report  accounts 2003 highlights 1
chairman’s statement 2
chief executive’s review 4
financial review 12
directors and advisers 14
corporate governance 17
corporate social responsibility 19
remuneration report 20
directors’ report 26
independent auditors’ report 28
consolidated profit and loss account 29
consolidated balance sheet 30
company balance sheet 31
consolidated cash flow statement 32
notes to the financial statements 33
five year summary of results 41
notice of meeting 42
contents
we provide high quality services for time sensitive deliveries offering excellent delivery performance
supported by information systems which are at the forefront of the industry
the majority of our activity is represented by overnight parcel delivery to businesses in the uk our
other services include international parcels and mail specialist home delivery and same day courier
deliveries throughout the uk according to an independent survey we are the only express delivery
company to increase its market share in each of the last 5 years
business post is one of the uk’s leading express
delivery companies the year ended 31 march 2003 has seen the
successful implementation of the first year of our
three year plan
financial
•
turnover up by 187 to £1563 million
•
profit before tax up by 66 to £161 million
•
earnings per share up by 60 to 212p
•
dividends up 56 to 169p per share
operational
•
successful implementation of new business unit structure with market 
share gains in all business units
•
improved customer retention levels through focus on ontime 
delivery performance
•
expansion and strengthening of the franchise network
•
complementary new services added through the acquisition of 
technical courier bxt
highlights
report  accounts 1 chairman’s statement
i am pleased to report a successful first year’s implementation of
the three year plan that we set out in november 2001
as you may recall from last year’s report  accounts the
strategic review concluded that
• express uk express businesstobusiness parcels should 
remain the group’s core activity
• five existing or new businesses in related sectors  uk pallet 
express international homeserve uk today and uk mail  
should be developed alongside the core activity each led by 
an expert in that sector
• strategic acquisitions should be selectively considered either 
to achieve critical mass in a particular activity or to add a 
complementary service to the existing range of timedefinite
deliveries
• in all its businesses business post should remain a premium 
rather than a volume player and
• the franchise network which business post regards as a 
competitive advantage should be increased in number and 
strength
last year i made the following remarks in my chairman’s
statement about short term prospects the current year is the
first of a three year strategic plan during which we expect to
make substantial progress it will be a year of investment for the
future notably in the franchise network and the group’s newer
and smaller businesses notwithstanding these cost increases
further progress can be expected in the current year
all of the above conclusions of the strategic review have been
put into effect
• express has grown substantially its turnover and increased its
market share to approximately 7 ranking it equal fourth
• all the group’s businesses including uk pallet express as part
of express have developed significantly under the guidance 
of their own managing director except uk mail which has
been unable to commence trading for reasons outside its
control
• business post has made its first acquisition since its flotation
in 1993 the technical courier bxt
• business post is increasingly focused on achieving a 
substantial premium over the prices charged by the high 
volumelow price operators and  
• the franchise network is not just larger but also considerably 
stronger
despite the planned cost increases pretax profit was 66
better at £161 million in line with long standing market
expectations whilst earnings per share were 60 higher at
212p
as i concluded a year ago the board remains very confident
about the group’s longterm potential
peter kane
chairman
“the board remains
very confident about
the group’s long
term potential”
peter kane chairman
2 business post group plc report  accounts 3
business post provides high quality services for
time sensitive deliveries to businesses and
consumers
bxt is a technical courier business acquired in
february 2003 business overview
business post provides high quality services for time sensitive
deliveries offering excellent delivery performance supported by
information systems which are at the forefront of the industry
through partnerships and alliances deliveries can be made
anywhere in the world however all the group’s business has a
uk element and approaching 90 is intrauk
deliveries range from documents to palletbased heavy freight
but the vast majority comprises packages weighing 530kg
the sectors served are overnight businesstobusiness by the
express and international business units overnight businessto
consumer by homeserve and same day by uk today  uk
mail the proposed uk business mail service intends to offer a
two day “business class” service  
express international and homeserve all perform collection and
delivery activity in the uk through a network of 22 corporate and
41 franchised depots linked by an overnight linehaul operation
owned and managed centrally international has its gateway site
at bishops stortford linked to fedex’s own gateway at stansted
uk today currently operates from 24 of the depots but due to
the same day nature of its business operates its own pool of
drivers and does not utilise the overnight linehaul operation
for overnight deliveries packages are sorted into metal cages at
collection locations and these cages transit the country to the
relevant delivery location thereby reducing the level of
manhandling and risk of damage although there is a national
hub at birmingham regional sorting is also carried out at certain
minihub operations this reduces vehicle mileage and enables
later collection times from customers
sales and customer services at each of the depots are supported
by central marketing and sales management and a telesales
operation at uk today
the five year contract with fedex which commenced in
september 2001 accounts for approximately 10 of the group’s
turnover no other customer accounts for over 5  roughly 20
of group turnover is with the high tech sector
the entire market is deregulated with the exception of the uk
letter mail market below 350g or £1 which is regulated by
postcomm an independent body established by statute
a summary of the main developments within each of the
business units is set out on the following pages
chief executives’s review
“the strong growth 
reflects the greater focus
resulting from having
separate business units”
paul carvell chief executive
4 business post group plc express
express which accounted for 79 2002 82 of group turnover is the
groups core uk businesstobusiness parcel service it specialises in next
day deliveries for those customers who need a consistent and reliable
service backed up by sophisticated information systems thereby
differentiating itself from high volumelow price operators
in the year express increased its turnover by 14 to £1238m from £1084m in a
market estimated to have increased only marginally as a result the directors believe
that express has improved its market share from 6 to 7
the strong revenue growth reflects the improved quality of delivery performance
which has assisted new business wins and further reduced customer churn
the improving level of customer demand across the year allowed express to
implement a number of pricing initiatives which have progressively improved yield
and an objective for the current year is to improve further the quality of revenue
this will be achieved through targeted sales and marketing initiatives aimed at
customers who are higher users of premium services and a review of less 
profitable accounts
report  accounts 5
• 79 of group turnover
• market share increased to 7
• delivery performance improved 
even further
carl hutber  express md centre with two of his senior managers
joanne hardy and scott shepherd
express currently represents 79 of the group’s turnover international
6 business post group plc
• 12 of group turnover
• international mail launched july 2002
• new single pack network being 
introduced during 200304
brian jenkins  international md centre in discussion with mark
bischler and michelle walker
international which accounted for 12 2002 9 of group turnover is
responsible for all shipments coming into and leaving the uk and the
republic of ireland and is primarily a businesstobusiness service a high
proportion of its activity derives from business posts agreement with
fedex the worlds largest express transportation company as its global
service participant in the uk under this contract which commenced in
september 2001 business post is responsible for collecting and delivering
parcels for fedex customers in those areas of the uk not directly served by
fedex additionally international handles roadbased shipments within
europe working with a number of partners in the eu countries and offers a
full outbound air express service utilising the worldwide fedex delivery
network 
much of the turnover increase to £182m from £121m results from the full year
contribution from the fedex relationship which continues to work well with very
high delivery performance in addition the international product offerings were
overhauled tariffs simplified and new products introduced in particular international
mail was launched in july 2002 offering business customers an alternative to royal
mail for their overseas postal requirements and this has developed satisfactorily
during the year in the current year a european single pack network is being
developed to complement the existing road services for heavier weight
consignments and this should be operational in the summer of 2003
with the market estimated to be worth approximately £1 billion international has
considerable scope for growth
business post is responsible for collecting and delivering parcels for fedex customers in those areas of the uk not served by fedex homeserve
homeserve which accounted for 5 2002 6 of group turnover is the
groups uk businesstoconsumer parcel service providing a high quality
next day service to residential addresses with full proof of delivery and
trackandtrace facilities
trading comparisons with the prior year are affected by the loss through
administration in january 2002 of homeserve’s previous biggest customer tiny
computers turnover growth of 10 from £69m to £76m reflects an underlying
growth of 130 if tiny is excluded
this excellent performance reflects a growing market and a targeted sales approach
concentrating on the upper end of the market estimated to be worth some £200m
which is both suitable for caged transportation and requires a high quality delivery
performance including it solutions
in order to provide customers and the ultimate recipients of delivery more choice and
greater flexibility a range of new products is being introduced these allow items to
be left in a designated safe location an alternative address or one of 3200 secure
dropoff points principally retail garages and convenience stores
report  accounts 7
• 5 of group turnover
• underlying growth of 130
• alternative delivery options being 
introduced
bill chacksfield  homeserve md centre with kate stansby and
maxine kelly
homeserve provides a high quality next day service to residential addresses uk today
uk today which accounted for 3 2002 1 of group turnover is the groups
uk nationwide sameday courier service it operates out of both corporate
and franchised depots uses separate delivery vehicles and has access to the
national express coach network linking 1200 locations each day
in the year uk today extended its operations from six to 24 group depots and
increased its turnover by 165 from £17m to £45m a further five sites are planned
for the current year and with national coverage allows uk today to target national
contracts in a market estimated at £300m where there are few national operators 
uk today is proving to be a good source of referral work for the groups other
services and several new business wins have been achieved in express and
homeserve from customers impressed by uk todays performance
to complement uk todays services for ad hoc business customers bxt limited was
acquired at the end of february 2003  business posts first acquisition since flotation
in 1993 bxt is a birminghambased technical courier with a focused customer base
for whom services are supplied under contract in the year ended 31 july 2002 bxt
achieved turnover of £43m and pretax profits of £03m the consideration was
£19m net of cash acquired bxt is settling in well plans for the coming year
include leveraging the customer bases to develop crossselling opportunities and
winning more contracts in its existing technical medical and utility sectors
8 business post group plc
• 3 of group turnover
• expansion from 6 to 24 depots
• technical courier bxt acquired in 
february 2003
mark holmes  bxt md and martyn wilson  uk today md
uk today has over 2000 active customers uk mail
uk mail proposes to offer a business mail service in the uk under its
licence from postcomm the independent postal industry regulator this
allows it to collect mail from business customers and undertake the initial
sorting and trunking before delivery to the relevant royal mail delivery
location for local sorting and final delivery 
uk mail did not trade in the year after extensive negotiations with royal mail failed
to reach an agreement in april 2002 uk mail asked postcomm to determine a tariff
for access to royal mails delivery network that proposed determination has only
recently been received and will be followed by a period of public consultation  the
progress towards commencing the service has been frustratingly slow for reasons
outside the groups control however costs £04m have been kept to a minimum
with the uk market for business mail estimated to be worth some £5bn this
continues to represent a substantial and exciting opportunity however no
contribution to profit should be assumed for the current financial year 
report  accounts 9
• uk mail awaiting final determination
• costs being kept to a minimum
• uk business mail market estimated 
at c£5 billion
guy buswell  uk mail md left with ian paterson and lisa randle
uk mail is at the vanguard of the introduction of competition into the uk business mail market network services 
network services is responsible for providing high quality collection and delivery
services to the groups business units at a low unit cost across the year a tight control
over costs was maintained with particular focus on reducing the use of third party
labour and the level of insurance claims in addition the first phase of a change in
overnight linehaul arrangements was implemented to reduce the number of vehicle
movements and improve operational efficiencies the principal element of this project
is the introduction of doubledecked trailers and capital expenditure of £09m was
incurred during the year as part of this process a further £13m will be spent in the
current year as the next stages of the project are implemented 
an integral part of network services is represented by business posts franchised depots which
provide a high quality local service and entrepreneurial spirit as indicated previously further
investment has been made in the franchise network during the year through increased payments and
loans introduced from 1 april 2002 this investment to finance expansion and generate improved
sales growth and stability within the franchise network is already bearing fruit
relationships with franchisees have been strengthened through the creation of a franchise board of
management involved in the selection of new franchisees and discussing issues of common interest
in addition a share option scheme was introduced in the summer of 2002 to enable franchisees to
share in the broader success of business post and to align more closely their interests to those of
business posts shareholders
in addition to providing collection and delivery services to the group’s business units network
services is also responsible for customer service during the year a new customer relationship
management system discovery was introduced and the level of staff training was significantly
increased these investments are already evident in the improving level of customer demand and
further investments will be made in the current year
10 business post group plc
discovery  business post’s new customer
relationship management system
linehaul changes were implemented to reduce the number of vehicle movements and improve operational efficiencies staff and associates
over the past 12 months the group has demonstrated the initial success 
of the three year plan in particular the strong growth reflects the greater
focus resulting from having separate business units each with its own
dedicated team led by a specialist managing director
the group has also made significant progress in its human resource management
during the year and has set targets for improving employee satisfaction and reducing
staff turnover the level of staff training has significantly increased an employee
consultative group has been introduced and a culture of performance management
is being established
as a service company we are entirely dependent upon our staff and associates to
provide our customers with a high quality service and i would like to express my
thanks to all of them for helping us to achieve substantial progress over the past
year
paul carvell
chief executive
report  accounts 11
the first employee consultative group meeting held in april 2003
training express is a mobile facility which has enabled a significant increase in staff training revenues
2003 2002 increase
turnover £1563m £1317m 187
all four of the group’s operating business units contributed to the 19 turnover
increase  express 11 international 5 homeserve 1 and uk today 2
on a likeforlike basis the turnover increase was approximately 17 this reflects
the fedex contract being included in international for 12 months in 2003 but only
seven months in 2002 the tiny computers business with homeserve being limited to
10 months in 2002 and none in 2003 and the one month of postacquisition revenue
from bxt in 2003
turnover growth increased in the second half reflecting new business wins notably
systemax europe from september 2002 and improved levels of customer retention as
a result of the continued focus on ontime delivery performance
profit
2003 2002 increase
gross profit £342m £316m 82
operating profit £156m £146m 68
pretax profit £161m £151m 66
as predicted last year profit margins have been impacted by a number of cost increases relating to investments for the future  the
principal areas of additional expenditure are higher payments to franchisees the creation of the new business unit structure increased
levels of staff training and customer service and the implementation of a new customer relationship management system “crm”
the total effect of these investments has been to reduce profits by some £4 million although this impact has been mitigated by improved
efficiencies tight cost control and operational gearing
further investments will be made in the current year however it is expected that additional efficiencies will offset this impact and that
profit margins should be maintained at 2003 levels
earnings and dividends
2003 2002 increase
earnings per share  basic 212p 200p 60
earnings per share  diluted 212p 200p 60
dividends per share 169p 160p 56
reflecting an effective tax rate of 304 2002 298 earnings per share increased by 60 to 212p from 200p at this level dividends per
share of 169p up 56 are again covered 125 x  the board’s policy is to increase both dividends and dividend cover progressively
cash flow 
before dividends paid of £86 million in 2003 and £82 million in 2002 the cash inflow was £35 million and £87 million respectively
after dividends there was an outflow of £51 million in 2003 and an inflow of £05 million in 2002
in comparing the two years the acquisition in february 2003 of bxt the technical courier business accounts for almost £2 million
the other significant item is the £47 million increase in working capital this is primarily the consequence of the rapid growth in the
business although there were also some smaller timing differences at last yearend the working capital position has been held at the
same level as the interim stage despite further growth in the company through a reduction in debtor days from 51 to 48
net capital expenditure at £41 million exceeded last year’s £33 million the principal categories of capital expenditure in the year were
vehicles on which £19 million was spent including £09m for the acquisition of doubledecked trailers to improve operational
efficiencies and it on which £19 million was spent in part relating to the new crm system  in the current year capital expenditure is
expected to increase further to over £5 million as additional doubledecked trailers are introduced and the company’s security
infrastructure is upgraded
“the after tax return 
on average net assets 
has increased to 251”
peter fitzwilliam 
finance director
financial review
12 business post group plc balance sheet
2003 2002
net cash £16m £67m
equity shareholders’ funds £458m £434m
the balance sheet remains strong with substantial net current assets and net cash  goodwill totalling £17 million on the
acquisition of bxt will be written off over 20 years
with net assets up 55 at £458 million the posttax return on average net assets has increased to 251 2002 249
exposure to risk
the group is not significantly exposed to the effects of fluctuations in exchange rates since  all income is billed in sterling and costs
denominated in foreign currency represent less than 5 of all expenditure
the group is not significantly exposed to either interest rate risk or liquidity risk as it has little or no borrowings during the year it
has utilised an overdraft facility for working capital requirements and the acquisition of bxt and a period of overdraft is expected in
the current year it is expected that any future acquisitions will be financed from term loans
treasury policy
the treasury function is run prudently with cash invested in low risk cash deposits the group uses a deposit account in euros to
hedge the group’s limited exposure to purchases denominated in european currency and gains and losses on the retranslation of this
account offset increases or decreases in the sterling equivalent value of foreign purchases at the year end the balance on this
account was £05 million
share price performance
the company’s shares opened the
financial year at 421p but in its early
months fell with the uk stock market in
general
from september the shares
outperformed on expectations of
reassuring interim results which were
confirmed in midnovember from
december however business post’s
shares could not withstand the malaise
surrounding equities and this together
with the disappointing delay to the
postcomm determination caused them to
weaken before recovering from february
to end the year at 354p
over the course of the year business post’s shares have outperformed the ftse support services index by 42
peter fitzwilliam
finance director
report  accounts 13 michael kane 53  
nonexecutive director
joined business post in 1974
became managing director in 1984
chief executive in november 1995
and nonexecutive director in march
1997 acted as chief operating
officer from july 2000 until resuming
his nonexecutive role on 1 april
2001 
standing  from left to right
seated  from left to right
richard saville 54  
nonexecutive director
is the finance director of halfords
and a nonexecutive director of
alumasc was the finance director of
george wimpey from 1994 to may
2001 he was appointed to the board
on 1 october 1998 
dennis clark 59  
nonexecutive director
has been the finance director of
hunting since 1989 he was
appointed to the board on 1 october
1998 
bill cockburn cbe td 60  
deputy chairman
is nonexecutive chairman of parity
group and a non executive 
director of awg was chief
executive of the post office from
1992 to 1995 chief executive of wh
smith from 1995 to 1997 and group
managing director of bt from 1997
to 2001 he was appointed as a non
executive director on 1 april 2002
peter fitzwilliam 43  
finance director
joined the board on 1 february 1999
from rank group where he was head
of finance at odeon cinemas
previously he was with
pricewaterhousecoopers 
guy buswell 41  
commercial director
joined business post in 1989 and
was appointed sales director in 1992 
after a period elsewhere in the 
industry he rejoined the company in
1997 and was appointed to the board
on 12 august 1998 became
managing director of uk mail from 
1 july 2002 and commercial director
from 1 april 2003
peter kane 56  
chairman
founded the company and with
michael kane his brother was
responsible for its development until
becoming a nonexecutive director in
1996 after a period as chief
executive from august 1998 he
resumed his nonexecutive role on 
1 april 2001 and was appointed
chairman on 10 july 2001  
paul carvell 48  
chief executive
joined the board on 27 february
2001 from christian salvesen where
he was managing director of the
industrial division prior to that he
held a number of senior positions 
in the logistics and express parcels
sectors 
russell hodgson 54  
group operations director
joined the board on 2 january 2001
from jacobs holdings he has spent 
25 years in the parcel industry
holding a number of senior positions
alec ross 47  
it director
joined the company in june 1997
with 20 years experience in systems 
development in transport and 
logistics and was appointed to the
board on 15 september 1998 
directors  advisers
14 business post group plc bankers  the royal bank of scotland 6263 threadneedle street   london   ec2r 8la
financial advisers  hawkpoint partners   4 great st helens   london   ec3a 6ha
stockbrokers  arbuthnot securities   2 lambeth hill   london   ec4v 4gg
auditors  pricewaterhousecoopers llp   harman house   1 george street   uxbridge   middlesex   ub8 1qq
solicitors  dechert   2 serjeants’ inn   london   ec4y 1lt                    eversheds   115 colmore row   birmingham   b3 3al
registrars  computershare services   po box 82   the pavillions   bridgwater road   bristol   bs99 7nh
registered office  express house   464 berkshire avenue   slough   sl1 4pl
report  accounts 15
business post uses doubledecked trailers to improve operational efficiency 16 business post group plc
deliveries range from palleted heavy freight to
documents and small packages
scanning is central to our track and trace system corporate governance
the listing rules of the uk listing authority require listed companies to
disclose how they comply with the principles of good governance and code of
best practice known as the combined code this statement which
incorporates the statement on corporate social responsibility explains how
the company has applied the principles of good governance set out in section
1 of the combined code and complied with the code of best practice
the board
during the year business post has maintained an equal balance of executive
and nonexecutive directors biographical details of all directors are set out in
the directors and advisers statement of the five nonexecutive directors two
are judged to be independent according to the guidelines set out by the
association of british insurers all the nonexecutive directors make a
significant contribution to the functioning of the board and its committees and
no one individual or group dominates the board’s decisionmaking process
although the combined code recommends that a majority of nonexecutive
directors should be independent the board believes that it has maintained an
appropriate balance of directors bringing a wide range of skills and
experience to the board
all directors are required by the company’s articles of association to submit
themselves for reelection at least every three years the names of those
directors standing for reelection to the board this year are set out in the
notice of the forthcoming annual general meeting 
the board’s focus is on strategy formulation policy and control there is a
formal schedule of matters reserved for decision by the board which retains all
major operational and risk management decisions with the board
these include the approval of major items of expenditure or commitment
including acquisitions major operational projects including new contract
wins financing including leasebuy decisions and the use of derivatives and
insurance and changes in policy relating to the franchise network the board
routinely monitors the various financial operational and commercial risks
facing the company through reports from management
the chairman is primarily responsible for the working of the board and the
chief executive for the running of the business and implementation of board
strategy and policy the board meets formally at least 9 times a year with
other meetings as necessary the board receives reports in advance of each
meeting from the chief executive and finance director addressing the
financial performance of the company and developments since the previous
meeting with further reports on particular issues as appropriate all directors
have access to the advice and services of the company secretary and there is
a procedure whereby directors wishing to do so in the furtherance of their
duties may take independent professional advice at the company’s expense
in addition detailed reports are provided to the board on a monthly basis to
enable the board to discharge its duties
the board has a number of committees the principal ones being the audit
remuneration and nomination committees each of these committees operates
within written terms of reference the audit committee comprises
dennis clark chairman and senior independent nonexecutive director richard
saville the other independent nonexecutive director and peter kane the non
executive chairman its duties include the review of the half year and annual
financial statements including significant financial reporting judgements
contained in them before submission to the board the review of the
company’s internal financial control system through reports from management
and internal and external auditors and the review of the scope and
effectiveness of the company’s internal audit function it is also responsible
for the selection of the external auditors the assessment of the scope and
results of the external audit and its cost effectiveness and the independence
and objectivity of the external auditors details of the remuneration committee
are set out in the remuneration report the nomination committee comprises
dennis clark chairman and the other nonexecutive directors the committee
makes recommendations to the board of new board appointments whether
executive or nonexecutive approval of all appointments is a matter for the
board as a whole
directors’ remuneration
details of directors’ remuneration are set out in the remuneration report
relations with shareholders
the company values its dialogue with both institutional and private investors
while carefully recognising statutory constraints concerning the disclosure of
information twoway communication with institutional investors analysts
and private investors is actively pursued and a series of presentations and
meetings are held through the year feedback from these meetings is collated
by the company’s advisers and circulated to the board to keep them informed
concerning the views of shareholders
this year’s annual general meeting will be held on 10 july 2003 at which time
the chairmen of the audit remuneration and nomination committees will be
available to answer shareholder questions the company will continue its
practice of proposing individual resolutions including separate resolutions
relating to the directors’ report and accounts and the remuneration report
report  accounts 17 accountability and directors’ responsibilities
company law requires the directors to prepare accounts for each financial year
which give a true and fair view of the state of affairs of the company and
group and of the profit of the group for that period
after making due enquiries the directors are satisfied that the company and
the group have adequate resources to continue in business for the foreseeable
future for this reason they continue to adopt the going concern basis in
preparing the accounts
in preparing the accounts the directors are required to select suitable
accounting policies and then apply them consistently make judgements and
estimates that are reasonable and prudent and state whether applicable
accounting standards have been followed subject to any material departures
disclosed and explained in the accounts
the directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and group and enable them to ensure that the accounts comply with
the companies act 1985 they are also responsible for safeguarding the
assets of the company and group and for taking reasonable steps for the
prevention and detection of fraud and other irregularities
the board of directors has overall responsibility for ensuring that the group
maintains a system of internal control to provide it with reasonable assurance
regarding effective and efficient operations internal financial control and
compliance with laws and regulations there are inherent limitations in any
system of internal control and accordingly even the most effective system can
provide only reasonable and not absolute assurance
the maintenance and integrity of the business post group plc website is the
responsibility of the directors the work carried out by the auditors does not
involve consideration of those matters and accordingly the auditors accept no
responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website
legislation in the united kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions
the turnbull report issued by the institute of chartered accountants in england
and wales in september 1999 provided further guidance as to how the
combined code principle on internal control should be applied in practice
the board considers that the company has complied with the turnbull report
throughout the year there is a formal ongoing process for identifying
managing and reviewing any changes in the risks faced by the company
this process operates under the direction of and is regularly reviewed by the
board
the key features of the internal control system within the group are
• clearly defined delegation of responsibilities including relevant
authorisation levels
• clearly documented internal procedures set out in operational and
administration manuals
• regular compliance audit visits to all owned and franchised locations
which monitor compliance with procedures and assess the integrity of
financial information
• review of financial procedures by the internal auditor
• close personal involvement of executive directors in monitoring and
managing the main risk areas of the business
• regular information provided to senior management covering financial
performance and key business indicators and
• monthly monitoring of results against budget and forecast with major
variances being followed up and management action taken where
necessary
the board has reviewed the effectiveness of the internal control systems
during the period covered by the accounts this review covered all controls
including financial operational and compliance controls and risk management
details of the group’s activities in relation to its environmental employment
and health and safety responsibilities are set out in the corporate social
responsibility statement
compliance with the combined code
with the exception of the number of nonexecutive directors judged to be
independent the board considers that the company has complied with the
provisions of section 1 of the code of best practice throughout the financial
year
corporate governance
18 business post group plc corporate social responsibility
the board recognises its environmental and employment responsibilities and
devotes significant resources towards both monitoring compliance with
existing standards and improving those standards
environmental
the board is responsible for the group’s environmental policy responsibility
for communicating the policy and monitoring the groups compliance with it
rests with the group’s transport manager and health  safety manager both
of whom report to the group operations director
the policy identifies the following areas as having the most significant impact
on the environment
• consumption of nonrenewable fuel resources through the use of diesel
to fuel vehicles and
• air pollution through vehicle emissions
some examples of the actions taken by the group to minimise its
environmental impact include
• use of automated vehicle routing to eliminate unnecessary mileage
• use of doubledecked trailers to minimise vehicle journeys 
• training drivers in defensive driving techniques to improve fuel usage and
reduce damage
• use of fuel only which is low in both sulphur and lead
• use of roadfriendly air suspension wherever possible reducing road
damage and noise levels
• recycling of old tyres and windscreens
the board will continue to explore ways in which the group can further reduce
its impact on the environment in the future
the group is committed to minimising its environmental impact through target
setting across different areas of the group’s operations eg the proportion of
doubledecked trailers in the fleet average fuel consumption the proportion of
vehicles driven by personnel with minimum attained skill levels and monitoring
actual performance against those targets in addition the group’s central
departments audit the data supplied by the various operational locations in
order to verify performance the group is in the process of implementing an
environmental management system covering all the company’s activities to
formalise its processes further and encourage greater awareness and
accountability towards environmental issues across the group it is anticipated
that implementation of the ems will be completed during the coming year
health  safety 
the group has wellestablished health  safety systems which report
accident rates to the board on a monthly basis health  safety training is a
routine part of employee and management development and the group’s
commitment in this area has recently been recognised by the rospa gold
award for health  safety
employment
following the establishment of a central human resources function at the
beginning of 2002 reporting directly to the chief executive the group has
made significant progress in its hrmanagement and has set targets for
improving employee satisfaction and reducing staff turnover the group’s
employee handbook has been overhauled and reinforces the group’s
commitment to equal opportunities the company’s first ever employee
satisfaction survey has been carried out and this will become an annual
process the level of staff training has significantly increased over the past
year with an average of 21 training days delivered per employee 2002 05
training days the principal areas covered were operations training and
health  safety over the coming year the main emphasis will be on
management development and performance management
the group has recently established an employee consultative group to
facilitate improved communication with staff and enable employees to have
the opportunity to have input into matters that affect them the ecg is
expected to meet at least 4 times in the coming year and provide a valuable
opportunity to enhance the group’s philosophy of openness and consultation
the group is renewing its investors in people accreditation during the coming
year
the group is also an active supporter of charities for every consignment
handled by the group which is paid for using direct debit the group
contributes 1p to the nspcc and national childrens’ homes charities
report  accounts 19 remuneration report
the directors present the remuneration report for the year ended 31 march 2003 this report is unaudited except for those parts which are indicated otherwise
the members of the remuneration committee during the year were richard saville chairman dennis clark and peter kane at their request the group’s chief
executive paul carvell gave advice and assistance to the remuneration committee during the year
remuneration policy
the remuneration policy of the group including the policy for executive directors is determined by the remuneration committee of the board the membership of
which consists entirely of nonexecutive board members the remuneration policy for nonexecutive directors is determined by the board
the objectives of the committee are
1 to ensure that directors and senior executives are fairly rewarded for their individual contributions to the group’s overall performance
2 to ensure that the remuneration of the executive directors and senior executives of the group is set by a committee of board members who have no personal
interest in the outcome of the decisions and who will give due regard to the interests of shareholders and to the financial and commercial health of the group
the remuneration policy of the group in relation to both the current and previous years is to provide competitive remuneration arrangements for executive
directors and senior executives which are commensurate with those of other companies of a similar nature size and standing and which reflect the group’s
business and financial objectives and the goals of corporate governance
remuneration arrangements are addressed within the context of the group’s current performance its progress towards strategic objectives and individual
executives’ personal performance in developing remuneration arrangements the remuneration committee and in regard to nonexecutive directors the board
refers to external market survey data
elements of the remuneration package of executive directors
remuneration of executive directors comprises the following elements
base salary
base salaries are determined in relation to job responsibilities and sustained level of individual performance and are reviewed annually
bonuses
the company operates a bonus scheme for executive directors the level of bonus payment is dependent upon the group’s performance evaluated against both
the prior year and annual budget and also upon each director’s achievement of personal objectives set out at the beginning of the year in normal circumstances
the maximum payment is limited to 50 of annual salary and payments in respect of personal objectives may not exceed payments in respect of the group’s
financial performance
benefits
health and sickness insurance schemes are provided for executive directors and include private health cover and permanent health insurance executive directors
receive an annual car allowance and during the year the company made contributions of 125  of each individual director’s base salary into a defined contribution
pension scheme
sharebased incentive schemes
the company utilises both a long term incentive plan and executive share option schemes to provide longer term sharebased incentives for senior executives
the schemes are designed to motivate and reward achievement of a combination of corporate financial targets and enhancement of shareholder value executive
directors also participate in the group’s sharesave scheme specific details of the incentive schemes are shown later in this report
20 business post group plc remuneration report
the targeted composition of each executive director’s remuneration is that 80 is nonperformance related and that 20 is performance related the remuneration
of each nonexecutive director is 100 nonperformance related except that in addition to his remuneration bill cockburn has a longterm incentive arrangement
whereby he is entitled to receive bonuses if the profit of uk mail exceeds specified targets within a four year period of the commencement of trading
directors’ service contracts
it is business post group plc’s policy that whilst there should not be a fixed duration in respect of directors’ service contracts each contract contains notice periods
of not more than one year and contains a clause whereby the contractual termination payments do not exceed the director’s remuneration for the previous calendar
year nonexecutive directors are initially appointed for a three year term all directors are required by the company’s articles of association to submit themselves
for reelection at least every three years
the details of the service contracts of those who have served as directors during the year are
contract date notice period contractual
termination payment
guy buswell 010201 6 months 6 months remuneration
paul carvell 260201 12 months 12 months remuneration
dennis clark 011001 3 months none
bill cockburn 010402 3 months none
peter fitzwilliam 010299 6 months 6 months remuneration
russell hodgson 020101 6 months 6 months remuneration
michael kane 011001 3 months none 
peter kane 011001 12 months none
alec ross 010201 6 months 6 months remuneration
richard saville 011001 3 months none
 in the event of termination following a change of control executive directors are entitled to termination payments of 12 months remuneration
performance graph
the graph below compares the total shareholder return for an investment in the ordinary shares of business post group plc with the return for the same investment
in the ftse support services index over a five year period commencing on 1 april 1998 in the opinion of the directors the ftse support services index of which
the company is a constituent is currently the most appropriate index against which the total shareholder return of the company should be measured because it
is widely used by our investors shareholders and management as a measure of performance
report  accounts 21
140
140
100
80
60
40
20
1998 1999 2000 2001 2002
business post gp   tot return ind
ftse support services  tot return ind
source datastream remuneration report
directors’ remuneration
this part of the remuneration report is required to be audited
salary benefits 2003 2002
 fees in kind bonus total total
£000 £000 £000 £000 £000
neil benson  –– –– –– –– 20
guy buswell 110 12 9 131 168
paul carvell 210 13 32 255 312
dennis clark 24 –– –– 24 22
bill cockburn 90 –– –– 90 ––
peter fitzwilliam 125 12 12 149 182
russell hodgson 125 12 12 149 169
michael kane 22 1 –– 23 21
peter kane 60 1 –– 61 46
alec ross 102 11 9 122 148
richard saville 24 –– –– 24 22
892 62 74 1028 1110
 neil benson resigned on 24 july 2001
 bill cockburn was appointed on 1 april 2002 and included in his remuneration are fees of £40000 as a nonexecutive director and fees of £50000 in relation
to consultancy services offered to the company’s business mail subsidiary uk mail
no director waived emoluments in respect of the year ended 31 march 2003
pensions
this part of the remuneration report is audited information
the following amounts were contributed during the year to the directors’ personal pension schemes which are defined contribution schemes
2003 2002
£000 £000
guy buswell 14 9
paul carvell 24 20
peter fitzwilliam 15 11
russell hodgson 16 11
alec ross 13 9
22 business post group plc remuneration report
interests in share options
this part of the remuneration report is required to be audited
details of the options held by each director are set out below
directors’ executive share options
earliest
date of exercise expiry exercise number at granted exercised lapsed number at
grant date date price 1 april in year in year in year 31 march
2002 2003
guy buswell
151200 151203 151207 173p 57803 –– –– –– 57803
051201 051204 051211 3625p 28551 –– –– –– 28551
310502 310505 310512 418p –– 26315 –– –– 26315
86354 26315 –– –– 112669
paul carvell
080601 080604 080608 226p 163716 –– –– –– 163716
080601 080604 080611 226p 13274 –– –– –– 13274
130701 011205 130711 204p 294117 –– –– –– 294117
310502 310505 310512 418p –– 50239 –– –– 50239
471107 50239 –– –– 521346
peter fitzwilliam
151200 151203 151207 173p 62312 –– –– –– 62312
051201 051204 051211 3625p 31274 –– –– –– 31274
310502 310505 310512 418p –– 29904 –– –– 29904
93586 29904 –– –– 123490
russell hodgson
120101 120104 120108 226p 30973 –– –– –– 30973
120101 120104 120111 226p 13274 –– –– –– 13274
051201 051204 051211 3625p 30344 –– –– –– 30344
310502 310505 310512 418p –– 29904 –– –– 29904
74591 29904 –– –– 104495
alec ross
151200 151203 151207 173p 51502 –– –– –– 51502
051201 051204 051211 3625p 25517 –– –– –– 25517
310502 310505 310512 418p –– 24521 –– –– 24521
77019 24521 –– –– 101540
no other directors have been granted share options in the shares of the company or other group entities none of the terms and conditions of the share options
were varied during the year all options were granted in respect of qualifying services
the options were granted at nil cost to the directors and were in respect of past performance the performance criteria for all the above share options were
consistent with the remuneration policy outlined earlier in this report
report  accounts 23 remuneration report
the exercise of options granted prior to 31 march 2001 is subject to the condition that the growth in the company’s earnings per share shall exceed the increase
in the index of retail prices from the date of grant the exercise of options granted after march 2001 is subject to the condition that the growth in the company’s
earnings per share shall exceed the increase in the index of retail prices from the date of grant by more than 3 in addition the exercise of share options granted
to paul carvell in july 2001 is conditional upon the company’s share price exceeding certain targets for a minimum of 100 consecutive days between 48 and 66
months from issue of the 294117 options granted 98039 become exerciseable if the share price exceeds 600p a further 98039 become exerciseable if the share
price exceeds 750p and a further 98039 become exerciseable if the share price exceeds 900p
sharesave scheme
earliest
date of exercise expiry exercise number at granted exercised lapsed number at
grant date date price 1 april in year in year in year 31 march
2002 2003
guy buswell
090101 010204 010804 170p 5698 –– –– –– 5698
paul carvell
030102 010205 010805 290p 3275 –– –– –– 3275
peter fitzwilliam
090101 010204 010804 170p 5698 –– –– –– 5698
russell hodgson
030102 010205 010805 290p 3275 –– –– –– 3275
alec ross
030102 010205 010805 290p 3275 –– –– –– 3275
the market price of the company’s shares at the end of the financial year was 354p and the range of market prices during the year was between 3135p and 4485p
interests in shares
the interests of the directors in the ordinary shares of 10p each of the company were as follows
1 april 31 march
2002 2003
guy buswell 5900 2900
paul carvell 5000 6000
dennis clark 3500 3500
peter fitzwilliam 3500 4500
russell hodgson 2500 4800
michael kane 7000000 7000000
peter kane 27104867 20438201
alec ross 5460 5960
richard saville 4500 4500
all directors’ interests are beneficially held save for 3333334 ordinary shares which are held by beneficiaries who are persons connected with peter kane
there has been no change in the interests set out above between 31 march and 6 june 2003
24 business post group plc remuneration report
long term incentive plan
this part of the remuneration report is required to be audited
director’s interests in the long term incentive plan are as follows
cycle award at 1 april granted exercised lapsed at 31 march
ending date 2002 in year in year in year 2003
guy buswell 310303 020600 16160 –– –– –– 16160
peter fitzwilliam 310303 020600 19551 –– –– –– 19551
alec ross 310303 020600 16160 –– –– –– 16160
no awards were made during the year
awards granted in june 2000 may be exercised between june 2003 and june 2010 the extent to which the awards may be exercised is determined partly by
reference to the company’s earnings per share growth relative to inflation and partly by reference to the company’s total shareholder return performance over the
three years to 31 march 2003 up to 60 of each award is determined by reference to earnings per share growth with no amount exerciseable if compound growth
over the period exceeds inflation by less than 25 the remaining 40 of each award is determined by reference to total shareholder return performance relative
to companies in the ft support services sector with no amount exerciseable if total return is below the median for that comparative group each award is
exerciseable in full only if compound growth in earnings per share exceeds inflation by 175 or more and the company’s total shareholder return is in the upper
quartile for the comparative group based on the company’s performance over the three years to 31 march 2003 40 of the awards granted in june 2000 may be
exercised although the company’s performance is measured over a three year period in order to enhance the retentive impact of the long term incentive plan
only 20 of an award may be exercised after three years with the remaining 20 exerciseable four years after it is granted in addition on the exercise of awards
under the plan or options previously granted under any of the company’s other share option schemes directors are expected to retain 25 of the aftertax profit
in the form of shares until they have acquired a shareholding equal to their basic salaries
in addition to the above the company has a separate long term incentive agreement with bill cockburn in relation to his consultancy services to uk mail
under this agreement mr cockburn will be entitled to receive bonuses if the profit of uk mail exceeds specified targets within a four year period of the
commencement of trading
by order of the board
richard saville
chairman of the remuneration committee
6 june 2003
report  accounts 25 directors’ report
the directors present their report on the audited financial statements for the
year ended 31 march 2003
principal activity and review of the business
the group’s principal activity is the provision of parcel and express mail
collection and delivery services a review of the group’s business during the
year and its prospects for the future is set out in the chairman’s statement
chief executive’s review and financial review
results and dividend
the profit for the financial year of £112 million is reported in the group profit
and loss account an interim dividend of 56p per share was paid on 6 january
2003 and the directors recommend a final dividend of 113p per share payable
on 24 july 2003 to shareholders on the register on 27 june 2003
this when added to the interim dividend will make a total of 169p for the
year 2002 160p
corporate governance
a statement on corporate governance and the group’s compliance with the
combined code is set out in the corporate governance statement
charitable donations
during the year the group made charitable donations of £63783 2002
£48398
directors
details of the directors are shown in the directors and advisers statement
together with their biographical details and dates of appointment
in accordance with the articles of association dennis clark peter fitzwilliam
and peter kane retire by rotation at the annual general meeting and being
eligible offer themselves for reelection
directors’ interests
the interests of the directors and their families as appearing in the register
maintained under the provisions of section 325 of the companies act 1985 in
the share capital of the company on 31 march 2003 are set out in the
remuneration report
substantial shareholders
in addition to the interests of peter kane 385 and michael kane 132
as at 6 june 2003 the company had been notified that ms joanne bailey and
mr john kane the adult children of peter kane are each beneficial holders of
3333333 shares each representing 63 of the issued share capital of the
company in addition the company had been notified that fidelity
international limited and its direct and indirect subsidiaries are nonbeneficial
holders of 2179850 shares representing 41 of the issued share capital of
the company
annual general meeting  special business
the notice of the annual general meeting to be held on 10 july 2003 may be
found at the back of the report and accounts in addition to the routine
business of the meeting the special business set out below will be transacted
on 11 july 2002 resolutions were passed by the company’s shareholders
whereby the directors were given authority under section 80 of the
companies act 1985 until the conclusion of the 2003 annual general
meeting to allot shares up to a maximum of the authorised but unissued share
capital of the company the directors recommend by resolution 8 to be
proposed at the forthcoming annual general meeting that this authority
should be renewed so that it applies until the conclusion of the next annual
general meeting of the company
if resolution 8 is approved by shareholders the directors will have authority to
allot up to 16894986 ordinary shares representing 318 of the ordinary
shares currently in issue of which 2836844 53 of the ordinary shares
currently in issue are currently reserved for issue under the company’s share
option schemes the balance available for allotment is therefore 14058142
ordinary shares representing 265 of the ordinary shares currently in issue
the directors have no present intention of exercising the authority except in
connection with the issue of shares under the company’s share option
schemes or under the business post group plc franchise share option scheme
2002
26 business post group plc directors’ report
in addition the directors were given authority under section 95 of the
companies act 1985 until the conclusion of the 2003 annual general meeting
to allot equity securities for cash other than to existing shareholders in
proportion to their holdings up to an aggregate nominal amount equal to 5
of the issued ordinary share capital the directors recommend by resolution 9
to be proposed at the forthcoming annual general meeting that this authority
should be renewed up to an aggregate nominal amount of £265525 until the
conclusion of the 2004 annual general meeting or 10 october 2004 whichever
is the earlier
at the 2002 annual general meeting the company was given authority under
article 9 of its articles of association and section 166 of the companies act
1985 until the conclusion of the 2003 annual general meeting to make market
purchases of up to 10 of the issued ordinary share capital for cancellation at
a price of not less than 10 pence per ordinary share and not more than 105
of the average of the midmarket quotations for an ordinary share of the
company as derived from the daily official list of the london stock exchange
for the five business days prior to the date of purchase
the directors recommend by resolution 10 to be proposed at the forthcoming
annual general meeting that this authority should be renewed until the
conclusion of the 2004 annual general meeting the directors did not exercise
the company’s power to purchase its own shares in the year ended 31 march
2003 and do not intend to exercise this power other than in circumstances
where they consider this to be in the shareholders’ interests and where this
would result in an increase in earnings per share
employment policy
the group’s policy is to maintain as far as practicable close consultations
with employees on matters likely to affect their interests the company is an
equal opportunities employer and holds an investors in people certificate
the group’s policy and practice is to encourage the recruitment and
subsequent training career development and promotion of disabled persons
according to their aptitudes and abilities and the retention and retraining of
employees who also become disabled during their employment
further information concerning the group’s human resource management
activities is set out in the corporate social responsibility statement
directors and officers liability insurance
the company maintains insurance against certain liabilities which could arise
from a negligent act or a breach of duty by its directors and officers in the
discharge of their duties
supplier payment policy
the group’s policy concerning the payment of its trade creditors is to follow
the cbi’s prompt payers’ code the group endeavours to agree standard terms
of payment with its major suppliers at the commencement of business
suppliers fulfiling the conditions of supply are paid in accordance with the
agreed standard terms other suppliers are paid in accordance with
contractual terms as agreed from time to time the company does not have
trade creditors and accordingly no creditor days calculation is presented
environmental responsibility and health and safety
a statement on the steps taken to operate the business in pursuit of good
environmental and health standards is set out in the corporate social
responsibility statement
auditors
following the cessation of business by arthur andersen the group’s previous
auditors on 31 july 2002 the board reviewed its external audit arrangements
and appointed pricewaterhousecoopers llp to fill the vacancy a resolution to
reappoint pricewaterhousecoopers llp as auditors to the group will be
proposed at the annual general meeting
by order of the board
peter fitzwilliam
company secretary
6 june 2003
report  accounts 27 independent auditors’ report
independent auditors report to the members of business post group plc
we have audited the financial statements which comprise the consolidated
profit and loss account the consolidated and company balance sheets the
consolidated cash flow statement 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  remuneration report the auditable part
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the financial
statements in accordance with applicable united kingdom law and accounting
standards are set out in the statement of directors responsibilities
the directors are also responsible for preparing the remuneration report
our responsibility is to audit the financial statements and the auditable part of
the 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 into 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 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 chairman’s statement the chief executive’s
review the financial review the directors’ report the unaudited part of the
remuneration report and the corporate governance statement
we review whether the corporate governance statement reflects the
companys 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 boards statements on internal control cover all risks and controls
or to form an opinion on the effectiveness of the groups 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 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 companys 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 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 31st march 2003 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 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
uxbridge
6 june 2003
28 business post group plc 2003 2002
notes £m £m
turnover 2 1563 1317
cost of sales 1221 1001
gross profit 342 316
administrative expenses 186 170
operating profit 3 156 146
interest receivable 05 05
profit on ordinary activities before taxation 161 151
taxation 9 49 45
profit for the financial year 112 106
dividends 11 90 85
retained profit transferred to reserves 20 22 21
earnings per share  basic 10 212p 200p
 diluted 10 212p 200p
dividends per share 11 169p 160p
the profit for the financial years presented above is derived from continuing activities and acquisitions see note 15 and includes all recognised gains and losses
for the year
consolidated profit and loss account
for the year ended 31 march 2003
the related notes numbered 1 to 25 form part of these financial statements
report  accounts 29 consolidated balance sheet
at 31 march 2003
2003 2002
notes £m £m
fixed assets
intangible assets 12 17 ––
tangible assets 13 304 295
investments 14 01 01
322 296
current assets
debtors due within one year 16 298 230
debtors due after one year 16 51 29
cash 16 67
365 326
creditors
amounts falling due within one year 17 219 178
net current assets 146 148
total assets less current liabilities 468 444
provisions for liabilities and charges 18 10 10
net assets 458 434
capital and reserves
called up share capital 19 53 53
share premium account 20 99 97
profit and loss account 20 306 284
equity shareholders’ funds 21 458 434
the financial statements on pages 29 to 40 were approved by the board of directors on 6 june 2003 and were signed on its behalf by
peter kane peter fitzwilliam
chairman finance director
the related notes numbered 1 to 25 form part of these financial statements
30 business post group plc company balance sheet
2003 2002
notes £m £m
fixed asset investments
in subsidiaries 14 27 ––
in own shares 14 01 01
28 01
current assets
debtors 16 449 398
cash 16 67
465 465
creditors
amounts falling due within one year 17 60 57
net current assets 405 408
net assets 433 409
capital and reserves
called up share capital 19 53 53
share premium account 20 99 97
profit and loss account 20 281 259
equity shareholders’ funds 433 409
the financial statements on pages 29 to 40 were approved by the board of directors on 6 june 2003 and were signed on its behalf by
peter kane peter fitzwilliam
chairman finance director
at 31 march 2003
the related notes numbered 1 to 25 form part of these financial statements
report  accounts 31 consolidated cash flow statement
2003 2003 2002 2002
notes £m £m £m £m
net cash inflow from operating activities 24 137 159
returns on investment and servicing of finance
interest received 05 04
taxation 49 43
capital expenditure and financial investment
purchase of tangible fixed assets 43 36
proceeds from sale of fixed assets 02 03
net cash outflow for capital expenditure and financial investment 41 33
acquisition
purchase of subsidiary undertakings 15 27 ––
net cash acquired with subsidiary undertakings 15 08 ––
net cash outflow for acquisitions 19 ––
equity dividends paid 86 82
net cash outflowinflow before financing 53 05
financing
issue of ordinary share capital 02 ––
decreaseincrease in cash 25 51 05
for the year ended 31 march 2003
the related notes numbered 1 to 25 form part of these financial statements
32 business post group plc notes to the financial statements
1 accounting policies
accounting convention
the financial statements are prepared under the historical 
cost convention and in accordance with applicable accounting standards
the  principal accounting policies which have been applied consistently
throughout the year and the preceding year are summarised below
basis of consolidation
the group financial statements consolidate the financial statements of
business post group plc and its subsidiary companies for the year ended
31 march 2003 advantage has been taken of section 230 of the
companies act 1985 not to include the company’s own profit and loss
account the profit of the company for the year is £22m 2002 £21m
turnover
turnover comprises the value of services provided and income earned in
respect of franchises sold net of value added tax
deferred taxation
deferred tax is provided in full on timing differences between the
recognition of gains and losses in the financial statements and their
recognition in tax computations except that a net deferred tax asset is
recognised only when it can be regarded as more likely than not it will be
recovered deferred tax is provided at current rates and is not discounted
deferred tax assets and liabilities are offset where they relate to taxes
levied by the same tax authority and are in the same taxable entity or
group
foreign exchange
transactions in foreign currencies are recorded in sterling at the rate
ruling at the transaction date monetary assets and liabilities
denominated in foreign currencies are translated at the rate ruling at the
balance sheet date all exchange differences are taken to profit and loss
account as they arise
pension costs
contributions to the group sponsored employees’ personal pension plans
and defined contribution schemes are charged to the profit and loss
account in the year in which they accrue
investments
fixed asset investments are shown at cost less provision for impairment
shares held by the employee share ownership trust for the purposes of
satisfying the company’s commitments under the long term incentive
plan are amortised over the life of the plan
depreciation
depreciation is calculated to write down the cost of tangible fixed assets
to their estimated residual values over the following useful economic
lives
• freehold buildings  fifty years on a straight line basis
• short leasehold premises  the period of the lease on a straight line
basis
• motor vehicles  10 to 333 annually on a reducing balance basis
• plant and equipment  25 annually on a reducing balance basis
• computer equipment  20 to 33 annually on a straight line basis
leases
operating lease rentals are charged to the profit and loss account on a
straight line basis over the period of the lease except for nonoperational
properties where full provision is made for future rental costs less any
rental income up to the first break in the lease provision is also made for
the cost of making good dilapidations where required under property leases
the benefits of rent free periods on property leases are spread evenly
over the period of the lease up to the date of the next rent review
goodwill
purchased goodwill being the excess of the purchase consideration over
the fair value of identifiable net assets of the newly acquired
undertakings is capitalised and written off evenly over its estimated
useful economic life
impairment
the directors carry out a review of the carrying value of intangible and
tangible fixed assets if an event has taken place that suggests that there
could be an impairment in value where in their opinion there has been
an impairment then the assets concerned are written down to their
recoverable amount the amount of the impairment is charged to the
profit and loss account
acquisitions and disposals
the results of businesses acquired or disposed of are consolidated from
or to the effective dates of acquisition or disposal on the acquisition of
subsidiary undertakings or businesses the acquisitions cost is allocated
against the fair value of net assets acquired after adjustments to bring
accounting policies into line with those of the group
report  accounts 33 notes to the financial statements
2 segmental analysis of results
turnover £m continuing acquisitions total total
classes of business operations 2003 2003 2003 2002
£m £m £m £m
express 1238 –– 1238 1084
international 182 –– 182 121
homeserve 76 –– 76 69
uk today 42 03 45 17
other 22 –– 22 26
consolidated turnover 1560 03 1563 1317
cost of sales 1220 01 1221 1001
gross profit 340 02 342 316
administrative 185 01 186 170
operating profits 155 01 156 146
the business does not allocate or apportion any costs or assets to any business segments all turnover originates in one geographical area being the
united kingdom
3 operating profit
2003 2002
£m £m
operating profit is stated after chargingcrediting
depreciation 33 36
operating lease rentals payable  plant and machinery 41 35
 other 18 14
operating lease rentals receivable 09 01
auditors’ remuneration  includes fees for audit and non audit services 01 01
 this includes £10000 2002 £10000 for the audit of the company
4 employees
2003 2002
number number
the average number of persons including executive directors
employed by the group during the year was as follows
administrative 139 126
operational 1468 1326
1597 1452
5 employment costs
2003 2002
£m £m
the employment costs incurred by the group including
executive directors were
wages and salaries 241 212
social security costs 20 20
other pension costs 05 04
270 236
6 pension costs
the group sponsors employees’ personal pension plans contributions were made by the group at rates of between 2 per cent and 5 per cent of the eligible
employees’ salaries in the year ended 31 march 2003 the directors’ pension arrangements are set out in the remuneration report
34 business post group plc notes to the financial statements
7 ultimate controlling party
p kane a director of the company and members of his close family and certain family trusts the beneficiaries of which are persons connected with p kane
control directly and indirectly 510 of the issued share capital of the company during the year certain family trusts the beneficiaries of which are persons
connected with p kane transferred 3333333 shares to ms j bailey and mr j kane the adult children of p kane each representing 63 of the issued share
capital of the company in addition his brother m kane controls a further 132 of the issued share capital of the company
8 directors’ remuneration
details of directors’ remuneration are set out in the remuneration report
9 taxation
2003 2002
£m £m
the charge for taxation is based on the profit for the year and comprises
uk corporation tax at 30 2002 30 49 45
the differences between the total current tax shown above and the amount calculated by applying the standard rate of uk corporation tax to the profit before
tax is as follows
2003 2002
£m £m
profit on ordinary activities before tax 161 151
tax at 30 2002 30 thereon 49 45
expenses not deductible for tax purposes –– ––
depreciation in excess of capital allowances –– ––
49 45
10 earnings per share
the basic earnings per share has been calculated by dividing the profit for the financial year of £112m 2002 £106m by the weighted average number of
ordinary shares in issue for the year ended 31 march 2003 of 53048564 2002 53012798 diluted earnings per share have been calculated by adjusting
the weighted average number of ordinary shares by 66914 2002 28403 for the effect of the exercise of share options increasing the number of shares to
53115478 2002 53041201
11 dividends
2003 2002
£m £m
interim of 56p 2002 53p paid on 6 january 2003 30 28
final of 113p 2002 107p payable on 24 july 2003 60 57
90 85
total dividends per share 169p 160p
dividends amounting to £5915 2002 £5600 in respect of the company’s shares held by an employee share trust note 14 have been deducted in arriving
at the total dividends shown in the profit and loss accounts
12 intangible fixed assets  the group
group goodwill
£m
cost
at 1 april 2002 ––
additions 17
at 31 march 2003 17
aggregate amortisation
at 1 april 2002 ––
charge for the year ––
at 31 march 2003 ––
net book amount at 31 march 2003 17
the goodwill arising on the acquisition of bxt limited is being amortised on a straight line basis over 20 years this period is the period over which the
directors estimate that the value of the underlying business acquired is expected to exceed the value of the underlying assets the company had no intangible
fixed assets at 31 march 2003 2002 £nil
report  accounts 35 13 tangible fixed assets  the group
freehold short
land and leasehold motor plant and
buildings premises vehicles equipment total
£m £m £m £m £m
cost
1 april 2002 229 04 48 168 449
additions 01 03 14 26 44
disposals –– –– 07 02 09
31 march 2003 230 07 55 192 484
depreciation
1 april 2002 17 02 29 106 154
disposals –– –– 05 02 07
charge for the year 03 –– 05 25 33
31 march 2003 20 02 29 129 180
net book value
31 march 2003 210 05 25 64 304
31 march 2002 212 02 19 62 295
included in freehold land and buildings is freehold land with a cost of £77m 2002 £77m which is not depreciated included in short leasehold premises are
short leasehold improvements at a cost of £07m 2002 £04m and a net book value £05m 2002 £02m
the company owned no tangible fixed assets at 31 march 2003 2002 £nil
14 investments
own shares
£m
cost
1 april 2002 and 31 march 2003 02
amortisation
1 april 2002 and 31 march 2003 01
net book value
31 march 2002 and 31 march 2003 01
the company established an employee share ownership trust on 4 august 1999 whose purpose is to hold shares in the company for subsequent transfer to
employees under the long term incentive plan at 31 march 2003 the trust held 35000 2002 35000 shares with a nominal value of £3500 2002 £3500
in the company which have been conditionally gifted to employees under the plan the market value of these shares at 31 march 2003 was £01m
2002 £01m dividends are waived on all shares held by the trust until vested and the cost of the shares purchased are charged to the profit and loss account
over the relevant performance periods costs of administration are dealt with in the profit and loss account
notes to the financial statements
36 business post group plc investment in subsidiaries
2003 2002
£m £m
investment in subsidiaries  at cost 27 ––
the company has the following principal wholly owned trading subsidiaries
issued and fully
nature of business paid share capital
of £1 per share
business post ltd parcel and express mail collection and delivery services £1000
homeserve ltd home delivery services £100
uk today couriers ltd sameday courier services £100
bxt limited technical courier services £4000
bxt limited has a year end of 31 july this has not yet been changed due to the short time which has elapsed since the date of acquisition
15 acquisitions
on 28 february 2003 the group purchased bxt limited a technical courier company for a total consideration of £27 millionthe consideration comprised of
a cash payment of £25million of which £04m is held in escrow by solicitors this amount will be released on  bxt achieving predefined commercial and
financial objectives by 31 july 2003 in line with ukgaap  the group has adopted acquisition accounting in consolidating bxt limited’s financial results the
total adjustments required to the book values of the assets and liabilities of the acquired company in order to present the net assets of it at fair value in
accordance with group accounting principles were £01m together with the resultant goodwill arising from the date of acquisition to 31 march 2003 the
acquisition contributed £03m to turnover and £01m to profit before tax
the date of bxt’s financial year end is 31 july and in its last financial year to 31 july 2002 bxt limited made a profit after tax of £01m for the period since
that date to the date of acquisition bxt limited management accounts show
£m
turnover 25
operating profit 03
profit before taxation 03
taxation 01
profit attributable to shareholders 02
book provisional
value revaluation fair value
bxt limited acquisition £m £m £m
tangible fixed assets 03 01 02
debtors and prepayments 07 –– 07
creditors and accruals 05 –– 05
taxation 02 –– 02
cash 08 –– 08
net assets acquired 11 01 10
goodwill 17
total consideration 27
represented by
professional fees 02
consideration settled by cash 25
27
the book value of assets and liabilities have been taken from the management accounts of bxt limited at 28 february 2003 the date of acquisition
notes to the financial statements
report  accounts 37 notes to the financial statements
16 debtors
group company
2003 2002 2003 2002
£m £m £m £m
trade debtors 259 211 –– ––
amounts due from subsidiary undertakings –– –– 449 398
amounts due from franchisees 60 33 –– ––
other debtors 16 04 –– ––
prepayments and accrued income 14 11 –– ––
349 259 449 398
included in amounts due from franchisees are amounts recoverable after more than one year in respect of loans of £51m 2002 £29m for the group and
£nil for the company 2002 £nil
17 creditors amounts falling due within one year
group company
2003 2002 2003 2002
£m £m £m £m
trade creditors 50 51 –– ––
amounts owed to franchisees 29 07 –– ––
corporation tax 22 22 –– ––
other taxes and social security 44 20 –– ––
other creditors –– 02 –– ––
accruals and deferred income 14 19 –– ––
dividends 60 57 60 57
219 178 60 57
18 provisions for liabilities and charges  the group
deferred property
taxation leases total
£m £m £m
1 april 2002 07 03 10
chargedcredited to profit and loss account
onerous leases –– 01 01
dilapidations –– 01 01
31 march 2003 07 03 10
the provision for property leases relates to dilapidations on properties under leases expiring between 1 and 10 years
deferred taxation 2003 2002
£m £m
1 april 2002 07 07
profit and loss account in respect of
accelerated capital allowances –– ––
31 march 2003 07 07
2003 2002
£m £m
deferred taxation potential and provided in respect of
accelerated capital allowances 08 08
other timing differences 01 01
07 07
the company had no provisions for liabilities and charges at 31 march 2003 2002 £nil
38 business post group plc 19 called up share capital
2003 2002
£m £m
1 authorised
70000000 ordinary shares of 10p each 70 70
2 issued allotted and fully paid
53105014 ordinary shares of 10p each 2002 53018336 53 53
all of the shares issued during the year relate to the exercise of share options
3 share options
options granted as at 31 march 2003 under the business post group plc share option schemes were as follows
subscription normal
number price per share exercise date
senior executive share option scheme i 172452 226p  345p 260603 to 080611
senior executive share option scheme ii 807153 173p  345p 260603 to 080611
employee share option scheme 342946 120p  345p 020796 to 151210
sharesave scheme 390893 170p  442p 010203 to 010806
new executive 2001 share option scheme 1281413 204p  418p 310704 to 310512
franchisee 232880 380p 120705 to 120712
during the year 232880 share options were granted to longstanding franchisees of business post ltd
20 reserves
profit and loss account group company
£m £m
1 april 2002 284 259
retained profit for the year 22 22
31 march 2003 306 281
share premium account group company
2003 2003
£m £m
1 april 2002 97 97
premium on shares issued 02 02
31 march 2003 99 99
21 reconciliation of movements in equity shareholders’ funds group
2003 2002
£m £m
retained profit for the year 22 21
new share capital subscribed 02 ––
net addition to shareholders’ funds 24 21
opening shareholders’ funds 434 413
closing shareholders’ funds 458 434
notes to the financial statements
report  accounts 39 40 business post group plc
22 derivatives and other financial instruments
2003 2002
book value fair value book value fair value
£m £m £m £m
primary financial instrument cash at bank and in hand 16 16 67 67
derivative financial instrument fuel forward contract –– 01 –– ––
the fuel forward contract hedges against fluctuations in the purchase price of diesel
23 financial commitments
1 operating leases
at 31 march the group had the following annual commitments in respect of noncancellable operating leases
group group
2003 2002
land and land and
buildings other buildings other
£m £m £m £m
expiring within one year 01 03 02 05
expiring within two to five years 05 30 03 22
expiring after five years 11 –– 09 ––
17 33 14 27
2 capital commitments group
2003 2002
£m £m
contracted for at 31 march –– ––
24 reconciliation of operating profit to operating cash flows 2003 2002
£m £m
operating profit 156 146
depreciation 33 36
increasedecrease in debtors 63 02
increase in creditors 16 09
increase in net amounts due from franchisees 05 34
net cash inflow from operating activities 137 159
25 analysis of net funds
2003 2002
£m £m
1 april 67 62
increasedecrease in cash 51 05
31 march 16 67
all cash was denominated in sterling at 31 march 2003 except for £05m held in euro current accounts a commentary of the group’s treasury policy is
included in the financial review
notes to the financial statements report  accounts 41
five year summary of results
2003 2002 2001 2000 1999
£m £m £m £m £m
turnover 1563 1317 1237 1143 1074
cost of sales 1221 1001 951 848 771
gross profit 342 316 286 295 303
administrative expenses 186 170 163 133 133
operating profit 156 146 123 162 170
net interest receivable 05 05 04 04 05
profit on ordinary activities before taxation 161 151 127 166 175
taxation 49 45 38 50 54
profit for the financial year 112 106 89 116 121
dividends 90 85 80 80 81
retained profit transferred to reserves 22 21 09 36 40
earnings per share  basic 212p 200p 169p 219p 230p
dividends per share 169p 160p 151p 151p 151p
 1999 includes exceptional costs of £08 million
the calculation of earnings per share for the five years ended 31 march 2003 is based on the following weighted numbers of shares in issue
31 march 2003 53048564
31 march 2002 53012798
31 march 2001 53007905
31 march 2000 52903803
31 march 1999 52597219 42 business post group plc
notice of meeting
notice is hereby given that the annual general meeting of business post group plc will be held at the london capital club 15 abchurch lane london ec4 at
12 noon on 10 july 2003 for the following purposes
ordinary business
1 to receive and consider the directors’ report and the accounts for the year ended 31 march 2003 resolution 1
2 to declare a final dividend of 113p net per ordinary share for the year ended 31 march 2003 payable to shareholders
on 24 july 2003 who are on the register on 27 june 2003 resolution 2
3 to consider and approve the remuneration report of the directors resolution 3
4 to reelect dennis clark as a director resolution 4
5 to reelect peter fitzwilliam as a director resolution 5
6 to reelect peter kane as a director resolution 6
7 to appoint the auditors pricewaterhousecoopers llp  and to authorise the directors to determine the auditors’ remuneration resolution 7
special business
to consider and if thought fit to pass the following resolutions which will be proposed as to resolution 8 as an ordinary resolution and as to resolutions 9 and
10 as special resolutions
8 that
81 the directors be and they are hereby generally and unconditionally authorised for the purposes of section 80 of the companies act 1985 the act to
exercise all the powers of the company to allot relevant securities within the meaning of section 802 of the act up to a maximum aggregate nominal
amount of £1689498 provided that this authority shall unless previously revoked or varied by the company in general meeting expire at the conclusion
of the next annual general meeting of the company after the passing of this resolution save that the company may before such expiry make an offer or
agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in 
pursuance of such an offer or agreement as if the authority conferred hereby had not expired and
82 the authority hereby conferred upon the directors replaces the authority conferred upon the directors pursuant to the resolution passed by shareholders
of the company on 11 july 2002 provided that such replacement shall not have retrospective effect
resolution 8
9 that
91 the directors be and they are hereby empowered to allot equity securities within the meaning of section 94 of the companies act 1985 “the act” wholly
for cash pursuant to the authority conferred on the directors by resolution 8 contained in the notice of the annual general meeting of the company of
which this resolution forms part as if subsection 1 of section 89 of the act did not apply to any such allotment provided that this power shall be limited
to
911 the allotment of equity securities in connection with a rights issue open offer or otherwise in favour of ordinary shareholders where the equity
securities respectively attributable to the interests of all ordinary shareholders are proportionate as nearly as may be to the respective number
of ordinary shares held by them and for the purposes of this resolution rights issue means an offer of equity securities open for acceptance for
a period fixed by the directors to
a holders on the register on a fixed record date of ordinary shares in proportion to their respective holdings and
b holders on the register on a fixed record date of other equity securities to the extent expressly required or if considered appropriate by the
directors permitted by the rights attached thereto
but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or
legal or practical problems under the laws of or the requirements of any regulatory body or any stock exchange or otherwise in any territory and
912 the allotment otherwise than pursuant to paragraph 911 above of equity securities up to an aggregate nominal value of £265525
and shall unless previously revoked or varied by the company in general meeting expire on the earlier of 10 october 2004 or the conclusion of the next
annual general meeting of the company after the passing of this resolution save that the company may before such expiry make an offer or agreement
which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or
agreement as if the power conferred hereby had not expired and
92 all authorities conferred under section 95 of the companies act 1985 prior to the date of this annual general meeting be and they are hereby revoked
provided that such revocation shall not have retrospective effect
resolution 9 report  accounts 43
notice of meeting
10 that pursuant to article 9 of the company’s articles of association and section 166 of the companies act 1985 the company be and is hereby authorised to
make market purchases of ordinary shares of 10p each in the capital of the company provided that
101 the maximum number of ordinary shares hereby authorised to be purchased is 5310501
102 the minimum price which may be paid for each ordinary share is 10 pence per ordinary share which amount shall be exclusive of expenses
103 the maximum price which may be paid for each ordinary share is in respect of an ordinary share contracted to be purchased on any day an amount
exclusive of expenses equal to 105 of the average of the midmarket quotations for an ordinary share of the company as derived from the daily
official list of the london stock exchange for the five business days immediately preceding the day on which the ordinary share is contracted to be
purchased
104 the authority hereby conferred shall expire on the earlier of 10 october 2004 or the conclusion of the next annual general meeting of the company
after the date of passing this resolution unless such authority is renewed prior to such time and
105 the company may conclude a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will
or may be exercised wholly or partly after the expiry of such authority and may make a purchase of ordinary shares in pursuance of any such contract 
as if the authority hereby conferred had not expired
resolution 10
by order of the board
peter fitzwilliam
company secretary
6 june 2003
notes
1 a member entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies to attend and on a poll to vote instead of him
such proxy or proxies need not be a member of the company
2 a form of proxy is provided to be effective a form of proxy must be completed signed and together with the original or a notarially certified copy of any
power of attorney or other authority under which it is executed lodged at the company’s registered office at 464 berkshire avenue slough berkshire sl1 4pl
not later than 48 hours before the time of the meeting depositing a completed form of proxy will not preclude a member from attending the meeting and voting
in person
3 there will be available for inspection at the registered office of the company on any weekday except saturday during normal business hours from the date
of this notice until the day of the annual general meeting and at the place of the annual general meeting for a period of 15 minutes prior to and during the
annual general meeting copies of contracts of service between directors and the company and the register of directors’ interests in shares of the company
kept in accordance with section 325 of the act
4 the company pursuant to regulation 41 of the uncertified securities regulations 2001 specifies that only those shareholders registered in the register of
members of the company as at 430 pm on 8 july 2003 shall be entitled to attend and vote at the aforesaid general meeting in respect of the number of shares
registered in their name at that time changes to entries on the relevant register of securities after 430 pm on 8 july 2003 shall be disregarded in determining
the right of any person to attend or vote at the meeting 44 business post group plc
25 june 2003 shares become ex dividend
27 june 2003 record date for dividend
10 july 2003 annual general meeting
24 july 2003 payment of final dividend for the year ended 31 march 2003
november 2003 announcement of interim results and interim dividend for the year ending 31 march 2004
january 2004 payment of interim dividend for the year ending 31 march 2004
financial calendar
operations
express house wolseley drive
heartlands birmingham  b8 2sq
tel 0121 335 1000
fax 0121 335 1003
wwwbusinesspostbiz
finance
464 berkshire avenue
slough berkshire  sl1 4pl
tel 01753 706000
fax 01753 706141
wwwbusinesspostbiz
company number
02800218
head offices
designed and produced by business post marketing


Summary:
 the year ended 31 march 2003 has seen the
successful implementation of the first year of our
three year plan
financial
•
turnover up by 187 to £1563 million
•
profit before tax up by 66 to £161 million
•
earnings per share up by 60 to 212p
•
dividends up 56 to 169p per share
operational
•
successful implementation of new business unit structure with market 
share gains in all business units
•
improved customer retention levels through focus on ontime 
delivery performance
•
expansion and strengthening of the franchise network
•
complementary new services added through the acquisition of 
technical courier bxt
highlights
report  accounts 1