fc1
Making Business
Doing business…
Running a ports business is not just
about ships, it’s about service. And 
it’s not just about handling cargo, it’s
about adding value.”
Dave Atkin, Head of Operations, Port of Grimsby & Immingham
“
Annual Report & Accounts 2002
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Ships’ dues: normally these charges 
are based on vessel tonnage and are 
paid by the ship owner. Dues can also 
be combined with other charges. We have a
statutory right to charge ships’ dues to vessels
berthing at our ports.
Goods’ dues: also known as wharfage 
or cargo dues, these are charges based
on cargo tonnage for goods passing
over our quays. We have a right to levy a charge
for all cargo passing over our quays and through
our facilities. They can be charged separately or
as part of an all-inclusive rate.
Handling services: when independent
stevedores work at our ports, they pay 
us licence fees, rent and charges for 
hiring plant and equipment. When we provide
stevedoring services ourselves, our customers
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Snapshots of our business
Stable growth 2
Small but profitable projects 4
Customer solutions and teamwork 6
Progress/strategy
Top line results 8
Chairman’s statement 10
Group Chief Executive’s review 12
Operating highlights 15
Ports & transport – UK 16
ABP’ s operational management 18
Corporate social responsibility 20
Board of directors 22
Operating and financial review 24
Financial statements
Group profit and loss account 30
Balance sheets 31
Group cash flow statement 32
Reconciliation of net cash flow to movement in net borrowings 32
Statement of group total recognised gains and losses 33
Note of group historical cost profits and losses 33
Reconciliation of movements in equity shareholders’ funds 33
Notes to the financial statements 34
Governance
Statement of directors’ responsibilities 61
Directors’ report 62
Corporate governance 64
Remuneration report 66
Independent auditors’ report 70
Other
Shareholder analysis 71
Five-year summary 72
Notice of meeting 74
Company information 76
Financial highlights IBC
Making it happen, 24 hours a
day at 21ports, is the basics.
The real challenge is creating
opportunities for growth.” 
Dave Atkin, Head of Operations, Port of Grimsby & Immingham A A
…everywher e we look
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pay us directly. Our charges cover labour,
equipment supply and value-added services such
as bagging, blending, de-vanning, warehousing
and re-delivery.
Terminal operations: income earned from
terminals we run on behalf of our customers.
Under medium- to long-term arrangements,
we provide packaged solutions that include handling
services, storage and terminal maintenance.
Storage/warehousing: charges for storing
cargo passing through our ports. Based 
on tonne per day or area used, they can
be part of an all-inclusive rate or levied separately.
Rentals/estate management: income
earned from charges for the use of land on
our port estate. The agreements can
be in the form of leases or tenancy arrangements
and can include the provision of utility services.
Pilotage: statutory Pilotage Authority
charges for guiding a vessel through the
estuary or harbour area. The charge, 
including boarding and landing fees, is normally
based on vessel size/draught and pilot boarding/
landing points.
Conservancy: statutory charges for 
the maintenance of safe and navigable
waterways. They cover Vessel Traffic 
Services, navigation markers and the maintenance
of channels through dredging. The amount is
based on vessel size and distance travelled within
our areas of statutory responsibility.
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8 2 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Stability, measured 
by the bottom line
Our business is stable. We’re backed by a 
quality asset base and there’s steady demand for
our facilities and services. At the same time, we’re
growing our turnover by winning new customers
for our core ports business and by expanding the
range of our services. Our warehousing, distribution,
transportation and value-added businesses are all
on course for growth. 3
Queen Mary’s new palace 
at Southampton
The world’s largest cruise liner deserves port facilities
in keeping with her status. At the Queen Elizabeth II
Terminal, we’ve embarked on a re-building programme
to double the number of check-in desks, extend the
baggage hall and significantly increase passenger
capacity. As part of a new five-year agreement with
Cunard Line to welcome Queen Mary 2 when she
comes into service in 2004, we’re also giving the
passenger lounges a comprehensive makeover. 4 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Converting ideas into
profitable growth
AMPORTS UK’s vehicle centre at Southampton 
is the base for a small, but profitable, operation.
Among other activities, it carries out pre-delivery
inspection of vehicles. During 2002, we authorised
investment in 31 projects, each costing under £2
million, across the group. Individually, each project
was small, yet together they accounted for around
a third of our total capital expenditure. We’ve learnt
that small initiatives can lead to sizeable profits. 5
We even make money 
from broken glass
Green, brown or clear, we don’t care. Midland
Glass Processing’s new plant at Southampton is
set to recycle 24,000 tonnes of glass during its
first year. The glass will be shipped to Ayr, Jarrow
and Londonderry, where it will be made into new
bottles. This project, part-funded by an £800,000
government grant towards the construction cost,
will take almost 2,000 heavy goods vehicle
movements off the roads on an annual basis. 6 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Seizing opportunities from
seized goods
Smuggling has long been a popular coastal
activity and Excise fraud is now a growing problem.
Following a competitive EC tendering process,
ABP Connect, our value-added services division,
has won a six-year contract with HM Customs 
& Excise and is now working closely with them 
in the provision of ‘specialised storage solutions’ 
for seized goods. Where? We can’t say–it’s an 
official secret! 7
We can safely rely on teamwork
Working at our ports often requires strenuous
physical effort. Equally, working out logistical
solutions requires strenuous mental effort. We
respect both contributions. Regardless of job title
(or work-wear), our people pull together to get 
the job done. Our culture is focused on efficiency,
effective team-working and, above all, safety. Associated British Ports Holdings PLC Annual Report & Accounts 2002
In early 2000, we said we would…
• Obtain new business which meets new
investment disciplines and focuses on the UK
ports business
• Develop a new deep-sea container terminal –
Dibden Terminal – at the Port of Southampton
• Develop value-added services associated 
with the ports business
• Sell £200.0m of non-core property and land
• Review other non-core assets within the group
• Repurchase own shares
Developments 2001-2002
Acquisition
Investment in new business
Disposal
Ford and Volvo vehicle-
processing contracts,
Baltimore, Maryland
(Feb) – £1.4m
Cardiff Distribution
Terminal (Apr) – £2.5m
ABP Connect launched (Apr)
Rotterdam Terminal, Hull
(May) – £14.3m
West Dock, Goole
(May) – £0.9m
Kintyre Terminal, Hydro
Agri, Ayr (Jun) – £1.0m
East Pier Terminal, Troon
(Jul) – £5.0m
Cold store, ABP Connect,
Hull (Jul) – £2.0m
Fixed-base operation,
Burlington, Vermont
(Jul) – £2.6m 
Mitsubishi vehicle-
processing contract at
Baltimore, Maryland, and
Brunswick, Georgia
(Sep) – £0.2m
Volkswagen vehicle-
processing contract,
Brunswick, Georgia
(Oct) – £0.2m
Garston Agribulk Store,
Hydro Agri, Garston
(Oct) – £0.4m
St. David’s Agribulk
Terminal, Hydro Agri,
Swansea (Oct) – £1.8m
Public inquiry into Dibden
Terminal application begins
(Nov)
Timeline
Appointments 2001-2002
Main board
Executive
Subsidiary boards
2001
Tim Bowdler joins the
ABPH board as a non-
executive director (Jan)
Ross Sayers joins the 
ABPH board as a non-
executive director (Oct)
Paul Allen appointed Managing
Director, ABP Connect, and
joins the ABP board (Apr)
8 9
2002 – top line results
Timber storage facility, Hull
(Jan) – £0.6m
Honda car terminal,
Southampton (Jan) – £0.6m
Carrick Terminal, IAWS,
Ayr (Feb) – £1.0m
ABP Dowds Terminal,
Newport (Mar) – £0.8m
Cold store extension, 
ABP Connect, Cardiff
(Mar) – £2.5m
Hyundai vehicle-
processing facility,
Baltimore, Maryland
(Apr) – £3.1m
Mobile harbour crane,
Hydro Agri, Immingham
(Apr) – £1.5m
Purchase of operating
assets, Hams Hall, ABP
Connect (Apr) – £0.3m
Southampton International
Vehicle Terminal,
Southampton (Apr) – £4.0m
Warehousing facilities, HM
Customs & Excise, ABP
Connect (Jul) – £1.2m
Surfacing works, Humber
International Terminal,
Immingham (Jul) – £0.6m
Rail siding, Humber
International Terminal,
Immingham (Aug) – £5.6m
Additional vehicle storage
facilities, Volkswagen
Group, Grimsby
(Dec) – £0.6m
Glass recycling & export
facility, Southampton
(Dec) – £0.8m
Completed sale of
AMPORTS USA’s Aviation
division (Dec) – £32.0m
Public inquiry into Dibden
Terminal application ends
(Dec)
Bulk-handling terminal,
Southampton (Feb) – £1.5m
Extension of timber
terminal, Hull (Mar) – £0.6m
Construction of forest
products terminal,
Immingham (Mar) – £1.0m
Refurbishment of
Mayflower Cruise Terminal,
Southampton (Apr) – £6.5m
Agribulk facility, IAWS,
Immingham (Apr) – £1.1m
Storage & distribution
warehouse, Ayr (Apr) – £1.0m
Queen Elizabeth II T erminal,
Southampton (Apr) – £2.0m
Expansion of storage and
distribution facilities, Goole
(May) – £0.7m
Terminal for Saint-Gobain
Building Distribution,
Newport (Jun) – £4.6m
New cruise terminal,
Southampton (Jul) – £1.5m
Marina development,
Lowestoft (Sep) – £1.0m
Redevelopment of port
facilities, Teignmouth
(Mar 2004) – £4.0m
2002 2003
Nick Palmer and 
Phillip Williams join the
ABP board (Jan)
Ian Schofield joins the
ABP board (Feb)
Ross Sayers appointed
non-executive Chairman
of the ABPH board (Apr)
Stephen Walsh appointed
General Counsel of ABP
Stuart Chambers joins 
the ABPH board as a non-
executive director (Oct)
Progress to date…
• Over 50 new long-term contracts won during
2000, 2001 and 2002 – some of which are set
out below
• Planning application for Dibden Terminal
submitted in October 2000 and public inquiry
completed in December 2002. Government
decision expected either in late 2003 or 2004
• ABP Connect, formed to develop value-added
services, increased its turnover by 32 per cent
in 2002
• £169.0m of non-core property and land sold
by the end of 2002
• Red Funnel Group sold for £71.0m in 2000
and AMPORTS USA’s Aviation division sold for
£32.0m in 2002
• Share repurchase programmes totalling
£220.0m completed in 2001
(Apr)
Group turnover
#
£401.9m +7%
Group turnover
#
00 £342.7m
01 £375.8m
02 £401.9m
Underlying operating profit
#
*
– ports and transport operations
£142.9m +4%
Underlying operating profit
#
*
– ports and transport operations
00 £128.6m
01 £137.6m
02 £142.9m
Total underlying operating profit
#
*
£172.2m +3%
Total underlying operating profit
#
*
00 £161.1m
01 £167.1m
02 £172.2m
Underlying profit before tax* 
£138.1m +6%
# Continuing operations
*
Before goodwill amortisation and exceptional items
Underlying profit before tax*
00 £124.3m
01 £130.4m
02 £138.1m 10 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Chairman’s statement
Underlying earnings
per share*
#
30.4p +8%
Dividend per share 
14.75p +7%
*
Before goodwill amortisation and
exceptional items
# Restated for the effects of FRS19 –
Deferred Tax
Underlying earnings per share*
#
00 26.3p
01 28.1p
02 30.4p
In my first statement as Chairman, I am
pleased to report another strong performance
by the group during 2002. Against a
challenging economic background our core
UK ports business has once again performed
satisfactorily, producing 3 per cent growth in
underlying operating profit from continuing
operations. This performance is reflected in our
financial results, with underlying pre-tax profit up 
6 per cent to £138.1 million (2001: £130.4 million).
Underlying earnings per share increased by 8 per
cent to 30.4 pence per share (2001: 28.1 pence
per share), benefiting from both the strong
operating results and a reduction in the weighted
average number of shares following the previous
year’s share repurchase programme.
Results
The group’s ports and transport business
continued to grow in 2002, contributing £142.9
million to operating profit from continuing
operations, an increase of 4 per cent on 2001
(£137.6 million). As anticipated, as a result of the
programme of non-core property sales, lower
rental income reduced the profit from property
investment to £6.8 million (2001: £8.0 million).
There was also a reduction in profit from property
development, which contributed £12.0 million
(2001: £13.0 million). The contribution from the
group’s associated companies, however, showed
an increase to £10.5 million (2001: £8.5 million),
reflecting strong performances from our interests
in two container-handling businesses,
Southampton Container Terminals and Tilbury
Container Services. The disposal of non-core
investment properties provided an additional profit
of £0.7 million (2001: £0.6 million) and goodwill
amortisation at £1.6 million was similar to the
previous year’s charge (2001: £1.5 million). In
addition, the group realised an exceptional profit
of £7.4 million, following the sale of AMPORTS
USA’s Aviation division. This was offset, to a large
extent, by a £5.5 million restructuring charge
resulting from a review of the group’s cost base.
We estimate that this review will save the group 
at least £3.0 million per year once the programme
of cost savings is fully implemented. Comparative
figures for 2001 have been restated for the effects
of Financial Reporting Standard 19 – Deferred
Tax, which the group adopted during the year.
Business highlights
The core ports and transport business
continued to benefit from our strategy of growing
the business with existing and new customers.
Our rigorously-targeted capital investment
programme continued to generate further growth-
producing projects. Highlights for the year
included a new £5.6 million rail siding for Humber
International Terminal at Immingham, the new
£4.0 million Southampton International Vehicle
Terminal and a new £3.1 million Hyundai vehicle-
processing facility at Baltimore in Maryland, USA.
We are investing £8.5 million in passenger-
terminal improvements at Southampton and
developing a £1.5 million third cruise terminal
there. We also reached agreement in principle for
a new £4.6 million timber terminal for Saint-
Gobain Building Distribution at Newport and the
Port of Teignmouth will benefit from a £4.0 million
redevelopment.
The public inquiry into our application to
develop a new six-berth container port at Dibden,
opposite the Port of Southampton, concluded in
Dividend per share
00 12.75p
01 13.75p
02 14.75p 11 11
December 2002. We are convinced of the need
for additional deep-sea container capacity in the
UK and remain committed to developing this
facility. The government’s decision is now expected
either in late 2003 or 2004.
Our strategy of disposing of non-core assets
continues. As well as the US$50.0 million sale of
the Aviation division of our US operations, we sold
a further £31.0 million of property and land during
the year. Sales of non-core assets since 1 January
2000 total £272.0 million.
Dividend
The directors are recommending a final dividend
of 8.25 pence per share (2001: 7.75 pence per
share), which makes a total of 14.75 pence per
share for 2002 (2001: 13.75 pence per share). If
approved by shareholders, the final dividend will
be paid on 1 May 2003 to shareholders who are
on the register at 4 April 2003.
Board of directors
Sir Keith Stuart retired from the board on 
16 April 2002, having been Chairman since 1982
and Managing Director of the British Transport
Docks Board, Associated British Ports’
predecessor, from 1976. Sir Keith made a very
significant contribution to the group over many
years. He led the company’s successful
privatisation – one of the most successful in the
UK – in 1983 and played a major role in the reform
of industrial relations at the ports. The board and 
I wish him well.
George Duncan, non-executive Deputy
Chairman, will retire from the board at the Annual
General Meeting on 15 April 2003. He has served
the company as a non-executive director for 17
years, during which time the group has benefited
greatly from his considerable boardroom
experience. 
Stuart Chambers, group chief executive of
Pilkington plc, one of the world’s leading glass
manufacturers, became a non-executive director
on 15 October 2002. I am confident that Stuart’s
wealth of industrial experience will enable him to
make an excellent contribution to the board.
I would like to take this opportunity to thank
everyone across the group for their continuing
efforts. Our strong results would not have been
possible without their hard work.
Prospects
While the general economic climate remains
uncertain, group performance so far in 2003 has
been satisfactory. The group’s UK ports business
has the advantage of many long-term contracts
with quality customers. These agreements, together
with the group’ s strong cash flow and diverse spread
of geographical and cargo risk, lead us to remain
confident of making further progress in 2003.
Ross Sayers
Chairman
19 February 2003
“In my first statement as Chairman, I am pleased to report
another strong performance by the group.” 12 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Group Chief Executive’s review
01
“Developments
announced during
2002 are consistent
with the group’s
strategy.”  13
Ports & transport – UK
Developments announced during 2002 are
consistent with the group’s strategy of growing
existing business and developing new business
through rigorously-targeted investment.
The group continues to focus on its core ports
and transport activities. The group’s main business
of operating its UK ports grew by 3 per cent in
2002, maintaining the positive momentum generated
over the previous two years.
The group intends to continue to concentrate
its capital investment programme on commercially-
attractive projects generating internal rates of
return of at least 15 per cent, supported by long-
term contracts with quality customers. This strategy
has ensured that over 50 per cent of the UK ports’
business over the next year is underpinned by
customer contracts. This stable revenue profile has
helped the group withstand the effects of the current
economic slowdown on trade volumes. Non-
revenue-earning or maintenance capital expenditure
continues to be monitored closely and contained
below the group’s annual rate of depreciation.
The locations of the group’ s UK ports constitute
a good geographical spread of risk. In addition,
no single type of cargo accounts for more than 10
per cent of the group’s UK ports turnover. 
This carefully-focused strategy has delivered
strong growth in underlying earnings per share
and an increase in the group’s return on capital
employed over the last three years.
Dibden Terminal, the group’s proposed deep-
sea container port development at Southampton,
supported by the substantial growth projected in
deep-sea container traffic, offers further
opportunities for growth. Container volumes through
the Southampton container terminal grew by 10
per cent in 2002. The public inquiry into the group’ s
application to develop Dibden T erminal commenced
in November 2001 and was completed on schedule
in December 2002. The government’s decision is
now expected either late this year or next year.
To accommodate increasing volumes of roll-
on/roll-off traffic, imports of coal and shortsea
container traffic, the group is looking to construct
further riverside terminals on the Humber Estuary,
where ABP owns and operates four ports – Grimsby ,
Immingham, Hull and Goole. These planned
facilities will remove the need for vessels to lock in
and out of ports, enabling quicker turnaround and
the accommodation of larger ships.
The major growth projects at Dibden Terminal 
and on the Humber will only be developed once
the group has secured customer contracts that
meet its investment criteria.
ABP Connect, which focuses on developing 
the value-added services that the group can offer
customers, has now been operating for
approximately 18 months. This division is an
extension of the ports and transport-related activities
in which the group already has considerable
expertise. ABP Connect has firmly established
itself in the market by operating and managing
Hams Hall Railfreight Terminal, Birmingham, and
by securing a major contract with HM Customs &
Excise for the storage of seized goods. The
group’s strategy is to consolidate the value-added
services that are provided in order to give them
greater focus and to realise their full potential.
ABP Connect has performed well, in line with
expectations.
The group continues to take a cautious view in
respect of strategic acquisitions. Activities closely
aligned with the group’s core business will be
considered, provided they meet the prescribed 
hurdle rate of return of 15 per cent for new capital
investment.
ABP is continuing to work with the UK
government with regard to anti-terrorism measures
in the wake of 11 September 2001. For security
legislation to be successful in the ports industry, 
it needs to be well focused on the immediate ship
and port interface and pay particular attention to
cargoes and facilities of strategic importance to
national security.
As part of the group’s ongoing programme of
managing its cost base, a further cost review was
undertaken towards the end of the year with the
intention of reducing future operating expenditure.
This resulted in a pre-tax exceptional restructuring
charge to the profit and loss account of £5.5 million
in 2002. It is estimated that the review will realise
savings of at least £3.0 million per year once the
programme of cost savings is fully implemented.
Ports & transport – USA
In September 2001, the group announced the
result of a review which it undertook in order to
determine whether the group’ s USA operations were
in line with its core business objectives. 
As a result of this review, the group decided
to retain AMPORTS USA’s Seaport division, which
is more closely aligned with the group’s UK port
operations, and to sell AMPORTS USA’s Aviation
division, subject to receipt of a satisfactory offer.
Following the terrorist attacks in the USA on
11 September 2001, the group deferred this
process until 2002. In July 2002, the group
announced that it had reached agreement for the
sale of this operation to subsidiaries of Macquarie
Global Infrastructure Funds for a cash
consideration of US$50.0 million. AMPORTS
USA’s Aviation division comprised 11 airport
operations and the sale of each was conditional
upon obtaining consents from the relevant airport
and regulatory authorities. The sale was fully
completed in December 2002. 
Developing AMPORTS USA’s Seaport division 
is part of the group’s growth strategy. New vehicle
-processing accounts won in 2002, combined with
new accounts won in the previous year, contributed
to vehicle-volume growth of 48 per cent year-on-year .
Disposal of non-core assets
The group will continue to sell non-operational
property and exploit the potential of its property
portfolio. However, those assets essential to
support the growth strategy in the main ports and
transport business will be retained.
As a result of property sales both income and
profit from investment property rentals fell.
However, the growth generated by the strategic
reinvestment of proceeds from non-core property
and land sales into the core ports and transport
business should compensate for this.
During 2002, the group sold a further £31.0
million of non-core property and land assets. This
brings the total amount of non-core property and 
land sold since 1 January 2000 to £169.0 million. 
The group remains on track to achieve its target
of £200.0 million for total non-core property and
land sales set at the beginning of 2000. The
group also received £71.0 million from the sale of
Red Funnel Group in 2000. Together with the
£32.0 million from the sale of AMPORTS USA’s
Aviation division, this brings the total amount of
non-core asset sales since 1 January 2000 to
£272.0 million.
02 03
01 The group’s main business – its UK ports
and transport operations – grew by 3 per cent
in 2002.
02 Investment at the Port of Grimsby included
the provision of additional car-storage facilities
for the Volkswagen Group.
03 The group is looking to develop further
riverside terminals on the Humber. 14 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Group Chief Executive’s review continued
Operational management
In April 2002, ABP’s operational-management
team was strengthened by the appointment of
Stephen Walsh as General Counsel. Stephen
was formerly Legal Director of British Airways plc.
Following the sale of the Aviation division,
Doug Tipton, Chief Executive Officer of
AMPORTS USA, agreed to step down from 
his post having spent three successful years
improving the performance of the group’s US
operations. He was succeeded at the beginning
of 2003 by Jim Davis, who has been at
AMPORTS for three years in senior sales 
and marketing and operating roles. Jim has
considerable experience in transport-related
businesses through his previous work for
Sealand, Mitsui OSK American Inc. and
Contship.
Mike Fell, OBE, ABP’s Port Director for 
Hull & Goole, will be retiring at the end of March
2003 after 32 years’ service in a distinguished
career that has seen the fortunes of the Port 
of Hull improve to become one of the UK’s
major ports. Douglas Morrison, currently Hull 
& Goole’s Deputy Port Manager, will succeed
Mike Fell, effective 1 April 2003.
Employees
The interests of the group’s employees
continue to be aligned to those of the group
through opportunities to acquire company
shares by way of share schemes and through
the payment of bonuses. In some areas,
notably those where individual performance 
can affect the group’s results significantly,
performance-linked bonus incentives are used
to reward achievement of specified targets. 
The group’s success is clearly dependent 
upon the continuing effort and ingenuity of 
our staff, who work hard to achieve the 
group’s aims.
The health and safety at work of the 
group’s employees and others affected by 
its activities is of paramount importance to 
the group. The group’s corporate policy on
health and safety is backed by strong
commitment from the board of directors and 
is based on the firmly-held view that injuries 
and cases of ill health, suffered at work, 
are preventable.
Corporate social responsibility
The group takes its corporate social
responsibility (CSR) seriously. We intend to
publish, for the first time, a separate CSR 
report later this year.
Future growth
Three major strengths of the group’s UK
ports business support its growth strategy. 
First, the geographic spread of its 21 ports
throughout the UK reduces the business’s
reliance on any one trade route. Second, 
as the group’s UK ports business handles a 
wide variety of trades, it is not dependent upon
any one type of cargo. Third, over 50 per cent
of the group’s UK ports business for the next 12
months is already under contract. These factors
lead to the belief that the group is well placed 
to make further progress during the course of
this year.
In the medium term, the opportunities to
invest in additional riverside terminals on the
Humber and at Dibden Terminal – the proposed
deep-sea container port development at
Southampton – together with regular expansion
at the UK ports, will provide a solid platform 
for future growth.
Bo Lerenius
Group Chief Executive
19 February 2003 15
Operating highlights
02 01
01 The Port of Southampton’s multi-user bulk-
handling terminal has benefited from a £1.5
million upgrade of facilities.
02 The group’s South Wales Ports achieved
growth in steel volumes in 2002.
Ports & 
transport – UK £m %
325.7
+21.5 +7.1
141.4
+4.2 +3.1
Ships’ dues and wharfage, dredging, supply
of electricity, water, etc.
Stevedoring (cargo handling), use of facilities
such as cranes to load and unload cargoes,
storage of cargo
Port-related property income from tenants on
port estates, using port facilities
Pilotage and conservancy where ABP has
statutory responsibility
Value-added services including ambient 
and cold storage, blending, bagging and
transportation, haulage and warehousing
Ports & 
transport – USA £m %
36.1
+6.2 +20.7
1.5
+1.1 +275.0
Dockage and wharfage
Unloading and loading cars
Car processing, including receiving
and inspection
Vehicle-remediation works 
Storage
Property investment
& property development £m %
40.1
-1.6 -3.8
18.8
-2.2 -10.5
Property investment – property
income from tenants on port
estates, not using port facilities
Property development – income
from sales of land and property no
longer required for port operational
purposes
Associates
£m %
44.1
+3.9 +9.7
10.5
+2.0 +23.5
Southampton Container T erminals
(49% owned)
Tilbury Container Services 
(33% owned)
Container handling, storage
(including temperature-controlled
cargoes), ship-planning services,
cargo inspection and consolidation
The Cardiff Bay Partnership 
(45% owned)
Property rental income from a
portfolio of properties on Cardiff Bay
estate
Ports & 
transport – UK £m %
Turnover*
Growth
Underlying operating profit*
Growth
Revenues earned from:
*Continuing operations 16 Associated British Ports Holdings PLC Annual Report & Accounts 2002
1
2
9
10,22
11
4
3
5
6
12 13
1415,22
16,22
7
18, 22
17, 22
19,22
20
8
21,22
Ports & transport – UK
Hull & Goole – turnover up 3% 
Strong growth in forest products
Growth in roll-on/roll-off traffic
Reduction in container traffic at Goole
Grimsby & Immingham – turnover up 6% 
UK’s number-one port for coal imports
Strong growth in vehicle imports and forest
products
Growth in roll-on/roll-off traffic
Southampton – turnover up 3% 
Strong growth in vehicle imports and exports
Growth in container traffic and the UK’s number-
one cruise port
Loss of banana trade
South Wales Ports – turnover in line
Growth in forest products, steel and agribulks
Reduction in iron ore and coal imports due to
Corus’s restructuring
Shortsea Ports – turnover up 10% 
Strong growth in roll-on/roll-off and agribulk traffic
Increased ferry passenger traffic
ABP Connect – turnover up 32%
New business at Hams Hall Railfreight Terminal 
and HM Customs & Excise
ABP’s ports handle more than 120 million tonnes 
of cargo every year. The ports range in size from
Grimsby & Immingham, the UK’s largest port
complex based on tonnage handled, to smaller-
sized specialist ports, such as Teignmouth. 
ABP is committed to supplying a fast, efficient,
cost-effective and reliable service for customers,
providing a comprehensive range of high-quality
facilities capable of handling virtually any cargo.
Good locations, modern facilities, excellent road and
rail links and substantial capital investment mean
ABP’s ports can meet the needs of customers
operating in an increasingly competitive market place.
Shortsea Ports
1 Troon
2 Ayr
3 Silloth
4 Barrow
5 Fleetwood
6 Garston
7 Plymouth
8 T eignmouth
9 King’ s Lynn
10 Lowestoft
11 Ipswich
South Wales
Ports
12 Swansea
13 Port T albot
14 Barry
15 Cardiff
16 Newport
Hull & Goole
17 Hull
18 Goole
Grimsby & 
Immingham
19 Immingham
20 Grimsby
Southampton
21 Southampton
ABP Connect
22 National
coverage
Turnover* up 7%
*Continuing operations 17
Ports & transport – UK
Cargoes handled in 2002
Port Liquid Coal/coke Iron ore Agribulks Other dry Forest Fresh Other break Containers Roll-on/ Vehicles Passengers
bulks bulks products produce & bulk & roll-off & cruises
perishables general cargo
Hull & Goole
Hull
Goole
Grimsby & Immingham
Grimsby
Immingham
Southampton
South Wales Ports
Barry
Cardiff
Newport
Port Talbot
Swansea
Shortsea Ports
Ayr
Barrow
Fleetwood
Garston
Ipswich
King’s Lynn
Lowestoft
Plymouth
Silloth
Teignmouth
Troon
Underlying operating profit* up 3%
*Continuing operations 18 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Paul Allen, 46
Managing Director, ABP Connect
Andrew Kent, 55
Port Director, Port of Southampton 
Stephen Walsh, 38
General Counsel
1
2
3
The depth of experience within ABP’s operational
management team is quite remarkable. That said,
innovation and sharing knowledge are also key to
our success.” 
Nick Palmer , Port Director , Shortsea Ports
“
4 5
1
2
7 3
9
ABP’s operational
management 19
Budha Majumdar, 56
Port Director, South Wales Ports
Ian Schofield, 41
Engineering Director
Nick Palmer, 43 
Port Director, Shortsea Ports 
Bo Lerenius, 56
Group Chief Executive
Mike Fell, 59 
Port Director, Hull & Goole 
John Copping, 55
Port Director, Grimsby & Immingham
4
5
7 10
11
12
8
9
Hywel Rees, 44 
Company Secretary & 
Head of Group Personnel 
13
10
9
11
12
Richard Adam, 45
Group Finance Director
David Twidle, 54
Assistant to Group Chief Executive
Phillip Williams, 45
Group Property Director 
8
13
6
6 Corporate social responsibility
A copy of our CSR report, to be published later this year, can
be obtained using the form of proxy enclosed with this annual
report. The report will also be available on our website at
www.abports.co.uk
20 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Introduction
The group values all of its stakeholders.
Recognising that they are the foundation of the
business and key to its success, it works closely
with them to develop effective and lasting
relationships.
During the year , the group established a corporate
social responsibility (CSR) management committee
chaired by the Group Finance Director . The CSR
committee is responsible for reviewing and co-
ordinating the group’ s strategy and policies on a wide
range of areas including the environment, health
and safety , employment, communities and corporate
ethics. The committee is also responsible for engaging
with and reporting to the group’ s CSR stakeholders.
Further details on the group’ s corporate social
responsibilities will be provided in its first CSR report,
which will be published during 2003. Copies of this
report can be ordered by ticking the appropriate
box on the form of proxy enclosed with this annual
report.
The risk-management framework and processes
described in the corporate governance statement
on page 65 are designed to identify all of the CSR-
related risks that the group faces. The CSR committee
works closely with the risk management working
group to ensure that existing and emerging risks 
are managed appropriately .
Employment
The group recognises that its employees are key to
the achievement of its business objectives and the
enhancement of shareholder value. Employment
policies are designed to ensure that the group attracts,
retains and develops employees on the basis of
ability and qualifications without discrimination or
prejudice under any circumstances. This includes
race, colour , nationality , ethnic origin, gender , sexual
orientation, marital or parental status, age, disability ,
social or economic class, trade union membership
or non-membership and religious or political beliefs. 
In line with its business requirements, it is the group’ s
policy to promote from within the organisation
wherever practicable. The group believes that this is
important for its ongoing success. Internal promotion
not only provides a visible, merit-based path of career
development – a key factor in motivating and retaining
employees – it also supports the transfer of
knowledge and expertise throughout the business.
To facilitate this, the group encourages regular
feedback and goal-setting, both of which are
recognised as critical to personal development and
job satisfaction. Annual Personal Development
Reviews provide the formal framework for this.
Personal development is further encouraged by a
mentoring scheme which is open to all UK employees.
The group is committed to ensuring that all employees
are fully aware of their roles and responsibilities and
the current activities and progress of the group.
Every employee is provided with a copy of a handbook,
which gives details of terms and conditions of
employment and information on group policies and
procedures. A quarterly staff magazine, ‘Ports’,
provides employees with news, features and comment
from across the group. Additionally , a corporate
intranet has been introduced to facilitate the flow of
information throughout the business. 
The group’ s remuneration policies are designed to
ensure that the interests of its employees are aligned
with those of its other stakeholders. In addition to
competitive salaries, an element of the overall
package is linked to the group’ s performance and
all employees are invited to join the group’ s share
schemes.
Additional benefits provided by the group include
private medical insurance for employees and their
families, competitive pension benefit schemes and
an employee assistance programme provided
through a leading UK organisation. 
Environment
All of the group’ s ports are located in or near
environmentally-sensitive areas. The group’ s
environmental policy – to manage its existing
obligations to the environment in a responsible
manner and to develop its ports and transport
business to meet the needs of the country’ s trade
in a manner which encompasses sustainable
development both for its business and the
environment – seeks to establish a balance
between the need to act commercially and the
group’ s commitment to protecting the
environment. The group’ s key environmental
objectives include the following:
•T o manage operations so as to be sustainable
economically and environmentally
•T o continue to identify , understand and prioritise
all of the environmental risks inherent in the
business, allocating the necessary resources to
ensure that these risks are managed effectively
and economically
•T o continue to operate its ports to meet the
growing demand for certain trades while
minimising any adverse environmental effects
•T o ensure that the group maintains the harbours
that are under its control to support safe
navigation
•T o continue its work with environmental non-
governmental organisations in partnership
towards shared objectives which benefit the
environment.
The Group Chief Executive is the member of the
board responsible for the development and
implementation of the group’ s environmental
policies. Senior operational managers are
responsible for the management of environmental
issues relating to the operations under their
management. During the past year, the group has
reviewed its environmental policy and objectives,
01 03 04
02 21
developed a new environmental-management
framework, updated its environmental-impacts
register and established data and targets for a
number of its environmental impacts. The group is
sensitive to how its operations affect the following
areas, in particular:
• Air quality 
• Biodiversity
•Climate change and resource management
• Estate management
• Integrated coastal-zone management
• Marine matters within its areas of responsibility
• Sustainable port development and sustainable
transport networks
•Water-quality management 
•Waste management.
Further information on these impacts and the
group’ s management of them will be provided in 
the forthcoming CSR report.
Communities
By providing livelihood and prosperity through direct
and indirect employment opportunities, many of the
group’ s ports are the economic mainstay of their
local and regional communities. In turn, the group
relies on the health, stability and prosperity of these
communities to provide its employees with a suitable
environment and to provide it with an appropriate
skills base for the group’ s future recruitment.
The group is always looking for ways in which it can
bring about further opportunities for the economic
and social development of its communities. T o
make this happen, the group is forging partnerships
with local authorities, schools, trade and business
organisations and maritime and medical charities.
Health and safety
The health and safety at work of the group’ s
employees and others affected by its activities is of
paramount importance to the group. The group’ s
corporate policies on health and safety are backed
by a strong commitment from the board and are
based on the firmly-held view that injuries and
cases of ill health, suffered at work, are preventable.
These policies are communicated to all employees
and contractors.
The group’ s comprehensive health and safety
training policy is designed to ensure that employees
receive an appropriate level of training, in accordance
with their job. The group has also established
procedures for assessing, evaluating, monitoring
and supervising contractors operating on its
premises.
T rained and competent risk assessors carry out risk
assessments of all the group’ s activities and
workplaces to ensure that its operations are conducted
with appropriate regard to health and safety . The
robustness of the group’ s health and safety standards
is verified at several levels. In addition to reviews by
the Group Safety Manager and local managers and
supervisors, its policies and procedures are reviewed
by the group’ s internal audit department. Accident
and incident data are also analysed for trends and
patterns to assess performance and to target specific
areas for action.
Customers
Capital investment in the group’ s existing operations
and new developments, supported by long-term
contracts with both existing and new customers,
is the most important feature of its current growth
strategy. The group believes that providing
sustainable solutions for the strategic needs of its
customers helps to align its interests with those of
its customers and reduces operational risk for
both parties.
The group is committed to developing long-term
relationships with its customers and to ensuring
that the standard of its services is consistently high
throughout the length of any contract.
The group continues to broaden the range of services
offered by its ports and by ABP Connect, its value-
added services division, with the aim of helping its
customers to simplify their supply chains and reduce
their costs.
Group and operational senior management maintain
a regular dialogue with the group’ s customers to
ensure that any service delivery-related issues are
resolved promptly and that its customers are aware
of any relevant developments within its businesses.
All of the group’ s businesses are required to comply
in full with all relevant competition legislation.
Suppliers and sub-contractors
The group is committed to ensuring that its dealings
with suppliers and sub-contractors are conducted
so as to ensure the following:
• The advance agreement of a set of reasonable
terms of trade
• The establishment of a fair and transparent
relationship based on mutual trust
• The settlement of amounts due under agreement
on or before the due date
• The selection of the most efficient solution for the
business, taking into account quality , whole-of-
life cost and safety and environmental aspects,
among other considerations
• Respect for the sensitive nature of commercial
agreements between the group and its suppliers
and sub-contractors
• The application of a zero-tolerance approach to
any corruption or bribery in its commercial
negotiations with suppliers or customers.
Shareholders and suppliers of finance
Details of relationships with shareholders are set out
in the group’ s statement on corporate governance
on pages 64 and 65.
03 In December 2002, the group was honoured
to receive the ProShare award for ‘Best New
Plan’ in recognition of the successful launch of
our new share incentive plan to UK employees.  
04 Initiatives – such as this art competition
sponsored by ABP – help raise awareness of
the ports’ role in their communities among local
schoolchildren.
01 The Port of Grimsby & Immingham’s
consistently high standards of health and safety
at work were recognised for the third time by
the Royal Society for the Prevention of
Accidents.
02 A former pilot cutter in service at the Port of
Swansea was donated to Cardiff Sea Cadet
Corps for use as a training vessel. Associated British Ports Holdings PLC Annual Report & Accounts 2002
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Associated British Ports Holdings PLC Annual Report & Accounts 2002
Board of directors
01 Richard Adam
Group Finance Director, 45
Having qualified as a chartered accountant with
KPMG in 1982, Richard gained a broad range of
experience in a variety of senior financial posts –
predominantly within the media sector – before
joining the group in 1999. At the age of 30, he was
group finance director of TVS Entertainment plc,
which held the ITV franchise for the south and
south-east of England. During his time with the
company, he raised some £300 million of funds
for the acquisition of new businesses. In 1993, as
chief financial officer of International Family
Entertainment UK, Richard played a key role in
planning and launching the new ‘Family Channel’
on satellite television. Between 1996 and 1999,
Richard was group finance director of Hodder
Headline plc, the book-publishing business
owned by WH Smith Group. He is credited with
building up Hodder Headline’ s financial controls
during a period in which pre-tax profits grew by
64 per cent. Since joining Associated British Ports
Holdings PLC (ABPH), Richard has developed its
communications with investors and stakeholders
significantly and overseen the group’ s disposal of
non-core assets. He is also chairman of both the
group’ s risk management working group and
main defined benefit pension scheme.
02 Aubrey Adams
Non-executive, 53
Aubrey joined the board in 1996. He is a member
of the Audit, Remuneration and Nomination
Committees. A Fellow of the Institute of Chartered
Accountants, Aubrey has spent the majority of 
his career within the property sector. In 1990, he
joined Savills plc, the global property services
business, as finance director, becoming
managing director in 1991 and group chief
executive in 2000. Previously, he was financial
director of Peachey Property Corp. plc, where 
he played an important part in turning the
company around. Aubrey holds a number of 
other board positions, and is a director of
Trammell Crow Savills and a non-executive
director of Wigmore Hall. He is also chairman 
of the Accounting Committee and a member 
of the Policy Committee of the British Property
Federation. Aubrey’ s knowledge of property
matters has contributed greatly to the success 
of the group’ s estate-management activities 
and its non-core property disposal programme.
03 Tim Bowdler
Non-executive, 55
Tim joined the board in 2001. He is a member 
of the Audit, Remuneration and Nomination
Committees. Tim is chief executive of Johnston
Press plc, one of the UK’ s major regional
newspaper publishers, which he joined as group
managing director in 1994. Since becoming chief
executive in 1997, Tim has more than doubled
the size of the group. Tim is also president of the
Newspaper Society, a member of the Council of 
the Newspaper Society, a director of The Press
Standards Board of Finance and a non-executive
director of The Press Association Ltd. Tim spent 
the early part of his career in the manufacturing
sector before moving into publishing. He trained 
as a production engineer, progressing through 
a variety of managerial appointments leading up 
to general management. Prior to Johnston Press, 
Tim worked as a divisional managing director of
Cape plc’ s building and architectural-products
companies. Tim’ s advice to the board is drawn 
from his experience as the chief executive of an
expanding public company.
04 Stuart Chambers
Non-executive, 46
Stuart joined the board in 2002. He is a member 
of the Remuneration and Nomination
Committees. He joined Pilkington plc, one of the
world’ s leading glass manufacturers, in 1996 as
group vice-president responsible for marketing
and business development of Building Products.
In 1998, he was promoted to managing director
of Pilkington’ s Primary Products Europe, and was
subsequently promoted to president of Building
Products Worldwide. In May 2002, he became
Pilkington’ s group chief executive. Stuart began
his career with Shell where, using his academic
background in applied physics, he worked as a
chemical engineer and market analyst in a
number of Shell’ s divisions, including Shell Oil UK
and Deutsche Shell AG, before becoming Shell
Oil UK’ s regional sales manager for retail in 1986.
In 1988, he joined the Mars Corporation as a
national account manager, becoming its
European sales director four years later. In 1995,
he was promoted to vice-president for sales 
and marketing of Mars Electronics International.
22
01 02 03 04 Stuart is able to share his experiences as an
active chief executive of a public company with
the board on many business matters.
05 George Duncan
Non-executive Deputy Chairman, 69
George joined the board as a non-executive
director in 1986 and was appointed Deputy
Chairman in 1 998. He is a member of the
Nomination Committee and Chairman of the
Remuneration Committee. George’ s extensive
business experience spans a variety of industries,
including brewing and financial services, and he
has held a number of executive and non-
executive board positions. Currently he is non-
executive chairman of housebuilders Swan Hill
Group plc. He is also a Fellow of the Institute of
Chartered Accountants and Freeman of the 
City of London. The board has benefited from
George’ s considerable boardroom and business
experience over the many years in which he has
been involved with the group. He is stepping
down from the board at the 2003 Annual General
Meeting (AGM).
06 Bo Lerenius
Group Chief Executive, 56
Since his appointment as Group Chief Executive 
in May 1999, Bo has developed the management
team, re-focused the group on its core ports and
transport business and instigated a programme to
dispose of non-core assets. He is also responsible
for the significant progress the group has made in
implementing its clearly-defined growth strategy.
While not having previously worked in the ports
industry directly, Bo had first-hand knowledge of
a port-user’ s requirements from his time as vice-
chairman and then president and chief executive
of Stena Line, one of Sweden’ s largest companies.
He was also director of new business investments
at Stena AB. Bo had previously been group
president and chief executive of Ernstromgruppen,
a building-materials group, and a director of both
T arkett and Nordjsö Färg. He is currently a non-
executive director of Inmarsat Ventures Ltd. 
Bo is a member of the Nomination Committee.
07 Derek Sach
Non-executive, 54
Derek joined the board in 1 998. He is Chairman 
of the Audit Committee and a member of the
Remuneration and Nomination Committees. 
With a career spent in investment management
and banking – he is currently managing director 
of Specialised Lending Services at the Royal
Bank of Scotland plc – Derek provides the board
with strategic advice on banking and financing
matters. He joined Royal Bank of Scotland in
1 992 to set up its Specialised Lending Services
business and has held a number of posts
subsequently, including director of group risk. 
In 1 997, Derek was seconded for one year as
chief executive to T esco Personal Finance, a joint
venture between Royal Bank of Scotland and
T esco. Before joining Royal Bank of Scotland,
Derek was managing director (UK) of 3i Group
from 1 988 to 1 992. His other directorships include
The Berkeley Group plc and Priority Sites Limited.
He is also deputy president and deputy chairman of
the London Chamber of Commerce and Industry. 
08 Ross Sayers
Non-executive Chairman, 61
Ross spent almost a decade running utility
companies before joining the board in October
2001 as a non-executive director , becoming
chairman after the 2002 AGM. He is a member 
of the Remuneration and Nomination Committees.
Ross has a long and distinguished track record
within the international transport industry . From
1988 to 1 992, he was executive chairman of the
State Rail Authority of New South Wales. During
this time, he introduced a major change
programme in which customer service standards
were enhanced, operating costs significantly
reduced and the railway infrastructure and rolling
stock were upgraded. From 1 986 to 1 988, Ross
was executive chairman of New Zealand Railways,
where he introduced a change programme to
realise significant cost savings and efficiency
improvements. In 1993, he became chief
executive officer and managing director of Hong
Kong-based CLP Holdings, previously known as
China Light and Power , where he refocused the
utility on customer service, improved operating
efficiencies and reduced costs. In 2000, he moved
to the UK to become chairman of Innogy Holdings
plc. He resigned in 2002 following the acquisition
of Innogy by German utility RWE. Ross is a Fellow
Chartered Accountant (NZ) and is also a non-
executive director of Intertek T esting Services plc
and Network Rail.
09 Andrew Simon, OBE
Non-executive, 57
Andrew joined the board in 1994. He is a member
of the Audit, Remuneration and Nomination
Committees. The first 23 years of Andrew’ s career
were spent with Evode Group, where he was
chief executive officer and chairman until 1989,
during which time he grew the group’ s adhesives
and sealants business from a £10 million to a
£300 million international speciality chemicals
and materials group, developing a number of
market leadership positions in the process.
Following the takeover of Evode ten years ago,
Andrew has built up a widely-diversified portfolio
of non-executive directorships and chairmanships
in UK, European and North American companies
across a variety of sectors. He is currently non-
executive chairman of Germany’ s Kaffee Partner,
Zeus Group Ltd and Ascent Investments Ltd,
deputy chairman of Dalkia plc, is on the
supervisory board of SGL Carbon AG of Germany
and is a non-executive director of Brake Brothers
Holdings Limited, Hampsons plc and Finning
International Inc. of Canada. The considerable
European and American business experience
that Andrew shares with the board includes major
strategy reviews and corporate development in a
wide range of industries. 
23
05 08 06 07 09 Operating and financial review
The group’s performance in 2002 was once
again strong. A 6.9 per cent increase in group
turnover from continuing operations to £401.9
million (2001: £375.8 million) represented solid
growth. Underlying pre-tax profit rose by 5.9
per cent to £138.1 million (2001: £130.4 million)
and underlying earnings per share grew by 8.2
per cent to 30.4 pence (2001: 28.1 pence). A
total proposed dividend of 14.75 pence per
share (2001: 13.75 pence) represents an increase
of 7.3 per cent on last year.
The group’s total underlying operating profit
from continuing operations grew by 3.1 per cent
to £172.2 million (2001: £167.1 million), which is
consistent with the growth achieved by the core
UK ports and transport business.
Analysis of total underlying operating profit from
continuing operations:
A detailed segmental analysis of the operations
which have combined to produce the group’s
results is given in note 2 to the financial
statements on page 36 and a discussion of the
group’s strategy is provided in the Group Chief
Executive’s review on pages 12 to 14. Significant
features of the operating performance of each
business segment are discussed below.
Ports & transport – UK
Turnover in the core UK ports and transport
business – which accounted for more than 80 
per cent of the group’s continuing turnover and
continuing underlying operating profit – increased
by 7.1 per cent to £325.7 million (2001: £304.2
million) and underlying operating profit grew by
3.1 per cent to £141.4 million (2001: £137.2
million), building on the increased growth generated
over the previous two years. This growth, which 
is a key indicator used in managing the group,
was achieved against a challenging economic
background and despite £3.1 million of additional
insurance costs in the year that the group, in
common with other transport companies, has had
to meet as a result of the terrorist attacks in the
USA on 11 September 2001. This performance
reflects the robustness of the group’s strategy of
growing its core business through rigorously-
targeted investment in conjunction with securing
new long-term customer contracts.
Total annual throughput at the group’s 21 UK
ports reduced to 120 million tonnes (2001: 125
million tonnes). However, excluding low-margin oil
and a decrease in iron ore imports driven by Corus’ s
restructuring in South Wales, both of which had
limited impact on the group’s results, the group
experienced an underlying growth in throughput
“The group’s performance in 2002 was once again strong.
A 6.9 per cent increase in group turnover from continuing
operations to £401.9 million represented solid growth.”
24 Associated British Ports Holdings PLC Annual Report & Accounts 2002
A Ports & transport – UK £141.4m
B Ports & transport – USA £1.5m
C Property investment £6.8m
D Property development £12.0m
E Share of operating profit 
   in associates £10.5m
B
C
D
E
A
A Ports & transport – UK £137.2m
B Ports & transport – USA £0.4m
C Property investment £8.0m
D Property development £13.0m
E Share of operating profit
   in associates £8.5m
B
C
D
E
A
2002  £172.2m
2001  £167.1m 25
of 1.6 per cent at its UK ports. This growth was
achieved against a decrease in coal imports at
the group’s South Wales ports. Importantly, key
trades continued to show growth, including roll-
on/roll-off traffic, containers, vehicle imports and
exports, imports of forest products and cruise-
ship calls. Agribulk volumes also recovered in
the second half of 2002, having been impacted
by the foot-and-mouth outbreak in 2001.
Developments within the individual UK ports
business units are discussed below.
Hull & Goole
Turnover increased by 2.5 per cent, with
forest products, in particular, showing good
growth. Roll-on/roll-off traffic and the number 
of ferry passengers passing through the Port 
of Hull also grew. This growth more than
compensated for a reduction in container traffic
at the Port of Goole.
During the year, the group invested some
£1.2 million in additional storage facilities at 
the Port of Hull – the UK’s top timber port – to
support the continued growth in its timber trade.
At the Port of Goole, ABP reached a long-
term agreement with existing customer RMS
Europe to develop new storage and distribution
facilities, creating 13,000 square metres of
undercover storage for weather-sensitive cargoes
including paper products and aluminium coils.
Grimsby & Immingham
Re-confirmed as the UK’s number one port 
in the port tonnage figures published by the
Department for Transport towards the end of
2002, the Port of Grimsby & Immingham
increased turnover by 5.9 per cent. Humber
International Terminal continued to perform 
well, leading to further growth in Immingham’s
coal trade. Forest products, container traffic,
roll-on/roll-off traffic and vehicle imports also
performed well.
Revenue-earning projects that became
operational during the year included: the
provision of additional car-storage facilities 
for the Volkswagen Group at Grimsby; a 
£5.6 million investment in a rail siding to
accommodate increased traffic created by 
the growing demand for Humber International
Terminal; and the addition of a new £1.5 million
mobile harbour crane to service Hydro Agri’s
agribulk imports. A £1.1 million warehouse
complex for IAWS, built under a 15-year
contract and a £1.0 million investment in a forest
products terminal under a 20-year contract,
both at Immingham, are scheduled for
completion this year.
Southampton
Turnover increased by 3.5 per cent, 
boosted by strong vehicle imports and exports,
the continued growth in cruise traffic and a strong
deep-sea container market. These trades more
than compensated for the loss of banana imports.
During the year, a £4.0 million multi-deck car
terminal – one of the first of its kind in the UK –
became operational. Built under a ten-year
agreement with Wallenius Wilhelmsen Lines, 
the Southampton International Vehicle Terminal
provides almost five hectares of storage on a
footprint of approximately one hectare. The port
also opened a dedicated Honda Terminal and
won additional vehicle-handling business to export
Toyota Avensis and Corolla models to Portugal.
Work is already under way on a £6.5 million
major reconstruction of the Mayflower Cruise
Terminal used to service P&O Cruises, under a
ten-year agreement. In addition, ABP and
Cunard Line reached an agreement confirming
Southampton as Cunard’s UK base through to
2009, underpinning ABP’s £2.0 million
refurbishment of the Queen Elizabeth II Terminal.
ABP is also investing £1.5 million to develop a
third cruise terminal on the site of a former
banana terminal. 
Other developments included a £1.5 million
investment in the port’s bulk trade, with a
refurbishment of facilities at its multi-user bulk-
handling terminal, and a £0.8 million investment
in an environmentally-friendly scheme to
construct the UK’s first port-located glass-
recycling plant. This scheme received a Freight
Facilities Grant from the UK government as the
recycled glass is transported from the port by
sea, taking over 640,000 lorry miles off the
roads each year. 
01 Forest products – a key trade – continued to
show growth during the year.
02 Humber International Terminal at the Port of
Immingham performed well, boosting the port’s
coal trade.
03 The rail-connected Southampton International
Vehicle Terminal became operational in April
2002 following a £4.0 million investment.
01 02 03
3% growth 
from UK ports 26 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Operating and financial review continued
“The group received £32.0 million in respect of the sale of
AMPORTS USA’s Aviation division in 2002, bringing the
total amount of proceeds from non-core asset sales since
January 2000 to £272.0 million.”
The public inquiry into the group’s application
to develop Dibden Terminal was completed on
schedule in December 2002. The government’s
decision is now expected either in late 2003 or
2004. Costs capitalised in respect of this
development totalled £35.4 million (2001: £24.0
million) as at the end of 2002. The group remains
confident about the need for additional deep-sea
container capacity in the UK and the prospects
for this project; however, if the government’s
decision results in the project not proceeding,
costs of this project will be written-off to the profit
and loss account in the year in which the decision
not to proceed is taken.
South Wales Ports
Our South Wales Ports experienced a
challenging year in 2002, and turnover was
marginally down by 0.4 per cent. This was driven
by a major reduction in coal imports and, to a
lesser extent, iron ore imports, but was offset by
some significant business wins and increased
throughput in forest products, steel and agribulks. 
During the year, ABP completed a £0.8 million
extension to ABP Dowds Terminal at the Port of
Newport on the back of a long-term agreement
with steel customer W E Dowds (Shipping).
Furthermore, ABP agreed in principle with Saint-
Gobain Building Distribution to develop a £4.6
million terminal to receive and store forest products
at that port. This is expected to become operational
during the first half of this year. 
Shortsea Ports
Turnover grew significantly, up by 10.0 per cent,
mainly as a result of strong growth in roll-on/roll-
off and agribulk traffic. Container throughput and
ferry-passenger traffic also grew.
At the Port of Troon, ABP acquired the former
Ailsa-Troon shipyard under a 50-year lease. This
5.5-hectare site contains two dry docks, a pier, two
warehouses and 14,600 square metres of land
available for development. 
Investments in agribulk facilities were made at
the Port of Ayr, with the opening of the £1.0 million
Carrick Terminal which was constructed following
a 15-year agreement with IAWS, and at the Port
of Ipswich, where a £2.2 million grain storage and
distribution complex was completed for The Grain
Terminal. The Port of Teignmouth is to receive a
£4.0 million investment associated with a long-
term agribulks contract. Also at the Port of Ayr, an
investment in a £1.0 million warehousing facility
was announced following a long-term agreement
with Peacock Salt. At the Port of Silloth, a £0.2
million storage and distribution centre was
completed for Prime Molasses. During 2003,
work will commence on a £1.0 million marina
development at the Port of Lowestoft.
ABP Connect
Launched in 2001, ABP’s value-added services
division, ABP Connect, had some significant
business wins in 2002, which resulted in turnover
increasing by 31.9 per cent.
ABP Connect was selected to operate a
railfreight terminal within the strategically-located
400-hectare Hams Hall distribution site east of
Birmingham. Since acquiring the site for a cash
consideration of £0.3 million, ABP Connect has
already attracted new customers, securing
railfreight services with Medite Shipping, leading
railfreight operator GB Railfreight and Combined
Transport. ABP Connect also won a medium-
term contract with HM Customs & Excise to
provide high-security storage for illegal imports 
at locations throughout the UK. A £2.5 million
extension to the Cardiff Cold Store was also
completed during the year.
Ports & transport – USA
Turnover from AMPORTS USA’s Seaport
division’s activities, which comprise the group’s
continuing ports and transport operations in the
USA, increased by 20.7 per cent to £36.1 million
(2001: £29.9 million). Continuing underlying
operating profit increased to £1.5 million 
(2001: £0.4 million).
The significant improvement in this business 
is due to vehicle-volume growth of 47.7 per cent
as a result of new accounts coming on stream.
Some 582,000 vehicles were handled during the
year (2001: 394,000). This volume increase was
partially offset by some vehicle-customisation
reductions and competitive price pressures as a
result of the general economic slowdown in the USA.
AMPORTS invested £3.1 million to
accommodate vehicle-volume growth associated
with the group’ s new Hyundai account. This included
a new 27.5-hectare vehicle-processing facility at
the Chesapeake Marine Terminal in Baltimore,
Maryland, which became operational in April 2002.
The sale of AMPORTS USA’s Aviation division
to subsidiaries of Macquarie Global Infrastructure
Funds was completed in December 2002 for a
total cash consideration of US$50.0 million (£32.0
million). Prior to completion of the sale, the
division contributed turnover of £26.5 million and
an underlying operating profit of £3.7 million. The
group achieved an exceptional pre-tax profit of
£7.8 million from the sale. 27
01 A new storage and distribution facility was
opened for Prime Molasses at the Port of
Silloth.
02 Our value-added services division, ABP
Connect, launched in 2001, had some significant
business wins in 2002.
03 Throughput at Southampton Container
Terminals increased by 9.5 per cent.
01 02
Property investment 
As a result of the group’s ongoing disposal of
non-operational property, turnover from property
investment rentals reduced to £9.3 million (2001:
£10.8 million) and operating profit to £6.8 million
(2001: £8.0 million).
Property development
Towards the end of 2002, the group completed
the sale of ten hectares of land at the Port of
Plymouth jointly to South-West of England Regional
Development Agency and English Partnerships for
a cash consideration of £9.0 million. As a result of
this and other sales made during the course of
the year, turnover from property development was 
£30.8 million (2001: £30.9 million). Operating
profit was £12.0 million (2001: £13.0 million).
Disposal of non-core assets
In total, the group has sold a further £31.0
million of non-core property and land since 
1 January 2002. This brings the total amount of
non-core property and land sold since 1 January
2000 to £169.0 million. The group remains well
on track to achieve its target of £200.0 million of
non-core property and land sales.
The group also received £71.0 million in respect
of the sale of Red Funnel Group in 2000 and £32.0
million in respect of the sale of AMPORTS USA’s
Aviation division in 2002, bringing total non-core
asset sales since 1 January 2000 to £272.0 million.
Associates
The group’s share in the turnover of associates
increased by 9.7 per cent to £44.1 million (2001:
£40.2 million). Its share of operating profit rose
23.5 per cent to £10.5 million (2001: £8.5 million).
Both Southampton Container Terminals (SCT)
– 49 per cent owned – and Tilbury Container
Services (TCS) – 33 per cent owned – experienced
increased container throughput in 2002. SCT
handled 1,275,000 container units, an increase of
9.5 per cent, and TCS handled 277,000 container
units, an increase of 21.0 per cent. The Cardiff
Bay Partnership, in which the group has a 45 per
cent interest, produced a result similar to the
previous year.
Interest
Net interest payable of £37.7 million was £2.0
million below the previous year (2001: £39.7 million),
with lower interest rates more than compensating
for an increase in average net borrowings of £23.9
million. The latter resulted from increased borrowings
towards the end of 2001 as the share repurchase
programme was completed. These were not
significantly reduced until the sale of AMPORTS
USA’s Aviation division towards the end of 2002.
The group’s underlying average rate of interest
reduced to 7.4 per cent (2001: 8.3 per cent) and
underlying interest cover improved to 4.7 times
(2001: 4.3 times).
Taxation
The underlying tax charge for the year of
£38.7 million (2001: £36.5 million) represents an
underlying effective tax rate of 28.0 per cent, in
line with the effective tax rate for the previous year
as restated for the effects of Financial Reporting
Standard 19 – Deferred Tax (see note 34). This
rate compares favourably with the weighted
standard rate of tax of 30.3 per cent for the UK
and the USA, the two main countries in which the
group operates, mainly because the group
benefits from the utilisation of brought-forward
capital losses against its UK property sales.
Goodwill amortisation and exceptional items
At £1.6 million, goodwill amortisation was
similar to the previous year’s charge of £1.5 million.
This is expected to reduce in 2003 as a result of
the sale of AMPORTS USA’s Aviation division.
Exceptional items included a profit of £7.8 million
on the sale of AMPORTS USA’ s Aviation division, a
loss of £0.4 million on the closure of Southern
Emergency Vehicles, a small vehicle-modification
business in the USA, and a profit of £0.7 million
(2001: £0.6 million) from the sale of fixed assets.
In addition, the group’s review of its cost base
towards the end of 2002 resulted in a restructuring
charge of £5.5 million. It is estimated that this
review will result in cost savings of at least £3.0
million per year once the cost savings programme
is fully implemented.
Earnings per share
Underlying earnings per share, before goodwill
amortisation and exceptional items, increased by
8.2 per cent to 30.4 pence per share (2001: 28.1
pence per share).
Basic earnings per share increased to 30.9
pence per share (2001: 27.8 pence per share).
The earnings per share calculations benefited
from a reduction in the weighted average number
of shares to 327.0 million (2001: 334.2 million)
following the completion of the share repurchase
programme in 2001. 
Dividends
In determining the level of dividend in any one
period, the directors pay particular attention to the
03 group’ s underlying earnings per share and the group’ s
underlying dividend cover. Accordingly, based on the
financial performance of the group in the first six
months and the outlook for the year, the directors
declared an increased interim dividend of 6.5 pence
per share (2001: 6.0 pence per share). Given the
progress made by the group over the year as a whole,
the directors recommend a final dividend of 8.25
pence per share (2001: 7.75 pence per share). This
would give a total dividend for the year of 14.75
pence per share, an increase of 7.3 per cent on 2001.
Underlying dividend cover of 2.0 times is
close to the previous year’s level of 2.1 times.
Share price
At the end of the year the share price closed at
399.5 pence. While this was 4.9 per cent below
the price at the beginning of the year, it
represented a 20 per cent outperformance
compared with the FTSE top 250 companies
comparator group and a 12 per cent
outperformance compared with the FTSE transport
sector in terms of total shareholder return. The
share price ranged from a high of 488.0 pence in
March 2002 to a low of 375.5 pence in July 2002.
2002 total shareholder return 
Cash flow
Cash flow remains strong, with underlying
operating cash conversion from total underlying
operating profit being 114.6 per cent. Cash flow
from operations, including dividends from
associated undertakings, totalled £201.5 million
for the year, 19.4 per cent above the previous year’ s
level of £168.8 million. This benefited from a positive
£15.2 million working capital contribution which more
than reversed the previous year’s negative
movement, which was partly related to the timing
of receipt of cash from property sales made close
to the 2001 year end. Free cash flow at £66.7
million represented a 45.0 per cent improvement
on 2001.
Analysis of 2002 free cash flow:
Gross capital expenditure totalled £76.7 million
(2001: £62.4 million), which included a further £9.5
million of capital expenditure on Dibden Terminal
at the Port of Southampton, £4.4 million on a rail
siding at Humber International Terminal at the Port
of Immingham, and £2.4 million on the Mayflower
Cruise Terminal, Southampton. There are two
elements to capital expenditure. First, maintenance
or infrastructure expenditure and second, revenue-
earning capital projects. During 2002, maintenance
expenditure was just below the level of depreciation
and it is the group’s aim that this will also be the
case in 2003. In contrast, the only restriction the
group places on revenue-earning capital projects
is that it targets at least a 15.0 per cent internal
rate of return on these projects and the group does
not enter into major speculative investments.
In total, growth capital expenditure increased
by 11.3 per cent to £52.0 million (2001: £46.7
million). However, as previously stated, many of
these new projects will become operational in the
future and therefore have had only a modest impact
on the results for 2002.
Looking forward, the group has substantial capital
expenditure plans on the Humber and at Dibden
Terminal, Southampton, which may lead to investments
in excess of £700 million over the medium term.
Borrowings and gearing
The group received a net £29.1 million in respect
of acquisitions and disposals during the year , primarily
as a result of the £32.0 million sale of AMPORTS
USA’ s Aviation division. As a result of this and strong
underlying operating cash flow, net borrowings
decreased by £58.8 million to £450.1 million (2001:
£508.9 million). Consequently, gearing reduced 
to 44.6 per cent (2001: 53.1 per cent). 
28 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Operating and financial review continued
“Looking forward, the group has substantial capital
expenditure plans on the Humber and at Dibden Terminal,
Southampton, which may lead to investments in excess of
£700 million over the medium term.”
A Gross capital expenditure £76.7m
B Net interest £37.1m
C Taxation £25.7m
C
A
B
A Net cash inflow from operating activities
 including dividends received from associated
 undertakings £201.5m
B Other £4.7m
A
B
Outflow  £139.5m
Inflow  £206.2m
70
80
90
100
110
120
2002
Associated British Ports Holdings PLC
FTSE top 250
FTSE Transport  29
01 ABP handles more dry bulks than any other
UK port company.
02 The Port of Southampton was honoured to
receive awards for ‘Northern Europe’s Most
Efficient Terminal Operator’ and ‘Northern
Europe’s Best Turnaround Port’ for its cruise-
ship handling at 2002 Seatrade Cruise Shipping
Convention in Miami, Florida.
01 02
Shareholders’ funds and return on capital
employed
Shareholders’ funds rose by £50.9 million to
£1,009.3 million and represent 308 pence per share
(2001: 294 pence per share).
The group’s 10.8 per cent underlying return
on capital employed was similar to the previous
year, both of which compare favourably with the
1999 level of 9.5 per cent when the group’s current
strategy was put in place.
Financial controls and policies
Treasury matters throughout the group are
controlled centrally and carried out in compliance
with policies approved by the board. The group’s
main financial risks are liquidity, interest rate,
foreign exchange and credit risk. The group aims
to manage these risks to an acceptable level.
Liquidity risk
Borrowing facilities are maintained at a level
which is forecast to provide a reasonable surplus
beyond the future needs of the group. At 31
December 2002, the group had £232.3 million of
undrawn committed bank facilities (2001: £170.4
million). The 44.6 per cent gearing ratio at 31
December 2002 is below the lower end of the
group’s target range for gearing of 50 to 70 per
cent, leaving the group well placed to fund its
planned capital expenditure programme for its
core UK ports business.
Interest rate risk
The group maintains a balance between
fixed- and floating-rate debt to manage interest
rate risk. At the end of the year, 68 per cent of the
group’s borrowings were fixed (2001: 62 per
cent). The group uses derivative financial
instruments such as interest rate swaps, when
appropriate, to hedge against changes in interest
rates and to adjust the balance between fixed-
and floating-rate debt.
Foreign exchange risk
The group conducts a proportion of its
business in foreign currency, mainly US dollars.
Movements in the rate of exchange can therefore
affect the translation of the results and the
underlying balance sheet and assets of foreign
subsidiary undertakings. While it is not group
policy to hedge exposure from profit translation,
the group does partially hedge balance sheet
translation risk. However, the group does not
speculate in foreign currency. The average
exchange rate used to translate US dollar profits
was US$1.5036 (2001: US$1.4413). The year-
end exchange rate used to translate US dollar
assets and liabilities was US$1.6099 (2001:
US$1.4554).
Credit risk
In common with other companies, the group
is exposed to credit-related losses in the event 
of non-performance by counterparties to financial
instruments. The group mitigates this credit risk
by selecting only those counterparties with an
investment-grade credit rating.
Adoption of new accounting standards
The group adopted Financial Reporting
Standard (FRS) 17 – Retirement Benefits under 
its transitional arrangements in 2001 and has
continued to report on this basis during 2002.
The disclosures required under the transitional
arrangements are given in note 5b to the financial
statements on pages 39 to 41. 
During 2002, the group adopted FRS 19 –
Deferred Tax. As a result, the group’s reported
underlying effective tax rate increased from 24.8
per cent to 28.0 per cent, underlying earnings per
share reduced by 1.4 pence from 31.8 pence to
30.4 pence and net assets by £59.0 million to
£1,009.3 million without any impact on cash
flows. Comparative figures for 2001 have been
restated throughout to reflect the effects of FRS
19 (see note 34).
Pensions
An actuarial valuation of the group’s main
defined benefit pension scheme was carried out
as at 31 December 2000. This confirmed that the
pension scheme remained in surplus at that date.
The group is therefore maintaining its contribution
holiday. With effect from 1 April 2002, the scheme
was closed to new entrants and replaced with a
new defined contribution arrangement. At the end
of 2002, under FRS 17, the scheme’s assets of
£385.8 million exceeded the scheme’s liabilities
by £33.8 million.
Richard Adam FCA
Group Finance Director
19 February 2003 30 Associated British Ports Holdings PLC Annual Report & Accounts 2002 30
Group profit and loss account 
for the year ended 31 December
Goodwill Exceptional
Underlying* amortisation items T otal T otal
2002 2002 2002 2002 2001**
Note £m £m £m £m £m
Turnover including share of associates
Existing operations 445.4 – – 445.4 416.0 
Acquisitions 0.6 – – 0.6 –
Continuing operations 446.0 – – 446.0 416.0 
Discontinued operations 27.9 – – 27.9 29.6 
473.9 – – 473.9 445.6 
Less: share of turnover in associates (44.1) – – (44.1) (40.2)
Group turnover 2 429.8 – – 429.8 405.4 
Cost of sales (211.8) – – (211.8) (196.9)
Gross profit 218.0 – – 218.0 208.5 
Administrative expenses 3 (52.7) (1.6) (5.5) (59.8) (48.4)
Existing operations 161.9 (1.6) (5.5) 154.8 157.1 
Acquisitions (0.2) – – (0.2) –
Continuing operations 161.7 (1.6) (5.5) 154.6 157.1 
Discontinued operations 3.6 – – 3.6 3.0 
Group operating profit 165.3 (1.6) (5.5) 158.2 160.1 
Share of operating profit in associates 10.5 – – 10.5 8.5 
Total operating profit 175.8 (1.6) (5.5) 168.7 168.6 
Profit on disposal of discontinued operations 3,26 –– 7.4 7.4 –
Profit on sale of fixed assets 3 –– 0.7 0.7 0.6 
Profit on ordinary activities before interest 2,4 175.8 (1.6) 2.6 176.8 169.2 
Net interest payable 6 (37.7) – – (37.7) (39.7)
Profit on ordinary activities before taxation 138.1 (1.6) 2.6 139.1 129.5 
T axation on profit on ordinary activities 8 (38.7) – 0.7 (38.0) (36.5)
Profit on ordinary activities after taxation
attributable to shareholders 99.4 (1.6) 3.3 101.1 93.0 
Dividends 10 (48.5) – – (48.5) (45.4)
Retained profit for the group
and its share of associates 28 50.9 (1.6) 3.3 52.6 47.6 
Earnings per share – basic 11 30.4p (0.5p) 1.0p 30.9p 27.8p 
Earnings per share – diluted 11 30.6p 27.5p 
Earnings per share – underlying * 11 30.4p 28.1p 
* Underlying represents results before goodwill amortisation and exceptional items.
** Restated for the effects of Financial Reporting Standard 19 – Deferred T ax (note 34). 31 31
Group Company
2002 2001* 2002 2001*
Note £m £m £m £m
Fixed assets
Intangible assets 12 15.4 23.9 – – 
T angible operating assets 13 834.0 798.0 – – 
T angible property assets 14 568.8 588.5 – – 
Investments 15 50.2 48.0 939.6 922.1 
1,468.4 1,458.4 939.6 922.1 
Current assets
Property developments and land held for sale 16 38.3 44.2 – – 
Debtors – due within one year 17 93.4 97.3 549.6 564.1 
Debtors – due after one year 17 82.9 76.8 – – 
Cash and short-term deposits 18 6.4 6.0 – – 
221.0 224.3 549.6 564.1 
Creditors – amounts falling due within one year 19 (129.9) (131.0) (38.9) (36.5)
Net current assets 91.1 93.3 510.7 527.6 
Total assets less current liabilities 1,559.5 1,551.7 1,450.3 1,449.7 
Creditors – amounts falling due after more than one year 20 (449.5) (505.4) (441.0) (491.3)
Provisions for liabilities and charges 23 (92.0) (79.0) – – 
Deferred income 24 (8.7) (8.9) – – 
Net assets 1,009.3 958.4 1,009.3 958.4 
Capital and reserves
Called-up share capital 27 82.0 81.6 82.0 81.6 
Share premium account 28 77.4 70.9 77.4 70.9 
Revaluation reserve 28 627.9 641.7 614.3 595.6 
Other reserves 28 37.0 37.0 51.8 51.8 
Profit and loss account 28 185.0 127.2 183.8 158.5 
Equity shareholders’ funds 1,009.3 958.4 1,009.3 958.4 
* Restated for the effects of Financial Reporting Standard 19 – Deferred T ax (note 34).
The financial statements on pages 30 to 60 were approved by the board of directors on 19 February 2003.
Richard Adam FCA
Group Finance Director
Balance sheets
as at 31 December 32 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Group cash flow statement
for the year ended 31 December
2002 2001
Note £m £m
Net cash inflow from operating activities 29 199.1 165.2 
Dividends received from associated undertakings 2.4 3.6 
Returns on investments and servicing of finance
Interest received 0.8 0.4 
Interest paid (36.9) (39.1)
Interest element of finance lease rental payments (1.0) (1.2)
Net cash outflow from returns on investments and servicing of finance (37.1) (39.9)
Taxation (25.7) (28.2)
Capital expenditure and financial investment
T angible operating assets (70.0) (53.3)
T angible property assets (6.7) (9.1)
Sale of fixed assets 3.4 2.1 
Movement on investment in own shares 15 1.3 5.6 
Net cash outflow from capital expenditure and financial investment (72.0) (54.7)
Free cash flow 66.7 46.0 
Acquisitions and disposals
Purchase of business and subsidiary undertakings 25 (0.3) (4.6)
Sale of subsidiary undertakings 26 29.4 (0.9)
Net cash inflow/(outflow) from acquisitions and disposals 29.1 (5.5)
Equity dividends paid (46.6) (44.5)
Cash inflow/(outflow) before use of liquid resources and financing 49.2 (4.0)
Management of liquid resources 29 (2.0) 0.9 
Financing
Issue of shares 4.8 5.6 
Repurchase of shares – (68.3)
(Decrease)/increase in borrowings (48.8) 67.0 
Capital element of finance lease rental payments (3.3) (2.9)
Net cash (outflow)/inflow from financing (47.3) 1.4 
Decrease in cash in the year 29 (0.1) (1.7)
Reconciliation of net cash flow to movement in net borrowings
for the year ended 31 December
2002 2001
Note £m £m
Decrease in cash in the year 29 (0.1) (1.7)
Cash outflow/(inflow) from decrease/(increase) in borrowings and lease finance 52.1 (64.1)
Cash outflow/(inflow) from movement in liquid resources 29 2.0 (0.9)
Currency translation differences 29 4.8 (1.5)
Change in net borrowings resulting from cash flows 58.8 (68.2)
Net borrowings at 1 January (508.9) (440.7)
Net borrowings at 31 December 21,29 (450.1) (508.9) 2002 2001*
Note £m £m
Profit on ordinary activities before taxation 139.1 129.5 
Realisation of property revaluation surpluses of previous years 28 8.3 0.7 
Historical cost profit on ordinary activities before taxation 147.4 130.2 
T axation on profit on ordinary activities (38.0) (36.5)
Dividends (48.5) (45.4)
Historical cost profit for the year retained for the group and its share of associates 60.9 48.3 
Note of group historical cost profits and losses
for the year ended 31 December
Group Company
2002 2001* 2002 2001*
Note £m £m £m £m
Profit on ordinary activities after taxation attributable to shareholders 101.1 93.0 75.4 98.2 
Dividends (48.5) (45.4) (48.5) (45.4)
52.6 47.6 26.9 52.8 
New share capital subscribed 4.7 6.4 5.3 6.8 
Repurchase of shares 27 – (68.3) – (68.3)
(Deficit)/surplus arising on revaluation of tangible property assets 14 (5.5) 0.3 – – 
Realised surplus/(deficit) on revaluation of subsidiary undertakings 28 – – 18.7 (5.1)
Currency translation differences on foreign currency net investments 28 (0.9) 0.2 – – 
Net increase/(decrease) in equity shareholders’ funds 50.9 (13.8) 50.9 (13.8)
Equity shareholders’ funds at 1 January 958.4 972.2 958.4 972.2 
Equity shareholders’ funds at 31 December 1,009.3 958.4 1,009.3 958.4 
*Restated for the effects of Financial Reporting Standard 19 – Deferred T ax (note 34).
Reconciliation of movements in equity shareholders’ funds 
for the year ended 31 December
33
2002 2001*
Note £m £m
Profit on ordinary activities after taxation attributable to shareholders 101.1 93.0 
(Deficit)/surplus arising on revaluation of tangible property assets 14 (5.5) 0.3 
Currency translation differences on foreign currency net investments 28 (0.9) 0.2 
Total recognised gains for the year 94.7 93.5 
Prior year adjustment 34 (54.5) – 
Total recognised gains since last annual report 40.2 93.5 
Statement of group total recognised gains and losses
for the year ended 31 December 34 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
1 Accounting policies
Basis of preparation
The financial statements have been prepared on a going concern basis in accordance with applicable accounting standards and under the historical cost convention as
modified by the revaluation of operational land, investment properties, land at ports held for development and investments in subsidiary and associated undertakings. 
Basis of consolidated financial statements
The consolidated financial statements include the accounts of the company, its subsidiary undertakings and its share of the results of associated undertakings. The results
of subsidiary undertakings acquired are included from the date of acquisition. The results of discontinued operations are included up to the date of disposal. 
New financial reporting standards 
Financial Reporting Standard (FRS) 19 – Deferred Tax became effective for accounting periods ending on or after 23 January 2002 and has been adopted in the preparation
of these financial statements. The effects of adopting FRS 19 are set out in note 34 and comparative results have been restated throughout these financial statements to
reflect the adoption of FRS 19. 
The group continues to account for pensions in accordance with Statement of Standard Accounting Practice (SSAP) 24 – Accounting for Pension Costs. The group is
continuing to apply the transitional disclosure requirements (see note 5) of FRS 17 – Retirement Benefits. 
Turnover and profit recognition
Turnover comprises the amounts receivable in respect of ports and transport services provided to third parties, income from investment properties and sales of property
developments, excluding related sales taxes. Turnover and profit, in relation to the provision of ports and transport services and income from investment property, is
recognised when the provision of the service is complete. Turnover and profits or losses arising on the sale of sites or completed developments are recognised when
contracts for sale have been exchanged and when all material conditions have been satisfied.
Financial instruments 
Derivative financial instruments utilised by the group comprise interest rate swaps and forward foreign exchange contracts. All such instruments are used for hedging
purposes to manage the risk profile of an existing underlying exposure of the group in line with the group’s risk management policies which are set out in the operating 
and financial review on page 29. Amounts payable or receivable in respect of interest rate swaps are recognised as adjustments to interest expense over the period of the
contract. Exchange gains and losses on forward foreign exchange contracts are recognised on maturity of the underlying transaction. Profits or losses arising on the early
termination of interest rate swap transactions and forward foreign exchange contracts are recognised when the agreement is terminated or transferred to a third party. 
Goodwill
Purchased goodwill arising on consolidation, representing the excess of the purchase price over the fair value of net assets acquired, is capitalised in the year in which it arises
and is amortised on a straight-line basis over its estimated useful economic life. The estimated useful economic life is calculated having due regard to the period over which
the group expects to derive economic benefit from the assets. For acquisitions made since 1 January 1998, the estimated useful economic life does not exceed 20 years.
Prior to 1 January 1998, as a result of accounting policies in force at that time, purchased goodwill arising on consolidation was written-off against reserves in the year of acquisition.
T angible operating assets
Operational land, pre-1 January 1999, is held at the 31 December 1998 valuation with subsequent additions being valued at cost and transfers from tangible property assets
being made at the carrying value of the last balance sheet date. All other tangible operating assets are carried at cost adjusted for subsequent additions and disposals. 
Finance costs directly attributable to the construction of certain major additions to fixed assets are capitalised as part of the cost of those assets. 
Depreciation is provided on a straight-line basis with reference to the expected useful lives of the various types of asset. These lives range up to a maximum of 50 years for
capital dredging costs, dock structures, roads, quays and buildings; up to 30 years for floating craft; and between two and 30 years for plant and equipment. Freehold land
is not depreciated. Significant capital investment grants are credited to the profit and loss account over the useful lives of the assets concerned. The balance of such grants
not yet transferred to the profit and loss account is included as deferred income. Any transfers of tangible operating assets to investment properties are reflected net of any
unamortised capital investment grants. 
T angible property assets 
Investment properties and land held for development are stated at open market value. In accordance with SSAP 19 – Accounting for Investment Properties, revaluations are
conducted annually with any surpluses or deficits being transferred to the revaluation reserve. No provision is made for depreciation of freehold properties or for amortisation
of leasehold properties held on leases having more than 20 years unexpired. This departure from the requirements of the Companies Act 1985, which requires all properties
to be depreciated, is, in the opinion of the directors, necessary for the financial statements to show a true and fair view in accordance with applicable accounting standards. 35
1 Accounting policies  (continued)
T angible property assets  (continued)
The depreciation or amortisation (which would, had the provisions of the Act been followed, have reduced profit for the year) is only one of the factors reflected in the annual
valuation and the amount attributable to this factor cannot reasonably be separately identified or quantified. 
Transfers of property from fixed assets to current assets – property developments and land held for sale – are made at the higher of market value on the date of transfer or
the carrying value at the last balance sheet. This departure from the requirements of the Companies Act 1985, which requires transfer at the lower of cost and net realisable
value, is, in the opinion of the directors, necessary for the financial statements to show a true and fair view in accordance with applicable accounting standards. Had the
provisions of the Act been followed, the net assets of the group would be artificially reduced on transfer, whereas in reality, such a reduction has not occurred; and the profit
on disposal calculated by reference to a lower carrying value, would give rise to an artificially high profit. Transfers of property from property developments to fixed assets are
made at the lower of cost and estimated net realisable value as at the date of transfer. 
Leased assets 
At the inception of finance leases, the capital cost of the asset is included in the financial statements both as a tangible operating asset and as an obligation to pay future
rentals. Amounts payable in respect of operating leases are charged to the profit and loss account on a straight-line basis over the term of the lease.
Property developments and land held for sale 
Property developments and land held for sale are stated at the lower of cost (or transfer value if transferred from tangible operating assets or tangible property assets) and
net realisable value.
Retirement benefits
The group operates a number of defined benefit pension schemes. The majority of the scheme members are in funded schemes with the assets being held in separate
trustee-administered funds. 
In accordance with SSAP 24 – Accounting for Pension Costs, the expected cost of pensions in respect of the group’s defined benefit pension schemes is charged to the profit
and loss account so as to spread the cost of pensions over the service lives of employees in the schemes. Past service surpluses and other variations from the regular cost are
spread over the expected remaining service lives of current employees in the schemes. The pension cost is assessed in accordance with the advice of independent actuaries. 
Provision is maintained for unfunded retirement benefit arrangements less attributable taxation on a full provision basis. Interest at the rate recommended by the actuaries is
credited to the provision and charged to the profit and loss account. Payments are charged to the provision. 
The group also contributes to a number of defined contribution pension schemes. These costs are charged to the profit and loss account in the year in which contributions
become payable.
The group has included the transitional disclosures required under FRS 17 – Retirement Benefits in note 5b.
Taxation
Current tax, including UK corporation tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially
enacted by the balance sheet date.
Other than for timing differences arising due to capital losses, and property revaluation gains, deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date. Timing differences are differences between the group’s taxable profit and its results as stated in the financial
statements that arise from the inclusion of gains and losses in tax computations in periods different from those in which they are recognised in the financial statements. The
group does not provide for timing differences arising from capital losses, as the future utilisation of these losses cannot be assessed with reasonable certainty. No deferred
tax is provided in relation to property revaluation gains, as the group expects any crystallised gains to be offset by brought-forward losses.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and
laws that have been enacted or substantially enacted by the balance sheet date. The group’s deferred tax provision is measured on an undiscounted basis.
Foreign currencies
Transactions of UK companies denominated in foreign currencies are translated into sterling at the rates ruling at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange ruling at that date. Where matching forward foreign exchange
contracts have been entered into, the rate specified in the relevant contract is used. These translation differences are recognised in the profit and loss account. 
The profit and loss accounts of foreign subsidiary undertakings are translated into sterling at average rates for the year; the balance sheets are translated into sterling at the
rates of exchange ruling at the balance sheet date. All exchange differences arising on consolidation are taken directly to reserves. All other translation differences are taken
to the profit and loss account, with the exception of differences on foreign currency borrowings to the extent that they are used to finance or provide a hedge against group
equity investments in foreign enterprises which are taken directly to reserves together with the exchange difference on the net investment in these enterprises.  36 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
2 Segmental analysis
Analysis of group turnover, profit on ordinary activities before interest and net assets by class of business and geographical segment are given below. Turnover is disclosed
by origin. There is no material difference between turnover by origin and turnover by destination.
UK USA T otal UK USA T otal
2002 2002 2002 2001 2001 2001
£m £m £m £m £m £m
Group turnover
Ports and transport
Existing operations 325.1 36.1 361.2 304.2 29.9 334.1 
Acquisitions 0.6 – 0.6 – – – 
Continuing operations 325.7 36.1 361.8 304.2 29.9 334.1 
Discontinued operations – 27.9 27.9 – 29.6 29.6 
325.7 64.0 389.7 304.2 59.5 363.7 
Property investment 7.3 2.0 9.3 8.8 2.0 10.8 
Property development 30.8 – 30.8 30.9 – 30.9 
Group turnover 363.8 66.0 429.8 343.9 61.5 405.4 
Profit on ordinary activities before interest
Ports and transport
Existing operations 141.6 1.5 143.1 137.2 0.4 137.6 
Acquisitions (0.2) – (0.2) – – – 
Continuing operations 141.4 1.5 142.9 137.2 0.4 137.6 
Discontinued operations – 3.6 3.6 – 3.0 3.0 
141.4 5.1 146.5 137.2 3.4 140.6 
Property investment 5.0 1.8 6.8 6.2 1.8 8.0 
Property development 12.0 – 12.0 13.0 – 13.0 
Share of operating profit in associates 10.5 – 10.5 8.5 – 8.5 
Total underlying operating profit 168.9 6.9 175.8 164.9 5.2 170.1 
Goodwill amortisation (note 12) (1.6) (1.5)
Exceptional items – administrative expenses (note 3) (5.5) – 
Total operating profit 168.7 168.6 
Profit on disposal of discontinued operations (notes 3 and 26) 7.4 – 
Profit on sale of fixed assets (note 3) 0.7 0.6 
Profit on ordinary activities before interest 176.8 169.2 37
2 Segmental analysis (continued)
UK USA T otal UK USA T otal
2002 2002 2002 2001* 2001* 2001*
£m £m £m £m £m £m
Net assets
Net operating assets
Ports and transport 1,355.2 42.5 1,397.7 1,308.0 46.5 1,354.5
Property investment 73.2 9.4 82.6 83.0 10.3 93.3 
Property development 39.2 – 39.2 47.2 – 47.2 
Share of associated undertakings 49.3 – 49.3 45.8 – 45.8 
Continuing operations 1,516.9 51.9 1,568.8 1,484.0 56.8 1,540.8 
Discontinued operations – – – – 14.4 14.4
1,516.9 51.9 1,568.8 1,484.0 71.2 1,555.2 
Less: group items
Goodwill (note 12) 15.4 23.9 
Net borrowings (note 21) (450.1) (508.9)
Net liabilities (124.8) (111.8)
Net assets 1,009.3 958.4 
The group’ s share of associated undertakings is stated after deducting the group’ s share of net borrowings of £22.1 million (2001: £19.2 million).
* Restated for the effects of Financial Reporting Standard 19 – Deferred T ax (note 34).
3 Exceptional items
Towards the end of 2002, the group undertook a review of its cost base which resulted in a £5.5 million restructuring charge. This has been recorded as an exceptional item
within administrative expenses.
Profit on disposal of discontinued operations includes a £7.8 million profit on the sale of AMPORTS USA’s Aviation division. The group entered into a conditional sale
agreement on 29 July 2002 with subsidiaries of Macquarie Global Infrastructure Funds, the sale being conditional upon obtaining consents from the relevant airport and
regulatory authorities. All of these consents, together with the cash proceeds of £32.0 million (US$50.0 million), were received by 13 December 2002.
In addition, an exceptional charge of £0.4 million arose on the closure of Southern Emergency Vehicles, a small vehicle-modification business located in the USA.
Profit arising on the sale of fixed assets totalled £0.7 million (2001: £0.6 million), which includes £0.5 million (2001: nil) relating to an insurance claim resulting from a
damaged pier in the USA.
The exceptional tax credit arising from the above items totalled £0.7 million (2001: nil), comprising a £1.7 million credit for the restructuring charge in respect of the group’s
review of its cost base and a £1.0 million charge relating to the sale of AMPORTS USA’s Aviation division. 38 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
4 Profit before interest and taxation
2002 2001
Profit before interest and taxation is after charging/(crediting): £m £m
Depreciation (note 13)
Owned tangible fixed assets 23.5 21.9 
Leased tangible fixed assets 1.6 1.8 
Grant amortisation (note 24) (0.6) (0.7)
Operating lease rentals
Plant and machinery 3.7 3.5 
Property 5.6 5.3 
Auditors’ remuneration – statutory audit (including expenses) 0.3 0.3 
Fees paid to PricewaterhouseCoopers for non-audit services in the UK totalled £0.3 million (2001: £0.4 million) comprising £0.2 million (2001: £0.1 million) for taxation
services and £0.1 million (2001: £0.1million) for internal audit services. There were no fees paid for corporate transactions (2001: £0.2 million).
The statutory audit fee above includes £45,000 (2001: £45,000) in respect of the company.
There were no fines payable in respect of breaches of section 3 of the Health and Safety at Work, etc. Act 1974 (2001: £0.4 million).
5 Retirement benefits
The group continues to account for pensions in accordance with Statement of Standard Accounting Practice (SSAP) 24 – Accounting for Pension Costs and the
disclosures given in (a) are those required by that standard. The group is continuing to apply the transitional disclosure requirements of Financial Reporting Standard (FRS)
17 – Retirement Benefits (see (b) below).
a SSAP 24  –  Accounting for Pension Costs
The group participates in a number of pension schemes, principally in the UK. The major scheme is a funded defined benefits scheme – The Associated British Ports Group
Pension Scheme (ABPGPS). The defined benefits section of this scheme was closed to new members with effect from 1 April 2002. New members joining ABPGPS from
1 April 2002 are offered membership of a defined contributions section which at 31 December 2002 constituted less than 0.1% of the total asset value. The assets of the
group’s pension schemes are held in trust funds independent of its finances.
For ABPGPS, the pension costs under SSAP 24 have been assessed in accordance with the advice of a firm of actuaries, Mercer Human Resource Consulting.
The most recent valuation of ABPGPS, the group’s largest funded defined benefit scheme, was undertaken as at 31 December 2000. The market value of the assets of the
scheme at the valuation date was £484.4 million. The value of the assets represented 137 per cent of the benefits which had accrued to members after allowing for future
expected increases in earnings and certain benefit improvements. The regular cost has been assessed on the basis of the projected unit method. The assets of the scheme
have been taken into account at their market value. Consistent with this, the liabilities were valued using financial assumptions derived from yields on index-linked and fixed-
interest government securities. In particular, it was assumed that pensions would increase by 2.5 per cent per annum (the implied rate of inflation), salaries would increase
by 4.0 per cent per annum and investments would yield 5.0 per cent per annum (4.5 per cent per annum post-retirement on accrued liabilities).
In deriving the pension costs under SSAP 24, the surplus in the scheme is being spread over the future working lives of existing members. 39
5 Retirement benefits (continued)
2002 2001
Analysis of pension credit: £m £m
Group scheme
Amortisation of past service surpluses including interest on the balance sheet prepayment 13.9 13.7 
Regular annual cost of providing current and future service benefits (7.2) (5.7)
T otal added to prepayment of pension contributions 6.7 8.0 
Cost of pension benefits in other group schemes (1.2) (1.4)
Pension credit 5.5 6.6 
No employer’ s contributions were made to ABPGPS during the year and based on the most recent valuation of ABPGPS the group is maintaining its contribution holiday.
b FRS 17 –  T ransitional disclosures
The pension costs reported in 5a above have been calculated in accordance with SSAP 24. Under the transitional arrangements of FRS 17 – Retirement Benefits, the
group is disclosing the following information that would have been reported had the group calculated its pension costs for the year ended 31 December 2002 and valued 
its scheme assets and liabilities as at 31 December 2002 in accordance with FRS 17.
(i) The latest formal revaluation of the scheme was carried out as at 31 December 2000. The valuation of the liabilities detailed below has been derived by projecting
forward the position as at 31 December 2000 and has been performed by an independent actuary, Mercer Human Resource Consulting. FRS 17 gives the present
value of pension liabilities by discounting pension commitments (including an allowance for salary growth), using a AA corporate bond yield.
(ii) The major financial assumptions used by the actuaries under FRS 17 were as follows:
As at As at
31 December 31 December
2002 2001
Financial assumptions: %%
Inflation 2.35 2.50 
Rate of increase in pensionable salaries 3.85 4.00 
Rate of increase for pensions in payment 2.35 2.50 
Rate of increase for deferred pensions 2.35 2.50 
Discount rate 5.50 5.75 
(iii) The assets and liabilities of the pension scheme, along with the expected rates of return on the scheme’s assets under FRS 17 at 31 December 2002 and 31
December 2001, were as follows:
As at As at
31 December 2002 31 December 2001
%£m % £m
Equities 7.0 174.5 7.0 233.1 
Bonds 5.1 193.7 5.4 182.3 
Cash and other investments 4.5 17.6 5.0 8.3 
T otal market value of pension scheme assets 385.8 423.7
Present value of pension scheme liabilities (352.0) (320.0)
Surplus in the pension scheme 33.8 103.7
Deferred tax liability (10.1) (31.1)
Net pension scheme asset under FRS 17 23.7 72.6 40 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
5 Retirement benefits (continued)
(iv) If the amounts set out in 5b (iii) had been recognised in the financial statements, the group’s net assets and profit and loss account reserve under FRS 17 at 31
December 2002 and 31 December 2001 would be as follows:
As at As at
31 December 31 December
2002 2001*
Net assets: £m £m
Net assets (note 2) 1,009.3 958.4 
Amount representing SSAP 24 pension prepayment (note 17) (82.9) (76.5)
Deferred tax liability on SSAP 24 pension prepayment (note 23) 24.9 22.9 
Pension scheme asset net of deferred tax liability under FRS 17 (note 5b (iii)) 23.7 72.6 
Net assets – as adjusted under FRS 17 975.0 977.4 
As at As at
31 December 31 December
2002 2001*
Profit and loss account reserve: £m £m
Profit and loss account reserve (note 28) 185.0 127.2 
Amount representing SSAP 24 pension prepayment (note 17) (82.9) (76.5)
Deferred tax liability on SSAP 24 pension prepayment (note 23) 24.9 22.9 
Pension scheme asset net of deferred tax liability under FRS 17 (note 5b (iii)) 23.7 72.6 
Profit and loss account reserve – as adjusted under FRS 17 150.7 146.2 
* Restated for the effects of Financial Reporting Standard 19 – Deferred Tax (note 34).
(v) The following amounts would have been recognised in the group’s profit and loss account and the statement of group total recognised gains and losses in respect of
pension costs under FRS 17 for the year ended 31 December 2002:
2002
£m
Operating profit
Current service cost (7.1)
Past service cost –
T otal charge to operating profit (7.1)
Finance income
Expected returns on pension scheme assets 26.6
Interest on pension scheme liabilities (18.6)
Net credit to finance income 8.0
Pension scheme credit under FRS 17 0.9 41
5 Retirement benefits (continued)
2002
Statement of group total recognised gains and losses: £m
Actual return less expected return on pension scheme assets (71.2)
Actual return less expected return on pension scheme liabilities 5.4
Changes in assumptions underlying the present value of the pension scheme liabilities (5.0)
Actuarial loss recognised in statement of group total recognised gains and losses under FRS 17 (70.8)
(vi) The movement in the pension scheme surplus and details of experience gains and losses under FRS 17 during the year ended 31 December 2002 were as follows:
2002
Movement in the pension scheme surplus during the year: £m
Surplus in the pension scheme at 1 January 2002 under FRS 17 103.7 
Movement in year:
Current service cost (7.1) 
Employer contributions –
Past service costs – 
Other financial income 8.0
Actuarial loss recognised in statement of group total recognised gains and losses (70.8)
Surplus in the pension scheme at 31 December 2002 under FRS 17 33.8
2002 2002
Details of experience gains and losses in the year ended 31 December 2002: £m %
Actual return less expected return on pension scheme assets (71.2) (18)
Actual return less expected return on pension scheme liabilities 5.4 2
Actuarial loss recognised in statement of group total recognised gains and losses (70.8) (20) 42 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
6 Net interest payable Fixed Variable
rate rate T otal T otal
2002 2002 2002 2001
£m £m £m £m
Interest payable and similar charges
Eurobonds 28.0 – 28.0 28.0 
Bank loans 0.4 7.4 7.8 9.1 
Bank overdraft and other borrowings – 0.2 0.2 0.3 
Finance leases 1.0 – 1.0 1.2 
Amounts payable in respect of loans from associated undertakings – – – 0.2 
Liabilities for retirement benefits (note 23) – 0.3 0.3 0.3 
Other 0.4 0.3 0.7 1.2 
Less: finance costs capitalised on payments for fixed assets – (1.1) (1.1) (1.2)
29.8 7.1 36.9 39.1 
Interest receivable and similar income – (0.7) (0.7) (0.4)
Total group 29.8 6.4 36.2 38.7 
Share of interest in associates 1.2 0.3 1.5 1.0 
31.0 6.7 37.7 39.7
The Bank of England base rate is used as the basis for calculating finance costs capitalised as being directly attributable to the construction of certain major additions to
fixed assets. None of the finance costs capitalised have been or will be deductible against corporation tax (2001: £0.2 million).
7 Directors and employees
Full details of directors’ emoluments, including shareholdings and options, are shown in the remuneration report on pages 68 and 69.
2002 2001
£m £m
Staff costs
Wages and salaries 90.1 79.3 
Social security costs 7.2 6.7 
Other pension costs – net credit (note 5a) (5.5) (6.6)
91.8 79.4 
2002 2001
Number Number
Monthly average number of persons employed
Ports and transport 3,492 3,206 
Property 44 48 
3,536 3,254  43
8 Taxation on profit on ordinary activities 2002 2001*
£m £m
UK corporation tax at 30.0% based on the profit for the year 27.0 28.6 
Double taxation relief – (0.4)
T otal UK taxation charge 27.0 28.2 
Overseas taxation – current year 2.4 (1.3)
Deferred taxation (note 23) 6.3 8.3 
Total group 35.7 35.2 
Share of taxation of associates 2.3 1.3 
38.0 36.5 
The exceptional tax credit included within the above totalled £0.7 million (2001: nil), comprising £1.7 million credit for restructuring charge in respect of the group’s review 
of its cost base and £1.0 million charge for the sale of AMPORTS USA’s Aviation division.
The tax charge for the year is lower (2001: lower) than the standard rate of taxation in the UK of 30.0%. The differences are explained below:
2002 2001*
£m £m
Profit on ordinary activities before taxation 139.1 129.5 
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 30.0% 41.7 38.9 
Effects of:
Exceptional tax credit (0.7) –
Expenses not deductible for tax purposes 1.5 1.6
Utilisation of capital losses (4.5) (4.0)
Actual tax charge for the group 38.0 36.5 
* Restated for the effects of Financial Reporting Standard 19 – Deferred Tax (note 34).
9Profit attributable to shareholders
The company has not presented its own profit and loss account as permitted by section 230 of the Companies Act 1985. The parent company’s result for the financial year 
amounted to a profit of £75.4 million (2001: £98.2 million). 44 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
10 Dividends 2002 2001
£m £m
Interim dividend paid of 6.5p (2001: 6.0p) per ordinary 25p share 21.4 20.2 
Proposed final dividend of 8.25p (2001: 7.75p) per ordinary 25p share 27.1 25.2 
48.5 45.4 
If approved, the final dividend would be payable on 1 May 2003 to shareholders on the register at the close of business on 4 April 2003.
11 Earnings per share
The calculation of the earnings per share is based on 327.0 million (2001: 334.2 million) ordinary shares being the weighted average number of shares in issue and
ranking for dividend during the year.
The directors consider that underlying earnings per share is a more appropriate basis for comparing performance between periods than basic earnings per share. Figures
calculated on this basis have been provided to show the effect of excluding goodwill amortisation, exceptional administrative expenses, profit on disposal of discontinued
operations and profit on sale of fixed assets.
Profit Earnings per share
2002 2001* 2002 2001*
Reconciliation of the profit used for calculating the basic and underlying earnings per share: £m £m p p
Profit on ordinary activities after taxation attributable to shareholders – basic earnings per share 101.1 93.0 30.9 27.8 
Goodwill amortisation (note 12) 1.6 1.5 0.5 0.5 
Exceptional items – administrative expenses (note 3) 5.5 – 1.7 – 
Profit on disposal of discontinued operations (notes 3 and 26) (7.4) – (2.3) – 
Profit on sale of fixed assets (note 3) (0.7) (0.6) (0.2) (0.2)
Attributable tax (0.7) – (0.2) – 
Profit on ordinary activities after taxation attributable to shareholders – underlying earnings per share 99.4 93.9 30.4 28.1 
Number of shares Earnings per share
2002 2001 2002 2001*
Reconciliation of weighted average number of shares used for calculating basic and diluted earnings per share: mm p p
Weighted average number of shares – basic earnings per share 327.0 334.2 30.9 27.8
Dilution arising from share option schemes 3.0 3.7 (0.3) (0.3)
Weighted average number of shares – diluted earnings per share 330.0 337.9 30.6 27.5
* Restated for the effects of Financial Reporting Standard 19 – Deferred Tax (note 34). 45
12 Intangible assets Goodwill
£m
Cost
At 1 January 2002 27.1 
Disposal of business (note 26) (7.8)
Exchange adjustments (0.6)
At 31 December 2002 18.7 
Amortisation
At 1 January 2002 3.2 
Charge for year 1.6 
Disposal of business (note 26) (1.4)
Exchange adjustments (0.1) 
At 31 December 2002 3.3 
Net book value
At 31 December 2001 23.9 
At 31 December 2002 15.4 
13 Tangible operating assets Dock
structures, Capital
Operational roads, quays Floating Plant and works in
land Buildings and dredging craft equipment progress T otal
£m £m £m £m £m £m £m
Cost or valuation
At 1 January 2002 358.9 88.6 337.3 45.1 153.2 45.6 1,028.7 
Additions 0.1 2.6 10.7 0.1 6.6 47.9 68.0 
Acquisition of a business (note 25) – – – – 0.3 – 0.3 
T ransfers within tangible operating assets (0.6) 7.1 12.1 0.2 5.0 (23.8) – 
T ransfers to land held for sale (0.3) – – – – – (0.3) 
T ransfers from/(to) tangible property assets (note 14) 5.2 6.2 (0.3) – 0.1 – 11.2 
Disposals (0.3) (1.1) (0.2) (0.1) (4.1) (0.1) (5.9)
Disposal of business (note 26) – (9.5) (1.5) – (1.3) (0.1) (12.4)
Exchange adjustments (1.8) (2.2) (1.9) – (0.3) (0.2) (6.4)
At 31 December 2002 361.2 91.7 356.2 45.3 159.5 69.3 1,083.2  46 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
13 Tangible operating assets (continued) Dock
structures, Capital
Operational roads, quays Floating Plant and works in
land Buildings and dredging craft equipment progress T otal
£m £m £m £m £m £m £m
Depreciation
At 1 January 2002 – 21.9 108.8 17.9 82.1 – 230.7 
T ransfers within tangible operating assets – (0.1) – – 0.1 – – 
T ransfers from/(to) tangible property assets (note 14) – 0.2 0.2 – 0.1 – 0.5
Charge for year – 3.3 9.6 2.4 9.8 – 25.1 
Disposals – (0.3) (0.2) (0.1) (3.3) – (3.9) 
Disposal of business (note 26) – (0.9) (0.1) – (0.8) – (1.8) 
Exchange adjustments – (0.6) (0.7) – (0.1) – (1.4) 
At 31 December 2002 – 23.5 117.6 20.2 87.9 – 249.2 
Net book value
At 31 December 2001 358.9 66.7 228.5 27.2 71.1 45.6 798.0 
At 31 December 2002 361.2 68.2 238.6 25.1 71.6 69.3 834.0 
All tangible operating assets are stated at cost with the exception of operational land. Operational land is included at valuation as at 31 December 1998, as permitted
under FRS 15 – Tangible Fixed Assets, or, if transferred from property assets after 31 December 1998, at the carrying value of the last balance sheet date prior to transfer.
The group’s operational land and buildings held at 31 December 1998 were valued as at that date on the basis of existing-use value in accordance with the Appraisal and
Valuation Manual issued by The Royal Institution of Chartered Surveyors. The valuations were carried out by independent valuers Healey & Baker, International Real Estate
Consultants. The total valuation amounted to £507.5 million, of which £326.7 million was apportioned to land, representing an excess of £291.2 million over its historical
book cost at that date.
Operational land, buildings and dock structures are held freehold with the exception of short leasehold properties with an historic net book value of £1.9 million (2001:
£2.8 million).
Floating craft includes assets held under finance leases with a book cost and accumulated depreciation at 31 December 2002 totalling £29.9 million (2001: £29.7 million)
and £12.5 million (2001: £10.9 million) respectively. The depreciation charge for the year includes £1.6 million (2001: £1.7 million) in respect of these assets.
Plant and equipment includes assets held under finance leases with a book cost and accumulated depreciation at 31 December 2002 totalling £0.5 million (2001: £0.6
million) and £0.5 million (2001: £0.5 million) respectively. There was no depreciation charge for the year in respect of these assets (2001: £0.1 million). 
The cost of tangible operating assets includes £7.8 million (2001: £6.7 million) of cumulative finance costs capitalised.
Costs in respect of Dibden Terminal total £35.4 million (2001: £24.0 million), of which £30.2 million (2001: £18.8 million) is included within capital works in progress and
£5.2 million (2001: £5.2 million) is included within land at ports held for development (note 14). The public inquiry into the group’s application to develop Dibden Terminal
commenced in November 2001 and was completed in December 2002 with the government’s decision expected in late 2003 or 2004. The group remains confident
about the prospects for this project; however, if the government’s decision results in the project not proceeding, costs relating to this project will be written-off to the profit
and loss account in the year in which a decision not to proceed is taken.  47
14 Tangible property assets Land 
Port-related Other at ports
investment investment held for
properties properties development T otal
£m £m £m £m
At 1 January 2002 494.4 59.2 34.9 588.5 
Additions 5.7 – – 5.7 
T ransfers within tangible property assets 1.5 (0.4) (1.1) – 
T ransfers to land held for sale (0.3) (4.3) (1.1) (5.7)
T ransfers to tangible operating assets (note 13) (8.6) – (2.1) (10.7)
Disposals – (1.2) (1.5) (2.7)
Exchange adjustments – (0.6) (0.2) (0.8)
492.7 52.7 28.9 574.3
(Deficit)/surplus on revaluation (note 28) (6.3) 0.8 – (5.5) 
At 31 December 2002 486.4 53.5 28.9 568.8 
Historic cost at 31 December 2002 185.6 21.9 14.0 221.5 
Tangible property assets, all of which are shown at valuation as at 31 December 2002, have been valued on the basis of open market value in accordance with the Appraisal
and Valuation Manual issued by The Royal Institution of Chartered Surveyors. The valuations were carried out by Phillip Williams FRICS, Group Property Director, Associated
British Ports. All the above properties are owned freehold with the exception of £0.9 million (2001: £0.6 million) of port-related investment properties which are owned leasehold.
The cost of tangible property assets includes £0.3 million (2001: £0.3 million) of cumulative finance costs capitalised.
15 Investments Group Company
Interest in
associated Own Subsidiary Own
undertakings shares T otal undertakings shares T otal
£m £m £m £m £m £m
At 1 January 2002
as previously reported 50.2 2.2 52.4 974.4 2.2 976.6 
prior year adjustment (note 34) (4.4) – (4.4) (54.5) – (54.5)  
as restated 45.8 2.2 48.0 919.9 2.2 922.1 
Share of profit for the year 6.7 – 6.7 – – – 
Dividends receivable (3.2) – (3.2) – – – 
Investment in subsidiary undertakings – – – 0.1 – 0.1
Surplus arising on revaluation of subsidiary undertakings (note 28) – – – 18.7 – 18.7
Other movements – (1.3) (1.3) – (1.3) (1.3)
At 31 December 2002 49.3 0.9 50.2 938.7 0.9 939.6 
In presenting the figures for the company’s investments in subsidiary and associated undertakings, the company has adopted the alternative accounting rules under the
terms of schedule 4, part II, section C to the Companies Act 1985 and revalued these assets at 31 December 2002 to directors’ valuations.
The company has an Employee Share Ownership Trust (ESOT) to acquire from the market and hold shares to meet the exercise of options arising from grants under the
Executive Share Option Scheme as an alternative to the issue of new shares. At 31 December 2002, the ESOT held 0.3 million shares (2001: 0.8 million) with a nominal
value of £0.1 million (2001: £0.2 million). The market value of these shares at 31 December 2002 was £1.3 million (2001: £3.4 million). The dividends on the shares held
have been waived by the trustees with the exception of 0.01p per share. 48 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
16 Property developments and land held for sale
Property developments and land held for sale include £4.3 million (2001: £4.8 million) of land held for future development and £34.0 million (2001: £39.4 million) of land
and completed developments held for sale.
Property developments and land held for sale are stated at the lower of their cost or transfer value, and net realisable value as determined by the directors at 31 December 2002. The
historic cost of property developments and land held for sale totalled £33.0 million (2001: £36.9 million) and includes £0.2 million (2001: £0.2 million) of finance costs capitalised.
17 Debtors Group Company
2002 2001 2002 2001
£m £m £m £m
Due within one year
T rade debtors 54.1 53.8 – – 
Amounts owed by subsidiary undertakings – – 549.2 563.6 
Amounts owed by associated undertakings 7.1 7.0 – – 
Other debtors 10.1 10.0 0.4 0.4 
Corporation tax recoverable 3.2 7.5 – – 
Prepayments and accrued income 14.8 12.7 – 0.1 
Property completions due 4.1 6.3 – – 
93.4 97.3 549.6 564.1 
Due after one year
Other debtors – 0.3 – – 
Prepayment of pension contributions 82.9 76.5 – – 
82.9 76.8 – – 
176.3 174.1 549.6 564.1 
18 Cash and short-term deposits Group Company
2002 2001 2002 2001
£m £m £m £m
Short-term deposits 4.9 2.9 – – 
Cash at bank and in hand 1.5 3.1 – – 
6.4 6.0 – – 
Liquid resources comprise short-term deposits with banks with maturity dates between seven days and 12 months. 49
19 Creditors – amounts falling due within one year Group Company
2002 2001 2002 2001
£m £m £m £m
Borrowings
Bank overdraft 1.9 3.2 0.7 1.8 
Loan notes – unsecured – 1.6 – – 
Bank loans 2.2 2.0 – – 
Obligations under finance leases 3.4 3.2 – – 
7.5 10.0 0.7 1.8 
Other
T rade creditors 21.4 23.3 – – 
Amounts owed to associated undertakings 1.2 0.2 – – 
Other creditors 13.9 16.5 – – 
T axation and social security 21.8 20.9 – – 
Dividends 27.2 25.3 27.2 25.3 
Accruals 36.9 34.8 11.0 9.4 
129.9 131.0 38.9 36.5 
20 Creditors – amounts falling due after more than one year Group Company
2002 2001 2002 2001
£m £m £m £m
Borrowings
Eurobonds 2008 (6 
5
/8%) 120.0 120.0 120.0 120.0 
Eurobonds 2011 (11 
7
/8%) 100.0 100.0 100.0 100.0 
Eurobonds 2015 (10 
7
/8%) 75.0 75.0 75.0 75.0 
Bank loans – unsecured 147.9 200.7 147.3 197.9 
Obligations under finance leases – secured 7.5 11.0 – –
Less: deferred borrowing costs to be amortised (1.4) (1.8) (1.3) (1.6)
449.0 504.9 441.0 491.3 
Other
Accruals 0.5 0.5 – –
449.5 505.4 441.0 491.3 
The bank loans are repayable between 2004 and 2006. Of the unsecured bank loans, £0.6 million (2001: £2.8 million) are repayable by instalments and bear interest at
fixed rates of between 10.3 per cent and 12.35 per cent. The remaining £147.3 million (2001: £197.9 million) bear interest linked to national inter-bank rates.
Obligations under finance leases are secured on related leased assets. 50 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
21 Group net borrowings 2002 2001
£m £m
Creditors – amounts falling due within one year (note 19) 7.5 10.0 
Creditors – amounts falling due after more than one year (note 20) 449.0 504.9 
456.5 514.9 
Less: cash and short-term deposits (note 18) (6.4) (6.0)
450.1 508.9 
The group’s share of net borrowings of associated undertakings not included in the balance sheet total £22.1 million (2001: £19.2 million).
An analysis of maturity of gross financial liabilities is given in note 22a.
22 Financial instruments
The group’s policies as regards derivatives and financial instruments are set out in the operating and financial review on page 29 and the accounting policies on page 34.
Short-term debtors and creditors have been excluded from these disclosures.
a Maturity profile of gross financial liabilities Finance Finance
Debt leases Other T otal Debt leases Other T otal
2002 2002 2002 2002 2001 2001 2001 2001
Amounts falling due: £m £m £m £m £m £m £m £m
Within one year or less, or on demand 4.1 3.4 6.1 13.6 6.8 3.2 0.8 10.8 
More than one year , but not more than two years 0.3 3.6 1.1 5.0 2.2 3.4 1.0 6.6 
More than two years, but not more than five years 147.0 3.8 1.6 152.4 197.5 7.6 0.9 206.0 
More than five years 294.3 – 3.4 297.7 294.2 – 2.7 296.9 
445.7 10.8 12.2 468.7 500.7 14.2 5.4 520.3 
Other gross financial liabilities comprise accruals due after more than one year of £0.5 million (2001: £0.5 million) and provisions – excluding deferred taxation – for retirement
benefits of £3.3 million (2001: £3.4 million), restructuring £5.5 million (2001: nil), onerous contracts £2.7 million (2001: £1.2 million) and other £0.2 million (2001: £0.3 million).
2002 2001
Undrawn committed borrowing facilities expiring: £m £m
Within one year or less 39.6 28.3 
More than two years 192.7 142.1 
232.3 170.4  51
22 Financial instruments (continued)
bInterest rate profile
The following interest rate profiles analysed by principal currency of the group’ s financial liabilities and assets are after taking into account interest rate swaps entered into by the group.
Other non- Other non-
Fixed Floating interest Fixed Floating interest
rate rate bearing T otal rate rate bearing T otal
2002 2002 2002 2002 2001 2001 2001 2001
Gross financial liabilities: £m £m £m £m £m £m £m £m
Sterling 307.8 116.7 8.9 433.4 316.6 126.8 2.0 445.4 
US dollar – 35.3 – 35.3 – 74.9 – 74.9 
307.8 152.0 8.9 468.7 316.6 201.7 2.0 520.3 
The weighted average interest rate for fixed rate financial liabilities is 9.4 per cent (2001: 9.4 per cent). The weighted average period for which the rate is fixed is 8.5 years
(2001: 9.4 years).
Interest on floating rate liabilities is based on the relevant national inter–bank rate and is fixed in advance for periods of up to six months.
Other Other
Floating non-interest Floating non-interest
rate bearing T otal rate bearing T otal
2002 2002 2002 2001 2001 2001
Gross financial assets: £m £m £m £m £m £m
Sterling 3.6 0.4 4.0 3.1 – 3.1 
US dollar 2.4 – 2.4 3.1 0.1 3.2 
6.0 0.4 6.4 6.2 0.1 6.3 
Gross financial assets comprise short-term deposits of £4.9 million (2001: £2.9 million), cash at bank and in hand of £1.5 million (2001: £3.1 million). At the year end there
were no other debtors due in more than one year (2001: £0.3 million).
Interest on floating rate deposits is based on the relevant national inter-bank rate and is fixed in advance for periods of up to six months. Other non-interest bearing
financial assets comprise current bank accounts.
c Fair values of financial assets and liabilities
Carrying Estimated Carrying Estimated
amount fair value amount fair value
2002 2002 2001 2001
Gross financial liabilities: £m £m £m £m
Debt 445.7 521.8 500.7 556.5 
Finance leases 10.8 11.3 14.2 15.0 
Other liabilities 12.2 12.2 5.4 5.4 
468.7 545.3 520.3 576.9 
The carrying value of financial assets equates to the estimated fair value for both 2002 and 2001.
Market values have been used to determine the fair value of all foreign currency contracts and listed instruments. The fair value of other items has been calculated by
discounting expected cash flows at prevailing interest rates at the year end. 52 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
22 Financial instruments (continued)
d Hedging
As explained in the operating and financial review on page 29, the group’s policy is to hedge certain interest rate and foreign exchange risks by using interest rate swaps
and forward foreign currency contracts.
2002 2001
Unrecognised gains and losses on instruments used for hedging and the movements therein: £m £m
Unrecognised losses at 1 January (0.5) – 
Losses arising during the year that were not recognised (0.7) (0.5)
Unrecognised losses on hedges at 31 December (1.2) (0.5)
Losses expected to be recognised in next financial year (0.3) – 
Losses expected to be recognised after one year (0.9) (0.5)
Unrecognised losses on hedges at 31 December (1.2) (0.5)
e Currency exposures
The extent to which the group’s operating entities hold monetary assets and liabilities in currencies other than in their local currency has been reviewed. Taking into
account the impact of forward foreign exchange currency contracts, the group had no material profit and loss exposure to foreign exchange gains or losses on monetary
assets and liabilities denominated in foreign currency as at 31 December 2002.
23 Provisions for liabilities and charges Group
Retirement Deferred Onerous
benefits taxation Restructuring contracts Other T otal
£m £m £m £m £m £m
At 1 January 2002
as previously reported 3.4 24.0 – 1.2 0.3 28.9 
prior year adjustment (note 34) – 50.1 – – – 50.1 
as restated 3.4 74.1 – 1.2 0.3 79.0 
Foreign exchange – (0.1) – – – (0.1)
Disposal of business (note 26) – – – – 0.4 0.4 
Charge for year 0.1 6.3 5.5 1.9 – 13.8 
Utilised in year (0.5) – – (0.4) (0.5) (1.4)
Interest 0.3 – – – – 0.3 
At 31 December 2002 3.3 80.3 5.5 2.7 0.2 92.0  53
23 Provisions for liabilities and charges (continued)
Retirement benefits
The provision for retirement benefits represents the present value estimated on an actuarial basis, net of attributable taxation of £0.9 million (2001: £0.9 million) of liabilities
in respect of pensions and allowances of former employees of predecessor undertakings and of unfunded and non-tax-exempt pension arrangements. An independent
actuarial assessment as at 31 December 2000 confirmed that, apart from annual interest, no additional provision is required in respect of these liabilities.
Deferred taxation Group
2002 2001*
£m £m
Excess of capital allowances over depreciation 54.8 50.1 
Retirement benefits 24.9 22.9 
Other 0.6 1.1 
80.3 74.1 
No potential or actual liability is shown in respect of fixed assets – property gains, which are more than covered by capital losses.
Restructuring
The restructuring provision relates to the group’s review of its cost base (see note 3).
Onerous contracts
The provision for onerous contracts represents property leases where the unavoidable costs under the lease exceed the economic benefit.
Other
Other provisions relate to the closure costs of Southern Emergency Vehicles, a small vehicle-modification business located in the United States.
* Restated for the effects of Financial Reporting Standard 19 – Deferred Tax (note 34).
24 Deferred income
Group
2002 2001
Movements on capital investment grants are set out below: £m £m
Balance not yet credited to profit and loss account at 1 January 8.9 9.3 
Grants receivable 0.4 0.3 
9.3 9.6 
Credited to profit and loss account (0.6) (0.7)
Balance not yet credited to profit and loss account at 31 December 8.7 8.9  54 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
25 Acquisition
On 19 April 2002, the group acquired the business and operating assets of Hams Hall Railfreight Terminal from Parsec of Europe Limited for a cash consideration of £0.3 million.
Acquisition Fair value
balance Fair value to the
sheet adjustments group
Net assets acquired: £m £m £m
T angible operating assets 0.6 (0.3) 0.3 
Consideration 0.3 
Fair value adjustments comprise the write-down of tangible operating assets to net realisable value at the date of acquisition. 
26 Disposal of AMPORTS USA’s Aviation division and closure of Southern Emergency Vehicles
Profit on disposal of discontinued operations includes £7.8 million in respect of the sale of AMPORTS USA’s Aviation division. The group entered into a conditional sale
agreement on 29 July 2002 with subsidiaries of Macquarie Global Infrastructure Funds, the sale being conditional upon obtaining consents from the relevant airport and
regulatory authorities. All of these consents, together with the cash proceeds of £32.0 million (US$50.0 million), were received by 13 December 2002. In addition, a
charge of £0.4 million arose on the closure of Southern Emergency Vehicles, a small vehicle-modification business located in the USA.
Net assets disposed: £m 
Intangible assets (note 12) 6.4 
T angible fixed assets (note 13) 10.6
Net current assets (excluding cash) 1.5 
18.5 
Disposal costs 5.7
24.2 
Profit on disposal before taxation 7.8 
Satisfied by cash 32.0
Cash flow from sale of subsidiary undertakings of £29.4 million is stated net of disposal costs paid of £2.6 million. In the period up to its date of disposal, AMPORTS
USA’s Aviation division generated turnover of £26.5 million, incurred cost of sales of £21.9 million and administrative expenses of £0.9 million, giving rise to an operating
profit of £3.7 million. In the period up to its date of closure, Southern Emergency Vehicles generated turnover of £1.4 million and incurred cost of sales of £1.5 million,
giving rise to an operating loss of £0.1 million. 55
27 Share capital 2002 2001
£m £m
Authorised
500,000,000 ordinary shares of 25p 125.0 125.0 
Issued, called-up and fully paid
328,123,684 (2001: 326,203,394) ordinary shares of 25p 82.0 81.6 
In 2001, the company repurchased and subsequently cancelled 16,899,332 ordinary shares with a nominal value of £4.2 million. These shares, representing 5.0 per cent
of the ordinary shares in issue at 31 December 2000, were purchased out of the proceeds following the disposal of Red Funnel Group in 2000. The total cost of the
purchase (including expenses and stamp duty) of £68.3 million was charged to the profit and loss account reserve.
Share option schemes
During the year, options exercised under the schemes resulted in the issue of 1,818,686 ordinary shares of 25p each. The company received a total of £4.4 million in
respect of these shares. A summary of options granted to employees (including executive directors) and outstanding at 31 December 2002 under share option schemes
is given below and continued on page 56:
Date option Number
Price normally of options
Date granted per share exercisable outstanding
Savings-related scheme October 1995 249.0p until 2003 234,178  
Savings-related scheme October 1996 234.0p until 2004 200,563 
Savings-related scheme October 1997 222.0p until 2005 845,083  
Savings-related scheme October 1998 208.0p until 2006 656,104  
Savings-related scheme March 1999 217.0p 2003 to 2007 542,424  
Savings-related scheme October 1999 249.0p 2003 to 2007 689,676  
Savings-related scheme October 2000 255.0p 2004 to 2008 747,074  
Savings-related scheme October 2001 320.0p 2005 to 2009 786,240  
Savings-related scheme October 2002 327.0p 2006 to 2010 1,055,491  
Executive scheme April 1994 281.5p until 2004 20,000  
Executive scheme April 1995 281.0p until 2005 41,800  
Executive scheme September 1996 296.0p until 2006 50,000  
Executive scheme September 1997 293.5p until 2007 53,000  
Executive scheme September 1997 285.0p until 2007 10,000  
Executive scheme September 1998 253.0p until 2008 11,500  
Executive scheme September 1998 255.0p until 2008 47,000  
Executive scheme September 1999 293.0p until 2009 227,685  
Executive scheme September 2000 311.0p 2003 to 2010 1,181,012  
Executive scheme April  2001 406.5p 2004 to 2011 50,000  
Executive scheme September 2001 400.0p 2004 to 2011 1,192,488  
Executive scheme April 2002 466.0p 2005 to 2012 34,334  
Executive scheme September 2002 419.0p 2005 to 2012 1,409,822   56 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
27 Share capital (continued)
Share option schemes (continued)
Date option Number
Price normally of options
Date granted per share exercisable outstanding
US Stock Purchase Plan October 2001 361.0p January 2004 47,434
US Stock Purchase Plan October 2002 348.0p January 2005 30,095  
Californian Stock Purchase Plan October 2001 361.0p January 2004 25,560  
Californian Stock Purchase Plan October 2002 348.0p January 2005 25,030  
10,213,593  
All grants of options made under the Savings-Related Share Option Scheme are, as permitted by the rules of the scheme, made at a price equal to 80 per cent of the
average middle-market quotations as derived from the Daily Official List of the London Stock Exchange, for the dealing days specified in rule 6(ii) of the scheme.
All grants of options under the Executive Share Option Scheme have been made at the full, undiscounted market price of the shares immediately preceding the date of grant.
The grants of options made under the US and Californian Stock Purchase Plans were, as permitted by the rules of those plans, made at a price equal to not less than 85
per cent of the closing market price, as derived from the Daily Official List of the London Stock Exchange, on the previous dealing day before the date of grant. 
ABP Share Incentive Plan
In 2002, in respect of the ABP Share Incentive Plan, the company received a total of £0.4 million for the 101,604 ordinary shares issued.
28 Reserves Group
Other reserves
Share Capital Profit
premium Revaluation Merger redemption and loss
account reserve reserve reserve account
£m £m £m £m £m
At 1 January 2002
as previously reported 70.9 641.7 19.8 17.2 181.7 
prior year adjustment (note 34) – – – – (54.5)
as restated 70.9 641.7 19.8 17.2 127.2 
Issue of ordinary shares 4.3 – – – – 
Qualifying Employee Share T rust 2.2 – – – (2.2)
Deficit arising on revaluation of tangible property assets (note 14) – (5.5) – – – 
Realisation of property revaluation surpluses of previous years – (8.3) – – 8.3 
Retained profit for the year – – – – 52.6 
Currency translation differences on foreign currency net investments – – – – (0.9)
At 31 December 2002 77.4 627.9 19.8 17.2 185.0 
During the year, £4.7 million was received by the company upon the exercise of options awarded under the Savings-Related Share Option Scheme. Employees paid £2.5 million
to the group for the issue of these shares and the balance of £2.2 million comprised contributions to the Qualifying Employee Share Trust from the employing company.
At 31 December 2002, cumulative goodwill written-off was £20.9 million (2001: £20.9 million), including £4.2 million (2001: £4.2 million) in respect of associated undertakings. 57
28 Reserves (continued) Company
Other reserves
Share Capital Profit
premium Revaluation Merger redemption and loss
account reserve reserve reserve account
£m £m £m £m £m
At 1 January 2002
as previously reported 70.9 650.1 34.6 17.2 158.5 
prior year adjustment (note 34) – (54.5) – – – 
as restated 70.9 595.6 34.6 17.2 158.5
Issue of ordinary shares 4.3 – – – – 
Qualifying Employee Share T rust 2.2 – – – (1.6)
Surplus arising on revaluation of subsidiary undertakings (note 15) – 18.7 – – – 
Profit for the year – – – – 26.9
At 31 December 2002 77.4 614.3 34.6 17.2 183.8 
29 Group cash flow statement
2002 2001
Reconciliation of operating profit to net cash inflow from operating activities: £m £m
Group operating profit 158.2 160.1 
Non-cash items:
Depreciation and grant amortisation 24.5 23.0 
Amortisation of goodwill 1.6 1.5 
Pension prepayment movement (6.7) (7.9)
Cash inflow/(outflow) from movements in working capital:
Property developments and land held for sale 11.9 (0.3)
Debtors (3.4) (17.7)
Creditors 6.7 7.1 
Increase/(decrease) in provisions 6.3 (0.6) 
Net cash inflow from operating activities 199.1 165.2 
Included within net cash inflow from operating activities is £4.4 million (2001: £3.3 million) in relation to discontinued operations. These operations utilised £0.3 million (2001:
£5.0 million) in relation to capital expenditure and financial investment and £nil (2001: £2.6 million) in relation to purchase of business and subsidiary undertakings.
2002 2001
Analysis of (decrease)/increase in borrowings and lease finance during the year: £m £m
Borrowings due within one year:
(Decrease)/increase in unsecured loans (1.4) 0.2 
Increase in finance leases 0.2 0.3 
Borrowings due after one year:
Decrease in secured loans – (0.3)
(Decrease)/increase in unsecured loans (47.8) 66.8 
Decrease in finance leases (3.5) (3.1)
Decrease in amortised costs 0.4 0.2 
(52.1) 64.1 58 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
29 Group cash flow statement (continued) Effect of
foreign
At exchange At
1 January Cash flow rates 31 December
2002 2002 2002 2002
Analysis of changes in net borrowings during the year: £m £m £m £m
Cash at bank and in hand 3.1 (1.4) (0.2) 1.5
Bank overdraft (3.2) 1.3 – (1.9)
(0.1) (0.1) (0.2) (0.4)
Borrowings – amounts falling due within one year (excluding overdrafts) (6.8) 1.2 – (5.6)
Borrowings – amounts falling due after more than one year (504.9) 50.9 5.0 (449.0)
(511.8) 52.0 4.8 (455.0)
Liquid resources 2.9 2.0 – 4.9 
Net borrowings (508.9) 54.0 4.8 (450.1)
Liquid resources comprise short-term deposits with banks with maturity dates between seven days and 12 months.
30 Related party transactions
The group has interests in three associated undertakings: Southampton Container Terminals Limited, Tilbury Container Services Limited and The Cardiff Bay Partnership.
The nature of these investments is described more fully in note 33 to the financial statements.
During the year, the group charged these undertakings a total of £23.8 million (2001: £19.0 million) in respect of property management and operational services. At the year
end, £5.2 million (2001: £5.2 million) remained owing by these undertakings in respect of these charges.
The amounts disclosed in this note as owing by these undertakings at the year end are aggregated with other loans made to or temporary deposits made by these
associated undertakings of the group for the purposes of the disclosure of the balances with associated undertakings in notes 17 and 19.
31 Financial commitments Group Company
2002 2001 2002 2001
£m £m £m £m
Capital expenditure contracted but not provided for 19.8 12.9 – –
Operating leases
Commitments during the next financial year in respect of operating lease payments are as follows:
Land and buildings
Leases which expire within one year 0.3 0.3 – – 
Leases which expire within two and five years 2.9 3.4 – – 
Leases which expire after five years 2.4 1.5 0.9 0.9 
Other leases
Leases which expire within one year 0.4 0.4 – – 
Leases which expire within two and five years 1.5 1.3 – – 
Leases which expire after five years 0.4 0.1 – – 
7.9 7.0 0.9 0.9  59
32 Contingent liabilities Group Company
2002 2001 2002 2001
Contingent liabilities under claims, indemnities and bank guarantees: £m £m £m £m
Bank guarantees in respect of subsidiary undertakings – – 2.8 4.8 
Other guarantees and contingencies 4.0 5.3 – – 
Other guarantees and contingencies primarily relate to performance bonds.
33 Principal subsidiary and associated undertakings % held by
group
Subsidiary undertakings
Ports and transport
Associated British Ports (see below)*
Exxtor Shipping Services Limited 100
Ipswich Port Limited 100
Northern Cargo Services Limited 100
Slaters T ransport Limited 100
Southampton Free T rade Zone Limited 100
The T eignmouth Quay Company Limited 100
ABP Marine Environmental Research Limited 100
American Port Services Inc. (registered and operating in the USA) 100
AMPORTS Cargo Services Limited 100
AMPORTS Vehicle T erminals Limited 100
Property
Grosvenor Waterside (Holdings) Limited 100
Grosvenor Waterside Developments Limited 100
Grosvenor Waterside Investments Limited 100
Associated undertakings
Ports and transport
Southampton Container T erminals Limited 49
Tilbury Container Services Limited 33
†
Property
The Cardiff Bay Partnership 45
* Under the T ransport Act 1981, the company has powers over Associated British Ports corresponding to the powers of a holding company over a wholly-owned subsidiary undertaking.
†
Associated British Ports also owns 49 per cent of the issued preference share capital in Tilbury Container Services Limited. 
All subsidiary and associated undertakings are registered and operate in England and Wales except for American Port Services Inc., which is registered in the USA, and The
Cardiff Bay Partnership, which is unincorporated and has its principal place of business at 150 Holborn, London, EC1N 2LR. The group’s interest in subsidiary undertakings
is represented by ordinary shares. 60 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notes to the financial statements
34 Financial Reporting Standard 19 – Deferred T ax (FRS 19) restatement
The group adopted FRS 19, which sets out the revised accounting guidance on deferred tax, in its 2002 interim financial statements. Prior to FRS 19, the group had
complied with Statement of Standard Accounting Practice 15 – Deferred Tax (SSAP 15) which required provision for deferred tax to be made using the liability method to
the extent that the net deferred tax assets or liabilities recognised were likely to crystallise in the foreseeable future. Given the group’s ongoing capital expenditure
programme, under SSAP 15 the group was not required to recognise any deferred tax liability in respect of the timing differences between the group’s industrial building and
capital allowances and the group’s depreciation expense as the group’s industrial building and capital allowances are expected to continue at levels in excess of the group’s
depreciation expense for the foreseeable future.
Under FRS 19, except for brought-forward capital losses and property revaluation gains, the group has made a full provision for deferred tax in respect of timing differences
and recognised in full the future tax impact of past transactions without taking into account the beneficial tax impact of the group’s planned future capital expenditure
programme as permitted under SSAP 15. The group has not recorded a deferred tax asset with respect to unrelieved capital losses as the recoverability of these cannot be
assessed with reasonable certainty. The adoption of FRS 19 has increased the group’s reported underlying effective tax rate from 24.8 per cent to 28.0 per cent and
reduced the group’s underlying earnings per share by 1.4 pence from 31.8 pence to 30.4 pence. In addition, net assets as at 31 December 2002 have been reduced by
£59.0 million from £1,068.3 million to £1,009.3 million. None of this has had any impact on cash flows. 
Comparative figures for 2001 have been restated to reflect the effects of FRS 19 as follows:
Reported Adjustment Restated
Year ended 31 December 2001 £m £m £m
Group profit and loss account
Profit on ordinary activities before taxation 129.5 – 129.5 
T axation on profit on ordinary activities (32.3) (4.2) (36.5)
Profit on ordinary activities after taxation attributable to shareholders 97.2 (4.2) 93.0 
Dividends (45.4) – (45.4)
Retained profit for the group and its associates 51.8 (4.2) 47.6 
Earnings per share – underlying 29.4p (1.3p) 28.1p 
Group balance sheet
Investments – interest in associated undertakings 52.4 (4.4) 48.0 
Provisions for liabilities and charges – deferred taxation (28.9) (50.1) (79.0)
Equity shareholders’ funds – profit and loss account 181.7 (54.5) 127.2  61
Statement of directors’ responsibilities in respect of the preparation of 
financial statements
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 the group and of the profit or
loss of the group 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;
–Prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the group and the company will
continue in business.
The directors confirm that the financial statements
comply with these requirements. The directors are
responsible for keeping proper accounting
records that disclose with reasonable accuracy at
any time the financial position of the company
and the group and to enable them to ensure that
the financial statements comply with the
Companies Act 1985. They are also responsible
for safeguarding the assets of the company and
the group and, hence, for taking reasonable steps
for the prevention and detection of fraud and
other irregularities. 
The directors are responsible for the maintenance
and integrity of the group’s website where the
group’s Annual Report & Accounts is available.
Information published on the Internet is accessible
in many countries where legal requirements may
differ from the United Kingdom’s legislation
relating to the preparation and dissemination of
financial statements. 62 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Principal activities
The principal activities of the group comprise the
provision of port facilities and related services to
ship owners and other users of seaports in the UK
and the USA. The group owns and operates 21
ports in the UK and provides vehicle-processing
services from four port locations in the USA. In
addition, the group engages in the provision of
value-added transport-related services in the UK,
and generates income from the ownership and
development of properties at port locations within
the UK and the USA. This report should be read in
conjunction with the operating and financial review
on pages 24 to 29 and the Group Chief Executive’ s
review on pages 12 to 14, both of which include
details of the group’ s trading during the year and an
indication of likely future developments.
Results and dividend
The profit for the year attributable to shareholders was
£101.1 million, giving underlying earnings per share of
30.4 pence. Further details of the group’ s results are
set out in note 2 to the financial statements. The directors
are recommending a final dividend of 8.25 pence per
shar e to be paid on 1 May 2003 to or dinary shareholders
on the register at close of business on 4 April 2003.
Combined with the interim dividend of 6.5 pence per
share paid on 1 November 2002, this would make a
total ordinary dividend for the year of 14.75 pence per
share, representing an increase of 7.3 per cent on
the previous year’ s dividend of 13.75 pence per share.
Acquisitions and disposals
On 19 April 2002, the group acquired the business
and operating assets of Hams Hall Railfreight
Terminal from Parsec of Europe Limited for a cash
consideration of £0.3 million.
On 1 July 2002, the group closed down the
operations of Southern Emergency Vehicles, a
small vehicle-modification business in the USA.
On 29 July 2002, the group entered into a conditional
agreement for the sale of AMPORTS USA's Aviation
division, which comprised 11 airport facilities, to
subsidiaries of Macquarie Global Infrastructure
Funds, the sale being conditional upon obtaining
consents from the relevant airport and regulatory
authorities. All of these consents, together with the
cash proceeds of £32.0 million (US$50.0 million),
were received by 13 December 2002.
Investment property
The group’ s tangible property assets were valued
on the basis of open market value as at 31 December
2002 at £568.8 million, leading to a decrease in the
revaluation reserve of £5.5 million. 
Directors and their interests
Biographies of the directors of the company are
provided on pages 22 and 23. Of the three directors
retiring at the Annual General Meeting (AGM) in
accordance with the company's Articles of Association,
Richard Adam and Aubrey Adams, being eligible,
offer themselves for re-election. George Duncan is
not seeking re-election. Stuart Chambers has been
appointed since the last AGM and, being eligible,
will also offer himself for re-election. 
Of the directors offering themselves for re-election,
Richard Adam has a service agreement with the
company.
Details of the remuneration paid to directors who
held office during the year are given in the
remuneration report on pages  66 to 69. This also
contains details of each director’ s interest in the share
capital of the company at the year end.
Share capital
Details of changes in the company’ s share capital,
including shares issued and options granted under
the employee share schemes, are set out in note 27 to
the financial statements. Details of the company’ s
shareholders at the year end are provided on page 71.
Payment of suppliers
The group agrees terms and conditions with
suppliers before business takes place. The group’ s
policy and practice is to pay agreed invoices in
accordance with the terms of settlement. At the
year end, the amount owed to trade creditors
amounted to 30 days (2001: 20 days) of purchases
from suppliers.
Research and development
The group undertakes research and provides a
wide range of hydraulic, dredging and engineering
consultancy services both for Associated British
Ports and outside customers through ABP Marine
Environmental Research Limited, a wholly-owned
subsidiary. 
Employee involvement
The company uses various methods to provide
information to, and, where appropriate, consult with
employees about current activities and progress.
The company believes that financial participation is
a major constituent of employee involvement and
employee share schemes are well established. An
offer under the Share Incentive Plan (formerly
known as the All Employee Share Ownership Plan)
Directors’ report 63
was made to employees in 2002, as well as grants
of options under both the Savings-Related Share
Option Scheme (SRSOS) and the Executive Share
Option Scheme (ESOS). A further offer under the
Share Incentive Plan and a grant of options under
the SRSOS will take place in 2003. The company
also intends to make another grant under the ESOS
in 2003 at the full, undiscounted market price of the
shares at the date of the grant. Offers were also made
in 2002 to employees under the US and Californian
Stock Purchase Plans, with further offers scheduled
for 2003.
Disabled persons
It is group policy to give full and fair consideration to
applications for employment by disabled persons.
Where employees become disabled during
employment, the group seeks to provide opportunities
for them to continue employment in positions
compatible with their disability wherever possible.
Disabled employees, in line with all staff, are
encouraged to make use of training and development
facilities.
Charitable and political contributions
Donations for charitable purposes in 2002 amounted
to £74,000 (2001: £73,000). The group also made
contributions of £2,000 (2001: nil) for political purposes
in the USA.
Special business at the Annual General Meeting
(AGM)
The remuneration report will be put to the AGM for
approval, as an ordinary resolution.
New authorities for the issue of the balance of the
authorised share capital are being sought. At the AGM
held on 16 April 2002, shareholders approved an
ordinary resolution conferring a general authority
(for the purposes of section 80 of the Companies
Act 1985) on the directors to allot equity securities
up to an aggregate nominal amount representing
the lesser of (i) the unissued ordinary share capital of
the company and (ii) one-third of the issued equity
share capital of the company , for one year ending
on the date of the AGM in 2003. The directors are
proposing that an ordinary resolution be submitted
at the AGM, in order to grant a general authority for
a further year in respect of an amount equivalent to
one-third of the issued equity share capital. The
authorised share capital of the company is
£125,000,000 divided into 500,000,000 ordinary
shares of 25 pence each, of which £27,409,096,
comprising 109,636,384 ordinary shares,
represents one-third of the issued equity share
capital as at 19 February 2003. The directors have
no present intention of exercising such authority
other than to issue shares pursuant to the
company's employee share schemes.
The directors are also proposing that a special
resolution be submitted at the AGM to empower
them to allot, wholly for cash, up to a nominal
amount of £4,111,364 (16,445,456 ordinary
shares) representing approximately five per cent of
the issued equity share capital of the company as at
19 February 2003, without offering them first to
existing shareholders. The authority would expire at
the AGM in 2004. The directors believe it is in the
best interests of the company that, as permitted by
the Companies Act 1985, they should have
available a relatively small number of shares in order
that they may take advantage of any appropriate
opportunities that may arise.
The directors are further proposing that a special
resolution be submitted at the AGM giving the company
authority to purchase in the market up to 32.8 million
of its ordinary shares of 25 pence each (representing
approximately 10 per cent of the present issued share
capital). The authority would expire on the date of the
AGM in 2004. In reaching their decision to purchase
ordinary shares, the directors will take into account the
company's cash resources and capital requirements
and the effect of any purchase on earnings per share.
There is no present intention to use this authority .
Finally , the directors are proposing that an ordinary
resolution be submitted at the AGM giving the
company authority to establish the Associated
British Ports Long-T erm Incentive Plan, as outlined
in the appendix to the letter from the Chairman to
shareholders dated 11 March 2003.
Auditors
Following the conversion of our auditors
PricewaterhouseCoopers to a Limited Liability
Partnership (LLP) from 1 January 2003,
PricewaterhouseCoopers resigned on 17 February
2003 and the directors appointed its successor ,
PricewaterhouseCoopers LLP , as auditors. A resolution
to re-appoint PricewaterhouseCoopersLLP as auditors
to the company will be proposed at the AGM.
By order of the board
Hywel Rees
Company Secretary
19 February 2003 64 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Combined Code
The board of directors is responsible for , and
committed to, the maintenance of the highest
standards of corporate governance throughout the
group and fully supports the principles laid down in
the Combined Code on Corporate Governance
(the Code). This statement describes how the
principles of the Code are implemented and reports
on the group’ s compliance with the Code’ s
provisions.
Board of directors
The board of directors is responsible for the group's
strategic direction, the establishment of policies and
internal controls and the monitoring of operational
performance. 
The board currently comprises seven non-
executive  directors and two executive directors.
The non-executive role of Chairman is separate
from the executive role of the Group Chief
Executive, and there is a clear division of
responsibilities between the two. On 16 April 2002,
Ross Sayers succeeded Sir Keith Stuart as non-
executive Chairman following Sir Keith’ s retirement.
Biographies of all board members are provided on
pages 22 to 23.
The executive directors operate within clearly
defined limits of authority and must refer any
matters outside these limits to the board for its
consideration. The group’ s non-executive directors
bring wide and varied commercial experience to the
board’ s deliberations and fully participate in the
resolution of matters reserved for the board. They
are all considered to be independent of
management and free from any business or other
relationship that could materially interfere with their
independent judgement. 
The board meets eight times a year in the normal
course of business. Board meetings are held both
at head office and at the group's port locations
around the UK. The schedule of matters reserved
for the board includes annual budgets, strategic
plans, reporting to shareholders, approval of
acquisitions and divestments, approval of major
capital expenditure projects and consideration of
significant financing.
Board members are provided with all relevant
information on a timely basis in order to enable the
board to discharge its duties effectively . The
Chairman is responsible for ensuring that all
directors are properly briefed on issues arising at
board meetings.
All directors have access to the advice and services
of the Company Secretary , who is responsible for
ensuring that board procedures are followed.
Newly-appointed directors who do not have any
previous public company board experience are
provided with relevant training on their role and
responsibilities. Subsequent training is available to
all directors on an as needed basis. Any director
may also take independent professional advice, at
the group’ s expense, in furtherance of his duties.
All directors are subject to re-election at intervals of
no more than three years.
Board committees
There are three main committees of the board. 
The Audit Committee is responsible for keeping
under review the scope and results of the audit, its
cost-effectiveness and the independence and
objectivity of the auditors, particularly in the context
of the nature and extent of any non-audit services
they provide to the group. The committee meets at
least twice a year and its terms of reference also
include the review of the annual and interim financial
statements before they are approved by the board
and the monitoring of internal and external audit
functions. 
The committee may , as appropriate, meet the
group’ s internal and external auditors without the
group’ s management being present. The Audit
Committee is chaired by Derek Sach. Its other
members are Aubrey Adams, Tim Bowdler and
Andrew Simon.
The Remuneration Committee is chaired by George
Duncan, the Deputy Chairman and senior
independent director , and comprises all the non-
executive directors. The committee is responsible
for setting all the elements of executive directors’
remuneration packages. This includes establishing
the targets attached to the performance-related
element of executive directors’ remuneration and
for the granting of options under the group’ s share
option schemes. A separate report on directors’
remuneration is included on pages 66 to 69.
The Nomination Committee meets as and when
necessary , and at least once a year . Its
responsibilities include consideration of candidates
for board nomination, re-election to the board of
those directors retiring by rotation and succession
planning. The committee is chaired by Ross Sayers
and comprises the non-executive directors and Bo
Lerenius.
Relations with shareholders
The board is committed to maintaining good
communications with shareholders. Other than
during close periods, the Group Chief Executive
and the Group Finance Director maintain a regular
dialogue with institutional shareholders throughout
the year . The group also encourages communications
with private shareholders throughout the year and
welcomes their participation at shareholder
meetings. Institutional shareholders and analysts
are invited to presentations by the executive
directors immediately after the announcement of
the group’ s half-year and full-year results. These 
are subsequently made available on the group’ s
website.
In addition to the half-year and full-year results
announcements, the company also issues
trading statements in advance of entering its
close periods and provides an indication of
trading at the time of the Annual General Meeting
(AGM). All board members attend the AGM and,
in particular, the chairmen of the Audit,
Remuneration and Nomination Committees are
available to answer questions. Resolutions are
proposed on each substantially separate issue
and the agenda at the AGM includes a resolution
adopting the group’ s Annual Report & Accounts.
Notice of the AGM is sent to all shareholders at
least 20 working days before the meeting. Details
of the proxy votes for and against each resolution
are announced after the result of the hand votes 
is known.
Corporate governance 65
The group’ s Annual Report & Accounts,
preliminary and interim announcements, trading
statements and press releases are available on 
its website, www.abports.co.uk. Whether a
shareholder or not, all of these communications
from the company can be received in electronic
form by e-mailing pr@abports.co.uk.
Going concern
After making enquiries, the directors believe 
that the group and the company have adequate
resources to continue in operational existence 
for the foreseeable future. For this reason, they
continue to adopt the going concern basis in
preparing the financial statements.
Internal control 
The board acknowledges that it has overall
responsibility for the group's system of internal
control and for reviewing its effectiveness. 
The board takes regular account of the
significance of social, environmental and 
ethical matters in assessing the 
appropriateness of the group’ s system of 
internal control. Significant social, ethical and
environment-related risks and opportunities
which could impact on the group’ s short- and
long-term value are identified, assessed and
addressed appropriately. The group has in place
effective systems for managing all significant 
risks and the board has received adequate
information throughout the year in making this
assessment. Further information on the 
group’ s management of social, ethical and
environmental matters will be provided in its 
first separate report on corporate and social
responsibility, due to be published during 2003.
The group’ s system of internal control is 
designed to manage rather than eliminate 
risk in achieving business objectives. While 
the system is subject to regular review and 
updating, it should be recognised that such
systems can provide only reasonable, and 
not absolute, assurance against material
misstatement or loss. During 2002, procedures
were in place throughout the group to ensure
compliance with the report of the Turnbull
Committee.
Risk management
As recommended in the guidance on internal
control issued by the T urnbull Committee, the
group has in place a risk management working
group, comprising senior executives and chaired 
by the Group Finance Director , for the purposes of
identifying the major risks facing the group and
formalising the group’ s risk objectives and risk
management processes. The recommendations of
the risk management working group are reviewed
and updated annually and have been adopted by
the board. 
The group’ s overall risk management objective is 
to take such strategic and commercial risks so as to
enable it to grow the business through a thorough
understanding of the risks and responses required
for success. The definition of risk for the group is “an
uncertainty or event that could, unless effectively
managed, significantly affect Associated British
Ports Holdings PLC’ s ability to achieve its current or
future objectives.”
The group has identified four major risk
management objectives:
–T o ensure that the health and safety of its
employees and other persons is not put at risk 
by its undertaking;
–T o continue to avoid disasters or catastrophes 
by managing those physical and other risks that
have the potential to significantly damage the
financial position of the group, its reputation or 
its ability to provide services;
–T o identify , assess and prioritise opportunities 
to grow the business having regard for the need
to manage the group’ s commercial risks;
– In operating its business, to endeavour to meet
the demands of trade while having due regard 
for the potential impact of its activities on the
environment.
The group aims to manage risk wherever possible
by embedding processes and ensuring controls to
manage risk are inherent in day-to-day operations.
To this end, monthly reports received by the Group
Chief Executive from the operating units cover key
aspects of the business such as commercial
matters, health and safety issues, personnel issues,
financial results and future business prospects.
These reports also comment on existing risks and
specifically identify any emerging risks along with
actions being taken to manage them. Risks such 
as health and safety and the environment are further
monitored by written reports submitted to the board
on a regular basis.
The Group Chief Executive, the Group Finance
Director and senior operational and financial
managers meet on a regular basis. These meetings
allow for discussions of particular issues affecting
each business unit, including their major risks.
The group maintains a comprehensive annual
planning and management reporting system. 
A detailed annual budget is prepared in advance of
each year and is supplemented by revised forecasts
during the course of the year . In addition, a three-
year strategic plan is updated annually . Actual financial
results are reported monthly and compared to budget,
revised forecasts and prior-year results. All of these
reports are reviewed by the board for approval.
Comprehensive procedures provide for the
appraisal, approval, control and review of capital
expenditure. These are incorporated within clearly
defined reporting lines and limits of authority .
The internal audit function supports the directors in
assessing the effectiveness of internal controls at each
business unit through a pre-agreed audit programme.
Where weaknesses in controls are reported, corrective
action is taken and, where appropriate, communicated
to other operating units to encourage and enhance
best practice around the group.
Every year , each operating unit completes a control
self-assessment questionnaire that measures and
assesses risk areas and principal controls. This
questionnaire is part of the risk management process
and is reviewed by internal audit. The results, which
are presented to the Audit Committee, complement
the existing internal and external audit procedures.
Compliance with the provisions of the Code
The board considers that the company has fully
complied with the Code’ s provisions since 17 May
2002. Before that date, the company did not comply
with B.1.7, which concerns directors' notice periods. 66 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Remuneration report
Introduction
The directors confirm that this report has been
drawn up in accordance with Schedule B of the
Combined Code and Statutory Instrument – SI
2002/1986, ‘The directors’ remuneration report
regulations 2002’ issued by the Department of
Trade and Industry in August 2002. 
The Remuneration Committee comprises all non-
executive directors and is currently chaired by
George Duncan. The committee takes into
account the views of the Group Chief Executive in
determining the remuneration for other executive
directors of the company and the directors of the
subsidiary board of ABP . The Group Chief
Executive does not attend any meetings of the
committee at which his own remuneration is
discussed. The functions of the Remuneration
Committee are described in the corporate
governance statement on page 64.
Remuneration policy
The group’s remuneration policy is designed to
attract, retain and motivate key senior executives
with the relevant skills to achieve its business
objectives and to align their interests with those 
of shareholders by recognising and rewarding
performance. The committee aims to ensure that
the remuneration packages for executive directors
are competitive with other companies of similar
size, activities and complexity. It reviews the total
remuneration package and the balance of its
various elements regularly. During the course of
the year, the committee undertook a review which
resulted in a proposal to shareholders to
supplement the Executive Share Option Scheme
with a new Long-Term Incentive Plan. In
determining the appropriate levels of remuneration
for executive directors, the committee takes
independent advice from New Bridge Street
Consultants. The use of external consultants and
the choice of consultant is a matter reserved for
the committee. The consultants appointed to
provide advice on executive remuneration do not
provide any other services to the group. 
The remuneration package for executive directors
incorporates a competitive basic salary , a performance
-related annual cash bonus, share-related incentive
schemes, pension and other benefits. In determining
executive remuneration, the Remuneration
Committee takes into account pay and employment
conditions across the group. It aims to link a
percentage of the overall package for the senior
executives and executive directors to the group’s
short-and long-term business performance.
The board determines the remuneration for non-
executive directors. The company maintains contact
as necessary with its principal shareholders on
remuneration matters.
Basic salary
The committee's objective is to ensure that the
basic salary for each director is appropriate and
competitive for the responsibilities involved. Base
salaries are reviewed annually and any increase 
in the basic salary of directors is awarded only
after taking into account individual performance,
changes in responsibilities and external advice as
to appropriate salary levels for each position.
Performance-related bonus
A performance-related annual cash bonus scheme
is open to senior management and is non-
pensionable. The payment to executive directors
for achievement of target is 30 per cent of basic
salary, with up to a further 30 per cent of basic
salary payable for exceptional outperformance 
of target. Under the scheme, senior management
receive payment in the range of 10 to 20 per cent
of basic salary for on-target performance and a
further 10 to 20 per cent of basic salary for
exceptional outperformance of target. Bonuses 
in the range of 5 per cent to 36 per cent are payable
in respect of 2002.
Share-related incentives
Executive Share Option Scheme
The group operates a performance-related
Executive Share Option Scheme to reward executive
directors and senior management. The overall aim
of this scheme is to align the interests of key
executives with the group’s objective of creating
shareholder value in the longer term.
Options are issued annually at the share price
prevailing at the date of issue. As payment is made
at the date of exercise, no consideration is payable
at the time of grant of these options.
Options may not be exercised unless and until the
earnings per share target has been achieved. This
target requires the percentage growth in the group's
earnings per share to exceed the rate of inflation
by at least three per cent per annum for a minimum
period of three years. If the earnings per share
target is not achieved at the end of the minimum
period, it will be extended for a further year and
again at the end of the fourth year. If the earnings
per share target is not achieved by the end of the
fifth year, the options will lapse. Options granted
to the executive directors in 1999 vested during
the year, as the actual growth of 31.3 per cent in
the group’s earnings per share over the three-year
period from 1 January 1999, exceeded the
15.2 per cent growth required. In line with current
market practice, the group continues to use earnings
per share as the target for the remaining options
held by executive directors and other senior
managers on the basis that it is an indicator closely
aligned to shareholder value.
The graph below sets out the group’s total
shareholder return (TSR) compared with the FTSE
top 250 companies comparator group over the
five-year period to 31 December 2002.
60
80
100
120
140
160
180
200
1998 1999 2000 2001 2002
Associated British Ports Holdings PLC
FTSE top 250  67
Long-Term Incentive Plan
As part of a wider review of executive directors’
remuneration, the company reviewed its long-
term incentive arrangements during 2002. One
recommendation from this review was the
introduction of a new Long-Term Incentive Plan
for executive directors to strengthen the link
between the most senior executives’ remuneration
and the long-term performance of the group. 
A resolution seeking shareholder approval for the
introduction of this plan is being proposed at the
Annual General Meeting on 15 April 2003.
Under the plan, executive directors may receive
annual share awards of up to a maximum
individual limit of 100 per cent of base salary 
per annum. In line with current best practice, the
vesting of the shares will be based on the company’ s
performance in terms of TSR, compared to a
group comprising the FTSE companies ranked
from 51 to 150 by market capitalisation, excluding
companies in the financial, IT and
telecommunications sectors. The exact list of
companies will be based on the average market
capitalisation of companies over three months
prior to the beginning of the performance period.
Each performance period will last three years and
will start at the beginning of the financial year in
which the award is made. TSR will be averaged
over the six months prior to the start and end of
the performance period. Thirty per cent of the
shares will vest for attaining a median ranking;
100 per cent of the shares will vest if the
company is ranked in the upper decile. There 
will be pro-rata vesting for performance between
median and upper decile. No shares will vest for
below-median ranking or unless real growth in
earnings per share has been achieved over the
performance period.
Executive directors will be required to retain shares
worth 50 per cent of the post-tax gain made
through the exercise of options until they hold
shares with a value equivalent to their base salary.
The remuneration committee has chosen TSR as the
performance criterion for future vestings of awards
made under the Long-Term Incentive Plan because
it believes it desirable to link part of the long-term
remuneration to out-performing companies of a
similar size.
Other share schemes
Subject to a minimum period of service, all UK
employees, including executive directors, are
eligible to participate in the ABP Share Incentive
Plan (SIP) and the group’s Savings-Related Share
Option Scheme (SRSOS). Under the SIP , employees
can elect to purchase shares out of their pre-tax
and National Insurance salaries, up to a maximum
of £125 per month. Shares purchased by
employees are allotted to a trustee on a monthly
basis. The allotted shares are held in trust for a
period of five years prior to vesting.
Under the SIP , employees can also elect to be
awarded free shares worth £250 annually. In
addition, participants can receive further shares of
up to a maximum value of £375 depending on the
achievement by the group of agreed targets with
regard to its annual pre-tax profits. Shares awarded
under this part of the scheme are also held in trust
for a period of five years prior to vesting.
Under the SRSOS, options are granted to employees
at a price which is 20 per cent less than the market
price at the date of grant. Employees can elect to
save up to a maximum of £250 per month for a
period of three or five years. At the end of the
elected savings period, the employee can use the
proceeds to acquire shares in the company at the
option price. The company operates plans similar
to the SRSOS for its employees in the USA.
Pension 
The company pays executive directors a supplement
calculated at 25 per cent of basic salary in lieu of
pension arrangements.
Other benefits
Other benefits are provided in line with market
practice. These include medical cover and a
company car or cash alternative.
Service contracts
The notice period contained within the employment
contracts of existing executive directors is one
year. The board may, if necessary, consider initial
contract periods in excess of one year in the
recruitment of new executive directors. Any such
contracts would revert to a one-year notice period
on expiry of the initial notice period.
In the event of the company facing a claim for
compensation for loss of office by a director, the
level of compensation would be subject to
mitigation if considered appropriate and legally
sustainable. There are no provisions for pre-
determined compensation in the service contracts
of existing directors.
Audited information
The emoluments and share options information
disclosed on the following pages, as required by
Part 3 of Schedule 7A of the Companies Act
1985, has been audited. 68 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Remuneration report
Emoluments
Performance- Other Performance- Other
Salary/fees related bonus Pension benefits Total Salary/fees related bonus Pension benefits Total
2002 2002 2002 2002 2002 2001 2001 2001 2001 2001
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Executive directors
Richard Adam 237 89 59 15 400 209 77 52 14 352
Stuart Bradley (a) ––––– 22––– 22
Bo Lerenius (b) 403 150 101 17 671 380 103 95 14 592
James Shaw (c) ––––– 92–– 7 99
Total 640 239 160 32 1,071 703 180 147 35 1,065
Non-executive directors
Aubrey Adams 38––– 38 38––– 38
Tim Bowdler 33––– 33 32––– 32
Stuart Chambers (d) 8––– 8 –––– -
Peter Dean (e) ––––– 11––– 11
George Duncan 75––– 75 75––– 75
Derek Sach 40––– 40 40––– 40
Ross Sayers (f) 104––– 104 8––– 8
Andrew Simon 33––– 33 33––– 33
Sir Keith Stuart (g) 50––– 50 150 – – 1 151
Total 381––– 381 387 – – 1 388
T otal directors’ emoluments 1,021 239 160 32 1,452 1,090 180 147 36 1,453
(a) Stuart Bradley retired as a director on 24 April 2001.
(b) The highest-paid director during the year was Bo Lerenius.
(c) James Shaw resigned as a director on 30 June 2001. Under the terms of a Compromise Agreement, he is entitled to receive private medical insurance until 31 March 2004 at an estimated cost of £2,429.
(d) Stuart Chambers was appointed as a director on 15 October 2002.
(e) Peter Dean, who resigned as a director on 24 April 2001, has been retained as a consultant to advise the company on pension matters and received £15,000 (2001: £10,000) in respect of his services.
(f) Ross Sayers was appointed as a director on 16 October 2001 and as Chairman on 16 April 2002, following Sir Keith Stuart’s retirement.
(g) Sir Keith Stuart retired from the board on 16 April 2002.
(h) Lord Crickhowell, who retired as a director on 28 April 1999, has been retained as a consultant to advise the company on parliamentary matters and received £15,000 (2001: £15,000) in respect of his services.
Directors’ share options
Movements in the directors’ holdings of options under both the Executive Share Option Scheme and the Savings-Related Share Option Scheme during the year are as follows:
Executive Share Option Scheme
Options at Options at 
1 January Granted Exercised 31 December Date of Option Date normally
2002 in year in year (b) 2002 (a) grant price exercisable 
Richard Adam 134,000 – (134,000) – Nov 1999 297.00p Nov 2002 to Nov 2009
68,816 – – 68,816 Sep 2000 311.00p Sep 2003 to Sep 2010
52,785 – – 52,785 Sep 2001 400.00p Sep 2004 to Sep 2011
– 58,472 – 58,472 Sep 2002 419.00p Sep 2005 to Sep 2012
255,601 58,472 (134,000) 180,073 69
Executive Share Option Scheme (continued)
Options at Options at 
1 January Granted Exercised 31 December Date of Option Date normally
2002 in year in year (b) 2002 (a) grant price exercisable 
Bo Lerenius 350,000 – (350,000) – May 1999 284.00p May 2002 to May 2009
156,270 – – 156,270 Sep 2000 311.00p Sep 2003 to Sep 2010
95,738 – – 95,738 Sep 2001 400.00p Sep 2004 to Sep 2011
– 97,852 – 97,852 Sep 2002 419.00p Sep 2005 to Sep 2012
602,008 97,852 (350,000) 349,860
(a) Options held at 31 December 2002 are only exercisable should the performance criteria described on page 66 be achieved.
(b) The aggregate gains made by directors on the exercise of options during the year totalled £712,145 (2001: £59,336). On 21 May 2002, Bo Lerenius exercised options over 180,032 shares at 284 pence per share. The market price on 21 May 2002 was 450 pence
per share. On 23 May 2002, Bo Lerenius exercised options over a further 169,968 shares at 284 pence per share. The market price on 23 May 2002 was 442 pence per share. On 15 November 2002, Richard Adam exercised options over 134,000 shares at 297
pence per share. The market price on 15 November 2002 was 405 pence per share.
Savings-Related Share Option Scheme
Options at Options at 
1 January Granted Exercised 31 December Date of Option Date normally
2002 in year in year 2002 grant price exercisable 
Richard Adam 3,799 – – 3,799 Oct 2000 255.00p 6 months from Jan 2004
Bo Lerenius 3,799 – – 3,799 Oct 2000 255.00p 6 months from Jan 2004
Directors’ interests
Directors’ beneficial, including family, interests in the share capital of the company as at 31 December 2002, as recorded in the register maintained by the company pursuant to Section 325 of the Companies
Act 1985, are set out in the table below. 
Ordinary shares of 25p
each held by the trustees
of the Employee Share
Ordinary shares of 25p each Ownership Scheme
2002 2001 2002 2001
Richard Adam 3,000 3,000 814 488
Aubrey Adams 20,000 20,000 – –
Tim Bowdler 2,486 2,486 – –
Stuart Chambers – – – –
George Duncan 8,000 8,000 – –
Bo Lerenius 9,477 1,400 1,229 1,318
Derek Sach 15,000 15,000 – –
Ross Sayers 10,000 10,000 – –
Andrew Simon 5,000 5,000 – –
On 27 January 2003, 31 shares were allotted to the trustees of the SIP on behalf of Richard Adam and 31 shares were allotted on behalf of Bo Lerenius. There have been no other changes in total shareholdings
by directors in the period between 31 December 2002 and 19 February 2003. None of the directors had any non-beneficial interest in the share capital of the company during the period to 31 December 2002
nor the period from the year end to 19 February 2003. The company’s Register of Directors’ Interests (which is open to inspection) contains full details of directors’ shareholdings and options to subscribe.
By order of the board
Hywel Rees
Company Secretary
150 Holborn, London EC1N 2LR
19 February 2003 70 70 Associated British Ports Holdings PLC Annual Report & Accounts 2002
We have audited the financial statements which
comprise the group profit and loss account, the
balance sheets, the group cash flow statement,
the statement of group total recognised gains and
losses and the related notes. We have also audited
the disclosures required by Part 3 of Schedule 7A
to the Companies Act 1985 contained in the directors’
remuneration report (“the auditable part”).
Respective responsibilities of directors and
auditors
The directors’ responsibilities for preparing the
annual report, the directors’ remuneration report
and the financial statements in accordance with
applicable United Kingdom law and accounting
standards are set out in the statement of directors’
responsibilities.
Our responsibility is to audit the financial statements
and the auditable part of the directors’ remuneration
report in accordance with relevant legal and regulatory
requirements and United Kingdom Auditing
Standards issued by the Auditing Practices Board.
This report, including the opinion, has been
prepared for and only for the company’s members
as a body in accordance with Section 235 of the
Companies Act 1985 and for no other purpose.
We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other
person to whom this report is shown or in to whose
hands it may come save where expressly agreed
by our prior consent in writing.
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 auditable
part of the directors’ remuneration report 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 is not disclosed.
We read the other information contained in the
annual report and consider the implications for 
our report if we become aware of any apparent
misstatements or material inconsistencies with 
the financial statements. The other information
comprises only the directors’ report, the unaudited
part of the directors’ remuneration report, the
Chairman’s statement, the operating and financial
review and the corporate governance statement. 
We review whether the corporate governance
statement reflects the company’s compliance 
with the seven provisions of the Combined Code
specified for our review by the Listing Rules of 
the Financial Services Authority, and we report if it
does not. We are not required to consider whether
the board’s statements on internal control cover
all risks and controls, or to form an opinion on the
effectiveness of the group’s corporate governance
procedures or its risk and control procedures.
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 auditable part of the directors’ remuneration
report. 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 company’s
circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to
obtain all the information and explanations which
we considered necessary in order to provide us
with sufficient evidence to give reasonable
assurance that the financial statements and the
auditable part of the directors’ remuneration
report 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.
Opinion
In our opinion:
– The financial statements give a true and fair
view of the state of affairs of the company and
the group at 31 December 2002 and of the
profit and cash flows of the group for the year
then ended;
– The financial statements have been properly
prepared in accordance with the Companies
Act 1985;
– And those parts of the directors’ remuneration
report required by Part 3 of Schedule 7A to
the Companies Act 1985 have been properly
prepared in accordance with the Companies
Act 1985.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered
Auditors
London
19 February 2003
Independent auditors’ report to the members of Associated British Ports Holdings PLC 71 71 71
Ordinary shares of 25 pence each – by number of shares held
Number of Number of
holders % shares %
1 – 1,000 4,812 43.1 2,515,035 0.8
1,001 – 2,000 1,990 17.8 3,021,962 0.9
2,001 – 4,000 1,802 16.1 5,419,100 1.6
4,001 – 20,000 2,013 18.0 16,285,843 5.0
20,001 – 400,000 444 4.0 40,310,158 12.3
400,001+ 110 1.0 260,571,586 79.4
T otal 11,171 100.0 328,123,684 100.0
Ordinary shares of 25 pence each – by category of holder
Number of Number of
holders % shares %
Individual 9,149 81.9 26,478,249 8.1
Bank or nominee 1,806 16.2 287,833,882 87.7
Other company 148 1.3 4,310,666 1.3
Insurance company 29 0.3 5,633,579 1.7
Investment trust 14 0.1 79,530 –
Other corporate  body 14 0.1 780,502 0.3
Pension trust 11 0.1 3,007,276 0.9
T otal 11,171 100.0 328,123,684 100.0
Substantial holdings
Number of % of issued 
The following had notified substantial share interests as at 19 February 2003: shares ordinary capital
(i) Threadneedle Asset Management 31,349,807 9.53
(ii) M&G Investment Management 28,110,527 8.55
(iii) Jupiter Asset Management Limited 26,076,971 7.93
(iv) Deutsche Asset Management 19,391,195 5.90
(v) Schroder Investment Management Limited 15,234,548 4.63
(vi) Harris Associates LP 15,056,694 4.58
(vii) Scottish Widows Investment Partnership 14,240,113 4.33
(viii) Marathon Asset Management Ltd 13,426,153 4.08
(ix) Aegon Asset Management 12,324,660 3.75
(x) Legal & General Investment Management 10,107,512 3.07
Shareholder analysis
A Individuals 81.9%
B Other 18.1%
B
A
A Individuals 8.1%
B Other 91.9%
A
B
Percentage of shareholders Percentage of shares 72 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Group profit and loss  account
2002 2001 2000 1999 1998
£m £m £m £m £m
Group turnover
Ports and transport - continuing operations 361.8 334.1 291.0 267.9 244.2 
Ports and transport - discontinued operations 27.9 29.6 47.9 42.2 29.9 
Ports and transport 389.7 363.7 338.9 310.1 274.1 
Property investment 9.3 10.8 15.9 17.9 20.1 
Property development 30.8 30.9 35.8 23.1 44.9 
429.8 405.4 390.6 351.1 339.1 
Profit on ordinary activities before interest
Ports and transport - continuing operations 142.9 137.6 128.6 119.3 115.6 
Ports and transport - discontinued operations 3.6 3.0 7.3 7.6 5.4 
Ports and transport 146.5 140.6 135.9 126.9 121.0 
Property investment 6.8 8.0 12.6 15.0 16.7 
Property development 12.0 13.0 11.5 8.2 6.8 
Share of operating profit in associates 10.5 8.5 8.4 7.3 5.7 
T otal underlying operating profit* 175.8 170.1 168.4 157.4 150.2 
Goodwill amortisation (1.6) (1.5) (0.8) (3.8) (2.0)
Provision for restructuring (5.5) ––––
Exceptional items - other – – (0.8) – –
Goodwill and fixed assets impairment – –– (80.2) – 
T otal operating profit 168.7 168.6 166.8 73.4 148.2 
Profit on disposal of discontinued operations 7.4 – 14.0 – 1.2 
Profit on sale of fixed assets 0.7 0.6 2.2 3.3 1.2 
Profit on ordinary activities before interest 176.8 169.2 183.0 76.7 150.6 
Net interest payable
Group (37.3) (39.9) (45.8) (44.9) (40.8)
Associates (1.5) (1.0) 0.2 – –
Interest capitalised 1.1 1.2 1.5 1.0 0.8 
(37.7) (39.7) (44.1) (43.9) (40.0)
Profit on ordinary activities before taxation 139.1 129.5 138.9 32.8 110.6 
Underlying profit before taxation* 138.1 130.4 124.3 113.5 110.2 
Group financial statistics 2002 2001 2000 1999 1998
Earnings per share – basic 30.9p 27.8p 30.6p 0.1p 21.1p 
Earnings per share – underlying* 30.4p 28.1p 26.3p 23.1p 21.0p 
Dividend per share 14.75p 13.75p 12.75p 11.50p 10.25p 
Net assets per share 308p 294p 285p 262p 271p 
Net borrowings as a percentage of equity shareholders' funds 44.6% 53.1% 45.3% 59.9% 56.8%
* Before goodwill amortisation, provision for restructuring, exceptional items, goodwill and fixed asset impairment, profit on disposal of discontinued operations and profit on sale of fixed assets.
All comparatives have been restated for the effects of Financial Reporting Standard 19 - Deferred T ax (note 34).
Five-year summary 73
Group balance sheet
2002 2001 2000 1999 1998
£m £m £m £m £m
Fixed assets
Intangible assets 15.4 23.9 23.3 10.4 72.4 
T angible operating assets 834.0 798.0 744.3 711.9 692.4 
T angible property assets 568.8 588.5 614.9 704.0 745.4 
Investments 50.2 48.0 50.4 35.0 29.5 
1,468.4 1,458.4 1,432.9 1,461.3 1,539.7 
Property developments and land held for sale 38.3 44.2 29.7 21.8 25.7 
Net current assets, liabilities and deferred income (47.3) (35.3) (49.7) (36.2) (30.1)
Net borrowings (450.1) (508.9) (440.7) (542.2) (556.3)
Net assets 1,009.3 958.4 972.2 904.7 979.0 
Capital and reserves
Called-up share capital 82.0 81.6 85.2 86.2 90.5 
Share premium account 77.4 70.9 63.1 57.7 53.5 
Revaluation reserve 627.9 641.7 642.1 660.9 612.8 
Other reserves 37.0 37.0 33.9 12.6 7.9 
Profit and loss account 185.0 127.2 147.9 87.3 214.3 
Equity shareholders' funds 1,009.3 958.4 972.2 904.7 979.0 
Group cash flow
2002 2001 2000 1999 1998
£m £m £m £m £m
Net cash inflow from operating activities 199.1 165.2 191.5 177.6 180.3 
Dividends received from associated undertakings 2.4 3.6 2.0 1.5 2.8 
Net interest paid (37.1) (39.9) (46.6) (44.4) (36.4)
T axation (25.7) (28.2) (14.0) (26.4) (28.5)
Gross capital expenditure (76.7) (62.4) (88.9) (64.6) (46.2)
Sales of fixed assets 3.4 2.1 75.0 64.5 17.7 
Movement on investment in own shares 1.3 5.6 2.4 (2.6) (2.8)
Free cash flow 66.7 46.0 121.4 105.6 86.9 
Acquisitions and disposals 29.1 (5.5) 40.9 (2.4) (119.5)
Equity dividends paid (46.6) (44.5) (40.9) (37.8) (35.8)
Net cash inflow/(outflow) before financing 49.2 (4.0) 121.4 65.4 (68.4)
Issue of shares 4.8 5.6 3.9 3.7 3.6 
Repurchase of shares – (68.3) (18.4) (54.2) (80.7)
Borrowings on acquisition of subsidiary undertakings – – (1.6) – (21.2)
Currency translation differences 4.8 (1.5) (3.8) (0.8) – 
Net increase/(decrease) in borrowings less cash 58.8 (68.2) 101.5 14.1 (166.7)
Net borrowings at 1 January (508.9) (440.7) (542.2) (556.3) (389.6)
Net borrowings at 31 December (450.1) (508.9) (440.7) (542.2) (556.3)
All comparatives have been restated for the effects of Financial Reporting Standard 19 – Deferred Tax (note 34). 74 Associated British Ports Holdings PLC Annual Report & Accounts 2002
Notice is hereby given that the 21st Annual General
Meeting (AGM) of Associated British Ports Holdings
PLC will be held at the Queen Elizabeth II
Conference Centre, Broad Sanctuary , Westminster ,
London SW1P 3EE on T uesday , 15 April 2003 at 12
noon for the following purposes:
Ordinary resolutions
Resolution 1
THA T the directors’ report and the audited accounts
for the year ended 31 December 2002 be received
and adopted.
Resolution 2 
THAT the remuneration report, as set out on pages
66 to 69 of the Annual Report & Accounts, be
approved.
Resolution 3 
THAT a final dividend of 8.25 pence per ordinary
share of the company be declared.
Resolution 4
THAT Mr R J Adam be re-elected as a director .
Resolution 5
THAT Mr A J Adams be re-elected as a director .
Resolution 6
THAT Mr S J Chambers be re-elected as a director .
Resolution 7
THA T PricewaterhouseCoopers LLP be re-appointed
auditors of the company (having previously been
appointed by the board to fill the casual vacancy arising
by reason of the resignation of
PricewaterhouseCoopers), to hold office until the
conclusion of the next general meeting at which
accounts are laid before the company .
Resolution 8
THA T the dir ectors be authorised to set the r emuneration
of PricewaterhouseCoopers LLP as auditors.
Resolution 9
THAT the company be authorised to establish 
The Associated British Ports Long-T erm Incentive
Plan, a summary of the rules of which is set out in
the appendix  to the letter from the Chairman of the
company to shareholders dated 11 March 2003,
and the directors  be authorised to:
(i) do all acts and things necessary to establish and
carry it into effect;
(ii) vote and  be counted in the quorum on any matter
connected with the plan (except that no director
may vote or be counted in the quorum in respect
of his own participation) and any prohibition in the
articles of association be relaxed.
Resolution 10
THAT the directors be and they are hereby generally
and unconditionally authorised to exercise all powers
of the company to allot relevant securities (within the
meaning of Section 80 of the Companies Act 1985)
in substitution for any existing power to allot relevant
securities (within the meaning of the said Section 80)
up to an aggregate nominal amount of £27,409,096
(being the lesser of the unissued ordinary share
capital and one-third of the issued share capital of
the company) during the period expiring on the date
of the AGM of the company to be held in 2004, and
at any time thereafter , in pursuance of any offer or
agreement made by the company before such expiry .
Special resolutions
Resolution 11
THAT , subject to the passing of resolution 10
above, the directors be empowered pursuant to
Section 95 of the Companies Act 1985 to allot
equity securities (within the meaning of Section 94
of the said Act) for cash pursuant to the authority
conferred by the said previous resolution as if sub-
section (1) of Section 89 of the said Act did not
apply to any such allotment provided that this
power shall be limited:
(i) to the allotment of equity securities in connection
with an offer of securities, open for acceptance for
a period determined by the directors, by way of rights
to holders of ordinary shares on the register on a
fixed record date in proportion to their respective
holdings of such ordinary shares or in accordance
with the rights attached thereto (but subject to such
exclusions or other arrangements as the directors
may deem necessary or expedient to deal with
fractional entitlements that would otherwise arise
or with legal or practical problems under the law
of, or the requirements of, any regulatory body or
any stock exchange in, any territory);
(ii) to the allotment (otherwise than pursuant to sub-
paragraph (i) above) of equity securities up to an
aggregate nominal value of £4,111,364 (being
not more than five per cent of the issued ordinary
share capital of the company);
and shall expire on the date of the next AGM of the
company after the passing of this resolution save
that, after such expiry , the directors may allot
securities in pursuance of an offer or agreement made
by the company before such expiry .
Notice of meeting 75
Resolution 12
THA T the company be generally and unconditionally
authorised to make one or more market purchases
(within the meaning of Section 163(3) of the Companies
Act 1985) on the London Stock Exchange of up to a
maximum aggregate amount equal to the lower of:
(i) 32.8 million ordinary shares of 25p each in the
capital of the company (being 10 per cent of the
company’ s issued ordinary share capital as at 19
February 2003);
(ii) 10 per cent of the company’ s issued ordinary share
capital as at the date of passing of this resolution; 
at a price per share of not less than 25p and not more
than 105 per cent of the average of the middle- market
quotations for such an ordinary share, as derived from
the London Stock Exchange Daily Official List, for the
five business days immediately preceding the day of
purchase; unless previously revoked or varied, such
authority will expire at the conclusion of the AGM of the
company to be held in 2004, save that the company
may purchase ordinary shares at any later date where
such purchase is pursuant to any contract or contracts
made by the company before the expiry of this authority .
By order of the board
Hywel Rees
Company Secretary
150 Holborn
London EC1N 2LR
11 March 2003
The Register of Directors’ Shareholdings will be
available for reference at the commencement of and
during the continuance of the AGM.
Members entitled to attend and vote at the above
meeting are entitled to appoint one or more proxies
to attend and on a poll to vote instead of them; a
proxy need not be a member . T o be effective,
proxies must be lodged at Computershare Investor
Services PLC, Registrars, The Pavilions, Bridgwater
Road, Bristol, BS13 8FB, not later than 48 hours
before the time of the meeting. 
Legislation has now been passed which permits
shareholders to appoint a proxy electronically . T o
submit a proxy form via the internet, shareholders
will need an internet-enabled PC with Internet
Explorer 4 or Netscape 4 or above. A shareholder
reference number (SRN) and a Personal
Identification Number (PIN), which are given on the
proxy form, will also be needed to access the
service.
Use of the electronic proxy appointment service is
entirely voluntary . Shareholders may continue to
submit their proxy card by post, if desired.
Pursuant to regulation 20 and schedule 4 of the
Uncertificated Securities Regulations 2001, only
those shareholders registered in the Register of
Members as at 12 noon on 13 April 2003 shall be
entitled to attend or vote at the AGM in respect of the
number of ordinary shares registered in their name at
that time. Changes to entries on the Register of
Members after 12 noon on 13 April 2003 shall be
disregarded in determining the rights of any person
to attend or vote at the meeting. 76 76 Associated British Ports Holdings PLC Annual Report & Accounts 2002 76
Associated British 
Ports Holdings PLC
150 Holborn
London EC1N 2LR
T +44 (0) 20 7430 1177
F +44 (0) 20 7430 1384
pr@abports.co.uk 
www.abports.co.uk 
Associated British Ports
150 Holborn
London EC1N 2LR
T +44 (0) 20 7430 1177
F +44 (0) 20 7430 1384
AMPORTS
9240 Blount Island Blvd
Jacksonville, FL 32226
USA
T +1 904 751 4391
F +1 904 751 1712
www.amports.com
Board of directors
Non-executive directors
Ross Sayers (Chairman)
2, 3
George Duncan*
,2,3
Aubrey Adams
1,2,3
Tim Bowdler
1,2,3
Stuart Chambers
2,3
Derek Sach
1,2,3
Andrew Simon, OBE
1,2,3
Executive directors
Bo Lerenius (Group Chief Executive)
3
Richard Adam (Group Finance Director)
* Retires on 15 April 2003
1 Member of the Audit Committee 
2 Member of the Remuneration Committee 
3 Member of the Nomination Committee
Secretary and registered office
Hywel Rees FCIS
150 Holborn
London EC1N 2LR
Registered in England No. 1612178
Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Brokers
Cazenove & Co. Ltd
12 T okenhouse Y ard
London EC2R 7AN
Merrill Lynch International
Merrill Lynch Financial Centre
2 King Edward Street
London EC1A 1HQ
Investment Bankers
Merrill Lynch International
Merrill Lynch Financial Centre
2 King Edward Street
London EC1A 1HQ
Registrars
Computershare Investor Services PLC
PO Box 435
Owen House
8 Bankhead Crossway North
Edinburgh EH11 4BR
www.computershare.com
Solicitors
Slaughter and May
One Bunhill Row
London EC1Y 8YY
11 March 2003
2002 Annual Report & Accounts
15 April 2003
Annual General Meeting
1 May 2003
Payment of 2002 final dividend
June 2003
T rading statement – pre-2003 interim results
September 2003
Publication of 2003 interim results
November 2003
Payment of 2003 interim dividend
December 2003
T rading statement – pre-2003 full-year results
February 2004
2003 preliminary results 
March 2004
2003 Annual Report & Accounts
Shareholder services
Share dealing service
The company’ s brokers, Cazenove & Co. Ltd,
provide a simple, low-cost, postal share dealing
service for the buying and selling of the company’ s
shares.
Further information, including the necessary forms,
can be obtained from Cazenove & Co. Ltd, 
Share Schemes Department, 3 Copthall Avenue,
London EC2R 7BH.
T +44 (0)20 7606 1768
Share price information
Latest share price information can be obtained from
the group’ s website (www.abports.co.uk), 
Ceefax, T eletext, and the Cityline service operated
by the Financial Times.
T +44 (0)906 843 1675
Electronic communication
Shareholders wishing to receive communications
from the company by e-mail should register on-line
at www.computershare.com/register/uk
Enquiries
Administrative enquiries relating to the group’ s
shares should, in the first instance, be directed to the
Registrars.
Internet
This Annual Report & Accounts and other
information about the group is available at
www.abports.co.uk
Company information Financial highlights
2002 2001** 2000**
Profit and loss account
Group turnover – continuing operations £m 401.9 375.8 342.7
Underlying operating profit – continuing operations ports and transport* £m 142.9 137.6 128.6
T otal underlying operating profit – continuing operations* £m 172.2 167.1 161.1
Exceptional items £m 2.6 0.6 15.4
Underlying interest cover* Times 4.7 4.3 3.8
Underlying profit before taxation* £m 138.1 130.4 124.3
Profit before taxation £m 139.1 129.5 138.9
Underlying earnings per share* Pence 30.4 28.1 26.3
Basic earnings per share Pence 30.9 27.8 30.6
Dividends
Dividend per share Pence 14.75 13.75 12.75
Underlying dividend cover* Times 2.0 2.1 2.1
Cash flow statement
Net cash inflow from operating activities including dividends received from associated undertakings £m 201.5 168.8 193.5
Underlying operating profit cash conversion* Percentage 114.6 99.2 114.9
Gross capital expenditure £m 76.7 62.4 88.9
Free cash flow £m 66.7 46.0 121.4
Repurchase of shares £m – 68.3 18.4
Balance sheet
Net borrowings £m 450.1 508.9 440.7
Gearing Percentage 44.6 53.1 45.3
Net assets £m 1,009.3 958.4 972.2
Net asset per share Pence 308 294 285
* Before goodwill amortisation and exceptional items
** Restated for the effects of Financial Reporting Standard 19 – Deferred Tax (note 34)
• UK’s largest and leading ports group
• No single type of cargo accounts for more than 10% of the
group’s UK ports’ turnover
Designed by Merchant with navyblue.  
Photography by Richard Learoyd and Lee Funnell. Copyediting by Stuart Daniel. 
Printed by Wace Corporate Print
This Annual Report is printed on Accent Glacier White paper manufactured from
ECF pulp to ISO 14001 international environmental standards
• Over 50% of the group’s UK ports’ business for 2003 is
already under contract
• 21 ports provide good geographical spread of risk 78 Associated British Ports Holdings PLC Annual Report & Accounts 2002 78 78 Associated British Ports Holdings PLC Annual Report & Accounts 2002 78 78 Associated British Ports Holdings PLC Annual Report & Accounts 2002 78 78 Associated British Ports Holdings PLC Annual Report & Accounts 2002 78 78 Associated British Ports Holdings PLC Annual Report & Accounts 2002 78 78 78
Associated British Ports Holdings PLC
150 Holborn
London EC1N 2LR
T +44 (0)20 7 430 1177
F +44 (0)20 7 430 1384
www.abports.co.uk
Earnings per share* up 8% year on year
Over the past three years we have grown earnings
per share and dividends by 10% and 9% each
year* respectively.
* Underlying earnings per share and compound growth rates