DS Smith Plc
4-16 Artillery Row
London SW1P 1RZ
United Kingdom
Telephone +44 (0) 20 7932 5000
Fax +44 (0) 20 7932 5003
Email ir@dssmith.co.uk
www.dssmith.uk.com
Annual Report
2003
Annual Report 2003 DS Smith Plc Focused on two activities
– Packaging
– Office Products
International operations
– Located in 16 countries
– Selling to over 40 countries
Leading positions in our
chosen markets
DS Smith Plc
Contents
1 Financial Highlights
2 Group Overview
4 Chairman’ s Statement
5 Chief Executive’ s Review
8 Operating Review – Packaging
14 Operating Review – Office Products
18 Financial Review 
22 Corporate Social 
Responsibility Review
25 Directors and 
Company Secretary
26 Corporate Governance
28 Report on Remuneration
35 Directors’ Report
37 Independent Auditor’ s Report
38 Financial Statements and 
Notes to the Financial Statements
64 Five Year Financial Summary
65 Notice of Annual General Meeting
68 Shareholder Information
IBC Principal Locations
Cover picture: checking that print quality
meets our customer’ s specifications at 
DS Smith Packaging, Lockerbie.
Countries in which we operate
Australia
Belgium
Czech Republic
Dominican Republic
France
Germany
Ireland
Israel
Italy
New Zealand 
Poland 
Spain
Turkey
Ukraine 
United Kingdom
USA
Group office
DS Smith Plc
4-16 Artillery Row
London SW1P 1RZ
United Kingdom
Telephone +44 (0) 20 7932 5000
Divisional offices
DS Smith Packaging
Pilgrim House
2-6 William Street
Windsor
Berkshire SL4 1BA
Telephone +44 (0) 1753 754 380 
Kaysersberg Packaging SA
BP 1
68320 Kunheim
France
Telephone +33 (0) 389 722 454
St Regis Paper Company Limited
Mill Lane
Taplow 
Maidenhead 
Berkshire SL6 0AF
Telephone +44 (0) 1628 798 111
Principal Locations
DS Smith Plastics
Brownsover Road 
Rugby
Warwickshire CV21 1HL
Telephone +44 (0) 1788 535 329
Spicers Limited 
Sawston
Cambridgeshire CB2 4JG
Telephone +44 (0) 1223 834 555
John Dickinson Stationery Limited 
Sawston
Cambridgeshire CB2 4XD
Telephone +44 (0) 1223 830 083 Profit before tax* 
up 27% at £79.7m
Operating margin*
up from 5.0% 
to 5.9%
Packaging:
continued progress;
operating profit*
£67 .8m
Office Products:
turnaround in
operating profit* 
to £20.2m
Return on capital
employed*up from
9.2% to1 1.3%
Earnings per share* 
up 29% at 18.0p
Full year dividend
maintained at 8.8p
Net cash inflow
after dividends and
acquisitions £15.6m
Interest cover 
8.3 times
1 DS Smith Plc Annual Report 2003
Financial Highlights
2003
(£ millions)
Operating Profit*
2002
72.0
2003
88.0
2002
63.9
2003
67.8
2002
8.1
2003
20.2
Group Packaging Office Products Group Packaging Office Products
2002
9.2
2003
11.3
2002
10.4
2003
10.7
2002
4.8
2003
14.0
(%)
Return on Capital Employed*
*Before exceptional items and amortisation of
intangibles – see Group Profit and Loss Account. 2 DS Smith Plc Annual Report 2003
Group Overview
Corrugated and Paper
Produces 1.1 billion square metres per annum of corrugated packaging at 25 factories in 
the UK and 13 factories in continental Europe, located in France, Italy, Poland, the Czech
Republic, Turkey and the Ukraine. Manufactures 1.2 million tonnes of paper per annum 
at six mills in the UK, two mills in France and one in Turkey; 75% is corrugated case
materials (CCM) used for manufacturing corrugated board; 90% is made from recycled
recovered paper.
Managed through three divisions: DS Smith Packaging (UK corrugated packaging);
Kaysersberg Packaging (continental European corrugated packaging and paper); St Regis
Paper Company (UK paper), including Severnside Recycling which collects 0.8 million
tonnes of recovered materials per annum.
Plastic Packaging
Manufactures products for liquid packaging and dispensing, and industrial returnable
transit packaging (RTP) at 18 locations in the UK, France, Belgium, Germany, Spain,
Poland, USA, Dominican Republic, Australia and New Zealand.
Liquid packaging and dispensing incorporates bag-in-box systems and injection 
moulded taps and dispensers.
Industrial RTP includes reusable container and pallet systems, extruded solid 
and multi-wall (corrugated plastic) sheets and injection moulded bottle crates.
Wholesaling 
Spicers is a wholesaler of office products through a network of distribution centres in the
UK, Ireland, France, Germany and Spain. Its product range of between 8,000 and 18,000
items (dependent upon country) includes traditional stationery lines, electronic office
supplies, office furniture, janitorial supplies and office catering and vending provisions.
Spicers produces printed catalogues and uses electronic systems to communicate its product
range to its customer base of office product dealers. Orders are generally fulfilled through 
a next-day delivery service.
Manufacturing 
John Dickinson manufactures envelopes, books and pads at three UK factories.
Its product range features leading brands including Basildon Bond, Black n’ Red,
Challenge, New Guardian and Plus Fabric. It also supplies own label products and 
bespoke stationery .
Packaging
Office Products 3 DS Smith Plc Annual Report 2003
£747.0m
turnover 
51%
of Group turnover
10.6%
return on capital employed
Developing our strong regional European
positions:
– Number 1 UK collector and merchant 
of recovered paper
– Number 1 UK producer of corrugated
case material
– A leading European supplier of
corrugated packaging
– Number 3 UK supplier
– Major position in France
– Growing in Italy and Eastern Europe
Corrugated packaging is increasingly used
as both the transit and display packaging 
for consumer goods.
£195.0m
turnover 
13%
of Group turnover
11 .5%
return on capital employed
Growing our major positions in our two
focused markets:
– Number 2 globally in liquid packaging
and dispensing
– A leading European supplier of
industrial returnable transit packaging
Bag-in-box packaging is a flexible, hygienic
and economic option for beverages, liquid
food products, edible oils and chemicals.
£495.6m
turnover 
33%
of Group turnover
12.7%
return on capital employed
Building our positions in continental
Europe based on our strong established
businesses in the UK and France:
– Number 1 European office products
wholesaler
– Number 1 wholesaler in UK 
– Number 1 wholesaler in France
– Developing in Germany and Spain
Spicers supplies its extensive range of
traditional stationery products alongside its
growing range of electronic office supplies.
£59.7m
turnover 
3%
of Group turnover
23. 1%
return on capital employed
Maximising returns from our leading UK
market positions:
– Number 1 in envelopes
– Number 1 in pads and personal stationery 
– Number 1 in casebound books
Demand for Black n’ Red branded products 
is increasing internationally .
Market positions Key figures Products
www.dssmith-packaging.com
www.kaysersberg-packaging.com
www.stregis.co.uk
www.dssmith-plastics.com
More information can be found 
on our divisions at:
www.spicers.net
www.johndickinson.eu.com 2002/03 was a challenging year in which
demand weakened in most of our markets.
We also had to contend with substantial
fluctuations in the price of recovered paper,
the principal raw material for our largest
business segment, Corrugated and Paper
Packaging. Despite these difficulties,
I am pleased to report that we met our 
key objectives of maintaining progress 
in Packaging and rebuilding profitability 
in Office Products. This was achieved
through continuing to raise operational
performance and realising the benefits 
of the acquisitions made in recent years.
The Group’s earnings per share before
exceptional items and amortisation of
intangibles advanced by 29% to 18.0p.
The net cash inflow after dividends and
acquisitions was £15.6 million compared 
with an outflow of £1.6 million in the
previous year.
Y our Board attaches considerable importance
to the Group’s capacity to pay its shareholders
a reliable and significant dividend consistent
with its objective of sustaining around two
times dividend cover over the course of the
business cycle. The Board is recommending 
a final dividend of 6.0p per ordinary share
which, together with the interim dividend of
2.8p, maintains the total dividend for the year
at 8.8p per ordinary share.
The Group continues to pursue its strategy 
of operational improvement and development
of its two principal activities, Packaging and
Office Products Wholesaling. In 2002/03, we
built further on our strong market positions
and raised the Group’s return on capital
employed from 9.2% to 11.3%. We will
continue to invest in capital projects and 
bolt-on acquisitions which strengthen our
competitiveness in selected sectors, while
remaining focused on raising returns.
In November 2002, Gavin Morris was
appointed Group Finance Director,
bringing extensive financial and international
management experience to the Group.
David Buttfield, who had been Group Finance
Director since 1994, took early retirement
and stood down from the Board in January
2003. The Board thanks David for his
valuable contribution and for maintaining
the Group’s sound financial position through
an ever-changing trading environment.
I would also like to thank all the Group’s
employees worldwide for their contribution
to the year’s good result. The progress 
we have achieved in such tough market
conditions would not have been possible
without their enthusiasm and commitment.
Over the last year , the Group has demonstrated
its resilience and its ability to operate
successfully in tough markets. In the current
year, margins in our Paper business are under
increased pressure but we are confident that
the other parts of the Group will make
further progress.
Antony Hichens
Chairman
4 DS Smith Plc Annual Report 2003
Chairman’ s Statement
Antony Hichens
We met our key objectives
of maintaining progress
in Packaging and 
rebuilding profitability
in Office Products Overview
At the start of the financial year 2002/03,
we recognised that we could not expect any
significant improvement in demand in most
of our markets and that we were also facing 
a squeeze on our margins in paper following
a sharp rise in recovered paper prices.
Against this background, our principal
financial objectives were to maintain 
our progress in Packaging and to improve
profitability in Office Products. I am pleased
to report that the team’s concentration on
mix management, cutting costs and attention
to cash, combined with the benefits from
actions we had taken previously, enabled 
us to meet these objectives while also
continuing the development of the Group.
Group sales increased by 3% to
£1,479.0 million, of which 2% was
attributable to acquisitions. Operating 
profit before exceptional items and
amortisation of intangibles advanced in 
all four of our business segments, giving 
an overall increase of 22% to £88.0 million;
at constant exchange rates the increase was
20%. Operating margin rose from 5.0% to
5.9% while return on average capital employed
moved from 9.2% to 11.3%. Interest cover
remained strong at 8.3 times.
Profit before tax, exceptional items and
amortisation of intangibles rose 27% to
£79.7 million while adjusted earnings per
share advanced by 29% to 18.0p.
The cash inflow after dividends, but before
net acquisitions, was £31.7 million. After net
expenditure on acquisitions of £16.1 million,
principally in the liquid packaging and
dispensing segment of Plastic Packaging,
there was a net cash inflow of £15.6 million
which resulted in net borrowings of
£202.3 million (2001/02: £195.9 million) 
after the effect of exchange rate movements.
The resultant gearing was 43% (45%).
These results reflect the strength of many of
the Group’s market positions and the skill
and determination with which the divisional
management teams have run their operations.
Packaging
Our larger activity , Packaging, which
accounted for 64% of Group sales and 77% 
of normalised operating profit, raised sales
and operating profit before exceptional items
and amortisation of intangibles by 6% despite
flat or declining demand in the majority 
of its markets. The recent acquisitions made 
a strong contribution to this result.
In Corrugated and Paper , sales and 
operating profit before exceptional items 
and amortisation of intangibles both
increased by 4%. The management of price
volatility was particularly challenging this
year. Price movements in recovered paper ,
our principal raw material, resulted in periods
of margin squeeze and triggered substantial
movements in paper and corrugated prices
over the course of the year. W e dealt with
these changing circumstances through 
timely price adjustments and continuing 
cost control, although the underlying lack 
of customer demand limited our scope to
recover fully raw material cost increases.
Despite increased efficiencies, this market
environment resulted in lower profits from
our UK paper operations. An underlying
improvement in the performance of our
corrugated operations, enhanced by the
benefits of recent investment and, in the 
UK, by the acquisition of Danisco’s plants,
allowed us to more than compensate for 
this profit shortfall.
In Plastic Packaging, we continued to 
make good progress, with a 13% increase 
in sales and a 16% advance in operating profit
before exceptional items and amortisation of
intangibles. Strong growth was maintained 
in liquid packaging and dispensing, boosted
by the acquisition of a leading European
manufacturer of bag-in-box packaging.
Since the year end we have also acquired 
the remaining 50% shareholding in our
Australasian operation, strengthening our
base in the Asia-Pacific market. In industrial
returnable transit packaging (RTP), our
bottle crate business performed well.
Trends in sales of other RTP products varied,
depending upon the sector , but were helped
by new product development and our pan-
European approach to the market.
5 DS Smith Plc Annual Report 2003
Chief Executive’ s Review
Tony Thorne
We improved our
operations and
continued the 
strategic development 
of our businesses Office Products
The decisive actions taken by the management
teams towards the end of 2001/02 in both
Wholesaling and Manufacturing resulted 
in a turnaround in profits despite the very
poor demand for office products across
Europe. T otal Office Products sales were 
2% lower, partly due to decisions to exit 
some unprofitable areas of business, but
operating profit before exceptional items 
and amortisation of intangibles increased
from £8.1 million to £20.2 million.
In Office Products Wholesaling, the 
extensive improvement programme that 
was implemented throughout Spicers’
operations enabled it to meet its targets 
for rebuilding profitability . Operating profit
before exceptional items and amortisation 
of intangibles increased from £9.7 million 
to £16.2 million. In the UK, high service 
levels were achieved and margins improved
through reduced operating costs and margin
management. Spicers France, operating 
in increasingly tough market conditions,
performed well although its result was 
slightly lower than the previous year. Spicers
Germany has rebuilt customer confidence
and is now making progress in very tough
market conditions, while in Spain, where 
we are still at an early stage of development,
sales are growing steadily .
Our Office Products Manufacturing business,
John Dickinson, achieved a turnaround in
profit from a loss before exceptional items 
of £1.6 million to a profit of £4.0 million,
benefiting from both significant cost
reduction and lower depreciation following
the impairment of assets taken in 2001/02.
Strategy
The Group has strong market positions 
with good potential in both its Packaging
and Office Products activities. We will
continue to use our sound financial base 
and strong management teams to develop
these two activities in parallel. In order to
improve overall returns we will restructure
businesses where necessary or exit them 
if we do not believe we can raise returns 
to satisfactory levels. In 2002/03 we sold 
three small peripheral businesses for a total
consideration of £4.5 million. New capital 
for investment or acquisitions continues 
to be committed prudently with the priorities
being cost reduction and the seizing of
opportunities in new products or markets.
In Corrugated and Paper, two important
trends that our strategy is addressing are 
the greater growth for corrugated packaging
in central and eastern Europe, and the
increase in demand for lighter weight papers.
In recognition of the low market growth in
the UK and France, we have set demanding
productivity targets for our operations 
in these markets while concentrating our
development efforts on higher margin
segments. Building on our strong bases 
in the UK and France, we are growing 
our corrugated packaging positions in 
Italy, Poland and the Ukraine. Despite
ongoing operational improvements in our
Turkish business, the country’s economic
environment is such that the business is loss
making and the resolution of this situation
remains a priority . We continue to be alert to
good value bolt-on acquisitions in corrugated
packaging. In our Paper operations, we are
meeting the market trend to lighter weight
papers through adapting successfully our
existing mills to run these products efficiently .
Plastic Packaging has the prospect of
strong and profitable growth in our selected
markets. We now have a leading global
business in liquid packaging and dispensing,
a market that is expected to continue
expanding and should provide further
development opportunities. In industrial
RTP we have developed strong European
positions in a number of sectors of the
market in which we can build organically 
and through acquisitions.
Spicers Office Products Wholesaling has
pre-eminent positions in the UK and France,
emerging positions in Germany and Spain
6 DS Smith Plc Annual Report 2003
Chief Executive’ s Review
Tony Thorne
Contributing 
to progress
People throughout the Group played
their part in improving our operations
1 Our manufacturing teams use their
expertise to produce top quality packaging.
2 Paper reels receive a final inspection to
ensure they meet customers’ requirements.
3 Spicers’ customer service teams operate 
to demanding response standards.
2 1 and a base for entering the Italian market 
in late 2004. We are confident, given our
success in France and the development of
an expanding customer base in Germany,
that we can enhance the value of Spicers
through building its position in continental
Europe. The priority for management is to
achieve profit breakthrough in Germany 
and strong sales growth in Spain.
Pension scheme
During the year we reviewed the position 
of our UK defined benefits pension scheme.
We decided to retain the scheme for current
and new members, while keeping the position
under review pending the next triennial
valuation which is due to take place as at
April 2004. In the year, we reduced some of
the benefits to lower the ongoing cost of the
scheme to the Company . The Company has
resumed payments into the scheme at the rate
of £10 million per annum, broadly the annual
cost of the scheme, with £5 million being paid
in the second half of 2002/03. In accordance
with SSAP 24, these payments are being
treated as prepayments on the balance sheet
and are not being shown as a charge to 
the profit and loss account until the next
triennial valuation. The historic SSAP 24
surplus will continue to generate a net 
credit to the profit and loss account of
approximately £10 million until the next
valuation, thereby offsetting the ongoing
costs of providing benefits under the scheme,
resulting in a nil SSAP 24 pension charge.
Under the FRS 17 accounting standard 
the scheme had a post-tax net deficit, as at
30 April 2003, of £93.8 million compared with
a post-tax net deficit of £7.3 million a year ago.
Outlook
In 2002/03 we improved our operations and
continued the strategic development of our
businesses. These actions underpinned the
year’s results and further strengthened our
market positions.
We have yet to see an improvement in the
trading environment. Therefore, our focus
will continue to be on raising operational
performance and building on these strong
market positions. While, at this early stage 
of the year, movements in recovered paper
prices are putting increased pressure on
margins in our substantial Paper business,
I am confident that the rest of the Group 
will make further progress.
Tony Thorne
Group Chief Executive
7 DS Smith Plc Annual Report 2003
3
Our focus will continue
to be on raising
operational performance
and building on our
strong market positions 8 DS Smith Plc Annual Report 2003
Operating Review
Packaging
1
Financial Highlights
Return on
Turnover Operating profit* capital employed*
2003 2002 2003 2002 2003 2002
£m £m £m £m % %
Corrugated and Paper 747.0 720.5 53.1 51.2 10.6 10.0
Plastic Packaging 195.0 171.9 14.7 12.7 11.5 12.2
Packaging 942.0 892.4 67.8 63.9 10.7 10.4
2002 figures are restated – see note 1 to the accounts.
*Before exceptional items and amortisation of intangibles. T otal Packaging sales increased by 6% to
£942.0 million. Operating profit before
exceptional items and amortisation of
intangibles advanced by 6% to £67.8 million
and the operating margin remained at 
7.2%. Return on capital employed rose 
from 10.4% to 10.7%.
Corrugated and Paper
Sales in the Corrugated and Paper segment
increased by 4% to £747.0 million. Excluding
the effect of acquisitions, principally the
former Danisco plants acquired in September
2001, the growth was 2%. Operating profit
before exceptional items and amortisation 
of intangibles grew by 4% to £53.1 million
with lower profits in paper being more 
than compensated for by higher profits 
in corrugated. Operating margin was
unchanged at 7.1% while return on capital
employed rose from 10.0% to 10.6%.
Industry statistics for calendar year 2002
show that overall volume demand for
corrugated board in Europe increased by
2.7%. However, demand in the Group’s
major markets remained weak, with the UK
experiencing a marginal decline of 0.2% and
France being down by 2.3%, after falls of
3.7% and 1.9%, respectively, in the previous
year. Demand was significantly stronger in
the Group’s two principal development
markets, Italy and Poland, which grew by
3.3% and 20.8%, respectively . In the first
quarter of calendar year 2003, demand in 
the UK and France was flat, while Italy and
Poland continued to grow, but at lower rates
than in 2002*. T otal imports of corrugated
case materials (CCM) into the UK in
calendar year 2002 were flat year-on-year.
There was considerable price turbulence
throughout the corrugated and paper supply
pipeline during 2002/03 due to volatility in 
the price of recovered paper , the principal 
raw material for CCM. Recovered paper
prices rose sharply through the first half of
calendar year 2002, peaking in the second
quarter , principally due to strong demand
from Asia where there has been substantial
investment in recycled paper manufacturing.
Prices subsequently fell back during the
autumn, although not to their 2001 average
level, and then increased again in the early
months of 2003. CCM prices rose during the
second quarter of calendar year 2002, driven
by the increase in recovered paper prices,
but then softened towards the end of 2002.
The movement in CCM prices necessitated 
an increase in corrugated box prices in 
late summer and early autumn 2002 but
weakening economic conditions led to box
prices coming under pressure from January
2003 onwards.
These sharp price movements resulted in
margins being squeezed in both our paper and
corrugated operations at various times during
the year. However , by managing the adjustment
of prices across the segment at appropriate
times, maintaining tight cost controls and
effecting other operational improvements we
were able to raise the overall result.
*Source: European Federation of
Corrugated Board Manufacturers
9 DS Smith Plc Annual Report 2003
Operating Review
Packaging
Corrugated and Paper
Operational focus
Close attention to operational
performance contributed to raising 
the Corrugated and Paper result
1 Recovered paper is fed into Kemsley 
mill’ s recycling system, round the clock,
throughout the year, to keep the paper
machines running.
2 Monitoring and control of the recycling of
recovered paper in the stock preparation
system is critical to producing high 
quality paper.
3 Films are checked for accurate alignment
before printing at the Lockerbie speciality
packaging factory.
3 2 DS Smith Packaging
The Group’s UK corrugated division,
DS Smith Packaging, continued to improve
its profits through better operational
efficiency and increasing focus on higher
added value products. The former Danisco
plants, acquired in September 2001,
contributed to the increased profitability 
and enabled the division to gain market
share. This was achieved despite flat market
demand, industry over-capacity in the 
UK and margins being squeezed by higher
paper prices for part of the year.
Profits in the conventional integrated plants
benefited from investment made in previous
years, higher productivity and initiatives to
raise service levels. The four plants are
increasingly being operated as a single business
with an integrated IT system which helps
them optimise use of their manufacturing,
sales and design capabilities for servicing a
mix of local and national accounts.
The speciality operations increased profitability
through their focus on innovation, high levels
of product differentiation and increased
efficiency . The investment in new printing
and converting facilities at the Lockerbie
DS Smith Packaging
continued to improve
its profits through
better operational
efficiency and
increasing focus on
higher added value
products
Bob McLellan
Chief Executive, DS Smith Packaging
plant is now complete and is being focused
on developing new higher added value
market opportunities. The Tri-Wall heavy
duty business maintained profits despite
continuing to suffer from the decline in UK
manufacturing industry; recent investment 
is enabling it to increase productivity and
service its markets more efficiently .
Despite particularly difficult trading conditions,
the sheet feeder plants, which produce
corrugated sheet board, and the sheet plants,
which convert board into boxes, increased
profits, principally through higher
productivity and service levels.
10 DS Smith Plc Annual Report 2003
Operating Review
Packaging
Corrugated and Paper
Adding value
DS Smith Packaging is developing its
business in higher margin segments
1 The Group has a leading position in
microflute corrugated packaging, which 
is growing rapidly as it combines light
weight with good protection and strength.
Transit packaging can also be readily 
used as attractive display packaging.
2 The latest printing technology, recently
installed at Lockerbie, requires skilled
operator monitoring and produces higher
added value products.
2 1 Kaysersberg Packaging
The Group’s continental European
packaging division, Kaysersberg Packaging,
achieved a solid result. The good performances
in the French, Polish and Italian corrugated
units were offset by poorer results in the
French paper mills and losses in Turkey .
The growing trend amongst manufacturing
companies to relocate from France
contributed to the French market being
particularly weak. Lower activity levels and
periods of margin squeeze, due to higher
recovered paper prices, affected results at 
the French paper mills. However, margins in
the French corrugated operations benefited
from good cost control and targeting higher
added value customer and market segments.
Increased operating flexibility enabled the
businesses to adjust more rapidly to changing
market circumstances. In February 2003, the
Sorepa waste collection business, in which
DS Smith held a 60% share, was sold.
In Italy , where the corrugated market continued
to grow relatively strongly, T oscana Ondulati
increased its profits and market share.
It benefited from its new lightweight
corrugated factory , opened at Lari in March
2002, which is focused on the food and ceramics
industries and has built a leading position in
the European pizza box market.
Although sales advanced at the Turkish
business and the efficiency of the operations
improved, poor market prices and the
country’s difficult economic environment have
combined to cause the business to be in loss.
Action is being taken to raise performance.
The Polish business advanced its sales 
and profits strongly, gaining share in 
a fast growing market and improving its
productivity . In addition to its conventional
corrugated business, it is developing positions
in litho-laminated and heavy duty products.
Commercial links have been established into
the Czech Republic and Slovakia to develop
sales in those markets.
11 DS Smith Plc Annual Report 2003
Operating Review
Packaging
Corrugated and Paper
Geographic growth
Kaysersberg Packaging is successfully
enlarging its business in Italy and
Eastern Europe
1 Toscana Ondulati’ s new corrugated factory
at Lari in Tuscany, Italy, is principally
focused on lightweight printed packaging.
2 The Lari factory is a leading supplier of
pizza boxes across Europe.
1
Kaysersberg
Packaging achieved 
a solid result 
Jean-Paul Loison
Chief Executive, Kaysersberg Packaging
2 St Regis Paper Company
St Regis’ margins were adversely affected 
by higher recovered paper prices resulting 
in lower profits. However, the profit was
better than expected due to a combination 
of slightly higher sales volumes and efficiency
improvements. Despite the generally weak
market conditions, record output levels were
achieved at a number of mills. Export sales
and the division’s competitiveness in the UK
market were assisted towards the end of the
financial year by the strengthening of the
euro against sterling.
The Kemsley paper mill performed well 
due to enhanced process control, improved
operational stability and further advances 
in product quality . Recent investment to 
raise production performance on lightweight
products at Kemsley and Taplow mills further
strengthened the division’s capability to satisfy
that segment of the market. Sudbrook mill
benefited from recent investment and the
withdrawal from the market of a competitor
in its principal product, semi-chemical fluting
paper. A new warehouse is under construction
at Kemsley that will virtually eliminate use of
third party warehousing, thereby significantly
reducing costs. In February 2003, the W estern
Board business, which manufactures and
converts fibreboard, and was peripheral to
St Regis’ main business, was sold.
The Severnside collection and recycling
operation performed well in the turbulent
market for recovered paper, helped by lower
costs and higher efficiencies. It processed 
a record quantity of material and invested
further in its infrastructure with the
acquisition of two additional collection
depots, one since the year end.
The value of Packaging Recovery Notes
(PRNs), which are issued as evidence 
that packaging has been reprocessed in
compliance with the UK Packaging Waste
Regulations, fell substantially towards 
the end of 2002. This was partly due to
weaker demand for PRNs following the
government’s decision not to increase
recycling targets for 2003, as well as the
unexpectedly high number of wood PRNs
issued, which is the subject of an ongoing
investigation by the Environment Agency .
12 DS Smith Plc Annual Report 2003
The profit was better
than expected due 
to a combination of
slightly higher sales
volumes and efficiency
improvements
Don Coates
Chief Executive, St Regis Paper
Operating Review
Packaging
Corrugated and Paper
1 2
Process
improvement
Kemsley mill achieved record 
annual output 
1 A new £0.7 million chemical analysis 
suite enables the production process to 
be continuously monitored and controlled;
the benefits have been increased process
stability and substantial savings in
chemical usage.
2 Improved process control results in faster
running speeds on lightweight paper and
ensures good product quality levels. Plastic Packaging
DS Smith Plastics continued its expansion
through both organic growth and acquisitions
with sales increasing by 13% to £195.0 million.
Despite margins being adversely affected 
by higher polymer prices in the latter part of
the year, operating profit before exceptional
items and amortisation of intangibles
advanced by 16% to £14.7 million helped 
by increased focus on higher added value
products and improved operating efficiencies.
Operating margin increased from 7.4% to
7.5% while return on capital employed fell
from 12.2% to 11.5%, primarily as a result of
integration costs and higher capital employed
arising from acquisitions.
The division strengthened further its global
position in the growing liquid packaging 
and dispensing market. In July 2002,
Zewathener GmbH, one of Europe’s leading
manufacturers of bag-in-box packaging, was
acquired and its integration with Rapak’s
existing bag-in-box operations is progressing
on schedule. Rapak’s European operations in
the UK and Germany benefited from strong
growth in wine bags, particularly in France
and Eastern Europe, and increasing demand
from the dairy industry . Progress in the USA
was principally attributable to sales growth
into the beverage sector , although the slow-
down in the fast food market during the Iraq
war held back demand towards the end of
the financial year. Rapak’s Australasian joint
venture was adversely affected by lower
demand from the dairy industry, due to the
drought in the region, and disruption during
the transfer of manufacturing to a new site in
Auckland. Since the year end, the Group has
acquired the remaining 50% shareholding 
in this business to strengthen its base in the
Asia-Pacific region. W orldwide Dispensers’
injection moulded taps operations in the UK
and USA are being increasingly run on an
integrated basis and continued to grow well
with strong demand for taps used in detergent
and bag-in-box packaging. Operational
performance and product quality have been
enhanced by recent investment in automated
assembly and testing.
Sales and profits in industrial returnable
transit packaging (RTP) products were
relatively flat due to the European economic
slow-down. However, the Group’s position 
in RTP was strengthened by its increasingly
pan-European approach to the market.
In extruded products, both custom-made
converted products and semi-finished solid
polypropylene and polycarbonate sheet grew
well. However, sales were lower in moulded
products, such as tailor-made containers for
the automotive industry, where the market is
project-driven. Injection moulded crates are
now being produced in four countries and
relatively strong demand in the Dominican
Republic, Spain and Poland offset weaker
demand in Belgium.
13 DS Smith Plc Annual Report 2003
Operating Review
Packaging
Plastic Packaging
DS Smith Plastics
continued its
expansion through
both organic growth
and acquisitions
Adrian Whitfield
Chief Executive, DS Smith Plastics
1 2
New markets
DS Smith Plastics is opening up new
areas of business
1 A five litre, continuously pressurised, draft
beer keg, developed for Interbrew, uses
products from four Group businesses.
Recently launched in Tesco stores, with 
an encouraging initial consumer reaction, 
it incorporates innovative tap and bag
technology that ensures optimal dispensing
of the beer for 28 days after opening. 
2 Plastic RTP is being increasingly adopted
for beverage cans. A moulded pallet with
polypropylene layer pads and top sheet
carry individual barcoded identification 
for improved logistics. 14 DS Smith Plc Annual Report 2003
Operating Review
Office Products
1
Financial Highlights
Return on
Turnover Operating profit* capital employed*
2003 2002 2003 2002 2003 2002
£m £m £m £m % %
Wholesaling 495.6 500.5 16.2 9.7 12.7 7.2
Manufacturing 59.7 66.7 4.0 (1.6) 23.1 (4.6)
(Intra-segment) (18.3) (19.4) – – – –
Office Products 537.0 547.8 20.2 8.1 14.0 4.8
*Before exceptional items and amortisation of intangibles. While total Office Products sales were 
lower at £537.0 million (£547.8 million),
operating profit before exceptional items 
and amortisation of intangibles advanced
from £8.1 million to £20.2 million and
operating margin increased from 1.5% 
to 3.8%. Return on capital employed 
rose from 4.8% to 14.0%.
Office Products Wholesaling
Spicers’ sales were slightly down at
£495.6 million with lower sales in the UK 
and Ireland and growth in continental
Europe. Operating profit before exceptional
items and amortisation of intangibles
increased from £9.7 million to £16.2 million
with a substantial improvement in the UK
being partly offset by lower margins in
France. Operating margin increased from
1.9% to 3.3% and return on capital employed
advanced from 7.2% to 12.7%.
This result was achieved through an extensive
programme of operational initiatives and
against a background of weakened demand
for office products across Europe due to the
marked impact of the economic slow-down
on office activity .
In the UK, Spicers maintained its strong
market position by focusing on meeting its
customers’ needs while increasing operational
efficiency and cost effectiveness. Margins
were enhanced by exiting unprofitable business
and reducing costs. Good progress has been
made on rebuilding and maintaining high
service levels by improving the processes 
that contribute to customers’ orders being
fulfilled accurately and promptly . The roll-
out of the upgraded IT system has been
successfully completed at all of the nine
regional distribution centres. Relocation 
of the South London regional distribution
centre to Greenwich in July 2002 increased
service capability and efficiency .
The slow-down in the French market
intensified in the course of the financial year
and this adversely affected Spicers’ growth in
the second half. Profits were lower principally
as a result of the increased costs put in to
support future sales growth, including the
establishment of a central warehouse.
15 DS Smith Plc Annual Report 2003
Service is key
Spicers’ service levels in the UK were
rebuilt and maintained at a high level
1 Spicers’ UK catalogue carries 18,000
product lines, all of which are available 
for immediate delivery.
2 The new warehouse at Greenwich improved
service to customers in the South East.
Orders received by 7p.m. are picked,
despatched and delivered to the customer
by the following morning.
3 Bar code readers are used to check in
product and ensure it is immediately
available to customers.
3 2
Operating Review
Office Products
Wholesaling
This result was
achieved through an
extensive programme
of operational
initiatives and against
a background of
weakened demand
Bill Armstrong 
Chief Executive, Spicers Spicers Germany made good progress in
rebuilding customer confidence by providing
consistently high service levels and in
expanding its dealer network; this resulted 
in sales growth, despite weak market
conditions, and provides a good basis to
achieve profitability .
The Spanish operation, launched in April
2002, is steadily building turnover; good
catalogue sales in 2003 augur well for future
sales development.
Spicers’ sales in continental Europe now
account for circa 40% of its total sales. In line
with the strategy of continued development
of Spicers in continental Europe, preparation
is under way for entering the Italian market
in late 2004. Extensive research has indicated
a good opportunity for Spicers’ business
model adapted to meet the needs of Italian
retailers and dealers.
Spicers’ Service Network
Spicers serves its office product dealer
customers from a network of regional
distribution centres (RDCs). Central
distribution centres replenish RDCs’ stock 
in the UK, Ireland and France. In the 
UK, a dealer distribution centre despatches
orders, on behalf of a dealer, directly to 
their customers. This service is also available
in France and Germany through RDCs.
The newest addition to the RDC network 
is the Greenwich warehouse in South East
London, opened in July 2002. It occupies
some 100,000 square feet with a 42,000
square feet mezzanine floor and handles 
over 8,000 product lines per day .
16 DS Smith Plc Annual Report 2003
Operating Review
Office Products
Wholesaling
Continental growth
Over the last three years, Spicers’
business in continental Europe has
grown by 70% to circa £200 million 
1 Separate catalogues are published in each
country showing local product assortments.
2 The German business is developing from 
its two regional distribution centres near
Nuremberg and Hanover.
1 2
Regional distribution centre
Central distribution centre
Dealer distribution centre Office Products Manufacturing
John Dickinson achieved a turnaround 
in profitability, from a loss before exceptional
items of £1.6 million to a profit of £4.0 million,
benefiting from the restructuring undertaken
towards the end of the previous financial
year and lower depreciation following the
impairment of assets at last year end. Sales
were 10% lower at £59.7 million, largely due
to the planned withdrawal from lower margin
products. Operating margin was 6.7% and
return on capital employed was 23.1%,
in part due to the fixed asset impairment
made in 2001/02.
Market conditions continued to be difficult
due to generally reduced demand for office
products and a sharp rise in imports of low
priced envelopes from continental Europe
where there is substantial over-capacity .
Although the own label sector of the 
business remains very price competitive,
the branded sector performed well, helped 
by strengthened marketing programmes and
product innovation. Sales of Black n’ Red
notebooks grew strongly in the UK while
sales in the USA and Europe are starting to
benefit from increased catalogue listings.
The Spicer Hallfield photographic stationery
business was sold in February 2003.
17 DS Smith Plc Annual Report 2003
Operating Review
Office Products
Manufacturing
John Dickinson
achieved a turnaround
in profitability
Richard Evans
Chief Executive, John Dickinson
2 1
New products
John Dickinson is boosting sales 
by extending its product range
1 CD sleeves are a growing market through
major retail outlets.
2 The internationally successful Black n’ Red
range now includes books containing an
integral calculator.  Group trading results
The Group’s trading results are summarised
in table 1 below .
Turnover in the financial year ended 30 April
2003 increased by 2.7% over the previous year.
Turnover was up 4.1% in the first half of
2002/03 versus the same period in 2001/02.
In the second half, however, the rate of
growth decreased to 1.3%. Excluding the
impact of acquisitions, disposals and foreign
exchange differences, turnover in the first 
half of the year was unchanged from the
previous year, while in the second half it 
was slightly down.
Operating profit before associates, exceptional
items and amortisation of intangibles increased
by 22% in 2002/03 from £72.0 million to
£88.0 million. About £1 million of the
increase was due to the impact of foreign
exchange movements on the translation of
overseas profits and a further £2.9 million 
to the net effect of acquisitions and disposals.
Operating profit before exceptional items 
and amortisation of intangibles for the first
half of the year was 16% above last year,
while that in the second half was up 31%.
The second half increase was entirely due 
to Office Products, where operating profit
before exceptional items and amortisation 
of intangibles increased from £1.4 million 
to £10.8 million despite lower sales. This
increase reflects a combination of improved
margins, lower costs and the impact of a
number of one-off charges in the prior year.
Packaging’s second half operating profit
before exceptional items and amortisation 
of intangibles was at the same level as last
year, after an 11% increase in the first half.
In part, this reflected a deterioration in
market conditions during the year.
Return on sales for the year increased from
5.0% in 2001/02 to 5.9%. The return on sales
for the second half of the year was 5.3%,
compared with 6.6% in the first half. The
Group’s return on capital employed (defined
as the period’s annualised operating profit
divided by the average month end capital
employed in the period) rose from 9.2% to
11.3%, reflecting both the increased profit
and lower average capital employed. The
measure for the second half of the year 
was 10.1% (2002: 7.7%).
Most of the Group’s turnover and operating
profit continues to originate from operations
based in the United Kingdom. Nevertheless,
the proportion of turnover originating from
the Group’s overseas businesses increased
from 38% in 2001/02 to 41% in 2002/03.
The proportion of the Group’s operating
profit before exceptional items and
amortisation of intangibles earned by
overseas businesses, however, decreased 
from 39% to 32%, mainly due to substantial
improvements in the results of a number 
of the UK businesses. In constant currency
terms, the turnover of overseas subsidiaries
grew by 9.5% and, after adjusting for the
impact of acquisitions and disposals, by
6.1%. Sales in the UK fell by 3.1% and, after
excluding acquisitions and disposals, by 4.6%.
18 DS Smith Plc Annual Report 2003
Financial Review
Gavin Morris
Table 1
Full year Second half
2002/03 2001/02 2002/03 2001/02
£m £m £m £m
Turnover 1,479.0 1,440.2 737.9 728.3
Operating profit* 88.0 72.0 39.4 30.1
Return on sales* 5.9% 5.0% 5.3% 4.1%
Return on capital employed* 11.3% 9.2% 10.1% 7.7%
*Before exceptional items and amortisation of intangibles.
Table 2
2002/03 2001/02
Average Year end Average Year end
Euro 1.54 1.43 1.62 1.62
United States Dollar 1.56 1.60 1.43 1.46
Polish Zloty 6.25 6.08 5.88 5.82
The Group’ s return on capital
employed rose from 9.2% 
to1 1 .3%, reflecting both the 
increased profit and lower
average capital employed The major exchange rates used to translate the
Group’s results are shown in table 2 opposite.
The trading results are described more fully in
the Chairman's Statement, Chief Executive's
Review and the Operating Review .
Group profit and loss account
The Group’s 2002/03 results include
£2.6 million as the Group’s share of
associated undertakings’ operating profit.
This relates to OJSC Rubezhansk, a paper
and packaging company in the Ukraine, in
which the Group has a 39% equity interest.
Three small peripheral businesses were 
sold in the year for a total consideration 
of £4.5 million. The businesses concerned 
were: Western Board, a manufacturer and
converter of fibreboard; Spicer Hallfield,
a manufacturer of photographic stationery;
Sorepa, a waste collection business in France
in which the Group held a 60% share. These
sales resulted in an exceptional charge of
£8.5 million, principally due to the write 
back through the profit and loss account of
£7.4 million of goodwill originally written 
off to reserves when Western Board was
acquired in 1985.
The net interest expense for the year decreased
from £11.6 million to £10.9 million. A verage
borrowings were slightly up on last year, but
this was more than offset by lower sterling
and euro interest rates. The 2002/03 interest
charge was also impacted by a £1.6 million
net monetary gain (£0.8 million loss) arising
as a result of hyperinflationary accounting
for the Group’s Turkish business. However,
this benefit to the net interest expense was
broadly offset by a higher interest cost
relating to borrowings in Turkey . Group
interest cover remains strong at 8.3 times.
Profit before tax, exceptional items and
amortisation of intangibles rose 27% to
£79.7 million (2002: £62.6 million).
The Group's effective tax rate on profits,
excluding exceptional items and the
amortisation of intangibles, was 27%,
the same as last year. This continues to 
be below the UK, French and most other
overseas corporate tax rates, due to the use 
of tax losses, non-taxable capital gains 
and the benefit arising from the funding
structure of the French subsidiaries.
Earnings per share before exceptional items
and amortisation of intangibles increased 
to 18.0p from 14.0p in 2001/02. On an 
FRS 3 basis, earnings per share were 14.7p.
The proposed final dividend is 6.0p per
ordinary share, resulting in a total dividend
of 8.8p, the same as last year. Dividend cover
before exceptional items and the amortisation
of intangibles increased from 1.6 times 
to 2.0 times.
Cash flow
Free cash flow, which is defined as the net
cash flow before dividends, acquisitions and
disposals, is summarised below:
2002/03 2001/02
£m £m
Operating profit 88.0 72.0
Depreciation 62.2 63.6
Working capital (1.0) 40.6
UK pension scheme
contributions (5.0) –
Other (2.2) 1.8
Cash flow from
operations 142.0 178.0
Capital expenditure payments (63.4) (75.3)
Sale of fixed assets 4.2 7.7
Taxation (15.1) (26.9)
Interest (7.5) (10.0)
Free cash flow 60.2 73.5
Cash flow from operating activities was
£142.0 million, £36.0 million below last year,
primarily as a result of the significant reduction
in working capital last year not being repeatable;
the improved level of working capital was,
however, broadly maintained.
During the second half of the year , the Group
made a £5.0 million contribution to its main
UK defined benefit pension scheme, the first
such contribution for 16 years. The Group’s
SSAP 24 profit and loss pension charge for
the scheme, however, remains at nil as the
annual cost of providing benefits is offset 
19 DS Smith Plc Annual Report 2003
(%)
Return on Sales*
1999
4.3
2000
5.6
2001
6.1
2002
5.0
2003
5.9
1999
6.9
2000
9.8
2001
11.4
2002
9.2
2003
11.3
(%)
Return on Capital Employed*
 *Before exceptional items and amortisation of intangibles. *Before exceptional items and amortisation of intangibles. by the amortisation of the surplus recorded
at the 2001 triennial valuation. This will 
be reviewed when the results of the next
formal valuation are known, which will be 
in 2004/05. Company contributions in the
meantime are accounted for as prepayments
on the balance sheet.
Capital expenditure on tangible fixed assets
amounted to £57.4 million. However , the
impact on cash flow was £63.4 million as a
result of a decrease in capital expenditure
creditors from last year’s unusually high 
level following the construction of a new
corrugated plant in Italy .
Tax payments in the year were £15.1 million,
lower than the tax charge for the year as a
result of timing differences.
The net cash inflow for the year was
£15.6 million, as is shown below:
2002/03 2001/02
£m £m
Free cash flow 60.2 73.5
Dividends (28.2) (28.2)
Acquisitions/disposals (16.1) (44.6)
Investments (0.3) (2.3)
Net cash flow 15.6 (1.6)
The net cash outflow on acquisitions and
disposals in the year included £16.4 million 
on Zewathener GmbH, one of Europe’s
leading manufacturers of bag-in-box packaging
located in Germany . As mentioned above,
three small, peripheral businesses were sold
for total proceeds of about £4.5 million.
Financial position
Shareholders’ funds totalled £472.9 million 
at the end of the year, up from £438.9 million
at the end of 2001/02. The retained profit for
the year was £18.9 million, while changes in
exchange rates had the effect of increasing
shareholders’ funds by £7.3 million. Net
assets per share were 147p (137p) or 198p
(189p) if goodwill written off to reserves is
added back.
The Group’s closing net borrowings were
£202.3 million, an increase of £6.4 million 
in the year, as shown below:
2002/03 2001/02
£m £m
Opening net borrowings (195.9) (193.4)
Share issues 0.3 0.6
Net borrowings acquired (2.0) (2.7)
Net cash inflow/(outflow) 15.6 (1.6)
Exchange differences (20.3) 1.2
Closing net borrowings (202.3) (195.9)
As discussed below, a substantial proportion
of the Group’s borrowings are held in euros, in
order to hedge the Group’s euro denominated
net assets. Consequently, the strengthening of
the euro during the year increased the Group’s
net borrowings as expressed in sterling by
about £20 million. Gearing decreased from
45% to 43%.
Pensions and FRS 17
The FRS 17 accounting standard on
retirement benefits requires certain
additional disclosures this year under the
transition arrangements. These are detailed
in note 6 to the accounts. In summary, as at
30 April 2003, the main UK defined benefit
pension scheme had assets (at market value)
of £426.9 million and liabilities (discounted,
as required by the standard, at the AA 
bond yield) of £560.9 million. The use of
this valuation method results in a pre-tax
deficit of £134.0 million, partially offset by 
a deferred tax asset of £40.2 million, giving 
a net deficit of £93.8 million. This compares
to a net deficit a year ago, calculated on a
similar basis, of £7.3 million. The primary
reasons for the increased net deficit is the
poor performance of the stock market in
2002/03 and lower bond yields at the year
end. At the year end, 69% of the funds 
were invested in equities and 31% in 
bonds and cash.
Treasury management
The Group treasury strategy is controlled
through a Treasury Committee, which 
meets regularly and includes the Chairman,
the Group Chief Executive and the 
Group Finance Director. The Group
Treasury function operates in accordance
with documented polices and procedures
approved by the Board and controlled by 
the Group Treasurer. The function arranges
funding for the Group, provides a service to 
20 DS Smith Plc Annual Report 2003
Financial Review
(£ millions)
Cash Inflow from Operating Activities
1999
83.2
2000
94.7
2001
98.6
2002
178.0
2003
142.0
1999
36.9
2000
38.3
2001
43.3
2002
44.6
2003
42.8
(%)
Gearing operations and implements strategies for
interest rate and foreign exchange exposure
management.
At the end of 2001/02, the Group’s main
banking facilities comprised £325 million 
of bilateral revolving credit facilities 
expiring in December 2003. These have 
been refinanced during the year with the 
issue of a £92.5 million 10-year private
placement in November 2002 and the
agreement of £290 million of new bilateral
revolving credit facilities, largely for five years.
Given the tightening of the banking markets
since the original facilities were put in place in
1996, and the addition of a private placement,
the average margin on the Group’s facilities
above market rates has increased, the full 
year impact of which is to increase interest
costs by about £2.5 million; approximately
£1 million of this is reflected in the 2002/03
interest charge.
At the end of the year the Group’s committed
facilities were £567 million, including
£135 million of old bilateral facilities which
will expire in December 2003. Uncommitted
facilities including overdrafts totalled
£118 million. The total gross borrowings
drawn under these facilities at the year end
were £256.7 million.
The major treasury risks to which the Group
is exposed relate to movements in interest
rates and currencies. The overall objective 
of the Treasury function is to control these
exposures while striking an appropriate
balance between minimising risks and costs.
Financial instruments and derivatives may 
be used in implementing hedging strategies,
but no speculative use of derivatives or 
other instruments is permitted.
The Treasury Committee regularly reviews
the Group’s exposure to interest rates and
considers whether to borrow on fixed or
floating terms. For the last few years the
Group has generally chosen to borrow on
floating rates, which the Committee believes
have provided better value. At the end of the
financial year, all borrowings were at floating
rates. Since the year end, however, the Group
has taken advantage of the historically low
level of medium to long term sterling interest
rates and fixed the interest rate on £40 million
of sterling denominated borrowings for a
period of five years at an average rate (before
margin) of just under 4%.
Group policy is to hedge the net assets of
major overseas subsidiaries by means of
borrowings in the same currency to a level
determined by the Treasury Committee.
The borrowings in currency give rise to
exchange differences on translation into sterling,
which are taken to reserves. The Group's net
borrowings are denominated mainly in euros,
which are held to hedge the underlying assets
of our eurozone operations. At the year end,
these borrowings represented 72% of our
eurozone net assets.
Gavin M. Morris
Group Finance Director
25 June 2003
21 DS Smith Plc Annual Report 2003
(Pence)
Earnings per Share*
1999
9.3
2000
13.4
2001
15.1
2002
14.0
2003
18.0
1999
8.2
2000
8.5
2001
8.8
2002
8.8
2003
8.8
(Pence)
Dividends per Share
 *Before exceptional items and amortisation of intangibles. The Group recognises that if it is to prosper
and provide good returns to its shareholders
over the longer term, it must operate to 
high standards and act responsibly in all its
business dealings with customers, employees,
investors, suppliers and the communities in
which it operates.
The Group has defined and communicated
throughout the organisation its Key Corporate
Values which require all employees always 
to act ethically and with integrity, treat their
colleagues fairly, equitably and with respect,
work safely and protect the environment.
These are supported by more detailed 
policy documents on health and safety, the
environment, workplace malpractice and
other topics. The Group Chief Executive is
the Director responsible for corporate social
responsibility matters and reports to the
Board on these.
Safety and the environment have been
identified as the highest priority areas of
corporate social responsibility on which 
the Group is focused.
Health and safety
Operating safely and taking every reasonable
precaution to provide a safe, healthy and 
clean working environment for all employees
and members of the public is paramount 
to the Group’s successful performance.
Annual targets are set to reduce the number 
of accidents and the severity rate. Progress is
monitored through monthly reporting by 
the divisions on eight criteria and against
divisional targets. The Group’s companies
worldwide have adopted the UK Reporting of
Injuries, Diseases and Dangerous Occurrences
Regulations (RIDDOR) definitions of major
injuries. This information is reported to the
Board twice yearly and, as an indication of
its importance, safety is a fixed agenda item 
at all divisional review meetings. The Group
recognises that it has considerable scope to
reduce accidents and progress was made in
2002/03 with a 4% reduction in the frequency
rate for all accidents.
In order to maintain the drive for greater
safety, investigation results, lessons learnt
from accidents and information on health
and safety initiatives are communicated
promptly throughout the Group. A number
of the divisions use independent consultants
or trade associations to act as independent
auditors of safety performance. In the UK,
divisions collaborate with the Health and
Safety Executive and trade unions to spread
best practice and raise standards. Across the
Group, risk assessment and safety training
programmes have contributed to creating a
culture of heightened safety awareness
amongst employees.
Environment
During 2002/03, the Group advanced its
environmental management and reporting,
reinforcing its commitment to minimising 
the impact of its operations on the environment.
Responsibility for environmental management
rests with each of the divisions, within the
framework of the Group Environmental
Policy . Divisional activities are co-ordinated and
reviewed through the Group Environmental
Committee that meets regularly and is chaired
by the Group Chief Executive.
Further progress was made during the year
towards our goal of having an appropriate
environmental management system (EMS) 
in place at all sites. 23 Group sites have 
been identified as having higher potential
environmental impact due to their larger size
or type of operations. 13 of these sites are
certified for the ISO 14001 EMS; DS Smith
Packaging Bristol and St Regis Hollins mill
obtained certification during 2002/03 and
St Regis Kemsley mill was certified since 
the financial year end. The ten other 
higher potential impact sites are currently
progressing towards achieving ISO 14001
certification, of which six are on course to 
be certified during 2003/04. The Group’s
72 other sites will all implement a simplified
EMS appropriate to their lower level of
potential environmental impact. The Group
has been working with external consultants
to establish and implement a suitable
22 DS Smith Plc Annual Report 2003
Corporate Social 
Responsibility Review
Leaders in recycling 
Corrugated is a cost-effective and 
fully recyclable packaging material
1 St Regis is the UK’ s largest producer of
recycled paper, processing one million
tonnes of recovered paper per year.
2 In the recycling process, the fibres in the
recovered paper are prepared for making
new paper by separating out other
materials such as plastic and polystyrene.
A centrifugal cleaner removes sand, glass
and metal contaminants.
1 2 Material Collected by Severnside Recycling (‘000 tonnes)
1999
375
1999
664
2000
396
2000
696
2002
458
2002
736
2003
51 1
2003
773
2001
424
2001
717
Corrugated packaging Total paper and plastic 
simplified system for the lower impact sites.
19 of these sites have a simplified EMS in
place and 13 are in the process of establishing
one. The remainder will implement a simplified
EMS over a reasonable timescale.
While the paper mills and some other major
sites have monitored key environmental
performance data for some years and set
targets for improvement, data for all the
Group’s sites has not previously been
collated. The Group’s businesses are now all
required to report on energy usage, carbon
dioxide (CO2) emissions, water usage, waste
disposed of to landfill and waste recycled.
This information is being monitored at
divisional and Group level and improvement
targets are increasingly being set across the
Group. This will enable the Group to report
more fully on its environmental performance
and progress in future years.
The Group had no major environmental
incidents during the year. There were a
number of minor incidents, following which
short and long term corrective action was
taken and the appropriate agencies were
informed, where necessary .
The Group’s businesses are increasingly
engaging with their supply chain on
environmental matters. St Regis, Spicers 
and John Dickinson have systems in place 
to monitor their suppliers’ environmental
policies, environmental management systems
and procedures. An increasing number of
customers are requesting information on 
our businesses’ environmental policies and
compliance.
Packaging and the environment
The Group’s packaging operations work 
with their customers to ensure that optimum
types, specifications and quantities of
packaging are used in compliance with the
Essential Requirements element of the EU
packaging waste regulations. The Group
recommends the Incpen (Industry Council
for Packaging and the Environment)
‘Responsible Packaging Code of Practice’
which sets out guidelines for optimising
packaging specifications. Efficient packaging
reduces damage to products and contributes
to minimising waste and the total cost 
of goods.
DS Smith plays an important environmental
role through the recycling process of its
Corrugated and Paper operations. Severnside
Recycling is the UK’s largest collector and
merchant of recovered paper and St Regis is
the UK’s largest recycler of packaging waste
and the largest producer of recycled paper.
Kaysersberg is also a significant recycler of
recovered paper in France. Corrugated board
is produced predominantly from recycled
paper and is a cost-effective and fully
recyclable packaging material.
Severnside Recycling has recently commenced
an innovative pilot project collaborating with
a leading supermarket chain to raise the level
of recycling of packaging both by staff at the
back of stores and by consumers.
Investment by the Group in its paper
collection and recycling operations makes 
a key contribution to the UK meeting the
requirements of the Producer Responsibility
Obligations (Packaging Waste) Regulations
1997, under which certain businesses are
required to recover and recycle packaging
materials to achieve a minimum annual
national recovery target. The UK’s target for
2003 is to recover 59% of packaging material
and this target will increase over time.
The Group’s Plastic Packaging products 
are largely based on polyolefins, principally
high and low density polyethylene and
polypropylene. Much of the plastic packaging
can be re-used, in some cases many times.
The bottle crate business recycles old crates
by reprocessing the plastic to produce 
new crates.
23 DS Smith Plc Annual Report 2003
Increased waste
recovery
Severnside Recycling has invested in
its collection infrastructure to help
meet government targets and reduce
waste sent to landfill. Total paper and
plastic collected has increased by 16%
over the last four years; collection of
corrugated packaging has increased
by 36%. Environmental management
Paper
Paper manufacturing has the largest
environmental impact of all the Group’s
operations. It accounts for approximately
85% of the Group’s total CO2 emissions 
and approximately 90% of water usage.
Performance measures are well established 
in the nine paper mills and six of them have
ISO 14001 certification. The UK mills are
regulated through Pollution Prevention 
and Control (PPC) permits under which 
they each have specific improvement
programmes and targets.
St Regis is a key participant in the UK 
paper sector Climate Change Levy Agreement
(CCLA) with the Department of Environment,
Food and Rural Affairs under which the
industry has undertaken to achieve energy
consumption reduction targets. St Regis
comfortably met its first CCLA target for 
the year ended September 2002 and is on
course to meet the next target for the year to
September 2004. St Regis’ overall compliance
with its PPC emission targets improved from
99.0% in 2001 to 99.7% in 2002 and its CO2
emissions per tonne of paper produced
decreased by 3%.
Water usage and emissions per tonne of
paper produced by St Regis increased by 2%
during the year due to technical difficulties
with a water recycling system at Sudbrook
mill which have now been resolved. A new
effluent plant installed at Hollins mill has
significantly improved the quality of its
effluent; ways to re-use the water are being
investigated to reduce the volume of fresh
water consumed and effluent discharged.
St Regis increased its recycling of reject
material, such as plastic and polystyrene 
that is produced during the paper production
process, by 27% while reducing waste disposed
of to landfill by 4%. This was achieved
through improved operational disciplines 
and the commissioning of Kemsley mill’s
waste-to-energy plant which burns reject
material. This plant not only reduces the
quantity of material going to landfill but 
also lowers costs by being a net generator 
of energy .
All the UK paper mills have invested to
improve their oil and chemical storage
facilities. Sudbrook mill has recently
commissioned a new fibre recovery plant 
to reduce the amount of suspended solid
material in its effluent and it is continuing
with investigations into means of reducing
the impact of its effluent discharge.
Kaysersberg paper mill commissioned its
combined heat and power plant which has
substantially reduced its emissions to the air.
The mill was awarded an Eco-trophy by the
local V osges Mountains Nature Park for its
environmental actions.
Corrugated and Plastic Packaging
A large number of environmental initiatives
contributed to reductions in energy
consumption, water usage and waste levels 
at many sites. The installation of automatic
controllers on lighting, machines and boilers,
power factor correction equipment and
insulation of heating systems has reduced
energy consumption. The use of inks, varnishes
and solvents with lower environmental impact
has been increased. Waste water recycling
loop systems are reducing effluent discharge.
The Tri-Wall Monmouth plant received the
National Champions Award in the 2002
Paper and Packaging category in the Green
Apple Awards for Environmental Best
Practice Scheme, whose participants include
many large and prestigious companies. It won
the award for a range of projects principally
covering energy reduction and recycling.
Office Products 
In addition to initiatives to reduce energy
usage at its distribution centres, Spicers
continues to focus on ways to reduce the
environmental impact of its vehicle fleet.
Its own primary fleet is fitted with low
emission Euro II engines and the latest two
vehicles use Euro III engines that reduce
emissions even further. Spicers continued 
to increase the significant tonnage of paper,
board and stretchwrap that it recycles.
John Dickinson uses recycled materials
wherever appropriate and minimises the
usage of energy and natural resources in 
its manufacturing processes. It is a founder
member of the WWF 95+ group which is
committed to promoting legal and
24 DS Smith Plc Annual Report 2003
Corporate Social Responsibility Review
Continued
sustainable development in connection with
timber procurement. Various recycling and
waste segregation projects have reduced the
quantity of waste going to landfill.
In addition to the Group’s primary focus on
safety and the environment, the Group places
considerable importance on its dealings with
its employees and local communities.
Employees
The Group is making substantial effort to
create an environment in which its people,
while meeting the Group’s aims, feel that they
are well managed, treated with respect and are
able to fulfil their own potential. Training and
development is organised at the divisional and
local level, as appropriate to each business,
with a strong emphasis on performance
management and improvement. St Regis has
developed a major management development
programme, accredited by the University of
Derby, that has been successfully completed
to date by over 70 supervisory, operational
and general business managers. DS Smith
Packaging is now also participating in this
development activity and additionally runs 
a strategic leadership programme for senior
managers in association with Ashridge
business school. The Group is committed to
applying equal opportunities in all recruitment
and employment practices. It is also committed,
as a minimum, to meeting the labour rights
and legislative requirements in each of the
countries in which it operates.
Community involvement
Community involvement principally 
takes place at the business level with many
initiatives that seek to foster good relations
with local communities. One way in 
which the Group meets its community
responsibilities is through supporting
charitable fund raising activities through 
cash contributions and in the form of
product and services or staff time. The
majority of the modest amount of money
donated by the Group is given by individual
businesses, principally to causes in the
communities in which they operate.
Donations by the Group headquarters are
focused on a small number of causes that
help educate and train young people to
become involved in business and working 
life. The Group is a member of Business in
the Community and donates regularly 
to The Prince’s Trust. 1 Antony Hichens
•••
Chairman
Appointed to the Board on 29 June 1999 
as a non-Executive Director and became
Chairman of the Board on 8 September 
1999 and is Chairman of the Nomination
Committee. He is a Member of the Takeover
Panel, Deputy Chairman of Candover
Investments PLC, a Director of WaterRower
(UK) Limited and is also a non-Executive
Director of The JP Morgan Fleming Income
and Capital Investment Trust plc. Previously,
he held the positions of a Managing Director
and Chief Financial Officer of Consolidated
Gold Fields, Chairman of Caradon plc and
Chairman of Lasmo plc. Age 66.
2 Tony Thorne
••
Group Chief Executive
Appointed to the Board on 1 January 2001 
as Chief Operating Officer and became
Group Chief Executive on 5 December 2001.
He was previously President of SCA
Packaging’s Corrugated Business Division.
He has also held senior management
positions in Shell. Age 52.
3 Gavin Morris
•
Group Finance Director
Appointed to the Board on 5 November 2002
as Group Finance Director. He was previously
Chief Financial Officer of Citex Group and
prior to that held Chief Financial Officer
positions at Philips Lighting Holding BV ,
Ionica Group plc, Alfred McAlpine Plc and
Norcros Plc. Age 49.
4 Bob Beeston
••••
Appointed to the Board on 5 December 2000
as a non-Executive Director and is Chairman
of the Remuneration Committee. He is
Chairman of Cookson Group plc and was
previously Chief Executive of FKI plc. Age 61.
5 Peter Johnson
•••
Appointed to the Board on 8 December 1999
as a non-Executive Director and is Chairman
of the Audit Committee. He is Chief Executive
of George Wimpey Plc and a Member of the
Council for Industry and Higher Education
and was previously Chief Executive of The
Rugby Group PLC. Age 55.
6 Richard Marton
•••
Appointed to the Board on 13 March 2000 as
a non-Executive Director. He was previously
Chief Executive and then non-Executive
Director of Britax International plc. Age 62.
7 Daniel Piette
••
Appointed to the Board on 1 October 1993
as a non-Executive Director and is the Senior
Independent Director. He is Group Executive
Vice-President and a member of the Executive
Committee of L VMH Corporation, Chairman
and Chief Executive Officer of L V Capital
and President of L Capital. Age 57.
8 Carolyn Cattermole
Company Secretary
Appointed Company Secretary on
20 November 2000. She was previously
Company Secretary of Courtaulds Textiles
plc and prior to that was a senior legal
adviser with Courtaulds plc having qualified
as a solicitor with Norton Rose. Age 42.
• Non-Executive Director
• Member of General Purposes Committee
• Member of Nomination Committee
• Member of Remuneration Committee
• Member of Audit Committee
25 DS Smith Plc Annual Report 2003
Directors and
Company Secretary
1 2 3 4
6
56 7 8 The Company is committed to the principle and
application of sound corporate governance.
The Combined Code (‘the Code’) 
detailing the Principles of Good Corporate
Governance and Code of Best Practice was
published in June 1998. Except as stated on
page 30 in respect of notice periods under
past Executive Directors’ service contracts
(Combined Code B1.7), the Company has
complied throughout the financial year with
all the provisions of Section 1 of the Code.
Board and Board Committees
The role of the Board
The Board is collectively responsible for
promoting the success of the Company by
directing and supervising the Company’s
affairs. The Board’s role is to provide
leadership of the Company within a
framework of prudent and effective controls
which enable risk to be assessed and managed.
The Board sets the Company’s strategic 
aims and ensures that the necessary financial
and human resources are in place for the
Company to meet its objectives and reviews
management performance.
In addition, the Board sets the Company’s
values and standards and ensures that its
obligations to its shareholders and others 
are understood and met.
The Board currently comprises two Executive
and five non-Executive Directors. The offices
of Chairman and Group Chief Executive are
held separately .
The Board meets eight times per year.
All Board members attend all Board 
and relevant Committee meetings unless
exceptional circumstances prevent them 
from attending.
The Board has resolved that Mr D R Piette
will cease to be the Senior Independent
Director with effect from the close of the
Annual General Meeting on 3 September
2003 (due to his length of service from
October 1993) and that Mr R G Beeston 
will then become Senior Independent
Director in his place.
The Board has delegated certain powers,
mainly of a routine nature, to the General
Purposes Committee, which comprises the
Executive Directors under the chairmanship
of the Group Chief Executive. The other
principal committees of the Board are 
the Audit, Remuneration and Nomination
Committees. All of these comprise
independent non-Executive Directors 
as required by the Code and all Board
committees have written terms of reference
agreed by the Board. The Audit Committee 
is chaired by Mr P M Johnson, the
Remuneration Committee is chaired by 
Mr R G Beeston and the Nomination
Committee is chaired by Mr A P Hichens.
The Board has used the criteria proposed by
the National Association of Pension Funds
for determining whether a non-Executive
Director is independent.
The responsibilities of the Audit Committee,
which meets at least three times a year, cover
all the points recommended by the Code.
The Committee monitors the Group’s
accounting and financial procedures and
receives regular reports on the review of
internal controls. The Committee is also
responsible for the review of the annual
accounts and interim statement and 
meeting with the external Auditor.
The Nomination Committee considers 
the appointment of directors and makes
recommendations to the Board as a whole.
New directors are elected to the Board at 
the next Annual General Meeting following
their appointment to the Board.
The Remuneration Committee is responsible
for determining the remuneration of the
Executive Directors, the Chairman of the
Company, the Company Secretary and senior
management. The Report on Remuneration
is set out on pages 28 to 34.
The Board and its Committees receive timely
information of a quality that enables them to
carry out their roles effectively . All Directors
have access to the advice and services of
the Company Secretary . A procedure is in
place for any Director to take independent
professional advice in the furtherance of
his duties at the Company’s expense. The
Directors are provided with opportunities 
for training to ensure that they are kept up 
to date on relevant new legislation and
changing commercial risks.
Relations with shareholders
The Company has a programme of regular
meetings, site visits and results briefings 
with its major institutional shareholders,
which provides an opportunity to discuss 
the progress of the business. The Annual
General Meeting is used as an opportunity 
to communicate with private shareholders,
including a short presentation on the
business and current trading position as 
well as an opportunity for questions from
investors to the Chairman of the Board and
the chairmen of the Audit and Remuneration
Committees. Regular communication with
shareholders also takes place through the
annual and interim reports and via the
Company’s website www .dssmith.uk.com.
26 DS Smith Plc Annual Report 2003
Corporate Governance Internal control
The Board has overall responsibility for the
Group’s system of internal control and for
reviewing its effectiveness. Such a system,
however, can only be designed to manage
rather than eliminate risk and can therefore
provide only reasonable and not absolute
assurance against material misstatement 
or loss. In September 1999 the Turnbull
Committee published guidance on the 
wider aspects of internal control. In
accordance with this guidance the Company
has established the procedures necessary 
to ensure that there is an ongoing process 
for identifying, evaluating and managing 
the significant risks to the Group. These
procedures have been in place for the whole
of the financial year ended 30 April 2003 
and up to the date of the approval of these
financial statements. The Board determines
the objectives and broad policies of the
Group. It meets regularly and there is a
schedule of matters which are required to 
be brought to it for decision. The Board has
delegated to management the responsibility
for establishing a system of internal control
appropriate to the business environments in
which the Group operates. Key elements of
this system include:
– a set of Key Corporate Values which have
been communicated to all concerned;
– a clearly defined divisionalised organisation
structure for monitoring the conduct and
operations of individual business units;
– clear delegation of authority throughout
the Group, starting with the matters
reserved for the Board;
– a formal process for ensuring that key risks
affecting all the Group’s operations are
identified and assessed on a regular basis,
together with the controls in place to
mitigate these risks. Risk consideration is
embedded in decision making processes.
The most significant risks are periodically
reported to the Board and considered by it:
– the preparation and review of comprehensive
annual divisional and Group budgets and
an annual review and approval by the
Board of the corporate strategy;
– the monthly reporting of actual results 
and their review against budget, forecasts
and the previous year, with explanations
obtained for all significant variances;
– clearly defined policies for capital
expenditure and investment, including
appropriate authorisation levels, with
larger capital projects, acquisitions and
disposals requiring Board approval;
– procedure manuals laying down common
control procedures and policies to apply
throughout the Group;
– formal quarterly meetings between central
and divisional management to discuss
strategic, operational and financial issues.
The Group’s operational audit function
undertakes regular reviews of the Group’s
operations and their systems of internal
control. The work of the function is
overseen by the Audit Committee, which
regularly reviews its plans and activities.
The Directors can confirm that they have
reviewed the effectiveness of the Group’s
system of internal control. This exercise
included a process of self-certification by
senior divisional management in which
they confirmed that their divisions 
have complied with Group policies and
procedures and reported any significant
control weaknesses identified during 
the past year. It also involved reviewing 
the results of the work of the Group’s
operational audit function and the risk
identification and management processes
identified above.
Going concern
The Directors, having made appropriate
enquiries, have a reasonable expectation 
that the Group has adequate resources to
continue in operational existence for the
foreseeable future. For this reason, they
continue to adopt the going concern basis 
in preparing the accounts on pages 38 to 63.
27 DS Smith Plc Annual Report 2003 In accordance with the Directors’
Remuneration Report Regulations 2002,
shareholders’ approval of the Remuneration
Report will be sought at the forthcoming
Annual General Meeting. The Remuneration
Report has been approved by the Board of
Directors.
(a) Composition and role of the
Remuneration Committee (‘the
Committee’)
The Committee consists entirely of
independent non-Executive Directors.
The members of the Committee are 
Mr R G Beeston (Chairman),
Mr P M Johnson, Mr R E C Marton 
and Mr D R Piette. The members of the
Committee have no personal financial
interest, other than as shareholders of the
Company, in the matters to be decided by 
the Committee, no potential conflicts of
interest arising from cross-directorships 
and no day-to-day involvement in running
the business.
The Committee operates under written 
terms of reference agreed by the Board and is
responsible for determining the remuneration
of Executive Directors. It also considers the
remuneration of senior executives reporting
to Executive Directors, as recommended by
the Group Chief Executive.
(b) Compliance
The Board, in conjunction with the
Committee, has taken the necessary steps 
to ensure that the Company complies 
with the provisions of the Combined Code
(‘the Code’), which relate to Directors’
remuneration. Certain disclosures in this
Report fall within the scope of matters 
for review by the Auditor.
(c) Advisers to the Committee
New Bridge Street Consultants were
appointed by the Committee during the
course of the year to provide advice on 
the remuneration of Executive Directors 
and other managers. New Bridge Street
Consultants also provide advice to the
Company in connection with the operation
of the Company’s employee share schemes.
The Committee consults with the Chairman
of the Company and with the Group Chief
Executive, who may attend a meeting of the
Committee on matters which do not directly
affect them, although they are not involved 
in deciding their own remuneration.
The Committee is assisted by the Company
Secretary and the Human Resources
Director, and receives advice from Mercer
Human Resource Consulting, the Actuary 
to the Company’s pension scheme, in relation
to Executive Directors’ pensions.
(d) General policy on remuneration
The Committee’s overall policy is to ensure
that the remuneration packages enable the
Company to attract, retain and motivate
Executive Directors and other senior
managers of sufficient calibre to meet 
the Company’s needs. In addition, the
remuneration packages are designed to 
align the interests of executives and
shareholders and to link a significant
proportion of executives’ remuneration 
to performance. T o achieve this, the
Company’s normal approach is to set basic
salaries at around median levels relative to
analogous businesses, whilst operating cash
and share incentive schemes which are linked
to the achievement of short term and long
term performance targets. The remuneration
package is described more fully in the
remainder of this report, but the main
elements are as follows:
– basic salary
– pension provision
– annual bonus scheme, incorporating 
a deferred share award
– Executive Share Option Scheme
Basic salaries and pension provision are not
linked to performance (except when basic
salaries are reviewed), whilst payments under
the annual bonus scheme and the Executive
Share Option Scheme are wholly dependent
upon performance against agreed targets.
(e) Basic salaries
The basic salaries of Executive Directors are
reviewed annually on 1 August, in conjunction
with other aspects of remuneration. The
basic salary for each Executive Director is
targeted at the rates of salary for similar jobs
within a selected group of analogous UK
businesses with substantial overseas operations,
and relative to UK companies generally 
with similar market capitalisations. As noted
above, the Company’s normal policy is to set
basic salaries at around median levels.
When determining the level of salary,
the Committee also takes into account the
relative performance of the Group and 
of the individual Director, together with 
his experience in the particular job.
The Committee also considers relevant
information on the remuneration of other
senior executives and the pay of employees
elsewhere in the Group and, where
appropriate, communicates its views on the
levels of such remuneration to the Group
Chief Executive. During its deliberations,
the Committee has regard to salary levels 
in other countries where this is relevant 
for any non-UK senior executive.
The table of emoluments of the Directors 
is given on page 31.
(f) Annual bonus
The Executive Directors participate in an
annual bonus scheme which has been
approved by the Committee. In the scheme
applicable to the Executive Directors for the
financial year 2002/03, the maximum value 
of the cash bonus is set at 30% of basic 
salary at 31 July 2003. In addition, Executive
Directors may receive an award of shares 
in the Company, equal in value to the
participant’s annual cash bonus, pursuant 
to a Restricted Share Plan. Since the award 
of these shares is dependent upon
performance in the relevant financial year,
no further long term performance conditions
apply . In normal circumstances, the shares
are transferred to participants on the third
anniversary of the award, but lapse on
termination of employment.
28 DS Smith Plc Annual Report 2003
Report on Remuneration 29 DS Smith Plc Annual Report 2003
The amount of annual bonus payable to
Executive Directors is dependent entirely
upon the Company’s earnings per share
performance relative to targets determined 
by the Committee at the start of the year.
The outcome of the results for the financial
year 2002/03 mean that an annual bonus of
60% of salary is payable in respect of the
financial year ended 30 April 2003 (2002: nil),
of which half is paid in cash and half is 
paid in shares pursuant to the Restricted
Share Plan.
The annual bonus scheme is not contractual
and bonuses under the scheme are not
eligible for inclusion in the calculation of the
participating Executive Directors’ pension
scheme benefits.
For the financial year 2003/04, the annual
bonus scheme will operate on the same basis
as in 2002/03, except that the maximum cash
bonus will be set at 40% of basic salary, and
Executive Directors may receive an equal
award of shares under the Restricted Share
Plan. The increase in the maximum cash
bonus reflects the fact that more demanding
performance targets must be met before the
increased bonuses are payable.
As far as practicable the scheme has been
extended to divisional executives. However,
their bonus schemes are based on differing
criteria consistent with the operating
performance targets of the division in 
which they are employed.
(g) Share option schemes
An Executive Share Option Scheme is
operated for Executive Directors and other
senior executives. The Committee grants
approved and unapproved options to UK
and overseas executives on a phased basis
and individuals will not normally receive 
a grant over shares worth more than one
times their salary in any year.
The exercise of any options granted under
this Scheme is subject to the achievement 
of long term performance conditions.
The target for options granted since 1999 
is that the growth in the Company’s
normalised earnings per share must match 
or exceed the growth in the UK Retail 
Prices Index plus an average of 3% per
annum over a period of at least three years.
If the condition is not satisfied after the
initial three year period, it may still be
satisfied in subsequent years. However, if
it is not satisfied within six years of the grant
of an option, the option lapses. In the case 
of each option grant, the base financial year
for the purposes of measuring earnings 
per share growth will be the financial year
prior to the grant dates. Normally, no part 
of the option may be exercised unless the
performance target has been achieved.
It is intended that the Executive Share
Option Scheme will be operated on the 
same basis in the financial year 2003/04.
The Committee considers that earnings 
per share growth relative to inflation is the
most appropriate performance condition for
this scheme because it is a transparent and
objective measure of the Company’s financial
performance. The earnings per share figures
are derived from the audited accounts and
the calculation of the growth in earnings 
per share is verified by New Bridge Street
Consultants, in their capacity as advisers to
the Committee.
The Executive Directors are also eligible 
to participate in the DS Smith International
Sharesave Scheme, which is an all-employee
share scheme approved by the Inland
Revenue. Participants may save a fixed
monthly sum for three or five years and 
may use the sum generated by their savings
contracts to exercise options which are
granted at a 20% discount to the market
price. Depending upon the option period
chosen, exercise can normally take place 
after three, five or seven years. This scheme
does not contain performance conditions,
since the Inland Revenue requires that
options must be offered to all eligible
employees on the same terms, without
performance conditions.
The interests of the Directors in the share
capital of the Company and details of
options granted under the Executive Share
Option Scheme and the Sharesave Scheme
are shown on pages 32 and 33.
(h) Benefits in kind
The Executive Directors receive benefits 
in kind relating to company cars or a cash
allowance, free fuel, life assurance and 
private medical insurance.
(i) Pensions
The Executive Directors participate in a
funded contributory defined benefit pension
scheme with death in service cover. Subject 
to the variations mentioned below, the 
Group provides pension benefits for
Executive Directors on retirement at their
normal pension age of 60 based on an
accrual rate of one thirtieth with reference 
to basic salary less a deduction equal to 
the basic State pension. This is subject to 
a maximum pension of two-thirds of their
final pensionable pay .
As far as possible, the benefit is provided
through the Inland Revenue Approved
Group Pension Scheme, in which other
employees of the Group participate. In the
case of Mr Thorne, whose benefits are
subject to the Inland Revenue ‘earnings cap’,
the Company has given a promise to provide
the balance through a non tax-approved
unfunded arrangement. Mr Williams and
Mr Buttfield have similar promises and 
both retired during the year. Their pensions
pursuant to the unfunded arrangement 
are being paid by the Group. The total
accumulated unfunded provision at 30 April
2003 is £3.1m (2002: £3.4m), being £0.3m 
for Mr Thorne, £2.1m for Mr Williams and
£0.7m for Mr Buttfield.
In the case of newly appointed Directors, the
Company’s normal policy under the current
legislation in relation to the earnings cap is 
to provide compensation by way of a cash
supplement, rather than by way of a funded
or unfunded arrangement. Accordingly,
Mr Morris receives a cash supplement of
£40,000 per annum. This payment is not
pensionable and is not considered as 
salary for the purpose of calculating any
bonus payment. The service contract for Mr Thorne is 
dated 28 February 2001 and expires when 
he reaches his normal retirement age of 60.
It may be terminated by 12 months’ notice 
by the Company and by Mr Thorne. The
Company may terminate the contract with
immediate effect, in which case it must make
a payment equating to 12 months’ basic
salary, plus an equal payment in respect 
of the loss of his contractual benefits.
The service contract for Mr Morris is 
dated 5 November 2002 and expires when 
he reaches his normal retirement age of 60.
It may be terminated by 12 months’ notice 
by the Company, and by Mr Morris. The
Company may terminate the contract with
immediate effect, in which case it must make
a payment equal to 12 months’ basic salary,
plus an equal payment in respect of
the loss of his contractual benefits. The
service contract for Mr Buttfield (which 
was terminable by the Company giving two
years’ notice) was dated 22 December 1993
and expired on 31 January 2003 following 
his early retirement from the Company .
Mr Williams’ service contract (which was
terminable by the Company giving two 
years’ notice) was dated 28 August 1991 
and expired on 3 September 2002 following
his retirement.
(k) Policy on external appointments
Executive Directors are allowed to accept
external appointments as a non-Executive
Director of up to two other companies
provided that these are not with competing
companies and are not likely to lead to
conflicts of interest. In normal circumstances,
the Chief Executive may not accept more
than one external appointment. Executive
Directors are normally allowed to retain 
the fees paid from these appointments.
Details of individual Directors’ external
appointments are shown on page 25.
(l) Fees for non-Executive Directors
The remuneration for non-Executive
Directors consists of annual fees for their
services as members of the Board and,
where relevant, for their work on selected
committees. Non-Executive Directors, other
than the Chairman, ha ve letters of appointment
for a term of three years whereupon they are
normally renewed but for no more than three
terms in aggregate. Their respective dates of
appointment are shown on page 25.
The Chairman’s letter of appointment
provides for his appointment to continue 
until further notice, subject to review by 
the Board no later than 30 September 
2005. His appointment may be terminated
immediately by the Company if he is 
not re-elected at any general meeting of
shareholders (or on giving nine months’
notice if this occurs in connection with 
a change of control of the Company);
or on the Chairman giving not less than 
six months’ notice; or on the Company 
giving not less than twelve months’ notice.
The Company may make a payment 
in lieu of notice in these circumstances.
The remuneration of non-Executive
Directors is determined by the Board 
on the advice of external independent
consultants and is subject to a maximum
aggregate level agreed by shareholders.
Non-Executive Directors do not participate
in, or vote on, any discussion relating to 
their own remuneration.
Non-Executive Directors are not eligible 
for pension scheme membership and do 
not participate in any of the Group’s 
annual bonus, share option or other 
incentive arrangements.
Life cover of four times basic salary is
provided under the Approved Scheme on
death in service in addition to spouses’
pensions of two-thirds of the members’
prospective pensions plus dependants’
benefits. For those Executive Directors whose
benefits are restricted by the ‘earnings cap’,
optional additional life cover is available.
Spouses’ pensions on death after retirement
are two-thirds of the members’ pensions,
before any reduction for early retirement 
or commutation of pension for cash.
Pensions in payment are increased annually
in line with the increase in the UK Retail
Prices Index, subject to a maximum guaranteed
increase of 5% each year with the possibility
of further discretionary increases. There is 
no allowance in the transfer value calculation
basis for such discretionary increases or 
other discretionary benefits.
All members, including Executive Directors,
contribute to the Approved Scheme at the
rate of 6% of their pensionable pay, subject
to a maximum, for those affected, of 15% 
of the earnings cap.
Members ha ve the option of paying Additional
V oluntary Contributions. Neither the
contributions nor the resulting benefits 
are included in the table on page 33.
( ) Service contracts and
compensation
The Committee’s general policy is that the
notice periods for Executive Directors
appointed in future will not exceed one year,
although on appointment it may be necessary
in exceptional cases to offer a longer initial
period which reduces to one year or less 
after a specific date. In addition, service
contracts for newly appointed directors 
will not normally include liquidated damages
provisions. Instead, the payment of any sums
due on the termination of employment by 
the Company will be determined pursuant to
general contractual principles, and with full
recognition of a Director’s duty to mitigate
his loss.
Report on Remuneration
continued
30 DS Smith Plc Annual Report 2003 (m) Directors’ emoluments (auditable)
Pension Pension
Annual Deferred Pension 2003 2002 contributions contributions
Salary/fees bonus bonus Benefits supplement total total 2003 2002
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Chairman
A P Hichens 150 – – 25 – 175 170 – –
Chief Executive
A D Thorne 372 108 108 21 – 609 335 14 14
Finance Director
G M Morris 112 34 34 9 20 209 –3–
Non-Executives
R G Beeston 37 ––0– 37 31 – –
P M Johnson 39 ––0– 39 38 – –
RECMarton 33 ––0– 33 31 – –
D R Piette 38 ––0– 38 37 – –
Compensation Pension Pension
Annual Deferred for loss 2003 2002 contributions contributions
Salary/fees bonus bonus Benefits of office total total 2003 2002
Past Directors £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
J P Williams 147 – – 37 – 184 506 Nil 14
D F Buttfield 203 111 – 18 247 579 253 10 14
Total 1,131 253 142 110 1,903 1,401
In addition to the remuneration disclosed above, Mr Williams was paid consultancy fees of £7,500 after 3 September 2002. Mr Morris is
subject to the Inland Revenue ‘earnings cap’ and therefore he received during the year an additional non-pensionable payment.
The deferred bonus has been included in the table above as it was awarded in respect of the results for the financial year 2002/03. Shares in
DS Smith Plc to the value of the deferred bonus will be purchased on 1 August 2003 and held in the Restricted Share Plan. The shares are
transferred to the participants on the third anniversary of the award, but lapse on termination of employment. The total emoluments of
Mr Thorne excluding the deferred bonus were £501,000. The total emoluments of Mr Morris excluding the deferred bonus were £175,000.
31 DS Smith Plc Annual Report 2003 (n) Directors’ interests in share options (auditable)
Directors’ interests in share options over ordinary shares are as follows:
Options Options Options 
Options granted exercised lapsed Options Dates
held at during during during held at Exercise from which Expiry
Name of Director 30 April 2002 the year the year the year 30 April 2003 price (p) exercisable date
A D Thorne 400,000 – – – 400,000 150.00 2 Mar 04 1 Mar 11
201,300 – – – 201,300 149.00 27 Jul 04 26 Jul 11
– 227,550 – – 227,550 145.00 26 Jul 05 25 Jul 12
G M Morris* – 150,300 – – 150,300 153.00 18 Dec 05 17 Dec 12
D F Buttfield** 160,000 – – – 160,000 272.09 4 Aug 97 30 Jul 03
93,350 – – – 93,350 176.67 30 Jul 00 30 Jul 03
29,900 – – – 29,900 183.67 31 Jul 01 30 Jul 03
113,380 – – – 113,380 163.10 5 Oct 02 30 Jul 03
6,070 – – – 6,070 148.10 1 Jan 03 30 Jun 03
117,200 – – – 117,200 166.33 31 Jan 03 30 Jul 03
147,650 – – – 147,650 149.00 31 Jan 03 30 Jul 03
– 165,500 – – 165,500 145.00 31 Jan 03 30 Jul 03
J P Williams** 198,100 – – – 198,100 176.67 30 Jul 00 3 Mar 03
190,550 – – – 190,550 183.67 31 Jul 01 3 Mar 03
159,800 – – – 159,800 178.67 30 Jul 02 3 Mar 03
51,760 – – – 51,760 163.10 3 Sep 02 3 Mar 03
231,450 – – – 231,450 166.33 3 Sep 02 26 Jul 03
288,550 – – – 288,550 149.00 3 Sep 02 26 Jul 03
*At date of appointment.
**At date ceased to be a Director.
All of the above options were granted for nil consideration.
The market price of the ordinary shares at 30 April 2003 was 161.5p and the range during the year was 127p to 184p.
Aggregate gains made by Directors on exercise of share options in the year were £nil (2002: £nil).
All other options will be exercisable from the dates stated above, subject to them satisfying the performance target stated on page 29.
(o) Directors’ interests under the Restricted Share Plan (auditable)
The Company operates the Restricted Share Plan, which is described on page 28. Details of the Directors’ interests in the Plan are as follows:
Awards
granted/ Awards
Interests under commitments lapsed/ Market price Market price Interests under
the Plan at made crystallised Date on date at date scheme at Exercisable Expiry
Executive Directors 30 April 2002 during year in year of award of award of exercise 30 April 2003 from date
A D Thorne 7,224 ––––– 7,224 1 Aug 04 31 Jul 08
Past Directors
D F Buttfield* 34,615 – 34,615 1 Aug 00 168.5 127.0 – 31 Jan 03 30 Jul 03
15,893 – 15,893 1 Aug 01 157.5 127.0 – 31 Jan 03 30 Jul 03
J P Williams* 68,343 – 68,343 1 Aug 00 168.5 138.5 – 3 Sep 02 3 Mar 03
31,063 – 31,063 1 Aug 01 157.5 138.5 – 3 Sep 02 3 Mar 03
*At date ceased to be a Director.
The exercise price is £1 in total, the grant being given in relation to the deferred bonus for the years ended 1999/00 and 2000/01 under the
Restricted Share Plan described on page 28.
32 DS Smith Plc Annual Report 2003
Report on Remuneration
continued (p) Directors’ interests in shares 
30 April 2002 30 April 2003
Name of Director Beneficial Non-beneficial Beneficial Non-beneficial
A P Hichens 345,000 – 385,000 –
A D Thorne 22,000 – 47,000 –
G M Morris* –– ––
R G Beeston 10,000 – 25,000 –
P M Johnson 10,000 – 25,000 –
R E C Marton 25,000 – 25,000 –
D R Piette –– ––
*At date of appointment
Any ordinary shares required to fulfil entitlements under the Executive Share Option Scheme and the Restricted Share Plan may be provided
by the DS Smith General Employee Benefit Trust (‘the Trust’). As beneficiaries under the Trust, the Executive Directors are deemed to be
interested in the shares held by the Trust which, at 30 April 2003, amounted to 737,520 ordinary shares.
No changes took place in the interests of Directors between 30 April 2003 and 25 June 2003 inclusive.
(q) Directors’ pension entitlements (auditable)
The following Directors were members of defined benefit schemes provided by the Company as described on page 29 during the year, with
death in service cover. Pensions entitlements and corresponding transfer values increased as follows:
Transfer 
value of net
increase in Total change
Increase Total accrued accrual over Transfer value Transfer value in value during
Employee Gross increase in accrued pension at period (net of accrued of accrued period (net of
contributions paid in accrued pension net 30 April of Director’s pension at 30 pension at 30 Director’s
during the pension of inflation 2003 contribution) April 2003 April 2002 contribution)
period (1) (2) (3) (4) (5) (6) (7)
Name of Director £ £ ££££££
A D Thorne 14,603 13,912 13,680 27,586 162,744 357,624 152,217 190,804
G M Morris 3,541 1,890 1,890 1,890 17,816 21,357 0 17,816
J P Williams 0 3,199 452 146,470 8,331 2,699,501 2,818,217 (118,716)
D F Buttfield 10,833 9,116 7,673 67,024 109,166 1,392,939 1,139,455 242,651
Pension accruals shown are the amounts which would be paid annually on retirement based on service to the end of the year , with the exception
of Mr Williams, where the figures represent the actuarial increase in his pension due to late retirement.
Transfer values have been calculated in accordance with version 8.1 of guidance note GN11 issued by the actuarial profession.
The value of net increase (4) represents the incremental value to the Director of his service during the year, calculated on the assumption
service terminated at the year end. It is based on the accrued pension increase (2) after deducting the Director’s contribution, with the
exception of Mr Williams, as described above.
The change in transfer gap value (7) includes the effect of fluctuations in the transfer value due to factors beyond the control of the Company
and Directors, such as stock market movements. It is calculated after deducting the Director’s contribution and deducting pension benefits
payments made to those employees who retired during the year.
Mr J P Williams ceased accruing pension benefits on his 60th birthday . He deferred receipt of his benefits until 3 September 2002, when he
elected to take a cash lump sum of £355,931 in lieu of part of his entitlement. T otal pension payments of £96,218 were made in the period from
3 September 2002 to 30 April 2003. The total change of value (7) adjusted to take account of these benefit payments then would be £333,433.
His residual pension is £146,470 p.a. at 30 April 2003.
33 DS Smith Plc Annual Report 2003 Mr D F Buttfield retired on 31 January 2003 and elected to take a cash lump sum of £227,943 in lieu of part of his entitlement. T otal pension
payments of £16,569 were made in the period from 31 January 2003 to 30 April 2003. The total change in value (7) adjusted to take account of
these benefit payments would be £487,173. His residual pension is £67,024 p.a. at 30 April 2003.
Mr G M Morris joined the Company during the year and commenced accruing benefits from 23 September 2002. Mr Morris is subject to the
Inland Revenue ‘earnings cap’ and has received a non pensionable payment of £19,556 which is not included in the table above but is instead
included in the emoluments table on page 31.
(r) Total Shareholder Return performance
The following graph illustrates the Company’s T otal Shareholder Return (TSR) performance since 1 May 1998, in accordance with paragraph
4 of the Directors’ Remuneration Report Regulations 2002, relative to the FTSE Mid 250 Index.
The Company is a member of the FTSE Mid 250 Index and, accordingly, this index is considered to be the most appropriate comparator
group for this purpose.
On behalf of the Board
Bob Beeston
Chairman of the Remuneration Committee
25 June 2003 
DS Smith
FTSE Mid 250
Index
125
100
75
50
25
0
98 99 00 01 02 03
This graph looks at the value, by 30 April 2003, of £100 invested in DS Smith over the last 
5 financial years compared with that of £100 invested in the FTSE Mid 250 index. The other 
plotted points are the values at intervening financial year ends.
Source: Datastream
Total Shareholder Return
34 DS Smith Plc Annual Report 2003
Report on Remuneration
continued Ordinary 
shares held
Deutsche Bank AG 47,642,775 14.80%
Henderson Global 
Investors Ltd 32,084,140 9.98%
Standard Life 
Investments 16,784,338 5.21%
Fidelity 
International Ltd 13,043,744 4.05%
Legal & General 
Investment 
Management Ltd 10,783,004 3.34%
Acquisitions and disposals
On 15 July 2002, the Group acquired
Zewathener GmbH, one of Europe’s leading
manufacturers of bag-in-box packaging
located in Schwetzingen, Germany . The
business was acquired for a total consideration
of £17.5 million, including acquired debt,
which resulted in goodwill arising of
£13.6 million. A further £3.2 million of
consideration was paid for other small
acquisitions in the year. In line with the
Group’s ongoing strategy of streamlining its
portfolio, three small peripheral businesses
were sold in January and February 2003 
for an aggregate consideration of £4.5 million.
The businesses concerned were W estern
Board, a manufacturer and converter of
fibreboard; Spicer Hallfield, a manufacturer 
of photographic stationery; and Sorepa, a
waste collection business in France in which
the Group held a 60% share. The exceptional
loss on sale of these businesses totalled
£8.5 million, principally due to the write-back
through the profit and loss account of
£7.4 million of goodwill relating to W estern
Board which was originally written off to
reserves on acquisition in 1985.
Research and development
The Group recognises the importance 
of continuing to invest in research and
development. It is Group policy to develop
new product specifications commensurate
with environmental needs and packaging
solutions required by customers. Research is
also conducted into ways to improve product
quality and to find more cost efficient methods
of production and distribution. Research and
development is conducted within divisional
operations and expenditure is not significant.
Directors
The biographies of the present Directors 
are on page 25. All the present Directors
served throughout the year except as follows:
Mr J P Williams resigned as both Deputy
Chairman and as a Director and a member
of the Nomination and General Purposes
Committees on 3 September 2002.
Mr D F Buttfield resigned as Finance
Director on 5 November 2002 and as an
Executive Director and a member of the
General Purposes Committee on 31 January
2003. Mr G M Morris was appointed as
Finance Director on 5 November 2002.
Other than as previously disclosed in this
Report and in respect of existing service
agreements, no Director, either during 
or at the end of the financial year, has 
been materially interested in any significant
contract or arrangement in relation to the
Group’s business.
Re-election of Directors
The Articles of Association require that all
Directors who are subject to retirement by
rotation retire every three years, but they are
eligible to submit themselves for re-election 
by the shareholders. The Directors retiring 
by rotation at the Annual General Meeting 
on 3 September 2003 are Mr P M Johnson,
Mr R E C Marton and Mr D R Piette but,
being eligible, they offer themselves for
re-election at the Meeting. Mr G M Morris,
having been appointed to the Board since 
the last Annual General Meeting and in
accordance with the Articles, retires from
office at the Meeting and, being eligible,
offers himself for election. Mr Morris has 
a service contract with the Company which
can be terminated by the Company on giving
12 months’ notice.
Directors’ interests in shares
The interests of the Directors and their
immediate families in the ordinary shares 
of 10p each of the Company, including
options granted but not yet exercised under
the Executive Share Option Schemes and 
the International Sharesave Scheme, were 
as shown in the tables on pages 32 and 33.
There were no changes in the interests of
the Directors or their immediate families 
in the issued ordinary share capital of the
Company between 30 April 2003 and 
25 June 2003 inclusive.
35 DS Smith Plc Annual Report 2003
Directors’ Report
The Directors submit their Annual Report
and the audited financial statements for the
financial year ended 30 April 2003.
Principal activities 
and business review
The Company acts as the holding company 
of a group, which, during 2002/03, was
engaged in the production of corrugated 
and plastic packaging and of paper , primarily
from recycled waste, and the distribution of
office products. A full review of the activities
during the financial year ended 30 April 2003
and future developments is given in the
Chairman’s Statement, Chief Executive’s
Review and in the Operating and Financial
Reviews on pages 4 to 21. The principal
subsidiary undertakings are listed in note 32
on page 63.
Results for the year
The financial results are shown on pages 38 
to 63.
Dividends
An interim dividend of 2.8p net per ordinary
share was paid on 11 March 2003 and the
Directors recommend a final dividend of
6.0p net per ordinary share, making a total
dividend for the year of 8.8p (2002: 8.8p) net
per ordinary share. Subject to approval of
shareholders at the Annual General Meeting
to be held on 3 September 2003, the final
dividend will be paid on 16 September 2003
to shareholders on the register at the close 
of business on 15 August 2003.
Share capital
Pursuant to the Company’s employee share
option schemes, 246,487 ordinary shares of
10p each were issued during the year. 401,427
shares pursuant to the Company’s employee
share option schemes were issued between
30 April 2003 and 25 June 2003 inclusive.
The Company has not utilised its authority
to make market purchases of shares granted
to it at the 2002 Annual General Meeting but
will be seeking to renew such authority at this
year’s meeting.
Substantial shareholders
At 25 June 2003, the Company has been
informed of the following notifiable interests
in its issued ordinary share capital: Health and safety
The Group recognises its responsibilities and
continues to promote all aspects of health
and safety in the interests of its employees
and members of the public. A Health and
Safety Policy Statement has been approved
by the Board. The Group provides financial
support to the British Occupational Health
Research Foundation, an organisation which
deploys funds for research into the problems
of occupational ill-health.
Payment to suppliers
Although the Company does not follow 
any formal code or standard on payment
practice, the Company agrees terms and
conditions in the UK with each supplier,
which include terms of payment. The
Company pays each supplier accordingly,
subject to all the terms and conditions of
the order being satisfied by such supplier.
The aggregate amount owed by the 
Company to trade creditors at 30 April 2003
was equivalent to 21 days of purchases
invoiced by suppliers during the year.
Charitable and political donations
The Group contributed £112,000 (2002:
£87,000) to charities in the UK. No payments
were made to political parties. Donations
were made by operating divisions to support
their local communities and industries. The
Group also supported a number of other
charities across a range of causes.
Annual General Meeting
The notice of the Annual General Meeting 
of the Company to be held on 3 September
2003, together with explanations of the
Resolutions to be proposed, appears at the
back of this Annual Report.
Auditor
Resolutions to re-appoint KPMG Audit Plc
as auditor of the Company and to authorise
the Directors to determine their remuneration
will be put to the Annual General Meeting.
By Order of the Board
Carolyn Cattermole
Secretary
25 June 2003
Directors’ responsibilities for
preparation of financial statements
As required by Company law, the Directors
are responsible for the preparation of
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
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.
36 DS Smith Plc Annual Report 2003
Employee involvement and
communications
The Group is committed to effective
employee communications to promote the
understanding and involvement of all its
employees in the Group’s business objectives
and performance. Communications and
personnel policies have been developed 
to reflect the philosophy of operating
management. Information is regularly
communicated by briefings and newsletters.
The Group operates a European W orks
Council, with representatives drawn from
across the entire workforce in the EU
countries in which the Group operates.
Meetings are held to provide an exchange 
of transnational information and
consultation with employees. At each
meeting, presentations are made on the
Group’s business strategy, financial results
and health and safety performance. Business
decisions concerning capital investment,
employment and training take into account
the Group’s public and local responsibilities.
The Group is a member of Business in the
Community and supports the involvement of
its operations in local community activities.
Equal opportunities
The Group wholeheartedly supports 
the principle and achievement of equal
opportunities in employment and its policies
are designed to provide such equality
irrespective of sex, religion, race, marital
status, nationality or age. Every possible step
will be taken to ensure that individuals are
treated equally and fairly . Depending upon
their skills and abilities, the Group applies the
same criteria to disabled persons as it does to
other employees and, if necessary, retraining
is offered to any of its employees who develop
a disability during such employment.
Pension fund
The investment of the Group’s pension fund
assets is managed on a discretionary basis by
Deutsche Asset Management Limited and
Schroder Investment Management Limited,
such assets being held independently from the
Group. The professional advisors to the fund
are independent of the Group. The Trustee of
the pension scheme sends an Annual Report
to members of the scheme. During the year
an Investment Sub-Committee of the Trustee
Company was set up in line with guidelines
from the Myners Report.
Directors’ Report
continued W e have audited the financial statements 
on pages 38 to 63. W e 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. T o 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 Auditor
The Directors are responsible for preparing
the Annual Report and the Directors’
remuneration report. As described on page
36, this includes responsibility for preparing
the financial statements in accordance 
with applicable United Kingdom law and
accounting standards. Our responsibilities,
as independent auditor, are established in 
the United Kingdom by statute, the Auditing
Practices Board, the Listing Rules of the
Financial Services Authority, and by our
profession’s ethical guidance.
We report to you our opinion as to whether
the financial statements give a true and 
fair view and whether the financial statements
and the part of the Directors’ remuneration
report to be audited have been properly
prepared in accordance with the Companies
Act 1985. We also report to you if, in our
opinion, the Directors’ report is not consistent
with the financial statements, if the Company
has not kept proper accounting records, if
we have not received all the information and
explanations we require for our audit, or if
information specified by law regarding
Directors’ remuneration and transactions
with the Group is not disclosed.
We review whether the statement on
page 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.
W e 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. W e 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 have 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 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 30 April 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
Registered Auditor
London
25 June 2003
37 DS Smith Plc Annual Report 2003
Independent Auditor’ s Report 
to the Members of DS Smith Plc 2003 2002
Before Exceptional Before Exceptional
exceptional items and exceptional items and
items and amortisation items and amortisation
amortisation of intangibles amortisation of intangibles
of intangibles (note 7) Total of intangibles (note 7) Total
Note £m £m £m £m £m £m
Turnover 1 1,479.0 – 1,479.0 1,440.2 – 1,440.2
Cost of sales (1,067.9) – (1,067.9) (1,055.8) (32.4) (1,088.2)
Gross profit 411.1 – 411.1 384.4 (32.4) 352.0
Operating expenses 2 (323.1) (2.6) (325.7) (312.4) (1.7) (314.1)
Group operating profit 1,3 88.0 (2.6) 85.4 72.0 (34.1) 37.9
Share of operating profits
of associated undertakings 15 2.6 0.4 3.0 2.2 0.3 2.5
Total operating profit 90.6 (2.2) 88.4 74.2 (33.8) 40.4
Exceptional loss on sale of businesses* 7 – (8.5) (8.5) –––
Profit on ordinary activities before interest 90.6 (10.7) 79.9 74.2 (33.8) 40.4
Net interest payable and other similar items 8 (10.9) – (10.9) (11.6) – (11.6)
Profit on ordinary activities before taxation 79.7 (10.7) 69.0 62.6 (33.8) 28.8
Tax on profit on ordinary activities 9 (21.6) – (21.6) (16.9) 6.4 (10.5)
Profit on ordinary activities after taxation 58.1 (10.7) 47.4 45.7 (27.4) 18.3
Minority interests – equity (0.3) – (0.3) (0.9) – (0.9)
Profit for the financial year 57.8 (10.7) 47.1 44.8 (27.4) 17.4
Dividends paid and proposed 10 (28.2) – (28.2) (28.2) – (28.2)
Retained profit/(loss) for the financial year 26 29.6 (10.7) 18.9 16.6 (27.4) (10.8)
Earnings per share: 11
Basic 14.7p 5.4p
Diluted 14.6p 5.4p
Adjusted 18.0p 14.0p
The Group’s results shown above are derived from continuing operations. There were no material acquisitions or discontinued operations 
in either year.
The difference between the reported and historical cost profits for each of the years reported above is not material.
The notes on pages 42 to 63 form part of these accounts.
*The loss on sale of businesses in the current year includes £7.4m of goodwill previously written off to reserves.
38 DS Smith Plc Annual Report 2003
Group Profit and Loss Account
For the year ended 30 April 2003 2003 2002
£m £m
Profit for the financial year 47.1 17.4
Exchange differences on foreign currency net investments 7.3 2.9
Total recognised gains and losses relating to the financial year 54.4 20.3
Group Reconciliation of Movements in Shareholders’ Funds
For the year ended 30 April 2003
2003 2002
£m £m
Profit for the financial year 47.1 17.4
Dividends (28.2) (28.2)
Retained profit/(loss) for the financial year 18.9 (10.8)
Exchange differences on foreign currency net investments 7.3 2.9
Goodwill previously written off 7.4 –
New share capital issued 0.4 0.6
Net increase/(decrease) in shareholders’ funds 34.0 (7.3)
Opening shareholders’ funds 438.9 446.2
Closing shareholders’ funds 472.9 438.9
39 DS Smith Plc Annual Report 2003
Group Statement of Total Recognised Gains and Losses
For the year ended 30 April 2003 Group Company
30 April 30 April 30 April 30 April
2003 2002 2003 2002
Note £m £m £m £m
Fixed assets
Intangible assets 12 49.0 32.1 – –
Tangible assets 13 560.9 551.6 0.8 1.0
Investments 15 29.0 27.8 572.0 565.4
638.9 611.5 572.8 566.4
Current assets
Stocks 16 155.2 142.4 – –
Debtors: amounts falling due within one year 17 327.5 317.2 101.2 64.1
Debtors: amounts falling due after more than one year 17 6.8 2.5 413.5 464.8
Short term investments 19 26.7 16.0 – –
Cash at bank and in hand 19 27.7 28.5 – –
543.9 506.6 514.7 528.9
Creditors: amounts falling due within one year
Trade and other creditors 18 (355.9) (330.3) (34.6) (50.3)
Borrowings 18,19 (142.7) (29.4) (157.6) (84.7)
Net current assets 45.3 146.9 322.5 393.9
Total assets less current liabilities 684.2 758.4 895.3 960.3
Creditors: amounts falling due after more than one year
Borrowings 18,19 (114.0) (211.0) (322.3) (411.6)
Other (2.7) (11.1) – (0.4)
Provisions for liabilities and charges 23 (87.9) (90.1) (3.5) (3.6)
479.6 446.2 569.5 544.7
Minority interests – equity (6.7) (7.3) – –
Net assets 472.9 438.9 569.5 544.7
Capital and reserves
Called up share capital 24 32.2 32.1 32.2 32.1
Share premium account 26 188.9 188.6 188.9 188.6
Revaluation reserve 26 8.8 8.9 – –
Acquisition reserve 26 – – 88.1 88.1
Capital reserve 26 – – 50.0 50.0
Profit and loss account 26 243.0 209.3 210.3 185.9
Shareholders’ funds – equity 472.9 438.9 569.5 544.7
Approved by the Board on 25 June 2003 and signed on its behalf by
A D Thorne Director
G M Morris Director
The notes on pages 42 to 63 form part of these accounts.
40 DS Smith Plc Annual Report 2003
Balance Sheets 2003 2002
Note £m £m
Net cash inflow from operating activities 27a 142.0 178.0
Returns on investments and servicing of finance
Net interest paid (7.3) (9.8)
Interest element of finance leases (0.2) (0.2)
Net cash outflow from returns on investments and servicing of finance (7.5) (10.0)
Taxation
UK corporation and overseas tax paid (15.1) (26.9)
Capital expenditure and investments
Purchase of tangible fixed assets (63.4) (75.3)
Sale of tangible fixed assets 4.2 7.7
Purchase of holding company shares (0.8) (0.6)
Purchase of fixed asset investments (0.1) (1.7)
Sale of fixed asset investments 0.6 –
Net cash outflow from capital expenditure and investments (59.5) (69.9)
Acquisitions and disposals
Purchase of subsidiary undertakings 29 (19.6) (41.5)
Net (overdrafts)/cash acquired/disposed (0.5) 0.1
Purchase of associated undertakings – (3.2)
Disposal of businesses 29 4.0 –
Net cash outflow from acquisitions and disposals (16.1) (44.6)
Equity dividends paid (28.2) (28.2)
Net cash inflow/(outflow) before use of liquid resources and financing 15.6 (1.6)
Management of liquid resources 27b (8.4) 3.5
Financing
Issue of ordinary shares 0.3 0.6
(Decrease)/increase in debt and lease financing (29.9) 16.3
Net cash (outflow)/inflow from financing (29.6) 16.9
(Decrease)/increase in cash in the year (22.4) 18.8
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash in the financial year (22.4) 18.8
Decrease/(increase) in debt and lease financing 29.9 (16.3)
Increase/(decrease) in liquid resources 8.4 (3.5)
Decrease/(increase) in net debt resulting from cash flow 15.9 (1.0)
Liquid resources acquired with subsidiary undertakings – 0.5
Loans and finance leases acquired with subsidiary undertakings (2.0) (3.2)
Exchange differences (20.3) 1.2
Increase in net debt in the financial year (6.4) (2.5)
Opening net debt (195.9) (193.4)
Closing net debt 19a, 28 (202.3) (195.9)
The notes on pages 42 to 63 form part of these accounts.
41 DS Smith Plc Annual Report 2003
Group Cash Flow Statement
For the year ended 30 April 2003 A summary of the principal accounting
policies, which have been applied
consistently, is set out below:
(a) Accounting basis
The financial statements are prepared in
accordance with applicable accounting
standards, and under the historical cost
convention except that certain freehold 
and long leasehold land and buildings 
are included at valuation.
(b) Basis of consolidation
The consolidated financial statements include
the accounts of the Company and all its
subsidiary undertakings for the year ended
30 April 2003. 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 to the date of disposal. The acquisition
method of accounting has been adopted for
all companies purchased during the year.
An associate is an undertaking in which the
Group has a long term interest, usually from
20% to 50% of the equity voting rights, and
over which it exercises significant influence.
The Group’s share of the profits less losses 
of associates is included in the consolidated
profit and loss account and its interest in
their net assets, less permanent diminution 
in value, is included in investments in the
consolidated balance sheet.
(c) Goodwill and intangibles
Goodwill arising on acquisitions (representing
the excess of fair value of the consideration
given and associated costs over the fair value of
the net assets acquired) completed after 2 May
1998 is capitalised and amortised on a straight-
line basis over its expected useful economic 
life, not exceeding 20 years. As permitted by
FRS 10, goodwill arising on acquisitions prior
to 2 May 1998 which had already been written
off to reserves has not been reinstated on the
balance sheet. If a business is subsequently
sold or closed, any goodwill that has not been
amortised through the profit and loss account
is included in calculating the profit or loss on
sale or closure. Where negative goodwill arises
it is amortised over the expected life of the
assets to which it relates.
Other material intangible assets acquired
are capitalised at cost and written off on a
straight-line basis over their estimated useful
economic lives, not exceeding 20 years.
(d) Tangible fixed assets
Tangible fixed assets are stated at cost, except
that, as allowed under FRS 15 ‘Tangible
Fixed Assets’, on adoption of this standard
the book amounts of revalued land and
buildings were retained. These book values
are based on the previous revaluation in 1995
and have not subsequently been revalued.
Depreciation is calculated to write off the
cost or valuation less the estimated residual
value of all tangible fixed assets in equal
annual instalments over their estimated
useful lives at the following rates:
Plant, machinery,
fixtures and fittings 5-33
1
⁄3% pa
Motor vehicles 20-33
1
⁄3% pa
Freehold and long 
leasehold properties 2-10% pa
Freehold land and assets in the course of
construction are not depreciated.
(e) Fixed asset investments
Fixed asset investments are valued at cost 
less provisions for impairment.
(f) Stocks and work in progress
Stocks and work in progress are valued 
at the lower of cost and net realisable value.
(g) Deferred taxation
In accordance with FRS 19, deferred tax is
provided in full on timing differences that
result in an obligation at the balance sheet
date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to
apply when they crystallise, based on current
tax rates and the law . Timing differences arise
from the inclusion of items of income and
expenditure in taxation computations in
periods different from those in which they 
are included in the financial statements.
Deferred tax assets are recognised to the
extent that it is regarded as more likely than
not that they will be recovered. Deferred tax
assets and liabilities are not discounted.
(h) Foreign currencies
Monetary assets and liabilities denominated
in foreign currencies are translated at the
rates of exchange ruling at the financial 
year end.
Profits and losses of subsidiary and 
associated undertakings are expressed in
sterling at average exchange rates for the year.
The balance sheets of overseas subsidiary
undertakings, including the Group’s share 
of associates’ net assets, are expressed in
sterling at year end exchange rates. Exchange
differences arising on the translation of
opening shareholders’ funds, together with
those arising on borrowings used to finance
or hedge investments in foreign enterprises,
are recorded as movements in reserves.
All other exchange differences are taken to
the profit and loss account.
42 DS Smith Plc Annual Report 2003
Accounting Policies (i) Turnover
Turnover represents the amount receivable for
goods and services supplied to third parties
net of value added tax and trade discounts.
( ) Research and development
Research and development expenditure 
is written off as incurred.
(k) Leasing transactions
Fixed assets acquired under a lease that
transfers substantially all the risks and rewards
of ownership to the Group are capitalised as
tangible fixed assets. Outstanding obligations
due under the leases, net of finance charges,
are included as a liability . The finance element
of the rental payments is charged to the profit 
and loss account over the term of the lease 
in proportion to the balance outstanding.
All other leases are operating leases and 
the annual rentals are charged to the profit
and loss account on a straight-line basis.
(l) Pension contributions
The Group continues to take advantage of
the transitional arrangements of FRS 17
‘Retirement Benefits’ which permit the costs,
accruals and prepayments recorded in the
financial statements to be reported under 
the requirements of SSAP 24 ‘ Accounting 
for Pension Costs’. This is consistent with 
the basis adopted last year.
The Group operates a defined benefit
pension scheme for its UK employees.
Contributions to this scheme are determined
on the basis of independent actuarial advice
and the amounts charged against profit
reflect the full actuarial cost attributable 
to the financial year. Differences arising
between the amounts charged in the profit
and loss account and monies paid to the
scheme trustees are treated as assets or
liabilities in the balance sheet. The pension
cost of overseas pension schemes is
established by independent actuaries in
accordance with local practice.
Provision is made in the accounts for the
benefits accruing to members of unfunded
pension schemes in accordance with the
advice of independent actuaries.
Further disclosures including those required
by FRS 17 are contained within note 6.
(m) Financial instruments
The Group uses financial instruments,
primarily interest rate and currency swaps,
only to manage interest and currency risk
associated with the Group’s underlying
business activities and the financing of those
activities. The Group does not undertake
any trading activity in financial instruments.
These instruments are accounted for as
hedges when designated as hedges at the
inception of the contracts and, as a result,
any gains or losses on foreign exchange
contracts are offset against any foreign
exchange gains or losses on the related
financial assets and liabilities. Interest 
rate swaps are not shown in the Group
balance sheet at the year end.
43 DS Smith Plc Annual Report 2003 1 Analysis of Group turnover, operating profit and capital employed
Group
operating
profit before
exceptional
items and Group Year end Average Return on
amortisation operating Return capital capital average capital
Turnover of intangibles profit on sales employed employed employed
2003 £m £m £m % £m £m %
Packaging
Corrugated and Paper 747.0 53.1 53.0 7.1% 500.6 502.9 10.6%
Plastic Packaging 195.0 14.7 12.3 7.5% 136.0 128.2 11.5%
942.0 67.8 65.3 7.2% 636.6 631.1 10.7%
Office Products
Wholesaling 495.6 16.2 16.1 3.3% 122.3 127.1 12.7%
Manufacturing 59.7 4.0 4.0 6.7% 13.8 17.3 23.1%
Intra-segment (18.3) ––––––
537.0 20.2 20.1 3.8% 136.1 144.4 14.0%
Total 1,479.0 88.0 85.4 5.9% 772.7 775.5 11.3%
United Kingdom 865.5 59.7 59.7 6.9% 456.9 482.8 12.4%
Rest of W orld 613.5 28.3 25.7 4.6% 315.8 292.7 9.7%
Total 1,479.0 88.0 85.4 5.9% 772.7 775.5 11.3%
2002
Packaging
Corrugated and Paper 720.5 51.2 31.9 7.1% 478.3 510.3 10.0%
Plastic Packaging 171.9 12.7 11.4 7.4% 108.4 103.9 12.2%
892.4 63.9 43.3 7.2% 586.7 614.2 10.4%
Office Products
Wholesaling 500.5 9.7 9.6 1.9% 125.6 134.2 7.2%
Manufacturing 66.7 (1.6) (15.0) (2.4)% 16.3 34.9 (4.6)%
Intra-segment (19.4) ––––––
547.8 8.1 (5.4) 1.5% 141.9 169.1 4.8%
Total 1,440.2 72.0 37.9 5.0% 728.6 783.3 9.2%
United Kingdom 892.9 43.7 20.4 4.9% 465.6 520.8 8.4%
Rest of W orld 547.3 28.3 17.5 5.2% 263.0 262.5 10.8%
Total 1,440.2 72.0 37.9 5.0% 728.6 783.3 9.2%
The operating profits shown above exclude the Group’s share of operating profits and losses of associated undertakings (see note 15) and 
the exceptional net loss relating to the sale of businesses shown below operating profit on the face of the consolidated profit and loss account 
(see note 7). Return on sales is defined as operating profit before exceptional items and amortisation of intangibles divided by turnover.
A verage capital employed is the average monthly capital employed including the intangible assets on the balance sheet. Capital employed
excludes net borrowings, deferred consideration due in respect of acquisitions, corporation tax, dividends payable, fixed asset investments 
and minority interests. Return on average capital employed is defined as operating profit before exceptional items and amortisation of
intangibles divided by the average capital employed. Following a change in management responsibilities, the 2001/02 results and capital
employed of the Group’s Packaging Services Management business have been reclassified from Plastic Packaging to Corrugated and Paper.
The £32.4m prior year exceptional charge included in operating profit above comprises £19.0m relating to Corrugated and Paper and £13.4m 
to Office Products Manufacturing.
44 DS Smith Plc Annual Report 2003
Notes to the Financial Statements 1 Analysis of Group turnover, operating profit and capital employed continued
Capital employed as shown on page 44 excludes items of a financing nature, corporation tax balances and fixed asset investments.
Y ear end capital employed is reconciled to Group shareholders’ funds as follows:
2003 2002
£m £m
Shareholders’ funds 472.9 438.9
Net borrowings 202.3 195.9
Deferred consideration due in respect of acquisitions 8.7 8.9
Dividends payable 19.3 19.3
Minority interests 6.7 7.3
Corporation tax creditor (net) 16.3 11.1
Deferred tax provision 75.5 75.0
Fixed asset investments (29.0) (27.8)
Y ear end capital employed 772.7 728.6
The geographical analysis shown on page 44 is shown by origin. The geographical analysis of turnover by destination is:
2003 2002
£m £m
United Kingdom 781.8 812.9
France 299.4 269.6
Germany 109.0 96.0
North America 45.3 49.8
Italy 36.3 33.1
Poland 35.1 31.6
Ireland 30.2 30.9
Turkey 24.1 21.6
Belgium 19.9 18.8
Other 97.9 75.9
1,479.0 1,440.2
2 Operating expenses
2003 2002
£m £m
Distribution costs 166.1 157.6
Administrative expenses 159.6 156.5
325.7 314.1
The administrative expenses in the year include amortisation of intangibles of £2.6m (2002: £1.7m).
45 DS Smith Plc Annual Report 2003 3 Group operating profit
Operating profit is stated after charging the following:
2003 2002
£m £m
Depreciation – owned assets 61.1 62.6
– leased assets 1.1 1.0
Amortisation of intangibles 2.6 1.7
Impairment of tangible fixed assets – 30.1
Impairment of goodwill – 2.3
Hire of plant and machinery 10.3 10.4
Other operating lease rentals 10.0 8.2
Research and development 0.8 1.2
Fees payable to Auditors and their associates:
Group audit (Parent company: £0.1m in both years) 0.7 0.6
Non-audit services:
UK 0.3 0.3
Overseas 0.2 0.1
1.2 1.0
Non-audit fees comprised due diligence and other audit related work of £0.2m (2002: £0.2m) and taxation work of £0.3m (2002: £0.2m).
4 Directors’ remuneration
Details of Directors’ remuneration, shareholdings and share options are contained in the Report on Remuneration on pages 28 to 34.
5 Particulars of employees
The average number of persons employed by the Group during the year was:
2003 2002
Number Number
Production 6,977 6,577
Selling and administration 4,023 4,302
11,000 10,879
Their total remuneration was:
2003 2002
£m £m
Wages and salaries 238.9 225.0
Social security costs 34.4 32.0
Other pension costs 1.6 1.6
274.9 258.6
46 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 6 Pensions
The Group operates a single funded defined benefit scheme in the UK, the DS Smith Group Pension Scheme. The latest formal actuarial
valuation of the Scheme was carried out by independent actuaries as at 5 April 2001, using the projected unit method. The actuaries reviewed
the methods and assumptions underlying the actuarial valuation of the Scheme and, as in previous years, a valuation basis linked to market
value was used to value investments. The principal assumptions used at 5 April 2001 were as follows:
Valuation discount rate – pre-retirement 6.6%
– post-retirement 5.6%
Rate of increase in salaries 3.9%
Pension increases 2.4%
At the valuation date, the market value of the assets of the scheme was £527.3m and the actuarial value of the assets was 117% of the value 
of accrued benefits after allowing for expected future increases in earnings. The surplus of assets over past service liabilities is being used to
suspend contributions until the results of the next triennial actuarial valuation are known, subject to the continuing consent of the Trustee.
The next triennial actuarial valuation of the Scheme will be as at 5 April 2004.
An amount of £6.3m (2002: £2.0m) in respect of the UK defined benefit scheme is included in debtors falling due after more than one year.
This includes a £5.0m contribution to the UK defined benefit scheme made by the Group during the second half of the year.
The Group has also made provision for unfunded pensions for those Executive Directors whose benefits under the funded Scheme are
restricted by the Inland Revenue ‘earnings cap’. The pension cost for the year has been assessed as £0.2m (2002: £0.6m) and the balance 
sheet liability at 30 April 2003 as £3.1m (2002: £3.4m).
In France the Group operates a defined benefit scheme which is fully funded through a segregated fund.
The disclosures required under the transitional arrangements within FRS 17 ‘Retirement Benefits’ have been calculated by qualified
independent actuaries based on the most recent full actuarial valuation at 5 April 2001, updated to 30 April 2003. The financial assumptions
used were:
2003 2002
% per annum % per annum
Rate of increase in salaries 4.0% 4.1%
Rate of increase in pensions in payment and deferred pensions 2.5% 2.6%
Inflation 2.5% 2.6%
Discount rate 5.4% 5.9%
The assets in the scheme and the expected rates of return were:
2003 2002
Expected rates Expected rates
of return Market value of return Market value
%£m %£m
Equities 7.2% 294.5 7.6% 348.9
Bonds, Gilts and Cash (Weighted average) 4.4% 132.4 5.2% 154.1
Total 426.9 503.0
The following amounts were measured in accordance with the requirements of FRS 17:
2003 2002
£m £m
T otal market value of assets 426.9 503.0
Present value of scheme liabilities (560.9) (513.5)
Deficit in the scheme (134.0) (10.5)
Related deferred tax asset 40.2 3.2
Net pension liability (93.8) (7.3)
47 DS Smith Plc Annual Report 2003 6 Pensions continued
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which due to the timescales
covered may not necessarily be borne out in practice. The scheme’s assets are not intended to be realised in the short term and their fair value
may be subject to significant change before they are realised. The present value of the scheme’s liabilities is derived from cashflow projections
over long term periods and thus is inherently uncertain.
If these amounts had been recognised in the financial statements, the Group’s net assets and profit and loss account reserve at 30 April
2003 would be as follows:
2003 2002
£m £m
Net assets 472.9 438.9
SSAP 24 prepayments and liabilities (5.1) 0.1
Pension liability (93.8) (7.3)
Net assets including pension liability 374.0 431.7
Profit and loss account reserve excluding pension liability 243.0 209.3
SSAP 24 prepayments and liabilities (5.1) 0.1
Pension reserve (93.8) (7.3)
Profit and loss account reserve including pension liability 144.1 202.1
The amount chargeable to operating profit and finance income for the year ended 30 April 2003 had FRS 17 been operative is as follows:
2003
£m
Operating profit
Current service cost (13.2)
Past service cost (0.1)
Total operating charge (13.3)
Other finance income
Expected return on pension scheme assets 34.4
Interest on pension scheme liabilities (30.1)
Net return 4.3
The amount recognised in the Statement of T otal Recognised Gains and Losses (STRGL) had FRS 17 been operative is as follows:
2003
£m
Actual return less expected return on pension scheme assets (102.5)
Experience gains and losses arising on the scheme liabilities 12.5
Changes in assumptions underlying present value of scheme liabilities (29.5)
Actuarial loss recognised in the STRGL (119.5)
The movement in the pre-tax deficit during the year is as follows:
£m
Deficit in scheme as at 1 May 2002 (10.5)
Current and past service cost (13.3)
Contributions 5.0
Other finance income 4.3
Actuarial loss (119.5)
Deficit in scheme at 30 April 2003 (134.0)
48 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 6 Pensions continued
% of scheme 2003
assets/liabilities £m
History of experience gains and losses
Difference between expected and actual returns on scheme assets 24% (102.5)
Experience gains and losses on scheme liabilities 2% 12.5
T otal amount recognised in Statement of Recognised Gains and Losses as percentage of scheme liabilities 21% (119.5)
7 Exceptional items and amortisation of intangibles
2003 2002
£m £m
Net loss on sale of businesses (8.5) –
Impairment of tangible fixed assets and goodwill – (32.4)
Amortisation of intangibles (see note 12) (2.6) (1.7)
Amortisation of negative goodwill of associates 0.4 0.3
(10.7) (33.8)
Tax on exceptional items – 6.4
Total (10.7) (27.4)
The loss on sale of businesses in the current year includes £7.4m of goodwill previously written off to reserves (see note 29). Last year the
Group carried out an extensive review of its operating assets, as a result of which a £32.4m impairment charge against the carrying value of
tangible fixed assets and goodwill was charged in arriving at operating profit. A substantial part of this charge related to the Group’s Office
Products Manufacturing business and the investment in Turkish corrugated packaging.
8 Net interest payable and other similar items
2003 2002
£m £m
Interest payable and similar charges
– on bank loans and overdrafts (12.4) (12.4)
– on other loans (3.1) (1.4)
– on finance leases (0.2) (0.2)
– hyperinflationary net monetary gain/(loss) 1.6 (0.8)
(14.1) (14.8)
Interest receivable and similar income 3.2 3.2
(10.9) (11.6)
9 Taxation
(a) Analysis of charge in the period:
2003 2002
£m £m
UK corporation tax – current year 10.7 6.9
UK corporation tax – prior years (1.6) (0.7)
Overseas taxation 11.4 10.0
T otal current tax 20.5 16.2
Deferred tax – timing differences 1.1 (5.7)
Tax charge 21.6 10.5
Effective tax rate 31.3% 36.5%
Effective tax rate before exceptional items and amortisation of intangibles 27.1% 27.0%
49 DS Smith Plc Annual Report 2003 9 Taxation continued
(b) Factors affecting current tax charge for the year:
The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 30% (2002: 30%). The differences are 
explained below:
2003 2002
£m £m
Profit before tax 69.0 28.8
Tax on profit at 30% (2002: 30%) 20.7 8.6
Effects of:
Depreciation for period in excess of capital allowances, and other timing differences (3.6) 6.1
Permanent differences 3.8 2.8
Overseas tax rates 1.8 1.7
Prior year credit (1.6) (0.7)
Other (0.6) (2.3)
Current tax charge for the year 20.5 16.2
(c) Factors that may affect future tax charges:
In future years, the Group’s tax charge will be affected by the proportion of profits earned in the various countries in which the Group
operates, movements in currently unrecognised deferred tax assets, the most significant of which relate to tax losses, and the extent to 
which any capital gains can be either rolled over or sheltered by capital losses.
10 Dividends paid and proposed
2003 2002 2003 2002
Per share Per share £m £m
Interim paid 2.8p 2.8p 8.9 8.9
Final proposed 6.0p 6.0p 19.3 19.3
8.8p 8.8p 28.2 28.2
11 Earnings per share
Basic earnings per share are calculated by dividing the profit for the financial year of £47.1m (2002: £17.4m) by the weighted average number
of shares in issue and fully paid during the year of 320.3m (2002: 320.2m). The number of shares excludes the weighted average number of
the Company’s own shares on the Group’s balance sheet during the year (see note 15) of 1.1m (2002: 0.7m).
The Directors believe that the presentation of an adjusted earnings per share, being the basic earnings per share adjusted for exceptional
items and amortisation of intangibles, helps to explain the underlying performance of the Group. A reconciliation of basic to adjusted
earnings per share is as follows:
2003 2002
Pence Pence
£m per share £m per share
Basic earnings 47.1 14.7 17.4 5.4
Exceptional items and amortisation of intangibles (after tax):
Amortisation of intangibles, and goodwill relating to associates 2.2 0.7 1.4 0.4
Impairment of fixed assets and goodwill –– 26.0 8.2
Net loss on sale of businesses 8.5 2.6 ––
Adjusted earnings 57.8 18.0 44.8 14.0
50 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 11 Earnings per share continued
In calculating diluted earnings per share there are no adjustments to earnings, but the weighted average number of shares denominator
is adjusted as follows:
Number of shares in issue
2003 2002
Millions Millions
Basic weighted average 320.3 320.2
Potentially dilutive shares issuable under share option schemes 0.2 0.3
Estimated vesting of Long Term Incentive Plan shares 1.1 0.7
Diluted weighted average 321.6 321.2
12 Intangible assets
Positive Negative Other
goodwill goodwill intangibles Total
£m £m £m £m
Cost:
At 1 May 2002 35.5 (1.8) 4.2 37.9
Arising on acquisitions (see note 29) 17.9 (0.2) – 17.7
Transfer (7.5) – 7.5 –
Exchange differences 1.8 – – 1.8
At 30 April 2003 47.7 (2.0) 11.7 57.4
Amortisation:
At 1 May 2002 5.5 – 0.3 5.8
Amortisation charge for the year 2.1 (0.1) 0.6 2.6
Transfer (0.4) – 0.4 –
At 30 April 2003 7.2 (0.1) 1.3 8.4
Net book value:
At 30 April 2003 40.5 (1.9) 10.4 49.0
At 30 April 2002 30.0 (1.8) 3.9 32.1
The goodwill arising on acquisitions in the financial year ended 30 April 2003 is being amortised over its estimated useful life of 20 years.
Goodwill arising on the acquisition of associate undertakings is shown within fixed asset investments in note 15. The amount arising on
acquisitions includes an increase in goodwill of £3.4m relating to acquisitions completed in the previous year. This mainly comprises an 
accrual for additional consideration which was contingent on the post acquisition profits of the business. Following the finalisation of
a formal valuation of intellectual property acquired in prior years, £7.5m of the original goodwill arising has been transferred to other
intangibles less the amortisation to date of £0.4m.
51 DS Smith Plc Annual Report 2003 13 Tangible fixed assets
Group Company
Payments
on account
Land and buildings
and assets
Plant and in course of Plant and
Freehold Leasehold machinery construction Total machinery
£m £m £m £m £m £m
Cost or valuation:
At 1 May 2002 199.5 14.1 843.0 26.2 1,082.8 2.9
Exchange differences 6.5 0.2 25.3 0.2 32.2 –
Acquisitions 0.7 0.1 6.3 – 7.1 –
Capital expenditure 3.4 0.5 24.6 28.9 57.4 0.1
Disposals (1.7) (0.6) (22.3) – (24.6) (0.1)
Sale of businesses (3.4) – (6.4) – (9.8) –
Transfers 0.8 – 26.1 (26.9) – –
At 30 April 2003 205.8 14.3 896.6 28.4 1,145.1 2.9
Accumulated depreciation:
At 1 May 2002 28.1 7.3 495.8 – 531.2 1.9
Exchange differences 1.2 0.1 12.4 – 13.7 –
Acquisitions – 0.1 3.9 – 4.0 –
Charge for the financial year 4.2 0.3 57.7 – 62.2 0.3
Disposals (0.6)(0.5)(19.7)–(20.8)(0.1)
Sale of businesses (0.9) – (5.2) – (6.1) –
At 30 April 2003 32.0 7.3 544.9 – 584.2 2.1
Net book value:
At 30 April 2003 173.8 7.0 351.7 28.4 560.9 0.8
At 30 April 2002 171.4 6.8 347.2 26.2 551.6 1.0
Freehold land amounting to £55.0m (2002: £55.2m) has not been depreciated. Substantially all the Group’s leasehold land and buildings are
long leasehold.
Tangible fixed assets are stated at cost to the Group with the exception of certain freehold and leasehold land and buildings which are
included at valuation as follows:
Freehold Leasehold
2003 2002 2003 2002
£m £m £m £m
Net book value:
Professionally valued in 1995 86.6 87.3 4.0 4.1
At cost 87.2 84.1 3.0 2.7
173.8 171.4 7.0 6.8
Included in plant and machinery are leased assets with a cost of £24.6m (2002: £23.4m) and a net book value of £7.9m (2002: £8.5m).
14 Capital commitments
2003 2002
£m £m
Future capital expenditure for which contracts have been placed 7.3 5.8
52 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 15 Fixed asset investments
Group Company
Negative
goodwill Shares in
Associated on associated Other Group
undertakings undertakings investments Total undertakings Other Total
£m £m £m £m £m £m £m
At 1 May 2002 21.8 (7.8) 13.8 27.8 562.9 2.5 565.4
Additions – – 0.7 0.7 3.5 0.6 4.1
Share of retained profits 2.0 – – 2.0 – – –
Amortisation of goodwill – 0.4 – 0.4 – – –
Disposals – – (0.5) (0.5) (10.5) (0.1) (10.6)
Exchange differences 0.2 – – 0.2 13.1 – 13.1
Transfer to subsidiary (1.6) – – (1.6) – – –
At 30 April 2003 22.4 (7.4) 14.0 29.0 569.0 3.0 572.0
On 1 May 2002, the Group acquired a further 15% of the issued share capital of StePac L.A., Ltd, taking the Group’s total shareholding to
55%. The Company has been accounted for as a subsidiary undertaking from this date, having previously been accounted for as an associate
undertaking.
The principal associated undertakings are:
Principal country Financial Group
Nature of business of operation year end Issued capital share %
OJSC Rubezhansk Paper Manufacturer of Ukraine 31 December 17,721,000 shares 39%*
and Packaging Mill paper and packaging of UAH 1.50 each
Grovehurst Energy Ltd Provision of energy England 31 December 100 shares 50%*
and other services of £1 each
Tri-Wall KK Supplier of industrial Japan 31 March 7,515 shares of 40%*
packaging and heavy Y en 5,000 each
duty corrugated cases
Foresco Golfkarton NV Fabricator of Belgium 31 December 39,000 shares of 35%*
corrugated cases BFr 1,000 each
*Indirectly held.
Other fixed asset investments include £1.7m (2002: £1.1m) of DS Smith Plc shares. The Group operates a General Employee Benefit 
Trust which acquires shares in the Company to satisfy the requirements of the DS Smith Plc Long Term Incentive Plan (the Plan).
The 1.2m shares held by the Trust at 30 April 2003 were acquired using funds provided by DS Smith Plc. The market value of the 
shares at 30 April 2003 was £1.9m. Dividends receivable on the shares owned by the Trust have been waived. For further details of
the Plan see the Report on Remuneration on pages 28 to 34.
16 Stocks
2003 2002
£m £m
Raw materials and consumables 47.0 41.4
W ork in progress 3.8 3.3
Finished goods 104.4 97.7
155.2 142.4
53 DS Smith Plc Annual Report 2003 17 Debtors
Group Company
2003 2002 2003 2002
£m £m £m £m
(a) Amounts falling due within one year:
Trade debtors 299.4 290.2 – –
Amounts owed by subsidiary undertakings – – 100.7 63.6
Amounts owed by associated undertakings 0.1 0.1 – –
Corporation tax 1.2 1.1 – –
Other tax and social security 6.0 6.1 – –
Other debtors 10.6 8.0 0.4 0.3
Prepayments and accrued income 10.2 11.7 0.1 0.2
327.5 317.2 101.2 64.1
(b) Amounts falling due after more than one year:
Pensions 6.3 2.0 5.0 –
Amounts owed by subsidiary undertakings – – 407.2 463.9
Deferred tax asset – – 1.1 0.9
Other debtors 0.5 0.5 0.2 –
6.8 2.5 413.5 464.8
T otal debtors 334.3 319.7 514.7 528.9
18 Creditors
Group Company
2003 2002 2003 2002
£m £m £m £m
(a) Trade and other creditors falling due within one year:
Trade creditors 208.5 211.7 – –
Bills of exchange 19.6 14.6 – –
Amounts owed to subsidiary undertakings – – 3.4 24.8
Amounts owed to associated undertakings – 0.4 – –
Corporation tax 17.5 12.2 – –
Other taxes and social security 18.8 16.1 0.3 0.2
Accruals and deferred income 63.6 56.0 11.6 6.0
Deferred consideration due in respect of acquisitions 8.6 – – –
Proposed dividend 19.3 19.3 19.3 19.3
355.9 330.3 34.6 50.3
(b) Borrowings falling due within one year:
Bank loans and overdrafts 140.9 27.4 157.6 84.7
Other loans 0.8 1.1 – –
Finance leases 1.0 0.9 – –
142.7 29.4 157.6 84.7
54 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 18 Creditors continued
Group Company
2003 2002 2003 2002
£m £m £m £m
(c) Borrowings falling due after more than one year:
Bank loans 12.2 206.3 – 199.9
Loans from subsidiary undertakings – – 225.2 211.7
Other loans 97.9 0.4 97.1 –
Finance leases 3.9 4.3 – –
114.0 211.0 322.3 411.6
(d) Other creditors due after more than one year:
Deferred consideration due in respect of acquisitions 0.1 8.9 – –
Other 2.6 2.2 – 0.4
2.7 11.1 – 0.4
T otal creditors 615.3 581.8 514.5 547.0
19 Financial assets and liabilities (see also note 20)
2003 2002
Book value Fair value Book value Fair value
£m £m £m £m
(a) The Group’ s net borrowings are:
Bank loans and overdrafts and other loans 251.8 249.0 235.2 235.2
Finance lease liabilities 4.9 4.9 5.2 5.2
Short term investments (see note 27(b)) (26.7) (26.7) (16.0) (16.0)
Cash at bank and in hand (27.7) (27.7) (28.5) (28.5)
202.3 199.5 195.9 195.9
Gearing (net borrowings expressed as a percentage of shareholders’ funds) 42.8% N/A 44.6% N/A
2003 2002
£m £m
(b) Bank loans and overdrafts and other loans are repayable as follows:
Due within one year 141.7 28.5
Due between one and two years 1.4 200.3
Due between two and five years 4.3 1.3
Due after five years 104.4 5.1
251.8 235.2
(c) Analysis of finance lease liabilities:
Due within one year 1.0 0.9
Due between one and two years 1.0 0.9
Due between two and five years 1.7 2.0
Due after five years 1.2 1.4
4.9 5.2
Lease payments:
Due within one year 1.3 1.2
Due after one year 4.6 5.2
5.9 6.4
Finance charges (1.0) (1.2)
4.9 5.2
Obligations under finance leases are secured on the assets to which they relate.
55 DS Smith Plc Annual Report 2003 19 Financial assets and liabilities (see also note 20) continued
2003 2002
Book value Fair value Book value Fair value
£m £m £m £m
(d) The Group’ s exposure to derivative financial instruments 
may be summarised as follows:
Derivatives held to:
Hedge future transactions (5.6) (5.7) (2.2) (1.9)
Manage the interest rate and currency exposure of borrowings – (4.8) ––
Net liability (5.6) (10.5) (2.2) (1.9)
Forward foreign exchange contracts have been taken to hedge contractual commitments for the purchase of capital equipment and raw
materials. All of these contracts will have matured by September 2003. During the year, the Group entered into 10-year currency and interest
rate swap transactions in order to manage the interest rate and currency exposure arising from the Group’s private placement (see note 20).
The fair value of derivative financial instruments has been determined on the basis of third party valuations.
20 Interest and currency profile of net borrowings
An explanation of the Group’s treasury policy is included in the Financial Review on pages 18 to 21. Short term debtors and creditors 
have been omitted from the disclosures presented below . The currency and interest rate exposure of the Group’s net borrowings was:
Eurozone
Sterling currencies Other Total
£m £m £m £m
At 30 April 2003
Borrowings:
Floating rate 37.1 195.5 22.8 255.4
Fixed rate 0.2 1.0 0.1 1.3
37.3 196.5 22.9 256.7
Cash and short term investments:
Floating rate (5.0) (21.2) (21.1) (47.3)
Fixed rate (0.7) (5.7) (0.7) (7.1)
(5.7) (26.9) (21.8) (54.4)
Net borrowings at 30 April 2003 31.6 169.6 1.1 202.3
At 30 April 2002
Borrowings:
Floating rate 48.2 168.9 22.4 239.5
Fixed rate 0.1 0.6 0.2 0.9
48.3 169.5 22.6 240.4
Cash and short term investments:
Floating rate (3.5) (20.7) (16.1) (40.3)
Fixed rate (0.2) (3.5) (0.5) (4.2)
(3.7) (24.2) (16.6) (44.5)
Net borrowings at 30 April 2002 44.6 145.3 6.0 195.9
The Group’s borrowings are denominated substantially in euros in order to hedge the underlying assets of the Group’s relevant continental
European operations.
Interest rates on floating rate borrowings are based on LIBOR, EURIBOR or base rates. Fixed rate borrowings comprise mortgages and
finance leases.
In 1996, the Group entered into a series of bilateral revolving credit facilities totalling £325m, of which facilities with five banks totalling
£135m remain and will expire in December 2003. Advances drawn down under these facilities bear interest at margins over LIBOR.
Borrowings at 30 April 2003 include bank loans of £101.8m repayable within one year under these facilities.
56 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 20 Interest and currency profile of net borrowings continued
During the financial year, the Group entered into a series of bilateral revolving credit facilities totalling £290m with 10 banks, of which £25m
expires in May 2005, £25m in May 2006, £75m in September 2007 and the remainder in May 2008. Advances drawn down under these facilities
bear interest at margins over LIBOR. These facilities were undrawn at the year end.
The Group also entered into a note purchase agreement with a number of investors which have purchased US$105m of 6.24% senior notes 
and £25m of 6.85% senior notes issued in 2002. The notes will mature on 14 November 2012. The Group entered into a swap transaction 
with a bank counterparty under which it made a payment of US$80m in return for an equivalent amount denominated in euros. The swap
counterparty also agreed to pay fixed rate dollar interest of 6.24% per annum in exchange for floating euro rate interest at rates linked to
EURIBOR. The proceeds of the swap, A81.6m, or £57.0m at rates ruling on 30 April 2003, are shown as bank loans due after five years.
In addition, swap counterparties also agreed to pay fixed rate dollar interest of 6.24% on a principal amount of $25m in exchange for floating
dollar interest linked to dollar LIBOR and fixed rate sterling interest of 6.85% on a principal of £25m in exchange for floating sterling interest
linked to sterling LIBOR.
Of the total borrowing facilities available to the Group, the undrawn committed facilities available at 30 April 2003 were as follows:
2003 2002
£m £m
Expiring within one year 53.1 9.7
Expiring between one and two years 10.9 142.7
Expiring between two and five years 125.0 –
Expiring in more than five years 165.9 4.0
354.9 156.4
Bank loans, other loans and overdrafts of certain subsidiaries of £15.4m are secured over the assets of these companies.
21 Currency analysis of net assets
2003 2002
Net assets Net assets
excluding excluding
gross Gross gross Gross
borrowings borrowings Net assets borrowings borrowings Net assets
£m £m £m £m £m £m
Sterling 407.2 (37.3) 369.9 412.0 (48.3) 363.7
Eurozone currencies 274.1 (196.5) 77.6 223.5 (169.5) 54.0
Other 48.3 (22.9) 25.4 43.8 (22.6) 21.2
729.6 (256.7) 472.9 679.3 (240.4) 438.9
Currency exposures giving rise to currency gains and losses in the Group’s profit and loss account are not material.
57 DS Smith Plc Annual Report 2003 22 Other financial commitments
Annual commitments under non-cancellable operating leases are as follows:
Land and buildings Plant and machinery
2003 2002 2003 2002
£m £m £m £m
Expiring within one year 0.9 1.8 1.9 1.0
Expiring between one and five years 3.9 4.5 5.1 6.2
Expiring after five years 7.0 3.8 1.3 0.8
11.8 10.1 8.3 8.0
23 Provisions for liabilities and charges
Group Company
Deferred Arising on
taxation acquisition Pensions Other Total Pensions Other Total
£m £m £m £m £m £m £m £m
At 1 May 2002 75.0 0.3 6.6 8.2 90.1 3.4 0.2 3.6
Provided 1.1 – 0.5 2.4 4.0 0.5 – 0.5
Utilised – (0.1) (1.2) (4.5) (5.8) (0.6) – (0.6)
Exchange differences (0.6) – (0.2) 0.4 (0.4) – – –
At 30 April 2003 75.5 0.2 5.7 6.5 87.9 3.3 0.2 3.5
Other provisions mainly relate to reorganisation and redundancy costs and provisions for vacant leasehold properties. Provisions relating 
to reorganisation and redundancy costs are expected to be utilised during the next year.
Deferred taxation is analysed as follows:
2003 2002
£m £m
Accelerated capital allowances 68.7 66.8
Other timing differences 6.8 9.7
Prior year credit – (1.5)
75.5 75.0
The analysis of deferred taxation excludes additional taxation payable:
(i) on capital gains which may arise if land and buildings were sold for the amounts at which they are carried in the Group’s balance sheet 
as, in the opinion of the Directors, such properties will be retained for use in the business or, if sold, would be replaced by similar assets; and
(ii) in the event of the profits of overseas subsidiary undertakings being distributed where there is no intention to make such distributions.
58 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 24 Share capital
Number of shares
2003 2002 2003 2002
Millions Millions £m £m
Ordinary equity shares of 10 pence each:
Authorised 410.0 410.0 41.0 41.0
Issued, allotted, called up and fully paid 321.5 321.3 32.2 32.1
Shares issued during the year to 30 April 2003 and the consideration received were:
Allotted, called up and fully paid
Nominal Share Total
Value premium consideration
’000 £’000 £’000 £’000
Reason for issue:
Executive options (note 25) 212 21 293 314
Savings Related Option Scheme (note 25) 34 3 43 46
246 24 336 360
25 Share options
During the year ended 30 April 2003, the following options were granted:
Number of shares Option price (range) Date exercisable
Executive Share Option Scheme (1999) 1,986,800 145.0p – 163.0p July 2005 – December 2012
At 30 April 2003, the following options were outstanding:
Number of shares Option price (range) Date exercisable
Executive Share Option Scheme (1992) 5,583,212 173.3p – 327.5p October 1996 – July 2009
Executive Share Option Scheme (1999) 5,839,010 145.0p – 170.9p October 2002 – December 2012
1999 Savings Related Option Scheme 4,377,872 148.1p – 172.0p January 2003 – June 2005
During the year, awards totalling 333,339 shares were made to participating executives under the Long Term Incentive Plan (the Plan).
At 30 April 2003, the total number of shares awarded and held in trust to satisfy obligations under the Plan was 848,532 (2002: 695,304).
59 DS Smith Plc Annual Report 2003 26 Reserves
Share Profit
premium Revaluation and loss
account reserve account
Group £m £m £m
At 1 May 2002 188.6 8.9 209.3
Premium arising on shares issued 0.3 – –
Retained profit for the financial year – – 18.9
Transfer – (0.1) 0.1
Goodwill previously written off –– 7.4
Exchange differences –– 7.3
At 30 April 2003 188.9 8.8 243.0
Exchange differences include an exchange loss of £20.3m (2002: gain of £0.8m) on foreign currency borrowings, offset by gains arising 
on the Group’s equity investment in foreign subsidiary and associated undertakings. At 30 April 2003, the cumulative goodwill written 
off against the profit and loss account reserve for businesses acquired prior to 2 May 1998 was £156.0m (2002: £163.4m).
Share
premium Acquisition Capital Profit and
account reserve reserve loss account
Company £m £m £m £m
At 1 May 2002 188.6 88.1 50.0 185.9
Premium arising on shares issued, net of costs (see note 24) 0.3 – – –
Retained profit for the financial year – – – 24.4
At 30 April 2003 188.9 88.1 50.0 210.3
No separate profit and loss account is presented for the Company as permitted by Section 230(4) of the Companies Act 1985.
The Company made a profit for the financial year of £52.6m (2002: £29.6m).
The Company’s profit and loss account includes an amount of £126.6m (2002: £126.6m) which is considered non-distributable.
27 Group cash flow statement
2003 2002
£m £m
(a) Reconciliation of operating profit to net cash inflow from operating activities:
Operating profit before exceptional items and amortisation of intangibles 88.0 72.0
Depreciation 62.2 63.6
Profit on sale of tangible fixed assets (0.4) (2.9)
(Increase)/decrease in stocks (5.3) 16.2
Decrease in debtors 1.6 21.1
(Decrease)/increase in creditors (2.3) 3.3
(Decrease)/increase in provisions (3.3) 3.9
Other non cash operating items 1.5 0.8
Net cash inflow from operating activities 142.0 178.0
(b) Net (purchase)/sale of short term investments (8.4) 3.5
Short term investments mainly comprise deposits with banks.
60 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 28 Analysis of changes in net debt
At 30 April Exchange At 30 April
2002 Acquired Cash flow movements 2003
£m £m £m £m £m
Cash at bank and in hand 28.5 – (0.9) 0.1 27.7
Overdrafts (16.2) – (21.5) (2.1) (39.8)
12.3 – (22.4) (2.0) (12.1)
Debt due after one year (206.7) (1.8) 116.7 (18.3) (110.1)
Debt due within one year (12.3) (0.2) (87.7) (1.7) (101.9)
Finance leases (5.2) – 0.9 (0.6) (4.9)
(224.2) (2.0) 29.9 (20.6) (216.9)
Short term investments 16.0 – 8.4 2.3 26.7
Total (195.9) (2.0) 15.9 (20.3) (202.3)
29 Acquisitions and disposals
On 15 July 2002, the Group acquired Zewathener GmbH, one of Europe’s leading manufacturers of bag-in-box packaging, located in
Schwetzingen, Germany . The business was acquired for a total consideration of £17.5m, including acquired debt, which resulted in goodwill
arising of £13.6m.
Details of acquisitions during the year are summarised as follows:
Other
Zewathener GmbH acquisitions
Accounting Total
Book policy Fair value Fair Fair fair
value adjustments adjustments value value value
£m £m £m £m £m £m
Tangible fixed assets 0.7 – 0.8 1.5 1.6 3.1
W orking capital 2.6 (0.1) (0.2) 2.3 – 2.3
Taxation 0.1 – –0.1 –0.1
Cash/(Loans) (1.1) – – (1.1) (1.2) (2.3)
Net assets acquired 2.3 (0.1) 0.6 2.8 0.4 3.2
Minority interest –––– 1.0 1.0
Group assets acquired 2.3 (0.1) 0.6 2.8 1.4 4.2
Positive goodwill arising 13.6 4.1 17.7
16.4 5.5 21.9
Satisfied by:
Cash consideration paid 16.0 3.2 19.2
Deferred consideration –0.7 0.7
Cost of investment transferred –1.6 1.6
Cash expenses of acquisition 0.4 – 0.4
T otal consideration 16.4 5.5 21.9
The material fair value adjustments are to recognise formal valuations on acquired tangible fixed assets and to bring provisioning against stock
and debtors into line with the relevant Group procedures. Fair value adjustments on other acquisitions are not significant.
61 DS Smith Plc Annual Report 2003 29 Acquisitions and disposals continued
Disposals
During the year, the Group sold three small businesses. The total net assets disposed of, the aggregate consideration and net loss on sale are
set out below:
2003
£m
Tangible fixed assets 3.7
W orking capital 2.7
Net cash 0.2
Minority interest adjustment (1.0)
Net assets disposed 5.6
Goodwill previously written off to reserves 7.4
13.0
Aggregate consideration:
Cash 4.8
Deferred consideration 0.5
Costs (0.8)
4.5
Net loss on disposal (8.5)
30 Related party transactions
2003 2002
£m £m
Sales to associated undertakings on normal trading terms 1.0 1.6
Purchases from associated undertakings on normal trading terms 22.3 25.6
Amounts due from associated undertakings (including loans) 4.2 6.4
Amounts due to associated undertakings 0.1 0.4
31 Contingent liabilities
Guarantees to third parties amount to £19.7m (2002: £15.3m). The Group has also guaranteed certain future operating commitments 
of its associated undertaking, Grovehurst Energy Ltd (see note 15).
The Company has guaranteed the gross overdrafts and loans of certain subsidiary undertakings which at 30 April 2003 amounted 
to £123.0m (2002: £147.4m). Other guarantees to third parties amount to £5.0m (2002: £2.9m). The Company has also guaranteed 
certain future operating commitments of its associated undertaking, Grovehurst Energy Ltd.
62 DS Smith Plc Annual Report 2003
Notes to the Financial Statements
continued 63 DS Smith Plc Annual Report 2003
32 Subsidiary undertakings
The Company’ s principal trading subsidiary undertakings as at 30 April 2003 are:
Percentage of issued Country of
ordinary share capital incorporation
held by DS Smith Plc or registration
Packaging
St Regis Paper Company Ltd 100% England
DS Smith (UK) Limited 100% England
Kaysersberg Packaging SAS 100%* France
DS Smith Packaging Poland SA 98%* Poland
T oscana Ondulati SpA 65%* Italy
Çopikas AS 100%* Turkey
Cartón Plástico s.a. 100%* Spain
DW Plastics NV 100%* Belgium
Ducaplast SAS 100%* France
Demes Logistics GmbH & Co KG 100%* Germany
David S. Smith America Inc. 100%* USA
DSS Rapak Inc. 100%* USA
Rapak Asia Pacific (Aust) Pty Ltd 50%* Australia
StePac L.A. Ltd 55%* Israel
Zewathener GmbH 100%* Germany
AA Griggs & Co. Ltd 100%* England
Office Products
Spicers Ltd 100%* England
Spicers (Ireland) Ltd 100%* Ireland
Spicers France SA 100%* France
John Dickinson Stationery Ltd 100% England
John Dickinson Stationery (Ireland) Ltd 100%* Ireland
*Indirectly held by DS Smith Plc.
A complete list of subsidiary companies will be included in the next annual return. 64 DS Smith Plc Annual Report 2003
Year Ended Year Ended Year Ended Year Ended Year Ended
1 May 29 April 28 April 30 April 30 April
1999 2000 2001 2002 2003
£m £m £m £m £m
Turnover
Corrugated and Paper 596.4 630.4 716.9 720.5 747.0
Plastic Packaging 100.2 113.2 146.3 171.9 195.0
Packaging 696.6 743.6 863.2 892.4 942.0
Wholesaling 380.2 419.4 485.0 500.5 495.6
Manufacturing 83.7 74.5 71.4 66.7 59.7
Intra-segment (22.5) (19.8) (20.5) (19.4) (18.3)
Office Products 441.4 474.1 535.9 547.8 537.0
Group Turnover 1,138.0 1,217.7 1,399.1 1,440.2 1,479.0
Operating Profit
Corrugated and Paper 23.9 37.1 51.5 51.2 53.1
Plastic Packaging 8.1 8.5 8.7 12.7 14.7
Packaging 32.0 45.6 60.2 63.9 67.8
Wholesaling 22.5 23.0 24.4 9.7 16.2
Manufacturing (5.6) (0.8) 0.3 (1.6) 4.0
Office Products 16.9 22.2 24.7 8.1 20.2
Group Operating Profit* 48.9 67.8 84.9 72.0 88.0
Associated undertakings* (0.2) (0.2) (0.2) 2.2 2.6
Exceptional items (22.8) (8.5) (4.3) (32.4) (8.5)
Amortisation of intangibles (0.2) (0.6) (1.1) (1.4) (2.2)
Interest* (11.5) (9.9) (12.5) (11.6) (10.9)
Profit before taxation 14.2 48.6 66.8 28.8 69.0
Free cash flow 1.9 21.0 22.8 73.5 60.2
Capital expenditure 53.0 55.3 75.8 74.8 57.4
Depreciation 54.7 57.0 60.4 63.6 62.2
A verage capital employed
1
707.1 692.4 743.1 783.3 775.5
Shareholders’funds 418.1 424.5 446.2 438.9 472.9
Borrowings 154.3 162.4 193.4 195.9 202.3
Return on sales 4.3% 5.6% 6.1% 5.0% 5.9%
Return on average capital employed 6.9% 9.8% 11.4% 9.2% 11.3%
Gearing 36.9% 38.3% 43.3% 44.6% 42.8%
Earnings per share* 9.3p 13.4p 15.1p 14.0p 18.0p
Dividends per share 8.2p 8.5p 8.8p 8.8p 8.8p
Dividend cover 1.1x 1.6x 1.7x 1.6x 2.0x
Net assets per share 130.4p 132.3p 139.1p 136.6p 147.1p
*Before exceptional items and amortisation of intangibles
1
A verage capital employed is defined in note 1 on page 44.
Following a change in management responsibilities, the prior year’s results of the Group’s Packaging Services Management business have been
reclassified from Plastic Packaging to Corrugated and Paper.
Five Year Financial Summary 65 DS Smith Plc Annual Report 2003
Notice is hereby given that the Annual
General Meeting of DS Smith Plc will be
held at the Great Eastern Hotel, Liverpool
Street, London EC2M 7QN, on Wednesday
3 September 2003 at 12 noon to consider and,
if thought fit, pass the following resolutions,
of which resolutions 1 to 11 will be proposed
as ordinary resolutions and resolutions
12 and 13 will be proposed as special
resolutions:
1 T o receive and adopt the Directors’
Report, the Auditor’s Report and
financial statements for the year 
ended 30 April 2003.
2 T o declare a final dividend on the
ordinary shares.
3 T o approve the Report on Remuneration.
4 T o re-elect Mr P M Johnson as a Director
of the Company .
5 T o re-elect Mr R E C Marton as a
Director of the Company .
6 T o re-elect Mr D R Piette as a Director 
of the Company .
7 T o elect Mr G M Morris as a Director 
of the Company .
8 T o re-appoint KPMG Audit Plc as
Auditor of the Company .
9 T o authorise the Directors to determine
the remuneration of the Auditor.
10 That the provisions of French Section II
of the DS Smith Plc 1999 Executive
Share Option Scheme (“the Scheme”) 
be approved in their current form,
unamended, so that the Company can
continue to grant options under that
Section to eligible employees resident in
France in a tax efficient manner for a
period of 38 months from the date of
the approval.
11 That:
(a) in accordance with Article 6 of the
Articles of Association of the Company,
the Directors be authorised to allot
relevant securities up to a maximum
nominal amount of £9,014,373;
(b) this authority shall expire on 2
September 2008 save that the Company
shall be entitled under such authority to
honour at any time before expiry thereof
any commitment to allot its ordinary
shares which will or might be concluded
wholly or partly after the expiry of such
authority; and
(c) all previous authorities under Section
80 of the Companies Act 1985 be revoked.
12 That:
(a) in accordance with Article 7 of the
Articles of Association of the Company,
the Directors be given power to allot
equity securities for cash;
(b) for the purposes of paragraph (1)(b)
of Article 7 of the Articles of Association
of the Company, the nominal amount 
to which this power is limited (other 
than in connection with a rights issue) 
is £1,609,709;
(c) this power shall expire on 2 September
2008 save that the Company shall be
entitled under such authority to honour
at any time before expiry thereof any
commitment to allot its ordinary shares
which will or might be concluded wholly
or partly after the expiry of such
authority; and
(d) all previous authorities under Section
95 of the Companies Act 1985 be
revoked.
13 That in accordance with Article 11 of the
Articles of Association of the Company
and the Companies Act 1985, the
Company is generally and unconditionally
authorised to make market purchases
(within the meaning of the Companies
Act 1985) of ordinary shares of 10p each
in the capital of the Company in such
manner and on such terms as the
Directors may from time to time
determine provided that:
(a) the maximum number of ordinary
shares hereby authorised to be purchased
is 32,154,047 ordinary shares;
(b) the minimum price which may be paid
for each ordinary share is 10p (exclusive
of expenses payable by the Company);
(c) the maximum price which may be 
paid for each ordinary share is an amount
equal to 105% of the average of the
middle market quotations for an ordinary
share as derived from the London Stock
Exchange Daily Official List for the five
business days immediately preceding the
date of any such purchase (exclusive of
expenses payable by the Company); and 
(d) the authority hereby conferred shall,
unless previously varied, revoked or
renewed, expire on 2 March 2005 or,
if earlier, at the conclusion of the 
next Annual General Meeting of the
Company, save that the Company shall
be entitled under such authority to make
at any time before the expiry thereof
any contract to purchase its ordinary
shares which will or might be concluded
wholly or partly after the expiry of
such authority .
By Order of the Board
Carolyn Cattermole
Secretary
4-16 Artillery Row
London SW1P 1RZ
15 July 2003
Notice of Annual General Meeting 2003 66 DS Smith Plc Annual Report 2003
Notes
(i) Only those members registered in the
Register of Members of the Company 
as at 6 pm on 1 September 2003 shall be
entitled to attend and vote at the Meeting
in respect of the number of shares
registered in their names at that time.
(ii) A member entitled to attend and vote at
the Meeting is entitled to appoint one or
more Proxies to attend and, on a poll, to
vote instead of him. A Proxy need not 
be a member of the Company .
(iii) A Form of Proxy is enclosed. T o be
effective, Forms of Proxy must reach the
Registrars at the address shown on the
Form not later than 48 hours before the
time of the Meeting. Completion and
return of the Form will not, however,
prevent a member from attending and
voting at the Meeting.
(iv) Copies of the Directors’ service 
contracts with the Company or any 
of its subsidiaries, other than contracts
expiring, or terminable by the employing
company without compensation, within
one year, will be available for inspection
at the registered office of the Company
during normal business hours on any
weekday (Saturdays, Sundays and Public
Holidays excepted) and at the place of
the Meeting, from 11.45 am until the
conclusion of the Meeting.
(v) Mr P M Johnson is Chairman of the
Audit Committee and a member of the
Remuneration Committee of the Board.
Mr R E C Marton is a member of the
Audit and Remuneration Committees 
of the Board. Mr D R Piette is a member
of the Remuneration Committee of the
Board. Mr G M Morris is a member 
of the General Purposes Committee 
of the Board.
(vi) The Chairmen of the Audit,
Remuneration and Nomination
Committees will be available to answer
relevant questions at the Meeting.
Explanatory notes on the resolutions
Resolution 1:
Report and financial statements
The Directors present to shareholders at 
the AGM the Reports of the Directors and
Auditor and the financial statements of the
Company for the year ended 30 April 2003.
These are contained in the Annual Report.
Resolution 2: 
Declaration of a final dividend
Final dividends declared by shareholders 
must not exceed the amount recommended 
by the Directors. By passing Resolution 2,
shareholders will declare a final dividend. The
amount of the final dividend recommended by
the Directors is 6.0p net per ordinary share.
Resolution 3:
Approval of Report 
on Remuneration
As required by the Directors’ Remuneration
Report Regulations 2002, shareholder
approval is sought for the Report on
Remuneration set out on pages 28 to 34.
Resolutions 4-7: 
Re-election of Directors
The Articles of Association of the Company
require that all Directors retire at least once
every three years but are eligible to submit
themselves for re-election by the shareholders.
The Directors who retire at each AGM 
are those who would otherwise have served
for over three years by the date of the
following AGM.
Mr Johnson, Mr Marton and Mr Piette will
retire and, being eligible, offer themselves for
re-election at this year’s AGM.
The Articles of Association of the Company
require that a Director appointed since the
previous AGM shall be subject to election by
the shareholders. Mr Morris was appointed 
a Director with effect from 5 November 2002
and, in accordance with the Articles, retires
from office at the Meeting. Being eligible he
offers himself for election.
A short biography of each Director , including
those seeking re-election and election, appears
on page 25 of the Annual Report. Mr Morris
has a service contract with the Company
which can be terminated by the Company 
on giving 12 months’ written notice.
Resolutions 8 and 9: 
Re-appointment of Auditor
The auditor of a company must be
re-appointed at each general meeting at
which accounts are presented. Resolution 8
proposes the re-appointment of the Company’ s
existing Auditor, KPMG Audit Plc, until 
the next AGM. Resolution 9 gives authority
to the Directors to determine the Auditor’s
remuneration.
Resolution 10:
Re-approve French Section II to the
Executive Share Option Scheme 
The Company has been advised that under
the applicable French legislation, shareholder
approval needs to be obtained if the Company
wishes to continue to grant options under
French Section II of the DS Smith Plc 1999
Executive Share Option Scheme (the
“Scheme”) to eligible employees (as defined
in the rules of the Scheme) resident in 
France. Accordingly, while no amendment 
is proposed to French Section II which was
formally approved by Shareholders on 8
September 1999, shareholder approval is
being sought to allow grants of options
under the Section for a period of 38 months
from the date of the resolution so that any
options granted will qualify for beneficial 
tax treatment.
Resolution 11:
Directors’ authority to allot shares
Authority was granted to the Directors at 
last year’s AGM, pursuant to Section 80 of
the Companies Act 1985, to allot shares in
the Company without the prior consent 
of shareholders for a period of five years.
Resolution 11, which will be proposed as an
ordinary resolution, will, if passed, give the
Directors renewed authority to allot shares up
to a maximum nominal value of £9,014,373
(representing 28 per cent of the issued share
capital of the Company at 25 June 2003).
Other than in connection with any exercise 
of options under the Group’s employee 
share option schemes, the Directors have no
present intention of exercising the allotment
authority proposed by this Resolution. The
authority will expire on 2 September 2008,
except in so far as commitments to allot
shares have been entered into before that date.
It is the present intention of the Directors to
seek a similar authority annually .
Notice of Annual General Meeting 2003
continued Resolution 12: 
Directors’ power to disapply 
pre-emption rights
This Resolution, which will be proposed as a
special resolution, supplements the Directors’
authority to allot shares in the Company
(proposed by Resolution 11).
Section 89 of the Companies Act 1985
requires a company proposing to allot equity
securities for cash to offer them first to
existing shareholders pro rata to their existing
shareholdings. Authority was granted to 
the Directors at last year’s AGM and the
Directors propose to seek shareholders’
approval to renew this authority, pursuant 
to Section 95 of the Companies Act 1985,
to allot such securities, notwithstanding 
the requirement imposed by Section 89,
in two cases:
– in connection with a rights issue; and 
– allotments of shares for cash up to a total
nominal value of £1,609,709 (representing
5 per cent of the Company’s issued share
capital at 25 June 2003). This gives the
Directors flexibility to take advantage of
business opportunities as they arise,
whilst the 5 per cent limit ensures that
existing shareholders’ interests are
protected, and is in line with guidelines
issued by institutional investors’ bodies.
This authority will expire on 2 September
2008, except in so far as commitments to allot
shares have been entered into before that date.
It is the present intention of the Directors to
seek a similar authority annually .
Resolution 13:
Company’ s authority to 
purchase shares
This Resolution, which will be proposed 
as a special resolution, seeks to renew 
the existing authority for the Company 
to purchase its own shares in the market.
This authority gives the Company greater
flexibility in managing its capital resources.
The Directors have no specific intention of
using this authority and would do so only
when, in the light of market conditions, they
believed that the effect of such purchases
would be to increase earnings per share, and
that the purchases were in the interests of
shareholders generally . The Directors would
also give careful consideration to gearing
levels of the Company and its general
financial position. The purchase price would
be paid out of distributable profits. Any
shares purchased under this authority will 
be cancelled and the number of shares in
issue will be reduced accordingly .
Resolution 13 specifies the maximum 
number of shares which may be purchased
(representing 10 per cent of the Company’s
issued share capital at 30 April 2003), the
minimum and maximum prices at which they
may be bought and when the authority will
expire, reflecting the requirements of the
Companies Act 1985 and the Listing Rules 
of the UK Listing Authority .
The maximum price at which the shares may
be purchased is 5 per cent above the average
of the middle market values of those shares
for the five business days before the purchase
is made.
Purchases of shares under the proposed
authority are required by the UK Listing
Authority to be made in compliance with 
The Model Code for securities transactions
by directors of listed companies. Accordingly,
the Company would not exercise the
authority at a time when the Directors would
be precluded from dealing in the Company’s
shares. Specifically, purchases would not be
made within the two months preceding the
announcement of the interim or final results.
This proposal should not be taken as an
indication that the Company would purchase
shares at any particular price or to imply any
opinion on the part of the Directors as to the
market or other value of the Company’s
ordinary shares.
The total number of ordinary shares that are
under option through the Company’s share
option schemes at 25 June 2003 (being the
latest practicable date prior to publication of
this notice) is 15,313,867 of which 14,353,167
are options over unissued ordinary shares.
The proportion of issued ordinary share
capital that the options over unissued
ordinary shares represented on this date was
4.46% and the proportion of issued ordinary
share capital that they will represent if the
full authority to purchase shares (existing
and being sought) is used is 4.95%.
The authority will expire on 2 March 2005 
or at the conclusion of the next AGM
(whichever is the earlier). It is the present
intention of the Directors to seek a similar
authority annually .
Important notes about the 
Annual General Meeting
Date
Wednesday 3 September 2003.
Location
Great Eastern Hotel, Liverpool Street,
London EC2M 7QN.
Timing
The Meeting will start promptly at 12 noon
and shareholders wishing to attend are
advised to be in the venue no later than
11.50 am. The reception area will be open
from 11.30 am, from which time refreshments
will be served.
Travel information
See map on the reverse of Admittance Card
for the location of the Great Eastern Hotel,
and the nearest underground and railway
stations. The venue is less than 5 minutes’
walk from Liverpool Street station. There 
are no car parking facilities at the venue.
Admission
Please bring the Admittance Card with you
to the Meeting. Y ou may be asked to show
the Card before being admitted to the venue.
Shareholders and proxy holders may also be
required to provide proof of identity . The
registration process may take longer without
these documents.
Facilities
The Great Eastern Hotel has wheelchair
access. If you are planning to come to the
Meeting and are a wheelchair user, it would
be helpful if you would telephone the venue
in advance on 020 7618 5618.
Enquiries and questions
Shareholders who intend to ask a question
related to the business of the Meeting are
asked to provide their name, address and
question at the Registration desk. Staff
from Lloyds TSB Registrars will be on 
hand to provide advice and assistance.
67 DS Smith Plc Annual Report 2003 68 DS Smith Plc Annual Report 2003
Financial diary
26 June 2003
Preliminary announcement of results 
for the year ended 30 April 2003
13 August 2003
Ex-dividend date for final dividend
3 September 2003
Annual General Meeting
16 September 2003
Payment of final dividend
1 0 December 2003*
Announcement of interim results 
for the six months ended 31 October 2003
4 February 2004*
Ex-dividend date for interim dividend
9 March 2004*
Payment of interim dividend
24 June 2004*
Preliminary announcement of results 
for the year ended 30 April 2004
*Provisional date
Company website
The Company’s website at
www.dssmith.uk.com contains the latest
information for shareholders including 
press releases and an updated financial diary .
Email alerts of the latest news, press releases
and financial reports about DS Smith may 
be obtained by registering for the Email 
news alert service on the website.
Share price information
The latest price of the Company’s ordinary
shares is available from the FT Cityline
service. Calls within the UK are charged 
at 60 pence per minute at all times. The
telephone number is 0906 843 4044. Alternatively 
click on www.londonstockexchange.com.
DS Smith’s ticker symbol is; SMDS. It is
recommended that you consult your financial
adviser and verify information obtained 
from these services before making any
investment decision.
Registrar
Please contact our Registrar at the address
below to advise change of address or for any
enquiries relating to dividend payments, lost
share certificates or other enquiries relating
to share registration.
The Registrar provides on-line facilities for
shareholders to check their holdings and
update their details at www .shareview .co.uk.
Shareholders who wish to have their dividends
paid directly into a bank or building society
account should contact the Registrar. In
addition, the Registrar is now able to pay
dividends in 35 foreign currencies. This process
is called ‘TAPS’ and is available at a charge of
£2.50. This is deducted from each dividend
payment to cover the costs involved. Please
contact the Registrar to request further
information.
Share dealing service
Cazenove operates a low cost share dealing
service for private investors who wish to 
buy or sell ordinary shares of the Company .
This is an execution only service and further
details can be obtained from The Share
Dealing Service, Cazenove & Co. Ltd,
20 Moorgate, London EC2R 6DA.
Telephone 020 7606 1768. Please note 
there is a minimum level of £500 for
investment in shares using this service.
Registered office and advisers
Secretary and Registered Office
Carolyn Cattermole
4-16 Artillery Row
London SW1P 1RZ
Registered in England No: 1377658
Auditor
KPMG Audit Plc
8 Salisbury Square
London EC4Y 8BB
Solicitors
Allen & Overy
One New Change
London EC4M 9QQ
Principal Clearing Bank
The Royal Bank of Scotland
135 Bishopsgate
London EC2M 3UR
Stockbrokers
Cazenove & Co. Ltd
20 Moorgate
London EC2R 6DA
and
Credit Lyonnais Securities Europe
Broadwalk House
5 Appold Street
London EC2A 2DA
Investment Bank
UBS
2 Finsbury A venue
London EC2M 2PP
Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex BN99 6DA
Tel for UK queries 0870 600 3970
Tel for overseas queries +44 121 415 7047
Shareholder Information