ANNUAL REPORT 2003
ANNU AL REPORT 2003
PRINTED BY TAYLOR BLO XHAM LIMITED
55563_Marshalls_R&A_cover  29/4/04  12:29 pm  Page 1 Marshalls plc     Annual Report 2003
1999      2000      2001  2002     2003 
9.00
8.00
9.50
10.00
11.00
Dividend per ordinary share
(pence)
1999      2000      2001  2002     2003 
16.73
16.98
17.58
19.41
21.46
Adjusted basic earnings per share
(pence)
1999      2000      2001  2002     2003 
41.9 42.2
45.3
50.3
53.1
Operating profit (£m)
1999      2000  2001     2002      2003
298.2
278.5
328.0
342.1 349.5
Turnover (£m)
1
Financial Highlights
Granite Setts, Thames Embankment Corporate Objectives
To supply our customers with the highest quality
products and provide outstanding levels of sales
and delivery service, incapable of being matched
by our competitors, and thereby increasing our
market share.
To undertake this challenging task with the
objective of delivering superior rates of return to
our shareholders and providing opportunities
and reward for our employees.
Profile
Marshalls produces landscape, garden and patio
products from concrete, clay and natural stone for
domestic, commercial and public sector use.
The home improvement and home building
markets are the largest users of the Group’s
products. Commercial and public sector
applications include industrial, retail, new build
projects and repair and maintenance.
Marshalls’ customers are the large builders
merchant groups, independent builders
merchants, garden centres, contractors and local
authorities. Products are distributed from a
national network of manufacturing and Service
Centres either to customers’ depots or, at their
request, direct to site.
Marshalls plc     Annual Report 2003 2
Cream Mix Smooth Brick, University Library, Coventry CONTENTS
Financial Highlights 1
Corporate Objectives and Profile 2
Chairman’s Statement 5-7
Chief Executive’s Review 8-13
Financial Review 14-16
Directors and Advisers 17
Corporate Social Responsibility 18-19
Environmental Statement 20-23
Directors’ Report 24-25
Corporate Governance 26-28
Directors’ Remuneration Report 29-34
Independent Auditors’ Report 35
Consolidated Profit and Loss Account 36
Balance Sheets 37
Consolidated Cash Flow Statement 38
Other Primary Statements 39
Notes to the Financial Statements 40-62
Shareholder Information 63
Financial History 64
3
Marshalls plc     Annual Report 2003
Tegula Cobbles, Traditional Yorkstone Paving, Trafalgar Square Chairman’s Statement
For the sixth year in a row, the Group has achieved
record sales and profit before taxation. Turnover
in the twelve months to 31 December 2003
increased by 2.2 per cent, to £349.5 million (2002:
£342.1 million) and, on a like for like basis, this
increase was 6.5%. Operating profit in the year
increased by 5.6 per cent to £53.1 million (2002:
£50.3 million) and on a like for like basis the
growth was 7.1%. These like for like results
exclude the Flooring business that was sold in
November 2002 and the effect of two small
acquisitions.
Group Overview
All Divisions produced good sales growth.
Landscape Products increased by 6.8 per cent,
Clay Products by 6.2 per cent, and Natural Stone,
including acquisitions, by 14.3 per cent. In a low
inflation environment this sales growth is very
pleasing. Our improvement in profitability is
underpinned by four things: a strong marketing
and new product development programme; a
commitment to the highest levels of customer
service; a programme of capital investment which
has amounted to over £100 million in the past
three years; and a relentless drive to lower
operating costs.
Landscape Products Division
The Division had sales of £288.8 million (2002:
£270.4 million), an increase of 6.8 per cent over
last year. Operating profit was £44.9 million (2002:
£41.2 million), up 8.8 per cent.
Activity during the year was as strong in the
commercial and public sectors as it was in the
domestic business. Our network of Approved
Installers enables us to maintain a close watch on
order backlog. This information gives us
confidence to believe that the outlook remains
positive.
5 Marshalls plc     Annual Report 2003
Clay Products Division
The Division increased sales by 6.2 per cent to
£32.1 million (2002: £30.3 million). Operating
profit was £4.2 million (2002: £4.4 million).
After a poor start to 2003, which as we explained
in our half-year statement was due to a shortage
of supply of a certain raw material, sales in the
second half were 8.7 per cent ahead of the second
half of 2002. The underlying increase in operating
profit has shown good progress in the second half
of the year.
The outlook is encouraging with industry stocks at
historically low levels and demand stronger than
it has been for some years. We also believe we can
achieve further improvements in our operating
efficiency.
Haworth Moor Natural Sandstone, Huddersfield Marshalls plc     Annual Report 2003 6
Natural Stone Division
Sales in the Division amounted to £28.5 million
(2002: £25.0 million), 14.3 per cent ahead of 2002.
These numbers include acquisition turnover that
accounted for 11.3 per cent of this growth.
Operating profit increased by 23.5 per cent to £4.1
million (2002: £3.3 million) of which 16.2 per cent
arose from acquisitions.
The Division tends to be associated with high
profile prestigious projects, most recently the
pedestrianisation of Trafalgar Square, and the re-
layout of the Somerset House courtyard.
Currently, the Division is supplying products for
Terminal 5 at Heathrow Airport. Other prestige
schemes in towns and cities around the country
are in the pipeline.
Balance Sheet
The Group balance sheet remains strong. Cash
inflow from operating activities amounted to
£81.3 million (2002: £54.6 million). Net
borrowings at the year-end of £13.2 million (2002:
£17.9 million) represent gearing of 6.1 per cent
(2002: 8.8 per cent) despite capital expenditure of
£40.8 million. Stock was reduced by £6.2 million in
the year.
Dividend
The Board recommends a final dividend of 7.35p
(2002: 6.70p) per ordinary share making a total of
11.00p (2002: 10.00p) for the year, an increase of
10.0 per cent compared with 2002. The dividend
will be paid on 7 July 2004 to shareholders on the
Register on 4 June 2004. The ex-dividend date will
be 2 June 2004.
Rustic Paving, Arbroath Abbey
Rialta Sett Paving, Berwick-upon-Tweed Marshalls plc     Annual Report 2003 7
Improved Capital Structure / Return of
Value to Shareholders
The Board of Marshalls intends, subject to the
arrangement of appropriate debt financing and
following approval by shareholders at a Court
Meeting and an Extraordinary General Meeting
which will both follow the Annual General
Meeting set for 10 June 2004, to return in the
order of £75 million to shareholders during the
course of this summer.
It is envisaged that this return of value will be
undertaken through the creation of redeemable B
shares (and the subsequent redemption thereof)
and will be achieved through the introduction of
a new holding company for the Group via a court-
approved scheme of arrangement and a
subsequent reduction of capital, thereby creating
additional distributable reserves for the Group.
This return of value will enable Marshalls to create
a more efficient capital structure, whilst also
providing it with sufficient financial flexibility to
take advantage of future investment
opportunities.
Management
As previously announced, Graham Holden, Chief
Executive of the Landscape Products Division
since November 2000, has become Group Chief
Executive with effect from 1 January 2004. David
Sarti, who was Operations Director of that
Division, has been appointed Managing Director
of Marshalls Landscape Products.
John Marshall, Deputy Chairman, who has worked
at Marshalls for more than forty years, and been a
member of the Board since 1972, has indicated
that he would like to retire at the Annual General
Meeting. This is slightly ahead of what would have
been his expected retirement date, but the Board
has accepted his decision.
He has made a very valuable contribution to the
business over the years, especially through his
unique knowledge of all our production facilities.
He will be missed by everybody at Marshalls from
the shop floor to his Board colleagues. He will also
be remembered with affection by his many
friends in the Industry both in the UK and other
parts of the world.
I would like personally to record my appreciation
for the loyal support, help and encouragement he
has given me during my time as Chairman.
During the second half of the year, there was a
complete change in Non Executive Directors with
the appointment of Andrew Allner and Richard
Scholes. In the light of these recent Board
changes, the Board has now started the process of
finding a new Chairman. This follows my decision
to step down as Chairman at the conclusion of the
Annual General Meeting.
I would like to thank my fellow Directors, the
management team and all employees throughout
the Group for their excellent contribution towards
achieving another record result in 2003.
Christopher Burnett
Chairman 8 Marshalls plc     Annual Report 2003
Chief Executive’s Review
All three Divisions made progress in 2003 and
contributed to the Group achieving a profit before
tax of more than £50 million for the first time. This
was made possible largely through the hard work
and dedication of our managers and employees in
delivering our business plans. I would like to
express my sincere thanks to them all. The
paragraphs that follow give some insight into
how this result was achieved.
Landscape Products Division
Sales in 2003 were £288.8 million (2002: £270.4
million) an increase of 6.8 per cent over last year.
Operating profit rose by 8.8 per cent to £44.9
million (2002: £41.2 million).
Drivesett Tegula Circle Marshalls plc     Annual Report 2003 9
The Marshalls Register of approved installers,
created to guarantee quality of installation, and
therefore provide peace of mind for the home
owner, is now in its fourth year of existence.
During 2003 the number of installers on the
Register increased by 11 per cent.
During the year we began working with a number
of the major housebuilders to offer buyers the
option of a Marshalls designed garden as part of
the package. The offer includes our normal ten
year guarantee, because the installation is carried
out by members of the Register. The scheme is in
its early stages but initial response is very
encouraging.
The objective of our marketing is also to ensure
that consumers are aware of the full range of
products Marshalls has available to transform
gardens and driveways. Our market research
confirms a hunger for new products that are
aesthetically different in terms of colour, shape,
size and finish. We therefore continue to invest in
product innovation to satisfy this demand. An
example would be our Woodstone range
introduced in 2003 which we will add to in 2004.
Domestic Market
The domestic market for landscape products
continued to grow in 2003. Sales increased by 
7 per cent. The results were helped by increased
marketing. For the first time we sponsored the
lunchtime television slot on UK Style, a satellite
channel focussed on gardening programmes. This
and other promotional expenditure, designed to
grow the market, improve brand awareness and
create leads for installers who are members of the
Marshalls Register worked very successfully. A total
of 200,000 telephone and web based enquiries
were generated during the year for the Marshalls
Register members. Consumer brand awareness
increased substantially. To build on this success TV
sponsorship has been renewed for 2004.
Woodstone Diagonal Decking, Light Oak
Driveline Elite, Heather Marshalls plc     Annual Report 2003 10
Commercial and Public Sector Market
Sales to the commercial and public sector market
for landscape products grew by 7 per cent in
2003. In this important part of our business we
have been working with architects and others to
develop new products and product solutions.
During 2003 we launched a new range of paving
offering exciting shapes and colours to allow
much more scope for freedom of expression by
architects in the design and layout of the
landscape surrounding commercial and public
sector building projects. Also, after extensive
market research, we have carried this idea
through to the creation of co-ordinated product
solutions focussed on different types of landscape
projects like schools, hospitals, offices and retail.
In addition we provide high quality technical
advice and support from the conceptual stage of
a project through to final installation. We have
recently developed a patented method for
producing our commercial block paving in a
packaged format suitable for immediate machine
laying in large commercial projects. This
significantly speeds up installation and reduces
the amount of manpower needed.
La Linia, Light Granite 11 Marshalls plc     Annual Report 2003
Manufacturing and Distribution
The operating strategy of the Division which we 
have continued to refine, combines regional
manufacturing and distribution sites with national
manufacturing works, that produce all newly
introduced and special products that have not yet
reached the commercial volumes that would justify
regional manufacture.
The regional sites are known as ‘Service Centres’and
are unique in the Industry. Each of them can supply
customers in the area with our full range of products.
The products we sell are bulky and relatively low
value, and therefore expensive to distribute.
The Service Centres give Marshalls a major
competitive advantage by being close to market.
This will be even more significant when in 2005 the
Working Time Directive is introduced in the haulage
industry, predicted to increase distribution costs by
an estimated 15 per cent.
During 2003 the Division spent £36 million on
capital expenditure. There were two large projects
carried out besides normal replacement and
efficiency improvements.
The first major project involved the rebuilding and
expansion of the Service Centre at Maltby, South
Yorkshire. Some existing product capacity was
replaced with more up to date equipment, and
additional capacity added to enable other products
to be made in the Region to make it self sufficient.
The first phase of the project is operational. The
remaining capacity is due to be commissioned in
April 2004.
The second major project was for an additional
production facility at Sandy, Bedfordshire, one of the
National Manufacturing sites. The new facility
includes plant to produce the two new product
families referred to earlier, the new colours and
shapes in concrete block paving, and the special
packs of concrete block paving suitable for being
laid by machine.
The remaining expenditure was for smaller
productivity improvement schemes with a rapid
payback, essential health and safety expenditure
and replacement of worn out assets.
Stocks
Finished goods stock levels have been reduced by
£5 million during 2003. This was achieved without
reducing manufacturing efficiencies and allowing
the maintenance of a stable employment pattern.
Numbers employed, were therefore constant
throughout the year. Production levels have now
been increased, helped by further productivity gains
from the investment we have made. Sophisticated
production scheduling software being introduced
during 2004, once fully implemented, will allow us to
reduce stock levels still further.
Outlook
In the domestic sector, Register members ended the
year with forward order books averaging 10 weeks.
This is similar to the position at the start of 2003, and
gives us confidence in terms of future demand as we
enter 2004.
The forecast for new work from the Construction
Products Association based on an interpretation of
current Government, Local Authority and private
spending plans shows continuing growth in new
work over the next three years. Our on-going focus
on the introduction of new product solutions
resulting in improved product mix gives us
confidence in our ability to deliver further growth
this year in commercial and public sector sales.
New Fleet Vehicles Marshalls plc     Annual Report 2003 12
Clay Products Division
Sales amounted to £32.1 million (2002: £30.3
million) an increase of 6.2 per cent. Operating
profit at £4.2 million was £0.2 million below 
last year. This result has to be viewed against the
background that, at the end of the first half,
operating profit was 26.1 per cent lower than
2002.
At the half year profits were lower due mainly to a
raw material supply problem at one of the brick
production sites. The problem was overcome and
together with the many profit improvement
projects we have underway, almost all the lost
ground was made up. Profits in the second half
were significantly ahead of last year.
Finished goods stocks were down by 38 per cent
to the lowest level since the early 1990’s. The
business generated net cash of £7.7 million in
2003. We have for some time been promising
shareholders an improved performance from the
Division in line with the standards we have
achieved  in the other parts of the Group. Under a
new Managing Director the results are now
starting to be delivered.
Outlook
The market for bricks was 4.4 per cent ahead in
2003. Industry stocks ended the year at
historically low levels. Market conditions are
therefore more favourable than for some time.
Our business is well placed to take advantage of
these improved trading conditions. With firmer
prices in the market, together with further
improvements in operating efficiency, we expect
to show further positive progress in 2004.
Cambridge Burwell White Brick, Thames Valley Marshalls plc     Annual Report 2003 13
Natural Stone Division
Sales at £28.5 million (2002: £25.0 million) were
14.3 per cent ahead of last year, helped by the
acquisition of a sand and gravel business made
just before last year end. Operating profit of £4.1
million (2002: £3.3 million) was 23.5 per cent up
on last year, and 7.3 per cent ahead on a like for
like basis.
A number of prestigious projects were completed
during the year. These included the further
pedestrianisation of Trafalgar Square. We
commenced supply for the perimeter roads at
Terminal 5 at Heathrow and, during 2004, will
supply product for Liverpool Package X and
Spitalfields in London.
We continued to invest in machinery to increase
productivity throughout the business. Further
benefits will result from this investment in 2004.
We have identified further stone reserves that we
own for paving and aggregates. These will be
developed progressively to provide additional
revenue streams during 2004.
Outlook
The expansion of Natural Stone since its
establishment as a separate Division has been
rapid. With the investment we are making in
equipment and the development of additional
reserves we expect the growth to continue.
Group Outlook
The progress that has been made in all three
Divisions during 2003, and the plans that have
been outlined above for 2004 should reassure
shareholders that the Group is in a strong position
to meet the challenges we face. It should also be
clear that we are strongly committed to maintain
the market leadership and profit growth we have
achieved in recent years.
Graham Holden
Chief Executive
Granite Bespoke Masonry, City Square, Leeds Marshalls plc     Annual Report 2003 14
Financial Review
charge for the year of £15.9 million (2002: £15.8
million) includes a deferred tax charge of £1.4
million (2002: £1.0 million).
Preference Dividends
The 1.1 million cumulative redeemable
preference shares of 20p each were redeemed at
£1 each on 1 October 2003. Prior to redemption,
preference dividends amounting to £0.1 million
were paid in the year.
Ordinary Dividends
An interim dividend of 3.65p (2002: 3.30p) per
share was paid on 8 December 2003. A final
dividend of 7.35p (2002: 6.70p) per share is now
being recommended for payment on 7 July 2004.
This gives a total of 11.00p (2002: 10.00p) per share
for the year, an increase of 10.0 per cent over 2002.
Dividend is covered 1.9 times (2002: 2.0 times).
Earnings per Share
The calculations of the basic, diluted and adjusted
basic earnings per share are set out in Note 10 to
the Financial Statements in accordance with
FRS14. The basic earnings per share amounts to
20.61p (2002: 20.05p) an increase of 2.8 per cent.
Adjusted basic earnings per share, prepared in
order to show the underlying performance of the
business, increased by 10.6 per cent to 21.46p
(2002: 19.41p).
Balance Sheet
The balance sheet continues to be strengthened
with net assets increasing to £218.1 million (2002:
£202.7 million). Net assets at the year end amount
to £1.30 per share (2002: £1.21 per share).
Marshalls achieved another record year in 2003
with profits attributable to ordinary shareholders of
£34.4 million which represents an increase of 10.2
per cent over the previous year after excluding the
2002 gain on the disposal of the Flooring business.
Dividends to ordinary shareholders, combining
both paid and proposed, at 11.00p per share have
increased by 10.0 per cent. The key financial
highlights are summarised below.
Group Results
Turnover achieved a record £349.5 million (2002:
£342.1 million). Excluding the turnover of our
Flooring business that was sold in November
2002, this represents an increase of 7.3 per cent
over the prior year.
Operating profit, excluding the Flooring business,
was 8.6% ahead of the prior year.
Operating profit is after charging goodwill
amortisation of £1.4 million (2002: £1.2 million). In
November 2002 the Flooring business was sold
and the operating profit of that business was £1.4
million in that year. In addition, in 2002, a gain on
disposal of £2.3 million was disclosed as a non-
operating exceptional gain.
Net interest costs at £2.7 million (2002: £3.2
million), including £2.3 million (2002: £2.3 million)
relating to interest on the £20 million fixed rate
debenture, have reduced and are covered 19.5
times (2002: 16.5 times).
Profit on ordinary activities before taxation was
£50.4 million (2002: £49.4 million) and, after
excluding the operating profit and gain on
disposal of the Flooring business, represents an
increase of 10.3 per cent.
Taxation
The current taxation charge for 2003 was £14.5
million (2002: £14.8 million) an effective tax rate of
28.7 per cent (2002: 29.9 per cent). The total 15 Marshalls plc     Annual Report 2003
Cash Flow and Borrowings
Cash inflow from operating activities was
significantly above the prior year at £81.3 million
(2002: £54.6 million). This improvement was
achieved primarily as a result of the higher
operating profit and improved working capital
management, in particular stocks. In the year
stock levels were significantly reduced particularly
in the Landscape Products and Clay Products
Divisions. The cash inflow from stocks in 2003
amounted to £6.7 million compared with an
outflow in 2002 of £9.7 million representing a
turnaround improvement in the cash inflow from
operating activities of £16.4 million.
The Group ended the year with net borrowings of
£13.2 million (2002: £17.9 million). Details of the
cash movements are included in the Cash Flow
Statement on page 38. Gearing at the year end is
reduced to 6.1 per cent (2002: 8.8 per cent).
The Group has a Multi-Line Facility with The Royal
Bank of Scotland. This provides for an additional
facility between February and July to meet the
seasonal working capital requirements of the
business. The facility is unsecured subject to a
composite cross guarantee given by Marshalls plc
and certain subsidiary undertakings. The facility
incurs commitment fees at market rates.
Included in the capital structure is a £20.0 million
fixed rate debenture raised in 1989 at 11.375 per
cent that matures in 2014. This debenture can
only be redeemed early by payment of a premium
linked to the gross redemption yield on 12 per
cent Exchequer Stock 2013/2017. Further details
are included in Note 18 on page 50.
Capital Expenditure 
Capital expenditure in the year was £40.8 million
(2002: £36.5 million). This brings the capital
investment in the last three years to over £100
million. During the year, capital has been invested
in plant to support new product innovations and 
in improving our Regional Service Centre
structure. These investments demonstrate our
commitment to remaining at the forefront of new
product development and improvements in
overall business efficiency.
Acquisitions
On 14 March 2003 the Group acquired Stone
Shippers Limited for a consideration of £1 million.
The Company is engaged in the importation and
distribution of stone products.
Post Balance Sheet Event
On 30 January 2004 the Group acquired The Great
British Bollard Company Limited for a
consideration of £510,000. The company
manufactures street furniture products and will
join our Landscape Products Division.
Accounting Standards
The financial statements have been prepared on the
basis of the accounting policies set out on pages 40
to 42.
Whilst the Group continues to account for pension
costs in accordance with Statement of Standard
Accounting Practice 24 "Accounting for Pension
Costs", it has also followed the transitional
arrangements of FRS17 and additional disclosure
requirements in respect of retirement benefits have
been set out in note 31 on pages 59 to 62.
All European Union Listed Groups are required to
adopt International Accounting Standards (IAS) for
their financial statements from 2005, which will
include comparative information for 2004. The
Group is currently undertaking a detailed review of
the impact of IAS on its published financial
statements. Marshalls plc     Annual Report 2003 16
These standards are themselves evolving and
undergoing improvement. Our ongoing review has
to date identified that the principal areas affected
are likely to be pension accounting (IAS19), non-
amortisation of goodwill (ED3) and the timing of
dividend recognition (IAS1). In addition the
adoption of IAS will result in changes to the format
and disclosure requirements of both the primary
financial statements and notes to the financial
statements.
Financing and Risk Management
The Group uses financial instruments to manage the
risks arising from its operations. All transactions are
undertaken only to manage the current risk
associated with the Group’s underlying business
activities.
The Group enters into derivative transactions,
principally forward foreign currency contracts of
relatively small value. The purpose of such
transactions is to manage the currency risks arising
from the Group’s operations.
It is the Group’s policy, and has been throughout the
period under review, that no speculative trading in
financial instruments shall be undertaken.
The main risks arising from the Group’s financial
instruments are interest rate risk, liquidity risk and
foreign currency risk. The Board reviews and agrees
policies for managing each of these risks and these
are summarised in Note 19 on pages 51 to 53 of the
Financial Statements. These policies have remained
unchanged since 2002.
Insurance
The Group manages its insurance risk by continuous
review and by maintaining a balance between
capped self insurance and third party cover against
major catastrophes.
Improved Capital Structure / Return of
Value to Shareholders
As outlined in the Chairman’s Statement on page 7,
the Board has announced that it intends to return
around £75 million to shareholders during the
course of the summer. This will require the
arrangement of appropriate debt finance and the
approval of shareholders at the Court Meeting of
Shareholders and Extraordinary General Meeting.
The court approved scheme of arrangement and
reduction of capital will create a more efficient
capital structure. This will also leave the Group well
placed to take advantage of future investment
opportunities.
Total Shareholder Return
At 1 January 1999 the ordinary share price was 133p
per share. By 31 December 2003 this had improved
to 251p per share. When dividends are included this
gives a total shareholder return of 131 per cent over
a 5 year performance period. This is illustrated in the
Performance graph on page 31 where the total
shareholder return of Marshalls plc is compared to
that of the FTSE 350 Construction and Building
Materials Sector Index over the last 5 years.
Ian Burrell
Finance Director
La Linia, Granite 17 Marshalls plc     Annual Report 2003
Richard Scholes (58) *†
Senior Non-Executive Director and Chairman of
the Audit Committee. He was appointed to the
Board on 23 July 2003. He is a Non-Executive
Director and Chairman of the Audit Committee of
Bodycote International plc, Chaucer Holdings PLC
and Crest Nicholson PLC. He is also a Non-
Executive Director of Keller Group PLC and is a
Chartered Accountant.
Andrew Allner (50) *†
Non-Executive Director and Chairman of the
Remuneration Committee. He was appointed to
the Board on 23 July 2003. He is Group Finance
Director of RHM Limited and was previously Chief
Executive Officer of Enodis Plc. He is a Chartered
Accountant and a former partner of Price
Waterhouse. He is a Non-Executive Director of
Moss Bros Group plc.
Directors Biographical Notes
Christopher Burnett (62)
Chairman. Joined the Board in 1993. He became
Non-Executive Chairman in November 1997 and
was Executive Chairman from 1999 until 31
December 2003.
John Marshall (59)
Executive Director and Deputy Chairman. Joined
the Company in 1963. A Board member since
1972.
Graham Holden (44)
Chief Executive. Joined the Company in 1986 and
was appointed to the Board in 1992. He is a
Chartered Accountant and was previously Finance
Director and Chief Executive of the Landscape
Products Division. He was appointed to his
current position on 1 January 2004.
Ian Burrell (46)
Finance Director. Joined the Company and the
Board in June 2001. He is a Chartered Accountant
and was previously Group Finance Director at
Cornwell Parker plc.
Registrars
Computershare Investor Services plc
PO Box 82, The Pavilions
Bridgwater Road
Bristol BS99 7NH
Shareholders’ enquiries should be addressed to the
Registrars at the above address (Tel: 0870 702 0000)
Registered Office
Birkby Grange
Birkby Hall Road
Huddersfield HD2 2YA
Telephone: 01484 438900    
Facsimile: 01484 438945
Internet address: http://www.marshalls.co.uk
Registered in England and Wales: No. 481574
Advisers
Stockbrokers
HSBC Investment Bank Plc
Auditors
KPMG Audit Plc
Legal Advisers
Herbert Smith
Eversheds
Financial Advisers
N M Rothschild & Sons Limited
Bankers
Royal Bank of Scotland plc
*  Member of the Audit Committee
†  Member of the Remuneration Committee Corporate Social Responsibility
Marshalls plc     Annual Report 2003 18
The Board takes regular account of the significance
of social, environmental and ethical matters to the
business of the Group and thus its comprehensive
risk management and internal control process
identifies and assesses the significant risks to the
Company’s short and long term value arising from
such matters.
Marshalls recognises its corporate social
responsibilities to its shareholders, customers and
suppliers and is committed to good practice.
Statement of Values and Principles
The Group’s statement of Values & Principles sets
out the high standards to which all Marshalls’
employees are encouraged and expected to
adhere. The statement includes guidance on
business practice and entertainment,
"whistleblowing" and equal opportunities.
Health and Safety
The continuing improvement of health and safety
performance is a key priority. We are now into the
seventh year of formal Health and Safety
improvement plans. Over the course of the last two
years over 90% of our employees have received
training in health and safety awareness and
incident prevention. As a minimum, they have
attended a one day Health and Safety Awareness
Course with a large number taking formal
qualifications in Health and Safety Management.
The courses are supported by the Group’s
Employee Health and Safety Handbook. Health
and Safety improvement remains a key area of
attention for 2004 and this is reflected in the
priorities of all our Managing Directors and
employees.
At factory level, health and safety is promoted by
Safety, Health and Incident Prevention Teams which
consist of employees and managers. We have
identified our major health and safety risk as being
from repetitive manual handling processes and it is
the Group’s policy to eliminate manual handling
wherever practicable.
The Group is committed to high standards of
health and safety for all of its employees. However,
from time to time, the operating subsidiaries have
received Improvement Notices from the Health and
Safety Executive (HSE) related to their activities.
Over the years the conditions of these notices have
always been satisfied within the timescale agreed
with the HSE. An exception concerns a recent
Improvement Notice issued by the HSE at one of
the factories in the Clay Products Division. Due to
the failure to meet the deadline agreed between
the HSE and the Clay Products Division the HSE
commenced a personal prosecution against the
Group Chairman, Mr C.T. Burnett. He has denied
liability and the matter is on-going. The conditions
of the Improvement Notice, which are related to
the installation of dust extraction equipment, have
now been met.
The Board monitors the Group’s accident statistics
on a monthly basis. The overall rate of workplace
injuries within the Company continues to fall. The
number of accidents legally reportable under the
Reporting of Injuries, Diseases and Dangerous
Occurrence Regulations (RIDDOR) has fallen from
Hazard Warning Paving, City Stadium, Manchester 19 Marshalls plc     Annual Report 2003
38.8 per 1,000 employees in 2002 to 34.6 per 1,000
employees in 2003. Our target is to reduce further
RIDDOR injuries by 10 per cent in 2004.
Accidents and Incidents 2003 2002
(rate per 1,000 employees)
Major injury 3.8 4.5
Injury resulting in over
3 days absence from work 30.8 34.3
All RIDDORS 34.6 38.8
Total UK headcount 3,088 3,369
Employees
It is Marshalls’ policy to treat all its employees fairly
and specifically to prohibit discrimination on the
grounds of race, religion, sex, nationality or ethnic
origin. Disabled people are given equal
consideration for all job vacancies for which they
are suitable. If employees become disabled the
Group continues employment wherever possible
and arranges retraining.
The Group recognises that its reputation is very
dependent on the quality, effectiveness and skill
base of its employees.
There is a commitment at Board level to ensure that
its employees and management are properly
inducted into the Company and given the
necessary training to fulfil their roles and to
develop their full capabilities. With ever increasing
customer demands, particular emphasis is placed
on customer service and interpersonal skills. The
Group’s investment in management development
continued to increase during the year and
programmes are in place with the principal aims of
ensuring consistent standards of management
practice across the Group, nurturing new potential
and ensuring succession to senior appointments.
Electronic communication in general has resulted
in a massive reduction in internal paperwork
throughout the Group.
Arrangements exist to keep all employees
informed of matters of concern to them through a
variety of media including the Group’s intranet,
newsletters and meetings.
Employees are encouraged to become
shareholders in the Company and the Group
operates a Save As You Earn Scheme.
Community
The Group is keen to contribute to the
communities in which it operates particularly
those neighbouring its sites. This is achieved
through charitable donations and other initiatives
that help the community.
During the year, the Group made charitable
donations of £15,098 (2002 : £26,410). It is the
Group’s policy not to make political donations and
no political donations were made in the year
(2002 : £Nil).
Natural Granite Paving Marshalls plc     Annual Report 2003 20
Environmental Statement
Board Responsibility
The Deputy Chairman, Mr J D Marshall, is the Board
Director responsible for the Environmental
performance of the Group.
Environmental Policy
The Group’s Environmental Policy was revised in
July 2003. The policy is displayed throughout the
Group and on the Group’s Website. The policy is:-
"Marshalls is committed to achieving the highest
standards of environmental performance and
continually aims to prevent pollution and minimise
the impact of its operations. The Group’s aim is that
no lasting environmental damage occurs as a result
of its activities, and policies are being implemented
to ensure that all of its operations meet or exceed
the requirements of legislation and applicable best
practice.
Marshalls regards compliance with relevant
environmental laws, and the adoption of
responsible standards where no legislation exists, as
an integral part of its business strategy and is
committed to considering the environmental
impacts associated with its products throughout
their life-cycle.
Marshalls has committed to monitor its
environmental performance in line with
Construction Products Association requirements,
and to set objectives and targets to improve its
impacts in key areas. These will be reviewed on at
least an annual basis to ensure continual
improvement.
Marshalls will continue to raise environmental
awareness within the Group through the
development and training of its employees and will
communicate openly and consult with customers,
suppliers and other stakeholders on relevant
environmental matters.
Marshalls strives to conserve natural habitats and
create additional areas of wildlife value wherever
possible. The Group also recognises the need for
sympathetic restoration and after use of quarry sites
and considers the character of the local
environment and the concerns of the community
when planning such matters".
Environmental Management
During the year, the focus has been on the
introduction of Integrated Management Systems
(IMS), combining BS EN ISO 14001 (Environment),
OHSAS 18001 (Health & Safety), and BS EN ISO 9001
– 2000 (Quality).
Six sites in the Landscape Products Division and one
site in the Natural Stone Division received
accreditation to the Standards forming an IMS
through BSI during 2003. The roll-out programme
for the introduction of IMS at all thirty-three of the
Group sites will continue during 2004 with seven
Landscape Products Division sites, one Clay
Products Division site and four Natural Stone
Division sites programmed to receive accreditation
during the year. It is also intended to put in place an
IMS at the Group Laboratory. The roll-out
programme extends to the second quarter of 2006.
The Group has identified the significant
environmental impact of its operations, which are
summarised below:-
Energy
The Group has now monitored its energy
consumption for its main operations since
January 2000.
The environmental impact of energy consumption
within the Group is monitored by two KPI’s which
are: Kilowatt hours consumed per production tonne
and Kilograms of CO2 produced per production
tonne. The number of Kilowatt hours consumed per
production tonne has reduced slightly since
January 2002, and is sensitive to levels of
production. More efficient production has
emphasised the importance of investigation into
the base load at each of the manufacturing units
and further energy monitoring is being introduced. 21 Marshalls plc     Annual Report 2003
Kilograms of CO2 per tonne produced also reflects
cyclical variations due to production levels, but
since 2002 the volume of CO2 produced per
production tonne has shown improvement,
although again further energy monitoring and
improvement measures are being introduced.
Climate Change Levy    
The second target period for the Climate Change
Levy for the Clay Products Division commenced on
1 October 2003. The Group is confident that the
target set will be met. The Clay Products Division is
also preparing for the implementation of the
European Emissions Trading Scheme,due to start on
1 January 2005.
Water Use
Considerable progress was made during 2003 in
introducing improved drainage and better water
recycling facilities throughout the Group. Not only
has this reduced the amount of water being
discharged from the sites,but has reduced the overall
consumption of water from  mains supply and bore
holes. Particular improvements have been made at
the West Lane and Brookfoot sites and  further work
is continuing at the Llay, Cannock and Maltby sites.
The recycling of fresh waste concrete has been
introduced at the West Lane Production Unit.
The Group KPI for annual water usage measures the
cubic metres of water obtained from either the
mains supply or from bore holes. During 2003,
increased recycling of water led to a reduction of
over 15% in the amount of mains supply and bore
hole water purchased by the Group.
The Group monitors discharged water on a monthly
basis at all the sites producing precast concrete
products, and on a quarterly basis at the Clay
Products Division sites. The monitoring
demonstrated that discharges at our West Lane and
Brookfoot sites were likely to exceed the revised
discharge consents proposed by the Environment
Agency. There was a short period of time when the
water being discharged exceeded the revised limit
set by the Environment Agency and action was
taken by the Group to address the problem.
Confirmation has now been received from the
Environment Agency that both Production Units are
fully compliant with the revised limits and in fact are
exceeding the Environment Agency requirements.
The majority of process water used by both sites is
now treated and recycled back into production.
Transport
During the year the Group has invested heavily in
new vehicles for its transport fleet and now all heavy
goods vehicles are compliant to "Euro three"
Enhanced Environmental Performance. The new
vehicles allow a further five tonne pay load reducing
the number of journeys required. New computer
software will allow more efficient planning and
reduce empty vehicle running by up to 50%.
The Group continues to develop alternative
transportation links for incoming aggregates in co-
operation with its suppliers. A major rail project is
under review and transportation by waterways
could still prove a viable option for two of the
Landscape Products Division sites.
Waste Reduction
Further progress has been made in reducing waste
from the manufacturing process. Recycling of waste
product is now the norm at all sites, with the
recycled material being incorporated back into the
production process. The introduction of new
European Standards for the majority of Group
products allows greater flexibility in the use of the
recycled materials for aggregates.
In the Landscape Products Division, waste material
from other industries is being recycled as an
aggregate replacement where it does not affect
product quality. Materials utilised include increased
quantities of china clay waste and steel slag waste. Marshalls plc     Annual Report 2003 22
Environmental Statement (continued)
Packaging  
During 2003 there has been a rationalisation in the
use of timber pallets that has reduced the number of
designs by 39%. The designs have been modified to
reduce timber content. Where possible pallets
returned by customers are repaired. Those beyond
repair are chipped.
There have been further reductions in the use of
polyethylene for packaging, with all polyethylene
being removed from kerb product during 2003. Trials
with thinner film gauges are ongoing. Improved
facilities for the recycling of polyethylene, including
dirty polyethylene have been introduced.
The use of stretch film to replace polyethylene has
continued during 2003.This has the benefit of no heat
being required to shrink the packaging to the product.
Packaging waste obligations are met through
Valpak’s compliance scheme. An audit by the
Environment Agency in 2004 confirmed that
Marshalls data capture was satisfactory.
Land Management
The Group continues to develop Brownfield sites.
During 2003 a new Head Office for the Landscape
Products Division was completed on a former coal
fired power station site.
A new manufacturing unit for concrete paving
blocks was built at the Maltby site within the
confines of the existing site boundary and at the
Sandy site a new Concrete Block Paving Plant was
installed after purchase of the adjoining industrial
site. At Stonemarket an adjoining office block was
refurbished for use by the Company. No
development took place on any greenfield site.
One of our subsidiary companies is currently
applying to re-work a quarry in Derbyshire to secure
dimensional stone for restoration, heritage and new
build projects.The development programme, which
is being undertaken in consultation with the
relevant authorities, is currently addressing some
local issues which have been raised. Careful
consideration is always given to the environmental
impact of all our quarry development and site
restoration projects.
An existing Natural Stone Quarry at Cross Platts was
restored by the use of quarry waste taken from an
adjoining manufacturing site and once the fill has
settled the land will be restored for agricultural use.
The landfill site at Howley Park has now been sealed
and restored for agricultural use.
Environmental Impact of Product
The bulk of the Group products are intended for
long-life with low maintenance with many products
having a life in excess of a 100 years.
Over such a life span the initial environmental
impact created during the manufacture and
installation process is minimal. The majority of
products produced by the Group can be easily
recycled at the end of their useful life, either in new
construction in the case of dry laid product or can
be crushed as a secondary aggregate.
The Group has made application to the Building
Research Establishment to develop environmental
profiles for products in each of its main
manufacturing areas.
Sustainable Urban Drainage Systems Marshalls plc     Annual Report 2003 23
Sustainability
The Group continues to have a major input into the
sustainable strategies being developed by trade
organisations. Following the publication of the Brick
Industry Sustainability Strategy in 2002, the British
Precast Concrete Federation is developing its own
strategy with a strong contribution from Marshalls.
Suppliers and Contractors
The Group has increased its supplier audits, which
includes the environmental aspects of their
operations. The Group’s major suppliers have all
developed, or are developing Environmental
Management Systems and many of the smaller
suppliers have followed this lead. Environmental
Management is one of the criteria considered
when examining a supplier’s qualifications for
Group orders.
Wildlife Trust
Marshalls strives to conserve natural habitats and
create additional areas of wildlife value where
possible.
The Group encourages its manufacturing sites to
join local Wildlife Trusts as part of its conservation
policy. Such links also improve relationships with
local communities.
Environmental Awareness and Training
As part of its ongoing commitment to
environmental improvement, the Group is
introducing further training for its regional
employees to ensure greater development of local
initiatives.
Environmental Awareness continues to be
improved within the Group with continued
emphasis on developing dialogue on
environmental matters, with its customers, suppliers
and other stakeholders.
Environmental Key Performance
Indicators
The Group has aligned its Environmental Key
Performance Indicators with those being developed
by the Construction Products Association. Databases
have been established for the following areas:
• Energy consumption;
• Identifying energy from renewable and
alternative sources;
• Water usage;
• Identifying the percentage of recyclable water;
• Transport movements;
• Waste reduction;
• Re-use of waste by recycling in-house and
externally; and
• Packaging management and the use of
recycled material in packaging.
Pollution, Prevention and Control
The Group has completed the A2 applications
required under PPC legislation for its four Clay
Products Division sites. There has been close
co-operation with the relevant Local Authorities
during the preparation of these applications.
In the Landscape Products and Natural Stone
Divisions, the majority of sites will fall into the
Category B Classification,although there are ongoing
discussions regarding sites where the increasing
recycling of water could lead to a requirement for
applications to be upgraded to A1 Classification.
Awards
During the year, the Sandy Works of the Landscape
Products Division received a Green Apple Award for
the development and promotion of Environmental
Best Practice. The Award is presented by the Royal
Society of Arts. The Group also received a highly
commended recommendation in the British Precast
Environmental Award for 2003 for the development
of water recycling and fresh waste concrete recycling
at its West Lane Works. Marshalls plc     Annual Report 2003 24
Directors’ Report
The Directors have pleasure in submitting their
Report and Financial Statements for the year
ended 31 December 2003.
Principal Activities and Business Review
The principal activities of the Group are the
manufacture and supply of specialist landscape,
clay and natural stone products. Further details of
the principal activities of the Group are set out in
Note 32 on page 62.
The Chairman’s Statement on pages 5 to 7 and the
Chief Executive and Financial Reviews on pages 8
to 16 contain a review of these activities.
Details of the Group’s policy in relation to
employees and information on charitable and
political donations are disclosed on page 19.
Details of the Group’s policies in relation to
Corporate Governance are disclosed on pages 26 to
28.
Group Results
The consolidated profit and loss account for the
year ended 31 December 2003 is shown on page
36. A segmental analysis of the operating profit by
activity is shown in Note 2 to the Financial
Statements.
Dividends
The Board is recommending a final dividend of
7.35p per share (2002: 6.70p) which, together with
the interim dividend of 3.65p (2002: 3.30p) per
share, makes a total for the year ended 31
December 2003 of 11.00p (2002 : 10.00p) per
share. Payment of the final dividend, if approved
at the Annual General Meeting, will be made on 7
July 2004 to shareholders registered at the close
of business on  4 June 2004.
Share Capital
Details of the share capital and allotments during
the year, which arose solely from the exercise of
options, are set out in Note 21 on pages 54 to 55.
Details of outstanding options under Employee
and Executive Share Schemes are set out in Note
21 on page 55. As outlined in the Financial Review
on page 14, the cumulative redeemable
preference shares were cancelled and repaid
during the year.
Acquisitions
On 14 March 2003, the Group acquired Stone
Shippers Limited, a company engaged in the
importation and distribution of stone products.
Payment to Suppliers
The Group follows the CBI’s prompt payment code
and operates and abides by a clearly defined
payment policy which has been agreed with all
major suppliers. The Group’s creditor payment
period at 31 December 2003 was 47 days (2002 :
46 days).
Fixed Assets
In the opinion of the Directors, the market value of
the Group’s properties is not materially different
from the value included in the Group financial
statements.
Development Expenditure
Development of new products is a continuous
process and expenditure is written off as incurred.
Directors
The names of the Directors as at the date of this
report together with biographical details are set
out on page 17. 25 Marshalls plc     Annual Report 2003
Mr M.A. Stacey resigned as a Director on 6 January
2003. In accordance with the Articles of
Association, Mr J.W. Footman retired by rotation
at the Annual General Meeting and he did not
seek re-election. Mr R.A. Barfield resigned on 13
June 2003.
Mr A.J. Allner and Mr R.T. Scholes were both
appointed as Directors on 23 July 2003 and in
accordance with the Articles of Association offer
themselves for re-election at the forthcoming
Annual General Meeting.
In accordance with the Articles of Association, Mr
C.T. Burnett retires by rotation at the forthcoming
Annual General Meeting. Mr C.T. Burnett is not
seeking re-election and will retire as Director and
Chairman  at the conclusion of the Annual General
Meeting.
Full details of Directors’ remuneration, interests in
the share capital of  the Company and of their
share options are set out on pages 29 to 34 in the
Directors’ Remuneration Report.
Substantial Shareholdings
As at 5 March 2004, the Company had been
notified of the following substantial interests of
3 per cent or more in its ordinary issued share
capital:
%
AXA S.A. 5.03
Aviva plc 4.72
Threadneedle Asset Management Limited 3.27
Legal and General Group plc 3.09
Statement of Directors’ Responsibilities
Company law requires the Directors to prepare
financial statements for each financial year which
give a true and fair view of the state of affairs of
the Company and the Group and of the profit or
loss for that period. In preparing those financial
statements, the Directors are required to:
. select suitable accounting policies and then
apply them consistently;
. make judgements and estimates that are
reasonable and prudent;
. state whether applicable accounting
standards have been followed, subject to any
material departures disclosed and explained
in the financial statements; and
. prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group will continue in
business.
The Directors are responsible for keeping proper
accounting records which disclose with
reasonable accuracy at any time the financial
position of the Company and to enable them to
ensure that the financial statements comply with
the Companies Act 1985. They have general
responsibility for taking such steps as are
reasonably open to them to safeguard the assets
of the Group and to prevent and detect fraud and
other irregularities.
Annual General Meeting
The Notice convening the Annual General
Meeting to be held at Birkby Grange at 12 noon
on Thursday 10 June 2004, together with
explanatory notes on the resolutions to be
proposed, is contained in a circular to be sent to
shareholders with this Report.
A Court Meeting of Shareholders and an
Extraordinary General Meeting will also take place
on 10 June 2004 in relation to the scheme of
arrangement referred to in the Chairman’s
Statement on page 7.
Auditors
In accordance with Section 384 of the Companies
Act 1985 a resolution re-appointing KPMG Audit
Plc as Auditors for the ensuing year will be
proposed at the Company’s Annual General
Meeting.
By Order of the Board
Ian Burrell
Director and Company Secretary
5 March 2004 Marshalls plc     Annual Report 2003 26
Corporate Governance
Compliance
Marshalls is committed to business integrity, high
ethical values and professionalism in all its
activities. As an essential part of this commitment
the Group supports the highest standards in
corporate governance.
Other than as indicated below, the Board
considers that the Company has complied with
the 14 Principles of Good Governance and Code
of Best Practice (the "Combined Code"), which are
incorporated into the United Kingdom Listing
Authority Listing Rules, throughout the year
ended 31 December 2003.
Due to the timing of the changes of the Directors,
the Company has not complied throughout the
whole of the year with all of the provisions of the
Combined Code.
The Combined Code requires the role of the
Chairman and Chief Executive to be separated.
Throughout 2003, the Group had an Executive
Chairman and a Divisional Chief Executive for the
Landscape Products Division which represents
over 80 per cent of Group turnover. As announced
in March 2003, with effect from 1 January 2004, Mr
D.G. Holden was appointed Chief Executive and
from that date there is clear separation of the roles
of Chairman and Chief Executive.
For the period 13 June 2003 to 23 July 2003 there
were no Non-Executive Directors. The Company
was, therefore, not compliant with the provision
that Non-Executive Directors should comprise not
less than one third of the Board nor with the
provision requiring there to be an identified
Senior Independent Non-Executive Director. The
whole of the Board acted as the Nominations
Committee thus making the Company non-
compliant throughout the year with the provision
requiring a majority of Non-Executive Directors.
During the period from 13 June 2003 to 23 July
2003, when the Company had no Non-Executive
Directors, it was unable to comply with the
provision requiring that the Remuneration
Committee comprise only Non-Executive
Directors and similarly for the period from 7
January 2003 to 31 December 2003 the Company
was unable to comply with the provision
requiring an Audit Committee of at least three
Directors all of whom should be Non-Executive.
The paragraphs below, together with the report
on Directors’ Remuneration set out on pages 29 to
34, describe how these principles are applied
within Marshalls.
The Board
The Board is responsible for the overall direction,
strategy, performance and management of
Marshalls plc. Short biographies of each of the
current Directors, which illustrate their range of
experience, are set out on page 17.
For the year ended 31 December 2003, the Board
comprised four Executive Directors throughout
the year. There were a number of changes
amongst the Non-Executive Directors which are
noted below. Mr M.A. Stacey resigned as a
Director on 6 January 2003. In accordance with
the Articles of Association, Mr J.W. Footman retired
by rotation at the Annual General Meeting and he
did not seek re-election. Mr R.A. Barfield resigned
on 13 June 2003. Each were members of both the
Audit Committee and the Remuneration
Committee during the period of their office. Mr
A.J. Allner and Mr R.T. Scholes were appointed as
Non-Executive Directors on 23 July 2003 and
became members of both the Audit Committee
and Remuneration Committee. They have
remained members of each for the remainder of
the year ended 31 December 2003.
All the Non-Executive Directors who served
during the year are considered to be independent
within the meaning of Provision A.3.2 of the
Combined Code and represent a source of strong,
independent advice and judgement. The Senior
Independent Director was Mr J.W. Footman from 1
January 2003 until 28 May 2003 and Mr R.T.
Scholes from 23 July 2003. There was no Senior
Independent Director between 28 May 2003 and
23 July 2003. 27 Marshalls plc     Annual Report 2003
From 1 January 2004, the Board comprised a Non-
Executive Chairman, Deputy Chairman, Chief
Executive, Finance Director and two independent
Non-Executive Directors. The Board believes that
this structure is appropriate for Marshalls at this
time. The separation of the roles of Chairman and
Chief Executive has taken place as noted on the
previous page.
The Board considers that each Director is able to
bring independent judgement to the Company’s
affairs on all matters.
The Directors are subject to election at the Annual
General Meeting immediately following their
appointment and to re-election every three years.
Any Director attaining the age of 70 would be
subject to re-election annually.
The Board meets eight times a year on a formal
basis and is supplied in a timely manner with
information in a form and of a quality appropriate
to enable it to discharge its duties. There is an
agreed schedule of matters reserved to it for
collective decision and the Board and Committee
papers are sent out seven days before meetings
take place.
The Group is centralised in its management,
decision making and financial control. The Board,
at its meetings, reviews the financial results of all
Group companies. A detailed annual budget and
business plan is prepared for each operation in
conjunction with local management. These are
then compared in full detail with the monthly
management accounts. Executive Directors are
required to comment on all areas where
performance departs from current expectations.
Any significant variances are discussed at Board
level and appropriate action taken. All Directors
have access to the advice and services of the
Company Secretary and there is an established
procedure for all Directors to take independent
legal advice in furtherance of their duties, if
necessary, at the Company’s expense.
Audit Committee
The Audit Committee meets at least three times a
year and is comprised of Mr R.T. Scholes and Mr
A.J. Allner, both independent Non-Executive
Directors. It was chaired from 23 July 2003 by Mr
R.T. Scholes having previously been chaired by Mr
R.A. Barfield up to 13 June 2003.
The Board have agreed new Terms of Reference
for the Audit Committee and these are consistent
with current best practice.
The Audit Committee reviews the annual
Financial Statements and the interim and
preliminary announcements prior to submission
to the Board, compliance with accounting
standards, the scope and extent of the external
audit programme, and the appointment and
remuneration of the Auditors. It also monitors the
operation and effectiveness of the Group’s
internal controls.
The Company does not have an in-house internal
audit function. Instead, it has concluded that it is
more effective for firms of external accountants
(other than the Company’s Auditors) to carry out
regular internal audit assignments of a financial
and systems nature. The Audit Committee
reviewed the planned Internal Audit Programme.
The results of a number of assignments have been
reported to the Audit Committee during the year.
These assignments form part of a much wider
programme of independently audited aspects of
the Group’s operations.
Remuneration Committee
The Remuneration Committee is comprised only
of independent Non-Executive Directors, Mr A.J.
Allner and Mr R.T. Scholes, and meets at least twice
a year. It was chaired by Mr A.J. Allner from 23 July
2003 having been chaired by Mr J.W. Footman
until 28 May 2003.
The Board have agreed new Terms of Reference
for the Remuneration Committee and these are
consistent with current best practice. The report on Directors’ Remuneration is set out
on pages 29 to 34.
Nomination Committee
The Nomination Committee is responsible for
considering the appointment of Non-Executive
and Executive Directors. The Nomination
Committee in 2003 comprised all the members of
the Board. From 1 January 2004 the Nomination
Committee comprised Mr A.J. Allner and Mr R.T.
Scholes who are the two independent Non-
Executive Directors. The Nomination Committee
present their recommendations to the Board. The
appointment of Directors is made by the Board
through a formal process.
Relations with Shareholders
The Company recognises the importance of
communicating with its shareholders to ensure
that its strategy and performance is understood.
This is achieved principally through the Annual
Report and the Annual General Meeting ("AGM").
In addition, a range of corporate information is
available to investors on the Company’s website.
Formal presentations are made to institutional
shareholders following the announcement of the
Company’s full year and interim results. The Board
recognises that the AGM is the principal forum for
dialogue with private shareholders. All Directors
normally attend the AGM and are available to
answer any questions that shareholders may wish
to raise. The Notice of Meeting is sent to
shareholders at least 21 days before the meeting.
Shareholders vote on a show of hands, unless a
poll is validly called and after each such vote the
number of proxy votes received for and against
the resolution is announced.
Risk Management and Internal Control
The Directors acknowledge their responsibility for
the Group’s system of internal control and for
reviewing its effectiveness. Such a system is
designed to manage, rather than eliminate, the
risk of failure to achieve business objectives and
can only provide reasonable and not absolute
assurance against material misstatement or loss.
There is an ongoing process for identifying,
evaluating and managing the Group’s significant
risks through a Risk Committee which reports
directly to the Board and which has been in place
throughout the year ended 31 December 2003
and up to the date of this report.
The Risk Committee comprises Mr C.T. Burnett, Mr
D.G. Holden and Mr I.D. Burrell. It is chaired by Mr
C.T. Burnett. The Risk Committee is responsible for
identifying, evaluating and managing any
material risks which might threaten the Group’s
business objectives. In undertaking this work, it
receives quarterly risk reviews and an annual risk
assessment report carried out by the head of each
business unit. From this information, the
Committee has compiled a Risk Register which
identifies the Group’s key risk areas, the
probability of these risks occurring and the
impact they would have. In addition the Risk
Register identifies the controls that exist to
manage and, where possible, minimise or
eliminate those risks. The Risk Register is used to
direct action programmes to test the
effectiveness, including independent audit
assessment, of those controls. This process is
regularly reviewed by the Board and it accords
with the internal control guidance for Directors in
the Combined Code.
In addition to the major risk review process, the
Group operates under an established internal
control framework, the key features of which
include clearly defined reporting lines and
authorisation procedures and a comprehensive
budget and monthly reporting system.
The Board has carried out an annual assessment
of the Group’s risk management and internal
control system for the year to 31 December 2003
by considering reports from both the Audit
Committee and the Risk Committee.
Going Concern
The Directors consider, after making appropriate
enquiries at the time of approving the financial
statements, that the Company and the Group
have adequate resources to continue in
operational existence for the foreseeable future,
and accordingly, that it is appropriate to adopt the
going concern basis in the preparation of the
Financial Statements.
Corporate Governance (continued)
Marshalls plc     Annual Report 2003 28 Directors’ Remuneration Report
The Report is divided into two sections, unaudited
and audited information in accordance with
Schedule 7A of the Companies Act 1985. The
audited information commences on page 32.
The Remuneration Committee is composed of Mr
A.J. Allner and Mr R.T. Scholes both of whom are
independent Non-Executive Directors. The
Committee is chaired by Mr A.J. Allner.
The Remuneration Committee is responsible for
determining, on behalf of the Board, the salary
and benefits received by Executive Directors and
for overseeing the remuneration of other Senior
Executives. The fees payable to Non-Executive
Directors are determined by the Board.
General Policy
The Remuneration Committee seeks to ensure
that remuneration packages are competitive
enough to attract, retain and motivate Executive
Directors and Senior Executives of the right
calibre. It is advised by independent consultants
and uses data from external research into the
salaries and benefits paid by companies of a
similar size and business. During the year, the
Committee received salary and Annual Bonus
Scheme survey information from a number of
external advisers including New Bridge Street
Consultants. The Committee is advised internally
by the Chairman on salary and incentive packages
other than his own. In reviewing Executive
Directors’ salaries, consideration is given to the
levels of increase granted to other employees
within the Group and the Committee reviews and
notes the total individual remuneration packages
of each of the other Senior Executives. Basic
salaries are reviewed annually or when a change
of responsibility occurs.
Service Contracts
The Chairman, at his insistence, did not have a
service contract whilst Executive Chairman. The
other Executive Directors have service contracts
which are terminable by the Company on not
more than twelve months’ notice and by the
Director on six months’ notice. The Non-Executive
Directors do not have service contracts. Their
appointments are regulated by letters of
appointment and each appointment is subject to
review every three years.
Annual Performance Bonus
Executive Directors have the opportunity to
receive an annual performance bonus if
challenging Group and individual Divisional
operating profit targets are met. There is a
threshold performance level below which no
bonus is paid. The Committee resets these targets
each financial year and payments are only made
based on performance which results in significant
benefits for shareholders. The maximum bonus
for 2003 was 50 per cent of base salary. Bonus
payments do not form part of salary for pension
purposes.
Long Term Incentive Plan
A long term incentive plan ("the Plan") was
introduced in 1998 for the Executive Directors
(except the Chairman). It is designed to
encourage improvement in the Group’s
performance over the longer term. To align the
interests of participants with those of the
shareholders, the Plan is based on share, rather
than cash, benefits. No awards under the Plan are
pensionable.
Each year, subject to the approval of the
Remuneration Committee, a conditional award is
made and performance measures are set and a
three year qualification period then commences.
For the 1999 and 2000 awards, the three year
performance target set was Marshalls’ total
shareholder return (share value growth assuming
re-investment of gross dividends) over the period
measured against a comparator group of
29 Marshalls plc     Annual Report 2003 Marshalls plc     Annual Report 2003 30
companies from the original Building Materials
Sector with market capitalisations of £50 million
and above. For the 2001, 2002 and 2003 awards,
the three year performance target set was
Marshalls’ total shareholder return over the period
measured against companies in the Construction
and Building Materials Sector with market
capitalisations of £100 million and above and
whose primary listing is in London.
An award only vests in full if the Company is
ranked in the top quartile of the comparator
group. Below that point, 50.0 per cent of the
award vests if the Company is ranked at median,
and pro-rata between these two points. There is
an earnings underpin which requires that
Marshalls’ earnings per share must also have
increased by RPI plus 6 per cent over the three
year period for any part of the award to vest. In
order to emphasise the long term nature of the
Plan a participant will normally have to wait for a
further two years after vesting before being able
to call for the shares.
The value of each initial conditional award is a
percentage of the participant’s basic salary. For
the 1999, 2000, 2001, 2002 and 2003 awards, it was
50.0 per cent. If the Company’s share price at the
end of the three year period reaches a
predetermined level set by the Remuneration
Committee, which for the 1999, 2000, 2001, 2002
and 2003 awards is 280p, 380p, 380p, 435p and
420p respectively, the Executive Directors receive
twice the allotted shares.
For the 2001 plan, the Company’s total
shareholder return was ranked at the 4th quartile
in the comparator group. This will mean that no
awards will vest for that year.
Pensions
Mr D.G. Holden and Mr J.D. Marshall are members
of the Group’s Defined Benefit Pension Scheme
which provides them with a pension of up to two
thirds of pensionable salary upon retirement at
age 60, subject to their having completed at least
twenty years’ service with the Group. The Scheme
also provides a lump sum death in service benefit
and pensions for dependants of members. This
Scheme is now closed to new entrants including
Directors.
The Chairman, Mr C.T. Burnett, has become a
member of the Group’s Defined Contribution
Pension Scheme for the purposes of receiving a
pension contribution by way of a bonus sacrifice
of the bonus disclosed in the table on page 32.
The Finance Director, Mr I.D. Burrell, is a member of
the Group’s Defined Contribution Pension
Scheme. The Company makes a contribution of 11
per cent of Mr Burrell’s base salary and he is
required to make a minimum contribution of 3
per cent of his base salary on an amount up to the
level of the earnings cap. The Defined
Contribution Scheme provides a lump sum death
in service benefit.
Share Options
Options have been granted in previous years
under the 1993 Executive Share Option Scheme to
Messrs. Burrell, Holden and Marshall. Details of
those outstanding are included in the Directors’
Interests: Share Options table opposite. These
options are only exercisable provided that, in the
period from the date of grant to exercise of the
option, the Company’s share price has
outperformed the FTSE All Share Index and
earnings per share have increased by more than
the Retail Price Index. No options have been
granted in the period and the Scheme was
terminated in July 2003.
Mr D.G. Holden and Mr J.D. Marshall also have
share options under the Marshalls 2000 Savings
Related Share Option Scheme. Details of their
options are set out in the Directors’ Interests:
Share Options table opposite.
Directors’ Remuneration Report (continued) 31 Marshalls plc     Annual Report 2003
Directors’ Interests
The interests of the Directors (including the beneficial interests) who held office at the year end in the ordinary shares of the Company at 1 January
2003 (or in the case of Messrs A.J. Allner and R.T. Scholes at the date of their appointment) and 31 December 2003 are set out below:
1 January 2003 31 December 2003
Shares Options Shares Options
A.J. Allner (appointed 23.07.2003) -   - -    -
C.T. Burnett 166,704 - 166,704 -
I.D. Burrell 4,000 55,000 4,000 55,000
D.G. Holden 85,688 248,336 123,538 248,336
J.D. Marshall 553,443 7,336 553,443 7,336
R.T. Scholes (appointed 23.07.2003) -    - -    -
Additionally, Mr D.G. Holden and Mr J.D. Marshall have at 31 December 2003 the following ordinary shares respectively available to be called
resulting from the vesting of their conditional awards under the Marshalls LTIP:-
Cycle 1 January 31 December Available to be 
commencing 2003 2003 called
D.G. Holden 1998 37,800 - 26 June 2003
1999 74,674 74,674 8 March 2004
2000 - 21,535 3 April 2005
J.D. Marshall 1998 39,518 39,518 26 June 2003
1999 76,622 76,622 8 March 2004
2000 - 21,535 3 April 2005
The Register of Directors’ interests, which is open to inspection at the Company’s Registered Office, contains full details of Directors’ shareholdings
and share options. All shareholdings were unchanged as at 5 March 2004.
During the latter half of 2003, the Board carried out a wide ranging strategic review of options to maximise shareholder value, including
consideration of a strategic acquisition, a disposal, alternative commercial and business strategies and a balance sheet restructuring to return
value to shareholders. As part of this process, the Remuneration Committee put in place certain incentivisation arrangements with each of 
Mr C.T. Burnett and Mr I.D. Burrell (being related party transactions for the purposes of The Listing Rules of The UK Listing Authority). Such
arrangements would, in certain circumstances, in the event that the Company was acquired, have entitled Mr C.T. Burnett (assuming an acquisition
at or above a certain price significantly above the then current share price) to a cash payment capped at £1.5 million and have entitled Mr I.D.
Burrell to a cash payment of £150,000. Mr C.T. Burnett, who was then Executive Chairman, did not participate in any of the Company’s share option
schemes or other long term incentive plans. The Board subsequently concluded that a return of value was the best option for shareholders and
the arrangements with Mr C.T. Burnett and Mr I.D. Burrell were therefore terminated without compensation.
Subject to the above, no Director of the Company has or had a disclosable interest in any contract of significance during or at the end of the year.
There are no other disclosable transactions by the Group under FRS8, "Related Party Transactions". There have been no other disclosable transactions
by the Company and its subsidiaries with Directors of Group companies and with substantial shareholders since the publication of the last Annual
Report.
This graph shows the Group’s total shareholder return (TSR)
performance compared to the FTSE 350 Construction and Buildings
Materials Sector index for the period from 1 January 1999 to 31
December 2003. TSR is defined as share price growth plus reinvested
dividends. This provides a basis for comparison as a relevant equity
index in which Marshalls plc is a constituent member. The Group has
a TSR for the five year period of 131% compared to a TSR provided by
the sector index of 91%.
In the opinion of the Directors, the FTSE 350 Construction and
Buildings Materials Sector index is the most appropriate index against
which the TSR of the Group should be measured.
Five year Total Shareholder Return
Marshalls 
plc
FTSE 350 
Construction & Buildings 
Materials Sector Index
Prepared by: Hewitt Bacon & Woodrow
Source: Datastream
Rebased to 100 on 1 January 1999 Marshalls plc     Annual Report 2003 32
Audited Information
Directors’ Remuneration
Salary/Performance Benefits Total remuneration
Fees Related and (excluding pensions)
other Bonuses 
2003 2002
£’000 £’000 £’000 £’000 £’000
Chairman
C.T. Burnett 400 344 28 772 598
Executive Directors
I.D. Burrell 160 74 18 252 213
D.G. Holden 205 102 13 320 314
R.B. Illingworth (resigned 18.02.02) -- - - 173
J.D. Marshall 125 - 18 143 138
Non-Executive Directors
A.J. Allner (appointed 23.07.03) 56 - - 56 -
R.A. Barfield (resigned 13.06.03) 11 - - 11 25
J.W. Footman (retired 28.05.03) 10 - - 10 25
R.T. Scholes (appointed 23.07.03) 56 - - 56 -
M.A. Stacey (resigned 06.01.03) - - - - 25
1,023 520 77 1,620 1,511
Notes to Directors’ Remuneration
(a) The salaries, fees, performance related and other bonuses and benefits all relate to the year ended 31 December 2003.
(b) Benefits are the provision of a fully expensed company car and medical insurance.
(c) The Company made a pension contribution of £17,600 (2002: £15,400) being 11 per cent of basic salary in respect of Mr I.D. Burrell who is
a member of the Defined Contribution Pension Scheme.
(d) Included within the 2002 total remuneration in respect of Mr R.B. Illingworth is an amount of £143,000 relating to a termination payment.
(e) For the period from 13 June 2003 until 23 July 2003 the Group did not have any Non-Executive Directors. Following the appointment of
Mr A.J. Allner and Mr R.T. Scholes on 23 July 2003 it was necessary that they spend considerable additional time making themselves familiar
with the business, management and issues facing the Board. Accordingly, a higher level of fee has been paid. The normalised
fee is £25,000 per annum as the Non-Executive fee and a further £10,000 per annum in respect of being Chairman of a Board Committee.
Pension Benefits (Defined Benefit Scheme)
Age at   Years of Service Accrued Increase in accrued Transfer value of 
31 December 2003 entitlement entitlement earned pension increase
31 December 2003 during the year earned in year
(see note a) (see note b) (see note c)
£’000 £’000 £’000
D.G. Holden 44 17 70 4 25
J.D. Marshall 58 40 102 - (13)
Notes to Pension Entitlements
(a) The accrued entitlement shown is that which would be paid annually on retirement based on service to 31 December 2003.
(b) The increase in accrued entitlement during the year excludes any increase for deferred revaluation.
(c) The transfer value has been calculated in accordance with Actuarial Guidance Note GN11 less Directors’ contributions.
(d) No accrued lump sum is payable unless part of the accrued pension is commuted.
Directors’ Remuneration Report (continued) 33 Marshalls plc     Annual Report 2003
Directors’ Interests: Share Options
At Options Options Options Exercise Market Profit on At 31 Exercise
1 January granted exercised lapsed price price at exercise December Period
2003 during during during date of £ 2003
the year the year the year exercise
I.D. Burrell
Executive option 55,000 - - - 219.5p - - 55,000 16/10/2004
to
15/10/2011
D.G. Holden
Executive option 161,000 - - - 216.5p - - 161,000 17/04/2004
to
16/04/2011
Executive option 80,000 - - - 219.5p - - 80,000 16/10/2004
to
15/10/2011
SAYE 7,336 - - - 230.0p - - 7,336 01/12/2005 
to 
31/05/2006
J.D. Marshall
SAYE 7,336 - - - 230.0p - - 7,336 01/12/2005 
to 
31/05/2006
(a) Neither the Chairman nor the Non-Executive Directors held any share options during the year.
(b) The market price of the Company’s shares at 31 December 2003 was 251p and the range in the year then ended was 192p to 293p.
(c) The options were granted at nil cost to the Directors. The performance criteria for the above executive options is consistent with the
remuneration policy outlined on page 30.
(d) The total profit on exercise of options during the year was £Nil (2002: £42,900).
Transfer value as at Transfer value as at Increase in
31 December 2003 31 December 2002 transfer value less 
(as restated) member contribution 
over the year
£’000 £’000 £’000
D.G. Holden 648 535 101
J.D. Marshall 2,056 1,850 199
The transfer values of the accrued entitlement represent the value of assets that the pension scheme would need to transfer to another pension
provider on transferring the Scheme’s liability in respect of the Directors’ pension benefits. They do not represent sums payable to individual
Directors and, therefore, cannot be added meaningfully to annual remuneration. The transfer values as at 31 December 2002 have been restated
in accordance with new actuarial guidance. On the previous basis, the transfer values as at 31 December 2002 were £373,000 in respect of Mr D.G.
Holden and £1,660,000 in respect of Mr J.D. Marshall.
The increase in the transfer value less Directors’ contributions is the increase in the transfer value of the accrued benefits during the year after
deducting the director’s personal contributions to the Scheme.
Details of accrued pension valued on a transfer basis as required under the 2002 Regulations are as follows:- Marshalls plc     Annual Report 2003 34
Directors’ Interests: Long Term Incentive Plan
Shares awarded to Executive Directors under the Long Term Incentive Plan are as follows:-
Award At 1 Shares Award Shares At 31 Value Vesting
date January awarded  lapsed vested December vested date
2003 2003
Number Number Number Number Number £’000
I.D. Burrell 16.04.2002 23,972 - - - 23,972 - -
16.04.2003 - 35,164 - - 35,164 - -
D.G. Holden         03.04.2000 25,638 - 4,103 21,535 - 48 03.04.2003
17.04.2001 34,642 - - - 34,642 - 17.04.2004 see note d
16.04.2002 34,246 - - - 34,246 - -
16.04.2003 - 45,054 - - 45,054 - -
J.D. Marshall 03.04.2000 25,638 - 4,103 21,535 - 48 03.04.2003
(a) The market price on 3 April 2003 was 221p.
(b) In the case of each award, the shares are available to be called two years after the vesting date.
(c) The number of shares disclosed under the Long Term Incentive Plan awards for 2001, 2002 and 2003 is the maximum number of shares which
would be delivered at the end of the period under the initial award. As stated above, an additional award of the same number of shares
would vest if the Marshalls share price reached a pre-determined level.
(d) On 17 April 2001, 34,642 shares were awarded to Mr D.G. Holden under the Long Term Incentive Plan for 2001. For the 2001 Plan, the
Company’s total shareholder return was ranked at the 21st percentile in the comparator group which means that no awards for that year will
vest on the due date of 17 April 2004.
(e) The total value of shares vested under the Long Term Incentive Plan as disclosed above is £96,000 (2002: £626,000).
The Remuneration Report has been approved by the Board and signed on its behalf by:
Andrew Allner
Chairman of the Remuneration Committee
5 March 2004 Independent Auditors’ Report
to the Members of Marshalls plc
We have audited the Financial Statements on
pages 36 to 62. We have also audited the
information in the Directors’ Remuneration Report
that is described as having been audited.
This report is made solely to the Company’s
members, as a body, in accordance with Section
235 of the Companies Act 1985. Our audit work has
been undertaken so that we might state to the
Company’s members those matters we are
required to state to them in an auditor’s report and
for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone other than the Company
and the Company’s members as a body, for our
audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of Directors
and Auditors
The Directors are responsible for preparing the
Annual Report and the Directors’ Remuneration
Report. As described on page 25, this includes
responsibility for preparing the financial
statements in accordance with applicable United
Kingdom law and Accounting Standards. Our
responsibilities, as Independent Auditors, are
established in the United Kingdom by statute, the
Auditing Practices Board, the Listing Rules of the
Financial Services Authority, and by our profession’s
ethical guidance.
We report to you our opinion as to whether the
Financial Statements give a true and fair view and
whether the Financial Statements and the part of
the Directors’ Remuneration Report to be audited
have been properly prepared in accordance with
the Companies Act 1985. We also report to you if, in
our opinion, the Directors’ Report is not consistent
with the Financial Statements, if the Company has
not kept proper accounting records, if we have not
received all the information and explanations we
require for our audit, or if information specified by
law or the Listing Rules regarding Directors’
remuneration and transactions with the Group is
not disclosed.
We review whether the statement on page 26
reflects the Company’s compliance with the seven
provisions of the Combined Code specified for our
review by the Listing Rules, and we report if it does
not. We are not required to consider whether the
Board’s statements on internal control cover all
risks and controls, or form an opinion on the
effectiveness of the Group’s Corporate Governance
procedures or its risk and control procedures.
We read the other information contained in the
Annual Report, including the Corporate
Governance statement and the unaudited part of
the Directors’ Remuneration Report, and consider
whether it is consistent with the audited Financial
Statements. We consider the implications for our
report if we become aware of any apparent
misstatements or material inconsistencies with the
Financial Statements.
Basis of audit opinion
We conducted our audit in accordance with
Auditing Standards issued by the Auditing
Practices Board. An audit includes examination, on
a test basis, of evidence relevant to the amounts
and disclosures in the Financial Statements and the
part of the Directors’ Remuneration Report to be
audited. It also includes an assessment of the
significant estimates and judgements made by the
Directors in the preparation of the Financial
Statements, and of whether the accounting policies
are appropriate to the Group’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to
obtain all the information and explanations which
we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance
that the Financial Statements and the part of the
Directors’ Remuneration Report to be audited are
free from material misstatement, whether caused
by fraud or other irregularity or error. In forming our
opinion we also evaluated the overall adequacy of
the presentation of information in the Financial
Statements and the part of the Directors’
Remuneration Report to be audited.
Opinion
In our opinion:
. the Financial Statements give a true and fair
view of the state of affairs of the Company and
the Group as at 31 December 2003 and of the
profit of the Group for the year then ended; and
. the Financial Statements, and the part of the
Directors’ Remuneration Report to be audited,
have been properly prepared in accordance
with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants and
Registered Auditor
1 The Embankment
Neville Street
Leeds  LS1 4DW
5 March 2004
35 Marshalls plc     Annual Report 2003 Marshalls plc     Annual Report 2003 36
Consolidated Profit and Loss Account
for the year ended 31 December 2003
Notes 2003 2002
£’000 £’000
Turnover 2 349,481 342,056
Operating costs 3 (296,353) (291,727)
Operating profit 2 53,128 50,329
Gain on disposal and termination of business 2 - 2,255
Profit on ordinary activities before interest 53,128 52,584
Interest (net) 5 (2,725) (3,193)
Profit on ordinary activities before taxation 2 50,403 49,391
Taxation on profit on ordinary activities 6 (15,902) (15,750)
Profit for the financial year 34,501 33,641
Preference dividends: Non equity shares 8 (54) (137)
Profit attributable to ordinary shareholders 34,447 33,504
Ordinary dividends: Equity shares 9 (18,401) (16,737)
Retained profit for the financial year 22 16,046 16,767
Earnings per share :
Basic 10 20.61p 20.05p
Diluted 10 20.58p 20.02p
Adjusted Basic 10 21.46p 19.41p
Dividend per share:
Pence per share 9 11.00p 10.00p
The notes on pages 40 to 62 form part of these financial statements. Balance Sheets
at 31 December 2003
37 Marshalls plc     Annual Report 2003
Group Company
Notes 2003 2002 2003 2002
£’000 £’000 £’000 £’000
Fixed assets
Intangible 11 23,725 24,113 - -
Tangible 12 206,650 184,699 10,555 11,004
Investments 13 - - 185,896 178,394
230,375 208,812 196,451 189,398
Current assets
Stocks 14 56,744 62,978 - -
Debtors 15 33,412 30,997 961 1,598
Cash at bank and in hand 7,884 7,307 7,376 6,041
98,040 101,282 8,337 7,639
Creditors: Amounts falling due within one year 16 (68,992) (67,493) (18,912) (23,280)
Net current assets / (liabilities) 29,048 33,789 (10,575) (15,641)
Total assets less current liabilities 259,423 242,601 185,876 173,757
Creditors: Amounts falling due after more
than one year 17 (20,000) (20,003) (29,326) (20,082)
Provisions for liabilities and charges 20 (21,275) (19,852) (1,071) (1,000)
Net assets 218,148 202,746 155,479 152,675
Capital and reserves
Called up share capital 21 41,837 42,007 41,837 42,007
Share premium account 22 18,138 17,726 18,138 17,726
Revaluation reserve 22 5,166 5,166 - -
Other reserves 22 14,574 14,352 14,727 14,505
Profit and loss account 22 138,433 123,495 80,777 78,437
Shareholders’ funds 218,148 202,746 155,479 152,675
Analysis of shareholders’ funds
Equity 218,148 201,638 155,479 151,567
Non equity - 1,108 - 1,108
218,148 202,746 155,479 152,675
Approved at a Directors’ meeting on 5 March 2004.
On behalf of the Board:
D.G. Holden I.D. Burrell
Chief Executive Finance Director
The notes on pages 40 to 62 form part of these financial statements. Marshalls plc     Annual Report 2003 38
Consolidated Cash Flow Statement
for the year ended 31 December 2003
Notes 2003 2003 2002 2002
£’000 £’000 £’000 £’000
Cash inflow from operating activities 23 81,261 54,608
Returns on investments and servicing of finance 24(i) (2,831) (3,407)
Taxation (14,018) (13,301)
Capital expenditure 24(ii) (39,802) (33,832)
Acquisitions and disposals 24(iii) (2,014) 9,210
Equity dividends paid (17,300) (16,128)
Cash inflow/(outflow) before financing 5,296 (2,850)
Financing
Issue of shares 464 143
Repayment of cumulative redeemable preference shares (1,108) -
Repayment of 10% cumulative preference shares - (2,274)
Costs associated with share cancellation - (52)
Decrease in other debt and lease financing (4,075) (2,315)
(4,719) (4,498)
Increase/(decrease) in cash in the year 577 (7,348)
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash in the year 577 (7,348)
Cash outflow from decrease in debt and lease financing 4,075 2,315
Movement in net debt in the year 27 4,652 (5,033)
Net debt at beginning of year (17,895) (12,862)
Net debt at end of year 27 (13,243) (17,895)
The notes on pages 40 to 62 form part of these financial statements Consolidated Reconciliation of Movements in Shareholders’
Funds
for the year ended 31 December 2003
39 Marshalls plc     Annual Report 2003
2003 2002
£’000 £’000
Profit for the financial year 34,501 33,641
Dividends (preference and ordinary) (18,455) (16,874)
Retained profit for the financial year 16,046 16,767
New share capital issued 464 143
Repayment of cumulative redeemable preference shares (1,108) -
Repayment and cancellation of 10% cumulative preference shares - (2,274)
Costs associated with share cancellation - (52)
Goodwill previously eliminated against reserves - 1,450
Net additions to shareholders’ funds 15,402 16,034
Shareholders’ funds at beginning of year 202,746 186,712
Shareholders’ funds at end of year 218,148 202,746
The notes on pages 40 to 62 form part of these financial statements.
The Group had no other recognised gains or losses other than those disclosed in the Consolidated Profit and Loss Account
in either the current or preceding financial year. There is no material difference between historical cost profits and those
reported in the profit and loss account. Marshalls plc     Annual Report 2003 40
Notes to the Financial Statements
1Accounting policies
The following paragraphs summarise the main accounting policies of the Group, which have been applied consistently
in dealing with items which are considered material in relation to the Group’s Financial Statements.
aFinancial statements convention
The Financial Statements are prepared under the historical cost convention, modified by the revaluation of certain
properties, and in accordance with applicable accounting standards. There is no material difference between
historical cost profits and those reported in the profit and loss account. In respect of FRS17 "Retirement Benefits" the
Group is following the transitional arrangements under which additional disclosure on retirement benefits is
required in the Financial Statements for the year ended 31 December 2003 as set out in note 31.
bBasis of consolidation
The Group Financial Statements include the Financial Statements of the Company and its subsidiary undertakings
made up to 31 December 2003. All Financial Statements are prepared on a uniform basis throughout the Group.
The acquisition method of accounting has been adopted, unless otherwise stated. Under this method, the results
of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss
account from the date of acquisition or up to the date of disposal.
Under section 230(4) of the Companies Act 1985 the Company is exempt from the requirement to present its own
profit and loss account.
cGoodwill
Purchased goodwill arising on consolidation in respect of acquisitions before 1 January 1998, when FRS10 "Goodwill
and intangible assets" was adopted, was written off to reserves in the year of acquisition. When a subsequent
disposal occurs any related goodwill previously written off to reserves is written back through the profit and loss
account as part of the profit or loss on disposal.
Purchased goodwill (representing the excess of the fair value of the consideration given and associated costs over
the fair value of the separable net assets acquired) arising on consolidation in respect of acquisitions since 1 January
1998 is capitalised. Positive goodwill is amortised to nil by equal annual instalments over its estimated useful
economic life, normally 20 years.
On the subsequent disposal or termination of a business acquired since 1 January 1998, the profit or loss on disposal
or termination is calculated after charging/(crediting) the unamortised amount of any related goodwill/(negative
goodwill).
dInvestments
Fixed asset investments are stated at cost less provision for impairment where appropriate. The Directors consider
annually whether a provision against the value of investments on an individual basis is required. Such provisions
are charged in the profit and loss account in the year.
eForeign currency
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling
at the balance sheet date or, if hedged forward, at the rate of exchange under the related forward currency contract,
and the gains or losses on translation are included in the profit and loss account. 1Accounting policies (continued)
fTurnover
Turnover represents the invoiced value of sales to customers outside the Group, less returns, allowances and value
added tax. Turnover is recognised in the Financial Statements upon despatch of the goods.
gDevelopment expenditure
Development expenditure is accounted for in accordance with SSAP13 "Accounting for Research and Development"
and is written off in the period in which it arises.
hPension costs
Defined benefit scheme
Contributions to the Group’s defined benefit pension scheme are charged to the profit and loss account on a basis
which spreads the cost over employees’ working lives with the Group. The regular pension costs are attributed to
individual years using the discounted income projected unit method. Variations in pension costs, which are
identified as a result of actuarial valuations, are amortised over the average remaining service lives of employees.
Defined contribution scheme
Contributions to the Group’s defined contribution scheme are determined as a percentage of employees’ earnings
and are charged to the profit and loss account as incurred.
iStocks
Stocks of raw materials, bought in components and goods for resale are valued at the lower of invoice cost and net
realisable value. Finished goods and manufactured components are valued at the lower of works cost and net
realisable value. Works cost consists of direct materials, labour and factory and administrative overheads applicable
to the stage of production.
jTangible fixed assets and depreciation
Tangible fixed assets are stated at either cost or professional valuation less depreciation. On adoption of FRS15
"Tangible Fixed Assets", the Group followed the transitional provisions to retain the book value of land and buildings
which were revalued in 1989 but not to adopt a policy of revaluation in the future. Depreciation is provided on all
fixed assets, other than freehold and long leasehold land, at rates calculated to write off the cost less estimated
residual value of each asset on a straight line basis over its estimated useful life. The rates are as follows:
Freehold and long leasehold buildings - 2.5% to 5% per annum
Quarries - 5% to 15% per annum
Short leasehold property - over the period of the lease
Fixed plant and equipment - 5% to 25% per annum
Mobile plant and vehicles - 14% to 30% per annum
Assets under construction are not depreciated until they are ready for use.
kCash and liquid resources
Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable on demand, less
overdrafts payable on demand.
Liquid resources are current asset investments which are disposable without curtailing or disrupting the business
and are either readily convertible into known amounts of cash at or close to their carrying values or traded in an
active market. Liquid resources comprise term deposits of less than one year.
41 Marshalls plc     Annual Report 2003 Marshalls plc     Annual Report 2003 42
Notes to the Financial Statements (continued)
1Accounting policies (continued)
lLeased assets
Elements of plant and machinery are subject to finance leases giving rights approximating to ownership. Such
assets are treated as though they had been purchased outright and are included in tangible fixed assets at a
value equal to the total capital payments to be made during the term of the lease. The total amount of the capital
payments outstanding is included in creditors.
The amount included in tangible fixed assets is written off over the shorter of the useful economic life of the asset
or the term of the lease.
The rental cost of all operating leases is charged to the profit and loss account on a straight line basis over the
lives of the leases.
mDeferred taxation
Full provision is made for deferred taxation resulting from timing differences, other than those specifically
excluded by FRS19 "Deferred Taxation", between profits computed for taxation purposes and profits stated in
the Financial Statements to the extent that there is an obligation to pay more tax in the future as a result of those
timing differences. Deferred tax assets are recognised to the extent that they are expected to be recoverable.
Deferred tax assets and liabilities are not discounted.
2Segmental analysis Turnover Operating Profit
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Landscape Products 288,819 270,384 44,874 41,248
Clay Products 32,130 30,252 4,202 4,372
Natural Stone 28,532 24,958 4,052 3,282
349,481 325,594 53,128 48,902
Flooring business disposed - 16,462 - 1,427
349,481 342,056 53,128 50,329
Gain on disposal and termination of business - 2,255
Interest (net) (2,725) (3,193)
Profit on ordinary activities before taxation 50,403 49,391
The non-Flooring businesses previously included within the Emerging Businesses segment are now shown within
the Landscape Products segment. The comparative figures for 2002 have been restated accordingly. For the year
ended 31 December 2002, the Landscape Products turnover, operating profit and net assets were previously stated
at £254,515,000, £38,530,000 and £171,437,000 respectively.
The gain on disposal and termination of business in 2002 relates to the sale of the Group’s Flooring business on 29
November 2002 for gross cash proceeds of £13.1 million and the closure of a related business on the same
manufacturing site. The gain on disposal of £2,255,000 is disclosed net of goodwill of £1,450,000 previously
eliminated against reserves. No tax is payable on the gain due to the utilisation of capital losses.
2003 2002
£’000 £’000
Geographical destination of sales:
United Kingdom 344,609 337,101
Rest of the world 4,872 4,955
349,481 342,056
All turnover originates in the United Kingdom from continuing operations and there is no material inter-segmental
turnover. 43 Marshalls plc     Annual Report 2003
2Segmental analysis (continued) Net Assets
2003 2002
£’000 £’000
Landscape Products 200,026 181,513
Clay Products 37,089 40,780
Natural Stone 32,234 28,120
269,349 250,413
Unallocated net liabilities (51,201) (47,667)
218,148 202,746
Unallocated net liabilities comprise non-operating assets and liabilities of a financing nature, principally net
borrowings, corporation tax, deferred tax and dividends payable.
3Operating costs
2003 2002
£’000 £’000
Raw materials and consumables 103,617 116,966
Changes in stocks of finished goods 6,457 (8,073)
Staff costs (Note 4) 79,328 82,845
Depreciation -  owned 17,528 15,839
-  leased 10 9
Own work capitalised (2,192) (2,113)
Other operating income (558) (337)
Other external charges 90,733 85,401
Amortisation of goodwill 1,430 1,190
296,353 291,727
Operating profit is stated after charging/(crediting):
Auditors’ remuneration 101 115
Other fees paid to the auditors and their associates 3 13
Leasing costs 3,359 3,254
Hire of plant and machinery 2,724 2,898
Development expenditure 2,192 2,113
Loss/(profit) on sale of tangible fixed assets 317 (66)
In respect of the year under review, KPMG Audit Plc carried out mainly audit work which represented substantially
all of the fees paid to them. The audit fee for the Company was £20,000 (2002: £20,000). Marshalls plc     Annual Report 2003 44
Notes to the Financial Statements (continued)
4Employees
The average number of persons employed by the Group during the year was:
2003 2002
Number Number
Landscape Products 2,502 2,628
Clay Products 354 359
Natural Stone 232 225
3,088 3,212
Flooring business disposed - 157
3,088 3,369
Staff costs (including Directors): 2003 2002
£’000 £’000
Wages and salaries 70,113 74,048
Social security costs 7,104 6,811
Other pension costs 2,111 1,986
79,328 82,845
Staff costs disclosed above do not include redundancy costs of £938,000 (2002: £1,502,000) included within other
external charges.
Details of Directors’ remuneration, share options, long term incentive plans and Directors’ pension entitlements are
disclosed in the Directors’ Remuneration Report on pages 29 to 34.
5Interest (net)
2003 2002
£’000 £’000
(a)  Interest payable and similar charges:
Bank loans, overdrafts, loan notes and other  interest payable 511 959
Debenture interest 2,275 2,275
Finance leases 1 2
2,787 3,236
(b)  Other interest receivable and similar income (62) (43)
2,725 3,193
6Taxation on profit on ordinary activities
2003 2002
£’000 £’000
United Kingdom corporation tax at 30.0% (2002: 30.0%)
Current year 14,688 14,772
Prior year (209) -
14,479 14,772
Deferred taxation (Note 20) 1,423 978
15,902 15,750 45 Marshalls plc     Annual Report 2003
6Taxation on profit on ordinary activities (continued)
The tax assessed for the period is lower (2002: lower) than the standard rate of corporation tax in the UK (30.0%).
The differences are explained below:-
2003 2002
£’000 £’000
Profit on ordinary activities before taxation 50,403 49,391
Profit on ordinary activities multiplied by standard rate in the UK (30.0%) (2002: 30.0%) 15,121 14,817
Effects of:-
Disallowed amortisation of goodwill 429 357
Net items not taxable 561 576
Prior year items (209) -
Accelerated capital allowances and other timing differences (1,423) (978)
Tax charge for the period 14,479 14,772
Effective rate of tax 28.7% 29.9%
Based on current capital investment plans, the Group expects to continue to be able to claim capital allowances in
excess of depreciation in future years.
7Profit of Marshalls plc
As permitted by Section 230 of the Companies Act 1985, Marshalls plc has not presented its own profit and loss
account. The consolidated profit for the year includes £21,903,000 (2002: £21,944,000) which is dealt with in the
Financial Statements of the Company.
8Preference dividends: non equity shares
2003 2002
per share £’000 per share £’000
Cumulative redeemable preference shares of 20p each 6.50p 54 6.50p 73
10% cumulative preference shares of £1 each - 64
54 137
On 1 October 2003, the Company repaid the cumulative redeemable preference shares of 20p each (Note 21).
On 20 June 2002, the Company repaid the 10% cumulative preference shares and they were subsequently cancelled
(Note 21).
9Ordinary dividends: equity shares
2003 2002
per share £’000 per share £’000
Interim: paid 8 December 2003 3.65p 6,101 3.30p 5,523
Final: proposed 7.35p 12,300 6.70p 11,214
11.00p 18,401 10.00p 16,737 Marshalls plc     Annual Report 2003 46
Notes to the Financial Statements (continued)
10  Earnings per share
2003 2002
£’000 £’000
Profit for the financial year attributable to ordinary shareholders 34,447 33,504
Profit for the financial year attributable to ordinary shares and potentially 
ordinary dilutive shares 34,447 33,504
Adjusted basic earnings per share reconciliation:
Profit for the financial year 34,447 33,504
Goodwill amortisation 1,430 1,190
Gain on disposal and termination of business - (2,255)
35,877 32,439
Weighted average number of shares 167,159,671 167,130,230
Weighted average number of shares 167,159,671 167,130,230
Potentially dilutive shares 202,054 247,797
167,361,725 167,378,027
Basic earnings per share 20.61p 20.05p
Diluted earnings per share 20.58p 20.02p
Adjusted basic earnings per share 21.46p 19.41p
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of £34,447,000
(2002: £33,504,000) by the weighted average number of shares in issue during the year of 167,159,671 (2002:
167,130,230).
Diluted earnings per share is calculated by dividing profit attributable to ordinary shares and potentially ordinary
dilutive shares of £34,447,000 (2002: £33,504,000) by the weighted average number of shares in issue during the year
of 167,159,671 (2002: 167,130,230), plus dilutive shares of 202,054 (2002: 247,797) which totals 167,361,725 (2002:
167,378,027).
An adjusted basic earnings per share has been prepared in order to show the underlying performance of the
business. The adjusted basic earnings per share is adjusted for goodwill amortisation and the gain on disposal and
termination of business. 47 Marshalls plc     Annual Report 2003
11 Intangible fixed assets
Goodwill
£’000
Group
Cost
At 1 January 2003 27,867
Additions (Note 25) 1,042
At 31 December 2003 28,909
Amortisation
At 1 January 2003 3,754
Amounts provided 1,430
At 31 December 2003 5,184
Net book value
At 31 December 2003 23,725
At 31 December 2002 24,113
12 Tangible fixed assets
Group Company
Land and Plant, Total Land and Plant, Total
buildings machinery buildings machinery
and vehicles and vehicles
£’000 £’000 £’000 £’000 £’000 £’000
Cost or valuation
At 1 January 2003 100,998 213,264 314,262 3,884 13,091 16,975
Additions 10,894 29,918 40,812 15 1,366 1,381
On acquisition of subsidiary 
undertakings (Note 25) -44 ---
Disposals (692) (9,352) (10,044) - (70) (70)
At 31 December 2003 111,200 233,834 345,034 3,899 14,387 18,286
Accumulated depreciation
At 1 January 2003 20,969 108,594 129,563 279 5,692 5,971
Amounts provided 2,542 14,996 17,538 70 1,760 1,830
Disposals (557) (8,160) (8,717) - (70) (70)
At 31 December 2003 22,954 115,430 138,384 349 7,382 7,731
Net book value
At 31 December 2003 88,246 118,404 206,650 3,550 7,005 10,555
At 31 December 2002 80,029 104,670 184,699 3,605 7,399 11,004 Marshalls plc     Annual Report 2003 48
Notes to the Financial Statements (continued)
12 Tangible fixed assets (continued)
The net book value of tangible fixed assets includes £4,000 (2002: £10,000) in respect of assets held under finance
leases of which £Nil (2002: £Nil) relates to the Company.
Group cost or valuation of land and buildings and plant and machinery includes £2,790,000 (2002: £4,874,000) and
£13,739,000 (2002: £1,574,000) respectively for assets in the course of construction.
The Group’s freehold and leasehold industrial property in the UK was revalued in March 1989 on the basis of open
market value for existing use. No provision has been made for taxation which may be payable in the event of these
properties being sold at their revalued amounts on the grounds that it is the Group’s intention to retain them for
operational purposes.
Analysis of Group land and buildings
Freehold Long Short Total
leasehold leasehold
£’000 £’000 £’000 £’000
Valuation at March 1989 35,560 2,585 - 38,145
Cost 62,735 10,220 100 73,055
Accumulated depreciation (21,100) (1,754) (100) (22,954)
Net book value at 31 December 2003 77,195 11,051 - 88,246
Amount not depreciable 30,064 9,507 - 39,571
Comparable amounts determined according to 
the historical cost convention
Cost 95,128 13,002 100 108,230
Accumulated depreciation (23,099) (1,951) (100) (25,150)
Historical net book value at 31 December 2003 72,029 11,051 - 83,080
13 Investment in subsidiary undertakings
Company Shares Loans Total
£’000 £’000 £’000
Cost
At 1 January 2003 22,249 160,311 182,560
Movement in the year 1,193 6,309 7,502
At 31 December 2003 23,442 166,620 190,062
Provisions
At 1 January 2003 1,967 2,199 4,166
Amounts provided ---
At 31 December 2003 1,967 2,199 4,166
Net book value
At 31 December 2003 21,475 164,421 185,896
At 31 December 2002 20,282 158,112 178,394 49 Marshalls plc     Annual Report 2003
13 Investment in subsidiary undertakings (continued)
Details of the principal subsidiary undertakings, their place of incorporation and particulars of Group shareholdings
are set out in Note 32.
14 Stocks
Group
2003 2002
£’000 £’000
Raw materials and consumables 10,952 10,729
Finished goods and goods for resale 45,792 52,249
56,744 62,978
15 Debtors
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Trade debtors 28,695 26,766 - -
Other debtors 568 1,090 171 766
Taxation and social security 31 14 19 1
Prepayments and accrued income 4,118 3,127 771 831
33,412 30,997 961 1,598
No debtors were due after more than one year.
16 Creditors: Amounts falling due within one year
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Loans (Note 18) 1,124 5,196 1,124 5,196
Trade creditors 29,662 28,064 939 909
Corporation tax 9,640 9,095 2,258 4,801
Taxation and social security 5,326 4,240 489 206
Other creditors 2,988 2,522 600 121
Accruals 7,952 7,159 1,202 830
Dividends proposed 12,300 11,217 12,300 11,217
68,992 67,493 18,912 23,280 Marshalls plc     Annual Report 2003 50
Notes to the Financial Statements (continued)
17 Creditors: Amounts falling due after more than one year
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Loans (Note 18) 20,000 20,000 20,000 20,000
Other creditors - 3 - -
Amounts owed to subsidiary undertakings - - 9,326 82
20,000 20,003 29,326 20,082
Finance lease instalments included in other creditors are repayable:
between two and five years - - - -
between one and two years - 3 - -
within one year 3 3 - -
3 6 - -
18 Loans
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
11.375% debenture stock 1992/2014 20,000 20,000 20,000 20,000
Unsecured loan stock 2001 1,124 5,196 1,124 5,196
21,124 25,196 21,124 25,196
which are repayable:
in five years or more 20,000 20,000 20,000 20,000
within one year 1,124 5,196 1,124 5,196
21,124 25,196 21,124 25,196
Debenture stock
The 11.375% debenture stock 1992/2014 which is secured by a first floating charge on the assets of the Company
and certain subsidiary undertakings is repayable at par on 30 June 2014, or at the Company’s option, between 1
January 1992 and 30 June 2014, at a price related to the gross redemption yield of the 12% Exchequer Stock
2013/2017.
Unsecured loan stock 2001
The Unsecured loan stock 2001 is repayable at par on 31 May 2006, or at either the Company’s or the holders’ option
between 15 December 2001 and 31 May 2006. Interest is payable on 31 May and 30 November at the base rate from
time to time of the Royal Bank of Scotland plc. 51 Marshalls plc     Annual Report 2003
19 Financial instruments
The Group holds and uses financial instruments to finance its operations and to manage its interest rate, liquidity and
currency risks. The Group primarily finances its operations using share capital, retained profits and borrowings. The
Group has, or had, in issue the following non-equity funding instruments:
-Unsecured loan stock 2001 as detailed in Note 18
-Debenture stock at 11.375% as detailed in Note 18
-Cumulative redeemable preference shares at 6.5p per annum as detailed in Note 21 and
redeemed in the year
-Cumulative preference shares at 10% also as detailed in Note 21 and redeemed in the prior year
As directed by the Board the Group does not engage in trade or speculative activities using derivative financial
instruments. Group cash reserves are held centrally to take advantage of the most rewarding short term investment
opportunities. Forward foreign currency contracts are used in the management of currency risk.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and exchange rate risk.
The Board reviews and agrees the policies for managing each of these risks and they have remained unchanged since
2002.
Interest rate risk
The Group’s policy is to review regularly the terms of its available short term borrowing facilities and to assess
individually and manage each long term borrowing commitment accordingly.
Liquidity risk
Cash resources are largely generated through operations. Short term flexibility is achieved by overdraft facilities.
Currency risk
Exposure to currency risk primarily arises from incurring transactional foreign currency expenses. The Group’s policy is
to cover all significant foreign currency commitments by using forward foreign currency contracts.
Financial assets and liabilities
The Group has taken advantage of the exemptions given under FRS13 "Derivatives and Other Financial Instruments" in
excluding short term debtors and creditors from its disclosures.
Other than cash at bank and short term debtors the Group has no other financial assets. All financial assets are held in
Sterling. Cash at bank received an average floating rate of interest of 2.6% (2002: 2.4%) for the year. Marshalls plc     Annual Report 2003 52
Notes to the Financial Statements (continued)
19  Financial instruments (continued)
At 31 December 2003 95% (2002: 79%) of the Group’s borrowings were on a fixed rate. At the year end, the Group
had not entered into any interest rate swaps or forward foreign currency contracts. The interest rate profile of the
financial liabilities were:
Weighted average Weighted average
interest rate of period for which
fixed borrowings interest rates are fixed
2003 2002 2003 2002 2003 2002
£’000 £’000 % % Y ears Years
Fixed rate liabilities: Sterling 20,003 20,006 11.4 11.4 10.5 11.5
Floating rate liabilities: Sterling 1,124 5,196
Total financial liabilities 21,127 25,202
Currency exposures
At 31 December 2003 the Group had no material currency exposures and there were no outstanding forward
currency contracts.
Maturity of financial liabilities
At 31 December 2003, 95% (2002: 79%) of the Group’s borrowings were due to mature in more than five years. The
maturity profile of the Group’s financial liabilities at 31 December 2003 is as follows:
2003 2002
£’000 £’000
In one year or less, or on demand 1,127 5,199
In more than one year but not more than two years - 3
In more than five years 20,000 20,000
21,127 25,202
Borrowing facilities
The Group has various undrawn borrowing facilities available to it. The undrawn facilities available at 31 December
2003, in respect of which all conditions precedent had been met, were as follows:
2003 2002
£’000 £’000
Committed:
- Expiring in more than two years but not more than five years 10,000 -
- Expiring in one year or less - 15,000
Uncommitted:
- Expiring in one year or less 20,000 15,000
30,000 30,000 53 Marshalls plc     Annual Report 2003
19  Financial instruments (continued)
Fair values of financial assets and financial liabilities
A comparison by category of the book values and fair values of the financial assets and liabilities of the Group at 31
December 2003 are shown below:-
2003 2002
Book Fair Book Fair
Value Value Value Value
£’000 £’000 £’000 £’000
Cash at bank 7,884 7,884 7,307 7,307
Short term financial liabilities 1,127 1,127 5,202 5,202
Long term borrowings 20,000 26,357 20,000 26,759
Cumulative redeemable preference shares of 20p each -- 1,108 1,108
Derivative financial instruments have not been held to manage interest rate risk. All fair values have been
determined using appropriate market rates at 31 December 2003 and by discounting relevant cash flows at the
prevailing rate.
20 Provisions for liabilities and charges
The liability for deferred taxation of the Group at 30.0% (2002: 30.0%) is:
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Accelerated capital allowances 20,762 19,241 712 784
Short term timing differences 513 611 359 216
21,275 19,852 1,071 1,000
2003 2002 2003 2002
£’000 £’000 £’000 £’000
At 1 January 2003 19,852 18,843 1,000 774
On acquisition of subsidiary undertakings - 31 - -
Charge in the year 1,423 978 71 226
At 31 December 2003 21,275 19,852 1,071 1,000 Marshalls plc     Annual Report 2003 54
Notes to the Financial Statements (continued)
21 Share capital
2003 2002 2003 2002
Number Number £’000 £’000
’000 ’000
Authorised:
Ordinary shares of 25p each 209,432 209,432 52,358 52,358
Cumulative redeemable preference shares of 20p each 63,136 63,136 12,627 12,627
10% cumulative preference shares of £1 each - 1,015 - 1,015
64,985 66,000
Allotted, called up and fully paid:
Ordinary shares of 25p each 167,347 167,146 41,837 41,785
Cumulative redeemable preference shares of 20p each - 1,108 - 222
41,837 42,007
During the year 201,215 ordinary shares were issued as follows:
Number Nominal Share 
value premium
£’000 £’000 £’000
Options exercised at 230.0p per share 201 52 412
Non equity shares
Cumulative Redeemable Preference Shares
The cumulative redeemable preference shares of 20p each were issued at a price of £1 in June 1988 and carried, inter
alia, rights to:
(a) a fixed cumulative preferential dividend payable at the rate of 6.50p per share per annum;
(b) conversion into fully paid ordinary shares of 25p each, on 1 October in each of the years 1990 to 2000, on the basis
of 72 ordinary shares for every 100 cumulative redeemable preference shares so converted;
(c) redemption, if not previously converted, on 1 October 2003 at £1 per share;
(d) repayment of capital and accrued dividends in priority to ordinary shares but after the 10% cumulative
preference shares of £1 each, on a return of capital on a winding up; and
(e) attend and vote at a general meeting of the Company only if, at the date of the notice convening the meeting,
payment to which they are entitled is six months or more in arrears, or if a resolution is to be considered at the
meeting for winding up the Company, or for abrogating, varying or modifying any special rights attaching to
them.
Having earlier ceased to be convertible, the outstanding cumulative redeemable preference shares were redeemed
on 1 October 2003 at £1 per share. 55 Marshalls plc     Annual Report 2003
21  Share capital (continued)
10% Cumulative Preference Shares
The entire class of 10% cumulative preference shares of £1 each was reduced by virtue of a special resolution dated
22 May 2002, confirmed by an order of the High Court dated 12 June 2002. Accordingly, these shares are no longer
part of the authorised or issued share capital of the Company.
Savings-Related Share Option Scheme
Details of the options outstanding at 31 December 2003 are:
Number of options outstanding Number of ordinary shares Exercise price Normally exercisable between
31 December 31 December 31 December 31 December
2003 2002 2003 2002
17 264 32,000 279,435 230.0p 1 Dec 2003 – 31 May 2004
606 701 1,400,985 1,573,927 230.0p 1 Dec 2005 – 31 May 2006
623 965 1,432,985 1,853,362
In December 2003 192,173 share options were exercised under the Marshalls Savings Related Share Option Scheme.
These shares related to the three year section of the SAYE scheme.
Employee Profit Sharing Scheme
At 31 December 2003 the scheme held 50,777 (2002: 51,227) ordinary shares in the Company.
Executive Share Option Schemes
Details of the options outstanding at 31 December 2003 are:
Number of options outstanding Number of ordinary shares Exercise price Normally exercisable between
31 December 31 December 31 December 31 December
2003 2002 2003 2002
1 1 161,000 161,000 216.5p 17 Apr 2004 – 16 Apr 2011
2 2 135,000 135,000 219.5p 16 Oct 2004 – 15 Oct 2011
3 3 296,000 296,000 Marshalls plc     Annual Report 2003 56
Notes to the Financial Statements (continued)
22 Reserves
Other Reserves
Share Capital Profit 
premium Revaluation redemption Merger and loss 
account reserve reserve reserve account
£’000 £’000 £’000 £’000 £’000
Group:
At 1 January 2003 17,726 5,166 1,261 13,091 123,495
Retained profit for the financial year ---- 16,046
Shares issued in the year 412 ----
Share capital redeemed -- 222 - (1,108)
At 31 December 2003 18,138 5,166 1,483 13,091 138,433
Company:
At 1 January 2003 17,726 - 1,261 13,244 78,437
Profit for the financial year ---- 3,448
Shares issued in the year 412 ----
Share capital redeemed -- 222 - (1,108)
At 31 December 2003 18,138 - 1,483 13,244 80,777
The cumulative amount of goodwill, resulting from the acquisition of subsidiary undertakings and net of goodwill
relating to subsidiary undertakings disposed of, written off against consolidated reserves prior to 1 January 1998
amounts to £37,572,000 (2002: £37,572,000). 57 Marshalls plc     Annual Report 2003
23 Reconciliation of operating profit to cash inflow from operating activities
2003 2002
£’000 £’000
Operating profit 53,128 50,329
Amortisation charges 1,430 1,190
Depreciation charges 17,538 15,848
Loss/(profit) on sale of tangible fixed assets 317 (66)
Decrease/(increase) in stocks 6,711 (9,721)
Increase in debtors (1,382) (964)
Increase/(decrease) in creditors 3,519 (2,008)
Cash inflow from operating activities 81,261 54,608
24 Analysis of cash flows for headings netted in the cash flow statement
2003 2002
£’000 £’000
(i) Returns on investments and servicing of finance
Interest received 30 11
Interest paid (2,788) (3,279)
Preference dividend paid (72) (137)
Interest element of finance lease rental payments (1) (2)
(2,831) (3,407)
(ii) Capital expenditure
Purchase of tangible fixed assets (40,812) (36,521)
Sale of tangible fixed assets 1,010 2,689
(39,802) (33,832)
(iii)Acquisitions and disposals
Purchase of a business (Note 26) (2,014) (3,890)
Disposal and termination of business (Note 2) - 13,100
(2,014) 9,210 Marshalls plc     Annual Report 2003 58
Notes to the Financial Statements (continued)
25 Purchase of subsidiary undertakings
2003
£’000
Fixed assets (Note 12) 4
Stocks 477
Debtors 1,541
Bank overdraft (821)
Creditors (1,050)
Net assets acquired 151
Goodwill (Note 11) 1,042
1,193
Satisfied by:
Cash 1,150
Costs 43
1,193
On 14 March 2003, the Company acquired Stone Shippers Limited, a business engaged in the importation and
distribution of stone products.
No material fair value adjustments were required in respect of the assets acquired. The results of the business have
been included in the consolidated Group accounts using the acquisition method of accounting, from the date of
purchase. The post acquisition results are not considered to be material and no separate disclosure has been
provided in these financial statements.
26 Net cash outflow in respect of the purchase of subsidiary undertakings
2003 2002
£’000 £’000
Cash consideration (Note 25) 1,150 4,750
Expenses of acquisition 43 39
Bank overdrafts/(Cash at bank and in hand) acquired 821 (899)
2,014 3,890
27 Analysis of net debt
2003 Cash Flow 2002
£’000 £’000 £’000
Cash in hand and at bank 7,884 577 7,307
Debt due after one year (20,000) - (20,000)
Debt due within one year (1,124) 4,072 (5,196)
Finance leases (3) 3 (6)
Total net debt (13,243) 4,652 (17,895) 59 Marshalls plc     Annual Report 2003
28 Capital commitments
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Capital expenditure that has been contracted 
for but for which no provision has been made 
in the Financial Statements 3,960 15,613 - -
29 Leasing commitments
Group Company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
At 31 December 2003 there were annual 
commitments under non-cancellable operating 
leases in respect of plant, machinery and vehicles 
as follows:
Expiring:
within one year 352 361 32 8
between two and five years 5,538 3,549 118 85
5,890 3,910 150 93
30 Contingent liabilities
Royal Bank of Scotland plc has issued, on behalf of Marshalls plc, irrevocable letters of credit for £1,075,000,
£1,400,000 and £1,400,000 in respect of the Group’s employers liability insurance cover with XL Winterthur. These
sums relate to the Group’s cap on self insurance in relation to the 12 months ended 21 October 2002 and the periods
ended 31 October 2003 and 31 October 2004 respectively.
31 Pension scheme
The Group operates the Marshalls Pension and Life Assurance Scheme which has both a defined benefit and a
defined contribution section. The assets of the Scheme are held in separately managed funds which are
independent of the Group’s finances.
SSAP24
A funded defined benefit scheme covering certain employees is operated by Trustees as a self-administered
independent fund using external investment managers. The Scheme is valued by an independent Actuary and an
actuarial valuation was carried out as at 6 April 2003 using the discounted income projected unit method. The main
actuarial assumptions used for accounting purposes were investment returns exceeding salary growth by 3.5% per
annum and pension increases of 3.0% per annum for pre 6 April 1997 benefits and at 3.25% per annum for post 6 April
1997.
The valuation showed that the market value of the Scheme’s assets at 6 April 2003 was £95.6 million and the market
value for the purposes of the Annual Report at 31 December 2003 was £114.0 million. The actuarial value of the assets
at 6 April 2003 was £117.1 million, whereas the actuarial valuation of the Scheme liabilities was £116.9 million. The ratio
of the value of the assets to the valuation of the liabilities is therefore 100% on an ongoing basis.
The contribution rate currently being paid (including the insured death in service benefits, expenses, member
contributions and Age Related Rebate) is 12.7% of total pensionable salaries. Marshalls plc     Annual Report 2003 60
Notes to the Financial Statements (continued)
31 Pension scheme (continued)
In recognition of the fact that the cost of pension provision is increasing,the Company intends to increase their contribution
rate by 1% from April 2004, and by a further 1% from April 2005. It is also planned that member contributions will increase
by a similar amount in order for employees to maintain the current level of benefit accrual. In addition, Limited Price
Indexation will replace guaranteed increases in pensions for future service.
The defined benefit scheme charge for the year was £1,595,000 (2002: £1,718,000).
Certain other employees are members of a company defined contribution scheme which invests funds in which the
contributions for each individual member are separately identifiable and the benefits calculated accordingly. The total of the
defined contributions schemes’and insured schemes’costs charged for the year was £516,000 (2002: £268,000).
FRS17
Whilst the Company continues to account for pension costs in accordance with Statement of Standard Accounting Practice
24 "Accounting for Pension Costs" under FRS17 "Retirement benefits" the transitional disclosures set out below are required.
The most recent actuarial valuation of the defined benefit scheme has been updated by an independent, qualified Actuary
to take account of the requirements of FRS17 in order to assess the liabilities of the Scheme at 31 December 2003.
Main assumptions for FRS17 purposes: 31 December 2003 31 December 2002 31 December 2001
Discount rate 5.50% 5.50% 6.00%
Rate of increase in salaries 3.50% 3.50% 4.00%
Rate of increase in pensions payment 3.10% 3.10% 3.10%
Inflation rate 2.80% 2.25% 2.50%
The assumptions used by the Actuary are the best estimates chosen from a range of possible actuarial assumptions.
The fair value of the defined benefit scheme’s assets, which are not intended to be realised in the short term and may
be subject to significant change before they are realised, and the present value of the Scheme’s liabilities, which are
derived from cash flow projections over long periods and thus inherently uncertain, were:
Long-term Value at Long-term Value at Long-term Value at
rate of return 31 December rate of return 31 December rate of return 31 December 
expected at 2003 expected at 2002 expected at 2001
31 December £’000 31 December £’000 31 December £’000
2003 2002 2001
Equities 6.50% 79,908 6.50% 67,921 6.75% 85,175
Bonds 4.50% 33,108 4.50% 27,340 4.75% 26,228
Other 4.50% 949 4.50% 1,077 4.75% 1,951
113,965 96,338 113,354
The following amounts at 31 December 2003 and 31 December 2002 were measured in accordance with the
requirements of FRS17:
2003 2002
£’000 £’000
Total market value of assets 113,965 96,338
Present value of Scheme liabilities (159,740) (142,270)
Deficit in the Scheme (45,775) (45,932)
Related deferred tax asset 13,733 13,780
Net pension liability (32,042) (32,152) 61 Marshalls plc     Annual Report 2003
31  Pension scheme (continued)
If the above amounts had been recognised in the Financial Statements, the Group’s net assets and profit and loss
reserve at 31 December 2003 and 31 December 2002 would be as follows:
2003 2002
£’000 £’000
Net assets excluding pension liability 218,148 202,746
Net pension liability (32,042) (32,152)
Net assets including pension liability 186,106 170,594
Profit and loss reserve excluding pension liability 138,433 123,495
Net pension liability (32,042) (32,152)
Profit and loss reserve including pension liability 106,391 91,343
The method of calculating the net pension asset or liability under FRS17 is likely to lead to volatility in the amounts
to be included in the Group’s balance sheet and the profit and loss account financing charge when this accounting
standard is fully adopted.
The Scheme assets, the majority of which are equities, are potentially subject to significant market movements. At
31 December 2003, the FTSE All Share Index was at its highest point in the year. Its lowest point during the year was
27.8% below the value at the balance sheet date.
The Scheme’s liabilities are measured by reference to long-term AA corporate bond yields that can again move
significantly and according to market conditions. The yield on the AA corporate bond index used was in the range
5.10% to 5.60% in the year ended 31 December 2003.
The following amounts would have been recognised in the performance statements in the year ended 31 December
2003 under the requirements of FRS17:
2003 2002
£’000 £’000
Operating profit:
Current service cost 4,664 3,853
Gain on curtailment relating to disposal and termination of business - (541)
4,664 3,312
Other finance income (net):
Expected return on pension scheme assets 5,655 7,049
Interest on pension scheme liabilities (7,873) (7,763)
Net return (2,218) (714)
Consolidated statement of total recognised gains and losses ("STRGL")
Actual return less expected return on pension scheme assets 13,283 (22,825)
Experience gains and losses arising on the Scheme liabilities (5,837) 2,666
Changes in assumptions underlying the present value of the Scheme liabilities (2,014) (8,031)
Actuarial gain recognised in STRGL 5,432 (28,190) Marshalls plc     Annual Report 2003 62
Notes to the Financial Statements (continued)
31  Pension scheme (continued)
A reconciliation of the movement in the deficit during the year is set out below:
£’000
Deficit in the Scheme at 1 January 2003 (45,932)
Movement in year:
Current service cost (4,664)
Contributions 1,607
Other finance income (net) (2,218)
Actuarial gain 5,432
Deficit in the Scheme at 31 December 2003 (45,775)
Details of experience gains and losses were: 2003 2002
£’000 £’000
Difference between the expected and actual return on the Scheme assets 13,283 (22,825)
Percentage of the Scheme assets 12% 24%
Experience gains and losses on the Scheme liabilities (5,837) 2,666
Percentage of the present value of the Scheme liabilities (4%) 2%
Total amount recognised in the STRGL 5,432 (28,190)
Percentage of the present value of the Scheme liabilities 3% 20%
The Directors have concluded that it is not practicable to allocate the assets and liabilities of the Group’s defined
benefit pension plan to the Company. Hence the transitional disclosures required under FRS17 are provided for the
Group only.
32 Subsidiary undertakings
The principal wholly owned subsidiary undertakings of Marshalls plc at 31 December 2003 are set out below. All the
companies operate within the United Kingdom and are registered in England and Wales.
Subsidiaries Principal activity
Marshalls Mono Limited Concrete products manufacturer and quarry owner producing hydraulically
pressed road kerb and paving, reconstructed stone walling, garden paving,
block paving, drainage products, street furniture, crushed aggregates,
roadstone and natural stone products.
Marshalls Clay Products Limited Clay products manufacturer.
Stonemarket Limited Concrete and stone landscape products manufacturer and supplier.
Stancliffe Stone Co. Limited Quarrying of stone and supply of walling, paving and masonry products.
Classical Flagstones Limited Manufacturer and supplier of concrete products for internal and external 
applications.
Lloyds Quarries & Sand & Gravel Extraction and sale of sand and gravel.
Co. Limited *
Stone Shippers Limited Importation and distribution of stone products.
* held by subsidiary undertaking
33 Post Balance Sheet Events
On 30 January 2004 the Group acquired the entire share capital of The Great British Bollard Company Limited for a
consideration of £510,000. The company manufactures street furniture products. Shareholder Information
63 Marshalls plc     Annual Report 2003
Shareholder Analysis at 31 December 2003
Size of Number of Number of 
Shareholding Shareholders % Ordinary Shares %
1 to 500 2,113 39.1 281,760 0.2
501 to 1,000 732 13.6 549,449 0.3
1,001 to 2,500 956 17.7 1,667,684 1.0
2,501 to 5,000 665 12.3 2,439,271 1.5
5,001 to 10,000 371 6.9 2,639,246 1.6
10,001 to 25,000 228 4.2 3,573,529 2.1
25,001 to 100,000 155 2.8 7,711,801 4.6
100,001 to 250,000 73 1.4 12,036,853 7.2
250,001 to 500,000 39 0.7 13,400,793 8.0
500,001 and above 71 1.3 123,046,497 73.5
5,403 100.0 167,346,883 100.0
Financial Calendar
Preliminary Announcement of results for the year ended
31 December 2003 Announced 5 March 2004
Annual General Meeting, Court Meeting of Shareholders 
and Extraordinary General Meeting 10 June 2004
Final dividend for the year ended 31 December 2003 Payable 7 July 2004
Interim results for the year ending 31 December 2004 Announcement 3 September 2004
Interim dividend for the year ending 31 December 2004 Payable 8 December 2004
Results for the year ending 31 December 2004 Announcement Early March 2005
Registrars and General
All administrative enquiries relating to shareholdings should, in the first instance, be directed to Computershare Investor
Services plc, PO Box 82, The Pavilions, Bridgwater Road, Bristol BS99 7NH, telephone: 0870 702 0000, fax: 0870 703 6116,
and clearly state the registered shareholder’s name and address.
Amalgamation of Shareholdings
If you are receiving more than one copy of our Annual Report, this may be because you have several accounts on our
Share Register. If you would like these accounts amalgamated, this can be done without charge if you write to the
Registrar enclosing your Share Certificates.
Dividend Mandate
Any shareholder wishing dividends to be paid directly into a bank or building society should contact the Registrar for a
dividend mandate form. Dividends paid in this way will be paid through the Bankers Automated Clearing System (BACS).
Website
The Group has an internet website which gives information on the Group, its products and provides details of significant
Group announcements. The address is www.marshalls.co.uk Marshalls plc     Annual Report 2003 64
Financial History
Year to Year to Year to Year to Year to
December December December December December
1999 2000 2001 2002 2003
£’000 £’000 £’000 £’000 £’000
Turnover 278,547 298,179 328,036 342,056 349,481
Operating profit before operating 
exceptional costs and goodwill amortisation 42,868 43,782 48,865 51,519 54,558
Operating exceptional costs - (1,106) (2,508) - -
Goodwill amortisation (629) (768) (1,024) (1,190) (1,430)
Operating profit 42,239 41,908 45,333 50,329 53,128
Gain on disposals of property 515 2,720 321 - -
Gain on disposal and termination of business - - - 2,255 -
Profit on ordinary activities before interest 42,754 44,628 45,654 52,584 53,128
Interest  (net) (2,110) (2,772) (2,943) (3,193) (2,725)
Profit on ordinary activities before taxation 40,644 41,856 42,711 49,391 50,403
Taxation on profit on ordinary activities (12,664) (12,770) (14,003) (15,750) (15,902)
Profit for the financial year 27,980 29,086 28,708 33,641 34,501
Preference dividends: Non equity shares (3,596) (2,359) (174) (137) (54)
Profit attributable to ordinary shareholders 24,384 26,727 28,534 33,504 34,447
Ordinary dividends: Equity shares (10,431) (13,964) (15,846) (16,737) (18,401)
Retained profit for financial year 13,953 12,763 12,688 16,767 16,046
Earnings per share: pppp p
Basic 19.14 18.91 17.11 20.05 20.61
Diluted 17.00 18.89 17.10 20.02 20.58
Adjusted basic* 16.98 16.73 17.58 19.41 21.46
Dividends per share 8.00 9.00 9.50 10.00 11.00
* Adjusted basic earnings per share are adjusted for goodwill amortisation, gain on disposals of property, exceptional
gain on disposal and termination of business, the associated taxation, and the conversion of cumulative redeemable
preference shares.
£’000 £’000 £’000 £’000 £’000
Fixed assets 154,056 164,911 191,218 208,812 230,375
Net current assets 41,314 47,254 34,344 33,789 29,048
Total assets less current liabilities 195,370 212,165 225,562 242,601 259,423
Creditors due after more than one year (20,027) (21,344) (20,007) (20,003) (20,000)
Provision for liabilities and charges (16,270) (17,340) (18,843) (19,852) (21,275)
Net assets 159,073 173,481 186,712 202,746 218,148
Net funds / (borrowings) (6,451) (8,842) (12,862) (17,895) (13,243)
Gearing ratio (4.1)% (5.1)% (6.9)% (8.8)% (6.1)% 55563_Marshalls_R&A_cover  4/5/2004  11:19  Page 2