fc1
making business
doing business…
running a ports business is not just
about ships it’s about service and 
it’s not just about handling cargo it’s
about adding value”
dave atkin head of operations port of grimsby  immingham
“
annual report  accounts 2002
a
a 4
2
4
2
6
5
ships’ dues normally these charges 
are based on vessel tonnage and are 
paid by the ship owner dues can also 
be combined with other charges we have a
statutory right to charge ships’ dues to vessels
berthing at our ports
goods’ dues also known as wharfage 
or cargo dues these are charges based
on cargo tonnage for goods passing
over our quays we have a right to levy a charge
for all cargo passing over our quays and through
our facilities they can be charged separately or
as part of an allinclusive rate
handling services when independent
stevedores work at our ports they pay 
us licence fees rent and charges for 
hiring plant and equipment when we provide
stevedoring services ourselves our customers
1
2
3
“
snapshots of our business
stable growth 2
small but profitable projects 4
customer solutions and teamwork 6
progressstrategy
top line results 8
chairman’s statement 10
group chief executive’s review 12
operating highlights 15
ports  transport – uk 16
abp’ s operational management 18
corporate social responsibility 20
board of directors 22
operating and financial review 24
financial statements
group profit and loss account 30
balance sheets 31
group cash flow statement 32
reconciliation of net cash flow to movement in net borrowings 32
statement of group total recognised gains and losses 33
note of group historical cost profits and losses 33
reconciliation of movements in equity shareholders’ funds 33
notes to the financial statements 34
governance
statement of directors’ responsibilities 61
directors’ report 62
corporate governance 64
remuneration report 66
independent auditors’ report 70
other
shareholder analysis 71
fiveyear summary 72
notice of meeting 74
company information 76
financial highlights ibc
making it happen 24 hours a
day at 21ports is the basics
the real challenge is creating
opportunities for growth” 
dave atkin head of operations port of grimsby  immingham a a
…everywher e we look
3
1
6
7
3
8
pay us directly our charges cover labour
equipment supply and valueadded services such
as bagging blending devanning warehousing
and redelivery
terminal operations income earned from
terminals we run on behalf of our customers
under medium to longterm arrangements
we provide packaged solutions that include handling
services storage and terminal maintenance
storagewarehousing charges for storing
cargo passing through our ports based 
on tonne per day or area used they can
be part of an allinclusive rate or levied separately
rentalsestate management income
earned from charges for the use of land on
our port estate the agreements can
be in the form of leases or tenancy arrangements
and can include the provision of utility services
pilotage statutory pilotage authority
charges for guiding a vessel through the
estuary or harbour area the charge 
including boarding and landing fees is normally
based on vessel sizedraught and pilot boarding
landing points
conservancy statutory charges for 
the maintenance of safe and navigable
waterways they cover vessel traffic 
services navigation markers and the maintenance
of channels through dredging the amount is
based on vessel size and distance travelled within
our areas of statutory responsibility
1
4
5
6
7
8 2 associated british ports holdings plc annual report  accounts 2002
stability measured 
by the bottom line
our business is stable we’re backed by a 
quality asset base and there’s steady demand for
our facilities and services at the same time we’re
growing our turnover by winning new customers
for our core ports business and by expanding the
range of our services our warehousing distribution
transportation and valueadded businesses are all
on course for growth 3
queen mary’s new palace 
at southampton
the world’s largest cruise liner deserves port facilities
in keeping with her status at the queen elizabeth ii
terminal we’ve embarked on a rebuilding programme
to double the number of checkin desks extend the
baggage hall and significantly increase passenger
capacity as part of a new fiveyear agreement with
cunard line to welcome queen mary 2 when she
comes into service in 2004 we’re also giving the
passenger lounges a comprehensive makeover 4 associated british ports holdings plc annual report  accounts 2002
converting ideas into
profitable growth
amports uk’s vehicle centre at southampton 
is the base for a small but profitable operation
among other activities it carries out predelivery
inspection of vehicles during 2002 we authorised
investment in 31 projects each costing under £2
million across the group individually each project
was small yet together they accounted for around
a third of our total capital expenditure we’ve learnt
that small initiatives can lead to sizeable profits 5
we even make money 
from broken glass
green brown or clear we don’t care midland
glass processing’s new plant at southampton is
set to recycle 24000 tonnes of glass during its
first year the glass will be shipped to ayr jarrow
and londonderry where it will be made into new
bottles this project partfunded by an £800000
government grant towards the construction cost
will take almost 2000 heavy goods vehicle
movements off the roads on an annual basis 6 associated british ports holdings plc annual report  accounts 2002
seizing opportunities from
seized goods
smuggling has long been a popular coastal
activity and excise fraud is now a growing problem
following a competitive ec tendering process
abp connect our valueadded services division
has won a sixyear contract with hm customs 
 excise and is now working closely with them 
in the provision of ‘specialised storage solutions’ 
for seized goods where we can’t say–it’s an 
official secret 7
we can safely rely on teamwork
working at our ports often requires strenuous
physical effort equally working out logistical
solutions requires strenuous mental effort we
respect both contributions regardless of job title
or workwear our people pull together to get 
the job done our culture is focused on efficiency
effective teamworking and above all safety associated british ports holdings plc annual report  accounts 2002
in early 2000 we said we would…
• obtain new business which meets new
investment disciplines and focuses on the uk
ports business
• develop a new deepsea container terminal –
dibden terminal – at the port of southampton
• develop valueadded services associated 
with the ports business
• sell £2000m of noncore property and land
• review other noncore assets within the group
• repurchase own shares
developments 20012002
acquisition
investment in new business
disposal
ford and volvo vehicle
processing contracts
baltimore maryland
feb – £14m
cardiff distribution
terminal apr – £25m
abp connect launched apr
rotterdam terminal hull
may – £143m
west dock goole
may – £09m
kintyre terminal hydro
agri ayr jun – £10m
east pier terminal troon
jul – £50m
cold store abp connect
hull jul – £20m
fixedbase operation
burlington vermont
jul – £26m 
mitsubishi vehicle
processing contract at
baltimore maryland and
brunswick georgia
sep – £02m
volkswagen vehicle
processing contract
brunswick georgia
oct – £02m
garston agribulk store
hydro agri garston
oct – £04m
st david’s agribulk
terminal hydro agri
swansea oct – £18m
public inquiry into dibden
terminal application begins
nov
timeline
appointments 20012002
main board
executive
subsidiary boards
2001
tim bowdler joins the
abph board as a non
executive director jan
ross sayers joins the 
abph board as a non
executive director oct
paul allen appointed managing
director abp connect and
joins the abp board apr
8 9
2002 – top line results
timber storage facility hull
jan – £06m
honda car terminal
southampton jan – £06m
carrick terminal iaws
ayr feb – £10m
abp dowds terminal
newport mar – £08m
cold store extension 
abp connect cardiff
mar – £25m
hyundai vehicle
processing facility
baltimore maryland
apr – £31m
mobile harbour crane
hydro agri immingham
apr – £15m
purchase of operating
assets hams hall abp
connect apr – £03m
southampton international
vehicle terminal
southampton apr – £40m
warehousing facilities hm
customs  excise abp
connect jul – £12m
surfacing works humber
international terminal
immingham jul – £06m
rail siding humber
international terminal
immingham aug – £56m
additional vehicle storage
facilities volkswagen
group grimsby
dec – £06m
glass recycling  export
facility southampton
dec – £08m
completed sale of
amports usa’s aviation
division dec – £320m
public inquiry into dibden
terminal application ends
dec
bulkhandling terminal
southampton feb – £15m
extension of timber
terminal hull mar – £06m
construction of forest
products terminal
immingham mar – £10m
refurbishment of
mayflower cruise terminal
southampton apr – £65m
agribulk facility iaws
immingham apr – £11m
storage  distribution
warehouse ayr apr – £10m
queen elizabeth ii t erminal
southampton apr – £20m
expansion of storage and
distribution facilities goole
may – £07m
terminal for saintgobain
building distribution
newport jun – £46m
new cruise terminal
southampton jul – £15m
marina development
lowestoft sep – £10m
redevelopment of port
facilities teignmouth
mar 2004 – £40m
2002 2003
nick palmer and 
phillip williams join the
abp board jan
ian schofield joins the
abp board feb
ross sayers appointed
nonexecutive chairman
of the abph board apr
stephen walsh appointed
general counsel of abp
stuart chambers joins 
the abph board as a non
executive director oct
progress to date…
• over 50 new longterm contracts won during
2000 2001 and 2002 – some of which are set
out below
• planning application for dibden terminal
submitted in october 2000 and public inquiry
completed in december 2002 government
decision expected either in late 2003 or 2004
• abp connect formed to develop valueadded
services increased its turnover by 32 per cent
in 2002
• £1690m of noncore property and land sold
by the end of 2002
• red funnel group sold for £710m in 2000
and amports usa’s aviation division sold for
£320m in 2002
• share repurchase programmes totalling
£2200m completed in 2001
apr
group turnover

£4019m 7
group turnover

00 £3427m
01 £3758m
02 £4019m
underlying operating profit


– ports and transport operations
£1429m 4
underlying operating profit


– ports and transport operations
00 £1286m
01 £1376m
02 £1429m
total underlying operating profit


£1722m 3
total underlying operating profit


00 £1611m
01 £1671m
02 £1722m
underlying profit before tax 
£1381m 6
 continuing operations

before goodwill amortisation and exceptional items
underlying profit before tax
00 £1243m
01 £1304m
02 £1381m 10 associated british ports holdings plc annual report  accounts 2002
chairman’s statement
underlying earnings
per share

304p 8
dividend per share 
1475p 7

before goodwill amortisation and
exceptional items
 restated for the effects of frs19 –
deferred tax
underlying earnings per share

00 263p
01 281p
02 304p
in my first statement as chairman i am
pleased to report another strong performance
by the group during 2002 against a
challenging economic background our core
uk ports business has once again performed
satisfactorily producing 3 per cent growth in
underlying operating profit from continuing
operations this performance is reflected in our
financial results with underlying pretax profit up 
6 per cent to £1381 million 2001 £1304 million
underlying earnings per share increased by 8 per
cent to 304 pence per share 2001 281 pence
per share benefiting from both the strong
operating results and a reduction in the weighted
average number of shares following the previous
year’s share repurchase programme
results
the group’s ports and transport business
continued to grow in 2002 contributing £1429
million to operating profit from continuing
operations an increase of 4 per cent on 2001
£1376 million as anticipated as a result of the
programme of noncore property sales lower
rental income reduced the profit from property
investment to £68 million 2001 £80 million
there was also a reduction in profit from property
development which contributed £120 million
2001 £130 million the contribution from the
group’s associated companies however showed
an increase to £105 million 2001 £85 million
reflecting strong performances from our interests
in two containerhandling businesses
southampton container terminals and tilbury
container services the disposal of noncore
investment properties provided an additional profit
of £07 million 2001 £06 million and goodwill
amortisation at £16 million was similar to the
previous year’s charge 2001 £15 million in
addition the group realised an exceptional profit
of £74 million following the sale of amports
usa’s aviation division this was offset to a large
extent by a £55 million restructuring charge
resulting from a review of the group’s cost base
we estimate that this review will save the group 
at least £30 million per year once the programme
of cost savings is fully implemented comparative
figures for 2001 have been restated for the effects
of financial reporting standard 19 – deferred
tax which the group adopted during the year
business highlights
the core ports and transport business
continued to benefit from our strategy of growing
the business with existing and new customers
our rigorouslytargeted capital investment
programme continued to generate further growth
producing projects highlights for the year
included a new £56 million rail siding for humber
international terminal at immingham the new
£40 million southampton international vehicle
terminal and a new £31 million hyundai vehicle
processing facility at baltimore in maryland usa
we are investing £85 million in passenger
terminal improvements at southampton and
developing a £15 million third cruise terminal
there we also reached agreement in principle for
a new £46 million timber terminal for saint
gobain building distribution at newport and the
port of teignmouth will benefit from a £40 million
redevelopment
the public inquiry into our application to
develop a new sixberth container port at dibden
opposite the port of southampton concluded in
dividend per share
00 1275p
01 1375p
02 1475p 11 11
december 2002 we are convinced of the need
for additional deepsea container capacity in the
uk and remain committed to developing this
facility the government’s decision is now expected
either in late 2003 or 2004
our strategy of disposing of noncore assets
continues as well as the us500 million sale of
the aviation division of our us operations we sold
a further £310 million of property and land during
the year sales of noncore assets since 1 january
2000 total £2720 million
dividend
the directors are recommending a final dividend
of 825 pence per share 2001 775 pence per
share which makes a total of 1475 pence per
share for 2002 2001 1375 pence per share if
approved by shareholders the final dividend will
be paid on 1 may 2003 to shareholders who are
on the register at 4 april 2003
board of directors
sir keith stuart retired from the board on 
16 april 2002 having been chairman since 1982
and managing director of the british transport
docks board associated british ports’
predecessor from 1976 sir keith made a very
significant contribution to the group over many
years he led the company’s successful
privatisation – one of the most successful in the
uk – in 1983 and played a major role in the reform
of industrial relations at the ports the board and 
i wish him well
george duncan nonexecutive deputy
chairman will retire from the board at the annual
general meeting on 15 april 2003 he has served
the company as a nonexecutive director for 17
years during which time the group has benefited
greatly from his considerable boardroom
experience 
stuart chambers group chief executive of
pilkington plc one of the world’s leading glass
manufacturers became a nonexecutive director
on 15 october 2002 i am confident that stuart’s
wealth of industrial experience will enable him to
make an excellent contribution to the board
i would like to take this opportunity to thank
everyone across the group for their continuing
efforts our strong results would not have been
possible without their hard work
prospects
while the general economic climate remains
uncertain group performance so far in 2003 has
been satisfactory the group’s uk ports business
has the advantage of many longterm contracts
with quality customers these agreements together
with the group’ s strong cash flow and diverse spread
of geographical and cargo risk lead us to remain
confident of making further progress in 2003
ross sayers
chairman
19 february 2003
“in my first statement as chairman i am pleased to report
another strong performance by the group” 12 associated british ports holdings plc annual report  accounts 2002
group chief executive’s review
01
“developments
announced during
2002 are consistent
with the group’s
strategy”  13
ports  transport – uk
developments announced during 2002 are
consistent with the group’s strategy of growing
existing business and developing new business
through rigorouslytargeted investment
the group continues to focus on its core ports
and transport activities the group’s main business
of operating its uk ports grew by 3 per cent in
2002 maintaining the positive momentum generated
over the previous two years
the group intends to continue to concentrate
its capital investment programme on commercially
attractive projects generating internal rates of
return of at least 15 per cent supported by long
term contracts with quality customers this strategy
has ensured that over 50 per cent of the uk ports’
business over the next year is underpinned by
customer contracts this stable revenue profile has
helped the group withstand the effects of the current
economic slowdown on trade volumes non
revenueearning or maintenance capital expenditure
continues to be monitored closely and contained
below the group’s annual rate of depreciation
the locations of the group’ s uk ports constitute
a good geographical spread of risk in addition
no single type of cargo accounts for more than 10
per cent of the group’s uk ports turnover 
this carefullyfocused strategy has delivered
strong growth in underlying earnings per share
and an increase in the group’s return on capital
employed over the last three years
dibden terminal the group’s proposed deep
sea container port development at southampton
supported by the substantial growth projected in
deepsea container traffic offers further
opportunities for growth container volumes through
the southampton container terminal grew by 10
per cent in 2002 the public inquiry into the group’ s
application to develop dibden t erminal commenced
in november 2001 and was completed on schedule
in december 2002 the government’s decision is
now expected either late this year or next year
to accommodate increasing volumes of roll
onrolloff traffic imports of coal and shortsea
container traffic the group is looking to construct
further riverside terminals on the humber estuary
where abp owns and operates four ports – grimsby 
immingham hull and goole these planned
facilities will remove the need for vessels to lock in
and out of ports enabling quicker turnaround and
the accommodation of larger ships
the major growth projects at dibden terminal 
and on the humber will only be developed once
the group has secured customer contracts that
meet its investment criteria
abp connect which focuses on developing 
the valueadded services that the group can offer
customers has now been operating for
approximately 18 months this division is an
extension of the ports and transportrelated activities
in which the group already has considerable
expertise abp connect has firmly established
itself in the market by operating and managing
hams hall railfreight terminal birmingham and
by securing a major contract with hm customs 
excise for the storage of seized goods the
group’s strategy is to consolidate the valueadded
services that are provided in order to give them
greater focus and to realise their full potential
abp connect has performed well in line with
expectations
the group continues to take a cautious view in
respect of strategic acquisitions activities closely
aligned with the group’s core business will be
considered provided they meet the prescribed 
hurdle rate of return of 15 per cent for new capital
investment
abp is continuing to work with the uk
government with regard to antiterrorism measures
in the wake of 11 september 2001 for security
legislation to be successful in the ports industry 
it needs to be well focused on the immediate ship
and port interface and pay particular attention to
cargoes and facilities of strategic importance to
national security
as part of the group’s ongoing programme of
managing its cost base a further cost review was
undertaken towards the end of the year with the
intention of reducing future operating expenditure
this resulted in a pretax exceptional restructuring
charge to the profit and loss account of £55 million
in 2002 it is estimated that the review will realise
savings of at least £30 million per year once the
programme of cost savings is fully implemented
ports  transport – usa
in september 2001 the group announced the
result of a review which it undertook in order to
determine whether the group’ s usa operations were
in line with its core business objectives 
as a result of this review the group decided
to retain amports usa’s seaport division which
is more closely aligned with the group’s uk port
operations and to sell amports usa’s aviation
division subject to receipt of a satisfactory offer
following the terrorist attacks in the usa on
11 september 2001 the group deferred this
process until 2002 in july 2002 the group
announced that it had reached agreement for the
sale of this operation to subsidiaries of macquarie
global infrastructure funds for a cash
consideration of us500 million amports
usa’s aviation division comprised 11 airport
operations and the sale of each was conditional
upon obtaining consents from the relevant airport
and regulatory authorities the sale was fully
completed in december 2002 
developing amports usa’s seaport division 
is part of the group’s growth strategy new vehicle
processing accounts won in 2002 combined with
new accounts won in the previous year contributed
to vehiclevolume growth of 48 per cent yearonyear 
disposal of noncore assets
the group will continue to sell nonoperational
property and exploit the potential of its property
portfolio however those assets essential to
support the growth strategy in the main ports and
transport business will be retained
as a result of property sales both income and
profit from investment property rentals fell
however the growth generated by the strategic
reinvestment of proceeds from noncore property
and land sales into the core ports and transport
business should compensate for this
during 2002 the group sold a further £310
million of noncore property and land assets this
brings the total amount of noncore property and 
land sold since 1 january 2000 to £1690 million 
the group remains on track to achieve its target
of £2000 million for total noncore property and
land sales set at the beginning of 2000 the
group also received £710 million from the sale of
red funnel group in 2000 together with the
£320 million from the sale of amports usa’s
aviation division this brings the total amount of
noncore asset sales since 1 january 2000 to
£2720 million
02 03
01 the group’s main business – its uk ports
and transport operations – grew by 3 per cent
in 2002
02 investment at the port of grimsby included
the provision of additional carstorage facilities
for the volkswagen group
03 the group is looking to develop further
riverside terminals on the humber 14 associated british ports holdings plc annual report  accounts 2002
group chief executive’s review continued
operational management
in april 2002 abp’s operationalmanagement
team was strengthened by the appointment of
stephen walsh as general counsel stephen
was formerly legal director of british airways plc
following the sale of the aviation division
doug tipton chief executive officer of
amports usa agreed to step down from 
his post having spent three successful years
improving the performance of the group’s us
operations he was succeeded at the beginning
of 2003 by jim davis who has been at
amports for three years in senior sales 
and marketing and operating roles jim has
considerable experience in transportrelated
businesses through his previous work for
sealand mitsui osk american inc and
contship
mike fell obe abp’s port director for 
hull  goole will be retiring at the end of march
2003 after 32 years’ service in a distinguished
career that has seen the fortunes of the port 
of hull improve to become one of the uk’s
major ports douglas morrison currently hull 
 goole’s deputy port manager will succeed
mike fell effective 1 april 2003
employees
the interests of the group’s employees
continue to be aligned to those of the group
through opportunities to acquire company
shares by way of share schemes and through
the payment of bonuses in some areas
notably those where individual performance 
can affect the group’s results significantly
performancelinked bonus incentives are used
to reward achievement of specified targets 
the group’s success is clearly dependent 
upon the continuing effort and ingenuity of 
our staff who work hard to achieve the 
group’s aims
the health and safety at work of the 
group’s employees and others affected by 
its activities is of paramount importance to 
the group the group’s corporate policy on
health and safety is backed by strong
commitment from the board of directors and 
is based on the firmlyheld view that injuries 
and cases of ill health suffered at work 
are preventable
corporate social responsibility
the group takes its corporate social
responsibility csr seriously we intend to
publish for the first time a separate csr 
report later this year
future growth
three major strengths of the group’s uk
ports business support its growth strategy 
first the geographic spread of its 21 ports
throughout the uk reduces the business’s
reliance on any one trade route second 
as the group’s uk ports business handles a 
wide variety of trades it is not dependent upon
any one type of cargo third over 50 per cent
of the group’s uk ports business for the next 12
months is already under contract these factors
lead to the belief that the group is well placed 
to make further progress during the course of
this year
in the medium term the opportunities to
invest in additional riverside terminals on the
humber and at dibden terminal – the proposed
deepsea container port development at
southampton – together with regular expansion
at the uk ports will provide a solid platform 
for future growth
bo lerenius
group chief executive
19 february 2003 15
operating highlights
02 01
01 the port of southampton’s multiuser bulk
handling terminal has benefited from a £15
million upgrade of facilities
02 the group’s south wales ports achieved
growth in steel volumes in 2002
ports  
transport – uk £m 
3257
215 71
1414
42 31
ships’ dues and wharfage dredging supply
of electricity water etc
stevedoring cargo handling use of facilities
such as cranes to load and unload cargoes
storage of cargo
portrelated property income from tenants on
port estates using port facilities
pilotage and conservancy where abp has
statutory responsibility
valueadded services including ambient 
and cold storage blending bagging and
transportation haulage and warehousing
ports  
transport – usa £m 
361
62 207
15
11 2750
dockage and wharfage
unloading and loading cars
car processing including receiving
and inspection
vehicleremediation works 
storage
property investment
 property development £m 
401
16 38
188
22 105
property investment – property
income from tenants on port
estates not using port facilities
property development – income
from sales of land and property no
longer required for port operational
purposes
associates
£m 
441
39 97
105
20 235
southampton container t erminals
49 owned
tilbury container services 
33 owned
container handling storage
including temperaturecontrolled
cargoes shipplanning services
cargo inspection and consolidation
the cardiff bay partnership 
45 owned
property rental income from a
portfolio of properties on cardiff bay
estate
ports  
transport – uk £m 
turnover
growth
underlying operating profit
growth
revenues earned from
continuing operations 16 associated british ports holdings plc annual report  accounts 2002
1
2
9
1022
11
4
3
5
6
12 13
141522
1622
7
18 22
17 22
1922
20
8
2122
ports  transport – uk
hull  goole – turnover up 3 
strong growth in forest products
growth in rollonrolloff traffic
reduction in container traffic at goole
grimsby  immingham – turnover up 6 
uk’s numberone port for coal imports
strong growth in vehicle imports and forest
products
growth in rollonrolloff traffic
southampton – turnover up 3 
strong growth in vehicle imports and exports
growth in container traffic and the uk’s number
one cruise port
loss of banana trade
south wales ports – turnover in line
growth in forest products steel and agribulks
reduction in iron ore and coal imports due to
corus’s restructuring
shortsea ports – turnover up 10 
strong growth in rollonrolloff and agribulk traffic
increased ferry passenger traffic
abp connect – turnover up 32
new business at hams hall railfreight terminal 
and hm customs  excise
abp’s ports handle more than 120 million tonnes 
of cargo every year the ports range in size from
grimsby  immingham the uk’s largest port
complex based on tonnage handled to smaller
sized specialist ports such as teignmouth 
abp is committed to supplying a fast efficient
costeffective and reliable service for customers
providing a comprehensive range of highquality
facilities capable of handling virtually any cargo
good locations modern facilities excellent road and
rail links and substantial capital investment mean
abp’s ports can meet the needs of customers
operating in an increasingly competitive market place
shortsea ports
1 troon
2 ayr
3 silloth
4 barrow
5 fleetwood
6 garston
7 plymouth
8 t eignmouth
9 king’ s lynn
10 lowestoft
11 ipswich
south wales
ports
12 swansea
13 port t albot
14 barry
15 cardiff
16 newport
hull  goole
17 hull
18 goole
grimsby  
immingham
19 immingham
20 grimsby
southampton
21 southampton
abp connect
22 national
coverage
turnover up 7
continuing operations 17
ports  transport – uk
cargoes handled in 2002
port liquid coalcoke iron ore agribulks other dry forest fresh other break containers rollon vehicles passengers
bulks bulks products produce  bulk  rolloff  cruises
perishables general cargo
hull  goole
hull
goole
grimsby  immingham
grimsby
immingham
southampton
south wales ports
barry
cardiff
newport
port talbot
swansea
shortsea ports
ayr
barrow
fleetwood
garston
ipswich
king’s lynn
lowestoft
plymouth
silloth
teignmouth
troon
underlying operating profit up 3
continuing operations 18 associated british ports holdings plc annual report  accounts 2002
paul allen 46
managing director abp connect
andrew kent 55
port director port of southampton 
stephen walsh 38
general counsel
1
2
3
the depth of experience within abp’s operational
management team is quite remarkable that said
innovation and sharing knowledge are also key to
our success” 
nick palmer  port director  shortsea ports
“
4 5
1
2
7 3
9
abp’s operational
management 19
budha majumdar 56
port director south wales ports
ian schofield 41
engineering director
nick palmer 43 
port director shortsea ports 
bo lerenius 56
group chief executive
mike fell 59 
port director hull  goole 
john copping 55
port director grimsby  immingham
4
5
7 10
11
12
8
9
hywel rees 44 
company secretary  
head of group personnel 
13
10
9
11
12
richard adam 45
group finance director
david twidle 54
assistant to group chief executive
phillip williams 45
group property director 
8
13
6
6 corporate social responsibility
a copy of our csr report to be published later this year can
be obtained using the form of proxy enclosed with this annual
report the report will also be available on our website at
wwwabportscouk
20 associated british ports holdings plc annual report  accounts 2002
introduction
the group values all of its stakeholders
recognising that they are the foundation of the
business and key to its success it works closely
with them to develop effective and lasting
relationships
during the year  the group established a corporate
social responsibility csr management committee
chaired by the group finance director  the csr
committee is responsible for reviewing and co
ordinating the group’ s strategy and policies on a wide
range of areas including the environment health
and safety  employment communities and corporate
ethics the committee is also responsible for engaging
with and reporting to the group’ s csr stakeholders
further details on the group’ s corporate social
responsibilities will be provided in its first csr report
which will be published during 2003 copies of this
report can be ordered by ticking the appropriate
box on the form of proxy enclosed with this annual
report
the riskmanagement framework and processes
described in the corporate governance statement
on page 65 are designed to identify all of the csr
related risks that the group faces the csr committee
works closely with the risk management working
group to ensure that existing and emerging risks 
are managed appropriately 
employment
the group recognises that its employees are key to
the achievement of its business objectives and the
enhancement of shareholder value employment
policies are designed to ensure that the group attracts
retains and develops employees on the basis of
ability and qualifications without discrimination or
prejudice under any circumstances this includes
race colour  nationality  ethnic origin gender  sexual
orientation marital or parental status age disability 
social or economic class trade union membership
or nonmembership and religious or political beliefs 
in line with its business requirements it is the group’ s
policy to promote from within the organisation
wherever practicable the group believes that this is
important for its ongoing success internal promotion
not only provides a visible meritbased path of career
development – a key factor in motivating and retaining
employees – it also supports the transfer of
knowledge and expertise throughout the business
to facilitate this the group encourages regular
feedback and goalsetting both of which are
recognised as critical to personal development and
job satisfaction annual personal development
reviews provide the formal framework for this
personal development is further encouraged by a
mentoring scheme which is open to all uk employees
the group is committed to ensuring that all employees
are fully aware of their roles and responsibilities and
the current activities and progress of the group
every employee is provided with a copy of a handbook
which gives details of terms and conditions of
employment and information on group policies and
procedures a quarterly staff magazine ‘ports’
provides employees with news features and comment
from across the group additionally  a corporate
intranet has been introduced to facilitate the flow of
information throughout the business 
the group’ s remuneration policies are designed to
ensure that the interests of its employees are aligned
with those of its other stakeholders in addition to
competitive salaries an element of the overall
package is linked to the group’ s performance and
all employees are invited to join the group’ s share
schemes
additional benefits provided by the group include
private medical insurance for employees and their
families competitive pension benefit schemes and
an employee assistance programme provided
through a leading uk organisation 
environment
all of the group’ s ports are located in or near
environmentallysensitive areas the group’ s
environmental policy – to manage its existing
obligations to the environment in a responsible
manner and to develop its ports and transport
business to meet the needs of the country’ s trade
in a manner which encompasses sustainable
development both for its business and the
environment – seeks to establish a balance
between the need to act commercially and the
group’ s commitment to protecting the
environment the group’ s key environmental
objectives include the following
•t o manage operations so as to be sustainable
economically and environmentally
•t o continue to identify  understand and prioritise
all of the environmental risks inherent in the
business allocating the necessary resources to
ensure that these risks are managed effectively
and economically
•t o continue to operate its ports to meet the
growing demand for certain trades while
minimising any adverse environmental effects
•t o ensure that the group maintains the harbours
that are under its control to support safe
navigation
•t o continue its work with environmental non
governmental organisations in partnership
towards shared objectives which benefit the
environment
the group chief executive is the member of the
board responsible for the development and
implementation of the group’ s environmental
policies senior operational managers are
responsible for the management of environmental
issues relating to the operations under their
management during the past year the group has
reviewed its environmental policy and objectives
01 03 04
02 21
developed a new environmentalmanagement
framework updated its environmentalimpacts
register and established data and targets for a
number of its environmental impacts the group is
sensitive to how its operations affect the following
areas in particular
• air quality 
• biodiversity
•climate change and resource management
• estate management
• integrated coastalzone management
• marine matters within its areas of responsibility
• sustainable port development and sustainable
transport networks
•waterquality management 
•waste management
further information on these impacts and the
group’ s management of them will be provided in 
the forthcoming csr report
communities
by providing livelihood and prosperity through direct
and indirect employment opportunities many of the
group’ s ports are the economic mainstay of their
local and regional communities in turn the group
relies on the health stability and prosperity of these
communities to provide its employees with a suitable
environment and to provide it with an appropriate
skills base for the group’ s future recruitment
the group is always looking for ways in which it can
bring about further opportunities for the economic
and social development of its communities t o
make this happen the group is forging partnerships
with local authorities schools trade and business
organisations and maritime and medical charities
health and safety
the health and safety at work of the group’ s
employees and others affected by its activities is of
paramount importance to the group the group’ s
corporate policies on health and safety are backed
by a strong commitment from the board and are
based on the firmlyheld view that injuries and
cases of ill health suffered at work are preventable
these policies are communicated to all employees
and contractors
the group’ s comprehensive health and safety
training policy is designed to ensure that employees
receive an appropriate level of training in accordance
with their job the group has also established
procedures for assessing evaluating monitoring
and supervising contractors operating on its
premises
t rained and competent risk assessors carry out risk
assessments of all the group’ s activities and
workplaces to ensure that its operations are conducted
with appropriate regard to health and safety  the
robustness of the group’ s health and safety standards
is verified at several levels in addition to reviews by
the group safety manager and local managers and
supervisors its policies and procedures are reviewed
by the group’ s internal audit department accident
and incident data are also analysed for trends and
patterns to assess performance and to target specific
areas for action
customers
capital investment in the group’ s existing operations
and new developments supported by longterm
contracts with both existing and new customers
is the most important feature of its current growth
strategy the group believes that providing
sustainable solutions for the strategic needs of its
customers helps to align its interests with those of
its customers and reduces operational risk for
both parties
the group is committed to developing longterm
relationships with its customers and to ensuring
that the standard of its services is consistently high
throughout the length of any contract
the group continues to broaden the range of services
offered by its ports and by abp connect its value
added services division with the aim of helping its
customers to simplify their supply chains and reduce
their costs
group and operational senior management maintain
a regular dialogue with the group’ s customers to
ensure that any service deliveryrelated issues are
resolved promptly and that its customers are aware
of any relevant developments within its businesses
all of the group’ s businesses are required to comply
in full with all relevant competition legislation
suppliers and subcontractors
the group is committed to ensuring that its dealings
with suppliers and subcontractors are conducted
so as to ensure the following
• the advance agreement of a set of reasonable
terms of trade
• the establishment of a fair and transparent
relationship based on mutual trust
• the settlement of amounts due under agreement
on or before the due date
• the selection of the most efficient solution for the
business taking into account quality  wholeof
life cost and safety and environmental aspects
among other considerations
• respect for the sensitive nature of commercial
agreements between the group and its suppliers
and subcontractors
• the application of a zerotolerance approach to
any corruption or bribery in its commercial
negotiations with suppliers or customers
shareholders and suppliers of finance
details of relationships with shareholders are set out
in the group’ s statement on corporate governance
on pages 64 and 65
03 in december 2002 the group was honoured
to receive the proshare award for ‘best new
plan’ in recognition of the successful launch of
our new share incentive plan to uk employees  
04 initiatives – such as this art competition
sponsored by abp – help raise awareness of
the ports’ role in their communities among local
schoolchildren
01 the port of grimsby  immingham’s
consistently high standards of health and safety
at work were recognised for the third time by
the royal society for the prevention of
accidents
02 a former pilot cutter in service at the port of
swansea was donated to cardiff sea cadet
corps for use as a training vessel associated british ports holdings plc annual report  accounts 2002
“lorem ipsum dolor sit amet consendrenut ctetuer
adipiscing elit sed diam utyrew aha nonummy nibh may
consectetuer adipiscing elit sed diam nonuy nibh
euismod tincidunt yes laoreet dolore magna aliquam erat
lem delenit augue duis te feugait null facilisi ser”
associated british ports holdings plc annual report  accounts 2002
board of directors
01 richard adam
group finance director 45
having qualified as a chartered accountant with
kpmg in 1982 richard gained a broad range of
experience in a variety of senior financial posts –
predominantly within the media sector – before
joining the group in 1999 at the age of 30 he was
group finance director of tvs entertainment plc
which held the itv franchise for the south and
southeast of england during his time with the
company he raised some £300 million of funds
for the acquisition of new businesses in 1993 as
chief financial officer of international family
entertainment uk richard played a key role in
planning and launching the new ‘family channel’
on satellite television between 1996 and 1999
richard was group finance director of hodder
headline plc the bookpublishing business
owned by wh smith group he is credited with
building up hodder headline’ s financial controls
during a period in which pretax profits grew by
64 per cent since joining associated british ports
holdings plc abph richard has developed its
communications with investors and stakeholders
significantly and overseen the group’ s disposal of
noncore assets he is also chairman of both the
group’ s risk management working group and
main defined benefit pension scheme
02 aubrey adams
nonexecutive 53
aubrey joined the board in 1996 he is a member
of the audit remuneration and nomination
committees a fellow of the institute of chartered
accountants aubrey has spent the majority of 
his career within the property sector in 1990 he
joined savills plc the global property services
business as finance director becoming
managing director in 1991 and group chief
executive in 2000 previously he was financial
director of peachey property corp plc where 
he played an important part in turning the
company around aubrey holds a number of 
other board positions and is a director of
trammell crow savills and a nonexecutive
director of wigmore hall he is also chairman 
of the accounting committee and a member 
of the policy committee of the british property
federation aubrey’ s knowledge of property
matters has contributed greatly to the success 
of the group’ s estatemanagement activities 
and its noncore property disposal programme
03 tim bowdler
nonexecutive 55
tim joined the board in 2001 he is a member 
of the audit remuneration and nomination
committees tim is chief executive of johnston
press plc one of the uk’ s major regional
newspaper publishers which he joined as group
managing director in 1994 since becoming chief
executive in 1997 tim has more than doubled
the size of the group tim is also president of the
newspaper society a member of the council of 
the newspaper society a director of the press
standards board of finance and a nonexecutive
director of the press association ltd tim spent 
the early part of his career in the manufacturing
sector before moving into publishing he trained 
as a production engineer progressing through 
a variety of managerial appointments leading up 
to general management prior to johnston press 
tim worked as a divisional managing director of
cape plc’ s building and architecturalproducts
companies tim’ s advice to the board is drawn 
from his experience as the chief executive of an
expanding public company
04 stuart chambers
nonexecutive 46
stuart joined the board in 2002 he is a member 
of the remuneration and nomination
committees he joined pilkington plc one of the
world’ s leading glass manufacturers in 1996 as
group vicepresident responsible for marketing
and business development of building products
in 1998 he was promoted to managing director
of pilkington’ s primary products europe and was
subsequently promoted to president of building
products worldwide in may 2002 he became
pilkington’ s group chief executive stuart began
his career with shell where using his academic
background in applied physics he worked as a
chemical engineer and market analyst in a
number of shell’ s divisions including shell oil uk
and deutsche shell ag before becoming shell
oil uk’ s regional sales manager for retail in 1986
in 1988 he joined the mars corporation as a
national account manager becoming its
european sales director four years later in 1995
he was promoted to vicepresident for sales 
and marketing of mars electronics international
22
01 02 03 04 stuart is able to share his experiences as an
active chief executive of a public company with
the board on many business matters
05 george duncan
nonexecutive deputy chairman 69
george joined the board as a nonexecutive
director in 1986 and was appointed deputy
chairman in 1 998 he is a member of the
nomination committee and chairman of the
remuneration committee george’ s extensive
business experience spans a variety of industries
including brewing and financial services and he
has held a number of executive and non
executive board positions currently he is non
executive chairman of housebuilders swan hill
group plc he is also a fellow of the institute of
chartered accountants and freeman of the 
city of london the board has benefited from
george’ s considerable boardroom and business
experience over the many years in which he has
been involved with the group he is stepping
down from the board at the 2003 annual general
meeting agm
06 bo lerenius
group chief executive 56
since his appointment as group chief executive 
in may 1999 bo has developed the management
team refocused the group on its core ports and
transport business and instigated a programme to
dispose of noncore assets he is also responsible
for the significant progress the group has made in
implementing its clearlydefined growth strategy
while not having previously worked in the ports
industry directly bo had firsthand knowledge of
a portuser’ s requirements from his time as vice
chairman and then president and chief executive
of stena line one of sweden’ s largest companies
he was also director of new business investments
at stena ab bo had previously been group
president and chief executive of ernstromgruppen
a buildingmaterials group and a director of both
t arkett and nordjsö färg he is currently a non
executive director of inmarsat ventures ltd 
bo is a member of the nomination committee
07 derek sach
nonexecutive 54
derek joined the board in 1 998 he is chairman 
of the audit committee and a member of the
remuneration and nomination committees 
with a career spent in investment management
and banking – he is currently managing director 
of specialised lending services at the royal
bank of scotland plc – derek provides the board
with strategic advice on banking and financing
matters he joined royal bank of scotland in
1 992 to set up its specialised lending services
business and has held a number of posts
subsequently including director of group risk 
in 1 997 derek was seconded for one year as
chief executive to t esco personal finance a joint
venture between royal bank of scotland and
t esco before joining royal bank of scotland
derek was managing director uk of 3i group
from 1 988 to 1 992 his other directorships include
the berkeley group plc and priority sites limited
he is also deputy president and deputy chairman of
the london chamber of commerce and industry 
08 ross sayers
nonexecutive chairman 61
ross spent almost a decade running utility
companies before joining the board in october
2001 as a nonexecutive director  becoming
chairman after the 2002 agm he is a member 
of the remuneration and nomination committees
ross has a long and distinguished track record
within the international transport industry  from
1988 to 1 992 he was executive chairman of the
state rail authority of new south wales during
this time he introduced a major change
programme in which customer service standards
were enhanced operating costs significantly
reduced and the railway infrastructure and rolling
stock were upgraded from 1 986 to 1 988 ross
was executive chairman of new zealand railways
where he introduced a change programme to
realise significant cost savings and efficiency
improvements in 1993 he became chief
executive officer and managing director of hong
kongbased clp holdings previously known as
china light and power  where he refocused the
utility on customer service improved operating
efficiencies and reduced costs in 2000 he moved
to the uk to become chairman of innogy holdings
plc he resigned in 2002 following the acquisition
of innogy by german utility rwe ross is a fellow
chartered accountant nz and is also a non
executive director of intertek t esting services plc
and network rail
09 andrew simon obe
nonexecutive 57
andrew joined the board in 1994 he is a member
of the audit remuneration and nomination
committees the first 23 years of andrew’ s career
were spent with evode group where he was
chief executive officer and chairman until 1989
during which time he grew the group’ s adhesives
and sealants business from a £10 million to a
£300 million international speciality chemicals
and materials group developing a number of
market leadership positions in the process
following the takeover of evode ten years ago
andrew has built up a widelydiversified portfolio
of nonexecutive directorships and chairmanships
in uk european and north american companies
across a variety of sectors he is currently non
executive chairman of germany’ s kaffee partner
zeus group ltd and ascent investments ltd
deputy chairman of dalkia plc is on the
supervisory board of sgl carbon ag of germany
and is a nonexecutive director of brake brothers
holdings limited hampsons plc and finning
international inc of canada the considerable
european and american business experience
that andrew shares with the board includes major
strategy reviews and corporate development in a
wide range of industries 
23
05 08 06 07 09 operating and financial review
the group’s performance in 2002 was once
again strong a 69 per cent increase in group
turnover from continuing operations to £4019
million 2001 £3758 million represented solid
growth underlying pretax profit rose by 59
per cent to £1381 million 2001 £1304 million
and underlying earnings per share grew by 82
per cent to 304 pence 2001 281 pence a
total proposed dividend of 1475 pence per
share 2001 1375 pence represents an increase
of 73 per cent on last year
the group’s total underlying operating profit
from continuing operations grew by 31 per cent
to £1722 million 2001 £1671 million which is
consistent with the growth achieved by the core
uk ports and transport business
analysis of total underlying operating profit from
continuing operations
a detailed segmental analysis of the operations
which have combined to produce the group’s
results is given in note 2 to the financial
statements on page 36 and a discussion of the
group’s strategy is provided in the group chief
executive’s review on pages 12 to 14 significant
features of the operating performance of each
business segment are discussed below
ports  transport – uk
turnover in the core uk ports and transport
business – which accounted for more than 80 
per cent of the group’s continuing turnover and
continuing underlying operating profit – increased
by 71 per cent to £3257 million 2001 £3042
million and underlying operating profit grew by
31 per cent to £1414 million 2001 £1372
million building on the increased growth generated
over the previous two years this growth which 
is a key indicator used in managing the group
was achieved against a challenging economic
background and despite £31 million of additional
insurance costs in the year that the group in
common with other transport companies has had
to meet as a result of the terrorist attacks in the
usa on 11 september 2001 this performance
reflects the robustness of the group’s strategy of
growing its core business through rigorously
targeted investment in conjunction with securing
new longterm customer contracts
total annual throughput at the group’s 21 uk
ports reduced to 120 million tonnes 2001 125
million tonnes however excluding lowmargin oil
and a decrease in iron ore imports driven by corus’ s
restructuring in south wales both of which had
limited impact on the group’s results the group
experienced an underlying growth in throughput
“the group’s performance in 2002 was once again strong
a 69 per cent increase in group turnover from continuing
operations to £4019 million represented solid growth”
24 associated british ports holdings plc annual report  accounts 2002
a ports  transport – uk £1414m
b ports  transport – usa £15m
c property investment £68m
d property development £120m
e share of operating profit 
   in associates £105m
b
c
d
e
a
a ports  transport – uk £1372m
b ports  transport – usa £04m
c property investment £80m
d property development £130m
e share of operating profit
   in associates £85m
b
c
d
e
a
2002  £1722m
2001  £1671m 25
of 16 per cent at its uk ports this growth was
achieved against a decrease in coal imports at
the group’s south wales ports importantly key
trades continued to show growth including roll
onrolloff traffic containers vehicle imports and
exports imports of forest products and cruise
ship calls agribulk volumes also recovered in
the second half of 2002 having been impacted
by the footandmouth outbreak in 2001
developments within the individual uk ports
business units are discussed below
hull  goole
turnover increased by 25 per cent with
forest products in particular showing good
growth rollonrolloff traffic and the number 
of ferry passengers passing through the port 
of hull also grew this growth more than
compensated for a reduction in container traffic
at the port of goole
during the year the group invested some
£12 million in additional storage facilities at 
the port of hull – the uk’s top timber port – to
support the continued growth in its timber trade
at the port of goole abp reached a long
term agreement with existing customer rms
europe to develop new storage and distribution
facilities creating 13000 square metres of
undercover storage for weathersensitive cargoes
including paper products and aluminium coils
grimsby  immingham
reconfirmed as the uk’s number one port 
in the port tonnage figures published by the
department for transport towards the end of
2002 the port of grimsby  immingham
increased turnover by 59 per cent humber
international terminal continued to perform 
well leading to further growth in immingham’s
coal trade forest products container traffic
rollonrolloff traffic and vehicle imports also
performed well
revenueearning projects that became
operational during the year included the
provision of additional carstorage facilities 
for the volkswagen group at grimsby a 
£56 million investment in a rail siding to
accommodate increased traffic created by 
the growing demand for humber international
terminal and the addition of a new £15 million
mobile harbour crane to service hydro agri’s
agribulk imports a £11 million warehouse
complex for iaws built under a 15year
contract and a £10 million investment in a forest
products terminal under a 20year contract
both at immingham are scheduled for
completion this year
southampton
turnover increased by 35 per cent 
boosted by strong vehicle imports and exports
the continued growth in cruise traffic and a strong
deepsea container market these trades more
than compensated for the loss of banana imports
during the year a £40 million multideck car
terminal – one of the first of its kind in the uk –
became operational built under a tenyear
agreement with wallenius wilhelmsen lines 
the southampton international vehicle terminal
provides almost five hectares of storage on a
footprint of approximately one hectare the port
also opened a dedicated honda terminal and
won additional vehiclehandling business to export
toyota avensis and corolla models to portugal
work is already under way on a £65 million
major reconstruction of the mayflower cruise
terminal used to service po cruises under a
tenyear agreement in addition abp and
cunard line reached an agreement confirming
southampton as cunard’s uk base through to
2009 underpinning abp’s £20 million
refurbishment of the queen elizabeth ii terminal
abp is also investing £15 million to develop a
third cruise terminal on the site of a former
banana terminal 
other developments included a £15 million
investment in the port’s bulk trade with a
refurbishment of facilities at its multiuser bulk
handling terminal and a £08 million investment
in an environmentallyfriendly scheme to
construct the uk’s first portlocated glass
recycling plant this scheme received a freight
facilities grant from the uk government as the
recycled glass is transported from the port by
sea taking over 640000 lorry miles off the
roads each year 
01 forest products – a key trade – continued to
show growth during the year
02 humber international terminal at the port of
immingham performed well boosting the port’s
coal trade
03 the railconnected southampton international
vehicle terminal became operational in april
2002 following a £40 million investment
01 02 03
3 growth 
from uk ports 26 associated british ports holdings plc annual report  accounts 2002
operating and financial review continued
“the group received £320 million in respect of the sale of
amports usa’s aviation division in 2002 bringing the
total amount of proceeds from noncore asset sales since
january 2000 to £2720 million”
the public inquiry into the group’s application
to develop dibden terminal was completed on
schedule in december 2002 the government’s
decision is now expected either in late 2003 or
2004 costs capitalised in respect of this
development totalled £354 million 2001 £240
million as at the end of 2002 the group remains
confident about the need for additional deepsea
container capacity in the uk and the prospects
for this project however if the government’s
decision results in the project not proceeding
costs of this project will be writtenoff to the profit
and loss account in the year in which the decision
not to proceed is taken
south wales ports
our south wales ports experienced a
challenging year in 2002 and turnover was
marginally down by 04 per cent this was driven
by a major reduction in coal imports and to a
lesser extent iron ore imports but was offset by
some significant business wins and increased
throughput in forest products steel and agribulks 
during the year abp completed a £08 million
extension to abp dowds terminal at the port of
newport on the back of a longterm agreement
with steel customer w e dowds shipping
furthermore abp agreed in principle with saint
gobain building distribution to develop a £46
million terminal to receive and store forest products
at that port this is expected to become operational
during the first half of this year 
shortsea ports
turnover grew significantly up by 100 per cent
mainly as a result of strong growth in rollonroll
off and agribulk traffic container throughput and
ferrypassenger traffic also grew
at the port of troon abp acquired the former
ailsatroon shipyard under a 50year lease this
55hectare site contains two dry docks a pier two
warehouses and 14600 square metres of land
available for development 
investments in agribulk facilities were made at
the port of ayr with the opening of the £10 million
carrick terminal which was constructed following
a 15year agreement with iaws and at the port
of ipswich where a £22 million grain storage and
distribution complex was completed for the grain
terminal the port of teignmouth is to receive a
£40 million investment associated with a long
term agribulks contract also at the port of ayr an
investment in a £10 million warehousing facility
was announced following a longterm agreement
with peacock salt at the port of silloth a £02
million storage and distribution centre was
completed for prime molasses during 2003
work will commence on a £10 million marina
development at the port of lowestoft
abp connect
launched in 2001 abp’s valueadded services
division abp connect had some significant
business wins in 2002 which resulted in turnover
increasing by 319 per cent
abp connect was selected to operate a
railfreight terminal within the strategicallylocated
400hectare hams hall distribution site east of
birmingham since acquiring the site for a cash
consideration of £03 million abp connect has
already attracted new customers securing
railfreight services with medite shipping leading
railfreight operator gb railfreight and combined
transport abp connect also won a medium
term contract with hm customs  excise to
provide highsecurity storage for illegal imports 
at locations throughout the uk a £25 million
extension to the cardiff cold store was also
completed during the year
ports  transport – usa
turnover from amports usa’s seaport
division’s activities which comprise the group’s
continuing ports and transport operations in the
usa increased by 207 per cent to £361 million
2001 £299 million continuing underlying
operating profit increased to £15 million 
2001 £04 million
the significant improvement in this business 
is due to vehiclevolume growth of 477 per cent
as a result of new accounts coming on stream
some 582000 vehicles were handled during the
year 2001 394000 this volume increase was
partially offset by some vehiclecustomisation
reductions and competitive price pressures as a
result of the general economic slowdown in the usa
amports invested £31 million to
accommodate vehiclevolume growth associated
with the group’ s new hyundai account this included
a new 275hectare vehicleprocessing facility at
the chesapeake marine terminal in baltimore
maryland which became operational in april 2002
the sale of amports usa’s aviation division
to subsidiaries of macquarie global infrastructure
funds was completed in december 2002 for a
total cash consideration of us500 million £320
million prior to completion of the sale the
division contributed turnover of £265 million and
an underlying operating profit of £37 million the
group achieved an exceptional pretax profit of
£78 million from the sale 27
01 a new storage and distribution facility was
opened for prime molasses at the port of
silloth
02 our valueadded services division abp
connect launched in 2001 had some significant
business wins in 2002
03 throughput at southampton container
terminals increased by 95 per cent
01 02
property investment 
as a result of the group’s ongoing disposal of
nonoperational property turnover from property
investment rentals reduced to £93 million 2001
£108 million and operating profit to £68 million
2001 £80 million
property development
towards the end of 2002 the group completed
the sale of ten hectares of land at the port of
plymouth jointly to southwest of england regional
development agency and english partnerships for
a cash consideration of £90 million as a result of
this and other sales made during the course of
the year turnover from property development was 
£308 million 2001 £309 million operating
profit was £120 million 2001 £130 million
disposal of noncore assets
in total the group has sold a further £310
million of noncore property and land since 
1 january 2002 this brings the total amount of
noncore property and land sold since 1 january
2000 to £1690 million the group remains well
on track to achieve its target of £2000 million of
noncore property and land sales
the group also received £710 million in respect
of the sale of red funnel group in 2000 and £320
million in respect of the sale of amports usa’s
aviation division in 2002 bringing total noncore
asset sales since 1 january 2000 to £2720 million
associates
the group’s share in the turnover of associates
increased by 97 per cent to £441 million 2001
£402 million its share of operating profit rose
235 per cent to £105 million 2001 £85 million
both southampton container terminals sct
– 49 per cent owned – and tilbury container
services tcs – 33 per cent owned – experienced
increased container throughput in 2002 sct
handled 1275000 container units an increase of
95 per cent and tcs handled 277000 container
units an increase of 210 per cent the cardiff
bay partnership in which the group has a 45 per
cent interest produced a result similar to the
previous year
interest
net interest payable of £377 million was £20
million below the previous year 2001 £397 million
with lower interest rates more than compensating
for an increase in average net borrowings of £239
million the latter resulted from increased borrowings
towards the end of 2001 as the share repurchase
programme was completed these were not
significantly reduced until the sale of amports
usa’s aviation division towards the end of 2002
the group’s underlying average rate of interest
reduced to 74 per cent 2001 83 per cent and
underlying interest cover improved to 47 times
2001 43 times
taxation
the underlying tax charge for the year of
£387 million 2001 £365 million represents an
underlying effective tax rate of 280 per cent in
line with the effective tax rate for the previous year
as restated for the effects of financial reporting
standard 19 – deferred tax see note 34 this
rate compares favourably with the weighted
standard rate of tax of 303 per cent for the uk
and the usa the two main countries in which the
group operates mainly because the group
benefits from the utilisation of broughtforward
capital losses against its uk property sales
goodwill amortisation and exceptional items
at £16 million goodwill amortisation was
similar to the previous year’s charge of £15 million
this is expected to reduce in 2003 as a result of
the sale of amports usa’s aviation division
exceptional items included a profit of £78 million
on the sale of amports usa’ s aviation division a
loss of £04 million on the closure of southern
emergency vehicles a small vehiclemodification
business in the usa and a profit of £07 million
2001 £06 million from the sale of fixed assets
in addition the group’s review of its cost base
towards the end of 2002 resulted in a restructuring
charge of £55 million it is estimated that this
review will result in cost savings of at least £30
million per year once the cost savings programme
is fully implemented
earnings per share
underlying earnings per share before goodwill
amortisation and exceptional items increased by
82 per cent to 304 pence per share 2001 281
pence per share
basic earnings per share increased to 309
pence per share 2001 278 pence per share
the earnings per share calculations benefited
from a reduction in the weighted average number
of shares to 3270 million 2001 3342 million
following the completion of the share repurchase
programme in 2001 
dividends
in determining the level of dividend in any one
period the directors pay particular attention to the
03 group’ s underlying earnings per share and the group’ s
underlying dividend cover accordingly based on the
financial performance of the group in the first six
months and the outlook for the year the directors
declared an increased interim dividend of 65 pence
per share 2001 60 pence per share given the
progress made by the group over the year as a whole
the directors recommend a final dividend of 825
pence per share 2001 775 pence per share this
would give a total dividend for the year of 1475
pence per share an increase of 73 per cent on 2001
underlying dividend cover of 20 times is
close to the previous year’s level of 21 times
share price
at the end of the year the share price closed at
3995 pence while this was 49 per cent below
the price at the beginning of the year it
represented a 20 per cent outperformance
compared with the ftse top 250 companies
comparator group and a 12 per cent
outperformance compared with the ftse transport
sector in terms of total shareholder return the
share price ranged from a high of 4880 pence in
march 2002 to a low of 3755 pence in july 2002
2002 total shareholder return 
cash flow
cash flow remains strong with underlying
operating cash conversion from total underlying
operating profit being 1146 per cent cash flow
from operations including dividends from
associated undertakings totalled £2015 million
for the year 194 per cent above the previous year’ s
level of £1688 million this benefited from a positive
£152 million working capital contribution which more
than reversed the previous year’s negative
movement which was partly related to the timing
of receipt of cash from property sales made close
to the 2001 year end free cash flow at £667
million represented a 450 per cent improvement
on 2001
analysis of 2002 free cash flow
gross capital expenditure totalled £767 million
2001 £624 million which included a further £95
million of capital expenditure on dibden terminal
at the port of southampton £44 million on a rail
siding at humber international terminal at the port
of immingham and £24 million on the mayflower
cruise terminal southampton there are two
elements to capital expenditure first maintenance
or infrastructure expenditure and second revenue
earning capital projects during 2002 maintenance
expenditure was just below the level of depreciation
and it is the group’s aim that this will also be the
case in 2003 in contrast the only restriction the
group places on revenueearning capital projects
is that it targets at least a 150 per cent internal
rate of return on these projects and the group does
not enter into major speculative investments
in total growth capital expenditure increased
by 113 per cent to £520 million 2001 £467
million however as previously stated many of
these new projects will become operational in the
future and therefore have had only a modest impact
on the results for 2002
looking forward the group has substantial capital
expenditure plans on the humber and at dibden
terminal southampton which may lead to investments
in excess of £700 million over the medium term
borrowings and gearing
the group received a net £291 million in respect
of acquisitions and disposals during the year  primarily
as a result of the £320 million sale of amports
usa’ s aviation division as a result of this and strong
underlying operating cash flow net borrowings
decreased by £588 million to £4501 million 2001
£5089 million consequently gearing reduced 
to 446 per cent 2001 531 per cent 
28 associated british ports holdings plc annual report  accounts 2002
operating and financial review continued
“looking forward the group has substantial capital
expenditure plans on the humber and at dibden terminal
southampton which may lead to investments in excess of
£700 million over the medium term”
a gross capital expenditure £767m
b net interest £371m
c taxation £257m
c
a
b
a net cash inflow from operating activities
 including dividends received from associated
 undertakings £2015m
b other £47m
a
b
outflow  £1395m
inflow  £2062m
70
80
90
100
110
120
2002
associated british ports holdings plc
ftse top 250
ftse transport  29
01 abp handles more dry bulks than any other
uk port company
02 the port of southampton was honoured to
receive awards for ‘northern europe’s most
efficient terminal operator’ and ‘northern
europe’s best turnaround port’ for its cruise
ship handling at 2002 seatrade cruise shipping
convention in miami florida
01 02
shareholders’ funds and return on capital
employed
shareholders’ funds rose by £509 million to
£10093 million and represent 308 pence per share
2001 294 pence per share
the group’s 108 per cent underlying return
on capital employed was similar to the previous
year both of which compare favourably with the
1999 level of 95 per cent when the group’s current
strategy was put in place
financial controls and policies
treasury matters throughout the group are
controlled centrally and carried out in compliance
with policies approved by the board the group’s
main financial risks are liquidity interest rate
foreign exchange and credit risk the group aims
to manage these risks to an acceptable level
liquidity risk
borrowing facilities are maintained at a level
which is forecast to provide a reasonable surplus
beyond the future needs of the group at 31
december 2002 the group had £2323 million of
undrawn committed bank facilities 2001 £1704
million the 446 per cent gearing ratio at 31
december 2002 is below the lower end of the
group’s target range for gearing of 50 to 70 per
cent leaving the group well placed to fund its
planned capital expenditure programme for its
core uk ports business
interest rate risk
the group maintains a balance between
fixed and floatingrate debt to manage interest
rate risk at the end of the year 68 per cent of the
group’s borrowings were fixed 2001 62 per
cent the group uses derivative financial
instruments such as interest rate swaps when
appropriate to hedge against changes in interest
rates and to adjust the balance between fixed
and floatingrate debt
foreign exchange risk
the group conducts a proportion of its
business in foreign currency mainly us dollars
movements in the rate of exchange can therefore
affect the translation of the results and the
underlying balance sheet and assets of foreign
subsidiary undertakings while it is not group
policy to hedge exposure from profit translation
the group does partially hedge balance sheet
translation risk however the group does not
speculate in foreign currency the average
exchange rate used to translate us dollar profits
was us15036 2001 us14413 the year
end exchange rate used to translate us dollar
assets and liabilities was us16099 2001
us14554
credit risk
in common with other companies the group
is exposed to creditrelated losses in the event 
of nonperformance by counterparties to financial
instruments the group mitigates this credit risk
by selecting only those counterparties with an
investmentgrade credit rating
adoption of new accounting standards
the group adopted financial reporting
standard frs 17 – retirement benefits under 
its transitional arrangements in 2001 and has
continued to report on this basis during 2002
the disclosures required under the transitional
arrangements are given in note 5b to the financial
statements on pages 39 to 41 
during 2002 the group adopted frs 19 –
deferred tax as a result the group’s reported
underlying effective tax rate increased from 248
per cent to 280 per cent underlying earnings per
share reduced by 14 pence from 318 pence to
304 pence and net assets by £590 million to
£10093 million without any impact on cash
flows comparative figures for 2001 have been
restated throughout to reflect the effects of frs
19 see note 34
pensions
an actuarial valuation of the group’s main
defined benefit pension scheme was carried out
as at 31 december 2000 this confirmed that the
pension scheme remained in surplus at that date
the group is therefore maintaining its contribution
holiday with effect from 1 april 2002 the scheme
was closed to new entrants and replaced with a
new defined contribution arrangement at the end
of 2002 under frs 17 the scheme’s assets of
£3858 million exceeded the scheme’s liabilities
by £338 million
richard adam fca
group finance director
19 february 2003 30 associated british ports holdings plc annual report  accounts 2002 30
group profit and loss account 
for the year ended 31 december
goodwill exceptional
underlying amortisation items t otal t otal
2002 2002 2002 2002 2001
note £m £m £m £m £m
turnover including share of associates
existing operations 4454 – – 4454 4160 
acquisitions 06 – – 06 –
continuing operations 4460 – – 4460 4160 
discontinued operations 279 – – 279 296 
4739 – – 4739 4456 
less share of turnover in associates 441 – – 441 402
group turnover 2 4298 – – 4298 4054 
cost of sales 2118 – – 2118 1969
gross profit 2180 – – 2180 2085 
administrative expenses 3 527 16 55 598 484
existing operations 1619 16 55 1548 1571 
acquisitions 02 – – 02 –
continuing operations 1617 16 55 1546 1571 
discontinued operations 36 – – 36 30 
group operating profit 1653 16 55 1582 1601 
share of operating profit in associates 105 – – 105 85 
total operating profit 1758 16 55 1687 1686 
profit on disposal of discontinued operations 326 –– 74 74 –
profit on sale of fixed assets 3 –– 07 07 06 
profit on ordinary activities before interest 24 1758 16 26 1768 1692 
net interest payable 6 377 – – 377 397
profit on ordinary activities before taxation 1381 16 26 1391 1295 
t axation on profit on ordinary activities 8 387 – 07 380 365
profit on ordinary activities after taxation
attributable to shareholders 994 16 33 1011 930 
dividends 10 485 – – 485 454
retained profit for the group
and its share of associates 28 509 16 33 526 476 
earnings per share – basic 11 304p 05p 10p 309p 278p 
earnings per share – diluted 11 306p 275p 
earnings per share – underlying  11 304p 281p 
 underlying represents results before goodwill amortisation and exceptional items
 restated for the effects of financial reporting standard 19 – deferred t ax note 34 31 31
group company
2002 2001 2002 2001
note £m £m £m £m
fixed assets
intangible assets 12 154 239 – – 
t angible operating assets 13 8340 7980 – – 
t angible property assets 14 5688 5885 – – 
investments 15 502 480 9396 9221 
14684 14584 9396 9221 
current assets
property developments and land held for sale 16 383 442 – – 
debtors – due within one year 17 934 973 5496 5641 
debtors – due after one year 17 829 768 – – 
cash and shortterm deposits 18 64 60 – – 
2210 2243 5496 5641 
creditors – amounts falling due within one year 19 1299 1310 389 365
net current assets 911 933 5107 5276 
total assets less current liabilities 15595 15517 14503 14497 
creditors – amounts falling due after more than one year 20 4495 5054 4410 4913
provisions for liabilities and charges 23 920 790 – – 
deferred income 24 87 89 – – 
net assets 10093 9584 10093 9584 
capital and reserves
calledup share capital 27 820 816 820 816 
share premium account 28 774 709 774 709 
revaluation reserve 28 6279 6417 6143 5956 
other reserves 28 370 370 518 518 
profit and loss account 28 1850 1272 1838 1585 
equity shareholders’ funds 10093 9584 10093 9584 
 restated for the effects of financial reporting standard 19 – deferred t ax note 34
the financial statements on pages 30 to 60 were approved by the board of directors on 19 february 2003
richard adam fca
group finance director
balance sheets
as at 31 december 32 associated british ports holdings plc annual report  accounts 2002
group cash flow statement
for the year ended 31 december
2002 2001
note £m £m
net cash inflow from operating activities 29 1991 1652 
dividends received from associated undertakings 24 36 
returns on investments and servicing of finance
interest received 08 04 
interest paid 369 391
interest element of finance lease rental payments 10 12
net cash outflow from returns on investments and servicing of finance 371 399
taxation 257 282
capital expenditure and financial investment
t angible operating assets 700 533
t angible property assets 67 91
sale of fixed assets 34 21 
movement on investment in own shares 15 13 56 
net cash outflow from capital expenditure and financial investment 720 547
free cash flow 667 460 
acquisitions and disposals
purchase of business and subsidiary undertakings 25 03 46
sale of subsidiary undertakings 26 294 09
net cash inflowoutflow from acquisitions and disposals 291 55
equity dividends paid 466 445
cash inflowoutflow before use of liquid resources and financing 492 40
management of liquid resources 29 20 09 
financing
issue of shares 48 56 
repurchase of shares – 683
decreaseincrease in borrowings 488 670 
capital element of finance lease rental payments 33 29
net cash outflowinflow from financing 473 14 
decrease in cash in the year 29 01 17
reconciliation of net cash flow to movement in net borrowings
for the year ended 31 december
2002 2001
note £m £m
decrease in cash in the year 29 01 17
cash outflowinflow from decreaseincrease in borrowings and lease finance 521 641
cash outflowinflow from movement in liquid resources 29 20 09
currency translation differences 29 48 15
change in net borrowings resulting from cash flows 588 682
net borrowings at 1 january 5089 4407
net borrowings at 31 december 2129 4501 5089 2002 2001
note £m £m
profit on ordinary activities before taxation 1391 1295 
realisation of property revaluation surpluses of previous years 28 83 07 
historical cost profit on ordinary activities before taxation 1474 1302 
t axation on profit on ordinary activities 380 365
dividends 485 454
historical cost profit for the year retained for the group and its share of associates 609 483 
note of group historical cost profits and losses
for the year ended 31 december
group company
2002 2001 2002 2001
note £m £m £m £m
profit on ordinary activities after taxation attributable to shareholders 1011 930 754 982 
dividends 485 454 485 454
526 476 269 528 
new share capital subscribed 47 64 53 68 
repurchase of shares 27 – 683 – 683
deficitsurplus arising on revaluation of tangible property assets 14 55 03 – – 
realised surplusdeficit on revaluation of subsidiary undertakings 28 – – 187 51
currency translation differences on foreign currency net investments 28 09 02 – – 
net increasedecrease in equity shareholders’ funds 509 138 509 138
equity shareholders’ funds at 1 january 9584 9722 9584 9722 
equity shareholders’ funds at 31 december 10093 9584 10093 9584 
restated for the effects of financial reporting standard 19 – deferred t ax note 34
reconciliation of movements in equity shareholders’ funds 
for the year ended 31 december
33
2002 2001
note £m £m
profit on ordinary activities after taxation attributable to shareholders 1011 930 
deficitsurplus arising on revaluation of tangible property assets 14 55 03 
currency translation differences on foreign currency net investments 28 09 02 
total recognised gains for the year 947 935 
prior year adjustment 34 545 – 
total recognised gains since last annual report 402 935 
statement of group total recognised gains and losses
for the year ended 31 december 34 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
1 accounting policies
basis of preparation
the financial statements have been prepared on a going concern basis in accordance with applicable accounting standards and under the historical cost convention as
modified by the revaluation of operational land investment properties land at ports held for development and investments in subsidiary and associated undertakings 
basis of consolidated financial statements
the consolidated financial statements include the accounts of the company its subsidiary undertakings and its share of the results of associated undertakings the results
of subsidiary undertakings acquired are included from the date of acquisition the results of discontinued operations are included up to the date of disposal 
new financial reporting standards 
financial reporting standard frs 19 – deferred tax became effective for accounting periods ending on or after 23 january 2002 and has been adopted in the preparation
of these financial statements the effects of adopting frs 19 are set out in note 34 and comparative results have been restated throughout these financial statements to
reflect the adoption of frs 19 
the group continues to account for pensions in accordance with statement of standard accounting practice ssap 24 – accounting for pension costs the group is
continuing to apply the transitional disclosure requirements see note 5 of frs 17 – retirement benefits 
turnover and profit recognition
turnover comprises the amounts receivable in respect of ports and transport services provided to third parties income from investment properties and sales of property
developments excluding related sales taxes turnover and profit in relation to the provision of ports and transport services and income from investment property is
recognised when the provision of the service is complete turnover and profits or losses arising on the sale of sites or completed developments are recognised when
contracts for sale have been exchanged and when all material conditions have been satisfied
financial instruments 
derivative financial instruments utilised by the group comprise interest rate swaps and forward foreign exchange contracts all such instruments are used for hedging
purposes to manage the risk profile of an existing underlying exposure of the group in line with the group’s risk management policies which are set out in the operating 
and financial review on page 29 amounts payable or receivable in respect of interest rate swaps are recognised as adjustments to interest expense over the period of the
contract exchange gains and losses on forward foreign exchange contracts are recognised on maturity of the underlying transaction profits or losses arising on the early
termination of interest rate swap transactions and forward foreign exchange contracts are recognised when the agreement is terminated or transferred to a third party 
goodwill
purchased goodwill arising on consolidation representing the excess of the purchase price over the fair value of net assets acquired is capitalised in the year in which it arises
and is amortised on a straightline basis over its estimated useful economic life the estimated useful economic life is calculated having due regard to the period over which
the group expects to derive economic benefit from the assets for acquisitions made since 1 january 1998 the estimated useful economic life does not exceed 20 years
prior to 1 january 1998 as a result of accounting policies in force at that time purchased goodwill arising on consolidation was writtenoff against reserves in the year of acquisition
t angible operating assets
operational land pre1 january 1999 is held at the 31 december 1998 valuation with subsequent additions being valued at cost and transfers from tangible property assets
being made at the carrying value of the last balance sheet date all other tangible operating assets are carried at cost adjusted for subsequent additions and disposals 
finance costs directly attributable to the construction of certain major additions to fixed assets are capitalised as part of the cost of those assets 
depreciation is provided on a straightline basis with reference to the expected useful lives of the various types of asset these lives range up to a maximum of 50 years for
capital dredging costs dock structures roads quays and buildings up to 30 years for floating craft and between two and 30 years for plant and equipment freehold land
is not depreciated significant capital investment grants are credited to the profit and loss account over the useful lives of the assets concerned the balance of such grants
not yet transferred to the profit and loss account is included as deferred income any transfers of tangible operating assets to investment properties are reflected net of any
unamortised capital investment grants 
t angible property assets 
investment properties and land held for development are stated at open market value in accordance with ssap 19 – accounting for investment properties revaluations are
conducted annually with any surpluses or deficits being transferred to the revaluation reserve no provision is made for depreciation of freehold properties or for amortisation
of leasehold properties held on leases having more than 20 years unexpired this departure from the requirements of the companies act 1985 which requires all properties
to be depreciated is in the opinion of the directors necessary for the financial statements to show a true and fair view in accordance with applicable accounting standards 35
1 accounting policies  continued
t angible property assets  continued
the depreciation or amortisation which would had the provisions of the act been followed have reduced profit for the year is only one of the factors reflected in the annual
valuation and the amount attributable to this factor cannot reasonably be separately identified or quantified 
transfers of property from fixed assets to current assets – property developments and land held for sale – are made at the higher of market value on the date of transfer or
the carrying value at the last balance sheet this departure from the requirements of the companies act 1985 which requires transfer at the lower of cost and net realisable
value is in the opinion of the directors necessary for the financial statements to show a true and fair view in accordance with applicable accounting standards had the
provisions of the act been followed the net assets of the group would be artificially reduced on transfer whereas in reality such a reduction has not occurred and the profit
on disposal calculated by reference to a lower carrying value would give rise to an artificially high profit transfers of property from property developments to fixed assets are
made at the lower of cost and estimated net realisable value as at the date of transfer 
leased assets 
at the inception of finance leases the capital cost of the asset is included in the financial statements both as a tangible operating asset and as an obligation to pay future
rentals amounts payable in respect of operating leases are charged to the profit and loss account on a straightline basis over the term of the lease
property developments and land held for sale 
property developments and land held for sale are stated at the lower of cost or transfer value if transferred from tangible operating assets or tangible property assets and
net realisable value
retirement benefits
the group operates a number of defined benefit pension schemes the majority of the scheme members are in funded schemes with the assets being held in separate
trusteeadministered funds 
in accordance with ssap 24 – accounting for pension costs the expected cost of pensions in respect of the group’s defined benefit pension schemes is charged to the profit
and loss account so as to spread the cost of pensions over the service lives of employees in the schemes past service surpluses and other variations from the regular cost are
spread over the expected remaining service lives of current employees in the schemes the pension cost is assessed in accordance with the advice of independent actuaries 
provision is maintained for unfunded retirement benefit arrangements less attributable taxation on a full provision basis interest at the rate recommended by the actuaries is
credited to the provision and charged to the profit and loss account payments are charged to the provision 
the group also contributes to a number of defined contribution pension schemes these costs are charged to the profit and loss account in the year in which contributions
become payable
the group has included the transitional disclosures required under frs 17 – retirement benefits in note 5b
taxation
current tax including uk corporation tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantially
enacted by the balance sheet date
other than for timing differences arising due to capital losses and property revaluation gains deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date timing differences are differences between the group’s taxable profit and its results as stated in the financial
statements that arise from the inclusion of gains and losses in tax computations in periods different from those in which they are recognised in the financial statements the
group does not provide for timing differences arising from capital losses as the future utilisation of these losses cannot be assessed with reasonable certainty no deferred
tax is provided in relation to property revaluation gains as the group expects any crystallised gains to be offset by broughtforward losses
deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse based on tax rates and
laws that have been enacted or substantially enacted by the balance sheet date the group’s deferred tax provision is measured on an undiscounted basis
foreign currencies
transactions of uk companies denominated in foreign currencies are translated into sterling at the rates ruling at the dates of the transactions monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange ruling at that date where matching forward foreign exchange
contracts have been entered into the rate specified in the relevant contract is used these translation differences are recognised in the profit and loss account 
the profit and loss accounts of foreign subsidiary undertakings are translated into sterling at average rates for the year the balance sheets are translated into sterling at the
rates of exchange ruling at the balance sheet date all exchange differences arising on consolidation are taken directly to reserves all other translation differences are taken
to the profit and loss account with the exception of differences on foreign currency borrowings to the extent that they are used to finance or provide a hedge against group
equity investments in foreign enterprises which are taken directly to reserves together with the exchange difference on the net investment in these enterprises  36 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
2 segmental analysis
analysis of group turnover profit on ordinary activities before interest and net assets by class of business and geographical segment are given below turnover is disclosed
by origin there is no material difference between turnover by origin and turnover by destination
uk usa t otal uk usa t otal
2002 2002 2002 2001 2001 2001
£m £m £m £m £m £m
group turnover
ports and transport
existing operations 3251 361 3612 3042 299 3341 
acquisitions 06 – 06 – – – 
continuing operations 3257 361 3618 3042 299 3341 
discontinued operations – 279 279 – 296 296 
3257 640 3897 3042 595 3637 
property investment 73 20 93 88 20 108 
property development 308 – 308 309 – 309 
group turnover 3638 660 4298 3439 615 4054 
profit on ordinary activities before interest
ports and transport
existing operations 1416 15 1431 1372 04 1376 
acquisitions 02 – 02 – – – 
continuing operations 1414 15 1429 1372 04 1376 
discontinued operations – 36 36 – 30 30 
1414 51 1465 1372 34 1406 
property investment 50 18 68 62 18 80 
property development 120 – 120 130 – 130 
share of operating profit in associates 105 – 105 85 – 85 
total underlying operating profit 1689 69 1758 1649 52 1701 
goodwill amortisation note 12 16 15
exceptional items – administrative expenses note 3 55 – 
total operating profit 1687 1686 
profit on disposal of discontinued operations notes 3 and 26 74 – 
profit on sale of fixed assets note 3 07 06 
profit on ordinary activities before interest 1768 1692 37
2 segmental analysis continued
uk usa t otal uk usa t otal
2002 2002 2002 2001 2001 2001
£m £m £m £m £m £m
net assets
net operating assets
ports and transport 13552 425 13977 13080 465 13545
property investment 732 94 826 830 103 933 
property development 392 – 392 472 – 472 
share of associated undertakings 493 – 493 458 – 458 
continuing operations 15169 519 15688 14840 568 15408 
discontinued operations – – – – 144 144
15169 519 15688 14840 712 15552 
less group items
goodwill note 12 154 239 
net borrowings note 21 4501 5089
net liabilities 1248 1118
net assets 10093 9584 
the group’ s share of associated undertakings is stated after deducting the group’ s share of net borrowings of £221 million 2001 £192 million
 restated for the effects of financial reporting standard 19 – deferred t ax note 34
3 exceptional items
towards the end of 2002 the group undertook a review of its cost base which resulted in a £55 million restructuring charge this has been recorded as an exceptional item
within administrative expenses
profit on disposal of discontinued operations includes a £78 million profit on the sale of amports usa’s aviation division the group entered into a conditional sale
agreement on 29 july 2002 with subsidiaries of macquarie global infrastructure funds the sale being conditional upon obtaining consents from the relevant airport and
regulatory authorities all of these consents together with the cash proceeds of £320 million us500 million were received by 13 december 2002
in addition an exceptional charge of £04 million arose on the closure of southern emergency vehicles a small vehiclemodification business located in the usa
profit arising on the sale of fixed assets totalled £07 million 2001 £06 million which includes £05 million 2001 nil relating to an insurance claim resulting from a
damaged pier in the usa
the exceptional tax credit arising from the above items totalled £07 million 2001 nil comprising a £17 million credit for the restructuring charge in respect of the group’s
review of its cost base and a £10 million charge relating to the sale of amports usa’s aviation division 38 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
4 profit before interest and taxation
2002 2001
profit before interest and taxation is after chargingcrediting £m £m
depreciation note 13
owned tangible fixed assets 235 219 
leased tangible fixed assets 16 18 
grant amortisation note 24 06 07
operating lease rentals
plant and machinery 37 35 
property 56 53 
auditors’ remuneration – statutory audit including expenses 03 03 
fees paid to pricewaterhousecoopers for nonaudit services in the uk totalled £03 million 2001 £04 million comprising £02 million 2001 £01 million for taxation
services and £01 million 2001 £01million for internal audit services there were no fees paid for corporate transactions 2001 £02 million
the statutory audit fee above includes £45000 2001 £45000 in respect of the company
there were no fines payable in respect of breaches of section 3 of the health and safety at work etc act 1974 2001 £04 million
5 retirement benefits
the group continues to account for pensions in accordance with statement of standard accounting practice ssap 24 – accounting for pension costs and the
disclosures given in a are those required by that standard the group is continuing to apply the transitional disclosure requirements of financial reporting standard frs
17 – retirement benefits see b below
a ssap 24  –  accounting for pension costs
the group participates in a number of pension schemes principally in the uk the major scheme is a funded defined benefits scheme – the associated british ports group
pension scheme abpgps the defined benefits section of this scheme was closed to new members with effect from 1 april 2002 new members joining abpgps from
1 april 2002 are offered membership of a defined contributions section which at 31 december 2002 constituted less than 01 of the total asset value the assets of the
group’s pension schemes are held in trust funds independent of its finances
for abpgps the pension costs under ssap 24 have been assessed in accordance with the advice of a firm of actuaries mercer human resource consulting
the most recent valuation of abpgps the group’s largest funded defined benefit scheme was undertaken as at 31 december 2000 the market value of the assets of the
scheme at the valuation date was £4844 million the value of the assets represented 137 per cent of the benefits which had accrued to members after allowing for future
expected increases in earnings and certain benefit improvements the regular cost has been assessed on the basis of the projected unit method the assets of the scheme
have been taken into account at their market value consistent with this the liabilities were valued using financial assumptions derived from yields on indexlinked and fixed
interest government securities in particular it was assumed that pensions would increase by 25 per cent per annum the implied rate of inflation salaries would increase
by 40 per cent per annum and investments would yield 50 per cent per annum 45 per cent per annum postretirement on accrued liabilities
in deriving the pension costs under ssap 24 the surplus in the scheme is being spread over the future working lives of existing members 39
5 retirement benefits continued
2002 2001
analysis of pension credit £m £m
group scheme
amortisation of past service surpluses including interest on the balance sheet prepayment 139 137 
regular annual cost of providing current and future service benefits 72 57
t otal added to prepayment of pension contributions 67 80 
cost of pension benefits in other group schemes 12 14
pension credit 55 66 
no employer’ s contributions were made to abpgps during the year and based on the most recent valuation of abpgps the group is maintaining its contribution holiday
b frs 17 –  t ransitional disclosures
the pension costs reported in 5a above have been calculated in accordance with ssap 24 under the transitional arrangements of frs 17 – retirement benefits the
group is disclosing the following information that would have been reported had the group calculated its pension costs for the year ended 31 december 2002 and valued 
its scheme assets and liabilities as at 31 december 2002 in accordance with frs 17
i the latest formal revaluation of the scheme was carried out as at 31 december 2000 the valuation of the liabilities detailed below has been derived by projecting
forward the position as at 31 december 2000 and has been performed by an independent actuary mercer human resource consulting frs 17 gives the present
value of pension liabilities by discounting pension commitments including an allowance for salary growth using a aa corporate bond yield
ii the major financial assumptions used by the actuaries under frs 17 were as follows
as at as at
31 december 31 december
2002 2001
financial assumptions 
inflation 235 250 
rate of increase in pensionable salaries 385 400 
rate of increase for pensions in payment 235 250 
rate of increase for deferred pensions 235 250 
discount rate 550 575 
iii the assets and liabilities of the pension scheme along with the expected rates of return on the scheme’s assets under frs 17 at 31 december 2002 and 31
december 2001 were as follows
as at as at
31 december 2002 31 december 2001
£m  £m
equities 70 1745 70 2331 
bonds 51 1937 54 1823 
cash and other investments 45 176 50 83 
t otal market value of pension scheme assets 3858 4237
present value of pension scheme liabilities 3520 3200
surplus in the pension scheme 338 1037
deferred tax liability 101 311
net pension scheme asset under frs 17 237 726 40 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
5 retirement benefits continued
iv if the amounts set out in 5b iii had been recognised in the financial statements the group’s net assets and profit and loss account reserve under frs 17 at 31
december 2002 and 31 december 2001 would be as follows
as at as at
31 december 31 december
2002 2001
net assets £m £m
net assets note 2 10093 9584 
amount representing ssap 24 pension prepayment note 17 829 765
deferred tax liability on ssap 24 pension prepayment note 23 249 229 
pension scheme asset net of deferred tax liability under frs 17 note 5b iii 237 726 
net assets – as adjusted under frs 17 9750 9774 
as at as at
31 december 31 december
2002 2001
profit and loss account reserve £m £m
profit and loss account reserve note 28 1850 1272 
amount representing ssap 24 pension prepayment note 17 829 765
deferred tax liability on ssap 24 pension prepayment note 23 249 229 
pension scheme asset net of deferred tax liability under frs 17 note 5b iii 237 726 
profit and loss account reserve – as adjusted under frs 17 1507 1462 
 restated for the effects of financial reporting standard 19 – deferred tax note 34
v the following amounts would have been recognised in the group’s profit and loss account and the statement of group total recognised gains and losses in respect of
pension costs under frs 17 for the year ended 31 december 2002
2002
£m
operating profit
current service cost 71
past service cost –
t otal charge to operating profit 71
finance income
expected returns on pension scheme assets 266
interest on pension scheme liabilities 186
net credit to finance income 80
pension scheme credit under frs 17 09 41
5 retirement benefits continued
2002
statement of group total recognised gains and losses £m
actual return less expected return on pension scheme assets 712
actual return less expected return on pension scheme liabilities 54
changes in assumptions underlying the present value of the pension scheme liabilities 50
actuarial loss recognised in statement of group total recognised gains and losses under frs 17 708
vi the movement in the pension scheme surplus and details of experience gains and losses under frs 17 during the year ended 31 december 2002 were as follows
2002
movement in the pension scheme surplus during the year £m
surplus in the pension scheme at 1 january 2002 under frs 17 1037 
movement in year
current service cost 71 
employer contributions –
past service costs – 
other financial income 80
actuarial loss recognised in statement of group total recognised gains and losses 708
surplus in the pension scheme at 31 december 2002 under frs 17 338
2002 2002
details of experience gains and losses in the year ended 31 december 2002 £m 
actual return less expected return on pension scheme assets 712 18
actual return less expected return on pension scheme liabilities 54 2
actuarial loss recognised in statement of group total recognised gains and losses 708 20 42 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
6 net interest payable fixed variable
rate rate t otal t otal
2002 2002 2002 2001
£m £m £m £m
interest payable and similar charges
eurobonds 280 – 280 280 
bank loans 04 74 78 91 
bank overdraft and other borrowings – 02 02 03 
finance leases 10 – 10 12 
amounts payable in respect of loans from associated undertakings – – – 02 
liabilities for retirement benefits note 23 – 03 03 03 
other 04 03 07 12 
less finance costs capitalised on payments for fixed assets – 11 11 12
298 71 369 391 
interest receivable and similar income – 07 07 04
total group 298 64 362 387 
share of interest in associates 12 03 15 10 
310 67 377 397
the bank of england base rate is used as the basis for calculating finance costs capitalised as being directly attributable to the construction of certain major additions to
fixed assets none of the finance costs capitalised have been or will be deductible against corporation tax 2001 £02 million
7 directors and employees
full details of directors’ emoluments including shareholdings and options are shown in the remuneration report on pages 68 and 69
2002 2001
£m £m
staff costs
wages and salaries 901 793 
social security costs 72 67 
other pension costs – net credit note 5a 55 66
918 794 
2002 2001
number number
monthly average number of persons employed
ports and transport 3492 3206 
property 44 48 
3536 3254  43
8 taxation on profit on ordinary activities 2002 2001
£m £m
uk corporation tax at 300 based on the profit for the year 270 286 
double taxation relief – 04
t otal uk taxation charge 270 282 
overseas taxation – current year 24 13
deferred taxation note 23 63 83 
total group 357 352 
share of taxation of associates 23 13 
380 365 
the exceptional tax credit included within the above totalled £07 million 2001 nil comprising £17 million credit for restructuring charge in respect of the group’s review 
of its cost base and £10 million charge for the sale of amports usa’s aviation division
the tax charge for the year is lower 2001 lower than the standard rate of taxation in the uk of 300 the differences are explained below
2002 2001
£m £m
profit on ordinary activities before taxation 1391 1295 
profit on ordinary activities multiplied by standard rate of corporation tax in the uk of 300 417 389 
effects of
exceptional tax credit 07 –
expenses not deductible for tax purposes 15 16
utilisation of capital losses 45 40
actual tax charge for the group 380 365 
 restated for the effects of financial reporting standard 19 – deferred tax note 34
9profit attributable to shareholders
the company has not presented its own profit and loss account as permitted by section 230 of the companies act 1985 the parent company’s result for the financial year 
amounted to a profit of £754 million 2001 £982 million 44 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
10 dividends 2002 2001
£m £m
interim dividend paid of 65p 2001 60p per ordinary 25p share 214 202 
proposed final dividend of 825p 2001 775p per ordinary 25p share 271 252 
485 454 
if approved the final dividend would be payable on 1 may 2003 to shareholders on the register at the close of business on 4 april 2003
11 earnings per share
the calculation of the earnings per share is based on 3270 million 2001 3342 million ordinary shares being the weighted average number of shares in issue and
ranking for dividend during the year
the directors consider that underlying earnings per share is a more appropriate basis for comparing performance between periods than basic earnings per share figures
calculated on this basis have been provided to show the effect of excluding goodwill amortisation exceptional administrative expenses profit on disposal of discontinued
operations and profit on sale of fixed assets
profit earnings per share
2002 2001 2002 2001
reconciliation of the profit used for calculating the basic and underlying earnings per share £m £m p p
profit on ordinary activities after taxation attributable to shareholders – basic earnings per share 1011 930 309 278 
goodwill amortisation note 12 16 15 05 05 
exceptional items – administrative expenses note 3 55 – 17 – 
profit on disposal of discontinued operations notes 3 and 26 74 – 23 – 
profit on sale of fixed assets note 3 07 06 02 02
attributable tax 07 – 02 – 
profit on ordinary activities after taxation attributable to shareholders – underlying earnings per share 994 939 304 281 
number of shares earnings per share
2002 2001 2002 2001
reconciliation of weighted average number of shares used for calculating basic and diluted earnings per share mm p p
weighted average number of shares – basic earnings per share 3270 3342 309 278
dilution arising from share option schemes 30 37 03 03
weighted average number of shares – diluted earnings per share 3300 3379 306 275
 restated for the effects of financial reporting standard 19 – deferred tax note 34 45
12 intangible assets goodwill
£m
cost
at 1 january 2002 271 
disposal of business note 26 78
exchange adjustments 06
at 31 december 2002 187 
amortisation
at 1 january 2002 32 
charge for year 16 
disposal of business note 26 14
exchange adjustments 01 
at 31 december 2002 33 
net book value
at 31 december 2001 239 
at 31 december 2002 154 
13 tangible operating assets dock
structures capital
operational roads quays floating plant and works in
land buildings and dredging craft equipment progress t otal
£m £m £m £m £m £m £m
cost or valuation
at 1 january 2002 3589 886 3373 451 1532 456 10287 
additions 01 26 107 01 66 479 680 
acquisition of a business note 25 – – – – 03 – 03 
t ransfers within tangible operating assets 06 71 121 02 50 238 – 
t ransfers to land held for sale 03 – – – – – 03 
t ransfers fromto tangible property assets note 14 52 62 03 – 01 – 112 
disposals 03 11 02 01 41 01 59
disposal of business note 26 – 95 15 – 13 01 124
exchange adjustments 18 22 19 – 03 02 64
at 31 december 2002 3612 917 3562 453 1595 693 10832  46 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
13 tangible operating assets continued dock
structures capital
operational roads quays floating plant and works in
land buildings and dredging craft equipment progress t otal
£m £m £m £m £m £m £m
depreciation
at 1 january 2002 – 219 1088 179 821 – 2307 
t ransfers within tangible operating assets – 01 – – 01 – – 
t ransfers fromto tangible property assets note 14 – 02 02 – 01 – 05
charge for year – 33 96 24 98 – 251 
disposals – 03 02 01 33 – 39 
disposal of business note 26 – 09 01 – 08 – 18 
exchange adjustments – 06 07 – 01 – 14 
at 31 december 2002 – 235 1176 202 879 – 2492 
net book value
at 31 december 2001 3589 667 2285 272 711 456 7980 
at 31 december 2002 3612 682 2386 251 716 693 8340 
all tangible operating assets are stated at cost with the exception of operational land operational land is included at valuation as at 31 december 1998 as permitted
under frs 15 – tangible fixed assets or if transferred from property assets after 31 december 1998 at the carrying value of the last balance sheet date prior to transfer
the group’s operational land and buildings held at 31 december 1998 were valued as at that date on the basis of existinguse value in accordance with the appraisal and
valuation manual issued by the royal institution of chartered surveyors the valuations were carried out by independent valuers healey  baker international real estate
consultants the total valuation amounted to £5075 million of which £3267 million was apportioned to land representing an excess of £2912 million over its historical
book cost at that date
operational land buildings and dock structures are held freehold with the exception of short leasehold properties with an historic net book value of £19 million 2001
£28 million
floating craft includes assets held under finance leases with a book cost and accumulated depreciation at 31 december 2002 totalling £299 million 2001 £297 million
and £125 million 2001 £109 million respectively the depreciation charge for the year includes £16 million 2001 £17 million in respect of these assets
plant and equipment includes assets held under finance leases with a book cost and accumulated depreciation at 31 december 2002 totalling £05 million 2001 £06
million and £05 million 2001 £05 million respectively there was no depreciation charge for the year in respect of these assets 2001 £01 million 
the cost of tangible operating assets includes £78 million 2001 £67 million of cumulative finance costs capitalised
costs in respect of dibden terminal total £354 million 2001 £240 million of which £302 million 2001 £188 million is included within capital works in progress and
£52 million 2001 £52 million is included within land at ports held for development note 14 the public inquiry into the group’s application to develop dibden terminal
commenced in november 2001 and was completed in december 2002 with the government’s decision expected in late 2003 or 2004 the group remains confident
about the prospects for this project however if the government’s decision results in the project not proceeding costs relating to this project will be writtenoff to the profit
and loss account in the year in which a decision not to proceed is taken  47
14 tangible property assets land 
portrelated other at ports
investment investment held for
properties properties development t otal
£m £m £m £m
at 1 january 2002 4944 592 349 5885 
additions 57 – – 57 
t ransfers within tangible property assets 15 04 11 – 
t ransfers to land held for sale 03 43 11 57
t ransfers to tangible operating assets note 13 86 – 21 107
disposals – 12 15 27
exchange adjustments – 06 02 08
4927 527 289 5743
deficitsurplus on revaluation note 28 63 08 – 55 
at 31 december 2002 4864 535 289 5688 
historic cost at 31 december 2002 1856 219 140 2215 
tangible property assets all of which are shown at valuation as at 31 december 2002 have been valued on the basis of open market value in accordance with the appraisal
and valuation manual issued by the royal institution of chartered surveyors the valuations were carried out by phillip williams frics group property director associated
british ports all the above properties are owned freehold with the exception of £09 million 2001 £06 million of portrelated investment properties which are owned leasehold
the cost of tangible property assets includes £03 million 2001 £03 million of cumulative finance costs capitalised
15 investments group company
interest in
associated own subsidiary own
undertakings shares t otal undertakings shares t otal
£m £m £m £m £m £m
at 1 january 2002
as previously reported 502 22 524 9744 22 9766 
prior year adjustment note 34 44 – 44 545 – 545  
as restated 458 22 480 9199 22 9221 
share of profit for the year 67 – 67 – – – 
dividends receivable 32 – 32 – – – 
investment in subsidiary undertakings – – – 01 – 01
surplus arising on revaluation of subsidiary undertakings note 28 – – – 187 – 187
other movements – 13 13 – 13 13
at 31 december 2002 493 09 502 9387 09 9396 
in presenting the figures for the company’s investments in subsidiary and associated undertakings the company has adopted the alternative accounting rules under the
terms of schedule 4 part ii section c to the companies act 1985 and revalued these assets at 31 december 2002 to directors’ valuations
the company has an employee share ownership trust esot to acquire from the market and hold shares to meet the exercise of options arising from grants under the
executive share option scheme as an alternative to the issue of new shares at 31 december 2002 the esot held 03 million shares 2001 08 million with a nominal
value of £01 million 2001 £02 million the market value of these shares at 31 december 2002 was £13 million 2001 £34 million the dividends on the shares held
have been waived by the trustees with the exception of 001p per share 48 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
16 property developments and land held for sale
property developments and land held for sale include £43 million 2001 £48 million of land held for future development and £340 million 2001 £394 million of land
and completed developments held for sale
property developments and land held for sale are stated at the lower of their cost or transfer value and net realisable value as determined by the directors at 31 december 2002 the
historic cost of property developments and land held for sale totalled £330 million 2001 £369 million and includes £02 million 2001 £02 million of finance costs capitalised
17 debtors group company
2002 2001 2002 2001
£m £m £m £m
due within one year
t rade debtors 541 538 – – 
amounts owed by subsidiary undertakings – – 5492 5636 
amounts owed by associated undertakings 71 70 – – 
other debtors 101 100 04 04 
corporation tax recoverable 32 75 – – 
prepayments and accrued income 148 127 – 01 
property completions due 41 63 – – 
934 973 5496 5641 
due after one year
other debtors – 03 – – 
prepayment of pension contributions 829 765 – – 
829 768 – – 
1763 1741 5496 5641 
18 cash and shortterm deposits group company
2002 2001 2002 2001
£m £m £m £m
shortterm deposits 49 29 – – 
cash at bank and in hand 15 31 – – 
64 60 – – 
liquid resources comprise shortterm deposits with banks with maturity dates between seven days and 12 months 49
19 creditors – amounts falling due within one year group company
2002 2001 2002 2001
£m £m £m £m
borrowings
bank overdraft 19 32 07 18 
loan notes – unsecured – 16 – – 
bank loans 22 20 – – 
obligations under finance leases 34 32 – – 
75 100 07 18 
other
t rade creditors 214 233 – – 
amounts owed to associated undertakings 12 02 – – 
other creditors 139 165 – – 
t axation and social security 218 209 – – 
dividends 272 253 272 253 
accruals 369 348 110 94 
1299 1310 389 365 
20 creditors – amounts falling due after more than one year group company
2002 2001 2002 2001
£m £m £m £m
borrowings
eurobonds 2008 6 
5
8 1200 1200 1200 1200 
eurobonds 2011 11 
7
8 1000 1000 1000 1000 
eurobonds 2015 10 
7
8 750 750 750 750 
bank loans – unsecured 1479 2007 1473 1979 
obligations under finance leases – secured 75 110 – –
less deferred borrowing costs to be amortised 14 18 13 16
4490 5049 4410 4913 
other
accruals 05 05 – –
4495 5054 4410 4913 
the bank loans are repayable between 2004 and 2006 of the unsecured bank loans £06 million 2001 £28 million are repayable by instalments and bear interest at
fixed rates of between 103 per cent and 1235 per cent the remaining £1473 million 2001 £1979 million bear interest linked to national interbank rates
obligations under finance leases are secured on related leased assets 50 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
21 group net borrowings 2002 2001
£m £m
creditors – amounts falling due within one year note 19 75 100 
creditors – amounts falling due after more than one year note 20 4490 5049 
4565 5149 
less cash and shortterm deposits note 18 64 60
4501 5089 
the group’s share of net borrowings of associated undertakings not included in the balance sheet total £221 million 2001 £192 million
an analysis of maturity of gross financial liabilities is given in note 22a
22 financial instruments
the group’s policies as regards derivatives and financial instruments are set out in the operating and financial review on page 29 and the accounting policies on page 34
shortterm debtors and creditors have been excluded from these disclosures
a maturity profile of gross financial liabilities finance finance
debt leases other t otal debt leases other t otal
2002 2002 2002 2002 2001 2001 2001 2001
amounts falling due £m £m £m £m £m £m £m £m
within one year or less or on demand 41 34 61 136 68 32 08 108 
more than one year  but not more than two years 03 36 11 50 22 34 10 66 
more than two years but not more than five years 1470 38 16 1524 1975 76 09 2060 
more than five years 2943 – 34 2977 2942 – 27 2969 
4457 108 122 4687 5007 142 54 5203 
other gross financial liabilities comprise accruals due after more than one year of £05 million 2001 £05 million and provisions – excluding deferred taxation – for retirement
benefits of £33 million 2001 £34 million restructuring £55 million 2001 nil onerous contracts £27 million 2001 £12 million and other £02 million 2001 £03 million
2002 2001
undrawn committed borrowing facilities expiring £m £m
within one year or less 396 283 
more than two years 1927 1421 
2323 1704  51
22 financial instruments continued
binterest rate profile
the following interest rate profiles analysed by principal currency of the group’ s financial liabilities and assets are after taking into account interest rate swaps entered into by the group
other non other non
fixed floating interest fixed floating interest
rate rate bearing t otal rate rate bearing t otal
2002 2002 2002 2002 2001 2001 2001 2001
gross financial liabilities £m £m £m £m £m £m £m £m
sterling 3078 1167 89 4334 3166 1268 20 4454 
us dollar – 353 – 353 – 749 – 749 
3078 1520 89 4687 3166 2017 20 5203 
the weighted average interest rate for fixed rate financial liabilities is 94 per cent 2001 94 per cent the weighted average period for which the rate is fixed is 85 years
2001 94 years
interest on floating rate liabilities is based on the relevant national inter–bank rate and is fixed in advance for periods of up to six months
other other
floating noninterest floating noninterest
rate bearing t otal rate bearing t otal
2002 2002 2002 2001 2001 2001
gross financial assets £m £m £m £m £m £m
sterling 36 04 40 31 – 31 
us dollar 24 – 24 31 01 32 
60 04 64 62 01 63 
gross financial assets comprise shortterm deposits of £49 million 2001 £29 million cash at bank and in hand of £15 million 2001 £31 million at the year end there
were no other debtors due in more than one year 2001 £03 million
interest on floating rate deposits is based on the relevant national interbank rate and is fixed in advance for periods of up to six months other noninterest bearing
financial assets comprise current bank accounts
c fair values of financial assets and liabilities
carrying estimated carrying estimated
amount fair value amount fair value
2002 2002 2001 2001
gross financial liabilities £m £m £m £m
debt 4457 5218 5007 5565 
finance leases 108 113 142 150 
other liabilities 122 122 54 54 
4687 5453 5203 5769 
the carrying value of financial assets equates to the estimated fair value for both 2002 and 2001
market values have been used to determine the fair value of all foreign currency contracts and listed instruments the fair value of other items has been calculated by
discounting expected cash flows at prevailing interest rates at the year end 52 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
22 financial instruments continued
d hedging
as explained in the operating and financial review on page 29 the group’s policy is to hedge certain interest rate and foreign exchange risks by using interest rate swaps
and forward foreign currency contracts
2002 2001
unrecognised gains and losses on instruments used for hedging and the movements therein £m £m
unrecognised losses at 1 january 05 – 
losses arising during the year that were not recognised 07 05
unrecognised losses on hedges at 31 december 12 05
losses expected to be recognised in next financial year 03 – 
losses expected to be recognised after one year 09 05
unrecognised losses on hedges at 31 december 12 05
e currency exposures
the extent to which the group’s operating entities hold monetary assets and liabilities in currencies other than in their local currency has been reviewed taking into
account the impact of forward foreign exchange currency contracts the group had no material profit and loss exposure to foreign exchange gains or losses on monetary
assets and liabilities denominated in foreign currency as at 31 december 2002
23 provisions for liabilities and charges group
retirement deferred onerous
benefits taxation restructuring contracts other t otal
£m £m £m £m £m £m
at 1 january 2002
as previously reported 34 240 – 12 03 289 
prior year adjustment note 34 – 501 – – – 501 
as restated 34 741 – 12 03 790 
foreign exchange – 01 – – – 01
disposal of business note 26 – – – – 04 04 
charge for year 01 63 55 19 – 138 
utilised in year 05 – – 04 05 14
interest 03 – – – – 03 
at 31 december 2002 33 803 55 27 02 920  53
23 provisions for liabilities and charges continued
retirement benefits
the provision for retirement benefits represents the present value estimated on an actuarial basis net of attributable taxation of £09 million 2001 £09 million of liabilities
in respect of pensions and allowances of former employees of predecessor undertakings and of unfunded and nontaxexempt pension arrangements an independent
actuarial assessment as at 31 december 2000 confirmed that apart from annual interest no additional provision is required in respect of these liabilities
deferred taxation group
2002 2001
£m £m
excess of capital allowances over depreciation 548 501 
retirement benefits 249 229 
other 06 11 
803 741 
no potential or actual liability is shown in respect of fixed assets – property gains which are more than covered by capital losses
restructuring
the restructuring provision relates to the group’s review of its cost base see note 3
onerous contracts
the provision for onerous contracts represents property leases where the unavoidable costs under the lease exceed the economic benefit
other
other provisions relate to the closure costs of southern emergency vehicles a small vehiclemodification business located in the united states
 restated for the effects of financial reporting standard 19 – deferred tax note 34
24 deferred income
group
2002 2001
movements on capital investment grants are set out below £m £m
balance not yet credited to profit and loss account at 1 january 89 93 
grants receivable 04 03 
93 96 
credited to profit and loss account 06 07
balance not yet credited to profit and loss account at 31 december 87 89  54 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
25 acquisition
on 19 april 2002 the group acquired the business and operating assets of hams hall railfreight terminal from parsec of europe limited for a cash consideration of £03 million
acquisition fair value
balance fair value to the
sheet adjustments group
net assets acquired £m £m £m
t angible operating assets 06 03 03 
consideration 03 
fair value adjustments comprise the writedown of tangible operating assets to net realisable value at the date of acquisition 
26 disposal of amports usa’s aviation division and closure of southern emergency vehicles
profit on disposal of discontinued operations includes £78 million in respect of the sale of amports usa’s aviation division the group entered into a conditional sale
agreement on 29 july 2002 with subsidiaries of macquarie global infrastructure funds the sale being conditional upon obtaining consents from the relevant airport and
regulatory authorities all of these consents together with the cash proceeds of £320 million us500 million were received by 13 december 2002 in addition a
charge of £04 million arose on the closure of southern emergency vehicles a small vehiclemodification business located in the usa
net assets disposed £m 
intangible assets note 12 64 
t angible fixed assets note 13 106
net current assets excluding cash 15 
185 
disposal costs 57
242 
profit on disposal before taxation 78 
satisfied by cash 320
cash flow from sale of subsidiary undertakings of £294 million is stated net of disposal costs paid of £26 million in the period up to its date of disposal amports
usa’s aviation division generated turnover of £265 million incurred cost of sales of £219 million and administrative expenses of £09 million giving rise to an operating
profit of £37 million in the period up to its date of closure southern emergency vehicles generated turnover of £14 million and incurred cost of sales of £15 million
giving rise to an operating loss of £01 million 55
27 share capital 2002 2001
£m £m
authorised
500000000 ordinary shares of 25p 1250 1250 
issued calledup and fully paid
328123684 2001 326203394 ordinary shares of 25p 820 816 
in 2001 the company repurchased and subsequently cancelled 16899332 ordinary shares with a nominal value of £42 million these shares representing 50 per cent
of the ordinary shares in issue at 31 december 2000 were purchased out of the proceeds following the disposal of red funnel group in 2000 the total cost of the
purchase including expenses and stamp duty of £683 million was charged to the profit and loss account reserve
share option schemes
during the year options exercised under the schemes resulted in the issue of 1818686 ordinary shares of 25p each the company received a total of £44 million in
respect of these shares a summary of options granted to employees including executive directors and outstanding at 31 december 2002 under share option schemes
is given below and continued on page 56
date option number
price normally of options
date granted per share exercisable outstanding
savingsrelated scheme october 1995 2490p until 2003 234178  
savingsrelated scheme october 1996 2340p until 2004 200563 
savingsrelated scheme october 1997 2220p until 2005 845083  
savingsrelated scheme october 1998 2080p until 2006 656104  
savingsrelated scheme march 1999 2170p 2003 to 2007 542424  
savingsrelated scheme october 1999 2490p 2003 to 2007 689676  
savingsrelated scheme october 2000 2550p 2004 to 2008 747074  
savingsrelated scheme october 2001 3200p 2005 to 2009 786240  
savingsrelated scheme october 2002 3270p 2006 to 2010 1055491  
executive scheme april 1994 2815p until 2004 20000  
executive scheme april 1995 2810p until 2005 41800  
executive scheme september 1996 2960p until 2006 50000  
executive scheme september 1997 2935p until 2007 53000  
executive scheme september 1997 2850p until 2007 10000  
executive scheme september 1998 2530p until 2008 11500  
executive scheme september 1998 2550p until 2008 47000  
executive scheme september 1999 2930p until 2009 227685  
executive scheme september 2000 3110p 2003 to 2010 1181012  
executive scheme april  2001 4065p 2004 to 2011 50000  
executive scheme september 2001 4000p 2004 to 2011 1192488  
executive scheme april 2002 4660p 2005 to 2012 34334  
executive scheme september 2002 4190p 2005 to 2012 1409822   56 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
27 share capital continued
share option schemes continued
date option number
price normally of options
date granted per share exercisable outstanding
us stock purchase plan october 2001 3610p january 2004 47434
us stock purchase plan october 2002 3480p january 2005 30095  
californian stock purchase plan october 2001 3610p january 2004 25560  
californian stock purchase plan october 2002 3480p january 2005 25030  
10213593  
all grants of options made under the savingsrelated share option scheme are as permitted by the rules of the scheme made at a price equal to 80 per cent of the
average middlemarket quotations as derived from the daily official list of the london stock exchange for the dealing days specified in rule 6ii of the scheme
all grants of options under the executive share option scheme have been made at the full undiscounted market price of the shares immediately preceding the date of grant
the grants of options made under the us and californian stock purchase plans were as permitted by the rules of those plans made at a price equal to not less than 85
per cent of the closing market price as derived from the daily official list of the london stock exchange on the previous dealing day before the date of grant 
abp share incentive plan
in 2002 in respect of the abp share incentive plan the company received a total of £04 million for the 101604 ordinary shares issued
28 reserves group
other reserves
share capital profit
premium revaluation merger redemption and loss
account reserve reserve reserve account
£m £m £m £m £m
at 1 january 2002
as previously reported 709 6417 198 172 1817 
prior year adjustment note 34 – – – – 545
as restated 709 6417 198 172 1272 
issue of ordinary shares 43 – – – – 
qualifying employee share t rust 22 – – – 22
deficit arising on revaluation of tangible property assets note 14 – 55 – – – 
realisation of property revaluation surpluses of previous years – 83 – – 83 
retained profit for the year – – – – 526 
currency translation differences on foreign currency net investments – – – – 09
at 31 december 2002 774 6279 198 172 1850 
during the year £47 million was received by the company upon the exercise of options awarded under the savingsrelated share option scheme employees paid £25 million
to the group for the issue of these shares and the balance of £22 million comprised contributions to the qualifying employee share trust from the employing company
at 31 december 2002 cumulative goodwill writtenoff was £209 million 2001 £209 million including £42 million 2001 £42 million in respect of associated undertakings 57
28 reserves continued company
other reserves
share capital profit
premium revaluation merger redemption and loss
account reserve reserve reserve account
£m £m £m £m £m
at 1 january 2002
as previously reported 709 6501 346 172 1585 
prior year adjustment note 34 – 545 – – – 
as restated 709 5956 346 172 1585
issue of ordinary shares 43 – – – – 
qualifying employee share t rust 22 – – – 16
surplus arising on revaluation of subsidiary undertakings note 15 – 187 – – – 
profit for the year – – – – 269
at 31 december 2002 774 6143 346 172 1838 
29 group cash flow statement
2002 2001
reconciliation of operating profit to net cash inflow from operating activities £m £m
group operating profit 1582 1601 
noncash items
depreciation and grant amortisation 245 230 
amortisation of goodwill 16 15 
pension prepayment movement 67 79
cash inflowoutflow from movements in working capital
property developments and land held for sale 119 03
debtors 34 177
creditors 67 71 
increasedecrease in provisions 63 06 
net cash inflow from operating activities 1991 1652 
included within net cash inflow from operating activities is £44 million 2001 £33 million in relation to discontinued operations these operations utilised £03 million 2001
£50 million in relation to capital expenditure and financial investment and £nil 2001 £26 million in relation to purchase of business and subsidiary undertakings
2002 2001
analysis of decreaseincrease in borrowings and lease finance during the year £m £m
borrowings due within one year
decreaseincrease in unsecured loans 14 02 
increase in finance leases 02 03 
borrowings due after one year
decrease in secured loans – 03
decreaseincrease in unsecured loans 478 668 
decrease in finance leases 35 31
decrease in amortised costs 04 02 
521 641 58 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
29 group cash flow statement continued effect of
foreign
at exchange at
1 january cash flow rates 31 december
2002 2002 2002 2002
analysis of changes in net borrowings during the year £m £m £m £m
cash at bank and in hand 31 14 02 15
bank overdraft 32 13 – 19
01 01 02 04
borrowings – amounts falling due within one year excluding overdrafts 68 12 – 56
borrowings – amounts falling due after more than one year 5049 509 50 4490
5118 520 48 4550
liquid resources 29 20 – 49 
net borrowings 5089 540 48 4501
liquid resources comprise shortterm deposits with banks with maturity dates between seven days and 12 months
30 related party transactions
the group has interests in three associated undertakings southampton container terminals limited tilbury container services limited and the cardiff bay partnership
the nature of these investments is described more fully in note 33 to the financial statements
during the year the group charged these undertakings a total of £238 million 2001 £190 million in respect of property management and operational services at the year
end £52 million 2001 £52 million remained owing by these undertakings in respect of these charges
the amounts disclosed in this note as owing by these undertakings at the year end are aggregated with other loans made to or temporary deposits made by these
associated undertakings of the group for the purposes of the disclosure of the balances with associated undertakings in notes 17 and 19
31 financial commitments group company
2002 2001 2002 2001
£m £m £m £m
capital expenditure contracted but not provided for 198 129 – –
operating leases
commitments during the next financial year in respect of operating lease payments are as follows
land and buildings
leases which expire within one year 03 03 – – 
leases which expire within two and five years 29 34 – – 
leases which expire after five years 24 15 09 09 
other leases
leases which expire within one year 04 04 – – 
leases which expire within two and five years 15 13 – – 
leases which expire after five years 04 01 – – 
79 70 09 09  59
32 contingent liabilities group company
2002 2001 2002 2001
contingent liabilities under claims indemnities and bank guarantees £m £m £m £m
bank guarantees in respect of subsidiary undertakings – – 28 48 
other guarantees and contingencies 40 53 – – 
other guarantees and contingencies primarily relate to performance bonds
33 principal subsidiary and associated undertakings  held by
group
subsidiary undertakings
ports and transport
associated british ports see below
exxtor shipping services limited 100
ipswich port limited 100
northern cargo services limited 100
slaters t ransport limited 100
southampton free t rade zone limited 100
the t eignmouth quay company limited 100
abp marine environmental research limited 100
american port services inc registered and operating in the usa 100
amports cargo services limited 100
amports vehicle t erminals limited 100
property
grosvenor waterside holdings limited 100
grosvenor waterside developments limited 100
grosvenor waterside investments limited 100
associated undertakings
ports and transport
southampton container t erminals limited 49
tilbury container services limited 33
†
property
the cardiff bay partnership 45
 under the t ransport act 1981 the company has powers over associated british ports corresponding to the powers of a holding company over a whollyowned subsidiary undertaking
†
associated british ports also owns 49 per cent of the issued preference share capital in tilbury container services limited 
all subsidiary and associated undertakings are registered and operate in england and wales except for american port services inc which is registered in the usa and the
cardiff bay partnership which is unincorporated and has its principal place of business at 150 holborn london ec1n 2lr the group’s interest in subsidiary undertakings
is represented by ordinary shares 60 associated british ports holdings plc annual report  accounts 2002
notes to the financial statements
34 financial reporting standard 19 – deferred t ax frs 19 restatement
the group adopted frs 19 which sets out the revised accounting guidance on deferred tax in its 2002 interim financial statements prior to frs 19 the group had
complied with statement of standard accounting practice 15 – deferred tax ssap 15 which required provision for deferred tax to be made using the liability method to
the extent that the net deferred tax assets or liabilities recognised were likely to crystallise in the foreseeable future given the group’s ongoing capital expenditure
programme under ssap 15 the group was not required to recognise any deferred tax liability in respect of the timing differences between the group’s industrial building and
capital allowances and the group’s depreciation expense as the group’s industrial building and capital allowances are expected to continue at levels in excess of the group’s
depreciation expense for the foreseeable future
under frs 19 except for broughtforward capital losses and property revaluation gains the group has made a full provision for deferred tax in respect of timing differences
and recognised in full the future tax impact of past transactions without taking into account the beneficial tax impact of the group’s planned future capital expenditure
programme as permitted under ssap 15 the group has not recorded a deferred tax asset with respect to unrelieved capital losses as the recoverability of these cannot be
assessed with reasonable certainty the adoption of frs 19 has increased the group’s reported underlying effective tax rate from 248 per cent to 280 per cent and
reduced the group’s underlying earnings per share by 14 pence from 318 pence to 304 pence in addition net assets as at 31 december 2002 have been reduced by
£590 million from £10683 million to £10093 million none of this has had any impact on cash flows 
comparative figures for 2001 have been restated to reflect the effects of frs 19 as follows
reported adjustment restated
year ended 31 december 2001 £m £m £m
group profit and loss account
profit on ordinary activities before taxation 1295 – 1295 
t axation on profit on ordinary activities 323 42 365
profit on ordinary activities after taxation attributable to shareholders 972 42 930 
dividends 454 – 454
retained profit for the group and its associates 518 42 476 
earnings per share – underlying 294p 13p 281p 
group balance sheet
investments – interest in associated undertakings 524 44 480 
provisions for liabilities and charges – deferred taxation 289 501 790
equity shareholders’ funds – profit and loss account 1817 545 1272  61
statement of directors’ responsibilities in respect of the preparation of 
financial statements
company law requires the directors to prepare
financial statements for each financial year which
give a true and fair view of the state of affairs of
the company and the group and of the profit or
loss of the group for that period in preparing
those financial statements the directors are
required to 
– select suitable accounting policies and then
apply them consistently
– make judgements and estimates that are
reasonable and prudent
– state whether applicable accounting standards
have been followed subject to any material
departures disclosed and explained in the
financial statements
–prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the group and the company will
continue in business
the directors confirm that the financial statements
comply with these requirements the directors are
responsible for keeping proper accounting
records that disclose with reasonable accuracy at
any time the financial position of the company
and the group and to enable them to ensure that
the financial statements comply with the
companies act 1985 they are also responsible
for safeguarding the assets of the company and
the group and hence for taking reasonable steps
for the prevention and detection of fraud and
other irregularities 
the directors are responsible for the maintenance
and integrity of the group’s website where the
group’s annual report  accounts is available
information published on the internet is accessible
in many countries where legal requirements may
differ from the united kingdom’s legislation
relating to the preparation and dissemination of
financial statements 62 associated british ports holdings plc annual report  accounts 2002
principal activities
the principal activities of the group comprise the
provision of port facilities and related services to
ship owners and other users of seaports in the uk
and the usa the group owns and operates 21
ports in the uk and provides vehicleprocessing
services from four port locations in the usa in
addition the group engages in the provision of
valueadded transportrelated services in the uk
and generates income from the ownership and
development of properties at port locations within
the uk and the usa this report should be read in
conjunction with the operating and financial review
on pages 24 to 29 and the group chief executive’ s
review on pages 12 to 14 both of which include
details of the group’ s trading during the year and an
indication of likely future developments
results and dividend
the profit for the year attributable to shareholders was
£1011 million giving underlying earnings per share of
304 pence further details of the group’ s results are
set out in note 2 to the financial statements the directors
are recommending a final dividend of 825 pence per
shar e to be paid on 1 may 2003 to or dinary shareholders
on the register at close of business on 4 april 2003
combined with the interim dividend of 65 pence per
share paid on 1 november 2002 this would make a
total ordinary dividend for the year of 1475 pence per
share representing an increase of 73 per cent on
the previous year’ s dividend of 1375 pence per share
acquisitions and disposals
on 19 april 2002 the group acquired the business
and operating assets of hams hall railfreight
terminal from parsec of europe limited for a cash
consideration of £03 million
on 1 july 2002 the group closed down the
operations of southern emergency vehicles a
small vehiclemodification business in the usa
on 29 july 2002 the group entered into a conditional
agreement for the sale of amports usas aviation
division which comprised 11 airport facilities to
subsidiaries of macquarie global infrastructure
funds the sale being conditional upon obtaining
consents from the relevant airport and regulatory
authorities all of these consents together with the
cash proceeds of £320 million us500 million
were received by 13 december 2002
investment property
the group’ s tangible property assets were valued
on the basis of open market value as at 31 december
2002 at £5688 million leading to a decrease in the
revaluation reserve of £55 million 
directors and their interests
biographies of the directors of the company are
provided on pages 22 and 23 of the three directors
retiring at the annual general meeting agm in
accordance with the companys articles of association
richard adam and aubrey adams being eligible
offer themselves for reelection george duncan is
not seeking reelection stuart chambers has been
appointed since the last agm and being eligible
will also offer himself for reelection 
of the directors offering themselves for reelection
richard adam has a service agreement with the
company
details of the remuneration paid to directors who
held office during the year are given in the
remuneration report on pages  66 to 69 this also
contains details of each director’ s interest in the share
capital of the company at the year end
share capital
details of changes in the company’ s share capital
including shares issued and options granted under
the employee share schemes are set out in note 27 to
the financial statements details of the company’ s
shareholders at the year end are provided on page 71
payment of suppliers
the group agrees terms and conditions with
suppliers before business takes place the group’ s
policy and practice is to pay agreed invoices in
accordance with the terms of settlement at the
year end the amount owed to trade creditors
amounted to 30 days 2001 20 days of purchases
from suppliers
research and development
the group undertakes research and provides a
wide range of hydraulic dredging and engineering
consultancy services both for associated british
ports and outside customers through abp marine
environmental research limited a whollyowned
subsidiary 
employee involvement
the company uses various methods to provide
information to and where appropriate consult with
employees about current activities and progress
the company believes that financial participation is
a major constituent of employee involvement and
employee share schemes are well established an
offer under the share incentive plan formerly
known as the all employee share ownership plan
directors’ report 63
was made to employees in 2002 as well as grants
of options under both the savingsrelated share
option scheme srsos and the executive share
option scheme esos a further offer under the
share incentive plan and a grant of options under
the srsos will take place in 2003 the company
also intends to make another grant under the esos
in 2003 at the full undiscounted market price of the
shares at the date of the grant offers were also made
in 2002 to employees under the us and californian
stock purchase plans with further offers scheduled
for 2003
disabled persons
it is group policy to give full and fair consideration to
applications for employment by disabled persons
where employees become disabled during
employment the group seeks to provide opportunities
for them to continue employment in positions
compatible with their disability wherever possible
disabled employees in line with all staff are
encouraged to make use of training and development
facilities
charitable and political contributions
donations for charitable purposes in 2002 amounted
to £74000 2001 £73000 the group also made
contributions of £2000 2001 nil for political purposes
in the usa
special business at the annual general meeting
agm
the remuneration report will be put to the agm for
approval as an ordinary resolution
new authorities for the issue of the balance of the
authorised share capital are being sought at the agm
held on 16 april 2002 shareholders approved an
ordinary resolution conferring a general authority
for the purposes of section 80 of the companies
act 1985 on the directors to allot equity securities
up to an aggregate nominal amount representing
the lesser of i the unissued ordinary share capital of
the company and ii onethird of the issued equity
share capital of the company  for one year ending
on the date of the agm in 2003 the directors are
proposing that an ordinary resolution be submitted
at the agm in order to grant a general authority for
a further year in respect of an amount equivalent to
onethird of the issued equity share capital the
authorised share capital of the company is
£125000000 divided into 500000000 ordinary
shares of 25 pence each of which £27409096
comprising 109636384 ordinary shares
represents onethird of the issued equity share
capital as at 19 february 2003 the directors have
no present intention of exercising such authority
other than to issue shares pursuant to the
companys employee share schemes
the directors are also proposing that a special
resolution be submitted at the agm to empower
them to allot wholly for cash up to a nominal
amount of £4111364 16445456 ordinary
shares representing approximately five per cent of
the issued equity share capital of the company as at
19 february 2003 without offering them first to
existing shareholders the authority would expire at
the agm in 2004 the directors believe it is in the
best interests of the company that as permitted by
the companies act 1985 they should have
available a relatively small number of shares in order
that they may take advantage of any appropriate
opportunities that may arise
the directors are further proposing that a special
resolution be submitted at the agm giving the company
authority to purchase in the market up to 328 million
of its ordinary shares of 25 pence each representing
approximately 10 per cent of the present issued share
capital the authority would expire on the date of the
agm in 2004 in reaching their decision to purchase
ordinary shares the directors will take into account the
companys cash resources and capital requirements
and the effect of any purchase on earnings per share
there is no present intention to use this authority 
finally  the directors are proposing that an ordinary
resolution be submitted at the agm giving the
company authority to establish the associated
british ports longt erm incentive plan as outlined
in the appendix to the letter from the chairman to
shareholders dated 11 march 2003
auditors
following the conversion of our auditors
pricewaterhousecoopers to a limited liability
partnership llp from 1 january 2003
pricewaterhousecoopers resigned on 17 february
2003 and the directors appointed its successor 
pricewaterhousecoopers llp  as auditors a resolution
to reappoint pricewaterhousecoopersllp as auditors
to the company will be proposed at the agm
by order of the board
hywel rees
company secretary
19 february 2003 64 associated british ports holdings plc annual report  accounts 2002
combined code
the board of directors is responsible for  and
committed to the maintenance of the highest
standards of corporate governance throughout the
group and fully supports the principles laid down in
the combined code on corporate governance
the code this statement describes how the
principles of the code are implemented and reports
on the group’ s compliance with the code’ s
provisions
board of directors
the board of directors is responsible for the groups
strategic direction the establishment of policies and
internal controls and the monitoring of operational
performance 
the board currently comprises seven non
executive  directors and two executive directors
the nonexecutive role of chairman is separate
from the executive role of the group chief
executive and there is a clear division of
responsibilities between the two on 16 april 2002
ross sayers succeeded sir keith stuart as non
executive chairman following sir keith’ s retirement
biographies of all board members are provided on
pages 22 to 23
the executive directors operate within clearly
defined limits of authority and must refer any
matters outside these limits to the board for its
consideration the group’ s nonexecutive directors
bring wide and varied commercial experience to the
board’ s deliberations and fully participate in the
resolution of matters reserved for the board they
are all considered to be independent of
management and free from any business or other
relationship that could materially interfere with their
independent judgement 
the board meets eight times a year in the normal
course of business board meetings are held both
at head office and at the groups port locations
around the uk the schedule of matters reserved
for the board includes annual budgets strategic
plans reporting to shareholders approval of
acquisitions and divestments approval of major
capital expenditure projects and consideration of
significant financing
board members are provided with all relevant
information on a timely basis in order to enable the
board to discharge its duties effectively  the
chairman is responsible for ensuring that all
directors are properly briefed on issues arising at
board meetings
all directors have access to the advice and services
of the company secretary  who is responsible for
ensuring that board procedures are followed
newlyappointed directors who do not have any
previous public company board experience are
provided with relevant training on their role and
responsibilities subsequent training is available to
all directors on an as needed basis any director
may also take independent professional advice at
the group’ s expense in furtherance of his duties
all directors are subject to reelection at intervals of
no more than three years
board committees
there are three main committees of the board 
the audit committee is responsible for keeping
under review the scope and results of the audit its
costeffectiveness and the independence and
objectivity of the auditors particularly in the context
of the nature and extent of any nonaudit services
they provide to the group the committee meets at
least twice a year and its terms of reference also
include the review of the annual and interim financial
statements before they are approved by the board
and the monitoring of internal and external audit
functions 
the committee may  as appropriate meet the
group’ s internal and external auditors without the
group’ s management being present the audit
committee is chaired by derek sach its other
members are aubrey adams tim bowdler and
andrew simon
the remuneration committee is chaired by george
duncan the deputy chairman and senior
independent director  and comprises all the non
executive directors the committee is responsible
for setting all the elements of executive directors’
remuneration packages this includes establishing
the targets attached to the performancerelated
element of executive directors’ remuneration and
for the granting of options under the group’ s share
option schemes a separate report on directors’
remuneration is included on pages 66 to 69
the nomination committee meets as and when
necessary  and at least once a year  its
responsibilities include consideration of candidates
for board nomination reelection to the board of
those directors retiring by rotation and succession
planning the committee is chaired by ross sayers
and comprises the nonexecutive directors and bo
lerenius
relations with shareholders
the board is committed to maintaining good
communications with shareholders other than
during close periods the group chief executive
and the group finance director maintain a regular
dialogue with institutional shareholders throughout
the year  the group also encourages communications
with private shareholders throughout the year and
welcomes their participation at shareholder
meetings institutional shareholders and analysts
are invited to presentations by the executive
directors immediately after the announcement of
the group’ s halfyear and fullyear results these 
are subsequently made available on the group’ s
website
in addition to the halfyear and fullyear results
announcements the company also issues
trading statements in advance of entering its
close periods and provides an indication of
trading at the time of the annual general meeting
agm all board members attend the agm and
in particular the chairmen of the audit
remuneration and nomination committees are
available to answer questions resolutions are
proposed on each substantially separate issue
and the agenda at the agm includes a resolution
adopting the group’ s annual report  accounts
notice of the agm is sent to all shareholders at
least 20 working days before the meeting details
of the proxy votes for and against each resolution
are announced after the result of the hand votes 
is known
corporate governance 65
the group’ s annual report  accounts
preliminary and interim announcements trading
statements and press releases are available on 
its website wwwabportscouk whether a
shareholder or not all of these communications
from the company can be received in electronic
form by emailing prabportscouk
going concern
after making enquiries the directors believe 
that the group and the company have adequate
resources to continue in operational existence 
for the foreseeable future for this reason they
continue to adopt the going concern basis in
preparing the financial statements
internal control 
the board acknowledges that it has overall
responsibility for the groups system of internal
control and for reviewing its effectiveness 
the board takes regular account of the
significance of social environmental and 
ethical matters in assessing the 
appropriateness of the group’ s system of 
internal control significant social ethical and
environmentrelated risks and opportunities
which could impact on the group’ s short and
longterm value are identified assessed and
addressed appropriately the group has in place
effective systems for managing all significant 
risks and the board has received adequate
information throughout the year in making this
assessment further information on the 
group’ s management of social ethical and
environmental matters will be provided in its 
first separate report on corporate and social
responsibility due to be published during 2003
the group’ s system of internal control is 
designed to manage rather than eliminate 
risk in achieving business objectives while 
the system is subject to regular review and 
updating it should be recognised that such
systems can provide only reasonable and 
not absolute assurance against material
misstatement or loss during 2002 procedures
were in place throughout the group to ensure
compliance with the report of the turnbull
committee
risk management
as recommended in the guidance on internal
control issued by the t urnbull committee the
group has in place a risk management working
group comprising senior executives and chaired 
by the group finance director  for the purposes of
identifying the major risks facing the group and
formalising the group’ s risk objectives and risk
management processes the recommendations of
the risk management working group are reviewed
and updated annually and have been adopted by
the board 
the group’ s overall risk management objective is 
to take such strategic and commercial risks so as to
enable it to grow the business through a thorough
understanding of the risks and responses required
for success the definition of risk for the group is “an
uncertainty or event that could unless effectively
managed significantly affect associated british
ports holdings plc’ s ability to achieve its current or
future objectives”
the group has identified four major risk
management objectives
–t o ensure that the health and safety of its
employees and other persons is not put at risk 
by its undertaking
–t o continue to avoid disasters or catastrophes 
by managing those physical and other risks that
have the potential to significantly damage the
financial position of the group its reputation or 
its ability to provide services
–t o identify  assess and prioritise opportunities 
to grow the business having regard for the need
to manage the group’ s commercial risks
– in operating its business to endeavour to meet
the demands of trade while having due regard 
for the potential impact of its activities on the
environment
the group aims to manage risk wherever possible
by embedding processes and ensuring controls to
manage risk are inherent in daytoday operations
to this end monthly reports received by the group
chief executive from the operating units cover key
aspects of the business such as commercial
matters health and safety issues personnel issues
financial results and future business prospects
these reports also comment on existing risks and
specifically identify any emerging risks along with
actions being taken to manage them risks such 
as health and safety and the environment are further
monitored by written reports submitted to the board
on a regular basis
the group chief executive the group finance
director and senior operational and financial
managers meet on a regular basis these meetings
allow for discussions of particular issues affecting
each business unit including their major risks
the group maintains a comprehensive annual
planning and management reporting system 
a detailed annual budget is prepared in advance of
each year and is supplemented by revised forecasts
during the course of the year  in addition a three
year strategic plan is updated annually  actual financial
results are reported monthly and compared to budget
revised forecasts and prioryear results all of these
reports are reviewed by the board for approval
comprehensive procedures provide for the
appraisal approval control and review of capital
expenditure these are incorporated within clearly
defined reporting lines and limits of authority 
the internal audit function supports the directors in
assessing the effectiveness of internal controls at each
business unit through a preagreed audit programme
where weaknesses in controls are reported corrective
action is taken and where appropriate communicated
to other operating units to encourage and enhance
best practice around the group
every year  each operating unit completes a control
selfassessment questionnaire that measures and
assesses risk areas and principal controls this
questionnaire is part of the risk management process
and is reviewed by internal audit the results which
are presented to the audit committee complement
the existing internal and external audit procedures
compliance with the provisions of the code
the board considers that the company has fully
complied with the code’ s provisions since 17 may
2002 before that date the company did not comply
with b17 which concerns directors notice periods 66 associated british ports holdings plc annual report  accounts 2002
remuneration report
introduction
the directors confirm that this report has been
drawn up in accordance with schedule b of the
combined code and statutory instrument – si
20021986 ‘the directors’ remuneration report
regulations 2002’ issued by the department of
trade and industry in august 2002 
the remuneration committee comprises all non
executive directors and is currently chaired by
george duncan the committee takes into
account the views of the group chief executive in
determining the remuneration for other executive
directors of the company and the directors of the
subsidiary board of abp  the group chief
executive does not attend any meetings of the
committee at which his own remuneration is
discussed the functions of the remuneration
committee are described in the corporate
governance statement on page 64
remuneration policy
the group’s remuneration policy is designed to
attract retain and motivate key senior executives
with the relevant skills to achieve its business
objectives and to align their interests with those 
of shareholders by recognising and rewarding
performance the committee aims to ensure that
the remuneration packages for executive directors
are competitive with other companies of similar
size activities and complexity it reviews the total
remuneration package and the balance of its
various elements regularly during the course of
the year the committee undertook a review which
resulted in a proposal to shareholders to
supplement the executive share option scheme
with a new longterm incentive plan in
determining the appropriate levels of remuneration
for executive directors the committee takes
independent advice from new bridge street
consultants the use of external consultants and
the choice of consultant is a matter reserved for
the committee the consultants appointed to
provide advice on executive remuneration do not
provide any other services to the group 
the remuneration package for executive directors
incorporates a competitive basic salary  a performance
related annual cash bonus sharerelated incentive
schemes pension and other benefits in determining
executive remuneration the remuneration
committee takes into account pay and employment
conditions across the group it aims to link a
percentage of the overall package for the senior
executives and executive directors to the group’s
shortand longterm business performance
the board determines the remuneration for non
executive directors the company maintains contact
as necessary with its principal shareholders on
remuneration matters
basic salary
the committees objective is to ensure that the
basic salary for each director is appropriate and
competitive for the responsibilities involved base
salaries are reviewed annually and any increase 
in the basic salary of directors is awarded only
after taking into account individual performance
changes in responsibilities and external advice as
to appropriate salary levels for each position
performancerelated bonus
a performancerelated annual cash bonus scheme
is open to senior management and is non
pensionable the payment to executive directors
for achievement of target is 30 per cent of basic
salary with up to a further 30 per cent of basic
salary payable for exceptional outperformance 
of target under the scheme senior management
receive payment in the range of 10 to 20 per cent
of basic salary for ontarget performance and a
further 10 to 20 per cent of basic salary for
exceptional outperformance of target bonuses 
in the range of 5 per cent to 36 per cent are payable
in respect of 2002
sharerelated incentives
executive share option scheme
the group operates a performancerelated
executive share option scheme to reward executive
directors and senior management the overall aim
of this scheme is to align the interests of key
executives with the group’s objective of creating
shareholder value in the longer term
options are issued annually at the share price
prevailing at the date of issue as payment is made
at the date of exercise no consideration is payable
at the time of grant of these options
options may not be exercised unless and until the
earnings per share target has been achieved this
target requires the percentage growth in the groups
earnings per share to exceed the rate of inflation
by at least three per cent per annum for a minimum
period of three years if the earnings per share
target is not achieved at the end of the minimum
period it will be extended for a further year and
again at the end of the fourth year if the earnings
per share target is not achieved by the end of the
fifth year the options will lapse options granted
to the executive directors in 1999 vested during
the year as the actual growth of 313 per cent in
the group’s earnings per share over the threeyear
period from 1 january 1999 exceeded the
152 per cent growth required in line with current
market practice the group continues to use earnings
per share as the target for the remaining options
held by executive directors and other senior
managers on the basis that it is an indicator closely
aligned to shareholder value
the graph below sets out the group’s total
shareholder return tsr compared with the ftse
top 250 companies comparator group over the
fiveyear period to 31 december 2002
60
80
100
120
140
160
180
200
1998 1999 2000 2001 2002
associated british ports holdings plc
ftse top 250  67
longterm incentive plan
as part of a wider review of executive directors’
remuneration the company reviewed its long
term incentive arrangements during 2002 one
recommendation from this review was the
introduction of a new longterm incentive plan
for executive directors to strengthen the link
between the most senior executives’ remuneration
and the longterm performance of the group 
a resolution seeking shareholder approval for the
introduction of this plan is being proposed at the
annual general meeting on 15 april 2003
under the plan executive directors may receive
annual share awards of up to a maximum
individual limit of 100 per cent of base salary 
per annum in line with current best practice the
vesting of the shares will be based on the company’ s
performance in terms of tsr compared to a
group comprising the ftse companies ranked
from 51 to 150 by market capitalisation excluding
companies in the financial it and
telecommunications sectors the exact list of
companies will be based on the average market
capitalisation of companies over three months
prior to the beginning of the performance period
each performance period will last three years and
will start at the beginning of the financial year in
which the award is made tsr will be averaged
over the six months prior to the start and end of
the performance period thirty per cent of the
shares will vest for attaining a median ranking
100 per cent of the shares will vest if the
company is ranked in the upper decile there 
will be prorata vesting for performance between
median and upper decile no shares will vest for
belowmedian ranking or unless real growth in
earnings per share has been achieved over the
performance period
executive directors will be required to retain shares
worth 50 per cent of the posttax gain made
through the exercise of options until they hold
shares with a value equivalent to their base salary
the remuneration committee has chosen tsr as the
performance criterion for future vestings of awards
made under the longterm incentive plan because
it believes it desirable to link part of the longterm
remuneration to outperforming companies of a
similar size
other share schemes
subject to a minimum period of service all uk
employees including executive directors are
eligible to participate in the abp share incentive
plan sip and the group’s savingsrelated share
option scheme srsos under the sip  employees
can elect to purchase shares out of their pretax
and national insurance salaries up to a maximum
of £125 per month shares purchased by
employees are allotted to a trustee on a monthly
basis the allotted shares are held in trust for a
period of five years prior to vesting
under the sip  employees can also elect to be
awarded free shares worth £250 annually in
addition participants can receive further shares of
up to a maximum value of £375 depending on the
achievement by the group of agreed targets with
regard to its annual pretax profits shares awarded
under this part of the scheme are also held in trust
for a period of five years prior to vesting
under the srsos options are granted to employees
at a price which is 20 per cent less than the market
price at the date of grant employees can elect to
save up to a maximum of £250 per month for a
period of three or five years at the end of the
elected savings period the employee can use the
proceeds to acquire shares in the company at the
option price the company operates plans similar
to the srsos for its employees in the usa
pension 
the company pays executive directors a supplement
calculated at 25 per cent of basic salary in lieu of
pension arrangements
other benefits
other benefits are provided in line with market
practice these include medical cover and a
company car or cash alternative
service contracts
the notice period contained within the employment
contracts of existing executive directors is one
year the board may if necessary consider initial
contract periods in excess of one year in the
recruitment of new executive directors any such
contracts would revert to a oneyear notice period
on expiry of the initial notice period
in the event of the company facing a claim for
compensation for loss of office by a director the
level of compensation would be subject to
mitigation if considered appropriate and legally
sustainable there are no provisions for pre
determined compensation in the service contracts
of existing directors
audited information
the emoluments and share options information
disclosed on the following pages as required by
part 3 of schedule 7a of the companies act
1985 has been audited 68 associated british ports holdings plc annual report  accounts 2002
remuneration report
emoluments
performance other performance other
salaryfees related bonus pension benefits total salaryfees related bonus pension benefits total
2002 2002 2002 2002 2002 2001 2001 2001 2001 2001
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
executive directors
richard adam 237 89 59 15 400 209 77 52 14 352
stuart bradley a ––––– 22––– 22
bo lerenius b 403 150 101 17 671 380 103 95 14 592
james shaw c ––––– 92–– 7 99
total 640 239 160 32 1071 703 180 147 35 1065
nonexecutive directors
aubrey adams 38––– 38 38––– 38
tim bowdler 33––– 33 32––– 32
stuart chambers d 8––– 8 –––– 
peter dean e ––––– 11––– 11
george duncan 75––– 75 75––– 75
derek sach 40––– 40 40––– 40
ross sayers f 104––– 104 8––– 8
andrew simon 33––– 33 33––– 33
sir keith stuart g 50––– 50 150 – – 1 151
total 381––– 381 387 – – 1 388
t otal directors’ emoluments 1021 239 160 32 1452 1090 180 147 36 1453
a stuart bradley retired as a director on 24 april 2001
b the highestpaid director during the year was bo lerenius
c james shaw resigned as a director on 30 june 2001 under the terms of a compromise agreement he is entitled to receive private medical insurance until 31 march 2004 at an estimated cost of £2429
d stuart chambers was appointed as a director on 15 october 2002
e peter dean who resigned as a director on 24 april 2001 has been retained as a consultant to advise the company on pension matters and received £15000 2001 £10000 in respect of his services
f ross sayers was appointed as a director on 16 october 2001 and as chairman on 16 april 2002 following sir keith stuart’s retirement
g sir keith stuart retired from the board on 16 april 2002
h lord crickhowell who retired as a director on 28 april 1999 has been retained as a consultant to advise the company on parliamentary matters and received £15000 2001 £15000 in respect of his services
directors’ share options
movements in the directors’ holdings of options under both the executive share option scheme and the savingsrelated share option scheme during the year are as follows
executive share option scheme
options at options at 
1 january granted exercised 31 december date of option date normally
2002 in year in year b 2002 a grant price exercisable 
richard adam 134000 – 134000 – nov 1999 29700p nov 2002 to nov 2009
68816 – – 68816 sep 2000 31100p sep 2003 to sep 2010
52785 – – 52785 sep 2001 40000p sep 2004 to sep 2011
– 58472 – 58472 sep 2002 41900p sep 2005 to sep 2012
255601 58472 134000 180073 69
executive share option scheme continued
options at options at 
1 january granted exercised 31 december date of option date normally
2002 in year in year b 2002 a grant price exercisable 
bo lerenius 350000 – 350000 – may 1999 28400p may 2002 to may 2009
156270 – – 156270 sep 2000 31100p sep 2003 to sep 2010
95738 – – 95738 sep 2001 40000p sep 2004 to sep 2011
– 97852 – 97852 sep 2002 41900p sep 2005 to sep 2012
602008 97852 350000 349860
a options held at 31 december 2002 are only exercisable should the performance criteria described on page 66 be achieved
b the aggregate gains made by directors on the exercise of options during the year totalled £712145 2001 £59336 on 21 may 2002 bo lerenius exercised options over 180032 shares at 284 pence per share the market price on 21 may 2002 was 450 pence
per share on 23 may 2002 bo lerenius exercised options over a further 169968 shares at 284 pence per share the market price on 23 may 2002 was 442 pence per share on 15 november 2002 richard adam exercised options over 134000 shares at 297
pence per share the market price on 15 november 2002 was 405 pence per share
savingsrelated share option scheme
options at options at 
1 january granted exercised 31 december date of option date normally
2002 in year in year 2002 grant price exercisable 
richard adam 3799 – – 3799 oct 2000 25500p 6 months from jan 2004
bo lerenius 3799 – – 3799 oct 2000 25500p 6 months from jan 2004
directors’ interests
directors’ beneficial including family interests in the share capital of the company as at 31 december 2002 as recorded in the register maintained by the company pursuant to section 325 of the companies
act 1985 are set out in the table below 
ordinary shares of 25p
each held by the trustees
of the employee share
ordinary shares of 25p each ownership scheme
2002 2001 2002 2001
richard adam 3000 3000 814 488
aubrey adams 20000 20000 – –
tim bowdler 2486 2486 – –
stuart chambers – – – –
george duncan 8000 8000 – –
bo lerenius 9477 1400 1229 1318
derek sach 15000 15000 – –
ross sayers 10000 10000 – –
andrew simon 5000 5000 – –
on 27 january 2003 31 shares were allotted to the trustees of the sip on behalf of richard adam and 31 shares were allotted on behalf of bo lerenius there have been no other changes in total shareholdings
by directors in the period between 31 december 2002 and 19 february 2003 none of the directors had any nonbeneficial interest in the share capital of the company during the period to 31 december 2002
nor the period from the year end to 19 february 2003 the company’s register of directors’ interests which is open to inspection contains full details of directors’ shareholdings and options to subscribe
by order of the board
hywel rees
company secretary
150 holborn london ec1n 2lr
19 february 2003 70 70 associated british ports holdings plc annual report  accounts 2002
we have audited the financial statements which
comprise the group profit and loss account the
balance sheets the group cash flow statement
the statement of group total recognised gains and
losses and the related notes we have also audited
the disclosures required by part 3 of schedule 7a
to the companies act 1985 contained in the directors’
remuneration report “the auditable part”
respective responsibilities of directors and
auditors
the directors’ responsibilities for preparing the
annual report the directors’ remuneration report
and the financial statements in accordance with
applicable united kingdom law and accounting
standards are set out in the statement of directors’
responsibilities
our responsibility is to audit the financial statements
and the auditable part of the directors’ remuneration
report in accordance with relevant legal and regulatory
requirements and united kingdom auditing
standards issued by the auditing practices board
this report including the opinion has been
prepared for and only for the company’s members
as a body in accordance with section 235 of the
companies act 1985 and for no other purpose
we do not in giving this opinion accept or assume
responsibility for any other purpose or to any other
person to whom this report is shown or in to whose
hands it may come save where expressly agreed
by our prior consent in writing
we report to you our opinion as to whether the
financial statements give a true and fair view and
whether the financial statements and the auditable
part of the directors’ remuneration report have
been properly prepared in accordance with the
companies act 1985 we also report to you if in
our opinion the directors’ report is not consistent
with the financial statements if the company has
not kept proper accounting records if we have
not received all the information and explanations
we require for our audit or if information specified
by law regarding directors’ remuneration and
transactions is not disclosed
we read the other information contained in the
annual report and consider the implications for 
our report if we become aware of any apparent
misstatements or material inconsistencies with 
the financial statements the other information
comprises only the directors’ report the unaudited
part of the directors’ remuneration report the
chairman’s statement the operating and financial
review and the corporate governance statement 
we review whether the corporate governance
statement reflects the company’s compliance 
with the seven provisions of the combined code
specified for our review by the listing rules of 
the financial services authority and we report if it
does not we are not required to consider whether
the board’s statements on internal control cover
all risks and controls or to form an opinion on the
effectiveness of the group’s corporate governance
procedures or its risk and control procedures
basis of audit opinion
we conducted our audit in accordance with
auditing standards issued by the auditing
practices board an audit includes examination
on a test basis of evidence relevant to the amounts
and disclosures in the financial statements and
the auditable part of the directors’ remuneration
report it also includes an assessment of the
significant estimates and judgements made by
the directors in the preparation of the financial
statements and of whether the accounting
policies are appropriate to the company’s
circumstances consistently applied and adequately
disclosed
we planned and performed our audit so as to
obtain all the information and explanations which
we considered necessary in order to provide us
with sufficient evidence to give reasonable
assurance that the financial statements and the
auditable part of the directors’ remuneration
report are free from material misstatement
whether caused by fraud or other irregularity or
error in forming our opinion we also evaluated
the overall adequacy of the presentation of
information in the financial statements
opinion
in our opinion
– the financial statements give a true and fair
view of the state of affairs of the company and
the group at 31 december 2002 and of the
profit and cash flows of the group for the year
then ended
– the financial statements have been properly
prepared in accordance with the companies
act 1985
– and those parts of the directors’ remuneration
report required by part 3 of schedule 7a to
the companies act 1985 have been properly
prepared in accordance with the companies
act 1985
pricewaterhousecoopers llp
chartered accountants and registered
auditors
london
19 february 2003
independent auditors’ report to the members of associated british ports holdings plc 71 71 71
ordinary shares of 25 pence each – by number of shares held
number of number of
holders  shares 
1 – 1000 4812 431 2515035 08
1001 – 2000 1990 178 3021962 09
2001 – 4000 1802 161 5419100 16
4001 – 20000 2013 180 16285843 50
20001 – 400000 444 40 40310158 123
400001 110 10 260571586 794
t otal 11171 1000 328123684 1000
ordinary shares of 25 pence each – by category of holder
number of number of
holders  shares 
individual 9149 819 26478249 81
bank or nominee 1806 162 287833882 877
other company 148 13 4310666 13
insurance company 29 03 5633579 17
investment trust 14 01 79530 –
other corporate  body 14 01 780502 03
pension trust 11 01 3007276 09
t otal 11171 1000 328123684 1000
substantial holdings
number of  of issued 
the following had notified substantial share interests as at 19 february 2003 shares ordinary capital
i threadneedle asset management 31349807 953
ii mg investment management 28110527 855
iii jupiter asset management limited 26076971 793
iv deutsche asset management 19391195 590
v schroder investment management limited 15234548 463
vi harris associates lp 15056694 458
vii scottish widows investment partnership 14240113 433
viii marathon asset management ltd 13426153 408
ix aegon asset management 12324660 375
x legal  general investment management 10107512 307
shareholder analysis
a individuals 819
b other 181
b
a
a individuals 81
b other 919
a
b
percentage of shareholders percentage of shares 72 associated british ports holdings plc annual report  accounts 2002
group profit and loss  account
2002 2001 2000 1999 1998
£m £m £m £m £m
group turnover
ports and transport  continuing operations 3618 3341 2910 2679 2442 
ports and transport  discontinued operations 279 296 479 422 299 
ports and transport 3897 3637 3389 3101 2741 
property investment 93 108 159 179 201 
property development 308 309 358 231 449 
4298 4054 3906 3511 3391 
profit on ordinary activities before interest
ports and transport  continuing operations 1429 1376 1286 1193 1156 
ports and transport  discontinued operations 36 30 73 76 54 
ports and transport 1465 1406 1359 1269 1210 
property investment 68 80 126 150 167 
property development 120 130 115 82 68 
share of operating profit in associates 105 85 84 73 57 
t otal underlying operating profit 1758 1701 1684 1574 1502 
goodwill amortisation 16 15 08 38 20
provision for restructuring 55 ––––
exceptional items  other – – 08 – –
goodwill and fixed assets impairment – –– 802 – 
t otal operating profit 1687 1686 1668 734 1482 
profit on disposal of discontinued operations 74 – 140 – 12 
profit on sale of fixed assets 07 06 22 33 12 
profit on ordinary activities before interest 1768 1692 1830 767 1506 
net interest payable
group 373 399 458 449 408
associates 15 10 02 – –
interest capitalised 11 12 15 10 08 
377 397 441 439 400
profit on ordinary activities before taxation 1391 1295 1389 328 1106 
underlying profit before taxation 1381 1304 1243 1135 1102 
group financial statistics 2002 2001 2000 1999 1998
earnings per share – basic 309p 278p 306p 01p 211p 
earnings per share – underlying 304p 281p 263p 231p 210p 
dividend per share 1475p 1375p 1275p 1150p 1025p 
net assets per share 308p 294p 285p 262p 271p 
net borrowings as a percentage of equity shareholders funds 446 531 453 599 568
 before goodwill amortisation provision for restructuring exceptional items goodwill and fixed asset impairment profit on disposal of discontinued operations and profit on sale of fixed assets
all comparatives have been restated for the effects of financial reporting standard 19  deferred t ax note 34
fiveyear summary 73
group balance sheet
2002 2001 2000 1999 1998
£m £m £m £m £m
fixed assets
intangible assets 154 239 233 104 724 
t angible operating assets 8340 7980 7443 7119 6924 
t angible property assets 5688 5885 6149 7040 7454 
investments 502 480 504 350 295 
14684 14584 14329 14613 15397 
property developments and land held for sale 383 442 297 218 257 
net current assets liabilities and deferred income 473 353 497 362 301
net borrowings 4501 5089 4407 5422 5563
net assets 10093 9584 9722 9047 9790 
capital and reserves
calledup share capital 820 816 852 862 905 
share premium account 774 709 631 577 535 
revaluation reserve 6279 6417 6421 6609 6128 
other reserves 370 370 339 126 79 
profit and loss account 1850 1272 1479 873 2143 
equity shareholders funds 10093 9584 9722 9047 9790 
group cash flow
2002 2001 2000 1999 1998
£m £m £m £m £m
net cash inflow from operating activities 1991 1652 1915 1776 1803 
dividends received from associated undertakings 24 36 20 15 28 
net interest paid 371 399 466 444 364
t axation 257 282 140 264 285
gross capital expenditure 767 624 889 646 462
sales of fixed assets 34 21 750 645 177 
movement on investment in own shares 13 56 24 26 28
free cash flow 667 460 1214 1056 869 
acquisitions and disposals 291 55 409 24 1195
equity dividends paid 466 445 409 378 358
net cash inflowoutflow before financing 492 40 1214 654 684
issue of shares 48 56 39 37 36 
repurchase of shares – 683 184 542 807
borrowings on acquisition of subsidiary undertakings – – 16 – 212
currency translation differences 48 15 38 08 – 
net increasedecrease in borrowings less cash 588 682 1015 141 1667
net borrowings at 1 january 5089 4407 5422 5563 3896
net borrowings at 31 december 4501 5089 4407 5422 5563
all comparatives have been restated for the effects of financial reporting standard 19 – deferred tax note 34 74 associated british ports holdings plc annual report  accounts 2002
notice is hereby given that the 21st annual general
meeting agm of associated british ports holdings
plc will be held at the queen elizabeth ii
conference centre broad sanctuary  westminster 
london sw1p 3ee on t uesday  15 april 2003 at 12
noon for the following purposes
ordinary resolutions
resolution 1
tha t the directors’ report and the audited accounts
for the year ended 31 december 2002 be received
and adopted
resolution 2 
that the remuneration report as set out on pages
66 to 69 of the annual report  accounts be
approved
resolution 3 
that a final dividend of 825 pence per ordinary
share of the company be declared
resolution 4
that mr r j adam be reelected as a director 
resolution 5
that mr a j adams be reelected as a director 
resolution 6
that mr s j chambers be reelected as a director 
resolution 7
tha t pricewaterhousecoopers llp be reappointed
auditors of the company having previously been
appointed by the board to fill the casual vacancy arising
by reason of the resignation of
pricewaterhousecoopers to hold office until the
conclusion of the next general meeting at which
accounts are laid before the company 
resolution 8
tha t the dir ectors be authorised to set the r emuneration
of pricewaterhousecoopers llp as auditors
resolution 9
that the company be authorised to establish 
the associated british ports longt erm incentive
plan a summary of the rules of which is set out in
the appendix  to the letter from the chairman of the
company to shareholders dated 11 march 2003
and the directors  be authorised to
i do all acts and things necessary to establish and
carry it into effect
ii vote and  be counted in the quorum on any matter
connected with the plan except that no director
may vote or be counted in the quorum in respect
of his own participation and any prohibition in the
articles of association be relaxed
resolution 10
that the directors be and they are hereby generally
and unconditionally authorised to exercise all powers
of the company to allot relevant securities within the
meaning of section 80 of the companies act 1985
in substitution for any existing power to allot relevant
securities within the meaning of the said section 80
up to an aggregate nominal amount of £27409096
being the lesser of the unissued ordinary share
capital and onethird of the issued share capital of
the company during the period expiring on the date
of the agm of the company to be held in 2004 and
at any time thereafter  in pursuance of any offer or
agreement made by the company before such expiry 
special resolutions
resolution 11
that  subject to the passing of resolution 10
above the directors be empowered pursuant to
section 95 of the companies act 1985 to allot
equity securities within the meaning of section 94
of the said act for cash pursuant to the authority
conferred by the said previous resolution as if sub
section 1 of section 89 of the said act did not
apply to any such allotment provided that this
power shall be limited
i to the allotment of equity securities in connection
with an offer of securities open for acceptance for
a period determined by the directors by way of rights
to holders of ordinary shares on the register on a
fixed record date in proportion to their respective
holdings of such ordinary shares or in accordance
with the rights attached thereto but subject to such
exclusions or other arrangements as the directors
may deem necessary or expedient to deal with
fractional entitlements that would otherwise arise
or with legal or practical problems under the law
of or the requirements of any regulatory body or
any stock exchange in any territory
ii to the allotment otherwise than pursuant to sub
paragraph i above of equity securities up to an
aggregate nominal value of £4111364 being
not more than five per cent of the issued ordinary
share capital of the company
and shall expire on the date of the next agm of the
company after the passing of this resolution save
that after such expiry  the directors may allot
securities in pursuance of an offer or agreement made
by the company before such expiry 
notice of meeting 75
resolution 12
tha t the company be generally and unconditionally
authorised to make one or more market purchases
within the meaning of section 1633 of the companies
act 1985 on the london stock exchange of up to a
maximum aggregate amount equal to the lower of
i 328 million ordinary shares of 25p each in the
capital of the company being 10 per cent of the
company’ s issued ordinary share capital as at 19
february 2003
ii 10 per cent of the company’ s issued ordinary share
capital as at the date of passing of this resolution 
at a price per share of not less than 25p and not more
than 105 per cent of the average of the middle market
quotations for such an ordinary share as derived from
the london stock exchange daily official list for the
five business days immediately preceding the day of
purchase unless previously revoked or varied such
authority will expire at the conclusion of the agm of the
company to be held in 2004 save that the company
may purchase ordinary shares at any later date where
such purchase is pursuant to any contract or contracts
made by the company before the expiry of this authority 
by order of the board
hywel rees
company secretary
150 holborn
london ec1n 2lr
11 march 2003
the register of directors’ shareholdings will be
available for reference at the commencement of and
during the continuance of the agm
members entitled to attend and vote at the above
meeting are entitled to appoint one or more proxies
to attend and on a poll to vote instead of them a
proxy need not be a member  t o be effective
proxies must be lodged at computershare investor
services plc registrars the pavilions bridgwater
road bristol bs13 8fb not later than 48 hours
before the time of the meeting 
legislation has now been passed which permits
shareholders to appoint a proxy electronically  t o
submit a proxy form via the internet shareholders
will need an internetenabled pc with internet
explorer 4 or netscape 4 or above a shareholder
reference number srn and a personal
identification number pin which are given on the
proxy form will also be needed to access the
service
use of the electronic proxy appointment service is
entirely voluntary  shareholders may continue to
submit their proxy card by post if desired
pursuant to regulation 20 and schedule 4 of the
uncertificated securities regulations 2001 only
those shareholders registered in the register of
members as at 12 noon on 13 april 2003 shall be
entitled to attend or vote at the agm in respect of the
number of ordinary shares registered in their name at
that time changes to entries on the register of
members after 12 noon on 13 april 2003 shall be
disregarded in determining the rights of any person
to attend or vote at the meeting 76 76 associated british ports holdings plc annual report  accounts 2002 76
associated british 
ports holdings plc
150 holborn
london ec1n 2lr
t 44 0 20 7430 1177
f 44 0 20 7430 1384
prabportscouk 
wwwabportscouk 
associated british ports
150 holborn
london ec1n 2lr
t 44 0 20 7430 1177
f 44 0 20 7430 1384
amports
9240 blount island blvd
jacksonville fl 32226
usa
t 1 904 751 4391
f 1 904 751 1712
wwwamportscom
board of directors
nonexecutive directors
ross sayers chairman
2 3
george duncan
23
aubrey adams
123
tim bowdler
123
stuart chambers
23
derek sach
123
andrew simon obe
123
executive directors
bo lerenius group chief executive
3
richard adam group finance director
 retires on 15 april 2003
1 member of the audit committee 
2 member of the remuneration committee 
3 member of the nomination committee
secretary and registered office
hywel rees fcis
150 holborn
london ec1n 2lr
registered in england no 1612178
auditors
pricewaterhousecoopers llp
1 embankment place
london wc2n 6rh
brokers
cazenove  co ltd
12 t okenhouse y ard
london ec2r 7an
merrill lynch international
merrill lynch financial centre
2 king edward street
london ec1a 1hq
investment bankers
merrill lynch international
merrill lynch financial centre
2 king edward street
london ec1a 1hq
registrars
computershare investor services plc
po box 435
owen house
8 bankhead crossway north
edinburgh eh11 4br
wwwcomputersharecom
solicitors
slaughter and may
one bunhill row
london ec1y 8yy
11 march 2003
2002 annual report  accounts
15 april 2003
annual general meeting
1 may 2003
payment of 2002 final dividend
june 2003
t rading statement – pre2003 interim results
september 2003
publication of 2003 interim results
november 2003
payment of 2003 interim dividend
december 2003
t rading statement – pre2003 fullyear results
february 2004
2003 preliminary results 
march 2004
2003 annual report  accounts
shareholder services
share dealing service
the company’ s brokers cazenove  co ltd
provide a simple lowcost postal share dealing
service for the buying and selling of the company’ s
shares
further information including the necessary forms
can be obtained from cazenove  co ltd 
share schemes department 3 copthall avenue
london ec2r 7bh
t 44 020 7606 1768
share price information
latest share price information can be obtained from
the group’ s website wwwabportscouk 
ceefax t eletext and the cityline service operated
by the financial times
t 44 0906 843 1675
electronic communication
shareholders wishing to receive communications
from the company by email should register online
at wwwcomputersharecomregisteruk
enquiries
administrative enquiries relating to the group’ s
shares should in the first instance be directed to the
registrars
internet
this annual report  accounts and other
information about the group is available at
wwwabportscouk
company information financial highlights
2002 2001 2000
profit and loss account
group turnover – continuing operations £m 4019 3758 3427
underlying operating profit – continuing operations ports and transport £m 1429 1376 1286
t otal underlying operating profit – continuing operations £m 1722 1671 1611
exceptional items £m 26 06 154
underlying interest cover times 47 43 38
underlying profit before taxation £m 1381 1304 1243
profit before taxation £m 1391 1295 1389
underlying earnings per share pence 304 281 263
basic earnings per share pence 309 278 306
dividends
dividend per share pence 1475 1375 1275
underlying dividend cover times 20 21 21
cash flow statement
net cash inflow from operating activities including dividends received from associated undertakings £m 2015 1688 1935
underlying operating profit cash conversion percentage 1146 992 1149
gross capital expenditure £m 767 624 889
free cash flow £m 667 460 1214
repurchase of shares £m – 683 184
balance sheet
net borrowings £m 4501 5089 4407
gearing percentage 446 531 453
net assets £m 10093 9584 9722
net asset per share pence 308 294 285
 before goodwill amortisation and exceptional items
 restated for the effects of financial reporting standard 19 – deferred tax note 34
• uk’s largest and leading ports group
• no single type of cargo accounts for more than 10 of the
group’s uk ports’ turnover
designed by merchant with navyblue  
photography by richard learoyd and lee funnell copyediting by stuart daniel 
printed by wace corporate print
this annual report is printed on accent glacier white paper manufactured from
ecf pulp to iso 14001 international environmental standards
• over 50 of the group’s uk ports’ business for 2003 is
already under contract
• 21 ports provide good geographical spread of risk 78 associated british ports holdings plc annual report  accounts 2002 78 78 associated british ports holdings plc annual report  accounts 2002 78 78 associated british ports holdings plc annual report  accounts 2002 78 78 associated british ports holdings plc annual report  accounts 2002 78 78 associated british ports holdings plc annual report  accounts 2002 78 78 78
associated british ports holdings plc
150 holborn
london ec1n 2lr
t 44 020 7 430 1177
f 44 020 7 430 1384
wwwabportscouk
earnings per share up 8 year on year
over the past three years we have grown earnings
per share and dividends by 10 and 9 each
year respectively
 underlying earnings per share and compound growth rates


Summary:
 10 associated british ports holdings plc annual report  accounts 2002
chairman’s statement
underlying earnings
per share

304p 8
dividend per share 
1475p 7

before goodwill amortisation and
exceptional items
 restated for the effects of frs19 –
deferred tax
underlying earnings per share

00 263p
01 281p
02 304p
in my first statement as chairman i am
pleased to report another strong performance
by the group during 2002 against a
challenging economic background our core
uk ports business has once again performed
satisfactorily producing 3 per cent growth in
underlying operating profit from continuing
operations this performance is reflected in our
financial results with underlying pretax profit up 
6 per cent to £1381 million 2001 £1304 million
underlying earnings per share increased by 8 per
cent to 304 pence per share 2001 281 pence
per share benefiting from both the strong
operating results and a reduction in the weighted
average number of shares following the previous
year’s share repurchase programme
results
the group’s ports and transport business
continued to grow in 2002 contributing £1429
million to operating profit from continuing
operations an increase of 4 per cent on 2001
£1376 million as anticipated as a result of the
programme of noncore property sales lower
rental income reduced the profit from property
investment to £68 million 2001 £80 million
there was also a reduction in profit from property
development which contributed £120 million
2001 £130 million the contribution from the
group’s associated companies however showed
an increase to £105 million 2001 £85 million
reflecting strong performances from our interests
in two containerhandling businesses
southampton container terminals and tilbury
container services the disposal of noncore
investment properties provided an additional profit
of £07 million 2001 £06 million and goodwill
amortisation at £16 million was similar to the
previous year’s charge 2001 £15 million in
addition the group realised an exceptional profit
of £74 million following the sale of amports
usa’s aviation division this was offset to a large
extent by a £55 million restructuring charge
resulting from a review of the group’s cost base
we estimate that this review will save the group 
at least £30 million per year once the programme
of cost savings is fully implemented comparative
figures for 2001 have been restated for the effects
of financial reporting standard 19 – deferred
tax which the group adopted during the year
business highlights
the core ports and transport business
continued to benefit from our strategy of growing
the business with existing and new customers
our rigorouslytargeted capital investment
programme continued to generate further growth
producing projects highlights for the year
included a new £56 million rail siding for humber
international terminal at immingham the new
£40 million southampton international vehicle
terminal and a new £31 million hyundai vehicle
processing facility at baltimore in maryland usa
we are investing £85 million in passenger
terminal improvements at southampton and
developing a £15 million third cruise terminal
there we also reached agreement in principle for
a new £46 million timber terminal for saint
gobain building distribution at newport and the
port of teignmouth will benefit from a £40 million
redevelopment
the public inquiry into our application to
develop a new sixberth container port at dibden
opposite the port of southampton concluded in
dividend per share
00 1275p
01 1375p
02 1475p 11 11
december 2002 we are convinced of the need
for additional deepsea container capacity in the
uk and remain committed to developing this
facility the government’s decision is now expected
either in late 2003 or 2004
our strategy of disposing of noncore assets
continues as well as the us500 million sale of
the aviation division of our us operations we sold
a further £310 million of property and land during
the year sales of noncore assets since 1 january
2000 total £2720 million
dividend
the directors are recommending a final dividend
of 825 pence per share 2001 775 pence per
share which makes a total of 1475 pence per
share for 2002 2001 1375 pence per share if
approved by shareholders the final dividend will
be paid on 1 may 2003 to shareholders who are
on the register at 4 april 2003
board of directors
sir keith stuart retired from the board on 
16 april 2002 having been chairman since 1982
and managing director of the british transport
docks board associated british ports’
predecessor from 1976 sir keith made a very
significant contribution to the group over many
years he led the company’s successful
privatisation – one of the most successful in the
uk – in 1983 and played a major role in the reform
of industrial relations at the ports the board and 
i wish him well
george duncan nonexecutive deputy
chairman will retire from the board at the annual
general meeting on 15 april 2003 he has served
the company as a nonexecutive director for 17
years during which time the group has benefited
greatly from his considerable boardroom
experience 
stuart chambers group chief executive of
pilkington plc one of the world’s leading glass
manufacturers became a nonexecutive director
on 15 october 2002 i am confident that stuart’s
wealth of industrial experience will enable him to
make an excellent contribution to the board
i would like to take this opportunity to thank
everyone across the group for their continuing
efforts our strong results would not have been
possible without their hard work
prospects
while the general economic climate remains
uncertain group performance so far in 2003 has
been satisfactory the group’s uk ports business
has the advantage of many longterm contracts
with quality customers these agreements together
with the group’ s strong cash flow and diverse spread
of geographical and cargo risk lead us to remain
confident of making further progress in 2003
ross sayers
chairman
19 february 2003
“in my first statement as chairman i am pleased to report
another strong performance by the group”