit on ordinary activities 
before taxation 5 47.5 (5.3) 42.2 44.8 (10.1) 34.7
Tax on profit on ordinary activities 8 (13.8) 0.9 (12.9) (13.4) 3.3 (10.1)
Profit on ordinary activities 
after taxation 33.7 (4.4) 29.3 31.4 (6.8) 24.6
Equity minority interests (2.1) – (2.1) (3.1) – (3.1)
Profit for the financial year 31.6 (4.4) 27.2 28.3 (6.8) 21.5
Equity dividends 10 (9.9) – (9.9) (8.9) – (8.9)
Retained profit for the Group 
and its share of joint ventures 24 21.7 (4.4) 17.3 19.4 (6.8) 12.6
Earnings per ordinary share 11
Basic 15.3p (2.1p) 13.2p 13.8p (3.3p) 10.5p
Diluted 15.1p (2.1p) 13.0p 13.7p (3.3p) 10.4p
Basic before all exceptional items 
and goodwill amortisation 16.6p 14.0p
Dividends per ordinary share 10 4.8p 4.4p
The results for the current and preceding years are wholly derived from continuing operations.
Annual Report and Accounts 2002 46
Carillion plc At
At 31 December
31 December 2001 as restated
2002 (see Note 31)
Note £m £m
Fixed assets
Intangible assets 12 49.0 42.8
Tangible assets 13 56.9 53.0
Investments in joint ventures: 14
Share of gross assets 646.1 572.0
Share of gross liabilities (593.1) (516.7)
53.0 55.3
Loan advances 8.0 5.5
61.0 60.8
Other investments 15 6.1 2.7
Total investments 67.1 63.5
173.0 159.3
Current assets
Stocks 16 43.7 53.7
Debtors 17 523.6 572.2
Investments 18 8.2 9.4
Cash at bank and in hand 85.1 94.5
660.6 729.8
Creditors: amounts falling due within one year 19
Borrowings (20.4) (45.2)
Other creditors (574.9) (680.0)
(595.3) (725.2)
Net current assets/(liabilities)
Due within one year 42.3 (26.6)
Debtors due after more than one year 17 23.0 31.2
65.3 4.6
Total assets less current liabilities 238.3 163.9
Creditors: amounts falling due after more than one year 20
Borrowings (66.8) (4.6)
Other creditors (13.7) (11.6)
(80.5) (16.2)
Provisions for liabilities and charges 22 (8.1) (13.0)
Net assets 149.7 134.7
Financed by:
Capital and reserves
Called up share capital 23 106.5 106.3
Share premium account 24 5.5 5.3
Merger reserve 24 8.2 8.2
Profit and loss account 24 27.3 11.6
Equity shareholders’ funds 147.5 131.4
Equity minority interests 2.2 3.3
149.7 134.7
The financial statements on pages 46 to 76 were approved by the Board of Directors on 12 March 2003 and were signed on its behalf by:
John McDonough Chief Executive Chris Girling Finance Director
Carillion plc
Consolidated Balance Sheet
Carillion plc Annual Report and Accounts 2002 47 Carillion plc
Company Balance Sheet
At At
31 December 31 December
2002 2001
Note £m £m
Fixed assets
Investments in subsidiaries 14 166.3 147.4
Other investments 15 6.0 2.7
172.3 150.1
Current assets
Debtors 17 248.0 204.2
Cash at bank and in hand 2.9 1.2
250.9 205.4
Creditors: amounts falling due within one year 19
Borrowings (23.4) (40.1)
Other creditors (191.7) (177.0)
(215.1) (217.1)
Net current assets/(liabilities)
Due within one year 33.1 (11.7)
Debtors due after more than one year 17 2.7 –
35.8 (11.7)
Total assets less current liabilities 208.1 138.4
Creditors: amounts falling due after more than one year 20
Borrowings (64.2) –
Net assets 143.9 138.4
Financed by:
Capital and reserves
Called up share capital 23 106.5 106.3
Share premium account 24 5.5 5.3
Profit and loss account 24 31.9 26.8
Equity shareholders’ funds 143.9 138.4
The financial statements on pages 46 to 76 were approved by the Board of Directors on 12 March 2003 and were signed on its 
behalf by:
John McDonough Chief Executive Chris Girling Finance Director
Annual Report and Accounts 2002 48
Carillion plc Year ended Year ended
31 December 31 December
2002 2001
Note £m £m
Net cash inflow from operating activities 28(a) 1.1 53.8
Dividends received from joint ventures 3.8 13.8
Returns on investments and servicing of finance
Dividend paid to minority interests (3.2) (0.8)
Interest paid (5.3) (4.5)
Finance lease charges (0.1) (0.2)
Interest received 5.9 5.0
Net cash outflow from returns on investments and servicing of finance (2.7) (0.5)
Corporate taxation paid (9.0) (2.3)
Capital expenditure and financial investment
Payments to acquire fixed assets (21.0) (18.1)
Sale of/(payments to acquire) current asset investments 0.9 (1.4)
Payments to acquire fixed asset investments (0.1) (0.3)
Purchase of own shares by ESOP – (3.0)
Sale of tangible fixed assets 4.8 6.9
Net cash outflow from capital expenditure and financial investment (15.4) (15.9)
Acquisitions and disposals
Purchase of business 29(a) (8.9) (31.3)
Sale of businesses 29(b) 0.3 5.1
Equity investment in joint ventures 29(a) (0.1) (17.6)
Loan (advances to)/repayments by joint ventures (2.5) 2.6
Net cash outflow from acquisitions and disposals (11.2) (41.2)
Equity dividends paid (9.3) (5.3)
Net cash (outflow)/inflow before management of liquid resources and financing (42.7) 2.4
Management of liquid resources
(Increase)/decrease in short term deposits (10.6) 4.2
Net cash (outflow)/inflow from management of liquid resources 28(c) (10.6) 4.2
Financing
Drawdown of debt 28(c) 45.0 –
Repayment of finance leases 28(c) (2.5) (1.9)
Issue of share capital 0.4 –
Net cash inflow/(outflow) from financing 42.9 (1.9)
(Decrease)/increase in cash in the year 28(c) (10.4) 4.7
Carillion plc
Consolidated Cash Flow 
Statement
Carillion plc Annual Report and Accounts 2002 49 Carillion plc
Consolidated Statement 
of Total Recognised Gains
and Losses
2001
as restated
2002 (see Note 31)
£m £m
Profit for the financial year
Group 25.0 10.6
Joint ventures 2.2 10.9
27.2 21.5
Exchange movements (1.4) 0.5
Total recognised gains and losses for the year 25.8 22.0
Prior year adjustments (see Note 31) (11.9)
Total recognised gains and losses since previous year’s financial statements 13.9
Reconciliation of Movements in Consolidated Equity Shareholders’ Funds
2001
as restated
2002 (see Note 31)
£m £m
Profit for the financial year
Group 25.0 10.6
Joint ventures 2.2 10.9
27.2 21.5
Equity dividends (9.9) (8.9)
Retained profit for the Group and its share of joint ventures 17.3 12.6
Exchange movements (1.4) 0.5
New share capital subscribed by QUEST 0.2 –
Other new share capital issued 0.2 –
Transfer arising on issue of shares to QUEST (0.2) –
Scrip dividend alternative – 3.3
Net addition to equity shareholders’ funds 16.1 16.4
Opening equity shareholders’ funds as restated (see below) 131.4 115.0
Closing equity shareholders’ funds 147.5 131.4
Opening equity shareholders’ funds as previously reported 143.3 127.7
Prior year adjustments (see Note 31) (11.9) (12.7)
Opening equity shareholders’ funds as restated 131.4 115.0
Annual Report and Accounts 2002 50
Carillion plc 1. Principal accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to 
the Group’s financial statements except as noted below.
During the year, the Group adopted Financial Reporting Standard (FRS) 19 ‘Deferred tax’ and Urgent Issues Task Force (UITF) abstract
34 ‘Pre-contract costs’. The impact of the changes in accounting policies on the current and preceding years’ financial statements
arising from the adoption of FRS 19 and UITF 34 is disclosed in Note 31.
Basis of accounting
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain
tangible fixed assets comprising land and buildings, and in accordance with applicable UK accounting standards.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries drawn up to 
31 December 2002. Unless otherwise stated the acquisition method of accounting has been applied. Under this method acquired
subsidiaries are included from the date of acquisition. Disposals are accounted for up to the date control passes to a third party.
A joint venture is an undertaking in which the Group has a long term interest and over which it exercises joint control. The Group’s
share of the profits less losses of joint ventures is included in the consolidated profit and loss account and its interest in their net
assets (other than goodwill) is included in investments in the consolidated balance sheet.
Where a Group company is party to a joint arrangement that is not an entity, that company accounts directly for its share of the
income and expenditure, assets, liabilities and cash flows. Such arrangements are reported in the consolidated financial statements 
on the same basis.
Fixed asset investments
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost, less provision for any impairment.
Company shares held by the Employee Share Ownership Plan (ESOP) Trust are included in both the Group and Company financial
statements as a fixed asset investment until such time as the interest in the shares is transferred unconditionally to the employees. 
The purchase costs of the shares are charged to the profit and loss account so as to spread the costs over the relevant performance
period of the plans. Costs of administering the trust are charged to the profit and loss account as incurred.
Goodwill
Goodwill arising on acquisitions, being the difference between the fair value of the purchase consideration and the fair value of the
identifiable net assets of an acquired company or business, including an interest in a joint venture, is capitalised and amortised in
equal annual instalments over its useful economic life. Prior to 1 January 1998, goodwill was written off to reserves on acquisition. 
In accordance with the transitional provisions of FRS 10 ‘Goodwill and intangible assets’, this treatment has continued to be applied
for those years. Any such goodwill previously written off to reserves is included in the calculation of any profit or loss on disposal in
respect of businesses subsequently disposed of or terminated.
Carillion plc
Notes to the Financial Statements
Carillion plc Annual Report and Accounts 2002 51 Carillion plc
Notes to the Financial Statements continued
1. Principal accounting policies (continued)
Long term contract balances
Amounts recoverable on contracts, which are included in debtors, are stated at cost plus attributable profit less any foreseeable
losses. Payments received on account of contracts are deducted from amounts recoverable on contracts in debtors or long term
contract balances in stock. Where such amounts have been received and exceed amounts recoverable the net amounts are included
in creditors.
Profit recognition
Profit on long term contracts is calculated in accordance with applicable accounting standards. In determining the attributable profit 
on contracts to a particular accounting period the Group utilises estimation techniques. The principal estimation technique used is the
preparation of profit and cash flow forecasts on a contract by contract basis which enables an assessment to be made of the final out
turn on each contract. Profit is then recognised when the outcome of the contract can be foreseen with reasonable certainty and is
attributed in line with the degree of completion of each contract.
The result for each year includes settlement of claims on contracts completed in prior years. In preparing contract forecasts, a prudent
and reasonable evaluation of claims is included in the assessment of the final out turn.
Property development profits are recognised on contractual completion.
Group turnover
Group turnover represents the net amount receivable, excluding value added tax, for goods and services supplied to external customers.
In respect of long term contracting activities, turnover reflects the value of work executed during each year. It also includes the Group’s
proportion of work carried out under joint arrangements during the year.
Stocks
Stocks and work in progress are valued at the lower of cost and net realisable value. Cost includes appropriate overheads.
Tangible fixed assets
The Group has continued to follow the transitional provisions of FRS 15 ‘Tangible fixed assets’ to retain the book value of freehold
land and buildings, which were last revalued in 1985.
Depreciation is based on historical cost or revaluation, less the estimated residual values, and the estimated economic lives of the
assets concerned. Freehold land is not depreciated. Other tangible assets are depreciated in equal annual instalments over the period
of their estimated economic lives, which are principally as follows:
Freehold buildings 50 years
Long leasehold land and buildings 50 years
Short leasehold land and buildings Period of lease
Plant, machinery and vehicles 3-10 years
Leased assets
Operating lease rental charges are charged to the profit and loss account on a straight-line basis over the life of each lease.
Assets held under finance leases and hire purchase contracts are included in tangible fixed assets and are depreciated over the shorter
of the contract term or their useful life. The capital element of outstanding finance leases and hire purchase contracts is included in
creditors. The finance charge element of rentals is charged to the profit and loss account at a constant periodic rate of charge on the
outstanding obligations.
Taxation
The charge for taxation is based on the result for each year and takes into account deferred taxation, calculated in accordance with
the requirements of FRS 19 ‘Deferred tax’. Deferred tax assets or liabilities, which arise from timing differences between the recognition
of gains and losses in the financial statements and their recognition in the tax computation, are calculated on a non-discounted full
provision basis. This policy reflects a change from previous years, where deferred tax assets or liabilities were only recognised on a
partial provision basis.
Annual Report and Accounts 2002 52
Carillion plc Foreign currencies
Transactions denominated in foreign currencies are translated into sterling and recorded using the contracted exchange rate.
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the exchange rates ruling at the
relevant balance sheet date and the gains and losses on translation are included in the profit and loss account.
The profit and loss accounts and balance sheets of overseas undertakings and joint ventures are translated into sterling at the rates of
exchange ruling at the end of the financial year. Gains or losses arising on the translation of the opening net assets of such overseas
undertakings are taken to reserves together with exchange differences on related foreign currency hedges.
Share incentive schemes
Where share incentives are granted with an exercise price of less than the market price at the date of grant the difference is charged
to the profit and loss account over the period to the exercisable date of the incentives. Due regard is made to the likelihood of the
stipulated performance criteria being attained with the charge being amended accordingly.
No cost is recognised in respect of SAYE schemes that are offered on similar terms to all or substantially all employees as permitted 
by UITF 17 ‘Employee Share Schemes’.
The purchase cost of ESOP shares (see Note 15) is charged to the profit and loss account so as to spread the cost over the relevant
performance period of the plans to which the trust relates. Costs of administering the trust are charged to the profit and loss account
as incurred. The ESOP trust is regarded as a quasi subsidiary under FRS 5 and its assets, liabilities and results are consolidated into the
financial statements of both the Company and the Group.
Pensions
Regular pension costs in respect of the Group’s defined benefit pension schemes are established in accordance with the recommendations
of independent actuaries and are charged to the profit and loss account based on the expected pension costs over the employees’ service
lives with the Group. Current actuarial surpluses or deficits are amortised over the average expected remaining service lives of current
employees on a systematic basis. The difference between the amounts charged or credited to the profit and loss account and the contributions
made to the pension schemes is included within debtors or creditors as appropriate. Contributions to the Group’s defined contribution
schemes are charged to the profit and loss account as incurred.
The Group continues to follow the transitional provisions as permitted by FRS 17 ‘Retirement benefits’ at 31 December 2002 which are
disclosed in Note 30.
Bid costs
The Group has adopted UITF 34 ‘Pre-contract costs’ which came into effect during the year. The abstract addresses the accounting
treatment of pre-contract costs and represents best practice in accounting for these costs. Following adoption of the abstract, 
pre-contract costs are expensed as incurred until the Group is appointed preferred bidder. Provided the contract is expected to
generate sufficient net cash inflows to enable recovery and the award of the contract is virtually certain, pre-contract costs incurred
post the appointment as preferred bidder are included in stocks. Where pre-contract bid costs are reimbursed at financial close, the
proceeds are initially applied against the asset included in stocks. Any excess recoveries are carried forward as deferred income and
released to profit over the period of the contract to which the pre-contract costs relate.
This policy reflects a change from previous years when the Group, once it had been selected as preferred bidder for a project and
where in the opinion of the Directors the project was reasonably certain to achieve its financial close in the next twelve months,
recognised the costs estimated to be refunded on completion in stocks.
Interest
Interest is written off to the profit and loss account as incurred by all subsidiaries in the Group.
Interest incurred on borrowings within the Group’s joint ventures relating to the construction of assets in PPP projects is capitalised
until the relevant assets are brought into operational use.
Carillion plc
Carillion plc Annual Report and Accounts 2002 53 Carillion plc
Notes to the Financial Statements continued
2. Analysis of turnover, profit before interest and net assets
Total turnover Net assets/(liabilities)
2001
2002 2001 2002 as restated
Class of business £m £m £m £m
Investments 61.6 43.9 32.2 27.6
Business services 821.7 609.3 60.9 45.9
Construction services 1,125.4 1,335.9 64.2 26.5
Internal trading (34.3) (99.3) – –
Corporate centre – – (12.9) (16.9)
Net cash – – 5.3 51.6
1,974.4 1,889.8 149.7 134.7
Geographical origin
UK 1,694.4 1,573.7 153.4 95.0
Europe 146.9 150.9 (23.7) (23.8)
Other 133.1 165.2 14.7 11.9
Net cash – – 5.3 51.6
1,974.4 1,889.8 149.7 134.7
The analysis of turnover by geographical market served is not materially different from that by geographical origin.
Profit on ordinary activities before interest
2002 2001
Before
Before exceptional
exceptional Exceptional items Exceptional Total
items items Total as restated items as restated
Class of business £m £m £m £m £m £m
Investments 7.8 – 7.8 5.5 – 5.5
Business services 36.4 – 36.4 29.8 (0.4) 29.4
Construction services 17.0 (5.3) 11.7 22.0 (4.7) 17.3
Corporate centre (9.1) – (9.1) (9.2) (5.0) (14.2)
52.1 (5.3) 46.8 48.1 (10.1) 38.0
Geographical origin
UK 50.1 (5.3) 44.8 40.9 (9.1) 31.8
Europe (0.9) – (0.9) 1.6 (1.0) 0.6
Other 2.9 – 2.9 5.6 – 5.6
52.1 (5.3) 46.8 48.1 (10.1) 38.0
Annual Report and Accounts 2002 54
Carillion plc The Group’s share of the turnover and net assets in joint ventures was as follows:
Turnover Net assets/(liabilities)
2002 2001 2002 2001
Class of business £m £m £m £m
Investments 60.9 43.7 38.8 33.4
Business services 0.6 108.2 – –
Construction services 65.6 46.1 22.2 27.4
Internal trading – (7.0) – –
127.1 191.0 61.0 60.8
Geographical origin
UK 89.4 167.4 56.7 56.2
Europe 3.6 9.1 (2.6) (2.3)
Other 34.1 14.5 6.9 6.9
127.1 191.0 61.0 60.8
The Group’s share of the profit on ordinary activities before interest in joint ventures was as follows:
2002 2001
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
Class of business £m £m £m £m £m £m
Investments 12.5 – 12.5 10.4 – 10.4
Business services ––– 5.7 – 5.7
Construction services 1.8 (5.0) (3.2) 5.0 (1.2) 3.8
14.3 (5.0) 9.3 21.1 (1.2) 19.9
Geographical origin
UK 13.0 (5.0) 8.0 20.1 (1.2) 18.9
Europe ––– 0.3 – 0.3
Other 1.3 – 1.3 0.7 – 0.7
14.3 (5.0) 9.3 21.1 (1.2) 19.9
Carillion plc
Carillion plc Annual Report and Accounts 2002 55 Carillion plc
Notes to the Financial Statements continued
3. Exceptional items
2002 2001
Gross Tax Gross Tax
Operating items £m £m £m £m
Group:
Reorganisation costs –– 8.9 (1.7)
Joint ventures:
Reorganisation costs –– 1.2 –
–– 10.1 (1.7)
Non-operating items
Group:
Loss/(profit) on sale of businesses (see Note 29) 0.3 – (5.3) –
Provisions against retained contracts –– 5.3 (1.6)
0.3 – – (1.6)
Joint ventures:
Loss on sale of business 5.0 (0.9) ––
5.3 (0.9) 10.1 (3.3)
The loss on the sale of business in joint ventures of £5.0m relates to the disposal of the hoists, accommodation and general plant
business of Maxxiom Limited.
In 2002, the rate of tax on exceptional items is below the standard rate of UK corporation tax due to a deferred tax asset that has not
been recognised relating to depreciation in excess of capital allowances.
4. Net interest receivable/(payable)
2002 2001
Group £m £m
Interest receivable:
Bank interest receivable 2.0 2.7
Other interest receivable 3.9 2.1
5.9 4.8
Interest payable and other similar charges:
Interest payable on bank loans and overdrafts (4.0) (4.1)
Other interest payable and similar charges (1.3) (0.4)
(5.3) (4.5)
Net interest receivable 0.6 0.3
Other interest payable and similar charges includes finance lease charges of £0.1m (2001: £0.2m).
2002 2001
Joint ventures £m £m
Interest receivable:
PPP projects 13.1 11.5
Other joint ventures 0.7 0.6
13.8 12.1
Interest payable and other similar charges:
PPP projects (net of interest capitalised) (17.1) (14.9)
Other joint ventures (1.9) (0.8)
(19.0) (15.7)
Net interest payable (5.2) (3.6)
Interest payable by joint ventures on PPP long term projects relate to non-recourse borrowings as detailed in Note 14. The Group’s 
share of interest capitalised by joint ventures on PPP long term projects amounted to £15.3m (2001: £10.2m).
Annual Report and Accounts 2002 56
Carillion plc 5. Profit on ordinary activities before taxation
Profit on ordinary activities before taxation has been arrived at after charging/(crediting):
2002 2001
£m £m
Depreciation of tangible fixed assets 14.6 12.5
Impairment of tangible fixed assets – 3.5
Profit on sale of tangible fixed assets (0.8) (1.1)
Amortisation of goodwill 2.7 0.5
Amortisation of own shares (3.3) 2.0
Operating leases:
Hire of plant and machinery
– Short term 24.6 30.4
– Long term 1.3 0.8
Hire of other assets 17.1 15.8
Auditor’s remuneration for Group audit services 0.9 0.8
Audit fees for the parent company included in the above amounted to £24,000 (2001: £23,500). Fees paid to KPMG Audit Plc and 
its associates in 2002 for UK non-audit services (principally taxation advisory services, due diligence services and interim review)
amounted to £0.2m (2001: £0.4m).
Fees paid to KPMG Audit Plc and its associates by Group joint venture companies in respect of audit services amounted to £0.1m 
(2001: £0.1m).
6. Employee numbers and payroll costs
2002 2001
Number Number
The average number of employees during each year including Directors was:
Investments 39 43
Business services 9,526 6,357
Construction services 6,810 7,041
Corporate centre 584 268
16,959 13,709
UK 13,584 10,430
Overseas 3,375 3,279
16,959 13,709
The aggregate payroll costs during each year amounted to:
2002 2001
£m £m
Wages and salaries 377.9 288.7
Social security costs 44.8 35.1
Other pension costs 8.2 4.1
430.9 327.9
As part of the Business Improvement Programme initiated in 2001, a number of employees were transferred in 2002 from the business
segments to dedicated shared service functions within the corporate centre.
Other pension costs represent amounts in respect of the Group’s UK and overseas schemes as described in Note 30.
7. Directors’ remuneration
Detailed information concerning Directors’ remuneration, including their pension benefits and long term incentive arrangements, is set
out in the Remuneration Report on pages 35 to 41.
Carillion plc
Carillion plc Annual Report and Accounts 2002 57 Carillion plc
Notes to the Financial Statements continued
8. Taxation
(a) Analysis of taxation charge in year
2001
2002 as restated
£m £m
UK taxation:
Corporation tax 9.7 2.4
Adjustment in respect of previous periods 1.3 (1.3)
Attributable taxation of joint ventures 1.9 5.4
Overseas taxation:
Current year 1.1 0.9
Adjustment in respect of previous periods (0.2) 0.1
Total current taxation 13.8 7.5
Deferred taxation:
Origination and reversal of timing differences (0.2) 0.4
Adjustment in respect of previous periods (0.7) 2.2
Total deferred taxation (0.9) 2.6
Total taxation on profit on ordinary activities 12.9 10.1
The tax charge for the year ended 31 December 2001 has been restated following adoption by the Group of FRS 19 ‘Deferred tax’ and 
UITF 34 ‘Pre-contract costs’ as disclosed in Note 31.
(b) Reconciliation of current taxation charge
The UK standard rate of corporation tax for the year is 30% (2001: 30%). The actual tax rate differs from the standard rate for the
reasons set out below:
2001
2002 as restated
£m £m
Profit on ordinary activities before taxation 42.2 34.7
Taxation on profit on ordinary activities at UK standard rate 
of corporation tax of 30% (2001: 30%) 12.7 10.4
Permanent differences 2.6 1.2
Other timing differences (0.2) 0.4
Other timing differences not recognised (0.7) (2.8)
Overseas profits not taxable (0.5) (0.2)
Utilisation of overseas losses not previously recognised (1.0) 0.1
Capital items not taxable 0.1 (1.2)
Amortisation of own shares (1.0) 0.6
Amortisation of goodwill 0.7 0.2
Adjustment in respect of previous periods 1.1 (1.2)
Current taxation charge for the year 13.8 7.5
(c) Factors that may affect future tax charges
The Group has brought forward tax losses in excess of £100m which have not yet been fully agreed by the Inland Revenue. In accordance
with FRS 19, a deferred tax asset, valued in excess of £30m, has not been recognised in respect of these losses due to the lack of certainty
regarding quantum and timing of future years’ taxable profits in the companies involved. In the event that such profits are realised this 
may result in the Group tax rate being lower than the standard rate of corporation tax in the UK.
The tax rate in the joint venture companies in which the Group has PPP investments is likely to be greater than the standard rate of
corporation tax in the UK. This is generally due to capital expenditure not qualifying for tax relief. As the PPP element of the Group’s
profit before taxation increases in future years it will have the effect of increasing the Group’s tax rate above the standard rate of
corporation tax in the UK.
Annual Report and Accounts 2002 58
Carillion plc 9. Profit for the financial year
In accordance with Section 230 (4) of the Companies Act 1985 the Company has taken advantage of the exemption from the
requirement to present its own profit and loss account. The profit for the financial year of the Company is £15.0m (2001: £23.6m).
10. Equity dividends
2002 2001
Pence Pence
£m per share £m per share
Equity shares
Ordinary shares:
Interim 3.1 1.5 2.8 1.38
Final 6.8 3.3 6.2 3.02
Dividends waived (see Note 15 and Note 24) –– (0.1) –
Total equity dividends 9.9 4.8 8.9 4.40
11. Earnings per ordinary share
(a) Basic
Earnings per share is calculated by dividing the profit attributable to ordinary shareholders, amounting to £27.2m (2001: £21.5m 
as restated), by 206,450,536 (2001: 205,485,587) ordinary shares being the weighted average number of shares in issue during the
year. The weighted average number of shares excludes shares held by the Employee Share Ownership Plan (see Note 15) and the QUEST
(see Note 24), which amount to 6,489,637 shares in total.
(b) Basic before all exceptional items and goodwill amortisation
A reconciliation of the basic earnings per ordinary share to the adjusted amounts shown on the face of the profit and loss account 
is calculated below to show the impact of all exceptional items (as disclosed in Note 3) and the amortisation charge from goodwill 
(as disclosed in Note 12):
2002 2001
Pence
Pence £m per share
£m per share as restated as restated
Profit attributable to ordinary shareholders 27.2 13.2 21.5 10.5
Exceptional items:
Operating items –– 10.1 4.9
Loss/(profit) on sale of businesses 5.3 2.5 (5.3) (2.6)
Provisions against retained contracts –– 5.3 2.6
Less taxation in respect of the above (0.9) (0.4) (3.3) (1.6)
Profit before all exceptional items 31.6 15.3 28.3 13.8
Amortisation of goodwill 2.7 1.3 0.5 0.2
Less taxation in respect of the above (0.1) – ––
Profit before all exceptional items and goodwill amortisation 34.2 16.6 28.8 14.0
(c) Diluted
Diluted earnings per ordinary share have been calculated on both profit before and after all exceptional items, using the same earnings
numerators as set out in (a) and (b) above and by reference to the following number of shares:
Number of ordinary shares
2002 2001
million million
Number of ordinary shares per basic earnings per share calculations 206.5 205.5
Adjustments to reflect dilutive shares under option 2.1 1.3
Number of ordinary shares per diluted earnings per share calculations 208.6 206.8
Carillion plc
Carillion plc Annual Report and Accounts 2002 59 Carillion plc
Notes to the Financial Statements continued
12. Intangible assets
Goodwill
Group £m
Cost:
At 1 January 2002 43.5
Addition 8.9
At 31 December 2002 52.4
Amortisation:
At 1 January 2002 0.7
Provision for year 2.7
At 31 December 2002 3.4
Net book value:
At 31 December 2002 49.0
At 31 December 2001 42.8
The addition to goodwill relates to the acquisition of a portfolio of contracts from Citex Management Services Limited as disclosed 
in Note 29. The goodwill relating to this acquisition is being amortised over six years as in the opinion of the Directors this is the 
minimum period over which the Group will derive economic benefit from the acquisition.
Goodwill at cost of £43.5m at 1 January 2002 relates to the acquisition of the minority interests in the Group’s French subsidiaries 
in 1998 amounting to £1.8m and the acquisition of G T Railway Maintenance Holdings Limited in 2001 amounting to £41.7m. 
The goodwill arising on both acquisitions is being amortised over 20 years.
13. Tangible fixed assets
Plant,
Land and machinery
buildings and vehicles Total
Group £m £m £m
Cost or valuation:
At 1 January 2002 21.3 46.8 68.1
Exchange rate adjustments (0.4) (1.5) (1.9)
Additions 1.8 22.2 24.0
Disposals (3.5) (9.0) (12.5)
At 31 December 2002 19.2 58.5 77.7
Depreciation:
At 1 January 2002 5.2 9.9 15.1
Exchange rate adjustments (0.3) (1.1) (1.4)
Provision for year 1.0 13.6 14.6
Eliminated in respect of disposals (1.1) (6.4) (7.5)
At 31 December 2002 4.8 16.0 20.8
Net book value:
At 31 December 2002 14.4 42.5 56.9
At 31 December 2001 16.1 36.9 53.0
Included in the net book value of plant, machinery and vehicles is £6.5m (2001: £5.4m) in respect of assets held under finance leases 
and hire purchase contracts. Depreciation for the year in respect of these assets amounted to £1.9m (2001: £0.9m).
Annual Report and Accounts 2002 60
Carillion plc The net book value of land and buildings comprises:
2002 2001
Group £m £m
Freehold 6.9 9.6
Long leasehold 4.5 3.8
Short leasehold 3.0 2.7
Net book value 14.4 16.1
The cost or valuation of land and buildings comprises:
2002 2001
Group £m £m
Cost 18.1 20.2
1985 valuation 1.1 1.1
19.2 21.3
The 1985 valuation was on the basis of open market value for existing use.
Freehold land held by the Group amounting to £1.0m (2001: £1.6m) has not been depreciated.
14. Investments
Equity
Loans investments Total
Group £m £m £m
Investments in joint ventures
Cost:
At 1 January 2002 5.5 46.7 52.2
Equity investments (see Note 29) – 0.1 0.1
Net loan advances 2.5 – 2.5
At 31 December 2002 8.0 46.8 54.8
Share of post acquisition results:
At 1 January 2002 8.6 8.6
Exchange adjustments (0.8) (0.8)
Share of results for the year after taxation 2.2 2.2
Dividends paid (3.8) (3.8)
At 31 December 2002 6.2 6.2
Net book value:
At 31 December 2002 8.0 53.0 61.0
At 31 December 2001 5.5 55.3 60.8
The Group’s aggregate share of joint venture net assets is analysed on the following page. The borrowings within PPP projects totalling
£506.4m (2001: £463.6m) are without recourse to the Carillion Group.
Carillion plc
Carillion plc Annual Report and Accounts 2002 61 Carillion plc
Notes to the Financial Statements continued
14. Investments (continued)
Other Other
PPP Projects joint ventures Total PPP Projects joint ventures Total
2002 2002 2002 2001 2001 2001
£m £m £m £m £m £m
Fixed assets 122.3 12.9 135.2 114.9 22.1 137.0
Cash 58.8 12.7 71.5 101.5 2.7 104.2
Other current assets 387.6 51.8 439.4 297.1 33.7 330.8
Share of gross assets 568.7 77.4 646.1 513.5 58.5 572.0
Borrowings due within one year (22.5) (10.9) (33.4) (11.3) (0.8) (12.1)
Other creditors due within one year (22.0) (41.7) (63.7) (15.1) (24.8) (39.9)
Borrowings due after one year (483.9) (1.2) (485.1) (452.3) (0.8) (453.1)
Other creditors due after one year (1.1) (1.3) (2.4) (0.1) (1.8) (1.9)
Provisions (8.4) (0.1) (8.5) (6.8) (2.9) (9.7)
Share of gross liabilities (537.9) (55.2) (593.1) (485.6) (31.1) (516.7)
30.8 22.2 53.0 27.9 27.4 55.3
Loan advances 8.0 – 8.0 5.5 – 5.5
Share of net assets 38.8 22.2 61.0 33.4 27.4 60.8
Fixed assets and other current assets within PPP projects include cumulative capitalised interest amounting to £7.6m (2001: £6.5m) 
and £38.0m (2001: £23.8m) respectively.
Company £m
Investments in subsidiaries
Cost:
At 1 January 2002 147.4
Transfer from Group undertakings 18.9
At 31 December 2002 166.3
The principal subsidiaries and joint ventures included within these financial statements are shown on page 78.
15. Other investments
Group Company
Other Own shares Total Own shares
£m £m £m £m
Cost:
At 1 January 2002 0.5 6.0 6.5 6.0
Additions 0.1 – 0.1 –
At 31 December 2002 0.6 6.0 6.6 6.0
Provisions/amortisation:
At 1 January 2002 0.5 3.3 3.8 3.3
Reversal of amortisation in prior years – (3.3) (3.3) (3.3)
At 31 December 2002 0.5 – 0.5 –
Net book value:
At 31 December 2002 0.1 6.0 6.1 6.0
At 31 December 2001 – 2.7 2.7 2.7
The investment in own shares represents shares in the Company held by the Carillion Employee Share Ownership Plan (ESOP), 
an employee share ownership trust, which may subsequently be awarded to Executive Directors and senior employees under the
Founders’ Equity Plan and the Long Term Incentive Plans. Details of the plans are given in the Remuneration Report on pages 35 to 41.
At 31 December 2002 the trust held 4,736,226 (2001: 4,736,226) shares in the Company with a market value of £5.3m (2001: £6.6m).
The nominal value of these shares is £2.4m (2001: £2.4m).
The ESOP trust has elected to waive all dividends except for a total payment of 1p at the time each dividend is paid.
The ESOP trust is regarded as a quasi subsidiary under FRS 5 and its assets, liabilities and results are aggregated into the financial
statements of both the Company and the Group.
Annual Report and Accounts 2002 62
Carillion plc 16. Stocks
2001
2002 as restated
Group £m £m
Raw materials:
Land for development 0.4 0.4
Other raw materials 15.0 17.3
15.4 17.7
Long term contract balances:
Net cost less foreseeable losses 9.2 6.9
Work in progress 18.2 28.2
Finished goods and goods for resale 0.9 0.9
43.7 53.7
Work in progress includes PPP bid costs amounting to £1.9m (2001 as restated: £1.8m).
17. Debtors
Group Company
2001
2002 as restated 2002 2001
£m £m £m £m
Amounts falling due within one year
Trade debtors 223.7 203.2 – –
Amounts recoverable on contracts 185.0 246.9 – –
Amounts owed by group undertakings – – 244.0 201.5
Amounts owed by joint ventures 11.1 10.9 – –
Amounts owed under joint arrangements 28.9 29.8 – –
Other debtors 12.4 11.8 1.3 2.7
Pension prepayments 5.6 3.6 – –
Other prepayments and accrued income 33.9 34.8 – –
500.6 541.0 245.3 204.2
Amounts falling due after more than one year
Trade debtors 2.2 7.4 – –
Amounts recoverable on contracts 7.3 10.1 – –
Amounts owed by group undertakings – – 2.7 –
Amounts owed by joint ventures 0.1 – – –
Other debtors 1.5 0.2 – –
Pension prepayments 11.9 13.5 – –
23.0 31.2 2.7 –
Total debtors 523.6 572.2 248.0 204.2
In the Company, the amounts owed by group undertakings falling due after more than one year relate to a finance lease transaction
entered into with GT Railway Maintenance Limited (GTRM). Further details are disclosed in Note 20.
18. Current asset investments
2002 2001
Group £m £m
Listed investments 0.4 0.7
Unlisted investments 7.8 8.7
8.2 9.4
Listed investments comprise Eurotunnel units and warrants that had a market value at 31 December 2002 of £0.4 m (2001: £0.8m).
Carillion plc
Carillion plc Annual Report and Accounts 2002 63 Carillion plc
Notes to the Financial Statements continued
19. Creditors: amounts falling due within one year
Group Company
2001
2002 as restated 2002 2001
£m £m £m £m
Bank loans and overdrafts 18.3 42.9 23.2 40.1
Net obligations due under finance leases 2.1 2.3 0.2 –
Borrowings 20.4 45.2 23.4 40.1
Payments received on account:
Long term contracts 44.6 92.6 – –
Other 3.5 7.8 – –
Trade creditors 276.7 309.7 – –
Bills of exchange payable 4.1 7.6 – –
Amounts owed to group undertakings – – 184.4 170.1
Amounts owed to joint ventures 1.3 13.0 – –
Amounts owed under joint arrangements 8.4 4.2 – –
Corporation tax 10.0 7.1 – –
Other taxation and social security costs 37.2 34.8 – –
Proposed dividend 6.8 6.2 6.8 6.2
Other creditors 40.9 45.4 0.1 0.2
Accruals and deferred income 141.4 151.6 0.4 0.5
595.3 725.2 215.1 217.1
Accruals and deferred income in respect of the Group includes £1.0m (2001 as restated: £1.3m) relating to deferred PPP bid cost recoveries.
20. Creditors: amounts falling due after more than one year
Group Company
2001
2002 as restated 2002 2001
£m £m £m £m
Bank loans 61.5 – 61.5 –
Net obligations due under finance leases 5.3 4.6 2.7 –
Borrowings 66.8 4.6 64.2 –
Payments received on account 3.5 3.1 – –
Trade creditors 3.4 1.5 – –
Amounts owed under joint arrangements 0.3 0.3 ––
Accruals and deferred income 6.5 6.7 – –
80.5 16.2 64.2 –
An analysis of the maturity of net obligations due under finance leases can be found in Note 21 on page 67.
Accruals and deferred income includes £2.3m (2001 as restated: £3.0m) relating to deferred PPP bid cost recoveries.
In the Company, net obligations due under finance leases relates to a financing agreement for fixed assets currently used by GTRM, 
a wholly owned subsidiary. The assets have been recognised in the accounts of GTRM in accordance with SSAP 21 ‘Accounting for
leases and hire purchase contracts’, together with a corresponding liability to Carillion plc. Carillion plc recognises this asset within
amounts owed by Group undertakings in Note 17.
The above bank loans are repayable as follows:
Group Company
2002 2001 2002 2001
£m £m £m £m
Between two and five years 61.5 – 61.5 –
Interest is charged on the above bank loans at floating rates linked to LIBOR.
All bank loans and overdrafts are unsecured. Net obligations due under finance leases are secured on the assets to which they relate.
Annual Report and Accounts 2002 64
Carillion plc 21. Financial instruments and risk management
The main purpose of the Group’s financial instruments is to provide finance for its operations. The Group’s principal financial
instruments, other than derivatives, include bank loans and overdrafts, cash and short term deposits. In addition, various financial
instruments, for example trade debtors and trade creditors, arise directly from the Group’s operations. The Group’s derivative
transactions relate to forward foreign exchange contracts.
The Group’s policies with regard to financial instruments have remained unchanged throughout the year. 
The Group’s treasury department manages the main financial risks within policies and operating parameters approved by the Board. 
These are discussed in detail below and in the Financial Review on pages 28 to 30 and are designed to reduce the financial risks
affecting the Group. The Group’s treasury department does not enter into speculative financial transactions. The Group’s main 
financial risks are funding and liquidity risk, interest rate risk and currency risk.
Funding and Liquidity
The financial assets and liabilities of the Group may be summarised as follows:
2002 2001
Weighted Weighted
average average
period until period until
maturity of maturity of
Assets Liabilities liabilities Assets Liabilities liabilities
£m £m years £m £m years
Nil coupon:
Sterling 2.9 9.6 1.8 7.6 5.8 1.9
Canadian dollars 5.3 0.1 1.5 7.3 0.4 1.5
Euro currencies 0.4 –– 0.3 ––
Other 2.6 1.7 1.5 2.6 2.4 1.5
11.2 11.4 1.8 17.8 8.6 1.8
Floating rate:
Sterling 50.4 50.5 55.5 17.1
Canadian dollars 8.3 16.5 13.1 17.2
Euro currencies 19.5 12.7 11.9 8.6
Other 6.8 0.1 13.9 –
85.0 79.8 94.4 42.9
Fixed rate:
Sterling – 7.1 – 6.5
Euro currencies – 0.2 – 0.2
Other – 0.1 – 0.2
– 7.4 – 6.9
Total 96.2 98.6 112.2 58.4
Summary by currency
Sterling 53.3 67.2 63.1 29.4
Canadian dollars 13.6 16.6 20.4 17.6
Euro currencies 19.9 12.9 12.2 8.8
Other 9.4 1.9 16.5 2.6
Total 96.2 98.6 112.2 58.4
Carillion plc
Carillion plc Annual Report and Accounts 2002 65 Carillion plc
Notes to the Financial Statements continued
21. Financial instruments (continued)
The Group’s financial assets, which exclude short term debtors and pension prepayments, consist primarily of cash at bank and on
deposit, which earn interest at money market related rates. The financial assets on which no interest is earned are primarily trade
debtors and amounts recoverable on contracts, which are expected to be received in more than one year.
The Group’s financial liabilities, which exclude short term creditors and deferred income relating to PPP bid cost recoveries, are set out
above. No interest rate swaps or caps have been entered into by the Group. Floating rate financial liabilities comprise bank borrowings
that bear interest based upon money market or base rate related interest rates. Fixed rate financial liabilities comprise finance lease and
hire purchase contract liabilities.
The Group’s consolidated cash position at the balance sheet date is not representative of the position at other times of the year. Whilst
material working capital movements and the resultant cash flows are a significant feature of the Group’s cash profile throughout the
year, a number of factors combine to exaggerate the year end position. Such factors include a reduction in the demand for working
capital over the extended holiday period, shorter daylight and therefore working hours and a traditional industry focus on the
settlement of contractual claims.
Interest Rate Risk
The Group’s debt is predominantly short term and related to working capital movements. No interest rate hedging is currently undertaken.
Currency Exposure
The Group has small and infrequent transactional currency exposures. Group policy requires net exposures to be hedged using 
forward contracts or currency options as soon as a contractual commitment is made. The Group’s policy on hedging currency net 
assets is to hedge, where practical, at least 50% of the net asset value of overseas investments where such net assets exceed £10m
equivalent. This hedging is currently achieved through currency borrowings and forward contracts. There were no material 
unrecognised gains or losses on instruments used for exchange rate hedging either during or at the end of the year.
The Group’s currency exposures are:
Net foreign currency monetary assets/(liabilities)
US Dollars Euro Danish Kr Other Total
Functional currency of Group operation £m £m £m £m £m
At 31 December 2002
Sterling – 0.2 1.4 1.8 3.4
Other 1.3 –– 0.6 1.9
Total 1.3 0.2 1.4 2.4 5.3
At 31 December 2001
Sterling (0.1) 0.6 7.3 (1.0) 6.8
Other 7.3 ––– 7.3
Total 7.2 0.6 7.3 (1.0) 14.1
At 31 December 2002 the Group had forward foreign exchange contracts in place for the sale of US$17.3m which acts as a hedge for
assets denominated in currencies linked to the US dollar.
Annual Report and Accounts 2002 66
Carillion plc The maturity profile of the financial liabilities, other than short term creditors such as trade creditors, accruals and deferred income
relating to PPP bid cost recoveries, is as follows:
Other
Finance financial Group
Overdrafts Loans leases liabilities Total
£m £m £m £m £m
At 31 December 2002
More than five years –– 1.6 0.2 1.8
Between two and five years – 61.5 2.2 2.6 66.3
Between one and two years –– 1.5 8.6 10.1
More than one year – 61.5 5.3 11.4 78.2
Less than one year 18.3 – 2.1 – 20.4
18.3 61.5 7.4 11.4 98.6
At 31 December 2001
Between two and five years –– 2.8 2.5 5.3
Between one and two years –– 1.8 6.1 7.9
More than one year –– 4.6 8.6 13.2
Less than one year 25.7 17.2 2.3 – 45.2
25.7 17.2 6.9 8.6 58.4
In addition, there were the following undrawn facilities, with an average maturity of 1 year and 10 months in respect of which all
conditions precedent had been met:
2002 2001
£m £m
Expiring in one year or less (but extendible by one year at the Group’s option) 7.5 96.8
Expiring in one year or less (but extendible by two years at the Group’s option) 16.0 43.5
Expiring between two and five years 83.5 –
107.0 140.3
Credit Risk and Exposures
The Group considers that it is not exposed to a significant amount of credit risk.
Credit exposures on financial instruments arise through short term deposits and foreign exchange hedging. Such transactions are
executed only with highly credit rated, authorised counterparties based on ratings issued by the major rating agencies. Counterparty
exposure positions are monitored regularly.
Fair Values
The book and fair values of the Group’s financial instruments at 31 December 2002 and 31 December 2001 are not materially different.
Carillion plc
Carillion plc Annual Report and Accounts 2002 67 Carillion plc
Notes to the Financial Statements continued
22. Provisions for liabilities and charges
Deferred
taxation Other Total
as restated provisions as restated
Group £m £m £m
At 1 January 2002 7.2 5.8 13.0
Exchange rate movement (0.5) – (0.5)
Transfer to profit and loss account (0.9) – (0.9)
Expenditure in year – (3.5) (3.5)
At 31 December 2002 5.8 2.3 8.1
Other provisions comprise property exit costs arising from the Business Improvement Programme that are expected to be utilised within
12 months.
Details relating to deferred taxation are as follows:
2001
2002 as restated
Liability recognised £m £m
Accelerated capital allowances 0.9 0.4
Other timing differences 4.9 6.8
5.8 7.2
23. Share capital
2002 2001
£m £m
Authorised
Equity: 325,000,000 ordinary shares of 50p each 162.5 162.5
Nominal
Number value
million £m
Allotted, called up and fully paid
At 1 January 2002 212.7 106.3
Options exercised under Sharesave scheme 0.1 0.1
New share capital subscribed by QUEST (see Note 24) 0.2 0.1
At 31 December 2002 213.0 106.5
Details of options granted to Directors and employees under the Company’s share option schemes during the year are set out in 
the Remuneration Report on pages 35 to 41.
In respect of the Sharesave Scheme 146,599 ordinary shares of 50p were issued at various times throughout the year at the option 
price of 109.1p.
Annual Report and Accounts 2002 68
Carillion plc 24. Reserves
The movements on reserves are summarised as follows:
Share
premium Merger Profit and
account reserve loss account Total
Group £m £m £m £m
At 1 January 2002 (as previously reported) 5.3 8.2 23.5 37.0
Prior year adjustments (see Note 31) –– (11.9) (11.9)
At 1 January 2002 (as restated) 5.3 8.2 11.6 25.1
Exchange rate movements –– (1.4) (1.4)
Retained profit for the year –– 17.3 17.3
Transfer arising on issue of shares to QUEST –– (0.2) (0.2)
Premium arising on issue of shares 0.2 –– 0.2
At 31 December 2002 5.5 8.2 27.3 41.0
At 31 December 2002 cumulative goodwill written off to the profit and loss account reserve amounted to £124.1m (2001: £124.1m).
The merger reserve arose on the demerger from Tarmac plc on 29 July 1999.
On 4 December 2002 the qualifying employee share ownership trust (QUEST) subscribed for 180,646 shares in the Company at 
market value for a consideration of £0.2m which was funded by subsidiary undertakings. The cost of this transaction has been
transferred directly to the profit and loss account reserve of the Group.
At 31 December 2002 the total number of shares held by the QUEST amounted to 1,753,411 (2001: 1,572,765) and had a market
value of £1.9m (2001: £2.2m). The QUEST elected to waive all dividends in excess of 0.01 pence per share.
Share
premium Profit and
account loss account Total
Company £m £m £m
At 1 January 2002 5.3 26.8 32.1
Retained profit for the year – 5.1 5.1
Premium arising on issue of shares 0.2 – 0.2
At 31 December 2002 5.5 31.9 37.4
Carillion plc
Carillion plc Annual Report and Accounts 2002 69 Carillion plc
Notes to the Financial Statements continued
25. Other guarantees and contingent liabilities
Group Company
2002 2001 2002 2001
£m £m £m £m
Guarantees in respect of borrowings of subsidiaries, joint ventures 
and joint arrangements – – 9.4 7.0
Guarantees in respect of deferred equity payments 
in PPP joint ventures 6.7 6.3 6.7 6.3
Guarantees in respect of letters of credit issued by banks in respect 
of deferred equity payments in PPP joint ventures 9.8 9.8 9.8 9.8
Group
Guarantees and counter indemnities have been given to financial institutions in respect of the provision of performance and other
contract related bonds that are issued in the normal course of business.
Claims under contracts and other agreements, including joint arrangements, are outstanding in the normal course of business.
The Group in the normal course of its construction activities is the subject of certain legal proceedings, which are regarded as unlikely 
to succeed or to have a material effect on the Group’s financial position.
Company
The Company has issued performance guarantees in respect of its subsidiaries, joint ventures and joint arrangements in the normal
course of business.
26. Financial and capital commitments
2002 2001
Group commitments for capital expenditure £m £m
Contracts placed 6.0 3.9
2002 2001
Group commitments for investments £m £m
Equity and subordinated debt in PPP joint ventures 16.5 16.1
2002 2001
Land and Land and
buildings Other buildings Other
Group annual commitments under non-cancellable operating leases £m £m £m £m
Annual commitments expiring:
Within one year 1.8 2.7 1.0 2.1
In second to fifth year inclusive 2.1 11.0 2.6 9.7
Over five years 3.1 – 5.3 –
7.0 13.7 8.9 11.8
Annual Report and Accounts 2002 70
Carillion plc 27. Related parties
Group joint ventures
Sales and purchases between the Group and its joint ventures, which are in the normal course of business and on commercial terms,
amounted to:
2002 2001
Sales to Group joint ventures £m £m
PPP Projects
Accommodation Services (Holdings) Limited 125.5 123.0
Ellenbrook Holdings Limited 42.5 –
The Hospital Company (Swindon & Marlborough) Holdings Limited 15.7 41.9
Others 26.6 42.5
210.3 207.4
Other joint ventures 2.9 7.1
213.2 214.5
Purchases from Group joint ventures 1.1 7.0
The debtor and creditor balances between the Carillion Group and its joint ventures are disclosed in Notes 17 and 19 respectively.
28. Cash flow notes
(a) Reconciliation of operating profit to net cash inflow from operating activities
2001
2002 as restated
£m £m
Group operating profit before exceptional items 37.8 27.0
Depreciation 14.6 12.5
Impairment of tangible fixed assets – 3.5
Profit on disposal of fixed assets (0.8) (1.1)
Decrease in market value of listed current asset investments 0.3 –
Amortisation of goodwill 2.7 0.5
Amortisation of own shares (3.3) 2.0
Provision against other fixed asset investments – 0.5
Decrease/(increase) in stocks 9.7 (0.4)
Decrease/(increase) in debtors 41.9 (11.1)
(Decrease)/increase in creditors due within one year (96.9) 25.8
Increase in creditors due after more than one year 2.1 0.8
(Decrease)/increase in bills of exchange (3.5) 0.6
Net cash inflow from operating activities before exceptional items 4.6 60.6
Exceptional operating cash spend (3.5) (6.8)
Net cash inflow from operating activities 1.1 53.8
(b) Analysis of changes in net funds/(debt)
As at Exchange Other As at
1 January rate non-cash 31 December
2002 Cash flows movements movements 2002
£m £m £m £m £m
Cash at bank and in hand 74.1 (18.4) (1.1) – 54.6
Bank overdrafts (25.7) 8.0 (0.6) – (18.3)
48.4 (10.4) (1.7) – 36.3
Short term deposits 20.4 10.6 (0.5) – 30.5
Bank loans (17.2) (45.0) 0.7 – (61.5)
Finance leases (6.9) 2.5 – (3.0) (7.4)
Net funds/(debt) 44.7 (42.3) (1.5) (3.0) (2.1)
Carillion plc
Carillion plc Annual Report and Accounts 2002 71 Carillion plc
Notes to the Financial Statements continued
28. Cash flow notes (continued)
(c) Reconciliation of net cash flow to movement in net funds/(debt)
2002 2001
£m £m
(Decrease)/increase in cash in the year (10.4) 4.7
Increase/(decrease) in short term deposits 10.6 (4.2)
Cash inflow from drawdown of debt (45.0) –
Cash outflow from finance leases 2.5 1.9
Movement in net funds resulting from cash flows (42.3) 2.4
Finance leases of subsidiary undertakings acquired – (7.0)
Exchange rate movements (1.5) 0.3
Capital value of new finance leases (3.0) –
Movement in net funds in the year (46.8) (4.3)
Net funds at 1 January 44.7 49.0
Net (debt)/funds at 31 December (2.1) 44.7
29. Acquisitions and disposals
(a) Acquisitions
On 6 September 2002, the Group acquired a portfolio of facilities management contracts from Citex Management Services Limited. 
The total consideration of £8.9m was satisfied in cash and includes costs of £0.5m that were associated with the acquisition. 
The acquisition did not give rise to the transfer of any fixed assets or working capital to the Group and therefore the consideration 
paid of £8.9m represents goodwill. The goodwill is being amortised over six years as disclosed in Note 12.
The Group made equity investments amounting to £0.1m (see Note 14) in joint venture companies during the year.
(b) Disposals
During the year, the Group disposed of a number of small non-core businesses. The movements in total that relate to these disposals
are summarised in the table below:
Net book value
£m
Stock (0.2)
Debtors (1.4)
Cash (0.2)
Creditors due within one year 1.1
Creditors due in more than one year 0.4
Net assets disposed of (0.3)
Fair value of consideration received 0.7
Closure costs (0.7)
Loss on disposal (0.3)
The consideration received was satisfied in cash and is stated after deducting costs associated with the disposals of £0.1m.
The disposals have been reflected in the Group cash flow statement as follows:
£m
Cash consideration received (net of disposal costs) 0.7
Cash in businesses disposed of (0.2)
Closure costs (0.2)
Cash inflow in respect of disposals per cash flow statement 0.3
The businesses disposed of do not have a material impact on the operating results and cash flows of the Group.
Annual Report and Accounts 2002 72
Carillion plc 30. Pension arrangements
Carillion operates a number of pension schemes in the United Kingdom for eligible employees. The main defined benefit schemes are: 
The Carillion Staff Pension Scheme
The Carillion ‘B’ Pension Scheme
The Carillion Public Sector Pension Scheme
Shared Cost Sections of the Railways Pension Scheme
Carillion Staff and ‘B’ Pension Schemes
Actuarial valuations of the above schemes were undertaken by Carillion’s independent actuaries as at 31 March 2000. The projected
unit method was used and the key actuarial assumptions were:
% per annum
Staff Scheme ‘B’ Scheme
Long term rate of investment return 6.0 6.0
General salary and wage inflation 5.0 6.0
Pension increase rate 3.0 3.0
The market value of the schemes’ assets at this date were £443m and £114m, the value of which represented approximately 127% and
140% of the benefits that had accrued to members at that date, after allowing for assumed future increases in earnings. Having kept 
the funding position under regular review and in the light of the prevailing downturn in investment markets, the Group recommenced its
contributions to the schemes in December 2002. The contributions paid during 2002 were £1.1m (2001: £nil) in respect of the Carillion
Staff Pension Scheme and £0.1m (2001: £nil) in respect of the Carillion ‘B’ Pension Scheme. A full valuation of the schemes as at 
31 December 2002 is under way.
Carillion Public Sector Pension Scheme
This scheme was established to accept transfers from public sector schemes where the Group tenders for public sector outsourcing 
or PPP contracts. It is generally a condition of such tenders that the contractor must offer pension arrangements for the employees
concerned which are ‘broadly comparable’ to those provided in the public sector. The last formal valuation was carried out by
independent actuaries as at 31 December 2000. The attained age method was used and the key actuarial assumptions were:
Long term rate of investment return 7%
Increases to pensionable salaries 5%
Real investment return above pay increases 2%
Real investment return above price inflation 4%
Increases to pensions in payment (in excess of GMPs) 3%
Price inflation 3%
Real pension increases above price inflation 0%
At 31 December 2000 the market value of the scheme’s assets was £65.2m, which represented approximately 135% of the benefits
that had accrued to members at that date, after allowing for assumed future increases in earnings. The employer contributes to this
scheme at the rate of 14% of pensionable salaries. The contributions paid during 2002 were £2.0m (2001: £1.9m). A full valuation of
the scheme as at 31 December 2002 is under way.
Shared Cost Sections of the Railways Pension Scheme
Employees of GTRM and Centrac who were previously employees of British Rail have pension provision via Shared Cost Sections of the
Railways Pension Scheme. The Railways Pension Scheme is an industry-wide scheme administered by Pensions Management Limited 
on behalf of the Railways Pension Trustee Company Limited.
Shared cost arrangements are such that the employer and members share the cost of future service liabilities on a 60/40 split
respectively and any surplus emerging over time is dealt with on a similar basis. The current funding rate of these Shared Cost Sections 
is 12.5%, split 7.5% and 5% between the employer and scheme members respectively. This is a reduced rate and is being subsidised 
by existing surpluses in the Shared Cost Section. This approach is in common with the majority of the Shared Cost Sections of the
Railways Pension Scheme. The contributions paid by the employer during 2002 were £4.2m (2001: £0.8m) for GTRM and £0.1m 
(2001: £0.1m) for Centrac.
Independent actuaries appointed by the Railways Pension Trustee Company Limited carried out a formal valuation of the Railways
Pension Scheme at 31 December 2001 using the projected unit method for GTRM and the attained age method for Centrac. Both
valuations were carried out on a market value basis using the following key financial assumptions:
% per annum
GTRM Centrac
Return on investments 5.61 5.53
Pay inflation 4.00 4.00
Promotional salary scale 0.75 0.75
Increases in pensions and State basic pension increases 2.50 2.50
Carillion plc
Carillion plc Annual Report and Accounts 2002 73 Carillion plc
Notes to the Financial Statements continued
30. Pension arrangements (continued)
The value of the assets of the GTRM section at the valuation date was £263.4m. This represented 108% of the past service liabilities
taking account of future salary increases and the value of reserves.
The value of the assets of the Centrac section at the valuation date was £26.1m. This represented 115% of the past service liabilities
taking account of future salary increases and the value of reserves.
The next full valuation is due as at 31 December 2004.
Other UK and overseas schemes
The Group also operates two UK defined contribution schemes, the Carillion Operatives Retirement Plan and the Carillion Services
Retirement Plan, both of which are closed to new entrants and are in the process of being merged within a single trust. Benefits
similar to those previously offered through these arrangements are now provided via stakeholder pension schemes. For construction
operatives, the stakeholder pension operated by the Building and Civil Engineering Trustee Limited is used. Employees may participate
on a minimal level but for those who are prepared to commit to a percentage of salary, the Company will match an employee
contribution rate of 2% of earnings (up to the upper earnings limit each year) for the first five years of membership and 3% thereafter.
Death in service lump sum benefits are provided in addition.
Employees of Carillion Services who are not eligible for other Carillion schemes are invited to participate in the Carillion Stakeholder
Plus managed by Merrill Lynch Investment Management. Employees contribute 5% and the employer 6.5% of basic salaries. Death 
in service lump sum benefits are provided in addition.
Membership of the Carillion Stakeholder on a non-contributory basis by the employer is open to any Carillion employee subject to 
the requirements of the Inland Revenue on concurrent membership of pension schemes.
The Carillion Group operates a defined benefit scheme for employees of Carillion Canada Inc which is managed locally, and also
provides other post retirement benefits for senior Canadian employees on a defined contribution basis.
Contributions during 2002 were £0.3m (2001: £0.3m) in respect of UK defined contribution schemes, £nil (2001: £nil) in respect of the
Canada defined benefit scheme and £0.8m (2001: £nil) in respect of other post retirement benefits for senior Canadian employees.
SSAP 24 pension costs
Statement of Standard Accounting Practice (SSAP) 24 ‘Accounting for pension costs’ requires that the cost of providing pensions is
recognised over the period benefiting from the employees’ services, with any differences between the charge to the profit and loss
account and the contributions paid to the schemes being shown as an asset or liability on the balance sheet. The pension cost has
been assessed in accordance with the advice of independent qualified actuaries using the assumptions below:
% per annum
Staff ‘B’ Scheme Public Sector GTRM Centrac
Return on investments 7.5 7.5 7.5 7.5 7.5
Pay inflation 4.2 5.2 4.2 4.2 4.2
Pension increase rate 2.5 3.0 3.0 2.5 2.5
Variations in cost have been spread over the estimated average remaining working lifetime of the members of each scheme. In addition
to the contributions paid in the year, the SSAP 24 adjustment to the pension prepayments in respect of the Staff, ‘B’ and Public Sector
schemes during the year under review was an increase of £1.2m (2001: £nil). In addition to the contributions paid in the year, the
SSAP 24 adjustment to the pension prepayments in respect of the Shared Cost Sections of the Railways Pension Scheme was a
reduction of £0.8m (2001: £0.7m) in respect of GTRM and £nil (2001: £0.3m) in respect of Centrac.
Based on the actuarial valuations dated 31 March 2000 and under the provisions of SSAP 24, the Group could have taken a credit to
the profit and loss account for the current year in respect of the Staff, ‘B’ and Public Sector schemes. However, having taken actuarial
advice following the fall in equity markets since the last full valuation, the Directors decided not to take a credit to the profit and loss
account for the year ended 31 December 2002.
An interim valuation of the Staff and ‘B’ schemes was undertaken at 31 March 2002 using broadly similar assumptions to the 31
March 2000 valuation. The results of this valuation indicated that the current employer contribution holiday could continue and that 
a nil profit and loss charge for the year ended 31 December 2002 is still appropriate.
FRS 17 Retirement Benefits
Group
Whilst the Group continues to account for pension costs in accordance with SSAP 24, under FRS 17 ‘Retirement benefits’ the following
transitional disclosures are required.
Annual Report and Accounts 2002 74
Carillion plc The principal assumptions used by the independent qualified actuary in providing the FRS 17 position were:
% per annum
31 December 2002 31 December 2001
UK Canada UK Canada
Rate of increase in salaries 3.58 3.50 3.75 3.75
Rate of increase in pensions 2.33 2.50 2.50 2.50
Inflation rate 2.33 2.50 2.50 2.50
Discount rate 5.50 6.25 5.80 5.80
The market values of the schemes’ assets, which are not intended to be realised in the short term, may be subject to significant 
change before they are realised. The present values of the schemes’ liabilities are calculated by reference to the investment return 
on Grade AA corporate bonds. The assumptions used do not necessarily represent the investment return that may be achieved.
The FRS 17 position for the schemes is as follows:
Expected Railways
rate of return Staff ‘B’ Public Sector Pension
% % Scheme Scheme Scheme Scheme Canada Total
31 December 2002 UK Canada £m £m £m £m £m £m
Equities 7.02 7.75 208.5 53.5 36.6 200.4 7.4 506.4
Government bonds 4.52 5.25 56.6 13.6 14.6 18.4 3.2 106.4
Corporate bonds 5.50 6.00 47.2 12.2 5.6 –– 65.0
Other 4.00 2.75 4.7 1.7 1.5 18.0 0.2 26.1
Market value 317.0 81.0 58.3 236.8 10.8 703.9
Present value of scheme liabilities (367.9) (85.9) (65.6) (257.8) (7.8) (785.0)
(Deficit)/surplus (50.9) (4.9) (7.3) (21.0) 3.0 (81.1)
Shared Cost Sections ––– 8.4 – 8.4
Total (deficit)/surplus (50.9) (4.9) (7.3) (12.6) 3.0 (72.7)
Related deferred tax asset 21.8
Net pension liability (50.9)
Expected Railways
rate of return Staff ‘B’ Public Sector Pension
% % Scheme Scheme Scheme Scheme Canada Total
31 December 2001 UK Canada £m £m £m £m £m £m
Equities 7.25 7.25 261.0 66.7 45.8 261.7 10.1 645.3
Government bonds 4.75 4.75 53.0 13.7 12.9 23.8 5.8 109.2
Corporate bonds 5.75 5.75 60.5 15.3 1.5 –– 77.3
Other 5.00 5.00 0.4 – 3.4 45.5 0.3 49.6
Market value 374.9 95.7 63.6 331.0 16.2 881.4
Present value of scheme liabilities (360.0) (82.0) (58.0) (254.4) (11.8) (766.2)
Surplus 14.9 13.7 5.6 76.6 4.4 115.2
Shared Cost Sections ––– (30.6) – (30.6)
Total surplus 14.9 13.7 5.6 46.0 4.4 84.6
Related deferred tax liability (25.4)
Net pension asset 59.2
If FRS 17 had been adopted in full in the financial statements, the Group’s net assets and profit and loss reserve would be as follows:
2001
2002 as restated
£m £m
Net assets per balance sheet 149.7 134.7
SSAP 24 prepayments reversed (net of related deferred tax) (13.7) (13.9)
Revised net assets excluding pension (liability)/asset 136.0 120.8
Net pension (liability)/asset (50.9) 59.2
Net assets including pension (liability)/asset 85.1 180.0
Profit and loss reserve per balance sheet 27.3 11.6 
SSAP 24 prepayments reversed (net of related deferred tax) (13.7) (13.9)
Revised profit and loss reserve excluding pension reserve 13.6 (2.3) 
Pension reserve (50.9) 59.2
Profit and loss reserve including pension reserve (37.3) 56.9
Carillion plc
Carillion plc Annual Report and Accounts 2002 75 Carillion plc
Notes to the Financial Statements continued
30. Pension arrangements (continued)
If FRS 17 had been adopted in full, the impact on the Group’s profit and loss account and Statement of Total Recognised Gains and
Losses (STRGL) would have been as follows:
31 December 2002
£m
Charge to operating profit
Current service cost (23.1)
Past service cost –
Total (23.1)
Credit/(charge) to other finance income
Expected return on pension scheme assets 48.7
Interest cost on pension scheme liabilities (37.5)
Net finance return 11.2
Recognition in the STRGL
Actual return less expected return on pension scheme assets (representing 19.7% of scheme assets) (139.0)
Experience gains and losses arising on pension scheme liabilities (representing 0.6% of scheme liabilities) (4.9)
Effects of changes in assumptions underlying the present value of pension scheme liabilities (representing 1.1% of scheme liabilities) (8.6)
Exchange rate movements (0.4)
Total recognised gains and losses (152.9)
The analysis of the movement in the surplus during the year is as follows:
£m
Surplus at 1 January 2002 84.6
Current service cost (23.1)
Contributions 7.5
Past service costs –
Other finance income 11.2
Recognised gains and losses (152.9)
Deficit at 31 December 2002 (72.7)
Company
As the schemes are run for the Carillion Group as a whole, the Company is unable to identify its share of the schemes’ assets and
liabilities on a consistent and reasonable basis. Hence, as permitted by FRS 17, the schemes will be accounted for by the Company 
as if the schemes were defined contribution schemes when the accounting standard is fully adopted.
31. Changes in accounting policies
As described in Note 1, the Group has changed its accounting policies in connection with deferred taxation (in accordance with FRS 19
‘Deferred tax’) and pre-contract costs (in accordance with UITF 34 ‘Pre-contract costs’).
The impact of the new accounting policies on the financial statements for the year ended 31 December 2002 and on the previous year 
is as follows:
Total Profit Cumulative
operating before Retained impact on
profit taxation Taxation profit net assets
Group £m £m £m £m £m
Year ended 31 December 2002
As would have been reported under previous accounting policies 53.2 43.3 (13.2) 18.1 162.4
FRS 19 –––– (9.1)
UITF 34 (1.1) (1.1) 0.3 (0.8) (3.6)
As presented 52.1 42.2 (12.9) 17.3 149.7
Year ended 31 December 2001
As previously reported 38.3 35.0 (11.2) 11.8 146.6
FRS 19 –– 1.0 1.0 (9.1)
UITF 34 (0.3) (0.3) 0.1 (0.2) (2.8)
As restated 38.0 34.7 (10.1) 12.6 134.7
The comparative figures shown in these financial statements have been restated to reflect these changes in accounting policies.
Annual Report and Accounts 2002 76
Carillion plc 2001 2000 1999 1998
2002 as restated as restated as restated as restated
Profit and loss account £m £m £m £m £m
Total turnover 1,974.4 1,889.8 1,909.0 1,802.3 1,866.1
Less: share of joint ventures’ turnover (127.1) (191.0) (223.4) (192.6) (171.1)
Group turnover 1,847.3 1,698.8 1,685.6 1,609.7 1,695.0
Group operating profit/(loss)
Operating profit before exceptional items 37.8 27.0 23.9 27.7 18.1
Exceptional operating items – (8.9) (30.0) (1.5) (4.5)
37.8 18.1 (6.1) 26.2 13.6
Share of operating profit in joint ventures:
Operating profit before exceptional items 14.3 21.1 17.8 18.0 22.0
Exceptional operating items – (1.2) (2.0) – (1.4)
14.3 19.9 15.8 18.0 20.6
Total operating profit 52.1 38.0 9.7 44.2 34.2
(Loss)/profit on sale of businesses (5.3) – 3.1 ––
Net interest receivable/(payable):
Group 0.6 0.3 (1.5) (3.7) (16.9)
Joint ventures (5.2) (3.6) (1.8) (2.5) (0.7)
Profit on ordinary activities before taxation 42.2 34.7 9.5 38.0 16.6
Tax on profit on ordinary activities (12.9) (10.1) (1.6) (13.4) (8.4)
Equity minority interests (2.1) (3.1) (1.0) 0.1 (0.1)
Profit for the financial year 27.2 21.5 6.9 24.7 8.1
Balance sheet
Intangible assets 49.0 42.8 1.6 1.7 1.7
Tangible assets 56.9 53.0 47.1 54.2 60.5
Investments in joint ventures:
Share of gross assets 646.1 572.0 517.5 275.9 259.0
Share of gross liabilities (593.1) (516.7) (485.8) (259.8) (223.6)
53.0 55.3 31.7 16.1 35.4
Loan advances 8.0 5.5 17.3 19.7 4.4
61.0 60.8 49.0 35.8 39.8
Other investments 6.1 2.7 1.9 ––
Working capital (11.9) (59.3) (32.5) (101.5) (163.8)
Investments 8.2 9.4 8.0 5.4 1.6
Tax and dividends (22.6) (20.5) (8.8) (11.7) 21.8
Cash (net) 5.3 51.6 50.8 132.2 135.4
152.0 140.5 117.1 116.1 97.0
Equity shareholders’ funds and minority interests 149.7 134.7 116.2 112.2 93.1
Provisions for liabilities and charges 2.3 5.8 0.9 3.9 3.9
152.0 140.5 117.1 116.1 97.0
Operating ratio
Operating profits on turnover (%) 2.6 2.0 0.5 2.5 1.8
Financial ratios
Interest covered by operating profit (times) 11.3 11.5 2.9 7.1 1.9
Dividend cover (times) 2.7 2.4 0.8 3.0 n/a
Share information
Dividends per ordinary share 4.8p 4.4p 4.12p 4.0p n/a
Earnings per share on published earnings 13.2p 10.5p 3.4p 12.1p n/a
Adjusted earnings per share (excluding exceptional items) 15.3p 13.8p 13.0p 12.6p n/a
Carillion plc
Five Year Review
Carillion plc Annual Report and Accounts 2002 77 Carillion plc
Principal subsidiary undertakings, 
joint ventures and joint arrangements
All subsidiary undertakings and joint ventures are incorporated in Great Britain and, except where shown, operate in the UK. All holdings
are of ordinary shares and except where shown, all subsidiary undertakings are 100% owned (with equivalent voting rights) and 
joint ventures and joint arrangements are 50% owned. Shares of those undertakings marked with an asterisk are directly owned by
Carillion plc.
Principal subsidiary undertakings Nature of business
Carillion BTP S.A. (France) Building and civil engineering 
Carillion Canada Inc (Canada) Construction and infrastructure services
Carillion (Caribbean) Ltd (Trinidad & Tobago) Construction and infrastructure services
Carillion (Chelverton) Limited Holding company for property development
Carillion Construction Ltd* Construction and infrastructure management
Carillion Fleet Management Ltd* Supply and maintenance of vehicles
Carillion Highway Maintenance Ltd* Roads and ground maintenance and repair
Carillion Private Finance Ltd* Holding company for PPP project companies
Carillion Services Ltd* Facility management
GT Railway Maintenance Ltd Maintenance of railway infrastructure
Monteray Ltd 51% Property and facilities management services
Postworth Ltd* Supply of operatives to the construction industry
The Markfield Group Ltd* Insurance broking
Principal joint ventures
Public Private Partnerships Associated project
Accommodation Services (Holdings) Ltd 40% GCHQ, Cheltenham
Arrow Light Rail Holdings Ltd 12.5% Nottingham Express Transit
Education Care & Discipline Ltd Medway Secure Training Centre
Education Care & Discipline Three Ltd Rainsbrook Secure Training Centre
Ellenbrook Holdings Ltd University of Hertfordshire student accommodation
Group 4 Carillion (Fazakerley) Ltd HM Prison Altcourse
Group 4 Carillion (Onley) Ltd HM Prison Rye Hill
The Hospital Company (Dartford) Group Ltd 30% Darent Valley Hospital
The Hospital Company (Swindon & Marlborough) Holdings Ltd 33.3% Great Western Hospital, Swindon
Town Hospitals (North Staffordshire) Holdings Ltd Harplands Hospital
Town Hospitals (Southern General) Holdings Ltd Glasgow Southern General Hospital
UK Court Services (Manchester) Holdings Ltd 33.3% Manchester Magistrates Court
UK Highways A55 (Holdings) Ltd A55 North Wales
UK Highways M40 (Holdings) Ltd M40 Motorway
Others Nature of business
Al Futtaim Tarmac (Pte) Ltd (UAE) 49% Building and civil engineering 
Carillion Alawi LLC (Oman) 49% Building and civil engineering 
Emril Services LLC (UAE) 49% Facility management
P J Walls (Civil) Ltd (Ireland) Civil engineering
Servus Ltd (Trinidad & Tobago) Facility management
Weaverbridge Ltd 33.3% Property development
Tarmac retain an indirect business interest in Al Futtaim Tarmac (Pte) Ltd.
Annual Report and Accounts 2002 78
Carillion plc Carillion plc
Principal joint arrangements
Proportion of 
Name interest held Address of principal place of business
CAMBBA Construction Group 25% Mill Lane
Off Watling Street
Shenstone
Staffordshire
England
Carillion-URS Joint Venture 70% Pytchley Maintenance Compound
Pegasus Court
Kettering South Business Park
Kettering
Northamptonshire
England
The Copenhagen Metro 27.5% Refshalevej 157A
Construction Group DK-1432
Copenhagen K
Denmark
A55 Tarmac/Laing JV 50% Anglesey
North Wales
Amec-Tarmac JV 50% Manchester Airport
Manchester
England
Carillion-WSP JV 60% Bradford
West Yorkshire
England
A complete list of subsidiary undertakings will be attached to the Company’s annual return to the Registrar of Companies.
Carillion plc Annual Report and Accounts 2002 79 Carillion plc
Shareholder Information
Results
Half year to 30 June 2003: announced 10 September 2003.
Full year to 31 December 2003: announced March 2004.
Dividends
Dividends are normally paid twice a year. The proposed final
dividend in respect of the year to 31 December 2002 will be
payable on 27 June 2003 to those shareholders on the register
on 2 May 2003. 
A dividend reinvestment plan (DRIP) will also be offered.
For those shareholders who prefer not to participate in the DRIP ,
arrangements can be made to pay your dividends automatically
into your bank or building society account. This service has a
number of benefits:
• there is no chance of the dividend cheque going missing 
in the post;
• the dividend payment is received quicker as the cash is paid
directly into your account on the payment date without 
the need to wait for the cheque to clear: and
• you will be helping Carillion to improve its efficiency 
by reducing printing and cheque clearing costs.
If you wish to register for this service please call Lloyds TSB
Registrars on the number below to request a dividend 
mandate form.
Shareholder enquiries
Lloyds TSB Registrars maintain the register of members of the
Company. If you have any queries concerning your shareholding,
or if any of your details change, please contact the Registrars:
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Telephone
0870 600 3953
Textphone for shareholders with hearing difficulties
0870 600 3950
Multiple accounts on the shareholder register
If you have received two or more sets of the documents
concerning the Annual General Meeting, this means that there is
more than one account in your name on the shareholder register,
perhaps because either your name or your address appear on
each account in a slightly different way. For security reasons, 
the Registrars will not amalgamate the accounts without your
written consent, so if you would like any multiple accounts
combined into one account, please write to Lloyds TSB Registrars
at the address given above.
Shareview (Electronic Communications)
www.shareview.co.uk is a service offered by Lloyds TSB Registrars
that enables you to check your holdings in many UK companies
and helps you to organise your investments electronically. You can
register for this portfolio service which is easy to use, secure and
free as long as you have access to the internet by logging on to
www.shareview.co.uk and following a simple registration process.
Electronic proxy appointments
For the AGM to be held on 14 May 2003, you may, if you wish,
register the appointment of a proxy electronically by logging on
to the website www.sharevote.co.uk 
You will need your voting reference numbers (the three 8-digit
numbers shown on your form of proxy). Alternatively, if you have
registered for a Shareview portfolio, log on to your portfolio 
at www.shareview.co.uk and click on ‘Company Meetings’.
Please note that any electronic communication that is found to
contain a computer virus will not be accepted.
ShareGift
ShareGift is a charity share donation scheme for shareholders,
administered by The Orr Mackintosh Foundation. It is especially
for those who may wish to dispose of a small parcel of shares
whose value makes it uneconomic to sell on a commission basis.
Further information can be obtained at www.sharegift.org or
from Lloyds TSB Registrars.
Postal share dealing service
A low cost postal share dealing service is available through the
Company’s brokers, Cazenove & Co. Ltd. Details of this service
may be obtained by telephoning 020 7606 1768.
Auditors
KPMG Audit Plc
2 Cornwall Street
Birmingham
B3 2DL
Bankers
National Westminster Bank plc
16 South Parade
Nottingham
NG1 2JX
Brokers
Cazenove & Co Limited
12 Tokenhouse Yard
London
EC2R 7AN
Financial Advisers
Lazard Brothers & Co. Limited
21 Moorfields
London
EC2P 2HT
Legal Advisers
Slaughter and May
One Bunhill Row
London
EC1Y 8YY
Internet
Carillion’s website, www.carillionplc.com includes information 
on Carillion’s activities, share price and financial performance.
Annual Report and Accounts 2002 80
Carillion plc Designed and produced by Carnegie Orr +44 (0)20 7610 6140.
Main photography by Simon McComb and Philip Gatward.
Eurostar photograph on page 9 is reproduced by kind permission of Eurostar UK Limited.
Printed on Zanders Mega Matt – a paper that is manufactured using 50% recycled de-inked fibre 
and 50% TCF (totally chlorine free) pulp, and is sourced from sustainable forests. This paper has 
been awarded the Nordic Swan environmental label for low emissions during production. Carillion plc
Birch Street 
Wolverhampton WV1 4HY 
United Kingdom
Registered number: 3782379
T +44 (0)1902 422431
F +44 (0)1902 316165
www.carillionplc.com