Carillion plc
Annual Report and Accounts 2003
Aligning our people and strengths
with growth markets
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Carillion plc Annual Report and Accounts 2003    > Aligning our people and strengths with growth markets COR10304
Carillion plc
Birch Street 
Wolverhampton WV1 4HY 
United Kingdom
Registered number: 3782379
T +44 (0)1902 422431
F +44 (0)1902 316165
www.carillionplc.com 01 Our vision, strategy and values
02 Financial highlights
03 Chairman’s Statement
04 Chief Executive’s Review
08 Operating and Financial Review
14 Corporate Social Responsibility
18 The Board of Directors
20 Corporate Governance Report
26 Remuneration Report
34 Report of the Directors
36 Statement of Directors’ Responsibilities 
37 Independent Auditors’ Report 
to the members of Carillion plc
38 Consolidated Profit and Loss Account
39 Consolidated Balance Sheet
40 Company Balance Sheet
41 Consolidated Cash Flow Statement
42 Consolidated Statement of Total 
Recognised Gains and Losses
42 Reconciliation of Movements in 
Consolidated Equity Shareholders’ Funds
43 Notes to the Financial Statements
73 Five Year Review
74 Principal subsidiaries and joint ventures
75 Principal joint arrangements
76 Shareholder Information
Designed and produced by Carnegie Orr +44 (0)20 7610 6140.
www.carnegieorr.com
Printed on a paper that is manufactured using 50% recycled de-inked fibre 
and 50% TCF (totally chlorine free) pulp, and is sourced from sustainable forests. 01 Carillion plc Annual Report & Accounts 2003
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Our strategy is to deliver sustainable
profitable growth through:
Our values
growing Business Services and 
PPP Investments organically 
and by acquisition
maintaining a strong and selective
Construction Services capability
focused on higher added value
contracts for long-term customers
developing and marketing integrated
solutions tailored to our customers’
needs, including project finance,
design and construction, maintenance
and life-time asset management.
Openness
Mutual dependency
Collaboration
Professional delivery
Focus on sustainable 
profitable growth
Innovation
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Our vision is to be the leader in
delivering integrated solutions for
infrastructure, buildings and services. 02 Carillion plc Annual Report & Accounts 2003
Financial highlights
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Turnover
2002: £1,974.4m
£1 ,977 .6m 
Profit before tax*
2002: £50.2m
£50.8m 
Earnings per share*
2002: 16.6p
16.8p
Forward order book and 
framework contracts
2002: £5.0bn
£5.0bn
Full year dividend per share
2002: 4.8p
6.75p
Profit before tax*
£millions
Full year dividend per share
pence
Total turnover
£millions
Earnings per share*
pence
1,977.6 1,974.4
1,889.8
1,909.0
1,802.3
99 00 01 03 02 99 00 01 03 02
39.5
38.5
45.3
50.2
50.8
99 00 01 03 02
4.0
4.12
4.4
4.8
6.75
5.05
1.7
99 00 01 03 02
12.6
13.0
14.0
16.6
16.8
Profit before tax, goodwill amortisation
and exceptional items slightly ahead of
2002 despite the cost overrun on
Nottingham Express Transit and
substantial increases in pensions 
and insurance costs.
Profit strongly cash-backed with net cash
at 31 December 2003 of £75.8 million.
Ordinary dividend up 5.2% to 5.05
pence per share.
Additional dividend of 1.7 pence per
share from first PPP equity sale.
Strong order book maintained with
pipeline of probable new orders of 
£2.5 billion. 
* Before exceptional items and goodwill amortisation. 03 Carillion plc Annual Report & Accounts 2003
I am pleased to report that Carillion met the objective in my
2003 interim report to shareholders of delivering full-year profit
before tax, goodwill and exceptional items of not less than the
£50.2 million achieved in 2002, despite the cost overrun on 
the Nottingham Express Transit (NET) project and substantial
unavoidable increases in pensions and insurance costs.
The Group also made an exceptional net profit of £11.2 million
on its first PPP equity sale, the first in a planned programme of
such sales to create a sustainable new profit stream. One third 
of the profit from this sale is being returned to shareholders by
way of a dividend. The Board’s current intention is to continue 
to return a proportion of the profit from future equity sales to
shareholders, whilst re-investing in new PPP projects to generate
further returns.  
The Group’s performance in 2003 demonstrates the benefits 
of its consistent and effective strategy for growth and its
relentless focus on cost reduction and performance improvement.
Equally, the Group’s continued prosperity stems from the skills
and commitment of all our people and the culture of success
that has been developed throughout the business. The Board
recognises that our people are an important differentiator and
we are grateful for the contributions made by everyone in
Carillion to its success.
The risk profile of the Group’s activities has changed significantly
over the last three years, following the introduction of new risk
management criteria that govern project selection, bidding and
delivery. This resulted in the Group withdrawing in 2002 from
bidding for further light rapid transit projects such as NET, because
the procurement model for such projects does not meet these
new criteria. Today, the Group’s UK civil engineering activities are
focused exclusively on heavy rail and major road projects, where
it has a track record of delivering more reliable earnings. 
The leading role the Group has taken on Corporate Social
Responsibility (CSR) has also made a significant contribution to
risk management as well as to the value of the Carillion brand.
This was recognised in 2003 when Carillion received Business 
in the Community’s (BITC) ‘Company of the Year’ award for
excellence in CSR and was ranked in the top quartile of BITC’s
first CSR Index. This Index attracted 122 entries, including many
of the UK’s leading companies. 
The Group’s commitment to Health and Safety remains
paramount and we have continued to work hard to improve 
our own performance and that of our industry by working 
with others to develop and implement best practice. In 2003, 
the Group’s Accident Frequency Rate was down to its lowest 
ever level, a performance that we expect to rank with the 
best in our industry. This was overshadowed by the tragic rail
accident on the West Coast Main Line in February 2004, 
in which four of our employees were killed and three injured. 
While this accident remains the subject of formal independent
investigations, it would be inappropriate to comment on it.
However, the deep sense of shock and sadness felt by all our
people throughout the Group has redoubled our commitment 
to Health and Safety. Our challenge is to continue to turn this
absolute commitment into further real and measurable progress,
so that our people can work safely wherever they are.
In line with the confidence I expressed in the Report and
Accounts for the year ending 2002, I can now report that
Carillion has already put in place the measures necessary to
report against the recommendations of the Higgs review as
adopted in the revised Combined Code, which will come into
force for the financial year ending 31 December 2004. 
The Group has continued to develop strong positions in its key
growth markets to maintain its order book at around £5 billion
and build its largest ever pipeline of probable orders worth
around £2.5 billion, despite the loss of valuable rail maintenance
contracts following Network Rail’s surprise decision to take rail
maintenance in-house. Even without this maintenance work, 
the Group will continue to have a substantial rail infrastructure
business with opportunities for growth in the UK and in
Scandinavia, following the acquisition of Swedish Rail Systems 
in 2003. 
The Group has also significantly strengthened its ability to deliver
its strategy for growth, having completed its restructuring to
create three new market focused businesses – Health, Transport
and Business Services – and disposed of four more non-core
businesses.
Therefore, with its strong order book and focus on growing
markets in which it holds well-balanced positions, the Group
expects to deliver healthy earnings growth in 2004 and beyond. 
The Board is recommending the payment of a final dividend 
of 3.475 pence per share, making the total ordinary dividend 
for the year 5.05 pence, an increase of 5.2 per cent on 2002. 
In addition, a dividend of 1.7 pence per share will be paid in
respect of the exceptional profit arising from the first sale of 
PPP equity. The final ordinary dividend and special dividend 
will be paid together on 25 June 2004 to shareholders on the
register at close of business on 30 April 2004.
Chairman’s Statement
Sir Neville Simms
Chairman, 10 March 2004
With its strong order book and 
focus on growing markets in which 
it holds well balanced positions, the
Group expects to deliver healthy
earnings growth in 2004 and beyond. 04 Carillion plc Annual Report & Accounts 2003
The basis for our success is our strategy for sustainable 
long-term growth, supported by our ongoing drive for cost
reduction and performance improvement. This not only enabled
us to deliver profit before tax, goodwill and exceptional items 
of £50.8 million, backed by strong cash generation, but also
positions the Group for further growth in 2004 and beyond,
despite Network Rail’s decision to take all rail maintenance
contracts in-house. 
Strong cash management resulted in a substantial second half
cash inflow of almost £100 million and net cash at the year-end
of £75.8 million. 
Nottingham Express Transit (NET) 
We have completed the infrastructure contract for NET and the
tram system is now fully operational and open to the public. Returns
on our £3.4 million (12.5 per cent) equity interest in this project
are expected to be in line with our original investment model.
A sustainable new profit stream from PPP equity sales 
In addition to ordinary profit before tax, goodwill and exceptional
items of £50.8 million, we made an exceptional tax-free net
profit of £11.2 million on the sale of our £4.1 million equity
interest in the Darent Valley Hospital PPP project. The proceeds
from this sale supported the Directors’ previous valuation of the
Group’s total PPP equity portfolio of approximately £115 million.
We plan to continue selling our PPP equity stakes in mature
projects and the Board’s current intention is to continue to 
return a proportion of the profits to shareholders, whilst 
re-investing in new PPP projects to generate further returns. 
Further investment of between £20 million and £30 million is
already planned in seven new projects, which have recently
reached financial close or for which we are the preferred bidder.
Re-cycling our PPP equity stakes in this way will create a new
sustainable profit stream for the Group, which we expect to 
be tax-free in 2004 and 2005, given the Group has substantial
capital tax losses and can claim tax relief by way of substantial
shareholder exemption on certain projects.
Rail maintenance
Network Rail’s announcement in October 2003 that all rail
maintenance contracts are to be taken in-house by September
2004 came as a complete surprise to the industry, given earlier
public assurances from Network Rail that it would not do 
this. As previously announced, we estimate that the loss of 
rail maintenance contracts will reduce our operating profit by
around £7 million in 2004 and by £15 million in 2005. However,
the precise effects will depend on the timing and terms under
which contracts are transferred to Network Rail, which remain
subject to negotiations with Network Rail.
Chief Executive’s Review
A number of significant achievements 
and events influenced our performance 
in 2003 and shaped the outlook for the
Group going forward.
John McDonough
Chief Executive 05 Carillion plc Annual Report & Accounts 2003
Cost reduction and performance improvement
The pursuit of cost reduction and performance improvement is
fundamental to the long-term success of our business. In 2003,
unavoidable increases in pensions and insurance costs of 
£18 million were covered by cost reduction. Our drive to do
things ‘smarter, better, faster’ will play a major part in helping 
us to achieve our target of improving the Group’s operating
margin by one per cent over the next three years. 
Health and Safety
In 2003, the Group’s Accident Frequency Rate reduced by 
24 per cent to its lowest ever level of 0.34 (accidents reportable
under the ‘Reporting of Injuries, Diseases and Dangerous
Occurrences Regulations’ per 100,000 hours), which we expect
to rank with the best in our industry. However, as the Chairman
has commented in his statement, this has been overshadowed 
by the deep sense of shock and sadness felt by all our people
following the tragic rail accident on the West Coast Main 
Line in February 2004. A summary of our Health and Safety,
performance and programme for continuous improvement can
be found on pages 14 to 17 of this report. As usual, we shall
report in more detail in our 2003 Sustainability Report, which 
will be published in April.
Sustainability
Creating a more sustainable business through understanding,
measuring and improving the impacts we have on society 
and the environment, is not only an important part of risk
management, but a differentiator that is helping us to deliver 
our business objectives and our strategy for growth. A summary
of our programme for sustainable development and our
performance in 2003 can be found on pages 14 to 17 of 
this report. More detailed information will be published in 
our 2003 Sustainability Report in April.
Order book
In 2003, we continued to win work in all our key markets 
and maintained our year-end order book at £5 billion. The
composition of our order book continues to reflect our strategy,
with 70 per cent of the £5 billion now in our growth markets 
of Services and PPP Investments and 70 per cent for 2005 and
beyond. In addition, our pipeline of probable new orders is at 
its highest ever level at around £2.5 billion. 
Restructured for growth 
In 2003, we completed our current restructuring programme 
to improve operational efficiency and accelerate the delivery of
our growth strategy. We have created three major new business
groups – Health, Transport and Business Services – aligned with
our growth markets. Each is driven by the needs of its customers
and capable of delivering fully integrated solutions, from project
finance through design and construction to lifetime maintenance
and facilities management. These three new businesses together
with our Private Finance, Crown House, Building Developments
and International Regional businesses are supported by common
shared services and a lean head office function. 
The acquisition of Swedish Rail Systems in June 2003 for 
£2.9 million has enhanced prospects for growth in our Transport
business and the disposal of four more non-core businesses –
Expanded Piling, Markfield Insurance and two materials testing
facilities in the Middle East, for a total of £7.0 million – will help
us focus senior management time and resources on our growth
market sectors. 
1
2
1 We are creating some of the most
exciting and effective spaces in the
world. At the Great Western Hospital 
in Swindon, we have integrated our
skills including project finance, design,
construction, maintenance and life-time
asset management to produce a state-
of-the-art hospital that is also one of
the UK’s most sustainable buildings.
2 Carillion seeks to build relationships
with the communities in which it
operates. We do this through working
with national and local environmental
and community organisations. Pictured
here are pupils from the Prince Albert
School in Birmingham on a work
experience visit. 06 Carillion plc Annual Report & Accounts 2003
Chief Executive’s Review
continued
Markets and outlook
Transport 
In transport we are focused on the heavy rail and roads markets.
Capital investment in the UK’s heavy rail network is forecast to
grow by between 5 per cent and 10 per cent per annum over
the next three years. The outlook for enhancement projects and
track renewals therefore remains positive. In particular, further
investment in West Coast Route Modernisation, which is
expected to be at least £5 billion, and being selected as a
framework contractor by Network Rail for its new £2.5 billion
track renewal programme, will continue to create significant
opportunities for our rail business. 
We will continue to have a strong presence in UK rail maintenance,
because our contract to maintain the Channel Tunnel Rail Link,
worth up to £120 million over 10 years, is unaffected by
Network Rail’s recent decision on maintenance. Following the
acquisition of Swedish Rail Systems, we expect significant
opportunities for growth in Scandinavia. For example, the
Swedish rail authorities plan to outsource an additional 
£500 million per annum of infrastructure work by 2008. 
The outlook for road construction and maintenance is continuing
growth. In construction, we are targeting the £11 billion
programme of projects being procured under the Government’s
Early Contractor Involvement and PPP initiatives and were
awarded two major projects worth nearly £200 million in 
2003. In maintenance, we are seeking to increase our 11 per
cent share of the £800 million a year Highways Agency market,
by expanding the range of services we provide. We also continue
to target large maintenance contracts for Local Highway
Authorities, a market worth around £800 million a year and
growing at 5 per cent per annum. Our success in winning a
major contract for Surrey County Council in 2003 has been
followed by a similar contract for Warwickshire County Council,
early in 2004, together worth over £240 million. 
Health
The UK health market is set to grow rapidly as a result of the
Government’s commitment to increase annual spending on
health by some £40 billion to £105 billion by 2008. Within 
this market we are targeting five specific sectors – PPP hospitals,
Independent Sector Treatment Centres (ISTC), Local Improvement
Finance Trust (LIFT) projects, ProCure 21 and non-PPP facilities
management. 
PPP hospitals will continue to be one of our most important
growth sectors, with over 20 further concessions for major
hospitals, worth around £15 billion, due to be let as early as
2005. We are a market leader in this sector and expect to build
on the progress we made in 2003, which included reaching
financial close on our sixth UK hospital and becoming the
Our Transport business is one of the UK’s leading providers 
of road and rail infrastructure services.
Carillion was the most successful contractor in the UK roads
sector in 2003, winning long-term maintenance contracts for 
the Highways Agency and Surrey County Council with a
combined value of nearly £400m and a £65m Early Contractor
Involvement contract for the Highways Agency to upgrade 
the A74 to motorway standard in Cumbria. This success has
continued in 2004 with the award of a maintenance contract 
for Warwickshire County Council and financial close on the 
A249 PPP project, together worth over £240m.
Aligning our people and strengths with growth markets
Transport
Our Health business is one of the UK’s leading providers of
integrated infrastructure and services solutions and is focused 
on five market sectors – PPP hospitals, ProCure 21, Independent
Sector Treatment Centres (ITSC), Local Improvement Finance 
Trust (LIFT) projects and non-PPP facilities management
In 2003, we reached financial close on our sixth UK PPP hospital
and became preferred bidder for a further UK hospital and for
Canada’s first two PPP hospitals – four hospitals together worth
around £2.3bn. We also reached financial close on our first ISTC,
became preferred bidder for our first LIFT project and were
selected as a framework contractor for ProCure 21.
Aligning our people and strengths with growth markets
Health 07 Carillion plc Annual Report & Accounts 2003
preferred bidder for a further UK hospital and for Canada’s first
two PPP hospitals. These four hospitals are together worth
around £2.3 billion.
With planned new investment of some £12 billion in ISTCs, LIFT
and ProCure 21 projects between 2004 and 2008, we shall be
seeking to build on the presence we have established in these
sectors. In 2003, we reached financial close on our first ISTC,
became preferred bidder for our first LIFT project, were selected
by the NHS as one of its principal partners for ProCure 21 and
were awarded our first ProCure 21 contract. Non-PPP facilities
management continues to be an important growth sector for us.
With annual NHS expenditure of around £1 billion in this sector,
we will be seeking to add to the four long-term contracts we
already hold, worth around £42 million per annum. 
Business Services
Our Business Services business is focused on two UK markets –
private sector facilities management and commercial building. 
In commercial building, we continue to target the offices, retail
and urban high-rise residential sectors. The downturn in the
South East, particularly in office developments, continues to 
be offset by buoyant markets in the Midlands and North.
Consequently, the order book is healthy and we expect growth 
in our commercial building activities in 2004. 
In facilities management we are targeting a market worth around
£5.5 billion a year and growing at 5 per cent per annum. The
acquisition of Citex Management Services in 2002 considerably
strengthened our presence and capability in this market. We
therefore expect to build on the success we had in 2003 in
winning a £90 million contract for Telewest Broadband and 
grow this area of our business in 2004. 
Crown House, our mechanical and electrical engineering business,
made good progress in 2003. It achieved an overall breakeven
performance on substantially reduced turnover and it exited the
year trading profitably with a very strong order book. Our
Building Developments business once again delivered excellent
results and we expect this performance to continue in 2004. 
Overall, the outlook for our International Regional Businesses
remains positive. In Canada, we expect further growth in our
Business Services and PPP investment activities, following the
good progress made in 2003. In the Middle East, we expect 
our traditional construction market to remain strong and to 
grow our facilities management business. In France, trading
conditions in 2003 were the most positive for several years 
and this is expected to continue in 2004. 
Therefore, the outlook for the Group is encouraging and 
we expect to deliver healthy growth in 2004 and beyond.
John McDonough
Chief Executive, 10 March 2004
In Business Services we have brought together our Building and
Services businesses to improve our ability to offer customers 
cost-effective, integrated solutions.
Our Building business is a UK leader focused on the retail, 
high-rise urban residential and office sectors of the commercial
building market and on PPP construction. Our Services business
provides integrated facilities management services for over
500,000m
2
of public and private sector estate. Its customers
range from blue-chip companies, including Coca-Cola, HBOS
and Microsoft to Government Departments, including the NHS,
Ministry of Defence and the Royal Parks.
Aligning our people and strengths with growth markets
Business Services 08 Carillion plc Annual Report & Accounts 2003
Growth in Business Services, particularly rail, enabled us to
recover strongly in the second half of the year to deliver profit
before tax, goodwill amortisation and exceptional items of 
£50.8 million, despite the cost overrun on the Nottingham
Express Transit project. At the same time, increases in pension
and insurance costs of approximately £18 million were offset by
savings arising from the Group’s on-going programme of cost
reduction and performance improvement.
Interest and cash 
Group net interest payable increased to £0.5 million from a
credit of £0.6 million in 2002, largely as a result of a first-half
cash outflow due to advance payments on a number of our
large PPP contracts unwinding as these reached completion.
However, late in the second half there was a substantial cash
inflow from operating activities due to a strong performance 
in Business Services, resulting in a net operating cash inflow 
for the year of £84.2 million. In addition, there were cash
receipts of £16.0 million from re-financing the Darent Valley
PPP concession and subsequent disposal of the Group’s equity
interest in this project and £6.4 million from the disposal of
four non-core businesses. 
Capital expenditure amounted to £15.6 million and £14.9 million
of loan advances were made to PPP joint ventures. Corporate 
tax was a net receipt of £0.5 million due largely to refunds of 
tax overpaid in prior years. Equity dividend payments amount to
£10.1 million. Net cash at the year-end increased by £70.5 million
to £75.8 million, excluding finance leases of £15.6 million.
Exceptional items
The net exceptional charge of £23.2 million comprises three
main items. An exceptional net profit of £11.2 million was
made on the sale of our £4.1 million equity interest in the
Darent Valley Hospital PPP concession. A total provision of
£33.1 million has been made due to the impairment of
goodwill resulting from Network Rail’s decision to take all rail
maintenance work in-house. Maintenance work represented
the majority of the business of GT Railway Maintenance
(GTRM) when we acquired 49 per cent of that company in
1996 and the remaining 51 per cent in 2001. Accordingly, the
goodwill arising on these acquisitions has been written down.
A net book loss of £1.3 million arose from the disposal of four
non-core businesses.
Goodwill amortisation
The increase in goodwill amortisation of £1.1 million to £3.8 million
mainly reflects a full-year charge for the goodwill arising from the
acquisition of Citex Management Services in September 2002. 
Taxation
The Group’s effective rate of tax on profit before exceptional items
and goodwill amortisation fell to 28 per cent in 2003. This is below
the UK standard rate of tax as we continued to access losses for
which deferred tax assets had not previously been recognised. 
Earnings per share
Earnings per share before exceptional items and goodwill
amortisation were 16.8 pence compared to 16.6 pence in 2002.
Acquisitions and disposals
In June 2003, the Group acquired the entire share capital 
of Swedish Rail Systems Entreprenad (SRSE), Sweden and
Norway’s largest private sector rail infrastructure contractor. 
The consideration amounted to £2.9 million, which represented
the net asset value of SRSE and therefore no goodwill arose on
the acquisition. The disposal of four more non-core businesses 
in 2003 generated proceeds of £7.0 million and a net profit of 
£4.2 million, before writing back goodwill previously written off
to reserves of £5.5 million.
Operating and Financial Review
A strong second half performance
enabled us to deliver pre-tax profit of
£50.8 million and a net operating
cash inflow of £84.2 million.
Chris Girling
Finance Director 09 Carillion plc Annual Report & Accounts 2003
1
1 The refinancing of Darent Valley
Hospital PPP concession and subsequent
disposal of our equity interest in this
project generated an £11.2 million 
profit for Carillion and reduced costs to
the Dartford and Gravesham NHS Trust
by around £11 million.
2 The new 100,000m
2
Government
Communications Headquarters in
Cheltenham is one of the UK’s largest
PPP projects and an outstanding
example of how we can integrate our
project finance, design and construction
skills to provide a state-of-the-art facility
to meet the most exacting of standards.
2
Pensions 
The Group continues to account for pension costs in accordance
with SSAP 24. A full valuation of the Group’s main defined benefit
pension schemes, the Staff, ‘B’ and Public Sector schemes, was
undertaken at 31 December 2002. The global fall in equity
markets since September 2001 has reduced the funding position
of these principal schemes since the previous full valuation in
2000. At 31 December 2002, the staff scheme had a deficit of
£22 million, the ‘B’ scheme had a surplus of £1 million and the
Public Sector scheme had a deficit of £3 million. As a result of
this funding position, the Group recommenced contributions to
the Staff and ‘B’ schemes, which were also closed to new
members on 31 March 2003. The Group’s pensions cost has
therefore increased by approximately £14 million in 2003.
The transitional disclosures required by Financial Reporting
Standard (FRS) 17 ‘Retirement benefits’ continue to be made by
the Group. On an FRS 17 basis the Group’s various schemes had a
net deficit at the end of 2003 of £76.6 million compared to a net
deficit of £52.9 million in 2002. The increase in net deficit is due
to the adoption of revised actuarial assumptions for life expectancy
and lower bond yields. Had the Group adopted the requirements
of FRS 17, the pensions cost would have been £22.2 million,
compared to the SSAP 24 pension cost of £22.1 million.
A substantial number of Carillion employees are expected to
transfer to Network Rail as a result of its decision to take all
maintenance work in-house. Consequently, an appropriate
proportion of the assets of the Railways Pension Scheme, which
on a SSAP 24 basis is slightly in surplus, will transfer with these
employees. The Group accounts include prepayments to the
Railways Pension Scheme of some £13 million. Details of the
transfer have yet to be finalised, but our objective is for the 
overall effect of the transfer on pensions to be neutral. 
Pre-tax profit increased by 40 per cent primarily because bid 
costs reduced. This increase would have been higher, but profit
from the Darent Valley hospital concession reduced because the
Dartford and Gravesham NHS Trust is receiving its share of the
gain made on re-financing this concession through lower
availability payments.
Construction of the new Government Communications
Headquarters was completed within budget, three months 
early in June 2003, and this concession is operating successfully. 
£67.5m
Turnover (2002: £61.6m)
£8.6m
Operating profit* (2002: £7.8m)
£3.5m
Pre-tax profit** (2002: £2.5m)
£3.2m
PPP net bid costs (2002: £4.5m)
Reporting Segments
Investments
In this segment we report the equity returns on our investments
in Public Private Partnership (PPP) projects.
* Before goodwill amortisation of £0.1m (2002: nil)
** Before exceptional profit of £11.2m (2002: nil) Annual Report & Accounts 2003
In November 2003, the Group disposed of its £4.1 million 
equity shareholding in the Darent Valley Hospital concession for
£5.2 million. The disposal also crystallised as profit the £10.8
million of cash received from the refinancing to generate total
proceeds of £16.0 million and a net exceptional profit of 
£11.2 million. No tax was payable on this exceptional profit 
as the Group has substantial capital losses for the purposes 
of taxation. In accordance with HM Treasury Guidelines, the
refinancing gain was shared with the Dartford and Gravesham
NHS Trust, which will receive around £11 million, mainly in the
form of reduced annual payments to the PPP concession company. 
As expected, the flow of PPP projects reaching financial close 
and preferred bidder increased significantly in 2003. We reached
financial close on the £700 million Oxford John Radcliffe Hospital
in December 2003 and during the year were appointed preferred
bidder for five further PPP projects that are expected to generate
construction, maintenance and facilities management work for
the Group worth around £1.8 billion. Our equity investment in
these projects will be between £20 million and £30 million. 
Our preferred bidder successes included four health projects –
the £800 million William Osler and £60 million Royal Ottawa
Hospitals, both in Canada, the new £1 billion Queen Alexandra
Hospital in Portsmouth and the £80 million Birmingham and
Solihull LIFT (Local Improvement Finance Trust) project, involving
the development, construction and provision of facilities
management for primary care facilities. We were also appointed
preferred bidder for the £130 million A249 road improvement
project, which reached financial close early in 2004, and short
listed for a further five projects worth around £2.0 billion.
Operating and Financial Review
continued
3 We continue to work closely with
Network Rail to renew and upgrade the
UK rail network. We are also building
Phase II of the high-speed Channel
Tunnel Rail Link and we have a 10-year
contract to maintain Phase I of the Link.
4 In 2003, we won a 5-year facilities
management contract for Telewest
Broadband worth £90m. The contract
covers 200 business locations from
Dundee to Plymouth. Pictured is our
customer services director Tom Robinson.
3
4
Turnover increased by nearly 14 per cent primarily due to growth
in heavy rail maintenance. Operating profit rose by 31 per cent,
with around half this increase coming from improved margins and
the remainder from higher volumes. The improvement in margins
reflected a positive outcome from final settlements on a number
of old Railtrack debts.
Rail
Carillion Rail continued to perform well in all areas of its
activities, which together account for around £550 million of
turnover in this segment. Its activities for Network Rail include
maintenance of around 20 per cent of its network, major
projects for West Coast Route Modernisation, a wide range of
regional improvement projects, track renewals and specialist
services. Carillion Rail is also constructing Phase II of the Channel
Tunnel Rail Link (CTRL) and has a ten-year contract to maintain
Phase I of the CTRL, which is not affected by Network Rail’s
decision to take its rail maintenance contracts in-house. 
Despite Network Rail’s decision on rail maintenance, we will
continue to have a substantial rail projects, track renewals and
maintenance business with good prospects for growth from
increasing capital investment in the UK rail network and new
opportunities overseas. In 2003, Carillion Rail was selected as
one of Network Rail’s framework contractors to deliver its new
£2.5 billion, five-year track renewal programme and continues 
to be well positioned to benefit from further substantial
investment in the West Coast Route Modernisation project.  
The acquisition of Swedish Rail Systems Entreprenad (SRSE) in
June 2003 provides access to the growing private sector rail
market in Scandinavia. Sweden in particular offers good
opportunities for growth as it plans to outsource all rail
infrastructure work to the private sector by 2008, taking the
current value of this market from around £100 million per
annum to £600 million per annum. 
10 Carillion plc
£933.5m
Turnover (2002: £821.7m)
£51.1m
Operating profit* (2002: £39.0m)
5.5%
Margin (2002: 4.7%)
£1.3m
PPP net bid costs (2002: £0.7m)
Business Services
In this segment we report the results of our activities in rail
infrastructure, roads maintenance and facilities management 
and support services. 
* Before exceptional operating charges of £33.1m (2002: Nil)
and goodwill amortisation of £3.6m (2002: £2.6m) 11 Carillion plc Annual Report & Accounts 2003
5 As part of our long-term road
maintenance contracts for the 
Highways Agency and Local Authorities,
we provide frontline incident support
services 24 hours a day, 365 days a year.
5
Road Maintenance 
Our roads maintenance business, which is focused on 
long-term maintenance contracts for the Highways Agency 
and large contracts for Local Authorities, continued to perform 
well in 2003. It maintained its position as a leading supplier 
to the Highways Agency, winning its second Managing Agent
Contractor contract for Area 12. This contract, which is initially
for five years, is extendable to seven years and worth up to 
£140 million. 
Winning our first large Local Authority contract for Surrey
County Council was a major success in 2003. This is a four-year
contract, extendable to 10 years, with the maintenance element
worth up to £160 million. In addition to maintenance work, 
we will carry out improvement schemes under this contract 
up to a value of £0.5 million. Early in 2004 we had a further
success in this growing market, winning a four-year contract 
for Warwickshire County Council, which is extendable to seven
years and worth up to some £84 million.
Facilities Management
The acquisition of Citex Management Services in the second 
half of 2002 significantly strengthened our offering for 
private sector customers and helped our facilities management
business to make good progress in 2003. It was successful 
in winning a five-year national total facilities management 
contract for Telewest Broadband, worth around £90 million. 
This was awarded to Carillion specifically on the basis of our
proven capability and ability to deliver a nationwide solution. 
Our facilities management business also secured contract
extensions for a number of existing blue chip private sector
customers, including Coca-Cola and HBOS that were in the
portfolio acquired with Citex Management Services.
Reaching financial close on the Oxford John Radcliffe Hospital
PPP project and securing preferred bidder positions on four 
more large PPP hospitals in 2003, will also lead to further
valuable contracts for our facilities management business.
Turnover reduced by 11 per cent during 2003, primarily because
a number of large projects, including the GCHQ PPP project 
and the M6 Toll, were completed during the year and there 
were no new starts on construction projects of comparable size.
Continuing our selective approach to construction also affected
turnover, particularly in UK civil engineering.
£1,001.8m
Turnover (2002: £1,125.4m)
£5.6m
Operating profit* (2002: £17.1m)
0.6%
Margin (2002: 1.5%)
£7.9m
PPP net bid costs (2002: £10.6m)
Construction Services
In this segment we report the results of our UK Building and
Capital Projects businesses, which includes our International
Regional businesses.
* Before goodwill amortisation of £0.1m (2002 £0.1m) The reduction in operating profit reflects the cost overrun on the
Nottingham Express Transit (NET) project and lower turnover.
Building
Our UK building business performed soundly in 2003. Although
turnover reduced as PPP building activity declined, this is expected
to reverse in 2004 as several PPP projects for which we are preferred
bidder are due to reach financial close and move into construction.
Work winning in our chosen sectors of the commercial building
market, namely offices, retail and high-rise urban residential
developments, was encouraging in 2003, with good progress 
in the North and Midlands more than offsetting a reduced
activity in the South. We also continued to benefit from
developing long-term relationships with our customers, 
with 75 per cent of turnover generated by 20 key customers.
Consequently, our building business ended the year in a healthy
position, having orders for 75 per cent of planned turnover for
2004 and 50 per cent of planned turnover for 2005, either
secured or probable.
Our Building Developments business once again delivered
excellent results by pursuing its strategy of specialising in the
regeneration of brown field sites and developments where risk 
is minimised through pre-letting or sale to occupiers in sectors
where there is continuing demand.
Capital Projects
The M6 Toll, one of the UK’s largest ever road projects and which
accounted for the majority of our UK civil engineering activity,
was completed six weeks ahead of schedule in December 2003. 
Our contract to build the infrastructure for the Nottingham
Express Transit PPP project has also been completed and following
a period of successful shadow running, the tram system is now
fully operational.
In 2003, we won our first road construction contract under the UK
Government’s Early Contractor Involvement (ECI) programme – the
£65 million upgrade to the A74 in Cumbria to motorway standard.
We are specifically targeting the ECI and PPP programmes, under
which some £11 billion of projects are planned over the period
2000 to 2010, because these procurement methods meet our risk
management criteria. ECI contracts involve the development of a
detailed design before the project moves into construction, which
in the case of the A74 is scheduled for 2006. Our appointment 
as the preferred bidder for the A249 Design, Build, Finance and
Operate PPP concession, which reached financial close early in
2004, is expected to generate over £100 million of construction
work for the Group over the next three years, starting in 2004.
Our international regional businesses in Canada, the Middle East
and France all performed well in 2003, as they continued to
implement their strategy for growth, which mirrors our UK
strategy. We made particularly good progress in Canada, where
Government procurement is following the UK model for Public
Private Partnerships (PPP) and for outsourcing infrastructure
services. As well as our successes in the PPP health market (see
Business Services, page 10), we also won two more highways
maintenance contracts in Ontario, worth a total of £40 million. 
Annual Report & Accounts 2003
Operating and Financial Review 
continued
12 Carillion plc
7 The new Marks and Spencer
headquarters and store being built by
Carillion is part of the 80 acre, £500m
Paddington Basin redevelopment in
London. Designed by the Richard
Rogers Partnership, this new 21,000m
2
building will feature an 11 storey high
work of art.
7
6 Sovereign Harbour in Eastbourne 
is the largest composite marina
development in the UK. The 300 acre
site includes housing, retail and leisure
developments around a series of
harbours with berths for over 1,000
leisure craft.
6 Annual Report & Accounts 2003
By continuing to focus on project selectivity and operational
efficiency, Crown House significantly improved its performance in
2003 and ended the year trading profitably with a strong order book.
Accounting policies
During the year, Financial Reporting Standard 5 Application Note G:
‘Revenue Recognition’, became effective. A review of the Group’s
revenue recognition policies was undertaken in the light of this and
the Board considers the Group’s existing revenue recognition policies
to be consistent with the requirements of the Application Note.
Details of the Group’s key accounting policies can be found in
Note 1 to the financial statements.
International Financial Reporting Standards (IFRS)
On 29 September 2003, the European Commission adopted a
Regulation endorsing existing International Financial Reporting
Standards (IFRS) and Standing Interpretation Committee
Guidance, with the exception of those relating to financial
instruments. The adoption of this Regulation confirms the
requirement for the compulsory use of IFRS from 2005.
The Group continues to implement its strategic plan for transition
to IFRS developed in 2002. This has involved identifying the
major differences between existing accounting policies and the
policies and principles that will apply under IFRS in 2005. 
The major differences identified to date include:
• pension costs (accounting along the lines of FRS 17),
• share based payment (accounting for the fair value cost of
share option schemes), and
• segmental disclosures (in line with internal reporting structures).
During 2004, the Group will be rolling out a programme of
training for staff, revising systems and procedures, and restating
comparative information. This will enable the Group to report the
effect of the transition to IFRS on the 2004 financial statements
during the first half of 2005. 
Treasury policy and risk management
The Group has a centralised treasury function whose primary role is
to manage funding, liquidity and financial risks. In addition, treasury
provides contract bond and guarantee facilities to the Group.
Treasury is not a profit centre and does not enter into speculative
transactions. The Board of Directors sets policies within which
Treasury operates that ensure the most effective financing of the
Group’s operations and limit exposure to financial risk.
The Group has access to committed credit facilities totalling
£168.5 million, which mature in 2005. At 31 December 2003,
£121.6 million remained un-drawn under these facilities. 
The areas of significant financial risk exposure facing the Group
relate to liquidity, foreign exchange and interest rates.
Funding and liquidity
The Group’s policy is to avoid carrying significant net debt over
the medium term. Carillion plc’s principal borrowing facilities are
provided by a group of core relationship banks in the form of
syndicated and bi-lateral loans and short-term overdraft and
money market facilities of which £161 million are committed
facilities. Finance and operating lease facilities are also employed
13 Carillion plc
Chris Girling
Finance Director, 10 March 2004
to fund longer-term assets. The quantum of committed borrowing
facilities available to the Group is regularly reviewed and is
designed to exceed the Group’s forecast peak gross debt position.
Currency risk
The Group hedges all significant currency transaction exposures
using forward foreign exchange contracts. In order to protect the
Group’s balance sheet from the impact of exchange rate volatility,
a majority proportion of currency net assets are hedged using
matching currency loans or forward foreign exchange contracts.
Profits arising within overseas subsidiaries are not hedged unless
it is planned to make a distribution. Such distributions are then
treated as currency transactions and hedged accordingly. 
Interest rate risk
Borrowing facilities are designed primarily to finance short-term
working capital requirements and are at floating rates of interest
linked to LIBOR. The Group has not entered into interest rate
derivatives to fix or hedge interest rate risk and none are outstanding.
Certain longer-term assets have been financed using fixed rate leases. 
Carillion has equity in a number of joint venture Special Purpose
Companies (SPC), which have concession contracts for Public
Private Partnership Projects. SPCs obtain funding for these
projects in the form of long-term bank loans or corporate bonds
on a non-recourse basis to the joint venture partners and secured
on the assets of the SPC. A number of SPCs have entered into
interest rate derivatives as a means of hedging interest rate risk.
These derivatives are interest rate swaps that fix the rate of
interest payable.
Performance management
As well as routine business planning, budgeting and quarterly
forecasts, the Group employs a number of comparative measures
for assessing the performance of its business units. These include
long-term contract profit and cash performance against original
estimates, margin and net operating asset performance targets,
internal rates of return on UK PPP and other investments versus
the Group’s weighted average cost of capital and controls over
PPP bid costs by reference to expected future discounted cash
flows. The primary tools in working capital management are
outstanding debtor and trade creditor days.   
Going concern
The Directors confirm that, after making enquiries, they have a
reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the financial statements. Corporate Social Responsibility
Annual Report & Accounts 2003
Becoming a more sustainable business
Delivering sustainable profitable growth through responsible
business practice is driven by the Board, which is supported by a
Sustainability Committee and a Group Safety Committee. Although
improving Health and Safety is a fundamental part of sustainable
development, having a separate Board committee for this aspect of
our performance reflects the fact that the Health and Safety of our
people will always be of paramount importance. 
One of our core values is the delivery of sustainable profitable
growth. We were therefore delighted to receive Business in the
Community’s (BITC’s) ‘Company of the Year’ award in 2003 – 
its top award for Corporate Social Responsibility.
In 2003, Carillion was again the leading company in its sector in
BITC’s Corporate Social Responsibility Index and was ranked 33 out
of the 139 companies that took part, which included 56 FTSE 100
companies and 49 from the FTSE 250. 
Creating a more sustainable business is not only an important part
of risk management, but increasingly a differentiator that is helping
us to win more work and deliver better services to all our customers.
Our commitment to applying the principles of sustainable
development began almost ten years ago. Since then, we have
sought to understand, measure and improve our impacts on the
environment and society and we have published our targets and
performance annually. A copy of our 2003 Sustainability Report can
be found on our website at www.carillionplc.com/sustainability.
Understanding how the principles of sustainable development
benefit our business is fundamental, because if these principles are
not economically sustainable they are not sustainable. We have
therefore continued to develop the strategy model we first
published in 2001, where we identified the key performance
indicators that both improve our impacts on the environment 
and society and help us to deliver our business objectives. 
1 We continue to be members of
Business in the Community’s Per Cent
Club by contributing the equivalent 
of over one per cent of our profits to
environmental and community initiatives.
At the Graisley Primary School in
Wolverhampton, a Carillion team
transformed a disused medical room
into a Sensory Room for the children.
2 In recognition of Carillion being
Business in the Community's (BITC)
‘Company of the Year’ in 2003, it’s 
top award for corporate social
responsibility, Carillion Chief Executive,
John McDonough, attended a reception
hosted by HRH The Prince of Wales,
President of BITC.
1
2
14 Carillion plc
3
3 Horsepower makes a return to a
sensitive woodlands development in
Cumbria. Carillion Transport brought in a
rare breeds Cumberland fell pony to haul
timber during forest replanting near
Killington Lake Services on the M6.
Although part of the site was accessible
by tractor, other areas needed more
careful haulage to avoid damage to the
woodland and wildlife. 4,000 saplings of
native species, including cherry, oak, 
holly and rowan were planted.  Annual Report & Accounts 2003
In 2003, we focused on deepening our understanding of the links
between sustainable development and the delivery of our corporate
business objectives and set six sustainability objectives for the Group.
• Communicate and share our sustainability strategy, vision and
policy with all and continually improve the way in which we
engage with our stakeholders
• Minimise negative impacts of our services and activities on 
the environment
• Reduce waste production across the Group
• Reduce energy consumption across the Group
• Demonstrate the business case for sustainability
• Engage our supply chain in our sustainability programme to
improve its sustainable development performance and help us 
to achieve our targets
We aimed to meet these objectives through delivering 18 specific
targets. Our average score against these targets was 92 per cent
compared with the 93 per cent we achieved against the targets we
set in 2002. This slight reduction in performance does not reflect
any weakening of our commitment, but rather the increasingly
challenging targets we set year on year.
Supporting the environment
Ninety five per cent of Carillion’s activities are now covered by
Environmental Management Systems accredited to ISO14001 
and we are pleased to report that during 2003 we had no
environmental or ethical prosecutions.
In 2003, we focused on improving three areas of our performance
in particular, namely biodiversity, the management and minimisation
of waste and the materials we use. 
Investigating the feasibility of creating a biodiversity action plan was
one of our key targets. A guidance note has been produced on
how such a plan can be developed and implemented and we
intend to adopt this on a trial basis in 2004.
We also continued to work with a wide range of environmental
organisations to improve our understanding, skills and practices.
This included conservation projects in conjunction with The Wildlife
Trusts, with whom we have been working in partnership since
2001. To date we have sponsored 14 conservation projects with 
the aim of creating links with local communities that give these
communities and our own people opportunities to work together
to deliver these projects by working together. 
To develop our strategy for waste, we have been investigating how
we can move forward from just managing waste to include the
work we are doing to minimise waste and ultimately to achieve
‘zero waste’. This highly aspirational objective is encouraging us 
to seek new levels of innovation and efficiency, an approach we 
are hoping to incorporate into the long-term objectives we are
implementing in 2004. 
Applying the principles of sustainable development effectively to 
the use of materials means working closely with our supply chain
partners. One of the most pressing issues we need to address is 
the procurement of timber. Our policy is to procure timber from
sustainable sources for all our UK projects. However, this is not
straightforward when timber is purchased by others in the supply
chain. Consequently, we have been working with Greenpeace and
the WWF95+ Group to define the basic principles we need to
adopt in order to help ensure that our policy is followed by our
suppliers and sub-contractors.
Reducing carbon emissions and energy consumption continue to 
be important objectives. We reduced carbon emissions from our
vehicle fleet by a further five per cent in 2003 and our head office
carbon emissions have reduced by over 30 per cent. 
15 Carillion plc
4 Carillion continues to work in
partnership with The Wildlife Trusts.
Since 2001, we have financially
sponsored 14 conservation projects
around the UK and created
opportunities for our own people to
work with local communities to deliver
these projects. Pictured here is
Councillor Joan Williams, with some of
the team involved in our project with
the Staffordshire Wildlife Trust to protect
endangered water voles on the Wom
Brook in South Staffordshire.
4 16 Carillion plc Annual Report & Accounts 2003
Supporting people and communities 
Almost everything we do affects people and the communities in
which we operate. 
Consequently, one of our key targets in 2003 was to create a new
community policy and framework of guidelines, which build upon
our current experience and which can be applied consistently across
all our activities. Working with the support of Natural Step and
Business in the Community, we have made progress towards
developing a better understanding of how our business affects
communities and wider social issues and how we can create more
positive impacts. We aim to finalise and implement our new policy
and guidelines in 2004.
As a member of the Business in the Community’s ‘Per Cent Club’,
we continue to contribute one per cent of our profits in cash or in
kind to supporting environmental and community initiatives.
Carillion Construction Training is a UK leader in training and
providing people with the skills they need to work in our industry,
including brickwork, carpentry and joinery, plastering and painting
and decorating. We train more Modern Apprentices than any other
single organisation, with around 1,800 apprentices in training at
anyone time and some 800 qualifying every year with our
Construction Training NVQ. 
The quality of our people is an important differentiator and key to
our success. Their skills and commitment provide the vital link
between our strategic intent and front line delivery. Consequently,
attracting, developing and retaining excellent people to become an
employer of choice are high on our list of corporate objectives. In
2003, we set a target to help us develop our employees to achieve
their full potential through providing all our people with personal
one-to-one performance appraisals. These appraisals include
assisting people to understand and implement sustainability
principles. Some 78 per cent of our staff received personal
appraisals in 2003 and we shall be striving to raise this to 100 
per cent in 2004. 
Corporate Social Responsibility
continued
6
5
5 Carillion is one of the UK’s leading
providers of training for the
construction industry. Each year 
some 800 Modern Apprentices qualify
with our Construction Training NVQ
from our 18 UK training centres.
6 The Carillion Academy, our resource
centre of learning excellence, provides 
a broad range of training and
development courses for our people. 
The Academy ensures that all our
people have access to high quality
training tailored to the needs of our
businesses. 17 Carillion plc Annual Report & Accounts 2003
Health and Safety
The Health and Safety of our employees and all those affected by
our activities remains paramount. First class Health and Safety
performance is also essential to the delivery of our strategy for
sustainable profitable growth.
We therefore have an ongoing and determined commitment to
improve our own performance and that of our industry by working
with others, including the Health and Safety Executive, to develop
and implement best practice into everything we do. 
Across the Group in 2003, there were 350 injuries reportable under
the Reporting of Injuries, Diseases an Dangerous Occurrences
Regulations for a population of 40,000 people, including direct
employees and subcontractors. Our Accident Frequency Rate (AFR)
reached its lowest ever level of 0.34 per 100,000 hours in 2003,
compared to 0.45 in 2002 when we had 408 reportable injuries.
We therefore expect our performance to once again rank with the
best in our industry. 
Despite this improvement in our AFR, tragically there were three
fatalities and 66 major injuries in 2003. In February 2004, four of
our people were killed and four others injured in an accident on the
West Coast Main Line railway, which is still the subject of formal
independent investigations. Following this fatal accident and those
in 2003, the deep sense of shock and sadness felt by all our people
has redoubled our commitment to Health and Safety. Our challenge
is to turn that absolute commitment into further real and
measurable progress so that our people can work safely wherever
they are.   
Accident profiles are regularly analysed to identify better control
measures to reduce accidents. For example, hand injuries were
identified as a particular problem and a campaign was mounted 
to increase awareness and ensure that our people wear protective
gloves in appropriate circumstances. This resulted in a 34 per cent
reduction in hand injuries.
Our Health and Safety strategy in 2003 focused on the four target
areas highlighted below, which were selected as a result of
analysing accidents and incidents. We also aligned as many of our
improvement targets as possible with current Health and Safety
Executive campaigns to take full advantage of their promotional
benefits. We made significant progress in all four areas.  
Behavioural Safety
We recognise that we need to identify the behaviours that are 
likely to lead to accidents and address the root causes of these
behaviours. All our business groups have developed and put in
place behavioural safety plans, which address their specific 
business needs. 
Safety by Design
We aim to eliminate hazards through the design process. A training
programme has been implemented across the Group and ‘Safety 
by Design’ audits are now in place on all our major construction
projects. 
Accident Investigation
Improving our accident and investigation processes to identify the
causes of accidents is an ongoing priority. In 2003, we introduced
an improved protocol and new procedures, supported by training. 
Occupational Health
Although health has always been an important part of our Health
and Safety programme; we have increased its priority. A dedicated
team has been created to promote awareness of occupational
health, revitalise our health screening programmes and produce
easy to use advice on occupational health. 
Carillion has also been actively involved in producing Health and
Safety information for internal and external use on a number of
other specific areas, including working at height, workplace vehicle
control, manual handling and hand-arm vibration syndrome.
Carillion sites have acted as mentors for the Construction Industry
Training Board scheme to produce a ‘Good Practice Guide’ for non-
English speakers, and we participated in a project funded by the
Health and Safety Executive to produce guidance for supervisors 
on the management of health on construction sites.
This summary is an outline of the progress we have made in the
past 12 months. You can find out more from our detailed
Sustainability Report 2003 on our website.
www.carillionplc.com/sustainability Annual Report & Accounts 2003
The Board of Directors
01 Sir Neville Simms
02 John McDonough
03 Chris Girling
04 Roger Robinson
05 Jean-Paul Parayre
06 Roger Dickens CBE DL
07 Andrew Parrish
18 Carillion plc
01 02
03 04
05
07
06 Sir Neville Simms 
Chairman, age 59.
Sir Neville’s career has been spent in the construction industry
having originally joined Tarmac in 1970, and going on to 
become Chief Executive in 1992 and Deputy Chairman in 1994.
Sir Neville is also Chairman of International Power plc, a Director
of Foundation for the Built Environment, and was until May 2002
a Member of the Court of the Bank of England. Sir Neville was
appointed to the Board of Carillion plc in May 1999 and is
Chairman of the Sustainability Committee and the Nominations
Committee. He is a Chartered Engineer.  
John McDonough
Chief Executive, age 52. 
John was formerly Vice President, Integrated Facilities
Management, Europe, the Middle East and Africa of Johnson
Controls Inc. He was appointed as Carillion’s Chief Executive 
in January 2001 and is a member of the CBI’s Public Services
Strategy Board. John was also appointed on 1 February 2004 
as a non-executive director of Exel plc.
Chris Girling
Finance Director, age 50. 
Chris was previously Group Finance Director of Vosper Thornycroft
Holdings plc. He was appointed to the Carillion plc Board in
November 1999. Chris is also a non-executive director of Barlow
Group Limited, and is a Chartered Accountant and a Master of
Business Administration. 
Roger Robinson
Construction Services Director, age 52. 
Roger joined Tarmac Construction as Contracts Director in 1989
subsequently becoming in 1996 Managing Director of Tarmac
Civil Engineering, International and Rail. Roger was appointed 
to the Board of Carillion plc in May 1999 and has Groupwide
responsibility for Construction and Health and Safety matters. He
is a member of the Government T askforce on Modern Apprenticeships
and is a Fellow of the Institution of Civil Engineers.
Jean-Paul Parayre
Senior Independent Non-Executive Director, age 66. 
Jean-Paul was appointed to the Board in May 1999 and 
is a member of the Audit, Remuneration and Nominations
Committees. Jean-Paul is also Chairman of Vallourec S.A., 
a Director of Bollore Investissement, Stena UK, Stena Line 
and a Supervisory Board member of Peugeot S.A. 
Roger Dickens 
Non-Executive Director, age 56. 
Appointed to the Board in May 2000, Roger is Chairman of 
the Audit Committee and a member of the Remuneration and
Nominations Committees. Roger is the former Chairman of iSOFT
Group PLC and is the current Chairman of West Bromwich Building
Society and ASSA Training and Learning Limited. Roger is also a
Director of Headlam Group plc. He is a Chartered Accountant.
Andrew Parrish 
Non-Executive Director, age 58. 
Andrew joined the Board in March 2000 and is Chairman of 
the Remuneration Committee and a member of the Audit and
Nominations Committees. He was previously Group Chief Executive
of Senior plc and is a member of the CBI’s Manufacturing Council.
He is also Chairman of the National Stud. Andrew is a Chartered
Engineer.
19 Carillion plc Annual Report & Accounts 2003 Annual Report and Accounts 2003 20 Carillion plc
General principles
The Board is firmly committed to high standards of corporate governance. During the year to 31 December 2003, the Company, as
detailed below and in the Remuneration Report, complied with the provisions set out in Section 1 of the Combined Code other than
in respect of the duration of two of the Executive Directors’ service contracts. For the information of shareholders, so far as possible
the Company, in this report and the Remuneration Report, also reports against the relevant provisions of the revised Combined Code
which will come into effect for reporting years beginning on or after 1 November 2003. 
In accordance with the Combined Code, the Chief Executive’s service contract is terminable by one year’s notice. The service contracts
of Chris Girling and Roger Robinson are terminable in normal circumstances by two years’ notice. These two-year contracts were
entered into in good faith at a time when contracts of such a period were usual. The Board does not consider it appropriate to
negotiate shorter periods, particularly as it has been the practice of the Group to require mitigation in the event of termination. It is
likely that any new appointments will be made on the terms of one year’s notice or on a longer period reducing within a defined
interim period to one year.
Ethics and Business Integrity Policy
Carillion has a clear and unequivocal approach to business integrity and ethics which underlies the Group’s values of openness,
collaboration, mutual dependency, professional delivery, focus on sustainable, profitable growth and innovation. The policy requires
Carillion to conduct its business to the highest ethical standards. It applies to all employees and the way Carillion delivers this policy 
is and will be reflected in the way the Group competes for business, through the quality and value of its work and the reputation 
of its employees.
The requirements of the policy are in summary:
• Business Integrity: we do not sanction or accept any illegal payments, allowances, or gifts-in-kind.
• Mutual Respect: we treat our people fairly and with respect at all times, avoiding discrimination and bullying. We provide a safe
and healthy working environment, and respect sustainable principles in all our dealings.
•Trust: we engender trust within our work groups and companies, respecting diverse traditions and cultures. We respect the trust
placed in us by others, not least when we are asked to take responsibility for aspects of their business or resources. We demand
and maintain high professional standards and demand honesty and openness.
• Legality: we respect the rule of law in all our dealings. We maintain a system for confidential reporting of breaches of our standards
and policies.
• Human Rights: we support the belief that human rights are universal and adhere to the principles of human rights in our
operations. We support the United Nations Declaration on Human Rights.
Directors
The Board
The Company is led by a Board comprising three Executive and four Non-Executive Directors. Throughout 2003, the Chairman and
the Non-Executive Directors comprised more than half of the Board and this continues to be the case. With the exception of the
Chairman, who previously was Group Chief Executive, each of the Non-Executive Directors is considered to be independent of
management. They each have wide areas of experience and have no business or other relationship that could materially interfere 
with their independent judgement. Jean-Paul Parayre is the Senior Independent Non-Executive Director.
A detailed internal review of the Board’s structure, membership, procedures and effectiveness was conducted in 2003 by the
Chairman in conjunction with the Company Secretary. The review took into account the views and preferences of each of the
Directors and identified a number of areas where it was possible further to enhance the effectiveness of the Board’s procedures and
working practices. Changes were successfully introduced in those areas. This is the second year that such a review has taken place
and it will be repeated annually. Additionally, reviews of the performance of the Directors and of the Board have taken place. 
The division of responsibilities between the Chairman and the Chief Executive has been agreed by the Board and encompasses the
following parameters:
• the primary job of the Chairman of a public company is to provide continuity, experience and governance while the Chief Executive
provides leadership, energy, imagination and the driving force;
• the Chairman is viewed by investors as the ultimate steward of the business and the guardian of the interests of all the shareholders.
Nonetheless, it is essential that the outline of their respective roles encourages the Chairman and Chief Executive to work well
together to provide effective and complementary stewardship;
• the Chairman must:
– take overall responsibility for the composition and capability of the Board;
– consult regularly with the Chief Executive and be available on a flexible basis for providing advice, counsel and support to the
Chief Executive.
• the Chief Executive must: 
– manage the Executive Directors and the Group’s day to day activities;
– prepare and present to the Board strategic options for growth in shareholder value;
– set the operating plans and budgets required to deliver the agreed strategy;
– ensure that the Group has in place appropriate risk management and control mechanisms.
Corporate Governance Report Annual Report and Accounts 2003 21 Carillion plc
The Board has a programme of seven meetings during the year and also meets on an ad hoc basis as required. A formal schedule of
matters reserved to the Board for consideration and decision is maintained. The matters so reserved include:
• statutory matters such as the approval of final and interim financial statements and the recommendation of dividends;
• appointments to and removals from the Board and the terms of reference and membership of Board committees;
• approval of Group strategy and annual budgets;
• approval of authority levels, financial and treasury policies;
• authorisation for any acquisition or disposal;
• review of the internal control arrangements and risk management strategies; and
• review of corporate governance arrangements.
All Directors have access to the Company Secretary, who is responsible to the Board for ensuring that agreed procedures and
applicable rules and regulations are observed. The appointment and removal of the Company Secretary are matters for the Board 
as a whole. Any Director may, in furtherance of his duties, take independent professional advice when necessary, at the expense 
of the Company.
The Board is provided with regular and timely information on the financial performance of businesses within the Group, and of the
Group as a whole, together with reports on other trading matters, markets, sustainability and other relevant issues.
Board Committees
The principal Board committees are the Remuneration Committee, the Audit Committee and the Nominations Committee. The Company
Secretary acts as Secretary to each of these committees. The membership of each of the principal committees is as follows:
Remuneration Committee
Andrew Parrish, Chairman
Roger Dickens
Jean-Paul Parayre
The Committee consists entirely of independent Non-Executive Directors and has a key role in reviewing and advising the Board 
on the appropriate remuneration for the Executive Directors of Carillion plc. Further details on remuneration issues are given on 
pages 26 to 33.
Sir Neville Simms stood down from the Remuneration Committee on 9 September 2003.
Audit Committee
Roger Dickens, Chairman
Jean-Paul Parayre
Andrew Parrish
Sir Neville Simms stood down from the Audit Committee on 9 September 2003.
This Committee now consists entirely of independent Non-Executive Directors. For further information see the Report of the Audit
Committee on page 23.
Nominations Committee 
Sir Neville Simms, Chairman
Roger Dickens
Jean-Paul Parayre 
Andrew Parrish
This Committee also comprises all Non-Executive Directors, the majority of whom are independent, under the chairmanship of 
Sir Neville Simms. It reviews the Board structure, size, composition, balance of skills, knowledge and experience of the Board and
makes recommendations to the Board with regard to any changes that are deemed desirable. The Committee also reviews succession
planning to ensure that processes and plans are in place with regard to both Board and senior appointments.
Whilst no Board appointments were made in 2003, the Committee has previously used an external search consultancy for this purpose.
The terms of reference of each of these committees are available on the Carillion website at www.carillionplc.com or on request from
the Company Secretary. Attendance at meetings in 2003
Each Director attended all meetings of the Board in 2003, save that Mr Robinson was unable to attend the January meeting, and 
Mr Dickens the October meeting, in each case as a result of illness.
The following tables show the attendance of Committee members at meetings of those Committees during the year ended 
31 December 2003:
Audit Committee
Date of meeting 10 March 2003 4 September 2003 9 December 2003
Roger Dickens Roger Dickens Roger Dickens
Jean-Paul Parayre Andrew Parrish Jean-Paul Parayre
Andrew Parrish Sir Neville Simms Andrew Parrish
Sir Neville Simms
Remuneration Committee
Date of meeting 28 January 2003 11 March 2003 8 December 2003
Andrew Parrish Andrew Parrish Andrew Parrish
Roger Dickens Roger Dickens Roger Dickens
Jean-Paul Parayre Jean-Paul Parayre Jean-Paul Parayre
Nominations Committee
Date of meeting 16 December 2003
Sir Neville Simms
Roger Dickens
Jean-Paul Parayre
Andrew Parrish
Other Board matters
Policy on external appointments
Recognising that external appointments can broaden their knowledge and so be of benefit to the Company, Executive Directors are
permitted, at the discretion of the Board, to accept a limited number of such appointments and retain the fees received for such
appointments. John McDonough and Chris Girling have such appointments as Non-Executive Directors of Exel plc and Barlow Group
Limited respectively.
Nomination and remuneration of Directors
The appointment of a Director is a matter for resolution by the Board as a whole, taking advice from the Nominations Committee.
In the case of Non-Executive Directors, initial appointments are normally for three years; re-appointment is subject to review and is 
not automatic. As an exception to this, the Chairman has a service contract which commenced on 1 February 2001 for a period of 
two years and which now continues by agreement unless and until terminated by either party giving one year’s notice.
The fees of Non-Executive Directors are determined by the Board as a whole, taking into account the commitment required and
participation in the work of committees and other advisory services in relation to the business of the Group. In advising the Board 
on such fees, it is the policy of the Executive Directors to seek independent external advice concerning the appropriateness of the
amounts by comparison with general practice. The level of fees currently payable to the Non-Executive Directors is based on
independent external advice.
The remuneration of the Directors is dealt with in the Remuneration Report on pages 26 to 33.
Retirement of Directors by rotation
The Articles of Association of the Company provide that each Director shall retire from office and shall be eligible for re-election at 
the third Annual General Meeting after the meeting at which he was elected or last re-elected.
All Directors appointed by the Board are subject to retirement and election by shareholders at the first Annual General Meeting
following such appointment.
The Directors retiring and seeking re-election at the Annual General Meeting to be held on 12 May 2004 are Sir Neville Simms, 
Jean-Paul Parayre, Roger Dickens and John McDonough.
The service contract of John McDonough and the terms and conditions of appointment of Sir Neville Simms, Jean-Paul Parayre and
Roger Dickens are available for inspection at the registered office of the Company during normal business hours on any weekday 
(bank holidays excepted) and at the Annual General Meeting.
Annual Report and Accounts 2003 22 Carillion plc
Corporate Governance Report 
continued Annual Report and Accounts 2003 23 Carillion plc
Induction and development of Directors
An induction schedule for new Directors has been reviewed and approved by the Board. The schedule ensures the provision of
information on the role of a Director of a listed company and summarises responsibilities and ongoing obligations under legislation,
regulation and best practice. It also ensures that the operations of the Carillion Group are understood by new Directors.
The regular updating of Directors’ skills and knowledge is encouraged and a procedure has been established whereby the Company
Secretary is notified by Directors of their requirements in this respect.
Relations with shareholders
In addition to communicating with shareholders generally from time to time, the Executive Directors meet regularly with
representatives of major shareholders in order to foster the mutual understanding of objectives. The details of these meetings are
reported to the Board. The Chairman and the Senior Independent Director, Mr Parayre, are available for meetings with representatives
of major shareholders as required.
Private and institutional shareholders are encouraged to attend the Company’s Annual General Meeting.
The Company complies fully with the provisions of the Combined Code in respect of the notice, content of agenda and conduct of 
its Annual General Meetings. It also sets out to comply fully with the provisions of the revised Combined Code in this respect. The
Chairmen of the Remuneration and Audit Committees will be present at the Annual General Meeting on 12 May 2004 to respond 
to shareholders’ questions.
Accountability and Audit
Report of the Audit Committee
The Audit Committee now consists entirely of independent Non-Executive Directors: 
Roger Dickens, Chairman 
Jean-Paul Parayre 
Andrew Parrish
Roger Dickens is a chartered accountant who is Chairman of West Bromwich Building Society and who formerly served on the Audit
Committee of Tarmac plc. Roger was appointed to the Audit Committee in May 2000.
Jean-Paul Parayre is Chairman of Vallourec S.A. and was formerly a member of the Audit Committee of Tarmac plc. Jean-Paul became 
an Audit Committee member in July 1999.
Andrew Parrish was previously Chief Executive of Senior plc, is a member of the CBI’s Manufacturing Council and is also Chairman 
of the National Stud. Andrew was appointed to the Audit Committee in March 2000.
Appointments to the Committee are made by the Board.
The Audit Committee has in attendance at meetings, by invitation of the Committee, Executive Directors, representatives of the
external auditors, (KPMG Audit Plc), and the Head of Internal Audit. It is also able to invite others as it requires from time to time. 
The Committee also meets privately with both the external and internal auditors.
The responsibilities of the Audit Committee include: 
• the review of the annual and interim financial statements;
• consideration of the impact of changes to accounting regulations and the financial and accounting policies of the Carillion Group; 
• compliance with statutory and other external requirements;
• reviewing the role of the internal audit function and the results of its audit work and the response of management; 
• reviewing the scope and results of the external audit and its cost-effectiveness;
• ensuring that the internal and external audit functions are complementary;
• monitoring the independence and objectivity of the external auditors and ensuring that the services provided 
(including non-audit services) provide a proper balance between objectivity and value for money;
• recommending to the Board the external auditors to be proposed to shareholders for appointment.
The Committee is authorised by the Board to (i) seek any necessary information to fulfil its duties (ii) call any member of staff to 
be questioned at a meeting of the Committee as and when required and (iii) obtain outside legal help and any professional advice, 
at the Company’s expense, which might be necessary for the fulfilment of its duties. 
The members of the Committee receive fees for their Non-Executive Directorships which reflect their membership of the Audit
Committee and other Board committees. See page 27 for details. Annual Report and Accounts 2003 24 Carillion plc
Main activities of the Audit Committee in the year to 31 December 2003
Financial statements
The Audit Committee reviews and discusses with management and the external auditors the annual and interim statements. In this
context, the Committee also reviews the written reports of KPMG on issues arising from the annual audit and the review of the
interim results.
Internal controls
The Board is ultimately responsible for the Group’s system of internal control. This responsibility includes clearly determining the
control environment and reviewing annually the effectiveness of the internal control system. However, such a system can provide only
reasonable and not absolute assurance against material misstatement or loss.
In accordance with the Turnbull Guidance for Directors Internal Control: Guidance for Directors on the Combined Code, the Board
confirms that there is an ongoing process for identifying, evaluating and managing the significant risks (both financial and 
non-financial) faced by the Group (including joint ventures and overseas businesses). The process has been in place for the year under
review and up to the date of approval of the Annual Report and Accounts and is regularly reviewed by the Board. 
Assurance over the design and operation of internal controls across the Group is provided through a mix of techniques:
• Internal Audit carries out audits to assess the adequacy and effectiveness of internal controls over the key risks faced by the
business and reports its findings to management, the Executive Directors and the Audit Committee. The Audit Plan is presented to
and approved by the Audit Committee annually;
• recommendations to improve the system of control are made by Internal Audit. The implementation of these recommendations is
followed up and reported on quarterly;
• Internal Audit independently reviews the risk identification procedures and control processes implemented by management; 
• a process of Control Risk Self-Assessment is used in the Group where Directors and senior managers are required to detail and
certify controls in operation to mitigate risk in key process areas. They also confirm annually, in writing, that risk management
processes and appropriate controls are in place and are operating effectively; and
• Internal Audit advises on aspects of the design and application of internal controls in key business projects and on policy and
procedure changes.
Internal Audit reports to the Audit Committee on a regular basis. The Audit Committee reviews the assurance procedures and ensures
that the level of confidence required by the Board is obtained. It also ensures the financial reporting process is credible and reliable.
The Audit Committee presents its findings to the Board regularly and the Head of Internal Audit has direct access to the Audit
Committee members. 
The Group Head of Risk is responsible for advising on strategic risk issues across the Group, and for oversight of risk training. 
The Group Head of Risk is also responsible for carrying out an independent appraisal of all projects before submission to the Major
Projects Committee (see below). This appraisal ensures that the differentiating factors of the Group’s offer have been properly
identified so maximising the opportunities available; it also involves ensuring that all inherent and residual risks associated with the
project have been properly identified and considered.
The Major Projects Committee, a committee of the Board, acts as the sanctioning body for major commitments and transactions
including capital expenditure, major contracts and company and business acquisitions and disposals. This committee has delegated
authority up to specified levels, beyond which Board approval is required.
Practical guidance for all staff is maintained in Group policy and procedure documents regarding the authorisation levels for
commitments, contract selectivity and bidding, the provision of guarantees and management accounting as well as reporting and
resolution of suspected fraudulent activities. Wherever possible, the Board operates a policy of prosecuting individuals found to have
defrauded the Company or its subsidiaries. Learning points for management are identified and action plans implemented to minimise
the recurrence of fraud. 
Employees are encouraged to raise genuine concerns about malpractice at the earliest possible stage and a confidential
‘whistleblowing’ hotline provided by an independent third party is available.
Management is responsible for the identification and evaluation of significant risks applicable to its areas of business together with
the design, operation and monitoring of suitable internal controls. These risks are assessed on a continual basis and may be
associated with a variety of internal or external sources, including control breakdowns, disruption in information systems, competition,
natural catastrophe and regulatory requirements. Management is also responsible for timely and accurate reporting of business
performance and for ensuring compliance with the policies set by the Board in its areas of business. Regular performance review
meetings are held where management reports to the Executive Directors on business performance, risk and internal control matters.
The results of these meetings are presented to the Board.
Corporate Governance Report 
continued Annual Report and Accounts 2003 25 Carillion plc
The Executive Directors report to the Board on material changes in the business and the external environment that affect significant
risks. The Finance Director provides the Board with regular financial information, which includes key performance indicators (see the
Operating and Financial Review on pages 8 to 13) and a summary of risk. Where areas for improvement are identified, the Board
considers the recommendations made both by the Executive Directors and by the Audit Committee.
Audit independence
The Audit Committee and Board place great emphasis on the objectivity of the Group’s auditor, KPMG, in their reporting to shareholders.
The KPMG audit director and manager are present at Audit Committee meetings to ensure full communication of matters relating to
the audit.
The overall performance of the auditors is reviewed annually by the Audit Committee, taking into account the views of management,
and feedback is provided to senior members of KPMG unrelated to the audit. This activity also forms part of KPMG’s own system of
quality control. The Audit Committee also has discussions with the auditors, without management being present, on the adequacy of
controls and on any judgmental areas. These discussions have proved satisfactory to date.
The scope of the forthcoming year’s audit is discussed in advance by the Audit Committee. Audit fees are reviewed by the Audit
Committee after discussions between the businesses and the local KPMG offices and are then referred to the Board for approval.
Rotation of audit director’s responsibilities within KPMG is required by their profession’s ethical standards, is actively encouraged and
has taken place. The current audit director responsible for the engagement has held his role for four years following the last rotation.
There is also rotation within the audit teams. 
Assignments awarded to KPMG and its associates have been and are subject to controls by management that have been agreed by
the Audit Committee so that audit independence is not compromised. In summary, the procedures are:
• Audit related services: as auditors this is the main area of work of KPMG and its associates. If any additional accounting support is
required then this is considered competitively;
• Tax consulting: in cases where they are best suited, Carillion uses KPMG and its associates but the Group also uses other tax
consultancies. Significant pieces of tax work are evaluated competitively;
• General and systems consulting: all significant consulting projects are subject to competitive tender.
Other than audit, the Group Finance Director is required to give prior approval of work carried out by KPMG and its associates in
excess of a predetermined threshold; part of this review is to determine that other potential providers of the services have been
adequately considered.
These controls provide the Audit Committee with adequate confidence in the independence of KPMG in their reporting on the audit
of the Group.
Health and safety
A review of the Group’s progress on health and safety, environmental and social performance is contained in the Corporate and Social
Responsibility section on pages 14 to 17.
R F Tapp
Secretary
10 March 2004 Annual Report and Accounts 2003 26 Carillion plc
This report has been prepared in accordance with the Combined Code. For the information of shareholders, so far as possible the
Company, in this report and the Corporate Governance Report also reports against the relevant provisions of the revised Combined 
Code which will come into effect for reporting years beginning on or after 1 November 2003. 
The Board is responsible for determining policy for remuneration of the Directors of Carillion plc and key members of the senior
management team. The Remuneration Committee comprises Roger Dickens, Jean-Paul Parayre and Andrew Parrish (Chairman), and 
is responsible for formulating policy and recommending to the Board the remuneration of the Executive Directors. Sir Neville Simms
stood down from the Committee during the year. The Board determines the fees of the Non-Executive Directors based on 
independent external advice.
The Remuneration Committee is assisted in remuneration decisions by Susan Morton, Group HR Director and by John McDonough,
Group Chief Executive.
Additionally, the Remuneration Committee uses The Monks Partnership (a business owned by PricewaterhouseCoopers LLP) to provide
salary survey and benchmarking information. The Monks Partnership, which was appointed in 2001, has no other connections with 
the Company.
Remuneration policy
It is the policy of the Company to ensure that remuneration and other benefits attract, motivate and retain Executive Directors and
senior managers of the required calibre to achieve the Board’s objectives, including that of achieving growth in shareholder value.
Remuneration and other benefits are determined with regard to competitive market practice and, where considered appropriate, are
supported by external independent surveys. The main elements of remuneration of the Executive Directors are basic salary and pension
benefits, together with annual performance bonuses linked to the Group’s financial and share price performance to ensure that the
interests of the Executive Directors are aligned to those of the shareholders. The Company intends to continue this approach to the
structure of remuneration for the foreseeable future (subject to any changes in legislation with regard to pension provision).
The Group’s remuneration policy is also based upon Carillion’s strategic objectives, which specifically include achieving high standards 
in respect of sustainability, which encompasses Carillion’s health and safety, environmental and social performance.
Service contracts
The Chief Executive’s service contract is terminable by one year’s notice from the Company. The other Executive Directors’ service
contracts are terminable in normal circumstances by two years’ notice from the Company. The Combined Code sets as a principle that
notice periods in Directors’ contracts of service should be set at one year or less, or reduce to one year or less after an initial period. 
The Group’s position to date has been that the two-year contracts which remain in place were entered into in good faith at a time 
when contracts of such a period had been acceptable and the Board does not consider it appropriate to negotiate shorter periods. 
In any event it has been the practice of the Group to require mitigation in the event of termination. It is likely that any new
appointments will be made on the terms of one year’s notice, or on a longer period reducing within a defined interim period to one
year. Upon termination of their employment, Executive Directors of the Company have no additional entitlement to compensation for
loss of their office as Directors. The service contracts contain provision for early termination.
Notice
Name Commencement period Term
John McDonough 1 January 2001 12 months rolling
Chris Girling 13 September 1999 24 months rolling
Roger Robinson 29 July 1999 24 months rolling
Non-Executive Directors are not employed under contracts of service, but are generally appointed for fixed terms of three years
renewable for further terms of one to three years if both parties agree. Each of the Non-Executive Director’s appointments is presently 
in such renewed terms. As Chairman and in recognition of the associated responsibilities, Sir Neville Simms has a contract for services
which commenced on 1 February 2001 for a period of two years and which now continues unless and until terminated by either party
giving one year’s notice.
Remuneration Report Annual Report and Accounts 2003 27 Carillion plc
Basic salary and other benefits
The basic salaries and other benefits of the Executive Directors are set by the Remuneration Committee and are determined taking
into account individual performance and information provided by independent sources on the rate of salary for similar posts in
comparable companies. The aim is to reward Directors fairly and competitively.
Other benefits typically include a company car, private healthcare and salary supplements (or contributions to a funded unapproved
retirement benefit scheme (FURBS)) in place of approved pension provision for salary over the annual earnings cap.
Annual performance bonus and deferred bonus plan
Annual bonuses are reviewed each year by the Remuneration Committee, which sets performance targets geared to profit, key financial
indicators and individual performance objectives. The Executive Directors have the potential to earn annual bonuses up to a maximum of
50% of their basic salary for outstanding performance. The bonus arrangement for 2003 set a financial performance target based on
earnings per share and individual, detailed and confidential personal performance objectives that support the strategic objectives of the
Company. The maximum bonus opportunity of 50% comprises an annual cash payment limited to 30% of salary with a deferred bonus
of shares of the Company with a value of up to 20% of salary vesting after one year. The number of shares allocated is determined by
the price prevailing at the date the bonus is confirmed and the amount by which the bonus earned exceeds 30% of basic salary at the
end of the bonus year in question. The shares are released on the condition that the recipient makes funds available to the Company at
the point of transfer to allow the Company to meet its tax and National Insurance obligations on the value of the shares transferred.
Pension benefits 
The Group makes contributions to an Inland Revenue approved defined benefit scheme and, where applicable and where the
individual has so elected, to FURBS on behalf of the Executive Directors. Alternatively, a payment equal to the contribution the Group
would have made to the funded unapproved arrangement is paid to the Executive Director as a salary supplement. Contributions to
the funded unapproved arrangements are reported as a benefit in kind on an annual basis. Salary supplements are taxed at source.
Directors’ remuneration
The remuneration of the Directors of Carillion plc for the year ended 31 December 2003 is set out in the table below.
Annual
performance bonus
Value of
Basic Cash deferred Other Total Total
£000 salary/fees payment bonus shares benefits 2003 2002
Executive Directors
John McDonough 385 116 – 118 619 616
Chris Girling 245 71 – 66 382 390
Roger Robinson 250 73 – 74 397 400
Total for Executive Directors 880 260 – 258 1,398 1,406
Non-Executive Directors
Sir Neville Simms 150 – – 27 177 178
Roger Dickens 38––– 38 30
John-Paul Parayre 38––– 38 30
Andrew Parrish 38––– 38 30
Total for Non-Executive Directors 264 – – 27 291 268
Total for all Directors 1,144 260 – 285 1,689 1,674
The auditors are required to report on the information contained in the above table.
Included in ‘Other benefits’ are salary supplements in place of FURBS contributions for John McDonough of £96,247 (2002: £90,132)
and Roger Robinson £Nil (2002: £12,147).
Contributions were payable to FURBS in respect of Chris Girling of £49,207 (2002: £46,906) and Roger Robinson of £50,887 
(2002: £36,432).
John McDonough retains the fees of £40,000 per year that he is paid as a non-executive Director of Exel plc. Chris Girling retains the
fees of £15,000 per year that he is paid as a non-executive Director of Barlow Group Limited. Annual Report and Accounts 2003 28 Carillion plc
Executive pensions
Until April 2003, it was the Company’s policy to offer membership of the Carillion ‘B’ Pension Scheme to Executive Directors and
other senior employees. This scheme was operational from 1 October 1999. The scheme is a funded, Inland Revenue approved,
defined benefit scheme to which members contribute 7% of pensionable earnings. The main features are:
• pension payable at the normal retirement age of 60 (save in cases of ill health or early retirement)
• pension accrual rate for Executive Directors of 1/30th of final pensionable salary for each year of service targeting a pension 
(at normal retirement age) of two thirds of final pensionable salary (subject to twenty years’ service after which employee
contributions cease)
• increases to pensions in payment (in excess of the State Guaranteed Minimum Pension) in line with price indexation up to 
5% per annum
• life assurance of four times pensionable salary
• pensions payable in the event of ill health, and
• on death (in service or after retirement), spouse’s and/or dependent’s pension at two thirds of member’s pension.
Maximum pension benefits of two thirds of pensionable salary are offset by any pension benefits accruing from earlier 
pension arrangements.
The Carillion ‘B’ Pension Scheme was closed to new entrants with effect from 1 April 2003. Pension provision for senior managers
and Executives is now through their existing Carillion scheme (for current employees) or the Carillion Pension Plan (for new employees
and existing employees who opted for membership). The Carillion Pension Plan is a defined contribution pension arrangement that
provides members with pensions at retirement based on the accumulated value of their notional pension account within the plan.
The current Executive Directors are subject to the Inland Revenue earnings cap and their pensionable salary is limited accordingly. They
are provided with additional benefits by way of individual FURBS or a salary supplement equal to the contribution the Group would
have made to a FURBS and with unapproved life cover of four times salary over the earnings cap. In all cases, any contributions made
to these arrangements in respect of the year are disclosed separately above. As these additional arrangements are limited to the
balance of basic salary in excess of the earnings cap, bonus paid to Executive Directors does not count towards pension benefits. The
Company does not contribute to any pension arrangements of Non-Executive Directors.
Directors’ pensions
Pensions accruing during the year to Executive Directors in their capacity as Directors of Carillion plc are set out below. 
Transfer value
of increase
in accrued
Increase in Increase in pension at Increase in
accrued pension accrued pension 31 Dec 03 transfer value
Accrued over year over year less member over year
pension at excluding including contributions Transfer value Transfer value after member
31 Dec 03 inflation inflation during the year at start of year at end of year contributions
£ per annum £ per annum £ per annum ££££
John McDonough 9,900 3,420 3,238 32,199 71,164 116,079 38,503
Chris Girling 13,750 3,490 3,203 28,679 102,606 147,913 38,895
Roger Robinson 43,832 3,865 2,643 26,646 461,087 538,390 70,891
The auditors are required to report on the information contained in the above table.
Share incentive schemes
The Company operates four share incentive schemes to motivate employees and to encourage them to invest in the future success 
of the Group. The Founders’ Equity Plan, the Executive Share Option Schemes and the Long Term Incentive Plan all have challenging
performance criteria which apply similarly to all participants. The Board believes that these schemes complement the strategy of
achieving growth in shareholder value by directly aligning these incentives of the Executive Directors and senior employees to the
interests of the shareholders. A Sharesave Scheme also operates to give UK employees the opportunity to have a financial stake in 
the Company.
Remuneration Report 
continued Annual Report and Accounts 2003 29 Carillion plc
The Founders’ Equity Plan (FEP) is a one-off scheme which was established as an incentive for those employees capable of making 
a critical contribution to increasing shareholder value. The Executive Directors and certain senior managers were invited to join the 
FEP and invest a percentage of their basic salary in purchasing ordinary shares in Carillion plc. These shares, referred to as the
Investment Shares, were purchased at an average market price of 137.74 pence per share. The Investment Shares are owned and
controlled by the individual, who is free to choose whether to stay in the FEP or sell the shares at any time during the performance
period. Where members of the FEP dispose of an element of their Investment Shares, the options they have been granted will be
proportionately reduced.
For every Investment Share purchased, up to a maximum of four free shares can be awarded, subject to Carillion’s share price
performance. As the performance condition was not attained in the initial four year period, in accordance with the rules, the
performance period is now the five years commencing 31 August 1999 and the performance condition has increased proportionately.
The benchmark share price against which performance will be measured is 138 pence, which was the mid-market price at close 
of business on 31 August 1999. At 31 August 2004, Carillion’s average share price over the previous six weeks must have been at 
least 437.5 pence for the options to be exercisable in full. If the share price does not reach 221.5 pence, the options will not be
exercisable. If the share price increases in between these two prices, options will become exercisable on a pro-rata basis. A nominal 
fee of £1 is payable on the exercise of options.
The performance condition which must be achieved before any free shares are allocated is challenging, but provides a real incentive to
Directors and senior managers who can deliver increasing value for shareholders.
At 31 December 2003, Executive Directors and senior managers held a total of 1,390,653 Investment Shares and options over
5,562,615 shares. Those options not exercised by the tenth anniversary of their grant will lapse.
Executive Share Option Schemes 
Share options have been granted to the Executive Directors and certain senior managers under two Executive Share Option Schemes.
The options were granted at an exercise price equal to the market value of the Company’s shares at the date of grant.
Options under the Inland Revenue Approved Executive Share Option Scheme 1999 (which carries certain tax advantages for UK
employees) and the Executive Share Option Scheme 1999 are exercisable normally between three and ten years after the date of 
grant, subject to the achievement of the performance condition. For options granted between October 1999 and October 2002, the
performance condition requires that the earnings per share of Carillion over a rolling three year period must increase by a percentage
that is not less than the increase in the UK Retail Prices Index over the same period, expressed as a percentage, plus four percentage
points per annum. This performance condition was selected in order to provide an incentive which aligns the interests of executives 
with those of shareholders in growing the Company’s earnings per share. However, as this performance condition no longer complied
with best practice, at the Company’s AGM on 14 May 2003, shareholders were requested to approve, and did approve, that future
options granted under both schemes become exercisable in accordance with the following table:
Average compound annual earnings per share growth
(before exceptional items) in excess of RPI over the 
three year period following grant Percentage of option that becomes exercisable
Less than 4% 0%
4% 30%
4% – 10% 30% – 100% (straight-line basis)
10% or more 100%
To the extent that the performance condition is not met in full at the end of the three year period following grant, there will be 
the opportunity for no more than one re-test of performance (from a fixed base) at the end of the following year.
The first grants of options using this new performance condition were made on 1 July 2003.
The aggregate value of options granted to an employee under the Executive Share Option Schemes cannot normally exceed their 
basic salary in any year without the prior approval of the Remuneration Committee.
At 31 December 2003, options were outstanding over 3,242,367 shares (2002: 2,068,486 shares) under both schemes at exercise
prices ranging from 125.2 pence to 210.7 pence. Annual Report and Accounts 2003 30 Carillion plc
Long Term Incentive Plan
Conditional awards under the Long Term Incentive Plan are made to the Executive Directors and key members of senior management, 
in recognition of the contribution that these individuals can make to the Group’s success.
There is no subscription price for the shares, the award of which is conditional on the Company’s performance during a three-year
period in delivering Total Shareholder Return (TSR) against a comparator group of ten companies in the Construction and Building
Materials and Support Services sectors. The awards will vest in full only if Carillion achieves first place. If the Company’s ranking is 
sixth, 30% of the awards will vest. If ranking is below sixth, none of the awards will vest. Conditional awards using this performance
condition were made in the years 2000 to 2002.
However, as the Remuneration Committee considered that with a comparator group of ten companies, the removal of one company
(through take-over or otherwise) would have a proportionately greater impact on the extent of the potential vesting of awards than
would be the case if the comparator group was larger, shareholders at the 2003 AGM approved that future awards granted under 
the Long Term Incentive Plan would be subject to Carillion’s TSR performance against an expanded group of 12 companies from 
the Construction and Building Materials and Support Services sectors, over the three years following grant. 30% of an award will 
vest at the median, with awards vesting in full for performance in the top 10% of the comparator group (with straight line vesting 
between these points).
The companies comprising the comparator group for Long Term Incentive Plan conditional awards made in January 2001 are Amec plc,
WS Atkins plc, Balfour Beatty plc, Interserve plc, Jarvis plc, Kier Group plc, Alfred McAlpine plc, Mowlem plc and Taylor Woodrow plc.
(Amey plc was in the comparator group but was removed as it delisted from the London Stock Exchange in June 2003.) The same
comparator group is also used for the conditional awards made in 2003 with the addition of Morgan Sindall plc, John Laing plc and
Serco plc.
The first awards with this performance condition were made on 1 July 2003.
The performance conditions were chosen in order to align the interests of Directors and senior managers with those of shareholders 
in growing total shareholder return against comparator companies operating in similar sectors.
It is intended that conditional awards under the Plan will be made annually.
At 31 December 2003, conditional awards were outstanding over a total of 2,715,234 shares.
Conditional awards made to Executive Directors under these long-term incentive plans are set out in the table of share incentives 
below. The awards represent the maximum number of shares that could be awarded to Executive Directors under the performance
periods commencing on 1 January 2001 and 1 July 2003. The monetary value of the conditional awards attributed to each Director
was based on their annual basic salary at the date of award and the number of shares was calculated using the share prices of 
120.3 pence and 162.1 pence, the average share prices over the six weeks immediately before the commencement of the respective 
performance periods.
Remuneration Report 
continued Total Shareholder Return (TSR) Performance Graph
The following graph shows the TSR of Carillion plc compared with the TSR of the FTSE 350 Index for the period from 30 July 1999,
the day dealings in Carillion shares commenced on the London Stock Exchange, to 31 December 2003. 
Total Shareholder Return 30 July 1999 to 31 December 2003
––– Carillion – Total Return Index
––– FTSE Actuaries 350 – Total Return Index
The FTSE 350 was chosen as the comparator group in order to illustrate the Company’s TSR performance against a broad equity 
market index of the UK’s leading companies.
The Sharesave Scheme
The Company has established a Sharesave Scheme which provides a savings and investment opportunity for employees in the UK. 
The options may normally be exercised on completion of a three or five year savings contract, at a price equivalent to not less than
80% of the market value of the shares at the time of grant. Options were granted in November 1999 over 6,140,194 shares and in
October 2002 over 3,995,803 shares. 
The three-year options granted in November 1999 became exercisable on 1 January 2003 for a period of six months. Options over a
total of 1,400,766 shares were exercised during the year.
At 31 December 2003, options over 4,839,716 ordinary shares of 50p each were outstanding under this scheme (2002: 7,302,280
ordinary shares of 50p each), exercisable on various dates up to June 2006 at exercise prices of either 109.1 pence or 126.6 pence.
Annual Report and Accounts 2003 31 Carillion plc
300
250
200
150
100
50
25
75
1999 2000 2001 2002 2003 Annual Report and Accounts 2003 32 Carillion plc
Share incentives of Directors of Carillion plc
The number of awards or options held by Executive Directors of the Company under the Founders’ Equity Plan or the Long Term
Incentive Plans is detailed below:
Conditional
As at awards/options As at
1 January granted 31 December Date and mid-market
2003 during the year Lapsed 2003 price at date of award
Sir Neville Simms
FEP (maximum) 987,364 – – 987,364 01.11.1999 125p
LTIP 2000 (maximum) 308,914 – 308,914 Nil 07.01.2000 112p
John McDonough
LTIP 2001 (maximum) 270,157 – – 270,157 09.01.2001 135.5p
LTI Agreement 2001 (maximum) 191,041 – 191,041 Nil 09.01.2001 135.5p
LTIP 2003 (maximum) – 118,739 – 118,739 01.07.2003 159p
Chris Girling
FEP (maximum) 580,804 – – 580,804 01.11.1999 125p
LTIP 2000 (maximum) 183,142 – 183,142 Nil 07.01.2000 112p
LTIP 2001 (maximum) 187,032 – – 187,032 09.01.2001 135.5p
LTIP 2003 (maximum) – 75,561 – 75,561 01.07.2003 159p
Roger Robinson
FEP (maximum) 609,844 – – 609,844 01.11.1999 125p
LTIP 2000 (maximum) 191,968 – 191,968 Nil 07.01.2000 112p
LTIP 2001 (maximum) 191,188 – – 191,188 09.01.2001 135.5p
LTIP 2003 (maximum) – 77,103 – 77,103 01.07.2003 159p
The auditors are required to report on the information contained in the above table.
The number of options over Carillion plc shares held by Executive Directors of the Company under the Executive Share Option and
Sharesave schemes is detailed below:
Earliest
As at Granted As at date from
1 January during 31 December Exercise which
2003 the year Exercised 2003 price exercisable Expiry date
John McDonough
ESOS 2001 501,930 – – 501,930 129.5p 09.01.04 09.01.11
ESOS 2002 254,532 – – 254,532* 210.7p 07.01.05 07.01.12
ESOS 2003 – 188,494 – 188,494 163.4p 01.07.06 01.07.13
Chris Girling
ESOS 2003 – 119,950 – 119,950 163.4p 01.07.06 01.07.13
Roger Robinson
Sharesave 2,699 – 2,699 Nil 109.1p – –
ESOS 2003 – 122,398 – 122,398 163.4p 01.07.06 01.07.13
The auditors are required to report on the information contained in the above table.
*The option over 254,532 shares at an option price of 210.7p granted to John McDonough in March 2002 under the Executive Share Option Scheme 1999 was made later 
in the year than had been specified at the time of his appointment which resulted in an increased option price of 67.3p. Therefore, in order to ensure that he will be in no
worse nor better a position as a result of the delay in the grant, a maximum cash adjustment of 67.3p per share (less tax) will be made when and if the option is exercised.
There have been no changes to the interests of Executive Directors in share incentives and options in the period 1 January to 
10 March 2004. The performance conditions for the options shown in the table are as described under the summaries of the relevant
schemes in this report and have been chosen for the reasons described in those paragraphs.
Remuneration Report 
continued Annual Report and Accounts 2003 33 Carillion plc
Employee Benefit Trusts
An employee benefit trust has been established to acquire shares in Carillion plc and hold them for the benefit of participants 
in the Founders’ Equity Plan and the Long Term Incentive Plan. At 31 December 2003, the Trust held 4,892,592 Carillion shares 
(2002: 4,736,226 shares) (2.2% of the issued share capital and a nominal value of £2.5 million) acquired over a period in the 
open market for a consideration of £6.2 million. The market value of the shares held at 31 December 2003 was £7.4 million 
(2002: £5.3 million).
Additionally, a Qualifying Employee Share Ownership Trust (QUEST) operates in conjunction with Carillion in providing shares to
employees under its Sharesave Scheme. At 31 December 2003, the QUEST held 1,313,936 Carillion shares (2002: 1,753,411 shares)
(0.6% of the issued share capital and a nominal value of £0.7 million (2002: 0.8% and £0.9m)) at subscription prices of 117.5,115.5 
and 155.0 pence per share, to enable it to satisfy, as and when required, options granted under the Sharesave Scheme. The market
value of the shares held by the QUEST at 31 December 2003 was £2.0 million (2002: £1.9 million).
For details of dividends paid to the above trusts see Notes 15 and 24 to the Accounts on pages 55 and 62.
Directors’ share interests
Ordinary shares
The beneficial interests of the Directors and their immediate families in the ordinary share capital of the Company are shown below:
As at As at
1 January 31 December 
Fully paid 50p ordinary shares owned: 2003 2003
Executive Directors
John McDonough 374,976 386,682
Chris Girling 145,201 145,201
Roger Robinson 175,078 177,777
Non-Executive Directors
Sir Neville Simms 427,041 427,041
Roger Dickens 22,043 22,043
Jean-Paul Parayre 153,349 155,007
Andrew Parrish 26,029 26,029
There has been no change in Directors’ interests in the period 1 January to 10 March 2004.
The closing mid-market price of Carillion shares at 31 December 2003 and the highest and lowest mid-market prices during the year
were as follows:
Share price
31 December 2003 151.25 pence
High 186.5 pence (21 October 2003)
Low 111.5 pence (1 January 2003)
Approved by order of the Board
A R Parrish
Chairman of the Remuneration Committee
10 March 2004 Annual Report and Accounts 2003 34 Carillion plc
Report of the Directors 
The Directors of Carillion plc present their annual report, together with the audited financial statements for the year ended 
31 December 2003. 
Principal activities and business review
Carillion is one of the UK’s leading Business and Construction Services groups, operating throughout the UK and in a number of
overseas regional markets.
A review of the Group’s businesses, financial performance and future developments is contained in the Chairman’s Statement, 
Chief Executive’s Review and Operating and Financial Review.
Analyses of turnover, results and net assets by business segment and geographical location are given in Note 2 on pages 46 and 47.
Profits and dividends
The consolidated profit and loss account is shown on page 38. The profit on ordinary activities before taxation amounted to 
£23.8 million (2002: £42.2 million). An interim dividend of 1.575 pence per ordinary share (2002: 1.5 pence) was paid in 
November 2003. It is proposed to pay a final dividend of 3.475 pence per ordinary share (2002: 3.3 pence), together with the
additional dividend of 1.7p announced in November and due to Carillion’s sale of its equity interest in the Darent Valley Hospital 
PPP concession, on 25 June 2004 to shareholders on the register at the close of business on 30 April 2004. The payment of these
dividends amounts to £14.1 million (2002: £9.9 million).
A dividend reinvestment plan (DRIP) will also be offered.
Directors
The Directors of the Company who served during 2003 are shown on page 27 of the Remuneration Report. Biographical details for
each Director at 31 December 2003 are given on page 19.
In accordance with the Articles of Association, Sir Neville Simms, Roger Dickens, John McDonough and Jean-Paul Parayre retire by
rotation and, being eligible, offer themselves for re-election. John McDonough has a contract of service which is subject to a year’s
notice of termination by the Company. 
The interests of the Directors and their families in the share capital of the Company are shown in the Remuneration Report on 
page 33.
Employees
Information relating to employee numbers and remuneration is given in Note 6 on page 49.
Employees are key to achieving Carillion’s business strategy and the Group is committed to improving their skills through training 
and development and nurturing a culture in which employees feel valued for their contribution and are motivated to achieve their 
full potential. 
In addition, Carillion’s core values of openness, collaboration and mutual dependency have been developed to emphasise the
changing working practices required to succeed in an environment where partnership and integrated solutions are becoming the
norm. 
It is the aim of Carillion to foster a working environment in which all employees are treated with courtesy, dignity and respect.
Carillion continually strives to eliminate all bias and unlawful discrimination in relation to job applicants, employees, business partners
and members of the public. Employees who become disabled are, wherever possible, retrained or provided with equipment so that
they can continue their employment.
Carillion places great importance on open and regular communication with employees through both formal and informal processes.
As part of this commitment, a Group newspaper, ‘Spectrum’, is produced on a regular basis for all employees. The views of
employees on matters affecting their interests are also sought, and during the year a new initiative known as ‘The Great Debate’ was
launched, under which a number of forums were held throughout the Group to encourage employees to express their views on a
range of activities relating to their jobs and the Group. These views will be taken into account in the development of future work
related initiatives as part of Carillion’s strategy to become an employer of choice. Employees can also exchange best practice
information on a Knowledge Management Forum on the Group intranet.
Involvement in the Group is also encouraged through means such as the periodic grant of share options under the Sharesave Scheme
which gives all UK employees the opportunity to have a financial stake in the Company. 
Carillion seeks to involve all employees in its leading edge programmes to integrate safety into everything it does and to improve its
environmental performance, including the understanding and application of the principles of sustainability. Further information on
Health and Safety, the Environment and Community is given in the Sustainability Review on pages 14 to 17. Annual Report and Accounts 2003 35 Carillion plc
Substantial share interests
At 10 March 2004, the Company had received formal notification of the following substantial interests in the ordinary share capital of
the Company:
Number of shares held Percentage
Schroder Investment Management Limited 35,745,906 16.70
Fidelity Investment Services Limited 21,422,263 10.01
Morley Fund Management Limited 11,547,947 5.40
Policy for payment of suppliers
It is the policy of the Group that each business agrees terms and conditions for transactions with its suppliers and for payment to be
made on these terms providing the suppliers meet their obligations to the businesses’ satisfaction. The Group as a whole therefore 
does not apply a general recognised code with regard to the payment of all suppliers. The Company does not have any trade creditors.
The number of days credit outstanding for the Group averaged 67 days at 31 December 2003 (64 days at 31 December 2002).
Charitable and political contributions
Payments for charitable purposes made by the Group during the year ended 31 December 2003 amounted to £67,000 (2002: £96,000).
The Company and its subsidiaries made no political donations during the period under review.
Annual General Meeting
The notice of and related information on the Company’s Annual General Meeting to be held on 12 May 2004 is included in separate
documents posted to shareholders with this annual report and accounts.
Amongst the business to be transacted is a proposal to renew the authority for the Company to purchase its own shares. As at 
31 December 2003, the Company had authority from shareholders for the purchase of 21,299,201 of its own shares.
Auditor
Resolutions to re-appoint KPMG Audit Plc as auditor and to authorise the Directors to determine its remuneration will be proposed at
the forthcoming Annual General Meeting.
Approved by order of the Board
R F Tapp
Secretary
10 March 2004 Annual Report and Accounts 2003 36 Carillion plc
Statement of Directors’ Responsibilities
Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state
of affairs of the Company and Group and of the profit or loss for that period. In preparing those financial statements, the Directors
are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent; 
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained 
in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue 
in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities. Annual Report and Accounts 2003 37 Carillion plc
We have audited the financial statements on pages 38 to 72. We have also audited the information in the Directors’ remuneration
report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our
audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of Directors and Auditors
The Directors are responsible for preparing the Annual Report and the Directors’ remuneration report. As described on page 36, 
this includes responsibility for preparing the financial statements in accordance with applicable United Kingdom law and accounting
standards. Our responsibilities, as independent auditors, are established in the United Kingdom by statute, the Auditing Practices
Board, the Listing Rules of the Financial Services Authority, and by our profession’s ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements
and the part of the Directors’ remuneration report to be audited have been properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the Directors’ report is not consistent with the financial statements, if the Company
has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if
information specified by law regarding Directors’ remuneration and transactions with the Group is not disclosed.
We review whether the statement on page 20 reflects the Company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules, and we report if it does not. We are not required to consider whether the Board’s
statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate
governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report, including the corporate governance statement and the unaudited
part of the Directors’ remuneration report, and consider whether it is consistent with the audited financial statements. We consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. 
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the Directors’
remuneration report to be audited. It also includes an assessment of the significant estimates and judgements made by the Directors
in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order 
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors’
remuneration report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the
part of the Directors’ remuneration report to be audited.
Opinion
In our opinion:
• the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2003
and of the profit of the Group for the year then ended; and 
• the financial statements and the part of the Directors’ remuneration report to be audited have been properly prepared in accordance
with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
Birmingham
10 March 2004
Independent Auditors’ Report to the members of Carillion plc Annual Report and Accounts 2003 38 Carillion plc
Consolidated Profit and Loss Account
for the year ended 31 December 2003
2003 2002
Before Exceptional Before Exceptional
exceptional items exceptional items
items (see Note 3) Total items (see Note 3) Total
Note £m £m £m £m £m £m
Total turnover 2 1,977.6 – 1,977.6 1,974.4 – 1,974.4
Less: share of joint ventures’ turnover 2 (116.7) – (116.7) (127.1) – (127.1)
Group turnover 1,860.9 – 1,860.9 1,847.3 – 1,847.3
Cost of sales (1,693.2) – (1,693.2) (1,660.1) – (1,660.1)
Gross profit 167.7 – 167.7 187.2 – 187.2
Administrative expenses (129.6) (33.1) (162.7) (149.4) – (149.4)
Group operating profit 38.1 (33.1) 5.0 37.8 – 37.8
Share of operating profit 
in joint ventures 2 14.3 – 14.3 14.3 – 14.3
Total operating profit 2 52.4 (33.1) 19.3 52.1 – 52.1
Profit on sale of fixed asset 
investments 3 – 11.8 11.8 –––
Profit/(loss) on sale of businesses 3
Group – (1.5) (1.5) – (0.3) (0.3)
Joint ventures – 0.2 0.2 – (5.0) (5.0)
– (1.3) (1.3) – (5.3) (5.3)
Profit on ordinary activities 
before interest 2 52.4 (22.6) 29.8 52.1 (5.3) 46.8
Net interest (payable)/receivable
Group 4 (0.5) – (0.5) 0.6 – 0.6
Joint ventures 4 (4.9) (0.6) (5.5) (5.2) – (5.2)
(5.4) (0.6) (6.0) (4.6) – (4.6)
Profit on ordinary activities 
before taxation 5 47.0 (23.2) 23.8 47.5 (5.3) 42.2
Taxation on profit on 
ordinary activities 8 (13.8) – (13.8) (13.8) 0.9 (12.9)
Profit on ordinary activities 
after taxation 33.2 (23.2) 10.0 33.7 (4.4) 29.3
Equity minority interests (1.7) – (1.7) (2.1) – (2.1)
Profit for the financial year 31.5 (23.2) 8.3 31.6 (4.4) 27.2
Equity dividends 10 (14.1) – (14.1) (9.9) – (9.9)
Retained (loss)/profit for the Group 
and its share of joint ventures 24 17.4 (23.2) (5.8) 21.7 (4.4) 17.3
Earnings per ordinary share 11
Basic 15.2p (11.2p) 4.0p 15.3p (2.1p) 13.2p
Diluted 15.1p (11.1p) 4.0p 15.1p (2.1p) 13.0p
Basic before all exceptional items 
and goodwill amortisation 16.8p 16.6p
Dividends per ordinary share 10 6.75p 4.8p
The above results are wholly derived from continuing operations. Annual Report and Accounts 2003 39 Carillion plc
At At
31 December 31 December
2003 2002
Note £m £m
Fixed assets
Intangible assets 12 21.3 49.0
Tangible assets 13 68.1 56.9
Investments in joint ventures: 14
Share of gross assets 639.7 646.1
Share of gross liabilities (599.7) (606.8)
40.0 39.3
Loan advances 33.1 21.7
73.1 61.0
Other investments 15 6.3 6.1
Total investments 79.4 67.1
168.8 173.0
Current assets
Stocks 16 46.3 43.7
Debtors 17 511.3 523.6
Investments 18 4.7 8.2
Cash at bank and in hand 128.1 85.1
690.4 660.6
Creditors: amounts falling due within one year 19
Borrowings (14.0) (20.4)
Other creditors (621.2) (574.9)
(635.2) (595.3)
Net current assets
Due within one year 26.1 42.3
Debtors due after more than one year 17 29.1 23.0
55.2 65.3
Total assets less current liabilities 224.0 238.3
Creditors: amounts falling due after more than one year 20
Borrowings (53.9) (66.8)
Other creditors (7.6) (13.7)
(61.5) (80.5)
Provisions for liabilities and charges 22 (4.7) (8.1)
Net assets 157.8 149.7
Financed by:
Capital and reserves
Called up share capital 23 107.0 106.5
Share premium account 24 6.5 5.5
Merger reserve 24 8.2 8.2
Profit and loss account 24 33.8 27.3
Equity shareholders’ funds 155.5 147.5
Equity minority interests 2.3 2.2
157.8 149.7
The financial statements on pages 38 to 72 were approved by the Board of Directors on 10 March 2004 and were signed on its behalf by: 
John McDonough Chief Executive Chris Girling Finance Director
Consolidated Balance Sheet Annual Report and Accounts 2003 40 Carillion plc
Company Balance Sheet
At At
31 December 31 December
2003 2002
Note £m £m
Fixed assets
Investments in subsidiary undertakings and joint ventures 14 153.9 166.3
Other investments 15 6.2 6.0
160.1 172.3
Current assets
Debtors 17 92.1 248.0
Cash at bank and in hand 56.4 2.9
148.5 250.9
Creditors: amounts falling due within one year 19
Borrowings (2.9) (23.4)
Other creditors (96.7) (191.7)
(99.6) (215.1)
Net current assets
Due within one year 12.3 16.6
Debtors due after more than one year 17 36.6 19.2
48.9 35.8
Total assets less current liabilities 209.0 208.1
Creditors: amounts falling due after more than one year 20
Borrowings (50.0) (64.2)
Net assets 159.0 143.9
Financed by:
Capital and reserves
Called up share capital 23 107.0 106.5
Share premium account 24 6.5 5.5
Profit and loss account 24 45.5 31.9
Equity shareholders’ funds 159.0 143.9
The financial statements on pages 38 to 72 were approved by the Board of Directors on 10 March 2004 and were signed on its 
behalf by:
John McDonough Chief Executive Chris Girling Finance Director Annual Report and Accounts 2003 41 Carillion plc
Year ended Year ended
31 December 31 December
2003 2002
Note £m £m
Net cash inflow from operating activities 28(a) 84.2 1.1
Distributions received from joint ventures 14.7 3.8
Returns on investments and servicing of finance 
Dividend paid to minority interests (1.6) (3.2)
Interest paid (5.6) (5.3)
Finance lease charges (0.4) (0.1)
Interest received 5.5 5.9
Net cash outflow from returns on investments and servicing of finance (2.1) (2.7)
Corporate taxation received/(paid) 0.5 (9.0)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (15.6) (21.0)
Payments to acquire fixed asset investments – (0.1)
Sale of current asset investments 3.5 0.9
Purchase of own shares by ESOP (0.2) –
Sale of tangible fixed assets 1.5 4.8
Net cash outflow from capital expenditure and financial investment (10.8) (15.4)
Acquisitions and disposals
Purchase of businesses 29(a) – (8.9)
Sale of businesses 29(b) 4.6 0.3
Purchase of equity investment in joint ventures 29(a) (0.4) (0.1)
Sale of equity investment in joint ventures 29(b) 5.1 –
Loan advances to joint ventures (14.9) (2.5)
Net cash outflow from acquisitions and disposals (5.6) (11.2)
Equity dividends paid (10.1) (9.3)
Net cash inflow/(outflow) before management of liquid resources and financing 70.8 (42.7)
Management of liquid resources
Increase in short term deposits (25.4) (10.6)
Net cash outflow from management of liquid resources 28(c) (25.4) (10.6)
Financing
Net (repayment)/drawdown of debt 28(c) (20.9) 45.0
Repayment of finance leases 28(c) (2.2) (2.5)
Issue of share capital 1.5 0.4
Net cash (outflow)/inflow from financing (21.6) 42.9
Increase/(decrease) in cash in the year 28(c) 23.8 (10.4)
Consolidated Cash Flow Statement Annual Report and Accounts 2003 42 Carillion plc
Consolidated Statement of Total Recognised Gains and Losses
2003 2002
£m £m
Profit for the financial year
Group 2.7 25.0
Joint ventures 5.6 2.2
8.3 27.2
Exchange rate movements (1.3) (1.4)
Total recognised gains and losses for the year 7.0 25.8
Reconciliation of Movements in Consolidated Equity Shareholders’ Funds
2003 2002
£m £m
Profit for the financial year
Group 2.7 25.0
Joint ventures 5.6 2.2
8.3 27.2
Equity dividends (14.1) (9.9)
Retained (loss)/profit for the Group and its share of joint ventures (5.8) 17.3
Exchange rate movements (1.3) (1.4)
New share capital subscribed by QUEST 1.5 0.2
Other new share capital issued – 0.2
Transfer arising on issue of shares to QUEST – (0.2)
Goodwill written back on disposal 5.5 –
Impairment of goodwill previously written off to reserves 8.1 –
Net addition to equity shareholders’ funds 8.0 16.1
Opening equity shareholders’ funds 147.5 131.4
Closing equity shareholders’ funds 155.5 147.5 Annual Report and Accounts 2003 43 Carillion plc
1. Principal accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to 
the Group’s financial statements. 
On adoption of FRS 5 Application Note G: ‘Revenue Recognition’, the Directors have considered the Group’s revenue recognition
policies and believe them to be consistent with the requirements of the Application Note.
Basis of preparation
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain
tangible fixed assets comprising land and buildings, and in accordance with applicable UK accounting standards.
Following the announcement made by Network Rail on 24 October 2003 that it intends to terminate rail maintenance contracts by
September 2004, the Directors have performed a review of the Group’s rail maintenance business and its associated assets. In light 
of the Network Rail contracts ending, an impairment of goodwill originally recognised on the acquisition of GT Railway Maintenance
Holdings Limited has been made of £33.1m (see Note 12). In addition, there is a degree of uncertainty concerning the carrying value
of certain fixed assets, stocks and debtors that relates to the Network Rail contracts. At the date of approval of the financial
statements, the potential transfer of these assets to Network Rail is subject to on-going discussions. In the opinion of the Directors,
the realisable value of these assets are not expected to be significantly different from their carrying values. Therefore, the financial
statements have been prepared on the basis that there are no material adjustments required to the carrying value of these assets 
as at 31 December 2003.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries drawn up to 
31 December 2003. Unless otherwise stated the acquisition method of accounting has been applied. Under this method acquired
subsidiaries are included from the date of acquisition. Disposals are accounted for up to the date control passes to a third party.
A joint venture is an undertaking in which the Group has a long term interest and over which it exercises joint control. The Group’s
share of the profits less losses of joint ventures is included in the consolidated profit and loss account and its interest in their net
assets (other than goodwill) is included in investments in the consolidated balance sheet.
Where a Group company is party to a joint arrangement that is not an entity, that company accounts directly for its share of the
income and expenditure, assets, liabilities and cash flows. Such arrangements are reported in the consolidated financial statements 
on the same basis.
Fixed asset investments
In the Company’s financial statements, investments in subsidiary undertakings and joint ventures are stated at cost, less provision 
for any impairment.
Company shares held by the Employee Share Ownership Plan (ESOP) Trust are included in both the Group and Company financial
statements as a fixed asset investment until such time as the interest in the shares is transferred unconditionally to the employees. 
The purchase costs of the shares are charged to the profit and loss account where they cannot be recovered so as to spread the 
costs over the relevant performance period of the plans. Costs of administering the trust are charged to the profit and loss account 
as incurred. The ESOP trust is regarded as a quasi subsidiary under FRS 5 ‘Reporting the substance of transactions’ and its assets,
liabilities and results are consolidated into the financial statements of both the Company and the Group.
Goodwill
Goodwill arising on acquisitions, being the difference between the fair value of the purchase consideration and the fair value of the
identifiable net assets of an acquired company or business, including an interest in a joint venture, is capitalised and amortised in
equal annual instalments over its useful economic life.
Prior to 1 January 1998, goodwill was written off to reserves on acquisition. In accordance with the transitional provisions of 
FRS 10 ‘Goodwill and intangible assets’, this treatment has continued to be applied for those years. Any such goodwill previously
written off to reserves is included in the calculation of any profit or loss on disposal in respect of businesses subsequently disposed 
of or terminated. Any impairment arising on goodwill that has previously been written off to reserves is taken to the profit and 
loss account.
Notes to the Financial Statements Annual Report and Accounts 2003 44 Carillion plc
Notes to the Financial Statements 
continued
1. Principal accounting policies (continued)
Long term contract balances
Amounts recoverable on contracts, which are included in debtors, are stated at cost plus attributable profit less any foreseeable
losses. Payments received on account of contracts are deducted from amounts recoverable on contracts in debtors or long term
contract balances in stock. Where such amounts have been received and exceed amounts recoverable the net amounts are included
in creditors.
Profit recognition
Profit on long term contracts is calculated in accordance with applicable accounting standards. In determining the attributable profit
on contracts to a particular accounting period the Group utilises estimation techniques. The principal estimation technique used is the
preparation of profit and cash flow forecasts on a contract by contract basis which enables an assessment to be made of the final out
turn on each contract. Profit is then recognised when the outcome of the contract can be foreseen with reasonable certainty and is
attributed in line with the degree of completion of each contract. 
The result for each year includes settlement of claims on contracts completed in prior years. In preparing contract forecasts, a prudent
and reasonable evaluation of claims is included in the assessment of the final out turn. 
Property development profits are recognised on contractual completion.
Group turnover 
Group turnover represents the fair value of consideration receivable, excluding value added tax, for goods and services supplied to
external customers. In respect of long term contracting activities, turnover reflects the fair value of work executed during each year. 
It also includes the Group’s proportion of work carried out under joint arrangements during the year. 
Stocks
Stocks and work in progress are valued at the lower of cost and net realisable value. Cost includes appropriate overheads.
Tangible fixed assets
The Group has continued to follow the transitional provisions of FRS 15 ‘Tangible fixed assets’ to retain the book value of freehold
land and buildings, which were last revalued in 1985.
Depreciation is based on historical cost or revaluation, less the estimated residual values, and the estimated economic lives of the
assets concerned. Freehold land is not depreciated. Other tangible assets are depreciated in equal annual instalments over the period
of their estimated economic lives, which are principally as follows:
Freehold buildings 50 years
Long leasehold land and buildings 50 years
Short leasehold land and buildings Period of lease
Plant, machinery and vehicles 3–10 years
Leased assets
Operating lease rental charges are charged to the profit and loss account on a straight-line basis over the life of each lease.
Assets held under finance leases and hire purchase contracts are included in tangible fixed assets and are depreciated over the shorter
of the contract term or their useful life. The capital element of outstanding finance leases and hire purchase contracts is included in
creditors. The finance charge element of rentals is charged to the profit and loss account at a constant periodic rate of charge on the
outstanding obligations.
Taxation
The charge for taxation is based on the result for each year and takes into account deferred taxation. Deferred tax assets or liabilities
arise from timing differences between the recognition of gains and losses in the financial statements and their recognition in the tax
computation. Liabilities are calculated on a non-discounted full provision basis. Assets are calculated on the same basis, but are
recognised only to the extent that it is probable that they will be recovered. Annual Report and Accounts 2003 45 Carillion plc
1. Principal accounting policies (continued)
Foreign currencies
Transactions denominated in foreign currencies are translated into sterling and recorded using the contracted exchange rate.
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the exchange rates ruling at the
relevant balance sheet date and the gains and losses on translation are included in the profit and loss account.
The profit and loss accounts and balance sheets of overseas undertakings and joint ventures are translated into sterling at the rates of
exchange ruling at the end of the financial year. Gains or losses arising on the translation of the opening net assets of such overseas
undertakings are taken to reserves together with exchange differences on related foreign currency hedges.
Share incentive schemes
Where share incentives are granted with an exercise price of less than the market price at the date of grant the difference is charged
to the profit and loss account over the period to the exercisable date of the incentives. Due regard is made to the likelihood of the
stipulated performance criteria being attained with the charge being amended accordingly.
No cost is recognised in respect of SAYE schemes that are offered on similar terms to all or substantially all employees as permitted by
UITF 17 ‘Employee Share Schemes’.
Pensions
Pension costs are recognised in the financial statements in accordance with the requirements of SSAP 24 ‘Accounting for pension costs’.
Regular pension costs in respect of the Group’s defined benefit pension schemes are established in accordance with the
recommendations of independent actuaries and are charged to the profit and loss account based on the expected pension costs over
the employees’ service lives with the Group. Current actuarial surpluses or deficits are amortised over the average expected remaining
service lives of current employees on a systematic basis. The difference between the amounts charged or credited to the profit and
loss account and the contributions made to the pension schemes is included within debtors or creditors as appropriate. Contributions
to the Group’s defined contribution schemes are charged to the profit and loss account as incurred.
The Group continues to follow the transitional provisions as permitted by FRS 17 ‘Retirement benefits’ at 31 December 2003 which
are disclosed in Note 30.
Bid costs 
Pre-contract costs are expensed as incurred until the Group is appointed preferred bidder. Provided the contract is expected to
generate sufficient net cash inflows to enable recovery and the award of the contract is virtually certain, pre-contract costs incurred
post the appointment as preferred bidder are included in stocks. Where pre-contract bid costs are reimbursed at financial close, the
proceeds are initially applied against the asset included in stocks. Any excess recoveries are carried forward as deferred income and
released to profit over the period of the contract to which the pre-contract costs relate.
Interest
Interest is written off to the profit and loss account as incurred by all subsidiaries in the Group.
Interest incurred on borrowings within the Group’s joint ventures relating to the construction of assets in PPP projects is capitalised
until the relevant assets are brought into operational use. Annual Report and Accounts 2003 46 Carillion plc
Notes to the Financial Statements 
continued
2. Analysis of turnover, profit before interest and net assets
Total turnover Net assets/(liabilities)
2003 2002 2003 2002
Class of business £m £m £m £m
Investments 67.5 61.6 46.5 32.2
Business services 933.5 821.7 (22.4) 60.9
Construction services 1,001.8 1,125.4 106.3 64.2
Internal trading (25.2) (34.3) – –
Corporate centre – – (48.4) (12.9)
Net cash – – 75.8 5.3
1,977.6 1,974.4 157.8 149.7
Geographical origin:
UK 1,633.2 1,694.4 85.9 153.4
Europe 212.3 146.9 (17.5) (23.7)
Rest of the World 132.1 133.1 13.6 14.7
Net cash – – 75.8 5.3
1,977.6 1,974.4 157.8 149.7
The analysis of turnover by geographical market served is not materially different from that by geographical origin.
Profit on ordinary activities before interest
2003 2002
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
Class of business £m £m £m £m £m £m
Investments 8.5 11.8 20.3 7.8 – 7.8
Business services 47.5 (32.8) 14.7 36.4 – 36.4
Construction services 5.5 (1.6) 3.9 17.0 (5.3) 11.7
Corporate centre (9.1) – (9.1) (9.1) – (9.1)
52.4 (22.6) 29.8 52.1 (5.3) 46.8
Geographical origin:
UK 48.6 (23.0) 25.6 50.1 (5.3) 44.8
Europe 3.9 – 3.9 (0.9) – (0.9)
Rest of the World (0.1) 0.4 0.3 2.9 – 2.9
52.4 (22.6) 29.8 52.1 (5.3) 46.8 Annual Report and Accounts 2003 47 Carillion plc
2. Analysis of turnover, profit before interest and net assets (continued)
The Group’s share of the turnover and net assets in joint ventures was as follows:
Turnover Net assets/(liabilities)
2003 2002 2003 2002
Class of business £m £m £m £m
Investments 65.1 60.9 50.8 38.8
Business services 3.8 0.6 (1.6) –
Construction services 47.8 65.6 23.9 22.2
116.7 127.1 73.1 61.0
Geographical origin:
UK 71.7 89.4 68.1 56.7
Europe 2.3 3.6 (2.8) (2.6)
Rest of the World 42.7 34.1 7.8 6.9
116.7 127.1 73.1 61.0
The Group’s share of the profit on ordinary activities before interest in joint ventures was as follows:
2003 2002
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
Class of business £m £m £m £m £m £m
Investments 11.5 – 11.5 12.5 – 12.5
Business services (1.9) – (1.9) –––
Construction services 4.7 0.2 4.9 1.8 (5.0) (3.2)
14.3 0.2 14.5 14.3 (5.0) 9.3
Geographical origin:
UK 12.0 – 12.0 13.0 (5.0) 8.0
Europe 0.2 – 0.2 –––
Rest of the World 2.1 0.2 2.3 1.3 – 1.3
14.3 0.2 14.5 14.3 (5.0) 9.3 Annual Report and Accounts 2003 48 Carillion plc
3. Exceptional items
2003 2002
Gross Tax Gross Tax
Operating items £m £m £m £m
Group:
Impairment of goodwill (see Note 12) 25.0 – ––
Impairment of goodwill previously written off to reserves (see Note 12) 8.1 – ––
33.1 – ––
Non-operating items:
Group:
Profit on sale of fixed asset investments (11.8) – – –
Loss on sale of businesses 1.5 0.2 0.3 –
(10.3) 0.2 0.3 –
Joint ventures:
(Profit)/loss on sale of businesses (0.2) – 5.0 (0.9)
Interest payable (see Note 4) 0.6 (0.2) ––
(9.9) – 5.3 (0.9)
23.2 – 5.3 (0.9)
Further disclosure on the Group’s sale of businesses and fixed asset investments during 2003 can be found in Note 29(b). The profit on
sale of businesses of £0.2m in joint ventures relates to the disposal of a materials testing business in the Middle East. 
4. Net interest (payable)/receivable
2003 2002
Group £m £m
Interest receivable:
Bank interest receivable 1.0 2.0
Other interest receivable 4.5 3.9
5.5 5.9
Interest payable and other similar charges:
Interest payable on bank loans and overdrafts (4.4) (4.0)
Other interest payable and similar charges (1.6) (1.3)
(6.0) (5.3)
Net interest (payable)/receivable (0.5) 0.6
Other interest payable and similar charges includes finance lease charges of £0.4m (2002: £0.1m).
2003 2002
Joint ventures £m £m
Interest receivable:
PPP projects 23.2 13.1
Other joint ventures 0.8 0.7
24.0 13.8
Interest payable and other similar charges:
PPP projects (net of interest capitalised) (28.5) (17.1)
Other joint ventures (1.0) (1.9)
(29.5) (19.0)
Net interest payable (5.5) (5.2)
Included in interest payable and other similar charges relating to PPP projects is £0.6m (2002: £Nil) of previously capitalised finance
arrangement costs. These costs were written off following the refinancing of Darent Valley Hospital PPP joint venture during the year.
Interest payable by joint ventures on PPP long term projects relates to non-recourse borrowings as detailed in Note 14. For 2003, 
the Group’s share of interest capitalised by joint ventures on PPP long term projects amounted to £8.7m (2002: £15.3m).
Notes to the Financial Statements 
continued Annual Report and Accounts 2003 49 Carillion plc
5. Profit on ordinary activities before taxation
Profit on ordinary activities before taxation has been arrived at after charging/(crediting):
2003 2002
£m £m
Depreciation 15.0 14.6
Reversal of past impairment of tangible fixed assets (2.2) –
Loss/(profit) on sale of tangible fixed assets 0.1 (0.8)
Amortisation of goodwill 3.8 2.7
Impairment of goodwill 33.1 –
Amortisation of own shares – (3.3)
Operating leases:
Hire of plant and machinery
– Short term 20.8 24.6
– Long term 1.4 1.3
Hire of other assets 19.5 17.1
Auditor’s remuneration for Group audit services 1.0 1.0
Auditor’s remuneration for non-audit services 0.1 0.1
Analysis of total fees payable to the Group’s auditors:
2003 2002
£m £m
Audit services 1.0 1.0
Tax advisory services 0.1 0.1
1.1 1.1
Audit fees for the parent company amounted to £25,000 (2002: £24,000). Fees paid to KPMG Audit Plc and its associates by Group
joint venture companies in respect of audit services amounted to £0.1m (2002: £0.1m).
6. Employee numbers and payroll costs
2003 2002
Number Number
The average number of employees during each year including Directors was:
Investments 30 39
Business services 10,555 9,526
Construction services 6,853 6,810
Corporate centre 604 584
18,042 16,959
UK 13,661 13,584
Overseas 4,381 3,375
18,042 16,959
The aggregate payroll costs during each year amounted to:
2003 2002
£m £m
Wages and salaries 395.5 377.9
Social security costs 53.7 44.8
Pension costs 22.1 8.2
471.3 430.9
Pension costs represent amounts in respect of the Group’s UK and overseas schemes as described in Note 30.  Annual Report and Accounts 2003 50 Carillion plc
Notes to the Financial Statements 
continued
7. Directors’ remuneration
Detailed information concerning Directors’ remuneration, including their pension benefits and long term incentive arrangements, is set
out in the Remuneration Report on pages 26 to 33.
8. Taxation
(a) Analysis of taxation charge
2003 2002
£m £m
UK taxation:
Corporation tax 7.1 9.7
Adjustment in respect of previous periods 4.1 1.3
Attributable taxation of joint ventures 3.4 1.9
Overseas taxation:
Current year 2.7 1.1
Adjustment in respect of previous periods (1.5) (0.2)
Total current taxation 15.8 13.8
Deferred taxation:
Origination and reversal of timing differences 5.8 (0.2)
Adjustment in respect of previous periods (7.8) (0.7)
Total deferred taxation (2.0) (0.9)
Total taxation on profit on ordinary activities 13.8 12.9
(b) Reconciliation of current taxation charge
The UK standard rate of corporation tax for the year is 30% (2002: 30%). The actual tax rate differs from the standard rate for the
reasons set out below:
2003 2002
£m £m
Profit on ordinary activities before taxation 23.8 42.2
Taxation on profit on ordinary activities at UK standard rate of corporation tax 7.1 12.7
Permanent differences 3.3 2.4
Other timing differences (5.8) (0.2)
Other timing differences not recognised 1.8 (0.7)
Overseas profits not taxable (0.7) (0.5)
Utilisation of overseas losses not previously recognised (0.9) (1.0)
Unrelieved trade losses in the year 1.3 0.2
Capital items not taxable (3.5) 0.1
Amortisation of own shares – (1.0)
Amortisation and impairment of goodwill 10.6 0.7
Adjustment in respect of previous periods 2.6 1.1
Current taxation charge for the year 15.8 13.8
(c) Factors that may affect future tax charges
The Group has brought forward tax losses in excess of £87m which have not yet been fully agreed by the Inland Revenue. In accordance
with FRS 19 a deferred tax asset, valued in excess of £26m, has not been recognised in respect of these losses due to the lack of certainty
regarding quantum and timing of future years taxable profits in the companies involved. In the event that such profits are realised this may
result in the Group tax rate being lower than the standard rate of corporation tax in the UK.
The tax rate in the joint venture companies in which the Group has PPP investments may be greater than the standard rate of corporation
tax in the UK. This is generally due to capital expenditure not qualifying for tax relief. As the PPP element of the Group’s profit before
taxation increases in future years it will have the effect of increasing the Group’s tax rate above the standard rate of corporation tax in the
UK. This may be offset by the developing trend for composite trade tax treatment whereby all income and expenditure is treated as on
trading account for tax purposes. Annual Report and Accounts 2003 51 Carillion plc
9. Profit for the financial year
In accordance with Section 230 (4) of the Companies Act 1985 the Company has taken advantage of the exemption from the
requirement to present its own profit and loss account. The profit for the financial year of the Company is £27.7m (2002: £15.0m).
10. Equity dividends
2003 2002
Pence Pence
£m per share £m per share
Equity shares
Ordinary shares:
Interim 3.3 1.575 3.1 1.5
Final 10.8 5.175 6.8 3.3
Total equity dividends 14.1 6.75 9.9 4.8
The final dividend for 2003 includes 1.7 pence per share that represents a return to shareholders of a proportion of the profit 
generated on the disposal of the Group’s equity shareholding in the Darent Valley Hospital PPP joint venture (see Note 29(b)).
11. Earnings per ordinary share
(a) Basic
Earnings per share is calculated by dividing the profit attributable to ordinary shareholders, amounting to £8.3m (2002: £27.2m), 
by 207,622,166 (2002: 206,450,536) ordinary shares being the weighted average number of shares in issue during the year. The
weighted average number of shares excludes shares held by the Employee Share Ownership Plan (see Note 15) and the QUEST (see
Note 24), which amount to 6,206,528 shares in total (2002: 6,489,637).
(b) Basic before all exceptional items and goodwill amortisation
A reconciliation of the basic earnings per ordinary share to the adjusted amounts shown on the face of the profit and loss account 
is calculated below to show the impact of all exceptional items (as disclosed in Note 3) and the amortisation charge from goodwill 
(as disclosed in Note 12):
2003 2002
Pence Pence
£m per share £m per share
Profit attributable to ordinary shareholders 8.3 4.0 27.2 13.2
Exceptional items:
Impairment of goodwill 33.1 15.9 ––
Profit on sale of fixed asset investments (11.8) (5.6) ––
Loss on sale of businesses 1.3 0.6 5.3 2.5
Interest payable 0.6 0.3 ––
Less taxation in respect of the above –– (0.9) (0.4)
Profit before all exceptional items 31.5 15.2 31.6 15.3
Amortisation of goodwill 3.8 1.8 2.7 1.3
Less taxation in respect of the above (0.4) (0.2) (0.1) –
Profit before all exceptional items and goodwill amortisation 34.9 16.8 34.2 16.6
(c) Diluted
Diluted earnings per ordinary share have been calculated on both profit before and after all exceptional items, using the same earnings
numerators as set out in (a) and (b) above and by reference to the following number of shares:
Number of ordinary shares
2003 2002
million million
Number of ordinary shares per basic earnings per share calculations 207.6 206.5
Adjustments to reflect dilutive shares under option 1.7 2.1
Number of ordinary shares per diluted earnings per share calculations 209.3 208.6 Annual Report and Accounts 2003 52 Carillion plc
Notes to the Financial Statements 
continued
12. Intangible assets
Goodwill
Group £m
Cost:
At 1 January 2003 52.4
Addition 1.1
At 31 December 2003 53.5
Amortisation:
At 1 January 2003 3.4
Provision for year 3.8
Impairment 25.0
At 31 December 2003 32.2
Net book value:
At 31 December 2003 21.3
At 31 December 2002 49.0
The cost of goodwill comprises:
Amortisation 
Year of period Cost
acquisition years £m
Minority interests in French subsidiaries 1998 20 1.8
GT Railway Maintenance Holdings Limited 2001 20 41.7
Citex Management Services contracts 2002 6 8.9
UK Highways Services Limited 2003 4 1.1
53.5
The addition to goodwill relates to the acquisition of an additional 31% of the ordinary share capital of UK Highways Services Limited
as disclosed in Note 29 (a). The goodwill relating to this acquisition is being amortised over four years which is the remaining period 
of the company’s maintenance contract.
The impairment provision of £25.0m relates to the whole of the goodwill in respect of the rail maintenance business of GT Railway
Maintenance Holdings Limited (GTRM). This impairment arises from the decision by Network Rail, announced on 24 October 2003, 
that it intends to take all rail maintenance contracts in-house by September 2004. In addition, there is a further £8.1m impairment 
relating to goodwill that had previously been written off to reserves on the acquisition of 49% of GTRM in 1996 (see Note 24). 
The residual goodwill remaining in GTRM relates to its projects and renewals operations. As from 1 January 2004, this will be 
amortised over six years as in the opinion of the Directors this is the minimum period over which the Group will derive economic 
benefit from the business. Annual Report and Accounts 2003 53 Carillion plc
13. Tangible fixed assets
Plant,
Land and machinery
buildings and vehicles Total
Group £m £m £m
Cost or valuation:
At 1 January 2003 19.2 58.5 77.7
Exchange rate movements 0.1 0.8 0.9
Acquisitions – 1.4 1.4
Additions 1.7 24.3 26.0
Disposals (1.3) (25.0) (26.3)
At 31 December 2003 19.7 60.0 79.7
Depreciation:
At 1 January 2003 4.8 16.0 20.8
Exchange rate movements – 0.7 0.7
Provision for year 1.3 13.7 15.0
Reversal of past impairment (1.2) (1.0) (2.2)
Eliminated in respect of disposals (0.3) (22.4) (22.7)
At 31 December 2003 4.6 7.0 11.6
Net book value:
At 31 December 2003 15.1 53.0 68.1
At 31 December 2002 14.4 42.5 56.9
The reversal of past impairment of £2.2m arises from market improvements since the date of the original impairment in 2001.
Included in the net book value of plant, machinery and vehicles is £14.8m (2002: £6.5m) in respect of assets held under finance leases
and hire purchase contracts. Depreciation for the year in respect of these assets amounted to £1.7m (2002: £1.9m).
The net book value of land and buildings comprises:
2003 2002
Group £m £m
Freehold 7.2 6.9
Long leasehold 4.8 4.5
Short leasehold 3.1 3.0
Net book value 15.1 14.4
The cost or valuation of land and buildings comprises:
2003 2002
Group £m £m
Cost 18.6 18.1
1985 valuation 1.1 1.1
19.7 19.2
The 1985 valuation was on the basis of open market value for existing use.
Freehold land held by the Group amounting to £1.0m (2002: £1.0m) has not been depreciated. Annual Report and Accounts 2003 54 Carillion plc
Notes to the Financial Statements 
continued
14. Investments
Loan Equity
advances investments Total
Group £m £m £m
Investments in joint ventures
Cost:
At 1 January 2003 (see below) 21.7 33.1 54.8
Equity investments (see Note 29 (a)) – 0.5 0.5
Disposals (3.5) (1.0) (4.5)
Net loan advances 14.9 – 14.9
At 31 December 2003 33.1 32.6 65.7
Share of post acquisition results:
At 1 January 2003 6.2 6.2
Exchange rate movements (0.9) (0.9)
Share of results for the year after taxation 5.6 5.6
Disposals 11.2 11.2
Distributions received (14.7) (14.7)
At 31 December 2003 7.4 7.4
Net book value:
At 31 December 2003 33.1 40.0 73.1
At 31 December 2002 21.7 39.3 61.0
Distributions received comprises £10.8m relating to the re-financing of the Darent Valley Hospital PPP joint venture and £3.9m of
dividends received.
During the year it was identified that £13.7m of subordinated loans invested in a number of PPP special purpose companies had been
reported as equity investments in the financial statements for 31 December 2002. In line with UK GAAP these subordinated loans,
previously regarded as ‘quasi-equity’, are more properly disclosed as loan advances. Accordingly, a transfer of £13.7m has been made
from the cost of equity investments to loan advances within investments in joint ventures. There is no impact on the Group’s reported
net assets as at 31 December 2002 or on the Group’s cumulative share of retained profits in the PPP special purpose companies.
The Group’s aggregate share of joint venture net assets is analysed below. The borrowings within PPP projects totalling £516.0m 
(2002: £520.1m) are without recourse to the Carillion Group.
2003 2002
Other Other
PPP Projects joint ventures Total PPP Projects joint ventures Total
£m £m £m £m £m £m
Fixed assets 125.1 6.4 131.5 122.3 12.9 135.2
Cash 41.2 8.4 49.6 58.8 12.7 71.5
Other current assets 401.4 57.2 458.6 387.6 51.8 439.4
Share of gross assets 567.7 72.0 639.7 568.7 77.4 646.1
Borrowings due within one year (21.4) (4.5) (25.9) (22.5) (10.9) (33.4)
Other creditors due within one year (23.0) (40.9) (63.9) (22.0) (41.7) (63.7)
Borrowings due after one year (494.6) (4.3) (498.9) (497.6) (1.2) (498.8)
Other creditors due after one year ––– (1.1) (1.3) (2.4)
Provisions (11.0) – (11.0) (8.4) (0.1) (8.5)
Share of gross liabilities (550.0) (49.7) (599.7) (551.6) (55.2) (606.8)
17.7 22.3 40.0 17.1 22.2 39.3
Loan advances 33.1 – 33.1 21.7 – 21.7
Share of net assets 50.8 22.3 73.1 38.8 22.2 61.0
Fixed assets and other current assets within PPP projects include cumulative capitalised interest amounting to £9.0m (2002: £7.6m) 
and £45.3m (2002: £38.0m) respectively. Annual Report and Accounts 2003 55 Carillion plc
14. Investments (continued)
Subsidiary
undertakings Joint ventures Total
Company £m £m £m
Cost:
At 1 January 2003 166.3 – 166.3
Additions 2.8 0.3 3.1
Disposals (5.6) – (5.6)
Transfer from Group undertakings 0.1 – 0.1
At 31 December 2003 163.6 0.3 163.9
Provision:
At 1 January 2003 –––
Charge in year 10.0 – 10.0
At 31 December 2003 10.0 – 10.0
Net Book Value:
At 31 December 2003 153.6 0.3 153.9
At 31 December 2002 166.3 – 166.3
The principal subsidiary undertakings and joint ventures included within these financial statements are shown on page 74.
The £10.0m provision in the year against subsidiary undertakings relates to the cost of investment in GT Railway Maintenance Holdings
Limited. The provision represents impairment arising from Network Rail’s announcement in October 2003 to take all rail maintenance
contracts in-house (see Note 12).
15. Other investments
Group Company
Other Own shares Total Own shares
£m £m £m £m
Cost:
At 1 January 2003 0.6 6.0 6.6 6.0
Additions – 0.2 0.2 0.2
At 31 December 2003 0.6 6.2 6.8 6.2
Provisions/amortisation:
At 1 January and 31 December 2003 0.5 – 0.5 –
Net book value:
At 31 December 2003 0.1 6.2 6.3 6.2
At 31 December 2002 0.1 6.0 6.1 6.0
The investment in own shares represents shares in the Company held by the Carillion Employee Share Ownership Plan (ESOP), an
employee share ownership trust, which may subsequently be awarded to Executive Directors and senior employees under the Founders’
Equity Plan and the Long Term Incentive Plans. Details of the plans are given in the Remuneration Report on pages 26 to 33.
During the year the trust acquired 156,366 shares in the Company for a consideration of £0.2m. These shares were acquired to satisfy
awards under a deferred Executive bonus scheme. At 31 December 2003 the trust held 4,892,592 (2002: 4,736,226) shares in the
Company with a market value of £7.4m (2002: £5.3m). The nominal value of these shares is £2.5m (2002: £2.4m).
The ESOP trust has elected to waive all dividends except for a total payment of 1p at the time each dividend is paid. Annual Report and Accounts 2003 56 Carillion plc
Notes to the Financial Statements 
continued
16. Stocks
2003 2002
Group £m £m
Raw materials:
Land for development 0.4 0.4
Other raw materials 10.3 15.0
10.7 15.4
Long-term contract balances:
Net cost less foreseeable losses 8.9 9.2
Work in progress 25.5 18.2
Finished goods and goods for resale 1.2 0.9
46.3 43.7
Work in progress includes PPP bid costs amounting to £6.9m (2002: £1.9m).
17. Debtors
Group Company
2003 2002 2003 2002
£m £m £m £m
Amounts falling due within one year
Trade debtors 194.9 223.7 – –
Amounts recoverable on contracts 182.9 185.0 – –
Amounts owed by Group undertakings – – 51.3 227.5
Amounts owed by joint ventures 19.3 11.1 – –
Amounts owed under joint arrangements 29.1 28.9 – –
Other debtors 15.4 12.4 4.0 1.3
Pension prepayments 3.8 5.6 – –
Other prepayments and accrued income 36.8 33.9 0.2 –
482.2 500.6 55.5 228.8
Amounts falling due after more than one year
Trade debtors 1.5 2.2 – –
Amounts recoverable on contracts 9.5 7.3 – –
Amounts owed by Group undertakings – – 36.6 19.2
Amounts owed by joint ventures – 0.1 – –
Other debtors 1.7 1.5 – –
Pension prepayments 16.4 11.9 – –
29.1 23.0 36.6 19.2
Total debtors 511.3 523.6 92.1 248.0
In the Company, the amounts owed by Group undertakings falling due after more than one year includes £10.6m (2002: £2.7m)
relating to finance lease transactions entered into with GT Railway Maintenance Limited and Carillion Fleet Management Limited.
Further details are disclosed in Note 20.
18. Current asset investments
2003 2002
Group £m £m
Listed investments 0.4 0.4
Unlisted investments 4.3 7.8
4.7 8.2
Listed investments comprise Eurotunnel units and warrants that had a market value at 31 December 2003 of £0.4m (2002: £0.4m). Annual Report and Accounts 2003 57 Carillion plc
19. Creditors: amounts falling due within one year
Group Company
2003 2002 2003 2002
£m £m £m £m
Bank loans and overdrafts 11.3 18.3 2.0 23.2
Other loans 0.3 – – –
Net obligations due under finance leases 2.4 2.1 0.9 0.2
Borrowings 14.0 20.4 2.9 23.4
Payments received on account:
Long-term contracts 27.8 44.6 – –
Other 6.2 3.5 – –
Trade creditors 286.7 276.7 – –
Bills of exchange payable 7.1 4.1 – –
Amounts owed to Group undertakings – – 74.0 184.4
Amounts owed to joint ventures 15.9 1.3 11.0 –
Amounts owed under joint arrangements 10.3 8.4 – –
Corporation tax 22.9 10.0 – –
Other taxation and social security costs 46.4 37.2 – –
Proposed dividend 10.8 6.8 10.8 6.8
Other creditors 45.1 40.9 0.3 0.1
Accruals and deferred income 142.0 141.4 0.6 0.4
635.2 595.3 99.6 215.1
Accruals and deferred income in respect of the Group includes £0.3m (2002: £1.0m) relating to deferred PPP bid cost recoveries.
20. Creditors: amounts falling due after more than one year
Group Company
2003 2002 2003 2002
£m £m £m £m
Bank loans 39.4 61.5 39.4 61.5
Other loans 1.3 – – –
Net obligations due under finance leases 13.2 5.3 10.6 2.7
Borrowings 53.9 66.8 50.0 64.2
Payments received on account 1.6 3.5 – –
Trade creditors 0.4 3.4 – –
Amounts owed under joint arrangements – 0.3 – –
Accruals and deferred income 5.6 6.5 – –
61.5 80.5 50.0 64.2
Accruals and deferred income includes £2.9m (2002: £2.3m) relating to deferred PPP bid cost recoveries.
In the Company, net obligations due under finance leases relate to financing agreements for fixed assets currently used by GT Railway
Maintenance Limited and Carillion Fleet Management Limited, both wholly owned subsidiaries. The assets have been recognised 
in the accounts of the subsidiaries in accordance with SSAP 21 ‘Accounting for leases and hire purchase contracts’, together with
corresponding liabilities to Carillion plc. Carillion plc recognises these inter-company debts within amounts owed by Group 
undertakings in Note 17.
Interest is charged on the above bank loans at floating rates linked to LIBOR.
All bank loans and overdrafts are unsecured. Other loans and net obligations due under finance leases are secured on the assets to
which they relate.
The maturity profile of all borrowings is disclosed in Note 21. Annual Report and Accounts 2003 58 Carillion plc
Notes to the Financial Statements 
continued
21. Financial instruments and risk management
The main purpose of the Group’s financial instruments is to provide finance for its operations. The Group’s principal financial
instruments, other than derivatives, include bank loans and overdrafts, cash and short term deposits and finance leases. In addition,
various financial instruments, for example trade debtors and trade creditors, arise directly from the Group’s operations. The Group’s
derivative transactions relate solely to forward foreign exchange contracts.
The Group’s policies with regard to financial instruments have remained unchanged throughout the year. 
The Group’s treasury department manages the main financial risks within policies and operating parameters approved by the Board.
These are discussed in detail below and in the Operating and Financial Review on pages 8 to 13 and are designed to reduce the
financial risks affecting the Group. The Group’s treasury department does not enter into speculative financial transactions. The Group’s
main financial risks are funding and liquidity risk, interest rate risk and currency risk.
Funding and liquidity
The financial assets and liabilities of the Group may be summarised as follows:
2003 2002
Weighted Weighted
average average
period until period until
maturity of maturity of
Assets Liabilities liabilities Assets Liabilities liabilities
£m £m years £m £m years
Nil coupon:
Sterling 0.7 3.1 2.6 2.9 9.6 1.8
Canadian dollars 8.5 – – 5.3 0.1 1.5
European currencies 0.6 – – 0.4 – –
Other 3.0 1.6 1.5 2.6 1.7 1.5
12.8 4.7 2.2 11.2 11.4 1.8
Floating rate:
Sterling 97.6 0.8 50.4 50.5
Canadian dollars 6.5 16.9 8.3 16.5
United States of America dollars 1.3 9.7 1.3 –
European currencies 17.4 19.6 19.5 12.7
Other 5.2 3.7 5.5 0.1
128.0 50.7 85.0 79.8
Fixed rate:
Sterling – 15.8 – 7.1
Canadian dollars – 1.3 ––
European currencies – 0.1 – 0.2
Other –– – 0.1
– 17.2 – 7.4
Total 140.8 72.6 96.2 98.6
Summary by currency
Sterling 98.3 19.7 53.3 67.2
Canadian dollars 15.0 18.2 13.6 16.6
United States of America dollars 1.3 9.7 1.3 –
European currencies 18.0 19.7 19.9 12.9
Other 8.2 5.3 8.1 1.9
Total 140.8 72.6 96.2 98.6 Annual Report and Accounts 2003 59 Carillion plc
21. Financial instruments and risk management (continued)
The weighted average interest rate for fixed rate financial liabilities is 5.4% (2002: 6.0%). The weighted average period for which 
this interest is fixed is 7.4 years (2002: 6.5 years). 
The Group’s financial assets, which exclude short term debtors and pension prepayments, consist primarily of cash at bank and on
deposit, that earn interest at money market related rates. The financial assets on which no interest is earned are primarily trade debtors
and amounts recoverable on contracts that are expected to be received in more than one year.
The Group’s financial liabilities exclude short term creditors and deferred income relating to PPP bid cost recoveries. Floating rate
financial liabilities comprise bank borrowings that bear interest based upon money market or base rate related interest rates. Fixed rate
financial liabilities comprise other loans and finance lease and hire purchase contract liabilities.
The Group’s consolidated cash position at the balance sheet date is not representative of the position at other times of the year. Whilst
material working capital movements and the resultant cash flows are a significant feature of the Group’s cash profile throughout the
year, a number of factors combine to exaggerate the year end position. Such factors include a reduction in the demand for working
capital over the extended holiday period, shorter daylight and therefore working hours and a traditional industry focus on the
settlement of contractual claims.
Interest rate risk
The Group’s debt is predominantly currency borrowings for hedging against overseas investments and sterling borrowings related to
working capital movements. These borrowings are subject to floating rate interest charges. No interest rate hedging is currently undertaken.
Currency exposure
The Group has small and infrequent transactional currency exposures. Group policy requires net exposures to be hedged using forward
contracts or currency options as soon as a contractual commitment is made. The Group’s policy on hedging currency net assets is to
hedge, where practical, at least 50% of the net asset value of overseas investments where such net assets exceed £10m equivalent.
Throughout the year hedging was achieved through currency borrowings and forward contracts. There were no material unrecognised
gains or losses on instruments used for exchange rate hedging either during or at the end of the year.
At 31 December 2003 the total sterling value of currency borrowings for the purposes of hedging was £39.4m (2002: £16.5m). 
The increase has arisen from new borrowings to hedge against investments in Europe and investments whose currencies are closely
linked to the United States of America dollar.
The Group’s working capital currency exposures are:
Net foreign currency monetary assets/(liabilities)
US Dollars Euro Danish Kr Other Total
Functional currency of Group operation £m £m £m £m £m
At 31 December 2003
Sterling – 0.3 2.1 (0.1) 2.3
Other 1.3 – – 0.1 1.4
Total 1.3 0.3 2.1 – 3.7
At 31 December 2002
Sterling – 0.2 1.4 1.8 3.4
Other 1.3 – – 0.6 1.9
Total 1.3 0.2 1.4 2.4 5.3 Annual Report and Accounts 2003 60 Carillion plc
Notes to the Financial Statements 
continued
21. Financial instruments and risk management (continued)
The maturity profile of financial liabilities, other than short term creditors such as trade creditors, accruals and deferred income 
relating to PPP bid cost recoveries, is as follows:
Other
Bank & Finance financial
Overdrafts other loans leases liabilities Total
£m £m £m £m £m
At 31 December 2003
More than five years –– 6.9 – 6.9
Between two and five years – 0.9 3.9 1.8 6.6
Between one and two years – 39.8 2.4 2.9 45.1
More than one year – 40.7 13.2 4.7 58.6
Less than one year 11.3 0.3 2.4 – 14.0
11.3 41.0 15.6 4.7 72.6
At 31 December 2002
More than five years – – 1.6 0.2 1.8
Between two and five years – 61.5 2.2 2.6 66.3
Between one and two years – – 1.5 8.6 10.1
More than one year – 61.5 5.3 11.4 78.2
Less than one year 18.3 – 2.1 – 20.4
18.3 61.5 7.4 11.4 98.6
In addition, there were the following undrawn facilities with an average maturity of 1 year and 2 months in respect of which all
conditions precedent had been met:
2003 2002
£m £m
Expiring in one year or less (but extendible by one year at the Group’s option) – 7.5
Expiring in one year or less (but extendible by two years at the Group’s option) 16.0 16.0
Expiring between one and two years 105.6 –
Expiring between two and five years – 83.5
121.6 107.0
Credit risk and exposures
The Group considers that it is not exposed to a significant amount of credit risk.
Credit exposures on financial instruments arise through short term deposits and foreign exchange hedging. Such transactions are
executed only with highly credit-rated authorised counterparties based on ratings issued by the major rating agencies. Counterparty
exposure positions are monitored regularly.
Fair values
The book and fair values of the Group’s financial instruments at 31 December 2003 and 31 December 2002 are not materially different. Annual Report and Accounts 2003 61 Carillion plc
22. Provisions for liabilities and charges
Deferred Other
taxation provisions Total
Group £m £m £m
At 1 January 2003 5.8 2.3 8.1
Exchange rate movement 0.2 – 0.2
Transfer to profit and loss account (2.0) (0.9) (2.9)
Expenditure in year – (0.7) (0.7)
At 31 December 2003 4.0 0.7 4.7
Details relating to deferred taxation are as follows:
(Asset)/liability
recognised
2003 2002
£m £m
Accelerated capital allowances (5.2) 0.9
Other timing differences 9.2 4.9
4.0 5.8
23. Share capital
2003 2002
£m £m
Authorised
Equity: 325,000,000 ordinary shares of 50p each 162.5 162.5
Nominal
Number value
million £m
Allotted, called up and fully paid
At 1 January 2003 213.0 106.5
New share capital subscribed by QUEST (see Note 24) 1.0 0.5
At 31 December 2003 214.0 107.0
Details of options granted to Directors and employees under the Company’s share option schemes during the year are set out in the
Remuneration Report on pages 26 to 33.
In respect of the Sharesave Scheme there were issues of 50p ordinary shares during the year, being 10,640 shares at an option price of
109.1p and 631 shares at an option price of 126.6p. Annual Report and Accounts 2003 62 Carillion plc
Notes to the Financial Statements 
continued
24. Reserves
The movements on reserves are summarised as follows:
Share
premium Merger Profit and
account reserve loss account Total
Group £m £m £m £m
At 1 January 2003 5.5 8.2 27.3 41.0
Exchange rate movements – – (1.3) (1.3)
Retained loss for the year – – (5.8) (5.8)
Goodwill written back on disposal – – 5.5 5.5
Impairment of goodwill previously written off (see Note 12) – – 8.1 8.1
Premium arising on issue of shares 1.0 – – 1.0
At 31 December 2003 6.5 8.2 33.8 48.5
At 31 December 2003 cumulative goodwill written off to the profit and loss account reserve amounted to £110.5m (2002: £124.1m).
The merger reserve arose on the demerger from Tarmac plc on 29 July 1999.
On 26 September 2003 the Qualifying Employee Share Ownership Trust (QUEST) subscribed for 961,291 shares in the Company at
market value for a consideration of £1.5m. During the year, 1,400,766 ordinary shares held by the QUEST were transferred to
employees of the Group following the exercise of options under the November 1999 Sharesave Scheme.
At 31 December 2003 the total number of shares held by the QUEST amounted to 1,313,936 (2002: 1,753,411) and had a market
value of £2.0m (2002: £1.9m). The QUEST elected to waive all dividends in excess of 0.01 pence per share.
Share
premium Profit and
account loss account Total
Company £m £m £m
At 1 January 2003 5.5 31.9 37.4
Retained profit for the year – 13.6 13.6
Premium arising on issue of shares 1.0 – 1.0
At 31 December 2003 6.5 45.5 52.0 Annual Report and Accounts 2003 63 Carillion plc
25. Other guarantees and contingent liabilities
Group Company
2003 2002 2003 2002
£m £m £m £m
Guarantees in respect of borrowings of subsidiaries, joint ventures 
and joint arrangements – – 11.2 9.4
Guarantees in respect of deferred equity payments 
in PPP joint ventures 1.2 6.7 1.2 6.7
Guarantees in respect of letters of credit issued by banks in respect 
of deferred equity payments in PPP joint ventures 7.0 9.8 7.0 9.8
Group
Guarantees and counter indemnities have been given to financial institutions in respect of the provision of performance and other
contract related bonds that are issued in the normal course of business.
Claims under contracts and other agreements, including joint arrangements, are outstanding in the normal course of business.
The Group, in the normal course of its construction activities, is the subject of certain legal proceedings that are regarded as unlikely 
to succeed or to have a material effect on the Group’s financial position.
Company
The Company has issued performance guarantees in respect of its subsidiaries, joint ventures and joint arrangements in the normal
course of business.
26. Financial and capital commitments
2003 2002
Group commitments for capital expenditure £m £m
Contracts placed 5.0 6.0
2003 2002
Group commitments for investments £m £m
Equity and subordinated debt in PPP joint ventures 8.2 16.5
2003 2002
Land and Land and
buildings Other buildings Other
Group annual commitments under non-cancellable operating leases £m £m £m £m
Annual commitments expiring:
Within one year 1.7 2.9 1.8 2.7
In second to fifth year inclusive 2.1 12.9 2.1 11.0
Over five years 2.4 0.1 3.1 –
6.2 15.9 7.0 13.7 Annual Report and Accounts 2003 64 Carillion plc
Notes to the Financial Statements 
continued
27. Related parties
Group joint ventures
Sales and purchases between the Group and its joint ventures, which are in the normal course of business and on commercial terms,
amounted to:
2003 2002
Sales to Group joint ventures £m £m
PPP projects
Accommodation Services (Holdings) Limited 20.8 125.5
UK Court Services (Manchester) Holdings Limited 16.9 6.1
Ellenbrook Holdings Limited 18.7 42.5
The Hospital Company (Swindon & Marlborough) Holdings Limited 18.0 15.7
Others 27.5 20.5
101.9 210.3
Other joint ventures 0.8 2.9
102.7 213.2
Purchases from Group joint ventures – 1.1
The debtor and creditor balances between the Carillion Group and its joint ventures are disclosed in Notes 17 and 19 respectively.
28. Cash flow notes
(a) Reconciliation of operating profit to net cash inflow from operating activities
2003 2002
£m £m
Group operating profit before exceptional items 38.1 37.8
Depreciation 15.0 14.6
Reversal of impairment in tangible fixed assets (2.2) –
Loss/(profit) on disposal of fixed assets 0.1 (0.8)
Decrease in market value of listed current asset investments – 0.3
Amortisation of goodwill 3.8 2.7
Amortisation of own shares – (3.3)
Decrease in stocks 0.9 9.7
Decrease in debtors 22.6 41.9
Increase/(decrease) in creditors due within one year 10.4 (96.9)
(Decrease)/increase in creditors due after more than one year (5.9) 2.1
Decrease in provisions (0.9) –
Increase/(decrease) in bills of exchange 3.0 (3.5)
Net cash inflow from operating activities before exceptional items 84.9 4.6
Exceptional operating cash spend (0.7) (3.5)
Net cash inflow from operating activities 84.2 1.1 Annual Report and Accounts 2003 65 Carillion plc
28. Cash flow notes (continued)
(b) Analysis of changes in net funds/(debt)
As at Exchange Other As at
1 January rate non-cash 31 December
2003 Cash flows movements movements 2003
£m £m £m £m £m
Cash at bank and in hand 54.6 16.0 0.1 – 70.7
Bank overdrafts (18.3) 7.8 (0.8) – (11.3)
36.3 23.8 (0.7) – 59.4
Short term deposits 30.5 25.4 1.5 – 57.4
Bank loans (61.5) 22.5 (0.4) – (39.4)
Other loans – (1.6) – – (1.6)
Finance leases (7.4) 2.2 – (10.4) (15.6)
Net funds/(debt) (2.1) 72.3 0.4 (10.4) 60.2
(c) Reconciliation of net cash flow to movement in net funds/(debt)
2003 2002
£m £m
Increase/(decrease) in cash in the year 23.8 (10.4)
Increase in short term deposits 25.4 10.6
Cash outflow/(inflow) from drawdown of debt 20.9 (45.0)
Cash outflow from finance leases 2.2 2.5
Movement in net funds resulting from cash flows 72.3 (42.3)
Exchange rate movements 0.4 (1.5)
Non cash movements from finance leases (10.4) (3.0)
Movement in net funds in the year 62.3 (46.8)
Net (debt)/funds at 1 January (2.1) 44.7
Net funds/(debt) at 31 December 60.2 (2.1) Annual Report and Accounts 2003 66 Carillion plc
Notes to the Financial Statements 
continued
29. Acquisitions and disposals
(a) Acquisitions
In June 2003, the Group acquired the entire share capital of Swedish Rail Systems Entreprenad (SRSE), Sweden and Norway’s largest
private sector rail infrastructure contractor for consideration of £2.9m. In July 2003, the Group acquired an additional 31% of the ordinary
share capital of UK Highways Services Limited for consideration of £1.4m. Details of these acquisitions are summarised in total below:
Fair value 
Book value adjustments Total
£m £m £m
Tangible fixed assets 1.4 – 1.4
Stocks 2.2 – 2.2
Debtors due within one year 6.2 (1.0) 5.2
Cash 3.9 – 3.9
Creditors due within one year (9.4) – (9.4)
Creditors due after more than one year (0.1) – (0.1)
Group share of net assets acquired 4.2 (1.0) 3.2
Goodwill arising on acquisition 1.1
Fair value of consideration 4.3
The fair value adjustment relates to a re-assessment of the recoverability of contract debtors. Of the fair value of consideration, £3.9m
was satisfied in cash, which includes costs associated with the acquisitions of £0.1m. Contingent consideration of £0.4m is included 
in creditors due within one year.
The acquisitions have been reflected in the Group cash flow statement as follows:
£m
Cash consideration paid (including acquisition costs) 3.9
Cash acquired in the businesses (3.9)
Cash movement in respect of acquisitions –
During the year the Group increased its equity investments in joint venture companies by £0.5m, of which £0.4m was satisfied in cash
and £0.1m by way of capitalisation of a short-term loan advance. No goodwill arose on these transactions. Annual Report and Accounts 2003 67 Carillion plc
29. Acquisitions and disposals (continued)
(b) Disposals
During the year the Group disposed of a number of non-core businesses. The movements in total that relate to these disposals are
summarised below:
Book value
£m
Tangible fixed assets (2.0)
Stocks (0.1)
Debtors due within one year (6.4)
Cash (1.8)
Creditors due within one year 8.7
Net assets disposed of (1.6)
Fair value of consideration receivable 7.0
Closure costs (1.4)
Goodwill written back on disposal (5.5)
Loss on disposal (1.5)
The consideration receivable is stated after deducting costs associated with the disposals of £0.5m and includes £0.6m held in debtors
due within one year at the year end.
The disposals have been reflected in the Group cash flow statement as follows:
£m
Cash consideration received (net of disposal costs) 6.4
Cash in businesses disposed of (1.8)
Cash inflow in respect of disposals 4.6
In November 2003, the Group disposed of its 30% equity shareholding and its loan advances in the Darent Valley Hospital PPP joint
venture. This followed the successful re-financing of the joint venture in March 2003 which generated £10.8m of cash for the Group.
The carrying value of the investment at the date of disposal was negative at £6.7m, principally due to the receipt of the re-financing
proceeds. The equity disposal generated cash consideration of £5.1m (after deducting disposal costs of £0.1m). Net profit generated 
from the disposal was therefore £11.8m.
30. Pension arrangements
Carillion operates a number of pension schemes in the United Kingdom for eligible employees. The main defined benefit schemes are: 
The Carillion Staff Pension Scheme
The Carillion ‘B’ Pension Scheme
The Carillion Public Sector Pension Scheme 
Shared Cost Sections of the Railways Pension Scheme (relating to GTRM and Centrac)
The key actuarial assumptions used in the latest valuations of these schemes were: 
Staff ‘B’ Public Sector GTRM Centrac
Rate of increase in salaries 4.35% 5.35% 4.35% 4.75% 4.75%
Rate of increase in pensions 2.35% 2.35% 2.35% 2.50% 2.50%
Inflation rate 2.35% 2.35% 2.35% 2.50% 2.50%
Discount rate 5.50% 5.50% 6.00% 5.61% 5.53%
All the main defined benefit schemes in the United Kingdom were fully funded on the prescribed Minimum Funding Requirement 
(MFR) basis. Annual Report and Accounts 2003 68 Carillion plc
30. Pension arrangements (continued)
Carillion Staff and ‘B’ Pension Schemes
Actuarial valuations of the above schemes were undertaken by the Trustees’ independent actuaries as at 31 December 2002 using the
projected unit method. The market value of the schemes’ assets at this date were £316.7m and £80.9m respectively, the value of
which represented approximately 81% and 90% of the benefits that had accrued to members at that date, after allowing for future
increases in salaries. The contributions paid during the year were £13.9m (2002: £1.1m) in respect of the Carillion Staff Pension
Scheme and £1.8m (2002: £0.1m) in respect of the Carillion ‘B’ Pension Scheme. Both schemes are now closed to new entrants.
The increase in contributions during the year for the Staff and ‘B’ schemes reflects the cessation of the employer contribution holiday
in December 2002 and the agreed new contribution rates for the schemes with effect from July 2003 following the most recent
valuations. The contribution rates include an allowance for funding the past service deficits identified at the 2002 valuation date over
the remaining average working life of the active scheme members. The contribution rates will normally be reviewed at the next
valuation due at 31 December 2005.
Carillion Public Sector Pension Scheme
An actuarial valuation of the scheme was undertaken by the Trustees’ independent actuaries as at 31 December 2002 using the
attained age method. The market value of the scheme’s assets at that date was £58.2m, which represented approximately 90% of
the benefits that had accrued to members at that date, after allowing for future increases in salaries. The contributions paid during
the year were £2.2m (2002: £2.0m). 
Shared Cost Sections of the Railways Pension Scheme
Employees of GTRM and Centrac and former employees of British Rail transferred to these businesses have pension provision via
Shared Cost Sections of the Railways Pension Scheme. Both the GTRM and Centrac Sections are now closed to new entrants. 
Shared cost arrangements are such that the employer and members share the cost of future service liabilities on a 60/40 split
respectively and any surplus (or deficit) emerging over time is dealt with on a similar basis. The contributions paid by the employer
during the year were £4.9m (2002: £4.2m) for GTRM and £0.1m (2002: £0.1m) for Centrac.
Independent actuaries appointed by the Railways Pension Trustee Company Limited carried out a formal valuation of the Railways
Pension Scheme at 31 December 2001 using the projected unit method for GTRM and the attained age method for Centrac. The
next full valuation is due as at 31 December 2004.
The market value of the assets of the GTRM Section at the valuation date was £263.4m. This represented 108% of the past service
liabilities taking account of future increases in salaries.
The market value of the assets of the Centrac Section at the valuation date was £26.1m. This represented 115% of the past service
liabilities taking account of future increases in salaries.
Following the announcement by Network Rail that it intends to take in-house all rail maintenance contracts during 2004, there is
expected to be a bulk transfer of members and the associated assets and liabilities to the Network Rail Shared Cost Section of the
Railways Pension Scheme. As the employees involved and the financial basis have not been agreed with Network Rail, no assessment
of the effect of any transfer can be made at the current time.
Other UK and overseas schemes
The Group operates two UK defined contribution schemes, the Carillion Retirement Plan (closed to new entrants) and the Carillion
Pension Plan. 
The Carillion Pension Plan commenced on 1 April 2003. The majority of new employees are eligible to join this plan. Employees
contribute a minimum of 5% and the employer a minimum of 7% of basic salaries. Up to 3% of any additional voluntary
contributions paid by employees is matched by the employer, resulting in a maximum employer contribution of 10% of basic salary.
Death in service lump sum benefits are provided in addition.
Employees of Carillion Services who are not eligible for other Carillion schemes are invited to participate in the Carillion Stakeholder
Plus managed by Merrill Lynch Investment Management. Employees contribute 5% and the employer 6.5% of basic salaries. Death in
service lump sum benefits are provided in addition. 
Stakeholder pensions are provided by B&CE Insurance and Scottish Widows where required by Working Rule Agreements.
The Carillion Group operates a defined benefit scheme for employees of Carillion Canada Inc managed locally and supplemental
arrangements in respect of certain executives. The Group also operates defined benefit and defined contribution schemes for
employees of Carillion Rail Sverige AB again managed locally.
Contributions during the year were £1.1m (2002: £0.3m) in respect of UK defined contribution schemes, £Nil (2002: £Nil) in respect
of the Canada defined benefit scheme and £0.2m (2002: £0.8m) in respect of other post-retirement benefits for senior Canadian
employees. Contributions in respect of the Swedish and Norwegian defined benefit and defined contribution schemes during the
period since acquisition were £0.6m.
Notes to the Financial Statements 
continued Annual Report and Accounts 2003 69 Carillion plc
30. Pension arrangements (continued)
SSAP 24 pension costs
Statement of Standard Accounting Practice (SSAP) 24 ‘Accounting for pension costs’ requires that the cost of providing pensions is
recognised over the period benefiting from the employees’ services, with any differences between the charge to the profit and loss
account and the contributions paid to the schemes being shown as an asset or liability on the balance sheet. The pension cost has 
been determined by the Directors in conjunction with the advice of independent qualified actuaries using the assumptions below:
Staff ‘B’ Public Sector GTRM Centrac
Rate of increase in salaries 4.00% 5.00% 4.00% 4.00% 4.00%
Rate of increase in pensions 2.25% 2.25% 2.25% 2.25% 2.25%
Inflation rate 2.25% 2.25% 2.25% 2.25% 2.25%
Discount rate 6.25% 6.25% 6.25% 7.00% 7.00%
The SSAP 24 position for the UK schemes is as follows:
Public Railways
Staff ‘B’ Sector Pension
Market value of assets (£m) 316.7 80.9 58.2 289.5
Level of funding (%) 93.5 101.2 95.0 176.7
The charge to the profit and loss account as disclosed in Note 6 on page 49, is analysed as follows:
Defined
contribution
Public Railways and overseas
Staff ‘B’ Sector Pension schemes Total
£m £m £m £m £m £m
Regular cost 10.0 1.5 2.5 6.1 1.9 22.0
Variation in cost 1.8 0.1 0.4 (0.8) – 1.5
Interest credit (0.3) (0.1) (0.1) (0.9) – (1.4)
Net pension cost 11.5 1.5 2.8 4.4 1.9 22.1
Amounts carried in the balance sheet in respect of pension prepayments are disclosed in Note 17.
FRS 17 Retirement benefits
Group
Whilst the Group continues to account for pension costs in accordance with SSAP 24, under FRS 17 ‘Retirement benefits’ the 
following transitional disclosures are required.
The principal assumptions used by the independent qualified actuaries in providing the FRS 17 position were:
31 December 2003 31 December 2002 31 December 2001
UK Canada UK Canada UK Canada
Rate of increase in salaries 4.06% 3.25% 3.58% 3.50% 3.75% 3.75%
Rate of increase in pensions 2.81% 2.25% 2.33% 2.50% 2.50% 2.50%
Inflation rate 2.81% 2.25% 2.33% 2.50% 2.50% 2.50%
Discount rate 5.36% 6.00% 5.50% 6.25% 5.80% 5.80%
The market values of the schemes’ assets, which are not intended to be realised in the short term, may be subject to significant 
change before they are realised. The present values of the schemes’ liabilities are calculated by reference to the investment return 
on Grade AA corporate bonds. The assumptions used do not necessarily represent the investment return that may be achieved.  Annual Report and Accounts 2003 70 Carillion plc
Notes to the Financial Statements 
continued
30. Pension arrangements (continued)
The FRS 17 position for the schemes is as follows:
Expected
rate of return Public Railways
UK Canada Staff ‘B’ Sector Pension Canada Total
31 December 2003 % % £m £m £m £m £m £m
Equities 7.30 7.50 180.2 35.7 44.9 253.2 8.5 522.5
Government bonds 4.80 5.00 128.9 40.7 18.0 38.2 2.0 227.8
Corporate bonds 5.36 5.75 60.3 12.9 5.1 – 2.0 80.3
Other 4.00 2.50 5.9 1.5 0.9 0.1 0.2 8.6
Market value 375.3 90.8 68.9 291.5 12.7 839.2
Present value of scheme liabilities (446.5) (94.2) (82.0) (327.0) (13.1) (962.8)
Deficit (71.2) (3.4) (13.1) (35.5) (0.4) (123.6)
Shared Cost Sections ––– 14.2 – 14.2
Total deficit (71.2) (3.4) (13.1) (21.3) (0.4) (109.4)
Related deferred tax asset 32.8
Net pension liability (76.6)
31 December 2002
Equities 7.02 7.75 208.5 53.5 36.6 200.4 7.4 506.4
Government bonds 4.52 5.25 56.6 13.6 14.6 18.4 3.2 106.4
Corporate bonds 5.50 6.00 47.2 12.2 5.6 – – 65.0
Other 4.00 2.75 4.7 1.7 1.5 18.0 0.2 26.1
Market value 317.0 81.0 58.3 236.8 10.8 703.9
Present value of scheme liabilities (367.9) (85.9) (65.6) (257.8) (10.7) (787.9)
(Deficit)/surplus (50.9) (4.9) (7.3) (21.0) 0.1 (84.0)
Shared Cost Sections – – – 8.4 – 8.4
Total (deficit)/surplus (50.9) (4.9) (7.3) (12.6) 0.1 (75.6)
Related deferred tax asset 22.7
Net pension liability (52.9)
31 December 2001
Equities 7.25 7.25 261.0 66.7 45.8 261.7 10.1 645.3
Government bonds 4.75 4.75 53.0 13.7 12.9 23.8 5.8 109.2
Corporate bonds 5.75 5.75 60.5 15.3 1.5 – – 77.3
Other 5.00 5.00 0.4 – 3.4 45.5 0.3 49.6
Market value 374.9 95.7 63.6 331.0 16.2 881.4
Present value of scheme liabilities (360.0) (82.0) (58.0) (254.4) (11.8) (766.2)
Surplus 14.9 13.7 5.6 76.6 4.4 115.2
Shared Cost Sections – – – (30.6) – (30.6)
Total surplus 14.9 13.7 5.6 46.0 4.4 84.6
Related deferred tax liability (25.4)
Net pension asset 59.2 Annual Report and Accounts 2003 71 Carillion plc
30. Pension arrangements (continued)
If FRS 17 had been adopted in full in the financial statements, the Group’s net assets and profit and loss reserve would be as follows:
2003 2002
£m £m
Net assets per balance sheet 157.8 149.7
SSAP 24 prepayments reversed (net of related deferred tax) (14.5) (13.7)
Revised net assets excluding pension liability 143.3 136.0
Net pension liability (76.6) (52.9)
Net assets including pension liability 66.7 83.1
Profit and loss reserve per balance sheet 33.8 27.3
SSAP 24 prepayments reversed (net of related deferred tax) (14.5) (13.7)
Revised profit and loss reserve excluding pension reserve 19.3 13.6
Pension reserve (76.6) (52.9)
Profit and loss reserve including pension reserve (57.3) (39.3)
If FRS 17 had been adopted in full, the impact on the Group’s profit and loss account and Statement of Total Recognised Gains and
Losses (STRGL) would have been as follows:
2003 2002
£m £m
Charge to operating profit
Current service cost (22.4) (23.1)
Past service cost – –
Total (22.4) (23.1)
Credit/(charge) to other finance income
Expected return on pension scheme assets 39.8 48.7
Interest cost on pension scheme liabilities (37.9) (40.4)
Net finance return 1.9 8.3 Annual Report and Accounts 2003 72 Carillion plc
30. Pension arrangements (continued)
Recognition in the STRGL
2003 2002
£m £m
Actual return less expected return on pension scheme assets 66.3 (139.0)
Experience gains and losses arising on pension scheme liabilities (0.1) (4.9)
Effects of changes in assumptions underlying the present value 
of pension scheme liabilities (102.3) (8.6)
Exchange rate movements (0.1) (0.4)
Total actuarial gains and losses (36.2) (152.9)
The analysis of the movement in the (deficit)/surplus during the year is as follows:
2003 2002
£m £m
(Deficit)/surplus at 1 January (75.6) 84.6
Current service cost (22.4) (23.1)
Contributions 22.9 7.5
Past service costs – –
Other finance income 1.9 8.3
Actuarial gains and losses (36.2) (152.9)
Deficit at 31 December (109.4) (75.6)
History of experience gains and losses
2003 2002
Difference between expected and actual return on scheme assets (£m) 66.3 (139.0)
Percentage of scheme assets 7.9% (19.7%)
Experience gains and losses on scheme liabilities (£m) (0.1) (4.9)
Percentage of scheme liabilities – (0.6%)
Total amount recognised in STRGL (£m) (36.2) (152.9)
Percentage of scheme liabilities 3.8% 19.4%
Company
As the schemes are run for the Carillion Group as a whole, the Company is unable to identify its share of the schemes’ assets and
liabilities on a consistent and reasonable basis. Hence, as permitted by FRS 17, the schemes will be accounted for by the Company
separately as if the schemes were defined contribution schemes, when the accounting standard is fully adopted.
Notes to the Financial Statements 
continued Annual Report and Accounts 2003 73 Carillion plc
2003 2002 2001 2000 1999
Profit and loss account £m £m £m £m £m
Total turnover 1,977.6 1,974.4 1,889.8 1,909.0 1,802.3
Less: share of joint ventures’ turnover (116.7) (127.1) (191.0) (223.4) (192.6)
Group turnover 1,860.9 1,847.3 1,698.8 1,685.6 1,609.7
Operating profit before exceptional items 
and goodwill amortisation
Group 41.9 40.5 27.5 24.0 27.7
Joint ventures 14.3 14.3 21.1 17.8 18.0
56.2 54.8 48.6 41.8 45.7
Net interest (payable)/receivable
Group (0.5) 0.6 0.3 (1.5) (3.7)
Joint ventures (4.9) (5.2) (3.6) (1.8) (2.5)
(5.4) (4.6) (3.3) (3.3) (6.2)
Profit before exceptional items and 
goodwill amortisation 50.8 50.2 45.3 38.5 39.5
Exceptional operating items
Group (33.1) – (8.9) (30.0) (1.5)
Joint ventures – – (1.2) (2.0) –
(33.1) – (10.1) (32.0) (1.5)
Exceptional non-operating items
Sale of fixed asset investments 11.2 ––––
Sale of businesses (1.3) (5.3) – 3.1 –
9.9 (5.3) – 3.1 –
Goodwill amortisation (3.8) (2.7) (0.5) (0.1) –
Profit on ordinary activities before taxation 23.8 42.2 34.7 9.5 38.0
Tax on profit on ordinary activities (13.8) (12.9) (10.1) (1.6) (13.4)
Equity minority interests (1.7) (2.1) (3.1) (1.0) 0.1
Profit for the financial year 8.3 27.2 21.5 6.9 24.7
Balance sheet
Intangible assets 21.3 49.0 42.8 1.6 1.7
Tangible assets 68.1 56.9 53.0 47.1 54.2
Investments in joint ventures:
Share of gross assets 639.7 646.1 572.0 517.5 275.9
Share of gross liabilities (599.7) (606.8) (530.4) (487.9) (250.7)
40.0 39.3 41.6 29.6 25.2
Loan advances 33.1 21.7 19.2 19.4 10.6
73.1 61.0 60.8 49.0 35.8
Other investments 6.3 6.1 2.7 1.9 –
Working capital (53.1) (11.9) (59.3) (32.5) (101.5)
Investments 4.7 8.2 9.4 8.0 5.4
Tax and dividends (37.7) (22.6) (20.5) (8.8) (11.7)
Cash (net) 75.8 5.3 51.6 50.8 132.2
158.5 152.0 140.5 117.1 116.1
Equity shareholders’ funds and minorities 157.8 149.7 134.7 116.2 112.2
Provisions for liabilities and charges 0.7 2.3 5.8 0.9 3.9
158.5 152.0 140.5 117.1 116.1
Operating ratio
Operating profit on turnover (%) 2.8 2.8 2.6 2.2 2.5
Financial ratios
Interest covered by operating profit (times) 10.4 11.9 14.7 12.7 7.4
Dividend cover (times) 0.6 2.7 2.4 0.8 3.0
Share information
Dividends per ordinary share 6.75p 4.8p 4.4p 4.12p 4.0p
Earnings per share on published earnings 4.0p 13.2p 10.5p 3.4p 12.1p
Adjusted earnings per share
(excluding all exceptional items and goodwill amortisation) 16.8p 16.6p 14.0p 13.0p 12.6p
Five Year Review Annual Report and Accounts 2003 74 Carillion plc
Principal subsidiary undertakings, joint ventures and joint arrangements
All subsidiary undertakings and joint ventures are incorporated in Great Britain and, except where shown, operate in the UK. All holdings
are of ordinary shares and except where shown, all subsidiary undertakings are 100% owned (with equivalent voting rights) and 
joint ventures and joint arrangements are 50% owned. Shares of those undertakings marked with an asterisk are directly owned by
Carillion plc.
Principal subsidiary undertakings Nature of business
Carillion BTP S.A. (France) Building and civil engineering 
Carillion Canada Inc (Canada) Construction and infrastructure services
Carillion (Caribbean) Ltd (Trinidad & Tobago) Construction and infrastructure services
Carillion (Chelverton) Ltd Holding company for property development
Carillion Construction Ltd* Construction and infrastructure services
Carillion Fleet Management Ltd* Supply and maintenance of vehicles
Carillion Highway Maintenance Ltd* Roads and ground maintenance and repair
Carillion Private Finance Ltd* Holding company for PPP project companies
Carillion Services Ltd* Facilities management
GT Railway Maintenance Ltd Railway infrastructure
Monteray Ltd 51% Property and facilities management services
Postworth Ltd* Supply of operatives to the construction industry
Principal joint ventures
Public Private Partnerships Associated project
Accommodation Services (Holdings) Ltd 40% GCHQ, Cheltenham
Arrow Light Rail Holdings Ltd 12.5% Nottingham Express Transit
Education Care & Discipline Ltd Medway Secure Training Centre
Education Care & Discipline Three Ltd Rainsbrook Secure Training Centre
Ellenbrook Holdings Ltd University of Hertfordshire student accommodation
Group 4 Carillion (Fazakerley) Ltd HM Prison Altcourse
Group 4 Carillion (Onley) Ltd HM Prison Rye Hill
The Hospital Company (Oxford John Radcliffe) Holdings Ltd John Radcliffe Hospital,Oxford
The Hospital Company (Swindon & Marlborough) Holdings Ltd 33.3% Great Western Hospital, Swindon
Town Hospitals (North Staffordshire) Holdings Ltd Harplands Hospital
Town Hospitals (Southern General) Holdings Ltd Glasgow Southern General Hospital
UK Court Services (Manchester) Holdings Ltd 33.3% Manchester Magistrates Court
UK Highways A55 (Holdings) Ltd A55 North Wales
UK Highways M40 (Holdings) Ltd M40 Motorway
UK Highways Services Ltd Motorway maintenance
Others Nature of business
Al Futtaim Carillion (Pte) Ltd (UAE) 49% Building and civil engineering 
Carillion Alawi LLC (Oman) 49% Building and civil engineering 
Carillion Richardson Developments Ltd* 50% Property development 
Emrill Services LLC (UAE)* 49% Facilities management
Servus Ltd (Trinidad & Tobago) Facilities management Annual Report and Accounts 2003 75 Carillion plc
Principal joint arrangements
Name, proportion of interest held and address of principal place of business:
Proportion of 
Name interest held Address of principal place of business
CAMBBA Construction Group 25% Mill Lane, Off Watling Street, 
Shenstone, Staffordshire, England
Carillion-URS Joint Venture 70% Pytchley Maintenance Compound, Pegasus Court, 
Kettering South Business Park, Kettering, 
Northamptonshire, England
Carillion-WSP JV 60% Bradford, West Yorkshire, England
GTBB 50% Rugby, Warwickshire, England
A complete list of Group subsidiary undertakings will be attached to the Company’s annual return to the Registrar of Companies. Annual Report and Accounts 2003 76 Carillion plc
Shareholder Information
Dividends
Dividends are normally paid twice a year. The proposed final
dividend in respect of the year to 31 December 2003 – together
with the additional dividend of 1.7p announced in November
and due to Carillion’s sale of its equity interest in the Darent
Valley Hospital PPP concession – will be payable on 25 June 2004
to those shareholders on the register on 30 April 2004. 
A dividend reinvestment plan (DRIP) will also be offered.
For those shareholders who prefer not to participate in the DRIP ,
arrangements can be made to pay your dividends automatically
into your bank or building society account. This service has a
number of benefits:
• there is no chance of the dividend cheque going missing in 
the post;
• the dividend payment is received quicker as the cash is paid
directly into your account on the payment date without the
need to wait for the cheque to clear; and
• you will be helping Carillion to improve its efficiency by
reducing printing and cheque clearing costs.
If you wish to register for this service please call Lloyds TSB
Registrars on the number detailed below to request a dividend
mandate form.
Results
Half year to 30 June 2004: announced 8 September 2004
Full year to 31 December 2004: announced March 2005
Shareholder enquiries
Lloyds TSB Registrars maintain the register of members of the
Company. If you have any queries concerning your shareholding,
or if any of your details change, please contact the Registrars:
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Telephone
0870 600 3953
Textphone for shareholders with hearing difficulties
0870 600 3950
Multiple accounts on the shareholder register
If you have received two or more sets of the documents
concerning the Annual General Meeting this means that there is
more than one account in your name on the shareholder register,
perhaps because either your name or your address appear on
each account in a slightly different way. For security reasons, the
Registrars will not amalgamate the accounts without your written
consent, so if you would like any multiple accounts combined
into one account, please write to Lloyds TSB Registrars at the
address given above.
Shareview (Electronic Communications)
www.shareview.co.uk is a service offered by Lloyds TSB Registrars
that enables you to check your holdings in many UK companies
and helps you to organise your investments electronically. You
can register for this portfolio service, which is easy to use, 
secure and free as long as you have access to the internet, 
by logging on to www.shareview.co.uk and following a simple
registration process.
Electronic proxy appointments
For the AGM to be held on 12 May 2004, you may, if you wish,
register the appointment of a proxy electronically by logging on
to the website www.sharevote.co.uk 
You will need your voting reference numbers (the three 8-digit
numbers shown on your form of proxy). Alternatively, if you have
registered for a Shareview portfolio, log on to your portfolio at
www.shareview.co.uk and click on ‘Company Meetings’.
Please note that any electronic communication that is found to
contain a computer virus will not be accepted.
Share Dealing Service 
Carillion now offers its UK shareholders Shareview Dealing, a
telephone and internet share sale service operated by Lloyds TSB
Registrars. For telephone sales call 0870 850 0852 between
8.30am and 4.30pm, Monday to Friday, and for internet sales
log on to www.shareview.co.uk/dealing. You will need your
shareholder reference number, which is shown on your share
certificate.
ShareGift
ShareGift is a charity share donation scheme for shareholders,
administered by the Orr Mackintosh Foundation. It is especially
for those who may wish to dispose of a small parcel of shares
whose value makes it uneconomic to sell on a commission basis.
Further information can be obtained at www.sharegift.org or
from Lloyds TSB Registrars.
Auditors
KPMG Audit Plc
2 Cornwall Street
Birmingham
B3 2DL
Bankers 
National Westminster Bank plc
16 South Parade
Nottingham
NG1 2JX
Brokers
Cazenove & Co. Limited
12 Tokenhouse Yard
London
EC2R 7AN
Financial Advisers
Lazard Brothers & Co., Limited
21 Moorfields
London
EC2P 2HT
Legal Advisers
Slaughter and May
One Bunhill Row
London
EC1Y 8YY
Share Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Internet
Carillion’s website,
www.carillionplc.com 01 Our vision, strategy and values
02 Financial highlights
03 Chairman’s Statement
04 Chief Executive’s Review
08 Operating and Financial Review
14 Corporate Social Responsibility
18 The Board of Directors
20 Corporate Governance Report
26 Remuneration Report
34 Report of the Directors
36 Statement of Directors’ Responsibilities 
37 Independent Auditors’ Report 
to the members of Carillion plc
38 Consolidated Profit and Loss Account
39 Consolidated Balance Sheet
40 Company Balance Sheet
41 Consolidated Cash Flow Statement
42 Consolidated Statement of Total 
Recognised Gains and Losses
42 Reconciliation of Movements in 
Consolidated Equity Shareholders’ Funds
43 Notes to the Financial Statements
73 Five Year Review
74 Principal subsidiaries and joint ventures
75 Principal joint arrangements
76 Shareholder Information
Designed and produced by Carnegie Orr +44 (0)20 7610 6140.
www.carnegieorr.com
Printed on a paper that is manufactured using 50% recycled de-inked fibre 
and 50% TCF (totally chlorine free) pulp, and is sourced from sustainable forests. Carillion plc
Annual Report and Accounts 2003
Aligning our people and strengths
with growth markets
>
Carillion plc Annual Report and Accounts 2003    > Aligning our people and strengths with growth markets COR10304
Carillion plc
Birch Street 
Wolverhampton WV1 4HY 
United Kingdom
Registered number: 3782379
T +44 (0)1902 422431
F +44 (0)1902 316165
www.carillionplc.com